CONSOLIDATED ANNUAL REPORT
2 | 2023 ANNUAL REPORT | CONTENTS OF THE BUSINESS REPORT |
CONTENTS OF BUSINESS REPORT
The official consolidated financial statements of Waberer's International Plc are published in ESEF format in Hungarian. This document in pdf format is the unofficial English translation of the consolidated financial statements in ESEF format, but cannot be considered as an official document.
- Message from the CEO
- Management Report
4 About Waberer's Group
- Key operational indicators
- Presentation of the company structure
- Strategy
- Contract logistics segment
- Transportation and freight forwarding
- Insurance
- Business Environment & results
- Economic environment
- Revenue
13 | Gross profit, EBITDA and EBIT |
- Net income
- Cash flow
- Debt
- Main Events in 2023
- Ownership structure
Capital market performance, Investor relations
- Shareholder structure
- Capital market performance
18 | Analysts |
18 | Investor Relations |
19 | Digital transformation |
20 | Technical improvements |
20 | Sustainability |
23 | EU Taxonomy report |
- Compliance
- CSR activities
- Human resources
- Corporate governance and corporate bodies
- Board of Directors
- Chief Executive Officer
- The presentation of the management
- Supervisory Board
- Audit Committee
- Nomination and Remuneration Committee
- Internal controls and risk management
- System of internal controls
- Risk management framework
33 | Risk factors |
33 | Market risk factors |
35 | Regulatory risk factors |
- Financial risk factors
- Operational risk factors
- Risk factors specific to insurance
- Fight against corruption and bribery
- Independent audit report
- Consolidated financial statements
- Notes
3 | 2023 ANNUAL REPORT | MESSAGE FROM THE CEO |
MESSAGE FROM THE CEO
"2023 has been a very eventful year for | main challenge for us throughout the year | of the largest warehouse in the history of |
Waberer's Group. Industrial production | was, accordingly, to identify segments | Waberer's on the outskirts of Budapest, |
and consumption data in Western Europe | and customers in the market that are less | the purchase of land in Debrecen to de- |
and Hungary, our main markets, stagnated | affected by the general negative econom- | velop a new logistics centre, and the sign- |
or were even slightly down throughout the | ic environment, relying on our diversified | ing of a sale and purchase agreement to |
year, directly affecting demand for logis- | customer and service portfolio, and to al- | acquire a majority stake in the rail logis- |
tics services, while the Hungarian insur- | locate our logistics infrastructure towards | tics leader PSP (Petrolsped) Group and |
ance market was forced to deal with the | these customers with the appropriate ef- | the Serbian distribution company MDI. |
challenges of the special insurance tax. | ficiency. | The first results of these actions will be |
In terms of operations management, the | visible as early as 2024. In 2024, we plan | |
As a testament to the effectiveness of our work, in 2023 we were | to continue on the path we have started, | |
and I am confident that our investors will | ||
able to increase the Group's sales revenue by almost 5% and our | appreciate the results achieved, allowing | |
annual EBIT generation capacity increased to EUR 42.8 million, the | Waberer's shares to remain an attractive | |
investment target in 2024. | ||
highest in the history of Waberer's Group, which I am particular- | ||
Finally, I would like to thank my col- | ||
ly proud of. The continuous improvement in our ability to generate | leagues for their work throughout the year | |
profits has enabled us to share our results with our shareholders in | and ask them to continue to work with the | |
the form of dividends in 2023, for the first time in our stock market | same enthusiasm to achieve our motivat- | |
ing goals for 2024." | ||
presence. | ||
In 2023, we updated Waberer's Group's medium-term business and ESG strategy, which will guide and shape our activities in the coming years. Based on this strategy, we intend to grow Wa- berer's Group into the leading complex
logistics provider in the Central and East- | |
ern European region which, according to | Zsolt Barna |
our plans, will deliver significant growth | Chief Executive Officer |
in earnings. We already managed to take | |
significant steps to implement the strate- | |
gy in 2023, with starting the development |
4 | 2023 ANNUAL REPORT | MANAGEMENT REPORT |
ABOUT WABERER'S GROUP -
KEY OPERATIONAL INDICATORS
MANAGEMENT REPORT
ABOUT WABERER'S GROUP
3 MAIN AREAS OF OPERATION:
REGIONAL CONTRACT LOGISTICS (RCL) SEGMENT:
Market-leading Hungarian complex logistics service provider with an integrated service portfolio tailored to industry needs and customers (distribution, warehousing, home delivery, production support logis- tics, container transport, fresh goods lo- gistics, etc.)
INTERNATIONAL TRANSPORT
SEGMENT (ITS):
One of Europe's leading FTL (Full-Truck Load) transport service providers, with own fleet and subcontractor operations, as well as rail and intermodal services (combination of rail and road transport), focusing on Europe's main industrial centres (UK, Germany, France, Italy, Spain, Poland, Hungary, Slovakia) and Central and Eastern Europe.
INSURANCE SEGMENT:
Insurance business focusing on non-life insurance products, with a focus on Hun- gary. Specialist in passenger and commercial vehicle insurance (MTPL, CASCO, CRM) with a significant market share.
KEY OPERATIONAL INDICATORS
2 120 | 229 000 SQM |
Warehouse area | |
vehicles | |
International fleet |
320 units | 771 vehicles |
Forklift fleet | Domestic fleet |
6 044
Number of employees
5 | 2023 ANNUAL REPORT | ABOUT WABERER'S GROUP - |
PRESENTATION OF THE COMPANY STRUCTURE
PRESENTATION OF THE COMPANY STRUCTURE 1
1 | As of 20 March 2024. |
6 | 2023 ANNUAL REPORT | STRATEGY |
STRATEGY
At the end of 2023, Waberer's Group updated and published its Group strategy towards 2027. The updated strategy builds on the development paths set in 2021 and focuses on further extending the achievements of the past 2 years.
Our Group's vision is to grow Waberer's Group into the leading complex logistics service provider of the Central and Eastern European region.
The main pillars of the strategy to achieve this vision are:
- Infrastructure and technology development
- Increasing added-value
- Diversification
- Sustainability
The following development directions have been defined for the various business segments based on the above pillars:
IN IMPLEMENTING THE PILLARS OF OUR STRATEGY, WE PAY PARTICULAR ATTENTION TO SUSTAINABILITY ASPECTS
INFRASTRUCTURE AND | ||||||
TECHNOLOGY | INCREASING ADDED-VALUE | DIVERSIFICATION | ||||
DEVELOPMENT | ||||||
• | Increasing warehouse | |||||
capacity | ||||||
(national coverage) | • | In-house logistics | • | Regional expansion | ||
CONTRACT | in an energy-efficient | growth | (acquisition of MDI) | |||
manner | • | Establishing fulfilment | • | Entering new | ||
LOGISTICS | ||||||
• | Expanding the | logistics capability | specialised logistics | |||
alternative powertrain | • | Home delivery growth | service segments | |||
fleet | ||||||
TRANSPORTATION | • Fleet modernisation | • Increasing the share | • Increasing the share of |
of revenue from | multimodal services | ||
& FREIGHT | for more efficient | ||
specialised FTL | (acquisition of | ||
FORWARDING | operations | ||
services | Petrolsped) | ||
• | Digitalisation of back- | |
office activities for | ||
claims settlement and | ||
INSURANCE | customer service | |
• | Expansion and | |
digitalisation of sales | ||
channels | ||
• | Expansion of the | ||
• | Delivering full digital | product portfolio | |
• | Exploring the possibility | ||
customer experience | |||
of entering regional | |||
markets |
7 | 2023 ANNUAL REPORT | STRATEGY - |
CONTRACT LOGISTICS SEGMENT
CONTRACT LOGISTICS SEGMENT
Within the framework of the Group's Contract Logistics segment, which provides complex logistics services, we plan to implement the following major developments:
INFRASTRUCTURE AND TECHNOLOGY DEVELOPMENT
At the end of 2023, the segment provided warehousing and warehouse manipulation services on an area of nearly 230,000 m2. Current warehousing activity is mainly performed in leased warehouses and concentrated in the Budapest area.
demand for these low environmental footprint distribution services is growing radi- cally. In response, we have built up our capabilities to offer tailor-made solutions to meet these unique customer needs, giving
In 2022, we started the development of our first modern, company-owned warehouse in Ecser, along the M0 ring road bypassing Budapest. The close to 47,000 sqm warehouse will be completed in the first half of 2024, after which the warehouse space used by the segment will increase to approximately 300,000 m2, and at the same time, the cost level of warehousing -related activities will decrease, as owning warehouse capacity will result in a significant cost reduction compared to leasing warehouses. In line with the indus- trialisation efforts in rural areas, we plan to further expand owned warehouse capacity in major industrial centres in the near future. As a first step in our development plans, in 2023 we acquired a plot of land in Debrecen suitable for the development of a logistics centre, on which we plan to build a 20,000 m2 logistics centre in 2025, which will be able to serve the logistics
needs of manufacturing companies in the region and further increase the efficiency of our national distribution activities. In the coming years, we plan to expand our warehousing capacity in more non-Buda- pest cities, in line with market demand and the pace of industrial production capacity expansion.
The segment carries out its domestic distribution activity with nearly 800 vehi- cles. For 3 years in a row now, we have been providing our customers with a distribution service with low environmental footprint using alternative powertrain vehicles, mainly LNG and electric. Given the current technological limitations (800- 900 km range for LNG and 2-300 km range for electric vehicles), these vehicles can be integrated into our domestic distribution activities with greater efficiency compared to long-distance international freight transport activities. Our customers'
us a significant competitive advantage. In line with our corporate and ESG strategy, we intend to further increase the share of alternative powertrain vehicles in our fleet and maintain Waberer's leading position in green logistics services. In addition to the technologies currently in use and being tested, we are paying particular attention to the emergence of hydrogen-powered vehicles, we expect this technology to play a significant role in the long-distance freight transport industry in the long term, and we intend to start testing this technology within the period covered by our strategy, for which we have entered into a strategic alliance with other potential users and green hydrogen production companies in Hungary.
8 | 2023 ANNUAL REPORT | STRATEGY - |
CONTRACT LOGISTICS SEGMENT
INCREASING ADDED-VALUE
In the contract logistics segment, we aim to focus sales on activities that can provide the biggest added-value to customers, require the highest expertise and accuracy from the logistics provider, and can become an addition to the existing service portfolio to foster deeper customer relationships.
Accordingly, we would like to further expand our portfolio of customer-facingin-house logistics services, which support the customers' existing manufacturing processes in the automotive, oil and chemical industries, and which are to be carried out at the customers' site. We also want to increase our fulfilment and home delivery capabilities to support online trade.
DIVERSIFICATION
The contract logistics segment is currently focused on Hungary. We aim to build a complex logistics service portfolio covering the entire region to exploit further growth opportunities and respond to the increasing demands of multinational clients.
We intend to enter markets in neighbouring countries primarily through acquisi- tions. Given the fact that an efficient logistics operation can only be established with the right economies of scale, entering markets through acquisitions can provide us with the infrastructure, workforce and existing customer portfolio to allow us to serve customers at the regional lev- el. The acquisition currently focuses on Poland, the Czech Republic, Slovakia and the Western Balkans.
Further diversification of the segment focuses on services and special sub-segments where we currently have a low market share. Potential segments include serving pharmaceutical customers, and logistics services related to waste recy- cling, etc.
9 | 2023 ANNUAL REPORT | STRATEGY - |
TRANSPORTATION AND FREIGHT FORWARDING
TRANSPORTATION AND FREIGHT FORWARDING
Infrastructure and technology development
The basis of own-fleet international transport is the existence of a fleet that can be operated efficiently and ensures reliable availability. As a result of replacing the elements of our fleet over the past 2
years, the Group has reached its strategic target of having an average fleet age of
2.5 years. In the coming years, we intend to maintain this average age and contin- ue the process of ongoing fleet renewal,
while we do not plan to make any significant changes to the size of the fleet, fine-tuning it in line with the results of current tenders
INCREASING ADDED-VALUE
In the international transport segment, a turning point is brought about by the shift to key account focused operations. The transport service offered by Waber- er's can provide a competitive service to customers who expect outstanding ser-
vice quality, availability of additional services (e.g. tracking, special cargo, flexible capacity allocation, alternative fuels, etc.) and customer-oriented operation. Ac- cordingly, we intend to further increase the weight of key account customers and
the ratio of freights requiring additional services within the operation, which we aim to increase to 60% by 2027 through the active management of the customer portfolio and sales focus.
DIVERSIFICATION
In international freight forwarding, Waberer's has to date focused on road transport and, to a lesser extent, inter- modal transport, which can be considered a combination of road and rail transport. There is a growing expectation from both regulators and customers to significantly reduce the environmental footprint of long-distance transport. This objective can be supported by carrying out these transport tasks by rail. Recognising this, Waberer's Group signed a share purchase agreement in 2023 to acquire a majority stake in PSP (Petrolsped) Group, a company with significant infrastructure and experience in rail logistics. The transaction was successfully closed in 2024. We plan to use PSP (Petrolsped) Group as basis for the future transformation of our services to rail, and through this acquisition Waberer's will be able to enter the market for the transport of bulk goods that are already predominantly transported by rail (construction materials, grain, oil
products, etc.). In addition to the rail logistics market, in 2023 we also entered the maritime logistics services market, further strengthening our multimodal capabilities
and enabling us to provide intercontinental transport services.
10 | 2023 ANNUAL REPORT | STRATEGY - |
INSURANCE
INSURANCE
When the insurance business was set up as part of the Group, the primary objective was to efficiently manage the insurance of the Company's own fleet. Over the past 10 years, the insurance company has successfully expanded first in the commercial vehicle market and then in the passenger car market, becoming one of the top 3 insurers in the MTPL and CASCO market, with nearly 90% of its revenue and profit generated from third-party customers.
strategic alliances to expand our sales channels. In order to achieve our diversification objectives, we are also continuously exploring the possibility of participating in the market consolidation process.
As a result of implementing the above strategy, we plan to nearly double the Group's consolidated EBIT generation capacity of 2022 to EUR 61 million, with sales of over EUR 1.1 billion. To implement
The lowest operating costs in the Hun- garian insurance market form the basis of growth and profitability. This has been highly digitalised and based on efficient internal processes from the very start. The strategic objective of our Insurance segment is the ongoing digitalisation of back-office and customer relationship
processes, which will ensure a low operating cost level providing a competitive advantage in the long term. In addition, in the spirit of further diversification, we intend to enter new market segments where Gránit Biztosító's operating model (e.g. in the home insurance market) can also provide a competitive advantage, and to build
the strategy, we expect incremental investment of more than EUR 100 million in the period until 2027, of which almost 50% is already secured.
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Waberer's International Nyrt. published this content on 12 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2024 15:53:07 UTC.