Intereuropa

Quarterly Report • Mar 14, 2024

INFORMATION REGARDING THE BUSINESS RESULTS OF THE INTEREUROPA GROUP AND INTEREUROPA, D.D.

IN 2023

(UNAUDITED DATA)

T A B L E O F C O N T E N T S

BUSINESS RESULTS OF THE INTEREUROPA GROUP	3
BUSINESS RESULTS OF THE PARENT COMPANY INTEREUROPA, D.D.	10

BUSINESS RESULTS OF THE INTEREUROPA GROUP 1

The year 2023 was challenging both for the Intereuropa Group and for most of the world's logistics providers. Lower economic growth, reduced trade volumes between the EU and the rest of Europe, high inflation, weak demand and the conflicts in Ukraine and the Middle East have had a significant impact on logistics flows. Despite the uncertain economic and political situation in the international environment, the Intereuropa Group managed to provide uninterrupted logistics support to its customers throughout the supply chain, generating sales revenue of EUR 188.5 million. In 2023, while successfully managing its operating costs, the Group generated its highest operating cash flow (hereinafter: EBITDA² ) in twelve years. The highest operating profit for the same period was significantly influenced by operating revenues from property valuation.

Based on unaudited figures, the Intereuropa Group generated EUR 188.5 million in sales revenue in 2023, a decrease of 6% or EUR 11.9 million relative to 2022. The decline in revenue was significantly impacted by considerably lower prices for sea and air freight and lower demand for road transport. EBITDA increased by 5% to EUR 15.8 million. However, the major positive development for the Group that was heavily indebted a few years ago can be seen in the evolution of net debt³ , which at the end of 2023 amounted to EUR 27.5 million or 1.7 times EBITDA, the lowest in the Group's last twenty years of operations. Compared to the end of the previous financial year, Intereuropa Group reduced its net debt by EUR 15.0 million.

Sales revenue	-6% relative to 2022
EUR 188.5 million	-5% relative to the plan
EBITDA	+5% relative to 2022
EUR 15.8 million	-4% relative to the plan
Operating profit	+35% relative to 2022
EUR 11.1 million	+38% relative to the plan
Net profit	+42% relative to 2022
EUR 7.3 million	+34% relative to the plan

¹ This information regarding the business results of the Intereuropa Group was drawn up on the basis of unaudited data.

² EBITDA: operating profit + depreciation/amortisation + revaluation operating expenses for intangible assets and property, plant and equipment – revaluation operating revenues from the reversal of impairments of intangible assets and property, plant and equipment

³ Net debt: financial liabilities – loans granted and deposits – cash

Information regarding the business results of the Intereuropa Group and Intereuropa, d.d. in 2023

Net debt
2023: EUR 27.5 million	2022: EUR 42.5 million
	Net debt / EBITDA
2023: 1.7	2022: 2.8

The largest increase in sales revenue in 2023 compared to 2022 is evident in the subsidiaries in Serbia and Montenegro, while the smaller subsidiaries in Slovenia and Croatia, as well as the subsidiary in Kosovo, also generated more revenue.

Figure 1: Changes in the sales revenue of the Intereuropa Group between 2019 and 2023

The sales revenue of EUR 188.5 million is 5% below the planned figure. Sales in the intercontinental transport business line are on track, while sales in the other two business lines are below those planned, most notably in absolute terms in the land transport business line, which is mainly due to reduced customer demand for road transport services and increased competition in the market, reflected in lower selling prices.

The decline in sales was followed by an even greater decline in direct costs, which is reflected in a 5 percentage point increase in the Group's sales margin.

Also having a significant impact on operating results were other operating revenues, which amounted to EUR 4.6 million in 2023. This is EUR 4.1 million higher than planned and also EUR 3.4 million higher than other operating revenues in the previous financial year. In 2023, the largest share was accounted for by revenues from the reversal of impairments on property, plant and equipment and investment property amounting to EUR 3.3 million, and revenues from government grants received amounting to EUR 0.9 million. The majority of the latter relates to subsidies for electricity and gas in the Group's companies in Slovenia and Croatia.

In 2023, the Intereuropa Group generated EBITDA in the amount of EUR 15.8 million, which is 4% below the planned figure, but 5% higher than in 2022 and the highest in the last twelve years. The slightly lower-than-planned EBITDA is due to higher labour costs, indirect service costs and other operating expenses.

The increase in EBITDA compared to 2022 was mainly driven by a higher sales margin and better collection of past due receivables. On the other hand, all cost categories increased, except direct service costs and allowances for receivables.

Economic labour costs, which include labour costs of employees, the cost of hired labour and the cost of student labour, were up by 5% in 2023 compared to the previous financial year, and exceeded the planned amount by 6%. Most of the increase relates to the parent company.

Normalised EBITDA amounted to EUR 15.9 million in 2023, an increase of 4% relative to normalised EBITDA in 2022.

The Intereuropa Group's operating profit (EBIT) amounted to EUR 11.1 million in 2023, an increase of EUR 2.9 million or 35% relative to the previous year. The 2023 operating profit exceeds the planned figures by EUR 3.1 million or 38%.

Figure 2: Changes in the operating profit of the Intereuropa Group between 2019 and 2023

In 2023, normalised EBIT amounted to EUR 8.2 million, 3% above the planned figure.

Both the EBITDA margin and EBIT margin in 2023 are above the 2022 figures and above those planned. The EBITDA margin increased from 7.5% in 2022 to 8.4% in 2023, while the EBIT margin increased from 4.1% in 2022 to 5.9% in 2023.

The Group's net debt amounted to EUR 27.5 million at the end of 2023, a decrease of EUR 15.0 million relative to the end of the previous financial year, mainly due to a decrease in longterm financial liabilities due to early repayments of debt. The reduction in net debt is reflected in an improved net debt / EBITDA ratio, which stood at 1.7 in 2023 and is 38% lower than the previous year and 28% lower than planned.

6

Figure 3: Changes in EBITDA and the net debt / EBITDA ratio of the Intereuropa Group between 2019 and 2023

Profit from ordinary operations exceeds both the planned figure and the 2022 profit from ordinary operations. The better performance here is driven by the higher operating profit, while the loss from financing activities is higher than the planned and comparable 2022 result. The lower result from financing is mainly driven by higher interest expenses on loans from others and higher interest expenses on long-term lease liabilities. Expenses arising from negative exchange rate differences are significantly lower in 2023 than in 2022.

The Intereuropa Group generated a net profit of EUR 7.3 million in 2023, an increase of EUR 2.2 million relative to the previous financial year and EUR 1.8 million higher than planned. Current and deferred taxes amounted to EUR 1.6 million in 2023, a decrease of EUR 0.4 million relative to the previous financial year and EUR 0.5 million higher than planned. The higherthan-planned tax expenses are mainly due to deferred taxes in the Croatian subsidiary arising as a result of the revaluation of real estate.

The Group invested EUR 4.8 million in property, plant and equipment, intangible assets and investment property in 2023. Of that amount, EUR 2.1 million was invested in real estate and EUR 2.7 million in equipment and intangible assets. On the other hand, the Group sold obsolete assets with a carrying amount of EUR 55,000.

Table 1: Key operating indicators of the Intereuropa Group (in EUR thousand)

in EUR thousand	2023	2022	Index 23/22
Sales revenue	188,474	200,418	94
Gains/losses from the derecognition of operating receivables	5	-10	-
Other operating revenues	4,599	1,169	394
Costs of goods, materials and services	135,347	149,526	91
Labour costs	36,362	33,962	107
Amortisation and depreciation	7,660	6,674	115
Impairment losses on receivables	-182	860	-
Other operating expenses	2,834	2,355	120
Revaluation operating expenses for intangible assets and	434	236	184
property, plant and equipment
Other operating expenses	2,400	2,118	113
Operating profit (EBIT)	11,058	8,199	135
Finance income	143	210	68
Finance costs	2,362	1,377	172
Loss from financing activities	-2,219	-1,167	-
Profit from ordinary operations	8,844	7,046	126
Corporate income tax (current and deferred taxes)	1,560	1,917	81
Net profit	7,285	5,129	142
EBITDA4	15,830	15,110	105
Normalised EBITDA5	15,890	15,256	104
Normalised EBIT6	8,231	8,582	96

⁴ EBITDA: operating profit + depreciation/amortisation + revaluation operating expenses for intangible assets and property, plant and equipment – revaluation operating revenues from the reversal of impairments of intangible assets and property, plant and equipment

⁵ Normalised EBITDA: excludes the effect of other operating revenues, expenses from the creation of provisions, expenses for the participation of employees and hired labour in profits, and expenses from previous years at Group subsidiaries.

⁶ Normalised EBIT: excludes the effect of other operating revenues, expenses from the creation of provisions, expenses for the participation of employees and hired labour in profits, and expenses from previous years at Group subsidiaries.

Information regarding the business results of the Intereuropa Group and Intereuropa, d.d. in 2023

in EUR thousand	2023	2022	Index 23/22
EBITDA margin (in %)	8.40	7.54	111
EBIT margin (in %)	5.87	4.09	143
Sales revenue/employee	139.866	152.925	91
Value added/employee	38.731	37.443	103
ROE (in %)	5.3	3.9	135

in EUR thousand	31. 12. 2023	31. 12. 2022	Index 23/22
Assets	246,820	240,045	103
Equity	147,964	136,303	109
Net debt 7	27,530	42,548	65
Investments in property, plant and equipment, and intangible assets	4,762	10,840	44
Number of employees8	1,348	1,311	103

⁷ Net debt: financial liabilities – loans granted and deposits – cash

⁸ Number of employees: calculated on full-time equivalent basis

BUSINESS RESULTS OF THE PARENT COMPANY INTEREUROPA, D.D. 9

On the basis of unaudited data, the parent company Intereuropa, d.d. (also hereinafter: the Company) generated EUR 126.1 million in sales revenue in 2023, which was down 8% on 2022 and 4% above planned revenue. In 2023, all three business lines generated lower sales revenue than in the previous financial year, while the intercontinental transport business line exceeded the planned figures in the products of car logistics and project cargo. The lower revenues were significantly affected by the lower selling prices for maritime and air transport and a drop in demand for land transport, which also contributed to the fall in prices.

In 2023, the Company generated EBITDA of EUR 8.1 million, a decrease of 5% relative to 2022 and 6% higher than planned. The outperformance was mainly driven by higher sales margins, higher other operating revenues, most notably revenues arising from the government grants received – electricity and gas subsidies, and better recovery of receivables. However, the negative impact, reflected in the decrease in EBITDA compared to 2022, is mainly due to labour costs.

Normalised EBITDA amounted to EUR 8.2 million in 2023, a decrease of 9% relative to normalised EBITDA in 2022, and 7% higher than planned.

The Company's operating profit (EBIT) amounted to EUR 4.7 million in 2023, an increase of 1% relative to the previous year, and EUR 1.1 million or 32% higher than planned.

In 2023, normalised EBIT amounted to EUR 4.3 million, which is 19% above the planned figure.

Both the 2023 EBITDA margin and EBIT margin are above the 2022 figures and above those planned. The EBITDA margin increased from 6.2% in 2022 to 6.4% in 2023, while the EBIT margin increased from 3.4% in 2022 to 3.7% in 2023.

The Company's net debt amounted to EUR 30.8 million at the end of 2023, which was EUR 11.6 million less than planned and down EUR 13.3 million or 30% relative to the end of the previous financial year. Contributing most to the decrease in net debt was a decrease in financial liabilities and an increase in cash and cash equivalents.

Profit from ordinary operations in 2023 totalled EUR 3.7 million, which was 16% higher than planned and down 25% relative to 2022. The shortfall is mainly due to higher interest expenses on loans and impairment losses on loans given within the Group. For these reasons, the results from financing activities in 2023 are worse than in the previous financial year. In fact, finance income in 2023 is 9% higher than in 2022, while finance costs are 149% higher.

⁹ This information regarding the business results of the Intereuropa Group was drawn up on the basis of unaudited data.

The Company's net profit amounted to EUR 3.4 million in 2023, which is 17% higher than planned and down 16% relative to the previous financial year. Current and deferred taxes are at the planned level and EUR 0.6 million lower than in 2022.

Figure 3: Changes in the operating profit of the parent company Intereuropa, d.d. between 2019 and 2023

The parent company invested EUR 2.4 million in 2023. Of that amount, EUR 0.7 million was invested in real estate and EUR 1.7 million in equipment and intangible assets. The carrying amount of the Company's fixed assets sold in 2023 was EUR 43,000.

Table 2: Key operating indicators of the parent company Intereuropa, d.d., in EUR thousand

in EUR thousand	2023	2022	Index 23/22
Sales revenue	126,140	137,680	92
Gains/losses from the derecognition of operating receivables	2	-5	-
Other operating revenues	1,543	640	241
Costs of goods, materials and services	94,285	105,690	89
Labour costs	23,692	22,260	106
Amortisation and depreciation	3,916	3,799	103
Impairment losses on receivables	-298	758	-
Other operating expenses	1,363	1,121	122
Revaluation operating expenses for intangible assets and property, plant and equipment	187	55	340
Other operating expenses	1,176	1,066	110
Operating profit (EBIT)	4,726	4,686	101
	1,303	1,200	109
Finance income	2,313	928	249
Finance costs	-1,011	273	-
Profit or loss from financing activities
Profit from ordinary operations	3,715	4,959	75
Corporate income tax (current and deferred taxes)	336	927	36
Net profit	3,378	4,032	84
EBITDA10	8,127	8,540	95
Normalised EBITDA11	8,199	9,006	91
Normalised EBIT12	4,282	5,207	82
EBITDA margin (in %)	6.44	6.20	104
EBIT margin (in %)	3.75	3.40	110
Sales revenue/employee	210.210	241.523	87
Value added/employee	53.027	54.032	98
ROE (in %)	3.4	4.3	79

¹⁰ EBITDA: operating profit + depreciation/amortisation + revaluation operating expenses for intangible assets and property, plant and equipment – revaluation operating revenues from the reversal of impairments of intangible assets and property, plant and equipment

¹¹ Normalised EBITDA: excludes the effect of other operating revenues, expenses from the creation of provisions, expenses for the participation of employees and hired labour in profits.

¹² Normalised EBIT: excludes the effect of other operating revenues, expenses from the creation of provisions, expenses for the participation of employees and hired labour in profits.

Information regarding the business results of the Intereuropa Group and Intereuropa, d.d. in 2023

in EUR thousand	31. 12. 2023	31. 12. 2022	Index 23/22
Assets	184,399	177,803	104
Equity	102,925	97,379	106
Net debt 13	30,844	44,142	70
Investments in property, plant and equipment, and intangible assets	2,418	3,243	75
Number of employees14	600	570	105

Koper, 13 March 2024 Intereuropa, d.d.

Management Board

¹³ Net debt: financial liabilities – loans granted and deposits – cash

¹⁴ Number of employees: calculated on full-time equivalent basis