ANNUAL REPORT 2020

Železiarne Podbrezová a.s. ANNUAL REPORT 2020 38 its operating needs. The total credit facility limit is sufficient for continuous funding next year. The financial plan for 2021 was prepared at the beginning of the year and took into account available information from the market and suppliers. The planned revenues of EUR 226.4 million and a loss from operating activities is expected to be offset by a profit from financing activities, in particular by dividends received from subsidiaries. However, this plan does not reflect the significant growth in prices of raw materials in Q1 2021 and the gradual increase in selling prices of our products. We believe that the situation for producers will stabilise in the second half of 2021 and the Company will make a profit. The Group also operates in tourism via its subsidiary Tále a.s. With new partners, it is taking steps to improve marketing, expand and improve services and, by new investments, making Tále and the southern part of the central Low Tatras more attractive to increase profitability. Subsidiaries in the consolidated ŽP GROUP work closely with the parent company and contribute to the overall results of operations. We plan to generate a profit in almost all companies in 2021 and we expect it to be better than last year. As a result, the companies will develop and generate dividends for the parent company. Consolidated revenues from the sale of merchandise, products and services for 2021 are planned in the amount of EUR 300 million, with a consolidated loss after tax. CONCLUSION In 2021, Železiarne Podbrezová a.s. celebrates 181 years of existence. Over the years, the Company went through good times and bad times. It was the same in recent years: stagnation followed by strong growth and good economic results, supported by significant new investments. The year 2020 was very specific and difficult for everyone, but the management did well to maintain production, all key employees and long-term customers during the critical months thanks to the Company’s own sales network. Therefore, we believe that the current crisis will leave our Company more efficient, and that it will maintain its market position thanks to its high-quality products, competitive prices and very good service for our customers. In 2020, we utilised the Company’s production capacity at least to an extent that production could continue without major outages. Despite the operating loss, we made most of the planned investments in accordance with the investment plan, as they are investments in the Company’s future. Despite significant risks in the global economy, pressure to decarbonise production, fluctuating commodity prices, complicated logistics and frequent disruptions of supply of raw materials and semi-finished products, we believe that global population growth, greater urbanisation, long-term demand for personal mobility and the associated manufacturing in the automotive sector ensures a permanent place for the steel tube industry in the economy. The Company’s Board of Directors considers 2020 as one of the most difficult in the last decades. However, with regard to production and economic results, Železiarne Podbrezová a.s. seized every opportunity that the market offered in a very complicated period. All employees, including the management and employees of subsidiaries, contributed to the Company’s success. The 2020 loss amounted to EUR 3 011 thousand, with earnings per share of EUR -1.3. In the current uncertain situation, the Board of Directors proposes REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2020 AND INFORMATION ON THE BUSINESS PLAN