Half year report

Galenica earnings up 4.4% – adjusted for currency effects, Galenica achieves double-digit growth

_In the first half of 2011, Galenica was strongly affected by the significant drop of both dollar and euro. While the Group generates around two-thirds of its result in these currencies, it pays the salaries of some 6,000 of its 7,000 employees in Swiss francs. The Group could only partially compensate for this situation, hence the unavoidable impact on results. In the first half of 2011, net sales increased by 3.6% to CHF 1,581.2 million. Without the exchange effect, earnings before interest and taxes (EBIT) and Group profits would have risen by 11% and 17% respectively. Converted into Swiss francs, EBIT improved by 5.3% to reach CHF 172.7 million and the Group’s profits increased by 4.4%, reaching CHF 122.6 million. Adjusted for currency differences, and after deducting minority interests, net profit would have risen by roughly 3%.

_Key pharmaceutical projects that are set to have a major impact on the Galenica Group’s development in the years to come continued to make good progress: Ferinject^® is being marketed in more and more countries; the common company Vifor Fresenius Medical Care Renal Pharma began operating in the USA; the phosphate binder PA21 is now in its final phase of clinical trials (phase III); the development of a targeted strategy for the promising Vaxom immunostimulants is on plan.

_Thanks to high quality services provided by its companies, the Logistics business sector has succeeded in acquiring several important new customers.

_In the Retail business sector, GaleniCare expanded its network of pharmacies to include new locations: seven wholly-owned pharmacies bring the total number of points of sale to 286, while the addition of 12 independent pharmacies increases the number of partners to 145 in all.