Board of Directors Address

Dear Shareholders and Investors,

Through the outgoing year 2025, Stara Planina Hold Plc and the companies within the group demonstrated resilience amidst dynamic global changes and deepening diverse crises, which continue to determine the development of our country, Europe, and the world.

The economic and geopolitical situation globally continues to be characterized by a high degree of uncertainty. Along with the negative effects resulting from the military conflicts in Ukraine and the Middle East, high electricity prices, complex regulatory requirements, the lack of qualified labor resources and sustainable policies to stimulate investment and innovation continue to lead to capital outflows and a decrease in the competitiveness of Europe, which continues to lag behind its main competitors the USA and China in terms of economic growth. The largest European economy - a major trading partner and market for the companies in the group of Stara Planina Hold Plc - is expected to achieve minimal economic growth of around 0.2% to 0.3% in 2025 after two consecutive years of recession.

Nationally, the political instability in the country over the past four years has not been overcome and continues to be assessed as a major factor negatively affecting economic activity and the business environment. Despite the key approvals for Bulgaria to adopt the euro as of January 1, 2026, the lack of real reforms and consistent state policies, along with declining exports, high energy prices and the ongoing downward trend in industrial production in Bulgaria since the second half of 2023 and the high risk of deepening the unsustainable fiscal spiral, threaten Bulgaria's macroeconomic stability and its medium- and long-term economic growth.

Against this background, the companies in the Group of Stara Planina Hold Plc report results that confirm our preliminary expectations for a slight increase in sales revenue on an annual basis in 2025. The group's consolidated net sales revenue for the first half of 2025 reached BGN 141.738 million, representing a decrease of 0.59% compared to sales in the same period of 2024 and a decrease of 33.02% compared to sales reported in the first half of 2023. The group's total consolidated profit after tax for the first half of 2025 amounted to BGN 7.13 million, which represents an increase of 1.63 % compared to the consolidated profit after tax reported for the same period of the previous year, and a decrease of 73.26 % compared to the profit for the first half of 2023. With the forecast revenues for the second half of 2025, we expect to report a growth of over 10% compared to the same period of the previous year and a decrease of approximately 18 % compared to the second half of 2023. On an annual basis, we expect the consolidated sales revenues of Stara Planina Hold AD to reach BGN 278 million (€141.12 million), which would represent an increase of over 4 % compared to the previous year.

Inconclusive data indicate that the investments of our enterprises have reached BGN 33.8 million, intended mainly for ongoing technological renewal, introduction of highly profitable products and production processes, innovations for green and digital transition, increasing labor productivity and sustainable development. Despite the ongoing significant global uncertainty, at this stage the companies within the group of Stara Planina Hold Plc plan to make investments in 2026 as well, albeit on a smaller scale, which will again be directed towards modernization and technological renewal, the green and digital transition, and sustainable development.

Along with the external and internal crises, 2025 solidified the lack of personnel and the training of those personnel as a primary problem for the Bulgarian economy - there is a lack of both highly and medium-qualified specialists and low-qualified personnel. Under these conditions, for another consecutive year, a leading priority for us was to retain key specialists and attract new professionals to the companies. Labor productivity this year increased by 7.5 %, with an average annual increase in wages of 8.2 %. In 2026, we predict a decrease in the number of employed persons by about 6 %, while we expect an increase in labor productivity by over 4%, with an increase in the average monthly wage by about 9 %.

In the beginning of December, the market capitalization of the public companies in the group exceeded BGN 700.8 million. In 2025 again, Stara Planina Hold Plc continues being the only public holding company in Bulgaria that has distributed dividends for every year of its existence.

We expect that the 2025 gross financial result of the group of Stara Planina Hold Plc group will increase by over 36% compared to the levels achieved in 2024. The net profit of Stara Planina Hold Plc for 2025 will exceed BGN 5.2 million which gives us confidence that for the 29th consecutive year, part of it will be distributed as a dividend to the shareholders of the holding.

The current forecast is based on the results achieved in 2025, the business plans of companies for 2026 and the expectations for our main markets. It is directly dependent on the European economic prospects, which continue to be accompanied by great uncertainty and on the expectations of Bulgarian business for, rather, preservation or deterioration of economic indicators, rather than positive development. In the most recent review of the world economy from October 2025 the IMF forecasts global economic growth of 3.2 percent for the current year and 3.1 percent for 2026. Growth is forecast for the euro area at 1.2 percent for 2025 and 1.1 percent for 2026, and US economic growth is expected to be 2 percent and 2.1 percent in the two years covered by the forecast. China, the world's second-largest economy and the world's largest in purchasing power parity, is forecast to slow to 4.8 percent in 2025 and 4.2 percent next year, compared to the 5 percent rate reported for 2024. According to IMF experts, a positive impact on the global economy can be achieved by reaching trade agreements and reducing tariffs, using the potential of AI to increase productivity, as well as improving domestic policies, through the proper implementation of which countries could restore their fiscal space, optimize public spending, and ensure independent monetary policy to strengthen economic resilience and reduce macroeconomic risks.

The forecasts of our partners in the country, Europe and the world remain uncertain, which does not give us reason to predict results with higher values ​​for the next financial year. In the current conditions, the Board of Directors of Stara Planina Hold Plc expects that in 2026 sales revenues in the group will be close to the levels reported in 2025. The factors that will continue to influence the activities of the companies in the group in the coming year are the market prices of raw materials and production materials, the transport of supplies, the regional market price of the workforce, the prices of energy resources and the security of their supplies. The unstable political situation, financial policy, the macroeconomic development of the country, as well as geopolitical factors are emerging as the most worrying circumstances that will affect the business. Along with the threat to European and regional stability, the geopolitical situation puts the supplies of energy resources and the opportunities for sustainable growth of the economy at additional risk. The effect of the measures taken at the European and national level, as well as the correspondingly imposed countermeasures, will have an impact on the activities of the group's companies and may lead to adjustments in the expected business results.

In 2026 again we will be led by the purpose of achieving high level of quality, productivity and profitability of our business operations. Sustainable achievement of good financial results with the expected sales volumes will continue to be the main task for ensuring the shareholders’ investments and their profitability.

Our success will continue being shared with all those involved in its achievement.

Sofia, December 19, 2025
Stara Planina Hold Plc
Board of Directors