Inpost S.A.

Interim / Quarterly Report • Sep 8, 2021

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS of the InPost SA and its subsidiaries

for the period of 6 months ended 30 June 2021

• Luxembourg, 7 September 2021 -

TABLE OF CONTENTS

1 ADDITIONAL INFORMATION NOTES AND EXPLANATIONS
1.1 Additional information notes and explanations
1.2 Composition of the Group
2 Basis of preparation and changes to the Group's accounting policies
2.1 Summary of changes in significant accounting policies
3 Important events within H1 2021 period
3.1 IPO and Increase of share capital 3.2 New financing facility
3.3 Acquisition of Mondial Relay
3.4 Bonds issuance
3.5 Coronavirus pandemic
4 Information on material accounting estimates
5 Segment information
6 Alternative performance measures – Gross Profit, Operating EBITDA and Adjusted EBITDA 18
7 Seasonality of operations
7.1 Net finance cost
8 Income tax in profit or loss
9 Earnings per share (EPS) …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
10 Dividends paid and proposed for payment
11 Share capital
12 Property, plant and equipment
13 Leases
13.1 Leasing liabilities
14 Other assets
15 Trade and other receivables
16 Cash and cash equivalents
17 Loans and borrowings
18 Bonds
19 Other financial liabilities
20 Reconciliation of movements of liabilities to cash flows arising from financing activities
21 Contingent liabilities
22 Provisions and accruals
23 Share-based payment
23.1 Management Incentive Plan
23.2 Long Term Incentive Programme
24 Other liabilities
25 Trade and other payables
26 Guarantees and other securities
27 Related-party transactions
28 Key personnel remuneration
29 Financial instruments by category
30 Financial risk management objectives………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
3] Events after the balance sheet date

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

	Note	Period of 6 months ended on 30-06-2021	Period of 3 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020	Period of 3 months ended on 30-06-2020
Continued operations
Revenue	5	1,639.0	849.6	1,063.3	654.1
Other operating income		11.7	8.0	8.6	5.8
Depreciation and amortization		241.9	123.2	151.5	77.7
Raw materials and consumables		24.4	13.1	21.5	11.4
External services		786.0	413.6	527.1	316.8
Taxes and charges		1.7	0.6	7.7	0.4
Payroll		197.8	83.1	85.0	46.1
Social security and other benefits		32.9	16.8	21.0	11.1
Other expenses		15.0	5.2	79	4.2
Cost of goods and materials sold		10.6	7.5	4.4	2.5
Other operating expenses		4.3	3.4	3.5	0.4
Impairment gain/ (loss) on trade and other receivables	15	53	4.2	0.7	2.7
Total operating expenses		1,319.3	670.7	823.7	473.3
Operating profit		331.4	186.9	248.2	186.6
Finance income	7.1	0.3		0.2
Finance costs	7.1	45.9	37.5	93.1	23.8
Profit before tax		285.8	149.4	155.3	162.8
Income tax expense	8	97.7	59.1	40.5	36.8
Profit from continuing operations		188.1	90.3	114.8	126.0
Profit / (loss) from discontinued operations		(2.1)	1.9	2.6	3.2
Net profit / (loss)		186.0	92.2	117.4	129.2
Other comprehensive income
Exchange differences from translation of foreign operations, net of tax - Item that may be reclassified to profit or loss		8.9	6.0	12.6	14.3
Other comprehensive income, net of tax		8.9	6.0	12.6	14.3
Total comprehensive income1		194.9	98.2	130.0	143.5
Net profit (loss) attributable to owners:
From continued operations:		188.1	90.3	114.8	126.0
From discontinued operations:		(2.1)	1.9	2.6	3.2
Total comprehensive income attributable to owners:
From continued operations:		191.4	96.2	131.1	137.3
From discontinued operations:		3.5	2.0	(1.1)	6.2
Basic/diluted earnings per share (in PLN)	9	0.37	0.18	0.22	0.25
Basic/diluted earnings per share (in PLN) - Continuing operations	ல	0.38	0.18	0.22	0.24
Basic/diluted earnings per share (in PLN) - Discontinued operations	9	(0.01)	0.00	0.00	0.01

¹ The Net (loss) profit for the period and Total comprehensive income is attributable to the owners only

The above interim condensed consolidated financial statements should be read in conjunction with the accompanying notes.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS	Note	Balance as at 30-06-2021	Balance as at 31-12-2020	Balance as at 01-01-2020
Non-current assets		2,158.5	1,825.5	1,201.5
Intangible assets		157.8	141.5	122.0
Property, plant and equipment	12	1,870.1	1,565.1	998.0
Other receivables		3.1	6.0	3.2
Deferred tax assets		111.2	112.1	78.1
Other assets	14	16.3	0.8	0.2
Current assets		3,462.2	655.3	368.3
Inventory		4.5	5.7	2.2
Other financial assets		-		2.5
Trade and other receivables	15	374.4	434.7	215.8
Income tax asset		1.9	0.3	6.2
Other assets	14	20.0	70.2	28.6
Cash and cash equivalents	16	3.061.4	744.4	113.0
TOTAL ASSETS		5,620.7	2,480.8	1,569.8

LIABILITIES	Note	Balance as at 30-06-202	Balance as at 31-12-2020	Balance as at 01-01-2020
Equity
Equity attributable to owners of InPost		(307.1)	638.1	389.6
Share capital	11	22.7	0.1
Share premium		35.122.4
Share capital and share premium of Integer.pl			686.8	963.1
Retained earnings/ (accumulated losses)		130.0	(56.0)	(571.1)
Reserves		(35,582.2)	7.2	(2.4)
Non-controlling interests				(0.2)
Non-controlling interests		-		(0.2)
Total equity		(307.1)	638.1	389.3
Liabilities
Loans and borrowings	17, 18	4,160.8	743.4	613.3
Employee benefits and provisions		89	14.0	10.6
Government grants		1.2	9.2	11.2
Deferred tax liability		38.0	35.0	16.8
Other financial liabilities	19	338.7	304.0	124.4
Total non-current liabilities		4,547,6	1,105.6	776.3
Trade payables and other payables	25	307.1	292.3	191.3
Loans and borrowings	17	709.0	23.7	49
Government grants			4.2	3.2
Current tax liabilities		15.2	22.4	3.4
Employee benefits and provisions	22	49.8	42.2	18.8
Other financial liabilities	19	238.8	232.7	152.3
Other liabilities	24	60.3	119.6	30.3
Total current liabilities		1,380.2	737.1	404.2
TOTAL LIABILITIES		5,927.8	1,842.7	1,180.5
TOTAL EQUITY AND LIABILITIES		5,620.7	2,480.8	1,569.8

The above interim condensed consolidated financial statements should be read in conjunction with the accompanying notes.

INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	Note	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Cash flows from operating activities
Net profit (loss)		186.0	17.4
Adjustments:		410.9	278.3
Income tax expense		97.7	40,5
Financial (cost)/ income	7.1	1.2	82.7
Gain / (loss) on sale of property, plant and equipment		(2.0)	(0.1)
Depreciation and amortization	12	241.9	151.5
Impairment losses		11.3	2.0
Grants		2.7
Group settled share-based payments	23	58.1	1.7
Changes in working capital:		34.1	24.3
Trade and other receivables		57.3	(35.9)
Inventories		1.3	0.7
Other assets		(10.1)	24.9
Finance liabilities other than loans and borrowings		42.9	(33.3)
Employee benefits, provisions and contract liabilities		2.0	0.1
Other liabilities		(59.3)	67.9
Cash generated from operating activities		630.9	420.0
Interest and commissions paid		(105.7)	(40.5)
Income tax paid		(102.1)	(33.7)
Net cash from operating activities		425.1	345.8
Cash flows from investing activities
Purchase of property, plant and equipment		(295.2)	(196.4)
Purchase of intangible assets		(55.8)	(18.9)
Proceeds from financial leases			4.3
Net cash from investing activities		(329.0)	(211.0)
Cash flows from financing activities
Proceeds from loans and borrowings	20, 3.2	2,639.8	82.1
Repayment of principal portion of loans and borrowings	20, 3.2	(649.5)	(2.4)
Proceeds from bonds	20, 3.4	2,215.2
Payment of principal portion of lease liability	20	(124.6)	(105.0)
Payment to shareholders	3.2	(1,238.1)	(15.9)
Government grants return		(18.7)
Net cash from financing activities		2,824.1	(41.2)
Net increase/(decrease) in cash and cash equivalents		2,918.2	95.5
Cash and cash equivalents at 1 January		144.2	113.0
Effect of movements in exchange rates on cash held		(0.9)	(0.2)
Cash and cash equivalents at the end of the reporting period		3,061.4	206.7

The above interim condensed consolidated financial statements should be read in conjunction with the accompanying notes.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

				Reserves
	Share	Share capital premium	Share capital and share premium of Integer.pl	Transla- tion reserve2	Reserve capital (reorgani- zation)	Other reserves	Retained earnings/ (accumulated losses)	Attributable to owners of the company	Attributable to non- controlling interests	Total equity
Balance as at 01-01-2020			963.1	(4.1)		1.7	(571.2)	389.5	(0.2)	389.3
Net profit/ (loss)
Other comprehensive income for the period				12.6			117.4	130.0		130.0
Total comprehensive income for the period				12.6			117.4	130.0		130.0
Redemption of shares			(15.9)				(73.3)	(89.2)		(89.2)
Share-based payment (equity settled)						1.7		1.7		1.7
Balance as at 30-06-2020		-	947.2	8.5		3.4	(527.1)	432.0	(0.2)	431.8
Balance as at 01-01-2021	0.1		686.8	(4.7)		11.8	(56.0)	638.0		638.0
Net profit/ (loss)							186.0	186.0		186.0
Other comprehensive income for the period				8.9				8.9		8.9
Total comprehensive income for the period				8.9			186.0	194.9		194.9
Increase in the share capital due to the contribution in kind" (Refer to note 1.1)	22.6	36,360.5	(686.8)		(35,665.3)			40.0		40.0
Redemption from reserve capital® (Refer to note 3.2)		(1,238.1)						(1,238.1)		(1,238.1)
Share-based payment (equity settled) (Refer to note 23)						58.		58.		58.1
Balance as at 30-06-2021	22.7	35,122.4		4.2	(35,665.3)	69.9	130.0	(307.1)	-	(307.1)

² Translation reserve includes exchange differences from translation of foreign operations

The above interim condensed consolidated financial statements should be read in conjunction with the accompanying notes.

³ Other reserve includes share-based payment

^" The Group reorganization which took placed the current Coup structure significantly, for deals of Croup history please refer to Note 11. On January 26, 2021, he general meeting of shareholders adopted a resolul to EUR 5,00000. To cover the value of new share, the share of the shares of hteger.pl SA and the shares of in Post Technology 2020, Al Prine (Bick) Sa ril, a related party of the Company, contributed 100% of the shares hely in Integer. (s.A. and InPost Technology S.à r.l. to InPost S.A. for a total amount of 7,995,747,974 EUR.

⁵ Paid to shareholder Al Prime Bidco S.à r.l. please see note 3.2 for explanation of cashflows

1

1.1 Additional information notes and explanations

1.1.1 General information about the InPost Group and its Parent

InPost S.A., (hereinafter referred to as the "Company") was incorporated on November 6, 2020 and is organised under the laws of Luxembourg as a "société anonyme" for an unlimited period and is registered with the Luxembourg Register of Commerce and Companies under n° B 248669.

On March 1st, 2021 the registered office of the Company was transferred from 2-4 rue Beck, L-1222 Luxembourg to 70 route d'Esch, L-1470 Luxembourg.

InPost S.A. is the parent company in the InPost Capital Group [as defined in point 1.2). Functional currency of InPost S.A. is Euro (EUR). Polish zloty (PLN) has been used as the presentation currency of this interim condensed consolidated financial statements and is functional currency for most of Group's subsidiaries as indicated in Note 1.2.

Until January 26, 2021, the sole owner of the parent company was Al Prime Al PRIME & Cy S.C.A. based in Luxemburg.

On January 27, as a result of IPO, InPost S.A. shares were listed on Amsterdam stock exchange EURONEXT. Since that date InPost S.A. is a publicly listed company without immediate parent (holding) company.

1.1.2 Establishment of the Group and reorganization

InPost S.A was established in 2020 as a vehicle for the acquisition of Integer.pl S.A. Group, through newly established holding company. The share capital of InPost S.A was increased on January 26, 2021. The increase in share capital and a share premium was covered by Al Prime Bidco S.à r.l. through the contribution of the 100% shares of Integer.pl S.A. and InPost Technology S.à r.l.

Integer.pl S.A. was parent of Integer.pl S.A. Group and prepared the consolidated financial statements of Integer.pl S.A. Group in accordance with IFRS until the financing year ended 31 December 2020. As a result of the abovementioned transaction, InPost Capital Group (hereinafter referred to as the "Group" or "InPost Group") was created.

The transaction of the acquisition by InPost S.A. of 100% interest in Integer.pl S.A. (the parent of Integer.pl S.A. Group) is considered a reorganization of the group due to the fact that: (i) the new parent entity was added to an existing group and there is no change in the substance of the reporting entity, [ii) the assets and liabilities of the new group and the original group are the same immediately before and after the reorganization, and (iii) the owners of the original parent before the reorganisation have the same absolute and relative interests in the original group and the new group immediately before and after the reorganization.

The reorganisation was accounted for by incorporating into the consolidated financial statements of InPost S.A. the assets and liabilities of the pre-existing group at their carrying values from the consolidated financial statements of the pre-existing group prepared in accordance with IFRS. Any difference between the cost of the transaction and the carrying value of the net assets of pre-existing group is a reorganization difference which was recorded directly in equity - in Reserve capital (reorganisation).

InPost Technology S.à r.l. was incorporated on July 22, 2020 by AI Prime Bidco S.à r.l. – the shareholder of Integer.pl S.A. On the same day InPost Technology S.à r.I. acquired from Integer Group Services Sp. z o.o. (the entity operating within Integer.pl S.A. Group) the business being the development and maintenance unit (OPE). Therefore, in the consolidated financial statements of InPost S.A. the assets and liabilities of InPost Technology S.à r.l. were incorporated at their carrying values from the consolidated financial statements of the pre-existing group prepared in accordance with IFRS, as described above.

Due to the fact the underlying group over which InPost S.A. was established as a Parent, existed as at January 1, 2021 (i.e. intermediate parent company was established in November 2020 and acquired Integer.pl S.A. January 26, 2021); these interim condensed consolidated financial statements of InPost Group cover full period of 6 months from January 1, 2021 to June 30, 2021 although the reorganization occurred on January 26, 2021. Consequently, this interim condensed consolidated financial statements for the current interim period show result as if InPost Group was formed already since January 1, 2021.

Following the above approach this interim condensed consolidated financial statements cover financial results of InPost S.A., InPost Technology S.à r.l. and Integer.pl S.A. and all its subsidiaries for the period of 6 months of 2021.

The comparative information in this interim condensed consolidated financial statements comprise the consolidated financial information of the pre-existing Group, i.e. Integer.pl S.A. Group for the period of 6 months period ended on June 30, 2020. As the Parent entity, i.e. InPost S.A. were incorporated November 6, 2020 and the transaction of reorganisation took place in January 2021, the Group presented in the comparative data, the share capital and share premium of Integer.pl; the share capital and the share premium were derecognized at the date of reorganisation, with the difference being recognized in equity (Reserve capital - reorganisation).

As a part of reorganisation, the company issued 496 900 000 shares that were valued based on fair value of contributions made (fair value of shares in Integer.pl S.A. and InPost Technology S.à r.l.) and as a result recognised increase in share capital in the amount of PLN 22.6 m and increase in share premium in the amount of PLN 36,360.5 m. The difference between fair value of contributed shares and the carrying value of share capital and share premium of contributed businesses (i.e. PLN 686.8 m) was recorded in the amount to PLN 35,696.3 m (negative) as a Reserve capital (reorganisation).

Concurrently with reorganization, the company repaid to the existing shareholders the amount of PLN 1,238.1 m which was treated as a redemption and recorded as a reduction of the share premium established on reorganisation.

Further, as a consequence of the transaction described above, it was agreed that whole 2019 profit should be allocated to reserve capital instead of payment of dividend from profit of year 2019 in amount of 40 m PLN. As a result liabilities from payment of dividend to previous sole shareholder of Integer.pl S.A., i.e. Al Prime Bidco S.à r.l. were derecognised and impacted the reorganisation reserve recognised in equity.

The resolution of General Meeting of Shareholders dated September 30, 2020 approving the payment of dividend from profit of year 2019 in amount of 40 m PLN was formally changed on May 19, 2021 by the General Meeting of Shareholders of Integer.pl S.A.

a) Group Structure immediately before the reorganisation:

* Management shares had been granted as part of the MIP programme and have not vested yet (they were partially vested as of IPO date) – please refer to the details described in note 23.

b) Group Structure immediately after the reorganisation:

* Management shares had been granted as part of the MIP programme described in note 23.

Concurrently with reorganization and redemption of shares, the Parent company:

• a. Incurred indebtedness further described in note 17.
• b. Listed its share in Amsterdam stock exchange (shares in IPO were sold only by the existing shareholders and the company did not issue any new shares).

1.1.3 Information about the parent entity and global ultimate parent

As at December 31, 2020 and until January 26, 2021, the direct parent company of Integer.pl S.A was Al Prime (Bidco) S.à r.l.

The global ultimate parent of the Group in which the Company operates was Advent International Corporation based in Boston (USA) as at December 31, 2020 and January 26, 2021.

As at the date of this report, the Company has no ultimate controlling shareholder. As of the date of these consolidated condensed financial statements, the shareholders were: Advent International Corporation (46.02%), A&R Investments LTD (12.25%), The Capital Group Companies Inc (5.25%) and Others (36.48%).

1.1.4 Group's operations

InPost Capital Group is offering complex logistic solutions mostly for customers from the e-commerce industry. The core business of the InPost Group includes following operating activities: automatic parcel machines, courier services, production and sale of automatic parcel machine, research and development works, internet portals, data processing, website management (hosting), and holding activities including management of the InPost Group.

Composition of the Supervisory Board

Mark Robertshaw – Chairperson, Member of the Supervisory Board Mike Roth – Member of the Supervisory Board Nick Rose – Member of the Supervisory Board Ranjan Sen – Member of the Supervisory Board Ralf Huep – Member of the Supervisory Board Marieke Bax – Member of the Supervisory Board Cristina Berta Jones – Member of the Supervisory Board

1.2 Composition of the Group

This interim condensed consolidated financial statements of the InPost Group includes the financial information of the Parent, which is InPost S.A. with its subsidiaries 3 of which are direct subsidiaries and 9 indirect subsidiaries of InPost S.A. The list of the Group entities is presented in the below table.

	Company name	Country	Functional Currency	Shareholders as at 30-06-2021	Interest in the share capital as at 30-06-2021
	Direct subsidiaries
	Integer.pl S.A.	Poland	DI N	InPost S.A.	100%
2	InPost Technology	Poland	PLN	InPost S.A.	100%
3	Integer France SAS	France	FUR	InPost S.A.	100%
	Indirect subsidiaries
4	InPost Sp. z o.o.	Poland	DI N	Integer Group Services Sp. z o.o.	100%
5	InPost France SAS	France	EUR	InPost Paczkomaty Sp. z o.o.	100%
6	Locker InPost Italia Srl	Italy	FUR	InPost Paczkomaty Sp. z o.o.	100%
7	Granatana Limited	Cyprus	EUR	InPost Paczkomaty Sp. z o.o.	100%
8	Giverty Holding Limited	Cyprus	FUR	Granatana I imited	100%
9	InPost UK I imited	United Kingdom	GBP	InPost Paczkomaty Sp. z o.o.	100%
10	InPost Paczkomaty Sp. z o.o.	Poland	PLN	Integer.pl S.A.	100%
רו	Integer Group Services Sp. z o.o.	Poland	DI N	Integer.pl S.A.	38.35%
				InPost Paczkomaty Sp. z o.o.	61.65%
12	M.P.S.L. Modern Postal Services Ltd	Cyprus	FUR	Integer.pl S.A.	100%
	Affiliates
13	Easypack Plus Self-Storage LLC	United Arab Emirates	AED	50% - InPost Paczkomaty Sp. z o.o.	50%

The following changes have taken place during the reporting period, in the structure of InPost Group (and previously in Integer Group as InPost Group pre-IPO predecessor):

• On March 29, 2021, InPost do Brasil logistica e locacao de equipamentos LTD was liquidated and removed from the register of entrepreneurs.
• ▪
• On March 10, 2021, InPost France SAS went into liquidation and has been deconsolidated in these interim condensed consolidated financial statements as a result of loss of control. As InPost France SAS is classified as discontinued operations since 2018, result of consolidation is also classified as discontinued operations.
• On March 2, 2021 Integer France SAS was acquired by InPost S.A. for value of 1 EUR, net assets of acquired company amounted to 1 EUR.

2 Basis of preparation and changes to the Group's accounting policies

The interim condensed consolidated financial statements of InPost Group for the six months ended June 30, 2021 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

InPost S.A. has not prepared the consolidated financial statements in accordance with previous GAAP (generally accepted accounting principles applicable in Luxembourg) as it did not hold any

subsidiaries prior the reorganisation. Therefore no reconciliations are presented in IFRS consolidated financial statements which would otherwise be required by IFRS 1 had the Group prepared the consolidated financial statements under previous GAAP. However, the Group presented in the statement of the financial position the opening balance of the earliest presented period, i.e. January 1, 2020. Amounts included in this statement of the financial position reflect the carrying amounts from the consolidated financial statements of Integer.pl S.A. Group.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements. InPost Group will publish its first full set of IFRS consolidated financial statements as of December 31, 2021 and for the year then ended. However, as described above in note 1, InPost S.A. became a Parent of the Group as a result of a reorganisation of Integer.pl SA operations. Thus, this interim condensed consolidated financial statements should be read in conjunction with the Integer.pl S.A. Group's annual consolidated financial statements as at December 31, 2020 as they include entirety of information about the Group activities and a full description of accounting policies applied in preparation of these interim condensed consolidated financial statements. The same accounting policies, methods of computation and presentation have been followed

These interim condensed consolidated financial statements were prepared under the assumption that the InPost Group will continue to operate as a going concern in the foreseeable future. As at the date of the approval of the interim condensed consolidated financial statements there is no evidence indicating that the Group will not be able to continue its business activities on a going concern basis.

2.1 Summary of changes in significant accounting policies

The information about the impact of the new standard published but not yet adopted was provided for in the annual consolidated financial statements of Integer.pl S.A. Group and it is not materially affected by publication of the new standards and amendments and endorsement by EU that occurred after the date of publication of these financial statements.

The following standards and amendments to standards became effective after January 1, 2021;

• Amendments to IFRS 4 Insurance Contracts deferral of IFRS 9 until January 1, 2023;
• Amendments to IFRS 9, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform -Phase 2 (issued on August 27, 2020);
• Amendment to Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)'. The amendment is effective for annual reporting periods beginning on or after 1 April 2021.

Although the Group does not apply the hedge accounting nor holds derivatives which are based on interest rates covered by IBOR Reform, the Group has significant indebtedness with interests calculated based on WIBOR (see note 17). Currently, WIBOR was not yet replaced with a new base reference rate, however, it is expected that the Group will apply the practical expedients provided for in Phase 2 of the IBOR Reform (i.e. recognise any differences arising from the replacement of WIBOR with new reference base prospectively over the remaining period of borrowings) and will include relevant disclosures in the annual consolidated financial statements or earlier in interim financial information if applicable.

Amendment to IFRS 16 extends, by one year, the May 2020 amendment that provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification but the Group does not expect it to have any impact on 2021 financials.

3 Important events within H1 2021 period

3.1 IPO and Increase of share capital

On January 27, 2021 InPost S.A. shares has been listed on EURONEXT stock exchange located in Amsterdam, Netherlands. The existing shareholders sold 40,3% of their shares. The Group did not receive any proceeds from the Admission to the Stock Exchange on January 29, 2021, the net proceeds of which had been received by AI Prime, Templeton Strategic Emerging Markets Fund IV, LDC and PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 2.

On January 26, 2021, the general meeting of shareholders adopted resolution to increase the share capital to EUR 5,000,000. To cover the value of new shares, the shareholders contributed to the company the shares of Integer.pl SA and the shares of InPost Technology S.à r.l. On January 26, 2021, Al Prime (Bidco) S.à r.l., related party of the Company, contributed 100% of the shares held respectively in Integer.pl S.A. and InPost Technology S.à r.l. to InPost S.A. for a total amount of EUR 7,995,747,974. As a result, the Group presents the increase in share capital by PLN 22.6 m and in capital premium by PLN 36,360.5 m.

As the transaction was accounted for in these interim condensed consolidated financial statements as a reorganisation the total effect of this contribution was included in Reserves (reorganization) in the amount of PLN (35,696.3) m as of 30 June 2021.

Please refer to the detailed information included in the note 1.1.1 above.

3.2 New financing facility

On January 25, 2021, Integer.pl S.A. and InPost S.A. signed with a bank consortium (Bank Handlowy w Warszawie SA, Bank Pekao SA, BNP Paribas Bank Polski SA, Goldman Sachs Bank Europe SE, JP Morgan AC, mBank SA, PKO BP SA, Barclays Bank Ireland PLC, DNB Bank Polska SA, Erste Group Bank AG, INC Bank Śląski SA) a loan agreement. On the basis of the signed loan agreement, Group has received PLN 1,950 m of long term guaranteed loans and was able to contract new working capital loans up to the maximum amount of PLN 800 m. Under the agreement loans received from Al Prime Bidco S.à r.l. by Integer.pl were repaid, remaining funds were transferred to Al Prime Bidco S.à r.l. as result of IPO transaction, the existing credit lines have been converted to new terms and fall within the range of the available PLN 800 m. The cost of the new loan will amount to a maximum of WIBOR+ 2.75%. The Group's proceeds from the bank loan amounted to 2,066.6 m PLN. The funds in amount of PLN 1.950 m were transferred to Al Prime Bidco S.à r.l. as repayment of Loans received by Integer.pl in amount of PLN 640.2 m and redemption from share capital in amount of PLN 1,238.1 m. mBank S.A. acted as an agent on behalf of the Group therefore the amounts involved are presented in the statement of cash flows.

3.3 Acquisition of Mondial Relay

On March 15, 2021 InPost S.A. announced that it has entered an advanced stage of negotiations about potential acquisition of Mondial Relay. On May 28, 2021 InPost S.A. has received unconditional approval from European Commission for the acquisition and on July 1, 2021 acquisition of 100% voting rights of Mondial Relay was completed – one of the leading French parcel operators, was acquired by InPost S.A. for EUR 513 m paid in cash. The acquisition will allow InPost to take a major step in its ambition to become Europe's leading out-of-home automated solution for e-commerce. At the moment of preparation of this interim condensed consolidated financial statements the purchase price allocation and financial statement of Mondial Relay at the moment of acquisition prepared in accordance with IFRS has not yet been completed therefore the Group is able to only present the last reported financial information of Mondial Relay in accordance to local GAAP (French GAAP) for period of March 1, 2020 February 28, 2021 and balance sheet data as of February 28, 2021:

	Value in EUR	Value in PLN
Finance information about Mondial Relay:
- Revenue from period 2020-03-01 to 2021-02-28	403.6	1.806.8
- Net profit from period 2020-03-01 to 2021-02-28	36.4	163.4
Amount of assets and liabilities as at February 28, 2021
- Intangible assets	27	12.2
- Property, plant and equipment	34.0	153.6
- Trade receivables	75.8	3424
- Cash	0.7	3.2
- Trade pavables	74.]	334.7

Revenue and net profit were translated to PLN using average National Polish Bank PLN/EUR exchange rate for period March 1, 2020 – February 28, 2021. Balance sheet data were translated using National Polish Bank PLN/EUR exchange rate from February 28,2021.

3.4 Bonds issuance

On June 29, 2021 InPost S.A. announced the closing of EUR 490 m in aggregate principal amount of euro-denominated 2.250% senior notes due 2027. Further on, on July 8 InPost S.A. has announced the closing of the offering of PLN 500 m in aggregate principal amount of series A PLN denominated 2.500% + WIBOR 6M notes due 2027.

The Group intends to utilize the proceeds from the offering (together with drawings under its existing revolving credit facility):

• to consummate the acquisition of Mondial Relay SAS;
• to pay fees and expenses in connection with the acquisition and the related financing transactions;
• to refinance the existing indebtness; and
• for general corporate purposes.

3.5 Coronavirus pandemic

The Management Board analysed potential effects that the coronavirus outbreak may have on disclosures, assumptions and estimates adopted in preparation of the interim condensed consolidated financial statements for the period ended June 30, 2021. At the time of publication of the statement, the pandemic did not cause any significant restrictions on the Group's operations, such as suspension or limitation of operations, or operational problems in the course of its operations. Certainly, the pandemic will change the structure of recipients and customers as well as the type of goods transported, but the Management Board does not expect a significant decrease in demand for logistics services. Parcel lockers remain one of the safest delivery methods in the pandemic era, enabling social distancing and non-contact pickup of goods ordered by buyers. All potential supplier issues are analysed and contingency plans as well as alternative suppliers are put in place if needed. The Group is constantly adapting its activities to the changing legal requirements introduced by the Polish government. At the moment, the Group does not expect any significant negative impact of the pandemic on the expected results and cash flows.

4 Information on material accounting estimates

The preparation of the condensed interim consolidated financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires Management to exercise its judgment in the process of applying the Group's accounting policies. Estimations and judgements are being constantly verified and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The significant judgments made by Management in applying the Group's accounting policies were described in detail in the Integer Group's consolidated financial statements for 2020 and remain relevant for preparation of these interim condensed consolidated financial statements.

ഗ Segment information

For management purposes, the Group presents results in three reportable segments divided into two following geographical regions:

• Segments in Poland
  • APM segment, which is focused on delivery of parcels to automated parcel machines
  • To-Door segment, which includes delivery of parcels using door-to-door couriers
• Segment outside Poland

parcel machines) in United Kingdom and Italy

In addition to the above reportable segments in Poland there is other segment which consists mainly of marketing and IT services provided for external customers as well as production and sale of APM's to external customers. No operating segment of the Group have been aggregated to form the above reportable operating segments.

The Management Board is the Chief Operating Decision Maker (CODM) and monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is assessed on the basis of revenue and gross profit. Additionally aggregated segments at the geography level are assessed based on Operating EBITDA. Operating EBITDA reflects "operating profit before amortization and depreciation". The accounting policies adopted are uniform for all segments and consistent with those applied for the Group.

Segments' direct costs include among others costs of PUDO Points, which are delivery at pick-up drop-off facilities. Segment performance is evaluated based on gross profit or loss and is measured consistently with profit or loss in the interim condensed consolidated financial statements.

Transfer prices between operating segments are on an arm's-length basis in a manner similar to transactions with third parties.

Inter-segment revenues are eliminated upon consolidation and reflected in the Inter-segment eliminations column.

General cost, depreciation, finance income and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed on a group basis.

Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed on a group basis.

Period of 6	International	Poland					Total
months ended on 30-06-2021	APM	APM	To-Door	Other	Inter- segment elimination	Total	reportable segments
	A	B	C				A+B+C
Revenue	22.3	1,216.1	360.0	53.5	(1.2)	1,650.7	1,598.4
Externa	223	1,216.1	360.0	52.3		1,650.7	1,598.4
Inter-segment				1.2	(1.2)
Direct costs:	(30.3)	(435.1)	(238.9)	(17.6)	0.8	(721.1)	(704.3)
Logistic costs	(23.2)	(401.6)	(231.2)			(656.0)	(656.0)
APM network	(5.7)	(21.2)			0.8	(26.1)	(26.9)
External costs	(4.9)	(21.2)				(26.1)	(26.1)
Inter-segment costs	(0.8)				0.8		(0.8)
PUDO points 6		(6.5)	(2.0)			(8.5)	(8.5)
Other direct costs	(1.4)	(5.8)	(5.7)	(17.6)	-	(30.5)	(12.9)
Cost of sold APM's and IT projects		-
Gross profit:	(8.0)	781.0	121.1	35.9	(0.4)	929.6	894.1

	International	Poland	Total
Gross profit/(loss)	(8.0)	937.6	929.6
General costs	(79.0)	(277.3)	(356.3)
Sales & Marketing	(1.8)	(29.8)	(31.6)
Call Centre	(3.0)	(16.0)	(19.0)
IT Maintenance -		(17.6)	(17.6)
Other general costs	(74.2)	(213.9)	(288.1
Operating EBITDA	(87.0)	660.3	573.3
Depreciation and amortization	(12.9)	(229.0)	(241.9)
Operating profit	(99.9)	431.3	331.4

	International	Poland	Total
Operating EBITDA	(87.0)	660.3	575.3
- MIP Valuation		55.4	55.4
- LTIP Valuation	0.2	2.5	2.7
- IPO costs		23.9	23.9
- M&A costs	39.3		39.3
Adjusted EBITDA	(47.5)	742.1	694.6

⁶ PUDO points – commissions for handling parcels at collection and delivery points

Period of 6	International		Poland		Total
months ended on 30-06-2020	APM	APM	To-Door	Other	Inter- segment elimination	Total	reportable segments
	A	B	C				A+B+C
Revenue	5.7	749.6	292.3	25.9	(1.6)	1,071.9	1,047.6
Fxternal	5.7	749.6	2923	243	-	1,071.9	1,047.6
Inter-segment	-			1.6	(1.6)
Direct costs:	(9.3)	(320.0)	(200.7)	(3.0)	0.7	(532.3)	(530.0)
Logistic costs	(5.5)	(286.0)	(194.3)		-	(485.8)	(485.8)
APM network	(3.3)	(16.5)			0.7	(19.1)	(19.8)
External costs	(2.6)	(16.5)	-	-	-	(19.1)	(19.1)
Inter-segment costs	(0.7)		-	-	0.7		(0.7)
PUDO points?	-	(5.0)	(2.0)	-	-	(7.0)	(7.0)
Other direct costs	(0.5)	(12.5)	(4.4)	(2.3)		(19.7)	(17.4)
Cost of sold APM's and IT projects	-			(0.7)		(0.7)
Gross profit:	(3.6)	429.6	91.6	22.9	(0.9)	539.6	517.6

	International	Poland	Total
Gross profit/(loss)	(3.6)	543.2	539.6
General costs	(13.8)	(126.1)	139.91
- Sales & Marketing	(1.1)	(30.5)	(31.6)
Call Centre	(0.7)	(12.3)	(13.0)
- IT Maintenance	1	(8.8)	(8.8)
Other general costs	(12.0)	(74.5)	(86.5)
Operating EBITDA	(17.4)	417.1	399.7
- Depreciation and amortization	(8.5)	(143.0)	(151.5)
Operating profit	(25.9)	274.1	248.2

	International	Poland	Total
Operating EBITDA	(17.4)	47.1	399.7
- MIP Valuation		1.7	1.7
- IPO costs
Adjusted EBITDA	(17.4)	418.8	401.4

Reconciliation of profit

	on 30-06-2021	Period of 6 months ended Period of 6 months ended on 30-06-2020
Operating profit	331.4	248.2
Finance income	0.3	0.2
Finance costs	45.9	93.1
Profit (loss) before tax and discontinued operations	285.8	155.3

⁷ PUDO points – commissions for handling parcels at collection and delivery points

Revenue from external customers

Revenue from external customers®	on 30-06-2021	Period of 6 months ended Period of 6 months ended on 30-06-2020
Poland (domestic sales)	1.520.8	1.023.4
International (foreign sales)	118.2	39.9
Lithuania	45.2	17.2
United Kingdom	24.8	4.2
Sweden	ਰ 5	0.8
China	7.7	1.2
Other	31.0	16.5
Total revenue	1,639.0	1,063.3

Revenue from sales in Poland to Allegro Group was responsible for 28.9% of the Group's revenue for the 6 months ended June 30, 2021 and 25.3% of the Group's revenue for the 6 months ended June 30, 2020.

6 Alternative performance measures - Gross Profit, Operating EBITDA and Adjusted EBITDA

Our segments are based on the structure of our internal management reporting to facilitate decisionmaking with respect to the allocation of resources and to assess the performance of our operations. The performance of our segments is measured and assessed on the basis of revenue (including other operating income) and Gross Profit. Additionally, the performance of our combined operations is measured and assessed on the basis of Operating EBITDA per geographical area, i.e. for each country where the Group operates. Given the relative size of operations outside Poland, the Group aggregates information relating to all countries other than Poland and presented this as one reportable segment - International.

Gross Profit and Operating EBITDA are considered as alternative performance measures and presented separately as being important supplemental measures of Group's performance. The Group believes that these and similar measures are used in the industry in which the Group operates as means of evaluating a company's operating performance. However, Gross Profit and Operating EBITDA are not recognized measures of financial performance, financial condition or liquidity under IFRS. In addition, not all companies may calculate Gross Profit and Operating EBITDA in the same manner or on a consistent basis. As a result, this measure may not be comparable to measures used by other companies under the same or similar names. Accordingly, undue reliance should not be placed on these measures and they should not be considered in isolation or as a substitute for profit for the year, cash flow, expenses or other financial measures computed in accordance with IFRS.

Gross Profit represents a margin realized on deliveries to clients which takes into account only revenue and other operating income related to deliveries as well as costs directly attributable to such deliveries.

⁸ The revenue information above is based on the locations of the physical location of the services performance

Gross Profit is defined as net profit (loss) for the period adjusted for profit (loss) from discontinued operations, income tax expense, profit on sales of organized part of an enterprise, share of profits of equity-accounted investees, finance costs and income, depreciation and amortization and general costs. The numerical reconciliation of Gross Profit to the numbers included in the interim condensed consolidated financial statements prepared under IFRS is included in the Note 5 on segment reporting.

Operating EBITDA represents a metric for evaluating the Group's performance which facilitates comparisons of the Group's operating results from period and between segments by removing the impact of, among other things, its capital structure, asset base and tax consequences. Operating EBITDA is defined as net profit (loss) for the period adjusted for profit (loss) from discontinued operations, income tax expense (benefit), profit on sales of organized part of an enterprise, share of profits of equity-accounted investees, finance costs and income, and depreciation and amortization.

Starting from 2021, the Group has decided to change the definition of the Adjusted EBITDA (applied for the first time in 2020 annual report). CODM's intention is to ensure that Adjusted EBITDA is a useful metric for evaluating the Group's performance and facilitating period comparisons of the Group's core results by removing impact of its asset base or capital/financing structure, but also impact of expenses arising from the Management Incentive Plan (MIP) or any other employee incentive plans that will follow and costs related to certain material transactions such as IPO or M&A processes, which the management of the Group considers not related to day operations. The management believes that the Adjusted EBITDA, as modified, is a useful supplemental metric which allows investors to better understand performance of the Group's core operations and their long-term trends. Adjusted EBITDA, as defined and applied starting from 2021, represents Operating EBITDA (net profit/loss for the period adjusted for profit/loss from discontinued operations, income tax expense/benefit, profit on sales of organized part of an enterprise, share of profits of equity-accounted investees, finance costs and income and depreciation and amortization), further adjusted to exclude employee incentive plans expense and transaction costs of PLN 63,2 m relating to IPO and M&A transactions).

	2021	2020
Net profit / (loss) from continuing operations	188.1	114.8
Income tax	97.7	40.5
Profit / (loss) from continuing operations before tax	285.8	155.3
adjusted by:
- net financial costs	45.6	979
- depreciation	2419	151.5
Operating EBITDA	573.3	399.7
- MIP Valuation	55.4	1.7
- LTIP Valuation	2.7

The following table reconciles net profit to Adjusted EBITDA for the periods indicated:

- M&A costs	39.3
Adjusted EBITDA	694.6	401.4

7 Seasonality of operations

Group business is subject to predictable seasonality as the vast majority of our business serves the ecommerce retail industry, which is particularly active during the end-of-year holiday season that runs from mid-November, starting around Black Friday, through the end of December. As a result of these seasonal fluctuations, the Group typically experience a peak in sales and generate a significant part of sales revenue in the fourth quarter of the year. In both 2020 and 2021 Covid-19 has impacted seasonality (increase of revenues in Q2 not observed in previous periods) but Q4 is still expected to be the strongest quarter.

Income and other operating income	Q1	Q2	Total
2020	412.0	659.9	1.071 9
2021	793.1	857.6	1,650.7

7.1 Net finance cost

	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Foreign exchange profit
Interest income		0.2
Other finance income	03
Total finance income	0.3	0.2

	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Foreign exchange losses	1.7	51.9
Interest expense	41.3	30.5
Deposits, fees and commissions	1.7	65
Derivative instruments valuation		27
Other finance costs	1.2	1.5
Total finance costs	45.9	93.1

8 Income tax in profit or loss

Taxation is assessed based on annual results and, accordingly, determining the tax charge for an interim period will involve estimation of the likely effective tax rate for the period of 6 months ended June 30, 2021 the tax rate for the Parent Entity was 24,94% for the comparative period of 6 months ended June 30, 2020 the tax rate for the Parent Entity (Integer.pl pre-reorganization described in note 1.1.2) the tax rate was 19%. In 2021, tax rates for the Group's companies ranged from 19% in Poland and Great Britain to 31.4% in Italy.

The management periodically reviews the approach adopted in preparation of tax returns where the applicable tax regulations are subject to interpretation. When justified, a provision is created for the expected tax payable to tax authorities.

	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Current income tax expense	93.8	45.3
Deferred income tax expense	3.9	(4.8)
Income tax expense - continued operations	97.7	40.5
Current income tax expense
Income tax expense - discontinued operations	1

		Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Profit (loss) before tax		285.8		155.3
Tax using the Group's domestic tax rate	24,9%	71.3	19.0%	29.5
Effect of tax rates in foreign jurisdictions	(7,5%)	(21.3)	(0.3%)	(0.5)
Tax-exempt income	(1.4%)	(4.1)	(0.6%)	(1.0)
Non-deductible expenses	8.8%	25.0	1.8%	27
Income tax at annual expected rate	24.8%		19.9%
Adjustments for individual tax credits or debits arising from significant transactions:
Unrecognized deferred tax asset for tax losses reported during the period	9.3%	26.5	2.3%	35
Deferred tax written off as a result of the subsidiary liquidation			3.4%	5.3
Other	0.1%	0.4	0.6%	1.0
Income tax expense		97.7		40.5
Effective tax rate		34.2%		26.1%

The tax rate was higher in 2021 due to higher unrecognized deferred tax assets for tax losses reported in UK and Italy, and higher proportion of non-tax deductible costs, i.e. mainly costs related to the Management Incentive Plan (MIP) and Long Term Incentive Plan (LTIP).

9 Earnings per share (EPS)

Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the parent (after adjusting for interest on convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. In the period covered by the interim condensed consolidated financial statements, there were no equity instruments diluting the weighted average number of ordinary shares issued used to calculate basic earnings per share. The following table reflects the profit and share information used in the basic and diluted EPS calculations:

	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Profit attributable to ordinary equity holders of the parent:
Continuing operations	188.1	114.8
Discontinued operations	(2.1)	2.6
Profit attributable to ordinary equity holders of the parent for basic EPS	186.0	117.4

Effect of dilution
Profit attributable to ordinary equity holders of the parent adjusted for the effect of dilution	186.0	11744
Weighted average number of ordinary shares for basic EPS9	500,000,000	529,281,993
Basic / Diluted earnings per share (in PLN)	0.37	0.22
Basic / Diluted earnings per share (in PLN) - Continuing operations	0.38	0.22
Basic / Diluted earnings per share (in PLN) - Discontinued operations	(0.01)	0.00

As discussed, the Group had undergone the reorganisation during the period where new shares were issued to existing shareholders in exchange for the shares in Integer.pl. For the purpose of calculation of EPS a constant exchange ratio was used.

	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Weighted average number of shares of Integer.pl outstanding during the period pre-reorganisation	17,541,213	18.571.298
Share conversion ratio	285	28.5
Number of shares converted to InPost shares	500.000.000	529.281.993
Weighted average number of InPost outstanding during the period post-reorganisation	500.000.000	Not applicable
Weighted average number of ordinary shares for basic EPS at the end of the period	500.000.000	529,281,993

10 Dividends paid and proposed for payment

With regard to dividends paid and proposed for payment there are no significant changes to the information disclosed in the annual consolidated financial statements of the Integer.pl S.A. Group for 2020. Please also refer to the information disclosed in note 1.1.2 regarding the reorganisation.

רו Share capital

Series	Face value	Number of shares as at 30-06-2021	Number of shares 31-12-2020
Normal shares	EUR 0.01 each	500,000,000	3.100.000
		500,000,000	3,100,000

On January 26 the Supervisory Board allowed the Management, in accordance with the articles of association, to increase the share capital to the value of EUR 5 m. The increase was covered by a contribution of Integer.pl S.A. shares and InPost Technology S.à r.l. shares from AI Prime BIDCO. Please see also the detailed information in note 1.1.1 regarding the Group reorganisation.

⁹ The weighted average number of shares takes into account the weighted average in shares during the year

12 Property, plant and equipment

Property, plant and equipment	Land and buildings	Machinery and equipment	Vehicles	Other	RoU	Assets under construction10	Total
Cost at 01-01-2021	14.6	1,280.8	6.5	16.5	942.0	75.7	2,336.1
Additions 11	2.2	249.9	0.3	2.7	18.8	89.4	362.7
Additions - leases12					177.1		177.1
Disposals	(0.2)	(5.6)		(0.6)	(7.6)	(3.5)	(17.4)
Other movements 3		8.9			(57.9)		(49.0)
Effect of movements in exchange rates		2.1			0.3		2.4
Cost at 30-06-2021	16.6	1,536.2	6.8	18.0	1,072.8	161.6	2,812.0
Accumulated depreciation at 01-01-2021	3.5	357.9	0.8	7.0	377.5		746.7
Depreciation for the period	1.5	72.6	0.5	3.0	143.1		220.6
Disposals		(5.2)		(0.1)	(5.4)		(10.7)
Other movements12		8.8		(0.1)	(44.7)		(36.1)
Effect of movements in exchange rates		0.7			0.2		0.8
Accumulated depreciation at 30-06-2021	5.0	434.7	1.3	9.8	470.6		921.3
Impairment losses at 01-01-2021		13.5			4.6	6.1	24.2
Impairment loss		0.1					0.1
Reversal of impairment losses						(3.7)	(3.7)
Disposals
Other movements
Effect of movements in exchange rates
Impairment losses at 30-06-2021		13.6			4.6	2.4	20.6
Carrying amount at 30-06-2021	11.6	1,088.0	5.5	8.2	597.6	159.2	1,870.1

¹⁰ Assets under construction compromise mainly from not yet deployed APMs and materials for production of APMs

^" Additions of machiney and equipment of new APMs, additions of Assess under construction are maily production materials for production of new APMs and produced APMs not yet deployed

^" Additions of leases compromises of new leases maily ground for the purpose of APMs deplyments) and her copy of that additions are also generaced by ground agreements renewals and adjustments of the right of use in connection with the signed annexes to lease agreements

¹³ Other movement in 2020 are mainly related to the value of the right of use in connection with the signed annexes to lease agreements

Property, plant and equipment	Land and buildings	Machinery & equipment	Vehicles	Other	RoU	Assets under construction	Total
Cost at 01-01-2020	10.6	875.6	1.4	10.3	497.1	70.4	1,463.4
Additions	4.2	415.1	5.1	6.5		5.1	436.0
Additions - leases					511.7		511.7
Disposals	(0.2)	(15.3)		(0.4)	(55.0)		(70.9)
Other movements 4		1.7			(12.4)		(11.3)
Effect of movements in exchange rates		6.3		0.7	0.6	0.2	7.2
Cost at 31-12-2020	14.6	1,280.8	6.5	16.5	942.0	75.7	2,336.1

Accumulated depreciation at 01-01-2020	2.3	262.6	0.5	4.2	169.6	439.2
Depreciation for the period	1.2	103.0	0.3	3.2	222.4	330.1
Disposals		(12.7)		(0.4)	(11.0)	(24.7)
Other movements 4		19			(3.9)	(2.0)
Effect of movements in exchange rates		3.1			0.4	3.5
Accumulated depreciation at 31-12-2020	3.5	357.9	0.8	7.0	377.5	746.7

Impairment losses at 01-01-2020	-	14.9	I		6.6	4.7	26.2
Impairment loss		0.8				1.2	2.0
Reversal of impairment losses		(0.4)					(0.4)
Disposals		(1.8)			(2.0)		(3.8)
Other movements 4							-
Effect of movements in exchange rates						0.2	0.2
Impairment losses at 31-12-2020	-	13.5	I		4.6	6.7	24.2
Carrying amount at 31-12-2020	11.1	909.3	5.7	9.5	559.9	69.6	1,565.1

¹⁶ Other movement in 2020 are mainly related to the value of the right of use in connection with the signed annexes to lease agreements

13 Leases

Leasing liabilities 13.1

Leasing liabilities, along with analysis of maturity, are presented in the table below.

Balance as at	30-06-2021	31-12-2020
Total	577.5	536.6
up to 1 year	238.8	232.7
from 1 to 3 years	158.8	131.6
from 3 to 5 years	128.5	116.9
more than 5 years	51.4	55.4

14 Other assets

	30-06-2021	31-12-2020
Non-current	16.2	0.8
Prepaid services	21	0.8
Prepayments for property, plant and equipment and intangible assets	14.1
Current	20.0	70.2
Policies, other insurance	1.5	1.7
Prepaid services	18.5	5.0

As of December 21, 2020 the Group presented the prepayments made for the acquisition of property, plant and equipment within Other assets (current). Starting from 2021, the Group changed the presentation and the prepayments made are included in the line Other assets (non-current). In the Management's view, this presentation reflects the expectation relating to the nature as well as the future use of these prepayments, i.e. acquisition of non-current assets used for the Group's needs instead of future potential resale of the assets acquired as it took place in previous years.

15 Trade and other receivables

	30-06-2021	31-12-2020
Trade receivables	346.1	407.6
Other receivables	283	27.1
Trade and other receivables	374.4	434.7
Trade receivables	30-06-2021	31-12-2020
Trade receivables at fair value through profit or loss (designated to be subject to non-recourse factoring arrangements)	63.3	833
Trade receivables (gross) at amortized cost	365.6	401.1
Expected credit losses - individual approach	(75.1)	(74.0)
Expected credit losses - collective approach	(7.9)	(2.8)
Total trade receivables	346.1	407.6

The movements in the expected credit losses allowance of trade receivables measured at amortised cost are set out in the table below:

	30-06-2021	30-06-2020
Opening balance	76.8	87.8
Decrease - utilization
Expected/incurred credit losses recognised / (reversed)	5.3	0.7
Closing balance		88.5
	30-06-2021	30-06-2020
Impairment loss (gain) - trade receivables	5.3	0.7
Impairment loss (gain) - other non-current receivables	-
Impairment loss (gain) - other receivables (financial assets)	-
Total impact on profit or loss for the year	5.3	0.7
Of which:
Continued operations (impairment of trade receivables and other financial assets)	5.3	0.7
Discontinued operations	-

	Trade receivables
30-06-2021	Current	0-60 days	61-365 days	Total
Expected credit loss rate	0.4%	1.1%	35.6%
Estimated gross carrying amount at default	318.3	20. 2	13.9	352.4
Expected credit loss	1.3	0.2	4.9	6.4

The expected credit loss (individual approach) is calculated as expected gross carrying amount of the financial asset at default date multiplied by expected credit loss rate, the product of probability of default index (PD) calculated for each ageing bucket (1.1% for current receivables, 3.0% for receivables between 0-60 days and 100% for the receivables over 61 days) and loss given default (LGD) index of 35.6%.

31-12-2020	Trade receivables
	Current	0-60 days	61-365 days	Total
Expected credit loss rate	0.3%	0.6%	16.8%
Estimated gross carrying amount at default	389.3	14.6	5.7	409.6
Expected credit loss	1.1	0.1	1.0	2.2

16 Cash and cash equivalents

	30-06-2021	31-12-2020
Cash in bank and on hand	3.061.4	144.4
Including cash in VAT accounts (restricted)	2.6	8.2
Total cash	3,061.4	144.4
Including in currency:	2.922.4	25.9
Cash in EUR converted to PLN	2,916.2	21.2
Cash in GBP converted to PLN	6.2	4.2
Cash in USD converted to PLN	-	0.4
Cash in other foreign currencies converted to PLN	-	0.1

17 Loans and borrowings

Lenders	Bank Handlowy w Warszawie SA, Bank Pekao SA, BNP Paribas Bank Polski SA, Goldman Sachs Bank Europe SE, JP Morgan AG, mBank SA, PKO BP SA, Barclays Bank Ireland PLC, DNB Bank Polska SA, Erste Group Bank AG, ING Bank Slaski SA Term Facility
Type	Term Facility	Revolving Facility
Currency	PLN	PLN
Agreement	Agreement of 25/01/2021 IPO Facilities Agreement
Purpose	Not specified	Not specified
Interest rate	WIBOR IM + 2%	WIBOR IM + 2%
Nominal value	PLN 1,950 m	PLN 800 m
Carrying amount 2021	11.943.0	690.0
Due date	28.01.2026
Covenants	Financial covenant under the senior facilities to maintain a maximum leverage ratio of 4.25× calculated on basis of definitions in agreement

The table below shows the details of new loans and borrowings:

18 Bonds

On June 29, 2021 InPost S.A. announced the closing of offering of EUR 490 m. The table below shows

the details of new bonds:

Type	Senior Unsecured Notes
Currency	EUR
Agreement	Agreement dated 24/06/2021 - Purchase Agreement
Purpose	As part of the financing for the acquisition of Mondial Relay SAS
Interest rate	2,25%
Nominal value	FUR 490.0 m
Rating	BB/Ba2
	Carrying amount 2021 EUR 480.0 m (PLN 2,169.9)
Due date	15.07.2027
	lssuer and its subsidiaries won't be in violation and/or Incurrence covenants default of its articles of association, any agreement, lease, indenture or obligation where violation would have Material Effect

19 Other financial liabilities

	30-06-2021	31-12-2020
Non-current	338.7	304.0
Lease liabilities	338.7	304.0
Current	238.8	232.7
Lease liabilities	238.4	232.6
Factoring liabilities	0.4	0.1
Total	577.5	536.7

20 Reconciliation of movements of liabilities to cash flows arising from financing activities

30-06-2021	Loans and borrowings	Lease liabilities	Factoring liabilities	Bonds
Amount at the beginning of period	767.1	536.6	0.1
Changes from financing cash flows
Proceeds from loans and borrowings	2,639.8
Proceeds from bonds				2,215.2
Payment of principal portion of lease liability		(124.6)
Repayment of loans and credits	(649.5)
Repayment of interest and commission on the loan	(47.7)	(12.6)
Repayment of interest and commission on the bond			-	(45.4)
Total changes from financing cash flows	1,942.6	(137.2)	-	2,169.8
Other changes
I ease additions		186.9
Interest cost	33.7	12.6		0.1
Other changes	2.2	(14.4)	(0.1)
Effect of changes in foreign exchange rates	(45.7)	(7.0)
Total liability-related other changes	(9.8)	178.1	(0.1)	0.1
Amount at the end of period	2,699.9	577.5	-	2,169.9

30-06-2020	Loans and borrowings	Lease liabilities	Factoring liabilities
Amount at the beginning of period	618.2	275.3	1.4
Changes from financing cash flows
Proceeds from loans and borrowings	82.1		0.3
Payment of principal portion of lease liability		(105.0)
Repayment of loans and credits	(2.4)
Repayment of interest and commission on the loan	(26.1)	(9.2)
Total changes from financing cash flows	53.6	(114.2)	0.3
Other changes
Lease additions		143.4
Interest cost	4.4	9.2
Other changes	2.3	0.8	(1.4)
Effect of changes in foreign exchange rates	52.0	6.8
Total liability-related other changes	58.7	160.2	(1.4)
Amount at the end of period	730.5	321.3	0.3

21 Contingent liabilities

With regard to contingent liabilities there are no significant changes to the information disclosed in the consolidated financial statement of Integer.pl S.A. Group for 2020.

Coverage of net cost of common services provided by the appointed operator - Poczta Polska (contingent liability)

InPost sp. z o.o. is registered as a postal operator in the register maintained by the Polish authority charged with regulating postal operators. The Polish Postal Act provides that universal postal services, comprising sorting, transport and delivery of letter-post items and postal parcels of specified dimensions, are provided by the designated operator (currently, Poczta Polska S.A. ("Polish Post"),

Based on these regulations, the designated operator may apply for a certain subsidy in the form of the financing of the net cost, due to the fact that designated operator is obliged to fulfil a number of obligations, including services throughout the country and incurs certain costs.

The net cost is the difference between the justified net cost of operations of the designated operator and the net cost of operations of the same operator providing postal services but not subject to the universal service obligation, minus the indirect benefits related to the provision of universal services and the benefits resulting from special or exclusive rights granted to the designated operator. InPost is subject to claims from Polish post for 2013 amounting to PLN 3.2 m and currently, as at moment of publishing this interim condensed consolidated financial statement, the President of UKE is expected to determine the amount of participation in the surcharge from InPost Sp. z o.o. The detailed information were provided for in the annual in the consolidated financial statement of Integer.pl S.A. Group for 2020.

The Group did not recognise the provision for the 2013 claim as the Management expects that the outcome of the proceeding will be favourable for InPost Sp. z o.o.

For the years 2014-2019 no loss had been reported by Polish Post. In 2020 the Polish Post did report a loss and is going to apply for the subsidy for this year. The Management is not able to reliably estimate the amount of potential claim towards InPost Sp. z o.o. raised in relation to the year 2020.

	Provision for exit costs	Employee benefits	Performance bonuses	Cash Bonus Plan	Provision for holidays and bonuses	Other	Total
Balance as at 31-12-2020	5.0	6.5	7.1	28.8	7.0	1.8	56.2
Recognition/ Creation		5.0	2.5	5.6	1.3	6.3	18.2
Reversal					(0,9)		(0.9)
Utilisation	(4.2)		(2,5)	(10.6)			(14.8)
Balance as at 30-06-2021	0.8	11.5	7.1	23.8	7.4	8.1	58.7

22 Provisions and accruals

23 Share-based payment

23.1 Management Incentive Plan

Several members of the Management Personnel of the Group had been granted shares in Al Prime & CY S.C.A. ("MIP Shares") as part of the Management Incentive Plan ("MIP"). The F-class shores hold a nominal value of 0.07 EUR per share. The detailed information about the programme were disclosed in the annual consolidated financial statements of Integer.pl as of 31 December 2020.

As at 30 June 2021, the Management's estimate with regards to the Exit dates used as at 31 December 2020 did not change. As a result the remaining cost will be recognised over the assumed period. Total costs recognized in statement of profit or loss for the period of 6 months 2021 amounted to PLN 55.4m. The higher costs as compared to prior year was mainly caused by the new granting under this

programme of 7,8% MIP shares which occurred in January 2021 and vested in 40% at the time of the IPO. Also the awards granted before 31 December 2020 vested in 40% at the IPO date. This charge is presented in the payroll costs. The estimate fair value of the awards granted in January 2021 amounted to EUR 300 per share and was determined using the same option price model as described in annual consolidated financial statements of Integer.pl.

The following table presents the number and change in MIP Shares during the year:

	30-06-2021	31-12-2020
	MIP Shares granted	MIP Shares granted
Outstanding at 1 January	971,976.0	957,704.0
Granted during the year	111,328.0	14,272.0
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of period	1,083,304.0	971,976.0

Accordingly, the Company recognizes an expense over the vesting period along with a corresponding parent contribution recognized in equity (other provisions) for the MIP Shares granted on those dates.

	30-06-2021	30-06-2020
Expense arising from MIP	55.4	1.7
Total expense	55.4	1.7

In 2021 the Company was listed on Amsterdam stock exchange which resulted in closing of the MIP programme admissions i.e. no further granting will be performed from this programme. The programme had been replaced by the Long Term Incentive Programme described below.

23.2 Long Term Incentive Programme

In 2021 new share-based Long Term Incentive Programme (further on 'LTIP') for Key Managers was introduced. The LTIP is a discretionary share plan, under which the Supervisory Board may grant to eligible employees awards of shares (LTIP Awards).

The conditions for the 2021 LTIP realisation are based on a three-year performance period (2021 to 2023) and will be determined by InPost Group EBITDA in 2023. Depending on the EBITDA target realization at the minimum level of PLN 2.85 b the granted shares will either vest in full, vest partially or not vest at all. The management assumption is that the shares will vest at full value on the 3rd anniversary of the granting. The assumption is also that no Managers will leave the Group before the shares vest.

The following table presents the number and change in LTIP Shares during the year:

	30-06-2021
	LTIP Shares granted
Outstanding at 1 January	I
Granted during the year	681,975.0
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of period	681,975.0

Accordingly, the Company recognizes an expense which equally impacts the P&L over the vesting period along with a corresponding parent contribution recognized in equity (other provisions) for the LTIP Shares granted on those dates.

	30-06-2021
Expense arising from LTIP	27
Total expense	2.7

24 Other liabilities

Current other liabilities	30-06-2021	31-12-2020
Non-financial liabilities
Payroll liabilities	229	20.8
Advances received	0.1	0.1
Liabilities to the state	30.8	45.4
Financial liabilities
Other reserves	-	0.3
Contract liabilities	6.5
Liabilities due to dividend payment and share redemption		529
Other current liabilities total	60.3	119.6

25 Trade and other payables

	30-06-2021	31-12-2020
Financial liabilities
Trade payables	250.2	247.7
to related entities
to third parties	250.2	247.8
Other payables	56.9	44.6
Liabilities from settlement of cash-on-delivery option	21.6	25.3
Investment liabilities	345	17.8
Other	0.8	1.5
Trade and other liabilities total.	307.1	292.3

26 Guarantees and other securities

As at 30 June, 2021 the total amount of granted bank guarantees on behalf of companies from the Group amounted to PLN 86.2 m (as at 30 June, 2020 amounted to PLN 35.0 m). Bank guarantees are a collateral for the obligations from contracts signed by the Group.

27 Related-party transactions

The services rendered to the Group by related parties (Key management personnel) consist of following: management, quality control, marketing, distribution, advertising, legal consulting, or deliveries of materials. No impairment allowance has been recognized in respect of these transactions. Receivables from related entities are not interest-bearing and hedged. Repayment conditions are on market terms.

Related party transactions
Entity's name (Key Management personnel)	Transactions
	30-06-2021	30-06-2020
Purchases
Consulting Services Marcin Pulchny	0.3	0.2
F.H. Fenix Rafał Brzoska	0.9	0.5
Lidar Management Dariusz Lipiński	0.4	0.2
FINSTRAT Adam Aleksandrowicz	0.6	0.5
ZIEVA CONSULTING Marcin Rosati	-	0.1
QUANTUM Damian Niewiadomski	0.3	0.5
Total	2.5	2.0

Entity's name (shareholder)	Transactions
	30-06-2021	31-12-2020
Liabilities
Advent International Corporation	0.8	0.8
Total	0.8	0.8

Related party transactions and balances
	Transactions		Balances
Entity's name	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020	As at 30-06-2021	As at 31-12-2020
Associates - revenues and receivables
EasyPack Plus Self Storage LLC (UAE) (other related party)
Associated Entity - Al Prime Bidco S. a r. l. (the previous shareholder, currently entity controlled by the current shareholder)
Loan and related interest			-	(690.7)
Other liabilities (dividends and share redemption)			-	(52.9)
Finance income			-
Finance costs	3.7	20.1

In 2021 as a result of reorganization that was described in note 1 all Loan Liabilities towards Al Prime Bidco S.à r.l. were paid along with liabilities related to Share premium redemption in amount PLN 1,238.1 m. In addition, as of the reorganisation, the liabilities from the dividend payment recognised as of 31 December, 2020 in the amount of PLN 40 m were cancelled and derecognised (see further details in note 1.1.2).

28 Key personnel remuneration

	Period of 6 months ended on 30-06-2021	Period of 6 months ended on 30-06-2020
Management Board	1.5	1.0
Executive committee	2.5	1.0
Supervisory board	1.0	0.3
Total key personnel remuneration	5.0	23

29 Financial instruments by category

	Category under IFRS 9	Carrying amount
		30-06-2021	31-12-2020
Financial assets measured at fair value through profit or loss
Derivative instruments other than used for hedging	at FVTPL
Trade receivables designated to be transferred under non-recourse factoring arrangements	at FVTPI	63.3	833
Financial assets not measured at fair value
Trade receivables not transferred to non- recourse factoring and other receivables	at amortized cost	282.7	3243
Other receivables - current	at amortized cost	8.4	4.7
Other receivables – non-current	at amortized cost	3.1	6.0
Loans granted	at amortized cost	-
Cash and cash equivalents	at amortized cost	3.061.4	1442
Total financial assets		3.418.9	562.5

	Category under IFRS 9	Carrying amount
		30-06-2021	31-12-2020
Financial liabilities measured at fair value
Derivative instruments other than used for hedging	FVTPI
Financial liabilities not measured at fair value
Current loans and borrowings	At amortized cost	709.0	23.7
Non-current loans and borrowings	At amortized cost	1,990.9	743.4
Bonds	At amortized cost	2.169.9
Trade and other payables	At amortized cost	307.1	2923
Non-current lease liabilities	Other financial liabilities	338.7	304.0
Current lease liabilities	Other financial liabilities	238.4	232.6
Other financial liabilities	At amortized cost	6.5	0.3
Current factoring liabilities	At amortized cost	0.4	0.1
Total financial liabilities		5,760.9	1,596.4

In case of financial assets and financial liabilities not measured at fair carrying amounts are reasonable approximation of their fair values as at 30 June 2021 and 31 December 2020.

Trade receivables under the factoring arrangements are measured at fair value based on the factoring arrangements provisions regarding transfer of receivables, which are assessed by the management as reflecting the market prices at the reporting date. These financial instruments are considered level 2 of fair value hierarchy.

30 Financial risk management objectives

With regard to the assessment of financial risk management, there are no significant changes to the information disclosed in the annual consolidated financial statements of Integer.pl S.A. Group for 2020.

31 Events after the balance sheet date

Acquisition of Mondial Relay

On July 1, 2021 acquisition of Mondial Relay was completed – one of the leading French parcel operators, was acquired by InPost S.A. for EUR 513 m paid in cash. At the moment of preparation of this interim condensed consolidated financial statements the purchase price allocation and financial statement of Mondial Relay at the moment of acquisition prepared in accordance with IFRS has not yet been completed therefore the Group is able to present last reported financial information of Mondial Relay in accordance to local GAAP (French GAAP) for period of March 1, 2020 – February 28, 2021 and balance sheet data as of February 28, 2021 (please refer to note 3.4).

PLN bonds issuance

On July 8, 2021 InPost S.A. has announced the closing of PLN 500 m in aggregate principal amount of series A PLN denominated 2.500% + WIBOR 6M notes due 2027.

The Group intends to utilize the proceeds from the offering (together with drawings under its existing revolving credit facility):

• · to consummate the acquisition of Mondial Relay SAS;
• to pay fees and expenses in connection with the acquisition and the related financing transactions;
• to refinance the existing indebtness and
• for general corporate purposes.

Luxembourg, 7 September 2021

Rafał Brzoska President of the Management Board

Adam Aleksandrowicz Vice President of the Management Board

Aleksandrowicz

Report on Review of Interim condensed consolidated Financial Statements

To the Board of Directors of InPost S.A.

We have reviewed the accompanying interim condensed consolidated financial statements of InPost S.A. (the "Company"), which comprise the interim condensed consolidated statement of financial position as at 30 June 2021, and the interim condensed consolidated statement of profit or loss and other comprehensive income, changes in equity and of cash flow for the six-months period ended 30 June 2021, and a summary of significant accounting policies and other explanatory information.

Board of Directors responsibility for the interim condensed consolidated financial statements

The Board of Directors is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union, and for such internal control as the Board of Directors determines is necessary to enable the preparation of interim condensed consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Responsibility of the "Réviseur d'entreprises agréé"

Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review. We conducted our review in accordance with International Standard on Review Engagements (ISRE 2410 "Review of interim financial information performed by the independent auditor of the entity") as adopted for Luxembourg by the "Institut des Réviseurs d'Entreprises". This standard requires us to comply with relevant ethical requirements and conclude whether anything has come to our attention that causes us to believe that the interim condensed consolidated financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework.

A review of interim condensed consolidated financial statements in accordance with ISRE 2410 is a limited assurance engagement. The "Réviseur d'entreprises agréé" performs procedures, primarily consisting of making inquiries of management and others within the Company, as appropriate, and applying analytical procedures, and evaluates the evidence obtained.

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these interim condensed consolidated financial statements.

PricewaterhouseCoopers, Société coopérative, 2 rue Gerhard Mercator, B.P. 1443, L-1014 Luxembourg T : +352 494848 1, F : +352 494848 2900, www.pwc.lu

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union.

PricewaterhouseCoopers, Société coopérative Luxembourg, 7 September 2021 Represented by

Brieuc Malherbe