ADF Group Inc.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

OF THE FINANCIAL POSITION AND OPERATING RESULTS

FISCAL YEAR ENDED JANUARY 31, 2026

Terrebonne, Quebec, Canada
April 15, 2026

Toronto Stock Exchange
TSX / DRX

TABLE OF CONTENTS

GENERAL 3
FORWARD-LOOKING STATEMENTS 3
GENERAL OVERVIEW 3
COMMERCIAL POSITIONING 2
MARKET TRENDS 2
SIGNIFICANT EVENTS OF THE FISCAL YEAR ENDED JANUARY 31, 2026 2
SIGNIFICANT EVENTS OCCURED SINCE JANUARY 31, 2026 4
EXCHANGE RATE 4
BUSINESS COMBINATION 4
U.S. TARIFFS 5
NON-IFRS FINANCIAL MEASURES AND OTHER FINANCIAL MEASURES 5
SELECTED ANNUAL FINANCIAL INFORMATION 7
ANALYSIS OF OPERATING RESULTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2026 7
COMMENTS ON QUARTERLY RESULTS 10
CASH FLOWS AND FINANCIAL POSITION 11
CAPITAL STOCK 14
SHARE-BASED COMPENSATION 14
DIVIDENDS 17
ORDER BACKLOG 17
FINANCIAL POSITION 17
CURRENT ECONOMIC ENVIRONMENT 18
RELATED PARTY TRANSACTIONS 18
EXTERNAL FACTORS TO WHICH THE CORPORATION'S PERFORMANCE IS EXPOSED 19
FINANCIAL INSTRUMENTS 20
ASSESSMENT OF THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES, AND INTERNAL CONTROL OVER FINANCIAL REPORTING 20
DISCLOSURE AND INSIDER TRADING POLICIES 21
MATERIAL ACCOUNTING POLICIES, UNCERTAINTY RELATING TO ESTIMATES AND CRITICAL ACCOUNTING JUDGMENTS 21
ENVIRONMENT 21
SUSTAINABLE DEVELOPMENT 22
HUMAN RESOURCES 22
OUTLOOK 22
ADDITIONAL INFORMATION 23

FORWARD-LOOKING STATEMENTS

Management of ADF Group Inc. wishes to inform the reader that this document contains forward-looking statements within the meaning of applicable securities laws, in which Management's expectations regarding ADF Group Inc.'s future performance may be discussed. These forward-looking statements include information concerning ADF Group's probable or foreseeable future operating results and financial position and involve certain risks and uncertainties with regard to their future realization. These forward-looking statements are based on currently available data in regard to competition, financial position, economic conditions and operating plans.

The principal risks and uncertainties that could affect ADF Group Inc.'s results, such that those results could differ materially from those expressed in any forward-looking statements, are presented in Sections Current Economic Environment and External Factors to Which the Corporation's Performance is Exposed of the Management's Discussion and Analysis of the Financial Position and Operating Results (hereinafter "MD&A Report") for the fiscal year ended January 31, 2026.

MANAGEMENT'S DISCUSSION & ANALYSIS REPORT OF THE FINANCIAL POSITION & OPERATING RESULTS

GDF Group Inc.

1. GENERAL

The purpose of this management's discussion and analysis report of the financial position and operating results (hereinafter "MD&A Report") is to provide the reader with an overview of the changes in the financial position of ADF Group Inc. (hereinafter ADF, ADF Group or the Corporation) between February 1, 2025, and January 31, 2026. It also compares the operating results and cash flows for the fiscal year ended January 31, 2026, to those of the same the previous fiscal year. This MD&A Report also covers all major events that occurred between February 1, 2026, and April 15, 2026.

This MD&A Report should be read in conjunction with the Corporation's consolidated financial statements and the notes thereto for the fiscal year ended January 31, 2026. The consolidated financial statements and the comparative information have been prepared in accordance with the International Financial Reporting Standard (IFRS) issued by the International Accounting Standards Board (IFRS Accounting Standards). The material accounting policies applied by ADF in accordance with IFRS are presented in Note 2 to the Consolidated Financial Statements for the fiscal year ended January 31, 2026.

The Corporation reports its results in Canadian dollars. All amounts in this MD&A Report are expressed in Canadian dollars, except where otherwise indicated.

2. FORWARD-LOOKING STATEMENTS

In order to provide shareholders and potential investors with additional information about ADF, including management's assessment of future projects and operations, certain statements in this MD&A constitute forward-looking statements. These forward-looking statements include, among other things, information about ADF's likely or foreseeable future operating results and financial position, as well as statements regarding the acquisition of Groupe LAR inc.

Forward-looking statements are subject to risk factors, uncertainties, and other important factors that may cause the Corporation's actual performance to differ from that indicated or implied by these forward-looking statements. These factors include, but are not limited to: the impact of economic conditions in Canada and the United States; industry conditions, including amendments to laws and regulations; increased competition; a potential shortage of qualified personnel or management; the availability and fluctuations in commodity prices; changes in foreign exchange or interest rates; stock market volatility; and the impact of accounting policies established by Canadian, U.S., and international standard-setting authorities; as well as in the case of statements regarding the acquisition of Groupe LAR inc. Some of these factors are described in more detail in Section 23 External Factors Affecting the Corporation's Performance of this MD&A Report. It should be noted that the list provided in this MD&A Report of factors that may affect future growth, results, and performance is not exhaustive, and readers should not place undue reliance on forward-looking statements.

The expectations expressed in forward-looking statements are based on information available to the Corporation at the time such forward-looking statements were made. However, there can be no assurance that these expectations will prove to be correct. All subsequent forward-looking statements, whether written or oral, by the Corporation or anyone acting on its behalf, should be expressly considered in light of the foregoing cautionary statements. Unless required to do so by applicable securities laws, the Corporation expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3. GENERAL OVERVIEW

From a blacksmith shop founded in 1956, ADF Group has become over the years a North American leader in the design and engineering of connections, fabrication, including industrial coating, and installation of complex steel structures, heavy steel built-up components, as well as miscellaneous and architectural metalwork.

Since September 2025, through its Canadian subsidiary Groupe LAR inc., the Corporation has been engaged in machining, welding and industrial mechanics and offers design, fabrication and installation services for mechanically welded steel structures, mainly for the Canadian hydroelectric market, as well as custom overhead crane solutions for heavy industry.

The Corporation's products and services are intended for the non-residential construction industry including office towers and high-rises, commercial and recreational buildings, airport facilities, industrial complexes, transport infrastructure and hydroelectric facilities.

The Corporation uses the latest technologies in its industry and operates three (3) fabrication plants and three (3) industrial coating shops.

ADF Group's complex located in Canada houses the Corporation's head office, the 58,530-square-meter (630,000 square feet) fabrication plant, which includes the 3,900 square-meter (42,000 square feet) paint shop. ADF's complex in the United-States is home to the 9,290-square-meter (100,000 square feet) fabrication plant, the 60-acres pre-assembly yard and the 4,460-square-meter (48,000 square feet) dual-purpose building, adjacent to the fabrication plant, housing a 2,323-square-meter (25,000 square feet) paint and blast zone, and a 2,137-square-meter (23,000 square feet) area for preparation and detailing work. Groupe LAR inc., the Corporation's Canadian subsidiary since September 2025, operates a 6,970-square-metre (75,000 square feet) plant.

A pioneer in the development and implementation of innovative solutions, ADF Group is recognized for its engineering expertise, its project management, its important fabrication capacity and its skills in two specialized market niches: the fabrication of steel superstructures with a high level of architectural and geometric complexity, and projects subject to fast-track schedules. ADF Group's commitment to deliver every project in accordance with the industry's highest quality standards constitutes a core aspect of the Corporation's mission.

4. COMMERCIAL POSITIONING

ADF Group serves a diversified client base in the non-residential construction market in Canada and the United States, including general contractors, project owners, engineering firms and project architects, structural steel erectors, and other steel structure fabricators.

5. MARKET TRENDS

The non-residential construction industry includes the products and services related to the construction of commercial, institutional and industrial buildings, such as office towers, commercial buildings, hotels, sports complexes, museums, recreational complexes, as well as manufacturing plants and other industrial facilities. This sector also encompasses public works, including the construction and renovation of infrastructure and buildings, notably, hydroelectric dams, airports, bridges and overpasses. It should be noted that the demand in this sector is related to business cycles. Generally, there are more private projects in a bull cycle, whereas government projects take over in a bear cycle.

According to Management, approximately half of the non-residential projects use structural steel as a structural component, while the other half primarily uses concrete. Generally, structural steel accounts for about 10% to 20% of a project's total cost, depending on the project's nature. Structural steel offers a number of advantages when compared to other materials, which explains its increasing use in the construction of complex structures. These advantages include durability, speed of installation, greater flexibility in fast-track projects, lower installation and maintenance costs, as well as its high strength/weight ratio as a result of improved alloys.

Generally, there are more complex steel structure projects in the United States than in Canada, which can result in a certain dependence of the Corporation on the U.S. market.

Although the Architectural Billing Index (ABI) continues its downward trend that began several months ago, the markets served by ADF remain buoyant. However, although several projects are under discussion, the uncertainty related to U.S. tariffs remains a deterrent to signing contracts, especially for U.S. contracts that would normally be carried out at our plant in Terrebonne, Canada.

Nonetheless, and as we did on January 30, 2026 (see Section 6.2 New contracts of this MD&A Report), we are able to continue to grow our order backlog with new projects for our plant located in Great Falls, Montana, U.S.A., and also with the addition of new contracts for Groupe LAR Inc., the Corporation's subsidiary situated in Métabetchouan-Lac-à-la-Croix, Quebec, Canada.

Tariffs will continue to slow down the signing of contracts on U.S. soil, but we are confident that the new markets that are opening up for ADF following the acquisition of Groupe LAR Inc., including the market for hydroelectric projects, will allow our Corporation to continue the overall growth of the order backlog.

6. SIGNIFICANT EVENTS OF THE FISCAL YEAR ENDED JANUARY 31, 2026

6.1 U.S. Tariffs on Steel

At the beginning of the Corporation's fiscal year ended January 31, 2026, the President of the United States issued executive orders directing the United States to impose new tariffs on imports from Canada, Mexico, China, and other countries. It is unclear whether and when the changes to the current tariffs will be applied and whether other factors will allow all or part of the tariffs to be passed on to the market (see Section 10 U.S. Tariffs in this MD&A Report).

6.2 New Contracts

On February 26, 2025, the Corporation announced a series of new orders in Quebec and the United States for a total value of $120.0 million. The largest of this series of new orders consists in the fabrication and installation of steel structures and heavy steel components as part of a major renovation program for a sports complex in the Western U.S.A. This series of new orders also includes contracts for various steel structures in the recreational sector also in the Western U.S.A., as well as in Quebec for a major client for which ADF has completed various other contracts in recent months and years.

ADF Group Inc. | Fiscal 2026 MD&A Report

On July 23, 2025, the Corporation announced the signing of a major five (5) year contract, valued between $35.0 million and $40.0 million per year, for the supply, fabrication and delivery of steel structures, as part of a new infrastructure project in the energy sector, in Quebec. This contract also includes an option to extend it another five (5) years. At maturity, and including the inflation clauses, this major contract could total close to $400.0 million.

On January 30, 2026, the Corporation announced the signing of a series of new orders in Quebec, Ontario and the U.S. West Coast states for a total of $140.0 million. These new projects call on ADF's expertise in the fabrication and installation of various steel structures that vary in terms of complexity, that are part of new construction projects in the public transportation, commercial, industrial and manufacturing sectors, as well as in the hydroelectric sector in Quebec. ADF's plants in Terrebonne, Quebec and in Great Falls, Montana, U.S.A., as well as Groupe LAR Inc.'s plant in Métabetchouan-Lac à la Croix, Quebec, acquired by ADF in September 2025, will be involved in carrying out these new contracts. Fabrication work for all these new contracts will begin in June 2026, with the majority expected to run until the end of 2027.

6.3 Dividends

On April 9, 2025, the Corporation's Board of Directors approved a semi-annual dividend of $0.02 per share, paid on May 15, 2025, to Shareholders of Record as at April 24, 2025.

On September 10, 2025, the Corporation's Board of Directors approved a semi-annual dividend of $0.02 per share, paid on October 16, 2025, to Shareholders of Record as at September 26, 2025.

6.4 Normal Course Issuer Bid (NCIB)

In May 2025, the Corporation repurchased and cancelled an additional 350,485 Subordinate Voting Shares, thus reaching the authorized limit for the NCIB, for a total repurchase of 1,770,707 Subordinate Voting Shares.

As a reminder, in December 2024, with the approval of the Toronto Stock Exchange and the Autorité des marchés financiers (AMF), the Corporation's Board of Directors authorized the Corporation to implement an NCIB to repurchase Subordinate Voting Shares in the normal course of business. The Corporation planned to repurchase for cancellation, between December 16, 2024, and December 15, 2025, up to 1,770,707 Subordinate Voting Shares, representing approximately 10% of the shares held by the public as at December 2, 2024.

6.5 Work Sharing Program

Given the projects in the pipeline and the fabrication schedule, the Corporation has applied and received authorization from Service Canada to implement a Work-Sharing program for some of its employees at its fabrication plant in Terrebonne, Quebec. The program came into effect on April 21, 2025, and allowed some employees to benefit from the Employment Insurance program to compensate for reduced working hours. This program received the unionized employees' approval. This program allowed ADF to closely manage its costs. As a result, approximately 200 employees saw their working hours reduced between 50% and 60%; hours that were be compensated by the government program.

As of the date hereof and since July 14, 2025, all employees affected by this program have resumed their normal work hours.

6.6 Nuclear Certification CSA N299, Category 2

In July 2025, the Corporation obtained the CSA N299 Category 2 nuclear certification for its complex in Terrebonne, Quebec. This certification provides ADF access to the Canadian nuclear sector, a highly specialized market segment.

6.7 Agreement to Acquire Groupe LAR inc. and Certain of its Subsidiaries.

On September 2, 2025, the Corporation announced that it had entered into an agreement (the "Agreement") to acquire (the "Transaction") Groupe LAR inc. and certain of its subsidiaries (collectively, the "Groupe LAR"), subject to, among other things, approval by the Superior Court of Québec (Commercial Division) (the "Court").

Established in 1942 and based in Métabetchouan-Lac-à-la-Croix, in the Saguenay-Lac Saint Jean region, in Quebec, the Groupe LAR operates in the machining, welding, and industrial mechanics sectors. The Groupe LAR is a Canadian leader in the design, manufacture and installation of mechanically welded steel structures. Primarily focused on the rapidly expanding large-scale hydroelectricity market, the Groupe LAR also offers customized overhead crane solutions for the heavy industry. The Groupe LAR generated $80.9 million in revenue for the fiscal year ended December 31, 2024, and had an order backlog of $104.5 million as at July 31, 2025, which should be progressively carried out before the end of ADF's fiscal year ending January 31, 2027.

The Transaction was completed by way of a reverse vesting order to be sought from the Court in connection with Groupe LAR's restructuring proceedings, pursuant to the Companies' Creditors Arrangement Act (Canada) and conducted under the supervision of the Court and a Court appointed Supervisor.

ADF Group Inc. | Fiscal 2026 MD&A Report

6.8 Acquisition of Groupe LAR inc.

On September 18, 2025, the Corporation announced the closing of the acquisition of Groupe LAR, in Métabetchouan-Lac à la Croix, Quebec (see Section 9 Business Combination).

SIGNIFICANT EVENTS OCCURRED SINCE JANUARY 31, 2026

7.1 New Contracts

On April 9, 2026, the Corporation announced the signing of new contracts in Quebec and in the United States worth $157.3 million. The largest of this series of new contracts, in terms of value and duration, is for the fabrication and delivery of various heavy steel structures for a project in the hydroelectric sector in Quebec. This project is a 4-year master contract. Fabrication work on this contract will begin soon at Groupe LAR's plant in Métabetchouan-Lac à la Croix, Quebec.

The other contracts announced at that date consisted in the fabrication of various steel structures for projects in the transportation infrastructure sector and for new commercial buildings in western U.S.A. ADF's plants in Terrebonne, Quebec and in Great Falls, Montana will be involved in carrying out these new contracts.

7.2 Dividend

On April 15, 2026, the Corporation's Board of Directors approved the payment of a semi-annual dividend of $0.02 per share, which will be paid on May 15, 2026 to Shareholders of Record as of April 27, 2026.

EXCHANGE RATE

The Corporation is subject to foreign currency fluctuations from the translation of revenues, expenses, assets and liabilities of its foreign operations and from commercial transactions denominated in foreign currencies. Average monthly rates (considered a reasonable approximation to actual rates at the date of transactions) are used to translate revenues (except for foreign exchange forward contracts) and expenses for the periods mentioned, while closing rates translate assets and liabilities.

During the fiscal year ended January 31, 2026, and during the previous fiscal year, the Corporation applied the following exchange rates between the Canadian and U.S. dollars:

($CA/$US)	Consolidated Statements of Income and Comprehensive Income				Consolidated Statements of Financial Position
	Quarterly		Cumulative
	Fiscal 2026	Fiscal 2025	Fiscal 2026	Fiscal 2025	Fiscal 2026	Fiscal 2025
First quarter (April 30)	1.4213	1.3575	1.4213	1.3575	1.3812	1.3746
Second quarter (July 31)	1.3741	1.3696	1.3971	1.3636	1.3844	1.3809
Third quarter (October 31)	1.3879	1.3656	1.3941	1.3643	1.4018	1.3916
Fourth quarter (January 31)	1.3873	1.4208	1.3924	1.3783	1.3562	1.4484
Annual averages	1.3924	1.3783

The Canadian dollar lost value against the U.S. dollar based on an annual average. However, the trend reversed in the quarter ended on January 31, 2026, as well as for the closing rate.

Although the Corporation enters into foreign exchange contracts from time to time and according to its internal policy in order to hedge the foreign exchange risk, these exchange rate variations have had a positive impact of $2.3 million on the gross margin for the fiscal year ended January 31, 2026, and generated a foreign exchange gain of $2.1 million on the Consolidated Statement of Income for the same period.

BUSINESS COMBINATION

Acquisition of the Shares of Groupe LAR inc. and Part of its Subsidiaries

On September 18, 2025, the Corporation acquired the shares of Groupe LAR, a Quebec company based in Métabetchouan-Lac-à-la-Croix, in the Lac-Saint Jean region of Quebec, which operates in the machining, welding and industrial mechanics sectors. Groupe LAR is a Canadian leader in the design, manufacture and installation of mechanically welded steel structures.

The consideration paid by ADF consists of a purchase price of $20.1 million, including a $1.4 million closing adjustment related to certain working capital adjustments, paid as follows: (i) $16.4 million in cash, including the closing adjustment, and (ii) the issuance of 449,944 of the Corporation's Subordinate Voting Shares, representing the equivalent of $3.7 million in the Corporation's Subordinate Voting Shares, at a rate of $8.21 per share, representing the closing price, on the day preceding the closing date. ADF paid the cash consideration using its available cash.

ADF Group Inc. | Fiscal 2026 MD&A Report

This businesses acquisition contributed $20.0 million to the Corporation's revenues and $0.2 million to its net income for the period from the acquisition date to the end of the fiscal year.

If the acquisition had occurred on February 1, 2025, at the beginning of the Corporation's fiscal year, on a pro forma basis, the acquired businesses would have generated $46.9 million in revenues for the 12-month period ended January 31, 2026. Given the size and nature of this acquisition, the available financial information does not accurately reflect the pro-forma net income of the acquired businesses as if the Corporation had completed these acquisitions at the beginning of its fiscal year.

Furthermore, Groupe LAR and its subsidiaries have not been operating under normal business conditions since the beginning of 2025, which has significantly impacted Groupe LAR's financial performance and results. Now that the transaction is complete and the financial outlook for Groupe LAR and its subsidiaries is clearer for its customers and suppliers, the Corporation anticipates a return to financial normalcy within the next few months.

Finally, the financial results of Groupe LAR and its subsidiaries do not include any potential synergies that could materialize in the coming quarters (see Note 4 to the Financial Consolidated Statements as at January 31, 2026).

10. U.S. TARIFFS

In recent months, the tariff measures put in place by the US authorities have been marked by frequent and sometimes unpredictable developments. In this context, and now that the official documents have been published and interpreted by the Corporation's customs experts, Management has a clearer view of the different impacts of these tariffs.

The products exported by ADF comply with the requirements of the Canada-United States-Mexico Agreement (USMCA). As a result, they are only subject to the specific steel tariffs, set at 50% by U.S. Government Proclamation 10896. These duties only apply if the raw materials used are not smelted and poured in the United States.

However, ADF generally obtains steel from mills located in the United States and has done so for several years. Thus, when this condition is met, ADF's exports are exempt from these duties, allowing the Corporation to maintain its competitiveness in the U.S. market.

As such, ADF's recent decline in revenues is mainly due to the disruptions caused by the rates announcement and implementation process, which have had wide-ranging effects across the industry.

At the same time, the Canadian government introduced countermeasures in the form of surtaxes on steel imports from the United States. However, these surcharges are recoverable upon exports. To facilitate the management of these costs for manufacturers, a remission order has been issued, allowing for immediate relief from these surtaxes at the time of import.

Finally, these tariffs have an indirect impact on our Corporation's fabrication costs, which are due to the increase in steel prices. This increase has and will naturally have an impact on ADF's gross margins. On the other hand, all steel fabricators, like ADF, are and will be subject to these same cost increases.

11. NON-IFRS FINANCIAL MEASURES AND OTHER FINANCIAL MEASURES

This MD&A Report is based on results prepared in accordance with IFRS Accounting Standards and includes non-IFRS financial measures and other financial measures. Non-IFRS financial measures provide useful additional information, but do not have standardized meanings established in accordance with IFRS. Readers should be careful not to confuse or substitute them with performance measures prepared in accordance with IFRS. In addition, readers should avoid comparing these non-IFRS financial measures to similarly titled measures provided or used by other issuers. When such indicators are presented, they are defined, and the reader is notified.

The Corporation uses the following indicators to measure its operating performance and the achievement of objectives:

Fiscal years ended January 31,	2026	2025
Non-IFRS financial measures
Adjusted earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) (in thousands of dollars)	$43,501	$91,289
Adjusted EBITDA margin (as a percentage of revenues)	16.8%	26.9%
Supplementary financial measures
Gross margin (as a percentage of revenues)	23.1%	31.6%
As at January 31,	2026	2025
---	---	---
Supplementary financial measures
Working capital (in thousands of dollars)	$104,799	$109,194
Working capital ratio	2.21 : 1	2.36 : 1
Order backlog (in thousands of dollars)	$561,087	$293,105

ADF Group Inc. | Fiscal 2026 MD&A Report

11.1 Adjusted EBITDA and Adjusted EBITDA Margin

The adjusted EBITDA and the adjusted EBITDA margin show the extent to which the Corporation generates profits from operations, without considering the following items:

Net financial expenses;
Income tax expense;
Fees related to business combination;
Foreign exchange gain or loss, and
Amortization of property, plant and equipment, intangible assets and right-of-use assets.

Net income is reconciled with adjusted EBITDA in the following table:

Fiscal years ended January 31,	2026	2025
(In thousands of dollars and in percentage)	$	$
Net income	26,311	56,790
Income taxes expense	9,482	21,617
Net financial expenses	827	1,116
Amortization	6,920	6,160
Fees related to business combination	2,109	—
Foreign exchange (gain) loss	(2,148)	5,606
Adjusted EBITDA	43,501	91,289
— As a % of revenues (1)	16.8%	26.9%

(1) The adjusted EBITDA margin results from dividing adjusted EBITDA by revenues.

Adjusted EBITDA for the fiscal year ended January 31, 2026, went down by $47.8 million. This decrease, as explained below, is mainly attributable to the decrease in net income during the fiscal year.

Adjusted EBITDA for the fiscal year ended January 31, 2025, increased by $35.4 million or 63.2% compared to the previous fiscal year. This increase was due to the increase in gross margin recorded in fiscal 2025.

11.2 Gross Margin as a Percentage of Revenues

The gross margin as a percentage of revenue indicator is used by the Corporation to assess the level of profitability for a given period based on the project mix for that same period. This indicator is subject to fluctuations in project prices and also in the operational efficiency of the Corporation. The indicator of gross margin as a percentage of revenues results from dividing gross margin by revenues.

In general, the Corporation aims to improve this indicator but recognizes that its fluctuation depends on the type of project signed and several other factors, including the economic context.

11.3 Working Capital and Working Capital Ratio

The working capital indicator is used by the Corporation to assess whether current assets are sufficient to meet current liabilities. Working capital is equal to current assets, less current liabilities, whereas the working capital ratio is calculated by dividing current assets by current liabilities.

Generally, Management's goal is to achieve a working capital ratio of at least 2.0:1. As at January 31, 2026, this ratio has exceeded this goal. The Corporation establishes the achievement of this goal on the pursuit of its strategy focusing on the execution of contracts generating positive cash flows throughout their execution.

However, the Corporation also recognizes that the growth of its order backlog adds some pressure on working capital, thus explaining the level of this ratio in relation to the Corporation's long-term objective. It should be noted that the drawing up and/or revision of this corporate goal depends on several factors, such as the economic context and development projects that might materialize.

11.4 Order Backlog

The order backlog is a measure used by the Corporation to assess future revenue levels. The order backlog includes firm orders obtained by the Corporation, either through a firm contract or a formal notice to proceed confirmed by the client. The order backlog disclosed by the Corporation therefore includes the portion of confirmed contracts that have not been put into production.

In general, the Corporation aims to improve this indicator but recognizes that its fluctuation is dependent on several factors, including the economic context.

ADF Group Inc. | Fiscal 2026 MD&A Report

12. SELECTED ANNUAL FINANCIAL INFORMATION

Fiscal years ended January 31,	2026	2025	2024
(In thousands of dollars and dollars per share)	$	$	$
Revenues	258,736	339,632	331,023
Net income	26,311	56,790	37,622
— Per share, basic and diluted	0.93	1.84	1.15
Total assets	328,675	307,897	328,605
Non-current liabilities	58,303	58,215	60,999
Dividend per share	0.04	0.03	0.02

Revenues for the fiscal year ended January 31, 2026, totaled $258.7 million, recording a decrease of $80.9 million over the fiscal year ended January 31, 2025.

Net income posted a decrease of $30.5 million in the fiscal year ended January 31, 2026, compared with the fiscal year ended January 31, 2025, in line with the decrease in revenues and gross margins.

Total assets for the fiscal year ended January 31, 2026, went up by $20.8 million compared with the fiscal year ended January 31, 2025. This increase includes the impact from the consolidation of Groupe LAR's assets following the acquisition finalized in September 2025.

13. ANALYSIS OF OPERATING RESULTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2026

During the 12 months of operations between February 1, 2025, and January 31, 2026, the Corporation pursued its activities consisting of the design and engineering of connections, fabrication, including industrial coating, and installation of complex steel structures and heavy steel components, in Canada and the United States.

13.1 Revenues and Gross Margin

Fiscal years ended January 31,	2026	2025	Annual variations
(In thousands of dollars and in percentage)	$	$	$	%
Revenues	258,736	339,632	(80,896)	(23.8)
Cost of goods sold	198,964	232,391	(33,427)	(14.4)
Gross margin	59,772	107,241	(47,469)	(44.3)
— As a % of revenues (1)	23.1%	31.6%		(8.5)

(1) Gross margin as a percentage of revenues is a supplementary financial measure. Refer to the Section 11 Non-IFRS Financial Measures and Other Financial Measures hereinabove for definition of this metric.

13.1.1 Revenues

Revenues for the fiscal year ended January 31, 2026, totalled $258.7 million, a $80.9 million decrease compared with the fiscal year ended January 31, 2025.

The variation in revenues was mainly explained by the uncertainty related to U.S. tariffs (see Section 10 U.S. Tariffs hereinabove). For the fiscal year ended January 31, 2026, Groupe LAR's acquisition (see Section 9 Business Combination) generated revenues of $20.0 million since September 18, 2025.

In addition, the variation in the exchange rate during the 2026 fiscal year had a positive impact of $3.6 million on revenues.

Although the Corporation's order backlog (1) is more than adequate, exceeding $560 million as at January 31, 2026, the uncertainty surrounding the U.S. tariffs has caused a non-recoverable delay in fabrication hours, mainly at ADF's Terrebonne plant, in Quebec. As such, and as previously mentioned (see Section 6.5 Work-Sharing Program above), a work-sharing program was implemented at ADF's plant in Terrebonne, Quebec and remained in place for virtually the entire quarter ended July 31, 2025, thus reducing fabrication hours and consequently revenues for the same quarter and to date.

(1) The order backlog is a supplementary financial measure. Refer to Section 11 Non-IRFS Financial Measures and Other Financial Measures hereinabove for the definition of this metric.

Revenues are recognized progressively based on costs incurred to date relative to the total estimated costs at completion on the various projects executed by the Corporation during the periods concerned.

In terms of economic dependency, 74% of the Corporation's revenues during the fiscal year ended January 31, 2026, were realized with two (2) clients, each representing 10% or more of the Corporation's revenues (78% of the Corporation's revenues was realized with two (2) clients for the fiscal year ended January 31, 2025).

The following table presents the breakdown of revenues for each of these clients:

Fiscal years ended January 31,	2026 (1)	2025 (1)
(In thousands of dollars)	$	$
Client A	128,412	170,351
Client B	62,423	—
Client C	—	93,383
	190,835	263,734

(1) From the United States

Although the Corporation attempts to limit the concentration of its revenues, given the nature of its activities and market, its revenues are likely to remain concentrated among a restricted number of clients in upcoming quarters.

13.1.2 Gross Margin

Gross margin, in dollar, decreased by $47.5 million in the fiscal year 2026 compared with the previous fiscal year.

Gross margin, as a percentage of revenues (1), went from 31.6% during the fiscal year ended January 31, 2025, to 23.1% during the fiscal year ended January 31, 2026. This decrease in margins is in line with the decrease in revenues and is also explained by the impact of the U.S. tariffs.

As explained previously, the decrease in revenues required ADF to implement a work-sharing program at its Terrebonne plant. This program has allowed the Corporation to mitigate the negative impacts of the decrease in fabrication hours, as explained earlier, but not entirely. Tariffs also had an indirect negative impact on the Corporation's margins; Impact which is caused by the increase in the price of steel set by the U.S. steel mills.

Given the exemptions in place and the fact that the Corporation was able to pass on the negative impact of a significant portion of these tariffs directly to its customers; these tariffs had a limited direct impact on the Corporation's margins for the fiscal year ended January 31, 2026.

Finally, the acquisition of Groupe LAR, effective September 18, 2025, had a positive impact of $2.0 million on gross margin for the fiscal year ended January 31, 2026.

In addition to what precedes and under normal circumstances, increases or decreases in raw material (mainly steel) prices do not generally have a material impact on the gross margin since in some of the contracts in the order backlog, the clients supply the steel to be transformed by ADF, whereas protection clauses regarding price changes are usually included in contracts where ADF supplies the steel. In addition, the natural hedge attributable to revenues and the purchase of raw materials in U.S. dollars mitigates the impact of exchange rate fluctuations.

Fabrication hours are not only the Corporation's core activity but are also its most value-added activity. To that effect, revenues during the fiscal year ended January 31, 2026, were comprised of 33% of fabrication hours, compared with 35% for the fiscal year ended January 31, 2025.

(1) Gross margin as a percentage of revenues and the order backlog are supplementary financial measures. Refer to the Section 11 Non-IFRS Financial Measures and Other Financial Measures of this MD&A Report, for definition of these metrics.

13.2 Selling and Administrative Expenses

Fiscal years ended January 31,	2026	2025	Annual variations
(In thousands of dollars and in percentage)	$	$	$	%
Selling and Administrative Expenses	23,191	22,112	1,079	4.9
— As % of revenues	9.0%	6.5%		2.5

ADF Group Inc. | Fiscal 2026 MD&A Report

Selling and administrative expenses amounted to $23.2 million, which was $1.1 million higher than the fiscal year ended January 31, 2025.

This slight increase is mainly due to the impact of selling and administrative expenses resulting from the first consolidation of Groupe LAR.

13.3 Amortization

In accordance with IFRS Accounting Standards, amortization expense is included in the cost of goods sold and selling and administrative expense. However, Management considers it appropriate to continue separately commenting on amortization expense since it is considered a significant, although non-cash, component in the analysis of the Corporation's profit margins.

Fiscal years ended January 31,	2026	2025	Annual variations
(In thousands of dollars and in percentage)	$	$	$	%
Amortization	6,920	6,160	760	12.3
— As a % of revenues	2.7%	1.8%		0.9

The amortization expense for the 2026 fiscal year amounted to $6.9 million, which is $0.8 million higher than the previous fiscal year.

This variation is in line with the addition of capital assets during the fiscal year 2025 combined to the acquisition of Groupe LAR in September 2025 that increased amortization expense by $0.5 million during the fiscal year 2026.

The amortization expenses for the analyzed periods were distributed as follows:

Fiscal years ended January 31,	2026	2025	Annual variations
(In thousands of dollars and in percentage)	$	$	$	%
Amortization expense included in cost of goods sold	5,402	4,850	552	11.4
Amortization expense included in selling and administrative expenses	1,518	1,310	208	15.9
Total amortization	6,920	6,160	760	12.3

13.4 Net Financial Expenses

Fiscal years ended January 31,	2026	2025	Annual variations
(In thousands of dollars and in percentage)	$	$	$	%
Net financial expenses	827	1,116	(289)	(25.9)
— As % of revenues	0.3%	0.3%		—

The decrease in net finance expenses is explained by the interest income generated by the Corporation's excess cash during the fiscal year ended January 31, 2026 (see Section 15 Cash Flows and Financial Position hereinafter).

13.5 Foreign Exchange (Gain) Loss

Fiscal years ended January 31,	2026	2025	Annual variations
(In thousands of dollars and in percentage)	$	$	$	%
Foreign exchange (gain) loss	(2,148)	5,606	(7,754)	Neg.
— As a % of revenues	(0.8)%	1.7%		(2.5)

The foreign exchange gain recorded during the fiscal year ended January 31, 2026, included a $4.9 million foreign exchange loss on ongoing operations and a $7.0 million foreign exchange gain relating to the fair value of financial derivatives. During the 2026 fiscal year, a $6.8 million foreign exchange loss on the translation of foreign subsidiaries was recorded in Comprehensive Income.

The foreign exchange loss recorded during the fiscal year ended January 31, 2025, included a $3.0 million foreign exchange gain on ongoing operations and a $8.6 million foreign exchange loss relating to the fair value of financial derivatives. During the 2025 fiscal year, a $7.3 million foreign exchange gain on the translation of foreign subsidiaries was recorded in Comprehensive Income.

The Corporation is exposed to exchange rate fluctuations between the Canadian and U.S. dollars, since a significant portion of its revenues is generally recorded in U.S. dollars.

For the fiscal year ended January 31, 2026, 83% of the Corporation's revenues were recorded in U.S. dollars (88% during the fiscal year ended January 31, 2025). Considering the improvement in U.S. markets and its facilities in Great Falls, Montana, the Corporation expects that the percentage of its revenues in U.S. dollars will continue to be significant during the fiscal year 2027.

ADF Group Inc. | Fiscal 2026 MD&A Report

In line with its hedging policy, to manage its net risk between the future US-denominated cash inflows and outflows, the Corporation entered into foreign exchange forward contracts. As at January 31, 2026, the Corporation was party to foreign exchange forward contracts for the sale of US$35.2 million (US$100.9 million as at January 31, 2025) with maturities varying between three (3) months to twelve (12) months with rates between 1.3500 and 1.5025 (between three (3) months to twelve (12) months and rates between 1.3000 and 1.4175 as at January 31, 2025).

Based on the balance, as at January 31, 2026, of the Corporation's financial instruments denominated in foreign currencies, a 10% fluctuation in the exchange rate between the Canadian and U.S. dollars (all other variables remaining constant), would have had no impact on net income before tax (no impact during the fiscal year ended January 31, 2025).

However, this information only applies to financial instruments based on year-end balances and does not consider the impact of foreign exchange fluctuations on revenues and other miscellaneous expenses for a complete fiscal year.

13.6 Income Tax Expense

Fiscal years ended January 31,	2026	2025	Annual variations
(In thousands of dollars and in percentage)	$	$	$	%
Income tax expense	9,482	21,617	(12,135)	(56.1)
— As a % of revenues	3.7%	6.4%		(2.7)

The effective tax rates for the fiscal years ended on January 31, 2026, and on January 31, 2025, stood respectively at 26.5% and 27.6%, compared with the Corporation's Canadian statutory rate, which is 27%.

These effective rates come mainly from the mix of profits or losses of ADF's different subsidiaries, according to their legal and tax jurisdictions.

The U.S. operating losses available to the Corporation for carryforward were all used in the year ended January 31, 2025.

13.7 Net Income, Basic and Diluted Earnings per Share

Fiscal years ended January 31,	2026	2025
(In thousands of dollars and dollars per share)	$	$
Total net income	26,311	56,790
Total basic and diluted earnings per share	0.93	1.84

The decrease in net income during the fiscal year ended January 31, 2026, compared with the previous fiscal year, is explained by the elements previously mentioned and more specifically by the decrease in revenues and in gross margin coming mainly from the uncertainties, and direct and indirect impacts of the U.S. tariffs.

The acquisition of Groupe LAR had an impact of $0.2 million on net income during the fiscal year ended January 31, 2026, for a positive impact of $0.01 on income per share for the same fiscal year.

14. COMMENTS ON QUARTERLY RESULTS

The trends observed in the analysis of quarterly results do not necessarily represent those of the future results of the Corporation. ADF's fabrication activities are not, as such, subject to seasonal fluctuations. However, the non-residential construction market in which the Corporation is active goes through upward and downward cycles.

Overall, quarterly fluctuations in the following indicators result mainly from the changes in the revenue mix and accrued costs within different projects and for every given period, together with the lags between the recognition of costs and revenues, where appropriate, that could result from the use of estimates based on the percentage-of-completion method.

More specifically and considering the results for the last eight (8) quarters presented hereinafter, these quarterly fluctuations are mostly explained by the fabrication schedules of the different projects that are underway. Considering that revenues are recognized progressively based on costs incurred to date relative to the total estimated costs at completion on the various projects executed by the Corporation during the fiscal year, these revenues, as well as operating results, can differ significantly from quarter to quarter because of these execution schedules.

ADF Group Inc. | Fiscal 2026 MD&A Report

14.1 Results for the Last Eight (8) Quarters

	Fiscal Years Ended January 31,
	2026				2025
	4th Quarter (26.01.31)	3rd Quarter (25.10.31)	2nd Quarter (25.07.31)	1st Quarter (25.04.30)	4th Quarter (25.01.31)	3rd Quarter (24.10.31)	2nd Quarter (24.07.31)	1st Quarter (24.04.30)
(in thousands of dollars and in dollars per share and in percentage)	$	$	$	$	$	$	$	$
Revenues	78,794	71,413	53,006	55,523	77,399	79,952	74,881	107,400
Gross margin	16,925	19,707	10,951	12,189	23,997	24,307	27,625	31,312
— As a % of revenues (1)	21%	28%	21%	22%	31%	30%	37%	29%
Adjusted EBITDA (2)	11,050	18,354	3,702	10,395	19,244	24,032	24,914	23,099
— As a % of revenues (2)	14%	26%	7%	19%	25%	30%	33%	22%
Income before income tax expense	8,623	14,200	1,238	11,732	13,132	21,791	22,226	21,258
Net income	6,358	10,309	898	8,746	9,093	16,432	16,000	15,265
— Basic and diluted per share	0.22	0.36	0.03	0.30	0.31	0.55	0.51	0.47

(1) Gross margin as a percentage of revenues is a supplementary financial measure. Refer to the Section 11 Non-IFRS Financial Measures and Other Financial Measures of this MD&A Report, for definition of this metric.

(2) Adjusted EBITDA and adjusted EBITDA margin (as a percentage of revenues) are non-IFRS financial measures. A non-IFRS financial measure is not a standardized financial measure under the financial reporting framework used to prepare the Corporation's financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Section 11 Non-IFRS Financial Measures and Other Financial Measures above for definition of these metrics and the reconciliation to the most comparable IFRS Accounting Standards.

14.2 Results for the Fourth Quarter Ended January 31, 2026

For the quarter ended January 31, 2026, the Corporation recorded revenues of $78.8 million, up by $1.4 million from the fourth quarter of the 2025 fiscal year. The variation compared with this quarter is explained by the fabrication schedule, in line with the order backlog in hand and represents the only quarter of the fiscal year ended January 31, 2026, where revenues were higher than those for the previous comparable quarter, including $13.8 million provided from the consolidation of Groupe LAR.

Gross margin, as a percentage of revenues (1) was 21% for the fourth quarter ended January 31, 2026, compared with 31% for the corresponding quarter of fiscal 2025. The variation in margins between these two quarters is primarily explained by the mix of projects in fabrication, which generated exceptionally high margins during the quarter ended a year ago on January 31, 2025, and by the negative impact on current quarterly margins resulting from direct and indirect impacts from U.S. tariffs.

The Corporation posted net income of $6.4 million during the last quarter of fiscal 2026, compared with net income of $9.1 million for the corresponding period of fiscal 2025.

Because the Corporation carries out contracts that vary in complexity and in duration, upward or downward fluctuations may occur from quarter to quarter. In light of this, revenue and order backlog growth must be analyzed over several quarters, rather than from a period to the next.

CASH FLOWS AND FINANCIAL POSITION

The Corporation has a sound financial position and is on a solid footing to address its financial needs. Taking into account its cash and cash equivalents position, its credit facility and the level of planned capital spending, the Corporation does not expect any liquidity risk in a foreseeable future.

However, and considering the acquisition of Groupe LAR mentioned above, the Corporation expects to make capital investments in the coming quarters that will require external financing in addition to the cash currently available.

ADF Group Inc. | Fiscal 2026 MD&A Report

As at January 31, 2026, cash and cash equivalent totaled $62.7 million, up by $2.7 million compared with January 31, 2025. In addition, the Corporation did not use its credit facility as at January 31, 2026, and January 31, 2025.

The Corporation believes that the available cash including the external financing mentioned previously, will exceed the sums required to support the growth and execution of its order backlog on hand as at January 31, 2026, and to meet its financial covenants planned for fiscal 2027.

Furthermore, the Corporation continually appraises the opportunities to use part of its liquidities to finance certain projects that could provide additional long-term competitive advantages. It also looks at opportunities for accelerated payments discounts negotiated with suppliers (see Section 31 Outlook).

15.1 Operating Activities

The Corporation’s operating activities are summarized as follows:

Fiscal year ended January 31,	2026	2025
(In thousands of dollars)	$	$
Net income adjusted for non-cash items	41,364	90,013
Changes in non-cash operating working capital items:
Accounts receivable	14,599	159
Contract assets	10,438	20,210
Inventories	(2,813)	244
Prepaid expense	264	(658)
Others current assets	(2,730)	776
Accounts payable and other current liabilities	(893)	(9,398)
Contract liabilities	6,157	(36,389)
Others	(10)	(11)
	25,012	(25,067)
Income tax paid	(16,959)	(9,890)
Cash flows from operating activities	49,417	55,056

Net income adjusted for non-cash items totaled $41.4 million during the 2026 fiscal year, which is $48.6 million less than during the 2025 fiscal year. This variation is for the most part explained by the decrease in net income and by the income tax expense.

During the 2026 fiscal year, changes in non-cash operating working capital items generated $25.0 million. This cash inflow is mostly explained by the decrease in accounts receivable ($14.6 million) and contract assets ($10.4 million), the increase in contract liabilities ($6.2 million) and inventories ($2.8 million). These variations are in line with the activity level as at January 31, 2026, compared with the same date a year ago.

During the 2025 fiscal year, changes in non-cash operating working capital items required $25.1 million. This cash outflow is mostly explained by the decrease in contract liabilities ($36.4 million) and in accounts payable and other current liabilities ($9.4 million), net of the decrease in contract assets ($20.2 million). These variations were in line with the activity level as at January 31, 2025, compared with the same date a year ago.

15.2 Investment Activities

The Corporation’s investing activities are summarized as follows:

Fiscal year ended January 31,	2026	2025
(In thousands of dollars)	$	$
Acquisition of property, plant and equipment	(7,402)	(8,283)
Acquisition of intangible assets	(3,666)	(810)
Business combination, net of cash acquired	(16,381)	—
Others	176	384
Cash flows used in investing activities	(27,273)	(8,709)

ADF Group Inc. | Fiscal 2026 MD&A Report

During the 2026 fiscal year, $27.3 million in liquidities were required mainly for the acquisition of property, plant and equipment ($7.4 million) and intangible assets ($3.7 million), including a revamp of the Corporation's integrated ERP software package, which will take place over the next three (3) fiscal years. The acquisition of Groupe LAR also required a disbursement of $16.4 million (see Section 9 Business Combination).

During the 2025 fiscal year, $8.7 million in liquidities were required mainly for the acquisition of property, plant and equipment ($8.3 million) and intangible assets ($0.8 million). Acquisition of property, plant and equipment during the fiscal year ended January 31, 2025, was mainly for fabrication equipment at ADF's plants in Terrebonne, Quebec and in Great Falls, Montana.

The Corporation estimates total capital expenditures to reach approximately $35 million for the 2027 fiscal year, which will be committed primarily to maintaining production equipment current at ADF's fabrication facilities in Terrebonne, Quebec, and in Great Falls, Montana, U.S.A., including the expansion project and investment program for new equipment at the Groupe LAR's plant, in Métabetchouan-Lac-à-la-Croix, Québec.

15.3 Financing Activities

The Corporation's financing activities are summarized as follows:

Fiscal year ended January 31,	2026	2025
(In thousands of dollars)	$	$
Repayment of long-term debt	(4,024)	(3,076)
Payments of lease liabilities	(719)	(700)
Shares repurchase and cancellation	(9,001)	(54,574)
Dividends paid	(1,146)	(924)
Interests paid	(1,925)	(2,795)
Cash flows used in financing activities	(16,815)	(62,069)

During fiscal year 2026, financing activities required $16.8 million in liquidities, compared with a cash outflow of $62.1 million during the previous fiscal year.

In addition to the repayment of the long-term debt and lease liabilities which required cash outflow of $4.7 million for the fiscal year ended January 31, 2026, these liquidities were primarily used for the repurchase and cancellation of shares (see Section 16 Capital Stock).

15.4 Payment of Rent and Interest and Payment of Principal on Debt

The Corporation pays interest on its long-term debts, based on interest rates ranging between 0% and 5.95% as at January 31, 2026. The Corporation is currently making monthly principal repayments totalling less than $0.4 million on these debts. Other rent payments relating to lease liabilities and other long-term contracts are described in Section 15.6 Contractual Obligations below.

15.5 Debt Covenants

During the fiscal year ended January 31, 2026, the Corporation met all covenants with its lenders and still did at the date thereof. Management expects it will continue to respect its commitments during fiscal year 2027.

15.6 Contractual Obligations

15.6.1 Long-Term Debt

Long-term debt, excluding interest and deferred financing costs, is detailed as follows:

(In thousands of dollars)	$
Less than one year	4,527
2 to 3 years	8,608
4 to 5 years	8,608
And over	17,995
Total	39,738

ADF Group Inc. | Fiscal 2026 MD&A Report

15.6.2 Lease Obligations

The lease obligations excluding interest, are detailed as follows:

(In thousands of dollars)	$
Less than one year	893
2 to 3 years	1,644
4 to 5 years	394
And over	—
Total	2,931

CAPITAL STOCK

Information on the outstanding shares:

	Subordinate Voting Shares		Multiple Voting Shares (1)		Total
(In thousands of dollars and in number of shares)	Number	$	Number	$	Number	$
As at January 31, 2025	17,075,797	48,291	12,076,820	13,463	29,152,617	61,754
Shares repurchase and cancellation	(1,049,405)	(2,907)	—	—	(1,049,405)	(2,907)
Shares issuance	449,944	3,694	—	—	449,944	3,694
As at January 31, 2026	16,476,336	49,078	12,076,820	13,463	28,553,156	62,541

(1) These shares carry 10 votes per share.

16.1 Normal Course Issuer Bid (NCIB)

On December 11, 2024, with the approval of the Toronto Stock Exchange and the Autorités des marches financiers (AMF), the Board of Directors authorized the Corporation to put in place the NCIB to repurchase Subordinate Voting Shares in the normal course of its business. The Corporation planned to repurchase, for cancellation, between December 16, 2024, and December 15, 2025, up to 1,770,707 Subordinate Voting Shares, representing approximately 10% of the securities held by the public as at December 2, 2024.

During fiscal year ended January 31, 2026, the Corporation repurchased a total of 1,049,405 Subordinate Voting Shares for a cash consideration of $7.6 million. In addition to the $2.9 million impact on capital stock, the total consideration had an impact of $0.2 million on contributed surplus and $4.6 million on retained income, including $0.2 million related to the 2% tax on this share repurchase.

During fiscal year ended January 31, 2026, the Corporation issued 449,994 Subordinate Voting Shares for $3.7 million, representing a portion of the purchase price for the acquisition of Groupe LAR (see Section 9 Business Combination).

As at the date hereof, the number of shares outstanding was 28,553,156.

SHARE-BASED COMPENSATION

17.1 Deferred Share Units (DSU)

17.1.1 External Directors

This deferred compensation plan allows every external director, who wants to participate, to defer in whole or in part his/her director's compensation (including fees and attendance fees), by electing to receive a percentage of this compensation in the form of DSU, which will be bought back in cash by the Corporation on the date the External Director ceases to be a director of the Corporation by reason of death, retirement or loss of function as director.

When a director elects to participate in this plan, the Corporation credits the account of the director for a number of units equal to the deferred compensation divided by the market value of the Subordinate Voting Shares, which is established using the average closing price on the Toronto Stock Exchange during the five (5) trading days preceding the date of grant. DSU are not convertible into shares of the Corporation and do not result in a dilution to shareholders.

In addition, and independently to DSU that can be granted to External Directors for the purposes of deferring their directors' compensation, the DSU plan also allows the Corporation's Board of Directors to award, at its discretion, DSU to any external director, executive officer and key employee. If it sees fit, the Board of Directors can attach conditions related to time and/or to the Corporation's performance to the vesting of these DSU.

ADF Group Inc. | Fiscal 2026 MD&A Report

When the Corporation pays dividends on Subordinate and Multiple Voting Shares, the accounts of the Directors, Executive Officers and key employees (see paragraph 17.1.2 below) are credited for the amount in the form of additional units using the same basis of calculation previously described.

The DSU are re-evaluated at fair value at the end of each reporting period until the vesting date, using the market price of the Corporation’s Subordinate Voting Shares.

During the fiscal year ended January 31, 2026, DSU compensation to External Directors recorded in the Consolidated Statement of Income amounted to an expense of $0.4 million (a $0.4 million expense during the fiscal year ended January 31, 2025), including the impact of the change in the market price of the Corporation’s share.

The fluctuation in DSU for External Directors was as follows:

Fiscal year ended January 31,	2026	2025
(In number of deferred share units)	Number	Number
Outstanding, at the beginning of fiscal year	267,545	248,585
Granted	60,785	18,960
Outstanding and vested, at the end of fiscal year	328,330	267,545

The carrying amount and the intrinsic value of the liabilities related to the External Directors’ vested DSU were $2.7 million as at January 31, 2026 ($2.3 million as at January 31, 2025).

17.1.2 Executive Officers and Key Employees

As set forth in the DSU Plan, the Corporation may grant DSU, on a discretionary basis to its Executive Officers and key employees. These DSU usually vest gradually over a 2 to 5-year period, at a rate of 20% to 50% per year. The vested DSU will be bought back in cash by the Corporation on the date its holder ceases to be an officer or employee of the Corporation by reason of death, retirement, or loss of function as officer or employee.

The DSU are progressively expensed as incurred over the vesting period and their costs is determined using a valuation model based on the market price of the Corporation’s Subordinate Voting Shares. The DSU are re-evaluated at the fair value at the end of each reporting period until the vesting date, using the market price of the Corporation’s Subordinate Voting Shares.

The DSU compensation for Executive Officers and key employees, recorded in the Consolidated Statement of Income during the fiscal year ended January 31, 2026, amounted to an expense of $0.1 million ($0.4 million on expense during the fiscal year ended January 31, 2025), including the impact of the variation in the Corporation’s share price.

The fluctuation in DSU for the Executive Officers and key employees was as follows:

Fiscal year ended January 31,	2026	2025
(In number of deferred share units)	Number	Number
Outstanding, at the beginning of fiscal year	421,931	416,121
Granted	34,240	5,810
Outstanding, at the end of fiscal year	456,171	421,931
Vested, at the end of fiscal year	409,108	378,279

The carrying amount of the liabilities related to Executive Officers and key employees’ DSU, amounting to $3.6 million as at January 31, 2026 ($3.6 million as at January 31, 2025), and of which $3.4 million corresponds to the intrinsic value of vested DSU as at January 31, 2026 ($3.3 million as at January 31, 2025).

17.2 Performance Share Units Plan (PSU)

As part of its long-term compensation plan, the Corporation may issue PSU to its Executive Officers and key employees. PSU are not convertible into shares of the Corporation and do not result in dilution for shareholders. The acquired PSU are only redeemable in cash by the Corporation upon the expiration of three (3) years after their grant (the "PSU Settlement Date"), subject to the achievement of financial targets. PSU tranches whose vesting conditions have not been met on the applicable vesting date are canceled, without compensation.

PSU also entitle holders to receive additional units each time dividends are paid on the Corporation’s Subordinate Voting Shares.

Compensation expense is recognized in the Consolidated Statement of Income over the vesting period and the counterpart is recognized in current liabilities in the Consolidated Statement of Financial Position. Changes in fair value between the grant date and the valuation date result in a change in liability and compensation expense.

ADF Group Inc. | Fiscal 2026 MD&A Report

The fair value of a PSU at any given date (for example, its grant date, vest date or PSU settlement date, etc.) is equal to the market value of the Subordinate Voting Shares of the Corporation on that date, calculated using the average closing price of Subordinate Voting Shares of the Corporation on the Toronto Stock Exchange during the five (5) trading days immediately preceding that date.

During the fiscal year ended January 31, 2026, PSU compensation for Executive Officers and key employees amounted to an immaterial amount ($0.7 million expense for the fiscal year ended January 31, 2025) including the impact of the variation in the Corporation's share price.

Fluctuations in PSU for Executive Officers and key employees were as follows:

Fiscal Years Ended January 31,	2026	2025
(In number of performance share units)	Number	Number
Outstanding, at the beginning of fiscal year	106,447	129,326
Granted	13,365	23,063
Cancelled	(14,203)	—
Settled	(52,349)	(45,942)
Outstanding, at the end of fiscal year	53,260	106,447
Vested, at the end of fiscal year	24,897	62,797

As at January 31, 2026, the carrying amount of the liabilities related the Executive Officers and key employees' PSU, amounted to $0.4 million ($0.8 million as at January 31, 2025), of which an amount of $0.2 million corresponds to the intrinsic value of the vested PSU as at January 31, 2026 ($0.5 million as at January 31, 2025).

17.3 Restricted Share Unit (RSU) Plan

This new plan may, at the Board of Directors' discretion, be used in conjunction with the Corporation's Performance Share Unit (PSU) plan and the Deferred Share Unit plan (DSU). The RSU are not convertible into Corporation's share and do not result in shareholder dilution. The RSU do not entitle holders to receive additional units each time dividends are paid on the Corporation's subordinate voting shares.

The RSU thus allocated become vested and are redeemed gradually, in tranches, over a maximum period of three (3) years from their allocation date, in accordance with the terms set forth in each allocation letter. At the time of allocation, the Board of Directors also determines the number of PSUs in each tranche and their respective vesting and redemption dates.

For each RSU granted, a compensation expense is recognized in the Consolidated Statement of Income during the vesting period, and the corresponding entry is recognized as a current liability in the consolidated statement of financial position. Changes in fair value between the grant date and the valuation date result in a change in both the liability and the compensation expense.

The value of the RSU on any given date is equal to the market value of the Corporation's subordinate voting shares on that date, calculated using the average closing price of the Corporation's subordinate voting shares on the Toronto Stock Exchange during the five (5) trading days preceding that date

During the fiscal year ended January 31, 2026, compensation for RSU amounted to an expense of $0.6 million (no amount for the fiscal year ended January 31, 2025), including the impact of the change in the Corporation's share price.

Fluctuations in RSU were as follows:

Fiscal Years Ended January 31,	2026	2025
(In number of restrictive share units)	Number	Number
Outstanding, at the beginning of fiscal year	—	—
Granted	358,682	—
Outstanding, at the end of fiscal year	358,682	—
Vested, at the end of fiscal year	—	—

As at January 31, 2026, the carrying amount of the liabilities related to the RSU, was $0.6 million (no amount as at January 31, 2025) and was recorded under accounts payable and other current liabilities in the consolidated statement of financial position. Of this liability, the intrinsic value of the vested RSU as at January 31, 2026 and 2025 was nil.

ADF Group Inc. | Fiscal 2026 MD&A Report

18. DIVIDENDS

During the fiscal year ended January 31, 2026, two semi-annual dividends were recognized as distribution to the Corporation's shareholders including a first one totalling $0.6 million ($0.02 per share) to Shareholders of Record as at April 24, 2025, and a second one totalling $0.6 million ($0.02 per share) to Shareholders of Record as at September 26, 2025. These two semi-annual dividends, which total $1.1 million ($0.04 per share), including $0.6 million for Subordinate Voting Shares and $0.5 million for Multiple Voting Shares, were paid on May 15, 2025, and October 16, 2025.

During the fiscal year ended January 31, 2025, two semi-annual dividends were recognized as distribution to the Corporation's shareholders including a first one totalling $0.3 million ($0.01 per share) to Shareholders of Record as at April 26, 2024, and a second one totalling $0.6 million ($0.02 per share) to Shareholders of Record as at September 27, 2024. These two semi-annual dividends, which total $0.9 million ($0.03 per share), including $0.5 million for Subordinate Voting Shares and $0.4 million for Multiple Voting Shares, were paid on May 15, 2024, and October 17, 2024.

19. ORDER BACKLOG

ADF Group's order backlog (1) reached $561.1 million on January 31, 2026, compared with $293.1 million on the same date a year earlier. This variation is attributable to new contracts and contractual changes, net of the execution of contracts.

It should be noted that the Corporation's order backlog as at January 31, 2026, includes the order backlog of Groupe LAR totaling $138.2 million, which was added pursuant to the closing of the acquisition on September 18, 2025 (see Section 6.8 Closing of the Acquisition of Groupe LAR above) and does not include the option to extend the contract announced on July 23, 2025, by five (5) years (see Sections 6.2 New Contracts and 9 Business Combination hereinabove).

As at January 31, 2026, 54% of the order backlog consisted of fabrication hours – the Corporation's core business and most value-added activity – compared with 30% on January 31, 2025.

Most of the contracts in hand as at January 31, 2026, will progressively be executed by the end of the fiscal year ending January 31, 2028.

(1) The order backlog is supplementary financial measure. Refer to the Section 11 Non-IFRS Financial Measures and Other Financial Measures of this MD&A Report, for definition of this metric.

20. FINANCIAL POSITION

As at January 31, 2026, the Corporation had a sound financial position. The Corporation's solid consolidated statement of financial position allows it to obtain, when required, the necessary bonding for the award of large-scale contracts. This represents a major advantage for ADF within its markets.

The following table provides details on the major changes in the Consolidated Statement of Financial Position between January 31, 2026, and January 31, 2025.

Sections	Variations	Explanatory Notes
	(In million of dollars)
Cash and cash equivalents	2.7	See Section 15 Cash Flows and Financial Position herein.
Accounts receivable	(10.7)	Variation in invoicing level in line with activity level and work progress schedules.
The consolidation of the Groupe LAR increased accounts receivable by $5.8 million as at January 31, 2026.
Contract assets, net of contract liabilities	(14.7)	Net difference between the work progress and progressive revenue invoicing of products; the variation reflecting the progress schedule. These variations do not include any readjustment, being either a change in the work progress or change in the price estimate.
Inventories	6.1	The consolidation of the Groupe LAR increased inventories by $3.6 million as at January 31, 2026.
Current tax assets, net of current tax liabilities	8.5	Representing the amounts paid for taxes due for the 2025 fiscal year and the provisional payments required by the various governments for the 2026 fiscal year.

Sections	Variations	Explanatory Notes
Property, plant and equipment, intangible assets and right-of-use assets	(In million of dollars)
16.9	Net change from the acquisition of property, plant and equipment and intangible assets ($12.4 million) from the consolidation of Groupe LAR as at September 18, 2025 ($15.4 million), net of the foreign exchange rate impact ($3.2 million), amortization ($6.9 million) and as well as the reclassification of $0.8 million in assets held for sale.
Accounts payable and other current liabilities	7.9	Change in line with the level of activity at the respective closing dates.
The consolidation of the Groupe LAR increased accounts payable and other current liabilities by $9.6 million as at January 31, 2026.
Long-term debt and lease liabilities (including current portions)	(4.0)	Change coming from the reimbursement of long-term debts ($4.0 million) and lease liabilities ($0.7 million) net of foreign exchange rate impact and other miscellaneous items ($0.7 million).
Deferred income tax assets net of deferred income tax liabilities	(6.8)	Exchange rate difference arising from the conversion of the financial statements of ADF Group U.S. subsidiaries.

21. CURRENT ECONOMIC ENVIRONMENT

Although the trends in certain markets served by the Corporation are good, certain external elements could lead to uncertainty regarding the economic context. In times of economic uncertainty, the Corporation is faced with the following challenges:

Its business segment is strongly dependent on project owners' capacity to finance their projects. For lack of financing, certain projects can be delayed or simply abandoned. Although the Corporation strives to mitigate this risk by focusing its marketing efforts on projects whose financing is most likely to materialize, it has no control over financial market trends, and
Certain project owners who secured financing on the start-up of projects could be forced to cease the work pursuant to the withdrawal of financing, due to a lack of capital of either the project lender or the owner. The Corporation mitigates this risk by ensuring that amounts due are diligently collected and, insofar as possible, maintaining at all times a positive cash flow for every project. Moreover, the Corporation does business with owners who are financially solid. At the date hereof, no project of the Corporation is subject to such constraints.

Additionally, and in recent months, the direct and indirect impact of U.S. tariffs has created uncertainty in the day-to-day management of our operations. This situation evolves almost daily and will be closely monitored by the Corporation.

From a financing point of view, the Corporation has a sound financial position and currently respects all its financial covenants. It expects it will continue to do so during the next 12 months.

Although the investment program may represent a larger investment from time to time, capital expenditure is closely monitored by Management.

The Corporation does not anticipate any liquidity problems, in particular since its credit facility is issued by a Canadian chartered bank with a solid credit rating, and the Corporation's major clients are leaders in their respective fields.

Based on the foregoing, the Corporation maintains its short-term prospects (see Section 31 Outlook hereinafter) and does not currently foresee any short-term elements that could compromise its course of business.

That being said, the Corporation will continue to use caution and will closely monitor the situation (see Sections 23 External Factors to Which the Corporation's Performance is Exposed and 31 Outlook hereinafter).

22. RELATED PARTY TRANSACTIONS

During the fiscal year ended January 31, 2026, certain advances were granted to executive-shareholders. These advances were fully reimbursed at the date hereof and no outstanding balances remained as at January 31, 2026.

Moreover, in the normal course of business, management agreements have been reached with companies held by a group of majority shareholders. These transactions are measured at the exchange value, which is the consideration established and accepted by the related parties:

ADF Group Inc. | Fiscal 2026 MD&A Report

Company	Type	Transactions with ADF Group Inc.	Fiscal Years Ended January 31,
			2026	2025
(In dollars)			$	$
Groupe JPMP Inc.	Executives	Three executives of ADF Group are compensated through this company for their work within the Corporation, as stipulated in their contracts of employment (see Section 10 Executive Compensation of the Management Information Circular for the 2026 fiscal year).	1,372,505	1,334,480
ADF Group Inc.	Executives	Other compensation paid directly to Executives.	1,079,398	696,220

23. EXTERNAL FACTORS TO WHICH THE CORPORATION'S PERFORMANCE IS EXPOSED

23.1 Global Pandemic

A pandemic outbreak, as demonstrated by COVID-19, must now be considered in external factors that may influence ADF's performance. Although the type of pandemic or future variant is innumerable, and the impacts of these pandemics on the sector in which the Corporation operates can be multiple, the Corporation will now have to monitor this new risk. The measures taken by ADF to minimize the impacts of COVID-19 on all operations will serve as the basis for future years and will need to be adjusted, if necessary, according to the potential impacts of future pandemics.

23.2 Exchange Rate

The exchange rate fluctuation between the Canadian and U.S. dollars has an impact on the Corporation's results.

Thus, a $2.1 million foreign exchange gain was recorded for the fiscal year ended January 31, 2026, compared with a $5.6 million foreign exchange loss for the 2025 fiscal year.

In order to minimize the impact of exchange rate fluctuations on its results, the Corporation implemented the following protective measures:

Issuance of debts in U.S. dollars;
When advantageous, the raw material (steel) and welding products required for fabrication are purchased in U.S. dollars, and
A foreign exchange policy to protect a portion of the net exchange risk between cash inflows and outflows denominated in U.S. dollars.

23.3 Risks and Uncertainties Related to the Corporation's Operations

The following is a description of the Corporation's main operating risks and uncertainties:

23.3.1 Uncertainties Relating to the World Economy

The uncertainty related to the global economy could have a negative impact on the Corporation's business segment, i.e. the non-residential construction industry, particularly in North America, its primary market. At the date hereof, although the Corporation's order backlog will provide work for the next quarters, the uncertainty relating to the global economy could adversely affect the Corporation's revenues and profitability beyond that period. In addition, in recent months, the direct and indirect impact of U.S. tariffs has created uncertainty in the day-to-day management of our operations. This situation evolves almost daily and will be closely monitored by the Corporation.

23.3.2 Bonding Capacity and Irrevocable Letters of Credit

During the fiscal year ended January 31, 2026, the Corporation maintained the necessary bid bonds and/or letters of credit to its business partners, required for bids, as well as in the scope of contractual commitments, or other financial instruments, such as performance, payment and supply bonds, or an irrevocable letter of credit.

23.3.3 Operational Risks and Uncertainties That Could Have an Impact on the Corporation's Financial Position and Operating Results

Normally, ADF's contracts are performed under contractual arrangements at firm prices. ADF has developed and applies rigorous risk assessment and management practices to reduce the nature and extent of the financial, technical and legal risks specific to each of these contractual agreements. ADF's continued commitment to strict risk management practices when undertaking and executing contracts includes the technical risks assessment, legal review of contracts, application of tight cost controls and scheduling of projects, regular review of projects' revenues, costs and cash flows, and implementation of agreements aimed at generating positive cash flows from projects and other provisions aimed at mitigating risks.

ADF Group Inc. | Fiscal 2026 MD&A Report

The following items could have an impact on the Corporation's future financial position and operating results:

Economic conditions could exert pressure on the profit margins on new projects to be negotiated with clients and have an impact on the order backlog and the award of new contracts;
Contractual changes overlapping two periods, that is, for which costs would have been recognized but no revenues recorded during a given period and no final settlement concluded with the client at the end of that period, could have an impact on the Corporation's results and cash flows in the following period, subsequent to the signing of this agreement;
An increase in the price of steel might be a risk, although it would be mitigated by the sale price adjustment clauses concluded with clients and included in contracts;
The risk associated with the fluctuations in interest rates is also mitigated by having a mix between fixed-rate and variable-rate debts, as well as available liquidities, when appropriate, that can generate financial revenues. This risk is also mitigated by the implementation of interest rate options that limit fluctuations in interest rates on a portion of the Corporation's variable debt;
Competition in the Corporation's business segment;
Economic dependency related to the concentration of its client base; the Corporation strives to mitigate this risk through its development strategy of broadening its geographical and market sectors;
The imposition by the United States, historically ADF's main market, of tariffs or other protectionist measures on imported processed steel;
Fluctuations in the exchange rate between the Canadian and U.S. dollars. However, this risk is mitigated in part by the foreign currency hedge policy adopted by the Corporation's Executive Officers, and
The nature of contracts in hand, depending on the type of client, can influence the delay of collection. When these contracts are funded by government agencies, it is possible that the collection period of contract receivables is not impacted upward. However, the risk related to the collection is minimal given that these sums are actually guaranteed by government agencies. When these same contracts are funded by non-governmental organizations, Management believes that the vast majority of these accounts are not doubtful accounts since that they are with well-established companies.

24. FINANCIAL INSTRUMENTS

A significant number of items in the Corporation's Consolidated Statement of Financial Position include financial instruments. The Corporation's financial assets consist of cash, cash equivalents, accounts receivable, contract assets, as well as derivative financial instruments, whose fair market value is positive. Financial liabilities include credit facility, accounts payable and other current liabilities, contract liabilities, long-term debt and derivative financial instruments, whose fair market value is negative.

As at January 31, 2026 and 2025, the carrying amount of these financial instruments did not significantly differ from the fair market value, either because of their forthcoming maturity date (in the case of cash, cash equivalents, accounts receivable, contract assets and liabilities, credit facility, and accounts payable and other current liabilities), or because the Corporation believed it could obtain similar conditions and schedules in the case of the long-term debt (excluding the lease liabilities) or since they are re-evaluated at their fair value at the end of every period (in the case of derivative financial instruments) (see Note 28 Financial Instruments in the Consolidated Financial Statements for the fiscal year ended January 31, 2026).

Derivative financial instruments are typically used to manage the Corporation's foreign exchange and interest rate risk exposure. They are generally comprised of foreign exchange forward contracts and interest rate options.

The Corporation is mostly exposed to credit, liquidity and market risks, including exchange rate and interest rate risks, when using financial instruments. A description of how the Corporation manages these risks is included in this MD&A Report, as well as in Note 27 Financial Risk Management in the Corporation's Consolidated Financial Statements for the Fiscal Year Ended January 31, 2026.

25. ASSESSMENT OF THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES, AND INTERNAL CONTROL OVER FINANCIAL REPORTING

In accordance with National Instrument 52-109, Certification of Disclosure in Issuers' Annual and Interim Filings, disclosure controls and procedures have been designed to provide reasonable assurance that the information that must be presented in Corporation's interim and annual reports is accumulated and communicated to management on a timely basis, including the Chief Executive Officer and the Chief Financial Officer, so that appropriate decisions can be made regarding disclosure.

Additionally, internal control over financial reporting has also been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS Accounting Standards.

ADF Group Inc. | Fiscal 2026 MD&A Report

The Chief Executive Officer and the Chief Financial Officer have evaluated the effectiveness of Corporation's disclosure controls and procedures as at January 31, 2026, as well as the effectiveness of Corporation's internal control over financial reporting as of the same date using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Internal Control – Integrated Framework (2013 Framework) and have concluded that they are effective.

During the quarter ended January 31, 2026, no changes were made to internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls and procedures, excluding the acquisition of Groupe LAR and its subsidiaries (see Section 9 Business Combination).

Regarding this acquisition, the Corporation used the provisions of NI 52-109 3.3(1)(b) to exclude the design evaluation of ICFR and DC&P for a maximum period of 365 days. The results of the acquisition of Groupe LAR are included in the consolidated financial statements and represent approximately 13% of total consolidated assets as at January 31, 2026, approximately 8% of consolidated revenues and 1% of consolidated net income for the fiscal year ended January 31, 2026.

26. DISCLOSURE AND INSIDER TRADING POLICIES

In accordance with its internal policies and guidelines, the Corporation diligently reports all relevant financial information. In addition, when the Corporation publishes its financial results or announces major contract awards or any other material information, it enforces a blackout period for its directors and managers, as well as for its personnel who wishes to trade on ADF Group's securities, in order to ensure compliance and transparency of any trading by persons regarded as insiders.

With regard to the employees, this blackout period can, under the circumstances, be either enforced for all the Corporation's employees or limited to a more restricted number of employees according to their knowledge of privilege information concerning the event to be disclosed.

27. MATERIAL ACCOUNTING POLICIES, UNCERTAINTY RELATING TO ESTIMATES AND CRITICAL ACCOUNTING JUDGMENTS

Refer to Note 2 Material Accounting Policies and Note 3 Estimation Uncertainty and Critical Accounting Judgments of the Notes to Consolidated Financial Statements for the Fiscal Year Ended January 31, 2026.

28. ENVIRONMENT

ADF's operations are subject to various laws and regulations adopted by federal, provincial, state and local governments pertaining to environmental protection.

The Corporation's Terrebonne and Great Falls facilities were built on vacant lands. The operations that could have a potential impact on the environment are welding, which generates smoke, and equipment maintenance, which generates waste oil, and industrial coating, which generate fumes and vapours. ADF has installed appropriate pollution control equipment in order to comply with the existing laws and regulations and ensures to perform in the normal course of business, the investments required to meet the highest standards.

Waste oil is recuperated by specialized firms. The Corporation has the necessary environmental certificates of authorization for its facilities and for all expansion phases subsequently carried out.

Moreover, as part of the construction of its new paint shop in Terrebonne, the Corporation updated its environmental certificate of authorization for all its operations located in Terrebonne, including its fabrication plant. Following these investments, ADF Group's facilities in Terrebonne meet the highest environmental standards. During the fiscal year ended January 31, 2022, as part of the new financing that the Corporation obtained, the Corporation conducted environmental assessments at its Terrebonne, Quebec site, which did not identify any deficiencies or contaminants requiring corrective action in accordance with applicable environmental standards.

In December 2024, the Corporation obtained its ISO 14001 certification for its site in Terrebonne, Quebec.

The facilities of Groupe LAR and its subsidiaries acquired on September 18, 2025 (see Section 9 Business Combination) also meet environmental standards currently in effect. Groupe LAR's main site in Métabetchouan-Lac-à-la-Croix, Quebec, has undergone environmental reviews (Phases I and II) in recent years, which did not identify any deficiencies or contaminants requiring corrective action in accordance with current environmental standards.

For the fiscal years ended January 31, 2026, and 2025, and considering what precedes, the requirements with regard to environmental protection did not have a significant financial or operational impact on the Corporation's capital expenditures, net income and competitive position. The Corporation does not expect to incur any costs outside the normal course of business to comply with environmental requirements.

ADF Group Inc. | Fiscal 2026 MD&A Report

SUSTAINABLE DEVELOPMENT

During the fiscal year ended January 31, 2024, the Corporation began a process to adopt a Sustainable Development Policy. Established around the three ESG axes (environment, social and governance), ADF will identify in the coming months the key objectives for each of these three axes while endowing itself with targets and means to achieve these targets.

The Corporation has since implemented several initiatives that will allow it to move forward in this process, including setting up a Sustainable Transition committee. This committee, which is made up of ADF employees, will allow the Corporation to keep its personnel up to date with the latest developments, while allowing ADF Management to have ongoing feedback.

The Corporation has also retained the services of an external firm to assess how ADF manages its energy, and measures its Scope 1, 2 and 3 greenhouse gas (GHG) emissions, water and residual materials for all ADF Group facilities, both in Canada and in the United States. The results of this assessment (scopes 1 and 2) were presented in the Corporation’s Sustainable Development reports published with its other disclosure documents dated January 31, 2026, and 2025. Management is continuing to analyze this information including finalizing the data for Scope 3, which will allow to incorporate the Corporation’s targets into the sustainable development objectives that it will adopt in the coming quarters.

During the fiscal year ended January 31, 2026 and 2025, the Corporation also published its Report on Forced Labor and Child Labor in Supply Chains, its Confidentiality and Protection of Personal Information Policy, Environmental Policy, as well as its Suppliers’ Code of Conduct. All of these documents are available on the Corporation’s website at www.adfgroup.com.

Several other initiatives, including the recycling and composting of waste generated by ADF’s operation have been set in motion. The Corporation will continue to provide regular quarterly update in its MD&A Reports, including the findings of the report on energy and scope 1, 2 and 3 GHG, water and residual materials, and possible solution and objectives to improve its overall performance.

HUMAN RESOURCES

As at January 31, 2026, the Corporation employed a total of 707 people, including 207 at Groupe LAR offices and plant located in Métabetchouan-Lac-à-la-Croix, Quebec, and 500 people across ADF Group’s head office, fabrication complex and paint shop in Terrebonne, as well as the office, fabrication plant and paint shop located in Great Falls, Montana, USA, and at various construction sites in the United States.

OUTLOOK

At the time of writing these lines a year ago, ADF published results that were significantly higher than the previous fiscal year but also announced the beginning of a period of uncertainty related to U.S. tariffs and even confirmed the implementation of a work-sharing program.

A year later, and although the results for the fiscal year ended January 31, 2026, are down from the excellent results of the previous year, we can certainly be more than satisfied with the financial and operational performances, and the acquisition of Groupe LAR that we were able to carry out successfully.

The order backlog increase, including the addition of Groupe LAR following its acquisition completed on September 18, 2025, as well as a more neutral distribution of the order backlog between U.S. and Canadian projects, places ADF in a much more appropriate situation in the face of this new tariff reality with our neighbors to the south.

For the current fiscal year, we will continue our efforts to grow the order backlog, including the development of Groupe LAR’s hydroelectric market. In that respect, we therefore anticipate revenue growth for our fiscal year ending January 31, 2027, despite the ongoing challenge of finalizing contracts with our U.S. customers that would normally be carried out at our plant located in Terrebonne, Quebec.

However, given that the capital investments we will make to modernize and increase the capacity of Groupe LAR’s plant in Lac St-Jean will not have a significant impact in the fiscal year ending January 31, 2027, we expect margins to stagnate in the first quarters of fiscal year 2027. This trend will be reversed as the integration of Groupe LAR continues and we complete the projects inherited at the time of the acquisition.

The acquisition of Groupe LAR, the new distribution of our order backlog and the optimal utilization of our fabrication facility in Great Falls, Montana, U.S.A. allow us to look forward to fiscal year 2027 with optimism, allowing us to continue our orderly growth, despite tariffs uncertainties.

ADF Group Inc. | Fiscal 2026 MD&A Report

32. ADDITIONAL INFORMATION

The Corporation regularly discloses information through press releases, quarterly and annual reports and the Annual Information Form, available on the Corporation's website at www.adfgroup.com and the SEDAR+ (System for Electronic Document Analysis and Retrieval) website at www.sedarplus.ca.

Mr. Jean-Francois Boursier, CPA

Ms. Marise Paschini

/Signed/

/ Signed /

Chief Financial Officer

Executive Vice-President, Treasurer and Corporate Secretary

Terrebonne, Quebec, Canada, April 15, 2026

ADF

Group Inc.

The electronic version of this document is available at www.adfgroup.com and www.sedarplus.ca.

Ce document est également disponible en français.

ADF GROUP INC.
300 Henry-Bessemer
Terrebonne, Quebec, Canada J6Y 1T3
T. (450) 965-1911 | 1 (800) 263-7560
[email protected] | www.adfgroup.com

AI assistant

ADF Group Inc. — Management Reports 2026

44820_rns_2026-04-22_9bcaa555-4235-494c-a7e5-0f222fcf457b.pdf

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

FORWARD-LOOKING STATEMENTS

1. GENERAL

2. FORWARD-LOOKING STATEMENTS

3. GENERAL OVERVIEW

4. COMMERCIAL POSITIONING

5. MARKET TRENDS

6. SIGNIFICANT EVENTS OF THE FISCAL YEAR ENDED JANUARY 31, 2026

6.1 U.S. Tariffs on Steel

6.2 New Contracts

6.3 Dividends

6.4 Normal Course Issuer Bid (NCIB)

6.5 Work Sharing Program

6.6 Nuclear Certification CSA N299, Category 2

6.7 Agreement to Acquire Groupe LAR inc. and Certain of its Subsidiaries.

10. U.S. TARIFFS

11. NON-IFRS FINANCIAL MEASURES AND OTHER FINANCIAL MEASURES

11.1 Adjusted EBITDA and Adjusted EBITDA Margin

11.2 Gross Margin as a Percentage of Revenues

11.3 Working Capital and Working Capital Ratio

11.4 Order Backlog

12. SELECTED ANNUAL FINANCIAL INFORMATION

13. ANALYSIS OF OPERATING RESULTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2026

13.1 Revenues and Gross Margin

13.1.1 Revenues

13.1.2 Gross Margin

13.2 Selling and Administrative Expenses

13.3 Amortization

13.4 Net Financial Expenses

13.5 Foreign Exchange (Gain) Loss

13.6 Income Tax Expense

13.7 Net Income, Basic and Diluted Earnings per Share

14. COMMENTS ON QUARTERLY RESULTS

15.1 Operating Activities

15.2 Investment Activities

15.3 Financing Activities

15.4 Payment of Rent and Interest and Payment of Principal on Debt

15.5 Debt Covenants

15.6 Contractual Obligations

15.6.1 Long-Term Debt

17.1.2 Executive Officers and Key Employees

17.2 Performance Share Units Plan (PSU)

17.3 Restricted Share Unit (RSU) Plan

18. DIVIDENDS

19. ORDER BACKLOG

20. FINANCIAL POSITION

21. CURRENT ECONOMIC ENVIRONMENT

22. RELATED PARTY TRANSACTIONS

23. EXTERNAL FACTORS TO WHICH THE CORPORATION'S PERFORMANCE IS EXPOSED

23.1 Global Pandemic

23.2 Exchange Rate

23.3 Risks and Uncertainties Related to the Corporation's Operations

23.3.1 Uncertainties Relating to the World Economy

23.3.2 Bonding Capacity and Irrevocable Letters of Credit

23.3.3 Operational Risks and Uncertainties That Could Have an Impact on the Corporation's Financial Position and Operating Results

24. FINANCIAL INSTRUMENTS

25. ASSESSMENT OF THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES, AND INTERNAL CONTROL OVER FINANCIAL REPORTING

26. DISCLOSURE AND INSIDER TRADING POLICIES

27. MATERIAL ACCOUNTING POLICIES, UNCERTAINTY RELATING TO ESTIMATES AND CRITICAL ACCOUNTING JUDGMENTS

28. ENVIRONMENT

32. ADDITIONAL INFORMATION

More from ADF Group Inc.

ADF Group Inc. Management Reports 2026