Galenica : lowers EBIT guidance 2023 due to special factors – Sales and dividend outlook confirmed

	Press release
	Ad hoc announcement pursuant to Art. 53 LR
Date	25 July 2023
Contact	Investor Relations: Felix Burkhard, CFO Galenica Group
	Media Relations: Christina Hertig, Head of Corporate Communications
Subject	Lowering of EBIT guidance for 2023
	Galenica lowers EBIT guidance 2023 due to special factors -
	Sales and dividend outlook confirmed
	Due to special factors in the 2023 half-year financial statements, Galenica is lowering its EBIT
	guidance for 2023 and now expects adjusted2 EBIT to be roughly at prior-year level on the
	basis of the restated1 prior-year figures. Galenica previously assumed an EBIT growth of
	between 4% and 7%. On the other hand, Galenica confirms its 2023 outlook for consolidated
	net sales (growth between 3% and 6%) and dividend (at least at the same level as the
	previous year).
	Strong sales growth in the first half of 2023
	In the first half of 2023, Galenica increased consolidated net sales by 5.5% year-on-year to
	CHF 1,851.2 million. The "Logistics & IT" segment in particular posted strong growth of 5.8%. The
	"Products & Care" segment also performed well with a net sales growth of 4.2%. Due to the positive
	sales development, Galenica confirms its 2023 outlook for consolidated net sales with expected
	growth of between 3% and 6% based on restated1 figures from the previous year. Galenica will
	publish details of its business performance in the half-year financial statements on 8 August 2023.
	Lowering of EBIT guidance 2023 due to special factors
	Despite strong sales growth, adjusted2 EBIT in the first half of 2023 will be lower than expected, in
	particular due to special factors totalling CHF 9.8 million (sanction by the Swiss Competition
	Commission (COMCO) and extraordinary allowances on customer receivables), and decrease by
	around 5% compared with the prior-year period (restated1, adjusted2 EBIT 30 June 2022: CHF 95.0
	million). Due to the development of earnings in the first half of 2023 and these special factors,
	Galenica is revising its EBIT guidance for 2023 and now expects adjusted2 EBIT to be roughly at the
	prior-year level based on the restated1 prior-year figures (adjusted2 EBIT 2022: CHF 190.6 million).
	Previously, Galenica expected an EBIT growth of between 4% and 7%.
	COMCO ruling from 2017 weighs on EBIT
	HCI Solutions first lodged an appeal with the Federal Administrative Court against a COMCO ruling
	from 2017 and then with the Federal Supreme Court against the ruling of the Federal
	Administrative Court in January 2022. Although the case is still pending and therefore not yet
	legally binding, COMCO obliged HCI Solutions to pay the CHF 3.8 million penalty in June 2023.
	Galenica remains confident of winning the case before the Federal Supreme Court. According to
	IFRS, the invoiced amount must still be recognised as an expense.
	In the COMCO investigation into the matter of "Markant central regulation", 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
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Date	25 July 2023
Page	2/2
Subject	Lowering of EBIT guidance for 2023

Galenica remains convinced that a sanction is not justified, Galenica will not raise a corresponding provision until further notice. However, due to the ongoing process, there is a risk that this assessment could change in the short term. The expected half-year results and the adjusted2 EBIT outlook do not include a possible sanction.

Further information on the two aforementioned procedures can be found in the 2022 Annual Report.

Extraordinary allowances on customer receivables

EBIT in the 2023 half-year financial statements is impacted by extraordinary allowances on receivables from customers, especially in the wholesale business with doctors, by CHF 6 million. As part of its growth strategy in the doctor customer segment, Galenica has supported the establishment and further development of various medical centres in recent years. In doing so, Galenica contributed to maintaining nationwide primary medical care throughout Switzerland. Particularly due to an acute shortage of doctors and medical professionals, some of these medical centres have not developed as expected and are struggling with financial constraints. As a result, Galenica had to impair various receivables.

2023 dividend outlook confirmed

The outlook for the 2023 dividend remains unchanged at least at the same level as the previous year.

1. Restated prior-year figures due to joint venture with Redcare Pharmacy (formerly Shop Apotheke Europe)
2. Excluding the effects of IFRS 16 and IAS 19

Dates for the diary

8 August 2023: Publication of the Galenica Group Half Year Report 2023

18 January 2024: Publication of Galenica Group sales 2023

12 March 2024: Publication of Galenica Group annual results 2023

For further information, please contact:
Media Relations:	Investor Relations:
Christina Hertig, Head of Corporate Communications	Felix Burkhard, CFO
Tel. [phone]	Tel. [phone]
E-mail:[e-mail]	E-mail:[e-mail]

Welcome to the Galenica network!

Our ambition is to meet the needs of patients and customers in the Swiss healthcare market in a seamless, efficient and personalised way. To achieve this, we operate the Galenica network with over 20 Business Units, the strongest partners in the Swiss healthcare market. We offer fully integrated solutions both for customers and patients as well as for pharmacies, drug stores, medical practices, hospitals, retirement and nursing homes, home care providers, wholesalers, pharmaceutical companies, health insurance funds and other partners.

Galenica is listed on the Swiss Stock Exchange (SIX Swiss Exchange, GALE, security number 36,067,446). Additional information concerning Galenica can be found at www.galenica.com.