Julphar
juLphar.net
Discussion report and analysis of the board of directors of the listed
public shareholding company
Date 09 November 2022
Name of the Listed Company Gulf Pharmaceutical Industries PSC julphar
The period of the financial statements
For Q3-2022
covered by the report
1. Net sales for the period reached 415.8 mAED as
compared to 362.8 mAED representing an increase of
14.6%
2. EBITDA from continuing operations reached in Q3
2022 to 47.5 mAED as compared to 40.6 mAED in Q3
2021 (EBITDA for Q3 2021 after eliminating onetime
events of acquisition and others of 59.1 mAED)
Overview of the main results during the
3. The continued growth in performance and profitability
financial period
from Q3 2022 due to:
• Increase in market share in its core markets
including United Arab Emirates, Kingdom of
Saudi Arabia and other GCC countries. Also,
overcoming geopolitical challenges in Algeria,
Lebanon, Ethiopia and Sudan
• Implementation of various cost saving initiatives
Securities issued during the financial
AED nil
period
1. Continued and increased focus on the development of
the Company's products pipeline
2. Successful licensing arrangements for the co­
Summary of the most important non-
development of products
financial events and developments
3. Continued successful implementation of two-year
during the financial period
strategic turnaround plan
4. Approval of new products launches which is in line
with the strategic roadmap
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Julphar jlnh T +971 7 246 1461
POBox 997 Ras AL Khaimah djorJI jjjofj 997 ajjj 5 gala F +971 7 246 2462 cL-jujIgzUl oLxl i n I I j.4.l i JI
United Arab Emirates ozeHjcJI cwjsJI oljlolJI E info@julphar.net Gulf Pharmaceutical IndustriesJulphar
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The operational performance of the Company has shown a
strong and continued positive trend while overcoming
geopolitical challenges which is evident by the increase in net
Summary of operational performance sales as compared to Q3 2021.
during the financial period Q3 2022 production output remained strong with sustained
output and targeting to cross the 20 mio units milestone in
Q4 evidencing the strong progress towards strategic
roadmap
Key figures Q3 2022 Q3 2021*
Net sales (mAED) 415.8 362.8
Gross margin (%) 30.0% 24.3%
Net profit (mAED) 4.5 53.8
EBITDA from continuing 47.5 99.7
operations (mAED)
EBITDA from continuing 47.5 40.6
operations - normalized
(mAED)
Summary of profit and loss during the Plant Pharmacies LLC ("Planet") financial results were fully
financial period consolidated in julphar Group from 1 July 2021. During Q3
2022, Planet contributed 241.8 mAED in the net sales. The
Group's gross margins were affected by Planet's lower gross
margin on distribution business. However, the gross margins
continued to be sustained and reached 30.0% in Q3 2022 as
compared to 24.3% in Q3 2021 (if normalized, the gross
margins were 21.9% in Q3 2021 after eliminating the one­
time events).
*after reclassification of Julphar Ethiopia as 'discontinued
operations'.
The total equity of the Group increased by 10.0 mAED and
reaching to 973.8 mAED. The increase was due to net profit
for theyear of 10.4 mAED followed by the increase in
Summary of financial position as at the
cashflow hedge reserve by 25.6 mAED. These increases were
end of the financial period
effected by sharp decline in foreign currency translation
reserve by 27.2 mAED. No significant changes in the financial
position of the Group compared to theyear-end 2021.
Summary ofcash flows during the Cashflow used in operating activities reached -45.7 mAED
financial period during the period from January to September 2022 as
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Julphar jlob T +971 7 246 1461
POBox 997 Ras AL Khaimah cboudJI jnlj 997 zujj (pgnita F+971 7 246 2462 d_jLj|gzLJI oLrl 1 n.1 J i..l. i JI
United Arab Emirates ozojuoJI cujj-qJI oljLolJI E info@juLphar.net Gulf Pharmaceutical IndustriesJulphar
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compared to 7.2 mAED in 2021. The cashflow from investing
activities has also contributed 23.9 mAED which is also
supported by cashflow from financing activities of 10.4
mAED.
Net sales 415.8 mAED
Main performance indicators Net profit 4.5 mAED
EBITDA from continuing operations 47.5 mAED
The size of the pharmaceutical market in Middle East &
North Africa is valued at USD 44.8 bn in 2021 and is
expected to reach USD 56 bn in 2025. The pharma market is
expected to grow at a CAGR of 5.7%.
Generics are showing about 9.5% CAGR. in the private
Expectations for the sector and the segment of the key markets, while the total market is
company's role in these expectations growing by 7.4% CAGR in the private segment of key
markets (UAE, KSA, Egypt, Algeria, Tunisia, Jordan, Kuwait
and Lebanon). It is expected that the generics market will
maintain higher growth for reasons like public budgetary
pressures, the support for the local manufacturers and patent
expiry. {Source IQVIA Data)
UAE witnessed a 2.2% real GDP growth in 2021. Continued
government stimulus, a gradual easing of the pandemic
Expectations regarding the economy
impact, Expo 2020, etc., are helping the economy to revert to
and its impact on the company and the its pre-COVID-19 crisis level, with full recovery expected by
sector 2022. The economy is expected to grow by 4.2% in 2022.
Source: Oxford economics, Reuters, IMF, Bloomberg,
Moody's, ENBD, Central Bank UAE
The future plans for growth of the Company are as follows:
1. Focus on strategic areas of business as the company
has divested from non-core subsidiaries.
2. Continue retail pharmacies expansion in UAE and KSA
3. Strengthen sales organization in core markets and
increase market share with existing portfolio.
Future plans for growth and changes in
4. New alliances and partnerships to strengthen the
operations in future periods
product portfolio of the company.
5. Launch new products in core therapeutic areas and
new therapeutic areas.
6. Invest in capital expenditure to increase production
capacity and new manufacturing technologies and
improve operations efficiency.
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Julphar jLoh T +971 7 246 1461
POBox 997 Ras AL Khaimah dcudJI jjdIj 997 ojjj Qgaiio F +971 7 246 2462 cLuujIgiJI oLd i n 1 J 3 . 1 5 II
United Arab Emirates ozmcJI cwpJI oljLolJI E info@julphar.net Gulf Pharmaceutical IndustriesJulphar
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The Group continues to invest in capital expenditure for
achieving targeted growth and sustained performance by:
The size and impact of current and
1. Expanding the product portfolio with investing in new
projected capital expenditures on the product dossiers
company 2. Continuing upgrading the existing production facilities
3. Redesigning current processes to address new
requirements from government authorities
The developments of the
The implementation of the following projects have been
implementation of projects, plans and
discussed in the Board of Directors' meetings:
transactions and deals that were 1. Growth strategy 2030
discussed by the company's board of 2. New products launch to add in the product portfolio
3. License agreement for co-development of products
directors in the report for the previous
4. Divestment of non-core areas of business
fiscal year
The name of the chairman of the
Sheikh Saqr Humaid AlQasimi
company or the authorized signatory
Signature and Date 09 November
Company's Seal
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Julphar jlnb T +971 7 246 1461
POBox 997 Ras AL Khaimah dnpJI jjoIj 997 zuy ^gaia F +971 7 246 2462 cLjLjIgaJI ol_d i n 1 J ^jlJLAJI
United Arab Emirates oznioJI cwpJI oljLolJI E info@juLphar.net Gulf Pharmaceutical Industries

Sentiment: positive