Notes to the financial statements of Galenica Ltd.
Principles
The financial statements of Galenica Ltd. with registered office in Bern, Switzerland, have been prepared in accordance with Article 957 et seqq. of Title 32 of the Accounting law based on the Swiss Code of Obligations (CO). Where not prescribed by law, the significant accounting and valuation principles applied are described below.
Galenica Ltd. has prepared its consolidated financial statements in accordance with a recognised accounting standard (IFRS Accounting Standards). In accordance with the CO, the Company decided to forgo presenting additional information on audit fees in the notes as well as a cash flow statement.
Financial income
Financial income includes the gain on partial sale of subsidiaries of CHF 71.6 million (previous year: none) and a reversal of a bad debt allowance on non-current intercompany loans of CHF 15.0 million (previous year: CHF 15.0 million). In 2022, financial income includes a reversal of an impairment on investments of CHF 35.5 million.
Other income
Other income includes group-internal management fees of CHF 48.3 million (previous year: CHF 50.5 million) and IT services of CHF 75.3 million (previous year: CHF 66.4 million). Revenue is recognised when the service is provided.
Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment. Depreciation is charged on a straight-line basis over the assets' useful lives.
Property, plant and equipment
|
in thousand CHF |
2023 |
2022 |
|
Furniture, fittings |
876 |
66 |
|
IT equipment |
6,488 |
9,379 |
|
Vehicles |
4,905 |
4,578 |
|
Total net carrying amount |
12,269 |
14,023 |
Intangible assets
Intangible assets include purchased or internally developed software. These items are measured at cost less accumulated amortisation and impairment. Amortisation is charged on a straight-line basis over the estimated economic useful life.
Financial assets
Galenica holds equity instruments of CHF 115.9 million (previous year: CHF 4.7 million). Those financial assets are measured at cost less accumulated impairment. Furthermore, financial assets include non-current loans to Group companies of CHF 74.7 million (previous year: CHF 74.7 million), to joint ventures of CHF 7.1 million (previous year: CHF 4.9 million) and to other companies of CHF 0.9 million (previous year: 1.4 million).
Subordinated loans
As at 31 December 2023, subordinated loans to Group companies amounted to CHF 1.9 million (previous year: CHF 1.9 million) and to third parties amounted to CHF 0.9 million (previous year: CHF 1.4 million).
Investments
An overview of the investments that are directly or indirectly controlled by Galenica Ltd. is provided in note 32 to the Consolidated financial statements 2023 of the Galenica Group.
Interest-bearing liabilities
The current and non-current interest-bearing liabilities are recognised at nominal value.
Interest-bearing liabilities
|
in thousand CHF |
2023 |
2022 |
|
Bond 0.50 % (15 June 2017–15 June 2023) ISIN CH0367206692 |
– |
200,000 |
|
Bond 1.00 % (15 June 2017–15 December 2026) ISIN CH0367206700 |
180,000 |
180,000 |
|
Bond 2.35% (8 Mai 2023–8 November 2029) ISIN CH1255924453 |
240,000 |
– |
|
Interest-bearing liabilities |
420,000 |
380,000 |
|
– of which current interest-bearing liabilities |
– |
200,000 |
|
– of which non-current interest-bearing liabilities |
420,000 |
180,000 |
Lease obligations
The lease obligations, which do not expire or cannot be terminated within 12 months, have the following maturity structure. These amounts include the payments owed from rental and leasing agreements up to the end of the contract or the expiry of the notice period.
Lease obligations
|
in thousand CHF |
2023 |
2022 |
|
Within 1 year |
20 |
1,223 |
|
In 2 to 5 years |
3,663 |
1,854 |
|
In more than 5 years |
23,772 |
25,600 |
|
Total |
27,455 |
28,677 |
Share capital
As at 31 December 2023, the share capital of Galenica amounted to CHF 5,000,000, divided into 50,000,000 fully paid-up and publicly listed shares with nominal value of CHF 0.10 each.
Authorised capital
As at 31 December 2023, Galenica Ltd. has no authorised capital.
Reserves from capital contributions
The reserves from capital contributions have been reduced to CHF 199.9 million (previous year: CHF 254.8 million) due to the dividend paid out to the shareholders on 9 May 2023 taken from the reserves from capital contributions in the amount of CHF 54.9 million (previous year: CHF 52.2 million).
Release of hidden reserves
In 2023, hidden reserves of CHF 15.0 million were released (previous year: CHF 15.0 million).
Contingent liabilities
As at 31 December 2023, total contingent liabilities amounted to CHF 564.6 million (previous year: CHF 347.4 million), including issued guarantees to Group companies of CHF 364.5 million (previous year: CHF 217.2 million) as well as CHF 200.0 million (previous year: CHF 130.0 million) for guarantees to secure intraday transactions for Group companies in connection with the zero balance cash pooling.
Full-time equivalents
The average number of full-time equivalents for the reporting period amounted to 447 (previous year: 413).
Treasury shares
Treasury shares
|
|
|
2023 |
|
2022 |
|
|
Number |
in CHF |
Number |
in CHF |
|
1 January |
183,740 |
|
361,503 |
|
|
1st quarter |
|
|
|
|
|
– Bought |
3,553 |
264,170 |
2,161 |
141,737 |
|
– Sold |
–44,424 |
–3,213,343 |
–59,930 |
–3,874,139 |
|
2nd quarter |
|
|
|
|
|
– Bought |
70,752 |
5,169,896 |
1,288 |
93,873 |
|
– Sold |
–34,600 |
–2,548,636 |
–39,680 |
–2,597,453 |
|
3rd quarter |
|
|
|
|
|
– Bought |
4,794 |
335,636 |
1,630 |
116,782 |
|
– Sold |
–93,044 |
–6,600,541 |
–85,857 |
–6,559,475 |
|
4th quarter |
|
|
|
|
|
– Bought |
77,049 |
5,240,448 |
2,625 |
186,644 |
|
– Sold |
– |
– |
– |
– |
|
31 December |
167,820 1) |
|
183,740 1) |
|
1) of which 15,495 owned by subsidiaries (previous year: 183,740)
The treasury shares are reserved for share-based payments to employees.
Further disclosures
In 2023, 14,047 shares (previous year: 12,307 shares) with fair value of CHF 1,013,491 (previous year: CHF 906,616) have been allocated to the members of the Board of Directors.
In 2023, 10,701 performance share units (previous year: 11,957 performance share units) with fair value at grant date of CHF 702,199 (previous year: CHF 689,956) have been allocated to the members of the Corporate Executive Committee. In 2023, 3,797 performance share units (previous year: 3,857 performance share units) with fair value at grant date of CHF 249,173 (previous year: CHF 222,585) have been allocated to other employees of Galenica Ltd.
Shareholders' equity
Shareholders' equity developed as follows:
Shareholders' equity
|
in thousand CHF |
Share capital |
Reserves from capital contributions |
General legal retained earnings |
Reserves for treasury shares 1) |
Treasury shares |
Free reserve |
Available earnings |
Shareholders' equity |
|
Balance as at 31 December 2020 |
5,000 |
351,612 |
1,000 |
11,600 |
– |
102,400 |
77,240 |
548,852 |
|
Allocation to free reserve |
|
|
|
|
|
32,000 |
–32,000 |
– |
|
Adjustment to the reserves for treasury shares |
|
|
|
–8,600 |
|
8,600 |
|
– |
|
Dividends |
|
–44,602 |
|
|
|
|
–44,602 |
–89,204 |
|
Profit for the year |
|
|
|
|
|
|
228,676 |
228,676 |
|
Balance as at 31 December 2021 |
5,000 |
307,010 |
1,000 |
3,000 |
– |
143,000 |
229,314 |
688,324 |
|
Allocation to free reserve |
|
|
|
|
|
176,000 |
–176,000 |
– |
|
Adjustment to the reserves for treasury shares |
|
|
|
5,000 |
|
–5,000 |
|
– |
|
Dividends |
|
–52,222 |
|
|
|
|
–52,222 |
–104,443 |
|
Profit for the year |
|
|
|
|
|
|
168,099 |
168,099 |
|
Balance as at 31 December 2022 |
5,000 |
254,789 |
1,000 |
8,000 |
– |
314,000 |
169,192 |
751,980 |
|
Allocation to free reserve |
|
|
|
|
|
114,000 |
–114,000 |
– |
|
Adjustment to the reserves for treasury shares |
|
|
|
–6,900 |
|
6,900 |
|
– |
|
Addition of treasury shares |
|
|
|
|
–10,725 |
|
|
–10,725 |
|
Dividends |
|
–54,881 |
|
|
|
|
–54,881 |
–109,761 |
|
Profit for the year |
|
|
|
|
|
|
224,262 |
224,262 |
|
Balance as at 31 December 2023 |
5,000 |
199,908 |
1,000 |
1,100 |
–10,725 |
434,900 |
224,573 |
855,756 |
1) Owned by subsidiaries
Proposal of the Board of Directors for the appropriation of available earnings and reserves from capital contributions
At the Annual General Meeting as at 10 April 2024, the Board of Directors will propose the following allocation of available earnings and reserves from capital contributions:
|
in CHF |
2023 |
2022 |
|
Appropriation of available earnings |
|
|
|
Balance brought forward |
311,094 |
1,092,850 |
|
Profit for the year |
224,261,845 |
168,098,939 |
|
Available earnings at the disposal of the Annual General Meeting |
224,572,939 |
169,191,789 |
|
Dividend per share CHF 1.10 (2022: CHF 1.10) |
-55,000,000 1) |
–54,880,695 |
|
Allocation to free reserve |
–169,000,000 |
–114,000,000 |
|
Balance to be carried forward |
572,939 |
311,094 |
|
|
|
|
|
Appropriation of reserves from capital contributions |
|
|
|
Reserves from capital contributions |
199,907,823 |
254,788,518 |
|
Dividend per share CHF 1.10 (2022: CHF 1.10) paid out of reserves from capital contributions |
-55,000,000 1) |
–54,880,695 |
|
Balance to be carried forward |
144,907,823 |
199,907,823 |
1) The proposed dividend payment and appropriation of reserves from capital contributions covers all issued shares. However, no dividend will be paid on treasury shares. As a result, the total dividend amount payable depends on the number of treasury shares held on the distribution date. Based on the number of treasury shares held as at 31 December 2023, the total dividend would amount to CHF 109.6 million
The Board of Directors proposes to issue a dividend for fiscal year 2023 of CHF 2.20 per registered share. For this purpose, CHF 1.10 is to be taken from the reserves from capital contributions and CHF 1.10 from retained earnings. On the part taken from the reserves from capital contributions, the dividend can be distributed without deduction of Swiss withholding tax of 35%. Natural persons living in Switzerland are not liable for income tax on the dividend paid from the reserves from capital contributions.
Assuming the Annual General Meeting approves the dividend, payments will be made on 16 April 2024. The last trading day with entitlement to receive the dividend is 11 April 2024. The shares will be traded ex-dividend on 12 April 2024.