Annual Results 2019

Corporate Presentation

Confidential

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2

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Confidential

Contents

1 Company Overview 4

2 2019 Annual Review 9

3 Looking Forward 12

4 Financial Overview 18

3

Company Overview

Section 1

Confidential

Megatrends Driving The Dental Industry

Aging Population Increasing Oral Health Awareness

Increasing Incidents of Dental Diseases

Increasing Disposable Income per Capita

people in 2030 to be

older than 60 years –

compared to 901m in

2015

More annual dental

spending for patients

over 65 years

1.4BN

20%

Estimated per capita GDP growth in

over the world: between 2014 and

2018

Increase in per capita dental

expenditure in over the world between

2014 and 2018

1.6%

8.2%

EUR annual oral health

spending of EU member

states by 202093BN

Annual growth of the

global health insurance

market between 2016 and

2020

11.1%

Of school children and

almost 100% of adults

have dental cavities

People with implants

60-90%

500M+

People in need for

night guardsc. 1BN

People with misaligned

teeth globally>100M

Of household’s

medical spending is for

dental and related

services across OECD

countries

CAGR for global

cosmetic dentistry

expected between

2015 - 2020

20%

6.8%

The global dental consumables & equipment market is expected to grow by 6.6% annually to EUR43bn in 2020

Sources: EY Research, Roland Berger, Millennium Research Group, Dentsply, United Nations, Align Technology, Dental Tribune, WHO, Dental Guide, Business Wire, Markets & Markets

1.8%

5.6%

13.8%

31.3%

4

Confidential

2019 Results Highlights

6

HK$160m 92.7%

Despite the negative impact of foreign

currency depreciation

Profit of the Year

48%1.4 p.p.

Increased sale of high-value products

and strengthened cost control

Gross Margin

HK$5.3 centsper share

Full-year dividend payout at 32%

Dividend

Confidential

Global Footprint

The only multinational denture service

company in the world

Provides services to over 20,000dentists around the world

Leading positions in every

market (ranging from 1st to 3rd)

7

Confidential

Growth Strategies Overview

8

Production moved to Shenzhen and commenced

overseas export

1986

1992

1998

2005

2009

2011

2013

Established in Hong Kong

Setup Modern USA (Seattle, Los Angles,

Chicago & Boston)

Moved to new production

site in Shenzhen

Yangzhijing (Beijing) was acquired by

Yangzhijing(Shenzhen)

Downstream integration: acquired Permadental

in Germany

Downstream integration: acquired Labcost

in France

Setup Yangzhijing (Shenzhen) dental lab

in Shenzhen

2014 Downstream integration: acquired Elysee in Netherlands

2015Downstream integration:

acquired Southern Cross in Australia

Acquired Gold & Ceramics Dental Lab in Australia

Acquired Quantum Dental Lab in Canada

Listed on main board of HKEx

2016

The most experienced consolidator in the market

Acquisition of Dentrade in Norway and Denmark

2019

CDI Dental AB in Sweden

2017

2018

Ranked

Top 1-3 in market

share in all key markets

Successfully completed

10+acquisitions

over the years

Established STM Digital with Straumann Group

MicroDental#2 in North America

Formed JV – Peak Dental Solutions with Straumann group

Acquisition of DD Dental GmbH in Germany

2019 Annual Review

Section 2

Confidential

2018 Europe North America Greater China Australia Others 2019

Regional Performance

9

HKD million

+7

+5

+9

+48 -18

HKD million Europe North America

Greater China

Australia Others Total revenue*

2019 919 697 512 199 19 2,346

Change (%) +0.8% +1.3% +10.4% -8.1% +35.8% +2.2%

*Raw materials revenue, dental equipment revenue and the service revenue are subtracted from the revenue

2,295

2,346

Major reasonsfor the changes:

Depreciation of Euro against HK$ offset by annual increment of the retail price and increase in sales of dental equipment.

Successful introduction of high-end products, gradual phase out of lower value products and annual increment of the retail price.

Depreciation of RMB against HK$ offset by increase in sales of higher value products and volume growth

Depreciation of AUD against HK$ and decrease in service revenue

Confidential 11

2019 Financial Data Review

Net Profit

(1) Selected Expenses include, among others, certain one-off/ transaction-related/ non-cash-related expenses, including amortisation of intangible assets, one-off transaction costs, RSU related expenses, IPO expenses, loan arrangement fee.

103.1

157.4

83.2

160.4

0

50

100

150

200

250

2016 2017 2018 2019

Net Profit

HK$M

EPS and Dividend

10.23

15.60

8.60

16.50

3

4.6

3.3

5.3

0.00

4.00

8.00

12.00

16.00

20.00

2016 2017 2018 2019

EPS Dividend per share

HK cents

In 2019, repurchased 21,454,000 shares.

6,885,000 ordinary shares were cancelled during the Year

29% 29% 38% 32%

Payout ratio

Looking Forward

Section 3

Confidential 13

Future Prospects and Strategies

Joint venture and strategic alliance arrangements with key strategic partners

Continued integration of MicroDental Group under the new leadership; continue to phase out lower value products and turned our attention to higher value products to improve our margins

Additional distribution and joint venture arrangements with upstream suppliers

New products, such as orthodontic devices

Through further integrations, continuing organic growth, joint ventures and new products, the Group will go from strength-to-strength in consolidating

its status as the leading global dental prosthetic device provider

4

3

2

1

Confidential

Impacts of COVID-19 Outbreak / Trade Disputes

14

No tariff imposed on MDG’s products

Certain production facilities of the Group are strategically located outside of the PRCBeneficial to our sales in the US in a longer

term

Healthy financial position to stay strongHK$394m cash on hand & HK$342m net operating cash for 2019

Resilient dental business Short-term impact of deferral of sales

Confidential

Predictable and effective Results

Advanced CBCT Root Simulation

Medical Grade FDA Approved Materials

Clear Aligners

New Consumer Product – TrioClearTo be launched in 1Q2020 in HK, 2Q2020 in Australia & Europe and 4Q2020 in China & US

Comprehensive Clinical Simulation Software

15

Confidential

TrioClear – Opportunities and Advantages

A renowned supplier of high-quality

personalised denture products

Leveraging its existing customer base

(over 20,000 dentists worldwide)for cross-selling

For every 100 dentists, the potential sales

contribution is approximately HK$4 million

Global advantages of Modern Dental

Enormous market brings numerous opportunities

16

Malocclusion, or the misalignment of teeth, affects

billions of people or approximately 60% to 75%of the population

Annually, approximately 12 million people in major

developed regions affected by malocclusion seek treatment by dentists.

Approximately 300 million people with malocclusion

have yet to seek dental assistance, which presents an untapped potential market

Confidential

Dental ImplantExclusively distribute the products of Straumann, a global market leader in dental implants, in

Hong Kong and Macau starting in Q42019

17

Financial overview

Section 4

Confidential

Financial Performance Overview

(HK$’000) 2019 2018 Percentage Change

Revenue 2,399,548 2,315,467 +3.6%

Gross Profit 1,152,931 1,079,336 +6.8%

Gross Profit Margin 48.0% 46.6% +1.4p.p.

Net Profit 160,445 83,240 +92.7%

Working Capital Overview

(Days) 2019 2018 Change in days

Cash Conversion Cycle 75 days 73 days +2 day

Inventory Turnover Days 33 days 28 days +5 days

Trade Payable Days 20 days 18 days +2 days

Trade Receivable Turnover Days 61 days 63 days -2 days

19

Confidential

Balance Sheet Summary

(HK$’000) 31 December 2019 31 December 2018Percentage

Change

Non-current assets 2,338,624 2,146,692 +8.9%

Current assets 1,022,617 959,369 +6.6%

Current liabilities 476,440 305,082 +56.2%

Net current assets 546,177 654,287 -16.5%

Cash and cash equivalents 393,905 380,393 +3.6%

Non-current liabilities 862,394 808,777 +6.6%

Net assets 2,022,407 1,992,202 +1.5%

20

Confidential

Key Financial Ratios

31 December 2019 31 December 2018

Gearing ratio (a) 30.2% 24.9%

Current ratio (times) 2.1 times 3.1 times

Quick ratio (times) 1.9 times 2.8 times

Interest coverage ratio 9.0 3.6

Return (Adjusted net profit) on equity(b) 10.1% 8%

Net bank borrowings(c) / Adjusted EBITDA 1.02 1.51

(a) Gearing ratio is calculated by net debt divided by capital and net debt. Capital refers to Equity attributable to owners of the Company. Net debt includes interest-bearing bank loans and other borrowings, trade payables, other payables and accruals, lease liabilities, other non-current liabilities, deducted by restricted bank deposit, and cash and cash equivalents.

(b) Return on equity is calculated by profit attributable to owners of the Company divided by Equity attributable to owners of the Company.(c) Net bank borrowings is bank borrowings less cash and bank balance and pledged bank deposits.

21

Appendix

Confidential

Corporate structure

23

Note: The shareholding structure is based on the assumption that the green shoe option is not exercised.The calculation of shareholding percentage has been subject to rounding adjustments. Accordingly, the arithmetic aggregation of the figures may not add up to 100.0%.

Macau Holding(BVI)

Europe Holding(BVI)

Modern Dental Laboratory

Company Limited(HK)

HK Holding (BVI)

America Holding(BVI)

100% 100% 100% 100% 100% 100%

Australia Holding(BVI)

Modern Dental USA Permadental Elysee Labocast

100% 100% 100%

YZJModern Dental

ShenzhenSCDL

100% 100% 100%

The Company(Cayman Islands)

Modern Dental Holding(BVI)

100%

49.26% 16.74% 4.08%

Ngai FamilyChan Family Management Team and Others

Public shareholders

29.92%