ANNUAL REPORT 2020

Železiarne Podbrezová a.s. ANNUAL REPORT 2020 32 ŽIAROMAT a.s. Žiaromat a.s. is an established producer of heat- resistant materials. The core of the production programme are heat-resistant concretes, fire clay, magnesite-carbon building materials and other heat-resistant mixtures. In 2020, there was a decrease in revenues and profitability, mainly due to the pandemic. This applied to the entire metallurgical industry, to which the company’s production is tied and which generates 89% of revenues. However, the company is succeeding in new Eastern European markets, thus compensating for the decline in orders from traditional customers. Heat-resistant mixtures and panels amounted to 35%, magnesite-carbon building materials to 20%, fire clay building materials to 19%, and other materials to 25% of total revenues in 2020. Last year, the company generated revenues from the sale of merchandise and own products and services totalling EUR 9 308 thousand, a 12% y/y decease. Exports accounted for 58% of total sales. The company’s equity as at 31 December 2020 amounted to EUR 2 831 thousand, which is approx. 32% of the asset coverage. Profitability decreased very significantly compared to 2019, but the company was able to post a profit despite the difficult situation. PIPEX ITALIA S.p.A. PIPEX ITALIA S.p.A. has been traditionally the most important sales and distribution channel for the products of Železiarne Podbrezová a.s., with a nearly 28% share of total sales. In 2020, the company’s revenues from the sale of merchandise and services decreased by 20% compared to 2019 to EUR 76 992 thousand. The company’s equity as at 31 December 2020 amounted to EUR 9 484 thousand, which is approx. 25% of the asset coverage. In 2020, the company generated a profit after tax of EUR 501 thousand, an over 70% y/y decrease. SLOVRUR Sp. z o. o. In 2020, SLOVRUR Sp. z o. o. was the second major distribution channel for the parent company. The company sold the products of Železiarne Podbrezová a.s. on the Polish market, and its share of the total sales amounted to almost 13%. In 2020, the company generated revenues totalling EUR 25 787 thousand, a 27%y/y decrease. The company’s equity as at 31 December 2020 amounted to EUR 3 499 thousand, which is approx. 41% of the asset coverage. The company reported a profit after tax amounting to EUR 296 thousand at the year-end, a significant 70% decrease. ŽP Trade Bohemia, a.s. ŽP Trade Bohemia, a.s. sells the parent company’s products on the Czech market, and is the fourth most important sales and distribution channel for the products of Železiarne Podbrezová a.s., with a 10% share of total sales. The company’s equity as at 31 December 2020 amounted to EUR 2 238 thousand, which is approx. 50% of the asset coverage. In 2020, the company reported total revenues of EUR 19 453 thousand and a profit of EUR 140 thousand in 2020, a 60% decrease in profit. Pipex Deutschland GmbH Since 2013, Pipex Deutschland GmbH has been taking over customers of PIPEX (International) AG, PIPEX ITALIA S.p.A. and the German agent, RS GmbH, with the objective of increasing the market share in Germany. In 2020, the company reported revenues from the sales of products of Železiarne Podbrezová a.s. totalling EUR 20 948 thousand and a profit of EUR 217 thousand. The company’s equity as at 31 December 2020 amounted to EUR 858 thousand, which is approx. 29% of the asset coverage. REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2020 AND INFORMATION ON THE BUSINESS PLAN