REGISTRATION DOCUMENT Interview with Yves L’Épine, Chief Executive Officer �������������������������������� 2
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2018 REGISTRATION DOCUMENT Interview with Yves L’Épine, Chief Executive Officer �������������������������������� 2 Guerbet: from its creation to the present �� 4 2018 key figures ������������������������������������������� 6 THE GUERBET GROUP 9 CSR PERFORMANCE 81 1.1 History of the company 9 5.1 CSR governance, organization, strategy, 1 1.2 Our business model 10 5 risks and opportunities 81 1.3 Main consolidated data 12 5.2 Quality products and services with 1.4 Overview of activities 13 societal value added 83 1.5 Industrial and logistics activity 20 5.3 Human Resources 85 1.6 Research and Development 21 5.4 Keeping people safe and healthy 91 1.7 The Group’s governance structure at 5.5 Minimizing environmental impacts December 31, 2018 26 throughout the product life cycle 94 5.6 Human rights and responsible purchasing 98 5.7 Business ethics 100 CORPORATE GOVERNANCE 29 5.8 External recognition of Guerbet’s CSR 2 2.1 Report of the Board of Directors on performance 102 corporate governance 29 5.9 Report of one of the Statutory Auditors, 2.2 Board of Directors 30 appointed as independent third party, on 2.3 General Management 43 the consolidated non-financial statement 2.4 Compensation of company officers 44 published in the Group management report 103 2.5 Exceptions to the Afep-Medef code 51 2.6 Agreements referred to in article L. 225- 37-4-2° of the French Commercial Code 52 FINANCIAL STATEMENTS AND 2.7 Delegations of authority regarding capital RELATED NOTES 107 increases 52 6 6.1 Consolidated financial statements and notes 108 Provisions in the articles of association 2.8 6.2 Statutory Auditors’ report on the relating to General Meetings of Shareholders 52 consolidated financial statements 144 Factors that could have an impact in the 2.9 6.3 Parent-company annual financial event of a takeover or exchange offer statements and notes 148 referred to in article L. 225-37-5 of the 6.4 Statutory Auditors’ report on the financial French Commercial Code 53 statements 168 6.5 Statutory Auditors’ special report on GUERBET AND ITS SHAREHOLDERS 55 regulated agreements and commitments 171 3 3.1 Guerbet shares 55 3.2 Dividend paid over three years 56 GENERAL MEETING 3.3 Share ownership structure 56 OF MAY 24, 2019 173 3.4 Shareholder Agreement and collective 7 share lock-in commitments 57 7.1 Agenda 173 3.5 Control mechanisms provided for in a 7.2 Draft resolutions 174 potential employee shareholding system, when control rights are not exercised by ADDITIONAL INFORMATION 179 the employees 58 3.6 Threshold crossings 58 8 8.1 Person responsible for the accuracy 3.7 Transactions performed by executive of the Registration Document 179 officers and similar individuals 58 8.2 Statutory Auditors 179 3.8 Transactions performed by employees 8.3 Share capital 180 excluding company officers 58 8.4 Public access to this document 180 3.9 Limiting the risk of undue control by the 8.5 General information about the company 181 majority Shareholder 60 8.6 Articles of association (excerpts) 181 3.10 The Board of Directors’ powers to issue 8.7 2019 financial calendar 182 and buy back shares 61 8.8 Concordance tables 183 3.11 Share buyback program 61 3.12 Summary of granted authorizations that may potentially impact the share capital 62 3.13 Provisions in the articles of association relating to the shares 63 4 MANAGEMENT REPORT 65 4.1 Analysis of the Group’s activity and results 65 4.2 Major events since the start of 2019 68 4.3 Information concerning internal control 69 4.4 Risk management and risk factors 70 4.5 Other legal information 76 2018 Registration Document Including the Annual Financial Report Unofficial anslation of the French language “Document de Référence” of Guerbet, for information purposes only. This Registration Document was filed with the Autorité des marchés financie s or AMF (French Financial Markets Authority) on April 18, 2019, in compliance with article 212-13 of its General Regulation. It can be used in connection with a financial transaction if it is accompanied by a securities note approved by the AMF. This Document was prepared by the issuer, and its signatories are liable for its content. In accordance with article 28 of European Regulation 809/2004 of April 29, 2004, readers are invited to refer to previous Registration Documents regarding certain information: 1. the Management Report of the Board of Directors, the consolidated financial statements and the report of the Statutory Auditors on the consolidated financial statements for the fiscal year ended December 31, 2017, included in the Registration Document filed with the AMF on April 25, 2018 under number D.18-0387; 2. the Management Report of the Board of Directors, the consolidated financial statements and the report of the Statutory Auditors on the consolidated financial statements for the fiscal year ended December 31, 2016, included in the Registration Document filed with the AMF on April 5, 2017 under number D.17-0323. A French limited company (société anonyme) governed by a Board of Directors with a share capital of €12,581,261 Registered Office: 15, rue des Vanesses 93420 Villepinte Bobigny Trade and Companies Register No. 308 491 521 Guerbet Registration Document 2018 1 Interview with Yves L’Épine, Chief Executive Officer « 2018 confirmed the importance of Interventional Imaging for the Group’s development, alongside Diagnostic Imaging « Yves L’Épine Chief Executive Offic ● What does the company’s performance in 2018 tell to Shareholders”. This plan identifies our opportunities for us? organic and external growth, particularly in Interventional The Group slightly outperformed the guidance (at constant Imaging, a segment where growth is stronger and margins exchange rates) on sales and EBITDA. In 2018, it had to face are higher. a negative environment on two fronts: very unfavorable In Diagnostic Imaging, we have identified several exchange rates and global competition related to the opportunities for organic growth and other external growth generics of its flagship MRI product, Dotarem®. However, in opportunities, especially in the digital sector. this segment, our sales grew in terms of volume and value. In Interventional Imaging, organic growth initiatives will be Guerbet operates in two market segments: Diagnostic based on the development of new indications for Lipiodol® and Imaging, a mature market with a growth of around 3% the launch of microcatheters produced by Accurate Medical in volume, but less in value terms due to strong price Therapeutics, which Guerbet acquired in 2018. We will also competition (our sales in this segment are stable at constant look for external growth opportunities in this segment. We exchange rates); and Interventional Imaging, which is a want to build a specific product portfolio through targeted narrower but also more dynamic segment, where Guerbet acquisitions. Our research and development expertise and grew by 18.4% at constant exchange rates. our commercial network are advantages to turn these acquisition opportunities into a reality. ● In April 2018, you announced a five-year strategic plan� What are its main points? We indeed presented our five-year strategic plan, GEAR 2023, which sets out the Group’s ambitions in these two market segments. It is built on four pillars: “Grow our existing products”; “Expand into adjacencies”; “Acquire new technologies”; and “Return 2 Guerbet Registration Document 2018 www�guerbet�com Interview with Yves L’Épine ● Can you give us details about the internal strengthened with the arrival of our Chief Digital Officer in development opportunities? September 2017. Above all, Guerbet signed an exclusive First of all, we are continuing the development of a new agreement with IBM Watson Health in July 2018 to co- contrast medium based on Guerbet’s internal research, develop and co-market an artificial intelligence solution to which will be used in MRI. This product (gadopiclenol) has perform earlier, more accurate liver tumor diagnostics. The a higher relaxivity than existing products. The phase 3 ultimate goal of this AI program is to achieve a precise tissue protocols were approved by the FDA at the end of November, characterization of liver lesions to avoid biopsies and guide and its clinical development will continue in 2019. The the treatment choice toward the most effective solution to registration application is expected to be submitted in 2021. improve the prognosis of each patient. We also want to seize all possible growth opportunities in This will be a valuable aid for the detection, characterization key geographic areas, for example by strengthening our and prediction of the therapeutic response of primary and presence in major markets where possible (US and China). secondary liver cancer as well as for the monitoring of In Japan this year, we switched from an indirect sales model each patient. Our partnership with IBM Watson Health was to a model where we sell directly through our subsidiary. ranked among the top 10 clinical and artificial intelligence innovations of 2018. We will also improve our digital offering through a modular software solution based on a Software as a Service (SaaS) Algorithmic and application developments will continue in model. The aim is to offer radiologists a complete range 2019. Our goal is to release an initial version of the software of products to optimize contrast medium injection: for in 2020. contrast, this range will combine injection equipment and At the same time, we are considering new solutions to « consumables as well as injector software and maintenance develop a portfolio of artificial intelligence products. services. ● In addition to these initiatives, has the integration of ● Did you start launching initiatives (internal or external) CMDS been completed? under the strategic plan in 2018? Keep in mind that the acquisition of CMDS was essential Absolutely.