Waberer International : 2017 Third Quarter report - Excellent year-on-year dynamics with organic and inorganic growth

THIRD QUARTER 2017 FINANCIAL REPORT

Excellent year-on-year dynamics with organic and inorganic growth

Budapest, November 14, 2017 - WABERER'S INTERNATIONAL Nyrt., the European leader in full truckload (FTL) transportation, today reports its financial results for the three months ended September 30, 2017.

Highlights

• Revenue grew by 23% year-on-year in the third quarter of 2017 to EUR 182 mn driven both by organic expansion and M&A
  • International Transportation Segment revenue increased by 23%, due to a better pricing environment and the acquisition of Link in Poland
  • Regional Contract Logistics revenue continued to grow strongly by being 30% above last year

• Recurring Group EBITDA increased by 20% year-on-year to EUR 25 mn

  • In the International Transportation Segment, recurring EBITDA increased by 28%, 12 pp of which was coming from the acquisition of Link and 16 pp to organic expansion and efficiency gains with fuel consumption improving more than 3%

  • EBITDA grew by 8% in the Regional Contract Logistics segment with major trends remaining favourable

• Recurring EBIT rose by 30% in the third quarter to EUR 10 mn

• Recurring Net income increased by 8% year-on-year to EUR 6.2 mn, while third quarter EPS

  rose by 29% to EUR 0.34

• Net leverage ratio temporarily increased to 3.4 x recurring EBITDA due to the consolidation of Link's debt, with free cash flow at EUR 39 mn
• Fleet size grew by 17% year-on-year

|Key figures1 (EUR mn unless otherwise stated)

Revenue

EBITDA (recurring) EBIT (recurring)

Net income (recurring) EPS (EUR)

EBITDA margin (recurring) EBIT margin (recurring)

Net income margin (recurring) Average number of trucks

1 EBITDA was positively affected by a one-time reversal of IPO costs in Q3 2017 totalling EUR 2.0 million that was included as a non-recurring item (see box on page 4 for more detail). For the definitions of non-IFRS measures and key performance indicators, please refer to the prospectus dated 15 June 2017, which was approved for publication by the National Bank of Hungary in its resolution No. H-KE-III-426/2017, dated 16 June 2017 (hereinafter: Prospectus).

CEO comment

Ferenc Lajkó, CEO of WABERER'S INTERNATIONAL Nyrt. commented: "In the third quarter of 2017, the Group's performance continued to show that we are capable of delivering on our goals based on our successful growth strategy. Growth was based on a balanced combination of organic and inorganic growth, as demonstrated by our financials from the top- all the way through to the bottom- line. On the organic front, we have pursued a strategy of cautious price increases and managed to maintain our profitability as our previously communicated short-term market outlook materialised. Moreover, we have also continued to improve on scale- and innovation-based efficiencies to improve key metrics such as fuel consumption.

Meanwhile, we are also exploring longer-term opportunities. We have come to an important milestone with one of our truck manufacturing partners following a successful platooning test in live traffic in September. We are always eager to join our partners' research and development efforts at the earliest possible phase so we can be the first ones to adopt cutting-edge technologies to enhance our efficiency and strengthen our market leader position in Europe.

Regarding possible future developments in our activities, we continue to evaluate potential acquisition targets in neighbouring countries. We are looking for opportunities that would fit well in our regional contract logistics portfolio and will enable us to capitalise on the requests of our multinational clients to provide logistics services across their broader areas of operation. In the meantime, we will continue to strive for greater efficiencies in our business and look to utilise the latest technology to provide optimal solutions for our clients and favourable results for our shareholders."

After a successful third quarter, I remain confident that we will achieve my and the market's expectations for Waberer's in 2017."

WABERER'S INTERNATIONAL Nyrt.

This report may contain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, the prospectus dated 15 June 2017, which was approved for publication by the National Bank of Hungary in its resolution No. H-KE-III-426/2017, dated 16 June 2017, and available on our website for investors at http://www.waberers.com/en/investors.

Management analysis

Group profit for the period

|Income Statement (EUR mn)

Revenue Direct costs

Gross profit OPEX

Non-recurring items EBITDA (recurring)

Depreciation and amortisation EBIT (recurring)

Financial result Taxes

Net income (recurring) Gross margin

EBITDA margin (recurring) EBIT margin (recurring)

Net income margin (recurring)

Revenue

Group revenue in the three months up to September 30, 2017, was 23% higher than in the same period last year, at EUR 182 million. The increase was partly due to the consolidation of Link effective from July 1, 2017, but there was organic increase in revenues across all three business segments. As expected after the first half of 2017, market conditions in the International Transportation Segment (ITS) continued to improve with average per kilometre transportation prices increasing by more than 1%, supporting margin levels while organic volume growth remained constrained. The 30% revenue increase in the Regional Contract Logistics (RCL) segment was mainly due to a more intense cooperation with some of the key clients active in the retail sector.

EBITDA and EBIT

In the third quarter of 2017, gross profit increased by 11% year-on-year to EUR 37 million versus the same period last year. Gross profit margin decreased by 2.3 percentage points to 20.1% in the same period. Recurring EBITDA rose to EUR 25 million, equivalent to 20% growth compared to the same period last year. Growth in recurring EBIT reached 30% amounting to EUR 10 million in the third quarter of 2017. Pursuant to the Group's strategy, EBITDA dynamics were roughly evenly balanced between organic and inorganic1 (the effect of Link's acquisition) growth.

2017 third quarter recurring EBITDA and recurring EBIT margins were 0.4 percentage points lower and 0.3 percentage points higher than in the same period in 2016, at 13.7% and 5.4%, respectively. The decrease in EBITDA margin is attributable to the dilution effect of Link's consolidation as the Group's recurring EBITDA margin would have increased excluding Link. The organic margin improvement is attributable to the unfavourable effect of the rise in the unit prices of human resources and fuel being offset by increasing efficiencies in the utilisation of these and other resources. Link's lower margin is mainly the result of its different business mix with approximately half of its revenue

1 Refer to page 5 for more detail on Link's performance and contribution to Group EBITDA.

generated by freight forwarding activities with lower EBITDA margins than transportation by own trucks.

In the third quarter of 2017, the 12% year-on-year rise in fuel costs to EUR 29 million was largely due to higher fuel prices in Europe and more kilometres

| Group revenue, cost items, and EBITDA in Q3 2016 and 2017 (EUR mn)

run. At the same time, the negative fuel

price effect was more constrained than seen across the European Union due to better procurement and fuel efficiency showed a notable improvement of more than 3% in the past year in the international segment. While efficiency improvements are going to be pursued in the future, the Group continues to believe that fuel prices can be passed on to customers, albeit with a time lag.

Compared to the third quarter of 2016, toll fees and transit costs marked a 45% increase to EUR 30 million in the third quarter of 2017, due to Link's

Revenue

Direct wages, benefits & allowances Fuel cost

Toll fees & transit costs

Cost of subcontractors and reins. fee Other cost

Net gain on fleet sales and COGS

Gross profit Indirect wages & benefits

Other services

Other operating income Other operating expense

Non-recurring items Recurring EBITDA

different transportation mix of a higher portion of intermodal transportation. Apart from intermodal transportation, a combination of more kilometres run and higher per kilometre toll prices in both the international and regional segments contributed to the rise in toll fees and transit costs.

The 35% year-on-year rise in cost of subcontractors and reinsurance fee to EUR 42 million in the third quarter reflected stronger freight forwarding activity both organically and due to Link's different business mix, while reinsurance expenses increased in line with the expansion of the insurance arm of the Group.

|Non-recurring items and capitalisation (EUR mn)

In accordance with IFRS, IPO-related expenses may be capitalised by the issuer if the IPO is successful and the expense does indeed relate to the IPO. Up until September 30, 2017, a total of EUR 2 million of such costs were identified and capitalised in the third quarter of 2017. This resulted in total of non- recurring items turning negative in the third quarter of 2017.