FlatexDEGIRO : Separate Non-Financial Group Report for the 2023 financial year

2023

Non-financial report

Content

Foreword by the Management Board	3
Business model of the Group	6
New definition of operating segments	7
Core business online brokerage	8
Goals and strategies	10
Legal framework of the separate, non-financial Group report	14
Sustainability management	14
Materiality analysis	17
Sustainability strategy	19
Corporate governance and compliance	25
Business ethics	25
Compliance	27
Taxes	31
Customers and products	34
Data protection and security	34
Customer orientation	35
Innovative products and services	38
Promotion of sustainable investment	39
Employees	42
Training and education	46
Health protection	48
Employee satisfaction	50
Environment	55
Energy and emissions	55
Reporting according to Article 8 of the EU Taxonomy Regulation	60
Social responsibility	69
Global Reporting Initiative (GRI)	72
GRI content index	73

flatexDEGIRO AG | Non-financial report 2023

Foreword by the Management Board

Foreword by the Management Board

Dear shareholders,

dear friends of flatexDEGIRO AG,

We can be justifiably proud of what we as team at

flatexDEGIRO have achieved in the past months. So on behalf of the entire Management Board and Supervisory Board, we

would also like to take this opportunity to express our thanks and appreciation to all our 1,300 colleagues at flatexDEGIRO. We overcame difficult economic conditions together and made 2023 another successful year.

In a time overshadowed by unparalleled global challenges, flatexDEGIRO is working to build a sustainable future for our company - to the benefit of our stakeholders. Our work goes beyond financial success and encompasses a strong commitment to ecological and social responsibility.

We have further consolidated our strong position in the European market, acquired approx. 340,000 new customer accounts (previous year: 460,000) and increased our total customer base to more than 2.7 million private investors. In our main core markets, we have now passed the mark of 750,000 customer accounts in the Netherlands, 500,000 customer accounts in Germany and 250,000 customer accounts in Austria. Our broad-based growth improves the geographic diversification of our business model and reduces risks. As a leader in the European online brokerage market, we are aware of our responsibility when it comes to providing accessible, sustainable financial solutions. We know how crucial a role long-term investment can play in safeguarding financial wealth.

Our commitment to financial education is not only a key aspect of our mandate but also a strategic imperative. Cooperative ventures with partners such as LINDA., The Next Women, Dutchess Capital and events like "Female Finance" are representative of our drive to improve the proportion of female investors in the market. At the same time, the "Anyone Can Invest!" initiative launched in 2023 is actively breaking down barriers and promoting a culture more heavily geared towards diversity.

The long-term entrepreneurial success of flatexDEGIRO is predicated on the expertise, dedication, and flexibility of our employees. Our commitment to promoting a diverse, dynamic workplace and developing our HR policies are reflected in the positive results of our annual Group-wide employee survey, not to mention a series of external awards including the "Top Employer" seal. It is also underlined by the best rating of all online brokers on the German employer rating platform kununu. We strive to create a workplace that gives our team the

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Foreword by the Management Board

space it needs to grow. Our gratitude and respect go to all employees who have helped drive the success of the Group through their dedication and consistent focus.

The expansion and diversification of our Supervisory Board and Management Board will empower us to overcome new challenges and seize opportunities in the constantly changing European market.

Our commitment to sustainable development is not merely a promise, but a continuous process. We are proud to be part of the Global Compact Initiative of the United Nations and to be guided by its principles in the fields of human rights, labour standards, environmental protection, and the prevention of corruption. This obligation reflects our vision of a more inclusive and more sustainable global economy.

We have set ambitious goals for the year 2024. We want to increase the proportion of suppliers who adhere to our Business Partner Code of Conduct to at least 40%, maintain a high level of training and accelerate the electrification of our vehicle fleet to embrace the latest advancements in sustainable practices.

Yours sincerely,

Frank Niehage, LL.M.	Dr Benon Janos
CEO	CFO

Stephan Simmang	Christiane Strubel
CTO	CHRO

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Business model of the Group

Business model of the Group | New definition of operating segments

Business model of the Group

In the area of financial services and financial technology, flatexDEGIRO AG and its subsidiaries offer online brokerage and IT solutions for banking and securities with high standards of security, performance and quality. The focus of our business activities is online brokerage. flatexDEGIRO considers itself to be one of the largest retail online brokers in Europe in terms of geographic scope and the number of transactions settled and customers serviced.

The Group's parent company is flatexDEGIRO AG, a European provider of financial technologies. Its business activities consist of the development, supply, and operation of future-proof and efficient IT solutions for the settlement of securities and payment transactions. This mainly comprises the supply and operation of the IT infrastructure for private customers of the flatexDEGIRO Group, which guarantees the settlement of customer transactions in 16 European countries.

As at the reporting date, flatexDEGIRO AG has business operations at nine locations in Germany and one site each in the Netherlands, Great Britain, Austria and Bulgaria. The flatexDEGIRO Group employed an annual average of 1,285 employees (previous year: 1,219).

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Business model of the Group | New definition of operating segments

New definition of operating segments

flatexDEGIRO AG is required by IFRS 8 to report on its operating segments. The type of segmentation is based on the management approach. Segments are components of a company for which separate financial information is available. This information is regularly analysed by the Management Board and by management as part of the allocation of resources and the assessment of performance.

flatexDEGIRO AG was previously divided into the FIN (Financial Services) and TECH (Technologies) business segments. The Financial Services segment mainly comprised the activities of flatexDEGIRO Bank AG, which divided its commercial activities into the Online Brokerage, Non-Brokerage, and Credit & Treasury divisions.

The TECH segment comprised the operating IT business of flatexDEGIRO AG, consisting of the development, production, distribution and maintenance of software, hardware and IT infrastructures. The core product of flatexDEGIRO AG is the flatex Core Banking System (abbreviated to FTX:CBS).

One consequence of the merger between DeGiro B.V. and flatexDEGIRO Bank AG was a strategic focus on the core online brokerage business. As a result, the management of the flatexDEGIRO Group increasingly concentrates on the FIN operating segment.

This was taken as an opportunity to redefine the operating segments.

The new classification divides the operating segments into "flatex" and "DEGIRO".

IT services at flatexDEGIRO AG and Xervices GmbH are not assigned to individual segments, but are allocated to these segments.

Segment "flatex"

The operating segment "flatex" includes the online brokerage activities under the flatex brand and the activities under the ViTrade brand for which no separate segment was formed for reasons of materiality (the criteria for operating segments were not met).

In geographic terms, the core online brokerage business under the flatex brand and the ViTrade brand relates to Germany and Austria.

The operating segment "flatex" continues to include that part of the business activities from Credit

• Treasury of flatexDEGIRO Bank AG that does not relate to DEGIRO. This reflects the investment business and the conservative lending business under the flatex brand and the ViTrade brand, which as a rule takes place on a secured basis.

Of secondary importance are the business activities related to "Business Process Outsourcing" and the securities settlement services and fully automated transaction settlement services (General Clearing Member, GCM) offered as an outsourcing solution.

Segment "DEGIRO"

The operating segment "DEGIRO" comprises the online brokerage activities under the DEGIRO brand and the part of the business activities from Credit & Treasury accounted for by the DEGIRO brand. This reflects the investment business and the conservative lending business under the DEGIRO brand, which as a rule takes place on a secured basis.

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Business model of the Group | Core business online brokerage

In geographic terms, the operating segment "DEGIRO" currently relates to 15 countries in Europe: the Netherlands, Spain, Portugal, France, Germany, Italy, Switzerland, Ireland, Great Britain, Denmark, Sweden, Finland, Poland, Czech Republic, and Greece.

Core business online brokerage

With flatex, ViTrade ("flatex" segment) and DEGIRO ("DEGIRO" segment), three established and successful online broker brands belong to flatexDEGIRO. All brands specialise in the execution- only securities business and target traders and investors who trade autonomously.

The Company's successful growth means that an increasingly broad customer base is targeted. Trading services are available for all types of securities with access to all German and many international exchanges, as well as over-the-counter direct trading. Our brands reflect online broker businesses without physical branches. They provide customers with a number of different trading platforms and access options for trading in securities products. These access options are continuously improved with the aim of offering an excellent customer experience and reaching additional groups of customers.

Customers can trade stocks, ETFs (exchange-traded funds), ETPs (exchange-traded products) and many other products online, both at exchanges and over the counter. The Group also cooperates with numerous direct trading partners. In addition to one-off investments in securities, customers can set up savings plans with ETFs and other funds.

An average of 22 transactions per customer account in 2023 attests to the active customer base of flatexDEGIRO, although trading activities declined year on year across the industry due to the market environment. The success of our online brokerage business was further driven by the Group's transparent pricing model, which focuses on cost-effective pricing, the comprehensive and independent product portfolio, and the stable, convenient, and customer-focused platforms.

The Group's brokerage business received accolades in numerous publications throughout Europe in the past financial year (see Customer satisfaction and customer feedback, p. 36).

Credit & Treasury (C&T)

As a by-product of the online brokerage business, the Group holds over EUR 3.6 billion in customer funds as of 31 December 2023. Interest rates, especially the European Central Bank's (ECB) deposit facility rate, increased again significantly over the past financial year. The ECB raised the interest rate on the deposit facility in several steps from 2.0 % in December 2022 to

4.0 % in September 2023. In combination with the customer deposits, most of which are deposited with the Deutsche Bundesbank and on which no interest is paid to customers, the higher interest rates generate significant earnings contribution for flatexDEGIRO.

flatexDEGIRO Bank AG already significantly revised its credit strategy in the 2021 reporting year and placed the focus on low-risksecurities-backed credit business (margin-loans). The remaining loan portfolio was gradually reduced through maturity or redemption. This also includes the factoring portfolio. The supplementary property financing offered as a treasury substitute was also strategically discontinued at year-end 2022.

The treasury department pursues a broad diversification of money and capital investments, including overnight and fixed-term deposits, bank and government bonds, cash loans and mortgage bonds as well as UCITS (Undertakings for Collective Investment in Transferable Securities) and special funds (Alternative Investment Funds, "AIFs"). Under the internal

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Business model of the Group | Core business online brokerage

investment guideline, the management of interest-bearing own investments is based on the respective current business and medium-term planning as well as a regular review of target achievement during the year. The protection of invested capital is the primary focus.

In the 2023 reporting year, flatexDEGIRO added ESG exclusions to its investment guidelines. The revised investment guidelines apply to all financing and investment activities as well as engagements directly linked to the following sectors in a broader sense. This includes the following sectors:

• Metals and mining industry
• Oil and gas industry
• Hydroelectric power stations
• Forestry and agriculture (including palm oil)
• Arms industry

There is currently no activity in these sectors.

SEGMENT "FLATEX"

Core business online brokerage

The flatex segment has two established and successful online broker brands in flatex and ViTrade, which are both active in Germany and Austria. Both brands specialise in the execution-only securities business and target traders and investors who trade autonomously.

flatex brand

Under the flatex brand the Group offers execution-only securities transactions in Germany and Austria. The offering aims at independent traders and investors who make their own decisions. It covers all types of securities and provides access to all German and many international exchanges, as well as over-the-counter direct trading, mainly of stocks, ETPs and ETFs. Our services focus on a transparent pricing model and a product range independent of banks, as well as customer-focused services.

ViTrade brand

The ViTrade trading boutique offers services for professional traders that are distinguished by special conditions dependent on the trading volume and product, professional trading platforms and individual customer service. Customers are also given the opportunity to engage in covered short selling of selected stocks and bonds traded in Germany. In addition, ViTrade offers "trading lines", which enable customers to use capital even more effectively. ViTrade has a standard pricing model that consists of a percentage commission rate of 0.09% of the quoted price (plus exchange fees).

Securities settlement

flatexDEGIRO Bank AG has accounts with the central securities depositories Clearstream and Euroclear for share and securities transactions. This allows flatexDEGIRO Bank AG to carry out the securities settlement of its own transactions. flatexDEGIRO Bank AG also has the status of General Clearing Member at Eurex Clearing for the stocks and securities business. This connects brokers and securities businesses to the securities settlement processes.

Existing non-brokerage business

Within the non-brokerage business area, flatexDEGIRO Bank AG offers its partners the product range of a full bank as an outsourcing solution. The bank does not take on a role externally but

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Business model of the Group | Goals and strategies

performs all processes on behalf of the respective partner. For example, services are offered in the areas of employee participation and business process outsourcing (BPO).

The services for existing business customers will be continued in a expense-optimised manner. A targeted expansion with respect to the strategic focal points in the online brokerage business only takes place in those areas where there is a direct link to the securities business, in order to further reduce internal costs per securities transaction in the Group.

SEGMENT "DEGIRO"

DEGIRO brand

DEGIRO was established in the Netherlands in 2007 as a fund management company. The range of services was extended in 2013 by adding an online brokerage solution for private customers. DEGIRO has been part of the flatexDEGIRO Group since mid-2020. The merger with flatexDEGIRO Bank AG took place in spring 2021, with retroactive effect from 1 January 2021. Today DEGIRO is represented in 15 European countries. DEGIRO customers have access to almost 50 European and non-European stock markets, including in the USA, Australia, Japan and Hong Kong, via user-friendly trading platforms developed in-house. The complete range of products includes shares, bonds, futures, options, exchange-traded products, and exchange- traded funds.

Goals and strategies

The strategic focus of flatexDEGIRO is on the further development and expansion of its online brokerage business in Europe. The Group is primarily aiming for sustainable, profit-oriented growth and rapid market penetration. Maintaining a leading technological position is also critical to success. By leveraging economies of scale and an efficient centralised business organisation, flatexDEGIRO also aims to further increase profitability and value creation for its shareholders through this growth.

Organic growth in online brokerage

flatexDEGIRO aims to sustainably increase its customer base by dynamically expanding its product and service offering, innovative and easy-to-understand trading applications, and an increased media presence. At the same time, the number of securities transactions processed should continue to grow depending on the trading activity of the customers. This is not only to increase revenues, but also to achieve other economies of scale, resulting in significantly reduced costs per transaction and improved profit margins. Market trends indicative of growth in the online brokerage market in all countries in Europe will have a fundamentally positive effect in the long term. Not least, these include the recently low to negative real interest rates, a rising affinity for online activities, easier access to capital market products and systemic problems in a large number of state pension systems, where pay-as-you-go methods are coming under great pressure due to demographic change.

Following the acquisition of DEGIRO in July 2020, the Group intends to achieve organic growth with its online brokerage brands in its current markets by attracting sophisticated investors with its cost-effective pricing model and a comprehensive and independent product range, as well as transparent, convenient and customer-focused platforms.

In brokerage business, "digital proximity" to the customer is the key. Alongside transparent communication and rapid provision of relevant information, this includes a stable brokerage

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