Amber, living with psoriasis INTEGRATED ANNUAL REPORT 2020 ADAPTING FOR BETTER CARE INTEGRATED ANNUAL REPORT 2020 ADAPTING FOR BETTER CARE Welcome to our Integrated Annual Report 2020! Our Integrated Annual Report 2020 – Adapting for Better Care – aims to provide all interested stakeholders with the best pos- sible information on how UCB is creating value for patients with severe diseases and about how we care for our employees, for communities, and for our planet, now and into the future. About this report This Integrated Annual Report 2020 includes the management report in accordance with article 12 of the Royal Decree of 14 November 2007 relating to the obligations of issuers of finan- cial instruments admitted to trading on a regulated market. All information required to be included in such management report pursuant to articles 3:6 and 3:32 of the Belgian Code of Com- panies and Associations (i.e. Corporate Governance Statement – Remuneration Report included -, Business Performance Review and UCB’s Statement on extra-financial1 information) is reported throughout all different sections of this Integrated Annual Re- port. This Integrated Annual Report together with the materiality assessment have been prepared in accordance with the Global Reporting Standards core option and extra-financial information is audited by a third party. 1 ‘Extra-financial’ is the term used by UCB for information commonly referred to as ‘non-financial’. UCB | Integrated Annual Report 2020 3 Index Key Figures 6 UCB At a Glance 8 Letter to our stakeholders 11 Our purpose 16 Who we are 17 Where we are 18 How we work 20 Our ambition for patients 20 Sustainability is our business approach 22 Digital business transformation 25 Highlights 26 Our performance 27 Caring for Patients 28 Caring through COVID-19 31 Innovating for patients with severe diseases 33 Disease areas and solutions 36 Providing access to our solutions 40 Collaborating for better care 43 Caring for our People 48 Stronger together, stronger than ever 51 Evolving our ways of working 54 Health, safety and wellbeing 56 Diversity, equity and inclusion 59 Learning and development 62 Caring for Communities 66 Local COVID-19 response initiatives 70 Global COVID-19 collaborations 71 Launch of the UCB Community Health Fund 72 Improving epilepsy care in Africa and Asia 74 Caring for the Planet 78 Pathway to 2030 82 Progress on our Green Goals 83 Carbon neutral by 2030 84 Reducing our water withdrawal 85 Reducing our waste generation 86 Employee engagement 86 4 Our Governance 88 Financials 160 1. Business conduct 91 1. Business performance review 162 1.1 Responsible Business Conduct 91 2. Consolidated financial statements 178 1.2 Anti-Bribery and Anti-Corruption (ABAC) 91 3. Notes to the consolidated financial statements 184 1.3 Human rights 92 4. Responsibility statement 263 1.4. Promoting and embracing ethical behaviors 92 5. Statutory auditor’s report 264 1.5 Product responsibility 92 6. Abbreviated statutory financial statements of UCB SA 272 1.6 Patient and drug safety 93 2. Risk management 94 Data and reporting 276 2.1 Our approach to risk management 94 People data 278 2.2 Process and framework 94 Environmental data 283 2.3 Top risks in 2020 95 GRI Standards 286 2.4 Environmental and social risks 97 Independent limited assurance report 3. Corporate Governance Statement 100 on the UCB integrated report 2020 296 3.1 Scope of reporting 100 Glossary of terms 298 3.2 Capital and shares 100 Forward Looking Statement Integrated Annual Report 300 3.3 Shareholders and shareholders structure 102 Report language 301 3.4 Board of Directors and Board committees 105 Availability of the Integrated 301 3.5 Executive Committee 115 Annual Report 301 3.6 Diversity at Board and Executive Committee level 120 Financial calendar 301 3.7 Remuneration Report 124 Contact 301 3.8 Main features of the internal control and risk management systems of UCB 149 3.9 Private investment transactions and trading in UCB shares 150 3.10 External audit 151 3.11 Information requested under article 34 of the Royal Decree of November 14, 2007 152 3.12 Conflicts of interest – Application of article 7:96 of the Belgian Code of Companies and Associations 157 3.13 Comply or explain principle (application of article 3:6, §2, 2° of the BCCA) 158 UCB | Integrated Annual Report 2020 5 Key Figures 5 347 12 Revenue in € million Number of assets 2019: 4 913 in pipeline 27% 29% adj. EBITDA/revenue ratio R&D/revenue ratio 2019: 29% 2019: 26% 6 8 371 -60% UCB employees Reduction in CO2 worldwide emissions 50% women / 50% men 2019: −35% UCB focused on the following UN Sustainable 3.5 million Development Goals 3.5 million patients positively impacted in 2020 UCB | Integrated Annual Report 2020 7 UCB At a Glance We aspire to give people with severe diseases the freedom to live their best lives, while also creating value for society. 8 Chapter 1 | UCB At a Glance UCB At a Glance UCB | Integrated Annual Report 2020 9 “ To me, Better Care is about acknowledging that every patient’s experience is unique.” Evelyn du Monceau, Chair of the Board Chapter 1 | UCB At a Glance Letter to our stakeholders Dear patients, colleagues, shareholders, and representatives from Underlying profitability (adjusted EBITDA) reached € 1.4 billion the communities where we work and which we serve, (+1%; -4% CER) reflecting higher investments into the future of UCB, namely product launches and product development. Core At UCB, everything we do starts with one simple question: “How Earnings per Share were € 5.36 after € 5.20 in 2019. In line with will this create value for people living with severe diseases, this performance, the Board of Directors of UCB proposes a div- now and into the future?” This has never been more important idend of € 1.27 per share (gross), +2%. than it was in 2020 – a year that reminded us all of the great things our industry can accomplish when we collaborate to tack- We continued to create value for patients, advancing our pipe- le shared, global health challenges. line of potential solutions for severe diseases, expanding our ca- pabilities by investing in state-of-the-art scientific platforms and As we look back on the past twelve months, we are both incred- medical advances, and further progress on our digital business ibly proud of the resilience, adaptability, and ongoing dedication transformation journey. Our rich development pipeline, includ- that UCB colleagues, partners, and shareholders showed in en- ing five late-stage assets, is a demonstration of our ability to con- suring that, despite the challenges created by the COVID-19 pan- tinue moving forward: demic, our commitment to patients never wavered, while our willingness to support each other and our wider communities remained a top priority. That’s why we want to open this year’s bimekizumab (IL17A/F) rozanolixizumab (FcRn) Integrated Annual Report by thanking each and every one of psoriasis myasthenia gravis you who made this possible. The achievements outlined in the psoriatic arthritis immune thrombocytopenia following pages – whether they be for people living with severe axial spondyloarthritis diseases, for our employees, for communities, or for the planet hidradenitis suppurativa dapirolizumab pegol (CD40L) – would not have been possible without you. systemic lupus erythematosus zilucoplan (C5) This year’s report theme – Adapting for Better Care – captures myasthenia gravis Staccato® alprazolam the reality of a year full of disruption and uncertainty, in which IMNM1 active epileptic seizure we all learned many lessons about our industry and reflected on the role UCB can play in the wider world. We have thought a lot about how we at UCB can be better health innovators, better business leaders, and better colleagues. And most importantly, 2020 also saw several key highlights in terms of future growth we realized that we can – and should – adapt and reinvent how and launches: we work in many different aspects, in order to seize new oppor- tunities for future value creation. • Cimzia® (certolizumab pegol) was approved by the Japane- se health authorities for the treatment of plaque psoriasis, What we achieved psoriatic arthritis, pustular psoriasis and psoriatic erythroder- 2020 saw people already living with the complexities of se- ma for which existing treatment methods are not sufficient- vere diseases facing more challenges than ever before, includ- ly effective. This makes Cimzia® the first Fc-free, PEGylated ing worries around access to care and economic challenges. anti-TNF treatment option now available for these patients Throughout the pandemic, UCB remained focused on reassur- in Japan. ing patients’ concerns and providing new sources of support, • We received new approvals for Vimpat® (lacosamide) in the while still delivering the solutions they needed in a timely and U.S., Europe and Japan as adjunctive therapy in the treat- uninterrupted manner. This allowed us to positively impact over ment of primary generalized tonic-clonic seizures (PGTCS) 3.5 million patients’ lives in 2020. in patients four years of age and older. • Our Phase 3b study BE RADIANT, comparing bimekizumab Despite the challenges created by COVID-19, UCB continued to to secukinumab for the treatment of adults with modera- grow our business in 2020, achieving a strong financial perfor- te-to-severe plaque psoriasis met its primary and all secon- mance. 2020 revenue reached € 5.3 billion (+9%; +8% at CER) dary end points, showing superiority to secukinumab. and net sales went up by 8% to € 5.1 billion (+7% CER), driven by • The U.S. Food and Drug Administration (FDA) and European the sustained growth of UCB’s key products. Medicines Agency (EMA) accepted marketing application submissions for bimekizumab for the treatment of adults with moderate-to-severe plaque psoriasis.