ANNUAL REPORT 2020

Železiarne Podbrezová a.s. ANNUAL REPORT 2020 31 points and one processing plant. It employed 208 employees as at 31 December 2020. In 2020, the company processed and disposed of 7 939 automobile wrecks at its ecological plant for processing metal waste and old vehicles using SHREDER processing technology in Hliník nad Hronom, a 31% y/y decrease. Nevertheless, the limit for processing old vehicles, set for 2020 as a condition for obtaining a subsidy from the Recycling Fund, was exceeded by a factor of two. The company shipped 5 942 tonnes of non-ferrous metals in 2020, a slight y/y decrease (2%). The average prices of non-ferrous metals decreased by approx. 17% compared to 2019, more than the drop in the scrap steel prices. The company shipped 208 thousand tonnes of scrap steel and non-ferrous metals in 2020, a y/y decrease of almost 7% (15 thousand tonnes). The supplies to Železiarne Podbrezová decreased by almost 18% (34 thousand tonnes). The share of sales on the Slovak market decreased to 88%. The remaining 12% of the sales of scrap steel were exported abroad, mainly to the Czech Republic, Poland and Italy, where approx. 26 thousand tonnes of production were exported last year. The company’s funding was balanced in 2020, and the company also made use of overdraft facilities from two banking institutions to finance its working capital, as in previous years. The purchasing, production and supplies of scrap steel were regular and steady throughout the year. Last year, the company spent a total of EUR 3 469 thousand on new investments, in particular to purchase land near the headquarters, new transport and handling equipment and containers. The costs of repairs of technological and transport equipment totalled EUR 1 549 thousand. In 2020, the company posted revenues of EUR 48 519 thousand, a decrease of almost 16% compared to 2019. The decrease was mainly caused by a decrease in prices of all categories of scrap and non-ferrous metals during the year as well as a decrease in the sales volume. Nevertheless, the company reported a net profit of EUR 423 thousand in 2020, which is a significant increase in profitability compared to the loss for 2019. The key expense items were the purchase of merchandise and raw materials and consumables used, which accounted for 70%. The company’s equity as at 31 December 2020 amounted to EUR 19 112 thousand, which is approx. 55% of the asset coverage. Ensuring regular scrap metal supplies of the required quantity and quality for the parent company, Železiarne Podbrezová a.s., remains the main task of ŽP EKO QELET a.s. The company naturally seeks to make a profit, so in 2021 it will focus on efficient utilisation of its personnel, technical and technological capacities with respect to feasible possibilities of the production of scrap steel and non-ferrous metals. Therefore, it will be important for the company to stabilise supplies of scrap steel to other strategic customers and maintain the supplier network, while focusing on regular supplies from manufacturing plants. KBZ s.r.o. KBZ s.r.o. is the second-largest supplier of scrap steel to Železiarne Podbrezová a.s. In 2020, the company generated revenues from the sale of merchandise and own outputs amounting to EUR 16 386 thousand, an almost 11% decrease compared to the previous year. In 2020, KBZ s.r.o. supplied almost 74 thousand tonnes of metal waste to its customers, of which 53 thousand tonnes of scrap steel were supplied to the parent company. For Železiarne Podbrezová a.s., this amounted to almost 23% of total purchases of scrap steel for steel production. The company’s equity as at 31 December 2020 amounted to EUR 2 523 thousand, which is approx. 30% of the overall asset coverage. Despite the decrease in revenues and selling prices of scrap metal, the company posted a profit of EUR 204 thousand in 2020. REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2020 AND INFORMATION ON THE BUSINESS PLAN