Tatry mountain resorts : Re. Item 3 of the agenda – Business plan and financial budget – Report of the Board of Directors

Re. Item 3 of the Annual General Meeting agenda

Tatry mountain resorts, a.s.

Company's Board of Directors' business performance review, report on the Company´s assets and financial position as of 31/10/2022, business plan and financial budget

Dear shareholders, mountain fans,

We have behind us unprecedented years significantly marked by the COVID-19 coronavirus pandemic and the outbreak of a military conflict in neighbouring Ukraine, which negatively affected world markets and caused global inflation and economic instability. Despite these negative external factors, consolidated revenues achieved amount of EUR 133.6 mil. and operating profit before depreciation - EBITDA, amount of EUR 33.7 mil. However, due to higher operating and interest expenses, depreciation and impairment of property, we reported a net consolidated loss of EUR 11.9 mil.

Although the beginning of the season was marked by anti-pandemic measures that limited full-scale operation in Slovakian and Austrian resorts. Resorts in Poland and the Czech Republic recorded extraordinary successes. The Polish resort Szczyrk experienced a successful season, lasting 114 days, the newly built "Nová Skalka" ski slope, which also offers visitors night skiing, significantly contributed to the growth of revenues of the Czech resort - Ještěd.

The Polish amusement park Legendia in Katowice experienced a successful winter and summer season, in which we achieved a record number of visitors - over 500,000 visitors during the entire financial year. Thanks to the acquisition of Water park Bešeňová, which TMR has owned since April 2022, the total attendance in the segment of leisure parks approached 1.4 mil. visitors, which represents a 75% increase compared to 2019.

We have traditionally organized our favorite events throughout the year. The most visited Tatra attraction was once again the Tatra Ice Dome at Hrebienok, which this year was constructed in the style of the Pilgrimage of St. James. A novelty in the Jasná ski resort was the return of the shepherd tradition and the traditional mountain sheep - wallachian sheep, which visitors could experience in the Priehyba location on the northern side of Chopok. In addition to various events, we have prepared number of novelties and advantageous offers for our clients, which we have offered to guests through our portal and the loyalty program

GOPASS.

We invested EUR 23.6 mil. last year. The most important investment was the construction of the long-awaitednew cableway connecting the Biela Púť and Priehyba. Another strategically important investment and development activity in the Jasná resort was the expansion and upgrade of snowmaking system. In the High Tatras, we bought gastro business the Humno in Tatranská Lomnica, which we had rented for a long time. Investments also went to our foreign resorts in Poland, the Czech Republic and Austria.

The goal of the next few years is to achieve a balanced performance at least at the level of results before the outbreak of the pandemic. Furthermore, we want to grow organically, benefit from the completed investments and of course, improve the quality of services and the offer in our resorts.

Financial performance review of the year

• The total consolidated revenues increased by 107.7% to EUR 133.621 million (64.697).
• The consolidated operating profit before interest, tax, depreciation and amortisation (EBITDA) reached EUR 33.696 million EUR (7.000).
• The Group operated with the EBITDA margin of 25.2% (10.8).
• The net consolidated loss of the Group amounted to EUR -11.947 million (-45.876).
• The net consolidated loss per share amounted to EUR -1.694(-6.816).
• The number of visitors to Mountain Resorts increased to 2.660 million (1.163); Leisure parks recorded 1.416 million (483 ths.) of visitors.

STRATEGY

Vision

By capitalizing on our position of a natural monopoly due to the unique position of the Tatras, to become a premier, internationally renowned tourism services provider striving to revive mountain resorts, aquaparks, theme and amusement parks in the region of Central and Eastern Europe from the investment, sports, cultural, and social point of view.

Mission statement

TMR's mission is to provide services in tourism at a constantly increasing level, in particular through business activities divided into seven key segments - Mountains Resorts; Leisure Parks; Golf; Dining; Sports Services and Stores; Hotels; and Real Estate. The Group plans to fulfil its mission through synergies leading to a complex satisfaction of both, its clients, and shareholders.

Competitive advantage

As opposed to other operators of mountain resorts and tourist services in the region of Central Eastern Europe, TMR holds a position of natural monopoly due to the unique geographical location of TMR's key mountain resorts in the highest mountain range in the region - the Tatras and due to a long history and significant local brands of the resorts in Poland and Czech. This advantage predetermines them to be premier tourist destinations in Central and Eastern Europe. Besides the attractive mountain environment and the resorts' history, the following facts form the competitive advantage for TMR:

• Through its loyalty program GOPASS the Group is able to build and sustain a wide client base in Slovakia, Poland, Czechia, and Austria during both the winter and summer season.
• There are 64 million people living in TMR's key target countries within the CEE region, and their economic power and leisure spending has been increasing from year to year.
• The Poprad Airport ensures easy access by air from key European cities outside the mountainous area, e.g. London, Warsaw, Riga, Tel Aviv, and by charter or private flights from summer destinations, such as Turkey, Bulgaria, Greece, and Albania.
• To the east of the Tatras there are ski resorts with only limited comparable services.
• The high altitude provides a competitive advantage for TMR, comparing to other resorts in the region, since it significantly mitigates the risk of unfavorable weather as a result of global warming.

• The Group is able to capitalize on intra-segmental and inter-company synergies in sales, purchase, operations, and support areas of the Group.
• TMR has years of experiences and know-how in operation of mountain resorts, leisure parks, and ancillary tourist services, as well as in building capital-intense infrastructure.
• TMR's business model is well diversified with revenue generation from mountain resorts, leisure parks, hotels and complementary services.
• The size of the Group and its years of experiences and success enables an easier access to capital
• TMR mitigates the risk of seasonality with its summer season comparably strong to its winter season thanks to its summer cableway operations and summer activities, popularity of hotels in the mountain resorts, the summer operation of Silesian Amusement Park, and the all-year operation of Aquapark Tatralandia, water park Bešeňová and now also thanks to the almost all-year ski season at the Mölltaler glacier.

BUSINESS STRATEGY

The long-term strategic goal of the Group is to maintain its leading role in winter and summer tourism in the region of Central and Eastern Europe and use this position to gradually enter new European markets. Leadership in the area of tourism provides TMR with the ability to set trends and standards in this industry. At the same time, it leads the Group to differentiation. As a result, TMR works on offering premium services for reasonable prices in comparison with other similar resorts in Europe. A wide spectrum of services and their quality are the key for the Group's direction. This goal is based on three pillars, which are highly interconnected:

Pillar 1: Increasing quality with investments

By the end of 2022, for the last 16 years TMR had invested in its resorts and hotels over 443 million euros. As a result of these investments, the services provided by TMR in the High and Low Tatras, in Polish Szczyrk and Legendia improved significantly. TMR's resorts thus reached the level of alpine resorts and increased their leading position in the region.

CAPEX of approximately 24 million euros in 2021/22 includes among other things investments in the the construction of the Biela Púť cableway in Jasná, improvement of snowmaking system, acquisition of dining facility Humno in Tatranská Lomnica, the completion of snowmaking reservoirs Zadné vody, continuation of construction works at Centrum Jasná development project and other minor investments in Slovak resorts. In Szczyrk mountain resort, the Group invested in dining facilities, improving the safety of bike park and purchase of lands. In the Czech Republic, in the Ještěd resort, the Group invested of project - "Nová Skalka" and minor maintenance investments. Within the golf segment in the Ostravice and Kaskáda resorts, the Group focused on operational investments. In Austria, the Group has invested into new access system at the Mölltaler and Ankogel resorts. In Muttereralm the Group has invested into development of the existing bike park.

In the following periods TMR plans for its resorts in the Slovak Tatras to grow organically and capitalize on the completed investments. Future CAPEX in the Slovak resorts will mainly cover maintenance investments. The Group also plans to continue in the started real estate projects in the Slovak resorts. The Central Resort Hotel is being built in Jasná. In Tatralandia, new bungalows for sale will be built and will be managed by TMR. In Poland, the Group will primarily invest in maintenance. The newest acquired Austrian resorts will also require extensive investments, which TMR is planning in a few years. New

slopes, lifts as well as the strengthening of the accommodation infrastructure in almost every resort are in the process of preparation, but many of them are hindered by lengthy processes in granting permits or granting exceptions.

Pillar 2: Strategic acquisitions and expansion

Following the acquisition of three Austrian resorts in the last couple of years, in the medium term, TMR will focus primarily on completing and strengthening existing resorts, where it will have ample opportunities to grow, improve services and improve TMR's results after the COVID-19 pandemic is over. Strategic expansion of the operations on the neighbouring Czech market includes an indirect minority interest in Melida a.s., the operator of the Špindlerův Mlýn resort, which is included in the GOPASS loyalty program. In November of 2017 TMR made an agreement with the Czech town of Liberec for TMR to rent and operate the ski resort Ještěd. TMR plans to develop the potential of this unique city ski resort via future investments. TMR also expanded its business activities in Czech by entering a new segment - golf. Since November 2018 TMR has been renting Golf & Ski Resort Ostravice and in January 2018 it started managing Kaskáda Golf Resort Brno. The Ostravice contract has been signed for 20 years and the Kaskáda contract, based on which TMR is managing the resort's hotel, restaurant, and a congress center, has been signed for 20 years. TMR also plans to further expand its business activities in utilization of accommodation capacities for third parties, namely new cottages in Tatralandia.

Pillar 3: Constant operation & service enhancement

The intensive growth in the number of visitors in the years before the outbreak of the COVID-19 pandemic, had been the result of an intensive customer orientation. Even in the years to come, management wants to achieve intensive growth of the number of visitors primarily by intensive pro-customer approach. Strategic steps to achieve this goal in the recent years included increasing the variety and quality of the services provided. TMR expanded the scale of attractions offered and improved the quality of ski schools, ski equipment rentals, and dining facilities on slopes. Moreover, it continuously improves the offer of après ski possibilities. The Group also tries to optimize transport possibilities to its resorts and cooperates with local business entities on the level of regional clusters. TMR prefers to cooperate rather than compete with them; it wants to build on their success and provide their customers easy access to its nearby mountain resorts and leisure parks and a variety of attractions for children, adrenalin sports for the young (e.g. bike parks), and relaxation zones. Regarding accommodation possibilities, TMR focuses primarily on four-star hotels and improvement of their wellness and dining services. Other strategic steps include focus on affluent clientele, essential quality of management and staff, and a sophisticated marketing strategy. In the following period, TMR continuously improves its analysis of big data and focuses on implementation of its findings in its operations. Another key to TMR's growth is innovation. In this regard, TMR acts as the trendsetter in tourism. The loyalty program GOPASS enables its customers to shop online or via a mobile app and to collect points in its facilities by using its services and pay bargain prices, and at the same time, GOPASS serves as TMR's Customer Relationship Management and Direct Marketing tool. This loyalty program was awarded in 2015 at The Loyalty Awards in London, where it won in categories: the Best loyalty program of the year in the travel sector (airlines, hotels, destinations); the Best loyalty program of the year in Central and Eastern Europe; and the Best Customer Relationship Management (CRM) in a loyalty program for Direct Marketing. Within this pillar TMR fully utilizes synergic

effects among its segments, thus it is able to constantly optimize services it provides, as well as to keep expanding its variety of products and services, e.g. an option to use services of several mountain resorts and the aquapark with purchase of just one ticket. The quality management in the resorts is also supported by the revolutionary price policy of flexi ski pass prices, which allows the resorts to regulate attendance and plan capacity. In times of lesser demand TMR offers skiing at much more attractive prices than in the past and at times of congestion, with higher prices it can generate better sales and keep visitors at a level that can offer quality skiing. In the next year TMR plans to implement the flexi pricing system also in the resort of Szczyrk and the Špindlerův Mlýn Ski Resort. TMR will also test the new hotel system and plans to implement it in all the hotels in the portfolio.

CAPEX

•Almost EUR 443 mil. over 16 years

•New modern cableways and infrastructure •Renewed hotels •Larger, modernised resorts •Investment suites

Financial budget:

ACQUISITIONS

•Tatralandia water park

•Špindlerův Mlýn, CZ

(25%)

•Szczyrk Mountain

Resort, PL

•Legendia - Silesian

Amusement Park, PL

•Mölltaler Gletscher, AT

•Ankogel Mallnitz, AT

•Muterreralm, AT

•Lease of Skiareál

Ještěd, CZ

•Water park Bešeňová

•Commercial marketing

cooperation and managing of resorts for third parties

QUALITY

•Better adventures and moment for visitors as a result of synergies •Trendsetter in the field of tourism

•GOPASS loyalty programme

•Innovative technologies

•Flexible prices

The Company plans to reach the following consolidated financial results as of 31st October 2023:

Total planned operating revenues:	EUR 180,000 thousand
Planned operating EBITDA indicator:	EUR 49,000 thousand