KPS : Sustainability Report 2021-2022

KPS

SUSTAINABILITY REPORT

TABLE OF CONTENTS

1	INTRODUCTION	PAGE 3
2	THE KPS BUSINESS MODEL AND	PAGE 4
STRATEGY
3	THE KPS SUSTAINABILITY STRATEGY	PAGE 7
4	THE EMPLOYEES	PAGE 12
5	THE ENVIRONMENT	PAGE 16

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Sustainability Report

1. INTRODUCTION

1.1 Preliminary remark

With its Sustainability Report, KPS addresses its customers and business partners, its team of employees, its shareholders and all other stakeholders who are interested in the values and principles of the company.

KPS reports again on KPS AG and its subsidiaries for the reporting period 2021/2022 (1 Oct. 2021 - 30 Sept. 2022). Deviations are commented on accordingly. The 2021/2022 Sustainability Report is at the same time the non-financial Group Report of KPS Group in financial year 2021/2022 in the sense of Sections 315b, 315c in conjunction with 289c to 289e of the German Commercial Code (HGB). KPS does not follow any national or international guidelines for this non-financial Group Report, but is guided by the criteria and standards of the German Sustainability Code (GSC).

Sex form

For reasons of simplification, we only use one gender form. All other gender forms are explicitly included as well.

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SUSTAINABILITY REPORT

2. BUSINESS MODEL AND STRATEGY

2.1 Digital challenges and technological change

In order to remain successful on the market in the long term, companies are faced with the challenge of having to react ever faster to technological change with digitalisation strategies and by digitally transforming their company.

Nearly all divisions and processes are affected by this: the company strategy, internal processes, logistics, merchandise management, business processes, marketing, innovation, IT, IT security, human resources and especially changing customer behaviour.

For example, companies are moving entire business processes from on-site systems to cloud solutions or to hybrid on-site/cloud structures. The volumes of data available are growing exponentially. These need to be structured, analysed and evaluated. In addition, software systems are becoming increasingly complex.

At the same time, technological opportunities are changing the behaviour and the needs of end consumers. Consumers are shifting their activities to online channels and are increasingly making purchases over the Internet. In addition, consumers expect goods and services to be available both in- store and online, and supply chains to function smoothly across all channels. The corona pandemic has further strengthened these effects.

Companies must therefore be in a position to react promptly to both technological change and changing customer behaviour. To do so, they need a customised digitalisation strategy with which the main company and business processes can be holistically digitalised, transformed and further developed. With such a proactive digitalisation strategy, companies can actively shape change and use it positively for their overall company strategy and in competing.

2.2 Business activity

The core of KPS's business activities is to develop individual digital transformation strategies for companies, to implement and provide the respective technologies and to support companies in their implementation. This is based on the innovative Instant Platforms products of KPS, which provide companies in the retail sector with turnkey solutions.

KPS pursues a holistic "end-to-end" approach that encompasses all the important components of digital transformation:

Digital Strategy

• Development of the digitalisation and transformation strategy for companies

Digital Customer Interaction

• Strategies, solutions, developments and implementation in the field of e-commerce,e-commerce shops and online trade

Digital Enterprise

• Digital transformation of ERP systems and business processes

KPS positions itself as a partner for its customers and supports them holistically with the digital transformation of business processes and ensures that its customers are optimally positioned with their IT, system and software landscapes.

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SUSTAINABILITY REPORT

2.3 Company

Founded in 2000, KPS is one of the leading consulting firms for digital transformation processes in the retail sector with around 1,200 internal and external consultants and sales of EUR 179.5 million in financial year 2021/2022. The company has its own offices in nine European countries and generated 58.3% of its consolidated revenue outside Germany in financial year 2021/2022.

KPS Group focuses on companies in the retail sector. This includes in particular the fashion, food, furniture and consumer goods segments.

KPS has been able to successfully expand its target audience in recent years and has won and successfully implemented many projects outside its core industry in the areas of insurance, logistics, energy, services, machinery and plant engineering.

2.4 Business model

The main pillars of the business model are listed below.

End-to-end approach

With its solutions, consulting expertise and products, KPS supports companies holistically with an "end- to-end" or "one-stop-shop" approach to the issues and challenges of the digital transformation of strategies, processes, IT landscapes, applications, supply chains/logistics, customer relationships, e- commerce, omni-channel and technologies.

Customers can be accompanied throughout the entire digital transformation - digital strategy, digital customer interaction, digital enterprise. Projects can thus be realised faster, more efficiently and at significantly lower costs.

Technology openness

KPS is not tied to a single technology when designing digitalisation solutions. Rather, KPS works with various partners, such as SAP, Spryker, Adobe, Intershop and Open Text. SAP solutions are widely used in the core industry of retail in the area of ERP. Accordingly, SAP solutions are often used for digital transformation projects.

Turnkey platforms ready for immediate use

KPS has developed its project management method "KPS RapidTransformation," which has proven itself many times over the years, into the platform approach "Instant Platforms." On the basis of current technologies and software solutions, KPS markets standard platforms for digital transformation that are tailored to various industries, can be used immediately and at the same time allow a high degree of customisation according to customer needs. With its "Instant Platforms," KPS can realise the digital transformation for companies even faster and provide them with real added value.

Remote approach

The Instant Platforms products enable KPS to significantly reduce the number of on-site consultants and perform many activities remotely or centrally from the KPS design centres.

Flexible structures

KPS's business activities are mainly to carry out transformation projects. With the use of Instant Platforms products, the number of consultants working at clients' locations can be reduced.

However, the use of consultants in projects remains at a comparatively high level. This means that expenses for consultants are the dominant cost factor for KPS Group. KPS uses service providers and freelancers in order to be able to quickly and flexibly adjust the number of consultants to the current project volume. This enables the company to react quickly to changing customer needs.

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