non-financial group report 2022

Group principles

About this report

The following report presents all information of the combined non-financial statement of Francotyp-Postalia Holding AG (hereinafter "FP Group", "FP" or "Group") and reflects the results of fiscal year 2022. The report was prepared on the basis of sections 340i (5) in conjunction with 315b and 315c in conjunction with sections 340a (1a) in conjunction with sections 289b to 289b of the German Commercial Code (HGB).

The FP Group has prepared this report in compliance with the GRI standards for the period from 1 Janu- ary 2022 to 31 December 2022.

It addresses selected topics relating to the business model, the business units, materiality and governance, which also includes risk and opportunity management, sustainability management and social engagement.

All disclosures relate to Francotyp-Postalia Holding AG and all its German subsidiaries.

The FP Group collects data from the following German subsidiaries:

• FP GmbH, Berlin
• FP Vertrieb und Service GmbH, Berlin
• FP InovoLabs GmbH, Berlin
• FP Produktionsgesellschaft mbH & Co. KG, Wittenberge
• FP Produktionsverwaltung, Wittenberge
• FP Digital Business Solutions GmbH, Fürs- tenwalde
• Freesort GmbH, Langenfeld
• FP NeoMonitor GmbH, Berlin
• FP Unterstützungseinrichtung GmbH, Berlin
• FP Shared Service Europe GmbH, Hen- nigsdorf
• HEFTER Systemform GmbH, Prien am Chiemsee

The FP Group's business model

Francotyp-Postalia Holding AG is a listed company with headquarters in Berlin.

The FP Group's core business comprises the develop- ment, production and sale of efficient office solutions. The FP Group is mainly engaged in mail processing and the consolidation of business mail. Digital solutions for companies and public authorities are also of major im- portance. In fiscal year 2022, the company is divided into three business units: (1) Mailing, Shipping & Office Solu- tions, (2) Mail Services and (3) Digital Business Solutions.

The FP Group has had an international presence on several continents for nearly 100 years and is represented by subsidiaries in 15 countries, and it also has its own dealer system in 40 other countries.

Further information on the business model can be found in FP's annual report.

Business units

Mailing, Shipping & Office Solutions

The core business of the Mailing, Shipping & Office Solutions business unit is the development, production and distribution of franking machine systems, which FP both sells and leases out. FP also offers its customers an extensive service portfolio.

This business unit offers its customers not only franking machine systems and related hardware, but also digital solutions to make office work more efficient in general. The subsidiaries' products, especially those of HEFTER GmbH, have been added in the last few years and fit perfectly into the FP product family. In spring 2022, FP strengthened its position in the Mailing, Shipping & Office Solutions market in Norway, Sweden, Finland, Den- mark, Switzerland and Italy with the acquisition of the Az- olver companies. The aim is to convert the installed base of franking machines to FP products and identify additional potential for the wider FP product portfolio.

In the Mailing, Shipping & Office Solutions business unit, this primarily means integrating existing products and launching the newly acquired products on the German and international markets. This business unit also offers a wide range of digital solutions. Parcel Shipping from the USA and Vision360 are just two examples of product solutions that are sold independently of the franking machine business and offer customers another attractive solution for various office processes.

With its recurring revenue, aftersales business also remains a key revenue generator. This business comprises the sale of consumables, services, software solutions and the Teleporto service.

Additional solutions for customers in the European and North American markets arise from cooperations and via M&A. These offerings have great potential in both markets and thus bring additional strength to the business unit.

Many solutions from the Mailing, Shipping & Office Solutions business unit are also developed and sold in the Digital Business Solutions business unit.

Digital Business Solutions

The Digital Business Solutions business unit comprises all digital activities with which FP is expanding its business model in a growth-oriented manner. In the Document Workflow Management area, this includes Input and Output Management, enabling customers to efficiently manage their incoming and outgoing mail. In Input Management, incoming physical and digital documents are collected, analysed according to the cus- tomer's specific criteria, evaluated and then fed into the customer's data or document system in an electronic form. In Output Management, FP takes care of printing, inserting, franking and handover to delivery services or delivery in digital form. The Business Process Management & Automation area comprises products and solutions for efficient and automated customer process work- flows. In addition to digital signatures, this includes secure electronic delivery via DE-Mail as well as solutions for electronic legal transactions and third-party products. The Shipping and Logistics solutions, which until now mainly comprised the SaaS-based Parcel Shipping soft- ware, were expanded through the acquisition of the Az- olver companies in the spring and pakadoo in the fourth quarter of 2022 to include software solutions for inbound parcel management, asset tracking, and internal logis- tics. FP uses this business unit to address the fast-growing market of process automation. Strategic additions are intended to expand the solutions portfolio, for example in the area of cloud applications, in order to enable customers to implement secure and efficient communication and business processes. The Digital Business Solutions segment represents this business area.

Mail Services

The Mail Services business unit comprises the franking service - collecting unfranked outbound post and providing the franking - and the consolidation service - collecting franked post, sorting it by postcode and delivering it in batches to a regional office of Deutsche Post AG or an alternative postal distributor. Collection, postage-optimised sorting and delivery to postal service providers takes the pressure off companies with medium and high volumes of letters and helps to reduce the costs that this entails. There are currently signs of increasing consolidation in this market.

This business is operated by the FP Group with eight locations throughout Germany, being one of the leading independent consolidator of business mail on the German market.

Materiality

In the past fiscal year, the FP Group carried out a stakeholder survey on current ESG (environment, social and governance) topics in order to analyse which topics are material for the FP Group. The Group actively approached employees, shareholders, business partners and suppliers. Material topics were identified in order to optimise or adjust the corresponding measures and the reporting about them.

For the first time, the survey revealed greatly increased interest in environmental topics and was taken into account in the new materiality matrix and the general strategy of FP. It also showed that FP has made a positive start with regard to ESG both as an employer and in its business activities, but that there is also room for improve- ment.

As a result of the stakeholder survey, the FP Group defined new environmental indicators as material. Resource conservation in terms of energy and water and the reduction of CO2 emissions are rated as particularly important. These indicators are to be continuously optimised from now on.

In a separate survey of the FP Group's employees, additional social aspects were also identified as material. Here, the FP Group is concentrating on special company benefits (Sodexo card etc.) and greater opportunities for personal development. For example, the FP Group wants to fulfil employee's wishes while enabling more efficient work.

There is good news on governance. The transformation process, which continued successfully in the past fiscal year, is seen as a positive.

In the coming fiscal years, the topics identified as material for the FP Group are to be addressed more intensely so that the Group can make the future more sustainable and position itself as a strong employer on the market.

Governance

The FP Group wants to create a balance between sustainable business and the interests of shareholders, em- ployees, customers and suppliers. The FP Group's governance focuses on sustainable business and forward- looking action.

Corporate governance within FP

Thinking sustainably and taking on responsibility for em- ployees, customers and partners, as well as for society and the environment, have long been fundamental principles of the FP Group. The integrated management system has been ensuring continuous improvement of performance here for almost 20 years now.

FP's corporate governance consists of the Supervisory Board and the Management Board. The Supervisory Board appoints the Management Board members and performs the duties required of it pursuant to prevailing law, the Articles of Association and the Rules of Proce- dure. It continuously monitors the Management Board's governance of the company and advises it regularly on company management.

The Supervisory Board has stipulated a skills profile for its composition:

• Business or management experience
• Not a former member of the Management Board and no supervisory board roles with competitors
• Knowledge or experience in the "digital communication" sector
• Knowledge of the target postal market, knowledge of B2B and business develop- ment
• Knowledge in the field of research and development
• Knowledge in the field of finance and ac- counting, controlling and auditing
• Knowledge in the fields of corporate gov- ernance/risk management/compliance
• Knowledge in the fields of M&A
• Knowledge of sustainability

The above criteria for the composition of the Supervisory Board were and still are met. The members of the Supervisory Board therefore collectively possess all the exper- tise, skills and experience necessary for the proper performance of their duties (GRI2-10).

Supervisory Board

A diversity plan regarding the composition of the Supervisory Board, considering aspects such as age, gender, nationality and educational or professional background, has not been developed or followed to date. The German Stock Corporation Act and the German Corporate Governance Code stipulate that the supervisory boards of listed companies should set targets for the proportion of women. The Supervisory Board would welcome a female or diverse Supervisory Board member and would nominate such a candidate preferentially given equal

suitability. However, gender and diversity are not the dominant selection criteria for Supervisory Board members in the Supervisory Board's view. The Supervisory Board has accordingly set a target of 0% for the proportion of women on the Supervisory Board for the period up to 30 June 2026.

Management Board

Based on the recommendations of the German Corporate Governance Code and in compliance with legal pro- visions, the Supervisory Board has defined a requirements profile for Management Board members that also takes diversity requirements into account. Therefore, the key criteria for selecting candidates for long-term succession planning are professional suitability for the area of responsibility, leadership qualities, past performance and industry expertise relevant to the area of responsibil- ity. In addition to the relevant professional qualifications, the Supervisory Board also pays attention to diversity when appointing Management Board members. The Supervisory Board would welcome a female or diverse Management Board member and would hire such a candidate preferentially given equal suitability. However, gender and diversity are not the dominant selection criteria for Management Board members in the Supervisory Board's view. The Supervisory Board has accordingly set a target of 0% for the proportion of women on the Management Board up to 30 June 2026. This target was met in 2022 and is expected to continue being met.

Management level

The company's Management Board has decided on a target for the proportion of women in the first and second management levels below the Management Board in accordance with section 76 (4) AktG.

As part of the Future@FP transformation programme and the associated reorganisation, the management levels have changed, especially with the introduction of business units. There are therefore two management levels within the FP Group: The heads of the business units and corresponding administrative functions within FP are defined as the first level below the Management Board and report directly to the Management Board.

The second management level below the Management Board comprises the heads of divisional and corporate departments; they report to the first management level.

The targets were set by resolution dated 23 Decem- ber 2021. The proportion of women in the first management level must be at least 10%. A target of at least 30% was set for the proportion of women in the second management level. As of 31 December 2022, the target of 10% in the first management level was achieved with 14%. In the second management level, the target of 30% was achieved with 32%. Both targets must be regularly reviewed and redefined no later than 30 June 2026. When making appointments to management positions, the Management Board ensures that the diversity targets are also met in the future (GRI405-1). There are no other disclosures to be made relating to the diversity plan.