ANNUAL REPORT 2021

15 In cooperationwith our subsidiaries, ŽPVýskumno- vyvojové centrum s.r.o. (ŽP VVC) and ŽIAROMAT a.s., we introduced multiple technological changes and innovations at the steel mill in 2021. We tested a machine for dosing casting dust and we tested new types of slag-forming additives duringmelting in a ladle furnace. Our in-house development tested different variants for optimising production parameters and casting of alloyed boiler-quality steel. In 2021, the tube rolling mill produced 203 021 tonnes of tubes in total, 33 517 tonnes (20%) more than in the previous year and almost 11% more than planned. Of the produced volume, 134 894 tonnes were sold to external customers and 67 202 tonnes of rolled tubes were further processed by Železiarne Podbrezová. The rolling mill met the melting loss goal; however, we exceeded the set limits for downtime, primarily due to essential technical downtime and a higher number of reconfigurations and changes to steel quality. We undertook multiple technological innovations in 2021. We modernised the tube division section behind the refrigerator, and transport to downstream processing activities. We also optimised the settings of saws and related transport equipment. To expand our range of rolled tubes, we rolled test tubes with an outer diameter of 25 millimetres. These will be used as a semi-finished input product for the tube drawing plant which will reduce the number of runs in the production of precision tubes with smaller diameters for heat exchangers, hydraulic and pneumatic systems. The tube drawing mill exceeded the 2021 production plan by almost 9%. We produced 50 353 tonnes of cold-drawn precision tubes, an increase by 8 492 tonnes (20%) compared to 2020. In 2021, we sold 50 126 tonnes of drawn precision tubes to external customers, of which 1 574 tonnes had a galvanised finish and 1 796 tonnes were divided and hydraulic tubes. In 2021, there was an increase in orders for most product groups of the tube drawing mill: standard construction tubes, heat exchanger tubes, automotive and boiler tubes, and tubes for hydraulic and pneumatic systems. One of the most important investments in the tube drawing mill in 2021 was the installation of a new dividing machine from Reika. In 2021, we put into operation a treatment line for processing tubes of up to 20 metres in length. In cooperation with ŽĎAS, a.s., we modified another drawing bench into a tube division workplace. We have now modified four drawing benches in this way. Continually-cast blooms, seamless hot-rolled tubes and cold-drawn precision tubes accounted for over 99% of the total production of Železiarne Podbrezová a.s. in 2021. Other supplementary products with high added value were butt welding elbows and reducers. In 2021, we produced 1 994 tonnes of these products, which was a lower volume compared to previous years, due to the transition to a single-shift operation. We sold 2 045 tonnes of welded elbows and 82 tonnes of reducers to our customers. Sales of Core Products in 2021 Total salex of products Slovakia – 5% Export – 95% tonnnes EUR '000 Share in sales tonnes EUR '000 tonnes EUR '000 Steel blooms 112 729 71 050 24% 24 15 112 705 71 035 Seamless hot-rolled tubes 134 894 133 002 45% 7 018 7 623 127 876 125 379 Precision seamless cold-drawn tubes 50 126 90 665 30% 3 975 7 454 46 151 83 211 Butt welding elbows and reducers 2 127 4 182 1% 61 128 2 066 4 053 Total 299 876 298 898 100% 11 079 15 220 288 797 283 678 REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2021 AND INFORMATION ON THE BUSINESS PLAN