Announcement

14 Feb Announcement

Peania, 14 February 2024 – Lavipharm S.A., in accordance with Regulation (EU) 596/2014, announces the cessation of the Group’s pharmaceutical wholesale activities and logistics services to third parties (3PL), and the transfer of certain assets of its subsidiary LAS to Profarm S.A. Special attention has been given to safeguarding the subsidiary’s personnel, as most of the employees will be employed by Profarm S.A. or transferred to the core activities of the Lavipharm Group.

This decision is fully in line with Lavipharm’s growth strategy and achieves the following goals:

• The Group’s withdrawal from an activity that has been declining since the 2010s and is no longer profitable.
• Focusing of human and financial resources on the Group’s core activities, which are development, production and marketing and sales of pharmaceutical products.
• Improvement of the Group’s gross profit margin.
• Freeing up extensive storage space to meet the plant’s increased needs.

Considering all the parameters of the above, including the financial consideration, personnel transfer options, and compensation payments, the total profit before tax is estimated at €350K, which will be recognised in the financial results of Q1 2024.

While not contributing to the Group’s profitability, this discontinued activity accounted for a significant percentage contribution to consolidated sales, especially for the years 2021 and 2022. In contrast, for the years 2023 to 2026 – as described in the prospectus of the share capital increase that took place in December 2022 – its percentage contribution would have decreased continuously due to the strong growth of the Group’s core activities.

For comparison purposes only, Lavipharm presents adjusted consolidated data for the years 2021 to 2026, from which its pharmaceutical wholesale operation and 3PL services have been deducted: