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2017 HALF YEAR RESULTS ANALYST CONFERENCE CALL TRANSCRIPT August 14, 2017, 14:00 CET (13:00 BST) Coordinator Good afternoon Ladies and Gentlemen, and welcome to the 2017 Half-year results analyst conference call. My name is Maddie and I will be your coordinator for today’s conference. I will now hand you over to Ferenc Lajkó, CEO, to begin today’s conference. Ferenc Lajkó Good afternoon ladies and gentlemen. Thank you for joining us to discuss the first half 2017 results for Waberer’s Group. My name is Ferenc Lajkó, the CEO of the Group and I am joined by Barna Erdélyi, who is my deputy and CFO. We will make a brief summary presentation in order to give you more flavour regarding the report. I will start with a warm up, than continue with the key highlights and the group performance with a market summary. Then Barna is going to give you more detailed information segment by segment. In the final part of the presentation I supply a status about Link integration and close the session with Q&A moderated by Maddie. So, let me remind you that Waberer’s is a true growth story! In our growth strategy we successfully combine the organic and inorganic components, and as a result of this we grow much faster than the transport sector or the European economy. The platform of our organic growth are a large European and the fast-growing Hungarian logistic market, which areas promise unlimited opportunities for expansion. In our organic growth strategy we focus on our compelling value proposition, which enables us to gain market share from our competitors. In order to be able to produce this compelling value proposition we use our strength like economies of scale based on network effect and buying power and efficiency and technological innovation. The platform of our inorganic growth is the extremely fragmented European transport industry, which supply us with plenty of nice acquisition opportunities, and the driver of this inorganic growth is customer demand for industry consolidation. Waberer’s is a true growth story! That’s what we proved in the past, and that’s what we promised to our investors during the IPO. We believe that the first half year figures demonstrate very well: we delivered what we promised. The group performed well not only on the organic growth, but also on the inorganic growth fields, what’s

2017 HALF YEAR RESULTS ANALYST CONFERENCE … · Prospectus and during the IPO Roadshow Presentation we showed that our client retention rate is 99% – this is a strong basis for

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2017 HALF YEAR RESULTS ANALYST CONFERENCE CALL TRANSCRIPT

August 14, 2017, 14:00 CET (13:00 BST)

Coordinator Good afternoon Ladies and Gentlemen, and welcome to the 2017 Half-year results analyst conference call. My name is Maddie and I will be your coordinator for today’s conference. I will now hand you over to Ferenc Lajkó, CEO, to begin today’s conference. Ferenc Lajkó Good afternoon ladies and gentlemen. Thank you for joining us to discuss the first half 2017 results for Waberer’s Group. My name is Ferenc Lajkó, the CEO of the Group and I am joined by Barna Erdélyi, who is my deputy and CFO. We will make a brief summary presentation in order to give you more flavour regarding the report. I will start with a warm up, than continue with the key highlights and the group performance with a market summary. Then Barna is going to give you more detailed information segment by segment. In the final part of the presentation I supply a status about Link integration and close the session with Q&A moderated by Maddie. So, let me remind you that Waberer’s is a true growth story! In our growth strategy we successfully combine the organic and inorganic components, and as a result of this we grow much faster than the transport sector or the European economy. The platform of our organic growth are a large European and the fast-growing Hungarian logistic market, which areas promise unlimited opportunities for expansion. In our organic growth strategy we focus on our compelling value proposition, which enables us to gain market share from our competitors. In order to be able to produce this compelling value proposition we use our strength like economies of scale based on network effect and buying power and efficiency and technological innovation. The platform of our inorganic growth is the extremely fragmented European transport industry, which supply us with plenty of nice acquisition opportunities, and the driver of this inorganic growth is customer demand for industry consolidation. Waberer’s is a true growth story! That’s what we proved in the past, and that’s what we promised to our investors during the IPO. We believe that the first half year figures demonstrate very well: we delivered what we promised. The group performed well not only on the organic growth, but also on the inorganic growth fields, what’s

more we reached successes in efficiency development, in cost reduction and in financial performance as well. The first half year figures are fully in line with our and with the market’s expectations and that is a firm platform to continue our increasing performance in the remaining part of this year. As we mentioned before, we are working in a tough and highly competitive industry, which is always full of challenges. The first six months’ good performance prove very well one of the strength of our management, which is adoptability. That means we are ready for adopting to all kind of challenges or market conditions in order to deliver the expected results for our investors. Based on the first six month figures, I remain confident that Waberers 2017 full year performance will be in line with our and the market’s expectations. So let’s go further to the Highlights on page number 4. Thanks to our European successful sales efforts, the group revenue grew by 13%, which is much higher than sector or our competitors’ performance in the same period. A remarkable chunk of this growth is coming from our growing market share that we gained from our competitors due to our compelling value proposition and the remaining part of the growth is coming from the consolidation of the Insurance Company after the acquisition. We increased the recurring EBITDA by 4% meanwhile we reached a nice 14% increase in the recurring EBIT. We closed successfully the LINK acquisition. The second circle of our highlights are efficiency and costs. Owing to the refinement of our tried and tested optimisation software, we reached a record high on the he field of loaded ratio in the first six months of the year. We implemented successfully our new software, which is monitoring the drivers’ driving style. The implementation was so successful, that we reached a material saving already in the first half year of 2017. And this is just the beginning of this software working. We exploit our opportunities on buying power, and as a result of this, we could reach higher discounts from our fuel suppliers around February and we enjoyed better prices for almost the full period of the first half year. As a result of our new workflow management in the workshop and of bargaining longer warranty period for the trucks, we could decrease the cost of maintenance of our trucks as well. So, all in all I can announce with pride that the first half results of Waberer’s shows a visible value generation towards our investors, which is well-demonstrated by an increase in net income by 21% and an increase in EPS by 29%. As I mentioned before, the first half year Group performance (page 5) is fully in line with our and with the market’s expectation, however the composition shows some deviation. Both of or main segments performed well and the Other segment too, but the first 6 month delivered a plenty of challenges, that we had to answer to. In the International Transportation Segment we faced an unexpected 6-7 weeks’ long microcycle with weaker market, than the normal in February and March. Meanwhile, we experienced an increasing trend on fuel price and a negative calendar effect as well. These effects caused a temporary profit pressure for the whole European transport sector in first quarter of the year.

But we at Waberer’s reacted in a couple of weeks and started to offset these effects by more efficient pricing, by volume increase, by efficiency measures and cost cutting. As a result of this fast and efficient reaction, the second quarter trading shows increasing volumes, increasing selling price and lower costs in the International Transportation Segment. In the second half of the year we expect further increasing profitability in the main segment. Regarding the Regional Contract Logistics Segment, we had a completely different business environment. This business segment performed way over our expectations, we faced an outstanding good period in the first six months. The drivers of this excellent performance came from the well-running Hungarian retail sector - in some weeks the demand outstripped the supply that caused temporary capacity shortage on the market. Although we realised some cost increase in this segment, all has already been passed on to the customers, so that profitability is secured. Now I give the floor now to Barna to drill down into the details segment by segment. Barna Erdélyi Thank you Ferenc and let me also welcome everyone to the first results call for Waberer’s. We are continuing our presentation on page 6 and will go through the different business segments and group level financials after that. So let’s continue with the international full truck load segment. Just a short summary: this is the segment where we are focusing on long haul FTL international transportation basically in the Schengen zone, with an extremely standardized fleet. That’s roughly 80 percent of our Group activity and I would like to emphasize that we could continue our growth and we could follow our strategy, which is organic and inorganic growth in this business. The first half of 2017 was about organic growth, but parallel to that we prepared in details an inorganic step which will be presented by Ferenc at the end of the presentation – I mean the Polish LINK acquisition. As part of the organic growth we could increase our revenue by almost 4 percent – the basis of this growth was our extremely good relationship with our Key account clients. If you remember, in the Prospectus and during the IPO Roadshow Presentation we showed that our client retention rate is 99% – this is a strong basis for further growth. Parallel to that, our fleet extension in this field was roughly 4%. We increased our fleet with 120 trucks and 120 trailers compared with the first half 2016. The growth of the fleet is bigger that it was in the first half of 2016, and we are really proud of it. Besides that, of course, as part of our strategy, we accelerated the freight forwarding activity growth trend which was a low double digit percentage during the first half of 2017. As Ferenc already mentioned, we had 6-8 challenging weeks on the market. It means that there were circumstances that we had to adapt to, one of them was, just a calendar effect, which means that we had 3.5 less transportation days during the first half. But besides that we faced price pressure caused mainly by some of the industries we are serving for – among them

I would like to highlight for example the automotive. But besides that the fuel consumption is also increasing and the spot market reflected it on the market only after a while. Altogether these were the circumstances that we faced in the middle or I would say in the last part of first Q, but let me emphasize that Q2 was definitely better than Q1. The trend is improving and we are quite positive now also so we see this trend can continue and we can profit from it. Let’s talk about some cost elements of the International Transportation. First of all, the drivers: if you remember in 2016 we did a big step regarding the driver wages which was roughly 15-20%. This year the wage inflation in terms of international drivers was 7% which is exactly the same what we presented during the IPO procedure. That is a sustainable level (of growth) and let me emphasize that we have had more than enough work force (i.e. drivers) in our system, which is really exceptional in our industry and we are really proud of it. The second cost element would be fuel. Think it’s well-known the oil price is increasing but I think our step against it was really relevant and significant during the first half. Although in Europe the average fuel price increase was 11% that you can check, it’s an official statistics. The fuel price effect at Waberer’s was between 6 and 8 percent because of our new procurement strategy. It means that from first half of 2017 we divided our Western European fuelling in between two suppliers and made a big profit on it – I mean we have relatively much better prices than before. Finally, if you check the transit cost trends or the improvement of our loaded ratio which is at record high already mentioned by Ferenc, I would also emphasize the effect of our in-hosue-developed software. This development procedure is continuous, and we think that step by step we can renew our software portfolio. Continuing the presentation with slide 7 with the Regional Contract Logistics segment, please remember that segment is about Hungary and the neighbouring countries with a much more complex activity than we have in the International segment – this is distribution, warehousing, value added services and FTL. But back to the half year, we believe that Regional Contract Logistics is a real success story, not just in the last half year but in the last one and a half years, it is strongly growing and there is a big headroom in this activity also. We think that the background reason behind this growth is that we can offer a very unique mix to the blue chip customers in the region. We can give them capacity warranty and very important for us, behind this background we have not just extended contracts with our existing clients, but also huge new client acquisitions with much more complex activity mix than we had before, which means higher margin for the Company also. An example: we do now the part of the in-house logistics of Audi in the Western part of Hungary, or we took over the whole logistics of Hungarian Tesco – we are really proud of it. Talking about the numbers, I think you can see that revenue growth was 38 percent and EBITDA growth is 44 percent, which means not just growing but improving efficiently although the cost structure is different from the one before – it reflects on the slightly changing business picture, but altogether the

margins are improving which means an extremely good performance in this business segment. In this segment you can see that in terms of the indirect wages there is a big growth and I would explain it because of the more and more complex activity regarding our clients which took over some white collars from Tesco and Audi also – that is the reason behind. As you all know, some of the several changes above presented started already in the second half of 2016, but going forward and thinking about the demand for our value proposition we expect this segment to be the key driver of growth in the coming quarters also. Now please follow me on page 8, continuing the presentation of the Other segment, which is mainly the 3rd party insurance activity of our company. Financials of this segment have not had a huge effect on the Group, but I think that giving you a full picture about our company we have to talk about it briefly. Please do not forget that we acquired this business leg in April 2016 so we have had this segment since Q2 2016. This is why you see a quarterly comparison on the slide. I think it is easy to see that we had an improving top-line and improving efficiency also in this segment. The reason behind is very successful client acquisitions, which makes us money and profit also. Beside that let me emphasize that we strongly believe that having the captive insurance leg and making the acquisition was the right decision – we already see the first very positive signs of the stronger cooperation between the transportation team and the insurance team. Altogether we believe it was the right decision and the right direction. On slide 9, we have the Group-level P&L: now let me emphasize that our Q2 was much better than Q1, which is an improvement. Our revenue growth was 13 (percent) and gross margin increase was 14 (percent), but I think you can have the question that what the trends and what are the reasons and the factors between EBITDA and gross margin – because the EBITDA growth of the Group was 4 percent. There are three main factors and elements behind: the non-recurring elements of EUR 2.6 m, the structural effect of the insurance company, which I will go into the details shortly, and the indirect wages more than half of which is coming from the new business structure of the Regional Contract Logistics segment. Of course this (last item of) wage increase is reflected in the revenue as our margins are improving in that segment. Now jumping back to the structural effect of the insurance acquisition: on the one hand the new business leg, which is reflected in the other segment, has some costs and expenses also – but besides that, now a part of the insurance cost is accounted as a provision. This is a not-closed part of the damage cost and due to this structural effect (books) show a higher OPEX increase. But altogether I can say that we could stop the continuously increasing trend regarding the insurance fees, so altogether we are happy with it. Regarding EBIT, we have 14 percent gain, which is in line with our top line growth and because it will follow our presented slowed-down fleet replacement strategy which means longer financing and lower sustainable depreciation. Our net income increase was 21% which is a big result. On the one hand, that is because of the lower tax rates in Hungary but, on the other hand our financing has a decreasing

price, meaning a decreasing interest rate - comparing with the first half of 2016, as that time we had 2 percent on average, now we have 1.7 (percent) thanks to the renegotiated lease and loan contracts. But I think the financial results needs some explanation: last year we had a one-off financial hedge gain, so this is what covers the improvement in our interest expenses during the current year’s six months. On page 10 I think that you cannot not find any surprises: that’s basically the balance sheet of the Company. We have growing assets thanks to the fleet replacement strategy, but let me emphasize that during first half of last year, we had roughly 360 new trucks from which 80 were additional and the remaining, so 80 percent of the new stock was replacement. This year we have roughly 320 new trucks – more than a half, so 50 percent of which was additional, so it means that we really slowed down our replacement and we are focusing on growth. We have higher debt, as you could already realize, but a flat leverage thanks to increasing EBITDA. Finally, on page 11, our operating cash flow was EUR 35 million which includes a portion of the IPO proceeds already before 30 June. Our working capital increased slightly because of the higher receivables and because of the higher turnover and some modified regulations regarding the excise tax in Belgium or in France. What is really important for me is that besides the vehicle and fleet CAPEX, we spent a visible significant amount on IT – you can see it as another Capex on the price which is very important from innovation point of view and that is the basis of the further efficiency growth within the company. Now please follow the presentation with the current status of LINK. Ferenc Lajkó Ladies and Gentlemen, let’ go through Link’s status (page 12). Acquisition of the Polish Link company has a strategic importance in our growth strategy and was a very important point in our initial public offering as well. I can happily inform you that we closes the acquisition process just two weeks after our IPO. I strongly believe that this project demonstrates very well the credibility of the management, for we delivered what we promised. Bu the hard work has just started. We have already started a complex due diligence on the fields of sales, procurement, and operations and financials of the Link Company to understand better all the details. We see serious potential in integration, where the first item is to squeeze out all the opportunities in procurement. We would like to renegotiate all the contracts till the end of this year, which will enable us to enjoy better discounts starting from the 1st of January of 2018. With significant synergies on the fields of sales and operations as well, we have already started the due diligence and we’ll start on exploiting operational synergies from the 1st of January next year. Through the acquisition of Link, we executed an old dream of ours to have access to the Polish labour and industrial market, but do not forget our ultimate goal, which is to build up a Polish Waberer’s and consolidate trucking industry.

As a closing, let me repeat my two very important sentences. As we mentioned, the first six month results are absolutely in line with our and the market’s expectations and based on these figures I remain confident that Waberer’s 2017 full year performance will be in line with our and the market’s expectations as well. So we close our session for now and let’s proceed to the Q&A. (Questions) Thank you very much for joining us today.

WABERER’S INTERNATIONAL Nyrt.