Investors’ centre

Voxel Group has used the pandemic to make changes that will strengthen its foundations and contribute to long-term profitable growth. It also introduced new business lines that have a significant impact on the results of subsidiaries. The pandemic reduced the volumes of diagnostic tests performed by diagnostic entities (including Voxel S.A., i.e. the parent company), due to limited access for patients to health care, including specialist doctors, and reduced the demand for diagnostic tests by hospitals. On the other hand, it also contributed to developmentof Voxel’s subsidiaries. Alteris has a high level of orders due to the modular solutions and hospitals’ investments in diagnosis and treatment of COVID-19. VITO-MED has been testing for COVID-19 since June 2020 and is dynamically developing this type of activity.

Voxel Group intends to adapt flexibly to the changing situation, including the diminishing impact of the COVID-19 pandemic. The Group continues its investment programme related to the opening of new diagnostic laboratories and the replacement of equipment in existing laboratories, in order to increase the Group’s capacity. Voxel was successful in concluding new contracts for reimbursed tests, which will also have an impact on the current year. In 2022, we face, like most businesses, an increase in the cost of labour, other services and debt service costs as a result of the current situation in the country. On the other hand, however, the measures taken to increase the number of studies and contracts have an impact on our revenue growth. In 2022, we expect Alteris’ sales to external customers to stabilise.

The aim of the Management Board is to further strengthen VoxelGroup in 2021. The Group plans organic development based on new products and solutions developed within the Group as well as investments in new diagnostic laboratories. It also does not rule out acquisitions, particularly in the area of diagnostics, in order to maximize synergy.

Management Board of Voxel S.A. identifies a number of factors that may affect the Group’s growth in 2022:

• growing number of scans observed for several quarters, including an increase in the number of SPECT scans,
• signing new contracts for reimbursed services in 2021-2022,
• new diagnostic imaging laboratories,
• increased sales of radiopharmaceuticals, including the impact of sales of fluorocholine,
• expected stabilisation of Alteris’ revenues to externalcustomers,
• impact of COVID-19 laboratories also for 2022, especially in 1Q22,
• possible new acquisitions.

The Group is also working on other new projects that could have an impact on its growth.

The Group has a safe liquidity position due to diversified sources of capital. Interest-bearing financing is obtained in the form of: bank debt, loans, financial leases and corporate bond issuances. At the end of 2021, the net debt / EBITDA ratio (in 4 quarters) came in at 2.2x (1.9x if IFRS16 was excluded).

The aim of the Management Board of Voxel S.A. is to shareprofits with shareholders by paying dividends. For this purpose, the dividend policy for 2021-2025 was approved in January 2021. In line with its assumptions, the Company plans to pay out an annual dividend in the amount of at least 50% of the net profit of Voxel S.A. for a given year and 25% of the amount of the dividend fund constituting reserve capital created from retained earnings in 2015 – 2017 in the total amount of over PLN 28.9 million. When presenting a recommendation regarding a possible dividend payment for 2020, the Management Board will take into account: the current and planned liquidity situation of the Company, the need for working capital, planned investments and covenants regarding the interest debt.

There are several reasons that have influenced the change in gross margin on sales over the last few years:

• the key factor is the change in the structure of the Group, which took place in 2019. Since this year, the Group has been consolidating two new subsidiaries, i.e. the VITO-MED hospital and Exira company. As a result, the Group currently consists of diagnostic entities and Exira, which generate gross margins of 30-40%, and companies where profitability is lower and amounts to approximately 10%, i.e. Alteris and VITO-MED. Consolidation of VITO-MED (i.e. its hospital operations) and Scanix in 2020 (which is still undergoing organizational and cost restructuring) resulted in a decrease in the gross margin;
• stronger impact of Alteris on Group’s results and an increase in share of large infrastructure projects in the Group’s sales structure implemented by this subsidiary – Alteris is an IT and engineering company which has increased the share of large projects, including infrastructure projects, in its portfolio in recent years. The gross margin on large projects is lower than marginon the company’s software-only projects. The greater their share, the lower the gross margin. Increasing the share of infrastructure projects is a natural step in the company’s development and will be continued in the coming years;
• impact of investments carried out by diagnostic companies, mainly by Voxel S.A. – in the case of new investments, the investment implementation process usually takes several months. After its completion, a given centre begins to provide services, but in the initial period, diagnostic tests volumes are not realized at the level of already existing laboratories. The period of reaching the target efficiency of a diagnostic centre lasts from several months to several years and depends also on whether and when a given diagnostic centre obtains contract with the National Health Fund. Costs generated by the diagnostic centre appear from the moment of launch of the investment. In addition, fixed costs, including rental costs, equipment service costs, and costs of servicing equipment debt, have a significant share in the structure of centre’s costs. The greater the share of investments carried out, the lower the gross margin of the company;
• in 2020, COVID-19 pandemic had a strong impact on diagnostic centres, including Voxel and the VITO-MED hospital. It resulted in a decrease in number of diagnostic tests performed, and thus lower sales revenues. This impact was mainly visible in the first and second quarter of 2020. Due to significant share of fixed costs in cost structure, the negative impact of the operating leverage directly translated into deterioration of gross margin.

Yes, the Group continues to conduct R&D projects, mainly related to the production of new radiopharmaceuticals and developmentof its own software (RIS/PACS). In the field of radiopharmaceuticals, seven projects are currently underway, some of which are co-financed by the EU funds. One of them is the project of developing a production technology and preparation for implementation of a new product, i.e. a gallium radiopharmaceutical (Ga68 chloride) intended for labeling sets administered to patients in the PET-CT diagnostic procedure. This will apply, inter alia, to diagnosis of prostate cancer, neuroendocrine tumors and other oncological diseases. Implementation of this project will enable the company to launch production of this radiopharmaceutical and the ultrasound PET-CT fusion biopsy procedures in patients with suspected prostate cancer.

In addition, in October 2020, Voxel received a marketing authorization for a new radiopharmaceutical – fluorocholine, which allows this product to be used both for own needs and to offer them to commercial entities. Fluorocholine is used in PET-CT imaging of organ function or diseases in which the diagnostic target is increased choline uptake. In particular, the use of radiopharmaceuticals is indicated in the diagnosis of prostate cancer and hepatocellular carcinoma.

Main competitive advantages include: economies of scale and benefits from having a network of laboratories, having a radiopharmaceutical production plant in the Group’s structure, experienced medical and managerial staff, complementarity of services provided by the Group companies, as well as innovation and the ability to implement and commercialize it.

Main risks identified by the Group include the loss of managingpersonnel, including doctors and medical personnel, a decrease in expenditure on healthcare, a significant change in pricing of healthcare benefits and introduction of legal and regulatory changes that would not be beneficial for the Group.

No, the Company does not announce financial forecasts.