4iG : FLASH REPORT ON THE COMPANY’S ACTIVITIES FOR THE FIRST QUARTER OF 2024

CONSOLIDATED

financial report Q1 2024

Q1

2024

31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

4iG PLC

FLASH REPORT

ON THE COMPANY'S ACTIVITIES FOR THE FIRST QUARTER OF 2024

31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

CONTENTS

EXECUTIVE SUMMARY	3
Consolidated statement of comprehensive income	7
Consolidated statement of financial position	9
Consolidated statement of changes in equity	10
1.	General section	11
1.1.	Presentation of the company	11
1.2.	General information about the issuer	11
2.	Share information	12
3.	Ownership structure	13
4.	Officials	13
4.1.	Company management	13
4.2.	Remuneration of officials	14
4.3.	4iG shareholdings of senior executives as of 31 March 2024	14
4.4.	Persons authorised to sign the statements	14
4.5.	Election and dismissal of senior executives	14
4.6.	Powers of officials	14
4.7.	Amendment of the Articles of Association	14
5.	Basis of preparation of the balance sheet	15
6.	Adjustment of previous year's financial data	16
7.	Subsidiaries included in the consolidation	20
8.	Events after the balance sheet date	21
9.	Statement	23

The Report was approved by the Board of Directors of the Company by written resolution on 30 May 2024, by virtue of the Board of Directors' Resolution No. 1/2024 (05.30.).

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31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

EXECUTIVE SUMMARY

Introduction

In the first quarter of 2024, 4iG Group (hereinafter referred to as '4iG', 'the Company', 'the Corporation', 'Corporate Group', 'Company Group', 'Group', '4iG Plc') continued its organic growth and is progressing according to plan with the implementation of the transformation program launched in the fall of 2023, which affects the telecommunications and IT business units of the Group. The restructuring of the Company Group's operation and corporate structure into commercial and infrastructure companies will create opportunities in the future for the sale of minority business shares in network and mobile infrastructure, expansion of wholesale activities, enhancement of the Group's competitiveness, reduction of debt levels, and thus further growth and significant infrastructure developments. As part of the transformation program, the first quarter saw the beginning of the structural separation of DIGI Távközlési és Szolgáltató Kft. (DIGI) and Invitech ICT Services Kft. (Invitech). In addition, the Group launched a new holding company, 4iG Űr és Technológiai Zrt. (4iG S&T), aimed at coordinating and vertically integrating its capabilities in the space, technology, and defense digitalization sectors.

During the first quarter, the Group advanced the development of collaboration details with Telecom Egypt concerning the planned high-bandwidth submarine data cable investment between North Africa and Albania. The 4iG Group signed a memorandum of understanding regarding the investment with the Albanian government.

Hungary

As part of its transformation program, on 21 February, 4iG established 4iG Űr és Technológiai Zrt., which consolidates the Group's space industry and digitalization portfolio. With the restructuring, the newly founded company will take over the coordination of capabilities in space and satellite manufacturing, the development and production of autonomous flight systems, drone defense, and the defense digitalization. The establishment of the new company facilitates more efficient management of complex projects, enhances the capacities of the Group, and aids in realizing the business and strategic objectives set together with the 4iG's strategic partner, Rheinmetall. Concurrently with founding the company, 4iG also preliminarily announced its plan to raise capital to acquire 45% of REMRED Technológiai Fejlesztő Zrt.'s shares (the definitive agreement on this transaction was signed by the parties on 2 May 2024). The acquisition aims to establish the space technology production center planned by REMRED Zrt. in Martonvásár, where the design, manufacturing, and assembly of satellites up to 400 kilograms will start from 2026. By establishing the space technology production center and vertically integrating its space and technology portfolio, 4iG is set to become a unique player in the Central and Eastern European market. The 4iG Group, through its acquisition and greenfield investment, is broadening its operational range and entering the international manufacturing sector following its ventures in IT and telecommunications. The creation of manufacturing capabilities will enable the group to generate its own innovative technologies that will enhance earth observation facilities, develop satellite communications, and contribute to the digitization of modern warfare, especially catering to the requirements of EU and NATO members.

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31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

For the first time in Hungary, 4iG Group is set to implement the Elisa Polystar automated network management and monitoring software system. As per the agreement reached on 27 February with the Finnish-origin telecommunications software company, the Company plans to construct an open architecture that collects data from various network sources and allows for their integrated management. This rollout, which is based on the Zero-Touch NOC product, is part of the separation process from Vodafone Hungary's former parent company, aimed at enhancing network operations and improving customer experience.

On 14 March, 4iG Group's transformation program achieved a significant milestone by organizing the infrastructure activities of DIGI and Invitech into separate entities. Despite the ongoing restructuring, both residential and business customers will continue to receive services from these companies seamlessly. As part of the transformation, DIGI's telecommunications infrastructure will be moved to D-Infrastruktúra Távközlési Kft., and Invitech's to Invitech ICT Infrastructure Kft.

International collaborations

After their memorandum of understanding in October, 4iG Group formalized a preliminary agreement on 1 February with Telecom Egypt about the transcontinental data cable system planned between Egypt and Albania. To carry out the investment, the parties agreed to form a joint project company and have outlined the business conditions and operational steps for the investment. Once operational, this project company will also manage the sales and commercial operations of the system capacities. The new submarine cable system will serve as an alternative to the current Mediterranean links connecting Egypt with Italy and France and could be expanded in the future to include key destinations like Libya, Cyprus, Greece, or Italy along an optimized sea route. Initially, the system will also feature a branch to Italy. Development of the submarine cable system in Albania could eventually offer the most direct connection to Frankfurt and other important traffic hubs in Eastern and Central Europe deand the Balkans, such as Sofia, Vienna, and Budapest.

The submarine data cable investment is endorsed by a memorandum of understanding signed on 5 February between 4iG and the Albanian government, which affirmed its support for the investment connecting Egypt to Albania, including the terms of that support. 4iG ranks as one of Albania's top foreign investors, and its subsidiary, One Albania, leads the market in the nation's telecommunications industry. This new Balkan data hub will enhance business and technological ties, and the enlargement of international optical transit pathways will facilitate additional collaborative prospects within the region.

Financial results

4iG Plc's consolidated net sales revenue in accordance with International Financial Reporting Standards (IFRS) was HUF 157.7 billion in the first quarter of 2024, the Group's EBITDA in accordance with IFRS exceeded HUF 54.1 billion, and the EBITDA margin on net sales was 34.3%. The consolidated EBIT (earnings before interest and taxes) has increased by nearly 168% in comparison with the same period of the previous year, reaching HUF 9.8 billion in the first quarter of 2024.

89% of net sales were generated by the telecommunications division and 11% by the IT division. Geographically, 85% of net sales revenue were generated in Hungary, 11% in Albania, and 4% in Montenegro.

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31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

The loss of the current period is mainly due to the non-cash items presented on the financial expenses and depreciation and amortisation lines: the profit or loss after tax adjusted with the purchase price allocation effect (HUF 5.7 billion), as well as with the non-cash unrealized foreign exchange differences (HUF 11.4 billion) was HUF -1 billion in the first quarter of 2024.

Capital market performance

Net sales revenue

Earnings before interest, taxes, depreciation and amortisation (EBITDA)

Operating result (EBIT)

Profit or loss after tax (PAT)

Total comprehensive income

Earnings per share (in HUF)

EBITDA

Net profit (EPS)

Diluted EPS indicator

Equity

				Change +/-
Q1 2024		Q1 2023		in %
		Modified*
157 660		115 178		36.88%
54 133		36 272		49.24%
9 828		3 670		167.79%
-18 065		-1 173		1 440.07%
-17 193		-3 542		385.40%
181.00		121.28		49.24%
-60.40		-3.92		1 440.82%
-61.11		-3.92		1 458.93%
1 143.89		1 201.95		-4.83%

*The consolidated statement of comprehensive income has been restated as described in Section 6 Adjustment of previous year's financial data.

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31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

Presentation of 4iG Company's Q1 2024 results

Title		Q1 2024			Q1 2023		Change +/- % in
						Modified
Revenues		165 329			117 872			40.26%
- Of which: Net sales revenue		157 660			115 178			36.88%
Capitalised value of own produced assets		3 756			1 347			178.84%
Material costs		-72 562			-57 134			27.00%
Staff costs		-24 767			-19 274			28.50%
Other expenses
	-17 623			-6 539			169.51%
Earnings before interest, taxes, depreciation and		54 133				36 272			49.24%
amortisation (EBITDA)
Depreciation and amortisation		-44 305				-32 602			35.90%
Earnings before interest and taxes (EBIT)		9 828				3 670			167.79%
Financial income		3 724			14 103			-73.59%
Financial expenses		-28 947			-19 031			52.10%
Profit or loss before tax (PBT)		-15 395				-1 258			1 123.77%
Income taxes		-2 670				85			n/a
Net earnings		-18 065				-1 173			1 440.07%
Other comprehensive income		872				-2 369			n/a

Total comprehensive income	-17 193						-3 542

385.40%

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31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

Consolidated statement of comprehensive income

	Q1 2024		Q1 2023
			Modified*
Net sales revenue
157 660	115 178
Other operating income	7 669		2 694
Total net sales revenue and other income	165 329	117 872
Capitalised value of own produced assets
3 756	1 347
Material costs	-72 562	-57 134
Staff costs	-24 767	-19 274
Other expenses	-17 623	-6 539
of which impairment	-1 336	-702

Total operating costs

Earnings before interest, taxes, depreciation and amortisation (EBITDA)

Depreciation and amortisation

-114 952

54 133

-44 305

-82 947

36 272

-32 602

Earnings before interest and taxes (EBIT)	9 828		3 670
Financial income	3 724		14 103
Financial expenses	-28 930	-19 031
Share of results of associates	-17	0
Profit or loss before tax	-15 395		-1 258
Income taxes	-2 670		85

Profit or loss after tax

Other comprehensive income to be recognised in the consolidated income statement in the following period:

Foreign exchange differences arising on the translation of operations

Net other comprehensive income to be recognised in the consolidated statement of comprehensive income in the following period:

Other comprehensive income

Total comprehensive income

-18 065

872

872

872

-17 193

-1 173

-2 369

-2 369

-2 369

-3 542

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31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

Consolidated statement of comprehensive income - continued

	Q1 2024		Q1 2023
			Modified*
Earnings per share (HUF)
Base	-60.4	-67.5
Diluted	-61.1	-67.5
Profit or loss after tax attributable to:
Owners of the Company	-16 666	80
Non-controlling interest
-1 399	-1 253
Total comprehensive income attributable to:
Owners of the Company	-16 680	-3 252
Non-controlling interest	-513	-290

	Q1 2024		Q1 2023
			Modified*
Profit or loss after tax
-18 065	-1 173
Purchase price allocation effect	5 729		3 158
Adjusted profit or loss after tax**	-12 336	1 985

• The comparative figures in the consolidated statement of comprehensive income and in the consolidated statement of financial position have been restated. The restatements have been made in accordance with the provisions set out in Section 6 Adjustment of previous year's financial data.
• Adjusted profit or loss after tax represents profit or loss after tax adjusted for the effects of the purchase price allocation identified in accordance with IFRS 3 Business Combinations.

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31 MARCH 2024

FLASH REPORT

Data in millions of HUF, unless otherwise stated

Consolidated statement of financial position

		31/03/2024	31/12/2023
				Modified*
ASSETS
Non-current assets
Property, plant, and equipment	456 258	457 749
Customer relationship	171 195	173 522
Other intangible assets	214 936	218 563
Right of use of assets	143 479	140 984
Deferred tax assets	703	688
Goodwill	269 415	269 415
Net investment in leasing	918	752
Other investments	646	639
Other non-current assets	2 616		2 164
Total non-current assets	1 260 166	1 264 476
Current assets
Cash and cash equivalents	44 366	53 175
Trade receivables	115 206	125 147
Other current financial assets	37 298	34 157
Other current non-financial assets	29 138	22 894
Income tax receivables	1 586	1 054
Current finance lease receivables	563	563
Inventories	16 977		11 870
Total current assets	245 134		248 860
Total assets	1 505 300	1 513 336
EQUITY AND LIABILITIES
Equity
Share capital	5 981	5 981
Treasury shares	-3 199	-3 199
Capital reserve	133 492	133 492
Retained earnings	-39 373	-22 707
Reserve for share-based payments	397	397
Accumulated other comprehensive income	13 054		12 168
Equity attributable to the parent company	110 352		126 132
Non-controlling interest	231 758		233 340
Total equity	342 110	359 472
Non-current liabilities
Provisions - non-current	5 792	5 864
Non-current loans, borrowings, bonds	753 455	742 037
Finance lease liabilities - non-current	121 447	119 081
Deferred tax liabilities	22 167	22 350
Other non-current liabilities	3 742		4 926
Total non-current liabilities	906 603	894 258
Current liabilities
Trade payables	67 559	87 681
Current loans and borrowings	14 597	12 663
ESOP obligation	911	624
Dividends payable to owners	8	8
Provisions - current	6 165	5 572
Income tax liabilities	26 851	1 812
Finance lease liabilities - current	29 166	24 747
Other current financial liabilities	110 156	21 035
Other current non-financial liabilities	1 174		105 464
Total current liabilities	256 587		259 606
Total liabilities and equity	1 505 300	1 513 336
			9