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Thank you for placing your trust in us!

Jörg Kneubühler, Chairman of the Board of Directors, Jean-Claude Clémençon, CEO
Jörg Kneubühler, Chairman of the Board of Directors, Jean-Claude Clémençon, CEO

Dear Shareholders,

Ladies and Gentlemen,

 
 

Since the IPO in April 2017, we have been able to welcome around 14,000 private and institutional shareholders in Switzerland and abroad. The execution of our longterm strategy is supported by this wide investor base just as it is by our robust balance sheet, strong market position and clear focus on the Swiss market as well as our experienced management team.

Continuing drug price reductions, ongoing shopping tourism, generally stagnant development in Swiss retail: there is no shortage of challenges for the Swiss healthcare market. Nevertheless, we successfully achieved our ambitious objectives for 2017, and the Board of Directors will propose a dividend payment of around CHF 80 million to the 2018 Annual General Meeting, as already announced during the IPO.

+10.5%

EBIT increase

55.8

million investments (CHF)

Expansion, innovation and efficiency

The execution of our strategy is based on three development axes, by which we aim to create added value and generate growth. These are expansion, innovation and efficiency. We have seen encouraging development in all areas in 2017.

Growth both organically and through acquisitions

We have expanded our pharmacy network, for example, adding eight branches to bring the total number up to 337. With around 500 own and partner pharmacies, we offer an attractive point-of-sale network that is garnering ever increasing interest within the industry. This is evidenced by the new, often exclusive product representation agreements with partners abroad which were taken over by Vifor Consumer Health. Our own product portfolio has been expanded by the acquisition of iconic Swiss brands Merfen® and Vita-Merfen®, with Merfen® being distributed by Vifor Consumer Health on the Swiss market since May 2017.

Galexis has also widened its reach. With the acquisition of physicians’ wholesaler Pharmapool, it has significantly expanded its offering for self-dispensing physicians.

Helping to shape the Swiss healthcare market through innovation

We have also made pleasing progress on the innovation axis. Since autumn 2017, all pharmacy formats – Amavita, Sun Store and Coop Vitality – have been offering the Click & Collect service. Customers can now conveniently order products from across the range at the click of a mouse, including non-prescription (OTC) medications, and collect them from the pharmacy of their choice.

With the pilot project Aprioris, we launched an initiative that aims to shape the Swiss healthcare market and to contain costs. The object of a scientific study, this walk-in clinic concept offers immediate medical assistance with simple health issues and is currently operating at two pilot locations in Switzerland.

Alloga and Galexis now ensure an uninterrupted cold chain for the storage and transportation of medications, with temperatures as low as –80°C at Alloga – a requirement for the latest generation of medications.

Documedis® has also been developed to increase safety when dispensing medications. This software module from HCI Solutions provides healthcare professionals with all the information they need during this process.

Efficiency through standardised, end-to-end processes

To improve efficiency, the whole Group has worked on simplifying and consistently standardising processes. Back-office functions for all pharmacy formats have been centralised at the head office in Bern, for example, and the Triapharm® software from HCI Solutions, which, among other benefits, features direct invoicing to health insurers, is being used by all pharmacy formats of the Galenica Group as of the end of 2017.

Outlook

We aim to press ahead systematically with the initiatives and projects launched in 2017. At the same time, the three development axes – expansion, innovation and efficiency – need to be developed further.

This is why we acquired Careproduct at the beginning of 2018. The company supplies walking frames, wheelchairs, incontinence products and other aids both online and offline. The range is geared in particular to older people and people with a disability who want to maintain or improve their mobility level. With Careproduct, the Retail Business sector can expand its customer offering and strengthen its market position with respect to online sales. The further development and positioning of e-shops, as well as further growth with existing and new pharmacies, are additional drivers for expansion in Retail.

For Products & Brands, the focus is on the life cycle management of own products and partner brands, as well as the expansion of these portfolios through acquisitions and new product representations. As part of the separation process, Galenica and Vifor Pharma agreed that Vifor Consumer Health would change its name. The company will appear on the market under the name Verfora® from mid-2018. Doing so will clearly signal the separation of Vifor Pharma to the market, and with the new name, Verfora® will be able to even better position itself as an independent, strong retail partner with its well-known brands and products.

Implementing the new enterprise resource planning (ERP) solution, optimising the distribution concept in the areas of pre-wholesale and wholesale, and consistently improving processes in Retail will help to increase efficiency even further. And finally, we also want to shape the healthcare market in future and make an active contribution towards containing costs, for example by increasing generics substitution and through projects such as Aprioris.

Strengthening the Corporate Executive Committee and the Board of Directors

In December 2017, as has already been announced, Daniele Madonna, former Head of Coop Vitality pharmacies, assumed responsibility for the Retail Business sector, taking over from Jean-Claude Clémençon who is now able to focus fully on his duties as CEO Galenica Group. As Head Retail, Daniele Madonna is a member of the Corporate Executive Committee.

In addition, the Board of Directors of the Galenica Group will propose that Bertrand Jungo be elected to the Board of Directors at the 2018 Annual General Meeting. With over 26 years at department store Manor, 11 years of which as CEO, Bertrand Jungo’s expertise will strengthen the Board of Directors’ retail know-how.

Thank you to our employees and shareholders

The gratifying outcome of this historic first financial year 2017 is also the result of the considerable trust we have enjoyed. First, from all our employees, who commit themselves to supporting our customers and partners on a daily basis. Also from private and institutional investors, who back our long-term strategy. And finally, from all of our customers and partners, who count on our competence, quality and reliability. We would like to sincerely thank you for your support and for placing your trust in us!

Bern, 13 March 2018

Contact

Galenica Ltd.
Untermattweg 8
3027 Bern

Tel. +41 58 852 81 11
Fax +41 58 852 81 12