AD Plastik d d : Interim report Q1 2024

INTERIM REPORT BY MANAGEMENT OF AD PLASTIK GROUP AND AD PLASTIK D.D. SOLIN FOR THE FIRST THREE MONTHS OF 2024

2

AD PLASTIK GROUP AND

AD PLASTIK D.D. SOLIN

REPORTS FOR THE PERIOD

JANUARY 1, 2024 - MARCH 31, 2024

The financial statements of all companies within the AD Plastik Group have been prepared on the going concern basis.

The most recent annual financial statements are available on the Zagreb Stock Exchange website at the following link:

Contents	2
❶ A BRIEF OVERVIEW	3
A brief overview in numbers	4
Comment by Marinko Došen, President of the Management Board ...	5
❷ FINANCIAL RESULTS	6
Financial results for the first quarter of 2024	7
Operating revenue and market trends	11
Affiliated company EAPS	12
ADPL share	14
Alternative performance measures	16

	❸ FINANCIAL STATEMENT OF AD PLASTIK GROUP	18
	Issuer's general data	19
	Balance sheet	20
	Statement of profit and loss	24
	Statement of cash flows (indirect method)	28
	Statement of changes in equity	30
	Notes to Financial Statements - QFS	34
	❹ FINANCIAL STATEMENT OF THE COMPANY AD PLASTIK	35
	Issuer's general data	36
	Balance sheet	37
The same accounting policies	Statement of profit and loss	41
have been applied in preparing	Statement of cash flows (indirect method)	45
the financial statements for the	Statement of changes in equity	47
quarterly reporting period as in	Notes to Financial Statements - QFS	51
the most recent annual financial
statements.	MANAGEMENT'S STATEMENT OF RESPONSIBILITY	52

3

1

❶A BRIEF OVERVIEW

INTERIM MANAGEMENT REPORT FOR THE FIRST THREE MONTHS OF 2024

4

A BRIEF OVERVIEW IN NUMBERS

compared to the first	compared to the first	compared to the first
three months of 2023	three months of 2023	three months of 2023
+28V7232V6858V42GROUP
.1%	+31.7%	+56.9%	PLASTIK
42.36	3.68	1.07
EUR	EUR	EUR
million	million	million	AD
OPERATING	EBITDA	NET
REVENUE	(EARNINGS BEFORE INTEREST,	PROFIT
TAXES, DEPRECIATION)

EUR	EUR	EUR	D.D.
34.15	2.81	0.86
PLASTIKAD
+34.6%	.2%	+306.4%
million	million	million

3565+277310000

compared to the first	compared to the first	compared to the first
three months of 2023	three months of 2023	three months of 2023

INTERIM MANAGEMENT REPORT FOR THE FIRST THREE MONTHS OF 2024

5

COMMENT BY MARINKO DOŠEN,

PRESIDENT OF THE MANAGEMENT BOARD

The operating results of AD Plastik Group, which are in front of you, show further recovery and stabilization of the market in the first quarter of 2024.

Although this year is marked by the start of serial production, namely regarding twenty-one new projects, their full impact on profitability and capacity utilization will be seen in the last quarter of this year, that is, mostly in the next year. The start of serial production is planned for most of the projects in the first half of the year, but six projects will start their serial production in the last quarter, when earlier started projects will also reach the quantities of the contracted production levels. We are ready and fully focused on industrialization and quality preparation and realization of the mentioned projects.

It was the beginning of serial production of few projects that had the greatest impact on the increase in operating revenue in the observed period, but we must not ignore the increase in customer orders for projects whose production started in previous periods, and which also have had a positive im- pact. Thus, the operating revenue of the Group for the first three months amounted to EUR 42.36 million, which was an increase of 28.1 percent in relation to the comparative period. EBITDA increased by 31.7 percent at the Group level and amounted to EUR 3.68 million, and the realized net profit recorded a growth of 56.9 percent and amounted to EUR 1.07 million.

Due to the present geopolitical turmoil and further uncertainties in the mar- ket, there is no room for relaxation, but it is a pleasure to see that the efforts we have been making are paying off. We have completely focused our sales activities on the European market and sealing deals for new projects that will bring better occupancy of production capacities in the future.

Our basic goals in the coming period are to continue preserving financial stability, increasing capacity utilization and profitability, and successful realization of new projects. At the same time, we are strongly focused on improvements in the areas of development and process automation.

Although the challenges are still present, we are determined in our efforts
and have a clear vision of strengthening our position in the European car	Marinko Došen
market and adapting to the new era of the industry.	President of the Management Board

6

2

❷FINANCIAL RESULTS

INTERIM MANAGEMENT REPORT FOR THE FIRST THREE MONTHS OF 2024

7

FINANCIAL RESULTS

FOR THE FIRST

QUARTER OF 2024

AD Plastik Group is comprised of the following companies during the reporting period:

• AD Plastik d.d., Croatia
• AD Plastik Tisza Kft., Hungary
• ADP d.o.o., Serbia
• AD Plastik d.o.o., Slovenia
• AO AD Plastik Togliatti, Russia
• ZAO AD Plastik Kaluga, Russia

(hereinafter: AD Plastik Group)

The continuation of AD Plastik Group's recovery is evident, which is confirmed by the financial results of the first quarter of 2024. Compared to the same period last year, the operating revenue of the Group grew by 28.1 percent, and at the level of the parent company, by 34.6 percent. The main reasons for the increase in revenue are to a lesser extent related to the increase in customer orders due to the growth of the market, and to a greater extent to the previously announced start of the realization of new projects and the revenue associated with them.

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) amounted to EUR 3.68 million at the Group level and were 31.7 percent higher than EBITDA achieved in the first quarter of last year. EBITDA at the level of the parent company grew by 27.2 percent and amounted to EUR 2.81 million. The growth of customer orders had a positive effect on capacity utilization and consequently on the realized EBITDA, while project revenue in the reporting period was mostly related to the sale of tools. Its impact on the growth of capacity utilization and profitability will be noticeable in the second part of the year, when the serial production of most of the mentioned projects will begin and when the contracted serial quantities will be reached.

At the Group level, a net profit of EUR 1.07 million was achieved, which represents a growth of 56.9 percent in relation to the comparative period. The parent company also recorded a better net result, namely 306.4 percent higher than the first quarter of last year, and the realized net profit amounted to EUR 0.86 million.

The positive impact of the affiliated company from Roma- nia on the Group's results in the reporting period was lower than in the comparative period. Such a result was expected

considering that the factory in Romania is in a transition phase, which means that the production of old vehicle models is end- ing, and the production of new ones is in the preparatory phase for launch. The profit of EAPS in the first three months of 2024 amounted to EUR 1.22 million, but during the year, an increase in serial quantities is expected, and therefore an increase in revenue and profitability.

Along with the fulfillment of increased customer demands, increased capacity utilization, and better cost efficiency, during the reporting period the focus of the company was still on the successful realization of new projects. Preparations for serial production and industrialization activities are in full swing, which is reflected in staff engagement, the use of production capacities for conducting trials and increased costs, but also in indebtedness. Indebtedness in the reporting period grew in relation to the comparative period, but in relation to the end of 2023, a slight decrease is visible. With the start of serial production of all projects by the end of the year, a further reduction in indebtedness is expected.

Although no new deals were sealed in the reporting period, the company's sales activities are still intensive and focused on the European market, and negotiations and quotation activities are currently underway.

The main goals of the company in the coming period are still the preservation of financial stability, increase of capacity utilization with better cost efficiency and growth of profitability, with a primary focus on the successful realization and start of serial production of all new projects.

INTERIM MANAGEMENT REPORT FOR THE FIRST THREE MONTHS OF 2024

8

KEY PERFORMANCE INDICATORS

Indicators

(in EUR 000)

Operating revenue

Sales revenue

Operating expenses

EBITDA*

EBITDA last 4 quarters*

Net profit

NFD*

NFD/EBITDA last 4 quarters*

EBITDA margin *

Net profit margin *

ROE*

Capex*

1Q 2023

33,068

30,791

32,997

2,798

107

681

38,574

361.26

8.46%

2.06%

-8.59%

1,362

AD Plastik Group
	1Q 2024	Index
42,357			128.09
41,287			134.08
41,120			124.62
3,684			131.65
8,097			7583.44
1,068			156.91
45,468			117.87
5.62			1.55
8.70%			24 bps
2.52%			46 bps
-0.89%			770 bps
2,401			176.32

1Q 2023

25,368

23,109

25,099

2,208

410

211

34,687

84.70

8.71%

0.83%

-14.46%

1,045

AD Plastik d.d.

1Q 2024

34,146

32,527

33,130

2,810

4,206

857

43,103

10.25

8.23%

2.51%

1.84%

2,204

Index

134.60

140.76

132.00

127.23

1026.98

406.35

124.26

12.10

-48 bps

168 bps

1630 bps

210.95

• In addition to the measures defined by International Financial Reporting Standards (IFRS), AD Plastik Group also uses alternative performance measures in its reports. An overview and definition of the measures used in this document are provided in Addendum 1.

OPERATING EXPENSES

Operating expenses

(in EUR 000)

OPERATING EXPENSES

Changes in the value of work in process and finished products

Material costs

Staff costs

Amortization

Other costs

Provisions

Other operating expenses

	AD Plastik Group
1Q 2023			1Q 2024	Index
32,997	41,120		124.62
273	280		102.59
21,403	28,799		134.56
7,133	7,412		103.92
2,727	2,447		89.74
1,322	1,681		127.13
0	0		-
139	500		359.88

	AD Plastik d.d.
1Q 2023			1Q 2024	Index
25,099	33,130			132.00
230	293			127.73
16,874	24,674			146.23
4,903	4,947			100.89
1,939	1,793			92.48
1,101	1,340			121.75
0	0			-
52	82			158.16

INTERIM MANAGEMENT REPORT FOR THE FIRST THREE MONTHS OF 2024

9

NET FINANCIAL RESULT

The negative effect of exchange rate differences in the reporting period decreased, compared to the same period of the previous year, due to a significantly less weakening of the Russian ruble, but with the present weakening of the

Hungarian forint. The negative effect of interest was visible in the Group and the parent company due to the increase in variable interest rates and the higher cost of new indebted- ness.

Net financial result

(in EUR 000)

FINANCIAL REVENUE

Positive exchange rate differences

Interest income

FINANCIAL EXPENSES

Negative exchange rate differences

Interest expenses

FINANCIAL RESULT

	AD Plastik Group
1Q 2023		1Q 2024	Index
11	106			992.45
-	-			-
11	106			992.45
531	680			128.04
383	292			76.38
148	388			261.42
-520	-574			-

1Q 2023

93

-

93

98

-

98

-5

AD Plastik d.d.

1Q 2024

154

-

154

314

1

313

-159

Index

165.84

-

165.84

318.53

-

317.94

-

INTERIM MANAGEMENT REPORT FOR THE FIRST THREE MONTHS OF 2024

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FINANCIAL POSITION

Abbreviated balance sheet

(in 000 EUR)

ASSETS

Noncurrent assets

Current assets

Prepaid expenses and accrued income

LIABILITIES

Noncurrent liabilities

Current liabilities

Accrued expenses and deferred revenue

CAPITAL

	AD Plastik Group
31 Dec 2023		31 March	Index
	2024
189,136	196,559			103.92
124,117	123,496			99.50
63,956	72,149			112.81
1,062	913			85.99
90,673	97,192			107.19
33,500	25,763			76.91
54,553	60,893			111.62
2,620	10,536			402.20
98,463	99,367			100.92

		AD Plastik d.d.
	31 Dec 2023		31 March
		2024
163,908	172,262
116,902	115,895
46,159	55,693
846	674
72,793	80,291
30,048	22,656
41,902	48,855
843	8,779
91,115	91,971

Index

105.10

99.14

120.65

79.57

110.30

75.40

116.59

1,041.13

100.94

Although investments in new projects continued, due to the financing of tool making and investments in specific equipment and packaging, the effects of the collection of part of the tools were visible, so the indebtedness did not increase in the reporting period, but slightly decreased compared to the end of the previous year.

The Group's net financial debt amounted to EUR 45.5 mil- lion, which was EUR 0.41 million less compared to Decem- ber 31, 2023. The parent company's net financial debt has decreased by EUR 0.82 million and amounted to EUR 43.1

million. The NFD/EBITDA indicators for the Group and the parent company were more favorable than at the end of 2023, but they are still at higher levels and their further normalization is expected in the coming periods. The indebtedness ratio at the Group level slightly increased compared to the end of the previous year, when it amounted to 0.48, and as of March 31, 2024, it amounted to 0.49, while in the parent company it increased from 0.44 to 0.47. Return on equity (ROE) amounted to -0.9 percent at the Group level, or 1.8 percent in the parent company.