Vistin Pharma — Investor Presentation 2021

Apr 23, 2021

Vistin Pharma – First quarter 2021 results

Kjell-Erik Nordby (CEO) Alexander Karlsen (CFO)

23 April 2021

Agenda

Highlights
Operational review
Financial review
Outlook
Appendix

First quarter 2021 results

• MNOK 70.8 in revenue vs. MNOK 61.4 in Q1 2020, a 15% increase
  • Revenue positively affected by product mix and slightly favourable EURNOK compared to last year
• MNOK 16.3 in EBITDA vs. MNOK 14.2 in Q1 2020, a 15% increase
  • EBITDA favourably affected by product mix and FX, partly offset by record high international fright costs and electricity prices in the quarter

▪ The Fikkjebakke plant has been running at full capacity

• All time high production volume in the quarter driven by full effect of the 2nd reactor installed in Q3/Q4'20
• The demand for metformin is still high and is currently not affected by the corona pandemic
• Metformin capacity expansion Project (MEP) is on track
  • First commercial batch from the 2nd production line expected in Q2 2022
  • Approximately 35% of the investment paid as of end March
• Other financials
  • Cash balance of MNOK 85 as of 31 March and no interest-bearing debt
  • Dividend proposal for the AGM (20.05.2021) NOK 0.5 per share for 2020

HIGHLIGHTS

2018-2021 Strong revenue and EBITDA development

Agenda
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Highlights
Operational review
Financial review
Outlook
Appendix

Vistin Pharma a dedicated metformin producer with a bright outlook

Metformin will remain 1st-line treatment for type 2 diabetes in the foreseeable future OPERATIONAL REVIEW - PHARMACEUTICALS

Used to lower glucose (blood sugar) levels

• Reduces the liver's production of glucose
• Delays and reduces absorption of glucose from the intestine
• Increases insulin sensitivity, leading to increased uptake of glucose in the body

Most cost-efficient treatment with limited side effects and long-term safety profile

Comes in tablet form and can be combined with insulin or other glucose-reducing medicines

• Plain metformin is standard first-line treatment (~75% of volume)
• Extended release formulations are growing and expected to cover ~35% of volume by 2026

Metformin in combination with other APIs are second- and third-line treatments, often as higher priced patent-protected fixed dose combination products (~25% of volume)

• Metformin + DDP4-inhibitors increased insulin production
• Metformin + SGLT2-inhibitors increased excretion of sugar in urine
• Metformin + DDP4 + SGLT2 launch 2018 (MSD) and 2019/2020 (BI)

Diabetes – A global emergency

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2045 49 million ↑ 55%
2030 40 million	increase
2019 32 million

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Vistin Pharma is a metformin player with a world wide sales coverage OPERATIONAL REVIEW - PHARMACEUTICALS

Record high production volume in quarter

▪ Sales volume for the first quarter was 860MT, down by 2% vs Q1 2020 (873MT)

▪ Optimization of the new second reactor in quarter resulted in all time high production with 922MT of HCl produced

Corona pandemic status

• The Fikkjebakke plant has been running at full capacity throughout the Covid-19 pandemic
  • Successful actions have been taken to secure the supply of critical raw materials and to build security stocks during the Covid-19 outbreak
  • Lack of available containers in Asia has short term significantly increased the freight costs from China and India (across all international businesses and for all goods)
• There are no reported corona infected employees in Vistin Pharma as of today
  • The company are strictly following the guideliens from the authorities and have taken active measures to reduce the risk of virus spread in the factory
• The demand in the market for metformin from Vistin is still high and is not affected by the corona epidemic
• Vistin is strategically well positioned to benefit from the expected increase in local supply demands following the pandemic

Agenda

Highlights
Operational review
Financial review
Outlook

FINANCIAL REVIEW

Key quarterly figures for Vistin Pharma

Revenue

NOK million

▪ MNOK 9 and 15% increase in revenue YoY – driven by favourable product mix and EURNOK

▪ Gross margin decrease driven by higher raw material

FINANCIAL REVIEW

Key quarterly figures for Vistin Pharma

Results (pharmaceuticals)

NOK million

▪ EBITDA of MNOK 16.3 vs MNOK 14.2 in Q1 2020, an increase of 15%

▪ EBITDA positively affected by product mix, slightly favorable EURNOK and operational efficiency improvements

▪ Record high transportation cost due to lack of containers in Asia, has negatively impacted result in quarter. Global Container Freight Index has approximately tripled last six months.

▪ Very high energy costs in the beginning of 2021 due the cold weather in Norway

▪ Depreciation of MNOK 2.9 in the quarter, compared to MNOK 2.5 in Q1'20

▪ Negative EBT in Q1'20 du to unrealized loss on EUR hedging contracts entered into in beginning of 2020.

Consolidated income statement

(NOK 1 000)	Q1 2021	Q1 2020	FY 2020
Total revenue and income
Pharmaceuticals	70 803	61 407	253 905
Energy Trading	-	-	-
HQ & other	-	-	-
Total revenue and income	70 803	61 407	253 905
EBITDA
Pharmaceuticals	16 313	14 238	58 189
Trading Energy	-	74	(190)
HQ & other	(955)	(629)	(2 822)
EBITDA	15 358	13 683	55 177
EBT
Pharmaceuticals	11 650	(1 088)	39 805
Energy Trading	-	(165 790)	(162 117)
HQ & other	(385)	(843)	(2 010)
EBT	265 11	(167 721)	(124 323)
Depreciation , amortisation and impairment	(2 872)	(2 451)	(9 623)
finance income/(expense) Net	(1 221)	(178 903)	(169 827)
Profit/(loss) before from continuing operations tax	11 265	(167 721)	(124 273)
Profit/(loss) for the period	8 787	(130 811)	(96 955)

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Balance sheet Vistin Pharm FINANCIAL REVIEW

Assets

NOK 1000

	31.03.2021	31.03.2020	31.12.2020
ASSETS
Non-current assets
Fixed assets	147 720	101 288	145 261
Deferred tax assets	32 622	643 44	35 128
Total non-current assets	180 343	145 931	180 389
Current assets
Inventory	26 555	24 498	31 788
Trade receivables	30 756	40 011	30 400
Other receivables	3 811	3 025	2 302
Cash & cash equivalents	85 010	316 792	77 036
Total current assets	146 133	384 326	141 526
Total Assets	326 475	530 257	321 915

• Increase in fixed asset balance driven by MEP
• Deferred tax asset in relation to realized loss for Energy Trading in Q1 2020
• Favourable working capital development driven by reduction in receivables, partly offset by inventory increase due to demand going forward.
• Decrease in cash balance mainly driven by settlement of oil derivative contracts in April, dividend pay-out of MNOK 44.5 in June and two payments for MEP of total MNOK 35 in 2020.

Balance sheet Vistin Pharm Equity and liabilities FINANCIAL REVIEW

NOK 1000

	31.03.2021	31.03.2020	31.12.2020
EQUITY LIABILITIES AND
Equity
Share capital	345 44	345 44	345 44
Share premium	229 056	273 401	229 056
Retained earnings	7 791	(35 162)	(996)
Total equity	281 192	282 584	272 405
Non-current liabilities
Other liablites non-current	1 141	1 344	976
Pension liabilites	16 330	16 309	16 330
Total liabilities non-current	17 471	17 653	17 306
liabilities Current
Trade payables	14 078	17 074	17 893
Derivative financial instruments	-	887	-
Other liabilities current	13 734	212 059	14 311
Total liabilities current	27 813	230 020	32 204
Total liabilities	283 45	247 673	49 509
Total Equity and Liabilities	326 475	530 257	321 915

• No interest-bearing debt, MNOK 2.4 in obligations related to lease contracts that are recognized in the balance sheet according to IFRS 16 (MNOK 2.2).
• Strong balance sheet with 86 % equity ratio

Agenda

Highlights
Operational review
Financial review
Outlook
Appendix

Outlook

Outlook

• Metformin market expected to continue to grow by 5 -6% annually
  • Diabetes is one of the largest health crises of the 21st century
  • Metformin is expected to maintain its position as the Gold Standard treatment for T2D in the foreseeable future
• Attractive growth potential from existing customer base and expansion into new markets and customer segments
• The Covid -19 situation has been an «eye opener» to both authorities and the industry leading to large pharma looking for lower risk supply chains and «short travelled medicines»
• Vistin is strategically well positioned in the geopolitically stable Europe
• Investment in a significant capacity expansion at the Fikkjebakke plant will fuel future revenue growth
  • Short/Medium initiatives to stretch the capacity to approx. 3800MT implemented
  • Investment in a new parallel production line to further increase the capacity to +/ -7000MT approved. First commercial batch from the 2nd production line is expected in Q2 2022

Agenda

Appendix
Outlook
Financial review
Operational review
Highlights

APPENDIX

Top 20 shareholders as of 31 March 2021

NAME	SHAREHOLDING	% SHARE
AS* INTERTRADE SHIPPING	12 575 000	28 4 % ,
AS* PACTUM	3 492 233	9 % 7 ,
HOLMEN SPESIALFOND	3 250 000	7 3 % ,
MP PENSJON PK	1 719 848	3 9 % ,
AS* TYCOON INDUSTRIER	784 280	1 8 % ,
AUGUST RINGVOLD AGENTUR AS	750 315	1 7 % ,
NORDNET LIVSFORSIKRING AS	689 363	1 6 % ,
STORKLEIVEN AS	615 000	1 4 % ,
MIKLA INVEST AS	600 000	1 4 % ,
LØGES IVAR STIFTELSE	600 000	1 4 % ,
LUCELLUM AS	506 524	1 1 % ,
INVEST AS WEM	500 000	1 1 % ,
SPAREBANK 1 MARKETS AS	500 000	1 1 % ,
TIGERSTADEN AS	500 000	1 1 % ,
PRESTEGÅRD TOM RAGNAR STAAVIE	490 000	1 1 % ,
CORTEX AS	464 525	1 0 % ,
SANDEN AS	416 559	0 9 % ,
BERIT HELENE DYBDAHL	409 240	0 9 % ,
HENRIK MIDTTUN HAAVIE	369 208	0 8 % ,
DYVI INVEST AS	355 500	0 8 % ,
TOTAL 20 LARGEST SHAREHOLDERS	29 587 595	66 7 % ,
OTHER SHAREHOLDERS	14 756 997	33 3 % ,
TOTAL OF SHARES NUMBER	44 344 592	100 0 % ,

* Board members of Vistin Pharma, or companies controlled by Board members

Thank you for your attention!

www.vistin.com