Contents

AT A GLANCE (INSIDE COVER PAGE)

THE 2016 FINANCIAL YEAR:

ECONOMY, ENVIRONMENT, SOCIAL,

AND VALUE ADDED STATEMENT

GROUP STRUCTURE AND SHAREHOLDERS

1 BRIEF PROFILE

2 EDITORIAL: LETTER FROM THE CHAIRMAN

OF THE BOARD OF DIRECTORS

3 BOARD OF DIRECTORS OF WELEDA AG

4 EXECUTIVE BOARD OF WELEDA AG

5 REPORT FROM THE CEO

6 DIVERSITY AS A SOURCE OF INSPIRATION

22 ORGANISATION AND MANAGEMENT

23 MISSION, VISION, GOALS

24 SUSTAINABILITY

24 TARGET VISION

26 AWARDS

28 MILESTONES

31 ACHIEVEMENTS AND TARGETS

34 SOCIAL

35 SOCIOETHICAL RESPONSIBILITY

37 HUMAN DEVELOPMENT

39 EMPLOYEES

40 ENVIRONMENT

41 HEALTHY NATURE

42 HIGHEST STANDARDS

44 MINIMISING ENVIRONMENTAL IMPACT

50 ENVIRONMENTAL SUSTAINABILITY TABLE

52 ECONOMY

53 INTERVIEW ON INTERNATIONALISATION

54 WELEDA MARKETS

58 ADDED VALUE

60 MANAGEMENT REPORT

63 2016 FINANCIAL STATEMENTS

63 WELEDA GROUP Diversity as a source of inspiration 81 WELEDA AG

Annual and 96 CERTIFICATIONS 97 INVOLVEMENT IN ORGANISATIONS

98 GLOBAL REPORTING INITIATIVE Sustainability Report 2016 99 CORPORATE GOVERNANCE

100 ADDRESSES The Weleda Group and Weleda AG PUBLICATION DETAILS

Cover design: This collage was created by children from Weleda’s Waldorf nursery in Schwäbisch Gmünd (Germany) on the subject of diversity. At a glance Brief profile At a glance Economy Value added statement Weleda is the world’s leading manufacturer of certified natural and organic 2016 2016 2015 2015 Change in % 2016 2016 2015 2015 Change in % cosmetics and one of the best-known providers of anthroposophic in 1,000 EUR in 1,000 CHF 1 in 1,000 EUR in 1,000 CHF 1 2016/2015 in million EUR in % in million EUR in % 2016/2015 based on EUR values Origin pharma­-ceuticals. Weleda’s product portfolio comprises more than 1,000 pharma-  Weleda Group – key figures Revenue (sales, other income and interest income) 393.0 393.3 – 0.1 ceuticals and a wide range of extemporaneous (magistral) pharmaceutical Net sales 389,811 424,927 389,498 416,029 + 0.1 Input (cost of materials, changes in inventory, depreciation and amortisation and other inputs) – 227.4 – 222.4 + 2.2 preparations, as well as 120 natural and organic cosmetics. They are developed Net sales natural and organic cosmetics 280,757 306,049 275,040 293,774 + 2.1 Value added 165.6 170.9 – 3.1 based on a unique understanding of people and nature. For decades, nearly Net sales pharmaceuticals 109,054 118,878 114,458 122,254 – 4.7 Operating result (EBIT) 23,928 26,084 32,925 35,168 – 27.3 Distribution 1,000 substances from nature have formed the foundation of our products which EBIT in % of net sales 6.1 % 8.5 % To employees (employee income, as well as social contributions and Pension Fund) 139.0 83.9 141.6 82.9 – 1.8 contribute holistically to the health and wellbeing of people. Consolidated result for the year 11,528 12,566 10,709 11,438 + 7.6 To public authorities (taxes) 10.2 6.2 13.3 7.8 – 23.3 Cash flow from operating activities 19,448 21,200 30,260 32,321 – 35.7 To charitable organisations (donations), pursuant Net financial credit balance 2 22,442 24,058 13,978 15,200 + 60.6 to paragraph 2 (3) of the articles of incorporation 2.9 1.8 2.5 1.5 + 16.0 Weleda and its products are present in more than 50 countries on all continents. Investments in intangible assets To lenders (interest expense) 2.0 1.2 2.8 1.6 – 28.6 and property, plant and equipment 7,585 8,268 8,034 8,581 – 5.6 The Company employs over 2,4001 people worldwide to develop, produce and To shareholders (dividends) 0.9 1 0.5 0.7 0.4 + 28.6 Full-time equivalents (FTE) 2,037 2,021 + 0.8 To the company (retained earnings) 10.6 6.4 10.0 5.8 + 6.0 ­market its products. The Swiss stock corporation has its headquarters in Arlesheim Balance sheet total 248,599 266,497 256,385 278,793 – 3.0 Value added 165.6 100.0 170.9 100.0 – 3.1 (Switzerland) and has a branch office in Schwäbisch Gmünd (Germany). The Shareholders’ equity 108,810 116,644 97,416 105,930 + 11.7 All information based on prevailing rates. Notes to the value added statement: see page 58 Equity ratio 43.8 % 38.0 % ­Company also has 20 subsidiaries in 17 countries. A forward-looking approach, 1 Pursuant to the proposal made by the Board of Directors to the General Shareholders’ Meeting on June 9th 2017 social commitment and economic success are the pillars of Weleda’s strength. Weleda AG – key figures Result for the year 8,059 – 17,325 – 146.5 Since ­it was founded in 1921, Weleda has focused on social, environmental and Shareholders’ equity 88,016 80,717 + 9.0 economic responsibility. Dividend in % of nominal value 7.0 % 3 5.0 % Group structure and shareholders 1 At balance sheet date or average rates for the year 33.5 per cent of the capital and 76.5 per cent of the voting rights of Weleda AG are held by two principal 2 Cash and cash equivalents and securities less current and non-current interest-bearing liabilities shareholders: the General Anthroposophical Society (AAG, Dornach, Switzerland) and Klinik Arlesheim About this report 3 Pursuant to the proposal made by the Board of Directors to the General Shareholders’ Meeting on June 9th 2017 (KA, Arlesheim, Switzerland), formerly Ita Wegman Klinik AG. The remaining voting and non-voting shares The principle of conducting business for the good of people and nature is the core are publicly floated. Under the Company’s articles of incorporation the registered shares of Weleda AG may be transferred only with the written permission of the Board of Directors of Weleda AG. Acquirers must be of our identity. With that in mind, we published our first integrated Annual Environment members of the General Anthroposophical Society, Dornach. In order to be valid, the transfers have to be and Sustainability Report in 2012. In this report we introduce our new target vision 2016 in % 2015 in % Change in % registered in the Company’s share register. for sustainability and our newly designed sustainability flower. The structure Organic proportion of plant-based raw materials 82 80 + 2.0 Proportion of renewable energy (electricity) 90 90 0 of the report is based on this concept. To illustrate Weleda’s value chain, the current Capital structure of Weleda AG 1 Proportion of waste that is recycled 96 98 – 2.0 report has been expanded to include an overview of qualitative input and output Recycling proportion of product packaging 49 38 + 11 Number of shares Nominal capital in CHF Nominal registered voting shares CHF 1,000 3,478 3,478,000 (attached poster, page 58). Nominal registered voting shares CHF 112.50 6,880 774,000 Nominal registered voting shares CHF 125 3,984 498,000 Social Nominal registered non-voting shares CHF 500 19,000 9,500,000

2016 2015 Change in % Total nominal capital 14,250,000

Headcount at the balance sheet date, number of people 1 2,387 2,371 + 0.7 1 The share capital is fully paid. As at December 31st 2016, there is neither authorised nor contingent share capital. Every registered voting share entitles the bearer to a single vote in the General Shareholders’ Meeting. Number of nationalities 49 51 – 4.0 Number of female employees 1,659 1,654 + 0.3 Number of male employees 728 717 + 1.5

1 Including trainees, apprentices, marginally employed staff, volunteers

1 Number of persons including trainees, apprentices, marginally employed staff, volunteers

1 EDITORIAL: LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS BOARD OF DIRECTORS OF WELEDA AG

Dear Readers,

It is our pleasure to present to you the annual report for 2016, which is meanwhile the sixth integrated Annual and Sustainability Report of our Company. Our aim is to provide you with an overview of our Company’s activities for the year under review in the most transparent, clear and complete manner possible. Every year the drafting of this report is an occasion for the authors to jointly think back on what we have accomplished during the previous year.

“The Weleda Group is represented in many countries and markets around the world. This presence creates a cultural diversity that is experienced both as inspiring and powerful. Historically, Weleda emerged from individual entrepreneurial initiatives that grew together into a corporate group operating under a common management.”

That is what is stated in our principles and that is how our employees experience our Company every day. The fact that cultural diversity is an inspiring force can be felt if you let it inspire you. For many companies in the world diversity has meanwhile become self-evident, in some cases even an existential foundation and a key to success. Perhaps business enterprises are becoming something like social laboratories in which diversity is learned and appreciated.

In the first part of this report we introduce you to 16 Weleda employees from around the world, people who will tell you how they experience diversity in their daily lives in the Company, why they appreciate diversity and how they endeavour to realise it.

In the second part, we report on what we have accomplished and our targets in terms of sustainable business. Weleda is a pioneer of sustainability in the fields of social life, the environment and economics, and 2016 was a particularly bountiful year for Weleda in terms of the numerous awards and rankings it received recognising its status as a sustainable Company.

As usual, in the third part you will find the financial statements, which provide you with information about the performance of our business. We are satisfied with the result and are grateful for it, even though we did not grow significantly in 2016.

I wish you a stimulating reading and thank you for your interest.

Yours, Paul Mackay Chairman of the Board of Directors of Weleda AG

The Board of Directors of Weleda AG (from left to right): Dr. Harald Matthes, Elfi Seiler, Dr. Andreas Jäschke, Paul Mackay and Dr. Jürg Galliker.

2 3 EXECUTIVE BOARD OF WELEDA AG REPORT FROM THE CEO

Report from the CEO

Weleda’s healthy and sustainable development continued in 2016. Total sales and the net result were held steady on the previous year despite the discontinuation of the cancer drug Iscador. The net financial situation has continued to improve and forms a solid foundation for the growth initiatives we have launched.

The Weleda Group’s sales of EUR 389.8 million were unchanged on the previous year. While sales of natural and organic cosmetics rose by 2 per cent to EUR 280.8 million, sales of pharmaceuticals decreased by 5 per cent to EUR 109.0 million. The operating result amounts to EUR 23.9 million (previous year: EUR 32.9 million) and the net result is EUR 11.5 million (previous year: EUR 10.7 million). Net financial assets totalled EUR 22.4 million as at December 31st 2016 (previous year: EUR 14.0 million).

The key financial figures provide a snapshot of a moment in time. What is more important for Weleda’s long-term performance is the presence of the Weleda brand in the market and in public awareness. Major awards that Weleda has received in recent months have contributed to these factors. These accolades include the Swiss Ethics Award in Switzerland as well as the German Sustainability Prize and the CSR Prize of the Federal Government in Germany. One fact which is also especially noteworthy is that recently Weleda, a relatively small company, has regularly received high ratings in the various rankings of the most important brands in Germany.

I would like to express my sincere thanks to all the employees, friends, supporters and customers who have helped to consolidate and expand the extraordinary trust in the Weleda brand. I was particularly pleased about the recently published results of a market study on German consumers’ perceptions of the long-term viability of brands. Of the 200 brands investigated in this study, Weleda was ranked in 11th place – directly behind the giant Apple. These positive ratings and assessments by people in our environment should encourage us to rigorously pursue the path we have chosen.

The biggest challenge facing Weleda – and perhaps also its greatest opportunity – is the development of pharmaceuticals. Our goal is to realise a balance between profitability and therapeutic diversity. In a joint working group with representatives of anthroposophic doctors, we are well on our way towards achieving this balance. In addition, we have begun to make some medicines marketable internationally in order to better utilise market opportunities. Other important future initiatives include the build-up and expansion of research and development for both the pharmaceutical and the natural and organic cosmetics range as well as the development of international markets, with the focus on the USA and Brazil.

I look forward to our joint success!

Ralph Heinisch CEO Weleda AG

The Weleda Executive Board (from left to right): Andreas Sommer, Michael Brenner, Ralph Heinisch and Dr. Aldo Ammendola.

4 5 DIVERSITY AS A SOURCE OF INSPIRATION

Because diversity creates strength and vitality

Diversity for Weleda is more than just a management concept. It has lain at its heart for nearly hundred years. Diversity is the only way human beings and nature can live in harmony, and the way the Company can realise healthy growth.

Bright colours, fragrant flowers: a flowery meadow should probably inspire every diversity manager because it creates an ideal environment in which all members of the plant community can develop their full potential. Long grasses absorb the sun- light directly from above, while clover carries out photo­synthesis in the shady regions down below. This ecosystem is healthy because it uses every available niche. At the same time, its yield is higher than that of a monoculture,­ as a long- term European study has shown. It confirmed that diversity guarantees robustness.

The same is true in social life, too. For Weleda, every employee contributes with their individual abilities to the success of the whole. A department for diversity­ management has been in place since 2010 to rigorously promote these capabilities. In 2011 the Company signed the “Diversity Charter”, a voluntary commitment on the part of currently around 2,400 German companies to adhere to the prin­ciples of equality of opportunity and an appreciative work environment. The most important benefits from the standpoint of the companies – according to a status report from autumn of 2016 – are openness and the ability to learn, which have a positive impact on a company’s viability.

Weleda has taken this a step further by not distinguishing internally and exter­ nally: employees, suppliers, partners in cultivation projects, the companies themselves and developments in society combine to form a comprehensive whole. With the signing of the “We Together” integration initiative in 2016, Weleda took a political stance as well, in a time when a sense of community is becoming even more important amid signs of isolation and exclusion in many places. Specifically, the “Diversity Wins!” programme that was launched in 2015 offers new perspectives to people who have been refugees. Today around 2,400 people in 19 countries on five continents work for Weleda. We will introduce several of these individuals to you on the following pages. They represent diversity in our Company, where everyone contributes in their own way so that the lives of other people flourish – and that nature thrives, too.

7 DIVERSITY IS HIGHLY REGARDED DIVERSITY STANDS FOR TOLERANCE

“ONLY ABOUT 15 PER CENT OF THE ORIGINAL BIODIVERSITY IN HOLLAND REMAINS. TOGETHER WE CAN GROW IT AGAIN.“

Roelien de Jonge, Brand Manager at Weleda Benelux and coordinator of the partnership with Natuurmonumenten

Zoetermeer NL

Schwäbisch Gmünd DE Ahmad Abu Raia has completed his initial qualification and begins his training in the summer at Weleda in Schwäbisch Gmünd. “I AM NOT A REFUGEE AT WELEDA. HERE I AM A HUMAN BEING. IF THERE IS SOMETHING I DON’T KNOW HOW TO DO, THE OTHERS SHOW ME HOW IT’S DONE. I ENJOY COMING TO WORK AND TRY EVERY DAY TO BECOME A LITTLE BIT BETTER.“

Evening primrose and sage, chamomile and eye- of a Weleda product helps them to do it. “Our cus­ Just three words: Language. Training. University education. Wins!” programme, his initial qualification training is now bright: the fact that for the past two years more than tomers are especially interested in nature and are quite They are written on the note that Ahmad Abu Raia has tacked underway – providing time to become even better ­acquainted 216,000 square metres of additional flower meadows enthusiastic about the initiative,” says coordinator to the wall of his apartment. Every day he glances at it and with the language and the (work) culture. In the summer the have blossomed in the Netherlands is due in part to Roelien de Jonge. For its part, Natuurmonumenten,­ which is happy he has nearly accomplished the first step. The­ Syrian, former economics student will begin his training at Weleda to Weleda Benelux’s partnership with Natuurmonumenten, has more than 710,000 members, values Weleda as a who in 2014 fled from the war to Germany, meanwhile speaks become an industrial management assistant. Step two. Later Holland’s largest nature conservation organisation. It company that is fully committed to natural products and German well. The staff at the government Job Centre were the fan of figures would like to study computer science. Step buys arable and fallow land so that butterflies and bees a sustainable business model. This win-win situation impressed and placed him with Weleda. After completing an three. To simplify the computer programmes that his col- have a larger contiguous ­habitat – and every purchase benefits a third party as well, namely nature. internship on vocational orientation as part of the “Diversity leagues sometimes have to grapple with.

8 9 DIVERSITY SAFEGUARDS THE FUTURE

“A LADY FROM ROMANIA TOLD ME ONCE THAT HER SALARY IN THE ARNICA PROJECT HELPED HER MAKE IT THROUGH THE WINTER. I FOUND IT VERY TOUCHING TO LEARN HOW MEANINGFUL MY WORK IS.“

Christine Pfisterer, Strategic Plant Buyer at Weleda in Germany

Schwäbisch Gmünd DE

No stems, no half-faded heads, and place the picked flowers only in cotton bags, never in plastic bags: before the arnica harvest begins in the Western Carpathians the approx­imately 1,700 collectors are trained with an image brochure. Most people in this remote region cannot read or write. Weleda in 2017 therefore also supports a pro- ject to expand a small school in the region now that the arnica project itself is flour­ ishing – driven ­by a vision of sustainable growth that has motivated Christine Pfisterer since 2007. Today, ecoherbal and bioflora companies with their own drying facilities are set to harvest in 2017 around five tonnes of arnica in a certified wild collection on roughly 3,500 hectares of grassland – ten years ago the harvest amounted to just barely 200 kilograms.­ Two years ago Weleda began cultivating arnica itself, and this, too, will be expanded in 2017. Rural depopulation, in contrast, has slowed sharply.

10 DIVERSITY OPENS UP NEW PERSPECTIVES DIVERSITY PROTECTS NATURE

“IF YOU STAND TOGETHER IN A FIELD, IT DOES NOT MATTER WHAT YOU OTHERWISE DO IN LIFE. EVERYONE CAN CONTRIBUTE SOMETHING. THAT WAY WE ARE ALL EQUALS.“

Clara Neumann, Human Resources Manager for Personal Development and Diversity Management at Weleda in Germany and coordinator of the “Diversity Wins!” programme.

AU

Warriewood

David Johnston, Managing Director at Weleda Australia “THE TERM BIODIVERSITY IS Schwäbisch Gmünd VIRTUALLY UNKNOWN IN AUSTRALIA. DE THAT IS WHY OUR BEE PROJECT AIMS TO TEACH CHILDREN THAT EVERYTHING IN NATURE LIVES IN HARMONY.“

Since May, Clara Neumann has been digging regularly in the which Weleda would like to use to create prospects for for- Bright blue spots or with fur like a bumblebee’s: in Australia ­create “bed and break­fasts” for bees, for example in ground. 2016 was the first time she had a rake in her hands mer refugees. Among the 25 gardeners from seven nations alone there are 1,600 types of native bees. Although most school gardens, is supported by well-known public figures when she started the intercultural gardening group: people there grew not only savoy cabbage and carrots, but also do not produce honey, they, like other pollinators, are indis­ and ­experts. Weleda Australia has been an independent who have been refugees and Weleda employees who volun- the realisation that at first glance each of us appears differ- pensable. “Without these insects an estimated 75 per cent company only since 2012. “We gain customers with stories teered their time met once a week in a field next to the ent to the other, but that you can learn from one another of the cultivated crops that people rely on for food would like these,” says Johnston, who himself cultivates fruits medicinal plant garden in Wetzgau to sow,­ harvest, laugh as well. Everyone, for example, was inspired by a ­bed plant- disappear,” says David Johnston. As pesticides are destroy- and vegetables in a sustainable manner in a garden where, and celebrate together. The project will continue this year, ed by a young Afghan woman, who worked in agriculture ing the habitat of bees, he and his team in 2016 launched between guavas and courgettes, a bee B & B can naturally too, as part of our “Diversity Wins!” programme (page 37) in her home country. the “Bee B & B” campaign. This initiative, which aims to also be found.

12 13 CULTURAL DIVERSITY CREATES COMMERCIAL ROBUSTNESS DIVERSITY REQUIRES FAIRNESS

“MUTUAL TRUST IS THE BASIS OF OUR COLLABORATION WITH OUR PARTNER COMPANIES. THEIR LOYALTY IS IMPRESSIVE.“

Bas Schneiders (right), Head of International Strategic Sourcing at Weleda in Germany

Schwäbisch Gmünd DE

Arlesheim CH

Ulrike Weber, Regional Director for South America, Italy and Spain at Weleda in Switzerland “IT WAS AN AHA MOMENT FOR ME WHEN I REALISED THERE IS NO SUCH THING AS OBJECTIVE TRUTH: EVERY BRANCH IS SHAPED BY THE CULTURE OF ITS OWN COUNTRY. RESPECTING THAT MAKES US STRONGER.“

One for all and all for one: Weleda and its products are available in Spanish market. Since 2016 the Company has focused in particular Internationally, the need for commodities is growing, and climate families by guaranteeing purchases and offering fair prices. Social more than 52 countries throughout the world. This presence cre- on expanding its presence here in pharmacies in order to reach change and pollution are becoming more important, too. Weleda is also engagement plays a role as well. Weleda, for example, financed the ates a large network, which through healthy growth is also able to even more consumers with Weleda products. Ulrike Weber herself finding it increasingly difficult to procure the 650 plants it uses construction of a school in the tiger grass cultivation project in cushion economic crises that affect sales in any one individual worked for nine years in Madrid. But when situations arose in as raw materials for natural cosmetics and medicines – particularly in Madagascar. In order to continue obtaining high-quality jojoba oil in country. And creates synergies, too: positive experiences in one which the German passion for planning was not enough to solve organic or biodynamic quality. The Company is therefore focusing the future, a new contract was concluded at the start of 2017 with market can be transferred to another. For instance, Ulrike Weber a problem, she learned how to improvise from her Southern Euro- on developing long-term partnerships with certified companies, small Helmy Abouleish (left), the Managing Director of Sekem, an anthropo- in her capacity as Regional Director was responsible for adapting pean colleagues in order to find creative solutions. That made her farmers and collectors throughout the world. Bas Schneiders (right sophic enterprise based in Egypt. The bushes, which were newly the successful French Pomegranate campaign to the neighbouring more relaxed, especially in difficult situations. in the picture) and his team provide a livelihood for them and their planted in an oasis, will bear nuts for the first time in a few years.

14 15 DIVERSITY SHAPES DEVELOPMENT PATHS

“IF YOU THINK YOU CAN’T DO SOME- THING, YOU SHOULD GET HELP. THAT WAY YOU TRANSFORM YOUR WEAKNESSES INTO STRENGTHS. AS AN ‘EXPERT’ IN THE NEW JUNIOR Schwäbisch Gmünd COMPANY, I WOULD LIKE TO MOTIVATE DE PEOPLE TO DO JUST THAT.“

Bertan Basci, apprentice (Logistics) in his third year at Weleda Switzerland Arlesheim CH

“I WAS THE TEAM LEADER IN MY FIRST JUNIOR COMPANY. THAT MADE ME MUCH MORE COURAGEOUS ABOUT TAKING ON NEW PROJECTS AND FACING THE CHALLENGES ASSOCIATED WITH NEW TASKS.“

Angela Heinrich, apprentice (Industrial Management) in her second year at Weleda Germany

“THE COMPANY NEEDS PEOPLE ­ WHO CAN CONFIDENTLY AND INDE­PENDENTLY TAKE ON RESPON­ SIBILITIES. THAT’S WHAT YOU LEARN IN THE JUNIOR COMPANY.“

Ralph Heinisch, CEO Weleda AG

A special edition soap with sales in a pharmacy chain. A sustainable poetry slam in Schwäbisch Gmünd. And what about this year? In 2017 a junior company started working at Weleda for the third year in a row. Apprentices and students will have until the winter to develop their own idea about a health topic until it is ready for the market. To do that, they must establish their own organisation, define their own tasks and take responsibility for a budget – in Germany and Switzerland this is unique training content. The participants here, just like in a start-up, can not only develop their interdisciplinary professional expertise and social skills but also ­mature as individuals: nothing is unthinkable on the way to realising a common vision. Often someone’s own life objectives become more apparent in the process. Some decide to follow up with a university education. An apprentice from the first junior company discovered here her leadership qualities. Today she has a managerial posi- tion in our Company.

17 DIVERSITY CREATES SOLIDARITY DIVERSITY PROMOTES AWARENESS

“DIVERSITY AND AWARENESS ARE INTERDEPENDENT. ­TOGETHER THEY CAN MAKE THE WORLD A BETTER PLACE. FOR US IN OUR DAILY LIVES, FOR OUR CHILDREN AND FOR FUTURE GENERATIONS.“

Fred Dryburgh, Managing Director at Weleda New Zealand Havelock North

NZ

Ilkeston UK

Rosa DeBalsi, Director of Capability at Weleda UK “WHEN INTERACTING WITH COLLEAGUES THE GOAL IS TO ENCOURAGE RATHER THAN JUDGE. THAT REQUIRES EMPATHY AND AN UNDER­ STANDING OF OTHERS’ STRENGTHS AND WEAKNESSES – AS WELL AS AN HONEST ASSESSMENT OF YOUR OWN.”

So, what is anthroposophy? And how does it shape appreciation and fairness, with her colleagues during Love. In 2016, when employees of Weleda New Zealand were That has fostered awareness, he adds, not only among ourselves Weleda’s principles through to its natural cosmetics and the working day. The daughter of an Italian father and asked in a workshop about their values, nearly half mentioned but also for our common objectives. Personal responsibility, satis- medicines? Employees take part in internal training an English mother grew up learning to reconcile cul- this concept. Living your convictions: “Everyone is trained to do faction and flexibility have been bolstered, too. In fact, mutual courses to become familiar with the corporate philoso- tures, and since 2016 she has been responsible for do- the jobs of their colleagues, which makes it possible to help out dependence has proven to be a strength. That is also why Weleda phy that underpins the Company’s identity. Rosa ing so at Weleda UK as the Director of Capability. “It’s when someone needs assistance or is not there. That provides New Zealand does not need its own childcare facility – and yet is DeBalsi ­attended together with colleagues from Swit- not only what we do but how we do it,” says Rosa us with a lot of freedom,” says Managing Director Fred Dryburgh. still an attractive employer for qualified employees such as young zerland, Germany, Austria, the Czech Republic and DeBalsi. “If we recognise and appreciate our different His team in the vineyards of Havelock North on the North Island mothers, who otherwise often have to settle for inadequately Sweden. It inspired her to realise these ideals, such as abilities, we accomplish better results.“ has just 50 employees, and more than half of them work part-time. paid part-time employment.

18 19 DIVERSITY SHAPES OUR IDENTITY DIVERSITY MEANS FURTHER DEVELOPMENT

“HEALTH AND BEAUTY ARE ALWAYS A PART OF PEOPLE’S LIVES. OUR AMBITION IS TO MAKE A HOLISTIC CONTRIBUTION TO HELPING THEM ACHIEVE THAT. THAT IS WHY WE CONTINUOUSLY STRIVE TO DEVELOP FURTHER.”

Andreas Sommer, Chief Commercial Officer, Weleda AG

Arlesheim CH

Schwäbisch Marieke Determann, Tobias Pastyrik and Franka Jaros, Gmünd students and apprentices at Weleda Switzerland and Germany DE Arlesheim “DIFFERENT CULTURES ENRICH CH WELEDA BECAUSE WE LEARN FROM EACH OTHER, PARTICULARLY TOLERANCE AND A LIVE-AND-LET-LIVE MINDSET.“

Eight in-house medicinal plant nurseries worldwide with biody- cessful over the long term in America. “Taking a flexible approach Approaching people with openness is something that Tobias part of a cooperative study programme, belong to the 12 trainees namic cultivation. Medicines and natural cosmetics that work to addressing the needs of different cultures leads to the creation Pastyrik has learned in his dealings with customers at Weleda Aus- in ­the Company who are completing an internship semester at with the healing powers of the human being and nature. These of something new and thereby enriches everyone,” says Andreas tralia. Franka Jaros (right) has experienced a great deal of self- Weleda ­as part of their education – with the opportunity to partic­i­ are examples of the indispensable components that make up Sommer. Other locations will benefit from this, too, as was also affirmation with her own project at Weleda UK. And Marieke Deter- pate in cross-cultural learning in foreign branches. This includes the identity of the Weleda brand. However, as customers in the the case with the “Medicines Internationalisation” initiative that mann studied at Sekem, a partner enterprise in Egypt, which gave leaving their comfort zone from time to time in order to take a new USA are still not quite as familiar with it as in Germany, the was launched in 2016: a small assortment of anthroposophic her the opportunity­ to experience Weleda from the supplier’s perspec- step forward­ on the basis of the values that connect Weleda all coloured packaging of the product lines is being modified there. medicines is to be made available prescription-free in three to five tive. She will transfer in the summer to Weleda Russia for several over the world. And which connect them with the Company, too: In addition, digital communication is being expanded to be suc- years in the pharmacies of many “Weleda countries”. months. The three students of business administration, who are Tobias will be starting his first job with Weleda in the summer.

20 21 ORGANISATION AND MANAGEMENT MISSION, VISION, GOALS

Organisation and Management Declaration on our Mission, Vision and Goals

Intensified research and development as well as internationalisation Why does Weleda make a difference for the world? How do we want to are two important components of Weleda’s strategy. Three personnel changes realise our vision? When doing so, what is the specific goal or material requirement are connected with these components. that we are aiming for? Weleda’s Board of Directors and Executive Board have adopted the Declaration on our Mission, Vision and Goals as the guiding star for the Company’s work over the next few years.

Dr. Aldo Ammendola is our new Chief Research and Development Officer (CRDO) Dr. Ammendola studied biology in Düsseldorf and Freiburg before earning his PhD in molecular biology and microbiology from Munich Technical University. He also received an MBA from the Open University Business School (UK) as well as Regulatory Affairs Certification (RAC). After working as assistant professor for pharmacology and toxicology at Munich Technical University, Dr. Ammendola held management-level positions at various pharmaceutical and bio- technology companies. Most recently, he was head of research and development at a well-known manufacturer of phytotherapeutic medicines. Aldo Ammendola has been with Weleda since VISION October­ 1st 2016. The switch to Weleda is the next step in his development because the study of Creating a world in which the health and beauty of human nature has been a common thread throughout his research and professional career. He would like beings and nature continually unfold. to build on the Weleda tradition with products which are in keeping with our time, marketable, and profitable.

Maria Claudia Pontes is the new Managing Director MISSION of Weleda Brazil Inspired by anthroposophy, Weleda researches, Maria Claudia Pontes is Brazilian and has more than 20 years of develops, creates and sells pharmaceuticals and cosmetics. solid experience, mainly in the pharmaceutical industry, both in ­Brazil and in other regions of Latin America. In addition, she has Weleda products activate the healing forces of human extensive experience in business development and product launch- beings and nature. es. Before joining Weleda she worked as a marketing director for a major international pharmaceuticals company. Weleda sustainably develops its business We have found in Maria Claudia Pontes an employee who has the in harmony with nature and the human being. necessary energy and expertise to master the challenges of the Brazilian market. She is very familiar with anthroposophic medicine and identifies personally with the values embodied by our corpor­ ate principles.

Rob Keen is the new Managing Director GOALS of Weleda North America Weleda is the global market leader for anthroposophic Rob Keen is an American. By finding him we have at- pharmaceuticals and shares a responsibility for the system tracted to our Company an expert with a high degree ­ of anthroposophic medicine. of experience in the marketing of consumer goods, a significant track record of success and excellent refer- Weleda is a benchmark company and global market leader ences. We appreciate his winning personality and are for certified natural and organic cosmetics. convinced he fits in very well with Weleda. Before join- ing Weleda he was a senior global brand director at a Weleda develops markets in such a way as to achieve major multinational corporation. long-term market relevance. Rob Keen’s enthusiasm for a sustainable lifestyle and his strong personal identification with Weleda values led him to the decision to start a new chapter in his pro- fessional career and accept this responsibility.

22 23 SUSTAINABILITY SUSTAINABILITY TARGET VISION TARGET VISION

Target vision for sustainability Weleda sustainability flower: dimensions and areas of action Sustainable business has been part of Weleda’s identity from its foundation until today. In 2016 we adopted a target vision that anchors responsible and ethical behaviour in the Company even more rigorously than before. We have redesigned our sustainability flower by breaking it down into dimensions and areas of action.

Engagement for a healthy Socioethical The newly defined target vision for sustainability is derived The Executive Board, which is responsible for sustainability as nature responsibility in from the corporate vision and mission (page 23), which were a strategic initiative at Weleda, decided on the framework for the value chain likewise adopted in 2016, and has a direct connection to the the new concept. In order to rigorously focus the value chain on Highest standards brand. The target vision is linked to the founding impulse of our sustainability, managers are involved with content and imple- for Weleda re Company. Weleda per se produces sustainable products that mentation as well. atu products n or S contribute holistically to health, beauty and wellbeing, manu- For us sustainability is a developmental path that the entire f O d IBILITY & CI o NS MIN A factured from nature in harmony with nature and the people Company and every employee follows and which continuously o PO D L G S SE A E T F A place involved. evolves. With the new concept we would like to anchor respon- – R F T A for human sible and ethical behaviour in the Company in a deeper, broader I N Responsibility R E development for the value chain S Weleda target vision for sustainability and more effective manner. M based on – N G shared tasks O o R o Levels and dimensions of sustainability I d V

f We are integrating responsible, sustainable operating practices Minimise the N Partner- o

CREATING A WORLD IN WHICH E effects on the Internal ships r even more effectively than we did in the past at all levels of the

THE HEALTH AND BEAUTY OF anchoring and net- p environment e Company. Decision-making processes are just as affected as

HUMAN BEINGS AND NATURE of sus­- works o

p

our products and other services. tainability l CONTINUALLY UNFOLD. e We have added a new dimension to the previous dimensions Conducting business in harmony of Social Affairs, the Environment and the Economy. Respon­ with people and nature is at the heart sibility and Mindset, the fourth dimension, are crucial for the Authentic, trans­ Healing and of our Company. implementation of our concept. It is the basis for everything we parent, integrated lasting effect We take responsibility for that in communication of Weleda’s do and influences all of the other dimensions. It is about the everything we do. Innovative E products C willingness to take responsibility. Our goal is to anchor a re- thinking, O We create momentum in this regard N Mea ions sponsible mindset with regard to sustainability among the innovative solutions OM ningful act and set an example in society. and products Y – s Company’s stakeholders – not only among all employees but ou es nd b ctic MINDFUL – FAIR – COURAGEOUS just as much, for example, among grower partners and our cus- usiness pra tomers.

Economic Areas of action resilience We have used our target vision to define objectives for the indi- We have assigned areas of action to each dimension. These Fair distribution and viability vidual dimensions of sustainability and their strategic areas of ­areas of action are a particularly clear representation of our of value added action. These targets also include expectations expressed by roots and our identity as well as the expectations of our cus- dialogue groups which we obtained from around 60 interviews. tomers and employees. The main focus is that our actions have We additionally scrutinised our previous sustainability strategy a positive effect on people and nature. At the same time, the and its progress in the Company and took into account the re- negative effects of our actions are to be minimised. Operating sulting insights as well. in an environmentally friendly manner means, for example, that External factors and sociopolitical developments have a we address the issue of resource use and emissions in a re- much stronger influence on Weleda than before and therefore sponsible and increasingly transparent manner. We will forge Next steps same applies to existing projects and the development of new expand the perspective of what we want to attain. Examples of ahead wherever action is possible in cycles, as we are mean- During the reporting year we rendered visible our current projects in response to social issues, which we call lighthouses. this include the UN Sustainable Development Goals, the effects while doing successfully in our own medicinal plant gardens. ­sustainability achievements both internally and externally. Our Numerous awards have shown us that we are on the right of climate change and unstable political conditions. Today, sus- We are already generating positive incremental social value focus in 2017 will be on developing new targets and metrics. track and are pioneers (page 26). Much of what has been initi- tainability is a part of sociopolitical discourse and has become a today and we aim to continue actively expanding on what we Employees and dialogue partners will be involved in this ated in the past is now more important than ever in the social self-evident matter of course for companies in all sectors and have accomplished. This includes our long-standing partner- process.­ discourse, such as, for example, responsible supplier manage- of all sizes. ships with growers and the simultaneous systematic design of In addition, we want to use existing formats of interaction ment. From scrutinising what we have achieved so far, we know, all raw material supply chains according to environmental and and create new formats and communication platforms in order however, that we still have great potential to make a positive social criteria. to better anchor sustainability issues within the Company. The contribution to the development of society.

24 25 SUSTAINABILITY SUSTAINABILITY AWARDS AWARDS

Honoured for being sustainable! Sustainability is a mindset

We received prestigious awards in 2016 and early 2017 for our commitment to sustain- “A genuine brand provides orientation,” says Carsten Baumgarth, Professor ability. We consider these awards to be a significant recognition of our work. They for Marketing and Brand Management at the Berlin School of Economics motivate and encourage us to continue pursuing our path ambitiously: doing business in and Law. He developed the methodology used to assess brands for the German a spirit of partnership for a future that is worth living in a healthy environment. Sustainability Award, which Weleda won in 2016.

Swiss Ethics Award Sustainable Beauty Awards Is there then in fact any difference Weleda took part in the com­ The Swiss Ethics Award of the We were honoured three times at the Sustainable Beauty between a company and its brand? petition for the first time, and Swiss Excellence Forum honours Awards by Organic Monitor. We were awarded first place in the immediately won the award outstanding achievements in the “Sustainable Leadership” category. We received another first CARSTEN BAUMGARTH: There is if a company is present in as Germany’s most sustainable field of ethics by organisations and prize in the category “Green Formulation” for our Evening the public domain with several product brands. How- brand. How did the company companies who have gone the extra mile to assume responsi- ­Primrose care range. Our programme “Diversity Wins!” (page 37) ever, umbrella brands, like Weleda for example, are score so well? bility and who are committed to sustainable corporate manage- was recognised too, winning second place in the “Sustainable especially prevalent in the area of sustainability. ment. Weleda received the 2016 award for its project “Ethically Pioneer” category. The jury acknowledged Weleda’s long-­ The company and the brand are virtually identical. In CARSTEN BAUMGARTH: Weleda is nearly a text- sourcing natural raw materials”. From the jury’s citation: “Weleda standing sustainability achievements and its numerous ini­ these cases, the marketing department is no longer book example for a sustainability brand. is the first and so far only Swiss company to implement the tiatives, beginning with supply chain management and extend- solely responsible for the brand; everyone else in We and the jury were persuaded by the social and environmental criteria based on the standard set out ing through to social engagement. The Sustainable Beauty the company has a role, too, from the CEO to the long tradition of the sustainability idea. by the Union for Ethical BioTrade (UEBT). And the Company did Awards are awarded to companies that make a receptionist and the people who are the first point It has existed since the company’s so not merely for just one raw material but for all of the raw valuable contribution to the sustainable develop- of contact for customers, such as pharmacy staff. founding nearly 100 years ago and has materials that it uses – more than one thousand in total.” ment of the cosmetics industry. In 2013 we pre- Carsten Baumgarth, Professor for Marketing evolved into the Weleda brand. The com- and Brand Management at the Berlin School of viously received an award in the category “Sus- You and your team developed the pany has a strong set of values that are Economics and Law tainable Leadership”. methodology to assess brands for the also intensively conveyed internally to German Sustainability Award German Sustainability Award. What employees. The products are simply good, We were very happy to receive the German How important is a brand today were the important considerations in too, and the brand – although in a market Sustainability Award in November 2016. CSR Award of the German Federal Government compared with the past? your assessment? niche – is well known. Customers are con- Weleda won first prize in the category In early 2017 we received the special award for “Responsible vinced that Weleda keeps its promises. ­“Germany’s most sustainable brand”. The Supply Chain Management”, the first time this prize has ever CARSTEN BAUMGARTH: In an age of information overload CARSTEN BAUMGARTH: Today, a company’s brand is often jury explained its decision by calling Weleda been awarded. Here, too, the jury was convinced by Weleda’s and fake news it is increasingly difficult for many still equated with the logo and the name. For us it is After receiving such an award a consistently strong sustainability brand entire supply chain for natural raw materials being guided by people to distinguish between what’s true and a much more comprehensive concept. It includes the what can come next? that not only has perfect brand manage- the standard of the Union for Ethical BioTrade (UEBT). The what’s not. Customers need orientation, and that is brand identity: does it appear throughout the entire ment internally, but also an extremely UEBT standard ensures that environmental and social criteria what a genuine brand can provide. Furthermore, an value chain, do the products correspond to it, and are CARSTEN BAUMGARTH: Weleda could set itself strong brand image externally (interview on page 27). Europe’s are taken into account in the supply chain and is a key consid- American study has shown that on average 80 per they high-quality products? What is the communica- apart from competitors by focusing even foremost prize for sustainability is conferred by the German eration for us when we implement sustainability criteria in the cent of the total value of a company is based on tion like: is it transparent, with a focus on sustaina- more on its distinctive character; and it Sustainability Award Foundation in collaboration with the procurement of raw materials. The jury was impressed by the intangible­ sources – the expertise of its employees, bility? Can you experience it? Weleda, for example, could do so in a way that is not too com- ­German Federal Government. individual approach Weleda takes regarding country and situa- its customer relationships and, specifically, the com- invites customers to its medicinal plant garden near plicated and overloaded with facts but tion-specific problems in the supply chain, taking account of pany’s brand. Schwäbisch Gmünd. That is more effective than a more emotionally by making it possible the local infrastructure and living conditions. The CSR Award long sustainability report. And finally, we are inter- to touch and experience the philosophy. honours outstanding exam- Many companies base their decisions ested in performance, i.e. the effect on customers. With its own shops, for example. ples of social responsibility on customer needs. You think it makes that set an example for oth- more sense if companies are guided How is the award determined ers to follow. by their own brand and identity. Why? among the participating companies?

CARSTEN BAUMGARTH: If you focus on the market, you will CARSTEN BAUMGARTH: The companies initially provide a pursue customer requirements and will implement self-assessment; we review their statements, and them accordingly in your products. That can be a lu- external market research is performed for the most crative approach over the short term. On the other promising brands. We then propose to the jury for its hand, if you focus on your own brand, there is a phi- decision a selection of about seven to ten brands in losophy, an identity, which you are conveying from each category. About 350 companies competed for Michael Brenner, Weleda Chief Financial Officer: within the company externally to the market – in the the German Sustainability Award 2016, more than a “The German Sustainability Award is an incen-­ tive for us to do even more – both for the future form of products, but also in terms of a mindset. third of which were in the brand category. of the Earth and for future generations.” That leads to a genuinely stable brand.

26 27 SUSTAINABILITY SUSTAINABILITY MILESTONES MILESTONES

95 years in harmony with people and nature. And our values 1992 2001 2008 2012 2015 are just as relevant as ever. This > Safeguarding species protection for the > New building in Schwäbisch Gmünd: > Business and biodiversity: engagement > Integrated Annual and Sustainability > Joined the Executive Board of the strengthens us in our aim to con- targeted procurement of organic raw planning based on the latest environ- in the international initiative of the ­Report 2011 for Weleda AG and the Forum for Sustainable Palm Oil (FONAP) sciously observe our responsibility materials: intensive support of contrac- mental standards (electricity from German Federal Environment Ministry Weleda Group > Company grounds in Arlesheim hon- and thus make an important tual partners regarding the cultivation renewable energy, natural air condition- > Participation in the United Nation’s oured as a natural garden by Pro Natura, contribution to the future – because of organic raw materials (sea buckthorn ing, near-natural outdoor area) Ninth Conference of the Parties to the a Swiss environmental organisation sustainability is the future. berries, iris roots, birch leaves) and for Convention on Biological Diversity > Cooperation with Natuurmonumenten, ecological wild collection (biotope culti- > Carbon-neutral: Weleda Netherlands an environmental organisation based vation and recultivation of medicinal and Weleda Belgium in the Netherlands and cosmetic plants at wild sites, arnica since 1972, ratanhia, lung lichen) Milestones of environmental 2009 > International Weleda Environmental sustainability Declaration (Switzerland, Germany, France) 2002 > Eco-manager for small and medium-­ 2013 1922 sized businesses: award for Dr. Man- > Joined the Forum for Sustainable Palm >  Biodynamic medicinal plant gardens fred Kohlhase (former member of the 2010 Oil (FONAP) are a part of the corporate culture Executive Board) from the business > Sustainability strategy for the > Palm oil and palm kernel oil in Weleda 2016 magazine Capital and WWF Germany Corporate Group products: Weleda guidelines for tracing > German Sustainability Award: award in > Esmeralda project: Weleda Italy and the and certifying the supply chain; complete the category “Most Sustainable Brand” Milan-based Mangiagalli Clinic launch traceability now mandatory in the sup- > Swiss Ethics Award: award in the the project in northern Ecuador to lower ply chain for newly used raw materials category “Ethical Sourcing of Natural 1997 2006 child mortality (childbirth centre and > Renaturation of the Company grounds Raw Materials” > Certification based on EMAS and ­ > New construction of a pharmaceutical, comprehensive on-site training) and biodiversity path in Hüningen > Participation in the Business and Bio­ ISO 14001: production in Schwäbisch logistics and administrative wing at > 100 per cent wind energy: office (Weleda France) diversity Forum in Cancún, Mexico Gmünd, first environmental declara­- Weleda in Arlesheim based on environ- building of Weleda North America (UN Convention on Biological Diversity tion, holistic environmental management mental criteria (building insulation, at the COP13) system energy efficiency, water protection) > Bike to Work 2014 2011 > 83 per cent organic proportion for > Full member of the Union for Ethical plant-based raw materials: objective 1959 2000 BioTrade (UEBT) to reach at least 80 per cent by > Weleda medicinal plant garden > First sustainability report for 2007 2015 already achieved in 2014 Wetzgau / Schwäbisch Gmünd: largest Weleda Germany > NATRUE: Weleda and leading manufac- > Internal criteria for the use of palm in Europe, today with 23 hectares > Medicine and species protection: turers of natural and organic cosmetics oil and palm kernel oil in derivatives founding member of the working group found the interest group with clear (tensides and emulsifiers) launched by the WWF guidelines and an international scope > Demeter certification: medicinal plant for the use of the term “natural and garden in Brazil > Signing of the CBD Pledge 1988 ­organic cosmetics” (UN Convention on Biological Diversity) > Resource conservation in Schwäbisch Gmünd since the end of the 1980s: ­ for example, water savings and waste heat utilisation through distillation > Heating from wood chips: conver­- 2017 plants in a closed water cycle with cool- sion from heating oil to wood chips in > CSR Award from the German Federal ing by heat pumps, recycled paper for Arlesheim Government: award in the special advertising brochures and the Weleda > Environmental protection given > Certification as a natural terrain: ­category “Responsible Supply Chain Nachrichten newsletter, and a waste the highest priority at Weleda Belgium Natur & Wirtschaft (Nature & Economy) Management” management concept focusing on waste (solar installation, natural ga s/ hybrid ­Foundation honours the Arlesheim > Electricity from renewable sources for separation and recycling company cars, e-bikes for employees) Company grounds all buildings in Arlesheim

28 29 SUSTAINABILITY SUSTAINABILITY MILESTONES ACHIEVEMENTS AND TARGETS

Sustainability at Weleda: our achievements and targets Milestones 2007 2013 of social > “Weleda Identity and Basic Values” > Junior company: trainees independently The table shows our achievements in the reporting year and our targets for 2017. As an ­curriculum: nine-day provision for establish a company; launch of a Weleda additional dimension (page 24) has been added to the previous dimensions, we have sustainability ­employees soap with sales at the State Horticul- reclassified individual targets and measures. An overview of our sustainability achievements > Weleda childcare facility, now for tural Show 2014 in Schwäbisch Gmünd can be found in the inlay (page 58) and on pages 28 to 30. 42 children aged two and older > “Management in Focus” programme: further development of the Weleda 1927 management culture and professional Responsibility and Mindset dimension – Meaningful action > Company eurythmy for employees training for managers in Switzerland, > Werkstunden (lectures for employees) 2010 Germany and Austria Targets set 2016 Achievements 2016 Targets 2017 in Switzerland and Germany > Weleda childcare facility for 25 children – Institutionalise stakeholder * dialogues – Conducted numerous stakeholder * dialogues – Further involvement of stakeholders * in Huningue (France) – Make sustainability achievements visible – Multiple positive ratings in rankings and – Assessment by Green Brands; investigate externally prizes both nationally and internationally; other sustainability certifications 2014 seen as a trendsetter – Potentially submit additional applications 1998 > State Horticultural Show 2014 in Baden- – Make sustainability achievements visible – Strengthened internal communication – Analogue and digital spaces and pro- for employees on ­current issues; strengthened integration grammes for employees in order to sensitise > Weleda childcare facility for 16 children Württemberg: Weleda cooperates of sustainability issues in the Company and involve them, and to foster interaction in Schwäbisch Gmünd with the city of Schwäbisch Gmünd and – Enhance the integration of sustainability issues in existing cultural programmes designs a portion of the exhibition – Sociopolitical work to realise sustainable – Political work in the Forum for Sustainable – Continue the commitment > Employee representation for Weleda supply chains and protect biodiversity Palm Oil (FONAP); participated in the UN Switzerland Biodiversity Conference in Cancún (Mexico) 2001 and in further public discussions New target 2017 – Reconcile the specific objectives for the ­ > Weleda Academy for Personal Develop- – Reconcile the areas of action with the next several years with the UN Sustainable ment UN Sustainable Development Goals Development Goals 2015 New target 2017 – Revise and refine the sustainability – Revise the current sustainability reporting reporting in alignment with the specific > “Experience anthroposophy among us” ­objectives for the next several years 2011 programme: three-day module of the New target 2017 – Define new sustainability targets 2003 > Demography Excellence Award for the training curriculum for trainees in Swit- – New sustainability objectives > Work and Family Life audit: certification Weleda Generations Network concept zerland and Germany for Weleda Germany > Certification of Weleda Italy based on >  European staff celebration in SA 8000: international standard for Schwäbisch Gmünd ethical and socially responsible working conditions and human rights 2004 > Diversity Charter: Weleda Germany > Foundation of the Weleda Generations signs the charter committing itself to Network: former employees support tolerance, fairness and appreciation ­ current employees to achieve a work- in the workplace and the promotion of life balance diversity in the Company > “We Care” – accommodating work and > “Diversity Wins!” programme in Arles­ family care: programme for employees heim and Schwäbisch Gmünd with relatives requiring care > Junior company becomes a fixed 2005 > Parent-child room in Schwäbisch Gmünd ­component of the training curriculum > A tree for every child: employees and > Health management and health team: > Fifth recertification for the “Work and their families plant a birch tree for their health-promoting provision for employ- Family Life” audit for Weleda Germany newborn children in the Weleda Germany ees in Schwäbisch Gmünd medicinal plant garden 2016 2012 > Weleda identity workshop in Arlesheim > “Anthroposophy in Dialogue” programme and Schwäbisch Gmünd Target achieved Target partially achieved Target not achieved in Arlesheim > Sustainable Beauty Award: second place for the “Diversity Wins!” programme In the case of long-term targets spanning several years, target achievement is determined in the final year. in the “Sustainable Pioneer” category * stakeholder = dialogue partner

30 31 SUSTAINABILITY SUSTAINABILITY ACHIEVEMENTS AND TARGETS ACHIEVEMENTS AND TARGETS

Social Affairs dimension – Good for people Environment dimension – Good for nature

Targets set 2016 Achievements 2016 Targets 2017 Targets set 2016 Achievements 2016 Targets 2017 Supply chain management system based – Did not adopt the draft; built an assess- – Adopt a standard questionnaire and Consistent organic proportion of 80 per cent – Achieved target with an organic proportion – Continue with the target (increase the on the Union for Ethical BioTrade (UEBT): ment tool assessment tool of 81.2 per cent ­organic proportion to 85 per cent by 2018) – Adopt a draft design of a standard supplier – Audited two suppliers; two additional sup­ – Audit four suppliers assessment system by the UEBT to be appli- pliers could not be audited because of the Palm oil – Participated actively in the Forum for – Participate as a member in the Roundtable cable for all members political situation in their home countries – Continue to improve the availability Sustainable Palm Oil (FONAP): Executive Board, on Sustainable Palm Oil (RSPO) – Continue the supplier audits with action plan of certified palm oil chair of the Derivatives working group – Continue to participate actively in the FONAP – Evaluate alternative raw materials – Besides coconut oil, there is currently (Executive Board, Derivatives working group) – Annual support for two social projects – Built a well in Uganda; built a school in – Maintain current target; new social projects – Expand the palm oil strategy to include no ­alternative raw material; evaluation to be – Continue with the conversion to certified ­Madagascar; emergency medical assistance to be defined in addition to existing projects pharmaceuticals continued quality in order to achieve the 100 per cent in Mexico – Exchange or offset uncertified palm oil – Continued the ongoing expansion of the palm target, including all raw materials used in – Implement the processes for access and – Developed the process; established the – Adjust the existing processes to align derivatives oil strategy to include pharmaceuticals pharmaceuticals benefit-sharing (system for accessing ­necessary inquiry capability via the inventory with the European Union’s guidelines for – Certified all palm oil derivatives used or off- – Additional evaluation of alternative raw genetic resources and sharing the resulting control system the cosmetics sector set them through certificate purchases materials as a replacement for derivatives benefits fairly) – Participated actively in the development ­ – Implement the process – Continue with projects to protect – Supported the initiatives for the protection – Continue with the target of the European Union’s guidelines for the biodiversity of natural seeds and organic farming cosmetics sector – Introduce concept to define social criteria – Completed the questionnaire for indirect – Concept pilot phase with subsequent – Further develop environmentally friendly, – External study on bioplastics – Continue with the target for all Weleda suppliers ­procurement; implementation postponed until implementation ­recyclable packaging for natural and organic – Increased collaboration in the strategic 2017 due to internal resources cosmetics packaging platform and in development – Increased the proportion of recycled material – Continue to develop each year the provision – Offered new personal development seminars – Quality assurance and development; for glass bottles to 85 per cent for diversity and healthcare management on mindfulness, stress management; focus focus topic in 2017: relaxing breaks topic in 2016: appreciative communication – Implement a concept to define environmental – Completed the questionnaire for indirect – Pilot phase for the concept developed criteria for all Weleda suppliers ­procurement; implementation postponed with subsequent implementation – Annual provision of supportive employee – Continued all existing programme modules Reform of the maternity/paternity regulations until 2017 due to internal resources programmes – Launched an expectant-mother meeting place in Switzerland: in Switzerland – Assess the evaluation and, if needed, Define targets for resource use and – Target postponed to 2017 – Initiate a systematic process to define – Developed a concept for mother-child time adjust the overall concept intensities targets in Switzerland (paid time off for expectant – Provide ten days of paid time off for fathers – Energy use and emissions mothers six weeks prior to birth) after birth of child – Water and waste water – Provide unpaid paternity leave for up to five – Other resources and waste months Minimise and improve resource use – Further optimised the use of resources – Continue in 2017 with specific targets – Pilot project for the Weleda Talent Manage- – Performed the pilot project; outcome – Assess the evaluation and, if needed, adjust and intensity through the environmental management for 2018 ment programme to be evaluated in the first quarter of 2017 the overall concept – Energy intensity system – Concept to promote a culture of develop- – Water efficiency ment and self-responsibility as a contribution – Waste intensity to the Company as a whole New target 2017 – Concept for transportation packaging with the – Introduction throughout the Company in 2018 – Revise transport packaging goal of improving the environmental footprint – Assure and develop the quality of the training Ongoing, needs-based development – Continue assurance and development New target 2017 – Climate impact assessment of the main

strategy of training: of the quality of training – Increase transparency regarding CO2 locations in Switzerland and Germany – Included the junior company in the curriculum emissions – Own junior company product in 2016: poetry slam on sustainability – Strengthened the provision and use of the “Intercultural Learning” module – Launched the mandatory programme “Experience anthroposophy among us” Economy dimension – Sound business practices – Assure and develop the quality of the – Developped the programme as needed – Concept for an international leadership development­ programme for new managers ­programme, with a planned start at the end of 2017 Targets set 2016 Achievements 2016 Targets 2017 – Develop a concept for the programme – Started the programme for the voluntary – Quality assurance and development – Revise the pharmaceutical strategy 2016 – Started the international pharmaceuticals – Implement international pharmaceuticals “Diversity Wins! Weleda Creates Prospects for ­project “Gardening together”, fundraising, – Offer additional trainee and initial-qualifica- product range project product range People with Displacement Experience” ­internships and initial qualifications with tion positions – Initiated the Weleda IMKA working group – Define the strategy for the pharmaceuticals ­departmental sponsors and language teach- – New voluntary project “Intercultural Project (International Coordination of Anthroposophic product range for Switzerland and Germany ing; partnerships with social institutions Choir” Medicines) to prioritise pharmaceuticals – Concept for an accompanying intercultural – Developed a pharmaceuticals growth strategy programme for interaction and dialogue for Brazil – Strengthen the individual resilience – Continuation of existing provisions – Focus topic in 2017: relaxing breaks – Increase the equity ratio to over 40 per cent – Realised an equity ratio of 43 per cent – Achieve a further increase in equity of employees – Healthcare marketplace with resilience-­ to increase the resilience and independence promoting suggestions in Germany of the Company – Establish a human resources forum – Completed the concept for an associative ­ – First associative HR workshop in May 2017 New target 2017 – Investigate and develop a concept to improve (HR Forum) for ethically oriented companies HR workshop (think tank for sustainable per- – Review the sustainability of investments the investment guidelines of existing pension sonnel work across companies) in current pension funds funds regarding their sustainability New target 2017 – Draw up and introduce a standard for minerals – Concept for suppliers of pigments and metals as well as for their processing into pigments similar to the standard for raw materials supply chain management New target 2017 – Develop the concept in cooperation with – Expand the intercultural segment of the the Friedrich Schiller University in Jena Personal Development Academy – Provide intercultural training for working with refugees Target achieved Target partially achieved Target not achieved New target 2017 – Test objective: associative training in – Associative training cooperation with other companies In the case of long-term targets spanning several years, target achievement is determined in the final year.

32 33 SOCIAL SOCIOETHICAL RESPONSIBILITY

Socioethical responsibility along the entire value chain

We source natural raw materials and precious medicinal plants from all over the Social world for our Weleda natural and organic cosmetics and pharmaceuticals. In the procurement of raw materials, we ensure cooperations with our suppliers and partners are fair and protect biodiversity. We are continually developing our supply chain management.

In collaboration with international non-governmental organisa- Maria Julia Oliva is an expert on ethical sourcing of bio­ tions and initiatives, we are campaigning to improve the living diversity, particularly on the conditions of local farmers and plant collectors. Our focus is issue of access and bene- on establishing long-term projects, paying a fair wage and the fit-sharing. She works in ­Amsterdam at the Union for advancement of women. Ethical BioTrade as senior coordinator for policy and tech- nical support and advises Involvement in the Union for Ethical BioTrade UEBT members and partners Weleda has been a full member of the Union for Ethical Bio- worldwide. Trade (UEBT) since 2011. We undertake to apply the UEBT Standard in the procurement of raw materials. By joining the Union, our aim was to play our part in ensuring socially fair pro- curement practices and help shape the future of biodiversity (page 41). Since 2015, the President of the UEBT Board has been from Weleda. Sourcing with respect: recognising the value Exchange with government representatives of people and biodiversity The UEBT Beauty of Sourcing with Respect conference takes place in Paris each year. At the event, companies from a range of The UEBT is a non-profit, these communities – on the basis of a fair different industries as well as experts, government represent- membership-based association. and equitable sharing of the benefits. atives and international organisations discuss matters relating What responsibilities Benefit-sharing also provides incentives to ethical raw material procurement. In 2016, we talked with do its members have? for the sustainable use of biodiversity. government representatives from eight African countries about the implementation of laws on access and benefit sharing MARIA JULIA OLIVA: Ethical BioTrade refers to What goals do you have for your (ABS) and the associated impact on cosmetics manufacturers. the link between people and biodiversity. cooperation with Weleda? UEBT members, one of which is Weleda, Supply chain certification undertake and invest in innovative pro- MARIA JULIA OLIVA: Weleda has done excel- We go to great lengths for the certification of our supply jects at the local level. This ensures that lent work in evaluating its raw materials chains. The preliminary work on the implementation of UEBT the sourcing of raw materials protects portfolio. This evaluation assessed the Standards alone took several years to complete. In 2012, we plants, people and the environments in range of ecological, social and economic MORE THAN JUST FAIR PRICES: developed our own questionnaire on the basis of the UEBT cri- which they live. Ethical sourcing also aspects of Ethical BioTrade. For this work, teria in order to ascertain whether UEBT Standards are being brings prosperity for the communities Weleda has received several awards. implemented in supply chains. To simplify the assessment of involved. Jointly, we are currently fine-tuning tools COLLABORATIVE, supply chains, we are collaborating with the UEBT to develop for monitoring, evaluating and validating a standardised questionnaire and evaluation tool which will How do people benefit locally good practices. And – perhaps even more LONG-TERM PARTNERSHIPS become binding for all UEBT members in the future. from access and benefit-sharing importantly – we are working to accel­ (ABS)? erate the implementation of these prac- tices, including ABS aspects, in partner- For Weleda, as a socially committed employer and client, the supportive treatment of MARIA JULIA OLIVA: The ABS principles recog- ships with local communities. employees, suppliers and partners is a firmly rooted company principle. To this end, long-term Supply chain certification nise the rights of countries, indigenous cooperations and paying a fair wage are just as important as the work-life balance. It goes We verify that our peoples and local communities to their without saying that raw materials must be ethically sourced. Through a range of initiatives, we suppliers are complying genetic resources and the knowledge with UEBT Standards. are dedicated to improving the living conditions of local farmers and plant collectors. passed down over generations. ABS ­requires that all research and develop- ment associated with these resources is carried out only with the consent of

34 35 SOCIAL SOCIAL SOCIOETHICAL RESPONSIBILITY HUMAN DEVELOPMENT

Weleda as a place of human development based on shared tasks

Everyone is unique. We see the diversity of employees as an opportunity and resource for both the community and shared success. Our vision is to establish a tolerant and appreciative corporate culture in which diversity can act as an inspiring force.

Combining the beautiful with what is right guidelines, we aim to be in direct contact with our partner Diversity is a winner if we shape it considerately. For this, we Weleda Brazil is cooperating with Rede Asta, a social growers, establish lasting partnerships and also invest in social need tolerance, a spirit of respect for the destiny of the indi- enterprise that sells products from artisans based projects. vidual, patience and humour as well as the willingness to enter in low-income regions of Brazil to boost the local economy and fair trade. In 2016, three products were developed into dialogue. Through dialogue we can seriously engage with which Weleda gives to users and business partners as gifts: Botanical Garden in Honduras other people’s points of view and together develop solutions. sarongs, neck cushions and toiletry bags. In collaboration with the Lancetilla Botanical Garden, we grow A shared effort is required to find the best. Ultimately, our busi- plant cultures of Strychnos nux vomica (poison nut) and Cepha­ ness success depends on how we shape social interactions elis ipecacuanha (derived from the Tupi ipega’kwãi, meaning around the world. In our globally networked world intercultural Weleda’s international policy on palm oil, “road-side sick-making plant”) in Central America. Both species expertise is a strong success factor. palm kernel oil and their derivatives are used in the production of pharmaceuticals. We provide long- We are aware of the issues relating to palm oil plantations and term support to the Botanical Garden, financing 50 per cent of Programme for people the associated destruction of rainforests. For this reason, we the development of cultures and thereby enabling two mem- who have experienced displacement were one of the first companies to switch to certified palm oil bers of staff to be employed. “When the wind of change blows, some build walls and others that is produced through sustainable, controlled organic culti- windmills.” We use the wind! Back in 2015, we developed the vation, with fair working conditions and guaranteed traceability “Diversity Wins!” programme on the basis of this ancient Chinese (see page 42). proverb to create prospects for people who have been displaced. Many of our products are dependent on emulsifiers and ten- For us, our engagement is not just a question of humanity and sides from natural sources. These are in part extracted from reason. It is directly derived from our corporate identity. Weleda palm oil and palm kernel oil. However, the lack of transparency first and foremost stands for healing products. In addition, we Intercultural garden: since the start of May 2016, a diverse group from seven different countries has on the market for processed raw materials continues to cause engage in healing social impulses and take social responsibility been meeting on the Weleda site of the German us difficulties. Especially for derivatives, the supply chain often (diversity as a source of inspiration, pages 7 to 21). medicinal plant garden. does not differentiate between certified and conventional Employees are highly dedicated to shaping the intercultural starting materials. cooperation at Weleda in Switzerland and Germany. Internal Internally, we have established strict guidelines for the pro- dialogue forums at the start of 2016 generated many great ideas In Arlesheim and Schwäbisch Gmünd, colleagues established curement of processed raw materials with the aim of being able for interacting with refugees. We offer the necessary space for an initiative group of volunteers. These initiatives have led to track the movement of materials every step of the way. For intercultural encounters and support volunteer work. Presen­ to language tandems with refugees, a series of films on the us, it will by no means suffice that our suppliers are merely tations on the topic of “cultural diversity as a source of inspi­ topic of displacement, and clothing collections. In the report- members of the Roundtable on Sustainable Palm Oil (RSPO). As ration” contributed to intercultural understanding among ing year, Weleda also sent many product donations to aid a minimum, we demand certification of the raw materials being employees.­ organisations. used (page 42). In 2016, people from five countries came together in the Our commitment continues at international level to ensure ­medicinal plant garden in Germany to collaborate on the “Gar- our objectives become anchored in policy. We have been a mem- Investing in the future: 100 Madagascan children are dening together” project (page 12). In personal interaction, now attending lessons in the new school. ber of the Forum for Sustainable Palm Oil (FONAP) since 2013 Traditional Weleda advent bakery: women from ­diversity can be experienced as a source of inspiration: with different cultures came together in 2016. and directly represented on its Board since 2015. Through our dialogue on an equal footing between different cultures, membership, we have a stronger voice in the producing coun- demo­cratic decision-making about how uncultivated farmland tries, demand improvements in the RSPO sustainability criteria School established in Madagascar should be used, and in the planning of winter evenings with PC and work to enhance relationships with people and nature We use an extract from Centella asiatica (tiger grass) in our nat- training, professional studies, singing and games. across both the industry and the organisation as a whole. ural cosmetics. The plants are harvested in a controlled organic It is especially pleasing that we can also offer career pros- wild collection project in which we train and support the local pects to refugees. For example, we enable many internships in Social projects in raw material procurement smallholders. To improve the living conditions of children in this different departments. Two new colleagues started to work We are faced with ever greater challenges in the procurement area, we supported the construction of two classrooms and towards gaining their entry qualifications for training. In this of our raw materials. Specifically, these include the effects of tapped a new water source in 2015. Further measures are also way, Weleda is building on the dedication of staff as mentors. climate change, failed harvests, contaminants and securing planned for the school in 2017. These include sanitary facilities, Employment options are supported by a cultural programme to seed supplies (page 41) as well as critical political situations. To toys, children’s books and teaching materials. It is important to develop language skills and intercultural training. ensure that raw materials are sourced in accordance with Weleda us that we invest in schooling and the future of children.

36 37 SOCIAL SOCIAL HUMAN DEVELOPMENT EMPLOYEES

Employees of the Weleda Group

In the search for fair and courageous solutions, we exchange Employees of the Weleda Group at a glance st views and ideas with social institutions. Together with regional as at December 31 2016 Region Western Northern, North America 1 South America, Asia / Pacific 1 Total and nationwide players, we want to make a contribution to a D – A – CH 1 Europe 1 Central and Italy, Spain 1 diverse society that is ready for the future and are assuming a Eastern Europe 1 pioneering role. Number of male employees 463 141 9 9 91 15 728 Our commitment has already attracted considerable atten- Number of female employees 917 380 62 20 228 52 1,659 tion. Weleda received the German Sustainability Prize 2016 Total number of employees 1,380 521 71 29 319 67 2,387 because, among other things, we take responsibility for cur- rent tasks of society with regard to refugees, for example, and Total number of female managers, in per cent 52 % 60 % 65 % 79 % 51 % 50 % 55 % offer career opportunities to those who have been displaced (page 26). Employee wellbeing Nature of employment Since May 2016, Weleda has been offering massages Full-time employees 884 352 54 27 288 19 1,624 Intercultural training programme at the Huningue site in France. The idea behind this is to complement existing preventive measures and offer Part-time employees 496 169 18 2 31 48 764 We are charting our own course to inspire highly qualified, ded- employees a moment of relaxation. The massages last Of whom female part-time employees 438 151 8 2 28 39 666 icated and value-oriented young people with interesting career 15 minutes and can be taken during working hours. The fre- Of whom male part-time employees 58 18 11 0 3 9 99 prospects. At the Schwäbisch Gmünd and Arlesheim locations, quency of treatment is based on individual requirements. More than 200 colleagues benefited from this programme Total number of trainees 48 33 0 2 4 0 87 trainees in their first and second year of training have togeth- in the reporting year and it will continue in 2017. er established an intercultural junior company which includes Employment by age group 15 different apprenticeship professions and degree pro- Up to 30 years of age 255 56 18 2 82 2 grammes, from future warehouse logistics and dialogue mar- 31 to 50 years of age 752 317 43 2 194 2 keting specialists to chemical laboratory assistants and a busi- the chance to spend time at international Weleda locations 51 to 60 years of age 314 122 5 2 32 2 ness information systems student. (page 21). Cultural diversity also extends outside the Company. Over 60 years of age 59 26 4 2 11 2 To begin with, trainees each time start with a “blank page”. For 2017, an associative training programme is consequently They must define an appropriate corporate structure, develop planned in collaboration with other companies. Number of nationalities 3 34 13 7 1 12 11 49 own ideas for a product, prepare it for market launch and assume corporate responsibility (page 17). Resilience as a core competence Total number of newborns 43 2 3 0 11 1 60 We embark on this adventure together with the trainees, In this time of ever-greater complexity, there are no longer sim- 1 Explanation of regions: ­because we strive to inspire courage, the capacity to reflect, ple answers to many questions. Operating in areas of tension is D – A – CH: Germany, Austria, Switzerland independence, community spirit and responsibility. We are con- now a part of everyday life. How can we successfully be open Western Europe: France, UK, Benelux (Netherlands, Belgium) Northern, Central and Eastern Europe: Sweden, Russia, Czech Republic (incl. Slovakia) fident that these learning spaces open up great opportunities in these areas of tension and at the same time represent clear North America: USA South America, Italy, Spain: Argentina / Chile, Brazil, Italy, Spain with regard to future challenges. As a contribution to the Com- points of view? In this context, resilience is a core competence. Asia / Pacific: Australia, New Zealand (excluding Japan, as minority holding) pany’s fitness for the future, they advance skills and help train- This enables us to master the challenges in life and at the same 2 Employment by age group cannot be disclosed for legal reasons. ees cement their personal standpoint on the values of Weleda. time remain stable. 3 The following countries are represented: Angola, Argentina, Australia, Austria, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Burundi, Cameroon, Canada, Chile, Croatia, Cuba, Czech Republic, Denmark, Ecuador, Eritrea, France, Germany, Greece, India, Iran, Iraq, Italy, Ivory Coast, Liechtenstein, Morocco, Netherlands, New Zealand, Nigeria, Philippines, Poland, With the “Intercultural Learning” programme, we give trainees In the reporting year, the Weleda Academy’s programme on Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, Tunisia, Turkey, UK, Ukraine, USA. staff development has intensified the support of individual ­resilience. The topic of “personal responsibility in the team” will Prospects for people who have play a major role in 2017. This includes advancing reflection experienced skills, trust in personal intuition and the inner compass as well displacement We support the volunteer as shared responsibility for the whole. Under the motto “Weleda, work of employees and think globally – act locally”, we are also establishing a Weleda offer scope for intercul- “International Leadership” Programme in 2017. tural encounters.

38 39 ENVIRONMENT HEALTHY NATURE

Engagement for a healthy nature

Promoting and preserving biodiversity and ecosystem services has been important for Weleda since the Company was established in 1921. We rely on almost 1,000 natural raw materials Environment in the production of our pharmaceuticals and natural and organic cosmetics. Biodiversity is the foundation without which Weleda products would not exist.

Through biodynamic cultivation in our own medicinal plant gar- Organic seed breeding den, we are boosting the diversity of fauna and flora. Since We support organic seed breeding to safeguard the future of 2010, we have stepped up our efforts for the protection of bio­ organic cultivation. Seeds for sunflowers, for example, are diversity and to enhance fair trade directly in our supply chain. sourced from international seed corporations; some of these We implement the social and environmental criteria of the seeds are even patented. Nothing else is available on the mar- UEBT and undertake to promote biodiversity, recognise tradi- ket, even for organic farmers. With regard to bee-friendly tional knowledge and pay a fair wage to all partners within the ­varieties and to safeguard genetic resources, we launched the supply chain (page 35). Organic Seeds Sunflower Initiative together with Peter Kunz from Switzerland. Ten further organic companies have since Environmentally responsible raw material joined, with grower associations, processors and trading com- procurement panies as well as players along the entire value chain repre- In the year under review, 82 per cent of our raw plant materials sented. originated from controlled organic and biodynamic cultivation Complementary medicine and natural cosmetics require or from certified wild collection (page 42). In 2016, we pur- ­medicinal plants from biodynamic cultivation, including the seeds. chased almost 2,100 tonnes overall (1 per cent increase on As a member of the Hortus officinarum association, we support 2015). Weleda is therefore one of the world’s largest buyers of the seed multiplication of species that are hard to obtain. organic raw materials. Global biodiversity loss and ecosystem degradation Environmentally responsible land cultivation In December 2016, representatives from more than 196 coun- A handful of healthy soil contains more organisms than there tries came together in the Mexican city of Cancún to discuss are people on earth. The thin layer of topsoil is the product of measures to combat the loss of flora and fauna species. Before decomposition, transformation and building up processes over the 13th United Nations Biodiversity Conference, companies many centuries. Globally, the fertility of soil is declining dra­ worldwide were asked to lend their support to the “Business and matically. Through long-term cooperations with raw materials Biodiversity Pledge”. Weleda signed this declaration. It demands suppliers, we improve organic cultivation worldwide. In contrast the sustainable use of biodiversity and ecosystem services as to conventional farming, soil fertility is improved through the well as emphasising the urgency of species protection. use of green manure and fertilisation with compost and organ- ic materials. This changeover can also help increase biodiversity Biodiversity barometer and raise groundwater quality. (ethicalbiotrade.org/biodiversity-barometer) HEALTHY DIVERSITY FOR HEALTHY For the production of our strategic raw materials, more than Every year, the UEBT evaluates awareness of biodiversity and 22,200 hectares of land are managed organically and biody- ethical procurement practices. Since the first edition in 2009, namically, including the certified wild collection areas, in addi- 54,000 people in 16 countries have been interviewed. One PRODUCTS: THE ORGANIC SHARE OF PLANT- tion to our own cultivation. This equates to an area appro­ finding: eight out of ten consumers expect companies’ procure- ximately the size of Malta or of more than 31,000 football ment guidelines to respect biodiversity. We are also confident BASED RAW MATERIALS IS 82 PER CENT pitches. that raising awareness for the importance of biodiversity is the key to a better future. Natural raw materials are at the heart of our products. Through the cultivation of 22,200 hectares more than 22,000 hectares worldwide in accordance with organic cultivation guidelines, we Area for the organic cultivation nurture soil health and contribute to the preservation of biodiversity. Weleda products and certified wild collection of strategic cannot exist without biodiversity. We want to not only protect, but also promote biodiversity. raw materials For this reason we support the cultivation of wild plants and seed research, such as the organic cultivation of sunflower seeds, for example.

40 41 ENVIRONMENT ENVIRONMENT HIGHEST STANDARDS HIGHEST STANDARDS

Good manufacturing practice: Highest standards for Weleda products Weleda products are manufactured and tested to high quality standards. Quality and sustainability must both be considered if economies are to be mutually beneficial for people, society and nature. This approach starts with planting and harvest, accompanying the raw materials all the way to the finished product. Only with conscientious action along the entire value chain will the right end result be achieved.

Many plant species are grown to biodynamic quality in our Com- ­reporting year, we commissioned an analysis of bioplastics that pany’s own medicinal plant garden. However, the greater share 82 per cent of are already available on the market and those that have only of raw materials is sourced from partners around the world: plant-based raw just been developed. This analysis by the Fraunhofer Institute materials ­enterprises, cultivation projects, cooperatives and collectors. are sourced from for Process Engineering and Packaging in Freising near Munich All suppliers undergo elaborate inspection and qualification. controlled organic and was based on Weleda’s requirements for barrier properties, the biodynamic cultiva- tion as well as certified condition that no genetically modified materials be used and Quality standards wild collection. the aim of not competing with food. Unfortunately, this study Weleda is a pharmaceutical enterprise. The regulatory frame- revealed that there are no bioplastics currently available which work is very demanding and has defined all our quality systems, Packaging quality meet the present requirements of Weleda, with the exception including that for natural and organic cosmetics. member and on the Board of the Forum for Sustainable Palm Oil The quality of a Weleda product is intrinsically linked with the of some individual substances that are still in the development Natural and organic cosmetics are governed by their own set (FONAP) (page 36). Together with representatives from differ- choice of primary packaging. Our top requirement is product phase. Nonetheless, we will continue to monitor the topic of of good manufacturing practice (GMP) guidelines. The provisions ent industries, non-governmental organisations and certifica- protection. Weleda products consist of natural ingredients and sustainable bioplastics in the future. are laid down in the GMP for pharmaceuticals. Weleda natural tion bodies, FONAP is able to influence the situation in cultiva- only contain natural preservatives, which is why the formulas Plastic instead of aluminium was our decision in 2015. We cosmetics are subject to their own GMP guideline as well as tion countries. have to be well protected and packaging material must offer intend to replace all aluminium tube packaging in Weleda’s nat- binding requirements of the NATRUE label, such as ensuring A comparison: following a study commissioned by the FONAP, effective barrier properties. For this reason, packaging must ural and organic cosmetics and have sought possible suitable products are consistently free of synthetic colourants and fra- the share of certified derivatives from palm oil or palm kernel oil reliably protect the content from exposure to air and light. Not alternatives. So-called stability tests were conducted to inves- grances, silicones, paraffins, other petroleum products, micro­ in the segment of washing, care and cleansing products in Ger- every material is up to the job. The choice of packaging material tigate the durability of products in the new packaging. The plastics, nanoplastics and synthetic fats. many was 46 per cent in 2015, including certificate purchase. is therefore always an area of tension. tests have not yet been fully completed. In 2016, the share of certified derivatives for Weleda natural Environmentally friendly packaging is extremely important to Our aim is to further improve Weleda packaging. For this pur- Quality of effect cosmetics was 100 per cent inclusive of certificate purchase us and our customers and users. This is a complex topic because pose, we have established an internal strategic platform for Thousands of natural substances from nature form the founda- and 53 per cent without. many factors play a decisive role in the development of sus- packaging and will increase the focus on packaging in new tion of our products. It is not just individual ingredients, but the tainable packaging. Paper, cardboard and also glass might on products. overall composition and manufacturing processes which con- Social quality first consideration appear to be more environmentally friendly tribute to the effectiveness of a product. Natural fatty oils and A holistic consideration of quality also encompasses the social than plastic or aluminium. However, packaging has a very com- Packaging intensity essential oils are our most important raw materials and the fra- aspect, minimum social standards, fair prices and long-term plex value chain. There are advantages and disadvantages Packaging intensity has increased by 6 per cent since 2016. The grance composition should support the effect. Lead plants for contracts with suppliers. We carry responsibility for the regions within the life cycle of the respective materials. Owing to the indicator represents the weight of the manufactured product Weleda’s natural and organic cosmetics ranges, such as pome- in which we operate and for the people who make it possible for complexity, materials must be considered on a case-by-case against that of the packaging itself. The indicator is also im- granate, are selected on the basis of anthroposophic under- us to manufacture Weleda products. We have therefore been a­ basis. pacted by the composition of products. For products in glass standing. They are the right choice on account of their ingre­ member of the UEBT since 2011 which has established stand- We strive for continuous improvement and have in recent packaging in which there is little content, the high use of pack- dients and are appropriate for the phase of life for which the ards for compliance with human rights and labour law, food years been able to achieve some success in our balance for aging material means that the packaging average is greater respective care range is intended. ­security as well as additional social criteria (page 35). packaging through material savings and an increase in the recy- than the weight of the content. More of these products were Weleda quality is a comprehensive concept which is percep- cling share. manufactured in 2016 than in the previous year. Organic quality tible everywhere: among our employees, at our production sites Of the plant-based resources we use, 82 per cent are sourced and in our products. The implementation of different criteria in Sustainable packaging: implemented measures PACKAGING INTENSITY in grams from controlled organic and biodynamic cultivation as well as our everyday work is highly complex and demanding. However, Since the middle of 2016, we have sourced green glass bottles certified wild collection. We want to not only protect, but also our aims make it worth the effort. with a higher recycled share: 85 per cent instead of the previous 2016 376 promote biodiversity. In 2011, we developed biodiversity guide- 60 per cent. Through this switch, our recycled glass procure- lines which are binding for all Weleda companies worldwide. In ment is up 176 tonnes. 2015 355 addition, we support the cultivation of wild plants and seed In 2016, we calculated a packaging indicator for the first 2014 397 research (page 41). time, which reflects the share of recycled material in the primary Together with our suppliers, we conceive strategies for the packaging of our natural and organic cosmetics range. Through This performance indicator shows the weight of the packaging in grams per kilogram of product. use of raw materials that are based on palm oil. We only use the the increase in the recycled proportion of green glass men- highest quality of organically certified pure palm oil. For deriv- tioned above, the overall share of recycled material improved atives that are based on palm oil or palm kernel oil, we are work- from 37.3 per cent to 48.7 per cent. One question our users ask ing towards full traceability in the supply chain. Weleda is a is why no conversion to bioplastics has taken place. In the

42 43 ENVIRONMENT ENVIRONMENT MINIMISING ENVIRONMENTAL IMPACT MINIMISING ENVIRONMENTAL IMPACT

Minimising environmental impact Water is the foundation of all life

Our production of Weleda pharmaceuticals and natural and organic cosmetics Water is used as a main raw material not only in the manufacture of our affects nature, regardless of how we harvest raw materials or manufacture products, but also in the production of raw and packaging materials. products. We aim to keep the associated environmental impact as low as possible We are always looking for new ideas of ways to save water, which we then and generate additional positive effects. initially put to the test.

Company site ecosystem Mobility concept Highly efficient cleaning nozzles The protection of nature starts at home. We make a contribu- We are drawing up a mobility concept for the Arlesheim and In previous years, we tested using blast nozzles to clean the tion to biodiversity at our locations and design our sites so they Schwäbisch Gmünd sites. In the first stage, we analysed the storage tanks that are used in natural cosmetics manufactur- are close to nature, as can be seen in Argentina, the Nether- current situation and will now develop appropriate measures as ing. Cleaning was more powerful and therefore more efficient, lands and New Zealand, for example. In summer 2016, the Swiss a further part of the process. Our aim is to improve the modal so we implemented this measure at the end of 2016. The impact Foundation for Nature and the Economy has again renewed the split, meaning the distribution across different modes of trans- of this measure on water consumption will become evident at certification of our site in Arlesheim for its close-to-nature port, and promote environmentally friendly commuting. the end of 2017. ­design. One highly considerate act: after a falcon had been fre- We already make every effort to support cycling. For exam- At the same time, we are also trying to reduce the number of quently observed circling over the Swiss production facility, a ple, there are plenty of secure facilities where bikes can be left cleaning processes by optimising the order of the manufac­ nest box was put on the roof of the building for the bird of prey and we provide tools for repairs. In addition, company bikes are turing programme. Here, too, our aim is to save water, energy in autumn 2016. available for journeys between buildings that are further apart. and costs. Rainwater for watering: over the course of the year, more rainwater was collected in the medicinal herb garden in Schwäbisch Gmünd. In Germany, employees have the option of leasing a bike, e-bike Environmental education or pedelec through the Company. This offer is very popular, Less drinking water used Nature provides us with food crops and medicinal plants, recre- with more than 100 bicycles currently being leased. In the reporting year, Weleda’s potable water consumption that warm groundwater could not be used to generate hot ation and enjoyment. An important element for preserving bio- We recommend taking the train for any longer work-related ­decreased by 2 per cent, which corresponds to a reduction of ­water, with natural gas being used instead and consumption diversity is raising awareness that nature is an essential part of journeys. Employees who travel often are allocated a BahnCard 1,697 cubic metres of water or the annual drinking water consequently increasing. our life and our future. This is also set out as a goal of the United discount card by the Company. ­consumption of 23 Europeans. Nations Convention on Biological Diversity. With discovery Deterioration in water intensity walks on the biodiversity path in Arlesheim, which was specially In 2016, water intensity amounted to 10.8 litres of drinking Potable water set up for this purpose, and in the nearby nature reserve, a consumption water per kilogram of product content manufactured. There has Swiss team explored the ecological niches with its flora and reduced been a year-on-year increase in intensity of 0.3 litres. Although Annual rain water collec- fauna with colleagues in the past reporting year. the production volume declined, there was no corresponding tion was increased by 60 cubic metres for water- decrease in water consumption. This is attributable to the fol- Employee garden ing the medicinal plant lowing reasons: in order to reduce the capital tied up in ware- garden in Germany. On the Company’s site in Schwäbisch Gmünd, an employee The environment brings people and countries together: house goods and the disposal risk of surplus goods, production garden was established as a pilot project in 2016. All staff are insight into the working world of colleagues at other locations in Switzerland is increasingly based on market demand. To this through the photo exchange for Bike-to-Weleda. invited to experience and help create the great variety of the end, production has been made more flexible. This has had an bio­dynamically cultivated garden. Herbs and vegetables are In France and Switzerland, drinking water consumption also de- impact on the development of water and energy efficiency grown on the basis of four-field crop rotation. All harvest is for creased on the previous year. The reason for this decline is a (page 47). A decisive factor is that cleaning in relation to the own consumption. The employee garden will be expanding to lower production volume. Overall consumption could have been manufactured bulk volume (products before filling) is more fre- cover a larger area in 2017. lower, but on account of the hot weather in Europe, more drink- quent than in the previous year. On account of the weather, ing water had to be used in the facilities for the cooling sys- water consumption was negatively affected by the greater Cycling to work worldwide tems and watering. cooling requirements. However, total water consumption de- In summer 2016, Weleda employees once again took part in the creased by 43,249 cubic metres. Bike-to-Weleda initiative, with the following objectives: get to Rainwater for plant watering know one another, have fun, boost health and protect the en- In the German medicinal plant garden, we connected a further WATER INTENSITY vironment. In 2016, 215 employees in the Benelux countries, small roof area to our water cistern. Rainwater consumption in litres per kilogram of bulk goods the Czech Republic, France, Germany, New Zealand and Switzer­ overall was increased by 16 per cent in 2016. As a result, it was 2016 10.8 land cycled from home to their respective workplaces. Over possible to save on drinking water for watering the medicinal three months, they together clocked up over 68,000 kilometres plant garden. 2015 10.5 on their bikes, which is more than one and a half times round 2014 9.5 the earth. A great achievement. Those who took part cycled an Groundwater use in France average of 316 kilometres. Weleda France is the only company to use ground water. In This key figure shows the amount of water in litres consumed from 2016, the volume decreased by 45 per cent, with a defective the public water supply by the German, French and Swiss production locations per kilogram of product content manufactured. heat pump responsible for this significant decline. This meant

44 45 ENVIRONMENT ENVIRONMENT MINIMISING ENVIRONMENTAL IMPACT MINIMISING ENVIRONMENTAL IMPACT

Energy consumption and emissions

All Weleda companies are working to reduce greenhouse gas emissions and the consumption of fossil fuels. Often it is many small changes that have an impact in the long term. The measures should be both environmentally and economically prudent.

Savings potential and efficiency measures 25 per cent more efficient. Per year, the electricity consump- Direct energy consumption In France, Germany and Switzerland, conventional fluorescent tion of the new machine is 60,000 kilowatt-hours lower. The Ten per cent of our gas consumption in Germany and Switzer- tubes are being replaced with more economical LED bulbs. The impact will only become clear in 2017 as the change was made land is covered by environmentally friendly biogas. During the potential has not yet been fully exploited and bulbs will con­ towards the end of the year. year under review, we required more gas than in the previous tinue to be changed when they reach the end of their life. In In Switzerland, a new office building is being constructed in year and emitted more greenhouse gases into the atmosphere. Switzerland,­ this switch has saved around 6,500 kilowatt-hours accordance with extremely high environmental standards. The In order to offset a portion of this environmental impact of of electricity per year, which equates to the electricity con- move-in is scheduled for the end of 2017. In terms of energy emissions, we support sustainable projects. sumption of two three-person households. consumption, the intention is to achieve a very high level of As a further measure, we have replaced the standard light efficiency, with only renewable energy sources planned for Indirect energy consumption switches in Switzerland with motion sensors. In the ampoule energy supply. Indirect energy consumption via energy sources such as steam, production facility in France, new windows with improved insu- solar energy and wind energy increased by 3 per cent in 2016. lation have been installed. An employee at Weleda France has The facilities in France, Germany and Switzerland above all Save energy Cold winter: heating energy also been trained as an Energy Manager. The switch to LED ­required more electricity for cooling systems over the summer. ­requirements rose sharply in At present, existing manufacturing plants above all are has saved as much In Italy, the heating and cooling system was replaced by higher-­ Germany in 2016. ­replaced if old and if they have reachted performance limits. electricity as used by performance systems. As a result, electricity consumption was two three-person With regard to the air conditioning of manufacturing areas for households each year. higher here than in the previous year. sterile dosage forms, an old cooling unit in Germany was ­replaced by a new, more efficient system in 2016 which is ­ Energy intensity CO2 saving With this figure, we ascertain how high the energy requirement In 2017, carbon dioxide is per kilogram of product manufactured. In 2016, we manufac- emissions at Weleda Spain tured a lower overall volume of bulk goods (product before fill- were reduced by the same volume that 460 trees Energy-saving LED bulbs: in Arlesheim, 6,500 kilowatt- ing). Energy consumption per kilogram of bulk goods produced would absorb in one year. hours of electricity are saved each year. increased on the previous year. As was the case for develop- ment of water intensity, this is due to greater flexibility in pro- duction at the Arlesheim location (page 45). Greenhouse gas emissions In Germany, the increase in energy consumption was in part Greenhouse gas emissions increased by 7 per cent in the report- due to higher production volumes. However, the cold winter ing year. In the previous year, the corresponding figure had temperatures and hot summer above all played a decisive role. been a rise of 11 per cent. The share of renewable energy in the Heating energy requirements and electricity consumption for whole energy mix amounts to 48 per cent. air conditioning were up significantly. Direct greenhouse gas emissions were 14 per cent higher in 2016 than in 2015. This increase was due to higher natural gas ENERGY INTENSITY and heating oil consumption as well as greater emissions on in kilowatt-hours per kilogram of bulk goods account of refrigerant leakage. The situation is different for

2016 4.3 indirect greenhouse gas emissions which declined by 10 per cent. We have been able to use more electricity from renewable 2015 3.8 energies and reduced the share of coal-based electricity. The

2014 3.6 use of nuclear energy is steadily dropping. In 2016, the volume of electricity generated by nuclear power fell by 27 per cent This key figure shows the amount of energy consumed in kilo- while in the overall electricity mix it now amounts to 0.4 per watt-hours by the German, French and Swiss production locations per kilogram of product content manufactured. cent. Weleda Spain switched electricity provider and 100 per cent of all electricity is now from renewable sources. More than 60 tonnes of greenhouse gas emissions have been saved by this conversion, which corresponds to the annual carbon diox- ide absorption of around 460 trees.

46 47 ENVIRONMENT ENVIRONMENT MINIMISING ENVIRONMENTAL IMPACT MINIMISING ENVIRONMENTAL IMPACT

Rejects are not rejected: Waste, but better: reusable materials the Swiss association “Tischlein deck dich” (from the Grimm fairy tale The We seek alternative recycling possibilities for our waste materials. Wishing-Table, the Gold-Ass, Sometimes recycling is also associated with additional expense. and the Cudgel in the Sack) distributes natural and organic cosmetics donated by Weleda to people with low incomes. Managing Direc- tor Alex Stähli talks about the successful cooperation based on shared values. In pharmaceuticals manufacturing at the Arlesheim site, reus- Refined waste separation Recycling able materials that can no longer be used in production are sep- It has proven difficult to isolate waste generation from produc- The volume of reused waste has fallen on the previous year, arated out. Instead of simply being discarded, they are donated tion volumes because the relevant areas are closely connected: which is why the share declined by 2 per cent to 96 per cent. to the not-for-profit association Offcut in Basel. The associa- it is the transport packaging materials for the bottles, tubes, There has been no year-on-year change in the volume of waste tion saves residual materials from disposal and sells them in a folding boxes and package inserts of our products that are re- that cannot be recycled. It now accounts for a share of 4 per second-hand shop for artists to use in their creative works. In usable waste once they have fulfilled their purpose. We are cent of overall waste. 59 per cent (814 tonnes) of total waste 2015 and also 2016, we donated pharmacist bottles with lids therefore first concentrating on an improvement in the separa- was recycled. 37 per cent (500 tonnes) was used for thermal when they had served their purpose. tion of reusable and recyclable waste materials which previous- applications. There is now greater awareness across many Weleda compa- ly went to the incinerator. nies and they run their own projects to prevent waste and im- Waste intensity Feels like Christmas more than once a year prove separation and recycling. For example, Weleda Australia Waste quantities In 2016, waste intensity was 2 per cent higher than in the pre- decorated its Christmas tree with paper baubles made from the After steadily rising in recent years, total waste quantities ­ vious year. Although the total quantity of waste has declined, The association’s name What kind of donations do you colourful folding boxes used in natural and organic cosmetics. in the Weleda Group have now fallen by 5 tonnes, or 0.4 per there has been a concurrent fall in production volume. “Tisch­lein deck dich” is from receive from Weleda? cent. a Grimm fairy tale. What The volume in the category of normal waste has dropped by WASTE INTENSITY does it do in the real world? ALEX STÄHLI: Natural and organic cosmetics in kilograms per tonne of product manufactured Reusable materials instead of waste: Weleda pharmacist 2 per cent (22 tonnes). Cardboard transport packaging as pack- that don’t make it to retailers simply on bottles with lids can be bought in the Offcut materials market. ALEX STÄHLI: aging material and residual emulsion have decreased, which is 2016 118.1 Above all we save food that is account of technical deficiencies: leak above all due to the decline in the production volume in Switzer­ of perfectly fine quality from being de- tests can leave imprints on the packag- land. However, changes to how figures are calculated have had 2015 115.4 stroyed and distribute it among people in ing, products might be under-filled or

an impact. Compost is no longer counted as waste as it is rein- 2014 111.8 Liechtenstein and Switzerland who are shops send back incorrect orders. What corporated internally into the material cycle at Weleda. In the living below the poverty line. In this way, always impresses us is the care with Benelux countries, disposal of finished products was reduced This key figure shows the amount of waste that was generated we support almost 17,600 people in which such products are already collect- by the German, French and Swiss production locations per tonne of through longer durability. product content manufactured. need every week. Since being founded in ed in the everyday work process. You can Hazardous waste has risen by 29 per cent (17 tonnes), which 1999, we have been receiving ever more sense the strong commitment. is especially down to increases in France, Germany and Switzer- donations from industry each year. In land. Owing to a temporary solution in Switzerland, a greater 2017, we hope to top 4,000 tonnes for How do you ensure number of single-use barrels were used, which had to be dis- the first time. We check the entire value that donations reach the posed of as hazardous waste. However, the planned use of chain, from collection to distribution. right people? refillable containers will help to reduce these quantities in the Merry Christmas in Australia: tree decorations made from Weleda packaging. future. In Germany, it was necessary to dispose of construction How did the collaboration with ALEX STÄHLI: Specialist social facilities issue materials containing asbestos and chemicals. The increase in Weleda come about? cards to those who are entitled to shop France is attributable to a source of contamination in the water in our 120 collection points around the supply being eliminated. ALEX STÄHLI: In 2012, the company ap- country. They then pay a symbolic Swiss proached us and we are delighted they franc, which is very important to us as we chose to do so. Weleda is not only one of want these encounters to be on an equal Reusable materials our few donors from the non-food seg- footing. Our approximately 2,900 volun- 96 per cent of all ment, but is also exceptionally generous teers get to know the customer and their waste is recycled. with donations of more than 20,000 care families. In Basel, for example, house- products each year. We also share the holds with up to three people receive same fundamental values in terms of one shower gel, body lotion or shampoo, sustainability and social responsibility. while those with four or more receive We are united by our mission not to see two products. These are expensive luxury goods that have a value as waste, which items that people could not otherwise is unfortunately all too common in the afford. It almost feels like Christmas more consumer society of today. than once a year.

48 49 ENVIRONMENT ENVIRONMENT ENVIRONMENTAL SUSTAINABILITY TABLE ENVIRONMENTAL SUSTAINABILITY TABLE

Overview of the resources used to produce Weleda products

Direct energy consumption Purchased materials in megawatt-hours in tonnes

2016 2015 2014 2016 2015 2014 Non-renewable energy sources Raw materials 4,474 4,733 4,795 Natural gas 14,988 13,675 12,843 Semi-finished products and bulk goods from external suppliers 34 30 0 Heating oil 457 373 396 Trade goods 478 536 395 Fuels, oils 83 68 56 Packaging 6,057 5,139 5,315 15,528 14,116 13,295 Advertising material 811 758 834 Operating materials 131 143 130 Renewable energy sources Biogas 1,006 959 880

1,006 959 880 Emissions

in tonnes of CO2 equivalents Total 16,534 15,075 14,175 2016 2015 2014 Direct emissions Emissions from production of hot water, Indirect energy consumption heat and steam 3,493 3,144 2,805 in megawatt-hours Fugitive emissions 262 140 20 2016 2015 2014 3,755 3,284 2,825 Non-renewable energy sources

Electricity 1,420 1,384 558 Indirect emissions Heating and cooling 174 174 180 Electricity, etc. 1,415 1,564 1,544 Nuclear energy 62 85 121 1,415 1,564 1,544 Other forms of imported energy 9 11 11

1,665 1,654 870 Total 5,170 4,848 4,369

Renewable energy sources Solar energy 1,988 1,141 144 Waste quantities in tonnes Wind energy 687 547 406 2016 2015 2014 Geothermal energy 6 3 0 Normal waste Hydropower 10,535 11,303 13,285 Composting 41 32 39 Biomass-based secondary energy 1,383 1,131 594 Reuse 33 37 41 Hydrogen-based secondary energy 0 33 37 Recycling 722 751 738 14,599 14,158 14,466 Recovery 6 14 13 Incineration or use as fuel 442 432 398 Total 16,264 15,812 15,336 Landfill 27 26 14 Other disposal 26 27 7 Water consumption 1,297 1,319 1,250 in cubic metres

2016 2015 2014 Hazardous waste Water from public water supply 86,117 87,814 80,460 Recycling 1 4 3 Rainwater, collected directly and stored 5,178 4,458 4,357 Recovery 11 0 13 Groundwater 51,599 93,871 57,813 Incineration or use as fuel 58 49 43 Landfill 2 1 0 Total 142,894 186,143 1 142,630 Other disposal 3 4 3 1 Calculation error in previous year’s report 75 58 62

Total 1,372 1,377 1,312

50 51 ECONOMY INTERVIEW ON INTERNATIONALISATION

A great idea knows no bounds

Internationalisation has been important at Weleda from day one. The two principal founders Ita Wegman and Rudolf Steiner regarded themselves Economy as citizens of the world and established Internationale Laboratorien AG.

Internationalisation is a core element ­ What are your plans for driving the of Weleda’s strategy. Does internationali­ momentum of this process? sation have a long tradition at Weleda? ANDREAS SOMMER: There is a strong tradition of interna- ANDREAS SOMMER: Ita Wegman was born in Indonesia in tionalisation at Weleda. However, although it is 1876 when it was the Dutch East Indies colony. nearly one century old, the company will have to ­Rudolf Steiner’s birthplace Kraljevec is in Croatia to- reinvent itself somewhat if it really wants to pick up day but was still part of the Austrian Empire in 1861. the pace. Via different routes, the two eventually crossed The diversity within the company itself also gives paths in Dornach in Switzerland. They are consid- rise to challenges. It is important to get new people ered to be the true founders of Weleda, under the with innovative ideas on board, but we must at the name Internationale Laboratorien AG (ILAG) in 1921. same time familiarise them with the Weleda culture. Both were citizens of the world. With this outlook In this regard we have carried out extremely valua- on life, it was important to them that Weleda was ble work on a Weleda Vision (page 23) and the joint founded as an international company. development of cultural topics within the “Culture and Identity” curriculum (page 18). How has Weleda spread throughout Qualitative growth is initially needed to enable us We discussed internationalisation with CCO Andreas Sommer, who is responsible for the world? to supply markets appropriately and meet wide-­ the development of international markets. ranging requirements. Different cultural and legal ANDREAS SOMMER: The pharmaceuticals and – later – conditions demand a willingness to make changes body care products from Weleda, as they were to methods and processes in the main manufactur- ­Atlantic know they are working on some- known back then, were part of a universal idea. The ing locations in Germany and Switzerland. A good thing together. This will further the con- concept of anthroposophic medicine soon spread all example of this is the manufacturing process for vergence of the Weleda Group and make over the world. A good idea knows no bounds – and one of our most important products, Calendula a positive contribution to the mutual ap- so Weleda soon successively popped up in many Nappy Change Cream. So that this product can also preciation of the cultures. ­different places all over the world. France in 1924, become a success in the USA, we have had to ad- The demands placed on communica- the Netherlands in 1925, Austria in 1926 and the­ just the manu­facturing process, because the legal tion are also changing. USA in 1939. Today, Weleda has subsidiaries in 17 regulations governing nappy change cream differ As one example: the design of packag- countries worldwide. between Europe and the USA. We consequently ing is perceived differently in different CREATING VALUE relocated production of our Nappy Change Cream cultures, which is something we intend to How is the Weleda brand positioned from Schwäbisch Gmünd to Arles­heim, as the plants take greater notice of in future than we in the world today? are more suited to the conversion at this site. have until now. FROM RESPONSIBILITY: FOR LONG-TERM A second example: facial care has a ANDREAS SOMMER: We cannot yet speak of consistent Is this not a normal business different meaning in Asia than it does in STABILITY AND SOLID GROWTH internationalisation in 2017. Weleda is an estab- process? Europe. This requires us to be flexible in lished brand in France, Germany and Switzerland, our range management. but there is still great untapped potential in other ANDREAS SOMMER: Yes, but there is more to it than that. We must communicate openly and Ethical business practices and value creation are fundamental principles of markets. People around the world today have the Initially, this change means additional work for em- transparently about all these aspects Weleda and are therefore guiding elements of our corporate policy. In our business desire for an authentic and holistic approach to their ployees. However, if they recognise that they are within the Company. The overall change activities, we strive to strike a balance between our social, environmental and own bodies and lives. They are accustomed to find- doing it for the development of the market in the process must be structured by and calls business commitments. Conducting business with a view to holistic responsibility also ing the products they want everywhere in the world. USA and their colleagues over there, they will be for leadership from the Weleda Group’s means reinvesting generated profits back in the value added cycle, to sustainably There is also the need for natural and organic cos- motivated to implement these measures in the best management. If we do this right, I think grow birch trees in the Czech Republic, for example. metics and complementary medicine all over the possible way. They will personally learn more and there are some great opportunities. globe. We are currently seeing this in countries such experience the cultural diversity of the company as as Brazil and Russia. enriching. Employees both here and across the

52 53 ECONOMY ECONOMY WELEDA MARKETS WELEDA MARKETS

Investment in growth markets of the future

Significant market investments have been made in countries where sales growth Weleda Skin Food skin cream – a classic for is expected in the future. In particular, this includes natural and organic cosmetics in North 90 years: in 2016 we celebrated the 90 th anniversary of this skin cream with multiple America and the market for Weleda pharmaceuticals in Brazil. events and promotional campaigns.

Feeding skin for 90 years

Welcome: Weleda North America is New market strategy in North America building on a new market strategy (top picture). North America plays a key part in our internationalisation strat- Growth: pharmaceuticals production is expanding in Brazil (bottom picture). egy. In 2016, the management of the Company in North America was for the first time assumed by someone who had grown up in the USA when Rob Keen became Managing Director. With his support, we hope to improve our understanding of the American market. Strategy implementation will start in 2017 with a focus on Weleda’s natural and organic cosmetics. As a growth driver, we are focusing on digital marketing and online retail to enable 2016 sales strategy direct contact with customers. We will analyse and optimise our Weleda has exacting requirements when it comes to the quality digital activities on an ongoing basis with technical support. By of its products. That is reflected in our expenditures and prod- 90 years of Weleda in the Czech Republic: following this approach, we intend to be successful in the USA, uct prices. But what if these expenditures are not compensated, a subsidiary in the ascendant but other countries also stand to benefit from our experiences. resulting in compromises in quality and an inadequate margin? Our motto for 2016 was that we would rather forego higher Weleda Czech Republic is on a growth trajectory for the Brazil develops pharmaceuticals strategy sales if it became necessary to do so. second year running and has increased its sales by almost a third year-on-year. 2016 was accompanied by In Brazil, business is now being managed by the Brazilian Maria In Germany we therefore focused more on pharmacy and many amazing events. Claudia Pontes. We commenced with the implementation of our health-food retailers and in some instances reduced our distri- Of particular note was the charity run which was reported new market strategy in 2016. The development focus in Brazil bution in the mass market. This was also the case in our Bene- in the digital media under the hashtag #mujduvod, which is on pharmaceuticals. We are currently further expanding the lux companies. translates as “my reasons”. The Weleda Group sponsored the run to the tune of 1,000 Czech crowns for every kilometre local pharmaceuticals production for registered finished medic- run and submitted online. Participation was open to all. Using inal products with indications. With growth of more than 50 per Product range the hashtag, everyone could share their personal reasons cent in pharmacy sales, Weleda Brazil is greatly outperforming There were no significant innovations in the natural and organic for engaging in sport and what they do to keep fit on social networks such as Facebook, Twitter and Instagram. The the market. We are supporting this trend by running more cosmetics range in 2016. Nonetheless, we managed to achieve campaign was advertised with a marketing campaign about ­doctor-led training sessions and visits. slight growth. In early 2017 we launched the new Weleda lip our arnica products. balms which come in three shades and both care for lips and Another highlight was the celebration of the Company’s Europe give them a subtle hint of colour. We also launched the new 90th anniversary in Prague in October 2016. Some 100 guests, including journalists, distribution partners and We are growing rapidly in Russia. The strategy to grow on the 24-hour roll-on deodorants in three variants: Men, Citrus and friends, took part in our celebrations. We acknowledged basis of the two pillars of brand development and distribution Pomegranate. our collaboration with the Taraba family, our long-term expansion is delivering results. The pleasing development of In our pharmaceuticals range, the elimination of Iscador from Czech suppliers of birch leaves in Southern Bohemia, giving them a grant – collected by the Weleda charity run – perfume stores and the online channel has made a significant the range in Germany and Switzerland led to a loss of sales in for the continued sustainable cultivation of birch trees. contribution to growth. Central and Western Europe was stable, the reporting year. with France once again being our top growth market in 2016.

Asia, Australia and New Zealand Double-digit growth was achieved in the Asian export markets of Japan and South Korea. Australia recorded growth of a similar magnitude, while it was more moderate in the single-digits in New Zealand.

South America 100% Chile and Argentina developed positively with high double-digit me. growth rates. NEW Tinted Lip Care SUBTLE COLOUR New products in 2017: & CARE Weleda lip balms and #mytruenature 24-hour roll-on deodorants.

54 55 ECONOMY ECONOMY WELEDA MARKETS WELEDA MARKETS

Development in the markets Third-party sales of regional companies

Weleda was able to stabilise its sales in 2016. Investments were made in the internationalisation of the Company’s markets and the intensification of research and development. Increasing regulatory requirements in the pharmaceutical division gave rise to additional expenditure.

Third-party sales of regional companies: Netherlands Third-party sales Structure of third-party Employees the percentages relate to the change in third- + 0.3 % Germany per company sales per company (FTE) party sales of the respective Weleda com­ United Kingdom – 2.4 % Currency 2016 Change from Pharma­ Natural 2016 2015 pany compared with the previous year (in local in 1,000 previous ceuticals and organic currency, page 57). + 9.5 % Sweden year in local cosmetics – 9.7 % currency Switzerland CHF 37,048 – 3.8 % 38 % 62 % 313 311 Weleda AG, Arlesheim, Switzerland EUR 33,986 Germany EUR 169,291 – 2.4 % 21 % 79 % 769 754 Weleda AG, Schwäbisch Gmünd France EUR 86,110 + 8.7 % 44 % 56 % 371 366 Weleda S. A., Huningue France + 8.7 % Netherlands EUR 16,621 + 0.3 % 15 % 85 % 68 66 Spain Weleda Benelux SE, Zoetermeer + 9.1 % United Kingdom GBP 7,148 + 9.5 % 23 % 77 % 59 67 Weleda UK Ltd, Ilkeston EUR 8,753 Italy EUR 11,042 – 7.4 % 38 % 62 % 40 41 Switzerland Weleda Italia S. r. l., Milan – 3.8 % Austria EUR 11,170 – 4.0 % 16 % 84 % 21 19 Czech Republic Weleda Ges. m. b. H. & Co KG, Vienna USA + 32.1 % – 10.2 % Sweden SEK 60,351 – 9.7 % 11 % 89 % 22 24 Austria Russia Weleda AB, Stockholm EUR 6,379 – 4.0 % + 59.5 % Italy Spain EUR 7,622 + 9.1 % 5 % 95 % 46 42 – 7.4 % Weleda S. A. U., Madrid Czech Republic CZK 70,164 + 32.1 % 1 % 99 % 13 12 Chile Weleda spol. s.r. o., Prague EUR 2,595 + 17.7 % Russia RUB 314,814 + 59.5 % 1 % 99 % 28 30 Argentina Weleda East GmbH, Moscow EUR 4,266 Total + 33.4 % USA (North America) USD 14,218 – 10.2 % 7 % 93 % 27 25 Australia Weleda Inc., Irvington, NY EUR 12,848 + 27.7 % % Argentina ARS 41,890 + 33.4 % 50 % 50 % 44 44 Brazil Regional companies New Zealand Weleda S. A. Argentina, Buenos Aires EUR 2,569 Agencies + 10.8 % + 4.0 % +0.1 Brazil BRL 33,421 + 10.8 % 71 % 29 % 134 137 Weleda do Brasil Ltda., São Paulo EUR 8,708 Chile CLP 2,259,770 + 17.7 % 40 % 60 % 39 42 Weleda Chile SpA, Santiago de Chile EUR 2,983 Weleda is present in the following countries: New Zealand NZD 3,994 + 4.0 % 61 % 39 % 29 29 Weleda (NZ) Ltd, Havelock North EUR 2,517 America Europe Africa Asia Australia Australia AUD 3,498 + 27.7 % 15 % 85 % 14 12 Argentina, Brazil, Austria, Belgium, Bosnia and Egypt, Morocco China, Hong Kong, Australia, Weleda Australia PTY Ltd, Canada, Chile, Mexico, Herzegovina, Bulgaria, Croatia, India, Israel, Japan, Malaysia, New Zealand Warriewood EUR 2,351 Peru, USA Cyprus, Czech Republic, South Korea, Taiwan, ­Denmark, Estonia, Finland, United Arab Emirates France, Georgia, Germany, Total EUR 389,811 + 0.1 % 28 % 72 % 2,037 2,021 Greece, ­Hungary, Iceland, ­Ireland, Italy, Latvia, Lithuania, Luxembourg, Macedonia, ­Netherlands, ­Norway, Poland, Portugal, ­Romania, Russia, ­Serbia, ­Slovakia, Slovenia, Spain, ­Sweden, Switzerland, United Kingdom, Ukraine

56 57 ECONOMY ECONOMY ADDED VALUE ADDED VALUE

Value added statement 2016 Adding value is a spiritual achievement

We will secure our Company’s viability by means of prudent, Michael Brenner, Chief Financial Officer of Weleda, explains why Weleda ethical business practices. does not consider the concept of added value from a purely economic perspective. He says: “It is my own responsibility to decide what quality I assign to a value and how I responsibly distribute the added value created.“

By conducting our business in a responsible way, we improve A total of EUR 2.9 million was spent on donations and similar In its annual report, Weleda also Accordingly, value creation means: Weleda’s ability to manage risk – from behaviour in the market, contributions in 2016, with EUR 1.6 million of this amount going publishes a value added statement. what I do must be meaningful? through environmentally relevant aspects, to relationships with to the School of Spiritual Science in Dornach, and EUR 0.5 million Why do you do that? employees and exchanges with all other key interest groups to the fund for medical and nursing training at Klinik Arles­­ MICHAEL BRENNER: That’s the case by default, because and stakeholders. This generates sustainable added value heim AG in Arlesheim, Switzerland. MICHAEL BRENNER: The financial statements with the otherwise the outcome would be meaningless. The which can be distributed to employees (income), capital providers The added value was sufficient to cover the income of our balance sheet and income statement show the as- right question to ask is what purpose do I want the (dividends, interests) and charitable organisations (donations), employees. Our employees are co-entrepreneurs who are in- sets we possess and who finances them, what we added value to have? To answer that, we need to and the public (taxes). volved in the performance process. Supporting and promoting a have earned and what we have spent. However, look at three things. First, what use should our prod- The value added statement (inside cover page) illustrates sense of personal responsibility and the way that each individ- these details say nothing about what added value ucts have for consumers? If they don’t have a use, how the economic activities of our Company generate value for ual conceives of themselves is important to the Company. we have generated and what we are doing with it. they won’t be bought and hence there is no added society: unlike the income statement, which is based on the view- The public authorities received EUR 10.2 million of the created This requires a totally different approach. An easy, value. Second, what products do we want to obtain point of the owners, the value added statement sets out the added value in the form of taxes. A further EUR 2.0 million was if admittedly very simplified way ­is to show this from our suppliers? And third, What do we intend to contribution made by the Weleda Group to private and public attributable to interest to lenders. aspect in the form of a value added statement. We do with the added value we have created? The income. The value added statement shows the expenditure Pursuant to the proposal of the Board of Directors, a dividend receive remuneration for our products and services question of added value is therefore not only one of with which Weleda achieved its Company performance and how of 7 per cent will be distributed to shareholders for 2016. and receive upfront services from our suppliers. The meaning, but rather one of responsibility. A value is Michael Brenner, CFO of the Weleda Group the added value generated was distributed. difference is the added value created. The next step neutral to begin with – it is neither good nor bad. It In the 2016 financial year, business performance declined is then to indicate to whom we distribute this added is my responsibility to decide what quality I assign due to a slight fall in received revenues of EUR 0.3 million to value. But that’s only a mechanical representation to this value and how I responsibly divide the added EUR 393.0 million. After deduction of inputs, the added value of the value added statement. value created. of Weleda Group amounted to EUR 165.6 million. Added value per Weleda Group employee amounted to EUR 81,670 and was So what is added value? So is the added value reported in this biodynamic cultivation areas and thereby thus 6.1 per cent down on 2015. report something particular and does increase biodiversity or if we support The Klinik Arlesheim’s Haus Lukas: MICHAEL BRENNER: We obtain raw materials from nature Weleda act differently in this regard to spiritual life in the form of donations. Weleda supports the fund for medical and and goods and services from our suppliers. These other companies? nursing training. are then further processed into products by Weleda’s And all of these aspects employees using our production facilities. This devel- MICHAEL BRENNER: Publishing a value added statement is are represented in the value opment and processing is in line with an idea. Once unfortunately still by no means a given, but neither added statement? this idea has been realised, the end product has a is it that unusual. What I think makes Weleda special higher value than the original raw materials. Human in this regard is our understanding of value creation MICHAEL BRENNER: Unfortunately not. The creativity has resulted in added value. And this real- and what we do with the value created. overview provided in the annual report is isation originates in an idea or an impulse. It might only an initial attempt to portray certain sound a bit solemn, but I’d like to say that creating So Weleda has a broader concept aspects. The focus is currently only on value is a spiritual act, an act of creation. Nonethe- of added value? the economic aspects and needs to be less, in business that value only exists if someone greatly expanded if it is to do justice to actually buys our product. MICHAEL BRENNER: Many companies see value creation in this expanded added value concept. As very narrow terms. We perceive value creation in a you can imagine, that is no easy job. way that extends beyond our company. For instance, Weleda, like many other companies, is we don’t just obtain inputs from our suppliers, we looking for a better, more encompassing enter into partnerships and cooperations with them representation. and so we integrate all the requirements through- out the supply chain into our view of added value. And, of course, we received several awards for this in 2016. We also do not regard added value in purely monetary terms. For instance, it can be generated when we convert conventional agricultural land to

58 59 ECONOMY ECONOMY MANAGEMENT REPORT MANAGEMENT REPORT

General economic development in 2016 and outlook for 2017

As the Weleda Group is very closely linked with Weleda AG, this management report describes both the financial position of the Weleda Group and that of the individual company Weleda AG.

Business performance Development of sales by markets and regions was mainly due to the higher cost of raw materials that could year by EUR 4.1 million to EUR 10.5 million (previous year: Total sales of Weleda AG in the past year remained stable com- Around 52 per cent (previous year: 54 per cent) of sales were only partially be passed on to the market. Other reasons were EUR 6.4 million). Of the gross investments of EUR 10.6 million, pared to the prior year even though sales of the pharmaceutical generated in the D – A – CH region (Germany, Austria, Switzer- market investments relating to internationalisation, a general EUR 1.6 million were invested in intangible assets and EUR 6.0 product Iscador were discontinued in Germany. Additional in- land). Sales in this region decreased by 3.5 per cent to EUR increase in marketing expenses as well as costs associated million in property, plant and equipment. EUR 3.0 million were vestments in developing markets as well as increased research 202.6 million (previous year: EUR 210.2 million). Sales in France with intensifying research and development activities. invested in financial assets. Around half of the investments in and development spending have reduced the operating result. amounted to EUR 86.1 million (previous year: EUR 79.2 million). The operating result (EBIT) in the separate financial state- property, plant and equipment or intangible assets were made However, the consolidated net result could be improved com- Sales in the other regions increased by a total of 1.1 per cent to ments of Weleda AG decreased, compared to the previous year, in the two main production sites in Schwäbisch Gmünd, Germany pared to 2015. Further reduction of financial debt and the profit EUR 101.1 million (previous year: EUR 100.0 million). by CHF 7.4 million to CHF 19.7 million. The EBIT margin thus and Arlesheim, Switzerland. Due to the circumstances described generated lead to a further increase of the equity ratio and decreased to 7.0 per cent (previous year: 9.6 per cent). above and the higher investments, cash flow after investing consequently the Company’s resilience. The solid basis created Development of sales in the business segments activities amounted to EUR 8.9 million (previous year: EUR 23.9 over the past few years will enable Weleda to continue to active- Natural and organic cosmetics accounted for EUR 280.8 million Result for the year million). ly shape its future in terms of its corporate mission in the years or 72.0 per cent of global sales (previous year: EUR 275.0 mil- The consolidated result for the year increased by EUR 11.5 mil- Financial liabilities decreased by EUR 17.7 million to EUR 21.2 ahead. lion or 70.6 per cent). The sales generated by pharmaceuticals lion (7.6 per cent) compared to the previous year. The financial million (previous year: EUR 38.9 million). Cash and cash equiva- decreased to EUR 109.0 million (previous year: 114.5 million), result improved by EUR 6.7 million and amounted to EUR – 2.2 lents decreased by EUR 9.3 million to EUR 43.7 million at the Employees corresponding to 28.0 per cent (previous year: 29.4 per cent) of million (previous year: EUR – 8.9 million). The main reason for ­ end of the year. This resulted in a net financial credit balance of The Weleda Group had an average of 2,028 full-time employees total sales. the improvement is in large part due to the absence of foreign EUR 22.4 million (previous year: EUR 14.0 million). in 2016 (previous year: 1,964). Weleda AG had an average of The development of global sales in the pharmaceuticals busi- currency losses, triggered in the previous year by the strength Cash flow from operating activities for Weleda AG amounted 1,074 full-time employees (previous year: 1,046). ness segment was negative and decreased by 4.8 per cent in of the Swiss franc. Charges in 2015 associated with the adjust- to CHF 12.1 million (previous year: CHF 25.5 million) in the year 2016 (previous year: increase of 3.8 per cent). In the D – A – CH ment of the discount rate for the technical calculation of German under review and, after the deduction of net investments of Risk assessment region, which generated about 45 per cent of sales, sales pension liabilities should also be mentioned here. Due to the CHF 8.7 million (previous year: CHF 6.6 million), still came to Risks are an integral part of business operations. A risk manage- ­decreased by about 11.5 per cent compared with the previous decreased business performance and different profit distribu- CHF 3.4 million (previous year: CHF 18.9 million). Weleda AG ment system that enables the identification, analysis, control year. The discontinuation of Iscador sales in Germany was the tion within the Group, income taxes decreased to EUR 10.2 mil- ­repaid CHF 17.2 million (previous year: CHF 15.3 million) in inter- and monitoring of significant risks in the corporate environ- main reason for the reduction. A positive growth impulse was lion (previous year: EUR 13.3 million). Germany accounted for the est-bearing liabilities in the year under review. ment is therefore particularly important for Weleda. generated in the regions of Western Europe, South America ­ biggest share of income taxes with EUR 7.8 million (previous In order to identify risks in good time and determine the appro- as well as Asia/Pacific. Sales within the region of Western year: EUR 9.4 million). Extraordinary events priate action, our management regularly assesses, at Group ­Europe increased by 2.6 per cent mainly due to the strong per- The separate financial statements of Weleda AG showed a In the year under review there were no significant extraordi- level and at the level of Weleda AG, any significant internal and formance in the French market. In the other markets sales profit of CHF 8.1 million (previous year: loss of CHF 17.3 million). nary events. In the previous year the adjustment due to the external risks that may impact the entire corporate environ- slightly decreased by 0.4 per cent compared to the previous The loss in the previous year was attributable mainly to unreal- amendment of the new accounting law was reported as an ment. The Board of Directors discusses and approves the results year. ised foreign currency losses amounting to CHF 4.7 million, as extraordinary­ event. of the risk assessment and any measures every six months. Global sales of the natural and organic cosmetics business well as to the amendment of Swiss accounting law. In 2015 the segment grew by a total of 2.1 per cent compared with the pre- valuation method for equity investments had to be changed Research and development activities Development of sales vious year (8.3 per cent sales growth in 2015). The growth from group asset assessment to an itemised assessment, which The growth of natural and organic cosmetics was mainly driven The Weleda Group’s sales for the 2016 financial year amount ­ ­regions of Western Europe, South America, Asia and Pacific as resulted in a one-time, extraordinary book loss of CHF 23.9 mil- by market expansion and innovation. As in previous years, phar- to EUR 389.8 million (previous year: EUR 389.5 million). This well as Central and Eastern Europe including Russia were lion. maceuticals had to be financially supported due to regulatory corresponds to a growth of 0.1 per cent, or EUR 0.3 million, ­primarily responsible for the increase. Sales dropped slightly by requirements. Once again, therefore, Weleda invested double- compared with the previous year (adjusted for exchange rate 0.8 per cent in the D – A – CH region. Sales growth in all other Financial and assets situation digit millions in research and development this year. effects: 1.1 per cent, or EUR 4.1 million). This means that Weleda countries totalled 5.6 per cent. The equity ratio of the Weleda Group increased to 43.8 per cent held up well in 2016 despite an intensely competitive market (previous year: 38.0 per cent) due to the improved net result for Outlook for 2017 and the discontinuation of the sale of Iscador in Germany. Operating result the year and the repayment of financial debt. Consequently this In view of the current market conditions, planned innovation The net sales from the individual Company Weleda AG The consolidated operating result (EBIT) of the Weleda Group further increased the Company’s resilience for the fifth time in and the market presence of Weleda, we see continued good ­decreased by 0.2 per cent or CHF 0.5 million year-on-year. fell, despite consistent sales year-on-year, by EUR 9.0 million succession. opportunities for the growth of natural and organic cosmetics to EUR 23.9 million (previous year: EUR 32.9 million). The EBIT Consolidated cash flow from operating activities amounted in Germany, Austria, France, Japan, the Netherlands, Brazil and margin decreased to 6.1 per cent (previous year: 8.5 per cent). to EUR 19.4 million (previous year: EUR 30.3 million). Cash flows Russia. We expect lower but positive average growth in the The reduction in the operating result in comparison to 2015 from investing activities increased compared with the previous other countries. With regard to pharmaceuticals, we also expect

60 61 ECONOMY ANNUAL FINANCIAL REPORT 2016 MANAGEMENT REPORT WELEDA GROUP

Consolidated Annual Financial Report 2016 Weleda Group

to see slight positive growth. Weleda will continue to develop Operating result (EBIT) markets outside Europe also in 2017 in order to be able to use in million EUR opportunities in less mature markets. The associated invest- 2016 23.9 ment in market expansion will additionally have a negative im- 2015 32.9 pact on the operating result. BALANCE SHEET OF THE WELEDA GROUP 64

2014 35.1 INCOME STATEMENT OF THE WELEDA GROUP 65 CASH FLOW STATEMENT OF THE WELEDA GROUP 66 2013 34.0 Sales at respective year-end exchange rates STATEMENT OF SHAREHOLDERS’ EQUITY OF THE WELEDA GROUP 67 in million EUR (change from previous year) 2012 10.6 NOTES TO THE FINANCIAL STATEMENTS OF THE WELEDA GROUP 68 2016 389.8 (+ 0.1 %) REPORT OF THE STATUTORY AUDITOR 80

( ) 2015 389.5 + 6.9 % Result attributable to shareholders in million EUR 2014 364.3 (+ 8.2 %) 2016 11.2 2013 336.7 (+ 4.4 %) 2015 10.1 2012 322.5 (+ 4.9 %) 2014 9.3

Sales adjusted for exchange rate effects 2013 4.2 in million EUR (change from the previous year adjusted for shift in exchange rates as at December 31st 2016) 2012 0.8

2016 389.8 (+ 1.0 %)

2015 385.8 (+ 5.1 %) Natural and organic cosmetics and pharmaceuticals Weleda Group 2014 367.2 (+ 8.3 %)

2013 339.1 (+ 5.2 %) Weleda natural and organic 72.0 % cosmetics 2012 322.3 (+ 3.5 %) Total: EUR 389.8 million Weleda pharmaceuticals 28.0 % Statutory auditor Contact person for shareholders Ernst & Young AG Paul Mackay, Investments in intangible assets and property, Basel, Switzerland Chairman of the Board of Directors plant and equipment in million EUR Corporate headquarters Secretariat and share register 2016 7.6 Market performance of Weleda Group by region Weleda AG Sabine Lexen in million EUR (exchange rate-adjusted changes from the previous year) 2015 8.0 Dychweg 14, 4144 Arlesheim, Switzerland Tel. +41 61 705 22 02

D – A – CH 202.6 Tel. +41 61 705 21 21 2014 6.9 Germany, Austria, Switzerland (– 3.3 %) www.weleda.com, www.weleda.ch Western Europe 111.5 2013 4.1 France, UK, Benelux (+ 7.6 %) Northern, Central, Eastern Europe 19.1 Branch in Germany 2012 8.6 Scandinavia, Russia, Czech Republic, CEE (+ 9.4 %) Total: Weleda AG EUR 389.8 million North America 12.9 (– 10.2 %) Möhlerstr. 3 – 5, 73525 Schwäbisch Gmünd South America, Italy, Spain 32.9 Germany (+ 5.4 %) Tel. +49 7171 91 90 Asia / Pacific 10.8 (+ 14.0 %) www.weleda.de

62 63 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

Balance sheet of the Weleda Group Income statement of the Weleda Group

Assets in 1,000 EUR in 1,000 EUR

Notes 31.12.2016 31.12.2015 Notes 2016 2015

Current assets Net sales of goods and services 9 389,811 389,498 Cash and cash equivalents 43,715 52,928

Trade receivables 1 61,699 52,637 Other income 10 3,006 3,581 Other current receivables 5,497 4,432

Inventories 2 53,192 65,517 Change in inventories of finished goods and work in progress – 3,103 5,695 Prepaid expenses and accrued income 7,110 4,049 Total operating income 389,714 398,774 Total current assets 171,213 179,563

Non-current assets Cost of materials – 92,107 – 99,939

Financial assets 3 4,327 1,983 Employee income and social expenditure 11 – 139,008 – 139,033

Investments in non-controlling interests 3 731 527 Other operating expenses 12 – 125,016 – 116,478

Property, plant and equipment 3 67,541 69,266 Depreciation, amortisation and impairment losses on non-current assets 13 – 9,655 – 10,399 Intangible assets 3 4,787 5,046 Total operating expenses – 365,786 – 365,849 Total non-current assets 77,386 76,822

Operating result (EBIT) 23,928 32,925 Total assets 248,599 256,385

Financial expenses 14 – 2,421 – 9,119

Liabilities and shareholders’ equity Financial income 15 241 225 in 1,000 EUR

Notes 31.12.2016 31.12.2015 Ordinary result for the year 21,748 24,031 Liabilities Current liabilities Income taxes 16 – 10,220 – 13,322 Trade payables 4 19,983 19,219 Consolidated result for the year 11,528 10,709 Current interest-bearing liabilities 11,247 18,194

Other current liabilities 5 10,378 11,564 Attributable to shareholders of Weleda AG 11,200 10,076 Current provisions 6 5,285 9,313 Attributable to non-controlling interests 328 633 Accrued expenses and deferred income 15,439 13,234 Total current liabilities 62,332 71,524

Non-current liabilities

Non-current interest-bearing liabilities 7 10,027 20,756 Other non-current liabilities 1,667 973

Non-current provisions 6 65,763 65,716 Total non-current liabilities 77,457 87,445 Total liabilities 139,789 158,969

Shareholders’ equity Share capital 3,800 3,800 Non-voting share capital 7,600 7,600 Capital reserves 9,600 9,600 Retained earnings 85,541 74,336

Treasury voting and non-voting shares 8 –1,079 –1,012 Shareholders’ equity excl. non-controlling interests 105,462 94,324 Non-controlling interests 3,348 3,092 Shareholders’ equity incl. non-controlling interests 108,810 97,416

Total liabilities and shareholders’ equity 248,599 256,385

64 65 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

Cash flow statement of the Weleda Group Statement of shareholders’ equity of the Weleda Group

in 1,000 EUR in 1,000 EUR

2016 2015 Company Capital Accumulated Other Treasury Total Non- Total capital 1 reserves currency retained voting and excl. non- controlling incl. non- Consolidated result for the year 11,528 10,709 (agio) difference earnings non-voting controlling interests controlling Depreciation, amortisation and impairment losses shares interests interests on non-current assets 9,655 10,399 Shareholders’ equity Changes in provisions – 4,723 4,252 as at January 1st 2015 11,400 9,600 – 1,627 66,591 – 855 85,109 2,525 87,634 Gain / loss from the disposal of non-current assets 30 – 12 Result for the year 10,076 10,076 633 10,709 Changes in trade receivables – 8,434 5,835 Dividends – 645 – 645 – 17 – 662 Changes in inventories 12,800 12,816 Change in treasury voting and non-voting shares – 157 – 157 – 157 Changes in other current receivables and prepaid expenses / accrued income – 4,083 – 1,268 Currency translation effect / Other 2 – 66 7 – 59 – 49 – 108

Changes in trade payables 689 – 7,055 Shareholders’ equity Changes in other current liabilities and accrued expenses / as at December 31st 2015 11,400 9,600 – 1,693 76,029 – 1,012 94,324 3,092 97,416 deferred income 1,558 – 6,721 Result for the year 11,200 11,200 328 11,528 Other non-cash items 620 718 Dividends – 630 – 630 – 17 – 647 Currency and valuation influences not affecting liquidity 10 781 Change in treasury voting and Share of result of associated companies – 202 – 194 non-voting shares – 67 – 67 – 67 Cash flow from operating activities 19,448 30,260 Currency translation effect / Other 2 738 – 103 635 – 55 580

Investments in property, plant and equipment – 5,962 – 6,078 Shareholders’ equity as at December 31st 2016 11,400 9,600 – 955 86,496 – 1,079 105,462 3,348 108,810 Divestments of property, plant and equipment 9 799 1 Company capital is broken down as follows: Investments in financial assets – 2,975 – 52 6,880 registered voting shares at CHF 112.50 Divestments of financial assets 89 844 3,984 registered voting shares at CHF 125.00 3,478 registered voting shares at CHF 1,000.00 Investments in intangible assets – 1,623 – 1,956 19,000 registered non-voting shares at CHF 500.00 There was no change in the Company capital versus the prior year. Divestments of intangible assets 11 12 2 The item Other retained earnings includes under Other a goodwill / badwill on the buyout of non-controlling interests. Cash flow from investing activities – 10,451 – 6,431

Dividend payments to shareholders / non-controlling interests – 647 – 662 Cash flow from change in current interest-bearing liabilities (net) – 17,659 – 13,518 Repayment of non-current interest-bearing liabilities 0 – 1,343 Disposal of treasury voting and non-voting shares 23 121 Purchase of treasury voting and non-voting shares – 90 – 278 Cash flow from financing activities – 18,373 – 15,680 Total cash flow – 9,376 8,149

Cash and cash equivalents at start of reporting period 52,928 43,234 Total cash flow – 9,376 8,149 Currency translation effect on cash and cash equivalents 163 1,545 Cash and cash equivalents at end of period 43,715 52,928

66 67 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

Notes to the consolidated financial statements of the Weleda Group

General YEAR-END RATES in EUR Due to rounding, individual figures in this report may not add up exactly to the reported sum. Key figures 2016 2016 2015 2015 and changes are calculated based on the exact amount and not the reported rounded amount. Rates on balance Average rates Rates on balance Average rates sheet date sheet date 1 CHF (Swiss franc) 0.933 0.917 0.920 0.936 Consolidation principles 1 USD (US dollar) 0.948 0.904 0.921 0.901 1 GBP (Pound sterling) 1.172 1.225 1.357 1.377 Accounting principles 1 BRL (Brazilian real) 0.291 0.261 0.233 0.274 This Annual Financial Report has been prepared in accordance with uniform accounting standards (Weleda Accounting Manual). These accounting standards comply with the provisions on commercial accounting of the Swiss Code of Obligations (article 957 – 963 b OR). The consolidated financial statements of the Weleda Group comply with the law and the Articles of Intragroup transactions, balances and intercompany profits Incorporation. Certain items of the balance sheet as well as the income statement are summarised in order All intragroup transactions and balances are eliminated, as were all intercompany profits stated in the to provide the reader with a better overview. These items are explained in detail in the notes. balance sheet.

Scope of consolidation Balance sheet and valuation principles In addition to Weleda AG Arlesheim and its branch Weleda AG Schwäbisch Gmünd, 19 subsidiaries are fully In general, assets and liabilities are valued on an individual basis in so far as they are material and cannot consolidated within the Weleda Group statements. These companies are, without exception, Group com­ be treated together as a group as is customary due to their similarity. panies and controlled by Weleda AG Arlesheim. Weleda AG has direct or indirect investments of more than 50 per cent in these companies. The non-controlling interest in Japan is consolidated using the equity Sales recognition method. The consolidated companies are listed in the notes. Sales are recognised on the transfer of risks and benefits to customers or upon provision of the service. This generally corresponds to delivery of the products. Consolidation method The consolidated financial statements are based on the annual statements of the Group companies as at Current assets December 31st 2016, which are prepared in accordance with the provisions of the Weleda Accounting Receivables and other current assets are reported at their nominal values. The general risk of loss and indi- Manual. The consolidation period is the calendar year. Capital consolidation is carried out in accordance with vidual credit risk have been accounted for on the basis of value adjustments. The valuation of inventories the Anglo-Saxon purchase method. For the fully consolidated companies, assets, liabilities, expenses and is conducted on the basis of acquisition or production cost while observing the principle of lower of cost income are stated at 100 per cent. Non-controlling interests in consolidated shareholders’ equity and profit / or market. loss for the year are disclosed separately. The carrying amounts of the parent company’s investment are offset against the current shareholders’ Non-current assets equity of the subsidiary companies. In accordance with the full consolidation method, assets and liabilities Acquired intangible assets are recognised at the cost of acquisition, less amortisation. Property, plant and as well as expenses and income also of those companies in which a third party is involved are included in full equipment is recognised at acquisition or production cost minus depreciation. Small-value intangible assets in the Group accounts. Third parties’ shares of shareholders’ equity and of the results of consolidated com- and property, plant and equipment with a value of less than EUR 1,000 are depreciated in full in the year panies are disclosed separately. they are added. Financial assets are recognised at the cost of acquisition. Equity holdings are consolidated using the Currency translation equity method. The financial statements of consolidated companies in foreign currencies are translated as follows: Where there are indications of non-current assets being overvalued, carrying values have been reviewed current assets, non-current assets and liabilities are translated at year-end rates (rate on balance sheet and, where necessary, adjusted. date), shareholders’ equity at historical rates. The income statement and the cash flow statement are trans- lated using average rates for the year. The resulting currency translation effects are booked directly in Liabilities retained earnings without impacting profit and loss. The following currency exchange rates are applied: Liabilities are recognised based on their nominal value. Provisions for pension plans and similar obligations are determined based on actuarial principles. The remaining provisions cover all recognisable risks for un­ determined obligations. Liabilities are recognised at the respective amount at which they are to be repaid.

Leasing transactions Leasing and rental contracts are recognised on the basis of legal ownership. Accordingly, expenses as lessee are recognised on an accrual basis, whereas the leased or rented objects themselves are not recog- nised. The total amount of outstanding non-current rental and leasing obligations is included in the notes.

68 69 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

Notes to the balance sheet and the income statement

1 Trade receivables 3 Non-current assets

in 1,000 EUR in 1,000 EUR 31.12.2016 31.12.2015 Financial Investments Property, Intangible Total assets in non- plant and assets non-current From third parties 61,164 52,126 controlling equipment assets From companies in which a non-controlling interest is held 477 385 interests st From shareholders 58 126 as at January 1 2015 2,535 321 70,247 5,237 78,340 Total trade receivables 61,699 52,637 Currency translation effect 56 12 2,027 46 2,141 Equity valuation 0 194 0 0 194 Additions 245 0 6,078 1,956 8,279 Disposals – 848 0 – 873 – 12 – 1,733 2 Inventories Depreciation, amortisation and impairment losses – 5 0 – 8,213 – 2,181 – 10,399 in 1,000 EUR 31.12.2016 31.12.2015 as at December 31st 2015 1,983 527 69,266 5,046 76,822 Raw, auxiliary and operating materials 15,409 15,654 Currency translation effect – 128 2 432 62 368 Unfinished products 11,166 14,702 Equity valuation 0 202 0 0 202 Finished products 6,071 10,921 Additions 2,975 0 5,962 1,623 10,560 Trade goods 22,180 26,493 Disposals – 498 0 – 402 – 11 – 911 Value adjustments on inventories – 1,634 – 2,253 Reclassification 0 0 – 433 433 0 Total inventories 53,192 65,517 Depreciation, amortisation and impairment losses – 5 0 – 7,284 – 2,366 – 9,655

as at December 31st 2016 4,327 731 67,541 4,787 77,386

Financial assets include non-current amounts due from third parties as well as non-current restricted cash.

Investments in non-controlling interests include investments in companies in which we hold between ­ 20 and 50 per cent. Increases are due to equity valuation. Increases in intangible assets mainly comprise film and image rights as well as software. The increase in property, plant and equipment consists primarily of investment projects as well as investment in replace- ments in Germany, France and Switzerland.

The largest share of the amount under Property, plant and equipment, totalling EUR 23 million (2015: EUR­ 24 million), relates to Switzerland. The branch in Germany accounts for EUR 15 million (2015: EUR 16 million) and Weleda France has property, plant and equipment totalling EUR 13 million (2015: EUR 12 million).

70 71 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

4 Trade payables 7 Non-current interest-bearing liabilities

in 1,000 EUR in 1,000 EUR 31.12.2016 31.12.2015 31.12.2016 31.12.2015 To third parties 19,935 19,141 Bank loans 8,712 11,588 To non-controlling interests 0 15 Funds and trustee loans 1,315 9,168 To the Group auditor Ernst & Young 48 63 Total non-current interest-bearing liabilities 10,027 20,756 Total trade payables 19,983 19,219

MATURITY in 1,000 EUR 31.12.2016 31.12.2015 5 Other current liabilities Residual maturity 1 to 5 years 10,027 20,756

in 1,000 EUR Residual maturity over 5 years 0 0 31.12.2016 31.12.2015 Total non-current interest-bearing liabilities 10,027 20,756 To third parties 10,368 11,553 To shareholders 10 10 To the Group auditor Ernst & Young 0 1 All financial liabilities due within the following 12 months are disclosed in current interest-bearing liabilities. Total other current liabilities 10,378 11,564

8 Treasury voting and non-voting shares

in 1,000 EUR 6 Provisions 2016 2015

in 1,000 EUR Stock of treasury voting shares ( ) st Pension Tax provisions 1 Other Total in number: 139/ prior year: 21 as at January 1 265 12 provisions provisions 2 provisions Purchase of treasury voting shares (in number: 38 / prior year: 122) 90 262 as at January 1st 2015 27,434 627 39,009 67,070 Sale of treasury voting shares (in number: 0 / prior year: 4) 0 – 9 Increase 4,439 42 9,061 13,542 Stock of treasury voting shares st Utilisation – 503 – 262 – 5,515 – 6,280 (in number: 177 / prior year: 139) as at December 31 355 265 Decrease – 54 0 – 2,956 – 3,010 Currency translation effect 400 – 75 3,382 3,707 Stock of treasury non-voting shares (in number: 735 / prior year: 818) as at January 1st 747 843 Purchase of treasury non-voting shares as at December 31st 2015 31,716 332 42,981 75,029 (in number: 0 / prior year: 14) 0 16 Increase 1,021 0 1,449 2,470 Sale of treasury non-voting shares (in number: 20 / prior year: 97) – 23 – 112 Utilisation – 265 – 8 – 6,541 – 6,814 Stock of treasury non-voting shares st Decrease – 53 0 – 327 – 380 (in number: 715 / prior year: 735) as at December 31 724 747 Currency translation effect – 1,235 42 1,936 743 Total treasury voting and non-voting shares as at December 31st 1,079 1,012 as at December 31st 2016 31,184 366 39,498 71,048

Of which current provisions 1,207 0 4,078 5,285 Treasury voting and non-voting shares were purchased respectively sold at 250 per cent of the nominal value. Of which non-current provisions 29,977 366 35,420 65,763

1 The item Tax provisions includes only provisions for deferred taxes. 2 The item Other provisions includes, inter alia, currency provisions, provisions for strategic projects and procurement for replacements following the sale of Iscador and provisions for jubilee and other long-service bonuses. Of a total utilisation of EUR 6.5 million, EUR 5.4 million was reclassified to deferred income.

72 73 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

9 Net sales of goods and services 11 Employee income and social expenditure

PRODUCT GROUPS in 1,000 EUR 2016 2015 2016 2016 2015 2015 Employee income 108,671 106,613 in 1,000 EUR in % in 1,000 EUR in % Social expenditure 30,337 32,420 Natural and organic cosmetics 280,757 72.0 275,040 70.6 Total employee income and social expenditure 139,008 139,033 Pharmaceuticals 109,054 28.0 114,458 29.4 Net sales 389,811 100.0 389,498 100.0

12 Other operating expenses REGIONS

in 1,000 EUR 2016 2016 2015 2015 2016 2015 in 1,000 EUR in % in 1,000 EUR in % Sales and distribution costs 79,623 72,010 D – A – CH (Germany, Austria, Switzerland) 202,607 52.0 210,255 53.8 Operating costs 20,912 19,668 Western Europe Administrative costs 18,130 19,092 (France, UK, Benelux) 111,499 28.6 104,625 26.9 Contributions, levies, property and capital taxes 2,557 2,768 Northern, Central and Eastern Europe Other expenses 3,794 2,940 (Scandinavia, Russia, Czech Republic, CEE) 19,117 4.9 17,806 4.6 Total other operating expenses 125,016 116,478 North America 12,848 3.3 14,265 3.7 South America, Italy, Spain 32,924 8.4 32,959 8.5 Asia / Pacific 10,816 2.8 9,588 2.5 Other operating expenses includes, but is not limited to, sales and distribution costs such as advertising and Net sales 389,811 100.0 389,498 100.0 market communication, sales documents, material costs of sales representatives and all postal costs. It also includes costs for building and machine maintenance, legal and consulting costs, IT expenses and costs for third-party research as well as non-operating expenses. The item Other expenses includes a donation 10 Other income of EUR 1.6 million (2015: EUR 1.7 million) to the School of Spiritual Science in Dornach and a donation of EUR 0.5 million (2015: EUR 0.4 million) to the fund for medical and nursing training at Klinik Arlesheim AG. in 1,000 EUR 2016 2015 Total other income 3,006 3,581 13 Depreciation, amortisation and impairment losses on non-current assets

in 1,000 EUR Other income mainly comprises rental income, income from the release of provisions, service revenues from 2016 2015 the showroom Espace Paris as well as refunds from suppliers. Financial assets 5 5 Property, plant and equipment 7,284 8,213 Intangible assets 2,366 2,181 Total depreciation, amortisation and impairment losses on non-current assets 9,655 10,399

74 75 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

Other information

14 Financial expenses Full-time equivalents The annual average number of full-time equivalents for the reporting year, as well as the previous year, in 1,000 EUR 2016 2015 exceeded 250. Changes in full-time equivalents are stated in the management report. Interest and similar expenses – 2,007 – 5,364 Realised and unrealised foreign currency result, net – 414 – 3,755 Total financial expenses – 2,421 – 9,119 Contingent liabilities and other financial obligations

in 1,000 EUR 31.12.2016 31.12.2015 The item Interest and similar expenses includes interest in the amount of EUR 0.9 million (2015: EUR 1.4 Guarantees 100 100 million) for the GLS fund in Germany and the Swiss trustee loans. In 2015, interest expense included Contingent liabilities 350 350 a change in the discount rate for the technical calculation of German pension liabilities in the amount of Fair value of derivative financial instruments 694 970 EUR 2.6 million. Since 2016 this adaption of the pension liabilities is recorded under the position employee income. The derivative financial instruments relate to interest hedges (variable to fixed rate) in France for existing financial liabilities. 15 Financial income

in 1,000 EUR 2016 2015 Non-current rental and leasing obligations

Interest and similar income 241 225 in 1,000 EUR Total financial income 241 225 31.12.2016 31.12.2015 Residual maturity up to 5 years 15,565 14,884 Residual maturity over 5 years 6,280 10,211 Total non-current rental and leasing obligations 21,845 25,095 16 Income taxes Income taxes occurred mainly in Germany and France. There are rental and leasing obligations for computer hardware, vehicles and production machinery as well as buildings.

Fee for the Group auditor Ernst & Young

in 1,000 EUR 31.12.2016 31.12.2015 Auditing services 213 136 Other services 127 167 Total fee 340 303

76 77 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA GROUP

Total amount of assets pledged or assigned to secure own liabilities and assets under Overview of Group and holding companies reservation of ownership Consolidated Registered office Function Currency Company Capital Capital in 1,000 EUR companies capital in share 2016 share 2015 1,000 in % in % 31.12.2016 31.12.2015 Weleda Group 28,574 29,946 Headquarters: CH – Arlesheim/ incl. production, trade Weleda AG D – Schwäbisch Gmünd and services CHF 4,750 100.0 100.0 Weleda Benelux SE NL – Zoetermeer Production and trade EUR 2,269 100.0 100.0 Weleda Ges. m. b. H. A – Vienna No operative function EUR 36 100.0 100.0 Restricted cash Weleda Ges. m. b. H. & Co KG A – Vienna Trade EUR 1,100 100.0 100.0

in 1,000 EUR Weleda Trademark AG CH – Arlesheim Services EUR 920 100.0 100.0 31.12.2016 31.12.2015 Weleda Inc. USA – Irvington, N.Y. Trade USD 8,525 100.0 100.0 Within current assets 233 230 Weleda Italia S. r. l. I – Milan Trade EUR 500 100.0 100.0 Within non-current assets 2,812 0 Weleda do Brasil Ltda. BRA – São Paulo Production and trade BRL 27,140 100.0 100.0 Total restricted cash 3,045 230 Weleda Naturals GmbH D – Schwäbisch Gmünd Services EUR 25 100.0 100.0 Weleda East GmbH RUS – Moscow Trade RUB 10 100.0 100.0 Weleda S. A. U. E – Madrid Trade EUR 685 100.0 100.0 Weleda (NZ) Ltd NZL – Havelock North Production and trade NZD 169 100.0 100.0 Significant events after the balance sheet date Weleda Australia Pty Ltd AUS – Warriewood Trade AUD 0 100.0 100.0 There are no significant events after the balance sheet date which could impact the book value of the Weleda AB S – Stockholm Trade SEK 2,000 100.0 100.0 assets or liabilities or which should be disclosed here. Weleda (Australasia) Ltd NZL – Havelock North Services NZD 1,139 100.0 99.5 Weleda Chile SpA CHL – Santiago de Chile Production and trade CLP 491,321 100.0 99.7 Weleda spol. s.r.o. CZ – Prague Trade CZK 19,684 99.4 99.4 Weleda UK Ltd GB – Ilkeston Production and trade GBP 1,495 97.2 95.2 Weleda S. A. ARG – Buenos Aires Production and trade ARS 7,622 95.0 95.0 Weleda S. A. F – Huningue Production and trade EUR 3,400 90.0 89.9 Weleda Japan Co., Ltd. JP – Nagoya Production and trade JPY 10,000 35.0 35.0

The share of voting rights corresponds to the capital share, with the exception of Weleda (Australasia) Ltd in the prior year, where the share of voting rights was 75.8 per cent. Since 2016 this company is entirely owned by Weleda Group.

78 79 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA GROUP WELEDA AG

Report of the statutory auditor To the General Meeting of Weleda AG, Arlesheim Annual Financial Report 2016

Report of the statutory auditor on the consolidated Opinion Weleda AG financial statements In our opinion, the consolidated financial statements for the Consisting of Arlesheim headquarters and year ended 31 December 2016 comply with Swiss law and the branch office Schwäbisch Gmünd As statutory auditor, we have audited the accompanying con- consolidation and valuation principles as set out in the notes. solidated financial statements of Weleda AG, which comprise the consolidated balance sheet, consolidated income state- Report on other legal requirements ment, consolidated cash flow statement, consolidated state- We confirm that we meet the legal requirements on licensing ment of shareholders’ equity and notes (pages 64 to 79), for according to the Auditor Oversight Act (AOA) and independ- the year ended 31 December 2016 ence (article 728 CO) and that there are no circumstances BALANCE SHEET OF WELEDA AG 82 incompatible with our independence. INCOME STATEMENT OF WELEDA AG 83 Board of Directors’ responsibility In accordance with article 728 a paragraph 1 item 3 CO and CASH FLOW STATEMENT OF WELEDA AG 84 The Board of Directors is responsible for the preparation of the Swiss Auditing Standard 890, we confirm that an internal con- STATEMENT OF SHAREHOLDERS’ EQUITY OF WELEDA AG 85 consolidated financial statements in accordance with the re- trol system exists, which has been designed for the prepa­ NOTES TO THE FINANCIAL STATEMENTS OF WELEDA AG 86 quirements of Swiss law and the consolidation and valuation ration of consolidated financial statements according to the PROPOSED APPROPRIATION OF THE RESULT FOR THE YEAR 94 principles as set out in the notes. This responsibility includes ­instructions of the Board of Directors. REPORT OF THE STATUTORY AUDITOR 95 designing, implementing and maintaining an internal control We recommend that the consolidated financial statements system relevant to the preparation of consolidated financial submitted to you be approved. statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further respon- sible for selecting and applying appropriate accounting policies Basle, 11 April 2017 and making accounting estimates that are reasonable in the Ernst & Young Ltd circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on these consolidat- ed financial statements based on our audit. We conducted our Daniel Zaugg Karina Kamella audit in accordance with Swiss law and Swiss Auditing Stand- Licensed audit expert Licensed audit expert ards. Those standards require that we plan and perform the (Auditor in charge) audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evi- dence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of ma- terial misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assess- ments, the auditor considers the internal control system rele- vant to the entity’s preparation of the consolidated financial statements in order to design audit procedures that are appro- priate in the circumstances, but not for the purpose of express- ing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropri- ateness of the accounting policies used and the reasonable- ness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is suffi- cient and appropriate to provide a basis for our audit opinion.

80 81 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA AG WELEDA AG

Balance sheet of Weleda AG Income statement of Weleda AG

Assets in 1,000 CHF in 1,000 CHF

Notes 31.12.2016 31.12.2015 Notes 2016 2015 Current assets Net sales of goods and services 280,759 281,230 Cash and cash equivalents 12,563 27,176

Trade receivables 1 47,362 42,505 Other income 7,518 7,786

Other current receivables 2 5,858 5,594 Inventories 48,156 56,345 Change in inventories of finished goods and work in progress – 1,341 5,236 Prepaid expenses and accrued income 3,213 2,519 Total operating income 286,936 294,252 Total current assets 117,152 134,139

Non-current assets Cost of materials – 90,581 – 88,317

Financial assets 3 5,391 1,661 Employee income and social expenditure – 96,371 – 94,593

Equity investments 4 23,171 23,100 Other operating expenses – 71,991 – 74,468 Property, plant and equipment 41,529 44,219 Depreciation, amortisation and impairment losses on non-current assets -8,291 – 9,771 Intangible assets 6,808 8,644 Total operating expenses – 267,234 – 267,149 Total non-current assets 76,899 77,624

Operating result (EBIT) 19,702 27,103 Total assets 194,051 211,763

Financial expenses 10 – 3,435 – 10,798

Liabilities and shareholders’ equity Financial income 11 348 329 in 1,000 CHF Ordinary result for the year 16,615 16,634 Notes 31.12.2016 31.12.2015 Liabilities Extraordinary result 12 0 – 23,937 Current liabilities Result for the year before tax 16,615 – 7,303 Trade payables 5 8,176 9,427 Current interest-bearing liabilities 10,196 17,165 Income taxes – 8,556 – 10,022 Other current liabilities 6 2,325 3,927 Result for the year 8,059 – 17,325 Current provisions 8 4,352 9,695 Accrued expenses and deferred income 11,502 9,815 Total current liabilities 36,551 50,029

Non-current liabilities

Non-current interest-bearing liabilities 7 25,860 36,483

Non-current provisions 8 43,624 44,534 Total non-current liabilities 69,484 81,017 Total liabilities 106,035 131,046

Shareholders’ equity Share capital 4,750 4,750 Non-voting share capital 9,500 9,500 Statutory capital reserves 12,000 12,000 Statutory retained earnings 3,400 3,400 Voluntary retained earnings 59,637 52,266

Treasury voting and non-voting shares 9 – 1,271 – 1,199 Total shareholders’ equity 88,016 80,717

Total liabilities and shareholders’ equity 194,051 211,763

82 83 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA AG WELEDA AG

Cash flow statement of Weleda AG Statement of shareholders’ equity of Weleda AG

in 1,000 CHF in 1,000 CHF

2016 2015 Company Statutory Statutory Voluntary Treasury Total capital 1 capital retained retained voting and shareholders’­ Result for the year 8,059 – 17,325 reserves earnings earnings non-voting equity ( ) Depreciation, amortisation and impairment losses on non-current agio shares assets 8,291 33,708 Shareholders’ equity as at January 1st 2015 14,250 12,000 3,400 70,282 – 1,027 98,905 Of which reported under extraordinary result in the income Dividends to shareholders – 691 – 691 statement 0 23,937 Result for the year – 17,325 – 17,325 Changes in provisions – 6,104 8,954 Change in treasury voting and non-voting shares – 172 – 172 Gain / loss from the disposal of non-current assets 9 42 Changes in trade receivables – 5,435 9,070 Shareholders’ equity as at December 31st 2015 14,250 12,000 3,400 52,266 – 1,199 80,717 Changes in inventories 7,559 1,093 Dividends to shareholders – 688 – 688 Changes in other current receivables and prepaid expenses / accrued income – 989 – 2,525 Result for the year 8,059 8,059 Changes in trade payables – 1,170 – 7,639 Change in treasury voting and non-voting shares – 72 – 72 Changes in other current liabilities and accrued expenses / deferred income 245 – 3,065 Shareholders’ equity as at December 31st 2016 14,250 12,000 3,400 59,637 – 1,271 88,016 Other non-cash items 436 – 155 1 Company capital is broken down as follows: Currency and valuation influences not affecting liquidity 1,170 3,302 6,880 registered voting shares at CHF 112.50 3,984 registered voting shares at CHF 125.00 Cash flow from operating activities 12,071 25,460 3,478 registered voting shares at CHF 1,000.00 19,000 registered non-voting shares at CHF 500.00 There was no change in the Company capital versus the prior year. Investments in property, plant and equipment – 3,265 – 2,943 Divestments of property, plant and equipment 3 3 Investments in financial assets – 4,278 – 1,468 Divestments of financial assets 77 939 Investments in intangible assets – 1,194 – 3,088 Cash flow from investing activities – 8,657 – 6,557

Dividend payments to shareholders – 688 – 691 Cash flow from changes in current interest-bearing liabilities (net) – 17,173 – 13,129 Repayment of non-current interest-bearing liabilities 0 – 2,200 Disposal of treasury voting and non-voting shares 25 131 Purchase of treasury voting and non-voting shares – 97 – 303 Cash flow from financing activities – 17,933 – 16,192 Total cash flow – 14,519 2,711

Cash and cash equivalents at start of reporting period 27,176 24,924 Total cash flow – 14,519 2,711 Currency translation effect on cash and cash equivalents – 94 – 459 Cash and cash equivalents at end of period 12,563 27,176

84 85 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA AG WELEDA AG

Notes to the financial statements of Weleda AG

General Non-current assets Due to rounding, individual figures in this report may not add up exactly to the reported sum. Key figures Acquired intangible assets are recognised at the cost of acquisition, less amortisation. Property, plant and and changes are calculated based on the exact amount and not the reported rounded amount. equipment is recognised at acquisition or production cost minus depreciation. Small-value intangible assets and property, plant and equipment with a value of less than CHF 1,080 / EUR 1,000 are depreciated in full in Accounting principles the year they are added. This Annual Financial Report has been prepared in accordance with uniform accounting standards (Weleda Financial assets are recognised at the cost of acquisition. Equity holdings are also recorded at the cost of Accounting Manual). These accounting standards comply with the provisions on commercial accounting of acquisition minus the necessary value adjustments. the Swiss Code of Obligations (article 957 – 963 b OR). Where there are indications of non-current assets being overvalued, carrying values have been reviewed The Annual Financial Report of Weleda AG complies with the law and the Articles of Incorporation. Certain and, where necessary, adjusted. items of the balance sheet as well as the income statement are summarised in order to provide the reader with a better overview. These items are explained in detail in the notes. Liabilities Liabilities are recognised on the basis of nominal value. Provisions for pension plans and similar obligations Currency translation are determined based on actuarial principles. The remaining provisions covered all recognisable risks for un­ The accounts of the German business establishment are stated in euros and translated at year end as fol- determined obligations. Liabilities are recognised at the respective amount at which they are to be repaid. lows: current assets, non-current assets and liabilities are translated at year-end rates (rate on balance sheet date), shareholders’ equity at historical rates. The income statement and the cash flow statement Leasing transactions are translated using average rates for the year. The resulting currency translation effects are booked Leasing and rental contracts are recognised on the basis of legal ownership. Accordingly, expenses as directly in the income statement. The following currency exchange rates are applied: lessee are recognised on an accrual basis, whereas the leased or rented objects themselves are not recog- nised. The total amount of outstanding non-current rental and leasing obligations is included in the notes.

YEAR-END RATE in CHF 2016 2016 2015 2015 Rates on balance Average rates Rates on balance Average rates sheet date sheet date 1 EUR (euro) 1.072 1.090 1.087 1.068

Balance sheet and valuation principles In general, assets and liabilities are valued on an individual basis in so far as they are material and cannot be treated together as a group as is customary due to their similarity.

Sales recognition Sales are recognised on the transfer of risks and benefits to customers or upon provision of the service. This generally corresponds to delivery of the products.

Current assets Receivables and other current assets are reported at their nominal values. The general risk of loss and indi- vidual credit risk have been accounted for on the basis of value adjustments. The valuation of inventories is conducted on the basis of acquisition or production cost while observing the principle of lower of cost or market.

86 87 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA AG WELEDA AG

Notes to the balance sheet and the income statement

1 Trade receivables 5 Trade payables

in 1,000 CHF in 1,000 CHF 31.12.2016 31.12.2015 31.12.2016 31.12.2015 From third parties 32,679 27,562 To third parties 8,158 9,353 From associated companies 14,621 14,806 To associated companies 7 22 From shareholders 62 137 To the statutory auditor Ernst & Young 11 52 Total trade receivables 47,362 42,505 Total trade payables 8,176 9,427

2 Other current receivables 6 Other current liabilities

in 1,000 CHF in 1,000 CHF 31.12.2016 31.12.2015 31.12.2016 31.12.2015 From third parties 1,588 1,677 To third parties 2,305 3,783 From Group companies 4,270 3,917 To Group companies 9 132 Total other current receivables 5,858 5,594 To the statutory auditor Ernst & Young 0 2 To shareholders 11 10 Total other current liabilities 2,325 3,927

3 Financial assets

in 1,000 CHF 31.12.2016 31.12.2015 7 Non-current interest-bearing liabilities

Loans to Group companies 5,318 1,527 in 1,000 CHF Other financial assets 73 134 31.12.2016 31.12.2015 Total financial assets 5,391 1,661 Bank loans 7,051 8,865 Funds and trustee loans 1,410 9,969 To equity investments 17,399 17,649 Total non-current interest-bearing liabilities 25,860 36,483 4 Equity investments

in 1,000 CHF 31.12.2016 31.12.2015 MATURITY Investments in Group companies with an interest in 1,000 CHF of more than 50 per cent 23,041 22,970 31.12.2016 31.12.2015 Other equity investments 130 130 Residual maturity 1 to 5 years 8,461 18,834 Total equity investments 23,171 23,100 Residual maturity over 5 years 17,399 17,649 Total non-current interest-bearing liabilities 25,860 36,483

All financial liabilities due within the following 12 months are disclosed in current interest-bearing liabilities.

88 89 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA AG WELEDA AG

8 Provisions 10 Financial expenses

in 1,000 CHF in 1,000 CHF 31.12.2016 31.12.2015 2016 2015 Pension Fund 20,394 20,732 Interest and similar expenses relating to Group companies – 672 – 666 Other provisions 27,582 33,497 Interest and similar expenses relating to third parties – 1,432 – 4,927 Total provisions 47,976 54,229 Realised and unrealised foreign currency losses, net – 1,331 – 5,205 Total financial expenses – 3,435 – 10,798 Of which current 4,352 9,695 Of which non-current 43,624 44,534 In the previous year interest expenses included a change in the discount rate for the technical calculation of German pension liabilities in the amount of CHF 2.8 million. Since 2016 this change of the pension lia- Other provisions comprise, among other things, currency provisions for unrealised exchange rate gains on bilities is recorded under the position employee income. non-current financial positions, reserves for strategic projects, restructuring liabilities for the Weleda UK Pension Fund and reserves for jubilee and other long-term service bonuses. 11 Financial income

in 1,000 CHF 9 Treasury voting and non-voting shares 2016 2015

in 1,000 CHF Dividends and license income from Group companies 167 166 2016 2015 Interest from loans to Group companies 145 145 Stock of treasury voting shares Interest and similar income from third parties 36 18 ( ) st in number: 139/ prior year: 21 as at January 1 290 15 Total financial income 348 329 Purchase of treasury voting shares (in number: 38 / prior year: 122) 97 285 Sale of treasury voting shares (in number: 0 / prior year: 4) 0 – 10 Stock of treasury voting shares (in number: 177 / prior year: 139) as at December 31st 387 290 12 Extraordinary result

Stock of treasury non-voting shares in 1,000 CHF (in number: 735 / prior year: 818) as at January 1st 909 1,012 2016 2015 Purchase of treasury non-voting shares Total extraordinary result 0 – 23,937 (in number: 0 / prior year: 14) 0 18 Sale of treasury non-voting shares (in number: 20 / prior year: 97) – 25 – 121 Stock of treasury non-voting shares Due to changes in Swiss accounting legislation, investments had to be revalued on an individual basis in (in number: 715 / prior year: 735) as at December 31st 884 909 2015. This change in the accounting regulations resulted in a one-off, extraordinary accounting loss of CHF 23.9 million in the separate financial statements of Weleda AG for 2015. No value adjustments would Total treasury voting and non-voting shares as at December 31st 1,271 1,199 have been necessary under the old accounting legislation.

Treasury voting and non-voting shares were purchased respectively sold at 250 per cent of the nominal value.

90 91 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA AG WELEDA AG

Other information

Full-time equivalents Investments The annual average number of full-time equivalents for the reporting year, as well as the previous year, Registered office Function Currency Company Capital Capital exceeded 250. Changes in full-time equivalents are stated in the management report. capital in share 2016 share 2015 1,000 in % in % Pledged or assigned assets Weleda Benelux SE NL – Zoetermeer Production and trade EUR 2,269 100.0 100.0 Weleda Ges. m. b. H. A – Vienna No operative function EUR 36 100.0 100.0 in 1,000 CHF 31.12.2016 31.12.2015 Weleda Ges. m. b. H. & Co KG A – Vienna Trade EUR 1,100 100.0 100.0 Total amount of assets pledged or assigned to secure own Weleda Trademark AG CH – Arlesheim Services EUR 920 100.0 100.0 liabilities and assets under reservation of ownership 23,831 24,872 Weleda Inc. USA – Irvington, N.Y. Trade USD 8,525 100.0 100.0 Weleda Italia S. r. l. I – Milan Trade EUR 500 100.0 100.0 Weleda do Brasil Ltda. BRA – São Paulo Production and trade BRL 27,140 100.0 100.0 Contingent liabilities and other financial obligations Weleda Naturals GmbH D – Schwäbisch Gmünd Services EUR 25 100.0 100.0 Weleda East GmbH RUS – Moscow Trade RUB 10 100.0 100.0 in 1,000 CHF 31.12.2016 31.12.2015 Weleda S. A. U. E – Madrid Trade EUR 685 100.0 100.0 ( ) Guarantees 7,075 6,633 Weleda NZ Ltd NZL – Havelock North Production and trade NZD 169 100.0 100.0 Non-current rental and leasing obligations 3,576 4,038 Weleda Australia Pty Ltd AUS – Warriewood Trade AUD 0 100.0 100.0 Weleda AB S – Stockholm Trade SEK 2,000 100.0 100.0 Weleda (Australasia) Ltd NZL – Havelock North Services NZD 1,139 100.0 99.5 Guarantees mainly consist of a hedge for mortgages granted to Weleda Naturals. Weleda AG has leasing and Weleda Chile SpA CHL – Santiago de Chile Production and trade CLP 491,321 100.0 99.7 rental obligations for computer hardware, vehicles and production machinery as well as for buildings. Weleda spol. s.r.o. CZ – Prague Trade CZK 19,684 99.4 99.4 Weleda UK Ltd GB – Ilkeston Production and trade GBP 1,495 97.2 95.2 Weleda S. A. ARG – Buenos Aires Production and trade ARS 7,622 95.0 95.0 Restricted cash Weleda S. A. F – Huningue Production and trade EUR 3,400 90.0 89.9 Weleda Japan Co., Ltd. JP – Nagoya Production and trade JPY 10,000 35.0 35.0 in 1,000 CHF 31.12.2016 31.12.2015 Restricted cash 200 200 The share of voting rights corresponds to the capital share, with the exception of Weleda (Australasia) Ltd in the prior year, where the share of voting rights was 75.8 per cent. Since 2016 this company is entirely owned by Weleda Group.

Fee for the statutory auditor Ernst & Young

in 1,000 CHF 2016 2015 Auditing services 180 130 Other services 124 173 Total fee 304 303

Significant events after the balance sheet date There are no significant events after the balance sheet date which could impact the book value of the assets or liabilities or which should be disclosed here.

92 93 ANNUAL FINANCIAL REPORT 2016 ANNUAL FINANCIAL REPORT 2016 WELEDA AG WELEDA AG

Proposed appropriation of the result for the year Report of the statutory auditor To the General Meeting of Weleda AG, Arlesheim

Board of Directors’ proposed appropriation of the result for the year Report of the statutory auditor on the financial Opinion in CHF statements In our opinion, the financial statements for the year ended ­ 31.12.2016 31 December 2016 comply with Swiss law and the company’s Voluntary retained earnings (without result for the year) 51,577,814.33 As statutory auditor, we have audited the accompanying finan- articles of incorporation. Annual result for 2016 8,058,275.79 cial statements of Weleda AG, which comprise the balance Total voluntary retained earnings 59,636,090.12 sheet, income statement, cash flow statement, statement of Report on other legal requirements shareholders’ equity and notes (pages 82 to 94), for the year Distribution on voting share capital of CHF 4,750,000.00 332,500.00 ended 31 December 2016. We confirm that we meet the legal requirements on licensing Distribution on non-voting share capital of CHF 9,500,000.00 665,000.00 according to the Auditor Oversight Act (AOA) and independ- Voluntary retained earnings after dividend distribution 58,638,590.12 Board of Directors’ responsibility ence (article 728 CO) and that there are no circumstances in- The Board of Directors is responsible for the preparation of compatible with our independence. st Voluntary retained earnings as at December 31 2016 59,636,090.12 the financial statements in accordance with the requirements In accordance with article 728 a paragraph 1 item 3 CO and Voluntary retained earnings after appropriation of result 58,638,590.12 of Swiss law and the company’s articles of incorporation. This Swiss Auditing Standard 890, we confirm that an internal responsibility includes designing, implementing and maintain- control system exists, which has been designed for the prepa­ Since the statutory capital reserves and the statutory retained earnings have reached 50 per cent of the ing an internal control system relevant to the preparation of ration of financial statements according to the instructions share capital, there will be no further allocation. financial statements that are free from material misstatement, of the Board of Directors. whether due to fraud or error. The Board of Directors is further We further confirm that the proposed appropriation of availa- responsible for selecting and applying appropriate accounting ble earnings complies with Swiss law and the company’s articles Dividend policies and making accounting estimates that are reasonable of incorporation. We recommend that the financial statements in CHF in the circumstances. submitted to you be approved. per voting share per voting share per voting share per non-voting share

Voting share / non-voting share (nominal) 112.50 125.00 1 000.00 500.00 Auditor’s responsibility Annual dividend (7 per cent) 7.90 8.75 70.00 35.00 Our responsibility is to express an opinion on these financial Basle, 11 April 2017 minus 35 per cent Swiss withholding tax – 2.75 – 3.05 – 24.50 – 12.25 statements based on our audit. We conducted our audit in ac- Ernst & Young Ltd Net dividend per voting share / cordance with Swiss law and Swiss Auditing Standards. Those non-voting share 5.15 5.70 45.50 22.75 standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. Dividend payment An audit involves performing procedures to obtain audit evi- Daniel Zaugg Karina Kamella Provided the General Shareholders’ Meeting approves the proposed appropriation of result, we will pay the dence about the amounts and disclosures in the financial state- Licensed audit expert Licensed audit expert dividend in calendar week 24. No dividend will be paid for voting shares and non-voting shares held directly ments. The procedures selected depend on the auditor’s judg- (Auditor in Charge) by the Company at the time of dividend payment. ment, including the assessment of the risks of material mis- Swiss federal withholding tax of 35 per cent will be deducted from the gross dividend amount. This can statement of the financial statements, whether due to fraud or usually be reclaimed via tax returns. This applies to shareholders resident in Switzerland or a country with error. In making those risk assessments, the auditor considers which Switzerland has concluded a double tax agreement. For this reason, the relevant banking receipt the internal control system relevant to the entity’s preparation should be safely stored and enclosed with the final tax return. of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the pur- Weleda AG, Arlesheim, April 11th 2017 pose of expressing an opinion on the effectiveness of the en- On behalf of the Board of Directors tity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as eval- uating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient Paul Mackay Dr. Jürg Galliker and appropriate to provide a basis for our audit opinion. Chairman Deputy Chairman

94 95 CERTIFICATIONS

Certifications of Weleda countries Involvement in organisations

Weleda actively pursues environmental management and works to improve The health and diversity of people and nature are a priority for us. social and working conditions. Independent experts have confirmed We are therefore committed to issues such as integrated medicine, fair trade, compliance with internationally recognised standards by awarding the following biodiversity and the integration of refugees. This is an excerpt of the certifications. most important associations and initiatives we support in Switzerland and Germany.

Assoziation ökologischer Lebensmittel­ Demeter Germany and Demeter Baden- öbu – the Association for Sustainable hersteller (Association of Organic Food Württemberg Business Switzerland Germany Italy Processors – AöL) Active member; association of growers using Member and supporter of political initiatives; in- Weleda AG Weleda AG Weleda Italia S. r. l. Participation in the sustainability working group; biodynamic agricultural methods cludes around 360 member companies, organisa- Dychweg 14 Möhlerstr. 3 – 5 Via del Ticino 6 4144 Arlesheim 73525 Schwäbisch Gmünd 20153 Milan engagement for organic, humane and sustain­ tions and institutions and supports them to fur- Switzerland Germany Italy able foodstuffs Forum for Sustainable Palm Oil – FONAP ther develop their sustainability management Tel. +41 61 705 21 21 Tel. +49 7171 91 90 Tel. +39 02 487 70 51 www.weleda.ch www.weleda.de www.weleda.it Active member and board member; objective: to B. A. U. M. significantly increase the proportion of segre- Runder Tisch der Charta der Vielfalt Certified in accordance Certified in accordance with Certified in accordance Member since 2002; Europe’s largest corpo- gated, certified palm oil and palm kernel oil or zur Flüchtlingshilfe (Round Table of the with ISO 14001 and ISO 14001 and EMAS / Verified with SA 8000 (Social rate network for sustainable business; over ­ their respective derivatives in the German, Aus- Diversity Charter to Assist Refugees) EMAS / Verified Environ­ Environmental Management, Accountability Standard) 500 members trian and Swiss markets. Involvement in nationwide company network mental Management D-135-00032, certified in ­accordance with audit Biodiversity in Good Company Peter Kunz Cereal Cultivation, ­ Schweizer Initiative für Anthroposophische berufundfamilie­ Active board member; consortium of companies Association for Crop Development Medizin (Swiss Initiative for Anthroposophic from numerous sectors who collaborate to pro- Active member; financial and analytical support Medicine – SIAM) mote the protection and sustainable use of for the cultivation of open-pollinated self-repro- Active member; joint platform for professional global biodiversity ducing sunflowers; cultivation of suitable varie- associations, foundations, clinics, training cen- ties for sustainable agriculture tres and manufacturers of medical preparations Cancún Business and Biodiversity Pledge of the anthroposophic medical movement Signatory of the Declaration of Commitment to Hortus officinarum, Association for the the Convention on Biological Diversity (CBD) for Protection and Cultivation of Biodynamic Sustainable Leadership Forum (SLF) the protection and sustainable use of biodiver- Seeds for Medicinal Plants Founding member of the work and discussion sity; signatory of the 13th Conference on the Financial support and provision of infrastruc- platform for pioneers of sustainable corporate Convention on Biological Diversity (COP 13) ture for the biodynamic cultivation and propa- development together with B. A .U . M. and the gation of medicinal plants. Leu­phana University of Lüneburg’s Centre for Charta der Vielfalt (Diversity Charter) Sustainability Management (CSM) Signatory of the corporate initiative to promote Hufelandgesellschaft, Umbrella Organi­ France Sweden diversity in companies and institutions; already sation of the Medical Associations for Union for Ethical BioTrade (UEBT) Weleda S. A. Weleda AB signed by over 2,450 companies and public bod- ­Naturopathy and Complementary Medicine Full member and chair of the board of directors; 9, rue Eugène Jung Ludvigsbergsgatan 20 68331 Huningue Cedex 11823 Stockholm ies; patron: Federal Chancellor Angela Merkel Sponsoring member; engages with policymak- strengthening fair trade and maintaining biodi- France Sweden ers, public authorities and science and research versity in raw materials sourcing Tel. +33 38 969 68 00 Tel. +46 85 515 18 00 www.weleda.fr www.weleda.se Dachverband Anthroposophische Medizin institutions on behalf of naturopathy and com- in Deutschland (Umbrella Association plementary medicine Unternehmen integrieren Flüchtlinge Certified in accordance Certified in accordance for Anthroposophic Medicine in Germany (Enterprises integrate refugees) with ISO 14001 with ISO 14001 – DAMiD) Kneipp-Bund (Kneipp Association) Involvement in the network; initiative of the Active member; joint platform for professional Member; Federal Association for Prevention and ­Association of German Chambers of Commerce anthroposophic medicine associations and man­ Health Promotion and Industry (Deutscher Industrie- und Handels­ u­facturer of anthroposophic medicines kammertag – DIHK), supported by the German NATRUE Federal Ministry of Economics and Energy to Dachverband Komplementärmedizin Founder member of the international, non-profit integrate refugees in German enterprises ­(Umbrella Association for Complementary association of natural cosmetic manufacturers; Medicine – DAKOMED) mission: promote and protect natural and organ- Wir zusammen (We together) Active member; engaged in the political recog- ic cosmetics globally for consumers, to political- Signatory of the initiative of German industry to nition of complementary medicine in the Swiss ly promote natural cosmetics. support the integration of refugees in Germany healthcare system

96 97 GLOBAL REPORTING INITIATIVE CORPORATE GOVERNANCE

GRI indicators index Transparent and solid business practices

We base our corporate responsibility reporting on the internationally Weleda places great value on a transparent management structure recognised guidelines of the Global Reporting Initiative (GRI). As in the previous year, and an open communication culture. The rules for good corporate governance we have applied the guidelines in version G3 in this report. We will are laid down in its statutes and its organisational regulations. evaluate the GRI Sustainability Reporting Standards adopted in October 2016.

Standard disclosures Environmental metrics Risk awareness Tasks Weleda views risk management as an important management The function of the Audit Committee is to provide effective Index Page Index Page task which contributes to promoting risk awareness in all em- support to the Board of Directors in monitoring corporate gov- 2.1 Name of the organisation Titel EN1 – EN2 Materials used and recycling 51 ployees. Weleda considers taking risks as an integral part of its ernance. This includes: 2.2 Primary products and services 54 – 55 EN3 Direct energy consumption 47, 50 operations. The primary objective of risk management is to 2.3 Operational structure of the organisation, EN4 Indirect energy consumption 47, 50 ­ensure the long-term survival of the company – as a basis for – monitoring the integrity of financial reporting and the including main divisions, operating EN8 Total water withdrawal 45, 50 companies, subsidiaries and joint ventures 22, 100 further development. Risk reporting to the Audit Committee Group’s internal control system, particularly in the areas of EN10 Volume of water recycled and reused 45 2.4 Location of the organisation’s headquarters 100, U3 and the Board of Directors takes place half-yearly. finance and accounting, as well as monitoring compliance EN11 – Location and site of land owned, leased, 2.5 Countries where the organisation operates 56 – 57, with legal and internal regulations (compliance with the Code EN12 managed in, or adjacent to, protected areas 100 and areas of high biodiversity value and Control and risk management of Conduct) 2.6 Nature of ownership and legal form Inside impact on biodiversity 41, 44 The material content and elements of Weleda’s Group-wide – monitoring the independence and the performance of the cover page EN14 Strategies, current actions and future plans risk policy are documented and described in a comprehensive independent external auditors (auditors and Group auditors) 2.8 Scale of the organisation Inside for managing impacts on biodiversity 41, 44 (number of employees, net sales, cover control and risk management system (KuRS). In addition to a and the internal auditing department ) EN16 Greenhouse gas emissions 46 – 47, 51 total capitalisation page, 1, 57 central risk management process for early and continuous – assessing the appropriateness of the risk management EN22 Total weight of waste by type and disposal 2.9 Significant changes in structure 22 method 48 – 49, 51 identification and evaluation of relevant fundamental corpo- ­system 2.10 Awards received in the reporting period 26 EN26 Initiatives to mitigate environmental impacts rate risks, this system also comprises, at the process level for – ensuring efficient communication between the independent 3.1 – 3.4 Reporting profile: reporting period, date of most of products and services 41 – 49 recent report, reporting cycle, contact point example, specifications for the design and documentation of external auditors, the Executive Board and internal auditing. for questions regarding the report or contents Cover, U3 the internal control system (ICS). 3.12 GRI indicators index 98 Metrics on labour practices and decent work The Audit Committee itself does not have any decision-making 4.1 Corporate governance 99 The Audit Committee is a fundamental element of the manage- powers but can submit proposals via the Board of Directors. 4.8 Mission statements, code of conduct and 1, 23 – 25, Index Page ment structure, with responsibility for compliance with Wele- The powers and duties assigned to the Board of Directors in relevant principles (internal) 37 – 38, LA1 Total workforce by employment type, 42, 57, 99 da’s corporate governance. accordance with the organisational regulations and the law contract and region 39 4.12 Charters, principles or initiatives (external) 35 – 37, apply to the Board of Directors as a whole. LA13 Employees per category according to gender, 41, 48 – 49 age group and other indicators of diversity 39 Members ( HR2 Screening on human rights among suppliers Two members of the Audit Committee, Dr. Jürg Galliker Chair- and contractors 35 – 36 man) and Dr. Andreas Jäschke, are also members of the Board of Economic metrics HR6 – 7 Measures to contribute to the elimination Directors. With Dr. Patrick Scarpelli, Partner at cctm AG in Basel, of child and forced labour 35 – 36 Index Page there is also an external specialist. All three have long-stand- PR1 Health and safety in respect of products and 42, EC1 Direct economic value generated and distributed Inside services 54 – 55, ing expertise in the fields of finance, accounting and auditing. cover 99 page, 58 EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, The Global Reporting Initiative was founded in 1997 by the or pro bono engagements 35 – 37 Coalition of Environmentally Responsible Economies (Ceres) and the United Nations Environmental Programme (UNEP). Detailed information can be found online at www.globalreporting.org.

98 99 ADDRESSES PUBLICATION DETAILS

Weleda worldwide

Switzerland Benelux Italy Sweden The Annual and Sustain- Date of publication Photos Design May 11th 2017 Portraits Anzinger und Rasp, ability Report 2016 Weleda AG Weleda Benelux SE Weleda Italia S. r. l. Weleda AB Anne Morgenstern Munich Dychweg 14 Platinastraat 161 Via del Ticino 6 Ludvigsbergsgatan 20 of the Weleda Group and Issued by André Vieira Weleda AG Joe Wigdahl Printed by 4144 Arlesheim 2718 SR Zoetermeer 20153 Milano 11823 Stockholm Weleda AG is available Switzerland Netherlands Italy Sweden Dychweg 14 Board of Directors Druckerei Lokay e. K. Tel. +41 61 705 21 21 Tel. +31 79 363 13 13 Tel. +39 02 487 70 51 Tel. +46 85 515 18 00 in English and German. The 4144 Arlesheim Anne Morgenstern Königsberger Str. 3 Switzerland Executive Board 64354 Reinheim www.weleda.ch www.weleda.nl www.weleda.it www.weleda.se German version is binding. www.weleda.com www.weleda.be www.weleda.com Michael Peuckert Report Paper Editors David Broglin Cover and insert Weleda Trademark Weleda AG produces its Dychweg 14 Japan United Kingdom Frédéric Anklin Irmin Eitel Vivus 89, 100 % recycled 4144 Arlesheim Brazil Annual and Sustainability Christian von Arnim Louisa Feiter from waste paper Weleda Japan Co., Ltd. Weleda UK Ltd Switzerland Holger Biller Fotolia, arek0michalak Inner section Weleda do Brasil Laboratório Ebisu IS building 4 F Heanor Road Report on a yearly basis. Tel. +41 61 705 20 50 Michael Brenner Maria Claudia Grangeiro Circle matt white e Farmácia Ltda. 13–6, Ebisu 1, Shibuya-ku Ilkeston The last report produced Martin Cadosch Aleydis Haubrich FSC-certified Rua Brigadeiro Henrique Tokyo 150-0013 Derbyshire Rebekka Dubach Anja Kerth Der Blaue Engel certification Fontenelle 33 Japan DE7 8DR was the Annual and Sus- Anette Engel Klinik Arlesheim Archiv RAL-ZU 14 Germany Parque São Domingos Tel. +81 52232 1165 United Kingdom tainability Report 2015 of Birgit Frank Rene Koster EU Ecolabel CEP 05125000 www.weleda.jp Tel. +44 11 5944 8222 Andrea Freund Sabine Meichsner 100 % recycled paper Weleda AG São Paulo www.weleda.co.uk the Weleda Group and Charlotte Gollnick Yanaí Mendes Möhlerstr. 3–5 Brazil Weleda AG. (project management) Darius Misztal Contact for questions 73525 Schwäbisch Gmünd Tel. +55 11 3648 8388 New Zealand Dr. Isabella Heidinger Manuel Nädele regarding the report Germany www.weleda.com.br Marcel Locher Clara Neumann Theo Stepp Tel. +49 7171 91 90 USA Weleda (NZ) Ltd Susi Lotz (project management) Offcut Corporate Communications www.weleda.de 302 Te Mata Road Weleda North America Annette Piperidis Tobias Pastyrik Tel. +49 7171 919 -178 Chile P. O. Box 8132 (Weleda Inc.) Bas Schneiders Angelika Salomon Email: [email protected] Havelock North 4157 1 Bridge Street Theo Stepp (editorial Bas Schneiders Argentina Weleda Chile SpA New Zealand Suite 42 responsibility) Sonja M. Thiele Art. no. 00085513 (CH) Evaristo Lillo 78, Of. 41 Tel. +64 6 872 87 00 Irvington Sonja M. Thiele (picture editor) Weleda Archiv Art. no. 50222400 (D) Weleda S. A. Las Condes www.weleda.co.nz NY 10533 Bettina Wyciok Natalya Yarmolenko Ramallo 2566 Santiago de Chile USA C1429DUR Buenos Aires Chile Tel. +1 800 241 1030 Proofreading Cover Argentina Tel. +56 02 240 2700 www.usa.weleda.com Claudia Marolf Designed by the children Tel. +54 11 4704 4700 www.weleda.cl Russia of the Weleda Day Care Facility www.weleda.com.ar in Schwäbisch Gmünd Weleda East LLC Bolshaya Polyanka 7/10 str. 3 Illustration Czech Republic 119180 Moscow Ini Neumann Australia Russia Weleda spol. s. r. o. Tel. +7 495 545 4285 Weleda Australia Pty Ltd Lidickà 336 / 28 www.weleda.ru Unit 2 92A Mona Vale Road 150 00 Prague 5 Warriewood 2102 Czech Republic (Access via Daydream Street) Tel. +420 25 731 58 88 Australia www.weleda.cz Slovakia Tel. +61 2 9997 5171 Weleda spol. s. r. o. www.weleda.com.au organizačná zložka France (branch of Weleda Czech Republic) M. Schneidera-Trnavského 6 Austria Weleda France S. A. 84101 Bratislava 9, rue Eugène Jung Slovak Republic Weleda Ges. m. b. H & Co. KG CS 20152 – Tel. +421 905 815 829 Hosnedlgasse 27 68331 Huningue Cedex www.weleda.sk 1220 Vienna France Austria Tel. +33 38 969 68 00 Tel. +43 1256 60 60 www.weleda.fr www.weleda.at Spain

Weleda S. A. U. Calle Manuel Tovar 1 28034 Madrid Spain Tel. +34 91 358 03 58 www.weleda.es

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