Organic growth of net sales - Annual report 2023

Organic growth of net sales shows the development of net sales for the operating segments Products & Care and Logistics & IT excluding the effects of acquisitions, new license agreements, openings and closures of pharmacies (effect of net expansion). It provides a “like-for-like” comparison with previous periods. In the business area Retail (B2C), organic growth of net sales is calculated only including points of sales with a full year period comparison. In the business area Professionals (B2B), organic growth of net sales is calculated only including existing business activities with a full year period comparison. In order to show the impact of mandatory price reductions of medications reimbursed by health insurers on net sales transparently, organic growth of net sales is also disclosed without the effect of mandatory price reductions.

Organic growth of net sales 2023

in thousand CHF	Retail (B2C)	Professionals (B2B)	Products & Care 1)	Wholesale	Logistics & IT Services	Logistics & IT 1)
Net sales	1,385,564	256,064	1,635,633	2,952,732	143,965	3,076,988
Change to previous period	1.8%	11.9%	3.3%	4.7%	10.1%	4.9%

Effect of net expansion	3,979 2)	12,686 3)	16,666	–	928 3)	928
In % of net sales of previous period	0.3%	5.5%	1.1%	0.0%	0.7%	0.0%

Net sales excluding effect of net expansion	1,381,584	243,378	1,618,967	2,952,732	143,037	3,076,059
Organic growth of net sales	1.5%	6.4%	2.2%	4.7%	9.4%	4.9%

Mandatory price reductions 4)	18,069			51,300
In % of net sales of previous period	1.3%			1.8%

Net sales excluding effect of net expansion and mandatory price reductions	1,399,653			3,004,032
Organic growth of net sales excluding price reductions	2.8%			6.5%

1) Including eliminations of intercompany net sales

2) The effect of net expansion is calculated only including point of sales without a full year period comparison (acquisitions, openings and closure of pharmacies)

3) The effect of net expansion is calculated only including business activities without a full year period comparison (acquisitions and new license agreements)

4) Mandatory price reductions of medications reimbursed by health insurers of the specialities list (SL/LS) released by the Federal Office of Public Health (FOPH), calculated based on volumes of previous period

Organic growth of net sales 2023 Products & Care

in thousand CHF	Local Pharmacies	Pharmacies at Home	Retail (B2C) 1)	Products & Brands	Services for Professionals	Professionals (B2B) 1)
Net sales	1,306,931	78,918	1,385,564	177,132	78,934	256,064
Change to previous period	1.6%	6.6%	1.8%	12.3%	11.0%	11.9%

Effect of net expansion	2,069 2)	1,911 2)	3,979 2)	11,449 3)	1,237 3)	12,686 3)
In % of net sales of previous period	0.2%	2.6%	0.3%	7.3%	1.7%	5.5%

Net sales excluding effect of net expansion	1,304,862	77,008	1,381,584	165,683	77,697	243,378
Organic growth of net sales	1.4%	4.0%	1.5%	5.0%	9.3%	6.4%

Mandatory price reductions 4)	18,069		18,069
In % of net sales of previous period	1.4%		1.3%

Net sales excluding effect of net expansion and mandatory price reductions	1,322,931		1,399,653
Organic growth of net sales excluding price reductions	2.8%		2.8%

1) Including eliminations of intercompany net sales

2) The effect of net expansion is calculated only including point of sales without a full year period comparison (acquisitions, openings and closure of pharmacies)

3) The effect of net expansion is calculated only including business activities without a full year period comparison (acquisitions and new license agreements)

4) Mandatory price reductions of medications reimbursed by health insurers of the specialities list (SL/LS) released by the Federal Office of Public Health (FOPH), calculated based on volumes of previous period

Organic growth of net sales 2022

in thousand CHF	Retail (B2C) 1)	Professionals (B2B)	Products & Care 1) 2)	Wholesale	Logistics & IT Services	Logistics & IT 2)
Net sales	1,360,718	228,780	1,583,959	2,820,359	130,712	2,933,318
Change to previous period 3)	2.7%	17.9%	4.7%	3.4%	16.8%	3.6%

Effect of net expansion	7,498 4)	17,972 5)	25,469	–	682	682
In % of net sales of previous period	0.6%	9.3%	1.7%	0.0%	0.6%	0.0%

Net sales excluding effect of net expansion	1,353,221	210,809	1,558,490	2,820,359	130,030	2,932,636
Organic growth of net sales 3)	2.1%	8.6%	3.0%	3.4%	16.2%	3.6%

Mandatory price reductions 6)	16,672			57,520
In % of net sales of previous period	1.3%			2.1%

Net sales excluding effect of net expansion and mandatory price reductions	1,369,893			2,877,879
Organic growth of net sales excluding price reductions 3)	3.3%			5.5%

1) Figures restated (refer to note 4 of the Consolidated financial statements 2023 of the Galenica Group)

2) Including eliminations of intercompany net sales

3) Growth rate includes minor change in segment reporting structure: adjusted growth rate on a comparable basis would be 1.6% lower for Retail (B2C), 1.4% lower for Products & Care and 0.6% higher for Wholesale and Logistics & IT

4) The effect of net expansion is calculated only including point of sales without a full year period comparison (acquisitions, openings and closure of pharmacies)

5) The effect of net expansion is calculated only including business activities without a full year period comparison (acquisitions and new license agreements)

6) Mandatory price reductions of medications reimbursed by health insurers of the specialities list (SL/LS) released by the Federal Office of Public Health (FOPH), calculated based on volumes of previous period

Organic growth of net sales 2022 Products & Care

in thousand CHF	Local Pharmacies	Pharmacies at Home 1)	Retail (B2C) 1) 2)	Products & Brands	Services for Professionals	Professionals (B2B) 2)
Net sales	1,286,856	74,032	1,360,718	157,687	71,093	228,780
Change to previous period 3)	2.0%	16.2%	2.7%	19.8%	13.9%	17.9%

Effect of net expansion	7,835 4)	–337 4)	7,498 4)	8,771 5)	9,200 5)	17,972 5)
In % of net sales of previous period	0.6%	–0.5%	0.6%	6.7%	14.7%	9.3%

Net sales excluding effect of net expansion	1,279,021	74,369	1,353,221	148,916	61,893	210,809
Organic growth of net sales 3)	1.4%	16.7%	2.1%	13.1%	–0.8%	8.6%

Mandatory price reductions 6)	16,672		16,672
In % of net sales of previous period	1.3%		1.3%

Net sales excluding effect of net expansion and mandatory price reductions	1,295,693		1,369,893
Organic growth of net sales excluding price reductions 3)	2.7%		3.3%

1) Figures restated (refer to note 4 of the Consolidated financial statements 2023 of the Galenica Group)

2) Including eliminations of intercompany net sales

3) Growth rate includes minor change in segment reporting structure: adjusted growth rate on a comparable basis would be 24.5% lower for Pharmacies at Home and 1.6% lower for Retail (B2C)

4) The effect of net expansion is calculated only including point of sales without a full year period comparison (acquisitions, openings and closure of pharmacies)

5) The effect of net expansion is calculated only including business activities without a full year period comparison (acquisitions and new license agreements)

6) Mandatory price reductions of medications reimbursed by health insurers of the specialities list (SL/LS) released by the Federal Office of Public Health (FOPH), calculated based on volumes of previous period