Rába Jármûipari : 2020. Q1-Q3

Report on the Results of Rába Plc. in Q1-Q3 of 2020

Unaudited. consolidated quarterly report

according to the International Financial Reporting Standards (IFRS)

Company:	RÁBA Automotive Holding Plc.
Company address:	H-9027 Győr. Martin u. 1.
Sector:	Machine industry
Period:	Q1-Q3 of 2020
Phone:	[phone]
E-mail:	[e-mail]
Investor's contact person:	Ádám Steszli

MANAGEMENT REPORT

MAIN RESULTS OF THE COMPANY

• Following the general decline in the economy characteristic for Q1 of 2020 and the shock in demand in Q2, due to the COVID-19 pandemic, Q3 was characterised by a partial pickup in business demand. On a quarterly basis, economic activity was in the range of the levels characteristic for the base period, the demand for the aggregate period, though, was even so significantly lower. Besides drastically declining production and sales volumes, future economic prospects remain uncertain, promising no significant market improvement in the short- and medium-term. Due to the global nature of the economic recession, the figures for Q1-Q3 of 2020 reflected the drastic drop in demand in almost all key segments. A significant decline could be felt in all key markets of the Rába Group. In terms of production costs, there are no signs of easing of the wage pressure, which has been manifest for years, and the continuously rising energy prices have reached a 10-year record high in Q3 of 2020. In terms of sales, Q3 of 2020 was marked by a 16.9 per cent decline in group-level turnover, resulting in an aggregate sales decline for the period Q1-Q3 of 2020 of 26.8 per cent compared to the base period. The sales revenue in Q1-Q3 of 2020 amounted to HUF 27.8 billion, which is HUF 10.1 billion lower than during the previous year. Sales revenues of the business units suggest a uniform and drastic decline in Q1-Q3 of 2020 in all business units. The sales of the Axle business unit, the one with the largest sales, declined by 15.1 per cent, the Components business unit registered a decline by 31.7 per cent, whereas the Vehicle business unit declined by 50.9 per cent compared to the base period. In the case of the Vehicle business unit, the substantial decline in sales was due, in addition to the decline in export activities, to the lack of defence sales. In terms of the exchange rate environment, an increase was manifest in Q1-Q3 of 2020, in the exchange rates of both the USD representing a lesser portion in the company's foreign exchange turnover and in the EUR, representing a more substantial portion of FX sales. The exchange rates of both the USD and of the EUR increased by 7.7 per cent compared to the levels of the base period of one year earlier.
• A factor with a significant impact on the business of the group is that the orders due in 2020 under the new framework agreement concluded with the Ministry of Defence in 2018, have not materialised, thus the quarterly financial results of Rába Vehicle Ltd. and of the group cannot be compared.
• The response of the management to the drastic decline in orders in consequence of the crisis and to the increasing uncertainties regarding the future, has been the adoption of the strategy of forward-looking and flexible adjustment. Thus the development-oriented strategy aims not only to bridge short-term difficulties but also to tackle medium- and long-term challenges.
  The primary element of the crisis-management strategy is ensuring that in spite of difficulties in the supply change, strategic partners receive their orders on a continuous basis, upon timely delivery and in good quality. According to the vision of the company, outstanding delivery of customer demands under all circumstances is the basis for a long-term strategic partnership. The management of the company is intent upon meeting this objective under all circumstances.

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

The second pillar of the crisis strategy is the reorganisation aimed at reducing administration and general overhead costs and improving the efficiency of administration. This set of measures includes the modernisation of the group's organisational structure, the efficiency improvement of the human resource management upon retaining expertise, as well as the optimisation of procurement channels and increasing integrity, upon extremely stringent cost control.

At the same time, management is determined to increase digitalisation ensuring long-term competitiveness, which is the third pillar of the development-oriented strategy. Management views forward-looking investments increasing automation as eminently important in the fields of both production and administration. The necessary financing is to be secured through the stable financial background resulting from the successful operation in recent years, as well as through external, central budget sources.

Volatility in demand may lead to fluctuating capacity utilisation and to declining efficiency. Thus, the flexible adaptation of production to meet changing demands and retaining the turnaround speed of working capital have been in the focus of crisis strategy.

Besides transforming and developing existing processes, management continues to explore acquisition opportunities, thus aiming to achieve organic growth by expanding the product portfolio and broadening resources.

• In Q3 of 2020, upon the impacts of external circumstances, including the decline in sales turnover, shrinking material prices, increasing exchange rates, as well as the impact of high wage and energy prices exerting substantial pressure on the cost side, the effects of the crisis management measures implemented by the Company are already manifest. As a result, the gross margin reached 20.7 per cent, upon an increase by 3.7 percentage points. Owing to the considerable improvement in margins, in spite of the significant decline in sales, gross profit increased by HUF 27 million compared to the base period. In Q1-Q3 of 2020 gross margin reached 18.5 per cent, owing to the improvement of margins in Q3, the gross profit amounted to HUF 5.1 billion.
• The balance of other revenues and expenditures amounted to HUF 672 million in losses during the review period, against the loss of HUF 61 million during the same period of the previous year. The profit of other activities during the review period includes an unplanned write-off in the amount of HUF 296 million due to the unsustainability in accounting terms of the Ministry of Defence capacities.
• As a result of the development-oriented crisis management strategy, in spite of the decline in sales and the cyclical low output of Q3, there is positive operating profit at group level. The operating profit of HUF 65 million achieved in the quarter is HUF 101 million more than the operating profit in Q3 of 2019. In terms of the aggregate period, the drastic effects of the COVID- 19 pandemic are present in the operating profit too: in Q1-Q3 of 2020, the operating result was a loss of HUF 1,037 million. The decline in operating profit was manifest in all business divisions: the contribution of the Axle, Components and Vehicle business units to the group-level operating profit was HUF 286 million, HUF 447 million and HUF 431 million in losses, respectively.
• In terms of cash generating efficiency, the positive impacts of the crisis management measures can be detected: in spite of the low capacity utilisation and the pressure exerted by the wage and energy cost elements, the Company managed to improve its cash generating efficiency by 3.1 percentage points. The Company generated a group-level EBITDA of HUF 651 with an EBITDA efficiency ratio of 7.6 per cent, which is HUF 181 million more than the profit in Q3 of 2019 with a 7.6 per cent EBITDA production efficiency ratio. With the result achieved in Q3, the EBITDA-level profit of the Company in Q1-Q3 of 2020 amounted to HUF 702 million. The contribution of the Axle Business Unit to the group-level EBITDA during the review period was HUF 634 million in profits, whereas the Components and the Vehicle Business Units generated losses of HUF 94 million and HUF 177 million respectively.
• The financial loss in Q1-Q3 of 2020 amounted to HUF 904 million, compared to the loss of HUF 482 million generated during the same period of the previous year. The financial performance was influenced by the realised exchange rate loss of HUF 833 million and the net interest burden of HUF 63 million.

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RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

• The total aggregate income and profit for Q1-Q3 of 2020 amounted to HUF 2,169 million in losses.
• The net borrowing in Q1-Q3 of 2020 shows an increase by HUF 2.7 million compared to the end of last year and a decline by HUF 748 million compared to the same period of last year and amounted to HUF 10.7 billion. The substantial difference between the two points of reference is due on the one hand to the cyclicality within the year of the financing needs of the operating activities. Of the principal factors influencing the level of net borrowing, mention must be made of the cash-generation lower than previously, the working capital declining by HUF 699 million compared to the base period of 2019, as well as of the capital expenditures implemented in pursuit of the modernisation strategy. The revaluation, due to exchange rate fluctuation, of loans, worth HUF 1,006 million not involving cash movements, also contributed to the increase in net borrowing compared to the year-end level.
• The shareholder's equity decreased by 10.2 per cent compared to the same period of the previous year. The shareholder's equity per share reached HUF 1.412/share.

				Q1-Q3			Q1-Q3 2020			Change			Q3 2019			Q3 2020			Change
	thousand HUF			2019
	Sales revenue	37 922 473		27 763 839		-26.8%		10 284 089		8 549 847		-16.9%
	Gross profit	7 181 258		5 140 851		-28.4%		1 711 542		1 738 547		1.6%
	Gross margin	18.9%		18.5%			-0.4%p	16.6%		20,3%			3.7%p
	EBITDA	2 746 558		701 798		-74.4%		471 040		652 713		38.6%
	EBITDA	7.2%		2.5%			-4.7%p	4.6%		7,6%			3.1%p
	Operating profit	1 192 172		-1 037 164		-187.0%		-36 532		64 905		277.7%
	Net financial profit/loss	-481 508		-903 624		-87.7%		-388 070		-252 309		35.0%
	Profit after tax for the	425 356		-2 168 559		-609.8%		-429 034		-267 273		37.7%
	current year
	Total comprehensive	425 356		-2 168 559		-609.8%		-429 034		-267 273		37.7%
	income

GOAL, STRATEGY OF THE BUSINESS

"Thanks to the corporate measures taken and consistently implemented in time to deal with the crisis, Rába Group closed the third quarter with th e second best result of the last five years, a profit at the operating level, despite the drastic decrease in turnover. In addition to urgently restoring the company's operations, our primary goal was to fully meet the rapidly changing demands of our customers. Customer focus is one of the defining pillars of Rába's strategy, which helped stabilize sales revenue and create further growth. It is important to emphasize that in addition to cost reduction, we continued our strategic product and technology development, digitization and automation programs, based on which the company can be the winner of the opportunities offered by the shifting of the supply chains in the wake of the crisis. We expect that in the remainder of the year, under normal operation, there is a good chance for us to meet our targets set at the low point of the crisis: the restoration of the positive and stable operating cash flow and the profitable operations in the second half of the year." - said István Pintér, Chairman-CEO of RÁBA Automotive Holding Plc.

EXTERNAL ENVIRONMENT OF THE BUSINESS

• While market figures for Q1 2020 reflect primarily the decline in the overall economic environment and activities in Q2 are clearly impacted by the shock in demand due to the COVID-19 pandemic, Q3 was characterised by the partial recovery of business demand. On the whole, the activity in Q3 was close to the level of the previous year. Uncertainties remain substantial in terms of future economic market prospects. According to analysts and business players, the coming quarter will determine whether the recovery will be consistent or a "W" pattern can be observed in the economic trend. The latter scenario projects volatile changes in demand for the short- and medium-term, without any substantial increase in demand.

3

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

• In Europe, the heavy truck market saw a substantial increase in demand in Q3 compared to Q2, the level, though, still remains 6 per cent below that of a year earlier. Registration figures although showed a slight increase during Q1-Q3, still remain below last year's level by 35.7 per cent. The North American heavy truck market also picked up after the shock of Q2. All in all, there is a 36.7 per cent decline in months 1-9 of 2020 compared to the levels of the previous year. In terms of the agricultural segment, the demand for Rába produ cts did not change substantially during Q3, thus the demand clearly declined compared to the level of the previous year. The Russian truck and bus market was also characterised by a decline in demand during the review period. Truck production volume declined by 16.5 per cent, while the demand for buses declined by 9.0 per cent. The European passenger vehicle market showed a significant decrease in demand during Q1-Q3 of 2020, new vehicle registrations remained 29.3 per cent below the value for the base period of a year earlier.
• A factor with a significant impact on the business of the group is that the orders due in 2020 under the new framework agreement concluded with the Ministry of Defence in 2018, have not materialised, thus the quarterly financial results of Rába Vehicle Ltd. and of the group cannot be compared.
• The significant decline in demand impacted the entire supply chain: steel prices in Q3 of 2020 were 12.9 per cent, in Q1-Q3 of 2020 were 13.5 per cent lower than during the based period.
• Energy prices during Q1 of 2020 reached a record high for the past 10 years, which was then surpassed in Q3 through further price increase. The record level average price put record high energy market pressure on the cost side of the company's operation. In Q3 of 2020, the average energy price increase reached 20.3 per cent, which meant that overall, in Q1-Q3 of 2020, the average energy price level exceeded the level of the base period by 13.4 per cent.
• With regard to the exchange rate environment, an increase occurred in the case of both the USD, representing a lesser proportion in the FX turnover of the company and the EUR, representing more substantial weight in the FX turnover in Q1-Q3 of 2020. The average exchange rate of both currencies increased by 7.7 per cent compared to the base period.1

		Q1-Q3			Q1-Q3			Change			Q3 2019			Q3 2020			Change
		2019			2020
EURHUF - average	323.2		348.0		7.7%		328.1		353.6		7.8%
EURHUF - end of period	334.7		364.7		9.0%		334.7		364.7		9.0%
USDHUF - average	287.6		309.7		7.7%		295.1		302.8		2.6%
USDHUF - end of period	306.1		311.4		1.7%		306.1		311.4		1.7%
Changes in raw material prices*	122%		106%		-13.5%		119%		104%		-12.9%
Changes in energy prices**	185%		210%		13.4%		177%		213%		20.3%

*Rába indices -own calculation - base: 2007. Q1; av erage values for the period

**Rába indices - own calculation - base: Dec. 2004. Average values for the period

SUMMARY OF RESULTS DURING THE REVIEW PERIOD

Rába Axle Ltd.

The sales revenue of Rába Axle Ltd. in Q1-Q3 of 202 0 amounted to HUF 15.0 billion compared to HUF 17.7 billion achieved during the base period of 2019. This corresponds to a decrease of 15.1 per cent.

On the American market the sales revenue in the reporting period was USD 7.0 million, compared to the USD 9.4 million in Q1-Q3 of 2019. This corresponds to a decrease of 25.5 per cent.

On the EU market Rába Axle Ltd.'s sales figures in HUF terms decreas ed by 14.5 per cent, amounting to HUF 10.6 billion, compared to HUF 12.4 billion during the base period.

European exports remained below the level of the same period a year earlier by 25.3 per cent in Q1-Q3 of 2020 amounting to EUR 22.0 million, compared to HUF 29.5 million in Q1-Q3 of 2019.

1 The average exchange rates were calculated based on the official FX exchange rates of the MNB. Source: http://www.mnb.hu/arfolyam-lekerdezes

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RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

Domestic sales before consolidation amounted to HUF 2,917 million which represents an increase by 1.7 per cent compared to the HUF 2,869 million of the base period.

On the CIS and East-European markets the export sales revenues achieved by Rába Axle Ltd. in Q1-Q3 of 2020 were 100.0 per cent higher than the base period in 2019, increasing from EUR 1.9 million to EUR 3.8 million.

In the other markets. the sales revenue during the reporting period amounted to EUR 2.8 million, which was 55.6 per cent below the EUR 6.3 million turnover of the 2019 base period.

The operating result of the Company in Q1-Q3 of 2020 was a loss of HUF 286 million, compared to HUF 333 million in profits during the same period of the previous year.

At EBITDA level, the operating profit of the Axle business unit was HUF 634 million compared to HUF 1,148 million registered a year earlier.

				Q1-Q3			Q1-Q3			Change			Q3 2019			Q3 2020			Change
	million HUF			2019			2020
	America	2 689		2 197	-18.3%		707	466		-34.1%
	EU - export	9 520		7 650	-19.6%		2 601	2 631		1.2%
	EU - domestic	2 869		2 917	1.7%		876	762		-13.0%
	CIS	614		1 307	112.9%		303	168		-44.6%
	Other	2 027		970	-52.1%		718	281		-60.9%
	Total sales revenue	17 720		15 040	-15.1%		5 206	4 308		-17.2%
	EBITDA	1 148		634	-44.8%		342	341		-0.3%
	Operating profit	333		-286	-185.9%		93	27		-71.0%

Rába Automotive Components Ltd.

The sales revenue of Rába Automotive Components Ltd . amounted to HUF 8.7 billion in Q1-Q3 of 2020, which is a decrease of 31.7 per cent compared to the base period.

Rába Automotive Components Ltd. generates a conside rable portion of its sales on the European market.

European exports during Q1-Q3 of 2020 amounted to EUR 12.1 million, which represents a decrease of 32.8 per cent compared to the EUR 18.0 million of the base period of 2019.

Domestic sales before consolidation amounted to HUF 4,455 million during the reporting period, which corresponds to a decrease by 35.7 per cent compared to the sales revenue of HUF 6,924 million during Q1-Q3 of 2019.

The Business Unit generated losses of HUF 447 million at operating level during the reporting period compared to a profit of HUF 472 million in Q1-Q3 of 2019.

On the level of EBITDA, the loss of the Components business unit was HUF 94 million during the period, compared to the profit of HUF 844 million of the previous year.

				Q1-Q3			Q1-Q3			Change			Q3 2019			Q3 2020			Change
	million HUF			2019			2020
	EU - export	5 804		4 219		-27.3%		1 682		1 424		-15.3%
	EU - domestic	6 924		4 455		-35.7%		1 745		1 598		-8.4%
	Other	0	15		0.0%		0	1	0.0%
	Total sales revenue	12 728		8 689		-31.7%		3 427		3 024		-11.8%
	EBITDA	844		-94	-111.1%		239		50		-79.1%
	Operating profit	472		-447		-194.7%		109		-67	-161.5%

Rába Vehicle Ltd.

The sales revenue of Rába Vehicle Ltd. in Q1-Q3 of 2020 was below the figure of the base period by 50.9 per cent and decreased from HUF 8.8 billion to HUF 4.3 billion.

5

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

A significant portion of the sales revenue of Rába Vehicle Ltd. is generated on the European market. European exports were 28.8 per cent below than the level of the base period, thus declining from EUR 13.9 million to EUR 9.9 million.

Domestic sales before consolidation amounted to HUF 884 million in Q1-Q3 of 2020, compared to HUF 4,326 million during the base period, representing a decrease by 79.6 per cent.

The operating losses amounted to HUF 431 million during the reporting period compared to the profit of HUF 504 million during the base period last year.

On the level of EBITDA, in the reporting period, the Vehicle Business Unit registered losses of HUF 177 million compared to the profit of HUF 704 million in Q1-Q3 of 2019.

				Q1-Q3			Q1-Q3			Change			Q3 2019			Q3 2020			Change
	million HUF			2019			2020
	EU - export	4 477	3 441	-23.1%		1 313		931		-29.1%
	EU - domestic	4 326	884	-79.6%		670		300		-55.2%
	Total sales revenue	8 803	4 325	-50.9%		1 983		1 230		-38.0%
	EBITDA	704	-177	-125.1%		-56	149		366.1%
	Operating profit	504	-431	-185.5%		-129		65		150.4%

The Rába Group

The consolidated sales revenue of the Rába Group in Q1-Q3 of 2020 amounted to HUF 27.8 billion, which is a decline by 26.8 per cent compared to the figure of HUF 37.9 billion reported for the base period Q1-Q3 of 2019.

The operating loss of the group during the current period amounted to HUF 1,037 million, compared to HUF 1,192 million in profits during the same period a year earlier.

During the reporting period, the financial result was a loss of HUF 904 million, which includes, among others, a net interest payment of HUF 63 million, as well as exchange rate losses of HUF 833 million.

Profits from the purchase of investment amounted to HUF 11.9 million during Q1-Q3 of 2020, which includes the adjustment for the 24.9 per cent share in Rekard.

Based on the above, the Rába Group generated net lo sses of HUF 2,169 million in Q1-Q3 of 2020, compared to a profit of HUF 425 million during the same period of the previous year.

On the level of EBITDA. the group registered profits of HUF 702 million in Q1-Q3 of 2020, against last year's figure of HUF 2,747 million.

The Rába Group - other data and events pertaining to the business activity

Sales revenue by business unit

Sales revenue		Axle			Components			Vehicles			Rába Group
(HUF million)								consolidated
2019 Q1			6 510		4 670		4 115			14 725
2019 Q2			6 004		4 632		2 706			12 914
2019 Q3			5 206		3 427		1 983			10 284
2019 Q4			6 069		3 746		2 323			11 859
2020 Q1			6 593		3 762		1 764			11 856
2020 Q2			4 140		1 903		1 331			7 358
2020 Q3			4 308		3 024		1 230			8 550

Breakdown of the sales revenues for Q1-Q3 of 2020

	HUF million			America				EU				CIS		Other		Total
				Total		export		domestic
	Axle	2 197	10 567	7 650	2 917	1 307	970	15 040
	Components	15	8 674	4 219	4 455	0	0	8 689
	Vehicle	0	4 325	3 441	884	0	0	4 325
	Consolidated	2 212	23 275	15 315	7 960	1 307	970	27 764

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RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

Operating profit of group companies

Operating profit

							2019.					2020.
			Q1		Q2		Q3	Q4		Year		Q1			Q2	Q3
Axle			220		20		93	34		367		116			-429	27
Components			178		185		109	192		664		82			-462	-67
Vehicle			540		93		-129	-44		460		-397			-99	65
Other			-8		1		-110	-34		-151		79			8	40
Total			930		299		-37	148		1 340		-120			-982	65
PK2. Companies involved in the consolidation
Company					Share/Issue capital		Ownership			Voting		Classification 2
				in HUF thousand		ratio (%)			ratio 1
Rába Axle Ltd.							9,762,800	100.00			100.00		S
Rába Automotive Components Ltd.				300,000	100.00			100.00		S
Rába Vehicle Ltd.							835,100	100.00			100.00		S
Diagonal Valor Kft.							3,000	100.00			100.00		S

1Voting right securing participation in the decision-making at the general meeting of the company subject to consolidation.

2Subsidiary (S); Jointly controlled (J); Affiliated (A).

PK. 4. CONSOLIDATED PROFIT AND LOSS ACCOUNT ACCORDING TO IFRS

	Currency*			HUF			X						EUR
	Unit*			1.000			X					1.000.000
	* Indicate with an X.
	Description of item		Q1-Q3			Q1-Q3		Index			Q3 2019			Q3 2020			Index
		2019*		2020
	Domestic sales revenues	12 790 153		7 960 291	62.2%		2 960 338		2 644 599	89.3%
	Export sales revenues	25 132 320		19 803 548	78.8%		7 323 751		5 905 248	80.6%
	Revenues	37 922 473		27 763 839	73.2%		10 284 089		8 549 847	83.1%
	Direct cost of sales	30 741 215		22 622 988	73.6%		8 572 547		6 811 300	79.5%
	Gross profit	7 181 258		5 140 851	71.6%		1 711 542		1 738 547	101.6%
	Cost of sales and marketing**	617 740		316 921	51.3%		198 944		72 579	36.5%
	General and administration expenses**	5 310 173		5 189 099	97.7%		1 521 786		1 379 108	90.6%
	Other revenues	437 695		269 634	61.6%		158 846		93 563	58.9%
	Other expenditures∗	498 868		941 628	188.8%		186 190		315 517	169.5%
	Total other operating expenses	-5 989 086		-6 178 015	103.2%		-1 748 074		-1 673 642	95.7%
	Revenue from operations	1 192 172		-1 037 164	-87.0%		-36 532		64 905	-177.7%
	Financial revenues	200 140		572 459	286.0%		159 977		169 454	105.9%
	Financial expenditures	681 649		1 476 083	216.5%		548 048		421 763	77.0%
	Net financial profit/loss	-481 508		-903 624	-187.7%		-388 070		-252 309	65.0%
	Profit from the purchase of subsidiary	0		0						0			0
	company
	Profit from the purchase of affiliated	0		11 907						0			-3 544
	company
	PROFIT FROM THE PURCHASE OF	0		11 907						0			-3 544
	INVESTMENT
	PROFIT BEFORE TAXATION	710 664		-1 928 880	-271.4%		-424 602		-190 948	45.0%
	Profit tax	285 308		239 679	84.0%		4 432		76 325	1722.1%
	After-tax profit in the current year	425 356		-2 168 559	-509.8%		-429 034		-267 273	62.3%
	Basic value of profit per share (HUF)	32		-161
	Diluted value of profit per share (HUF)	32		-161

∗In Q1-Q3 of 2019, innovation supplement was recorded under other expenditures, which from the end of 2019 was reclassified as profit tax.

• As from 01. 01. 2020 the classification of sales and marketing costs and general and administration expenses has been specified at group level. The effect of the reclassification is HUF 232 million net in Q1-Q3 of 2019.

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RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

1. EARNED REVENUES

During Q1-Q3 of 2020, Rába generated HUF 27,764 mil lion in sales revenue, compared to HUF 37,922 million during the same period of the previous year, which is a change of -26.8 per cent. 71.3 per cent of the revenues in the reporting period came from exports, while the rest came from domestic sales.

2. COSTS AND OTHER REVENUES. EXPENDITURES

2.1. Direct costs

During Q1-Q3 of 2020, the direct cost level of Rába was 81.5 per cent compared to 81.1 % of the base period. The amount of direct costs was HUF 22,623 million, 26.4 per cent lower than during the base period (Q1-Q3 of 2019: HUF 30,741 million).

Gross profit

The gross profit changed from HUF 7,181 million in the base period to HUF 5,141 million (HUF - 2,040 million), which is due to the decrease in sales revenue by HUH 10,159 million and by 8,119 million in direct expenses.

2.2. Cost of sales

The cost of sales decreased by 48.7 per cent and amounted to HUF 317 million during Q1-Q3 of 2020, compared to HUF 618 million in Q1-Q3 of 2019.

2.3. General overhead and administrative expenses

Rába accounts under general overhead and administra tive expenses (Q1-Q3 of 2020: HUF 5,189

million, Q1-Q3 of 2019: 5,310 million) for its costs incurred in relation to the administration of the

company (Q1-Q3 of 2020: HUF 2,586 million) and other general costs (Q1-Q3 of 2020: HUF 2,603 million).

2.4. Other revenues and expenditures

The balance of other revenues and expenditures amounted to a loss of HUF 672 million in Q1-Q3 of 2020 compared to HUF 61 million in profits during the same period of last year.

This also includes the figure for one-off items related to the closing of an earlier transaction in the amount of HUF 296 million.

3. OPERATING PROFIT

The operating profit of the Company during Q1-Q3 of 2020 was HUF -1,037 million (Q1-Q3 of 2019: HUF 1,192 million). The decrease in gross profit (HUF 2,040 million) was improved by the combined change in sales and general overhead costs (HUF 422 million) and deteriorated by the change in the balance of other revenues and expenditures (HUF 611 million). Profitability changed from 3.1 per cent during the base period to -3.7 per cent. The profitability of operating profit + depreciation changed from 7.2 per cent during the base period to 2.5 per cent.

4. FINANCIAL REVENUES AND EXPENDITURES

During Q1-Q3 of 2020, the net financial result was a loss of HUF 904 million, compared to the loss of HUF 482 million during the base period.

The net result of interest incomes and expenses was HUF -63 million during Q1-Q3 of 2020 (against HUF -59 million during the base period).

The net exchange rate difference of FX items during Q1-Q3 of 2020 was HUF -833 million (HUF - 403 million in the base period).

8

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

Financial revenues and expenditures consisted of the following principal items:

					in HUF thousand
		Q1-Q3 of 2019			Q1-Q3 of 2020
Interest income	10	5 360
Exchange rate gains	200 130	563 670
Other financial revenues	0	3 428
Financial revenues	200 140	572 459
Interest payable	58 585	68 132
Exchange rate loss	603 172	1 397 091
Other financial expenditures	19 891	10 859
Financial expenditures	681 649		1 476 083

5. EARNINGS IN THE CURRENT YEAR

The earnings before taxation during Q1-Q3 of 2020 amounted to a loss of HUF 1,929 million, which, because of the factors outlined in sections 1-4. is HUF 2,640 million less than the figure for Q1-Q3 of 2019. The profitability ratio represents a -6.95 per cent return on sales on the basis of profit before taxation, against the level of 1.87 per cent during the base period.

The Group has HUF 240 million in tax liability during the review period. Within that, the corporate tax liability was HUF 3 million, the local business tax liability was HUF 205 million, the innovation supplement amounted to HUF 35 million, and the deferred tax liability in the reporting period was HUF -3 million.

PK. 3. STATEMENT OF CONSOLIDATED FINANCES ACCORDING TO IFRS (BALANCE SHEET ACCORDING TO IFRS)

Currency*		HUF	X		EUR
Unit*		1.000	X		1.000.000
*Currency and unit indicated with X.
Description of item		31.12.2019	30.09.2020	Index
Real estate. machines. equipment		25 394 003	26 271 080	103.5%
Intangible assets			147 709	100 519	68.1%
Other long-term assets			148 859	86 495	58.1%
Property for investment purposes		815 632	808 648	99.1%
Other investments			45 027	56 934	126.4%
Deferred tax receivables			12 012	18 340	152.7%
Total invested assets			26 563 242	27 342 017	102.9%
Inventories			7 651 242	6 621 181	86.5%
Trade receivables and other receivables		6 487 674	6 762 854	104.2%
Profit tax receivable			62 489	258 500	413.7%
Liquid assets. bank account		804 510	2 217 591	275.6%
Total current assets			15 005 915	15 860 126	105.7%
Total assets			41 569 157	43 202 143	103.9%
Registered capital			13 473 446	13 473 446	100.0%
Treasury shares			-108 952	-108 952	100.0%
Retained earnings			7 832 514	5 663 955	72.3%
Total equity and reserves		21 197 008	19 028 449	89.8%
Long-term credits and loans		3 371 304	5 323 890	157.9%
Provisions			237 208	237 209	100.0%
Deferred tax liability			113 276	116 367	102.7%
Leasing liabilities			195 480	189 312	96.8%
Total long-term liabilities		3 917 268	5 866 779	149.8%
Provisions			171 367	232 654	135.8%
Leasing liabilities			82 575	82 575	100.0%
Short-term portion of loans and credits		5 354 424	7 539 107	140.8%
Trade liabilities and other payables		10 846 515	10 452 579	96.4%
Total short-term liabilities		16 454 881	18 306 915	111.3%
Total equity and liabilities		41 569 157	43 202 143	103.9%
								9

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

Analysis of principal balance sheet items and their changes

1. INVESTED ASSETS

1.1. Properties. machines and equipment

The consolidated net value of properties, machines and equipment changed from the closing value of HUF 25,394 million on 31 December, 2019 to HUF 26,271 million. This represents an increase by 3.5 per cent. The depreciation of fixed assets was HUF 1,739 million in Q1-Q3 of 2020.

In line with the provisions of the IFRS 16 Standard effective from 1 January, 2019, the Company identified assets, forklifts and passenger vehicles in the amount of HUF 357 million, where the lessor let use of the assets to Rába. (HUF 274 million on 1 January, 2020, with purchases during the reporting period of HUF 48 million). During the reporting period, the depreciation of these assets amounted to HUF 71 million.

1.2. Intangible assets

The net value of intangible assets changed from HUF 148 million to HUF 101 million. This represents a decline by 31.9 per cent. The amount of depreciation accounted during the period was HUF 44 million.

1.3. Other long-termassets

This balance sheet line shows other long-term loans given in the amount of HUF 5 million (31 December, 2019: HUF 15 million), as well as long-term advance payments in the amount of HUF 81 million (31 December, 2019: HUF 134 million). The long-term advance payment is the consequence of the partial payment of a long-term liability upon favourable conditions, to be recorded annually in the indirect cost line. In consequence of the discharge of liabilities during the year, the amount of long term advance receivables declined by HUF 53 million during the period.

1.4. Property for investment purposes

The book value of real estate for investment purposes at 30 September, 2019 changed to HUF 809 million from HUF 816 million during the base period.

1.5. Investments

In 2019, the Company acquired Diagonal Valor Kft. The definitive identification and valuation as per IFRS of the assets acquired have been completed, thus the purchase of 100 per cent of the business stake is shown under investments. In 2019, Rába Plc . purchased a 24.9 per cent stake in Rekard Hajtómű és Gépgyártó Kft., shown under the balance sheet line "other investments".

1.6. Deferred tax receivables

The amount of receivable was HUF 18 million on 30 September, 2020, against HUF 12 million on 31 December, 2019.

2. CURRENT ASSETS

2.1. Inventories

On 30 September, 2020, the closing value of stocks was HUF 6,621 million (31 December, 2019: HUF 7,651 million). The change is a decline by HUF 1,030 million. The components of the change are: a decrease in materials and goods by HUF 594 million and a decline in unfinished, semi-finished and finished goods by HUF 436 million.

2.2. Trade receivables and other receivables

The closing figure of receivables as at 30 September, 2020 was HUF 6,367 million, a decline by HUF 275 million compared to the 31 December, 2019 figure (closing figure for 31 December, 2019: HUF 6,488 million). Accounts receivable increased by HUF 1,259 million, advances made for investment and inventories decreased by HUF 738 million and other receivables decreased by HUF 247 million.

2.3. Profit tax receivables

At the end of the quarter, the Group had profit tax receivables.

On 30 September, 2020, the Group had a HUF 259 million in profit tax receivables, within which the

10

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

corporate tax receivables amounted to HUF 136 million and the local trade tax receivable was HUF 129 million and the innovation supplement was a liability of HUF 6 million.

On 31 December, 2019, there was a profit tax receivable of HUF 62 million, within which corporate tax receivables amounted to HUF 72 million, the local trade tax receivables amounted to HUF 8 million and the innovation supplement was a liability of HUF 18 million

2.4. Liquid assets

The closing figure of liquid assets on 30 September, 2020 was HUF 2,218 million, HUF 1,413 million more than on 31 December, 2019 (HUF 805 million).

3. EQUITY AND RESERVES

The change occurred as follows:

in HUF thousand

			Share			Treasury			Reserve from		Retained			Other		Total
							share-based				aggregat		shareholder
			capital			shares				earnings
							payments				e income		s' equity
Balance as at 01 January, 2019	13 473 446		-108 952		0	7 500 457		0		20 864 951
Profit for current year									854 390				854 390
Dividend payment									-239 815				-239 815
Balance as at 30 June, 2019	13 473 446		-108 952		0	8 115 032		0		21 479 526
Profit of the current year									-282 518				-282 518
Balance as at 01 January, 2020	13 473 446		-108 952		0	7 832 513		0		21 197 008
Profit for current year									-2 168 559				-2 168 559
Balance as at 30 September,	13 473 446		-108 952		0	5 663 955		0		19 028 449
2020

3.1. Registered capital

RÁBA Plc's share capital consists of common shares with a nominal value of HUF 1.000 each. entitling the shareholders to the dividend announced in a particular period. and providing one vote at the General Meeting of the Company. On 30 September, 2020, the share capital of the Company was HUF 13,473 million.

3.2. Treasury shares

On 30 September, 2020, the value of treasury shares was HUF 108,952 thousand (120,681 shares), with no changes since 31 December, 2019. All rights related to the shares of the Company owned by the Group ("treasury shares") are suspended until the renewed issue of the shares in question.

3.3. Retained earnings

The retained earnings (HUF 5,664 million) changed by HUF -2,169 million. i.e. the profit for the reporting year compared to the closing value for the previous year (HUF 7,833 million).

4. LONG-TERMLIABILITIES

4.1. Long-termcredits and loans, leasing liabilities

The closing value of long-term credits and loans and leasing liabilities as at 30 September, 2020 amounted to HUF 5,513 million, which was 54.6 per cent higher than the opening balance of the period (on 31 December, 2019, the closing figure was HUF 3,567 million).

On 1 January, 2020, the Company had long-term leasing liabilities of HUF 195 million in the context of the leasing contracts identified in line with the provisions of the new IFRS 16 leasing standard. This is then moved to short-term liabilities from where repayment is done. The amount then declined by HUF 73 million due to repayment and increased due the purchase of new assets by HUF 71 million during the reporting period.

4.2. Provisions

The closing value of provisions as at 30 September, 2020 was HUF 470 million, of which HUF 237 million is long-term.

11

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

4.3. Deferred tax liability

On 30 September, 2020, the Company had deferred tax liabilities in the amount of HUF 116 million, which is HUF 3 million more than the amount on 31 December, 2019.

5. SHORT-TERMLIABILITIES

5.1. Short-termcredits and loans

The total amount of short-term credits and loans of HUF 7,622 million is an increase by 40.8 per cent compared to the closing value at the 31 December 2019 (HUF 5,437 million). Short-term leasing liabilities amounted to HUF 83 million, with no changes since 31 December, 2019.

The net borrowing of the Rába group was HUF 10,645 million on 30 September, 2020, an increase by HUF 2,724 million compared to the level as at 31 December, 2019.

5.2. Provisions

The short-term portion of provisions amounted to HUF 233 million on 30 September, 2020, which is HUF 62 million higher than the amount on 31 December. 2019.

5.3. Profit tax liability

At the end of the quarter, the Group had profit tax receivables.

5.4. Accounts payable and other short-term liabilities

On 30 September, 2020, the amount of accounts payable and other short-term liabilities was HUF 10,453 million, which is 3.6 per cent lower than the closing value as at the end of December 2019 (HUF 10,847 million). Accounts payable decreased by HUF 1,161 million, other liabilities declined by HUF 62 million, whereas passive accruals increased by HUF 705 million.

12

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

PK 5. CONSOLIDATED CASH-FLOW STATEMENT

Data in HUF thousand

		30.09.2019		30.09.2020
Cash-flows from operating activities
Profit before taxation	710 664	-1 928 880
Adjustment items related to items with no cash movement:
Interest expenditure	10 619	68 132
Depreciation and amortisation	1 554 386	1 738 961
Impairment of intangible assets. properties machines and	18 453	258 549
equipment
Impairment of bad and doubtful receivables and of long term	4 581	8 994
receivables
Impairment of stocks kept at net realisable value	146 147	332 694
Scrapping of stocks	58 464	35 452
Provisions / (release)	-46 912	61 288
Result from the sale of real estate machinery and fixtures and	-110 922	-3 322
intangible assets
Profit from the purchase of subsidiary and affiliated company	0	-11 907
Revaluation of loans and credits at end of period	417 252	1 009 448
Changes in working capital:
Changes in trade and other receivables	4 670 538	-284 174
Changes in stocks	-1 087 698	661 915
Changes in accounts payable and other liabilities	-1 183 057	-405 066
Taxes paid	-387 312	-438 924
Interests paid	-54 831	0
Net cash flows from operating activity	4 729 372	1 103 159
Cash-flows from investment activities
Purchase of real estate, machinery and fixtures. as well as of	-7 514 445	-3 838 482
intangibles
Revenues from the sale of real estate, machinery and fixtures as	124 587	1 021 391
well as intangible asses
Increase in investments	-474 700	0
Interests received	9	5 360
Net cash flows used for investment activities	-7 864 549	-2 811 731
Cash flows from financing activities
Loans and credits received	4 502 902	3 905 044
Loans and credits and leasing repayment	-1 526 477	-783 391
Dividend paid	-239 815	0
Net cash flows from financing activities	2 736 610	1 413 081
Net increase/decrease of cash and cash equivalents	-398 567	526 246

BASIS FOR THE INTERIM FINANCIAL REPORT

The summary consolidated interim financial report prepared in accordance with IAS 34 Directive (on Interim Financial Reporting) should be read in conjunction with the financial report for the year ended 31 December, 2019, prepared in accordance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Body ("IASB") and adopted by the European Union. The consolidated interim financial report is unaudited. Rába Plc. published its statutory accounts for the year ended 31 December, 2019 on the official electronic portal of the Budapest Stock Exchange and on the information system operated by the National Bank of Hungary for stock market publications. This report for 31 December, 2019 is based on audited figures and the auditor issued an unqualified opinion.

13

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

PK6. Major off-balancesheet items

Description

Value (HUF)

According to a separate list*

• The bank loans of the Rába Group amount to HUF 12 ,863 million, of which the loans secured with liens and mortgages on movable assets and real property amount to HUF 12,863 million.

The amount of bank guarantees issued on behalf of the Rába Group is HUF 3,178 million.

RS1. Ownership structure. ratio of participation

						Total equity					Series listed1
	Description of ownership		Beginning of current year			At end of term			Beginning			End of
			(01 January)			(30 September)			of period			period
			% 2	% 3		pcs			% 2	% 3	pcs			%	pcs			%	pcs
	Domestic institutional/corporate	7.05	7.11	949 288		6.60	6.66	889 389
	Foreign institutional/corporate	2.15	2.17	289 697		2.11	2.13	284 721
	Foreign private individual	0.07	0.07	9 804		0.06	0.07	8 732
	Domestic private individual	15.25	15.39	2 054 773		15.74	15.88	2 120 720
	Employees. leading officials	0.13	0.13	17 074		0.13	0.13	17 074
	Treasury shares	0.90		120 681		0.90		120 681
	Shareholder forming part of	74.46	75.13	10 032 129		74.46	75.13	10 032 129
	general government4
	International Development	0.00	0.00	0		0.00	0.00	0
	Institutions5
	Other 6	0.00	0.00	0		0.00	0.00	0
	T O T A L	100.00	100.00	13 473 446		100.00	100.00	13 473 446

1If the listed series equals the total share capital and it is indicated, there is no need to fill it in. If more than one series are listed at the Stock Exchange, the ownership structure must be specified for each series.

1. Ownership ratio
2. Voting right ensuring participation during the decision-making process at the general meeting of shareholders of the issuer. If the ownership ratio and the voting right are the same, only the column regarding the owner needs to be filled in/published while stating such fact.
3. E.g.: MNV Zrt., Social Security, Local Government, 100% state-owned companies, etc.
4. E.g.: EBRD, EIB, etc.

RS3. List and introduction of shareholders with a stake exceeding 5%

	Name		depositary	Quantity	Share
		(yes/no)	(pcs)	(%)
	Hungarian State Holding Company Ltd. (MNV Zrt.)	no	10,015,829	74.34
	Total		10,015,829	74.34

RS2. Changes in the number of treasury shares during the current year (pcs.)

		1 January			31 March			30 June			30 September
		pcs	%			pcs	%			pcs		%			pcs		%
At corporate level	120 681	0.9		120 681	0.9		120 681		0.9		120 681		0.9
Subsidiaries 1	-	-		-	-		-		-		-		-
Grand total	120 681	0.9		120 681	0.9		120 681		0.9		120 681		0.9

1 Consolidated companies

All of the shares repurchased are directly owned by the parent company.

TSZ1. Headcount of full-timeemployees (people)

		End of base period			Beginning of current year			End of current period
At corporate level		18		17			29
At group level		1 369		1 325			1 233

The consolidated closing headcount as at 30 September, 2020 was 1,233. The decline in headcount is 9.9 per cent compared to the end of the base period.

14

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

TSZ2. Managing executives. strategic employees

Type1

Company

Position

Beginning

End/termination

of mandate

BD

István Pintér

Chairman of the BD

2005

BD

Dr. Ibolya Virág Csernák

Board member

2019

Bánóczi

BD

János Major

Board member

2019

BD

Roland Sebők

Board member

2019

BD

Dr. András Ákos Toperczer

Board member

2020

BD

Dr. Tamás Tóth

Board member

2019

BD

György Wáberer

Board member

2012

BD

Ákos Csókay

Board member

2017

2019

BD

Dr. János Géza Förd ős

Board member

2016

2019

BD

Dr. Péter Hartmann

Board member

2016

2019

BD

Dr. Ákos Mátyás Pálvölgyi

Board member

2019

2020

BD

Dr. Miklós Rátky

Board member

2014

2019

BD

Andor Nándor Tóth

Board member

2018

2019

SB

Dr. Zoltán Lajos Pafféri

Chairman of the SB

2018

SB

Dr. Zsolt Harmath

SB member

2016

SB

Dr. Tünde Kanta

SB member

2017

SP

István Pintér

Chief Executive Officer

2003

indef inite

SP

Béla Balog

Chief Financial Officer

2004

indefinite

SP

Ádám Steszli

HR and Controlling Director

2014

In definite

Director, Strategic

SP

Attila Deák

Procurement and Business

2019

indefinite

Development

SP

István Pintér

Managing Director

2004

indefinite

SP

László Urbányi

Managing Director

2005

indefinite

SP

János Torma

Managing Director

2005

indefinite

1 Employee in a strategic position (SP), Member of the Board of Directors (BD), Supervisory Board Member (SB).

15

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

As from 1 January, 2017, Rába Plc's individual financial accounts are also drawn up in

accordance with the provisions of the IFRS.

RÁBA PLC. (INDIVIDUAL) BALANCE SHEET (IFRS)

Data in HUF thousand

	Description of item			31.12.2019			30.09.2020			Index
	Property. machinery. equipment*	6 003 693		7 031 799		117.12%
	Intangible assets	13 294		9 119		68.59%
	Other long-term assets	1 414 417		1 414 417		100.00%
	Real estate for investment	392 912		808 647		205.81%
	Subsidiary investments	12 318 571		12 148 585		98.62%
	Other investments	45 027		56 934		126.44%
	Deferred tax receivable	12 012		18 338		152.66%
	Total invested assets	20 199 926		21 487 839		106.38%
	Inventories	8 103		11 808		145.72%
	Trade and other receivables	2 938 341		2 654 492		90.34%
	Profit tax receivables	10 600		12 309		116.12%
	Cash and cash equivalents	443 860		1 405 488		316.65%
	Total current assets	3 400 904		4 084 097		120.09%
	TOTAL ASSETS	23 600 830		25 571 936		108.35%
	Registered capital	13 473 446		13 473 446		100.00%
	Treasury shares	-108 952		-108 952		100.00%
	Retained earnings	3 392 669		3 340 817		98.47%
	Total equity and reserves	16 757 163		16 705 311		99.69%
	Provisions	95 700		95 700		100.00%
	Long-term credits and loans	367		32 199		8773.57%
	Total long-term liabilities	96 067		127 899		133.14%
	Provisions	17 362		87 350		503.11%
	Short-term portion of loans and credits	1 983 119		3 569 911		180.01%
	Accounts payable and other liabilities	4 747 119		5 081 465		107.04%
	Total short-term liabilities	6 747 600		8 738 726		129.51%
	TOTAL EQUITY AND LIABILITIES	23 600 830		25 571 936		108.35%

• In Q1-Q3 of 2020, several real estate items within the group were entered into the individual accounts of the company in order to optimise property management. This does not influence the consolidated value.

16

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in acc ordance with the IFRS

RÁBA PLC. (INDIVIDUAL) PROFIT AND LOSS STATEMENT (I FRS)

Data in HUF thousand

	Description			Q1-Q3		Q1-Q3		Index			Q3 2019			Q3 2020			Index
			2019		2020
	Sales revenues		1 192 915		1 435 101		120.3%	370 300	508 394	137.3%
	Direct costs of sales		286 641		292 598		102.1%	97 360	91 098	93.6%
	Gross profit		906 274		1 142 503		126.1%	272 940	417 296	152.9%
	Sales and marketing costs		26 320		382		1.5%	3 741	0	0.0%
	General overhead costs		815 772		897 112		110.0%	255 369	303 728	118.9%
	Other revenues		216 730		57 448		26.5%	3 619	49 381	1364.5%
	Other expenditures*		187 190		184 528		98.6%	127 876	97 301	76.1%
	Other operating expenditures total		-812 552		-1 024 574		126.1%	-383 367	-351	91.7%
				648
	Operating profit		93 722		117 929		125.8%	-110 427	65 648	-59.4%
	Financial income		35 906		114 664		319.3%	-17 030	63 626	-373.6%
	Financial expenditures		107 336		281 615		262.4%	37 710	92 629	245.6%
	Net financial income		-71 430		-166 951		233.7%	-54 740	-29 003	53.0%
	Revenue from the purchase of affiliated				11 907							-3 544
	company
	PROFIT BEFORE TAXATION		22 292		-37 115		-166.5%	-165 167	33 101	-20.0%
	Profit Tax*		8 969		14 734		164.3%	-3 760	2 109	-56.1%
	PROFIT OF CURRENT YEAR		13 323		-51 849		-389.2%	-161 407	30 992	-19.2%
	TOTAL AGGREGATE PROFIT/LOSS OF		13 323		-51 849		-389.2%	-161 407	30 992	-19.2%
	CURRENT YEAR
	EBITDA		261 176		324 222		124.1%	-54 192	137 238	-253.2%

* In Q1-Q3 of 2019, innovation supplement is under other expenditures, from the end of 2019, it is moved to profit taxes

SEGMENT INFORMATION

From a business perspective, the Group can be split into three main segments: Axles, Vehicles and Automotive Components.

It is on the basis of these business segments that the Group prepares segment information for the management. Management is responsible for assigning resources to the segments, as well as for holding the segments accountable for their performance.

The Axle Segment encompasses the production and sale of axles, axle parts and axle components, the Vehicle Segment is responsible for the manufacturing of truck and bus chassis and the related components, as well as for the assembly and sale of vehicles, while the Automotive Components Segment is responsible for the production of vehicle components, seat frames, pressed structures, as well as truck chassis and for the sewing of seat covers and for the sale of these products.

Segment results, segment assets and segment liabilities include items that can be directly attributed to the given segment. General overhead items include the revenues, expenditures, assets and liabilities of the holding headquarters.

Capital expenditures of the segment include the total expenditures during the period expended upon real estate, machinery and equipment, as well as intangible assets.

17

			Q1-Q3 2019					Q3 2019
					Inter-						Inter-
	Axles IFRS	Vehicles IFRS	Components IFRS	General overhead	segment	Consolidated	Axles IFRS	Vehicles IFRS	Components IFRS	General overhead	segment	Consolidated
					filters						filters
Revenues	17 147 763	8 545 298	12 037 596	191 817	0	37 922 473	5 051 177	1 906 494	3 259 136	67 283	0	10 284 090
Inter-segment revenues	572 038	257 767	690 624	1 001 097	-2 521 527	0	154 444	76 225	167 842	303 017	-701 528	0
Total revenue from sales	17 719 801	8 803 065	12 728 220	1 192 915	-2 521 527	37 922 473	5 205 621	1 982 720	3 426 978	370 300	-701 528	10 284 090
Direct cost of sales	-14 557 008	-7 089 140	-10 714 064	-286 641	1 905 636	-30 741 217	-4 290 366	-1 735 820	-2 944 923	-97 360	495 920	-8 572 549
GROSS PROFIT	3 162 793	1 713 925	2 014 156	906 273	-615 891	7 181 256	915 255	246 900	482 054	272 939	-205 608	1 711 541
Sales and marketing costs **	-232 155	-334 342	-24 923	-26 320	0	-617 740	-61 119	-128 589	-5 496	-3 741	0	-198 945
General overhead costs **	-2 688 335	-916 140	-1 506 176	-815 772	616 249	-5 310 173	-846 679	-257 919	-367 589	-255 368	205 767	-1 521 786
Other revenues	296 478	76 181	62 104	216 730	-213 796	437 697	98 068	34 852	22 841	3 619	-533	158 846
Other expenditures*	-205 472	-35 441	-73 534	-187 190	2 768	-498 869	-12 394	-23 721	-22 733	-127 876	533	-186 190
TOTAL OTHER OPERATING EXPENDITURES	-2 829 484	-1 209 742	-1 542 529	-812 552	405 221	-5 989 085	-822 123	-375 376	-372 977	-383 367	205 767	-1 748 074
REVENUE FROM OPERATIONS	333 309	504 183	471 627	93 721	-210 671	1 192 171	93 132	-128 475	109 078	-110 428	159	-36 533
Interest income	738	10 750	690	6 702	-18 870	10	102	3 739	33	2 926	-6 799	1
Interest expenditure	-37 900	-16 001	-12 018	-18 400	18 870	-65 450	-13 005	-5 091	-3 720	-7 408	6 799	-22 425
Profit tax expenditure	-90 165	-58 635	-127 538	-8 969	0	-285 307	-4 967	25 671	-28 895	3 759	0	-4 432
Assets
Real estate, machinery and equipment	13 446 724	2 053 569	3 468 181	6 009 868	10 010	24 988 351	5 144 727	19 656	-98 263	-10 327	159	5 055 953
Intangible assets	80 638	41 428	17 872	14 701	0	154 639	3 881	138	-2 949	-1 419	0	-349
Real estate for investment	0	0	0	338 217	0	338 217	0	0	0	0	0	0
Other long-term assets	128 541	11 565	8 175	1 503 882	-1 373 483	278 680	-15 335	-1 403	-991	0	0	-17 729
Inventories	6 101 142	1 761 862	2 116 213	9 242	-33 781	9 954 679	-135 936	-233 215	143 058	765	0	-225 327
Receivables	4 781 495	4 734 190	1 800 791	3 392 460	-7 118 197	7 590 740	-4 380 369	-110 489	-291 321	1 552 561	-2 076 406	-5 306 024
Cash and cash equivalent	266 959	3 111	3 156	11 737	-1	284 962	45 430	-5 949	-321	-323 375	0	-284 217
Liabilities
Provisions	33 398	155 889	30 254	223 489	3	443 033	0	100	0	88 751	0	88 851
Liabilities*	8 190 474	2 295 877	3 560 696	4 014 257	-7 118 196	10 943 109	635 751	-138 710	-275 847	566 712	-2 076 406	-1 288 499
Capital expenditures	6 449 075	553 938	464 132	107 563	0	7 574 708	6 081 663	142 939	179 192	-38 272	0	6 365 523
Depreciation	814 988	199 548	372 756	167 453	-358	1 554 387	249 271	72 448	129 779	56 234	-159	507 573

• In Q1-Q3 of 2019, innovation supplement is under other expenditures, from the end of 2019, it is moved to profit taxes
• In Q1-Q3 of 2019, innovation supplement is under liabilities
• As from 01. 01. 2020, the classification of sales and marketing costs and general overhead and administration costs has been specified at group level. The effect of the reclassification in Q1-Q3 of 2019 is HUF 232 million net.

RÁBA Plc's consolidated report for Q1-Q3 of 2020 in accordance with the IFRS

						Q1-Q3 2020										Q3 2020
				Vehicles						Inter-												Inter-
		Axles IFRS			Components IFRS		General overhead		segment		Consolidated		Axles IFRS		Vehicles IFRS		Components IFRS		General overhead		segment		Consolidated
			IFRS
									filters												filters
Revenues	14 754	4 194 442	8 298 268	516 387	0	27 763 839	4 232 837	1 186 580	2 949 171	181 259	0	8 549 847
742
Inter-segment revenues	285 681	130 550	390 821	937 160	-1 744 212	-1	75 135	43 607	74 625	327 136	-520 503	0
Total revenue from sales	15 040 423	4 324 992	8 689 089	1 453 546	-1 744 212	27 763 838	4 307 972	1 230 187	3 023 796	508 394	-520 503	8 549 847
Direct cost of sales	-12 365 762	-3 749 622	-7 452 518	-292 598	1 237 514	-22 622 987	-3 527 817	-1 061 549	-2 467 009	-91 099	336 176	-6 811 297
GROSS PROFIT	2 674 661	575 370	1 236 571	1 160 948	-506 698	5 140 851	780 155	168 639	556 787	417 296	-184 327	1 738 549
Sales and marketing costs	-211 684	-98 046	-101 174	-382	94 365	-316 921	-47 120	-23 693	-30 437	0	28 671	-72 579
General overhead costs	-2 689 011	-638 602	-1 363 834	-900 715	403 062	-5 189 099	-719 549	-91 406	-419 561	-304 424	155 831	-1 379 109
Other revenues	136 482	40 172	21 179	129 714	-57 913	269 634	47 419	13 744	1 581	79 021	-48 202	93 562
Other expenditures	-196 828	-309 947	-240 171	-195 042	360	-941 628	-34 703	-2 493	-175 965	-102 558	202	-315 517
TOTAL OTHER OPERATING	-2 961 041	-1 006 422	-1 684 000	-966 425	439 874	-6 178 015	-753 952	-103 848	-624 382	-327 962	136 501	-1 673 643
EXPENDITURES
REVENUE FROM OPERATIONS	-286 380	-431 053	-447 429	194 523	-66 824	-1 037 164	26 202	64 791	-67 595	89 334	-47 826	64 906
Interest income	959	14 749	4 444	15 372	-30 163	5 360	31	4 865	1 759	4 316	-9 167	1 804
Interest expenditure	-37 740	-15 809	-11 847	-32 900	30 163	-68 132	-14 261	-5 200	-4 419	-10 905	9 167	-25 618
Profit tax expenditure	-96 111	-41 475	-84 006	-18 087	0	-239 679	-31 069	-10 196	-32 513	-2 547	0	-76 325
Assets
Real estate, machinery and equipment	14 989 612	1 952 199	2 286 758	7 031 804	10 708	26 271 080	281 930	32 773	-92 668	1 327	174	223 536
Intangible assets	56 448	29 526	5 427	9 119	0	100 520	-7 715	-2 975	-5 004	-1 392	0	-17 085
Real estate for investment	0	0	0	808 648	0	808 648	0	0	0	0	0	0
Other long-term assets	72 313	6 421	4 544	1 417 635	-1 414 417	86 495	-15 335	-1 403	-991	-2 615	0	-20 344
Inventories	4 423 768	853 206	1 367 931	11 807	-35 530	6 621 182	45 235	-87 006	-477 047	3 649	0	-515 169
Receivables	4 382 810	4 219 853	2 385 959	2 902 401	-7 128 168	6 762 854	-4 583	-138 965	1 053 483	-1 129 827	615 349	395 456
Cash and cash equivalent	661 421	4 084	4 167	1 547 919	-1	2 217 590	79 481	-137	-734	808 224	0	886 834
Liabilities
Provisions	71 393	160 127	55 290	0	3	469 864	0	0	45 000	0	0	103 600
Liabilities	8 521 103	1 291 877	2 767 947	5 082 393	-7 128 167	10 535 154	-1 147 535	-219 471	570 424	596 871	615 349	415 639
Capital expenditures
Depreciation	920 162	254 483	353 752	208 853	1 710	1 738 961	314 881	84 292	117 219	71 590	-174	587 808

• As from 01. 01. 2020, the classification of sales and marketing costs and general overhead and administration costs has been specified at group level. The effect of the reclassification in Q1-Q3 of 2019 is HUF 232 million net.

19

PK1. General information pertaining to the financial data
	Yes	No
Audited
			X
Consolidated
X
Accounting	Hungarian		IFRS		Other
	X
principles
Other: …………………..

Declaration of liability

We, the undersigned, authorised signatories of the Company, hereby declare that the data and statements contained in the quarterly report are true and accurate. The report reflects the true and fair value of the Company's assets, liabilities, financial position, profit and loss, as well as of the situation, development and performance of the business and also describes the main risks and factors of uncertainty. The Company does not conceal any fact that is important for assessing its financial and economic position.

Győr, 11 November, 2020

István Pintér	Béla Balog
Chairman - Chief Executive Officer	Chief Financial Officer