Valartis : 26.08.2021 Half-Year Report 2021

BUSINESS PERFORMANCE AND

ECONOMIC SITUATION OF VALARTIS

Business development was very positive in the first half year 2021. Valartis Group reported a half-year net gain of CHF 4.8 million (previous year: net loss of CHF 6.1 million) attributable to an increase of operational activities and improved market conditions in the context of the global economy recovery. Operating business developed above budget with operating income increased by 20 per cent and operating expenses lower by 7 per cent. The net finance result amounted to a gain of CHF 4.0 million mainly due to an improvement of the ruble exchange rate against the Swiss franc. The level of ruble/Swiss franc did not yet reach its level before the COVID-19 pandemic. As of 30 June 2021, Valartis Group employed a total of 71 full-time equivalent employees in operations (31 December 2020: 69.5 employees).

On the real estate advisory side, Valartis Group successfully supported the acquisition of the real estate and commercial company "Société de l'Hôtel des Trois Couronnes, à Vevey, SA" operating a prestigious hotel palace in a historical building located on the border of the lake of Geneva.

The ENR Group investment portfolio was positively impacted by higher valuations driven by ruble appreciation against the Swiss franc during the reporting period. On operational side, the business centre Petrovsky Fort's overall occupancy rate decreased by 2 per cent during the first half year 2021. On investment side, the ongoing improvement programme has successfully opened a passage between the business centre and the next-door 550 rooms Hotel Saint Petersburg allowing further joint development initiatives and enhancing the attractiveness of the business centre for tenants. The Kaluga Flower Holding successfully completed the planned renovations of the facilities in the course of the first half 2021 and obtained a major banking funding facil- ity. The greenhouse areas are now over 80 per cent in operation.

During the first half of 2021, EPH European Property Holdings Ltd focused on implementing the 2020 acquisitions into opera- tions. The forward purchase of QBC 1,2 & 7, which was closed in December, added 38,700 square metres of lettable office space and 680 parking lots to the portfolio. In addition, the refurbishment project LASS 1 at Lassallestrasse 1 in Vienna is being closely monitored. The office property, originally built in 1993, will provide intelligent and future-oriented workspaces on nine floors with a total area of approx. 29,000 square metres. The refurbishment is expected to be completed in mid-2022.

The Valartis German Residential Health Care Fund invests in healthcare real estate assets focusing on silver generation and manages 14 properties in Germany. The Fund has not faced any negative impact resulting from the COVID-19 pandemic thanks to the protective measures taken by all the operators. In addi- tion, the German government protects nursing home operators

against loss of revenues and higher costs related to necessary COVID-19 measures. As a result, rental income remained stable.

In June 2021, we were able to celebrate the roofing ceremony in our new nursing home development in Saxony which will be opened in the first half year 2022. The project comprising of more than 100 nursing home places and 5 barrier-free living apartments was taken over end of 2020. Furthermore, the fund successfully closed the acquisition of "Haus Saline", an apartment house with ten low-barrier flats for assisted living. The property is adjacent to "Haus Anna am Park" and is being managed by the same operator.

Our associated company Norinvest Holding (Banque Cramer & Cie SA) benefitted from a promising business development in the wealth management sector and from further cost optimisation measures. In the shipping business, our partnerships with Briese Schiffahrt took advantage of the current market situation in global shipping which has developed favourably in step with the global economic recovery that started in the beginning of the fourth quarter 2020.

FINANCING SITUATION

The financial situation of Valartis Group was positively impacted by business and market conditions with high capitalisation level. Group shareholdersʼ equity amounts to CHF 114 million as at 30 June 2021 (31 December 2020: CHF 107 million). This corresponds to an equity ratio, i.e. total equity­ in per cent of balance sheet total, of 65.4 per cent (31 December 2020: 62.2 per cent). Equity increased comparing 30 June 2021 with 31 December 2020 thanks to three main favourable effects: the net gain for the 1st semester 2021, the foreign exchange translation differences and the gains from financial assets whose fair value adjustments are recognised through OCI.

During the first half year 2021, cash flow statement was influenced by additional investments made into Kaluga Flower Holding LLC by way of various loans (CHF 1.1 million). The divestment of short-term investments generated CHF 2.1 million of cash. Net cash and cash equivalents increased compared to the previous period from CHF 10.0 million at the end of 2020 to CHF 10.9 million by mid-2021. Trading portfolio assets, held for short-term cash management purposes, amount to CHF 13.8 million (31 De- cember 2020: CHF 15.9 million).

BUSINESS DEVELOPMENT

IN THE FIRST HALF OF 2021

Income statement

Valartis Group AG reported a net operating income of CHF 6.0 million in the first half-year 2021 compared to CHF 5.0 million for the first half of 2020. The EBITDA was a gain of CHF 1.3 million