#1Ibnsina Pharma Investor Presentation Egypt's Fastest Growing Pharmaceutical Distributor Largest pharmaceutical distributor with a market share of 23% in December 2022 ~47k clients served annually through a network of 65 operational sites and a fleet of 803 vehicles 5-year revenue CAGR of 23% compared to normalized market CAGR of 18%#2The global economy has witnessed some challenges since the beginning of this year.. ... Jan-22 Feb-22 Mar-22 41 41 37 37 35 33 33 33 33 Apr-22 May-22 79 89 68 Jun-22 National Reserves 33 Jul22 Petrol Barrel Price 105 104 108 116 110 96 85 55 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 95 85 55 81 34 Jan-22 Feb-22 Federal Effective Funds Rate 1 3.8% 4.1% 3.1% 3.1% 2.3% 2.3% The global economy has witnessed some challenges during this year specially after the Russian Ukraine War 1.6% 0.1% 0.1% 0.3% 0.3% 0.8% Mar-22 Apr-22 May-22 Jun-22 USD vs EGP Jul22 Aug-22 Sep-22 Oct-22 34 =4 15.7 15.7 18.8 18.5 18.6 18.8 18.9 19.2 19.6 Jan-22 Feb-22 Mar-22 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Egypt Inflation 6.3% 7.2% 10.1% 11.9% 13.3% 14.6% 15.6% 16.7% 18.0% 19.0% Jan-22 Feb-22 Mar-22 ibnsinapharma Apr-22 May-22 Jun-22 Ju-22 Aug-22 Sep-22 Oct-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 33 33 333 Nov-22 Dec-22 23.1 24.6 Apr-22 May-22 Egypt Interest Rates Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 29.7 24.4% 17.25% 5 21.5% 14.25% 14.25% 12.25% 2.25% 12.25% 12.25% 12.25% 9.25% 9.25% 0.25% 10.25% Nov-22 Dec-22 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 6 4 3 2 This war impacted the price of the petrol barrel spiking from USD 89 in Feb-22 to USD 110 in July- 22 and now it reached USD 81 in December 22 The federal bank raised the effective funds rate to reach 4.1% Dec-22 compared to 0.08% at the beginning of the year The Egyptian national reserves decreased to reach USD 34 Billion compared to USD 41 Billion at the beginning of the year Devaluation rounds took place in March and Nov raised the USD exchange rate from EGP 15.72 to EGP 29.7 in Nov 2022 As a result, an inflation wave impacted all sectors Inflation rate increased from 6.3% in Jan-22 to 24.4% in Dec-22 and as a controlling action the interest rate reached 17.25% 2#3however, the pharma grew in 2022 by 12.1% and expected to grow by ~15-16% in 2023 with a declining rate for the retail contribution ... Market Growth Drivers ■Retail ■Non-Retail Pharma Market Growth (Billions) 13-22 CAGR 15% Market Composition - Excluding Tender ■Retail Wholesale Private Hos. 183 159 6% 10% 6% 11% 8% 8% 142 14% 16% Q 120 111 63 92 56 74 29 41 15% 61 12% J \\ 51 28 44 84% 82% 24 78% 39 75% 20 19 14 16 83 79 86 96 64 50 25 28 32 41 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Market Volume Evolution 13-22 CAGR 3.3% -10% -1% (F) 2019 2020 2021 2022 01 3,490 3,504 3,743 3,718 2,891 3,035 3,172 3,186 2,670 2,849 Average Selling Price 13-22 CAGR 11.3% 26.0 28.6 31.7 2013 2014 2015 35% 14.5 15.3 16.5 19.3 2016 2017 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ibnsinapharma 13.1% 70 83 03 Ageing & Growing Population Increase of Chronic Diseases Increase of Generic Uptake Price Adjusting Waves Higher Priced Drug Replacements New Products Introduction Pharma Market Current Challenges As a result of the rising inflation rate and given that the market is price regulated; all pharmaceutical sector players are pressured with higher cost and squeezed margins Increasing interest & exchange rates impacted the financing expenses leading to higher debt level across all the pharma chain The wholesale sector contribution is steadily increasing from the total market. This sector is cash-based with high cash discount compared to the retail sector 02 42.7 37.74 34.2 2018 2019 2020 2021 2022(F) 3#4Income Statement Income Statement FY 2022 consolidated | FY 2022 FY 2021 Growth Description Value % Value % Value % Total Sales 22,916,899,273 100.0% 22,414,112,190 100.0% 502,787,083 2.2% Cash Discount Given Net Sales COGS Gross Profit Operating Expenses (652,404,173) (2.8%) 22,264,495,100 97.2% (20,647,700,037) (92.7%) 1,616,795,063 7.3% Provisions for clients bad debt EBITDA Total Depreciation EBIT Financial Exp. Credit interest from clients Net Financial Exp. Operating Profit Other Income Other Expense EBT (887,580,720) (4.0%) (65,529,994) (0.3%) 663,684,349 3.0% (681,279,399) (3.0%) 21,732,832,791 97.0% (20,103,313,870) (92.5%) 1,629,518,921 7.5% (829,219,895) (3.8%) (6,670,508) (0.0%) 793,628,518 3.7% 28,875,226 531,662,309 (4.2%) 2.4% 1 (544,386,167) 2.7% (12,723,858) (0.8%) (188,467,042) (0.8%) 475,217,307 2.1% (438,677,779) (2.0%) 133,256,538 0.6% (305,421,241) (1.4%) (178,087,304) (0.8%) 615,541,214 2.8% (283,892,260) (1.3%) 84,877,659 0.4% (199,014,601) (0.9%) 169,796,066 0.8% 416,526,613 1.9% 7,758,094 0.0% (2,246,546) (0.0%) 175,307,614 0.8% 9,985,630 0.0% (1,169,560) (0.0%) 425,342,683 2.0% (58,360,825) 7.0% (58,859,486) 882.4% (129,944,169) (16.4%) (10,379,738) 5.8% (140,323,907) (22.8%) (154,785,519) 54.5% 48,378,879 57.0% (106,406,640) 53.5% (246,730,547) (59.2%) (2,227,536) (22.3%) (1,076,986) 92.1% (250,035,069) (58.8%) 2 3 4 Income Tax Deferred Tax Net Profit Non-Controlling Holding EAT 170,874,350 (26,731,735) (0.1%) 22,298,471 0.1% 0.8% 172,584,866 (1,710,516) (0.0%) 0.8% (101,105,351) (0.5%) (9,840,452) (0.0%) 314,396,880 1.4% (330,948) (0.0%) 314,727,828 1.4% 74,373,616 32,138,923 (143,522,530) (1,379,568) (142,142,962) (73.6%) (326.6 %) (45.7%) 5 416.9% (45.2 %) ibnsinapharma OPEX Insights Gross profit margin was affected by Aim operating cost, that was recorded before as SG&A The OPEX increased by 7.0% since Jan 2022 although the inflation reached 24.4% in December 2022 while it was 6.3% in January 2022 The management adopted conservative plan for the annual merit increase with an average of 8% besides working on a restructuring exercise that led to increase the total employment cost by only 5.89% Devaluation raised the USD value from EGP 15.72 to reach 24.76 EGP end of December 2022 that impact most of cost elements as consumables, packing, prints, etc. while the branches' rent increase is around 10% Interest rate reached 17.25% by December 2022 while it was 9.25% in Jan 2022 led to increase in the net financial expenses 53%. 4#5ISP's strategic direction covers six main strategic pillars 1 2 3 4 5 6 柒 ibnsinapharma Sustainable Growth through Differentiation Working Capital Enhancement OPEX Optimization Digitalization Empowerment Investment Diversification Collaterals Liquidation 5#6ISPH adopts multiple Profitable growth tactics 1-Sustainable Growth through Differentiation ibnsinapharma 01 Increasing sales of imported products specially exclusively distributed by ibnsina pharma 02 Acquire and distribute more exclusive products from local suppliers 03 Focus on profitable segments and cash-based customers to shorten cash. conversion cycle 04 Expand private hospital with specialized product 6#7Importation Companies in 2022 acino Contract Manufacturing Alcon fidia PHARMA GROUP e Glenmark Boehringer Ingelheim OMRON CAMS® America Medic & Science ibnsinapharma 7#8Working Capital Optimization: 5 days decrease in CCC and 564 Mn decrease in net debt Working Capital Enhancement Working Capital Forecast CCC CCC CCC 9.4 Days 8.7 Days 3.71 Days 40 40 39 96 127 96 127 131 96 Net Debt, Net Debt to Equity Forecast 1.2x 2.6x 1.80 2021 3.05X 2.57X 3.60 3.81 3.24 H1 2022 9M 2022 2022 Factors Affecting Net Debt to Equity 1 CBE restrictions decreased discounting lines (off balance sheet) to be replaced with overdraft Dividends distribution decreased shareholders equity and increased the net debt 2 H1-2022 9m 2022 FY 2022 3 Treasury stocks purchase decreased the shareholders equity ibnsinapharma 8#9Optimizing supply chain network and working capital to improve productivity rate OPEX Optimization 01 Supply Chain Optimization 1. Consolidating current network to achieve higher efficiency 2. Wave 1 will concentrate on consolidating Cairo branches with 4 confirmed sites. This will yield savings ~7 EGP millions annually (potential growth volume) 3. Wave 2 will be Alex region with 3 sites under study then Canal branches with 1 site 4. Preparing the network to meet future sales targets while improving OPEX to sales ratio ibnsinapharma 02 $ of 1. 2. Working Capital Enhancement Receivables - Client Side Adopting new collection and payment strategies Enhancing the net debt by end of Q1 2023 Inventory Levels: 1. Improving the demand forecasting process to optimize days of inventory Payables - Suppliers Side: 1. Enhancing the payment terms with suppliers to optimize days of sales 03 Ο Productivity Improvement Organization Structure & Manpower Removing excess layers and optimizing manpower. targeted total saving of EGP 27.72 Million by Dec 2023 Digital Initiatives: o Launching our digital initiatives as Mitel, CCTV, Mobile App and Suppliers Digital Platform allowed US to expand our business operations across all branches without adding extra human resources to keep a high efficiency rate Cash Conversion Cycle Productivity Rate (Million / Head) OPEX 4.1% 4.4% 3.8% 4.0% CCC CCC CCC CCC 2 Days 4 Days 8 Days 3.7 Days 3.48 3.64 6420 6523 6410 6578 2.94 2.62 887 847 37 36 40 828 39 700 128 123 128 130 93 91 96 96 9M-2022 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 9#10Concrete digital infrastructure to support ISPH Strategy Digitalization Empowerment Internal infor INFOR ERP System: Strong & secure ERP system for a better business reporting, customer service and cost saving. The System will be fully rolled out by Q2 2023 TMS System: Specialized software for planning, executing and optimizing of shipment process Route optimization enabler and fleet tracking By end of 2023 will be applied on 800 vehicles Mitel System: Mitel Phone system enhancing the productivity of tele-sales workforce ibnsinapharma Supplier EDI ELECTING ma ENTERICHARDE Supplier Portal: • • • A digital product that provides the suppliers with different reports and analytics 24/7 Currently 300 supplier are onboard Expected EGP 14 Million net revenues in 2022 EDI System: • integration and interchange of data electronically with our suppliers through a standard process We started the piloting phase with Abbot Pharmaceutical Customer ・ Q 523 B2B Mobile App: • A digital self service channel to receive the orders from dealing pharmacies • 29,000 Active Clients • 14,000 Dealing Clients • Expected EGP 700 Million revenues in 2022 Field Force App: . Digitization the communication between the suppliers, ISP & the pharmacies • 50 supplier are onboard • EGP 40 Million targeted sales per month PharmaSyst: • First pharmacy management system (PMS) built on Al to enhance the replenishment cycle as well as getting an access to clients' live data PharmaSyst 10 10#11In order to diversify the investment, AIM is currently investing in four companies ... Investment Diversification R Ramp Logistics Ramp is a leading supply chain & third-party logistics (3PL) provider established by Ibnsina Pharma to cater for the growing demand for warehousing and transportation outsourcing. Backed by Ibnsina Pharma, Ramp brings 20 years of experience in distribution, warehousing and transportation management through a long-term relations with over 350 multinational and local pharma players in the Egyptian market. ibnsina trade "Ibnsina Trade" to capture growth opportunities in medical promotional Services, pharmaceuticals exports, non-food FMCG products distribution. Digi360 digital services Dgi360 is for those looking for continuous improvement, who want to always be ahead, Digi360 gives you advanced, tailored digital and technological solutions for your business to maintain your customers' satisfaction level and achieve the growth you aspire to. ibnsinapharma 11#12In order to diversify the investment, AIM is currently investing in four companies... Investment Diversification SHOROUK SPECIALISED HOSPITAL التخممة SWISS HOSPEL منتهي الشروق El Shorouk Hospital Unique licensed, furnished and ready-to-operate hospital in an underserved geographical location. The only 5 stars general hospital within El Shorouk (only B- & C class hospital exists ). Central location between El Shorouk, Badr,Madinty & Canal line cities serving a Population around 4.5 - 5 million. The acquisition moves Ibnsina Pharma from fixed margin to a free and lucrative margin business. NPM is esti- mated in the range of 20%-25%, when reaching full utilization. Overcoming the new regulatory requirements for building new hospitals. The acquisition included the hospital management company along with its professional team. Launching the hospital operation is expected by Q4 2022. ibnsinapharma 12#13Diversification by tapping into the high margin logistics sector through Ramp logistics ... Investment Diversification 1- Ramp Logistics A 3PL company serving three main sectors; Pharma, FMCG and e-Commerce LOGISTICS R Nationwide warehouses with 25,000 m2 A transportation and distribution fleet covering all over Egypt A high margin industry with a light asset model based on build to rent the warehouses Targeting EGP 300 Million revenues by end of 2024 Market Opportunities Warehousing Sites Pharma Pallet Positions Fleet ibnsinapharma FMCG P Clients AstraZeneca Orchidia Abbott Phamace kod Ind Roche MACRO PHARMACEUTICALS SANOFI✔ DEVART Lab TOGETHER FOR WORTHY LIFE MINAPHARM PHARMACEUTICALS e-Commerce 4 Sites Warehousing Sites 5 Sites Warehousing Sites Ө 1 Site 18k PP + 1k PP Pallet Positions 7k PP +15k PP Pallet Positions 3k PP 120 (38 Owned) Fleet Q Rent (9 Owned) Total Logistics Market Last-mile Vendors 13#14Ibnsina Trade will focus on three main areas Investment Diversification Ibnsina Trade ibnsinapharma OOOO T MEDICAL PROMOTION SERVICE 1 IST Export Non-Pharmaceutical Distribution 3 2 14#15Medical promotion service. Investment Diversification ◉ MEDICAL PROMOTION SERVICE An asset light business model Market size of EGP ~2bn ◉ Net Profit Margin of 25% Objective to acquire 30% coming 3 years Finalized a contract in Q4 2022 with Sandoz 2023 Plan is to add 4 more Suppliers TOLL MANUFACTURING Select a good portfolio of Cosmeceuticals, nutraceuticals, OTC and branded generic items Register our acquire the selected products Toll manufacturing with best deal and quality with our business partners ◉ Build a dedicated team for marketing and promotion ibnsinapharma CLIENTS SANDOZA Novartis Division جمجوم فارما Jamjoom Pharma M MEMPHIS Pharm. & Chemical Ind. SANOFI மட DulexLab NUTRITION 15#16The Export will focus on 4 main African countries Investment Diversification EXPORT There are two types of exported products: Our Products Select a product portfolio that is suitable for most of the African countries Register or acquire the selected products in Egypt Register our products in across the IST countries Short term from the local companies future our own toll mufacturimg Agencies o Sign and exclusive agreement with the Egyptian Pharma manufacturers to market their products in each country О Register the suitable products of each supplier in each country We are targeting 4 African countries, 2 of them through partnership agreements; Ghana, Kenya and the other 2 through direct assigned teams; Rwanda, Tanzania, ibnsinapharma COUNTRIES 16#17Non-pharmaceutical distribution Investment Diversification NON-PHARMACEUTICAL DISTRIBUTION Build a dedicated supply chain that is designed according to products nature and Customer need (Big branches with low cost per meter) Strengthen the current product list by acquiring new and strong suppliers in cosmetics, personal care, para pharmaceuticals, devices ... etc. We will penetrate new channels as modern trade, traditional trade, bulk, medical shops, online... etc TARGET SUPPLIERS reckitt L'ORÉAL Johnson Johnson P&G ibnsinapharma 17#18Diversification by tapping into the boosting Digital products & Services ... Investment Diversification 1- DIGI 360 Digi360 digital services A Digital Product, service & consulting company Main functions Development, support, SAS supported by sales & marketing activates softwhare as a service Main B2B Product PharmaSyst Main B2C Product VOUA&I Health cosmetics platform aiming to be the first cosmetics e-commerce with consultation in Egypt Main B2S Product PSP closing the main gap in this crucial area become the main PSP digital system for most of multinationals | Digi360 Target Customers Pharmacies Pharma Companies Suppliers iHealthhub & VOUA Customers iHealthhub & VOUA Suppliers Female Consumers M Doctors Hospitals Sanofi Roche Roche Parkville SANOFI Parkville Ibn Sina UCP ibnsinapharma Le COMPANY PHARMACEUTICALS Opella Opella Healthcare GUC GUC Penta Pharma penta Ntavis EVA Cosmetics Da NATAVIS COSMETICS Germany in Ca DKT ibnsinapharma ckt EVA Pharma Altibbi altibbi HAYAH HAYAH 18#19ISP taps into hospital business with the acquisition of El Sherouk hospital Investment Diversification Sherouk Hospital Location Cities Served ☑ Population Served * Total Investment Other Main Highlights: El-Shorouk City El-Shorouk City, Badr, Madinaty & Canal Cities 4.5 5 Million Radiology department Complete dental units ■Laser and dermatology Physical therapy department ■ Cosmetic services clinics Lab/Pharmacy ■ Blood Bank ■ Fully equipped ICU ambulance cars` 430 Million Starting Operations 31 Q4 2022 Hospital Figures 10,000 Meter Square 105 Beds 4 Operating Rooms ibnsinapharma 2 Catheter Rooms Staff Cases 170 1,944 Clinic Visits Surgeries 848 33 M 10 NICU Department Emergencies Revenue/Month 618 1mn 21 Specialized Clinics 19#20An Investment plan that covers investing in higher-margin diversified businesses, distribution business. and treasury stocks. 3- Investment Plan 295 M 120 14 160 625 M 266 186 186 M 173 Treasury Stocks Board of Directors approved the purchase of treasury shares of 10% and its cancellation Supporting stock performance and boosting investors' confidence 169 Positive impact on EPS 2021 ■Ditribution Business 2022 Treasury Stock 2023 Higher Margin Diversified Businesses ibnsinapharma 20 20#21ibnsinapharma ibnsinapharma