Notes to the consolidated interim financial statements of the Galenica Group
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 interim financial statements 2023 on 7 August 2023 for publication.
2. Accounting principles
Basis of preparation
The unaudited consolidated interim financial statements of Galenica are based on the financial statements of the individual companies of Galenica as at 30 June 2023, prepared in accordance with uniform principles. Except for the amendments to International Financial Reporting Standards (IFRS) as detailed below, the consolidated interim financial statements have been prepared using the same accounting principles as the consolidated financial statements for the year ending 31 December 2022 and comply with IAS 34 – Interim Financial Reporting. The consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ending 31 December 2022 as they update previously reported information.
Galenica's consolidated interim 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 interim financial statements.
Discontinued operations
A disposal group is classed as a discontinued operation if it represents a separate major line of business or geographical business unit or if it is part of a single coordinated plan to dispose of a separate major line of business or geographical business unit. Discontinued operations are not included in the result from continuing operations and are reported separately in the consolidated statement of income as profit from discontinued operations. The prior period amounts in the income statement and in the consolidated statement of cash flows are adjusted for comparison purposes. Intercompany transactions with the discontinued operations are treated as third parties transaction in the continuing operation. The figures for January to June 2022 have been restated for the purpose of comparison. The restatement has no effect on the statement of financial position or consolidated statement of comprehensive income. Further information of the discontinued operation can be found in note 4, Discontinued operations.
Estimation uncertainty, assumptions and judgments
The preparation of the Group's consolidated interim 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.
Seasonal influences on operations
Sales in the business sectors in which Galenica operates are usually not significantly influenced by seasonal or cyclical fluctuations during the financial year.
Income taxes
Current income taxes are based on an estimate of the expected income tax rate for the full year.
Scope of consolidation
The consolidated interim financial statements of Galenica comprise those of Galenica Ltd. and all its subsidiaries, including associates and joint ventures.
Details of changes in the scope of consolidation in the reporting period are included in note 4, Discontinued operations and in note 5, Business combinations.
Amendments to IFRS
As at 1 January 2023 Galenica adopted the following new International Financial Reporting Standards:
- Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of accounting policies
- Amendments to IAS 8 - Definition of accounting estimates
- Amendments to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction
- Amendments to IAS 12 - International tax reform Pillar Two rules
This changes have no or no material impact on the financial position, financial performance and cash flows of Galenica nor on disclosures in these consolidated interim financial statements. Galenica has not early adopted any other standard or interpretation that has been issued but is not yet effective.
Galenica has applied the exception to recognise and disclose information about deferred tax assets and liabilities related to Pillar Two Global Anti-Base erosion rules in accordance with the amendments to IAS 12, which the IASB published in Mai 2023.
3. Operating segment information
Operating segment information first half of 2023
With the creation of the strategic partnership with Redcare Pharmacy N.V., the business unit Mediservice Ltd. (incl. Curarex Swiss Ltd.) which was part of the Products & Care segment, is presented as discontinued operations. Operating segment information for the previous period has been restated to conform to the new presentation and is line with the internal reporting. As a result, net sales to third parties has decreased by CHF 205.7 million and EBIT by CHF 5.0 million in 2022. Further information of the discontinued operation can be found in note 4, Discontinued operations.
Operating segment information first half of 2023
|
in thousand CHF |
Products & Care |
Logistics & IT |
Group Services |
Eliminations |
Galenica Group |
|
Net sales |
804,364 |
1,518,491 |
25,733 |
–497,398 |
1,851,190 |
|
Intersegmental net sales |
–50,846 |
–423,283 |
–23,268 |
497,398 |
– |
|
Net sales to third parties |
753,518 |
1,095,208 |
2,464 |
– |
1,851,190 |
|
Other income |
3,387 |
3,995 |
1,971 |
–1,183 |
8,170 |
|
Share of profit from associates and joint ventures |
2,812 |
8 |
– |
128 |
2,948 |
|
Earnings before interest, taxes, depreciation and amortisation (EBITDA) |
107,842 |
34,928 |
1,168 |
–38 1) |
143,900 |
|
Depreciation, amortisation and impairment |
–34,098 |
–15,869 |
–1,530 |
118 |
–51,379 |
|
Earnings before interest and taxes (EBIT) |
73,744 |
19,058 |
–362 |
81 1) |
92,521 |
|
Interest income |
|
|
|
|
1,057 |
|
Interest expense |
|
|
|
|
–3,564 |
|
Other net financial result |
|
|
|
|
–471 |
|
Earnings before taxes (EBT) |
|
|
|
|
89,543 |
|
Income taxes |
|
|
|
|
–15,056 |
|
Profit from continuing operations |
|
|
|
|
74,487 |
|
|
|
|
|
|
|
|
Assets |
1,807,984 |
1,048,016 |
529,011 |
-576,067 2) |
2,808,944 |
|
Investments in associates and joint ventures |
138,486 |
91 |
– |
–1,568 |
137,009 |
|
Liabilities |
616,713 |
681,315 |
728,105 |
-546,118 3) |
1,480,015 |
|
|
|
|
|
|
|
|
Investments in property, plant and equipment |
11,552 |
5,418 |
1,669 |
– |
18,639 4) |
|
Investments in intangible assets |
1,041 |
14,943 |
– |
–37 |
15,947 5) |
|
|
|
|
|
|
|
|
Employees as at 30 June (FTE) |
4,081 |
1,445 |
232 |
– |
5,758 |
1) Including the effects of IAS 19 from defined benefit plans and long-service awards of CHF 1.5 million
2) Of which elimination of intercompany positions of CHF -556.5 million and other unallocated amounts of CHF -19.5 million
3) Of which elimination of intercompany positions of CHF -556.5 million and other unallocated amounts of CHF 10.4 million
4) Of which non-cash investments of CHF 0.8 million
5) Of which non-cash investments of CHF 3.8 million
Operating segment information first half of 2022
Operating segment information first half of 2022 (restated)
|
in thousand CHF |
Products & Care |
Logistics & IT |
Group Services |
Eliminations |
Galenica Group |
|
Net sales |
771,689 |
1,434,631 |
22,352 |
–474,464 |
1,754,208 |
|
Intersegmental net sales |
–46,092 |
–407,347 |
–21,026 |
474,464 |
– |
|
Net sales to third parties |
725,598 |
1,027,284 |
1,326 |
– |
1,754,208 |
|
Other income |
3,992 |
2,962 |
1,438 |
–656 |
7,736 |
|
Share of profit from associates and joint ventures |
1,937 |
20 |
– |
62 |
2,019 |
|
Earnings before interest, taxes, depreciation and amortisation (EBITDA) |
105,468 |
40,345 |
242 |
1,074 2) |
147,129 |
|
Depreciation, amortisation and impairment |
–32,951 |
–14,963 |
–1,062 |
147 |
–48,830 |
|
Earnings before interest and taxes (EBIT) |
72,517 |
25,382 |
–820 |
1,221 2) |
98,299 |
|
Interest income |
|
|
|
|
387 |
|
Interest expense |
|
|
|
|
–2,636 |
|
Other net financial result |
|
|
|
|
–129 |
|
Earnings before taxes (EBT) |
|
|
|
|
95,920 |
|
Income taxes |
|
|
|
|
–16,922 |
|
Profit from continuing operations |
|
|
|
|
78,998 |
|
|
|
|
|
|
|
|
Assets 1) |
1,784,254 |
921,458 |
320,811 |
-413,699 3) |
2,612,825 |
|
Investments in associates and joint ventures 1) |
33,975 |
82 |
– |
–1,375 |
32,682 |
|
Liabilities 1) |
604,571 |
524,903 |
619,655 |
-385,765 4) |
1,363,364 |
|
|
|
|
|
|
|
|
Investments in property, plant and equipment |
4,125 |
13,400 |
1,127 |
– |
18,652 5) |
|
Investments in intangible assets |
769 |
11,499 |
– |
–70 |
12,198 6) |
|
|
|
|
|
|
|
|
Employees as at 30 June (FTE) |
3,831 |
1,377 |
216 |
– |
5,424 |
1) Figures as at 31 December 2022
2) Including the effects of IAS 19 from defined benefit plans and long-service awards of CHF 1.4 million
3) Of which elimination of intercompany positions of CHF -395.6 million and other unallocated amounts of CHF -18.1 million
4) Of which elimination of intercompany positions of CHF -395.6 million and other unallocated amounts of CHF 9.8 million
5) Of which non-cash investments of CHF 0.9 million
6) Of which non-cash investments of CHF 1.8 million
4. Discontinued operations
On 30 March 2023 Galenica announced the combination of the business activities of the specialty pharmacy Mediservice Ltd. (including Curarex swiss Ltd.) and the online pharmacy shop-apotheke.ch in a strategic partnership with Redcare Pharmacy N.V. The closing of the transaction occurred on 16 May 2023.
Through the transaction, Galenica sold 51% of the shares of Mediservice Ltd. to Redcare Pharmacy N.V. The total purchase consideration amounted to CHF 215.5 million, consisting of a 6.1% investment in the listed company Redcare Pharmacy N.V., Netherlands with a fair value of CHF 109.5 million and the retained 49% participation in Mediservice Ltd. (including the online pharmacy shop-apotheke.ch) with a fair value of CHF 106.0 million. The 49% participation in Mediservice Ltd. will be accounted for as an investment in an associate.
The purchase consideration is reduced by an estimated amount of CHF 10.6 million which is contingent on net working capital developments as well as certain market developments and will become due between 2023 and 2026. The transaction resulted in a gain on sale of CHF 111.8 million. As the purchase considerations received are non-cash items, the net cash flow from the disposal amounted to minus CHF 2.1 million which includes CHF 1.3 million cash disposed and CHF 0.8 million transaction costs and is shown as net cash flow form sale of subsidiaries in the consolidated statement of cash flows.
With the transaction Galenica lost control over Mediservice Ltd. (including Curarex swiss Ltd.) and therefore deconsolidated the assets and liabilities of the business unit. The business of Mediservice Ltd. (including Curarex swiss Ltd.) represented a separate major line of business for Galenica and was therefore classified as discontinued operations and the prior period was adjusted accordingly.
Gain on sale of discontinued operations
|
in thousand CHF |
16.5.2023 |
|
Fair value of received equity instruments |
109,456 |
|
Fair value of retained at equity investment in former subsidiary |
106,011 |
|
Contingent considerations |
–10,594 |
|
Total considerations received / interest retained |
204,873 |
|
|
|
|
Carrying amount of net assets disposed |
–86,776 |
|
Transaction costs |
–755 |
|
Income taxes related to the sale of the discontinued operations |
–5,515 |
|
|
|
|
Gain on sale of discontinued operations |
111,827 |
The table below shows the financial performance of the discontinued operations.
Statement of income of discontinued operations
|
in thousand CHF |
1.1.– 16.5.2023 |
1.1.– 30.6.2022 |
|
Net sales |
164,487 |
215,250 |
|
Other income |
18 |
21 |
|
Expenses |
–163,238 |
–210,316 |
|
Earnings before tax (EBT) from discontinued operations |
1,266 |
4,954 |
|
|
|
|
|
Income taxes |
–251 |
–828 |
|
|
|
|
|
Net profit from discontinued operations |
1,015 |
4,127 |
The table below shows the financial position of Mediservice Ltd. (including Curarex swiss Ltd.) at the date of disposal.
Financial position of the discontinued operation at the time of disposal
|
in thousand CHF |
16.5.2023 |
|
Cash and cash equivalents |
1,330 |
|
Trade and other receivables |
49,444 |
|
Inventories |
18,168 |
|
Other current assets |
2,583 |
|
Current Assets |
71,525 |
|
|
|
|
Property, plant and equipment |
681 |
|
Right-of-use assets |
4,025 |
|
Intangible assets |
67,517 |
|
Financial assets |
50 |
|
Other non-current assets |
43 |
|
Non-current assets |
72,316 |
|
|
|
|
Total disposed assets |
143,841 |
|
|
|
|
Financial liabilities |
24,143 |
|
Lease liabilities |
647 |
|
Trade and other payables |
24,817 |
|
Other liabilities |
1,999 |
|
Current liabilities |
51,607 |
|
|
|
|
Lease liabilities |
3,581 |
|
Deferred tax liabilities |
1,637 |
|
Employee benefit liabilities |
240 |
|
Non-current liabilities |
5,458 |
|
|
|
|
Total disposed liabilities |
57,065 |
|
|
|
|
Disposed net assets |
86,776 |
5. Business combinations
In the first half of 2023, the scope of consolidation has changed as a result of the following transactions:
Acquisition of Padma AG. On 30 January 2023, Galenica acquired 100% of the shares in the Swiss company Padma AG. Padma AG is the parent company of the Padma Group with its two operating companies Padma Europe GmbH (Austria based) and Padma Deutschland GmbH (Germany based). Padma specialises in the manufacture and distribution of herbal formulations derived from Tibetan medicine.
The total purchase considerations amounted to CHF 23.3 million, of which CHF 20.9 million was settled in cash. A contingent consideration in the amount of CHF 2.4 million was recognised, which is due in 2026 if certain financial and operational targets are achieved. The fair value of the net identifiable asset amounted to CHF 14.2 million at the acquisition date. The goodwill of CHF 9.1 million was allocated to the operating segment Products & Care and corresponds to added value based on the acquirer-specific synergies expected to arise from the acquisition in expanding its complementary medicine portfolio and expanding its range of reimbursable medicines 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 9.7 million, of which CHF 9.1 million was settled in cash. A deferred consideration in the amount of CHF 0.6 million was recognised, which is due in the second half year of 2023. The fair value of the provisional net assets amounts to CHF 0.8 million at the acquisition date. The goodwill of CHF 8.9 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.
Business combinations
|
in thousand CHF |
Padma |
Pharmacies |
Total |
|
Cash and cash equivalents |
3,170 |
600 |
3,770 |
|
Trade receivables |
1,156 |
210 |
1,366 |
|
Inventories |
3,362 |
676 |
4,039 |
|
Property, plant and equipment |
177 |
– |
177 |
|
Right-of-use assets |
3,815 |
1,873 |
5,687 |
|
Intangible assets |
9,333 |
– |
9,333 |
|
Other current and non-current assets |
275 |
88 |
363 |
|
Trade payables |
–418 |
–450 |
–868 |
|
Lease liabilities |
–3,815 |
–1,873 |
–5,687 |
|
Net deferred tax assets/(liabilities) |
–1,871 |
– |
–1,871 |
|
Employee benefit liabilities |
–378 |
– |
–378 |
|
Other current and non-current liabilities |
–596 |
–282 |
–878 |
|
Fair value of net assets |
14,211 |
842 |
15,053 |
|
Goodwill |
9,074 |
8,863 |
17,937 |
|
Purchase consideration |
23,285 |
9,705 |
32,990 |
|
Cash acquired |
–3,170 |
–600 |
–3,770 |
|
Deferred consideration |
– |
–630 |
–630 |
|
Contingent consideration |
–2,385 |
– |
–2,385 |
|
Net cash flow from current business combinations |
17,730 |
8,476 |
26,206 |
Pro forma figures for acquisitions made in the first half of 2023
Since their inclusion in Galenica's scope of consolidation, the businesses acquired contributed net sales of CHF 6.3 million and an operating result (EBIT) of CHF 0.4 million to the Group's results. If these acquisitions had occurred on 1 January 2023, they would have contributed additional net sales of CHF 1.8 million without a material effect on EBIT.
6. Net sales
Net sales first half of 2023
Based on the classification of the business unit Mediservice (incl. Curarex swiss) as discontinued operation, the internal reporting and disaggregation of net sales has been adjusted accordingly. Net sales information for the previous period has been restated to conform to the new presentation. Further information of the discontinued operation can be found in note 4, Discontinued operations.
Net sales first half of 2023
|
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 |
599,617 |
40,534 |
640,151 |
264 |
640,416 |
599,893 |
40,523 |
|
Pharmacies at Home |
36,864 |
2,197 |
39,060 |
–125 |
38,935 |
36,738 |
2,197 |
|
Retail (B2C) 1) |
636,355 |
42,731 |
679,086 |
265 |
679,351 |
636,631 |
42,719 |
|
Products & Brands |
89,190 |
808 |
89,998 |
–41,807 |
48,191 |
47,383 |
808 |
|
Services for Professionals |
30,516 |
8,108 |
38,623 |
–12,664 |
25,960 |
24,303 |
1,656 |
|
Professionals (B2B) 1) |
119,721 |
8,905 |
128,627 |
–54,476 |
74,150 |
71,687 |
2,464 |
|
Products & Care 1) |
754,684 |
49,680 |
804,364 |
–50,846 |
753,518 |
708,334 |
45,184 |
|
Wholesale |
1,452,285 |
4,999 |
1,457,284 |
–398,552 |
1,058,732 |
1,054,982 |
3,749 |
|
Logistics & IT Services |
169 |
70,249 |
70,418 |
–33,942 |
36,477 |
169 |
36,307 |
|
Logistics & IT 1) |
1,452,455 |
66,037 |
1,518,491 |
–423,283 |
1,095,208 |
1,055,152 |
40,057 |
|
Group Services |
– |
25,733 |
25,733 |
–23,268 |
2,464 |
– |
2,464 |
|
Eliminations 2) |
–443,657 |
–53,741 |
–497,398 |
497,398 |
– |
– |
– |
|
Galenica Group |
1,763,482 |
87,708 |
1,851,190 |
– |
1,851,190 |
1,763,482 |
87,708 |
1) Including eliminations of intercompany net sales
2) Eliminations of intersegmental net sales
Net sales first half of 2022
Net sales first half of 2022 (restated)
|
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 |
590,444 |
37,503 |
627,947 |
–12 |
627,935 |
590,432 |
37,503 |
|
Pharmacies at Home |
35,076 |
2,273 |
37,349 |
–188 |
37,161 |
34,888 |
2,272 |
|
Retail (B2C) 1) |
625,417 |
39,776 |
665,192 |
–97 |
665,096 |
625,321 |
39,775 |
|
Products & Brands |
74,136 |
960 |
75,097 |
–38,302 |
36,794 |
35,834 |
960 |
|
Services for Professionals |
27,075 |
7,169 |
34,244 |
–10,660 |
23,584 |
21,672 |
1,913 |
|
Professionals (B2B) 1) |
101,250 |
8,091 |
109,341 |
–48,963 |
60,378 |
57,506 |
2,873 |
|
Products & Care 1) |
725,103 |
46,586 |
771,689 |
–46,092 |
725,598 |
682,850 |
42,748 |
|
Wholesale |
1,374,463 |
4,963 |
1,379,426 |
–385,819 |
993,607 |
990,615 |
2,991 |
|
Logistics & IT Services |
325 |
63,469 |
63,794 |
–30,117 |
33,677 |
324 |
33,353 |
|
Logistics & IT 1) |
1,374,789 |
59,841 |
1,434,631 |
–407,347 |
1,027,284 |
990,940 |
36,344 |
|
Group Services |
– |
22,352 |
22,352 |
–21,026 |
1,326 |
– |
1,326 |
|
Eliminations 2) |
–426,104 |
–48,361 |
–474,464 |
474,464 |
– |
– |
– |
|
Galenica Group |
1,673,789 |
80,419 |
1,754,208 |
– |
1,754,208 |
1,673,789 |
80,419 |
1) Including eliminations of intercompany net sales
2) Eliminations of intersegmental net sales
7. Fair values of financial assets and financial liabilities
Fair value
|
|
|
30.06.2023 |
|
31.12.2022 |
|
in thousand CHF |
Carrying amount |
Fair value |
Carrying amount |
Fair value |
|
Bond (fair value level 1) |
419,872 |
419,820 |
380,194 |
370,830 |
With the exception of the bonds the carrying amounts of all financial instruments approximate to the fair value or fair value disclosure is not required (lease liabilities).
As per 30 June 2023 Galenica holds equity instruments designated at fair value through other comprehensive income including a 7.9% (previous year: none) investment in the listed (level 1 of the fair value hierarchy) company Redcare Pharmacy N.V., Netherlands, with a fair value of CHF 148.8 million (previous year: none) and other investment in non-listed (level 3 of the fair value hierarchy) companies with a fair value of CHF 6.3 million (previous Year: CHF 4.6 million). These investments were irrevocably designated at fair value through other comprehensive income as Galenica considers these investments to be strategic in nature. Galenica recognised in the consolidated statement of comprehensive income a remeasurement gain of CHF 10.6 million (previous year: none).
Fair value of financial instruments (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 |
30.06.2023 |
31.12.2022 |
|
1 January |
49,180 |
24,000 |
|
Arising from business combinations |
2,385 |
26,256 |
|
Change in fair value (recognised in profit and loss) |
–2,061 |
–1,077 |
|
30 June / 31 December |
49,504 |
49,180 |
Fair value of equity instruments designated at fair value through other comprehensive income (level 3 of the fair value hierarchy)
|
in thousand CHF |
30.06.2023 |
31.12.2022 |
|
1 January |
4,561 |
– |
|
Addition |
1,950 |
4,561 |
|
Change in fair value (recognised in other comprehensive income) |
–193 |
– |
|
30 June / 31 December |
6,318 |
4,561 |
Fair value and sensitivity analysis of contingent consideration liabilities from discontinued operations
Determining the contingent consideration liability in connection with the sale of Mediservice forecasted gross margin and further development of net working capital of the discontinued operation were identified as key assumptions. Galenica has recorded the amount of CHF 2.9 million as other liability based on the expected future gross margin for the years 2024-2026. The future cash outflows range between zero and CHF 3.1 million. Furthermore, Galenica has recorded the amount CHF 7.7 million as other liability based on the expected further development of the net working capital of the discontinued operation which will be due in the second half year of 2023. Further information of the discontinued operation can be found in note 4, Discontinued operations.
Sensitivity analysis of contingent consideration liabilities from business combinations (level 3 of the fair value hierarchy)
Sensitivity analysis of contingent consideration liabilities from business combinations (level 3 of the fair value hierarchy)
|
in thousand CHF |
Lifestage Solutions |
Bahnhof Apotheke Langnau |
Aquantic |
Padma |
|
Fair value of contingent considerations |
20,914 |
22,916 |
3,275 |
2,399 |
|
Minimal payout |
– |
– |
– |
– |
|
Maximal payout |
24,000 |
29,000 |
5,500 |
4,000 |
|
Key assumption |
forecasted net sales 1) |
forecasted net sales 1) |
forecasted EBITDA 1) |
forecasted sell out prices 1) |
|
Year of relevance |
2024 |
2026+2027 |
2025+2026 |
2025 |
|
Sensitivity analysis |
|
|
|
|
|
Impact on fair value by 5% increase of key assumption |
2,220 |
2,000 |
400 |
1,000 |
|
Impact on fair value by 5% decrease of key assumption |
–2,220 |
–2,000 |
–400 |
–1,000 |
1) of the acquired business
8. Contingent liabilities and commitments
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. Although the case is still pending before the Federal Supreme Court, COMCO obliged Galenica to pay the CHF 3.8 million penalty in June 2023 and therefore Galenica expensed the amount. Galenica remains confident of winning the case before the Federal Supreme Court.
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. The COMCO secretariat presented its preliminary findings at the end of June 2023. On this basis, Galenica estimates the amount of a possible sanction, including legal costs, to be around CHF 3.5 million. As Galenica remains convinced that a sanction is not justified, Galenica will not raise a corresponding provision until further notice.
9. Subsequent events
The following business combinations occurred between 30 June 2023 and 7 August 2023, the date that the consolidated interim financial statements were released for publication.
Acquisition of pharmacies. Galenica signed contracts to acquire 100% of the interests in pharmacies at various locations in Switzerland. The net assets of these acquisitions will be consolidated beginning on the date control will be obtained. The total purchase considerations is estimated to CHF 11.1 million and are due with the closing of the transactions. Since the transactions were not concluded yet, it is not possible to disclose the additional information required by IFRS.
There were no further significant events after the reporting date.