Interim report
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ZENTIVA S.A. QUARTERLY FINANCIAL REPORTING AS AT 31 MARCH 2025 Report date: 31.03.2025 • Name of the issuer: ZENTIVA SA • Registered office: Bd. Theodor Pallady nr.50, Bucuresti • Phone / Fax: 021.304.72.00, 021.304.75.00 / 021.345.40.04 • Tax identification number: RO336206 • Trade Register number: J/40/363/1991 • Regulated market on which the issued securities are traded: Bucharest Stock Exchange • Share Capital – subscribed and paid-in: RON 69,701,704 • Class, type, no. and main characteristics of securities: 697,017,040 dematerialized class I shares • Market value: RON 4,52 / share representing the reference price on the last trading day of 2024 (November 20, 2024) • Market capitalization as at March 31, 2025: RON 3,150,517,021.
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ZENTIVA S.A. FINANCIAL STATEMENTS – 31 March 2025 TABLE OF CONTENTS: Statement of Comprehesive Income 3 Statement of Financial Position 4 Cash Flow Statement 5 Statement of Changes in Equity 6 Notes to the Financial Statements 7 – 20 Financial Ratios 21
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ZENTIVA S.A. STATEMENT OF COMPREHENSIVE INCOME For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 3 STATEMENT OF COMPREHENSIVE INCOME 31.03.2025 31.03.2024 RON RON Revenue from sales of goods 260,674,413 253,188,519 Revenue from rendering of services 10,675,498 13,106,552 Revenue 271,349,911 266,295,071 Other operating income 56,821 512,050 Changes in inventories of finished goods and work in progress 6,499,490 8,099,955 Raw material expenses, merchandise, consumables used and utilities (120,800,416) (112,909,350) Employee benefits expenses (52,090,808) (45,505,118) Depreciation, amortization and impairment (9,053,234) (7,440,138) Marketing and advertising expenses (5,123,546) (2,456,235) Reversal of/ (expenses with) provisions (127,018) (210,000) Other operating expenses (35,855,911) (31,188,177) Operating profit 54,855,288 75,198,059 Financial Income 10,745,500 10,517,289 Financial Expenses (773,571) (659,068) Profit before income tax 64,827,217 85,056,279 Income Tax Expense (9,599,465) (10,890,670) Net profit for the year (A) 55,227,752 74,165,609 Other comprehensive income: Other comprehensive income that will not be reclassified to profit and loss in subsequent periods: - - Deferred tax impact on pension/revaluation recognized in equity - - Other comprehensive income items - - Other comprehensive income net of tax (B) - - Comprehensive income for the year (A) + (B) 55,227,752 74,165,609 Number of Shares 697,017,040 697,017,040 Net earnings per share (RON/share) 0.08 0.11 Financial statements for the period ended March 31, 2025 are not audited.
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ZENTIVA S.A. STATEMENT OF FINANCIAL POSITION For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 4 STATEMENT OF FINANCIAL POSITION 31.03.2025 31.12.2024 Assets Non-current assets Property, plant and equipment 251,946,665 253,852,567 Advances for equipment - 1,965,626 Right-of-use assets 16,638,784 18,108,392 Goodwill 11,649,100 11,649,100 Customer relationships 12,613,747 13,476,050 Other intangible assets 2,627,114 2,740,267 Total Intangible assets 26,889,962 27,865,417 295,475,411 301,792,002 Current assets Inventories 176,666,804 192,971,202 Trade receivables and other receivables 669,491,242 552,335,137 Advances and prepayments 4,552,734 3,895,454 Income Tax Receivable - 3,433,502 Cash pooling intercompany receivables 655,521,335 645,672,067 Cash and cash equivalents 45,704,865 33,625,156 1,551,936,980 1,431,932,518 Total assets 1,847,412,391 1,733,724,520 Equity Issued share capital 69,701,704 69,701,704 Share premium 24,964,506 24,964,506 Legal and other reserves 200,717,846 200,413,115 Revaluation reserve 65,023,715 65,023,715 Retained earnings 1,136,405,370 1,081,482,349 Total equity 1,496,813,141 1,441,585,389 Non-current liabilities Employee benefit liability 7,945,130 7,945,130 Deferred tax liability 4,128,867 2,237,742 Pillar Two income tax liability 7,965,683 7,956,683 Lease liabilities 8,702,184 9,555,404 Provisions 2,167,986 2,040,968 Total non-current liabilities 30,900,851 29,735,927 Current liabilities Trade payables and other payables 240,068,456 194,201,854 Income taxes payable 4,274,838 - Short-term lease liability 8,333,032 8,917,455 Other current liabilities 63,796,261 56,058,082 Short-term provisions 3,225,813 3,225,813 Total current liabilities 319,698,400 262,403,204 Total liabilities 350,599,251 292,139,131 Total liabilities and equity 1,847,412,391 1,733,724,520 Financial statements for the period ended March 31, 2025 are not audited.
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ZENTIVA S.A. STATEMENT OF FINANCIAL POSITION For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 5 STATEMENT OF CASH FLOWS 31.03.2025 31.03.2024 Cash flows from operating activities: Profit before tax 64,827,217 85,056,279 Depreciation and amortization 9,053,234 7,440,138 Allowance for trade and other receivables, advances and prepayments - - Inventory allowance movement (2,729,367) 3,555,131 Movements in provisions for risks and charges 127,018 - Loss on sale of non-current assets 354 2,382 Interest revenues (10,203,681) (9,006,645) Interest expenses 277,345 305,790 Operating profit before working capital changes 61,352,121 87,353,075 Change in inventories 19,033,764 (10,145,595) Change in trade, other receivable and advances (115,847,758) (74,881,859) Change in trade and other payable 54,226,304 38,508,617 Interest paid (277,345) (305,790) Cash generated from operating activities 18,487,086 40,528,448 Income tax paid - - Net cash from operating activities 18,487,086 40,528,448 Cash flows from investing activities Purchase of property, plant and equipment and intangible assets (3,675,349) (12,804,568) Cash pooling movement (9,849,268) (31,006,645) Interest received 10,203,681 9,006,645 Net cash from/ (used) in investing activities (3,320,936) (34,804,568) Cash flows from financing activities Lease payments (3,086,441) (2,466,772) Net cash used in financing activities (3,086,441) (2,466,772) Net increase (decrease) in cash and cash equivalents 12,079,709 3,257,107 Cash at the beginning of the period 1 January 33,625,156 27,302,728 Cash at the end of the period 31 March 45,704,865 30,559,835
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ZENTIVA S.A. STATEMENT OF CHANGES IN EQUITY For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 6 STATEMENT OF CHANGES IN EQUITY Share capital Share premium Legal and other reserves Revaluation reserve Retained earnings Total Opening balance at 1 January 2025 69,701,704 24,964,506 200,413,115 65,023,715 1,081,482,349 1,441,585,389 Profit for the year - - - - 55,227,752 55,227,752 Other comprehensive income: Deferred tax impact of other comprehensive income items - - - - - - Other comprehensive income - - - - - - Total other comprehensive income - - - - - - Total comprehensive income - - - - 55,227,752 55,227,752 Reserve for reinvested profit - - 304,731 - (304,731) - Closing balance at 31 March 2025 69,701,704 24,964,506 200,717,846 65,023,715 1,136,405,370 1,496,813,141 The legal reserve is set in accordance with the provisions of the Companies Law, according to which, at least 5% of the annua l accounting profit is transferred within the legal reserves until their balance reaches 20% of the company’s social capital. If this reserve is used fully or partially to cover losses or to distribuite in any form (such as to issue new shares according to the Companies Law), it becomes taxable. The company’s management does not estimate it shall use its legal reserve in such a way that it becomes taxable.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 7 NOTE 1: INFORMATION ABOUT THE COMPANY The company, previously named SICOMED S.A. Bucharest ("Sicomed") was founded in 1962 as Intreprinderea de Medicamente BUCURESTI (“IMB”). The current registered office of the Company is located in B-dul Theodor Pallady no.50, Bucharest. The Company is registered with the Trade Register under no. J40/363/1991. In 1990, Sicomed became a joint stock company by incorporating and taking over all the assets of the former IMB in accordance with the Government Decision. The initial share capital was the result of the difference between assets, including specific valuations of land and buildings donated by the State to the Company in accordance with the Government Decision, and liabilities held as of the same date. In October 2005, the majority stake in the company was acquired by Zentiva Group (a group in the pharmaceutical industry operating in Central and Eastern Europe) by acquiring shares held in Venoma Holdings Limited. Zentiva Group has control over the Company's operations. Starting with 24 January 2006, the Company changed its name from Sicomed SA to Zentiva SA. Starting with 11 March 2009, there was a change in the shareholding structure at the group level (Sanofi Aventis acquired 97% of Zentiva NV shares - parent of the Company). The main activity of the Company is the production and marketing of preparations and medicines for human use. Starting with 2007, a decision has been taken at the Zentiva Group level, and as a result the Company started its trading operations through its subsidiary in Romania, namely Zentiva International (incorporated in Slovakia) ("ZIRO") and , as such, the Romanian market (i.e. distributors) was supplied with the Company's products through ZIRO. Starting with 1 October 2011, sales are made directly through Sanofi Romania SRL entity and after that date, ZIRO became an entity with no activity, and was to be liquidated. On 20 February 2018, Zentiva SA launched the public purchase offer by Zentiva NV of the shares owed by minority shareholders in the percent of 18.4067 % at a purchase price of RON 3.5 / share. The public purchase offer was concluded on 5 April 2018. The shares redeemed through this offer were primarily the ones owned by KJK Fund II, the NN Optional Active Pension Fund, the NN Optional Optimal Pension Fund and the NN Privately Administrated Pension Fund. At the end of October 2016, Sanofi Group announced, after an analysis of all the available options, the initiation of its European generic medicine’s division carve out. As of that date, Zentiva SA was included in this separation process that was finalized on September 30, 2018, when Advent International NV purchased the European generic medicine division of Sanofi Group. Starting with 1 September 2018, Sanofi Romania SRL, who was up until that time the distributor of generic medicine produced by Zentiva SA on the Romanian market, transferred its distribution activity t o Zentiva SA, based on the distribution activity transfer contract, which was approved on 7 March 2019 by the General Meeting of the Shareholders of Zentiva SA. Following this, Zentiva started the direct distribution in Romanian of generic medicines both produced in Romania, as well as imported from other entities from the Group. The local market distribution is done by local distributors. The Company is listed on Bucharest Stock Exchange. The Company has no investments in subsidiaries or associated companies as of 31 March 2025. The Company is part of a group and is at its turn consolidated in the Group's Financial Statements, the consolidated parent company being AI Sirona (Luxembourg) Acquisition S.a.r.l.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 8 COMPANY’S MANAGEMENT as at March 31, 2025 Board of Directors Simona Cocos - Chairman of the Board – starting with August, 2021 Mihail-Codrin Botoran - Member of the Board - starting with February 2025 Hacho Agop Hatchikian - Member of the Board - starting with June 2024 Alin Briciu - Member of the Board - starting with February 2023 Francois Noel Marchand – Independent Member of the Board - starting with February 2017 Executive Management Simona Cocos – General Manager, Member and Chairman of the Board NOTE 2: BASIS OF PREPARATION OF THE FINANCIAL STATEMENT The Company's financial statements have been prepared in accordance with the provisions of Order No. 2844/2016 approving the accounting regulations compliant with the International Financial Reporting Standards applicable to companies whose securities are admitted to trading on a regulated market with all subsequent amendments and clarifications. These provisions are in line with the provi sions of the International Financial Reporting Standards endorsed by the European Union, except for the provisions of IAS 21 The Effects of Changes in Foreign Exchange Rates regarding the functional currency, of IAS 20 Accounting of Government Grants regarding the recognition of revenue form green certificates, with the exception of IFRS 15 - Revenue from Contracts with Customers regarding the revenue from distribution network connection charges and the exception of the presentation in the financial statements of the additional tax related turnover. These exceptions are not applicable and do not affect the Company and the compliance of the financial statements of the Company with IFRS Accounting Standards as adopted by the EU In order to prepare these financial statements, in accordance with the Romanian legal provisions, the functional currency of the Company is considered to be the Romanian Leu (RON). Going Concern These financial statements have been prepared on a going concern basis, which assumes that the Company will continue its activity in the foreseeable future. To assess the applicability of this assumption, the management analyses the forecasts of future cash inflows. On 31 March 2025, current assets of the Company exceed current liabilities by RON 1,232,238,580 (as of 31 December 202 4 current assets exceeded current liabilities by RON 1,169,529,314). At the same date the Company recorded a profit for the period of RON 55,227,752 (2024: RON 250,510,124) The budget prepared by the management of the Company and approved by the Board of Directors for the year 2025, indicates positive cash flows from the operati ng activities, an increase in sales and profitability from the direct distribution on the Romanian market of generic medicine produced locally as well as the ones imported from other entities of the Group to which the Company belongs. The management considers that the Company will be able to continue its activity in the foreseeable future and therefore the application of the going concern principle in the preparation of the financial statements is reasonable. Principles, policies and accounting methods No significant changes occurred in the company’s accounting policies and principles during the financial year concluded on March 31, 2025, compared to the accounting policies presented on December 31, 202 4.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 9 NOTE 3: SALES OF GOODS AND RENDERING OF SERVICES AND RAW MATERIAL AND CONSUMABLES EXPENSES 3.1 Revenues For management purposes, the Company is organized in business units based on its products and services. The Company has a single reportable segment, namely the production of medicines. The Company’s management monitors the operating results of the business for the purpose of making decisions regarding the allocation of resources and the assessment of performance. Performance is assessed based on the operating profit or loss, the profit before tax and it is quantified consistently with the operating profit or the loss in the financial statements. The Company monitors the sales transactions, considering the domestic and external sales. 1 January – 31 March 2025 1 January – 31 March 2024 Sales - domestic 159,212,686 159,669,429 Sales – external* 112,137,224 106,625,642 Total revenue 271,349,911 266,295,071 a) Rendering of services 10,675,498 13,106,552 b) Sales of goods, including: 260,674,413 253,188,518 Sales of finished goods 217,779,834 217,115,462 Sales of merchandise 64,344,882 52,167,355 Residual products 25,758 16,157 Claw back tax (21,476,062) (16,110,456) * Sales of the company are within European Union, external sales being represented mainly by sales to Czech Republic. Clawback tax Starting the last quarter of the financial year ended 31 December 2009, in the pharmaceutical industry, for the companies holding Marketing Authorizations (MA) for certain medicines, a new tax was introduced and referred to as” claw-back tax”. For the purpose of funding the public health expenses, MA holders included in the national health programs have the obligati on to pay the claw -back tax quarterly for the concerned sales of medicines related to the concerned quarter based on the notifications received by the Company from the National Health Insurance House Fund (CNAS). The contribution (the claw -back tax) is paid by the MA holders or by their legal representatives, if these medicines are: ➢ Prescribed within the healthcare system in Romania. ➢ Used in the ambulatory treatment (with or without a patient’s contribution) based on a medical prescription and are available in pharmacies, hospitals or used as part of the medical treatment in dialysis clinics. Starting 2020, following several legal amendments brought by Law 53/2020 approving Ordinance no. 85/2019, differentiated claw-back contribution by types of medicines was introduced. Specifically, for type I medicines (innovative medicines), the quarterly contribution is calculated by applying 25% on the value related to their centralized consumption (as communicated by the National Health Insurance Fund, after VAT deduction), while for type II (medicines produced in Romania, both innovative and generic) and type III medicines (generic medicines / any other medicines not classified as type I or II), the contribution is calculated by applying 15% and 20%, respectively.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 10 NOTE 3: SALES OF GOODS AND RENDERING OF SERVICES AND EXPENSES WITH RAW MATERIALS AND CONSUMABLES EXPENCES (continued) In October 2023, Government Ordinance no. 88/2023 was published approving the amendment of art. 3^8 of Government Ordinance no. 77/2011, so that starting from Q3 2023, the quarterly clawback contribution is calculated and due differentiated depending on the classification of medicines into «type I medicines» and «type II medicines». The list containing the classification of type I and type II medicines is approved quarterly by Minister of Health order, up to and including the 15th of the second month following the end of the quarter for which the contribution is due. The classification of medicines in the categories mentioned above is carried out by the National Agency of Medicines and Medical Devices in Romania. Most of the medicines Zentiva have in its portfolio are classified under type II medicines, so the related clawback contribution is calculated by applying 15%. 3.2 Raw material expenses, merchandise, consumables used and utilities Note 1 January – 31 March 2025 1 January – 31 March 2024 Raw materials a 50,375,696 52,556,119 Merchandise 38,064,055 26,041,909 Packaging materials b 19,564,568 21,938,647 Auxiliary materials c 5,327,754 4,156,347 Utilities d 4,673,510 4,978,680 Other material expenses e 2,794,834 3,237,647 Total 120,800,416 112,909,350 The amounts mentioned in the above table on the reference lines a, b, c represent mainly expenses with raw materials and direct materials, packaging and auxiliary materials, used in the production activity. The amounts mentioned on reference line d – utilities - refer mainly to the expenses with energy, gas and water. e – this category includes mainly the expenses with materials not on stock used by the department in charge with the certification of the products originating from Turkey and India, which are going to be distributed on the EU market, as well as with the certification of the products existing in the Zentiva SA portfolio. NOTE 4: OTHER INCOME / OTHER EXPENSES AND ADJUSTMENTS 4.1 Other operating income Other operating income 1 January – 31 March 2025 1 January – 31 March 2024 Gain/ loss from disposal of non-current assets (354) 2,382 Other operating income 57,175 509,668 Total 56,821 512,050
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 11 NOTE 4: OTHER INCOME / OTHER EXPENSES AND ADJUSTMENTS (continued) 4.2 Other operating expenses 1 January – 31 March 2025 1 January – 31 March 2024 Support services received from Zentiva Group 16,794,997 10,906,182 Repairs 2,696,641 3,139,825 Royalties – Zentiva trademark 276,841 186,071 Travel expenses 864,363 1,653,219 Write-off of inventories 5,358,838 - Taxes, registration fees 845,495 808,021 Professional fees 326,623 446,405 Other expenses 11,421,479 10,493,323 Net allowance for inventories (2,729,367) 3,555,131 Net allowance for trade receivables and other receivables - - Total 35,855,911 31,188,177 The expenses with support services from the Group include a large variety of services (see below) and have increased in Q 1 2025 compared to the same period from previous year: • Management and development of the products portfolio (monitoring, assistance regarding transfers, projects for Company production process optimization), for the procurement process (suppliers monitoring, negotiating the main contracts for raw material), legal support (international review and support / complex situations related to the business environment in Romania) and financial services (sales monitoring, support in production cost planning and optimization, defining the production flow for the local production capacity). • In addition to services mentioned above in this category are also included IT support services (SAP and other apps used by all entities within the group), operational services and support for daily activities regarding the IT infrastructure and software used, and IT project management and execution relevant on a local level. Repair services include: repair services related to the production equipment and repairs related to the cars fleet. Other expenses include: expenses for R&D in the pharmaceutical field, expenses for production authorization, equipment maintenance and repair, transport, security, intranet and other miscellaneous costs. In this category, there are included also the personnel leasing services of Lugera & Makler Romania SRL.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 12 NOTE 5: NON-CURRENT ASSETS Property, plant and equipment Goodwill Customer relationships Right-of-use assets Intangible asstes Total Gross value as at 1 January 2025 453,049,200 11,649,100 34,492,101 47,359,848 9,516,317 556,066,565 Additions 3,675,349 1,028,575 4,703,924 Disposals (1,694,764) (5,625) (1,700,389) Gross value as at 31 March 2025 455,029,785 11,649,100 34,492,101 48,388,423 9,510,692 559,070,101 Depreciation and impairment as of 1 January 2025 (199,196,633) - (21,016,051) (29,251,456) (6,776,049) (256,240,189) Depreciation in the year (5,584,959) (862,303) (2,498,182) (107,790) (9,053,234) Disposals 1,698,473 262 1,698,735 Depreciation and impairment as of 31 March 2025 (203,083,119) - (21,878,354) (31,749,638) (6,883,577) (263,594,688) Net value as at 1 January 2025 253,852,567 11,649,100 13,476,050 18,108,392 2,740,268 299,826,377 Net value as at 31 March 2025 251,946,665 11,649,100 12,613,747 16,638,784 2,627,114 295,475,411 PROPERTY, PLANT AND EQUIPMENT Revaluation of land and buildings As of 31 December 2022, the Company revalued the existing land and buildings in the Company's patrimony. The revaluation was made by an independent valuer in accordance with the International Valuation Standards. Fair value was determined by reference to market information, using the net rental income capitalization approach as the main method in valuing buildings and special constructions and the market approach (direct comparison method), as a method for land val uation. The cost replacement approach was also applied as a secondary valuation method for the buildings valuation. Valuation techniques are selected by the independent valuer in accordance with the International Valuation Standards, the type of property and the purpose of the valuation. Applying techniques and methods of measurement are in line with common practice for the type of asset value. Fair value is generally determined by using inputs on level 3 of the fair value measurement hierarchy. The inputs used in the valuation were: a. For buildings and special constructions: ➢ level 3 inputs representing replacement costs, historic costs, historic cost update indexes, impairment adjustments - most of these being derived based on publicly available technical studies, respectively IROVAL Catalogues and the National Institute of St atistics (as opposed to data taken directly from the market), with impairment estimated by the valuer. b. For land: ➢ level 3 inputs representing sale prices taken from sale offers for similar pieces of land, publicly available, with adjustments made by the valuer depending on their comparability with the measured pieces of land.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 13 NOTE 5: NON-CURRENT ASSETS (continued) The result of the evaluation was influenced by the main market inputs used, mainly: market value per square meter for land (estimated at EUR 149 / sqm), estimation of net rental revenues for buildings (estimating a monthly market rent, the occupancy rate of the property, the operating expenses, respectively the property tax, the insurance premium, administrative expenses and expenses for capital repairs and a capitalization rate of 9.5%). The fair value of the Company’s land of 77,877 sqm was determined by the valuer to be EUR 149/sqm. The total fair value of the measured assets was RON 114,838,475. The sensitivity analysis of the overall value of the valued asset base, performed by using the main inputs under the income approach in the range - / + 1% for the capitalization rate and (3% ) / + 5% in the degree of vacancy (cumulative sensitivity of the two basic indicators), indicated an interval of RON 108,1m - RON 121,1m. As at 31 December 2024, the independent valuer reassessed the fair value using updated market estimates and concluded that there are no significant variations compared to the fair values estimated as at 31 December 2022. GOODWILL AND CUSTOMER RELATIONSHIPS The goodwill and customer relationships of the Company are related to transfer of distribution activity from Sanofi Romania as part of a carve-out process performed in 2018 by Sanofi Group, which included the transfer of the Generics distribution business from Sanofi Romania to Zentiva. The Company performed an impairment testing on goodwill as of 31 December 202 4 and respectively as of 31 December 202 3 in accordance with IAS 36. The recoverable value of the CGU to which goodwill is allocated was significantly higher than the carrying value, so no impairment adjustments were identified. No reasonably possible change in the key assumptions on which management has based its determination of the recoverable value would cause the CGU’s carrying amount to exceed its recoverable amount. The recoverable value was determined based on the value in use following the application of the discounted cash flow method within the income approach, using management’s assumptions, namely: future cash flows estimated by the management for 9 years (2025 – 2033) determined taking into account an average annual growth rate of net sales of 4.8% (2023: 7.5%), a perpetuity growth rate of 2.5% (2023: 2.5%), operating margin of 2.45% (2023: 3.0%) and a WACC of 11.6% for 2025 and 10.5% for the period 2026 – 2033 (2023: WACC of 14.5% for 2024, 11.6% for 2025 and 10.5% for the period 2026 - 2032.) RIGHT-OF-USE-ASSETS The Company recognized as “Right-of-use assets” the following categories: • Car leasing for the Company’s personnel; • The lease of a packing line; • The lease contract for the storage premises owned by FM Logistic; • The lease agreement for IT equipment. The leases for vehicles have a lease term of 48 months. The Company’s obligations under the lease contracts are secured by the lessor’s title to the leased assets.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 14 NOTE 5: NON-CURRENT ASSETS (continued) The Company has a lease for a warehouse used for medicines storage, that includes the termination option. This option is negotiated by the Company’s management to provide flexibility in the management of the leased asset and align with the Company’s busine ss needs. The Company’s management applies judgement to determine whether it is reasonably certain to exercise termination option. INTANGIBLE ASSETS The Company recognized in the category “intangible assets” the following items: • Computer software • Patents, licenses, trademarks NOTE 6: INVENTORIES 31 March 2025 31 December 2024 Merchandise 47,094,733 63,517,822 Finished products and semi-finished products 65,942,256 61,868,581 Raw materials 63,647,857 68,950,993 Package materials 20,403,057 21,784,271 Minus: Allowance for obsolete inventories (20,421,098) (23,150,465) Total 176,666,804 192,971,202 The Company has no inventories pledged in favor of third parties as of 31 March 202 5 and 31 December 2024 respectively. NOTE 7: TRADE RECEIVABLES AND OTHER RECEIVABLES; ADVANCES AND PREPAYMENTS Trade receivables and other receivables 31 March 2025 31 December 2024 Total trade receivables, net, out of which: 667,407,411 550,664,101 Trade receivables * 287,529,494 292,877,336 Trade receivables from related parties 380,682,276 258,591,124 Minus: Allowance for expected credit losses (804,359) (804,359) Total other receivables - net, out of which: 2,083,831 1,671,036 Recoverable taxes 1,966,424 1,621,736 Sundry debtors 117,407 49,300 Minus: Allowance for doubtful foreseen losses from other receivables - - Total trade receivables and other receivables 669,491,242 552,335,137
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 15 NOTE 7: TRADE RECEIVABLES AND OTHER RECEIVABLES; ADVANCES AND PREPAYMENTS (continued) 31 March 2025 31 December 2024 Advances and prepayments, out of which: Advances paid – current 270,065 221,006 Advances paid to related parties – current - - Prepayments 3,637,813 2,656,621 Prepayments to related parties 644,856 1,017,827 Total advances and prepayments 4,552,734 3,895,454 Trade receivables are not interest-bearing and are generally on 60 - 120 days terms (2024: 60 - 120 days terms). See below for the movements in the allowance for trade and other receivables: Value adjustments 31 March 2025 31 December 2024 Opening Balance (804,359) (733,592) Set-up - (371,495) Uses - 300,728 Closing Balance (804,359) (804,359) NOTE 8: CASH AND CASH EQUIVALENTS 31 March 2025 31 December 2024 Cash at banks and on hand 45,704,865 33,625,156 Total 45,704,865 33,625,156 Cash in the bank is interest-bearing at the daily interest rate when the deposits are set. Short-term deposits are made for different periods of time between 1 day and 3 months, depending on the Company's cash requirements and accrues interest at the appropriate interest rates. As of 31 March 2025, the Company had letters of guarantee issued in favor of third parties amounting to RON 21,565 (2024: RON 21,565). As of 31 March 2025 and 31 December 202 4 respectively, the Company has an unused credit facility of RON 10,000,000 at BNP Paribas. The interest rate is 1-month ROBOR + 1.30% pa. NOTE 9: CASH POOLING INTERCOMPANY RECEIVABLE In 2025 and 2024 the Company participated in a cash pooling agreement with AI Sirona (Luxembourg) Acquisition SARL (the ultimate parent entity of Zentiva Group, a.s.). Through the c ash pooling arrangements AI Sirona (Luxembourg) Acquisition SARL manages centrally the surplus cash and the short- term liquidity needs of the subsidiaries. The cash deposits/drawdowns under the cash pooling agreement are subject to interest rates based on 3M ROBOR rate and applicable mark -up based on valid Group transfer pricing policy. The total interest income for cash-pooling transactions during the year is in the amount of RON 9,849,268 (31.03.2024: interest income in the amount of RON 9,006,645). As of March 31, 2025 the balance of cash pooling deposit is RON 655,521,335 (December, 31 2024: RON 645,672,067).
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 16 NOTE 10: ISSUED CAPITAL AND RESERVES Share Capital 31 March 2025 31 December 2024 Number Number Ordinary shares subscribed capital 697,017,040 697,017,040 31 March 2025 31 December 2024 RON / share RON / share Ordinary shares nominal value 0.1 0.1 31 March 2025 31 December 2024 RON RON Share capital 69,701,704 69,701,704 The company’s share capital is fully paid on March 31, 2025 and December 31,2024. Shareholding structure 31 March 2025 (%) 31 December 2024 (%) Zentiva Group AS 99.9736 95.9486 Other minority shareholders 0.0264 4.0514 100% 100% As of December 31, 2024, Zentiva Group a.s. held 95.9486% of the Company's shares, the reminder of the shares being held by other minority shareholders. Between 25 September an d 8 October 2024 the majority shareholder (Zentiva Group a.s.) carried out a public purchase offer addressed to all the shareholders. Within the Public Offer, Zentiva Group a.s. together with the person that acted jointly with, respectively Zentiva SA, acquired a number of 319,649 shares, representing 0.0459% of Zentiva SA’s share capital and 1.1394% of the offer’s subject matter. The Majority Shareholder is acting jointly with Zentiva SA which holds a number of 183,891 treasury shares, representing a 0.0264% stake of the Company’s share capital. On 14 November 2024, the Financial Supervisory Authority approved the announcement for initiating the procedure of the minority shareholders withdrawal at the price of RON 4.5134 / share. Following this decision, on 21 November 2024 Zentiva SA was suspended from trading on the Bucharest Stock Exchange. The Company is still considered listed until final decision from Financial Supervisory Authority is obtained. The new shareholding structure was registered with the Trade Registry on 7 February 2025.
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 17 NOTE 10: ISSUED CAPITAL AND RESERVES (continued) Reserves Total other reserves included in the capital components: 31 March 2025 31 December 2024 Legal reserves 13,940,341 13,940,341 Other reserves (other funds) 186,777,505 186,472,774 Revaluation reserves 65,023,715 65,023,715 Retained earnings 1,136,405,370 1,081,482,349 Total other reserves 1,402,146,931 1,346,919,179 NOTE 11: PROVISIONS Provisions for taxes Environmental provision Other provisions Total On 1 January 2025 2,878,428 1,265,568 1,122,785 5,266,781 Increase - - 127,018 127,018 Reversal - - - - On 31 March 2025 2,878,428 1,265,568 1,249,803 5,393,799 Current 2,878,428 - 347,385 3,225,813 Long term - 1,265,568 902,418 2,167,986 Tax provisions As at 31 March 2025, the balance of the tax provision is in amount of RON 2,878,428 (31 December 2024: RON 2,878,428) The provisions for taxes are set for the amounts payable to the State Budget, provided that the respective amounts do not appear as a liability in relation to the State. Environmental provisions Environmental provisions were reassessed by specialists during the year 2024, so that the provision as of December 31, 2024 and March 31, 2025 is in amount of RON 1,265,568. This represents expenses related to ecological rehabilitation and soil and underground water monitoring. NOTE 12: PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS Company applies an employee defined benefit plan. The plan requires the Company to pay social security contributions for the employees in the public pension fund. In the normal course of business, the Company makes payments to the Romanian State for on behalf of its employees. All Company employees are members of the Romanian State pension plan. The Company does not operate any other pension plan or post-retirement benefit plan except for the retirement benefits
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 18 NOTE 12: PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS (continued) plan detailed below and, consequently, has no obligation concerning pensions. In addition, the Company is not under the obligation to provide additional benefits to former or current employees. Benefits granted upon retirement: According to the Collective Labor Agreement, the Company grants to its employees a variable number of salaries depending on length of service within the Company. According to P1 Plan, upon retirement, retirees receive a bonus depending on their length of service within the Company as follows: ➢ Up to 10 years in the Company, ½ average gross salary at company level; ➢ 10 - 20 years within the Company, 1 average gross salary at company level; ➢ 20 - 30 years within the Company, 2 average gross salary at company level; ➢ Over 30 years within the Company, 3 average gross salaries at company level. In addition, according to P2 Plan, when employees turn 50, in case the employees have completed 5 years of continuous service in the company, they receive a bonus based on their length of service within the Company as follows: ➢ 5 - 15 years in the Company, ½ average gross employee salary; ➢ Over 15 years in the Company, one average gross employee salary. At the same time, depending on the length of service at the Company, the employees receive some benefits in fixed amounts, which start with 400 RON upon completion of 2 years in the Company and reach 3,800 RON upon completion of 36 years in the Company. Provisions for pensions and other similar obligations are estimated based on the collective labor agreement of the Company by a third-party specialist. As of March 31, 2025 and December 31, 2024 these provisions are in total amount of RON 7,945,130. NOTE 13: TRADE PAYABLES AND OTHER PAYABLES Trade payables and other payables 31 March 2025 31 December 2024 Trade payables 89,844,256 98,069,071 Trade payables to related parties 150,224,199 96,132,783 Total 240,068,456 194,201,854 Other current liabilities 31 March 2025 31 December 2024 Wages and salaries payable 23,569,638 25,447,198 Social security contributions and salary taxes 9,671,050 6,156,703 Claw back tax (*) 23,590,638 16,426,375 Other taxes 1,942,520 3,005,377 Other liabilities 5,022,415 5,022,430 Total 63,796,261 56,058,082
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 19 NOTE 14: RELATED PARTY DISCLOSURE Details about related parties: Company name Nature of relation Transaction type Country of origin Registe red office AI Sirona (Luxembourg) Acquisition S.à.r.l Parent of Zentiva Group AS Holds cash pooling Luxembourg Luxembourg Labormed Pharma Trading SRL Company under common control Sale of goods and services Romania Bucharest Labormed Pharma SA Company under common control Provision of services Romania Bucharest Zentiva Group A.S. Majority shareholder Purchases /revenue from services Czech Republic Prague Zentiva Italia Company under common control Purchases of goods Italy Milan Zentiva, K.S. Company under common control Purchases/ Sale of goods and provision of services Czech Republic Prague Zentiva Pharma GMBH Company under common control Purchases/ Sale of goods and provision of services Germany Frankfurt Zentiva Private LTD Company under common control Purchases of goods India Mumbai Zentiva Pharma UK Limited Company under common control Provision of services UK London Zentiva ES Company under common control Provision of services Spain Madrid Payables and receivables from affiliated entities and other related parties ➢ Receivables from affiliated entities / other related parties 31 March 2025 31 December 2024 Labormed Pharma Trading SRL 31,140,152 21,264,499 Labormed Pharma SA 4,673,213 1,403,283 Zentiva K.S. 341,938,902 232,348,476 Zentiva Group A.S. 3,574,865 3,574,865 Total 380,682,276 258,591,123 Zentiva K.S. – prepayments 644,856 1,017,827 Total 381,327,132 259,608,950 Al Sirona (Luxembourg) Acquisition S.à.r.l – cash pooling 655,521,335 645,672,067
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 20 NOTE 14: RELATED PARTY DISCLOSURE (continued) ➢ Payables to the affiliated entities / other related parties 31 March 2025 31 December 2024 Labormed Pharma Trading SRL 19,884,482 15,754,981 Labormed Pharma SA 3,897,807 2,018,054 Zentiva K.S. 48,684,641 14,397,415 Zentiva Group A.S 68,275,617 55,730,467 Zentiva ES 109,496 - Zentiva Italia 151,600 81,688 Zentiva Private LTD 9,220,556 8,150,178 Total 150,224,199 96,132,783 Information regarding the transactions with the affiliated entities and other related parties ➢ Sales of goods and services 31 March 2025 31 March 2024 Labormed Pharma Trading SRL 5,495,891 5,923,199 Labormed Pharma SA 2,832,303 5,288,079 Zentiva K.S. 98,176,301 90,011,541 Zentiva Group A.S - 3,458,556 Total 106,504,495 104,681,375 ➢ Purchase of goods and services 31 March 2025 31 March 2024 Labormed Pharma Trading SRL 3,243,496 2,792,146 Labormed Pharma SA 1,734,652 450,028 Zentiva K.S. 24,256,025 41,968,680 Zentiva Group A.S. 12,510,518 7,435,648 Zentiva ES 102,640 - Zentiva Private LTD 9,217,154 601,765 Total 51,064,484 53,248,267 NOTE 15: FINANCIAL RATIOS Ratio Name Formula 31 March 2025 31 March 2024 Current Liquidity Ratio Current Assets / Current Liabilities 4.9 4.1 Indebtedness Ratio Long Term Debt / Shareholders’ Equity x 100 0% 0% Debtors Days Ratio Average Customers Balance / Turnover x 90 202 152 Assets Turnover Ratio Turnover / Non Current Assets 0.9 0.9
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ZENTIVA S.A. Notes to the Financial Statements For the period ended March 31, 2025 (all amounts are expressed in RON, unless specified otherwise) 21 NOTE 15: FINANCIAL RATIOS (continued) The current liquidity ratio has increased compared to the same period last year. As of March 31, 2025, the current liquidity indicator is 4.9 (March 31, 2024: 4.1) The company has no long-term debt. The duration of debt collection, respectively the number of days until which debtors pay their debts to the company has increased compared to the same period from last year, especially due to increase of trade receivables from related parties. NOTE 16: EVENTS OCCURRING AFTER THE REPORTING PERIOD There were no subsequent events that would affect the financial statements of the Company as of March 31, 2025. Administrator, Prepared by, Cocos Simona Nitulescu Daniel Chief Financial Officer Signature Signature