AD Plastik d d : Interim report 9M 2023

2023

INTERIM REPORT

BY MANAGEMENT OF

AD PLASTIK GROUP AND

AD PLASTIK D.D. SOLIN

FOR THE FIRST NINE

MONTHS OF 2023

AD Plastik Group and AD Plastik d.d. Solin

Reports for the period

January 1, 2023 - September 30, 2023

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:

The same accounting policies have been applied in preparing the financial statements for the quarterly reporting period as in the most recent annual financial statements.

Interim Management Report	3

Contents

• A brief overview in numbers
  7 Comment by Marinko Došen, President of the Management Board
  8 Financial results

	for the first nine months of 2023	Management
12	Operating revenue per sales markets
13	AD Plastik Group with the consolidation	Report
	of the corresponding ownership part
	in the affiliated company
15	Share

17 Addendum 1 - Alternative performance measures

21 Balance sheet

1. Statement of profit and loss

1. Statement of cash flows
   (indirect method)

1. Statement of changes in equity

1. Notes to financial statements - QFS

37 Balance sheet

1. Statement of profit and loss

1. Statement of cash flows
   (indirect method)

1. Statement of changes in equity

1. Notes to financial statements - QFS

Financial statement of AD Plastik Group

Financial statement of the company AD Plastik

51 Management's statement of responsibility

Management1 Report

Interim Management Report

First nine months of 2023

5

A brief overview in numbers

AD Plastik Group

EUR 94.97

million

OPERATING REVENUE

EUR 6.92

million

EARNINGS BEFORE INTEREST, TAXES,

DEPRECIATION AND AMORTIZATION (EBITDA)

EUR 0.40

million

+14.7%

compared to the first nine months of 2022

+350.5%

compared to the first nine months of 2022 *

• EBITDA in 2022 have been normalized

NET PROFIT

Interim Management Report

First nine months of 2023

6

A brief overview in numbers

AD Plastik d.d.

EUR 70.06

million

OPERATING REVENUE

EUR 2.87

million

EARNINGS BEFORE INTEREST, TAXES,

DEPRECIATION AND AMORTIZATION (EBITDA)

EUR 0.12

million

+14.8%

compared to the first nine months of 2022

+47.7%

compared to the first nine months of 2022 *

• EBITDA in 2022 have been normalized

NET PROFIT

Interim Management Report	First nine months of 2023	7

Comment by Marinko Došen, President of the Management Board

We present you the AD Plastik Group's business results for the first nine months, which indicate a gradual stabilization of the market. This is manifested through the growth of sales of new cars, thereby increment in their production, that is, orders from our customers. Although we will certainly still have to wait for the figures in the car market to reach the pre-pandemic ones, positive trends significantly facilitate business and plan- ning.

Better capacity utilization due to growth in orders, adjustment of sales prices, normalization of energy sources and material prices have had a positive effect also on the movement of margins and profitability. In the first nine months, the Group's operating revenue was higher by 14.7 percent compared to the same period last year and amounted to EUR 94.97 million, and the revenue achieved in the EU and Serbian markets was higher by as much as 20.4 percent.

EBITDA recorded a significant growth of 350.5 percent at the Group level and amounted to EUR 6.92 million. Although a modest net profit of EUR 0.4 million was achieved, significant progress was evident in comparison to the comparative period.

In the observed period, our focus was primarily on high-quality preparation and industrialization of new projects, related to which serial production will begin at the end of this year and mostly during the next year. Since good preparation is already half the job, I believe that we will successfully start the serial production of the projects that are ahead of us, because it is one of our most important tasks at the moment.

Currently, 30 projects in Europe are active, of which we expect the beginning of serial production for three projects by the end of the year, and next year serial production will start for 22 projects.

At the same time, our sales activities are directed towards new projects in the European market, with constant improvements and enhancements in our development activities. Despite the very demanding circumstances and global uncertainties, the slight recovery of the market gives reason for optimism and is an additional motive for us to realize our long-term goals.

In addition to the already recognized quality of the products we offer, our mission is to strengthen our position as a development supplier in this part of Europe, and we have been working intensively on this. Products with added value, for us, but also for our customers, are a long-term vision of successful survival in the automotive world, which we certainly strive for.

Marinko Došen

President of the Management Board

Interim Management Report

First nine months of 2023

8

Financial results

for the first nine months of 2023

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 operating revenue of AD Plas- tik Group for the first nine months of 2023 amounted to EUR 94.97 mil- lion, which is a growth of 14.7 percent compared to the same period of the previous year. In the parent company, operating revenue was

14.8 percent higher and amounted to EUR 70.06 million. Recorded rev- enue growth is primarily related to growth in customer orders, due to normalization in supply chains and semiconductor purchasing.

Earnings before Interest, Taxes, Depreciation and Amortization (EBIT- DA) amounted to EUR 6.92 million at the Group level and EUR 2.87 million at the level of the parent

company. This is a growth of 350.5 percent at the Group level, or 47.7 percent at the level of the parent company, compared to the same period last year when the realized EBITDA were normalized for the value adjustment of the investments in Russia. The growth in customer orders, which has a positive effect on capacity utilization, along with the adjustments of sales prices and the normalization of energy sources and material prices, have had a positive effect on the movement of margins and profitability.

Although the realized net profit was modest in the first nine months, significant progress is visible compared to last year's results. Thus, the net profit of the Group amounted to EUR 0.4 million, while the net profit of the parent company was EUR 0.12 million.

The affiliated company from Ro- mania also recorded an 11.3 percent increase in revenue and a

30.3 percent increase in net profit. This had a positive effect on the Group's net result, while the divi- dend paid in the observed period

had a positive effect on the realized net profit of the parent com- pany.

In the observed period the company was focused on project and industrialization activities of significant new deals sealed in previous periods, the realization of which, i.e. the start of serial production, is expected at the end of 2023 and during 2024. Investments in new specific equipment and temporary financing for the manufacturing of tools for the aforementioned activities consequently influenced the growth of indebtedness.

The total value of AD Plastik Group's newly sealed deals for the European market in the first nine months was EUR 95.4 million, and all deals were sealed with Stellan- tis for various vehicle models and production sites.

Maintaining financial stability, increasing efficiency and profitabili- ty, and successful industrialization of new projects are still the main goals of the company in the coming period.

Interim Management Report	First nine months of 2023	9

Key performance indicators

Indicators (in EUR 000)

Operating revenue

Sales revenue

Operating expenses

EBITDA**

EBITDA last 4 quarters**

Net profit

NFD*

EBITDA margin**

Net profit margin*

ROE*

Capex*

	AD Plastik Group				AD Plastik d.d.
3Q 2022			3Q 2023	Index		3Q 2022			3Q 2023	Index
82,816			94,972			114.68		61,057			70,064			114.75
81,241			90,773			111.73		59,904			65,733			109.73
100,698			95,615			94.95		65,831			72,570			110.24
1,536			6,918			450.45		1,946			2,873			147.67
5,230			5,963			114.01		4,893			1,876			38.34
-11,553			403			-		-12,609			118			-
40,806			43,522			106.66		36,648			40,009			109.17
1.85%			7.28%			543 bps		3,19%			4,10%			91bps
-13.95%			0.42%			1437 bps		-20,65%			0,17%			2082 bps
-9.33%			2.13%			1145 bps		-11,52%			-1,12%			1040 bps
4,464			6,287			140.84		2,627			4,596			174.94

• In addition to the measures defined by International Financial Reporting Standards (IFRS), AD Plastik Group also uses alternative perfor-

mance measures in its reports. An overview and definition of the indicators used in this document are provided in Addendum 1

• Data related to EBITDA and EBITDA margin from the first nine months of 2022 have been normalized in terms of value adjustments related to Russia

Operating expenses

Operating expenses					AD Plastik Group				AD Plastik d.d.
(in EUR 000)				3Q 2022			3Q 2023	Index		3Q 2022			3Q 2023	Index
OPERATING EXPENSES	100,698	95,615			94.95	65,831	72,570			110.24
Changes in the value of work in	-224	427			-	117	322			274.20
process and finished products
Material costs		56,118			61,746			110.03		43,017			48,639			113.07
Staff costs		21,491			21,831			101.58		13,349			15,137			113.39
Amortization		9,464			7,561			79.90		6,720			5,379			80.05
Other costs		11,113			3,594			32.34		2,481			2,884			116.23
Other operating expenses			2,737			455			16.63		146	208			142.51

Interim Management Report	First nine months of 2023	10

Net financial result

Net financial result		AD Plastik Group			AD Plastik d.d.
(in EUR 000)	3Q 2022	3Q 2023	Index	3Q 2022	3Q 2023	Index
FINANCIAL REVENUE	3,391	93	2.73	1,846	2,766	149.90
Positive exchange rate differences	3,264	-	-	28	-	-
Interest income	128	93	72.56	307	283	92.27
Dividends	-	-	-	1,511	2,484	164.35
FINANCIAL EXPENSES	367	2,493	679.64	10,248	405	3.95
Negative exchange rate	-	1,911	-	4	0	2.72
differences
Interest expenses	367	583	158.85	290	405	139.69
Value adjustment of financial	-	-	-	9,954	-	-
assets
FINANCIAL RESULT	3,024	-2,401	-	-8,403	2,361	-

The negative impact on the Group's net financial result occurred due to negative exchange rate differences generated primarily due to the weakening of the Rus- sian ruble. A positive effect of the dividend payment of

the affiliated Romanian company is visible at the parent company's level, and in the reporting period there were no value adjustments of the financial assets.