Medartis : Highlights 2021 Annual Report

2021 Annual Report Highlights

Founded in 1997 and headquartered in Basel, Switzerland, Medartis is one of the world's leading manufacturers and providers of medical devices and solutions for the treatment of bone fractures of the upper and lower extremities as well as the head. Medartis employs approximately 700 people at its 14 locations and offers products in over 50 countries worldwide. Medartis is committed to providing surgeons and surgical staff with procedure- and anatomy-specific solutions and world-classservices that lead to excellent treatment outcomes.

For more information, please visit

www.medartis.com

Key financial figures   Medartis 2021 Annual Report Highlights   3

Key financial figures

Sales in CHF million1

EBITDA in CHF million

159.9

+25.3% growth in CHF

+24.8% growth in CER2

27.4

17.2% EBITDA margin

+1.7 PP (CER)

	FY 2021	FY 2020	FY 2020	Change in CHF	Change in CER
in CHFm		restated	as reported	vs. 2020	vs. 2020
Net Sales	159.9	127.6	124.7	25.3%	24.8%
Gross Profit	134.1	106.5	103.5	25.9%	25.4%
Gross margin (in %)	83.9%	83.4%	83.0%	+0.4PP	+0.4PP
EBITDA	27.4	19.0	19.7	44.3%	38.5%
EBITDA margin (in %)	17.2%	14.9%	15.8%	+2.3PP	+1.7PP
Operating Profit (EBIT)	11.1	3.1	3.8	253.1%	180.1%
EBIT margin (in %)	6.9%	2.5%	3.0%	+4.4PP	+3.8PP
Net profit	6.9	-0.9	-0.9	n/a
Net profit margin (in %)	4.3%	-0.7%	-0.8%	5.0PP
Basic Earning per share (EPS)	0.58	-0.08	-0.08	n/a
Headcount (at year-end)	684	636		+7.5%

1) As part of a review of the finance processes, Medartis challenged the presentation of commissions paid to certain third party sales agents. As a result the company has reclassified distributor sales commissions, which were historically deducted from net sales, into operating expenses. Furthermore, some early payment discounts, which had previously been reported as financial expenses, are now deducted from net sales. For 2020 the reclassified commission amounted to CHF 3.6m, for 2021 it amounted to CHF 4.7m. Early payment discount reclassifications were CHF 0.6m in 2020 and CHF 0.7m in 2021. For detailed information, please see Note 2.3 of the 2021 Annual report.

2) CER (constant exchange rates) excludes currency effects between two reporting periods. Unless otherwise stated, the company generally shows growth rates in CER.

PP = Percentage points

Marco Gadola	Dr. Christoph Brönnimann
Chairman of the Board of Directors	Chief Executive Officer

Editorial   Medartis 2021 Annual Report Highlights   5

Dear shareholders, dear owners,

In this letter to you, we would like to reflect on the past year and share with you and other stakeholders how we see the future of our company. 2021 has been a very successful year for Medartis. The healthcare sector once again proved more resilient than others in extremely difficult circumstances. We made progress in implementing our growth strategy and strengthened our business despite the scope and unpredictability of the pandemic, the additional burden from the new Medical Device Regulation (MDR) and the dissolution of the bilateral framework agreement between Switzerland and the EU. We accelerated our top line (Total net sales +25% CER) across all our regions and product lines, we grew faster than the market and our global competitors, improved underlying profitability (EBITDA margin +1.7 percentage points CER) and were able to significantly increase our patient and customer pool around the globe.

Our progress has not gone unnoticed, which is reflected in the increase of our share price by 180% over the full-year period. We met the expectations of the capital market and were able to attract new investors. We are very pleased with this development and would like to thank all our shareowners who have remained loyal to us and accompanied us on this journey. We are aware that the share price reflects future expectations and are taking the capital market's appreciation in 2021 as an incentive to continuously improve and thus create value. For better or worse, the virus and its limitations will be with us for some time. We have to continue to adapt quickly, learn fast and adjust dynamically to new conditions. The regulatory environment will tighten further and we will focus even more on sustainability going forward.

A firm grip on the supply chain

The 2021 performance was also driven by tight cost and far-sighted supply chain management. We were able to ensure the availability of our products throughout the year and no notable interruptions of our supply chain occurred. Our teams worked hard to get the necessary surgical supplies delivered directly to hospitals. Our safety stock strategy for critical raw materials and working with regional, long-term suppliers and partners paid off. Throughout the entire period, the safety of our employees has been a top priority for us, and we have had no work-related fatalities or abnormal absences due to illness. This also reflects the vigilance of our dedicated health taskforce and team leaders. You can find more details and statistics in this report. In times of lockdowns and remote working, a growing organisation might lose sight of the company's mission. Even as a larger corporation, we always want to keep up our partnership spirit. Online courses, webcasts, market research and customer surveys are important supplements, but they can never fully replace direct contact. In 2021, we again invested in physical training & education formats, and, when the situation allowed, held "Re-connect" events, attended trade fairs, and our field representatives were back in the operating room more regularly.