Farmaceutica REMEDIA S A : REMEDIA - 2022 Annual report

CONSOLIDATED ANNUAL REPORT 2022

Board of Administrators of

Farmaceutica REMEDIA S.A.

Farmaceutica REMEDIA S.A.

Registered office: Deva 330040, Nicolae Balcescu Bld. no 2 (former No. 43 Dorobantilor Street), Hunedoara

County, Telephone: + 40 254 223 260, Fax: [phone]

Branch office: Bucharest, 041836, sector 4, Bld. Metalurgiei 78, Telephone/fax: + 40 213 211 640 [e-mail], www.remedia.ro

Trade Register J20/700/1991, TIN: RO2115198; Share capital: RON 9.548.082

IBAN: RO61 BTRL RONC RT00 G713 3302, Transilvania Bank, Bucharest

IBAN: RO33 RZBR 0000 0600 0266 5747, Raiffeisen Unirii, Bucharest

according to F.S.A. Regulation No.5 / 2018 Annex 15 for the financial year 01.01.2022 - 31.12.2022

Report of the Board of Administrators

CONSOLIDATED ANNUAL REPORT

2022

Board of Administrators of

Farmaceutica REMEDIA S.A.

A. Name of the commercial company: Farmaceutica REMEDIA S.A.

		Subscribed share capital:	9.548.082Lei
		Paid-up share capital:	9.548.082Lei
		Registered office:	DEVA, Nicolae Balcescu Bld. no 2,
		Tel. / Fax:	0254 223 260 / 0254 226 197
		No. and date of registration	J20/700/25.07.1991
		with the T.R.O.:
		Tax Identification Number:	RO2115198
		Securities:	RMAH shares (Reg. certificate No. AC-1470-
				7/17.06.2021)
			Type:	Dematerialised Nominative Common
		Date of registration:	17.03.1997
		Nominal value/share:	0.10 Lei
	Position in the R.N.S.C. Register:	1636
		Total number of shares:	95.480.820
		R.N.S.C. code of shares:	16368
	Date	Number of	Issue value (Lei)	Explanations
		shares
1	10.11.1999	3.370.107		337.010,70	Initial capital of the state,
					including land contributed in kind
2	06.09.2001	1.500.000		150.000,00	Cash contribution of V.TARUS
					RoAgencies
3	23.07.2003	42.402		4.240,20	Merger - capital of Ditafarm
					Trading - acquired company
4	05.01.2006	5.696.471		569.647,10	Merger - capital of V.TARUS
					RoAgencies - acquired company
5	21.12.2007	87.905.969		8.790.596,90	Capital increase - shareholders
					with pre-emption right
6	04.05.2009	7.574.851		757.485,10	Capital increase - AHG Simcor
					Industry S.R.L.
7	09.06.2021	- 10.608.980	- 1.060.898,00	Reduction of share capital -
					repurchase of shares followed by
					their cancellation
	TOTAL	95.480.820		9.548.082,00

Organized market on which securities are traded:

Bucharest Stock Exchange - Standard category

The total market value on 20.03.2023 is of 59.961.955 Lei, at a value of a 0,6280 Lei/RMAH share

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according to F.S.A. Regulation No.5 / 2018 Annex 15 for the financial year 01.01.2022 - 31.12.2022

Report of the Board of Administrators

1. Activity analysis

1.1. Overview

The consolidated financial statements of 2022 comprise the results of the companies:

• Farmaceutica REMEDIA S.A. and,
• Farmaceutica REMEDIA Distribution & Logistics S.R.L., a company owned 100% by Farmaceutica REMEDIA S.A.
• PHARMA EXPERTSPEDITION S.R.L., a company in which Farmaceutica REMEDIA S.A. holds 50% of the share capital

On July 25th 1991, it was established as a commercial company with fully state-owned capital by reorganization of Oficiul Farmaceutic Deva.

On October 13th 2000, V. TARUS RoAgencies S.R.L. purchased from FPS the majority shares package (55,802%).

On January 1st 2006, Farmaceutica REMEDIA S.A. merged by absorption with V. TARUS RoAgencies S.R.L.

According to Law 95/2006, republished in August 2015, companies were prohibited from carrying out, at the same time, wholesale and retail distribution of medicines. (Art. 800 paragraph 2). Therefore,

On January 1st 2016 Farmaceutica REMEDIA S.A. completed the transfer to Farmaceutica REMEDIA Distribution & Logistics S.R.L., a new company, 100% owned, of the wholesale distribution activities of medicines together with related activities (logistic services, registration of pharmaceutical products, promotion and marketing of medicines, etc.), Farmaceutica REMEDIA S.A. kept the operation of the chain of pharmacies and local offices.

Following the change of the main activity object imposed by the above-mentioned legislation, the company had to redeem from the market (in 2015) a number of 300.100 shares at a price established by an authorized evaluator.

In February 2022, Farmaceutica REMEDIA SA sold 3 pharmaceutical licenses related to the pharmacies in Ghermanesti, Reviga, Motaieni and the office in Vulcana de Sus, and in June 2022 it opened, in Deva, Drogheria HOREA.

In April 2022, Farmaceutica REMEDIA SA purchased a 50% participation in the share capital of the Romanian legal entity PHARMA EXPERTSPEDITION S.R.L., with registered office in Bucharest, Bd. Metalurgiei, nr. 130E, Sector 4, registered at the Commercial Register of Bucharest with nr. J40/20206/2005, with TIN 18178346, in order to develop and strengthen the distribution and logistics activity.

In this context, on 31.12.2022 Farmaceutica REMEDIA S.A. held a majority participation (100%) in the company Farmaceutica REMEDIA Distribution & Logistics S.R.L. and a 50% participation in the company PHARMA EXPERTSPEDITION S.R.L.

In August 2022, Farmaceutica REMEDIA Distribution & Logistics SRL closed the logistics warehouse in Timisoara, as a result of decreasing sales in the Timisoara area and increasing operating costs.

During 2022 Farmaceutica REMEDIA S.A. did not participate in mergers.

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according to F.S.A. Regulation No.5 / 2018 Annex 15 for the financial year 01.01.2022 - 31.12.2022

Report of the Board of Administrators

1.2. Elements of general evaluation

The consolidated financial results of Farmaceutica REMEDIA S.A. for the financial year 2021 indicate a net profit of 5.809.133 Lei on a net turnover of 535.850.640 Lei. Other operating income (3.350.123 Lei) was also recorded, mainly from the real estate investments, as well as financial income worth 844.866 Lei (mainly dividends from non-controlled companies, exchange rate differences and discounts for advance payments).

532.987.744 Lei - total costs (excluding corporate tax), of which:

• 532.454.817 - Operating expenses, of which:

• 1. 486.756.096 Lei is the net cost of sold merchandise (including received commercial discounts)
• 532.927 - Financial expenses, of which:
• 1. 62.476 Lei - operational leasing interests (IFRS 16)

1. 179.995 Lei - exchange rate differences

1. 172.434 Lei - paid discounts for advance collections

As of 31.12.2022, the liquidity of the companies (available in bank accounts and in cash offices) has reached 18.083.345 Lei. On the same date, the companies (FR and FRDL) had at their disposal a multi-currency credit line in the amount of 74,6 million Lei, used on 31.12.2022 exclusively for bank letters of guarantee for tenders and for the good performance of contracts, as well as for guarantees for the payment of goods suppliers.

1.3. Evaluation of company's income

528.160.738 Lei - The net income from the sale of merchandise (99 % from the net turnover) with the following allocation on distribution channels:

• 309.227.368 Lei - Distribution
• 203.848.403 Lei - Hospitals
• 10.587.770 Lei - Remedia Pharmacies
• 4.497.197 Lei - BD Rowa robots sales
• 7.689.902 Lei - From the activities with added value, of which:
• 5.470.220 Lei - logistics and warehousing services
• 1.634.483 Lei - invoiced rents
• 456.258 Lei - BD Rowa services and other services
• 128.941 Lei - clinical studies and registrations

1.4. Evaluation of the sales and marketing activity

The company's main line of business is the nationwide distribution of medicines. REMEDIA has consolidated its position as a national distributor by increasing its product portfolio, diversifying its services to customers such as independent pharmacies and regional chains, ensuring availability and continuity in stock for over 4.000 items: medicines and parapharmaceutical products.

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according to F.S.A. Regulation No.5 / 2018 Annex 15 for the financial year 01.01.2022 - 31.12.2022

Report of the Board of Administrators

REMEDIA customers in 2022:

• 2.361 pharmacy legal entities and 4.745 affiliated working points;
• 527 health units/hospitals (public and private).

Nationwide distribution has been optimized by reducing the number of local warehouses and ensuring national coverage through 6 logistics hubs, of which:

• 2 main warehouses: Bucharest and Deva
• 4 local warehouses: Brasov, Craiova, Iasi, Pitesti

All our actions were based on the needs and requirements of our customers. Through constant investigation and analysis of the market, continuous

monitoring of the evolution of the specific domestic and international environment, we have adapted in real time to market requirements.

The marketing and promotion services of Farmaceutica REMEDIA Distribution

• Logistics portfolio are offered to pharmaceutical companies in various therapeutic areas: cardiovascular and diabetes, dermato-cosmetic, family medicine and paediatrics, neo-natology, cardioplegia and transplantation.
  Marketing and promotion activities are also supported by the publications The British Medical Journal - Romanian edition, ranked among the top national specialized journals since 1998, Medica Academica, published since 2009 under the patronage of the Romanian Academy of Scientists and Maedica, a Journal of Clinical Medicine, since 2016, under the patronage of the Carol Davila University of Medicine, Bucharest.
  Another priority objective of the company is to develop online sales by implementing its own solution, in partnership with companies specialized in e- commerce.
  REMEDIA's online sales platform, www.farmaciileremedia.ro, is focused on customer satisfaction, provides an easy and fast shopping experience that allows easy navigation through all product categories, as well as promotion of target products.
  In parallel, social media campaigns have been launched to provide easier access to products, to inform customers about new products, promotions and campaigns run by the company, as well as the benefits of pharmacy automation processes through robots

Market data 2022 vs 2021:

According to the results of the Pharma & Hospital Report, Cegedim Customer Information, in 2021 pharmaceutical market sales grew by 7.2% in units and 20.2% in value in the pharmacy segment, and by 7% in units and 24% in value in the hospital segment.

The accelerated growth of the value market is due to the listing of innovative drugs used in the treatment of serious diseases with an extremely high cost of therapy, products that REMEDIA does not have in its portfolio.

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