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Notes to the consolidated financial statements of the Galenica Group

1. Group organisation

1. Group organisation

General information

Galenica is a fully-integrated healthcare service provider in Switzerland. Galenica operates a network of pharmacies, develops and offers own brands and products, exclusive brands and products from business partners as well as a variety of on-site health services and tests for customers. Galenica is also a provider of pre-wholesale and wholesale distribution and database ­services in the Swiss healthcare market.

The parent company is Galenica Ltd., a Swiss company limited by shares with its headquarters in Bern. The registered office is at Untermattweg 8, 3027 Bern, Switzerland. Shares in Galenica Ltd. are traded on the SIX Swiss Exchange under ­securities no. 36067446 (ISIN CH0360674466).

The Board of Directors released the consolidated financial statements 2022 for publication on 2 March 2023. The 2022 consolidated financial statements will be submitted for approval to the Annual General Meeting on 3 May 2023.


2. Accounting principles

2. Accounting principles

Basis of preparation

The consolidated financial statements of Galenica have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standard Board (IASB), as well as the interpretations of the IFRS Interpretations Committee (IFRIC) and the provisions of Swiss law.

The consolidated financial statements are based on the financial statements of the individual companies of Galenica, ­prepared in accordance with uniform accounting principles. The reporting period comprises twelve months to 31 December.

The consolidated financial statements have been presented on a historical cost basis. Non-monetary assets are measured at the lower of cost and net realisable value or recoverable amount. Certain financial assets and financial liabilities are measured at fair value in the statement of financial position. Detailed disclosures on measurement are provided in the accounting principles. 

Galenica's consolidated financial statements are prepared in Swiss francs (CHF) and, unless otherwise indicated, figures are rounded to the nearest CHF 1,000.

Due to rounding, numbers presented throughout this report may not add up precisely to the totals provided. Totals are calculated using the underlying amount rather than the presented rounded number.

Foreign currencies are not material for the consolidated financial statements.

Restatement 2021 due to adjustments to provisional purchase price allocation

The purchase price allocation for the acquisition of Spagyros Ltd. was determined provisionally at the end of 2021 and has now been finalised. The fair value measurement leads to a decrease of property, plant and equipment based on the final external valuation in the amount of CHF 0.7 million and deferred tax liabilities in the amount of CHF 0.1 million. This adjustment leads to an increase in goodwill in the amount of CHF 0.6 million. The figures for the previous year were adjusted for the purpose of comparison. 

Classification as current or non-current

Assets which are realised or consumed within one year or in the normal course of business are classified as current assets. All other assets are classified as non-current assets.

All liabilities which Galenica expects to settle in the normal course of business or which fall due within one year after the reporting date are classified as current liabilities. All other liabilities are classified as non-current liabilities.

Estimation uncertainty, assumptions and judgments

The preparation of the Group's consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expense, and the disclosure of contingent liabilities as at the reporting date. Although these estimates and assumptions are made on the basis of all available information and with the greatest of care, the actual results may differ. This applies primarily to estimates and assumptions made with regard to the items set out below.

Leases (note 15)

IFRS 16 defines the lease term as the non-cancellable period of a lease together with the options to extend or terminate a lease, if the lessee is reasonably certain to exercise that option. Where a lease includes the option for the Group to extend the lease term, Galenica applies judgment in assessing whether it is reasonably certain that the option will be exercised. This will take into account the length of the time remaining before the option is exercisable, current trading, future trading forecasts as to the ongoing profitability of the point of sale and the level and type of planned future capital investment. A reassessment of the remaining life of the lease could result in a recalculation of the lease liability and a material adjustment to the associated balances.

Goodwill and intangible assets (note 16)

Goodwill and other intangible assets with an indefinite useful life are tested for impairment at least once a year. This involves estimating the value in use of the cash-generating unit (CGU) or group of CGUs to which the goodwill is allocated. It also requires a forecast of expected future cash flows as well as the application of an appropriate discount rate to calculate the present value of these cash flows.

Employee benefit plans and other non-current employee benefits (note 23)

The costs of the employee benefit plans and other long-term employee benefits are determined using actuarial valuations. These valuations involve making assumptions about the discount rate, future salary and pension developments, mortality and the employee turnover rate. Galenica considers the discount rate, the selection of mortality tables and the development of salaries to be key assumptions.

Fair value of contingent consideration liabilities from business combinations (note 25)

Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial liability, it is subsequently remeasured to fair value at each reporting date. The determination of the fair value is based on discounted cash flows. The key assumptions take into consideration the probability of meeting each performance target and the discount rate.

Scope of consolidation

The consolidated financial statements of Galenica comprise those of Galenica Ltd. and all its subsidiaries, including asso­ciate companies and joint ventures.

Subsidiaries, associates and joint ventures acquired during the reporting period are included in the financial statements as at the date when control, significant influence or joint control was obtained. Companies sold during the reporting period are included up to the date when control, significant influence or joint control was lost.

Details of changes in the scope of consolidation in the reporting period are included in note 4, Business combinations.

Companies which Galenica controls have been fully consolidated. This is the case when Galenica has the ability to direct the relevant activities of a company, has rights to variable returns from its involvement with the investee and has the ability to affect those returns.

When Galenica holds less than 50% of the voting rights in a company, Galenica considers all the relevant facts and circumstances in assessing whether it has control over that company. This includes contractual arrangements with the vote holders of the investee, rights arising from other contractual arrangements and the number of voting rights and potential voting rights.

Assets and liabilities as well as income and expenses of subsidiaries are consolidated from the acquisition date, i.e. the date on which Galenica obtains control.

All intercompany receivables and payables, income and expenses, investments and dividends as well as unrealised gains and losses on transactions within Galenica are fully eliminated.

Amendments to IFRS

As at 1 January 2022 Galenica adopted the following amended International Financial Reporting Standards:

  • Amendments to IFRS 3 - Reference to the conceptual framework
  • Amendments to IAS 16 - Property, plant and equipment: Proceeds before intended use
  • Amendments to IAS 37 - Onerous Contracts - Cost of fulfilling a contract
  • Annual Improvements 2018-2020 Cycle

These changes have no or no material impact on the financial position, financial performance and cash flows of Galenica nor on disclosures in these consolidated financial statements. Galenica has not early adopted any other standard or interpretation that has been issued but is not yet effective.

Future amendments to IFRS

The IASB has issued various new and amended standards and interpretations with effective dates in the financial year 2023 or later. Galenica has not early adopted any of the following amendments to standards or interpretations that are potentially relevant for Galenica. Galenica intends to apply the new or amended standards for the first time in the financial year beginning on or after the date shown below:

  • Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of accounting policies (1 January 2023)
  • Amendments to IAS 8 – Definition of accounting estimates (1 January 2023)
  • Amendments to IAS 12 – Deferred tax related to assets and liabilities arising from a single transaction (1 January 2023)
  • Amendments to IAS 1 – Classification of liabilities as current or non-current (1 January 2024)

Galenica is currently assessing the impact of these amendments. Based on a preliminary analysis, Galenica does not expect a material impact on the consolidated financial statements.


3. Operating segment information

3. Operating segment information

The management approach is used to determine the reportable operating segments. Accordingly, external segment reporting is based on the internal organisational and management structures of Galenica and the internal financial reporting to the chief operating decision maker (CODM). The CODM of Galenica is the CEO. Galenica operates in Switzerland within two operating segments Products & Care and Logistics & IT. 

The CEO of Galenica acting as CODM allocates resources and monitors performance of the Group's operating segments Products & Care and Logistics & IT on the basis of information prepared in accordance with IFRS with exception of defined benefit plans and long-service awards, which are recognised at Group level.

In the operating segment Products & Care with its large network of pharmacies the accounting for leases is of particular importance. The Group continues to prepare information as if its leases were accounted for as operating leases (e.g. in line with Galenica's accounting policies prior to the adoption of IFRS 16). Those figures are relevant for management incentive and remuneration plans. However, Galenica has determined that the figures including the effects of IFRS 16 are used by the CODM for monitoring and resource allocation decisions and therefore presents its segment reporting as below.

The operating result (EBIT) comprises all operating income generated and expenses incurred in the corresponding segments. Financial income and expenses as well as income taxes are reported at Group level only and not allocated to the segments. The assets and liabilities include all items of the statement of financial position that can be directly or reasonably allocated to a segment.

Products & Care

The Products & Care segment comprises the «Retail» business area with offerings for patients and end customers (B2C) and the «Professionals» business area with offerings for business customers and partners in the healthcare sector (B2B).

The «Retail» business area comprises the two sectors «Local Pharmacies» (point-of-sale) and «Pharmacies at Home» (mail-order and home care). Retail operates at 531 locations Galenica's pharmacy network, the largest in Switzerland. With 368 pharmacies of its own and 163 partner pharmacies, Retail has outlets throughout the country. Galenica's own pharmacies comprise the Amavita brand with 179 branches and the Sun Store brand with 92 branches. Galenica also operates a chain of 89 pharmacies in partnership with Coop under the Coop Vitality brand. Galenica's pharmacy network also covers the speciality pharmacy Mediservice, which is focused on medication for treatment of patients at home, 7 majority interests in pharmacies and 163 Winconcept partner pharmacies.

The «Professionals» business area comprises the «Products & Brands» and «Services for Professionals» sectors. These activities focus on the development and marketing of healthcare services and products via the various sales channels: in-store at pharmacies (point-of-sale), shipments via mail-order pharmacies and e-shops or at home (home care), as well as business customers. Professionals launches and distributes a complete portfolio of consumer health products which is sold to Swiss pharmacies and drugstores. The companies of Professionals launches and distributes pharmaceutical and parapharmacutical products and offer marketing and sales services to all partners in the healthcare market.

Logistics & IT

The Logistics & IT segment comprises the two sectors «Wholesale» and «Logistics & IT Services». These provide services for all those involved in the healthcare sector – pharmacies, drugstores, doctors, hospitals and care homes, partners and suppliers. Their activities focus on optimising and further developing the logistics services and service offering as well as providing innovative solutions that promote digitalisation in the healthcare market.

Wholesale plays an important role in the pharmaceutical supply chain. As a pharmaceutical wholesaler, Wholesale ensures on-schedule delivery within short deadlines to pharmacies, drugstores, doctors, hospitals and care homes throughout Switzerland.

Logistics & IT Services offers pharmaceutical and healthcare companies a broad range of specialised pre-wholesale services, from storage and distribution of products in Switzerland to debt collection. The companies of the Logistics & IT Services also offer solutions for the healthcare market. They operate comprehensive databases that provide additional knowledge for all service providers in the Swiss healthcare market and develop management solutions tailored specifically to the needs of the healthcare market. Logistics & IT Services is the leading provider of master data systems for Switzerland's entire healthcare market and publishes printed and electronic technical information on pharmaceutical products as well as complete management solutions for pharmacies. Furthermore Logistics & IT Services provides Group internal IT services.

Group Services

The activities included within Group Services mainly comprise Galenica's central operations, which include Group Management and centralised Corporate functions such as Accounting, Controlling, Tax, Treasury, Corporate Finance, Investor Relations, Insurance, Indirect procurement, Human Resources, Legal & Board Services, Communications and Transformation.

Corporate charges management fees to the group companies for the organisational and financial management services that it provides.

Eliminations

Operating activities involve the sale of goods and services between the operating segments. 

Sale of goods and services between the operating segments and resulting unrealised gains are eliminated in the Eliminations column. In addition, Eliminations include adjustments recorded on Group level which mainly consist of costs for IAS 19 from defined benefit plans and long-service awards.

Segment assets and liabilities include loans and current accounts held with respect to other segments. These positions are eliminated in the Eliminations column.

Operating segment information 2022

Operating segment information 2022

in thousand CHF

Products & Care

Logistics & IT

Group Services

Eliminations

Galenica Group

Net sales

2,029,620

2,933,318

49,138

–997,728

4,014,348

Intersegmental net sales

–96,579

–853,674

–47,475

997,728

Net sales to third parties

1,933,041

2,079,645

1,663

4,014,348

Other income

7,156

6,265

3,123

–3,503

13,040

Share of profit from associates and joint ventures

4,255

17

–70

4,202

Earnings before interest, taxes, depreciation and amortisation (EBITDA)

223,288

80,518

1,759

-1,782 1)

303,784

Depreciation, amortisation and impairment

–67,015

–31,212

–2,541

294

–100,474

Earnings before interest and taxes (EBIT)

156,273

49,306

–782

-1,487 1)

203,310

Interest income

 

 

 

 

727

Interest expense

 

 

 

 

–5,273

Other net financial result

 

 

 

 

861

Earnings before taxes (EBT)

 

 

 

 

199,626

Income taxes

 

 

 

 

–33,767

Net profit

 

 

 

 

165,859

 

 

 

 

 

 

Assets

1,784,254

921,458

320,811

-413,699 2)

2,612,825

Investments in associates and joint ventures

33,975

82

–1,375

32,682

Liabilities

604,571

524,903

619,655

-385,765 3)

1,363,364

 

 

 

 

 

 

Investments in property, plant and equipment

14,183

24,354

2,507

41,044 4)

Investments in intangible assets

1,276

28,469

–69

29,676 5)

 

 

 

 

 

 

Employees as at 31 December (FTE)

4,104

1,399

225

5,728

1) Including the effects of IAS 19 from defined benefit plans and long-service awards of CHF -0.6 million

2) Of which elimination of intercompany positions of CHF -395.6 million and other unallocated amounts of CHF -18.1 million

3) Of which elimination of intercompany positions of CHF -395.6 million and other unallocated amounts of CHF 9.8 million

4) Of which non-cash investments of CHF 0.9 million

5) Of which non-cash investments of CHF 1.7 million

Geographic information 2022

in thousand CHF

Switzerland

Other countries

Galenica Group

Net sales to third parties

3,979,458

34,890

4,014,348

Non-current assets 1)

1,608,886

88

1,608,974

1) Without employee benefit assets, financial assets and deferred tax assets

Operating segment information 2021

Operating segment information 2021 

in thousand CHF

Products & Care

Logistics & IT

Group Services

Eliminations

Galenica Group

Net sales

1,908,130

2,831,358

31,844

–936,652

3,834,679

Intersegmental net sales

–76,323

–829,775

–30,554

936,652

Net sales to third parties

1,831,807

2,001,582

1,290

3,834,679

Other income

6,158

16,939

673

–2,689

21,082

Share of profit from associates and joint ventures

7,092

17

–343

6,765

Earnings before interest, taxes, depreciation and amortisation (EBITDA)

225,106

90,959

–1,504

-8,724 2)

305,838

Depreciation, amortisation and impairment

–68,164

–30,470

–95

299

–98,430

Earnings before interest and taxes (EBIT)

156,943

60,489

–1,600

-8,425 2)

207,408

Interest income

 

 

 

 

738

Interest expense

 

 

 

 

–5,018

Other net financial result

 

 

 

 

–95

Earnings before taxes (EBT)

 

 

 

 

203,033

Income taxes

 

 

 

 

–34,850

Net profit

 

 

 

 

168,183

 

 

 

 

 

 

Assets (restated)

1,687,729 1)

864,050

404,017

-389,994 3)

2,565,802 1)

Investments in associates and joint ventures

31,015

66

–385

30,696

Liabilities (restated)

585,459 1)

515,479

641,402

-410,215 4)

1,332,125 1)

 

 

 

 

 

 

Investments in property, plant and equipment

19,205

23,022

116

–155

42,189 5)

Investments in intangible assets

4,267

13,989

–7

18,250 6)

 

 

 

 

 

 

Employees as at 31 December (FTE)

3,927

1,395

211

5,533

1) Figures restated (refer to note 2)

2) Including the effects of IAS 19 from defined benefit plans and long-service awards of CHF -7.6 million

3) Of which elimination of intercompany positions of CHF -441.1 million and other unallocated amounts of CHF 51.1 million

4) Of which elimination of intercompany positions of CHF -441.1 million and other unallocated amounts of CHF 30.9 million

5) Of which non-cash investments of CHF 0.9 million

6) Of which non-cash investments of CHF 0.8 million

Geographic information 2021

in thousand CHF

Switzerland

Other countries

Galenica Group

Net sales to third parties

3,804,076

30,603

3,834,679

Non-current assets 1)

1,511,458

85

1,511,543

1) Without employee benefit assets, financial assets and deferred tax assets


4. Business combinations and disposals

4. Business combinations and disposals

Business combinations and disposals 2022

Acquisition of Medinform AG. On 5 July 2022, Galenica acquired 50% of the shares in the Swiss company Medinform AG and has a casting vote in the event of a disagreement, hence, Galenica has control over Medinform. Medinform is specialised in offering education and training programmes for pharmacies. The remaining 50% of the shares were retained by the previous owner. Non-controlling interests have been measured at the proportionate share of net identifiable assets. The remaining shareholders have a put option to sell their shares to Galenica which gives rise to a financial liability in the amount of CHF 3.9 million.

The purchase consideration amounted to CHF 4.4 million and was fully settled in cash. The fair value of the net identifiable assets amounted to CHF 2.8 million at the acquisition date of which CHF 1.4 million were recognised as non-controlling interests. The goodwill of CHF 3.0 million was allocated to the operating segment Products & Care and corresponds to the added value based on the synergies expected to arise from the acquisition due to offering various training and education programmes for employees internally in the future and the know-how of the employees gained. Transaction costs were not material. 

Acquisition of Aquantic AG. On 11 July 2022, Galenica acquired 100% of the shares in the Swiss company Aquantic AG. The main activity of Aquantic is offering services for pharmaceutical companies and health insurance providers to simplify the reimbursement of the costs for specific medicines.

The total purchase consideration amounted to CHF 8.6 million, of which CHF 5.2 million was settled in cash. The contingent consideration in the amount of CHF 3.3 million was recognised which is due in 2027 if certain financial and operational targets are achieved. The fair value of the net identifiable assets amounted to CHF 1.0 million at the acquisition date. The goodwill of CHF 7.6 million was allocated to the operating segment Products & Care and corresponds to the added value based on the acquirer-specific synergies expected to arise from the acquisition in strengthening its position for business customers and the know-how of the employees gained. Transaction costs were not material.

Acquisition of Bahnhof Apotheke Langnau AG. On 15 November 2022, Galenica acquired 100% of the shares in the Swiss company Bahnhof Apotheke Langnau AG. Apart from operating a pharmacy located in Langnau the company is a leading provider of formulations for medicinal cannabis products.

The total purchase consideration amounted to CHF 48.0 million, of which CHF 25.1 million was settled in cash. The contingent consideration in the amount of CHF 22.9 million was recognised which is due in 2025 respectively in 2028 if certain financial and operational targets are achieved. The fair value of the net identifiable assets amounted to CHF 7.9 million at the acquisition date. The goodwill of CHF 40.1 million was allocated to the operating segment Products & Care and corresponds to the added value based on the acquirer-specific synergies expected to arise from the acquisition in strengthening its position as a leading fully integrated healthcare provider and the know-how of the employees gained. Transaction costs were not material.

Acquisition of pharmacies. Galenica acquired 100% of the interests in pharmacies in various locations in Switzerland. Upon acquisition, the pharmacies were merged with Galenicare Ltd.

The total purchase consideration amounted to CHF 10.4 million and was fully settled in cash. The fair value of the net identifiable assets amounts to CHF 2.5 million at the acquisition date. The goodwill of CHF 7.9 million was allocated to the operating segment Products & Care and corresponds to the added value of the pharmacies based on their locations. Transaction costs were not material.

Disposal of Careproduct AG. On 20 September 2022, Galenica disposed 100% of the shares in the Swiss company Careproduct AG to SAB Management Holding AG. The consideration amounted to CHF 2.2 million and was settled in cash. The carrying amount of the disposed net assets amounted to CHF 1.2 million including cash and cash equivalents of CHF 0.1 million. The net profit from this transaction of CHF 0.9 million has been recognised in other income including transaction costs of CHF 0.1 million.

Business combinations

in thousand CHF

Bahnhof Apotheke Langnau

Other Pharmacies

Other 1)

2022 Total

2021 Total (Restated)

Cash and cash equivalents

1,980

1,967

2,710

6,657

2,146

Trade receivables

3,568

855

434

4,857

2,584

Inventories

641

475

1,116

6,893

Property, plant and equipment

31

207

238

3,879 2)

Right-of-use assets

991

2,158

853

4,002

6,021

Intangible assets

3,719

1,191

4,910

31,138

Other current and non-current assets

307

258

788

1,353

622

Trade payables

–509

–715

–94

–1,318

–1,638

Financial liabilities

–7,005

Lease liabilities

–991

–2,158

–853

–4,002

–6,021

Net deferred tax assets/(liabilities)

–788

–24

–230

–1,043

425 2)

Employee benefit liabilities

–396

–396

–2,279

Other current and non-current liabilities

–644

–326

–1,247

–2,218

–1,346

Fair value of net assets

7,910

2,491

3,757

14,158

35,419 2)

Goodwill

40,091

7,943

10,565

58,600

65,073 2)

Non-controlling interests

–1,382

–1,382

Purchase consideration

48,001

10,434

12,940

71,375

100,493

Cash acquired

–1,980

–1,967

–2,710

–6,657

–2,146

Fair value of pre-existing relationships

–170

Offset against loans / trade receivables

–4,752

Contingent consideration

–22,909

–3,348

–26,256

–24,000

Net cash flow from current business combinations

23,112

8,467

6,882

38,462

69,424

Payment of consideration due to previous business combinations

 

 

 

70

Net cash flow from business combinations

 

 

 

38,462

69,494

1) Including Medinform AG and Aquantic AG

2) Figures restated (refer to note 2)

Pro forma figures for acquisitions made in 2022 for the full 2022 financial year

Since their inclusion in Galenica's scope of consolidation, the businesses acquired contributed net sales of CHF 15.0 million and an operating result (EBIT) of CHF 1.9 million to the Group's results. If these acquisitions had occurred on 1 January 2022, they would have contributed additional net sales of CHF 14.6 million and increased EBIT by CHF 4.7 million.

Business combinations 2021

Acquisition of pharmacies. Galenica acquired 100% of the interests in pharmacies in various locations in Switzerland. Upon acquisition, the pharmacies were merged with Galenicare Ltd.

The total purchase consideration amounted to CHF 10.2 million and was fully settled in cash. The fair value of the net identifiable assets amounts to CHF 0.6 million at the acquisition date. The goodwill of CHF 9.6 million was allocated to the operating segment Products & Care and corresponds to the added value of the pharmacies based on their locations. Transaction costs were not material.

Acquisition of the pharma business of Dr. Wild & Co. AG. On 27 May 2021, Galenica acquired the range of pharmaceutical products of the Swiss company Dr. Wild & Co. AG, including the well-known brands Vitamin D3 Wild Oil® and VI–DE 3®. In addition, the experienced physician field service of Dr. Wild & Co. AG was transferred to Verfora.

The total purchase consideration amounted to CHF 34.6 million and was fully settled in cash. The fair value of the net identifiable assets amounted to CHF 26.7 million at the acquisition date. The goodwill of CHF 7.9 million was allocated to the operating segment Products & Care and corresponds to the added value based on the acquirer-specific synergies expected to arise from the acquisition in strengthening its leading position in the Swiss consumer healthcare (CHC) market and the know-how of the employees gained. Acquired intangible assets include trademarks with an indefinite useful life of CHF 22.8 million. Transaction costs were not material.

Acquisition of Lifestage Solutions Ltd. On 26 July 2021, Galenica acquired 100% of the shares in the Swiss company Lifestage Solutions Ltd. Lifestage Solutions is a specialised wholesaler for home care organisations and nursing homes, who simplifies daily workflows for its customers using digitalisation and state-of-the-art technology.

The total purchase consideration amounted to CHF 49.3 million, of which CHF 24.8 million was settled in cash and CHF 0.5 million was offset against loans. The contingent consideration in the amount of CHF 24.0 million is due in 2025 if certain sales targets are achieved. The fair value of the net identifiable assets amounted to CHF 3.9 million at the acquisition date. The goodwill of CHF 45.4 million was allocated to the operating segment Products & Care and corresponds to the added value based on the acquirer-specific synergies expected to arise from the acquisition in strengthening its position as a leading integrated healthcare service provider in the growth markets of home care and nursing homes in Switzerland and the know-how of the employees gained. Transaction costs were not material.

Acquisition of Spagyros Ltd. On 31 August 2021, Galenica acquired the remaining 92.1% shares of the Swiss company Spagyros Ltd. The remeasuring gain to fair value of the existing 7.9% amounted to CHF 0.2 million and was recorded in the financial income. The main activity of Spagyros is the production and marketing of homoeopathy, spagyric, gemmo- and phytotherapeutic medicines.

The total purchase consideration amounted to CHF 6.4 million, of which CHF 2.0 million was settled in cash and CHF 4.3 million was offset against loans. The fair value of the pre-existing investment of 7.9% amounted to CHF 0.2 million. The purchase price allocation has now been finalised (refer to note 2). The adjusted fair value of the net identifiable assets amounted to CHF 4.3 million at the acquisition date. The adjusted goodwill of CHF 2.1 million was allocated to the operating segment Products & Care and corresponds to the added value based on the acquirer-specific synergies expected to arise from the acquisition in strengthening Verfora's leading position in the Swiss consumer healthcare (CHC) market and the know-how of the employees gained. Galenica was also able to strengthen pharmacies and drugstores with the addition of a range of products in the growing area of complementary medicine. Acquired intangible assets include trademarks with an indefinite useful life of CHF 2.9 million. Transaction costs were not material.

Accounting principles business combinations

Business combinations are accounted for using the acquisition method. Consideration transferred comprises payments in cash as well as the fair value of the assets transferred, the obligations entered into or assumed and the equity instruments transferred. Transaction costs are recognised directly in profit or loss.

Goodwill is recognised at cost at the acquisition date and corresponds to the difference between the consideration transferred and the fair value of assets, liabilities and contingent liabilities identified in the purchase price allocation and the amount of any non-controlling interest in the acquiree. Goodwill is capitalised and included in intangible assets, while negative goodwill is recognised immediately in profit or loss. After initial recognition goodwill is recognised at cost less any accumulated impairment.

Contingent consideration is measured at fair value at the acquisition date and not remeasured subsequently for equity instruments. If the contingent consideration qualifies as a financial instrument, it is remeasured to fair value and any difference is recognised in other financial income or other financial expenses.

The difference arising from the acquisition of additional non-controlling interests in fully consolidated companies (purchase consideration less proportionate carrying amount of non-controlling interests) is considered to be an equity transaction and is thus taken directly to retained earnings in shareholders' equity. Gains and losses resulting from the disposal of interests in consolidated companies without loss of control are also recognised in retained earnings. Put options granted to non-controlling interests to sell their shares to Galenica as part of a business combination represent a contractual obligation to purchase non-controlling interests and give rise to a financial liability if the option does not provide Galenica with a present ownership interest in the shares concerned. This liability is measured at the redemption amount as if the put option had been exercised at the balance sheet date. Galenica accounts for changes in the carrying amount of this financial liability as an equity transaction.

If a cash-generating unit (CGU) or group of CGUs is sold, goodwill is taken into account when calculating the profit or loss on disposal. The profit or loss on deconsolidation is recognised in operating income or other operating costs.


5. Net sales

5. Net sales

Net sales 2022

Net sales 2022

in thousand CHF

Sale of goods

Sale of services

Total net sales

Intersegmental net sales

Total net sales to third parties

of which sale of goods to third parties

of which sale of services to third parties

Local Pharmacies

1,210,214

76,641

1,286,856

–9

1,286,846

1,210,208

76,638

Pharmacies at Home

511,317

8,622

519,939

–370

519,569

510,948

8,622

Retail (B2C) 1)

1,721,362

85,263

1,806,625

–209

1,806,416

1,721,156

85,260

Products & Brands

155,906

1,782

157,687

–80,460

77,227

75,446

1,781

Services for Professionals

55,857

15,236

71,093

–21,695

49,398

44,775

4,623

Professionals (B2B) 1)

211,802

16,979

228,780

–102,156

126,625

120,221

6,404

Products & Care 1)

1,929,983

99,637

2,029,620

–96,579

1,933,041

1,841,376

91,664

Wholesale

2,810,514

9,845

2,820,359

–807,935

2,012,424

2,005,836

6,588

Logistics & IT Services

359

130,353

130,712

–63,492

67,220

348

66,872

Logistics & IT 1)

2,810,862

122,457

2,933,318

–853,674

2,079,645

2,006,184

73,461

Group Services

49,138

49,138

–47,475

1,663

1,663

Eliminations 2)

–893,284

–104,444

–997,728

997,728

Galenica Group

3,847,560

166,788

4,014,348

4,014,348

3,847,560

166,788

1) Including eliminations of intercompany net sales

2) Eliminations of intersegmental net sales

Net sales 2021

Net sales 2021

in thousand CHF

Sale of goods

Sale of services

Total net sales

Intersegmental net sales

Total net sales to third parties

of which sale of goods to third parties

of which sale of services to third parties

Local Pharmacies

1,185,084

76,437

1,261,521

–45

1,261,476

1,185,039

76,437

Pharmacies at Home

450,444

8,400

458,844

–503

458,341

449,941

8,400

Retail (B2C) 1)

1,635,149

84,837

1,719,987

–170

1,719,816

1,634,979

84,837

Products & Brands

129,401

2,179

131,581

–61,880

69,701

67,522

2,179

Services for Professionals

49,083

13,308

62,392

–20,102

42,290

38,739

3,551

Professionals (B2B) 1)

178,513

15,459

193,972

–81,982

111,990

106,261

5,729

Products & Care 1)

1,810,182

97,948

1,908,130

–76,323

1,831,807

1,741,240

90,567

Wholesale

2,703,030

25,407

2,728,437

–793,742

1,934,695

1,927,201

7,494

Logistics & IT Services

1,485

110,380

111,865

–44,978

66,887

525

66,362

Logistics & IT 1)

2,704,490

126,867

2,831,358

–829,775

2,001,582

1,927,726

73,857

Group Services

31,844

31,844

–30,554

1,290

1,290

Eliminations 2)

–845,707

–90,946

–936,652

936,652

Galenica Group

3,668,966

165,713

3,834,679

3,834,679

3,668,966

165,713

1) Including eliminations of intercompany net sales

2) Eliminations of intersegmental net sales

Accounting principles net sales

Net sales represent revenue from contracts with customers from the sale of goods or rendering of services. Revenue is recognised in the amount that reflects the consideration to which Galenica expects to be entitled when the promised goods or services are transferred to customers. Revenue is stated net of any price, volume, cash or other types of discounts (e.g. slotting fees that do not represent a distinct performance obligation) and exclusive of VAT.

Where invoices are issued, payment terms in Switzerland usually range between 10 and 30 days, for both goods and services.

Sale of goods

Revenue from sale of goods is recognised at the point in time the Group satisfies a performance obligation by transferring control over the products to its customers. For retail pharmacy sales, this is when the customer takes possession of the products at the point-of-sale and for wholesale transactions control transfers upon shipment of the products to the customer.

Galenica has determined that its customer loyalty programs represent separate performance obligations to which revenue is allocated based on relative stand-alone selling prices, which considers historical redemption patterns. Revenue is deferred and recognised when the award credits are redeemed, which is typically 2 to 4 months after the sale of the initial products. At the end of each period, unredeemed credits are reflected as contract liabilities and included in trade and other payables in the consolidated statement of financial position.

Refund liabilities from contracts with customers are estimated based on actual sales volumes for the financial year and refund percentages as agreed with customers. These liabilities are usually settled in the subsequent financial year. ­Revenue from gift cards purchased by customers is deferred as contract liabilities until goods or services are transferred, which is typically within 12 months after the sale of the gift card. Any amounts not expected to be redeemed are recognised based on historical redemption patterns.

Customer returns are not material.

Sale of services

Revenue from services includes logistics services, the processing and sale of information and IT services as well as other contractually agreed services. The performance obligations are either satisfied over time or at a point in time (i.e. when volumes are handled) depending on the type of services rendered. Revenue is recognised using a pattern of transfer that depicts Galenica's performance.


6. Other income

6. Other income

Other income

in thousand CHF

2022

2021

Income from own work capitalised

6,757

6,726

Rental income from operating leases

1,805

1,818

Gain on disposal of property, plant and equipment

212

9,406

Gain on disposal of subsidiaries

853

Other operating income

3,413

3,131

Other income

13,040

21,082

In 2021, Galenica sold the property at its headquarters to a real estate fund for the selling price of CHF 40.0 million. This resulted in a gain on disposal of property, plant and equipment of CHF 8.9 million.


7. Personnel costs

7. Personnel costs

Personnel costs

in thousand CHF

2022

2021

Salaries and wages

435,466

423,315

Social security costs and pension expenses

63,237

64,648

Other personnel costs

39,649

30,896

Personnel costs

538,353

518,859

 

 

 

Average number of employees (FTE)

5,579

5,488

Social security costs and pension expenses contain expenses for defined benefit plans of CHF 32.6 million (previous year: expenses of CHF 31.1 million) (refer to note 23). Salaries and wages includes expenses for share-based payments of CHF 7.1 million (previous year: CHF 6.7 million) (refer to note 28).


8. Other operating costs

8. Other operating costs

Other operating costs

in thousand CHF

2022

2021

Maintenance and repairs

23,547

21,015

Transport and shipping costs

42,809

40,738

Other operating and production costs

18,775

17,286

Rental and other lease expenses 1)

11,080

9,009

Administration costs

47,863

43,350

Marketing and sales costs

35,495

31,443

Non-income taxes

1,575

1,379

Loss on disposal of property, plant and equipment

6

19

Other operating costs

181,151

164,240

1) Of which other lease expenses (incidental expenses) of CHF 5.9 million (previous year: CHF 4.0 million)

Research and development

During the reporting period, expenses for research and development totalling CHF 13.5 million were recognised directly in other operating costs (previous year: CHF 15.2 million).


9. Financial result

9. Financial result

Financial result

in thousand CHF

2022

2021

Interest income

727

738

Net interest income from employee benefit plans

224

Other financial income

1,113

533

Net gain on foreign exchange

30

Financial income

2,065

1,301

 

 

 

Interest expense

2,818

2,701

Net interest expense from employee benefit plans

18

Interest expense on lease liabilities

2,455

2,298

Other financial costs

235

659

Net loss on foreign exchange

241

Financial expenses

5,749

5,677

 

 

 

Net financial expenses

3,685

4,375


10. Earnings per share

10. Earnings per share

When calculating diluted earnings per share, the weighted average number of outstanding shares during the reporting period is adjusted assuming conversion of all potentially dilutive effects.

Number of outstanding shares

 

2022

2021

Total number of shares

50,000,000

50,000,000

Average number of treasury shares

–265,164

–430,309

Average number of outstanding shares

49,734,836

49,569,691

Effect from share-based payments

68,730

61,834

Theoretical average number of outstanding shares (diluted)

49,803,566

49,631,525

Earnings per share

 

2022

2021

Net profit – attributable to shareholders of Galenica Ltd. (in thousand CHF)

165,132

167,680

Earnings per share (in CHF)

3.32

3.38

Diluted earnings per share (in CHF)

3.32

3.38


11. Income taxes

11. Income taxes

Income taxes

in thousand CHF

2022

2021

Current income taxes

35,201

36,138

Income taxes of prior periods

–391

–547

Deferred income taxes

–1,042

–740

Income taxes

33,767

34,850

Tax reconciliation

in thousand CHF

2022

2021

Earnings before taxes (EBT)

199,626

203,033

Weighted income tax rate in % of EBT

18.3%

17.3%

Expected income taxes

36,579

35,048

Effects of changes in tax rates

–101

70

Effects of unrecognised losses in the current year

271

28

Realisation of unrecognised tax losses of prior periods

–536

–361

Other items and items from prior periods

–2,446

64

Effective income taxes

33,767

34,850

Effective income tax rate in % of EBT

16.9%

17.2%

The weighted income tax rate reflects the weighted average of the tax rates across the Swiss cantons in which Galenica is active. The composition of Galenica's taxable income and changes in local tax rates cause the tax rate to vary from year to year.

Deferred taxes

 

 

 

2022

 

2021 (Restated)

in thousand CHF

Deferred tax assets

Deferred tax liabilities

Net carrying amount

Deferred tax assets

Deferred tax liabilities

Net carrying amount

Current assets

3,123

–24,716

–21,593

2,776

–22,788

–20,012

Property, plant and equipment

44

–2,944

–2,900

189 1)

–3,344

-3,154 1)

Right-of-use assets

–38,450

–38,450

–37,037

–37,037

Intangible assets

7,248

–22,223

–14,975

7,383

–19,831

–12,448

Investments

–4,823

–4,823

–7,201

–7,201

Financial assets

–4,020

–4,020

19

–5,387

–5,368

Lease liabilities

39,568

39,568

38,354

38,354

Provisions

46

–1,270

–1,224

78

–1,316

–1,238

Employee benefit plans

3,026

–33

2,993

4,674

–12,060

–7,386

Other temporary differences

110

–760

–650

370

–1,017

–647

Shareholders' equity

779

779

814

814

Deferred taxes due to temporary differences

53,944

–99,238

–45,294

54,658 1)

–109,981

-55,324 1)

Tax loss carryforwards

168

168

Gross deferred taxes

54,112

–99,238

–45,126

54,658 1)

–109,981

-55,324 1)

Netting of assets and liabilities

–50,854

50,854

 

-49,910 1)

49,910 1)

 

Net deferred taxes

3,258

–48,384

 

4,747

-60,071 1)

 

1) Figures restated (refer to note 2)

Analysis of net deferred taxes

in thousand CHF

2022

2021 (Restated)

1 January

–55,324

–37,415

Recognised as income taxes in profit or loss

 

 

– Change in temporary differences

774

5,080

– Fiscal realisation of recognised tax loss carryforwards

–4,269

– Tax loss carryforwards taken into account for the first time

168

– Effects of changes in tax rates

101

–70

Recognised in other comprehensive income

10,025

–19,261

Recognised in shareholders' equity (related to share-based payments)

146

188

Addition to scope of consolidation

–1,043

425 1)

Disposal from scope of consolidation

30

Translation differences

–3

–1

31 December

–45,126

-55,324 1)

1) Figures restated (refer to note 2)

Temporary differences on which no deferred taxes have been recognised

in thousand CHF

2022

2021

Investments in subsidiaries

175,950

145,257

Tax loss carryforwards and tax credits

 

 

2022

 

2021

in thousand CHF

Tax loss carryforwards / tax credits

Tax effect

Tax loss carryforwards / tax credits

Tax effect

Tax loss carryforwards and tax credits

9,056

2,035

9,779

2,175

– of which capitalised as deferred tax assets

–844

–168

– of which netted with deferred tax liabilities

Unrecognised tax loss carryforwards and tax credits

8,212

1,868

9,779

2,175

Of which expire:

 

 

 

 

– within 1 year

– in 2 to 5 years

2,324

458

2,012

397

– in more than 5 years

5,888

1,410

7,767

1,777

Accounting principles income taxes

The expected current income tax charge is calculated and accrued on the basis of taxable profit for the current year and is recognised in profit or loss unless the underlying transaction is recognised outside profit or loss.

Deferred taxes are taxes on temporary differences between the value of assets and liabilities in the tax accounts and the carrying amounts included in Galenica's consolidated financial statements. Deferred taxes are calculated using the liability method on the basis of enacted or substantively enacted tax rates expected to apply when the asset is realised or the liability is settled. Tax effects from losses carried forward and other deductible temporary differences are only capitalised when it is probable that they will be realised in the future. Changes in deferred tax assets and deferred tax liabilities are recognised in profit or loss except for deferred taxes on transactions that are recognised directly in comprehensive income or equity.

Deferred tax liabilities are recorded for all taxable temporary differences associated with investments in subsidiaries, except Galenica is able to control the timing of the distribution and no dividend distribution is planned or likely to occur in the foreseeable future.

Deferred tax assets, including tax loss carryforwards and expected tax credits, are only taken into account if it is probable that future profits will be available against which the underlying assets can be applied for tax purposes.


12. Inventories

12. Inventories

Inventories

in thousand CHF

2022

2021

Gross carrying amount as at 1 January

318,315

324,743

Addition to scope of consolidation

1,116

6,893

Disposal from scope of consolidation

–549

Change in inventories

16,611

–13,289

Translation differences

–51

–32

Gross carrying amount as at 31 December

335,443

318,315

 

 

 

Allowance as at 1 January

–23,245

–18,061

Addition

–376

–8,386

Use

3,295

3,194

Disposal from scope of consolidation

30

Translation differences

12

9

Allowance as at 31 December

–20,283

–23,245

 

 

 

Net carrying amount as at 31 December

315,160

295,070

Accounting principles inventories

Inventories contains purchased merchandise carried at the lower of cost or net realisable value. The weighted average method is primarily used to determine cost.

Inventory allowances are recognised on inventories for slow moving items and excess stock.

Cost of goods mainly include costs of goods and merchandise from the operating segments Products & Care and Logistics & IT. Price discounts, rebates or supplier discounts and other payments received from suppliers that are not payment for distinct goods or services provided by Galenica and thus on the purchase of goods are directly deducted from cost of goods.


13. Trade and other receivables

13. Trade and other receivables

Trade and other receivables

in thousand CHF

2022

2021

Trade receivables

514,868

447,588

Bad debt allowances

–9,752

–8,609

Other receivables

24,364

22,129

Trade and other receivables

529,479

461,108

Change in bad debt allowances for trade receivables

in thousand CHF

2022

2021

1 January

–8,609

–7,983

Addition

–2,147

–1,533

Use

521

243

Reversal

450

656

Disposal from scope of consolidation

23

Translation differences

10

8

31 December

–9,752

–8,609

Maturity profile of trade receivables

 

 

 

2022

 

 

2021

in thousand CHF

Gross trade receivables

Bad debt allowances

Net trade receivables

Gross trade receivables

Bad debt allowances

Net trade receivables

Not past due

440,662

–4,927

435,735

398,993

–3,598

395,395

Past due:

 

 

 

 

 

 

– 1 to 30 days

48,873

–735

48,138

28,972

–722

28,249

– 31 to 60 days

9,792

–493

9,299

7,430

–416

7,014

– 61 to 90 days

5,149

–462

4,687

3,794

–346

3,449

– more than 90 days

10,392

–3,135

7,256

8,399

–3,527

4,872

Total

514,868

–9,752

505,116

447,588

–8,609

438,979

Accounting principles trade and other receivables

Trade receivables are initially measured at the transaction price determined in accordance with IFRS 15. Other receivables are carried at original invoice value. Allowances for uncollectable amounts are estimated based on expected credit losses, using life-time expected credit losses for trade receivables (simplified approach). These bad debt allowances are based on historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment for individual allowances or for groups with comparable credit risk profiles.

Any impairment losses are recognised in profit or loss in other operating costs.


14. Property, plant and equipment

14. Property, plant and equipment

Property, plant and equipment

in thousand CHF

Real estate

Assets under construction

Warehouse equipment

Furniture, fittings

Other property, plant and equipment

Total property, plant and equipment

Net carrying amount as at 31.12.2020

167,982

20,211

29,514

22,811

27,537

268,055

Addition

10,424

10,781

7,486

5,792

7,706

42,189

Disposal

-29,621 1)

–37

–726

–30,385

Reclassification

7,488

–9,528

623

31

1,456

70

Depreciation

–17,468

–6,230

–5,248

–10,314

–39,259

Addition to scope of consolidation (restated)

3,388 2)

125

258

108

3,879 2)

Net carrying amount as at 31.12.2021 (restated)

142,194 2)

21,464

31,481

23,644

25,767

244,549 2)

Addition

14,682

1,517

12,656

3,434

8,754

41,044

Disposal

–13

–99

–167

–280

Reclassification

16,681

–21,023

3,637

–30

736

Depreciation

–14,108

–6,241

–5,124

–10,509

–35,983

Addition to scope of consolidation

96

59

84

238

Disposal from scope of consolidation

–54

–6

–14

–74

Net carrying amount as at 31.12.2022

159,544

1,958

41,465

21,877

24,650

249,495

 

 

 

 

 

 

 

Overview as at 31.12.2021

 

 

 

 

 

 

Cost (restated)

298,086 2)

21,464

101,103

111,297

65,134

597,085 2)

Accumulated depreciation and impairment

–155,893

–69,622

–87,653

–39,367

–352,535

Net carrying amount as at 31.12.2021 (restated)

142,194 2)

21,464

31,481

23,644

25,767

244,549 2)

 

 

 

 

 

 

 

Overview as at 31.12.2022

 

 

 

 

 

 

Cost

327,442

1,958

115,959

113,542

67,192

626,094

Accumulated depreciation and impairment

–167,897

–74,495

–91,665

–42,542

–376,599

Net carrying amount as at 31.12.2022

159,544

1,958

41,465

21,877

24,650

249,495

1) Including CHF 28.8 million from the sale of the headquarters building

2) Figures restated (refer to note 2)

Accounting principles 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 as follows:

 

Years

Land

unlimited

Buildings

10 – 50

Warehouse equipment

5 – 15

Manufacturing equipment

5 – 15

Furniture, fittings

5 – 10

IT equipment

3 – 10

Vehicles

3 – 10

Other property, plant and equipment consists of manufacturing equipment, IT equipment and vehicles.

Subsequent expenditure is only capitalised if it results in extending the useful life, expanding capacity or contributing to a marked reduction in operating costs. Maintenance or repair costs are recognised directly in profit or loss.

When items of property, plant and equipment are sold or derecognised, gains are recognised in other income and losses in other operating costs.

Assets are tested for impairment whenever there are indications that they could be impaired. Any impairment is ­recognised in profit or loss under depreciation and amortisation and disclosed separately as an impairment. Reversal of impairments on property, plant and equipment and investment properties are recognised immediately in profit or loss.


15. Leases

15. Leases

Right-of-use assets

in thousand CHF

Real estate

Vehicles

Total right-of-use assets

Net carrying amount as at 31.12.2020

210,074

251

210,325

Addition

27,954

83

28,037

Reassessment of existing lease contracts

20,341

20,341

Depreciation

–49,012

–190

–49,202

Impairment

–22

–22

Addition to scope of consolidation

5,904

117

6,021

Translation differences

–4

–4

Net carrying amount as at 31.12.2021

215,239

257

215,496

Addition

23,456

76

23,533

Reassessment of existing lease contracts

35,497

12

35,509

Depreciation

–51,059

–197

–51,255

Impairment

–1,644

–1,644

Reversal of impairment

1,492

1,492

Addition to scope of consolidation

3,951

52

4,002

Disposal from scope of consolidation

–444

–444

Translation differences

–4

–4

Net carrying amount as at 31.12.2022

226,489

196

226,685

Lease liabilities

in thousand CHF

2022

2021

Net carrying amount as at 1 January

223,051

218,001

Addition

23,533

28,630

Reassessment of existing lease contracts

35,509

20,341

Interest expense on lease liabilities

2,455

2,298

Repayment of lease liabilities (including interest)

–54,914

–52,237

Addition to scope of consolidation

4,002

6,021

Disposal from scope of consolidation

–455

Translation differences

–4

–4

Net carrying amount as at 31 December

233,178

223,051

– of which current lease liabilities

50,173

49,717

– of which non-current lease liabilities

183,005

173,334

Leases recognised in profit or loss

in thousand CHF

2022

2021

Rental income from operating leases (included in other income)

1,805

1,818

Short-term lease expense (included in other operating costs)

–1,154

–1,325

Low-value lease expense (included in other operating costs)

–17

–36

Variable lease expense (included in other operating costs)

–4,002

–3,685

Depreciation of right-of-use assets

–51,255

–49,202

Impairment of right-of-use assets

–1,644

–22

Reversal of impairment of right-of-use assets

1,492

Interest expense on lease liabilities

–2,455

–2,298

The total cash outflow for leases including short-term leases, leases of low-value-assets and variable lease expenses was CHF 60.1 million (previous year: CHF 57.3 million).

Maturity profile of undiscounted lease liabilities

in thousand CHF

2022

2021

Up to 3 months

13,371

13,279

In 3 to 12 months

39,339

38,441

In 2 years

45,869

45,327

In 3 years

37,945

36,024

In 4 to 5 years

54,879

49,171

In 6 to 10 years

45,534

43,103

In more than 10 years

5,303

5,782

Total future cash flows from undiscounted lease liabilities

242,240

231,127

Possible future cash outflows related to extension options in an amount of CHF 183.1 million (previous year: CHF 163.2 million) are not included in lease liabilities because it is not reasonably certain that these options will be exercised.

The cash outflows for variable lease expenses in 2023 is expected to be similar to the amount recognised in 2022.

Galenica has entered into various lease contracts that have not yet commenced as at 31 December 2022. The future lease payments for these non-cancellable lease contracts amount to CHF 38.9 million (previous year: CHF 39.6 million). 

Accounting principles leases

A lease is a contract in which the right to use an asset (the underlying asset) is granted for an agreed-upon period in return for consideration. Galenica has lease contracts for vehicles and a large number of contracts for real estate, mainly store locations, which include fixed rental payments and variable sales-based components. The significant majority of these lease contracts concerns locations of the pharmacies in the operating segment Products & Care.

Galenica determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain at inception of the contract to be exercised. Galenica has the option, under some of its leases, to lease the assets for additional terms of several (three, five or more) years. Galenica applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. In doing so, Galenica considers all relevant factors including economic incentives. Galenica reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise, or not to exercise, the option to renew (e.g. a change in business strategy of the underlying asset).

At the commencement date right-of-use assets are capitalised at a value equivalent to the lease liability, plus initial direct costs and lease payments made before the commencement date, less any lease incentives received.

Galenica uses the recognition exemptions for lease contracts that have a lease term of 12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is of low value (low-value assets).

The lease liability represents the net present value of fixed or in substance fixed lease payments over the lease term. Lease liabilities are discounted using the incremental borrowing rate if the rate implicit in the lease is not readily determinable. Non-lease components are not included in the lease liabilities and are accounted for in accordance with applicable standards. The interest charge is presented as interest expense on lease liabilities.

Right-of-use assets are depreciated over the shorter of the useful life of the right-of-use asset or the lease term.

Right-of-use assets are tested for impairment whenever there are indications that they could be impaired. Any impairment is recognised in profit or loss under depreciation and amortisation and disclosed separately as an impairment. Reversal of impairments on right-of-use assets are recognised immediately in profit or loss.


16. Intangible assets

16. Intangible assets

Intangible assets

in thousand CHF

Intangible assets with finite useful lives 1)

Trademarks with indefinite useful lives

Software

Goodwill

Total intangible assets

Net carrying amount as at 31.12.2020

5,739

57,022

61,872

791,588

916,222

Addition

151

18,098

18,250

Reclassification

–9

–61

–70

Amortisation

–1,653

–8,293

–9,946

Addition to scope of consolidation (restated)

3,440

25,698

2,000

65,073 2)

96,211 2)

Net carrying amount as at 31.12.2021 (restated)

7,668

82,720

73,616

856,662 2)

1,020,666 2)

Addition

29,676

29,676

Disposal

–41

–41

Amortisation

–2,087

–10,997

–13,084

Addition to scope of consolidation

4,910

58,600

63,510

Disposal from scope of consolidation

–28

–28

–558

–614

Net carrying amount as at 31.12.2022

10,422

82,720

92,267

914,703

1,100,112

 

 

 

 

 

 

Overview as at 31.12.2021

 

 

 

 

 

Cost (restated)

17,690

82,720

119,000

856,662 2)

1,076,073 2)

Accumulated amortisation and impairment

–10,023

–45,384

–55,407

Net carrying amount as at 31.12.2021 (restated)

7,668

82,720

73,616

856,662 2)

1,020,666 2)

 

 

 

 

 

 

Overview as at 31.12.2022

 

 

 

 

 

Cost

21,982

82,720

147,680

914,703

1,167,085

Accumulated amortisation and impairment

–11,561

–55,413

–66,973

Net carrying amount as at 31.12.2022

10,422

82,720

92,267

914,703

1,100,112

1) Including trademarks, patents, licences and customer relationships

2) Figures restated (refer to note 2)

Trademarks with indefinite useful lives

This position includes trademarks that are well known nationally and internationally and actively advertised. These acquired trademarks are regarded as having indefinite useful lives for the following reasons: they were created many years ago, they do not expire, and the products sold under the trademarks have a history of strong revenue and cash flow performance. Galenica intends and has the ability to support the trademarks to maintain their values for the foreseeable future.

For impairment testing purposes the trademarks have been allocated to the cash-generating units Verfora and Spagyros in the operating segment Products & Care. The recoverable amount (higher of fair value less costs of disposal and value in use) is determined on the basis of future discounted cash flows. Cash flows beyond the three-year planning period are based on the growth rates and discount rates before tax set out below, as approved in medium-term planning by management:

Trademarks with indefinite useful lives

in thousand CHF

2022

2021

Carrying amount

82,720

82,720

Growth rate

1.0%

1.0%

Pre-tax discount rate

6.8%

6.2%

According to the results of impairment testing for 2022 and 2021 using value in use calculations, no impairment was necessary. Galenica performed a sensitivity analysis taking into account reasonable changes in the assumptions used to calculate the discounted cash flows, such as higher discount rates, lower EBITDA, lower gross margins or lower perpetual growth rates. The sensitivity analysis for 2022 and 2021 did not reveal that a reasonable possible change in assumption would lead to an impairment.

Goodwill

Goodwill

 

 

2022

 

2021 (Restated)

in thousand CHF

Carrying amount

Growth rate

Pre-tax discount rate

Carrying amount

Growth rate

Pre-tax discount rate

Products & Care

829,156

1.0%

7.0%

768,295 1)

1.0%

6.5%

Logistics & IT

85,547

1.0%

7.0%

88,366

1.0%

6.5%

Total

914,703

 

 

856,662 1)

 

 

1) Figures restated (refer to note 2)

According to the results of impairment testing for 2022 and 2021 using value in use calculations, no impairment was necessary. Galenica performed a sensitivity analysis taking into account reasonable changes in the assumptions used to calculate the discounted cash flows, such as higher discount rates, lower EBITDA, lower gross margins or lower perpetual growth rates. The sensitivity analysis for 2022 and 2021 did not reveal that a reasonable possible change in assumption would lead to an impairment.

Accounting principles intangible assets

Intangible assets include acquired trademarks, patents, licences, customer relationships, purchased or internally developed software and other assets without physical substance. These items are measured at cost less accumulated amortisation and impairment. The cost of an intangible asset acquired in a business combination corresponds to its fair value determined at acquisition date.

Expenditure on internally developed software is capitalised when the capitalisation criteria are met and future economic benefits from use or sale of the software are expected. Software that is not yet available for use is tested for impairment annually or more frequently if there are indications of impairment.

Amortisation is charged on a straight-line basis over the estimated economic or legal useful life, whichever is shorter as follows:

 

Years

Trademarks, patents, licences, customer relationships

5 – 20

Software

2 – 15

The amortisation period and the amortisation method are reviewed at least at each financial year-end.

With the exception of trademarks in the business area Products & Brands, all intangible assets are assessed as having a finite useful life. Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if there are indications of impairment. Intangible assets with finite useful lives are tested for impairment whenever there are indications that they could be impaired. Any impairment is recognised in profit or loss in depreciation and amortisation and disclosed separately as an impairment.

Goodwill is allocated to the cash-generating unit (CGU) or group of CGUs that are expected to benefit from a business combination. Management monitors goodwill at operating segment level.

Goodwill is tested for impairment annually, or more frequently if there are indications of impairment. The impairment test is based on the discounted cash flow method. The WACC is used to determine the applicable pre-tax discount rate. The recoverable amount (higher of fair value less costs of disposal and value in use) of each CGU is determined on the basis of the medium-term plans for the next three years approved by management. Cash flows beyond the three-year planning period are extrapolated using a perpetual growth rate. If the recoverable amount is lower than the carrying amount, the carrying amount is reduced to the recoverable amount by recording an impairment charge.

Any impairment on goodwill is recognised in profit or loss and disclosed separately. An impairment loss for goodwill is not reversed.


17. Investments in associates and joint ventures

17. Investments in associates and joint ventures

Coop Vitality is the only significant joint venture of Galenica. Coop Vitality is registered in Bern, Switzerland. Galenica owns 49% of the share capital and voting rights, Coop Cooperative owns 51% of the share capital and voting rights.

Investments in associates and joint ventures

in thousand CHF

2022

2021

Net carrying amount as at 1 January

30,696

22,949

Share of profit from associates and joint ventures

4,202

6,765

Remeasurement of net defined benefit plans from associates and joint ventures

–921

3,529

Investments 1)

5,566

Dividends received

–6,860

–2,548

Net carrying amount as at 31 December

32,682

30,696

– of which joint ventures

29,574

30,696

1) Including contribution of previously held securities with a fair value of CHF 1.7 million

In case Coop Vitality was overindebted, Galenica has an unlimited obligation, in proportion to its equity interest, to ­restructure the company. At the reporting date, this joint venture is not overindebted.

Condensed financial information of Coop Vitality

in thousand CHF

2022

2021

Current assets

45,257

40,121

Non-current assets

112,697

107,022

– of which right-of-use assets

52,891

48,358

Current liabilities

49,313

40,237

– of which current lease liabilities

10,103

10,391

Non-current liabilities

50,328

42,830

– of which non-current lease liabilities

44,381

39,480

Equity before appropriation of earnings

58,312

64,076

Operating income

266,542

260,835

EBIT

13,058

18,734

Net profit

10,114

14,720

Remeasurement of net defined benefit plans recognised in other comprehensive income

–1,879

7,202

Cash flow from operating activities

21,474

30,755

The net carrying amount of the investment in Coop Vitality is CHF 28.6 million as at 31 December 2022 (previous year: CHF 31.4 million). Unrealised profits are not considered in these amounts.

Accounting principles investments in associates and joint ventures

Investments in associates where Galenica holds between 20% and 50% of the voting rights and investments in joint ventures are initially recognised at cost and subsequently accounted for using the equity method. In the accounting periods following the acquisition, the carrying amount of the investment is increased by the share in profit or reduced by the share in loss and the dividends paid from the associates and joint ventures. The corresponding amounts are ­recognised in profit or loss. Transactions that are recognised in comprehensive income from associates and joint ­ventures are recognised proportionately in comprehensive income.


18. Financial assets

18. Financial assets

Financial assets

in thousand CHF

2022

2021

Loans

9,120

8,176

Rental deposits

4,780

4,669

Other financial assets

732

874

Loans and other financial assets

14,632

13,719

Securities

9,061

5,433

Financial assets

23,692

19,152

Accounting principles financial assets

Non-current financial assets comprise loans, time deposits with a term to maturity of more than twelve months, rental deposits, securities and derivative financial instruments with a positive fair value and a residual term to maturity of more than twelve months. Other than the derivatives measured at fair value through profit or loss, the financial assets are held to collect contractual cash flows comprising solely principal and interest payments and are therefore measured at amortised cost subsequent to initial recognition. Any credit losses on financial assets recognised represent 12 month expected losses and are estimated based on the credit risk of the counterparty. Any impairment is recognised in financial expenses.


19. Financial liabilities

19. Financial liabilities

Financial liabilities

in thousand CHF

2022

2021

Loans

6,320

5,654

Mortgages

1,241

1,253

Liabilities to pension funds

12,099

37,503

Bonds

380,194

380,306

Contingent consideration liabilities

49,180

24,000

Other financial liabilities

4,279

880

Financial liabilities

453,312

449,596

– of which current financial liabilities

218,464

43,052

– of which non-current financial liabilities

234,848

406,544

Galenica issued two fixed-interest rate bonds for a nominal amount totalling CHF 380.0 million for the purpose of long-term financing in June 2017. One bond of CHF 200.0 million was issued with an annual coupon of 0.50% and a term of 6 years, falling due on 15 June 2023 and the other bond of CHF 180.0 million with an annual coupon of 1.00 % and a term of 9½ years, falling due on 15 December 2026. The bonds are traded on the SIX Swiss Exchange under securities no. 36720669 (ISIN CH0367206692) and 36720670 (ISIN CH0367206700) respectively. The bonds closed at 99.42% and 95.55% respectively as at 31 December 2022 (previous year: 101.17% and 103.85% respectively).

Cash flow from financial liabilities and lease liabilities 2022

in thousand CHF

1 January 2022

Proceeds from financial liabilities

Repayment of financial liabilities

Addition to scope of consolidation

Disposal from scope of consolidation

Other changes

31 December 2022

Loans

5,654

1,607

–986

45

6,320

Mortgages

1,253

–12

1,241

Liabilities to pension funds

37,503

–24,895

–510

12,099

Bonds

380,306

–112

380,194

Contingent consideration liabilities

24,000

25,180

49,180

Other financial liabilities

880

3,399

4,279

Financial liabilities

449,596

1,607

–25,893

28,002

453,312

Lease liabilities

223,051

–52,459

4,002

–455

59,038

233,178

Financial liabilities and lease liabilities

672,647

1,607

–78,351

4,002

–455

87,040

686,490

Cash flow from financial liabilities and lease liabilities 2021

in thousand CHF

1 January 2021

Proceeds from financial liabilities

Repayment of financial liabilities

Addition to scope of consolidation

Other changes

31 December 2021

Bank loans

110,000

–110,000

Loans

4,643

1,795

–6,550

5,693

72

5,654

Mortgages

–4

1,257

1,253

Liabilities to pension funds

36,540

902

56

5

37,503

Bonds

380,417

–111

380,306

Contingent consideration liabilities

70

23,930

24,000

Other financial liabilities

960

–80

880

Financial liabilities

422,631

112,698

–116,634

7,005

23,896

449,596

Lease liabilities

218,001

–49,939

6,021

48,968

223,051

Financial liabilities and lease liabilities

640,632

112,698

–166,573

13,027

72,863

672,647


20. Trade and other payables

20. Trade and other payables 

Trade and other payables

in thousand CHF

2022

2021

Trade payables

323,345

336,201

Contract liabilities

9,137

7,975

Other payables

22,738

19,867

Trade and other payables

355,220

364,043

Contract liabilities are generally recognised in revenue within 12 months.


21. Provisions

21. Provisions

Provisions

in thousand CHF

2022

2021

1 January

3,808

4,398

Addition

3,479

1,456

Use

–1,619

–1,380

Reversal

–984

–1,066

Addition to scope of consolidation

400

31 December

4,684

3,808

– of which current provisions

4,487

2,498

– of which non-current provisions

197

1,310

Provisions are recognised for the estimated cost on damage, contractual liabilities, customer complaints, litigation risk and ongoing legal proceedings.

The cash outflow from the non-current provisions is expected within the next 2 to 3 years.

Accounting principles provisions

Provisions are recorded when Galenica has a present legal or constructive obligation towards a third party as a result of a past event, when the amount of the obligation can be reliably estimated and an outflow of economic resources is probable.

Provisions are recognised for the estimated cost of liabilities related to sureties, customer complaints, litigation risks and ongoing legal proceedings.


22. Contingent liabilities and commitments

22. Contingent liabilities and commitments

Galenica is subject to a variety of risks. These risks include, but are not limited to, risks regarding product liability, patent law, tax law, competition laws and anti-trust laws. A number of Group companies are currently involved in administrative proceedings, legal disputes and investigations relating to their business activities. The results of ongoing proceedings ­cannot be predicted with certainty. Management has established appropriate provisions for any expenses likely to be incurred. These projections, however, are also subject to uncertainty. Galenica does not expect the results of these proceedings to have a significant impact on the financial statements.

In March 2017, the Swiss Competition Commission (COMCO) issued a ruling, which imposed a fine of up to CHF 4.5 million on Galenica. The ruling relates to an investigation from 2012. Galenica regards the ruling issued by COMCO as incorrect in fact and in law. Galenica has taken the ruling to the Federal Administrative Court. With a decision delivered in February 2022, the Federal Administrative Court reduced the fine to around CHF 3.8 million. Galenica has taken this case to the Swiss Federal Supreme Court and does not expect the proceedings to result in a sanction against Galenica. 

In September 2020, the Swiss Competition Commission (COMCO) opened an investigation against Markant Handels- und Industriewaren-Vermittlungs AG and its customers, inter alia Galexis Ltd. Galenica does not expect the proceedings to result in a sanction against Galexis Ltd., however, a fine cannot be ruled out entirely.

Galenica entered into various obligations regarding the purchase of services, goods, and equipment as part of its ordinary business operations.

Galenica signed purchase agreements to acquire property, plant and equipment and intangible assets totalling CHF 15.9 million (previous year: CHF 16.7 million). The payments under these purchase commitments become due in 2023.

Furthermore, there are guarantees of CHF 8.6 million (previous year: CHF 3.9 million) and subordinated loans of CHF 1.4 million (previous year: none) to third parties.

There are no unusual pending transactions or risks to be disclosed.

Accounting principles contingent liabilities and commitments

A contingent liability is disclosed for an obligation where it is not probable that an outflow of resources will be required or where the amount of the obligation cannot be estimated with sufficient reliability.


23. Employee benefit plans

23. Employee benefit plans

The vast majority of the Galenica employees work in Switzerland and participate in the Galenica Pension Fund, which is financed by the employers and the employees. This plan is legally separate from Galenica and qualifies as a defined benefit plan. The pension plan covers the risks of the economic consequences of old age, disability and death in accordance with the Swiss Federal Occupational Retirement, Survivors and Disability Pension Plans Act (BVG/LPP). The pension plan is structured in the legal form of a foundation. All actuarial risks are borne by the foundation and regularly assessed by the Board of Trustees based on an annual actuarial appraisal prepared in accordance with BVG/LPP. The company's liabilities are limited to contributions that are based on a percentage of the insured salary under the Swiss law. Only in cases of a funded status that is significantly below a funded status of 100% as per the BVG/LPP law can Galenica be required to pay additional contri­butions. The calculations made in these appraisals do not apply the projected unit credit method required by IFRS. If the calculations made in accordance with the provisions of BVG/LPP reveal a funded status of less than 100%, suitable restructuring measures need to be introduced. The Board of Trustees consists of employee and employer representatives.

The defined benefit plan is funded. Plan assets are managed separately from Galenica's assets by the independent pension fund.

The most recent actuarial valuation was prepared as at 31 December 2022. The pension fund assets are invested in accordance with local investment guidelines. Galenica pays its contributions to the pension fund in accordance with the regulations defined by the fund.

The final funded status pursuant to BVG/LPP is not available until the first quarter of the subsequent year. The projected funded status as at 31 December 2022 for Galenica Pension Fund is 108.3% (unaudited) and as at 31 December 2021 125.1% (final).

Defined benefit plans and long-service awards

 

 

 

2022

 

 

2021

in thousand CHF

Defined benefit plans

Long-service awards 1)

Total

Defined benefit plans

Long-service awards 1)

Total

Plan assets measured at fair value

1,044,124

1,044,124

1,143,224

1,143,224

Present value of defined benefit obligation

–975,824

–14,988

–990,812

–1,085,962

–16,229

–1,102,191

Surplus / (deficit)

68,299

–14,988

53,311

57,262

–16,229

41,033

Effect of asset ceiling

–69,941

–69,941

Net carrying amount recognised in employee benefit liabilities

–1,642

–14,988

–16,630

57,262

–16,229

41,033

of which recognised in assets

183

183

67,000

67,000

of which recognised in liabilities

–1,825

–14,988

–16,813

–9,738

–16,229

–25,967

1) Long-service awards relate to provisions for jubilee payments

Change in present value of defined benefit obligation

 

 

 

2022

 

 

2021

in thousand CHF

Defined benefit plans

Long-service awards

Total

Defined benefit plans

Long-service awards

Total

1 January

–1,085,962

–16,229

–1,102,191

–1,060,947

–14,924

–1,075,871

Current service cost

–31,804

–1,725

–33,529

–30,995

–1,519

–32,514

Past service cost

–85

–85

968

968

Interest on defined benefit obligation

–3,709

–59

–3,768

–519

–8

–527

Actuarial gain/(loss)

169,856

1,512

171,368

1,107

–1,152

–45

Employee contributions

–19,662

–19,662

–16,938

–16,938

Benefits/awards paid

–310

1,587

1,277

30,627

1,374

32,001

Change in scope of consolidation

–4,148

–74

–4,222

–9,265

–9,265

31 December

–975,824

–14,988

–990,812

–1,085,962

–16,229

–1,102,191

Change in fair value of plan assets

in thousand CHF

2022

2021

1 January

1,143,224

1,018,461

Interest on plan assets

3,992

509

Remeasurement gain/(loss)

–155,683

105,896

Employee contributions

19,662

16,938

Employer contributions

29,791

26,115

Net benefits paid

310

–30,627

Administration cost

–999

–1,053

Change in scope of consolidation

3,826

6,986

31 December

1,044,124

1,143,224

Net defined benefit cost

in thousand CHF

2022

2021

Current service cost

31,804

30,995

Past service cost

85

–968

Net interest on net defined benefit liability

–283

10

Administration cost

999

1,053

Net defined benefit cost

32,605

31,090

Remeasurement of net defined benefit liability

in thousand CHF

2022

2021

Actuarial gain/(loss) due to:

 

 

– Changes in demographic assumptions

–10,108

– Changes in financial assumptions

190,663

49,946

– Experience adjustments

–20,807

–38,732

Remeasurement of plan assets

–155,683

105,896

Effect in the change of asset ceiling

–69,941

Remeasurement of net defined benefit liability recognised in other comprehensive income

–55,768

107,003

Change in assumption and in estimate

The experience adjustments of CHF -20.8 million (previous year: CHF -38.7 million) were the result of various elements not expected in the prior year mainly a higher interest credited to the member's accounts, an overall increase of the population and other items as calculated by the external actuary.

The increase of the discount rate from 0.35% to 2.10% (previous year: from 0.05% to 0.35%) resulted in a decrease of the defined benefit obligation of CHF 190.7 million (previous year: CHF 49.9 million). The increase of the discount rate resulted in an actuarial gain (change in financial assumptions) and an asset ceiling.

Asset ceiling

in thousand CHF

2022

2021

1 January

Change in the asset ceiling (recognised in other comprehensive income)

–69,941

31 December

–69,941

Investment structure of plan assets

in thousand CHF

 

2022

 

2021

Cash and cash equivalents

5,312

0.5%

8,503

0.7%

Debt instruments

204,473

19.6%

191,285

16.7%

Equity instruments

424,749

40.7%

517,892

45.3%

Real estate

264,509

25.3%

256,809

22.5%

Other investments

145,081

13.9%

168,735

14.8%

Fair value of plan assets

1,044,124

100.0%

1,143,224

100.0%

Current return on plan assets

 

–13.2%

 

10.4%

The Board of Trustees is responsible for investing the plan assets. It defines the investment strategy and determines the long-term target asset structure (investment policy), taking into account the legal requirements, objectives set, the benefit obligations and the foundations' risk capacity. The Board of Trustees delegates implementation of the investment policy in accordance with the investment strategy to an investment committee, which also comprises trustees from the Board of Trustees and a general manager. Plan assets are managed by external asset managers in line with the investment strategy.

Cash and cash equivalents are deposited with financial institutions with a credit rating of A or above.

Debt instruments (e.g. bonds) have a credit rating of at least BBB and quoted prices in active markets (level 1 of the fair value hierarchy). They can be investments in funds and direct investments.

Equity instruments are investments in equity funds. These generally have quoted prices in active markets (level 1 of the fair value hierarchy).

Real estate relates to both residential property and offices. These can be investments in quoted real estate funds (level 1 of the fair value hierarchy) or direct investments (level 3 of the fair value hierarchy). If real estate is held directly, it is valued by an independent expert.

Other investments consist of hedge funds, insurance linked securities (ILS), infrastructures, senior loans, private equity and receivables. There are receivables from Group companies amounted to CHF 11.2 million (previous year: CHF 34.2 million). Investments in hedge funds are classified as alternative investments. They are primarily used for risk management purposes. In most cases, quoted prices in an active market are not available for hedge funds investments (level 2 or level 3 of the fair value hierarchy).

The use of derivative financial instruments is only permitted if sufficient liquidity or underlying investments are available. Leverage and short selling are not permitted.

The pension funds manage the assets of 5,629 active members (previous year: 5,377) and 950 pensioners (previous year: 896).

Galenica does not use any pension fund assets.

Basis for measurement

 

2022

2021

Discount rate

2.10%

0.35%

Salary development

2.25%

1.00%

Pension development

0.00%

0.00%

Mortality (mortality tables)

BVG 2020 GT (CMI), 1.5%

BVG 2020 GT (CMI), 1.5%

Turnover

BVG 2020 (60% –100%)

BVG 2020 (60% –100%)

Sensitivity analysis

The discount rate, future salary development and mortality were identified as key actuarial assumptions. Changes in these assumptions would affect the defined benefit obligation (DBO) as follows:

Sensitivity analysis

 

 

2022

 

2021

in thousand CHF

Variations in assumptions

Impact on DBO

Variations in assumptions

Impact on DBO

Discount rate

+0.25%

–28,301

+0.25%

–39,043

 

-0.25%

30,258

-0.25%

41,236

Salary development

+0.25%

2,914

+0.25%

3,260

 

-0.25%

–2,913

-0.25%

–3,260

Mortality

+1 year

21,281

+1 year

32,388

 

-1 year

–21,921

-1 year

–32,423

The sensitivity analysis assumes potential changes in the above parameters as at year end. Every change in a key actuarial assumption is analysed separately. Interdependencies were not taken into account.

The pension obligations have an average duration of 14.4 years (previous year: 16.5 years).

Cash outflows for pension payments and other obligations can be budgeted reliably. The benefit plans collect regular contribution payments. Furthermore, the investment strategies safeguard liquidity at all times.

The employer contributions to the pension fund are estimated at CHF 31.2 million for 2023.

Accounting principles employee benefit plans

Galenica's defined benefit obligation (DBO) is assessed annually by independent pension actuaries using the projected unit credit method. This method considers employees' service in the periods prior to the reporting date and their future expected salary development. In addition, actuaries make use of statistical data such as employee turnover and mortality to calculate the defined benefit obligation.

Any deficit or surplus in funded defined benefit plans (when the fair value of plan assets falls short of or exceeds the present value of the defined benefit obligation) is recorded as a net defined benefit liability or asset. Galenica only recognises a net defined benefit asset if it has the ability to use the surplus to generate future economic benefits that will be available to Galenica in the form of a reduction in future contributions. If Galenica does not have the ability to use the surplus or it will not generate any future economic benefit, Galenica does not recognise an asset, but instead discloses the effect of this asset ceiling in the notes.

The components of defined benefit cost are service cost, net interest on the net defined benefit asset or liability and remeasurements of the net defined benefit asset or liability.

Service cost is a component of personnel costs and comprises current service cost, past service cost (including gains and losses from plan amendments) and gains and losses from plan settlements.

Net interest is determined by multiplying the net defined benefit liability or asset by a discount rate at the beginning of the reporting period. Net interest is included in the financial result.

Actuarial gains and losses result from changes in actuarial assumptions and differences between actuarial assumptions and actual outcomes. Actuarial gains and losses resulting from remeasuring the defined benefit plans are ­recognised immediately in comprehensive income as remeasurements of the net defined benefit liability or asset. This includes any differences in the return on plan assets (excluding interest, based on the discount rate). Remeasurements of the net defined benefit liability or asset are not reclassified through profit or loss at any point in time.

Galenica rewards employees for long service with jubilee benefits. These long-term benefits to employees are also measured using the projected unit credit method and included in employee benefit liabilities. These obligations are unfunded. Changes in obligations are recognised in profit or loss in personnel costs and interest expense as part of the financial expense, in line with the defined benefit plans.


24. Shareholders' equity

24. Shareholders' equity

24.1 Share capital and number of shares

Galenica has fully paid-up share capital of CHF 5,000,000, divided into 50,000,000 publicly listed shares with a par value of CHF 0.10 each, as at the reporting date. All shares have the same capital rights with the exception of the treasury shares which do not generate any dividends. Voting rights and restrictions on voting rights are described in detail in Galenica's Annual report 2022 in the chapter Corporate Governance (unaudited).

As at 31 December 2022, Galenica Ltd. has no authorised capital.

Number of shares

 

Total shares Galenica Ltd.

Treasury shares

Outstanding shares

Balance as at 31.12.2020

50,000,000

–501,440

49,498,560

Transactions with treasury shares

139,937

139,937

Balance as at 31.12.2021

50,000,000

–361,503

49,638,497

Transactions with treasury shares

177,763

177,763

Balance as at 31.12.2022

50,000,000

–183,740

49,816,260

The treasury shares are reserved for share-based payments to employees.

Accounting principles shareholders' equity

When treasury shares in Galenica Ltd. are acquired, they are deducted from shareholders' equity. Gains and losses from buying and selling treasury shares in Galenica Ltd. are recognised directly in shareholders' equity.

24.2 Changes in consolidated shareholder's equity

On 11 May 2022, the Annual General Meeting approved a dividend payment of CHF 104.4 million for the financial year 2021 (previous year: CHF 89.2 million), corresponding to CHF 2.10 per registered share (previous year: CHF 1.80). For this ­purpose, CHF 1.05 was taken from the reserves from capital contributions (previous year: CHF 0.90) and CHF 1.05 from retained earnings (previous year: CHF 0.90) of Galenica Ltd. The dividend was paid out to the shareholders on 17 May 2022.

In the reporting period, 7,704 treasury shares (previous year: 5,682 treasury shares) were bought at an average price of CHF 69.97 (previous year: CHF 65.59) and 185,467 treasury shares (previous year: 145,619 treasury shares) were issued as share-based payments.

The expense for share-based payment transactions, allocated over the vesting period, has been recognised in personnel costs and accrued in consolidated shareholders' equity.

The acquisition of non-controlling interests reduced consolidated shareholders' equity by CHF 4.1 million (previous year: CHF 0.1 million). As a result of business combinations CHF 1.4 million (previous year: none) were recognised as non-controlling interests. Remaining Shareholders have a put option to sell their shares to Galenica which gives rise to a financial liability. The changes in the carrying amount of this financial liability reduced consolidated shareholder’s equity by CHF 3.9 million (previous year: none).

The Board of Directors will submit a proposal to the Annual General Meeting on 3 May 2023 to pay a dividend of CHF 2.20 per share entitled to receive dividend for the financial year 2022. For this purpose, CHF 1.10 is to be taken from the reserves from capital contributions and CHF 1.10 from the retained earnings. However, no dividend will be paid on treasury shares. Based on the number of treasury shares as at 31 December 2022, the total dividend would amount to CHF 109.6 million.


25. Financial instruments

25. Financial instruments

25.1 Categories of financial instruments

Carrying amounts of financial instruments 2022

in thousand CHF

Financial assets at amortised costs

Financial liabilities at fair value through profit or loss

Financial liabilities at amortised costs

Total

Cash and cash equivalents

93,927

93,927

Trade and other receivables

529,479

529,479

Financial assets

23,693

23,692

Current financial liabilities

218,464

218,464

Current lease liabilities

50,173

50,173

Trade and other payables

346,083

346,083

Non-current financial liabilities

49,180

185,668 1)

234,848

Non-current lease liabilities

183,005

183,005

Total

647,098

49,180

983,393

 

1) Of which CHF 3.9 million are in connection to put options for non-controlling interests. Changes in the liability amount are recognised in equity

Carrying amounts of financial instruments 2021

in thousand CHF

Financial assets at amortised costs

Financial liabilities at fair value through profit or loss

Financial liabilities at amortised costs

Total

Cash and cash equivalents

164,982

164,982

Trade and other receivables

461,108

461,108

Financial assets

19,152

19,152

Current financial liabilities

43,052

43,052

Current lease liabilities

49,717

49,717

Trade and other payables

356,067

356,067

Non-current financial liabilities

24,000

382,544

406,544

Non-current lease liabilities

173,334

173,334

Total

645,242

24,000

1,004,714

 

Net gain/(loss) on financial instruments 2022

in thousand CHF

Financial assets at amortised costs

Financial liabilities at fair value through profit or loss

Financial liabilities at amortised costs

Total

Change in fair value of contingent consideration

1,077

1,077

Net gain/(loss) on foreign exchange

–104

–137

–241

Other financial result

–144

–55

–198

Interest income

426

426

Interest expense

–2,818

–2,818

Interest expense on lease liabilities

–2,455

–2,455

Interest income on impaired trade receivables

301

301

Expected credit losses

–1,781

–1,781

Net gain/(loss) recognised in profit or loss

–1,302

1,077

–5,466

–5,690

Net gain/(loss) on financial instruments 2021

in thousand CHF

Financial assets at amortised costs

Financial liabilities at amortised costs

Total

Net gain/(loss) on foreign exchange

304

–274

30

Other financial result

–36

–89

–125

Interest income

492

492

Interest expense

–2,701

–2,701

Interest expense on lease liabilities

–2,298

–2,298

Interest income on impaired trade receivables

245

245

Expected credit losses

–1,023

–1,023

Net gain/(loss) recognised in profit or loss

–17

–5,362

–5,380

Accounting principles financial instruments (measurement and categories)

Galenica classifies its financial assets and financial liabilities at initial recognition. Subsequent measurement is at amortised cost or fair value through profit or loss.

Measurement of financial assets and financial liabilities

With the exception of trade receivables, financial assets and financial liabilities are initially measured at fair value plus or minus directly attributable transaction costs, if those financial instruments are not subsequently measured at fair value through profit or loss. Trade receivables are initially measured at the transaction price resulting from the revenue transaction. All purchases and sales of financial instruments are recognised using trade date accounting.

Financial assets are generally derecognised when the contractual rights to the cash flows expire. Financial liabilities are derecognised when they have been settled.

For subsequent measurement Galenica distinguishes between the following types of financial assets and financial ­liabilities:

Financial assets at amortised cost

This category includes trade and other receivables as well as loans and other financial assets such as rental deposits and securities. These financial assets are subsequently measured at amortised cost using the effective interest rate method less expected credit losses. Expected credit losses are based on historical credit loss experience, adjusted for forward-­looking factors specific to the debtors and the economic environment. Changes in expected credit losses due to changes in estimated credit risk are determined at each reporting date and charged to profit or loss. Galenica uses the simplified approach to determine its bad debt allowances for trade receivables using lifetime expected credit losses. Expenses for expected credit losses comprise the change in bad debt allowance and receivables directly ­written off.

Uncollectible loans and receivables are only derecognised if a certificate of loss has been issued.

Financial liabilities at fair value through profit or loss

Financial liabilities classified as at fair value through profit or loss correspond to contingent consideration liabilities from business combinations.

Financial liabilities at amortised costs

Financial liabilities mainly comprise trade and other payables as well as financial liabilities and bonds and are ­measured at amortised cost using the effective interest rate method.

25.2 Fair value measurement

Fair value

 

 

2022

 

2021

in thousand CHF

Carrying amount

Fair value

Carrying amount

Fair value

Bond (fair value level 1)

380,194

370,830

380,306

389,270

With the exception of the bond in current and non-current financial liabilities, the carrying amounts of all financial instruments approximate to their fair value or fair value disclosure is not required (lease liabilities).

Fair value of contingent consideration liabilities from business combinations (level 3 of the fair value hierarchy)

Fair value of contingent consideration liabilities from business combinations (level 3 of the fair value hierarchy)

in thousand CHF

2022

2021

1 January

24,000

70

Arising from business combinations

26,256

24,000

Change in fair value (recognised in profit and loss)

–1,077

Payments (cash out)

–70

31 December

49,180

24,000

Sensitivity analysis of contingent consideration liabilities from business combinations

Determining the contingent consideration liability of the business combination of Aquantic AG EBITDA of the acquired business was identified as a key assumption. Galenica has recorded the amount of CHF 3.4 million as contingent consideration liability based on the expected future performance for 2025 and 2026 of the acquired business. The possible future cash outflows range between zero and CHF 5.5 million. An increase in the forecasted EBITDA of the acquired business 2025 and 2026 by 5% would increase the contingent consideration liability by CHF 0.4 million. In return, a decrease of the forecasted EBITDA 2025 and 2026 by 5% would reduce the contingent consideration liability by CHF 0.4 million.

Determining the contingent consideration liability of the business combination of Bahnhof Apotheke Langnau AG future net sales for 2026 and 2027 of the acquired cannaplant business was identified as a key assumption. Galenica has recorded the amount of CHF 22.9 million as contingent consideration liability based on assumed probability-adjusted net sales and the expected achievement of other operational targets. The possible future cash outflows range between zero and CHF 29.0 million. An increase in the expected net sales of the acquired business 2026 and 2027 by 5% would increase the contingent consideration liability by CHF 2.0 million. In return, a decrease of the expected net sales 2026 and 2027 by 5% would reduce the contingent consideration liability by CHF 2.0 million.

Determining the contingent consideration liability of business combinations from previous years net sales of the acquired businesses was identified as key assumption. Galenica has recorded the discounted maximum amount as contingent consideration liability, an increase in the forecasted net sales of the acquired businesses would hence have no impact on the contingent consideration liability. In return, a decrease of the forecasted net sales of the forecasted net sales 2024 by 5% would reduce the contingent consideration liability by CHF 2.2 million.

Accounting principles financial instruments (fair value measurement)

Fair value

Financial liabilities contain contingent consideration liabilities from business combinations which are mea­sured at fair value. The fair value of these financial instruments is measured based on the expected cash flows in due consideration of the probability of occurrence and the current market interest rates (level 3 of the fair value hierarchy).

The fair values of the fixed-rate bonds derived from quoted prices (level 1 of the fair value hierarchy).

Fair value hierarchy

Galenica measures financial instruments at fair value using the following hierarchies for determining the fair value:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
  • Level 3: Unobservable inputs for the asset or liability. These inputs reflect the best estimates of Galenica based on criteria that market participants would use to determine prices for assets or liabilities at the reporting date.

26. Financial risk management

26. Financial risk management

Galenica is exposed to various financial risks and liquidity requirements. Galenica's financing and financial risk management activities are centralised into Group Treasury, which manages financial exposures of Galenica on account of changes in interest rates, currency risks, credit risks and liquidity in a manner that is consistent with underlying business risks and in line with the treasury policy approved by the Board of Directors as well as internal guidelines on cash and liability management. In addition, capital management of Galenica is also mainly exercised and monitored at Group level.

It is Galenica's policy not to enter into any speculative financial arrangements and to ensure matching maturities. Together, the risk management and monitoring measures described below are designed to limit negative impact on the financial statements.

26.1 Liquidity risk

Liquidity risk management

The aim of liquidity risk management is to provide sufficient cash to meet Galenica's financial liabilities on time while maintaining the flexibility to take advantage of market opportunities and optimum investment conditions. Group Treasury is responsible for raising current and non-current loans as well as for decisions on investments. Apart from financing operations, Galenica's credit standing enables it to borrow funds at an advantageous rate. To ensure that Galenica can meet its payment obligations in good time, liquidity is monitored centrally. Group Treasury monitors the cash flows using rolling liquidity planning. This takes into account the maturities of the financial instruments as well as the cash flows from operating activities.

Maturity profile of financial liabilities 2022

in thousand CHF

Carrying amount

Total undiscounted cash flows

up to 3 months

3 to 12 months

1 to 5 years

Maturities more than 5 years

Trade and other payables

346,083

346,083

345,855

228

Current financial liabilities

18,431

18,431

18,422

9

Current lease liabilities

50,173

52,710

13,371

39,339

Non-current financial liabilities

54,688

57,366

57,366

Bonds

380,194

388,200

202,800

185,400

Non-current lease liabilities

183,005

189,530

138,693

50,837

Total

1,032,573

1,052,320

377,648

242,376

381,459

50,837

Maturity profile of financial liabilities 2021

in thousand CHF

Carrying amount

Total undiscounted cash flows

up to 3 months

3 to 12 months

1 to 5 years

Maturities more than 5 years

Trade and other payables

356,067

356,282

353,850

2,432

Current financial liabilities

43,052

43,052

42,500

552

Current lease liabilities

49,717

51,720

13,279

38,441

Non-current financial liabilities

26,238

26,238

26,088

150

Bonds

380,306

391,000

2,800

388,200

Non-current lease liabilities

173,334

179,407

130,522

48,885

Total

1,028,714

1,047,699

409,629

44,225

544,810

49,035

The values presented above are contractually agreed undiscounted cash flows including interest. Wherever the contractually agreed payment amount is liable to change before maturity as a result of variable interest rates, the payment amounts based on the interest rates at the reporting date are disclosed.

26.2 Credit risk

Credit risk management

Credit risk arise when a customer or a third party fails to meet its contractual obligations and causes Galenica a financial loss. Credit risk are minimised and monitored by restricting business relations to known, reliable partners.

Corporate policy ensures that credit checks are performed for customers who are supplied on credit. Trade receivables are subject to active risk management procedures. They are continually monitored and credit risk is reviewed in the process of reporting to management. Allowances for expected credit losses are made in accordance with uniform guidelines on the measurement of outstanding receivables.

In addition, credit risk arise in relation to financial assets, comprising cash and cash equivalents, securities, loans and ­certain derivative financial instruments. The creditworthiness of the counterparties is regularly monitored and reported to management.

Financial assets subject to credit risk

in thousand CHF

2022

2021

Cash and cash equivalents (without cash on hand)

92,377

163,336

Trade and other receivables

529,479

461,108

Loans and other financial assets

14,632

13,719

Financial assets subject to credit risk

636,488

638,164

The financial assets subject to credit risk are primarily receivables.

Galenica applies internal risk management guidelines to identify concentrations of credit risk.

Galenica's financial assets are not exposed to a concentration of credit risk.

No past due financial assets have been renegotiated. Based on past experience, Galenica considers the creditworthiness of non-past due trade receivables to be good. Trade receivables past due are analysed on an ongoing basis. These receivables are accounted for using individual bad debt allowances, adjusted for forward-looking factors specific to the debtors and the economic environment.


27. Capital management

27. Capital management

The capital of Galenica is managed and monitored at Group level. The objective of capital management at Galenica is to ensure the continuity of operations, increase enterprise value on a sustainable basis, provide an adequate return to investors, provide the financial resources to enable investments in areas that deliver future benefits for patients and customers and further returns to investors.

Galenica defines the capital that it manages as invested interest-bearing liabilities and equity. Galenica uses a system of financial control based on various key performance indicators. Capital is monitored based on the gearing, for example, which expresses net debt as a percentage of shareholders' equity including non-controlling interests and is communicated regularly to management as part of internal reporting.

Net debt, shareholders' equity and gearing are shown in the table below.

Net debt, shareholder's equity and gearing

in thousand CHF

2022

2021

Current financial liabilities 1)

218,464

43,019

Current lease liabilities

50,173

49,717

Non-current financial liabilities 1)

181,389

381,697

Non-current lease liabilities

183,005

173,334

Cash and cash equivalents

–93,927

–164,982

Interest-bearing receivables

–11,347

–1,527

Net debt

527,758

481,257

 

 

 

Equity attributable to shareholders of Galenica Ltd.

1,245,580

1,227,538

Non-controlling interests

3,881

6,140

Shareholders' equity

1,249,461

1,233,677

 

 

 

Gearing

42.2%

39.0%

1) Excluding non-interest-bearing financial liabilities

Galenica has no covenants requiring a minimum level of equity, nor is Galenica subject to any externally regulated capital requirements as seen in the financial services sector.


28. Share-based payments

28. Share-based payments

Remuneration for members of the Board of Directors

The members of the Board of Directors receive fixed annual remuneration and can choose whether to receive it in full or in part (50%) in shares of Galenica Ltd. The amount settled in shares is paid out with a discount of 25%. The shares may not be traded for the first five years.

The fair value of the shares granted is equivalent to the amount to be paid out in shares plus the discount of 25%.

Share plan for members of senior management

According to the participation plan, members of senior management receive their performance-related bonus partly in cash and partly in shares of Galenica Ltd. The proportion of cash to shares is set out in the regulations and is based on the salary grade of the recipient. In addition, all members of senior management are obliged to hold a number of shares of Galenica. The amount to be settled in shares is paid out in the form of shares of Galenica Ltd. with a discount of 25%. The shares may not be traded for the first five years.

The fair value of the shares granted is equivalent to the amount to be paid out in shares plus the discount of 25%.

Long-term incentive plan (LTI)

Members of the Corporate Executive Committee of Galenica and certain members of senior management participate in a LTI plan for the allocation of performance share units. The number of these performance share units is based on the extent to which defined long-term performance targets such as the Galenica Economic Profit and the relative total shareholders return (TSR) are attained. TSR is measured as a percentile ranking against a peer group of relevant companies. A LTI plan always runs for a vesting period of three years. At the beginning of each financial year a new LTI plan with a new vesting period of three years is issued. At the start of the vesting period a defined number of performance share units are individually allocated. The number of performance share units allocated is dependent on the defined percentage of the annual salary incorporated into the LTI plan as well as the effective share price at the time of the allocation. At the end of the vesting period performance share units are paid out to eligible beneficiaries in the form of shares of Galenica Ltd.

19,613 performance share units (previous year: 21,916 performance share units) were granted to beneficiaries at a fair value of CHF 58.20 (previous year: CHF 52.75) at the beginning of the reporting period for the 2022 LTI plan.

Employee share plan

Employees of Galenica are entitled to buy a fixed number of shares of Galenica Ltd. at a preferential price. All employees who, at the time of the purchase offer, are not under notice and have an employment contract of unlimited duration are entitled to acquire shares.

The purchase price for the shares is calculated at the time of the purchase offer based on the average price for the previous month less a 30% discount. The price discount is borne by the employer. The shares may not be traded for the first three years.

In the reporting period, employees purchased 75,607 shares of Galenica Ltd. (previous year: 76,461 shares) at a price of CHF 53.50 (previous year: CHF 46.80). This includes a discount of CHF 22.90 (previous year: CHF 20.06) per share.

Share-based payment expense

in thousand CHF

2022

2021

Remuneration for members of the Board of Directors

907

880

Share plan for members of senior management

3,087

3,126

Long-term incentive plan (LTI)

1,383

1,180

Employee share plan

1,731

1,534

Total

7,109

6,719

Accounting principles share-based payments

The employees of Galenica participate in share-based payment plans. These plans qualify as equity-settled share-based payment plans and are settled in shares of Galenica Ltd.

The share-based payments are measured at fair value at grant date.

Galenica estimates the number of Galenica shares which are expected to vest. The expense is recognised over the ­vesting period as part of personnel costs and an increase in shareholders' equity for the best estimate of the number of shares Galenica expects to vest. Expense adjustments due to changes in expectations regarding the number of Galenica shares expected to vest are recognised in personnel costs for the relevant reporting period.

If the arrangements are modified during the life of an equity-settled share-based payment plan, any incremental fair value is recognised over the remaining vesting period. If the plan is cancelled, the rights are assumed to be exercised at the date of cancellation and the expense is recognised immediately in profit or loss. If the cancelled plan is replaced by a new share-based payment plan identified as a replacement award, the expense is recognised in the same way as for modifications.


29. Related party transactions

29. Related party transactions

Related parties include all companies of the Galenica Group as well as associates, joint ventures, pension funds, members of the Board of Directors and members of the Corporate Executive Committee.

Related party transactions

As at the reporting date, trade receivables and loans to associates and joint ventures amounted to CHF 21.3 million (­previous year: CHF 12.2 million). The trade receivables and loans primarily relate to Coop Vitality. The trade payables and loans from associates and joint ventures amounted to CHF 5.6 million (previous year: CHF 3.8 million) and the financial liabilities to pension funds amounted to CHF 12.1 million (previous year: CHF 37.5 million).

The transactions with associates and joint ventures shown in the table below largely concern transactions with Coop Vitality and are all realised at market-based prices. The invoice payment for the sale of goods and services are due within 30 days and is payable in CHF. 

Related party transactions

 

 

2022

 

2021

in thousand CHF

Associates and joint ventures

Other related parties

Associates and joint ventures

Other related parties

Sale of goods

162,134

156,535

2,363

Income from services

7,900

7,367

Other income

17

17

Purchase of goods

2,719

2,353

Other operating costs

67

Financial income

106

128

Financial expenses

203

7

Remuneration of the Board of Directors and the Corporate Executive Committee

Remuneration of the Board of Directors and the Corporate Executive Committee

in thousand CHF

2022

2021

Remuneration

4,224

3,890

Social security costs and pension expenses

1,054

899

Share-based payments

2,537

2,198

Total

7,815

6,986


30. Subsequent events

30. Subsequent events

The following transactions occurred between 31 December 2022 and 2 March 2023, the date on which the consolidated financial statements 2022 were released for publication.

Acquisition of pharmacies. Galenica acquired 100 % of the interests in pharmacies at various locations in Switzerland. 

The purchase consideration was CHF 9.7 million, the fair value of the provisional net assets resulting from these additions was estimated at CHF 1.0 million at the acquisition date. Since the transactions were concluded shortly before the consolidated financial statements were issued, no further information was available to disclose the additional information required by IFRS.

Acquisition of Padma AG. On 30 January 2023 Galenica  acquired 100% of the shares in the Swiss company Padma AG. Padma specialises in the manufacture and distribution of herbal formulations based on Tibetan medicine.

The purchase consideration amounted to CHF 24.9 million, of which CHF 20.9 million was settled in cash. The contingent considerations in the amount of CHF 4.0 million is due in 2026 if certain financial and operational targets are achieved. Since the transactions was concluded shortly before the consolidated financial statements were issued, it was not possible to disclose the additional information required by IFRS.

There were no further significant events after the reporting date.


31. Group companies

31. Group companies 

Group companies Products & Care

 

 

 

 

 

2022

2021

Group companies

Registered office

Method of consolidation

Currency

Share capital in thousand

Equity interest

Equity interest

Products & Care

 

 

 

 

 

 

Amavita Health Care Ltd.

CH-Niederbipp

full

CHF

100

100%

100%

Bahnhof Apotheke Langnau AG

CH-Langnau im Emmental

full

CHF

100

100%

-

Bahnhof Apotheken Thun AG

CH-Thun

full

CHF

200

50%

50%

Bichsel AG 2)

CH-Bern

full

CHF

1,000

100%

100%

Bichsel Interlaken Holding AG 1)

CH-Interlaken

full

CHF

100

100%

95%

Careproduct AG 3)

CH-Oberwil-Lieli

-

100%

Coop Vitality AG

CH-Bern

at equity

CHF

5,000

49%

49%

Coop Vitality Health Care GmbH 1)

CH-Niederbipp

at equity

CHF

20

49%

49%

Coop Vitality Management AG

CH-Bern

at equity

CHF

100

49%

49%

Curarex swiss AG

CH-Zuchwil

full

CHF

100

100%

100%

Dr. A.&L. Schmidgall GmbH & Co KG 1)

AT-Vienna

full

EUR

145

100%

100%

Dr. U. Reinhard AG 4)

CH-Winterthur

-

100%

Emeda Ltd.

CH-Wangen-Brüttisellen

at equity

CHF

200

50%

-

GaleniCare Ltd.

CH-Bern

full

CHF

700

100%

100%

GaleniCare Management Ltd.

CH-Bern

full

CHF

500

100%

100%

G-Pharma AG

CH-Niederbipp

full

CHF

100

100%

100%

Grosse Apotheke Dr. G. Bichsel AG 1)

CH-Interlaken

full

CHF

200

100%

95%

Hedoga AG

CH-Villars-sur-Glâne

full

CHF

100

100%

100%

Laboratorium Dr. G. Bichsel AG 1)

CH-Unterseen

full

CHF

200

100%

95%

Lifestage Solutions Ltd.

CH-Otelfingen

full

CHF

152

100%

100%

Medifilm Ltd. 1)

CH-Oensingen

full

CHF

1,300

100%

100%

Medinform AG

CH-Zürich

full

CHF

100

50%

-

MediService Ltd.

CH-Zuchwil

full

CHF

363

100%

100%

Puravita AG

CH-Speicher

at equity

CHF

130

23%

-

Puresense AG 5)

CH-Gaiserwald

-

40%

Schmidgall GmbH 1)

AT-Vienna

full

EUR

36

100%

100%

Spagyros Ltd.

CH-Worb

full

CHF

860

100%

100%

Sun Store Health Care Ltd.

CH-Niederbipp

full

CHF

100

100%

100%

Swiss Pharma GmbH

DE-Rülzheim

full

EUR

51

100%

100%

Verfora Ltd.

CH-Villars-sur-Glâne

full

CHF

100

100%

100%

Winconcept Ltd.

CH-Bern

full

CHF

100

100%

100%

Zentral Apotheke Heerbrugg AG 6)

CH-Au

full

CHF

100

100%

100%

1) Not directly held by Galenica Ltd.

2) The company was renamed "Bichsel AG" from "Galenica Investment AG"

3) The company was sold as at 20 September 2022

4) The company was merged into Galenicare Ltd.

5) The company was sold as at 9 November 2022

6) The company was renamed "Zentral Apotheke Heerbrugg AG" from "Pharmapool Zentralapotheke AG"

Group companies Logistics & IT and Group Services

 

 

 

 

 

2022

2021

Group companies

Registered office

Method of consolidation

Currency

Share capital in thousand

Equity interest

Equity interest

Logistics & IT

 

 

 

 

 

 

1L Logistics AG

CH-Burgdorf

full

CHF

100

100%

100%

Alloga Ltd.

CH-Burgdorf

full

CHF

8,332

100%

100%

Aquantic AG

CH-Zeiningen

full

CHF

100

100%

-

Dauf SA 1)

CH-Lugano

full

CHF

100

92.88%

91.60%

Galexis Ltd.

CH-Niederbipp

full

CHF

25,000

100%

100%

HCI Solutions Ltd.

CH-Bern

full

CHF

100

100%

100%

Pharma-Info AG 1)

CH-Biel

at equity

CHF

100

49%

49%

PharmaBlist Ltd. 1)

CH-Widnau

full

CHF

100

100%

100%

Pharmapool Ltd. 1)

CH-Widnau

full

CHF

962

100%

100%

Unione Farmaceutica Distribuzione SA

CH-Lugano

full

CHF

2,000

92.88%

91.60%

Group Services

 

 

 

 

 

 

Galenica Finanz Ltd.

CH-Bern

full

CHF

100

100%

100%

1) Not directly held by Galenica Ltd.


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