The Krones Group

Supplier Code
Partners for the future
Contents

I. Partners for the future Foreword by the Executive Board ................................ 3

Corporate values ............................................................. 4

II. Acting in accordance Complying with legal, social and

with the law and political framework conditions ..................................... 5

ethical principles Respect for human rights .............................................. 6

Anti-corruption at Krones .............................................. 8

Conflicts of interest ......................................................... 8

Dealing with competition ............................................... 9

III. Handling knowledge Data protection .............................................................. 10

and information Information security ..................................................... 10

at Krones Confidentiality ................................................................. 11

The dangers of new media ........................................... 11

IV. Social responsibility Sustainability ................................................................... 12

Health and safety ........................................................... 12

V. Commitment Procedures and processes .......................................... 13

and monitoring Dialogue with business partners ............................... 13

The Krones Integrity System ....................................... 14

Audits ............................................................................... 14

Reporting channels and consequences

in the event of infringements ..................................... 15

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I. Partners for the future

Foreword by the Executive Board

Dear Business Partners,

In its Corporate Guidelines and Krones Code of Conduct, the Krones Group has committed to
supporting and applying the fundamental principles of human rights, fair working conditions,
sustainability and the fight against corruption.

Krones would like its business partners to commit to these principles too, and to share its val-
ues with you. In this Supplier Code, the term „business partner“ is taken to include business
partners on the purchase side, such as suppliers, service providers, licensors and licensees and
other technology partners.

This Supplier Code is an integral part of the sustainable corporate and business strategy and the
Krones anti-corruption programme.
Krones expects its business partners to follow the applicable legal standards such as the OECD
Guidelines, the UN Guiding Principles on Business and Human Rights and the ten principles of
the UN Global Compact, and to work towards compliance with the stricter standards set out in
this document.

Business partners also undertake to monitor and actively promote compliance with the funda-
mental principles at all their sites and in all their activities.

This is the basis for collaboration with a common sense of innovativeness, a willingness to em-
brace change and a consistent commitment to achievement.

Christoph Klenk
Chairman of the Board of Krones AG

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I. Partners for the future

Corporate values

Krones‘ success is founded on the following fundamental strategies: specialist knowledge in me-
chanical engineering and buyer sectors, technical advantage through ongoing, high investments
in research and development, manufacturing with the most up-to-date equipment and in ac-
cordance with high quality standards, around-the-clock global service and the excellent profes-
sional skills and qualifications of our workforce.

Krones expects its business partners to align their value creation with these strategies to ena-
ble collaboration based on a common sense of innovativeness, a willingness to embrace change
and a consistent commitment to achievement.

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II. Acting in accordance with the law and ethical principles

Complying with legal, social and political

framework conditions

Compliance with applicable law goes without saying at Krones. As a global Your contribution as a
company, Krones has to respect diverse social, policy and legal conditions in business partner
all its business processes, market activities and relations with business part- As a business partner, you engage
ners and third parties. Accordingly, Krones adheres to the fundamental prin- in sustainable value creation that
ciple that it must consistently conduct all its business, whether domestically is compatible with the fundamen-
or abroad, in the parent company or in a subsidiary, in line with the statutory tal values of Krones.
regulations, standards, industry standards and its own internal provisions.
As a business partner, you are fa-
miliar with the legal requirements
relevant to your sector and com-
ply with them.
You also respect local laws, values
and ethics for the Krones site in
question.

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II. Acting in accordance with the law and ethical principles

Respect for human rights

As an international company, Krones undertakes to respect human rights

and labour rights along the entire value chain. Business partners also have a
responsibility to respect the following fundamental human rights and work-
ing practices in accordance with local statutory requirements:

Prohibition of forced labour

— No direct or indirect involvement in modern slavery, forced labour or hu-

man trafficking

— No use of labour as a punishment or as a means of ideological or politi-

cal discrimination

— No submission of identity papers in return for work, and workers have

the freedom to end their employment following reasonable notification

Prohibition of child labour

— No employment of workers who cannot prove that they are at least 15

years old (in exceptional cases 14 years old)

— No use of workers under the age of 18 for physically dangerous work or

night work

Humane working conditions and no discrimination

— Equal opportunities and the equal treatment of all employees irrespec-

tive of skin colour, race, nationality, ethnicity, political affiliation, social
background, disability, sexual orientation, religious beliefs, gender or
age

— No inappropriate treatment of workers such as undue mental or physi-

cal pressure, sexual harassment or other inhumane treatment

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II. Acting in accordance with the law and ethical principles

Respect for human rights

Regulated working conditions Your contribution as a

business partner
— The definition and exchange of clearly understandable written informa- As a business partner, you are
tion on working hours, pay and working conditions prior to the com- aware not just of all applicable
mencement of work between employee and employer statutory requirements but also
of all human rights issues, are fa-
— Contractual working hours in accordance with national legislation and miliar with the fundamental provi-
the industry standard in compliance with the following minimum re- sions and requirements, and are
quirements: No more than 48 hours per week or 60 hours per seven vigilant as regards possible hu-
days man rights violations – both in the
company and in the upstream and
— No use of voluntary overtime as a substitute for formal employment ar- downstream value chain. In the
rangements, and reasonable compensation for overtime event of any breach, you shall con-
tact the responsible bodies and
— The payment of sufficient and appropriate pay that is in accordance with report it.
national regulations or the industry standard, and compliance with all
pay and remuneration provisions

— No use of pay deductions as a disciplinary measure, and the obtaining

of employee consent for pay deductions permitted under law

Freedom of assembly and association

— Respect for the independence of trade unions and recognition of the

right to establish and join trade unions and to participate in collective
bargaining

— No preferential or discriminatory treatment of trade union members

Information on
„Health and safety“ and „The environment“ can be found under
„Social responsibility“ from page 12.

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II. Acting in accordance with the law and ethical principles

Anti-corruption at Krones

Business partners are prohibited from offering Krones Group employees Your contribution as a
money in any amount, gifts, loans, discounts or valuables that could incite business partner
the employees to act in breach of their duties. Gifts and invitations that fall As a business partner, you are
within the scope of normal business hospitality, custom and courtesy and aware that Krones follows a ze-
are therefore within the permitted range of gifts and gratuities at Krones ro-tolerance policy regarding the
are exempt. offering or acceptance of bribes,
conflicts of interest and all other
In its anti-corruption programme, Krones undertakes to advance business forms of corruption. Your goal as
through quality and integrity alone. Krones therefore follows a zero-toler- business partner is to advance
ance policy regarding the offering or acceptance of bribes, conflicts of inter- business through quality and in-
est and all other forms of corruption. tegrity.

We also expect our business partners to prohibit, and where appropriate to

sanction, all forms of corruption, bribery and other immoral conduct of this
nature.

Conflicts of interest

Business and private interests are strictly separated at Krones. No individual Your contribution as a
may abuse their own position in the company for their own benefit or for business partner
the benefit of their family or friends. All employees of the business partner As a business partner, you always
are required to disclose any actual or suspected conflicts of interest in rela- indicate that, even in the event
tion to Krones. of conclusion of a contract that is
Krones expects its business partners to reach decisions relating to their satisfactory for both parties, you
business activities with Krones solely on the basis of objective, material cri- cannot consider accepting any
teria. personal benefit.

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II. Acting in accordance with the law and ethical principles

Dealing with competition

Krones supports free and undistorted market competition, and is committed Your contribution as a
to fair dealings with its competitors. In turn, Krones expects the same from business partner
other market participants. To avoid competition law breaches, concerted ac- As a business partner, you comply
tion on prices or terms or agreements on market sharing are therefore pro- with national and supranational
hibited as in line with national and supranational requirements. requirements in the field of com-
petition laws.

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III. Handling knowledge and information at Krones

Data Protection

Data protection concerns all of us. That means that every individual business Your contribution as a
partner is responsible for complying with data protection provisions. Global business partner
electronic exchange of information and access to the internet and intranet As a business partner, you help to
are preconditions for effective working and the commercial success of Kro- protect personal data. Personal
nes. However, digital communication also brings with it a number of risks to data as defined in the data protec-
privacy and to the security of data. Effective protection against these risks is tion law will only be used where
therefore a vital part of information management. necessary for specified and law-
ful purposes. You as a business
partner make the use of the data
transparent for data subjects and
delete the data immediately once
the lawful purpose no longer ap-
plies.

Information security

Protecting confidentiality, availability, and integrity of information and infor- Your contribution as a
mation-processing systems is of vital importance for Krones. This particularly business partner
applies to IT products and IT services for customers. As a business partner, you know
and follow the statutory provisions
Therefore, information security is the responsibility of all employees of the as well as the Krones guidelines
Krones Group as well as their business partners. Best practice, security by on information security. You con-
design, and the need-to-know basis are the basis of action. Krones considers sider information security as a key
risks and state of the art for technical and organisational measures to pro- part of your IT products and ser-
tect information and systems. To coordinate security incidents, vices during their full lifecycle and
Krones has established a team for internal systems as well as orient yourself by current best
a Product Security Incident Response Team to cover products and practices. By continuously improv-
services at customers. Information security is continuously improved based ing your information security, you
on regular assessments. assist Krones in protecting its own
information and IT systems as well
as the information and IT systems
of customers.

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III. Handling knowledge and information at Krones

Confidentiality

For all internal, confidential and protected Krones information, absolute con- Your contribution as a
fidentiality is imperative. Information from suppliers, customers, employees, business partner
advisers and other third parties that is not publicly communicated must be As a business partner of Krones,
protected in accordance with statutory and contractual requirements. you are familiar with the contrac-
tual duty of confidentiality. The
safeguarding of confidential in-
formation is taken very seriously
at Krones. Krones also expects its
business partners to comply with
this fundamental principle.

The dangers of new media

New technologies such as cloud services, social media and digital communi- Your contribution as a
cation are fundamentally changing how we communicate, how we deal with business partner
one another and how we conduct our business. At the same time, they bring As a business partner, you take
new risks, both in our internal business processes and in our communica- the responsibility you have in the
tions with business partners. There is a risk of thoughtlessly disseminating digital sphere very seriously. By so
information that is not intended for public consumption. Protecting custom- doing, you protect not just your
ers and Krones expertise, the basis for our market and technology leader- company but also Krones and its
ship, is the absolute priority here. customers.

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IV. Social responsibility

Sustainability

Krones is committed to corporate sustainability and expects the same com-

mitment from its business partners. The focus is on identifying possible risks Your contribution as a
for employees, the environment or society at an early stage, reducing the business partner
environmental footprint and continuously expanding a positive influence on As a business partner, you ensure
society. Sustainability must always be considered in all key decisions. Busi- that decisions are not taken solely
ness partners are responsible not only for their economic performance but on economic grounds. Drawing
also for the impact of their business activity on the environment, employees, on comprehensive sustainability
society and future generations. management, you weigh up the
possible consequences for the
environment, society and your
employees and how that impact
could be shaped in accordance
with the principles of sustainable
development.

Quality, health, safety and the environment

Krones sets great value on the quality of its products and services, and ex- Your contribution as a
pects the same commitment from its business partners. In practice, this business partner
means the continuous improvement of supply and performance capabil- As a business partner, you act in
ity and the further development of products and services. At the same time, accordance with applicable laws,
ensuring the health and safety of employees through active health man- regulations and binding obliga-
agement and occupational work safety is a priority. The aim is to take pre- tions. As part of strict and exten-
ventive action in identifying potential risk factors, to develop effective pre- sive quality management, you
ventive measures and thus to protect employees from hazards, injuries and continuously assess your pro-
illnesses. In the sphere of environmental sustainability, business partners cesses, products and services to
must also meet their responsibility for a clean environment and for climate find optimisation potential. You
protection, both in the production process and for their products and ser- ensure the safety and health of
vices. your employees with occupational
safety and health management
in line with regulations. On the
question of the environment, you
operate an efficient water, waste
and disposal management system
and a climate-friendly energy and
emissions management system all
along your value chain and specif-
ically for your own products and
services.

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V. Commitment and monitoring

Procedures and processes

Business partners have all necessary and sufficient internal procedures and
processes in place to ensure compliance with all of the above principles.
Krones recognises that the achievement of the standards set out in this
Code is a dynamic process and encourages business partners continuously
to improve their business processes. If required, Krones shall assist with de-
fining milestones and setting up systems to ensure practices continuously
improve.

Dialogue with business partners

Business partners shall communicate the principles set out in this Supplier
Code to their subcontractors and other business partners. They shall re-
quire their own business partners to apply the same standards to their ac-
tivities.

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V. Commitment and monitoring

The Krones Integrity System

The Krones Integrity system is a re-

porting channel for compliance
breaches. The online portal is also
designed for outside parties who
identify an issue with compliance
with laws or regulations in connec-
tion with Krones. To guarantee users
maximum access and data protec-
tion as well as encryption of content
and a secure connection, the sys-
tem is operated by an independent
provider. Notifications can be given
worldwide and round the clock – se-
curely and confidentially.

Audits

Business partners shall permit Krones, through audits, to monitor compli-

ance with these principles or to have an independent third party that is ap-
proved by both parties monitor compliance, and take appropriate action in
the event of non-compliance.

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V. Commitment and monitoring

Reporting channels and consequences

in the event of infringements

Each business partner can, irrespective of the sanctions set out in law, ex- Your contribution as a
pect legal consequences in the event of a breach of statutory regulations or business partner
the Supplier Code. This Code is to be considered as a contractual obligation. Since Krones values an open cor-
Any breach of the principles or requirements set out in this Supplier Code porate culture, every employee
shall be considered a material impairment of the contractual relationship on and outside third parties are en-
the part of the business partner. Krones reserves the right to demand dis- couraged to approach points of
closure of the relevant facts if it suspects non-compliance with the principles contact within the company in
or requirements set out in the Supplier Code (for example in the event of confidentiality if they become
negative media reports). Krones shall also be entitled to terminate some or aware of compliance risks.
all contracts with business partners without notice for cause if the business Krones has a secure whis-
partners demonstrably fail to comply with the Supplier Code or do not work tle-blower portal not just for em-
towards and implement improvement measures after having been set a rea- ployees, but also for its customers,
sonable period of time by Krones in which to do so. suppliers and other business part-
ners: Krones Integrity.

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 Subject to changes · supplier code_en.pdf · 11/21

Krones AG
Corporate Governance
Böhmerwaldstraße 5
93073 Neutraubling
Germany

E-Mail: [email protected]