Cabka shows resilience in 2024 despite challenging markets

PRESS RELEASE

Online investor presentation and Q&A at 10.30 CET on 18 March 2025 via:

OnlineSeminar | Cabka N.V. Full Year 2024 Preliminary results

Amsterdam, Netherlands - 18 March 2025 - Cabka N.V. (together with its subsidiaries "Cabka”, or the "Company”), a company specialized in transforming hard to recycle plastic waste into innovative Reusable Transport Packaging (RTP), listed at Euronext Amsterdam, announces its preliminary non-audited 2024 full year results.

Cabka shows resilience in 2024 despite challenging markets

Key financial developments 2024

• Sales of €181.9 million, 8% lower than prior year (2023: €196.9 million).
• Gross profit margin significantly improved with 3pp to 50.9% (2023: 48.3%)
• Operational EBITDA decreased to €20.5 million in 2024 (2023: €24.4 million), reflecting a margin deterioration of 1pp to 11.3% (2023: 12.4%).
• Net Income from operations declined to €-4.5 million (2023: €2.3 million), driven by lower sales.
• Net Working Capital at €26.5 million or 14.6% of sales (2023: €27.1 million, or 13.7% of sales), the movement was the result of a decrease in our trade receivables, partially offset by an increase in inventories and a decrease in trade payables.
• Net debt amounted to €72.0 million including lease obligations (2023: €56.8 million),
• Total CAPEX of €18.7 million (2023: €30.9 million); which includes investments in maintenance & replacement CAPEX amounting to €7.7 million, or 4% of sales.
• In August 2024, Cabka successfully negotiated with the bank to waive and adjust certain financial covenants.
• Dividend: In light of the challenging market conditions and financial headwinds, the company proposed not to pay a dividend for the financial year of 2024.

Cabka CEO Alexander Masharov, commented:

"2024 was a transformative year for Cabka, in which we made significant progress in our strategic efforts to rebuild and reinforce our foundation, with increased global economic uncertainty and shifting geopolitical landscapes. We enhanced our operational gross margin by refocusing on our in-house production capabilities, the introduction of new raw material processing technology in the US, increased automation and robotization at our plants, and a gradual shift towards higher value-add products.

In addition, our Portfolio Business made solid progress with our European and US operations showing close to double digit growth rates, after implementing intentional price reductions and strengthening our sales force. In other segments, ECO delivered robust growth, and European Customized Solutions business remained resilient. However, US Customized Solutions and Contract Manufacturing declined substantially due to weak end market demand.

We foresee market circumstances to remain challenging with our customers continuing to be cautious with their capex spending. Under these circumstances we expect sales and EBITDA in 2025 to be at least at the same level as 2024. Our strategy for 2025 focuses on cash generation, operational excellence and investments in next-generation solutions. We aim to build a stronger and more resilient Cabka.”

Business Segments and Geographical Markets

Portfolio

EU Portfolio sales grew by 8% year-over-year, driven by securing new contracts. Meanwhile, US portfolio sales grew by 10% due to the successful commercial strategy to regain market share, as we strengthened our sales force in the region.

Customized Solutions

EU Customized Solutions remained resilient to market conditions, primarily driven by co-development programs launched during the year with key customers, while US Customized Solutions faced significant challenges due to adverse market conditions, as key customers refrained from further capital expenditures, resulting in a significant decline of €13.4 million.

Contract Manufacturing

Weak demand in our customer end markets led to a sales decline of €11.4 million, which includes an impact of €1.1 million attributed by the exit of the PVC business (Non-RTP legacy products).

ECO Business

ECO delivered robust growth of sales growth of 4% year-over-year.

Dividend

Given the challenging market conditions and financial headwinds experienced throughout 2024, we have thoroughly reassessed our capital allocation strategy to ensure long-term business sustainability and growth. As a result, we have decided not to pay a dividend for the financial year 2024. This decision underscores our commitment to maintaining financial stability, strengthening our balance sheet, and ensuring sufficient cash generation to support ongoing operational and strategic initiatives. While we acknowledge the importance of shareholder returns, the current financial climate necessitates a prudent approach to capital distribution. After evaluating with the Supervisory Board and consulting major shareholders, the company decided not to pay a dividend for 2024.

Outlook 2025

Market circumstances remain challenging given the current macro environment, with our customers remaining cautious with their capex spending. Nevertheless, we expect a continued shift towards reusable plastic packaging as a result of the recently adopted Packaging & Packaging Waste Regulation (PPWR) legislation and other legislative requirements. Combined with our integrated approach to circularity we expect to gain market share. We have implemented a cash saving and operational excellence program program, SHIFT, which is designed to reduce our cost base and increase our operational excellence. Capital expenditures will be below last year and will focus on next generation solutions. We expect sales and EBITDA in 2025 to be at least at the same level as 2024.

Guidance 2030

Cabka reiterates its guidance for high single-digit sales CAGR, aiming to outperform market growth in order to reach €300 million in revenues by 2030. The company targets an EBITDA margin of 15-17%, with annual CAPEX spending of less than €20 million, split equally between growth and replacement & maintenance.

Net working capital is expected to be approximately 20% of sales, and the pay-out ratio of net profit is projected to be around 30-35%.

Condensed bridge from operational to IFRS consolidated statement of profit and loss, 2024 preliminary unaudited¹

COMPREHENSIVE OVERVIEW 2024

Sales performance       

Full-year sales for 2024 amounted to €181.9 million, reflecting an 8% decrease compared to the previous year (2023: €196.9 million). From the 8% decline, 4% was due to the intentional price reductions we implemented in our customer pricing strategy during the year, passing on the benefits of declining raw material and energy prices to our customers. The remaining decline was the result of lower volumes in our US Customized Solutions and continued soft demand in our Contract Manufacturing segment.

In Europe, our Portfolio business grew by 8% year-over-year, reaching €77.5 million (2023: €71.6 million⁶). The customized solutions business in Europe remained relatively resilient to market conditions, showing a €0.2 decrease in revenue to €34.5 million compared to €34.7 million⁴ in 2023. Contract Manufacturing (both strategic and non-strategic business) experienced very weak demand throughout the year. This led to a sales decline of €11.4 million, bringing total sales to €18.3 million (2023: €29.7 million).

In the US, our Portfolio business demonstrated notable growth, increasing by 10% year-over-year to €19.9 million in 2024. This growth underscores the success of our commercial strategy to regain market share, as we strengthened our sales force in the region. Conversely, the Customized Solutions segment faced significant challenges due to adverse market conditions, where key customers refrained from committing to further capital expenditures for the time being, resulting in a significant decline of €13.4 million in sales.

Lastly, the ECO business delivered robust growth of 4% year-over-year, resulting in €26.3 million sales in 2024 (2023: €25.3 million).

Cost developments

In 2024, the company achieved a significant improvement in its operational gross margin, which increased with 3pp to 50.9%, compared to 48.3%⁷ in 2023.

Throughout 2024, the company maintained a strong emphasis on its internal production capacity and strategic cost management across all segments.

With the US plant fully operational since the second half of 2023, we were able to refocus on our in-house production capabilities.

The introduction of a new raw material processing technology in the US, coupled with increased automation and robotization at our plants, and a gradual shift towards higher value-add products, collectively contributed to the margin improvement.

Operating expenses remained relatively stable compared to last year, with the main increase noted in personnel costs. This increase was driven by the expansion of our sales force, with key vacancies filled towards the end of 2023, and the impact of inflation on personnel costs.

Depreciation and amortization increased by 18% to €20.2 million, primarily attributable to the capitalization of assets we installed to reopen and expand our plant in the US.

EBITDA

The company reported an operational EBITDA of €20.5 million for the full year of 2024, which is €3.9 million lower compared to last year (2023: €24.4 million²). The reduction in EBITDA is predominantly attributable to the decrease in sales for the year, followed by inflationary pressures on our fixed cost base.

Debt Facility

In August 2024, Cabka successfully negotiated with the bank to waive and adjust certain financial covenants until end of Q2 2025.

Net Working Capital

Net Working Capital (NWC) position remained well within our medium-term guidance, amounting to €26.5 million or 14.6% of sales as per 31 December 2024. This is mostly in line with the previous year's position which was €27.1 million or 13.7% of sales as per December 2023.

NWC showed a small movement of €0.6 million in 2024. The positive movement is the result of an €8.0 decrease in trade receivables, partially offset by a €4.2 million increase in inventories and a decrease in trade payables of €3.5 million.

The increase in inventory value during 2024 related to the optimization of idle production capacity during the periods of lower demand. Recognizing the shift in customer demand in shorter order cycles, the company took a proactive decision to build up inventory. This decision ensured that we can fulfil customer orders promptly and efficiently, meeting their expectations for timely stock availability in the upcoming period. The decrease in trade payables was mainly due to final settlements made towards machinery and equipment installed in our US plant, which were committed during 2022. The significant decrease in trade receivables at the end of 2024 resulted from the factoring implemented in December.

Cash flows and cash position

Cash flows from operating activities amounted to €16.2 million (2023: €27.2 million). Cash flows used in investing activities amounted to €18.0 million (2023: €30.7 million) of which €18.7 million was related to capital investments in property, plant and equipment and intangible assets (2023: €30.9 million). Cabka disposed of certain assets contributing €0.3 million of cash during 2024. In addition, interest earned on short term deposits amounted to €0.4 million.

Cash flows from financing activities amounted to €0.6 million (2023: €-11.1 million). Main cash inflow resulted from the funding receipt out of the debt facility amounting to €15.5 million (2023: nil). This inflow was almost completely offset by the repayment of debt facilities and interest totaling €-6.8 million (2023: €-7.2 million), followed by the settlement of lease facilities in 2024 amounting to €-4.4 million (2023: €-2.7 million) and dividend payments of €-3.7 million (2023: €-1.2 million). The total cash balance at 31 December 2023 was €4.4 million (31 December 2023: €7.3 million).

CAPEX  

Total CAPEX for 2024 amounted to €18.7 million (2023: €30.9 million). Included in this total is investments in maintenance & replacement CAPEX amounting to €9.4 million. Excluding the US investments related to the flood, maintenance & replacement CAPEX was €7.7 million, or 4% of total sales. Total investment in 2024 for our St. Louis plant to reopen and expand, amounted to €1.7 million (2023: €12.1 million). In our ECO business we invested €1.7 million (2023: €2.3 million).

ESG

Cabka is committed to making a positive impact with its operations and ultimately with the product it supplies to the market. We are the circularity leader in the RTP industry, with 88% of our raw material intake coming from recycled materials in 2024, 100% of products being reusable with take-back clauses for recycling, and with supporting the collection of additional plastics for recycling. For comparison, the average plastic waste recycling rate for Europe in 2021 was only at 14% targeting to get to 33% by 2030⁸.

For its management of ESG topics, Cabka achieved "gold” status in the EcoVadis assessment for the second year in 2024. The Gold rating from EcoVadis is a testament to Cabka's commitment and excellence across the various sustainability categories and demonstrates the significant progress that has been made in one year, moving Cabka to the top 5% of rated companies, and placing it amongst the top 2% in the plastic products industry.

Cabka participated for the second time in the assessment by the Carbon Disclosure Program (CDP), a non-profit organization that runs a global disclosure system for companies on climate impacts. Cabka was able to hold its B score on a scale from A to D-, with A being best practice. The B score reflects the importance Cabka gives to climate issues and proves that we are well on track with other European businesses on the topic.

In 2024, Cabka continued to work on implementing new ESG-related legislation in its ESG strategy and will publish its first CSRD-compliant ESG statement in the 2024 Integrated Annual Report, following an extensive stakeholder analysis and re-assessment of material impacts, risks, and opportunities. In addition, we are currently focusing on the PPWR and national regulations related to packaging, which will play a crucial role in shaping the future of the packaging industry. Cabka closely follows the regulatory process and will proactively handle the secondary legislation framework upon its establishment in the coming months and years to further inform our strategies.

Share price

On 31 December 2024 the Cabka shares closed at € 2.10.

Tax positions

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management's assessment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits. Management reassessed the deferred tax asset which was accumulated in the US including the effects of the devastating flooding of 2022. The company adopts a conservative stance

by only recognizing a deferred asset where there is a high degree of certainty regarding the future profits. Management decided based on the strict guidelines from IFRS and out of prudence to reduce the deferred tax asset. This adjustment has no impact on the fiscal position of the company as it aims for building a growing and profitable US operation.

At the moment of publication of this preliminary unaudited financial results report, the assessment of current and deferred tax positions has not been fully finalized and might be revised ahead of the publication of the Annual Report 2024.

Relevant events after 31 December 2024

After the balance sheet date of December 31, 2024, there have been no significant events.

Financial Calendar 2025

For more information, please contact:

Nadia Lubbe, Investor & Press contact

[email protected], or [email protected];

+49 152 243 254 79

www.investors.cabka.com

Commercial contact: [email protected]

www.cabka.com

About Cabka

Cabka is in the business of recycling plastics from post-consumer and post-industrial waste into innovative reusable transport packaging (RTP), like pallets- and large container solutions enhancing logistics chain sustainability. ECO product are mainly construction and road safety products produced exclusively out of post-consumer waste.

Cabka is leading the industry in its integrated approach closing the loop from waste, to recycling, to manufacturing. Backed by its own innovation center it has the rare industry knowledge, capability, and capacity of making maximum use bringing recycled plastics back in the production loop at attractive returns. Cabka is fully equipped to exploit the full value chain from waste to end-products.

Cabka is listed at Euronext Amsterdam as of 1 March 2022 under the CABKA ticker with international securities identification number NL00150000S7.

Disclaimer

All results in the press release are based on regular operations excluding extraordinary items, unless mentioned otherwise. The qualification extraordinary item is a management accounting term to indicate this is not part of regular operations. The financial statements in the appendix are based on IFRS and do not distinguish between operational or extraordinary items. See appendix I. for definitions of operational items by management.

The content of this press release may include statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms ''believes'', ''estimates'', ''plans'', ''projects'', ''anticipates'', ''expects'', ''intends'', ''may'', ''will'' or ''should'' or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth, or strategies.

Readers are cautioned that any forward-looking statements are not guarantees of future performance. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this press

release. The Company undertakes no obligation to publicly update or revise the information in this press release, including any forward-looking statements, except as may be required by law.

This document contains information that qualifies as inside information within the meaning of Article 7(1) of Regulation (EU) No 596/2014 on market abuse.

FINANCIAL OVERVIEW APPENDIX

I. Definitions of operational items by management

• Gross Margin Gross Profit divided by Revenue
• EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization is an important measurement of the Company's financial performance before taking the cost of capital, depreciation and taxes into consideration. EBITDA margins provide a view of operational efficiency and enable a more accurate and relevant comparison between peer companies.
• EBIT or Earnings Before Interest and Taxes, is a measure of a company's profitability that excludes interest expenses and tax payments. It represents the company's core, recurring business income before the impact of its capital structure and tax obligations. EBIT is also known as operating income and is calculated as revenue minus operating expenses, excluding interest and taxes.
• Gross Profit Profit as Revenue for the period plus changes in inventory and other operating income for the period, minus raw material costs, energy costs and purchased services
• Maintenance and Replacement Capital Expenditures The expenses incurred by the company that are related to the maintenance and replacements of assets like plants, machinery and buildings

• Maintenance and Replacement Capital Expenditures as a percentage of revenue: Maintenance and Replacement Capital Expenditures divided by Revenue
• Net Working Capital Trade accounts receivables plus inventories net of trade accounts payables
• Net Working Capital as percentage of revenue Net Working Capital divided by Revenue.
• Net Income from operations Net Income reported for the period, being adjusted for non-operational activities.
• Non-operational Indicates that this is not part of regular operational activities.
• Operational EBITDA Net Result reported for the period, adjusted for non-operational activities, before depreciation and amortization, interest expenses and income, taxes and share option plan accruals

II. Condensed bridge from operational to IFRS consolidated statement of profit and loss, 2024 preliminary unaudited

III. Condensed consolidated statement of profit and loss 2024 preliminary unaudited