Genomma Lab Internacional B de C : Q2 2023 Earnings Release

Q2-2023 Results

HIGHLIGHTS

Q2-2023 Sales increased by

Ps. 46.9 million; +1.1% year-on-year

Q2-2023 EBITDA

closed at

Ps. 920.1 million; a +3.2% increase year-on-year

Cash & Equivalents

closed at

Ps. 1.37 billion

as of June 30, 2023

Q2-2023 Net Debt to EBITDA

ratio closed at 1.40x;

The Company successfully refinanced its Long-term Debt (Local Bonds of

3 & 4 year maturities)

Capex Investmentsfor

the six months ended June 30, 2023 reached

Ps. 80.7 million.

Genomma Lab Internacional Reports

Second Quarter 2023 Results

Mexico City, July 26, 2023 - Genomma Lab Internacional, S.A.B. de C.V. (BMV: LAB B) ("Genomma Lab" or "the Company"), today announced its results for the second quarter ended June 30, 2023. All figures included herein are stated in nominal Mexican pesos and have been prepared in accordance with International Financial Reporting Standards (IFRS).

The following tables provide an abridged Income Statement. The margin for each figure represents its ratio to net sales and the percentage change in the second quarter 2023 as compared with the same period in 2022. As stated in Genomma's First Quarter 2023 results press release, the Company presents "like-for-like" top-linegrowth (excluding Argentina) to illustrate Genomma's performance in constant currencies:

	Q2 2023	% Sales	Q2 2022	% Sales Like-for-like	Var. %
Net Sales	4,370.5	100%	4,323.6	100%	+17.4%(2)	+1.1%
Gross Profit	2,664.8	61.0%	2,613.0	60.4%		+2.0%
Operating	871.1	19.9%	839.8	19.4%		+3.7%
Income
EBITDA(1)	920.1	21.1%	892.0	20.6%		+3.2%
Net Income	417.4	9.6%	404.7	9.4%		+3.1%

1. EBITDA defined as operating income before depreciation and amortization
2. Like For Like currency (excluding Argentina)

Comments from the CEO

Mr. Marco Sparvieri, Genomma Lab's Chief Executive Officer, commented:

"In Q2 2023, GLI experienced another strong quarter with a year-on-year increase of +17.4% in the top line (like for like currency, excluding Argentina). In MXN, the year-on-year growth was +1.1%, impacted by the appreciation of the Mexican Peso and a devaluation of 23% in Argentina. When excluding the effect of Argentina's devaluation, the top line saw a notable growth of +9.7% in MXN. The EBITDA margin reached 21.1%, a positive increase of 0.5 percentage points compared to the previous year. Our Cash Conversion Cycle (CCC) improved, with 95 days (-5 days compared to the previous year).

We are also making substantial progress towards our productivity target of delivering Ps. 1,800 million by 2027. In April '23, we successfully commissioned a new Suerox® line, resulting in annual COGS savings of Ps. 63.6 million and an increased manufacturing capacity of +96 million bottles per year. A national bidding process with our label suppliers concluded, delivering annual savings of Ps. 25 million. In total, our productivity projects have generated 216 MM in annual savings year-to-date."

Q2-2023 Results

KEY DATA

• Sales by Segment: OTC 50.8% PC 49.2%

New flavor launched in

Mexico

Product innovation

for

Tio Nacho®

Business Review

The following updates were relevant to Genomma strategic priorities in the context of continued volatility of the various currencies within those markets where Genomma operates, provided as follows: 1) "like-for-like" top-linegrowth (excluding Argentina) to illustrate the Company's performance in constant currency terms; and 2) consolidated top-linegrowth as expressed in Mexican Pesos.

Core Brands: Product Innovation and Portfolio Optimization

Our top markets demonstrated robust growth, with 74% of our business surpassing local inflation rates. Mexico reported a growth of +19%, USA +23%, LatAm +8.1% in a like-for-like basis. In terms of brands, our strategic focus on core brands continues to yield positive results, with 61% of our business gaining market share in their respective categories. Suerox® experienced a remarkable growth of +32% in like for like currency, excluding Argentina, followed by Tio Nacho® with +21%, Groomen® with +55%, Novamil® with +18%, Cough & Cold with +41%, Gastro with +16%, and Analgesics with +43%. However, challenges remain with Cicatricure® (-3%) and Asepxia® (-25%), which continue to require our attention.

Strong Sales Performance within Core Categories

Suerox®: a +32% increase*1/+30%2** year on year sales increase. We are thrilled to report that Suerox® had another exceptional quarter. The brand's performance in Mexico was particularly outstanding, achieving record high sell out of +44% in June, growing share, year on year. In Chile, the brand continued to excel, reaching an all-time high market share of 18.8%. The US market witnessed a remarkable year on year sell out increase of +67%. Suerox's expansion into Peru, Brazil, Center America, and Argentina has also been ahead of initial forecasts, with these markets performing exceptionally well.

Hair Care: Tío Nacho® sales increased by +21%*/ +3%** year on year. The brand's growth can be attributed to the successful launch of "anti-canas" and the introduction of the 950ml size. Tío Nacho® has demonstrated robust growth across all markets, with Colombia up by 31%, Mexico by 34% and Brazil by 23%. Additionally, Chile reported a record high market share of 7.3% for the brand in June.

Blades & Razors: sales increased by +55%*/ +46%**. In June, the brand reached a record high market share of 7.8% in Chile, indicating strong market acceptance and showcasing our product superiority and effective communication strategy vis-à-vis the

1. * Like-for-like (Constant Currency, excluding Argentina)
2. ** Consolidated sales growth in Mexican pesos

Q2-2023 Results

18 Countries

&

+500,000 POS*

*Points of Sale

largest competitor in the category. The launch of Groomen® in Colombia was also successful, with a +7 percentage point increase in market share within the largest retail chain, "Grupo Éxito". Mexico witnessed a strong quarter with a growth of +23% year on year, driven by the launch of disposables.

Cough & Cold: sales increased by +41%*/ +22%** year on year achieving a record high market share for this category in nearly all markets where Genomma has a presence due to continued innovation and effective in-store execution during the winter season in the Southern Cone Cluster.

Gastro: second quarter sales increased by +16%*/ +10%** year on year, adversely impacted by a delay in the registration of the new molecules required to introduce new SKUs within Latin America. Genomma is actively addressing this issue to improve its gastro market position.

Infant Nutrition: sales increased by +18%*/ +18%** year on year, with robust growth across all core SKUs and an increased market share within their respective segments, notably a 6.5 percentage point increase in Novamil® Rice.

Analgesics (excluding Argentina): grew +43%*/ +32%** year on year. This growth can be attributed to several factors, including the success of X-Ray® in Colombia, which achieved a record high market share of 8.7% and secured the #3 position in the category. Our expansion into Chile and Ecuador yielded positive results, with sales increasing by +224%* and +120%* year on year, respectively. In Mexico, the turnaround plan implemented for Q2 in Alliviax® drove a top-line growth of +39%**, supported by Allitriple®, with sales up +61%** year on year.

Hot Spots

Skin Care: Cicatricure® faced a slight decline of -3%*/-18%** year on year. The brand's performance was impacted by the delayed launch of new line extensions due to fill-rate issues. Teatrical® also declined by -14%*/-23%** year on year, primarily due to fill-rate challenges. Asepxia® faced a decline of -11% /-37% year on year, despite implementing a turnaround plan during second quarter 2023.

Productivity in Manufacturing & within the Supply Chain

We are pleased to report significant progress in our productivity initiatives. In February 2023, we committed to achieving a total of Ps. 1,800 million in productivity savings by 2027. Year-to-date, our productivity efforts have yielded a total of Ps. 216 million in annual savings. Our San Cayetano plant is progressing in line with our expectations.

Q2-2023 Results

Second rating

improvement in the

past 3 years

During Q2, we successfully commissioned a new Suerox® line, leading to a significant improvement in our manufacturing capacity by an additional +96 MM bottles/year. This expansion has also contributed to a reduction of Ps. 63 million in Suerox's COGS, resulting in substantial annual savings. In Q2, we concluded a project focused on optimizing our product labels, which has resulted in a remarkable cost reduction of - 55%, translating to annual savings of Ps. 25 million. By consolidating our label production to only two suppliers from the previous 18, we have significantly reduced complexity and costs associated with this aspect of our operations.

Sustainability and Corporate Culture

Genomma Lab's ESG rating within the MSCI ESG Index was upgraded during the quarter to 'BBB' from 'BB', relative to the pharmaceutical industry. This represents Genomma's second rating increase in the past three years. MSCI is a leading provider of critical decision support tools and services for the global investment community.

Second Quarter of 2023 Reported Results, in MXN

Consolidated Results

Second quarter 2023 Net Sales reached Ps. 4.37 billion; a +1.1% year on year increase representing the Company's eighteenth consecutive quarter of sales growth despite continued macroeconomic adversity and the strengthening of the Mexican Peso relative to the U.S. dollar.

Second quarter 2023 EBITDA margin reached 21.1%; a +3.2%, or +50 bps, year on year margin increase primarily attributed to a favorable product mix and strong cost and expense controls. FX headwinds from a stronger Mexican Peso and Argentina hyperinflationary accounting effects adversely impacted the year-over-year comparison of Company's profitability.

Genomma provides a breakdown of its second quarter 2023 top-line performance below, to provide context on the contribution of Genomma's Hyperinflationary Subsidiary relative to the Company's consolidated top-line results.

Q2-2023 Results

MEXICO

Sales in MXN: 2.08 billion

EBITDA Margin: 18.7%

Excluding Genomma's Hyperinflationary Subsidiary, consolidated total sales would have increased by 9.7% year-on-year when expressed in Mexican Pesos.

The application of IFRS-21 and IFRS-29 rules results in a negative net effect on the second quarter 2023 when adding inflation during the quarter to the cumulative Q1-Q2 Argentina figures when translated applying FX rate depreciation at the close of the quarter.

Please refer to Genomma's press release "Impact to the Company's financials from the adoption of new Accounting Standards (April 29, 2018)"

Mexico

Second quarter 2023 Mexico sales increased by +19.4% year on year, to close at 2.08 billion pesos. The successful execution of the Company's strategy based on core brand line extensions and strong core brand sales resulted in: a +19% year on year increase in Suerox®; +88% year on year increase in XL3®; +35% year on year increase in Tio Nacho®; +31% year on year increase in Tukol® and a +35% year on year increase in Alliviax®.

EBITDA margin for the quarter closed at 19.4%; a 70 bps year on year contraction. Margin contraction was attributed to a one-time cost related to the Company's transition from third party manufacturers into its own manufacturing facility.