ANNUAL REPORT LETTER FROM THE CHAIRMAN 2 DIRECTORS' REPORT OF THE CONSOLIDATED GROUP 7 CAF GROUP BUSINESS MODEL AND OUTLOOK 8 BUSINESS PERFORMANCE AND RESULTS 10 RAILWAY SEGMENT 12 BUS SEGMENT - SOLARIS 18 INVESTMENTS 22 MAIN RISKS AND UNCERTAINTIES 24 STOCK MARKET INFORMATION 28 OTHER INFORMATION 30 ANNUAL CORPORATE GOVERNANCE REPORT 31 CONSOLIDATED NON-FINANCIAL INFORMATION STATEMENT 33 AUDITOR'S REPORTS 75 FINANCIAL STATEMENTS OF THE CONSOLIDATED GROUP 89 BALANCE SHEETS 90 STATEMENTS OF PROFIT OR LOSS 92 STATEMENTS OF COMPREHENSIVE INCOME 93 STATEMENTS OF CHANGES IN EQUITY 94 STATEMENTS OF CASH FLOWS 95 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 96 APPROVAL BY THE BOARD OF DIRECTORS 160 RESOLUTIONS SUBMITTED BY THE BOARD OF DIRECTORS FOR APPROVAL BY THE SHAREHOLDERS' MEETING 161 PROPOSED DISTRIBUTION OF INCOME 162 BOARD OF DIRECTORS 162 SUPPLEMENTARY INFORMATION 163 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 164 CONSOLIDATED STATEMENTS OF PROFIT OR LOSS 166 ANNUAL REPORT 2020 The following English translation is provided by the Company for information purposes only, based on the original and official document in Spanish available on the Company's website (www.caf.net). In the event of any discrepancy between the English version and the Spanish original document, the latter will prevail. This publication, which is also published in Basque, French and Spanish, includes the legal documentation relating to CAF and Subsidiaries. More information on CAF and its products, together with the information required by law for shareholders and investors, can be obtained on the website www.caf.net LETTER FROM THE CHAIRMAN Dear Shareholder, By means of these brief lines, I first of all wish to greet you one year on and also convey to you the most noteworthy events that took place in relation to the CAF Group in 2020. This was a year in which COVID-19 left its mark on society in terms of both health and the economy. The CAF Group's response to the pandemic was swift and decisive, and was conducted in close cooperation with its stakeholders. The safeguarding of human health and safety was prioritised at all times through the adoption of measures such as fact, an unstoppable trend. Zero-emission buses are now being remote working and flexibility. Continuous information channels adopted on a massive scale in the major European cities, were established with shareholders in order to give visibility to resulting once again in 2020 in an increasing number of contracts business performance, and telematic means were adopted to for alternatively powered buses. Orders for electric buses for enable voting at the Annual General Meeting. As regards Germany, Poland, Romania, Spain and Switzerland, among other customers and suppliers, schedules were adapted and the effects countries, have boosted Solaris’ leadership in the European of the temporary suspension of activities and the mobility market, making it worthy of the Global e-Mobility Leader Award in restrictions to which we were subject were mitigated. With 2020, which it received at the e-Mobility Leader Awards Gala respect to society, we contributed towards mitigating the effects 2020 in recognition of its contribution to more sustainable of the pandemic through various actions, such as donating mobility solutions. Also, Solaris’ long-term commitment to healthcare material manufactured using a 3D printer to healthcare hydrogen has resulted in new success stories in countries such institutions, and also protecting passenger safety by applying the as Germany, the Netherlands, Italy and Sweden. According to catalogue of COVID-19 solutions to various CAF fleets (rail or bus) market forecasts, hydrogen-fuelled urban buses will experience throughout the world. vigorous growth in the coming decade, with Solaris leading the field. I want to give special recognition to the exemplary conduct of CAF's team of professionals, who have demonstrated Consequently, the backlog at year-end stood at EUR 8,807 million, extraordinary commitment and responsibility throughout this representing a slight decrease on the figure recognised in 2019 but difficult and uncertain year. I would like to express my gratitude to 3.2 times consolidated annual sales, giving visibility to the Group’s everyone for their excellent work. activities in the medium term. Although the combined long-term effect of remote working and its The pandemic affected business performance, particularly in the repercussion on mobility habits, on the one hand, and the first half of the year, but the increase in activity in the second half overriding need to reduce polluting emissions and congestion revealed the robustness of the pillars underpinning the Group and generated by road traffic, on the other, remains to be evaluated, enabled consolidated revenue to grow 6% year-on-year to EUR the market has remained stable in terms of volume and no 2,762 million. There is no doubt that the broad diversification of investments have been cancelled in the railway sector as a result products and geographical areas in which the CAF Group operates of the pandemic, above and beyond a certain slowdown in award have enabled us to mitigate the effects of COVID-19. processes, particularly in respect of major rail projects. In this context, the CAF Group managed to end the year with order intake If we analyse this revenue figure in a little more detail, beginning worth EUR 2,123 million, arising from contracts in both the railway with the railway segment, vehicle manufacture declined in the first and bus segments. half due to the total or partial mandatory stoppage of production at various plants. The Group was able to recover this activity and even The most significant contracts include the award to CAF of the step it up in the final months of the year thanks to the effective contract for the supply of 37 metre-gauge units marking the implementation of new project programmes and full compliance beginning of RENFE’s ambitious investment plan, added to which with the plan to recover unworked hours at the Spanish plants in was the contract for the supply of diesel-electric units for the the first half. A total of 1,024 vehicles were manufactured, one of Republic of Myanmar, consisting of the manufacture of 246 the best figures in recent years. Of note among the manufacturing vehicles, awarded at the end of the year. The contract extensions projects in progress in 2020 were the units for the Northern Arriva for additional units by the authorities of various geographical areas and West Midlands franchises (United Kingdom), the Civity such as Helsinki, Naples, Stockholm, Amsterdam and the region of platform suburban trains for NS (the Netherlands) and for Auckland Flanders and Utrecht, who have thus renewed their confidence in Transport (New Zealand), the metro units for the cities of Barcelona CAF, also warrant a special mention. The contracting of new long- and Manila, as well as various tram compositions for Utrecht, term maintenance services in Scandinavia in conjunction with Luxembourg, Amsterdam, Stockholm, Lund and Budapest, among EuroMaint, and the signalling contracts awarded to CAF Signalling others. Meanwhile, service revenue increased, due mainly to the by ADIF, as well as other smaller awards from other businesses, full consolidation of EuroMaint in 2020 following its acquisition by completed the rail order intake for the year. CAF in 2019, in a context in which maintenance services were affected as a result of the aforementioned mobility restrictions. The transformation of mobility in city centres and metropolitan Revenue associated with the other businesses increased, even areas throughout the world towards more sustainable models is a though mobility restrictions affected work in progress, particularly 2 with respect to the integrated projects under way in Australia and implementing the Group's mission and satisfying the needs and EMEA. expectations of the stakeholders, thus creating sustainable, long- term value. CAF’s adhesion to the United Nations Global Compact Mobility demand, which is so important for operators and public and the progress made with respect to the internal organisational authorities the world over, and also for CAF as a fleet maintainer, structure to promote our ESG commitments also warrant a special was affected by the restrictions applied by the various health mention. Further information on all the foregoing is provided in the authorities in an effort to mitigate the pandemic. However, traffic section relating to the Non-Financial Information Statement of the demonstrated notable resilience once those restrictions eased and Notes to the Consolidated Financial Statements and in the recovered significantly in city centres and metropolitan areas, to Sustainability Report. which our Group has major exposure. This enabled us to substantially improve rolling stock vehicle maintenance activities in As you will see, the anticipation and immediate management of the various geographical areas as the year progressed. the pandemic, the plan to minimise the impact on the business, and the dedication and effort of all those involved have enabled us With respect to buses, 2020 was historical for Solaris in terms of to overcome the initial impact and close the year with satisfactory its sales figure and the number of vehicles sold -1,560 units-, this results. being the highest figure achieved in its 25-year-long history. Of note is the significant growth experienced in the sale of low- and We are looking to the coming years with optimism