029 : H1 Report as of 30 JUN 2024

Published: 2024-09-27 12:21:09 ET Z29.DE

HALF YEAR REPORT

2024

SUPPORTING NEXT-GENERATION EXPERIENCES, HOSPITALITY & HAPPINESS

029 GROUP HALF YEAR REPORT 2024 TABLE OF CONTENTS

INTERIM MANAGEMENT REPORT

REPORT ON BUSINESS AND ECONOMIC POSITION

INTERIM RESULTS OF OPERATIONS AND FINANCIAL CONDITION

OUTLOOK

RISK AND OPPORTUNITIES REPORT

INTERIM FINANCIAL STATEMENTS

RESPONSIBILITY STATEMENT

DISCLAIMER / CONTACT

INTERIM MANAGEMENT REPORT

1. Interim Management Report

1. MACROECONOMIC AND INDUSTRY DEVELOPMENTS

Global growth is projected to be in line with the April 2024 World Economic Outlook (WEO) forecast, at 3.2% in 2024 and 3.3% in 2025. 1 The gradual cooling of labor markets, together with an expected decline in energy prices, should bring headline inflation back to target by the end of 2025. In June 2024, the European Union recorded an annual inflation of 2.6%.2 Monetary policy rates of major central banks are expected to decline in the second half of 2024, with varying paces of normalization due to different inflation conditions.

Overall, risks to the outlook remain balanced, as in the April 2024 WEO, but some near-term risks have gained prominence.1 These include upside risks to inflation that stem from a lack of progress on services disinflation and price pressures emanating from renewed trade or geopolitical tensions. Risks of persistent inflation in the services sector are tied to both wage and price setting, given that labor accounts for a high share of the costs in that sector. Higher nominal wage growth, which in some cases reflects the catch-up of real wages, if accompanied by weak productivity, could make it difficult for firms to moderate price increases, especially when profit margins are already squeezed. This could lead to further stickiness in wage and price inflation. The escalation of trade tensions could further raise near-term risks to inflation by increasing the cost of imported goods along the supply chain. Bumpiness along the remaining disinflation path could destabilize the return to price stability if shortterm expectations spike upward as a result of disappointing inflation data.

In the first half of 2024, the S&P 500 Index returned 15.3%, and the Nasdaq 100 gained 18.6%.3 Meanwhile global venture funding reached approximately USD 147 billion in the first half of 2024, marking a 5% decline year over year.4 However, funding picked up in the second quarter, rising 16% quarter-over- quarter to USD79 billion, with a 12% increase compared to Q2 2023, driven largely by mega-rounds of USD 100 million and above.

The world's largest alliance of independent hotel brands, the UAE-based Global Hotel Alliance, reported robust Q2 results with revenues of USD 1.3 billion in H1 2024, compared to USD 1.1 billion in H1 2023, positioning them for a positive second half of the year.5

The luxury hotel segment is experiencing growth, as evidenced by Accor. They reported a revenue of USD 2.9 billion in H1 2024, marking an 11% increase from

the same period in the previous year. This revenue growth in primarily driven by a 22%increase in the luxury and lifestyle division. 6 Revenue per available room increased by 6% compared to H1 2023, driven by increased occupancy and prices. 7

For the forecast period of 2024-2030, Fortunes Business Insights anticipates that the luxury hotel market will grow at a CAGR of 11.5% to reach a market size of USD 369.36 billion.8

2. PORTFOLIO REVIEW

Our portfolio is currently organized across two segments: Travel & Hospitality and Consumer Brands. The majority of our portfolio companies continued with solid operational and financial performance.

2.1 TRAVEL & HOSPITALITY

Limestone Capital, a vertically integrated investment firm, has sustained its robust growth trajectory in the hospitality sector throughout the first half of 2024. With Fund I having completed its investment phase and now focusing on value creation, Fund II actively deploys capital into strategic acquisitions and development projects across prime European locations. A notable achievement was the strategic acquisition of a luxurious 55-room hotel in Sardinia's picturesque Costa Smeralda. This move exemplifies Limestone's commitment to value creation through property repositioning, aiming to elevate the asset to a modern 5-star standard and optimize operational performance. The property's successful transformation and reopening as Aethos Sardinia in the summer of 2024 showcases Limestone's expertise in crafting unique hospitality experiences in coveted destinations. Limestone continues to make significant strides on projects in Lisbon and Mallorca, while its existing properties have exceeded performance expectations, with revenues surpassing pre-pandemic levels. In a strategic expansion move, Limestone Capital AG spearheaded a EUR 40 million Series A funding round for MYNE, Europe's leading managed co- ownership provider for premium vacation homes. The company's diverse portfolio, featuring brands such as Aethos Hotels and Emerald Stay, now manages over EUR 1 billion in real estate assets. This impressive growth further cements Limestone Capital's position as a preeminent player in the European hospitality investment landscape.

Hotelbird, the leading provider of digital check-in/out solutions in the German hospitality industry, has maintained its strong market position and achieved significant milestones in the first half of 2024. The company successfully launched new guest communication features and premium services, enhancing its offering for both existing and new customers. Hotelbird is on track to complete the roll-out of its solutions across a major hotel chain with over 40

properties by September 2024, while also securing several promising pilot projects with potential for full-scale implementation. The company has further strengthened its partnerships with key industry players in PMS, locking systems, and payment services. Financially, Hotelbird reported a positive operating result (EBIT) for the first half of 2024, driven by revenue growth and improved operational efficiencies compared to the previous year. These developments underscore Hotelbird's continued innovation, market expansion, and financial health in the competitive hospitality technology sector.

2.2 CONSUMER BRANDS

TRIP continued its impressive growth trajectory in the first half of 2024, with all business channels experiencing expansion and further retail distribution gains across the UK, US, and international markets. The company's Retail segment remained the primary growth driver globally, with TRIP solidifying its position as the 17th largest soft drink brand in the UK and the largest privately owned carbonated soft drink (excluding Red Bull). Notably, TRIP is growing twice as fast as any other brand among the top 25 soft drinks in value sales. The company's financial performance showed significant improvement, with gross profit in H1 2024 increasing by over 200% and gross profit margins more than doubling due to economies of scale and supply chain efficiencies. From February to June 2024, TRIP's UK and EU core business achieved net profitability and moved into positive cash flow. Looking ahead, TRIP is expanding beyond CBD, with plans to launch its best-selling Magnesium range nationwide in the US during H2, featuring a first-of-its-kind product partnership with the Calm app, further cementing its position as the global leader in calming beverages.

Brother's Bond Bourbon has achieved significant milestones in the first half of 2024, demonstrating strong growth and operational improvements. The company expanded its international presence by shipping its first container to the European Union in May, with a second shipment planned for September 2024. In June, Brother's Bond introduced a new product variant made with regenerative grains, showcasing its commitment to sustainability and innovation. The brand also developed a Bottle in Bond version, set to be released this month, further diversifying its product portfolio. Operationally, Brother's Bond made a strategic shift to a new co-packer, resulting in a USD 6 reduction in cost per case, with additional cost-saving measures in development. This move aligns with the company's focus on improving profitability and operational efficiency. Financially, the company strengthened its position by retiring the SMC Loan, indicating improved cash flow and financial stability. These developments, combined with the continued success of their award-winning bourbon expressions, position Brother's Bond for sustained growth and market expansion in the premium spirits category.

Fjör has made significant strides in refining its market approach and product offerings in 2024. The company has successfully enhanced its communication strategy, focusing on the microbiome impacts of its technology and simplifying

product usage instructions. This shift has resulted in improved customer engagement and understanding. Fjör's customer retention rates have shown remarkable improvement, with over 20% of cohorts returning and an expected increase to 30% after one year. The lifetime value of customers has also seen a substantial rise, reaching over GPB 300 for recent cohorts. The company has upgraded its logistics capabilities and is developing new products, including a body moisturizer set to launch in November. Marketing effectiveness has increased significantly, with customer acquisition costs halved through a focus on organic methods and user-generated content. Fjör has gained deeper insights into its customer base, observing increased average order values for repeat purchases and identifying reordering patterns. The company's subscription model has proven particularly successful, with a low cancellation rate of less than 10% over a 10-month period.

1. RESULTS OF OPERATIONS

The following table shows financial information taken from the Company´s Income Statement for H1 2024 and H1 2023:

Six months ended

30 June 2024

30 June 2023

EUR

Other operating income

936,504.23

177.73

Personnel expenses

a) Wages and salaries

48,000.00

b) Social security costs and expenses related to

290.58

319.50

pension plans and for support

48,290.58

48,319.50

Depreciation and amortization

a) Of noncurrent intangible assets and property,

3,009.49

1,623.99

plant and equipment

Other operating expenses

a) Occupancy costs

16,255.11

20,421.16

b) Insurance premiums, fees and contributions

13,404.38

14,439.48

c) Cost of third-party repairs and maintenance

0.00

476.00

d) Advertising and travel expenses

18,193.25

22,233.12

f) Miscellaneous other operating expenses

127,808.7

217,587.57

f) Miscellaneous other operating expenses

0.00

42,714.34

175,661.44

317,871.67

Income from other securities and long-term

2,784.44

2,800.00

loans

Interest and similar expenses

9,114.72

13,808.74

7. Net income/loss for the financial year

703,212.44

-378,646.17

Operating Income

Other operaing income amounted to EUR 936,504.23,

which mainly consists of the sale of shares in Emerald

Stay SA in February 2024.

Depreciation and

We incurred depreciation and amortization charges of

Amortization

EUR 3,009.49 in H1 2024 compared to EUR 1,623.00 in

the prior year period relating to depreciation and

amortization of intangible fixed assets.

Personnel

Personnel expenses amounted to EUR 48,290.58 as a

expenses

result of expenses related to the employment of our

Managing Director.

Changes in other

Other operating expenses decreased from EUR

operating

317,871.67 in H1 2023 to EUR 175,661.44 in H1 2024.

expenses

Significant expense drivers for the period included

office lease in Berlin, incurance expenses, advertising

expenses related to our listing, legal fees related to

our Annual Meeting, audit fees and bookkeeping

expenses.

Income from other securities and long-term loans

The interest income relates to the interest on the convertible bond as at 30 June 2024. Interest for the first half of the year amounted to EUR 2,784.44. In the previous year, interest for the first half of the year amounted to EUR 2,800.00, almost the same amount.

Interest and

We incurred interest expense of EUR 9,114.72 in H1

similar expenses

2024, compared to EUR 13,809 in the prior year period,

under the Credit Facility

Net income for H1

Our net loss for the financial year of EUR 378,646.17 in

2024

H1 2023 turned into a net income of EUR 703,212.44 in

H1 2024, mainly due to the sale of shares in an

investment.

2. ASSETS AND LIABILITIES

The following table provides an overview of the Company's current assets as at 30 June 2024 and 31 December 2023.

Financial Year as at

Prior Year as at

30 June 2024

31 December 2023

EUR

Non-current Assets

Intangible fixed assets

Purchased licenses, trademarks and

15,879.35

16,585.85

similar rights and values as well as

licenses to such rights and values

Other long-term equity investments

16,505,466.71

21,758,954.88

Other loans

80,000.00

Total Non-Current Assets

16,601,346.06

21,855,540.73

1. Other assets

14,788.33

9,484.99

year EUR 10,453.33 (EUR 4,868.89)

II.

Cash on hand, central bank balances,

12,898.67

74,921.49

bank balances, and checks

Total Current Assets

27,687.00

84,406.48

Prepaid Expenses

20,205.63

28,215.60

Total Assets

16,649,238.69

21,968,162.81

As an investment holding, we consider capital invested and NAV development as our most important KPIs. The following table sets forth our KPI development since we completed the Contribution in Kind.

Company

Sector

Shareholding

Limestone Capital AG

Zug, Switzerland

Travel & Hospitality

35.66%

Hotelbird GmbH

Munich, Germany

Travel & Hospitality

4.80%

TRIP Drink Ltd.

London, United Kingdom

Consumer Brands

6.90%

Brother's Bond Distilling Co. LLC

Camden, Delaware, United States

Consumer Brands

1.86%

Fjör Ltd.

London, United Kingdom

Consumer Brands

11.30%

Book value in

Increase from

Company

Invested Capital*

Net Asset Value **

reported book

German GAP

value

Limestone Capital AG

EUR 788,330

EUR 8,006,872

EUR 33,346,486

316%

Hotelbird GmbH

EUR 499,867

EUR 426,465

EUR 600,000

41%

TRIP Drink Ltd.

EUR 1,489,354

EUR 6,751,780

EUR 6,568,800

-3%

Brother's Bond Distilling Co. LLC

EUR 815,995

EUR 1,058,029

EUR 1,004,400

-5%

Fjör Ltd.

EUR 262,320

EUR 267,750

Changes in non-

Non-current assets decreased from EUR 21,855,540.73 as of

current assets

31. Dezember 2023 to EUR 16,601,346.06 as of 30

June

2024 due to the sale of one investment.

Changes in

Current assets decreased to EUR 27,687.00 as of 30

June

current assets

2024 compared to EUR 84,406.48 as of 31 December 2023.

The following table provides an overview of the Company's equity, provisions, and liabilities as of 30 June 2024 and 31 December 2023.

A. Equity

IV.

Net income for the financial year

Total Equity

B. Provisions

C. Liabilities

116,788.66 (EUR 61,883.36)

II. Other liabilities

Total Liabilities

Total Equitiy and Liabilities

Financial Year as at

Prior Year as at

30 June 2024

31 December 2023

EUR

5,000,000.00 5,000,000.00

17,048,925.00 17,048,925.00

-6,398,592.77-768,171.63

703,212.44 -378,646.17

16.353.544,67 20,902,107.20

83,859.43 273,813.79

116,788.66 61,883.36

95,045.93 730,358.46

211,834.59 792,241.82

16,649,238.69 21,968,162.81

Disclaimer

029 Group SE published this content on September 27, 2024 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on September 27, 2024 at 16:20:04 UTC.