KARO LEATHER IS MOVING TO THE MAIN MARKET OF THE PRAGUE STOCK EXCHANGE. THE CZECH NATIONAL BANK HAS APPROVED THE PROSPECTUS FOR THE TRANSFER

The Czech National Bank has approved the prospectus of KARO Leather a.s., a leading Czech leather processor for the furniture and footwear industries, for its transfer from the Start Market to the Prime Market of the Prague Stock Exchange. KARO will thus become the twelfth company whose shares are traded on this prestigious segment. Since its listing on the stock exchange in 2019, the company has undergone a remarkable transformation—its value has increased nearly tenfold to approximately CZK 1.2 billion. Trading on the Prime Market is expected to begin on March 2, subject to approval of the application by the Prague Stock Exchange.

FROM IPO TO PRIME MARKET: A STORY WITHOUT PRECEDENT IN THE CZECH REPUBLIC

https://www.youtube.com/watch?v=zBvmSTMrEYk

When KARO Leather entered the Start Market of the Prague Stock Exchange in 2019, it raised CZK 40 million in its initial share issuance at a valuation of CZK 120 million. Since then, the company has become one of the fastest-growing firms on the Czech capital market. The total volume of capital transactions executed through the stock exchange has reached CZK 700 million, and the listing on the Prague Stock Exchange also supported the refinancing of bank debt in the amount of CZK 286 million.

Today, KARO’s market value stands at around CZK 1.2 billion—almost ten times more than at the time of its listing. The company’s growth is best demonstrated by its financial results: EBITDA rose from CZK 17 million in 2018 to CZK 97.5 million in 2024, and for the fiscal year 2025, a further significant increase in this metric is expected. The share price development is equally remarkable: from an issue price of CZK 40 at the IPO on November 13, 2019, its value has increased more than fourfold and is currently trading at around CZK 170, corresponding to a compound annual growth rate (CAGR) of over 26%. Since its IPO, KARO Leather has been one of the most profitable stocks in the history of the Prague Stock Exchange and the most successful issue on the Start Market for small and medium-sized enterprises.

The capital raised on the stock exchange enabled the company to significantly expand its original plant in Boršov, acquire a brownfield site in Brtnice, and revive the local leather-making tradition through the construction of a modern production facility, which is unique in its scale and technology in the Central and Eastern European region.

What the Prime Market will bring

“Prime Market is a natural next step for KARO. We believe it will bring our investors higher liquidity, a new level of transparency, and a platform for further growth. We also hope it will open doors to foreign investors. I would also like to take this opportunity to thank the law firms and advisory companies that accompanied us throughout our journey on the capital market—especially STARTEEPO, which has supported us from the IPO all the way to today’s transition to the Prime Market,” says Jakub Hemerka, CFO and member of the board of directors of KARO Leather.

“KARO is a unique Czech business story. The company entered the stock exchange as a micro-sized firm and within a few years managed to grow into the Czech elite,” says František Bostl, CEO of the advisory group STARTEEPO, which was responsible for KARO’s IPO, all subsequent capital transactions, and the transition to the Prime Market. “Such a successful company motivates us as IPO advisors in our work—to seek similar stories for the Prague Stock Exchange and Czech investors,” he added.

Outlook and plans for 2026

The transition to the Prime Market opens a new chapter in the company’s development. KARO is preparing several strategic initiatives:

• Share buyback launch: A share repurchase program already approved by the General Meeting will be activated following approval of the 2025 annual report. The company expects the actual launch in the second half of 2026, as previously announced.

• Transition to IFRS: The adoption of International Financial Reporting Standards will increase transparency and facilitate comparability with issuers on European markets.

• Product portfolio expansion: KARO will continue developing its product offering and strengthening its market position.

• Vertical integration & acquisitions: The company is actively evaluating several acquisition opportunities aimed at strengthening vertical integration.

Further information can be found in the prospectus published on the investor website https://karo-leather.com/for-investors

More detailed financial information will be presented in March during the results presentation for Q4 2025.

About KARO Leather Group

The history of the KARO Group, which is structured under the holding company KARO Leather a.s., dates back to the mid-1990s, when it originally focused on trading leather for the furniture industry. In 2015, the purely trading group gradually began its transformation into a comprehensive trading and manufacturing group.

In-house production started in November 2015 in Boršov near Jihlava, and in 2023 a second plant was opened in Brtnice near Jihlava. KARO is the only production facility of its kind in the entire Central and Eastern European region and is introducing an innovative and disruptive production system to the European market, close to a just-in-time model.

At the same time, the KARO Group is building a new circular economy ecosystem in the Czech Republic for the utilization of cattle hides, which today often end up as unprocessed waste in rendering plants. Since 2019, shares of KARO Leather a.s. have been traded on the Prague Stock Exchange.

Source: Press release KARO Leather a.s.

Promotional notice

The prospectus for shares of KARO Leather a.s. has been approved by the Czech National Bank and published by the Issuer in accordance with Regulation (EU) 2017/1129 of the European Parliament and of the Council. Approval of the prospectus by the Czech National Bank should not be understood as an endorsement of the shares for which the issuer has applied for admission to trading on the regulated Prime Market. Potential investors should read the prospectus before making an investment decision in order to fully understand the potential risks and returns associated with a possible investment in shares of KARO Leather a.s.

The prospectus is available in electronic form on the website www.karo-leather.com, in the Investor Relations section (https://karo-leather.com/for-investors).

All information contained in this document is for informational purposes only, and recipients should not rely on it without further consideration. KARO Leather a.s., nor any members of its governing bodies, employees, or advisors, express or accept any responsibility for this information, provide any warranty for it, or accept any liability for its accuracy, interpretation, or misuse, including any statements, assertions, assumed facts, financial figures, forecasts, or expectations contained in this document or derived from it.

This document does not constitute an offer to subscribe for or purchase shares or any other securities and does not represent the existence of any offer or sale of shares or other securities in any jurisdiction where such offer or sale would be unlawful without the appropriate approval or registration under the securities laws of the relevant jurisdiction.

Any assumptions and forward-looking statements regarding the future development of KARO Leather a.s., its financial condition, scope of business activities, or market position should not be considered statements or binding commitments by the issuer regarding future events or results, as such future events or results depend fully or partially on circumstances and events that the issuer cannot directly or fully control. Potential investors interested in purchasing any shares of KARO Leather a.s. should conduct their own analysis of the risks, trends, or outlooks presented in the prospectus, or carry out other independent investigations, and base their investment decisions on the results of such independent analyses and assessments.