Ramada Investimentos e Indústria S A : Indústria, S.A. announces Financial Statements for the 3rd Quarter 2020

Earnings Announcement

3rd Quarter 2020

(unaudited)

This document is a translation of a document originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the International Accounting Standard 34 - Interim Financial Reporting, some of which may not conform or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

INTRODUCTION

Ramada Investimentos is the parent company of a group of companies that together operate within two distinct business segments: i) Industrysegment, which includes the activity of special steels and wire drawing, as well as the activity related to the management of financial investments in which the Group is a minority shareholder; and ii) Real Estatesegment, aimed at the management of real estate assets.

The special steels activity, which develops, especially at the level of the sub-segment of moulds, with a leading position in the domestic market, is developed by three companies: Ramada Aços, Universal Afir and Planfuro Global.

The wire drawing activity is developed by Socitrel whose main business is the manufacture and commercialization of steel wires, capable of being used in a wide variety of activities, including industry, agriculture and construction.

In the financial investments management activity, among other portfolio investments held by the Group, it should be highlighted the participations held in CEV, S.A. and Fisio Share - Gestão de Clínicas, S.A..

The Real Estate Segment includes the real estate asset management activity (composed by the forest assets and the Real Estate of the Group) and is developed by F. Ramada ll - Imobiliária, S.A..

RAMADA GROUP

INDUSTRY			REAL ESTATE

INDÚSTRIA

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HIGHLIGHTS - COVID-19

Since the beginning of the pandemic, Ramada Group implemented a set of measures for the prevention, control and surveillance, with prevention / contingency plans being developed that cover the entire organization, from the operational areas to the central structures, in all the Group's businesses.

Therefore, Ramada Group maintained its process of monitorization and assessing of the implemented measures, in order to respond to the demands arising from the COVID-19 pandemic. From all the actions implemented within the scope of the monitoring and evaluation of pandemic developments, we highlight the following:

• Ramada Group, implemented a set of measures for the prevention, control and surveillance of this infection. As a result of the various measures implemented by the Ramada Group, on September 30, 2020, a negative impact on the income statement is estimated in the amount of approximately 130 thousand Euro (including donations, protective equipment, among others).
• Ramada Group proceeded cautiously with an internal review and evaluation process on the investments it had planned for the 2020 financial year, reassessing the cost-benefit of these portfolio projects, as well as their feasibility, taking into account the current reality. From this review it was decided to reschedule to the second half the productive investments that were planned for the first half of 2020. Ramada Group expects to comply with the investments initially stipulated for 2020 until the end of the fiscal year.
• With regard to liquidity risk management, the Group maintained a liquidity reserve in the form of credit lines with its relationship banks, in order to ensure the ability to meet its commitments, without having to refinance in unfavorable conditions. As of September 30, 2020, the amount of consolidated loans1 maturing in the next 12 months is approximately 19 million Euro. On the same date, the Group has consolidated credit lines available (namely bank overdrafts, pledged current accounts and not used commercial paper programs) in the amount of approximately 40 million Euro. As a result of the performance of previous years, and the capacity to manage credit and liquidity risk, the Group presents a robust financial position statement, presenting Cash and cash equivalents amounting to 43 million Euro, representing approximately 90% of its current liabilities.
• Ensuring the permanent well-being of all Employees, their families and community, has always been and will continue to be a priority of the Ramada Group. To deal with the pandemic, Ramada Group put in place a set of additional preventive measures to protect the health and safety of its Employees, based on the recommendations of the Portuguese Health Authority. The human resources department, based on the recommendations of the Portuguese Health Authority, proceeded with the elaboration of the Group's COVID- 19 Contingency Plan. This plan has been continuously adjusted considering the evolution of the pandemic, being essential for the purposes of containing the impacts of the pandemic between our employees and the local community.

1 Consolidated loans: Bank loans + Other loans.

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CONSOLIDATED INCOME STATEMENT

The consolidated financial information of Ramada Investimentos was prepared in accordance with the recognition and measurement principles of the International Financial Reporting Standards, as adopted by the European Union (IFRS

• EU).

The key information and indicators of Ramada Group's consolidated activity can be presented as follows:

	9M 2020	9M 2019	Var. %
Sales and services rendered	74 304	86 504	-14.1%
Other income	515	463	11.2%
Total revenues	74 819	86 966	-14.0%
Cost of sales and production variation	(46 290)	(54 161)	-14.5%
External supplies and services	(10 063)	(11 082)	-9.2%
Payroll expenses	(8 913)	(9 797)	-9.0%
Other operating costs (a)	(1 220)	(437)	179.2%
Total costs	(66 486)	(75 477)	-11.9%
EBITDA (b)	8 333	11 490	-27.5%
EBITDA margin (c)	11.1%	13.2%	-2.1 pp
Amortization and depreciation	(2 370)	(3 246)	-27.0%
EBIT (d)	5 962	8 244	-27.7%
EBIT margin (e)	8.0%	9.5%	-1.5 pp
Results related to investments	57	-	-
Financial expenses	(866)	(1 203)	-28.0%
Financial income	46	141	-67.3%
Profit before income tax	5 199	7 181	-27.6%
Income tax	(845)	(1 454)	-41,9%
Consolidated net profit	4 353	5 727	-24.0%
Net profit attributable to shareholders of the parent company	4 353	5 727	-24.0%

Amounts in thousands of Euro

1. Other operating costs = Other expenses + Provisions and impairment losses
2. EBITDA = Profit before income tax + Financial expenses - Financial income + Amortization and depreciation
3. EBITDA margin = EBITDA / Total revenues
4. EBIT = EBITDA + Amortization and depreciation
5. EBIT margin = EBIT / Total revenues

During the first nine months of 2020, total revenues of Ramada Group amounted to 74,819 thousand Euro, representing a 14.0% decrease over the total revenues recorded in the same period of 2019.

Total costs amounted to 66,486 thousand Euro, recording a 11.9% decrease over the same period the previous year.

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