Compañía de Distribución Integral Logista S A : Integrated Annual Report

202023 INTEGRATED ANNUAL REPORT

23

Summary

4 6

Letter of the chairman

Letter of the CEO

10 18 28

1. Logista at a glance	2. Strategy and business		3. Logista in 2023
		model
36		58		64

4. Corporate governance		5. Sustainable
		management of the
		supply chain
78		92

7. Minimizing	Appendixs
environmental
impact

6. Logista and people

The icon is used throughout the report to indicate the aspects that are considered the most material aspects.

Figures are rounded, except percentages and certain remuneration data.

Translation of a report originally issued in Spanish. In the event of discrepancy, the Spanish language version prevails.

4	Integrated annual report 2023

Letter from the chairman

Dear shareholders,

I'm delighted to present our Integrated Annual Report for 2023. In line with our firm commitment to transparency, this report offers an overview of the key figures and milestones for the Company over the year, as well as detailing our financial results for 2023.

Before we move on to the key milestones achieved this year, it is important to note the macroeconomic landscape over the period, with rising inflation and significant interest rate hikes that were only aggravated by the geopolitical tension generated by the ongoing conflict between Russia and Ukraine, for which there is still no end in sight. The severe consequences of this war have included a substantial increase in the price of energy and many other commodities, exacerbating the inflationary situation and dampening growth forecasts for the European Union member states over the years ahead. The geopolitical environment has been further disrupted by recent events in Israel, which have triggered even greater global uncertainty.

Despite this complex backdrop, Logista has proven its ability to weather adversity again this year, delivering on its global growth and diversification strategy and reinforced through the integration of recent acquisitions. Among these acquisitions I would like to highlight the importance for Logista of the integration of Transportes El Mosca, in which we also secured an additional 13.33%, taking our stake in the company to 73.33% at the end

of the financial year. We also worked hard over the year integrating Logista Parcel and Carbó Collbatallé, blending routes and optimising infrastructure, among other initiatives.

In terms of our geographical expansion, one major milestone was our debut in the Italian pharmaceutical distribution sector through the acquisition of Gramma Farmaceutici. This transaction will allow Logista to continue to roll out its diversification strategy, acquiring complementary companies offering business synergies and laying the groundwork for growth in a highly compelling sector and market.

Last but not least, I'd like to mention the recent acquisition of SGEL Libros, which was completed after the end of the reporting period through the subsidiary Logista Libros.

This acquisition further underpins the leadership position enjoyed by Logista Libros as Spain's largest independent book distributor.

I would also like to emphasise the outstanding financial performance posted by the Company for the year, with economic sales up 36% to €1,684 million and operating profit up 17% year on year to €366 million.

2023 Integrated annual report	5

Our diversification strategy, which has gained approval from investors, the market and our clients, who recognise the added value offered by Logista, secured us a spot to enter Spain's benchmark Ibex 35 index in December, as the only company from our sector in the index.

Another important event this year was the renewal of the reciprocal credit line with Imperial Brands, with an extension to the upper limit of €3,000 million from the previous limit of €2,600 million. This renewal, effective as of June 2024, will allow us to continue to generate value for our shareholders by optimising Logista's cash generation.

As regards corporate governance, the Board of Directors worked tirelessly over the year across all its areas of responsibility. I'd like to particularly emphasis three initiatives.

Firstly, the approval of the update of the sustainability policy outlining the Company's key sustainability commitments and the management and oversight guidelines to be followed. The aim of this new policy is to deliver long-termvalue for all stakeholders and provide stability and transparency beyond the balance sheet, making a material contribution to achieving the Sustainable Development Goals (SDGs) approved by the United Nations (UN).

One of the key updates undertaken in the area of sustainability was the design of a specific governance model to regulate the various components involved in sustainability management and control, which reinforces the functions of the newly-named audit, control and sustainability committee in supporting and overseeing the implementation of this new model. Under its supervision, Logista is actively working

on a new sustainability strategic plan which is fully aligned with the requirements under the updated sustainability policy and global best practices and will be implemented over the course of the year.

Secondly, I would like to highlight Logista's steadfast commitment to transparency and regulatory

compliance, which has been validated by various international certifications that guarantee our compliance system adheres to the strictest standards in the area. These include UNE 19601 - criminal compliance management systems, UNE-ISO 37001

• anti-briberymanagement systems and UNE-ISO 37002 - whistleblowing management systems.

Thirdly, and on the same subject, the board of directors has approved a new criminal compliance policy with a view to reinforcing the culture of compliance

at Logista and further cementing our existing zero tolerance approach towards illegal activity. Under the oversight of the audit, control and sustainability committee, the management committee has been given a more prominent role in supporting and promoting the criminal compliance model.

In other news, the Company received multiple awards this year for our efforts in sustainable development. We were awarded the Ecovadis silver medal and

we are among the top 1% best-rated companies for environmental issues in our sector. We have also garnered other acknowledgements in the field; the CDP, which recognises global leaders in the fight against climate change, has applauded Logista's efforts again this year as a key driver of sustainable change through its supply chain, naming the company on its Supplier Engagement Leaderboard. With a score of A-, Logista was ranked in the CDP's annual A-list again this year.

Logista's commitment to sustainability has also been recognised again this year by Sustainalytics, a leading global provider of sustainability and corporate governance research and ratings. Based on an evaluation of Logista's ESG criteria, Sustainalytics awarded the company an ESG Risk Rating of 13.7 out of 100, meaning it is considered to be at low risk of experiencing material financial impacts from ESG factors. It was also awarded a Sustainalytics Industry Top Rated certification and ranked 11th out of the 365 companies evaluated in the transport sector.

Another achievement we are immensely proud of is the progress we have made by setting out a framework to ensure the company is truly diverse and inclusive. The success of this strategy is evident from the widespread recognition that the Company has received both globally and within Spain. One of the most prestigious awards is without doubt the recognition received from the Financial Times, which has named Logista as one of Europe's most inclusive companies, including it in its Diversity Leader ranking for a third consecutive year. Logista made its debut this year on the 2023 Bloomberg Gender-Equality Index, which measures the performance of listed companies in terms of gender equality, and we have also been part of the FTSE4Good IBEX Index since 2016.

We urge you to read this integrated annual report for a better insight into the milestones achieved over the period and into the various facets of Logista's activity. This report is complemented by the financial statements, the corporate governance report and the remuneration report, all of which are available both on Logista's website and on the website of Spain's National Securities Market Commission.

I am utterly convinced that with your support, we will continue to achieve new successes and make further headway in our diversification strategy, continuing to spearhead the sector and deliver progress in all markets in which we operate.

Kind regards,

Gregorio Marañón

6	Integrated annual report 2023

Letter from the CEO

Dear shareholders,

The 2023 financial year brought significant progress to Logista's various businesses, with the Company making strong inroads in our diversification strategy and sustainability efforts. This report offers a comprehensive overview of our activity over the course of the year.

Despite the complex macroeconomic and geopolitical landscape, with rising inflation and climbing interest rates, Logista has demonstrated the strength and resilience of its business model again this year, remaining fully committed to growing and diversifying its current business operations.

Over the course of the year, we continued to seek opportunities to acquire companies that will bring business synergies. We recently announced an increase in the stake in Transports El Mosca, which specialises in domestic and global multi-modal ground and maritime transport services, to 73.33%. This transaction consolidated our position as a leading Spanish logistics operator, particularly in full-loadtemperature-controlled freight haulage in the south of Europe.

Another strategic deal was the acquisition of Gramma Farmaceutici, which provides specialist logistics services for the Italyn pharmaceutical sector. This acquisition is a key milestone in the expansion of our pharma segment into Italy, where we plan to continue to grow our business to the same strong position we have secured in the Iberian market. Not only will this allow us to provide pharma distribution services for Italian clients, it will also position Logista as a reliable logistics partner in the market with efficient, customised solutions for the pharmaceutical supply chain.

2023 Integrated annual report	7

A final key transaction I would like to highlight is the acquisition of SGEL Libros by Logista Libros. This acquisition further underpins the leadership position enjoyed by Logista Libros as Spain's largest independent book distributor, bringing on board notable publication collections and adding to its distribution catalogue of educational books, an area in which SGEL was highly active.

I would also like to take this opportunity to highlight some milestones and the solid performance registered by Logista's businesses. In the long- haul transport business, we successfully integrated various routes over the year between Logista Freight and Transports El Mosca, fitting security systems on the Transports El Mosca fleet to optimise the company's resources and reduce the number of LCL routes operated.

We also secured the Good Distribution Practice (GDP) certificate, allowing for the distribution of pharmaceutical products using the El Mosca fleet. In industrial courier services, we worked on integrating Logista Parcel and Carbó Collbatallé, which was acquired at the beginning of the financial year. Over the course of this integration, we have merged routes and optimised our corporate infrastructure by combining internal and third-party offices, generating synergies on last-mile delivery costs and reducing rental costs.

Nacex is also growing its footprint thanks to a new logistics platform in Vitoria, with a view to continuing to offer solutions to clients via a network that will keep us successfully positioned as the leader of the courier express segment. This new strategic opening is intended to bring us closer than ever

to existing clients, guaranteeing a responsible, sustainable service and upholding an outstanding quality standards. These quality standards have been validated again this year, as we secured ISO 9001 quality management system certification for the 25th year running. Thanks to technology development and a customer-centric approach, Nacex applies continuous improvement principles to guarantee the highest possible service quality standards.

The tobacco business in Iberia posted a substantial increase in inventory levels to €27 million, as a result of the hike in retail sale prices by tobacco manufacturers over the course of the year. Distribution volumes in Iberia were down 1.8% versus 2022 due to the drop in traditional tobacco volumes, which was partially offset by stronger distribution of next-generationproducts.

Logista has demonstrated

the strength and resilience of its business model

again this year, remaining fully committed to growing

and diversifying its current

business operations.

8	Integrated annual report 2023

Logista Pharma has continued to roll out new services for our clients, including home delivery of medicines from hospital and health centre pharmacy services and the distribution of veterinary medicines in response to the strong performance of the pet sector. The Ministry of Health also awarded Logista Pharma a contract to manage Spain's strategic reserve of medical supplies, protective equipment and pharmaceutical products. This strategic reserve was implemented under the early response plan, which seeks to ensure a swift response to any new health emergencies related to the Covid-19 pandemic. It is a tremendous source of pride and a great responsibility for Logista to be part of the healthcare and pharmaceutical transport sector, which is of crucial importance for society.

At Logista Libros, apart from the acquisition of SGEL already mentioned, another key milestone this year was the inauguration of brand new facilities specifically for e-commerce, allowing us to step up storage capacity and raise productivity in online order preparation by 100%, as well as offering an improved service to publishing houses and bookstores. Logista Libros has also successfully optimised its order taking, dispatch and delivery processes, allowing it to cut response times by up to 23%.

In the retail segment, Logista Retail unveiled a new warehouse in 2023 to respond to the organic growth registered by the business, including the expansion of distribution to new service station networks and the distribution of frozen products to the HoReCa sector, for example.

As for the activity outside Iberia, the next-generation products have enjoyed substantial sales growth

in Italy, especially heat-not-burn (HnB) tobacco products, which has offset the decline in sales of traditional tobacco products. Growth in the related products segment was also robust, with a material increase in sales in 2022 thanks to the inclusion of new products, such as disposable electronic cigarettes and beverages, under new brands.

In France, tobacco volumes continue to fall far faster than in Italy and Iberia, so we have made considerable efforts to optimise our French operations, closing a warehouse in southern France this year to streamline our structure in line with the needs of the French market. Finally, we grew sales of next-generation products in the related products segment in France, and in the Telecoms segment, we continued to develop the electronic transaction product range through third-party agreements with Uber Eats and EA Games, among others.

These efforts across the board delivered extremely positive financial results which continue to reflect the strength of the company and Logista's ability to adapt to complex situations.

Logista posted net profit of €272 million in the 2023 financial year, up 37% year on year. The Company generated €1,684 million in economic sales, up 36% versus the previous year, and adjusted EBIT was up 17% year on year to €366 million.

2023 Integrated annual report	9

These efforts across the board delivered extremely positive financial results which continue to reflect the strength of the company and its ability to adapt to complex situations.

Broken down by regions, economic sales for the financial year grew by 58% in Iberia to stand at €1,093 million, driven partly by the recent acquisitions, by 12% in Italy to €370 million and by 4% in France to reach a total of €226 million.

The 2023 financial year saw the company integrate new acquisitions, primarily Transports El Mosca and Carbó Collbatalle, which contributed significantly to sales growth. We also registered a substantial €30 million increase in inventory levels in the tobacco segment as a result of fluctuations in retail sales prices as well as excise duties. Finally, the current high interest rate scenario had a positive impact

on Logista's accounts, thanks to the existing line of credit with Imperial Brands, which generated financial income of €84 million.

Net profit for the financial year rose 37% to €272 million which, in line with the shareholder remuneration policy, will result in a significant increase in the dividend per share for the period.

We will continue to deliver on the diversification strategy by identifying new transactions like the opportunities we harnessed this year, maximising synergies through the integration of acquisitions and continuing to improve and optimise the various activities. The end goal in everything we do is to add value for our clients, shareholders and investors.

I encourage you to read this integrated annual report and the annual accounts to gain an insight into

our activities over the financial year and other key information about Logista.

We trust that you will continue to accompany us on our journey. All that remains is for me to thank the entire team for working with such determination to make Logista a European logistics leader, and of course,

to extend my thanks to you, our shareholders; your support is crucial to the company's continued success.

Thank you.

Íñigo Meirás

10	Integrated annual report 2023

GRI 2-1,2-6

1. Logista at a glance

Key figures

Sustainability

Governing bodies