Colt CZ : Annual Financial Report for 2023 (unofficial

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Colt CZ Group SE ("Colt CZ" or the "Company"), along with its subsidiaries (the "Group"), is one of the world's leading producers of firearms, tactical accessories and ammunition for military and law enforcement, personal defense, hunting, sport shooting, and other commercial uses. Colt CZ primarily sells its products under

the Colt CZ, CZ-USA, Colt Canada, Dan Wesson, Spuhr, swissAA and 4M Systems brands.

After the Group's listing on the stock exchange in 2020, it underwent significant expansion. In 2021, the Group added the US firearms manufacturer Colt's Manufacturing Company LLC in the USA and its Canadian sister company Colt Canada Corporation ("Colt Canada") to its existing production in Česká zbrojovka a.s. ("CZUB" or "Česká zbrojovka") in the Czech Republic. In 2022, the Company completed acquisition of the Swedish optical mounting solutions manufacturer Spuhr i Dalby AB ("Spuhr"). In 2023, it purchased swissAA Holding AG ("swissAA"), the Swiss producer of small caliber ammunition. It also signed a share purchase agreement that same year for the acquisition of Sellier & Bellot a.s. ("Sellier & Bellot"), a traditional Czech manufacturer of ammunition. Selier & Bellot ranks among the oldest engineering companies in the Czech Republic, as well as worldwide.

The Colt CZ has its registered office in the Czech Republic and manufacturing facilities in the Czech Republic, the United States, Canada, Sweden, Switzerland and Hungary.

As at 31 December 2023, the Group's average FTE number of employees stood at 2,111. Shares of Colt CZ are traded on the Prague Stock Exchange. As of 31 December 2023, the majority shareholder was Česká zbrojovka Partners SE with a 75.4% stake, with the remaining shares being free float.

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Consolidated statement of profit or loss and other comprehensive income (audited)

Consolidated statement of financial position (audited)

1 Adjusted EBITDA in 2023 for extraordinary one-time costs associated with realized and unrealized acquisitions in 2023 and share-based payments associated with the employee option plan that are generally unrelated to the current period's results of operation and value creation. In 2022, EBITDA was adjusted for extraordinary one-time costs associated with unrealized acquisitions in 2022 and share-based payments associated with the employee option plan that are generally unrelated to the current period's results of operation and value creation. These one-time items are described in Section 14. Alternative Performance Measures.

2 In 2023, net income was adjusted for extraordinary one-time costs associated with realized and unrealized acquisitions in 2023, share-based payments associated with the employee option plan, bond issue costs and negative goodwill related to the bargain purchase of swissAA, that are generally unrelated to the current period's results of operation and value creation. In 2022, net income was adjusted for extraordinary one-time costs associated with unrealized acquisitions in 2022, share-based payments associated with the employee option plan, the revaluation of contingent consideration for the acquisition of Colt to a market price, and bond issue costs that are generally unrelated to the current period's results of operation and value creation. These one-time items are described in Section 14. Alternative Performance Measures.

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MARCH 2023

The Company announced its intention to issue bonds in the Czech capital market.

JULY 2023

Mr. David Aguilar and Mr. René Holeček were appointed as members of the Supervisory Board as of 1 July 2023. The General Meeting also appointed Jiří Nekovář as a new member of the Audit committee.

DECEMBER 2023

Colt CZ executed a share purchase agreement to purchase

100% interest in Sellier & Bellot is a traditional Czech ammunition manufacturer, which ranks among the oldest engineering companies in the Czech Republic, as well as worldwide.

MAY 2023

Colt CZ issued bonds in the total amount of CZK 1,929,000,000.

The bonds are floating rate notes based on 6M PRIBOR plus 1.8% p.a. margin maturing in 2030.

The Company increased its share capital by CZK 36,529 by issue of 365,291 new book-entry shares. The issue price of one new share was set as CZK 585 per share. The increase was related to the settlement of the acquisition of Colt in 2021.

JUNE 2023

The General Meeting of the Company outside its meeting (decision per rollam) decided on the distribution of profits for the year 2022 and dividend payment. The dividend payout for 2022 was CZK 30 per share before tax. For the first time in the Company´s history, shareholders had the choice of whether or not to receive a share of profit in the form of new shares in the Company.

Colt CZ executed a share purchase agreement that resulted in the acquisition of a 100% stake in the Swiss ammunition producer swissAA.

SEPTEMBER 2023

The Company increased its share capital by CZK 32,217 by issue of 322,170 new book-entry shares. The issue price of one new share was set at CZK 526.50. The capital increase and subscription of new shares are related to the dividend payout in the form of new shares.

OCTOBER 2023

The Company confirmed in the Schedule 13D filed with the U.S. Securities and Exchange Commission that, together with other reporting persons, it jointly acquired more than 5% of the share capital and voting rights of Vista Outdoor, Inc.

NOVEMBER 2023

The Company submitted additional filing with the U.S. Securities and Exchange Commission concerning a proposal to combine Colt CZ and Vista Outdoor, Inc. Vista's Board of Directors rejected the proposal.

The Company increased its share capital by CZK 36,803 with the issue of 368,038 new book-entry shares. The issue price of one new share was set as CZK 525 per share. The increase was related to settlement of the acquisition of Colt in 2021.

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Letter from the president of Colt CZ

Furthermore, we are developing in a fundamental way through acquisitions. In June, we announced the acquisition of a 100% stake in swissAA Holding AG, a Swiss manufacturer of high-quality small- caliber ammunition, with production facilities in Switzerland and Hungary that supplies the Swiss, Belgian, and German armies, as well as other military customers.

The agreement with CBC Europe to acquire 100% of the shares in Sellier & Bellot, one of the world's oldest and most prominent manufacturers of small-caliber ammunition, with production in the Czech Republic, marked a pivotal and transformative event in 2023. The amalgamation of swissAA and Sellier & Bellot positions ammunition as a key second pillar of our business.

Additionally, we acquired intellectual property rights to the Mk 47 automatic grenade launcher from General Dynamics. With the transfer of production to Colt and our European facilities, we are poised to become suppliers of larger and more sophisticated weapon systems beyond small arms. We aim to remain a dependable partner to our existing customers in the US, Australia, Israel, Italy, Oman, and the United Arab Emirates.

Despite all these positive developments, I must admit that in terms of economic results, last year ended well below my expectations and plans. As management, we cannot be satisfied. The prolonged period of slowdown in the US commercial market has had a negative impact on our CZ brand in particular, which after years of growth

has lost some market share in this key market. We still have the ambition to grow in this market and, more importantly, to increase the market share of both brands. I am convinced that we have the key ingredients to fulfill these plans, but execution is crucial. We are working to significantly upgrade the portfolio of both brands and we are confident that we are on the right track, and this year's results will affirm it.

We will achieve growth only if we are efficient, focus on synergies between our companies and continuously innovate and improve on a daily basis. Successful integration of Sellier & Bellot and swissAA is paramount. Strengthening collaboration between our brands positions us to be part of a generational technological shift, delivering innovative and high-quality products our customers can rely on in any situation.

Given our emphasis on innovation, quality, and customer-centric approach, we have decided to showcase the capabilities and knowhow across our companies in the 2023 Annual Financial Report. Whether it is the superior barrel quality, which allows us to provide lifetime guarantees to our customers in the U.S. for the entire service life of the firearms; the DiFEND® system, which allows us to design and manufacture CZ products to provide the best shooting comfort and ergonomics; thorough testing to NATO standards, including extreme durability, with Colt Canada serving as the Canadian Center of Excellence for small arms; the highest Swiss quality of small- caliber ammunition; the ability to program our machines to increase

production quality, while reducing costs; our capability to transfer manufacturing technologies to other countries; unique customer service through the EG-CZ Academy, providing shooting courses for professionals and sport shooters; focusing on the development of ballistic products that provide protection to the military and law enforcement while on duty; flawless revolver timing, where all the unique parts of the revolver come together; timeless artistic engraving on our firearms - all underscoring our commitment to our customers.

Behind these capabilities are our people, to whom I extend gratitude for their skills, dedication, and tireless efforts to enhance our processes and products.

I also want to thank all our business partners and customers. Lastly, let me express my appreciation to you - our shareholders. We are delighted that you have chosen to join us in realizing our vision of becoming the recognized undisputed leader of small arms industry. We are mindful of our commitment to you and are building our Group with the aim of maximizing the value of your investment.

Jan Drahota

President and Chairman of the Board

of Colt CZ Group

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5.1 Product portfolio

The Colt CZ produces a wide range of firearms, including pistols, revolvers, rifles, submachine guns, grenade launchers, sniper rifles, and centrefire rifles. The Group also produces components for firearms, such as sights, triggers, stocks, grips, and various spare parts.

The Group offers a wide portfolio of tactical equipment through its subsidiary 4M SYSTEMS, such as ballistic vests, helmets and other protection, as well as combat uniforms, backpacks, and other firearm accessories, e.g., handgun holsters and magazine pouches. The Group also offers military equipment and materials through its subsidiary Colt CZ Defense Solutions.

Another subsidiary, Spuhr, produces a number of products, such as optical mounts, accessories and upgrade kits for firearms, making it highly complementary to the Group's core business. Spuhr mounts and accessories are used by many military and law enforcement units around the world. Spuhr also offers a popular series of products for hunting.

Since 2023, the Group has been able to offer ammunition and law enforcement technology, specifically 5.56 mm, 7.62 mm, 9 mm, and

12.7 mm, as well as 40 mm grenade launcher ammunition, through its subsidiary swissAA. At the end of 2023, the Group acquired intellectual property rights for the Mk 47 automatic grenade launcher and expanded into the larger, and more sophisticated, weapon systems segment.

Small arms

The Company's small firearms are primarily comprised of pistols and revolvers from the CZ and Colt brands. The bedrock of the Group's production portfolio is pistol production. The Group's main products include the CZ 75 and CZ P-10 pistol series, CZ Shadow 2, CZ P-07/09, and Colt 1911 pistols, together with the Python and Anaconda revolver series.

The Group's most successful pistol models are the CZ 75 and the iconic CZ 1911, which are still being produced in modified forms to this day. Through the American handgun manufacturer Dan Wesson, Colt CZ offers upgrades of popular revolver and pistol models based on the 1911 platform.

Long guns

Long guns include arms for the military and law enforcement (automatic and semi-automatic rifles, sub guns, and sniper rifles), as well as for commercial use (especially rimfire rifles, centerfire rifles, and semi-automatic rifles). The Group covers all the main markets for long guns.

The most sold products include models in the CZ 457 rimfire rifle series and CZ 600 centerfire rifle series, as well as the CZ Scorpion EVO 3 sub gun, the CZ BREN 2, Colt AR15/M4 rifles and the semi- automatic Colt C20 DMR marksman rifle.

The following table sets forth a breakdown of firearm units by type that were sold in 2023 and 2022 by the Group:

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5.2 Markets and customers

The Group supplies its products to over 90 countries all over the world. The main markets, according to customer categories, are the military and law enforcement market and the commercial market.

5.2.1 Military and law enforcement market

Colt CZ customers in the military and law enforcement market include federal, state, and local governments and government agencies, specifically regular army units and special armed forces, state and municipal police, border guards, prison guards, and units in charge of the protection of constitutional officials.

The main goal of the Group is to increase its worldwide market share, via both organic growth and acquisitions.

The Group's management believes the military and law enforcement market offers greater growth opportunities than the commercial market, due to the current political and security situation. Ensuring global and regional security is also in line with its strategy of sustainable development.

To strengthen its position in the military and law enforcement market, the Group intends to capitalize on its many years of experience and offer comprehensive solutions in the field of firearms, accessories and ammunition.

Key customers in the M/LE market

PROJECTS RELATED TO HELP FOR UKRAINE

The Canadian Department of National Defence

In April 2023, the Canadian Department of National Defence announced the delivery of 21,000 assault rifles to Ukraine with a total value of CAD 59 million. The contract was awarded to Colt Canada and delivery was completed during Q2 and Q3 of 2023. In November 2023, the Canadian government announced that it would provide Ukraine with an additional 11,000 rifles and over 9 million cartridges worth CAD 60 million, supplied by Colt Canada.

Ministry of Defence of the Czech Republic

In 2020, the Czech Ministry of Defence and CZUB entered into a framework agreement for the supply of up to 39,000 small arms. The agreement was signed for CZK 2.35 billion for the period until 2025.

In 2022, the Company signed an amendment to the framework agreement dated April 2020 with the Czech Ministry of Defence for the acquisition of firearms. This amendment will enable the Czech Army to draw on supplies of firearms for up to CZK 1.18 billion more than the originally agreed limit of CZK 2.35 billion. In 2023, delivery continued under this contract.

The Danish Ministry of Defence / DALO

The Danish Defence Acquisition and Logistics Organization DALO signed a framework agreement with Colt Canada in August 2023 enabling the supply of various rifle systems in the upcoming years.