Biotest : Sustainability report Declaration of compliance 2023

DECLARATION OF COMPLIANCE OF

BIOTEST AG

WITH THE GERMAN SUSTAINABILITY CODE DNK /

NON-FINANCIAL STATEMENT

(Pursuant to Sec. 315b in conjunction with 289b German Commercial Code

[Handelsgesetzbuch, HGB])

FINANCIAL YEAR 2023

Reporting standard: DNK EFFAS

Table of Contents

Preliminary remarks .................................................................................................................................3

General ....................................................................................................................................................3

Strategy ...................................................................................................................................................4

Strategic analysis and measures ....................................................................................................................... 4

Materiality ........................................................................................................................................................ 5

Goals ............................................................................................................................................................... 10

Depth of the value chain ................................................................................................................................ 12

Process Management ............................................................................................................................. 14

Responsibility .................................................................................................................................................. 14

Rules and processes ........................................................................................................................................ 16

Control ............................................................................................................................................................ 17

Incentive systems ........................................................................................................................................... 18

Stakeholder participation ............................................................................................................................... 19

Innovation and product management ........................................................................................................... 19

Environment .......................................................................................................................................... 23

Use of natural resources ................................................................................................................................. 23

Resource management ................................................................................................................................... 24

Climate relevant emissions ............................................................................................................................. 27

Company ............................................................................................................................................... 28

Employee rights .............................................................................................................................................. 28

Equal opportunity ........................................................................................................................................... 30

Qualification ................................................................................................................................................... 32

Human rights .................................................................................................................................................. 35

Corporate Citizenship ..................................................................................................................................... 36

Political advocacy ........................................................................................................................................... 38

Conduct that complies with the law and policy .............................................................................................. 41

Report on EU Taxonomy Regulation ....................................................................................................... 44

Independent assurance practitioner's report .......................................................................................... 54

Preliminary remarks

For the first time in 2018, Biotest AG submitted a Declaration of Compliance with the German Sustainability Code [Deutschen Nachhaltigkeitskodex, DNK] and summarised separate non-financial report. However, given the company's exceptional corporate responsibility ethic, sustainability has been embedded in its business model, value creation structure and products since it was founded. Our closer stakeholders are well-aware of this and we take the legal reporting obligation as an opportunity to show a broader public how sustainable Biotest's business model and purpose are. Unless otherwise noted in the text, statements and key figures relate to the Biotest Group. 3 foreign sales subsidiaries and 3 plasma collection subsidiaries belong to Biotest AG.

Measured by the legal materiality criteria for reporting on non-financial risks - after implementing risk reduction strategies - no material net risks according to HGB Sec. 289c (3) No. 3 and 4 have been identified.

For ease of reading, we refrain from using both masculine and feminine pronouns when referencing individuals and groups. However, words and pronouns referring to one gender also refer to all genders.

This Declaration of Compliance follows the guidelines, the structure and the proposed criteria selection of the German Sustainability Code (DNK).

The Supervisory Board of Biotest AG has examined and approved the Declaration of Compliance. KPMG AG Wirtschaftsprüfungsgesellschaft carried out an external audit with limited assurance. References to information outside of the Management Report are not part of the non-financial statement and are not part of the information audited by KPMG.

General

Biotest is a provider of biological therapeutics derived from human plasma. With a value chain that extends from preclinical and clinical development to global distribution, Biotest has specialised primarily in the areas of clinical immunology, haematology and intensive care medicine. Biotest develops and markets immunoglobulins, coagulation factors and albumin based on human blood plasma. These are used for diseases of the immune system and the hematopoietic system. The company's headquarters and manufacturing are located in Dreieich. Biotest is present in around 70 countries with its own sales subsidiaries and via local distribution partners. We employ nearly 2,600 people worldwide, and Group revenue amounted to €684.6 million in the financial year of 2023.

The impact of our business activities on society is immediate and positive because Biotest produces essential medications for the critically and chronically ill. We are thus creating a new outlook for these individuals with trend-setting research and innovative products. Moreover, these products are based on human blood plasma as a natural and replicating raw material.

With the exception of electricity consumption, neither the further processing nor the delivery/marketing of the final products are associated with significant adverse effects on the environment. Our value chain is highly regulated by a large number of external and voluntary standards, and just as rigorously monitored. Equally, we have no indications of forced and child labour or other exploitation in this regard. The blood plasma is a voluntarily donated raw material from healthy, specially qualified adult donors. Biotest AG's business model is described in detail in the Management Report.

Strategy

Strategic analysis and measures

1.

The company describes its analysis of the opportunities and risks for its key activities with respect to sustainable development. The company explains the concrete measures it is taking to operate in alignment with major applicable industry, national and international standards.

Global megatrends not only create risks, but also open up opportunities for us. We use our expertise and innovative capacity to take advantage of these opportunities and contribute to overcoming global challenges.

A steadily growing and ageing global population requires new and better medications. With an expanding population, the number of people suffering from serious and chronic diseases is also growing, and we manufacture essential medications for certain indication areas. Well over one billion people have no access to necessary medications, because adequate or affordable healthcare is unavailable in many regions. Initiatives in these countries, e.g., breaking down access barriers with pro bono supplies, are effective responses to these challenges.

As an international company, we are also subject to ethical, economic and legal risks that we must constantly work to minimise. We are committed to complying with legal and ethical standards in our interactions with suppliers and other business partners around the world. We have created the necessary structures and systems to achieve this. Our energy and environmental management is designed to minimise even further the environmental impacts of our business activities. Our employees consider us to be both a fair and attractive employer.

We need to ensure our economic management is sustainable and that we are taking our business activities in a sustainable direction to ensure our company is future-proof. Our goal is to ensure our business success by aligning it with societal and ecological requirements, to raise our company's value.

Responsible corporate governance forms the foundation for this approach, and opportunity and risk management is an integral component of our management processes. To this end, we have established processes and structures to systematically recognise and seize opportunities, and to avoid risks that threaten our business success.

As part of our strategy and planning processes, we pay close attention to relevant external and internal challenges, analyse economic, environmental and social developments, extrapolate trends and observe macroeconomic and industry circumstances, to identify opportunities and scope for development for Biotest.

Biotest also expressly supports the comprehensive approach of the United Nations Sustainable Development Goals (SDGs) for 2030. In particular, we support the goals for health and well-being (SDG 3) in all countries in which we operate with our core business. The other SDGs such as 'Decent work and economic growth' (SDG 8) and 'Gender equality' (SDG 5) also correspond to our internal requirements for corporate social responsibility.

Biotest's sustainability report is based on the ten principles of the United Nations Global Compact (UNGC), as well as other international guidelines and recommendations, including for the definition and selection of non-financial indicators and for reporting, such as those of the OECD. The recommendations of the 'European Federation of Financial Analysts Societies (EFFAS)' are taken into consideration when selecting and measuring indicators.

Materiality

2.

The company indicates which aspects of sustainability have a substantial influence on its business, and how it integrates these into its strategy and systematically addresses them.

Biotest produces biological medications that are derived from human blood plasma. This plasma is provided by healthy people, who want to help people who are ill - the donors do not sell it, they donate it and only receive a small allowance according to the Transfusion Act §10. And they do so voluntarily out of personal conviction and in the belief that they are making a significant contribution to others who are far less fortunate. Their plasma donations offer fellow human beings a chance of survival, or improve the quality of life and extend the life expectancy of people with chronic diseases. Need for plasma proteins can be very high - for example, patients with primary immunodeficiencies are dependent on immunoglobulins as their only treatment option.

In some 70 countries around the world such patients rely on our help and the quality and efficacy of our medications.

Producing medications that rely on voluntary donation of a scarce human raw material, with the goal of offering live-saving benefit to seriously ill people, makes our business highly responsible in its very essence. This responsibility to donors and seriously ill patients and our value creation structure and mission are at the heart of what sustainability means for us.

The exceptional responsibility that Biotest holds here with respect to donors, their donations and patients, characterises the claim and self-conception of our sustainability strategy:

TAKING RESPONSIBILITY.

The links in our value chain and processes are geared towards this, and all our actions to protect donors, their donations and patients are key features of our sustainability approach. All activities and processes in the entire value chain that are related to protection, safety and quality are therefore relevant to our sustainability strategy.

We mean by this not only the direct protection of donors and patients, careful management of plasma and the effort to gain maximal yield and as many products as possible from this scarce raw material. All measures to support our medications' efficacy, ensure good tolerability and eliminate side effects are also components of sustainability.

Our responsibility takes concrete form in several areas:

Responsibility towards patients and users

Biotest works in a highly regulated environment in which drug safety and quality are the top priorities. We comply with this environment by following strict safety standards that far exceed the legal requirements, and comprise two central aims: Ensuring safety and quality in all the research, development and manufacturing phases for our products, and producing medications that set benchmarks for safety, quality, tolerability and user friendliness.

These goals are operationalised in the form of a rigorous zero-error tolerance with respect to the health of plasma donors, plasma donations and the final product, otherwise contaminated plasma could cause severe infections of patients.

If doubt arises at any point as to the safety of a donor, indications concerning the quality of plasma or any other possible concerns about the final product, we respond immediately and systematically. For example, if a donor is found to be infected with HIV, hepatitis or parvovirus B19 subsequent to a donation, not only is he excluded from further donation, but all plasma in storage is destroyed.

Concerning our responsibility towards patients, we do not differentiate based on the countries they live in or whether less restrictive or less costly standards would apply than at our headquarters - we serve all patients under identical safety standards which are the highest applicable here in Germany.

Responsibility towards our donors

Well known is the system of the obligation to report side effects for medicinal products - the so-called "pharmacovigilance". However, we are just as much interested in our donors'wellbeing before, during and after donation. As part of the "haemovigilance" system, side effects and unusual reactions during the donation are recorded and evaluated.

Haemovigilance is a systematic monitoring system mainly to ensure the donor's well-being but also to continuously monitor and improve the donation process itself. Preventive protective measures have top priority for the donor; the goal for the donation process is the early detection of new risks and quality deficiencies while plasma donation.

Our donors should feel safe and should want to return. We take our responsibility for our donors very seriously.

Responsibility towards our employees

Our responsibility towards our employees has been translated into various individual goals and is supported with multiple concepts and actions. We create the conditions for our employees to work independently, with a high level of accountability and in teams with very skilled and motivated co-workers. We seek out creative thinkers who crave challenging tasks, and offer in exchange varied occupations, space for personal development and manifold promotion opportunities.

This responsibility is also reflected in numerous training measures and in a wide range of further training programmes. We cover the entire value chain at our location in Dreieich with over 1,600 employees. This means that close and personal cooperation is also possible across departments. This allows our employees to successfully contribute their knowledge and experience. It is particularly important to us at Biotest that we give our employees an opportunity for further development. Through a wide range of off-and-on-the-job training programmes, we enable our employees to develop and grow according to their skills and desires.

We also create a scope for development and collaboration with flat hierarchies and short decision pathways. Despite the Group connection to Grifols, we maintain the culture of a medium-sized company with management that is close to the employees and takes their concerns seriously.

In addition to the possibility of remote working and flexible working hours, we also ensure thecompatibility of work and familywith our own day-care centre, the BioNest. Last but not least, our responsibility towards our employees is apparent in our attractive social and financial benefits (see criterion 16).

Responsibility for young people

73 trainees as of 31 December 2023 represent another record for Biotest. Based on detailed requirements planning, we can ensure that there is a subsequent position for all trainees in the ongoing operations.

In 2023, we were recognised by the German Chamber of Commerce and Industry [Industrie-und Handelskammer, (IHK)] as a TOP training company. It is important to us that the trainees acquire the technical knowledge and the necessary skills in their training occupation. Further, we also promote interdisciplinary cooperation in projects, for example, the Hessen-Chemie trainee competition.

We participate in girls' day / boys' days, inform schoolchildren about the apprenticeships that Biotest offers and we also offer internships for schoolchildren. For sixth formers and students, we organise creation labs and offer targeted orientation events alongside open days.

Due to our close cooperation with universities, we are not only represented at the corresponding job fairs, but we also organise regular information days and production site tours or offer a variety of internships. With internships at our company, we do not only support students in bachelor's and master's courses, but also people who are in a retraining programme at the employment agency.

We not only accept responsibility for youth, but also for our employees' children. Because in our BioNest childcare centre we ensure intensive and individualised care for children with above-average carer ratios.

Responsibility towards investors

As a public company listed on the stock exchange, we have a financial responsibility to our shareholders. This includes the careful use of financial resources, sustainable and long-term management as well as transparent and timely information on all important and, if necessary, short-term developments in the company and its markets. These goals are operationalised with a system of objectives comprising value creation, profitability, inventory management and other targets, and which is partially tied into the remuneration system.

Responsibility for the environment

The electricity consumption at the Dreieich site corresponds to that of a city with 23,000 inhabitants. In addition, high water consumption is essential in the production of our biological medicines. Beyond that, our business activities do not cause any significant environmental impact. And even if this electricity consumption directly serves the sustainability objective of product safety, Biotest does not consider this fact to be a natural or unalterable conflict of objectives.

Therefore, the focus of our vision 'Go Future' is: to achieve complete carbon neutrality by 2035. The management team has committed to this vision.

The planned conversion of electricity procurement to local renewable sources is intended to be a significant step towards this. We want to achieve a fundamental transformation in the future, however, by completely rethinking our current energy mix and looking for ways to completely replace natural gas, e.g. with hydrogen.

Responsibility in the world

Providing adequate medical care and treatment with plasma proteins to people, viewed from a global perspective, is more the exception than the rule. For example, around 80% of the patients suffering from haemophilia A have no or insufficient access to appropriate treatment. Biotest accepts this responsibility.

In this regard, we were one of the initiators of the 'Project Recovery' of the World Federation of Haemophilia (WFH) to provide free medicines for patients in developing countries. We also support the WFH 'Path to Access to Care and Treatment' (PACT) programme in order to improve public relations and diagnosis and increase access to sustainable care for people with inherited bleeding disorders. This is accomplished through training, education, partnerships, on-site initiatives and evidence-based advocacy. The PACT programme aims to significantly improve the status of over 20,000 patients in 20 countries.

In February 2023, south eastern Turkey was hit by a devastating earthquake. It is particularly important to Biotest - particularly in such cases - as a manufacturer of life-saving medications, to quickly make significant contributions to alleviating the hardship. With the donation of human albumin - which is used to treat shock, for example, after serious injuries and bleeding - Biotest was able to quickly and effectively ensure the care of 2,000 seriously injured people.

Biotest also made contributions to alleviating the suffering in Ukraine in 2023. With the free delivery of 2.8 million units of Haemoctin, access to life-saving therapy was secured for 80 patients with haemophilia. And, last but not least, we also have a responsibility towards the healthcare system - which we seek to support not only with the safety and quality of our medications, but also by developing dosage forms that can reduce the amount of doctor appointments, so as to reduce cost burdens on medical payment systems through self-medication, for example.

Our materiality analysis is based on a comprehensive benchmark analysis with pharmaceutical companies of various sizes as well as other plasma protein producers and an individual comparison of results with our parent company, Grifols, in 2023. The safety issues relating to product, donation and donor are of particular importance to the industry; access to healthcare, employee development and occupational safety, environmental footprint and ethical businessconduct1. These topics are already the focus of our sustainability management and are addressed through numerous measures. Here, access to health care, for example, is not only important to patients. This issue is also of considerable importance for our business, especially against the background of a persistent shortage of plasma. Through the continuous expansion of plasma centres, we are working to overcome this shortage and therefore create the basic prerequisites to enable any kind of 'access to healthcare' at all. In the reporting year, another plasma centre was opened both in Germany and Hungary.

Information on the opportunities and risks of key sustainability aspects is also provided in criteria 1 and 3.

Goals

3.

The company describes which qualitative and/or quantitative and time-delineated sustainability goals are defined and operationalised, and how their progress is measured.

The term "sustainability" does not have a single definition. However, in the interest of simplicity its various concepts can be traced back to a common denominator. After all, despite differing definitions, the sustainability discussion is basically about taking responsibility for future generations and their quality of life, as well as already aligning today's actions to these goals.

Our central sustainability motto is to take responsibility and to live up to this as effectively as possible. And we do not just accept this responsibility for future generations. We take on such responsibility today by offering people with serious diseases a chance of survival and trying to improve the quality of life of people with chronic illnesses as best we can. Because blood plasma is a natural and regenerative raw material, and no significant environmental damage is caused by our production processes, - with the exception of the power consumption for cooling the plasma - our activities and use of resources will not be a significant burden on future generations.

'Taking responsibility' is not only the central guiding principle for Biotest, but it also represents the overarching concept and frame of reference for our sustainability management. Accordingly, this concept is designed in several dimensions and operationalised in individual goals.

This not only applies to specific objectives for key stakeholders such as donors, patients, employees and owners, but also includes key sustainability issues such as the environment, resource use and compliance with external (e.g., legislation) and internal standards (e.g., process safety, zero-error tolerance).

1 See 20. Corruption