Rába Jármûipari : RÁBA Plc. Q1-Q3 2023 Quarterly Report

Q1-Q3 2023 Report of RÁBA Plc.

Unaudited, consolidated quarterly report

in accordance with International Financial Reporting Standards (IFRS)

Company name:	RÁBA Automotive Holding Plc.
Company address:	H-9027 Győr, Martin u. 1.
Sector:	Machine industry
Period:	Q1-Q3 of 2023
E-mail:	[e-mail]
Investor contact:	Éva Lang-Péli

EXECUTIVE REPORT

MAIN RESULTS OF THE COMPANY

• During Q1-Q3 of 2023, the activity on the market of commercial vehicles was decidedly strong in spite of the uncertainty caused by the Russian-Ukrainian war. Market demand grew consider- ably in almost all relevant geographical and product segments. A new phenomenon in terms of future market movements is that orders have started to decline in an increasing number of seg- ments.
  Market factors impacting production costs showed a mixed picture. Energy and steel purchase prices, which were earlier record high, have become somewhat more moderate, the increase in wages, however, remained unchanged. The bulk of the decline in steel prices was automatically realised by the customers, and the enforcement of the previously negotiated energy price com- pensation is becoming more difficult, their levels do not always reach the previous levels. To- gether with the drastic increase in wages, this meant a considerable burden on the operation.
  In Q3 of 2023, the marked strengthening of the HUF exchange rate emerged as a significant factor, which had a negative effect on operating profitability through net exports.
• In terms of sales, in Q3 of 2023, the Rába group m anaged to retain its record high performance, achieving the highest sales of both Q1-Q3 cumulative and Q3 of the past 20 years. In Q1-Q3 of 2023, the sales revenue increased by 22.1 per cent, amounting to HUF 56.0 billion, whereas the group-level sales in Q3 amounted to HUF 15.9 billion, upon an increase by 0.7 per cent. In terms of sales, Rába Axle Ltd. remains the largest subsid iary of the group, generating HUF 37.2 billion in sales through a 21.8 per cent increase in Q1-Q3 of 2023. The sales revenue of Rába Automo- tive Components Ltd. in Q1-Q3 of 2023 reached HUF 12.9 billion, whereas Rába Vehicle Ltd. contributed HUF 2.1 billion in sales to the record-level sales revenue of the group. As from Q3 2022, the Rába Group's portfolio was expanded, and REKARD LLC. which operates as a wholly- owned Rába subsidiary, was included in the consolid ation of the Rába group. The sales revenue of REKARD LLC. was HUF 4.0 billion in Q1-Q3.
• In spite of the somewhat more moderate purchase prices in Q3, production costs continue to be high, which puts continuous pressure on profitability. Steel purchase prices were 47 per cent higher compared to the average of the previous years, energy prices were still three times higher compared to the pre-crisis level and wages increased by some 56 per cent since 2019. The Rába group makes considerable efforts to mitigate these negative impacts through both purchasing and sales measures and to neutralise their profit eroding impact.
• In addition to the significant increase in sales revenue, the portfolio expansion, the consistent improvement in production efficiency and passing on of high production costs meant that the gross profit at group level amounted to HUF 9.7 billion upon an increase by HUF 1.8 billion. In
  Q1-Q3 2023, the gross profit ratio realised at group level exceeded the level of the base period: it amounted to 17.3 per cent, upon an increase by 0.2 percentage points. The gross profit surplus resulting from the portfolio growth amounted to HUF 933 million.
• The balance of other income and expenses reached a loss of HUF 259 million in Q1-Q3 of 2023, compared to a profit of HUF 405 million in the same period of the previous year. The result from other activities in the base period included a profit from a one-off real property transaction with a

Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

value of HUF 342 million.

• In Q1-Q3 of 2023, in spite of continued high pressure on the cost side and the negative impacts of the strong HUF exchange rate we managed to retain one of the best operating profit level of recent years: in Q1-Q3 of 2023, all business units achieved positive operating results thus con- tributing to the operating profit of HUF 1,927 million achieved through a 77.6 per cent growth. The Axle business unit generated operating profits of HUF 380 million, thus exceeding the level of the base period, the Components business unit generated HUF 491 million in operating profit, whereas the Vehicle business unit generated HUF 343 million in operating profit. The additional operating profit resulting from the portfolio growth due to REKARD LLC. amounted to HUF 343 million. In terms of profitability, Q3, cyclically a weak period was affected by the high cost pres- sure and the strong HUF exchange rate: the group-level result remained HUF 218 million below the level of the base period, amounting to HUF 117 million.
• In terms of cash generating efficiency, the group of companies managed to achieve the second highest EBITDA results of the past 10 years in Q1-Q3 2023, the EBITDA result was HUF 3,853 million, which is an increase in cash generation of 28.6 per cent over the base period. The largest member of the group of companies, the Axle segment increased the EBITDA generated during the cumulative period by 56.8 per cent, amounting to HUF 1,725 million. The other subsidiaries also contributed significantly to the outstanding group-level result: the Components business unit generated HUF 699 million and the Vehicle business unit generated HUF 366 million in EBITDA- level profit. The additional EBITDA resulting from the portfolio growth due to REKARD LLC. amounted to HUF 488 million in Q1-Q3 of 2023. Retaining and maintaining cash generation ca- pacity is increasingly a challenge for the Rába gro up, since there is an increasing pressure both from customers and from suppliers. The management of the group of companies continues to make considerable efforts to retain cash generating capacity. The focus of the measures, in ad- dition to passing on the inflationary effects to customers, was to further increase the flexibility of manufacturing operations, renew manufacturing technology and structure and to exercise tight cost control.
• The result of financial operations for the period under review is mainly affected by the non-cash loan revaluation. In Q1-Q3 2023, the result of financial operations showed a profit of HUF 263 million compared to a loss of HUF 1,693 million in the same period last year. The unrealised gain from loan revaluation amounted to HUF 366 million. In addition, the financial result includes a net interest charge of HUF 178 million.
• The total comprehensive income and profit for the year amounted to a profit of HUF 1,670 million in Q1-Q3 2023, considerably higher than during the previous year.
• Despite the uncertainties caused by the military conflict between Russia and the Ukraine, the financial situation of the Rába Group was character ised by a stable liquidity position. The level of net debt reached HUF 13.9 billion at the end of the period under review, a decrease of HUF 1.6 billion compared to the base period. Of the factors influencing the level of the net debt, men- tion must be made of the technological renewal and reorganisation far exceeding the capital expenditures of previous years, advance received in connection with received support, operating profit realised since the base period and the working capital (increased inventory levels), which increased due to inflation. The HUF 366 million worth of loan revaluation resulting from exchange rate changes, not involving cash movements, was another factor positively contributing to the net borrowing figure.
• Compared to the same period last year, equity increased by 17.2 per cent. The equity per share was HUF 1,817 per share.

2

Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

	thousand HUF			Q1-Q3 2022			Q1-Q3			Change			Q3 2022			Q3 2023			Change
					2023
	Sales revenue	45 846 597		55 974 141		22.1%		15 839 320		15 949 479		0.7%
	Gross profit	7 832 260		9 669 886		23.5%		2 519 321		2 306 019		-8.5%
	Gross margin	17,1%		17,3%			0.2%p	15,9%		14,5%			-1.4%p
	EBITDA	2 996 045		3 853 150		28.6%		1 004 906		758 942		-24.5%
	EBITDA level	6,5%		6,9%			0.4%p	6,3%		4,8%			-1.6%p
	Operating profit	1 084 702		1 926 618		77.6%		334 944		117 414		-64.9%
	Net financial result	-1 693 151		263 227		115.5%		-786 957		-738 159		6.2%
	Profit after tax for current year	-814 757		1 670 449		305.0%		-562 729		-731 493		30.0%
	Total comprehensive income	-814 757		1 670 449		305.0%		-562 729		-731 493		30.0%

GOALS, STRATEGY OF THE COMPANY

"Rába continues to successfully and consistently pursue the principles and goals defined in the Rába Modernisation Programme 2025, focusing on investing in sustainability and in machinery and property promoting modernisation. Our own renewable energy generation can offer an environmentally friendly and sustainable solution to hectically changing and extraordinarily high energy prices. The Company is committed to securing and developing our qualified staff, the basis for which lies in our partnership with educational institutions. Rába is building a career path for young specialists and supports them in acquiring superior, complex knowledge and skills ranging from university lectures to professional practice", said Béla Hetzmann, Chairman-Chief Executive Officer of Rába Automotive Holding Plc.

BUSINESS ENVIRONMENT OF THE COMPANY

• During Q1-Q3 of 2023, in spite of the uncertainty caused by the Russian-Ukrainian war, the activity on the commercial vehicle market was decidedly strong. Market demand increased sub- stantially in nearly all our geographical and product segments. A new phenomenon in terms of future market movements though is that orders have started to decline in an increasing number of segments.
  In terms of production costs, the purchase prices, which hit records high levels earlier, continued to become more moderate. The bulk of the decline in steel prices was automatically realised by the customers, the enforcement of the previously negotiated energy price compensation is be- coming more difficult, their levels do not always reach the previous levels. The continued drastic increase in wages, remains a considerable burden on the operation, jeopardising long-term in- ternational competitiveness and profitability.
  In Q3 of 2023, the marked strengthening of the HUF exchange rate had a negative effect on operating profitability.
• Q1-Q3of 2023 was a decidedly strong period for the European commercial vehicle market in terms of demand: the registration of new commercial vehicles increased by 21 per cent over the rate of the previous year. Since the major part of the year was characterised by significant growth, the market outlooks for the whole year of 2023 are positive. It is noteworthy, though, that orders started to decline in several geographic segments. The North American commercial vehicle mar- ket experienced a considerable, 16 per cent growth over the base period of 2022. Demand for Rába's agricultural products remained strong in Q1- Q3 of 2023: turnover exceeded the level of the previous year by some 21 per cent. In compliance with the European sanction regulations in force against Russia, since the beginning of the Russian-Ukrainian military conflict Rába has not conducted any business with its Russian partners. The European passenger vehicle market also saw considerable growth in Q1-Q3 of 2023: new car registrations increased by 17 per cent year on year.
• Substantial economic risks together with the drastic increase in energy prices resulted in high volatility on the steel market in 2022. In 2023 both energy prices and the demand-supply relations were adjusted compared to the base period, which had a favourable impact on the development of the purchase price of steel. In Q3 of 2023, the purchase price level of steel was some 13.8

3

Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

per cent lower. The 14.2 per cent lower purchase prices of the cumulative period impacted production activities.

• There were no significant changes on the labour market in the period under review, thus labour shortages and inflationary pressures continued to have a significant impact on the increase in average wages. In January-August of 2023, average gross national earnings increased by 17.2 per cent. Finding and implementing operational efficiency improvements in production technol- ogy to cover the years of steadily increasing wage costs remains a major challenge for the Com- pany.
• Energy prices, which declined in 2023, continued to do so in the third quarter, albeit to a lesser extent. Although the decline in energy prices during Q3 seems considerable (-53 per cent), it is due primarily to the striking base period price level. The energy price level during Q3 is even so 2.5 times higher than the purchase prices prior to the energy crisis. In Q1-Q3 of 2023, energy prices for the cumulative period were 26.4 per cent below the level of the base period. A negative phenomenon in terms of energy prices is that market partners are less and less willing to offer energy price compensation, accepting the market fact that the level of energy prices will not decline to the level before the crisis. All this also means that production activities in the future will be subject to pressures exerted by purchase prices that are 3 times higher than energy prices prevailing earlier.
• In terms of the exchange rate environment during the cumulative period under review, the dollar saw a decrease of 3.0 per cent, while the euro, which has a significant foreign currency weighting, saw decrease of 0.8 per cent compared to a year earlier. For Q3 of the year, the exchange rate environment had a strong impact on the operating profit, for the USD, the decline in exchange rates was 12.0 per cent, for the EUR it was 4.9 per cent, which impacted the net export.1

		Q1-Q3			Q1-Q3			Change			Q3 2022			Q3 2023			Change
		2022			2023
EURHUF - average	385.0		381.9		-0.8%		403.5		383.7		-4.9%
EURHUF - end of period	421.4		391.3		-7.2%		421.4		391.3		-7.2%
USDHUF - average	363.4		352.6		-3.0%		400.6		352.7		-12.0%
USDHUF - end of period	428.6		368.8		-13.9%		428.6		368.8		-13.9%
Changes in raw material prices*	193%		166%		-14.2%		181%		156%		-13.8%
Wage level**	485.9		569.6		17.2%		489.4		564.6		15.4%
Changes in energy prices***	888%		654%		-26.4%		1155%		542%		-53.0%

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

**KSH (Central Statistical Office) national gross average wage within companies (thousand HUF/month) - based on figures for Jan-May. 2023.

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

SUMMARY OF THE RESULT FOR THE REPORTING PERIOD

Rába Axle Ltd.

The sales revenue of Rába Axle Ltd. amounted to HUF 37.1 billion in Q1-Q3 2023, compared to HUF 30.5 billion in the 2022 base period. This corresponds to an increase by 21.8 per cent.

On the American market, the revenue in USD for the period was USD 8.2 million in the review period, which was 7.6 per cent lower than the USD 8.9 million in sales achieved in Q1-Q3 of 2022. On the EU market, Rába Axle Ltd's sales figures in HUF terms increase d by 27.7 per cent, amounting to HUF 32.5 billion, compared to HUF 25.4 billion during the base period.

European exports in Q1-Q3 of 2023 were 39.6 per cent higher than in the base period, reaching EUR 73.7 million compared to EUR 52.8 million in Q1-Q3 of 2022.

Domestic sales revenue before consolidation amounted to HUF 4,305 million, a decrease of 15.5 per cent compared to HUF 5,092 million in the base period.

1 Average exchange rates were calculated based on the official FX rates of the National Bank of Hungary. Source: http://www.mnb.hu/arfolyam-lekerdezes

4

Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

On the CIS and Eastern European markets Rába Axle Ltd. generated no sales revenue during t he review period, primarily due to the sanctions against Russia. The turnover during Q1-Q3 of 2022 was also minimal, amounting to a mere EUR 0.2 million.

Revenues from Other markets in euro terms amounted to EUR 4.7 million in the period under re- view, which was 1.5 per cent more than the EUR 4.6 million turnover in the base period of 2022. The sales figures and their comparison for the base period with the period in review are fundamentally affected by the fact that in the framework of efficiency improvement measures, the organisational and operational management of the Sárvár sit e of the Components business unit was transferred from Rába Automotive Components Ltd. to Rába Axle Ltd. in Q3 2022.

As from 1. January, 2023, the Rába Development Inst itute, performing R+D activities has been integrated into Rába Vehicle Ltd. from Rába Axle Ltd.

The operating result of the Company in Q1-Q3 2023 was a profit of HUF 380 million, compared to the loss of HUF 225 million during the same period of the previous year.

At EBITDA level, the operating profit of the Axle business unit was HUF 1,725 million compared to HUF 1,100 million registered a year earlier.

Million HUF

Q1-Q3

2022

Q1-Q3

2023

Change

Q3

2022

Q3

2023

Change

America	3 241	2 906	-10.3%	1 244	867	-30.3%
EU - export	20 332	28 155	38.5%	6 951	7 801	12.2%
EU - domestic	5 092	4 305	-15.5%	1 584	1 264	-20.2%
CIS and East-Europe	71	0	-100.0%	6	0	-100.0%
Other	1 779	1 791	0.7%	722	511	-29.2%
Total sales revenue	30 514	37 157	21.8%	10 508	10 443	-0.6%
EBITDA	1 100	1 725	56.8%	320	391	22.2%
Operating profit	-225	380	268.9%	-146	-62	57.5%

Rába Automotive Components Ltd.

The sales revenue of Rába Automotive Components Ltd . amounted to HUF 12.9 billion in Q1-Q3 2023, a decrease by 13.9 per cent compared to the base period.

Rába Automotive Components Ltd. generates a signif icant part of its turnover on the European market.

European exports in Q1-Q3 2023 reached EUR 12.9 million, a decrease of 26.9 per cent compared to EUR 17.7 million in the base period of 2022.

Domestic sales revenue before consolidation in the reporting period amounted to HUF 7,937 million compared to HUF 8,133 million in Q1-Q3 of 2022, a decrease by 2.4 per cent.

The sales figures and their comparison for the base period with the period in review are fundamentally affected by the fact that in the framework of efficiency improvement measures, the organisational and operational management of the Sárvár sit e of the Components business unit was transferred from Rába Automotive Components Ltd. to Rába Axle Ltd. in Q3 2022.

At operating level, the Business unit generated a profit of HUF 491 million in the period under review, compared to a profit of HUF 665 million in the base period in 2022.

At the EBITDA level, the operating profit of the Components business unit for the period under review amounted to HUF 699 million, compared to HUF 990 million a year earlier.

5

Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

	Million HUF			Q1-Q3			Q1-Q3			Change			Q3			Q3			Change
			2022			2023					2022			2023
	EU - export	6 802		4 934		-27.5%		1 732		1 221	-29.5%
	EU - domestic	8 133		7 937		-2.4%		3 494		2 508	-28.2%
	Total sales revenue	22		0	-100.0%		0	0
	EBITDA	14 957		12 871		-13.9%		5 226		3 729	-28.6%
	Operating profit	990		699		-29.4%		371		15	-96.0%
	EU - export	665		491		-26.2%		289		-54	-118.7%

Rába Vehicle Ltd.

The sales revenue of Rába Vehicle Ltd. generated in Q1-Q3 2023 was 93.2 per cent higher than the base period level, increasing from HUF 1,071 million to HUF 2,069 million.

The majority of Rába Vehicle Ltd. 's sales are real ised on the domestic market, while it sells on the European market on a project basis.

European exports in the cumulative period of 2023 amounted to EUR 1.9 million, which is 69.6 per cent higher than the EUR 1.1 million during the base period.

The domestic sales revenue before consolidation in the first nine months of 2023 was HUF 1,355 million, an increase of 108.8 per cent.

As from 1. January, 2023, the Rába Development Inst itute, performing R+D activities has been integrated into Rába Vehicles Ltd. from Rába Axles Lt d.

The operating profit amounted to HUF 343 million during the reporting period, compared to the profit of HUF 130 million during the base period last year.

At the EBITDA level, the operating profit of the Vehicle business unit for the period was HUF 366 million compared to HUF 137 million in Q1-Q3 of 2022.

Million HUF

Q1-Q3

2022

Q1-Q3

2023

Change

Q3

2022

Q3

2023

Change

EU - export	423	711	68.1%	211	494	0.0%
EU - domestic	649	1 355	108.8%	239	448	87.4%
Other	0	3		0	3
Total sales revenue	1 071	2 069	93.2%	449	945	110.5%
EBITDA	137	366	167.2%	75	182	142.7%
Operating profit	130	343	163.8%	73	174	138.4%

REKARD Kft.

As of Q3 2022, the portfolio of the Rába Group has been expanded, REKARD LLC. will continue to operate as a wholly owned Rába subsidiary included in the consolidation of the Rába Group.

REKARD LLC. realised HUF 4,009 million in sales revenue in Q1-Q3 of 2023.

REKARD LLC. realises a significant part of its sales on the European market.

The realised sales revenue of European exports in the first nine months of 2023 was EUR 7.6 million.

Domestic sales revenue before consolidation reached HUF 1,096 million in the review period.

The operating profit for Q1-Q3 of 2023 was HUF 343 million.

At EBITDA level, REKARD LLC's operating profit for the period was HUF 488 million.

6

Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

	Million HUF			Q1-Q3			Q1-Q3			Change			Q3			Q3			Change
			2022			2023					2022			2023
	EU - export			0	2 899			n.a.*	753		641		-14.9%
	EU - domestic			0	1 096			n.a.*	271		166		-38.7%
	Other			0	15			n.a.*	2	7		250.0%
	Total sales revenue			0	4 009			n.a.*	1 026		813		-20.8%
	EBITDA			0	488			n.a.*	167		60		-64.1%
	Operating profit			0	343			n.a.*	118		15		-87.3%

* not applicable: in H1 of 2022 REKARD LLC. was not yet a full member of the consolidated companies

Rába Group

The Rába Group achieved consolidated sales revenues of HUF 56.0 billion in Q1-Q3 2023, an increase of 22.1 per cent compared to the HUF 45.8 billion in the base period of 2022.

The operating profit of the group during the current period amounted to HUF 1,927 million, compared to the HUF 1,085 million during the same period a year earlier.

During the reporting period, the financial result showed a profit of HUF 263 million, which includes, among other things, net interest payments of HUF 178 million and unrealised loan revaluations of HUF 366 million due to exchange rate decline.

Based on the above, the Rába Group achieved a net p rofit of HUF 1,670 million in Q1-Q3 of 2023 compared to losses of HUF 815 million in the same period last year.

At EBITDA level, the Rába Group achieved a profit o f HUF 3,853 million in Q1-Q3 2023, compared to HUF 2,996 million a year earlier.

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

Sales revenue by business units

	Sales revenue			Axle			Components			Vehicle			Rekard			Rába Group
	(HUF million)											consolidated
	2022 Q1	8 837	4 464		121					13 265
	2022 Q2	11 170	5 267		501					16 742
	2022 Q3	10 508	5 226		449		1 026	15 839
	2022 Q4	12 670	3 730		819		1 257	18 500
	2023 Q1	13 732	4 753		244		1 704	20 332
	2023 Q2	12 982	4 390		880		1 492	19 692
	2023 Q3	10 443	3 729		945		813	15 949

Breakdown of the sales revenues for Q1-Q3 2023

	HUF million			America						EU					CIS			Other			Total
					Total			export			domestic
	Axle	2 906		32 460		28 155		4 305		0		1 791			37	157
	Components	0	12 871		4 934		7 937		0		0		12	871
	Vehicle	3	2 066		711		1 355		0		0		2	069
	Rekard	2	3 994		2 899		1 096		0		13			4	009
	Consolidated	2 911		51 259		36 703		14 557		0		1 804			55	974

7

Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

Operating profit of group companies

Q1

Q2

2022

Q3

Operating profit

Q4	year	Q1

2023

Q2	Q3

year

Axle	-771	692	-146	643	418	40	402	-62	380
Components	19	357	289	120	785	209	336	-54	491
Vehicle	-28	85	73	225	355	-34	203	174	343
Rekard			118	-56	62	106	222	15	343
Other	296	100	1	27	424	188	137	45	370
Total	-484	1 234	335	959	2 044	509	1 300	118	1 927

Companies involved in the consolidation

Name	Share/Issue capital	Ownership		Voting ratio 1	Classification 2
HUF thousand	ratio (%)
Rába Axle Ltd.	9 765 800	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
REKARD LLC.	100 000	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).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME UNDER IFRS (IFRS INCOME STATEMENT)

data in thousand HUF

Q1-Q3Q1-Q3

Description of item

Index

Q3

Q3 Index

2022 2023

2022

2023

Domestic sales revenues	12 415 798	14 556 613	117.2%	4 212 365	4 405 851	104.6%
Export sales revenues	33 430 799	41 417 528	123.9%	11 626 954	11 543 628	99.3%
Sales revenues	45 846 597	55 974 141	122.1%	15 839 320	15 949 479	100.7%
Direct cost of sales	38 014 337	46 304 255	121.8%	13 319 998	13 643 460	102.4%
Gross profit	7 832 260	9 669 886	123.5%	2 519 321	2 306 019	91.5%
Cost of sales and marketing	353 280	482 389	136.5%	126 723	94 764	74.8%
General overhead and administration expenses	6 798 938	7 002 165	103.0%	2 175 063	2 113 948	97.2%
Other revenues	853 424	373 706	43.8%	184 288	122 260	66.3%
Other expenditures	448 764	632 421	140.9%	66 880	102 152	152.7%
Total other operating expenses	-6 747 558	-7 743 267	114.8%	-2 184 377	-2 188 604	100.2%
Revenue from operations	1 084 702	1 926 619	177.6%	334 944	117 415	35.1%
Financial revenues	1 126 277	783 498	69.6%	580 332	-1 110 585	-191.4%
Financial expenditures	2 819 428	520 271	18.5%	1 367 289	-372 427	-27.2%
Net financial profit/loss	-1 693 151	263 227	15.5%	-786 957	-738 159	93.8%
Profit from the acquisition of a subsidiary	0	0		0	0
Profit from the acquisition of an affiliated com-	108 611	0	0.0%	0	0
pany
INVESTMENT INCOME FROM PURCHASES	108 611	0	0.0%	0	0
PROFIT BEFORE TAXATION	-499 838	2 189 846	-438.1%	-452 013	-620 744	137.3%
Profit tax	314 919	519 396	164.9%	110 715	110 749	100.0%
PROFIT AFTER TAXATION IN THE CUR-	-814 757	1 670 449	-205.0%	-562 729	-731 493	130.0%
RENT YEAR
Basic earnings per share (HUF)	-60	124
Diluted earnings per share (HUF)	-60	124

1. EARNED REVENUES

In Q1-Q3 2023, Rába Plc. realised a turnover of HUF 55,974 million, a change of 22.1 per cent compared to HUF 45,847 million in the same period of the previous year. 74 per cent of turnover in the period under review was export, the rest was domestic sales.

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Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

2. COSTS AND OTHER REVENUES, EXPENDITURES

2.1. Direct costs

Rába Plc's direct cost level in Q1-Q3 2023 was 82.7 per cent compared to 82.9 per cent in the base period. Direct costs amounted to HUF 46,304 million, which is 21.8 per cent more than in the base period (Q1-Q3 2022: HUF 38,014 million).

Changes in gross profit

The gross yield changed from HUF 7,832 million in the base period to HUF 9,670 million (an increase of HUF 1,838 million), which is the result of an increase in sales revenue by HUF 10,128 million and in direct costs by HUF 8,290 million.

2.2. Cost of sales

Cost of sales increased by 36.5 per cent to HUF 482 million in Q1-Q3 2023 compared to HUF 353 million in Q1-Q3 2022.

2.3. General overhead and administration expenses

The Company reports under general and administrative expenses (Q1-Q3 2023: HUF 7,002 million,

Q1-Q3 of 2022: HUF 6,799 million) the administrative expenses (Q1-Q3 2023: HUF 2,797 million)

and other general expenses (Q1-Q3 2023: HUF 4,205 million).

2.4. Other revenues, expenditures

The balance of other income and expenses was a loss of HUF 259 million in the period under review, compared to a profit of HUF 405 million in the same period of the previous year. The result of the period was significantly influenced by the impairment and write-off of stocks and receivables in the value of HUF 284 million. The result from other activities during the base period also included the proceeds from a one-off property transaction, amounting to HUF 342 million.

3. OPERATING PROFIT

The Company's operating result in Q1-Q3 of 2023 was HUF 1,927 million (Q1-Q3 of 2022: HUF 1,085 million). The increase in gross profit (HUF 1,838 million) is worsened by the combined change in sales and general overhead and administrative expenses (HUF -333 million) and the change in the balance of other income and expenses (HUF -663 million). Profitability changed from 2.4 per cent in the base period to 3.4 per cent. Profitability of operating profit + depreciation increased to 6.9 per cent compared to 6.5 per cent in the base period.

4. FINANCIAL REVENUES AND EXPENDITURES

The net financial result for Q1-Q3 2023 was a profit of HUF 263 million, compared to a loss of HUF 1,693 million in the base period.

The net result on interest income and expenses in Q1-Q3 2023 was HUF -142 million (HUF -85 million in the base period).

The net exchange rate difference on foreign exchange items in Q1-Q3 2023 was HUF 379 million (HUF -1,601 million in the base period).

The composition of financial income and expenses is shown in the table below:

	data in HUF thousand			Q1-Q3 of 2022			Q1-Q3 of 2023
	Interest income	3 382		175 876
	Exchange rate gains	1 122 895		544 078
	Other financial revenues	0	63 543
	Financial revenues	1 126 277		783 498
	Interest payable	88 405		317 452
	Exchange rate loss	2 724 114		165 214
	Other financial expenditures	6 909		37 605
	Financial expenditures	2 819 428		520 271

5. PROFIT IN THE CURRENT YEAR

The profit before tax for Q1-Q3 2023 was HUF 2,190 million, which is HUF 2,690 million higher than

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Consolidated report of RÁBA Plc. on operations for Q1- Q3 2023 under IFRS

in Q1-Q3 of 2022 due to the factors discussed in sections 1-4. The profitability margin at the profit before tax level corresponds to a profitability on sales of 3.91 per cent, compared to -1.09 per cent in the base period.

At group level, a tax liability of HUF 519 million was incurred in the period. Of this amount, the corporate tax liability amounted to HUF 100 million, the business tax liability to HUF 360 million, the innovation contribution liability to HUF 64 million and the deferred tax expense for the current period to HUF -5 million.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNDER IFRS (IFRS BALANCE SHEET)

data in thousand HUF

	Definition of item			31.12.2022			30.09.2023			Index
	Real properties, machines, equipment		26 043 001			27 499 527			105.6%
	Intangible assets		47 336			45 605			96.3%
	Other long-term assets		0		0
	Property for investment purposes		331 522			331 522			100.0%
	Other investments		205			205			100.0%
	Deferred tax receivables		32 405			32 330			99.8%
	Total invested assets		26 454 469			27 909 190			105.5%
	Inventories		15 987 210			16 763 278			104.9%
	Trade receivables and other receivables		9 073 011			9 181 106			101.2%
	Profit tax receivables		0		0
	Other non-financial assets and receivables		3 010 864			3 409 568			113.2%
	Cash and cash equivalents		8 561 673			5 909 524			69.0%
	Total current assets		36 632 758			35 263 475			96.3%
	Total assets		63 087 227			63 172 665			100.1%
	Registered capital		13 473 446			13 473 446			100.0%
	Treasury shares		-108 952			-108 952			100.0%
	Retained earnings		9 447 999			11 118 448			117.7%
	Total equity and reserves		22 812 493			24 482 942			107.3%
	Long-term credits and loans		14 382 585			13 429 621			93.4%
	Provisions		0		0
	Deferred tax liability		238 635			233 820			98.0%
	Leasing liability		38 092			26 007			68.3%
	Others long-term liabilities		2 925 705			2 706 863			92.5%
	Total long-term liabilities		17 585 017			16 396 311			93.2%
	Provisions		374 677			374 677			100.0%
	Profit tax liability		151 031			38 047			25.2%
	Leasing liability		41 789			46 706			111.8%
	Short-term portion of loans and credits		7 964 535			6 366 384			79.9%
	Trade liabilities and other liabilities		10 374 587			9 554 092			92.1%
	Other non-financial liabilities		3 783 098			5 913 504			156.3%
	Total short-term liabilities		22 689 717			22 293 412			98.3%
	Total equity and liabilities		63 087 227			63 172 665			100.1%

Analysis of principal balance sheet items and their changes

1. INVESTED ASSETS

1.1. Properties, machines and equipment

The consolidated net value of property, plant and equipment changed from HUF 26,043 million at the 31 December, 2022 to HUF 27,500 million. The change is a 5.6 per cent increase. Depreciation of tangible assets in Q1-Q3 2023 was HUF 1,927 million.

In accordance with IFRS 16, the value of the assets, forklift trucks and passenger cars, the right to use of which was transferred to Rába by the lessor, amounted to HUF 92 million on 1 January 2023,

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