Interim report
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 1 THE E RBUD GROUP Condensed, Consolidated Financial Statement For the accounting period ended on 31 March 2025 Drawn up in compliance with the International Accounting Standard (IAS) No. 34, as endorsed for use in the European Union
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 2 CONDENSED CONSOLIDATED STATEMENT OF PROFIT/LOSS For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 GOING CONCERN OPERATIONS Note 4.2. Revenues from sales of products and services 733,118 644,267 Note 4.2-4.3 Cost of products and services sold 696,261 601,595 Gross sales profit/(loss) 36,857 42,672 Note 4.3. Cost of sales 5,935 4,835 Note 4.3. General and administrative (G&A) costs 45,987 44,177 Other operating income 8,353 24,533 Other operating expenses 2,889 2,725 Impairment of financial assets and contract valuation assets 478 (95) Note 4.2. Operating profit (9,123) 15,373 Share in net profits/losses of equity-accounted subsidiaries (551) (259) Financial income 3,326 5,480 Financial expenses 9,945 8,900 Note 4.2. Gross profit (16,293) 11,694 Note 4.4. Income tax (700) 2,044 Net profit /(loss) for the accounting period (15,593) 9,650 Shareholders of Parent Company (13,152) 2,758 Non-Controlling Stakeholders (2,441) 6,892 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 Consolidated profit / (loss), net (15,593) 9,650 Foreign exchange gains/losses resulting from translation of statements of foreign entities (1,564) (150) Comprehensive income (including tax effect) subject to reclassification into result (1,564) (150) Comprehensive income in the accounting period (17,157) 9,500 Appropriated to: Shareholders of Parent Company (14,716) 2,608 Non-Controlling Stakeholders (2,441) 6,892
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 3 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 32 Mar. 2025 31 Dec. 2024 ASSETS 2,053,690 2,027,937 Goodwill 42,399 42,760 Intangible assets 27,397 14,532 Tangible fixed assets 333,547 347,956 Investments accounted for using the equity method 45,160 45,711 Financial assets 39,659 24,036 Deferred tax assets 127,846 126,308 Receivables under building contracts - bid bonds 3,627 3,001 Fixed assets 619,635 604,304 Inventory 180,632 172,339 Receivables under building contracts - bid bonds 34,525 41,446 Note 2.2. Pricing of building contracts - assets 438,454 351,536 Note 5.1. Trade receivables 486,809 458,438 Note 5.1. Income tax & VAT receivables 33,039 22,928 Note 5.1. Other receivables 23,138 27,008 Financial assets 10,657 10,520 Cash and cash equivalents 198,269 300,269 Cash assets in VAT account 8,203 29,505 Short-term prepayments 20,329 9,644 Current assets 1,434,055 1,423,633 LIABILITIES 2,053,690 2,027,937 Note 3.1. Share capital 1,193 1,193 Supplementary capital 289,658 289,658 Reserve capital 104,346 104,346 Foreign exchange gains/losses resulting from conversion of foreign unit (1,005) 559 Retained earnings 77,646 90,798 Equity of Parent Company shareholders 471,838 486,554 Equity of non-controlling stakeholders 140,015 142,456 Equity 611,853 629,010 Note 3.2.-3.4 Debt 252,580 178,276 Provisions 25,024 25,717 Deferred tax liabilities 22,229 21,774 Liabilities vis-à-vis subcontractors - bid bonds 15,296 17,816 Long-term liabilities 315,129 243,583 Note 3.2.-3.4 Debt 99,374 134,865 Provisions 49,117 34,895 Liabilities vis-à-vis subcontractors - bid bonds 132,075 131,672 Note 2.2. Pricing of building contracts - liabilities 448,981 431,941 Note 5.2. Trade payables 299,558 312,199 Note 5.2. Income tax & VAT liabilities 10,129 26,014 Note 5.2. Other liabilities 87,474 83,758 Short-term liabilities 1,126,708 1,155,344
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For a 3 -month -period ended on 31 March 2025 and for a 3 -month -period ended on 31 March 2024 Share capital Supplement ary capital Reserve capital Foreign exchange gains/losses resulting from conversion of foreign unit Retained earnings Total Equity of non- controlling stakeholders Equity As of 1 Jan. 2024 1,193 281,353 104,346 3,784 146,867 537,543 137,403 674,946 Net profit/loss in the accounting period - - - - 2,758 2,758 6,892 9,650 Comprehensive income in the accounting period - - - (150) - (150) - (150) Other comprehensive income - - - (150) 2,758 2,608 6,892 9,500 As of 31 Mar. 2024 1,193 281,353 104,346 3,634 149,625 540,151 144,295 684,446 As of 1 Jan. 2025 1,193 289,658 104,346 559 90,798 486,554 142,456 629,010 Net profit/loss in the accounting period - - - - (13,152) (13,152) (2,441) (15,593) Comprehensive income in the accounting period - - - (1,564) - (1,564) - (1,564) Other comprehensive income - - - (1,564) (13,152) (14,716) (2,441) (17,157) As of 1 Jan. 2025 1,193 289,658 104,346 (1,005) 77,646 471,838 140,015 611,853
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 5 CONDENSED CONSOLIDATED CASH FLOW STATEMENT For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 OPERATIONAL CASH FLOWS Gross profit/loss (16,293) 11,694 Note 4.3. Amortization and depreciation 12,414 9,560 Foreign exchange losses (2,965) (1,920) Interest and share in profits (dividend) 4,463 4,219 Other non-cash adjustments 363 (23,413) Income tax paid (15,463) (17,575) Note 5.3. Change of working capital balance (100,047) (41,649) Operational cash flows, net (117,528) (59,084) INVESTMENT ACTIVITY CASH FLOWS Proceeds from the sales of interest in a jointly controlled entity - 44,578 Inflows from credits/loans extended 2,440 26,248 Other inflows 2,362 1,754 Expenditures on the acquisition of tangible fixed assets (6,994) (4,246) Loans extended expense (7,065) (3,991) Expenditures on the acquisition of shares in companies - (15,140) Other expenses - (204) Investment activity cash flows, net (9,257) 48,999 FINANCIAL ACTIVITY CASH FLOWS Income from credits and loans taken 53,537 50,666 Debt repayment expense - principal (18,139) (2,869) Lease debt repayment expense - principal (4,794) (4,686) Debt (interest) repayment expense (5,547) (6,164) Other expenses (272) (132) Financial activity cash flows, net 24,785 36,815 NET CASH FLOWS (102,000) 26,730 Opening cash balance 300,269 263,119 Closing cash balance 198,269 289,849
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 6 1. BACKGROUND INFORMATION------------------------------------------------------------------------------------------------------------- 7 1.1. INTRODUCTION ------------------------------------------------------------------------------------------------------------------------ 7 1.2. GROUNDS FOR DRAWING UP THE FINANCIAL STATEMENT ------------------------------------------------------- 9 1.3. THE APPLICATION OF NEW AND AMENDED STANDARDS, AND THEIR INTERPRETATIONS: ------- 10 2. BUILDING CONTRACTS --------------------------------------------------------------------------------------------------------------------- 13 2.1. INCOME AND EXPENSES UNDER BUILDING CONTRACTS -------------------------------------------------------- 14 2.2. DETERMINATION OF OUTSTANDING AMOUNT RELATED TO NON-COMPLETED BUILDING CONTRACTS ------------------------------------------------------------------------------------------------------------------------------------- 15 3. CAPITAL AND DEBT MANAGEMENT -------------------------------------------------------------------------------------------------- 16 3.1. CAPITAL MANAGEMENT ---------------------------------------------------------------------------------------------------------- 16 3.2. CREDIT AND LOAN LIABILITIES------------------------------------------------------------------------------------------------ 17 3.3. DEBT RELATED TO ISSUED BONDS ----------------------------------------------------------------------------------------- 18 3.4. LEASE LIABILITIES ------------------------------------------------------------------------------------------------------------------ 19 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS ---------------------------------------------------------- 20 4.1. ALTERNATIVE PERFORMANCE MEASURES ----------------------------------------------------------------------------- 20 4.2. ACCOUNTING SEGMENTS------------------------------------------------------------------------------------------------------- 21 4.3. COST OF GOODS SOLD (COGS) ---------------------------------------------------------------------------------------------- 24 4.4. TAXATION ------------------------------------------------------------------------------------------------------------------------------ 24 4.5. FINANCIAL RISK MANAGEMENT PRINCIPLES --------------------------------------------------------------------------- 25 4.5.1. MARKET RISK – CURRENCY RISK------------------------------------------------------------------------------------- 25 4.5.2. MARKET RISK – INTEREST RATE RISK------------------------------------------------------------------------------ 25 4.5.3. LIQUIDITY RISK---------------------------------------------------------------------------------------------------------------- 26 4.5.4. CLIMATE RISK ----------------------------------------------------------------------------------------------------------------- 26 5. OTHER NOTES ---------------------------------------------------------------------------------------------------------------------------------- 27 5.1. TRADE RECEIVABLES AND OTHER RECEIVABLES ------------------------------------------------------------------- 27 5.2. TRADE PAYABLES, OTHER LIABILITIES------------------------------------------------------------------------------------ 28 5.3. EXPLANATORY NOTES TO THE CASH FLOW STATEMENT -------------------------------------------------------- 29 5.4. GROUP STRUCTURE -------------------------------------------------------------------------------------------------------------- 29 5.5. POST-ACCOUNTING PERIOD EVENTS ------------------------------------------------------------------------------------- 32
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 1. BACKGROUND INFORMATION 7 1. BACKGROUND INFORMATION 1.1. INTRODUCTION The Parent Company of Erbud S.A Capital Group ("Gro up”) is Erbud S.A. ("Parent Company”), with its registered office in the City of Warsaw, at ul. Franciszka Klimczaka No. 1. The Parent Company was entered into the National C ourt Register on 29 November 2006 under entry No. K RS 0000268667 (District Court for the Capital City of Warsaw, 13 th Commercial Division of the National Court Register). The Parent Company has been listed on the Warsaw Stock Exchange since 2007 and has been incorporated into the construction companies index "WIG Construction". The scope of the Group's activities comprises broad ly understood construction and erection services pe rformed on general contractor basis in Poland and in foreign c ountries as well as development services for RES pr ojects and maintenance services for industry. In addition, Erbud S.A. plays the role of a management, advisory and financial centre within the Group. The Group operates in the Polish market and in the markets of other European Union countries. The duration of the Parent Company and the Group member companies is indefinite. As of 31 March 2025 and as of the date of the Conde nsed Consolidated Financial Statements the Parent C ompany's Management Board consisted of: Dariusz Grzeszczak – President of the Management Board Agnieszka Głowacka – Vice-President of the Management Board Jacek Leczkowski – Vice-President of the Management Board Tomasz Wojak – a Management Board Member. As of 31 March 2025 and as of the date of the Conde nsed Consolidated Financial Statements the Parent C ompany's Supervisory Board consisted of: Roland Bosch – the Supervisory Board Chairman Michał Otto – a Deputy Chairman of Supervisory Board Albert Dürr – a Supervisory Board Member Janusz Reiter – a Supervisory Board Member Beata Jarosz – a Supervisory Board Member Michał Wosik – a Supervisory Board Member Sylwia Hałas – Dej – a Supervisory Board Member Seweryn Kubicki – a Supervisory Board Member The Condensed Consolidated Financial Statements of the Erbud S.A. Group are published on the Warsaw St ock Exchange (WSE) website under ESPI/EBI Company Reports.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 1. BACKGROUND INFORMATION 8 Detailed organisational structure of the Group is p resented in the Note 5.4. The above figure shows th e share of Erbud S.A. in individual member companies of Erbud S.A. Capital Group as of 31 March 2025.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 1. BACKGROUND INFORMATION 9 1.2. GROUNDS FOR DRAWING UP THE FINANCIAL STATEMENT IAS Compliance Statement The Condensed Consolidated Financial Statements wer e drawn up as of 31 March 2025 in compliance with t he International Financial Reporting Standard (IFRS) No. 34, endorsed by the European Union. The Condensed Consolidated Financial Statements are presented in Polish currency (Polish zloty, "PLN"), and all values are specified in thousands of Polish zlotys. The Condensed Consolidated Financial Statements have been drawn up on the historical cost basis and in vestments in jointly controlled and associated entities are measured using the equity method. This Condensed Consolidated Financial Statement was endorsed for publication by the Management Board o n 12 May 2025. Going concern This Condensed Consolidated Financial Statements have been drawn up following going concern principle applicable to all Group member companies in the foreseeable future. As of the date of approval of this Condensed Consolidated Financial Statement, no signs prevailed indicating a risk to the continuation of Group operations following a going concern principle. Impact of armed conflict in Ukraine In 2025, the impact of the war in Ukraine on econom ic processes is smaller than in the previous years. The situation is fairly stable, but still forces the Group to operate in an evolving environment. Among the negative impacts of the war, the most significant for the Group are the price hikes of materials and wage costs. The Polish currency ha s been strengthening, its value returning to the level predominant prior to the outbreak of hostilities in Ukraine. The Group takes various risks into account in its on-going calculations. These include price hikes of materials and labour costs. They also include currency fluctuations. Management monitors the changing geo-political and economic situation and takes steps to minimise the negative impact of these changes, such as diversifying the business both geographically and by segment, while at the same time negotiating the terms of contracts with principals. Pricing at fair value The measure of fair value of an asset or liability the Group takes into consideration the properties o f a certain asset or liability, if the market participants take into consideration these characteristics when measuring the assets or liabilities at the measurement date. The Group classifies fair value measurement principles using the fair value hier archy, reflecting the weight of source data used for measurement, pursuant to IFRS No. 13. As of the individual balance sheet dates, the Group has no items measured at fair value but discloses fair value for items measured at amortized cost. Conversion of items into foreign currencies The items specified in the Financial Statements are measured in the currency of the core business envi ronment where the entity carries out its operations ("functional currency”). The functional currency of Polish companies within the Group is PLN, whereas the functional currency of German c ompanies is EUR, and the presentation currency of t he financial statements is Polish zloty (PLN) Transactions in foreign currencies are recorded in the books at the time of initial recognition in the value converted into PLN at the average NBP rate prevailing at the transaction date. At the balance-sheet date cash assets and liabilities denominated in currencies other than Polish zloty are converted into Polish zlotys using the appropriate average exchange rate, effective at the end of the accounting period, determined for a certain currency by the National Bank of Poland (NB P). The foreign exchange gains/losses are posted re spectively into the line "Financial gains (losses)" or in cases def ined by accounting principles (policy), are capital ised in the assets value.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 1. BACKGROUND INFORMATION 10 The non-cash assets and liabilities recognised at h istoric cost expressed in foreign currency are post ed at historical exchange rate prevailing at the transaction date. N on-cash assets and liabilities are carried at fair value expressed in foreign currency are converted using the exchange rate prevailing at the date of fair value measurement. 1.3. THE APPLICATION OF NEW AND AMENDED STANDARDS, AND THEIR INTERPRETATIONS: The application of new and amended standards, and their interpretations The following new and amended standards, which came into force in 2025, were applied to this Condensed Consolidated Financial Statement: a) Amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates" In August 2023, the IASB published amendments to IA S 21 'The Effects of Changes in Foreign Exchange Ra tes'. The amendments made are intended to make it easier for entities to determine whether a currency is convertible into another currency and to estimate the immediate exchange rate when a currency is not convertible. Additionally, the amendments to the standard introduce the requirement of additional disclosures when currencies are not convertible on how the alternative exchange rate is determined. The published amendments shall apply to financial statements for the periods beginning on or after 1 January 2025. Published standards and interpretations, which are not yet effective and have not been applied by the Group before. In these Condensed Consolidated Financial Statement s the Group has not decided to apply earlier the fo llowing published standards, interpretations or amendments to existing standards before their effective date. a) Amendments to the classification and measurement of financial instruments - Amendments to IFRS 9 and IFRS 7. In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 with the aim to: a) define more precisely the recognition and dereco gnition dates for certain financial assets and liabilities, with an exemption for certain financial liabilities settled through an electronic funds transfer system; b) clarify and provide additional guidance on how t o assess whether a financial asset complies with the SPPI criteria. c) add new disclosures for certain instruments whos e contractual terms may alter cash flows; and d) update disclosures for equity instruments measur ed at fair value through other comprehensive income (FVOCI). The published amendments shall apply to the financial statements for periods beginning on or after 1 January 2026. At the date of drawing up these Condensed Consolida ted Financial Statements, the amendments in questio n had not yet been endorsed by the European Union. b) Annual Improvements to IFRS Accounting Standards "Annual Improvements to IFRSs" introduce amendments to following standards: IFRS 1 "First-Time Adoptio n of International Financial Reporting Standards", IFRS 7 "Financial Instruments: Disclosures", IFRS 9 "Fin ancial Instruments", IFRS 10 "Consolidated Financial Statements" and IAS 7 "Statement of Cash Flows". The amendments provide clarifications and further refine the standards' guidance on recognition and measurement. At the date of drawing up these Condensed Consolida ted Financial Statements, the amendments in questio n had not yet been endorsed by the European Union. c) Natural factor-dependent electricity contracts: Amendments to IFRS 9 and IFRS 7 The amendments are intended to help companies bette r recognise the financial effects of contracts for electricity that are dependent on nature. These contracts often take the form of power purchase agreements (PPAs). The
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 1. BACKGROUND INFORMATION 11 current guidance may not fully capture the impact o f these contracts on the Company's performance. To enable entities to better reflect these contracts in their financial statements, the IASB has amended IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures". The amendments comprise: a) clarification of the application of the ‘own use ’ criterion; b) allowing hedge accounting where these contracts are used as hedging instruments; c) adding new disclosures to enable stakeholders to understand the impact of these contracts on financ ial performance and cash flows. At the date of drawing up these Condensed Consolida ted Financial Statements, the amendments in questio n had not yet been endorsed by the European Union. d) IFRS 18 "Presentation and disclosures in financi al statements" In April 2024, the International Accounting Standar ds Board (IASB) published the new standard IFRS 18 'Presentation and Disclosures in Financial Statemen ts". The new standard is intended to replace IAS 1 - Presentation of Financial Statements and will be ef fective from 1 January 2027. The changes to the sup erseded standard mainly relate to three issues: the stateme nt of profit or loss, required disclosures about pe rformance measures and issues related to the aggregation and disaggregation of information contained in financial statements. The published standard shall apply to financial statements for periods beginning on or after 1 January 2027. At the date of drawing up these Condensed Consolida ted Financial Statements, the amendments in questio n had not yet been endorsed by the European Union. e) IFRS 19 "Subsidiaries without public accountabil ity: disclosures”. In May 2024, the Board issued a new accounting stan dard, IFRS 19, which can be adopted by certain subs idiaries applying IFRS accounting standards to improve the e ffectiveness of disclosures in their financial stat ements. The new standard introduces simplified and limited disc losure requirements. Consequently, the qualifying s ubsidiary applies the requirements of other IFRS accounting s tandards, excluding the disclosure requirements, an d instead applies the limited disclosure requirements of IFRS 19. Eligible subsidiaries are entities that are not sub ject to "public accountability" as defined in the n ew standard. In addition, IFRS 19 requires the ultimate or intermediate parent of the entity to draw up publicly available consolidated financial statements in compliance with IFRS Accounting Standards. Eligible entities may choose to apply the guidance of the new IFRS 19 standard for financial statements drawn up for periods beginning on or after 1 January 2027. At the date of drawing up these Condensed Consolida ted Financial Statements, the amendments in questio n had not yet been endorsed by the European Union. f) IFRS 14 "Regulatory Deferral Accounts" This standard allows entities that drawn up financi al statements for the first time (on or after 1 Jan uary 2016) pursuant to IFRS to recognize amounts resulting fro m operations with regulated prices, in compliance w ith the previously applied accounting principles. To enhance comparability with entities that already apply IFRS and do not post such amounts, under published IFRS 14, amounts resulting from operations with regulated prices sh ould be presented separately in both the statement of financial position, in the profit and loss account and t he statement of other comprehensive income. IFRS 14 will not be endorsed by virtue of the European Union's decision. g) Amendments to IFRS 10 and IAS 28 regarding the s ale or contribution of assets between the investor and its associates or joint ventures The amendments solve the problem of the current inc onsistency between IFRS 10 and IAS 28. Accounting recognition depends on whether non-monetary assets sold or contributed to an associate or joint ventur e are businesses or not.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 1. BACKGROUND INFORMATION 12 Where a non-monetary asset is a 'business', the inv estor will show a full gain or loss from the transa ction. If the assets do not meet the business definition criteria, the investor recognises a gain or loss excluding the portion that represents the interest of other investors. The amendments were published on 11 September 2014. As of the date of drawing up these separate financial statements, the endorsement of this amendment is deferred by the European Union.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 2. BUILDING CONTRACTS 13 2. BUILDING CONTRACTS The Group enters into fixed-price contracts for the execution of building contracts, predominantly in the domains of residential construction (including entire housing estates), hotels, SPA facilities, shopping malls an d distribution hubs, wind and photovoltaic farms, power stations, manufa cturing facilities, roads and motorways as well as structures made using modular timber technology. The amount of revenue recognised and the transactio n price are both adjusted by the variable pay compo nent. The Group recognises a portion or total amount of varia ble pay in the transaction price, only to the exten t that it is highly probable that there will be no significant reversal of the cumulative amount of revenue recognised whe n the uncertainty related to volatility has been resolved. The Group only recognises income from claims when it has received expert advice from third parties confirming that it is appropriate to recognise an additional amount of compensation based on the terms of the contract. To estimate variable pay, the Group uses the expected value method to estimate variable pay. Due to the specific nature of the Group's building contracts and services, the Group identifies only o ne performance obligation for all building contracts, to which the entire value of the compensation is allocated. Income and expenses generated by the building contr acts underway are recognized by the Company in pace with the progress of works being made. Some Group member companies measure contract performance progress rate using the performance-based method, i.e. it determines the va lue of revenues and expenses under the performance of building contracts in the period from the Contract Date to t he balancing date proportionally to the progress ra te of a certain contract performance by way of evaluation of the ac hieved results and milestones. Some of the companie s apply the expenditure-based method i.e. they determine the value of revenue on execution of building contracts in the period from the contract date to the balance sheet date proport ionally to the progress rate of execution of a cert ain contract by calculating the progress rate of works based on the ratio of costs recognized for the contract to the total cost budget prepared for the contract. From the figures thus obtained, the Group deducts the income and expenses that affected the financial profit/loss in previous years, resulting in the current period's income and expenses under building contracts. A change of the estimated progress rate of contract execution is treated as a change in estimate and affects the amount of revenues recognized in the period in which the chan ge in estimate was made. If the progress rate of no n-completed service (including construction) or the expected total cost of its completion cannot be reliably determined as at the balance sheet date, revenue is determined at the amount of costs incurred in the reporting period, but not higher th an the costs expected to be covered in the future by the employer. On the other site the results of pricing (i.e., the determination of revenues and expenses using the progress rate method) are recorded as "Pricing of building contracts - as sets (or liabilities)." The balances of assets unde r building contracts resulting from the excess of revenue recognized usi ng the performance-based method over the invoiced r evenues are subject to an impairment charge calculated similarly to the non-past due trade receivables. All building contract assets at the Level 2 of the impairment model and a simplified matrix approach (similar to trade receivables) are used to calculate the impairment loss on these assets. Due to the man ner in which balances on construction contract asse ts are recognized, they are not subject to aging and are t reated entirely as current, not past due. The works performed under building contracts are invoiced in adherence to the schedule set forth in the contract. The Group reco gnizes invoiced revenues in the line "Trade and other receivables" (Note 5.1) The Contractors under building contracts entered into with the Group retain a part of the payments as a perfor mance bond for the contracts. These figures are rec ognized as "Building contract receivables - bid bonds" and are refundable most often after project completion or after the end of the guarantee period. The Company engages subcontractors to carry out wor k related to the implementation of building contrac ts. The company acts in the capacity of a general contracto r. The invoiced costs related to subcontractors' em ployment are recognized as "Trade payables" (Note 5.2). The Company retains a portion of payments to the subcontractors in relation to performance bond, and recognizes it in the line "Building contract liabilities - bid bonds". The br eakdown of revenues into revenues recognized in time and items recognized at point of time is presented in Note 4.2. In connection with the execution of building contra cts and different timing of income and expenses rec ognition for accounting and tax purposes, the deferred income ta x assets and liabilities are recognized in the stat ement of financial position.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 2. BUILDING CONTRACTS 14 The Group sets up provisions for contracts with neg ative margins when it has found out grounds to clai m that a given building contract in progress will end with a loss. Provisions are charged into the costs of a given period at the full value of the expected loss on a given contract and are disclosed in the balance sheet under "Provisions". The Group provides only basic guarantees to its cus tomers, which do not represent a separate duty to p erform obligation. The warranty period varies depending on the contract under implementation and the components covered. For certain building contracts executed under joint contractual arrangements in which the Group is the consortium or assignment leader, the Group has assessed that it a cts as an intermediary with respect to the work per formed by the other partner and which the Group as leader invoices the Employer. The Group defines its role as that of an intermediary under a certain order where it identifies specific goods and services to be delivered and the Group ha s no control over them before they have been transferred to the customer. When the Group acts as an intermediary, it recognizes revenue upon the fulfilment of its obligation in the contra ctual amount of the fee or commission to which it w ill be entitled, in exchange for being commissioned by another party to provide specific services or goods. Due to the nat ure of the concluded consortia and orders, in which the Group acts as a leader, there are no fees and commissions as described above, hence no revenues are generated in the Group from commissions for invoicing to a customer work performed by another consortium member. The Group only recognise s as revenue the amounts of remuneration due for th e performance of its scope of work to the customer in accordance with the policy described above. Payment terms for building contracts provided by th e Group, range from 30 to 180 days from the invoice date and for other sales transactions are typically 30 days from the invoice date. Accordingly, the signed contract s do not contain a significant financing component except for the amounts invoiced for building contracts, which are repaid at a later date as they represent deposits retained by the customer. The amounts retained under individual invoices represent a maximum of 10% of the remuneration for the contract executi on and are subject to release for a period of up to 5 years once the contract has been completed. Revenues under the bui lding contracts for the portion that is retained as a bid bond is recognized at a discounted amount. The application of the performance-based or expenditure-based method to recognize revenues and expenses under the building contracts requires an estimated work progress rate under a certain contract, i.e., the measurement of completed work at the balance sheet date (performance-based m ethod) or an estimate of the total cost budget unde r a certain contract (expenditure-based method) Performance-based method: The physical quantity survey, used to determine the progress in contract performance, is taken by the construction site personnel. The quantity survey is carried out separ ately for each scope of works, i.e. components or p hases of the contract underway, according to the units of measure assigned to them (mainly square meters, kg and pcs.). The Company has adequate control processes in place to ensure that the calculation of actual project outcome is based on current and reliable estimates of the quantity survey, subject to verification and approval by designated persons. The quantity survey made by construction site personnel is subject to verification by the branch manager responsible for the construction site, and then additionally by the Group's internal audit department. Expenditure-based method: Cost budgets for certain contracts are prepared by the Group Management in the bidding phase and updated during the financial year or when the grounds for revision of the cost or income budget have been identified. If between official budget revisions there are events that have materia l impact on contract performance, the value of tota l revenues or contract costs is updated on an on-going basis, i.e . changes in the scope of the contract are reflecte d in the Group's internal system immediately after they are negotiated by the Group with the customer. The Group keeps track of projects being implemented - building contracts in the internal system used f or project management. Information concerning certain contract, its progress rate, is entered into the system by the Contract/Site Manager and then approved by the Branch Manager res ponsible for the construction site. The budgets of individual contracts are formally updated (revised) during the year based on current information and then they are approved by the Management Board. If between official budget revisi ons there are events that have material impact on c ontract performance, the value of total revenues or contract costs is updated on an on-going basis, i.e. changes in the scope of the contract are reflected in the Group's internal system immediately after they are negotiated by the Group with the customer. 2.1. INCOME AND EXPENSES UNDER BUILDING CONTRACTS The income and expenses figures under building contracts for the accounting period and on YTD basis are presented in the table below:
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 2. BUILDING CONTRACTS 15 For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 Figures recognised in the period Income under building contracts 588,720 527,919 Costs under building contracts, 554,096 494,307 Net income before recognition and settlement of provisions for the contracts generating net liabilities 34,624 33,612 Setting up provisions for the contracts generating net liabilities 478 2,072 Gross profit/loss 34,146 31,540 Gross profit margin excluding provisions for the contracts generating liabilities 6% 6% including provisions for the contracts generating liabilities 6% 6% Gross profit margin is defined as gross profit on sales divided by sales revenues. 2.2. DETERMINATION OF OUTSTANDING AMOUNT RELATED TO NON-COMPLETED BUILDING CONTRACTS 31 Dec. 2024 Revenues generated under non-completed building contracts YTD 4,598,827 4,637,706 Invoiced receivables from customers, YTD (excl. advances) 4,377,195 4,501,492 Balance of payments under non-completed building contracts 221,632 136,214 of which: (1) Assets for completed, non-invoiced construction works, gross 371,462 282,401 Asset impairment write-off under building contracts (4,025) (12,054) (1a) Assets for completed, non-invoiced construction works, net 367,437 270,347 (2) Payables for non-completed invoiced construction works - liabilities under building contracts 145,805 134,133 Costs related to building contracts, YTD 2,093,238 2,056,358 Losses posted on YTD basis - 100 Subcontractor expense and own expenses on a YTD basis. 2,013,189 1,987,212 Balance of payments under building contracts (80,049) (69,146) of which: (3) Assets for non-completed, invoiced construction works of the subcontractors 71,017 81,189 (4) Liabilities for due and payable non-completed, invoiced construction works of the subcontractors 138,397 150,335 Balance of payments under building contracts 141,583 67,068 of which: Pricing of building contracts - assets - TOTAL 438,454 351,536 Pricing of building contracts - balance settlement (2)+(4) 284,202 284,468 Building contract liabilities - advanced paid 164,779 147,473 Pricing of building contracts - liabilities - TOTAL 448,981 431,941 At all dates that are initial dates of the periods indicated in the table above, the total opening balances were recognized as revenues in the period. Changes in the value of assets and liabilities from the pricing of contracts result from the specific nature of settlement of building contracts and invoicing schedules for individual contracts.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 3. CAPITAL AND DEBT MANAGEMENT 16 3. CAPITAL AND DEBT MANAGEMENT 3.1. CAPITAL MANAGEMENT Share capital comprises common stock and is carried at par value (in adherence to the Articles of Asso ciation of the Parent Company and an entry made into the National Court Register). Share premium is the amount equal to the surplus of price for acquisition of shares in Parent Company above their par value. It is recognised in the line "Share premium reserve capital". Other supplementary capitals are set up mainly from retained earnings including amounts obligatorily appropriated to the reserve capital in accordance with the requirements of the Commercial Companies Code. Reserve capitals are set up from retained earnings for the purposes indicated in the Articles of Association. Equity allocated to the non-controlling interests r epresents a part of equities of subsidiaries covere d with full consolidation that belongs to other stakeholders than the entities that are Group members. The Company's supplementary capital is set up in accordance with the provisions of the Polish Commerci al Companies Code and the decisions of the shareholders. Pursuan t to the Commercial Companies Code, a supplementary capital should be set up to cover losses, that should accou nt for at least 8% of the profit for a certain acco unting year, until the supplementary capital reaches at least one third of the share capital. the supplementary capital set up in this manner is not subject to distribution. The General Meeting of Shareholders decides on the use of the supplementa ry and reserve capital, however, a part of the supplementary capit al may be used only to cover the loss reported in t he financial statements and is not subject to distribution into other purposes. The Group manages its capital structure and as a re sult of changes in economic conditions, it modifie s its capital structure. In order to maintain or adjust the capital structure, the Group may manage appro priately the dividend payment to shareholders or issue to new shares. The main objective of the Group’s capital management is to maintain a good credit rating and safe equity ratios in order to support the Group's operations and enhance shareholders' value. Share capital As of 31 March 2025, the share capital consisted of 11 929 836 shares with a total value of PLN 1,192, 983.60, and the structure of shareholders holding over 5% of the sh are capital and members of the Management Board and entities controlled by them was as follows: Shareholder No. of shares % shareholding in share capital Wolff & Muller Baubeteiligungen GmbH & Co.KG, including Wolff & Muller Holding GmbH & Co. KG 3,854,837 32.31% Dariusz Grzeszczak directly and indirectly (Dariusz Grzeszczak, DGI Family Foundation) including: 2,553,460 21.40% Dariusz Grzeszczak 1,231,907 10.33% DGI Family Foundation 1,321,553 11.08% ING OFE 1,200,000 10.06% Allianz OFE, Allianz DFE, Second Allianz OFE 764,935 6.41% PKO OFE 715,279 6.00% Other shareholders 2,841,325 23.82% Total 11,929,836 100% The Company's Articles of Association do not grant the shareholders, referred to hereinabove, any personal rights vis-à- vis Erbud S.A., and in particular do not grant the right to appoint members neither Company's Manageme nt nor Supervisory Boards.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 3. CAPITAL AND DEBT MANAGEMENT 17 The number of shares making up the approved capital equals to the number of shares issued. The par val ue per share for all share series is PLN 0.10. No shares were re served for the purposes of the issue related to the exercise of put options. All issued shares are ordinary non-preference shares. There are no limitations on rights to s hares or limitations on share transferability. As of 31 March 2025, and as of the date of publicat ion of this Financial Statement, therefore the shar e capital totalling PLN 1,192,983.60 divides into 11,929,836 A-series ordinary bearer shares with a par value of PLN 0.10 each. Basic earnings per share are calculated by dividing net profit /(loss) for the period, allocated to or dinary shareholders of the Company, by the weighted average number of the issued ordinary shares over the accounting period. Own shares bought back by the Company for redemption are exclu ded from the calculation of the weighted average nu mber of shares for the periods presented. For the purposes of calculating diluted earnings pe r share, net profit /(loss) for the accounting peri od attributable to ordinary shareholders and the weighted average numb er of ordinary shares for the accounting period are adjusted for the effect of all diluting potential ordinary shares. Diluted earnings per share is equal to basic ear nings per share as the Group does not hold any dilutive instruments. Stock split effected both during and after the acco unting period adjust the weighted average number of ordinary shares for purposes of computing basic and diluted earnings per share for all periods presented. For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 Net profit/loss attributable to the shareholders of the Parent Company (13,152) 2,758 Average weighted number of ordinary shares (in pcs.) 11,929,836 11,929,836 Basic and diluted earnings per share (in PLN) (1.10) 0.23 3.2. CREDIT AND LOAN LIABILITIES Credit and loan liabilities are initially recognized at fair value less transaction costs. At each bal ancing date, these items are priced at amortized cost using effective interest rate. 31 Mar. 2025 31 Dec. 2024 Long-term Bank loans 100,283 102,373 Loans 1,326 - 101,609 102,373 Short-term Overdraft facilities 45,548 12,748 Bank loans 23,396 18,310 Loans 1,441 1,170 70,385 32,228 Total credit and loan liabilities 171,994 134,601 Long-and short-term loans bear interest at WIBOR 3M + 1.35%-3.5%, 3M EURIBOR +1.35%- 2.2%, 6M WIBOR +3 % and fixed rate of 10% per annum.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 3. CAPITAL AND DEBT MANAGEMENT 18 As of the specified balance sheet dates, the fair v alue of loans and advances was not materially diffe rent from the amortized cost measurement. The fair value of credi ts and loans is estimated using DCF models based on cash flows reflecting the repayment schedule of loans granted. The discount rate was assumed to be WIBOR 1M per d ay plus a fixed percentage expressing the risk premium. Long-term credits and loans measured at amortized cost are classified at Level 2 of the fair value hierarchy. Covenants During the year, as of 31 March 2025 and by the approval date of the financial statements, all covenants have been met, similarly to the previous year. 3.3. DEBT RELATED TO ISSUED BONDS Liabilities related to issued bonds are initially recognized at fair value less transaction costs. At each balancing date, the issued bond liabilities are priced at amortized cost using effective interest rate. As of balance sheet date, the Group had the follow ing outstanding debt in relation to issued bonds po sted into short- and long-term liabilities: Issue date Type of issued bonds Currency Interest rate Maturity date Purpose of financing Debt related to issued bonds 31 Mar. 2025 31 Dec. 2024 23 September 2021 D-series bearer shares, dematerialized, unsecured functional WIBOR 6M + 2.6% 23 Sept. 2025 financing of an increased working capital requirement - 76,720 27 Feb. 2025 E-series bearer shares, dematerialized, unsecured functional WIBOR 6M + 3.0% 27 Feb. 2029 refinancing of the debt arising from the Issuer's D- series bonds 75,598 - Total bond liability as of 31 March 2025, of which: 75,598 76,720 long-term 75,000 short-term 598 76,720 Covenants "Consolidated Net Financial Debt Ratio" means the quotient of Consolidated Net Financial Debt and Consolidated Equity in value terms. As of 31 Mar. 2025 31 Dec. 2024 0.27 (0.03) Consolidated long-term and short-term debt 351,954 313,141 Cash assets 206,472 329,774 Adjusted equity by goodwill and intangible assets 542,057 571,718 The expected value of the ratio should not be higher than 1.1.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 3. CAPITAL AND DEBT MANAGEMENT 19 The item Consolidated long-term and short-term debt represents the sum of debt due to loans, borrowing s, leases and bonds issued. The item "Cash" represents the sum of cash and cash equivalents, cash held in a VAT account and restricted cash. The item "Equity adjusted with goodwill and intangible assets" represents the value of equity less goodwill and intangible assets. 3.4. LEASE LIABILITIES 31 Mar. 2025 31 Dec. 2024 Period Nominal value of minimum payments Nominal value of minimum payments Below 1 year Short-term 33,490 31,012 Above 1 year Long-term 94,210 93,911 Nominal value of minimum payments 127,700 124,923 Future lease costs 23,338 23,103 Present value of minimum payments 104,362 101,820 Below 1 year Short-term 28,391 25,917 Above 1 year Long-term 75,971 75,903 Major items of fixed assets under lease include equipment and machinery as well as means of transport.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS 20 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOS S 4.1. ALTERNATIVE PERFORMANCE MEASURES The Management Board analyses segment performance u sing Key Performance Indicators such as EBIT, adjus ted EBIT, EBIT margin, adjusted EBIT margin as well as EBITDA and adjusted EBITDA. The Management Board of the Group considers the aforementioned measures as impo rtant additional performance measures and therefore presents them in the report next to the measures defined by IFRS. It should be borne in mind that EBIT, as well as EBIT and EBITDA margins these are not KPIs defined in IFRS a nd they do not represent standardized measures, the refore their calculation methods may differ from one entity to another in the market. Accordingly, these KPIs should not be analysed in isolation or as substitutes for measures defined by IFRS. EBITDA and EBIT are measures showing the results ac hieved by the Group after eliminating the impact of income tax, financing costs and income and in the case of EBITDA, depreciation and amortization. EBITDA is defined as profit after tax (net income), plus income tax expense, finance costs and depreci ation and amortization, less financial income. The adjusted EBITDA is defined as EBITDA after taking out one-off events. The Group defines EBIT as profit after tax (net income), plus income tax burdens, finance costs less finance income. The adjusted EBIT is defined as EBIT after taking out one-off events. The EBIT margin is a measure that shows the Company 's profitability ignoring the impact of income taxe s and finance costs and revenues. The Group defines EBIT margin as EBIT divided by sales revenues of goods and services. 31 Mar. 2025 31 Mar. 2024 Net profit /(loss) for the accounting period (15,593) 9,650 Corporate income tax (700) 2,044 Gross profit (16,293) 11,694 Share in net profits/losses of equity-accounted subsidiaries (551) (259) Financial expenses 9,945 8,900 Financial income 3,326 5,480 EBIT (9,123) 15,373 Amortization and depreciation 12,414 9,560 EBITDA 3,291 24,933 Revenues from sales of products and services 733,118 644,267 EBIT margin (1%) 2% EBITDA/Revenues from sales of products and services 0.45% 3.87%
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS 21 4.2. ACCOUNTING SEGMENTS The presentation of accounting segments from the onset of 2025 has changed. Based on the management accounting presented to the main operational decision-maker (i.e. the Management Board of the Parent Company), the Group identified six basic accounting segments: building construction segment, industrial construction segment at home industrial construction segment in foreign countri es renewable energy sources + infrastructure segment modular construction segment, other segments. Comparative figures have also been restated for the sake of comparability. The operations were broken down into individual segments by classifying the significance of operations into the segment. Such a breakdown corresponds to the distribution of the main risks and returns on expenses incurred. The financial data prepared for the purposes of man agement reporting, which is the basis for data on r eportable segments, follows the same accounting principles as those applied to the preparation of the Group's Separate Financial Statements. Key segment information in the following accounting periods: January 2025 - March 2025 and January 2024 - March 2024. For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 Domestic market (Poland) Foreign markets Total Domestic market (Poland) Foreign markets Total Sales to third party customers, of which: 578,284 154,834 733,118 524,489 119,778 644,267 Accrued and deferred income 541,813 46,907 588,720 488,014 39,905 527,919 Income recognized at a certain point in time 36,471 107,927 144,398 36,475 79,873 116,348 Fixed assets other than financial instruments and deferred tax assets 580,622 55,831 636,453 422,452 84,325 506,777
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS 22 Data concerning revenues and performance as well as assets and liabilities in individual accounting segments are presented in the table below: For a 3-month period, ended on 31 Mar. 2025 Building construction segment, Industrial construction segment at home Industrial construction segment in foreign countries RES + infrastructure segment Modular construction segment, Other segments Total continued activities Sales to third party customers 394,358 46,105 101,670 152,128 37,980 877 733,118 Total sales revenues 394,358 46,105 101,670 152,128 37,980 877 733,118 Segments' performance and reconciliation with Group's gross profit Cost of goods sold (COGS) 379,764 43,088 91,997 139,987 39,627 1,798 696,261 Sales margin 14,594 3,017 9,673 12,141 (1,647) (921) 36,857 Sales margin % 4% 7% 10% 8% (4%) (105%) 5% Other operating profit/loss (11,249) (3,539) (5,328) (16,043) (10,249) 428 (45,980) Segment performance – EBIT 3,345 (522) 4,345 (3,902) (11,896) (493) (9,123) EBIT margin 1% (1%) 4% (3%) (31%) (56%) (1%) Share in net profits/losses of equity-accounted entities - - - (551) - - (551) Profit (loss) on financial activities (financial income less financial expenses) (6,619) Gross profit/loss (16,293) Corporate income tax (700) Net profit/loss (15,593) Amortization and depreciation 2,492 1,838 1,648 3,209 2,131 1,096 12,414 Segment performance – EBITDA 5,837 1,316 5,993 (693) (9,765) 603 3,291
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS 23 For a 3-month period, ended on 31 Mar. 2024 Building construction segment, Industrial construction segment at home Industrial construction segment in foreign countries RES + infrastructure segment Modular construction segment, Other segments Total continued activities Total income Sales to third party customers 342,180 35,029 79,478 168,024 19,542 14 644,267 Total sales revenues 342,180 35,029 79,478 168,024 19,542 14 644,267 Segments' performance and reconciliation with Group's gross profit Cost of goods sold (COGS) 318,492 34,294 77,908 152,615 18,286 - 601,595 Sales margin 23,688 735 1,570 15,409 1,256 14 42,672 Sales margin % 7% 2% 2% 9% 7% 100% 7% Other operating profit/loss (19,889) (3,410) (670) 6,694 (8,875) (1,149) (27,299) One-off expenses - - - - - Segment performance – EBIT 3,799 (2,675) 900 22,103 (7,619) (1,135) 15,373 EBIT margin 0% (8%) 1% 13% (39%) (8107%) 2% Share in net profits/losses of equity-accounted entities - (259) (259) Profit (loss) on financial activities (financial income less financial expenses) (3,420) Gross profit/loss 11,694 Corporate income tax 2,044 Net profit/loss 9,650 Amortization and depreciation 1,982 1,742 1,221 2,255 1,268 1,092 9,560 Segment performance – EBITDA 5,781 (933) 2,121 24,358 (6,351) (43) 24,933
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS 24 4.3. COST OF GOODS SOLD (COGS) For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 Third party services 442,742 376,672 including third party services from subcontractors 295,722 310,376 Material and energy consumption 183,749 82,709 Employee benefit expenses 128,848 123,254 Amortization and depreciation 12,414 9,560 Taxes and charges 5,212 5,089 Other cost categories 11,178 18,613 Value of goods and materials sold 150 323 Total costs by category 784,293 616,220 Change in the balance of products, work in progress and accrued expenses under building contracts (36,110) 34,387 Cost of sale (negative value) (5,935) (4,835) General management and administration costs (negative value) (45,987) (44,177) Manufacturing costs of products sold 696,261 601,595 4.4. TAXATION The mandatory burdening of the financial result consists of two elements: current income tax and deferred tax. Due to temporary differences between the value of a ssets and liabilities shown in the accounting books and their tax value and the tax loss deductible in the future, the Group companies, using the balance sheet method, sets up: deferred income tax liabilities concerning positive temporary differences and determines deferred tax assets in respect of foreign exchange losses and tax losses, which is deductible following the prudential principle. Deferred income tax assets and liabilities are not recognized in the case of temporary differences ari sing upon initial recognition of an asset or liability in a transaction that is not a business combination and in case of transactions that have no impact on either the accounting or tax profit or loss.. Deferred tax assets and liabilities are offset if there is a legal right to set-off tax liabilities and current tax liabilities, and if the deferred tax concerns a tax imposed by the same tax authority on the same taxpayer. It implies that deferred income tax assets and liabilities are compensated in Group financial statements. The Group only recognises a tax asset when projections of future financial performance indicate that a taxable profit will be gained to allow the asset to be realised in a specified future. The balance sheet value of an deferred tax asset is verified at each balancing date and is reduced accordingly by as much as it probability dropped to reach taxable income sufficient for partial or total realisation of the deferred tax asset. The Group's projected future financial performance and its impact on the recoverability of deferred tax assets is an element of judgement in determining the recoverability of deferred tax assets.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS 25 The determination of the effective income tax rate is presented in the table below: For a 3-month period, ended on 31 Mar. 2025 For a 3-month period, ended on 31 Mar. 2024 Gross profit before taxation (16,293) 11,694 Tax according to the statutory tax rate applicable in Poland - 19% (3,096) 2,222 Additional tax burden being a result of a rate exceeding 19% in Germany 1,202 1,861 Surplus of non-deductible expenses over non-taxable income 1,194 (2,039) Tax recognized in the financial net profit/loss (700) 2,044 Current tax 2,245 5,956 Deferred tax (2,945) (3,912) Effective tax rate 4.30% 17.48% 4.5. FINANCIAL RISK MANAGEMENT PRINCIPLES While running its operations, the Group is exposed to the following significant types of financial ris k: market risk (including currency risk, interest rate risk), cred it risk and liquidity risk. The ERBUD S.A.'s Manage ment Board is responsible for determining the rules for the management of such risks and for verifying them. 4.5.1. MARKET RISK – CURRENCY RISK While performing its core operations, the Group does not enter into building contracts that are denominated in EUR. With regard to receivables and liabilities arising from material purchase contracts concluded under which payments will be made in EUR and with respect to EUR-denominated loans granted, the Group has determined that risk is immaterial. 4.5.2. MARKET RISK – INTEREST RATE RISK The interest rate risk occurs mainly in connection with debt financing, i.e. bank credits and loans (N ote 3.2), and lease products (Note 3.4), used by the Group. In addition, the Group invests idle cash partly into variable interest rate deposits and extends mainly variable interest rate loans. Assets and liabilities bearing interest at variable interest rates expose the Group to the risk of cas h flow volatility. Meanwhile assets and liabilities bearing fixed rate exposes the Group to the risk of fair value volatility, however, owing to the fact that the Group does not measure these items at fair value, this impact is not reflected in the financial statements. The Group monitors the exposure to interest rate risk and prepares interest rate forecasts. Trade receivables and building contract assets To protect against credit risk resulting from recei vables under building contracts (i.e. trade receiva bles, receivables under building contracts - bid bonds and valuation of building contracts), the Group has in place a po licy of assessing and verifying credit risk related to all contracts, both in the pre-tendering phase and during contrac t execution. Before signing a contract, each counterparty is evaluated in terms of its ability to meet its financial obligations. In the event of a negative assessment of the counterparty's payment capability, entering into the contract depends on th e establishment of adequate financial or asset collaterals. Moreove r, contracts with investors contain clauses providi ng for the right to suspend the execution of works, if there is a delay in the transfer of payments for services rendered. If possible contractual clauses are also developed to condition payments to subcontractors on the receipt of funds from the investor.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT/LOSS 26 The Group has no credit risk concentration in relation to trade receivables and receivables under buil ding contracts - in relation to bid bonds and valuation of building contracts. Changes in the write-down of receivables are presented in the Note 5.1. 4.5.3. LIQUIDITY RISK In order to reduce the risk of liquidity loss, the Group maintains an appropriate amount of cash and t ransferable securities as well as enters into credit line agreements, which serve as additional liquidity security. To finance investment purchases, the Group uses own funds or long-term fi nancial lease contracts, ensuring adequate sustaina bility of the financing structure for this type of assets. The Group pursues a policy limiting credit exposure s to individual financial institutions and issuers of debt securities, which are acquired as part of periodic investments of surplus cash. Liquidity management is supported by the existing liquidity forecast reporting system by the Group. 4.5.4. CLIMATE RISK The Erbud S.A. Group monitors the impact of climate risks on the Group's operations and, at present, d oes not identify any significant impact of climate factors on its op erations. The Erbud Group has consistently pursued its ESG strategy, adhering to the required environmental aspects, inv esting in the development of RES projects, as well as in timber construction sector.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 5. OTHER NOTES 27 5. OTHER NOTES 5.1. TRADE RECEIVABLES AND OTHER RECEIVABLES In the trade receivables as well as other receivabl es category the Group recognised mainly trade recei vables from non- related entities (mainly due to issued invoices in relation to the building contracts executed by the Company) and budget receivables, including corporate income tax receivables and tax on goods and services receivables. Trade receivables , with maturity typically between 30 and 180 days, are carried at their nominal value, which is the amount originally invoiced. Trade receivables are held for collection and meet the SPPI test, therefore, as of the balance sheet date, these items are measured at amortized cost, includ ing a contingent impairment loss calculated using t he expected loss model. Receivables from the State budget are recognised at the amount due to the Group pursu ant to applicable laws and regulations. IFRS 9 requires the estimation of expected loss for trade receivables, regardless of whether there was any indication of impairment or not. For trade receivables, the Group uses the simplified approach and measures impairme nt losses at the amount of credit losses expected over the life of the receivable from moment of initial recognition. For trade receivables that have been assessed as not impaired based on the portfolio analysis performed, the estimation of impairment losses, if any, is based on the use of a n write-off matrix where write-offs are calculated for trade receivables classified into different aging categories (past du e periods) using a default rate. The default rate i s determined based on historical data (calculated on the basis of the last 5 years) adjusted for the impact of future factors. In the same manner the Group calculates the allowance for expected credit losses for deposit receivabl es and construction contract assets in an analogous manner; balances th at are not past due are included in the "not past d ue" category in the write-off matrix, and the write-off is calculated taking into account the default rate for not past due receivables. For trade receivables with indications of impairmen t (e.g. disputed receivables), specific additional write-offs were set up depending on the assessment of their recoverability. If the value of money in time is material (applies to the bid bonds receivables) the value of receivables is determined through discounting projected future cash flows to the pres ent value, using a gross discount rate reflecting c urrent market-based appraisals of time value of money. If the discounti ng method has been applied, the increase of receiva bles caused by time elapse is posted as financial gains. 31 Mar. 2025 31 Dec. 2024 Gross value Write-down Net value Gross value Write- down Net value Trade receivables 538,281 51,472 486,809 510,560 52,122 458,438 Corporate income tax receivables 5,393 - 5,393 3,958 - 3,958 VAT tax receivables 27,646 - 27,646 18,970 - 18,970 Other budget receivables 1,700 - 1,700 1,616 - 1,616 Other receivables 21,520 82 21,438 25,474 82 25,392 Total 594,540 51,554 542,986 560,578 52,204 508,374 Other receivables mainly include receivables from the sales of fixed assets, paid deposits and bid bonds.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 5. OTHER NOTES 28 Modifications of the write-off for trade receivables are presented in the table below: For a 3-month period, ended on 31 Mar. 2025 For a 12-month period, ended on 31 Dec. 2024 Opening balance of write-downs 52,204 60,354 Setting up/(reversal) of individual write-offs - 5,396 Setting up of write-offs according to write-off matrix - 3,994 Use of individual write-offs - (17,909) Reversal of individual write-offs (433) - Other - 724 FX gains and losses from translation (217) (355) Closing write-offs, of which: 51,554 52,204 Matrix-based calculated write-off 22,415 22,415 Individual write-off 29,139 29,789 For the remaining disputable receivables write-offs were set up based on estimated Discounted Cash Flows. The Group is exposed to credit risk and foreign cur rency risk arising from trade receivables. However, there is no concentration of credit risk related to trade receivables since the Group has a large number of domestic customers. All receivables, except for those indivi dually written off, are rated by the Group as havin g the highest internal credit rating. For all receivables except those wri tten-off individually, the Group estimates a write off for expected credit losses in an amount equal to 12 months expected credit losses. 5.2. TRADE PAYABLES, OTHER LIABILITIES Trade payables and other liabilities include primar ily trade payables to non-related parties, advances received, payroll liabilities and tax liabilities. Trade payables are initially carried at fair value (corresponding to the nominal value) and as of the balance sheet date they are priced at amortized cost. The received advance payments refer mainly to payments from contractors for the performance of building contracts and are recognized at the nominal value of the payment received. Wage and salary payables are recognized at the value due for the work perfo rmed, calculated in accordance with the concluded contracts. Tax liabilities (including tax on goods and services, corporate inc ome tax, personal income tax) are recognized at the amount requiring payment by the Group in compliance with the effective and applicable legislation. Short-term employee benefit liabilities This category comprises provisions for non-utilized holidays. The basis for calculation of provision f or non-utilized leave is the specification of non-utilized leave days at a certain balance-sheet date broken down by employees and their daily gross salary plus social contribution surcharges paid by the Employer.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 5. OTHER NOTES 29 31 Mar. 2025 31 Dec. 2024 Trade payables 299,558 312,199 Liabilities vis-a-vis budget in relation to: 10,129 26,014 VAT tax 4,646 10,568 corporate income tax 5,483 15,446 Other liabilities 87,474 83,758 wages and salaries 18,910 16,244 accruals 3,680 2,389 short-term employee benefit liabilities 34,810 33,318 other taxes 16,179 21,800 other 13,895 10,007 Total 397,161 421,971 5.3. EXPLANATORY NOTES TO THE CASH FLOW STATEMENT Reconciliation of the change in working capital balance for the period from 1 January 2025 to 31 March 2025 and for the period from 1 January 2024 to 31 March 2024. Change in balance of Cash Flow Statement in the period from January 2025 to March 2025 Change in balance of Cash Flow Statement in the period from January 2024 to March 2024 Change in provision balance 13,529 937 Change in inventory balance (8,293) 24,368 Change of receivables balance (27,691) 37,478 Change in balances of short-term liabilities, excluding credits and loans 2,971 (80,616) Change in balance of prepayments and accruals (10,685) (23,529) Change of the balance of assets and liabilities under building contracts (69,878) (287) Change of working capital balance (100,046) (41,649) 5.4. GROUP STRUCTURE Related entities and consolidation rules: The consolidated financial statements comprise data of the Parent Entity and its subsidiaries. Subsidiaries are consolidated using the full method from the date of control acquisition to the date o f control loss. The control is exercised when the Parent Company is exposed to variable financial results due to its involvement in the entity in which it made investment, or when it has the right to changing financial results and is capable of inf luencing the level of these financial results by exercising its control o ver the entity. The financial statements of subsidiaries are drawn up for the same accounting period as the financial statement of the Parent Company using consistent accounting principles. If control is lost over a subsidiary, the profit or loss on the transaction resulting in the control loss is recognized in profit or loss. Settlements, income, expenses and unrealized gains recognised in the assets, arising out of transactio ns between Group member companies are taken out. As of the date of control acquisition, the Group d etermines whether the controlled entity is a business as defined in IFRS 3 or a group of assets not representing a business. Settlement of acquisition of ventures is made using the acquisition method. Under this method, the ide ntifiable assets acquired and liabilities assumed are measured at th eir fair values at the date of acquisition. The pay ment made under
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 5. OTHER NOTES 30 business acquisition transaction is priced using fa ir value, calculated as collective sum of fair valu es as the date of acquisition of assets submitted by the Group, liabi lities taken by the Group against previous owners o f the acquired entity and equity instruments issued by the Group in excha nge for taking over control over acquired entity. A cquisition-related costs are recognized in profit or loss as incurred. The excess of the acquisition price, fair value of previously held interests and non-controlling interests over the fair value of the net assets acquired, subject to the exceptions referred to in IFRS 3, is goodwill. For asset acquisitions that are not business acquis itions, the purchase price is allocated to the indi vidual assets acquired based on their relative fair values. Transaction costs are included in the initial value of the acquired fixed assets. No goodwill is generated through an asset acquisition transaction. The investments in associates are accounted for in the consolidated financial statements based on the equity method. In compliance with the equity method, an investment in an associate is initially recognized in the consol idated statement of financial position at cost, and then adjusted to re flect the Group's contribution to the financial res ult and to other comprehensive income of the associate. An investmen t in an associate is accounted for using the equity method from the date on which the entity becomes an associate. When evaluating a need to recognise an impairment o f the Group's investment in an associated entity, the requirements of IAS 28 apply. If necessary, the entire carrying amount of the investment is tested for impairment in accordance with IAS 36, Impairment of Assets, as a single asset by comparin g its recoverable amount with its carrying amount. The impairment recognized represents a portion of the carried valu e of the investment. The reversal of this impairmen t is recognised in accordance with IAS 36 to the extent of any subsequent increase in the recoverable amount of the investment. Group Structure As of 31 March 2025, the Group comprises the Parent Company Erbud S.A. along with its subsidiaries, co nsolidated using the full method, and entities not controlled by Erbud S.A., but consolidated using the equity method. Parent Company's share in equity (equal to the voting rights held) # Name of entity Registered office Scope of activi ties 31 Mar. 2025 31 Dec. 2024 Shares held directly 1 ONDE S.A. Toruń Road engineering and renewable energy sources 60.67% 60.67% 2 Erbud International Sp. z o.o. Rzeszów Constructi on services 100.00% 100.00% 3 ERBUD Construction Sp. z o.o. Toruń Construction services 100.00% 100.00% 4 MOD21 GmbH Düsseldorf, Germany Construction services 100.00% 100.00% 5 Erbud Shared Services Sp. z o.o. Warsaw Support s ervices 100.00% 100.00% 6 Erbud Holding Deutschland GmbH Düsseldorf, Germany Management services 100.00% 100.00% 7 Hebud Sp. z o.o. in liquidation Minsk, Belorussia Construction services 100.00% 100.00% 8 JV WMER Matoc Poland Sp. z o.o Warsaw Constructio n services 100.00% 100.00% 9 JV PABC Sp. z o.o. Warsaw Construction services 100.00% 100.00% 10 MOD21 Sp. z o.o. Ostaszewo Modular timber construction 98.00% 98.00% 11 Erbud Industry Centrum Sp. z o.o. The City of Łó dź Maintenance services in the industrial segment 99.00% 99.00% 12 Tauron Serwis Sp. z o.o. Jaworzno Maintenance services in the industrial segment 4.13% 4.00% TOTAL
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 5. OTHER NOTES 31 Shares held indirectly by the Parent Company (corresponding to the voting rights held) # Name of entity Registered office Scope of activities 31 Mar. 2025 31 Dec. 2024 Shares held indirectly 1 IVT Beteiligungs GmbH Düsseldorf, Germany SPV 100.00% 100.00% 2 IVT Weiner + Reimann GmbH Oberhausen, Germany Maintenance services in the industrial segment 100.00% 100.00% 3 IVT Menzenbach GmbH Oberhausen, Germany Maintenance services in the industrial segment 100.00% 100.00% 4 WTL20 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 5 WTL40 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 6 WTL80 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 7 WTL100 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 8 WTL120 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 9 WTL130 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 10 WTL140 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 11 WTL150 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 12 WTL160 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 13 WTL170 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 14 IDE Projekt Sp. z o.o. Toruń Design services 100.00% 100.00% 15 Satchwell Polska Toruń Sp. z o.o. Toruń Maintenance services in the industrial segment 100.00% 100.00% 16 Solar Serby Sp. z o.o. Warsaw Renewable energy s ources 50.00% 50.00% 17 DEPVPL sp. z o.o. Power Plant Toruń Renewable en ergy sources 100.00% 100.00% 18 KWE Spółka z o.o. Warsaw Renewable energy source s 50.00% 50.00% 19 IKR GmbH Bitterfeld - Wolfen Maintenance services in the industrial segment 100.00% 100.00% 20 WTL40 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 21 WTL270 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 22 WTL270 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 23 Park Słoneczny Ciechanów Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 24 Park Lewałd Sp. z o.o. Toruń Renewable energy so urces 100.00% 100.00% 25 FW Gumienice Sp. z o.o. ( wind farm ) Toruń Renewable energy sources 100.00% 100.00% 26 DEVOZE Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 27 Solar Kazimierz Biskupi Sp. z o.o. Warsaw Renew able energy sources 50.00% 50.00% 28 PV KADŁUBIA 2 Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 29 PV SZCZEPANÓW Sp. z o.o. Toruń Renewable energy sources 100.00% 100.00% 30 ONDE GmbH Germany, Dusseldorf Development of contracting activities in the RES business segment 100.00% 100.00% 31 ONDE DEV 1 Sp. z o.o. Toruń Renewable energy sou rces 100.00% 100.00% 32 ONDE DEV 2 Sp. z o.o. Toruń Renewable energy sou rces 100.00% 100.00% 33 ONDE DEV 3 Sp. z o.o. Toruń Renewable energy sou rces 100.00% 100.00% 34 ONDE DEV 4 Sp. z o.o. Toruń Renewable energy sou rces 100.00% 100.00% 35 ONDE DEV 5 Sp. z o.o. Toruń Renewable energy sou rces 100.00% 100.00% 36 ONDE DEV 6 Sp. z o.o. Toruń Renewable energy sou rces 100.00% 100.00% 37 ONDE ENERGY Sp. z o.o. Toruń Renewable energy so urces 100.00% 100.00% 38 ONDE DEV 8 Sp. z o.o. Toruń Renewable energy sou rces 100.00% 100.00% 39 Żabów Photovoltaic Farm Sp. z o.o Toruń Renewabl e energy sources 100.00% 100.00% 40 CKTiS Sp. z o.o. Biała Maintenance services in the industrial segment 100.00% 100.00%
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 5. OTHER NOTES 32 5.5. POST-ACCOUNTING PERIOD EVENTS After the balance sheet date and up to the date of these condensed Consolidated Financial Statements, there were no material events, not recognised in the financial statements, affecting the Group's assets and financial position at the balance sheet date.
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Condensed Consolidated Financial Statement as of 31 March 2025 ('000 PLN, unless specified otherwise) 33 Signatures of all Management Board members: Dariusz Grzeszczak /President of the Management Board/ Jacek Leczkowski /Vice-President of the Management Board/ Agnieszka Głowacka /Vice-President of the Management Board/ Tomasz Wojak /A Management Board member/ Warsaw, 12 May 2025