Garofalo Health Care

Earnings Release • Jun 8, 2021

GHC – Highlights June 2021

An entrepreneurial history that began over 60 years ago developed through organic and M&A growth projects

The 5 healthcare facilities in Rome (Casa di Cura S. Antonio da Padova, Casa di Cura Città di Roma, Aurelia Hospital, European Hospital and Samadi) are excluded from GHC perimeter

GHC Group today: a leading operator in the private accredited healthcare thanks to its business model based on geographical and sectoral diversification

Note: figures refer to 2020 including the contribution of Clinica S. Francesco acquired in April 2021

The healthcare sector in Italy: the ''3As''

Public healthcare spending not sufficient and among the lowest based on international comparison

• National Healthcare Service spending ("NHS") was €120.3bn in 2019 (6.8% of the GDP), with a moderate growth over the 2010-2019 period (CAGR 2010-2019: 0.9%)
• Italy is characterized for being a parsimonious system, with a per capita public healthcare spending and spending as % of GDP among the lowest in Europe

Public healthcare spending vs. GDP (comparison with G7)

Public healthcare spending vs. GDP (comparison with EU countries)

Secular trends of ageing population and greater incidence of chronic diseases

Chronic disease incidence

• Demographic trend shows a progressive ageing of the population. In 2030 population over 65 is estimated to be ca. 27% of the total (vs. 22% of 2016)
• Aged 65+ people represent the most demanding group in terms of healthcare services
• At the same time, Italian population aged 75+ will suffer greater incidence of chronic diseases compared to the EU average

Composition of healthcare spending in Italy

Source: OASI Report 2020 based on 2019 figures, Associazione Italiana Ospedaliera Privata ("AIOP") 2020

Hospital sector: public vs. private accredited operators

Sources: AIOP Report 2020, Italian Ministry of Healthcare Note: Figures refer to the acute care segment

(1) Index of complexity represents a sinthetic indicator of the level of complexity of the healthcare services provided. It is calculated as the average of the weights attributed to each cluster of patients (through DRG's), over the total number of admissions

M&A discipline followed by GHC Group since IPO

M&A discipline - Highlights

Diagnostic centers: Revenues >5€M Acute care facilities: Revenues >10€M

Non dilutive Op. EBITDA Margin (also in perspective)

High "cash conversion"

Flexibility to evaluate ''case by case'' opportunities

• ❑ Facility accredited with National Healthcare System
• ❑ Significant portion of private revenues
• ❑ Relevant potential synergies
• ❑ Favorable ownership structure(e.g. generational transition, etc.)
• ❑ Excellent reputation

• ❑ Localization in virtuous regions and with favorable regulatory framework

• Due Diligence process as 'cognitive moment'' of the Target

• Often the Target are family-owned businesses subject to generational turnover

Highly fragmented market subject to consolidation trends

Highly fragmented private accredited healthcare market

Source: Italian Ministry of Health 2020

(1) Annuario statistico 2020 (figures refer to 2018), Ministry of Health

Constant delivery of the Build & Buy strategy continued in 2021 with the acquisition of Clinica S. Francesco of Verona

Revenues		TARGET		Normalized EBITDA(1)	EBITDA Margin (%)		EV / EBITDA (x)
@ 2018	@ 2019		@ 2018	@ 2019	@ 2018	@ 2019	@ 2018	@ 2019
€15.0M	€15.5M	Dalla Rosa Prati February 2019 Enterprise Value: €27.8M	€3.3M	€+0.6M €3.9M	22.2%	+3.2% 25.4%	8.5x	-1.3x 7.2x
€26.2M	€26.5M	Ospedali Privati Riuniti May 2019 Enterprise Value: €50.0M	€4.0M	€+1.1M €5.1M	15.3%	+4.1% 19.4%	12.5x	-2.7x 9.8x
€19.0M	€22.0M	CMSB + BIM + CMUC July and September 2019 Enterprise Value: €51.2M	€5.2M	€+1.9M €7.1M	27.3%	+5.1% 32.4%	9.8x	-2.6x 7.2x
€2.3M	€2.3M	Aesculapio September 2019 Enterprise Value: €2.0M	€0.3M	€0.3M	14.1%	12.9%	6.5x	6.5x
-	€7.6M	XRay One - 2020 Enterprise Value: €13.6M	-	€1.8M	-	23.7%	-	7.6x
-	€32.0M	S. Francesco - 2021 Enterprise Value: €59.5M	-	€7.0M	-	22.0%	-	8.4x
	€105.9M	TOTAL M&A Enterprise Value: €204.1M		€25.3M		23.9%		8.1x

Notes:

(1) Normalized EBITDA figures exclude one-off and non-recurring components and Holding costs. "CMSB + BIM + CMUC" means Centro Medico San Biagio, Bimar and Centro Medico Università Castrense (acquired between July and September 2019)