Zwack Unicum : Quarterly Report

Interim Management Report

on the results of the Zwack Unicum Plc.

in the first quarter of the 2023-2024 business year

The Board of Directors of the Zwack Unicum Plc. has approved the Management's report about the results of the Company in the first quarter of the 2023-2024 business year.

The data have not been audited.

1. Analysis of the Management Report

Total gross sales of the Company were HUF 8 911 million - a year-on-year decrease of 10.9% (HUF 1 089 million). Net sales (sales revenues excluding excise tax and public health product tax [NETA]) were HUF 5 344 million, a year-on-year decrease of 6.2% (HUF 352 million). In this report on the 2023-24 business year the revenues derived from marketing expenditure reimbursement paid by brand owners are posted in the sales revenue in contrast to the earlier practice of posting them under the heading of Other operating income. The relevant data have been transferred also in the revenue figure of the previous corresponding period in order to ensure comparability.

Net domestic sales of products had a year-on-year decrease of HUF 354 million (7.1%). Net sales of own-produced goods in the domestic market decreased by HUF 335 million (8.6%) (HUF 3 557 million instead of HUF 3 892 million). Broken down, sales of premium products decreased by 7.7% and sales of quality products decreased by 11.2%. Within the premium category the sale of Kalumba dropped more than that of other products. New flavours (blood orange and mango) were introduced in the corresponding period of the previous business year, and there was a one-off spike in our sales figure as shops stocked up on them. In the quality segment Kalinka levelled off, while Hubertus decreased steeper than the average.

Net sales of traded products had a year-on-year decrease of 1.7%. Broken down, the revenues of the Diageo portfolio were down 5.4%, while those of other traded products grew by 21.0%. In the latter category, sales of wines and sparkling wines went up.

1

Data sheet heading (general)

Company name :	Zwack Unicum Plc.	Telephone	456-5218
Company address:	1095 Bp. Soroksári út 26	Telefax	216-4981
Business branch	Food	E-mail	[e-mail]
Period	2023-24. business year, I. quarter	Investor Relations	Balázs Szűcs
	(01.04.2023-30.06.2023)

The accelerating downward slide of the Company's domestic sales is partly due to a countrywide decline in consumption caused by high inflation. During the quarter under review the Company's sales volume in the retail channel dropped on average by nearly 12%. Moreover, the volume of the Company's sales in the wholesale channel showed a marked year-on-year decline (26%), which was mainly due to the extra high sales figures of the corresponding period of the previous business year. On 1 July 2022 the Company made an unscheduled mid-year price hike, which had prompted our partners in the wholesale channel to stock up in advance.

According to the April-June 2023 market research data for the retail turnover, the Hungarian country-wide taxed spirits market declined by 9.8% in volume terms, while it grew by 4.7% in value. In the same period, the Company's retail sales in volume decreased by 11.7% and in gross value by 4.4%. The reason for the decrease in value is that we could not increase our prices in size of inflation and on the level of total cost increase.

The export of products fetched HUF 490 million - a year-on-year decrease of 13.3% (HUF 76million). Among our major export markets, our sales to Italy dropped by 18% and to Romania by 24%. By contrast, exports to Germany rose by 8% and the duty fee segment climbed up 12%. The latter was mainly due to the steady growth of people who travel.

The revenue from services was HUF 190 million - a year-on-year increase of 68.1% (HUF 77 million). Within that category, the revenues derived from marketing expenditure reimbursement paid by brand owners - which, since the rearrangement of certain accounting categories in our latest Report, has been posted under the heading of Sales revenue instead of Other operating income - went up by HUF 69 million (68.7%).

Material-type expenses increased by HUF 73 million (3.5%). As the net sales dropped by 6.2%, the gross margin ratio was by 3.8 percentage points lower than a year before (59.8% instead of 63.6%). The rise in per unit price of materials is explained, firstly, by a drastic increase in the procurement prices of raw materials and, to a lesser extent, unfavourable changes in our product mix. The share of traded products with a lower margin went up.

Expenditure on employee benefits increased by HUF 150 million (16.0%). At the beginning of the business year, wages and salaries were raised on average by 15.4%. The Annual General Meeting held on 28 June 2023 decided that the dividend per share would be HUF 1 700 - by HUF 200 higher than in the previous business year. Under the IFRS, the dividend payable after liquidation preference shares, and any change in related liabilities, have to be posted as a personnel type of cost. Consequently, the higher dividend increased the employee benefit expenditure by HUF 7 million and the change in related liabilities raised the employee benefit expenditure HUF 24 million. There were no noteworthy year-on-year changes in the other personnel-related expenses.

Depreciation increased by HUF 20 million (13.8%). Broken down, the immediate depreciation of pallets, whose price has been steadily rising, was by HUF 4 million higher. The depreciation

2

Data sheet heading (general)

Company name :	Zwack Unicum Plc.	Telephone	456-5218
Company address:	1095 Bp. Soroksári út 26	Telefax	216-4981
Business branch	Food	E-mail	[e-mail]
Period	2023-24. business year, I. quarter	Investor Relations	Balázs Szűcs
	(01.04.2023-30.06.2023)

of property, plant and equipment increased by HUF 16 million - which was mainly justified by the geothermal facility in Dunaharaszti, the facility being inaugurated in February 2023.

The other operating expenses dropped by HUF 46 million (4.1%). Freight costs decreased by HUF 20 million as turnover was lower and vehicle fuel costs went down. Forint exchange rate showed less fluctuation, so in the first quarter of the business year the Company's exchange loss was lower by HUF 41 million than in the same period last business year. In the meantime, expenditure on corporate security and property insurance went up. Expenditure on the promotion of our brands was as high as before.

The other operating income increased by HUF 28 million (186.7%). During the last quarter redundant pallets were sold in the value of nearly HUF 20 million. Several motorcars were also sold and profit on those deals are shown in that line of the income statement.

The profit from operations was HUF 897 million - lower than that a year before by HUF 521 million (36.7%).

During the period under review the Company gained a net financial income of HUF 99 million, all of which was interest on our fixed deposits.

Taxes levied on the Company's profits showed a year-on-year decrease of HUF 49 million (20.4%). Corporation tax was by HUF 43 million lower. The local business tax and the innovation contribution dropped by HUF 8 million (7.5%). The deferred tax expenditure showed a year-on-year increase of HUF 2 million.

All in all, the Company's profit after taxation was HUF 805 million. Though it was lower than that a year before by HUF 449 million (35.8%), it exceeded our plan target. The EPR (Extended Producer Responsibility) fee, which was introduced in Hungary on 1 July 2023, will considerably increase this Company's expenses (just as for the rest of the corporate sector in Hungary). On the plus side, the exchange rate of the Forint to Euro is lower than predicted and there have been favourable tendencies in the procurement prices of raw materials. That having said, we sense risks in the inflation-caused drop in overall consumption - which might have a marked influence on this Company's performance in the remaining part of this business year. Nonetheless, it is currently too early for any concrete outlook on the total business year.

The stock of fixed assets increased by HUF 280 million (7.8%). The main items here are projects that have been realized in Dunaharaszti: a geothermal power facility and the installation of solar panels.

Inventories grew by HUF 845 million (24.7%), whose main cause was an increase in the inventory of own-produced goods and their raw materials in the wake of a steep rise in prices. The value of the inventory of purchased finished products also grew, as explained by the rise in procurement prices.

3

Data sheet heading (general)

Company name :	Zwack Unicum Plc.	Telephone	456-5218
Company address:	1095 Bp. Soroksári út 26	Telefax	216-4981
Business branch	Food	E-mail	[e-mail]
Period	2023-24. business year, I. quarter	Investor Relations	Balázs Szűcs
	(01.04.2023-30.06.2023)

Cash and cash equivalents decreased by HUF 2 259 million (37.5%) as a consequence of the falling sales, the increase in the value of our inventories and the projects to have a geothermal facility and solar panels in Dunaharaszti.

Accounts payable and other liabilities decreased by HUF 1 080 million (10.6%). The lower sales entailed lower excise tax and VAT payment liability. That said, the higher dividend raised liabilities by HUF 400 million.

There were no further noteworthy changes in the lines of the balance sheet.

The Zwack Unicum Plc. spent HUF 167 million on fixed assets in the first quarter of the business year. Investments related to maintaining the Company's fleet of vehicles accounted for a third of that sum with the rest having been spent on projects related to IT equipment, improvement of efficiency and other efforts in the field of production and marketing.

2. Business Environment of the Company

Zwack Unicum Plc. is the biggest player in Hungary's spirits market. As the Hungarian domestic market accounts for nearly 90% of the Company's revenues from selling products, the domestic demand plays a definitive influence on the Company's results. The consumption of premium alcoholic drinks had grown in Hungary in the past few years, but that tendency drastically changed due to the pandemic in 2020. Whereas the previous business year saw an uptick in consumption, in the current business year we have seen a high rate of inflation, increased shelf prices and higher taxes. Those developments have been increasingly slowing down consumption, and in the past few months we witnessed a marked downward movement in consumption.

3. Objectives and Strategy of the Company

The Company's primary activity is producing and selling branded premium and quality alcoholic drinks. The principal aim of Zwack Unicum Plc. is to maintain its market leading role in spirits in Hungary. Furthermore, we aim to strengthen the export markets.

In Hungary the Company is the official distributor of several international brands like the Diageo portfolio. Thus, in addition to the self-manufactured premium brands of outstanding importance in the Hungarian market (Unicum, Fütyülős, Vilmos, St. Hubertus, Kalumba and Kalinka), Zwack Unicum Plc.'s portfolio is enriched by world brands such as Johnnie Walker, Baileys, Captain Morgan and Tanqueray. With such a portfolio our Company offers an impressively rich assortment of branded products for consumers.

Product innovation and successful product launch are crucial means of keeping and strengthening the market leader position. Regarding exports, we intend to increase their share

4

Data sheet heading (general)

Company name :	Zwack Unicum Plc.	Telephone	456-5218
Company address:	1095 Bp. Soroksári út 26	Telefax	216-4981
Business branch	Food	E-mail	[e-mail]
Period	2023-24. business year, I. quarter	Investor Relations	Balázs Szűcs
	(01.04.2023-30.06.2023)

in sales revenue of products from an actual 11% to 15% in the next three years. Our core export markets are Italy, Germany and Romania.

As from autumn 2019 the Company has been exclusively using green electricity. During the 2022-23 business year the Company completed heat pump and solar panel projects in Dunaharaszti. Recently we started to utilize of geothermic energy, and further steps are planned towards promoting the circular economy. Further environment protection projects are underway and being evaluated and planned (Kecskemét and Soroksári plant). To see our Sustainability Report 2022/23, please visit our website.

(https://zwackunicum.hu/en/cegunk/fenntarthatosag-napjainkban/)

4. Main Resources and Risks of the Company's Activities

• Material Resources

• Production and Plant

The Company has three production plants. Unicum production and part of early maturation are done in the Unicum plant in Soroksári út, Budapest. The Dunaharaszti plant takes care of additional maturation and bottling of the Unicum liqueur, and also the bottling of the majority of the other products produced by the Company. The fruit palinka and gin distillery operates in Kecskemét, and this is where the small series products are bottled.

The Company intends to maintain those three production plants in the long run. The output capacities of the plants concerned are appropriate for bulk production and bottling.

As for planned capital expenditure in forthcoming years, energy-efficiency investments are prioritized.

• Financial Position

The Company's financial position is stable and it always fulfils its financial obligations on time. Financial transactions were made by UniCredit, Erste and K&H Bank from among the largest commercial banks.

• Human Resources

Average statistical headcount of the Company in the first quarter of the business year was 255 (it was 255 during the last business year).

In the Hungarian spirits market the Zwack Unicum Plc. has the biggest human resources for sales and marketing. Indeed, the related competitive edge in distribution and innovation are among the Company's most important strengths.

5