ASBISc Enterprises : Published its Consolidated Interim Report for H1 2023

ASBISc Enterprises Plc

INTERIM REPORT

FOR THE SIX MONTHS

ENDED 30 JUNE 2023

Limassol, 10 August 2023

TABLE OF CONTENTS

		Page
PART I	INTERIM MANAGEMENT REPORT	4
PART II	FINANCIAL STATEMENTS	32

DIRECTORS' REPORT ON THE COMPANY'S AND GROUP'S OPERATIONS

We have prepared this report as required by Paragraph 60 section 2 of the Regulation of the Ministry of Finance dated 29 March 2018 on current and periodic information to be published by issuers of securities and conditions of recognition of information required by the law of non-member country as equal.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this six-month report, all references to the Company apply to ASBISc Enterprises Plc and all references to the Group apply to ASBISc Enterprises Plc and its consolidated subsidiaries. Expressions such as "we", "us", "our" and similar apply generally to the Group (including its particular subsidiaries, depending on the country discussed) unless from the context it is clear that they apply to the Company alone.

Financial and Operating Data

This six-month report contains financial statements of, and financial information relating to the Group. In particular, this six-month report contains our interim consolidated financial statements for the six months ended 30 June 2023. The financial statements appended to this six-month report are presented in U.S. dollars and have been prepared in accordance with International Accounting Standard ("IAS") 34.

The functional currency of the Company is U.S. dollars. Accordingly, transactions in currencies other than our functional currency are translated into U.S. dollars at the exchange rates prevailing on the applicable transaction dates.

Certain arithmetical data contained in this six-month report, including financial and operating information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum of the numbers in a column or a row in tables contained in this six-month report may not conform exactly to the total figure given for that column or row.

Currency Presentation

Unless otherwise indicated, all references in this six month report to "U.S. $" or "U.S. dollars" are to the lawful currency of the United States; all references to "€" or the "Euro" are to the lawful currency of the member states of the European Union that adopt the single currency in accordance with the EC Treaty, which means the Treaty establishing the European Community (signed in Rome on 25 March 1957), as amended by the Treaty on European Union (signed in Maastricht on 7 February 1992) and as amended by the Treaty of Amsterdam (signed in Amsterdam on 2 October 1997) and includes, for this purpose, Council Regulations (EC) No. 1103/97 and No. 974/98; and all references to "PLN" or "Polish Zloty" are to the lawful currency of the Republic of Poland.

All references to U.S. dollars, Polish Zloty, Euro and other currencies are in thousands, except share and per share data, unless otherwise stated.

FORWARD-LOOKING STATEMENTS

This six-month report contains forward-looking statements relating to our business, financial condition and results of operations. You can find many of these statements by looking for words such as "may", "will", "expect", "anticipate", "believe", "estimate" and similar words used in this six-month report. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution you not to place undue reliance on such statements, which speak only as of the date of this six-month report.

The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this six-month report.

Part I Interim Management Report

1. Overview

ASBISc Enterprises Plc is a leading Value Add Distributor, developer and provider of ICT, IoT products, solutions, and services to the markets of Europe, the Middle East, and Africa (EMEA) with local operations in Central and Eastern Europe, the Baltic republics, the former Soviet Union, the Middle East and North Africa, combining a broad geographical reach with a wide range of products distributed on a "one-stop-shop" basis. Our focus is on the following countries: Kazakhstan, Ukraine, Slovakia, Poland, Czech Republic, Romania, Croatia, Slovenia, Bulgaria, Serbia, Hungary, Middle East countries (i.e., United Arab Emirates, Qatar and other Gulf states) and Latvia.

The Group distributes IT components (to assemblers, system integrators, local brands and retail) as well as A-branded finished products like desktop PCs, laptops, servers, and networking to SMB and retail. Our IT product portfolio encompasses a wide range of IT components, blocks and peripherals, and mobile IT systems. We currently purchase most of our products from leading international manufacturers, including Apple, Intel, Advanced Micro Devices ("AMD"), Seagate, Western Digital, Samsung, Microsoft, Toshiba, Dell, Acer, Lenovo and Hitachi. In addition, a part of our revenues is comprised of sales of IT products under our private labels: Prestigio, Prestigio Solutions, Canyon, Perenio, AENO, LORGAR and CRON ROBOTICS.

ASBISc commenced business in 1990 and in 1995 incorporated the parent Company in Cyprus and moved our headquarters to Limassol. Our Cypriot headquarters support, through two master distribution centres (located in the Czech Republic and the United Arab Emirates), our network of 31 warehouses located in 34 countries. This network supplies products to the Group's in-country operations and directly to its customers in approximately 60 countries.

The Company's registered and principal administrative office is at 1, Iapetou Street, 4101, Agios Athanasios, Limassol, Cyprus.

2. Executive summary for the three- and six-month periods ended June 30th, 2023.

Following the most profitable first quarter ever, we completed Q2 2023 very strongly generating month by month high double-digit sales growth. Thanks to the consistent implementation of our strategy and great determination of our teams, we were able to deliver immense revenue growth, despite the fact that, historically the second quarter is, the weakest quarter of the calendar year in IT industry.

In Q2 2023, we have continued our strategy of investing in prospective markets such as Central Asia countries, Caucasus region and Africa but also in Western Europe, building strong representative teams that could boost dynamically our sales.

We have also continued the strengthening and the development of our portfolio of IT products and services with technologically advanced solutions, including the division related to robotics - ASBIS Robotic Solutions (AROS).

Looking at the results, in Q2 2023, revenues were USD 674.1 million (up 30.5% compared to Q2 2022). The gross profit margin stabilized - to 8.04%. Operating profit (EBIT) increased by 12.2% and reached USD 54.2 million, compared to USD 48.3 million in Q2 2022. The net profit improved and reached USD 11.2 million, up 1.5% over the comparable period last year.

Regarding cash flow, it is worth mentioning that in Q2 2023 ASBIS generated a positive cash from operating activities of USD 59.4 million as compared to outflows of USD 0.5 million in Q2 2022.

In H1 2023, ASBIS generated revenues of USD 1,396.1 million (up 15.3%, compared to H1 2022) and earned a net profit after tax of USD 28.6 million, an increase of 5.6% as compared to the same period of last year.

The quarter-over-quarter increase in sales is reflecting a strong growth in all Company's geographic reportable segments. The Former Soviet Union and Central & Eastern Europe regions traditionally had the largest share in the Group's revenues. The share of the Former Soviet Union in total revenues increased to 48.02% in Q2 2023, as compared to 45.50% in Q2 2022.

In Q2 2023 multiple product lines have recorded an increase. The leader of the Company's sales remained the smartphones followed by CPUs and laptops.

A country-by-country analysis confirms the excellent growth rates the Group was able to achieve in almost all major countries of operations. The important countries with the highest sales growth in Q2 2023 were:

• Ukraine - a growth of 126.5%
• Germany - a growth of 104.0%
• Romania - a growth of 76.7%
• Poland - a growth of 64.2%
• Georgia - a growth of 56.8%

As regards our own brands, we are very pleased with the way they have been developing in recent months:

• AENO Premium Eco Smart Heater received the esteemed international Red Dot Award 2023 in simultaneously two nominations "Heating and air conditioning technology" and "Smart products".
• Canyon successfully expanded its market share in the Smart Watch category, specifically the Wrist Sport Computer segment and the Kids watch market in Romania.
• Lorgar has introduced a new line of gaming devices to the market, offering high-quality products tailored to the gaming community. Lorgar successfully organized the Lorgar Cup, an exhilarating CS: GO tournament that ran alongside the CEE Champions. This tournament provided a platform for local teams from the Czech Republic, Slovakia, Romania, Bulgaria, and Ukraine to showcase their talent on an international stage, attracting attention and participation from gaming enthusiasts. Due to the tournament, Lorgar successfully listed its products with 11 key partners in the Czech Republic, Slovakia, Romania, Bulgaria, and Ukraine.
• AROS has expanded their operations to Hungary, Bulgaria, Cyprus and the Middle East keeping on strengthening its engineering and commercial teams and searching for more robotic market experts across EMEA. Currently AROS has local robotic teams residing in Poland, Romania, Czech Republic & Slovakia, Greece, Cyprus, Hungary, Bulgaria & UAE. In Q2 2023 AROS has signed several strategic resellers across CEE. All partners have started the process of AROS solutions trainings and certification. In July 2023 the first beer serving robotic kiosk has been installed in Limassol.