Pierrel S.p.A.: THE BOARD APPROVES THE INTERIM FINANCIAL REPORT OF THE PIERREL GROUP AT 30 JUNE 2020

PRESS RELEASE

PIERREL S.P.A.

• THE BOARD APPROVES THE INTERIM FINANCIAL REPORT OF THE PIERREL GROUP AT 30 JUNE 2020
• THE MAIN ECONOMIC-FINANCIAL OBJECTIVES OF THE PIERREL GROUP FOR THE YEAR 2020 WERE UPDATED due to the COVID-19 pandemic
• • 
    Consolidated results at 30 June 2020, driven by sales of the Orabloc® drug, under the Pierrel brand:
    • Revenues of € 10.2 million (showing an increase of some 9% compared to 30 June
      2019, when they were some € 9.4 million).
    • EBITDA positive for about € 2.2 million, showing a marked improvement compared to 30 June 2019, when it was positive for about € 0.9 million.
    • EBIT positive for about € 1.6 million, showing a marked improvement compared to
      30 June 2019, when it was positive for about € 0.3 million.
    • Total consolidated net profit of approximately € 1.4 million, in contrast to 30 June 2019, when the Pierrel Group recorded a consolidated net loss of approximately € 0.1 million.
    • Consolidated net financial debt of about € 5.5 million (showing an improvement of some 19% compared to 31 December 2019, when it was about € 6.8 million).
    • Cash and cash equivalents of about € 6.6 million (an increase of about 19% compared to 31 December 2019, when they were approximately € 5.5 million).
  • The main economic and financial objectives for 2020 have been updated:
  • • estimated gross consolidated revenues of approximately € 19.1 million, a decrease of about 18% compared to about € 23.3 million previously estimated and disclosed to the market;
    • estimated positive consolidated EBITDA of about € 2.7 million, a decrease of approximately 37% compared to the about € 4.3 million previously estimated and disclosed to the market.

Capua (CE), 16 September 2020 - The Board of Directors of Pierrel S.p.A. ("Pierrel" or the "Company"), global provider of services for the pharmaceutical industry listed on the MTA segment of Borsa Italiana (Ticker: PRL) examined and approved today the interim financial report of the group headed by Pierrel S.p.A. (the "Pierrel Group" or the "Group") at 30 June 2020, which includes the condensed consolidated interim financial statements of Pierrel at 30

June 2020.

"During the first half of 2020, the activities of the Company and the Pierrel Group were characterized, on the one hand, by consolidation and, on the other, by the expansion of the reference markets for the sale of their products under the authorizations already registered in many countries. The results achieved and the measures taken promptly by the management to limit the effects of the COVID-19 pandemic confirm that the Pierrel Group has achieved a more than satisfactory organizational efficiency and is now able to adapt in a timely manner to ensure the necessary flexibility to face the consequences of events that are both unmeasurable and of global impact ", stated the Chief Executive Officer and General Manager of the Pierrel Group, Mr

Fulvio Citaredo. "In particular, we report with satisfaction that the results achieved by the Pierrel Group at 30 June 2020 are in line with the forecasts approved on 26 February 2020 by the Company's Board of Directors. Nonetheless, the effects of the ongoing pandemic obviously forced us to review the main economic-financial data (revenues and EBITDA) previously estimated, but we believe that the characteristics of the Pierrel Group, its managerial and operational structure, as well as its products allow us to forecast significant operating results, both in absolute value and as a percentage of the value of production, and this even considering that the recovery of the market has only recently begun. The foregoing confirms the validity of the strategy implemented and represents the best motivation to continue along the marked path".

The following is a brief description of the results at 30 June 2020 of the Pierrel Group, consisting of the parent company Pierrel and the subsidiary Pierrel Pharma S.r.l. with sole shareholder ("Pierrel Pharma") and of the Company.

Consolidated results at 30 June 2020

The Pierrel Group closed the first half of 2020 with consolidated revenues of about €10.2 million, in line with the plan's forecasts and up by about 9% compared to the about € 9.4 million recorded in the corresponding period of 2019, and a positive consolidated EBITDA (gross operating result) of about € 2.2 million, in line with the plan's forecasts and significantly improved compared to the corresponding period of the previous year, when it was positive for about € 0.9 million. The increase in consolidated revenues recorded in the first half of 2020 compared to the corresponding period of 2019 is attributable to the increase in the amount of products produced and invoiced, in particular for Pierrel dental anesthetic, Orabloc® (Pierrel Group's flagship product). Also a further reduction in the incidence of production costs due to the important efficiency activities initiated by Pierrel management cumulated to the previously mentioned increase, with a consequent positive effect on the gross operating result.

Below is an analysis of the business and operating results in the first half of 2020 of the three divisions of the Pierrel Group: the CMO operating Divisions, headed by the parent company Pierrel, and Pharma, headed by the subsidiary Pierrel Pharma, as well as the Holding Division, also headed by the parent company Pierrel.

The CMO Division posted total sales, before intercompany eliminations, of € 8.4 million for the first half of 2020, in line with the forecasts and slightly down (about 4%) on the figure for the same period of 2019, when it was around € 8.8 million.

The EBITDA of the CMO Division in the first half of 2020, also before intercompany eliminations, was positive for about € 1.5 million, in line with the forecasts and down of some 14% on the figure for the same period of 2019, when it was about € 1.7 million.

The reduction in the total sales and EBITDA of the CMO Division at 30 June 2020 compared to the corresponding period of 2019, already foreseen in the drafting of the 2020-2022 industrial plan approved by the Board of Directors at the meeting of 26 February 2020, is a direct consequence of the reduction in the total sales recorded by the Division towards third party customers, the effects of which are however mitigated by the increase in sales during the half year to the subsidiary Pierrel Pharma.

The Pharma Division posted total sales, before intercompany eliminations, of € 7.1 million for the first half of 2020, in line with the forecasts and an improvement of around 11% with respect to the figure recorded on 30 June 2019, when it was around € 6.4 million.

The EBITDA of the Pharma Division in the first half of 2020, also before intercompany eliminations, was positive for about € 1.6 million, in line with the forecasts and up of some 53% on the figure for the same period of 2019, when it was positive for about € 1 million.

The increase in revenues and, consequently, in the profitability of the Pharma Division in the first half of 2020 compared to the corresponding period of 2019 is attributable to the increase in sales, in particular of the Orabloc® articaine-based dental anesthetic, recorded in the reference period in the Eurasian market and, more significantly, in the United States.

The Holding Division, which operates exclusively in the provision of administrative services and in the management of the holding owned by the Company in Pierrel Pharma, as well as in the management of the activities and services to Pierrel as a listed company, recorded a negative EBITDA in the first half of 2020 of about € 0.8 million, in line with the plan forecasts and the corresponding period of the previous year.

The Pierrel Group recorded a positive EBIT (operating result) at 30 June 2020 of about € 1.6 million, after amortisation of around € 0.6 million, a more than significant improvement on the figure of 30 June 2019, when it was positive for about € 0.9 million, after amortisation of around € 0.5 million.

In addition, it should be noted that the Pierrel Group at 30 June 2020 recorded net financial expenses of about € 0.2 million (a decrease compared to the value of net financial expenses at 30 June 2019, when they were equal to about € 0.4 million). This item also includes net notional financial income from discounting and from currency adjustment, totaling around € 0.1 milion, linked to the payable (stated in US dollars) still due from Pierrel to the American customer Dentsply International Inc. of around € 6.0 million at 30 June 2020, by way of interest and capital stock.

In light of all the above, at 30 June 2020 the Pierrel Group recorded a consolidated net profit of about € 1.4 million, in contrast to the consolidated net loss recorded at 30 June 2019 for an amount of about € 0.1 million.

The net financial debt of the Group at 30 June 2020, which includes a current financial debt of about € 2.4 million (about € 1.8 million at 31 December 2019), amounted to some € 5.5 million, improving by about 19% compared to 31 December 2019, when it was about € 6.8 million. This improvement is mainly attributable to the increase in cash and cash equivalents due to the greater collections from customers recorded in the period.

The consolidated cash resources of the Pierrel Group at 30 June 2020 was about € 6.6 million, up by some 19% compared to 31 December 2019, when it was about € 5.5 million, as a result of the higher collections recorded in the reference half-year, net of the financial resources allocated by the Pierrel Group to carry out planned investments.

At 30 June 2020, the companies of the Pierrel Group had not issued any bonds.

At 30 June 2020 the Group's overdue debts to suppliers amounted to around € 0.9 million (around € 0.8 million at 31 December 2019) and those to social security institutions amounted to around € 0.1 million (around € 0.2 million at 31 December 2019).

During the first quarter of 2020, the consolidation scope of the Pierrel Group did not change significantly compared to the closing date of the previous year.

It is noted that the Group's operations are not influenced by a significant level of seasonality.

The consolidated balance sheet, the consolidated income statement and the consolidated cash flow statement of the Pierrel Group at 30 June 2020 are shown at the end of this press release. Pursuant to the CONSOB Communication DME/9081707 of 16 September 2009 these statements are

included in the Half-Year Financial Report of the Pierrel Group at 30 June 2020 and have been subject to limited-scope audit by Pierrel independent auditors.

Finally, it should be noted that, attached to this press release and in a specific section of the half- year financial report of the Pierrel Group at 30 June 2020, also the information at 30 June 2020 relating to the following are reported: (a) the financial position of the Company and the Pierrel Group; (b) overdue debt positions of the Company and the Pierrel Group; (c) the main changes in relations with related parties of the Company and the Pierrel Group; and (d) the state of implementation of the business plan. Please note that the inclusion of this information in the Company's annual and interim financial reports was requested by CONSOB as part of the provision of 23 May 2019 by which the Commission ordered the cancellation of the Company from the so-called "black list", thus eliminating the monthly disclosure obligations relating to the economic, equity and financial situation of the Pierrel Group pursuant to art. 114, paragraph 5, of Legislative Decree 24 February 1998, n. 58, as subsequently amended and supplemented (the "TUF"). For more information, see press release of 23 May 2019 published on the Company's website and available at www.pierrelgroup.com, Investor Relations/Press/Press Releases section.

Results of Pierrel at 30 June 2020

At 30 June 2019, Pierrel recorded revenues of some € 8.4 million, a worsening of about 5% on the

• 8.8 million achieved by the Company for the same period of 2019, and a positive EBITDA of € 0.7 million, a worsening of about 27% on the € 0.9 million at 30 June 2019. The reasons for these decreases are the same as illustrated previously in this press release in the section on the results achieved by the CMO Division at 30 June 2020.

At 30 June 2020, after having recognised amortisation of € 0.5 million and net financial expenses of

• 0.2 million, the Company posted a net profit of € 0.2 million, an improvement with respect to the net profit recorded by the Company of € 0.1 million at 30 June 2019, after recognition of amortisation of € 0.5 million and net financial expenses of € 0.3 million.

The net financial position of the Company at 30 June 2020 was negative for about € 0.2 million, in line with the figure recorded at 31 December 2019.

* * *

For a description of the main events occurred in the first half of 2020, please refer to the section "Significant events in the first half of 2020" of the Management Report included in the half-year consolidated condensed financial statements at 30 June 2020 of the Pierrel Group which will be made available to the public in the manner and terms provided for by law.

* * *

The results recorded by the Pierrel Group at the end of the first half of 2020 are in line with the forecasts approved on 26 February 2020 by the Company's Board of Directors. Nevertheless, in consideration of the orders already received from customers and whose delivery is expected by 31 December 2020, as well as the forecasts on the Pierrel Group's operating performance for the second half of the current year, inevitably negatively influenced by the effects deriving from the COVID-19 pandemic, Pierrel's Board of Directors had to update the main economic-financial objectives for 2020, lowering them with respect to those approved on 26 February 2020 and communicated to the market on the same date.

The new forecasts for 2020 approved by the Company's Board of Directors now include: