#1* ibnsinapharma Hot 16017 2 柒 ibnsinapharma * ibnsinapharma 3 Investor Presentation FY 2019 Results Egypt's Fastest Growing Pharmaceutical Distributor Hodine 16017 www.besine-pharma.com ■2nd largest pharmaceutical distributor with a market share of 21.3% ■ c.42k clients served annually through a network of 62 operational sites and a fleet of 761 vehicles ■ 5-year revenue CAGR of 31% compared to normalized market CAGR of 14%#2Disclaimer THIS DOCUMENT CONTAINS STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS" WHICH ARE NOT HISTORICAL FACTS BUT RATHER ARE STATEMENTS OF FUTURE EXPECTATIONS AND PROJECTIONS BASED ON MANAGEMENT'S VIEWS AND ASSUMPTIONS REGARDING TRENDS IN THE EGYPTIAN, MIDDLE EASTERN, EUROPEAN AND INTERNATIONAL FINANCIAL MARKETS AND REGIONAL ECONOMIES, THE POLITICAL CLIMATE IN WHICH THE COMPANY OPERATES AND OTHER FACTORS. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "ANTICIPATES," "BELIEVES," "ESTIMATES," "EXPECTS," "INTENDS," "MAY" OR "SHOULD," OR, IN EACH CASE, THE NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY OR BY DISCUSSIONS OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. FORWARD-LOOKING STATEMENTS APPEAR IN A NUMBER OF PLACES THROUGHOUT THIS DOCUMENT AND INCLUDE STATEMENTS REGARDING MANAGEMENT'S INTENTIONS, BELIEFS OR CURRENT EXPECTATIONS CONCERNING, AMONG OTHER THINGS, THE COMPANY'S RESULTS OF OPERATIONS, FINANCIAL CONDITION, LIQUIDITY, PROSPECTUS, GROWTH, STRATEGIES AND DIVIDEND POLICY AND THE DEVELOPMENT OF INDUSTRIES IN WHICH THE COMPANY OPERATES. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES, MANY OF WHICH MAY BE BEYOND THE COMPANY'S CONTROL. THEREFORE, IMPORTANT FACTORS MAY BE OF CONSEQUENCE TO THE COMPANY'S ACTUAL FUTURE RESULTS INSOFAR THAT THEY MAY DIFFER MATERIALLY FROM EXPECTATIONS. ALL FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS DOCUMENT. NEITHER THE COMPANY, THE SHAREHOLDERS NOR THE SELL-SIDE ADVISOR UNDERTAKE ANY OBLIGATION TO UPDATE, REVISE, OR STATE PUBLICLY ANY CHANGE IN FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE. ALTHOUGH THE COMPANY BELIEVES THAT THE PLANS, INTENTIONS, AND EXPECTATIONS REFLECTED IN, OR SUGGESTED BY, THE FORWARD-LOOKING STATEMENTS MADE IN THIS DOCUMENT ARE REASONABLE, THE COMPANY MAY NOT ULTIMATELY ACHIEVE SUCH PLANS, INTENTIONS, OR EXPECTATIONS. THESE CAUTIONARY STATEMENTS QUALIFY ALL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY OR ANY PERSON(S) ACTING ON ITS BEHALF. BY ACCEPTING RECEIPT OF THIS DOCUMENT, THE INVESTOR ACKNOWLEDGES ITS STRICT CONFIDENTIALITY. THIS DOCUMENT MAY NOT BE COPIED, REPRODUCED, OR DISTRIBUTED TO OTHERS AT ANY TIME WITHOUT PRIOR WRITTEN CONSENT OF THE COMPANY. ibnsinapharma 2#3Agenda ①Introduction to the Company ⑪Key Investment Highlights III Appendix IV Contact Information ibnsinapharma 3#4II Introduction to the Company The Company in numbers years Experience in pharmaceutical distribution 17+ years #1 Growing pharmaceutical distributor in Egypt 2nd Largest pharmaceutical distributor with 21.3% market share in FY19 c.42k Retail pharmacies, hospitals & wholesalers served in FY19 Over 350 Multinational & local pharmaceutical suppliers, covering over 98% of the market value 6,000+ Employees 62 Operational sites in FY19, including distribution hubs and warehouses 761 Distribution vehicles FY19 EGP 16.9 bn FY19 Gross Revenues EGP 750.2 mn FY19 EBITDA 31% Gross Revenue CAGR from 2014-2019 54% Net Profit CAGR from 2014-2019 Source: IMS Health, Company Management ibnsinapharma 4#5II Introduction to the Company Ibnsina Pharma, Egypt's fastest growing pharmaceutical distributor... Company Overview Established in 2001, Ibnsina Pharma “ISP” is the fastest growing, and 2nd largest, pharmaceutical distributor in Egypt with a market share of 21.3% Nationwide distribution network with 62 operational sites including distribution hubs and central warehouses, supported by a fleet of c.761 vehicles serving c.42k retail pharmacies, hospitals & wholesalers across Egypt Pioneer in introducing value added services for its customers including telesales, same-day-delivery and creative commercial activities, in addition to third party logistics services for its suppliers including; warehousing, transportation, data analytics, packaging and relabeling, and quarantine inspections Shareholding Structure 1 Market Share¹ 21.3% 2013 11.5% FY19 ibnsinapharma Key Suppliers Key Financial Highlights EBRD 8.7% Faisal Islamic Bank Abdel Gawad 12.6% & Family Senior novo nordisk 13.5% Mgmt & Others 5.2% NOVARTIS gsk Gross Revenue² & GPM | EGP mn, % EBITDA & Margin | EGP mn, % Abbott SERVIER ANOFI Pfizer 7.20% 7.30% 7.90% 8.62% 8.40% 8.44% 16,941 2.9% 2.9% 3.2% 4.2% 4.2% 4.2% 750 13,678 554 Mahgoub Group 13.0% AIKMA 9,818 406 PHARCO EVAPHARMA AMOUN 7,372 QUALITY CORPORATION 5,439 229 Securing Your Health 4,302 Free 122 155 Float 47.0% EIPICO GNP AstraZeneca Quality Organization Standardization ISO XTX 9001:2015 ibnsinapharma 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Certifications Net Profit & Margin | EGP mn, % ROE % Environmental Road Safety Health & Safety Internatio onal Organization ISO 1.8% 2.0% 2.0% 328 47% Standa 1.4% 263 36% ISO OHSAS 1.1% 32% 33% 0.9% 170 102 38 57 18001:2007 14001:2015 39001 2014 2015 2016 2017 2018 2019 (1) Post IPO & Capital Increase; (2) Pro forma gross revenue includes part of 3PL revenue that was stated as other income until 2016 Source: IMS Health, Company Management 27% 27% 2014 2015 2016 2017 2018 2019 5#6Strategies Timeline ... Launch: 2001-2005 Established in 2001 under the name "Ibnsina Laborex" in partnership with Pinault Printemps Redoute ("PPR”") through its subsidiary Eurapharma Operational Sites 7 12k Clients 2005 7.0% EGP 665mn Revenue IBN Laborex SINA HARMA إبن سينا لابوركس فارما In partnership with PPR KERING IBN Pharma ابن سينا فارما SINA RIGHT ON TIME Expansion Strategy: 2009-2012 Investment to add 15 distribution centers & 5 offices, and enhance efficiency through standardizing operational processes Operational Sites 27 30k Clients EGP 2.5bn Revenue 2012 10.5% 2017 EGX The Egyptian Exchange 2015 S European Bank for Reconstruction and Development البورصة المصرية ibnsinapharma Growth Strategy I. 2013-2019 Capture market share through implementing value-base differentiation strategy & launch of new revenue streams focusing on enhancing margins Operational Sites 62 c.42k Clients FY19 21.3% cfao EURAPHARMA Turnaround Strategy: 2006-2008 Management buy-out of PPR shares, name changed to “Ibnsina Pharma"; optimized cost structure & turned the Company profitable Operational Sites EGP 16.9bn Revenue Market Share 7 16k Clients EGP 1.0bn Revenue ibnsinapharma Source: IMS Health; Company Management 2008 8.8% 6#7II Introduction to the Company ...optimally expanding our distribution network to unlock value.... Distribution Network No. of Sites (Rev/Site - EGP mn) Revenue by Business Line 7 Platforms and main warehouse 47 Distribution Centers (DC) 226 268 1 Tender DC 4 3PL1 Warehouses 2 Reverse Logistics Warehouses 59 59 62 2.9% 0.4% 4.8% 10.2% 62 1 Personal Care DC ALEXANDRIA CAPEX Breakdown 12%, BEHERIA KAFREL-SHEIKH DAKAHLIA GHARA ISMAILIA NORTH SINAI CAIRO FAIYUM SUEZ BENI SUFF SOUTH SINAI ZA 23% MINYA FY2019 EGP 363.4 mn 42%SYUT SOHAG 9% New Sites ■ Vehicles ■ HQ ° 10 ° 26 13% NEW VALLEY QENA LUXOR Technology Sites Upgrades Person per square kilometer 100 1,000 259 2,590 Person per square mile 5.000 and above ASWAN 12,950 and above ibnsinapharma (1) Third Party Logistics Source: Company Management RED SEA 2018 2019 No. of Vehicles (Rev/Vehicle - EGP mn) FY2019 15.7% 66.0% 20.3 21.8 Pharmacies Whdesale Tenders Hospitals Personal Care 3PL & Other 761 656 2018 2019 No. of Employees (Rev/Emp - EGP mn) 2.2 2.6 6.4K 6.1K Number of Clients & Sites 62 59 55 51 48 44 32k 30k 28k 42k 42K 40k 2018 2019 2014 2015 2016 2017 2018 2019 7#8II Introduction to the Company ...and leveraging our network to serve our c.42k customers nationwide 25.1% 14.6% 31.6% 28.7% 42,274 Total Customers ibnsinapharma 25.7% Clients by Geography (FY2019) 14.7% 10.7% 30.8% 12.5% 35.5% 28.8% 39,503 Retail Pharmacies 41.2% 17.6% 822 Wholesale Clients ■Cairo & Canal Delta Upper Egypt Alexandria 13.5% 25.2% 43.8% 1,949 Hospital Clients 80#9*Key Investment Highlights#10III Key Investment Highlights Key Investment Highlights 1 Solid Demographic Profile A rapidly growing population coupled with a growing middle class and increasing healthcare awareness, positions Egypt as one of the most attractive consumer markets in the region 2 Attractive Industry 3 Dynamics Strong Market Share A highly defensive sector with significant room for continued growth driven by recent regulatory reforms, increasing incidence of chronic disease, and a surge in generic uptake Fastest growing & 2nd largest player in the market with nationwide geographical coverage and access to over 42k retail pharmacies, hospitals & wholesalers 4 Efficient Business 5 6 Model Operational efficiency driven by best in class supply chain processes Resilient Supply Chain Robust Financial Performance Multi-site operations with highly diversified supplier/client base, covering over 80% of the market SKUs, mitigating any supply chain disruptions and ensuring business continuity Significant top and bottom line growth on the back of recent regulatory reforms and enhanced operational efficiency 7 New Revenue Streams Expansion into higher margin diversified revenue streams to further enhance profitability 8 Experienced Management Team Highly experienced management team that has delivered strong results during challenging times, coupled with strong corporate governance practices backed by notable institutional shareholders ibnsinapharma Source: Company Management & IMS Health 10#11III Key Investment Highlights 1 ◆ Solid Demographic Profile Egypt's demographic profile makes it the region's largest consumer market Population I mn Population (mn) • Growth Rate Age Pyramid Urban Population Disposable Income | EGP bn Egypt has seen a growth in health awareness on the back of a growing middle class and rising GDP per capita and decreased government spending 60+ yrs 8% 1.8% 1.9% 1.9% 1.9% 1.7% 1.7% 43% 45-59 yrs 12% 57% 45% 102 25-44 yrs 29% 55% 101 99 97 95 93 99 15-24 yrs 17% 4,966 4,445 3,914 3,381 2,931 2,380 4-14 yrs 20% 0-4 yrs 13% 2025f 2015 2016 2017 e 2018e 2019e 2020 e 2021 e An increasingly aging, more urbanized demographic profile drives an increase in health awareness 2016 2017 e 2018e 2019e 2020e 2021 e Population CAGR I 2015-2020 Population Age 65+ as % of Total Population | 2020 Urbanization CAGR I 2015-2020 8.1% 4.0% 3.8% 2.1% 1.9% 1.7% 1.5% 1.5% 1.4% 1.4% 1.1% 1.0% STAIN C ibnsinapharma Source: BMI, WHO 5.8% 5.2% SERIN 10 3.7% 3.5% 3.5% 3.2% 2.4% ecco 0.8% 2.4% 2.2% 2.0% 1.9% 1.9% 0.7% 0.2% 11#12Pharma Sales per capita (USD) II Key Investment Highlights 2 Attractive Industry Dynamics (I/III) Low healthcare and pharmaceutical expenditure with unparalleled growth potential Health Expenditure per capita (USD) 1,200 1,000 800 600 400 Health Expenditure per capita vs GDP per capita (USD) - 2018 900 800 700 600 500 400 300 200 100 Brazil Russia Healthcare Sector Overview Healthcare Expenditure % of GDP (2018) Egyptian Household Expenditure Breakdown (2018) 6.3% South Africa Iran Malaysia 4.2% Turkey Algeria Indonesia India Philippines 0 Pakistan' Egypt 0 2,000 4,000 6,000 8,000 10,000 12,000 GDP per capita (USD) 10.6% EM Average Global Average Others, 30% Healthcare 8% F&B 43% Housing & utilities, 18% Healthcare Expenditure constitutes low contribution to the Egyptian Household Expenditure Egypt's Health Expenditure per capita unjustifiably lags emerging markets standards Pharmaceutical Sales per Capita Vs GDP per Capita 2018 Germany Pharmaceutical Sector Overview Pharmaceutical Sales per Capita (USD) 2018 322 USA 235 Avg. Egyptians pay USD4.0/EGP73- per month on pharmaceuticals products, among the lowest countries globally Pharmaceutical Egyptian Market Key Themes Among the lowest healthcare and pharmaceutical expenditure across MENA and Emerging markets UK Canada Netherlands 110 99 95 66 51 28 15 UAE Hungary Kuwait 200 Tunisia Oman, Saudi Arabia Egypt India Morogeria 10,000 20,000 40,000 50,000 60,000 30,000 GDP per capita (USD) Pharmaceutical Sales per Capita is low with potential growth on the back of projected increase in GDP per Capita Source: BMI, EIU, CAPMAS, IMS Note(1): Egyptian Pharmaceutical Sales per capita figures are extracted from IMS report ibnsinapharma Among the cheapest countries in terms of medicine cost to end user Among the lowest medicine pocket share contribution to the household expenditure 12#13II Key Investment Highlights 2 Attractive Industry Dynamics (II/III) A highly defensive sector with significant room for continued growth Total Market Size¹ | EGP bn וי Egypt's healthcare market is the fastest growing in the region driven by significant growth in the pharmaceuticals market Market Segmentation CAGR: 17% 14.5 % 92 21% 111 31.1 % 13.8 % 24% 26 74 21% 61 28 26.0 % 50k Active Pharmacies 17.1 % 44.1 2.2 k Hospitals % 75 20% 16% 51 24 13% 44 20 39 28.4 % 25.0 % 19 16 14 64 50 41 32 25 28 2013 2014 2015 2016 Retail 2017 Non Retail Market Volume Evolution | in Millions CAGR 4% 2018 2019 Average Selling Price (ASP) Evolution Cairo & Canal Delta Upper Egypt Alexandria Key Growth Drivers Drop in production awaiting price increase Y-o-y growth 10% CAGR: 15% Normalized CAGR 10% Y-o-y growth 11% Ageing & Growing Population Increase of Chronic Diseases Increasing Generic Uptake 31.7 28.6 3,172 3,490 26.0 3,186 2,670 2,891 3,035 2,849 4.4 GENERIC 72 14.5 15.3 16.5 19.3 1.3 Pricing Adjustment Waves Higher Priced Drug Replacements New Products New Markets 3,100 18.0 21.5 2013 2014 2015 2016 2017 2018 2019 2013 Normalized ASP Normalized Volume Overstock Effect 2014 2015 2016 2017 2018 2019 Price Adjustment Waves In 2016, Increase in price of medicine that cost less than EGP 30 by 20% due to increase in production costs In 2017, Retail price increase of 30-50% for over 3K SKUs ibnsinapharma 1) Non-retail market data (tenders, wholesale, private hospitals) published by IMS Health is based on the use of end-user price in calculating the value of the market. Tenders typically see significantly lower prices than those prevailing in the retail segment, while prices vary from one tender to another. Source: IMS Health, BMI, WHO, Company Management 13#14III Key Investment Highlights 2 Attractive Industry Dynamics (III/III) A highly defensive sector with significant room for continued growth Pharma Total Market Share Public Sector 3% Market Segmentation | Market Share FY2019 Novartis 8% Pharco 5% GSK 5% Sanofi 5% Amoun 4% Eipico 3% Others 42% Eva 3% Pfizer 3% Hikma 2% Marcyrl 2% Manufacturing FY2018 75 Bn Others 60% Multinational 49% Private Sector 48% Regulated Price 8% ISP 20% Distribution 83 Bn POS 12% UCP 26% Retail 111 Bn Other 69% Hospitals (2.2 k ) & Tenders 23% The distribution space is the most consolidated segment, with the 3 largest players processing 68% of the market sales 25% Industry Regulated Margins Ezaby 2% Seif 1% Roushdy 2% Misr 1% *Distributors operate on a fixed margin set out by the Ministry of Health (MOH), and is marked down from the regulated price of the SKU *In 2016 the distribution margin increased for the 1st time since the 50's from 7% to 8% on locally manufactured products. Also, the retailers margin increased from 20% to 25% Distributors Retailers *Distribution Margin worldwide is between 7 - 12%, Egypt is on the lower side. ibnsinapharma Source: IMS Health, BMI, WHO 14#15III Key Investment Highlights 3 Strong Market Share Exceptional profitable growth on the back of a solid value-based differentiation strategy 32.7% пер ISP is the fastest growing distributor in the Egyptian market 1 34.6% (+1.9%) ISP Market Share Progression 21.3% 20.5% 19.2% 2011 9.9% 19 Bn ibnsinapharma 21.3% (+11.4%) 2019 75 Bn 16.8% 15.4% 13.8% Others 43.7% 13.6% Others 32.8% (-10.9%) pharmaoverseas 11.3% (-2.3%) The distribution market has been experiencing a trend of consolidation towards larger market players, as both manufacturers and pharmacies prefer to deal with fewer number of distributors with larger capabilities and more value-add ISP has been constantly outperforming the market... Egypt Pharma Market Growth ISP Sales Growth y-o-y 42% 37% 36% 26% 26% 25% 21% 20% 23% 18% 16% 13% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 ...while increasing its profitability | Net Profit Margin % 100% increase 1.4% 1.1% 0.9% 2019 2.0% 2.0% 1.8% 2014 2015 2016 2017 2018 2019 ibnsinapharma (1) Ibnsina will report only its market share in the retail segment. as the non-retail market data published by IMS Health tends to overstate market size due to the use of the end-user price in calculating the value of the tenders market. Tenders typically see significantly lower prices than those prevailing in the retail segment, while prices vary from one tender to another. Source: IMS Health, Company Management 15#16III Key Investment Highlights 4 Efficient Business Model (I/II) Operational efficiency driven by best-in-class supply chain processes Sourcing Commercial team sources orders from 350+ suppliers while focusing on maintaining market competitiveness and managing inventory levels Monthly demand forecasting for over 9.5K SKUs *Expired inventory risk fully borne by suppliers Suppliers Ordering Delivery to platforms Distribution Value Chain Overview Processing Over 200 platform operations employees handle and dispatch inbound deliveries to distribution centers c.860 telesales agents communicate daily with c.42k clients, processing over 450k orders monthly Distribution Dynamic route optimization to enhance delivery performance A fleet of 669 vehicles handles order delivery from distribution centers to c.42k clients nationwide 1.5k warehouse staff perform order picking & packaging Over 5.5mn drops completed per annum Information Flow Demand Planning ibnsinapharma Order Preparation Product Flow Efficient supply chain utilizing advanced technology ibnsinapharma الرقاقات Mobile Racks Enhances capacity management and increases shelf space by approximately 2.5x Order Picking Error proofing tool, decreases order fix time and speeds up shelf replenishment process Fleet Tracking Sets geo-fence to support route optimization and ensure efficient product In-progress Enhancements Transportation Management System Enhances inbound shipments, collects data for route optimization, facilitates sales, collections and returns Call Center Management Data Processing Delivery to clients Field Force Mobility Solutions Ability to manage schedule, track visits, create orders, process returns, and receive customer feedback Clients PHARMACY Enterprise Asset Management Ability to manage procurement & warehousing processes, in addition to tracking maintenance for equipment & vehicles Work Flow Module Manages call scheduling and handling, utilizing a newly improved sales interface B2B Module Customer order management tool includes features such as placing & tracking orders with further integration into an online sales platform Enhances internal communication and optimizes internal approval cycles ibnsinapharma Source: Company Management delivery 16#174 Efficient Business Model (II/II) Innovative Technology Solutions Map Innovative B2B Loyalty Program enhance business relationship with all the customers and applies to all digital solutions ERPSM Financial & Operational Excellence SM CRM Marketing, Sales,& Service Excellence Business Intelligence & Analysis SM Support all business partners with real time data analysis for more business engagement All Digital systems and services are fully integrated to assure accuracy, excellence and real-time decisions ibnsinapharma Pharmacy ManagementSM IT solutions for pharmacies Mobile AppⓇ Personalized tool to enhance brand 野 loyalty and build life- long customers Online OrderingSM 24/7 sales channel with differentiated approach 17#18III Key Investment Highlights 5 Resilient Supply Chain Highly diversified supplier/client base significantly mitigating supply chain risks Diversified Geographical Presence NORTH SINAL Alexandria 14.6% Cairo & Canal 31.5% Minimal Supplier Concentration Sanofi Aventis 7% Amoun 5% Expansive SKUs Coverage Distributed by ISP 96.5% MATRUH GIZA MINYA . ASYUT CAIRO SOUTH 944 SCHAG NEW VALLEY CENA LUKOR Upper Egypt 25.2% % of Sales Novartis 4% Mina Pharm 3% Glaxo Smith Kline 3% % of Market Sales 26 Minimal operational risk 62 sites with 62 lifetime licenses Delta 28.7% Low client concentration risk due to small number of pharmacy chains in Egypt Cairo & Canal region has the highest sales contribution due to higher purchasing power Others 79% $ No FX Risk Minimal supplier concentration with the top five supplier representing less than 25% of sales Not Distributed by ISP 3.5% Product portfolio covers 85% of the SKUs available in the market, collectively representing 93% of the market sales value U NOVARTIS PHARMACEUTICALS Multiple Contracts with Key Suppliers gsk Pfizer AstraZeneca PHARCO PHARMACEUTICALS MUP Medical Union Pharmaceuticals SERVIER SEDICO ய سد " يكو SANOFI Abbott Roche MINAPHARM AIKMA Marcyrl QUALITY GNP EIPICO AMOUN EVAPHARMA Securing Your Health ibnsinapharma Source: IMS Health; Company Management No SKU Concentration (Each SKU ≤ 0.5% of sales) map 18#196 Robust Financial Performance Robust financial performance with double digit top line and bottom line growth ' ibnsinapharma FY19 Net Revenues *** FY19 Gross Profit EGP 16.6 BN Sinapharm EGP 1.4 BN FY19 EBITDA EGP 750.2 MN ▲ 24.6% y-o-y FY19 Net Profit ibnsinapharma EGP 328.8 MN ▲ 35.2% y-o-y ▲ 28.0% y-o-y Source: Company Management ibnsinapharma ▲ 25.2% y-o-y 19#20III Key Investment Highlights 6 Robust Financial Performance Robust financial performance with double digit top line and bottom line growth Gross Revenue¹ | EGP mn Gross Profit | EGP mn, % EBITDA & Margin | EGP mn, % CAGR 31% 9,818 7,372 5,439 4,302 13,678 16,941 CAGR 36% 8.6% 8.4% 8.7% 7.9% 7.2% 7.3% 1,440 569 394 307 826 1,124 CAGR 44% 3.2% 2.9% 2.9% 229 155 122 4.6% 4.2% 4.2% 750 556 406 2014 2015 2016 2017 2018 20 19 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 0.9% Net Profit & Margin | EGP mn, % CAGR 54% 1.97% 1.98% 1.8% 329 1.4% 1.1% 102 57 38 170 263 ROE % 36% 32% 33% 47% In equity from IPO proceeds Return on Fixed Assets | % 42% 27% 27% 37% 63% 89% 34% 29% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 ibnsinapharma Source: Company Management (1): Pro forma gross revenue includes part of 3PL revenue that was stated as other income until 2016 20 20#21III Key Investment Highlights 6 Robust Financial Performance Effective working capital management has been a key success factor to ISP's performance DOH 2016 2017 2018 1H 2019 9M 2019 2019 Inventory 29 days Receivables Payables CCC -2 days 83 days 114 days 34 days -11 days 83 days 128 days 34 days -8 days 35 days 83 days 94 days 125 days Supplier contracts have the option of credit terms ranging from 120-150days or a cash discount of 5-6% Net Debt to Equity Ratio Interest Coverage Ratio¹ 65% 17% -26% 2015 2016 2017 123 days 36 days 6 days 4 days 71% 4.4x 37% 3.1x 3.0x 3.0x 2.8x 93 days 124 days 36 days -1 day 89 days 124 days Facilities Breakdown | % of Authorized Limit Others CIB 12% 19% Credit Agricole 9% Bank 2018 2019 2015 2016 2017 2018 2019 Audi 5% Ahli United FY 2019 Current Ratio 6% Bank 5% QNB EGP 4.2 bn 6% United 871 1.1x 7% Bank 1.1x 1.1x 1.0x 1.0x Alex Bank 8% 5% 5% 6% 7% ENBD HSBC NBK Net Debt | EGP mn 356 163 (107) 54 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ibnsinapharma (1) Calculated as EBITDA over interest expense Source: Company Management National Bank Mashreq of Egypt 21 21#22III Key Investment Highlights 7 New Revenue Streams Expansion into high-margin diversified revenue streams to further enhance profitability Warehousing Transportation Warehousing services for suppliers which allows them to save significant CAPEX. ISP invested in 4 warehouses including a mega-warehouse, adding a capacity of 11k pallets to reach a total capacity of 19.7k pallets. The warehousing business is a key area for growth going forward. Revenue | EGP '000 Capitalizing on a growing need for specialized transportation services, ISP invested in providing high quality services to pharma manufacturers and notable FMCG brands such as Unilever. This business complements the warehousing activity. Revenue | EGP '000 21,997 15,631 8,958 10,747 4,641 6,249 2014 2015 2016 2017 2018 2019 Other 25,714 18,099 6,121 85 1,691 3,511 2014 2015 2016 2017 2018 2019 ISP offers overprinting and re-packaging of pharmaceutical products to comply with national regulations and to support manufacturers for promotional needs. This business complements the warehousing activity. Other revenue also includes exports, fleet advertising, market micro-research for manufacturers, bulk SMS, and various service-oriented business lines. 5,922 7,647 2,892 2014 Revenue | EGP '000 9,908 8,465 12,788 2015 2016 2017 2018 2019 Source: Company Management ibnsinapharma 22 22#23III Key Investment Highlights 8 > Experienced Management Team Highly experienced management team with strong track record Mahmoud Abdel Gawad Co-Founder & Co-CEO Omar Abdel Gawad Co-Founder & Co-CEO Momen Gomaa CFO Rabeea Marzouk Sales Director Mohamed Adel Operations Director Ibrahim Emam Commercial Director Mohamed Shawky IR Manager 28 years of pharmaceutical industry experience with focus on commercial operations, IT, quality assurance and administration. Prior to Ibnsina, Mahmoud held several senior-executive positions at various pharmaceutical companies in Egypt and abroad. B.S in Pharmacy from Cairo University and MBA from the Arab Academy for Science and Technology. 17 years of pharmaceutical industry experience with focus on finance, sales, marketing and human resources. Prior to becoming Co-CEO, Omar has held various positions including marketing manager, sales manager and general manager. B.A in Economics from the American University in Cairo and MBA from the Arab Academy for Science and Technology. 19 years of corporate finance and treasury experience with focus on financial management, treasury, accounting, budgeting and credit. Prior to Ibnsina, Momen spent 4 years as an accountant at the Egyptian Pharmacists Company (EPC), a local pharma distributor. B.A in Commerce from Ain Shams University. 23 years of pharmaceutical industry experience with focus on pharmaceutical sales. Rabeea has played a key role in increasing Ibnsina's market share and surpassing market growth rates over the past 6 years. B.S in Veterinary Medicine from Alexandria University and MBA from the Arab Academy for Science and Technology. 17 years of pharmaceutical industry experience with focus on operations management. Mohamed is responsible for management of all warehouses, purchasing, technical development and third-party logistics activities. B.A in Commerce from Ain Shams University and MBA from the Arab Academy for Science and Technology. 17 years of pharmaceutical industry experience with focus on commercial operations and business development. Ibrahim leads the development of strategic supplier partnerships as well as import and export activities. B.A in Commerce from Ain Shams University and MBA from the Arab Academy for Science and Technology. 14 years of experience in investor relations and corporate and family governance. Prior to joining Ibinsina Pharma, he served as Head of IR at Mezzan Holding, Kuwait and Senior Manager of IR at Egyptian Resorts Co. (ERC). B.A. in Economics and MBA from Arab Academy for Science and Technology, Certified Investor Relations from UK IR Society ibnsinapharma 23#24III Key Investment Highlights 8 Experienced Management Team Seasoned board of directors with diverse experience across various industries Mohsen Mahgoub Executive Chairman Mahmoud Abdel Gawad Executive Director *Over 40 years of experience across various industries including healthcare, FMCG, and financial services with focus on all investment activities pursued by the Company Mohsen was the co-founder of several successful businesses in Egypt including; Chipsy (later acquired by PepsiCo), Al Shorouk Hospital (later acquired by Abraaj Group), Al-Masreyin Dairy (later acquired by Citadel Capital), and Incolease - Egypt's largest leasing company. Moshen is the Chairman of the Arab International Investment Group, currently serves on the boards of Faisal Islamic Bank of Egypt and Dar El Eyoun Hospital, and has served on the boards of SAIB Bank and Incolease. 28 years of pharmaceutical industry experience with focus on commercial operations, IT, quality assurance and administration. Prior to Ibnsina, Mahmoud has held several senior-executive positions at various pharmaceutical companies in Egypt and abroad. B.S in Pharmacy from Cairo University and a MBA from the Arab Academy for Science and Technology. Omar Abdel Gawad Executive Director Lindsay Forbes Non-Executive Director Amr Abdallah Independent Director Ahmed Elnawawi Independent Director ibnsinapharma 17 years of pharmaceutical industry experience with focus on finance, sales, marketing and human resources. Prior to becoming Co-CEO, Omar has held various positions including marketing manager, sales manager and general manager. *B.A in Economics from the American University in Cairo and a MBA from the Arab Academy for Science and Technology. 41 years of experience in finance and banking across several countries. Lindsey has held several positions with EBRD, until 2017, where he managed multiple equity investments in excess of EUR 2.5bn. Prior joining EBRD in 1994, he spent 13 years with the British Linen Bank. B.A in Jurisprudence from Oxford University and a MBA from INSEAD. Extensive experience in technology and entrepreneurial investment. Mr Abdallah is on the board of several companies and is one of the founding members of Raya Holding, holding the posts of Managing Director, CFO, and finally CEO of the company. Prior to that, he served as Chief Business Officer for Vodafone Egypt. MBA from Aston Business School in Birmingham, UK. Decades-long track record of success in brand building and strategy development. Mr. Elnawawi held prominent posts at Procter & Gamble (PG) Company and Reckitt Benckiser (RB), leveraging superior consumer insight and strategic thinking at both posts. He currently serves as Director, Consumer & Market Insight, Developing Markets at RB *Global Executive MBA from Tsinghua – INSEAD, China-Singapore, Post Graduate Degree in Feasibility Studies and Project Appraisal from Cairo University and a BA in Economics from Cairo University. Source: Company Management 24#25III Key Investment Highlights 8 Experienced Management Team Seasoned board of directors with diverse experience across various industries Hany Badr Independent Director 42 years of experience in finance and banking. His experience included serving as Head of Treasury at Faisal Islamic Bank, until 2016, and Assistant General Manager at Delta Bank. B.A in Economics from Cairo University. Abdel Aziz Ali Non-Executive Director Abdel Rehim Omar Non-Executive Director Mohamed Zaki Non-Executive Director Mohamed Mahgoub Non-Executive Director *38 years of experience across various industries including healthcare, agriculture, FMCG, and financial services, where he co-founded various successful businesses including Chipsy, Al Shorouk Hospital, and Al-Masreyin Dairy. Currently serves as the Chairman of the Egyptian Agricultural Production Company. B.A in Commerce from Cairo University. Over 35 years of experience in finance and banking. Abdel Rehim has spent his entire finance career at Faisal Islamic Bank where he currently serves as General Manager. He also heads the bank's internal audit function. B.A in Finance and Commerce from Ain Shams University. *Over 10 years of experience in consulting and social services. Mohamed is currently a research analyst at the United Nations Migration Agency in Egypt. Prior to that, he was a consultant at PricewaterhouseCoopers. B.A in Business Administration from the American University in Cairo, M.S and PhD in Social Anthropology from London School of Economics (LSE). 11 years of experience across multiple industries including financial services, consulting and consumer products. Mohamed is the founder of Sky Supplies; serves on the boards of Dar El Khebrah Consultancy and Mediterranean Securities Brokerage. B.A in Marketing and International Business from Middlesex University. Ahmed Abdel Gawad Non-Executive Director 28 years of pharmaceutical industry experience with focus on pharmaceutical sales. Ahmed has held various sales positions at multinational companies including Glaxo Smith Kline and Bristol Myers Squib. B.A in Business Administration from Ain Shams University. ibnsinapharma Source: Company Management 25#26III Key Investment Highlights 8 Experienced Management Team Organizational Structure Board Committees Audit Committee Business Development Committee Remuneration Committee Investment Committee Internal Audit Manager Khaled Saleh 8 ibnsinapharma Co-CEO Mahmoud Abdel Gawad Executive Chairman Mohsen Mahgoub Board of Directors Co-CEO Omar Abdel Gawad Management Committees Executive Committee Business Review Committee IT Director Amro Khorshid Commercial Director Ibrahim Emam Operations Director Mohamed Adel CFO Mo'men Gomaa Chief Sales Officer Rabeea Marzouk HR Director Ahmed Refaat 91 51 Quality Manager Mohamed Hosny BD Manager Ahmed Elmarghani 8 Administration Director Osama Omar Source: Company Management 378 2 2,257 381 2,153 IR Manager Mohamed Shawky Marketing Manager Mostafa Salama 1 18 206 26#27Sustainability of Growth and Margin Profile#28III Sustainability of Growth and Margin Profile Sustainability of Revenue Growth A Market Volume Drives B Company Specific Volume Drivers Population Growth CAGR (19E-23E): 2.0 % 0.9 % Egyptian population is projected to grow at higher CAGR than the Global average Continuously enhancing market share in both retail and non-retail market segment Average Selling Price Drivers Constant improvement in average selling prices Supply side mechanism for price adjustment through migrating to higher price points Recovering Consumer Expenditure GDP per capita in Egypt 3.0 (USD 000's): Pick up in macro- economic standard 2014 12.6% Consumer Expenditure CAGR (19E-24E): +1.5% ISP Market Share +x% ISP Market Share Gains II Prices remain extremely low with further adjustments expected to take place Among the highest 2015 consumer emerging 14.1% 2.0 2.6 3.1 10.6 markets expected to grow % +2.3% 7.3% Average Selling Price (ASP) Evolution 4.2% 4.0% 2016 16.4% +1.6% 2016 2017 2018 2019 2017 18.0% Unjustifiably low pharmaceutical sales per capital 322 235 +2.0% 110 99 95 66 51 28 15 2018 20.0% Egyptian Pharmaceutical Market Size (Volume in mn) CAGR: 3.9% 2019 21.3% +10% 3,490 2,891 3,035 3,172 2,849 3,210 2014 2015 2016 2017 2018 2019 +5.5% 16.5 +17.0% 19.3 +34.7% 26.0 4.5 +10.0% +10.9% 28.6 31.7 1.3 15.3 21.5 18 +1.3% Average increase of 1.5% per year in market share during the last 5 years 2014 2015 2016 2017 2018 2019 Normalized ASP Price waves Effect Ibnsina Pharma Revenue (EGP mn) 3,357 4,302 5,439 CAGR: 31% 7,372 Constant double digit growth for the upcoming 5 years is achievable in light of the current market and company dynamics 9,818 13,678 16,941 2013 2014 2015 2016 2017 2018 2019 E 2020E 2021 E 2022 E 2023 E ibnsinapharma Source: EIU, Company Management 28#29III Sustainability of Growth and Margin Profile A Enhancing Profitability Economies of Scale Favorable Cost Structure ISP's CoGs is mainly the cost of medicine bought, all other operational costs are allocated to SG&A, with c.60% being fixed costs 4.6% 4.5% 4.3% 4.1% Drop in SG&A % of Sales on the back of economies of scales 2015 c. 60% 2016 2017 2018 c.60% Fixed Costs as of 2019 ☑ Well Defined Expansion Plan ISP's fixed costs shall be diluted as a result of the anticipated expansion plans through widening the distribution centers reach, thus minimizing number of drops and aggregating delivery volumes Distribution Centers Evolution +4 +3 +6 62 +7 59 +4 55 49 +8 42 38 30 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Revenue CAGR (15-19) +31% ibnsinapharma B Efficient Business Model Fully Automated Supply Chain ibnsina harma Mobile Racks Order Picking Fleet Tracking Well invested technology in supply chain enhance the operational efficiency of the business hence reflecting on the profitability margins Increased Productivity and Efficiency 226 174 150 129 113 20 16 9 10 Rev. per DC (EGP mn) 14 Rev. per vehicle (EGP mn) Seasoned management and track record of operational excellence, reflect on the productivity of ISP's employees, vehicles and sites GPM (15/19) 7.3% / 8.7% GPM CAGR (15-19) +38% EBITDA Margin (15/19) 2.9% / 4.5% EBITDA CAGR (15 - 19) +52% Source: EIU, Company Management 29#30*Appendix#31IV Appendix A significantly complex industry with high barriers to entry Inventory Management Highly complex inventory management to maintain healthy levels without over stocking or running short in a large number of branches A Variety of SKUS 9k unique drug therapies with a variety of handling requirements including fragile containers, liquids, and refrigerated products Working Capital Management Dealing with a large client base, with significant geographic disbursement, emphasizes the complexity of credit control management. Pharmaceutical distributors must aggregate client credit history to be able to minimize bad debts, which requires significant on the ground experience Ease of Operations Both manufacturers and pharmacies prefer to deal with few distributors which in return significantly reduces order processing and management costs; large distributors then redistribute to the smaller players ibnsinapharma Barriers to Entry Operational Complexity High Variability of Demand Short-notice, short-turn deliveries occur frequently and require rapid response from distributers ibnsinapharma A number of factors protect Ibnsina Pharma from new market entrants Economies of Scale A human resource based business accustomed with a large workforce leads to significant fixed costs. Additionally, the aggregation of delivery volume reduces delivery costs therefore the total cost per shop does not increase significantly with volume. Source: IMS, Bloomberg, Company Management Labor Intensive Business To become a nationwide distributor, new entrants need to recruit, train, and manage a workforce of over 5,000 personnel Time to Build Scalable Operations 8+ Years Nationwide distributors require a minimum of 50 sites and over 500 vehicles. New entrants will not be able to manage opening more than 6 branches a year Difficulty Contracting with Suppliers 350+ suppliers with rigorous contracting requirements, including quality audits, disables new entrants from obtaining credit lines Investment EGP1.5bn+ The business requires a significant amount of infrastructure to be able to cater to geographically dispersed clientele. Geographically Dispersed Client Base Over 60k outlets and locations are geographically disbursed across the Country Low Margin Business 1.6% Both developed and emerging market peers have an average net profit margin of 1.6%; reducing the attractiveness of venturing into this market space A Crowded Market Space A large number of players targeting different segments of the market (in terms of client quality and demand size) with the three largest players controlling 68% of the market 31#32IV Appendix Income Statement In EGP Gross Revenue 4Q2018 4Q2019 YOY▲ 3,995,353 4,783,860 19.7% FY2018 13,677,881 FY2019 16,941,029 YOY 23.9% Net Revenue 3,890,288 4,671,104 20.1% 13,323,674 16,600,460 24.6% Cost of Revenue (3,573,779) (4,276,757) Gross Profit Gross Profit Margin 316,509 8.14% 394,346 24.6% 8.44% Selling, General & Administrative (174,646) (200,863) (12,199,359) 1,124,315 8.44% (569,491) (15,161,005) 1,439,455 8.67% (689,229) 28.0% EBITDA 141,863 193,484 36.4% 554,824 750,226 35.2% EBITDA Margin 3.65% 3.90% 4.16% 4.52% Depreciation & Amortization (3,314) (27,795) (41,421) (86,229) EBIT EBIT Margin Financial Expenses Other Expenses 160,483 109,523 -31.8% 513,403 663,996 29.3% 3.56% (39,476) 3.55% 3.85% (89,225) (25,198) 508 (125,843) (59,360) 4.00% (252,510) (15,193) Other Income 25,327 23,112 27,657 24,590 EBT 99,202 100,084 0.9% 355,856 420,883 18.3% EBT Margin 2.55% 2.14% 2.67% 2.54% Deferred Tax (1,672) (5,166) (650) 344 Income Tax (25,600) (12,726) (92,684) (92,456) Net Profit 71,930 82,193 14.3% 262,522 328,771 25.2% Net Profit Margin 1,85% 1.76% 1.97% 1.98% EPS 0.13 0.05 0.36 0.40 ibnsinapharma Source: Company Management (1) Gross revenue includes transportation revenue 32 32#33IV Appendix Balance Sheet In EGP Property & Equipment, net Leased Assets, net Intangible Assets Projects Under Construction, net Long Term NR Deferred Tax Total Long-term Assets Inventories Trade & Notes receivable, net Supplier Advances Debtors & Other Debit Balance, net Due from Related Parties FY2018 438,419,837 FY2019 898,219,923 7,641,002 61,477,457 8,493,759 336,288,113 10,998,195 160,909,990 101,034,892 10,453,533 803,800,680 9,255,549 1,239,391,570 1,400,352,259 1,690,645,175 3,637,234,781 4,457,391,080 213,861,597 203,885,499 371,635 233,423,351 430,197,609 371,635 118,462,800 Cash & Cash Equivalent Total Current Assets Total Assets Paid-In Capital Share Premium General Reserve Legal Reserve Retained Earnings 96,618,121 5,552,323,892 6,930,491,650 6,356,124,572 8,169,883,222 180,500,000 205,000,000 277,500,000 3,079,334 277,500,000 20,506,852 216,161,432 3,079,334 33,632,966 375,257,694 Net Profit for The Year 262,522,286 Total Shareholders' Equity 960,269,904 328,770,981 1,223,240,975 Non-Current Portion of Medium-Term Loan 348,178,901 515,384,422 Non-Current Notes Payable 4,778,896 Other Non-Current Liabilities 30,359,715 26,949,470 Non-Current Portion of Obligation Under Finance Lease 34,115,016 Total Long-term Liabilities 383,317,512 576,448,908 Credit Facilities 65,086,924 Contingency Provision 70,400,142 276,910,119 80,161,571 Customers Advance Payments 5,276,517 5,874,096 Current Portion of Land Creditors Current Portion of Obligation Under Finance Lease Trade and Notes Payable Current Portion of Medium-Term Loan Income Tax 4,753,050,593 38,849,572 15,490,486 5,656,995,735 197,100,483 Creditors & Other Credit Balances 79,873,408 50,741,080 86,919,769 Total Current Liabilities 5,012,537,156 6,370,193,339 Total Liabilities & Shareholders' Equity 6,356,124,572 8,169,883,222 Source: Company Management ibnsinapharma 33 33#34harma ibnsinapharma Hotline 16017 2 www.ibnsina-pharma.com * ibnsinapharma 3 *Contact Information Hotline 16017 www.ibnsina-pharma.com ibnsinapharm#35V Contact Information Contact Information ibnsinapharma Mohamed Mahmoud Shawky Investor Relations Manager Tel.: +2010 00852771 Email: [email protected] ibnsinapharma וא. 35