E 2015E 2016E. Revenue, MSEK Growth 63% 32% 22% 61% 77%

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1 E 2015E 2016E COMPANY ANALYSIS 6 November 2014 Summary Orexo (orx.st) Zubsolv taking market share The report for the third quarter was better than we had anticipated, both in terms of revenue and profitability. Sales in the quarter amounted to SEK million versus our estimate of SEK million, and operating profit was SEK million compared with our expected SEK million. List: Market Cap: Industry: CEO: Chairman: Small cap MSEK Healthcare Nikolaj Sörensen Martin Nicklasson Zubsolv sales rose in the quarter to SEK 68.4 million and were therefore slightly better than the SEK 63.5 million we had expected. The drug continues to take market share, which is now 4 percent. Improved reimbursement for Zubsolv from, for example, Express Scripts from the start of 2015 indicates continued positive performance OMXS 30 Orexo We have adjusted up our estimate for this year slightly following the report. Our fair value estimate is unchanged and amounts to SEK 170 per share Nov 04-Feb 05-May 03-Aug 01-Nov Redeye Rating (0 10 points) Management Ownership Growth prospect Profitability Financial strength 7.5 points 7.0 points 7.5 points 0.0 points 3.0 points Key Financials E 2015E 2016E Revenue, MSEK Growth 63% 32% 22% 61% 77% EBITDA EBITDA margin -18% -20% -17% 11% 33% EBIT EBIT margin -24% -33% -18% 7% 31% Pre-tax earnings Net earnings Net margin -26% -36% -24% 2% 28% Dividend/Share EPS adj P/E adj EV/S EV/EBITDA Share information Share price (SEK) Number of shares (m) 34.3 Market Cap (MSEK) Net debt (MSEK) 207 Free float (%) 55 % Daily turnover ( 000) 122 Analysts: Klas Palin klas.palin@redeye.se Björn Olander bjorn.olander@redeye.se Important information: All information regarding limitation of liability and potential conflicts of interest can be found at the end of the report. Redeye, Mäster Samuelsgatan 42, 10tr, Box 7141, Stockholm. Tel E-post: info@redeye.se

2 Redeye Rating: Background and definitions Orexo The aim of a Redeye Rating is to help investors identify high-quality companies with attractive valuation. Company Qualities The aim of Company Qualities is to provide a well-structured and clear profile of a company s qualities (or operating risk) its chances of surviving and its potential for achieving long-term stable profit growth. We categorize a company s qualities on a ten-point scale based on five valuation keys; 1 Management. 2 Ownership. 3 Growth Outlook. 4 Profitability and 5 Financial Strength. Each valuation key is assessed based a number of quantitative and qualitative key factors that are weighted differently according to how important they are deemed to be. Each key factor is allocated a number of points based on its rating. The assessment of each valuation key is based on the total number of points for these individual factors. The rating scale ranges from 0 to +10 points. The overall rating for each valuation key is indicated by the size of the bar shown in the chart. The relative size of the bars therefore reflects the rating distribution between the different valuation keys. Management Our Management rating represents an assessment of the ability of the board of directors and management to manage the company in the best interests of the shareholders. A good board and management can make a mediocre business concept profitable. while a poor board and management can even lead a strong company into crisis. The factors used to assess a company s management are: 1 Execution. 2 Capital allocation. 3 Communication. 4 Experience. 5 Leadership and 6 Integrity. Ownership Our Ownership rating represents an assessment of the ownership exercised for longer-term value creation. Owner commitment and expertise are key to a company s stability and the board s ability to take action. Companies with a dispersed ownership structure without a clear controlling shareholder have historically performed worse than the market index over time. The factors used to assess Ownership are: 1 Ownership structure. 2 Owner commitment. 3 Institutional ownership. 4 Abuse of power. 5 Reputation. and 6 Financial sustainability. Growth Outlook Our Growth Outlook rating represents an assessment of a company s potential to achieve long-term stable profit growth. Over the long-term. the share price roughly mirrors the company s earnings trend. A company that does not grow may be a good short-term investment. but is usually unwise in the long term. The factors used to assess Growth Outlook are: 1 Strategies and business model. 2 Sale potential. 3 Market growth. 4 Market position. and 5 Competitiveness. Profitability Our Profitability rating represents an assessment of how effective a company has historically utilised its capital to generate profit. Companies cannot survive if they are not profitable. The assessment of how profitable a company has been is based on a number of key ratios and criteria over a period of up to the past five years: 1 Return on total assets (ROA). 2 Return on equity (ROE). 3 Net profit margin. 4 Free cash flow. and 5 Operating profit margin or EBIT. Financial Strength Our Financial Strength rating represents an assessment of a company s ability to pay in the short and long term. The core of a company s financial strength is its balance sheet and cash flow. Even the greatest potential is of no benefit unless the balance sheet can cope with funding growth. The assessment of a company s financial strength is based on a number of key ratios and criteria: 1 Times-interest-coverage ratio. 2 Debt-to-equity ratio. 3 Quick ratio. 4 Current ratio. 5 Sales turnover. 6 Capital needs. 7 Cyclicality. and 8 Forthcoming binary events. 2

3 Q3 report beats our expectations Orexo Main products showed higher than expected revenues in the third quarter Results for the third quarter were better than we had anticipated in our updated and revised estimates before the report was released. The main reason for the improved performance was higher reported revenue for the drugs Abstral and Zubsolv. with the improvement fairly evenly distributed between the two products. Abstral figures have benefited more from favourable exchange rates than we had taken into account. For Zubsolv. it s all about lower utilisation of discounts in the form of co-pay coupons and thus better net revenue per tablet. The utilisation rate of discounts is reported to have decreased from percent to percent of prescriptions in this period. The following table summarises the results compared to our estimates for the third quarter. Estimates vs outcomes Q (MSEK) Q3'14E Outcome Diff Q3'13 Net sales % Abstral % Edluar % 2.1 Zubsolv % 0.5 Kibion % 11.9 Good cost control Other Net expenses % COGS % Sales % Admin % R&D % Other na -0.7 EBITDA % EBIT % Net income % Gross margin 73.8% 76.7% 4% 90.2% Gross margin adjusted 57.8% 62.1% 4% 4.0% EBIT margin neg neg neg neg Source: Orexo. Redeye The gross margin improved The differences between our forecast and the outcome were relatively large concerning turnover, but we were more spot on in our cost projections. No single item stood out in particular. If we were to highlight one thing, it would be the gross margin which was significantly better than expected, and probably is related to the lower level of utilisation of discount coupons. 3

4 The gross margin strengthened in the quarter compared with the second quarter Orexo The adjusted gross margin (based solely on current revenue and cost of goods sold) increased significantly during the third quarter compared with the previous quarter, at 62.1 percent. This marks an improvement in the trend following weakness in the previous quarter, bringing it in line with higher product revenues. We expect continued improvement in the coming quarters as sales of Zubsolv rise. The cost level will be higher in the fourth quarter In the report, Orexo provides some guidance on the costs side for the current quarter, and the general expectation is that these will be slightly higher in the fourth quarter than they were in the third quarter. This is partly because of the weakening in the Swedish krona against the dollar, as the company has taken into account in its guidance. Cash flow was SEK million Company coffers have been topped up by more than SEK 800 million in recent months Good finances after raising of capital The big question mark in recent reports has been cash flow. This has attracted the most interest due to strong build-up of working capital. Also in the third quarter, the build-up of working capital had a significant negative impact on cash flow, amounting to SEK million and operating activities showed overall cash flow of SEK million. Year to date, the increase in working capital has cost Orexo SEK million. However, management indicates that the company has now reached a level where no major additional investment in this is on the agenda, which is positive. The large deficits and growth in working capital have put finances under severe strain this year. We think management has done an exemplary job of covering capital needs and been able to secure financing on very good terms. Since last summer, over SEK 800 million has been raised, but dilution has been limited to less than 8 percent. After the financial transactions completed in recent months, Orexo has financially healthy foundations with cash of SEK million at the end of the third quarter. Given that the need for working capital ahead is set to slow, the financing provides the company with some strength, even if Zubsolv performance would be weak. Market share up to 4 percent for Zubsolv As mentioned, sales of Zubsolv beat our expectations and rose to SEK 68.4 million, an increase of 98 percent compared with the previous quarter, adjusted for non-recurring effects. The exclusive agreement with UnitedHealth Group (UHG), which came into force on 1 July this year, has had a strong contributory effect to the solid performance. Based on prescription data for Zubsolv from Wolters Kluwer, the product s market share had increased, in terms of the number of tablets sold, to 4.2 percent from 2.4 percent at the end of June this year. This is a good performance, but our expectations were for a slightly higher market share of 5 percent. Sales trends, however, are showing a continued positive trend, although some individual weeks may vary. Since most Zubsolv prescriptions cover 30 days use, the current growth of the drug is best evaluated by studying 4

5 prescription data as a rolling average over four weeks. This is presented in the charts below. Four-week rolling average, Zubsolv market share and tablet sales ,50% ,00% 3,50% 3,00% 2,50% 2,00% 1,50% 1,00% 0,50% 0,00% Source: Wolters Kluwer Equivalent reimbursement from Express Scripts for Zubsolv and Suboxone Film from the start of 2015 The images above make it clear that prescriptions have made small advances in connection with improved reimbursements for the drug by paying organisations where UHG exclusivity has had the greatest impact. Important new achievements taken in recent months include better reimbursement from Express Scripts. with Zubsolv set to receive a reimbursement equivalent to Suboxone Film from the beginning of Express Scripts accounts about 30 percent of the volume of private health insurance companies, which corresponds to a total market share of nearly 20 percent. In addition, a new exclusive agreement has been signed with Managed Medicaid player WellCare, which takes effect from 1 November this year. WellCare has a market share of about 0.5 percent. Strong underlying market for buprenorphine/naloxone drugs In the third quarter, medicinal products containing buprenorphine and naloxone showed accelerating growth and we estimate that this area could grow by 10 percent this year. We assess that this performance is positively affected by more individuals having access to insurance, more organisations spreading the message, and enhanced media interest surrounding the opiate-dependence issue following the death of actor Philip Seymour Hoffman at the beginning of this year. Percentage growth per quarter YoY. buprenorphine/naloxone 40,0% 35,0% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% Source: Wolters Kluwer 5

6 We expect that these effects, which are currently having a positive impact on growth, will persist into 2015 and We have therefore now revised up our growth expectations from 5 percent and 3 percent for 2015 and 2016 to 10 percent and 8 percent, respectively. Four generic drugs have now been approved We expect that patient restrictions will be lifted. but it is unclear when It s not all good news, however, and on the negative side, the FDA has approved a fourth generic Suboxone tablet. Mid-November will see the launch of a third branded product, Bunavail from BioDelivery Sciences. With more players in the area, price risks playing a greater role in negotiations with payers, why the net effect of the growing market is expected to be limited. A tricky issue that could stir things up are potential changes to current restrictions on 100 patients per doctor, where advocates of lifting this restriction are gaining ground. The argument for lifting the restriction is mainly based on the notion that many are not currently receiving treatment with drugs due to a lack of prescribing physicians. However, not everyone is in favour of this owing to concerns that lifting the restriction will give rise to more uncontrolled prescribing. We interpret these trends, however, to mean that lifting of the restriction will occur, probably to 150 patients per doctor. But it is currently unclear when this might take place. Kyowa Hakko raises forecast for Abstral Sales in the US are handled by Galena Biopharma, which has not yet reported for the third quarter. Prescriptions (see below) show increasing volumes during the third quarter of approximately 13 percent compared to the second quarter of this year. Abstral sales, four-week average (USD) The entire market showed some growth in the past quarter Source: Wolters Kluwer The entire market for fast-acting fentanyl-based medications increased slightly during the period and market leader continues to be Subsys from Insys Therapeutics, with about a 40 percent market share. Abstral s share of the US market is just over 4 percent. 6

7 However. in Europe things are going really well and the third-quarter report showed growth of 19 percent for Abstral. Kyowa Hakko also took the opportunity to raise its full-year forecast by about 2 percent to GBP 54.8 million. These expectations appear conservative and imply growth in the fourth quarter of only 11 percent. We believe that the sights can beset a little higher, and in our estimate we have projected a growth rate of 15 percent. This puts full-year sales at EUR 70 million, which would mean the possibility of royalties of SEK 43 million to Orexo. We are raising our forecast for Abstral royalties Following Kyowa Hakko s report. we have raised our forecasts for Abstral for this year to SEK 57.8 million from the previous SEK 53.1 million. This is due entirely to better than expected performance in Europe. Other products maintaining their position Final third-quarter figures are not yet in for Edluar. but royalties of SEK 3.0 million have been recorded. This figure was lower than our expected figure of SEK 3.6 million. Sales are said to be going well, especially in Canada. We have cut our estimates for 2014 from SEK 15.2 million to SEK 14.2 million following the report. Solid quarter for Kibion Significant value could be hidden in the OX51 project Subsidiary Kibion achieved sales of SEK 11.8 million in the third quarter, which was slightly better than we had anticipated. We have nevertheless reduced our forecast for 2014 to SEK 44.6 million from the previous SEK 46.7 million due to the uncertainty prevailing in the Middle East, where the company has a significant portion of its sales. New products will have a greater focus Better finances and reduced working capital needs going forward create space for the company to consider other projects than Zubsolv. The plan is to take the OX51 (acute pain) forward over the next year and initiate Phase III trials. An assessment is in progress to find the best solution to take the project forward and we expect a decision about this early next year. The most attractive solution that we believe the company is looking for is to sign an agreement with a partner to co-finance Phase III trials. but whereby Orexo retains US rights. Perhaps most likely, we believe, is that Orexo will conduct the Phase III trials and then try to find a partner. A reference contract that gives some indication of the potential value of OX51 is the agreement reached last year between Acelrx Pharmaceuticals and Grunenthal GmbH for Zalviso. Zalviso is under registration in the US and, like OX51, it s a sublingual tablet formulation of sufentanil, but delivered through a pre-programmed device. Grunenthal licensed rights to Zalviso for all markets except those in Asia and the US. For the rights, Grunenthal pays an upfront of USD 30 million plus a further USD 220 million in regulatory and sales-based milestone payments. Acelrx will also receive increasing royalties starting at 15 percent and up to about 25 percent. 7

8 Financial estimates Orexo The slightly better performance in the third quarter is the reason we are now adjusting our full-year figures. This is primarily because of heightened expectations for Zubsolv. For 2015 and onwards, we have instead lowered our expectations, as we expect the sales trend for Zubsolv will be flatter than previously anticipated. Suboxone Film has a very strong market position that is difficult to shift. Furthermore, a certain increase in competitive pricing is expected as the number of players is now increasing. The table below lists the main features of the changes we made for We are raising this year s estimate. but lowered estimates for 2015 and 2016 (MSEK) 2014E 2015E 2016E Net sales New Old (%) 3% -12% -9% Zubsolv New Old (%) 5% -16% -10% EBIT New Old (%) 5% -62% -19% Source: Redeye In general, we have made relatively small changes to our estimate for the current year and we still expect that the company will report a loss for the current year. Growth this year is expected to reach 22 percent and we estimate that net sales for 2014 will rise to SEK million. Despite our lowered expectations for Zubsolv, we expect continued very strong growth with decent profit growth for the company. The table below presents our detailed estimates for Orexo until

9 Annualised estimates. Orexo E 2015E 2016E Revenues Revenues Abstral Edluar Zubsolv Licensing revenues Kibion Additional actual R&D Net sales Costs Cost of goods sold Gross profit Sales expenses Administrative expenses Research and development Total expenses Other income / expenses EBIT (Earnings) Net financial items Tax Net profit Earnings per share (EPS) Number of shares before dilution Source: Redeye R & D expenses are expected to increase with improved profitability in the business Enhanced profitability creates scope for the company to invest in product development and new projects, which is something we have taken into account in our projections for research and development. If the company is to carry out any major Phase III trials of OX51 on its own, however, will be a need to increase these costs estimates. In our estimates we have taken into account to see an increase in research and development activity with new projects starting in the third quarter of next year, which coincides with the point in time when we believe the company should be able to achieve positive cash flow from operating activities. The next page presents detailed quarterly estimates for this year and next. 9

10 Quarterly estimates. Orexo Q1:14 Q2:14 Q3:14 Q4:14E Q1:15E Q2:15E Q3:15E Q4:15E Revenues Revenues Abstral Edluar Zubsolv Licensing revenues Kibion Net sales Costs Cost of goods sold Gross profit Sales expenses Administrative expenses Research and development Total expenses Other income / expenses EBIT (Earnings) Net financial items Tax Net profit Earnings per share (EPS) Number of shares before dilution Source: Redeye We expect that a milestone payment in the US can be reached at the end of 2015 It is worth pointing out that a large portion of the revenue that the company reported for Abstral in the last two years consists of fixed payments linked to the agreement reached between Orexo and ProStrakan in June At that time, a significant portion of the European rights were sold for a total of SEK 610 million. The payments were divided into three parts, of which the last of SEK 138 million was made in June this year and allocated over twelve months until the end of May In our estimate for the fourth quarter of 2015, we have also included a license fee of SEK 14.5 million relating to a milestone payment for Abstral sales from Galena Biopharma of USD 2 million, which is payable when USD 20 million in annual sales is reached. Valuation Our valuation of Orexo assumes predictions for each product until For the projects in clinical development, we have taken into account the development risk and risk-adjusted future cash flows. After the adjustments we have made in our model, our DCF value is SEK 162 per share (SEK 144), in which we use a WACC of 13.4 percent. 10

11 In addition to the DCF valuation, we value Orexo based on a multiple valuation, in which we use multiples that a company of Orexo s nature could possibly be traded to when the company reaches a more mature stage, which we estimate will be as of The average value from the multiple valuation gives a current value of SEK 178 (196) per share. Multiple Valuation Multiple Multiples Current share value Average value EV/S 3x - 4x EV/EBITDA 9x - 11x EV/EBIT 10x - 12x Fair value estimate of SEK 170 Our fair value estimate is based on an average of the two above-described models and amounts to SEK 170 per share (SEK 170). Valuation of comparable companies The table below presents Orexo from a relative valuation perspective. The table consists mainly of smaller US-based operating pharmaceutical companies. Relative Valuation P/E EV/EBITDA EV/S Company 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E ACTAVIS ALKERMES Neg Neg AUXILIUM Pharma. Neg BIODELIVERY Sci. Neg Na Na Na HOSPIRA INSYS Thera MEDA MEDICINES Co Neg MOBERG Pharma PERRIGO SALIX Pharma SHIRE PLC VALEANT Pharma Mean Median OREXO (Bloomberg) Neg Neg OREXO (Redeye) Neg 100> 11.4 Neg

12 Scenario analysis Orexo Zubsolv is the main value driver for Orexo in the coming years, based on our expectations regarding market penetration. Our base scenario expect Zubsolv to take a market share of 20 percent for buprenorphine/naloxone drugs. Our estimates also include risk-adjusted revenues for OX51 from Bull case fair value is SEK 260 The uncertainty in our estimates is greatest for Zubsolv, and this is where the company has the best chance to provide a surprise. Our bull case scenario models a 10 percentage-point higher market penetration for Zubsolv than our base case scenario, with a market share on par with the company s target sales of 30 percent. Such a scenario gives a fair value estimate per share of SEK 260. We model an bear-case scenario of 10 percent market share for Zubsolv Our bear case scenario is also built around market uptake of Zubsolv and here we assume weaker uptake with more intense competition than in our baseline scenario. We have calculated a lower market share for Zubsolv at 10 percent of the market. Such a scenario gives us a fair value estimate per share of SEK 70. Share performance recovering In August of this year, shares reached nearly SEK 150 before quickly falling, influenced heavily by the general exodus from small caps, to just over SEK 100. As the market has stabilised somewhat and a good report has helped the share recover, which has recovered more than half of its decline. Share trading has been good and we saw clearly how it increased when the price approached SEK 100. Measured over the past three months, the daily trading volume is 122,000 shares per day, which means that some 7 percent of the share capital is traded each month. With regard to ownership, we note that other AP funds and SHB funds increased their holdings, probably in connection with investments and issue of new shares. We also note that Länsförsäkringar and Danske Invest funds have come in as new owners with holdings of 1.4 and 1.2 percent. respectively. This is also probably related to the recent transactions. After the share issues during the third quarter, the number of outstanding shares amounts to 34.3 million. 12

13 Summary Redeye Rating Orexo The rating consists of five valuation keys. each constituting an overall assessment of several factors that are rated on a scale of 0 to 2 points. The maximum score for a valuation key is 10 points. Management 7.5p The management and board have solid, relevant experience of the sector. Communication with the market is good and clear. The launch of Zubsolv is lagging slightly behind the original plan. Ownership 7.0p Orexo s major shareholders are represented and active on the board, which is a big plus. However, we would prefer to see ownership among all of the board, which would bolster the rating. Growth prospect 7.5p Growth over the next few years is governed by the success of the recently launched Zubsolv on the US market. The drug has great commercial potential and sales are expected to grow strongly over the next few years. Risk remains relatively high as the product is not yet established. Profitability 0.0p The company s flagship product Zubsolv is in establishment phase and it will take until next year before Orexo achieves profitability. Financial strength 3.0p The financial position has improved due to issues and current financing is deemed adequate until positive cash flow can be achieved. 13

14 Income statement E 2015E 2016E Net sales Total operating costs EBITDA Depreciation Amortization Impairment charges EBIT Share in profits Net financial items Exchange rate dif Pre-tax profit Tax Net earnings Balance E 2015E 2016E Assets Current assets Cash in banks Receivables Inventories Other current assets Current assets Fixed assets Tangible assets Associated comp Investments Goodwill Cap. exp. for dev O intangible rights O non-current assets Total fixed assets Deferred tax assets Total (assets) Liabilities Current liabilities Short-term debt Accounts payable O current liabilities Current liabilities Long-term debt O long-term liabilities Convertibles Total Liabilities Deferred tax liab Provisions Shareholders' equity Minority interest (BS) Minority & equity Total liab & SE Free cash flow E 2015E 2016E Net sales Total operating costs Depreciations total EBIT Taxes on EBIT NOPLAT Depreciation Gross cash flow Change in WC Gross CAPEX Free cash flow Capital structure E 2015E 2016E Equity ratio 40% 21% 34% 35% 47% Debt/equity ratio 65% 149% 129% 123% 67% Net debt Capital employed Capital turnover rate Growth E 2015E 2016E Sales growth 63% 32% 22% 61% 77% EPS growth (adj) -78% 64% -21% -115% 2 080% DCF valuation Cash flow, MSEK WACC (%) 13.4 % NPV FCF ( ) -59 NPV FCF ( ) 2784 NPV FCF (2023-) 2627 Non-operating assets 445 Interest-bearing debt -241 Fair value estimate MSEK 5556 Assumptions (%) Average sales growth 7.1 % Fair value e. per share, SEK EBIT margin 39.9 % Share price, SEK Profitability E 2015E 2016E ROE -34% -88% -47% 5% 72% ROCE -21% -39% -19% 3% 42% ROIC -42% -204% -33% 7% 70% EBITDA margin -18% -20% -17% 11% 33% EBIT margin -24% -33% -18% 7% 31% Net margin -26% -36% -24% 2% 28% Data per share E 2015E 2016E EPS EPS adj Dividend Net debt Total shares Valuation E 2015E 2016E EV P/E P/E diluted P/Sales EV/Sales EV/EBITDA EV/EBIT P/BV Share performance Growth/year 12/14 1 month 10.7 % Net sales 26.6 % 3 month 8.2 % Operating profit adj 9.8 % 12 month -4.9 % EPS. just 9.5 % Since start of the year % Equity 41.7 % Shareholder structure % Capital Votes Novo Nordisk Fonden 28.1 % 28.1 % HealthCap 11.7 % 11.7 % ATP 5.4 % 5.4 % SHB fonder 4.9 % 4.9 % Anders Walldow 3.4 % 3.4 % Avanza Pension Försäkring 2.9 % 2.9 % Andra AP-fonden 2.2 % 2.2 % Hans Sköld 1.8 % 1.8 % Thomas Lundqvist 1.4 % 1.4 % Länsförsäkringar fondförvaltning 1.4 % 1.4 % Share information Reuters code orx.st List Small cap Share price 135. Total shares, million 34. Market Cap, MSEK Management & board CEO CFO IR Chairman Nikolaj Sörensen Henrik Juuel Henrik Juuel Martin Nicklasson Financial information FY 2014 Results January 29, 2015 Q1 report April 23, 2015 Q2 report July 10, 2015 Q3 report October 22, 2015 Analysts Klas Palin klas.palin@redeye.se Björn Olander bjorn.olander@redeye.se Redeye AB Mäster Samuelsgatan 42, 10tr Stockholm 14

15 Revenue & Growth (%) EBIT (adjusted) & Margin (%) E 2015E 2016E 90,0% 80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% -10,0% E 2015E 2016E 50,0% 0,0% -50,0% -100,0% -150,0% -200,0% -250,0% Net sales Net sales growth EBIT adj EBIT margin Earnings per share Equity & debt-equity ratio (%) E 2015E 2016E ,6 0,5 0,4 0,3 0,2 0, E 2015E 2016E 160,0% 140,0% 120,0% 100,0% 80,0% 60,0% 40,0% 20,0% 0,0% EPS, unadjusted EPS, adjusted Equity ratio Debt-equity ratio Conflict of interests Klas Palin owns shares in the company: No Björn Olander owns shares in the company: No Redeye performs/have performed services for the Company and receives/have received compensation from the Company in connection with this. 15

16 DISCLAIMER Important information Redeye AB ("Redeye" or "the Company") is a specialist investment banking boutique that focuses on small and mid-cap growth companies in the Nordic region. We focus on the IT. life sciences. media. betting. clean tech and commodities sectors. We provide services within Corporate Broking. Corporate Finance. equity research. investor relations and media services. Our strengths are our award-winning research and analysis department. experienced advisers. a unique investor network. and powerful distribution channel redeye.se. Redeye was founded in 1999 and since 2007 has been subject to the supervision of the Swedish Financial Supervisory Authority. 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