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Turpaz Industries Ltd. Interim / Quarterly Report 2025
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Interim / Quarterly Report
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Quarterly Report
for the period ended September 30, 2025
Turpaz Industries Ltd.
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Table of contents
Chapter A
| Board of Directors' Report on | |
|---|---|
| the State of the Company's Affairs | A1 |
Chapter B
B1 Financial Statements as of September 30, 2025
Chapter C
| Effectiveness of Internal Control | |
|---|---|
| Over Financial Reporting | C1 |
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Board of Directors' Report on the State of the Company's Affairs
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This is an English translation of a Hebrew report that was published on the Israel Securities Authority website (MAGNA) on November 12, 2025 (hereafter: the "Hebrew Version"). This English version is only for convenience purposes. This is not an official translation and has no binding force. Whilst reasonable care and skill have been exercised in the preparation hereof, no translation can ever perfectly reflect the Hebrew Version. In the event of any discrepancy between the Hebrew Version and this translation, the Hebrew Version shall prevail.
Directors' Report on the State of the Corporation's Affairs
For the Period Ended September 30, 2025
The Company's Board of Directors is pleased to submit the Board of Directors' Report on the state of affairs of Turpaz Industries Ltd. (hereinafter - the "Company"), for the three and nine months ended September 30, 2025, all in accordance with the Securities Regulations (Periodic and Immediate Reports), 1970.
This report was drawn out assuming that the Description of the Corporation's Business chapter as included in Chapter A to the 2024 Periodic Report, which was published on March 18, 2025 (Ref. No.: 2025-01-017724) (hereinafter - the "2024 Periodic Report") is available to the reader. Unless otherwise stated, terms included in this report shall have the meaning assigned to them in the 2024 Periodic Report.
The implementation of Turpaz's mergers and acquisitions strategy in combination with extensive organic growth, led to record results in the third quarter and first nine months of 2025, with a doubledigit increase in sales, gross profit, operating profit, adjusted EBITDA1 and net income as detailed below:
• In the third quarter of 2025 -
Turpaz's sales grew by approx. 57.4% reaching a record level of approx. USD 76.7 million, an increase arising from a double-digit organic growth of approx. 18.2% and from acquisitions completed in 2024 and the first nine months of 2025. The growth trend continues during the fourth quarter of 2025 .
The Group's results as of the date of this report reflect an annual sales run rate2 exceeding approximately USD 300 million.
Adjusted EBITDA increased by approx. 55.1% and amounted to approx. USD 18.7 million, the rate of adjusted EBITDA of sales amounted to approx. 24.4%, operating profit increased by approx. 73.4% and
1 Adjusted EBITDA means - earnings before interest, taxes, depreciation and amortization, net of non-recurring expenses. It is emphasized that this metric is not based on generally accepted accounting principles; it is a generally accepted metric used to measure the operational efficiency of companies operating in the Company's area of activity. For more information regarding the metric and the use thereof, see Section 8 to the Board of Directors' Report, which is attached to the 2024 annual report.
The annual sales run-rate constitutes forward-looking information, based on the Company's estimates of its annualized sales pace. Such information is based on the Group management's assessments, which may not materialize, or may materialize differently than expected, as a result of inaccurate estimates, changes in the work plan, market changes, or the occurrence of all or part of the risk factors set out in Section 1.28 of Part A of the 2024 periodic report.
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amounted to approx. USD 13.4 million, net income increased by approx. 29.6% and amounted to approx. USD 6 million and Non-GAAP net income grew by approx. 64.1% and amounted to approx. USD 10.9 million.
• In the first nine months of 2025 -
Turpaz's sales grew by approx. 49.0% reaching a record level of approx. USD 200.5 million, an increase arising from a double-digit organic growth3 of approx. 14.0% and from acquisitions completed in 2024 and the first nine months of 2025.
Adjusted EBITDA increased by approx. 54.7% and amounted to approx. USD 46.9 million, the rate of adjusted EBITDA of sales amounted to approx. 23.4%, operating profit increased by approx. 72.6% and amounted to approx. USD 32.9 million, net income increased by approx. 46.3% and amounted to approx. USD 16.6 million and Non-GAAP net income grew by approx. 57.2% and amounted to approx. USD 26.2 million.
3 Organic growth - is after deduction of the effect of exchange rates, on a pro-forma basis, assuming that the acquisitions that were completed in 2024 were consolidated as from January 1, 2024, and the acquisitions that were completed in the first nine months of 2025 were consolidated in a similar way in 2024.
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- In the third quarter of 2025, the cash flow from operating activities amounted to approx. USD 13.3 million compared to approx. USD 4.4 million in the corresponding quarter last year, and in the first nine months of 2025 it amounted to approx. USD 26.5 million compared to USD 15.7 million in the corresponding period last year.
- The Company continues to maintain strong financial stability, with full compliance with its financial covenants towards the banks, reflected in an equity-to-total-assets ratio of approximately 40.8% and a net debt coverage ratio of only about 0.6.
- Since the beginning of 2025, Turpaz completed 5 merger and acquisition transactions in England, Belgium, Poland, France and India, and a further acquisition in South Africa, which is contingent on the fulfillment of conditions precedent4 as detailed below, which expanded and established its geographic deployment, both by entering into new territories and by establishing and expanding activities in existing territories, which allow the leveraging of synergy with the Company's activity and the expansion of the product offering.
4 See details regarding the Nicola-J transaction below.
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Part A - Board of Directors' Explanations to the State of the Corporation's Affairs, Operating Results, Shareholders' Equity and Cash flows
1. General
The Company was incorporated and registered in Israel as a private company limited by shares on February 10, 2011.
On May 23, 2021, the Company completed an IPO based on a post-money valuation of NIS 883 million, its shares were listed on the Tel Aviv Stock Exchange (hereinafter - the "Stock Exchange"), and it became a publicly-traded company, as this term is defined in the Companies Law, 1999.
The Company operates, independently and through its subsidiaries (hereinafter - "Turpaz" or the "Group"), in three operating segments - the fragrance segment, the taste segment, and the specialty fine ingredients segment. As part of this activity, Turpaz is engaged in research, development, production, marketing, distribution and sale of natural and synthetic sweet and savory taste extracts, seasonings, unique functional solutions for the field of baking, raw materials for the meat and baking industries, special (gluten free) flours, which are used mainly in the production of food and beverages; fragrance extracts, used in the production of cosmetics, toiletries, personal care, air care & odor neutralizers products; and specialty fine ingredients which include citrus products and aroma chemicals used in the taste and fragrance industries, and raw materials for the pharma and fine chemicals industries.
For more information regarding those segments, see Section 1.3.2 to Chapter A to the 2024 Periodic Report.
The Turpaz Group has an extensive and diversified range of products, which are developed and produced in the Group's plants across the world.
As of the report's publication date, the Group develops, produces, markets and sells products to more than approx. 4,100 customers in more than 90 countries, and operates 25 manufacturing facilities, R&D centers, laboratories and sales, marketing and regulation offices across the world, which employ approx. 970 employees.
Combined growth strategy:
Turpaz Group's strategy is based on combined growth that includes targets of double-digit growth and improvement of the Group's geographic deployment through M&As and acquisitions of activities that are synergetic to the Group's activity and organic growth, while leveraging the synergies between Group companies in the areas of cross sales, procurement, development, marketing and compliance with regulatory requirements, which contribute to the improvement in profits and profitability while increasing operational efficiency. The Company continues assessing options to acquire additional companies on an ongoing basis, noting the market conditions and the expected contribution from the acquisition, as estimated by the Company. During the reporting period, Turpaz continued the implementation of its growth strategy and expanded its activity in international markets, while enhancing its position in the field
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of taste and fragrance solutions and its geographic deployment across the world. For information regarding acquisitions completed in 2024, see Section 1.4 to Chapter A to the 2024 Periodic Report.
Turpaz Group operates in accordance with an orderly plan it developed to achieve the swift integration of the acquired company into the Group and the enhancement of the global management; this includes, among other things, retaining the existing managements of the acquired companies, which are mostly led by the previous owners for a number of years and integrating those managements into Turpaz's management, enhancing and expanding the product offering and expanding the customer base and integrating Turpaz Group's command and control systems in the sales, R&D, procurement, and finance functions of the acquired companies, in order to achieve swift utilization of synergies. In the opinion of the Company, as of the date of this report, it has not yet utilized the full potential of the acquisitions it made in recent years, and that it is taking action on a current basis to fully utilize and maximize the potential of those acquisitions.
Company's assessments as to the Group's growth rate, the fulfillment of the potential embodied in the acquisitions, the periods during which the potential embodied in the acquisitions and the new recruitments will be fulfilled, and as to the integration of the acquired companies into the Group constitutes forward-looking information, as defined in the Securities Law, which is based on Group management's assessments, and may not materialize or materialize in a manner different than expected, as a result of incorrect assessments, changes to the work plan, changes in the market, or the materialization of all or some of the risk factors listed in Section 1.28 to Chapter A of the 2024 Periodic Report.
Mergers and acquisitions completed since the beginning of 2025:
The Nicola-J transaction
On September 29, 2025, the Company signed - through Sunspray5 - an agreement for the acquisition of 60% of the share capital of Nicola-J Flavours & Fragrances (Pty) Ltd. - a privately-owned South African company (hereinafter - "Nicola-J") from its shareholders, in consideration for approx. USD 6.8 million (approx. ZAR 118.4 million). The consideration is subject to adjustment, which is based on Nicola-J's EBITDA in the period ending February 28, 2026. The transaction is expected to be completed in the next few months, subject to receipt of a regulatory approval in South Africa. The transaction will be finance using own sources. Nicola-J was established in 1997; it is engaged in the development, manufacturing and marketing of sweet and savory flavors, food colors, oleoresins (concentrated plant extracts), and essential oils. Nicola-J has a broad and diversified customer base in South Africa and in other countries in Africa, including Zimbabwe, Mozambique, Zambia, Botswana, and Kenya. Nicola-J operates a manufacturing site, a research and development lab and sales offices in Johannesburg, in proximity to Sunspray's offices
5 Sunspray Solutions Proprietary Limited, a privately-owned South African company, 55% of the share capital of which is held by Turpaz Belgium SRL, a privately-owned Belgian company, which is wholly-owned by Turpaz.
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spanning an area of 5,100 square meters, of which 2,500 square meters are built-up; these facilities are also included in the transaction. Nicola-J's management, which has many years of experience in the South African flavors industry, will continue to lead and manage Nicola-J in the next few years. The agreement includes a call/put option to purchase Nicola-J's remaining shares, which is exercisable starting from three years after the transaction's completion date, at an exercise price based on Nicola-J's business performance during the period from the transaction's completion date through the option's exercise date. It should be clarified that Nicola-J's results will be consolidated with those of the Company only from the transaction completion date. For more information, see immediate report of September 29, 2025 (Ref. No.: 2025-01- 072925).
The Attractive Scent transaction
On July 11, 2025, Turpaz completed - through Turpaz Belgium6 - the acquisition of 68.6% of the share capital of Attractive Scent SAS - a French privately-owned company (hereinafter - "Attractive Scent") located at the heart of the global perfume industry, in Grasse, the South of France - from its founders and other shareholders (hereinafter - the "Sellers"), in consideration for approx. EUR 27.4 million (approx. USD 32.3 million). The transaction was financed through long-term bank financing as detailed in the immediate report of July 10, 2025, which is referred to below. Attractive Scent, which was founded in 2018, develops, manufactures, and markets fragrance extracts for the fine fragrances industry, as well as for personal care products, cosmetics, air care products and candles. Attractive Scent has an extensive and diverse customer base in Europe, the Middle East, Asia, Africa and South America, and it offers a wide range of solutions and products for the global fragrances industry. Attractive Scent operates a manufacturing site, a development laboratory with leading prefemurs - including one of the company's founders - and a sales center in Grasse, South of France, which is considered the capital of the global perfume industry. The founders, who have many years of experience in the French fragrances industry, shall continue to lead and manage Attractive Scent in the next few years, and joined the management team of the Group's fragrances division. The agreement includes a call/put option for the acquisition of Attractive Scent's remaining shares, and under the agreement's terms: (a) 10% of Attractive Scent's shares are exercisable starting one year from the transaction completion date, at an exercise price, which is based on Attractive Scent's business performance in the eight quarters preceding the option exercise date, which will be paid in Turpaz shares to be allocated in accordance with their average price in the 30 calendar days preceding the exercise date; and (b): 21.4% of Attractive Scent's shares are exercisable starting three years from the transaction completion date, at an exercise price, which is based on Attractive Scent's business performance in the eight quarters preceding the option exercise date, which will be paid in cash or Turpaz shares, as to be decided by the Sellers. For more information, see immediate report of July 2, 2025 (Ref.
6 Turpaz Belgium SRL, a privately-owned Belgian company, which is wholly-owned by the Company.
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No.: 2025-01-047692). Attractive Scent's results were consolidated with the Group's financial statements as from July 2025.
The Carotex transaction
On June 3, 2025, Turpaz completed - through its subsidiary Pollena Aroma7 , the acquisition of the activity of Carotex8 , which was founded by the Tatrzański family (hereinafter - "Carotex" and the "Founders", respectively), in consideration for approx. USD 23.4 million (approx. PLN 87.2 million) and an allocation of 22% of Pollena's share capital. The consolidation of Carotex and Pollena's synergistic activities - which are of similar scope - is expected to result in increased operational efficiency and allow Turpaz to enhance and expand its product offering and leverage and utilize the cross-selling options arising from the acquisition, both by expanding its customer base and by expanding its product offering in the taste and fragrances segments, mainly in the beverages sub-segment - an area with a significant potential growth, in which Pollena has hardly had any involvement to date. Carotex, which was founded in 1989, operates in the taste and fragrances industries in Poland. In the taste segment, Carotex develops, manufactures and markets sweet flavors, emulsions, and beverage colorants (both for soft beverages, alcoholic and nonalcoholic) and food products (dairy, baking products, and pharmaceuticals). In the fragrances segment, Carotex develops, manufactures, and markets fragrance extracts for the personal care, cosmetics, toiletries, air care, and detergent industries. Carotex has a broad customer base in Europe, mainly in Poland, and a very broad range of solutions and products, which supplement the solutions and products currently offered by Pollena, mainly in the beverages sub-segment as described above. The founders, which have many years of experience in the field of specialty fine ingredients for food, beverages and fragrance extracts, will join Pollena's management team and support the consolidation of Pollena and Carotex's activities. The agreement includes a call/put option for the acquisition of the allocated Pollena shares as described above; the option may be exercised over one year, starting 4 years after the transaction completion date. The option's exercise price is based on Pollena's EBITDA as from the completion date and through the exercise date of the option. For more information, see immediate report of June 3, 2025 (Ref. No.: 2025- 01-039571). Carotex's results were consolidated with the Group's financial statements as from June 2025.
AFS transaction
Further to its penetration to the taste market in England by purchasing F&E, the Company decided to transfer the taste extracts for vaping products activities in England to a dedicated subsidiary held by Turpaz UK - NGF.9 On February 19, 2025, the said subsidiary completed the acquisition of 100% of the shares of Advance Flavour Solutions Limited, a privately-owned company incorporated in England (hereinafter -
7 Fabryka Substancji Zapachowych "Pollena-Aroma" Spółka z ograniczoną odpowiedzialnością, a privately-owned Polish company - in the share capital and voting rights thereof Turpaz has a 100% (indirect) stake prior to the transaction completion date (hereinafter - "Pollena").
8 Carotex Koncentraty Tatrzański Spółka komandytowa, a limited partnership incorporated in Poland.
9 New Generation Flavors Limited
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"AFS") from its shareholders (hereinafter - the "Agreement" and the "Sellers", respectively), in consideration for GBP 4.5 million (approx. USD 5.7 million) and allocation of 75.01% of NGF's shares to the Sellers. As of the report date, subsequent to the completion of the transaction, Turpaz UK holds 24.99% of NGF's shares, and the remaining shares are held by the Sellers. AFS was established in 2017; it is a leading company in the field of development, manufacturing and marketing of taste extracts for vaping products, and operates an advanced manufacturing facility, which includes R&D laboratories, applications, and development and sales functions near Manchester, England (near F&E's plant in Blackburn). AFS, which is managed by the Sellers, who have extensive experience in the vaping products industry, has unique solutions and technologies, innovative products adapted to emerging market trends and a broad customer base - mostly in the British Isles. For more information, see immediate report of February 19, 2025 (Ref. No.: 2025-01-011694).
Acquisition of Doucy
On February 24, 2025, the Company completed - through Turpaz Belgium - the acquisition of 100% of the share capital of Ets Doucy SRL, a privately-owned Belgian company (hereinafter - "Doucy") and the real estate used by its factory from its shareholders (hereinafter in this section - the "Sellers"), in consideration for EUR 8.3 million (approx. USD 8.5 million), and additional consideration based on Doucy's EBITDA during the period through February 28, 2027. Doucy, which was founded on 1968, has extensive experience and expertise in the field of sweet tastes for food, beverages (soft and alcoholic), colorings and additives for the animal food industry; the company is engaged in the development, manufacturing and marketing of sweet tastes and high-quality solutions for the food and food additives industry, mainly to Benelux markets. Doucy has a production facility, development laboratory and applications in Fernelmont, Belgium (about one hour's drive from Brussels), sprawling an area of 5,600 sq. m, of which 2,644 sq. m are built; the said area was purchased by the Group as part of the transaction. The Sellers, who have many years of experience in the sweet tastes industry will continue functioning as Doucy's managers in the forthcoming years and have joined Turpaz's management team. For more information, see immediate report of February 25, 2025 (Ref. No.: 2025-01-012757).
2. Events during the reporting period and subsequent to balance sheet date
- 2.1. For more information regarding material acquisitions through the report publication date, see Section 1 above.
- 2.2. On August 24, 2025, the Company completed a private offering of 7,105,000 ordinary shares of the Company of no par value, which were allocated to institutional investors. The shares were allocated to the offerees at a price of NIS 46.5 per share, at a total (gross) amount of NIS 330,382,500 (a gross amount of USD 97,746,302). For more information, see immediate reports of August 20, 2025 and August 24, 2025 (Ref. Nos.: 2025-01-061998 and 2025-01-062917, respectively).
- 2.3. For details regarding material events during and after the reporting period, see Note 4 to the financial statements.
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3. Financial position
The total amount of assets and liabilities as of September 30, 2025 was mainly affected by an increase due to completion of acquisition of companies during the period, and an increase due to the weakening of the dollar, mainly against the euro and the shekel compared to December 31, 2024.
Set forth below are key balance sheet data included in the Company's financial statements (in USD thousand)
| September30, 2025 | September30, 2024 | December31, 2024 | Company's explanations compared toDecember 31, 2024 | |
|---|---|---|---|---|
| Current assets | 256,107 | 104,796 | 123,719 | The increase stems mainly from consolidation ofcompanies acquired in the period, an increase inthe scope of the Group's activity, and the issuanceof shares. |
| Non-currentassets | 433,555 | 274,150 | 267,031 | The increase stems mainly from consolidation ofcompanies acquired in the period, includingintangible assets. In addition, the acquisition ofcompanies accounted for by the equity method,and classification of assets held for sale. |
| Total assets | 689,662 | 378,946 | 390,750 | |
| Current liabilities | 127,053 | 82,544 | 70,136 | The increase arises mainly from an increase inshort-term credit for the purpose of financingacquisitions, classification of liabilities in respectof put options as short-term liabilities, and fromthe consolidation of companies acquired in thereportingperiod. |
| Non-currentliabilities | 281,330 | 148,014 | 176,368 | The increase stems mainly from taking long-termloanstofinancetheacquisitions,fromconsolidation of long-term loans of companiesacquired in thereportingperiod,andfromrecognition of a liability in respect of the putoptions. |
| Total equity | 281,279 | 148,388 | 144,246 | The increase arises mainly from the issuance ofshares, an approx. USD16.6 million net income inthe reporting period, exercise of non-marketableoptions of employees and advisors, and translationdifferences due to changes in exchange rates ofcurrencies. |
| Total liabilitiesand equity | 689,662 | 378,946 | 390,750 |
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4. Operating results
4.1. Set forth below is an analysis of the operating results for the three months ended September 30, 2024 and 2025 (in accordance with the financial statements, and the explanations for the key changes in those data in USD thousand):
| Line item | For the threemonth periodended September30, 2025 | For the three-monthperiod endedSeptember 30, 2024 | Company's explanations compared to thecorresponding period last year |
|---|---|---|---|
| Revenues fromsales | 76,704 | 48,738 | Revenues from sales increased by approx.due to extensive organic growth10 of57.4%approx. 18.2%and due to growth arising fromcompanies, whose acquisition was completedin 2024 and the first nine months of 2025. Theeffect of exchange rates of foreign currenciescontributed approx. 5.4% of sales. |
| Cost of sales | 44,984 | 1.1.28,793 | Gross profit increased by approx. 59%, |
| Gross profit(% of sales) | 31,72041.4% | 19,94540.9% | mainly in view of the increase in sales. Theimprovementinprofitabilityisduetostreamlining measures and high growth rate. |
| Research anddevelopmentexpenses(% of sales) | 3,1094.1% | 1,8133.7% | The increase arises from the consolidation ofthe results of operations of companies, whoseacquisition was completed during 2024 andthefirstninemonthsof2025,andamortization of intangible assets in respect ofthose acquisitions. |
| Selling andmarketing expenses(% of sales) | 7,6039.9% | 4,3308.9% | The increase arises from the consolidation ofthe results of operations of companies, whoseacquisition was completed during 2024 andthefirstninemonthsof2025,andamortization of intangible assets in respect ofthose acquisitions. |
| General andadministrativeexpenses(% of sales) | 8,03210.5% | 5,50211.3% | The increase in general and administrativeexpenses arises from the consolidation ofcompanies, the acquisition of which wascompleted during 2024 and in the first ninemonths of 2025. Despite the above increase,the rate of expenses out of total sales improveddue to the fixed expenses component. |
| Company's share inlosses (profits) ofcompaniesaccounted for by theequity method, net | (34) | - | Gains in respect of non-consolidated investees |
| Other expenses(income) | (363) | 586 | Arises from the award of compensation by thegovernment in an amount of approximatelyUSD 1 million in respect of the Iron SwordsWar, net of expenses related to the acquisitionof companies. |
10 See footnote 2 above.
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| Line item | For the threemonth periodended September30, 2025 | For the three-monthperiod endedSeptember 30, 2024 | Company's explanations compared to thecorresponding period last year |
|---|---|---|---|
| Income fromordinaryoperations(% of sales) | 13,37317.4% | 7,71415.8% | The increase stems mainly from an increase insales and the steps taken to increase efficiencyand synergies that were reflected in 2024 andthe first nine months of 2025. |
| Financing expenses,net | 4,725 | 1,581 | The increase stems mainly from non-cashfinance expenses in respect of put options,interest expenses in respect of loans taken bythe Company from banking corporations tofinance acquisitions and exchange differencesexpenses. |
| Taxes on income(Effective tax %) | 2,64130.5% | 1,49724.4% | The change arises from changes in the pre-taxprofit mix between the different countries inwhich the Group operates, and from non-cashfinance expenses in respect of put options,regarding which no tax shield is in place. |
| Net income for theperiod(% of sales) | 6,0077.8% | 4,6369.5% | The net income increased by approx. 29.6%,mainly due to the growth in profits, completedacquisitionsandthesynergyarisingtherefrom. |
| Non-GAAP netincome11(% of sales) | 10,89014.2% | 6,63613.6% | An increase of approx. 64.1%, arising mainlyfromthegrowthinprofits,completedacquisitionsandthesynergyarisingtherefrom. |
| EBITDA | 18,889 | 11,595 | The adjusted EBITDA increased by approx. |
| Adj. EBITDA12(% of sales) | 18,68324.4% | 12,04724.7% | 55.1%compared to the corresponding periodlast year. The increase in the rate of adjustedEBITDA stemmed from the reasons listedabove in this table. |
11See Section 8.2 below.
12See Section 8.1 below.
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4.2. Set forth below is an analysis of the operating results for the nine months ended September 30, 2024 and 2025 (in accordance with the financial statements, and the explanations for the key changes in those data in USD thousand):
| Line item | For the ninemonth periodended September30, 2025 | For the ninemonth periodended September30, 2024 | For theperiod endedDecember 31,2024 | Company's explanationscompared to thecorresponding period last year |
|---|---|---|---|---|
| Revenues fromsales | 200,481 | 134,519 | 188,948 | Revenues from sales increased byapprox. 49.0%due to extensivegrowth13organicofapprox.14.0%and due to growth arisingfromcompanies,whoseacquisitionwascompletedin2024 and the first nine months of2025. The effect of exchangeratesofforeigncurrenciescontributedapprox.2.7%ofsales. |
| Cost of sales | 120,527 | 82,092 | 1.2.115,289 | Gross profit increased by approx. |
| Gross profit(% of sales) | 79,95439.9% | 52,42739.0% | 73,65939.0% | 52.5%, mainly in view of theincrease in sales.The improvement in profitabilityis due to streamlining measuresand high growth rate. |
| Research anddevelopmentexpenses(% of sales) | 7,5903.8% | 5,1183.8% | 7,0343.7% | The increase arises from theconsolidation of the results ofoperations of companies, whoseacquisition was completed during2024 and the first nine months of2025,andamortizationofintangible assets in respect ofthose acquisitions. |
| Selling andmarketingexpenses(% of sales) | 18,8339.4% | 11,2808.4% | 16,2738.6% | The increase arises from theconsolidation of the results ofoperations of companies, whoseacquisition was completed during2024 and the first nine months of2025,andamortizationofintangible assets in respect ofthose acquisitions. |
| General andadministrativeexpenses(% of sales) | 21,43810.7% | 15,72911.7% | 22,12411.7% | Theincreaseingeneralandadministrativeexpensesarisesfromtheconsolidationofcompanies, the acquisition ofwhichwascompletedduring2024 and in the first nine monthsof2025.Despitetheaboveincrease, the rate of expenses outof total sales improved due to thefixed expenses component. |
13 See footnote 2 above.
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| Line item | For the ninemonth periodended September30, 2025 | For the ninemonth periodended September30, 2024 | For theperiod endedDecember 31,2024 | Company's explanationscompared to thecorresponding period last year |
|---|---|---|---|---|
| Company'sshare in losses(profits) ofcompaniesaccounted for bythe equitymethod, net | (633) | - | (36) | Gainsinrespectofnonconsolidated investees |
| Other expenses(income) | (203) | 1,222 | 532 | Arisesfromtheawardofcompensation by the governmentin an amount of approximatelyUSD 1 million in respect of theIron Swords War, net of expensespertainingtoacquisitionofcompanies. |
| Income fromordinaryoperations(% of sales) | 32,92916.4% | 19,07814.2% | 27,73214.7% | The increase stems mainly froman increase in sales and the stepstaken to increase efficiency andsynergies that were reflected in2024 and the first nine months of2025. |
| Financingexpenses, net | 10,287 | 4,040 | 6,680 | The increase stems mainly fromnon-cash finance expenses inrespect of put options and interestexpenses in respect of loans takenby the Company from bankingcorporationstofinanceacquisitions. |
| Taxes onincome(Effective tax%) | 6,00226.5% | 3,66124.3% | 5,30725.2% | The change arises from changesin the pre-tax profit mix betweenthe different countries in whichthe Group operates, and fromnon-cash finance expenses inrespect of put options, regardingwhich no tax shield is in place. |
| Net incomefrom continuedoperations(% of sales) | 16,6408.3% | 11,3778.5% | 15,7458.3% | The net income increased byapprox. 46.3%, mainly due to thegrowthinprofits,completedacquisitionsandthesynergyarising therefrom. |
| Net incomefromdiscontinuedoperation | - | - | 1650.1% | |
| Net income forthe period(% of sales) | 16,6408.3% | 11,3778.5% | 15,9108.4% | |
| Non-GAAP netincome14(% of sales) | 26,23013.1% | 16,69012.4% | 23,31712.3% | An increase of approx. 57.2%,arising mainly from the growth inprofits, completed acquisitions |
14See Section 8.2 below.
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| Line item | For the ninemonth periodended September30, 2025 | For the ninemonth periodended September30, 2024 | For theperiod endedDecember 31,2024 | Company's explanationscompared to thecorresponding period last year |
|---|---|---|---|---|
| andthesynergyarisingtherefrom. | ||||
| EBITDA | 46,793 | 29,200 | 41,599 | The adjusted EBITDA increased |
| Adj.EBITDA15(% of sales) | 46,93623.4% | 30,34222.6% | 42,97522.7% | by approx. 54.7%compared tothecorrespondingperiodlastyear. The increase in the rate ofadjusted EBITDA stemmed fromthe reasons listed above in thistable. |
4.3. Set forth below is an analysis of the operating results for the three months ended September 30, 2024 and 2025, by segments (in USD thousand):
| Segment | For thethree-monthperiodendedSeptember30, 2025 | For thethree-monthperiodendedSeptember30, 2024 | Company's explanations to the change inthe third quarter of 2025 compared tothe third quarter of 2024 | |
|---|---|---|---|---|
| Revenues(% of Groupsales) | 52,98669.1% | 36,07674.0% | Revenues increased by approx. 46.9%,mainly as a result of acquisitions completedduring 2024 and the first nine months of | |
| Tastesegment | Operatingprofit(% of sales) | 10,68520.2% | 5,88516.3% | 2025, and as a result of organic growth ofapprox. 12.5%. The effect of exchange ratesof foreign currencies contributed approx.5.5% of sales. The increase in profitabilitystems from operational streamlining andleveraging of synergies in the segment,alongside the increase in sales and the fixedexpenses component. |
| Revenues(% of Groupsales) | 15,04319.6% | 8,81118.1% | Revenues increased by approx. 70.7%,mainly as a result of acquisitions completedduring the first nine months of 2025, and as | |
| Fragrancessegment | Operatingprofit(% of sales) | 3,95626.3% | 2,41527.4% | a result of organic growth of approx. 8.4%.The effect of exchange rates of foreigncurrencies contributed approx. 6.2% ofsales. |
| Revenues(% of Groupsales) | 8,67511.3% | 3,8517.9% | Revenues increased by approx. 125.3%as aresult of organic growth of approx. 121.4%,arising from successful implementation of | |
| Specialtyfineingredientssegment | Operatingprofit(% of sales) | 1,80820.8% | 1,56140.5% | steps taken by the Company to change itsproduct mix by focusing on and introducingaroma chemicals and citrus products to thetaste and fragrance industries.This moveincluded the improvement of operatingprocesses and the introduction of newproducts with high added-value, which are |
15See Section 8.1 below.
{17}------------------------------------------------
| Segment | For thethree-monthperiodendedSeptember30, 2025 | For thethree-monthperiodendedSeptember30, 2024 | Company's explanations to the change inthe third quarter of 2025 compared tothe third quarter of 2024 | |
|---|---|---|---|---|
| expected to contribute to improvement inprofitability in the forthcoming quarters.16 Inaddition, customers resumed the purchase ofproducts from Chemada's plant located inthe Gaza Envelope area, having switched toalternative suppliers during the Iron SwordsWar. The effect of exchange rates of foreigncurrencies contributed approx. 1.7% ofsales.The change in profitability mainly resultsfromthereceiptofgovernmentcompensation in respect of the Iron SwordsWar, amounting to approximately USD 1.7millioninthethirdquarterof2024,compared to approximately USD 1 millionin the third quarter of 2025. | ||||
| Unallocated | Revenues | - | - | |
| jointexpenses | Operatingprofit | (3,076) | (2,147) | |
| Revenues | 76,704 | 48,738 | ||
| Total | Operatingprofit(% of sales) | 13,37317.4% | 7,71415.8% |
16Company's assessments as to the effect of the processes detailed above on the improvement in profitability constitutes forward-looking information, as defined in the Securities Law, which is based on Group management's assessments, and may not materialize or materialize in a manner different than expected, as a result of incorrect assessments, changes to the work plan, changes in the market, or the materialization of all or some of the risk factors listed in Section 1.28 to Chapter A of the 2024 Periodic Report.
{18}------------------------------------------------
4.4. Set forth below is an analysis of the operating results for the nine months ended September 30, 2024 and 2025, by segments (in USD thousand):
| Segment | For theninemonthperiodendedSeptember30, 2025 | For thenine-monthperiodendedSeptember30, 2024 | For the 12-monthperiodendedDecember31, 2024 | Company's explanations to thechange between the first nine monthsof 2024 and the first nine months of2025 | |
|---|---|---|---|---|---|
| Revenues(% of Groupsales) | 142,71171.2% | 94,81770.5% | 135,54271.7% | Revenues increased by approx. 50.5%,mainlyasaresultofacquisitionscompleted during 2024 and the first nine | |
| Tastesegment | Operatingprofit(% of sales) | 28,52320.0% | 16,17317.1% | 23,57917.4% | months of 2025, and as a result oforganic growth of approx. 9.3%. Theeffect of exchange rates of foreigncurrencies contributed approx. 2.7% ofsales. The increase in profitability stemsfromoperationalstreamliningandleveraging of synergies in the segment,alongside the increase in sales and thefixed expenses component. |
| Fragrances | Revenues(% of Groupsales) | 33,72216.8% | 26,56919.8% | 34,94518.5% | Revenues increased by approx. 26.9%,mainlyasaresultofacquisitionscompleted during the first nine months |
| segment | Operatingprofit(% of sales) | 8,94926.5% | 7,28827.4% | 9,09226.0% | of 2025, and as a result of organicgrowth of approx. 5.3%. The effect ofexchange rates of foreign currenciescontributed approx. 3.7% of sales. |
| Revenues(% of Groupsales) | 24,06912.0% | 13,1369.7% | 18,4649.7% | Revenues increased by approx. 83.2%as a result of organic growth of approx.81.9%,arisingfromsuccessful | |
| Specialtyfineingredientssegment | Operatingprofit(% of sales) | 2,96212.3% | 1,53611.7% | 3,05216.5% | implementation of steps taken by theCompany to change its product mix byfocusing on and introducing aromachemicals and citrus products to thetaste and fragrance industries.Thismove included the improvement ofoperating processes and the introductionof new products with high added-value,which are expected to contribute toimprovementinprofitability in thequarters.17forthcomingInaddition,customers resumed the purchase ofproducts from Chemada's plant locatedin the Gaza Envelope area, havingswitched to alternative suppliers duringthe Iron Swords War. The effect ofexchange rates of foreign currenciescontributed approx. 0.7% of sales. |
| Revenues | (21) | (3) | (3) |
17 See footnote 15 above.
{19}------------------------------------------------
| Segment | For theninemonthperiodendedSeptember30, 2025 | For thenine-monthperiodendedSeptember30, 2024 | For the 12-monthperiodendedDecember31, 2024 | Company's explanations to thechange between the first nine monthsof 2024 and the first nine months of2025 | |
|---|---|---|---|---|---|
| Unallocatedjointexpenses | Operatingprofit | (7,505) | (5,919) | (7,991) | |
| Revenues | 200,481 | 134,519 | 188,948 | ||
| Total | Operatingprofit(% of sales) | 32,92916.4% | 19,07814.2% | 27,73214.7% |
5. Liquidity
As of September 30, 2025, the Company has a cash balance of USD 139,355 thousand, and continues to finance the double-digit growth of the Group's activity. Set forth below are the key components of the cash flows and the way they were utilized (in USD thousand):
| For the threemonth periodendedSeptember 30,2025 | For the threemonth periodendedSeptember 30,2024 | Company's explanations to the change in thethird quarter of 2025 compared to the thirdquarter of 2024 | |
|---|---|---|---|
| Net cashprovided byoperatingactivities | 13,349 | 4,443 | The change arises mainly from an increase in netincome for the period and a change in workingcapital balances. |
| Net cash used ininvestingactivities | (29,911) | (29,245) | |
| Net cashprovided byfinancingactivities | 122,173 | 28,368 | The change arises mainly from the issuance ofshares at the total amount of approx. USD97.2million offset against approx. USD4.1 million inloan repayments, compared to approx. USD1million in the corresponding period last year. |
| Exchangedifferences inrespect of cashand cashequivalents | 2,741 | 913 | |
| Total change incash and cashequivalents | 108,352 | 4,479 |
{20}------------------------------------------------
| For the ninemonth periodendedSeptember30, 2025 | For the ninemonth periodendedSeptember30, 2024 | For the 12-monthperiod endedDecember31, 2024 | Company's explanations to thechange between the first ninemonths of 2024 and the first ninemonths of 2025 | |
|---|---|---|---|---|
| Net cashprovided byoperatingactivities | 26,483 | 15,697 | 21,116 | The change arises mainly from anincrease in net income for the periodand a change in working capitalbalancesforthepurposeofsupporting the extensive growth insales compared to the correspondingperiod last year. |
| Net cash usedin investingactivities | (73,480) | (72,094) | (83,247) | Thechangearisesmainlyfromacquisition of property, plant andequipment totaling approx. USD8.2million compared to approx. USD5.5million in the corresponding periodlast year, offset against acquisition ofcompaniesandrepaymentofliabilities in respect thereof totalingapprox. USD65.5 million comparedto approx. USD66.7 million in thecorresponding period last year. |
| Net cashprovided byfinancingactivities | 154,881 | 55,472 | 65,326 | The change arises mainly from theissuance of shares at the total amountof approx. USD97.2 million. |
| Exchangedifferences inrespect of cashand cashequivalents | 5,545 | 280 | (1,086) | |
| Total changein cash andcashequivalents | 113,429 | (645) | 2,109 |
{21}------------------------------------------------
6. Financing sources
The Company funds its activities mainly from cash flows from operating activities; it finances the acquisition of the companies through own sources, long-term loans and short-term credit. For information about the Company's main financing sources, see Section 1.20 to Chapter A (Description of the Company's Business), and Note 16 to the financial statements attached to the 2024 Periodic Report.
| Line item | Data as ofSeptember 30, 2025 | Data as ofDecember 31, 2024 | ||||
|---|---|---|---|---|---|---|
| USD thousand | % oftotalbalancesheet | USD thousand | % of totalbalance sheet | |||
| Equity | 281,279 | 40.8% | 144,246 | 36.9% | ||
| Other long-term liabilities | 163,735 | 23.7% | 102,592 | 26.3% | ||
| Long-term liabilitiesfrom banks,net of current maturities | 117,595 | 17.1% | 73,776 | 18.9% | ||
| Short-term credit | 63,838 | 9.3% | 27,772 | 7.1% | ||
| Suppliers credit | 26,790 | 3.9% | 19,402 | 5.0% | ||
| Other long-term payables | 36,425 | 5.3% | 22,962 | 5.9% | ||
| Total | 689,662 | 100% | 390,750 | 100% |
The average amount of the long-term loans in the first nine months of 2025 was approx. USD 95,686 thousand.
The average amount of the short-term credit in the first nine months of 2025 was approx. USD 45,805 thousand.
In the opinion of the Company, the expected further interest rate cuts will have a positive effect on finance expenses.
As of September 30, 2025, the Company's working capital is approx. USD 129.1 million (approx. 42.1% of sales), compared to working capital of USD 22.3 million (approx. 11.4% of sales) as of September 30, 2024, and working capital of approx. USD 53.6 million as of December 31, 2024 (approx. 24.4% of sales).
As of September 30, 2025, the Company's operating working capital18 is approx. USD 82.3 million (approx. 26.8% of sales), compared to operating working capital of approx. USD 56.1 million (approx. 27.5% of sales) as of September 30, 2024, and approx. USD 60.7 million (approx. 27.2% of sales) as of December 31, 2024.
The Company's net debt19 balance as of September 30, 2025, is approx. USD 42.1 million compared to net debt of approx. USD 71.1 million as of September 30, 2024, and approx. USD 76 million as of December 31, 2024.
18Operating working capital means - trade receivable plus the balance of inventory and net of trade payables.
19 Debt net of cash.
{22}------------------------------------------------
7. Financial covenants set by the banks
Set forth below are the Company's financial covenants as of September 30, 2025:
(A) Equity to assets - the equity shall not be lower than USD 80 million and 20% of total assets at any given time.
As of the date of this report, the Company's equity stands at approx. 40.8% of total assets.
(B) Debt coverage ratio - shall not exceed 3.5 at any given time.
As of the date of this report, the Company's debt coverage ratio stands at approx. 0.6.
As of the publication date of this report, the Company does not have loans, whose outstanding balances meet the materiality criteria in accordance with the Israel Securities Authority's position on reportable credit events and the qualitative thresholds as of the end of the reporting period. Accordingly, loans that do not meet the materiality thresholds as of the end of the reporting period were not included in this report, even if disclosure in respect thereof is provided in previous periodic reports.
8. Non-GAAP data
8.1. Adjusted EBITDA
Adjusted EBITDA means - earnings before interest, taxes, depreciation and amortization, net of non-recurring expenses as described below.20 Set forth below is a breakdown of the adjustments between the operating profit and adjusted EBITDA (USD in thousands):
| For the nine-month periodended September 30 | For the three-month periodended September 30 | |||||
|---|---|---|---|---|---|---|
| Section | 2025 | 2024 | 2025 | 2024 | ||
| Operatingprofitpresentedstatements | 32,929 | 19,078 | 13,373 | 7,714 | ||
| Depreciationexpenses | Property,plantandequipment | 4,137 | 3,571 | 1,569 | 1,361 | |
| Intangible asset | 5,828 | 3,572 | 2,437 | 1,371 | ||
| Leases | 2,937 | 2,141 | 1,151 | 801 | ||
| Amortization expenses in respect of share | 962 | 838 | 359 | 348 | ||
| based payment to employees | ||||||
| One-off expenses (income) | 143 | 1,142 | (206) | 451 | ||
| Adj. EBITDA | 46,936 | 30,342 | 18,683 | 12,046 | ||
| (% of sales) | 23.4% | 22.6% | 24.4% | 24.7% |
8.2. Non-GAAP net income
Non-GAAP net income - means net income plus amortization in respect of intangible assets and sharebased payment to employees, financing expenses in respect of put options and non-recurring expenses
20 This metric is a generally accepted metric used to measure the operational efficiency of companies operating in the Company's area of activity. This metric is based on data presented in the Company's audited financial statements as described above; however, it is not based on generally accepted accounting principles and it is not audited or reviewed by the Company's independent auditors, nor does it constitute a substitute for the information included in the Company's financial statements.
{23}------------------------------------------------
net of the tax in respect of those expenses.21Set forth below is a breakdown of the adjustments between the net income and non-GAAP net income (USD in thousands):
| For the nine-monthperiod ended September30 | For the three-month periodended September 30 | |||
|---|---|---|---|---|
| Section | 2025 | 2024 | 2025 | 2024 |
| Net income presented in the financialstatements | 16,640 | 11,377 | 6,007 | 4,636 |
| Amortizationexpensesinrespectofintangibles and share-based payment toemployees22 | 6,186 | 4,140 | 2,545 | 1,620 |
| Financing expenses in respect of putoptions | 4,464 | 968 | 3,024 | 306 |
| One-off expenses (income) | 143 | 1,142 | (206) | 451 |
| Net of the tax effect | (1,203) | (937) | (480) | (377) |
| Non-GAAP net income(% of sales) | 26,23013.1% | 16,69012.4% | 10,89014.2% | 6,63613.6% |
The Company presents its non-GAAP net income in order to more accurately reflect its net profitability given its acquisition-led growth strategy. This data neutralizes non-cash expenses, and specifically amortization of intangible assets - amortization of customer relations and knowhow and amortization in respect of share-based payment to employees and revaluation expenses in respect of options given to sellers.
9. For more information regarding the Iron Swords War and the effects of inflation and interest rates, see Sections 1.8.5-1.8.6 to Chapter A to the 2024 Periodic Report.
10. Valuations and estimates
Information regarding provisional valuation of the acquisition of Carotex, which was carried out by an external appraiser*
| Identifyingthevaluation's | Purchase price allocation of Carotex |
|---|---|
| subject matter: | |
| Valuation date: | June 2, 2025 |
| Valueofthevaluation's | 1. Total purchase consideration: PLN157,270 thousand |
| subjectmatterasperthe | a.Cash consideration -PLN87,200 thousand |
| valuation: | b.Dividend -PLN11,625 thousand |
| c.Value of purchase option -PLN58,445 thousand | |
| 2. Customer relations: PLN44,076 thousand | |
| 3. Knowhow: PLN18,981 thousand | |
| Details abut the appraiser: | This provisional valuation was carried out by Moore Corporate Finance |
| Ltd., which specializes in valuations, due diligences, economic opinions | |
| on legal proceedings and other economic works, both for publicly-traded | |
| companies and for privately-held companies. | |
| The work was carried out by a team headed by Asaf Ravkaie (CPA), a | |
| partner in Moore Corporate Finance Ltd., who has more than 20 years of | |
| experience in advising local and international companies; Mr. Ravkaie has | |
| a BA in Economics and Accounting from the Tel Aviv University, and an | |
| MA in Economics from the Tel Aviv University. |
21This metric is based on data presented in the Company's audited financial statements as described above; however, it is not based on generally accepted accounting principles and it is not audited or reviewed by the Company's independent auditors, nor does it constitute a substitute for the information included in the Company's financial statements.
22For details regarding amortization expenses see Section 8 above.
{24}------------------------------------------------
| Identifying the valuation's subject matter: | Purchase price allocation of Carotex |
|---|---|
| Is there an indemnification agreement with the appraiser? | In accordance with the engagement agreement, if the appraiser will be required to pay any amount to a third party in connection with the performance of the services, whether as part of a legal proceeding, or any other binding proceeding, the commissioner of the valuation undertakes to indemnify the appraiser in respect of any such amount it will pay, in excess of an amount equal to three times the appraiser's fees, unless it is determined that the appraiser acted maliciously and/or negligently, in which case no indemnification obligation will apply. |
| The valuation model used by the appraiser: | The purchase price allocation was carried out in accordance with the provisions and principles of IFRS 3. Customer relations the income approach the MPEEM method. Knowhow the income approach the royalty relief method. |
| The assumptions, based on which the appraiser carried out the valuation, in accordance with the valuation model: | Key assumptions in the valuation of a customer relations intangible asset Discount rate 13% Attrition rate 20% Useful life - 10 years Key assumptions in the valuation of a knowhow intangible asset Discount rate 13% Royalties rate 10% Useful life - 20 years |
* As of the date of this report the valuation has not yet been completed.
Information regarding provisional valuation of the acquisition of Attractive Scent, that was carried out by the Company*
| the Company. | ||||
|---|---|---|---|---|
| Identifying the valuation's subject matter: | Purchase price allocation of Attractive Scent | |||
| Valuation date: | July 11, 2025 | |||
| Value of the valuation's | 1. Total purchase consideration: EUR 48,663 thousand | |||
| subject matter as per the | a. Cash consideration - EUR 22,926 thousand | |||
| valuation: | b. Dividend - EUR 1,120 thousand | |||
| c. Holdback - EUR 4,086 thousand | ||||
| d. Non-controlling interests - EUR 5,815 | ||||
| e. Value of purchase option - EUR 14,716 thousand | ||||
| 2. Customer relations - EUR 6,146 thousand | ||||
| 3. Knowhow: EUR 9,046 thousand | ||||
| Details abut the appraiser: | Intrinsic value valuation. | |||
| The valuation model used by | The purchase price allocation was carried out in accordance with the | |||
| the appraiser: | provisions and principles of IFRS 3. | |||
| Customer relations the income approach the MPEEM method. | ||||
| Knowhow the income approach the royalty relief method. | ||||
| The assumptions, based on | Key assumptions in the valuation of a customer relations intangible asset | |||
| which the appraiser carried out | Discount rate 10.7% | |||
| the valuation, in accordance with the valuation model: | Attrition rate 20% | |||
| with the variation model. | Useful life - 10 years | |||
| Key assumptions in the valuation of a knowhow intangible asset | ||||
| Discount rate 10.7% | ||||
| Royalties rate 10% | ||||
| Useful life - 20 years |
{25}------------------------------------------------
* The final valuation shall be carried out by an external appraiser, and as of the date of this report it has not yet been completed.
The Board of Directors wishes to thank the Company's management and its employees for the results achieved in the third quarter of 2025.
Dr. Israel Leshem, Director23
Karen Cohen Khazon, CEO and Chairperson of the Board of Directors
Date: November 11, 2025
23 Director authorized by the Board of Directors to sign.
{26}------------------------------------------------
Financial Statements
as of September 30, 2025
{27}------------------------------------------------
TURPAZ INDUSTRIES LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2025
UNAUDITED
INDEX
| Page | |
|---|---|
| Review of Interim Consolidated Financial Statements | 2 |
| Consolidated Statements of Financial Position | 3 -4 |
| Consolidated Statements of Comprehensive Income | 5 |
| Consolidated Statements of Changes in Equity | 6 –8 |
| Consolidated Statements of Cash Flows | 9 –11 |
| Notes to Interim Consolidated Financial Statements | 12 -22 |
{28}------------------------------------------------
Kost Forer Gabbay & Kasierer 144 Menachem Begin Road, Building A, Tel-Aviv 6492102, Israel
Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com
Auditors' review report to the shareholders of Turpaz Industries Ltd.
Introduction
We have reviewed the accompanying financial information of Turpaz Industries Ltd. and subsidiaries ("the Company"), which comprises the condensed consolidated statement of financial position as of September 30, 2025 and the related condensed consolidated statements of comprehensive income, changes in equity and cash flows for the periods of nine and three months then ended. The Company's board of directors and management are responsible for the preparation and presentation of interim financial information for these periods in accordance with IAS 34, "Interim Financial Reporting" and are responsible for the preparation of this interim financial information in accordance with Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. Our responsibility is to express a conclusion on this interim financial information based on our review.
We did not review the condensed interim financial information of certain subsidiaries, whose assets included in consolidation constitute approximately 2.4% of total consolidated assets as of September 30, 2025, and whose revenues included in consolidation constitute approximately 5.4% and approximately 4.7% of total consolidated revenues for the periods of nine and three months then ended, respectively. The condensed interim financial information of those companies was reviewed by other auditors, whose review reports have been furnished to us, and our conclusion, insofar as it relates to the financial information in respect of those companies, is based on the review reports of other auditors.
Scope of review
We conducted our review in accordance with Standard on Review Engagements (Israel) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" of the Institute of Certified Public Accounts in Israel. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.
In addition to the abovementioned, based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying interim financial information does not comply, in all material respects, with the disclosure requirements of Chapter D to the Securities Regulations (Periodic and Immediate Reports), 1970.
Tel-Aviv, Israel November 11, 2025 KOST FORER GABBAY & KASIERER A Member of Ernst & Young Global
{29}------------------------------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | 139,355 | 23,172 | 25,926 | |||
| Trade receivables | 56,854 | 36,535 | 38,587 | |||
| Other accounts receivable | 6,597 | 6,153 | 4,748 | |||
| Inventories | 52,281 | 38,936 | 41,544 | |||
| Assets held for sale | - | - | 12,914 | |||
| Financial assets | 1,020 | - | - | |||
| 256,107 | 104,796 | 123,719 | ||||
| NON-CURRENT ASSETS: | ||||||
| Deferred taxes | 2,149 | 545 | 1,321 | |||
| Property, plant and equipment, net | 67,098 | 52,967 | 52,193 | |||
| Right-of-use assets, net | 24,337 | 16,910 | 17,263 | |||
| Intangible assets, net | 314,947 | 202,819 | 193,550 | |||
| Investment in companies accounted for at equity | 25,024 | - | 1,871 | |||
| Financial assets | - | 909 | 833 | |||
| 433,555 | 274,150 | 267,031 | ||||
| 689,662 | 378,946 | 390,750 |
{30}------------------------------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| September 30, | December 31, | ||
|---|---|---|---|
| 2025 | 2024 | 2024 | |
| Unaudited | Audited | ||
| U.S. dollars in thousands | |||
| LIABILITIES AND EQUITY | |||
| CURRENT LIABILITIES:Credit from banksand current maturities of long-termloans from banks and othersTrade payablesOther accounts payableShort-term liabilities in respect of acquisition of activityCurrent maturitiesof lease liabilitiesLiabilities attributable to assets held for sale | 63,83826,79022,28610,0384,101- | 41,60819,33315,6783,3502,575- | 27,77219,40215,4453,5252,8281,164 |
| 127,053 | 82,544 | 70,136 | |
| NON-CURRENT LIABILITIES:Long-term loans from banks, less current maturitiesLong-term loans from others, less current maturitiesProvision for waste removalLong-term leases liabilitiesLong-term liabilities in respect of acquisition of activityDeferred taxesEmployee benefit liabilitiesOther long-term payables | 117,595-1,17621,623122,17217,950814- | 52,46421541315,31565,52413,6514293 | 73,7763701,17615,50972,77312,333431- |
| 281,330 | 148,014 | 176,368 | |
| EQUITY:Equity attributable to equity holders of the company:Share capital(*)Share premiumOther capital reservesReserve in respect of translation differencesRetained earnings | 1177,136(6,755)2,76565,874 | 175,270(6,304)(4,374)53,490 | 175,552(6,023)(7,369)52,940 |
| Non-controlling interests | 239,02142,258 | 118,08330,305 | 115,10129,145 |
| Totalequity | 281,279 | 148,388 | 144,246 |
| 689,662 | 378,946 | 390,750 |
(*) Less than $ 1 thousand.
| November 11, 2025 | |||
|---|---|---|---|
| Date of approval of the | Karen Cohen Khazon | Dr. Israel Leshem | Guy Gill |
| financial statements | Chair of the Board and | Director | Executive Vice |
| CEO | Authorized by the Board to | President and CFO | |
| sign the financial statements | |||
| on November 11, 2025 |
{31}------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Nine monSeptem2025 | ber 30,2024Unau | Year endedDecember 31,2024Audited | |||
|---|---|---|---|---|---|
| dollars in ti | housands (ex | cept per sn | are data) | ||
| Revenues from salesCost of sales | 200,481120,527 | 134,51982,092 | 76,70444,984 | 48,73828,793 | 188,948115,289 |
| Gross profit | 79,954 | 52,427 | 31,720 | 19,945 | 73,659 |
| Research and development expensesSelling and marketing expensesGeneral and administrative expensesCompany's share of earnings of | 7,59018,83321,438 | 5,11811,28015,729 | 3,1097,6038,032 | 1,8134,3305,502 | 7,03416,27322,124 |
| companies accounted for at equity, netOther expenses (income) | (633)(203) | 1,222 | (34) (363) | 586 | (36)532 |
| Operating incomeFinance expenses, net | 32,92910,287 | 19,0784,040 | 13,3734,725 | 7,7141,581 | 27,7326,680 |
| Income before taxes on income Taxes on income | 22,6426,002 | 15,0383,661 | 8,6482,641 | 6,1331,497 | 21,0525,307 |
| Net income from continuing operationsIncome from discontinued operation | 16,640 | 11,377 | 6,007 | 4,636 | 15,745165 |
| Net income | 16,640 | 11,377 | 6,007 | 4,636 | 15,910 |
| Other comprehensive income (net of tax effect): Amounts that will not be reclassified subsequently to profit or loss: Adjustments arising from translating financial statements from functional currency to presentation currency Amounts that will be or that have been reclassified to profit or loss when specific conditions are met: Adjustments arising from translating financial statements of foreign | 14,662 | (3,561) | 5,790 | 1,214 | (1,113) |
| operations | (574) | 4,359 | (2,705) | 1,583 | (3,320) |
| Comprehensive income | 30,728 | 12,175 | 9,092 | 7,433 | 11,477 |
| Net income attributable to:Equity holders of the CompanyNon-controlling interests | 12,9343,706 | 10,3691,008 | 4,3761,631 | 4,127509 | 13,8192,091 |
| 16,640 | 11,377 | 6,007 | 4,636 | 15,910 | |
| Comprehensive income attributable to:Equity holders of the CompanyNon-controlling interests | 23,0687,660 | 11,0391,136 | 7,2951,797 | 6,514919 | 11,494(17) |
| 30,728 | 12,175 | 9,092 | 7,433 | 11,477 | |
| Earnings per share attributable to equity holders of the Company (in U.S. dollars): Basic and diluted earnings per share | 0.13 | 0.10 | 0.04 | 0.04 | 0.14 |
{32}------------------------------------------------
| Attributable to equity holders of the Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Sharecapital | Sharepremium | Othercapitalreserves | Reserve inrespect oftranslationdifferences | Retainedearnings | Total | Noncontrollinginterests | Totalequity | |
| Unaudited | ||||||||
| U.S. dollars in thousands | ||||||||
| Balance as of January 1, 2025(audited) | 1 | 75,552 | (6,023) | (7,369) | 52,940 | 115,101 | 29,145 | 144,246 |
| Net incomeOther comprehensive income | -- | -- | -- | -10,134 | 12,934- | 12,93410,134 | 3,7063,954 | 16,64014,088 |
| Total comprehensive incomeShare-based paymentExercise of optionsIssue of share capitalPurchase of non-controlling interestsNon-controlling interests created in | ----- | --4,42997,155- | -962(1,601)-(93) | 10,134---- | 12,934---- | 23,0689622,82897,155(93) | 7,660---(417) | 30,7289622,82897,155(510) |
| initially consolidated companiesDividends to holders of noncontrolling interests | -- | -- | -- | -- | -- | -- | 6,806(936) | 6,806(936) |
| Balance as of September 30, 2025 | 1 | 177,136 | (6,755) | 2,765 | 65,874 | 239,021 | 42,258 | 281,279 |
| Attributable to equity holders of the Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Other | Reserve inrespect of | Non | ||||||
| Share | Share | capital | translation | Retained | controlling | Total | ||
| capital | premium | reserves | differences | earnings | Total | interests | equity | |
| Unaudited | ||||||||
| U.S. dollars in thousands | ||||||||
| Balance as of January 1, 2024 | ||||||||
| (audited) | 1 | 74,449 | (4,136) | (5,044) | 47,123 | 112,393 | 4,934 | 117,327 |
| Net income | - | - | - | - | 10,369 | 10,369 | 1,008 | 11,377 |
| Other comprehensive income | - | - | - | 670 | - | 670 | 128 | 798 |
| Total comprehensive income | - | - | - | 670 | 10,369 | 11,039 | 1,136 | 12,175 |
| Share-based payment | - | - | 838 | - | - | 838 | - | 838 |
| Exercise of options | - | 821 | (177) | - | - | 644 | - | 644 |
| Reclassification of put options to | ||||||||
| equity | - | - | (2,829) | - | - | (2,829) | 24,449 | 21,620 |
| Dividends to equity holders of theCompany | - | - | - | - | (4,002) | (4,002) | (214) | (4,216) |
| Balance as of September 30, 2024 | 1 | 75,270 | (6,304) | (4,374) | 53,490 | 118,083 | 30,305 | 148,388 |
{33}------------------------------------------------
| Attributable to equity holders of the Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Sharecapital | Sharepremium | Othercapitalreserves | Reserve inrespect oftranslationdifferences | Retainedearnings | Total | Noncontrollinginterests | Totalequity | |
| Unaudited | ||||||||
| U.S. dollars in thousands | ||||||||
| Balance as of July 1, 2025 | 1 | 78,304 | (6,384) | (154) | 61,498 | 133,265 | 34,578 | 167,843 |
| Net income | - | - | - | - | 4,376 | 4,376 | 1,631 | 6,007 |
| Other comprehensive income | - | - | - | 2,919 | - | 2,919 | 166 | 3,085 |
| Total comprehensive income | - | - | - | 2,919 | 4,376 | 7,295 | 1,797 | 9,092 |
| Share-based payment | - | - | 359 | - | - | 359 | - | 359 |
| Exercise of options | - | 1,677 | (637) | - | - | 1,040 | - | 1,040 |
| Issue of share capital | - | 97,155 | - | - | - | 97,155 | - | 97,155 |
| Purchase of non-controlling interests | - | - | (93) | - | - | (93) | (417) | (510) |
| Non-controlling interests created ininitially consolidated companies | - | - | - | - | - | - | 6,806 | 6,806 |
| Dividends to holders of noncontrolling interests | - | - | - | - | - | - | (506) | (506) |
| Balance as of September 30, 2025 | 1 | 177,136 | (6,755) | 2,765 | 65,874 | 239,021 | 42,258 | 281,279 |
| Attributable to equity holders of the Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Sharecapital | Sharepremium | Othercapitalreserves | Reserve inrespect oftranslationdifferences | Retainedearnings | Total | Noncontrollinginterests | Totalequity | |
| Unaudited | ||||||||
| U.S. dollars in thousands | ||||||||
| Balance as of July 1, 2024 | 1 | 75,270 | (3,823) | (6,761) | 49,363 | 114,050 | 5,151 | 119,201 |
| Net incomeOther comprehensive income | -- | -- | -- | -2,387 | 4,127- | 4,1272,387 | 509410 | 4,6362,797 |
| Total comprehensive incomeShare-based payment | -- | -- | -348 | 2,387- | 4,127- | 6,514348 | 919- | 7,433348 |
| Reclassification of put options toequityDividends to holders of non | - | - | (2,829) | - | - | (2,829) | 24,449 | 21,620 |
| controlling interests | - | - | - | - | - | - | (214) | (214) |
| Balance as of September 30, 2024 | 1 | 75,270 | (6,304) | (4,374) | 53,490 | 118,083 | 30,305 | 148,388 |
{34}------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| Attributable to equity holders of the Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Sharecapital | Sharepremium | Othercapitalreserves | Reserve inrespect oftranslationdifferences | Retainedearnings | Total | Noncontrollinginterests | Totalequity | |
| Audited | ||||||||
| U.S. dollars in thousands | ||||||||
| Balance as of January 1, 2024 | 1 | 74,449 | (4,136) | (5,044) | 47,123 | 112,393 | 4,934 | 117,327 |
| Net income | - | - | - | - | 13,819 | 13,819 | 2,091 | 15,910 |
| Other comprehensive loss | - | - | - | (2,325) | - | (2,325) | (2,108) | (4,433) |
| Total comprehensive income (loss) | - | - | - | (2,325) | 13,819 | 11,494 | (17) | 11,477 |
| Share-based payment | - | - | 1,186 | - | - | 1,186 | - | 1,186 |
| Exercise of options | - | 1,103 | (244) | - | - | 859 | - | 859 |
| Reclassification of put options to | ||||||||
| equity | - | - | (2,829) | - | - | (2,829) | 24,449 | 21,620 |
| Dividends distributed | - | - | - | - | (8,002) | (8,002) | (221) | (8,223) |
| Balance as of December 31, 2024 | 1 | 75,552 | (6,023) | (7,369) | 52,940 | 115,101 | 29,145 | 144,246 |
{35}------------------------------------------------
| Nine months ended September 30, 2025 2024 | Three monSeptem2025 | Year endedDecember 31,2024 | |||
|---|---|---|---|---|---|
| Unau | dited | Audited | |||
| U.S. | dollars in th | ousands | |||
| Cash flows from operating activities: | |||||
| Net incomeAdjustments to reconcile net income to net | 16,640 | 11,377 | 6,007 | 4,636 | 15,910 |
| cash provided by operating activities (a) | 9,843 | 4,320 | 7,342 | (193) | 5,206 |
| Net cash provided by operating activities | 26,483 | 15,697 | 13,349 | 4,443 | 21,116 |
| Cash flows from investing activities | |||||
| Purchase of property, plant and equipmentand other assetsProceeds from sale of property, plant and | (8,201) | (5,511) | (3,717) | (1,338) | (8,320) |
| equipment | 177 | 129 | (7) | 101 | 440 |
| Acquisition of initially consolidated subsidiaries (b) | (54,635) | (65,903) | (25,462) | (28,008) | (72,065) |
| Acquisition of companies accounted for at equity | (10,096) | - | - | - | (1,866) |
| Repayment of liability in respect of acquisition of activity | (725) | *) (809) | (725) | *) (1,436) | |
| Net cash used in investing activities | (73,480) | *)(72,094) | (29,911) | (29,245) | *) (83,247) |
| Cash flows from financing activities | |||||
| Receipt (repayment) of short-term credit, net Dividend paid to equity holders of the | 17,168 | 21,367 | (1,892) | 22,433 | (843) |
| Company Dividend distributed to holders of put options and holders of non-controlling | - | (4,002) | - | - | (8,002) |
| interests Purchase of non-controlling interests | (2,322)(511) | (288) | (1,300)(511) | (214) | (295) |
| Repayment of long-term lease liabilitiesRepayment of long-term loansReceipt of long-term loans | (2,681)(11,669)57,153 | (2,121)(3,286)43,992 | (1,027)(4,063)32,772 | (850)(1,048)8,047 | (2,910)(3,594)80,945 |
| Issue of share capital net of issue expenses Exercise of share options | 97,1552,828 | 644 | 97,1551,040 | - | 859 |
| Repayment of liability in respect of acquisition of activity | (2,239) | *) (834) | *) (834) | ||
| Net cash provided by financing activities | 154,881 | *) 55,472 | 122,173 | 28,368 | *) 65,326 |
| Exchange rate differences on balances of cash and cash equivalents | 5,545 | 280 | 2,741 | 913 | (1,086) |
| Increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning | 113,429 | (645) | 108,352 | 4,479 | 2,109 |
| of the period | 25,926 | 23,817 | 31,003 | 18,693 | 23,817 |
| Cash and cash equivalents at the end of the period | 139,355 | 23,172 | 139,355 | 23,172 | 25,926 |
*) Reclassified.
{36}------------------------------------------------
| (a) Adjustments to reconcile net income to net cash provided by operating activities: Adjustments to profit and loss items: Depreciation and amortization Capital gain from sale of property, plant and equipment Change in employee benefit liabilities, net Cost of share-based payment Company's share of earnings of companies accounted for at equity, net Change expenses, net Cost of share-based payment Company's share of earnings of companies accounted for at equity, net Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost of share-based payment Cost | Nine months endedSeptember 30, | Three mor | Year endedDecember 31, | ||||
|---|---|---|---|---|---|---|---|
| (a) Adjustments to reconcile net income to net eash provided by operating activities: Adjustments to profit and loss items: Depreciation and amortization Capital gain from sale of property, plant and equipment liabilities, net cost of share-based payment Company's share of earnings of companies accounted for at equity, net (633) (633) (634) (7,782) (7,844) (7,782) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,844) (7,84 | 2025 | 2024 | 2025 | 2024 | |||
| (a) Adjustments to reconcile net income to net cash provided by operating activities: Adjustments to profit and loss items: Depreciation and amortization Capital gain from sale of property, plant and equipment Change in employee benefit liabilities, net 12 24 (14) 3 57 (2014) (15) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014) (2014 | anda | Audited | |||||
| Adjustments to profit and loss items: Depreciation and amortization Capital gain from sale of property, plant and equipment (18) (65) (16) (5) (59) Change in employee benefit liabilities, net 12 24 (14) 3 55 Cost of share-based payment (633) 50 348 1,186 Company's share of earnings of companies accounted for at equity, net 10,287 4,040 4,725 1,581 6,688 Taxes on income (633) 29,514 17,782 12,818 6,957 25,475 Changes in asset and liability items: Decrease (increase) in other accounts receivables (644) (1,618) 112 (1,300) (311 1ncrease in inventories (1,991) (1,961) (343) (2,412) (3,171 1ncrease (decrease) in other accounts receivable (2,311 (1,479) 62 (1,455) (1,005 1,005 (1,005 1,005 1,596 20 (5,016 (1,005 1,596 20 (5,016 (1,005 1,596 20 (5,016 (1,005 1,596 20 (5,016 (1,005 1,596 20 (5,016 (1,005 1,596 (1,005 (1,005 1,596 (1,005 (1,005 (1,005 1,596 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 (1,005 ( | - | N15 In thous | anus | ||||
| Depreciation and amortization 12,902 9,284 5,157 3,533 12,340 | (a) | to net cash provided by operating | |||||
| Capital gain from sale of property, plant and equipment (18) (65) (16) (5) (59) Change in employee benefit liabilities, net 12 24 (14) 3 57 Cost of share-based payment 962 838 359 348 1,186 Company's share of earnings of companies accounted for at equity, net (633) - (34) - (34) Finance expenses, net 10,287 4,040 4,725 1,581 6,688 Taxes on income 6,002 3,661 2,641 1,497 5,307 Changes in asset and liability items: Decrease (increase) in trade receivables (8,855) 2,138 (3,497) (56) (149) Decrease (increase) in other accounts receivable (644) (1,618) 112 (1,300) (311) Increase (decrease) in trade payables (1,991) (1,961) (343) (2,412) (3,171) Increase (decrease) in other accounts payable (90) (3,664) 1,596 20 (5,016) (9,269) (6,584) (2,070) (5,203) (9,646) Cash paid and received during the | |||||||
| plant and equipment Change in employee benefit liabilities, net Cost of share-based payment Company's share of earnings of companies accounted for at equity, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses, net Enance expenses | 12,902 | 9,284 | 5,157 | 3,533 | 12,340 | ||
| 12 | plant and equipment | (18) | (65) | (16) | (5) | (59) | |
| Changes in asset and liability items: Decrease (increase) in trade receivables (644) (1,618) (12,91) (1,991) (1,961) (343) (2,412) (3,171) (1,479) (62,012) (1,455) (1,005) (1,491) (1,479) (62,012) (1,455) (1,005) (1,491) (1,479) (62,012) (1,455) (1,005) (1,491) (1,479) (62,012) (1,455) (1,005) (1,491) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479 | liabilities, netCost of share-based paymentCompany's share of earnings of | (14)359 | 571,186 | ||||
| Changes in asset and liability items: Decrease (increase) in trade receivables Decrease (increase) in other accounts receivable Increase in inventories Increase (decrease) in trade payables Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease | equity, netFinance expenses, net | 10,287 | 4,725 | 1,5811,497 | (36)6,6805,307 | ||
| Decrease (increase) in trade receivables Decrease (increase) in other accounts receivable Increase in inventories Increase (decrease) in trade payables Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase ( | 29,514 | 17,782 | 12,818 | 6,957 | 25,475 | ||
| receivables Decrease (increase) in other accounts receivable Increase in inventories Increase (decrease) in trade payables Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payable Increase (decrease) in other accounts payab | Changes in asset and liability items: | ||||||
| accounts receivable (644) (1,618) 112 (1,300) (311 (1,991) (1,991) (1,961) (343) (2,412) (3,171 (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479) (1,479 | receivables | (8,855) | 2,138 | (3,497) | (56) | (149) | |
| payables 2,311 (1,479) 62 (1,455) (1,005) Increase (decrease) in other accounts payable (90) (3,664) 1,596 20 (5,010) (9,269) (6,584) (2,070) (5,203) (9,646) (2,070) (5,203) (9,646) (2,070) (5,203) (1,005) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010) (2,010 | accounts receivableIncrease in inventories | (311)(3,171) | |||||
| accounts payable (90) (3,664) 1,596 20 (5,010 (9,269) (6,584) (2,070) (5,203) (9,646) Cash paid and received during the | payables | 2,311 | (1,479) | 62 | (1,455) | (1,005) | |
| Cash paid and received during the | (90) | (3,664) | 1,596 | 20 | (5,010) | ||
| Cash paid and received during the period for: | (9,269) | (6,584) | (2,070) | (5,203) | (9,646) | ||
| Cash paid and received during the period for: | |||||||
| Taxes paid (6,161) (4,412) (2,488) (868) (6,463) Interest paid, net (4,514) (2,466) (1,191) (1,079) (4,160) Dividend received from associate 273 - 273 - | Interest paid, net | (4,514) | (1,191) | (6,463)(4,160) | |||
| (10,402) (6,878) (3,406) (1,947) (10,623 | (10,402) | (6,878) | (3,406) | (1,947) | (10,623) | ||
| 9,843 4,320 7,342 (193) 5,206 | 9,843 | 4,320 | 7,342 | (193) | 5,206 |
{37}------------------------------------------------
| Nine months ended September 30, | Three months endedSeptember 30, | Year endedDecember 31, | ||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | 2024 | ||
| Unau | ditedNIS in thous | ande | Audited | |||
| 115 III tilous | anus | |||||
| (b) | Acquisition of initially consolidated subsidiaries: | |||||
| The subsidiaries' assets and liabilities at date of acquisition: | ||||||
| Working capital (excluding cash and cash equivalents) Property, plant and equipment Right-of-use assets Intangible assets Lease liabilities Other non-current liabilities Non-controlling interests Payables for acquisition of investments in subsidiaries (including contingent | 4,1156,4923,403104,529(3,403)(2,483)(6,806) | 8,43719,824658106,267(662)(12,271) | 2,1962,2483,21256,768(3,212)(1,755)(6,806) | 1,80412626928,592(273) | 11,46720,2471,596123,700(1,600)(12,271) | |
| consideration and deferred consideration) Deferred taxes Investment accounted for at equity | (45,980)(4,783)(449) | (46,878)(9,472) | (23,317)(3,872) | (2,510) | (60,050)(11,024) | |
| 54,635 | 65,903 | 25,462 | 28,008 | 72,065 | ||
| (c) | Significant non-cash transactions: | |||||
| Right-of-use asset recognized with corresponding lease liabilities | 5,265 | 1,108 | 1,275 | 2,267 | ||
| Classification to net assets held for sale | 11,750 | |||||
| Acquisition of associate in exchange for assets | 11,806 | |||||
| Reclassification of put option to equity | 21,620 | 21,620 | 21,620 |
{38}------------------------------------------------
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1:- GENERAL
a. General description of the Group and its activity:
Turpaz Industries Ltd. ("the Company") is a publicly traded company incorporated in Israel. The condensed interim consolidated financial statements of the Company as of September 30, 2025 include those of the Company and its subsidiaries (collectively, "the Group").
The Group operates, by itself and through subsidiaries in Israel, the U.S., Southeast Asia, Europe and South Africa in the development, research, production, marketing, distribution and sale of products in three operating segments: (1) tastes; (2) fragrances; (3) specialty fine ingredients (see Note 5).
- b. These interim consolidated financial statements have been prepared in a condensed format as of September 30, 2025 and for the periods of nine and three months then ended ("interim consolidated financial statements"). These interim consolidated financial statements should be read in conjunction with the Company's annual consolidated financial statements as of December 31, 2024 and for the year then ended and accompanying notes ("annual consolidated financial statements").
- c. U.S. President Trump's tariff plan:
In April 2025, the Trump administration announced the imposition of reciprocal tariffs on imports of goods from many countries around the world to the U.S., with a total tariff of 15% imposed on imports from Israel. The tariff applies only to goods and not to services.
As of the reporting date, the Company is unable to assess the future effects of all the aforementioned factors, to their full potential extent, on the markets in which it operates, in general, and on the Company's operations, in particular. However, given that the Group's total sales to the U.S. are not material, the Company estimates, at this time, that these tariffs will not have a material effect, if any, on its operating results.
NOTE 2:- ACCOUNTING POLICIES
Basis of preparation of the interim consolidated financial statements:
The interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting", and in accordance with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements as of December 31, 2024, except as described below:
Investments in associated accounted for at equity:
Associates are companies in which the Group has significant influence over the financial and operating policies without exercising control. The investment in associates is accounted for at equity.
{39}------------------------------------------------
NOTE 3:- BUSINESS COMBINATIONS
a. On February 19, 2025, NGF, a subsidiary of Turpaz England, to which F&E's electronic vaping operation in the flavor essence market was transferred, entered into a strategic partnership agreement for the purchase of 100% of the shares of Advance Flavour Solutions Limited, a private company incorporated in England ("AFS"), from its shareholders for £ 4.5 million (approximately $ 5.7 million) and allocation of 75.01% of NGF's shares to the sellers. Following the transaction, Turpaz England holds 24.99% of NGF shares.
As of December31, 2024, this activity was classified as held for sale and as a discontinued operation. On the acquisition date, these groups of assets and liabilities were classified to the item investment in companies accounted for at equity, thereby constituting part of the purchase consideration.
b. On February 24, 2025, the Company completed the purchase of 100% of the share capital of Ets. Doucy S.R.L., a private company incorporated in Belgium ("Doucy"), and of the real estate used by its enterprise from its shareholders for € 8.3 million (approximately $ 8.5 million) and an earnout based on Doucy's EBITDA in the period until February 28, 2027.
Doucy has vast experience and expertise in sweet flavorings for the food and beverage industries (soft and alcoholic drinks), colorings and additives to the animal food industry. It is engaged in developing, making and marketing sweet flavorings and quality solutions for the food and food additive industries. The transaction was closed on the signing date and financed using a bank loan.
The purchase price was allocated to tangible assets, intangible assets and liabilities acquired at their fair value at the purchase date. The fair value measurement of these assets and liabilities is subject to a final valuation of the PPA of the fair value of the assets and liabilities, which has not been completed as of the date of approval of these financial statements.
{40}------------------------------------------------
The table presented below summarizes the purchase price and the provisional PPA:
| February 24,2025 | |
|---|---|
| U.S. dollarsin thousands | |
| Working capital, net | 1,002 |
| Property, plant and equipmentand other assets | 3,434 |
| Customer relations | 1,844 |
| Product formulas | 1,157 |
| Deferred taxes | (1,082) |
| Other non-current liabilities | (728) |
| Net identifiable assets | 5,627 |
| Goodwill arising on acquisition | 4,313 |
| Purchase price: | |
| Paid in cash less net cash in acquiree on acquisition date | 6,071 |
| Liability for contingent consideration and acquisition date adjustments | 3,868 |
| Total purchase price | 9,939 |
Through September 30, 2025, the acquired activity has contributed approximately $ 3,203 thousand to revenues and approximately $ 591 thousand to net income.
The goodwill arising on the acquisition was allocated to the tastes segment and consists of the projected benefits from the synergy of the combined operations of the Company and the acquiree.
c. On June 3, 2025, the Company, through a subsidiary, Pollena Aroma Sp. z o o ("Pollena"), purchased the operation of Carotex, a limited partnership incorporated in Poland which produces food and beverage flavors and fragrances ("Carotex"), in return for approximately $ 23.4 million (approximately PLN 87.2 million) and the allocation of 22% of Pollena's share capital. In the flavors segment, Carotex develops, manufactures, and markets sweet flavors, emulsions, and colorants for beverages (both alcoholic and non-alcoholic and soft drinks) and food products (dairy, baked goods, and pharmaceuticals). In the fragrances segment, Carotex develops, manufactures, and markets fragrances for the personal care, cosmetics, toiletries, air care, and detergent industries. The agreement includes a symmetrical call/put option to purchase the shares allocated in Pollena. The option is exercisable for one year beginning at the end of four years from the closing date. The option exercise price is based on Pollena's EBITDA from the closing date through the option exercise date and an undertaking to distribute a dividend.
{41}------------------------------------------------
The purchase price was allocated to tangible assets, intangible assets and liabilities acquired at their fair value at the purchase date. The fair value measurement of these assets and liabilities is subject to a final valuation of the PPA of the fair value of the assets and liabilities, which has not been completed as of the date of approval of these financial statements.
The table presented below summarizes the purchase price and the provisional PPA:
| June 3, 2025 | |
|---|---|
| U.S. dollarsin thousands | |
| Working capital, net | 756 |
| Property, plant and equipmentand other assets | 830 |
| Right-of-use asset | 191 |
| Customer relations | 11,823 |
| Product formulas | 5,092 |
| Deferred taxes | 171 |
| Lease liabilities | (191) |
| Net identifiable assets | 18,672 |
| Goodwill arising on purchase | 23,513 |
| Purchase price: | |
| Paid in cash | 23,390 |
| Liability for symmetrical call/put optionand acquisition date | |
| adjustments | 18,795 |
| Total purchase price | 42,185 |
Through September 30, 2025, the acquired activity has contributed approximately $ 4,307 thousand to revenues and approximately $ 1,060 thousand to net income. If the business combination had been completed at the beginning of the year, the revenues would have amounted to approximately $ 10,085 thousand.
The goodwill arising on the acquisition was allocated to the tastes and fragrances segments and consists of the projected benefits from the synergy of the combined operations of the Company and Carotex.
{42}------------------------------------------------
d. On July 11, 2025, the Company, through the Belgium subsidiary, completed the purchase of about 68.6% of the share capital of Attractive Scent SAS ("Attractive Scent"), a French private company, from the latter's founders and other shareholders ("the sellers") for approximately € 27.4 million (approximately $ 32.3 million). The transaction was financed using a long-term bank loan. Attractive Scent develops, manufactures, and markets fragrance extracts for the fine fragrances industry, as well as for personal care products, cosmetics, air care products and candles.
The agreement includes a symmetrical call/put option for the purchase of the remaining shares of Attractive Scent as follows: (a) 10% of Attractive Scent's shares can be exercised after a year has elapsed from the closing date for a price that is based on Attractive Scent's business performances in the eight quarters before the option exercise date to be paid in the Company's shares that will be allocated at their average quoted market price in the 30 calendar days before the exercise date; and (b) about 21.4% of Attractive Scent's shares can be exercised after three years have elapsed from the closing date for a price that is based on Attractive Scent's business performances in the eight quarters before the option exercise date to be paid in cash or in the Company's shares at the discretion of the sellers.
The purchase price was allocated to tangible assets, intangible assets and liabilities acquired at their fair value at the purchase date. The fair value measurement of these assets and liabilities is subject to a final valuation of the PPA of the fair value of the assets and liabilities, which has not been completed as of the date of approval of these financial statements.
The table presented below summarizes the purchase price and the provisional PPA:
| July 11, 2025 | |
|---|---|
| U.S. dollars | |
| in thousands | |
| Working capital, net | 2,196 |
| Property, plant and equipmentand other assets | 2,377 |
| Right-of-use asset | 3,212 |
| Customer relations | 7,193 |
| Product formulas | 10,588 |
| Lease liabilities | (3,212) |
| Other non-current liabilities | (1,755) |
| Deferred taxes | (3,872) |
| Net identifiable assets | 16,727 |
| Goodwill arising on purchase | 38,858 |
| Non-controlling interests | (6,806) |
| Purchase price: | |
| Paid in cashless net cash in the acquiree on the acquisition dateLiability for symmetrical put optionon non-controlling interests and | 25,462 |
| acquisition date adjustments | 23,317 |
| Total purchase price | 48,779 |
{43}------------------------------------------------
Through September 30, 2025, the acquired activity has contributed approximately $ 5,369 thousand to revenues and approximately $ 743 thousand to net income. If the business combination had been completed at the beginning of the year, the revenues would have amounted to approximately $ 14,395 thousand.
The goodwill arising on the acquisition was allocated to the tastes and fragrances segments and consists of the projected benefits from the synergy of the combined operations of the Company and Attractive Scent.
NOTE 4:- EVENTS DURING AND AFTER THE REPORTING PERIOD
- a. On February 24, 2025, the Company exercised a symmetrical call/put option to purchase the remaining shares of Aromatique for approximately $ 2.2 million. As of the reporting date, the Company holds 100% of the share capital of Aromatique through a wholly owned subsidiary.
- b. During the reporting period, employees and a consultant in the Company exercised some 1,147 thousand options into Company shares for an aggregate of $ 2.8 million. The exercise forms part of the grants of options to the Company's director in May 2021 and to the Group's employees, managers and a consultant in 2022.
- c. In furtherance to Note 16c to the annual consolidated financial statements regarding a loan agreement with a European bank for a loan of up to € 25 million (approximately $ 26.9 million), in March 2025, the Company withdrew approximately € 6.7 million (approximately $ 7.3 million) from the secured loan amount. In May 2025, the Company withdrew approximately € 5.7 million (approximately $ 6.4 million) of the optional loan amount.
- d. In June 2025, the Company completed an investment of approximately $ 4.6 million in Aastrid Life Sciences Pvt. Ltd. ("Aastrid"), a private company incorporated in India specializing in R&D and manufacturing of pharmaceutical intermediates and specialty chemicals, in return for the allocation of 45% of Aastrid's share capital. The agreement includes a call option for purchasing another 15% of Aastrid's share capital which is exercisable at the end of three years from the closing date. The option exercise price is based on Aastrid's EBITDA during the eight quarters before the option exercise date. Since the Company does not have an actual right to the shares on the reporting date, the investment in Aastrid is accounted for at equity.
- e. In furtherance to Note 5d to the annual consolidated financial statements regarding the purchase of 75% of the share capital of Lebensmittel-Sprühtrocknungs- Industrie-System ATOM GmbH ("ATOM"), in June 2025, the Company purchased the remaining 25% for approximately € 0.1 million. As of the reporting date, the Company holds 100% of ATOM's share capital through wholly owned subsidiaries. Therefore, ATOM is consolidated in the Company's interim consolidated financial statements.
{44}------------------------------------------------
NOTE 4:- EVENTS DURING AND AFTER THE REPORTING PERIOD (Cont.)
- f. On July 9, 2025, the Belgium subsidiary received a bank loan of € 28 million to finance the acquisition of Attractive Scent as described in Note 3d above. The loan is for a period of five years and bears interest of Euribor + 1.5%-1.75%. The loan principal is repayable in equal quarterly instalments and the interest is payable on a quarterly basis from the end of 12 months from the loan receipt date. The loan is governed by the financial covenants set forth in Note 16f to the annual consolidated financial statements and in Note 4j below.
- g. On August 24, 2025, the Company completed a private placement of 7,105,000 Ordinary shares with no par value in return for gross proceeds of approximately NIS 330,383 thousand, before issue expenses. The issue expenses amounted to approximately NIS 2,000 thousand and were carried less the share premium. As a result, total net proceeds amounted to approximately NIS 328,383 thousand (approximately $ 97.155 thousand).
- h. On September 15, 2025, the Company increased its interests in a subsidiary, WFF, by exercising an option to purchase 20% of WFF's share capital from holders of noncontrolling interests in return for approximately $ 511 thousand. As a result, the Company holds 90% of WFF's share capital.
- i. On September 29, 2025, the Company, through Sunspray, signed an agreement to purchase 60% of the share capital of Nicola-J Flavours & Fragrances (Pty) Ltd. ("Nicola-J"), a South African private company, from the latter's shareholders for approximately $ 6.8 million (approximately ZAR 118.4 million). The consideration is subject to an adjustment based on Nicola-J's EBITDA in the period ended February 28, 2026. Closing is expected in the coming months and is contingent on obtaining the necessary regulatory approval in South Africa. The agreement includes a symmetrical call/put option for the purchase of the remaining shares of Nicola-J which can be exercised after three years have elapsed from the closing date for an exercise price that is based on Nicola-J's business performances in the period from the closing date to the option exercise date.
- j. In furtherance to Note 16c to the annual financial statements regarding financial covenants, the Company is meeting all the required financial covenants.
Un the reporting period, all the Company's lending banks approved an update to a financial covenant according to which the ratio of equity to total balance sheet will not be lower than 20% and $ 80 million at all times.
{45}------------------------------------------------
NOTE 5:- OPERATING SEGMENTS
a. General:
As stated in the annual consolidated financial statements, the Group has three operating segments as follows: (1) tastes; (2) fragrances and (3) specialty fine ingredients.
The segments' performances (segment profits) are estimated based on operating income (income before net finance expenses and unallocated expenses), as presented in the financial statements.
b. Reporting on operating segments:
| Nine months ended September 30, 2025 | |||||
|---|---|---|---|---|---|
| Tastes | Fragrances | SpecialtyfineingredientsUnaudited | Adjustments | Total | |
| U.S. dollars in thousands | |||||
| Revenues from externalcustomersIntersegment revenues | 142,711- | 33,722- | 24,04821 | -(21) | 200,481- |
| Total revenues | 142,711 | 33,722 | 24,069 | (21) | 200,481 |
| Segment operating incomenet of unallocated jointexpenses | 28,523 | 8,949 | 2,962 | - | 40,434 |
| Unallocated joint expensesFinance expenses, net | 7,50510,287 | ||||
| Income before taxes onincome | 22,642 | ||||
| Nine months ended September 30, 2024 | |||||
| Tastes | Fragrances | SpecialtyfineingredientsUnaudited | Adjustments | Total | |
| U.S. dollars in thousands | |||||
| Revenues from externalcustomersIntersegment revenues | 94,817- | 26,569- | 13,1333 | -(3) | 134,519- |
| Total revenues | 94,817 | 26,569 | 13,136 | (3) | 134,519 |
| Segment operating incomenet of unallocated jointexpenses | 16,173 | 7,288 | 1,536 | - | 24,997 |
| Unallocated joint expensesFinance expenses, net | 5,9194,040 | ||||
| Income before taxes onincome | 15,038 |
{46}------------------------------------------------
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5:- OPERATING SEGMENTS (Cont.)
| Three months ended September 30, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Specialtyfine | ||||||||
| Tastes | Fragrances | ingredients | Adjustments | Total | ||||
| UnauditedU.S. dollars in thousands | ||||||||
| Revenues from externalcustomersIntersegment revenues | 52,986- | 15,043- | 8,675- | -- | 76,704- | |||
| Total revenues | 52,986 | 15,043 | 8,675 | - | 76,704 | |||
| Segment operating incomenet of unallocated jointexpenses | 10,685 | 3,956 | 1,808 | - | 16,449 | |||
| Unallocated joint expensesFinance expenses, net | 3,0764,725 | |||||||
| Income before taxes onincome | 8,648 | |||||||
| Three months ended September 30, 2024 | ||||||||
| Specialty | ||||||||
| Tastes | Fragrances | fineingredients | Adjustments | Total | ||||
| Unaudited | ||||||||
| U.S. dollars in thousands | ||||||||
| Revenues from externalcustomersIntersegment revenues | 36,076- | 8,811- | 3,851- | -- | 48,738- | |||
| Total revenues | 36,076 | 8,811 | 3,851 | - | 48,738 | |||
| Segment operating incomenet of unallocated jointexpenses | 5,885 | 2,415 | 1,561 | - | 9,861 | |||
| Unallocated joint expensesFinance expenses, net | 2,1471,581 | |||||||
| Income before taxes onincome | 6,133 |
{47}------------------------------------------------
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5:- OPERATING SEGMENTS (Cont.)
| Year ended December 31, 2024 | |||||||
|---|---|---|---|---|---|---|---|
| Tastes | Fragrances | SpecialtyfineingredientsAuditedU.S. dollars in thousands | Adjustments | Total | |||
| Revenues from externalcustomersIntersegment revenues | 135,542 | 34,945 | 18,4613 | -(3) | 188,948- | ||
| Total revenues | 135,542 | 34,945 | 18,464 | (3) | 188,948 | ||
| Segment gross profit | 49,796 | 18,646 | 5,217 | - | 73,659 | ||
| Segment operating incomenet of unallocated jointexpenses | 23,579 | 9,092 | 3,052 | - | 35,723 | ||
| Unallocated joint expensesFinance expenses, net | 7,9916,680 | ||||||
| Income before taxes onincome | 21,052 |
c. Geographic information:
The following is a breakdown of the Company's revenues by customer location:
| Ninemonths endedSeptember30, | Three months endedSeptember | 30, | Year endedDecember 31, | ||
|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | 2024 | |
| Unaudited | Audited | ||||
| U.S. dollars | in thousands | ||||
| Israel and the Middle | |||||
| East | 23,932 | 23,449 | 8,419 | 7,420 | 30,855 |
| North America | 16,219 | 12,689 | 5,984 | 4,427 | 17,220 |
| Europe | 119,887 | 67,570 | 44,942 | 24,847 | 97,375 |
| Africa | 23,142 | 20,996 | 9,166 | 8,346 | 28,913 |
| Asia and other | 17,301 | 9,815 | 8,193 | 3,698 | 14,585 |
| 200,481 | 134,519 | 76,704 | 48,738 | 188,948 | |
{48}------------------------------------------------
NOTE 6:- FINANCIAL INSTRUMENTS
a. Fair value:
In the reporting period, the Company examined the fair value of financial assets and financial liabilities measured at amortized cost and concluded that their fair value is not materially different from their carrying amount.
b. Liabilities in respect of put options and contingent consideration:
Some of the business combinations performed by the Company include a mechanism whereby former owners have an option to sell their remaining shares to the Company, and the Company has an option to buy those shares (the price and conditions of these put options and call options are identical). Other business combinations include a contingent consideration mechanism, which is payable based on the acquiree's future operating results.
As of September 30, 2025, total liabilities amounted to $ 125,702 thousand. The value of these liabilities was estimated using the average EBITDA to be achieved over the term of the agreement. A weighted annual discount rate of 7.0% was applied to the options. The fair value measurement is classified as Level 3.
The key unobservable input used by the Company to assess the value of the option is the future EBITDA to be achieved; To determine and update these liabilities, the Company utilizes the acquirees' current results and updated forecasts.
Adjustment to fair value measurements classified as Level 3 in the fair value hierarchy:
| Nine months endedSeptember 30, | Three months endedSeptember 30, | Year endedDecember 31, | |||
|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | 2024 | |
| Unaudited | Audited | ||||
| U.S. dollars in thousands | |||||
| Balance at beginning of | |||||
| periodTotal gain (loss)recognized: | (74,779) | (39,051) | *(105,000) | (96,772) | (39,051) |
| Repayment | 4,351 | 834 | 1,535 | - | 834 |
| In profit or loss | (4,495) | (1,014) | (3,040) | (334) | (1,468) |
| In other comprehensive | |||||
| income (loss)Update of terms ofsymmetrical put/calloptions on non | (9,581) | (3,743) | (662) | (4,024) | 1,747 |
| controlling interestsClassification ofsymmetrical put/calloptions on non | - | (11,278) | - | - | (11,278) |
| controlling interests | - | 32,898 | - | 32,898 | 32,898 |
| Business combinations | (41,198) | (46,878) | (18,535) | - | (58,461) |
| Balance at end of period | (125,702) | (68,232) | (125,702) | (68,232) | (74,779) |
*Restated, See Note 3(c)
{49}------------------------------------------------
Effectiveness of Internal Control Over Financial Reporting
{50}------------------------------------------------
Quarterly report regarding the effectiveness of internal control over financial reposting and disclosure in accordance with Regulation 38C to the Securities Regulations (Periodic and Immediate Reports), 1970, for the third quarter of 2025:
Turpaz Industries Ltd.'s management (hereinafter - the "Corporation"), under the supervision of the Board of Directors, is responsible for maintaining and implementing appropriate internal control over financial reporting and disclosure in the Corporation.
For that purpose, members of management are:
-
- Karen Cohen Khazon, CEO and Chairperson of the Board of Directors
-
- Guy Gill, Executive Vice President and CFO
-
- Shauli Eger, VP Global CIO
-
- Yoni Adini, General Counsel
-
- Idan Shabtay, Corporate Controller
Internal control over financial reporting and disclosure includes controls and procedures maintained by the Corporation, and designed by the CEO and the most senior financial officer or under their supervision, or by those who effectively execute the said offices, under the supervision of the Corporation's Board of Directors, which were designed to obtain reasonable assurance as to the reliability of the financial reporting and preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Corporation is required to disclose in the reports it publishes in accordance with the provisions of the law is collected, processed, summarized and reported on the date and in the format prescribed by law.
The internal control, includes, among other things, controls and procedures that were designed to ensure that information that the Corporation is required to disclose as stated above, is collected and transferred to the Corporation's management, including to the CEO and to the most senior financial officer, or to those who effectively execute the said offices, in order to allow making decisions in the appropriate date in connection with the disclosure requirements.
Due to its inherent limitations, internal control over financial reporting and disclosure is not designed to provide absolute assurance that a misstatement or omission of information in the reports will be prevented or detected.
In the annual report regarding the effectiveness of the internal control over the financial reporting and the disclosure, which was attached to the Periodic Report for the period ended December 31, 2024 (hereinafter – "the Latest Annual Report regarding Internal Control"), the Board of Directors and Management assessed the corporation's internal control; based on this assessment, the corporation's Board of Directors and Management reached the conclusion that the internal control as stated, as of December 31, 2024, is effective.
Through the date of the report, no event or matter was brought to the attention of the Board of Directors or Management that may change the assessment of the effectiveness of internal control, as presented in the Latest Annual Report regarding Internal Control.
As at the date of the report, based on the assessment of the effectiveness of internal control in the Latest Annual Report regarding Internal Control, and based on information brought to the attention of Management and the Board of Directors as stated above, the internal control is effective.
{51}------------------------------------------------
Statement of the Chief Executive Officer in accordance with Regulation 38C(D)(1):
- I, Karen Cohen Khazon, hereby declare that:
- (1) I have reviewed the quarterly report of Turpaz Industries Ltd. (hereafter the "Corporation") for the third quarter of 2025 (hereafter – the "Reports").
- (2) To the best of my knowledge, the Reports do not include any misrepresentation of a material fact, nor do they omit any representation of a material fact so that the representations included therein, in view of the circumstances in which such representations have been included, shall not be misleading with regard to the period covered by the Reports;
- (3) To the best of my knowledge, the financial statements and other financial information included in the reports, reflect fairly, in all material respects, the financial position, results of operations and cash flows of the Corporation as of the dates and periods covered by the Reports;
- (4) I have disclosed to the independent auditor of the corporation, the Board of Directors, and the Board of Directors' Audit committee, based on my most recent evaluation of the internal control over financial reporting and disclosure, the following:
- (a)All significant deficiencies and material weaknesses in the establishment or implementation of the internal controls over financial reporting and disclosure that may adversely affect, in a reasonable manner, the Corporation's ability to collect, process, summate or report financial information in a manner that may give rise to doubt as to the reliability of financial reporting and preparation of the financial statements in accordance with the provisions of the law; and -
- (b) any fraud, whether material or immaterial, in which the Chief Executive Officer, or anyone directly reporting to him, or any other employees are involved who have a significant function in the corporation's financial reporting and in internal control over financial reporting and disclosure thereof.
- (5) I, severally or jointly with others in the corporation:
- (a) have established such controls and procedures, or ensured that such controls and procedures under my supervision be established and in place, designed to ensure that material information relating to the corporation, including its consolidated companies as defined in the Securities Regulations (Preparation of Annual Financial Statements), 2010, is brought to my attention by others in the corporation and the consolidated companies, particularly during the Reports' preparation period; and
- (b) have established controls and procedures, or ensured that such controls and provisions under my supervision be established and in place, designed to ensure, in a reasonable manner, the reliability of financial reporting and preparation of financial statements in accordance with the provisions of the law, including in accordance with generally accepted accounting principles;
{52}------------------------------------------------
C-3
(c) No event or matter that occurred during the period between the date of the latest Periodic Report and the date of this report was brought to my attention that may change the conclusion of the Board of Directors and Management regarding the effectiveness of the internal control over the corporation's financial reporting and disclosure.
The aforesaid does not derogate from my responsibility or from the responsibility of any other person, pursuant to any law.
November 11, 2025
____________________
Karen Cohen Khazon,
CEO and Chairperson of the Board of Directors
{53}------------------------------------------------
Statement of the Most Senior Financial Officer Pursuant to Regulation 38C(D)(2):
- I, Guy Gill, hereby declare that:
- (1) I have reviewed the interim financial statements and the other financial information included in the interim reports of Turpaz Industries Ltd. for the third quarter of 2025 (hereafter – the "Interim Reports");
- (2) To the best of my knowledge, the interim financial statements and other financial information included in the Interim Reports do not include any misrepresentation of a material fact, nor do they omit any representation of a material fact so that the representations included therein, in view of the circumstances in which such representations have been included, shall not be misleading with regard to the period covered by the Reports;
- (3) To the best of my knowledge, the interim financial statements and other financial information included in the Interim Reports, reflect fairly, in all material respects, the financial position, results of operations and cash flows of the Corporation as of the dates and periods covered by the Reports;
- (4) I have disclosed to the independent auditor of the corporation, the Board of Directors, and the Board of Directors' Audit committee, based on my most recent evaluation of the internal control over financial reporting and disclosure, the following:
- (a)All significant deficiencies and material weaknesses in the establishment or implementation of the internal controls over financial reporting and disclosure that may adversely affect, in a reasonable manner, the Corporation's ability to collect, process, summate or report financial information in a manner that may give rise to doubt as to the reliability of financial reporting and preparation of the financial statements in accordance with the provisions of the law; and -
- (b) any fraud, whether material or immaterial, in which the Chief Executive Officer, or anyone directly reporting to him, or any other employees are involved who have a significant function in the corporation's financial reporting and in internal control over financial reporting and disclosure thereof.
- (5) I, severally or jointly with others in the corporation:
- (a) have established such controls and procedures, or ensured that such controls and procedures under my supervision be established and in place, designed to ensure that material information relating to the corporation, including its consolidated companies as defined in the Securities Regulations (Preparation of Annual Financial Statements), 2010, is brought to my attention by others in the corporation and the consolidated companies, particularly during the Reports' preparation period; and
- (b) have established controls and procedures, or ensured that such controls and provisions under my supervision be established and in place, designed to ensure, in a reasonable manner, the reliability of financial reporting and preparation of financial statements in accordance with the provisions of the law, including in accordance with generally accepted accounting principles;
{54}------------------------------------------------
C-5
(c) No event or matter that occurred during the period between the date of the latest report (quarterly or periodic, as the case may be) and the date of this report, which relates to interim financial statements and
to any other financial information including in the interim reports was brought to my attention that may
- in my opinion - change the conclusion of the Board of Directors and Management regarding the
effectiveness of the internal control over the corporation's financial reporting and disclosure.
The aforesaid does not derogate from my responsibility or from the responsibility of any other person,
pursuant to any law.
November 11, 2025
____________________
Guy Gill, Executive Vice President and CFO