Zur Rose Group AG

Investor Presentation • Mar 21, 2019

2018 Results – Analyst & Media Conference Walter Oberhänsli | Marcel Ziwica 21 March 2019

Today's Presenters

Walter Oberhänsli Founder, Group CEO Marcel Ziwica Group CFO

2018 in review

Comprehensive introduction by 2020

Electronic prescription in Germany

Ban on Rx mailorder included in the coalition agreement

Successful increase in capital 200

million in net proceeds

72.5% OTC sales growth in Germany

Significant expansion of European market leadership Acquisition of apo-rot, medpex and PromoFarma

Increase in physicians business market share

Increase in market share in Germany

From 18% to 31%

Expansion of business model to include marketplace PromoFarma – springboard for further international expansion

Successful placement of public Bond: CHF 115 million

Paper prescription as an impediment to growth in Rx business

Rx OTC BPC UNIFIED PLATFORM Telemedicine Outcome Reporting Medication Management eRx Consumers/Patients B2C¹ Customers Marketplace Physicians B2B/B2B2C Insurance Companies B2B2C Manufacturers B2B2C Third Party Providers B2B Pharmacies B2C/Marketplace Widening presence across the ecosystem, whilst reinforcing barriers to entry Vision: European healthcare ecosystem

Great starting position

Many elements of future ecosystem already established

3 Unmatched relevant customer base 4 Highest brand awareness and trust

Financials

Financials

2018 guidance achieved

Expected sales growth of over 20% in local currency

Break-even on EBITDA level, adjusted for exceptional charges and Promofarma

Zur Rose Group Notes: 1 preliminary figures Zur Rose Group Sales

Group Sales growing at above 20%

Segment Switzerland

Sales growing at above 5% despite regulatory price cuts

• Regulatory price cut effect of 4.5%
• B2B market share growing from 23.6% in 2017 to 24.7% in 2018
• B2C growth stemming from Shop-in-Shop and Specialty Care business

Segment Germany EURm

Impressive growth rate solidifying leadership position in Germany

• Organic growth clearly outperforming the Ecommerce market(1):
• Rx: 5.0% vs. -1.6%
• OTC: 14.0% vs. 8.1%

KPIs Segment Germany

Zur Rose Group

Notes: Figures reflecting performance of entire German business regardless of consolidation progress of the acquired businesses | 1 Last twelve months ending 31 December of the respective year | 2 Share of orders from existing customers in relation to total number of orders | 3 Sources: Sempora, Insight Health, Shop Apotheke; Zur Rose Group market share is an aggregate number of Segment DE, apo-rot, Eurapon, medpex and Vitalsana marketshare 2017 | 4 Basket size equals average value of the purchase per order | 5 Number of orders per active customer and year 13

Profitability

Break-even on EBITDA level, adjusted for exceptional charges and PromoFarma

Zur Rose Group Note: 1 Adjustments reflecting costs of capital market transactions, M&A and integration/reorganisation | 2 Restated by IAS 19 for better basis of comparison | 3 Difference between Group EBITDA and sum of Segment CH, Segment DE and PromoFarma equals EBITDA at corporate incl. intercompany eliminations

Outlook

Mid-term financial targets

Integration synergies leading to sustainable EBITDA % improvement

• Current market developments create unprecedented momentum
• The company aims to double its 2018 sales by 2022
• EBITDA target margin for 2022 is 5 to 6 percent, corresponding to CHFm 120 to CHFm 150

Outlook

Group Outlook 2019

Management expects sales of CHF 1.6 billion (including medpex's total annual sales), corresponding to growth of over 30 percent compared to the previous year

The focus remains on growth, with the aim of achieving break-even at the EBITDA level

Current trading supports guidance including medpex performance

Strategy Update

Group: Target organization

Moving towards an agile business model driven organization

• Organization historically grown on a country-based model
• Initiation of matrix layer to leverage business model know-how across borders

DE —Integration & synergies —eRx focus —Regulatory

Business Priorities 2019

Ready to change

the world of pharmacy

Zur Rose Group

CH —Omnichannel —Insurance cooperations

ROE —International expansion

Zur Rose Group integration strategy a combination of four pillars

Brands

One brand — selected labels: maximise marketing efficiency and differentiate communication with stakeholder groups

Organisation / Culture

One culture: same DNA and vision across the Group

IT Platform

	٠

Logistics

One hub: expanded logistics center in strategic location Heerlen (NL), multiple service locations across Germany to remain

Integration on track – first milestones achieved

Integration on track – roadmap defined

Shared front- & back-end

Shared organisation/culture

One brand – selected labels

M&A strategy bringing new talent & capabilities on board

• «Best in Class» industry know-how
• Highly motivated to drive change

Germany: 2. eRx focus in Germany

E-script is finally coming

• Law for Higher Security in the Supply of Medication includes electronic prescriptions - required regulations to be agreed within 7 months after promulgation of law and passed German Kabinett on 30 January
• Techniker Krankenkasse initiated first e-script project in Germany

Increasing online penetration through eRx expected, unlocking substantial upside potential

Illustrative, assuming constant E-commerce market share and total market size

Germany: 2. eRx focus in Germany

eRx readiness

Technology

eRx software in place in order to shape the design of the future architecture

Awareness

Boost awareness of e-prescription via broad marketing campaign

Regulatory

Zur Rose Group

Extend participation in pilot projects to accelerate big-scale implementation

Germany: 3. Regulatory

Rx ban off the table – ongoing discussions around alternatives

• Spahn's proposal of a bonus cap rejected by pharmacy association
• Discussions about alternatives ongoing
• EU Commission issued reasoned opinion to Germany in regards to the fixed price system and its restriction of free movement of goods

Switzerland: 1. Omnichannel

Roll-out of Shopin-Shop format after successful pilot phase

Switzerland: 2. Insurance cooperations

Roll-out further alternative insurance models

• Pressure on insurance companies to establish alternative, cost efficient models is increasing
• Attractive pricing and quality increasing digital services
• Negotiations with big insurance companies regarding new cooperations ongoing

Rest of Europe 1. Expansion

Market entry France & Italy

Thank you

Walter Oberhänsli Founder, Group CEO

ir@zurrose.com +41 58 810 11 49 Marcel Ziwica Group CFO

Zur Rose Group financials

Income Statement

	2018		2017		2016
	CHF m	%	CHF m	%	CHF m	%
Sales	1207.1	100.0	982.9	100.0	879.5	100.0
Cost of goods	(1015.9)(1)		(836.3)		(747.6)
Other income	3.1(1)		9.7		5.4
Personnel expenses	(93.7)	(7.8)	(78.3)	(8.0)	(60.2)	(6.8)
Marketing expenses	(41.3)	(3.4)	(33.7)	(3.4)	(22.2)	(2.5)
Distribution expenses	(33.1)	(2.7)	(26.6)	(2.7)	(22.7)	(2.6)
Administrative expenses	(24.9)	(2.1)	(27.4)	(2.8)	(21.5)	(2.4)
Rent expenses	(6.0)		(4.2)		(3.6)
Other operating expenses	(7.9)		(7.3)		(5.1)
EBITDA	(12.5)	(1.0)	(21.2)	(2.2)	2.1	0.2
D&A	(18.9)		(17.1)		(9.2)
EBIT	(31.4)	(2.6)	(38.3)	(3.9)	(7.1)	(0.8)
Financial result	(7.1)		1.8		(5.6)
EBT	(38.5)	(3.2)	(36.5)	(3.7)	(12.7)	(1.4)
Income tax expenses	(0.6)		0.2		(0.1)
Net income	(39.1)	(3.2)	(36.3)	(3.7)	(12.8)	(1.5)

Zur Rose Group financials

Balance Sheet		(1) 31 Dec 2018 31 Dec 2017 restated		31 Dec 2016
	CHF m	%	CHF m	%	CHF m	%
Cash and cash equivalents	230.7		107.8		25.2
Current financial assets	0.2		0.2		0.2
Trade receivables	92.3		84.0		71.4
Other receivables & prepaid expenses	24.2		22.3		14.6
Inventories	69.4		59.3		48.3
Current assets	416.7	57.4	273.5	59.2	159.6	61.0
Property, plant & equipment	34.3		29.7		26.2
Intangible assets	264.6		147.6		63.1
Other assets(2)	10.9		11.0		12.5
Non-current assets	309.8	42.6	188.3	40.8	101.9	39.0
Total assets	726.5	100.0	461.8	100.0	261.5	100.0
Current financial liabilities	3.5		10.4		50.0
Trade payables	83.1		75.3		70.7
Other payables & accrued expenses(3)	32.3		33.4		17.5
Short-term liabilities	119.0	16.4	119.1	25.8	138.2	52.8
Non-current financial liabilities	30.6		32.0		9.1
Bonds	114.1		0
Pension liabilities	13.7		13.0		8.9
Deferred taxes	5.5		3.5		1.5
Long-term liabilities	163.9	22.6	48.5	10.5	19.5	7.5
Equity	443.6	61.1	294.2	63.7	103.8	39.7
Total equity and liabilities	726.5	100.0	461.8	100.0	261.5	100.0

Zur Rose Group

Note: 1 See note 6 change in consolidation scope of the financial statements 2018 | 2 Includes investments in associates and JVs, non-current financial assets and deferred tax assets | 3 Includes other payables, tax payables, accrued expenses and short-term provisions

Zur Rose Group financials

Cash Flow Statement

	2018	2017	2016
CHF m
Net income	(39.1)	(36.3)	(12.8)
D&A	18.9	17.1	9.2
Non cash items financial result	4.7	(4.6)	2.2
Non cash income and expenses	2.0	3.6	2.8
Income taxes paid	0.6	(0.1)	(0.2)
Change in trade receivables, other receivables and prepaid expenses	(12.2)	(13.1)	(4.9)
Change in inventories	(10.3)	1.0	(13.8)
Change in trade payables	4.1	6.4	3.7
Change in provisions	(1.8)	3.8	(0.1)
Cash flow from operating activities	(33.2)	(22.2)	(13.8)
Acquisition of subsidiaries, net of cash acquired	(108.6)	(40.9)	(2.2)
Purchase of property, plant and equipment	(10.3)	(5.1)	(3.0)
Acquisition of intangible assets	(21.2)	(16.6)	(16.9)
Investments/ (disposal) of financial assets	(0.2)	0.3	(1.0)
Cash flow from investing activities	(140.3)	(62.2)	(23.1)
Proceeds from capital increases	191.1	222.4	42.8
Increase in financial liabilities	114.1	0.0	0.0
Repayment of financial liabilities	(1.8)	(56.1)	(3.9)
Purchase of treasury shares	(6.4)	(0.4)	(0.2)
Dividends paid	-	-	(1.6)
Cash flow from financing activities	297.1	165.9	37.0
Total cash flow	123.6	81.5	0.1
Fx differences Zur Rose Group	(0.6)	1.1	0.0

Disclaimer

This presentation (the "Presentation") has been prepared by Zur Rose Group AG ("Zur Rose" and together with its subsidiaries, "we", "us" or the "Group") solely for informational purposes and has not been independently verified and no representation or warranty, express or implied, is made or given by or on behalf of any of the Group. Zur Rose reserves the right to amend or replace the Presentation at any time, and undertakes no obligation to provide the recipients with access to any additional information. Zur Rose shall not be obligated to update or correct the information set forth in the Presentation or to provide any additional information. Nothing in this Presentation is, or should be relied upon as, a promise or representation as to the future. Certain statements in this Presentation are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, but not limited to, future global economic conditions, changed market conditions, intense competition in the markets in which the Group operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting the Group's markets, and other factors beyond the control of the Group). Neither Zur Rose nor any of its respective directors, officers, employees, advisors, or any other person is under any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak of the date of this Presentation. Statements contained in this Presentation regarding past trends or events should not be taken as a representation that such trends or events will continue in the future.

This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation or inducement to subscribe for, underwrite or otherwise acquire, any securities of Zur Rose, nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Group, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This Presentation is not a prospectus and is being made available to you solely for your information and background and is not to be used as a basis for an investment decision in securities of Zur Rose or the Group.