Medacta : 2023 Report on Non Financial Matters

S U S TA I N A B I L IT Y R E P O RT 2 0 2 3

Healthy Patients in a Healthy World

A year in review

Governance

Caring for patients

Caring for people

Caring for the environment

Caring for the community

2	Sustainability Report 2023l Management Report

FOREWORD AND METHODOLOGICAL NOTE

This document constitutes the seventh Sustainability Report (hereinafter also the "Report") published by Medacta Group SA (hereinafter the "Group" or "Medacta"). This edition complies with the applicable elements of article 964 of the Swiss Code of Obligations (hereinafter "art. 964"), governing the disclosure/ communication of non-financial information.

The Report presents information with respect to human rights, anti-corruption, and bribery, also highlighting a description of due diligence and measures taken to implement the policies related to internal guidelines or strategies of Medacta regarding these topics.

The Report is published by Medacta as a separate document from the 2023 Annual Report.

SCOPE OF THE STATEMENT

The scope of reference of the information contained in the Report coincides with the area of consolidation of the Annual Report as of 31 December 2023 and, therefore, includes the parent company Medacta Group SA and all its consolidated companies on a line-by-line basis. Collected data, unless otherwise indicated, are presented on a consolidated basis.

Data and information presented in the Report refer to the period between 1 January 2023 and 31 December 2023; in some cases, for comparative purposes related to future targets, we provide data and information relating to the year chosen as a reference (baseline).

REPORTING AND APPLICATION OF REPORTING STANDARD PROCESS

The Report was drawn up in accordance with art. 964 (summary table on page 74) and with reference to the Sustainability Reporting Standards published by the Global Reporting Initiative (GRI) currently in force. The GRI Table, with the indication of the standards and the respective indicators applied, can be found on pages 72-73.

The Report was prepared based on a structured reporting process that included:

• the involvement of corporate facilities/ departments that contributed to the identification and evaluation of the material topics, as well as of significant projects/initiatives to be described in the document and to the collection, consolidation, and validation of quantitative data, each insofar as its own area of purview.
• the Report has been approved by the Board of Directors ("BoD") of Medacta Group SA, issued at the meeting on 12 March 2024. The Report was published the day after the BoD approval.

The contents of the Report have been supplemented, as warranted, by other information contained in the Annual Report (Management Report, Corporate Governance Report, Remuneration Report, and Financial Report) and on the Company website, which can be consulted by following the specific references. The Remuneration Report and the Financial Report are both subject to audit opinion.

The Sustainability Report is available on the Company website at: sustainability.medacta.com

The Investor Relations department is the contact point for any question about the report (investor.relations@ medacta.ch).

This Report edition has not been subjected to external assurance.

READ MORE 2023 Annual Report*

READ MORE http://www.medacta.com

The data collected in this report relate to the activities carried out by our Group in 2023. The analysis includes the entire scope of our business: head- quarters, subsidiaries, educational institutes, logistics centers and Foundation, unless otherwise stated.

*https://www.medacta.com/EN/financial-reports-and-presentations

Management Report l Sustainability Report 2023

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ABOUT THIS REPORT

The Report highlights our continued commitment to sustainability. This marks our inaugural report with reference to the GRI framework- the world's most widely recognized tool for organizations to communicate and demonstrate accountability for their impacts on the environment, the economy, and people.

We present data of our impacts within the specified material topics, integral to our strategic targets for 2025 (see pages 19-20). These efforts align with our overarching purpose "Healthy patients in a healthy world."

TRACK-RECORD ON ESG RATINGS AND MAIN INDICES

Since February 2021 Medacta

has been included in SPI ESG

Index of the SIX Exchange

Since March 2021 Medacta	Rated as "Medium risk" from	Rated as an overall grade of
has been rated "AA" by MSCI
"Negligible" to "Severe",	"B+" from "A+" to "D-"
ESG ratings from "AAA" to
improved over 2022
"CCC"

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MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS

This document demonstrates our continuous evolution in terms of information related to sustainability. In recent years, sustainability has changed its raison d'etre, positioning itself as a necessary prerequisite for contemporary challenges. Through this Report we want to keep track of this evolution, which has seen us begin a journey born with the intention of defining a long-term strategy, as well as our way of being and doing business, which has allowed us, together with our ability of innovation and collaboration, to express ourselves at our best and generate sustainable shared value.

Dr. Alberto Siccardi

Chairman of the Board of Directors

TABLE OF CONTENTS

7

21

33

41

A YEAR IN

REVIEW

GOVERNANCE

CARING

FOR PATIENTS

CARING FOR PEOPLE

53

63

71

CARING FOR THE ENVIRONMENT

CARING FOR THE COMMUNITY

APPENDIX

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OUR 2023 ACTIONS

2023 Targets	2023 Actions
CARING FOR PATIENTS
Strengthening the proactive integration of	Achieved • In 2023 we updated our Design and Development
environmental sustainability in the design and	procedure to enhance emphasis on sustainability in the
development process of new products and	earliest stages of the process, making environmental
solutions.	considerations an integral aspect of product
	development from inception.

Advancement of our personalized solutions through our MySolutions Personalized Ecosystem.

Achieved • A new study confirms the accuracy of NextAR Shoulder. First European and US Peri-Acetabular Osteotomy procedures using the MyPAO Platform. NextAR Spine MIS LT procedure has been developed.

Defnition of a patient communication program	Achieved • The patient communication program has been designed
to assist physicians in their communication	and announced in the US to support surgeons during
needs and facilitate patient understanding.	their activities with patients.
CARING FOR PEOPLE
Future-proof key HRIS (Human Resource	Achieved • Signifcant investment and progress made to enhance
Information Systems) platforms, to support our	our HQ payroll and time and attendance software,
growth.	including the introduction of an Employee & Manager
	self-service portal.
Create a leading-edge learning & development	Achieved • The development of our learning agenda has led to
culture.	the creation of a blended-learning approach. Including
	partnering with a world renowned academic institution
	with the launch of 2 distinctive learning pathways.The
	launch will be deployed globally in 2024.

Continue to expand and develop our #beMedacta Values & EVP (Employee Value Proposition) initiatives.

Achieved • We continue to enhance and improve our employee benefts, such as increasing time off with 100% pay for both maternity and paternity above the statutory requirements. Including the introduction of our new employee recognition program.

CARING FOR THE ENVIRONMENT
Expansion of photovoltaic panels installation.	Delayed •	Contract's signing postponed due to technical reasons.
Reduction of water consumption in production	Achieved •	Reduction of water consumption in production process
processes.		in Castel San Pietro facility. Added new projects to
		furtherly improve production processes.
Conclusion of the analysis optimization of	Achieved •	Project activated with optimizations on a specifc
processes to reduce scrap from raw materials.		product line. Additional projects under evaluation.

	CARING FOR THE COMMUNITY
	Encouraging the development of new	Achieved • New goals achieved during the year, such as the
	generations and supporting parenting.	enlargement of the My School Ticino Campus, the
		creation of a new nursery section (spring section), the
		creation of a technology classroom (STEM), and much
		more.
	Dedication to assisting humanitarian initiatives	Achieved • Contribution to support the Ukrainian population
	improving the quality of life of patients and	afflicted by the conflict with the donation of instruments
	people in need worldwide.	for operating rooms, and other humanitarian initiatives.
	Commitment to charitable and social projects	Achieved • Several projects, both ongoing and recently started, have
	mainly focused on the local area.	blossomed over the year. Among the novelties is the
		support for the requalifcation of Laveggio Park, Ticino.
		Ongoing projects include Punto d'Incontro and Famiglia
		Affidataria Professionale (FAP) project, in cooperation
		with ATFA, and Territorial Education Project.
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A YEAR IN REVIEW

1. Letter to stakeholders

1. Medacta at the glance

1. What we do
2. Value creation strategy
3. Our sustainability approach

A year in review	Governance	Caring for patients	Caring for people	Caring for the environment	Caring for the community

LETTER TO STAKEHOLDERS

As we reflect on the journey of 2023, I am delighted to introduce our annual Sustainability Report, an insightful testament to the challenges and actions that shaped our year.

2023 has been extraordinary in terms of growth

(+19.5% in constant currency, exceeding the milestone of EUR 500 million), and we have never lost sight of our commitment to sustainable innovation and the principles of Environmental, Social, and Governance (ESG) matters.

In accordance with this approach, we have worked to further reinforce our sustainability key areas throughout the year: Caring for patients, Caring for people, Caring for the environment, and Caring for the community. These four pillars represent the facets that sustainability has in Medacta's specific context,

unveiling how the improvement of the care and well- being of patients and all other stakeholders around the world has been carved into our company culture since the beginning.

I would like to highlight an important enhancement that characterizes this year's Report in considering our material topics, which represent Medacta's most relevant impact themes. As a matter of fact, this document has been compiled around the concept of double materiality, which encompasses both the impacts on our stakeholders and those on our financial performance, as further illustrated. This holistic approach to reporting provides a deeper understanding of how sustainability factors can drive value creation and risk mitigation for our company. Following this materiality analysis, we established a set of key performance indicators to monitor and target the most pertinent topics until 2025, embracing a three-year perspective.

As we strive for sustainable growth, we added 193 new roles to accommodate our ongoing market

A year in review	Governance	Caring for patients	Caring for people	Caring for the environment	Caring for the community

penetration, each contributing to the diverse tapestry of our organization, reaching a total of 1'730 employees. Furthermore, we have made strategic investments in our infrastructure while maintaining a keen focus on environmental and social considerations. In November, we announced the expansion of our site in Rancate, Ticino, to meet the high demand for our products. The new facilities are designed to reduce energy use and GHG emissions, with an environmentally sustainable approach.

Recognizing the critical role of a resilient supply chain, we have invested to fortify its strength. These endeavors demonstrate our proactive approach, ensuring that our operations remain robust, responsive, and sustainable in the face of evolving challenges.

In the spirit of unity, we celebrated our first Medacta Family Open Day in April, with our Headquarters' employees and their families. This event emphasized our belief that maintaining a harmonious work-life

balance is vital for the overall well-being of our team. It was also an excellent opportunity to showcase our commitment to the "What we do matters" campaign, which aims to inspire our employees and raise awareness about the significance of their work. The Medacta Family Open Day was held in Ticino with the support of local entities, demonstrating our strong relationship with the community.

As we look towards the future, we are filled with enthusiasm about what 2024 has in store for us. Our primary goal is to continue our growth journey in a responsible and sustainable way. Our focus remains on improving patient outcomes and satisfaction while promoting healthcare sustainability and creating value for our stakeholders.

Francesco Siccardi

Chief Executive Officer

OUR ESG IMPACT IN 2023

ENVIRONMENT

SOCIAL

ECONOMIC GOVERNANCE

100%*	Renewable electricity	1'730
0%*	Oil	193
-25%*	GHG emissions	500K
(SCOPE 1) since 2019

Employees

New employees

Donations (EUR) to Medacta for Life Foundation

510.8M

56

19.5%

Revenues (EUR)

Countries

Revenue growth in constant currency

*Related to Castel San Pietro and Rancate headquarters and facilities

A year in review	Governance	Caring for patients	Caring for people	Caring for the environment	Caring for the community

MEDACTA AT A GLANCE

MEDACTA'S UNIQUE HISTORY

Our company was established in 1999 by Alberto Siccardi, our founder, chairman, and former CEO. His journey as a patient convinced him of the importance of pioneering a new approach to joint replacement. Following his desire to improve care for patients and drawing on his own personal experience with orthopedic procedures, Alberto Siccardi dedicated himself to the pursuit of innovation to improve orthopedic techniques and prostheses.

COMPANY PROFILE

Medacta is an international company specializing in the design, production, and distribution of innovative orthopedic products, as well as in the development of accompanying surgical techniques, and is active in joint replacement, sports medicine, and spine surgery.

With an unwavering dedication to enhancing patient outcomes and satisfaction, for us, it is essential to embrace innovation, which is the foundation of all our projects. We drive our innovation by providing minimally invasive techniques and personalized solutions to the unique needs of each individual patient.

We believe that education is an indispensable tool for transforming innovation into tangible benefits for patients, surgeons, and healthcare systems. Through the M.O.R.E. (Medacta Orthopaedic Research and Education) Institute, we support our innovative products, services, and surgical techniques with an extensive and tailored program of medical education.

VISION

Our vision is to improve the care and well-being of orthopedic and spine surgery patients around the world through our experience and passion. With our surgical innovations and medical education programs, we strive to enable a healthy and active lifestyle for every patient, strongly focusing on healthcare sustainability.

MISSION

Our mission is to transform the patient experience by developing advanced surgical approaches and medical devices through sustainable and responsible innovation. With this goal in mind, we focus on increasing our collaboration with surgeons and universities worldwide, constantly investing in medical education, innovative technologies, and personalized solutions.

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