The Progroup magazine

Dear readers, dear Progroup partners, The rapid advance of digitisation presents one of the great challenges of our time. Right from day one, we at Progroup have always been interested in the opportunities that the technology offers: NETWORKING MEANS not just closer contact with our customers, but also MORE EFFICIENT , better COOPERATION in a network. With appropriate analysis, exchanging data WITH MARKET PARTNERS produces a differentiated picture of the respective markets, AND this FACILITATES many BUSINESS DECISIONS . PROGROUP has embraced digital processes from the outset and consistently PROMOTES DIGITAL TRANSFORMATION with its customers. But we can also see that many medium-sized businesses are rather reluctant to go down this path. But the industry is now really evolving: consumer habits, procurement channels and logistics are changing. Now is the time to scrutinise existing structures and measures IN ORDER TO realise the digital potential and DEVELOP new BUSINESS MODELS for the future. This includes making use of platforms. In the consumer sector, an economy has already become established for these sales platforms and marketplaces and is now also becoming increasingly widespread in the B2B sector. B2B buyers are also changing their behaviour and therefore the sales, whose focus is becoming buyer-centred. WE ARE CONFIDENT : If you make data-driven decisions, you will improve your chances of successfully negotiating the path to this future. THE FUTURE LIES IN digitally oriented interaction with the customer. Changing sales and the opportunities of THE PLATFORM ECONOMY are examined in this edition of Profil - and are one of our contributions to stronger networking with our customers and market partners. Jürgen Heindl, Chief Executive Officer, Progroup AG Maximilian Heindl, Deputy Chief Executive Officer, Progroup AG 3

“We overcame lots of technical boundaries because we were able to trust each other.” Edmund Bradatsch WE MOURN EDMUND BRADATSCH It is with great sadness and deep gratitude that we bid farewell to a close friend of the family, a long-time companion of Progroup and a tremendous human being. As an engineer and machine designer, Edmund Bradatsch enjoyed a long affiliation with us for more than a quarter of a century. With his infectious confidence, willingness to take calculated risks and insatiable passion for innovation, he was a congenial partner to Progroup. He was a man with whom we could break new ground and take risks with complete confidence. Whether it involved progressive automation, networked manufacturing or the world’s widest machine of its type, he took great delight in rising to the challenges that we shared and was not afraid to push the boundaries of what was technically possible. Over many years of working together, he helped to turn ambitious targets and enterprising visions into pioneering technological achievements for which we are very grateful today and from which we will continue to benefit in the future. Edmund Bradatsch made a lasting impact on how Progroup developed and also enriched our lives away from the corrugated board industry as a quick-witted, funny and kind-hearted human being. We will miss him very much. 5

29 44 ERA TION 2 COOP 2.1 Friends Progroup relies on enduring and trust-based cooperation with all stakeholders _____________________________________________________________________________ 24 2.2 Digitisation opens up potential Lars Engel, managing director of BHS Corrugated, on innovative solutions for the corrugated board industry _________________________________ 26 2.3 Focus on promotion If you promote and support talent, you safeguard the success of your business ___________________________________________________________________________________________________ 29 2.4 Ambitious, empathetic, successful Portrait of Progroup employees ________________________________________ 32 2.5 Partnership is the key to success Michele Lancellotti, CEO of Imbal Carton, on the Italian packaging market _______________________________________________________________ 34 3.1 Children ask questions, Progroup answers What the girls and boys of Progroup employees always wanted to know _____________________________ 38 3.2 The network perspective The digital transformation is creating new business models and sales potential __________________________________________________________________________________ 40 3.3 Future-proof thanks to constant growth Progroup’s winning formula _____________________________________________________ 44 3.4 Relaxing among wild animals Silz Wildlife Park is an attractive tourist destination for young and old ________________________ 48 3 FAS CINA TION 7 GROWTHCONSTATHANKFUTURE-

GROWTH IN E-COMMERCE IN THE RETAIL TRADE IN 2020 NORTH AMERICA 32% WEUR 26% 29% EEUR Average global growth in 2020: 28% Source: Vision Hunters LATIN AMERICA 37% 20% MENA ASIA PACIFIC 26% KRYSTALS “The British market is currently char- acterised by a great level of demand which would be difficult to cater for even under normal circumstances. If you also factor in the challenges posed by the Covid pandemic and the effects of Brexit, then you can see how difficult and complex a path we have to tread. The packaging park in Ellesmere Port allows us to respond quickly and also overcome such unusual problems.” The European pulp and paper industry turned over € 90 billion in 2019. 181,500 workers were employed in the pulp and paper industry in the 18 CEPI member states in 2019. 9 Arron Shingdia, Krystals Managing Director on the current market conditions MARKET FIGURES Sales of recycled containerboard (RCCM) increased by 3 % compared to 2019 across Europe. According to the CEPI, the demand was stimulated by the high level of private consumption and the low availability of primary fibre papers.

IN NOVA TION Innovation is a byword for our relentless quest to push technological boundaries and set new benchmarks. It is the core and foundation of Progroup’s successful business model: Manufacturing a bulk commodity using state-of-the-art technology so that customers receive reliable deliveries at low cost, even for very small orders. In doing this, we rely on networking and data-driven production. 11 1

E Digitisation and customers are changing marketing and sales The internet is the most important decision-making tool The crisis has increased the pressure to become more agile and digital, states Peter F. Schmid, CEO of the B2B platforms “europages.de” and “wlw.de”. As well as reviewing internal procedures, the focus is also increasingly on sales processes which have long been routine in the consumer segment: “Compared to the end consumer segment, the B2B sector has always been slightly more hesitant and conservative when it comes to digitising its procurement and sales channels via platforms, for example. But even before coronavirus came along, there were signs of a change which the pandemic has accel- erated exponentially,” says Schmidt. Lots of medium-sized businesses have discovered that digitisation starts with just small, but effective steps: “The coronavirus crisis has also forced many companies, even con- servative ones that tend to operate in a rather traditional way, to digitise their marketing and sales, which means presenting what they have to offer online and showcasing them- selves,” Schmidt has observed. The platform operator noticed this directly when the established supply chains collapsed and new supply sources needed to be found at the start of the pandemic: “This resulted in a huge increase in traffic on our platforms.” At a time when companies are unable to exhibit their products at trade fairs or present them directly in face-to-face sales consultations, virtual market- places allow effective business links Innovation 13

ADDED VALUE IS KEY TO SUCCESS When the platform business is looked at in practice, it is frequently evident that success for all parties involved depends on the level of service and reliability. On the logistics portal of the DHL subsidiary Saloodo! GmbH buyer protection is very important: Here too all contracts are concluded with Saloodo! The platform only allows verified freight carriers to be contractual partners for companies. “We have various requirements that need to be met before a freight carrier can submit offers on our platform. Among others, they need to comply with DHL’s Code of Conduct,” explains Daniel Mahnken, spokesman for the start-up since 2017. This is a key factor for the success of platforms: Offering added value beyond just being a marketplace. Lumi also follows the principle of service maximisation: Among other features, customer orders are automatically converted into manufacturer-specific orders and invoices from every contracted com- pany are centralised in Lumi. This means that customers can find the invoices for different manufacturers in one place and in a standardised format. Transaction security has also been taken into account: Lumi uses the secure payment infrastructure of Stripe.com to forward payments on to the manufacturers. EXPLOIT POTENTIAL B2B marketplaces are still a long way off delivering the multi-billion sales that platforms in the B2C segment generate: In the joint study entitled “Customer Centricity as an Oppor- tunity for the Digital Breakthrough”, the VDMA and the management con- sulting firm McKinsey & Company examined in summer 2020 the extent to which the range of products and services has been digitised in the mechanical engineering industry. The conclusion was that the proportion of sales generated from digital platforms and value-added services is only around 0.7 per cent (roughly 6 billion euros) of total European mechanical engineering sales (around 850 billion euros). And this is despite the fact that in surveys networking with other market players is frequently cited as a benefit of the platforms and those surveyed expect a greater level of customer-friendliness, including when it comes to looking for similar products or services and thus saving time. Once again the USA is much more advanced here, as Saloodo! press spokesman Mahnken states: The study indicates that in Germany B2B platforms account for between 5 and 9 per cent of sales generated, but in the USA the figure is well over 50 per cent. “You can see what is still possible. In the USA, there really are platforms for all possible lines of business in every sector. In my opinion, the potential for B2B marketplaces is truly enormous.” The use of digital sales channels is far from an everyday reality

INTERVIEW WITH MAXIMILIAN AND JÜRGEN HEINDL Utilising the very best technologies and linking together all processes from and to the customer are part of Progroup's strategy. For Jürgen and Maximilian Heindl, this means constantly seeking and exploiting the opportunities for digital transformation. When you look at the current digital developments, which ones do you think are the most exciting for Progroup and your industry? Networking is usually portrayed in the context of data collection and analysis. What other benefits are there? JÜRGEN HEINDL Actually the full spectrum of networking. Technolog- ically linking together the machines, controlling them with artificial intelli- gence. This will change the way main- tenance is done, for example. In the B2B segment, the networking between us and our customers. This will increase and become more intelligent. Can you be more specific about this? J_H In our industry, roughly 80 per cent of all orders are repeat orders. If data from the B2C segment are inte- grated, there is the opportunity to make predictions about the demand for packaging and stabilise the produc- tion systems. MAXIMILIAN HEINDL In this context, it is essential for our customers to be networked more if they want to cater for nationwide tenders, for example. This will enable the capacity of the production systems to be utilised better. M_H The level of cooperation is improved. And this is not just down to the physical network in our pack- aging parks, but also the fact that you cooperate in interpreting the data and developments. J_H We come from the raw materials side in the supply chain, our customers from the packaging market side. It makes a great deal of sense to combine and link together these two perspec- tives so we can have a stronger presence together in the market. The better the information is, and the sooner it can be evaluated, the better you can then manage the overall construct. Progroup is known for being a trail- blazer for digital transformation within your industry. What is the current state of play? M_H From a historical perspective, we have come a very long way in the direct networking of the core supply chain and we also got our customers on board with us at a very early stage. So far the focus has been on digitising the core processes, from the receipt of orders to delivery. Attention is now turning to digitising the support pro- cesses. This is a major topic that we are investing a great deal of energy in so that we can become a fully digital company. This starts with digital work platforms, covers resource planning and extends right through to logis- tics: track & trace ensures that the customer knows exactly where their delivery is at all times. Digitisation is of course also changing sales. How do you see the prospects here? M_H When it comes to selling pack- aging, there is plenty going on. The industry is really evolving. People are considering what makes sense, what do I actually need to do? J_H We are seeing how consumer habits, the procurement channels, are changing logistics. A huge amount is changing at the moment, including on the sales side. The question that then arises is do I need somebody to sell a commodity product like the American box with colour printing on it or is it also possible for the customer to simply configure this online? What is the future for sales, what sort of advice needs to be “I am sure that within five years we will have established a European net- work of custo- mers and linked it together digitally.” Jürgen Heindl Innovation 17

Constantly consulting on the further development of digital sales activities: Maximilian and Jürgen Heindl “It is important to start the ball rolling now so you are ready later on. Digital sales, web- based sales, and platforms will play a much greater role.” Maximilian Heindl department is primarily responsible for the stability of the relationship with each customer. Its task in the future will therefore be to continue to support our customers when it comes to exploring new avenues. Where will we be in a year, where will we be in five years? M_H I think by next year not that much will have changed. The industry as a whole is currently extremely busy. Many will ask why they should bother with this when they are fully booked up until November. But times will change again. It is a strategic decision. It is important to start the ball rolling now so you are ready later on. Digital sales, web-based sales, and platforms will play a much greater role. If you require small quanti- ties, you will tend to follow this route and purchase your packaging very easily. Nobody wants to spend a long time looking at transport packaging. It is all about getting your goods to your home easily, quickly and inexpensively. I think in five years from now there will be established platforms which will account for a significant share of sales. J_H I am sure that within five years we will have established a Euro- pean network of customers and linked it together digitally. Innovation 19

CIRCULAR ECONOMY A key component for carbon neutrality is to have a circular economy that works. Papermaking produces various waste materials – for example rejects, flotation residues and sludges. These waste materials can be utilised straight away on site to generate energy. This makes double sense because half of these waste materials are biogenic, so of biological or organic origin, and therefore carbon-neutral. If the waste materials are incinerated on site in a power plant for refuse-derived fuels, for example, then they do not need to be transported to other sites. But it is not just the waste materials that can be utilised. The waste water also contains potential energy. It can be used to produce sewage gas, i.e. methane. This can be captured, treated and utilised for energy. The gas can generate process steam for paper production or even drive a turbine. The plant’s own biogas can thus replace a substantial part of the fuel that is needed to supply energy. Rejects are the dirt residues which are produced during recycling of recovered paper and need to be disposed of in order to prevent disrup- tion to the process and any deterioration in the quality of the paper. Flotation residues are residues of printing ink that are removed from the recovered paper during paper recycling. The fibres attract the water and the water-repellent printing ink breaks off. Sludges are the waste materials that are produced during waste water treatment and need to be disposed of. They mainly contain water as well as organic matter and minerals. Innovation 21 PLANTS EU TBIOGENIC RAW MATERIALS generating energy, for example.TMODERN GAS-FIRED POWER Another option is modern gas-fired power plants. If gas is used for gener- ating electricity, this replaces coal-fired power from the grid. Gas-fired power plants are flexible and can make a vital contribution to the stability of the grid. Gas as an energy source can be utilised in a paper factory in two ways: Firstly to generate process heat and steam and secondly also to generate electricity. Among the fossil fuels, gas is one of the fuels that emit the lowest emissions. According to the Federal Environment Agency, the average CO₂ emissions when a gas-fired power plant generates elec- tricity are 399 grams per kWh. The figure for coal is 835 grams and for lignite it is 1,137 grams. Modern gas-fired power plants can therefore help to further reduce the CO₂ emissions of a paper factory. Despite all these benefits, using gas is only a temporary solution. This is why modern gas turbines are already prepared for using hydrogen. Modern refuse-derived-fuel power plants can already incinerate a wide range of reusable materials today. The higher the fraction of biogenic raw materials, the closer you get to achieving carbon neutrality. For example, it is also possible to buy wood chips and waste wood in the market. If renewable trees from sustainably managed forests are used, the carbon cycle is neutral. The advantage of biomass is that it can be used flexibly. This means even when solar and wind power are unavailable for CO²

COOP ERA TION The trust-based cooperation with our customers, employees and partners is crucial to Progroup’s success: Without close cooperation there is no innovation that we can develop together with suppliers, and also no functioning, team- based working relationship. The markets are changing ever faster. Thanks to our packaging park model, we are a key innovator of these changes: Today we are practising and experiencing more cooperation than ever before. This is allowing us to grow consistently along with all our partners. 23 2

Carolin Bollinger Location Marketing Officer, Progroup AG Witold Kosmowski Mayor of Strykow As a company that operates several sites, Progroup is a part of many towns and communities in Central Europe. As a good neighbour, we want to make a contribution here. This is why we are delighted to get involved in public life by providing long-term support to projects that focus on supporting children and young people. These may be partnerships in the field of education, specific support for disadvantaged children and young people, or projects to benefit nature and the environ- ment. Examples of this include supporting the junior and youth fire brigades in Sandersdorf-Brehna and Bitterfeld-Wolfen. Ralph Kästel Accenture Strategy & Consulting As an integrated transformation partner for Progroup’s commercial division, we value the very focused and straightforward working relationship. The great moti- vation among Progroup colleagues to continuously improve makes our fledgling partnership better every single day. We very much look forward to continuing our collaboration, driven by our shared passion to deliver innovative solutions, a forward-looking mindset and mutual respect. For the authorities in Stryków, it is an extremely prestigious honour that such a resilient and stable partner as Progroup wants to continue to develop by opening another corrugated sheetfeeder plant in the region. I hope that our cooperation will continue to satisfy both parties, not just from an economic point of view, but from a social perspective too. Prof. Dr. Armin Willingmann Economics Minister of the State of Saxony-Anhalt The PM3 paper factory – one of the most modern and highly efficient in the world – typifies an […] encouraging trend: Saxony-Anhalt is evolving to become a state for the technologies of the future in which as well as technical innovations high- quality jobs are also being created. Cooperation 25

EMBRACING DIGITISATION AND NETWORKING “Digitisation is opening up lots of new potential. There is a real demand for networking and platform solutions. In a ranking list compiled in 2019 by Germany's Wirtschaftswoche business maga- zine, BHS Corrugated was ranked 4th among the most innovative medium-sized enterprises in Germany. You do not achieve that by just limiting yourself to traditional mechanical engineering. We really lead the way with the modules in our iCorr® Universe, which are also used in lots of places at Progroup and help to increase efficiency there. iCorr® is the umbrella brand covering our digital solutions. With iCorr® Operations Support, for example, lots of parameters such as production and maintenance data or process and con- sumption data are digitally monitored around the clock virtually in real time. For a completely new corrugator, for example, roughly 3,700 measurement points are constantly monitored by up to 400 rules for intelligent alarms. The evaluation is done either by the customer or by the BHS Corrugated help desk, as required. If an unusual value is detected, for example the tempera- ture, an instant decision can be made on whether immediate action needs to be taken or the issue can wait until the next scheduled maintenance. The system detects this data every few seconds, not just once a day or even hourly. This allows the risk of production stoppages to be identi- fied at a very early stage. Downtimes are reduced to a minimum.” LONG LIFE CYCLE, ENDURING PARTNERSHIP “If we want to be successful as a company, we need to make our customers successful. It is not enough for us just to install a cor- rugator. We strive to develop an enduring partnership over the full life cycle. The example of our first collaboration with Progroup demonstrates this. This began back in 1992 when the founder Jürgen Heindl was looking for a corrugator machine for his first plant in Offenbach and chose us to be his partner. After 16 years of operation, the first joint corrugator was relocated in 2008 to the corrugated sheetfeeder plant in Ellesmere Port near Liverpool and completed another ten years of service there. In the 26 years of production in total, the corrugator pro- duced around five billion square metres of corrugated board. This is roughly half the quantity of corrugated board that is pro- duced in the whole of Germany each year.” VIRTUAL SUPPORT FOR EFFICIENT MAINTENANCE “We also provide better support to our customers with our iCorr® Assist Glasses. These are already being tested at Progroup. They enable our customers to bring the experts from BHS Corrugated directly to their corrugator machine. The iCorr® Assist Glasses portal then allows faults to be fixed jointly with our experts, but also with the company’s own, internal specialists. Our customers can also access the Maintenance Cloud to make maintenance more efficient: The system automatically detects what the machines require and assists with resource planning. In addition, with the iCorr® Shop we offer an individual ordering solution for each customer. The replacement parts fitted in the company’s own machines along with technical documentation can be accessed with just a few clicks.” Cooperation 27 Home About Contact

FOCUS ON PROMOTION IF YOU IDENTIFY AND SUPPORT TALENT, YOU SAFEGUARD THE SUCCESS OF YOUR BUSINESS It is an asset that does not appear on any balance sheet, but having good personnel is crucial to the success of any business. At the same time, it is the ultimate factor in short supply. This is why companies do everything they can to recruit the right employees, train them and retain them over the long term. The headlines were dominated for a long time by the issue of further training and talent management. “Lifelong learning” was regarded as the magic remedy for overcoming the challenges of digitisation and tackling the shortage of skilled workers. However, the subject has been out of the public eye for a little while now. But futurologist Heiko von der Gracht thinks this will only be temporary. In the modern age, which is characterised by rapid change, companies of all sizes increasingly need to integrate on-the-job training in a sustainable way. “The ongoing pandemic may have caused on-the-job training to temporarily take a back seat during a crisis. But it has also massively heightened awareness of digital skills,” says the Professor of Futurology at the School of International Business and Entrepreneurship (SIBE) at Steinbeis University with confidence: “In the medium term, an investment drive and targeted training measures across the board should be expected.” Just of companies have implemented skills-based talent strategies such as skills management and pay for skills.* Cooperation 29

EVERY EMPLOYEE IS TALENTED Professor Karlheinz Schwuchow from the Center for International Manage- ment Studies at Bremen University of Applied Sciences has examined what successful companies do differently when it comes to talent manage- ment: “In the past, the majority of companies have equated talent with high potential to managers or junior managers.” In a departure from this attitude and in light of the shortage of skilled workers, the whole workforce is now increasingly being seen as the target group for talent management. Talent is regarded as a gift that every employee has and represents potential that the company can make use of. “This approach really does embody appreciative and value-adding lead- ership and is a way to produce more committed employees and better business performance – and as a result also to achieve greater profitability over the long term,” says Schwuchow. This means that the essence and there- fore the key asset of a company are its employees. There is a special role to play for the talented individuals in a company who occupy key positions that are absolutely vital for creating a competitive advantage. For these key positions in particular, it is essential to ensure that the personnel manage- ment has a long-term, strategic focus. Contented employees rarely change employer and a low level of staff turn- over automatically leads to a closer business relationship with customers. THE HUMAN BEING IS EXTREMELY IMPORTANT This strategy is the basis for Human Performance Management (HPM) at Progroup. “The human being is extremely important to us,” explains Christian Dietrich, head of HR devel- opment. “Strengthen strengths” – the HPM department uses this motto to plan individual career paths and focus consistently on promoting people “Collaboration in digital worlds has become more established. In the next three years, software-based perfor- mance review analyses will become part of everyday training, even for smaller companies.” Heiko von der Gracht, Futurologist of the HR leaders surveyed want to harmonise the structures in HR with the corporate culture.* with different talents. This is done at Progroup through close collaboration between the HR business partners and the respective managers. Every manager regards themselves as the “primary personnel developer”, nomi- nates the candidates for talent promo- tion, and is closely supported and ad- vised in this process by HR specialists. As part of employer branding, person- nel development is seen as a tool for retaining and motivating staff and is a crucial element for positioning in the recruitment market. This very much reflects the standard business truth that “The war for talent is over. Talent has won.” * Skills management is still in its infancy. The sixth edition of Mercer’s Global Talent Trends Study (2021) contains findings from more than 7,300 executives, HR leaders and employees and for the first time provides in-depth companion reports covering 23 regions in 44 countries. For the DACH edition of the Global Talent Trends 2020-2021, 55 HR leaders from Germany, Austria and Switzerland gave insights into their priorities for the coming year. Cooperation 31

” E G N E L L A H C E H T D E E N I “ PIOTR JAKUBOWSKI Head of PW04, PW07, PW10 plants on… … how he started at Progroup: “A headhunter encouraged me to apply for a job at Progroup. Up until this point, I had never had anything to do with the production of paper or corrugated board. I had previously spent more than 20 years working in the plastics-processing industry and at one time I was responsible for more than 500 employees. But on my very first visit to PW07 in Stryków I fell in love with the plant and in mid-2016 I started as operations manager at the PW10 plant in Trzcinica." ... his job: “In May 2020 I was appointed head of the two Polish plants and the PW04 plant in Rokycany in the Czech Republic. In this role, it is ex- tremely important to engage regularly with the other plant managers. I was therefore privileged to be able to visit almost all sites together with the Board. The management culture at Progroup is renowned for the fact that even in difficult times the management does not just retreat to head office in Landau, but continues to talk to people on the ground.” ... his future at Progroup: "I want to constantly develop and I can do this really well at Progroup. The PW14 corrugated sheetfeeder plant is currently being built on the site of the PW07 plant. It is the twelfth production facility for corrugated board sheets and the third plant in Poland. It has already been decided that I will also be in charge of this plant. I am very proud of this. So you see: There is always lots to do here, every day is different, you never get bored." KIMBERLY HAMM Accounts clerk, responsible for Progroup Power 1 GmbH on… …how she started at Progroup: “The training to become an office manager at the PW06 plant was brilliant. I really enjoyed the introductory week with all the other apprentices from the other plants, getting to know the Board members in person, visiting Group Office and also the team-building exercise at Kandel Climbing Park. I was totally delighted and amazed to find that something like this actually existed. My fellow students at vocational college did not have such a good place to start their career.” ... her new job: “My trainer recognised my potential early on and gently urged me to pursue a career in accounts – even though the topic of bookkeeping was definitely not my favourite during my technical diploma. I found it rather dry and lacking in practical relevance. Although I only completed my training a year ago, I want to take on responsibility in my new job from day one. I really like getting stuck in and need the challenge.” ... her employer: “My grandma is particularly thrilled that my career is going so well: She was the person who first spotted the job advertisement on the internet and persuaded me to apply for an apprenticeship at Progroup. And I now work for a considerate employer that cares about the well-being of its employees.” ” D E R O B T E G R E V E N U O Y “ Innovation 33

“PARTNERSHIP IS THE KEY TO SUCCESS” Interview with Michele Lancellotti The partnership began three and a half years ago when Progroup opened its first corrugated sheetboard plant in Drizzona, Italy for producing corrugated board packaging. The partner in the affiliated packaging park is Imbal Carton. An interview with the CEO of the company, Michele Lancellotti, about the Italian pack- aging market, the benefits of the packaging park concept and what makes family-run companies so special. Italy is regarded as the biggest market for corrugated board packaging in Europe. How is the packaging market structured and what implications does this have for your business? Michele Lancellotti: The Italian market is fragmented and characterised by lots of small and family-run companies that generate roughly half of total revenue. The other half is produced by a handful of international paper companies. This is also reflected in our business. How do you want to stand out from the competition in the future? Our core business will remain providing packaging for the food and beverage trade. We are of course always searching for new packaging solutions to cater for rapidly growing segments such as the Michele Lancellotti, CEO of Imbal Carton. mass food market, the organic market and the online trade. We are well aware that to stay competitive in the future it is important to develop innovations with an eye on sustainability and envi- ronmental protection, both with prod- ucts and services and when it comes to internal business development and growth. For we will only be able to make ourselves different from the competition by innovating. For us, partnership is the key to success. As well as thinking about innova- tion, what else forms a core part of your company philosophy? Our logo with the claim "I love carton" sums up our company philos- ophy in a nutshell: A passionate approach to our work, a passion for the environment, our employees, cus- tomers and of course for corrugated board as a material. Our mission is to set standards when it comes to sus- tainability and corporate responsi- bility. We are proud of the fact that we recently reduced our CO₂ emis- sions by 20 per cent and won the "Conai Ecodesign 2020” award for the second time in a row. Looking to the long term, we want to use only recy- cled paper or products made from recovered paper wherever possible to save valuable resources and reduce waste and the impact on the environ- ment. By ensuring that recycling works, we do of course also intend to reduce costs. Cooperation 35

FAS CINA TION Questioning the technical status quo, pushing the boundaries of what is feasible - this has been an essential element of our success right from day one. Nothing bonds people together more than striving together to achieve ambitious targets. A passion for getting things done, enjoying success and taking pride in achieving things together – this is what drives us on. We work together as a team, focusing on finding solutions to overcome challenges, wset standards and with our successes we impress our customers, our partners and ourselves. 37 3

Progroup needs recovered paper especially to do this. In the “drum pulper” at the paper factory it is dissolved and broken down with lots of water. The pulp which is produced is applied to a screen in a thin layer so that the water can drain off. The screen needs to be moved so that the fibres are compacted on top of and next to one another, thus forming the paper. This is pressed with a roller. The paper is then dried in the machine’s “oven” and then wound onto the reel. how is paper made? ANNA 6 years old In which countries in the world do you sell your paper and cardboard boxes? Progroup sells corrugated board in Germany and almost all neighbouring countries (Denmark, Belgium, Nether- lands, France, Switzerland, Austria, Czech Republic, Poland) – also in Great Britain and Ireland. These are the islands at the top left on a map of Europe. If you look on the right, your Mum or Dad will show you Lithuania, Slovakia, Hungary, Slovenia and Romania. And then there is another country that looks like a boot. This is Italy. Progroup delivers its corrugated board to all these countries. Fascination 39

the challenges of Industry 4.0 – but often without an overarching strategy, just with specific measures. In the process, the existing structures and normal workflows have usually not been scrutinised or not scrutinised enough. In these cases, the huge potential from digitising and net- working products and production within the context of Industry 4.0 could not be exploited and innovative business mod- els could not be implemented. THE THREE DIMENSIONS OF INDUSTRY 4.0 For the investments in Industry 4.0 to actually pay off, according to Prof. Dr. Her- mann Krallmann, Professor of System Analysis and IT at Berlin Institute of Technology, you need to consider three dimensions: the technical, the organisa- tional and the psychosocial dimension. DIGITAL PIONEERS GOT THROUGH THE CRISIS BETTER 77% were able to use digital solutions to respond to the crisis quickly and flexibly 80% got through the crisis well because their business model and processes were already heavily digitised 75% of the top digitisers are happy with their sales Companies surveyed All figures are from the “Digitisation Index for Medium-Sized Enterprises 2020/2021” study. It was conducted on behalf of Deutsche Telekom in summer 2020. Short-term digitisation Kurzfristige Digitalisierung Kurzfristige Digitalisierung Long-term digitisation Langfristige Digitalisierung Langfristige Digitalisierung 46% 46% 46% 34% 34% 34% 4in10 companies want to expand their digital services Fascination 41

“The more digital companies are, the more positive the projections” there is also access to the latest tech- nologies and a secure job in a growing market.” VALUE-ADDED NETWORKS But as has already been mentioned several times, no company will bene- fit from digital transformation on its own. Companies will only succeed if they realise that it is really important to integrate value-added networks and value-added processes beyond the confines of the company. The aim is to cooperate in a flexible, agile way by integrating all companies involved in a value-added chain into the process- es at all times, regardless of location. Digitisation constantly offers new opportunities for this, but also contin- uously throws up new assignments: According to Krallmann, the key challenge for being successful is “to deliver benefits and added value for all partners involved by defining the way that data is exchanged within this cooperation”. The “openpack” platform has already turned some LEVEL OF DIGITISATION IN THE INDIVIDUAL AREAS OF ACTIVITY Digitisation Index* Relationship with customers Productivity in the company Digital business models IT security and data protection h t i w n o s i r a p m o C r a e y s u o v e r p i 58 +2 58 +3 56 +4 51 +3 68 0 * Average level of digitisation of medium-sized enterprises according to the Digitisation Index for Medium-Sized Enterprises, max. score of 100 points. Source: Digitisation Index for Medium-Sized Enterprises, Telekom Deutschland and techconsult, November 2020 83% of workers believe in their compa- nies being correctly aligned with the needs of the market aspects of this integration concept into reality: “The primary objective of this platform is to extract the ma- chine data, link together the data from various application systems, and cap- ture and integrate other key data. This creates added value which is shared across the value-added processes for the stakeholders involved.” NO FEAR OF MAKING MISTAKES According to Krallmann, it is vital to have a good error culture. If an entrepreneur fails in the USA, they have learned a lesson so they can do things better next time. In Germany, the opposite is true: They learn that it is better not to try something. This makes people fearful. However, digital transformation means embracing something new and departing from familiar path- ways. A fear of making mistakes presents a real obstacle: “Companies need to redefine core processes, devote time to their employees and consider possible failure as an op- portunity to develop and evolve. You can only learn by making mistakes. So it is all about experimenting – in the truest sense of the word,” says Prof. Krallmann in assessing the opportunities of the change that is badly needed. Fascination 43

Faster, higher, stronger! The Olympic motto also applies in business. In a highly competitive segment such as paper and corrugated board production, only those ranked among the true market leaders can survive. The path to achieving this involves rapid, yet sustainable growth. How can a company grow sustainably? A seemingly simple question that still evokes passion and controversy when it is discussed by business people, economists and politicians today. Supposed experts present their perspec- tive in countless seminars, management books and journals. They often just look to sell their own method as “the only true doctrine” and thus help their own company to achieve more growth. It has long since been proven that there is no such thing as a universal growth strategy that is right for everyone. What works for high- tech companies like Tesla and Apple cannot simply be transferred to traditional sectors like mechanical engineering. In some cases, the approaches adopted in emerging markets are very different from those used in Western indus- trialised countries. And the winning formulas employed by luxury goods manufacturers cannot serve as a blueprint for a commodity business such as corrugated board production. “Every company needs to find its own way,” says Jürgen Heindl, founder and CEO of Progroup AG, in summing up his experience. “In our case, it was a traditional greenfield strategy that we have stuck to consistently to the present day.” TO GREENFIELD O PT FOR E N AT CISIO R E SITES LIB E D E D We started off by considering what large entities are not good at doing. The answer: Manufac- turing small orders with very short delivery times in a highly productive way and delivering just in time. It soon became clear to Heindl that this can only work by consistently linking together all processes and machines from the receipt of orders and production through to delivery. In the same way as Amazon, customers should be able to order online and track their order at all times. According to Heindl, just-in- time manufacturing of small orders requires almost perfect organisation and a high level of standardisation. “This is why we always aspire to be the leader on cost, technology and inno- vation and thus grow faster than our rivals. But to do this we also need to be more profitable than the competition.” It is important to him that innovation is not an end in itself and is not tantamount to inventing a new technology. Innovation is the application of existing, albeit young technologies. To be able to apply these technologies, you need opportuni- ties and they in turn are only created by making investments. “Innovation and investments are closely interlinked for us. When the two are combined, they form a strong alliance,” explains Heindl. Fascination 45

E M PLO YEES MOTIVATED ARE A WINNING HIGHLY FORMULA To ensure that all projects run as smoothly as possible, Heine utilises a matrix organisation with competence centres. Each project manager has an established set of employees as well as additional experts. They are only called upon for very specific tasks and then move on to another project team. “We need extremely flexible employees for this approach to work,” appreciates Heine. “Ultimately, a project like this is normally a unique undertaking and we repeat the process almost every year.” Every single person must therefore be “a structured pioneer” who follows the rules, yet is willing to take responsibility, look for appropriate solutions and make their own decisions. Heine himself was enthralled by Progroup’s growth strategy right from day one and therefore did not hesitate for one moment in accepting the job – even though he hails from the food industry and is “not a child of corrugated board”. “It really is a very special thing when a company goes to the effort of having a division that focuses exclusively on growth.” In addition, he also enjoys the intercultural engagement with colleagues at sites in other countries and the diverse nature of his job. Heine and the Progroup founder have no concerns that Progroup’s rapid growth story might eventually reach its limits. Although Jürgen Heindl concedes there is a fundamental risk that the company may actually become less flexible as it increases in size, he thinks the company is very well equipped to handle this. The fact that the company expanded with a young, highly motivated team is now paying off. “We want to be successful together because success is our key driving force,” says Heindl. In this context, he sees a number of parallels with compet- itive sport: “We work very hard every day so that we can constantly improve. You need ambition, enthusiasm and the absolute determination to succeed.” And all of these qualities can be found in abundance within the company. G STIN U TR YOUR STRENGTH OWN PERFECT COOPERATION: THE PROGROUP BUSINESS MODEL Progroup’s business models provide the best example of the company's “Power of Cooperation”. As well as the traditional model – delivering to customers using trucks on the roads – Progroup has developed innovative packaging park models. These reflect the customer’s structure. Packaging park models I and II represent the closest form of working relationship with the customer. MODEL I: With this type of packaging park, the customer constructs its plant in the immediate vicinity of Progroup's corrugated sheetfeeder plant. MODEL II: For this version of the packaging park, Progroup constructs a corrugated sheetfeeder plant at its customer’s site which is integrated into the customer’s workflow. With both packaging park models, the outlay on logistics and organisational effort is reduced to a minimum; deliveries are 100 per cent reliable, and the level of flexibility and response time are unbeatable. Fascination 47

Silz Wildlife Park and Progroup are also united by a desire to be a good neigh- bour to the people in the region. This is why the family-run company specifi- cally supports projects involving the environment as well as supporting children and young people. Last year for example the money which was donated was used to offer free day trips to children. The park is a place for extracurricular learning and it aims to attract families with children. On the walking trail they can also feed small horses, and see wild boar and bison. If you decide to take the short loop around the 100 hectare park, you have to negotiate a few steep uphill and downhill sections. This means that families who have a pram with them should not bring along too many bags. The long loop is flatter, but takes a good two hours to walk. 100 hectares is the size of the wildlife park Many visitors like to picnic at the park and enjoy their sandwiches sitting on the wooden benches surrounded by nature. These benches were also funded with donations from Progroup. Families from the region erected them and most benches therefore have signs bearing the names of the supporters. There were 10,000 more visitors in 2020 than in the previous year. As well as the 400 animals, other attractions include the adventure play area and the barbecue hut. Wolves, bison or mouflons: 400 animals from 15 European species live at Südliche Weinstraße Wildlife Park near Silz. As a company from the local region, Progroup supports the sustainable concept of this popular tourist attraction. TThe goat is a cheeky little thing. It comes closer and closer, using its horns to touch the paper bag full of sandwiches that is dangling from the pram. The occupant of the pram – a one-year-old child from the city – is fascinated by this inquisitive animal. There are lots of goats at Silz Wildlife Park, but today this is the only one that has made its way to the entrance to welcome this family of six. Neither the bleating goat nor the one-year-old child has any fear of contact. Meanwhile, the parents manage to move away from the goat together with their bag of sandwiches and small child. To do this, they bought some food at the entrance and gave the first few bites to the goat and the chickens. The food for the animals is produced at the park’s own farm business. “We want self-contained cycles. Having our own business helped us during the coronavirus crisis when costs rose,” explains Daniel Kraus, managing director of the park, which is located in the Südliche Weinstraße district. € 25,000 was donated by Progroup The park was also helped by the sup- port from Progroup, which extends way beyond last year’s donation of 25,000 euros. It also involved a tree- planting initiative at the site. Old vari- eties of fruit trees and sweet chest- nuts will provide a source of food to the animals in the future and are also good for the climate. Kraus is delighted that the owner family and the wildlife park are united by the issue of sustainability and a love of their home region, which is reflected in specific offers of help. For example, assistance with the printing of new information leaflets has already been promised. 400 animals can be admired RAVENS “TALK” TO THE WOLVES After the petting enclosure, the path takes visitors up the small hill to the wolves. The family is amazed to see how calm the three animals are in their enclosure. The wolves are lazing around on the grass. The family stands by the fence speechless and awestruck. The silence is broken by a loud “cock-a-doodle-do”. Not wolf howling – just this simple, but pene- trating “cock-a-doodle-do” from a rooster crowing on the other side of the park. And then there are deep “croak” sounds from the dozens of ravens fluttering over the wolf enclo- sure and lurking in the trees. “They are communicating with the wolves,” says Kraus. There is a good reason for this raven/wolf communication, explains the 42-year-old, pointing towards the pick-up that has stopped behind the enclosure. A keeper throws chunks of raw meat over the high fence into the enclosure: They are currently of more interest to the flying omnivores than the wolves, who are obviously full. They slowly walk over to the three four-kilo chunks of meat, take a look at them and then lie down again. The ravens grab their portions. Wild- und Wanderpark, Südliche Weinstraße GmbH, Tel. 06346 / 55 88, www.wildpark-silz.de

IDEA AND CONCEPT Progroup AG DESIGN AND LAYOUT design hoch drei GmbH & Co. KG PUBLISHER Progroup AG TEXT Deutscher Fachverlag GmbH, dfv Corporate Media EDITOR Progroup AG Deutscher Fachverlag GmbH, dfv Corporate Media PICTURE CREDITS Hartmut Nägele / P.4 Arron Shingdia / P.9 Fastmarkets / P.10 Sven Cichowicz / P.16–19, P.44, P.50 Wi-Wa-Wunderland e. V., Marcin Gatner / P.24 Kerstin Müller, Jens Schlüter, Katja Heinemeyer, Harald Krieg, Accenture / P.25 Freya von Bülow / P.29–33 Michele Lancellotti / P.35 Prof. Dr. Hermann Krallmann / P.42 Wild- & Wanderpark Silz / P.48–49 TYPESETTING design hoch drei GmbH & Co. KG LITHOGRAPHY design hoch drei GmbH & Co. KG PRINTING Blaich Druck GmbH, Straubenhardt TOTAL PUBLISHED 5,200 copies CORRECT AS OF August 2021 All rights reserved No part of this work may be reproduced or processed, duplicated or distributed using electronic or mechanical systems in any form without the written permission of Progroup AG. © Progroup AG To make the text easier to read, the male form will be used for personal designations and nouns relating to people. Corresponding terms fundamentally imply equal treatment for all genders. The shortened linguistic form is for editorial reasons and does not imply any prejudice. Unsplash Philipp Henzler / P.12 Haku Scent, Packhelp, Mildlee, Kelli McClintock / P.20–22 Mymind on Unsplash / P.26–28 Kelly Sikkema / P.34, P.36 Nordwood Themes / P.41