ANNUAL REPORT 2021

Annual report 2021 Železiarne Podbrezová a.s. 12 Dear Shareholders, 2021 was a year of economic recovery after the difficult year of restrictions in 2020 due to the global COVID-19 pandemic, and we recorded economic growth of more than 5% in the EU, which is our most important market. Despite this, the previous year was a challenging period for our Company and the ŽP GROUP. Both were positively impacted by strong demand for our products, which was accompanied by a significant increase in prices of input raw materials and major logistic difficulties. Global economic recovery caused by customer cutbacks, deferred consumption in 2020 and accumulated funds from government support programmes resulted in extraordinary demand, which could not be satisfied quickly, and led to continued order backlogs in many industries in the first half of 2022. Availability issues regarding certain raw materials and logistic flows were further exacerbated by the Russian invasion of Ukraine in February 2022. Complicated logistics, shortages of parts and raw materials cause manufacturers serious problems as regards the tying up of working capital in inventories and the planning of cash flows. REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2021 AND INFORMATION ON THE BUSINESS PLAN