Farmacosmo S p A : Board of directors approves consolidated half-year financial report as of june 30th 2023

BOARD OF DIRECTORS APPROVES CONSOLIDATED HALF-YEAR FINANCIAL REPORT AS OF JUNE 30th 2023

STRONG INVESTMENT POLICY TO SUPPORT:

• • THE GROWTH OF THE PROFUMERIAWEB PORTAL
• THE LAUNCH OF THE TELEPSYCHOLOGY PLATFORM CONTACTU
• THE DIRECT PURCHASE OF KEY HIGH-MARGIN-PRODUCTS

RESIGNATION OF COUNCILOR GIUSEPPE VITA FOR PERSONAL REASONS

Main Consolidated Results:

• Consolidated Sales Revenues: 36.7 million euros (+14% YoY)
• Consolidated EBITDA: Euro 30 thousand (vs Euro 238 thousand in 1H22)
• Farmacosmo S.p.A. EBITDA : 319 thousand Euro (vs. 238 thousand Euro in 1H22)
• Consolidated operating income: € -2.1 million (vs. € -0.3 million in 1H22) impacted by € 1.6 million in depreciation and amortization
• Negative cash NFP of €1.3 million (vs. €5.2 million - cash positive - in FY22) mainly due to the strong investment policy during the period

All retail channel1 KPIs are on the rise:

• Strong increase in orders (+35% YoY)
• Total and loyal customers increasing (+45% YoY and +30% YoY)
• Average cart value on the farmacosmo.it portal at approximately Euro 98 (vs Euro 96 YoY), one of the highest in the market, consistently above Euro 100 since July
• 74% of Revenues from recurring customers in line with FY22

Naples, September 28th 2023

Farmacosmo S.p.A. ("Company". "Farmacosmo"), a company active in the Health, Pharma & Beauty sector, listed on the Euronext Growth Milan market of Borsa Italiana, announces that the Board of Directors met today and approved the consolidated half-year financial report as of June 30, 2023.

Fabio de Concilio, President and CEO of Farmacosmo, commented, "The results achieved during the first half of 2023, influenced by the numerous investments made in the companies acquired during 2022 and

2023, show excellent progression in the retail channel with all portals growing both in terms of revenue and increase in marginality.

• The retail channel consists of the following portals: www.farmacosmo.it, www.profumeriaweb.com, www.pharmasi.it, www.baucosmesi.it

The Farmacosmo portal shows all KPIs improving and an average shopping cart in the first six months of Euro 98 and consistently above Euro 100 since July. Significant efficiency improvements have been made to the ProfumeriaWeb portal (acquired on 09/29/2022), resulting in substantial cost savings and ongoing operations that have brought EBITDA to -

82,000 Euros compared to -660,000Eurosfor the entire 2022. The second half of the year leaves us strongly confident: logistics operations in Nola have been operational since July, leading to significant cost savings; in October, the launch of the new website is planned, with additional cost savings and the possibility to initiate marketing campaigns to further drive growth. The Pharmasi portal (acquired on 11/11/2022), has shown revenue growth (+14% YoY) thanks to the many synergies and optimizations put in place by the joint work team with Farmacosmo; furthermore, aligning rates with those of Farmacosmo, significant savings have already been recorded. The Bau Cosmesi portal (acquired on 02/02/2023) has grown more than 130% over the previous year, and numerous initiatives have been put in place that will enable the brand to further establish itself in the PET segment: suppliers and available products on the portal have increased, and it will also sell dietary supplements for pets.

Overall, the Group's portals recorded about 11 million visitors in the six-month period with a total number of items sold of about 4.6 million.

Strategic initiatives for the development of physical pharmacies and digital services (ContactU.it, the telepsychology platform) reflect the initial structural and marketing investment costs. ContactU, launched in June 2023, is growing day by day: in early July we launched parental and couples telepsychology services. As of now, the platform boasts more than 100 active professionals, more than 1,000 therapies conducted and the launch of the first B2B services called 'the Psychological Wellness in the company', thanks to 'the agreement with some companies.

We look forward with confidence to the second half of the year, which will be characterized by the typical seasonality of online commerce, which records the principal volumes in October, November and December".

Key consolidated results as of June 30th 2023

Consolidated Sales Revenues amount to approximately Euro 36,7 million, showing a growth of 14% compared to approximately Euro 32,1 million in the same period of the previous year. The result is mainly related to the growth of the retail channel2 (+28% YoY), and can be attributed to the organic growth of the farmacosmo.it portal and the contribution of the group's new portals. Notably, the first half of 2023 witnessed excellent progress for the www.baucosmesi.itportal, acquired in February 2023, with revenues reaching approximately Euro 240,000, an increase of over 130% compared to the previous year.

On the other hand, the B2B channel saw a decline (-17% YoY), resulting in B2B turnover accounting for 33% of consolidated revenue as of June 30, 2023 (compared to 56% at the time of listing). This reflects the continued focus of Farmacosmo Group on its core and more profitable business segments, retail, and digital services.

Costs for services amount to 5,250 thousand Euro:with an increase in Farmacosmo S.p.A. alone (+17% YoY), influenced not only by organic growth (increased marketing and transportation expenses) but also by the costs associated with being a listed company. These costs impacted the previous fiscal semester for only one quarter, considering the company's listing took place at the end of March 2022. Additionally, the increase is mainly attributable to the consolidation of subsidiaries, which nevertheless benefit from numerous cost synergies such as transportation and packaging costs, whose rates are now aligned with those of the Parent Company.

Please note that as of March and July, respectively, the Bau Cosmesi and ProfumeriaWeb logistics have been hosted at the Parent Company's logistics platform in Nola, resulting in significant cost savings and operational synergies due to the centralization of distribution activities. Both Bau Cosmesi and Profumeriaweb are managed with the proprietary software "Delivery Manager".

Personnel costs amounted to 2,032 thousand Euro. The increase in Farmacosmo S.p.A. alone, approximately 37%, is mainly attributable to the need to expand the workforce by strengthening key management through the hiring of the Chief Financial Officer and other professional figures in various sectors.

• The retail channel consists of the following portals: www.farmacosmo.it, www.profumeriaweb.com, www.pharmasi.it, www.baucosmesi.it

This expansion was in line with previously planned investment initiatives and growth objectives, primarily occurring in the second half of 2022. The additional increase can be attributed to the inclusion in the scope of consolidation of the subsidiaries, which were however downsized by virtue of the centralization of some activities in the Parent Company.

Consolidated EBITDA as of June 30th 2023 amounted to approximately Euro 30 thousand (-88% YoY), positively impacted by Farmacosmo S.p.A for Euro 319 thousand (+34% YoY). Adjusting the EBITDA from the impact of one-off cost components (mainly related to Vin.Ci. S.r.l.), the Company would report an Adjusted consolidated EBITDA of approximately Euro 150,000.

Many cost and revenue synergies have already started to show results, considering that Vin.Ci. S.r.l. (ProfumeriaWeb portal) reported an EBITDA of approximately -82,000 Euros in the first half of 2023. The Bau Cosmesi portal, just 4 months after the acquisition, already shows a positive EBITDA of about 2 thousand Euro despite the numerous investments and the full startup phase. Strategic initiatives for the development of physical pharmacies ( Innovation Pharma and its subsidiaries) and the development of digital services (the launch of ContactU, the telepsychology service) negatively impact by approximately 200,000 Euros due to their startup phase and initial structural costs.

Depreciation and amortization amounts to approximately 1,556 thousand euros, marking a 318% increase compared to the same period of the previous year. The increase is related to the capitalization of listing costs on Euronext Growth Milan and the depreciation generated by the consolidation of investments, the latter not present in the previous period.

The consolidated operating result as of June 30, 2023, records a loss of Euro 2,100 compared to a net loss of Euro 286 thousand as of June 30, 2022, significantly impacted by the aforementioned depreciation.

The Farmacosmo Group closes the first half of 2023 with a net loss of Euro 1,730 thousand.

Consolidated net financial debt amounts to 1,3 million Euros compared to a positive cash position of 5,2 million Euros as of December 31, 2022. This is due to the movement in working capital, influenced by a significant reduction in liabilities to suppliers of approximately 4,2 million Euros and an increase in inventory of approximately 1,7 million Euros, mainly as a result of the direct purchase of key high-margin products. In addition, the period was characterized by investments made for the launch of the ContactU telepsychology platform and to support the relaunch of ProfumeriaWeb.

Significant events after the end of the period

On August 3, 2023, it was announced that Farmacosmo and Laboratorio Farmaceutico Erfo S.p.A. ("Erfo"), Innovative SME and benefit corporation operating in the nutraceutical sector, both listed on Euronext Growth Milan of Borsa Italiana, have entered into a binding agreement to acquire the entire share capital of FRCM1 S.r.l. ("Target," "FarmaWoW"), owned by MP Holding S.r.l., which is attributable to Dr. Maria Palomba. The Target company is the owner of the FarmaWoW Portal, an e-commerce platform specializing in the Pharma&Beauty sectors with over 43,000 products in its catalog.

The transaction involves the sale of 100% of the Target's share capital for a consideration of EUR 310,000, subject to the application of a price adjustment mechanism in favor of the buyer based on the PFN as of the closing date, expected by the essential deadline of September 30, 2023.

The ownership will be divided as follows: 51% by Farmacosmo, which will have control, and 49% by Erfo. The Company will be managed by a Board of Directors consisting of three members,with two designated by Farmacosmo (including the CEO) and one by Erfo (Chairman of the Board of Directors).

It is also noted that the price will be paid in two installments:

• the first, amounting to Euro 136,200.00, will be paid in cash on the Closing Date, with EUR 69,462.00 being borne by Farmacosmo and EUR 66,738.00 by Erfo.
• The remaining amount will be paid upon the determination of threshold values preceding the determination of any price adjustment. The portion to be paid by Farmacosmo will be settled through the transfer of Farmacosmo shares, conventionally valued at EUR 2.25, while the Erfo portion will be paid in cash.

For any further details please refer to the Press Release issued on August 3rd 2023.

Foreseeable development of management

The first six months of 2023 have shown a particularly challenging socioeconomic and market context significantly influenced by inflationary impacts, geopolitical tensions related to the Russia-Ukraine conflict, and frequent interest rate hikes by the ECB and all central banks.

The future scenario incorporates the effects of the gradual implementation of measures outlined in the National Recovery and Resilience Plan (PNRR) but also includes risks associated with the future evolution of the geopolitical situation due to the Russian military intervention in Ukrainian territory and the inflationary environment, which represents a significant element of macroeconomic uncertainty.

Despite this challenging context, the Farmacosmo Group has continued to pursue its Industrial Plan by entering the pet market through the acquisition of the 'baucosmesi' portal in February 2023 and venturing into the digital services arena with the launch of ContactU in March 2023, a digital platform specializing in online psychology and psychotherapy services.

The first six months of 2023 witnessed the consolidation of the Farmacosmo Group in the retail channel (the portals www.farmacosmo.it, www.profumeriaweb.com, www.phàrmasi.it, www.baucosmesi.it), accounting for approximately 67% of the total turnover. In the second half of the year, further consolidation of these portals is expected due to the seasonal nature of the business and the anticipated revenue growth from the new portals, driven by an increase in active customers and average order value (AOV).

Lastly, the second half of the year 2023 will be characterized by the typical seasonality of the online commerce market, with the main volumes occurring in October, November and December.Additionally, the second half of 2023 will see the continued development of the online telepsychology platform ContactU with the launch of couple and parental counseling services in July 2023, as well as the development of the FarmaWoW platform.

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The company announced today that it has received the resignation of its independent director, Giuseppe Vita, from the position of director of the company's board, effective immediately. The resignation was cited for personal reasons, due to an intensification of his personal commitments. The company acknowledges and expresses appreciation for the work Dr. Giuseppe Vita has performed thus far. The Board of Directors will take the necessary steps, in accordance with applicable laws and the company's bylaws, to address the resignation and will promptly communicate this to the market.

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This press release is available on the www.farmacosmoinvestors.comwebsite, section "Investors/Press Releases" and on the authorized storage mechanism "eMarket Storage" (www.emarketstorage.com).

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BALANCE SHEET

(Data in euro/000)	June 30th 2023	December 31st 2022	Variation %
Intangible fixed assets	15,968	16,287	-2.0%
Tangible fixed assets	524	483	8.6%
Financial fixed assets	131	626	-79.1%
Net Fixed Assets	16,623	17,396	-4.4%
Inventories	6,421	4,731	35.7%
Trade receivables	5,454	4,930	10.6%
Trade Payables	(10,272)	(13,619)	-24.6%
Trade working capital	1,604	(3,958)	-140.5%
Other current assets	130	429	-69.6%
Other current liabilities	(1,132)	(587)	92.8%
Tax receivables and payables	1,910	1,485	28.6%
Accrued liabilities and deferred income	(249)	(403)	-38.3%
Net working capital	2,264	(3,034)	-174.6%
Reserves for contingencies and other	(26)	(26)	1.4%
charges
Employee termination indemnities	(593)	(536)	10.7%
Net invested capital (uses)	18,267	13,800	32.4%
Due to banks	4,433	1,870	137.1%
Other financial payables	11	2,431	-99.5%
Financial receivables	(294)	(2,667)	-89.0%
Cash and cash equivalents	(2,831)	(6,851)	-58.7%
Net Financial position	1,319	(5,217)	-125.3%
Share capital	3,481	3,009	15.7%
Reserves	12,590	16,394	-23.2%
IX - Profit (loss) for the year	(1,730)	(2,005)	-13.7%
Shareholders' equity	14,340	17,398	-17.6%
Minority Shareholders' Equity	2,608	1,619	61.1%
Total Shareholders' Equity	16,948	19,017	-10.9%
Total sources	18,267	13,800	32.4%