Waberer International : Consolidated Financial Statements & Business Report (AGM submission, not approved)

Contents

Message from the CEO	3
Management Report	4
About Waberer's Group	4
Key operational indicators	4
Presentation of the company structure	5
Strategy	6
Contract Logistics segment	6
Transportation and freight forwarding	8
Insurance	8
Business environment and results	9
Economic environment	9
Revenue	10
Gross profit, EBITDA and EBIT	10
Net Income	11
Cash Flow	11
Debt	12
Main events in 2023	13
Ownership structure / Capital market performance / Investor relations	14
Shareholder structure	14
Capital market performance	15
Analysts	15
Investor Relations	16
Digital transformation	16
Technical improvements	17
Sustainability	17
EU Taxonomy report	19
Compliance	20
CSR activities	20
Human resources	23
Corporate governance and corporate bodies	23
Board of Directors	23
Chief Executive Officer	25
The presentation of the management	25
Supervisory Board	26
Audit Committee	28
Nomination and Remuneration Committee	29
Internal controls and risk management	29
System of internal controls	29
Risk management framework	30
Risk factors	31

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Market risk factors	31
Regulatory risk factors	32
Financial risk factors	33
Operational risk factors	34
Risk factors specific to insurance	34
Fight against corruption and bribery	35

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Message from the CEO

"2023 has been a very eventful year for Waberer's Group. Industrial production and consumption data in Western Europe and Hungary, our main markets, stagnated or were even slightly down throughout the year, directly affecting demand for logistics services, while the Hungarian insurance market was forced to deal with the challenges of the special insurance tax. In terms of operations management, the main challenge for us throughout the year was, accordingly, to identify segments and customers in the market that are less affected by the general negative economic environment, relying on our diversified customer and service portfolio, and to allocate our logistics infrastructure towards these customers with the appropriate efficiency. As a testament to the effectiveness of our work, in 2023 we were able to increase the Group's sales revenue by almost 5% and our annual EBIT generation capacity increased to EUR 42.8 million, the highest in the history of Waberer's Group, which I am particularly proud of. The continuous improvement in our ability to generate profits has enabled us to share our results with our shareholders in the form of dividends in 2023, for the first time in our stock market presence.

In 2023, we updated Waberer's Group's medium-term business and ESG strategy, which will guide and shape our activities in the coming years. Based on this strategy, we intend to grow Waberer's Group into the leading complex logistics provider in the Central and Eastern European region which, according to our plans, will deliver significant growth in earnings. We already managed to take significant steps to implement the strategy in 2023, with starting the development of the largest warehouse in the history of Waberer's on the outskirts of Budapest, the purchase of land in Debrecen to develop a new logistics centre, and the signing of a sale and purchase agreement to acquire a majority stake in the rail logistics leader PSP (Petrolsped) Group and the Serbian distribution company MDI. The first results of these actions will be visible as early as 2024. In 2024, we plan to continue on the path we have started, and I am confident that our investors will appreciate the results achieved, allowing Waberer's shares to remain an attractive investment target in 2024.

Finally, I would like to thank my colleagues for their work throughout the year and ask them to continue to work with the same enthusiasm to achieve our motivating goals for 2024."

Zsolt Barna

Chief Executive Officer

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Management Report

About Waberer's Group

3 main areas of operation:

• Regional Contract Logistics (RCL) segment: Market-leadingHungarian complex logistics service provider with an integrated service portfolio tailored to industry needs and customers (distribution, warehousing, home delivery, production support logistics, container transport, fresh goods logistics, etc.)
• International Transport Segment (ITS): One of Europe's leading FTL (Full-Truck Load) transport service providers, with own fleet and subcontractor operations, as well as rail and intermodal services (combination of rail and road transport), focusing on Europe's main industrial centres (UK, Germany, France, Italy, Spain, Poland, Hungary, Slovakia) and Central and Eastern Europe.
• Insurance segment: Insurance business focusing on non-life insurance products, with a focus on Hungary. Specialist in passenger and commercial vehicle insurance (MTPL, CASCO, CRM) with a significant market share.

Key operational indicators

International fleet: 2,120 vehicles

Domestic fleet: 771 vehicles

Forklift fleet: 320 units

Warehouse area: 229 thousand sqm

Number of employees: 6,044

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Presentation of the company structure1

WABERER'S INTERNATIONAL NYRT.

INTERNATIONAL TRANSPORT SEGMENT:

WABERER'S NETWORK KFT.

NEXWAYS CARGO KFT.

PETROLSPED KFT.

PULTRANS KFT.

PSP TERMINAL KFT.

DELTA-RENT KFT.

ALL IN ONE TRANSPORT KFT.

SC WABERER'S ROMANIA SA

LINK SP. ZOO

NEWDEFINE SP. ZOO

WABERER'S INTERNATIONAL NYRT.

SERBIAN BRANCH OFFICE

PSP CARGO GROUP

AUSTRIA G.M.B.H

PSP CARGO GROUP

S.A. ROMANIA

PSP CARGO GROUP S.A.

HUNGARIAN BRANCH OFFICE

REGIONAL CONTRACT LOGISTICS (RCL)

SEGMENT:

WSZL KFT.

WSZL AUTOMOTÍV KFT.

SINOWA INTERNATIONAL KFT.

KOI PROPERTY KFT.

DEWAB LOGISTICS KFT.

KÖZDŰLŐ-INVEST KFT.

RAPID TEHERAUTÓ SZERVÍZ KFT.

WPL-LOG ZRT.

WPL INGATLANFEJLESZTŐ KFT.

WABERER'S SLOVAKIA S.R.O

INSURANCE SEGMENT:

GRÁNIT BIZTOSÍTÓ ZRT

COMPANIES INCORPORATED IN HUNGARY

ENTITIES INCORPORATED ABROAD

1 As of 20 March 2024.

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Strategy

At the end of 2023, Waberer's Group updated and published its Group strategy towards 2027. The updated strategy builds on the development paths set in 2021 and focuses on further extending the achievements of the past 2 years.

Our Group's vision is to grow Waberer's Group into the leading complex logistics service provider of the Central and Eastern European region.

The main pillars of the strategy to achieve this vision are:

• Infrastructure and technology development
• Increasing added-value
• Diversification
• Sustainability

The following development directions have been defined for the various business segments based on the above pillars:

In implementing the pillars of our strategy, we pay particular attention to sustainability aspects

CONTRACT

LOGISTICS

TRANSPORTATION & FREIGHT FORWARDING

INSURANCE

INFRASTRUCTURE AND TECHNOLOGY DEVELOPMENT

• Increasing warehouse capacity (national coverage) in an energy- efficient manner
• Expanding the alternative powertrain fleet
• Fleet modernisation for more efficient operations
• Digitalisation of back-officeactivities for claims settlement and customer service
• Expansion and digitalisation of sales channels

INCREASING ADDED-VALUE

• In-house logistics growth
• Establishing fulfilment logistics capability
• Home delivery growth
• Increasing the share of revenue from specialised FTL services
• Delivering full digital customer experience

DIVERSIFICATION

• Regional expansion (acquisition of MDI)
• Entering new specialised logistics service segments
• Increasing the share of multimodal services (acquisition of Petrolsped)
• Expansion of the product portfolio
• Exploring the possibility of entering regional markets

Contract Logistics segment

Within the framework of the Group's Contract Logistics segment, which provides complex logistics services, we plan to implement the following major developments:

Infrastructure and technology development

At the end of 2023, the segment provided warehousing and warehouse manipulation services on an area of nearly 230,000 m2. Current warehousing activity is mainly performed in leased warehouses and concentrated in the Budapest area. In 2022, we started the development of our first modern, company- owned warehouse in Ecser, along the M0 ring road bypassing Budapest. The close to 47,000 sqm

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warehouse will be completed in the first half of 2024, after which the warehouse space used by the segment will increase to approximately 300,000 m2, and at the same time, the cost level of warehousing- related activities will decrease, as owning warehouse capacity will result in a significant cost reduction compared to leasing warehouses. In line with the industrialisation efforts in rural areas, we plan to further expand owned warehouse capacity in major industrial centres in the near future. As a first step in our development plans, in 2023 we acquired a plot of land in Debrecen suitable for the development of a logistics centre, on which we plan to build a 20,000 m2 logistics centre in 2025, which will be able to serve the logistics needs of manufacturing companies in the region and further increase the efficiency of our national distribution activities. In the coming years, we plan to expand our warehousing capacity in more non-Budapest cities, in line with market demand and the pace of industrial production capacity expansion.

The segment carries out its domestic distribution activity with nearly 800 vehicles. For 3 years in a row now, we have been providing our customers with a distribution service with low environmental footprint using alternative powertrain vehicles, mainly LNG and electric. Given the current technological limitations (800-900 km range for LNG and 2-300 km range for electric vehicles), these vehicles can be integrated into our domestic distribution activities with greater efficiency compared to long-distance international freight transport activities. Our customers' demand for these low environmental footprint distribution services is growing radically. In response, we have built up our capabilities to offer tailor-made solutions to meet these unique customer needs, giving us a significant competitive advantage. In line with our corporate and ESG strategy, we intend to further increase the share of alternative powertrain vehicles in our fleet and maintain Waberer's leading position in green logistics services. In addition to the technologies currently in use and being tested, we are paying particular attention to the emergence of hydrogen-powered vehicles, we expect this technology to play a significant role in the long-distance freight transport industry in the long term, and we intend to start testing this technology within the period covered by our strategy, for which we have entered into a strategic alliance with other potential users and green hydrogen production companies in Hungary.

Increasing added-value

In the contract logistics segment, we aim to focus sales on activities that can provide the biggest added- value to customers, require the highest expertise and accuracy from the logistics provider, and can become an addition to the existing service portfolio to foster deeper customer relationships. Accordingly, we would like to further expand our portfolio of customer-facingin-houselogistics services, which support the customers' existing manufacturing processes in the automotive, oil and chemical industries, and which are to be carried out at the customers' site. We also want to increase our fulfilment and home delivery capabilities to support online trade.

Diversification

The contract logistics segment is currently focused on Hungary. We aim to build a complex logistics service portfolio covering the entire region to exploit further growth opportunities and respond to the increasing demands of multinational clients. We intend to enter markets in neighbouring countries primarily through acquisitions. Given the fact that an efficient logistics operation can only be established with the right economies of scale, entering markets through acquisitions can provide us with the infrastructure, workforce and existing customer portfolio to allow us to serve customers at the regional level. The acquisition currently focuses on Poland, the Czech Republic, Slovakia and the Western Balkans.

Further diversification of the segment focuses on services and special sub-segments where we currently have a low market share. Potential segments include serving pharmaceutical customers, and logistics services related to waste recycling, etc.

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Transportation and freight forwarding

Infrastructure and technology development

The basis of own-fleet international transport is the existence of a fleet that can be operated efficiently and ensures reliable availability. As a result of replacing the elements of our fleet over the past 2 years, the Group has reached its strategic target of having an average fleet age of 2.5 years. In the coming years, we intend to maintain this average age and continue the process of ongoing fleet renewal, while we do not plan to make any significant changes to the size of the fleet, fine-tuning it in line with the results of current tenders.

Increasing added-value

In the international transport segment, a turning point is brought about by the shift to key account focused operations. The transport service offered by Waberer's can provide a competitive service to customers who expect outstanding service quality, availability of additional services (e.g. tracking, special cargo, flexible capacity allocation, alternative fuels, etc.) and customer-oriented operation. Accordingly, we intend to further increase the weight of key account customers and the ratio of freights requiring additional services within the operation, which we aim to increase to 60% by 2027 through the active management of the customer portfolio and sales focus.

Diversification

In international freight forwarding, Waberer's has to date focused on road transport and, to a lesser extent, intermodal transport, which can be considered a combination of road and rail transport. There is a growing expectation from both regulators and customers to significantly reduce the environmental footprint of long-distance transport. This objective can be supported by carrying out these transport tasks by rail. Recognising this, Waberer's Group signed a share purchase agreement in 2023 to acquire a majority stake in PSP (Petrolsped) Group, a company with significant infrastructure and experience in rail logistics. The transaction was successfully closed in 2024. We plan to use PSP (Petrolsped) Group as basis for the future transformation of our services to rail, and through this acquisition Waberer's will be able to enter the market for the transport of bulk goods that are already predominantly transported by rail (construction materials, grain, oil products, etc.). In addition to the rail logistics market, in 2023 we also entered the maritime logistics services market, further strengthening our multimodal capabilities and enabling us to provide intercontinental transport services.

Insurance

When the insurance business was set up as part of the Group, the primary objective was to efficiently manage the insurance of the Company's own fleet. Over the past 10 years, the insurance company has successfully expanded first in the commercial vehicle market and then in the passenger car market, becoming one of the top 3 insurers in the MTPL and CASCO market, with nearly 90% of its revenue and profit generated from third-party customers. The lowest operating costs in the Hungarian insurance market form the basis of growth and profitability. This has been highly digitalised and based on efficient internal processes from the very start. The strategic objective of our Insurance segment is the ongoing digitalisation of back-office and customer relationship processes, which will ensure a low operating cost level providing a competitive advantage in the long term. In addition, in the spirit of further diversification, we intend to enter new market segments where Gránit Biztosító's operating model (e.g. in the home insurance market) can also provide a competitive advantage, and to build strategic alliances to expand our sales channels. In order to achieve our diversification objectives, we are also continuously exploring the possibility of participating in the market consolidation process.

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As a result of implementing the above strategy, we plan to nearly double the Group's consolidated EBIT generation capacity of 2022 to EUR 61 million, with sales of over EUR 1.1 billion. To implement the strategy, we expect incremental investment of more than EUR 100 million in the period until 2027, of which almost 50% is already secured.

Business environment and results

|Income statement (EUR in million)1

	2023	2022	Better (worse)
Revenue		710.9	679.4	4.6%
Direct costs		(621.2)	(593.7)	(4.6%)
of which: depreciation and amortisation		(52.8)	(46.7)	(13.1%)
Gross profit		89.7	85.6	4.8%
of which: excluding depreciation and amortisation		142.5	132.3	7.7%
OPEX2		(46.9)	(49.1)	4.4%
Operating Income		42.8	36.6	17.0%
Financial result		(4.0)	(11.4)	64.7%
of which: non-cash FX effect	6.5	(4.0)	264.6%
Taxes		(9.1)	(5.8)	(55.5%)
Net income		29.7	19.3	53.6%
Net income excluding non-cash FX effect		23.1	23.3	(0.7%)
Non-recurring items		-	-
EBITDA		95.6	83.3	14.8%
EBIT		42.8	36.6	17.0%
Gross margin	20.0%	19.5%	0.6 pp
EBITDA margin	13.4%	12.3%	1.2 pp
EBIT margin	6.0%	5.4%	0.6 pp
Net income margin	4.2%	2.8%	1.3 pp
Average number of trucks	2 891	2 775	4.2%
Average number of employees	6 044	5 816	3.9%
Average number of truck drivers	3 681	3 464	6.3%

1. Figures adjusted for better comparability, re-categorising the effect of insurance-related provisions, an OPEX item, as Direct Costs. EBITDA is not affected.
2. The OPEX line includes the following lines in the consolidated statement of comprehensive income: Indirect costs, Other income, Interest income calculated using the effective interest method, Other expenses, Change in results of embedded derivatives (+/-), Net impairment on financial assets

Economic environment

Given its operating model and geographic focus, demand for Waberer's Group's services is driven primarily by changes in industrial production and household consumption trends in the main industrial production hubs of Western Europe (UK, Germany, France, Italy, Spain, Benelux), as well as Hungary and Poland. In 2023, industrial production volumes in the Western European countries relevant for Waberer's declined by an average of 0.8% year-on-year, while the relevant Eastern European countries experienced a smaller decline of 0.2% on average. The volume change in the retail trade of non-food products shows a similar decline in the relevant Eastern European countries, down 0.2% year-on-year,

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