Letter from the Chair of the Remuneration Committee

Dear Shareholders,

On behalf of the Board of Directors and the Remuneration Committee of Galenica, I am pleased to present the Remuneration report for 2023.

The remuneration policy of Galenica aims to attract, motivate and retain best-in-class employees who are entrepreneurially minded, success-oriented and have high personal standards. The remuneration system is designed to support the achievement of the strategic goals defined by the Board of Directors and to provide appropriate remuneration in a competitive employment market and in a complex sector. It is aligned with the long-term Group strategy and its pay-for-performance philosophy. The remuneration system of Galenica aims to strengthen the overall market position of the company while delivering the expected returns to its shareholders.

The Galenica Group achieved a solid result in 2023, but did not quite reach the ambitious targets set at the beginning of the year. As a result, Galenica realised a payout factor of 47.2% for the short-term bonus while the vesting multiple of the LTI plan 2021–2023 due in 2024 was 132.9%. Further details on the performance achieved and the payouts under the incentive plans are provided in this report.

Following specific changes to the remuneration system of the Corporate Executive Committee back in 2021, two additional adaptions became effective as of the reporting year. On the one hand, the individual objectives in the STI were replaced by a collective environmental, social and governance (ESG) component. This means that while ESG had been included in one of the three individual objectives in 2022, it made up the entire 25% in 2023. The following two collective ESG KPIs were applied: Net Promoter Score (NPS) and employees who recommend Galenica as an employer, both being fundamental measures and key strategic goals for Galenica. On the other hand, the clawback and malus provisions were introduced in the STI as of 2023, further fostering the governance mechanisms in place. The Remuneration Committee concluded that the overall remuneration structure is appropriate and in line with market practice and that no further changes were necessary.

With respect to the remuneration programme for the Board of Directors, the Remuneration Committee conducted a benchmarking analysis and review of the remuneration structure and levels in 2022. The overall structure and levels were considered in line with market practice and, consequently, remained unchanged. However, the disclosure of the remuneration was improved by showing both net and gross figures. No adaptions were made in the reporting year or are currently planned going forward.

The Remuneration Committee will continue to regularly review the remuneration system to ensure that it is still fit-for-purpose in the evolving context in which the company operates.

The Remuneration report provides detailed information on our remuneration system and the remuneration awarded in 2023 to the Corporate Executive Committee and the Board of Directors and will be submitted to the shareholders at the Annual General Meeting on 10 April 2024 for a non-binding consultative vote.

We would like to thank our employees for their commitment and hard work, and you, dear shareholders, for your trust.

Bertrand Jungo

Chairman of the Remuneration Committee