Foreword CEO Galenica Santé

Dear Shareholders,
Ladies and Gentlemen,

Galenica Santé leveraged its potential in the first half of 2016, thus highlighting its
ambition to be the first choice in Switzerland for health, beauty and wellbeing. In
order to claim a leading role in the Swiss market, we all need to pull together. Pressure on drug prices, along with consumer tourism driven by exchange rates, meant that we continued to face challenges in recent months. And as the figures for the first half of 2016 attest, we were able to meet these challenges successfully. Galenica Santé grew its net sales on a comparable basis by 3.7% to CHF 1,487.1 million and increased its operating result (EBIT) by 3.7% to
CHF 66.1 million.
The sales growth is all the more pleasing given that this year’s flu epidemic was milder than in the previous year, leading to lower sales of flu medicines. The shortfall was more than made up for thanks to customer acquisitions, pharmacy network expansion and sales growth in high-priced medicines. However, as regards medicine prices, it should be noted that margins in the Retail and Services Business sectors are very low due to government measures.
We aim to make our sales and earnings more broadly based and to continually
improve our agility. Our customers expect to receive prompt care and to be able to count on flexible, individual solutions. In addition, we want to impress them with attractive products and support them actively with new services. The Retail Business sector’s pharmacies are therefore continually expanding their offering to
patients and clients with new health and preventive checks. This also includes a comprehensive product range with strong own brands such as Algifor®, Anti-Brumm®, Perskindol® and Triofan®, a portfolio that is complemented by exclusive partner brands. One recent example of such expansion is the agreement signed in mid-2016 with the world’s second largest dermo-cosmetics laboratory Pierre Fabre for the exclusive distribution of A-Derma products in Switzerland.
Galenica Santé has the largest network of pharmacies in Switzerland. The companies in the Services segment ensure rapid, secure distribution to around 500 locations, and the recently completed expansion of the logistics centre in Niederbipp ensures reliable processing of high volumes for the long-term. Quality and innovation are the top priorities, so that Services can offer market participants a single source of integrated solutions. This will be helped by the planned acquisition of Pharmapool, a wholesaler supplying medical practices.
Agility is also key within the company. Better interaction between the internal areas and closer coordination of Galenica Santé processes enable us to become more efficient and keep costs under control. Therefore, for instance, the process is under way to merge the Retail Business sector’s two headquarters in
St-Sulpice and Bern into a common site in Bern.

Galenica Santé – your reliable health services provider

In light of the decision to develop Galenica Santé into an independent, listed healthcare company, we reorganised our structure in autumn 2015. The Products & Brands and Retail Business sectors were brought together within the Health & Beauty segment, while all logistics and IT services were assigned to the Services segment.
The new structure allows us to work together in a more joined-up way, while focusing on our core activities. Initial experiences show that these improvements enable us not only to increase knowledge transfer but also to react more dynamically to market developments. In order to meet our ambitious growth targets, we will also make acquisitions and expand our offering. All in all, this is a challenging task, as the healthcare market will be subjected to further price cuts that will continue to affect us.
We will be guided by our values as we move forward in future. Our activities will be driven by our passion. We will earn the trust of our customers and partners through credibility and competence in our day-to-day business – and, just as importantly, by showing respect towards all our employees and partners. Because we know that we can only be stronger if we all pull together. I would like to thank all employees who contributed to the successful start in the first half of 2016.

Bern, 9 August 2016

Jörg Kneubühler

CEO Galenica Santé


Galenica Ltd.

Untermattweg 8
CH-3027 Bern

+41 58 852 81 11
+41 58 852 81 12

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