Wallenius Wilhelmsen (WAWI) Status Update summary

Change in accounting treatment for EUKOR options

• A change in accounting method for Put/Call options linked to a 20% minority shareholding in EUKOR was announced, following a review by new auditor Ernst & Young, and approved by the board.

• The restatement covers 2023 and Q1 2024 financials, reducing equity by USD 977m for 2023 and USD 929m for Q1-24, with corresponding increases in current liabilities and reductions in non-current assets.

• The underlying facts of the option agreement remain unchanged; only the accounting treatment is affected.

• The new treatment recognizes a full liability for the put option and removes the previously recognized non-current asset, with future changes in value recognized directly in equity.

• Restated 2023 and Q1-24 results show improved EBIT and profit figures, with equity ratios dropping to 36.0% and 36.5% respectively, but leverage ratios remain unaffected.

Financial and operational impact

• The restatement is non-cash and does not impact the group's financial obligations, debt covenants, or dividend policy.

• The equity ratio will be reduced, but all financial targets and compliance with covenants are maintained.

• The restated liability is non-cash and non-interest-bearing, excluded from net interest-bearing debt.

• No impact on dividend policy, planned payout, or compliance with debt covenants.

• The restatement does not require reissuance of previous annual or quarterly reports; final effects will be detailed in the Q2-24 report.

Details of option valuation and exercise

• The strike price for the Put/Call options is calculated per the Korean Tax Act of 2002, based on EUKOR's tax results for the last three years, with a 3/6, 2/6, 1/6 weighting.

• Options became exercisable in 2018 but have not been triggered; strong relationship with Hyundai is maintained.

• IFRS requires the Put option to be recorded as a current liability, regardless of exercise probability.

• The liability for the Put option is recorded in full; no separate value for the Call option is included.

• Since 2018, the options were previously accounted for as an integrated derivative asset, with changes in fair value recognized in the income statement.