Francotyp Postalia : Financial results for fiscal year 2023 Annual Report

ANNUAL REPORT 2023

Dear business partners and shareholders,

In this report, we inform you as usual about the course of business in the past fiscal year 2023. At the same time, we would like to look to the future of FP with you, because we believe that FP, with its 100-year company history, is well equipped to successfully master and help shape the challenges of an increasingly digital world.

Following the strong increase in revenue in the 2022 fiscal year, which was largely characterised by various non-recurring effects, the Management Board had planned to generate revenue in a range between EUR 245 million and EUR 255 million in the 2023 fiscal year. EBITDA (earnings before interest, taxes, depreciation and amortisation) were forecast to reach a range between EUR 28 million and EUR 31 million. As usual, these forecasts were based on stable exchange rates, which can develop positive or negative effects over the course of the year.

With revenue of EUR 241.8 million and taking account of negative FX effects totalling EUR 4.1 million, the revenue target was achieved at the lower end of expectations. EBITDA developed slightly better than expected - also due to non-recurring effects - and totalled EUR 31.0 million, or even EUR 33.4 million on a constant currency basis. In view of these figures, the fiscal year as a whole can be described as satisfactory.

In 2023, the business divisions had to deal with the challenges posed by the difficult economic environment, increased interest rates and high inflation in different ways. The Mailing, Shipping & Office Solutions division recorded a slight decline in sales compared to the previous year. Taking into account the non-recurring effect from the postage increase in the 2022 fiscal year, this results in a stable development. This shows that FP can successfully assert itself with its current product range in this otherwise declining market. A slight decline in revenue was also recorded in the Digital Business Solutions segment.

Here, the pleasing performance in most product areas was unable to compensate for the loss of a major customer in Output Management. And as expected, there was no repeat of the pandemic-related special mailings from 2022 in the Mail Services segment, meaning that a decline in revenue was also recorded here. To summarise, we can state that business performance was largely as expected.

FP is undergoing a process of transformation. The expansion of the digital product areas is intended to create the basis for not only compensating for the expected further decline in business with franking machines, but also for tapping additional growth potential for the future. With the further development of the product portfolio in this area, a starting point has already been created that now needs to be expanded quickly and purposefully.

As the new Management Board team, we will integrate the necessary transformation projects into a framework that allows for central management. The focus is on the key value drivers for the positive development of the respective business areas. By concentrating on these value drivers, we can use resources in a more targeted way and prioritise activities in order to implement the transformation projects and thus achieve an increase in value and sustainable management together with the team.

The business model provides a solid foundation for the planned transformation. Whereas in business with franking machines and in the Mail Services business unit the focus is on stabilising the top line, improving the cost structure and making the product range more sustainable through increased use of recycled components and overhauled machines (circular economy), the focus in the digital business is on growth, for which purpose many of the products were modernised significantly in 2023 already.

Foreword

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We are ready and motivated to continue the transformation of FP and write the next chapter in the company's 100-year history.

Carsten Lind's term of office as Chairman of the Management Board ended in spring 2024. We would like to thank him for setting the course in a challenging time and wish him all the best for the future. Friedrich G. Conzen is taking over as the new CEO and will play an instrumental role in FP's success in the coming years.

We would also like to take this opportunity to express our special thanks to all of our employees, whose commitment and identification with our common goals make FP's progress possible. The team is well positioned and will successfully master the challenges of the future.

We would be pleased if you would continue to accompany us on this journey, and we look forward to a joint dialogue with you.

Your Management Board

Friedrich G. Conzen	Ralf Spielberger
CEO	CFO

Foreword

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Report of the Supervisory Board of

Francotyp-Postalia Holding AG

(FP Group)

Dear shareholders and business partners,

The past 2023 fiscal year was also dominated by increasing digitalisation. Mail volumes continue to decline in many major markets, which is noticeable both in the franking machine business and in the Mail Services (freesort) division. The necessary transformation is beginning to show results, as the revenue and earnings contributions of digital products are increasing.

Supervisory Board and Management Board collaboration

In fiscal year 2023, the Supervisory Board performed the duties required of it pursuant to prevailing law, the Articles of Association and the Rules of Procedure, while continuously monitoring the Management Board's governance of the company and advising it regularly on company management.

The Management Board fulfilled its information and reporting obligations in full. It provided us with regular, prompt and detailed written and verbal information on all matters of strategy, planning, business performance, the risk situation, changes in risk and compliance relevant to the company and the Group. This also included information about where actual performance deviated from earlier targets and where business performance deviated from planning, including in the development of agreed ESG key figures. Furthermore, the Chairman of the Supervisory Board, the Chairman of the Management Board and the entire Management Board regularly exchanged information.

The members of the Supervisory Board always had adequate opportunities to critically assess the reports submitted and resolutions proposed by the Management Board and to make their own suggestions. In particular, the Supervisory Board was directly consulted about all decisions of fundamental importance to the company at an early stage and discussed these with the Management Board in detail. The Supervisory Board examined the company's objectives, risk situation, liquidity planning and equity situation in detail on several occasions. As part of this, the Supervisory Board was also consulted about key operating issues. Where Supervisory Board approval was required for decisions or action by the Management Board by law or in accordance with the Articles of Association or the Rules of Procedure, the

Supervisory Board members granted this after close examination and discussion.

Supervisory Board meetings

In the reporting year, the Supervisory Board held eight meetings, some of which were attended in person and some of which were held as video or telephone conferences as required. Our regular discussions addressed revenue and earnings performance at Francotyp-Postalia Holding AG and the Group, as well as the financial position and results of operations. The Supervisory Board also dealt with the ongoing integration of the operating units of the Azolver Group acquired in 2022.

Another topic at the meetings was the introduction of new ERP/CRM software. Successful further development of the IT landscape will be one of the main challenges in the coming fiscal year. In addition, progress in its implementation as well as the implementation of the share buyback programme were addressed.

The Supervisory Board also considered the 2022 annual and consolidated financial statements, together with the combined management report including the separate non-financial declaration and the combined declaration on corporate governance by the Management Board and the Supervisory Board. Quarterly reports and the half-year report were discussed with the Management Board at length prior to publication.

The Supervisory Board also examined the monitoring of the accounting process, issues relating to the effectiveness of the internal monitoring system and its further development, the effectiveness of the risk management system and the internal audit system, compliance management and the development of the FP Group's strategic compliance measures. In addition, the Supervisory Board examined Internal Audit's audit findings, audit processes and audit planning for fiscal year 2023. In this context, the Supervisory Board also issued its own instructions to the internal audit department and thus was satisfied of the appropriateness and effectiveness of the internal control system. Another key topic was the current status of implementation of the FUTURE@FP programme.

The Supervisory Board also discussed preparations for the Annual General Meeting on 14 June 2023. The Supervisory Board approved the Management Board's decision to hold the event in person. The Supervisory Board also discussed the company and investment planning for the 2023 fiscal year and set the target figures (KPIs) for the variable remuneration components (annual bonus) of the Management

Report of the Supervisory Board

4 FRANCOTYP-POSTALIA HOLDING AG Annual Report 2023

Board members. Together with the Management Board, the Supervisory Board prepared the remuneration report for fiscal year 2023 in accordance with section 162 AktG and will submit it for approval to the Annual General Meeting 2024. There was also a focus on corporate governance, the internal control system (ICS) and compliance.

In fiscal year 2023, after reviewing the recommendations and suggestions of the current version of the German Corporate Governance Code (GCGC), the Management Board together with the Supervisory Board resolved to submit and publish the declaration of compliance. The latest declaration on corporate governance in accordance with section 161 AktG, which was submitted on 17 January 2024, is available on the FP Group's website. The Management Board and Supervisory Board also report on corporate governance at the FP Group in the declaration on corporate governance.

There were no transactions with related parties subject to approval or disclosure requirements in the reporting year. Furthermore, there were no conflicts of interest involving Management Board or Supervisory Board members that would have had to have been disclosed to the Supervisory Board.

Members' attendance rate at meetings of the Supervisory Board was 100%.

The members of the Management Board attended Supervisory Board meetings. At times, the Supervisory Board also regularly met without the Management Board. Agenda items at these meetings related either to the Management Board itself or to internal Supervisory Board matters.

Members of the Supervisory Board are individually responsible for participating in training and further development activities required for their jobs, for example relating to changes in legal frameworks and new technology. They are supported by the company in doing so. Informational events are attended where necessary for targeted training.

No committees were formed because the Articles of Association prescribe that the Supervisory Board must consist of three members. In accordance with section 107 (4) AktG, the Supervisory Board is also the Audit Committee.

Audit of the annual financial statements and consolidated financial statements

In accordance with the statutory provisions, the auditor, KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, was appointed by the Annual General Meeting on 14 June 2023. The Supervisory Board issued the audit mandate to the auditor elected by the Annual General Meeting for the 2023 fiscal year and set the auditor's fee. Prior to this, it reviewed and assessed the selection, independence, qualification, rotation and efficiency of the auditor and the services performed by the auditor and reviewed the quality of the audit.

The Supervisory Board regularly exchanged information with the auditor during the audit.

The consolidated financial statements of Francotyp- Postalia Holding AG for the fiscal year from 1 January to 31 December 2023 and the management report of the FP Group, which is combined with the management report of the company, were prepared in accordance with section 315e HGB in line with the International Financial Reporting Standards (IFRSs) as adopted by the EU. Both the consolidated financial statements and the combined management report include an unqualified audit opinion by KPMG. As the auditors responsible for the audit, Jack Cheung has signed since fiscal year 2023 and Sascha Klein since fiscal year 2020.

The auditor conducted the audit in compliance with section 317 HGB and the EU Audit Regulation, taking account of the German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW) as well as the International Standards on Auditing (ISA). The auditor also found that the Management Board has established a suitable information and monitoring system, the design and use of which is appropriate for identifying developments that threaten the continuation of the company at an early stage.

The financial statement documents and the findings from the audit for fiscal year 2023 were discussed at length at the Supervisory Board meeting on 18 April 2024. The auditors reported on the key findings of their audit and in particular on the key audit matters described in the respective auditor's report, including the audit procedures performed. It also provided information on its findings regarding the internal control system in connection with the accounting process and the early risk detection system and was available for additional questions and information. There were no objections raised after auditing and discussing in detail the consolidated financial statements and the combined management report in the Supervisory Board. The Management Board prepared the consolidated financial statements. The

Report of the Supervisory Board

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Supervisory Board approved the consolidated financial statements on 30 April 2024. This also applies to the sustainability reporting.

In addition, the auditor examined the remuneration report jointly prepared by the management board and the supervisory board in accordance with section 162 of the German Stock Corporation Act (AktG). In the auditor's opinion, the information required by section 162 (1) and (2) of the German Stock Corporation Act (AktG) has been provided in all material respects in the remuneration report.

Francotyp-Postalia Holding AG's dividend policy remains essentially unchanged. The aim is to allow shareholders to participate in the positive development of the company. Due to the ongoing transformation, the Management Board proposed to the Supervisory Board that no dividend be distributed for fiscal year 2023 again and that the retained earnings of Francotyp-Postalia Holding AG of EUR 41.0 million be carried forward to new account. The Supervisory Board agreed with this proposal.

Personnel changes in the Management Board and Supervisory Board

Lars Wittan has been a member of the company's Supervisory Board since November 2020. As Chief Investment Officer of Obotritia Capital KGaA, his membership was based on a proposal by the major shareholder Obotritia Capital KGaA, which held 28.01% of the shares in the company. Obotritia sold its shares in March 2023 and Mr Wittan resigned from office with effect from the end of the 2023 Annual General Meeting. The Management Board and the Supervisory Board would like to thank Mr Wittan for his commitment.

At the Annual General Meeting in June 2023, Johannes Boot was elected as a new member of the Supervisory Board until the Annual General Meeting in 2025. This corresponds to the remaining term of office. Mr Boot is Investment Officer of Lotus Investment Management and thus represents the new major shareholder Olive Tree Invest GmbH.

In February 2024, Mr Boot also took over as Chairman of the Supervisory Board. The Management Board and Supervisory Board would like to thank Dr Alexander Granderath, who has been Chairman since 2020.

The Supervisory Board appointed Friedrich G. Conzen as a member of the Management Board and at the same time as Chairman of the Management Board with effect from 1 March 2024. Mr Conzen succeeds Carsten Lind, who is leaving the Management Board at the same time. The Supervisory Board would like to thank Mr Lind, who has made a significant contribution to the growth of the digital business and the transformation of FP with his drive and vision, and wishes him all the best for the future.

On behalf of the Supervisory Board, I would like to thank all members of the Management Board, employees and the employee representatives of Francotyp-Postalia Holding AG and all Group companies for their hard work and commitment and constructive collaboration in the past fiscal year.

Berlin, 30 April 2024

For the Supervisory Board

Johannes Boot

Chairman of the Supervisory Board

Report of the Supervisory Board

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Addendum to the Report of the Supervisory Board of Francotyp-Postalia Holding AG (FP Group)

KPMG audited the annual financial statements prepared by the Management Board in accordance with the provisions of the German Commercial Code (HGB) for the financial year from 1 January to 31 December 2023 and the combined management report of Francotyp-Postalia Holding AG and the FP Group. The auditor issued an unqualified audit opinion. Jack Cheung has signed as the auditor responsible for the audit since the 2022 financial year and Sascha Klein since the 2020 financial year.

The financial statement documents and the audit reports for fiscal year 2023 were discussed at length at the Supervisory Board meeting on 8 May 2024. The auditor reported on the key audit findings and, in particular, the key audit matters described in the auditor's report, including the audit procedures performed. The auditor was available to answer additional questions and provide further information. Following the audit and comprehensive discussion of the annual financial statements and the combined management report by the Supervisory Board, no objections were raised.

The Supervisory Board approved the annual financial statements on 8 May 2024. The annual financial statements of Francotyp-Postalia Holding AG are therefore adopted.

Berlin, 8 May 2024

For the Supervisory Board

Johannes Boot

Chairman of the Supervisory Board

Report of the Supervisory Board

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FP Share

Highly volatile stock markets

In 2023, global stock markets were characterised by huge fluctuations. Whilst prices rose significantly at the start of the year, negative reports from the banking sector in the USA and Europe resulted in a temporary decline in prices. The markets recovered and then demonstrated positive performance until the summer, followed by several months of correction. In addition to inflation and the monetary policy of central banks, fears of a recession and uncertain corporate outlooks, the enduring war in Ukraine, the conflict in the Middle East and further international tensions had an impact on prices. Prices scrambled up again at the end of the year and the indexes showed solid price gains for the year as a whole.

The Euro Stoxx 50, the US S&P 500 and the US Dow Jones benchmark index were all up by the end of 2023, whereby tech shares were in particularly high demand. The US Nasdaq technology index rose by around 50%. Share prices also increased in Germany over the year as a whole. The German DAX stock index reached its low for the year of 14,069 points at the start of the year. After increasing by around 1500 points, negative reports in March resulted in a decline in prices in the German benchmark index. The DAX subsequently recovered and, despite increasing base rates, rose to a yearly high of 16,470 points. In September 2023, the European Central Bank had increased the base rate for the tenth time in a row in order to counteract rising inflation. The DAX lost much ground and, by the end of October, reached a similarly low level to the spring at around 14,700 points. The final weeks of 2023 followed a very positive trend; the benchmark index recorded significant price gains in November and December and ended the year at 16,752 points. Looking at the year as a whole, this corresponds to an increase of 20%.

The performance of the SDAX small cap index was also positive in the 2023 stock exchange year; growth of 17% was, however, somewhat lower than the benchmark index. The SDAX began the year with 12,085 points, then continued to gain ground and was subsequently as volatile as the other indexes. At the end of October, it reached its low for the year of 12,076 points, before significant price increases in the following two months. The small cap index achieved its high for the year of 13,960 points on the final trading day of 2023.

FP share with a weak price performance

The FP started into 2023 at EUR 3.44. In January, the price increased and, at the start of February, reached its high for the year of EUR 3.71 on the basis of the closing price. The price subsequently declined throughout the course of the year. The share reached its low for the year of EUR 2.74 at the end of December. The FP share ended the year at EUR 2.84. This corresponds to a decrease of around 18% for the year as a whole compared with the end of 2022.

The shares of the two listed competitors from Europe and the US performed positively. Both shares recorded double-digit price gains for the year as a whole. On a whole-year basis, the FP share therefore performed more weakly than its peer group. This is possibly due to the fact that FP is still undergoing a transformation process and many investors are still being cautious. In its communication with the capital market, FP will therefore focus on demonstrating the potential to be gained from the continuing transformation process. The company is doing all in its power to be successful on a sustained basis and for this to be reflected in the share price in the medium term.

In view of the decline in prices, trading with FP shares was rather low. The volume of FP shares traded daily on the Xetra platform decreased to an average of 4,045 shares in comparison to the previous year (previous year: 8,723). The highest figure - 43,428 shares traded on a single trading day - was reached on 6 December. On Tradegate, the average daily trading volume was 3,732 shares (previous year: 4,626).

Equity analysts recommend FP share as buy

In 2023, the FP share was again covered by the following three analyst companies: Baader Bank, Warburg Research and GSC Research. All analysts recommend buying the share; their average price target is EUR 5.83. Compared with the current price, the high price potential of the share is again confirmed. Two analysts amended their price targets to EUR 6.30 and EUR 6.20 at the end of the year. One analyst puts the price target at EUR 5.00.

The total of voting rights at the end of the fiscal year remains unchanged at 16,301,456. Between 2 November 2022 and 1 November 2023 inclusive, FP conducted a share buyback programme. The total volume of shares acquired within the scope of this share buyback amounts to 420,210 shares. This corresponds to an arithmetical share of 2.58% of the share capital of Francotyp-Postalia Holding AG.

The average purchase price of each share was EUR 3.35. In total, shares totalling EUR 1,407,708.89 were bought back. In the 2023 fiscal year, 273,696 shares were acquired at an average price of EUR 3.41. In 2022, FP had acquired 146,514 shares at an average price of EUR 3.24.

The company itself therefore held a total of 677,603 shares or 4.16% at the end of the year. The institutional investors come mainly from Germany and Luxembourg. At the end of 2023, there were the following notifications from institutional investors in line with section 40 (1) WpHG:

NOTIFICATIONS IN LINE WITH SECTION 40 (1) WPHG

Olive Tree Invest GmbH / Lotus FamilyInvest AG		25.34% (notification dated 4 May 2023)
Active Ownership Fund SICAV-FIS SCS and Active Ownership		10.31% (notification dated 7 October 2019)
Investments Ltd.

Saltarax GmbH

Ludic GmbH

Magallanes Value Investors Universal-Investment-Gesellschaft

5.00% (notification dated 11 November 2020)

3.51% (notification dated 15 June 2013)

3.26% (notification dated 22 May 2018)

3.19% (notification dated 12 November 2020)

Obotritia Capital KGaA sold all of its shares (previously 28.01%) with effect from 7 March 2023. The new major shareholder is Olive Tree Invest GmbH, which now holds 25.34% of the shares in the company. On 31 December 2023, 60.2% of the shares were in free float.

As at 31 December 2023, there is thus the following shareholder structure:

FP Annual General Meeting

Once a year, the Annual General Meeting offers all FP Group shareholders the opportunity to engage in direct dialogue with management. In 2023, FP's Annual General Meeting was held as an in-person event for the first time since 2020.

Some 44.3% of the voting share capital was represented at the Annual General Meeting in Berlin on 14 June 2023. All items on the agenda were approved by a large majority.

Johannes Boot was elected by 90.5% of the votes represented at the Annual General Meeting as a new member of the Supervisory Board until the Annual General Meeting in 2025. This corresponds to the remainder of the regular term of office of the members elected by the Annual General Meeting in June 2021. An additional election was required because Lars Wittan had resigned as a Supervisory Board member at the end of the Annual General Meeting. Johannes Boot was elected as the new Chairman of the Supervisory Board during the Supervisory Board meeting on 6 February 2024.

Intensifying investor discussions

In fiscal year 2023, the FP Group continued to cultivate its IR activities. As in previous years, investor meetings took place in person, online or by telephone. This ensured that capital market participants were able to engage in open, transparent and regular discussions with the FP Group. FP's Management Board and Investor Relations team made use of one-on-one meetings and investor conferences to present the company.

The team took part in the spring conference (Equity Forum) in Frankfurt on 15 and 16 May 2023 and the annual German Equity Forum on 28 November 2023. The Management Board and Investor Relations team presented FP in front of numerous national and international investors.

The German Equity Forum is Europe's most important platform for equity capital financing for medium-sized enterprises. Following the release of quarterly figures, the FP Group again made use of conference calls to talk with investors. The associated presentations have been made available on the company's website for the benefit of all interested parties. Visitors and capital market participants can find all further relevant information on the company's homepage at www.fp- francotyp.com. Together with annual and half-year reports, the FP Group's quarterly reports, financial presentations and press releases can also be found here. All the latest developments, such as announcements about voting rights or directors' dealings, can also be found there.

During the 2024 fiscal year, IR activities will focus on explaining the business model, strategy and implementation activities in detail in order to demonstrate FP's potential.

For any inquiries, please contact the Investor Relations team by e-mail ([e-mail]) or phone on [phone].