Medios : Quarterly Statement as of 30 September 2020

QUARTERLY STATEMENT AS OF 30 SEPTEMBER 2020

Medios AG: Further dynamic growth

• Revenue growth of around 22% in the first nine months of 2020
• Corona-relatedspecial effects continue to burden earnings - but third quarter earnings improve compared to second quarter of 2020
• Forecast for the full year confirmed

Medios AG ("Medios"), one of the leading Specialty Pharma companies in Germany, has continued its dynamic revenue growth in the first nine months of 2020 (9M 2020). Consolidated revenue from January to September increased by around 22% to €453m compared to the same period of the previous year (€372m). Consolidated earnings before interest, taxes, depreciation and amortization, adjusted for extraordinary expenses (EBITDA before extraordinary items), amounted to €10.2m (previous year's period: €14.1m). Consolidated earnings before taxes, adjusted for extraordinary items (EBT before extraordinary items), amounted to €8.0m (previous year's period: €12.8m). The disproportionate earnings performance in relation to revenue is due in particular to the corona-related special effects: The stockpiling that began in the first quarter as a result of the allocation of quotas for certain drugs was carried out at higher purchase prices and thus led to lower margins than planned. This effect continued in the second and third quarter. But compared to the weak second quarter, Medios shows a positive development for the third quarter 2020: Revenue rose by 23% to around €160m, and EBT before extraordinary items have significantly improved to €3.1m compared to the second quarter. Medios confirms the forecast for the 2020 financial year.

Significant events and developments in the reporting period

• Acquisition of Kölsche Blister GmbH
  With the acquisition of Kölsche Blister GmbH in the first quarter of 2020, Medios' business model was expanded with the service of patient-specific blistering. This is the patient- related repackaging of finished pharmaceuticals on individual request.
• Re-placementoversubscribed several times - free float over 60%
  In mid-May 2020, 600,000 shares of Medios AG were placed. The shares were sold to international institutional investors as part of a private placement. After a short time, the offer was oversubscribed more than three times. The shareholders were not diluted.

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• Initiation of coverage by Jefferies
  In May 2020, Jefferies Group LLC, the largest independent global full-service investment banking company headquartered in the USA, initiated the coverage of Medios AG and has been reporting on the Company's development since then.
• Financing measures
  In the first quarter, Medios has signed a syndicated loan agreement in the amount of €62.5m. As part of a cash capital increase successfully carried out at the beginning of June
  2020, Medios generated gross issue proceeds of around €53m excluding shareholders' subscription rights, which led to an increase in share capital of almost 10.0% to around €16.1m.
  The funds generated through the aforementioned capital-raising activities are intended to be used to finance the organic and inorganic growth and to make further acquisitions when required in order to benefit from the consolidation of the pharmaceutical market.
• Centralization of administration and rental of an additional building
  In April, the administrative units were consolidated at new premises in Berlin-Mitte. In addition, Medios signed a contract in July to rent another building with a total area of around 4,500m2 at an existing location in Berlin. In particular, the Company intends to establish additional laboratories for the production of patient-specific therapies and to optimize logistics. In addition, the majority of the operating activities in Berlin are to be concentrated at this new Medios location.
• Further development of mediosconnect
  Medios has further advanced the development and services of the digital platform mediosconnect. This self-developed platform connects doctors, health insurance companies and specialized partner pharmacies with each other and serves as an ordering and billing portal. mediosconnect simplifies the ordering and billing processes and thus contributes to an increase in efficiency in the health system.
  The number of users as well as the number of ordering and billing processes carried out is constantly increasing. This is partly due to the introduction of the software in another federal state (Mecklenburg-Vorpommern) in addition to Berlin.
  In a next step, Medios intends to establish an e-prescription-capable platform that offers added value for doctors, health insurance companies, specialized partner pharmacies and patients, so that both these stakeholders and Medios itself, can benefit from the increasing digitalization in the healthcare system.
• Successful implementation of the new indication hemophilia
  Due to the new legal regulation for the drug supply of hemophilia patients, effective from 1 September 2020, Medios was able to successfully start distribution in the previously inaccessible indication area. Such therapies must be administered to patients throughout their lives and are among the most expensive therapies worldwide.

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• Inclusion in the SDAX
  On 21 September 2020, Medios AG was included in the selection index of Deutsche Börse SDAX. The SDAX comprises the 70 largest companies below the MDAX in terms of market capitalization and trading volume.
• Growing number of employees
  As of 30 September 2020, the Medios Group had a total of 276 employees, 94 more than in the previous year (30 September 2019: 182 employees).

Significant events after the end of the reporting period

• Changes in the Executive Board with effect from 1 January 2021
  In October, the Supervisory Board of Medios AG decided to appoint Matthias Gärtner, CFO, additionally as Chairman of the Executive Board with effect from 1 January 2021. Furthermore, his Executive Board contract is shortly to be extended prematurely by two years to 30 June 2023. The acting Chairman of the Executive Board, Manfred Schneider, will not extend his contract, which is planned to expire on 31 December 2020, but will leave the Executive Board due to family reasons. Therefore, the Executive Board will consist of a three-member team with the other current members Mi-Young Miehler (COO) and Christoph Prußeit (CINO).
  As founder and major shareholder, Manfred Schneider will remain closely associated with Medios AG and is to become a key member of a new Advisory Board to be established for the Company. In addition, Manfred Schneider has already agreed to a voluntary six-monthlock-up agreement for the major part of his Medios shares.
• Research coverage extended
  Metzler Capital Markets initiated the coverage of Medios AG at the end of October and recommended the shares of the Company for purchase ("Buy"). In addition to Metzler Capital Markets, Medios continues to be covered by Berenberg, Jefferies, Kepler Cheuvreux and Warburg.

Financial performance and financial position

Unless otherwise stated, the following statements refer to the first nine months of the current 2020 financial year. In the first nine months of 2020, revenue of the Medios Group increased by 21.9% to around €453m compared to the same period last year (€372m). The largest growth driver was the Pharmaceutical Supply segment with a plus of €72.1m or 21.6% to €406.0m (previous year's period: €333.9m). The Patient-specific Therapies segment increased its revenue by €9m or 23.8% to €46.5m (previous year's period: €37.6m). Of this growth, €3.5m are attributable to the inclusion of Kölsche Blister GmbH revenue from the second quarter of 2020 onwards. Revenue in the Services segment increased by €0.1m or 103.9% to €0.3m (previous year's period: €0.2m). The segment generates external revenues with IT services for partner pharmacies.

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All revenues were generated almost exclusively within the Federal Republic of Germany. In line with revenue growth, the number of specialized pharmacies supplied increased significantly to around 330. The Company was thus able to notably expand its partner network in the first nine months of the year (31 December 2019: 200 partner pharmacies). Through the acquisition of Kölsche Blister GmbH in the first quarter of 2020, around 80 partner pharmacies were integrated into the network.

In the first nine months of 2020, EBITDA before extraordinary items decreased by €3.9m or 27.3% to €10.2m compared to the same period last year (€14.1m). EBT before extraordinary items fell by €4.8m or 37.5% to €8.0m (previous year's period: €12.8m).

Due to the above-mentionedcorona-related special effects, which led to higher purchase prices and thus to lower margins, EBITDA before special effects in the Pharmaceutical Supply segment decreased as a result from €8.5m in the first nine months of 2019 to €6.0m in the first nine months of 2020. EBITDA before special effects in the Patient-specific Therapies segment decreased slightly to €4.3m compared to €4.6m in the previous year, which is mainly due to higher internal billing. The Services segment achieved an EBITDA before special effects of €-0.1m, compared to €0.9m in the same period of the previous year. The previous year included one-off proceeds of €0.9m from the sale of the property in Berlin-Charlottenburg.

EBITDA and EBT were adjusted for extraordinary items due to stock options in the amount of €0.6m, expenses for M&A activities of €0.6m (EBITDA) and €0.9m (EBT), respectively, and the amortization of the customer base capitalized in 2018 following the acquisition of operating units of BerlinApotheke Schneider & Oleski oHG, as well as the addition of new customers through the acquistition of Kölsche Blister GmbH in the amount of €0.5 million.

The operating cash flow increased by €2.9m to €6.9m.

Total assets amounted to €208.9m as of 30 September 2020 (previous year: €116.6m). The increase is mainly driven by increased inventories for stockpiling as a result of the COVID-19 pandemic and the entry into the hemophilia product area, while trade payables increased in the opposite direction. The successful cash capital increase led to an increase in cash and cash equivalents as well as in equity, which amounted to €140.0m as of 30 September 2020. The equity ratio nevertheless fell to 67.0%.

Despite the continuing temporary corona-related effects, the third quarter of 2020 shows a significant improvement in both revenues and earnings compared to the second quarter of 2020: Revenue increased from €130m (Q2/2020) to €160m (Q3/2020). EBT before extraordinary items rose to €3.1m (Q3/2020) compared to the second quarter of 2020, when it was €1.2m.

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Outlook

Despite the challenging market environment, Medios continues to expect dynamic revenue growth. The Company assumes that the extraordinary corona-related special effects in connection with the quota allocation will continue in the fourth quarter of 2020 and will burden the Company's earnings.

According to the forecast revised on 5 August 2020, Medios expects consolidated revenue for the 2020 financial year - including the acquisition of Kölsche Blister GmbH in March 2020 - to amount to approximately €610 to 630m. In addition, Medios expects an EBITDA before extraordinary items of around €14.0 to 15.0m and an EBT before extraordinary items of around €11.5 to 12.5m. Furthermore, the Company remains optimistic that it will be able to reach the one billion € mark in revenues by 2023 at the latest.

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Key financials (IFRS)

In € thousand

Revenue

• Pharmaceutical Supply
• Patient-specificTherapies
• Services

Earnings before interest, taxes, depreciation and amortization (EBITDA)

Margin (in % of Revenue)

EBITDA without extraordinary expenses*

Margin (in % of Revenue)

• Pharmaceutical Supply
• Patient-specificTherapies
• Services

Consolidated earnings before taxes (EBT)

Margin (in % of Revenue)

EBT without extraordinary expenses*

Margin (in % of Revenue)

• Pharmaceutical Supply
• Patient-specificTherapies
• Services

Comprehensive income after taxes

Earnings per share (in €)

Undiluted

Diluted

Investments (CAPEX)

Cash flow from operating activities

• Extraordinary expenses
• • Expenses from share option programs
  • Amortization of the customer base
  • Other expenses M&A
  • Financial expenses M&A

Balance sheet total

Equity

Equity ratio (in %)

	9M 2020			9M 2019			Delta in %		Q3 2020			Q3 2019			Delta in %
	452,900	371,679	21.9			160,015	143,172	11.8
	406,044			333,938			21.6			143,970			129,661			11.0
	46,544		37,588		23.8			15,940		13,429		18.7
	312	153	103.9			106	83	27.7
	9,057	13,089	-30.8			2,972	6,019	-50.6
	2.0%	3.5%						1.9%	4.2%
	10,235	14,087	-27.3			3,760	6,375	-41.0
	2.3%			3.8%						2.4%			4.5%
	5,958		8,543		-30.3			1,829		3,181		-42.5
	4,340		4,620		-6.1			1,412		1,817		-22.3
	-63		924		-106.9			519		1,368		-62.1
	5,976	11,358	-47.4			1,802	5,457	-67.0
	1.3%	3.1%						1.1%	3.8%
	8,013	12,811	-37.5			3,122	5,965	-47.7
	1.8%		3.4%						2.0%		4.2%
	4,951		8,121		-39.0			1,476		3,038		-51.4
	3,528		4,020		-12.2			1,129		1,693		-33.3
	-466	670	-169.6			516	1,224	-57.9
	4,269	7,958	0.0			1,101	3,987	-72.4
	0.28			0.55			-49.1			0.07			0.27			-74.1
	0.27	0.54	-50.0			0.07	0.27	-74.1
	3,140	2,307	36.1			925	1,278	-27.6
	6,947	4,018	72.9			28	2,935	-99.1
	584	998	-41.4			195	356	-45.3
	503	456	10.3			175	152	15.5
	594	0			n/a	594	0			n/a
	356		0			n/a		356		0			n/a
	30/09/2020	31/12/2019			Delta in %
	208,945		116,567		79.2
	139,972		81,627		71.5
	67.0%		70.0%

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IFRS-group financial interim statement as at 30 September 2020

Statement of comprehensive income

In € thousand

Revenue

Change in stocks of finished goods and work-in-progress

Work performed and capitalized

Other income

Cost of materials

Personnel expenses

Other expenses

Earnings before interest, taxes, depreciation and amortization (EBITDA)

Depreciation and amortization

Earnings before interest and taxes (EBIT)

Financial expenses

Financial income

Consolidated earnings before taxes (EBT)

Taxes

Consolidated earnings after taxes

Total consolidated earnings

Undiluted earnings per share (in €)

Diluted earnings per share (in €)

9M 2020		9M 2019			Q3 2020			Q3 2019
452,900		371,679			160,015	143,172
45		462			32	440
17		97			0		-326
287		1,191			102		962
426,723		348,091			151,283	134,113
10,631		7,548			3,784			2,666
6,839		4,701			2,109	1,451
9,057		13,089			2,972	6,019
2,568		1,623			947	519
6,488		11,466			2,025	5,500
527		121			224	52
15		13			1			8
5,976		11,358			1,802	5,457
1,707		3,399			702		1,470
4,269		7,958			1,101		3,987
4,269		7,958			1,101	3,987
0.28		0.55			0.07	0.27
0.27		0.54			0.07			0.27

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Consolidated balance sheet

ASSETS
In € thousand		30/09/2020		31/12/2019
Non-current assets		45,548		37,136
Intangible assets		4,797		2,549
Property, plant and equipment	6,139	3,045
Right of use		34,391		31,260
Financial assets		220		283

Current assets			163,398			79,431
Inventories			32,064			16,053
Trade receivables			57,048			42,805
Other assets			6,839			4,787
Income tax receivables		191		165
Cash and cash equivalents				67,256				15,622
Balance sheet total			208,945			116,567
LIABILITIES
Equity
Subscribed capital			16,085			14,564
Capital reserves			103,828			51,273
Accumulated Group Result			20,058			15,789
Attributable to shareholders in the parent		139,972		81,627
company
Liabilities
Non-current liabilities			11,659			6,253
Financial Liabilities			6,578			2,577
Other provisions			968			0
Deferred tax liabilities			4,113			3,676
Current liabilities		57,314		28,688
Other provisions				388				501
Trade payables			48,987			12,882
Financial liabilities			1,236			3,664
Income tax liabilities			2,786			7,577
Other liabilities			3,918			4,064
Total liabilities			68,974			34,941
Balance sheet total				208,945			116,567

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Consolidated cash flow statement

In € thousand

Cash flow from operating activities

Net income for the year

Depreciation and amortization on non-current assets

Decrease/increase in provisions

Other non-cash expenses

Increase in inventories, trade receivables and other assets not attributable to investment or financing activities

Decrease/increase in trade payables and other liabilities not attributable to investment or financing activities

Financial result

Income/expenses from the disposal of assets

Income tax expense

Income tax payments

Net cash inflow/outflow from operating activities

Cash flow from investment activities

Payments made for investments in intangible assets

Payments made for investments in property, plant and equipment

Payments from disposals of tangible fixed assets

Payments from disposals of non- current financial assets

Payments for additions to the consolidated group

Interest received

Net cash outflow from investment activities

Cash flow from financing activities

Proceeds from equity injections

Proceeds from financial liabilities

Outflows from the repayment of financial liabilities

Interest paid

Repayments of the leasing liabilities

Net cash inflow from financing activities

Net change in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year

Cash and cash equivalents at the end of the financial year

	9M 2020		9M 2019	Q3 2020		Q3 2019
	4,269		7,958			1,101		3,987
	2,568	1,623			947	519
	-114		-50			-6		81
	584		998			195		356
	-30,857	-13,744			-26,053	-1,993
	34,835	4,337			29,489	-495
	512		108			223		43
	-1	-865			0	-865
	1,707		3,399			702		1,049
	-6,557		253			-6,570		253
	6,947	4,018			28	2,935
	-1,203	-1,496			-532	-1,381
	-1,937	-810			-393	104
	15	4,183			4	4,183
	62	54			21	54
	-1,163	0			0	0
	15		13			1		8
	-4,210	1,943			-899	2,967
	51,991		0			-19		0
	19,000		0			0		0
	-17,500	0			-17,500	0
	-735		-137			-308		-68
	-881		-349			-356		-88
	51,875	-487			-18,182	-155
	54,611	5,474			-19,054	5,747
	12,645	11,772			86,310	11,499
	67,256	17,246			67,256	17,246

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Consolidated statement of changes in equity

In € thousand

As at 01/01/2020

Net profit for 9M 2020

Benefits for employees settled with equity

Capital increase

Transaction costs from capital increase

As at 30/09/2020

As at 01/01/2019

Net profit for 9M 2019

Reserve for benefits settled with equity

As at 30/09/2019

In € thousand

As at 01/01/2020

Net profit for 9M 2020

Benefits for employees settled with equity

Capital increase

Transaction costs from capital increase

As at 30/09/2020

As at 01/01/2019

Net profit for 9M 2019

Reserve for benefits settled with equity

As at 30/09/2019

Subscribed capital			Capital reserve			Retained earnings
14,564		51,273		15,789
					4,269
	584
1,521		53,410
	-1,440
16,085			103,828			20,058
14,565		49,904		6,029
					7,958
	998
14,565	50,902	13,988
Attributable to			Equity
shareholders in the
parent company
81,627		81,627
4,269		4,269
584	584
54,931		54,931
-1,440	-1,440
139,972		139,972
70,499		70,499
7,958		7,958
998	998
79,455		79,455

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This quarterly statement was published on 12 November 2020.

Contact Medios AG Claudia Nickolaus

Head of Investor & Public Relations Heidestraße 9

10557 Berlin Germany

Phone: [phone]

Fax: [phone]

E-Mail:[e-mail]

Disclaimer

This notification contains forward-looking statements that are subject to certain risks and uncertainties. Future results may significantly deviate from currently expected results, specifically due to various risk factors and uncertainties such as changes in business, economic, and competitive circumstances, exchange rate fluctuations, uncertainties about legal disputes or investigations, and the availability of financial resources. Medios AG assumes no responsibility whatsoever for updating the forward-looking statements contained in this notification.

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