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    ,
    Given the COVID-19 emergency, many of you have contacted us to see how the
    Company is managing and performing. We are writing to update you on the current
    impact of COVID-19 on our operations and provide you with an update regarding the half
    year ending 29 February 2020.
    Safety and Wellbeing
    API’s approach during COVID-19 has been to keep the safety and wellbeing of our staff
    and customers paramount in our decision making. We have processes in place to protect
    people from, and to reduce the spread of, COVID-19 wherever possible. These processes
    are applicable to operations at our pharmacy distribution centres, manufacturing sites,
    retail stores and clinics, as well as our support offices.
    Pharmacy Distribution
    We are proud to say pharmacy distribution is a major and vital part of Australia’s critical
    national health infrastructure distributing health products to pharmacies across the country
    and API is contributing strongly. This month we have witnessed unprecedented demand
    for PBS and other medicines through the pharmacy supply chain. Demand during March
    is in excess of 50% more than usual for this time of year.
    There are approximately 5,700 community pharmacies and we have 1,519 members in our
    retail pharmacy programs, so we will continue to be pivotal to ensuring that all Australians
    have access to all PBS medicines quickly and efficiently.
    You may recall that we put in place measures and contingencies during the bushfire
    emergency that ensured the delivery of vital medicines in fire-affected areas. This
    emergency is on a far greater scale and we are working very closely with the Government
    and suppliers to ensure the ongoing supply of medicines for the community. We are
    working across the industry to ensure that the pharmacy sector can cope during the
    escalating COVID-19 emergency.
    Australian Pharmaceutical Industries Limited
    250 Camberwell Road Camberwell VIC 3124 Australia
    T: +61 3 8855 3000 F: +61 3 8855 3400 www.api.net.au ACN 000 004 320
    Priceline Pharmacy
    Our Priceline network, which is approaching 500 stores, is also a vital part of Australia’s
    critical national health infrastructure and is considered an essential service by
    Government. Our pharmacists and their staff are doing an excellent job in reassuring their
    customers, providing important health advice and services such as administering the latest
    flu vaccine.
    Priceline Pharmacy has in fact been the first major pharmacy network to provide flu
    services nationally to the community and we expect to administer more than 250,000 flu
    vaccinations in coming weeks. Priceline Pharmacy also has a pivotal role to play with the
    Australian Government accelerating the implementation of electronic prescriptions.
    While we are experiencing a significant increase in demand for medicines, we have also
    seen growth in our beauty and personal care categories compared to last year and
    online sales have more than doubled.
    Importantly, our pharmacists are working hard to ensure that people get the medicines
    they need in the quantities they need. This will ensure the whole of our community can
    continue to have confidence that in the future they will be able to access the community
    care they rely on.
    Clear Skincare Clinics
    Clear Skincare provides health and cosmetic related skin treatments, upon which the
    brand’s reputation was built, and people are still seeking those services.
    While the highest levels of hygiene and safety are standard, we added steps to ensure
    staff safety, including additional cleaning and disinfecting, and removal of product testers.
    In line with evolving health advice, our clinics have not been accepting staff or customers
    who have recently travelled internationally, been in contact with anyone diagnosed with
    COVID-19 or shown signs of infection.
    We are monitoring the Australian and New Zealand Governments’ health advice closely
    and we will take all appropriate action to keep our people and customers safe. The New
    Zealand Government announcement to lock down all non-essential services from 24
    March 2020 means we have closed our four New Zealand clinics.
    Australian Pharmaceutical Industries Limited
    250 Camberwell Road Camberwell VIC 3124 Australia
    T: +61 3 8855 3000 F: +61 3 8855 3400 www.api.net.au ACN 000 004 320
    Following last night’s National Cabinet meeting we have instructed our clinics to cease
    providing beauty treatments. We are currently confirming whether or not our clinics can
    continue to provide health related and prescribed services for conditions such as acne.
    Until the COVID-19 event, Clear Skincare’s revenue growth was ahead of last year with
    clinic growth well underway.
    Consumer Brands
    As one of Australia’s leading providers of private label over the counter medicines,
    demand for these products during March has been significant.
    Our team in New Zealand has an important role to play in providing product to meet the
    demand in Australia and New Zealand and we continue to ship product out of New
    Zealand. They have been able to do this successfully to date and they continue to strive
    to meet these demands in coming months.
    Half Year
    At our AGM in January, we provided shareholders with an update on our first half
    financials. Our result will be in line with that update.
    We are pleased to say that our net debt position (on a like-for-like basis vs prior year) is
    more favourable, reflecting strong inventory and working capital management.
    We will be reporting our results for the half year ended 29 February 2020 on Thursday 16
    April 2020.
    Moving forward
    We have a strong management team in place to manage API through the COVID-19
    emergency, however the situation is fluid and we are not in a position to provide profit
    guidance for the second half. At our AGM, we referred to our forward outlook being
    dependent on trading conditions remaining unchanged. Clearly this no longer applies,
    noting that we have performed well to date in March.
    We are experiencing improved like-for-like sales throughout our Priceline Pharmacy
    network, but we cannot predict how long that will continue. We do know that Priceline
    Pharmacies are highly likely to remain open throughout the entire emergency due to their
    essential role in healthcare.
    Our Pharmacy Distribution business remains strong and will keep delivering vital medicines
    and other products to our community pharmacies.
    Australian Pharmaceutical Industries Limited
    250 Camberwell Road Camberwell VIC 3124 Australia
    T: +61 3 8855 3000 F: +61 3 8855 3400 www.api.net.au ACN 000 004 320
    At this stage, API’s strong balance sheet will allow us some flexibility in managing the
    business in coming months, even if some parts of our business are unable to trade.
    In conclusion, we are sure you will join us in thanking everyone in the business, particularly
    those working so hard in our distribution centres delivering to pharmacies throughout
    Australia as well as our Priceline, Soul Pattinson and Pharmacist Advice pharmacists and
    staff as they go way above and beyond what is normal to help keep our community
    reassured, safe and well.
    On behalf of all the API Board, and all our people, stay safe and we wish you the best of
    health.

    courtesy of Bell Direct
    =============================================================================

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