Irel HoldCo GmbH

Irel HoldCo GmbH

Pullach i.Isartal

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.07.2023 bis zum 30.06.2024

Irel Bidco SARL

Luxemburg

Consolidated Financial Statements

and

Management Report for the Group

for the year ending 30 June 2024

(with the report of the Réviseur d ́Entreprises Agrée)

Management Report for the Group

for the year ending 30 June 2024

1. Business development

1.1 Company Information

Irel BidCo SARL ("BidCo") is incorporated as a limited liability company (Société à Responsabilité Limitée) under the laws of the Grand Duchy of Luxembourg for an unlimited period, registered with the Trade and Company Register of the Grand Duchy of Luxembourg under number B231829 and with business address at 2, rue Edward Steichen, 2540 Luxembourg.

1.2 Group structure

Irel BidCo SARL is a Luxembourg based holding company ("IFCO Group" or "Group") for and the ultimate parent of Irel HoldCo GmbH located in Zugspitzstraße 3a/b, 82049 Pullach i. Isartal, Germany. Irel BidCo SARL is primarily operating through its shareholding in IFCO Management GmbH (formerly: Irel AcquiCo GmbH) with subsidiaries in Europe, North and South America and Asia. IFCO Group's European operations and the global headquarter are in Pullach, Germany.

1.3 Business model

IFCO Group is involved in the organization and administration of the rental, distribution, and purchase of reusable packaging containers ("RPC") for fresh grocery producers and offers a comprehensive RPC Management Services system. After an IFCO company has collected, sanitized and cleaned the RPCs, they are rented primarily to producers of fresh fruit and vegetables in exchange for a one-time usage fee. The producers' goods are transported in the RPCs to various intermediaries and ultimately to retailers for sale to consumers. The Group delivers the empty RPCs to customers (producers) and collects the empty RPCs from regional service points of retailers.

1.4 Performance of actual period

IFCO Group's consolidated financials for the current fiscal year ending 30 June 2024 include the parent company Irel BidCo SARL and its consolidated subsidiaries. "Fiscal Year 2024" or "FY 2024" will be used in the following when referring to the current fiscal year, "Fiscal Year 2023" or "FY 2023" for the prior period. The figures disclosed are mathematically rounded and are shown in million Euro (EURm).

1.4.1 Results of operations

To assess its performance, IFCO Group has established an internal management reporting of the business development. This reporting deviates from statutory financial statements with regards to various accounting matters, especially (i) revenue deferrals, (ii) accruals of cost of sales and the consideration of depreciation and profits or losses from the disposal of assets, (iii) treatment of marketing reimbursements and (iv) consideration of foreign exchange-related gains and losses and other non-operational items. In the description of business development, we will focus on the management reporting.

Total revenues of the Group amounted to EURm 1,594.3 in FY 2024 (EURm 1,392.2 in FY 2023). EURm 1,585.4 (EURm 1,372.3 in FY 2023) were derived from IFCO ́s main revenue stream which is the provision of pooling equipment (RPCs) to customers for a period. Geographically, Europe generated EURm 1,101.9 (EURm 958.7 in FY 2023) or 70% (70%in FY 2023) of these sales. Moreover, IFCO generated EURm 8.9 (EURm 19.9 in FY 2023) in other revenues.

In the internal management reporting, revenue deferrals are excluded to fully reflect the rental revenue development based on RPCs delivered and invoiced to customers. In addition, the effects from hyperinflation-accounting are reversed. According to this reporting, revenues excluding revenue deferrals amounted to EURm 1,582.9 in FY 2024 (EURm 1,391.2 in FY 2023).

Cost of Sales in management reporting (excluding depreciation and losses from disposals of assets but including accruals for outstanding collection costs) totaled EURm 1,122.0 in the period ending 30 June 2024 (EURm 999.7 in FY 2023). Hence gross profit amounted to EURm 460.9 in FY 2024 (EURm 391.5 in FY 2023). Main drivers were logistic fees which amounted to EURm 491.2 (EURm 397.5 in FY 2023). Transport costs amounted to EURm 277.1 (EURm 276.9 in FY 2023) and washing costs amounted to EURm 316.0 (EURm 292.4 in FY 2023). Selling, General and Administrative expenses (excluding depreciation and amortization) net totaled EURm 97.8 in the period ending 30 June 2024 (EURm 87.5 in FY 2023). Other Income, net amounted to EURm 7.0 in FY 2024 (EURm 0.3 in FY 2023).

Adjusted EBITDA as key performance indicator in the internal management reporting (Earnings before interests, taxes, depreciation, amortization, losses from disposals of assets, foreign exchange gains/losses and non-operational items) amounted to EURm 370.0 for the period ending 30 June 2024 (EURm 304.3 in FY 2023). The adjustments used by management relate to losses on disposal of assets, foreign exchange gains/losses and non-operational items incurred. For reconciliation purposes we refer to Note 3 in the Irel BidCo SARL Consolidated Financial Statements. There the bridge is presented from Operating result in the amount of EURm 136.8 (EURm 100.3 in FY 2023) to Consolidated EBITDA in the amount of EURm 334.7 (EURm 279.5 in FY 2023). Adjusted by deferred revenue and accruals in the amount of EURm 1.6 (EURm 5.2 in FY 2023), Marketing Bonuses in the amount of EURm 5.3 (EURm 3.6 in FY 2023) and non-operational income and expenses in the amount of EURm 28.5 (EURm 16.0 in FY 2023) the adjusted EBITDA amounted to EURm 370.0 (EURm 304.3 in FY 2023).

Depreciation added up to EURm 116.8 for the period ending 30 June 2024 (EURm 102.6 in FY 2023), losses on disposal of assets were mainly based on the breakage and shrinkage of crates and totaled EURm 22.4 (EURm 15.5 in FY 2023).

Adjusted EBITA used as another key performance indicator in the internal management reporting (Earnings before interests, taxes, amortization, foreign exchange gains/losses and non-operational items) accounted for EURm 230.8 for the period ending 30 June 2024 (EURm 186.2 in FY 2023). For reconciliation purposes we refer to Note 3 in the Irel BidCo SARL Consolidated Financial Statements. There is presented the Consolidated EBITA in the amount of EURm 193.9 (EURm 165.2 in FY 2023). Additionally, to the above mentioned adjustments in EBITDA, further adjustments on depreciation in the amount of EURm -3.1 (EURm -4.4 in FY 2023) and adjustments on losses from disposals in the amount of EURm 4.6 (EURm 0.6 in FY 2023) led to an adjusted EBITA in the amount of EURm 230.8 (EURm 186.2).

Amortization amounted to EURm 57.1 (EURm 54.6 in FY 2023). Net finance costs (excluding the impact from hyperinflation accounting) added up to EURm 138.7 for the period ending 30 June 2024 (EURm 96.3 in FY 2023) and included mainly interest expenses on the financing facilities which were raised in the course of the acquisition of IFCO Systems B.V. in 2019 and amended and extended in the course of a refinancing in FY 2024.

Adjusted EBT (Earnings before taxes, losses from disposals of assets, foreign exchange gains/losses and non-operational items) accounted for EURm 35.0 for the period ending 30 June 2024 (EURm 35.2 in FY 2023) mainly due to increased interest expenses. For reconciliation purposes we refer to Note 3 in the Irel BidCo SARL Consolidated Financial Statements. There is presented the Profit before taxes in the amount of EURm 1.5 (EURm 9.4 in FY 2023). Additionally, to the above mentioned adjustments in EBITDA and EBITA, further adjustments on amortization in the amount of EURm 1.8 (EURm 5.5 in FY 2023), adjustments on finance income in the amount of EURm -2.7 (EURm -3.0 in FY 2023), f/x-gains/losses in the amount of EURm -1.7 (EURm 4.8 in FY 2023) and adjustments on Hyperinflation in the amount of EURm -0.8 (EURm 1.5 in FY 2023) led to an adjusted EBT in the amount of EURm 35.0 (EURm 35.2 in FY 2023).

Adjusted non-operational items and impacts from the accounting differences to statutory financial statements mentioned above, mainly consists of personnel, legal and advisory expenses outside of the ongoing operational business having more of a one-time character. Foreign currency effects are as well non-operational items which are not considered in management reporting.

For the internal management reporting income taxes are not calculated separately. Thus, the income tax expense is based on statutory financial statements. Income tax expense amounted to EURm 11,2 for the period ending 30 June 2024 (EURm 12.1 in FY 2023) and is composed of current income tax expense of EURm 19.0 (EURm 15.1 in FY 2023) and deferred tax benefit amounting to EURm 7.8 in FY 2024 (deferred tax benefit EURm 3.0 in FY 2023). The difference between deferred tax expense/income and actual tax expense is mainly driven by interest carry forward not recognized in the amount of EURm 15.5 (EURm 6.5 in FY 2023), prior year adjustments of EURm 3.1 (EURm 0.2 in FY 2023) as well as current year tax losses not recognized of EURm 0.9 (EURm 2.8 in FY 2023.

The internal management reporting showed a profit of EURm 24.5 for the period ending 30 June 2024 (EURm 23.6 in FY 2023). In the Group's Consolidated Financial Statements the loss for the period ending 30 June 2024 totaled EURm -9.7 (EURm -2.7 in FY 2023).

1.4.2 Cashflow analysis

The focus of the treasury management is steering the measures for maintaining adequate liquidity for the Group, for reducing debts and liabilities and for managing bank transactions within the Group. In addition, the Group also focuses on identifying and managing financial risks resulting from exchange rate fluctuations and from national interest and inflation rates.

The Group's cash flow statement for the period ending 30 June 2024 can be summarized as follows:

Cash flow from operating activities (according to IFCO Consolidated Financial Statements) for the period ending 30 June 2024 amounted to EURm 142.5 (EURm 206.9 in FY 2023).

Cash flow used in investing activities for the period ending 30 June 2024 totaled EURm -248.6 (EURm -219.5 in FY 2023) and reflects mainly capital expenditure. Additions to intangible assets and property, plant and equipment for the period added up to EURm -277.2 (EURm -253.9 in FY 2023) mainly comprised of pooling equipment. Proceeds from disposals of EURm 43,0 (EURm 38.1 in FY 2023) reduced the amount of cash outflows from investing activities. For the acquisition of subsidiaries, the Group spent EURm 14.6 (EURm 3.7 in FY 2023).

Net Cash flow from financing activities for the period ending 30 June 2024 added up to EURm 107.5 (EURm 26.7 in FY 2023) reflecting proceeds from borrowings that amounted to EURm 344.8 (EURm 124.0 in FY 2023) as well as payments of lease liabilities totaled to EURm -22.2 (EURm -12.7 in FY 2023) and repaid loan principal amounting to EURm -215.1 (EURm -84.6 in FY 2023). In FY 2024 IFCO Group successfully amended and extended the EURO term loan by EURm 347.8 (offset by EURm 3.0 lender fees). The USD term loan has been canceled and paid back by the amount of EURm 147.0 (USDm 160.0). The revolving credit facility was amended and extended from EURm 270 to EURm 310.

1.4.3 Net assets

The Group's total assets amounted to EURm 4,297.3 as at 30 June 2024 and increased by EURm 250,4 in FY 2024 compared to EURm 4,046.9 on 30 June 2023.

As at 30 June 2024, non-current assets of EURm 3,372.9 (EURm 3,171.1 in FY 2023) mainly consisted of goodwill and other intangible assets of EURm 1,767.7 (EURm 1,801.1 in FY 2023) and property, plant & equipment of EURm 1,408.0 (EURm 1,277.1).

The goodwill results from the acquisition of IFCO Systems B.V. in 2019 and amounted to EURm 1,067.7 at that time. Due to the foreign exchange rate development and the acquisition of IFCO Oricon in FY 2022, RCI and PlasticPack in FY 2023 as well as Benimar and Bepco in FY24, the goodwill of IFCO Group amounted to EURm 1,080.4 as of 30 June 2024 (EURm 1,074.4 in FY 2023). Other intangible assets amounted to EURm 687.3 (EURm 726.6 in FY 2023) and included mainly customer relationships, the IFCO brand and patents (technology).

Property, plant and equipment (including right-of-use assets) amounted to EURm 1,521.0 (EURm 1,348.7 in FY 2023) and included mainly the RPC pool of EURm 1,210.5 (EURm 1,139.9 in FY 2023).

Total current assets amounted to EURm 924.3 as of 30 June 2024 (EURm 875.7 in FY 2023) and included mainly trade, deposit and other receivables of EURm 712.9 (EURm 670.1 in FY 2023) and cash and cash equivalents of EURm 184.2 (EURm 187.7 in FY 2023). The deposit fees are charged to customers mainly in Europe.

Equity amounted to EURm 790,9 as of 30 June 2024 (EURm 818.5 in 2023), and beside subscribed capital of EURk 12 consisted of capital reserves that amounted to EURm 843.1 (EURm 843.1 in FY 2023) as well as other reserves that amounted to EURm -52.2 (EURm -24.6 in FY 2023).

Non-current liabilities amounted to EURm 2,161.8 as of 30 June 2024 (EURm 1,935.7 in FY 2023) and mainly consisted of non-current interest-bearing loans and borrowings of EURm 1,714.3 (EURm 1,541.1 in FY 2023). The majority of debt facilities was raised in the course of the acquisition of IFCO Systems B.V. in Fiscal Year 2019. In FY 2024 the Euro loan was prolonged and the nominal amount was extended by EURm 347,8. In addition, non-current liabilities also included lease liabilities of EURm 104.1 (EURm 62.4 FY 2023) and deferred tax liabilities of EURm 337.1 (EURm 328.5 in FY 2023).

Current liabilities of EURm 1,344.5 (EURm 1,292.7 in FY 2023) included mainly trade and other payables of EURm 660.5 (EURm 611.7 in FY 2023) and refundable deposits of EURm 575.9 (EURm 558.4 in FY 2023) as the largest component. The increase of the current liabilities is mainly due to increased volume in FY 2024.

Net debt (adjusted) of the Group mainly consisted of the facilities which had been raised in the course of the acquisition and amended and extended in February 2024, less cash and short-term deposits and excluding trade and other receivables (based on their short-term character) and amounted to EURm 2,174 as of 30 June 2024 (EURm 1,928 in FY 2023).

1.5 Acquisitions

Benimar S.A

On 1 August 2023 IFCO acquired 100% of the share capital of Benimar S.A. Mercobox, Montevideo, Uruguay.

Benimar S.A. Mercobox business model focuses on RPC pooling services. Prior to the acquisition, Benimar was IFCO Uruguays main competitor in Uruguay.

With the Benimar S.A. acquisition the group mainly acquired RPC pooling assets (EURm 0,5). A goodwill in the amount of EURm 0,9 has been recognized and is attributable to the expected process improvements to be realized by applying IFCO Uruguay's experience in the South American market.

Benimar S.A. contributed EURk 898 revenues and EURk -176 to the Group's profit before taxes for the period between the date of acquisition and the reporting date 30 June 2024.

Bepco OÜ

On 16 February 2024 IFCO acquired 100% of the share capital of Bepco OÜ, Estonia and its 100% subsidiaries OÜ Logistics Equipment Production, Estonia, SIA Bepco, Latvia, Bepco Pooling UAB, Lithuania and Bepco Pooling EOOD, Bulgaria.

Bepco OÜ and its subsidiaries is an RPC pooling and rental company active in Estonia, Latvia and Lithuania. Bebco OÜ and its subsidiaries have a high market share in the Baltic meat & diary market.

With the Bepco acquisition the group mainly acquired pooling assets (EURm 9,7) and customer relationships (EURm5,1) as well as machinery and equipment (EURm 1,0). A goodwill in the amount of EURm 11.8 has been recognized and is attributable to the expected synergies with IFCO Lithuania, synergies with IFCO service / washing center network as well serving other markets in Europe.

Bepco OÜ and its subsidiaries contributed EURk 2,826 revenues and EURk 69 to the Group's profit before taxes for the period between the date of acquisition and the reporting date 30 June 2024.

IFCO ORICON

In FY 2022 IFCO Group acquired 100% of the share capital of IFCO Oricon from Sanko Lease Co., Ltd., Japan. IFCO Oricon was established by Sanko Lease Co., Ltd in the course of the carve out of its entire collapsible RPC pooling business which represented the main asset as at acquisition date and therefore had been guaranteed by the seller to the purchaser IFCO in the share purchase agreement. In line with the agreement the size of the pool acquired had to be validated based on scanning data. In FY 2023 within the true-up period, IFCO Group recognized necessary adjustments to the preliminary purchase price allocation. One adjustment led to the recognition of a receivable with the amount of EURk 13,902, that represented IFCO Group's claim against Sanko for missing crates. In FY 2024 IFCO reached an agreement with Sanko about the missing crates. With this agreement IFCO's RPC claim extinguished and in turn IFCO Group's obligation to pay the holdback amount and part of the outstanding purchase price installements retired. This led to an income at IFCO in the amount of EURk 5.813 (translated with the JPY average fx rate in FY 2024), which is presented in other income in profit and loss.

1.6 Key performance indicators

The Group's key performance indicators are the number of rentals and the average turn rate as non-financial indicators and sales revenue and Adjusted EBITDA (Earnings Before Interest and Taxes, Depreciation, loss on disposals of assets, Amortization and non-operational items) and is based on unchanged accounting principles used compared to last year as well as Adjusted EBITA (Earnings before interests, taxes, amortization, F/X-gains/losses and non-operational items).

2. Position of the company

The Group operates in the global fresh produce packaging market with 396 million RPCs in use as of 30 June 2024 and a total of 2.3 billion annual rentals, serving over 300 retailers and 15.000 producers worldwide. For pooled RPCs the main competitors are Euro Pool System in Europe and Tosca Ltd, which operates in Europe and North America. Other RPC poolers operate at a regional level. The overall RPC market penetration still remains relatively low compared to single-use packaging like cardboard, which still dominates the global fresh food packaging market. However, RPC rental volumes are constantly growing overall.

As the global leader in the provision of RPC solutions, the Group has scale advantages due to a global network backed by the largest pool of RPCs allowing for efficient RPC management, with timely delivery and full seasonal coverage. Moreover, the Group has the financial strength to commit the required material up-front capex investment for sizeable new contracts.

3. Principal risks and uncertainties

3.1 Performance risks

3.1.1 Competition risks

IFCO Group faces competition in all business segments in which it operates. IFCO Group continues to experience competitive pressure from other RPC pooling providers as well as traditional packaging manufacturers, especially cardboard producers. The impact of this competition could limit IFCO Group's growth opportunities, increase the price pressure on IFCO Group's products or otherwise affect IFCO Group's business results.

3.1.2 Retailer related risks

In most regions, IFCO Group's operational business depends on certain relationships with retailers of high importance to the overall business development of a region. Failure to maintain these relationships or to establish new relationships on comparable terms would undermine IFCO Group's ability to maintain its competitiveness in these operating markets. The loss of one or more of these retailer relationships could potentially have a material negative impact on IFCO Group's net assets, financial position and results of operations.

3.1.3 Risks regarding RPC pooling equipment

The risks related to shrinkage, loss of equipment & breakage describe different root causes for an uncontrolled and unforeseen loss or damage of RPC pooling equipment. Shrinkage may occur whenever RPC are not passed on along the supply chain as contractually agreed. Moreover, shrinkage & loss of equipment may result from RPC theft and the criminal abuse of pooling equipment. Increased RPC loss or damage might also raise IFCO Group's costs for maintaining the current size of the RPC pool. Additional capital expenditures without higher rental volumes could potentially reduce profitability. To effectively monitor and manage risks regarding its RPC pool, IFCO Group has set up operational, logistical and analytical tools to measure, reduce and minimize these risks (e.g. track & trace systems or declaration procedures). Moreover, the Group has established a deposit fee system for the RPC pool in Europe, and invoices extended hire charges and lost equipment charges. Thus, the largest RPC pool has the strongest risk coverage. In addition, pooling equipment related risks are considered in the Group's accounting policy.

3.1.4 Supplier risks

The Group's business depends on the availability and timely delivery of its RPCs at reasonable commercial terms. When it comes to the operation of the RPCs the Group's business depends on the availability of timely and sufficient washing service as well as transport service.

Risks related to the RPC manufacturer comes from the high share of RPCs purchased from a small number of RPC suppliers and the resulting high dependency on these suppliers, especially in Europe and North America. Not having a sufficient supply of RPCs would limit IFCO Group ́s ability to provide RPCs to customers in a timely manner, thus negatively impacting the Group ́s operating results. Mitigating actions comprise a regional multi-vendor strategy, increasing the number of RPC suppliers per region to at least two or three and avoiding exclusive production contracts for RPC purchases. IFCO Group owns patents to all its RPC designs and can prevent manufacturers from supplying its RPCs to competitors. In addition, the Group has access to all design drawings and owns a material number of the molds used in the RPC manufacturing process.

Risks related to washing service providers encompass the provision of sufficient washing capacity to meet our requirements in terms of quality, volumes and costs and in line with contractual agreements. If outsourced service providers are not available or not capable to meet our requirements, IFCO may need to insource service centre operations or provide task-force assistance at additional cost and management resources or bail out a service provider financially.

Risks related to the automation of washing equipment are defined as the capability of our suppliers to meet IFCO's requirements in terms of agreed equipment specification, production capacities and installation schedules and in line with contractual agreements. There is a limited number of established washing equipment suppliers globally, which may lead to supply constraints. This, in turn, might lead to delays in delivery schedules of such equipment, or further price increases.

Transport service provider availability is influenced by external factors such as anthropogenic risks or regulations & legislation. Mitigating actions to counter insufficient service provider availability & capability include dual / multiple sourcing and continually looking for alternative providers as well as long-term strategic relationships with providers.

3.1.5 Environmental risks

IFCO Group's business is governed by a variety of environmental laws and regulations, including safety, hygiene, handling and disposal of waste products, fuel storage and air pollution control. Violations of these laws and regulations can result in serious consequences, including civil and criminal charges, fines and penalties, even to the extent of business restriction or site closures. IFCO Group monitors and manages these risks through rigorous internal procedures and the Group's internal management reporting system. IFCO has committed to a set of ambitious goals as part of the ESG 2025 Strategy. Significant progress was made in FY 2024 on preparing IFCO for the implementation of the CSRD reporting requirements.

3.1.6 Ukraine war

The outbreak of war in Ukraine in February 2022 was simultaneously accompanied by strict sanctions imposed on Russia by European and other countries. Since then, existing sanctions have been tightened and additional sanctions have been imposed. Although the rise on energy prices, transport prices and general inflation due to the Ukraine war could be tamed and stabilized on a lower level, the prices could significantly increase again if new escalations occur. IFCO's investments in Ukraine and Russia as well as business relationships with clients and partners in Ukraine and Russia are extremely limited. So far, IFCO has not identified any material direct risk from the war in Ukraine.

3.1.6 Cyber Risks

Cyber security & incident response risk relates to the exposure or loss resulting from a cyber-attack or a data breach at IFCO. These incidents may include ransomware attacks, phishing attacks, deep fakes, data leakage, hacking and insider threats. These risks have been mitigated by the effective implementation of subject-related corporate policies; an effective Internal Control System (ICS); continuous internal communication to raise the awareness of employees; comprehensive access control & access monitoring; continuous monitoring of attacks and the integrity of IFCO's IT systems; restriction of the number of employees having power of authority for bank accounts and payment runs and cybersecurity insurance

3.2 Financial risks

The Group is exposed to various financial risks because of the company's global business activities and capital structure. Financial risks regularly arise from interest rate risks, exchange rate risks, commodity price risks, credit default risks, liquidity risks, tax and accounting risks, which can be limited using derivative financial instruments, among other things. IFCO Group's objectives and policies in respect of managing these financial risks are further described in note 28 to the consolidated financial statement of IFCO Group.

3.3 Legal risks

Legal risk is the risk of losses resulting from environmental and legal non-compliance with regulations and contractual obligations. Legal risk also includes the risk of litigations with customers, suppliers or any other third party. The Group's legal department manages these legal risks groupwide, and handles all legal matters the Group is facing in its relations with stakeholders. The legal function takes on groupwide tasks such as drafting and reviewing contracts for IFCO Group companies as well as forms required by the Group, while providing strategic, guidance and advice to various departments, and handling litigations.

4. Events after the balance sheet date

An individual executive of IFCO Group entered into an exit bonus agreement with Irel MidCo SARL, with signing date 26 July 2024. The remuneration out of these agreements is derived from the Multiple on Invested Capital (MOIC) in the event of a sale of IFCO Group. For more information we refer to Note 33.3 Transactions in the Notes to the Irel BidCo SARL Consolidated Financial Statements.

Except the above-mentioned agreement, no material events have occurred since the closing date that would necessitate adjustments or additional disclosures in the financial statements.

5. Others

IFCO Group has not engaged in research and development. There is no branch owned directly by Irel BidCo SARL. Neither Irel BidCo SARL nor any subsidiary acquired its own shares and did not allocate free shares to its staff in the year ended 30 June 2024, as well as in the year ended 30 June 2023.

6. Future developments

The business of the Group is influenced by the global economic situation only to a limited extent, as the fresh food producing and retailing industries, being the main customers of IFCO Group, are not as exposed to economic cycles as other industries. As a result of this resilience the Group is well-positioned to grow in a steady and stable manner.

Moreover, IFCO Group is poised to leverage its leadership and market experience in Europe to achieve or even surpass overall market growth. To achieve this, IFCO Group will continue to strengthen its sales initiatives, and aspires to further expand its geographic presence in Western, Central and Eastern Europe, North America, South America, and Asia.

Against this backdrop IFCO Group expects to grow its rentals and sales revenue both by a compound annual growth rate in the range of a medium to high single-digit percentage by end of FY2026.

Adjusted EBITDA margin is assumed to remain fairly stable overall over the projection period until the end of FY 2026 at around 24% to 25% driven by scale effects offsetting cost inflation and favorable mix shift to higher margin geographies.

Furthermore, the average turn rate of RPCs is expected to increase slightly as a result of the favorable mix shift in rentals to higher turn rate geographies and a stable turn rate development in Europe due to higher volumes in core categories and resulting efficiency effects.

To achieve the projected growth, IFCO Group will continue to invest in the RPC pool. Regarding capital expenditure the breakage and shrinkage rate per rental of RPCs is expected to decline slightly over the projection period until the end of FY 2026 driven by a shift to newer RPC models with greater durability and higher associated security deposits resulting in higher customer accountability.

Regarding its financial position IFCO Group expects sufficient liquidity based on significant net cash flows from operating activities in combination with the existing loan facilities.

Independent auditor's report

To the Shareholders of

Irel BidCo S.à r.l.

2 rue Edward Steichen,

L-2540 Luxembourg

Report on the audit of the consolidated financial statements

Opinion

We have audited the consolidated financial statements of Irel BidCo S.à r.l. and its subsidiaries (the "Group"), which comprise the consolidated balance sheet as at 30 June 2024, and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 30 June 2024, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

Basis for Opinion

We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession (the "Law of 23 July 2016") and with International Standards on Auditing ("ISAs") as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier" ("CSSF"). Our responsibilities under the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the "responsibilities of the "réviseur d'entreprises agree" for the audit of the consolidated financial statements" section of our report. We are also independent of the Group in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants ("IESBA Code") as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The Board of Managers is responsible for the other information. The other information comprises the information included in the consolidated management report but does not include the consolidated financial statements and our report of the "réviseur d'entreprises agree" thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.

Responsibilities of the Board of Managers and those charged with governance for the consolidated financial statements

The Board of Managers is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with IFRS as adopted by the European Union, and for such internal control as the Board of Managers determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Managers is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Managers either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the "réviseur d'entreprises agree" for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the "réviseur d'entreprises agree" that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and regulatory requirements

The consolidated management report is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements.

Ernst & Young

Société anonyme

Cabinet de revision agree

Anca Lungu Negoita

Luxembourg, 26 September 2024

Consolidated Financial Statements

for the year ending 30 June 2024

Consolidated Statement of Comprehensive Income

for the year ending 30 June 2024

Consolidated Balance Sheet for the year ending 30 June 2024

Assets

Consolidated Cash Flow Statement

for the year ending 30 June 2024

Consolidated Statement of Changes in Equity

for the year ending 30 June 2024

Notes to the Consolidated Financial Statements for the year ending 30 June 2024

Note 1 About this Report

1.1 Corporate information

Irel BidCo SARL ("BidCo") is incorporated as a limited liability company (Société à Responsabilité Limitée) under the laws of the Grand Duchy of Luxembourg for an unlimited period, registered with the Trade and Company Register of the Grand Duchy of Luxembourg under number B231829 and with business address at 2, rue Edward Steichen, 2540 Luxembourg.

BidCo is a Luxembourg based holding company and the ultimate parent of Irel HoldCo GmbH located in Zugspitzstraße 3a/b, 82049 Pullach i. Isartal, Germany, primarily operating through its shareholding in IFCO Management GmbH (formerly: Irel AcquiCo GmbH) with subsidiaries in Europe, North and South America, Japan and China. BidCo and its subsidiaries are hereafter also referred to as "IFCO Group" or "Group". IFCO Group's European operations and the global headquarter are in Pullach, Germany.

IFCO Group is involved in the organization and administration of the rental, distribution and purchase of reusable packaging containers ("RPC") and offers a comprehensive RPC Management Services system. The RPCs are rented primarily to producers of fresh fruit and vegetables in exchange for a one-time usage fee. The producers' goods are transported in the RPCs to various intermediaries and ultimately to retailers for sale to consumers. The company delivers the empty RPCs to customers (producers) and collects the empty RPCs from regional service points of retailers. After the collection the crates will be inspected, sanitized and cleaned to be ready for the next use.

The consolidated financial statements of the Group for the year ended 30 June 2024 were authorized for issue in accordance with a resolution of the Board of Managers on 26 September 2024. Under Luxembourg law, the consolidated financial statements have to be approved by the shareholders at the Annual General Meeting.

1.2 Basis of Preparation

The consolidated financial statements of IFCO Group have been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union. Negative net current assets are no indicator against the going concern assumption as only the individual refundable deposits have a short-term character but refundable deposits in principle will continuously be a material line within liabilities and have a quasi-permanent character as long as crates are rented out in Europe.

The following amendments and revisions to existing standards became effective, where applicable, for the IFCO Group consolidated financial statements:

The amendments had no or no material impact on the financial position and financial results of the IFCO Group.

The Group's consolidated financial statements for the current financial reporting year ending 30 June 2024 include the parent company Irel BidCo SARL and its consolidated subsidiaries. In the following FY 2024 comprises the period from 1 July 2023 to 30 June 2024, and FY 2023 comprises the period from 1 July 2022 to 30 June 2023.

The consolidated financial statements have been prepared on a historical cost basis, except for derivatives carried at fair value under IFRS 9. The financial statements of the domestic and foreign subsidiaries included in the consolidated financial statements have been prepared uniformly in accordance with the classification, accounting and measurement principles applicable in accordance with IFRS. The following accounting principles were applied uniformly for all periods presented in the consolidated financial statements. IFCO Group uses the Euro ("EUR") as the functional currency and each subsidiary has its own functional currency which will be converted into EUR. The figures disclosed are mathematically rounded and are shown in thousand Euro ("EURk").

Note 2 Material accounting policies and material accounting estimates

2.1 Consolidation

The consolidated financial statements comprise the financial statements of IFCO Group and its subsidiaries as at 30 June 2024. Control is achieved when IFCO Group is exposed, or has rights, to variable returns from its involvement with the investee and can affect those returns through its power over the investee.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with IFCO Group's accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

2.2 Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value.

Acquisition-related costs are expensed as incurred and included in other operating expenses. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is more than the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all the assets acquired and all the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses as disclosed in Note 18.2.

Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

2.3 Current versus non-current classification

The Group presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is current when it is:

All other assets are classified as non-current.

A liability is current when:

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

2.4 Fair value measurement

For the goodwill impairment test, the Group calculates the fair value of each CGU that is carrying a goodwill.

All financial assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy (see below), based on the lowest level input that is material to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). If all material inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

For all financial assets and liabilities that are regularly recognized in the financial statements at fair value, IFCO Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at every balance sheet date.

2.5 Revenue

Revenue from leases

1) General

IFCO Group is in the business of providing reusable packaging containers (RPC) for fruits, vegetables, meat, fish, eggs, bread and other applications to producers. The Group's subsidiaries cooperate with both producers and retailers globally by accompanying producers along their supply chain from filling to shipment of fresh groceries and by making the logistic process as efficient as possible for retailers. Producers order RPCs directly from IFCO's subsidiaries and pay a rental fee for the one-time usage of RPCs. Producers use the RPC for the purpose of shipment to a registered retailer. After delivery from the producer to the retailer, the retailers are using the RPCs for the purpose of efficient distribution and placing the fresh groceries on their shelves. Retailers arrange the RPCs for collection in central warehouses. After recollection of the RPCs and complementing the logistics cycle, IFCO's subsidiaries inspect all returned RPCs, and those RPCs which are not damaged and may be used further are washed, disinfected and prepared ready for reuse in a new cycle. However, every delivery is arranged separately, RPCs are generally not tracked individually during the cycle and are also not assigned long-term to a certain producer or retailer. For deliveries in Europe the Group charges the producer with security deposits for every RPC ordered and the producer is required to compensate the Group for any losses or damages. Hence a strong risk coverage by a deposit fee is in place for approx. 70% of the Group's business.

Generally, the principles according to which an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer are established by IFRS 15. IFRS 15.5 states several exceptions when entities should apply other reporting standards than the IFRS 15 standard for revenue recognition including lease contracts within the scope of IFRS 16 Leases. Based on the Group's accounting policy the revenues generated from the provision of pooling equipment to customers for a period and, hence, the contracts with these producers constitute a lease and therefore IFRS 16 is the relevant IFRS-standard for revenue recognition.

2) Group as a lessor

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. The contract with the producer as the customer of IFCO subsidiaries does not provide any purchase option, as IFCO Group's business model is not about selling RPCs, but on short-term rental of RPCs of no longer than 7-30 days. The lease term is being specified as the non-cancellable usage period of the RPC and starts with the delivery of the RPC to the producer. The lease term regularly ends with the shipment of the filled RPCs to retailers because there is neither a direct nor an indirect lease with retailers. RPCs are used by numerous registered producers without any modifications. The costs incurred for the transport of the RPCs to the producer and the collection of the RPCs from the retailer as well as the washing costs are fulfilment activities within the logistic cycle.

Lease income is accounted for on a straight-line basis over the rental period at the customer. The rental cycle varies between 7 and 30 days depending on the respective country to reflect the usage period for crates delivered to customers. As revenue is initially recognized when the RPCs are received by the producer IFCO Group recognizes a revenue deferral as of the balance sheet date. The lease term is further described in Note 2.14 2) a). The lease payments are significantly lower than the RPCs' fair value.

Considering that IFCO Group receives payments regularly once based on the delivery, there are no material effects of future lease payments on the lease cycle. Due to insignificant length of the lease term (in exceptional cases up to 30 days) in comparison with the full reporting period a maturity analysis on lease payments has been conducted which validates the insignificant effects from future lease payments for the current reporting period.

The depreciation of underlying assets subject to operating leases is calculated in accordance with IAS 16. Furthermore, the group applies IAS 36 to determine whether an underlying asset subject to an operating lease is impaired and to account for any impairment loss identified. In order to determine an appropriate value of potential future losses of pooling equipment, the Group considers a shrinkage rate, refer to Note 2.14 2) b).

Other Revenue

In addition to the main revenue stream which consists of revenue from leases, IFCO generates other revenues from waste management services, proceeds from sale of pallets on which the containers are transported, proceeds from sales of rejected containers from other pooling providers and fuel surcharges related to transported containers.

The revenues are recognized when the service is rendered.

2.6 Taxes

1) Income tax

The income tax expense or benefit for the year is the tax payable or receivable on the current and previous year's taxable income based on the national income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

2) Deferred tax

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit, calculated using tax rates which are enacted or substantively enacted as at the balance sheet date.

Deferred tax assets and liabilities are not recognized:

Deferred tax assets are recognized for carried forward tax losses and current temporary differences to the extent that the realization of the related tax benefit through future taxable profits are probable. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that enough taxable profit will be available to allow all or part of the deferred tax assets to be utilized. The criteria for recognizing deferred tax assets arising from the carry forward of unused tax losses and tax credits are the same as the criteria for recognizing deferred tax assets arising from deductible temporary differences. However, the existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, when an entity has a history of recent losses, the entity recognizes a deferred tax asset arising from unused tax losses, tax credits or temporary differences only to the extent that the entity has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the entity.

The benefit from tax losses will only be obtained if:

2.7 Foreign currency translation

1) Functional and presentation currency

Items included in the financial statements of each of IFCO Group's entities are measured using the functional currency of each entity. The consolidated financial statements are presented in EUR, which is IFCO Group's functional and presentation currency.

2) Transactions and balances

Foreign currency transactions are translated into the functional currency of each entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year-end rates of monetary assets and liabilities denominated in foreign currencies, are recognized in profit or loss, except where attributable to part of the net investment in foreign subsidiaries which are deferred in equity.

Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within other income. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other gains/(losses).

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

3) Group companies

The results and financial position of foreign operations that have a functional currency different from the functional currency of the parent are translated into the presentation currency as follows:

On consolidation basis, exchange rate differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognized in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

The most important exchange rates affecting IFCO Group were:

2.8 Property, Plant & Equipment

1) Recognition and Measurement

Property, plant and equipment (PPE) is stated at cost, net of depreciation and any impairment, except land, which is shown at cost less impairment. Cost includes expenditure that is directly attributable to the acquisition of assets, and, where applicable, an initial estimate of the cost of dismantling and removing the item and restoring the site on which it is located.

Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the expenditure will flow to IFCO Group. Repairs and maintenance are expensed in profit or loss in the period they are incurred.

PPE is derecognized upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any net gain or loss arising on derecognition of the asset is included in profit or loss and presented within other income/operating expenses in the period in which the asset is derecognized.

2) Depreciation of Property, Plant and Equipment

Depreciation is recognized on a straight-line or reducing balance basis on all PPE (excluding land) over their expected useful lives to a residual value. Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

The expected useful lives of PPE are generally:

The cost of improvements to leasehold properties is amortized over the unexpired portion of the leases, or the estimated useful life of the improvements to IFCO Group, whichever is shorter. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.

3) Pooling equipment disposals

IFCO Group's pooling equipment operations differ globally in terms of business models, market dynamics, customer and distribution channel profiles, contractual arrangements and operational details. IFCO Group monitors its pooling equipment operations using detailed analytics with key performance indicators (KPIs) and conducts audits continuously to confirm the existence and the condition of its pooling equipment assets, and to validate its customer hire records. During these audits, which take place at IFCO Group's plants, customer sites and other locations, pooling equipment is counted on a sample basis and reconciled to the balances shown in IFCO Group's customer hire records. The Group uses a shrinkage rate which is determined by reference to historical statistical data in each market, including the outcome of audits and analytics in order to estimate a proper value of potential future losses of pooling equipment. Loss is an inherent risk of pooling equipment operations. Regarding possible future losses of pooling equipment, which is determined by applying a shrinkage rate, critical accounting estimates are to be made by the Group's management (refer to Note 2.14 Accounting judgements and estimates).

4) Pooling equipment residual value

The estimation of the residual value is an important factor for the depreciation. Based on the significance of pooling equipment for the balance sheet the assessment of the residual value for crates is important. The Group's estimation is based on current market information and takes into account the long-term market development even for the majority of the pooling equipment that will be fully recycled and used for the production of new crates.

2.9 Leases as lessee

1) Recognition and measurement

The Group applies a uniform recognition and measurement approach for all leases, except for leases of low-value assets. As a lessee, IFCO Group is required to recognize a lease liability representing its obligation to make future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. In this context, IFCO Group, as a lessee, recognizes right-of-use assets and lease liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. The Group includes short term leases and recognizes respective right-of-use assets and lease liabilities for leases with a term of less than 12 months.

2) Right-of-use assets

The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, with average lease terms as follows:

Amended estimates for land and buildings, as well as IT equipment result from newly signed contracts, as well as new procurements. If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

3) Lease liabilities

At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate (see Note 2.14 Accounting Judgements and Estimates) at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Group has several lease contracts that include extension and termination options. The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. Judgements applied are discussed in further detail in Note 2.14 Accounting Judgements and Estimates.

4) Leases of low-value assets

The Group applies the lease of low-value assets recognition exemption to any leases involving underlying leased asset valued less than EURk 5 or a comparable amount in other currencies, i.e. USDk 5 or GBPk 5. Lease payments on leases of low value assets are recognized as expense on a straight-line basis over the lease term.

2.10 Intangible assets

Intangible assets acquired are capitalized at cost, unless acquired as part of a business combination, in which case they are capitalized at fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less provisions for amortization and impairment. The Group amortizes intangible assets with finite useful lives using the straight-line method over the shorter of their contractual terms or their expected useful lives.

The costs of acquiring computer software for internal use are capitalized as intangible non-current assets where it is used to support a material business system and the expenditure leads to the creation of an asset.

Useful lives have been established for all non-goodwill intangible assets. Amortization charges are expensed in profit or loss on a straight-line basis over those useful lives. Estimated useful lives are reviewed annually.

The expected useful lives of intangible assets are:

There are no non-goodwill intangible assets with indefinite useful lives except for the brand "IFCO". The company brand "IFCO" has a high recognition effect in the market and offers added value towards the customer. The acquired brand "IFCO" is deemed to have an indefinite useful life as there is no foreseeable limit on the period during which the Group expects to derive economic benefits from this asset. The brand is tested for impairment annually with the goodwill impairment test. The company brand is strongly linked to IFCO's operating activities with focus on the European market.

Intangible assets except for goodwill and IFCO brand are tested for impairment only where an indicator of impairment exists, either individually or at the CGU level. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

2.11 Financial instruments

1) General

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial instrument is recognized when the Group becomes party to the contractual provisions of an instrument.

2) Financial assets

a) Initial recognition and measurement

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Financial assets are classified, at initial recognition, as subsequently measured at amortized cost and fair value through profit or loss for the investment.

The classification of financial assets ("debt instruments") at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. Except for trade receivables that do not contain a material financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables are measured at the transaction price.

For a financial asset to be classified and measured at amortized cost, it needs to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. Please refer to Note 28 for an overview of the financial assets' classification and measurement.

The Group's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

b) Subsequent measurement

Financial assets at amortized cost (debt instruments)

Financial assets at amortized cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified, or impaired.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are subsequently measured at fair value. Gains or losses are recognized in profit or loss.

The Group's financial assets at amortized cost include trade and other receivables, cash, and cash equivalents.

c) Impairment

The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. Because expected credit losses consider the amount and timing of payments, a credit loss arises even if the entity expects to be paid in full but later than when contractually due.

ECLs are recognized in three stages. For credit exposures for which there has not been a material increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a material increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For credit exposures for which there has been a material increase in credit risk (30 days) to the point where it is considered credit-impaired, i.e. where objective evidence of impairment such as insolvency exists, interest revenue is calculated based on the loan's amortized cost (that is, the gross carrying amount less the loss allowance). Lifetime ECLs are recognized, as in Stage 2.

For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

The Group considers trade receivables in default when contractual payments are 120 days past due. For the remaining financial assets, the Group considers default when contractual payments are 90 days overdue. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before considering any credit enhancements held by the Group. A financial asset is written-off when there is no reasonable expectation of recovering the contractual cash flows. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity.

d) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group's consolidated Balance Sheet) when the contractual rights to receive cash flows from these assets have expired or the Group has transferred substantially all the risks and rewards or has neither transferred nor retained substantially all the risks and rewards but transferred the control of the assets.

3) Financial liabilities

a) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, or financial liabilities measured at amortized cost. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables, loans, and borrowings. When the Group becomes party to the contractual provisions of a financial liability, that is not subsequently measured at fair value through profit or loss, the financial liability is assessed whether they contain embedded derivatives. Judgement is applied in determining whether derivatives embedded in hybrid contracts are closely related to the host contract, considering both the nature of the host contract and the nature of the underlying derivative. In case of any embedded derivative that must be bifurcated, the initial carrying amount is adjusted to reflect the separate recognition of a derivative financial asset or liability. In case there are multiple embedded derivatives contained in a contract they are treated as a compound embedded derivative when bifurcated and valued unless the embedded derivatives relate to different risk exposures and are readily separable and independent from each other.

b) Financial liabilities at amortized cost (loans and borrowings)

This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. For more information, refer to Note 28.

c) Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss. In case the financial liability is non-substantially modified the change in fair value is recorded in the statement of profit or loss. If there are any additional transaction costs directly attributable to the adjusted financial liability, these costs are deducted from the liability and are amortized using the EIR method.

4) Derivatives

Derivative financial instruments are instruments that fulfil the definition in accordance with IFRS 9 Appendix A. Derivatives are mainly comprised by bifurcated embedded derivatives in financial liabilities and derivatives concluded to hedge a financial risk. Derivatives are accounted for at fair value through profit or loss unless they are designated for hedge accounting. Derivatives are classified as financial assets or financial liabilities, depending on the fair value at the reporting date.

Cash flow hedges serve to hedge against risk of cash flow fluctuations. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized in other comprehensive income. It is reclassified to the statement of profit or loss as a reclassification adjustment in the same period during which the hedged item affects profit or loss.

Cash flow hedge accounting is applied for interest rate derivatives hedging the cash flow risk from variable interest payments. Interest-rate swaps are used for this type of hedging. For more information, refer to Note 28.

5) Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

2.12 Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on the income approach due to the absence of observable market prices and comparable input parameters. Consequently, the company converts future cash flows to a single discounted amount from which cost of disposals are deducted. The company assesses cost of disposals by deriving transaction costs from a hypothetical transaction. The value in use calculation is based on a Discounted Cash Flow (DCF) model.

The cash flows are derived from the forecast for the next 5 years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.

These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognized by the Group. The key assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in Note 18.

2.13 Provisions

Provisions for liabilities are made on the basis that, due to a past event, the business has a constructive or legal obligation to transfer economic benefits that are of uncertain timing or amount. Provisions are measured at the present value of management's best estimate at the balance sheet date of the expenditure required to settle the obligation. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks appropriate to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost in profit or loss.

Employee entitlements are provided by IFCO Group in accordance with the legal and social requirements of the country of employment. Principal entitlements are for annual leave, sick leave, long service leave, bonuses and contract entitlements. Annual leave and sick leave entitlements are presented within other payables.

Liabilities for annual leave, as well as those employee entitlements that are expected to be settled within one year, are measured at the amounts expected to be paid when they are settled. All other employee entitlement liabilities are measured at the estimated present value of the future cash outflows to be made in respect of services provided by employees up to the reporting date.

Employee entitlements are classified as current liabilities unless IFCO has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

2.14 Accounting Judgements and Estimates

The preparation of the Group's consolidated financial statement goes along with judgements, estimates and assumptions that affect the amount of revenues, expenses, assets, and liabilities including corresponding disclosures. The inherent uncertainty in these assumptions and estimates could require a material adjustment to the carrying amounts in future periods.

Other disclosures relating to the Group's exposure to risks and uncertainties include:

1) Judgements

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most material effect on the amounts recognized in the consolidated financial statements:

a) Determining the lease term of lease contracts with renewal and termination options

IFCO Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a material event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of material leasehold improvements or material customization to the leased asset).

The Group included the renewal period as part of the lease term for leases of property, plant and equipment with shorter non-cancellable period (3 years). The Group typically exercises its option to renew for these. The renewal periods for leases of plant and machinery with longer non-cancellable periods (i.e., 10 to 15 years) are not included as part of the lease term as these are not reasonably certain to be exercised. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.

b) Allocation of the company brand

IFCO's brand is fully attributable to IFCO's European business as all the benefits arising from the company brand are recognized in the European markets. The brand is functionally connected to the assets of the European operating unit by generating recognition effects resulting into surpluses in the European market. Thus, the company brand is inseparable from CGU Europe and regularly tested for impairment on an annual basis (see Note 18).

2) Estimates and assumptions

Described below are the major assumptions concerning key sources of estimation uncertainty at the reporting date, that have a material risk of causing a material adjustment to the carrying amounts of IFCO Group's assets and liabilities within the next financial year. IFCO Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Major assumptions about future developments may change due to market changes or other circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

a) Determination of the lease term of contracts with customers

The Group executes operating leases through its provisioning of RPCs to producers of agricultural goods. The lease term is being specified as the non-cancellable usage period of the RPC and starts with the delivery of the RPC to the producer. The lease term regularly ends with the shipment of the filled RPCs to retailers because there is neither a direct nor an indirect lease with retailers. Leases of RPCs have terms of between 7 and 30 days which are assessed on a country-by-country basis and are applied in the recognition of revenues. As of the balance sheet date IFCO Group calculates a revenue deferral on a straight-line basis over the before named timeframe (refer to Note 24).

b) Pooling equipment shrinkage rate

In order to determine an appropriate value of potential future losses of pooling equipment, the Group uses a shrinkage rate. This shrinkage rate is judgmentally determined by the Group by reference to historical statistical data in each market, including the outcome of audits and analytics in order to estimate an appropriate value of potential future losses on disposals of pooling equipment. The pooling equipment shrinkage is considered within disposals of pooling equipment as depicted in Note 17.

c) Pooling equipment residual value

The estimation of the residual value is an important factor for the depreciation and due to the significance of pooling equipment for the balance sheet the residual value for crates is substantive. The Group's estimation is based on current market information and is taking into account the long-term market development even for the majority of the pooling equipment of which the majority will be fully recycled and used for the production of new crates.

The residual values are reviewed at each financial year-end and adjusted prospectively, if appropriate.

d) Impairment of non-financial assets

At each reporting date, IFCO Group assesses whether there is any indication that an asset, or cash generating unit (CGU) to which the asset belongs, may be impaired. Where an indicator of impairment exists, IFCO Group makes a formal estimate of the recoverable amount. The recoverable amount of goodwill and the brand "IFCO" is tested for impairment annually (refer to Note 18). The recoverable amount of an asset is the greater of its fair value less costs to sell and its value in use. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognized by IFCO Group. Both, value in use and fair value less cost of disposal are determined as the estimated future post-tax cash flows discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Group applies post-tax discount rates for discounting post-tax cash flows leading to the same result as by using pre-tax data. Where the carrying value of an asset exceeds its recoverable amount, the asset is impaired and is written down to its recoverable amount. The impairment loss is recognized in profit or loss in the reporting period in which the write-down occurs. Current fiscal year's composition of the impairment test is further discussed in Note 18.

e) Leases - Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary's functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary's stand-alone credit rating). In applying the IBR the Group measures its lease liabilities as presented in Note 24.

f) Provision for expected credit losses of trade receivables

The Group uses a provision matrix to calculate expected credit losses (ECLs) for trade receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating, and coverage by letters of credit and other forms of credit insurance). The provision matrix is initially based on the Group's historical observed default rates which are determined via net debt provision and sales over the last three periods.

The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forward-looking elements (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed. The assessment of the correlation between historical observed default rates, forward-looking elements and ECLs is a material estimate. The amount of ECLs is sensitive to changes in circumstances and of forward-looking elements. The Group's historical credit loss experience and forward-looking elements may also not be representative of customer's actual default in the future. The information about the ECLs on the Group's trade receivables is disclosed in Note 28.

g) Estimates used for calculating taxes

IFCO Group is a global Group and is subject to income taxes in many jurisdictions around the world. Material judgement is required in determining the provision for income taxes on a worldwide basis. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. IFCO Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from amounts provided, such differences will impact the current and deferred tax liabilities in the period in which such outcome is obtained.

In addition, IFCO Group assesses the recognition and recoverability of deferred tax assets on a regular basis. This requires judgements about the application of income tax legislation in jurisdictions in which IFCO Group operates. Changes in circumstances may alter expectations and affect the carrying amount of deferred tax assets. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that enough taxable profit will be available to allow all or part of the deferred tax asset to be utilized.

The recognition and measurement of uncertainties related to income taxes is based on the best-estimate of those uncertainties in accordance with IFRIC 23 and IAS 12. The income tax assessment is generally performed at the level of individual circumstances, considering any interactions that may exist. If recognition of the tax treatment is probable, current and deferred taxes must be recognized on this basis. If there is uncertainty regarding recognition, the most probable amount that would be recognized for tax purposes is generally used, unless the expected value of different scenarios leads to more meaningful results. Tax authorities are always assumed to have full knowledge of the facts and circumstances. The assumptions and decisions made are reviewed at each reporting date and adjusted if necessary, based on new information.

Further details on taxes are disclosed in Note 11.

2.15 Hyperinflation Accounting

The functional currency of IFCO SYSTEMS Argentina S.A., Buenos Aires, Argentina ("IFCO Argentina") is the Argentine peso, which is hyperinflationary within the meaning of IAS 29 Financial Reporting in Hyperinflationary Economies.

The functional currency of IFCO Lojistik Sistemieri Tic. Ltd. Sti., Istanbul, Turkey ("IFCO Turkey") is the Turkish lira, which is hyperinflationary within the meaning of IAS 29 Financial Reporting in Hyperinflationary Economies.

According to IAS 21.43, the financial statement of IFCO Argentina and IFCO Turkey must be restated in accordance with IAS 29 Financial Reporting in Hyperinflationary Economies to reflect the current purchasing power at the end of the reporting period before being included in the Consolidated Financial Statements of the Group. Hyperinflationary accounting is applied to all the entity's assets and liabilities before translation. All amounts in the entity's financial statements have been translated at the closing rate at the balance sheet date.

Non-monetary assets and liabilities, shareholders' equity, and comprehensive income in the financial statements of IFCO Argentina and IFCO Turkey must be restated to reflect the development of the respective price index. There is no restatement necessary for monetary assets and liabilities because they represent money held, to be received or to be paid and are therefore already expressed in current purchasing power at the balance sheet date. A general price index, which reflects changes in the purchasing power and should be used by all entities that report in the currency of the same economy, must be determined for the restatement. BidCo follows the approach proposed by the Federación Argentina de Consejos Professionals de Ciencias Económicas ("FACPCE") in Resolution JG 539/18, which prescribes the indices to be used by entities with a functional currency of the Argentine peso for the application of the restatement procedures. These indices are largely based on the Wholesale Price Index for periods up to December 31, 2016, and the Retail Price Index thereafter. The detailed table of indices is published monthly by FACPCE. For the restatement of financial statements of IFCO Turkey BidCo selected the consumer price index that is monthly calculated and published by the Turkish Statistical Institute (TURKSTAT) as it is the most reliable indicator of changes in general price levels, and it is normally closest to the concept of the general price index required by IAS 29. This is because it is at the end of the supply chain and it reflects the impact of prices on the general population's consumption basket.

The index and corresponding conversion factors for the last years were as follows:

For the restatement of non-monetary items (excluding shareholders' equity), BidCo used the increase in the general price index from the transaction date when they first recognized (e.g., date of acquisition for property, plant and equipment) to the end of the reporting period. No restatement is required for non-monetary assets and liabilities carried at amounts current at the end of the reporting period, such as net realizable value or fair value. Restated non-monetary assets following the guidance in IAS 29 Financial Reporting in Hyperinflationary Economies are still subject to impairment assessment in accordance with the relevant guidance. If an asset's recoverable amount is less than its restated amount, an impairment loss must be recognized in the profit or loss despite no impairment of the asset in the historical cost financial statement was apparent.

At the beginning of the first period when IAS 29 Financial Reporting in Hyperinflationary Economies is applied, the components of equity, excluding retained earnings and any revaluation surplus, are restated by applying a general price index from the dates on which the items were contributed or otherwise arose. This includes reserves created by amounts recognized in other comprehensive income. Any revaluation surplus that arose in previous periods is eliminated. Retained earnings are restated for the balancing figure derived from the other amounts in the restated opening balance sheet. At the end of the first period and in subsequent periods, subscribed capital and capital reserves are restated by applying a general price index from the beginning of the period or the date of contribution, if later.

All items in comprehensive income for the current year are restated by applying the change in the general price index from the dates when the items of income and expense were originally recorded. Current year restated net income is added to the balance of the restated opening retained earnings.

The monetary gain or loss can be calculated as the difference between the historical cost amounts and the result from the restatement of non-monetary items, equity and items in the Consolidated Statement of Comprehensive Income.

Note 3 IFCO's business performance presentation

To reflect the specifics of IFCO's business model more adequately and to approximate statutory financial reporting and management reporting, the company subsequently introduces a business performance reporting which presents the income statement in a modified way, and which includes "Consolidated EBITDA", "Consolidated EBITA" and "Consolidated EBIT" as a set of alternative performance measures (APM). According to this reporting structure, "Consolidated EBITDA" is defined as earnings before depreciation, gains/losses from disposals of assets, amortization, net finance costs, foreign currency gains/losses and tax expenses; "Consolidated EBITA" is defined as earnings before amortization, net finance costs, foreign currency gains/losses and tax expenses; "Consolidated EBIT" is calculated as earnings before net finance costs, foreign currency gains/losses and tax expenses.

FY 2024

FY 2023

Note 4 Business Combinations

Benimar S.A.

On 1 August 2023 IFCO acquired 100% of the share capital of Benimar S.A. Mercobox, Montevideo, Uruguay.

Benimar S.A. Mercobox business model focuses on crate pooling services. Prior to the acquisition, Benimar was IFCO Uruguays main competitor.

The transaction represents a business combination as defined in IFRS 3.

The amounts recognized in respect of the identifiable assets acquired and liabilities assumed are set out in the table below:

The consideration transferred is satisfied by cash payments except EURk 67 liabilities assumed.

The net cash outflows arising from the acquisition amount to the consideration transferred less EURk 21 cash and cash equivalents acquired.

The goodwill is attributable to the expected process improvements to be realized by applying IFCO Uruguay's experience in the South American market. The respective goodwill in local currency Uruguayan Pesos (UYU) amounts to UYUk 36,747. None of the goodwill is expected to be deductible for tax purposes. The goodwill is attributed to the CGU South America.

The assets acquired comprises, among others, mainly about 131,000 crates.

The post-merger integration process is still ongoing. However, after 12 months subsequent to the acquisition date the measurement of above mentioned fair values is completed.

Acquisition related costs amounted to EURk 39.

Benimar S.A. contributed EURk 898 revenues and EURk -176 to the Group's profit before taxes for the period between the date of acquisition and the reporting date 30 June 2024.

The impact on revenues and the Group's profit if the acquisition had been completed on the first day of the financial year is not disclosed because it is impracticable to determine these amounts. Additionally, these amounts are immaterial for the Group.

Bepco OÜ

On 16 February 2024 IFCO acquired 100% of the share capital of Bebco OÜ, Estonia and its 100% subsidiaries OÜ Logistics Equipment Production, Estonia, SIA Bepco, Latvia, Bepco Pooling UAB, Lithuania and Bepco Pooling EOOD, Bulgaria.

Bebco OÜ and its subsidiaries are a RPC pooling and rental companies active in Estonia, Latvia, Lithuania and Bulgaria. Bebco OÜ and its subsidiaries have a high market share in the Baltic meat & dairy transport packaging market.

The transaction represents a business combination as defined in IFRS 3.

The amounts recognized in respect of the identifiable assets acquired and liabilities assumed are set out in the table below:

Deferred taxes mainly result from the step up of customer relationships (EURm 5,1) and pooling assets (EURm 1,1).

The consideration transferred is, respectively will be satisfied by cash payments.

The net cash outflows arising from the acquisition will, after all instalments paid amount to the consideration transferred less EURk- 236 cash and cash equivalents acquired.

Details of the consideration transferred are:

Goodwill is attributable to the expected synergies with IFCO Lithuania and synergies with IFCO service / washing center network as well serving other markets in Europe. None of the goodwill is expected to be deductible for tax purposes. The goodwill is attributed to the CGU Europe.

The post-merger integration process is still ongoing. The amount of the acquired RPC pool is measured on a provisional basis, as the validation of RPC existence is ongoing, since the RPCs are moving within the network of customers. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of the acquisition, then the accounting for the acquisition will be revised.

Acquisition related costs amounted to EURk 160.

Bepco OÜ and its subsidiaries contributed EURk 2,826 revenues and EURk 69 to the Group's profit before taxes for the period between the date of acquisition and the reporting date 30 June 2024.

The impact on revenues and the Group's profit if the acquisition had been completed on the first day of the financial year is not disclosed because it is impracticable to determine these amounts. Additionally, these amounts are immaterial for the Group.

IFCO Oricon Co., Ltd.

In FY 2022 IFCO Group acquired 100% of the share capital of IFCO Oricon from Sanko Lease Co., Ltd., Japan. IFCO Oricon was established by Sanko Lease Co., Ltd in the course of the carve out of its entire collapsible RPC pooling business which represented the main asset as at acquisition date and therefore had been guaranteed by the seller to the purchaser IFCO in the share purchase agreement. In line with the agreement the size of the pool acquired had to be verified based on scanning data. In FY 2023 within the true-up period, IFCO Group recognized necessary adjustments to the preliminary purchase price allocation. One adjustment led to the recognition of a receivable with the amount of EURk 13,902, that represented IFCO Group's claim against Sanko for missing crates. In FY 2024 IFCO reached an agreement with Sanko about the missing crates. With this agreement IFCO's RPC claim extinguished and in turn IFCO Group's obligation to pay the holdback amount and part of the outstanding purchase price instalments retired. This led to an income at IFCO in the amount of EURk 5.813 (translated with the JPY average fx rate in FY 2024), which is presented in other income in profit and loss.

Note 5 Revenues

IFCO Group's main revenue stream is the provisioning of pooling equipment in the form of reusable packaging containers ("RPC") for a non-cancellable period of 7-30 days. The rental fee is charged and billed on the issuance of the pooling equipment at the time when the ordered RPCs are received by the producer. As of the balance sheet date IFCO Group recognizes a revenue deferral on a straight-line basis (refer to Note 22).

Other revenue decreased mainly because of the end of waste management services contracts in the UK in December 2023 to a final amount in FY24 of EURk 1,653 (EURk 6,276 in FY 2023), and fuel surcharges related to containers transported of EURk 481 (EURk 5,489 in FY 2023). Furthermore proceeds from sales of rejected containers from other pooling providers amount to EURk 4,094 (EURk 5,313 in FY 2023). Additionally other revenue also contains proceeds from the sale of pallets of EURk 496 (EURk 915 in FY 2023) on which the containers are transported.

Note 6 Other Income

Note 7 Cost of Sales

Logistic fees increased by EURk 93,689 in FY 2024 due to higher retailer volumes. Washing costs increased by EURk 23,339 because of increased wash volumes in FY 2024. Delivery costs rose from EURk 146,279 in FY 2023 to EURk 152,530 in FY 2024; and Collection costs decreased from EURk 126,821 in FY 2023 to EURk 125,821 in FY 2024. The relative low increase in delivery costs and the decreased collection costs mainly resulted on the one hand from cost containment measures in FY 2024. On the other hand costs in FY 2023 had been affected by cost increases and surcharges due to the raising inflation, which wasn't the case in FY 2024 anymore.

Note 8 Selling, General and Administrative Expenses

SG&A costs increased due to increased employment costs, subcontractor and outsourcing as well as transaction and professional fees. These mainly relates to strategic and operational efficiency projects.

Note 9 Employment Costs

Total employment costs amounted to EURk 129,029 in 2024 (EURk 106,097 in FY 2023), thereof social security and retirement benefits of EURk 10,849 (EURk 8,900 in FY 2023).

Note 10 Net Finance Costs

Finance income includes primarily interest income arising from interest-bearing deposits in the amount of EURk 2,300 in FY2024 (EURk 1,924 in FY 2023) interest income from Interest Rate Caps amounting to EURk 3,947 in FY24 (EURk 3,811 in FY23), and gains from the subsequent measurement of bifurcated embedded options from loans and borrowings amounting to EURk 27,590 (EURk 0 in FY 2023). Finance costs regarding interest expense on bank loans and borrowings substantially include interest expenses and transaction costs based on the effective interest method, as well as the modification loss of EURk 29,649 in February 2024. The modification loss mainly comprises the change in the present value of the Euro term loan out of the re-financing. The amendment and extension of the Euro term loan classified as a modification. Thus, the present value of the Euro term loan was re-calculated by applying the former effective interest rate to the new terms and conditions. Additionally, from the cancellation of the USD term loan interest expenses of EURk 1,351 have been incurred. Due to increased market interest rates, as well as the higher utilization of the revolving credit facility, the Groups interest expense was significantly higher in the financial year 2024. Finance costs resulting from Interest Rate Cap amount to EURk 1,000 in FY24 (EURk 1,312 in FY23).

Note 11 Income Tax

11.1 Components of Tax Expense

The applicable tax rate of 24,925% (same as in 2023) used on group level for reconciliation between tax expense and accounting profit before tax is the tax rate applicable for the German fiscal unity in accordance with IAS 12.85. The German Tax rate is used due to the fact that the main assets are located within these entities and the operational headquarters are in Germany. The Luxembourg tax rate is not used as it does not reflect the actual situation and the actual taxation will not occur in Luxembourg. Only the shares of the German entities are held in Luxembourg and no operational business is conducted there. The local tax rates range between 9% (Hungary) to 35% (Argentina).

11.2 Tax reconciliation

11.3 Components of deferred taxes

Deferred tax assets and liabilities shown in the balance sheet are represented by cumulative temporary differences attributable to:

11.4 Movements in deferred taxes

11.5 Tax losses

At reporting date, IFCO Group has unused tax losses of EURk 682,052 (EURk 598,318 in 2023) available for offset against future profits including interest carry forwards of IFCO Management GmbH of EURk 117,288 (EURk 54,244 in 2023) and Irel BidCo SARl Luxembourg of EURk 8,579 (EURk 20,579 in 2023), and IFCO US EURk 33,307 (EURk 15,750 in 2023).

Due to the unpredictability of future profit streams in the relevant jurisdictions, no deferred tax asset has been recognized. As a consequence of this, there remain unrecognized tax losses of EURk 332,264 (EURk 299,785 in 2023) including interest carry forwards of IFCO Management GmbH of EURk 117,288 (EURk 54,244 in 2023) and Irel BidCo SARL Luxembourg of EURk 8,579 (EURk 20,579 in 2023). These unrecognized tax losses - for which no deferred tax asset has been recognized - have several different expiry dates based on local jurisdictions:

The unused tax losses for Germany amounting to EURk 375,793 (EURk 285,631 in 2023) comprise interest carry forwards of EURk 117,288 (EURk 54,244 in 2023) losses for corporate income tax of EURk 92,592 (EURk 68,730 in 2023) as well as losses for trade tax amounting to EURk 18,258 (EURk 13,125 in 2023). The combined tax rate for corporate income tax and trade tax currently stands at 24,925%. This rate is also applicable for interest carry forwards in Germany. The tax rate for corporate income tax is 15,825% and the tax rate for trade tax is 9,1%. In addition to this, special losses were incurred consisting of corporate income tax amounting to EURk 107,834 and trade tax amounting to EURk 39,822. The unused tax losses for Germany arose before the tax group was established. As a consequence, losses are unused as long as the tax group exists.

The amount of net deferred tax assets arising from all entities with negative taxable income (in current or prior year) amounts to EURk 17 (EURk 0 in 2023).

At reporting date, temporary differences related to investments in subsidiaries for which deferred tax liabilities have not been recognized in the financial statements are EURk 18,999 (EURk 8,502 in 2023).

11.6 BEPs

Based on the OECD BEPS project to combat tax avoidance by multinational companies in the form of profit shifting and profit reduction, the so-called OECD/G20 Inclusive Framework (an association of approx. 140 countries) decided to introduce a global minimum taxation with the objective that multinational companies are subject to a minimum taxation of 15% in their respective countries of operation. In December 2021, the Organization for Economic Cooperation and Development (OECD) published so-called OECD Model Rules, which serve as a legislative template for implementation into national law, followed by guidance, commentary and interpretative guidance published in March 2022.

All disclosures in the notes in connection with the BEPS Pillar 2 regulations were determined on the basis of the OECD model rules and guidelines. According to the BEPS Pillar 2 regulations, the Irel BidCo SARL based in Luxembourg is deemed to be the ultimate parent entity, The regulations on global minimum taxation have been transposed into national law in Luxembourg. On June 12, 2024, a draft law was published to implement additional elements of the OECD administrative guidelines and to amend some existing provisions.

The implementation that has already taken place in Luxembourg and the current German draft law are closely aligned with the OECD's model rules and guidelines and are essentially comparable with them.

The Group falls within the scope of the BEPS Pillar 2 regulations and the first year of application will be fiscal year starting on 1 July 2024 and ending on 30 June 2025.

As at the reporting date, IFCO Group carried out an initial indicative analysis to determine the basic impact and the jurisdictions from which the Group is exposed to possible effects in connection with a Pillar 2 top-up tax.

The first step was to check whether the transitional safe harbor regulations were relevant. If a country was not excluded from the Pillar Two calculation after checking the safe harbor regulations (i.e., in case a jurisdiction does not meet at least one the three (3) test of the transitional safe harbors), the effective tax rate was calculated on a simplified basis.

This initial indicative analysis did not identify any countries from which the IFCO Group would be affected by a Pillar 2 top-up tax. It is therefore currently assumed that there is no impact with regard to the Pillar 2 top-up tax based on the most available data as of fiscal year 2023.

Since the assessment of the safe harbor rules should be performed with data of fiscal year 2024, IFCO`s management will continue to update the estimations as well as monitor the progress of the legislative process in each country in which the Group operates. The Group will report the position of the IFCO Group in the consolidated financial statements for the year ending 30 June 2025.

Note 12 Cash and Cash Equivalents

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:

Cash and cash equivalents mainly consist of cash held in banks. EURk 132,461 (EURk 83,839 in FY 2023) of the cash and cash equivalents are pledged as a security for the loans. Nevertheless, these balances are not restricted and are used for daily cash disposition.

Note 13 Trade and Other Receivables

Trade receivables are recognized when services are provided, and the settlement is expected within normal credit terms. Trade receivables are non-interest bearing and are generally on 15-45-day payment terms with some exceptions up to 90 days for specific businesses.

Others mainly include debtors with credit balances.

Other debtors include marketing reimbursements and supplier with debit balances. In FY23 an Interest Rate Cap in the amount of EURk 4,676 was presented in other debtors, which is in FY 2024 presented in other current financial assets as comparative number.

For trade and other receivables classified as financial assets please refer to Note 28.

Note 14 Deposit Receivables

The deposits are charged to customers based on contractual agreements. These deposits are invoiced on issue of pooling equipment to customers and are generally on 30-day payment terms. A large amount of these receivables is settled with credit notes to the customer, once the pooling equipment is returned.

For deposits classified as financial assets please refer to Note 28.

Note 15 Prepayments

Other assets are stated at cost less impairment losses. Current other assets primarily include prepayments with a term shorter than one year. The increase is mainly due to additional pre-payments in Europe connected to retailer contracts.

Note 16 Current Tax Assets and Liabilities

Current tax assets mainly include corporate income tax (CIT) receivables from Chile and Colombia.

Current tax liabilities reflect outstanding obligations for corporate income taxes (CIT).

Note 17 Property, Plant and Equipment

The net carrying amounts and movements during the year are described as follows:

Pooling equipment is subject to operating lease and used to generate rental income by providing pooling equipment in form of RPCs to customers for a short period (refer to Note 24).

Pooling equipment additions are classified for cash flow reporting purposes as maintenance investment to replace lost or broken RPCs, and growth investment into RPCs to increase the business (refer to Cash Flow Statement).

Note 18 Goodwill and Intangible Assets

18.1 Net carrying amounts and movements during the year

18.2 Goodwill and intangibles assets with indefinite useful lives

Goodwill represents the excess of the cost of the acquisition over the fair value of the net identifiable assets of the acquired IFCO Group at the date of acquisition. The Goodwill on the acquisition of IFCO is included in intangible assets. Goodwill is carried at cost less accumulated impairment losses and is not amortized. The brand "IFCO" with an indefinite useful live, and fully attributable to CGU Europe is tested for impairment as part of the goodwill impairment test for CGU Europe.

Upon acquisition, any goodwill arising is allocated to each group of Cash Generating Unit (CGU) expected to benefit from the acquisition. Consequently, goodwill is disclosed at the lowest CGU group level at which it is assessed for impairment:

IFCO Group has performed the mandatory annual impairment test as of June 2024. The development of the operating segments (actuals vs forecast) is considered when reviewing for indicators of impairment. As at 30 June 2024, the recoverable amounts for the impairment test FY 2024 of IFCO Group's CGUs were above the corresponding carrying values. Key assumptions on which IFCO Group based its calculation of the fair value less costs of disposal (FVLCD) for each of the CGUs include the terminal value growth rates and after-tax discount rates. The model's underlying free cash flow projections for each individual CGU comprises a period of 5 years starting FY2024 based on the management's forecast and include the full set of projected cash in- and outflows resulting from operating activities such as functional costs, overheads, maintenance capital expenditures (CAPEX), and proceeds from disposals. In addition, the forecast adds growth in pooling equipment CAPEX in relation to growth in operating business complementing the cash outflows from investing activities. The determined fair value of the cash generating units is assigned to level 3 of the fair value hierarchy.

The fair value less costs to sell is mainly driven by the terminal value which is particularly sensitive to changes in the assumptions on the terminal value growth rate and discount rate. Both parameters are determined for each CGU individually.

The CGU specific discount rate is based on the weighted average cost of capital (WACC). The WACC takes into account both debt and equity. Cost of equity is calculated by using the Capital Asset Pricing Model ("CAPM") which comprises the determination of the risk-free rate of interest and the market risk premium. In addition, the underlying discount rates reflect the most recent market assessment of the risks specific to each CGU by considering specific peer group information on beta factors, leverage and cost of debt. The parameters for calculating the discount rates are based on external sources of information and the peer group is updated annually.

Terminal value growth rates take into consideration the area's macroeconomic environment and industry specific trends. IFCO Group estimates its market growth in North America with a terminal growth rate of 1.5% (1.5% in FY 2023) and in South America with a terminal growth rate of 2.0% (2.0%inFY 2023) annually. The sales growth in Europe is being considered with an average growth rate of 2.0% (2.0% in FY 2023) on an annual basis. Asia ́s terminal growth rate is estimated at 1.5% (1.5% in FY 2023) on average.

The following table displays key parameters used to determine the value in use for impairment test purposes of the CGUs to which a material amount of goodwill is allocated:

^* The Group applied post-tax discount rates for discounting post-tax cash flows leading to the same result as by using pre-tax data. Sales in all CGUs' planning periods are based on annual average growth rates of about 4.9% for Europe (5.4% in FY 2023) and 12.2% for North America (12.5% in FY 2023) as well as 9.2% for South America (4.7% in FY 2023) and 6.9% for Asia (8.1% in FY 2023). IFCO Group expects a stable contribution to annual sales growth throughout the 5-year planning period from every CGU.

The Group concluded that no impairment is to be recognized on goodwill in any of the CGUs.

A sensitivity analysis has been conducted in order to check the robustness of the underlying impairment test. The assessment is based on a reduction in after-tax future cash flows by 10% (Scenario 1) or a limitation in terminal value growth at 1% (Scenario 2) or an increase in after-tax discount rates by 1% (Scenario 3). IFCO Group observed that no impairment loss would have to be recognized in each of the scenarios. Even in the worst Scenario, the headroom across all CGUs is still approximately EURk 1,237,240 of the carrying amount of all CGUs. The calculation of fair value less costs of disposal (FVLCD) is most sensitive - especially for the terminal value - to the assumptions of growth rate and maintenance capex referring to the RPCs. Regarding the growth rate assumption throughout the 5-year planning period for each CGU we refer to the paragraph above. These growth rates are the starting point for the terminal value growth. If the growth rate for CGU Asia would be 5.5% rather than 6.9% the IFCO Group will have an impairment. The RPC maintenance capex is among others necessary to maintain the RPC capacity to generate the expected revenues. IFCO Group estimates in certain CGUS to have lower maintenance capex than depreciation charges due to RPC utilization optimization measures. IFCO group considers a growth capex on top of maintenance capex, which is in the terminal value twice the amount of EBITA growth in terminal value. For CGU Asia IFCO group considers a maintenance capex approximately in line with depreciation. However, would growth capex in TV be EURk 4.000 rather than EURk 0 the IFCO Group will have an impairment. However, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of any CGU to materially exceed its recoverable amount.

Note 19 Other assets

Non-current other assets mainly consist of long-term prepayments amounting to EURk 26,632 in FY24 (EURk 8,765 in FY23). In FY23 an Interest Rate Cap in the amount of EURk 2,682 was presented in other assets, which is in FY 2024 presented in other non-current financial assets as comparative number.

Note 20 Trade and Other Payables

Trade and other payables represent liabilities for goods and services provided to IFCO Group prior to the end of the financial year that remain unpaid at the reporting date. The amounts are unsecured, non-interest bearing and are settled within normal credit terms of 14-60 days. Moreover, they include liabilities for logistic services remuneration subject to the handling of RPCs.

Accruals consist of employee related obligations which are compulsory payments to employees in the event of leaving the company, sick leave, vacation or other similar matters.

Unpaid capex creditors include the liabilities to manufacturers of the RPCs.

Other current payables include mainly accounts receivables with credit balances amounting to EURk 85,830 (EURk 62,151 in FY 2023) and liabilities for other taxes of EURk 3,560 (EURk 3,364 in FY 2023).

VAT payables and accruals are not classified as financial liabilities in accordance with IFRS 9. For trade and other payables classified as financial liabilities please refer to Note 28.

Note 21 Refundable Deposits

Deposits are charged to producers based on contractual agreements on issue of pooling equipment. Refundable deposits are accrued based on the number of RPCs outstanding. Deposits paid by producers are accounted for as financial liability under trade and other payables.

Note 22 Deferred Revenue

Deferred revenue primarily relates to revenue that is invoiced at the issue of pooling equipment to customers. It is recognized in the statement of comprehensive income over the rental period (up to 30 days).

Note 23 Current financial liabilities

Accrued interests and fees relate to loans and borrowings. Terms of payment vary between one month and six months. Commitment fees are accrued in line with the terms and conditions set out in the Revolving Credit Facility (RCF). For the conditions of the interests please refer to Note 27.

In the financial year 2023, IFCO entered into two interest rate cap hedges. The company hedged USDk 100,000 at 3% per annum rate of its tranche B2 USD loan effective from 1 July 2023 until 29 July 2024. Premiums had been scheduled for 29 January and 29 July 2024 with USDk 446 respectively.

Additionally, IFCO also hedged EURk 500,000 at 2,75% per annum of its B1A EUR loan effective from 9 January 2023, which was settled in May 2024. Premiums had been scheduled every six months effective from starting date with an amount of EURk 1,080,000.

Furthermore, an Interest Rate Cap of Mio. USDk 100,000 at 2,75% 6-month-LIBOR expired on 30 June 2023.

All Interest rate caps had been prematurely closed with the banks in May 2024.

For the Interest Rate Cap IFCO accrued interests in the amount of EURk 0 in FY 24 (EURk 2,531 in FY 23).

Note 24 Leases

24.1 Group as a lessee

a) Right-of-use assets

Set out below are the carrying amounts of right-of-use assets recognized and the respective movements during the period:

IFCO does not have low value assets recognized through profit and loss.

b) Lease liabilities

Set out below are the carrying amounts of lease liabilities (included in Note 27 interest-bearing loans and borrowings) and the respective movements during the period:

The following are the amounts recognized in profit or loss:

The Group had total cash outflows for leases of EURk 219,813 (EURk 204,750 in FY 2023).

As of 30 June 2024, there are no leases that have not yet commenced to which the Group is committed. Extension options of five years for building and property leases expiring in the period between 2027 until 2029 would lead to a lease liability by EURk 6,401 year by year.

The following table provides information on the Group's variable lease payments, including the magnitude in relation to fixed payments:

Variable lease payments are payments by the Group to third party washing centers which are presented as "Washing costs" as part of the Cost of Sales (refer to Note 7). The washing centre contracts constitute lease arrangements with IFCO companies as lessees under IFRS 16 but are considered fully variable.

The future cash outflows regarding variable lease payments over the course of the next four years to which the Group is potentially exposed to amount to EURk 1,455,793 (EURk 1,007,377 in FY 2023).

24.2 Group as a lessor

Revenue from leases recognized by the Group during the year was EURk 1,585,394 (EURk 1,372,278 in FY 2023). Please refer to Note 5 for disclosure of IFCO Group's sales. As the lease term is in all cases only up to 30 days a maturity analysis of future cash flows is non-informative.

For the assets subject to leases please refer to Note 24.

Note 25 Provisions

A provision is recognized for employee bonuses consisting of variable payments as part of the total remuneration of employees, due next fiscal year closing and measured at best estimate.

Non-current provisions include long-term employee bonuses which are measured at best estimate.

Note 26 Other liabilities

Non-current liabilities from Interest Rate Cap agreements in the amount of EURk 1,465 for FY23 are presented in non-current financial liabilities.

Note 27 Interest-bearing loans and Borrowings

At reporting date, the bank loans amount to EURk 1,697,222 (EURk 1,531,477 in 2023) and include substantially the facilities which have been raised in the course of the acquisition of IFCO Systems B.V. in 2019:

On February 26, 2024, the contractual parameters for the Facility B1A, now facility BB, were adjusted, leading to an increase in nominal amount from EURk 1,292,225 to EURk 1,640,000 and interest rate margin from 3,5% to 4%, as well as a contract extension from May 2026 to November 2029. In addition, the Facility B2 was fully repaid, and the committed amount of the revolving credit facility increased to EURk 310,000.

Applying the 10% test, the changes were considered to be non-substantial. Accordingly, the amortized cost where adjusted to the present value of the cashflows of the modified loan using the historic effective interest rate, which lead to an interest expense in the statement of comprehensive income in the amount of EURk 29,649. The loss on extinguishment of the Facility B2 loan in the amount of EURk 1,351 was recognized in the interest expense in the statement of comprehensive income. Transaction cost charged by the lenders are considered in the above mentioned present value calculation. Transaction cost against third parties were proportionally allocated to the EUR term loan in the amount of EURk 3.203 and to the RCF in the amount of EURk 606. In case of the term loan, the transaction costs are deducted from the loan and are amortized applying the effective interest rate method until maturity. The transaction costs relating to the RCF are deferred and linearly amortized until the maturity date of the contract.

The contract contains embedded derivatives that are bifurcated. The bifurcated derivatives are a Floor for the variable EURIBOR interest rate at a level of 0%, a voluntary prepayment option at 101% at IFCO's own discretion and a change of control put option at 100% for the lenders. In previous year the embedded derivatives have not been accounted for due to materiality reasons. After the modification, the fair value increased so that the embedded derivatives were initially recognized on the date of the modification. The modification led to a modification gain amounting to EURk 27,590 recognized in finance income in the statement of profit or loss.

In relation to these loans, cash and cash equivalents amounting to EURk 132,461 (EURk 83,839 in FY 2023) are pledged as a security. Furthermore, investments (shares) in consolidated subsidiaries are pledged as a security, but out of the consolidation process these investments are not recognized in the group financial statements.

Financial covenants don't exist for the facilities that are in use as of 30 June 2024 and before. The financial covenant becomes effective if the used amount of the Revolving facility minus Cash and Cash equivalents exceeds 40% of amount of the Revolving facility. So far, the Group has reporting requirements only.

Set out below is the reconciliation between the opening and closing balances for liabilities arising from financing activities:

The position others mainly include new leases which are not cash neutral as well as currency effects.

Note 28 Financial Instruments

28.1 Fair value and fair value measurement

The following table provides the fair value measurement hierarchy of the Group's financial instruments and a comparison, by class, of the carrying amounts and fair values, other than those with carrying amounts that are reasonable approximations of fair values. Except for the investments that are measured at fair value through profit or loss, none of the Group's financial assets and liabilities are measured at fair value and the Group's liabilities are only measured at fair value for disclosure reasons.

The Group's total financial assets include only trade and other receivables, cash and cash equivalents. These trade receivables, cash and cash equivalents are debt instruments accounted for based on amortized cost. For trade and other receivables refer to Note 13, for deposit receivables refer to Note 14 and for cash and cash equivalents refer to Note 12.

For trade and other payables refer to Note 20, for refundable deposits refer to Note 21, for lease liabilities refer to Note 24, for interest bearing loans and borrowings refer to Note 27.

The management assessed that the fair values of cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair values of the Group's interest-bearing loans and borrowings are determined by using the discounted cash flow (DCF) method using the respective discount rate for each cash flow that reflects the issuer's borrowing rate as at the end of the reporting period. The own non-performance risk as at 30 June 2024 as well as at 30 June 2023 was assessed to be insignificant.

Interest-rate derivatives designated in cash flow hedge accounting are allocated to fair value hierarchy level 2. They are valued applying a DCF methos using only observable input parameters in the form of market interest rates. The bifurcated embedded derivatives from interest-bearing loans and borrowings are allocated to Level 3 in the fair value hierarchy. The unobservable input for the valuation model is the implicit volatility of the refinancing rate of IFCO, an option-adjusted credit spread, and the change of control probability. The embedded options are valued applying an interest rate term structure model using a lattice approach.

The following tables show a reconciliation of the fair value allocated to Level 3 of the fair value hierarchy per instrument type:

In line other in FY 2024 the amount of EURk 8,537 is added to the notional amount of the loan Facility B1A, since this change in fair value of the embedded derivatives is affected by the modification of the Facility B1A agreement.

There have been no transfers of financial instruments between fair value hierarchy levels.

28.2 Hedge Accounting

Derivative financial instruments (interest-rate swaps) are used to hedge the interest-rate risk arising from the floating interest rate concluded in the interest-bearing loans and borrowings. The interest rate swaps amounting to a notional of EURk 1,000,000 and hedges therefore a portion of approximately 61% of the term loan. The interest rate swaps period begin in July 2024 and mature in July 2026, covering exactly the same 6 months interest periods as the EUR term loan. Hedge effectiveness is demonstrated applying the critical terms match method and retrospective testing of effectiveness, whereas going forward, material ineffectiveness will lead to interest expenses. Changes in the hedging instrument based on the credit risk are a possible source of ineffectiveness. However, changes based on the credit risk were not material.

The following table presents the changes in the hedge reserves in the other comprehensive income. Reclassifications from the hedging reserve were recognized in the interest expense, i.e. in the same line item that also contains the profit or loss from the hedged item.

In the current reporting period, no ineffectiveness occurred (EURk 0 in FY 2023).

28.3 Total interest income and expense

Interest income and interest expense are calculated by applying the effective interest rate to the gross carrying amount of financial assets and financial liabilities both at amortized cost.

Total interest income and expenses relating to financial instruments are as follows:

28.4 Net gains and losses

The table below shows the net gains or losses of financial instruments included in the consolidated statement of income:

28.5 Risk management

a) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and foreign currency risk. The sensitivity analyses in the following sections relate to the position as at 30 June 2024 and 30 June 2023.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relate primarily to the Group's long-term debt obligations with floating interest rates.

IFCO Group's exposure to potential volatility in interest expense is managed by maintaining a mix of floating rate instruments within select target bands over defined periods and by entering into interest rate hedges.

The financial instruments exposed to interest rate risk at reporting date include interest-bearing loans and borrowings amounting to EURk 1,697,222 as of 30 June 2024 (EURk 1,531,477 in FY 2023).

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Group's profit before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

c) Foreign currency risk

Exposure to foreign currency risk generally arises from transactions denominated in a currency other than the functional currency of a subsidiary.

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities.

Foreign currency profile

The following table sets out the foreign currency mix profile of IFCO Group's financial instruments at reporting date. Financial assets include cash and cash equivalents and trade receivables. Financial liabilities include trade and other payables, interest-bearing loans and leasing liabilities.

Sensitivity analysis

Based on the financial instruments held at 30 June 2024 and 30 June 2023, if exchange rates were to weaken/strengthen against the Euro by 10% with all other variables held constant, the transaction exposure within profit before tax would be:

d) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. IFCO Group is exposed to credit risk on its financial assets, which comprise cash and cash equivalents, trade and other receivables. The exposure to credit risks arises from the potential failure of counterparties to meet their obligations. The maximum exposure to credit risk at the reporting date is the carrying amount of the financial instruments.

Cash and cash equivalents

Since IFCO Group only cooperates with well-known credit-worthy banks, expected credit losses were not recorded due to immateriality. Furthermore, these financial assets are highly liquid and flexible and therefore can be easily accessed by IFCO Group.

Trade and other receivables

Customer credit risk is managed by each business unit subject to the Group's established policy, procedures and control relating to customer credit risk management.

IFCO Group trades only with recognized, creditworthy third parties. Customers are subject to credit verification procedures including an assessment of their independent credit rating, financial position, past experience and industry reputation. Credit limits are set for individual customers and approved by credit managers in accordance with an approved authority matrix. These credit limits are regularly monitored and revised based on historic turnover activity and credit performance. In addition, overdue receivable balances are monitored and actioned on a regular basis.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product type, customer type and rating, and coverage by letters of credit or other forms of credit insurance). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. The Group does not hold collateral as security. The letters of credit and other forms of credit insurance are considered integral part of trade receivables and considered in the calculation of impairment. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Set out below is the information about the credit risk exposure on the Group's trade receivables using a provision matrix:

The expected credit losses are determined based on a provision matrix supplemented by a case-by-case analysis based on objective evidence of impairment. The latter leads to expected credit losses amounting to EURk 8,604 (EURk 6,551 in FY 2023), including a credit impairment of EURk 1,828 (EURk 1,081 in FY 2023).

Set out below are the movements for loss allowance for expected credit losses during the period:

e) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its obligations when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group monitors its risk of a shortage of funds using a liquidity planning tool. The Group's objective is to maintain a balance between continuity of funding and flexibility by using bank overdrafts, bank loans and lease contracts. The Group assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Group has access to a revolving credit facility (RCF), which is an approved but not yet fully executed loan. The RCF comprises EURk 310,000 and can be drawn in case of liquidity needs.

The table below shows the undiscounted future cash flows of interest and repayment of the Group's financial liabilities based on contractual terms:

Note 29 Equity

29.1 Subscribed capital

Irel BidCo SARL (BidCo) was incorporated on 7 February 2019, with a subscribed capital of EUR 12,000 represented by 1,200,000 common shares with a nominal value of EUR 0.01. The subscribed capital is fully paid in.

29.2 Capital reserve

The sole shareholder of Irel BidCo SARL (BidCo) has contributed EURk 843,086 to the capital reserve in the course of the acquisition of IFCO Group.

29.3 Legal reserve

According to the articles of association of Irel BidCo SARL (BidCo) each year 5% of the net profit based on statutory accounts shall be allocated to the legal reserve. The allocation ceases to be compulsory when the legal reserve amounts to 10% of the issued subscribed capital. In prior years and as of 30 June 2024, no net profit was achieved.

29.4 Translation reserve

The translation reserve comprises all foreign currency translations arising from the financial statements of foreign subsidiaries.

The translation reserve is mainly based on the currency conversion of US Dollar and Japanese Yen.

29.5 Other Reserve

The Other reserves includes effects of Hyperinflation Accounting according to IAS 29, which have been posted for the first time in the financial year 2023.The total amount recognized of EURk 11,507 is composed of EURk 12,212 and EURk -705 for Turkey and Argentina respectively. Within our other reserves, as disclosed in Note 28, we also include hedging reserves related to our derivative financial instruments (cash flow hedges).

29.6 Total comprehensive income

Total comprehensive income includes the translation reserve and is attributable to the shareholder of the parent and the hedge reserves.

Note 30 Management Equity Plan

Individual executives, members of the Advisory Committee of IFCO Group as well as selected other individuals indirectly hold shares of approx. 0.7% in the capital of IFCO Group through an indirect participation in Irel MidCo SARL. In accordance with IFRS 2.43B (b) in combination with IFRS 2.3a this program represents a share-based payment by means of equity instruments. In the event of retirement from active work for IFCO Group, the conditions of the participation program provide the manager to leave the participation program if this is desired by the shareholders. The repurchase price of the shares is determined by contractually agreed so-called "leaver" regulations. Their application depends on the type of leave from IFCO Group. The repurchase price is determined according to this mechanism in the range between the originally paid-in capital and the market value of the shares to be redeemed. The indirect participation in IFCO Group was acquired by the executives participating in the program at the respective fair value of the shares at the time of participation. The total number of individual executive's shares as at 30 June 2024 amounted to 2,070,215 (as at 30 June 2023:2,198,344). In FY 2024 additions amounted to 241,023 (in FY 2023:142,006) and disposals amounted to 369,152 (in FY 2023: 121,318).

Note 31 Commitments

Capital expenditure (CapEx), principally relating to property, plant and equipment, contracted for but not recognized as liabilities at reporting date was as follows:

Note 32 Contingencies

IFCO Group's activities entail the usage, handling and storage of materials which can cause disposal or remediation obligations in order to comply with internal and environmental regulations. Costs incur along the supply chain associated with environmental remediation of the Group's operating premises, disposal of assets, aftercare, monitoring and licensing. The Group assesses whether provisions are to be recognized by providing the best estimate of a potential obligation at balance sheet date. As of 30 June 2024, the company is not aware of any contingent liability due to remediation or disposal.

Additional liabilities may emerge due to several factors including changes in the numerous laws and regulations which govern environmental protection, liability, use of land, planning and other matters in each jurisdiction in which the Group operates or has operated. These extensive laws and regulations are continually evolving in response to technological advances, scientific developments and other factors. The Group is limited in predicting the extent to which it may be affected in future. However, no additional liabilities arising from the factors as described were identified at balance sheet date.

The Group may become a target in litigation because of legal disputes with stakeholders arising from business activities. In this case the company recognizes provisions for potential obligations when appropriate and if, the existence of the liability is sufficiently probable and reliably measurable. Receivables are recognized if there is insurance coverage and the recovery is deemed to be virtually certain. Contingent liabilities may exist for any amounts owed in excess to the amounts accrued. As of 30 June 2024 the Group has not identified contingent liabilities associated with litigations.

Note 33 Related Party Information

33.1 Group

Borrowings under the bank credit facilities are undertaken by a limited number of BidCo's subsidiaries. Funding of other subsidiaries within BidCo is by way of intercompany loans, which are generally documented and carry commercial interest rates applicable to the currency and terms of the loans.

Irel BidCo SARL acts as a holding company for the group whereby the other subsidiaries of the group comprise for the most part operating activities regarding the organization and administration of the rental, distribution, and purchase of reusable packaging containers (RPC).

BidCo's group of companies are a party to cost sharing agreements to ensure that relevant costs are taken up by the entities receiving the benefits.

All amounts receivable and payable by entities within IFCO Group and any interest thereon are eliminated on consolidation.

33.2 Entities

^* Company meets the requirements of Section 264 (3) respectively section 264b of the German Commercial Code (HGB) and exercises the option to be exempted from certain requirements on the preparation and disclosure, audit and publication (section 316 and 325 respectively of the German Commercial code) of the annual financial statements and the management report.

Investments in the above entities are primarily by means of ordinary or common shares.

The parent of Irel BidCo SARL is Irel MidCo SARL and the ultimate parent is Irel JVCo SARL. The Group's former subsidiaries, IFCO Systems B.V. and IFCO Systems Luxembourg S.à r.l. as well as IFCO SYSTEMS US Holdings B.V. have fully merged into Irel BidCo SARL.

The following subsidiaries

prepare accounts with a 31 December balance date due to local legal requirements. All other entities prepare accounts with a 30 June balance date.

Furthermore IFCO Japan, Inc holds minor interest investment amounting to EURk 29 (45%) in Kyoto Seika Godo Co Ltd as of 30 June 2024. IFCO Japan, Inc is neither exposed to variable returns from its involvement with the investee nor has IFCO Japan, Inc the ability to affect those returns through its power over the investee. Hence, Kyoto Seika Godo Co Ltd is not included in the consolidated financial statements of the Group.

33.3 Transactions

There have been no contractual deliveries and services provided to related parties which are as well associated companies and/ or joint ventures of Triton and ADIA.

Funds managed by Triton and the Abu Dhabi Investment Authority are the major indirect shareholders of the ultimate parent company.

Two individual executives of IFCO Group entered into an exit bonus agreement with Irel MidCo SARL, with signing date 22 May 2024 and 26 July 2024. The remuneration out of these agreements is derived from the Multiple on Invested Capital (MOIC) in the event of a sale of IFCO Group. According to IFRS 2.3a these agreements represent an equity settled share-base agreement at the level of IFCO Group. The grant date fair value of each of the agreements will be recorded on a straight-line basis as personnel expenses with corresponding entry in equity over the service period of the two individual executives until an expected exit event. The bonus payment is staggered at certain MOIC thresholds. There is minimum MOIC threshold (hurdle) to be reached to receive a bonus payment. In general, Irel MIdCo SARL is allowed to decide on the payment of an exit bonus on its own reasonable discretion. The payment of the exit bonus is capped at a certain amount. The agreements contain "leaver" regulations, which set out conditions whether to obtain any bonus at all but have no impact on the amount of the exit bonus. Key valuation parameter for determining the grant date fair value of the two agreements is the future sales price which is directly affecting the MOIC and accordingly the exit bonus payment. An additional key valuation parameter, effecting the expense to be posted in the respective periods after signature date, is the expected exit date. Both parameters can currently not be reliably estimated. IFCO Group assessed the sensitivity of the parameters by considering MOIC hurdle for the expected exit bonus payment and an exit date in at least 1,5 years' time in order to take into account a reasonable timeframe for all required exit process activities in case an exit process would start within the upcoming weeks. Even in this scenario, the effect on FY 2024 Group's Financial Statements is not material.

The agreement signed on 26 July 2024 is a subsequent event with no direct impact on the financial statements in FY 2024.

Terms and conditions of transactions with related parties

Sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

Compensation of key management personnel

There has been no key management personnel compensation at the level of Irel BidCo SARL for the year ending 30 June 2024. On the group management level for the period ending 30 June 2024, there have been a compensation of key management personnel amounting to EURk 3,554 (EURk 2,072 in FY 2023) consisting of a base salary of EURk 2,067 (EURk 1,457 in FY 2023), a variable part of EURk 1,405 (EURk 579 in FY 2023) and social security expense of EURk 82 (EURk 36 in FY 2023). Key management personnel include the Chief Executive Officer, the Chief Financial Officer and beginning in FY24 onwards additionally new Chief Operating Officer and new Chief Digitalization Officer.

Note 34 Capital Risk Management

For the Group's capital management, capital includes shareholder funds and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group's capital management is to maximize the shareholder value.

The Group manages its capital structure and adjusts it considering changes in economic conditions and the requirements of the financial covenants.

Maintenance

To maintain or adjust the capital structure, the Group may inquire capital contributions from shareholders.

Monitoring

The Group monitors capital using a gearing ratio, which is 'net debt' divided by total capital plus net debt. The Group includes within net debt, interest bearing loans and borrowings including lease liabilities, trade and other payables, less cash and cash equivalents.

No changes were made in the objectives, policies or processes for managing capital during the period ending 30 June 2024.

Note 35 Group Auditor's Remuneration

For the financial period ending 30 June 2024, the expensed fees for the auditor and its affiliates of the consolidated financial statements amounted to a total of EURk 1,290 (EURk 1,062 in FY 2023) which are attributable to audit services. Non-audit fees summing up to EURk 360 in FY 2024 (EURk 91 in FY 2023).

Note 36 Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of IFCO Group's financial statements are disclosed below. IFCO Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. However, these adjustments are not expected to have a material impact on the consolidated financial statements of IFCO Group.

Note 37 Events After Balance Sheet Date

An individual executive of IFCO Group entered into an exit bonus agreement with Irel MidCo SARL, with signing date 26 July 2024. The remuneration out of these agreements is derived from the Multiple on Invested Capital (MOIC) in the event of a sale of IFCO Group. For more information we refer to Note 33.3 Transactions.

Except the above-mentioned agreement, no material events have occurred since the closing date that would necessitate adjustments or additional disclosures in the financial statements.