MPH Health Care : Annual Report 2022

Health

Care AG

ANNUAL REPORT

2022

2

Health

Care AG

GUIDING PRINCIPLE

As an investment company, the strategic focus of MPH Health Care AG's activities is on companies in the high-growth segments of the healthcare market and the real estate industry. The healthcare market includes both the segments financed by health insurance companies ("first healthcare market") and the privately financed segments (so-called "second healthcare market"). Against the background of demographic developments in Germany and Europe, we expect the first and second healthcare markets to continue to grow in the coming years. A society that is growing older due to increasing life expectancy needs a stable supply of medicines over a longer period of time. In addition, awareness of health and the body and the demand for medical and aesthetic services are increasing in old age.

MPH aims to exploit the resulting potential. The company works in partnership with its portfolio companies. The aim is to generate professional growth for the companies through active further development, thereby increasing not only the value of the portfolio company itself, but also the value of MPH Health Care AG. However, MPH Health Care AG is not exclusively focused on the healthcare and real estate market. There are also investment opportunities in other high-growth sectors, and we aim to exploit and expand their success.

KEY AREAS OF MPH HEALTH CARE AG

LISTED

			Health
SEGMENTS			Care AG
BEAUTY	PHARMA	REAL ESTATE
COMPANIES	M1 KLINIKEN AG		CR CAPITAL AG
	HAEMATO AG
AREAS	Plastic and	Specialty pharma,	Integrated real estate
aesthetic	medical devices	investment manager
BUSINESS	treatments	and products in the	Project Development
and surgery	area of lifestyle &
	New residential
		aesthetics
		construction/
			Private homes

UNLISTED

VENTURES

Cytostatic solutions for cancer therapies

European pharmacy distribution

Incubator for new ideas and business models (telemedicine, diagnostics, etc.)

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CONTENT

1.	Letter to the Shareholders	4
2.	Net Asset Value of MPH and Company Portfolio Overview	6
3.	MPH on the Capital Market	7
4.	Short profile of Investments	8
	M1 Kliniken AG	8
	HAEMATO AG	10
	CR Capital AG	12
5.	Report by the Supervisory Board	14
6.	Management Report	20
	1.	Business Model	20
	2.	Business Report	20
	3.	Business Performance	27
	4.	Supplementary Report and Forecast Report	29
	5.	Risk Report	29
	6.	Risk Report regarding the use of Financial Instruments	32
	7.	Report on Branches	33
	8.	Final declaration according to § 312 (3) AktG	33
7.	IFRS Financial Statements	35
8.	IFRS Annex	43

9. Further Information

67

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Letter to the Shareholders

DEAR SHAREHOLDERS,

LADIES AND GENTLEMEN,

In the financial year 2022, MPH Health Care AG was able to benefit from the strong performance of its investments and achieved a net income according to IFRS of 29.11 million euros, compared to a net loss of 8.96 million euros in the previous year. The operating result (EBIT) rose from EUR -9.07 million to EUR 29.56 million and equity increased from EUR 192.3 million to EUR 221.4 million. The net asset value (NAV) per share increased to 51.72 euros as of 31 December 2022 (prev. year EUR 44.92). The equity ratio as of 31 December 2022, at 93.4%, remains well above 90% (prev. year 97.1%) and thus impressively demonstrates the Company's balance sheet strength.

The net income for the year results mainly from the fair value gain of the financial assets as of the balance sheet date 31 December 2022. MPH Health Care AG is an investment company whose investments are reported under the balance sheet item "Financial assets" and are measured at fair value through profit or loss as of the balance sheet date.

In particular, the investments M1 Kliniken AG and CR Capital AG were successful in the past financial year, which was reflected accordingly in the share prices at the balance sheet date.

In the past financial year 2022, M1 Kliniken AG was able to further expand its market position in the field of beauty medicine and opened eight new medical centers in Germany and abroad. The opening of the Budapest (Hungary) site marked the start of expansion in Eastern Europe, whose target markets are considered lucrative by the company. Sales in the Beauty segment rose by 14.1% to over 60.2 mn euros (prev. year 52.8 mn euros). The EBIT margin in this segment increased from 9.8% in the previous year to 11.7%.

As expected, consolidated sales of the M1-Group decreased by around 9% to EUR 285.3 mn in the financial year 2022 (prev. year EUR 314.6 mn). This is due to the 14.0% decline in sales in the "Trade" segment to EUR 225.0 mn (prev. year EUR 261.8 mn) as a result of a reduced business volume with COVID-19 diagnostics. The operating profit 2022 (EBIT) of the M1-Group amounts to EUR 9.3 mn (prev. year EUR 12.1 mn) and earnings before taxes amount to EUR 10.2 mn in the fiscal year 2022 (prev. year EUR 14.4 mn).

Letter to the Shareholders

5

M1's equity increased by a further EUR 3.2 mn to EUR 143.1 mn as of 31 December 2022 (prev. year EUR 139.9 mn) and the equity ratio rose to 72.6% (prev. year 70.6%). The share price of M1 Kliniken AG increased by around 21% from 7.50 euros on 31 December 2021 to 9.06 euros on 31 December 2022.

CR Capital AG and its affiliates also remain on record track. Sales and earnings were again higher than in the previous year. They continue to benefit from the high popularity of their offerings in the markets for sustainable energy supply concepts, quality and cost-optimized living space, and capital investments for broad sections of the population. The company generated IFRS consolidated sales (reported as operating income) of EUR 79.4 mn (prev. year EUR 69.9 mn) and increased its earnings before interest, taxes, depreciation and amortization (EBITDA) by over 14% from EUR 66.5 mn in the previous year to around EUR 76.0 mn. Equity increased from EUR 240.8 mn to around EUR 314.0 mn as of 31 December 2022. The equity ratio remains at over 97%. CR Capital is increasingly involved in the areas of renewable energy supply and sustainable housing, whose markets have a volume of billions.

The share price of CR Capital AG decreased slightly from 33.40 euros on 31 December 2021 to 32.00 euros on 31 December 2022, after having been quoted at 40.60 euros at the end of May 2022, close to its old high from 2020.

We are confident about the development in 2023 despite the ongoing war situation in Ukraine and the increased energy costs. The approval of our own botulinum toxin for the M1/HAEMATO-Group's own brands continues to proceed according to plan. The application to conduct a clinical trial was submitted to the competent authorities at the end of January 2023. CR Capital AG is very well positioned with its vertically integrated investment portfolio in the areas of "sustainable energy supply concepts" and "quality- and cost-optimized housing". MPH can also systematically benefit from the positive developments of the investments in the coming years.

In order to have sufficient financial scope for the expansion of our investments, we will propose at the upcoming Annual General Meeting of MPH Health Care AG that the net profit for the financial year 2022 be carried forward in full to new account and that no dividend be distributed.

Finally, I would like to express my sincere thanks for the commitment of the employees of the MPH- Group and the trustful cooperation with the Supervisory Board.

Berlin, 8 May 2023

Patrick Brenske

(Management Board)