ELLAKTOR S A : Annual Financial Report 2023

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

Contents of Annual Financial Report

Α. Statements of Members of the Board of Directors……………………………………………………	3
Β. Annual Report of the Board of Directors………………………………………………………………...	4
Β.1. Annual Report of the Board of Directors of ELLAKTOR SA……………………………	4
Β.2. Explanatory Report of the Board of Directors…………………………………………….	124
Β.3. Corporate Governance Statement……………………….…...……….……	127
C. Independent Auditor's Report………………………………………………………………………………	170
D. Annual Financial Statements for the fiscal year from 1 January to 31 December 2023..…..	179

The annual financial statements of the Group and the Company from pages 179 up to and including 297 have been approved at the meeting of the Board of Directors held on 17 April 2024.

THE CHAIRMAN OF THE	THE CHIEF EXECUTIVE OFFICER	THE CHIEF FINANCIAL	THE HEAD OF THE
BOARD OF DIRECTORS		OFFICER	ACCOUNTING
			DEPARTMENT

GEORGIOS	EFTHYMIOS BOULOUTAS	DIMOSTHENIS REVELAS	ANDREAS TSAGRIS
MYLONOGIANNIS
ID Card No AE 024387	ID CARD NO ΑΚ 638231	ID Card No ΑΡ 157944	ID Card No Α00211889

(2) / (297)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

Α. Statements of Members of the Board of Directors

(pursuant to Article 4 par. 2 of Law 3556/2007)

The members of the Board of Directors of the public limited company trading under the name ELLAKTOR SA with the distinctive title ELLAKTOR SA (hereinafter the 'Company'), with registered offices in Kifissia Attica, at 25, Ermou Street :

1. Georgios Mylonogiannis, son of Stamatios-Takis, Chairman of the Board of Directors
2. Efthymios Bouloutas son of Theodoros, CEO
3. Aristeidis (Aris) Xenofos son of Ioannis, Vice-Chairman of the Board of Directors, appointed as per decision of the Company's Board of Directors;

acting in our capacities as above, hereby declare that, to the best of our knowledge:

1. The annual financial statements of the Group and the Company for the fiscal year from 01.01.2023 to 31.12.2023, which have been prepared in accordance with the applicable international accounting standards, fairly represent the assets and liabilities, the equity and the income statement of the Company, as well as of the companies included in the consolidation taken as a whole, pursuant to the provisions of Article 4 of Law 3556/2007, and
2. the annual report of the Company's Board of Directors fairly represents the information required under Article 4(2) of Law 3556/2007.

Kifisia, 17 April 2024

THE CHAIRMAN OF THE	THE CHIEF EXECUTIVE	THE VICE-CHAIRMAN OF THE
BOARD OF DIRECTORS	OFFICER	BOARD OF DIRECTORS

GEORGIOS MYLONOGIANNIS	EFTHYMIOS BOULOUTAS	ARISTEIDIS (ARIS) XENOFOS
ID Card No AE 024387	ID CARD NO ΑΚ 638231	ID Card No: ΑΚ 756177

(3) / (297)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

Β. Annual Report of the Board of Directors

Β.1. Annual Report of the Board of Directors of ELLAKTOR SA

On the consolidated and separate financial statements for the fiscal year from 1 January to 31 December 2023

This report by the Board of Directors pertains to the twelve-month period of the year ended 2023 (01.01.2023-31.12.2023), and provides summary financial and non-financial information regarding the annual financial statements and results of ELLAKTOR SA (hereinafter the "Company") and the ELLAKTOR Group of Companies. The Report outlines the most important events taking place during 2023, and the effect that such events have had on the financial statements, the main risks and uncertainties faced by the Group, while it also sets out qualitative information and estimates regarding future activities. Lastly, the report includes important transactions entered into between the Company and Group and related parties, as well as the Corporate Governance Statement, pursuant to Articles 152 and 153 of Law 4548/2018, and Articles 1 to 24 and Article 74 of Law 4706/2020.

The companies included in the consolidation, apart from the parent company ELLAKTOR SA, are those mentioned in Note 43 of the attached financial statements.

This Report was drawn up in accordance with Articles 150-154 of Law 4548/2018, Article 4 of Law 3556/2007 as well as the executive decisions issued to this effect by the Hellenic Capital Market Commission, and accompanies the financial statements for the fiscal year from 01.01.2023 to 31.12.2023.

I. Introduction

Following a deep recession in 2020 and a sharp recovery in the years 2021-2022, Greece's real Gross Domestic Product (GDP) continued to increase in 2023, outperforming the Eurozone. In order to close the gap between the Greek economy and the Eurozone in terms of real GDP per capital, this quality attribute needs be preserved for an extended period of time.

In contrast, challenges remain in the Eurozone, with the ECB estimating that economic expansion in the fourth quarter likely stagnated, and this picture is unlikely to change considerably in the first half of 2024. The drop of the unemployment rate to a historically low level and the ongoing disinflation of structural inflation, however, remains a positive factor.1

Furthermore, the International Monetary Fund (IMF) stated in its most recent assessment (24 January 2024) that Greece's economic prospects have improved dramatically and that the country's financial system is resilient. Economic activity in 2023 increased by 2.2% for 2023, and it is predicted to increase by 2.3% in 2024. According to the IMF, private consumption will be supported by real wage growth, while investment will continue to increase with the implementation of the National Recovery and Resilience Plan, which is supported by EU funding.2

In terms of price change, following a 9.3% increase in 2022, inflation is now in a de-escalation phase, mainly due to a drop in energy costs. Nonetheless, household finances are strained as a result of the persistently high rate of inflation on food products. According to the latest available data from the Hellenic Statistical Authority, the annual change in the Harmonised Index of Consumer Prices (HICP) in Greece in

(4) / (297)

• 7 Days Economy (11/01/2024 Eurobank)

• Bulletin of Economic Developments in Greece and the World (Piraeus Bank, Jan. 2024)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

11 months January-Nov-23 was 4.2% (2.9% in Nov-23), which was the same as the average market estimate for the entire year. Further disinflation is expected to reach 2.6% in 2024, with average annual inflation of 2.4% during the next 6 years, from 2023 to 2028. According to the above projections, the Greek economy's short-term outlook is considered positive.

Budget interventions since early 2023, as well as those announced following the May-June 2023 double parliamentary elections, have helped to maintain the resilience and dynamic of the country's development path, with the goal of increasing disposable income and wages, reducing social inequalities, and addressing the economic consequences of the energy crisis and natural disasters caused by the climate crisis in the second half of the year.

To address the economic consequences of the energy crisis, support to households, businesses, and farmers suffering high electricity prices was maintained in 2023, albeit to a lower extent than in 2022, as prices had been de-escalated.

In the field of development policy, the "Greece 2.0" project, funded by the European Fund for Recovery and Resilience, is in full motion, with 718 projects and sub-projects totaling €20.7 billion. It should be noted that €11.1 billion has already been disbursed to Greece since 2021 (€5.75 billion in grants and €5.35 billion in loans). The overall initial allocation to Greece by 2026 is €30.5 billion (€17.8 billion in grants and €12.7 billion in loans).

Greece has also submitted to the European Commission: (a) a proposal for a revision of the National Recovery and Resilience Plan "Greece 2.0" on 31 August 2023, which includes a new investment and reform package under REPowerEU, with a European grant of €795 million aimed at Europe's energy autonomy; and (b) a request for an additional €5 billion in loan resources to be added to the existing loan program of the Recovery and Resilience Fund (SRF).

However, there are downside risks for 2024, including a possible escalation of tensions on the Ukrainian and Middle Eastern war fronts, a longer-than-expected stay of interest rates at current high levels due to a new inflation surge, a slower-than-expected recovery of Greece's major trading partners, a potential delay in the implementation of the National Recovery and Resilience Plan, and potential natural disasters.3

With regard to the ELLAKTOR Group, the following significant events took place in the fiscal year of 2023 and until the approval of this Report:

• On 30.01.2023, the Company announced the start of exclusive discussions with Wade Adams Hellas SMSA and Adamas Group Limited for the potential sale of all shares of its subsidiary AKTOR SA. However, on 09.03.2023 the Company declared the definitive suspension of the exclusive negotiations with the above corporation scheme.
• On 23.03.2023 the Company received a non-binding Letter of Intent for the acquisition of the subsidiary company AKTOR SA from the company INTRAKAT SA.
  On 30.03.2023, the Company and AKTOR CONCESSIONS SA signed an agreement with INTRAKAT SA to sell the entire share capital of AKTOR SA (hereinafter the "Transaction"). The Transaction was subject to the condition of approval by the Competition Commission. All other statutory approvals and permits and completion of the Transaction were expected by the end of the year 2023. A total amount of €214 million was to be collected from the transaction, of which the amount of €100 million upon the completion of the Transaction as equity value, while the amount of €114 million would be paid gradually within 19 months from the completion of the transaction

(5) / (297)

• Report on the Greek budget 2024 (Ministry of Economy & Finance, Nov. 2023)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

as repayment of intra-group borrowing. In this regard, the Extraordinary General Meeting of the Company's shareholders, dated 24.04.2023, approved the transaction and authorised the Board of Directors to take any action required by ELLAKTOR for its implementation and completion. Finally, the Transaction (financial closing) was accomplished on 08.11.2023, after an approval decision by the plenary of the Competition Committee (No. (830/07.11.2023) Following that, a total of €110.8 million was paid to ELLAKTOR Group on the agreed-upon share value date, while €114 million will be paid gradually over the next 19 months as repayment of intragroup borrowings.

• On 15.09.2023, the Company announced that, in accordance with the decision of the Ordinary General Meeting of its shareholders on 22.06.2023 establishing a plan for the acquisition of own shares and the decision of the Board of Directors on 14.09.2023, it intends to proceed with the implementation of the Own Shares Program, as per Article 49 of Law 4548/2018, for each legally authorised use. Own shares will be purchased through the Athens Stock Exchange. The full announcement has been posted on the Company's website, specifically at the linkhttps://ellaktor.com/en/investor-relations/annoucements/.
• On 01.12.2023, the subsidiary REDS SA announced that on 30.11.2023, the sale of all shares of the subsidiary YIALOU COMMERCIAL, TOURIST ACTIVITIES AND REAL ESTATE OPERATION SINGLE MEMBER SA, owner and manager of the SMART PARK Commercial Park, to the company TRADE ESTATES REIC was completed. The price of the transaction was €95.4 million.
• On 18.12.2023, the Company announced that, at a meeting of its Board of Directors on 15.12.2023, it was decided to grant, in accordance with the provisions of Articles 99, 100, and 101 of Law 4548/2018, as applicable, a license for the Company to enter into contracts with related parties (within the meaning of Article 99(2)(a) of Law 4548/2018). In particular, the Board of Directors approved the conclusion of a share purchase agreement with the company "MOTOR OIL RENEWABLE ENERGY SINGLE MEMBER S.A." (hereinafter "MORE"). (see in detail announcement athttps://ellaktor.com/en/investor-relations/annoucements/).
• Following the foregoing resolution of the company's Board of Directors, on 25 January 2024, after acquiring all of the necessary permits, ELLAKTOR and MOTOR OIL RENEWABLE ENERGY SINGLE MEMBER SA (hereinafter referred to as "ΜΟRE") signed a Purchase Agreement to transfer the remaining 25% of ANEMOS RES SA owned by the Company to ΜORE, a subsidiary of MOTOR OIL (GREECE) CORINTH REFINERIES SA. (MOH). The aforementioned transaction (financial closing) was completed on the same day, with the payment of €123.52 million to the Company.
• ELLAKTOR SA is in the due diligence process in relation to the subsidiary company HELECTOR by Motor Oil. It should be noted, however, that as of the date of adoption of this Annual Financial Report, ELLAKTOR had not become the recipient of a takeover bid for HELECTOR SA.

In particular, the major events that took place during the fiscal year 2023, per activity sector, are as follows:

• In the Concessions sector:
• • Traffic on Attica Motorway increased (by 9.5% in 2023 compared to 2022 and 9.9% compared to 2019), as did traffic on other highways compared to 2022 (+9.2%).
  • On 21.04.2023, the Contracting Authority and the association of persons AKTOR CONCESSIONS (60%) - INTRAKAT (40%), through the Private Partnership Body under the name PYLIA ODOS SA, signed the 30-year Partnership Agreement for the project "Design, Construction, Financing,
  • 1. / (297)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

Operation and Maintenance of the South-West Peloponnese Kalamata - Rizomylos - Pylos - Methoni Road Axis section, through a PPP".

• • On 21.04.2023, the Contracting Authority and the association of persons GEK TERNA (55%) - AKTOR CONCESSIONS (20%) - INTRAKAT (25%), through the Private Partnership Body under the name PASIFAI SA, signed the 30-year Partnership Agreement for the project "Design, Construction, Financing, Operation and Maintenance of the North Road Axis of Crete (NRAC) Hersonissos - Neapoli section of the North Road Axis of Crete, through a PPP".
• In the Environmental sector:
• • The HELECTOR Group, within 2023, operated 4 municipal waste treatment units with a capacity exceeding 700,000 tons per year, 2 clinical waste treatment units, as well as 4 energy production projects utilising landfill biogas with a total installed capacity exceeding 33 MW.
  • In 2023, HELECTOR signed construction agreements with a total budget of €51.4 million (HELECTOR's share) and operating object €28.6 million (plus €34.5 million option rights), either independently or through consortium schemes. Furthermore, a temporary contractor (signature awaiting) was assigned in contracts for works worth €51.5 million (HELECTOR's share). On 31.12.2023, HELECTOR SA had a construction backlog of €75.1 million (company share) and an operating backlog of €36.5 million (share of the company excluding private contracts/investments and concession/RES projects), plus €61.5 million (share of the company) option rights.
• In the real estate development segment:
• • Smart Park traffic increased by 17.2% between 1 January 2023 and 31 October 2023, compared to the corresponding period in 2022.
  • On 10.10.2023, an agreement was signed by REDS SA with the company under the name TRADE ESTATES REIC (hereinafter 'Trade Estates') of the Fourlis Group, for the sale of all shares of its 100% subsidiary of the company YIALOU COMMERCIAL AND TOURISM SINGLE MEMBER S.A. (hereinafter 'YIALOU SINGLE MEMBER SA'), which owns, manages and operates the Smart Park Commercial Park.
  • On 31.10.2023, the Extraordinary General Meeting of REDS' Shareholders approved the transaction to sell 100% of the shares in the company YALOU MON SA, belonging to the Company, to Trade Estates. The property's value was agreed to be €110 million, but after revaluations based on the net loan position of YIALOU SINGLE MEMBER SA, as well as its other assets and liabilities, on 30.11.2023, the date of completion of the sale of all shares of its subsidiary, YIALOU SINGLE MEMBER SA, the price of the transaction was set at €95.4 million.
• In the Construction sector/Discontinued Activities:
• • Due to sales agreement dated 30.03.2023 of the entire share capital of the subsidiary AKTOR SA to INTRAKAT SA., and after performing an evaluation, it was found that the application of IFRS 5 criterion "Non-current assets held for sale and discontinued operations" are met and for this reason, the activities of the Construction sector as of now (from 31.03.2023) constitute discontinued operations for the Group. As a result, for the purpose of providing accurate and complete information to the investment public, the ELLAKTOR Group's results for the year 2023 are presented separately in Continuing Activities (C.A.) and Discontinued Activities (D.A.), the latter of which includes the Construction sector until 07.11.2023.
  • 1. / (297)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

• On 08.11.2023, the sale of all shares of AKTOR SA to ΙΝTRΑΚΑΤ SA (financial closing) was completed, after approval of the Competition Committee on 07.11.2023. A total amount of €110.8 million was paid to ELLAKTOR, while an amount of €114 million will be paid in installments within 19 months of the transaction completion as a repayment of intra-group lending.
• Until the completion of the sale, AKTOR continued to focus strategically on the implementation of important projects such as the Thessaloniki Metro, the Patra-Pyrgos road axis and the Bucharest Centura A0 ring road, as well as the implementation of main road axes and railway projects in Greece and in Romania.

ΙI. Overview of the Group's results for 2023

Comments on Key Figures of the Income Statement and Balance Sheet 2023

The consolidated revenues of the Group for the financial year 2023 amounted to €808.5 million, of which €387.5 million relate to continuing activities of the Group, compared to €401.2 million in the financial year 2022, showing a decrease of 3.4% (or €13.7 million), primarily due to the decreased income of the Environment sector.

Gross Profit (without depreciation) in the financial year 2023 amounted to €202.6 million, of which €222.5 million relates to continuing operations, compared to €207.4 million last year, marking an increase of 7.3% or €15.1 million. This increase came mainly from the Concessions sector where Gross Profit (without depreciation) improved, compared to 2022, by €18.6 million.

Distribution and administrative expenses (without depreciation) for 2023 amounted to €61.1 million compared to €61.5 million in 2022, i.e. a decrease by 0.7% or €0.4 million.

The Group's EBITDA in 2023 amounted to €228.5 million, of which €242.2 million relates to continuing operations, compared to €165.7 million in 2022, i.e. increased by 46.2% (or €76.5 million). The EBITDA of ongoing activities, and thus of the Group, increased significantly as a result of the sale of investment properties, which generated a total profit of €55.8 million. In particular, the sale of YIALOU COMMERCIAL S.A. (Smart Park Shopping Center) resulted in a profit of €46.8 million, while the sale of investment properties in Greece and Romania yielded a profit of €9.0 million. Furthermore, the Concessions sector had a favorable impact on EBITDA, which increased by €28.6 million compared to the 2022 fiscal year.

Operating results (EBIT) amounted to profits of €152.8 million, of which €167.7 million relate to continuing operations, compared to profits of €88.9 million for the previous financial year, an increase of 88.7% (+ €78.8 million).

In terms of profit before tax (PBT), the Group reported profits of €116.3 million, of which €143.6 million were from ongoing activities, compared to €28.8 million in the previous year. Profit after tax (PAT) also amounted to €80.1 million, of which profits of €116.0 million refer to continuing operations, compared to losses of €2.6 million in 2022.

(8) / (297)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

Amounts in € million		2023				2022
*C.O. =Continuing Operations	C.O.*	D.O.*	Total		C.O.*	D.O.*	Total
*D.O. =Discontinued Operations
Sales	387.5	421.0	808.5	401.2	642.3	1,043.5
Cost of sales (without depreciation)	(165.0)	(440.9)	(605.9)	(193.8)	(600.5)	(794.3)
Gross profit	222.5	(19.9)	202.6	207.4	41.8	249.2
Selling & administration expenses (without depreciation)	(42.8)	(18.2)	(61.1)	(41.6)	(19.9)	(61.5)
Other revenue and Other profit/(loss) - net (without
depreciation)	(3.8)	24.4	20.7	(5.1)	51.7	46.7
Gain from the selling of investment property
(mainly of the Smart Park shopping mall)	55.8	-	55.8	-	-	-
Share of profit or loss from core activity associates, accounted for
using the equity method	10.5	-	10.5		5.0	(0.2)	4.8
Earnings before interest, taxes and amortisation	242.2	(13.7)	228.5		165.7	73.5	239.2
Depreciation and amortisation	(74.5)	(1.2)	(75.8)		(76.8)	(19.2)	(96.0)
Operating profit/(loss)	167.7	(15.0)	152.8		88.9	54.3	143.2
Income from dividends	1.0	-	1.0	1.6	(0.0)	1.6
Share of profit or loss from non-core activity associates,
accounted for using the equity method	0.2	(0.0)	0.2	0.3	(0.0)	0.3
Financial income/expenses	(25.4)	(12.4)	(37.8)		(62.0)	(15.5)	(77.4)
Profit/(loss) before taxes	143.6	(27.3)	116.3	28.8	38.9	67.7
Income tax	(27.6)	(3.5)	(31.1)		(31.4)	(15.1)	(46.5)
Net profit/(loss) for the year from all activities	116.0	(30.8)	85.2	(2.6)	23.8	21.2
(Profit)/Loss from sale of Construction segment (2023) /
RES (2022)	-	(5.0)	(5.0)		-	497.4	497.4
Net profit/(loss) for the financial year	116.0	(35.9)	80.1	(2.6)	521.2	518.6

The Group's cash and cash equivalents and readily realisable assets as of 31.12.2023 stood at €552.3 million compared to €508.0 million as of 31.12.2022. The Group's equity reached €974.7 million compared to €913.5 million on 31.12.2022, that is, an increase of €61.2 million, while the corresponding proportional shares belonging to the majority shareholders stood at €896.6 million compared to €827.9 million respectively, i.e. increased by €68.7 million, mainly due to the profit from the sale of Smart Park.

Total borrowings (net of lease liabilities) at the consolidated level amounted to €601.4 million as of 31.12.2023, compared to €691.6 million as of 31.12.2022. Of total borrowings, the amount of €52.8 million corresponds to short-term borrowings and an amount of €548.5 million to long-term borrowings. Total borrowings include amounts from loans from MOREAS SA (co-financed project) without recourse to the parent company, amounting to €388.6 million. Excluding the MOREAS SA loan, total borrowings at the consolidated level amounted to €212.8 million on 31.12.2023.

(9) / (297)

ELLAKTOR SA

Annual Financial Report for the fiscal year from 1 January to 31 December 2023

Amounts in € thousand, unless otherwise stated

Alternative Performance Measures (APMs)

The Group uses Alternative Performance Measures in its decision-making processes relating to the assessment of its performance; such APMs are widely used in the segments in which it operates. Below follows an analysis of the key financial ratios and their calculation:

Profitability Ratios

		Amounts in € million
		Sales
Total		EBITDA
	Margin EBITDA %
		EBIT
		EBIT margin %:
		Sales
Continuing	operations
EBITDA
		Margin EBITDA %
		EBIT
		EBIT margin %:

20232022

808.51,043.5

228.5239.2

28.3%22.9%

152.8143.2

18.9%13.7%

387.5401.2

242.2165.7

62.5%41.3%

167.788.9

43.3%22.2%

Definitions of Financial Figures and Breakdown of Ratios:

EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation): Earnings before interest, tax, depreciation and amortisation, which is equivalent to the line 'Operating Results' in the Group's Income Statement, plus depreciation and amortisation in the Statement of Cash Flows.

EBITDA margin %: Earnings before Interest Tax, Depreciation and Amortisation to turnover.

EBIT (Earnings before Interest and Tax): Earnings before taxes, financial and investment results equivalent to the line 'Operating Results' in the Group's Income Statement.

EBIT margin %: Earnings before Interest and Tax to turnover.

(10) / (297)