AnnuAl report 2010 of the galenica group and galenica ltd. the galenica group – excellence in the healthcare market WorldReginfo - 721ec6b0-7b53-4102-a5be-2ebe7d5b34aa GB_10_Bericht_Titelbogen.indd 1 07.03.11 16:24 VISuAl ConCept age, but also the belief in a future that it is worthwhile investing in today. galenica is convinced that the founda- tions for future success have to be laid in the present. Investing in the future _investing in the future is also a key strategy for survival _no one can predict the future with certainty. even if we in nature. the animal world has various strategies for sometimes wished we could. however, not knowing what dealing with the future and its uncertainties, be these the future holds does not mean passively surrendering to specific mating habits, a sophisticated form of brood one’s fate. galenica believes that it has much in common rearing, or behaviours that simply improve the chances of with the author and pilot antoine de Saint-exupéry on this surviving in an inhospitable environment. this year’s an- point; in the Wisdom of the Sands (citadelle), he wrote: nual report focuses on examples of how animals are in- «Your task is not to foresee the future, but to enable it.» vesting in the present for the future. the images and as- sociated stories give a brief insight into nature’s recipe _experience and expertise enable you to recognise cer- for success. investing in the future, a strategy that has tain trends early on, and draw the appropriate conclu- proven itself over millions of years for nature – and over sions. galenica has proven emphatically in recent years many for galenica as well. that it has this ability. how else would the company have been able to develop from a Swiss pharmaceutical whole- _the galenica group employs around 750 trainees. By saler into the highly specialised international pharmaceu- committing to the training of young people and support- tical company it is today? ing them on their learning path, a company is also invest- ing in the future. With the portraits of young and aspiring _the vision and determination to consistently pursue and professionals, the report illustrates the importance ga- implement this approach are what have made galenica so lenica attaches to the younger generation. successful. this does not only require caution and cour- Securing the future with the right tool _hummingbirds are the smallest birds in existence. in addition to their impressive flying skills and superb shimmering plumage, they have a very striking bill. it varies in shape and length and is often typical for a species. like a key in a lock, each shape of bill fits a specific flower. evolution has thus ensured that hummingbirds do not compete with one another for food, and that each has its own ecological niche. WorldReginfo - 721ec6b0-7b53-4102-a5be-2ebe7d5b34aa GB_10_Bericht_Titelbogen.indd 2 07.03.11 16:24 ContentS AnnuAl report 2010 FInAnCIAl StAtementS 2010 2 _key figures overview Galenica Group 5 _galenica 2010 in brief 91 _key figures 9 _Foreword 92 _consolidated income statement 12 _Vision, values and strategy 93 _consolidated statement of comprehensive income 94 _consolidated statement of financial position reporting 95 _consolidated statement of cash flows 17 _pharma 96 _consolidated statement of changes in equity 29 _logistics 97 _ notes to the consolidated financial statements 35 _retail of the galenica group 43 _other: healthcare information 143 _ report of the statuary auditor on the consolidated financial statements of the galenica group 47 _political environment 50 _corporate governance Galenica ltd. 71 _Sustainability and social responsibility 146 _income statement of galenica ltd. 83 _human resources 147 _Statement of financial position of galenica ltd. 148 _annex to the financial statements of galenica ltd. 153 _ report of the statutory auditor on the financial statements of galenica ltd. Annex 155 _glossary 160 _picture credits and explanatory notes c _ addresses of companies in the galenica group c _masthead galenica annual report 2010 _1 WorldReginfo - 721ec6b0-7b53-4102-a5be-2ebe7d5b34aa GB_10_Bericht_Titelbogen.indd 1 07.03.11 16:24 Key figures OVerVieW in million CHF 2010 2009 galenica group Net sales 3,104.3 2,911.2 _Pharma 578.5 444.7 _Logistics 2,015.0 2,062.3 _Retail 1,089.5 837.7 _Other: HealthCare Information 49.0 43.0 eBiTDA1) 444.9 399.7 EBITDA in % of net sales1) 14.3% 13.7% eBiT1) 324.8 264.9 _Pharma1) 251.7 208.6 _Logistics 27.1 10.6 _Retail 50.9 41.8 _Other: HealthCare Information 7.2 2.2 EBIT in % of net sales1) 10.5% 9.1 % Net profit1) 232.1 209.5 Investment in property, plant and equipment and intangible assets 71.2 70.3 Cash flow from operating activities 336.7 365.3 Cash at 31 December 291.9 66.5 Employees at 31 December (FTE) 5,535 5,373 Balance sheet total1) 3,001.4 2,895.3 Shareholders’ equity1) 925.3 754.3 Equity ratio1) 30.8% 26.1% Net borrowings 947.6 1,223.4 Gearing 102.4% 162.2% galenica Ltd. Profit for the year 52.6 46.2 Shareholders’ equity 340.3 336.4 1) Previous year adjusted due to a definitive purchase price allocation (see page 112) 2_ Key figures overview · Galenica annual report 2010 WorldReginfo - 721ec6b0-7b53-4102-a5be-2ebe7d5b34aa GB_10_Bericht_Titelbogen.indd 2 08.03.11 12:56 net sales eBIt net proFIt in million chF in million chF in million chF 3’1043,104 324.8 2,9112’911 2,7042’704 232.1 2,5292’529 264.9 263.2 209.5 189.2 2’1522,152 2’0892,089 134.9 154.1 103.7 111.6 101.8 80.1 05 06 07 08 09 10 05 06 07 08 09 10 05 06 07 08 09 10 net sales net sales number of employees by business sector by region pharma chF 578.5 million Switzerland chF 3,363.8 million galenica ltd. 40 logistics chF 2,015.0 million europe chF 267.0 million pharma 1,487 retail chF 1,089.5 million america chF 122.6 million logistics 1,060 other: hci chF 49.0 million other countries chF 87.0 million retail 3,848 (galenica group chF 3,104.3 million) (galenica group chF 3,104.3 million) other: hci 199 (galenica group 6,634) eBItDA eBIt Investments by business sector by business sector by business sector pharma chF 331.8 million pharma chF 251.7 million pharma chF 37.2 million logistics chF 42.5 million logistics chF 27.1 million logistics chF 10.5 million retail chF 70.6 million retail chF 50.9 million retail chF 23.8 million other: hci chF 12.4 million other: hci chF 7.2 million other: hci chF 2.9 million (galenica group chF 444.9 million) (galenica group chF 324.8 million) (galenica group chF 71.2 million) galenica annual report 2010 · Key figures overview _3 WorldReginfo - 721ec6b0-7b53-4102-a5be-2ebe7d5b34aa GB_10_Bericht_Titelbogen.indd 3 07.03.11 16:24 Share price performance 1995–2010 _change in chF at the end of each quarter in chF 600 500 300 300 200 100 0 Sept. 95 Dec. 96 Dec. 97 Dec. 98 Dec. 99 Dec. 00 Dec. 01 Dec. 02 Dec. 03 Dec. 04 Dec. 05 Dec. 06 Dec. 07 Dec. 08 Dec. 09 Dec. 10 Share price performance 1995–2010 _change in percentages at the end of each quarter in % 1’600 1’400 1’200 1’000 800 600 400 200 0 Sept. 95 Dec. 96 Dec. 97 Dec. 98 Dec. 99 Dec. 00 Dec. 01 Dec. 02 Dec. 03 Dec. 04 Dec. 05 Dec. 06 Dec. 07 Dec. 08 Dec. 09 Dec. 10 cumulative growth: 1,368% galenica average growth rate p.a.: 21% Swiss performance index (Spi) total shareholder return p.a.: 23% in chF 2010 2009 Share information nominal value per share at 31 December 0.10 0.10 number of outstanding shares1) 6,487,193 6,476,470 Share price at 31 December 565.00 375.00 highest share price for the year 579.00 396.00 lowest share price for the year 364.50 300.00 earnings per share2) 35.51 32.32 Shareholders’ equity per share2) 142.64 116.46 gross dividend per share 8.003) 7.50 pay-out ratio2) 4) 22.3% 23.2% Stock exchange capitalisation at 31 December in thousand chF 3,661,349 2,432,721 1) number of shares after deduction of the number of own, average weighted shares 2) previous year adjusted due to a definitive purchase price allocation (see page 112) 3) according to Board of Directors’ proposal to general meeting on 5 may 2011 4) Dividend in percentages of net profit 4_ Key figures overview · galenica annual report 2010 WorldReginfo - 721ec6b0-7b53-4102-a5be-2ebe7d5b34aa GB_10_Bericht_Titelbogen.indd 4 07.03.11 16:24 Galenica 2010 in brief ViSiOn and ValueS Galenica GrOuP _Galenica is a diversified and highly competent group in Strategy: focus on two strategic axes the healthcare market. With its business activities, Ga- _Specialty Pharma: The central element of the Specialty Pharma lenica generates long-term value and benefits for its cus- strategic axis is the fully integrated, specialised pharma group Vifor Pharma. Vifor Pharma researches, develops and produces its own tomers, patients, business partners, employees and share- and in-licensed pharmaceutical products and markets them world- holders. In pursuing its goals, the Galenica Group is guided wide, concentrating on three main business areas: iron deficiency by the following values: a long-term orientation, innova- and iron deficiency anaemia, the activities of the pharmaceutical tion, focus on success, flexibility and sustainability.