REPORT OF THE SUPERVISORY BOARD

Dear Shareholders,

In the first year without direct effects from the pandemic, the company managed to maintain results of operations at a level well above that from before the pandemic, in spite of no signs of overall economic recovery. The Board of Management’s clear strategic focus and the contributions of all employees in operational implementation made this possible.

The Board of Management and the Supervisory Board worked together in a trusting and successful manner in the year under review. The Board of Management involved the Supervisory Board early on in all decisions of material significance for the company and regularly informed the Supervisory Board on further developments.

Attendance at plenary and committee meetings

The four plenary meetings and 17 of the 21 committee meetings in the 2023 fiscal year took place in person, with individual members joining virtually depending on the situation.

Only one extraordinary meeting of the Strategy and Sustainability Committee, along with three meetings of the Finance and Audit Committee to discuss the financial figures ahead of the quarterly reporting, took place as videoconferences. All members of the Supervisory Board took part in the plenary meetings; only Simone Menne was excused from one meeting. Attendance at plenary and committee meetings in 2023 is shown individually in the table. No member took part in fewer than three-fourths of the meetings. Meetings of the Supervisory Board were held regularly without the Board of Management members, for example on matters regarding the Board of Management and to review the efficiency of the Supervisory Board’s work.

The members of the Board of Management participated in all plenary meetings and reported on the business performance in the divisions for which they are responsible. The CEO and the members of the Board of Management responsible for the respective committee attended the committee meetings. Executives from the tier immediately below the Board of Management and the auditors were also invited to attend for individual agenda items. The members of the Financial and Audit Committee discussed individual matters with the auditors, also without the Board of Management members being present.

Discussions with investors

In the autumn of the past year, I held talks with several investors and proxies on topics that fall under the responsibility of the Supervisory Board. The talks focused on, among other topics, the ESG Roadmap of DHL Group, in particular governance aspects, and the anchoring of ESG criteria in the short- and long-term Board of Management remuneration, as well as the qualifications of the individual members of the Supervisory Board, which are shown in the curriculum vitae of the Supervisory Board members on the company’s website and in table form in the Annual Corporate Governance Statement. The professional experience and expertise of the new Supervisory Board members proposed by the Supervisory Board to the 2024 Annual General Meeting were discussed in detail, in consideration of their independence and the future composition of the committees. The Board of Management’s intention to convene the 2024 Annual General Meeting once again as an in-person meeting was also positively received by the investors.

Key topics addressed in plenary meetings

All meetings centered on reporting and discussion of the Group’s and its divisions’ financial position and business performance, as well as information on the discussions of the committee meetings.

Furthermore, the risks and opportunities for the company associated with environmental, social and governance (ESG) aspects were of importance, as well as the environmental and social impact of the company’s current operations and the implementation of the sustainability strategy. There was also regular exchange with the Board of Management on digitalization, including the developments in the field of artificial intelligence. In addition to the strategic direction of the product portfolio in the Group as a whole, the impact of new regulatory parameters on the business in the Post & Parcel Germany division was also a material topic in the year under review.

In March 2023, we discussed the annual and consolidated financial statements, including the management report and the nonfinancial statement. At the recommendation of the Finance and Audit Committee, we approved the financial statements that had been given an unqualified opinion by the audit firm PricewaterhouseCoopers (PwC). We concurred with the Board of Management’s proposed resolution on the appropriation of the net retained profit and therefore a dividend distribution in the amount of €1.85 per share. In line with the finance strategy, 41.1% of net profit was thus distributed to the shareholders last year. Following many years of having our financial statements audited by PwC, the annual and consolidated financial statements for the 2023 fiscal year were audited by the audit firm Deloitte GmbH Wirtschaftsprüfungsgesellschaft (Deloitte), Munich, as resolved by the Annual General Meeting. The responsible auditors were Prof. Dr. Frank Beine and Dr. Hendrik Nardmann.

Approval of the remuneration report, the report of the Supervisory Board to the Annual General Meeting and the proposed resolutions on the agenda items of the Annual General Meeting, including the (re-)election of Katrin Suder and Mario Daberkow to the Supervisory Board, were also the subject of the March meeting, as well as the determination of the annual bonus of Board of Management members on the basis of the respective degree of target achievement and corresponding recommendations of the Executive Committee. Our discussions also focused on the status of collective bargaining negotiations and the expansion of the volume of the current share program to as much as €3 billion in conjunction with the approval of a potential collection of up to 55 million further repurchased shares. Moreover, in this meeting, the Supervisory Board approved the establishment of a joint venture with Saudi Aramco.

In the meeting in June, we discussed in particular the acquisition of the Turkish parcel service provider MNG Kargo. In addition, the agenda included the change of the Group name from Deutsche Post DHL Group to DHL Group and the approval of the adjustment of business responsibilities on the Board of Management. The allocation of business responsibilities was adjusted so that the Group Brand Marketing function was transferred to the responsibility of John Pearson. John Pearson is already responsible for the Customer Solutions & Innovation function and the Global Commercial Board. With the additional responsibility for the Group Brand Marketing function, significant commercial functions of the Group are now bundled under one umbrella.

In September, our focus was on the reform of the Postal Act and the potential impact on the financial position and results of operations of the company. Without the presence of the Board of Management, we discussed at length the effectiveness and efficiency of our activities in the plenary meetings and in the committees. The subject of our analysis included collaboration within the Supervisory Board and with the members of the Board of Management, the work in the committees, the involvement of the Supervisory Board in the strategic direction of the company and the skills profile of the Supervisory Board. In preparation for this agenda item, the members of the Supervisory Board had completed a detailed questionnaire with selected questions on various topics, for example their satisfaction with the information provided and the frequency and structure of the Supervisory Board meetings. According to the results of our discussions, the Supervisory Board performed its monitoring and advisory duties effectively and efficiently. We will continue to include suggestions made by individual members of the Supervisory Board in our discussions between the annual efficiency reviews.

In our final Supervisory Board meeting of the year in December, we approved the Group’s business plan for 2024 after intense discussion, defined the annual bonus targets for the Board of Management members and addressed the topics of digitalization and the energy transition. We resolved to comply without limitation with the suggestions and recommendations of the German Corporate Governance Code in the year under review.

Material topics of the committee meetings

The six committees of the Supervisory Board prepare the plenary discussions and decisions and meet in advance of the plenary meetings. The committees have also been tasked with making the final decisions regarding a few matters, including Executive Committee approval for secondary activities of Board of Management members or Finance and Audit Committee approval of nonaudit services to be provided by the auditor. In the plenary meetings, the committee chairs provide the members of the Supervisory Board with comprehensive information on the work of the committees and are available for questions and further discussion. The Annual Corporate Governance Statement provides information on the tasks of the committees and their members.

The Executive Committee met four times in 2023 and dealt primarily with Board of Management matters, such as succession planning on the Board of Management, the discussion of the remuneration report to the Annual General Meeting, target achievement for annual bonus calculation for the previous year and the target agreements for the following year.

The Finance and Audit Committee met seven times. Following the election of Deloitte as auditor by the Annual General Meeting, the Finance and Audit Committee commissioned the audit firm with the audit of the annual and consolidated financial statements and the audit review of the 2023 half-yearly report. The committee also commissioned Deloitte with the audit of the nonfinancial statement contained in the management report to obtain limited assurance and reasonable assurance regarding selected indicators and discussed the audit strategy, planning, results and quality with the auditors. The committee also discussed the half-yearly financial report following the review by the auditor and the quarterly financial statements with the CEO and the Board member for finance prior to publication, in the presence of the auditors. The committee monitored the independence of the auditor and had the auditor’s nonaudit services submitted for approval. It also had reports submitted on the nonaudit services rendered in general as well as the status of the utilization of the statutory budget provided for this purpose. As the committee chair, Stefan Schulte was also in regular dialog with the auditor outside of the meetings regarding the progress of the audits and reported on this to the committee. Also covered at the meetings were the accounting process, risk management and the findings of internal audits. Moreover, the committee dealt intensively with the planned reform of the Postal Act and the impact on the financial situation and results of operations of the company. It obtained detailed reports from the Chief Compliance Officer on meaningful aspects of compliance and on updates to the compliance organization and compliance management. The effectiveness and development of the internal control and risk management system was also regularly presented and discussed in the presence of the responsible department head.

The Strategy and Sustainability Committee met five times, primarily addressing the strategic positioning of the individual business units in their respective market segments and the implementation of our Strategy 2025. In addition, the committee dealt with the company’s sustainability strategy and its implementation in detail and on an ongoing basis. The meetings also focused on the acquisition and disposal of equity interest in companies, such as the establishment of a joint venture between DHL Supply Chain and Saudi Aramco.

The Nomination Committee met once during the reporting period. In preparation for the 2024 Annual General Meeting, the committee recommended to the Supervisory Board at the end of 2023 that it nominate Ann-Kristin Achleitner and Hans-Ulrich Engel for election to the Supervisory Board as successors to Simone Menne and Stefan Schulte, as well as Heinrich Hiesinger for reelection. The term of office for each is to be four years.

The Mediation Committee did not meet in the year under review.

The Personnel Committee held four meetings and dealt with, among other topics, the safety of employees, the status of collective bargaining negotiations, the promotion of women in executive positions, the results of the Employee Opinion Survey, the Group-wide corporate strategy for HR development, and the recruitment, retention and development of talents.

Support of the members of the Supervisory Board

The company supports the members of the Supervisory Board in their activities on an ongoing basis. New members are provided with a diverse and comprehensive range of offers that ensure quick and specific onboarding. In addition to the opportunity for thorough discussions with the members of the Board of Management, the chair and, if necessary, other members of the Supervisory Board, they are given a broad array of information on relevant subjects, primarily via access to the digital data room specifically designed for the Supervisory Board, which also contains the minutes from prior Supervisory Board meetings. The costs for attending selected external training events as well as those for subscribing to industry publications are also reimbursed. Along with visits to important operating sites of the Group in conjunction with a Supervisory Board meeting, the members of the Board of Management also offer tours of individual operating units that give the Supervisory Board members the opportunity to develop a full understanding of the operating processes by providing them with in-depth insights into the conditions at the sites. In June, for instance, the Supervisory Board toured the DHL hub in Leipzig, where – following an introductory lecture – it was led through the expansive premises during the busy evening hours and introduced to individual work processes and responsibilities. Various executives from the Express division, some of whom work on-site, were available to answer questions and to make recommendations. Directors’ Day, which takes place twice per year, also enables the members of the Supervisory Board to deepen their understanding of current topics and developments that are relevant to the company. In 2023, the agenda consisted of the topics of regulation of the postal market, ESG key performance indicators as a basis for corporate governance and Board of Management remuneration, as well as updates on supply chain legislation, the Corporate Sustainability Reporting Directive and the EU Taxonomy.

Changes to the Board of Management

With Frank Appel’s resignation after more than 20 years on the Board of Management, Tobias Meyer assumed the role of CEO upon the conclusion of the 2023 Annual General Meeting. He has been a member of the Board of Management since 2019 and was previously responsible for Post & Parcel Germany and Global Business Services. There were no other personnel changes during the reporting period.

Changes to the Supervisory Board

With regard to shareholder representatives, Katja Windt resigned from the Supervisory Board after twelve years of membership effective upon conclusion of the Annual General Meeting on May 4, 2023. Her successor is Katrin Suder, a freelance corporate consultant. Mario Daberkow, a member of the Supervisory Board since 2018 and responsible for Global IT Infrastructure & Services at Volkswagen AG, was reelected by the Annual General Meeting. Katrin Suder and Mario Daberkow were each elected for a term of four years.

The terms of office for Simone Menne, Heinrich Hiesinger and Stefan Schulte end as scheduled following the Annual General Meeting planned for May 3, 2024. In light of the rules of the German Corporate Governance Code, Simone Menne and Stefan Schulte are no longer eligible for reelection following their many years of membership on the Supervisory Board. The Supervisory Board recommends to the Annual General Meeting the election of Ann-Kristin Achleitner and Hans-Ulrich Engel and the reelection of Heinrich Hiesinger, each for a four-year term of office. Both candidates to be newly elected have extensive knowledge in the field of accounting and reporting in particular. The intention is to elect Hans-Ulrich Engel as the Chair of the Finance and Audit Committee, provided he is elected to the Board. The main skills of the members of the Supervisory Board can also be found in the qualification matrix in the Annual Corporate Governance Statement.

The term of office for the employee representatives on the Supervisory Board ended as scheduled at the end of the 2023 Annual General Meeting. Nearly all members were reelected for another term of office. Silke Busch was elected as a new member to succeed Gabriele Gülzau. The Supervisory Board confirmed Andrea Kocsis as Deputy Chair of the Supervisory Board and the reelected employee representatives in their committee positions.

An overview of current Supervisory Board members is provided in Boards and committees.

Managing conflicts of interest

Supervisory Board members neither hold positions on the governing bodies of, nor provide consultancy services to, the Group’s main competitors, nor do they maintain personal relationships with them. No conflicts of interest were reported to the Supervisory Board in the year under review.

Company in compliance with all recommendations of the German Corporate Governance Code

In December 2023, the members of the Board of Management and the Supervisory Board issued a statement declaring that, since the issue of the declaration of conformity in December 2022, all recommendations of the Government Commission German Corporate Governance Code as amended on April 28, 2022, and published in the Bundesanzeiger (Federal Gazette) on June 27, 2022, had been complied with, and that all recommendations are to be complied with going forward. The statements from past years can be accessed on the company’s website. Further information regarding corporate governance within the company can be found in the Annual Corporate Governance Statement.

2023 annual and consolidated financial statements examined

The auditors elected by the 2022 Annual General Meeting for 2023 for the first time, Deloitte GmbH Wirtschaftsprüfungsgesellschaft (Deloitte), Munich, audited the annual and consolidated financial statements for the 2023 fiscal year, including the combined management report, and issued unqualified audit opinions. Deloitte also audited the combined nonfinancial statement for the 2023 fiscal year separately in a limited and, for certain indicators, reasonable assurance engagement and raised no objections. Deloitte also conducted the voluntary review of the half-yearly financial report. No objections were raised. The joint remuneration report for the Board of Management and the Supervisory Board for the 2023 fiscal year was subjected to a formal audit and given a corresponding audit opinion in accordance with Section 162(3) AktG.

After prior examination by the Finance and Audit Committee, the Supervisory Board in its meeting today went through the annual and consolidated financial statements, including the Board of Management’s proposal on the appropriation of the net retained profit and the combined management report including the combined nonfinancial statement for the 2023 fiscal year, and discussed them in depth with the Board of Management. Deloitte reported on the results of the audit before the Finance and Audit Committee and plenary meeting and was available to answer questions. The Supervisory Board concurred with the results of the audit and approved the annual and consolidated financial statements for the 2023 fiscal year, as recommended by the Finance and Audit Committee. No objections were raised on the basis of the final outcome of the examination by the Finance and Audit Committee and the Supervisory Board of the annual and consolidated financial statements, the combined management report including the combined nonfinancial statement, and the proposal for the appropriation of the net retained profit.

The Supervisory Board endorsed the Board of Management’s proposal for the appropriation of net retained profit and the payment of a dividend of €1.85 per share.

The Supervisory Board would like to expressly thank all employees and Board of Management members for their dedicated efforts.

Bonn, March 5, 2024
The Supervisory Board

Dr. Nikolaus von Bomhard
Chairman