Zwack Unicum : Annual Report

SÁNDOR ZWACK

Chairman of the Board of Directors

Dear Shareholders!

After the Covid-dominated periods of the last several years, life presented our Company with a new challenge, and we once again successfully overcame this challenge. After the post-Covid normalization of supply chains, trade, and consumer and business confidence, the resilience that characterizes us was once again demonstrated by our Company under the wartime and inflationary economic conditions that characterized the entire 2022 business year.

Rising energy, raw material and consumer prices and customer reactions to these, as well as the impact of inflation on wages, pose new commercial and business challenges for our Company. The success of our business year even in the face of sales volumes' decline in line with falling purchasing power, promotions and discount channels gaining importance, the two price increases during the business year and the weakening of consumer confidence in the future, was due to the outstanding results of the first four months and to the rapid and effective responses given to the challenges of the subsequent period which was determined by the economic effects of inflation and the war.

Our Company, worthy of its reputation, also looked after its employees and responded promptly to inflationary challenges by providing utility subsidies, a contribution to commuting costs and a one-off extra benefit to help employees and their families. Caring not only for our employees but also for future generations is important to us, which is why we have successfully installed a solar farm and heat pump system at our Dunaharaszti plant, in line with our sustainability principles. From the next business year onwards, this investment will not only help us achieve our environmental objectives but will also benefit us by energy and cost savings in the face of soaring energy prices.

As in the previous business year, our Company achieved a very successful result this year. Despite a general decline in consumer confidence, we were able to capture the attention of our consumers through our brand-building marketing activities. Our sales team

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successfully coped with the difficult period of two price increases and an increased pressure for discounts and promotions thanks to a well-planned promotional and pricing strategy, so we managed to close the year with a 1.9% increase in volume and a 14,2% increase in turnover excluding excise duty. A significant part of the sales increase was driven by the Unicum brand and its flavor variants (+9.5%) and the super-premium Unicum Riserva (+5.2%), supported by the sales increase of Fütyülős (+17.3%), St Hubertus (+12.6%), Kalinka vodka (+29.2%) and Kalumba gin (+137.5%).

In addition to our leading role in the domestic market, the Company's foreign expansion is of strategic importance for us. Our total export turnover increased by 10.5%, of which we achieved a 12% growth in the Italian market, our priority market, and a 52% in the Duty-Free sector, which is again growing rapidly in passenger traffic.

In addition to the business result, Zwack Unicum Plc will continue to act as a responsible company towards both the environment and our employees. To alleviate the pressure on our employees due to the economic situation caused by the war, in the next business year we will include the extra benefits in the salary, maintain the home office option and plan to extend our environmental protection and energy saving investments to our other factories as well.

Dear shareholders, I am proud that, even in the difficult economic environment, we can once again look back on a successful business year, thanks to the competence and commitment of our staff. Perceiving the global political and local economic changes, seeing the impact of high inflation and rising procurement prices on production costs and purchasing power, I believe it is important that we continue to build our efficiency and effectiveness also in the coming years around our priorities: our business and sustainability principles, our brand and innovation strategy and our care for our employees.

Sándor Zwack

DR. HUBERTINE UNDERBERG-RUDER

Chair of the Supervisory Board

Our Company - also in the last business year - has been successful. I am alleviated that this is true despite a volatile environment consisting of post-Covid, the Russian-Ukrainian war, rising interest rates and prices for raw materials, energy and services and many other challenges. How was this success possible? How did Zwack Unicum´s team manage to resiliently steer the company with all the employees through these troubled waters of unpredictable and unexpected changes?

The first answer needs to be that this is a successful team effort, to which most thankfully everybody has contributed. Basis for this teamwork is Zwack Unicum's strategy, based on our brands and their building, efficient and effective processes focused on consumer and client centricity and, last but not least, our values. Let me name values like respect for and enrichment through different views, responsibility for our impact be it on the society or on the environment, both tradition and innovation and entrepreneurial thus long-term thinking. This has enabled the Company to propel through all the economic and social difficulties of the last year.

In the domestic market Zwack Unicum's leading position remained dominant and was further strengthened by brand, production, and economic innovations. The Unicum Barista innovation, developed based on deep consumer insights and launched last year, successfully established itself in the herbal liqueur category, contributing significantly to the overall sales of the Unicum brand. The rejuvenated Fütyülős brand was extended with a new watermelon flavor variant which was introduced with an outstanding success in the second half of the year. Thanks to the launch of the mango and blood orange flavors of Kalumba gin, the brand is taking a leading role in the growing gin category. Innovation is a priority and part of the company's values and DNA. It goes far beyond brand and product innovation. Also, the value sustainability is a priority in

our Company. As a result of both, we have been active in various environmental projects and energy saving investments. This year we put into operation a heat pump system supported by a solar park at the end of the business year, which meets the energy needs of our Dunaharaszti factory economically while minimizing CO2 emissions (for more visit www.zwackunicum.hu).

Our employees were confronted with many new challenges in the two years of several waves of Covid and the economic consequences of the Russian-Ukrainian war. The Company proactively explored the fields of "new work" and tried to mitigate the impact of the above with periodic extra support. The various benefits and the possibility to work from home also after the end of the Covid period contributed to the fact that, as a caring Company, we aim and can work with employees committed on the long-term and have a low employee turnover.

Despite the difficulties, our business year is another success story. Zwack Unicum managed this even in the face of negative economic conditions and changes in consumer behavior. The successful business years has shown that a well-designed business strategy, being based on premium brand building rooted likewise in tradition and innovation, as well as an employer mindset that assumes responsibility and cares for the society and the employees, can create a strong foundation even in a volatile environment with the constant need to further embrace change.

The Supervisory Board would like to say thank you to the Management and each and every Employee of the Company again this year and would like to assure them of our continuous support. Dear Shareholders, we are also thanking you for the trust you placed in the Company and assure you of our continued work to deserve this also in the future.

Dr. Hubertine Underberg-Ruder

ZWACK UNICUM PLC. ANNUAL REPORT 2022 - 2023

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Distribution of voting shares of Zwack Unicum Plc.

Peter Zwack

& Consorten HAG

50% +1 share

Diageo Holdings

Netherlands B.V.

26%

50% 26%

24%

Public

24% -1 share

ZWACK UNICUM PLC. ANNUAL REPORT 2022 - 2023

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Table of contents

LETTER TO SHAREHOLDERS	3
DISTRIBUTION OF VOTING SHARES OF ZWACK UNICUM PLC.	4
DECLARATIONS*	6
FINANCIAL CALENDAR	6
ZWACK UNICUM PLC. - SEPARATE FINANCIAL STATEMENTS FOR THE FINANCIAL	7
YEAR ENDED 31 MARCH 2023
PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS*
NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR	10
ENDED 31 MARCH 2023
PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS*
INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS IN COMPLIANCE	39
WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
BUSINESS AND MANAGEMENT REPORT	45
ON THE FINANCIAL YEAR ENDED ON 31 MARCH 2023*
REPORT OF THE SUPERVISORY BOARD AND THE AUDIT BOARD	52
ON THE 2022-2023 BUSINESS YEAR
SUPERVISORY BOARD	54
BOARD OF DIRECTORS	55
MANAGEMENT OF THE COMPANY	56
MARKETING HIGHLIGHTS OF THE 2022-2023 BUSINESS YEAR	57
SPIRITS FROM THE ZWACK HOUSE	72
IZABELLA ZWACK WINE SELECTION	78
KEY CONTACTS	80

*This is an English translation of the separate financial statements for the financial year between

1 April 2022 and 31 March 2023 issued in Hungarian. The content of the English translation is consistent with the content of the separate financial statements prepared in xhtml format.

ZWACK UNICUM PLC. ANNUAL REPORT 2022 - 2023

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Declarations

We, the undersigned Zwack Unicum Liqueur Industry and Trading Public Limited Company, hereby declare that the facts and statements contained in the Annual Report covering the Company's business year of 2022-2023 (1 April 2022 - 31 March 2023) are true in all respects, and that the Annual Report does not hide any fact that is of importance in assessing the situation of the Company.

Financial reports (Statement of Financial Position, Statement of Comprehensive Income, Cash Flow, Statement of Changes in Equity and Notes to the Financial Statements) presented in the Annual Report were prepared according to the applicable accountancy regulations and our best knowledge. Financial reports give real and authentic picture of the assets, liabilities, financial situation and profit of the issuing company.

Business and Management Report, which is part of the Annual Report, gives authentic picture of the situation, development and achievement of the issuing company, reciting the major risks and factors of uncertainty.

The Company has fulfilled the periodic and extraordinary duties of disclosure, as required by the Capital Market law.

The Company's audit has been provided by KPMG Hungária Kft. The Auditor of the Company did not receive other assignment than the audit of the annual report of the Company.

Budapest, 25 May 2023

Katalin Hollósi	Balázs Szűcs
Chief Accountant	Investor Correspondent

based on the power of attorney provided by:

Sándor Zwack	Frank Odzuck
Chairman of the Board	Chief Executive Officer

Financial calendar

E V E N T	DAT E
Payment of dividend	As from 26 July 2023
Publication of the report about the first quarter of 2023/2024*	3 August 2023
Publication of the report about the first half year of 2023/2024*	2 November 2023
Publication of the report about the first three quarters of 2023/2024*	6 February 2024
Publication of the report about the financial year 2023/2024*	24 May 2024
Annual General Meeting	26 June 2024
* not final dates

ZWACK UNICUM PLC. ANNUAL REPORT 2022 - 2023

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Zwack Unicum Plc. - Separate financial statements for the financial year ended 31 March 2023

PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS

Statement of financial position

FOR THE FINANCIAL YEAR ENDED 31 MARCH 20232

	NOTE
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	5
Intangible assets	6
Investment in associate
Employee loans	7
Deferred tax asset	19
CURRENT ASSETS
Inventories	8
Trade receivables	9
Other financial receivables	9
Current income tax
Non-financial receivables	9
Cash and cash equivalents	10
TOTAL ASSETS
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital
Share premium
Retained earnings
LIABILITIES
NON-CURRENT LIABILITIES
Leases	11
Long-term employee benefits	11
Deferred income	11
CURRENT LIABILITIES
Trade and other payables	12
Leases	12
Amount payable (due) to customers	12
Current income tax	12
Employee benefits	12
Other taxes and other non-financial liabilities	12
Short term loan
Provisions	13
TOTAL EQUITY AND LIABILITIES

**See Note 2 (t)

The Financial statements were accepted by the Board of Directors on 25 May 2023 and signed on their behalf by:

31 MARCH	31 MARCH	1 APRIL
2022	2021
2023
Restated *	Restated*
(HUF mill)
(HUF mill)	(HUF mill)
4 121	3 491	3 652
3 946	3 309	3 442
75	78	85
0	0	16
1	1	0
99	103	109
11 312	11 601	9 406
4 517	3 140	2 800
3 149	3 198	2 410
109	70	56
0	0	77
104	114	74
3 433	5 079	3 989
15 433	15 092	13 058
9 260	8 812	7 012
2 000	2 000	2 000
165	165	165
7 095	6 647	4 847
6 173	6 280	6 046
680	652	635
24	24	39
573	534	492
83	94	104
5 493	5 628	5 411
2 543	2 475	1 690
6	19	15
547	781	614
195	167	0
883	808	825
1 306	1 378	1 007
0	0	1 250
13	0	10
15 433	15 092	13 058

based on the power of attorney provided by:

Katalin Hollósi	Balázs Szűcs	Sándor Zwack	Frank Odzuck
Chief Accountant	Investor Correspondent	Chairman of the Board	Chief Executive Officer

ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

ZWACK UNICUM PLC. ANNUAL REPORT 2022 - 2023