Annual Results
Announcement




MAY 3, 2023
ANNUAL RESULTS ANNOUNCEMENT 2022 2 INAPA




INDEX

01 Message from the CEO 03




02 Main Activity Indicators 05




03 Relevant Facts 06




04 Management Report 07
4.1
4.2
Macroeconomic context 07
Sector framework 10
4.3 Consolidated performance 12
4.4 Business area performance 15
4.5 Outlook for 2023 23




05 Consolidated Accounts 25




06 Additional information 27
ANNUAL RESULTS ANNOUNCEMENT 2022 3 INAPA




01 Message of the CEO




The results achieved in 2022 were very positive 2021). This improvement corresponds to an
and reinforce our optimism regarding the expressive evolution of the recurring EBITDA
development of Inapa Group. This performance margin (vs sales) from 3.3% to 7.2%.
is the corollary of the strategy executed in
recent years, which was marked by structural Net income reached 17.8 million euros
processes of acquisition and optimization that (corresponding to an increase of 14.4 million
have implied an enormous dedication of our euros compared to 2021), despite the increase
teams. in financial charges related with higher interest
rates.
Turnover reached 1,212 million euros,
corresponding to an increase of 26% compared Regarding the balance sheet, I highlight that
to 2021, while the gross margin grew by 35% net debt decreased by 40.7 million euros
(plus 63 million euros), from 18.6% to 20.0% of compared to December 2021, to 221 million
sales. euros. As a consequence, the Net Debt/Re-
EBITDA ratio declined to 2.5x (compared to
Despite an increase in operating costs (induced 8.3x in 2021).
by higher activity, rising inflation and by the end
government supports obtained in the context These results reinforce the confidence in our
of the Covid-19 period), efficiency measured as strategy and in the Groups’ ability to meet
a percentage of sales increased significantly. the challenges we may face in the coming
Operating costs accounted for 15.3% of sales, years. Particularly, considering that they were
corresponding to an improvement of 2.9pp achieved in a highly demanding context
compared to 2021. This variation reflects gains marked by the post-Covid-19 challenges, the
from reorganizations implemented in Germany, conflict in Ukraine, and by the limitations on
France and Spain. paper availability related with the closure or
suspension of several paper mills (at a time
The increase in gross margin, combined when demand was higher than supply).
with the decrease in the weight of operating
costs, led to a significant improvement in the The abovementioned effects led to a
recurring EBITDA which amounted to 86.9 substantial increase in production costs
million euros (more 55.4 million euros than in and consequently to an increase in market
ANNUAL RESULTS ANNOUNCEMENT 2022 4 INAPA




prices. In the last quarter of 2022, there was a We have achieved a substantial part of the
significant drop in paper demand, related to targets we set in relation to the United Nations
a generalized option, by the different players Sustainable Development Goals (SDGs), and
across the value chain, to reduce paper stock we have established new targets for 2023 and
levels. This pattern was extended to the 2024.
beginning of 2023.
I therefore believe that we have successfully
In 2022, we continue our optimization activity started the implementation of the strategic
by implementing new processes to reduce guidelines defined for the 2022-2024 period.
costs and create more flexible structures. We These lines follow the plan of the previous
extended the use of the Group’s new ERP triennium and promote three pillars: efficiency,
(SAP S/4HANA) to Portugal and Spain. The growth in the non-paper business and impact
implementation of the new ERP in the Group on sustainability.
should be completed in 2023 in France and
Turkey. Finally, I would like to express my gratitude
to our employees, clients, suppliers, financial
From a sustainable development point of view, institutions, shareholders, and communities
besides having continued with investment where we operate for the significant impact
and improvement actions, we have made they have had on the development of our
significant progress, of which I highlight, values, mission and performance. This
for example, the increase in the share of contribution is crucial to the success of the
ecological papers in sales and the reduction Inapa Group.
of energy consumption, GHG emissions,
waste generation, occupational accidents and
diseases.
Diogo Rezende
CEO of Inapa Group
ANNUAL RESULTS ANNOUNCEMENT 2022 5 INAPA




02 Main Activity Indicators

(Amounts in Million Euros, except when specified otherwise)



2022 2021 2020 2019 VAR.22/21
Tonnes (‘000) 714 841 913 887 -15,1%
Sales 1 211,7 964,6 1015,5 1030,8 25,6%
Gross margin 242,7 179,3 185,5 178,4 35,4%
Gross margin (%) 20,0% 18,6% 18,3% 17,3% 1,4 pp
Net Operating costs 154,7 146,2 156,6 148,6 5,8%
Operating Income 30,5 28,8 23,6 24,8 5,9%
Operating Costs 185,2 175,0 180,2 173,4 5,8%
Impairment of trade receivables 1,1 1,6 1,5 1,5 -34,4%
Re-EBITDA 86,9 31,5 27,4 28,3 176,3%
Re-EBITDA (%) 7,2% 3,3% 2,7% 2,7% 3,9 pp
Non recurrent costs 10,8 0,7 11,6 1,6 10,2
EBITDA 76,1 30,8 15,8 26,7 147,0%
EBITDA (%) 6,3% 3,2% 1,6% 2,6% 3,1 pp
EBIT 52,8 15,5 -2,7 10,8 241,1%
EBIT (%) 4,4% 1,6% -0,3% 1,0% 2,8 pp
Financial Function 16,0 14,2 15,5 15,7 13,0%
EBT 36,8 1,3 -18,2 -4,9 35,5
Income Tax -19,1 2,0 2,8 0,8 -21,0
Net income 17,8 3,3 -15,5 -4,1 14,4


31/12/22 31/12/21 31/12/20 31/12/19 VAR.22/21
Net debt 221,1 261,8 315,0 337,3 -15,6%
Net debt/Re-EBITDA 2,5 x 8,3 x 11,5 x 11,9 x -5,8 x
Net debt excluding Trade Finance 202,9 241,8 258,7 248,4 -16,1%
Interest coverage 5,4 x 2,2 x 1,8 x 1,8 x 3,2 x
Working capital 35,8 11,4 73,0 87,6 215,1%
ANNUAL RESULTS ANNOUNCEMENT 2022 6 INAPA




03 Relevant Facts




29.04.2022 04.10.2022
2021 Results Announcement Qualified Holding of Nova Expressão SGPS, SA

2021 Annual Report
10.10.2022
Notice of Ordinary General Meeting New representative for Investor Relations
and the CMVM
20.05.2022
Ordinary General Meeting 16.11.2022
Governing Bodies triennial 2022-24 Qualified Holding of BCP


15.09.2022 30.11.2022
Gender Equality Plan JJ Loos acquisition


21.09.2022
First half 2022 results announcement




Subsequent Facts
Up to the date of publication of the report no subsequent events have been registered.
ANNUAL RESULTS ANNOUNCEMENT 2022 7 INAPA




04 Management Report


4.1
Macroeconomic context


The year of 2022 was one of uncertainty in 2022 is 3.5%, with 0.8% expected for 2023.
and global-scale challenges. The conflict The inflation rate was 9.2%, with a projection
in Ukraine, which started when the world of 6.4% for 2023. The evolution will be strongly
economy was still recovering from the impact related to the development of the conflict in
of Covid-19, contributed to the acceleration of Ukraine and the consequent pressures on
inflation in energy and subsequent contagion inflation and central bank policies.
to food and service goods. Central banks have
tightened their monetary policies in order In the next paragraphs, some comments are
to contain inflationary pressures. Purchasing presented regarding the economic evolution
power and consumer confidence have been in 2022 and future prospects in the countries
reduced and investment decisions have been where the Inapa Group operates.
postponed or cancelled.
In 2022 the German economy grew by 1.8%,
However, unlike in the world’s two largest stimulated by demand (mainly for services)
economies (the US and China), the Eurozone related with the reopening of the economy
activity was less affected by the conflict than in the post-pandemic period. Despite the
expected at the beginning of the year. This growth, investment and private consumption
evolution is explained by different aspects had not yet reached pre-pandemic levels
that contributed to avoid a contraction in the third quarter. In the fourth quarter,
in the last quarter, such as a mild winter, decreases were observed in these indicators,
high levels of gas reserves and savings in contributing to a reduction in GDP of 0.2%.
gas consumption. These aspects coincided In 2023, GDP is expected to grow by 0.2%.
with the easing of inflation and historic low The evolution of energy prices, the
levels of unemployment in December (6.1%), development of government support for
generating positive signals for 2023. families, the gradual adjustment of global
supply chains, as well as the financial
The global growth for 2022 was 3%, which strength of companies and order portfolios,
represents half of the growth in 2021. For 2023, are expected to contribute to the recovery
a growth of 2% is forecasted. In the case of of economic growth later on. Inflation in 2022
the European Union, the estimated growth was 8.7%, with a projection of 6.3% for 2023
ANNUAL RESULTS ANNOUNCEMENT 2022 8 INAPA
8




The French economy grew by 2.6% in 2022, impact investment. In terms of constraints,
driven by a carry-over effect. A slowdown the impact of the tightening of monetary
in the second half of the year related to policies and the reduction of the dynamism
supply constraints and increases in energy of the labour market stand out. Inflation in
and raw material prices is highlighted. 2022 was 8.3%, and in 2023 it is expected to
During this period, private consumption be 4.4%.
remained stable with a decline in the levels of
consumer confidence. Increased imports have The Portuguese economy grew by 6.7%
dampened growth. By 2023, GDP is projected in 2022. Growth was spurred by private
to grow by 0.6%. The economy is expected consumption and exports, benefiting from
to present restrained dynamism in the first the dynamism of the tourism sector following
half of the year. Investment will be reduced in the easing of restrictions associated with
line with rising production costs, tightening Covid-19. Industrial activity and construction
financial conditions and uncertainty. The presented a moderate performance,
expected slowdown in inflation will contribute particularly in the last four months of the year.
to a gradual recovery in the second half of the This evolution was related to unfavourable
2023. Private consumption and investment external conditions and volatility of raw
will increase as domestic demand and material prices. For 2023, a growth of 1.0% is
international trade recover. Inflation in 2022 anticipated. The prospects for the beginning
was 5.9%, and in 2023 it is expected to be 5.2%. of the year are moderate, being related to
uncertainties regarding energy prices during
In 2022, the Spanish economy grew by 5.5%. the winter months. Growth is expected to
This evolution was fostered by the recovery of increase in the second quarter of the year,
the tourism sector, private consumption and intensifying thereafter. Inflation in 2022 was
developments in the labour market. However, 8.1%, and is expected to be 5.4% in 2023.
in the last quarter, the economy was still
below pre-pandemic levels (4Q2019). In 2023, In 2022, the Turkish economy grew by 5.3%,
the economy is expected to grow in the first presenting one of the highest growth rates
semester, earning greater dynamism in the among OECD countries in the first half of
second semester. The expected growth for the the year (7.5%). The strong growth in private
year is 1.4%. consumption was fuelled by a favourable
trend in the labour market. The tourism
The slowing down of inflation throughout the sector fully recovered, and exports benefited
year should contribute to the strengthening from supply constraints in Asia. However,
of private consumption, as well as to the investment activity was moderate, and
normalization of the tourism sector. The imbalances were developed, with the current
implementation of the Recovery and account deficit increasing due to energy
Resilience Mechanism (MRR) will positively imports. Inflation reached 85.5% for consumer
ANNUAL RESULTS ANNOUNCEMENT 2022 9 INAPA




prices and 158% for producer prices in October private consumption expected. The response
2022, driven by the depreciation of the lira of economic actors to the needs of the energy
and higher import prices. For 2023, growth transition and the financial contributions
is projected to be 3.0%, but uncertainties in associated with the Recovery and Resilience
global demand and geopolitical risks may Mechanism (MRR) should contribute to
limit investment and affect exports. growth. On the other hand, uncertainty,
Inflation is expected to persist above 40%. tightening financial conditions, rising wages
and input costs are likely to negatively affect
The growth of the Belgian economy in investment decisions.
2022 was 3.1%. The easing of Covid-19-related
restrictions contributed to a period of Unlike in 2022, net exports are expected to
momentum in the first half of 2022, slow the pace of growth (reflecting the trend
particularly in private consumption. In the associated with global trade). Inflation in 2022
second half of the year, there was a slowdown was 10.3%, and in 2023 it is estimated to be
related with high inflation. In the third and 4.3%.
fourth quarters, GDP increased by 0.2%
and 0.1%, respectively. In 2023 the expected
growth is 0.8%. The indexation of wages
and social benefits to inflation will continue
to contribute to the recovery of household
purchasing power, with an expansion of




Gross domestic product, volume (percentage of change on preceding year)

2018 2019 2020 2021 2022 F 2023 F
Global 3,6% 2,8% -3,2% 5,9% 3,1% 2,2%
Euro Zone (20) 1,8% 1,6% -6,1% 5,3% 3,5% 0,9%
European Union 2,1% 1,8% -5,7% 5,4% 3,5% 0,8%
Germany 1,0% 1,1% -3,7% 2,6% 1,8% 0,2%
France 1,9% 1,8% -7,8% 6,8% 2,6% 0,6%
Spain 2,3% 2,0% -11,3% 5,5% 5,5% 1,4%
Portugal 2,8% 2,7% -8,3% 5,5% 6,7% 1,0%
Belgium 1,8% 2,2% -5,4% 6,1% 3,1% 0,8%
Turkey 3,0% 0,9% 1,8% 11,4% 5,3% 3,0%

SOURCE: EUROPEAN COMMISSION (FEBRUARY 2023). FOR GLOBAL AND TURKEY, OCDE (NOVEMBER 2022)
ANNUAL RESULTS ANNOUNCEMENT 2022 10 INAPA




4.2
Sector f ramework


In the first half of 2022, paper consumption a combined volume reduction of 9.7%. All
volumes in Western Europe remained stable these countries have experienced declines in
compared to the previous year. However, in the demand. According to Eurograph, Germany
second half of the year, there was a decrease recorded a reduction of 11.8%, France 8.4%,
in paper demand. This was due to the decision Spain 7.4% and Portugal 1.8%. These figures
by operators along the value chain to reduce refer to the consumption of coated and
paper stocks (stocks had been reinforced in uncoated papers – which represents about 90%
previous months to avoid disruptions in activity of the papers marketed. These figures do not
due to paper shortages, given the instability in include the remaining subfamilies that include
paper production). The return to a more stable specialties, cardboard and self-adhesives,
situation in logistics chains, mainly felt from among others. In the Benelux (Belgium
September onwards, made part of the safety and Luxembourg), where Inapa is mainly
stocks redundant. represented in the office paper segment, the
market decreased by 8.1%. In Europe, the total
In Western Europe, the reduction in the reduction in aggregate volumes of coated and
consumption of paper for graphic arts, writing uncoated paper was 9.6%.
and printing was, according to Eurograph
(European Association of Graphic Producers), According to statistics from CEPI
7.4% (in the first half of the year there was an (Confederation of European Paper Industries),
increase of 0.4%). This level of reduction was there was a decline of 5.9% in the production
felt in both the demand for coated woodfree of paper and board compared to 2021, to 84.8
and uncoated woodfree papers. It should be million tons. In 2022, the structural divergence
noted that, in overall, the decrease in paper between the evolution of production for
consumption in Western Europe compared to graphic, writing, and printing papers and paper
the pre-pandemic period was around 20%. and cardboard for packaging persisted. This
was related with longer periods of inactivity
Inapa’s main markets - Germany, France, in mills in the second half of the year (due
Spain, Portugal and Belgium - recorded high electricity and gas costs), and with the
ANNUAL RESULTS ANNOUNCEMENT 2022 11 INAPA




conversion processes of mills. There was a In 2022, the price of coated papers increased
decrease in the production of woodfree coated by around 62.0%, depending on the weight,
papers by 12.0% and woodfree uncoated papers while the price of office papers in general grew
by 5.8%, while newspaper paper continued its by 37.2% and the price of newsprint increased
downward trend with a 9.9% decrease. Coated by 78.9% (January to December - Fastmarkets1
and uncoated mechanical pulp papers also FOEX indices for Europe). Paper producers
experienced declines in production by 19.5% were impacted by successive increases in pulp
and 13.2%, respectively. prices in the early months of the year, as well
as by a significant increase in energy costs
The production of paper and board for in Europe related with the rise in gas prices
packaging presented a more moderate decline, (stimulated by the conflict between Russia
reducing 4.6% versus 2021. The combined and Ukraine), and by the high prices of CO2
effect of the fall in exports to countries outside emission rights.
the CEPI universe by 13.3%, with the periods of
inactivity of the mills (previously mentioned), It is not expected that there will be any
resulted in an overall reduction in activity of increases in pulp production capacity in the
3.3%. Imports from markets outside CEPI’s first half of 2023. Therefore, and given that
coverage area grew by 6.8% compared to 2021, there is growth in certain segments (such as
driven by greater availability in the maritime tissue), prices are expected to remain stable.
sector (e.g. reduction of container tariffs and Potential price variations will be related to
increased availability). changes in cost variables such as energy.

In summary, the share of graphic grades
in total production decreased to 26.1% in
2022, compared to 27.1% in 2021. The share of
packaging grades was 59.8% (compared to
59.1% in 2021) and the share of all other grades
of paper and board – mainly for industrial and
special purposes - decreased to 4.8%. Finally, it
is noteworthy that the sanitary and household
paper segment increased its share to 9.3%,
reaching levels similar to those seen during the
Covid-19 pandemic.


(1)
FASTMARKETS RISI IS AN INDEPENDENT COMPANY THAT PUBLISHES PRICE STATISTICS FOR PULP, PAPER, RECYCLED PAPER
AND WOOD BIOMASS
ANNUAL RESULTS ANNOUNCEMENT 2022 12 INAPA




4.3
Consolidated performance


In 2022, after two years of crisis caused a strong growth (+8.1% when compared to
by Covid-19, the activity was marked by the previous year). With the resumption
the invasion of Ukraine by Russia in late of events and fairs, which were suspended
February. The conflict resulted in sustained since 2020, the area of visual communication
increases in energy costs, raw materials and has witnessed a recovery, having recorded a
transportation, which, combined with a growth of 4.3% in 2022 compared to 2021.
shortage of paper supply in a context of mill
closures and conversions, contributed to a At the end of the year, Inapa Group concluded
further increase in prices. A strike in one of the acquisition of JJ Loos, a company
the major European paper producers, which specialized in the sale of printing equipment
lasted from December 2021 to April 2022, also and consumables for visual communication
contributed to a lower availability of paper in (Viscom) in France. This transaction is part
the European market. of Inapa’s strategic plan for the 2022-2024
triennium, which highlights exploring
The consolidated sales of the Inapa Group in acquisition opportunities in the packaging
2022 were 1,211.7 million euros, representing and visual communication areas as one
an increase of 25.6% compared to 2021. This of its priorities. By acquiring JJ Loos, the
evolution reflected a very significant increase Group strengthens its position in France,
in paper prices in the various segments, which where it is already present in the paper
was related with substantial increases in paper distribution sector through Inapa France,
production costs, in a context where demand and in the packaging sector with Inapa
was clearly higher than the supply. Packaging, Semaq, and Embaltec. The Group
consolidated the operations of JJ Loos SAS on
Sales related to the complementary December 31, 2022.
packaging, visual communication and office
consumables businesses grew by 7.1% in The gross margin on sales increased by 1.4
2022 compared to 2021. These areas showed percentage points, from 18.6% in 2021 to 20.0%
positive performances, with the packaging in 2022. During this period, in a context of
business maintaining its resilience, registering strong price increases by producers, our teams
ANNUAL RESULTS ANNOUNCEMENT 2022 13 INAPA




maintained a careful management of pricing risks, following internal procedures for credit
and sales mix, continuing to focus on products control of its client portfolio, while working
with higher margins. closely with the Group’s credit insurer to
mitigate potential credit risks.
Net operating costs as a percentage of sales
(excluding impairment of trade receivables), Recurring EBITDA improved significantly
decreased by 2.4 percentage points compared in 2022, reaching 86.9 million euros (+55.4
to the previous year (15.2% in 2021 to 12.8% million euros compared to 2021). This amount
in 2022), benefiting from gains from the represents 7.2% of sales, +3.9 p.p. compared to
reorganizations implemented in Germany, 2021.
France, and Spain in recent years. In absolute
terms, Inapa recorded an increase of 8.5 The non-recurrent costs amounted to 10.8
million euros in net operating costs (excluding million euros and were primarily related to
impairment of trade receivables), mainly expenses incurred with ongoing restructuring
due to the increase in personnel expenses processes in the logistics and commercial
(associated with commissions and bonuses areas in Germany aimed at optimizing the
related with better sales performances, as operations of the Group.
well as with the cancellation of government
supports obtained in the context of the In 2022, EBITDA reached 76.1 million euros
pandemic, namely layoffs), and transportation (equivalent to 6.3% of sales), representing an
costs (mostly due to the increase in fuel costs). increase of 45.3 million compared to 2021.
Inapa remained focused on implementing
cost reduction measures by creating more
Operating results (EBIT) were of 52.8 million
flexible structures. In this regard, additional
euros, corresponding to an improvement of
cost reduction measures have been identified
37.3 million compared to the previous year.
in logistics and commercial organization in
Germany. These measures are currently being
The financial function for 2022 increased by 1.8
implemented and savings are expected to be
million euros to 16.0 million euros (compared
progressively reflected in 2023 and 2024.
to 14.2 million euros in 2021). This increase was
driven by the rise in the average cost of debt,
In 2022, impairment of trade receivables
as reference rates progressively increased
amounted to 1.1 million euros, representing
in the second half of the year, as well as
a decrease of 0.5 million euros compared to
non-recurring costs associated with early
2021. Inapa maintains strict monitoring of
repayments of leasing financings.
ANNUAL RESULTS ANNOUNCEMENT 2022 14 INAPA




The consolidated earnings before taxes As of December 31, 2022, the consolidated
grew to 36.8 million euros (compared to 1.3 net debt amounted to 221.1 million euros,
million euros in 2021) driven by the positive representing a significant reduction of
operational performance achieved during 40.7 million euros compared to December
2022. Income tax amounted to 19.1 million 2021. This translates into a significant
euros, of which around 12.6 million euros were improvement in the net debt / Re-EBITDA
related to deferred taxes and 6.5 million euros ratio from 8.3x in 2021 to 2.5x in 2022. The
to current taxes. The net income for 2022 was balance of short-term debt remained stable,
positive at 17.8 million euros, representing an with current debt excluding Trade Finance
improvement of 14.4 million euros compared standing at 64.1 million euros, or 27% of the
to 2021. total gross debt (25% in December 2021).

Working capital increased by 24.4 million
euros compared to December 2021, to 35.8
million euros. This variation was related with
the combined effects of, on the one hand,
the application of the non-recourse factoring
contract negotiated this year at Inapa France
(covering a significant portion of customer
balances in that geography) and, on the other
hand, by the increase in inventories by 34.9
million euros.
ANNUAL RESULTS ANNOUNCEMENT 2022 15 INAPA




4.4
Business areas performance


In 2022, the structural changes in consumption On the supply side, throughout 2022, a
patterns, combined with the trend of progressive increase in the average prices
digitalization and e-commerce, continued to of paper producers was witnessed. This was
stimulate the growth in demand for paper driven by a significant increase in the cost of
and board packaging, which is essential for various production factors (pulp, chemicals,
transportation, in the agri-food, pharmaceutical energy), as well as a new balance between
and other industries. Sanitary and household supply and demand related with the economic
products also maintained a growth trend. On recovery that resulted in an increase in paper
the other side, the more traditional writing and demand in Europe. This occurred within a
printing papers continued to record declines in context of reduced supply by producers and
consumption. Globally, in Western Europe, the strong limitations on paper imports from other
decline was of around 20%, when compared to continents due to constraints in the global
the pre-pandemic period. logistics chain. In the second half of the year,
predictions of an economic slowdown, coupled
Paper will always have its relevance to the with rapid regularization in logistics chains,
global economy and will continue to be led to a sharp reduction in stocks (which
irreplaceable in many instances. There are were previously at very high levels across the
many studies that prove the greater impact distribution chain).
and recall of the messages transmitted on
paper compared to electronic media, proving Paper distribution, the core business of the
that the written word on paper has a tangible Inapa Group, was subject to the market
and tactile presence that can never be dynamics described above, with sales in
replaced by the information that is transmitted 2022 increasing by 28% compared to 2021,
digitally. It is worth mentioning that paper representing approximately 90% of the Group’s
is one of the most renewable and recyclable total turnover. Inapa remained focused on
materials available, which is a highly relevant margin optimization, organic growth, and cost
fact in the context of overall growing concerns reduction measures, creating more flexible
regarding environmental sustainability. structures. In this regard, additional cost
ANNUAL RESULTS ANNOUNCEMENT 2022 16 INAPA




reduction measures were identified in the Inapa remains focused on boosting the
logistics and commercial organization areas in cross-selling of packaging materials, visual
Germany. These measures which are currently communication and graphic and office
being implemented, will gradually be reflected consumables, as a way to increase its
in performance in 2023 and 2024. We also penetration in customers and off-set the
carried out sale and leaseback operations for decrease in the paper activity. In this sense, we
the Sintra and Leganés warehouses. continued to explore cross-selling in the areas
of packaging through the sale of hygiene and
The packaging and visual communication safety products such as protective equipment
businesses recorded an overall growth of 7% for social distancing, sign & display and
compared to the same period in 2021. The adhesive & floor marking.
packaging area has shown great resilience and
has continued to evolve in a very positive way, .
supported by the growth in the e-commerce
and agri-food industry, wine, chemical and
cosmetic sectors, among others.

Visual communication witnessed a positive
evolution in the first months of 2022. This
was related with the economic recovery and
with the resumption of major specialty fairs
and open-house events or webshops for
our customers, who have shown a greater
willingness to invest. In the second half of the
year, there was a lower flow of orders compared
to 2021, due to fears of recession in Europe
caused by the risk of shortages of energy
sources, high inflation levels and rising interest
rates.
ANNUAL RESULTS ANNOUNCEMENT 2022 17 INAPA




PAPER



In 2022, the Paper business of Inapa
Sales (million euros)
Group companies accounted for €1,094.3
million in sales, representing a growth of
909,9 855,1 1 094,3
approximately 28% compared to the same
period in 2021.



After a first half of the year, in which paper
consumption volumes in Western Europe
were stable compared to the previous year,
the second half saw a reduction in paper 2020 2021 2022
demand. This evolution was determined
by the decision, by the operators along the
value chain, to reduce paper stocks. Note: In
In this context, volume sales in 2022 were
the previous months the operators across
714 thousand tons. This amount represents a
the value chain strengthened the (security)
decrease of 15% compared to the same period
stocks to avoid stoppages of activity due to
of 2021. However, the sales reached 1,094.3
lack of paper, given the instability in paper
million euros, which represents an increase of
production. The return to a more stable
28% compared to 2021.
situation in the logistics chains, especially
after September, made these security stocks
Throughout the year, we continued to explore
redundant.
cross-selling opportunities (for solutions related
with packaging, hygiene and safety products,
In 2022, Western Europe experienced a
PPE and social distancing equipment, sign
decrease in paper consumption of 7.4%
& display, adhesive & floor marking, among
compared to 2021. In the European countries
others) as a way to increase penetration within
where Inapa operates, consumption declined
customers and to offset the decline in the
by 9.7% compared to 2021.
paper segment.
ANNUAL RESULTS ANNOUNCEMENT 2022 18 INAPA




In Germany, the integration plan for Papyrus in the producers’ commercial strategy, which
Deutschland was successfully implemented, is currently more reactive and focused on
with cost savings exceeding the targeted short-term, with immediate and high price
amount. However, the market decline related increases, order selection (and cancellation),
with the effects of Covid-19, exacerbated by and discontinuation of less profitable
the loss of market share during the merger businesses.
and restructuring process, led to the need for
further operation reduction. Inapa identified Given the new balance between supply and
additional potential cost savings in logistics, demand, we were able to pass on these
commercial organization, and administration, increases in prices1 to our customers and
which are currently in the implementation increase the margin on sales in 2022.
phase, and will progressively have impact in
2023 and 2024. Throughout the year, Inapa We remained focused on constant
stabilized its market share and increased improvement of efficiency levels and sought
margins, reaching a good level of profitability. new ways to optimize our structures. In
2022, we benefited fully from significant
In France, strict pricing discipline and control savings in operating costs resulting from
of sales conditions led to a positive evolution the implementation of various restructuring
of gross margin percentage (in relation to plans in Germany, France, and Spain, while
sales) compared to the same period of the experiencing an increase in personnel
previous year. This commercial dynamic, expenses (related to commissions and
combined with an optimized and flexible cost bonuses due to improved sales performances
structure, resulted in significant growth in and cancellations of government support
profitability levels with a Re-EBITDA margin obtained during the pandemic, including
above the market average. In 2022, Inapa layoffs) and transportation costs (mostly due
began the implementation project for the to the increased cost of fuel).
Group’s new ERP (SAP S/4HANA), which is
expected to be concluded in the second The operating results (EBIT) for the paper
quarter of 2023. business were a positive €50.6 million,
representing 4.6% of sales (€14.9 million and
Inapa continued its strategy of improving 1.7% in 2021).
the sales mix, amidst a strong increase in
prices by producers, largely driven by rising
production costs (particularly pulp, energy,
and chemicals). We have observed a change

(1)
AVERAGE SELLING PRICE: PAPER SALES/TONS
ANNUAL RESULTS ANNOUNCEMENT 2022 19 INAPA




PACKAGING



In 2022, the Packaging business of the
Sales (million euros)
Inapa Group companies represented €86.0
million in sales, presenting a growth of
73,8 79,5 86,0
approximately 8% compared to the same
period in 2021.

The year 2022 was characterized by constraints
in the logistics area, the energy crisis, and
disruption in production and supply chains.
In this context, the packaging segment
once again demonstrated its resilience by 2020 2021 2022
increasing sales by 8% compared to the
same period in 2021. According to statistics
from the Confederation of European Paper
Industries (CEPI), it is estimated that the
growth is expected to continue in the coming
packaging market share has remained stable,
years.
representing 59.8% of the total production of
paper and cardboard (59.1% in 2021).
In Germany, we continued the promotion of
the different product ranges in our portfolio,
The packaging sector continued to benefit
particularly in the areas of e-commerce and
from the substitution effect resulting from
maritime transportation solutions (one of
the community phase-out standards for
the fastest growing areas in the German
plastic packaging. Paper packaging can be
packaging market), and in the sale of standard
easily recycled and does not pose any threat
products from Inapa Packaging (Stop Gliss
to the environment. With the increasing
solutions, among others). We also maintained
demand in its various uses such as food and
our focus on process improvement and in the
beverages (Thermal packaging or Packaging
harmonization of the product portfolio through
for food) or in other sectors of the industry
the Inapa Deutschland sourcing chain, thereby
and transportation (Lightweight packaging),
optimizing costs and increasing profitability.
ANNUAL RESULTS ANNOUNCEMENT 2022 20 INAPA




Despite the challenges presented in 2022, impacted by the transition in early January
Inapa maintains its prominent position in to the new ERP of the Group (SAP S/4HANA)
the French market. The economic situation leading to the reduction in volume in the key &
of great uncertainty experienced this in 2022 major accounts, automotive, and e-commerce
led to disruptions across the supply chains channels. The impact of the slowdown in our
which we were able to overcome due to our commercial performance associated with
strong relationships with our suppliers. This the increase in operational costs (particularly
advantage allowed us to continue to support in transportation and distribution, energy &
our customers by providing them a wide range utilities, and personnel costs) resulted in a
of offerings for sectors such as agri-food, wine, deterioration of profitability compared to 2021.
chemical industry, and cosmetics, among We were, however, successful in controlling
others. We maintained a solid business and protecting the commercial margins by
development capacity supported by the applying an effective pricing strategy and
modernization of our sales tools (websites) the implementation of actions to increase
and by the reinforcement of the training to productivity and mitigate risks caused by high
our sales team (in topics such as new products inflation.
and sales techniques). We remained focused
on maintaining our margin and on the The operational results in the packaging area
operational integration strategy of the three were €3.9 million, representing 4.5% of sales
packaging companies in France. The goal of (€4.4 million and 5.5% in 2021).
the integration is to optimize best practices
in logistics and back-office areas, thereby
ensuring high levels of profitability.

In Portugal, despite the positive return on
investment from different options (e.g. offering
customized and engineered packaging
solutions; pursuing a diversification agenda for
our customer portfolio; entering new market
segments), sales evolution was negatively
ANNUAL RESULTS ANNOUNCEMENT 2022 21 INAPA




VISUAL COMMUNICATION



In 2022 the business of the Visual Sales (million euros)
Communication generated 31.4 million
euros of sales, presenting a growth of about 31,7 30,1 31,4
4% compared to 2021.

After two years of being impacted by the
challenges posed by the Covid-19 pandemic,
in particular, the reduction of events and
advertising investments, the market has seen
a recovery in the first months of 2022. Along 2020 2021 2022
with a greater willingness to invest in new
equipment by our clients, there has been
an increase in the flow of orders and in the
greater competition in the market, generating
demand for maintenance and spare parts
pressure on margins.
services. For the first time since April 2020,
we participated (again) in specialty fairs (such
In Germany, we launched different initiatives
as FESPA in Berlin, CPrint in Madrid, and
to boost sales such as the diversification of
Portugal Print in Portugal, among others). This
the product portfolio and the reactivation
is a great sales booster, especially in the LFP
of the webshop, along with the holding of
(Large Format Printing) segment.
open house events and technical assistance
workshops in the different locations of
However, the maintenance of high levels of
Inapa ComPlott. We have also organised
inflation in the second half of the year, the
technical training programmes related with
increase in interest rates, the uncertainty
maintenance services in the LFP segment
regarding energy prices, combined with
which is an area of high added value.
forecasts of recession in 2023, led to a
slowdown in demand, more specifically to
In Portugal, there was a slight increase in
a greater reluctance of customers to make
sales which was driven by investments in
new investments in hardware, along with a
large format digital printing equipment and
ANNUAL RESULTS ANNOUNCEMENT 2022 22 INAPA




diversification of our portfolio. However, With this acquisition we have taken another
the combined impact of inflation with the important step towards the growth and
worsening of our operational cost structure, strengthening of our presence in the French
a decrease in demand for higher value-added market, creating the conditions for the
products and intense competition, resulted in development of commercial synergies and
a reduction in gross margin and profitability. the logistics chain. The Group consolidated JJ
The transition to the new ERP of the Group Loos’ operations on December 31, 2022.
(SAP S/4HANA), at the beginning of the year,
brought some challenges and disruptions We will continue to develop the visual
that required resilience and perseverance communication business area in a sustainable
from the entire organization. way through organic growth, and we will keep
an eye out for new opportunities that can
In 2022 the operational performance stood drive growth through acquisitions.
at break-even (vs 0.8 million euros and 2.8%
in 2021).

At the end of the year, the Inapa Group
completed the acquisition of JJ Loos, a French
company specialized in the commercialization
of printing equipment and consumables for
visual communication (Viscom). JJ Loos was
founded in 1964 and is headquartered in
Mulhouse, France, where it is a market leader.
ANNUAL RESULTS ANNOUNCEMENT 2022 23 INAPA




4.5
Outlook for 2023


The year 2022 was a period of uncertainty We anticipate that 2023 will be, like previous
and challenges, with the conflict in Ukraine years, a highly challenging period in terms
and its repercussions on economic activity of the context. We will continue with the
being particularly noteworthy: inflation, implementation of the 2022-24 strategy, which
tightening of central bank monetary policies, consists in promoting efficiency, growth in
and a significant reduction in consumer and non-paper business, and our sustainability
investor confidence, among other. Despite impact, to consolidate our positioning.
this, the European Union’s economy grew by
around 3%, supported by the easing of Covid-19 We will maintain our focus on margin
restrictions and carry-over effects from 2021. In management, by optimizing the product
2023, economic growth is expected to be more mix and driving sales of higher value-added
moderate, being projected at 1% (and in line products, and also by using electronic sales
with the slowdown observed in the second half channels and adopting a highly disciplined
of 2022). The outcome of the conflict in Ukraine pricing approach. The importance of this focus
will be crucial for growth and inflation. is significant given the context of high price
volatility.
In the paper industry, in addition to the
ongoing structural trend of digitization, The process of consolidating the organizational
sustainability issues, and energy trends, other structure to leverage scale and increase
significant movements and trends were efficiency and flexibility will continue. In 2022,
observed in 2022. These include a reduction several initiatives were implemented towards
in demand for coated and uncoated papers, this goal, such as the adoption of the new
an increase in the importance of packaging Group ERP (SAP S/4HANA) in Portugal and
paper compared to graphic art paper, and a Spain, and the development of a logistics
significant increase in prices. project in Germany which aims to optimize
operations in that geography.
ANNUAL RESULTS ANNOUNCEMENT 2022 24 INAPA




The implementation of SAP in France and The reduction in debt levels registered in
Turkey is planned for 2023. This process recent years illustrates the path we intend
will complete the digital transformation to pursue. We will also strive to improve our
of the Group. We will continue focused on impact on the non-financial sustainability
leveraging synergies from the acquisitions of aspects, through the reduction of our
Papyrus Deutschland (including additional ecological footprint, the strengthening and
opportunities identified for implementation rejuvenating of our teams, and the
in 2022 and 2023) and JJ Loos (a visual improvement of the overall impact of our
communication company acquired in activities on society.
November 2022).

Regarding growth, Inapa will continue
investing in non-paper products to promote
organic growth through cross-selling. As
in 2022, with the acquisition of JJ Loos, we
will continue to explore opportunities for
inorganic growth in the Packaging and Visual
Communication (Viscom) areas.

Financial sustainability will continue to be
essential in the context of inflation and
rising interest rates. We will carry on highly
focused on debt reduction, working capital
management, and optimization of gross
margin.
ANNUAL RESULTS ANNOUNCEMENT 2022 25 INAPA




05 Consolidated Accounts

INAPA - Investimentos, Participações e Gestão, SA
CONSOLIDATED INCOME STATEMENT AT DECEMBER 31, 2022 AND DECEMBER 31, 2021

(AMOUNTS IN THOUSANDS OF EUROS)

31 DECEMBER 2nd HALF 31 DECEMBER 2nd HALF
2022 2022* 2021 2021*

Tonnes* 714 356 324 471 841 225 448 303
Sales and services rendered 1 230 390 607 204 980 911 527 896
Other income 16 164 9 402 12 506 6 596
Total income 1 246 554 616 605 993 417 534 492

Cost of inventories sold -973 364 -485 342 -782 581 -421 495

Personnel costs -107 193 -54 992 -94 096 -48 746

Other costs -89 936 -42 718 -85 952 -42 912

Operating results before 76 060 33 553 30 789 21 339
depreciations and amortizations


Depreciations and amortizations -23 239 -13 787 -15 304 -7 435

Operating results 52 822 19 767 15 484 13 904

Gains / (losses) in associates 188 34 655 668
Financial results -16 187 -8 157 -14 807 -7 825
Net profit before income tax 36 823 11 644 1 332 6 747

Income tax -19 064 -9 846 1 982 -417
Net profit for the period 17 759 1 799 3 314 6 330


Attributable to:
Shareholders of the company 17 759 1 799 3 314 6 330



Earnings per share on continuing operations - euros
Basic 0,0337 0,0034 0,0063 0,0120
Diluted 0,0272 0,0028 0,0048 0,0093

* Non audited
ANNUAL RESULTS ANNOUNCEMENT 2022 26 INAPA




INAPA - Investimentos, Participações e Gestão, SA
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2022 AND DECEMBER 31, 2021
(AMOUNTS IN THOUSANDS OF EUROS)




31 DECEMBER, 2022 31 DECEMBER, 2021

Assets

Non current assets
Tangible fixed assets 30 822 57 390
Goodwill 228 971 232 620
Right of use assets 34 596 33 105
Intangible assets 129 401 125 471
Investments in associate companies 1 346 2 260
Financial assets at fair value through profit or loss 119 120
Other non current assets 2 749 3 373
Deferred tax assets 25 911 37 148
Total non current assets 453 914 491 487

Current assets
Inventories 89 956 55 032
Trade receivables 49 281 65 801
Income tax receivables 1 321 652
Other current assets 53 017 60 481
Cash and cash-equivalents 16 503 7 982
Total current assets 210 078 189 950
Total assets 663 992 681 437

SHAREHOLDERS’ EQUITY

Share capital 180 135 180 135
Share issue premium 431 431
Reserves 21 282 19 782
Retained earnings -42 926 -46 240
Net profit for the period 17 759 3 314
Total shareholders’ equity 176 681 157 422

LIABILITIES

Non current liabilities
Loans 155 395 183 408
Deferred tax liabilties 50 993 48 618
Provisions 453 62
Employees’ benefits 16 866 21 780
Other non current liabilities 17 17
Total non current liabilities 223 724 253 886

Current liabilities
Loans 82 183 86 387
Trade payables 103 428 109 470
Income tax liabilities 13 302 11 189
Provisions 7 389 1 542
Other current liabilities 57 284 61 542
Total current liabilities 263 587 270 129

Total shareholders’ equity and liabilities 663 992 681 437
ANNUAL RESULTS ANNOUNCEMENT 2022 27 INAPA




06 Additional information


Warning



While the indications reflect current Everyone is cautioned not to give inappro-
expectations, investors and analysts, and priate importance to future information and
in general all users of this document, are indications.
cautioned that future indications are subject
to a variety of uncertainties and risks, many of We assume no obligation to update any future
which are difficult to anticipate. information or indication.




Inapa is admitted to trading on
the Euronext Stock Exchange.

Information about the company can be
consulted through the symbol INA or by
ISIN PTINA0AP0008
Miguel Loureiro
miguel.loureiro@inapa.com
Tel.: +351 213 823 007




Inapa – Investimentos,
Participações e Gestão, SA
Rua Braamcamp,
40 - 9.º Dto
1250-050 Lisboa
Portugal




www.inapa.com