Notes to the financial statements of Galenica Ltd.
Galenica Ltd.
Galenica Ltd., a Swiss company limited by shares with registered office at Untermattweg 8, 3027 Bern, Switzerland. Shares in Galenica are traded on the SIX Swiss Exchange under securities no. 36067446 (ISIN CH0360674466). Galenica Ltd. is the parent company of the Galenica Group with the main activity of managing its investments.
With the changed organisational and management structure of Galenica valid as at 1 January 2021, Galenica centralised its Corporate functions such as Finance, Human Resources, Legal & Board Services, Communications and Transformation as well as the internal IT Services on 1 July 2021. The transfer of these business activities from other Group companies to Galenica Ltd. also resulted in a transfer of employees as well as related assets and liabilities.
The financial statements 2020 have not been restated to the changed organisational and management structure. A «like-for-like» comparison with the previous year's period is therefore not possible.
Principles
The financial statements of Galenica Ltd. have been prepared in accordance with Article 957 et seqq. of Title 32 of the Accounting law based on the Swiss Code of Obligations (CO). Where not prescribed by law, the significant accounting and valuation principles applied are described below.
Financial income
Financial income includes a non-taxable gain of CHF 109.5 million due to the merger with GaleniCare Holding Ltd. and the reversal of a bad debt allowance on non-current intercompany loans of CHF 30.0 million (previous year: CHF 15.0 million).
Other income
Other income includes group-internal management fees of CHF 34.6 million (previous year: CHF 18.3 million) and IT services of CHF 28.4 million (previous year: none). Revenue is recognised when the service is provided.
Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment. Depreciation is charged on a straight-line basis over the assets' useful lives.
Property, plant and equipment
|
in thousand CHF |
2021 |
2020 |
|
Furniture, fittings |
35 |
– |
|
IT equipment |
11,305 |
– |
|
Vehicles |
679 |
– |
|
Total net carrying amount |
12,019 |
– |
Intangible assets
Intangible assets include purchased or internally developed software. These items are measured at cost less accumulated amortisation and impairment. Amortisation is charged on a straight-line basis over the estimated economic useful life.
Financial assets
Financial assets include non-current loans to Group companies of CHF 74.7 million (previous year: CHF 268.4 million) and joint ventures of CHF 4.9 million (previous year: none).
Investments
An overview of the investments that are directly or indirectly controlled by Galenica Ltd. is provided in note 31 to the consolidated financial statements 2021 of the Galenica Group.
Non-current interest-bearing liabilities
The non-current interest-bearing liabilities are recognised at nominal value.
Non-current interest-bearing liabilities
|
in thousand CHF |
2021 |
2020 |
|
Bond 0.5 % (15 June 2017–15 June 2023) ISIN CH0367206692 |
200,000 |
200,000 |
|
Bond 1.0 % (15 June 2017–15 December 2026) ISIN CH0367206700 |
180,000 |
180,000 |
|
Non-current interest-bearing liabilities |
380,000 |
380,000 |
Lease obligations
The lease obligations, which do not expire or cannot be terminated within 12 months, have the following maturity structure. These amounts include the payments owed from rental and leasing agreements up to the end of the contract or the expiry of the notice period.
Lease obligations
|
in thousand CHF |
2021 |
2020 |
|
Within 1 year |
1,200 |
– |
|
In 2 to 5 years |
1,200 |
– |
|
In more than 5 years |
27,428 |
– |
|
Total |
29,828 |
– |
Share capital
As at 31 December 2021, the share capital of Galenica amounted to CHF 5,000,000, divided into 50,000,000 fully paid-up and publicly listed shares with nominal value of CHF 0.10 each.
Authorised capital
As at 31 December 2021, Galenica Ltd. has no authorised capital according to Article 3a) of the Articles of Association. The Board of Directors has been authorised to increase the share capital of CHF 5,000,000 by a maximum of CHF 500,000 at any time up to and including 2 May 2021 by issuing not more than 5,000,000 fully paid shares.
Reserves from capital contributions
The reserves from capital contributions have been reduced to CHF 307.0 million (previous year: CHF 351.6 million) due to the dividend paid out to the shareholders on 19 May 2021 taken from the reserves from capital contributions in the amount of CHF 44.6 million (previous year: CHF 44.5 million).
Release of hidden reserves
In 2021, hidden reserves of CHF 30.0 million were released (previous year: CHF 17.5 million).
Contingent liabilities
As at 31 December 2021, total contingent liabilities amounted to CHF 325.8 million (previous year: CHF 788.5 million), including issued guarantees to Group companies of CHF 195.6 million (previous year: CHF 658.5 million) as well as CHF 130.0 million (previous year: CHF 130.0 million) for guarantees to secure intraday transactions for Group companies in connection with the zero balance cash pooling.
Full-time equivalents
The average number of full-time equivalents for the reporting period amounted to 218 (previous year: 36).
Treasury shares
Galenica shares owned by subsidiaries:
Treasury shares
|
|
|
2021 |
|
2020 |
|
|
Number |
in CHF |
Number |
in CHF |
|
1 January |
501,440 |
|
660,850 |
|
|
1st quarter |
|
|
|
|
|
– Bought |
392 |
23,223 |
396 |
24,927 |
|
– Sold |
–41,676 |
–2,436,140 |
–57,734 |
–3,617,429 |
|
2nd quarter |
|
|
|
|
|
– Bought |
1,584 |
100,175 |
500 |
34,238 |
|
– Sold |
–18,087 |
–1,061,888 |
–28,090 |
–1,687,366 |
|
3rd quarter |
|
|
|
|
|
– Bought |
1,415 |
98,068 |
780 |
52,283 |
|
– Sold |
–85,856 |
–5,740,332 |
–76,470 |
–5,288,665 |
|
4th quarter |
|
|
|
|
|
– Bought |
2,291 |
151,210 |
1,208 |
71,573 |
|
– Sold |
– |
– |
– |
– |
|
31 December |
361,503 |
|
501,440 |
|
The treasury shares are reserved for share-based payments to employees.
Major shareholders
According to the Galenica Share Register, shareholders who owned 3% or more of the Company's capital shown in the table below. No other shareholder has announced a crossing of the 3% threshold of shares.
Major shareholders
|
|
|
31.12.2021 |
|
31.12.2020 |
|
|
Number of shares |
% of share capital |
Number of shares |
% of share capital |
|
UBS Fund Management (Switzerland) AG, Switzerland |
2,671,158 |
5.3 |
2,671,158 |
5.3 |
|
Alecta Pensionsförsäkring, Sweden |
2,000,000 |
4.0 |
2,000,000 |
4.0 |
|
Credit Suisse Funds AG, Switzerland |
1,626,752 |
3.3 |
1,626,752 |
3.3 |
|
Swisscanto Fondsleitung AG, Switzerland |
1,533,324 |
3.1 |
– |
– |
|
BlackRock, Inc., USA |
– |
– |
1,408,808 1) |
3.1 |
|
Norges Bank (Central Bank of Norway), Norway |
– |
– |
1,515,199 |
3.0 |
|
Rudolf Maag, Switzerland |
– |
– |
1,500,000 |
3.0 |
1) Options not considered
Shareholdings of the members of the Board of Directors and the members of the Corporate Executive Committee
Shareholdings of the members of the Board of Directors
Shareholdings of the members of the Board of Directors
|
Number of shares |
Held as at 31.12.2021 |
Shares allocated for 2021 |
Held as at 31.12.2020 |
Shares allocated for 2020 |
|
Daniela Bosshardt |
22,131 |
3,564 |
14,185 |
7,946 |
|
Pascale Bruderer |
1,703 |
1,260 |
– |
1,703 |
|
Michel Burnier |
8,265 |
1,222 |
6,903 |
1,362 |
|
Fritz Hirsbrunner |
– |
– |
– |
1,362 |
|
Bertrand Jungo |
4,964 |
3,284 |
2,963 |
2,001 |
|
Markus R. Neuhaus |
7,416 |
1,668 |
3,812 |
3,604 |
|
Philippe Nussbaumer |
– |
916 |
10,269 |
2,724 |
|
Andreas Walde |
11,982 |
1,527 |
10,279 |
1,703 |
|
Shares of the members of the Board of Directors |
56,461 |
13,441 |
48,411 |
22,405 |
Shares held by related parties to members of the Board of Directors are included in the declaration of the number of shares they hold.
Shareholdings of the members of the Corporate Executive Committee
Shareholdings of the members of the Corporate Executive Committee
|
Number of shares |
Held as at 31.12.2021 |
Held as at 31.12.2020 |
|
Marc Werner |
1,390 |
80 |
|
Felix Burkhard |
14,674 |
16,287 |
|
Andreas Koch |
2,719 |
1,690 |
|
Daniele Madonna |
8,325 |
6,328 |
|
Virginie Pache Jeschka |
1,072 |
– |
|
Thomas Szuran |
2,315 |
1,375 |
Shares held by related parties to members of the Corporate Executive Committee are included in the disclosed numbers.
Information relating to the number and value of participations rights of the members of the Board of Directors and the members of the Corporate Executive Committee are disclosed in the Remuneration Report.
In 2021, 11,880 performance share units (previous year: 10,201 performance share units) with fair value at grant date of CHF 621,300 (previous year: CHF 699,768) have been allocated to the members of the Corporate Executive Committee. In 2021, 5,188 performance share units (previous year: 1,807 performance share units) with fair value at grant date of CHF 271,327 (previous year: CHF 123,988) have been allocated to other employees of Galenica Ltd.
Shareholders' equity
Shareholders' equity developed as follows:
Shareholders' equity
|
in thousand CHF |
Share capital |
Reserves from capital contributions |
General legal retained earnings |
Reserves for treasury shares 1) |
Free reserve |
Available earnings |
Shareholders' equity |
|
Balance as at 31 December 2019 |
5,000 |
396,094 |
1,000 |
22,000 |
76,000 |
61,514 |
561,608 |
|
Allocation to free reserve |
|
|
|
|
16,000 |
–16,000 |
– |
|
Adjustment to the reserves for treasury shares |
|
|
|
–10,400 |
10,400 |
|
– |
|
Dividends |
|
–44,482 |
|
|
|
–44,482 |
–88,964 |
|
Profit for the year |
|
|
|
|
|
76,208 |
76,208 |
|
Balance as at 31 December 2020 |
5,000 |
351,612 |
1,000 |
11,600 |
102,400 |
77,240 |
548,852 |
|
Allocation to free reserve |
|
|
|
|
32,000 |
–32,000 |
– |
|
Adjustment to the reserves for treasury shares |
|
|
|
–8,600 |
8,600 |
|
– |
|
Dividends |
|
–44,602 |
|
|
|
–44,602 |
–89,204 |
|
Profit for the year |
|
|
|
|
|
228,676 |
228,676 |
|
Balance as at 31 December 2021 |
5,000 |
307,010 |
1,000 |
3,000 |
143,000 |
229,314 |
688,324 |
1) Owned by subsidiaries
Proposal of the Board of Directors for the appropriation of available earnings and reserves from capital contributions
At the Annual General Meeting as at 11 May 2022, the Board of Directors will propose the following allocation of available earnings and reserves from capital contributions:
|
in CHF |
2021 |
2020 |
|
Appropriation of available earnings |
|
|
|
Balance brought forward |
638,387 |
1,032,257 |
|
Profit for the year |
228,676,151 |
76,207,951 |
|
Available earnings at the disposal of the Annual General Meeting |
229,314,538 |
77,240,208 |
|
Dividend per share CHF 1.05 (2020: CHF 0.90) |
-52,500,000 1) |
–44,601,821 |
|
Allocation to free reserve |
–176,000,000 |
–32,000,000 |
|
Balance to be carried forward |
814,538 |
638,387 |
|
|
|
|
|
Appropriation of reserves from capital contributions |
|
|
|
Reserves from capital contributions |
307,010,206 |
351,612,027 |
|
Dividend per share CHF 1.05 (2020: CHF 0.90) paid out of reserves from capital contributions |
-52,500,000 1) |
–44,601,821 |
|
Balance to be carried forward |
254,510,206 |
307,010,206 |
1) The proposed dividend payment and appropriation of reserves from capital contributions covers all issued shares. However, no dividend will be paid on treasury shares. As a result, the total dividend amount payable depends on the number of treasury shares held on the distribution date. Based on the number of treasury shares held as at 31 December 2021, the total dividend would amount to CHF 104.2 million
The Board of Directors proposes to issue a dividend for fiscal year 2021 of CHF 2.10 per registered share. For this purpose, CHF 1.05 is to be taken from the reserves from capital contributions and CHF 1.05 from retained earnings. On the part taken from the reserves from capital contributions, the dividend can be distributed without deduction of Swiss withholding tax of 35%. Natural persons living in Switzerland are not liable for income tax on the dividend paid from the reserves from capital contributions.
Assuming the Annual General Meeting approves the dividend, payments will be made on 17 May 2022.