Medios AG

Quarterly Report • Nov 14, 2023

Quarterly Statement as of September 30, 2023

Medios records strongest quarter in the Company's history

Financials Q3 2023 vs. Q3 2022:

• Revenue increases by 16.9% to €489.9 million
• EBITDA pre increases by 12.7% to €17.2 million
• Forecast for the full year 2023 specified

Medios, the leading provider of Specialty Pharma Solutions in Germany, once again generated significant growth in the first nine months of 2023 following a strong third quarter. Revenue increased by 10.9% to €1,343.5 million (previous year: €1,211.4 million) compared to the same period of the previous year. EBITDA pre improved by 5.7% to €46.3 million (previous year: €43.8 million). In the Pharmaceutical Supply segment, external revenue increased by 11.8% to €1,168.0 million (previous year: €1,044.4 million); €33.5 million of this was attributable to the newly acquired Blisterzentrum Baden-Württemberg GmbH (bbw). In the Patient-specific Therapies segment, external revenue increased by 5.0% compared to the same period of the previous year to €175.0 million (previous year: €166.6 million).

In the third quarter of 2023, Medios increased its revenue by 16.9% to €489.9 million; EBITDA pre increased by 12.7% to €17.2 million in the same period. As a result of the sale of inventories strategically built up in the first half of the year, cash flow from operating activities amounted to €86.0 million in the period from July to September 2023 (previous year: €7.9 million). This makes the third quarter the strongest in Medios' history.

Significant events and developments in the reporting period

Successful completion of the acquisition of bbw

On January 10, 2023, Medios successfully completed the acquisition of the pharmaceutical compounding company Blisterzentrum Baden-Württemberg GmbH (bbw). As a result, bbw was incorporated into the scope of consolidation of Medios AG as a wholly owned subsidiary. The collaboration with Apotheken für Spezialversorgungen OHG (AfS) in the area of sterile compounding, which was agreed at the same time as the acquisition, also began in January 2023. As part of this, approx. 70,000 preparations for various indications are to be transferred to Medios' production facilities each year in 2023 and 2024.

Supervisory Board extends contract with CFO Falk Neukirch

On May 31, 2023, the Supervisory Board resolved to extend the existing contract of Falk Neukirch as Chief Financial Officer of Medios AG until April 30, 2026. Falk Neukirch has already been appointed as Chief Financial Officer of Medios AG since October 01, 2021.

Medios AG centralizes blister business at one site and sells Kölsche Blister GmbH

Medios AG had signed an agreement to sell all its shares in Kölsche Blister GmbH on June 15, 2023. Following the acquisition of Blisterzentrum Baden-Württemberg GmbH in January, Medios AG will centralize their blister business entirely at the bbw site in Magstadt, Baden-Württemberg in the future. The sale had no material effect on Medios' earnings, financial position, or net assets. Sales of Kölsche Blister GmbH amounted to around €12.6m in the 2022 financial year.

Annual General Meeting re-elects Dr. Yann Samson, Joachim Messner and Klaus J. Buß to the Supervisory Board

Medios successfully held its Annual General Meeting as an attendance event on June 21, 2023. With one exception, the shareholders approved the resolutions proposed by the Executive Board and Supervisory Board at the Annual General Meeting by a large majority. The new Authorized Capital 2023 proposed jointly by the Executive Board and Supervisory Board, however, was not approved. In total, around 74% of the capital stock voted.

Further progress in strategy implementation

As part of its extended growth strategy, Medios specifically aims to geographically expand the compounding of patient-specific therapies in the Specialty Pharma segment into other European countries. For this purpose, Medios has further specified the list of potential European M&A targets and continues to hold discussions with selected companies that are among the top 3 players in their local markets and have an attractive regulatory environment.

In addition, Medios is in discussions regarding potential strategic partnerships in the area of personalized therapies.

In the German market, Medios has expanded its product and customer portfolio by offering parenteral nutrition for prematurely born babies nationwide since the beginning of 2023.

ESG Activities

Medios will participate in the UN Climate Ambition Accelerator Program from October 2023 to April 2024. The aim of the program is to support companies in setting ambitious climate targets in line with the Paris 1.5° target.

The materiality analysis in accordance with the CSR Directive Implementation Act ("CSR-Richtlinie-Umsetzungsgesetz"; CSR-RUG), which will form the basis for the Group's 2023 nonfinancial consolidated statement (NFCS), was confirmed in the Sustainability Committee. In addition, an initial topic screening for the materiality analysis in accordance with the Corporate Sustainability Reporting Directive (CSRD) has taken place. The process for preparing the materiality analysis in accordance with CSRD is scheduled to be completed in January 2024.

In addition, Medios is currently analyzing revenues, investments and operating expenses by taxonomy-eligible activities. First results of the analysis are expected to be included in the NFCS 2023 already.

Medios was awarded "employer of the future" in October 2023 by the business magazine DUP UNTERNEHMER and the German Innovation Institute for Sustainability and Digitalization. Medios received a similar award from Focus / DEUTSCHLAND TEST in July 2023.In addition, the German Mergers & Acquisitions Association awarded the "M&A Awards 2023 for BEST M&A DIRECTION" to Medios as part of its "M&A Summit".

Medios Group situation

Earnings

The Medios Group's revenue increased significantly in the period from January to September 2023 compared to the same period of the previous year. The Medios Group generated revenues of €1,343.5m, which corresponds to a significant increase of €132.1m or 10.9% compared to the same period of the previous year (previous year: €1,211.4m).

In the Pharmaceutical Supply segment, external revenue increased by €123.6m or 11.8% to €1,168.0m (previous year: €1,044.4m) compared to the same period of the previous year, also due to a strong third quarter. Blisterzentrum Baden-Württemberg GmbH contributed €33.5m to this increase during the reporting period. External revenue in the Patient-Specific Therapies segment grew by €8.3m or 5.0% compared

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to the prior-year period to €175.0m (previous year: €166.6m). In the Services segment, revenues increased from €0.4m to €0.5m.

In the previous year, nearly all revenues were generated solely within the Federal Republic of Germany, and approximately 750 pharmacies were delivered.

Gross profit amounted to €83.6m in the reporting period compared to €81.5m in the same period of the previous year, corresponding to an increase of €2.1m or 2.6% and a gross profit margin of 6.2% (previous year: 6.7%).

Gross profit in the Pharmaceutical Supply segment increased by €6.3m to €44.7m (previous year: €38.4m), representing a significant increase of 16.4%. The gross profit margin was 3.5%, as in the same period of the previous year. Gross profit in the Patient-Specific Therapies segment decreased by €4.3m to €38.6m (previous year: €42.9m), representing a change of –10.0%. The gross profit margin was 19.2%, compared to 21.2% in the previous year. The decrease in gross profit and gross profit margin compared to the same period of the previous year is mainly the result of regulatory price reductions (auxiliary tax deductions) for some ingredients since September 2022.

Personnel costs increased overall by €1.7m year over year to €26.1m (previous year: €24.3m), with €0.8m of this increase attributable to the acquisition of bbw. The remaining increase in personnel costs results mainly from planned wage cost increases, special performance-related payments, and the development of central functions.

Other operating expenses remained unchanged at €16.0m compared to the same period of the previous year (previous year: €16.0m)

Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA pre), adjusted for special items, increased by €2.5m or 5.7% compared to the prioryear period to €46.3m (previous year: €43.8m). The EBITDA pre margin amounted to 3.4% in the reporting period (previous year: 3.6%).

EBITDA pre in the Pharmaceutical Supply segment increased by €5.5m compared to the prior-year period to €33.7m (previous year: €28.2m). The first-time consolidation of bbw's business contributed €1.1m to this growth. EBITDA pre in the Patient-Specific Therapies segment decreased by €1.5m or 7.8% compared to the prior-year period to

€17.8m (previous year: €19.3m). The decline in EBITDA pre in the Patient-Specific Therapies segment compared to the prior-year period is mainly due to regulatory price reductions (auxiliary tax deductions) for some active ingredients since September 2022.

The Services segment generated EBITDA pre of €–5.3m mainly as a result of increased IT and personnel expenses (previous year: €–3.8m).

EBITDA pre is adjusted for special items totaling €4.8m, of which €1.1m correspond to non-cash personnel expenses for stock options (previous year: €2.1m), €0.3m (previous year: €0.6m) for other expenses resulting from M&A activities, and €3.4m (previous year: €0.0m) for one-time performance-related payments for the acquisition of compounding volumes.

Financial Position

Cash flow from operating activities amounted to €10.8m in the reporting period from January to September 2023 (previous year: €17.9m) and was negatively affected by special items especially in the first half of 2023, in particular the build-up of trading goods in anticipation of regulatory price increases. In the third quarter of 2023, cash flow from operating activities amounted to €86.0m (previous year: €7.9m), mainly due to the planned sale of trading goods of €38.6m and the increase in current liabilities of €32.9m related to the reporting date.

Cash flow from investing activities amounted to €–16.5m in the reporting period from January to September 2023 (previous year: €–85.2m). In the third quarter of 2023, there were no cash outflows or inflows from significant investments and divestments, meaning that the cash flow from investing activities remained largely unchanged compared to the first half of 2023 (€–16.3m).

Cash flow from financing activities amounted to €–3.7m in the reporting period from January to September 2023 (previous year: €–39.0m) and mainly resulted from interest paid on loan liabilities of €-1.6m and from repayments of financial liabilities arising from leases in an amount of €–1.8m. The loan liabilities of €45m that were used and outstanding in the first half of 2023 were fully repaid in the third quarter of 2023. The syndicated loan facility will thus once again be available to the Medios Group in its full amount (€75m) if required.

Net Asset position

Compared to the 2022 annual financial statements, total assets as of September 30, 2023, have increased by €49.5m to €625.4m (December 31, 2022: €576.0m), which is primarily the result of an increase in intangible assets and an increase in current assets.

The first-time consolidation of bbw resulted in a capitalized customer base of €5.9m and capitalized goodwill of €11.6m as of the reporting date. Considering scheduled amortization, intangible assets increased by €7.0m compared to year-end 2022 (December 31, 2022: €284.6m).

Compared to the end of 2022, current assets increased by €45.4m to €295.4m (December 31, 2022: €250.0m). As of the reporting date, this was mainly due to a seasonal increase in inventories of €71.0m (December 31, 2022: €50.0m) and the revenue-driven increase in trade receivables by €33.2m to €140.0m. Cash and cash equivalents have decreased by €9.4m since December 31, 2022, to €69.8m as of the reporting date.

Equity amounted to €465.5m as of September 30, 2023, which represents an increase of €17.5m compared to the end of the year 2022 (December 31, 2022: €448.0m). The equity ratio amounted to 74.4% as of September 30, 2023 (December 31, 2022: 77.8%) and has decreased by €34.0m to €116.1m (December 31, 2022: €82.1m) due to the increase in current liabilities. This development is mainly the result of an increase in trade payables of €31.9m related to the reporting date.

Medios was able to fully repay the loan liabilities of €45m drawn from the syndicated loan facility as of June 30, 2023, due to the strong operating cash flow in the third quarter of 2023.

Guidance

For the 2023 financial year, Medios AG specifies the previous revenue forecast of €1.6bn – €1.8bn and now expects consolidated revenue at the upper end of the forecast corridor of approximately €1.8bn. EBITDA pre is expected to be approximately €60m in 2023, reaching a value in the middle of the forecast corridor of €56m – €63m. As in the previous year, the special items adjusted for in the EBITDA pre forecast for 2023 include expenses for stock options and M&A activities, as well as one-time performance-related payments for the acquisition of compounding

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volumes. In the medium term, Medios aims to achieve consolidated revenue of more than €2bn and an EBITDA pre margin in the mid-single-digit range.

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Key financials (IFRS)

in thousand €	9M 2023	9M 2022	∆ in %	Q3 2023	Q3 2022	∆ in %
Revenue	1,343,458	1,211,397	10.9	489,942	419,218	16.9
Pharmaceutical Supply	1,168,005	1,044,383	11.8	433,860	361,926	19.9
Patient-Specific Therapies	174,961	166,626	5.0	56,012	57,141	-2.0
Services	492	388	26.7	70	150	-53.5
EBITDA	41,486	41,090	1.0	15,578	14,302	8.9
Margin (in % of Revenue)	3.1	3.4	-8.8	3.2	3.4	-5.9
EBITDA without extraordinary expenses*	46,254	43,759	5.7	17,247	15,304	12.7
Margin (in % of Revenue)	3.4	3.6	-5.6	3.5	3.7	-5.4
Pharmaceutical Supply	33,696	28,202	19.5	13,811	10,746	28.5
Patient-Specific Therapies	17,828	19,339	-7.8	5,309	6,093	-12.9
Services	-5,271	-3,782	39.4	-1,873	-1,535	22.0
EBIT	25,706	24,970	3.0	10,343	8,877	16.5
Margin (in % of Revenue)	1.9	2.1	-9.5	2.1	2.1	0.0
Comprehensive income after tax	16,369	15,851	3.3	7,103	5,879	20.8
Earnings per share (in €)
Undiluted	0.69	0.67	3.0	0.30	0.25	20.0
Diluted	0.69	0.66	4.5	0.30	0.25	20.0
Cash flow from operating activities	10,806	17,875	-40.0	85,975	7,944	>100.0
Investments (CAPEX)	861	3,576	-75.9	314	712
Free Cash flow (before M&A)1	9,945	14,302	-30.5	85,662	7,232
Cash flow from investment activities	-16,528	-85,150	-80.6	-178	-660	-73.0
*Extraordinary expenses	4,768	2,669	78.7	1,668	1,002	66.6
Expenses from stock options	1,099	2,063	-46.7	365	688	-46.9
Other M&A expenses	291	606	-52.0	162	314	-48.4
Performance-related expenses for the acquisition of compounding volumes	3,378	0	n/a	1,141	0	n/a
Employees as of September 30	529	514
Employees2 (average)	510	500
	09/30/23	12/31/22	∆ in %
Total assets	625,416	575,958	8.6
Equity	465,512	448,045	3.9
Equity ratio (in %)	74.4	77.8	-4.4
Key Performance Indicator (KPI): Figures used to manage the company's success

¹Calculated from cash flow from operating activities less CAPEX

2 Employees without board members, general managers, and vocational trainees Group financial interim statement as of September 30, 2023

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Revenue						∆ in %
	1,343,458	1,211,397	10.9	489,942	419,218	16.9
Change in stocks of finished
goods and work-in-progress	13	8	61.8	-13	-34	-62.7
Work performed and capitalized	0	624	-100.0	0	189	-100.0
Other income	1,066	1,184	-10.0	408	192	>100.0
Cost of materials	1,260,936	1,131,757	11.4	461,129	391,544	17.8
Personnel expenses	26,054	24,324	7.1	8,297	8,022	3.4
Other expenses	16,060	16,041	0.1	5,333	5,697	-6.4
Earnings before interest, tax,
depreciation and amortization	41,486	41,090	1.0	15,578	14,302	8.9
(EBITDA)
Depreciation and amortization	15,780	16,120	-2.1	5,235	5,425	-3.5
Earnings before interest and	25,706	24,970	3.0	10,343	8,877	16.5
taxes (EBIT)
Financial expenses	1,732	904	91.5	708	295	>100.0
Financial income	150	49	>100.0	97	13	>100.0
Financial result	-1,582	-855	85.0	-611	-282	>100.0
Consolidated earnings before	24,124	24,114	0.0	9,733	8,594	13.2
tax (EBT)
Income Tax	7,755	8,263	-6.2	2,630	2,715	-3.2
Consolidated net income after	16,369	15,851	3.3	7,103	5,879	20.8
income taxes
Consolidated comprehensive income	16,369	15,851	3.3	7,103	5,879	20.8
Undiluted earnings per share (in €)	0.69	0.67	3.0	0.30	0.25	20.0
Diluted earnings per share (in €)	0.69	0.66	4.5	0.30	0.25	20.0

Statement of comprehensive income

Consolidated balance sheet

in thousand €
Assets	09/30/2023	12/31/2022	∆ in %
Non-current assets	329,967	325,945	1.2
Intangible assets	291,530	284,562	2.5
Property, plant and equipment	22,570	24,594	-8.2
Right of use	15,137	16,024	-5.5
Financial assets	729	765	-4.6
Current assets	295,449	250,013	18.2
Inventories	71,008	50,029	41.9
Trade receivables	140,030	106,799	31.1
Other assets	11,319	10,407	8.8
Income tax receivables	3,305	3,564	-7.3
Cash and cash equivalents	69,786	79,213	-11.9
Balance sheet total	625,416	575,958	8.6
Liabilities
Equity
Subscribed capital	23,806	23,806	0.0
Capital reserves	378,293	377,194	0.3
Accumulated net income	63,414	47,045	34.8
Attributable to shareholders in the parent company	465,512	448,045	3.9
Liabilities
Non-current liabilities	43,846	45,856	-4.4
Financial liabilities	14,498	15,464	-6.3
Other accrued liabilities	4,236	4,217	0.5
Deferred tax liabilities	25,113	26,175	-4.1
Current liabilities	116,057	82,057	41.4
Other provisions	986	1,276	-22.7
Trade payables	79,660	47,769	66.8
Financial liabilities	5,656	5,769	-2.0
Income tax liabilities	17,799	16,502	7.9
Other liabilities	11,957	10,741	11.3
Total liabilities	159,904	127,913	25.0
Balance sheet total	625,416	575,958	8.6

Consolidated cash flow statement

in thousand €	9M 2023	9M 2022		Q3 2023	Q3 2022	∆ in %
Cash flow from operating activities
Consolidated net income after income taxes	16,369	15,851	3.3	7,103	5,879	20.8
Depreciation and amortization	15,780	16,120	-2.1	5,235	5,425	-3.5
Decrease/increase in provisions	-344	-277	24.0	146	-65	->100.0
Other noncash expenses	1,099	2,063	-46.7	365	688	-46.9
Increase in inventories, trade receivables and other assets not attributable to investment or financing activities	-53,491	-33,581	59.3	38,633	11,907	>100.0
Decrease/increase in trade payables and other liabilities not attributable to investment or financing activities	31,189	18,891	65.1	32,940	-16,262	->100.0
Financial result	1,582	856	84.9	611	283	>100.0
Income/losses from the disposal of assets	-14	24	->100.0	16	26	-38.0
Income tax expense	7,755	8,263	6.2	2,630	2,715	-3.2
Income tax payments	-9,120	-10,335	11.8	-1,703	-2,651	-35.8
Net cash outflow from operating	10,806	17,875	-39.5	85,975	7,944	>100.0
activities
Cash flow from investment activities
Cash outflows for investments in intangible assets	-55	-541	-89.8	-11	-99	-89.1
Cash outflows for investments in property, plant and equipment	-805	-3,035	-73.5	-303	-613	-50.6
Cash inflows from disposals of property, plant and equipment	37	9	>100.0	34	4	>100.0
Cash inflows from disposals of non current financial assets	35	92	-61.8	5	35	-85.8
Payments for additions to the scope of consolidation	-16,776	-81,724	-79.5	0	0	0
Cash outflows for additions at consolidation price	887	0	n/a	0	0	0
Interest received	150	49	>100.0	97	13	>100.0
Net cash outflow from investment activities	-16,528	-85,150	-80.6	-178	-660	-73.0

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in thousand €	9M 2023	9M 2022	∆ in %	Q3 2023	Q3 2022	∆ in %
Cash flow from financing activities
Cash outflows for issuing costs of the equity offering	0	-53	-100.0	0	0	n/a
Cash inflows from the assumption of financial liabilities	55,000	0	n/a	0	0	n/a
Cash outflows from the repayment of financial liabilities	-55,300	-35,866	54.2	-45,000	-22,550	99.6
Interest paid	-1,637	-1,116	46.6	-728	-257	>100.0
Repayments of lease liabilities	-1,768	-2,005	-11.8	-579	-612	-5.5
Net cash inflow from financing activities	-3,705	-39,040	-90.5	-46,307	-23,419	97.7
Net change in cash and cash equivalents	-9,427	-106,315	-91.1	39,490	-16,135	->100.0
Cash and cash equivalents at the beginning of the period	79,213	168,431	-53.0	30,296	78,252	-61.3
Cash and cash equivalents at the end of the period	69,786	62,116	12.4	69,786	62,116	12.4

Consolidated statement of changes in equity

	Subscribed capital	Capital reserves	Accumulated total consolidated earnings	Attributable to share holders in the parent	Equity
in thousand €				company
As of 01/01/2022	22,881	342,567	28,716	394,164	394,164
Consolidated comprehensive income 9M 2022	0	0	15,851	15,851	15,851
Share-based payments	0	2,063	0	2,063	2,063
Equity offering	924	31,794	0	32,718	32,718
Transaction costs from equity offerings	0	-37	0	-37	-37
As of 09/30/2022	23,806	376,387	44,567	444,759	444,759
As of 01/01/2023	23,806	377,194	47,045	448,045	448,045
Consolidated comprehensive income 9M 2023	0	0	16,369	16,369	16,369
Share-based payments	0	1,099	0	1,099	1,099
Equity offering	0	0	0	0	0
Transaction costs from equity offerings	0	0	0	0	0
As of 09/30/2023	23,806	378,293	63,414	465,512	465,512

This quarterly statement was published on November 14, 2023.

Contact

Claudia Nickolaus Head of Investor & Public Relations, ESG Communications Medios AG Heidestraße 9 | 10557 Berlin | Germany P +49 30 232 566 800 c.nickolaus@medios.ag www.medios.ag

Disclaimer

This notification contains forward-looking statements that are subject to certain risks and uncertainties. Future results may significantly deviate from currently expected results, specifically due to various risk factors and uncertainties such as changes in business, economic, and competitive circumstances, exchange rate fluctuations, uncertainties about legal disputes or investigations, and the availability of financial resources. Medios AG assumes no responsibility whatsoever for updating the forward-looking statements contained in this notification.