1Q 2025 Interim Report

1. General Information

   1. About Polisan Holding

      Türkiye'nin Polisan Holding A.Ş., a long-established Turkish conglomerate, traces its roots back to 1956. Starting in textiles, the Bitlis Family's ventures have branched out over time, encompassing chemicals, port management, paint, and real estate. In 2000, the family's investments consolidated under the banner of Polisan Holding A.Ş., streamlining operations and fostering cross-company collaboration.

      Today, Polisan Holding employs 1,033 across its paint, port, and chemical businesses, boasts global partnerships with giants like Dow Chemical and Kansai Paint, six international investments including Greece, and a strategic real estate portfolio. For more information about Polisan Holding, a publicly traded company on Borsa Istanbul, visit https://www.polisanholding.com.

      As of March 31, 2025, the Group's proportion of ownership interests of subsidiaries has been shown in the

      following table:

      Title of the subsidiary	Nature of Business	Shares owned by the Group	Effective ownership rate
      Polisan Kimya Sanayii A.Ş. ("Polisan Kimya")	Production and sale of chemical products	100%	100%
      Poliport Kimya Sanayi ve Ticaret A.Ş. ("Poliport")	Port, storage and warehousing services	100%	100%
      Polisan Hellas S.A. ("Hellas")	Polyethylene Terephthalate (PET) granule and preform	100%	100%
      Polisan Yapıkim Yapı Kimyasalları San. ve Tic. A.Ş. ("Polisan Yapıkim")	Construction chemicals	100%	100%

      The table below shows the partnership ratios of the Group's Business Partnerships and Affiliates as of March 31, 2025. Investments in Business Partnerships and Affiliates are accounted for using the equity method.

      Title	Nature of Business	Partnership Type	Shares owned by the Group	Effective Ownership rate
      Polisan Kansai Boya Sanayi ve Ticaret A.Ş. ("Polisan Kansai Boya")	Production and Sale of Paint	Joint venture	%50	%50
      Tintomix Pigment Pasta Sanayi A.Ş. ("Tintomix")	Production and sale of pigment pastes	Joint venture	%51	%25,50
      Rohm and Haas Kimyasal Ürünler Üretim Dağıtım ve Ticaret. A.Ş. ("Rohm and Haas"	Production and ales of chemical products	Subsidiary	%40	%40

   2. Company Information:

      Accounting Period Relevant to the Repor	01.01.2025 - 31.03.2025
      Business Name	Polisan Holding A.Ş.
      Affiliated Trade Registry Office and Number	Gebze Ticaret Odası - 5769 / İstanbul Ticaret Odası - 615757
      Headquarters Addess	Dilovası Organize Sanayi Bölgesi 1. Kısım Liman Caddesi No:7 Dilovası-KOCAELİ
      Telephone / Fax	0 262 754 8000 / 0 262 754 8056
      Headquarters Address- branch	Hilltown Ofis, Aydınevler Mah. Siteler Yolu Cad. 28 No:1/A Küçükyalı-Maltepe, İSTANBUL
      Telephone / Fax	0 216 578 5600 / 0 216 573 7792
      Website	https://www.polisanholding.com

   3. Shareholder Structure

      The company's registered capital ceiling is 1,000,000,000 Turkish Lira, and its paid-in capital is 758,500,000 Turkish Lira, with no changes in the first quarter of 2025.

      As of March 31, 2025 and December 31, 2024 the Group's shareholder structure is as follows:

      31 Mart 2025			31 Aralık 2024
      	Share (%)	Amount (TL)	Share (%)	Amount (TL)
      Mehmet Emin Bitlis	22,72	172.354.218	22,72	172.354.218
      Ahmet Ertuğrul Bitlis	22,72	172.354.465	22,72	172.354.465
      A.Melike Bitlis (Bush)	9,14	69.316.770	9,14	69.316.770
      Fatma Nilgün Kasrat	8,41	63.768.770	8,41	63.768.770
      Ahmet Faik Bitlis	7,83	59.368.770	7,83	59.368.770
      Serdar Demirel	1,86	14.129.867	1,86	14.129.867
      Melis Bitlis	1,71	12.974.553	1,71	12.974.553
      Burcu Bitlis	0,91	6.894.284	0,91	6.894.284
      Banu Bitlis	0,91	6.894.284	0,91	6.894.284
      Alaattin Bitlis	0,82	6.187.618	0,82	6.187.618
      Melda Bitlis	0,70	5.314.204	0,70	5.314.204
      Mehmet Haluk Akşit	0,63	4.791.247	0,63	4.791.247
      Publicly Traded (*)	21,64	164.150.950	21,64	164.150.950
      Total	100	758.500.000	100	758.500.000

      (*) As of March 31, 2025, and December 31, 2024, the Group's shareholders do not hold any shares in the publicly traded portion.

   4. Amendments in the Articles of Association during the Period and the Reasons

      There is no change in the Articles of Association in this period.

   5. Board of Directors

      At the Ordinary General Assembly meeting held on 28.04.2025, it was decided, in accordance with Article 10 of the Articles of Association, to set the total number of Board of Directors members at 6. The following Board Members, who are to serve for a period of one year, were elected at the relevant general assembly meeting:

      Name/Surname	Position	Whether an Executive/ Independent Board Member
      Tayfun Bayazıt, who is the natural person representative on behalf of Emin Bitlis Yönetim Danışmanlığı	Chairperson	Non-executive member
      Esra Yazıcı, who is the natural person representative on behalf of Ertuğrul Bitlis Yönetim Danışmanlığı Limited Şirketi	Vice chairperson	Non-executive member
      Ali Tuğrul Alpacar, who is the natural person representative on behalf of AFB Yönetim Danışmanlığı Limited Şirketi	Board Member	Non-executive member
      Bilal Cantekin Dinçerler, who is the natural person representative on behalf of FNK Yönetim Danışmanlığı Limited Şirketi	Board Member, CEO	Executive member
      Onur Kipri	Board Member	Independent Member
      Hamit Sedat Eratalar	Board Member	Independent Member

      By the decision of the Board of Directors dated 28.04.2025; Emin Bitlis Management Consulting Limited Company and its individual representative Tayfun Bayazıt have been appointed as the Chairman of the Board, and Ertuğrul Bitlis Management Consulting Limited Company and its individual representative Esra Yazıcı have been appointed as the Vice Chairman of the Board 1.

   6. Board Committees

      By the decision of the Company's Board of Directors dated 28.04.2025 and within the framework of the provisions in the Capital Markets Board's Corporate Governance Communiqué, it has been decided to establish the committee structure as follow.

      	Audit Committee	Corporate Governance Committee*	Early Assessment of Risk Committee
      Chairperson	Hamit Sedat Eratalar	Hamit Sedat Eratalar	Onur Kipri
      Member	Onur Kipri	Ali Tuğrul Alpacar	Esra Yazıcı
      Member		Banu Çamlıtepe	Tolga Üzümcü

      * It has been decided not to establish the Nomination Committee and the Remuneration Committee, and that their duties will be performed by the Corporate Governance Committee.

      1 The biographies of the Board of Directors are available on the company's corporate website (https://www.polisanholding.com).

   7. Senior Management

      The information regarding senior executives who have resigned and those who are currently in office during the year is as follows:

      POLİSAN HOLDİNG SENIOR MANAGEMENT 2

      NAME & SURNAME	POSITION
      Bilal Cantekin Dinçerler	CEO
      Tolga Üzümcü	CFO
      Mahmut Temiz	Human Resources Director
      Cumhur Aksoy	Information Technologies Director
      Mete Öztürk	Group Investment Projects and Procurement Director

      POLİSAN HOLDİNG GROUP COMPANIES SENIOR MANAGEMENT

      NAME & SURNAME	POSITION
      E. Burak Ekmekçioğlu	Polisan Kansai Boya General Manager
      Selçuk Denizhan	Poliport General Manager
      M.Serkan Metan	Polisan Kimya & Polisan Yapıkim General Manager
      Cenk Bitlis	Polisan Hellas Country Manager

   8. Number of Personnel, Collective Bargaining Practices, and Rights and Benefits Provided to Personnel and Workers

      As of March 31, 2025, the average number of personnel employed by the Company, its subsidiaries, and its joint venture was 1,033 (December 31, 2024: 1,109). In calculating the averages, the number of employees at Polisan Kansai Boya and Rohm and Haas was included in full, without weighting based on the Group's ownership interest.

      As of March 31, 2025, the provision for employee termination benefits amounted to TRY 88,999,946 (December 31, 2024: TRY 85,943,052).

      Collective Labor Agreement

      An agreement was reached on April 2, 2024, in the collective bargaining negotiations conducted between the labor union Lastik-İş, of which Polisan Kimya Sanayii A.Ş. and Polisan Yapıkim Yapı Kimyasalları San. ve Tic. A.Ş. are members, and the facilities in Dilovası, Adana, and Samsun. As a result, a two-year Collective Labor Agreement covering the period from January 1, 2024, to December 31, 2025, was signed. Our Company Poliport had a Collective Labor Agreement with the Liman-İş Union covering a three-year period from January 1, 2022, to December 31, 2024. This agreement expired on December 31, 2024. According to the decision of the Ministry of Labor, there is currently no authorized union at Poliport A.Ş. for the new term.

      2 The biographies of the Senior Executives are available on the company's corporate website (https://www.polisanholding.com).

   9. Financial Rights Provided to Members of the Management Body and Senior Executives

      At the Ordinary General Assembly meeting held on April 28, 2025, it was resolved that each Independent Member of the Board of Directors shall be paid a gross monthly remuneration of TRY 150,000, effective from the date of the General Assembly until the next ordinary general assembly meeting. No remuneration shall be paid to the other members of the Board of Directors.

      The total amount of salaries and similar benefits paid to senior management between January 1 and March 31, 2025, was TRY 25,701,579 (January 1 - March 31, 2024: TRY 18,706,489). The Group defines senior management as members of the Board of Directors, the General Manager, and Deputy General Managers.

2. Significant Developments Related to Company Activities

   1. Significant Developments in the First Quarter of 2025

      Application to the Capital Markets Board Regarding Bonus Capital Increase and Partial Spin-Off (March 28, 2025)3

      The Company's Board of Directors passed two resolutions and submitted an application to the Capital Markets Board (CMB) regarding a bonus capital increase and a partial spin-off through share distribution to shareholders.

      1. Partial Spin-Off Board Resolution: In line with the Company's strategic plans, it is aimed to establish an independent structure for its Paint Group business line, which includes Polisan Kansai Boya Sanayi ve Ticaret Anonim Şirketi ("Polisan Kansai"), operating in the field of paint production, and Rohm and Haas Kimyasal Ürünler Dağıtım ve Ticaret A.Ş. ("Rohm and Haas"), operating in the field of paint chemicals production. This initiative aims to enhance focus on the Paint Group, unlock the true value of the companies within the group, and create additional value for all shareholders.

         Accordingly, the Board of Directors resolved on March 28, 2025, to transfer the Company's 40% shareholding in Rohm and Haas, corresponding to 13,957,200 shares with a nominal value of TRY 13,957,200, and its 50% shareholding in Polisan Kansai, corresponding to 62,501,572 shares with a nominal value of TRY 62,501,572, to a newly established company - whose shares are planned to be listed on the stock exchange - through a share distribution model as part of a partial spin-of.

      2. Bonus Capital Increase Board Resolution: To facilitate the partial spin-off, the Board of Directors resolved on March 28, 2025, to increase the issued capital by TRY 3,016,276,170 to TRY 3,774,776,170 through a bonus capital increase, with the entire increase to be covered by the positive capital adjustment differences reported in the financial statements. In this context, an application was submitted to the CMB.

         Following the CMB's approval of the bonus capital increase, it was resolved to reduce the Company's

         issued capital from TRY 3,774,776,170 to TRY 758,500,000 as a result of the partial spin-off, and to

         3Konu ile ilgili detaylı açıklamalara Kamuyu Aydınlatma Platformu ve şirketimizin Kurumsal internet sitesinden

         (https://www.polisanholding.com) ulaşabilmektedir.

         amend Article 7 titled "Capital" of the Company's Articles of Association in accordance with the

         provisions of the Turkish Commercial Code and capital markets legislation.

         Capital Increase in Subsidiary

         By resolution of the Board of Directors, the Company increased the capital of its subsidiary Polisan Hellas by EUR 5 million, of which EUR 1 million was paid during the first quarter.

   2. Subsequent Events

      Explanations Regarding the General Assembly Meeting (April 28, 2025)

      The Ordinary General Assembly Meeting of the Company for the year 2024 was held on April 28, 2025, at 10:00 a.m. at the Company's headquarters located at Dilovası Organize Sanayi Bölgesi 1. Kısım, Liman Cad. No:7, Dilovası - Kocaeli, under the supervision of Ministry Representative Sultan Kurbanoğlu, who was appointed by the Kocaeli Provincial Directorate of Trade pursuant to their letter dated April 22, 2025, and numbered 108469061.

      The General Assembly Meeting Minutes and the List of Attendees are available on the corporate website at https://www.polisanholding.com.

      Approval of the Proposal Not to Distribute Dividends:

      In its resolution dated March 26, 2025, the Board of Directors proposed not to distribute dividends for the fiscal year January 1 - December 31, 2024. According to the standalone financial statements prepared in accordance with the Turkish Commercial Code ("TCC") and the Tax Procedure Law ("TPL"), the Company recorded a net profit of TRY 121,857,591.23. After setting aside the first legal reserve of TRY 6,092,879.56 (5% of the net profit), the "Net Distributable Profit" amounted to TRY 115,764,711.67. However, as the consolidated financial statements for the same period, which were prepared in accordance with the Communiqué on Principles of Financial Reporting in Capital Markets (II-14.1) and in compliance with TMS/TFRS, and audited by an independent auditor, show a net loss of TRY 633,267,758, it was resolved not to distribute any dividends.

      Instead, the profit reported in the standalone financial statements, after deducting the first legal reserve, will be transferred to retained earnings. This proposal, previously disclosed to shareholders, was submitted for approval at the Ordinary General Assembly Meeting of Polisan Holding held on April 28, 2025, and was approved.

      Appointment of the Independent Audit Firm:

      Considering the recommendation of the Audit Committee, the Board of Directors resolved on April 25, 2025, to appoint PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. as the audit firm to audit the Company's financial reports for the period between January 1 and December 31, 2025, in accordance with the relevant provisions of the Turkish Commercial Code No. 6102, the Capital Markets Law No. 6362, and applicable legislation. This appointment was submitted for the approval of shareholders at the 2024 Ordinary General Assembly Meeting and was approved.

      Furthermore, for the sustainability reports to be prepared in accordance with the Türkiye Sustainability Reporting Standards for the reporting periods January 1 - December 31, 2024 and January 1 - December 31, 2025, it was resolved to appoint KPMG Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.

      to carry out the mandatory sustainability assurance audit in line with the Assurance Standards issued by the Public Oversight, Accounting and Auditing Standards Authority. This appointment was also submitted to the General Assembly and approved by the shareholders.

   3. Information on Investments Made by the Company During the Relevant Accounting Period

      Between January 1 and March 31, 2025, the Company made a total investment expenditure of TRY 173,915,194 (January 1 - March 31, 2024: TRY 85,131,265).

   4. Analysis Related to Operations

The Company's summary consolidated financial information for 1Q2025, prepared in accordance with inflation accounting (IAS 29 "Financial Reporting in Hyperinflationary Economies"), is provided below4:

*In the Consolidated and Combined Revenue breakdown, figures before eliminations have been taken as the basis. Under the Chemistry segment in the combined revenues, Polisan Kimya's revenues and Rohm & Haas's revenues, proportionate to its shareholding, have been included.

4 Unless otherwise stated, amounts in the tables and explanations are expressed in millions of Turkish Lira ("TL") in terms of the purchasing power of the Turkish Lira as of March 31, 2025.

• In the first quarter of 2025, consolidated revenues amounted to TRY 1.5 billion. The following factors contributed to the year-over-year decline in revenues:

  • Widening gap between inflation and exchange rates: While CPI and exchange rate increases moved in tandem in the first quarter of 2024, they began to diverge in the second half of the year, with the gap widening to as much as 22 percentage points by Q1 2025. The fact that exchange rate increases lagged behind inflation limited the Turkish Lira equivalent of foreign currency-based revenues during the quarter. Additionally, the high base effect from indexation in the previous year contributed to the annual decline in revenues.

  • Adverse weather conditions: In the Construction Chemicals segment, construction activities were disrupted due to unfavorable weather in the first quarter, which in turn led to a postponement of demand.

  • Weak demand in chemical operations: Weak demand for chemical products in both domestic and European markets, coupled with low order volumes and declining USD-based prices, adversely affected production and exports in Türkiye's chemical industry, placing downward pressure on the Company's revenues.

• In 1Q2025, consolidated gross profit declined to TRY 246 million, due to inflationary pressures and the fact that most costs were incurred in Turkish Lira. A TRY 28 million improvement in operating expenses partially offset the negative impact on profitability. EBITDA stood at TRY 140 million.

• In 1Q2024, the reversal of inventory impairment and doubtful receivable provisions, along with insurance compensation income, resulted in TRY 52 million in Net Other Income from Operations. In the first quarter of 2025, however, TRY 43 million in Net Other Expense was recorded. This change was primarily due to the absence of one-off income items that were present in the prior year.

• Share of profit/loss from equity-accounted investees: While a profit of TRY 45 million was recorded in 1Q2024, a loss of TRY 153 million was reported in 1Q2025. In the Paint segment, the decline in domestic demand, rising operating expenses due to high inflation, and elevated financing costs were the main drivers of the loss recorded in 1Q2025.

• In the first quarter of 2025, a Net Loss of TRY 306 million was recorded, driven by the decline in Gross Profit, losses from equity-accounted investees, and the impact of deferred tax expenses.

  CONSOLIDATED CASH FLOW SUMMARY
  TL million	1Ç2025	1Ç2024
  Cash flows from operating activities	-77	622
  Cash flows from investing activities	-144	-57
  Cash flows from financing activities	80	-343
  Net increase/decrease in cash and cash equivalents	-141	223
  Cash and cash equivalents at the beginning of period	560	668
  Cash and cash equivalents at the end of period	368	803

• Cash flows from operating activities amounted to negative TRY 77 million in 1Q2025, primarily due to the decline in operating profitability.

• Capital expenditures totaled TRY 174 million in 1Q2025, compared to TRY 85 million in the same period last year. Despite the increase in capital expenditures, cash outflows from investing activities amounted to TRY 144 million, supported by TRY 29 million in interest income (1Q2024: TRY 57 million cash outflow).

• In 1Q2025, net loan proceeds amounted to TRY 121 million, while interest payments totaled TRY 36 million. As a result, financing activities generated a net cash inflow of TRY 80 million (1Q2024: TRY 343 million cash outflow).

• As of the end of March, current assets totaled TRY 2.6 billion, reflecting a TRY 192 million decrease in Cash and Cash Equivalents, a TRY 104 million decline in Trade Receivables, and a TRY 127 million reduction in Inventories. This was mainly driven by the inventory drawdown and debt repayments at Polisan Hellas. Additionally, due to the start of the high season, payments were made for inventory purchases in the chemicals and construction chemicals operations.

• Fixed Assets decreased by TRY 506 million to TRY 18.0 billion, mainly due to declines in equity-accounted investments and Deferred Tax Assets.

• A TRY 235 million decrease in Trade Payables and a TRY 63 million increase in short-term borrowings were the main drivers of the decline in Short-Term Liabilities. Meanwhile, a TRY 333 million decrease in Deferred Tax Liabilities accounted for the change in Long-Term Liabilities. Total Liabilities decreased by TRY 469 million.

• Due to the net loss recorded in the period, Equity declined by TRY 357 million to TRY 16.6 billion.

• As of March 31, 2025, consolidated Net Financial Debt stood at TRY 1.58 billion, while Polisan Hellas's net financial debt was TRY 1.27 billion. During 1Q2025, inventory purchases increased and loans were utilized in preparation for the high season in the chemicals and construction chemicals operations. On a standalone basis, Polisan Holding had no financial debt; however, considering a TRY 18 million lease liability under IFRS 16, the standalone net cash position stood at TRY 121 million.

• Despite a total TRY 231 million decline in Trade Receivables and Inventories, Net Working Capital remained flat at TRY 766 million compared to year-end 2024, due to the TRY 235 million reduction in Trade Payables. The Group has a net foreign currency debt position of USD 1.6 million and EUR 5.4 million (including hedged liability amounts).

  POLİPORT
  TL million	1Q2025	1Q2024	Change YoY.
  Revenues	534	586	-9%
  EBITDA	230	301	-24%
  EBITDA Margin	43,1%	51,5%	-8,4 p.p.
  Net Profit/Loss	43	133	-68%

• The widening gap between inflation and exchange rates, which began to take effect in the second half of 2024, negatively impacted the revenues of Poliport, which primarily generates income in foreign currency. In the dry bulk terminal, the volume of handled goods decreased by 6% year-over-year to 362 thousand tons. In the liquid cargo terminal, sales volume rose by 4% to 752 thousand m³, supported by the commissioning of the 8th tank farm project with a capacity of 5,850 m³ in November 2024.

• Due to the negative impact of the inflation-exchange rate gap on operating performance, EBITDA came in at TRY 230 million, with an EBITDA margin of 43.1%.

• Operating Profit was recorded at TRY 148 million. However, a monetary loss of TRY 26 million and a deferred tax expense of TRY 70 million resulted in a Net Profit of TRY 43 million.

  POLİSAN KİMYA
  TL million	1Q2025	1Q2024	Change YoY.
  Revenues	487	540	-10%
  EBITDA	1	38	-99%
  EBITDA Margin	0,1%	7,0%	-6,9 p.p.
  Net Profit/Loss	-43	-78	-

• Polisan Kimya's sales volume remained flat in 1Q2025 compared to the same period of the previous year, while revenues declined by 10% to TRY 487 million.

• The widening gap between inflation and exchange rates, which began to affect results in the second half of 2024, negatively impacted the company's revenues, which are largely indexed to foreign currency.

• In addition to weak demand in both domestic and export markets, fluctuations in contract and spot prices in the raw material market in January contributed to the decline in operating profitability. Despite the inflationary environment, cost discipline was maintained, and operating expenses decreased by 7%

  year-over-year. However, volatility in raw material prices and low USD-denominated sales prices were the main factors limiting profitability, resulting in an EBITDA of TRY 1 million.

• Net financial expenses amounted to TRY 50 million, and a Net Loss of TRY 43 million was recorded. Nevertheless, a TRY 69 million improvement in deferred tax expenses led to a year-over-year improvement in bottom-line performance.

  POLİSAN YAPIKİM
  TL million	1Q2025	1Q2024	Change YoY.
  Revenues	291	472	-38%
  EBITDA	-13	39	-
  EBITDA Margin	-4,4%	8,3%	-12,7 p.p.
  Net Profit/Loss	-30	-30	0%

• Yapıkim's sales volume declined by 21% in 1Q2025 compared to the previous quarter. This decrease in both sales volume and revenue was primarily driven by postponed demand for cement and ready-mix concrete due to harsh winter conditions. In addition, the widening gap between inflation and exchange rates, which began to impact results in the second half of 2024, negatively affected the company's revenues, which are indexed to foreign currency.

• As a result of the decline in revenues, Gross Profit amounted to TRY 37 million, while EBITDA was recorded at negative TRY 13 million.

• In 1Q2025, the company recorded a Net Loss of TRY 30 million, in line with the previous year, due to higher financing expenses and a monetary loss of TRY 19 million arising from the indexation of equity items under inflation accounting.

  POLİSAN HELLAS
  TL million	1Q2025	1Q2024	Change YoY.
  Revenues	178	126	41%
  EBITDA	-70	-54	29%
  EBITDA Margin	-39,0%	-42,7%	3,7 p.p.
  Net Profit/Loss	-142	-28	415%

• Weakening demand due to recession risks that emerged in Europe starting from the fourth quarter of 2022 continued to negatively impact PET product sales. The anti-dumping measures implemented by the European Union failed to deliver the expected results, and the strong competitiveness of PET products originating from the Far East continued to put downward pressure on sales prices.

• The company was unable to sell off its finished goods inventory carried over from 2024 at the targeted profit margin. As a result, the operating loss increased year-over-year, driven by the ongoing contraction in the PET market.

• Insurance compensation income recorded in 1Q2024 had helped limit the prior year's operating loss. However, in 1Q2025, the increase in operating expenses and financing costs led to a Net Loss of TRY 142 million.

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