Zur Rose Group AG

Investor Presentation • Aug 17, 2023

H1 results 2023

Walter Hess | Marcel Ziwica | Madhu Nutakki 17 August 2023

Today's presenters

Marcel Ziwica CFO

Agenda

1. Business update

• 1. DocMorris ecosystem
• 1. Financial update
• 1. Outlook
• 1. Q&A
• 1. Back -up

Key messages and highlights

H1 targets achieved:

• Inflection point: return to quarterly revenue growth
• EBITDA margin improves by 6.6 ppt yoy

H1 Milestones achieved:

• Swiss business sale closed with proceeds of CHF 360m
• Long-tail marketplace launched

eRx mandatory 2 as of January 2024 3

Nationwide roll out started in July 2023:

• 70% increase in redeemed eScripts since June
• Technologies, doctors and pharmacies ready

Seamless digital eRx channel

Multiple eRx redemption channels:

• NFC eGK digital solution ready for use in Q4
• eGK in local pharmacies launched on time

DocMorris eRx readiness:

• Resources, processes and capacity ready
• Marketing/communication prepared

Delighting our patients and customers with health in one click

Stakeholders are ready: "The eScript is starting"

• 1. Close to 3m eRx redeemed with c.70% increase since the eGK launch in July¹
• 1. New "Digital law" in legislative process. Cabinet approval expected 30.08.2023
  2. Mandatory eRx as of January 2024 with close monitoring
  3. Reduced level of data security by choice of the patients (e.g. Face ID for identification)
  4. German health minister Lauterbach: "It is not acceptable that we still have paper prescriptions. We need a race to catch up."³
• 1. All relevant stakeholders are (getting) ready for eRx:
  2. Doctors and pharmacies
  3. Software system providers for doctors and pharmacies
  4. Telematics infrastructure (Gematik)

KBV² information campaign to doctors: "The eScript is starting!"

¹ Increase calculated on 7 day average in the last 10 days compared to the 7 day average on June 30th | 2 KBV: National Physician Association, German: Kassenärztliche Bundesvereinigung (KBV) | 3 www.deutsche-apotheker-zeitung.de

Multiple eScript redemption channels with digital process via NFC eGK

Similar process and equal data protection standard as use of eGK in local pharmacies

• NFC-capability of eGKs and smartphones:
  • eGK Cards: about 90%
  • Smartphones: since ~2016 all Apple iPhone 6s and major Android phones
• No separate eGK PIN needed
• Close interaction with the relevant regulatory bodies and stakeholders to bring it live

1 KIM: electronic letters between healthcare providers (German: Kommunikation im Medizinwesen) | 2 eGK: electronic health insurance card (German: elektronische Gesundheitskarte)

Redemption channels are easy, convenient and digital

Agenda

• 1. Business update
• 2. DocMorris ecosystem
• 1. Financial update
• 1. Outlook
• 1. Q&A
• 1. Back -up

DocMorris ecosystem

Transformation journey to the preferred digital health destination

DocMorris ecosystem

The DocMorris app addresses barriers to medication adherence

Improved new shopping cart experience

Customer journey enhancements

• State-of-the-art design
• Cart performance <1 sec
• Real time product availability and price updates

Achieved business success

• Increase in average daily transactions by ~15%
• Notable uplift in conversion rate
• Increased average basket size

Continued improvements

• Improve self-service (e.g. returns)
• Increased customer protection against fraud

New cart / check-out

9 DocMorris Nach Begriff, Medikament oder PZN suchen			0 0 Konta Warenkorb
6 Produkte Angebote	Markenshops Themen Service	Q Online-Arzt F Rezept einlösen
Ihr Warenkorb		Bestellübersicht
Ihre Lieferung	Kostenloser Versand von DocMorns Apotheke	Summe (1 Produkt)	33,49 €
		Versandkosten	Kostenlos
Rezeptfreie Produkte		Gesamtsumme	33,49 €
Frontline Combo Spot Katze 6 St 6 St · Losung · PZN: 17885037 Einzelpreis: 33,49 €	ர் + 33,49 € 1	Gutscheincode hinzufügen (optional)	V
Versandkostenfrei		(i) Die gesamte Ersparnis aus Ihrer Bestellung beträgt 6,51 €
		Sicher zur Kasse

DocMorris ecosystem

Data science in action: improved experience learned from millions of inputs

In-house model trained on 100M+ shopping baskets and 'always on' predictions of highly relevant recommendations

| H1 results 2023

Customer impact

• Finds exact equivalent if product not available
• Finds complementary products
• Reminded to order products before running out

Business impact

• Reduction in lost sales due to limited availability
• Higher average order value with recommendations
• Increase in orders and net sales

Agenda

• 1. Business update
• 1. DocMorris ecosystem
• 3. Financial update
• 1. Outlook
• 1. Q&A
• 1. Back -up

Swift execution towards profitability with significantly reduced complexity

Gross margin increase CHF 25m

Structural synergies CHF 50m

Profitability drivers CHF >15m

Performance CHF 60m

1 Restated for continuing businesses excl. CH segment
-------------------------------------------------------------------	--

| H1 results 2023

Break-even programme led to strong EBITDA improvement

• Focus on profitable customer base and marketing efficiency
• H1 consolidated revenue declined by 6.4% yoy (-2.0% in LC, external revenues: -17.3% external revenues), in line with full-year guidance
• Return to quarter on quarter growth
• Gross margin improvement due to Medpex integration, selected price increases and procurement optimisation
• Adj. EBITDA improved strongly by CHF 34m yoy in H1

1 Restated for continuing businesses excl. CH segment

Finding a base in H1: Germany and Europe with similar developments

• Brand consolidation drives consolidated revenue and EBITDA
• Focus on profitable customers
• Streamlining of organisation
• Declining pRx business due to delayed bonus ban effect. Trough expected in Q3
• Focus on profitable customers and marketing efficiency
• Streamlining of organisation
• Strong improvement in profitability due to front-loaded break-even programme in H2 2022
• Structural optimisation, no more management fees from CH
• Significant cost reductions in H2 executed

Customer KPIs: Improving basket sizes and order frequency

1 number of website visits in the last 12 months | 2 all mail order customers who have placed an order with DocMorris or a pharmacy supplied by DocMorris in the last 12 months | 3 basket size equals average value of the purchase per order | 4 number of orders per active customer in 12 months period | 5 share of orders from existing customers in relation to total number of orders | All figures reflect the B2C & marketplace business regardless of integration and consolidation progress of the acquired businesses in Germany and are restated for continuing businesses excl. CH segment

| H1 results 2023

Operational expenses improved noticeably vs. 2022

in CHF m	H1 20221	Margin in %	H2 20221	Margin in %	H1 2023	Margin in %	Yoy %
External revenue	634.6		524.9		501.4		(21.0)
External revenue, in local currency							(17.3)
Consolidated revenue	494.6		436.3		463.0		(6.4)
Gross profit adj.	80.7	16.3	80.7	18.5	99.9	21.6	23.9
Personnel expenses adj.	(56.0)	(11.3)	(50.2)	(11.5)	(55.1)	(11.9)	(1.6)
Marketing expenses	(35.5)	(7.2)	(17.3)	(4.0)	(22.2)	(4.8)	37.5
Distribution expenses	(19.3)	(3.9)	(17.7)	(4.1)	(23.1)	(5)	(19.7)
Other operating income & expenses
adj.	(24.6)	(5.0)	(26.3)	(6.0)	(20.3)	(4.4)	(17.5)
Adj. EBITDA	(54.7)	(11.1)	(30.8)	(7.1)	(20.8)	(4.5)	62.0
Adjustments	6.1		(14.0)		(7.3)
M&A	12.0		1.9		(4.7)
Restructuring, Integration	(5.0)		(12.5)		(2.6)
Other	(0.9)		(3.4)		(0.0)
EBITDA	(48.6)	(9.8)	(44.8)	(10.3)	(28.1)	(6.1)
EBIT	(67.3)	(13.6)	(73.5)	(16.9)	(48.8)	(10.5)
Net income from cont. operations	(83.6)	(16.9)	(88.3)	(20.3)	(58.2)	(12.6)
Net income from disc. operations					199.8

• Gross margin increased by 530 bps yoy, due to integration of Medpex, discontinuation of Eurapon and price increases
• Reduction of personnel expenses limited due to insourcing of Medpex staff
• Break-even programme with positive impact on marketing, distribution and other expenses
• Net financial result improved: Bond buybacks and saving interest payments; negatively impacted by foreign currency (CHF-EUR)

Restated for continuing businesses excl. CH segment

Balance sheet: Strong equity ratio and comfortable cash position

in CHF m	31 Dec 2022	%	30 June 2023	%
Cash and cash equivalents	126.0		199.7
Current financial assets	30.4		82.4
Receivables	156.3		68.1
Inventories	83.2		43.7
Property, plant & equipment	132.0		96.9
Intangible assets	571.9		519.8
Total assets	1'099.4		1'010.5
Financial liabilities	63.9		52.0
Payables & accrued expenses	180.1		104.5
Bonds	490.4		352.6
Other liabilities	14.2		7.3
Equity	350.8	31.9	494.1	48.9
Total equity and liabilities	1'099.4		1'010.5

• Highly attractive, asset-light business model
• Received initial proceeds of ~CHF 300m on closing on May 4th for sale of Swiss segment, excluding earn-out at fair value of CHF 44.7m
• Proceeds of sale of Swiss business mainly allocated to repay outstanding bonds, generating low double-digit CHF m savings in capital and interest in H1
  • Successful tender offer for 2024 CHF 200m straight bond: repurchased CHF 109m in May
  • Repurchases of 2025 CHF 175m convertible bond: repurchased CHF 31m in Q2
• Net working capital improved by CHF 20.2m to CHF 32.2m due to seasonality and distribution site consolidation

Agenda

• 1. Business update
• 1. DocMorris ecosystem
• 1. Financial update
• 4. Outlook
• 1. Q&A
• 1. Back -up

Outlook

Inflection point in Q2: Strong increase in chronic revenue share

Indicative only | Restated for continuing businesses excl. CH segment | Horizontal columns: Length indicates duration of impact,

height indicates magnitude of impact on revenues

| H1 results 2023

-50%

• Return to growth in Q2
• Stable base in H1 to grow from profitably
• In Q2 achieved competitive quarter on quarter growth
• Largest sales decline intentionally with non-chronic customer cohorts with lower profitability
• Focus on profitable chronic patients leads to
• much faster payback
• higher marketing efficiency
• lower marketing requirements

Outlook

Guidance confirmed: Adj. EBITDA break-even in 2024 independent of eRx

External revenue1 2023 in local currency	Mid-single-digit decline confirmed	20222 : CHF 1'159
Adj. EBITDA 2023	CHF -20m to CHF -40m (excluding eRx) confirmed	20222 : CHF -85.5m
Capital expenditure 2023	CHF 30m to CHF 40m confirmed	20222 : CHF 40.4m
Adj. EBITDA 2024	Break-even (excluding eRx) confirmed
Adj. EBITDA margin mid-term	~8% confirmed

1 External revenue consists of the consolidated revenue of DocMorris plus mail order revenues of pharmacies supplied by DocMorris, less the consolidated revenue from supplying them | 2 Restated for continuing businesses excl. CH segment

Agenda

• 1. Business update
• 1. DocMorris ecosystem
• 1. Financial update
• 1. Outlook
• 5. Q&A
• 1. Back -up

Agenda

• 1. Business update
• 1. DocMorris ecosystem
• 1. Financial update
• 1. Outlook
• 1. Q&A
• 6. Back -up

EBITDA drivers for 2023: On track for guidance

Break-even programme improves marketing efficiency, distribution and structual costs

Strong gross margin improvement due to selected price increases, consolidated procurement and brand integration (especially Medpex)

Focus on overhead efficiencies and economies of scale

Focus on profitable customer base with superior products & services, leading to larger basket sizes and higher repeat order rates

	Brand integration leads to natural but limited customer churn
s d n wi d a e H	Material cost and wage inflation
	pRx: Global medication shortage and delayed effects of bonus ban

Tailwinds

Achieving mid-term guidance: Highly attractive unit economics in Germany, strong contribution margins for eRx and further improvements initiated

Unit economics	OTC		pRx		eRx		DOCM	Mid-term development
Basket size / revenue	EUR 40		EUR 100		EUR 100		-	Cross-selling
Gross margin	EUR 11	28%	EUR 18	18%	EUR 21	21%	-	product mix, buying synergies
Fulfillment / operations	EUR 6	14%	EUR 9	9%	EUR 7	7%	-	scale effects
Contribution margin after fulfillment costs	EUR 6	14%	EUR 9	9%	EUR 14	14%	-	Marketplace & ecosystem
Marketing							L-MSD%	scale effects
Indirect / Corporate							L-MSD%	scale effects
Adj. EBITDA margin							8%	Guidance

Numbers rounded to full Euros | Gross margins are as of FY22 | Operational expenses assume additional scale due to eRx with full readiness in costs now | Shows basket view, with c. 3 products in eRx as is observed today | EU segment has unit economics similar to OTC. The EU segment can be seen as part of this calculation to approximate the company mid-term guidance of an 8% adj. EBITDA margin

Financial maturity and cash flow overview

in CHF m	H1 2022	H2 2022	H1 2023
Cash start of period	277.7	199.2	126.0
Operating cash flow	(40.2)	(57.1)	(34.6)
Financing cash flow	(5.7)	44.8	(14.3)
Investing cash flow	(29.7)	(60.1)	(24.0)
Sale CH segment net proceeds			282.7
Repurchase bonds			(136.0)
Foreign currency differences	(3.0)	(0.8)	(0.1)
= Free Cash Flow	(75.6)	(72.4)	73.8
Cash end of period	199.2	126.0	199.7
in CHF m		31 Dec 2022	30 June 2023
Public Bonds		490.4	352.6

P&L restated for continuous operations and compared to previously reported numbers including divested Swiss business

in CHF m	H1 2022	H1 2022 restated1	H2 2022	H2 2022 restated1	FY 2022	FY 2022 restated1
External revenue	963.9	634.6	872.8	524.9	1'836.7	1'159.4
Consolidated revenue	824.0	494.6	784.2	436.3	1'608.2	931.0
Gross profit adj.	121.6	79.8	125.2	80.7	246.8	160.2
Personnel expenses adj.	(77.4)	(57.4)	(78.2)	(56.3)	(155.6)	(113.7)
Marketing expenses	(38.0)	(35.5)	(20.4)	(17.3)	(58.4)	(52.8)
Distribution expenses	(24.6)	(19.3)	(23.2)	(17.7)	(47.8)	(37.0)
Other operating income & expenses adj.	(30.8)	(24.6)	(31.4)	(26.3)	(62.2)	(50.9)
Adj. EBITDA	(49.2)	(55)	(20.5)	(31.0)	(69.7)	(85.5)
Adjustments	(6.1)	(6.1)	14.1	14.1	8.0	8.0
M&A	(12.0)	(12.0)	(1.9)	(1.9)	(13.9)	(13.9)
Restructuring, integration	5.1	5.1	12.4	12.4	17.5	17.5
Other	0.9	0.9	3.5	3.5	4.4	4.4
EBITDA	(43.1)	(48.6)	(34.6)	(44.8)	(77.7)	(93.4)
EBIT	(69.5)	(67.3)	(70.8)	(73.5)	(140.3)	(140.8)
Net income	(86.1)	(83.6)	(85.0)	(88.3)	(171.1)	(171.9)

1 Restated for continuing businesses excl. CH

Sustainability progress update: On track to reach 2023 goals

2023 goals	H1 progress
Healthier People • Increase number of pharmaceutical information letters1 • Increase services for chronic disease patients	• Strong increase to ~1m ytd; new letters for 10 additional indications • Additional chronic care service to go live in Q3 2023
Sustainable Planet • Reduce CO₂ emissions at our sites by 4.2% p.a. (Scope 1 & 2)	• Photovoltaic panels being installed in Ludwigshafen • EU: Health points rolled out; eco-friendly parcels • Comprehensive review of energy efficiency Heerlen; implementation of smaller parcel sizes
Caring Company • Train >95% of management in core cultural principles • Reduce gender pay gap in major regions to below 5%	• Cultural workshops scheduled for Q3/Q4 • No further statistically significant pay gap • Additional health benefits for employees planned
Reliable Partnerships • Finalise and publish Supplier Code of Conduct	• Finalisation in cooperation with peers

1 Information letters are prepared for patients who are first time users of a specific medicine or group of drugs

Financial calendar¹

1 Where dates are not shown, timings are indicative

Back-up Shareholder structure

as of 17 Aug, 2023		30 June 2023
	Shares (as per H1 financial report)	13'662'456
	Thereof own shares	1'998'062
	Thereof share lending facility1	1'900'000
	Shares outstanding	11'762'455
1.34%	Convertible Bond 20-25 (outstanding CHF 144m, conversion price CHF 142.4)	1'012'434
	Convertible Bond 22-26 (outstanding/nominal CHF 95m, conversion price CHF 49.7)	1'909'753
	Shares outstanding (diluted)	14'684'643

1 In connection with the issuance of the convertible bonds, DocMorris created a share lending facility of 1,900,000 shares to facilitate the hedging for bond holders. These cannot in any case be converted into actual share holdings and are registered as treasury shares.

| H1 results 2023

Thank you

Disclaimer

This presentation (the "Presentation") has been prepared by DocMorris AG ("DocMorris" and together with its subsidiaries, "we", "us" or "DocMorris") 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 DocMorris. DocMorris 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. DocMorris 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, forwardlooking 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 forwardlooking 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 DocMorris operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other

conditions affecting DocMorris' markets, and other factors beyond the control of DocMorris). Neither DocMorris 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 DocMorris, 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 DocMorris, 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 DocMorris.