Aves One : Group Annual Report 2020

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM 1 JANUARY TO 31 DECEMBER 2020

OF

AVES ONE AG

WOLLKOMMEN BEI

DER AVES ONE AG

INDEX
Foreword..........................................................................................................................................	3
Report of the Supervisory Board	………………………………………………………………………………………………..5
Master Data of the Aves One AG.........................................................................................................	7
Group Management Report ……………………………………………………………………………………………………………….8
Consolidated Balance Sheet..............................................................................................................	45
Consolidated Profit and Loss Statement .............................................................................................	47
Consolidated Statement of Comprehensive Income.............................................................................	48
Consolidated Statement of Changes in Equity.....................................................................................	49
Consolidated Cash Flow Statement....................................................................................................	51
Notes to the Consolidated Financial Statements..................................................................................	53
Independent Auditor's Report .........................................................................................................	141
Financial Calendar .........................................................................................................................	149

3

Dear Shareholders,

Dear Clients and Business Partners,

The recent months were trailblazing for Aves One AG and its shareholders. We realised on schedule our plan to concentrate on the rail business. As a holder of durable rail assets with a modern and profitable freight wagon portfolio, we have positioned ourselves well in a sustainable market of the future.

SYSTEMATIC FOCUS ON THE RAIL BUSINESS

In March 2021, we disposed of our entire sea container portfolio. This was the final step to concentrate on sustainable rail freight transport. This strategic decision was based, among other things, on the fact that, in the past financial years, the rail segment's results were significantly better than those of the container segment. We will reinvest the funds from the disposal of the sea container operations in the expansion of the rail portfolio. Aves One AG's core competence can be found in this business segment.

With the completion of the disposal of the container portfolio, there was a change in the Management Board. Jürgen Bauer left the Managemnet Board on 31 March 2021. We would like to express our sincere thanks to Jürgen Bauer for the successful and loyal relationship. We will continue to drive the successful development of Aves One.

FINANCIAL PERFORMANCE CORROBORATES STRATEGIC DECISION

Our financial performance for 2020 proves that we have a stable and strong foundation for growth. Group sales increased to EUR 123.9 million (prior year: EUR 116.8 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) remained high at EUR 81.8 million (prior year: EUR 84.5 million). We have thus continued Aves One AG's positive development in a tough market. The main driver was the rail business. This division contributed EUR 83.9 million (prior year: EUR 76.1 million) to sales and EUR 61.6 million (prior year: EUR 54.8 million) to EBITDA. Compared to the prior year, Aves One experienced a slight decline in the utilisation of its rail portfolio, due to the effects of the COVID-19 pandemic. However, with a utilisation of approximately 90 %, the rental level remains stable and high.

Overall, the rail business compensated for the declining performance of the container segment. In the container division, rental price reductions agreed in the course of contract extensions, currency effects and a slight reduction in the utilisation rate led to declining revenue and EBITDA contributions. Exceptional write- downs on the sea container portfolio of EUR 33.1 million had a negative impact on the result. As a result of this one-off effect, the operating result (EBIT) fell significantly to EUR 9.6 million (prior year: EUR 51.7 mil- lion). EBT adjusted for the exchange rate effects reported in the financial result decreased to EUR -36.3 million (prior year: EUR 11.1 million).

Our financial performance nevertheless corroborates the decision to dispose of the container portfolio and to invest in the continued expansion of our rail portfolio. Despite the delays in the delivery of new freight wagons caused by the COVID-19 pandemic, Aves One was able to invest EUR 90.8 million and thus expand its rail asset volume by 13.4 % to over EUR 738.8 million. The investments in the rail segment show that we are continuing to grow strongly, especially in the area of new-build wagons, and are maintaining our growth rate at a high level. As a result, our rail stock has expanded to more than 11,000 wagons as of 31 December 2020 (prior year: more than 10,200 wagons). However, our freight wagon portfolio has not only become larger, but also quieter. We have equipped our fleet with so-called whisper brakes. These lead to a noise reduction that the human ear perceives as a 50 % reduction in brake noise.

GOOD PROSPECTS FOR SUSTAINABLE RAIL BUSINESS

We are confident about the future. We currently consider that the economic impact of the ongoing global COVID-19 pandemic on our business operations will be relatively low compared to other sectors. On the contrary, the strengths of rail as a safe and reliable means of transport became clear not least during the COVID-19 pandemic. Rail freight transport proved to be of systemic relevance, especially in cross-border traffic, as a single goods train can transport the freight of 52 trucks. At the same time, every tonne transferred to the railway saves 80 % CO2 compared to truck transport. This CO2 savings potential will also contribute to a future boom in the European market for rail assets. By 2030, the European Union plans to increase rail freight transport by 50 %, primarily in order to meet the EU climate targets for climate neutrality

WOLLKOMMEN BEI

DER AVES ONE AG

in 2050. National, European governments have set similarly ambitious targets for shifting traffic from road to rail and have launched support packages worth billions of euros. This political tailwind serves as a driver for us and proves that Aves One is not only in a profitable business segment, but also in an attractive one because of its excellent future prospects. We are responding to this market with our very young and optimally diversified freight wagon portfolio.

With regard to new investments, we have a well-filled pipeline, but we cannot yet gauge whether there will be delays due to the COVID-19 pandemic. Nevertheless, we have already acquired freight wagons with a volume of more than EUR 11.4 million in 2021. We want to continuously expand our asset portfolio in order to further consolidate our position in the promising rail logistic market. In order to meet the increasing demand and to be able to pursue our growth trajectory, we are continuing to examine various possibilities of raising finance on the capital markets or other financing. In so doing, we take both equity and / or debt capital options along with other investments into consideration.

AVES ONE WELL POSITIONED FOR THE FUTURE

The impact of the COVID-19 pandemic on the overall economic development and supply and production chains remains difficult to predict. With a first-class rail portfolio, high utilisation rates and following the disposal of our sea containers, Aves One is optimally prepared to meet these challenges. For the 2021 financial year, we are expecting a continuous expansion of the rail business. We are planning a sales volume of more than EUR 100 million for the continuing business divisions of rail and swap bodies - of which more than EUR 92 million is to come from the rail division (prior year rail: approximately EUR 84 million). The Management Board forecasts a total EBITDA of more than EUR 70 million. By concentrating on the rail business, we expect cost savings of more than EUR 1.5 million p.a. for 2021, as a year of transition, and thereafter, which will contribute to the increasing profitability of the Aves Group.

Without the great dedication and flexibility of our staff, especially considering the additional challenges of the COVID-19 pandemic, we would not have the positive outlook nor have reached the strategic milestone of the sale of our container portfolio. Our thanks and appreciation go to them. Furthermore, we would like to thank our business partners for the successful relationship and our shareholders for their continued trust.

Yours sincerely
Tobias Aulich	Sven Meißner
Management Board	Management Board

5

REPORT OF THE SUPERVISORY BOARD

Dear Shareholders,

The Aves One Group continued to grow in the 2020 financial year despite the difficult economic conditions resulting from the COVID-19 pandemic and its containment measures. The forecasted operating targets were achieved in terms of sales, but were not quite reached in terms of earnings before interest, taxes, depreciation and amortization (EBITDA) as losses from the sale of less profitable sea containers in particular had a negative impacht on EBITDA. In the course of the year, further successes were achieved in letting the rail and container portfolio. The portfolio continues to be utilised at a high level and has been further rejuvenated with targeted acquisitions in the rail and swap body area. The dynamic growth course, especially in the Rail segment, was consistently continued by the acquisition of new wagons and a used portfolio with an age of one year. With these investments as well as deliveries fixed for 2021, the portfolio will be further sustainably expanded and the growth rate maintained at a high level. The transactions will result in significant sales and earnings potential for the future.

THE SUPERVISORY BOARD'S WORK

Against the background of the further expansion of the operating business, the Management Board and Supervisory Board had very close and regular exchange of information in the year under review. This is also reflected in the number of joint meetings and, due to the COVID-19 pandemic, video conferences. The Management Board provided the Supervisory Board with timely and comprehensive oral and written reports, also outside of these meetings, on current business developments, corporate planning, the liquidity situation and corporate strategy, and discussed with it the financing required for the asset purchases and the issuance of bonds. In this way, the Supervisory Board was involved in all transactions requiring its approval and passed the corresponding resolutions. In the year under review, the Supervisory Board therefore again conscientiously and diligently performed all the tasks incumbent upon it under the law, the Articles of Association and the Rules of Procedure, monitoring the management of the Executive Board and regularly advising it on the management of the company. The Supervisory Board continues to consist of four members, but has refrained from forming committees. Mr. Kretzenbacher, in his capacity as auditor and tax advisor, also makes additional recommendations for the Supervisory Board after his own detailed examination of the consolidated and annual financial statements and the internal control processes.

MEETINGS AND RESOLUTIONS OF THE SUPERVISORY BOARD

Against the background of the continued strong growth of the Aves Group in the year under review, the work of the Supervisory Board was intensive and characterised by a large number of meetings or video conferences and resolutions. In the 2020 financial year, the Supervisory Board of Aves One AG held a total of one ordinary Supervisory Board meeting, in particular against the background of the COVID-19 pandemic, and 7 resolutions were also passed. The meetings and resolutions by telephone took place on the days 24 February, 4 March, 23 April, 30 April and 8 June, 29 June as well as 30 November 2020. Most of the meetings and resolutions were attended by all members of the Supervisory Board and, in most cases, by members of the Management Board. On the two dates in April 2020, two representatives of the auditors were present via video conference. Thus, the resolution on April 23, 2020 served as a preliminary discussion of the annual financial statements for 2019 and the consolidated financial statements for 2019. The annual financial statements for 2019 were approved at the Supervisory Board meeting on April 30, 2020 and the consolidated financial statements at the Supervisory Board meeting on April 30, 2020. On June 29, 2020, the declaration of compliance of the Management Board and Supervisory Board with the recommendations of the "Govern- ment Commission on the German Corporate Governance Code" pursuant to Section 161 of the German Stock Corporation Act (AktG) was approved, which has been made permanently accessible at the Internet at https://www.avesone.com/de/aves_investoren_cg_erklaerung_unternehmensfuehrung.php.