Orell Füssli : Letter to shareholders

Orell Füssli

Dear shareholder,

Orell Füssli continued to grow as planned in the first half of 2024. The Security Printing Division was awarded major new orders, and Procivis won a call for tenders from a US authority against large international competition.

In the first half of the year, which is typically weaker than the second, Orell Füssli generated revenue of CHF 107.1 million (previous year:

CHF 105.0 million) and achieved an EBIT margin of 4.3% (previous year: 5.2%). As expected, the EBIT of CHF 4.6 million (previous year: CHF 5.4 million) was adversely affected by seasonal sales trends in book retailing and publishing, higher costs and the current product mix in Security Printing.

We achieved considerable market successes in the first six months of the year. The most significant of these include new customers and major contracts in the Security Printing Division and at Zeiser. Additionally, Procivis won a total of four new contracts from the public and the private sector. One of the customers is the U.S. Department of Homeland Security.

In book retailing, three more book stores were opened and the publishers published various new works in the first half of the year.

The Security Printing Division's major contracts for printing banknotes come from customers located in the Global South. Contrary to the trend towards

international central banks ordering banknotes at short notice, the printing works is now seeing an encouraging long-term planning horizon.

Following the first half of the year, the signs in the Industrial Systems division are also good. Zeiser has won several contracts in banknote serialisation and the order backlog is pleasingly high. The great interest in the Track & Trace system continues. The presentation of Zeiser's new solution for the real-time monitoring and traceability of products in the printing and packaging industry, which is now being pursued in addition to security printing, attracted numerous potential customers to the stand at drupa. Drupa is the world's largest trade fair for the print and paper industries and took place in Düsseldorf in June.

Subdued consumer sentiment continues to impact the retail trade. People in Switzerland have tightened their belts. Reasons for this include the continuing high costs for housing, health and mobility. Despite this challenging environment, the stationary and online book retailing business

of Orell Füssli Thalia AG, in which

Orell Füssli AG holds a stake, is going well.

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Orell Füssli

"Orell Füssli has consistently worked on its growth strategy

and increased sales in the first

half of 2024."

Dr Martin Folini, Chairman of the Board of Directors

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Additional stores were added to the bricks-and-mortar shop network in the first half of the year. Orell Füssli acquired the Rapunzel book store in Liestal in January and ensured that operations continued seamlessly with the same team. Schuler Bücher and Orell Füssli Thalia AG opened a new store together at Chur railway station in April. A third location in Aarau was opened in May. The new Orell Füssli bookstore in Aarau railway station complements the Orell Füssli Wirz and Orell Füssli Meissner branches.

The figures available for the publishers confirm that this area of the company is on track. The teaching and learning media programme is being prepared for the important months before the start of the new school year. The purely digital learning media introduced in 2023, myKV and myDetailhandel, are starting their second cycle. The licensing of the platforms is designed for the duration of the basic training courses, which last several years. Apprenticeships to become a commercial employee or a retail merchant are the largest apprenticeships in Switzerland in terms of numbers of students.

The 21st edition of the commercial edition of the Swiss Civil Code/Code of Obligations, a top seller from Orell Füssli's legal media programme and a key teaching aid in schools, was published at the beginning of the year alongside other books.

On top, the Orell Füssli commentary on financial market criminal law in Switzerland was published for the first time.

In June, the first event was held in a series of specialist conferences for legal practitioners on the subject of sports law. More than 50 specialist lawyers participated.

By establishing these series of events, Orell Füssli legal media creates synergies with the publishing business and opens up additional sources of income.

Just in time for this year's start of the prestigious Swiss cycling race, Orell Füssli published Globi's new adventure at the Tour de Suisse. Globi himself travelled to Vaduz for the departure of the race at the beginning of June.

At Procivis, the market launch of the Procivis One product and its further development are in full swing. The mentioned project for the

Orell Füssli

"The acquisition of new ­reference customers in security printing and at Procivis were highlights."

Daniel Link, CEO

U.S. Department of Homeland Security includes software modules for decentralised digital credentials. In total, 70 firms from around the globe competed for the tender, of which six were awarded a contract.

In the first half of the year, Procivis found a large and interested expert audience at the leading conferences on the topic of digital identities and security technologies in Washington, Berlin and Zurich.

The regulatory framework around digital identities is also developing positively.

In Switzerland, the National Council and the Legal Affairs Committee of the Swiss Council of States endorsed the Federal Council's bill to introduce electronic identity credentials. The bill is to be discussed in the Council of States before the end of the year.

In the EU, the eIDAS 2.0 Regulation entered into force in May. By 2026, all member states must make a digital identity wallet available to their citizens, which must also be accepted by companies. The pioneering and scalable software platform from Procivis meets the requirements of both eIDAS 2.0 and the Swiss eID ecosystem.

At this year's Annual General Meeting on 7 May, Orell Füssli AG's shareholders approved all the Board of Directors' motions. Dieter Widmer stepped down after 13 years on the Board of Directors and was thanked for his service with a round of applause. Pascale Bruderer was elected as a new member. The independent entrepreneur and former member of

the Swiss National Council brings her rich experience from several directorships on digital topics to our company. In a consultative vote, the more than 190 Orell Füssli shareholders present approved our report on non-financial matters, which was voted on for the first time.

From the comments at the AGM and the numerous conversations around the event, we conclude that shareholders share our newly defined corporate values and our strategy enjoys broad support. Various communication activities to anchor them in the organisation and with customers, partners and investors have been underway since spring this year. An example of this is the Group's redesigned websites.

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Orell Füssli

Orell Füssli achieved further successes in the implementation of its growth strategy in the first half of 2024 and is well on track to achieve the economic targets for the financial year. We expect Orell Füssli to grow in the mid to upper single-digit percentage range for the full year and thus to be in or above the communicated growth corridor. Based on our experience with the highly seasonal book retailing and publishing business, we assume a rise in revenue to the planned extent by the

end of the year. As already announced, the EBIT margin for the full year will most likely be slightly lower than in the previous year.

Dear shareholders, we would like to thank you for your loyalty and your trust in the efforts of our management. We would like to thank our customers and all partners for their great cooperation and also our employees for their untiring and valuable work.

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DR MARTIN FOLINI	DANIEL LINK
Chairman of the Board of Directors	CEO

Numbering boxes of Zeiser are used globally in security and banknote printing works.