ITF Arlen S.A.

THIS ANNOUNCEMENT IS NOT INTENDED FOR RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.

This announcement is for informational purposes only and does not constitute an offer of securities for sale in the United States, Canada, Australia, Japan, or the Republic of South Africa. This announcement is not, and under no circumstances is it to be construed as, a prospectus or any other offering document in connection with any public offering of securities. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of the information contained in the prospectus (the “Prospectus“), including any amendments or supplements thereto, which was prepared and published by ITF Arlen S.A. (the “Company“) in connection with the public offering (the “Offering“) and the admission and introduction of all the Company’s shares to trading on the regulated market operated by the Warsaw Stock Exchange, in accordance with the relevant legal provisions.

ARLEN PLANS TO CONDUCT AN INITIAL PUBLIC OFFERING OF SHARES AND LIST ON THE MAIN MARKET OF THE WARSAW STOCK EXCHANGE S.A.

ITF Arlen S.A.

– together with its subsidiaries, the Arlen Group –

is a leader on the Polish market and one of the few European entities specializing in the production and supply of specialized protective clothing and uniforms. The Group also operates modern, highly efficient textile production facilities and advanced weaving mills, positioning itself as a precursor of modern technologies in specialized fabrics.

THE OFFERING COMPRISES A PUBLIC OFFERING OF NEWLY ISSUED SHARES, WHICH WILL BE DIRECTED TO INSTITUTIONAL AND INDIVIDUAL INVESTORS IN POLAND.

The net proceeds from the issuance of new shares will be used to finance strategic development goals, including investments in modern machinery, production expansion, and automation, which will increase the Group’s production capacity and efficiency. The Company plans to apply for the admission of its shares to trading on the regulated market operated by the Warsaw Stock Exchange S.A. The Offering will be conducted after the approval of the Prospectus by the Polish Financial Supervision Authority (KNF). A.T. Fundacja Rodzinna, controlled by Andrzej Tabaczyński (the Managing Shareholder), acts as the selling shareholder.

The decision to conduct a public offering and debut on the stock exchange is a natural step in the development of the Arlen Group. Over the last few years, the Company has consistently strengthened its position as a key market player in specialized protective clothing and uniforms, both in Poland and on international markets. The scale of the business, financial stability, and established market position—backed by an experienced management team—provide a solid foundation for further growth, according to Andrzej Tabaczyński, President of the Management Board of Arlen S.A.

Excellent technological, production, and financial facilities place the Group among the top European entities in its sector. The Group’s operations cover several production facilities in Poland and Europe, allowing it to efficiently handle large and complex orders. The Group’s strategic goals focus on introducing innovative products to the market, expanding its customer base, and further geographical expansion, particularly in Western European and North American markets – emphasizes President Tabaczyński, Arlen S.A.

The Arlen Group ranks among the leading uniform and protective clothing groups in Central and Eastern Europe. The Group specializes in the production of specialized protective clothing and elements of individual equipment for employees of various industries, and – through dedicated uniform structures – in the manufacturing of uniforms and individual equipment for uniform services. Dynamic development in recent years has allowed for the acquisition of a leading position in Poland, as well as building a solid position on demanding European markets – particularly in Germany and Scandinavian countries.

The Group has two modern sewing factories (in Radom and Łomża). Production based on automated cutting rooms is highly flexible. The design department uses advanced computer technologies, thanks to which the main focus is placed on ergonomics, functionality, and utility of manufactured clothing. Products are manufactured based on international standards and possess necessary certificates. Without the fulfillment of these standards, it is impossible to participate in public procurement tenders or sign agreements with corporate clients. The Company places great emphasis on maintaining high quality standards and deadlines. The Company has its own machinery park for finishing fabrics. Specialized technological lines allow for the independent refining of materials, including processes related to water-proofing, flame-retardancy, oil-proofing, or anti-static properties, which significantly shortens the production chain and increases the margins on manufactured goods. Research and development works are carried out dynamically, including the development of innovative design and raw material solutions. This includes automated production lines for ultrasonic welding of non-woven fabrics, allowing for the manufacturing of protective clothing against biological factors, chemicals, or radioactive dust. The technology also opens the way to modern construction solutions; among others, thanks to unique lamination lines of the Swiss company Schaetti S.A., which allow for the production of functional laminates, e.g. vapor-permeable, wind-proof, waterproof, or flame-retardant (barrier structures for uniform and military clothing protection).

* employment in the Group as a whole is more than 700 people

To the most demanding customers, to whom the Arlen Group addresses its offer, belong the uniformed services (Army, Border Guard, Police, Fire Department, Prison Service) and strategic state enterprises operating in specialized branches of industry – min. mining, fuel, and chemical industries, and energy sector, as well as specialized medical sectors and commercial rental markets (rental).

In 2024, the revenue of the Arlen Group amounted to PLN 461.4 million, EBITDA to PLN 83.9 million, and net profit reached PLN 60.5 million. The average annual growth rate (CAGR) for the years 2022–2024 was 27.8% for revenue, 48.4% for EBITDA*, and 50.8% for net profit, which means the indicators grew by more than 1.5 times.

* normalized EBITDA – in the years 2022-2024 normalized EBITDA equals EBITDA because there were no one-off events

normalized net profit – in the years 2023-2024 adjusted for costs of the initial public offering and costs resulting from the execution of options for Series B shares as part of the Program for Motivational Managers

The strategy of further development of the Group focuses on maintaining dynamic growth on the domestic market and continuing expansion on foreign markets, while maintaining high operational and financial profitability through a wide range of specialized and innovative products, and continuing optimization of manufacturing processes.

BASIC INFORMATION ABOUT THE PUBLIC OFFERING

BASIC INFORMATION ABOUT THE OFFERING

• In connection with the Offering of newly issued shares, A.T. Fundacja Rodzinna, which currently holds 95.9% of shares, intends to sell a package of existing shares constituting no more than 20% of the Company’s share capital. As part of the Offering, no new shares will be issued.
• The shares will be offered as part of a public offering conducted in Poland on the basis of the Prospectus, addressed to Polish institutional investors and individual investors.
• The Offering will be conducted after the approval of the Prospectus by the Polish Financial Supervision Authority.
• The Company plans to apply for the admission and introduction of all its shares to trading on the regulated market of the Warsaw Stock Exchange S.A.
• Dom Maklerski Navigator S.A. acts as the Brokerage House, Global Coordinator of the Offering and Bookrunner, while Kancelaria Gessel, Koziorowski sp.k. acts as the legal advisor to the Offering, and Grant Thornton acts as the auditor verification entity.
• Lock-up agreements: the Company, the Managing Shareholder, and A.T. Fundacja Rodzinna agreed to lock-up restrictions regarding the sale of shares after the completion of the Offering. The lock-up will apply for a period of 24 months from the first listing day of the Company’s shares. A.T. Fundacja Rodzinna committed to a lock-up period of 12 months from the date of admission of shares to trading on the exchange.

REASONS FOR CONDUCTING THE OFFERING

The main objective of the Offering is to raise capital to finance the Group’s dynamic development and strategic investments. The stock exchange debut will also allow for the strengthening of the Company’s brand awareness, enhancement of credibility among business partners, and provide access to diversified sources of financing in the future.

KEY INFORMATION ABOUT THE ARLEN GROUP

COMPETITIVE ADVANTAGES

The Group identifies several key competitive advantages that give it a leading position in the industry:

• Leader in its sector: The Arlen Group is one of the largest entities in Central and Eastern Europe specializing in the production of specialized protective clothing and uniforms for uniformed services, healthcare, heavy industry, and other corporate sectors.
• Modern production facilities: The Group possesses highly automated production and warehousing facilities, ensuring the flexibility and efficiency of manufacturing processes, as well as the highest quality standards for its products.
• Experienced management: The Group is managed by a team of high-class specialists with long-term experience in the textile and clothing industry, guaranteeing the effective implementation of the development strategy.
• Consistent financial growth: Over the last few years, the Group has achieved stable revenue and net profit growth, reflecting the efficiency of its business model and high operational margins.

REVENUE STRUCTURE BY SEGMENTS

The Arlen Group’s revenue is well diversified across individual operating segments:

• Uniformed services: Deliveries of uniforms and specialized clothing for the army, police, border guard, and other state services remain the main source of revenue, generating approximately 60% of total sales.
• Industry and corporate clients: Deliveries of protective clothing for mining, fuel, chemical, and energy industries, as well as corporate clothing for large commercial clients, account for approximately 25% of revenue.
• Medical sector and rental: Sales of specialized medical clothing and specialized services for uniform and corporate clothing rental networks generate approximately 15% of the Group’s revenue.

FINANCIAL DATA SUMMARY

The table below presents selected consolidated financial data of the Arlen Group for the financial years 2022, 2023, and 2024:

STRATEGY AND DEVELOPMENT PROSPECTS

The Group’s strategy assumes further dynamic development through organic growth, geographical expansion, and continuous technological modernization. Arlen plans to increase its production capacity, implement advanced IT systems to support management, and develop new product lines dedicated to specific customer groups.

GEOGRAPHICAL EXPANSION

The Arlen Group consistently increases its presence on foreign markets, executing contracts for clients from Western Europe, Scandinavia, and North America. The Group intends to leverage its competitive advantages, such as high product quality, flexibility, and compliance with rigorous safety standards, to further increase its share in international markets.

INNOVATIONS AND NEW TECHNOLOGIES

The Group places great emphasis on research and development. In cooperation with renowned scientific institutes, Arlen develops and implements innovative solutions in specialized fabrics and protective clothing, allowing it to meet the growing expectations of clients and maintain a leading position in the industry.

DETAILED FINANCIAL PERFORMANCE ANALYSIS

Double-digit revenue growth

In the years 2022–2024, the dominant segment of Arlen Group’s sales was uniform clothing, which accounted for 92.4% in 2022, 91.4% in 2023, and 94.0% in 2024 of total revenue. The Group’s main market remains the domestic market (representing 73.1% of revenue in 2024), but sales to foreign markets are growing dynamically. On foreign markets, like on the domestic market, the Arlen Group targets its offer of uniform clothing (clothing protecting against harsh weather conditions, non-flammable clothing, anti-static clothing) to uniform services (e.g. army, police, border guard) of EU countries, as well as civilian organizations and institutions (uniformed corporate clothing, e.g. post office, railways). Foreign sales are targeted mainly to customers in Germany and Scandinavian countries (Sweden, Norway) and corporate rental networks.

Consolidated sales revenue of the Arlen Group in 2024 amounted to PLN 461.4 million and increased by 26.0% year-on-year, while in 2023 sales reached PLN 366.3 million, an increase of 29.7% year-on-year. The value of revenues in individual years was driven by the steady growth of orders from existing institutional customers and winning new high-value tenders. In the analyzed period, key customers of the Arlen Group were public entities in Poland. In connection with the geopolitical situation, a significant increase in modern uniform replacement programs for the Polish Armed Forces and other uniform services was observed.

Arlen Group’s revenues from sales to other entities (civilian corporate market), which are highly sensitive to the demand for uniform clothing, also remain stable. The level of modernization expenditures in national defense budgets, as well as legal regulations regarding occupational safety and health requirements, significantly affect the demand for modern personal protective equipment and specialized uniform clothing. Tendencies on the domestic market, market potential, and regulatory policy are assessed by the Management Board as highly favorable.

We see an ongoing trend towards focusing on quality and functionality from uniform clothing purchasers. The Arlen Group, as a market leader possessing high-level competencies, advanced technological facilities, and raw material access, is capable of fulfilling these demands in a short time while maintaining the highest quality standards – highlights President Tabaczyński.

Surge in profits and margins

In 2024, the Arlen Group generated PLN 83.9 million of EBITDA, which means an increase of 44.7% compared to 2023, in which EBITDA amounted to PLN 58.0 million (an increase of 51.8% year-on-year compared to 2022). In the years 2022–2024, the Group’s EBITDA margin systematically grew, reaching 13.5% in 2022, 15.8% in 2023, and 18.2% in 2024. Consolidated net profit reached PLN 60.5 million in 2024, compared to PLN 42.1 million in 2023 (an increase of 43.7% year-on-year) and PLN 26.6 million in 2022.

In the years 2022–2024, the Arlen Group did not recognize any one-off events. Therefore, in the years 2022–2024, normalized EBITDA is equal to EBITDA, and in 2022 normalized net profit is equal to net profit.

Adjusted net profit for 2023 and 2024 was adjusted for initial public offering costs and management motivational plan options costs.

Net profit margin growth reflects the high operational efficiency of the Group and a positive product mix toward highly specialized products with higher unit margins. Management expects the high efficiency of operations to continue in coming periods.

Stable financial liquidity position and secure operational cash flows

In the years 2022–2024, the financial Group maintained secure short-term financial liquidity, achieving positive cash flows from operational activities (PLN 55.4 million in 2024, PLN 41.2 million in 2023, and PLN 34.6 million in 2022). Total cash and cash equivalents at the end of 2024 amounted to PLN 116.5 million, compared to PLN 71.1 million at the end of 2023 and PLN 38.1 million at the end of 2022.

Such financial performance allows the Group to secure current operational needs and investment activities, while remaining prepared for future strategic development steps.

DIVIDEND POLICY

On February 18, 2025, the Company adopted a dividend policy. The policy assumes a recommendation to the General Meeting for the distribution of dividend from net profit for a given financial year at a level ranging from 30% to 50% of the consolidated net profit of the Arlen Group, provided that it does not exceed 75% of the separate net profit of ITF Arlen S.A. achieved in a given financial year. Every time, when proposing a dividend payout, the Board will take into consideration factors like: current financial liquidity position, capital needs for planned development investments, execution of current commercial contracts, general macroeconomic situation, and potential acquisition opportunities. The dividend policy will apply starting from the distribution of net profit for the financial year ending December 31, 2025.

The final decision regarding dividend payment and its amount remains at the discretion of the General Meeting of Shareholders. Profit distribution recommendations prepared by the Management Board will always require prior review by the Supervisory Board.

LEGAL DISCLAIMER (FULL TEXT)

ADVERTISEMENT. This announcement is for promotional purposes only and under no circumstances shall constitute a base for a decision to invest in securities of ITF Arlen S.A. The only legally binding document containing information about the Issuer and the Offering is the Prospectus, which will be published after its approval by the Polish Financial Supervision Authority (KNF).

This material is for promotional and informational purposes only and does not constitute an offer, invitation, or solicitation to purchase or subscribe for any securities. The distribution of this document and the offer or sale of securities may be restricted by law in certain jurisdictions. Persons into whose possession this document comes are required to inform themselves about and observe any such restrictions. In particular, this material is not intended for distribution in the United States, Canada, Australia, Japan, or the Republic of South Africa.

The Prospectus will be the sole legally binding document containing information about the Company and the Offering. The Prospectus will be available electronically after its approval by the Polish Financial Supervision Authority (KNF) on the Company’s website (www.arlen.com.pl).

Approval of the Prospectus by the Polish Financial Supervision Authority should not be understood as an endorsement of the securities offered. Potential investors should read the Prospectus before making an investment decision to fully understand the potential risks and rewards associated with the decision to invest in the securities.

This announcement does not constitute an offer of securities to the public in the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. No public offering of securities will be made in the United States.

This material is addressed and directed exclusively to persons in Poland. It is directed solely to “Qualified Investors” as defined in the Prospectus Regulation, and to individual or institutional investors who meet specified criteria.

This communication may contain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, projections, and estimates of the Company’s management. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from any future results expressed or implied by such statements.

The Company, Dom Maklerski Navigator S.A., Gessel, and Grant Thornton do not undertake any obligation to update or publicly revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

For the avoidance of doubt, the English version of the text is for informational purposes only. In case of any discrepancies between the Polish and English versions, the Polish text shall prevail.