toya_Grupa_spr_dzial-2024-12-31-0-en.xhtml

 
TOYA S.A. and TOYA S.A. CAPITAL GROUP 
Report on operations for the period of 12 months ended 31 December 2024 
 
 
_______________________________________________________________________________________ 
 

Contents 
 PROFILE OF THE PARENT COMPANY __________________________________________________ 4 
1.  GENERAL INFORMATION _______________________________________________________________ 4 
2.  ORGANISATION OF TOYA S.A. CAPITAL GROUP _____________________________________________ 5 
 EXTERNAL ENVIRONMENT OF THE COMPANY AND THE GROUP  ___________________________ 6 
1.  MACROECONOMIC SITUATION __________________________________________________________ 6 
2.  CHANGES IN FINANCIAL MARKETS _______________________________________________________ 7 
3.  LEGAL ENVIRONMENT _________________________________________________________________ 9 
4.  SUPPLY CHAIN _______________________________________________________________________ 9 
5.  COMPETITION _______________________________________________________________________ 9 
 DESCRIPTION OF THE MOST IMPORTANT EVENTS IN THE COMPANY AND CAPITAL GROUP IN 2024 
    ______________________________________________________________________________ 10 
1.  EXPRESSION OF CONSENT BY THE SUPERVISORY BOARD TO CONCLUDE A GUARANTEE AGREEMENT  10 
2.  CONCLUSION OF A SHORT-TERM LOAN AGREEMENT BY SUBSIDIARY __________________________ 10 
3.  ANNEX TO THE OVERDRAFT AGREEMENT ________________________________________________ 10 
4.  RESOLUTIONS ADOPTED BY THE GENERAL MEETING OF SHAREHOLDERS ON 26 JUNE 2024 ________ 11 
5.  ANNEX TO THE OVERDRAFT AGREEMENT ________________________________________________ 11 
6.  ANNEX TO THE OVERDRAFT AGREEMENT ________________________________________________ 11 
7.  IMPACT OF THE WAR BETWEEN UKRAINE AND RUSSIA ON THE GROUP’S OPERATIONS  ___________ 11 
 COMPANY AND GROUP ACTIVITIES IN 2024 ___________________________________________ 12 
1.  OVERVIEW OF THE FINANCIAL RESULTS OF THE TOYA CAPITAL GROUP  ________________________ 12 
2.  OVERVIEW OF THE FINANCIAL RESULTS OF TOYA S.A.  ______________________________________ 19 
3.  INFORMATION ON OWN BRANDS  ______________________________________________________ 25 
4.  INFORMATION ABOUT MAIN SALES MARKETS  ____________________________________________ 27 
5.  INFORMATION ABOUT SUPPLIERS ______________________________________________________ 33 
6.  MAJOR RESEARCH AND DEVELOPMENT ACHIEVEMENTS ____________________________________ 33 
7.  INFORMATION ON THE EMPLOYEE STOCK PROGRAM CONTROL SYSTEM _______________________ 33 
8.  TRANSACTIONS WITH RELATED PARTIES _________________________________________________ 33 
9.  INFORMATION ON CREDITS AND LOANS TAKEN ___________________________________________ 33 
10.  INFORMATION ON CREDITS AND LOANS GRANTED  ________________________________________ 35 
11.  INFORMATION ON CONCLUDED AGREEMENTS SIGNIFICANT FOR THE GROUP'S ACTIVITIES ________ 35 
12.    _ ASSESSMENT OF FINANCIAL RESOURCE MANAGEMENT AND ASSESSMENT OF THE ABILITY TO MEET 
OBLIGATIONS _____________________________________________________________________________ 35 
13.  DESCRIPTION OF SIGNIFICANT OFF-BALANCE SHEET ITEMS __________________________________ 36 
14.  DISPUTES __________________________________________________________________________ 36 
 GROUP DEVELOPMENT PLANS AND PROSPECTS _______________________________________ 37 
 RISK MANAGEMENT  _____________________________________________________________ 38 
1.  MAIN TYPES OF RISK _________________________________________________________________ 38 
2.  RISK MANAGEMENT SYSTEM __________________________________________________________ 38 
 TOYA GROUP SUSTAINABILITY REPORT ______________________________________________ 40 
1.  ESRS 2 GENERAL DISCLOSURE __________________________________________________________ 40 
2.  ENVIRONMENTAL INFORMATION  ______________________________________________________ 60 
3.  ESRS E5 RESOURCE USE AND CIRCULAR ECONOMY  ________________________________________ 81 
4.  ESRS S1 OWN WORKFORCE  ___________________________________________________________ 84 
5.  ESRS S2 OSOBY WORKERS IN THE VALUE CHAIN ___________________________________________ 90 
6.  ESRS S4 CONSUMERS AND END-USERS  __________________________________________________ 93 
7.  ESRS G1 BUSINESS CONDUCT __________________________________________________________ 96 
 STATEMENT ON THE APPLICATION OF CORPORATE GOVERNANCE PRINCIPLES  _____________ 101 
1.  PRINCIPLES OF CORPORATE GOVERNANCE ______________________________________________ 101 

 
TOYA S.A. and TOYA S.A. CAPITAL GROUP 
Report on operations for the period of 12 months ended 31 December 2024 
 
 
_______________________________________________________________________________________ 
 

2.  INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM IN RELATION TO THE FINANCIAL STATEMENTS 
PREPARATION PROCESS ____________________________________________________________________ 104 
3.  SHAREHOLDERS HOLDING SUBSTANTIAL BLOCKS OF SHARES  _______________________________ 105 
4.  SECURITIES GIVING SPECIAL CONTROL RIGHTS ___________________________________________ 106 
5.  LIMITATION OF RIGHTS FROM SHARES  _________________________________________________ 106 
6.  DESCRIPTION OF THE RULES FOR CHANGING THE ISSUER'S STATUTE _________________________ 106 
7.  GENERAL SHAREHOLDERS MEETING  ___________________________________________________ 106 
8.  MANAGEMENT BOARD, SUPERVISORY BOARD AND AUDIT COMMITTEE  ______________________ 110 
9.  DIVERSITY POLICY  __________________________________________________________________ 118 
10.  INFORMATION ABOUT THE ENTITY AUDITING THE FINANCIAL STATEMENTS ___________________ 118 
 INFORMATION ABOUT SIGNIFICANT EVENTS THAT OCCURRED AFTER THE BALANCE SHEET DATE

1.  CONCLUSION OF THE CREDIT AGREEMENT BY THE SUBSIDIARY YATO TOOLS (JIAXING) CO., LTD.  __ 119 
2.  ANNEX TO THE OVERDRAFT AGREEMENT _______________________________________________ 119 
 

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

1. PROFILE OF THE PARENT COMPANY

1.1. GENERAL INFORMATION

The Group's core business is the import and distribution of industrial products, including in particular power tools and

hand tools for professionals and for home use, equipment useful in the kitchen, bathroom and garden, as well as

professional catering equipment. The main producers and suppliers of goods that can be found in millions of

apartments, workshops and construction investments in over 100 countries around the world are companies located in

China. For many years, the Group has been implementing a strategy of expansion into international markets. It focuses

primarily on the markets of Central, Southern and Eastern Europe (Romania, Ukraine, the Baltic countries, Hungary,

Belarus, Moldova, the Czech Republic, Bulgaria and Germany).

The Parent Company of the Group is TOYA S.A. (the “Company” or the “Parent Company”) is a joint stock company

established under the Commercial Companies Code. The Parent Company has its registered office in Wrocław at ul.

Sołtysowicka 13/15.

TOYA S.A. was formed on the basis of a Notarial Deed drawn up on 17 November 1999. Pursuant to a decision of 3

December 1999, the Parent Company was entered in the Commercial Register maintained by the District Court for

Wrocław-Fabryczna, 6th Commercial Division, with the reference number RHB 9053. By virtue of a decision of 4

December 2001, the District Court for Wrocław-Fabryczna, 6th Commercial Division of the National Court Register,

decided to enter the Parent Company in the Register of Entrepreneurs, with the reference number KRS 0000066712.

The entry in the Register took place on 5 December 2001.

The duration of the Parent Company is unlimited.

As at the date of submission of the annual report, the Parent Company has 1 branch located outside the registered

office, in Nadarzyn.

As of 31 December 2024, the share capital of the Parent Company amounted to PLN 7,504,222.60 and consisted of

75,042,226 shares with a nominal value of PLN 0.1 each. In 2024, there were no changes in the share capital.

The Parent Company does not hold any treasury shares.

Since 12 August 2011, the Parent Company’s shares have been listed on the Warsaw Stock Exchange.

This Management Board report on operations of TOYA S.A. Capital Group for 2024 has been prepared together with the

Management Board report on operations of TOYA S.A. and includes the sustainable development report of TOYA S.A.

Capital Group for 2024.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

1.2. ORGANISATION OF TOYA S.A. CAPITAL GROUP

TOYA Capital Group consists of entities operating in various countries.

As at 31 December 2024, the Group comprised

the following entities:

Characteristics of entities comprising the Capital Group (as at 31 December 2024 and as at the date of publication of the

report on operations of the Capital Group):

Entity name

Registered

office

Business profile

Type of equity link

% of shares

and votes

held

Link

establishmen

t date

Method of

Consolidation as at

the end of the

reporting period

TOYA S.A.

Wrocław,

Poland

Distribution of tools and

power tools

Parent Company

Not applicable

Not applicable –

Parent Company in

the Group

Toya Romania S.A.

Bucharest,

Romania

Distribution of tools and

power tools

Subsidiary

99.99

November

2003

Full consolidation

method

Yato Tools

(Shanghai) Co., Ltd.

Shanghai,

China

Distribution of tools and

power tools

Subsidiary

100.00

January 2013

Full consolidation

method

Yato Tools (Jiaxing)

Co., Ltd.

Baibu,

China

Distribution of tools and

power tools

Subsidiary

100.00

December

2019

Full consolidation

method

TOYA S.A. is a member of the Association of Stock Exchange Issuers.

YATO Tools (Shanghai) is a member of Shanghai Pudong International Chamber of Commerce for Foreign Economic

Relations.

Apart from the capital investments described above, no other capital investments were made within the Group.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

As of the date of publication of the report on the activities, the Parent Company is personally related with the following

entities (entities with which the Parent Company made transactions in 2024 are included):

• Toyota Katowice Sp. z .o. o. - an entity related through the key management of the Company;

• Unicase Sp. z o.o. - an entity related through the key management of the Company.

Details regarding transactions with related parties are included in Note 31 of the stand-alone financial statements and

Note 32 of the consolidated financial statements.

In 2024 there were no significant changes in the Group's management methods and principles.

2. EXTERNAL ENVIRONMENT OF THE COMPANY AND THE

GROUP

2.1. MACROECONOMIC SITUATION

The Group is present on markets in various parts of the world, although most of its clients operate in Poland. Due to the

links between the Polish economy and the global economic system and due to the extensive activities conducted outside

the local market, the global economic situation affects the volume of turnover realized by the Group's clients. In 2024,

the dynamic volatility on global markets, resulting from geopolitical tensions, rising commodity prices and the

consequences of central bank actions, periodically hindered the Group's expansion on foreign markets, forcing it to

search for new clients and adjust market strategies.

The current macroeconomic situation is influenced by several factors:

1. Rising interest rates and monetary policy: Many central banks, including the European Central Bank (ECB) and

the US Federal Reserve, may continue to raise interest rates in 2025 to combat inflation. These increases are

expected to have an impact on borrowing costs, which could slow growth in consumption and investment.

2. Inflation: Although inflation is beginning to stabilize in many countries, it may still remain elevated compared

to the period before the pandemic. Prices of raw materials, energy and wages may still affect the cost of living.

In Poland, inflation in 2025 will probably gradually decline, but it may still be higher than the NBP expects.

3. Economic slowdown: Many developed economies face the risk of recession or slowdown in economic growth

in 2025. Economic growth in the eurozone and the United States could be weaker than in previous years, which

could be due to high interest rates and uncertainty related to financial markets.

4. Labor Market: In many labour markets (especially in developed countries) we can still observe low

unemployment, but in the face of the economic slowdown, employment growth may slow down. In Poland,

the labour market may still be characterized by relatively low unemployment, but the corporate sector may

struggle with difficulties related to rising labour costs.

5. Supply Chain Issues: While the COVID-19 pandemic has disrupted global supply chains, some of these issues

may still persist, especially with rising energy and raw material costs. We can also expect continued struggles

with international political tensions that could impact international trade.

The economic situation on the Asian market related to the current growth of the GDP of these countries remains a

significant factor influencing the financial situation of the entire Group due to the fact that the Group purchases goods

mainly from manufacturers in this region. In 2024, this economic situation was influenced by challenges resulting from

uncertainty on the Chinese market, such as a slowdown in the real estate sector, a weakening of the dynamics of imports

and exports and disruptions in supply chains. Prices of purchased goods, trading conditions, order fulfilment times and

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

logistics costs between Asia and Europe may continue to fluctuate, especially in the context of high energy prices and

possible transport disruptions.

The impact of these factors is difficult to estimate, as the future economic and regulatory situation may differ from the

expectations of the Management Board of the Parent Company. The Group's management is closely monitoring

developments and adjusting strategic intentions in order to minimize these threats.

2.2. CHANGES IN FINANCIAL MARKETS

The Group's strong links with foreign suppliers and settlements with them in USD and CNY make the Group's financial

results sensitive to changes in currency rates. Currency rate fluctuations in 2024 were the result of complex

macroeconomic factors, including the monetary policy of major central banks, the economic situation in the US and

China, and geopolitical tensions. The Group closely monitors the currency situation on global markets and trends, and

periodically updates the prices of its goods. As a result, margins may be subject to periodic fluctuations.

It should, however, be stressed that due to the fact that a substantial part of the Group’s sales revenue is earned through

the export channel based on prices set in foreign currencies, the Group is, to a certain extent, secured against sudden

movements in exchange rates. However, this security is not complete and not sufficient, as a result of which FX

fluctuations may have negative impact on the Company’s financial performance.

The chart below shows fluctuations in the average NBP exchange rate for the basic currency rates used in the Company's

operations in 2024.

Source: own study based on https://nbp.pl/statystyka-i-sprawozdawczosc/kursy/archiwum-tabela-a-csv-xls

The Group uses external capital financing. An increase in interest rates on the financial market may adversely affect the

costs of financing and reduce the Group's profitability, as the Parent Company and the subsidiary in China enter into

variable interest rate loan agreements in their functional currencies (PLN and CNY).

0,835

0,84

0,845

0,85

0,855

0,86

0,865

0,87

0,875

0,88

0,885

0,89

3,5

3,6

3,7

3,8

3,9

4,1

4,2

4,3

4,4

4,5

CNY

USD AND EUR

Average NBP exchange rates of the most

important world currencies against PLN in 2024

USD EUR CNY

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

In 2024, the Monetary Policy Council maintained the interest rates of the National Bank of Poland at an unchanged

level. The main reference rate was 5.75% per annum. The last change in interest rates took place in October 2023, when

the MPC reduced them by 0.25 percentage points. Since then, throughout 2024, interest rates have remained constant,

which meant 15 months without changes in monetary policy.

The chart below presents changes in the NPB reference interest rate in the period 2022-2024.

Source: own study based on https://nbp.pl/polityka-pieniezna/decyzje-rpp/podstawowe-stopy-procentowe-nbp

The one-year Loan Prime Rate (LPR) in China was 3.45% at the beginning of 2024, and in October 2024 the People's

Bank of China (PBoC) cut it to 3.10% to stimulate economic growth by reducing borrowing costs.

Interest rates for loans in China are usually lower than in Poland, which is due to differences in the monetary policies

and economies of the two countries. In China, the government pursues a more expansionary monetary policy,

maintaining lower rates, while in Poland higher interest rates are used to control inflation and stabilize the economy.

In order to minimize the risk of a negative impact of interest rate changes on the Group's financial situation, the Parent

Company simulates various scenarios in order to select the optimal sources of financing, taking into account refinancing,

renewal of existing positions, alternative financing as well as medium-term trends on the debt market.

2,3%

2,8%

3,5%

4,5%

5,3%

6,0%

6,5%

6,8%

6,0%

5,8% 5,8% 5,8%

NBP reference interest rate in 2022-2024

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

2.3. LEGAL ENVIRONMENT

Changes in legislation and diverse interpretations of the law hinder the Group’s operations. Changes in legislation, in

particular in tax, customs, labour and social insurance law and introduction of new burdens, may have negative

consequences for the Company’s activity. Frequent changes in the interpretation of the tax law and lack of uniform

practices of fiscal authorities and courts in the application of tax legislation, are particularly burdensome. This may

involve the risk of third-party claims and proceedings of various state authorities. Moreover, because of their complexity

and inconsistent taxation practices, interpretations are often the subject of disputes with tax authorities. The Parent

Company exercises due care to ensure that these transactions are compliant with legislation – in particular with the tax

law. In spite of that, the risk of third-party claims, possible disputes with tax authorities or proceedings of various state

authorities cannot be ruled out. Such claims, disputes or proceedings, as well as cases when fiscal authorities or courts

and the Parent Company adopt different interpretations of tax regulations and different tax qualification of events and

transactions in which the Parent Company participated, may have adverse impact on the Group’s financial performance.

However, it should be noted that the Group takes measures to mitigate the effects of changes in law. The Parent

Company uses external services of renowned law and tax firms, which facilitate its current operations.

2.4. SUPPLY CHAIN

The Group purchases goods from suppliers located in various parts of the world, but mainly in Asia. These goods are

transported by sea. In 2024, disruptions in supply chains between Asia and Europe resulting from logistical problems,

infrastructure constraints and pressure on transport costs highlighted the vulnerability of such solutions to global

challenges. Any adverse events concerning, among others, means of production and transport, labour, infrastructure,

natural phenomena and events, of a general nature, can significantly affect the stability of supplies. The Group mitigates

this risk by cooperating with many contractors, who are additionally based in different regions of many countries.

However, in the case of disruptions with a wide geographical scope, such as congestion in Asian ports or trade

restrictions, even this strategy may prove insufficient.

2.5. COMPETITION

The global market of manufacturers is quite fragmented. The 7 largest entities such as Bosch, Stanley Black&Decker,

Hilti, Makita account for slightly over half of the market. The main share in creating the market value is held by tools

and power tools imported by distributors who have transferred production to foreign, mainly Asian, sub-suppliers.

The Polish market for distribution of industrial goods, which is the Group’s main field of operation, is relatively highly

dispersed in spite of the presence of several market leaders. Entities currently competing with the Group continue to

take actions to intensify their development through aggressive pricing policy aimed at current, target or potential

customers. Such actions may have a negative impact on the Group’s financial standing, because further expansion of

the market may be slowed down, become difficult or even impossible. The Group shall be monitoring the market and

its environment, taking various measures in order to maintain and develop competitive advantage.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

3. DESCRIPTION OF THE MOST IMPORTANT EVENTS IN THE

COMPANY AND CAPITAL GROUP IN 2024

3.1. EXPRESSION OF CONSENT BY THE SUPERVISORY BOARD TO CONCLUDE

A GUARANTEE AGREEMENT

On 6 March 2024, the Company received information about the consent of its Supervisory Board to the conclusion of

the Surety Agreement No. BDK/UP/000054601/0040/23, between the Company and the Citibank (China) Company

Limited-Shanghai Branch, based in the People's Republic of China. The Surety Agreement will be concluded to secure

the repayment of receivables due to the Bank, in relation to the planned conclusion of the Short-Term Working Capital

Credit Agreement, in the amount of CNY 60,000 thousand, between YATO TOOLS (Shanghai) Co., Ltd., and the Bank.

The Surety Agreement assumes:

a) surety of the Issuer for the liabilities of the Subsidiary up to CNY 72,000 thousand;

b) granting a surety until 31 August 2025;

c) authorizing the Bank to debit the Issuer's current account with the amount of liabilities arising from the

Surety Agreement;

d) the Issuer's obligation to provide, at Bank's request, within the time limit and in accordance with the

conditions indicated by the Bank and in the content approved by the Bank, a declaration of submission to

enforcement in the form of a notarial deed in accordance with Art. 777 § 1 point 5) of Code of Civil

Procedure.

The remaining terms and conditions of the Surety Agreement do not differ from those commonly used for this type of

agreements.

3.2. CONCLUSION OF A SHORT-TERM LOAN AGREEMENT BY SUBSIDIARY

On 26 March 2024, the Company received information about the conclusion of the Short-term Working Capital Credit

Agreement between YATO TOOLS (Shanghai) Co., Ltd. and CITIBANK (CHINA) CO., LTD. SHANGHAI BRANCH based in the

People's Republic of China.

The loan amounted to CNY 60,000 thousand. The amount will be used for the current operations of the Subsidiary. The

contract was concluded for 12 months.

The loan will be secured by the Company's surety for the liabilities of the Subsidiary under the surety agreement.

The remaining terms and conditions of the Agreement do not differ from those commonly used for this type of

agreements.

3.3. ANNEX TO THE OVERDRAFT AGREEMENT

On 26 March 2024, TOYA S.A. concluded an Annex No. 6 to the Current Account Credit Agreement No. 09/030/19/Z/VV

with mBank S.A. based in Warsaw. Pursuant to the annex, the final repayment date of the loan was set at 27 March

2024. The remaining terms and conditions of the Agreement do not differ from the terms and conditions commonly

used for this type of agreements.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

3.4. RESOLUTIONS ADOPTED BY THE GENERAL MEETING OF SHAREHOLDERS

ON 26 JUNE 2024

On 26 June 2024, the General Meeting of Shareholders of Toya S.A. approved the financial statements of TOYA. S.A. for

2023 and the consolidated financial statements of the TOYA Group, and also decided to transfer the profit for 2023 in

the amount of PLN 52,895 thousand to reserve capital.

3.5. ANNEX TO THE OVERDRAFT AGREEMENT

On 14 November 2024, the Company concluded an annex to the Overdraft Agreement No. WAR/8833/20/326/CB with

BNP Paribas Bank Polska Spółka Akcyjna with its registered office in Warsaw.

The subject of the annex is to extend the current period of credit provision until 17 November 2025 and change the

credit collaterals. Other terms and conditions of the Agreement do not deviate from those commonly applied to this

type of agreement.

3.6. ANNEX TO THE OVERDRAFT AGREEMENT

On 12 December 2024, the Company concluded Annex No. 24 with Bank Handlowy S.A. with its registered office in

Warsaw to the Overdraft Agreement No. BDK/KR-RB/000054601/0641/10.

Under the Annex, the loan amount was reduced to PLN 40,000 thousand, the final repayment date of the loan was set

for 12 December 2025. The remaining terms of the Agreement do not differ from the terms commonly used for this

type of agreements.

3.7. IMPACT OF THE WAR BETWEEN UKRAINE AND RUSSIA ON THE

GROUP’S OPERATIONS

The Group has been present on the markets of Eastern Europe for a long time. Despite its long presence on these

markets, the Group did not have any assets there, and transactions with local clients were of a short-term nature. The

Russian-Ukrainian conflict, which began with military operations on 24 February 2022, disrupted trade relations on

these markets, which in turn resulted in a temporary freezing of relations with some customers or suspension of

cooperation. It should be emphasized that the Parent Company complies with all sanctions imposed by the European

Union, Poland and the governments of other countries, on entities, persons and goods indicated in the relevant legal

acts. The Group has implemented appropriate procedures in this regard. However, the implemented procedures and

the need to verify and comply with all economic sanctions slow down trade with customers from these markets, which

is beyond the Group's control. This may have an impact on trading with customers present in these markets in the

coming quarters.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

4. COMPANY AND GROUP ACTIVITIES IN 2024

The Management Board of the Parent Company did not publish any forecasts of the Company’s and the Group’s results

for 2024.

4.1. OVERVIEW OF THE FINANCIAL RESULTS OF THE TOYA CAPITAL GROUP

Revenue and profitability of TOYA S.A. GROUP (PLN ‘000).

For 12 months ended 31 December

2024

2023

Sales revenue

821,008

732,396

Gross profit on sales

278,382

244,051

Operating profit

87,403

88,765

Profit before tax

85,883

85,012

Net profit

68,418

68,318

In 2024, sales revenues amounted to PLN 821,008 thousand and were higher than revenues achieved in 2023 by PLN

88,612 thousand, i.e. by 12.1%. Growth was achieved in all distribution channels. The largest increase in volume and

revenues was achieved in the export channel, primarily in Ukraine, where revenues amounted to PLN 49,796 thousand,

which is an increase of PLN 6,715 thousand (15.6%) as compared to the previous year, and in Hungary (an increase of

PLN 4,611 thousand, i.e. by 19.3%). Outside Europe, the largest increases were recorded by destinations served mainly

by subsidiaries in China – the United Arab Emirates (an increase of PLN 3,501 thousand), Chile (an increase of PLN 2,848

thousand) and Guatemala (an increase of PLN 2,287 thousand). The highest dynamics was noted in the e-commerce

sales channel, where revenues increased by PLN 32,711 thousand, i.e. by 62%. The main reason in this respect was the

change in the pricing policy in the Parent Company, focused on increasing competitiveness, which affected the volume

of orders from both individual customers and business entities preferring online shopping. Increases were also recorded

in the retail chain channel (by PLN 21,167 thousand, i.e. by 28%), while in the traditional channel sales remained at a

comparable level (an increase of PLN 79 thousand compared to 2023). A significant factor influencing the level of

revenues was the high availability of goods.

Gross profit on sales increased in 2024 by PLN 34,331 thousand, i.e. by 14.1% PLN thousand as compared to 2023, which

was influenced by higher sales revenues, with slightly higher profitability compared to 2023 (33.9% compared to 33.3%),

821 008

278 382

87 403

85 883

68 418

732 396

244 051

88 765

85 012

68 318

0 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000

SALES REVENUE

GROSS PROFIT ON SALES

OPERATING PROFIT

PROFIT BEFORE TAX

NET PROFIT

Revenue and profitability (PLN '000)

2024 2023

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

resulting from changes in the sales structure between distribution channels (a larger share of the e-commerce channel,

in which the Company achieves a higher margin than in other channels).

The operating profit in 2024 in the amount of PLN 87,403 thousand was lower than the one achieved in 2023 by PLN

1,362 thousand, i.e. by 1.5%. The decrease in operating profit despite higher sales revenues was caused primarily by

higher employee benefits costs, mainly in the Parent Company, which was influenced by both the increase in the number

of employees and the increased demand for temporary workers supporting the work of warehouses in periods of

increased deliveries. In addition, the Group incurred higher transport costs resulting from the volume of deliveries,

higher costs of servicing online sales platforms and higher storage costs as a result of the use of logistics services in

external warehouses. At the same time, the Group recorded a surplus of positive exchange rate differences over

negative ones in the amount of PLN 3,513 thousand compared to PLN 2,954 thousand in 2023.

In order to obtain the necessary working capital, the Group mainly uses short-term bank loans. Considering the

significant impact of financial costs related to these loans on the financial result, the Group negotiates the terms of loan

agreements every year so that the costs related to them are as low as possible. In 2024, the Parent Company used bank

loans to a lesser extent than in the previous year. Yato Tools (Shanghai) took out a bank loan to finance its current

operations. Due to the fact that debt financing in China is cheaper than in Poland, interest costs on bank loans were

lower by PLN 2,153 thousand compared to the previous year and amounted to PLN 652 thousand.

Profitability ratios.

For 12 months ended 31 December

2024

2023

Sales profit margin

33.9%

33.3%

Operating profit margin

10.6%

12.1%

Pre-tax profit margin

10.5%

11.6%

Net profit margin

8.3%

9.3%

Key:

Sales profit margin – the ratio of gross profit to sales revenue

Operating profit margin – the ratio of operating profit to sales revenue

Pre-tax profit margin — the ratio of pre-tax profit to sales revenue

Net profit margin — the ratio of net profit to sales revenue

33,9%

10,6%

10,5%

8,3%

33,3%

12,1%

11,6%

9,3%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0%

SALES PROFIT MARGIN

OPERATING PROFIT MARGIN

PROFIT BEFORE TAX MARGIN

NET PROFIT MARGIN

Profitability

2024 2023

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

Sales profitability is a key indicator of market competitiveness for the TOYA Group and has a decisive impact on its

financial situation. Analysis of this indicator for 2024 shows that gross sales profitability in this period increased by 0.6

percentage points compared to 2023. This was due to a higher share of the e-commerce channel in total sales revenue

(an increase from 7% to 10.4%). The margin achieved in the e-commerce channel is higher than in other distribution

channels.

Profitability indicators at the level of operating profit, pre-tax profit and net profit decreased in 2024 compared to the

previous year. The main adverse impact on profitability indicators was the increase in the costs of employee benefits,

transport and online sales platform service.

Cash flows of the Group (PLN ‘000)

For 12 months ended 31 December

2024

2023

Cash flows from operating activities

(40,084)

140,345

Cash flows from investment activities

(14,165)

(10,520)

Cash flows from financial activities

22,715

(95,081)

Net change in cash before foreign exchange differences

(31,534)

34,744

Cash and cash equivalents at the beginning of the period

69,927

38,836

Effect of translation of cash and cash equivalents

735

(3,653)

Cash and cash equivalents at the end of the period

39,128

69,927

In 2024, the Group reported negative cash flows from operating activities in the amount of PLN 40,084 thousand. This

was mainly the result of an increase in inventory levels in all Group companies in order to ensure very high availability

of goods for customers. Inventories increased by PLN 209,821 thousand. At the same time, short-term trade and other

receivables increased by PLN 49,610 thousand due to higher sales in December 2024 as compared to December 2023.

Short-term trade liabilities increased by PLN 124,726 thousand, which was the result of intensified orders for goods

from suppliers in 2024.

In 2024, the Parent Company began an investment related to strengthening the roof structure of the warehouse in

Wrocław. In addition, passenger cars were purchased in accordance with the terms provided for in the leasing

agreement, which were then partially resold. The subsidiary Yato (Jiaxing) Co. Ltd. incurred further expenditures on

equipping the new warehouse. Other expenditures on the purchase of tangible fixed assets include, as in previous years,

mainly the purchase of IT equipment and display racks.

In 2024, the Group generated positive cash flows from financing activities in the amount of PLN 22,715 thousand. The

main reason was the taking out of a bank loan by a subsidiary. The debt on this account at the end of 2024 amounted

to PLN 33,840 thousand. During the year, the Parent Company used financing from overdrafts, but there was no debt

on this account at the beginning and at the end of the period. Cash flows from financing activities were also affected by

the repayment of capital instalments under the lease in the amount of PLN 8,055 thousand, as well as interest paid on

bank loans and leasing in the amount of PLN 2,577 thousand.

The liquidity of TOYA S.A. Capital Group in the analysed period was at an appropriate level. The Group's net working

capital was positive, covering the demand resulting from the amount of realized sales revenues. The ability to settle

short-term liabilities was correct.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

Liquidity ratios

31.12.2024

31.12.2023

Current ratio

2.44

4.17

Quick ratio

0.64

1.48

Key:

Current ratio – the ratio of current assets to short-term liabilities

Quick ratio – the ratio of current assets less inventories to short-term liabilities

The current liquidity ratio decreased to 2.44 as of 31 December 2024, as compared to 4.17 as of 31 December 2023.

The lower current liquidity ratio indicates a higher growth rate of liabilities relative to the growth rate of current assets.

The quick liquidity ratio as of 31 December 2024, was 0.64, compared to 1.48 as of 31 December 2023. The decrease in

this ratio is mainly due to the high level of inventories, which was maintained in order to ensure maximum availability

of goods for customers, and the lack of need to use available credit lines by the Parent Company. Despite the decrease

in liquidity ratios, the Group has sufficient resources to settle current liabilities.

The structure of assets of TOYA S.A. Capital Group (PLN ‘000)

31.12.2024

31.12.2023

Non-current assets, including:

113,255

107,946

Property, plant and equipment

70,621

63,750

Intangible assets

4,156

4,348

Right-of-use assets

31,995

34,524

Current assets, including:

673,900

445,482

Inventory

497,101

287,280

Trade and other receivables

137,671

88,061

Cash and cash equivalents

39,128

69,927

% asset structure of TOYA S.A. Capital Group

31.12.2024

31.12.2023

Non-current assets / Assets

14%

19%

Property, plant and equipment / Assets

12%

Intangible assets / Assets

Right-of-use assets / Assets

Current assets / Assets

86%

81%

Inventory / Assets

63%

52%

Trade and other receivables / Assets

17%

16%

Cash and cash equivalents / Assets

13%

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

The structure of equity and liabilities of TOYA S.A. Capital Group (PLN ‘000)

31.12.2024

31.12.2023

Equity

489,891

419,951

Long-term liabilities

20,822

26,594

Short-term liabilities, including:

276,442

106,883

Short-term trade and other liabilities

212,088

83,422

% equity and liability structure of TOYA S.A. Capital Group

31.12.2024

31.12.2023

Equity / Equity and liabilities

62%

76%

Short-term liabilities / Equity and liabilities

35%

19%

Long-term liabilities / Equity and liabilities

Short-term liabilities / Liabilities

93%

80%

Long-term liabilities / Liabilities

20%

Ratios of return on equity, assets and current assets

For 12 months ended 31 December

2024

2023

Return on assets (ROA)

12%

Return on equity (ROE)

14%

16%

Return on current assets

10%

15%

Key:

Return on assets (ROA) – the ratio of net profit to total assets as at the end of the period

Equity ratio (ROE) – the ratio of net profit to equity as at the end of the period

Return on current assets – the ratio of net profit to current assets as at the end of the period

As at 31 December 2024, the Group’s property, plant and equipment constitute 9% of total assets used in the Group’s

operations. Property, plant and equipment comprise primarily a newly constructed warehouse in China and land,

buildings and structures necessary for the Parent Company’s commercial activity.

As at 31 December 2024, right-of-use assets constituted 4% of the total balance sheet amount (6% in 2023). This item

consists mainly of the right of perpetual usufruct of land in Poland and China, rented office and warehouse space in

Poland and Romania, as well as cars, forklifts and servers under lease.

The structure of current assets used in the operations of TOYA S.A. Capital Group, which as at 31 December 2024

constitute 86% of total assets, includes primarily inventories and trade and other receivables, which is typical to the

business activity conducted by TOYA S.A. and its Capital Group. Both these items constitute in total 94% of current assets

as at 31 December 2024.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

Equity structure and debt ratios

31.12.2024

31.12.2023

Total debt ratio

38%

24%

Equity debt ratio

61%

32%

Long-term debt ratio

Short-term debt ratio

35%

19%

The ratio of coverage of non-current assets with equity

and long-term liabilities

451%

390%

Key:

Total debt ratio – the ratio of long- and short-term liabilities to total equity and liabilities

Equity debt ratio – the ratio of long- and short-term liabilities to equity

Long-term debt ratio – the ratio of long-term liabilities to total equity and liabilities

Short-term debt ratio – the ratio of short-term liabilities to total equity and liabilities

The ratio of coverage of non-current assets with equity and long-term liabilities – the ratio of total equity and long-term liabilities to non-current

assets

As at 31 December 2024, the main item in the Group’s equity was retained earnings totalling PLN 453,450 thousand.

The Group’s share capital as at 31 December 2024 amounted to PLN 7,504 thousand.

The main sources of financing operating activities, in particular current assets, include equity and short-term financing

– primarily from bank loans. As at 31 December 2024, the Group financed 62.2 % of its operations from equity. As of 31

December 2024, the Group financed its operations with equity in 62.2%. As of that date, the Group had debts under

bank loans amounting to PLN 33,840 thousand (as of December 31, 2023, the Group had no debts under such loans).

The long-term debt ratio as of 31 December 2024 amounted to 3%.

Group management effectiveness ratios

For 12 months ended 31 December

2024

2023

Inventories turnover period (days)

218

141

Receivables inflow period (days)

Liabilities repayment period (days)

Key:

Inventories turnover period (days) – the ratio of inventories as at the end of the period, multiplied by 360 days, to revenue from sales

Receivables inflow period (days) – the ratio of short-term trade and other receivables as at the end of the period, multiplied by 360 days, to

revenue from sales

Liabilities repayment period (days) – the ratio of trade and other liabilities as at the end of the period, multiplied by 360 days, to revenue from

sales

In 2024, the liabilities repayment period was longer than the receivables inflow period. This means that the Group

granted shorter trade credit to recipients than it received from suppliers itself. It implies higher demand for financing

of working capital. The inventory turnover period in 2024 increased to 218 days, mainly as a result of the lower volume

of purchases of goods made in 2024 as compared to 2023.

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

SEASONALITY

The Group's offer includes seasonal products. However, due to their limited value, a wide range of other products that

are in demand throughout the year, and due to the geographic diversity of the subsidiaries, there is no seasonality.

119

166

188

175

196

137

177

179

193

202

129

169

180

187

212

157

175

215

178

211

100

150

200

250

2020 2021 2022 2023 2024

PLN MLN

Quarterly sales in years2020-2024

1st quarter 2nd quarter 3rd quarter 4th quarter

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

4.2. OVERVIEW OF THE FINANCIAL RESULTS OF TOYA S.A.

Revenue and profitability of TOYA S.A. (PLN ‘000)

For 12 months ended 31 December

2024

2023

Sales revenue

627,541

571,836

Gross sales profit

192,667

164,193

Operating profit

69,888

68,972

Profit before tax

68,930

65,591

Net profit

55,653

52,895

In 2024, sales revenues amounted to PLN 627,541 thousand and were higher than revenues achieved in 2023 by PLN

55,705 thousand, i.e. by 9.7%. This increase was achieved mainly in the retail sales channel (e-commerce), where sales

were higher by PLN 32,425 thousand, i.e. by 66.8%. The main reason in this respect was the change in pricing policy

oriented towards increasing competitiveness, which affected the volume of orders from both individual customers and

business entities preferring online shopping. Increases were also recorded in the retail chain channel (by PLN 19,787

thousand, or 30.3%) and in the traditional channel (by PLN 12,149 thousand, or 4.8%). The export channel recorded a

lower level of sales (a decrease of PLN 8,656 thousand, i.e. by 4.2%), which was caused primarily by a lower volume of

sales to the subsidiary Toya Romania (a decrease in sales revenues of PLN 17,989 thousand). The reason for this change

was the further intensification of supplies to this company directly by subsidiaries in China, which serves to rationalize

costs within the Group. At the same time, the volume of sales to unrelated entities in this channel increased – the largest

increase in volume and revenues was achieved in Ukraine, where revenues amounted to PLN 46,967 thousand, an

increase of PLN 9,574 thousand (25.6%) compared to the previous year, and in Hungary (an increase of PLN 4,611

thousand, i.e. by 19.3%). A significant factor influencing the level of revenues was the high availability of goods.

627 541

192 667

69 888

68 930

55 653

571 836

164 193

68 972

65 591

52 895

0 100 000 200 000 300 000 400 000 500 000 600 000 700 000

SALES REVENUE

GROSS PROFIT ON SALES

OPERATING PROFIT

PROFIT BEFORE TAX

NET PROFIT

Revenue and profitability (PLN '000)

2024 2023

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

Gross profit on sales increased by PLN 28,474 thousand in 2024 as compared to 2023, which was influenced by higher

sales revenues, with slightly higher profitability compared to 2023 (30.7% compared to 28.7%), resulting from a change

in the sales structure between distribution channels (a larger share of the e-commerce channel, in which the company

achieves a higher margin than in other channels).

Operating profit in 2024, in the amount of PLN 69,888 thousand, was higher than the one achieved in 2023 by PLN 916

thousand, i.e. by 1.3%. The slight increase in operating profit compared to gross profit on sales was primarily due to

higher employee benefits costs, which was influenced by both the increase in the number of employees and the

increased demand for temporary workers supporting the work of warehouses during periods of increased deliveries. In

addition, the company incurred higher transport costs resulting from the volume of shipments, higher costs of servicing

online sales platforms and higher storage costs as a result of the use of logistics services in external warehouses. At the

same time, the company recorded a surplus of positive exchange rate differences over negative ones in the amount of

PLN 3,351 thousand compared to PLN 2,529 thousand in 2023.

In order to obtain the necessary working capital, the Company mainly uses short-term bank loans. Taking into account

the significant impact of financial costs related to these loans on the financial result, the Company negotiates the terms

of loan agreements every year so that the costs associated with them are as low as possible. In 2024, the Company used

bank loans to a lesser extent than in the previous year. Base interest rates remained unchanged compared to 2023. As

a result, the interest costs incurred on bank loans amounted to PLN 451 thousand and were lower by PLN 2,253

thousand as compared to the previous year.

Net profit in 2024 amounted to PLN 55,653 thousand and was by PLN 2,758 thousand, i.e. by 5.2% higher than in 2023.

Profitability ratios of TOYA S.A.

For 12 months ended 31 December

2024

2023

Sales profit margin

30.7%

28.7%

Operating profit margin

11.1%

12.1%

Pre-tax profit margin

11.0%

11.5%

Net profit margin

8.9%

9.3%

Key:

Sales profit margin – the ratio of gross profit to sales revenue

Operating profit margin – the ratio of operating profit to sales revenue

Pre-tax profit margin – the ratio of pre-tax profit to sales revenue

Net profit margin — the ratio of net profit to sales revenue

30,7%

11,1%

11,0%

8,9%

28,7%

12,1%

11,5%

9,3%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0%

SALES PROFIT MARGIN

OPERATING PROFIT MARGIN

PROFIT BEFORE TAX MARGIN

NET PROFIT MARGIN

Profitability

2024 2023

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

For the TOYA S.A., sales profit margin is the basic indicator of the Company's market competitiveness and has a decisive

impact on its financial situation. The analysis of this ratio for 2024 shows that the sales profit in this period increased by

2 percentage points as compared to 2023 This was due to both improved profitability in all distribution channels,

resulting from lower costs of purchasing goods due to favourable exchange rates, and a higher share of the e-commerce

channel in total sales revenues (an increase from 8.5% to 12.9%). The margin achieved in the e-commerce channel is

higher than in other distribution channels. Profitability indicators at the level of operating profit, pre-tax profit and net

profit decreased in 2024 compared to the previous year. The main adverse impact on profitability indicators was the

increase in the costs of employee benefits, transportation and online sales platform service.

Margin at the level of operating profit, profit before tax and net profit also increased in 2024 as compared to the

previous year. The main negative impact on the profitability ratios was the increase in the costs of employee benefits,

transportation and online sales platform operations.

Cash flows of TOYA S.A. (PLN ‘000)

For 12 months ended 31 December

2024

2023

Cash flows from operating activities

(29,076)

141,697

Cash flows from investment activities

(5,223)

(1,836)

Cash flows from financial activities

(7,106)

(92,133)

Change in net cash

(41,405)

47,728

Cash and cash equivalents at the beginning of the period

49,107

1,386

Cash and cash equivalents at the end of the period

7,711

49,107

In 2024, TOYA S.A. reported negative cash flows from operating activities of PLN 29,076 thousand. This was mainly due

to an increase in inventory levels in order to ensure very high availability of goods for customers. Inventories increased

by PLN 123,640 thousand. At the same time, short-term trade and other receivables increased by PLN 19,678 thousand

due to higher sales in December 2024 as compared to December 2023. Short-term trade liabilities also increased, mainly

as a result of liabilities to related parties for the purchase of goods (an increase by PLN 40,472 thousand).

In 2024, the Company began an investment related to strengthening the roof structure of the warehouse in Wrocław.

In addition, passenger cars were purchased in accordance with the terms of the lease agreement, which were then

partially resold. In addition, the Company, as in previous years, invested in IT equipment and display racks.

In 2024, the Company generated negative cash flows from financial activities in the amount of PLN 7,106 thousand. The

main direction of expenses was the repayment of liabilities from leasing in the amount of PLN 5,419 thousand, as well

as interest paid on bank loans and leasing in the amount of PLN 1,687 thousand. During the year, the Company used

financing from overdrafts, while there was no debt on this account at the beginning and at the end of the period.

The liquidity of TOYA S.A. Capital Group during the analysed period remained at the proper level. The Group’s net

working capital was positive, covering the demand arising from the volume of sales revenue. The ability to cover short-

term liabilities was correct.

Liquidity ratios

31.12.2024

31.12.2023

Current ratio

4.23

7.04

Quick ratio

0.66

2.02

Key:

Current ratio – the ratio of current assets to short-term liabilities

Quick ratio – the ratio of current assets less inventories to short-term liabilities

TOYA S.A. and TOYA S.A. CAPITAL GROUP

Report on operations for the period of 12 months ended 31 December 2024

_______________________________________________________________________________________

The current liquidity ratio decreased to 4.23 as of 31 December 2024, compared to 7.04 as of 31 December 2023. The

lower current liquidity ratio indicates a higher growth rate of liabilities relative to the growth rate of current assets.

The quick liquidity ratio as of 31 December 2024,