Free English translation for information purposes

AZELIS GROUP NV

Posthofbrug 12 bus 6- 2600 Antwerp Enterprise number 0769.555.240 RLE Antwerp - division Antwerp (the "Company")

ANNUAL REPORT TO THE SHAREHOLDERS DATED MARCH 5, 2024

_________________________________________________________________________________

Dear shareholders,

We have the pleasure to report on the activities of the Company in the financial year 2023 and to submit the annual accounts closed on December 31, 2023 to your approval.

1. Fair view of the development, results and position of the Company

The Company was incorporated on June 10, 2021 under the corporate name "Akita Midco 1 NV". This corporate name was subsequently amended to "Azelis Group NV" on September 21, 2021. On September 17, 2021, the initial public offering of the Company took place. Since that date, the shares of the Company are traded on the regulated market of Euronext Brussels.

The Company has as its main purpose to act as holding company of the Azelis group, the carrying out of advisory, consultancy and management activities as well as the establishment, prudent expansion and management of movable and immovable property for the benefit of the Azelis group.

The activities of the Company relating to the financial year ended December 31, 2023, were closed with a profit of EUR 65,773,130.

The Company's operating income amounts to EUR 84,694,304 and mainly concerns income from recharging costs of central services to the other group companies and income from royalties.

Operating expenses amount to EUR 77,251,783 and are mainly attributable to costs (including depreciations) relating to IT and the IP portfolio after the merger with Azelis Corporate Services NV, personnel and other costs relating to central (holding) services, including advisory & support services and activities for the benefit of the whole or part of the Azelis group and their activities, costs recharged by other group companies to the Company and provisions for risks and costs.

The Company's equity amounts to EUR 6,161,174,912 and the balance sheet total amounts to EUR 6,234,170,431.

The Company's assets mainly concern the participations in group companies, which amount to EUR 5,864,400,606. In addition, the assets comprise EUR 95,214 of incorporation costs, EUR 122,050 of other non-current financial assets, EUR 275,936,833 of intangible assets (EUR 263,844,998 of concessions, patents, licenses, knowhow, trademarks and similar rights, and goodwill for the remainder), EUR 186,512 of tangible assets and EUR 93,429,216 of current assets (trade and other receivables, cash and cash equivalents and accruals).

The Company's capital consists of EUR 5,879,999,963, of which EUR 5,679,999,978 resulting from the contribution in kind of group companies and the capital increase as a result of the Company's initial public offering in September 2021, and EUR 199,999,985 resulting from the capital increase of the Company in the framework of the authorized capital, concluded on May 19, 2023.

Free English translation for information purposes

The Company's liabilities amount to EUR 67,402,407 and concern short-term financial debts, debts in favour of suppliers, taxes, personnel and dividends to be paid, with EUR 17,675 in accruals.

For the remainder, we refer to the consolidated annual report of the Azelis group for additional explanations regarding the development, results and position of the Company and the wider Azelis group.

2. Major events during financial year 2023

2.1 Transactions in Azelis shares

During the year 2023 the Company has acquired 150,000 treasury shares for an aggregate fractional value of EUR 3,615,914, in order to satisfy the obligations arising from the Company's LTIP programme.

As a result hereof, the Company held 283,400 Azelis shares as at December 31, 2023, representing 0.116% of its capital and an aggregated fractional value of EUR 6,831,667 as at December 31, 2023.

The amount reported in the balance sheet under the line "treasury shares", which corresponds to the aggregate acquisition price of these treasury shares, amounts to EUR 6,406,976.

The Company did not dispose of any treasury shares during the financial year 2023.

2.2 Notes

On March 15, 2023, Azelis Finance NV, a wholly owned subsidiary of the Company, issued notes for a total amount of €400 million which are due in 2028, with the Company acting as parent guarantor.

2.3 Capital increase

On May 19, 2023, the Board of Directors used its authorization to increase the Company's capital, to increase the capital of the Company by EUR 199,999,985 issuing 10,075,566 new shares at a price of €19.85 per share with the same rights as the existing shares of the Company, within the framework of the authorized capital as detailed in the Articles of Association.

2.4 Merger with Azelis Corporate Services NV

On June 7, 2023, the Company has merged with its wholly owned subsidiary Azelis Corporate Service NV, with Azelis Group NV as surviving entity. From an accounting and tax perspective, the merger was done with retroactive effect as of January 1, 2023; from a legal perspective the merger was realised with effective date July 1, 2023.

3. Risks and uncertainties

On the basis of the current information, the board of directors is not aware of any risks and uncertainties specific to the Company other than those mentioned in the consolidated annual report of the Azelis group.

Free English translation for information purposes

  1. Corporate governance statement. Composition and functioning of the managing bodies and their committees. Independence and expertise of a member of the audit committee
    We refer to the corporate governance statement included in the consolidated annual report of the Azelis group.
  2. Transparency notifications
    We refer to the corporate governance statement included in the consolidated annual report of the Azelis group.
  3. Capital structure and information required pursuant to article 34 of the royal decree of November 14, 2007 regarding the obligations of issuers of financial instruments admitted to trading on a regulated market
    We refer to the corporate governance statement included in the consolidated annual report of the Azelis group.
  4. Key features of the internal control and risk management systems
    We refer to the description of the key features of the internal control and risk management systems of the Company in the financial reporting process included in the chapter "Risk management" of the consolidated annual report of the Azelis group.
  5. Diversity statement
    We refer to the diversity statement included in the consolidated annual report of the Azelis group.
  6. Remuneration report
    We refer to the remuneration report statement included in the consolidated annual report of the Azelis group.
  7. Conflicts of interest
    We refer to the description of the situations in which a conflict of interest was declared in the corporate governance statement included in the consolidated annual report of the Azelis group.
  8. Exceptional activities or special assignments carried out by the external auditor
    During the financial year closed on December 31, 2023, the auditor carried out exceptional activities and special assignments with regard to the Company for a total amount of EUR 36,800. Members of the network of the auditor carried out exceptional activities for an amount of EUR 12,874. These activities and assignments mainly related to the review of the Microsoft Dynamics 365 implementation and controls relating to M&A transactions.
  9. Major events that took place after the end of the financial year
    The major events that took place after the end of the financial year are described in the chapter "Subsequent events" of the consolidated annual report of the Azelis group.

Free English translation for information purposes

  1. Circumstances that may significantly affect the development of the Company
    The circumstances that may significantly affect the development of the Company are described in the chapter "Our performance" of the consolidated annual report of the Azelis group.
  2. Research and development activities
    There were no research and development activities in the Company during 2023.
  3. Branches
    The Company has no branches.
  4. Use of financial instruments
    We refer to the description of the use of financial instruments by the Company and the related risks and risk management systems included in the chapter "Risk management" and "Internal control on financial reporting" of the consolidated annual report of the Azelis group.
  5. Proposals to the general meeting: dividend and discharge
    We propose to allocate an amount of EUR 462,635 to the legal reserves and to pay a dividend for a total gross amount of EUR 53,311,241, or currently rounded EUR 0.22 gross per share, taking into account the number of shares outstanding as at 31 December 2023, to be distributed from the profit of the financial year for EUR 9,252,699 and for the remainder from the available reserves.
    Finally, we propose to grant discharge to the directors and the auditor for the exercise of their respective mandates during the past financial year.
    Antwerp, March 5, 2024.
    For the board of directors,

AU-R-ORA BV

Cloudworks BV

Director

Director

with permanent representative

with permanent representative

Anna Bertona

Thijs Bakker

Attachments

Disclaimer

Azelis Group NV published this content on 29 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 May 2024 17:27:05 UTC.