Medical Services in Poland Latest M&A deals exceeded our expectations

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1 25 June 2013 Europe Poland Medical Services Sector update Company name: Country: ISIN: Reuters: Bloomberg: Website: POLMED S.A. Poland PLPOLMD00011 POMP.WA POM PW Price target: 2.30 Rating: Hold Last price: 2.38 Market Cap. (PLNm) Company name: Country: ISIN: Reuters: Bloomberg: Website: ENEL-MED S.A. Poland PLENLMD00017 ENE.WA ENE PW Price target: 6.20 Rating: Buy Last price: 5.31 Market Cap. (PLNm) Company name: Country: ISIN: Reuters: Bloomberg: Website: Scanmed Multimedis S.A. Poland PLSCNMD00016 SCMP.WA SCM PW Price target: 5.90 Rating: Buy Last price: 4.90 Market Cap. (PLNm) Medical Services in Poland Latest M&A deals exceeded our expectations Since our last update in December 2012, two major transactions in the Polish medical services sector have been announced: first, the UK-based healthcare company Bupa Ltd bought the largest provider of comprehensive medical services in Poland LUX MED for PLN 1.6bn (EV/EBITDA 2011 = 14x). Second, in May 2013 Penta Investments, a Czech private equity group, launched a takeover bid at PLN (EV/EBITDA 2012 = >18x) per share for the largest private hospital chain, EMC Instytut Medyczny S.A. Both transactions, whose value exceeded our expectations, clearly show the attractiveness of the Polish medical services sector both for strategic and financial investors. The consolidation process will go on as there are too many small providers of medical services on the Polish market. Two weeks ago, Polmed, a chain of 21 medical centers, announced that it was looking for a strategic partner, who could help it with further expansion. However, in our view the most interesting listed companies from investors perspective are Scanmed Multimedis and ENEL- MED. The reasons are their size and their service offering, which comprises hospital, outpatient and diagnostic care. Similar to Western countries, we think that in the long run there will remain only a few large companies in Poland offering either hospital care, which generates the highest EBITDA margins, or comprehensive medical services. In this update, we have adjusted our valuation models for Polmed, ENEL-MED and Scanmed Multimedis. We have assumed lower profitability and CAPEX in the future and have taken into account M&A related sector news flow. Our most preferred stocks are currently Scanmed Multimedis (PLN 5.90; up from PLN 3.80) and ENEL-MED (PLN 6.20; up from PLN 4.60), for which we have increased the 12-months price targets (80% DCF, 20% peer group). For Polmed, we have lowered the rating from BUY to HOLD despite an increase of the PT from PLN 1.90 to PLN 2.30 after strong and profitable Q1/13. The reasons for our decision are (1) already very high EV/EBITDA 2011 multiple of >21x and (2) the fact that the Polish state insurance NFZ announced that it would favor providers, which offer a comprehensive portfolio of medical services. in PLNm POLMED ENEL-MED Scanmed Multimedis E E E Revenues EBITDA EBIT Net Income Adrian Kowollik ak@kalliwoda.com Dr. Norbert Kalliwoda nk@kalliwoda.com Phone: EPS BVPS RoE % 0.56% % -5.70% 0.27% 4.39% EBIT margin -6.31% 1.50% -4.07% -0.20% 5.30% 4.10% P/E n.a n.a n.a P/BVPS EV/EBITDA n.a

2 2 Medical Services in Poland Sector update June 2013 Content 1 Recent M&A activity How will the sector develop in the near future? POLMED S.A Centrum Medyczne ENEL-MED S.A Scanmed Multimedis S.A...19

3 3 Medical Services in Poland Sector update June Recent M&A activity Valuations of LUX MED and EMC Instytut Medyczny exceed our expectations On 21 December 2012, LUX MED s owner Mid Europa Partners, a London-based private equity group, announced that it had found a buyer for its shareholding. The investor turned out to be Bupa Ltd (British United Provident Association), a UK-based healthcare group with 11.8m customers worldwide, 54,000 employees and 2012 sales of GBP 8.4bn. Although with 114 medical centers and >1.2m customers LUX MED is the market leader in Poland, the price, which Bupa paid for the provider of comprehensive medical services, exceeded our expectations by far as it equaled an EV/EBITDA 2011 multiple of 14x (we expected 10-12x). The transaction clearly showed, how attractive the Polish medical services sector is for investors, and led to a rally on the stock market, with medical service providers gaining in some cases >50% in just a week. Then, the next big news was released on 28 May It turned out that the Gerber family, which founded the largest Polish hospital chain EMC Instytut Medyczny S.A. (it operates 8 hospitals and 16 medical centers), agreed with the Prague-based private equity group Penta Investments (has over EUR 400m invested in the medical sector) to sell its 38.4% stake in the company. The price of PLN (12.6% above last day s closing), which Penta paid, values EMC with an even higher EV/EBITDA (>18x) than LUX MED. In our view, the very high multiple, which Penta was ready to pay, results from EMC s market position and the fact that hospital care generates the highest EBITDA margins in the long run. PZU looks set to prevent complete takeover of EMC by Penta After signing the agreement with the Gerber family, Penta announced a public takeover bid for the remaining shares of EMC, which will end on 18 July It has already made clear that it will not increase the bid price (PLN 18.80) further. Although we believe that the price is highly attractive, it looks like Penta will not be able to acquire 100% of EMC Instytut Medyczny. The reason is PZU, the largest insurer in Poland and the CEE region, which since the end of May has increased its stake in EMC from previously 11.6% to 21.2%. However, at the same time PZU made clear that it wants to remain a long- term investor (it has already been invested in EMC for several years) and would not reject a de-listing. In our view, it would be very positive if PZU was to actively take part in the consolidation of the Polish medical services sector. Together with Penta and EMC, it could create something like Bupa, meaning a provider of both medical services and insurance products. 2 How will the sector develop in the near future? Consolidation will go on The Polish medical services sector remains highly attractive for M&A. In our last update in December, we have counted 11 providers of medical services, which are listed on the main market and NewConnect segment of the Warsaw Stock Exchange alone. In addition, there are also not listed operators such as Grupa Nowy Szpital Sp. z.o.o., an operator of 12 hospitals. Most of the medical companies in Poland are in discussions with potential investors as they know that size offers significant cost advantages in the industry and only larger companies with a countrywide presence matter as partners for insurance firms and corporate customers.

4 4 Medical Services in Poland Sector update June 2013 Nevertheless, we believe that preferred acquisition targets are the largest firms offering a comprehensive portfolio of medical services, which is a trend also in Western Europe(according to a recent statement by the Head of Supervisory Board of the German healthcare company Rhön-Klinikum AG Eugen Münch the future belongs to large integrated providers of medical services ). The reasons are that (1) with such firms a potential investor can gain a strong foothold on the Polish market and also use them for further expansion (2) the Polish state insurance NFZ announced that it will favor such companies with regard to contracts. Given that with LUX MED and EMC Instytut Medyczny there are already two such platforms, due to the relatively small size of the Polish market (compared to Western markets) we think that there is only room left for one max. two additional ones. Takeovers of listed companies most likely to happen in 2014 or later Since 2011, results of the listed providers of medical services in Poland have been negatively impacted by large investments into new facilities and equipment. While generating high fixed costs (e.g. it is essential for a new hospital to hire personnel first in order to be able to apply for a contract from public insurer NFZ), new medical facilities did not reach the break-even as quickly as planned. For 2013, we expect that capacity utilization will improve markedly and that ENEL-MED, Polmed and Scanmed will generate positive results at least on the EBITDA level. As investors mainly value providers of medical services by using historical (last year s) EV/EBITDA ratio, we think that it would be best from shareholders perspective if the medical companies found investors in 2014 or later.

5 5 Medical Services in Poland Sector update June POLMED S.A. Company description Polmed S.A provides healthcare services to individuals as well as corporate and insurance clients such as Michelin, E.LeClerc, PGNiG and PZU. Its services include among others basic and specialist medical care, full medical diagnostics, rehabilitation, vaccinations and laboratory treatments, which are offered through a network of 21 proprietary medical centres and over 900 renowned medical partners across Poland. The company was founded in 1999 and is headquartered in Starogard Gdanski, approx. 40 km from the city of Gdansk. It consists of two fully-owned subsidiaries, Polmed Zdrowie Sp. z.o.o and Polmed Development Sp. z.o.o. Polmed has been listed on the Warsaw Stock Exchange since October 2010 and, according to our estimates, currently employs in total c. 600 people (own employees and external consultants/doctors). Financials POLMED S.A. Medical centers Reuters: POMP.WA Bloomberg: POM PW Last price: PLN 2.38 Market capitalisation: PLN 67.47m Free float: 3.5% Chart POLMED S.A. in PLN E 2014E EPS ROE 10.7% 7.9% -9.2% -10.3% 0.6% 4.9% P/E P/FCF EV/Sales EV/EBITDA Dividend yield 1.7% 1.7% 1.3% 0.0% 0.1% 0.7% P/Tangible BVPS Source: Dr. Kalliwoda Research GmbH, company information Shareholder structure Holder Name Position % O/S Polmed-Medical Ltd. (Cyprus)* 15,315, % 52 weeks High: PLN 2.40 Low: PLN 1.32 NPN II Med S.a.r.l** 12,035, % * CEO and Vice President both own 50% ** Consultant to the fund is Krokus Private Equity Source: Dr. Kalliwoda Research GmbH, Thomson Reuters Knowledge, company website Stock performance 4 weeks: % 1 year: % 3 years: n.a.

6 6 Medical Services in Poland Sector update June 2013 PLNm Revenues - yoy growth E 2014E 2015E 2016E % Individual patients; 6.2% Sales split 2012 Others; 2.9% Work medicine/insur ances/other medical centers; 60.9% NFZ; 30.0% Return development (%) E 2014E 2015E Return on Assets Return on Common Equity Margin trends EBIT margin Net margin Return on Assets E 2014E 2015E Liquid funds (PLNm) E 2014E 2015E CAPEX (PLNm) E 2014E 2015E 5.25 Current ratio 3.00 P/Tangible BVPS E 2014E 2015E E 2014E 2015E

7 7 Medical Services in Poland Sector update June 2013 SWOT Strengths Market leader in Northern Poland Focus on medical centers, which require smaller investments and achieve the breakeven much faster than hospitals Diversified sales structure Less indebted than most competitors Management own majority of shares Additional management support from major investor NPN/Krokus Weaknesses Extension of the scope of operations is associated with higher costs e.g. for additional medical staff and sales personnel Very low free float Limited negotiation capacity regarding remuneration with specialized doctors In contrast to contracts with the public health insurance NFZ, subscriptions (mainly with corporate clients) can be overexploited Strong dependence on one client, PGNiG (KRe: 35% of 2012 revenues) Already high valuation Opportunities Business model has high operating leverage; with existing infrastructure and personnel margins can increase very quickly Opening of new medical centres across Poland and potential acquisition of a smaller competitor Despite high income growth and a quickly ageing population, healthcare spending per capita in Poland is still far behind Western European levels The Polish President and the current government are strong supporters of private healthcare services; a new law is in preparation Polmed is an attractive acquisition target due to its Poland-wide presence Threats Strong dependence on government regulation Intensifying competition Loss of qualified medical personnel Wrong choice of location for medical centres Liquidity risk relating to development of medical infrastructure Risks relating to co-operation with external partners Change of conditions relating to co-operation with NFZ Legal risks relating to medical mistakes Challenges in terms of managing a larger and geographically dispersed entity

8 8 Medical Services in Poland Sector update June 2013 Q1/13 results vs. Q1/12 and our estimates in PLNm Q1/13 Q1/13E Q1/12 Q1/13 vs Q1/13E Q1/13 vs Q1/12 Net sales % 30.9% EBITDA % % EBITDA margin 6.8% 6.5% -1.0% EBIT % % EBIT margin 1.6% -0.4% -7.5% Net income % % Net margin 0.5% -1.6% -6.2% Source: Company information, Dr. Kalliwoda Research GmbH Share in total costs Q1/13 vs. Q1/12 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 84.56% 94.06% Cost of sales (excl. D&A) 8.98% Administration costs 5.76% 5.20% 6.42% 7.98% 0.33% Q1/13 Q1/12 Depreciation & amortization Other operating expenses Source: Company information, Dr. Kalliwoda Research GmbH Financial results and forecasts E E 2014E in PLNm expect. actual old new old new Net sales EBITDA EBITDA margin 0.9% -0.9% 7.7% 6.8% 10.7% 8.8% EBIT EBIT margin -4.7% -6.3% 2.2% 1.5% 5.5% 3.8% Net income Net margin -6.0% -7.7% 0.9% 0.3% 3.7% 2.3% Source: Company information, Dr. Kalliwoda Research GmbH

9 WACC 9 Medical Services in Poland Sector update June 2013 Quarterly results and estimates E in PLNm Q1/11 Q2/11 Q3/11 Q4/ Q1/12 Q2/12 Q3/12 Q4/ Net sales y-o-y change n.a n.a n.a n.a 32.8% 48.7% 30.7% 38.2% 50.7% 41.7% EBITDA EBITDA margin 23.3% 3.6% 4.4% -40.6% -3.8% -1.0% 0.5% 0.0% -2.8% -0.9% EBIT EBIT margin 18.2% -0.9% -1.2% -46.7% -9.2% -7.5% -4.5% -5.4% -7.8% -6.3% Net income Net margin 14.8% 0.8% -1.6% -53.2% -11.2% -6.2% -8.4% -5.6% -10.0% -7.7% in PLNm Q1/13 Q2/13E Q3/13E Q4/13E 2013E Net sales y-o-y change 30.9% 22.6% 25.7% 14.9% 23.0% EBITDA EBITDA margin 6.8% 7.1% 7.2% 6.3% 6.8% EBIT EBIT margin 1.6% 1.6% 1.7% 1.3% 1.5% Net income Net margin 0.5% 0.4% 0.6% -0.2% 0.3% Source: Company information, Dr. Kalliwoda Research GmbH DCF model in PLNm 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E Net sales (y-o-y change) 23.0% 21.0% 20.0% 10.0% 8.0% 6.0% 4.0% 3.5% 3.0% EBIT (EBIT margin) -6.3% 1.5% 3.8% 6.6% 8.9% 10.6% 10.6% 10.5% 10.4% NOPLAT Depreciation & amortisation = Net operating cash flow Total investments (Capex and WC) Capital expenditure Working capital = Free cash flow (FCF) PV of FCF's PV of FCFs in explicit period PV of FCFs in terminal period Enterprise value (EV) Net cash / - net debt (31 Dec 2013) Shareholder value Number of shares outstanding (m) Terminal EBIT margin WACC 10.5% 7.4% 8.4% 9.4% 10.4% 11.4% 12.4% 13.4% Cost of equity 12.5% 6.5% Pre-tax cost of debt 7.0% 7.5% Normal tax rate 19.0% 8.5% After-tax cost of debt 5.7% 9.5% Share of equity 70.0% 10.5% Share of debt 30.0% 11.5% Fair value per share in PLN (today) % Fair value per share in PLN (in 12 months) 2.54 Source: Dr. Kalliwoda Research GmbH

10 10 Medical Services in Poland Sector update June 2013 Peer group valuation EV/Sales EV/EBITDA P/E P/BVPS EBITDA margin Net gearing Company 2013E 2014E 2013E 2014E 2013E 2014E Latest 2012 Latest MediClin AG (EUR) 0.48x 0.47x 11.16x 7.27x n.a 19.07x 1.27x 4.02% 33.65% HCA Holdings Inc. (USD) 1.35x 1.28x 7.31x 6.74x 12.00x 9.89x n.a 30.38% n.a Rhön-Klinikum AG (EUR) 1.09x 1.04x 10.03x 8.67x 21.74x 16.20x 1.49x 10.48% 54.96% Ramsay Health Care Ltd. (AUD) 1.87x 1.72x 12.49x 11.27x 25.69x 22.26x 4.95x 13.98% 63.37% Universal Health Services Inc. (USD) 1.40x 1.31x 8.33x 7.58x 14.68x 12.70x 2.28x 18.48% % Tenet Healthcare Corp (USD) 0.99x 0.94x 7.20x 6.55x 14.63x 11.68x 4.47x 12.59% % LifePoint Hospitals Inc. (USD) 1.07x 1.01x 7.18x 6.51x 16.47x 13.91x 1.09x 16.84% 76.77% Select Medical Holdings Corp (USD) 0.89x 0.88x 6.95x 7.03x 8.72x 8.45x 1.50x 9.70% % Vanguard Health Systems Inc. (USD) 0.58x 0.57x 6.42x 6.10x 15.98x 15.46x 2.77x 9.85% % Generale de Sante SA (EUR) 0.71x 0.70x 5.62x 5.47x 12.85x 12.28x 1.67x 13.96% % Centrum Medyczne Enel-Med S.A. (PLN) 0.83x 0.72x 10.96x 8.10x n.a x 2.90x 3.92% % Scanmed Multimedis S.A. (PLN) 1.20x 0.94x 11.45x 7.94x x 21.10x 1.60x 9.90% 15.57% Median 1.03x 0.94x 7.82x 7.15x 15.33x 14.69x 1.67x 11.54% % Polmed S.A. (PLN) 1.48x 1.22x 21.69x 13.86x n.a 43.01x 2.13x -0.88% 48.70% Premium/Discount 43.8% 29.9% 177.3% 94.0% n.a 192.8% 28.0% Fair value Polmed (PLN) 1.22 Source: Thomson Reuters Knowledge, Dr. Kalliwoda Research GmbH Profit and loss statement in PLNm E 2014E 2015E 2016E Net sales Cost of goods sold Gross profit Other operating income Administration costs Other operating expenses EBITDA Depreciation & Amortization EBIT Net financial results EBT Income taxes Net income / loss EPS DPS Source: Dr. Kalliwoda Research GmbH, company information

11 11 Medical Services in Poland Sector update June 2013 Balance sheet in PLNm E 2014E 2015E 2016E Current assets Cash and cash equivalents Inventories Trade accounts and notes receivables Prepaid expenses, deferred charges and others Non-current assets Property, plant and equipment Intangible assets Goodwill Deferred tax assets Long-term prepaid expenses Total assets Current liabilities Trade payables Short-term financial debt Other liabilities Advances received Long-term liabilities Long-term financial debt Pension provision Deferred tax liabilities Shareholders equity Total consolidated equity and debt Source: Dr. Kalliwoda Research GmbH, company information Ratios Fiscal year E 2014E 2015E 2016E Gross margin 33.98% 23.87% 6.06% 9.69% 17.00% 19.05% 21.65% 23.65% EBITDA margin 21.16% 15.79% -3.82% -0.88% 6.83% 8.83% 11.37% 13.37% EBIT margin 19.30% 13.07% -9.16% -6.31% 1.50% 3.80% 6.64% 8.94% Net margin 16.32% 12.78% % -7.70% 0.32% 2.32% 4.74% 6.65% Return on equity (ROE) 10.73% 7.86% -9.23% % 0.56% 4.86% 11.24% 15.78% Return on assets (ROA) 8.66% 5.48% -5.71% -5.04% 1.41% 3.63% 7.06% 9.87% Return on capital employed (ROCE) 7.54% 6.00% -6.38% -7.11% 1.47% 4.45% 8.98% 12.73% Net debt (in PLNm) Net gearing % % 28.81% 43.60% 48.41% 51.61% 46.34% 35.69% Equity ratio 86.58% 80.98% 63.11% 59.42% 53.29% 53.21% 54.42% 58.34% Current ratio Quick ratio Net interest cover Net debt/ebitda Tangible BVPS Capex/Sales % % % -6.07% -6.40% -8.28% -7.44% -6.89% Working capital/sales -0.83% 3.12% 5.25% 0.82% 1.41% 1.50% 1.65% 1.74% EV/Sales EV/EBITDA EV/EBIT P/Tangible BVPS P/E P/FCF Source: Dr. Kalliwoda Research GmbH, company information

12 12 Medical Services in Poland Sector update June ENEL-MED S.A. Company description Centrum Medyczne ENEL-MED S.A. was founded in 1993 by Adam Rozwadowski, its current CEO, and was originally a dental clinic. Today, it is the third largest private provider of medical services in Poland. The company operates two hospitals, 12 medical centers, five medical facilities at company sites, 10 diagnostic laboratories and co-operates with more than 1,000 medical partners throughout Poland. ENEL-MED offers basic and specialised medical services, hospital care, rehabilitation, diagnostic imaging as well as teleradiology. At the end of December 2012, it had more than 1,400 corporate clients. Currently, the company employs in total c. 2,000 people (KRe). Financials Centrum Medyczne ENEL-MED S.A. in PLN E 2014E EPS ROE 0.8% 5.7% 11.5% -18.0% -5.7% 0.2% P/E P/FCF EV/Sales EV/EBITDA Dividend yield 0.0% 0.0% 0.6% 0.0% 0.0% 0.0% P/Tangible BVPS ENEL-MED S.A. Hospitals and medical centers Reuters: ENE.WA Bloomberg: ENE PW Last price: PLN 5.31 Market capitalisation: PLN m Free float: 16.1% Chart Source: Dr. Kalliwoda Research GmbH, company information Shareholder structure Holder Name Position % O/S Koremia Investments Ltd.* 7,124, % Versinus Ltd.** 7,123, % Generali PTE S.A. 2,377, % OFE PZU "Zlota Jesien" and DFE PZU 1,200, % Smerona Holdings Ltd.*** 992, % Elvestra Ltd.**** 972, % * owned by CEO Adam Rozwadowski ** owned by Head of Supervisory Board Anna Rozwadowska *** owned by Vice President Jacek Rozwadowski *** owned by Bartosz Rozwadowski 52 weeks High: PLN 5.87 Low: PLN 2.67 Stock performance 4 weeks: +5.99% 1 year: % 3 years: n.a. Source: Dr. Kalliwoda Research GmbH, company website

13 13 Medical Services in Poland Sector update June 2013 PLNm 35 Revenues - yoy growth % Sales split E 2014E 2015E 2016E Fee-for-service; 8.3% NFZ; 13.9% Subscriptions & private health insurances; 77.8% Return development (%) E 2014E 2015E Return on Assets Return on Common Equity Margin trends EBIT margin Net margin Return on Assets E 2014E 2015E 7.00 Liquid funds (PLNm) 6 CAPEX (PLNm) E 2014E 2015E E 2014E 2015E 1.20 Current ratio 1 P/Tangible BVPS E 2014E 2015E E 2014E 2015E

14 14 Medical Services in Poland Sector update June 2013 SWOT Strengths Number 3 in Poland in terms of sales Offers all kinds of medical treatments including hospital care, basic and specialist care, rehabilitation, dentistry and diagnostics Very strong brand name in Poland; excellent market position in the biggest and richest Polish city Warsaw Diversified revenue sources: NFZ contracts, corporate and insurance clients, individuals The Rozwadowski family, which founded the company in 1993, owns majority of shares and heads the management team Focus on latest medical technologies and innovations: e.g. ENEL-MED was first in Poland to introduce teleradiology (digital transmission of medical images) High service standards: 95% of doctors have second level of specialization, ENEL- MED has the ISO:9001 certificate Weaknesses High operating loss in 2012 Net gearing amounted to 114.8% at the end of Q1/13 Current ratio is significantly below 1 Hospitals require double-digit million zloty investments and need up to 10 years to reach the break-even Opportunities Hospitals are most profitable in the long run Opening of additional hospitals and medical & diagnostic centers across Poland Despite high income growth and a quickly ageing population, healthcare spending in Poland per capita is still far behind Western European levels Diagnostics, where ENEL-MED is one of the market leaders, is a highly promising business area in Poland. For example, Poland is far behind the OECD average in terms of the number of magnetic resonances and computer tomographs per 1m inhabitants. Also, an increasing number of public hospitals outsources these services to specialised entities The Polish President and the current government are strong supporters of private healthcare services; a new law is currently in preparation Potential takeover by a private equity fund or strategic investor, who wants to gain a significant share in the Polish healthcare market Threats Strong dependence on government regulation and co-operation with NFZ Intensifying competition and loss of qualified medical personnel Wrong choice of external partners and of location for medical centres Liquidity risks relating to development of medical infrastructure Legal risks relating to medical mistakes

15 15 Medical Services in Poland Sector update June 2013 Q1/13 results vs. Q1/12 and our estimates in PLNm Q1/13 Q1/13E Q1/12 Q1/13 vs Q1/13E Q1/13 vs Q1/12 Net sales % 8.2% EBITDA % 113.4% EBITDA margin 6.6% 5.8% 3.3% EBIT % -71.2% EBIT margin -1.1% 0.9% -4.3% Net income % -56.1% Net margin -2.2% -0.2% -5.3% Source: Company information, Dr. Kalliwoda Research GmbH Share in total costs Q1/13 vs. Q1/12 10% 9% 87.39% 89.68% 8% 7% 6% 5% 4% 3% 2% 1% % Cost of sales (excl. D&A) 3.30% 3.58% 3.21% 3.55% Distribution costs Administration costs 7.70% 7.59% 0.36% 0.31% Depreciation & Other operating amortization expenses Q1/13 Q1/12 Source: Company information, Dr. Kalliwoda Research GmbH Financial results and forecasts E E 2014E in PLNm expect. actual old new old new Net sales EBITDA EBITDA margin 5.5% 3.9% 8.9% 7.6% 10.1% 8.9% EBIT EBIT margin -2.5% -4.1% 1.0% -0.2% 2.3% 1.3% Net income Net margin -3.1% -4.9% -0.2% -1.2% 0.9% 0.0% Source: Company information, Dr. Kalliwoda Research GmbH

16 WACC 16 Medical Services in Poland Sector update June 2013 Quarterly results and estimates E in PLNm Q1/11 Q2/11 Q3/11 Q4/ Q1/12 Q2/12 Q3/12 Q4/ Net sales y-o-y change n.a n.a n.a n.a 20.7% 10.5% 8.5% 10.2% 5.8% 8.7% EBITDA EBITDA margin 12.1% 3.8% 12.4% 15.6% 11.1% 3.3% 5.5% 8.2% -1.2% 3.9% EBIT EBIT margin 5.8% 3.0% 5.5% 3.6% 4.4% -4.3% -6.7% -0.2% -5.2% -4.1% Net income Net margin 3.2% 0.7% 3.7% 2.1% 2.5% -5.3% -6.1% -1.7% -6.5% -4.9% in PLNm Q1/13 Q2/13E Q3/13E Q4/13E 2013E Net sales y-o-y change 8.2% 17.3% 20.4% 18.0% 16.0% EBITDA EBITDA margin 6.6% 6.8% 8.0% 8.9% 7.6% EBIT EBIT margin -1.1% 0.2% 0.4% -0.3% -0.2% Net income Net margin -2.2% -1.4% -0.4% -0.9% -1.2% Source: Company information, Dr. Kalliwoda Research GmbH DCF model in PLNm 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E Net sales (y-o-y change) 16.0% 15.5% 14.7% 10.0% 8.0% 6.0% 4.5% 3.6% 3.0% EBIT (EBIT margin) -0.2% 1.3% 2.8% 4.5% 6.0% 8.0% 7.9% 7.8% 7.7% NOPLAT Depreciation & amortisation = Net operating cash flow Total investments (Capex and WC) Capital expenditure Working capital = Free cash flow (FCF) PV of FCF's PV of FCFs in explicit period PV of FCFs in terminal period Enterprise value (EV) Net cash / - net debt (31 March 2013) Shareholder value Number of shares outstanding (m) Terminal EBIT margin WACC 10.8% 4.8% 5.8% 6.8% 7.8% 8.8% 9.8% 10.8% Cost of equity 13.0% 6.8% Pre-tax cost of debt 7.0% 7.8% Normal tax rate 19.0% 8.8% After-tax cost of debt 5.7% 9.8% Share of equity 70.0% 10.8% Share of debt 30.0% 11.8% Fair value per share in PLN (today) % Fair value per share in PLN (in 12 months) 6.51 Source: Dr. Kalliwoda Research GmbH

17 17 Medical Services in Poland Sector update June 2013 Peer group valuation EV/Sales EV/EBITDA P/E P/BVPS EBITDA margin Net gearing Company 2013E 2014E 2013E 2014E 2013E 2014E Latest 2012 Latest MediClin AG (EUR) 0.48x 0.47x 11.16x 7.27x n.a 19.07x 1.27x 4.02% 33.65% HCA Holdings Inc. (USD) 1.35x 1.28x 7.31x 6.74x 12.00x 9.89x n.a 30.38% n.a Rhön-Klinikum AG (EUR) 1.09x 1.04x 10.03x 8.67x 21.74x 16.20x 1.49x 10.48% 54.96% Ramsay Health Care Ltd. (AUD) 1.87x 1.72x 12.49x 11.27x 25.69x 22.26x 4.95x 13.98% 63.37% Universal Health Services Inc. (USD) 1.40x 1.31x 8.33x 7.58x 14.68x 12.70x 2.28x 18.48% % Tenet Healthcare Corp (USD) 0.99x 0.94x 7.20x 6.55x 14.63x 11.68x 4.47x 12.59% % LifePoint Hospitals Inc. (USD) 1.07x 1.01x 7.18x 6.51x 16.47x 13.91x 1.09x 16.84% 76.77% Select Medical Holdings Corp (USD) 0.89x 0.88x 6.95x 7.03x 8.72x 8.45x 1.50x 9.70% % Vanguard Health Systems Inc. (USD) 0.58x 0.57x 6.42x 6.10x 15.98x 15.46x 2.77x 9.85% % Generale de Sante SA (EUR) 0.71x 0.70x 5.62x 5.47x 12.85x 12.28x 1.67x 13.96% % Polmed S.A. (PLN) 1.48x 1.22x 21.69x 13.86x x 43.01x 2.13x -0.88% 48.70% Scanmed Multimedis S.A. (PLN) 1.20x 0.94x 11.45x 7.94x 42.90x 21.10x 1.60x 9.90% 15.57% Median 1.08x 0.98x 7.82x 7.15x 15.98x 14.69x 1.67x 11.54% 76.77% Centrum Medyczne Enel-Med S.A. (PLN) 0.83x 0.72x 10.96x 8.10x n.a x 2.90x 3.92% % Premium/Discount -22.6% -26.1% 40.2% 13.4% n.a % 74.2% Fair value Enel-Med (PLN) 4.36 Source: Thomson Reuters Knowledge, Dr. Kalliwoda Research GmbH Profit and loss statement in PLNm E 2014E 2015E 2016E Net sales Cost of goods sold Gross profit Other operating income Distribution costs Administration costs Other operating expenses EBITDA Depreciation & Amortization EBIT Net financial results EBT Income taxes Net income / loss EPS DPS Source: Dr. Kalliwoda Research GmbH, company information

18 18 Medical Services in Poland Sector update June 2013 Balance sheet in PLNm E 2014E 2015E 2016E Current assets Cash and cash equivalents Inventories Trade accounts and notes receivables Prepaid expenses, deferred charges and others Non-current assets Property, plant and equipment Intangible assets Goodwill Long-term receivables Long-term financial assets Deferred tax assets Total assets Current liabilities Trade payables Short-term financial debt Other short-term liabilities Pension provision Other provisions Advances received Long-term liabilities Long-term financial debt Pension provision Deferred tax liabilities Shareholders equity Total consolidated equity and debt Source: Dr. Kalliwoda Research GmbH, company information Ratios Fiscal year E 2014E 2015E 2016E Gross margin 17.76% 35.50% 34.17% 28.21% 31.90% 33.20% 34.60% 36.50% EBITDA margin 9.22% 10.56% 11.08% 3.92% 7.60% 8.90% 10.20% 11.70% EBIT margin 2.37% 3.30% 4.44% -4.07% -0.20% 1.30% 2.80% 4.50% Net margin 0.10% 0.70% 2.46% -4.88% -1.17% 0.04% 1.29% 2.81% Return on equity (ROE) 0.78% 5.65% 11.46% % -5.70% 0.24% 8.10% 16.25% Return on assets (ROA) 3.41% 5.35% 5.97% -5.23% 0.13% 2.36% 4.89% 8.00% Return on capital employed (ROCE) 1.40% 6.60% 6.40% -8.34% -0.39% 2.72% 6.26% 11.00% Net debt (in PLNm) Net gearing % % 65.83% % % % % 91.56% Equity ratio 24.24% 23.85% 44.99% 37.18% 32.79% 30.40% 31.98% 40.14% Current ratio Quick ratio Net interest cover Net debt/ebitda Tangible BVPS Capex/Sales -5.32% 0.38% % -9.69% -8.38% -9.34% -8.92% -7.35% Working capital/sales -8.87% -4.44% -5.27% -3.24% -2.38% -1.81% -1.25% -0.71% EV/Sales EV/EBITDA EV/EBIT P/Tangible BVPS P/E P/FCF Source: Dr. Kalliwoda Research GmbH, company information

19 19 Medical Services in Poland Sector update June 2013 Scanmed Multimedis S.A. Company description Scanmed Multimedis S.A., which is based in Krakow/Poland, has been on the market for 10 years. The company operates one hospital as well as 22 specialised medical, rehabilitation and diagnostic centers in the largest Polish cities Krakow, Warsaw, Poznan, Wroclaw, Katowice and Gdansk. In addition, it co-operates with 300 partners across Poland. Scanmed Multimedis Group consists of the subsidiaries Scanmed S.A. (100%, operates Sw. Rafal hospital in Krakow), Medrun S.A. (100%, two multiprofile medical centers in Warsaw and Wroclaw), Akamedik Services (51%, basic medical care in Warsaw), Scanrent (100%, property management company), Scan Development (49%; leasing and management of hospital Sw. Rafal) and Scan Diagnostics (100%, diagnostic centers in Krakow). Scanmed Multimedis has been listed in the NewConnect segment of the Warsaw Stock Exchange since August 2011 and had c. 550 employees (KRe) as of March Financials Scanmed Multimedis S.A. Hospitals and medical centers Reuters: SCMP.WA Bloomberg: SCM PW Last price: PLN 4.90 Market capitalisation: PLN 98.49m Free float: 8.6% Chart Scanmed Multimedis S.A. in PLN E 2014E 2015E EPS ROE -3.2% 2.0% 0.3% 4.4% 7.2% 11.2% P/E P/FCF EV/Sales EV/EBITDA Dividend yield 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% P/Tangible BVPS Source: Dr. Kalliwoda Research GmbH, company information Shareholder structure Holder Name Position % O/S 52 weeks High: PLN 5.15 Low: PLN 1.93 Black Lion Fund 10,725, % Investors TFI S.A. 4,500, % Promed Invest Sp. z.o.o 1,121, % Carint Investment S.A. 1,019, % Altus TFI S.A. 1,006, % Stock performance 4 weeks: +0.20% 1 year: % 3 years: n.a. Source: Dr. Kalliwoda Research GmbH, company website

20 20 Medical Services in Poland Sector update June 2013 PLNm Revenues - yoy growth % 12 Sales split NFZ; 54.4% Individual patients; 22.5% Corporate clients; 23.1% E 2014E 2015E 2016E 2017E Return development (%) E 2014E 2015E 2016E Return on Assets Return on Common Equity Margin trends EBIT margin Net margin Return on Assets E 2014E 2015E 2016E Liquid funds (PLNm) CAPEX (PLNm) E 2014E 2015E 2016E E 2014E 2015E 2016E Current ratio E 2014E 2015E 2016E P/Tangible BVPS E 2014E 2015E 2016E

21 21 Medical Services in Poland Sector update June 2013 SWOT Strengths As the only company in Poland, Scanmed Multimedis (SCM) dedicates a chain of medical centers to basic medical care for students; students tend to go less often to doctors than others and thus are more profitable for the company Many students remain the company s customers after graduation and use commercial services (mainly fee-for-service) Focus on medical centers, which require smaller investments and achieve the breakeven much faster than hospitals SCM is one of very few medical service providers in Poland, which were profitable in 2012 Expansion strategy focuses on Polish cities/university towns e.g. Warsaw, Krakow, which have strong economies and are less affected by demographic change Diversified sales structure: NFZ, subscriptions, fee-for-service Cost structure of business model can be forecast; as only c. 4% of total revenues stem from subscriptions (KRe), there is a very low risk of over-usage of services Weaknesses Listing in the illiquid and intransparent NewConnect segment Low free float of 8.6% Opportunities Investments into new specialized medical centers in large university towns Increasing share of revenues from fee-for-service, which in contrast to subscriptions cannot be overexploited Despite high income growth and a quickly ageing population, healthcare spending per capita in Poland is still far behind Western European levels The Polish President and the current government are strong supporters of private healthcare services; a new law is currently in preparation Change to the more transparent main market of the Warsaw Stock Exchange within the next year SCM is an attractive acquisition target for a financial or strategic investor seeking to gain a strong foothold in Poland Threats Strong dependence on government regulation Intensifying competition Liquidity risk relating to development of medical infrastructure Loss of qualified medical personnel Legal risks relating to medical mistakes Challenges in terms of managing a large and Poland-wide entity

22 22 Medical Services in Poland Sector update June 2013 Q1/13 results vs. Q1/12 and our estimates in PLNm Q1/13 Q1/13E Q1/12 Q1/13 vs Q1/13E Q1/13 vs Q1/12 Net sales % 60.3% EBITDA % 85.9% EBITDA margin 13.4% 11.1% 11.6% EBIT % 36.8% EBIT margin 6.2% 6.1% 7.2% Net income % % Net margin 0.0% 5.1% 5.8% Source: Company information, Dr. Kalliwoda Research GmbH Financial results and forecasts E E 2014E in PLNm expect. actual old guidan. new old guidan. new Net sales EBITDA EBITDA margin 11.3% 9.9% 11.2% 11.5% 10.5% 12.0% 11.5% 11.9% EBIT EBIT margin 5.3% 3.3% 5.2% 4.2% 4.1% 6.0% 5.8% 5.5% Net income Net margin 2.0% 0.1% 3.9% 2.6% 4.7% 4.1% Source: Dr. Kalliwoda Research GmbH Quarterly results and estimates E in PLNm Q1/11 Q2/11 Q3/11 Q4/ Q1/12 Q2/12 Q3/12 Q4/ Net sales y-o-y change n.a n.a n.a n.a 88.6% 158.6% 67.7% 95.7% 107.9% 104.0% EBITDA EBITDA margin -1.9% 7.4% 8.5% 5.0% 5.5% 11.6% 11.4% 12.6% 5.4% 9.9% EBIT EBIT margin -6.6% 2.5% 3.9% 0.5% 0.8% 7.2% 5.8% 4.6% -2.0% 3.3% Net income Net margin -5.9% 2.8% 3.8% 0.6% 1.0% 5.3% 5.4% -2.1% -4.0% 0.1% in PLNm Q1/13 Q2/13E Q3/13E Q4/13E 2013E Net sales y-o-y change 60.3% 90.6% 17.7% 11.4% 37.2% EBITDA EBITDA margin 13.4% 9.3% 9.0% 10.3% 10.5% EBIT EBIT margin 6.2% 2.1% 3.0% 5.1% 4.1% Net income Net margin 0.0% 3.0% 4.1% 3.0% 2.6% Source: Company information, Dr. Kalliwoda Research GmbH

23 WACC 23 Medical Services in Poland Sector update June 2013 DCF model in PLNm 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E Net sales (y-o-y change) 37.2% 27.7% 15.0% 10.0% 8.0% 6.0% 4.5% 3.6% 3.0% EBIT (EBIT margin) 4.1% 5.5% 7.2% 8.6% 9.3% 9.3% 9.2% 9.1% 9.0% NOPLAT Depreciation & amortisation = Net operating cash flow Total investments (Capex and WC) Capital expenditure Working capital = Free cash flow (FCF) PV of FCF's PV of FCFs in explicit period PV of FCFs in terminal period Enterprise value (EV) Net cash / - net debt Shareholder value Number of shares outstanding (m) Terminal EBIT margin WACC 10.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% Cost of equity 12.5% 6.5% Pre-tax cost of debt 7.0% 7.5% Normal tax rate 19.0% 8.5% After-tax cost of debt 5.7% 9.5% Share of equity 70.0% 10.5% Share of debt 30.0% 11.5% Fair value per share in PLN (today) % Fair value per share in PLN (in 12 months) 6.25 Source: Dr. Kalliwoda Research GmbH Peer group valuation EV/Sales EV/EBITDA P/E P/BVPS EBITDA margin Net gearing Company 2013E 2014E 2013E 2014E 2013E 2014E Latest 2012 Latest MediClin AG (EUR) 0.48x 0.47x 11.16x 7.27x n.a x 1.27x 4.02% 33.65% HCA Holdings Inc. (USD) 1.35x 1.28x 7.31x 6.74x 12.00x 9.89x n.a 30.38% n.a Rhön-Klinikum AG (EUR) 1.09x 1.04x 10.03x 8.67x 21.74x 16.20x 1.49x 10.48% 54.96% Ramsay Health Care Ltd. (AUD) 1.87x 1.72x 12.49x 11.27x 25.69x 22.26x 4.95x 13.98% 63.37% Universal Health Services Inc. (USD) 1.40x 1.31x 8.33x 7.58x 14.68x 12.70x 2.28x 18.48% % Tenet Healthcare Corp (USD) 0.99x 0.94x 7.20x 6.55x 14.63x 11.68x 4.47x 12.59% % LifePoint Hospitals Inc. (USD) 1.07x 1.01x 7.18x 6.51x 16.47x 13.91x 1.09x 16.84% 76.77% Select Medical Holdings Corp (USD) 0.89x 0.88x 6.95x 7.03x 8.72x 8.45x 1.50x 9.70% % Vanguard Health Systems Inc. (USD) 0.58x 0.57x 6.42x 6.10x 15.98x 15.46x 2.77x 9.85% % Generale de Sante SA (EUR) 0.71x 0.70x 5.62x 5.47x 12.85x 12.28x 1.67x 13.96% % Polmed S.A. (PLN) 1.48x 1.22x 21.69x 13.86x x 43.01x 2.13x -0.88% 48.70% Centrum Medyczne Enel-Med S.A. (PLN) 0.83x 0.72x 10.96x 8.10x n.a x 2.90x 3.92% % Median 1.03x 0.98x 7.82x 7.15x 15.33x 14.69x 2.13x 11.54% % Scanmed Multimedis S.A. (PLN) 1.20x 0.94x 11.45x 7.94x 42.90x 21.10x 1.60x 9.90% 15.57% Premium/Discount 16.7% -3.5% 46.4% 11.1% 179.8% 43.7% -25.2% Fair value Scanmed Multimedis (PLN) 4.07 Source: Thomson Reuters Knowledge, Dr. Kalliwoda Research GmbH

24 24 Medical Services in Poland Sector update June 2013 Profit and loss statement in PLNm E 2014E 2015E 2016E 2017E Net sales Cost of goods sold Gross profit Other operating income Personnel costs Other operating expenses EBITDA Depreciation & Amortization EBIT Net financial results EBT Income taxes Net income / loss EPS DPS Source: Dr. Kalliwoda Research GmbH, company information Balance sheet in PLNm E 2014E 2015E 2016E 2017E Current assets Cash and cash equivalents Securities held-at-maturity Inventories Trade accounts and notes receivables Prepaid expenses, deferred charges and others Non-current assets Property, plant and equipment Intangible assets Goodwill Deferred tax assets Total assets Current liabilities Trade payables Short-term financial debt Other short-term liabilities Other provisions Long-term liabilities Long-term financial debt Deferred tax liabilities 0.32 Shareholders equity Minorities Total consolidated equity and debt Source: Dr. Kalliwoda Research GmbH, company information

25 25 Medical Services in Poland Sector update June 2013 Ratios Fiscal year E 2014E 2015E 2016E 2017E Gross margin 33.42% 46.36% 35.78% 47.30% 48.50% 5% 51.30% 52.00% EBITDA margin 3.13% 5.47% 9.90% 10.50% 11.85% 13.50% 14.85% 15.50% EBIT margin -0.97% 0.80% 5.30% 4.10% 5.50% 7.20% 8.60% 9.30% Net margin -0.62% 1.00% 0.15% 2.55% 4.06% 5.73% 7.06% 7.74% Return on equity (ROE) -3.18% 1.99% 0.27% 4.39% 7.21% 11.20% 14.35% 15.86% Return on assets (ROA) 0.24% 1.42% 1.91% 3.71% 5.68% 7.84% 9.81% 10.95% Return on capital employed (ROCE) -3.00% 0.27% -0.76% 3.88% 5.76% 8.36% 10.57% 11.83% Net debt (in PLNm) Net gearing 42.64% 5.14% 69.27% 15.10% 15.65% 12.21% 7.29% 1.87% Equity ratio 50.34% 73.94% 45.45% 64.27% 59.19% 59.19% 60.47% 62.05% Current ratio Quick ratio Net interest cover Net debt/ebitda Tangible BVPS Capex/Sales n.a % % -8.96% -8.35% -6.59% -6.51% -6.44% Working capital/sales 5.68% 1.40% -0.40% 2.14% 3.02% 3.26% 3.25% 3.08% EV/Sales EV/EBITDA EV/EBIT P/Tangible BVPS P/E P/FCF Source: Dr. Kalliwoda Research GmbH, company information

26 26 Medical Services in Poland Sector update June 2013 Contact Primary Research Fair Value Analysis International Roadshows Head: Dr. Norbert Kalliwoda Dr. Peter Arendarski Patrick Bellmann Andreas Braun CEFA-Analyst; University of Frankfurt/Main; PhD in Economics; Dipl.-Kfm. Senior-Analyst, Msc & Ph.D in Finance (Poznan Univers. of Economics),CFA Level 3 Candidate Junior-Analyst; WHU - Otto Beisheim School of Management, Vallendar Junior-Analyst; University of Frankfurt/Main Arndtstr Frankfurt Tel.: Fax: Sectors: IT, Software, Electricals & Electronics, Mechanical Engineering, Logistics, Laser, Technology, Raw Materials Sectors: Technology,Raw Materials, Banks & Insurances, Financial- Modelling (Quant., Buyside) Sectors: Support Research and Quantitative Approach Sectors: Support Research and Quantitative Approach Michael John mj@kalliwoda.com Rainer Koch rk@kalliwoda.com Adrian Kowollik ak@kalliwoda.com Maximilian F. Kaessens mk@kalliwoda.com Dr. Christoph Piechaczek cp@kalliwoda.com Dario Maugeri dm@kalliwoda.com Hellmut Schaarschmidt; hs@kalliwoda.com Dr. Erik Schneider es@kalliwoda.com David Schreindorfer ds@kalliwoda.com Rainer Wochele rw@kalliwoda.com Nele Rave nr@kalliwoda.com Dipl.-Ing. (Aachen) Computer-Science/Dipl.-Betriebw, (Frankfurt); seasoned international Executive IT-Industry Dipl.-Kfm.; Humboldt-Universität zu Berlin, CFA Candidate Bachelor of Science in Business Administration (Babson College, Babson Park, MA (US)) Dipl.-Biologist; Technical University Darmstadt; Univ. Witten-Herdecke. Master of Science in Corporate Finance; Rotterdam School of Management Dipl.-Geophysicists; University of Frankfurt/Main. Dipl.-Biologist; Technical University Darmstadt; Univ. Hamburg. MBA, Economic Investment Management; Univ. Frankfurt/ Univ. Iowa (US). Bachelor of Science in Economics and Business Administration (Goethe University Frankfurt M. / Graduation Fall 2013) Lawyer; Native Speaker, German School London, Sectors: Chemicals, Chemical Engineering, Basic Metals, Renewable Energies, Laser/Physics Sectors: IT, IT-Services, Internet, Media, Internet, Emerging Markets Sectors: Media, Internet, Gaming, Technology, Eastern European stocks Sectors: Financials, Real Estate Sectors: Biotech & Healthcare; Medical Technology Pharmaceutical Sectors: Automotive, Technology Sectors: Oil, Regenerative Energies, Specialities Chemicals, Utilities Sectors: Biotech & Healthcare; Medical Technology Pharmaceutical Sectors: IT/Logistics; Quantitative Modelling Junior-Analyst Legal adviser Also view Sales and Earnings Estimates: DR. KALLIWODA RESEARCH on Terminals of Bloomberg, Thomson Reuters, vwd group and Factset