Fagron 2015 Semi-Annual Results

Ger van Jeveren, CEO

Jan Peeters, CFO

4 August 2015

Fine-tuning Fagron Strategy

Focus on Fagron Specialty Pharma Services

• Increased legislation and regulatory requirements

• Trend to outsource specialty pharma activities

• Decreasing number of competitors

• Increasing demand for customized medication

• Focus on acquisitions and on building our own cGMP FDA 503B facilities in the US

Focus on Fagron Trademarks

• Rapid worldwide introduction of Fagron Trademarks

• Strong investments in R&D-pipeline

Optimizations at Fagron Essentials

• Phase-out in 2015 of non-strategic, low-margin products with a low turnover ratio

• Sales impact of € 12 to € 15 million on annual basis

• Positive impact on profitability expected1

What is Specialty Pharma?

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Patient

Customized

medication

Produced in pharmacies or by GMP outsourcing facilities based on

scientific pharmaceutical knowledge

The designing, developing, producing

and marketing of customized

pharmaceutical products Alternative dosage

forms

Alternative dosage

strengths

Combination

therapy

What is Specialty Pharma?

4

• The designing, developing, producing and marketing of customized

pharmaceutical products

• Produced in pharmacies or by GMP outsourcing facilities based on scientific

pharmaceutical knowledge

Compounding AdmixtureReady to

AdministerPatient

Areas of Specialty Pharma

Dermatology

Sterile injectables

Trial medication

Intensive care / ER

Medication

shortages

Hormone

replacement

Veterinary

Oncology

Antibiotics

PediatricsPain management

Biologicals

Benefits of Specialty Pharma

6

Patient

Less side effects

More individualized approach

Customized medication

Enhance patient compliance

Drug shortages

Discontinued drugs

High-quality and cost effective alternative

New and unavailable therapeutic needs

Full pharmaceutical service

“Yes,

Specialty Pharma

enhances

medication

compliance

and

saves lives…

every single day!”

Fagron Specialty Pharma Business Model

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Fagron

Specialty

Pharma Services

Fagron Trademarks

Fagron Essentials

Raw materials

Excipients

Equipment

Supplies

Nuclear, Sterile and Non-

Sterile

Fagron Advanced Derma

SyrSpend® SF

Fagron Aseptic Pack

Fagron Specialty Pharma Services

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Nuclear

Sterile

Non-SterileTablets, capsules, liquids,

crèmes/ointments

Radioactive capsules,

radioactive injections,

radioactive seeds

IV-Bags, ampoules, vials,

TPN, cytostatics, syringes,

cassettes, easypumps

22 Fagron Specialty Pharma Services Facilities Worldwide

Belgium

Bornem (sterile and non-sterile)

France

Paris (non-sterile)

Marseille (non-sterile)

South Africa

Johannesburg (non-sterile)

Cape Town (sterile and non-sterile)

George (sterile and non-sterile)

Greece

Trikala (non-sterile)

Colombia

Bogotá (non-sterile)

Bogotá (non-sterile)

Cali (non-sterile)

Medellin (non-sterile)

Netherlands

Oud Beijerland (sterile and non-sterile)

Helmond (sterile and non-sterile)

Hoogeveen (sterile and non-sterile)

Oldenzaal (sterile and non-sterile)

Goes (sterile and non-sterile)

North America

Wichita, Kansas (sterile)

St. Louis, Missouri (non-sterile)

Arlington Heights, Illinois (non-sterile)

Tamarac, Florida (non-sterile)

Tampa, Florida (nuclear, sterile and non-sterile)

Las Vegas, Nevada (sterile and non-sterile)

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Win-Win-Win Strategy

Prescriber

PharmacistPatient10

Patient

Organizations

Government

Insurance Companies

Laboratories

Financial Highlights HY1-2015

Financial Highlights HY1-2015

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Turnover(in € million)

243.8

Gross margin(in € million)

161.3

REBITDA(in € million)

65.6

DA(in € million)

-11.7

+16.6%

+21.3%

+17.9%

Organic turnover growth of 8.5% or 2.6% at constant

exchange rates

Gross margin increased 260bps to 66.2% of turnover

Driven by strong growth at FSPS and Trademarks and

optimization of product portfolio of Essentials

REBITDA increased 30bps to 26.9% of turnover

EBITDA increased 50bps to 25.9% of turnover

DA increased € 4.5 million to € 11.7 million

€ 2.7 million was attributable to the purchase price allocation

of acquisitions+63.0%

Financial Highlights HY1-2015

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EBIT(in € million)

51.4

Financial result(in € million)

-14.3

Taxes(in € million)

-12.1

Net profit(in € million)

25.0

+11.9%

+34.5%

+11.6%

EBIT growth of 11.9% due to higher DA compared to HY1-14

Financial result increased due to an increase in net financial

debt and higher exchange rate differences

Revaluation of financial derivatives was € 0.5 million positive

Effective tax rate as a percentage of profit was 32.6%

High tax rate in the US

Net profit grew 2.2% to € 25.0 million

+2.2%

Financial Highlights HY1-2015

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OWC(in € million)

52.2

Net financial debt

(in € million)

455.6

Capex(in € million)

11.0

+18.5%

+1.5%

4.5% of

turnover

OWC as percentage of turnover was 10.2%

Negatively impacted by USD conversion

Net financial debt/REBITDA ratio of 3.21, in compliance with

the covenant under the credit facility (max. 3.25)

Capex amounts to 4.5% of turnover

Capex includes investments in R&D and in the construction

of new compounding facilities in the US and the Netherlands

Segment Highlights HY1-2015

Fagron Specialty Pharma Services

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Strong turnover growth of 60.7% (organic growth of 25.4%)

REBITDA increased 59.0% to € 25.7 million or 27.8% of turnover

Global market for FSPS is huge and rapidly growing driven by:

• Increasing demand for customized medication

• Increased legislation/regulation forcing hospitals to outsource compounding

New antibiotic facility in NL will be operational in October 2015

New sterile facility in US will be operational in November 2015

Positive developments to start FSPS in Germany and Czech Republic

Well-filled pipeline of acquisition candidates

(x 1,000 euro) HY1 2015 HY1 2014 Change

Turnover 92,167 57,354 +60.7%

REBITDA 25,653 16,133 +59.0%

REBITDA margin 27.8% 28.1%

Fagron Trademarks

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Strong organic turnover growth of 12.7%

REBITDA increased 28.1% to € 9.1 million or 35.6% of turnover

Global Fagron network of 300 pharmacists and 45 researchers responsible for strong and

extensive R&D pipeline

Strong increase in worldwide demand for SyrSpend®

• SyrSpend® is developed in-house, based on patented active suspension technology

• Largest independently conducted stability study showed that SyrSpend® is compatible

with almost all medicines

• SyrSpend® is validated by two big pharmaceutical companies for worldwide use in

clinical trials

• Appointment of distributor for Hong Kong and Macau

(x 1,000 euro) HY1 2015 HY1 2014 Change

Turnover 25,551 22,678 +12.7%

REBITDA 9,109 7,109 +28.1%

REBITDA margin 35.6% 31.3%

Global R&D Pipeline

FAD, phase 2PainPsoriasisObesity

Identify needs Feasibility DevelopmentEvaluation and

improvementSales

Develop

innovation to

meet the

specific market

needs and

expectations

Pharmaceutical,

technical and

commercial

feasibility

Fagron

together with

prescribers,

pharmacists

and universities

Research on

compatibility,

stability and

production

Global launch of

innovations by

Fagron

Transdermal

application

Alopecia

Fagron Essentials

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Turnover decreased 2.9%

REBITDA decreased 5.8% to 29.8 million

In the 2nd quarter of 2015, a project to optimize the product portfolio and the production

process was started

Sales were negatively impacted by change in the reimbursement system in the US

Non-strategic, low-margin products, usually with a low turnover ratio, will be phased

out in 2015

Impact on turnover for HY2-2015 will be negative

Positive impact on profitability expected

(x 1,000 euro) HY1 2015 HY1 2014 Change

Turnover 120,549 124,098 -2.9%

REBITDA 29,791 31,639 -5.8%

REBITDA margin 24.7% 25.5%

Reimbursement of CompoundedMedication in the US

Changes in reimbursement are only related to non-sterile compounding

Compounding in the US is and will remain reimbursed when:

• There is no licensed/registered alternative available

• The compound is based on a licensed/registered product

• Prior authorization has been received

Fagron’s cGMP and FDA 503B sterile and nuclear facilities in the US are not impacted

by reimbursement changes

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How will Fagron benefit in the US?

Increased focus on cash-based non-sterile compounded medication, based on

Fagron’s successful concepts and Trademarks in South America and Europe

Increased education and advice on the benefits of specialty pharma for prescribers and

patients

Focus on cGMP 503B Fagron outsourcing facilities for sterile compounding

• Increased legislation and regulatory requirements

• Trend to outsource sterile activities

• Decreasing number of competitors

• Increasing demand for customized medication

• Total available market for Fagron Specialty Pharma Market is US$ 8 billion, of which

85% is not outsourced

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Outlook

22

Outlook 2015

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Fagron expects to realize a turnover

of at least € 500 million1 with a

REBITDA-margin2 of 26%

1 Based on constant exchange rates (euro/US dollar of 1.250 and euro/Brazilian real of 3.100).2 EBITDA before non-recurrent result.

Q&A

Disclaimer

This presentation may contain forward-looking statements with respect to Fagron’s

future (financial) performance and position. Such statements are based on current

expectations, estimates and projections of Fagron and information currently available to

the company. Fagron cautions readers that such statements involve certain risks and

uncertainties that are difficult to predict and therefore it should be understood that many

factors can cause actual performance and position to differ materially from these

statements. Fagron has no obligation to update the statements contained in this

presentation, unless required by law. The numbers presented are not audited numbers.

A more comprehensive discussion of the risk factors affecting Fagron business can be

found in the company’s latest Annual Report, which can be found on the company's

corporate website, www.fagron.com.

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