Kardan N.V.

Investor Presentation • Jun 19, 2023

General Meeting of Shareholders

AGENDA

• Cautionary note.
• Debt settlement summary.
• Key figures in 2022.
• Key developments in 2022.
• Kardan Land China (KLC).
• Tahal Group International (TGI).
• Financials.

Cautionary note

• The audit opinion as of December 31 2022, includes an emphasis of matter regarding the Company's ability to continue as a going concern.
• As of December 31 2022, the company has a working capital deficit of approximately €182M, Negative cash flow from operations of €12.2M, and Deficit of €54.7M in the equity attribute to the company's shareholders in the amount.
• There is a low probability of repaying the full debt by the end of 2024 to the debentures.
• Most of the debt repayment depends on a single property in China.
• There are ongoing difficulties in raising sources to finance the activities of the headquarters in 2023.
• The company has lean headquarters with limited budget.
• KLC
  • Operates in a challenging economic environment that will make it difficult to optimally execute its holdings.
  • Difficulty in realizing assets in the Joint Venture.
  • Permanent breach of the of the bank loan terms.
• TGI
  • The main subsidiary of TGI TCE ("Tahal"), is in insolvency proceedings since the beginning of January 2023.
  • The management of the company identified a material weakness in the implementation of internal controls regarding the financial reporting of the 2022 annual reports of TGI.
  • TGI (group of companies without Tahal) which is still subsidiary of Kardan, has a debt of €83M to Tahal. Kardan N.V. is not a guarantor for the repayment of any of those loans.
  • TGI and its Dutch subsidiaries are late in submitting most of their Dutch statutory reports.
  • Also, a third party submitted a request to appoint a trustee to TGI and its subsidiaries. the court has not yet given its decision.

Debt Settlement summary

• The Debt Settlement was finally completed on June 12 2022.
• As a result of the debt settlement a one-off profit in the amount of €429M was recorded in 2022.
• The main principles of the debt settlement are:
  • 1. Conversion of part of the Company's debt into shares allocated to the debenture holders, which constitute approximately 89.99% of the Company's issued and paid-in capital after the issuence.
  • 1. As of September 30 2020, the remaining balance of the debt after the conversion is NIS 725M for both series together.
  • 1. The entire debt will be repaid on December 31 2024, and bear an annual interest rate of 6.8% early repayment will bear additional fees.
  • 1. The company's new board of directors consists of 5 directors who were proposed by the trustees and elected, among others, by the Debenture Holders.
  • 1. To secure the debt settlement, the Company's assets are pledged. Further details of the Debt Settlement can be found in the Consolidated Financial Statements.

Key figuers in 2022

5

€ in million	2022	2021	2020
Real estate	(24.5)	(16.0)	(21.1)
Water Infrastructure	(36.9)	(41.0)	(25.7)*
Holding (Corporate G&A and finance)	384.1	(93.2)	(26.9)
Total net profit (loss) to equity holders	322.7	(150.2)	(73.7)*
Total Assets	260.8	346.5	379.0*
Total equity (deficit)	(69.4)	(389.9)	(255.5)*
Equity attributable to the equity holders	(54.7)	(375.8)	(245.7)*
Number of employees (as at year-end)	437**	499	618

* Retrospectively adjusted to reflect full consolidation of a former discontinued operation

** Including 297 employees working in the water infrastructure activities (TGI)

Key developments in 2022

• The profit attributable to equity holders of the Company in 2022 is amounted to €323M.
• The profit attributable to the Company's shareholders in 2022 is the result of a one-time profit from the debt settlement in the amount of €430M.
• As a result, as of December 31 2022, the deficit in shareholders' equity of Kardan N.V. decreased from €376M in 2021, to €54.7M.
• Real estate segment
  • The rental revenues of the shopping mall amounted to €9.8M in 2022 and generated an operating profit of €5.4M.
  • The impairment of the value of the shopping mall in the amount of €24.8M resulted in a net loss to the investment property segment of €19.5M in 2022.
  • Revenues from the development segment decreased in 2022 and amounted to €3.1M compared to €17.7 million in 2021. In light of the slowdown in the joint venture residential projects, an impairment of the value of an investment in a joint venture amounting to €4.8M, generating an operating loss for the development segment in the amount of €0.5M in 2022.
  • As a result of the impairments of the value of the investment property and the investment in the joint venture projects in a total amount of €28.8 million, the total real estate operations reported a loss in the amount of €24.5M.

Key developments in 2022 (cont.)

▪ Water Infrastructure segments

• The water infrastructure activity continued to record significant losses In 2022 as revenues of TGI decreased to €81.5M.
• A decrease was recorded in the gross loss of €16.9M in 2022, mostly due to higher provisions for losses, including provisions for bad debts and impairments of work in progress.
• Financing expenses of the water infrastructure activities amounted to €9.5M, as the total net loss attributable to the equity holders of the Water Infrastructure activities amounted to €36.9M in 2022.

Kardan Land China

Real Estate Highlights – 2022

• Developments
  • The slowdown in the real estate market in China, as well as the impact of the Corona crisis in 2022, had a negative impact on the results of the development real estate segment.
  • In 2022, revenue from the sale of apartments (the handover of apartments in the Europark Dalian project) amounted to €3.1M and was impacted by a decrease in selling prices of the apartments following the COVID-19 crisis.
  • The results of the Real Estate development segment amounted to a profit of €0.5M in 2022 as a result of the lower number of apartments delivered in in the Europark Dalian project and in the joint venture residential projects.
• Investment properties
  • Revenues of the Investment Property segment remained stable at €9.8M in 2022. the profit from operations of the investment property segment came in at €5.4M in 2022.
  • The external valuation of the Galleria Dalian Mall as of December 31, 2022, included changes in market conditions. The impairment of the value of the shopping mall amounts to €24.8M in 2022, bringing the investment property to the value of €144M compared to €172M in 2021.

(in €thousands)	31 Dec 2022	31 Dec 2021
Real Estate – Development
Share of JVs investment in	40,856	44,661
Inventory	5,256	7,447
Real Estate – Investment Property
Investment Property	143,880	172,168
Cash & short-term investments	10,737	11,479
Total Assets	261,691	298,392
Loans and Borrowings	57,595	62,393
Advance payments from buyers	3,334	3,058
(Real Estate – Development)
Total Equity	168,620	197,256

Tahal Group International

TGI update

• On January 16 2023, TCE ("Tahal"), the main subsidiary of TGI, filed a motion with the Israeli court opening an Insolvency proceeding. On January 26 2023, the court issued a stay order (retroactively since January 18, 2023), suspending all proceedings against Tahal for 60 days and appointed a settlement manager to the company.
• According to a legal opinion received by the company, starting from January 18 2023, Kardan N.V. lost control of TCE.
• Accordingly, starting from Q1 2023, the Kardan N.V. no longer consolidates TCE's financial statements in its consolidated financial statements.
• The court extended the delay of procidngs order in several decisions and it currently extended until it until July 2 2023.
• The settlement manager is working together with the company's management to formulate a creditor arrangement mainly with the Israeli banks.
• On February 2023, a third party filed a motion initiating insolvency proceedings to appoint a trustee for TGI and one of its subsidiaries. As of this date, no court decision has yet been given in this matter.
• The Board of Directors of Kardan NV, in coordination with the bond holders' representatives, before TCE started the insolvency proceedings, requested to examine the decrease of value of Tahal as reflected from the sale processes starting in mid 2019. For this purpose, the BOD hired the services of EY to prepare a report on the matter.

Financials

Summary of results - 2022

(in € thousands)	2022	2021
Total revenues	94,383	129,028
Total expenses	(118,742)	(149,932)
Profit (loss) from before fair value adjustments and disposal of operations assets	(24,359)	(20,904)
from fair Loss value adjustments	(24,830)	(29,187)
Profit (loss) from disposal of assets and and other (expense), investments income net	(3,890)	(5,276)
Result from operations before finance expenses	(53,079)	(55,367)
Profit from debt settlement	429,277
Financing expenses, net	(56,773)	(105,234)
Equity earnings, net	(1,987)	9,111
Profit (loss) before income tax	317,438	(151,490)
Income tax expenses / (benefit)	(4,359)	(900)
Profit (loss) for the period	321,797	(150,590)
Attributable to:
Net result for holders equity	322,712	(150,158)
Non-controlling interests	(915)	(432)
	321,797	(150,590)
Other Comprehensive (expense) income Total Comprehensive income (expense) attributable to Kardan equity holders	(1,895) 320,817	16,458 (133,700)

Thank you

Disclaimer

This presentation has been prepared on behalf of Kardan N.V. solely for information purposes. It is not an investment advice or an offer or solicitation for the purchase or sale of any financial instrument. While reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the date of the presentation, Kardan N.V. makes no representation that it is accurate or complete. The information contained herein is subject to change without notice. Neither Kardan N.V. nor any of its officers or employees accepts any liability for any direct or consequential loss arising from any use of this presentation or its contents. Copyright and database rights protection exist in this presentation and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of Kardan N.V. All rights are reserved.