Our principles of activity and management of the value chain Within the Romanian retail market, we position ourselves as a top discounter and focus on selling a wide range of food and non-food products. We pay close attention to the structure of our value chain, assessing the direct and indirect effects generated by our operations, including stores and logistics centers, as well as those upstream, i.e. the supply chain, and downstream, represented by the distribution of products and services. We are committed to promoting sustainability in all regions where we operate, paying particular attention to the potential impact of our activities on the environment and society. We conduct a rigorous assessment of external risks and opportunities that could influence the company's governance and performance. For us, it is essential to take a preventive approach, reduce the negative impact and amplify the positive benefits of our work. We carry out our activity following a series of people-oriented principles. Our objectives regarding how to carry out the activity are based on the principle of operational excellence, thus wanting to ensure that our customers can purchase their desired products as conveniently as possible, offering good prices, quality, assortment and service. We value everyone equally, and our relationships are based on mutual respect, whether they involve suppliers, customers, employees or other categories of stakeholders. We strive to identify new processes and needs where we can make a valuable contribution, and we are deeply aware of the importance of collaborating with all stakeholders along the value chain. This includes manufacturers, suppliers, employees and subcontractors in REWE logistics centers and PENNY stores, customers, academia and others. We recognize that many of these partners can significantly influence our business, whether through the supply chain or the distribution chain of products. In view of uncertainties related to macroeconomic trends, such as slowing economic growth, rising interest rates, we are actively monitoring the situation and ready to adjust our business operations. We also continue to focus on pricing. Regionality remained the priority direction in the development of our product portfolio in 2024 as well. We continued to invest in expanding collaborations with local producers and further developed partnerships aimed at supporting the local economy. Thus, our products are developed both to meet the needs of our customers, but at the same time they also support local producers, bringing added value to the national economy. Our product portfolio in 2024 continued to support local producers, with 88.09% of total purchases coming from local suppliers and 71% of food products coming from Romania. We have kept our commitment to offer our customers 100% Romanian meat production, and 53.61% of our stores have been provided with butcheries from local producers (who operate within a radius of 100 km from the store). We have developed the product quality and safety auditing system, increasing the number of audits carried out at our suppliers in the case of private label products. At the same time, we continue to require all our private label suppliers to hold at least one certification recognized by the Global Food Safety Initiative (GFSI). Private label (also referred to as private label or own label) is a trademark owned by REWE (Romania) S.R.L. or by REWE Group, with intellectual property rights or centers for products marked as "private label". In PENNY Romania stores, our customers can find both private labels and exclusive brands. An exclusive brand can be a product for which the intellectual property rights have been assigned by the trademark owner to REWE (Romania) S.R.L., or non-branded products made at the request of PENNY. As we are aware of our consumers' preference for novelty and quality, we strive to regularly bring the latest products at competitive prices to our offer that meet their needs and aspirations. Our private labels make up around 30% of turnover, and suppliers of these brands are contractually committed to adhere to our code of conduct. Most of our supply chain is managed within our company, where more than 80% of product selection, negotiation and procurement processes are managed at country level, with the aim of improving regional and local supply. The rest of the products in the Group's supply chain are managed by the REWE Group, which is responsible for centralized sourcing. REWE Group offers buying and negotiation services to companies within the Group and creates its private labels. This centralized delivery model significantly improves operational efficiency and allows the Group to exercise better control over the quality of its products and services, including sustainability aspects. SUSTAINABILITY STEP-BY-STEP CORPORATE GOVERNANCE AND BUSINESS SUSTAINABLE ASSORTMENT ENERGY, CLIMATE AND RESOURCES EMPLOYEES AND SOCIETY INDEX GRI & SASB
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