Zur Rose Group AG

Earnings Release • Aug 18, 2022

ZurRose
Group

18 August 2022

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Agenda

• Business update 1.
• Break-even programme $2.$
• Financial update 3.
• 1. Outlook
• 1. Q&A

Business update

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in local currency | ²vs. 2nd half-year 2021 | ³as of 30 June 2022

Milestone achieved: new distribution center Heerlen live

• Successful go live accomplished $\overline{\phantom{a}}$
• Strategic milestone and precondition for brand $\frac{1}{2}$ integrations
• Capacity increase from 12m to 27m parcels per year
• Unique infrastructure with highly efficient and secured processes to fulfill eRx demand
• Improvement of logistic costs per parcel of >30%
• Expected cost reductions of CHF 10m per year H, with savings already in 2022

Integration of medpex brand to Heerlen started

• Operational integration of medpex volume into new distribution center Heerlen
• Closure of Stifts-Apotheke (medpex) in Ludwigshafen by owner $\equiv$ end of October 2022 - about 350 employees concerned
• Location Ludwigshafen will continue and operate as logistic hub $\qquad \qquad \longleftarrow$ for non-pharmaceuticals with a capacity of 7m parcels per year
• Job offer to about 200 logistics and pharmaceutical employees 4 by Zur Rose Group in Ludwigshafen and Heerlen
• At the Zur Rose Group company Vision runner GmbH, a service $\equiv$ provider for Stifts-Apotheke, 36 jobs will be reduced
• Leverage of synergies and reduction of complexity is expected to $\qquad \qquad =$ lead to positive EBITDA impact of CHF 8m per year

Germany-wide eRx roll out starts on 1 September 2022

• 154,273 eRx redeemed from telematic infrastructure whereas our share is about 3x times higher than pRx
• eRx test phase will end successfully on 31 August 2022
• All stakeholders committed and success criteria for mandatory roll out in regions Schleswig-Holstein and Westphalia-Lippe agreed
• Several redemption channels for eRx: $\equiv$
• gematik app, paper printout and scan of token in place
• eGK, sms, e-mail, third party apps under examination
• Patient will choose channel with best services and highest convenience

Source: 1https://www.gematik.de/anwendungen/e-rezept/faq/einfuehrung | ²Subject to successful completion of prior phase and approval of gematik shareholders | ³This refers to 25 per cent of the e-prescriptions in relat total number of dispensed prescriptions for prescription drugs at the expense of the statutory health insurance in relation to drugs in the respective K(Z)V region per sector (medical/dental) submitted for billing. The col based on the period of the last billing run.

H1 results 2022

Business update

¹https://www.bundesgesundheitsministerium.de/themen/krankenversicherung/zahlen-und-fakten-zur-krankenversicherung/finanzergebnisse.html | ²gematik 2022 | ³Kantarstudie and YouGov BrandIndex 2022 (aided) | ⁴wissenschaftliches Institut der AOK 2020 | ⁵Sveriges Apoteksforening: swedish pharmacy sector report 2021 | ⁶DE 2020,WIdO | ⁷BMG 2022

Break-even programme

Break-even programme

EBITDA break-even 2023

$2017 - 2021$	$2022 - 2023$ $2024+$
$\langle$ Growth $\rangle$	«Break even»	«Profitable growth»
Growth of revenue and active customer base	Accelerated break-even programme	Profitable eRx growth
Investments in best talents, technology, eRx readiness and internationalisation	- Reduction of complexity Operational excellence $\overline{\phantom{0}}$ - Focus on core businesses and markets	Expansion of digital health ecosystem
Revenue CAGR 20%	EBITDA break-even 2023	Profitable double digit growth and positive free cash flow

Accelerated break-even programme with expected positive EBITDA impact of CHF 130m vs. EBITDA 2021 by 2023

• Accelerated execution is expected to lead to EBITDA break-even in 2023
• Realisation of full year effects in 2023 requires immediate implementation of measures with midsingle digit percent negative revenue effect in 2022
• Programme includes significant reduction of OTC marketing spend and reallocation to eRx
• EBITDA break-even independent on eRx scaling $\overline{\phantom{m}}$

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¹Refers to cash flow pre financing activities (figures rounded)

Financial update

Half year revenue development in line with guidance

Group

• Flat revenue development in line with communicated guidance

Switzerland

• Accelerated growth driven by B2B activities

Germany

• Declining pRx business ahead of eRx launch
• Efficiency of OTC-marketing and continued trends in online market

Europe

• Slow down due to focus on earnings

Notes: ¹in local currency | ²including eliminations of CHF 3.6m for H1 2021 and CHF 3.8m for H1 2022 | ³consolidated revenue of the Zur Rose Group in CHF m plus the mail order revenue of pharmacies supplied by the Zur Rose Group less the consolidated revenue for their supply

Notes: Figures reflecting the B2C & marketplace business regardless of integration and consolidation progress of the acquired businesses with Apotal included in active customer numbers | ¹all mail order customers who have placed an order with Zur Rose or a pharmacy supplied by Zur Rose in the last 12 months | ²share of orders from existing customers in relation to total number of orders | ³number of website visits in the last 12 months | ⁴basket size equals average value of the purchase per order | ⁵number of orders per active customer in 12 months period

Financial update

Break-even programme on track - delivering first results

Significant improvement vs. H2 2021

in CHF m	H1 2022	Margin in $%$	H 2 2021	Margin in $%$	H1 2021	Margin in $%$
External revenue	963.9		1036.0		998.0
Consolidated revenue	824.0		886.7		839.8
Gross profit adj.	121.6	14.8	126.1	14.2	136.9	16.3
Personnel expenses adj.	(77.4)	(9.4)	(69.9)	(7.9)	(73.2)	(8.7)
Marketing expenses	(38.0)	(4.6)	(69.4)	(7.8)	(49.4)	(5.9)
Distribution expenses	(24.6)	(3.0)	(26.1)	(2.9)	(28.4)	(3.4)
Other operating income & expenses adj.	(30.8)	(3.7)	(46.7)	(5.3)	(28.8)	(3.4)
Adj. EBITDA	(49.2)	(6.0)	(86.0)	(9.7)	(42.9)	(5.1)
Adjustments	6.1		(6.9)		(6.8)
EBITDA	(43.1)	(5.2)	(92.9)	(10.5)	(49.7)	(5.9)
EBIT	(69.5)	(8.4)	(120.7)	(13.6)	(73.1)	(8.7)
Net income	(86.1)	(10.4)	(148.6)	(16.8)	(77.0)	(9.2)

• Gross margin increase by 0.6ppt $\sim$ compared do previous period
• Insourcing of specific functions $\longrightarrow$ started with impact on personnel and other operating expenses
• Marketing expenses include TV $\frac{1}{2}$ campaign in Q1 2022
• Slight decline of depreciation & $\sim$ amortization
• Net financial result impacted by foreign currency (CHF-EUR)

Update on EBITDA adjustments

H1 2021

EBITDA adjustments Adj. EBITDA in CHF m Other Integration M&A $(42.9)$ $0.7$ $1.2$ $(49.7)$ $5.0$

• Share based retention package for founders as largest position within adjustments

• Apo-rot integration

• M&A: mainly driven by earnout valuation related to share price decrease

• medpex brand integration started

Zur Rose Group

Balance sheet

in CHF m	30 June 2022	$\frac{0}{0}$	31 Dec 2021	$\frac{0}{6}$
Cash and cash equivalents	199.2		277.7
Receivables	162.5		166.5
Inventories	70.4		92.5
Property, plant & equipment	96.4		98.7
Intangible assets	580.8		595.4
Other assets	34.5		38.4
Total assets	1143.8		1269.2
Financial liabilities	67.1		83.8
Payables & accrued expenses	183.7		196.1
Bonds	486.2		485.4
Other liabilities	7.7		19.0
Equity	399.1	34.9	484.9	38.2
Total equity and liabilities	1143.8		1269.2

• Highly attractive, asset-light business $\overline{\phantom{m}}$ model
• CHF 199.2m of cash on balance sheet $\overline{\phantom{m}}$
• CHF 13.6m reduction of net working $\overline{\phantom{m}}$ capital mainly due to reduction of inventories

Outlook

EBITDA guidance confirmed despite reduced revenue

External revenue 2022 in local currency	mid-single digit decline (due to focus on earlier EBITDA break-even) Previously: flat development
Revenue OTC DocMorris 2022	positive growth (due to focus on earlier EBITDA break-even) Previously: double-digit revenue growth
adj. EBITDA 2022	CHF-75m to CHF-95m (unchanged) Previously: CHF-75m to CHF-95m
adj. EBITDA break-even	FY 2023 Previously: FY 2024
adj. EBITDA margin mid-term	8% (unchanged) Previously: 8%

• Key priority EBITDA break-even in 2023

• No additional cash needed for operational business

• Digitalisation of EUR 50bn Rx market takes off

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.