ANNUAL REPORT 2020

Železiarne Podbrezová a.s. ANNUAL REPORT 2020 3 INTRODUCTION OF THE CHAIRMAN OF THE BOARD OF DIRECTORS Železiarne Podbrezová a.s. had a very difficult time coping with 2020. In Q1 2020, we still had enough orders and the Company produced, sold and operated more or less in the normal mode. However, the next three quarters were very difficult for us. There were months when we did not have enough orders and we had to literally “do magic” and come up with incredible ways to keep employees. We knew that the pandemic and the crisis will go away. We have very skilled employees and we must protect them. Thanks to our pressure with other large companies, we managed to persuade the Government of the Slovak Republic to partially use the funds obtained from the European Union to strengthen companies in order to maintain employment. During the individual months of 2020, our production was not optimal and the prices of some inputs grew. Therefore, our problem was to maintain the rise in output prices, as a result of which we ended the year with a loss. In my opinion, however, the economic result was much better than we expected at the beginning of 2020. Our subsidiaries generated good results the previous year and the Company profited by earning dividends. The consolidated loss of EUR 3.8 million was not so bad after all. I am very pleased that we have managed to maintain employment and moved smoothly into 2021. In 2021, however, we were hit by another crisis with huge increases in the prices of all inputs, starting with crude iron, steel scrap, ferro-additives, but also rising prices of electricity, gas and everything we need for production. The year 2021 will certainly be marked by this crisis and will have similar, if not greater consequences and impacts on the reduction of employment in the Slovak Republic. The overall results of the Slovak economyweremuch better than expected by the Slovak government. This was mainly due to industrial business, which contribute to the state budget. I would like to use the annual report of our Company to thank the health professionals, doctors and other staff who took care of the health of citizens during the pandemic with the utmost effort. I am very glad that we, too, made the right decision to give employees preventive vitamins to help protect their health. I would like to thank all our business partners for the economic results achieved in 2020. I highly appreciate their payment discipline in 2020. It is admirable that, despite the difficult situation, we did not have problems with payments from our customers. I believe, even though 2021 is not without problems, that we will certainly achieve better results than last year. Despite the crisis, we are a company that works with sufficient inventories of input materials needed for our production. I am convinced that we can take advantage of our rich experience from good and bad times to achieve the best possible economic results and to fulfil the expectations of our customers and employees. I believe that we will be able to generate a profit. I would like to thank all those who were involved in carrying out the tasks in 2020 in any form and in any area. I believe that we will continue good cooperation in the future. Ing. Vladimír Soták Chairman of the Board of Directors and Chief Executive Officer