Galenica : Rapport annuel 2023 (en anglais)

Annual report 2023 of the Galenica Group and Galenica Ltd.

Galenica Annual report 2023

Milestones 2023

2

Milestones 2023

January

February

March

April

Verfora acquires	Aid for earthquake victims
Padma Ltd.	in Turkey/Syria
With the acquisition,	We are saddened about
Verfora expands its	the fate of these people.
complementary medicine	Galenica doubles emp-
portfolio and supplements	loyees' private donations
its range of reimbursable	to Swiss Solidarity.
medicines.

The new Galenica

­branding is launched

Inspired by the network concept, the new corporate design, with the logo as its focal point, serves primarily as a symbol of a new beginning and trans- formation.

Leading online pharmacy in Switzerland

Switzerland's leading online pharmacy is created in a joint venture under the name Mediservice. Redcare will hold 51% and Galenica 49%.

May

Rebranding of Sun Store pharmacies in German- speaking Switzerland

The ten Sun Store pharmacies in German-speaking Switzerland are being transferred to the Amavita world. This generates syn- ergies, particularly in the marketing area.

June

Galenica acquires 16% stake in AD Swiss Net Ltd.

With "BENECURA ­public", we further advance ­integrated and networked healthcare in Switzerland.

July

High-ranking visit to Padma

With the visit of His

­Holiness Sakya Trizin, head of the Sakya School of Tibetan Buddhism, and the third-ranking Tibetan Lama, Padma experiences a rare highlight.

August

Ambassador visits Galexis As part of the FDFA Ambassadors' Conference, a group of ambassadors visits the Galexis site in Niederbipp.

September

New Head of

­People & Culture

Arianne Hasler joins Galenica as Head of the People & Culture Service Unit (formerly Human ­Resources) and becomes a member of the ­Executive Committee.

October

Opinio employee survey

• only online for the first time
  The online survey is con- ducted from 17 October­ to 15 November. A par- ticipation rate of 72% and the new employee recommendation rate of 76, which has increased by two points, are gratifying.

November

Opening of the Amavita pharmacy at the main station in Zurich

After a three-year renovation phase, the team of the Amavita Bahnhof Apotheke located at Zurich main station is able to welcome its customers back to its original location in renovated and redesigned premises.

December

Joint venture with Planzer

The new company, called Health Supply Ltd., aims to make the transportation of medicines and other products to healthcare providers more efficient and sustainable.

Galenica Annual report 2023

3

Contents

1. Overview

1. Highlights
2. Key figures

1. Management report

1. Foreword

1. Financial Performance Group

1. Products & Care

1. Logistics & IT

1. External environment

1. Opportunities and risks

1. Outlook 2024

44 About us

1. Purpose of the company

1. Business model

1. Galenica Strategy

1. Sustainability

1. Corporate Reporting (in Englisch)

1. Corporate Governance

1. Remuneration Report

1. Financial Reporting (in Englisch)
2. Alternative performance measures 2023 of the Galenica Group

1. Consolidated financial statements 2023 of the Galenica Group

1. Financial statements 2023 of Galenica Ltd.

1. Non Financial Reporting
2. Transparency about non-financial matters
3. GRI Report

1. Sustainable and ethical corporate governance

1. Integrity in the supply chain

1. Data protection

1. IT security and cybercrime

1. Greenhouse gas emissions and resources

1. Waste and packaging

1. Attractive workplace

1. Occupational health and safety

1. Equality and diversity

1. Patient safety

1. Security of supply and procurement

1. Health promotion

1. Social commitment

1. Appendix

282 Spotlights

Galenica Annual report 2023

Highlights

Overview

Overview - Highlights

4

Galenica continues to grow in financial year 2023: The Galenica Group grew strongly with an increase in sales of 4.4% in financial year 2023 and generated consolidated net sales of CHF 3,746.0 million. Adjusted for the extraordinary sales in connection with COVID-19(self-tests,COVID-19 vaccinations and rapid tests) in the prior-year period, growth amounted to a high 5.0%.

Highlights of the 2023 financial year

Consultations and services

138,000

+14% compared to previous year

Vaccinations

44,000

in Galenica Group pharmacies

Employee survey

76

Satisfaction and motivation score among employees of the Galenica Group

Adjusted1 EBIT increased by 0.4% to CHF 191.3 million, despite special factors in the amount of CHF 9.8 million. Without these special factors, adjusted1 EBIT would have in-creased by 5.5% to CHF 201.1 million. Thanks to this solid result, the Board of Directors will propose to the Annual General Meeting a dividend at the previous year's level (CHF 2.20 per share).

Highlights of the 2023 financial year

• Around 138,000 customers made use of the healthcare services and consultations offered by Galenica pharmacies in 2023, 14% more than in the previous year.
• Compared to the previous year, demand for vaccinations in Galenica pharmacies increased by 18% (excluding COVID-19 vaccinations).
• Together with Redcare Pharmacy, Galenica established Switzerland's leading online pharmacy, adding a pure only pharmacy to its offering.
• After more than three years of renovation work, the Amavita Bahnhof
  Apotheke opened its new retail premises at Zurich's main station in
  November 2023.
• With the acquisition of Padma, Verfora further expanded its complementary medicine offering, thereby increasing its overall market share in the Swiss consumer healthcare market to 10.3%.
• The home care offerings in the Galenica network, in particular those of Lifestage Solutions, Bichsel and Medifilm, were linked more closely in the year under review and performed very successfully, with demand significantly higher than in the previous year.
• Galexis actively contributed to improving security of supply of medicines in Switzerland through its "Safety Stock" initiative.
• The Documedis® medical and pharmacy software was technically further developed in the reporting year. In 2023, over 270 million "Clinical Decision Support Checks" (CDS) were carried out on the basis of Documedis® solutions, 145% more than in the previous year.

1. Excluding the effects of IAS 19 and IFRS 16. See chapter "Alternative performance measures".

Galenica Annual report 2023

Overview - Key figures

5

Financial key figures

Net sales	EBIT adjusted 3)	Number of employees
in million CHF	in million CHF	at 31 December 2023
Galenica Group	Galenica	Galenica
Group	Group

3,746.0191.37,902

Products & Care2) : 1,635.6	Products & Care 2) 3) : 152.3	Products & Care: 5,808
Logistics & IT2) : 3,077	Logistics & IT 2) 3) : 42.3	Logistics & IT: 1,819
		Group Services: 275
in million CHF		2023	2022 1)	Change
Net sales		3,746.0	3,588.5	4.4%
Products & Care 2)		1,635.6	1,584.0	3.3%
Logistics & IT 2)		3,077.0	2,933.3	4.9%
EBIT		199.1	193.1	3.2%
EBIT adjusted 3)		191.3	190.6	0.4%
in % of net sales		5.1%	5.3%
Products & Care 2)3)		152.3	143.3	6.3%
in % of net sales		9.3%	9.0%
Logistics & IT 2)3)		42.3	49.2	-14.2%
in % of net sales		1.4%	1.7%
Profit from continuing operations		165.7	157.3	5.3%
Profit from continuing operations adjusted 3)		161.6	157.2	2.8%
Total assets		2,991.0	2,612.8	14.5%
Shareholders' equity		1,475.2	1,249.5	18.1%
Equity ratio		49.3%	47.8%
Capital contribution reserves		199.9	254.8	-21.5%
Net debt adjusted 3)		362.1	294.6	22.9%
Debt coverage adjusted 3)		1.5 x	1.2 x
Gearing adjusted 3)		24.4%	23.2%
Investment in property, plant and equipment and intangible assets	78.8	70.7	11.5%
Cash flow from operating activities adjusted 3)		173.5	184.4	-5.9%
Free cash flow 3)		49.3	57.9	-14.7%
Employees at reporting date (FTE)		5,907	5,631	4.9%

1. Restated (refer to chapter Consolidated financial statements of the Galenica Group, note 4 of the Annual report 2023)
2. Reported for each segment not taking into account Group Services and Eliminations
3. For details to the adjusted key figures refer to chapter Alternative performance measures of the Annual report 2023

Galenica Annual report 2023

Overview - Key figures

6

Share price performance in percent

Galenica

Swiss Performance Index (SPI)

Share information
in CHF	2023	2022
Share price at reporting date	72.75	75.55
Highest share price for the year	82.20	79.00
Lowest share price for the year	65.10	60.55
Market capitalisation at reporting date in million CHF	3,625.3	3,763.6
Earnings per share from continuing operations 1)2)	3.31	3.15
Earnings per share adjusted from continuing operations 1)2)3)	3.23	3.15
Shareholders' equity per share 2)	29.52	25.04
Gross dividend per share 4)	2.20	2.20
- of which paid out from retained earnings	1.10	1.10
- of which paid out from reserves from capital contributions	1.10	1.10
Dividend yield 5)	3.0%	2.9%
Pay-out ratio adjusted 1)6)	68.2%	69.9%
Price-earnings ratio (P/E) adjusted 1)7)	22.6	24.0

1. Restated (refer to chapter Consolidated financial statements of the Galenica Group, note 4 of the Annual report 2023)
2. Attributable to shareholders of Galenica Ltd.
3. Net profit adjusted divided by average number of outstanding shares
4. According to Board of Directors' proposal to Annual General Meeting of 10 April 2024
5. Gross dividend per share in relation to the share price at reporting date
6. Gross dividend per share in relation to earnings per share adjusted from continuing operations
7. Share price at reporting date in relation to earnings per share adjusted from continuing operations

Galenica Annual report 2023

Overview - Key figures

7

Non-financial key figures

Key figures

Galenica reports key employee figures on employment, occupational health and safety, training and development as well as diversity and equal opportunities. In addition, further key figures on patient safety and health as well as procurement and supply security are published.

Aspect	Unit	2023	2022
Employment
Employees	number	7,902	7,608
Investment in training	Mio. CHF	5.4	4.5
Apprentices in training	number	896	838
Patient safety and health
Availability of medicinal products on average	%	98.8	99.0
Energy consumption
Energy consumption (within and outside of the organisation)	GJ	254,500	205,734
	MWh/
Energy intensity	FTE	11.97	10.77
Emissions
Direct and indirect GHG emissions	tCO₂e	12,669	10,052
	tCO₂e/
Intensity of GHG emissions	FTE	2.14	1.98
Waste
Total weight of waste generated	t	3,653	3,228
Water
Water withdrawal	m³	1,149,293	976,438

Management report

Galenica Annual report 2023

9

Contents Management report

10 Foreword

1. Financial Performance Group

1. Products & Care

1. Logistics & IT

1. External environment

1. Opportunities and risks

1. Outlook 2024

Galenica Annual report 2023

Management report - Foreword

10

We create added value for the healthcare system (GRI 2-22)

Dr Markus R. Neuhaus, Chair of the Board of Directors, und Marc Werner, CEO

Dear Shareholders, Ladies and Gentlemen,

The 2023 financial year was characterised by opportunities, changes and challenges. At 4.4%, we once again achieved strong growth and further developed Galenica. Due to special effects, however, we were unable to fully meet our ambitious earnings targets. Nevertheless, with EBIT on a par with the previous year, we achieved a good result and are pleased to be able to propose a stable dividend of CHF 2.20 per share. We have compiled a detailed operational review of the 2023 financial year for you in the Management Report.

Management Report 2023

At the beginning of the year, we embedded our network philosophy even more strongly in our strategy. The Galenica network consists of our Business Units, which work closely together, create common platforms and thus lay the foundation for a continued successful future. With our new logo and branding for the Galenica network, we have created a strong symbol of our company's performance. We offer patients and customers even more closely interconnected and integrated solutions from a single source with our products and services and can meet their needs, both today and tomorrow, in a more seamless, efficient and, above all, personal way.

"The expanded healthcare services in our pharmacies not only meet customer needs, they also help to curb the increasing cost pressure in the healthcare sector."

Added value for our customers - offline and online

Last year, we further expanded the range of advice and healthcare services in our pharmacies and further improved the customer experience in bricks-and-mortar pharmacies with new store design and advisory concepts. The impressive figures show that the healthcare services provided by our competent employees are very popular: 14% more consultations were held - around 138,000 in 2023. Demand for vaccination services in pharmacies is also high. A total of 44,000 vaccine doses were administered in 2023, mainly against influenza and TBE, an increase of 18% (excluding COVID-19 vaccinations). These low- threshold offers not only meet customer needs, but also help to curb the increasing cost pressure in the healthcare sector. This is also recognised by other service providers in the healthcare system - in 2023, for example, additional health insurers added pharmacy services to their supplementary models and are offering reimbursement for them.

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