February 2024 letter

Ready for new opportunities after a challenging 2023

Many are no doubt happy to put 2023 behind them, challenging as it was. Smart Retur performed relatively well despite the combined challenges of interest rate hikes, high electricity prices and inflation. During 2023, we invested in 3 new warehouses in Scandinavia. This is to ensure that our customers have quick access to pallets wherever they need them, but also to streamline and optimize the transport and distribution network so that unnecessary freight is avoided. We have signed agreements with several new major suppliers and customers, which will strengthen our position with both existing and new customers. As a partner, SmartRetur will therefore ensure delivery for its customers even in times of lower supply. The investment in 2023 ensured that 17 million reusable pallets were not thrown away but put into circulation for our partners. We repaired 5.4 million pallets, and therefore ensured that the reuse rate for SmartRetur was as high as 98,4%. Martin Malmros and Torbjörn Pettersson oversee a testrun of our new visual inspections system in Gothenburg

So what do we see for 2024? The quest for less waste and increased reuse continues in the coming year. SmartRetur will invest in and build reuse capabilities for the Scandinavian market: - Increase our efficiencies on transport optimization, shorter routes and electricity. - Increase our efficiencies on sorting and storage of pallets through automation. - Increase material recycling vs. energy recycling of disposable wood. In 2024 Smart Retur will most likely have a forceful breakthrough of implementing the pooling plastic pallet in the Danish market. There are several fruitful discussions going on with major customers and this is the beginning of how Danish producers, wholesalers and supermarkets can become more sustainable, efficient and profitable. We are building a pooling system with our plastic pallet that is similar and compatible to the Swedish (SRS) and Norwegian (NLP) systems and thereby open up for a seamless integrated Nordic palletflow (Interpooling). CEO Denmark Henrik Skøtt and Sales Director Brian Jacobsen ready for implementing Smart Retur’s plastic pallets in the Danish market.

Our CSO Stine Alvestad is digging into the new EU regulation New regulations coming In 2023 we heard about the wave of new regulations that would affect both the packaging, waste, and recycling industry. The new packaging regulation from the EU (PPWR) has not yet been finalized, but we know there will be stricter requirements for more reusable, recyclable and recycled packaging and materials. Also, requirements linked to reporting and pay of remuneration from the introducer/producer of the pallets to the market will be emphasized, as well as waste handling. Negotiations are still on, and regulations are expected finalized before summer. Smart Retur is paying close attention to the process and will build systems and support for our customers going forward based on the outcome of the upcoming regulations.

Greetings from your friends at Smart Retur For further information: Magnus Krook +46 72 2233 277