Jaarlijkse Algemene Vergadering van Aandeelhouders

Waregem, 11 mei 2015, 15:00 uur

De Voorzitter duidt Jan Peeters aan als

secretaris voor de AVA.

De Voorzitter stelt voor om Hans Stols aan te

duiden als stemopnemer.

1

Verzoek om de agendapunten 1 tot en met 5

gezamenlijk te behandelen in een presentatie.

Verzoek tot ontheffing van de commissaris tot het

voorlezen van zijn rapport.

2

Fagron

3

Global presence

4

Global presence

USA

Europe

South Africa

Colombia

Brazil

China

Fagron Group

7 sites – GMP, FDA

9 sites – GMP, FDA, ISO9001

3 sites

4 sites

4 sites – GMP, FDA, ISO9001

Purchase & quality office

28 sites

5,000 pharmaceutical raw materials

5

Fagron

Founded in 1990 by current CEO Ger van Jeveren

This year celebration of 25 years dedication to compounding

Global market leader in pharmaceutical compounding

2,239 employees, incl. >300 pharmacists, in 30 countries

10% of annual turnover comes from innovations that were introduced in

the past two years

2014: turnover of € 447.1 million and REBITDA margin of 26.5%

Listed on Euronext Brussels and Amsterdam since 2007

Market capitalisation of € 1.1 billion

6

7

8

Business model

FCS

Fagron Trademarks

Fagron Compounding Essentials

Raw materials

Excipients

Equipment

Supplies

Nuclear, Sterile, Aseptic and

Non-Sterile compounding

Fagron Advanced Derma

SyrSpend® SF

Fagron Aseptic Pack

9

Major achievements in 2014

• Gross margin of 64.5%

• EBITDA-margin of

25.4%, an increase of

340bps

• Divestment of Arseus Dental and

Arseus Medical

• US private placement of US$ 185

million

• Refinancing of € 220 million

syndicated loan facility

• Successful rebranding of Arseus

into Fagron

• Fagron publicly listed on Euronext

Amsterdam and Brussels since

1 January 2015

• Organic turnover

growth at constant

rates of 11.5%

• Total turnover growth of

30.4%

• Disposal of € 10.9

million non-strategic

OTC and Industry

activities

10

What is pharmaceutical compounding?

11

Patient

Tailor-made

medication

Compounded in community and hospital pharmacies or by Fagron

Compounding Services, always based on a pharmaceutical formulation

Formulations developed by Fagron

and/or compounding pharmacists

based on APIs which are out of patent Alternative dosage

forms

Alternative dosage

strengths

Combination

therapy

Key drivers of pharmaceutical compounding

Unique selling points

Prescriber/Pharmacist

“Yes, compounding

pharmacists enhance

medication compliance

and save lives… every

single day!”

12

Drug shortages

Discontinued drugs

High-quality and cost effective alternative

Less side effects

More individualised approach

Tailor-made

Enhance patient compliance

New and unavailable therapeutic needs

Increased awareness through internet

Process from prescription to patient – Europe

Patient

REIMBURSEMENT

Prescriber

Hospital

pharmacy

Pharmacy

13

Process from prescription to patient – US

Patient

NON STERILE:

REIMBURSED/CASH

Prescriber

Hospital/

clinic

Non-sterile

FCS facility

FDA registered

503B sterile FCS

facility STERILE: CASH 14

Process from prescription to patient – Brazil

100% CASH MARKET

15

Patient

Prescriber

Pharmacy

Fagron compouding

advisors

(EU: 300, NA: 100, SA: 100)

Discuss patient case

with prescribers

Tailor-made medication

prepared in a

compounding pharmacy or

by Fagron Compounding

Services

Formulary based on

Fagron APIs and Fagron

Trademarks

Fagron capsule

Win-win-win strategy

Prescriber

Pharmacist

Patient

17

Patient

organisations

Government

Insurance companies

Fagron markets – Europe

400,000 pharmacists

155,000 pharmacies

10,000 compounding pharmacies

US$ 2 billion market (est.)

Compounding:

Not embedded

Less important at University and pharmacy education

Regulatory: not-standardised and not implemented

Traditional

Growing market

Estimated market share of FCS is <5%

Estimated market share of FTM and FCE is 50%

18

Fagron markets – US

274,000 pharmacists

67,000 pharmacies

4,500 compounding pharmacies

US$ 8 billion market (est.)

Compounding:

Embedded in society and culture

Pharmaceutical specialisation at University level

Regulatory: standardised and implemented, but in transition

Innovative (vehicles)

Growing market

Estimated market share of FCS is <5%

Estimated market share of FTM and FCE is 15%

19

Fagron markets – Brazil

120,000 pharmacists

32,000 pharmacies

7,200 compounding pharmacies

US$ 4 billion market (est.)

Compounding:

Way of life, part of Brazilian culture

Pharmaceutical specialisation at University level

Regulatory: standardised and implemented

Innovative (transdermal application)

Growing market

Fagron is not active in FCS

Estimated market share of FTM and FCE is 45%

20

Our unique position in global compounding

21

Global market leadership

Optimising and innovating compounding

Extensive R&D pipeline

Unique business model

Strong brand names

Global footprint

Global buy-and-build strategy

Our unique position in global compounding

22

Group strengths

In-depth compounding knowledge

Use best practices

Speed of execution

Extensive global network

Local market expertise

Acquiring and integrating expertise

Solid financial position

Our unique position in global compounding

23

Operational strengths

Global scale benefits

Compliant with highest quality standards

Product portfolio optimisation

Centralised purchasing

Production efficiency

Consolidation of activities

Acquisition of AnazaoHealth Corporation

Leading nuclear, pain and

intrathecal compounding

facility in the United States

Estimated sales AnazaoHealth

in 2015 USD 30 million with

EBITDA margin equal to

Fagron Group

Acquisition multiple 6x

EBITDA

Headquartered in Florida with

an additional 503B facility in

Nevada

24

Nuclear compounding

Definition: nuclear compounding is a specialty area of

pharmacy practice dedicated to radioactive materials for

use in nuclear medicine procedures, which includes cancer

treatments and diagnostics.

Radiopharmaceuticals are radioactive. Radiation protection

during compounding and administration forms an integral

part of the job.

Anazao’s radiopharmaceuticals are tailor-made

compounded. Most radioactive dosage forms are being

compounded as capsules, seeds or injections.

Radiopharmaceuticals administered as injections are

compounded under aseptic conditions.

Dosages are compounded in MBq (megabecquerel,

activitiy) instead of milligrams. 25

Radioactive capsules: iodine-131

Thyroid cancer treatment

Indication: iodine-131 is a radioactive therapeutic agent

indicated for the treatment and thyroid carcinomas

(cancer).

Route of administration is oral.

Preparation: radioactive capsules are compounded

according to the prescription and the physicians needs.

Advantage: local treatment, since thyroid cells are the only

cells in the body that can absorb iodine.

Dosage: sodium iodine I-131 therapeutic dose is

thyroid cancer the usual 3700 to 5550 MBq.

26

Radioactive injections: Tc-99m

Diagnostics Indication: Technetium-99m is used as a radioactive tracer

for diagnostics and can be detected with equipment for

medical imaging.

Route of administration: intravenous as injection.

Preparation: Tc-99m is taken from a generator and

attached to a carrier, i.e. a protein.

Advantage: Tc-99m protein complex will be absorbed by

tumors, which will identify the tumor on medical images.

Dosage: variable, depending on the amount of activity

needed for the procedure and clarity of the image.

27

Radioactive seeds: iodine-125

Brachytherapy

Indication: Treatment of cancer by insertion radioactive

seeds at site of tumor (Brachytherapy).

Route of administration: direct injection into the tumor.

Preparation: Radioactive seeds are loaded into a

needle as strands according to a treatment pattern.

Advantage: local treatment, which affects the tumor

directly without harming many healthy cells..

Dosage: variable, depending on dosage pattern of the

physician.

28

Advantages of brachytherapy versus

alternatives

Tailor-made treatment

Local radiation of tumor

Isolated tumor treatment,

without impacting healthy tissue

No invasive surgery needed

Less side-effects (such as

infections, incontinence)

4 hour treatment versus weekly

radiation treatments

Applicable in a.o. cardiology,

oncology, nefrology, neurology

29

Fagron Compounding Services

Business model: FCS

31

Tablets, capsules, liquids,

crèmes/ointments

IV-Bags, ampoules, vials

TPN, cytostatics, syringes,

cassettes, easypumps

Radioactive capsules,

radioactive injections,

radioactive seeds Nuclear

Aseptic

Non-Sterile

Sterile

32

In 2014, Fagron prepared over

2 million prescriptions

Fagron Compounding Services

Fagron Compounding Services facilities worldwide

Belgium

Bornem

(non-sterile & aseptic)

France

Paris (non-sterile)

Marseille (non-sterile)

South Africa

Johannesburg (non-

sterile)

Cape Town

(non-sterile and sterile)

George

(non-sterile and sterile)

Greece

Trikala (non-sterile)

Colombia

Bogotá (non-sterile)

Bogotá (non-sterile)

Cali (non-sterile)

Medellin (non-sterile)

Netherlands

Oud Beijerland (non-sterile & aseptic)

Helmond (non-sterile & sterile)

Hoogeveen (non-sterile & aseptic)

Oldenzaal (non-sterile & aseptic)

Goes (non-sterile, sterile & aseptic)

North America

Wichita, Kansas (sterile & aseptic)

St. Louis, Missouri (non-sterile)

Arlington Heights, Illinois (non-sterile)

Tamarac, Florida (non-sterile)

33

Fagron Compounding Services

34

Warehouse incoming goods Clean utilities Transfer into clean room

Clean utilities in clean room Batch record administration Transfer to aseptic area

Fagron Compounding Services

35

Prepare for compounding Compounding Visual analyses

Packaging Microbiology analyses Complete batch record

Fagron Compounding Services – products

36

Elastomeric pump Morphine cassettes

Fagron Aseptic Pack Prefilled syringes

Fagron Compounding Services – products

37

Intravitreal eye injections antibiotic prophylaxis

IV bag Cytostatics

Global R&D pipeline

38

Launch Global Concepts

FAD phase 2

Pain, phase 1

SDD

FAD phase 3

Obese

Alopecia

May Jun Jul Jan Feb Mar Apr Aug

2015

Sep Oct Nov Dec Feb

2016

Aug

Psoriasis

39

YES, WE IMPROVE THE QUALITY OF

LIFE OF PATIENTS, EVERY SINGLE DAY

Financial highlights 2014

Consolidated turnover S2 2014 and FY 2014

X 1,000 euros 2014 2013 Total

growth

Tot. growth

CER Org.

growth

Org.

growth

CER

Fagron 438,479 334,985 30.9% 33.0% 9.7% 11.5%

HL Technology 8,577 7,726 11.0% 9.5% 11.0% 9.5%

Total 447,056 342,711 30.4% 32.5% 9.7% 11.5%

X 1,000 euros S2 2014 S2 2013 Total

growth

Tot. growth

constant* Org.

growth

Org.

growth

constant **

Fagron 234,348 176,828 32.5% 31.0% 10.4% 9.1%

HL Technology 3,559 3,317 7.3% 4.9% 7.3% 4.9%

Total 237,908 180,145 32.1% 30.5% 10.4% 9.1%

41

Sales Fagron - division CAGR

42 CAGR: Compound Annual Growth Rate

137 151

179

243

290

335

438

2008 2009 2010 2011 2012 2013 2014

20%

Organic and total turnover growth Fagron division

9.4%

5.9% 7.2% 6.5%

10.9%

13.7% 11.5%

24.2%

10.5%

18.3%

35.8%

21.8%

20.3%

33.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2008 2009 2010 2011 2012 2013 2014

Total growth at constant rates

Organic growth at constant rates

43

Sales per segment

x 1,000 € 2014 2013 Total growth Organic

growth

Fagron Compounding

Services 147,780 58,210 153.2% 19.8%

Fagron Trademarks 45,652 33,630 39.8% 28.4%

Fagron Compounding

Essentials 245,047 243,145 3.3% 4.7%

Total Turnover 438,479 334,985 33.0% 11.5%

44

Without the disposal of € 10.9 million of Industry

Sales, organic growth of Fagron Compounding

Essentials would have been 9.7%

Consolidated - Gross Margin

194.7

288.2

0

50

100

150

200

250

300

2013 2014

49.2%

48.1%

• Increased by 770bps to 64.5% of

turnover

• Focus on high margin products, FCS

and Fagron™

• Continuous savings in procurement

• Phased-out industry sales

56.8%

64.5%

45

Consolidated - REBITDA

79.1

118.5

0

20

40

60

80

100

120

2013 2014

49.2%

49.8%

• Increase of 340bps to 26.5% of

turnover

• Continuous focus on OPEX

• Growing expenses in R&D

• In 2014 total amount of R&D is € 30

million

• Fagron does not activate R&D costs

23.1%

26.5%

46

Consolidated - Depreciation & Amortisation

8.9

19.0

0

2

4

6

8

10

12

14

16

18

20

2013 2014

49.2%

113.4%

• Increase in D&A of € 10.1 million:

€ 4.7 million PPA

€ 2.6 million PPE

€ 2.8 million write down of

inventory and receivables (phase

out of non profitable distributions

and industry sales)

47

Consolidated – EBIT

66.3

94.3

0

10

20

30

40

50

60

70

80

90

100

2013 2014

49.2%

42.2%

• Increase of 42.2% to € 94.3 million

(170bps to 21.1% of turnover)

• EBIT lift (EBIT growth/sales growth)=

1.39

48

Consolidated – Taxes

7.0

26.7

00

05

10

15

20

25

30

2013 2014

49.2%

• Increase of € 19.7 million, mainly due

to high corporate tax rate in the US

• Effective tax rate amounted to 38.2%

• Cash tax rate is 16.3% and below our

guidance of 20%

49

Consolidated – Adjusted net profit

44.3 46.7

62.0

00

10

20

30

40

50

60

70

2013 2014 2014adjusted

49.2%

5.4%

• Increase of 5.4% from € 44.3 million

to € 46.7 million

• Negatively impacted by high tax rate

• Net profit corrected for paid taxes

would be € 62 million (increase of

40.0%)

40.0%

50

Net financial debt – S1 and S2

327

411

289

449

0

50

100

150

200

250

300

350

400

450

500

2013 2014

S1 S2

51

• Negatively impacted by USD

conversion (effect is € 22.2 million)

• Covenant = 3.18 compliant with

maximum ratio of 3.25

Net debt bridge

52

449

289 107

197

21 19 22 1 1 25

22

00

50

100

150

200

250

300

350

400

450

500

Strongly improved cash flow generation

53

In million € 2014 2013 Change

Operating cash flow 93.9 46.0 +104%

- Interest -24.7 -19.4 +27%

- CAPEX -12.5 -5.2 +140%

Free cash flow 56.7 21.4 +165%

EBITDA 113.4 75.2 +51%

EBITDA/FCF 50% 28% +2,200bps

Strongly improved cash conversion

Due to increasing EBITDA, good working capital management and decreasing

paid taxes = ‘Operational excellence’

Fagron Statutaire jaarrekening 2014

54

Verkorte enkelvoudige resultatenrekening

X 1.000 euro 2014

Bedrijfsopbrengsten 5.068

Bedrijfskosten -2.577

Bedrijfswinst 2.491

Financieel resultaat 40.044

Winst uit gewone bedrijfsuitoefening voor belasting 42.535

Uitzonderlijk resultaat

Winst van het boekjaar voor belasting 42.535

Belasting op het resultaat

Nettowinst boekjaar 42.535

55

Verkorte enkelvoudige balans

X 1.000 euro 2014

Vaste activa 393.760

Vlottende activa 242.961

Totaal activa 636.721

X 1.000 euro 2014

Eigen vermogen 359.482

Voorzieningen en uitgestelde belastingen 5.751

Schulden 271.488

Totaal passiva 636.721

56

Enkelvoudige resultaatverwerking

X 1.000 euro 2014

Te bestemmen winstsaldo 44.117

Onttrekking aan het eigen vermogen

Toevoeging aan het eigen vermogen 12.961

Aan de wettelijke reserves 2.127

Aan de overige reserves 10.834

Over te dragen resultaat

Uit te keren winst 31.156

Voorstel brutodividend (nettodividend) per aandeel (in euro) 1,00 (0,75)

57

Outlook

58

Outlook 2015

59

Fagron expects to realise a turnover from

continuing operations of at least € 500 million1

with a REBITDA-margin2 from continuing

operations 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.

Thank you

Disclaimer

92

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.

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

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

corporate website, www.fagron.com.