MPH Health Care : Interim Report 2022

Health

Care AG

INTERIM 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 from the high-growth segments of the health care market and the real estate industry. The health care market (served by MPH's investments, among others) includes both the segments financed by health insurance companies ("first healthcare market") and the privately financed segments (so-called "second healthcare 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
				Care AG
SEGMENTS	BEAUTY	PHARMA	REAL	ESTATE
COMPANIES	M1 KLINIKEN AG		CR CAPITAL AG
		HAEMATO AG
AREAS	Plastic and	Medical products	Integrated real estate
aesthetic	and medical devices	investment manager
BUSINESS	treatments	in the areas:	Project Development
and surgery	"Specialty Pharma" and
	New residential construction/
			"Lifestyle & 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.........................................................................................................................	24
5. Economic outlook.....................................................................................................................	24

IFRS Interim Financial Statement.......................................................................................................	27
IFRS Shortened Annex (notes) ...........................................................................................................	33

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

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4	Brief an die Aktionäre

Dear Shareholders,

Ladies and Gentlemen

the German economy is moving through difficult times in 2022. The buoyant forces from the lifting of pandemic restrictions, the aftermath of the Corona crisis and the shockwaves from the war in Ukraine are creating opposing economic dynamics. Actually, Germany should be in a post-Corona boom these weeks. At least that's what most economic experts promised at the beginning of this year. But since then the world has changed. Russia has launched a war on Ukraine, the price of gas has skyrocketed to historic highs, inflation is marching towards double-digit rates and material shortages have worsened. In addition, central banks have begun to tighten the monetary reins. Consequently, there is no sign of a post-Corona boom. Instead, the German economy is on its way into recession.

Unfortunately, the share prices of MPH Health Care AG's listed investments have not been spared from these restrictive developments. Due to the (non-cash) fair value measurement of the investments as at the reporting date of June 30, 2022, MPH posted an after-tax loss (in accordance with IFRS accounting) of EUR 36.0 million, compared with an after-tax profit of EUR 23.5 million for the same period in the previous year.

In the first six months of 2022, operating income decreased from EUR 24.5 million to EUR 0.3 million due to the lack of fair value gains on financial assets.

Equity decreased by 18.7% to EUR 156.3 million compared to 31.12.2021. The net asset value (NAV) per share decreased accordingly from EUR 52.49 to EUR 36.51. The equity ratio decreased only very slightly from 97.1 % as of December 31, 2021 to 96.8 % as of June 30, 2022 and still represents a very high value and is thus an expression of MPH's healthy capital structure.

Due to the current uncertainties caused by the Ukraine crisis, rising inflation as well as increasing energy prices, our listed subsidiary M1 Kliniken AG decided at its Annual General Meeting on July 13, 2022 not to pay a dividend in order to strengthen liquidity. The Annual General Meeting of the second listed subsidiary CR Capital AG was held on May 31, 2022. There, it was decided to increase the dividend from EUR 1.50 to EUR 2.50 per dividend-bearing share as a result of the pleasing business and earnings development in 2021. As in the previous year, the tax-free dividend can be received in cash or in the form of shares in the company at a subscription price of EUR 17.50, at the discretion of the shareholders.

In order to have sufficient liquidity for further growth and expansion of the investments, the Annual General Meeting of MPH Health Care AG on July 14, 2022 decided not to distribute a dividend and to carry forward the balance sheet profit for the 2021 financial year in full.

The operational development of our two listed investments in the first half of 2022 is satisfactory and in line with expectations.

Brief an die Aktionäre		5

M1 Kliniken AG

IFRS consolidated revenues in the first half of 2022 amounted to EUR 138.7 million after EUR 164.9 million in the first half of 2021. However, it should be noted that the "Trading" segment included one-off special effects in the previous year from sales of COVID rapid antigen tests worth nearly 25 million. These sales could not be repeated in the current financial year. Compared to the first half of 2020, sales in the "Trade" segment increased by increased by 4.5 %.

The "Beauty" segment contributed EUR 27.9 million to sales - an increase of over 15 % compared to the previous year's value. It became clear that Corona and all the measures associated with it do not have a lasting negative impact on the "Beauty" segment. Thus, M1 was able to increase the number of beauty treatments performed in the past 1st half of 2022 by 16 % compared to the previous year to now 189,000 treatments (previous year 163,000). M1 Kliniken AG continues to grow and opened four new locations in Germany and abroad in the first half of 2022 and has a practice network of 50 locations as of June 30, 2022. Further locations in Germany and abroad are in preparation.

The operating result (EBIT) for the reporting period totals EUR 4.5 million. In the previous year, the M1 Group achieved an EBIT of EUR 7.1 million, whereas the relatively high earnings contribution of the COVID antigen rapid tests in the first half of 2021 must be taken into account.

CR Capital AG

Our second direct listed investment, CR Capital A, also continued on its successful path in the first half of 2022 and continued to grow profitably. CR Capital AG is an investment company with focus on investing in innovative and high-growth technology companies. The purpose of the company is not operational business, but rather the targeted selection of company investments and their development. CR Capital prefers to develop companies with significant earnings and value growth potential in the area of sustainable business.

In the first half of 2022, CR Capital was able to increase its total operating performance (including income from investments) by around 9% from EUR 63.5 million to EUR 69.0 million. The result from ordinary activities (EBITDA) also increased by around 9 % from EUR 62.4 million to EUR 67.7 million. The equity ratio is stable at over 97 %.

The first half of 2022 has been positive for our investments and they continue to develop steadily. The two segments "Health Care" and "Real Estate" have proven to be crisis-resistant. With the selection of the investment focus, MPH has diversified the risk in two growth markets. I am confident that this will once again have a positive effect on MPH's share price in the future. I would like to express my sincere appreciation 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 2022

Patrick Brenske

(Management Board)