Efficiency
in Motion
Annual Report2022

At a glance
MAHLE is a leading international development
partner and supplier to the automotive industry
as well as a pioneer and technology driver forthe mobility of the future.

5
Business units
Engine Systems and Components, Filtration and Engine Peripherals,
Thermal Management, Electronics and Mechatronics, Aftermarket

152

Production locations

12
Major research &development centers

71,947

Employees
as at December 31, 2022

EUR 12.4 bn
Sales in 2022

“Successful decarbonization is a key
strategic goal at MAHLE. We areworking flat out on promising technologies for the low-emissions
mobility of tomorrow. Only if the stateand society allow all technologies
for sustainable transport will thetransport transition succeed for the
climate, the economy, and society.”
Arnd Franz

Chairman of the Management Board and CEO of the MAHLE GroupOur self-perception
The MAHLE Group is a leading global development partner in the automotive industry. We are pioneers and experts in our future-relevant strategic
fields of electrification, thermal management (heating and cooling in
the vehicle), and highly efficient and clean combustion engines includinghydrogen, biofuel and e-fuel operation. True to our mission “Efficiency in
Motion,” our operations are technology-open and we develop sustainable
solutions for our passenger car and commercial vehicle customers in all
major global markets as well as for all drive systems, taking into accountthe respective framework conditions and mobility requirements. In doing
so, we rely on our expertise as a systems provider.
We use our strategic orientation to address megatrends such as the increasing importance of sustainability and climate protection, ongoingurbanization, global population growth, digitization, and electrification. We
see these as an opportunity for further growth, but also as an obligation to
design our technologies in a way that makes mobility as environmentallyfriendly as possible. With our background as a foundation, we have ashareholder structure that permits the Group to act both independently andwith its focus on the long term. Within this framework, we are successfully
developing MAHLE as a leading company and attractive employer.
This also means standing by our values—fairness, compliant behavior,cultural diversity and equal opportunities—and modeling them, in ourinteractions with employees, customers, or suppliers. Our founders made it
explicitly clear that assuming social responsibility was one of the company’s objectives. This objective remains binding for us and informs ourentrepreneurial decisions, both now and in the future.

Contents
The company

4

MAHLE Group figures

6

Product portfolio

7

The key points—2022 in retrospect

8

Three tracks. One goal.

12

Technology highlights

20

Preface from the CEO

22

Report of the Supervisory Board

24

Members of the Supervisory Board

26

Members of the Management Board

27

MAHLE worldwide

30

Sustainability

32

Corporate social responsibility

34

The MAHLE FOUNDATION

42

Group management report

44

Fundamentals of the MAHLE Group46

Economic report

51

Additional performance indicators

61

Opportunity and risk report66

Outlook69

Consolidated financial statements

72

Consolidated balance sheet

74

Consolidated income statement

77

Consolidated cash flow statement

78

Consolidated statement of changes in equity

80

Notes to the consolidated financial statements

82

Auditor’s report

100

Imprint/Contact

103

3

The

4

The company

Sustainability

Management report

Consolidated financial statements

company

The company

Sustainability

MAHLE Group figures

6

Product portfolio

7

The key points—2022 in retrospect

8

Three tracks. One goal.

12

Technology highlights

20

Preface from the CEO

22

Report of the Supervisory Board

24

Members of the Supervisory Board

26

Members of the Management Board

27

MAHLE worldwide

30

Management report

Consolidated financial statements

5

MAHLE Group figures

Sales

Employees

MAHLE achieved sales of
EUR 12.4 billion. Compared withthe previous year, our salesrose organically by 9.7 percent.

MAHLE employed 71,947 people
worldwide (reference date:
December 31, 2022).

Research & development

Result from business activities

Despite the difficult environment, weinvested EUR 671 million in research anddevelopment in the year under review.
Therefore, in absolute terms we invested
slightly more than in the previous year.

The result from business activities was
negative at EUR –165 million and wassignificantly below the previous year’svalue of EUR 58 million.

in EUR million

2022

2021

2020

12,434

10,933

9,774

EBITDA

671

793

435

EBIT

60

169

–192
–302

Sales

Result from business activities

–165

58

Consolidated net loss/net income

–332

–108

–434

Tangible fixed assets

2,998

3,008

2,959

461

401

433

1,677

2,050

2,089

5.1

6.0

3.3

71,947

71,29872,184

Capital expenditure on tangible fixed assets (without first consolidation)
EquityDividend paid by MAHLE GmbH *Employees (as at Dec. 31)* Proposal for the specified business year

6

The company
MAHLE Group figures

Sustainability

Management report

Consolidated financial statements

Product portfolio
Thermal Management

Electronics and Mechatronics
Electronic and mechatronic components play a decisiverole in increasing the efficiency of the powertrain and thefurther development of electromobility. MAHLE alreadyoffers the right solutions here with its product ranges ofelectric drive systems, actuators, and auxiliary units aswell as control and power electronics. They are used in manydifferent applications and markets and are closely interlinked technically. This means economies of scale andsynergies can be achieved, which is a crucial success factor
in the automotive industry. MAHLE already sells morethan 8 million e-drives and electric auxiliaries per year for
automotive, urban mobility, and industrial applications.

Filtration and Engine Peripherals
To increase the efficiency and service life of engines andreduce emissions, MAHLE manufactures filters and oilcoolers for motor and transmission applications for combustion engines as well as for alternative drives. MAHLE isdeveloping solutions for active fuel cell drives in the areaof alternative drives. The engine peripherals often differ evenwith an identical basic engine due to different regionalemissions laws, individual body shapes, and different powerclasses.

Innovative products from the field of thermal management
for batteries, fuel cells, power electronics, and electric
actuators enable long cruising ranges, high efficiency, and along service life and thus play a decisive role in shaping
the path toward zero-emissions drives. And in the case of
combustion engines, more efficient cooling systems significantly drive the reduction of fuel consumption. Innovations
in air conditioners enable novel design concepts in thecabin and contribute to a high level of climate comfort in thevehicle as well as to increased efficiency.

Engine Systems and Components
The development of piston systems and cylinder and valve
train components has been one of the core MAHLE
businesses for decades. We understand the interactionof all engine components and can therefore offer ourcustomers optimal solutions. Our products are used worldwide in two-wheelers, passenger cars, commercial
vehicles, and large engines. MAHLE will drive efficiency
progress with state-of-the-art products. We are also
developing engine components for the use of sustainable
fuels such as hydrogen and e-fuels.

Service solutions
We use the expertise of our business units to offer the market
innovative workshop equipment and complete solutions forthe professional maintenance and care of vehicles. The range
includes solutions for all drive systems and vehicle classes.
In addition to tools for classic vehicle diagnostics and for
determining the condition of traction batteries, the portfolio
also includes complete packages for testing of exhaust emissions and the digital calibration of driver assistance systems.

The company
Product portfolio

Sustainability

Management report

Consolidated financial statements

7

The key points—
2022 in retrospect
Significant progress on the road to climate
neutrality, exciting collaborations and projects,
and the joy of more awards: A few highlights.

Q1
All German production locations arecarbon-neutral
Critical milestone on the way to a climate-neutral group: all of the
MAHLE German production locations are carbon-neutral, which
the Group was able to announce as early as January 2022. Company-wide production will be in place by 2040. MAHLE is now
focusing its attention on internal company structures and processes, one field of action: energy efficiency. Increasingly, thecompany is focusing on generating its own electricity and will beable to use its own photovoltaic systems to meet part of its electricity requirements with environmentally friendly solar power.

8

The company
2022 in retrospect

Sustainability

Management report

Consolidated financial statements

Q2

Investment in photovoltaic start-up Sunmaxx PVTIn April 2022, MAHLE Group became a strategic investor and cooperation partner of Sunmaxx PVT, a cleantech start-up for photovoltaic
thermal systems for generating electricity and heat from solar energy.
MAHLE is thus opening up a new business segment in the market for
renewable energies. With the investment, Sunmaxx aims to accelerate
product development, expand sales channels, and prepare for the startof production, which is planned for series production in 2023.

chargeBIG on track for growth
Since April 2022, chargeBIG has been an independent subsidiary of the MAHLE Group as a provider of scalable andlow-cost charging infrastructure for electric vehicles. WithchargeBIG, MAHLE is accelerating its transformation into a
provider of sustainable mobility solutions. Since its market
entry in 2018, chargeBIG has already sold 1,500 charging
points to more than 20 customers. In addition, the subsidiary
has undertaken a development cooperation with power electronics specialists to accelerate the market launch of its recently introduced chargeBIG POWER fast-charging solution.

German Innovation Award formagnet-free MCT electric motor
In June 2022, the German Design Council presented MAHLE with
the German Innovation Award for its magnet-free MCT (magnet-freecontactless transmitter) electric motor and named the “Winner”
company in the category “Excellence in Business to Business
E-Mobility Technologies.” The innovative motor does not require
any rare earth metals and operates without wear or maintenancethanks to its contactless power transmission. Its efficiency is over
95 percent in the most frequently used driving conditions of thedrive system. So far, such efficiency has only been achieved by
Formula e-race cars. The new development can be used in everything from small cars to commercial vehicles.

The company
2022 in retrospect

Sustainability

Management report

Consolidated financial statements

9

Q3

MAHLE and Siemens sign a declarationof intent for wireless charging
MAHLE and Siemens signed a declaration of intent inAugust 2022 to cooperate in the field of wireless charging
systems for electric vehicles. The two companies intend
to jointly develop and test the complete system comprising infrastructure and automotive engineering. One of theareas of focus will be on promoting technological standards for inductive charging technology. In recent years,
MAHLE has already reinforced its development activities
in the field of wireless charging, including two funding
projects by the German Federal Ministry of Economic
Affairs and Climate Action: one for the development of amanufacturer-independent inductive charging system,
the second for the development of a standardized measurement procedure for the electromagnetic compatibilityof inductive systems.

EUR 300 million for zero-emissions vehicle
technologies
The European Investment Bank (EIB) supported the MAHLE
Group’s research and development of zero-emissions vehicle
technologies. In August 2022, it granted a loan of EUR 300 million
for this purpose. This is intended to help MAHLE further advance the electrification of vehicles and the decarbonization ofroad traffic. Investments are being made in the development ofenvironmentally friendly technologies such as electric motors
and battery components, thermal management, cooling andsystems to improve air quality in the passenger cell, hydrogenand fuel cell components, and power electronics and traction
motors. Funding is being provided to locations in Germany andseven other EU countries.

10

The company
2022 in retrospect

Sustainability

Renewable energies on the rise
The MAHLE Group published its Sustainability Report for theyear under review 2021 in September 2022. The report was
examined and confirmed by external auditors for the first time.
It is in line with the standards of the Global Reporting Initiative(GRI) and provides an overview of the progress of the group’s
sustainability strategy. This shows that MAHLE was able toachieve important milestones of its CO2 roadmap, among otherthings, in 2021. Activities around health and safety, sustainable supply chains, and diversity and human rights are also
included in the report.

Management report

Consolidated financial statements

Q4
Increased delivery performance
MAHLE has commissioned a highly automated warehousefor the aftermarket in Olive Branch, Mississippi (USA). From
this location, deliveries for workshops and retailers are evenfaster, and returns are less frequent. Orders can be handled
in record-breaking time: a mere 30 minutes. MAHLE has invested approximately six million euros in the 1,200 m² fully
automated facility. Additional locations in Europe will be
outfitted with similar systems beginning in 2023.

Cooperation in the supply of fuel cell components
Cellcentric and MAHLE signed a declaration of intent in September
2022 to cooperate in the field of fuel cell technology. The joint venture, which is owned equally by Daimler Truck AG and Volvo GroupAB, and MAHLE intend to develop components for commercial
vehicles as well as for other applications with similar requirements.
The focus is on a systems component: the flat membrane humidifier.
Among other things, this innovation improves the durability of thefuel cell, thus ensuring a longer service life. The flat membrane humidifier is intended to be used in fuel cell systems for light commercial vehicles as well as in steady-state systems such as emergency
power units.

The company
2022 in retrospect

Sustainability

Management report

Charging infrastructure for small users
Charging electric vehicles with MAHLE technology is now
also possible on a smaller scale: e.g. in apartment buildings, workshops, or small businesses. With the MAHLE
chargeBIG 6 solution, up to six electric vehicles can be
charged simultaneously at the existing house connectionin the future. This works via a central, small control unit that
supplies three-phase charging points with a charging powerof 11 or 22 kW each. With this charging distributor, twice as
many electric vehicles can be charged as with the solutions currently offered on the market for this area of application. Thanks to certification, outside is also an option.
MAHLE chargeBIG is thus expanding its range for larger
applications to include a new target group.

Consolidated financial statements

11

Three tracks.
One goal.
As part of its MAHLE Strategy 2030+, MAHLE is focusing on three fields oftechnology: electrification, thermal management, and efficient combustion
engines. Only by using all three tracks will we achieve the climate goals.
Our approach is therefore open to all technologies.

The future of mobility is battery-electric or hybrid. This is particularly true for Europe, North America, and China. But clean and efficient combustion engines and hydrogen drives are also part ofthe drive mix of the future. This is because developments will vary
greatly depending on the region of the world. This applies equally
to passenger cars and trucks. In emerging markets in particular,
the market for vehicles with internal combustion engines is expected to continue to grow, for example in India or South America.
Here, among other things, sustainable fuels, such as e-fuels or
biofuels, will rapidly contribute to the decarbonization of roadtransport.
The three technology fields set up the new strategic image for the
MAHLE Group, which is now replacing the long-standing dual
strategy. At the core is the new MAHLE mission “Efficiency in
Motion,” which describes all the Group’s activities in the threestrategic areas and serves as the strategic lever for implementing
the MAHLE vision “We Shape Future Mobility.”

3. Open to technology in the future:
modern combustion engines
Highly efficient and clean combustion engines will remain a relevant
factor worldwide for years to come. MAHLE pursues a strategy of
cost leadership in components for internal combustion engines
and thus remains a reliable partner for its customers. With lean
structures, we will be competitive worldwide and take advantage
of market opportunities. MAHLE will drive efficiency progress inthis segment with state-of-the-art products. We see potential forthe use of fuel cells and hydrogen engines, especially in the commercial vehicle sector. The internal combustion engine can makean immediate contribution to climate protection with non-fossil
fuels, such as e-fuels.

1. Electrification: the E-volution continues
Electrification is where the greatest market momentum lies. Between
2022 and 2026, more than 20 electrified vehicle platforms fromleading passenger car and commercial vehicle manufacturers will
be launched on the market that rely on MAHLE technology andproducts. Our strategy is primarily focused on the e-drive andcharging. We electrify all vehicle classes—from e-bikes and scootersto passenger cars and commercial vehicles. MAHLE already sells
more than 8 million e-drives per year for automotive, industrial, andurban mobility applications.
2. More climate expertise: thermal management
With our in-depth expertise in thermal management, an importantelement of electrification, we are a technology driver for e-mobility.
Our strategy is aimed at further expanding our established status
as a systems provider focusing on energy efficiency and air conditioning. MAHLE is one of the largest suppliers of thermal management systems for drives and passenger comfort with a global development and production network.

12

The company
Three tracks. One goal.

Sustainability

A glimpse of the mobile future:“We Shape Future Mobility” video

Management report

Consolidated financial statements

40 %
70 %

of all commercial vehicles worldwide will
be produced as purely electric withbattery, fuel cell, or hybrid drive by 2035.

will be the market share of newly
produced passenger cars with battery
electric drives as well as fuel celland hybrid drive solutions in 2035.

The company
Three tracks. One goal.

Sustainability

Management report

Consolidated financial statements

13

E-volution with a system solution
The MAHLE Strategy 2030+ is taking huge strides
toward electrification for more sustainable mobility.
At the product level, this continues to mean offering
customers advantages with system competence.
A look inside the glass vehicles shows how this isachieved for passenger cars, transport vehicles,
and e-bikes.

Whether passenger car, commercial vehicle, e-bike or forklift truck,electric drives of all sizes have long been an integral part of mobility. And market penetration will pick up speed in the coming years.
MAHLE has set itself the goal of laying the foundation for thebroad acceptance and widespread introduction of e-mobility with
its systems solutions. The module’s integrated functions simplify
processes and reduce costs for customers.

3
62

One area in which MAHLE sees great potential for more efficiency
is thermal management. Ultimately, the performance, cruising
range, and service life of an electric vehicle also depend on thesophisticated management of heat flows. Keeping the battery andmotor always at the right temperature prevents wear and tear.
MAHLE develops solutions for the vehicle cabin, the powertrain,
and the peripheral systems. Thermal management is required forall drive forms. The importance of battery electric vehicles andvehicles with fuel cells is increasing significantly.

4
8

1 Fluid management module for electric vehicles

4 Cooling module

Purified and demand-adjusted tempered fluid increases boththe cruising range and service life of the e-drive.

Highly efficient and compact—MAHLE cooling modules ensure
perfect temperatures in the battery electric vehicle.

2 Cabin filter

5 Electronics cooling plate

Conventional cabin filters with and without activated carbon are partof the HVAC (heating, ventilation and air conditioning) and remove
dirt particles, gas molecules, and viruses from the air for passengers.

MAHLE cools power electronics for systems with high power
closer to the component, thus also increasing the service lifeof the electrical components and interfaces.

3 Air conditioning (HVAC )6 Chiller

Two- or three-zone temperature regulation and air distribution withadjustable footwell temperature and best-in-class acoustics create
a feel-good climate.

The chiller with the MAHLE electric expansion valve transfers
coolant between different cooling circuits.

14

Management report

The company
E-volution with a system solution

Sustainability

Consolidated financial statements

11
1

5
10

7

9

7 Battery cooling plate

10 The on-board charging system (OBC )The temperature control keeps the battery temperature below
40 °C and increases the service life of the battery.

The on-board charging system ensures safe and efficient charging
while continuously monitoring the temperatures.

8 Indirect condenser

11 MCT e-motor (magnet-free contactless transmitter)

An indirect condenser is cooled with water during air conditioning
and conversely heats coolant for heating purposes in heat pumpmode.

The innovative drive motor from MAHLE does without rare earths.
The central feature of the new motor is the inductive and thus
contactless power transmission. This allows the motor to function
without wear and tear and ensures exceptional efficiency at highrpms. The efficiency is over 95 percent in the most frequently useddriving conditions of the drive system.

9 Electric compressor
The heart of the air conditioning and refrigerant circuit: MAHLE
offers air conditioning compressors for all relevant performance
ranges and vehicle types.
The company
E-volution with a system solution

Sustainability

Management report

Consolidated financial statements

15

Transporting goods moresustainably
Decarbonization is also essential in the transportation sector. Therefore, the industry is in a phase of transition and open to more sustainable technologies. Battery-electric commercial vehicles are
already in daily use, and the first hydrogen trucks, which are also
driven by an electric motor, are already being tested in practice. In
addition to the two solutions, e-fuels and hydrogen produced withgreen electricity allow existing vehicles with combustion technology
to be used in a much more climate-friendly way. What ultimately
ends up happening in transport is decided by users on the basis of
total costs.
As a systems provider, MAHLE supports the vehicle manufacturer
in all these challenges with sustainable technologies. From the interior air conditioning to the modular thermal management for thedrive to the powerful electric motor, all systems are designed for
different e-architectures. This ensures suitability for all regions, vehicle types, and purposes, and they also have a long service life.
Thermal management for large e-vehicles in particular requires
special solutions: With the battery-electric drive, for example, a lotof heat is generated at certain points during (fast) charging. The
temperature range of the battery must also remain constant. The
image shows in detail how it works.

8

5

8

2

3
1 Cooling module
The cooling module regulates the systems at different temperaturelevels and thus protects batteries and power electronics.

1

2 High-voltage heater (cabin and battery system)
By heating up the coolant, the high-voltage heater generates the
optimum working temperature of the Li-ion battery in winter andprovides warmth in the cabin.

2

3 Air conditioning
The air conditioning system regulates the temperature of the driver’s
workplace with minimal energy consumption, while the CareMetix®
cabin filtration system filters out fine particulates and pollutants.

4 Electric air-conditioning compressor
The 800-volt electric compressor provides the necessary power tocool the battery and keep the driver’s cabin pleasantly air-conditioned.

5 Chiller
The chiller optimally cools the water circuit for the temperaturesensitive Li-ion battery even at high outside temperatures.

16

The company
E-volution with a system solution

Sustainability

4Management report

Consolidated financial statements

10
7
9

6

6

6 Battery-cooling plate
The MAHLE battery cooling plates remain in thermal contact withthe cells of the Li-Ion battery and keep the electric energy storage
in the optimal temperature range.

7 Electronics cooling plate
The electronics cooling plate further protects electronic components
from overheating.

8 24-volt coolant pump
The 24-volt coolant pump powers the coolant circuits as neededwith up to 700 W.

9 SCT (superior continuous torque) e-motor
The 800 V traction motor, which is unique on the market so far,operates at high power for an unlimited period of time thanks toa special cooling concept.

10 Oil management module
The integrated and compact oil management module cools thetraction motor to prevent it from overheating.

The company
E-volution with a system solution

Sustainability

Management report

Consolidated financial statements17

An all-new take on cycling
Two-wheelers are playing a greater role in the new world of mobility.
They have never been so versatile: bicycles, and especiallye-bikes, are increasingly becoming an individual means of transport in cities and in the countryside. MAHLE wants to shape thisdevelopment with smart ideas that improve the entire experience.
No matter whether people are travelling in a city or in the countryside, an e-bike is always a good option. For the perfect experience, MAHLE offers a platform consisting of compact drive motors, tailor-made motor control, and a power-appropriate battery.
In addition, connectivity components such as smart switches expand the possibilities. The lightweight and compact design gives
bicycle manufacturers unprecedented freedom in design.

5

6

4

3
2

1

3 Battery
The particularly slim power storage unit disappears completely
into the frame and weighs just over one kilogram.

4 Smart switch
The iWOC is not only an elegant on/off switch for the drive.
It is also used to select the type of electrical assistance.

1 Motor
The lightest e-bike motor on the market, the MAHLE X20, can beswitched on at the push of a button. Weighing just 1.4 kilograms,
it delivers 23 newton meters directly to the wheel; in operation, thispower is comparable to a mid-mounted motor with 55 newton
meters of torque.

5 Flexible switch
The electric shift button can be flexibly mounted anywhere on
the handlebar. For example, it enables the drive to be controlled
on curved handlebars.

2 Range extender

6 Wireless display

For longer journeys, the lightest range extender on the market (e185)
can be used with the X20 by attaching it to the frame like a waterbottle. This provides an extra 60 kilometers of assistance.

The 2.1-inch display clearly shows all the information that is
important on the e-bike and can be easily connected to asmartphone.

18

Management report

The company
E-volution with a system solution

Sustainability

Consolidated financial statements

Keeping everything running
MAHLE offers its expertise throughout the life cycle ofits vehicle technologies. That means high-quality spareparts and many services—from motorsports to workshop equipment. This is why we have the Aftermarket,
Profit Center, and Services areas.

Sustainable outfitters:
Aftermarket
With the growing series production of alternative drives, the spareparts and service business is also developing: A strong range here
ensures long-lasting and more sustainable technologies. Thermal
management in particular is gaining in importance as the numberof electric and hybrid vehicles increases significantly. Across alltechnologies, workshops can rely on MAHLE equipment for vehicle diagnostics, battery testing, and service work to maintain air
conditioning systems and automatic transmissions. MAHLE also
supplies partners in the trade and engine repair, as well as electronic trading platforms worldwide with original equipment quality
products. The aftermarket range is completed by services such astechnical support at more than 30 locations worldwide as well as
individual training courses and service information for all customers.

The company
Keeping everything running

Sustainability

Management report

The specialists:
Profit centers and services
MAHLE has four units organized as profit centers for special market
and customer segments: in addition to motor sports and special
applications, these include the large and small engine components
used in agriculture, the navy, or rail vehicles. A team for industrial
thermal management completes the special area. The experts support the development of specific products.

In addition to the profit centers, the service divisions help customers with special questions regarding purchasing, sales, advancedevelopment, human resources, IT, and accounting and finance.
In addition, the engineers at MAHLE Powertrain GmbH offer development expertise for both internal and external customers.

Consolidated financial statements

19Technology highlights
What is new? Where has MAHLE set technological highlights?
And what is becoming a trend? A small innovation show fromthe electric motor to workshop software.

In the video: Insight from ourinnovation experts

Bestseller in e-mobility

Eurobike Innovators’ Prize
The innovative X20 drive system from MAHLE SmartBike Systems
wins the Innovators’ Prize at the Bike and Future Mobility trade fair
Eurobike 2022 in July. A specialist jury of experts from the industry
and media, as well as stakeholders from outside the sector, chosethe lightest drive system on the market, weighing just 3.2 kilograms, as the winner in the “Components” category. The MAHLE
e-bike business segment is presenting this innovation and othersolutions for gravel, road, and urban bikes, including HMI and connectivity, at the Eurobike trade fair in Frankfurt am Main.

MAHLE is establishing itself as a supplier of e-mobility. The electric air-conditioning compressor is a fantastic example of such.
Numerous series orders have already been received in the passenger car and commercial vehicle sectors. For 2022, the total ordervolume was approximately EUR 1.4 billion. Recently, MAHLE introduced the most powerful e-compressor currently on the market,
with a peak output of 18 kW. E-compressors are the heart of thermal
management in electric vehicles. The key component is important
for the temperature control of the e-drive and thus crucial for theservice life, charging speed, and cruising range of the battery.

Air conditioning with a systemsolution
The performance, cruising range, and service life of an electric vehicle also depend on the sophisticated management of heat flows.
Good thermal management ensures greater efficiency and assists
in CO2 reduction. MAHLE relies on system solutions for this. Modules for cabin air conditioning, battery cooling, or fluid management
simplify processes for customers and get more out of the complete system.

20

The company
Technology highlights

Sustainability

Management report

Consolidated financial statements

Calibrating with AI
MAHLE has released an update on the increasing calibration effort
in workshops for driver assistance systems. The TechPro®Digital
ADAS 2.0 system uses artificial intelligence. This recognizes thevehicle together with the control unit and automatically adapts thedigital calibration panel from MAHLE to the respective vehicle.
This saves several process steps per vehicle. To simplify the learning process, the application features 3D tutorials.

The endurance runner
MAHLE has developed the electric motor with the greatest endurance. The SCT (superior continuous torque) electric motor
can operate indefinitely at more than 90 percent of its peak power.
This ratio, which is unique on the market to date, represents a technological leap forward and enables use in electric vehicles of all
kinds—even under demanding conditions. This is made possible
by a new cooling concept. With the SCT electric motor, MAHLE is
now a full-range supplier in the field of electric drives and meets
all needs from e-scooters to heavy-duty commercial vehicles, offroad and industrial applications.

The substance for sustainabletransport
MAHLE has suitable solutions for the sustainable use of hydrogenin transportation. In the fuel cell, a specially developed humidifier
increases the service life of the cells. It uses the water created in
the fuel cell to humidify the incoming air. For the efficient use ofhydrogen as a fuel in the combustion engine, MAHLE presented
the Power Cell Unit at the IAA Nutzfahrzeuge (International Motor
Show for Commercial Vehicles in Germany)—a system consistingof pistons, piston rings, conrods, pins, and, if desired, cylinder liners, as well as a high-pressure impactor for flushing the crankcase.

First battery check forworkshops
MAHLE is the first supplier worldwide to enable independentworkshops to perform battery diagnostics on electric vehicles. The
TechPRO diagnostic tool has been equipped with new software
for this purpose. It detects all existing defect codes in an averageof 30 seconds and reports over 54,000 detailed OEM defect code
descriptions. It will initially be available free of charge. In the future,
MAHLE will develop suitable licensing models for its customers.
This step opens up new, future-proof business areas for independent workshops beyond the combustion engine.

The company
Technology highlights

Sustainability

Management report

Consolidated financial statements

21

Efficiency in Motion
A sustainable future needs efficiency. It saves resources,
energy and ensures competitiveness. At MAHLE, we have theexperience and dedication to save even the last microgramof CO 2 or to look at problems in a completely new way.
We bring maximum efficiency in motion with system solutions
for all drive concepts and vehicle types. This means we canshape sustainable mobility for the next generations together
with our customers.

22

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After two years full of external challenges, MAHLE is on the road tostability. The 2022 business year outlined in this report was characterized by the overlay of supply shortages, cost increases formaterials and energy, and the continued presence of Covid-19.
The global uncertainties led to another year of low production
quantities in the automobile industry.
After three quarters with heavily burdened results, we were able tostabilize the earning power of the MAHLE Group toward the end of2022. In addition to improvements in the operating business, thenecessary sales price adjustments for MAHLE products in an inflationary environment made a significant contribution. We thank ourcustomers around the world for working closely with us to manage
these cost increases.
We are convinced that many of the key factors will experience
further uncertainties in the current year 2023. Timely partnership
solutions to supply and cost changes remain critical to success inthe automotive value chain, just like our daily work on costs andefficiency.

and electrification with which we are shaping the future of mobility.
We would like to thank our customers across the world of mobility,
our shareholders, the MAHLE Supervisory Board, the employee
representatives and, in particular, our almost 72,000 employees ataround 152 locations who bring our world one step closer toward
an environmentally compatible and sustainable future every day for
their trust, interest, and support.
MAHLE—We Shape Future Mobility

Sincerely,

Arnd Franz
Chairman of the Management Board and CEO of the MAHLE GroupBeyond operational improvements, successful decarbonization is a
key strategic goal at MAHLE. We are working flat out on promisingtechnologies for the low-emissions mobility of tomorrow. This iswhere we rely on the ingenuity of our engineers: only if the state andsociety allow all technologies for sustainable transport will the transport transition succeed for the climate, the economy, and society.
At MAHLE, we are making our own contribution: with electric drive
motors for all types of vehicles, with charging solutions for vehicles
and infrastructure, efficiency-enhancing components for fuel cells,
and many other new products. But MAHLE will also continue tomeet the global demand for components and systems for combustion engines that will run on sustainable fuels in the future.
The guiding principle for this sustainable orientation of our business is our mission “Efficiency in Motion.” This means the efficient solutions for combustion engines, thermal management,

The company
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23

Report of the Supervisory Board

Rarely has a business year been as difficult as 2022 was in theautomotive supply industry. We hoped to be able to return toreasonably normal working conditions after the challenging
pandemic years, but we were a long way off this, especially inthe first half-year.
As a result of geopolitical events, the cost increases that had
already begun in many material areas in the previous year intensified, and in some cases extremely. There were also massive supply chain problems for raw materials required for certain products, especially electronic components, which poseda challenge primarily for our Electronics and Mechatronics andThermal Management business units. Agreements with ourcustomers on passing on these cost increases, but also theincreases in the general area of inflation (personnel, energy
and freight costs, etc.) were able to take effect only to a certain
extent in the last months of the business year. Nevertheless, a
massive block of cost increases remained in our company,
while our customers were able to achieve exceptionally highprofit margins through clever pricing and portfolio policies.
Therefore, we will continue to work closely with our customers
in managing the effects of high inflation and energy costs in thecurrent business year 2023.
Furthermore, the EU’s plans to reduce CO2 emissions in new
vehicles are very far-reaching and it is quite difficult to surmise
what the consequences of this decision will be. Instead of allowing technology-open competition between e-drives, greenhydrogen, and sustainable fuels such as e-fuels, EU policy islimited to promoting pure BEV drives. However, we are firmly
convinced that technological openness is essential for rapidly
decarbonizing road transport. Therefore, this path must remain
open in regulatory terms. In other regions of the world, for example in technologically leading countries such as Japan andSouth Korea, there is a deliberate focus on open technology
drive strategies.
Despite the manifold tasks before us, we did not reduce ourefforts and expenditures in the area of research and development in the 2022 business year. Even if this does not lead toshort-term improvements in results, we are certain of the longterm prospects for success of this approach.
The Supervisory Board discussed and deliberated in detail on
all decisions relating to the Group’s business development.

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It held a total of five meetings during the business year. In addition, there were several meetings of the Personnel Committee on current HR-related topics.
In the 2022 business year, the Supervisory Board performed all
the duties incumbent upon it under the law, the Articles of Association, and the Rules of Procedure. In addition, regular verbal and written consultations took place between the Chairman of the Supervisory Board and the Chairman and membersof the Management Board on strategic and operational issues.
During the year, the Supervisory Board was informed regularly,
promptly, and comprehensively about the business development of the company, the Group, its business units, and its
participations through oral and written reports from the Management Board as well as during the meetings.
In addition to the operational and strategic topics, the meetings
also addressed the implementation of the law for equal participation of women and men in leadership positions. The Supervisory Board and the Management Board aim to significantly increase the current ratio of women at all management levels.
The Supervisory Board thanks all members who left the boards
during the 2022 business year for their constructive cooperation:
Mr. Martin Röll, resigned as of April 30, 2022 and replaced by Mr.
Udo Abelmann by court appointment on May 1, 2022; Mr. Josef
Haering, resigned as of May 31, 2022, succeeded by Mr. Klaus
Güntert as elected substitute member on June 1, 2022.
Our thanks go to Dr. Stefan Pischinger and Dr. Franz-Josef
Paefgen for their many years of dedicated cooperation. Bothleft the Supervisory Board on December 31, 2022. Claudia
Diem and Dr. Rolf Breidenbach were appointed to the Supervisory Board on January 1, 2023.
Mr. Arnd Franz was appointed as a member and then Chairman of the Management Board by the Supervisory Board on
November 1, 2022.

Resources, which expired on December 31, 2022, and left thecompany at her own initiative. Ms. Felder did an outstanding
job during the extraordinarily challenging phase of the coronavirus pandemic. Dr. Beate Bungartz was appointed as her successor by the Supervisory Board with effect from January 1, 2023.
Mr. Wilhelm Emperhoff will retire on May 1, 2023. He was managing director of the Filtration and Engine Peripherals business
unit from 2012 to 2019 and was responsible for the newly
created Electronics/Mechatronics business unit from 2020.
Mr. Emperhoff pursued this task with great dedication until his
retirement. For this, he deserves the thanks of the Supervisory
Board. Mr. Martin Wellhöffer, who was most recently Corporate Executive Vice President Sales and Application Engineering, will succeed him as managing director for the Electronics/
Mechatronics business unit from May 1, 2023.
PricewaterhouseCoopers GmbH, the appointed auditor, audited the annual financial statements and management reports of
the MAHLE Group and MAHLE GmbH for the 2022 business
year, which were prepared in accordance with the German
Commercial Code (HGB), and issued an unqualified audit opinion. The Supervisory Board concurred with the audit findings
after a thorough analysis of the audit reports and the auditors’
report at the Supervisory Board meeting.
The Supervisory Board approves the annual financial statements and the management reports of the MAHLE Group and
MAHLE GmbH.
The Supervisory Board thanks all employees of the MAHLE
Group for their extraordinary commitment in an exceptional
year. Let’s look forward to the 2023 business year with confidence.

Stuttgart/Germany, April 20, 2023
For the Supervisory Board

Mr. Michael Frick, who was CFO from 2014 and interim CEOfrom May 1, 2022, left the company of his accord on November
30, 2022. The Supervisory Board thanks Mr. Frick for his many
years of cooperation in the Group. Mr. Markus Kapaun was
appointed as his successor by the Supervisory Board on November 1, 2022.
Anke Felder did not renew her employment contract as Managing Director for Human Resources and Director of Human
The company
Report of the Supervisory Board

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Management report

Professor Dr. Heinz K. Junker
Chairman of the Supervisory Board of the MAHLE Group

Consolidated financial statements

25

Members of the Supervisory Board
Prof. Dr.-Ing. Heinz K. Junker

Prof. Dr.-Ing. Gisela Lanza

Chairman
Former Chairman of the Management Board and CEOof MAHLE GmbH, Stuttgart/Germany

Head of the Institute of Production Science at the Karlsruhe
Institute of Technology (KIT), Karlsruhe/Germany

Jürgen Kalmbach

Former Chairman of the Management Board of Porsche AG andformer Member of the Management Board of Volkswagen AG

Deputy Chairman
MAHLE GmbH, Stuttgart/Germany

Dr. Michael Macht

Liane Papaioannou

Udo Abelmann

Chairwoman of the local IG Metall, Pforzheim/Germany(since May 5, 2022)
Trade Union Secretary of the local IG Metall, Stuttgart/Germany

Rolf Berkemann
Vice President Sales and Application Engineering Passenger Cars
1 Region Europe, MAHLE Group, Stuttgart/Germany

Dietmar Bichler
Chairman of the Supervisory Board of Bertrandt AG, Ehningen/Germany

Dr. Rolf Breidenbach

Dr. Franz-Josef Paefgen(until December 31, 2022)
Former CEO of AUDI AG and Bentley Motors Limited and former
President of Bugatti International S.A.

Prof. Dr.-Ing. Stefan Pischinger(until December 31, 2022)
Chair of Thermodynamics of Mobile Energy Conversion
Systems and CMP Center for Mobile Propulsion, RWTH Aachen
University/ Germany

Thomas Raupach(since January 1, 2023)
Former Chairman of the Management Board and CEO of HELLAGmbH & Co. KGaA, Lippstadt/Germany

Deputy Chairman of the Works Council of MAHLE Ventiltrieb
GmbH, Wölfersheim/Germany

Nektaria Christidou

Martin Röll

Chairwoman of the Works Council of MAHLE Behr GmbH & Co.
KG, Mühlacker and Vaihingen an der Enz/Germany(until April 30, 2022)
Co-Chairman of the local IG Metall, Stuttgart/Germany

Claudia Diem

David Schmidt(since January 1, 2023)
Attorney-at-law, former Member of the Executive Board of
BW-Bank, Corporate customers Baden-Württemberg West andNorth, Stuttgart/Germany

Chairman of the Works Council of MAHLE Pumpensysteme GmbH,
Wustermark plant/Germany

Annette Szegfü

Prof. Dr. jur. Wolfgang Fritzemeyer, LL.M.

Trade Union Secretary to the Executive Committee of IG Metall,Frankfurt/Germany

Lawyer, Munich/Germany, Attorney-at-Law (New York/USA),
Solicitor (New South Wales/Australia)

Dr. Bernhard Volkmann

Gerd Goretzky

Former Member of the Management Board and CFO of
MAHLE GmbH, Stuttgart/Germany

Advisor to the European Works Council of the MAHLE Group,
Stuttgart/Germany

Georg Weiberg

Klaus Güntert

Former Head of Truck Product Engineering at Daimler AG,
Stuttgart/Germany(since June 1, 2022)
Chairman of the Works Council of MAHLE GmbH, Rottweil plant/
Germany

Josef Häring

Prof. Dr.-Ing. Jörg Zürn
Former Head of Development Mercedes-Benz Vans at Daimler
AG, Stuttgart/Germany(until May 31, 2022)
Chairman of the Works Council of MAHLE GmbH, Rottweil plant/
Germany

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Members of the Management Board
Arnd Franz

MEMBERS WHO HAVE STEPPED DOWN

Chairman of the Management Board(since November 1, 2022)
Automotive Sales and Application Engineering
Aftermarket business unit
Research and Advanced Engineering, Corporate Planning,
Legal, External Affairs, Corporate Communications

Matthias Arleth

Thermal Management business unit
Industrial Thermal Management profit center,
Control Units profit center

Chairman(January 1 to April 14, 2022)
Automotive Sales and Application Engineering
Aftermarket business unit
Motorsports and Special Applications profit center,Research and Advanced Engineering, Corporate Quality
Management, Corporate Planning, Corporate Communications,
Legal, External Affairs

Dr. Beate Bungartz

Anke Felder(since January 1, 2023)
Human Resources, Corporate Executive Vice President
Human Resources, Personnel Development, Corporate Real
Estate Management(until December 31, 2022)
Human Resources, Corporate Executive Vice President
Human Resources, Personnel Development, Corporate Real
Estate Management

Georg Dietz

Corporate Communications ad interim(April 15 to October 31, 2022)

Jumana Al-Sibai

Engine Systems and Components business unit
Large and Small Engine Components profit center,
Motorsports and Special Applications profit center,
Environmental Management/Safety at Work for the group,
Corporate Quality Management

Wilhelm Emperhoff(until April 30, 2023)
Electronics and Mechatronics business unit

Markus Kapaun(since November 1, 2022)
Finance, Controlling, Taxes, IT Services, Insurances,
Revision and Risk Management, Mergers & Acquisitions

Michael Frick
Deputy Chairman(until April 14, 2022)
Finance, Controlling, Taxes, IT Services, Purchasing, Insurances,
Revision and Risk Management, Mergers & Acquisitions
Chairman ad interim(April 15 to October 31, 2022)
Automotive Sales and Application Engineering
Aftermarket business unit
Motorsports and Special Applications profit center,Research and Advanced Engineering, Corporate Planning,
Legal, External Affairs

Martin Weidlich
Filtration and Engine Peripherals business unit
Corporate Operational Excellence, Production System &Consulting, Purchasing, Battery competence center

Martin Wellhöffer
(from May 1, 2023)
Electronics and Mechatronics business unit

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27

Members of theManagement Board
as at May 1, 2023

F. l. t. r.:
Martin Wellhöffer
Martin Weidlich
Jumana Al-Sibai
Arnd Franz
Markus Kapaun
Dr. Beate Bungartz
Georg Dietz

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Nur Preview – Motiv noch nicht
final ausgewählt

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29

A worldwide network—our locations
152 production locations
12 major research & development centers
71,947 employees *Major research &development centers
EUROPE
Northampton/Great BritainŠempeter pri Gorici/Slovenia
Stuttgart - Bad Cannstatt /Germany
Stuttgart - Feuerbach/Germany
Valencia/Spain
NORTH/SOUTH AMERICA
Buffalo/USA (Amherst, Lockport)
Detroit/USA (Farmington Hills, Troy)
Jundiaí, São Paulo/Brazil
ASIA/PACIFIC
Pune/India
Shanghai/China
Numazu/JapanTokyo /Japan (Okegawa, Kawagoe)

North America* As at December 31, 2022

27 production locations
14,769 employees*
Sales of EUR 3,547 million
Canada, Mexico, USA

South America
8 production locations
8,763 employees*
Sales of EUR 788 million
Argentina, Brazil

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MAHLE worldwide

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Europe57 production locations
31,165 employees*
Sales of EUR 5,427 million
Austria, Bosnia and Herzegovina,
Czech Republic, France, Germany,
Great Britain, Hungary, Italy, Poland,
Portugal, Romania, Slovakia,
Slovenia, Spain, Türkiye

Asia / Pacific
58 production locations
16,432 employees*
Sales of EUR 2,618 million
China, India, Indonesia, Japan,
Philippines, Singapore, South
Korea, Thailand

Africa2 production locations
818 employees*
Sales of EUR 54 million
South Africa

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MAHLE worldwide

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31

Sustainabi
Corporate social responsibility

34

Responsibility for our employees

34

Sustainability

38

Social responsibility

40

The MAHLE FOUNDATION

42

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ilityThe company

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Corporate social
responsibility
For MAHLE , being a business means taking responsibility for both the people
who work for us and the impact our activities have on the environment andsociety. For us, entrepreneurial action and social commitment go hand in
hand. We are working on using resource-efficient technologies, sustainableproducts and modern production processes to place less and less of a burden on people and the environment, at all our locations worldwide and along
our value chain. In doing so, we want to become even better every day.

Responsibility for our
employees

MAHLE as an attractive
employerThus, our work in HR focuses on recruiting and retaining talents,
offering employees interesting opportunities for promotion andfurther development, and further strengthening our position as an
attractive employer in all regions. We promote diversity and equal
opportunities in the workplace and consider them linchpins of ourcompany’s success. After all, only with committed and motivatedemployees can we be sustainably successful as a company.
In this light, we have strategically realigned our HR work and laid
down an “HR Roadmap.” In this way, we adapt existing HR structures and workflows and align them with the requirements of theaccelerated transformation.

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Corporate social responsibility

Employer Branding
We are countering the increasing shortage of skilled workers
worldwide with targeted and differentiated measures. To nurture
the next generation of talent, we support local initiatives that introduce young people, especially girls, to careers in science, technology, engineering, and mathematics (STEM) at an early age.
Our employer branding activities focus on the values that MAHLE
stands for as an employer. We reach our target groups worldwide
through authentic insights into our “Employee Experience”—ourworld of work with diverse, international teams—both via social
media and through personal conversations. We continuously optimize our marketing strategy to meet the changing needs of ourtarget groups. Last year, our HR marketing and employer branding activities again received several awards, for example “PotentialPark,” “MINT minded Company,” and “Great Place to Work.”
MAHLE was also recognized as a top employer in the “Best Recruiters,” “Leading Employers,” and “Diversity Leaders” rankings.

Management report

Consolidated financial statements

Talent acquisition and retention
Attracting talents continues to be a critical factor in achieving ourglobal business goals. In view of the shortage of skilled workers,
we rely not only on recruitment on the external labor market, butalso on the internal mobility of our employees. In this way, we cantransfer skills within the company and promote the exchange ofknowledge. All these processes are supported by our global HR
system landscape. This includes, for example, a new applicant
management system that has been successfully introduced in 29
countries across the globe. We are thus on the way to an almost
paperless recruitment environment, which offers many advantages
for both internal and external applicants, as well as for our company. Improved communication, standardized selection procedures,
and an efficient recruitment process provide more transparency
and an enhanced applicant experience.
Retaining new and existing employees in value critical roles is also
an important concern for us. In this context, we revised our leadership principles in 2020 and created a new understanding of leadership worldwide, which, in addition to our broad range of development opportunities, contributes significantly to establishing anappreciative working environment. This is complemented by employee retention measures that are specifically tailored to individual groups of employees: they range from support services for new
entrants to reintegration measures after longer absences and ahost of flexible working options to meet the increasing demands
for work-life balance.

The company

Sustainability
Corporate social responsibility

Management report

Hybrid work
We want to create a working environment for our employees thathas a positive impact on performance, satisfaction, commitment,
and employee retention. One building block of this environment is
our hybrid working culture, anchored in our “Global Remote Working Guideline,” which enables both face-to-face and remote working at all locations. Our employees should be allowed to do theirwork where they are most productive and where they can bestalign their work and their individual needs. In this way, we strengthen a global working culture characterized by flexibility, self-management, trust, and personal responsibility.
In order to adapt our infrastructure to the changing needs of a
hybrid way of working, we have started to establish, among otherinitiatives, desk-sharing concepts and open-space offices. This
has numerous positive effects: we create modern and inspiring
workplaces with efficient use of space and thus strengthen our
attractiveness as an employer, improve our ecological footprint,
and reduce infrastructure costs.

Consolidated financial statements

35

Learning and development
Modern talent management

MAHLE Competency ModelIn the area of talent management, we continued the global roll-out
of our “Talent Cycle.” This is an annual, globally aligned process
to assess and recognize the performance of our employees. It
contributes to a better feedback dialogue between managers andemployees and provides orientation for individual development.

We are committed to the principle of lifelong learning and equip
our employees worldwide with the skills needed in a changing mobility world, now and in the future. They are supported by targetedtraining and qualification programs for future job profiles and newareas of expertise.

An essential element of the “Talent Cycle” is the annual performance and development dialogue. In this process, employees
and managers agree on previously defined individual goals, exchange views on strengths and development needs, and jointly
agree on new development goals. The entire process is handled
and supported via our new HR system landscape.

To achieve our ambitious goals, we have also introduced a new
global learning system. The new IT solution went live in elevencountries in 2022 and will be available in 17 languages for all
MAHLE employees by the end of 2023.

Newly designed learning and development
landscapeWe have also made great progress in implementing a new digitallearning and development landscape. Our goal is to create moreaccessible and demand-driven learning opportunities worldwide.
The basis for this is, in particular, a comprehensive global training
and development catalogue, which contains cross-functional andfunction-specific learning content, is available to all employees
and is continuously updated. The new offerings include, for example, access to a global e-learning platform from both company
and private devices, extended language courses, or training on
cyber security.
The respective training contents are derived from the new MAHLE
competency model. This provides all employees with a clear orientation for their professional and personal development because
it identifies the skills necessary for the success of the individual,
team, and entire organization in the ongoing transformation. The
model is based on our corporate strategy, our vision, and ourleadership principles and also takes into account the dynamicchanges in our business environment.

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Diversity, equal opportunities, and nondiscrimination
For MAHLE as an international company, the promotion of diversity, equal opportunities, and nondiscrimination are fundamental
and firmly anchored in our corporate values. We value our global
workforce—regardless of gender and gender identity, nationality,
ethnic origin, religion or belief, disability, age or sexual orientation.
We promote diversity and inclusion of the different experiences
and backgrounds of our employees and see this as an opportunity: through Diversity & Inclusion (D&I), we can increase our innovative performance and support our business goals.
Various local policies are in place to confirm our commitment to adiscrimination-free workplace and to set rules and guidelines regarding the prevention of harassment. Our North and South American sites have launched employee-led Diversity&Inclusion(D&I)
committees. These regular meetings are used to drive local initiatives and establish affinity groups.
To create a common understanding of the importance of diversity,
equal opportunities, and equal treatment, we have developed aglobal D&I learning offer. Last year, we expanded this to include
D&I learning paths in several languages. We also actively communicate both internally and externally on this topic and celebrate, forexample, International Women’s Day or Diversity Day together
with our diverse workforce.

sponds to both an increase over the previous year and a continuously positive development over the last few years.

New targets for the proportion of women in
leadership positions
Our commitment to an inclusive and appreciative work environment is multifaceted and is supported by our Group-wide D&I strategy introduced in 2021. A central element includes the targeted
promotion of women in leadership positions. It remains our goal toachieve a more balanced gender ratio in the company’s executive
ranks. To this end, we set new five-year targets for women at both
executive levels below the MAHLE Management Board in the reporting year: by June 30, 2027, the proportion of women at the first
executive level must be increased to 10 percent and at the second
executive level to 15 percent worldwide.
To achieve this, we rely on a mix of different measures. This includes, for example, an even more targeted focus on women whenit comes to filling vacancies and recruitment, as well as a differentiated range of flexibility offers and “female empowerment” programs. As a global management tool to steer our activities, wehave developed a D&I dashboard with key performance indicators.

New targets for the proportion of women on the
Supervisory Board and the Management Board
With regard to the proportion of women on the Supervisory Boardof MAHLE GmbH, the Supervisory Board resolved in April 2022
that the target figure for the proportion of women on the Supervisory Board be set at 25 percent for the period up to June 30, 2025.
The 2022 target of 20 percent was achieved. The target for the
proportion of women on the Management Board of MAHLE GmbHis set at 29 percent by 30 June 2027—this currently corresponds
to two out of seven members.

PROPORTION OF WOMEN ON FIRST AND SECONDEXECUTIVE LEVELFirst Executive Level
Second Executive Level
10.2 %
8.3 %6.3%

Proportion of female executives worldwide

8.3 %
6.2 %

(Date 12/31/2022 w/o joint ventures)

The company

Consolidated financial statements

Corporate social responsibility

Management report

7.0 %
5.3 %

3.2%

Globally, 15 percent of all management positions were held byfemale managers at the end of the year. At the first executive level
below the Management Board, the share of women was 8.3 percent, and at the second executive level 11.2 percent. This corre-

Sustainability

8.4 %

6.8 %

5.3 %

11.2 %

2017

2018

2019

2020

2021

2022

37

Sustainability
For MAHLE, modern mobility is inextricably linked with sustainable thinking.
Our products improve the carbon footprint of modern vehicles with systems
for drive types such as hybrids, electric vehicles, and fuel cells, but also withsolutions that enable the use of e-fuels.

The company constantly strives to harmonize business successwith the well-being of people and the environment. The necessary
principles of our actions are ethically correct and law-abiding behavior, the health and satisfaction of our employees, the safety of
their jobs, and the protection of the environment and resourcesalong the entire value chain.
From an industry perspective, the year was marked by the continuation of numerous relevant legislative initiatives. Particularly noteworthy is the continued implementation of the EU Green Deal toachieve the EU’s 2050 climate targets. The regulation of CO2 andpollutant emissions for new vehicles are of particular importancefor our company. MAHLE believes that a variety of technology
solutions for mobility are needed to achieve the climate targets asquickly as possible. We advocate for a policy that enables a regulatory framework that takes into account the contribution of different propulsion technologies to sustainable road transport.

Comprehensive information about oursustainability activities can be found in our
Sustainability Report, which we publish on
the MAHLE website.

mahle.com/en/news-and-press/publications

Expansion of the program

Good ratings

Due to the new EU regulations, among other things, MAHLE has
expanded its sustainability program in two areas in 2022. As themarkets for sustainable business are growing and MAHLE will be
subject to requirements from the European Taxonomy Regulationin the future, the strategic sustainability topic of “Sustainable Finance” has been part of the program since 2022. Accordingly, theSustainability Steering Committee was expanded to include themanaging director of finance. Together with the already establishedsafety at work and health care, the topic of “Sustainable Finance”
was defined as a strategically important field of action. Both fieldsof action are oriented toward the Sustainable Development Goals(SDGs) of the United Nations. In addition, targets have been set for
reducing emissions from upstream chain and products (Scope 3).
Starting from the base year 2019, emissions in the supply chain
and through product use (Scope 3) are to be reduced by 28% eachand direct and indirect emissions (Scope 1 and 2) by 49% by 2030.
The targets for Scope 1, 2, and 3 have been submitted for validation
to the Science Based Targets Initiative (SBTi).

The external agencies’ ratings for 2022 once again show good
performance by MAHLE in the area of sustainability. Ecovadis, across-industry platform that enables customers to evaluate their
suppliers according to sustainability aspects, awards MAHLE 57
out of 100 points, which corresponds to the silver status. Here thecompany is among the top quarter of companies in the comparison group. In the area of climate and water protection, MAHLE
reports to the Carbon Disclosure Project (CDP). A rating of B on ascale of A to D corresponds to an above-average result in relation
to all companies assessed by CDP. In 2022, MAHLE received ansustainability Risk Rating of 17.0 and was assessed by Morningstar Sustainalytics to be at a low risk of experiencing material financial impacts from sustainability factors.*

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The company

Sustainability
Corporate social responsibility*in no event this rating shall be constructed as investment advice or expert opinion as
defined by the applicable legislation. Copyright © 2023 Morningstar Sustainalytics.
All rights reserved. This score contains information developed by Sustainalytics(www.sustainalytics.com). Such information and data are proprietary of Sustainalytics
and are provided for informational purposes only.

Consolidated financial statements

More sustainable supply chain
Supply chains are experiencing greater demands for sustainability—and for several reasons. At the legal level, the framework conditions
are becoming more stringent with the new Supply Chain Due Diligence Act. On the customer side, sustainability is more central thanever, for example when it comes to critical materials or responsible
sourcing. We are taking measures on several levels to implement
these requirements:
We have established new sustainability criteria in the purchasing
process, aimed in particular at compliance with supply chain due
diligence obligations. The newly introduced MAHLE Sustainable
Purchasing Policy establishes the key sustainability principles forour purchasing organization.
In addition, the Supplier Code of Conduct was significantly expanded and declared mandatory. In order to comply with the Supply
Chain Due Diligence Act, MAHLE takes a risk-oriented approach. In
addition to risk analysis, the company also uses results from standardized questionnaires with self-reports by suppliers and audits.
These audits are carried out in accordance with the standards of
the VDA Responsible Supply Chain Initiative (RSCI), of which
MAHLE has been a member since January 2023.

More renewable energy at
MAHLE locations
With their new photovoltaic systems, the European MAHLE locations in Parma/Italy and Montblanc/Spain have been able to become less dependent on the volatile energy markets and now coverpart of their electricity requirements locally, remotely, and carbonneutrally from their own production.
The Spanish plant in Montblanc near Barcelona has brought theGroup’s most powerful photovoltaic system—2,200 kilowatt
peak (kWp)—to the grid. The 10,000 sq. m. facility, with an annual
output of 3,000-megawatt hours (MW h), saves about 700 metrictons of CO 2 per year. This means that a third Spanish plant now
produces green energy for MAHLE. The European plant portfolio isgradually being expanded with further plants (including in Türkiye).
MAHLE has thus reached the next milestone in its CO 2 reduction
plan and is becoming more independent from fossil fuels and fluctuating prices in the energy market. The facilities will help us achieve
climate-neutral production at all our plants worldwide by 2040.

The audits assess a supplier’s compliance with social standards
as well as occupational safety and environmental protection standards in accordance with the Supply Chain Due Diligence Act.

The company

Sustainability
Corporate social responsibility

Management report

Consolidated financial statements

39Social responsibility
As a globally active company, MAHLE bears responsibility in many
respects. Our innovations, resource-efficient technologies, and modern
manufacturing processes help to reduce the burden on people andthe environment. Furthermore, as a foundation-owned company, we
assume social responsibility and, together with our employees, makea positive contribution to the common good.

For many years now, we have been supporting social projects andinitiatives in the vicinity of our worldwide locations. This includes
global fundraising, projects, and initiatives to fight poverty and promote education and social interaction. This is supported by thecommitment of our employees, who also volunteer and personally
support their communities. Taking responsibility for the community
and the common good forms an integral part of the MAHLE culture.
In the following, we present some of the activities of the reporting
year by way of example.

Help for Ukrainian refugees
in Poland

Education for children in India
Last year, 400 children growing up in less privileged circumstances received special education in India. They were taught
special skills that, for example, plumbers, carpenters, or electricians perform and that are not part of the regular curriculum. This
is to help the children earn an income after school because theyusually cannot afford to go through vocational training. MAHLE
was one of the sponsors of this initiative. In addition, workers inIndia collected clothes, toys, books, and food at “Thanksgiving”
and distributed them to a local orphanage.

Poland, as one of Ukraine’s neighboring countries, has been directly affected by the Russian invasion of Ukraine. Against thisbackdrop, MAHLE employees in Poland launched a collection
campaign in 2022, in particular to support people who had been
forced to flee their homes. In addition, other charitable activities
took place throughout the year. In particular, donations were collected to finance food distributions and the purchase of clothingfor pupils of local schools or to support orphanages, animal shelters, and social institutions.

40

The company

Sustainability
Corporate social responsibility

Management report

Consolidated financial statements

Christmas campaigns inseveral countries

Science education inSouth Africa
In South Africa, the partnership with the Science2Go initiative,
which has already existed for many years, continued. This offers
more than 80,000 pupils math and science lessons with 400 teachers, reaching some 110 schools in rural areas. Some of the investments were made in partnership with other organizations andcompanies.

Diverse activities in North andSouth America
With a focus on the common good, numerous initiatives and projects took place in Brazil last year. In 2022, floods and landslides
led to a severe natural disaster in the Brazilian city of Petrópolis.
We immediately became involved here, in particular by donating
items such as food and hygiene articles. Materials and equipment were also donated to the health sector during the Covid-19
pandemic.
Other initiatives include “Formare School”: This is a program where
MAHLE employees can get involved by supporting young people
in their preparation for working life. In the “Young Farmer Program,” 14 to 17-year-olds receive agricultural training. Both programs resumed in Brazil in 2022 after being interrupted by the
Covid-19 pandemic. Numerous projects and initiatives for thecommon good were also implemented in the USA and Mexico in
2022. This included, in particular, fundraising activities for children. For example, US employees participated in the “Run for children” and in Aguascalientes/Mexico, funds were raised for children
with disabilities to receive financial support and other items
through crowdfunding and donation initiatives.

The company

Sustainability
Corporate social responsibility

Management report

The Christmas season was used by various international locations
to give people in need a wonderful Christmas. Our employees inAustria, for example, supported the Caritas Christmas card campaign (“Christkindlbriefaktion”). People in need received Christmas presents from our employees. The MAHLE locations in the
Stuttgart area once again organized a Christmas wish campaign
and turned to various social institutions in the region, including the
Ukrainian church community in Stuttgart, to support the people in
Ukraine. In Mexico, employees sponsored students at an inclusive
school in Monterrey. In addition to Christmas presents, this also
included the organization of a Christmas party. The locations in
Poland also took part in several initiatives at Christmas time, including a nationwide fundraiser for people in need.

Consolidated financial statements

41

Opening up opportunities—
the international projects of
the MAHLE FOUNDATION
More than 150 projects worldwide support the MAHLE FOUNDATION per year.
Whether health, education, art, culture or agriculture, every single initiative isgeared toward the guiding principles of appreciation and a sense of responsibility
toward people, the environment, and nature. This means the charitable organization is acting entirely in the spirit of the MAHLE founders.

The founding brothers Hermann and Ernst Mahle combined economic success with social responsibility at an early stage. That is
why they established the MAHLE FOUNDATION in 1964 andtransferred 99.9 percent of their shares in the company to thefoundation. The other 0.1 percent of their shares is held by the
Verein zur Förderung und Beratung der MAHLE Gruppe (MABEG).
However, the latter holds all voting rights. Such a separation ofcharitable foundation and industrial management was and is a
special feature in the German economy and testifies to great social commitment. On this basis, the foundation today supports
more than 150 projects around the world. These include initiatives
in health care, youth welfare, education, and organic farming.
With increasing globalization, the MAHLE FOUNDATION expanded its sphere of activity.

Art and culture
Students make music with teachers
One of the projects it supports in the field of culture is EINSAMGEMEINSAM. It was started during the first phase of the coronavirus pandemic by the chamber orchestra Unter den Linden e. V.
The idea is for musicians to meet families who are interested inmusic and initially play a private concert for them with the aim ofcelebrating the revival of musical life at the end of lockdown witha large, public family concert. In addition to the musical aspect,these private concerts provide a space to interact with other people.

Agriculture and food
“Enough instead of more”
The Save Our Seeds (SOS) organization is committed to sustainable food, agriculture, and rural development. At the top of theagenda are GMO-free agriculture and food production and keeping conventional and organic seeds pure. To this end, SOS organizes numerous lectures, symposia, and other discussion groups
every year. It also promotes national and international cooperation. The MAHLE FOUNDATION has been supporting the SOS
activities for many years.

42

The
Unternehmencompany

Sustainability
The MAHLE FOUNDATIONManagement report

Consolidated financial statements

Education and upbringing

Health and nursing care
Rural health care in India
The MAHLE FOUNDATION supports the Shining Eyes associationin the fight against tuberculosis and other illnesses in the ruralWest Bengal region of India. The on-site medical care can be improved with these resources. In particular, the construction of achildren’s clinic in Bolpur means severely ill and malnourishedchildren and pregnant women can be treated, and illnesses canbe detected at an early stage.

Helping disadvantaged people
The CES Waldorf program supports traumatized children and theirparents in one of the poorest neighborhoods in Bogota, the capital
city of Colombia. Inspired by Waldorf education, and in addition topsychological support, it offers artistic projects intended to help
children learn how to deal with their living situation, which is marked
by extreme poverty and violence. CES Waldorf’s social program
has been running since 1977, and the MAHLE FOUNDATION has
been a partner of this program for many years.

Help for Ukraine
Together with the MAHLE Group, the MAHLE FOUNDATION supported the aid project “Ukraine: Escape from the war,” an initiativefrom the Berlin association “Freunde der Erziehungskunst Rudolf
Steiners e.V.” Numerous MAHLE employees also participated in afundraising campaign in 2022, where a total of EUR 300,000 wascollected for children and adults affected by the war. The association “Freunde der Erziehungskunst” offers emergency educational
support for children and adults in crisis situations worldwide.

The company

Sustainability
The MAHLE FOUNDATIONManagement report

Media skills for young parents
The MAHLE FOUNDATION has supported the “Screen free until 3”
initiative since 2022 in order to educate young parents. The project works together with pediatricians’ practices and points out
the potential dangers of screen media that children may be exposed to in the first three years of life. Doctors must raise awareness of the issue and provide parents with a signal sticker for theyellow screening booklet, which contains simple tips. Their website contains important information.

Consolidated financial statements

43

Management report

Group manreport44

The company

Sustainability

Management report

Consolidated financial statements

nagement

The company

Sustainability

Management report

Fundamentals of the MAHLE Group46

Business activities and corporate structure

46

Business segments

47

Group strategy

49

Economic report

51

Economic conditions

51

Business development

53

Net assets, financial position, and results of operations

57

Additional performance indicators

61

Employees

61Technology and innovation

63

Purchasing

64

Production

64

Quality management64

Safety at work, the environment and climate protection

65

Opportunity and risk report

66

Outlook

69

Consolidated financial statements

45

Fundamentals of the MAHLE Group“MAHLE—We Shape Future
Mobility”—our vision is ourcompass. We strive to makemobility even more efficient,environmentally friendly,
and comfortable.

We want to actively accompany the mobility transitionin three fields of action:
electrification, thermal management, and energy-efficient solutions for sustainably powered combustion
engines.

In times of economic turbulence, our background as afoundation provides stability.

Business activities andcorporate structure
MAHLE is a leading global development partner and supplier forthe automotive industry. As a technological pioneer of the mobilityof tomorrow, our goal is to make mobility more efficient, more environmentally friendly, and more comfortable. We want to actively
accompany the mobility transition in the areas of electrificationand thermal management, as well as in components for energy-efficient combustion engines. This includes the use of hydrogen andother non-fossil fuels. Our product portfolio thus covers all relevant technical aspects along the powertrain and air conditioning
technology, as well as the combination of these elements.
MAHLE products are installed in millions of passenger cars andcommercial vehicles, but our components and systems have also
been used off the road for decades: in stationary applications, mobile machinery, marine applications, and rail transport.

The MAHLE Group is divided into five business units: Engine Systems and Components, Filtration and Engine Peripherals, ThermalManagement, Electronics and Mechatronics, and Aftermarket. In
addition, there are four profit centers that serve specific segmentsof the market and specific customer segments, as well as central
service businesses.
We took advantage of the opportunities presented by globalization
at an early stage and supplemented our product portfolio throughstrategically founding and acquiring new business activities. We
have 152 production sites and twelve major research and development centers spread across five continents. At the end of 2022,
around 72,000 employees worked at our company.

46

The company

Sustainability

99.9 percent of the company shares are held by the non-profit
MAHLE Foundation. 0.1 percent is held by the Verein zur Förderung
und Beratung der MAHLE Gruppe e. V. (MABEG), which is also theholder of all voting rights and thus exercises the shareholder rights.
With this structure, we secure our entrepreneurial independence
and thus create the basis for long-term planning and far-sighted
investment decisions.

OWNERSHIP STRUCTURE OF THE MAHLE GROUP
MABEG

Verein zur Förderung und
Beratung der MAHLE Gruppe e. V.

Company shares

MAHLE - STIFTUNG
GMBHCompany shares

0.1 %99.9 %

Voting rights

Voting rights

100 %

0%

No profit-participationrights

Receives dividends to finance
MAHLE Foundation projects

Management report
Fundamental information

Consolidated financial statements

MAHLE GROUP
As at December 31, 2022

Sales: EUR 12,434 million | Headcount: 71,947

BUSINESS UNITSPROFIT CENTERS & SERVICES
Motor­sports andSpecial Applications
Large and Small
Engine Components

Engine Systems
and Components

Filtration andEngine Peripherals

ThermalManagement

Electronics andMechatronics

Aftermarket

Industrial Thermal Management

Control Units

Central Service Businesses
EUR 2,593 million

EUR 2,032 million

EUR 4,477 million

EUR 1,353 million

EUR 1,219 million

EUR 759 million

23,6899,212

20,436

8,583

1,926

8,101

The key performance indicators used by the Group are sales and
EBIT as well as operating result. The operating result is a key figure
similar to EBIT which we use internally for the operational management of our units. The main differences between operating resultand EBIT lie in the amortization of goodwill, the depreciation andamortization of hidden reserves, which are disclosed in purchaseprice allocations, and in the treatment of income from the sale ofbusiness activities.

Business segments
Engine Systems and Components
business unit
The Engine Systems and Components business unit is a supporting pillar of the company and stands for one of our core fields ofexpertise: we have decades of development and system expertiseand are among the global market leaders in terms of volume inmost product groups. Our product range, which we manufacture
at various locations worldwide, includes steel and aluminum pistons, piston rings, cylinder liners, bearings, and valve train systems. These products are used worldwide in cars, commercial
vehicles, large-scale engines, and two-wheeled vehicles. We arecontinuously developing our existing portfolio, focusing in particular on reducing energy consumption, CO2 emissions, other combustion engine emissions, and the use of sustainable and renewable fuels.

The company

Sustainability

Management report
Fundamental information

Sales
Headcount

Filtration and Engine Peripherals business unit
In this business unit, we are one of the world’s top-selling suppliers in terms of volume in many product groups. Here, we manufacture filter systems and components of the engine peripherals. With
our products, we improve air purity and at the same time prevent
contaminants in oil and fuel from harming the powertrain or theenvironment. This in turns boosts its efficiency and service life. In
recent years, we have developed modular systems for all important product groups in close cooperation with our customers—after all, the product environment can be very different even with an
identical basic engine. By developing special high-strength plastics, some of which are made from recycled material, it was possible to substitute metals and thus lower the weight even further. For
example, we are developing all-plastic oil filter modules with a fully integrated oil pump and oil cooling system, which are used in
the powertrains of electric vehicles.

Thermal Management business unit
Our solutions from the Thermal management business unit for batteries, fuel cells, power electronics, and electric drives enable
greater ranges, higher efficiencies, and a longer service life. In thisway, we contribute to the development of zero-emissions drives,in particular. Thermal management is also becoming increasingly
important for the further development of the combustion engine:
Our increasingly powerful and efficient cooling systems help to reduce fuel consumption and thereby reduce CO2 emissions. Ourinnovations in air conditioning create the conditions for novel cabin

Consolidated financial statements

47

design concepts and enable exceptional thermal comfort for vehicle occupants. In conjunction with powerful mechanical and electric compressors and electric auxiliary heaters, this brings decisive
advantages in terms of fuel consumption and range in the overallvehicle air conditioning system. In the area of thermal management, we are one of the suppliers with the strongest sales figureson the market worldwide.

Electronics and Mechatronics business unit
The Electronics and Mechatronics business unit is a growth driverin the MAHLE Group, particularly based on solutions for e-mobility. Our development and manufacturing expertise when it comesto electric motors as well as electronic and mechatronic systems
form the foundation of this business unit. This business unit comprises products for the automotive industry, as well as other solutions for mobile applications.
Our portfolio includes electric drive systems, actuators, auxiliarycomponents, as well as control and power electronics. When it
comes to the products that are still needed for combustion engines, such as starter motors and alternators for agricultural andconstruction machinery or mechanical air conditioning compressors, we are a reliable partner. However, we also accompany ourcustomers on their transformation toward e-mobility. Our focus ison e-mobility solutions, for example electric traction drives, onboard charging systems, or electric pumps, where we are helping
to shape future mobility with innovative solutions. In addition to
our activities in the automotive sector, we also supply e-drives forforklift trucks, golf carts, and electric scooters, for example, as wellas compact lightweight drives for a large number of e-bike manufacturers.

Comprehensive services are also part of the aftermarket portfolio,
such as technical support via our worldwide network, customized
training, and service information. Given the diversity of today’s vehicle technologies, our innovative solutions are an important building block for the success of our business partners. Our goal is toexpand our competencies, services, and product areas even further and to position MAHLE as a full-service provider. With demand-oriented product management, fast and reliable logistics
processes, and market-oriented pricing, we can also offer our customers individual repair solutions, making workshops even more
efficient.

Profit Centers and Services
Four business units serving specific market and customer segments are organized as profit centers: Motorsports and Special
Applications, Large and Small Engine Components, Industrial
Thermal Management, and Control Units. Thanks to this structure,
we offer our customers maximum flexibility, as well as customized
applications and components. In this way, we provide them withtargeted support in the development of specific new products. In
addition to the profit centers, our central service areas also contribute significantly to our success. They include, among others,
Purchasing, Sales, Advanced Engineering, Human Resources, IT
and Finance and Accounting. In addition, MAHLE Powertrain offers engineering services for both internal and external customers.

Aftermarket business unit
Our Aftermarket business unit supplies partners in trade, workshops, and engine repair, as well as electronic trading platforms
worldwide with original equipment quality, service equipment, anda range of services. The expertise based on series production oforiginal equipment is used for the product range in the automotive
aftermarket. The Aftermarket offers spare parts for the entire
MAHLE product range. These include engine components, filtration, and thermal management, as well as electronics, mechatronics, and other components in the engine periphery. MAHLE Service Solutions offers a wide range of solutions for workshop
equipment, such as vehicle diagnostics, battery diagnostics andmaintenance, exhaust gas analyzers, as well as service equipment
for the maintenance of air conditioning systems and automatictransmissions.

48

The company

Sustainability

Management report
Fundamental information

Consolidated financial statements

GROUP STRATEGY | EFFICIENCY IN MOTIONGroup strategy
The automotive industry is rapidly developing into a mobility industry with new products and services. As a result, it is important tomeet the requirements arising from global megatrends such as theneed to meet the rising challenges of urbanization and the need tomove toward zero-emissions and sustainable industry. There is noquestion that the mobility industry has to make a contribution toclimate protection. At MAHLE, we see this not only as an opportunity for further growth, but also as an obligation to design our technologies in such a way that mobility on our planet becomes as environmentally friendly and climate-neutral as possible.

tem expertise is an essential key to success here. Automotive suppliers are striving for end-to-end system expertise with integrated
solutions, which can reduce both complexity and costs. Automobile
manufacturers are designing large cross-model vehicle platforms
and need strong powertrain suppliers who can take on a larger portion of the value chain. In emerging markets, the market for combustion engine vehicles is expected to continue to grow, especiallyin South America. Hydrogen and alternative fuels are an important
supplement when it comes to decarbonizing applications like commercial vehicles or agricultural and construction machinery.

With our long-standing tradition as a supplier of powertrain components, the ongoing change in powertrain scenarios is by far themost important development for our company. In terms of themarket’s further development, we are expecting to see a significant increase in the global share of battery-powered electric vehicles as well as fuel cell and hybrid engine solutions. Despite continuous market growth of vehicles with combustion engines inemerging countries, our MAHLE market scenarios for newly produced passenger cars expect today’s market share of electric
drives to rise from just over 10 percent to around 70 percent in
2035. By then, we also expect around 30 percent of all commercial
vehicles worldwide to be built purely electrically with batteries or
fuel cells. This scenario results in the following market implicationsfor MAHLE’s Group strategy:

Based on the market implications and our vision “We Shape Future Mobility” as well as our mission “Efficiency in Motion,” MAHLE
is working on the climate-neutral mobility of tomorrow with the aimof further expanding its position as a systems provider in threestrategic areas.

The future of mobility is electric or hybrid. New vehicles will largely
be powered by electric drives, regardless of the energy source. Sys-

1.	In the area of electrification, MAHLE focuses on innovations in
the field of electric drive, components for fuel cells and batteries, as well as electric charging and associated solutions thatenable e-mobility with maximum efficiency through cutting-edge technology. In this respect, MAHLE is addressing
precisely those topics that are currently still posing challenges
for our customers: cruising range, performance, and fastcharging capability. The areas of application are vehicles of all
kinds—from e-bikes and e-scooters to passenger cars and delivery vans to heavy-duty commercial vehicles, off-road and industrial applications.

The company

Consolidated financial statements

Sustainability

Management report
Fundamental information

49

2.	The second strategic core area is thermal management—thevehicle’s heating and cooling. The aim here is to achieve energy
efficiency and cabin comfort for sustainable mobility. MAHLE
uses its in-depth expertise in the areas of powertrain, electronics, battery and in the passenger compartment to offer highly
efficient and at the same time cost-optimized system architectures for all drive types and vehicle classes via a modular system approach.
3.	In addition, MAHLE will continue to be an important competitive market player in combustion engine drives with superior
products, lean cost structures, and long-standing relationships
built on customer trust. As long as there is demand for combustion engines on the international markets, we can offer components for highly efficient engines that can also run on e-fuels,hydrogen, or other sustainable fuels. We advocate competition
for innovations and technologies to make the transport of people and goods globally climate-neutral.

50

The company

Sustainability

As an innovative technology group, we look to maintain our role as
an important supplier and partner in shaping mobility with ourthree strategic core areas. The following strategic objectives arederived from this: with a clear focus on efficiency and profitability,
we aim to achieve a leading market position in all core productgroups. In addition, we want to further increase the share of business that is independent of combustion engines and reduce Scope
1–3 CO2 emissions significantly as compared to the 2019 baseline.
To achieve these goals, the motivation, commitment, and expertise of our employees is of paramount importance. Through continuous and active management of our product portfolio, we ensure that our strategic direction is implemented in a manner that isboth consistent and economically successful. Already today, oursales are distributed evenly across our customer groups and coremarkets of Europe, North and South America, and Asia/Pacific.
This balance needs to be reinforced in the future, especiallythrough strong participation in growth markets.

Management report
Fundamental information

Consolidated financial statements

Economic reportCompared to the previous
year, our sales increased by
13.7 percent to EUR 12.4
billion.

We reacted to the challenges posed by changing
economic conditions
and took active countermeasures.

Nevertheless, full compensation for the additional burdens could not be achieved.
Our EBIT fell to EUR 60 million in the year under review.

Economic conditions
Overall economic development
The global economic recovery lost significant momentum in 2022
compared with the previous year. This was due to several factors:
The Russian invasion of Ukraine caused significant geopolitical
disruption with far-reaching consequences. The persistent anddeveloping inflationary pressure resulted in tighter monetary policy
conditions and a strong appreciation of the US dollar against mostother currencies. In addition, further waves of Covid-19 affectedeconomic activity with negative impacts on international supply
chains, while pandemic-related fiscal support was scaled back inmany countries. According to the January report of the International Monetary Fund (IMF), the global economy grew by around 3
percent in 2022, following growth of around 6 percent in the previous year. In advanced economies, the increase amounted to a solid 3 percent, whereas this figure came to around 4 percent inemerging markets and developing economies.
According to the IMF, economic output in the euro zone wasaround 4 percent and thus below the previous year (around 5 percent). In particular, rising inflation and the energy crisis caused by
the Russian invasion of Ukraine slowed growth. The growth of theGerman economy was around 2 percent and thus below the previous year (around 3 percent).
In the US, growth fell from around 6 percent in 2021 to around 2
percent in 2022. This was mainly due to higher interest rates andlower demand. At around 3 percent, growth in Brazil was also significantly lower than in the previous year (around 5 percent).

The company

Sustainability

Management report
Economic report

In the Asia/Pacific region, China still recorded growth of around 3
percent after around 8 percent in the previous year. This slowdown
is due in particular to the zero-tolerance policy in relation to the
Covid-19 pandemic and the consequent restriction of the country’s economic growth. Japan was slightly below the previous
year’s level with an increase of around 1 percent.

Exchange rate development
As an internationally operating group, MAHLE also conducts business in foreign currencies. The development of exchange rates is ofcentral importance here because it affects the conversion of financial data for accounting purposes.
For MAHLE, exchange rate fluctuations are significantly associatedwith financial and economic risks. In order to minimize the risks, we
strive for “natural hedging.” By operating production sites in all major sales regions, we make the Group less dependent on currency
volatility and exchange rate fluctuations.
Most of the trading currencies that are particularly relevant for ourcompany appreciated against the euro in the 2022 business year as
measured by the average market price (direct quotation). Comparedwith the previous year, the Brazilian real (+17 percent), the Mexican
peso (+13 percent), the US dollar (+12 percent), and the Chinese
renminbi (+8 percent) appreciated against the euro, including significant appreciation in certain cases. In contrast, the Turkish lira(–48 percent), the Argentine peso (–39 percent), and the Japaneseyen (–6 percent) lost value against the euro.

Consolidated financial statements

51

DEVELOPMENT OF THE MARKETS 2022
EuropeOverall economy
Passenger cars and lightcommercial vehicles
Medium-sized andheavy-duty
commercial vehicles

North America
Overall economy
Passenger cars and lightcommercial vehicles
Medium-sized andheavy-duty
commercial vehicles
Exchange rate

Asia/Pacific

USA (USD )Mexico (MXN )Overall economy
Passenger cars and lightcommercial vehicles
Medium-sized andheavy-duty
commercial vehicles

South America
Overall economy
Passenger cars and lightcommercial vehicles
Medium-sized andheavy-duty
commercial vehicles

Exchange rate
China (CNY )Japan (JPY )Exchange rate
Brazil (BRL )Argentina (ARS )Exchange rate development of various foreign currencies against the euro (EUR ) as measured by the average market price (direct quotation) compared with theprevious year: Argentine peso (ARS ), Brazilian real (BRL ), Chinese renminbi (CNY ), Japanese yen (JPY ), Mexican peso (MXN ), US dollar (USD )The directional arrows show the change of sales compared with the previous year:≥5%, 1.5% to 5%, −1.5% to 1.5%, −1.5% to −5%, ≤−5%

Development of the vehicle markets
Development of the markets for passenger cars and light­commercial vehicles
The production of passenger cars and light commercial vehicles
increased worldwide by 7 percent to over 82 million vehicles in thereporting year. Compared to the previous year, the recovery inglobal production was impacted in the first half of the year by theongoing semiconductor shortage as well as supply chains disruptions due to the Russian invasion of Ukraine and the lockdowns in
China. While growth in global production in the second half of theyear was driven particularly from Asia, production constraints remained in place in the Western regions.

In Europe, production shrank by almost 1 percent, partly due tothe ongoing semiconductor shortage and the sanctions in Russia,
which caused production in this market to fall by more than half.
North America grew by 10 percent due to high order backlogs.
However, at the beginning of the year and again at the end of theyear, there were production restrictions due to the limited availability of semiconductors. The South American market was also
affected by the semiconductor shortage in the first half of the year,
but benefited from a market recovery in the second half of the year
and subsequently recorded growth of 9 percent. In China, produc-

52

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Sustainabilitytion in the first half of the year was significantly impacted by partial
lockdowns as a result of Covid-19. However, the tax reduction forvehicles with a displacement of up to 2 liters at the beginning of thesecond half of the year led to very high sales and production figures. As a result, production in China increased by 7 percent. In
India, vehicle production increased significantly by around 23 percent due to high demand.
Development of the markets for medium-sized and heavy-duty
commercial vehicles
The production of medium-sized and heavy commercial vehicles
was significantly below the previous year’s level at around minus
15 percent. The main reason for this was production in China,
which fell by around 48 percent compared with the previous year.
In addition to the cyclical decline, Covid-19 lockdowns, higher
commodity prices, and more stringently regulated real estate loans
had a negative impact. The European market showed slight growthof around 1 percent. North America, on the other hand, benefited
from well-filled order books and was able to improve by around 11
percent compared with the previous year. Production in India
showed the strongest growth globally at around 36 percent, reaching a higher level than before the pandemic.

Management report
Economic report

Consolidated financial statements

SALES BRIDGE
in EUR millions
2021

2022
+13.7%

14,00012,00010,933

12,434+1,056+14+430+9.7 %

10,000
8,000
6,000
4,000
2,000
0
Sales
2021

Exchange rate
effects

Changes to theconsolidation group

Organic
growthSales
2022

Business development
Development of the MAHLE Group
Sales of the MAHLE Group increased by 13.7 percent from EUR
10.9 billion to EUR 12.4 billion in the 2022 business year and werethus above the pre-crisis level of 2019.
In the first half of the year, sales development was hampered by aglobally challenging and volatile market environment—including inparticular the pandemic-related lockdowns in China, uncertainties
regarding the stability of supply chains, and the Russian invasionof Ukraine. When the war broke out, our direct business activities
in Russia were of subordinate importance to the Group; however,
the war has had considerable indirect impacts on our businessactivities. The significant additional costs associated with the increased raw material, energy, and freight prices required continuous adjustments to our sales prices. These mainly took effect inthe second half of the year, meaning that the development of sales
was improved to a large extent by price adjustments in addition to
an increase in volume. In addition, exchange rate effects in theamount of EUR 430 million and changes to the consolidationgroup in the amount of EUR 14 million had a positive impact. The
positive exchange rate effects were mainly due to the appreciationof important trading currencies against the euro, such as the US
dollar, the Brazilian real, and the Chinese renminbi. The changes in
the consolidation group are due to the acquisition of the air conditioning business of Keihin Corporation (now Hitachi Astemo, Ltd.)
with locations in Japan, Thailand, and the USA with effect fromFebruary 1, 2021.
The international positioning of the MAHLE Group, which has beensteadily expanded in recent years, is reflected in the operation of

The company

Sustainability

Management report
Economic report

production and development locations in 29 countries. Throughour global operations, we are close to our customers, can work
intensively with them, and develop targeted innovations based on
the requirements of the respective markets. At the same time, thisallows us to react flexibly to regional market fluctuations. In addition to the regional distribution, the distribution of sales is also diversified according to customer groups. The share of sales of ourten largest customers is less than 50 percent.

DEVELOPMENT OF SALES 2018 – 2022
in EUR billions+13.7 %
15
12.6
12

12.4

12.0
9.8

10.9

9
6
3
0
2018

2019

Consolidated financial statements

2020

2021

2022

53

Despite this diversification in terms of sales, the performance ofthe MAHLE Group was dampened by a number of crises in thereporting year. In order to meet these challenges in the best possible way, we took countermeasures with targeted measures—
also based on the crisis experiences of the two previous years:
Due to the changed overall economic conditions, which were particularly evident in the increased material, energy, and freight prices, we were in continuous exchange with key customers and suppliers in order to distribute these additional costs proportionately
across the value chain in the form of price adjustments and priceescalation clauses. In addition, MAHLE set up a Group-wide program in the reporting year that manages all activities to improve
our liquidity in the short term. Within this framework, we have taken measures to focus our approach to investment and reduce
capital employed. To mitigate the risk of a possible gas shortageat our sites, we have put together a global crisis team, which continuously assessed the uncertainties surrounding the energy crisis,
identified savings measures, and developed preventive and reactive measures based on contingency plans.
In order to sustainably increase our profitability and secure ourcompetitiveness, we have continued our global restructuring with
undiminished consistency, following on from the previous year.
The need for these measures was underpinned by the businessdevelopment. In response to the transformation of the automotive
industry and the resulting shift away from the combustion engine,increasing competitive pressure and site-specific capacity utilization, we had to discontinue production activities at the Vilanova i laGeltrú/Spain and Chavanod/France sites. In the Asia/Pacific region, we closed our site in Changchun/China.

Development of the business segments
Despite a challenging market environment, all our business units
and profit centers were able to increase their revenues organically.
Our future fields in particular developed very positively. After oursales were largely stable in the first half of the year, we were able
to improve sales in the second half of the year, most notably
through successful price negotiations with our customers.
Engine Systems and Components business unit
In our Engine Systems and Components business unit, we achieved
revenues of EUR 2,593 million—around 9.8 percent above the previous year’s figure. Adjusted for significantly positive exchange rate
effects, organic sales growth amounted to 6.2 percent. Significant
increases in sales were achieved in the product groups of power cell
units, gasoline engine pistons for passenger cars, camshafts andcylinder liners, among others. In contrast, we recorded a decline insales of aluminum pistons for commercial vehicles due to the technology shift toward steel pistons. From a regional perspective, wewere able to significantly increase our sales, especially in the regions of North and South America, where we organically achieved asales growth of 10.7 percent and 31.1 percent respectively. In the
Asia/Pacific region, sales development was hampered by Covid-19
lockdowns and sharply declining demand for truck applications forcommercial vehicles in China.
Filtration and Engine Peripherals business unit
Sales of our Filtration and Engine Peripherals business unit in theyear under review amounted to EUR 2,032 million and were thus
around 11.7 percent above the previous year’s figure. We alsoachieved significant organic sales growth of 8.7 percent. The increase is evenly distributed across almost all product groups,

SALES BY BUSINESS SEGMENTin EUR millions
2021

2022

+15.9 %

5,000
4,000

4,477
3,865
+ 9.8 %
+11.7 %

3,000

2,363

2,593
1,819

2,000

+13.4 %

2,032

+14.6 %
+20.6 %

1,193

1,353

1,064

1,219

1,000

630

759

0
Engine Systems
and Components

54

Filtration andEngine Peripherals

The company

Sustainability

ThermalManagement

Electronics andMechatronics

Management report
Economic report

Aftermarket

Consolidated financial statements

Profit Centers &Servicessuch as air filter and air intake modules and cylinder head covers.
In the North America and Asia/Pacific regions, we achieved strong
growth and were also able to post organic growth of 9.6 percent
and 3.7 percent respectively. In Europe, we achieved sales growth
adjusted for negative exchange rate effects of 15.0 percent. In order to further strengthen the business unit in the European region,a production site is currently being set up in Krotoszyn/Poland.
Thermal Management business unit
In the Thermal Management business unit, we were able to increase sales by 15.9 percent to EUR 4,477 million. Even adjusted
for consolidation effects from the acquisition of the air conditioning business of the former Keihin Corporation (now Hitachi Astemo, Ltd.) on February 1, 2021 as well as exchange rate effects,
sales increased by 9.1 percent. In the North America region, we
achieved organic sales growth of 18.9 percent. The developmentin the Asia/Pacific region was positively characterized by strong
growth in the passenger car business, counteracted by plant closures due to Covid-19 lockdowns. Sales in the region increasedorganically by 1.3 percent. In Europe, our strongest region in termsof sales, we also achieved organic growth of 4.2 percent. The
Thermal Management business unit further expanded its productportfolio in the reporting year, consistently continued its growthwith products for battery-electric vehicles and oversaw projects
started in the area of electric auxiliary heaters and battery coolingplates, in particular. For example, sales in the battery cooling
product area grew at a double-digit rate year-on-year. By further
increasing its shares in the MAHLE Behr Group as of January 1,
2022, MAHLE has further expanded its core thermal managementbusiness.

Aftermarket business unit
In the Aftermarket business unit, we generated revenues of EUR
1,219 million—14.6 percent above the previous year. After adjusting for negative effects from exchange rate conversion, sales in
the Aftermarket business unit rose significantly by 15.4 percent. In
terms of our global markets, sales in the South America region
grew organically by 48.8 percent and thus were particularly strong.
While the positive sales development in the South America region
is attributable to engine components as well as filters and thermal
products, whereas in Europe it resulted mainly from sales of filters.
In the North America region, the engine components productgroup is recording the strongest sales increases. In Asia/Pacific,
all product groups were negatively impacted by the zero-tolerance
policy in China regarding the Covid-19 pandemic. Nevertheless,we were able to increase organic sales by 2.8 percent comparedwith the previous year. In Service Solutions, we again achieved
significant growth in Europe and North America.
Profit Centers and Services
In our profit centers and services, we achieved revenues amounting to EUR 759 million and organic sales growth of 17.4 percent.
All profit centers contributed to this positive result with double-digit growth rates. The Large and Small Engine Components
and Motorsports and Special Applications profit centers performed particularly well, with sales increasing organically by 27.6
percent and 18.2 percent respectively.

Electronics and Mechatronics business unit
Sales in the Electronics and Mechatronics business unit in 2022
amounted to EUR 1,353 million and were thus around 13.4 percent above the previous year’s level. Even adjusted for positive
exchange rate effects, there was very clear growth of 10.6 percent. Our Electronics and Mechatronics segments in particular
contributed to this as well as our Compressors segment. While
the start-up of the first large-scale project in the field of electricwater pumps was implemented in China, the start-up of the firstlarge-volume production order with electric compressors was
prepared in Hungary. In addition, we further expanded the product segment for electric oil pumps and prepared the start-up of
the next on-board charger generation in Spain. In the European
plants in Slovenia and Spain, we recorded significant increases
in sales, helping Europe—i.e. the region with the highest sales—
achieve significant organic growth of 20.1 percent. Sales also
increased significantly in the other regions. In order to further
strengthen our business in the Asia/Pacific region, we have bundled and further expanded our activities in the Electronics segment in Suzhou/China with those of the Compressors segment.

The company

Sustainability

Management report
Economic report

Consolidated financial statements55

Development of the regions
Our sales increased strongly in most regions in the reporting year.
While the increase in sales in the North America, Asia/Pacific, andSouth America regions is partly due to positive exchange rate effects, the development of sales in Europe was burdened by negative exchange rate effects. We were able to achieve significant increases in sales organically, with the exception of the Asia/Pacificregion. Below, we provide an overview of how the regions performed in detail, based on sales by country of production.
SALES BY REGION
Total:EUR 12,434 million<1%
Africa21 %Asia/Pacific

44 %Europe6%South America

29 %North America
The directional arrows show the change in the proportion of sales
compared with the previous year:≥5%, 1.5% to 5%, −1.5% to 1.5%, −1.5% to −5%, ≤−5%

EuropeIn the Europe region, we achieved sales of EUR 5,427 million andthus growth of 8.5 percent compared with the previous year. Significant exchange rate effects resulted from the devaluation of theTurkish lira and the Polish zloty against the euro. Adjusted for theoverall negative exchange rate effects, sales growth amounted to
9.7 percent—despite ongoing supply chain problems and shrinking vehicle markets. The two strongest business units in terms ofsales, Engine Systems and Components and Thermal Management, increased their sales organically by 6.6 percent and 4.2 percent respectively.

56

The company

Sustainability

North America
Sales in the North America region in the year under review amounted to EUR 3,547 million, rising 28.2 percent year-on-year. The region’s sales were significantly influenced by the appreciation ofimportant trading currencies such as the US dollar against theeuro. Adjusted for exchange rate effects and effects of changes in
the group of consolidated companies, organic sales growthamounted to 14.1 percent. We were able to benefit from the market
recovery in both the passenger car and commercial vehicle sectors. All our business units achieved significant organic sales
growth in the North America region.
South America
In the year under review, our sales in South America increased significantly by 33.7 percent to EUR 788 million. We benefited fromthe appreciation of the Brazilian real against the euro. However,even adjusted for exchange rate effects, our sales growth of 30.6
percent was considerable. Our organic growth in the region thus
noticeably exceeded the general market trend. This was in part due
to the high demand for engine components for commercial vehicles.
Asia/PacificIn the Asia/Pacific region, we were able to increase our sales in theyear under review to EUR 2,618 million—a rise of 3.7 percent. Thisis partly due to positive exchange rate effects from the appreciationof important trading currencies, such as the Chinese renminbi andthe Indian rupee against the euro. Adjusted for exchange rate andconsolidation effects, sales remained at the previous year’s level. In
China, we posted sales significantly below the previous year’s level. This is due, in particular, to Covid-19-related plant closures. In
India, on the other hand, we benefited from high demand and wereable to significantly increase our sales.
AfricaWith an increase of 12.1 percent, sales in the Africa region rosesignificantly to EUR 54 million. Adjusted for exchange rate effects,
sales increased by 10.4 percent. In the smallest region of ourGroup, revenues were primarily generated by the Thermal Management business unit.

Management report
Economic report

Consolidated financial statements

DEVELOPMENT OF EBITDA 2018–2022
in EUR millions

1,400

DEVELOPMENT OF EBIT 2018–2022
in EUR millions

800

1,377

1,200

773

600

1,000

793

712

800
600

671

400
200

435

400

60

−192

0

200

169

96

-200

0
2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

Net assets, financial position,and results of operations
Results of operations
In the 2022 business year, MAHLE generated sales of EUR 12.4
billion, compared to EUR 10.9 billion in the previous year. Adjusted
for changes to the consolidation group and exchange rate effects,
sales were 9.7 percent above the previous year’s figure. In addition to the positive exchange rate effects and changes to the consolidation group, the strong increase was due to the adjustment ofsales prices as well as an increase in volume. This means that,
despite a challenging global market environment, our sales forecast—which assumed a slight organic increase in sales—was significantly exceeded.

allocations, amortization of goodwill, and release of badwill, theEBIT margin was 1.0 percent (previous year: 2.4 percent).

The result from business activities amounted to EUR –165 million
and was significantly below the previous year’s positive figure of
EUR 58 million. Before the Russian invasion of Ukraine at the endof February 2022, we were expecting a moderate improvement.
Especially due to the indirect effects of the war, this forecast could
not be achieved. The additional costs, mainly due to price increases in material, energy, freight, and personnel costs as well as special freight costs, had a considerable impact on the earnings position. We reacted to the challenges posed by the changes in theeconomic environment and took active countermeasures. Nevertheless, the additional burden could not be fully compensated byprice adjustments, so that our operating income figures EBIT and
EBITDA as well as operating result only used for internal steering
were significantly lower than in the previous year. The operating
result is a key figure similar to EBIT but adjusted for individual circumstances. The EBIT fell to EUR 60 million (previous year: EUR
169 million) and the EBIT margin fell noticeably to 0.5 percent (previous year: 1.5 percent). Adjusted for the effects of purchase priceIn detail, the main items of the income statement developed asfollows: The cost of sales amounted to EUR 10,653 million andwas thus EUR 1,397 million higher than in the previous year. The
cost of sales ratio rose from 84.7 percent to 85.7 percent. This isdue in particular to the very sharp rise in material prices at the
beginning of the year—for aluminum, granulate, copper, and steel
in particular—as well as higher personnel costs. This additionalburden could not be fully offset by achieving productivity increases and price adjustments. In addition, the higher costs for freightand special freight to some extent weighed on both the cost of
sales and the selling expenses. Our selling expenses rose by EUR
68 million to EUR 629 million. General administrative expenses
rose from EUR 503 million to EUR 573 million. The ratio to sales
remained at the previous year’s level of 4.6 percent. Despite thedifficult environment, we maintained a high level of expenditures in
research and development activities and, at EUR 671 million, invested slightly more in absolute terms than in the previous year
(previous year: EUR 666 million). Other operating income rose by
EUR 52 million to EUR 602 million, while other operating expenses
rose by EUR 140 million to EUR 431 million. Overall, this reduced
the balance from EUR 258 million to EUR 171 million. This is primarily due to the fact that, compared to the previous year, special
effects such as a tax refund in South America did not apply andpositive effects from the revaluation of provisions for restructuring
measures were lower. Higher expenses from exchange rate effects also negatively impacted this position.

The company

Consolidated financial statements

Sustainability

Management report
Economic report

57

CONSOLIDATED INCOME STATEMENTin EUR millions
2022

in %

2021

in %

Sales

12,434100.0

10,993

100.0

Cost of sales–10,653–85.7–9,256–84.7

Gross profit on sales

1,781

14.3

1,677

15.3

Selling expenses and general administrative expenses–1,201–9.7–1,064

–9.7

–671

–5.4

–666

–6.1

Research and development expenses
Other operating income and expenses

171

1.4

258

2.4

Financial result

–244

–2.0

–148

–1.4

Result from business activities

–165

–1.3

58

0.5

Taxes on income

–135

–1.1

–139

–1.3

Result after taxes

–300

–2.4

–81

–0.7

Other taxes

–32

–0.3

–27

–0.3

Consolidated net loss/net income

–332

–2.7

–108

–1.0

2022

in %

2021

in %

Consolidated net loss/net income

–332

–2.7

–108

–1.0

Taxes on income

135

1.1

139

1.3

Interest and similar expenses

268

2.2

148

1.3

Other interest and similar income

–25

–0.2

–17

–0.2

Income from other securities and long-term loans

0

0.0

0

0.0

Net income and expenses from financing from currency translationand financial instruments

15

0.1

8

0.1

EBIT

60

0.5

169

1.5

Depreciation, amortization, and impairments of intangible
and tangible fixed assets

611

4.9

624

5.7

EBITDA

671

5.4

793

7.3

RECONCILIATION OF CONSOLIDATED NET LOSS/NET INCOME TO EBIT AND EBITDA
in EUR millions

As in previous years, all cost items—except for research and development expenses as well as administrative expenses—were
adversely impacted by effects from purchase price allocations under the German commercial code (HGB). In total, the effects frompurchase price allocations before taxes amounted to EUR 60 million in 2022. This also includes amortization of goodwill of EUR 49
million and release of badwill of EUR 40 million.

Net assets position

The financial result deteriorated by EUR 96 million to EUR –244
million in 2022 compared to the previous year. The main reason forthis is the negative price development of the plan assets. Despite
the negative Group result, a total of EUR 135 million was incurredin taxes on income. This is due, in particular, to withholding tax
expenses not related to income and to tax burdens on positive
results of individual companies that cannot be offset for tax purposes against losses of other Group companies. At the same time,

As of the balance sheet date on December 31, 2022, our balance
sheet total had fallen by EUR 267 million to EUR 8,322 million compared to 2021. At EUR 3,383 million, fixed assets were EUR 68
million below the previous year’s level. Since depreciation slightly
exceeded investments, tangible fixed assets fell by EUR 10 million.
Intangible fixed assets also fell by EUR 45 million. This is mainly due
to the amortization of goodwill and hidden reserves that were disclosed as part of purchase price allocations.

58

Management report

The company

Sustainability

deferred taxes on temporary differences and loss carryforwards
could not be fully recognized and valuation allowances were madeon deferred taxes for temporary differences. In total, this resulted
in a net loss of EUR 332 million (previous year: net loss of EUR 108
million).

Economic report

Consolidated financial statements

BALANCE SHEET STRUCTURE OF THE MAHLE GROUP
in EUR millions

Equityandliabilities

Assets8,588

Fixed assets

3,451

Inventories

1,383

Receivables and other assets

3,754

8,322

8,322

8,588

1,677

2,050

Equity

2,504

2,596

Provisions

4,140

3,942

Payables and other liabilities

3,383

1,485

3,454

2021

2022

The reduction in the balance sheet compared to the end of theprevious year was largely due to current assets, which fell by EUR
133 million to EUR 4,685 million. This is due, in particular, to thesignificant reduction in cash holdings by EUR 506 million to EUR
604 million. Due to the challenging circumstances in the procurement markets, we made considerable efforts to limit the capital tied
up in net working capital. Nevertheless, inventories rose by EUR
102 million to EUR 1,485 million. This is primarily due to exchange
rate effects and higher purchasing prices. Driven by exchange rate
effects, the higher sales level as well as outstanding receivablesfrom negotiated price adjustments as of the balance sheet date,receivables and other assets also rose by EUR 258 million to EUR
2,580 million. The other assets amounted to EUR 253 million.

2022

2021

volume. Net debt on our balance sheet rose from EUR 1,056 million
to EUR 1,678 million in the reporting year, in particular due to thehigh capital tied up in net working capital and the net loss for theyear.

Financial position
In the course of its global growth, MAHLE has broadly positioned
and diversified its Group financing in recent years. In addition to a
syndicated credit line, German private placement loans (Schuldscheindarlehen), and bilateral loans, euro-denominated corporate
bonds form part of the financing portfolio. With a conservative financing policy, MAHLE pursues the long-term goal of an implicit
investment grade risk. MAHLE was rated by Moody’s for the firsttime in 2021 and received a Ba1 corporate family rating (outlook
stable). On April 26, 2022, Moody’s changed the outlook for
MAHLE’s ratings from stable to negative and confirmed the Ba1
rating. On September 30, 2022, Moody’s downgraded the ratingsof MAHLE GmbH from Ba1 to Ba2 (negative outlook).

Equity declined by EUR 373 million to EUR 1,677 million in 2022.
The decrease is primarily due to the net loss for the year, counteracted by positive exchange rate effects in the amount of EUR 21
million. The equity ratio fell accordingly from 23.9 percent to 20.2
percent, as the effect of the reduction in equity was not fully offset
for by the balance sheet contraction. The acquisition of the air conditioning business of Keihin Corporation (now Hitachi Astemo, Ltd.)as of February 1, 2021 resulted in a carrying amount of badwill of
EUR 63 million as of December 31, 2022. Provisions fell to EUR
2,504 million, a decrease of EUR 92 million from the end of theprevious year. This is primarily due to the decrease in provisions in
the personnel area by EUR 106 million, in particular due to cash-out
for restructuring measures. Similarly, the provisions for guarantee
and risk fell by EUR 21 million. This was offset by the increase inprovisions for pensions, primarily due to interest rate effects. Liabilities rose in total by EUR 232 million to EUR 4,024 million. This is
primarily due to the increase in liabilities to banks in the amount of
EUR 616 million, as MAHLE has concluded a loan with the European Investment Bank for EUR 300 million. The repayment of a corporate bond in the amount of EUR 500 million maturing in the first halfof 2022 had a counteracting effect. Trade payables rose by EUR
111 million to EUR 1,369 million, partly due to the increased sales

A EUR 500 million corporate bond maturing in May 2022 waslargely repayed with funds from the issue of a seven-year EUR 750
million corporate bond from 2021. In August 2022, MAHLE concluded a loan of EUR 300 million with the European Investment
Bank. These additional funds complement the already existing
syndicated credit line of EUR 1.8 billion, of which EUR 1.5 billion
run until mid-2025. An additional financing component is formed
by further firmly committed credit lines in the amount of around
189 million EUR with various remaining terms until mid-2024. As ofthe balance sheet date, the drawdown of firmly committed credit
lines amounted to EUR 319 million. As a result, the unused, firmly
committed credit lines amounted to EUR 1.7 billion at the end of
the reporting year and, like the cash holdings, contributed to thefinancial stability of the MAHLE Group. Our cash holdings were
diversified across various banks that were selected according torating criteria.

The company

Consolidated financial statements

Sustainability

Management report
Economic report

59CASH FLOWS
in EUR millions

1,200

+103

−478

1,041

1,000
800

–361

600
400

−61

243

200
0

Cash funds*at beginningof period

Cash flowfrom operating
activities

Cash flowfrom investing
activities

Cash flowfrom financing
activities

Exchange rateand consolidation
effects

Cash funds*
at endof period* Cash in hand, bank balances with an initial term of less than 3 months, and checks less liabilities to banks with an initial term of less than 3 months. The short-term liabilities
which were netted against cash balances contained EUR 314 million that were related to short-term liabilities based on a committed credit line with a remaining tenor of morethan one year.

We were able to close the 2022 business year with a cash inflow of
EUR 103 million from the cash flow from operating activities. This
was noticeably less than in the previous year and is mainly due tothe Group’s net loss for the year and a high level of capital tied up
in net working capital, especially due to increased inventories andreceivables. The net cash outflow of our cash flow from investing
activities amounted to EUR 478 million, which was higher than in
2021, partly due to increased expenditure on tangible fixed assets.
Cash flow from financing activities showed a net outflow of EUR
361 million (previous year: net inflow of EUR 345 million), which, in
addition to interest and dividend payments, was primarily attributable to the use of liquid funds to repay the corporate bond. In
particular, the loan of EUR 300 million concluded with the European Investment Bank had a counteracting effect.

Investments
Despite the economic burden of a globally challenging and volatile
market environment, we continued to focus on the technologicaltransformation of the MAHLE Group. To this end, we invested EUR
461 million in tangible fixed assets in the reporting year, which issignificantly more than in the previous year in absolute terms (previous year: EUR 401 million). The investment ratio, which reflects
the relationship between investments and sales, was at the previous year’s level of 3.7 percent. In important future areas, in particular in the Thermal Management, Electronics, and Mechatronics
divisions, the investments significantly exceeded depreciation. We
continued our investment restraint in combustion engine-dependent business units. Overall, this resulted in a ratio of investments
to depreciation of 94 percent for the Group. This was substantiallyhigher than the previous year’s figure (previous year: 83 percent).

60

The company

Sustainability

As in the previous year, the largest share of our investments in tangible fixed assets was made in our Thermal Management division.
Regarding the structural transformation of our Group, investments
were made in the construction of new buildings in North America
and in the production of products for battery electric vehicles, inaddition to investments in connection with customer projects. In
the Electronics and Mechatronics business unit, we significantly
increased investments in tangible fixed assets; in particular, investments were made in the preparation for the start-up of the next
on-board charger generation in Spain. Another focus of investment
was the expansion of production and development of electric compressors at our European and Asian plants. In view of the transformation in the automotive industry, we deliberately focused our investment activities in our Engine Systems and Components
business unit. In the reporting year, we focused on expanding thecapacity of a steel piston production line for commercial vehicles.
In our Filtration and Engine Peripherals business unit, we invested
in particular in the establishment of oil cooler production and the
expansion of the plant infrastructure as part of the relocation of
production activities from Mattighofen/Austria to Eastern Europe.
In addition to investments in tangible fixed assets, we also usedstrategic acquisitions in the reporting year to expand our businesssegments as part of our strategy. To strengthen our core businessin thermal management, we further increased our participation in
the MAHLE Behr Group at the beginning of 2022.

Management report
Economic report

Consolidated financial statements

Additional performance indicators
The majority of our expen­
ditures in research anddevelopment were in our
strategic core areas ofelectrification and thermal
management.

Our employees are an
essential factor for our longterm success. Accordingly,
in the year under review, ouremployees participated ina total of 72,056 qualification
activities worldwide.

Our CO2 emissions from theuse of fossil fuels and theuse of electricity decreased
last year by more than
12 percent compared with
2021.

Employees
Our employees are an essential factor for the long-term successof the MAHLE Group. Their expertise, motivation, and commitment are the basis for our sustainable development. Accordingly,
in the year under review, despite the continuing pandemic restrictions, we also consistently invested in the further education andtraining of our workforce and pushed ahead with the switchover
to flexible online formats here as well. Our employees participatedin a total of 72,056 qualification activities worldwide (2021: 71,281).
In addition, the expansion of our corporate e-learning offering enabled online courses to be completed by 30,631 learners (2021:
around 26,300).

reasons for this development are our organic growth, especially infuture-­oriented areas, a good order situation, strong production
capacity utilization, especially in North America, and the increased
expansion of our shared service centers worldwide. The worldwide absence rate (excluding joint ventures) in the reporting year
amounted to 4.4 percent (previous year: 4.2 percent).

Headcount by region

As of the end of 2022, the MAHLE Group had 71,947 employees
worldwide. This corresponds to an increase in staff comparedwith the previous year by 649 persons or 0.9 percent. The main

As at the reference date, 31,165 were employed at our locations in
Europe, thus 1,282 people or 4.0 percent fewer than in 2021. Restrcturing measures and capacity adjustments led to a decline inmany European countries. This was due on the one hand to thedifficult market situation and on the other hand to the general transformation of the automotive industry. The progressive expansion of

HEADCOUNT DEVELOPMENT 2018–2022

HEADCOUNT BY REGION

80,00079,564

Total:
71,94777,01572,18471,29871,947

1%
Africa23 %Asia/Pacific

60,00012 %South America

40,00020,00021 %North America

0
2018

The company

43 %Europe2019

Sustainability

2020

2021

2022

Management report
Additional performance indicators

The directional arrows show the change in the proportion of employees
compared with the previous year:≥5%, 1.5% to 5%, −1.5% to 1.5%, −1.5% to −5%, ≤−5%

Consolidated financial statements61the Electronics and Mechatronics business unit, on the other
hand, led to an increase in the number of employees in some European countries. In particular, the number of employees in Slovenia rose by 136 and in Bosnia and Herzegovina by 50 people.
In North America, as of the end of 2022, we counted a total of
14,769 employees and thus 1,570 people or 11.9 percent morethan in 2021. The increase in personnel there was mainly in theCompressor and Thermal Management areas in Mexico and isdue to a very good order situation, new production projects, andhigh production utilization.
In South America, at the end of the year under review 8,763 employees worked for us—that is 27 people or 0.3 percent more thanin the previous year. After the major staff cutbacks at the beginning of the Covid-19 pandemic 2020, the growth trend from theprevious business year continued.
In the Asia/Pacific region, we had 16,432 employees at the end of thereporting year—that is 371 people or 2.3 percent more than in 2021.

Headcount by business segment
The number of employees in our Engine Systems and Components
business unit decreased by 581 people. Nonetheless, the business
unit remained the largest in the company, accounting for a total ofaround 32.9 percent of employees across 40 locations. The Filtration and Engine Peripherals business unit operated across 31 locations, employing 12.8 percent of the Group workforce—some 50
people or 0.5 percent more than in 2021. In the area of ThermalManagement, our 44 locations housed 28.4 percent of our total
workforce—i.e. 199 people more than in the previous year. At theend of the financial year, there were 8,583 employees in the Electronics and Mechatronics business unit, which corresponds to a
11.9 percent of the total workforce. At the end of 2022, our Aftermarket business unit, which is the smallest in terms of personnel,
employed a total of 80 employees more than at the same time lastyear. In Profit Centers and Services, we recorded an increase inpersonnel of 455 employees compared with the previous year. Thiswas mainly due to further expansion and relocation to shared service
centers in Wrocław/Poland, B­ elgrade/Serbia, Monterrey/Mexico, andPune/India.

In Africa, as at the reporting date of December 31, 2022, there
were 818 employees working at our locations—that is 37 people
or 4.3 percent fewer than in the previous year.

HEADCOUNT BY BUSINESS SEGMENT
2021
30,00025,0002022−2.4 %+1.0 %

24,270 23,689

20,237 20,436
20,000+0.5 %

15,000

9,162

10,000+5.5 %

9,212

8,137

8,583

5,000

+6.0 %+4.3 %
1,846

7,646

8,101

1,926

0
Engine Systems
and Components

62

Filtration andEngine Peripherals

The company

Sustainability

ThermalManagement

Electronics andMechatronics

Management report
Additional performance indicators

Aftermarket

Consolidated financial statements

Profit Centers &ServicesTechnology and innovation
Despite the difficult environment, in the year under review, we invested EUR 671 million in research and development and thus inabsolute terms slightly more than in the previous year. The majority of our expenditures were in our strategic core areas of electrification and thermal management. In relation to sales, this resulted
in a ratio for 2022 of 5.4 percent (previous year: 6.1 percent). As at
December 31, 2022, we employed 5,456 employees in this area. In
the reporting year, MAHLE registered 384 new patents, in addition
to 462 further records of invention.

R&D EXPENDITURE 2018–2022
in EUR millions+0.9 %
800

751

751

2018

2019

644

666

671

2020

2021

2022

600
400
200

TOTAL RECORDS OF INVENTIONS IN 2022:

0462

WITH 5,456 R&D EMPLOYEES

vehicle classes in the commercial vehicle sector can be covered,
all in a highly efficient system with optimized costs.

The entire automotive industry is in a state of change, and the paceof technological transformation has continued to accelerate. This isespecially true for the advance of electromobility: many of our customers are adapting their plans accordingly, just like MAHLE itself.
We support the vital contribution from the transport sector to climate protection through our openness to new technology when it
comes to customers and markets. Accordingly, we are working ontechnologies for all forms of drive in our strategic core areas.

Selected innovations in the 2022 business year
With the SCT (Superior Continuous Torque) electric motor, MAHLE
introduced a motor in 2022 that can operate at high power for an
unlimited period of time and can also be built without the use ofrare earth metals at the customer’s request. The new development
is suitable for passenger cars, commercial vehicles as well as agricultural and construction machinery. This makes MAHLE a supplier offering the full range of products in the field of electric drives
that covers all requirements from pedelecs to heavy-duty commercial vehicles, off-road and industrial applications. This load
capacity is achieved in the new SCT electric motor through the useof an innovative integrated oil cooling system. The extremely compact design results in material cost and weight advantages in addition to performance benefits.

At the Shipbuilding, Machinery and Marine Technology (SMM)
trade fair in Hamburg in 2022, MAHLE presented thermal management solutions for the fuel cell periphery of electrically powered
watercraft of all classes. Thanks to climate-neutral hydrogen production, they are zero-emissions vehicles.
In addition to the fuel cell, the use of hydrogen as a combustion
fuel has the potential to make many heavy-duty and off-highway
applications climate-neutral particularly quickly. Hydrogen engines are ideal for high load cycles with sudden load stage changes and are insensitive to heat, impurities, and vibrations. At the
IAA, MAHLE presented for the first time a new power cell unit—asystem consisting of pistons, piston rings, connecting rods, pins,and cylinder liner—as well as a high-pressure impact or for flushing the crankcase. This means that hydrogen can be used withexceptional efficiency and safety in combustion engines with along service life.
MAHLE has also signed a declaration of intent with Siemens tocooperate in the field of wireless charging systems for e-vehicles.
In future, the overall system consisting of infrastructure and automotive engineering will be developed and tested together. One
focus here is the advancement of technological standards for inductive charging technology to enable broad acceptance of wireless charging.

Thermal management plays a special role and is important acrossthe board in the development of efficient and CO2-neutral drives,
namely in heating and cooling in the vehicle. Its complexity and thedemands on its performance increase considerably with battery
electric drives and fuel cell systems. In view of the increasing diversification in the drive mix for commercial vehicles, MAHLE presented a modular design of the system at the IAA Transportation(International Motor Show in Germany). This means that the ideal
system architecture can be developed for every application andevery vehicle, and the multitude of individual driving profiles andIn future, MAHLE Aftermarket will also use the charging plug inaddition to the existing OBD port for battery diagnostics of e-vehicles. For this purpose, our service and spare parts division works
together with a partner, who in turn evaluates the measured datain the cloud and provides valuable information about the conditionof the vehicle battery. For example, any need for repairs can bepredicted. Since the beginning of 2022, the new diagnostics solution has been tested in practice on passenger cars together with
TÜV NORD Mobilität and a well-known European fleet operator.

The company

Consolidated financial statements

Sustainability

Management report
Additional performance indicators

63

Purchasing
The reporting year was again challenging from a purchasing perspective. The market environment continued to be characterized
by the effects of the Covid-19 pandemic and the need to safeguard
the stability of supply chains and call-off figures. These varied
greatly from region to region. There were particularly significant
implications in China with global repercussions. The Russian invasion of Ukraine created further significant uncertainties in themarket and caused considerably higher commodity prices, unpredictability with regard to energy supply and impaired supply
chains.
In particular, the sharp rise in raw material prices at the beginningof the year put a strain on MAHLE’s material costs. Persistently
high costs for freight, sharply rising prices in indirect purchasing—
especially in the area of energy—as well as increased reprocessing costs of raw materials also led to additional burdens. The overall situation was further exacerbated by existing and worsening
shortages in the semiconductor market and in the case of some
raw materials.
In order to counter the additional price demands from suppliers,
MAHLE has adapted and partially restructured the process for
dealing with these demands. Furthermore, we have launched various initiatives as part of a Group-wide program to reduce material
costs. In addition to a large-scale negotiation offensive, in close
cooperation with selected suppliers, the potential for reducing material costs through technical or process-related adjustments was
also increasingly identified, evaluated, and implemented. In addition, there is an increasing focus on reducing CO2-equivalentemissions. Even in this challenging environment, we were able tomaintain process reliability and the quality of the goods and services purchased. The continuous consolidation but also diversification of our supplier portfolio remains important.

Production

In order to best enable the manufacturing sites in their operational
processes, new, digital technologies are being used worldwide. An
Industrial Internet of Things platform is being piloted in individual
plants. This allows a range of digital use cases in production to bemapped—e.g. real-time visualization of machine states and energy monitoring down to machinery level. The focus here is primarilyon the consistent standardization of global production sites, alsowith regard to cyber security. This gives the new data-driven solutions a framework from a legal and security technology perspective. MAHLE combines the synergies of the lean and digitalization
activities for the factories under the motto of “Lean Digital Factory.”
An important component in the implementation of all activities isthe use of synergies across the entire Group. For this purpose, a
new communication platform was created that facilitates global
communication.

Quality management
Quality is the bedrock of our success. Innovative, fault-free, andreliable products and systems are essential for this. The core elements of our annual business plan are accordingly quality goals,
which we define in a top-down manner—and flesh out from thebottom up—and consolidate via the operational business areas. In
addition, a Group-wide quality management system has beenused in all our business processes for many years.
MAHLE RECEIVED MORE THAN

Our production continued to face many challenges in 2022 due toeconomic and geopolitical developments, as well as supply chain
disruptions. Some European locations in particular had to takeprompt action due to the Russian invasion of Ukraine, as well as
rising energy costs and raw material shortages. These served tolimit internal cost increases while ensuring multi-directional supply.
In addition, the focus was on increasing awareness when it comesto costs, as the transformation in the automotive industry and volatile markets also have a strong impact on our production. The key
is to continuously strengthen the operational excellence of production, in particular through the implementation of projects andcontinuous knowledge transfer and development in the area oflean management and digitalization.
The central strategic focus on operational excellence increasingly
relies on elements such as lean management and our unified pro-64

duction system. Based on the value streams, we evoke holistic
process improvements. A “MAHLE Production System (MPS)
Learning Factory” was established in Stuttgart to transfer knowledge to the organization in the most practical setting possible.
This includes training offers with live simulation in a production
area specially built for various target groups. Furthermore, thetraining of lean experts and trainers was intensified.

The company

Sustainability

80

QUALITY AWARDS IN 2022

We successfully continued the “MAHLE Quality Improvement Program” in 2022. The aim is to continuously improve the quality ofour products and services, reduce reject costs, and strengthen
quality awareness and the Group-wide application of agreed standards. Training for employees is also part of the program, as areprojects to coordinate activities, standardize procedures, and optimize our products and processes.
In this way, we want to further reduce risks and eliminate potential
sources of defects as early as the product development stage. We
reduce risks in series production through extensive quality assurance measures, such as regular audits.

Management report
Additional performance indicators

Consolidated financial statements

The broad scope of the “MAHLE Quality Improvement Program”
improves Group-wide communication and encourages regular dialogue between our teams. All results flow into our processes andoptimize them. In November 2022, MAHLE held an event as partof the global “World Quality Day,” where all our production sites
could exchange information about quality performance as well as
the current status, priorities, improvements, and successes in thearea of quality management.
Our customers provide the data on our quality performance in different formats. Through our standardized reporting, all locations
have access to this information—in a standardized form—in orderto promptly determine necessary corrective measures in the eventof deviations.
In 2022, customer complaints in the automotive sector decreasedby 7 percent compared with the previous year. We were able tokeep the number of defective parts delivered stable at a low levelin the year under review. In addition, our customers once again
acknowledged the quality of our products more than 80 times in
the 2022 business year.

Safety at work, the environmentand climate protection
MAHLE promotes sustainability in all areas of the Group. Special
attention is paid to safety at work, the environment, and climate
protection. MAHLE bears responsibility for the well-being andsafety of its employees. To minimize occupational risks, we implement technical, organizational, and personal protection measures.
The basis for this are regular risk assessments, from which we
continuously derive measures to improve occupational safety andtargets for safety at work. We check compliance with the objectives and implementation of the measures through regular audits
and observation walkarounds.

MAHLE locations certified according to ISO 45001. We are stillplanning to gradually certify all production sites in the coming years.

Our approach to the environment and climate protection ranges
from research and development to production and recycling of our
products. Existing products, consumables, processes, and machinery are continuously evaluated and improved to minimize theimpact on the environment. We also continue to work on introducing environmental management systems according to ISO 14001
and/or EMAS at our sites. At the end of 2022, 140 sites are certified according to at least one of these standards. In addition, 13
sites were certified according to the ISO 50001 energy management system.
In 2022, we worked on integrating climate-relevant aspects evenmore strongly into our core processes. Our CO2 emissions fromthe use of fossil fuels and the use of electricity decreased last year
mainly due to the increased purchase of less carbon-intensive
electricity by more than 12 percent compared with 2021. The largest share of our carbon footprint comes from the upstream emissions from the raw materials and services we purchase and fromthe use of our products (Scope 3 categories 1 and 11 according to
the GHG Protocol). We have accordingly also set ourselves targets
for the reduction of Scope 3 emissions in addition to the targets for
Scope 1 and 2, which have already been adopted in 2020. We
have submitted these science-based climate targets to the Science Based Targets Initiative (SBTi).
Our management approach to greenhouse gas was awarded a“B” (on a scale from A to D) by the CDP in December 2022. In
addition to the CO 2 roadmap, an important focus in 2022 was the
preparation for the implementation of the German Supply Chain
Due Diligence Act (Lieferkettensorgfaltspflichtengesetz) to ensurethat human rights and environmental protection principles areobserved throughout our sphere of influence.
Our sustainability activities have been awarded a "silver medal"by EcoVadis as of February 2022.

ACCIDENT RATE FELL BY

17 %The detailed results of our activities will be presented in the 2022
sustainability report.

IN COMPARISON WITH THE PREVIOUS YEAR

The accident rate indicates the number of accidents per million
hours worked that resulted in lost time or reassignment to lightduties. In the 2022 business year, it stood at 3.5, which equates toaround 17 percent less than in the previous year. Overall, we wereable to continue the positive trend of the last five years. Five years
ago, we were still recording 6.8 accidents per million hours worked,
in 2022, the figure was only about half as high. The introduction
and maintenance of a safety at work management system in accordance with ISO 45001 is an important pillar for improving workplace safety in our plants. In this regard, we were able to makefurther progress. Thus, at the end of 2022, there were already 103

The company

Sustainability

Management report
Additional performance indicators

Consolidated financial statements

65

Opportunity and risk report
By systematically considering market and technology
trends, we ensure that we
identify opportunities andrisks at an early stage.

New opportunities andrisks arise from the increasing awareness of themarkets in terms of ecological and sustainability
aspects, as well as fromnew standards for the
reduction of emissions.

We assess opportunities and risks from our business operations
with the help of a management system. In this way, we gain insights from which we draw conclusions and adjust our actions
accordingly. Our Group-wide Internal Audit department regularly
checks the compliance and efficiency of our processes and control systems using annually revised audit plans.

Corporate Audit

SCHEMATIC DIAGRAM OF RISKMANAGEMENT AT MAHLE

Supervisory Board
Management Board

Risk Management Committee (RMC )Risk experts
for identificationand evaluation

Corporaterisk
management

Risk owners
for risk
control

Focal points of risk can change due to the transformation of theautomotive industry and the effects of the general geopolitical situation as well as the Covid-19 crisis, which can be seen, for example, in a shortage of semiconductors or sharp cost increases. To
manage this, we have implemented a systematic risk management
process with the following focal points.

66

The company

Sustainability

To continue to minimize
operational risks, we havestrengthened various initiatives such as systematicallyupgrading our cyber security.

Market and technology trends
We identify long-term market and technology trends in a systematic scenario-based approach. The starting point is a base scenario that also includes the developments of our business units, regions, products, and markets up to 2035. Based on this, we
subject our company to a stress test in various dimensions withthe “Extreme Scenarios 2035,” for example for markets, regions,drive types, numbers built, and technologies. By systematicallyconsidering market and technology trends, we ensure that we
identify opportunities and risks at an early stage. Findings fromthese analyses are incorporated into decisions about future business areas and new production processes. We map the measuresderived from this in the strategic and budget planning. In thecourse of management reporting, we monitor whether and how
the steps adopted are implemented.
Opportunities and risks arise, for example, from the increasingawareness of the markets for environmental and sustainable aspects, as well as from new standards for the reduction of emissions. That is why we incorporate all relevant topics into our international research and development activities at an early stage andrely on a wide range of technologies to increase the efficiency of all
powertrain solutions, as well as a holistic, intelligent thermal management system. This enables us to offer our customers competitive and innovative products. Due to our steadily growing portfolioof electric traction drives, power electronics and auxiliary units, aswell as other products in the electric powertrain, we are benefitingfrom the expanding market of electrified motor vehicles. We havestrengthened these activities in a targeted manner through several
acquisitions, which have since been integrated into our Group.
With the help of acquisitions, we have also significantly expanded
our thermal management business in recent years and added air
conditioning compressors to our product portfolio, as well as

Management report
Opportunity and risk report

Consolidated financial statements

strengthening our regional footprint in Asia. MAHLE thus has thenecessary resources and expertise to develop components for thegrowing market of hybrid and electric vehicles.
Geopolitical tensions or even war-like conflicts such as the Russian invasion of Ukraine, interruptions in the logistics chain fromraw materials to finished components, economic fluctuations oreven economic slumps, changes in the political framework conditions in individual regions or countries, trade difficulties, other developments affecting the global economy and the increasing number of competitors, especially from Asia, can have a strong impact
on market developments and accordingly also on the businessdevelopment of our company. In this vein, we always keep an eye
on developments in this context. In general, our diversified positioning and global presence serve as important stabilizing factors
and help us to deal with market and customer risks. Our highly
diversified customer and product portfolio also contributes to this.
This ensures at least partial compensation for possible declines indemand in individual markets or from individual customers. Accordingly, we consider a global market slump like the one in theeconomic crisis of 2009, which could lead to a strong impact on
our profit, to be one of the greatest risks for our Group. This also
includes largely unforeseeable events such as the Covid-19 pandemic and its consequences, for example the global shortage ofsemiconductors, or major geopolitical events such as the Russian
invasion of Ukraine and consequent sharp price increases, energy
shortages, and cuts in the availability of raw materials. With appropriate early warning systems and action plans in place, we limit theconsequences of such to the best of our ability. The plans anddiscussions about an end to the combustion engine and further
general driving bans are major sources of uncertainty for the entire
automotive industry, especially in Europe, the USA, and China. Wetake appropriate measures in an effort to mitigate any economic
effects of a technology shift at an early stage. These could also
result from possible changes in the legal situation, such as certain
countries placing a ban on internal combustion engines in passenger cars from a certain point in time. To prepare for such futurescenarios, we look to our strategy of actively supporting the shift
toward more sustainable mobility in the areas of electrification andthermal management, as well as components for clean combustion engines. We want to continuously increase the share of sales
that is independent of the combustion engine.

Procurement and production
The focus of our risk management is to jointly maintain the global
supply of purchased parts and minimize negative impacts fromprocurement markets. Regular supplier assessments to identify
risks are the basic prerequisite for this. We have stepped up these
activities in recent years and are continuously making them more
professional. We take care to ensure that our suppliers stay independent. In addition, we use a risk monitoring tool worldwide thatprovides a quick overview of (natural) disasters, strikes, and insolvencies, in particular. This increases transparency and thus reduces risk in the supply chain. Specific emerging risks that could lead

The company

Sustainability

Management report
Opportunity and risk report

to bottlenecks in the supply of purchased parts and thus to production interruptions—such as the Covid-19 pandemic since2020, the supply difficulties with semiconductors and plastic granulates since 2021, the Russian invasion of Ukraine since February
2022 and the resulting energy crisis in Europe—are reported to the
Supply Risk Committee and managed by focus/task force teams.
The Supply Risk Committee is led by the Central Purchasing management and consists of members from a number of different departments across the company, including Sales, Logistics, Production, Development, Controlling, and Quality in order to achieve
the best possible limitation of risk. The optimization of processes
in the factories was again a constant focus with regard to quality
and safety standards, in the year under review. In order to continue
to minimize operational risks, we have strengthened a number of
initiatives that should, above all, enable our production facilities to
respond to current fluctuations in the market and events in theworld of politics and the economy. This includes, in particular, thesystematic and standardized upgrading of our cyber security in theoperational areas to secure unrestricted production and the addition of further digital elements to complement that production. The
further establishment and realignment of specific task forces, witha strong focus on energy supply security at this time, also make anessential contribution to risk assessment and the adaptation of
measures for the production sites. The risk posed by the energy
crisis had a strong impact on the way we work and required crossplant and cross-functional action to prevent major shortages.
The committees’ cooperation with members from different departments, for example from Logistics, Purchasing, and Production,
was successfully continued. This ensures Group-wide transparency at all times and—in the case of unplanned incidents—determines the urgency of action required in order to safeguard the production processes and value chains of the factories in the best
possible way at all times.
Our Group is audited and certified according to recognized ISO
standards and similar requirements in our sector, for example withregard to quality, environmental protection, and safety at work.
Our company is thus subject to important external controls to limit risk. We have obtained cover for business interruptions resulting
from damages as well as liability risks to an economically reasonable extent through insurance policies.
To prevent quality issues and warranty claims and similar risks, wehave defined cross-functional countermeasures. For example, ourdevelopment processes are constantly put to the test and optimized, also with the aim of limiting the risks that could arise fromfurther increasing demands from our customers to take over enhanced scopes in terms of warranty or additional costs due to delayed series launches. Development processes are also being optimized to minimize risks in view of the increased product safety
requirements. To the extent required by law, financial burdens
caused and revealed as of the balance sheet date from quality issues and warranty claims, which are likely to result in cash outflows after the balance sheet date, are covered by provisions within the scope of risk provisioning.

Consolidated financial statements

67

Financial management
With our systematic Group-wide financial management, we ensurethat we make optimal use of the financing options available on thebanking and capital markets. Liquidity risk is covered by diversified financing facilities with staged maturity profiles that significantly exceed our Group’s foreseeable financing requirements.
When designing our financing mix, we take into account security,
flexibility, and cost aspects. The aim is to secure the financial independence of our Group, limit financing risks, and ensure that we
can take advantage of business opportunities at any time. We
identify currency risks with our Group-wide planning and reporting
system. In accordance with uniform Group-wide principles, wecounteract these risks to a large extent and use non-predictive
hedging transactions over a horizon of up to 24 months for thispurpose. As a rule, hedging transactions relate to OTC FX forwards or swaps in the form of portfolio hedges. The use of derivative financial instruments is necessarily linked to the existence ofan operational underlying transaction. Expected and not yet invoiced currency risks are covered with continuously declining
hedging grades. The resulting hedging relationship generates valuation units under the critical term match method. The interest raterisk is subject to value-at-risk analyses. OTC hedging transactions
and other financial transactions give rise to counterparty risks withfinancial institutions, which we identify and assess uniform Groupwide reporting system. If defined limits are exceeded, the counterparty risk is reduced through targeted risk diversification.

Human resources, IT,
and accounting
Today and in the future, employee engagement is a cornerstone of
our success. Highly qualified and motivated employees are of central importance to us. That is why it is important to us to recruitsuitable staff and to continuously support, develop, and retain employees in our company in the long term. In order to be able toestablish direct contact with potential applicants at an early stage
and recruit qualified employees, we have developed a comprehensive personnel marketing concept and established a recruiting organization. In this way, we reduce the risk of vacancies not being
filled, or taking a long time to be filled. In order to secure the futureof our Group in the long term and to be able to take advantage ofopportunities arising from changes in the market and technology,
we align our human resources planning with developments in relevant markets as well as strategically important technologies andbusiness areas. Performance-based remuneration and modern
pension schemes as well as training and development measures
aim to motivate and retain employees in strategically important
positions. In the IT area of responsibility, specifications, processes
and security technologies protect against unauthorized data access or misuse by internal and external perpetrators. Defined security standards include not only technical specifications of hardware and software, but also functional security structures andorganizational precautions. The IT systems classified as critical for
operations are operated largely redundantly and are also secured

68

The company

Sustainability

via a back-up data center. Detailed back-up and recovery procedures reduce the risk of serious disruptions in particular by securing access procedures and mirroring and archiving data on a daily
basis. These measures are for the protection against cyberattacks,
which are now seen as one of the biggest risks due to known incidents in the industry. In the accounting process, the internal control and risk management system aims to ensure the complianceand effectiveness of accounting and financial reporting. In addition
to guidelines and principles, the system includes measures designed to prevent or detect reporting errors. The consolidated financial statements are prepared centrally on the basis of the datareported by the subsidiaries. We ensure compliance with the
MAHLE guidelines through systemic controls, specialist advice,audit routines, and plausibility checks of the data performed byGroup Accounting as well as through management reviews.

Regulations and legislation
Guidelines as well as organizational and work instructions ensurecompliance with statutory requirements. By involving internal andexternal experts in the processes at an early stage, we minimizerisks and take advantage of opportunities that could arise, for example, from tax, labor, competition, patent, antitrust, data protection and environmental regulations and laws, as well as trade regulations. Key elements of our compliance structure are the MAHLE
Business Code, our global compliance organization, the whistle­
blowing system for internal and external compliance-related communications, and the training concept for the relevant risk areas
and measures for prevention.

Overall assessment
Overall, no risks are currently observable that could endanger thecontinued existence of our Group, provided that development-impairing risks or extreme global crises, such as the coronavirus
pandemic, do not occur multiples times in quick succession.

Management report
Opportunity and risk report

Consolidated financial statements

Outlook
In the vehicle market forpassenger cars and lightcommercial vehicles, we
expect subdued development,
meaning that the level ofvehicle production from 2019is still likely to not be
achieved in many regions.

For MAHLE, we expect asignificant improvement insales, EBIT, and operating
result.

In order to meet thenumerous challenges, wewill intensify the measures
enacted to improve theliquidity and earnings situation in the coming businessyear.

Overall economic development
For 2023, the IMF forecasts in its January report that global economic output will grow by around 3 percent. This forecast is subject to great uncertainty and depends largely on the further development of the Russian invasion of Ukraine, inflation, and theaccompanying tightening of monetary conditions. The IMF predicts that growth in emerging markets and developing markets will
be significantly higher at around 4 percent in 2023 than in the advanced economies at around 1 percent.

3%

GLOBAL ECONOMIC GROWTH IN 2023

For the eurozone, the IMF expects a rise of less than 1 percent,impaired in particular by the effects of the Russian invasion of
Ukraine. In contrast, falling inflation expectations are favoring economic output in the eurozone. Germany’s economic output is predicted to remain at the previous year’s level. In North America,
growth is expected to be around 1 percent in the USA. In thiscontext, economy is suffering primarily from decreased demand.
In Brazil, the largest economy in South America, the economy isalso expected to grow by around 1 percent. For the Chinese economy, the IMF forecasts growth of over 5 percent and thus growth
above the previous year, in particular due to the renunciation of the

Sustainability

Development of the vehicle­markets
Development of the markets for passenger
cars and light commercial vehicles

IMF FORECAST AROUND

The company

zero-tolerance policy with regard to the Covid-19 pandemic. The
Japanese economy is expected to grow by around 2 percent, roughly the same level as in the previous two years.

Management report
Outlook

We expect global production of passenger cars and light commercial vehicles to be subdued in 2023. The market continues to beburdened by several elements of uncertainty. At present, it is difficult to predict how long the Russian invasion of Ukraine and theassociated indirect effects on vehicle production will last. In addition to geopolitical tensions and the intensification of the recession
risk, persistent supply bottlenecks for semiconductors, other raw
materials and intermediate products play an important role, as
these could lead to significant production losses. In addition, there
are massive price increases that could further reduce purchasing
power.
In North America, the pre-crisis level will probably not be reachedagain for several years. In Europe, we do not expect vehicle production to reach pre-crisis levels for many years. In addition, theRussian invasion of Ukraine and the expected weak economic development cloud the outlook considerably. In South America, which

Consolidated financial statements

69

DEVELOPMENT OF THE MARKETS—FORECAST FOR 2023
EuropeOverall economy*
Passenger cars and lightcommercial vehicles
Medium-sizedand heavy-duty
commercial vehicles

North America
Overall economy*
Passenger cars and lightcommercial vehicles
Medium-sizedand heavy-duty
commercial vehicles

Asia/PacificOverall economy*
Passenger cars and lightcommercial vehicles
Medium-sizedand heavy-duty
commercial vehicles

South America
Overall economy*
Passenger cars and lightcommercial vehicles
Medium-sizedand heavy-duty
commercial vehicles

The directional arrows show the change compared with the previous year:≥5%, 1.5% to 5%, −1.5% to 1.5%, −1.5% to −5%, ≤−5%
* IMF forecast from January 2023

is less affected by the supply bottlenecks in the passenger car
market, the trend toward a recovery should initially continue. The
same applies to the Asia/Pacific region: moderate growth is forecast in some Asian submarkets. In China, however, production
figures are expected to decline due to subdued economic development and the effects of the expiring tax reduction, among otherfactors. Moreover, the development of the Covid-19 pandemic
there is difficult to predict.

Development of the markets for medium-sizedand heavy-duty commercial vehicles

70

Management report

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Sustainability

In the medium-sized and heavy commercial vehicle segment, we
expect growth in 2023. In particular, the regional recovery trends
in most parts of Asia are contributing to this. We expect the strongest upward trend in China, after the cyclical trough was probably
reached in 2022. In Europe and North America, we currently expect only slight growth. The ongoing war in Ukraine, high priceincreases for goods, raw materials and goods transport, more difficult financing conditions as well as the subdued economic forecasts lead to great uncertainties and could significantly dampen
growth expectations and have a negative impact on the vehicle
markets.

OutlookConsolidated financial statements

Development of the
MAHLE group
For the 2023 business year, we expect the market environment toremain challenging. The resulting effects on global economic dynamics and especially on the automotive markets are difficult toassess. Provided the situation does not deteriorate economicallyor geopolitically, we nevertheless forecast strong organic sales
growth for 2023. We expect a significant improvement in EBIT as
well as in operating result.
Despite the economic burden, we continue to focus on the technological transformation and our strategic goals. We will press
ahead with our future topics with great intensity and focus our attention in the short and medium term on positioning our company
sustainably and successfully for the future. At the same time, we
are focusing on securing and expanding our competitiveness interms of both product portfolio and processes. To this end, we are
driving forward the structural reorganization of the Group globally,
consistently continuing the reviews of our worldwide locations andproduct portfolio, and strengthening our Group-wide cost discipline through targeted programs. We assume that further significant efforts will be required to manage the technological andstructural transformation. In response to the transformation in mobility and the resulting shift away from the combustion engine, as
well as increasing competitive pressure, we have already announced the discontinuation of production activities at the Mattighofen/Austria site and the gradual relocation of selected productgroups to Eastern Europe. In addition, we have announced theclosure of the Oyama/Japan site and the complete relocation of
production activities to Thailand.

FOCUS FOR

2023

Another focus is on meeting the global challenges in the area ofclimate protection and protection of the environment. We counter
these in particular with our openness to technology. This is reflected concretely in our business activities, such as the developmentof products that support the transition to CO2-efficient drives. In
order to further reduce our carbon footprint, we rely primarily on
renewable energies generated in-house and lower energy consumption by increasing energy efficiency. The largest share of ourcarbon footprint comes from the upstream emissions from the raw
materials and services we purchase and from the use of our products (Scope 3 categories 1 and 11 according to the GHG Protocol). We have accordingly also set ourselves targets for the reduction of Scope 3 emissions in addition to the targets for Scope 1
and 2, which have already been adopted in 2020. In line with ourtargets, we aim to reduce Scope 1 and 2 emissions by 49% fromtheir 2019 level by 2030 and to be CO2-neutral by 2040. Scope 3
emissions in the supply chain and from product use are each to be
reduced by 28% from their 2019 levels by 2030.
We see economic success as the foundation for the implementation of our future strategies. It allows us to invest in research anddevelopment, establish new business areas, and make acquisitions to complement out our portfolio. In order to maintain andexpand a strong base, we strive for sales growth with clear priority
on sustainable profitability. Our financial independence and resilience to potential crises are always a priority for us. Accordingly,
we pay attention to a healthy balance sheet structure and a moderate net debt ratio. The supporting pillars of our financial policy
are therefore a solid equity base and long-term secured liquidity
based on a stable operating cash flow and diversified instruments
and sources of financing.
This report contains forward-looking statements that are based on
current estimates of future developments and are accordingly subject to risks and uncertainties that are beyond our control and cannot be assessed precisely. This may cause actual results to differ
from the statements made here.

PRESS AHEAD WITH FUTURE TOPICS

At the same time, we are preparing for further burdens. In order tomeet the many challenges posed by the changed economic conditions, especially rising energy prices and wage costs, a proportional distribution of additional costs across the value chain will
also be unavoidable in the coming business year. Furthermore, wewill intensify the additional measures initiated to improve the earnings and liquidity situation.
We are preparing our internal processes for the future and working
consistently on new ideas. For example, we are making MAHLE
resilient to the serious threat of cyberattacks by introducing comprehensive security concepts. In addition, we are actively driving
forward the digital transformation in order to contribute to processoptimization and standardization through an even broader range
of applications.

The company

Sustainability

Management report
OutlookConsolidated financial statements

71Consolidated
Konzernabschluss
financial statements

Consolidate
financial sta
72

The company

Sustainability

Management report

Consolidated financial statements

Consolidated balance sheet

74

Consolidated income statement

77

Consolidated cash flow statement

78

Consolidated statementof changes in equity

80

Notes to the consolidated ­financial statements

82

General information

82

Consolidation group

82

Exemption provisions for ­domestic companies

82

Method of consolidation

82

Accounting and valuation p­ rinciples

83

Currency conversion

84

Notes to the consolidated ­balance sheet

85

Notes to the consolidated ­income statement

87

Other notes

88

Consolidated statement of fixed assets

92

Shareholdings

94

edatements
The company

Sustainability

Management report

Auditor’s report

100

Consolidated financial statements

73

Consolidated balance sheet
As at December 31, 2022, in EUR ’000
Dec. 31, 2022

Dec. 31, 2021

1. Purchased concessions, industrial and similar rights and assets, as well as licences in such rights and assets

151,858

166,548

2. Goodwill

166,385

196,934ASSETS
A. Fixed assets
I. Intangible assets

3. Prepayments

562

706

318,805

364,188

II . Property, plant, and equipment

1. Land, leasehold rights, and buildings including buildings on third-party land

972,343

942,177

1,403,764

1,473,926

3. Other equipment, fixtures, and furniture

143,712

154,436

4. Prepayments and assets under construction

477,824

437,368

2,997,643

3,007,907

2. Technical equipment and machinery

III. Financial assets

1. Shares in affiliated companies

1,323

2,934

2. Shares in associated companies

25,517

41,682

3. Equity investments

15,8445,800

4. Loans to companies in which participations are held

90

90

5. Long-term securities

13,105

16,409

6. Other loans

10,86812,31066,747

79,225

3,383,195

3,451,320

1. Raw materials, consumables, and supplies

699,020622,976

2. Work in process

197,137

190,789

3. Finished goods and merchandise

689,797

657,173

4. Prepayments

14,373

14,200−115,428−102,554

1,484,899

1,382,584

1,957,390

1,869,953

9,054

1,094

B. Current assets
I. Inventories

5. Prepayments received
II . Receivables and other assets

1. Trade receivables
2. Receivables from affiliated companies
3. Receivables from companies in which investments are held
4. Other assets
III. Securities
IV. Cash in hand, bank balances, and checks

757

988

612,609449,545

2,579,810

2,321,580

17,104

4,502

603,545

1,109,722

4,685,358

4,818,388

C. Prepaid expenses

29,83034,173

D. Deferred tax assets

210,896

184,681

E. Excess of plan assets over post-employment benefit liability

74

The company

Sustainability

Management report

12,317

99,5408,321,596

8,588,102

Consolidated financial statements
Consolidated balance sheet

Dec. 31, 2022

Dec. 31, 2021

I. Subscribed capital

150,000

150,000

II. Capital reserves

166,430

166,430

III. Retained earnings

1,493,586

1,718,523

IV. Equity impact from currency translation−161,164−180,781

5,177

6,070

EQUITY AND LIABILITIES
A. Equity

V. Consolidated unappropriated retained earnings
VI. Non-controlling interests

23,395

189,722

1,677,424

2,049,964

63,380103,411

1. Provisions for pensions and similar obligations

843,646

800,832

2. Provisions for taxes

78,80287,6591,582,014

1,707,955

2,504,462

2,596,446

780,000

1,280,000

1,501,772

885,705

B. Badwill
C. Provisions

3. Other provisions
D. Liabilities
1. Bonds
2. Liabilities to banks
3. Payments received on account of orders

10,395

10,5881,369,198

1,258,184

5. Liabilities on bills accepted and drawn

58,97364,535

6. Liabilities to affiliated companies

1,163

772

7. Liabilities to companies in which investments are held

2,641

2,372

299,455

289,371

4,023,597

3,791,527

4. Trade payables

8. Other liabilities
thereof from taxes: 107,308 (prev. yr.: 82,802)
thereof relating to social security and similar obligations: 33,435 (prev. yr.: 36,615)
D. Deferred income

The company

Sustainability

Management report

Consolidated financial statements
Consolidated balance sheet

52,73346,7548,321,596

8,588,10275

76

The company

Sustainability

Management report

Consolidated financial statements

Consolidated income statement
From January 1 to December 31, 2022, in EUR ’000
2022

2021

1. Sales12,433,824

10,933,096

2. Cost of sales−10,653,099−9,255,9783. Gross profit on sales

1,780,725

1,677,118

4. Selling expenses−628,722−560,386

5. General administrative expenses−572,532−503,198

6. Research and development expenses−671,308−665,560

7. Other operating income

601,543

549,148−430,914−291,096−1,701,933−1,471,092

78,792206,026

728

87

thereof from currency translation: 242,796 (prev. yr.: 165,418)
8. Other operating expenses
thereof from currency translation: –261,337 (prev. yr.: –159,451)

9. Investment income
thereof from affiliated companies: 617 (prev. yr.: 8)
10. Income from other securities and long-term loans

1020

11. Result from associated companies

1,301

976

12. Other interest and similar income

24,714

17,115

thereof from affiliated companies: 178 (prev. yr.: 67)
thereof income from discounting: 118 (prev. yr.: 3)
thereof negative interest income: 447 (prev. yr.: 1,157)
13. Impairment of financial assets and of securities
14. Interest and similar expenses−3,292−18,711−267,711−147,566−244,250−148,079

thereof to affiliated companies: –29 (prev. yr.: –14)
thereof expenses from discounting: –30,890 (prev. yr.: –55,800)
Result from business activities−165,458

57,947−134,558−138,712

16. Result after taxes−300,016−80,765

17. Other taxes−32,289−27,356

18. Consolidated net loss

−332,305−108,121

15. Taxes on income
thereof income from deferred income taxes: 29,614 (prev. yr.: 25,323 expense)

19. Consolidated unappropriated retained earnings prior year

6,070

3,439

20. Dividend distribution−6,000−3,30021. Withdrawal from retained earnings

223,469

93,252

22. Profit applicable to non-controlling interests−84,605−80,450

23. Loss applicable to non-controlling interests

198,548

101,250

5,177

6,070

24. Consolidated unappropriated retained earnings

The company

Sustainability

Management report

Consolidated financial statements
Consolidated income statement77Consolidated cash flow statement
From January 1 to December 31, 2022, in EUR ’000
2022
1.

Cash flows from operating activities
Profit for the period (consolidated net loss including profit and loss applicable to non-controlling interests)–332,305+/– Depreciation, amortization, and write-downs of fixed assets/reversals of write-downs of fixed assets

612,895+/– Increase/decrease in provisions–10,597+/– Other non-cash expenses/income

6,890–/+ Increase/decrease in inventories, trade receivables, and other assets not related to investing or financing activities–301,516+/– Increase/decrease in trade payables and other liabilities not related to investing or financing activities

133,980–/+ Gain/loss on disposal of fixed assets–5,904+/– Interest expense/interest income

225,899––2,029Other investment income–60,814+/– Expenditure/Income of exceptional size and incidence+/– Interest payments/receipts related to interest other than for the provision of capital

1,700+/– Income tax expense/income

164,172––147,389

Cash payments relating to expenditure of exceptional size and incidence–/+ Income taxes paid

–182,343
102,639

2.

Cash flows from investing activities+

Proceeds from disposal of intangible fixed assets−

Payments to acquire intangible fixed assets+

Proceeds from disposal of tangible fixed assets−

Payments to acquire tangible fixed assets+

Proceeds from disposal of long-term financial assets

9,874

−

Payments to acquire long-term financial assets−1,642+

Proceeds from disposals of entities included in the basis of consolidation−

Payments to acquire entities included in the basis of consolidation+

Cash receipts from the investment of cash funds for short-term cash management

52,583−

Cash payments for the investment of cash funds for short-term cash management−51,814+

Interest received

16,734+

Dividends received

559−12,874
14,568−460,849

1−49,5824,416−478,026

78

The company

Sustainability

Management report

Consolidated financial statements
Consolidated cash flow statement

2022
3.

Cash flows from financing activities+

Proceeds from the issuance of bonds and from borrowings

471,588–

Cash repayments of bonds and borrowings–691,955+

Proceeds from grants / subsidies received

3,961

–

Interest payment due to leasing agreements–22–Interest paid–

Dividends paid to shareholders of the parent entity–6,000–

Dividends paid to minority shareholders–42,732

4.

Cash funds at end of period–96,030–361,190–736,577

Net change in cash funds (subtotals 1–3)+/– Effect on cash funds of exchange rate movements and remeasurements–61,456+/– Effect on cash funds of changes in the basis of consolidation+

402

Cash funds at beginning of period

1,041,051
243,420

Cash-in-hand, bank balances, and checks

1,109,722–

Bank balances with an initial term of more than 3 months+

Liabilities to banks with an initial term of less than 3 months–21,410–47,261

Cash funds at beginning of period

1,041,051

thereof from proportionately consolidated entities

39,442

Cash-in-hand, bank balances, and checks

603,545–

Bank balances with an initial term of more than 3 months–9,973+Liabilities to banks with an initial term of less than 3 months–350,152

Cash funds at end of period

243,420

thereof from proportionately consolidated entities

56,645The short-term liabilities which were netted against cash balances
contained EUR 313,624k (previous year: EUR 20,692k) that wererelated to short-term liabilities based on a committed credit linewith a remaining tenor of more than one year.

Cash funds amounting to EUR 5,620k that are restricted on disposal are included.

The company

Consolidated financial statements

Sustainability

Management report

Consolidated cash flow statement79Consolidated statementof changes in equity
From January 1 to December 31, 2022, in EUR ’000
PARENT COMPANY

As at December 31, 2020

Subscribed capital

Capital reserves

Retained earnings
1,811,451

150,000

166,430

Capital increase

0

0

0

Withdrawal from retained earnings

00–93,252

Dividend distribution

0

0

0

Currency translation

0

0

0

Other items

0

0

11

Changes in the consolidation group

0

0

313

Consolidated net loss

0

0

0

As at December 31, 2021

1,718,523

150,000

166,430

Capital increase

0

0

0

Withdrawal from retained earnings

00–223,469

Dividend distribution

0

0

0

Currency translation

0

0

0

Other items

0

0

–378
–1,090Changes in the consolidation group00

Consolidated net loss

0

0

0

As at December 31, 2022

150,000

166,430

1,493,586

1

Including effects from hyperinflation adjustments for the countries Argentina and Türkiye in accordance with GAS 25

80

The company

Sustainability

Management report

Consolidated financial statements
Consolidated statement of changes in equity

Equity impact from
Consolidated unapprocurrency translation1 priated retained earnings

The company

Total

Non-controllinginterests1

Consolidated
equity–278,837

3,439

1,852,483

236,1882,088,671

0

0

0

1,560

1,560

0

93,2520000–3,300–3,300–16,657–19,957

98,227

098,227

8,360

106,587–18,955

142

0

153

–19,108

–313

0

0

179

179

0

–87,321–87,321–20,800–108,121–180,781

6,070

1,860,242

189,7222,049,964

0

0

0

40

40

0

223,469

0

0

0

0

–6,000–6,000–46,103–52,103

18,0310

18,031

3,145

21,176

496

0

118

–9,466–9,348

1,090

0

0

0

0

0

–218,362–218,362–113,943–332,305–161,164

5,177

1,654,029

23,395

1,677,424

Sustainability

Management report

Consolidated financial statements
Consolidated statement of changes in equity

81Notes to the consolidated­financial statements
General information
The present consolidated financial statements of MAHLE GmbHare prepared in accordance with Section 290 et seq. of the German
Commercial Code (HGB).

Consolidation group
The consolidated financial statements include MAHLE GmbH (parent company), headquartered in Stuttgart/Germany and registeredwith the district court in Stuttgart (commercial register number638), as well as 22 domestic and 127 foreign subsidiaries. Furthermore, 13 companies were consolidated proportionately according
to the percentage of shares, and six companies were valued according to the equity method. The consolidated companies areincluded in the list of shareholdings.
The following company was fully consolidated for the first time
during 2022:— MAHLE Shared Services d.o.o. Beograd, Serbia, as of January 1
Two companies were merged in the reporting year.
One fully consolidated company was liquidated in the businessyear 2022.
In the business year, ten companies were excluded from the consolidated financial statements due to immateriality. Two companies were not valued according to the equity method due to theirimmateriality.

Key changes to the consolidation group
During 2022, no significant changes occurred within the consolidation group.

Exemption provisions for­domestic companies
The following subsidiaries are applying the exemption according
to Section 264, paragraph 3, respectively Section 264b HGB, withregard to the disclosure of their annual financial statements and/or
the preparation of the management reports:

82

The company

Sustainability

MAHLE Aftermarket GmbH, Stuttgart; MAHLE Aftermarket
Deutschland GmbH, Schorndorf; MAHLE Beteiligungen GmbH,
Stuttgart; MAHLE Blechtechnologie GmbH, Stuttgart; MAHLE Filtersysteme GmbH, Stuttgart; MAHLE Immobilien GmbH, Stuttgart; MAHLE Industrial Thermal Systems GmbH & Co. KG, Kornwestheim; MAHLE Industriebeteiligungen GmbH, Stuttgart;
MAHLE Industriemotoren-Komponenten GmbH, Stuttgart; MAHLE
International GmbH, Stuttgart; MAHLE Kleinmotoren-Komponenten GmbH & Co. KG, Stuttgart; MAHLE New Mobility Solutions
GmbH, Kornwestheim; MAHLE Powertrain GmbH, Stuttgart;
MAHLE Ventiltrieb GmbH, Stuttgart; MAHLE Versicherungsvermittlung GmbH, Stuttgart.

Method of consolidation
Consolidated subsidiaries, using the book value method prior to
December 31, 2009, will continue to be consolidated under thesame method as in prior years. Thereby, the value of the investment held by the parent company, at the time of acquisition andfirst consolidation, is to be offset against the attributable share of
the subsidiary’s equity book value. In the case of companies thatwere consolidated for the first time from 2010 onward, the assets,
liabilities, prepaid expenses, and deferred income acquired wererevalued at fair value as part of the purchase price allocation at thetime that the company became a subsidiary.
As at the balance sheet date, total goodwill of EUR 166,385k isdisclosed, which contains goodwill of EUR 16,415k that occurredin the financial statements of the entities included in the consolidation group. Goodwill is amortized over ten years due to the relevantmarkets that are dominated by a small number of suppliers andhave high barriers to market entry. These markets have shown thatthe average useful life of acquired goodwill is historically ten years.
Additionally, the recoverability of goodwill is tested (impairment
test) at least once a year to determine if an impairment exists according to GAS 23.129, sentence 1. Thereby, the amount of thewrite-down is determined by comparing the fair value of the investment in the subsidiary with the total of the carrying amount of the
net assets held by the subsidiary in the consolidated financial
statements and the net carrying amount of goodwill. In 2022, no
goodwill impairments were necessary. As at the balance sheet datea carrying amount of badwill of EUR 63,380k is disclosed for the air
conditioning business from former Keihin Corporation (now Hitachi
Astemo, Ltd.) acquired in 2021. On the one hand, this badwill arosefrom losses expected to be incurred in subsequent business years.

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

The badwill will be released to income in line with the losses incurred in subsequent business years. Another portion of badwill
was attributable to a favorable bargain purchase and will be released to income over the weighted average remaining useful life of
the identified fixed assets. In 2022, an amount of EUR 40,031k was
released.
In addition, MAHLE Beteiligungen GmbH increased its shareholding in MAHLE Behr GmbH & Co. KG from 70.71 to 75.71 percent
and its shareholding in MAHLE Behr Verwaltung GmbH from 70.71
to 75.71 percent as at January 1, 2022, through the acquisition ofshares from non-controlling shareholders. This resulted in goodwillof EUR 17,846k.
Thereby, the increase in shares in subsidiaries without affecting
their status as subsidiaries was recognized as acquisition.
The result from the change in the equity value was disclosed in the
consolidated income statement after deduction of income taxes.
The intra-group supply of goods and services as well as mutual
receivables and liabilities were offset, and intercompany profits
and losses were eliminated.
Deferred taxes resulting from consolidation measures with effecton income were recorded using a tax rate of 22 percent.

Accounting and valuation­principles
The existing accounting and valuation methods were retained.
Acquired intangible assets and property, plant, and equipment arevalued at acquisition costs or manufacturing costs minus depreciation or amortization. Depreciation was performed on a straightline basis using standard useful lives. If lower valuations were provided, impairments were recorded. Internally developed trademarks
and similar rights and assets were not capitalized. Furthermore, theintangible assets contain hidden reserves disclosed as part of thepurchase price allocation of the acquisitions. These comprisetrademark rights, non-compete clauses, customer relationships,
technological licenses, and development services. Depending on
the categories, the useful lives for intangible assets were based on
three to ten years.

The company

Sustainability

Management report

Financial assets were stated at the lower of acquisition cost or fairvalue if the impairment is expected to be permanent.
Inventories are capitalized at acquisition cost or manufacturingcost. Unfinished and finished goods are valued by considering theappropriate share of material, production overhead, and depreciation of fixed assets. If the market prices or fair values were lower
than the book values, or marketability was limited, devaluations
were performed as necessary.
Receivables and other assets are recorded at nominal values. Appropriate write-downs are recorded to account for receivables
with recognizable risks of nonpayment; a general valuation allowance is set up to cover the general credit risk.
Prepaid expenses were recorded for payments made before thebalance sheet date for expenditures related to a specific time period after this date.
Provisions for taxes and other provisions are to adequately cover
uncertain liabilities and anticipated losses from pending transactions. The valuation is based on the settlement amount taking into
account necessary cost increases. Provisions with a remaining
term of more than one year were discounted by using the average
market interest rate of the past seven fiscal years provided by theGerman Central Bank. If appropriate, an average local market interest rate of the past seven years was determined for the remaining term in order to depict the actual economic situation for the
discounting of obligations in foreign currency.
Provisions for pensions and similar obligations are calculatedgroup-wide in accordance with actuarial principles (using the projected unit credit method) and discounted with the average rate of
ten years in accordance with Section 253 HGB to present value. In
2022, the calculation was based on the following discount rates:
domestic 1.07 to 1.92 percent, foreign 0.51 to 4.09 percent. The
option to assume a standardized remaining term of 15 years was
not utilized. Expected salary increases of 1.79 to 5.40 percent, anticipated labor turnover rates of 3.00 to 6.96 percent and for domestic companies a pension trend of 1.50 percent were taken into
consideration. The mortality tables recognized in each country
were used as a basis for the calculation.
Assets that serve exclusively to settle pension-related obligations
and cannot be utilized to settle claims of any other creditors (planConsolidated financial statements
Notes to the consolidated fi­ nancial statements

83

assets in the form of long-term securities) were offset against theprovisions at their fair value. Excess amounts are recorded within
the item “Excess of plan assets over post-employment benefit
liability.”
Liabilities are stated at their settlement amount.
Receivables, bank balances, and liabilities in foreign currency witha remaining term of less than one year were valued using the mid
spot rate applicable at the balance sheet date. If the remaining
term was more than one year, the valuation was based on the exchange rate applicable at the acquisition date or the lower or higher exchange rate at the balance sheet date.
Changes in exchange rates, commodity price variations, and interest rates represent a risk to operational business that is very difficult to estimate. To minimize this risk, appropriate hedging transactions such as derivatives are used. These transactions are only
established with banks that have a prime credit rating. Their use isbased on standard guidelines, subject to strict internal controls,
and restricted to the hedging of operational business as well asthat of related investments and financing activities.
If effective hedging relationships existed between the underlying
operating transactions and/or highly probable transactions (basically future deliveries of goods and services) and the currency orinterest hedging transaction, they were combined into a hedge
accounting evaluation unit and valuated together under the socalled “net hedge presentation method” (Einfrierungsmethode).
Deferred income has been recorded for payments received prior to
the balance sheet date for income related to a specific time period
after this date.

Currency conversion
The financial statements of foreign companies were, if not prepared in euro, converted as follows:
Equity:In accordance with the regulations of GAS 25
Other balance sheet items:
Spot rate (average between bid and ask) at the balance sheet date
Income statement items:
Average exchange rate for the year

Exchange rate differences in connection with the use of the closing rate method were shown as “Currency translation Jan. 1”
within the consolidated statement of fixed assets. Differences
arising from the conversion of movements during the current year
were shown in a separate column.
Any difference arising from the translation of the balance sheet
items into euro was included under “Equity impact from currencytranslation” in the consolidated shareholders’ equity.
The “thereof” information on currency conversion in the income
statement includes both unrealized and realized exchange rate
differences.
For the company in the hyperinflation country Argentina and forthe first time for two companies in the hyperinflation country Türkiye,
the financial statements were prepared based on a general priceindex in accordance with GAS 25.

Deferred tax assets and liabilities are set up to account for all temporary and quasi-permanent differences between financial reporting balance sheets according to the German Commercial Code
(HGB) and tax values. Furthermore, deferred taxes for tax loss andinterest carry forwards and tax credits were capitalized, provided
the tax benefit was reasonably recoverable within the next five
years. Deferred taxes were determined using tax rates that are expected to apply at the time of recovery and are based on the regulations adopted at the balance sheet date. Deferred tax assets
and liabilities are presented as a net value. The tax rates fall withina range of 5.00 to 35.00 percent.

84

The company

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Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

Notes to the consolidated­balance sheet

Provisions for pensions and similar obligations
as well as other provisions

Receivables and other assets

Notes for offsetting pursuant to Section 246, paragraph 2, sentence 2 HGB:

Dec. 31, 2022

Carrying
amountin EUR ’000

Dec. 31, 2022
Thereof witha remaining
term of morethan 1 year

Accounts receivables
Trade receivables
Receivables from affiliatedcompanies
Receivables from companies inwhich investments are held
Other assets
Total

1,957,390

525

9,054

814

757

0

612,60949,7572,579,810

51,096

During the previous year, trade receivables (EUR 1,042k), receivables from affiliated companies (EUR 843k) as well as other assets (EUR 10,188k) had a remaining term of more than one year.
Trade receivables are included in the amount of EUR 859k (previous year: EUR 38k) from affiliated companies and EUR 757k (previous year: EUR 988k) from companies in which investments areheld.

in EUR ’000

Carrying
amountSettlement amount of offset liabilities

571,243

Acquistion costs of assets

148,513

Fair value of assets

278,362

Offset income

320

Offset expenses

695

The difference for discounting with the seven-year average rateaccording to Section 253, paragraph 6, sentence 1 HGB amounts
to EUR 44,029k.
Other provisions primarily relate to outstanding credit notes andrebates, outstanding purchase invoices, guarantee and warranty
risks, as well as obligations arising from restructuring and employment contracts. The revaluation of provisions for restructuring
measures resulted in an overall positive income of exceptional size
and incidence amounting to EUR 18,651k.

Only other assets contain receivables against shareholders
amounting to EUR 2k (previous year: EUR 58k). Prepaid expenses do not include the differences between net loan proceeds andliabilities to banks (debt discounts) (previous year: EUR 88k).

EquityThe consolidated unappropriated retained earnings equal those of
the parent company and contain the amount carried forward fromthe previous year of EUR 70k.

The company

Sustainability

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements85

Liabilities
Dec. 31, 2022
Carrying
amountin EUR ’000
Bonds
Liabilities to banks
Payments received on account of orders
Trade payables
Liabilities on bills accepted and drawn

With aWith a remainThereof with a­remaining term ing term of more ­remaining term ofof up to 1 year
than 1 year more than 5 years

780,0000

780,000

750,000

1,501,772

255,120

1,246,652

210,994

10,395

10,395001,369,198

1,366,421

2,777

13

58,97358,97300Liabilities
to affiliated companies

1,163

1,163

0

0

to companies in which investments are held

2,641

2,641

0

0

Other liabilities
Total

During the previous year, liabilities to banks (EUR 128,024k), payments received on account of order (EUR 10,588k), trade payables(EUR 1,255,718k), liabilities on bills accepted and drawn (EUR
64,535k), liabilities to affiliated companies (EUR 772k), liabilities tocompanies in which investments are held (EUR 2,372k), and otherliabilities (EUR 264,215k) had a remaining term of up to one year.
The liabilities to affiliated companies contain trade payables of
EUR 143k (previous year: EUR 118k). The liabilities to companies
in which investments are held contain trade payables of EUR 162k
(previous year: EUR 461k).
The liabilities contain payables to shareholders amounting to EUR
60k (previous year: EUR 0k).
No bank liabilities are secured by property liens or similar rights(previous year: EUR 0k).

299,455

278,466

20,98911,045

4,023,597

1,973,179

2,050,418

972,052

Deferred taxes
Deferred tax assets arise predominantly from differing accounting
treatment of intangible assets, property, plant, and equipment,
and provisions. The temporary differences in provisions essentially
include different carrying amounts between the tax balance sheet
and the consolidated balance sheet related to provisions for pensions and similar obligations and provisions that are not tax-deductible, such as provisions for anticipated losses.
The deferred tax liabilities result predominantly from temporary
differences relating to tangible fixed assets and plan assets due todifferent depreciation methods and carrying amounts in the tax
and consolidated balance sheet. In addition, the identified fair values disclosed as part of the purchase price allocations of the acquisitions lead to deferred tax liabilities, in particular in intangible
fixed assets.
Deferred tax assets were set up for tax loss carry forwards that arerecoverable within five years. As at December 31, 2022 an allowance for deferred tax assets on temporary differences is included,
as their realization is not deemed sufficiently likely.

86

The company

Sustainability

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

Notes to the consolidated
As at the balance sheet date, off-balance-sheet transactions exist in ­income statement
Off-balance-sheet transactions

connection with significant rental and leasing agreements in particular for buildings and land (EUR 147,918k). Moreover, off-balancesheet transactions are in place in connection with factoring (EUR
80,513k). These off-balance-sheet transactions led to a diversification of financing sources as at the balance sheet date. Through thesetransactions, cash outflows are generally postponed into the future.
No material risks are anticipated from these transactions.

Contingent liabilities
Dec. 31, 2022
Carrying
amountin EUR ’000
Contingents from notes

4,930

Guarantees

100

To our knowledge, the underlying obligations can be fulfilled in allcases by the companies concerned. We do not expect the contingent liabilities to be claimed.
The contingent liabilities do not include any obligations concerning
retirement benefits.

Other financial obligations
Dec. 31, 2022
in EUR ’000

Carrying
amountPurchase commitments from investments

305,670

Financial obligations resulting from rent
and lease agreements

99,580

Others

70,946

thereof to affiliated companies

168

The other financial obligations do not include any obligations concerning retirement benefits.

The income statement of the MAHLE Group has been preparedaccording to the cost of sales method. Sales are thus matchedwith the expenses incurred in their realization, which are allocatedin principle to the Production, Sales, General Administration, andResearch and Development functions.
The cost of sales comprises the material and production costs incurred in the realization of sales, the landed costs of the tradebusiness, and the costs of the allocation to provisions for warranties. Furthermore, this item also contains depreciation and amortization on the hidden reserves disclosed as part of the purchaseprice allocations of the acquisitions. These include technologies,
technical equipment and machinery, as well as land and buildings.
The selling expenses include, in particular, personnel and non-personnel expenses, depreciation allocated to the Sales function, as
well as logistics, market research, sales promotion, shipping andhandling, and advertising costs. Furthermore, they also containamortization on the hidden reserves disclosed as part of the purchase price allocations of the acquisitions. These include trademark rights, non-compete clauses, and customer relationships.
The general administration expenses include personnel andnon-personnel expenses as well as depreciation allocated to theGeneral Administration function.
The personnel and non-personnel expenses and depreciation allocated to the Research and Development function are of substantial significance to the MAHLE Group. In order to present the economic situation of the Group more clearly, they have been included
as a separate item in the breakdown.
Other operating income contains EUR 199,606k income related toother periods. This income is mainly related to the reversal of provisions. Income from financing includes gains of EUR 34,452k(previous year: EUR 39,997k) from currency translation and gains
of EUR 255k (previous year: EUR 0k) from financial instruments.
Income related to other periods includes income of exceptional
size and incidence from the release of provisions for restructuring.
Furthermore, other operating income contains income of exceptional size and incidence from the release of badwill of EUR
40,031k.
Other operating expenses contain EUR 4,600k expenses relating
to other periods. These expenses are mainly related to disposals
of depreciable fixed assets. Expenses from financing include losses of EUR 48,171k (previous year: EUR 43,388k) from currencytranslation and expenses of EUR 1,454k (previous year: EUR
4,414k) from financial instruments.
The functional areas include expenditure of exceptional size andincidence for additions to provisions for restructuring measures.

The company

Sustainability

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

87

Depreciation, amortization, and impairments ofintangible and tangible fixed assets

Sales by area of operationin EUR ’000

2022

Engine Systems and Components business unit

2,593,238

Filtration and Engine Peripherals business unit

2,031,688

Thermal Management business unit

4,477,446

Electronics and Mechatronics business unit

1,352,829

Aftermarket business unit

1,219,306

Profit centers and services

759,317

Total

12,433,824

North America

Total

611,051

thereof impairments

371

Subsequent valuation of the purchase priceallocation for the acquisitions*2022

Depreciation and amortization within cost of sales

54,335

Amortization within selling expenses

10,504

Release of subsidies within other operating income

13,227

5,182,413

Amortization of goodwill

48,721

3,686,287

Release of badwill

40,031

2022

Europe2022

in EUR ’000

Sales by geographical market (target area)in EUR ’000

in EUR ’000

South America

752,120

Asia/Pacific

2,724,280

Africa88,724

Total

12,433,824

Personnel expenses* Concerns MAHLE Behr, former Delphi Thermal entities, former Keihin Thermal entities, MAHLE Electric Drives, MAHLE Electronics, and former BHS entities.

For a better presentation, amortization of goodwill and release of
badwill were included in the table compared to previous year.

Other notes

in EUR ’000

2022

Wages and salaries

Average annual number of employees*

2,375,489

Social security expenses

529,066

Old age pension expenses

54,596

Total

2,959,1512022
Direct employees

39,213

Indirect employees

31,756

Total

70,969* Excluding apprentices

The total average annual number of employees includes a pro
rata figure of 2,283 employees from proportionately consolidated companies.

88

The company

Sustainability

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

Derivatives
Derivatives in accordance with Sections 285 and 314 HGB not yet
settled as at the balance sheet date can be broken down as follows:

Dec. 31, 2022 Dec. 31, 2022
in EUR ’000

Nominalamounts*

Fair value**

Transactions relating to currency

2,869,792

25,474

15,8701,062

Transactions relating to commodities* 	The nominal amounts of the derivative financial instruments are based on absolutevalues, i.e., long and short positions are added with their nominal values.
** 	The fair value of currency and commodity related transactions corresponds to themarket value of the derivatives as at the balance sheet date, which is identified inaccordance with the net present value method.

The derivative contracts as at December 31, 2022, are placed inrelation to third parties exclusively with banks. Evaluation units
were established for currency hedging transactions with an effective relationship to the underlying transaction. Provisions of EUR
1,060k were set up for all other hedging transactions that haveresulted in anticipated losses.

Evaluation units
For two intercompany loans in transaction currency USD, an evaluation unit was created with German private placement loans in USD(Schuldscheindarlehen) with identical amounts and matching maturities (natural hedge). As the positions are countervailing, the effectiveness of the hedging relationship is ensured. The volume intransaction currency is USD 213,000k.
The following evaluation units were created from derivatives andare shown with their netted values:

Dec. 31, 2022
Type ofevaluation unit

Amount ofhedged­transaction

Balance sheet item

Portfolio hedge

85,222

Trade receivables

Portfolio hedge

23,685

Bank balances

Portfolio hedge–255,106

Liabilities to banks

Portfolio hedge–88,595

Trade payables

Remaining currency exposure from eliminatedtransactions with affiliated companies

Portfolio hedge

1,398,615

Future transactions

Portfolio hedge–157,824

in EUR ’000
Currency exposure
Recorded values

The company

Sustainability

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

89

Dec. 31, 2022
Volume ofhedges

in ’000
Currency exposure in transaction currency–22,683

CAD
CHF

7,500

CNH

–25,610CNY–343,019

CZK

81,425EUR–19,224

GBP–17,457

HUF

7,265,703

JPY

8,318,043

MXN–345,334

PLN

233,826

RON–67,328

RUB

929,997

THB

1,005,840

TRY–72,908

USD

1,016,701

ZAR

245,640

The changes in value in the underlying and hedging transactions
are offset during the hedging horizon, since risk positions (underlying transactions recognized on the balance sheet) are immediately
hedged by means of forward exchange transactions of the sameamount, in the same currency, and with the same maturity period in
accordance with the guidelines of the Group risk management.

The hedging quota of a planned exposure increases over its lifetime. When the planned exposure finally turns into a booked exposure it will have been hedged fully via consecutive individual hedging steps. At this stage, the exposure is hedged via a portfolio of
individual hedges that have been added gradually over time. At any
given point in time, a number of individual booked exposures canmature, each with their own portfolio of hedges covering the exposure. The entirety of several booked exposures with their respective hedges creates a portfolio hedge.
The critical term match method is used to measure the effectiveness of the hedging relationship.

Report on post-balance sheet date events
No further events with a retroactive effect on the consolidated financial statements occurred after the end of the reporting period.
Against the background of the macroeconomic and geopoliticalsituation, a challenging market environment will remain for thebusiness year 2023. The resulting effects on global economic momentum and on the automotive markets are difficult to assess. The
various challenges posed by the changed economic conditions,especially rising energy prices and wage costs, will lead to further
burdens. Accordingly, these factors may have an impact on oursales figures and results, which cannot be reliably estimated at thetime of preparing this report.

The risk of potential future changes in cash flows arising from highly probable underlying transactions, basically future deliveries ofgoods and services, is offset by using hedging transactions. The
hedge ratio of such future transactions is reduced over time; thefurther such transactions are in the future. The hedging horizon for
currency-related hedging transactions that are included in hedge
accounting relationships is generally two years. Past experiencehas shown that this strategy has led to an effective hedging of cash
flows in forecast evaluation units.

90

The company

Sustainability

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

Appropriation of earnings
Unappropriated retained earnings

in EUR ’000

2022

Net loss MAHLE GmbH–84,480

Withdrawal from retained earnings

89,587

Amount carried forward from prior year

70

Unappropriated retained earnings MAHLE GmbH

5,177

The total remuneration of the Management Board comprises fixedand variable components as well as severance payments. The
fixed portions for 2022 amounted to EUR 5,158k, while EUR
11,933k is attributable to the variable compensation for 2022 andseverance payments. The remuneration shown also includes anadjustment for the previous year. The fixed portions include benefits in kind, which consist primarily of the noncash benefits of having company cars. Expenses for pension entitlements earned by
active members of the Management Board in the current businessyear amount to EUR 676k. The entitlement to other long-term benefits attributable to the business year (included in the above-mentioned fixed remuneration) amounts to EUR 619k.
Remunerations paid to former members of the Management Boardand their descendants totaled EUR 2,736k.

Proposed utilization of retained earnings

in EUR ’000

2022

Unappropriated retained earnings

5,177

Dividend distribution to MAHLE-Stiftung GmbH

–5,10077

Carry forward to new accountRemuneration of the members of the Management Board of MAHLE GmbH (parent company)
in EUR ’000

2022

Supervisory Board

816

Management Board

17,138An amount of EUR 36,309k is set aside for this group of persons in
the pension provision as at December 31, 2022.

Auditor’s fee
The total auditor’s fee recorded as expense for 2022 for the Groupauditor PricewaterhouseCoopers GmbH, pursuant to Section 314,
paragraph 1, number 9 HGB consists of the following:in EUR ’000

2022

Services for audit of financial statements

957

Other assurance services

72

Tax advisory services

247

Other services

2,438

Total

3,714

Stuttgart/Germany, March 17, 2023
The Management Board of MAHLE GmbH

Arnd Franz

Jumana Al-Sibai

Dr. Beate Bungartz

Georg Dietz

Wilhelm Emperhoff

Markus Kapaun

Martin Weidlich

The company

Sustainability

Management report

Consolidated financial statements
Notes to the consolidated fi­ nancial statements

91Consolidated statement of fixed assets
From January 1 to December 31, 2022, in EUR ’000
Acquisition/manufacturing costs
BUSINESS YEAR 2022
Jan. 1, 2022 Jan. 1, 2022
Accumulatedacquisition/
manufac­turing costs

Dec. 31, 2022

Currency Changes attranslation
the Group

Additions

Disposals

Reclassifications

Currency Accumulatedtranslation acquisition/of current
manufac­year 3 turing costs

I. Intangible assets
1. Purchased concessions, industrial
and similar rights and assets,
as well as licences in such rights
and assets

822,334–1,428057,887

258,085

1,976

441

623,125

2. Goodwill

478,731075

18,098300496,901

706

1

0

62

7

–200

0

562

1,301,771–1,42775

76,047

258,095

1,776

441

1,120,588

1. Land, leasehold rights, andbuildings including buildingson third-party land

1,767,307

10,799027,725

5,873

49,2331,586

1,850,777

2. Technical equipment and machinery

5,998,186

44,150094,192

132,107215,224

26,636

6,246,281

3. O ther equipment, fixtures,and furniture544,863

2,107

0

21,16312,087

12,332

2,172

570,550

4. P
 repayments and assets underconstruction

448,7552,059

0318,3632,605–278,565

414

488,4218,759,111

59,115

0461,443

152,672–1,77630,8089,156,029

1. S
 hares in affiliated companies

12,336

1,060

–508

103

1,121

0

25

11,895

2. Shares in associated companies

41,68200

04,0661–11,561–538

25,517

3. Equity investments

5,800

229

0

7

613

11,585–1,164

15,844

3. Prepayments

II . Property, plant, and equipment

III. Financial assets

4. L
 oans to companies in which
participations are held

90

0

0

0

0

0

0

90

5. Long-term securities

17,765

238

0

934

5,511

0

2

13,428

6. Other loans

69,446

–14

0

2,958

1,199

–24

12

71,179147,119

1,513

–508

4,002

12,5100–1,663

137,953

10,208,001

59,201–433

541,492

423,277

029,586

10,414,570¹ Includes results from continuation of equity approach as well as disposal due to dividend payments² Thereof shares in affiliated companies measured according to the equity method: EUR 664k
3
Including effects from hyperinflation adjustments for the countries Argentina and Türkiye in accordance with GAS 25

92

The company

Sustainability

Management report

Consolidated financial statements
Consolidated statement of fixed assets

Depreciation/amortization

Carrying amounts

BUSINESS YEAR 2022
Jan. 1, 2022 Jan. 1, 2022
Accumulated
depreciation/amortization

Dec. 31, 2022 Dec. 31, 2022 Dec. 31, 2021

Depreciation/amortization
Currency Changes at of the busitranslation
the Group
ness year

Write-upsof the business year

Disposals

Reclassi­
fications

Currencytranslation Accumulatedof current depreciation/
year 3 amortization

Carrying
amounts

Carrying
amounts

655,786–939

073,4790257,4700411

471,267

151,858

166,548281,7970048,7210200

330,516

166,385

196,934

0

0

0

0

0

0

0

0

0

562

706

937,583–939

0122,200

0257,4720411

801,783

318,805

364,188825,1304,414

053,875

0

4,460

–609

84

878,434

972,343

942,177

4,524,260

35,0590391,423

1,051

126,924–332

20,082

4,842,517

1,403,764

1,473,926

390,4271,610

043,3140

11,255

1,125

1,617

426,838

143,712

154,436

11,387

–153

0

239

0

711

–184

19

10,597

477,824

437,368

5,751,204

40,9300488,851

1,051

143,350

021,802

6,158,386

2,997,643

3,007,907

9,402

1,196

0

36

0

61

0

–1

10,572

1,323

2,934

0

0

0

0

0

0

0

0

0

25,5172

41,682

0

0

0

0

0

0

0

0

0

15,844

5,800

0

0

0

0

0

0

0

0

0

90

90

1,356

26

0

85

397

753

0

6

323

13,105

16,40957,136

4

0

3,171

0

0

0

0

60,311

10,86812,31067,894

1,226

0

3,292

397

814

0

5

71,206

66,747

79,225

6,756,681

41,2170614,3431,448

401,636

0

22,2187,031,375

3,383,195

3,451,320

The company

Sustainability

Management report

Consolidated financial statements
Consolidated statement of fixed assets

93

Shareholdings
Shareholdings in companies included in consolidation, associated companies, proportionately consolidated
companies, and other companies which serve the permanent business operations.
As at December 31, 2022
Sharein equityin %Name and location
PARENT COMPANY
MAHLE GmbH, Stuttgart / Germany

1. Fully consolidated subsidiaries
a) Fully consolidated subsidiaries of MAHLE GmbH with direct shareholding quota
MAHLE Aftermarket Deutschland GmbH, Schorndorf/Germany

100.00

MAHLE Aftermarket France SAS, Décines/France

100.00

MAHLE Aftermarket GmbH, Stuttgart/Germany

100.00

MAHLE Aftermarket Inc., Farmington Hills, Michigan/USA

100.00

MAHLE Aftermarket Italy S.p.A., Parma/Italy

100.00

MAHLE Aftermarket Ltd., Northampton/United Kingdom

100.00

MAHLE Aftermarket Otomotiv Ticaret Anonim Şirketi, Izmir/Türkiye

100.00

MAHLE Aftermarket Pte. Ltd., Singapore/Singapore

100.00

MAHLE Aftermarket S. de R.L. de C.V., Lerma/Mexico

100.00

MAHLE Aftermarket S.L.U., Torrejón de Ardoz/Spain

100.00

MAHLE Aftermarket South Africa (Pty) Ltd., Johannesburg/South Africa

100.00

MAHLE ANAND Filter Systems Private Limited, New Delhi/India

50.00 1

MAHLE Anéis Participações Ltda., Mogi Guaçu/Brazil

100.00

MAHLE Automotive Technologies (China) Co., Ltd., Shanghai/China

100.00

MAHLE Automotive Technologies (Suzhou) Co., Ltd., Changshu/China

100.00

MAHLE Behr GmbH & Co. KG, Stuttgart/Germany

77.46

MAHLE Behr Verwaltung GmbH, Stuttgart/Germany

75.71

MAHLE Beteiligungen GmbH, Stuttgart/Germany

100.00

MAHLE Blechtechnologie GmbH, Stuttgart/Germany

100.00

MAHLE Componente de Motor SRL, Timisoara/Romania

100.00

MAHLE Componentes de Motor de México, S. de R.L. de C.V., Ramos Arizpe/Mexico

100.00

MAHLE Componentes de Motores S.A., Murtede/Portugal

100.00

MAHLE Componenti Motori Italia Srl, Grugliasco/Italy

100.00

MAHLE Composants Moteur France SAS, Chavanod/France

100.00

MAHLE Compresores, S. de R.L. de C.V., Juarez/Mexico

100.00

MAHLE Compressores do Brasil Ltda., Jaguariúna/Brazil

100.00

MAHLE Compressors Hungary Kft., Balassagyarmat/Hungary

100.00

MAHLE de México S. de R.L. de C.V., Ramos Arizpe/Mexico

100.00

MAHLE Donghyun Filter Systems Co., Ltd., Hwasung/South Korea

100.00

MAHLE Smartbike Systems S.L.U, Palencia/Spain

100.00

MAHLE Electric Drives (Taicang) Co., Ltd., Taicang City/China

99.87

MAHLE Electric Drives Bosnia d.o.o., Laktaši/Bosnia and Herzegovina

100.00

MAHLE Electric Drives Bovec d.o.o., Bovec/Slovenia

100.0094

The company

Sustainability

Management report

Consolidated financial statements
Shareholdings

As at December 31, 2022
Sharein equityin %Name and location
MAHLE Electric Drives India Private Limited, Coimbatore/India

94.46

MAHLE Electric Drives Italy S.r.l., Reggio Emilia/Italy

100.00

MAHLE Electric Drives Japan Corporation, Numazu-shi, Shizuoka/Japan

100.00

MAHLE Electric Drives Komen d.o.o., Komen/Slovenia

100.00

MAHLE Electric Drives Slovenija d.o.o., Šempeter pri Gorici/Slovenia

100.00

MAHLE Electronics & Mechatronics Technology (Suzhou) Co., Ltd, Changshu/China

100.00

MAHLE Electronics S.L.U., Motilla del Palancar/Spain

100.00

MAHLE Engine Components (Chongqing) Co., Ltd., Chongqing/China

100.00

MAHLE Engine Components (Nanjing) Co., Ltd., Nanjing/China

100.00

MAHLE Engine Components (Thailand) Co., Ltd., Bangkok/Thailand

99.75

MAHLE Engine Components (Yingkou) Co., Ltd., Yingkou/China

100.00

MAHLE Engine Components India Private Limited, Pithampur/India

100.00

MAHLE Engine Components Japan Corporation, Okegawa-shi/Japan

100.00

MAHLE Engine Components Slovakia s.r.o., Dolný Kubín/Slovakia

100.00

MAHLE Engine Components USA, Inc., Morristown, Tennessee/USA

100.00

MAHLE Engine Systems UK Ltd., Northampton/United Kingdom

100.00

MAHLE Engineering Services India Private Limited, Pune/India

40.00 2

MAHLE Filter Systems (Tianjin) Co., Ltd., Tianjin/China

100.00

MAHLE Filter Systems Canada, ULC, Tilbury/Canada

100.00

MAHLE Japan Ltd., Tokyo/Japan

100.00

MAHLE Filter Systems North America, Inc., Troy, Michigan/USA

100.00

MAHLE Filter Systems Philippines Corporation, Cavite/Philippines

100.00

MAHLE Filter Systems UK Ltd., Northampton/United Kingdom

100.00

MAHLE Filtersysteme Austria GmbH, St. Michael ob Bleiburg/Austria

100.00

MAHLE Filtersysteme France SAS, Seboncourt/France

100.00

MAHLE Filtersysteme GmbH, Stuttgart/Germany

100.00

MAHLE Filtration Systems (Hubei) Co., Ltd., Wuhan/China

100.00

MAHLE Filtre Sistemleri A.S., Gebze/Türkiye

100.00

MAHLE France SAS, Rouffach/France

100.00

MAHLE Guangzhou Filter Systems Co., Ltd., Guangzhou/China

100.00

MAHLE Holding (China) Co., Ltd., Shanghai/China

100.00

MAHLE Holding (India) Private Limited, Pune/India

100.00

MAHLE Holding Austria GmbH, St. Michael ob Bleiburg/Austria

100.00

MAHLE Holding España S.L.U., Montblanc/Spain

100.00

MAHLE Immobilien GmbH, Stuttgart/Germany

100.00

MAHLE Immobilien Schweiz AG, Grenchen/Switzerland

100.00

MAHLE Indústria e Comércio Ltda., Mogi Guaçu/Brazil

100.00

MAHLE Industrial Thermal Systems GmbH & Co. KG, Kornwestheim/Germany

60.00 2The company

Sustainability

Management report

Consolidated financial statements
Shareholdings95

As at December 31, 2022
Sharein equityin %Name and location
MAHLE Industriebeteiligungen GmbH, Stuttgart/Germany

100.00

MAHLE Industriemotoren-Komponenten GmbH, Stuttgart/Germany

100.00

MAHLE Industries UK Ltd., Northampton/United Kingdom

100.00

MAHLE Industries, Incorporated, Farmington Hills, Michigan/USA

100.00

MAHLE International GmbH, Stuttgart/Germany

100.00

MAHLE Kleinmotoren-Komponenten GmbH & Co. KG, Stuttgart/Germany

100.00

MAHLE Luxembourg Sàrl, Luxembourg/Luxembourg

100.00

MAHLE Manufacturing Management, Inc., Farmington Hills, Michigan/USA

100.00

MAHLE Manufacturing Service Japan Corporation, Tokyo/Japan

100.00

MAHLE Metal Leve S.A., Mogi Guaçu/Brazil

70.00

MAHLE Motor Parçalari San. ve Tic. A.Ş., Izmir/Türkiye

100.00

MAHLE Polska Spółka z o.o., Krotoszyn/Poland

100.00

MAHLE Powertrain, LLC, Plymouth, Michigan/USA

100.00

MAHLE Powertrain GmbH, Stuttgart/Germany

100.00

MAHLE Powertrain Ltd., Northampton/United Kingdom

100.00

MAHLE RUS, OOO, Dobrino/Russia

100.00

MAHLE S.A.U., Vilanova i la Geltrú/Spain

100.00

MAHLE Services (Thailand) Ltd., Samut Prakan/Thailand

100.00

MAHLE Shanghai Filter Systems Co., Ltd., Shanghai/China

95.00

MAHLE Shared Services México, S. de R.L. de C.V., Monterrey/Mexico

100.00

MAHLE Shared Services Poland Spółka z o.o., Wrocław/Poland

100.00

MAHLE Shared Services d.o.o. Beograd, Belgrade/Serbia

100.00

MAHLE Siam Electric Drives Co. Ltd., Samut Prakan/Thailand

100.00

MAHLE Siam Filter Systems Co., Ltd., Samut Prakan/Thailand

74.90

MAHLE Sistemas de Filtración de México S.A. de C.V., Monterrey/Mexico

100.00

MAHLE Trading (Shanghai) Co., Ltd., Shanghai/China

100.00

MAHLE Trading Japan Co., Ltd., Tokyo/Japan

100.00

MAHLE Tri-Ring Valve Train (Hubei) Co., Ltd., Macheng/China

65.00

MAHLE Ventiltrieb GmbH, Stuttgart/Germany

100.00

MAHLE Versicherungsvermittlung GmbH, Stuttgart/Germany

100.00

MAHLE Vöcklabruck GmbH, Vöcklabruck/Austria

100.00

MAHLE ZG Transmissions GmbH, Eching/Germany

100.00MG Immobilienentwicklungs- und Ansiedlungsgesellschaft mbH, St. Michael ob Bleiburg/Austria

100.00

MAHLE New Mobility Solutions GmbH, Kornwestheim/Germany

100.00OSCON, LLC, Wilmington, Delaware/USA

100.00PT. MAHLE Indonesia, Pasirranji/Indonesia

99.92

96

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Consolidated financial statements
Shareholdings

As at December 31, 2022
Sharein equityin %Name and locationb) Fully consolidated subsidiaries of MAHLE Behr GmbH & Co. KG with direct shareholding quota
MAHLE ANAND Thermal Systems Private Limited, Chakan/India

60.00

MAHLE Behr Berga GmbH, Stuttgart/Germany

100.00

MAHLE Behr Charleston Inc., Charleston, South Carolina/USA

100.00

MAHLE Behr Components Spain S.L.U., L‘Espluga de Francolí/Spain

100.00

MAHLE Behr Dayton L.L.C., Dayton, Ohio/USA

100.00

MAHLE Behr France Hambach S.A.S., Hambach/France

100.00

MAHLE Behr France Rouffach S.A.S., Rouffach/France

100.00

MAHLE Behr Gerenciamento Térmico Brasil Ltda., Arujá/Brazil

100.00

MAHLE Behr Holding GmbH, Stuttgart/Germany

100.00

MAHLE Behr Holýšov s.r.o., Holýšov/Czech Republic

100.00

MAHLE Behr Italy s.r.l., Grugliasco/Italy

100.00

MAHLE Behr Japan K.K., Tokyo/Japan

100.00

MAHLE Behr Kirchberg GmbH, Kirchberg/Germany

100.00

MAHLE Behr Korea Inc., Busan/South Korea

100.00

MAHLE Behr Manufacturing Management, Inc., Troy, Michigan/USA

100.00

MAHLE Behr Mexico, S. de R.L. de C.V., Ramos Arizpe/Mexico

100.00

MAHLE Behr Mnichovo Hradiště s.r.o., Mnichovo Hradiště/Czech Republic

100.00

MAHLE Behr Mt Sterling Inc., Mount Sterling, Ohio/USA

100.00

MAHLE Behr Námestovo s.r.o., Námestovo/Slovakia

100.00

MAHLE Behr Ostrava s.r.o., Mošnov/Czech Republic

100.00

MAHLE Behr Ostrov s.r.o., Mnichovo Hradiště/Czech Republic

100.00

MAHLE Behr Ostrów Wielkopolski Sp. z o.o., Ostrów Wielkopolski/Poland

100.00

MAHLE Behr Rio Bravo, S. de R.L. de C.V., Ramos Arizpe/Mexico

100.00

MAHLE BEHR RUS LLC, St. Petersburg/Russia

100.00

MAHLE Behr Senica s.r.o., Senica/Slovakia

100.00

MAHLE Behr Service America L.L.C., Troy, Michigan/USA

100.00

MAHLE Behr Service Asia Co., Ltd., Shanghai/China

100.00

MAHLE Behr Service GmbH, Stuttgart/Germany

100.00

MAHLE Behr Service Mexico, S. de R.L. de C.V., Ramos Arizpe/Mexico

100.00

MAHLE Behr South Africa (Pty) Ltd., Durban/South Africa

100.00

MAHLE Behr Spain S.A.U., Montblanc/Spain

100.00

MAHLE Behr Thermal Systems (Jinan) Co., Ltd., Jinan/China

100.00

MAHLE Behr Thermal Systems (Qingdao) Co., Ltd., Qingdao/China

100.00

MAHLE Behr Thermal Systems (Thailand) Company Limited, Thanu/Thailand

100.00

MAHLE Behr USA Inc., Troy, Michigan/USA

100.00

MAHLE Engineering Services India Private Limited, Pune/India

60.00 2

MAHLE Industrial Thermal Systems GmbH & Co. KG, Kornwestheim/Germany

40.00 2The company

Sustainability

Management report

Consolidated financial statements
Shareholdings97

As at December 31, 2022
Sharein equityin %Name and locationc) Fully consolidated subsidiaries of MAHLE Metal Leve S.A. with direct shareholding quota
MAHLE Argentina S.A., Rafaela/Argentina

100.00

MAHLE Filtroil Indústria e Comércio de Filtros Ltda., Mogi Guaçu/Brazil

60.00

MAHLE Hirschvogel Forjas S.A., Queimados/Brazil

51.00

MAHLE Metal Leve GmbH, St. Michael ob Bleiburg/Austria

100.00d) Fully consolidated subsidiaries of MAHLE Industrial Thermal Systems GmbH & Co. KG
with direct shareholding quota
MAHLE Industrial Thermal Systems (Tianjin) Co., Ltd., Tianjin/China

100.00

MAHLE Industrial Thermal Systems America, L.P., Belmont, Michigan/USA

99.00

MAHLE Industrial Thermal Systems Námestovo s.r.o., Námestovo/Slovakia

100.002. Affiliated companies, not consolidated on account of their immateriality for the presentation of the net assets, financial
position, and results of operationsa) Affiliated companies of MAHLE Behr GmbH & Co. KG with direct shareholding quota
100.00

MAHLE Behr Sweden AB, Gothenburg/Swedenb) Other affiliated companies with direct shareholding quota
Compañía Rosarina S.A., Rosario/Argentina

99.99

MAHLE chargeBIG GmbH, Stuttgart/Germany

100.00

MAHLE Australia Pty Ltd., Melbourne/Australia

100.00 3, 5

MAHLE Industrial Thermal Systems America, Inc., Belmont, Michigan/USA

100.00

MAHLE Industrial Thermal Systems Verwaltung GmbH, Kornwestheim/Germany

100.00

MAHLE Kleinmotoren-Komponenten Verwaltungs GmbH, Stuttgart/Germany

100.00

MAHLE New Ventures GmbH , Stuttgart/Germany

100.00

MAHLE Pumpensysteme GmbH, Stuttgart/Germany

100.00

Ueno Industry Co. Ltd., Tokyo/Japan

100.00

Ueno Tech Co., Ltd., Tokyo/Japan

100.003. Proportionately consolidated companiesa) Subgroup Behr-Hella Thermocontrol that is managed by MAHLE Behr GmbH & Co. KG
and another company
PARENT COMPANY
50.00

Behr-Hella Thermocontrol GmbH, Stuttgart/Germany

Companies included in subgroup accounts of Behr-Hella Thermocontrol GmbH with direct shareholding quota
Behr-Hella Thermocontrol (Shanghai) Co., Ltd., Shanghai/China

100.00Behr-Hella Thermocontrol EOOD, Sofia/Bulgaria

100.00Behr-Hella Thermocontrol Inc., Farmington Hills, Michigan/USA

100.00Behr-Hella Thermocontrol India Private Limited, Pune/India

100.00Behr-Hella Thermocontrol Japan K.K., Yokohama/Japan

100.00

BHTC Finland Oy, Tampere/Finland

100.00

BHTC Mexico S.A. de C.V., San Miguel de Allende/Mexico

100.0098

The company

Sustainability

Management report

Consolidated financial statements
Shareholdings

As at December 31, 2022
Sharein equityin %Name and locationb) Proportionately consolidated group of companies that is managed by MAHLE Behr GmbH & Co. KG
and another company
PARENT COMPANY

50.00

Shanghai MAHLE Thermal Systems Co., Ltd., Shanghai/China
Subsidiaries with direct shareholding quota
Chengdu MAHLE Automotive Thermal Systems Co., Ltd., Chengdu/China

100.00

Ningde MAHLE Automotive Thermal Systems Co. Ltd., Ningde/China

100.00

Shenyang MAHLE Automotive Thermal Systems Co., Ltd., Shenyang/China

100.00c) Other proportionately consolidated companies with direct shareholding quota that are managed by
MAHLE Behr GmbH & Co. KG and another company
50.00

Dongfeng MAHLE Thermal Systems Co., Ltd., Wuhan/China

4. Associated companies, consolidated using the equity methoda) Associated companies of MAHLE Behr GmbH & Co. KG with direct shareholding quota
Dongfeng-Paninco Automobile Aluminum Heat Exchanger Co.Ltd., Shiyan/China

50.00 5b) Other associated companies with direct shareholding quota
Cofap Companhia Fabricadora de Peças Ltda., Mauá/Brazil

31.65 5LangFang Kokusan Electric Co., Ltd., Langfang/China

40.00 5

MAHLE Filter Systems Land Corporation, Cavite/Philippines

39.99 4

Pt Federal Izumi Manufacturing, Bogor/Indonesia

41.94 5Retromotion GmbH, Stuttgart/Germany

45.75 5SiEVA d.o.o., Šempeter pri Gorici/Slovenia

20.00 4

Shareholding 50 % + 1 share
From the Group’s perspective, company is included at 100 %3
Affiliated company, consolidated using the equity method
4The company was not measured using the equity method on account of its immateriality
for the presentation of the net assets, financial position, and results of operations
5
Financial statements according to local GAAP
1
2

The company

Sustainability

Management report

Consolidated financial statements
Shareholdings

99

Auditor’s report
This audit report is issued on financial statements prepared inGerman language.

Independent auditor’s report
To MAHLE GmbH, Stuttgart

Audit Opinions

Basis for the Audit Opinions

We have audited the consolidated financial statements of MAHLE
GmbH, Stuttgart, and its subsidiaries (the Group), which comprisethe consolidated balance sheet as at 31 December 2022, and theconsolidated income statement, consolidated statement ofchanges in equity and consolidated cash flow statement for thefinancial year from 1 January to 31 December 2022, and notes tothe consolidated financial statements, including the presentationof the recognition and measurement policies. In addition, we haveaudited the group management report of MAHLE GmbH for thefinancial year from 1 January to 31 December 2022.

We conducted our audit of the consolidated financial statements
and of the group management report in accordance with § 317
HGB in compliance with German Generally Accepted Standards
for Financial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
Our responsibilities under those requirements and principles arefurther described in the “Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements and of the Group Management Report“ section of our auditor’s report. We are independentof the group entities in accordance with the requirements of German commercial and professional law, and we have fulfilled ourother German professional responsibilities in accordance withthese requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our
audit opinions on the consolidated financial statements and on thegroup management report.

In our opinion, on the basis of the knowledge obtained in the audit,– the accompanying consolidated financial statements comply, inall material respects, with the requirements of German commercial law and give a true and fair view of the assets, liabilities andfinancial position of the Group as at 31 December 2022 and ofits financial performance for the financial year from 1 January to
31 December 2022 in compliance with German Legally Required
Accounting Principles, and– the accompanying group management report as a whole provides an appropriate view of the Group’s position. In all material
respects, this group management report is consistent with theconsolidated financial statements, complies with German legal
requirements and appropriately presents the opportunities andrisks of future development.
Pursuant to § [Article] 322 Abs. [paragraph] 3 Satz [sentence] 1
HGB [Handelsgesetzbuch: German Commercial Code], we declare that our audit has not led to any reservations relating to thelegal compliance of the consolidated financial statements and of
the group management report.

Other Information
The executive directors are responsible for the other information.
The other information comprises the annual report – excluding
cross-references to external information – with the exception of
the audited consolidated financial statements, the audited groupmanagement report and our auditor’s report.
Our audit opinions on the consolidated financial statements andon the group management report do not cover the other information, and consequently we do not express an audit opinion or any
other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the otherinformation mentioned above and, in so doing, to consider whether the other information– is materially inconsistent with the consolidated financial statements, with the group management report disclosures audited interms of content or with our knowledge obtained in the audit, or– otherwise appears to be materially misstated.

100

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Consolidated financial statements
Auditor’s reportResponsibilities of the Executive Directors
and the Supervisory Board for theConsolidated Financial Statements andthe Group Management Report
The executive directors are responsible for the preparation of theconsolidated financial statements that comply, in all material respects, with the requirements of German commercial law, and thatthe consolidated financial statements give a true and fair view of theassets, liabilities, financial position and financial performance of theGroup in compliance with German Legally Required Accounting
Principles. In addition, the executive directors are responsible forsuch internal control as they, in accordance with German Legally
Required Accounting Principles, have determined necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.
In preparing the consolidated financial statements, the executive
directors are responsible for assessing the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going
concern basis of accounting, provided no actual or legal circumstances conflict therewith.
Furthermore, the executive directors are responsible for the preparation of the group management report that, as a whole, provides
an appropriate view of the Group’s position and is, in all material
respects, consistent with the consolidated financial statements,
complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition,
the executive directors are responsible for such arrangements andmeasures (systems) as they have considered necessary to enable
the preparation of a group management report that is in accordance with the applicable German legal requirements, and to beable to provide sufficient appropriate evidence for the assertions in
the group management report.
The supervisory board is responsible for overseeing the Group’s
financial reporting process for the preparation of the consolidated
financial statements and of the group management report.

The company

Sustainability

Management report

Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements and of theGroup Management Report
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether thegroup management report as a whole provides an appropriate
view of the Group’s position and, in all material respects, is consistent with the consolidated financial statements and the knowledge
obtained in the audit, complies with the German legal requirements, and appropriately presents the opportunities and risks offuture development, as well as to issue an auditor’s report that includes our audit opinions on the consolidated financial statements
and on the group management report.
Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with § 317 HGB
and in compliance with German Generally Accepted Standards for
Financial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements andthis group management report.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:– Identify and assess the risks of material misstatement of the consolidated financial statements and of the group management
report, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our audit
opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

Consolidated financial statements
Auditor’s report101– Obtain an understanding of internal control relevant to the auditof the consolidated financial statements and of arrangements
and measures (systems) relevant to the audit of the group management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an audit opinion on the effectiveness of these systems.
– Evaluate the appropriateness of accounting policies used by the
executive directors and the reasonableness of estimates madeby the executive directors and related disclosures.
– Conclude on the appropriateness of the executive directors’ useof the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on theGroup’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the consolidated financial statements and in the group management
report or, if such disclosures are inadequate, to modify our respective audit opinions. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to be able to continue as a going concern.
– Evaluate the overall presentation, structure and content of theconsolidated financial statements, including the disclosures, andwhether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated
financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group incompliance with German Legally Required Accounting Principles.

–E valuate the consistency of the group management report withthe consolidated financial statements, its conformity with German law, and the view of the Group’s position it provides.
–P erform audit procedures on the prospective information presented by the executive directors in the group management report. On the basis of sufficient appropriate audit evidence weevaluate, in particular, the significant assumptions used by the
executive directors as a basis for the prospective information,and evaluate the proper derivation of the prospective informationfrom these assumptions. We do not express a separate audit
opinion on the prospective information and on the assumptions
used as a basis. There is a substantial unavoidable risk that future
events will differ materially from the prospective information.
We communicate with those charged with governance regarding,among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.

Stuttgart, March 17, 2023
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
sgd. Jürgen Berghaus		
sgd. Marc Hummel
Wirtschaftsprüfer			Wirtschaftsprüfer(German Public Auditor)		
(German Public Auditor)– Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within theGroup to express audit opinions on the consolidated financial
statements and on the group management report. We are responsible for the direction, supervision and performance of thegroup audit. We remain solely responsible for our audit opinions.

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Consolidated financial statements
Auditor’s reportImprint / Contact

Published by
MAHLE GmbH
Pragstraße 26 – 4670376 Stuttgart / Germany
Phone + 49 (0)711-501-0
www.mahle.com
info@mahle.com
Contact
MAHLE International GmbH
Corporate Communications / Public Relations
Pragstraße 26 – 4670376 Stuttgart / Germany
Phone + 49 (0)711-501-12506
Concept and Design
3st kommunikation GmbH
Taunusstraße 59-61
55118 Mainz / Germany
www.3st.de
info@3st.de
Editorial support (group management report)
SkyViewTexte
Ulla von Blittersdorff-Heß
Burweg 8a21635 Jork / Germany
info@skyviewtexte.com
Photography
CES-Waldorf 2022, Andreas Pohlmann,
Shining Eyes, MAHLE Archive
Translation
Janus Worldwide GmbH
Schanzenstr. 36 / Geb. 31,
51063 Köln / Germany
www.janusww.com
info@janusww.com© 2023 MAHLE GmbH,
00007872EN4/23

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mahle.com