Webinar Presentation H1 2021 www.olainfarm.com 2 Agenda 01 02 Operational environment Financial performance H1 2021 03 04 Main events Q&A session www.olainfarm.com 3 Today’s speakers Chairman of the Member of the Management Management Board Board www.olainfarm.com 4 Operational Environment www.olainfarm.com Group operations in H1 2021 5 Positive financial results in Extraordinary General Dividends paid on 12 July 6 months Meetings of Shareholders held 2021 in total amount EUR KEY HIGHLIGHTS Key ratios are hitting on 17 June 2021 and 18 June 2 394 thousand (0.17 EUR budget figures 2021 per share) The Group continues to New Council has been Group companies have successfully provide elected received Latvian supplies of goods in all Government financial operating markets support amounting to EUR 183 thousand Overall pharmaceutical Changes in Management Covid-19 restrictions markets in CIS region Board and election of new influenced possibilities of the continue to struggle Chairman of the Management Group to realize planned Board investments www.olainfarm.com 6 Main business factors Olainfarm products have shown strong demand due to product mix, brand recognition and renewed marketing strategy Business model restructuring in key markets are yielding remarkably good performance in Ukraine, Russia and Kazakhstan Devaluation of currencies in key markets was much milder than a year ago www.olainfarm.com 7 Financial performance in H1 2021 www.olainfarm.com 8 Key Financial Indicators Sales in H1 2021 showed sustainable growth due to strong brand portfolio and marketing efforts, EBITDA was impacted by rising marketing costs and created bad-debt provisions Sales, th EUR EBITDA, th EUR Net profit, th EUR -32% -23% 80 000 20 000 12 000 17 924 70 000 66 369 66 671 18 000 10 017 10 000 16 000 60 000 7 668 14 000 8 000 50 000 12 129 12 000 40 000 10 000 6 000 30 000 8 000 4 000 6 000 20 000 4 000 2 000 10 000 2 000 0 0 0 2020 2021 2020 2021 2020 2021 www.olainfarm.com 9 Group Sales Quarterly revenue distribution, m EUR 45 40 Olainfarm medicines sales continued to grow and to gain market 35 30 share 25 20 15 10 5 Group’s sales in H1 of 2021 reached EUR 66 671 thousand, same 0 level as last year, however 6M 2020 sales include unexpected 1.cet. 2.cet. 3.cet. 4.cet. deliveries to Russia in anticipation of serialization 2018 2019 2020 2021 Trailing 12 months sales, mln. EUR 150 140 130 134 137 135 137 In contrast to 2019 and 2020, significant one-off items are not 120 129 124 128 127 expected in 2021 110 121 121 122 123 122 100 90 80 70 60 50 31.03.2019 30.06.2018 30.09.2018 31.12.2018 30.06.2019 30.09.2019 31.12.2019 31.03.2020 30.06.2020 30.09.2020 31.12.2020 31.03.2021 30.06.2021 www.olainfarm.com Group Sales by Segment 10 Medicine production2020is sales:a key EUR segment 122 million Group Sales by Segment, H1 2020 vs H1 2021, mln. EUR 70 Other 5 4.6 EUR 4.6 million ❖ JSC Olainfarm’s most important segment of 60 2.9 3.9 Compression materials (EUR -0.3 million or -7%) products in terms of sales value remains EUR 3.9 million Medicine production, with sales totaling at 50 13 13.4 (EUR +1 million or +34%) 7% EUR 43.0 million 3.2 1.7 6% 40 ❖ Increase in the second most important 30 Retail segment Retail is 3% 42.2 43 EUR 13.4 million 20% 20 (EUR +0.4 million or +3%) 10 2% 65% 0 Wholesale Medicine production 2020 2021 EUR 1.7 million EUR 43 million Other segments (EUR -1.5 million or -46%) (EUR +0.7 million or 2%) Compression Materials Retail www.olainfarm.com Group Main target markets 11 ❖ Largest market for JSC Olainfarm in H1 2021 was Latvia: EUR 19.7 million of products sold; 2021 sales EUR 66.7 million; an increase of EUR +0.6 million ( +3% yoy) increase by EUR 0.3 million 19.7 19.1 2020 2021 Ukraine 3% 2% Latvia nd EUR 6.3 million 7% EUR 19.7 million ❖ 2 largest market was Russia: EUR 18.1 million (EUR +1.2 million) (EUR +0.6 million) of products sold, a decrease of EUR -1.6 million +24% 30% +3% 9% (-8% yoy) 19.7 18.1 Central Asia EUR 6.7 million 10% (EUR +2 million) 2020 2021 +44% ❖ 3rd largest market was Belarus: EUR 7.7 million of 12% products sold, a decrease of EUR -1.4 million Belarus 27% Russia (-15% yoy) EUR 7.7 million EUR 18.1 million 9.1 (EUR -1.4 million) (EUR -1.6 million) 7.7 -15% -8% 2020 2021 ❖ 4th largest market was Central Asia: EUR 6.7 million of products sold, an increase of EUR +2 million (+44% yoy) www.olainfarm.com Sales of Medicine Sales breakdown by product groups, H1 2021 (ext.) vs H1 2020 (int.) 12 Products 18% Nervous system 18% Nervous system Antibacterial products is a key Anti-allergy 11% 10% product group with 50% 50% Cardiovascular a share of 50% 6% 6% Other 16% 15% Sales of the largest medicine brands in H1 2021 and H1 2020 FURAMAG/FURASOL NEIROMIDIN NOOFEN ADAPTOL ETACIZIN FENKAROL Other 6M 2020 16% 17% 18% 15% 10% 6% 18% 42 021 6M 2021 15% 18% 20% 13% 11% 6% 18% 43 409 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% www.olainfarm.com 13 Net Profit Gross profit – major impact comes from cost reclassification between Administration and Manufacturing expenses Selling expenses – activation of business operations of Group subsidiary in Russia and affiliate in Ukraine led to increase of selling expenses Financial – exchange rate fluctuations (Russian Ruble). H1 2021 Positive difference between current and previous year, H1 2020 on the contrary to significant losses in the previous profit Gross year expenses Selling Other changes, net changes, Other Financial result, net result, Financial Outlook for 2021 remains in line with budget www.olainfarm.com 14 Financial Stability Cash accumulated at the end of the reporting period is 25.9 million EUR The Group’s Debt service coverage ratio (DSCR) in H1 2021 was 2.6 and Net debt- to-EBITDA was -0.9 Early repayment of loan in amount of 2 million EUR was made during the reporting period Full repayment of BlueOrange loan in amount of 7 million EUR after the reporting period www.olainfarm.com 15 Main events www.olainfarm.com Main events – Extraordinary General Meetings 17th of June: 18th of June: • Annual report for 2020 is approved • New Supervisory Council is elected • Payment of dividends is approved (0.17 • New Audit Committee is elected EUR per share) • Revised Remuneration Policy for Council and Management board is approved www.olainfarm.com16 New Supervisory Council and Audit Committee The following Supervisory Council members The following Audit Committee members were elected for the term of two years: were elected for the term of five years: • Viesturs Gurtlavs • Juris Bundulis, Chairman • Sandis Petrovičs • Sandis Petrovičs, Deputy • Arnis Gulbis • Irina Maligina, Deputy Total monthly remuneration of the • Andrejs Leibovičs members of the Council is EUR 11 500. • Pēteris Rubenis Total monthly remuneration of the members of the Council is EUR 21 000. www.olainfarm.com17 Changes in the Management Board • New Board members: ▪ Jānis Buks, Chairman ▪ Jānis Leimanis, CFO • Elena Bushberg, Signe Baldere-Sildedze and Raimonds Terentjevs continue to serve on the Board www.olainfarm.com18 Mandatory share buy back offer • From 19th of July to 17th of August JSC AB CITY conducted mandatory share buy back offer • In total 2 427 408 shares or 17.23% were acquired • JSC AB CITY increased its share in voting rights from 30.85% to 48.08%. www.olainfarm.com19 20 Q&A session www.olainfarm.com Thank you! www.olainfarm.com 21.