#1+pilulka Prepared for the purpose of the public offering of newly issued shares of Pilulka Lékárny a.s. on the START Market of the Prague Stock Exchange MARKETING COMMUNICATION lepší život Presentation for investors 29 May 2023#2LEGAL NOTICE This document has been prepared by Pilulka Lékárny a.s. with its registered office at Českomoravská 2408/1a, 190 00 Prague 9 (hereinafter referred to as "Pilulka" or the "Company") for the purpose of the public offering of the Company's newly issued shares, which takes place, inter alia, on the START market of Prague Stock Exchange, a.s. (hereinafter referred to as "SPO", "START market"). This Document does not constitute any recommendation to invest in any investment instruments. The presentation reflects information provided by the Company to the best of its knowledge and belief. This document does not contain definitive or exhaustive information about the Company or the Company's shares. Each recipient of this document and potential investor should consult his or her own legal, financial and other professional advisers as to the suitability of his or her investment before making any investment decision in respect of the Company's shares and should rely solely on the information about the Company contained in the prospectus for the Company's shares which has been approved in accordance with the Prospectus Regulation by a decision of the Czech National Bank out of 22 May 2023, ref. No.: 2023/062588/CNB/570 under file No. S-Sp-2023/00034/CNB/572, which became effective on 23 May 2023 (the "Prospectus"). Prospectus was published on the Company's website www.pilulka.cz/pro- investory/. The approval of the Prospectus by the Czech National Bank should not be construed as an endorsement of the Company's shares offered under the SPO. Prospective investors should properly read the Prospectus before making their investment decision in order to fully understand the potential risks and rewards associated with a decision to invest in the Company's shares. The information provided herein by the Company also includes, among other things, estimates and forecasts of future financial results that have been prepared by the Company's management. It should be taken into account, that statements about these estimates do not provide any assurance that these results will be achieved. Actual results to be realized by the Company may differ from these estimates. Many of these factors are beyond the Company's present knowledge, awareness and/or control and cannot be foreseen by the Company. No representation or warranty, express or implied, or liability or undertaking is or will be given by the Company or its shareholders or any of its subsidiaries, directors, officers, agents, employees, advisers, in relation to the accuracy, reliability or completeness of the contents of this document. The Company and its shareholders hereby expressly disclaim any responsibility or liability for the accuracy, errors or incompleteness of the information contained in this document. No information, statements or opinions contained in this document will form the basis of any future contractual relationship to which the Company is a party. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the Company or other securities and does not constitute an offer or sale of any shares or other securities in any jurisdiction in which such offer or sale would be unlawful without appropriate approval or registration under the securities regulations of such jurisdiction. The public offer of shares under the SPO is made exclusively on the basis of the Prospectus, which is available on the Company's website. 2 +pilulka#3CONTENT 1 TRANSACTION PARAMETERS 4 2 USE OF PROCEEDS 6 3 KEY INVESTMENT CONSIDERATIONS 4 INTRODUCTION OF THE COMPANY 5 OVERVIEW OF FINANCIAL INFORMATION 7 9 19 6 COMPARISON OF PILULKA WITH SIMILAR TRADED COMPANIES 23 + 7 ABSTRACT FROM RESEARCH REPORT 8 WHERE TO BUY PILULKA'S SHARES 24 25 3 +pilulka#41.1 SECONDARY PUBLIC OFFERING OF PILULKA'S SHARES Date of the SPO 8.6.-22.6.2023 ISIN: CZ0009009874 Bloomberg: PINK CP Equity Thomson Reuters: PINK.PR START + Number of offer shares: up to 500,000 + + Price range: CZK 450-550 per share Expected market cap of the Company (100%): CZK 1,359m-1,662m (1) + Size of 1 lot: 10 shares (2) As part of the SPO, which takes place in the form of a public offering through the START Market of the Prague Stock Exchange, the Company offers for subscription new shares of an indicative volume of up to 500,000 (the total number of shares before the SPO is 2,520,934). The SPO does not include the sale of existing shares in the Company by current shareholders Further information on the SPO is provided in the Company's Prospectus for equity securities, which has been approved by the Czech National Bank and published on Pilulka's websites. Investors are also provided with a research report prepared by an authorized analyst Petr and Martin Kasa, the founders and key managers of the Company, will continue to manage and develop Pilulka. They will continue to be Pilulka's largest shareholders even after the SPO The funds raised from the subscription of offer shares (in an indicative amount of CZK 225m-275m(3), before transaction costs) will be used to further develop the Company, specifically to strengthen the Company's activities on foreign markets (mainly in Austria and Hungary), to further develop own e-health solutions, to strengthen the working capital and for potential acquisitions in the Czech Republic and abroad Pilulka is seeking a prospective listing of its shares on the regulated market of the Prague Stock Exchange. Following its gradual strengthening on foreign markets, Pilulka is taking steps to make its shares attractive and available also to foreign investors - the Prospectus was prepared in English, regular reporting to shareholders is bilingual in Czech and English, the Company aims to adopt International Financial Reporting Standards (IFRS) in the future, amongst other things Note: (1) i.e., the value of 100% of the Company's shares after subscription of 500k offer shares (2) Subject to the final SPO price, it corresponds to the value of CZK 4,500-5,500 (3) Assuming subscription of 500k offer shares within the price range of CZK 450-550 4 +pilulka#51.2 INDICATIVE TRANSACTION STRUCTURE 34.80% Capital structure pre-SPO 18.64% 34.32% 12.24% Petr and Martin Kasa Founders All-Star Holding START SPO on the START Market Member of WOOD & Co. Group Marek Krajčovič Member of the Pilulka's Supervisory Board Other shareholders New investors from SPO Subscription of up to 500,000 offer shares The SPO does not include the sale of the Company's existing shares by current shareholders Petr and Martin Kasa, the founders and key managers of the Company, are ready to retain their entire existing shareholding in Pilulka and to actively participate in further successful development of the Company 16.55% 29.04% Indicative capital structure post-SPO(1) 15.56% 28.64% 10.21% Note: (1) The indicative capital structure post-SPO assumes subscription of 500k offer shares 45.2% Free-float on the START Market after completion of the SPO in the full planned volume The SPO is preceded by a two-week first phase allowing existing shareholders to subscribe for offer shares by exercising their pre-emptive rights (this subscription takes place outside of the START Market) 5 +pilulka#62 USE OF PROCEEDS 65 Market share increase on foreign markets In 2022, Pilulka entered Austria and Hungary with an ambition to become the market leader among online pharmacies and the best mobile pharmacy and drugstore on those markets. Both Austrian and Hungarian markets have great potential, which has not yet been fully harnessed by local players. Following the successful completion of the SPO, Pilulka plans to accelerate its expansion there through a less capital intensive hybrid model, which is combining the Company's current infrastructure with local commercial department and customer care. Like in the Czech Republic and Slovakia, Pilulka will introduce a distinctly customer-centric approach on these markets, and offer innovative and reliable services, including the Pilulka Express delivery service and its own network of dispensing boxes Development of e-health initiatives Pilulka is a digital platform connecting pharmaceutical companies, distributors, health insurance companies and healthcare providers with end-customers. In addition to the sale of drugs and other goods, Pilulka is creating entirely new business verticals, focused on prevention, the efficient transfer of information between health insurance companies and their clients, easy and fast search for medical care, and the development of digital tools that allow leading pharmaceutical companies to monitor the treatment of chronically ill patients. Also, within Pilulka Lab, the Company's own start-up accelerator, Pilulka aims to capture and leverage modern trends in healthcare. These and other e-health initiatives represent the future of healthcare and Pilulka will focus on developing them further Strengthening of working capital In the context of accelerated international development, Pilulka's working capital and especially inventory will need to be strengthened further. The expansion into new markets also offers new opportunities in terms of supply chain and sourcing, including central purchases on a larger scale and the strengthening of the own private label portfolio, the increased sales of which will have a direct positive impact on Pilulka's profitability Opportunistic acquisitions in the Czech Republic and abroad Ample room for the further consolidation of the Central European pharmacy market, combined with the Company's proven business model and an experienced management team, are key enablers that will allow Pilulka to continue its solid organic growth, while presenting an opportunity for inorganic growth through acquisitions and mergers with other players 6 +pilulka#73 KEY INVESTMENT CONSIDERATIONS (1/2) 1 A proven and working business model 2 3 4 Pilulka is the largest home delivery online pharmacy in the Czech Republic and Slovakia. The strict regulation of pharmacies is a natural barrier to entry for otherwise strong e-commerce players. Pilulka's business model viability has been proven on the Czech and Slovak markets, with Pilulka achieving profits on regular basis (+1.5% EBITDA margin even in the turbulent 2022) without the need to expand further and incur related capital expenditures. In addition, Pilulka has been able to grow revenues in these markets despite the significant decline in the e-commerce and the subdued consumer demand Unique starting position on expansion markets Pilulka has built the complete infrastructure necessary for the successful development of its activities in the new expansion markets in Austria and Hungary, among other things, prepared the localization of the e-shop and mobile application, invested heavily in the expansion and automation of its warehouse capacities in the Czech Republic and Slovakia (which will be used to both serve the new markets and for further local growth), strengthened its own IT infrastructure and built an experienced team in charge of international expansion. Therefore, following the successful completion of the SPO, Pilulka's activities in expansion markets aimed at revenue and market share growth can be accelerated immediately, using the infrastructure in place already Pioneer in introducing innovative approaches and technologies Pilulka is a technological company that is digitizing the conservative healthcare and pharmacy industries. The Company has adapted quickly to global trends in e-health and accelerated the development of its own e-health mobile app Plus Care, which motivates users to take ownership of their health. In collaboration with Startup Yard, it has also established its own start-up accelerator (Pilulka Lab) developing young companies bringing innovations to the healthcare sector. As part of Pilulka Lab, the Company has already invested in innovative companies Carebot (introducing Al-based X-ray images analysis) and Vitadio (a mobile app providing support to people with diabetes and improving diabetes control) Passionate founders and experienced management team The founders of Pilulka, Petr and Martin Kasa, are visionaries who successfully built one of the largest e-commerce retailers in the Czech Republic and Slovakia (kasa.cz, hej.sk) and laid the foundations for regional e-commerce. Martin Kasa is the Chairman of the Board of Directors of the Association of E-commerce, representing more than 650 of the largest e-shops in the Czech Republic. Together with other members of the experienced top management, they are keen to further develop Pilulka 7 +pilulka#85 3 KEY INVESTMENT CONSIDERATIONS (2/2) Leader in innovation with an extremely customer-centric approach 6 7 8 Pilulka is the sole player in the online pharmacy, offering its own delivery service. Pilulka Express provides express delivery of orders 60 minutes from their receipt. More than one-third of online orders in the Czech Republic and one-quarter of online orders in Slovakia are processed using this service. At the same time, Pilulka operates a network of its own Pilulka boxes, allowing the personal and unrestricted pick-up of orders at dozens of locations across the Czech Republic and Slovakia. As the first online pharmacy in Central Europe, Pilulka introduced a fully-fledged shopping app for Apple and Android OS and was the very first e-shop in the Czech Republic to implement Apple Pay on its app Emphasis on environmental protection and sustainability Pilulka places great emphasis on minimizing the environmental impact of its operations, it has started using certified recycled paper in shipment packaging recently, takes packaging material from its customers for reuse and has introduced fully electronic invoicing. The company is also gradually introducing CNG-powered vehicles into its fleet - two-thirds of the total transport in 2021 was provided by CNG-powered vehicles Opportunity for further growth after the introduction of Rx-online The expected deregulation of the online sales of prescription drugs (Rx-online) in the Czech Republic, Slovakia and other markets may lead to a sharp increase in Pilulka's sales. As a leader in digitalisation with a broad customer base and an established and trusted partner, Pilulka could benefit substantially from the potential deregulation A pioneer in connecting online and offline pharmacies Pilulka was at the beginning of online pharmacies roll-out in the region and is also a pioneer in exploiting the synergies arising from the combination of online sales and brick-and-mortar pharmacies. Pilulka will further develop the multichannel approach and will focus particularly on its own network of partner pharmacies, which provides significant benefits to member pharmacies 00 8 +pilulka#94.1 OVERVIEW OF PILULKA ACTIVITIES Czech Republic #1 online pharmacy in home delivery 2013 year of foundation Number of unique online customers 0.6m (2020) 0.9m (2023 est.) } Consolidated revenues CZK 1.8bn (2020) CZK 2.6bn (2023 est.) Since its foundation in 2013, Pilulka has emerged as the leading online pharmacy in Central Europe (online segment) and the operator of a network of franchise and selected brick-and-mortar pharmacies in the Czech Republic (offline segment). Pilulka operates in the Czech Republic, Slovakia and Romania, and also entered the Austrian and Hungarian markets in 2022 At the end of 2022, the Company operated 23 own pharmacies and another 84 franchise pharmacies in the Czech Republic The Austrian and Hungarian markets are served through a hybrid model from the newly opened warehouse in Olomouc and a warehouse in Bratislava. In the highly regulated pharmacy market, this is a very complex model, requiring a sophisticated logistical, technical, consumer and operational solution In 2022, several significant changes were implemented in the Romanian branch the new management optimized the portfolio mix, processes and cost side of the business - The Company is also further developing its e-health activities within the Plus Care project and the start-up accelerator Pilulka Lab Note: The presented financial data are based on the Company's management accounting online offline +pilulka lepší život Slovakia One of the largest networks of brick-and-mortar pharmacies #1 online pharmacy in home delivery Austria Hungary Romania +pilulka lepší život +pilulka +pilulka +pilulka o viață mai bună élj egészségesen gesund leben Forecasted revenues (CZK billion) 2.7 0.9 1.9 0.6 0.2 0.1 0.05 0.3 0.05 0.3 2023 2026 2023 2026 2023 2026 2023 2026 2023 2026 Pharmacy market size (total spending on medicines) CZK 88bn Statista, 2020 CZK 38bn Statista, 2020 CZK 86bn International Trade Administration, 2021 CZK 44bn Statista, 2021 CZK 181bn International Trade Administration, 2021 9 +pilulka#10Akce a slevy THRY 4.2 ONLINE PHARMACY 2013 CZ SK pilulka Úsměvů +pilulka Potraviny, nápoje Vše pro zdravy jidelniček }| 20% Projected average annual growth of online pharmacy revenues in 2023 - 2026 In addition to over-the-counter medicines, the online pharmacy also offers a wide range of cosmetics, food supplements, children's and sports nutrition The online sale of over-the-counter medicines differentiates Pilulka from online drugstores and is one of the main incentives to buy on Pilulka's e-shop (more than 50% of shopping baskets contain over-the-counter medicines). At the same time, strict regulation presents a natural barrier to entry for otherwise strong e-commerce players Pilulka offers its online customers an express home delivery (Pilulka Express service). The service is available to more than 5 million people in the Czech Republic and more than 1 million people in Bratislava and its surroundings In addition to its own pharmacies, Pilulka enables personal and unrestricted pick-up of orders also from Pilulka boxes in the Czech Republic and Slovakia The Austrian and Hungarian markets are served through "hybrid model" using Pilulka's current infrastructure and local customer and commercial support 2018 RO AT HU 2022 CZK billion Actuals Forecast 2.0 1.5 1.0 0.5 0.0 2020 2021 Note: The presented financial data are based on the Company's management accounting 2022 2023E 2024P 2025P 2026P Revenues CZ - online Cosmetics and drugstore 24% Electronics 24% Mother and baby care products 15% Revenues SK - online Revenues RO - online Structure of Pilulka online revenues (1) Medical supplies 6% Revenues AT- online Revenues HU - online Food and food supplements 25% Over-the-counter medicines 6% Other 1% Note: (1) Revenues for the period January - December 2022 10 +pilulka#114.3 NETWORK OF PARTNER AND OWN BRICK-AND-MORTAR PHARMACIES nákup z pilulka.c vyzvedněte ditě a matka 0000 péče o tělo body care میدا 4% Projected average annual growth of brick-and-mortar pharmacies revenues in 2023 - 2026 The network of brick-and-mortar pharmacies complements the online services offered by Pilulka, increases brand awareness and improves the Company's bargaining position with suppliers. Stone pharmacies also allow the personal pick-up of online orders Currently, 107 pharmacies across the Czech Republic operate under the Pilulka brand. In addition to its own pharmacies (23 branches), the Company is also developing a franchise concept, under which independent pharmacy operators have the opportunity to take advantage of Pilulka's marketing support As a result of its primary focus on the development of online activities, the Company currently does not anticipate the further expansion of its own pharmacy network. In recent years, the Company has optimised the network and divested unprofitable units, which has resulted in a reduction in the total revenues generated by the network. The main tool for strengthening Pilulka's presence on the brick-and-mortar pharmacy market in the future will be the franchise concept. The presented revenues growth outlook does not assume a substantial increase in the number of franchised pharmacies, but rather an organic growth within the current network 107 pharmacies of Pilulka, 23 own and 84 partner pharmacies Revenues from the network of own pharmacies have been declining in recent years due to the optimisation of the network and the sale of unprofitable units In the COVID-19 period, the Company was primarily focused on the development of online activities Management now plans to further develop and expand the franchise concept as the primary tool to further penetrate an offline segment CZK billion Actuals Forecast 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2020 2021 2022 2023E 2024P 2025P 2026P Note: The presented financial data are based on the Company's management accounting Revenues CZ - partner's pharmacies Prescription drugs 55% Revenues CZ - own pharmacies Structure of Pilulka offline revenues (1) Over-the- counter medicines 32% Food supplements / cosmetics 13% Note: (1) Revenues realized in January - December 2022 11 +pilulka#124.4 PILULKA'S E-HEALTH SOLUTIONS With the aim of establishing itself as a key platform providing pharmaceutical and healthcare players with access to the end-customer, and with a mission to bring new initiatives promoting healthy lifestyles, prevention and innovative treatments to the pharmaceutical industry, Pilulka is investing heavily in the development of its own e-health projects Number of users Plus Care 9,605 (2022) 50,000 (2023 est.) novo nordisk NUTRICIA SYNLABY AVENIER P ZDRAVOTNÍ POJIŠŤOVNA MINISTERSTVA VNITRA ČR NOVARTIS SANOFI PASTEUR ☑ Selected clients using e-health solution of Pilulka plus care 65 Plus Care, assistant for healthy living In addition to revenues from the sale of pharmaceutical and drugstore goods through online and brick-and-mortar stores, revenues from services provided by the Company to pharmaceutical companies, distributors, health insurance companies and healthcare providers in the areas of communication with customers, marketing or unique patient programs are also increasingly represented in Pilulka's total revenues. This trend can be expected to intensify as pharmacy sophistication continues, and the Pilulka will continue to play a key role in this process by educating individual stakeholders and developing specific initiatives and monetizing them At the same time, in the past two years, Pilulka has developed two specific projects in the e-health segment: a) The Plus Care mobile app for the general public meets the growing interest of employers in prevention and promotion of an active approach to health among their employees, it can search for doctors and health care facilities, monitors preventive examinations and clearly informs about available contributions and benefits offered by health insurance companies. In addition, it is an efficient tool for communicating employee benefits, including company team competitions, supporting the team spirit and bringing gamification elements to health care. Plus Care is based on a B2B2C model of cooperation, and in addition to employers and users themselves, its clients include pharmaceutical companies (e.g., Novo Nordisk, Nutricia, Novartis, Sanofi), public health insurance companies (e.g. Health Insurance Company of the Ministry of Interior), commercial health insurance companies (e.g., NN) and healthcare providers b) Pilulka Lab accelerator, founded in collaboration with Startup Yard, focuses on the development of young companies bringing innovation to the healthcare sector. Pilulka Lab has already managed to invest in two promising projects, Carebot and Vitadio 12 +pilulka#134.5 HISTORICAL MILESTONES IN THE DEVELOPMENT OF PILULKA Launch of the Company After the successful sale of the leading Czech online store Kasa.cz, Petr and Martin Kasa embark on the transformation and digitalization of the pharmacy industry 2013 2016 Introduction of franchise concept in the Czech Republic In addition to its own network of brick-and-mortar pharmacies, Pilulka is also focusing on the development of a network of franchise pharmacies, which increase brand awareness and are not capital intensive 2017 2018 Expansion into Romania Following the deregulation of the online sales of over-the-counter medicines, Pilulka enters the Romanian market, where it establishes an online pharmacy with a local joint-venture partner 2018 2020 COVID-19 Pilulka was able to respond extremely quickly to the crisis associated with the spread of COVID-19 and played a very important and socially beneficial role in the supply of pharmaceutical supplies. At the same time, the Company manage to significantly improve its operations 2020 / 2021 Opening of the largest brick-and-mortar pharmacy in the Czech Republic Pilulka is opening the largest brick-and- mortar pharmacy in the Czech Republic on an area of over 3,600 sqm in Olomouc. The pharmacy is tailored mainly for mail order and will serve customers from all over Moravia and now also Austria 2022 2022 2022 Entry of investors and delivery service Pilulka is the first online pharmacy in the EU to offer its customers express delivery of orders by its own Pilulka Auto (now Pilulka Expres). The service operates in the Czech Republic and Slovakia Acquisition of Pilulka24.sk Pilulka buys a 100% stake in Slovak online pharmacy Pilulka24.sk, significantly expanding its presence on the Slovak market Listing on the START Market Pilulka successfully enters the START Market and becomes the first ever traded e-commerce company on the Prague Stock Exchange Expansion into Hungary Pilulka is expanding into another European market and enters Hungary, where it operates through a hybrid model, combining distribution of goods from its current infrastructure (warehouse in Bratislava) and a local commercial department and customer support Entry into the Austrian market After the opening of the Hungarian branch, Pilulka continues its international expansion and enters Austria. It plans to reach more than 4 million households there and become a sought-after online pharmacy 13 +pilulka#144.6 ORGANIZATIONAL STRUCTURE OF THE COMPANY BEFORE THE SPO Petr and Martin Kasa Founders 34.80% All-Star Holding Marek Krajčovič Other shareholders Member of WOOD & Co. Member of the Supervisory Board 18.64% 12.24% 34.32% Other investments 70% Pilulka Lab s.r.o. Property Blocks s.r.o. 10% plus care +pilulka lepší život 100% +pilulka 100% Pilulka Lékárny a.s. Plus Care s.r.o. 100% KICI s.r.o. gesund leben +pilulka lepší život 100% Pilulka.sk, a.s. 100% Top Farma, s.r.o.(1) Supplier of Pilulka boxes Start-up accelerator founded in cooperation with StartupYard The Company predominantly used for development of private labels Note: (1) The activities of Top Farma, s.r.o., the former operator of an alliance of independent pharmacies in Slovakia, have been curtailed in recent years +pilulka o viaţă mai bună +pilulka élj egészségesen 100% 100% Pilulka Online S.R.L. Pilulka.hu KFT 14 +pilulka#154.7 ONLINE CUSTOMER BASE Percentage of orders placed by returning online customers 73.6% ) 77.8% (2020) (2022) The total customer base of Pilulka is divided into: a) مدا 743 ths. Number of online customers in 2022 14% Average annual growth in the number of online Number of unique online customers who made purchase(s) in a given year (thousands of people) Actuals Forecast 1,600 1,304 1,131 1,200 982 852 customers between 721 743 800 569 2020 - 2022 400 Online customers who are users of the online pharmacy and mobile app b) Offline customers who are served by a network of brick-and-mortar pharmacies Overall satisfaction with Pilulka's services is also reflected in the growth rate of its customer base between 2020 and 2022, the number of Pilulka's online pharmacy customers grew by an average of 14% per year In 2022, the services of the online pharmacy were used by: 0 2020 2021 2022 2023E 2024P 2025P 2026P Distribution of customers of the online pharmacy Pilulka.cz by gender and age 36% a) 411,000 existing customers who have made at least one purchase in the past and made at least one purchase in a given year (55% of the total number of customers served in 2022) 24% Men b) 332,000 new customers who made their first purchase on Pilulka in a given year (45% of the total number of customers served in 2022) 12% At the same time, nearly 78% of all online orders in 2022 were made by existing Pilulka customers. The steady growth of this indicator over the past three years demonstrates a gradual increase in customer loyalty Women 0% 18-24 25-34 35-44 45-54 55-64 65+ +pilulka 15#164.8 MAJOR CONTRACTUAL PARTNERS Alliance TM Healthcare BAYER BAYER PHOENIX group teva P&G PHARM S SANDOZA Novartis Division SANOFI → gsk GlaxoSmithKline UNIPHARMA Un 1. slovenská lekárnická akciová spoločnosť Pfizer Johnson & Johnson ZENTIVA MED-ART As a key player in the pharmacy and e-health segment, Pilulka is one of the few regional players with direct sales and marketing contracts (and also own pricing terms) with all major companies on the pharmaceutical market, including leading global pharmaceutical manufacturers In 2022, the Company directly cooperated with more than 700 suppliers, of which 177 were pharmaceutical companies. More than 60% of its deliveries were made directly without a commercial intermediary. Distribution companies help Pilulka to increase the time and volume flexibility of its deliveries The Company's goal is not only further domestic and international expansion, but also to improve its product portfolio by establishing cooperation with other partners from among pharmaceutical companies, suppliers of food supplements and vitamins, nutritional products, sporting goods and other By entering new markets, in particular Austria, the Company gains numerous local sourcing opportunities for the entire Pilulka Centralization of purchasing is one of the key initiatives that Pilulka intends to focus on in the coming years 16 +pilulka#174.9 TECHNOLOGY AND IT When developing its own IT systems, Pilulka puts increased emphasis on user-friendliness and easy scalability so that these systems can be easily replicated when the Company expands into new markets. Pilulka's core infrastructure including the online pharmacy, mobile app and other systems is now fully developed and invested Online pharmacy and Pilulka app Pilulka has an edge over its competitors due to strong pro-innovative corporate culture and robust internal IT team that develops and manages all of the Company's core systems Online pharmacy The very user-friendly interface, as well as the entire backend were developed in-house. Pilulka's online pharmacy is therefore a well-functioning and compact application, which can also be flexibly upgraded according to the current requirements of customers, sales team and other parties Mobile app The mobile app for Apple and Android, the first of its kind on the European market, offers a similar range of services as the online shop. Currently, the app is available on all five markets where Pilulka operates and, in particular, generates a significant share of total revenues on the Czech and Slovak markets Information system = the heart of the business The corporate information system manages and connects all internal and dozens of external systems and helps with customer relationship management. The basis of the system was again developed by Pilulka's own IT team +pilulka - pilulka. den Úsměvů +pilulka. Potraviny, nápoje Vše pro zdravy jidelniček zprávy 17 +pilulka#184.10 TOP MANAGEMENT AND EMPLOYEES Top management Employees Development of the number of employees (1) 500 383 363 400 285 300 Petr Kasa CEO and Founder Martin Kasa Strategy Director and Founder David Staněk Chief Financial Officer 200 100 0 2020 2021 2022 ■Czech Republic Slovakia Romania Michal Hanáček Šimon Čapek Chief Operating Officer Director of Marketing Ján Šaulič Country Manager for Slovakia Pilulka's senior management team has extensive professional experience in e-commerce, FMCG sales, distribution and financial management and is ready, alongside with founders, to further develop the Company The average number of Pilulka employees in 2022 was 383(1) (including employees of the Company's own brick-and-mortar pharmacies) Approximately 70% of the total number of employees are employees in the Czech Republic, the remaining 30% are employees in Slovakia and Romania Pilulka offers its employees a wide range of benefits (e.g. Multisport card), organizes various team events for them and thus contributes to creating a pleasant working environment Note: (1) The number of staff shown is converted to FTEs. Employees working on development of Austrian and Hungarian operations are recorded under the Czech Republic and Slovakia respectively 18 +pilulka#195.1 KEY FINANCIAL INDICATORS CZK 1.8bn Revenues 2020 +13% Average annual CZK 2.6bn Estimated revenues U increase '20-'23 2023 +17% Average annual increase '23-'26 CZK 4.2bn Forecasted revenues 2026 CZK 36.5m EBITDA CZ+SK 2022 CZK 150.7m EBITDA CZ+SK 2026 CZK 156.0m EBITDA Pilulka 2026 Historical and forecasted revenues, EBITDA and cash flow of Pilulka Actuals | Forecast Average annual growth +17% Revenues (CZK billion) 4.5 Average annual growth +13% 3.0 2.4 1.8 1.5 (1.5) 4.2 600 3.6 3.0 2.6 2.5 400 200 EBITDA and cash flow (CZK million) 0.0 0 2020 2021 2022 2023 2024 2025 2026 (200) Revenues - RO online Revenues other Revenues - CZ online Revenues - AT online Adjusted EBITDA Revenues - CZ offline Revenues - HU online Cash flow Revenues SK online Revenues - Plus Care Note: EBITDA is calculated as revenues net of direct costs and operating expenses. Capital expenditures related to the development of IT systems are capitalised into intangible assets. The presented financial data are based on the Company's management accounting Company's revenues growth driven by the continued strengthening of Pilulka on key markets, i.e. the Czech Republic and Slovakia and gradual development of export markets, i.e. Austria, Hungary and Romania EBITDA margins of 2.2-1.5% in the Czech Republic and Slovakia between 2020 and 2022. Company's EBITDA to turn positive again after 2023, after expansion markets roll-out The presented business plan assumes the successful completion of the SPO in the amount of CZK 250m Franchise pharmacies realized revenues of CZK 953m in 2022. These revenues are not included in the Company's consolidated revenues 19 +pilulka#20Capital expenditure (CZK million) Operating expenses (CZK billion) 5.2 OPERATING EXPENSES AND CAPITAL EXPENDITURE Historical and estimated operating expenses (OpEx) Actuals | Forecast 29% 1.2 27% 30% 26% 26% 26% 0.9 24% 27% 23% 0.6 0.3 24% 21% 0.0 18% 2020 2021 2022 2023 2024 2025 2026 Warehouse Transport Marketing Other OpEx / Revenues Historical and estimated capital expenditure (CapEx) Actuals | Forecast 100 75 1% 50 25 0 4% 3% 3% 3% 2% 1% 1% 1% 2% 1% 0% 2020 2021 2022 2023 2024 2025 2026 ■Technology & IT Warehouse Plus Care Other CapEx / Revenues Note: The presented financial data are based on the Company's management accounting CapEx / Revenues OpEx / Revenues Warehousing, transport and marketing expenses are the main operating expenses of Pilulka Pilulka's ratio of operating expenses to total revenues is decreasing due to the Company's increasing operational efficiency and economies of scale The Company expects an overall decline capital expenditure between 2023 - 2026 in The share of capital expenditure on Pilulka's revenues also decreases in the forecast period, due to lower planned investments in technology & IT and mainly due to minimization of further investments in warehouse capacities (as they are now fully developed and invested). The newly expanded warehouse capacities in the Czech Republic and Slovakia will serve for local organic growth and at the same time as a base for expansion into Austria and Hungary 20 +pilulka#215.3 HISTORICAL AND PROJECTED FINANCIAL STATEMENTS (1/2) Profit and loss statement (CZK million) Gross profit 2020 Revenues 1,786 2021 2,413 2022 2023 2024 Revenues CZ online 827 1,317 2,465 2,611 3,021 1,381 1,408 2026 3,589 4,227 1,620 1,900 2,200 2025 Revenues CZ offline 421 400 368 316 305 305 305 Revenues SK online 392 489 514 583 670 770 860 Revenues RO online 48 74 74 77 90 125 160 Revenues AT online 47 111 170 250 Revenues HU online 48 90 160 270 Revenues Plus Care 0 3 7 13 20 25 Other revenues 98 132 122 126 122 139 Cost of sales 1,292 1,753 1,756 1,910 493 659 709 701 2,207 813 2,625 157 3,098 964 1,130 % from revenues 27.6% 27.3% 28.8% 26.8% 26.9% 26.9% 26.7% Operating expenses 467 630 710 709 782 874 974 EBITDA 27 29 (1) (8) 31 90 156 EBITDA CZ online + CZ offline + 31 41 31 27 64 90 112 Plus Care + Other (CZ) EBITDA SK online + Other (SK) 7 6 10 9 23 39 EBITDA RO online + Other (RO) (11) (17) (20) (9) (6) (2) 1 EBITDA AT online + Other (AT) EBITDA HU online + Other (HU) (6) (18) (18) (9) 3 (11) (18) (17) (11) 2 % from revenues 1.5% 1.2% (0.0%) (0.3%) 1.0% 2.5% 3.7% 2.7 27 1.5% 29 2 1.2% 0.1% (8) (0.3%) 31 1.0% 90 2.5% 156 3.7% Actuals Forecast EBITDA adjustment Adjusted EBITDA % from revenues བྱེ॰ Note: The presented financial data are based on the Company's management accounting After a period of significant growth (also influenced by the COVID-19 pandemic and the associated increased demand for pharmaceuticals and medical supplies), the Company recorded an annual revenues growth of approximately 2.2% in 2022, despite an overall decline in e-commerce The Company expects average revenues growth in the 2023 2026 period to be approximately 17% per annum due to: Continued growth of Pilulka on Czech and Slovak markets Additional revenues from the Romanian and newly opened Austrian and Hungarian branches The evolution of the gross margin from 27.6% in 2020 to 28.8% in 2022 indicates a gradual improvement in Pilulka's profitability due to: Stabilization of business and further consolidation of the penetrated markets Increased bargaining power in respect to suppliers Introduction of profitable private labels into the portfolio Decline in the gross margin after 2022 is due to foreign expansion EBITDA adjustment in 2022 includes one-off expenses incurred in relation to the acquisition of another company. The acquisition was ultimately not completed The Company has positive EBITDA in the Czech Republic and Slovakia, indicating the functionality and sustainability of its local business model. As a result of the foreign expansion, Company's EBITDA will be negative in 2023 21 +pilulka#225.3 HISTORICAL AND PROJECTED FINANCIAL STATEMENTS (2/2) Balance sheet (CZK million) 2020 2021 2022 2023 2024 2025 2026 Assets 498 589 606 718 705 765 907 Fixed assets 117 175 197 225 237 248 239 Intangible fixed assets 54 83 90 95 96 90 88 Tangible fixed assets 35 62 74 57 38 25 18 Other (1) 28 30 33 73 103 133 133 Current assets 378 412 405 488 463 512 663 Inventories 91 155 187 164 191 228 270 Receivables 155 185 197 198 227 266 310 Cash and bank balances 132 72 21 126 45 18 83 Acc. assets and def. liabilities 4 2 4 I 5 5 5 5 Liabilities 498 589 606 718 705 765 907 Equity + minority equity 218 204 139 286 234 236 311 Provisions 6 15 8 I 10 10 10 10 Liabilities 274 369 458 421 460 518 585 Long-term payables 3 21 25 24 23 22 21 Short-term payables 271 348 434 397 437 496 564 of which liabilities to credit institutions 25 21 85 84 83 82 81 Acc. liabilities and def. assets 1 0 1 1 1 1 Actuals Forecast In recent years, the Company has invested heavily in the development of its own IT and information systems, which, in addition to existing markets, are also being utilized on expansion markets. Capital expenditures related to development of IT systems are capitalized into intangible fixed assets Tangible fixed assets represent only a small portion of the total assets held by the Company. Pilulka does not own the premises in which the pharmacies are located or the warehouses, but leases them on a long-term basis The presented balance sheet shows Company's cash position after the completion of the contemplated SPO in the amount of CZK 250m (but after taking into account the assumed transaction costs). Capital raising in the indicated amount is one of the prerequisites for the delivery of the presented business plan Working capital, comprising inventories, receivables and short-term payables, is increasing due to Company's growing revenues. Management expects inventories, receivables and short-term payables turnover to remain constant over the forecast period The Company does not anticipate an increase in its debt above the current level in the forecast period Note: The presented financial data are based on the Company's management accounting; (1) Includes non-current financial assets, goodwill on consolidation and negative goodwill on consolidation 22 22 +pilulka#236 COMPARISON OF PILULKA WITH SIMILAR TRADED COMPANIES Piluka's share price has grown significantly since IPO in October 2020. Due to a slowdown in e-commerce post-COVID-19, the market sentiment changed substantially in 2022 which resulted into decline in Pilulka's share price. Similar pattern were also followed by share prices of Shop Apotheke Europe and DocMorris (formerly Zur Rose), major Western European online pharmacies Actual revenues multiples of Pilulka are gradually converging to those of the Western European peers. However, Pilulka's shares are still trading at a relative discount to Shop Apotheke Europe and DocMorris. Gradual expansion of Pilulka and convergence towards its peers may also result in an increase in the valuation multiple at which Pilulka trades over time 450 Daily closing share price of Pilulka, Shop Apotheke Europe and DocMorris (data normalised to 26.10.2020) 300 The difference between the average revenues multiples of Shop Apotheke & DocMorris and Pilulka was approximately 1.7x as of the IPO in October 2020 150 Share price of Pilulky at IPO 26.10.2020: CZK 424 0 Period of 26.10.2020 19.5.2023: Pilulka: +11% -34% -85% Shop Apotheke Europe: DocMorris: +132% Period of 26.9.2022 - 19.5.2023: Shop Apotheke Europe: DocMorris: +2% The difference between the average revenues multiples of Shop Apotheke & DocMorris and Pilulka as of 19.5.2023 is approximately 0.5x 26.02.2022 26.04.2022 26.05.2022 26.06.2022 26.09.2022 26.02.2023 26.01.2022 26.03.2022 26.07.2022 26.08.2022 26.10.2022 26.11.2022 26.12.2022 26.01.2023 26.03.2023 26.04.2023 26.05.2021 26.06.2021 26.07.2021 26.08.2021 26.09.2021 26.10.2021 26.11.2021 26.12.2021 26.04.2021 26.10.2020 26.11.2020 26.12.2020 26.01.2021 26.02.2021 26.03.2021 Shop Apotheke Europe - daily closing share price DocMorris - daily closing share price Pilulka - daily trading volume (CZKm) Enterprise value / revenues as of Pilulka's IPO(3) 30 30 +pilulka Pilulka - daily trading volume (CZKm) 15 0 Pilulka daily closing share price Company name Market DocMorris (1) Shop Apotheke Europe Average Pilulka SIX Swiss Ex XETRA Market capitalisation (2) (EURM) 461.1 1,939.9 Enterprise value(2) (EURM) Enterprise value / revenues(2) 2020 2021 2023 864.1 1.80x 1.40x 0.74x 1,981.1 2.70x 2.20x 1.31x 2.25x 1.80x 1.02x START BCPP 47.8 50.5 0.53x 0.43x 0.49x (2) DocMorris and Shop Apotheke Europe valued as of 19.5.2023, Pilulka's market capitalisation assumes 2,520 ths. shares outstanding at a price of CZK 450 per share (3) Indicators "Enterprise value / revenues as of Pilulka's IPO" for DocMorris and Shop Apotheke Europe taken from Helgi Library's analyst report dated 14.9.2020. "Enterprise value / revenues as of Pilulka's IPO" for the Company is based on a market capitalisation assuming 2,000 ths. shares outstanding at an IPO price of CZK 424 per share Source: Bloomberg Note: (1) Formerly Zur Rose Group 23#247 ABSTRACT FROM RESEARCH REPORT The research report was prepared by Jiří Staník of Helgi Analytics ("Analyst"). The Helgi Library. Analyst is authorized by the Prague Stock Exchange The Analyst determined the value of the Company based on: Revenues multiple of comparable traded companies Discounted cash flow (DCF) a) b) The revenues multiple of comparable companies in Western Europe implies a valuation of Pilulka at CZK 555-676 per share However, unlike Pilulka, Shop Apotheke Europe and DocMorris operate on markets where gradual deregulation of online sale of prescription drugs is being implemented - these companies are thus able to cannibalize the traditional brick-and-mortar pharmacy market more quickly and achieve faster and more profitable growth. To account for these differences, the Analyst applies a 20% discount to the above valuation based on revenues multiples of comparable companies the resulting valuation implies a value of Pilulka in the range of CZK 444-541 per share - The valuation based on discounted cash flows indicates a value of the Company at CZK 450-550 per share. Assuming gradual deregulation of online prescription drugs sales after 2027 on already penetrated markets, the Analyst assumes a current value of Pilulka at CZK 580-680 per share Comparison of the outputs of different valuation techniques used by Analyst Valuation per Pilulka's share (in CZK), assuming successful execution of the SPO and delivery of the indicated business plan (1) Comparable companies Revenues multiple (2) Comparable companies Discounted revenues multiple (2) - Discounted cash flows (DCF) 400 500 | 600 700 The comparable traded companies are a) Shop Apotheke Europe, b) DocMorris (formerly Zur Rose Group) and c) Talea Group Shop Apotheke Europe and DocMorris operate on markets where gradual deregulation of online sale of prescription drugs is being implemented (Germany, Switzer- land, the Netherlands, etc.) If we use revenues multiples of peers as a "benchmark", the value of Pilulka would be in the range of CZK 555-676 per share Given the lack of a legal framework governing the online sale of prescription drugs in the markets where Pilulka operates and other business model related differences, the Analyst applied a discount of 20% to the above valuation based on revenues multiple of comparable companies The basis for the DCF valuation is the business plan until 2026 prepared by the Company's management. The period 2026 to 2032 is forecasted by the Analyst according to his own assumptions The light pink rectangle indicates the upside potential of ca CZK 130 per share following the gradual deregulation of online prescription drugs sales after 2027 in the markets where Pilulka operates Note: (1) The amount of funds raised from the SPO, net of transaction costs, should amount to at least CZK 236m (2) Valuation range based on average EV / revenues of Shop Apotheke Europe, DocMorris and Talea Group between 2023 and 2026 24 +pilulka#258 WHERE TO BUY PILULKA'S SHARES We recommend using services of following members of the Prague Stock Exchange to purchase and sell Pilulka shares: Patria Finance, a.s. opportunity PATRIA FINANCE o.portu.cz [email protected] +420 222 096 666 You can register and buy Pilulka's shares completely online through the opPORTUnity platform J&T BANKA, a.s. Fio banka, a.s. J&T BANKA Fio Fio banka www.patria.cz [email protected] +420 221 424 424 www.jtbank.cz [email protected] +420 221 710 666 www.fio.cz [email protected] +420 224 346 225 25 25 +pilulka#26+pilulka lepší život