Galenica : Rapport sur les questions non financières (en anglais)

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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Contents

03 Foreword

1. Business operations
2. Business model

1. Materiality matrix
2. Opportunities and risks

1. Environmental matters
2. Greenhouse gas emissions and resources

1. Waste and packaging

1. Social issues
2. Dialogue with stakeholders

1. Patient safety

1. Security of supply and procurement

1. Health promotion

1. Social commitment

1. Employee-relatedissues
2. Attractive workplace

1. Occupational health and safety

1. Equality and diversity

1. Respect for human rights
2. Sustainable and ethical corporate governance

1. Integrity in the supply chain

66 Combating corruption

68 Due Diligence and Transparency in relation to Minerals and Metals from Conflict Areas and Child Labour

70 Appendix

• Calculation basis

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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Foreword

Dear Shareholders,

Dr Markus R. Neuhaus,

Chair of the Board of Directors

In accordance with the provisions of the Swiss Code of Obligations (CO), we are hereby publishing a report on non-financial matters pursuant to Art. 964a et seq. for the first time for the 2023 financial year.

In this report, we provide information on our performance, due diligence, targets and risks in the areas of the environment, social issues, employees, human rights and anti-corruption. We also describe our business model and the impact of our business activities on the environment, people, the economy and corporate governance. Further information on our sustainability activities that do not fall under the statutory provisions of Art. 964a ff. CO can be found in the Sustainability Report as part of our Annual Report 2023. The sustainability report is prepared in accordance with the GRI Sustainability Reporting Standards.

The structure and content of the non-financial report are based on the legal requirements of the Swiss Code of Obligations. The report covers Galenica Ltd. and includes its controlled subsidiaries, which are listed on page 198 of the Annual Report. Information is provided for each of the entities included in the key non-financial figures. The report covers the period from 1 January 2023 to 31 December 2023.

The non-financial report was approved by the entire Board of Directors of Galenica Ltd. on 7 March 2024 and will be submitted to the next General Meeting on 10 April 2024 for approval.

We believe that sustainability is a key component of our business activities, as we support people at all stages of life on their journey to health and well-being. This is also reflected in our Articles of Association, which define the purpose of our company as long-term and sustainable value creation. We would like to thank you, our valued shareholders, for your trust and for joining us on this journey.

Dr Markus R. Neuhaus,

Chair of the Board of Directors

Business operations

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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Business model

Business operations

Galenica is active in the healthcare industry and offers healthcare services and products throughout Switzerland. Its customers include patients, pharmacies, drugstores, physicians, hospitals, care homes, health insurances and pharmaceutical companies.

The business activities of the Galenica Group comprise two segments. The "Products & Care" segment consists of the "Pharmacies", "Healthcare" and "Products & Marketing" Service Units. They develop and market health services and products via various channels - in pharmacies, online and at home - to private customers and patients as well as to business customers and partners. The "Logistics & IT" segment consists of the "Wholesale & Logistics" and "IT & Digital Services" Service Units. They develop and operate the logistics, IT and digital infrastructure and digital platforms for the entire Galenica Group and for customers and partners in the healthcare industry.

The Galenica Group's value chain comprises production, packaging, logistics, marketing and information, retail and medication use.

Inputs

Financial capital

• Equity/shareholders
• Dept capital

KPIs

1.5x Dept Coverage

Produced capital

• Buildings (owned/rented)
• Infrastructure (transport/IT)
• Production equipment (internal/external)
• Fleet (own/partner)

KPIs

15% Electric vehicles

369 Pharmacies

78.8 mio. CHF investments in tangible and intangible assets

Intellectual/innovation capital

• Brands
• Distribution licences
• Own developed software
• Investments in digital services
• Skilled personnel

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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KPIs

80 own and partner brands

3.6 mio. CHF Investments in own developed

Human capital

• Number of employees
• Training/further education
• Personnel expenses
• Cultural development

KPIs

7,902 Employees

551.0 mio. CHF Personnel expenses

5.4 mio. CHF Investment in further education

Social capital

• Strong long-term partnerships
• Regulators
• Suppliers
• Customers

KPIs

1,300 Suppliers

26 Memberships in associations

Ecological capital

• Energy use
• Fossil fuels
• Renewable resources
• Water
• Land

KPIs

46% Electricity from renewable sources

15% Renewable drives for vehicle fleet

1,149,293 m3 Water withdrawal

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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Business model

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Outputs / Impacts

Financial capital

• Sales/profit
• Operating Cash Flow
• Dividend

KPIs

5.1% ROS

3.0% Dividend yield

Produced capital

• Pharmacy network
• Products
• Security of supply/procurement

KPIs

500,000 products & packages shipped GDP standards

Intellectual/innovation capital

• Services in pharmacies
• Own software licensing
• Customer journey
• Efficient processes
• Patient safety
• Prevention
• Generics substitution

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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KPIs

270 mio. CDS.CE Checks

138,000 Health services provided

Human capital

• Employee satisfaction
• Motivation
• Recommendations/employer attractiveness
• Safe working environment

KPIs

12% Fluctuation rate

51.7% Women in management

0.47% Absence rate

76 Motivation score

76 Recommendation score

Social capital

• Broader product range
• Reimbursement health insurance
• Efficiency gains
• Expansion of expertise
• Representation of interests
• Long-termcontracts
• Integrity in supply chains
• Reputation
• Customer satisfaction

KPIs

5 Co-operations with health insurance

92.5% Net Promoter Score (target achievement)

Ecological capital

• Emissions
• Water consumption

KPIs

85,972 GJ Electricity consumption

12,669 tCO2e GHG emissions

Outcomes

Contribution to the SDGs

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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Materiality matrix

In 2023, Galenica conducted a materiality analysis based on the dual

Business operationsmateriality principle. First, the impact of Galenica's business activities on the social, environmental and economic environment was assessed through interviews with experts and stakeholders relevant to Galenica. We also drew on legal requirements, information from ESG standards and ratings, and peer comparisons to determine the impact. The identified impacts of business activities were summarised into overarching topics and discussed by the Executive Committee and the Board of Directors. Using an online survey, internal and external stakeholders - investors, partners, suppliers, customers, associations, employees and authorities

• were asked about the key topics. They had to assess each from two perspectives and assign a score from very low to very high:

• Relevance for Galenica (outside-in perspective)
• Relevance for the social, environmental and economic environment of Galenica (inside-out perspective)

We have evaluated the results of the online survey and summarised them in the matrix below. The materiality matrix was acknowledged by the Executive Committee and the Board of Directors.

Galenica	very high
Relevance for	high
	rather high
	rather deep
	deep

deep

Data Protection

Patient safety

Security of supply

IT Security and Cybercrime

and procurement

Health and

Health promotion

Attractive workplace

Sustainable and

safety at work

ethical corporate governance

Waste and packaging

Integrity in the supply chain

Greenhouse gas emissions

Equality and Diversity

and resources

Social commitment

rather deep

rather high

high

very high

Impact on the economic, environmental and social environment

Economic responsibility		Social responsibility		Environmental responsibility

2023 Report on non-financial matters pursuant to Art. 964a et seq. of the Swiss Code of Obligations

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Opportunities and risks

Business operations

Galenica defines risk as the possibility of an event or action leading to immediate financial loss or other adverse consequences. Galenica has a risk management process in place that supports the Board of Directors, the Executive Committee and the respective management teams of the Group companies in identifying and assessing potential risks in good time and taking the necessary preventive measures. The goal of this process is to identify and assess significant risks at all management levels and to manage them while making conscious use of the opportunities the process provides.

As part of Group-wide Galenica Risk Management (GRM), the companies in the Group conduct a risk assessment at least twice a year. In spring, the risk managers identify the risks across the Group, categorise and assess them and define measures for managing them. This standardised process is based on a risk matrix in which the most important strategic and operational risks and their possible effects - particularly in terms of financial reputation - are identified according to predefined criteria and then evaluated according to their probability of occurrence and impact. These risks are recorded in a risk matrix for each Service Unit and, depending on their significance, also included in the Group's risk matrix. In spring, the focus is on the