MPH Health Care : Interim Report 2021

Health

Care AG

INTERIM REPORT

2021

2

Health

Care AG

Guiding principle

As an investment company, the strategic focus of MPH Health Care AG's activities is on companies from the high-growth segments of the health care market and the real estate industry. The health care market includes both the segment financed by health insurance companies ("first health care market") and the privately financed segment (so-called "second health care market"). Considering the demographic development in Germany and Europe, we assume that the first and second health care markets will continue to grow in the coming years. A society that is getting older due to increasing life expectancy needs a stable supply of medication over a longer period of time. In addition, health and body awareness and the demand for medical-aesthetic services are increasing in old age. MPH wants to exploit the resulting potential by working in partnership with its portfolio companies.

The aim is to generate profitable growth in the companies through active further development, thereby increasing the value of the respective portfolio company itself and the enterprise value of MPH Health Care AG. However, MPH Health Care AG is not exclusively focused on the health care and real estate markets. There are also investment opportunities in other high-growth sectors, we would like to exploit and expand upon.

Key areas of MPH Health Care AG

LISTED

				Health
SEGMENTs				Care AG
BEAUTY	PHARMA	REAL	ESTATE

COMPANIES

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 and
	New residential construction/
		aesthetics
		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

Letter to the shareholders........................................................................................................................	4
Net Asset Value of MPH Health Care AG................................................................................................	6
MPH on the capital market......................................................................................................................	7
Short profile of of investments................................................................................................................	8
M1 Kliniken AG.................................................................................................................................	8
HAEMATOAG.................................................................................................................................	10
CR Capital AG.................................................................................................................................	12
Interim Group Management Report.......................................................................................................	15
1. Business model of the company...............................................................................................	16
2. Economic report...........................................................................................................................................	16
3. Business development and position of the company............................................................................	21
4. Forecast report............................................................................................................................	23
IFRS Interim Financial Statement..........................................................................................................	25
IFRS Shortened Annex (notes) ..............................................................................................................	31

Further information................................................................................................................................

35

4		Letter to the shareholders

Dear Shareholders,

Ladies and Gentlemen

Despite the ongoing restrictions caused by the coronavirus pandemic, MPH Health Care AG benefited from the recovery of the share prices of its listed investments in the first half of 2021. The company achieved a profit after tax (in accordance with IFRS accounting) of EUR 23.5 million. This compares to a loss after tax of EUR 32.7 million for the same period in the previous year. In the first six months of 2021, operating income increased significantly from EUR 5.8 million to EUR 24.5 million.

Equity increased by 11.7% to EUR 224.7 million compared to December 31, 2020 (EUR 201.3 million). The net asset value (NAV) per share increased respectively from EUR 47.01 to EUR 52.49. The equity ratio as of June 30, 2021 increased to 97.2 % (December 31, 2020: 95.5 %).

As a result of the increased valuations of the portfolio companies, the (reporting date-related) fair value measurements of the financial assets of MPH AG also improved, which led to an increase in earnings per share to EUR 52.49 (previous year EUR -7.62 per share). The previous year's earnings per share already took into account the capital reduction in a ratio of 10:1, which was resolved at the Annual General Meeting on 22 July.

Due to the current uncertainties associated with the Corona pandemic, our listed subsidiary M1 Kliniken AG decided at its Annual General Meeting in July 2021 not to pay a dividend in order to strengthen liquidity. The Annual General Meeting of the second listed investment CR Capital AG took place on August 19, 2021. CR Capital AG will propose a dividend to the Annual General Meeting, as it did in the previous year. The dividend can be distributed in the form of a cash dividend or by partially issuing new shares. In order to have sufficient financial flexibility for further growth and expansion of the investments, the Annual General Meeting of MPH Health Care AG on July 15, 2021 agreed not to pay a dividend and to carry forward the results of the 2020 financial year in full to new account.

M1 Kliniken AG

Following the implementation of a strict hygiene concept in the specialist centres and clinics of M1 Med Beauty, the practices and clinics in Germany as well as abroad were able to operate without restrictions for the most part (exception: Great Britain and Australia). There was a certain normalisation in the utilisation of the locations from March/April 2021 onwards. However, the ongoing vaccination campaign in the target age groups of M1 has led to some postponements. This is due to the intervals required between vaccination and treatment. Fortunately, however, it proved that Corona and all related measures do not have a lasting negative impact on the field of beauty medicine. Thus, M1 was able to increase the number of treatments performed in the first half of 2021 by almost 40% to 163,000 compared to the previous year.

Letter to the shareholders		5

In the meantime, M1 Kliniken AG also regained its well-known growth momentum and opened four new locations in Germany in the first half of 2021 (Kiel, Erfurt, Karlsruhe, Freiburg). Further locations in

Germany and abroad will follow. Thus, by the end of the year, specialist centres are to be opened in the UK (Glasgow), Australia (Brisbane) and the Netherlands (The Hague). This places M1 within reach of the target issued for the end of 2021 of operating 50 locations in its practice network.

Comparing the key financial figures for the first half of 2021 with those of the previous year is complex, as the first-time full consolidation of HAEMATO AG has added significant new revenue figures. In addition, M1 also consolidated its foreign M1 subsidiaries for the first time since the 2020 annual financial statements.

The IFRS consolidated financial statements of M1 Kliniken AG in the first half of 2021 totalled EUR

164.9 million. This compares with EUR 31.7 million in the first half of 2020. The Beauty segment accounted for EUR 22.0 million of this - an increase of around 40% compared with the previous year's figure. Equity increased from EUR 115.3 million on December 31, 2020 to EUR 136.4 million on June 30, 2021. The equity ratio is 69.7 % (December 31, 2020: 61.1 %).

With effect from July 1, 2020, MPH Health Care AG contributed all shares held in HAEMATO AG to M1 Kliniken AG as part of a capital increase through contributions in kind. The main purpose of this is to intensify the private label business in both companies. By joining forces in an entrepreneurial alliance, both companies will benefit even more from each other. HAEMATO AG thus represents an indirect shareholding (via M1 Kliniken AG).

HAEMATO AG continued its successful growth course in the first half of 2021. In the first six months of 2021, sales increased by EUR 35.7 million to EUR 151.5 million, which corresponds to growth of around 31%. The renewed sales growth was achieved primarily through a focus on special pharmaceuticals for chronic diseases and products related to aesthetic medicine. It also included the sale of medical products from the "diagnostics" segment.

The result from ordinary activities (EBITDA) for the first half of 2021 increased from EUR 2.1 million to EUR 8.0 million. The EBITDA margin rose disproportionately from 2.0 % to 6.7 %. The operating result (EBIT) increased significantly from EUR 1.2 million to EUR 7.2 million.

CR Capital AG

Our second direct listed investment, CR Capital AG, also continued its successful course in the first half of 2021. It was almost unaffected by the COVID-19 pandemic and continued to grow profitably. CR Capital invests in holdings along the real estate value chain which offer affordable housing and attractive investment opportunities. In the first half of 2021, CR Capital increased its total operating performance (including income from investments) by more than 50 % from EUR 40.1 million to EUR

63.5 million. The result from ordinary activities (EBITDA) rose disproportionately from EUR 37.9 million to EUR 62.4 million. Equity increased from EUR 178.0 million on December 31, 2020 to EUR 238.3 million on June 30, 2021. This corresponds to an increase of around 34%. The equity ratio is 97.8%

(31.12.2020: 94.4%).

The first half of 2021 has been positive for our investments and they are developing steadily. The two segments "Health Care" and "Real Estate" have proven to be crisis-resistant and generated further growth even during the crisis. By taking the right investment focus, MPH has diversified its risk in two growth markets. I am convinced that this will also have a positive effect on MPH's share price in the future. I would like to express my sincere thanks for the commitment of the employees of the MPH Group and wish everyone involved continued good health. I would also like to thank the Supervisory Board for this constructive cooperation during the reporting period.

Berlin, August 2021

Patrick Brenske

(Management Board)