Ypsomed Holding AG – Annual Report 2010/11
Ypsomed – Better Life
All over the world, there are many people who live their lives independently and with great enjoyment despite their condition, such as having diabetes. And all over the world, there are large numbers of people who are committed to achieving a better life for patients: family members, doctors, nurses, pharmaceutical researchers, developers and Ypsomed staff. All of them have their own personal story.
Wen Z. Diabetes patient
Ypsomed – Better Life
Wen Z. was diagnosed with Type 2 diabetes a few years ago. But the 62-year-old no longer lets his illness worry him, not least because of the very minor effort involved in self-medication. Automatic administration of insulin using the ServoPen® developed by Ypsomed is simple and fits easily and conveniently into his everyday routine. Wen also likes the sophisticated design and the quality of the pen. With the ServoPen® he always feels secure.
Daniela Frangi Key Account Manager Burgdorf, Switzerland
Ypsomed Key Account Manager Daniela Frangi is committed to helping people with diabetes in Asia. She is not afraid of the size of the Asian market. On the contrary, because here too, one of the largest insulin suppliers has chosen Ypsomed to provide its pens, on the basis of Ypsomed’s globally recognized position as technological leader. The cooperation is running very well and the common goals are being achieved despite the language differences.
Kathrin A. Diabetes patient
Ypsomed – Better Life
Kathrin A. was diagnosed with Type 1 diabetes at the age of twelve. Even at her young age, the schoolgirl knows all about the illness. When she needs new pods for her OmniPodÂŽ insulin patch pump, she simply orders them herself online from DiaExpert. The reliable 24-hour service from DiaExpert Germany means that she can always rely on having her pods available in good time.
Daniel K채ser Planning & Control Pen Needle Packaging Burgdorf, Switzerland
Daniel Käser is one of the people who ensure that diabetics in Germany always receive their pen needles – and all their other mylife™ products – reliably and in good time. He is responsible for planning and control of the packaging line, which plays an important part in the distribution of Ypsomed products. Daniel Käser and his team are totally committed to ensuring the efficiency required for distribution. They make sure that the pen needles manufactured by Ypsomed are always available on time in Germany and monitor shipments to more than 50 other countries.
Rosalinde G. Polyarthritis patient
Ypsomed – Better Life
Rheumatoid arthritis is the most common of the inammatory joint diseases causing pain and restricting movement. This is the case for Rosalinde G. Her illness means that the 58-year-old is no longer able to move her hand as well as she used to, so it is particularly important for her to have an injection aid available for self-medication that does not require any complex movements. Even on particularly bad days, the ease of handling of the automatic injection system causes no difďŹ culties for Rosalinde, who has had to take early retirement for health reasons.
Orfeo Niedermann Business Development Manager Burgdorf, Switzerland
As a Business Development Manager with Ypsomed, Orfeo Niedermann is very familiar with the concerns of patients with respect to self-medication. He works with patient groups to understand their needs which provide important inputs for the development and improvement of new products. One example of this has been in the product development for YpsoJect®. This autoinjector has been specifically designed for ease of handling with a “push-on-skin” automatic injection mechanism which is particulary suitable for arthritis patients.
Jacqueline D. Leukemia patient
Ypsomed – Better Life
The treatment of cancer involves repeated and often stressful hospital stays. Jacqueline D. is all too familiar with them. She was diagnosed with leukemia in her midtwenties and her initial treatment was successful. But the cancer has now returned and she is going to have to undergo another course of chemotherapy. Jacqueline would be happy if she could complete at least some of the treatment at home. She has high hopes that future developments in the ďŹ eld of self-medication will make life easier for cancer patients.
Dr. Rudolf A. Physician
Making things easier for patients being treated for cancer is a particular concern of Rudolf A. As both doctor and research scientist, he pays great attention to medical innovations. At a time of cost-cutting in the healthcare system, he is pleased that companies like Ypsomed are committed to enhancing patients’ quality of life by developing innovative administration systems for biotech products used in the treatment of cancer.
Roy Huang CEO and Chairman of the Board of Directors at Bionime Corp. Taichung, Taiwan
Ypsomed – Better Life
Ypsomed is working together with the Taiwanese company, Bionime Corp., on the development of a new blood glucose monitoring system. Roy Huang, CEO of Bionime Corp., located in Taichung, is delighted by the successful and fruitful cooperation between the two companies. He felt that a solid partnership and common interests were equally decisive factors for the cooperative venture with Ypsomed as Ypsomed’s many years of expertise in the field of diabetes and the company’s European sales organization, with its focus on diabetes.
Patrick Heil Head of Swiss Market Burgdorf, Switzerland
Patrick Heil is Head of the Swiss Market at Ypsomed. He views the introduction of the mylife™ Diabetescare product range on to the Swiss Market as a particularly important step. He is convinced that the combination of high-quality and innovative products will signiďŹ cantly improve the everyday lives of diabetics.
Ian Thompson Vice President Business Development Burgdorf, Switzerland
Ypsomed – Better Life
One of the important tasks for Ian Thompson and his team is to gain a keen awareness of and accurately analyze the market and patient demand. Business Development forms the interface between patient requirements and the product developments at Ypsomed. The ďŹ ndings of market analysis are passed on to the Ypsomed technology team specialized in innovation, which concentrates on the design and manufacturing of new products.
Ulrich Moser Senior Engineer Concept Development Burgdorf, Switzerland
Ulrich Moser and his team are responsible for the development of new products and concepts at Ypsomed. As an experienced product developer the creation of new designs and solutions goes hand in hand with cooperative work with research scientists and market analysts. Innovation management that is focused on the market allows Ulrich Moser to develop products that are speciďŹ cally tailored to the handling needs of patients.
Ypsomed Holding AG
Annual Report 2010/11
Contents
19
Ypsomed key figures at a glance
20
Letter to shareholders
24
Annual Report
55
24
Self-medication – the future trend 25 “Injection systems” and “diabetes care” strategic business segments 28 Growth factors for self-injection and diabetes care
31
Self-injection – the need of patients and pharma customers 31 Portfolio of innovative injection systems 34 Ypsomed offers the leading pen systems for insulin 36 Disposable pen systems for insulin and GLP-1 38 Auto-injectors for pre-filled syringes 39 Fast product development 40 Customers and patients trust Ypsomed's quality
42
Professional diabetes care – a strategically important business segment 44 mylife™ OmniPod® – the first insulin patch pump 48 mylife™ Pura® – the most accurate blood glucose monitoring system 50 mylife™ Clickfine® – pen needles and safety pen needles 53 DiaExpert – the leading diabetes mail order business in Germany
Sustainability and Corporate Responsibility Report 55 60 63
67
Financial Report 67 72 106 113
114
Employees Society Environment and safety
Comments on the consolidated financial statement 2010/11 Consolidated financial statement 2010/11 Financial statement of Ypsomed Holding AG 2010/11 Five-year overview
Corporate Governance Report 114 133
134 Glossary
Corporate governance Information policy
Annual Report
Ypsomed – Annual Report
Key figures and share price development
Key figures at a glance April 1, 2010 – March 31, 2011
In thousand CHF
April 1, 2009 – March 31, 2010
Change
in %
Sales of goods and services
242 461
254 014
–11 553
– 4.5 %
thereof delivery devices
155 812
168 338
–12 525
– 7.4 %
thereof diabetes direct business
69 395
70 900
–1 506
– 2.1 %
thereof others
17 254
14 776
2 478
16.8 %
Gross profit
66 724
66 446
278
0.4 %
Gross profit in %
27.5 %
26.2 %
Operating profit
8 610
13 449
– 4 838
– 36.0 %
Operating profit in %
3.6 %
5.3 %
Net profit
5 206
9 425
– 4 219
– 44.8 %
Net profit in %
2.1 %
3.7 %
Comprehensive income
3 504
13 896
–10 391
– 74.8 %
Comprehensive income in %
1.4 %
5.5 %
Earnings per share (in CHF)
0.41
0.79
– 0.38
– 47.6 %
Research and development expenditures, total
26 102
31 717
– 5 615
–17.7 %
Investments in fixed assets
14 485
32 487
–18 002
– 55.4 %
Equity ratio in %
79.8 %
81.2 %
Employee headcount (as of March 31, 2010)
1 097
1 199
–102
– 8.5 %
Employees fulltime equivalents (as of March 31, 2010)
1 056
1 149
– 93
– 8.1 %
Audited IFRS fi gures. In thousand CHF. Earnings per share in CHF.
Share Price Development CHF 250 200 150 100 50 0 22.9.2004
2005
Ypsomed Holding AG
2006
2007
2008
2009
2010
31.3.2011
SPI Index (rebased)
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Ypsomed – Annual Report
Letter to Ypsomed’s shareholders
The new Ypsomed is on the right track! Dear shareholders,
As you can see from the financial figures, our business has not developed as planned. It is taking longer than expected to make up for the decline in Sanofi-Aventis sales, and the cost of building up the blood glucose monitoring and pump market is also higher than originally planned. We also made a mistake in selecting an Italian manufacturer for the pen needle assembly machine as part of the new project to industrialize needle production in Solothurn. This decision meant the introduction of the new pen needles was more expensive. We have learned lessons and taken measures, which we will outline later in this report.
We are building a new Ypsomed!
In the 2010/11 business year, we have worked intensively on the transformation of Ypsomed and reached some important milestones. In spite of a strong Swiss franc, we have achieved our sales and profitability targets for the 2010/11 business year as defined in autumn 2010. We are far from satisfied, however, as we are not only intent on continually giving our patients and customers better and more innovative products and services, but we also want to achieve significantly better results again in future, for you, dear shareholders.
“Our business has not developed in the way we had imagined. We have failed to match our own expectations. But we have learned lessons from this and taken measures.”
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Difficult starting position
The Ypsomed Group found itself in a difficult starting position. Our enormous reliance on Sanofi-Aventis meant we generated over 65 % of our sales during the 2005/06 business year from this one customer alone with just three insulin pen systems. In only five years, Ypsomed has lost over CHF 145 million of sales with Sanofi-Aventis and a good deal of the associated profits. Today, we make around 24 % of our sales with Sanofi-Aventis and we expect this share to fall below 10 % in the future. In view of this, one of the key challenges is to make up for these lost sales as quickly as possible and build up a broad customer base with high-margin products.
Big challenge
Looking back, we have been over-optimistic in believing we could make up more quickly for declining sales of previously key products for Sanofi-Aventis. Although our portfolios are generating considerable interest from pharma customers, some projects for new pen systems were stopped by our pharma customers. This had nothing to do with poor performance on the part of Ypsomed. It was more a case of some pharma companies having problems with drug approvals or setting other internal priorities. This is, of course, unfortunate, given all the commitment and development work performed. It is also a real disappointment for the production team, which is now unable to manufacture the planned new pen systems. We have also made considerable efforts in order to quickly expand production of pen needles and market the new mylife™ Pura® blood glucose monitoring system. However it is costing more to launch the blood glucose monitoring system than was budgeted. The expansion of pen needle production has also taken longer and cost Ypsomed more than originally planned. The problems experienced with those providing the new assembly machine have also meant the launch of the new pen needles and safety pen needles was ultimately delayed. The market for pen needles is subject to increasing price pressures and the weak Euro and US dollar are also pressurising both sales and profitability for pen needles.
Annual Report
Ypsomed – Annual Report
“Ypsomed is pursuing the right strategy and is investing today in tomorrow’s growth, since self-injection systems and diabetes care are worldwide growth markets.”
The strategy is right
Investment in growth is every bit as necessary as cost savings
During the 2010/11 business year, the Board of Directors and the management have been involved in intensive discussions concerning problems, causes and possible solutions, and have taken appropriate measures. Long-term competitiveness will depend on both investment in future growth and savings in terms of operating costs. We have adjusted personnel levels at Ypsomed to suit the new situation and have also been forced to make difficult decisions as part of this process, leading to redundancies, mainly in manual assembly and manufacturing staff. Ypsomed has also slimmed down its executive management board and general team management, as well as greatly simplifying many business processes. At the same time, we have expanded our sales force in Europe.
We are convinced that Ypsomed is pursuing the right strategy. Self-medication with modern injection systems is a growing global trend. New pharma companies want their patients to have simple and safe self-injection systems to administer their drugs. In addition, diabetes is a global epidemic, with more than 285 million people now suffering from Type 1 or Type 2 diabetes. This will rise to over 440 million worldwide by 2030, with Asia, India and the Middle East in particular seeing steep increases. Both injection systems and diabetes are definite growth markets and will remain so for decades, in spite of cost pressures in the public health sector. We are convinced that Ypsomed will continue to enjoy a strong position in these growth markets thanks to innovative pen systems and professional diabetes care.
Sketch from internal discussions on the sales trend (rough estimate) of Ypsomed's most important products
Tu rn over Tu rn over
ot he r p en s
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Free St yl e
Sa no fi -A ve nt is (Yps om ed p ens)
20 0 4
® O m ni Po d Pu ra an d
So lo St ar ® (S an ofi -A ve
nt is p en) 2010/11
ex is tin g an d new p en cust om er s
on Ab bo tt
®
Di aE xp er t
s pe n ne ed le 2010/11 20 04
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Ypsomed – Annual Report
Transformation of Ypsomed
2003/04*
Injection systems
2005/06
Diabetes care
2010/11
Future
* Diabetes care incl. distribution of Therasense blood glucose monitoring systems
Ypsomed is currently investing in future growth
Successful launch of the insulin patch pump in Europe
The growth initiatives launched by Ypsomed in the area of injection systems and diabetes care make sense and are promising. In spite of – or even because of – the significant fall in sales with our main customer, we have continued to make sizeable up-front investments with an eye on future growth. Strategic measures for future growth in terms of injection systems include the development of a unique portfolio of insulin pens, such as the reusable ServoPen® and disposable UnoPen™ insulin pen, several dual-chamber cartridge pen systems and various auto-injectors. All these have enabled us to win business from new pharma companies.
During the 2010/11 business year, we have extended the distribution of our pen needles to more than 50 countries and, with mylife™ Diabetescare, launched and established a new and independent diabetes umbrella brand. We have also made significant investments in both financial and personnel terms in the European marketing of mylife™ Pura ®, a new blood glucose monitoring system, and started in June 2010 with the launch of the mylife™ OmniPod®, the first tubingfree insulin patch pump. Since then, the mylife™ OmniPod ® insulin patch pump has become a real favorite with Type 1 diabetics with ongoing launches in Germany, Great Britain, the Netherlands, Switzerland, Norway and Sweden. We are planning product launches in further countries.
“Ypsomed is going through a demanding transformation phase in both strategic and operational terms.” New ServoPen® insulin pen from Ypsomed launched in China for the first time
We are particularly pleased about the Chinese launch of the new ServoPen ® insulin pen in collaboration with our longstanding customer Tonghua Dongbao Pharmaceutical Co. Ltd. China’s leading insulin manufacturer.
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Ypsomed – Annual Report
Solid financing with a high equity ratio
Strategy implementation will take time
Faced with a starting position like this – a significant fall in sales coupled with substantial investment levels – many companies would have found themselves making a loss or fearing for their very existence. Thanks to the conservative approach to financing with a high equity ratio and our entrepreneurial focus, we were able to work through this difficult time and even make profits, albeit at the current less typical low level.
We are convinced our efforts and investments will pay off in the near future. Our confidence is based on Ypsomed’s innovative products, committed employees, reliable partners and solid financing, without which success would be impossible. In spite of the difficult situation, we will in this business year propose a payment to shareholders out of capital reserves at the General Meeting. We thank you, our valued shareholders, for accompanying us through what is a challenging transformation phase for the Ypsomed Group in both strategic and operational terms. We are fully aware of the considerable patience and entrepreneurial spirit we are asking from you as investors. In view of this, please accept our special thanks for your loyalty and confidence.
Further measures for improved strategy implementation
We have confidence in the strategy and the measures introduced. During the new business year, the Board of Directors and the management will be firmly focused on implementing the measures defined both quickly and systematically. We are particularly keen to press ahead with the European launch of the mylife™ Pura ® blood glucose monitoring system and the mylife™ OmniPod ® insulin patch pump, and to improve our profitability margins as quickly as possible in these areas.
A special thank you to our employees
The considerable commitment and dedication shown by all our employees continues to be very positive, particularly during one of the most important transformations in our company’s history. It is especially important therefore to take this opportunity to extend our heartfelt thanks to all our employees and partners for their really active support during this important and demanding phase, and for their expertise and experience in ensuring the successful implementation of our growth strategy. Similarly, we are also pleased with the results of the latest employee survey, which showed motivation and satisfaction levels remaining high and employees even showing greater affinity with the company.
Dr. h. c. Willy Michel
Richard Fritschi
Chairman of the Board of Directors
CEO
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Ypsomed – Annual Report
Self-medication – the future trend
Vision and mission The vision and mission of the Ypsomed Group guides us when we define our strategy, develop new products and services, and when we evaluate partner products for sale. The vision and mission are defined below:
Vision
Ypsomed solutions make self-care simpler and easier. Mission
With innovative, simple-to-use and reliable products as well as modern care concepts we contribute significantly to the success of a therapy and thereby enable people to enjoy the best possible quality of life.
A better quality of life – that is what Ypsomed is all about
Gotlinde Wiegel is just one of the thousands of people across Europe with Type 1 diabetes who are crying out for the new mylife™ OmniPod ® insulin patch pump from Ypsomed. Many struggle with their old tubing-based insulin pump and find the device disturbs their sleep. It is a different story with mylife™ OmniPod ®. Gotlinde Wiegel, a triathlete, can barely contain her enthusiasm: “I no longer need to keep my pump at the side of the pool when I’m swimming. I can get on with running and cycling and feel confident that I’m always being dosed the right amount of insulin.”
Making self-care simpler and easier
If patients like Gotlinde Wiegel can make sustainable improvements to their quality of life and look forward to a new future, we are making real strides towards realizing our vision of Ypsomed products making self-care simpler and easier. Constantly striving towards this vision is what motivates and spurs us on. At Ypsomed, we have 1 100 employees giving patients their all every day they come to work.
“A 37-year-old nurse from Lahntal near Marburg, Gotlinde Wiegel has had Type 1 diabetes mellitus since 1994. She had her third child in March 2011 and wore a mylife™ OmniPod®, one of Germany’s first adhesive insulin pumps, from the start of her pregnancy. She told her diabetes specialist: ʻI’ve just got to have this new insulin patch pump!ʼ ”
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Ypsomed – Annual Report
“Injection systems” and “diabetes care” as strategic business segments
Ypsomed strategy
Ypsomed’s strategy has focused for years on “self-care solutions”, that is on solutions that allow patients to self-inject drugs and in particular on products and services for people with diabetes who need to treat themselves with insulin. This has resulted in the two strategic business segments “injection systems” and “diabetes care.”
“At Ypsomed, we put patients at the heart of everything we do, because successful treatment relies on very user-friendly products and patient acceptance.”
Pharma customers for injection systems The injection systems developed and manufactured by Ypsomed are sold around the world by leading pharma and biotech companies under their own brand names. Ypsomed maintains long-standing customer relationships as part of this business-to-business partnership. Ypsomed wants to continue to expand its customer base with newly developed injection systems.
Diabetes care In terms of diabetes care, Ypsomed markets products and services directly to end users (diabetes patients), prescribers (doctors and specialist personnel) or funding agencies (health insurance providers). Ypsomed runs a business-to-consumer operation for diabetes care.
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Ypsomed – Annual Report
Consistent strategy implementation “Ypsomed is consistent in its pursuit of strategic targets by both investing in future growth and making cost savings.”
The main target of the Ypsomed Group is to strengthen both the “injection systems” and “diabetes care” business segments and improve profitability. The Ypsomed Group also wants to generate sales from a broader customer base. This will lead to greater diversification and help avoid risk concentration in future.
Sales diversification thanks to new products
The previous business year saw Ypsomed launch a whole range of new products, with existing products also being launched in new countries. This represents an important step towards achieving the strategic target of sales diversification.
Milestones in the Ypsomed and Disetronic company story
Foundation of Disetronic Medical Systems Foundation of Disetronic GmbH, Germany Building of class D clean room ISO-certification Disetronic listed on Swiss Exchange
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
D-Tron insulin pump for type A cartridges from Eli Lilly Co.
Pen needle (needle for OptiPen ®) First electronic OptiPen ® (Insulin / Hoechst) First reusable dual-chamber pen (hGH / Kabi-Pharmacia) First reusable pen (Insulin / Hoechst) First micro insulin pump H-Tron Hoechst MRS-1 (Hoechst)
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1999
Roferon Pen (Roferon ® -A / Roche) OptiPen ® Pro (Insulin / Sanofi-Aventis) “Click-on” pen needle Penfine ® First click pen needle 4x2 snapper First reusable hGH electronic pens (hGH / Eli Lilly & Pharmacia)
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Ypsomed – Annual Report
Major milestones during the 2010/11 business year • First launch of the new ServoPen® insulin pen in China in collaboration with long-standing customer Tonghua Dongbao Pharmaceutical Co. Ltd. in October 2010. • Launch of the mylife™ OmniPod ® insulin patch pump in Germany and Great Britain (July), the Netherlands (December), and Switzerland and Scandinavia (March). • Opening of the seventh and largest DiaExpert competence center in the renowned diabetes center in Mergentheim, offering a comprehensive range of diabetes-related products and services. • Launch of the web portal, www.mylife-diabetescare.com, in June for diabetes patients and diabetes experts from clinics and other medical practices.
• Doubling of the sales force in France and thereby intensification of marketing and sales for mylife™ Pura ® blood glucose monitoring systems. • International expansion of sales of pen needles via new distributors in Latin America, the Middle East and North Africa. • Introduction of the Genotropin® GoQuick™ disposable pen by Pfizer.
Disetronic insulin pump business sold to Roche Company renamed Ypsomed Ypsomed listed on SIX Swiss Exchange Acquisition new industrial site in Solothurn Acquisition of several diabetes retail organisations in Germany Strategic cooperation with tool-maker Adval Tech Group New logistic and manufacturing site in Burgdorf, Switzerland 10 %-share in Bionime Corp.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010/11 ServoPen ® Gansulin ® Pen (Insulin / Dongbao) Insulin patch pump mylife™ OmniPod ® (Insulet) Disposable pen Genotropin ® GoQuick™ (hGH / Pfizer) Distribution of pen needles extended to 50 countries
First disposable pen OptiSet ® (Insulin / Sanofi-Aventis)
BGM mylife™ Pura ® (Bionime) YpsoPen ® (Insulin / Polfa Tarchomin & Pharmstandard)
Start distribution BGM FreeStyle™ (TheraSense)
Launch of umbrella brand mylife™ Diabetescare SymlinPen™ disposable pen (Symlin / Amylin Pharmaceuticals)
Nutropin ® Pen (hGH / Genentech) Genotropin ® Pen (hGH / Pfizer)
HumatroPen ® (hGH / Eli Lilly) Preotact ® Pen (PTH / Nycomed) Manufacturer certification Japan
Disposable pen Gonal-f ® (FSH / Serono) Semi-disposable pen OptiClik ® (Insulin / Sanofi-Aventis)
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Ypsomed – Annual Report
Growth factors for self-injection and diabetes care
Global trends and market dynamics
Population growth, demography and lifestyle
Through its strategic focus on injection systems and diabetes care, Ypsomed is active in markets experiencing sustained growth. These global markets are highly dynamic and the reasons for past and future growth are numerous, mutually dependent and even synergistic. It is important to be familiar with these dynamics and trends in order to gain a better understanding of the corporate strategy and future of the Ypsomed Group. Ypsomed is very well placed to benefit from this growth.
Experts agree that the world’s population will increase from its current level of just over 7 billion to more than 8 billion by 2030. The populations of newly industrialized and developing countries in particular will continue to increase sharply, with rising prosperity levels seeing changes in terms of eating habits and lifestyle. A growing lack of exercise and a high or excessive intake of calories in all kinds of forms are already facts of life in industrial countries and are also becoming more widespread in the Middle East as well as in China, India and Central and South America. At the same time, the elderly will continue to make up a bigger proportion of the population worldwide and in the industrialized countries in particular, increasing the proportion of the population requiring medical treatment.
“Technological innovations support the use of self-injection systems for safe and effective treatment, enhance patients’ quality of life and also reduce costs within the public health sector.”
Illustration of the growht trend an dynami
Illustration of the growth trends and dynamics
Customer
Strategy Products
Global trends
28
Pharmaceutical companies: better success of a therapy
Patient: more quality of life
Society: lower health costs
Self-medication Innovative injection systems
Professional diabetes care
Auto-injectors Patch-injectors
Pens Insulin pens Dual-chamber pen systems
Pen needles Safety pen needles
Blood glucose measurement Insulin pumps Mail order business
GLP-1 Biosimilars New biotechnological agents
Analog insulins Short- and long-acting insulins
Population growth and demography
Increase of diabetes Life style and nutrition
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Ypsomed – Annual Report
Advances in genetics and biotechnology
A worldwide diabetes epidemic
Over the last few decades, there has been a massive increase in knowledge about the building blocks of life and their complex interaction. By adopting a genetics-based approach and with the benefit of modern technology, many new drugs are manufactured biotechnologically. This is making conditions such as diabetes, growth disorders, infertility, osteoporosis, hepatitis C and kidney-related anemia amenable to treatment. Newer biotech drugs are also used to treat cancer and various autoimmune diseases such as arthritis, multiple sclerosis, psoriasis and Crohn’s disease.
“There will be over 440 million people worldwide living with diabetes by 2030, with 70 million of them in China alone. India will have as many as 90 million.”
d ic
The global increase in diabetes mellitus, which has unquestionably reached epidemic proportions, is an important factor for Ypsomed. Experts estimate that there are currently around 285 million diabetes sufferers worldwide, around 94 % of whom have Type 2 diabetes. The International Diabetes Federation (IDF) expects there will be an estimated 440 million people around the world with diabetes by 2030. Today, there are particularly large numbers of diabetics in India, China, the USA, Russia and Brazil as well as in the Middle East in percentage terms. Unimaginably large is the 90 % increase to 90 million diabetics in India within the next 19 years, and the 50 % increase in China to 70 million over the same period. Although Europe remains the largest insulin market for the time being, Asia will soon catch up with and overtake the USA (see illustration).
Insulin market by geographic regions Insulin units (in billions I.U.) 250
200
150
100
50
0 2001 USA
Europe
2003
2005
2007
2009
2011
2013
2015
Asia
Source: IMS data; extrapolation of data through Ypsomed from 2008.
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Ypsomed – Annual Report
The patent cliff, biosimilars and new pharma customers “Changes within the diabetes market are opening up opportunities for Ypsomed to win new customers for pen systems and sell its patented click-on pen needles, which are compatible with all competitor pen systems, in even more countries around the world.” There are worrying concerns about the global cost of diabetes care, which the WHO claims will rise from the current level of around USD 418 billion to something like USD 560 billion by 2030. More and more people are using insulin to avoid the serious complications associated with the later stages of diabetes. These include blindness, amputation, heart attack and kidney failure. In addition, GLP-1 analog substances currently represent an important new market for the early treatment of diabetes (see page 37).
Discussions about the imminent expiry of patents at pharmaceutical companies have reached a new intensity recently. The problem of the “patent cliff” affects well-known pharma groups with blockbuster drugs whose patents are due to expire. This allows cheaper generic and biosimilar drugs an opportunity to enter the market. However, the providers of these new products will only be able to position themselves against the established competition with the help of modern injection systems. In the insulin market, for example, the main patent for Lantus®, the highly successful long-acting insulin from SanofiAventis, will expire as early as 2014. In view of this, new or existing smaller manufacturers of insulin are looking to break into the market with biosimilar insulins. It is also interesting that Pfizer, one of the leading US pharma companies, is joining forces with the Indian manufacturer Biocon to break into the insulin market, previously the preserve of Novo Nordisk, Eli Lilly and Sanofi-Aventis. In addition, local insulin manufacturers in countries like India, China, Poland and Russia are enjoying above-average growth and are also expanding geographically. They will play a decisive part in shaping the future of the insulin market and provide new opportunities for an independent pen system manufacturer like Ypsomed.
Global insulin market by manufacturers Insulin units (in billion I.U.) 300
250
200
150
100
50
0 2000 Novo Nordisk
2003 Eli Lilly
Sanofi-Aventis
2006 Other manufacturers
Source: IMS data; extrapolation of data through Ypsomed from 2008.
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2009
2012
2015
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Ypsomed – Annual Report
Self-injection – the need of patients and pharma customers
Treatment with injection systems Modern biotechnologically manufactured drugs are based on peptide hormones and monoclonal antibodies. Biopharmaceuticals have developed into a multi-billion dollar market within three decades. Given their chemical structure, however, these drugs cannot be taken orally (i. e. as tablets), but must be administered in a way that bypasses the gastrointestinal tract. Today, these biopharmaceuticals are generally injected subcutaneously (i. e. under the skin). As such, pharma and biotech companies are increasingly making these drugs available to their patients with modern injection systems in order to provide a safe and cost-effective selfmedication option.
For every need the right injection system In addition to the many injection systems on the market, Ypsomed offers a range of innovative pen systems and autoinjectors designed to meet the needs of existing and new customers (see illustration). Thanks to years of development and industrialization experience, Ypsomed has a choice of systems to cover customer needs and is able to provide prototypes at very short notice for patient handling studies.
Innovative portfolio of injection systems
Disposable pen for insulin
Reusable pens for insulin
YpsoPen®
ServoPen®
YpsoPen® Twist™
UnoPen™
Multidose Single dose Variable dose Fixed dose Automatic administration
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Ypsomed – Annual Report
“Pharma and biotech companies all around the world have been placing their trust for years in Ypsomed’s innovative and user-friendly injection systems, as they enable them to improve treatment success levels and stand out from the competition.”
Both reusable and disposable pen systems are suitable for drugs that need to be injected by the patient either once or even several times a day, such as insulin, GLP-1 and growth or fertility hormones. Dual-chamber pen systems are used for drugs that cannot be stored in the liquid state. With these pen systems, the substance in its freeze-dried form is mixed with the diluent in a dual-chamber cartridge just before use. In addition, auto-injectors with a pre-filled syringe tend to be used where even inexperienced patients need to administer the required substance easily, safely and in the required quantity, or where drugs need to be injected less frequently as a depot formulation e. g. once weekly or monthly.
Innovative portfolio of injection systems
Dual-chamber disposable pens
LyoTwist™ Trio
Multidose Single dose Variable dose Fixed dose Automatic administration
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LyoTwist™ Vario
LyoTwist™ Trio S
LyoTwist™ Vario S
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Ypsomed – Annual Report
“Ypsomed reduces time to market for pharma customers, as production capacities are already in place for existing products and the various platform systems have been verified from both a technical and patent perspective.”
Auto-injectors
UnoPen™ Memo
YpsoJect ®
YpsoMate ®
YpsoMate ® HF
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Ypsomed – Annual Report
Ypsomed offers the leading pen systems for insulin
Successful launch of the ServoPen® in China An important milestone in the 2010/11 business year for Ypsomed was the successful launch of the newly developed ServoPen® reusable insulin pen in China in collaboration with its long-standing pharma customer Tonghua Dongbao Pharmaceutical Co. Ltd., a leading local pharma company and insulin manufacturer in China. This was only possible after an intensive cooperation phase between Ypsomed and Dongbao, during which the ServoPen ® was adapted to suit the individual customer requirements of Dongbao and the necessary documentation requirements for registration in China were completed. Within a very short timeframe, the ServoPen® manufactured by Ypsomed in Switzerland was ready to be launched in conjunction with Gansulin ® insulin under the “Gansulin® Pen” brand.
Simon Michel, Senior Vice President Marketing & Sales, hands over the first Gansulin ® Pens to Yikui Li, Chairman of the Board of Directors of Dongbao Enterprise Group Co. Ltd., and Li Cong, CEO of Tonghua Dongbao Pharmaceutical Co. Ltd.
“With the ServoPen® reusable insulin pen, Ypsomed is introducing a topquality Swiss product to the booming Chinese insulin market.”
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Booming insulin market in China Ypsomed has succeeded in strenghening its customer relationship with Tonghua Dongbao Pharmaceutical Co. Ltd. and gaining a bigger share of the booming diabetes and insulin market in China. Over the next few years, the Chinese insulin market is expected to experience very strong annual growth of between 25 % and 30 %. Sales of human insulins, which currently account for an estimated market share of 80 %, are the main driver of this tremendous growth. Dongbao Enterprise Group (www.thdb.com) was founded in 1985 and, with 20 subsidiaries, has grown to become one of China’s leading pharma companies thanks to considerable investment in research and development. As a manufacturer of active pharmaceutical ingredients (APIs), the company holds numerous patents and provides millions of people in China and Asia with drugs, particularly human insulins.
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Ypsomed – Annual Report
Benefits of the new ServoPen® insulin pen
YpsoPen® Twist – the value insulin pen
The innovative ServoPen® insulin pen developed by Ypsomed features an attractive combination of user-oriented design and improved functionality. The ServoPen® is a high-quality reusable insulin pen with a spring-assisted injection mechanism and a robust but lightweight aluminum housing available in different colors. In technical terms, benefits include springassisted release (no force required, short stroke distance), effortless cartridge changing thanks to bayonet locking, easily retractable piston rod, easy-grip dosing knob for simplified dose setting, dose correction and dose interruption options and excellent durability. All these factors make the pen easy to use on a day-to-day basis and give users the peace of mind they need. With the ServoPen®, Ypsomed is setting new standards in insulin therapy in terms of patient convenience and user-friendliness.
Against a background of ever increasing cost pressures within the public health sector, the insulin market has a significantly growing need for simple and low-cost pen systems. With this in mind, Ypsomed has developed a lower-priced reusable insulin pen named YpsoPen® Twist. YpsoPen® Twist is designed to be used with standard 3 ml insulin cartridges and can be adapted to inject other drugs. Based on the proven “twist and push” concept, it is very intuitive to use. The large display ensures good legibility during dosing. Doses can also be varied and corrected at any time. Unlike the ServoPen®, injection is a manual process, although very little force is required. As with the ServoPen®, the YpsoPen® Twist also features easy and convenient cartridge changing and an easily retractable piston rod (please turn to page 31 to see a picture of the pen).
ServoPen® developed by Ypsomed and awarded with the “red dot design award 2010”
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Disposable pen systems for insulin and GLP-1
UnoPen™ – the disposable pen for ambitious insulin providers Insulin dependent diabetics are increasingly using disposable pen systems. Ypsomed estimates that the market for disposable insulin pen systems is growing by over 20 % a year. Today, disposable insulin pen systems are only available from the three major insulin providers Novo Nordisk, Eli Lilly and Sanofi-Aventis. Ypsomed has therefore developed the UnoPen™ disposable insulin pen for the new ambitious and fast-growing insulin providers. The UnoPen™ boasts many of the userfriendly features and functionality found in Ypsomed’s two reusable insulin pens, but has been designed to be used as a disposable pen. Patients use the UnoPen™ with the integrated 3 ml insulin cartridge (1 – 60 IU or 10 – 600 μl) until no insulin is left, and then replace it with a new UnoPen™.
UnoPen™
“Thanks to biosimilars, the potential for disposable insulin pens is huge, not only in the established markets, but also in the USA, China and India in particular.”
Disposable pen systems become more and more important for the administration of insulin 80 %
60 %
40 %
20 %
0% 2001 Reusable pen systems
2003
2005
Disposable pen systems
2007
Conventional syringes with vials
Source: IMS data; extrapolation of data through Ypsomed from 2008.
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2009
2011
2013
2015
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LyoTwist™ – the dual-chamber cartridge pen system
Interesting market potential for GLP-1 diabetes drugs
Since many biopharmaceuticals are unstable in liquid form, they are supplied in freeze-dried form with a diluent, both contained in a dual-chamber cartridge. The freeze-dried drug needs to be mixed with the diluent before use. In order to make this preparation stage as simple as possible for patients, Ypsomed has developed the LyoTwist™ dual-chamber cartridge pen. Only Ypsomed offers a pen system like LyoTwist™. There are four different versions available, based on fixed or variable dosing, each featuring either a manual or automatic injection mechanism.
Within the context of diabetes treatment, recent years have seen a new and increasingly important market emerge alongside the existing insulin market. This new market is known as GLP-1 (glucagon-like peptide 1). GLP-1 is a hormone released into the bloodstream by special intestinal mucosal cells following a meal. The hormone in turn releases insulin. Since the naturally occurring human GLP-1 hormone is metabolized within just a few minutes, substances similar to GLP-1 are used as drugs. Studies show that Type 2 diabetes patients still capable of pancreatic insulin production enjoy better metabolic control after taking GLP-1 substances and even lose weight, unlike with insulin, which tends to make patients gain weight. GLP-1 drugs will be marketed in the form of either user-friendly disposable pens or auto-injectors.
LyoTwist™ Pen
“Ypsomed believes diabetes treatment with GLP-1 offers an interesting market potential for self-injection systems, with a number of pharma companies having GLP-1 drugs in their product pipeline.”
The world’s simplest dual-chamber pen system made of only three single components.
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Ypsomed – Annual Report
Auto-injectors for pre-filled syringes
“Disposable auto-injectors contain a pre-filled disposable syringe that the patient cannot see. When the button is pressed, a completely automatic process inserts the needle, administers the drug and makes the needle safe after the injection without the patient seeing anything.” For historical reasons, Ypsomed is the leading provider of pen systems. In the last few years, however, Ypsomed has invested signifi cant human and financial resources in the development of a range of auto-injectors to cover different patient and drug needs. The YpsoJect ® and YpsoMate ® autoinjector systems are suitable for a wide range of biopharmaceuticals administered as a fixed dose, and as long-acting depot formulations in pre-filled ready-to-use 1 ml syringes. The new disposable auto-injectors are very user-friendly and enjoy high patient acceptance levels.
Current customers for injection systems
Diabetes pens
'RQJEDR
38
YpsoMate ®
Disposable auto-injector
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Ypsomed – Annual Report
Fast product development
Lean development means fast product development For Ypsomed’s pharma customers, both time to market (i.e. fast product development and short intervals before launches) and the quality, safety and reliability of the end product are without question the most important decision criteria. Ypsomed has made further significant operational improvements in both these areas.
“Thanks to its lean development approach, Ypsomed is able to execute customer projects more successfully by saving both time and money.”
As part of a special lean development project during the 2010/11 business year, Ypsomed has thoroughly analyzed the business processes associated with development and industrialization and identified areas for improvement. Various measures have already been successfully implemented or will be undertaken during the course of the current business year. Lean development improvements have made it possible, for example, to reduce paperwork, simplify the required measurement and test processes, cut down on expenditure and rejection levels, and shorten the project time. In terms of development, Ypsomed also takes a more systematic approach to design for manufacturing. This means devising and developing products in such a way that they can be produced as efficiently as possible. At the same time, improvements have been made in the areas of tool making and capacity planning to reduce expenditure and cycle times. By ensuring uniformity in terms of project planning and monitoring, using standardization, and achieving closer integration and collaboration with customers, it has proved possible to make a range of improvements and eliminate duplication.
Non diabetes pens
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Ypsomed – Annual Report
Customers and patients trust Ypsomed’s quality
Successful FDA audit Products and business processes within the medical technology and pharmaceutical industries are becoming subject to ever tougher quality requirements imposed not only by customers, but increasingly by international and national regulatory authorities as well. With its professional, committed quality management team, Ypsomed is able to ensure these demanding requirements are satisfied. All Ypsomed business processes are certified in accordance with the medical devices directives as well as ISO 9001 and ISO 13485. Customers check Ypsomed’s quality management system during regular audits. During the last business year, Ypsomed passed a total of 10 customer audits with flying colors. As one of Switzerland’s first medical technology companies, Ypsomed underwent a successful audit in September 2010 by the State Food and Drug Administration (SFDA) of the People’s Republic of China in accordance with the ISO 13485 standard. The audit performed by the US health authority FDA in January 2011 in Burgdorf also went extremely well. A four-day intensive, detailed inspection of the quality management systems and their implementation by an experienced inspector generated no 483 observations. This is an excellent result confirming that Ypsomed's existing quality management system fulfills international standards and that customers and end-users can rely on the quality of Ypsomed products.
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“Ypsomed’s quality management system is inspected by the authorities and pharma companies on a regular basis. Ypsomed was particularly pleased with the successful audit performed by the US health authority FDA in January 2011 in Burgdorf.”
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Ypsomed – Annual Report
Quality within business processes – Ypsomed’s new process structure Ypsomed is eager to keep improving and ensure business processes and quality management are adapted on a regular basis in line with new requirements. Another special project was launched in the 2010/11 business year with a view to defining a new uniform and process-oriented management system for the Ypsomed Group based on a holistic approach to management. This important project is intended, among other things, to simplify and standardize existing business processes, to design processes to be more effective, and to ensure process content and responsibilities are compatible with the organizational structure. The idea is not only to eliminate duplication and improve the fit between different interfaces, but also to increase transparency and simplify employee training by making process descriptions more concise and easy to understand. The interdisciplinary project team is implementing the new process structure (see illustration) between now and the fall of 2011.
Ypsomed’s process house
Management process
Vision, mission, management manual
Strategic management
Operative management
Customer acquisition
Innovation
Customer relationship management
Client service
Development and industrialization
Product lifecycle management
Product management
Supply chain management
Strategic purchasing Internal purchase Purchase plan
Warehouse External purchase Customer's order process Trade
Quality management
Human Resources
Finance
Maintenance
Enviroment, health, safety
Facility management
Legal and patents
Project management
IT
Supporting process
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Professional diabetes care – a strategically important business segment
Long-standing diabetes expertise and market presence in Europe Ypsomed has over 25 years of experience in the “diabetes care” strategic business segment and boasts an undisputed reputation within the industry for profound expertise regarding diabetes. At the same time, Ypsomed is active in Europe with an independent sales organization and a sales force dedicated to diabetes. The Ypsomed Group is present in Germany, France, Great Britain, Switzerland, the Netherlands, Sweden, Norway, Finland and Denmark as well as India through its own subsidiaries. Ypsomed also runs DiaExpert, Germany’s largest diabetes mail order business with tens of thousands of diabetics as regular customers, via its subsidiary in that country. In total, 200 employees work for subsidiaries in the diabetes care business.
mylife™ Diabetescare product portfolio
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“mylife™ Diabetescare” diabetes umbrella brand successfully established Ypsomed unveiled the new mylife™ Diabetescare umbrella brand for people with diabetes mellitus in September 2009 at the Vienna conference of the European Association for the Study of Diabetes (EASD) and has since cemented its successful positioning. A number of products are sold under the same global mylife™ Diabetescare brand. These include the mylife™ Penfine ®, Optifine ® and Clickfine ® pen needles manufactured by Ypsomed. The brand also covers mylife™ Clickfine ® AutoProtect™ safety needles and diabetes products provided by partners, such as the mylife™ Pura® blood glucose monitoring system from Bionime and the innovative mylife™ OmniPod ® insulin patch pump from Insulet, as well as the universal mylife™ Rotofine™ and Rotosoft™ infusion sets. This allows Ypsomed to provide a wealth of products for safe and convenient diabetes therapy from a single source. Ypsomed sells mylife™ products and services through its own subsidiaries in Europe and India and collaborates with over 40 expert distribution partners around the world. During the 2010/11 business year alone, Ypsomed concluded additional distribution agreements for pen needles in 18 new countries.
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Ypsomed – Annual Report
mylife™ diabetes web portal www.mylife-diabetescare.com Ypsomed’s new mylife™ Diabetescare web portal has been up and running since June 2010 at www.mylife-diabetescare. com. The web portal offers people with diabetes and diabetes experts based at clinics and other medical practices a range of useful information on diabetes and everything they need to know about the products in the mylife™ Diabetescare range, as well as providing a platform for debate and discussion. Users not only receive practical tips regarding day-today diabetes issues, but can also request advice by telephone or email.
“Thanks to the slogan ‘More freedom. More confidence. With mylife™.’ within a short period of time Ypsomed has managed to develop a strong market presence and stand out from the competition.”
Diabetes web portal
The new www.mylife-diabetescare.com web portal offers valuable information for people with diabetes and for healthcare professionals.
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mylife™ OmniPod® – the first insulin patch pump
Rapid launch of mylife™ OmniPod®
mylife™ OmniPod® is a hit with patients
The recent rapid launch of the mylife™ OmniPod® insulin patch pump, the only one of its kind in the world, in mid-July 2010 in Germany and Great Britain, followed by staggered launches in the Netherlands, Switzerland, Norway and Sweden, has enabled Ypsomed to impress both its customers and leading diabetes experts. With the exception of France, the registration process for the mylife™ OmniPod ® went so smoothly that further launches are planned for other countries during 2011.
The first patient in Germany to use the mylife™ OmniPod ® was 44-year-old Thomas Zetzmann from Coburg. He was diagnosed with Type 1 diabetes 12 years ago. He had always felt in great shape before this. The diagnosis marked a real turning point for him. A stressful job involving physically strenuous field work meant he found it impossible to control his blood glucose levels with insulin injections. Because of this, he had been wearing an insulin pump since 1999. The big problem for him was the insulin pump infusion set tubing. This caused him some irritation when he played with his five children or turned over in bed at night, restricting his movements. With this in mind, Thomas Zetzmann has opted for the new mylife™ OmniPod® insulin patch pump. His experience with this small and innovative system has been very positive.
Experts recommend the mylife™ OmniPod® thanks to its many benefits Doctors and experts in the field are recommending this new patch pump for Type 1 diabetics because of its numerous benefits compared to conventional insulin pumps. The mylife™ OmniPod ® does not need an infusion set and offers users greater freedom and simplicity. The mylife™ OmniPod® system is available from diabetes specialists and practices with a particular interest in this area. Treatment costs are reimbursed by health insurance providers. Patients can obtain new pods and accessories from specialist suppliers of diabetes equipment and also, in Germany, from DiaExpert (www.diaexpert.de), Ypsomed's mail order portal.
Many others share Thomas Zetzmann’s enthusiasm for the mylife™ OmniPod®, as this selection of comments and feedback from our new customers on the following clearly show:
Thomas Zetzmann, Germany's first patient with the mylife™ OmniPod ® insulin patch pump.
44
“Just try taking my mylife™ OmniPod® away from me! The new pump has finally given me back my freedom. Instead of still having to wear my insulin pump on a belt with an infusion set and tubing, I just have to stick a pod on every three days and everything’s OK.”
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Ypsomed – Annual Report
Online comments made by mylife™ OmniPod® users “My husband, who has been diabetic for over 25 years, was blown away by the device and had no issues in wearing it. He’s never liked the thought of wearing a pump because of the tubing, but found this device to be incredibly discreet.” “The doctors I have spoken to can't rate it highly enough.” “I was put on an OmniPod ® today and absolutely love it!”
Customers are being won over by the OmniPod ® insulin patch pump1
• 98 % believe the OmniPod ® system makes it easier for them to live with diabetes • 96 % prefer OmniPod ® to their previous therapy • 95 % would recommend the OmniPod ® insulin patch pump to others 1
Source: Survey by Insulet Corporation. All participants in this survey have been using the OmniPod ® for more than one year.
“I am thoroughly impressed with the system as a whole. Insertion is quite a revelation; so fast that I had probably missed it. In fact, I jumped more from the ‘snap’ sound than from any sensation – it really was painless.” “It is the best thing I have ever done for myself and I will NEVER go back to all those injections and the inaccuracy that comes with them.” “Yeaaaaaaaah! I will get my OmniPod ® soon! Ready for a new life.” “My 6-year-old son and my husband have just trialed the OmniPod®. I have to say that it is amazing! The pod itself is very small.” “Oh my God Emma, it is just great! I have had it two and a half weeks now. It is just so easy and pain-free and I love the fact I can bolus when I’m walking down the street. It has reduced my insulin need by nearly a third, which is great. My control is much tighter and it is so easy to correct highs.”
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Ypsomed – Annual Report
Insulin patch pump – the way forward for Type 1 diabetes therapy
The mylife™ OmniPod® system only has two parts The huge demand for the mylife™ OmniPod ® insulin patch pump can be explained by its obvious benefits. It only has two parts and does not need an infusion set. The OmniPod ® system consists of a small, lightweight pod, which is simply applied directly onto the skin, and the Personal Diabetes Manager for wireless control. The pod acts as an insulin dispenser for up to three days and is worn discreetly under clothing. The Personal Diabetes Manager is simple to operate thanks to its menu-driven system and doubles as a blood glucose monitoring device.
“The mylife™ OmniPod® is a continuous tubing-free insulin infusion system. It offers insulin-dependent diabetics real convenience and flexibility and also provides new opportunities for treating children and young people.”
Benefits in brief
• World’s first insulin pump with no infusion set • Insulin pump comprising only two components: the pod with an insulin reservoir for 2 – 3 days and the Personal Diabetes Manager (PDM) to ensure simple and intuitive operation • Automatic, invisible and pain-free cannula insertion • Watertight, so no need to remove when taking a shower, bathing or swimming • Discreet, lightweight and comfortable thanks to a wide range of sites where it can be worn • Integrated blood glucose monitoring system
Tubing-free pump therapy – more freedom, flexibility and convenience Leading experts in the field believe the insulin patch pump is showing the way forward for diabetes therapy. The mylife™ OmniPod ® offers patients who use it greater freedom and simplicity compared with conventional subcutaneous insulin infusion (CSII). There is no longer any need for an infusion set, as the cannula is introduced automatically with the mylife™ OmniPod ® at the push of a button – the whole process is both fast and precise. No more tubing to snag or tangle. The fact that the pod can be worn in a range of positions ensures greater flexibility and means less stress on skin and tissue. The pod adhesive patch is breathable, kind to skin and flexible. Unlike treatment options involving infusion sets that generally need to be removed before taking a shower or swimming, the mylife™ OmniPod ® has no infusion set at all and is also watertight. This means insulin therapy is continuous and safe at all times.
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Benefits of the mylife™ OmniPod® system compared with intensified conventional insulin therapy Patients with intensified conventional insulin therapy (ICT) enjoy improved blood glucose (glycemic) control over the long term after switching to the mylife™ OmniPod ® thanks to continuous insulin administration, as was shown by an improvement in the average HbA1c (–0.49 %) reading recorded as part of a study1. The acceptance level for the OmniPod® in this study was 92.2 %. A previous study has shown that users prefer OmniPod® to a conventional insulin pump. In this study, most existing pump users preferred OmniPod ® to their conventional insulin pump and also improved their HbA1c value, reducing it from 7.1 % to 6.8 %. The kind of improvement in HbA1c values recorded in both studies reduces the risk of possible secondary complications associated with diabetes. In addition, the bolus calculator contained in the Personal Diabetes Manager (PDM) helps users determine the amount of insulin they need. Since there is no need for daily injections, patients benefit from a more flexible and less stressful daily routine, which also helps ensure successful treatment. 1
Development project “continuous injection device” Ypsomed has been working for several years to develop its own infusion system for insulin. The continuous injection system will permit the continuous administration of human insulin via a simple device produced at the lowest possible cost. The idea is to make the continuous injection device also available in newly industrialized and developing countries at reasonable costs. The main target market includes insulindependent patients, particularly elderly people requiring medical treatment. The project to develop the continuous injection system is taking longer than originally planned, because the development work involved is complex and many technical hurdles must be overcome. Ypsomed has made further progress during the 2010/11 business year and has manufactured a variety of prototypes. The system should be ready for sale by the middle of 2013.
Source: Zisser H, Jovanovic L: OmniPod Insulin Management System. Patient perceptions, preference and glycemic control. Diabetes Care 29 (9), 2175; 2006.
mylife™ OmniPod ® insulin patch pump
The mylife™ OmniPod ® insulin patch pump consists of only two part: the Personal Diabetes Manager (PDM) and the pod for the insulin.
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Ypsomed – Annual Report
mylife™ PuraŽ – the most accurate blood glucose monitoring system
Exclusive sales rights for mylife™ PuraŽ in Europe Ypsomed has had exclusive European rights to sell blood glucose monitoring systems from its Taiwanese partner Bionime Corp. since May 2009. Since the mylife™ Diabetescare umbrella brand was launched, the blood glucose monitoring system has been marketed under the name mylife™ Pura Ž in Germany, France, Great Britain, the Netherlands, Switzerland, Sweden, Norway and Finland by Ypsomed subsidiaries’ own sales forces. It will also be marketed in India from May 2011 onwards. The blood glucose monitoring system fits very nicely with the rest of Ypsomed’s mylife™ product portfolio.
“Self-monitoring of blood glucose levels and the resulting treatment adjustment are critically important in the treatment of diabetes mellitus.�
mylife™ PuraÂŽ is test champion thanks to high measurement accuracy A comparative study has shown the mylife™ Pura ÂŽ blood glucose monitoring device to have a higher measurement accuracy than four established monitoring devices. According to the assessment criteria, mylife™ Pura ÂŽ outperforms all comparable devices at blood glucose levels below 4.2 mmol / L. A study1 carried out at the Bad Lauterberg diabetes center showed that the high measurement accuracy offered by mylife™ Pura ÂŽ compares favorably not only with established monitoring devices, but also with laboratory methods. Blood glucose measurements in the 40 – 381 mg / dL range correlated extremely well with laboratory-measured blood samples. The comparative study also showed that mylife™ Pura ÂŽ – unlike three comparable established devices – satisďŹ es the currently deďŹ ned ISO criteria. Besides mylife™ Pura ÂŽ, only one other device was able to satisfy the ISO criteria in full.
Results for glucose values < 4.2 mmol / L (< 75 mg / dL) Number of measurement values in target range mylifeâ&#x201E;˘ Pura ÂŽ (%) Accu-Chek ÂŽ Aviva Nano (%)
100 %
Contour ÂŽ (%) 90 %
FreeStyle Lite ÂŽ (%) OneTouch ÂŽ Ultra ÂŽ 2 (%)
80 %
U
& &8 5 $ & < SRVWHU 7 ( 6 7 $ \ WLR Q@ ULV RQ VW XG LF $V VR FLD Ĺ? & RP SD PDQ 'LDE HW ''* >* HU W $ 6W XW WJDU '* ,'7 8 OP ' / Ĺ? , 62 6 WX G\ U LQ W KH P P RO QH LQ Z 7H VW U\ G / FD WH JR PJ
VW DEOLVKHG 7HVWHG HRVH PHWHU V EORRG JOXF
70 % 60 %
1,2 Legend for the graph: Use of mylifeâ&#x201E;˘ Pura ÂŽ resulted in more than 50 % of measurement values in the range of Âą 5 % of the reference value. When using the compared devices, this occurred in 23 % (Accu-Chek ÂŽ Aviva Nano) und 27 % (FreeStyle Lite ÂŽ) of the cases (p < 0.05 in both tests) as well as 35 % for OneTouch ÂŽ Ultra ÂŽ 2, (p = 0.11) and 37 % for Contour ÂŽ (p = 0.14).
50 % 40 % 30 %
1
Mentis et al. Klinische Performance durch Messgenauigkeit des Blutzuckermessgerätes â&#x20AC;&#x17E;mylifeâ&#x201E;˘ Pura ÂŽ â&#x20AC;&#x153; in der Steuerung der intensivierten Insulintherapie bei Patienten mit Typ-1-Diabetes. DDG Abstract Ref. No. A-274-0007-00399 / Poster P303. Poster Presentation at the 45th Annual Congress of the German Diebetic Association in Stuttgart 12. to 15 May 2010.
2
Baumstark et al. Bewertung der Systemgenauigkeit des neuen Blutzucker-Messsystems mylifeâ&#x201E;˘ Pura ÂŽ nach EN ISO 15197 und Vergleich mit dem etablierten System OneTouch ÂŽ Ultra ÂŽ 2. DDG Abstract / Poster P325 Poster at the 45th Annual Congress of the German Diabetic Assocation in Leipzig 2009.
20 % 10 % 0% 5%
10 %
15 %
Deviation from reference method
48
H 7HVWZLQQ
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Ypsomed – Annual Report
Close collaboration between Ypsomed and Bionime Corp. The collaboration with the Taiwanese partner Bionime Corp. has intensified during the 2010/11 business year, particularly through the development of new joint products. Next generation products are already under discussion.
The mylife™ Pura ® blood glucose monitoring system offers the following attractive benefits:
• Highest levels of measurement accuracy, ensuring high acceptance levels among patients and specialists • Test strip is extremely easy to grip, ensuring no contact with blood • Easy to operate, with clear menu-driven control system • Modern design and large display • Very low-pain mylife™ lancet
IPO of Bionime Corp. in Taiwan The history of Bionime Corp. is a real success story in commercial terms. The company was founded in April 2003 and currently has over 500 employees. Bionime has its headquarters in Taichung (Taiwan), as well as operations in Switzerland, the People’s Republic of China, Australia and the USA. Bio nime has filed around 60 patents in total in order to protect its core technologies. It currently sells its blood glucose monitoring systems in over 70 countries via distributors, OEM partners and Ypsomed. Bionime continued to develop its business very successfully during 2010 and was able to increase both sales and profitability. The initial public offering planned for the end of 2010 was successfully implemented: Bionime Corp. traded on the principal market of the stock exchange in Taipei for the first time on December 23, 2010 (see www.bionime.com).
“Ypsomed’s equity stake acquired in Bionime Corp. in the 2008/09 business year has been financially rewarding.”
mylife™ Pura ® – the most accurate blood glucose monitoring system
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Ypsomed – Annual Report
mylife™ – pen needles and safety pen needles
Launch of Ypsomed’s new 4.5 mm pen needle Ypsomed has been manufacturing high-quality patented pen needles for 20 years and boasts the world’s most comprehensive product range. Patients appreciate the different needle lengths (6 mm, 8 mm, 10 mm and 12 mm), which enable them to choose the right length of pen needle for their own physical constitution. Since January 2011, Ypsomed has also offered a new 4.5 mm pen needle, which is perfect for children and very slim adults.
“Ypsomed’s mylife™ pen needles are compatible with all the main insulin pens. The patented click-on mechanism means users no longer have to waste time twisting needles into place. The new 4.5 mm pen needle is perfect for children.”
The mylife™ Clickfine® AutoProtect™ safety pen needle for health care professionals Ypsomed has developed the new mylife™ Clickfine® AutoProtect™ safety pen needle for health care professionals which also features Ypsomed’s patented “click-on” mechanism. A locking mechanism prevents a second injection and the used needle remains invisible and protected. This avoids the possibility of accidental needle-stick injuries, infections and the transmission of life-threatening diseases, thus improving safety levels for physicians and health care professionals. Ypsomed launched the safety pen needle in March 2011 and has already concluded contracts with a number of hospitals and nursing homes. With the mylife™ Needle Remover™ for conventional pen needles, Ypsomed also offers an ideal tool for the fast and safe removal of pen needles. The mylife™ Needle Remover™ reduces the risk of needle-stick injuries and improves safety levels for patients and health care professionals.
mylife™ Clickfine ® AutoProtect™ and mylife™ Clickfine ® 4.5 mm
The Ypsomed pen needle product range was extended with the mylife™ Clickfi ne ® AutoProtect™ safety pen needle and the mylife™ Clickfine ® 4.5 mm pen needle.
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Stronger international market presence thanks to new distribution partners for pen needles “Today, Ypsomed’s mylife™ pen needles are available to 82 % of pen users worldwide.”
During the 2010/11 business year, Ypsomed has continued to significantly expand the geographical customer base for its self-manufactured pen needles. In the last 10 years, the number of countries where Ypsomed pen needles are sold has increased from 12 to the current level of 50. During the 2010/11 business year alone, Ypsomed has been able to conclude contracts with new distributors in 18 countries. Today, Ypsomed’s mylife™ pen needles are available to 82 % of all pen users worldwide. Ypsomed believes there is still potential for further growth in geographical terms. A few larger markets are yet to be covered, such as Japan, Korea and Argentina as well as Thailand, the Philippines and New Zealand.
Ypsomed has greatly increased its geographical sales presence for its own pen needles 60
100 % 90 % 91 % 80 % 82 %
50
83 %
77 %
70 % 71 %
40
72 %
66 %
60 % 60 %
30
50 % 40 %
47 %
45 %
46 %
49 %
50 % 20
30 % 20 %
10
10 % 0
0% 2000
2001
2002
2003
Presence in % of the world pen market (left scale)
2004
2005
2006
2007
2008
2009
2010
2011E
2012E
Number of countries with presence (right scale)
51
Ypsomed – Annual Report
New market presence established in Latin America
Ypsomed with new distributors in the Middle East
Ypsomed has concluded several contracts with leading local distributors in Latin America, the Middle East and North Africa. Following the relevant registration procedures for the various countries, mylife™ Penfine ® pen needles will be sold in Mexico, Colombia and Venezuela through the Venezuelan distributor Innova Technologies, part of the established DAI Group family business, which has around 130 employees and is represented in 18 Latin American countries. Some 180 million people live in Mexico, Colombia and Venezuela, which equates to a third of the total population of Latin and Central America. These countries also account for around 40 % of all those diagnosed with diabetes in the region.
With its own exhibition stand in the Swiss Pavilion, Ypsomed was present for the second time at Arab Health in Dubai, the Middle East’s largest trade fair for medical technology and healthcare, attended by over 2 700 exhibitors from some 60 countries. More than 60 000 distributors, doctors and industry representatives visited the trade fair, mainly from Saudi Arabia and the United Arab Emirates, but also from India and Pakistan. During the 2010/11 business year, Ypsomed concluded a distribution contract with Innovative Medical Solutions (IMS), whose headquarters are in Beirut (Lebanon), with a view to selling mylife™ Penfine ® pen needles in Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, Qatar, Oman, Jordan, Lebanon and Iraq through the subsidiaries and distributors of IMS following product registration. Consequently, Ypsomed has secured an area of the Middle East with a population of around 75 million for its products. Ypsomed has also expanded its presence in North Africa through its new distributor Expensimed Sarl., whose headquarters are in Algiers (Algeria). Algeria, Africa’s second largest country in terms of surface area, with around 33 million inhabitants, is home to a fast-increasing diabetic population estimated at 3 million. As a result, Ypsomed is now actively represented in the following North African countries: Egypt, Tunisia, Algeria and Morocco.
“Diabetes is particularly widespread in the Middle East, especially in Saudi Arabia, which has one of the highest rates of diabetes in the world at over 17 %. The International Diabetes Federation (IDF) estimates that the number of diabetics in the Middle East will double from the current level of around 26 million to over 52 million by 2030.”
Ypsomed at the Aarab Health 2011
Regional Sales Managers Philippe Miloda (on the picture) and Birgit Fechter attended the biggest Medical Device exhibition in the middle east, the Arab Health, for a second time.
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Annual Report
Ypsomed – Annual Report
DiaExpert – the leading diabetes mail order business in Germany
The one-stop shop for round-theclock diabetes advice and care
DiaExpert diabetes mail order business
DiaExpert, an Ypsomed subsidiary, is Germany’s leading provider of diabetes direct care. In addition to its comprehensive product offer, which comprises over 1 200 day-to-day items for diabetics, DiaExpert is also noted for the expert advice it provides. Many DiaExpert employees are diabetics themselves, so the advice they give is based on experience. In terms of the advice available, the telephone hotline is complemented by the regular “feelfree” customer magazine, which contains diabetes-related specialist articles and the latest diabetes product information. During the lastest business year, DiaExpert has totally revamped its website and online shop, making it easier for visitors to use. Customers benefit from round-the-clock access to the latest information and the convenience of being able to order any product online, including blood glucose monitoring systems, test strips, insulin pump accessories, lancets and pen needles as well as other products needed by diabetics. A professional mail order operation ensures customers receive the products they have ordered within 24 hours. DiaExpert's new revised homepage became more informative and user-friendly than before.
“DiaExpert supplies more than half of all insulin pump users in Germany. This makes DiaExpert the leading mail order provider for patients using insulin pump therapy or intensified insulin therapy.” DiaExpert is also a partner of all the health insurance providers in Germany and is able to ensure all patients receive the right therapy, and that prescriptions and payments are processed efficiently.
53
Ypsomed – Annual Report
New DiaExpert diabetes competence center opens in Bad Mergentheim In October 2010, DiaExpert opened another competence center to add to the six it has already. At the renowned diabetes center in Bad Mergentheim, diabetics and their family members can seek information and advice from specialists. They also have access to a comprehensive range of products and services designed to cater for the day-to-day needs of diabetics. Visitors have the opportunity to inspect, handle and try out the various products. The diabetes center in Bad Mergentheim treats around 15 000 patients a year. DiaExpert plans to open further competence centers in future. DiaExpert’s mission is to help even more diabetics deal with their condition on a day-to-day basis, not only via its mail order business, but also on a face-to-face basis.
54
Diabetes competence center Bad Mergentheim
“Around 8 million people in Germany have diabetes. As well as insulin, patients also need equipment to manage their diabetes on a day-to-day basis: pens, needles, blood glucose monitoring devices and test strips, lancets and insulin pump accessories. DiaExpert, the specialist retailer and mail order provider, has been supplying patients with high-quality products and expert advice for over 20 years.”
Ypsomed – Sustainability Report
Sustainability towards customers and employees
Values and management principles of the Ypsomed Group
For Ypsomed, sustainability is inseparably linked to corporate responsibility. For this reason, Ypsomed acts sustainably not only in the traditional fields of environment and society but also with respect to its customers and staff. Ypsomed develops products and services with major medical benefits for its pharmaceutical customers and for patients. Ypsomed invests about 10 % of sales each year in research and development, which – calculated from the time of its stock market flotation in 2004 – adds up to a total of CHF 205 million. Only the expertise, experience and commitment of its staff allow peak performances to be achieved in the development of new products and the manufacture of products of outstanding quality.
Ypsomed has defined consistent values and management principles for the Group as a whole, based on its vision and mission. Ypsomed expects all management staff to set an active example of the integration of these important values and management principles in their own work and to pass them on to their staff.
“Ypsomed has created the Ypsomed cube in order to make every member of the staff aware of and actively embrace the vision, the values and the management principles of the Ypsomed Group.”
Cube describing Ypsomed Group’s vision, values and management principles
55
Sustainability Report
Employees
Ypsomed – Sustainability Report
Development of the staffing structure The Ypsomed Group employed a total staff of 1 097 as of March 31, 2011, of whom 36 % were women and 64 % men. 879 people work for Ypsomed in Switzerland and 218 abroad. As can be seen from the illustration below, the staff at Ypsomed are still very young: 50 % of them are under 40. The number of years of service has increased significantly over the past six years. In comparison with 2005, when 58 % of the staff at Ypsomed had been with the company for less than two years, the figure at the end of 2010 was 16 %. Within the framework of Ypsomed’s increased strategic orientation as a diabetes specialist, the European sales force and marketing have been increased. Against the backdrop of the sharp fall in demand from Sanofi-Aventis for pen systems, Ypsomed was forced to improve productivity in Switzerland and to adjust staffing structures accordingly. In April 2010, 46 employees were laid off and left the company, and in August 2010 a further 20 jobs were cut on economic grounds. The redundancy program was
drawn up in close cooperation with the Personnel Commission. Ypsomed provided affected employees with support in analyzing their current situation and in seeking new employment. The results were: positive feedback from the participants, greater success in job searches and less sick leave during the notice period. A total of 17 people found a new position either immediately upon leaving or sooner and – instead of a long period of wage compensation payments as a result of being unemployed – received a bonus for successfully finding a new position. At the same time, Ypsomed also streamlined the management in Switzerland and reduced the executive management board to five people. With effect from September 2010, the former Chief Operating Officer (COO), Maurice Meytre, took over as managing director of Ypsotec AG, a member of the Ypsomed Group located in Grenchen. Dr. Christoph Rindlisbacher, formerly responsible for Corporate Development, and Dr. Manfred Mäder, responsible for Quality Management and Regulatory Affairs, both left Ypsomed at their own request.
Age structure of employees
Duration of employment
Percentage of employees
Percentage of employees
100 %
100 % 12 %
22 %
9%
14 %
19 %
50 + years 40 – 49 years
23 %
5%
6%
15 %
18 %
27 %
Until 29 years
10 %
75 %
23 %
Until 1 year
38 % 35 %
50 %
35 %
50 %
33 %
40 %
26 %
26 % 25 %
31 %
25 %
30 % 26 %
25 %
27 %
19 %
14 % 10 % 0%
0% 2005
2006
2008
2010
Development of employee structure from 2005 until 2010. Source: Ypsomed employee survey.
56
2005
2006
3 – 5 years 1 – 2 years
27 % 40 %
35 %
11 + years 6 – 10 years
34 %
30 – 39 years
25 %
75 %
4% 15 %
2008
2010
Ypsomed – Sustainability Report
High level of satisfaction among the staff
As part of a Social & Ethical Audit, a large customer checked the conditions of employment on site at Ypsomed in the 2010/11 business year. The inspectors also held interviews with staff members from the production facilities on topics such as wages, vacation and employee satisfaction. The outcome of the audit was entirely positive.
An important component of the corporate culture for Ypsomed is to regularly and systematically ask staff for their opinions. Both employees and management view the staff survey as a valuable tool for “taking the pulse” within the company and thus focusing specifically on topics where there is a need for action. It is of particular importance during the current transformation period, with its numerous organizational and staff changes, to be aware of the opinions of the staff and initiate relevant measures as needed. For this reason, the fifth Ypsomed AG employee survey was carried out from October 18 to November 15, 2010. The response rate of 84 % was higher than in previous years and also higher than the Swiss company average of 66 % in the 2010 “cash” Employer Award.
“The attitudes that are critical for corporate success – a feeling of belonging and a desire to perform at a high level – have seen a positive development.”
Satisfaction of employees Average value (rating based on scale of hundred) 100 %
86 82
75 % 74 64 60
67 63
72
75
66
73
70 64
64
75
82
77
66
50 %
25 %
0%
2004
Satisfaction
Motivating environment
Indentification
Bond
I’m happy with my current job situation
All employees in my department have the will to perform on a high level
I have a strong belonging to this company
I care a lot about the future of this company
2005
2006
2008
2010
Source: Extract from the results of Ypsomed’s employee survey.
57
Sustainability Report
Conditions of employment
Ypsomed – Sustainability Report
Employee education and training Ypsomed offers many interesting training positions for apprentices
“It is gratifying that Ypsomed employed a total of 42 apprentices in the 2010/11 business year and that 11 apprentices were able to pass their basic vocational training with very good results.”
For years, Ypsomed has set great priority on the training of apprentices. Ypsomed offers the following occupational areas for apprenticeships: design engineers, polymechanics, plastics technologists, logistics assistants, computer scientists, IT support and business assistants. There has been a significant increase in the number of apprentices in recent years, and also in the number of apprentices kept on after qualifying, as can be seen from the diagram below. Despite receiving almost 300 applications for apprenticeships starting in August 2011, it is becoming ever more difficult to find equally interested and qualified applicants for certain occupations.
Development of the number of apprentices of the Ypsomed Group Number of apprentices / graduating apprentices / apprentices offered a job at Ypsomed 50
40
42
42
38
30 28 26 20 19 14 10
11 8
8 6
3
0 2004 Apprentices
58
3
2
4
2
2005 graduating apprentices
2006
8
7
5
4
2 2007
apprentices offered a job at Ypsomed
2008
2009
2010
Ypsomed – Sustainability Report
Ypsomed has a career model including management, project leader and expert career paths. This model has proved very valuable over several years and is actively encouraged within the framework of human resources development. In the 2010/11 business year, a total of 48 people were able to make a step ahead in their continuing development and take on a new function, half of these being in a management position.
Occupational health promotion
Family-friendly corporate culture Factors that help create attractive working conditions for working parents are flexible working hours, part-time work, parental leave and contributions to childcare costs. Ypsomed offers these family-friendly conditions to help acquire and retain experienced and qualified staff. The average age of an Ypsomed employee is 39 years. With such a young workforce (average age 39), there are many Ypsomed employees with families who are interested in and dependent on the availability of local childcare facilities. Childcare places are available for the children of Ypsomed employees at a daycare center in Burgdorf. The “leolea” organization, which runs the Bucher Areal daycare center, was partly funded by the Ypsomed Innovation Fund. Read more about “leolea” on page 61.
Occupational health promotion is an important concern for Ypsomed. In addition to the primary goal of reducing occupational and non-occupational accidents and absence as a result of sickness, the aim is also to raise awareness and motivate staff to take more active care of their health. Management staff have a particularly important role model function here, and must accept this responsibility. The necessary preconditions have been in place since 2006 within the framework of a project with the active cooperation of SUVA, the Swiss Accident Insurance Fund. Since that time, Ypsomed has invested a high five-figure sum each year in the health and safety of its employees. The successes of health promotion and accident prevention can be measured in quantitative terms and are monitored by the Board of Directors and management on the basis of facts and figures. The trend is essentially positive but not all the targets set have yet been achieved. Absences as a result of sickness and accidents have been reduced from 12.2 days per person in the 2006 calendar year to a current figure of 9.5 days per person. Because of the active downsizing, Ypsomed is satisfied with being able to hold the absence rate steady at present, with the goal of further reductions in future.
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Sustainability Report
Human resources development and career planning
Ypsomed – Sustainability Report
Society
Commitment to society and the region Ypsomed continues to make available about 1 % of consolidated net profit every year for sponsorship of projects in social, cultural, educational and public sports initiatives. These are principally regionally based, and geared to Burgdorf, Solothurn and Grenchen. Ypsomed has very close and diverse links to the Franz Gertsch Museum, and contributes to the promotion of art in Burgdorf and the region. Ypsomed also makes regular financial contributions to the Ypsomed Innovation Fund to support innovative enterprises in the Swiss Mittelland region, and has set up the CHF 50 000.– Ypsomed Innovation Prize for the promotion of knowledge and technology transfer at the University of Bern and the Bern University of Applied Sciences.
“In addition to its comprehensive commitment to its employees, Ypsomed has also been active for many years in direct initiatives for the benefit of society.”
60
Ypsomed Innovation Fund – promoting innovation and technology transfer The aim of the Ypsomed Innovation Fund foundation is to promote young innovative companies in the Mittelland region. By granting loans or convertible loans, or through equity funding, it makes available to companies the resources required to realize innovative projects and growth strategies. The Ypsomed Innovation Fund supports project funding for both new and existing enterprises. The Disetronic Innovation Fund was set up by Dr. h. c. Willy Michel in 1997 as an independent foundation of Disetronic Holding AG. In 2005, the Disetronic Innovation Fund was renamed the Ypsomed Innovation Fund. The founders include Dr. h. c. Willy Michel, Ypsomed Holding AG and the Bernese Cantonal Bank. The Chief Executive Officer of the foundation is Dr. med. vet. Christoph Rindlisbacher and members of the board of trustees are Heinrich Mühlemann, dipl. Ing. ETH / lic. oec. publ., Daniel Kusio, lic. rer. pol., and Prof. Dr. Peter Mürner, Prof. Dr. phil. nat. One example of a successful project in the field of social entrepreneurship, which was initially supported by the Ypsomed Innovation Fund, is “leolea”.
Ypsomed – Sustainability Report
Ypsomed employees also get personally involved It is not only Ypsomed that is committed to society; the employees themselves are also personally involved in initiatives. By taking part in blood donation campaigns, for example, and preventive flu vaccination, participating in company sports events or using the fitness training facility and the indoor swimming pool made available free of charge by Ypsomed. In 2010, many Ypsomed employees also took part once more in the “bike to work” campaign and in the National Day for the Future (Nationaler Zukunftstag).
“leolea” child daycare centers – successful growth project with start-up funding from the Ypsomed Innovation Fund Seven years ago, Dr. Marcel Brülhart presented a project to the board of trustees of the Ypsomed Innovation Fund, with which private initiatives would be used to create more childcare centers in the Bern region. After detailed examination and discussion, the Ypsomed Innovation Fund decided, in 2004, to support the “leolea” association with CHF 120 000.– start-up funding.
“ʻleoleaʼ, which started with just a few childcare centers in the Bern area, has today grown into a professional, customer-oriented organization with 19 childcare centers in canton Berne and the city of Lucerne, employing more than 300 people.”
“leolea” offers facilities where pre-school and school-age children are cared for and their abilities developed so as to provide support and ease the burden of childcare for parents. The daycare center in Burgdorf, which is used by Ypsomed, is run by “leolea.” “leolea” is innovative and a benefit to society. The care it offers ranges from customer-oriented opening hours, to in-home daycare providers and school vacation care, and on to forest playgrounds and specialist advice for parents and local authorities. This is not merely a regional need: innovative daycare centers are in short supply throughout the whole of Switzerland. So Dr. Marcel Brülhart, Chairman of “leolea,” also hopes to expand across Switzerland in the future.
61
Sustainability Report
“leolea” child daycare
Ypsomed – Sustainability Report
Supporting Dream Trust in India
To the summit with diabetes
Since 2007, Ypsomed has had its own subsidiary in India, through which it markets the mylife pen needles manufactured in Switzerland. In recent years, Ypsomed has also forged close contacts with all the local insulin manufacturers and with Indian pharmaceutical and biotech companies, and has positioned itself as an independent supplier of innovative pen systems. In India, where already 50 million people live with diabetes mellitus today, many do not yet have access to insulin and to services required for treatment, such as diabetes advice and blood glucose monitoring. Ypsomed runs regular training courses in India on the subject of diabetes and, in 2010 and 2011, once again provided financial support to the aid organization Dream Trust (www.dreamtrust.org). Dream Trust helps socially disadvantaged people with diabetes in Nagpur.
Increasing numbers of people are living with diabetes but don’t want to be restricted by their disease, either in their everyday lives or with respect to specific challenges. For this reason, Ypsomed invited the readers of “feel free,” our DiaExpert customer magazine, to climb the famous peak of Mont Blanc with an experienced mountain guide. Ralf Weber from Worms in Germany, who only developed Type 1 diabetes at the age of 41, finally took up the challenge and successfully conquered the 4 180 meter high mountain in the French Alps on July 1st, 2010. An experienced hiker, he reached the summit via the normal route in a French team accompanied by a specialist in diabetes, two mountain guides and a cameraman.
“feelfree”-reader Ralf Weber in front of the Mont Blanc
Ralf Weber (3rd from right).
62
Ralf Weber is convinced that there should be no restrictions to life, even with diabetes. And his motto is: “You are not sick. You simply have a condition that you have to take into account.” You can read more about this unforgettable trip in a blog at www.gisele-lafond.com (in French only).
“A crazy day! We were lucky with the weather and wonderful visibility. We started just before 2 am and reached the summit after 8½ hours, travelling across ice and snow for almost the whole route. I needed almost no insulin for the meals of muesli and energy bars, since the effort had eaten ʻeverythingʼ up. I had my pen and glucose meter in my trouser pocket and used them only briefly.”
Ypsomed – Sustainability Report
Environment and safety
“In order to raise staff awareness of behavior that is environmentally friendly and conserves resources, and to implement improvements on a continual basis, Ypsomed has had a full-time officer with responsibility for the environment, health and safety since 2007. In general, Ypsomed uses very few resources in its production, particularly in comparison with other sectors or industries.”
Investments in energy efficiency are not only a good idea for ecological reasons, but are also an economic necessity against the backdrop of continually increasing energy costs. The focus of attention for Ypsomed is ongoing optimization with respect to the two most important energy sources, natural gas and electricity. In the 2010/11 business year, Ypsomed invested once again in the modernization of building services at the Solothurn production plant and in improving the energy efficiency of injection molding machinery.
Project “Free Cooling” in Solothurn
The idea behind the “Free Cooling Solothurn” project was to save energy in the winter months by making available the cold air required in injection molding production directly from outside rather than by using a cooling unit as has previously been the case. In 2010, Ypsomed successfully entered this project in the Swiss Federal Office of Energy’s competition for electrical efficiency and was awarded a significant subsidy. The project will be realized in summer 2011 using this financial support, making it possible to save 0.5 gigawatts of electrical energy per year from as soon as winter 2011/12.
Electric injection molding machines use up to 50 % less energy
Like many other plastics components manufacturers, Ypsomed formerly used hydraulic injection molding machines. Although the new electric injection molding machines are more expensive to purchase than the hydraulic machines, the investment is worthwhile because electric injection molding machines require up to 50 % less energy during operation. Ypsomed has decided on standardization for its injection molding machines and will in future purchase only electric injection molding machines.
63
Sustainability Report
Ypsomed invests in energy efficiency
Ypsomed – Sustainability Report
Environmental audit
Reduction of environmental impact and greenhouse gas emissions
Ypsomed carries out an environmental audit for each calendar year, using the method devised by the öbu (Schweizerische Vereinigung für ökologisch bewusste Unternehmensführung – Swiss Association for Environmentally Conscious Management). The diagrams show the most important environmental key data for Ypsomed for the calendar years 2007 to 2010. The definition of the key data and technical terms is given in the Glossary from page 134 onwards.
Falling energy consumption
Total energy consumption by Ypsomed AG fell slightly once again in the 2010 calendar year as compared with previous years, although more stringent requirements relating to ambient air and air conditioning quality have increased energy consumption in relation to production quantity. It is pleasing to see that it has been possible to achieve a significant reduction in production-related power consumption, while the consumption of fossil fuels based on area rose as a result of weather conditions and because of the increased air conditioning requirements.
Environmental impact 2010: Total 16 700 million EIP (–10 % compared to previous year)
6%
site balance (4 %)
The environmental impact of Ypsomed AG also declined once more in the 2010 calendar year. The environmental impact in the complementary balance, which accounts for about 25 % of the total balance, is chiefly derived from the raw materials, particularly the plastic granulate, which is the main component of Ypsomed products. In the core balance, which accounts for 30 % of Ypsomed’s total environmental impact, the main impact comes from purchased electricity. It is the waste from nuclear power plants that has a particular effect on the balance in terms of environmental impact caused by electricity. Greenhouse gas emissions also decreased slightly again in 2010. The main impacting factors in the complementary balance are, once again, the raw materials, which make up more than 40 % of the total greenhouse gas emissions. In the core balance, the main impact comes from heating energy, and from natural gas, which accounts for just under 10 % of total greenhouse gas emissions.
Emissions 2010: Total 14 350 t CO2 equivalent (–4 % compared to previous year)
13 % site balance (10 %)
40 % energy supply and waste disposal (40 %)
19 % energy supply and waste disposal (18 %)
54 % purchased environmental impact (complementary balance) (56 %)
68 % complementary balance (72 %)
Complementary balance
9100 million UBP
–13 %
Complementary balance
9750 t CO2 equiv.
–8 %
Core balance
7600 million UBP
–6 %
Core balance
4600 t CO2 equiv.
+7 %
64
Ypsomed â&#x20AC;&#x201C; Sustainability Report
Material (extract)
In GJ
In t
100 000
2500
Sustainability Report
Energy
2000 75 000
1500 50 000 1000
25 000 500
0
0 2007
2008
2009
2007
2010
Natural gas
2008
2009
2010
Prints / papers
Heating oil
Packaging in general
Electricity
Disposable trays Granulate
Business trafďŹ c
Environmental impact (core balance)
In km 40 000
2 500 000
2 000 000 30 000
1 500 000 20 000 1 000 000
10 000 500 000
0
0 2007
Own vehicles
2008
2009
2007
2010
2008
2009
2010
VOC kg
Vehicles of employees
Environmental impact million UBP
Air travel
CO 2 equivalent
65
Ypsomed – Sustainability Report
Refund of carbon tax for the first time in 2010
Ypsomed received a refund of its carbon tax for the first time in the 2010 calendar year. In cooperation with “myclimate,” the Swiss climate protection organization, this sum was used to offset all business travel by car or air for the entire Ypsomed Group. In total, Ypsomed was able to offset more than a thousand metric tons of CO 2 and the payments are being invested by the “myclimate” organization in high-quality climate protection projects at home and abroad. The refund was also invested in new, more energy-efficient company vehicles with lower CO2 emissions.
“Ypsomed distributes REKA travel checks amounting to the cost of a halffare public transport travelcard to employees free of charge each year, as an incentive for increased use of public transportation. At the same time, Ypsomed also charges a fee for parking spaces for employees’ cars.”
Fewer occupational accidents at Ypsomed again Ypsomed set a new record last year: never in the company’s history have so few accidents per 1000 employees been reported as in 2010, with a figure of just 28. It was also gratifying to see that 80 % of the events reported were minor accidents and the other 20 % were not very serious. This means that Ypsomed has achieved an important goal and continuously improved safety over the past few years, as can be seen from the illustration below. There is no doubt that the close cooperation with SUVA, the Swiss Accident Insurance Fund, has been very worthwhile.
Accidents per 1 000 employees 40 30 20 10 0 2003
2004
Accidents in the workplace
66
2005
2006
2007
2008
2009
2010
Ypsomed – Financial Report
Financial results 2010/11
In the 2010/11 business year, Ypsomed generated consolidated sales of CHF 242.5 million. Although there was a slight overall sales increase of 0.5 % in local currency as compared to the previous year, sales were some 4.5 % below the previous year’s figure of CHF 254.0 million, principally as a result of the strong Swiss franc. The total currency effect on sales amounted to CHF 12.9 million. Sales development in the individual business segments can be seen in the figure below. In the “Delivery Devices” segment, Ypsomed achieved sales of CHF 155.8 million as compared to CHF 168.3 million in the previous year. Thus, although the decrease of 7.4 % in sales is less than the figure of 13.6 % in the previous year, it continues to be strongly influenced by the decreasing revenues from Sanofi-Aventis. The proportion of sales with SanofiAventis declined from the previous year’s figure of 28 % to a current figure of 24 %.
“Sales development in the individual business segments illustrates the fact that Ypsomed is still in a demanding transformation phase. Ypsomed is investing in building up its diabetes care business and is simultaneously diversifying its customer base for pen systems with globally active pharmaceutical companies.”
Ypsomed further expands the diabetes business In the 2010/11 business year, Ypsomed continued to expand the Diabetes Direct Business with the market launch of the new mylife™ OmniPod ® insulin patch pump and intensified sales of the mylife™ Pura ® blood glucose monitoring system thereby generating consolidated sales of CHF 69.4 million. Although a positive increase in sales was achieved with both products in the last business year, the strong Swiss franc resulted in a major currency translation effect of CHF 8.3 million in the Diabetes Direct Business. Thus, in overall terms, sales in Swiss francs in the Diabetes Direct Business segment decreased by 2.1 % in comparison with the previous year.
“The strong Swiss franc resulted in a negative currency effect of CHF 12.9 million on consolidated sales. In all other respects, the revenues, expenditures and investments in foreign currencies are largely balanced out within the Ypsomed Group.”
Sales development In million CHF 180 160 140 120 100 80 60 40 20 0 2009/10
2010/11
Delivery Devices
Sales third parties
2009/10
2010/11
Diabetes Direct Business Sales with Sanofi-Aventis
2009/10
2010/11
Others
Currency effect
67
Financial Report
Consolidated sales of CHF 242.5 million – slight sales growth in local currency
Ypsomed – Financial Report
Ypsotec AG increases sales In the 2010/11 business year, the proportion of sales in the “Others” segment increased by 16.8 % from CHF 14.8 million in the previous year to CHF 17.3 million. This was particularly the result of a pleasing increase in sales by Ypsotec AG with third party customers, among others in the medical technology sector. The wholly owned subsidiary Ypsotec AG, with its head office in Grenchen, specializes in precision turning parts and subassemblies. In the “Others” segment, Ypsomed also consolidates external real estate income, which has seen largely stable development in the last business year at CHF 2.2 million.
Explanation of the currency effects at Ypsomed
With the exception of the pen needles, which are manufactured exclusively in Switzerland but are predominantly sold in euros and US dollars, foreign currencies are largely balanced out operationally in the product groups, as can be seen from the table below. The extent to which the Swiss franc has risen is illustrated by the differences in exchange rates between the start and end of the latest business year: as of March 31, 2011, the exchange rate of the Swiss franc against the euro was 1.30 and against the US dollar the rate was 0.91, as compared to 1.43 against the euro and 1.05 against the US dollar as of March 31, 2010.
Product groups
Gross profit improved slightly despite decrease in sales Although sales decreased by CHF 11.5 million in the 2010/11 business year, Ypsomed was able to increase gross profit slightly by 0.4 % from CHF 66.4 million in the previous year to CHF 66.7 million. Manufacturing costs of products sold and the costs of services declined by a total of CHF 11.8 million from CHF 187.6 million in the previous year to CHF 175.7 million in the 2010/11 business year. The gross margin thus rose from 26.2 % to 27.5 %, which was mainly due to efficiency improvement measures, such as combining production units, increasing automation and the rapid start-up of facilities as well as the creation of the production capacities required for new products, such as the ServoPen® insulin pen and a new disposable pen for human growth hormone. Improvement of the gross margin in the medium term to above 30 % is realistic in the mid-term compared to the 2010/11 business year which was negatively impacted by the very high costs and insufficient productivity of the new pen needle production facility in Solothurn. Moreover, an additional sales tax charge in Germany, which was contested by the whole industry, for blood glucose meters that had been supplied free of charge in previous years, burdened manufacturing costs with a one-off sum of CHF 0.6 million.
Sales
Costs
Pen systems and components
Swiss franc
Swiss franc
Pen needles
Euro / US dollar
Swiss franc
Diabetes business (DiaExpert)
Euro
Euro
Blood glucose monitoring systems
Euro
Euro
Insulin patch pump
Euro
US dollar / euro
Overview of currency effects for the individual products of the Ypsomed Group.
68
“Despite lower sales, Ypsomed improved the gross profit margin from 26.2 % to 27.5 % in the business year 2010/11.”
Consistent cost savings and investments in future growth
Staff cuts and lower administration expenses
The Board of Directors and the management believe in the strategy adopted by Ypsomed and have taken a large number of measures in the 2010/11 business year. In order to secure long-term competitiveness, investments were made in the expansion of international marketing and sales in the diabetes business, in the market launch of the promising mylife™ OmniPod ® insulin patch pump, and in the mylife™ Pura ® highprecision blood glucose monitoring system. At the same time, significant savings were made in operating costs in the Delivery Devices segment and in operational investments in machinery and buildings. The overview below illustrates the measures taken on the cost side.
In the 2010/11 business year, Ypsomed downsized by a total of 102 staff members within the Group and thus reduced personnel expense by CHF 7.7 million from CHF 115.5 million in the previous year to CHF 107.8 million. In Switzerland, Ypsomed cut staff numbers by 126, mostly by means of natural staff turnover but redundancies were also involved, particularly in the area of manual assembly and manufacturing. Furthermore, general streamlining was undertaken at management level and the executive management board was also reduced. Administration expenses decreased significantly by a total of CHF 4.6 million from CHF 18.0 million to CHF 13.4 million. However, patent expenses amounting to CHF 1.8 million were allocated to R & D expenses for the first time.
“Innovation and new product developments are important success factors for Ypsomed. This is why Ypsomed once again invested more than 10 % of sales revenues in research and development in the 2010/11 business year.”
Cost development In million CHF
140 120 100 80 60 40 20 0 2009/10 2010/11
2009/10 2010/11
2009/10 2010/11
2009/10 2010/11
2009/10 2010/11
Personnel expense
R & D expenses
Marketing & Sales expenses
Administration expenses
Capital expenditure (capex)
Cost development
thereof capitalized R & D
69
Financial Report
Ypsomed – Financial Report
Ypsomed – Financial Report
Continuing high research and development expenses
Operating profit of CHF 8.6 million and EBITDA of 33.7 million
Innovative products are of central significance for Ypsomed and levels of expenditure on research and development were once again correspondingly high, amounting to a total of CHF 26.1 million or 10.7 % of sales in the 2010/11 business year. It was pleasing to see another increase in licensing revenues of 14.1 %, from CHF 1.0 to CHF 1.1 million. Revenues from research and development contracts amounted to CHF 8.3 million, CHF 6.2 million lower than the previous year’s figure of CHF 14.4 million as a result of project phases, in which proportionally fewer injection molds were invoiced. For the same reason, research and development expenses were also lower at CHF 17.5 million than the previous year’s figure of CHF 21.7 million. In the last business year, Ypsomed reviewed its existing patent portfolio and performed a detailed cost-benefit analysis and thereafter undertook numerous cost optimizing measures in this respect. Moreover, amortization of CHF 1.5 million was incurred for the first time in the second half of the 2010/11 business year for capitalized R & D expenses for the newly launched pen needles and the ServoPen ®.
Despite very high marketing and sales expenses, operating profit in the 2010/11 business year reached CHF 8.6 million, not least as a result of the substantial cost savings and major efforts to improve efficiency in all areas of the company. The EBIT margin, at 3.6 %, was lower than the previous year’s figure of 5.3 % or 4.1 % respectively, if profit from real estate disposals is taken into account. Ypsomed achieved an operating profit before depreciation and amortization (EBITDA) of CHF 33.7 million, corresponding to an EBITDA margin of 13.9 % compared with 16.1 % in the previous year. Financial income in the last business year was CHF 0.6 million less than in the previous year. Financial expenses, made up of unrealized exchange losses and interest payments, stood at CHF 2.6 million, about the same level as the previous year, and the same applies to taxes at CHF 2.5 million. The consolidated net profit resulting from these figures amounted to CHF 5.2 million as compared with CHF 9.4 million in the previous year. Translated for the total of 12 621 863 outstanding shares, this resulted in net earnings of CHF 0.41 per share (previous year: CHF 0.79).
Expansion in marketing and sales In the 2010/11 business year, Ypsomed invested substantial resources in the market launch of the mylife™ OmniPod ® insulin patch pump and in building a market for the mylife™ Pura ® blood glucose monitoring system. In marketing and sales, Ypsomed expanded its staff by 12 % and created new sales force positions at the European subsidiaries as well as new positions at the central marketing department in Burgdorf. In addition, at the start of the business year, Ypsomed took over its former distributor in Great Britain and integrated it as an Ypsomed subsidiary. Marketing and sales expenses increased by a total of 15.8 % in the 2010/11 business year, from CHF 31.9 million to 36.9 million. The extensive market launch of the blood glucose monitoring system, in particular, required more resources than had been budgeted.
70
“Despite decreasing sales, the operating profit of the Delivery Devices business segment increased by 11.6 % from CHF 19.8 million to CHF 22.1 million. The operating result of the Diabetes Direct Business, however, amounted to a loss of CHF –12.9 million compared to CHF –9.2 million in the previous year, mainly caused by the high cost for the new product launches.”
Comprehensive income negatively impacted by currency effects
Solid balance sheet and high equity ratio of 80 %
In the 2010/11 business year, Ypsomed achieved a comprehensive income of CHF 3.5 million, significantly lower than the previous year’s figure of CHF 13.9 million. On the one hand, the currency translation differences from intercompany loans in foreign currency, amounting to CHF 4.3 million, were some CHF 1.8 million higher than in the previous year. On the other, the previous year’s figure of CHF 7.1 million of value increases with the participations in Bionime Corp. in Taiwan and Insulet Corp. in the USA was significantly higher than the CHF 2.1 million in the 2010/11 business year. The participations in Bionime Corp. and Insulet Corp. have been worthwhile for Ypsomed overall and have resulted in value increases of CHF 9.1 million over the past two years.
The asset side of Ypsomed’s balance sheet expanded by about CHF 12.6 million in the 2010/11 business year. On the one hand, goods inventories increased by CHF 4.8 million from CHF 46.8 million to CHF 51.6 million because of the market launch of new mylife™ products and the sales expansion into new countries. On the other, Ypsomed implemented industrialization projects for pharma customers, which increased the customer machinery positions by CHF 4.1 million from CHF 1.2 million to CHF 5.3 million. At the same time, as already mentioned, financial assets increased in value by CHF 2.1 million and the new figure as of March 31, 2011, was CHF 22.1 million. As a result of the lower investments and depreciation amounting to CHF 19.6 million, the value of fixed assets declined from CHF 186.3 million to CHF 179.1 million. Intangible assets, on the other hand, increased by CHF 9.2 million from CHF 352.3 million to CHF 361.5 million, particularly as a result of capitalized development expenditure for new products. On the liabilities side of the balance sheet, financial liabilities increased by CHF 10.0 million from CHF 30.0 million to CHF 40.0 million, while the loan from the major shareholder, Dr. h. c. Willy Michel, was reduced from CHF 44.5 million to CHF 34.5 million by 10.0 million. The equity ratio was 79.8 % as of March 31, 2011, compared to 81.2 % in the previous year.
“Ypsomed traditionally enjoys a healthy balance sheet and very high equity ratio, which provide the Group with financial security even during the current transformation phase.”
Adequate manufacturing capacities reduce operating investment Today, Ypsomed has sufficient modern manufacturing capacity and infrastructure at its disposal, not least because of very high levels of investment in the past. Investments in fixed assets in the 2010/11 business year were correspondingly lower. They totaled CHF 14.5 million and were thus 55 % lower than the previous year’s figure of CHF 32.5 million.
Dividend payment from capital reserves In the first half of the 2010/11 business year, Ypsomed paid shareholders a repayment of par value amounting to CHF 3.2 million. Ypsomed’s Board of Directors will once again propose to the General Meeting of Shareholders, to be held on June 28, 2011, in Bern, that a dividend payment of CHF 0.20 per registered share be made from tax-beneficial capital reserves.
71
Financial Report
Ypsomed – Financial Report
Ypsomed – Financial Report
Consolidated statement of comprehensive income (Audited IFRS figures) in thousand CHF Notes
Sales of goods and services
240 261
Rental Income Total Sales of goods and services
23
Cost of goods and services sold Gross profit
Gains from disposals of fixed assets
1 April 2010 – 31 March 2011
23
Licensing revenue Research and development reimbursed Research and development expenses
in %
99.1
1 April 2009 – 31 March 2010
251 688
in %
99.1
2 200
0.9
2 326
0.9
242 461
100.0
254 014
100
–175 737
–72.5
–187 568
–73.8
66 724
27.5
66 446
26.2
381
0.2
3 255
1.3
1 119
0.5
981
0.4
8 261
3.4
14 424
5.7
–17 508
–7.2
–21 748
–8.6
Research and development – expenses net
17
–9 247
–3.8
–7 324
–2.9
Marketing and sales expenses
17
–36 928
–15.2
–31 890
–12.6
Administration expenses
17
–13 439
–5.5
–18 020
–7.1
8 610
3.6
13 449
5.3
Operating profit
Financial income
19
1 666
0.7
1 010
0.4
Financial expense
20
–2 601
–1.1
–2 662
–1.0
7 675
3.2
11 797
4.6
–2 469
–1.0
–2 372
–0.9
5 206
2.1
9 425
3.7
Profit before income taxes
Income taxes
21
Net profit
Other comprehensive income
Change in fair value of financial assets Translation differences Tax effects
21
Comprehensive income Earnings per share (basic and diluted) in CHF
Operating profit Depreciation of fixed assets Amortization of intangible assets EBITDA (Operating profit before depreciation and amortization)
27
2 070
0.9
7 074
2.8
–4 320
–1.8
–2 563
–1.0
549
0.2
–40
0.0
3 504
1.4
13 896
5.5
0.41
0.79
8 610
13 449
19 645
23 946
5 436
33 691
Net profit and comprehensive income are fully attributable to the shareholders of Ypsomed Holding AG.
72
3 532
13.9
40 926
16.1
Ypsomed – Financial Report
Consolidated balance sheet
Assets
Notes
31 March 2011
in %
31 March 2010
in %
Cash and cash equivalents
4
5 022
0.7
8 065
1.2
Trade receivables
5
32 246
4.8
32 246
4.9
Other receivables, accrued income and prepaid expenses
6
13 098
1.9
11 396
1.7
185
0.0
467
0.1
51 576
7.6
46 800
7.1
5 258
0.8
1 178
0.2
107 385
15.9
100 152
15.1
8
22 129
3.3
20 058
3.0
21
3 991
0.6
2 572
0.4
Current income tax assets Inventories
7
Customer machinery Total current assets
Financial assets Deferred income tax assets Other non-current assets
9
530
0.1
629
0.1
Fixed assets
10
179 052
26.5
186 273
28.1
Intangible assets
11
361 544
53.6
352 327
53.2
Total non-current assets
567 247
84.1
561 858
84.9
Total assets
674 632
100.0
662 010
100.0
31 March 2011
in %
31 March 2010
in %
40 000
5.9
30 000
4.5
10 000
1.5
10 000
1.5
13 080
1.9
13 292
2.0
7 333
1.1
1 888
0.3
Liabilities and equity
Notes
Financial liabilities Current financial liabilities to major shareholder
13
Trade payables Prepayments from customers Current income taxes payable Other payables, accrued expenses and deferred income
12
Provisions
14
Total current liabilities
Non-current financial liabilities to major shareholder
13
Other non-current financial liabilities
4 593
0.7
3 335
0.5
24 318
3.6
18 369
2.8
1 418
0.2
1 069
0.2
100 742
14.9
77 953
11.8
24 500
3.6
34 500
5.2
42
0.0
656
0.1
Provisions
14
8 025
1.2
8 199
1.2
Deferred income tax liabilities
21
3 268
0.5
2 959
0.4
35 834
5.3
46 314
7.0
178 994
26.5
182 156
27.5
359 062
53.2
355 587
53.7
Total equity
538 056
79.8
537 743
81.2
Total liabilities and equity
674 632
100.0
662 010
100.0
Total non-current liabilities
Share capital Group reserves
16
73
Financial Report
(Audited IFRS figures) in thousand CHF
Ypsomed – Financial Report
Consolidated statement of cash flows (Audited IFRS figures) in thousand CHF Notes
Profit before income taxes
1 April 2010 – 31 March 2011
1 April 2009 – 31 March 2010
7 675
11 797
Depreciation of fixed assets
10
19 645
23 946
Amortization of intangible assets
11
5 436
3 532
182
–937
Financial income
19
–1 666
–1 010
Financial expense
20
2 601
2 662
–43
–3 281
33 830
36 709
Increase (–) / decrease (+) in trade receivables
–1 643
–2 156
Increase (–) / decrease (+) in other current and non-current assets
–1 830
–755
Increase (–) / decrease (+) in inventories
–6 223
–3 719
Increase (–) / decrease (+) in customer machinery
–4 080
172
46
–1 841
Increase (+) / decrease (–) in prepayments from customers
5 445
–2 775
Increase (+) / decrease (–) in other payables and accrued expenses
5 859
–2 215
Change in provisions, net
Gain (–) / loss (+) disposals fixed and financial assets Cash flow from operating activities before changes in net working capital
Increase (+) / decrease (–) in trade payables
–1 900
–939
Cash flow from operating activities
Income taxes paid
29 504
22 480
Disposals of marketable securities
0
2 417
Purchases of financial assets
0
–6 405
–14 485
–32 487
2 002
6 549
11
–11 739
–13 894
1
–3 681
0
Purchases of fixed assets
10
Disposals of fixed assets Purchases of intangible assets Acquisitions, net of cash acquired Interest received Other financial income Cash flow from investing activities
74
29
58
416
23
–27 458
–43 739
Ypsomed – Financial Report
(Audited IFRS figures) in thousand CHF
Repayment of financial liabilities to major shareholder
13
Proceeds from borrowings
1 April 2010 – 31 March 2011
1 April 2009 – 31 March 2010
–10 000
–10 024
10 000
30 000
Repayment of financial liabilities
–648
0
Interest paid
–914
–623
Increase of share capital
16
0
9 010
Par value repayment
16
–3 190
–7 575
Other financial expense Purchases of treasury shares Disposals of treasury shares Cash flow from financing activities
Effect of foreign currency translation Total cash flow
–160
–92
0
–249
0
43
–4 911
20 489
–178
–155
–3 043
–925
Cash and cash equivalents as of 1 April
4
8 065
8 990
Cash and cash equivalents as of 31 March
4
5 002
8 065
–3 043
–925
Net increase (+) / decrease (–) in cash and cash equivalents
75
Financial Report
Notes
Ypsomed – Financial Report
Consolidated statement of changes in equity (Audited IFRS figures) in thousand CHF
Balance as of 1 April 2009
Share capital
Capital reserves and share premium
109 631
166 652
Treasury Cumulative trans- Changes in value of financial shares lation exchange instruments reserve
–1 771
Comprehensive income Capital increase
Total
594
0
161 924
437 031
–2 209
6 679
9 425
13 896
21 083
75 196
96 279
–1 693
–1 693
Increase par value
59 032
– 59 032
0
Par value repayment
–7 590
Expenditures related to capital increase
15
–7 575
–235
–235
3
40
43
182 156
181 125
–1 951
–1 615
6 679
171 349
537 743
182 156
181 125
–1 951
–1 615
6 679
171 349
537 743
–3 656
1 955
5 206
3 504
Purchases of own shares Disposals of own shares (net of tax) Balance as of 31 March 2010
Balance as of 1 April 2010
Comprehensive income Par value repayment Balance as of 31 March 2011
76
Retained earnings
–3 162
–34
7
178 994
181 091
–1 944
–3 190
–5 271
8 634
176 555
538 056
Ypsomed â&#x20AC;&#x201C; Financial Report
Consolidated ďŹ nancial statements accounting policies
Ypsomed Holding AG is a limited company (Aktiengesellschaft) established on 29 December 2003 under Swiss law with a registered ofďŹ ce in Burgdorf (canton of Berne, Switzerland). Operating in the ďŹ eld of medical technology, Ypsomed is an independent manufacturer of injection pens for pharmaceutical and biotech companies, as well as a supplier of pen needles. Ypsomedâ&#x20AC;&#x2122;s core business consists of developing and marketing products and services allowing patients to administer their own medication. The Group operates production sites in Burgdorf, Solothurn, Grenchen (all CH) and Tabor (CZ) and a sales and distribution network across Europe. The shares of Ypsomed Holding AG have been traded on the principal market of the SIX Swiss Exchange since 2004, and since 2007, on the BX Bern eXchange. The company was created as a result of the split-up of the Disetronic group in 2003. Disetronic had been founded in 1984 to develop, manufacture and sell infusion pumps and had started the injection systems business in 1986. The consolidated ďŹ nancial statements were authorized for issuance by the Board of Directors of Ypsomed Holding Ltd on 17 May 2011 and recommended for acceptance to the Annual General Meeting scheduled for 28 June 2011.
E 6WDQGDUGV DQG LQWHUSUHWDWLRQV WKDW EHFDPH HÓ˝HFWLYH LQ WKH FXUUHQW ÓžQDQFLDO \HDU DQG GR QRW FXUUHQWO\ KDYH DQ LPSDFW RQ WKH ÓžQDQFLDO SRVLWLRQ SHUIRUPDQFH DQG FDVK ÓżRZV RI WKH <SVRPHG *URXS IFRS 1
$GGLWLRQDO ([FHSWLRQV IRU )LUVW WLPH $SSOLFDWLRQ The amended standard contains additional exceptions for the retrospective recognition of assets in connection with oil, gas and leasing for the ďŹ rst-time application of IFRS.
IFRS 2
&ODULÓžFDWLRQ RI WKH 6FRSH RI $SSOLFDWLRQ The amended standard clariďŹ es the deďŹ nition of a share-based payment. As part of the amendment, the rules of IFRIC 8 with respect to the scope of IFRS 2 and the requirements of IFRIC 11 regarding share-based payment involving an entityâ&#x20AC;&#x2122;s own equity instruments were integrated into IFRS 2.
IAS 27
&RQVROLGDWHG DQG VHSDUDWH ÓžQDQFLDO VWDWHPHQWV The revised standard requires that changes in ownership interest in Group companies that do not result in loss of control by the Group are to be accounted for as equity transactions.
IAS 32
&ODVVLÓžFDWLRQ RI 5LJKWV ,VVXHV For rights issues offered for a ďŹ xed amount of foreign currency current practice appeared to require such issues to be accounted for as derivative liabilities. The amendment states that if such rights are issued pro rata to an entityâ&#x20AC;&#x2122;s all existing shareholders in the same class for a ďŹ xed amount of currency, they should be classiďŹ ed as equity regardless of the currency in which the exercise price is denominated.
IAS 39
(OLJLEOH KHGJHG LWHPV The changes relate to hedging transactions and specify the principles for determining hedgeable items.
$QQXDO ,PSURYHPHQWV ² $PHQGPHQW RI D QXPEHU RI VWDQGDUGV DQG LQWHUSUHWDWLRQV LVVXHG LQ $SULO
The improvements to IFRSs are related to clariďŹ cation issues which have been applicable since January 1, 2010. The application of these amendments has no material impact on the consolidated ďŹ nancial statements.
2. Summary of signiďŹ cant accounting policies Basis of preparation The consolidated ďŹ nancial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). They are based on the ďŹ nancial statements of the subsidiaries prepared for the same reporting period using consistent accounting policies. The Groupâ&#x20AC;&#x2122;s reporting currency is the Swiss franc (CHF). The period under review comprises twelve months and ends 31 March.
The accompanying ďŹ nancial statements have been published in German and English. The German version is legally binding.
All ďŹ gures included in these ďŹ nancial statements and notes to the ďŹ nancial statements are rounded to the nearest CHF 1 000 except where otherwise indicated. The consolidated ďŹ nancial statements have been prepared on a historical cost basis, except for certain ďŹ nancial assets and ďŹ nancial liabilities that are measured at fair value. Changes in accounting policies D 6WDQGDUGV DGRSWHG LQ WKH FXUUHQW ÓžQDQFLDO \HDU New and amended standards and interpretations listed below were implemented by Ypsomed on 1 April 2010. The amendments do not have an impact on the Ypsomedâ&#x20AC;&#x2122;s ďŹ nancial position, performance and cash ďŹ&#x201A;ows.
IFRS 3R
%XVLQHVV FRPELQDWLRQV T he changes affect the measurement of contingent liabilities, the classiďŹ cation of assets and liabilities at the acquisition date, treatment of contingent considerations and the immediate recognition of transaction costs in the statement of comprehensive income. In addition, an option regarding the measurement of non-controlling interests and provisions in the event of step acquisitions are introduced. The application of the revised standard did not have a material impact on the consolidated ďŹ nancial statements.
F 6WDQGDUGV DQG LQWHUSUHWDWLRQV WKDW DUH QRW \HW HÓ˝HFWLYH DQG KDYH QRW EHHQ DGRSWHG HDUO\ E\ <SVRPHG Ypsomed has refrained from the early adoption of the following standards and interpretations and will implement them in the accounting period they become applicable. IFRS 1
'LVFORVXUH ([HPSWLRQ 3XUVXDQW WR ,)56 HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ RQ RU DIWHU -XO\
The amended standard grants ďŹ rst-time adopters the same transitional provisions as were granted to users already applying IFRS when IFRS 7 has been introduced. Ypsomed is not affected by this amendment.
77
Financial Report
1. General information
Ypsomed â&#x20AC;&#x201C; Financial Report
IFRS 1
)L[HG 'DWH LQ 'HUHFRJQLWLRQ ([FHSWLRQ HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ RQ RU DIWHU -XO\
The amendment replaces the references to the ďŹ xed time of transition of â&#x20AC;&#x153;1 January 2004â&#x20AC;? by â&#x20AC;&#x153;Time of transition to IFRSâ&#x20AC;?. Ypsomed is not affected by this amendment.
IFRS 1
6HYHUH +\SHULQÓżDWLRQ ([FHSWLRQ HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ RQ RU DIWHU -XO\
The purpose of this amendment is to provide guidance on presenting ďŹ nancial statements in accordance with IFRS after a period during which a company was unable to comply with IFRS because its functional currency was subject to hyperinďŹ&#x201A;ation. Ypsomed will not be affected by this amendment.
IFRS 7
7UDQVIHU RI )LQDQFLDO $VVHWV HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV E HJLQQLQJ RQ RU DIWHU -XO\
The amendment relates to improvements with respect to presentation and disclosures in order to clarify the impact of the transfer of ďŹ nancial assets. Ypsomed will analyze the amendment in detail and implement the provisions accordingly.
IFRS 9
)LQDQFLDO ,QVWUXPHQWV HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ RQ RU DIWHU -DQXDU\
The new standard IFRS 9 relates to classiďŹ cation and measurement of ďŹ nancial assets and ďŹ nancial liabilities and represents the ďŹ rst phase of the project to replace IAS 39. According to IFRS 9 the classiďŹ cation of the ďŹ nancial asset is based on the entityâ&#x20AC;&#x2122;s business model and does not depend solely on the contractual provisions of the ďŹ nancial instruments. Ypsomed currently evaluates the impact of the new standard on its consolidated ďŹ nancial statements.
IAS 12
IAS 24
5HFRYHU\ RI WKH FDUU\LQJ DPRXQW HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ RQ RU DIWHU -DQXDU\
The amendment of the standard deďŹ nes whether the carrying amount of an asset is recovered through use or sale. The amendment provides a practical solution to the problem by introducing a presumption that recovery of the carrying amount will be through sale. Ypsomed will analyze the impact on its consolidated ďŹ nancial statements and implement the amendment accordingly, but does not anticipate any impact on its consolidated ďŹ nancial statements. 5HODWHG 3DUW\ 'LVFORVXUHV HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV E HJLQQLQJ RQ RU DIWHU -DQXDU\
The amendments to IAS 24 are disclosure related only and will have no impact on the Groupâ&#x20AC;&#x2122;s ďŹ nancial statements.
IFRIC 14 7 KH /LPLW RQ D 'HÓžQHG %HQHÓžW $VVHW 0LQLPXP )XQGLQJ 5HTXLUHPHQWV DQG WKHLU ,QWHUDFWLRQ HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ DIWHU -DQXDU\
The change in interpretation permits a company, under certain circumstances to present prepayments of contributions to deďŹ ned beneďŹ t pension plans under IAS 19 as an asset. Ypsomed is evaluating the impact of IFRIC 14 but does not anticipate any signiďŹ cant impact on its consolidated ďŹ nancial statements.
78
IFRIC 19 ( [WLQJXLVKLQJ )LQDQFLDO /LDELOLWLHV ZLWK (TXLW\ ,QVWUXPHQWV HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ RQ RU DIWHU -XO\
The interpretation governs the treatment of a full or partial repayment of a ďŹ nancial liability by issuing equity instruments. Ypsomed will analyze the implication, but does not anticipate any impact on the consolidated ďŹ nancial statements. $QQXDO ,PSURYHPHQWV ² $PHQGPHQW RI YDULRXV VWDQGDUGV DQG LQWHUSUHWDWLRQV PDLQO\ HÓ˝HFWLYH IRU ÓžQDQFLDO \HDUV EHJLQQLQJ RQ RU DIWHU -DQXDU\
The IASB issued a number of largely minor amendments to the existing standards within the scope of its annual improvement process. Ypsomed analyzes the impact and does not expect these amendments to have a material impact on its consolidated ďŹ nancial statements. Consolidation 6XEVLGLDULHV Subsidiaries are all entities over which the Group has the power to govern the ďŹ nancial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or tradable determine whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is obtained. They are de-consolidated from the date that control ceases.
Subsidiaries are recognized using the acquisition method. The consideration transferred in exchange for obtaining control is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, the liabilities incurred by the Group to the former owners and the equity interest issued by the Group. The net assets acquired comprising identiďŹ able assets, liabilities and contingent liabilities are recognized at their fair value. The compensation encompasses cash payments as well as the fair market value of both the transferred assets, the incurred or assumed liabilities, and in addition the equity instruments as of the trade date that have been issued by the Group. Goodwill is recognized as of the acquisition date and is measured as the excess of the consideration transferred as described above over the fair value of the identiďŹ ed net assets. If the Group does not acquire 100 % of the shares of a company, non-controlling interests are normally recognized in the balance sheet according to their share in the fair value of the acquired net assets. However, in limited cases, the non-controlling interest may be measured at fair value. Transactions, balances and gains on transactions between subsidiaries are eliminated in full. Losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. $VVRFLDWHV Associates are those companies that are signiďŹ cantly inďŹ&#x201A;uenced but not controlled by the Group. This normally applies to investments in which the Group owns between 20 % and 50 %. Investments in associates are accounted for using the equity method. The Groupâ&#x20AC;&#x2122;s investment in associates includes goodwill identiďŹ ed on acquisition. Ypsomed does not currently own any associates. Foreign currency translation On initial recognition foreign currency transactions are translated to the functional currency using the exchange rate prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of comprehensive income as ďŹ nancial income or expenses.
Ypsomed – Financial Report
Financial assets and liabilities Ypsomed allocates financial assets and liabilities to the following categories:
• • • •
Financial assets and liabilities at fair value through profit or loss Financial assets available for sale Loans and receivables Financial liabilities at amortized cost
The categorization of financial assets and liabilities depends on the purpose of the financial instrument. Management determines the category at the time of acquisition. All purchases and sales of financial assets and liabilities are recognized on the trade date, i.e. the day on which the Group is obliged to purchase or sell the asset or liability. Financial assets not recognized at fair value are regularly reviewed for impairment. Financial assets are only derecognized if Ypsomed has lost control over them or the rights associated with them have expired. Financial liabilities are derecognized when they are settled or do not have to be settled anymore according to their contractual rights. For the subsequent measurement of financial assets and financial liabilities Ypsomed distinguishes between the following types: )LQDQFLDO DVVHWV DQG OLDELOLWLHV DW IDLU YDOXH WKURXJK SURӾW RU ORVV Financial assets and liabilities are allocated to this category when they are intended for trading purposes or allocated by designation when initially recognized. Ypsomed has not designated any financial asset or liabilities to this category at initial recognition. Initial recognition and subsequent measurement of financial instruments in this category are at fair value. Realized and unrealized changes to fair values are recognized through profit or loss in financial income or expenses. Derivative financial instruments are used to hedge currency and interest rate risk and are also included in this category. Ypsomed does not use hedge accounting. Ypsomed has no such financial assets and liabilities. /RDQV DQG UHFHLYDEOHV Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and include loans, trade receivables and other receivables. Initial recognition is at fair value plus transaction costs. Subsequent measurement is at amortized cost using the effective interest method less accumulated allowances. With this method, the difference between the amortized cost and the expected repayment value is allocated over the period of the investment resulting in a constant interest rate until final maturity. The derecognition of receivables or loans is accounted for if the settlement has occurred or a certificate of unsatisfied claims has been obtained.
)LQDQFLDO DVVHWV DYDLODEOH IRU VDOH Assets that cannot be allocated to the above categories are classified as available for sale and are recognized at fair value. Changes in fair value are recorded directly in other comprehensive income. On sale, impairment or any other form of disposal the cumulative gain or loss previously recognized in the statement of comprehensive income is reclassified to profit or loss and reported as financial income or financial expense. )LQDQFLDO OLDELOLWLHV DW DPRUWL]HG FRVW Financial debts, trade payables and other liabilities are included in this category. Initial recognition is at fair value less transaction costs. Subsequent measurement is at amortized cost using the effective interest method. Financial liabilities are derecognized when they are settled or do not have to be settled anymore according to their contractual rights. Cash Cash and cash equivalents comprise cash on hand, demand deposits and time deposits with original maturity dates of three months or less. They form the basis of the consolidated statement of cash flows. Trade receivables / other receivables Trade receivables and other receivables are recognized at the original invoice amount or nominal value (i. e. fair value). An allowance is set aside if objective indications show that receivables cannot be collected. Allowances are based on individual valuations. Inventories Raw materials and merchandise purchased are recognized at cost, semifinished and finished goods at their cost of conversion. Costs of conversion include direct production costs and production overhead related to these goods. After initial recognition inventories are valued at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated selling expenses and estimated costs of completion. Inventories with a lower net realizable value compared to cost are adjusted to the net realizable value. Inventories that cannot be sold are written off in full. The costs of inventories are determined by using the FIFO method. Customer machinery / Prepayments from customers Ypsomed receives prepayments from pharma partners in order to acquire production machinery for these pharma partners. Ypsomed coordinates the manufacturing of the machineries with suppliers and makes contractual advance payments to the suppliers. After installation and successful test runs, the machinery is accepted by Ypsomed. From a legal and commercial viewpoint, once the machinery has been accepted by Ypsomed the title is transferred to the pharma partners. The advance and final payments made by Ypsomed to suppliers are disclosed in the consolidated balance sheet until acceptance of the machinery as current assets. The prepayments from customers are recognized in current liabilities. Once the machinery is accepted, the advance and final payments from Ypsomed are settled with the prepayments from the customer.
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Financial Report
Assets and liabilities of foreign subsidiaries are converted into the Group’s presentation currency at year-end exchange rates. The statement of comprehensive income and the statement of cash flows are translated at annual average exchange rates. The effects of this conversion as well as foreign exchange gains and losses arising from the translation of not currency congruent financed equity-like corporate loans denominated in foreign currencies, which are a component of net investments in a subsidiary and the repayment of which is neither planned nor intended, are disclosed as currency translation differences in other comprehensive income.
Ypsomed – Financial Report
Fixed assets Fixed assets are carried at cost less accumulated depreciation. Depreciation on fixed assets is calculated using the straight-line method based on the following estimated useful lives:
• • • • •
Buildings 20 to 40 years Technical assets 6 to 20 years Machinery and company facilities 3 to 12 years Fixtures and fittings and vehicles 3 to 8 years Other fixed assets 2 to 10 years
Depreciation is included in the following income statement categories: manufacturing costs of goods sold, R & D costs, marketing and distribution costs and administration costs. Should an asset be impaired as a result of impairment testing the corresponding impairment charge is included in depreciation and reported separately as an impairment loss. Long-term leasing contracts, which are, in substance, equivalent to the purchase of assets with long-term financing (finance leases), are recognized at the beginning of the lease as an asset and measured at fair value or, if lower, the present value of minimum lease payments. The asset is depreciated over the the duration of the contract or, if shorter, the useful life using the straight-line method. Intangible assets *RRGZLOO Goodwill is recognized at the time of the business combination and corresponds to the difference between the consideration transferred and the fair value of the net identifiable assets as identified in the purchase price allocation. Goodwill is capitalized and allocated to the cash-generating unit that is the principal beneficiary. A negative goodwill (bargain purchase) is recognized in the statement of comprehensive income. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.
'HYHORSPHQW FRVWV Development costs are recognized as assets if an asset is identifiable, it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be reliably measured. Recognized development costs are amortized on a straightline basis over their useful life. Amortization is included in research and development expenses and cost of goods and services sold. 2WKHU LQWDQJLEOH DVVHWV Patents have a definite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of patents over their estimated useful lives of 15 to 20 years. Amortization is included in research and development expenses and in cost of goods and services sold. Software is capitalized on the basis of the costs incurred to acquire the software and bring the software to use. These costs are amortized over the estimated useful live of three to four years using the straight-line method. Amortization is mainly included in administration expenses. Intangible assets, such as brand names or customer relationships that were acquired through a business combination, are identified and reported separately from goodwill if they fulfill the definition of an intangible asset and their fair value can be reliably determined. Such intangible assets are measured at fair value at their initial recognition. After recognition those assets are amortized over the useful life of five to eight years using the straight-line method. Amortization is included in marketing and distribution costs.
80
Financial assets available for sale Initial recognition is at acquisition cost (fair value) plus transaction costs. Subsequent measurement is at fair value. Changes in fair value are reported in other comprehensive income. Upon sale, the fair value adjustments previously reported in other comprehensive income are reclassified to the statement of comprehensive income. Impairment of assets Non-financial assets that have an indefinite useful life, goodwill, and capitalized development costs for products not yet in use are not subject to amortization but are tested for impairment when impairment indicators have been identified but at least annually. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the asset might be impaired. An impairment loss is recognized if the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the fair value less cost to sell and the value in use. The impairment testing is performed at the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets (cash-generating units). For financial assets categorized as available for sale significant or prolonged unrealized losses accumulated in a separate component of equity result in impairment (reclassification to the income statement). Unrealized losses of 20 % or more are considered significant and unrealized losses over a period of more than six months are deemed prolonged. Financial liabilities to shareholders The loan to the major shareholder is measured at its nominal amount. Provisions Provisions are recognized to cover present legal or constructive obligations resulting from past events if it is probable that on outflow of economic resources will be required to settle the obligation and the amount of the obligation can be measured reliably. If the obligation cannot be measured reliably or the outflow of economic benefit is not probable, the resulting contingent liability is disclosed in the notes. Employee pensions The vast majority of Ypsomed’s employees are insured in Switzerland through pension funds which are legally and financially independent of the Ypsomed Group. These plans provide additional coverage to the national Old Age and Survivors Insurance (AHV) and cover risks against the financial consequences of old age, invalidity and death. Employees of foreign subsidiaries are responsible for their own retirement provision based on the legal provisions of the corresponding countries. Therefore, Ypsomed does not incur any additional staff pension costs. Swiss pension plans meet the requirements for a defined benefit pension plan according to IAS 19. The expenses and liabilities of Ypsomed in connection with defined benefit plans are calculated annually by external experts on the basis of actuarial assumptions using the projected unit credit method. The assumptions include projections of future salary developments, employee turnover rates and mortality tables.
Ypsomed – Financial Report
Actuarial gains and losses arise from changes in actuarial assumptions and the difference between actuarial assumptions and actual values. If cumulative actuarial gains or losses not yet recognized exceed 10 % of the higher amount of the fair value of plan assets or the present value of the defined benefit obligation, the exceeding amount is amortized over the remaining average service period of the insured employees through profit or loss. Current income taxes Income taxes are calculated based on reported profits for the corresponding period and in conformity with the tax laws prevailing in the individual countries and recognized in profit or loss of the current year.
Deferred taxes are taken into account on temporary differences between tax bases and the carrying amounts in the consolidated financial statements and are calculated using the liability method based on effective or expected effective local tax rates. Deferred tax assets are recognized for loss carry-forwards where it is highly probable that they can be offset against future taxable income. The changes in deferred tax assets and liabilities are recognized in the statement of comprehensive income. Taxes on transactions that are reported in other comprehensive income are also recognized in other comprehensive income. Revenue recognition 1HW SURFHHGV Net proceeds correspond to received payments and receivables for goods supplied to customers, less price reductions, discounts and refunds. Appropriate provision is taken for all costs arising in connection with the sale including the costs of return of goods. Revenue from sale of goods and services is recognized when risk and benefit of ownership have been transferred to the buyer. Net proceeds are only recognized if the amount of revenue can be measured reliably and it is probable that the economic benefit associated with the transaction will flow to the entity.
5HQWDO ,QFRPH Rental income arises based on rental agreements from renting out properties owned by the Ypsomed Group. /LFHQVLQJ UHYHQXHV Ypsomed receives license revenues from the exploitation of Ypsomed assets by external parties according the terms and conditions of the underlying agreements. This income is recognized when the inflow of financial benefit is probable and the amounts can be reliably measured. *DLQ IURP GLVSRVDOV RI Ӿ[HG DQG LQWDQJLEOH DVVHWV Gains from disposals of fixed assets and intangible assets are disclosed separately in the consolidated statement of comprehensive income. Losses from disposals of fixed assets and intangible assets are recorded in the function of the statement of comprehensive income, in which the assets have been used.
Research and development Research costs are recognized as an expense in the period in which they are incurred. Development costs are recognized as assets if the project is identifiable, it is probable that the expected future economic benefits that are attributable to the project will flow to the entity and the cost of the project can be reliably measured. Capitalized research and development costs are amortized over the useful life using the straight-line method. Fixed assets used for research and development are capitalized and depreciated over their useful life on a straight-line basis. Borrowing costs Borrowing costs that are related to a qualifying asset are recognized in the carrying amount of the qualifying asset, all other borrowing cost are recognized as expense.
3. Legal risks The Ypsomed Group develops, manufactures and sells innovative medical devices, based on technical expertise and technologies protected by intellectual property rights. The Group is either owner of the required rights or license holder of the property rights of a third party. In the medical devices market, disputes over patent rights and patent infringements occur fairly frequently and can involve costly and time-intensive patent infringement suits. The development, manufacture and sale of medical products involves product liability risks and can lead to product recall. There is no guarantee that the present liability insurance is sufficient to cover all damage cases connected with the development, manufacture and sale of medical products and that the insurance companies will still be prepared in future to insure Ypsomed Group business activities against liability risks. The risk of patent infringement or product liability claims by a third party, risks in connection with the recall of products and negative developments in the reimbursement of costs of Ypsomed products through stateprescribed cost-saving measures in the area of healthcare or by health insurance schemes as well as problems with authorization and upholding of authorization of drugs used together with Ypsomed products can also result in lasting detrimental effects, not only on the business performance of the Ypsomed Group but also on its financial situation and competitive position in the marketplace.
4. Key assumptions and estimates The preparation of the consolidated financial statements in accordance with generally accepted accounting principles, assumes that management makes certain estimates and assumptions which have an impact on the reported carrying amounts assets and liabilities shown in the balance sheet and income and expenses accounted for in the period under review. These estimates and assumptions are based on future expectations and are held reasonable at the time of preparation of the financial statements. The actual amounts can deviate from these assumptions. The most important influential factors on positions based on estimates and assumptions are expressed as follows:
Contributions to product development Reimbursement from third parties for the development of new products is recognized in the period during which the development costs are incurred.
81
Financial Report
The difference between the present value of the defined benefit obligation and the fair value of the plan assets is reported separately as an asset under long-term fixed assets or as a liability under provisions taking into consideration any unrecognized actuarial gains and losses and past service costs. An asset is only recognized if Ypsomed has a future economic benefit in the form of refunds or lower contributions.
Ypsomed – Financial Report
Goodwill Ypsomed carries out an impairment test on capitalized goodwill at least once a year. The value in use of the entity generating the cash flows to which goodwill has been allocated is determined to ascertain whether there has been impairment. The estimate of future cash flows is based on medium-term planning approved by the Board of Directors and Executive Board, as well as on a permanent growth rate for cash flows outside the planning years. The discount rates based on external factors also have a crucial impact on the calculation of the value in use. The goodwill as of 31 March 2011 amounted CHF 312.2 million (prior year CHF 309.0 million). Capitalized development expenses The development expenses are capitalized when the requirements for the capitalization are met. Ypsomed’s estimation of future economic benefits is based on management’s assumptions with regard to all economic baseline conditions, expected prospective cash flows and the discount rates to be applied within the relevant period of time of economic benefits. Capitalized development expenses amounted to CHF 41.4 million as of 31 March 2011 (prior year CHF 22.9 million). Provisions for warranties When determining the provisions for warranties, management takes into accounted currently marketed own products and sets the provisions necessary to cover all callable claims based on the maturity and characteristics of the products as well as experience. Provisions for warranties as of 31 March, 2011, amount to CHF 1.8 million (prior year CHF 1.7 million). Employee pensions The calculation of pension obligations is carried out by using the projected unit credit method. The calculation takes into accounted various actuarial assumptions as well as assumptions for future developments of capital markets and salary increases. Due to the long-term nature of the plans, these assumptions are subject to significant uncertainty. The most important parameters are disclosed in the notes to the consolidated financial statements. Provision for employee pensions as of 31 March, 2011, amount to CHF 7.1 million (prior year CHF 6.9 million). Other non-current assets as of 31 March 2011 include employee pensions in the amounted of CHF 0.4 million (prior year CHF 0.5 million). Income taxes When accruals for income taxes are made for a period, uncertainties regarding final tax payments remain. Estimates that vary from the definitive tax amount have an impact on current and deferred income taxes. In particular, with the capitalization of deferred tax assets from losses carried forward, the value of these tax loss carry-forwards and the tax rates to be applied must be estimated. Deferred income tax assets related to tax loss carryforwards amount of CHF 3.9 million (prior year CHF 2.5 million).
82
Ypsomed – Financial Report
Notes to the consolidated financial statements In thousand CHF, unless otherwise stated
1. Acquisitions On April 1, 2010, Ypsomed Ltd, UK acquired the assets of the diabetes business of its existing distributor in Great Britain for the distribution of mylife™ Penfine ® Pen-Needles, mylife™ Pura ® blood glucose monitoring systems and mylife™ OmniPod ® insulin patch pumps. On August 1, 2010, Ypsomed GmbH Germany acquired 100 % of the shares of DIABETIC
Assets
Cash and cash equivalents
SERVICES Vertriebs- und Beratungsgesellschaft GmbH in Ulm. In the prior period no acquisitions have been made. The following assets and liabilities were acquired as part of the business combination:
Book value after acquisition
5
Trade receivables
126
Inventories
509
Other assets Total assets
4 644
Trade payables
75
Other liabilities
76
Total liabilities
152
Net working capital
492
Goodwill Total purchase consideration Cash and cash equivalents acquired
4 468 4 960
–5
Deferred purchase consideration
–383
Offsetting of receivables
–891
Net cash outflow
The goodwill is attributable to the stronger market position and the expected synergies resulting in a higher profitability. The goodwill of CHF 4.5 million is deductible for tax purposes. Ypsomed Ltd. UK has agreed to pay to the seller a subsequent purchase price payment. The amount of the payment will be determined by multiplying the 2009/10 revenues with a multiplier. The multiplier will be determined based on the 2010/11 revenues, however, the
3 681
factor remains in the agreed range and thus the amount of payment itself is limited. Based on the actual revenues the subsequent payment will amount to TCHF 641, thereof TCHF 258 was paid as per 31.03.2011. Book value and fair value of the trade receivables are identical and do not include any provisions. The transaction costs amount to TCHF 120 and are expensed as part of administration expenses.
Contribution of acquired business / companies from the acquisition date
Sales of goods and services Net profit
4 920 366
Contribution if the acquisition date had been 1 April
Sales of goods and services Net profit
5 295 388
83
Financial Report
Liabilities
Ypsomed – Financial Report
2. Consolidation scope
Share capital
Interest held Capital / Votes
Ypsomed Holding AG, CH-Burgdorf
Research & Development
Production
Marketing and Sales
CHF 178 993 807
Ypsomed AG, CH-Burgdorf
100 %
CHF
10 000 000
Ypsomed Distribution AG, CH-Burgdorf
100 %
CHF
6 000 000
TecPharma Licensing AG, CH-Burgdorf
100 %
CHF
100 000
• •
•
•
•
Ypsotec AG, CH-Grenchen
100 %
CHF
1 000 000
•
•
100 %
CZK
200 000
•
•
Ypsomed GmbH, DE-Liederbach
100 %
EUR
100 000
•
DiaExpert GmbH, DE-Liederbach
100 %
EUR
50 000
•
Feelfree GmbH, DE-Liederbach
100 %
EUR
25 000
•
Ypsomed AB, SE-Helsingborg
100 %
SEK
100 000
•
Ypsomed S.A.S., FR-Paris
100 %
EUR
50 000
•
Ypsomed BV, NL-Vianen
100 %
EUR
50 000
•
Ypsomed India Private Ltd, IN-New Delhi
100 %
INR
26 657 470
•
Ypsomed Limited, GB-Selby
100 %
GBP
300 000
•
Euro (EUR) US-dollar (USD)
•
•
Ypsotec s.r.o., CZ-Tábor
3. Foreign currencies
Financing and Services
Balance sheet year-end rates
Income statement average rates
31 March 2011
31 March 2010
2010/11
2009/10
1.30
1.43
1.34
1.50
0.91
1.05
1.01
1.06
Swedish krona (100 SEK)
14.52
14.63
14.43
14.50
Norwegian krone (100 NOK)
16.57
17.73
16.87
17.64
Danish krone (100 DKK)
17.42
19.14
17.98
20.18
Czech koruna (100 CZK)
5.29
5.60
5.37
5.79
Indian rupee (100 INR)
2.05
2.35
2.22
2.24
British pound (GBP)
1.47
1.59
1.58
1.70
31 March 2011
31 March 2010
4. Cash and cash equivalents Cash Postal accounts Bank accounts Total
84
15
18
586
174
4 421
7 874
5 022
8 065
Ypsomed – Financial Report
5. Trade receivables Trade receivables Provision for bad and doubtful debts
31 March 2011
31 March 2010
32 721
32 812
–474
–566
32 246
32 246
2010/11
2009/10
566
1 997
12
50
Use
–53
–1 388
Reversal
–41
–81
Total
Provision for bad and doubtful debts
At 1 April Addition
Currency translation differences At 31 March Age analysis of receivables past due but not impaired
Past due up to 2 months Past due 2 to 4 months Past due over 4 months Total receivables past due but not impaired Age analysis of receivables past due and impaired
Due over 4 months Total receivables past due and impaired
Of which impaired
–10
–11
474
566
31 March 2011
31 March 2010
3 026
2 811
882
93
172
126
4 080
3 030
31 March 2011
31 March 2010
474
566
474
566
474
566
31 March 2011
31 March 2010
5 024
5 290
6. Other receivables, accrued income and prepaid expenses Other receivables Accrued income, prepaid expenses and accrued income Total
8 073
6 106
13 098
11 396
Other receivables, accrued income and prepaid expenses include financial assets in the amount of CHF 6.9 million (prior year CHF 7.0 million) which are due within two month and for which no provision is required. The book values of the financial assets correspond to their fair value.
85
Financial Report
The net book values for trade receivables correspond to the fair value.
Ypsomed – Financial Report
7. Inventories 31 March 2011
31 March 2010
5 227
5 620
Goods in process
15 774
18 447
Finished products
32 627
26 182
Raw materials and supplies
53 628
50 248
–2 052
–3 448
51 576
46 800
31 March 2011
31 March 2010
22 129
20 058
31 March 2011
31 March 2010
Employee benefits
421
519
Other non-current assets
109
110
530
629
Gross inventories
Valuation allowance Total
8. Financial assets Bionime Corp. Taiwan and Insulet Corp. USA
9. Other non-current assets
Total Other non-current assets include financial assets in the amount of TCHF 105 (prior year TCHF 106 ).
86
Ypsomed – Financial Report
10. Fixed assets Land and buildings
Machinery and equipment
93 966
212 031
Additions
1 525
Disposals
–6 135 671
13 744
384
–3
–91
–115
90 024
236 717
13 019
14 391
354 150
At 1 April 2009
–22 059
–120 789
–7 355
0
–150 203
Depreciation
–2 915
–19 282
–1 750
–23 946
2 127
3 010
858
5 996
218
–55
163
Cost
At 1 April 2009
Transfers Currency translation differences At 31 March 2010
Other Assets fixed assets under construction
11 417
15 723
14 039
2 390
14 533
–3 007
–1 057
Total
333 136 32 487 –10 198
–15 865
–1 066 –209
Accumulated depreciation
Transfers Currency translation differences
2
48
62
–22 845
–136 793
–8 240
0
–167 878
Net book value at 1 April 2009
71 907
91 242
4 062
15 723
182 933
Net book value at 31 March 2010
67 180
99 924
4 779
14 391
186 273
90 024
236 717
13 019
14 391
354 150
1 450
6 397
1 113
5 774
14 734
–16 151
–1 126
7 965
–314
At 31 March 2010
113
Cost
At 1 April 2010
Additions Disposals Transfers Currency translation differences
1 305
–17 277 –9 397
–442
–10
–269
–183
92 769
234 658
12 508
10 768
350 703
At 1 April 2010
–22 845
–136 793
–8 240
0
–167 878
Depreciation
–2 998
–14 954
–1 693
–19 645
Disposals
14 309
1 009
15 319
Transfers
125
201
327
At 31 March 2011
–462
Accumulated depreciation
Currency translation differences At 31 March 2011
Net book value at 1 April 2010 Net book value at 31 March 2011
5
121
101
–25 838
–137 191
–8 621
0
–171 651
226
67 180
99 924
4 779
14 391
186 273
66 931
97 467
3 887
10 768
179 052
There are no fixed assets pledged to secure loans and there are no long-term leasing agreements (financial leasing). The fire insurance value of fixed assets at 31 March 2011 amounted to CHF 514.4 million (prior year CHF 506.7 million).
87
Financial Report
Disposals
Ypsomed – Financial Report
11. Intangible assets Goodwill Development costs
Other intangible assets
Total
22 875
20 086
367 315
9 969
5 177
15 146
Disposals
–221
–221
Transfers
148
148
Cost
At 1 April 2009
324 355
Additions
Currency translation differences At 31 March 2010
–419
–1 092
323 682
–673 32 844
24 770
381 295
–14 690
0
–11 110
–25 799
–3 532
–3 532
220
220
140
142
Accumulated amortization
At 1 April 2009 Amortization Transfers Currency translation differences
2
At 31 March 2010
–14 688
0
–14 281
–28 969
Net book value at 1 April 2009
309 665
22 875
8 976
341 515
Net book value at 31 March 2010
308 994
32 844
10 489
352 327
323 682
32 844
24 770
381 295
10 046
1 693
11 739
–161
–161
Cost
At 1 April 2010
Additions Disposals Change in consolidation scope
4 468
4 468
Transfers Currency translation differences At 31 March 2011
115 –1 307
115
–600
–1 907
326 842
42 889
25 818
395 549
–14 688
0
–14 281
–28 969
–1 452
–3 985
–5 436
161
161
Accumulated amortization
At 1 April 2010
Amortization Disposals Currency translation differences At 31 March 2011
Net book value at 1 April 2010 Net book value at 31 March 2011
Development costs capitalized include CHF 18.3 million (prior year CHF 13.6 million) for products in the development phase, CHF 1.0 million (prior year CHF 10.8 million) for products in the industrialization phase, CHF 0.0 million (prior year CHF 8.4 million) for products in the pre-launch phase and CHF 22.1 million (prior year CHF 0.0 million) for products in the phase of commercialisation.
88
236
239
–14 684
3
–1 452
–17 869
–34 005
308 994
32 844
10 489
352 327
312 158
41 437
7 949
361 544
On April 1, 2009 Ypsomed acquired intangible assets in the amount of CHF 1.9 million, payable in monthly installments. At closing date the unpaid installments amounts to CHF 0.8 million (prior year CHF 1.3 million). The book value of this intangible asset is CHF 0.6 million (prior year CHF 1.2 million).
Ypsomed – Financial Report
Impairment test for goodwill Goodwill from acquisitions is allocated to cash-generating units and subjected to annual impairment tests. The following table shows the allocation of goodwill to cash-generating units:
Ypsomed AG / TecPharma Licensing AG
31 March 2011
31 March 2010
295 220
295 220
Ypsotec AG
3 023
3 023
DiaExpert GmbH
9 922
10 751
Ypsomed Limited, GB-Selby Total Goodwill
3 993
312 158
308 994
31 March 2011
31 March 2010
11.0 %
11.0 %
1.4 %
1.4 %
11.0 %
11.0 %
1.4 %
1.4 %
10.1 %
10.1 %
1.4 %
1.4 %
The impairment test for goodwill is based on the following assumptions: Ypsomed AG / TecPharma Licensing AG
Weighted average cost of capital (WACC, pre-tax) Perpetual growth rate
Weighted average cost of capital (WACC, pre-tax) Perpetual growth rate DiaExpert GmbH
Weighted average cost of capital (WACC, pre-tax) Perpetual growth rate Ypsomed Limited, GB-Selby
Weighted average cost of capital (WACC, pre-tax) Perpetual growth rate Impairment tests are carried out using value-in-use calculations, based on strategic financial planning embracing the next five years. The future expected free cash flows are discounted with the weighted average cost of capital (WACC). The WACC thereby reflects the specific risks and
,1 2.
11.0 % 1.4 % financial structure of the cash-generating unit. Free cash flows outside of the five-year planning period are extrapolated with a perpetual growth rate. The goodwill impairment test did not result in an impairment.
Other payables, accrued expenses and deferred income
Other payables Accrued expenses and deferred income Total
31 March 2011
31 March 2010
3 698
3 129
20 621
15 240
24 318
18 369
Other payables, accrued expenses and deferred income include financial liabilities in the amount of CHF 10.7 million (prior year CHF 9.1 million).
89
Financial Report
Ypsotec AG
Ypsomed – Financial Report
13. Financial liabilities to major shareholder 31 March 2011
31 March 2010
Current
10 000
10 000
Non-Current
24 500
34 500
Loan from Techpharma Management AG, Burgdorf
Until March 31, 2010 interest on the loan was set at 0.5 %. From this date on interest is based on CHF 12-month LIBOR rate as published by the Swiss National Bank plus a margin of 0.5 % with semi-annual interest rate fixing. At any time Ypsomed Holding AG is eligible to amortize the loan in full or partially. Techpharma Management AG for its part may call for an amortization of CHF 10 million per annum starting April 1, 2011 by
14. Provisions At 1 April 2009
Employee pensions liabilities
Restructuring
Other
Total
2 879
6 332
0
1 000
10 211
97
5 895
–1 247
Utilization At 31 March 2010 of which current
–40
–5 284
1 690
6 943
Additions Release
6 093
–150
–1 397
–315
–5 639
635
9 268 1 069
1 690
6 943
687
4 827
0
635
5 514
–40
–4 718
–4 758
1 756
7 052
–581
Utilization At 31 March 2011
1 418
Warranties There is a risk that medical products developed and produced by Ypsomed could have material defects or product faults, resulting in legal liability and product liability in particular, as well as other liabilities, such as the withdrawal or recall of products. Provisions are recorded based on management`s best estimate and relate to guarantees and also to replacement costs for withdrawn products. The company’s management bases these provisions on the estimated potential guarantee claim for each product.
Ypsomed holds insurance policies with third parties to cover material damages, interruption of operation, product liability and other risks, with worldwide cover. Ypsomed believes that its insurance cover and provisions with regard to business activities and the associated operative risks involved with this are appropriate and sensible. However, events can arise that are not covered, or only partly covered by insurance policies or provisions made by Ypsomed. The closing of an insurance contract, covering product liability, depends on the development of the insurance market, in particular on the general development of the pharmaceutical
90
0
100
1 069
At 1 April 2010
of which current
In the 2010/11 business year, interest amounting to CHF 0.4 million (prior year CHF 0.4 million) was paid on the loan.
Warranties
Additions Release
applying a term of notice of 3 months. Techpharma Management AG is controlled by Dr. h. c. Willy Michel.
9 268 –581
0
635
9 443 1 418
industry, in which high claims for compensation are typical. Although no such losses are presently expected at Ypsomed, there is no guarantee that the company might not be subjected to damage claims in the future that are in excess of the cover available. Expected cash outflows Provisions for warranties cover any guarantee claims that may occur for products on the market. The provisions extend for the average life of the products, which is between 1 and 4 years, depending on the product, and are also determined by the best possible assessment of the risk of a claim for each product category. Provisions for pension obligations are based on a valuation in accordance with IAS 19, from which no direct cash outflow arises. Other provisions Other provisions are based on estimates and have the purpose of complying with requirements for disposal of waste related to the upcoming conversions of buildings.
Ypsomed – Financial Report
15. Employee benefits pension scheme and one Swiss pension plan of the collective foundation SwissLife) are evaluated on an annual basis by independent actuarial experts.
Pension schemes
Fair value of plan assets Defined benefit obligation Deficit
Unrecognized actuarial (gain )/ loss Total net book value
of which recognized in the balance sheet as asset of which recognized in the balance sheet as liability Development of defined benefit obligation
Defined benefit obligation as at 1 April
31 March 2011
31 March 2010
115 079
115 664
–131 037
–137 949
–15 958
–22 285
9 327
15 861
–6 631
–6 424
421
519
7 052
6 943
2010/11
2009/10
–137 949
–125 589
Current service cost
–6 177
–5 696
Interest expense
–4 447
–4 419
Curtailments and settlements
285
456
Benefits paid / deposits
13 216
4 569
Employee contributions
–4 191
–4 670
Actuarial gains / (losses)
8 166
–2 600
–131 037
–137 949
Defined benefit obligation as at 31 March Development of plan assets
2010/11
2009/10
115 664
98 189
Expected return on plan assets
5 205
4 419
Employer contributions
5 121
5 697
Employee contributions
4 191
4 670
Benefits paid / deposits
–13 216
–4 569
–1 886
7 258
115 079
115 664
Fair value of plan assets as at 1 April
Actuarial gains / (losses) Fair value of plan assets as at 31 March The actual return on plan assets was CHF 3.3 million (prior year CHF 11.7 million).
91
Financial Report
Most employees are insured under private and / or state pension schemes. The defined benefit obligations and the assets of the most important pension plans associated with them (one Swiss pension plan of an individual
Ypsomed – Financial Report
Pension costs defined benefit plans
31 March 2011
31 March 2010
Current service cost
–6 117
–5 696
Interest expense
–4 447
–4 419
5 205
4 419
Expected return on plan assets Curtailments and settlements Net actuarial gain / (loss) recognized in year Total pension costs
285
456
–254
–995
–5 328
–6 235
31 March 2011
31 March 2010
2.1 %
6.8 %
The expected employer contributions for the business year 2011/12 will amount to CHF 4.7 million.
Asset allocation
Cash and cash equivalents Mortgages
2.3 %
3.6 %
Bonds
44.8 %
42.8 %
Real estate
25.4 %
23.9 %
Securities
24.7 %
22.2 %
0.7 %
0.7 %
100.0 %
100.0 %
Other Total
The Ypsomed Group does not use any assets owned by the defined benefit plans. Further the defined benefit plans do not held any shares of Ypsomed Holding AG.
Year-on-year comparison
Fair value of plan assets Defined benefit obligation Liability
Experience adjustments on plan assets Experience adjustments on defined benefit obligation
The significant actuarial assumptions used are as follows
31 March 2011
31 March 2010
31 March 2009
31 March 2008
31 March 2007
115 079
115 664
98 189
92 505
87 626
–131 037
–137 949
–125 589
–109 726
–107 745
–15 958
–22 285
–27 400
–17 221
–20 119
–1 886
7 258
–9 282
–7 266
–1 642
3 203
505
1 584
2 387
–5 199
31 March 2011
31 March 2010
Discount rate
3.0 %
3.0 %
Expected rate of return on plan assets
4.5 %
4.5 %
Expected rate of salary increase
2.5 %
2.5 %
Rate of pension increase
0.5 %
0.5 %
Average retirement age men
65
65
Average retirement age women
64
64
BVG 2010
EVK 2000
Actuarial bases
The expected 4.5 % rate of return on plan assets is based on strategic asset allocation to defined investment categories and a tailored analysis by independent investment strategists .
92
Ypsomed – Financial Report
16. Share capital
Share capital (in thousand CHF)
At 1 April
Repayment of nominal value CHF 0.25 per share (prior year CHF 0.60)
2010/11
2009/10
182 156
109 631
–3 162
–7 590
Capital increase
21 083
Increase par value
59 032
At 31 March Shares issued as at 31 March Treasury shares as at 31 March Shares outstanding as at 1 April
Purchases
178 994
182 156
12 649 739
12 649 739
27 877
27 876
12 621 863
11 219 553
–1
–3 786
Sales
570 1 405 526
12 621 862
Shares outstanding as at 31 March
Ypsomed Holding AG was founded on 29 December 2003 with original share capital of CHF 250 000, consisting of 2 500 shares with a nominal value of CHF 100 each. There exist a total of 12 649 739 shares, each with a par value of CHF 14.15. The General Meeting of Shareholders resolved on June 24, 2009 an increase of the par value of CHF 5.25 to CHF 15.00. As a result the share capital has increased in the amount of CHF 59.0 million by debiting the group reserves. Within the scope of
12 621 863
the capital increase that took place in June 2009 the share capital was increased in the amount of CHF 21.1 million. As of September 30, 2010, the par value was reduced by CHF 0.25 (prior year: CHF 0.60) to CHF 14.15 and repaid to the shareholders. The total reduction of the par value was CHF 3.2 million. On 31 March 2011, Ypsomed Holding AG and its Group companies held a total of 27 877 own shares (prior year: 27 876).
Conditional share capital (in thousand CHF)
2010/11
2009/10
At 1 April
2 304
1 560
Increase of par value CHF 0.00 per share (prior year CHF 5.25) Repayment of nominal value CHF 0.25 per share (prior year CHF 0.60) At 31 March
840 –40
–96
2 264
2 304
The company has a conditional share capital totalling CHF 2.3 million (prior year CHF 2.3 million). The company may issue a maximum of 160 000 fully paid up registered shares of nominal value CHF 14.15 (prior year CHF 14.40) each to selected employees and members of the Board of Directors.
93
Financial Report
Capital increase
Ypsomed – Financial Report
17. Operating expense 2010/11
Cost of goods and services sold Research and development expenditures total Amortization of development costs capitalized Development costs capitalized
2009/10
175 737
74.7 %
187 568
76.6 %
26 102
11.1 %
31 717
13.0 % –4.1 %
1 452
0.6 %
–10 046
–4.3 %
–9 969
Research and development reimbursed
–8 261
–3.5 %
–14 424
–5.9 %
Marketing and sales expense
36 928
15.7 %
31 890
13.0 %
Administration expense Total
Cost of materials Personnel expense
13 439
5.7 %
18 020
7.4 %
235 351
100.0 %
244 802
100.0 %
81 405
34.6 %
88 434
36.1 %
107 847
45.8 %
115 477
47.2 %
Depreciation / amortization
25 081
10.7 %
27 478
11.2 %
Other operating expense
39 324
16.7 %
37 805
15.4 %
–10 046
–4.3 %
–9 969
–4.1 %
–8 261
–3.5 %
–14 424
–5.9 %
235 351
100.0 %
244 802
100.0 %
2010/11
2009/10
Wages and salaries
91 260
96 853
Social security expenses
14 906
16 414
1 681
2 210
107 847
115 477
Development costs capitalized Research and development reimbursed Total
18. Personnel expense
Other personnel expenses Total Personnel at 31 March (full-time equivalents)
31 March 2011
31 March 2010
Switzerland
849
966
Germany
145
148
Netherlands France Scandinavia Czech Republic
2 11
5
6
19
12
United Kingdom
6
India
6
4
1 056
1 149
1 097
1 199
Total
Headcount
94
5 21
Ypsomed – Financial Report
19. Financial income Interest income
2010/11
2009/10
32
58
Gains from marketable securities Foreign exchange gains Other financial income Total
122 1 218
642
416
189
1 666
1 010
2010/11
2009/10
944
640
20. Financial expense Interest expense Losses from marketable securities
12
Foreign exchange losses
1 478
1 917
Other financial expense
179
92
2 601
2 662
2010/11
2009/10
3 634
3 678
84
–17
Total
Income taxes for current period Income taxes for prior period
–1 248
–1 290
Total
Deferred income taxes
2 469
2 372
Consolidated statement of other comprehensive income
2010/11
2009/10
115
394
–664
–354
–549
40
Income tax related to items charged / credited directly to equity: Unrealised gain on available-for-sale financial assets Unrealised foreign exchange loss on net investment in foreign subsidiaries Total
The tax charge on the Group’s profit before taxes differs from the theoretical amount that would arise using the expected tax rate for the Ypsomed Group as follows: 2010/11
2009/10
Profit before income taxes
7 675
11 797
Tax calculated at an expected tax rate of 29.5 % (prior year 18.5 %)
2 264
2 182
Effect of other tax rates
139
63
Effect of change in tax rates
14
–115
Effect of prior periods
84
–17
Effect of realisation / resolution of tax loss carryforwards
–34
139
Effect of tax assets related to previously unrecognised tax loss carryforwards
–51
0
Effect of loss of the current year, for which no tax assets were capitalized Total income taxes
53
120
2 469
2 372
The Group benefits from reduced tax rates that are subject to change from year to year. Changes in reduced tax rate impact the Group’s effective tax rate. The higher tax rate compared to prior year results from a negative result in a company with reduced tax rate in the segment Diabetes Direct Business.
95
Financial Report
21. Taxes
Ypsomed – Financial Report
Deferred taxes on temporary differences exist on the following balance sheet items
Trade receivables Inventories Financial assets Non-current assets
31 March 2010
249
249
22
–107
523
394
79
98
1 686
1 601
Intangible assets
849
861
Provisions
–16
–19
Fixed assets
Equity Total deferred taxes on temporary differences, net
of which recognized in the balance sheet as deferred income tax liabilities of which recognized in the balance sheet as deferred income tax assets Tax losses carried forward Total deferred income tax assets recognized in the balance sheet
Amounts for deferred income taxes stated in the consolidated balance sheet are disclosed as non-current assets and non-current liabilities. Taxloss carryforwards are only recognized if the associated tax benefits can be realized. Deferred tax assets have been recognized in the amount of CHF 3.9 million for such entities that have suffered a loss in the current and the preceding period. The losses have primarily occurred due to expenses
–75
–80
3 317
2 998
3 268
2 959
50
39
3 941
2 532
3 991
2 572
for marketing and product launches in the affiliated sales organizations. The recognition of the deferred tax assets is supported by future taxable profits, which will be ensured by both a continuous growing market development and the existing customers relations as well as contracts with vendors. Unused tax loss carryforwards, for which no deferred tax has been recognized, will expire as follows:
31 March 2011
31 March 2010
Within 12 months
0
129
Within 1-2 years
0
131
Within 2-3 years
0
73
Within 3-4 years
0
0
Later than 4 years Unused tax loss carryforwards at 31 March Temporary differences for which no deferred taxes are recognized in the balance sheet
Investments in Group companies
96
31 March 2011
693
909
693
1 243
31 March 2011
31 March 2010
110 914
118 790
Ypsomed – Financial Report
22. Financial instruments
31 March 2011
31 March 2010
5 008
8 048
32 246
32 246
6 955
7 071
105
106
44 315
47 470
22 129
20 058
22 129
20 058
Trade payables
13 080
13 292
Other current payables and accrued expenses
10 692
9 093
Financial liabilities
40 000
30 000
7
656
Cash and cash equivalents (without petty cash) Trade receivables Other current receivables, accrued income Other non-current assets Loans and receivables
Financial assets Available for sale financial assets
Other non-current financial liabilities Current financial liabilities to major shareholder
10 000
10 000
Non-current financial liabilities to major shareholder
24 500
34 500
98 280
97 540
2010/11
2009/10
–120
102
–1 123
–1 080
Financial liabilities at amortized cost
Net income from financial instruments
Financial assets at fair value through profit and loss Loans and receivables Available for sale financial assets Financial liabilities at amortized cost Total included in the consolidated net profit
Change in fair value of Financial assets available for sale Total recorded in the consolidated statement of comprehensive income
22 1 031
24
–189
–954
2 070
7 074
1 882
6 120
2010/11
2009/10
Net income includes currency income, exchange rate income and valuation allowance.
Interest income / expense of financial instruments
Loans and receivables Financial liabilities at amortized cost Total
31
58
–944
–640
–912
–582
Fair value hierarchy
Following hierachy is used for determining and disclosing the fair value: Level 1: Quoted prices in active markets. Level 2: Fair value based on observable market data, either directly or indirectly. Level 3: Fair value, not based on observable market data. Ypsomed has no financial assets in hierarchy level 1, 2 and 3.
97
Financial Report
The financial assets of the Group include cash and cash equivalents, securities, trade receivables, other receivables, financial investments and other assets. Financial liabilities comprise trade payables, other payables and financial liabilities to major shareholder.
Ypsomed – Financial Report
Foreign exchange contracts (forward transactions and option contracts) are concluded from time to time with recognized financial institutions to hedge material exchange rate exposure. The outstanding contracts at the end of the business year are stated at fair values. Any gains or losses are reported in the income statement. No hedge accounting is applied.
Financial risk management In its business activities, Ypsomed is exposed to various financial risks. The most significant risks arise from changes in foreign exchange rates, interest rates and share prices, as well as the credit ratings of the customers and business partners of Ypsomed. Risk management is performed by the central finance department at the company’s headquarters in Burgdorf and follows the principles and guidelines laid down by management. The use of financial instruments and securities is made with the intention optimizing profits within the framework of the Group’s risk policy.
Transaction risks apply to transactions executed in a currency other than the functional currency, given that the amounts paid or received in the local currency are subject to exchange rate fluctuations. Ypsomed issues invoices to its Group companies in the respective local currency; exchange rate risks therefore apply primarily to the headquarters in Switzerland. The non-Swiss Group companies invoice in their respective local currencies, thereby generating no exchange rate risks.
a) Market risks )RUHLJQ H[FKDQJH ULVNV As an internationally active company, Ypsomed is exposed to the effects of fluctuations in exchange rates. Currency risks apply to all monetary financial assets and financial liabilities denominated in a currency other than the functional currency.
The monetary financial assets and liabilities consist of the following net assets and liabilities per currency pair, as well as the sensivitiy of individual currency pairs to changes in exchange rates:
Net exposure 31 March 2010
EUR / CHF
1 567
2 604
USD / CHF
462
JPY / CHF
316
GBP / CHF
404
The sensitivity analysis is based on assumptions for possible changes in the exchange rate as per the balance sheet date. The effect on the income statement (profit before taxes) is due to the change in fair values resulting from the new foreign exchange rates. With the exception of foreign exchange translation differences on net investments in subsidiaries there are no effects on the other comprehensive income. ,QWHUHVW UDWH ULVNV Interest rate fluctuations lead to changes in interest income and expense in relation to interest-bearing assets and liabilities, thereby influencing the financial result. In addition, they can also have an impact on the fair value of certain financial assets and liabilities and on derivative financial instruments. Interest rate management is centralized with a view to limiting the effects of changes in interest rates on the financial result. Interest rate risks are managed by means of a balanced mixture of fixed and variable interest financial receivables and liabilities.
98
Change in %
31 March 2011
Effect on income statement 2010/11
2009/10
+/– 5%
78
130
1 137
+/– 5%
23
57
188
+/– 5%
16
9
3 668
+/– 5%
20
183
Payments arising from operational leasing and rental agreements do not carry any interest rate risks. The financial assets and liabilities subject to interest rate risks are short term, variable rate bank accounts and financial liabilities to the shareholder. If the market interest rate had been 100 basis points higher (lower) on the balance sheet date, the financial result would have been CHF 0.4 million (higher) lower (2009/10: CHF 0.1 million). 2WKHU SULFH ULVNV Other price risks are mainly limited to share price risk of financial assets held for sale. With all other parameters remaining the same, a 10 % increase or drop in share prices would have resulted in an improvement or deterioration of CHF 2.0 million (prior year: CHF 0.7 million) in the result of other comprehensive income.
Ypsomed – Financial Report
b) Credit risks Credit risks arise when a customer or a counterparty fails to fulfil its contractual obligations and causes the Group to suffer financial damages as a result. Credit risk associated with financial assets is controlled by the Group’s policy of dealing solely with first-class counterparties, by ongoing credit reviews and by limiting aggregated individual risks.
losses on receivables are made by the Group companies and reviewed by the Group on the basis of standardized Group guidelines concerning the valuation of outstanding receivables. The maximum credit default risk – without taking into account any collateral – corresponds to the book values of the following financial assets:
Active risk management in connection with trade receivables takes the form of the ongoing monitoring and review of credit risks as part of the reporting process to management. The necessary value allowances for foreseeable
Cash and cash equivalents (without petty cash)
2009/10
5 008
8 048
Trade receivables
32 246
32 246
Other receivables
6 955
7 071
105
106
44 315
47 470
Other non-current assets Total A total of 33.5 % of Group net sales (prior year 37.6 %) are attributable to the Group’s 3 largest customers. The 3 highest amounts for trade receivables make up approx. 21.6 %, 6.8 % and 5.7 % of all trade receivables as per the balance sheet date (prior year 19 %, 5.7 % and 5.7 %). The largest proportion of sales was generated with Sanofi-Aventis, and the largest trade receivable was also due from Sanofi-Aventis.
Ypsomed is financed exclusively by bank loans and the loan granted by its major sharehodler Dr. h. c. Willy Michel and his company Techpharma Management AG. At any time Ypsomed Holding AG is eligible to amortize the loan in full or partially. Techpharma Management AG for its part may call for an amortization of CHF 10 million per annum starting April 1, 2011 by applying a term of notice 3 months.
c) Liquidity risks Liquidity management is centralized and involves providing sufficient funds for the timely fulfilment of financial liabilities while also maintaining flexibility with regard to the exploitation of market opportunities and the best possible conditions for investment. Investment decisions concerning surplus funds are made centrally and primarily concern fixed deposits and securities held over the short term. Group Controlling monitors cash flow by means of liquidity planning, taking into account the maturities of financial instruments and cash flow from business activities.
Ypsomed has approved current account credit limits of CHF 67.5 million (prior year CHF 45 million), thereof CHF 40 million utilized (prior year CHF 30 million).
Contractual maturities of financial liabilities
31 March 2011
2010/11
62 648
2011/12
74 680
2012/13
10 250
2013/14 Total The above table shows the maturities of contractually agreed, nondiscounted payment amounts (including interest). For trade payables in foreign currencies, the fair value as per the balance sheet date is recorded as the due amount the following year. These values can deviate from the actual payments on maturity.
31 March 2010
34 892
14 650
99 580
97 540
&DSLWDO ULVN PDQDJHPHQW In its capital management, Ypsomed ensures that its healthy and solid balance sheet structure is maintained. Ypsomed’s aim is to secure the Group’s financial scope for future investments and acquisitions. Reported equity capital as at the end of 2010/11 was CHF 538.1 million (2009/10: CHF 537.7 million). The equity ratio stood 79.8 % as at the end of 2010/11 (2009/10: 81.2 %).
99
Financial Report
2010/11
Ypsomed – Financial Report
23. Segment information The Management Approach is used to determine the operating segments. Accordingly, external segment reporting is based on the internal organisational and management structures of the Group and the internal financial reporting to the Chief Operating Decision Maker. The Chief Operating Decision Maker of Ypsomed is the Board of Directors of Ypsomed Holding AG. It defines business activities and monitors internal reporting to assess performance and resource allocation. For the purposes of company management, the Ypsomed Group is organised into business sectors according
to products and services. The segment “Delivery Devices” comprises the product groups pen systems, pen neeedles and other injection mouldings produced by Ypsomed. The business segment “Diabetes Direct Business” covers the direct trade in a range of diabetes articles. “Others” contains the business segment “precison turned parts” and currently not used real estate for operational purposes. Intersegmental sales are executed at arm’s length.
Business year 2010/11
Delivery Devices
Diabetes Direct Business
Others
155 812
69 395
17 254 2 739
–2 739
0
Total sales of goods and services
155 812
69 395
19 993
–2 739
242 461
Operating profit
22 072
–12 908
–554
Sales of goods and services to third party customers Intersegmental sales
Eliminations
Group
242 461
8 610
Financial income
1 666
Financial expense
–2 601
7 675
Profit before income taxes
Delivery Devices
Diabetes Direct Business
Others
Group
560 229
71 961
42 442
674 632
Investments in fixed and intangible assets
23 029
582
2 862
26 473
Depreciation / amortization
19 618
2 384
3 079
25 081
Segment assets
100
Ypsomed – Financial Report
Business year 2009/10
Sales of goods and services to third party customers
Delivery Devices
Diabetes Direct Business
Others
168 338
70 900
14 776
Intersegmental sales Total sales of goods and services Operating profit
Eliminations
Group
254 014
6 233
–6 233
0
–6 233
254 014
168 338
70 900
21 009
19 775
–9 277
2 901
13 449
Financial income
1 010
Financial expense
–2 662
Profit before income taxes
11 797
Delivery Devices
Diabetes Direct Business
Others
Group
555 412
63 954
42 644
662 010
Investments in fixed and intangible assets
43 113
2 676
1 843
47 632
Depreciation / amortization
22 035
1 989
3 454
27 478
Segment assets
Geographical information Sales
Switzerland Germany Other Total
Fixed and intangible assets
2010/11
2009/10
31 March 2011
31 March 2010
21 683
18 346
520 594
520 425
155 277
171 731
14 846
16 993
65 501
63 937
5 157
1 181
242 461
254 014
540 596
538 599
Sales are recognized in the geographical location of the invoice adress. The sales of injection systems to biotech and pharma customers is made mainly to their European group companies, although the products are distributed world wide. The tangible and intangible assets are indicated according to the locations of the group companies.
Major customer – Sales share of 10 % or more
Sanofi-Aventis / sales in the segment Delivery Devices
2010/11
2009/10
57 395
70 739
24. Contingent liabilities The Group has contingent liabilities of TCHF 803 (prior year TCHF 860) toward third parties arising in the ordinary course of business. Ypsomed does not anticipate that any material liabilities will arise from the contingent liabilities.
101
Financial Report
The operating profit “Others” contians a profit in the amount of CHF 3.0 million for disposals of real estate.
Ypsomed – Financial Report
25. Contractual obligations 31 March 2011
31 March 2010
300
300
Contractual purchase commitments for products
5 907
6 785
Contractual obligations from rental contract with Techpharma Management AG
4 681
5 666
Contractual obligations from consultancy and research and development projects
Contractual obligations from service contract with GBUK Healthcare
659
11 546
12 751
Due within 1 year
7 522
8 071
Due within 1 and up to 5 years
4 025
4 681
Total contractual obligations
The rental contract (see note 26) between Ypsomed AG and Techpharma Management AG, a company controlled by Dr. h. c Willy Michel, was signed at arm’s length. Rental interest is based on an independent rental value estimate and amounts to TCHF 985.4 annually plus VAT; it is linked to the consumer price index. The rental contract arranges for small and normal maintenance work on the building to be paid by the tenant up to a maximum amount of 2 % of the annual rent per calendar year.
As at 31 March 2011 contractual obligations for the purchase of fixed assets amount to CHF 2 .4 million (prior year CHF 7.6 million), and for the purchase of intangible assets these amount to CHF 0.08 (prior year CHF 0.0 million).
26. Transactions with related parties Related Group parties are the pension fund, Techpharma Management AG, Adval Tech Group, Finox AG and Faes Bau AG. Services are remunerated in line with industry standards Receivables from related parties amounted to TCHF 23 (prior year TCHF 47 ) on the balance sheet date. Liabilities amounted to
TCHF 53 (prior year TCHF 110). In the year under review the following transactions were made with members of the Board of Directors, management and parties related to them:
2010/11
2009/10
627
612
Management (compensation)
2 860
3 398
Pension fund (employer contributions)
4 735
5 294
Techpharma Management AG (interest according to note 13)
400
358
Techpharma Management AG (compensation for rented business premises)
985
985
50
85
Board of Directors (compensation)
Techpharma Management AG (amounts in accordance with service contract) Techpharma Management AG (amounts in accordance with service contract)
0
–28
Adval Tech
598
1 020
Finox AG
–24
–24
Finox AG
69
95
Faes Bau AG Total
102
364
375
10 665
12 169
Ypsomed – Financial Report
Since 1 January 2006, Ypsomed AG has rented business premises from Techpharma Management AG, which belongs to the majority shareholder Dr. h. c. Willy Michel. The rental contract was signed at arm’s length (see note 25) and can be terminated at the earliest and with 24 months notice as from 31 December 2015. The tenant has unlimited first right of refusal for the whole rental period, to a maximum of 25 years from the beginning of the rental contract. Between Techpharma Management AG and Ypsomed AG there is a service contract which can be terminated by either side at any time. Within the context of this contract the companies provide reciprocal management and IT support as well as services in the area of hotel business and gastronomy. A cooperation contract exists between Ypsomed Holding AG and two of its subsidiaries, on the one hand, and the Techpharma Management AG and its subsidiary Finox AG, which belong to Dr. h. c. Willy Michel, on the other hand. The business objective of Finox AG is the development, manufacturing and sales of pharmaceuticals.
Personnel compensation to board of directors and management
Short-term benefits Post-employment benefits
The cooperation agreement regulates the cooperation between Ypsomed AG and Finox AG in the area of research and development in the field of devices for administering drugs and their exchange and compensation. Ypsomed AG provides know-how and in return receives a right of first refusal to purchase the shares of Finox AG. The cooperation contract was discussed and approved by the Board of Directors and in its opinion is consistent with customary cooperation on the market. Dr. h. c. Willy Michel has furthermore a minority shareholding in Faes Bau AG, which is headquartered in Burgdorf, and is a member of its Board of Directors. Ypsomed occasionally awards Faes Bau AG building contracts that are in line with normal market conditions. In June 2007, Ypsomed AG and Adval Tech Holding AG signed an agreement on strategic cooperation in tool construction with a fixed contract term of 5 years. The services purchased are in line with normal market conditions.
2010/11
2009/10
3 142
3 557
345
453
3 487
4 010
Other long-term benefits Termination benefits Total
See the appendix to the annual financial statements of Ypsomed Holding AG for details of the transparency law in accordance with the Swiss Code of Obligations.
27. Earnings per share Earnings per share are calculated by dividing net profit through the weighted monthly number of shares outstanding during the period. The average number of treasury shares is deducted from the number of shares issued.
2010/11
Net profit in thousand CHF Number of outstanding shares weighted on a monthly basis Earnings per share in CHF (basic and diluted)
2009/10
5 206
9 425
12 621 863
11 975 054
0.41
0.79
28. Proposal for the appropriation of retained earnings The Board of Directors proposes to the General Meeting of Share holders on 28 June 2011 instead of a reduction of the nominal value of the Ypsomed share (prior year CHF 0.25) a withholding tax free distribution of capital reserves in the amount of CHF 0.20 per share.
The total distribution based on the actual share capital as per 31 March 2011 will be approximately CHF 2.5 million (prior year reduction of the nominal value CHF 3.2 million). This amount will be credited to shareholders.
103
Financial Report
Share-based payments
Ypsomed â&#x20AC;&#x201C; Financial Report
Report of the group auditors
104
Financial Report
Ypsomed â&#x20AC;&#x201C; Financial Report
105
Ypsomed – Financial Report
Balance sheet of Ypsomed Holding AG – statutory financial statements In thousand CHF Assets
Cash and cash equivalents Marketable securities Accrued income and prepaid expenses
31 March 2011
31 March 2010
125
147
1 589
1 896
25
24
Other receivables
4
155
Total current assets
1 743
2 221
Loans to Group companies
171 088
176 114
Investments
327 951
322 051
1 103
1 435
Total non-current assets
Expenditures related to capital increase
500 142
499 599
Total assets
501 885
501 820
Liabilities and equity
31 March 2011
31 March 2010
Trade payables
45
21
Accrued expenses and deferred income
890
943
Current financial liabilities to major shareholder
10 000
10 000
Bank loans
35 000
30 000
264
318
46 200
41 281
24 500
34 500
24 500
34 500
Current income taxes payable Total current liabilities
Non-current financial liabilities to major shareholder Total non-current liabilities
Share capital
178 994
Share premium Capital contribution reserves1 Disagio Legal reserves Reserves for own shares Retained earnings Net profit
1
182 156 193 653
193 802 –150 50
50
1 952
1 952
48 229
36 513
8 308
11 716
Total equity
431 185
426 039
Total liabilities and equity
501 885
501 820
The classification as capital contribution reserves is subject to the approval of the federal tax authority.
106
Ypsomed – Financial Report
Income statement of Ypsomed Holding AG – statutory financial statements In thousand CHF Income
Financial income
1 April 2010 – 31 March 2011
1 April 2009 – 31 March 2010
11 911
15 064
11 911
15 064
Depreciation and amortization
366
359
Financial expenses
981
669
1 877
1 943
379
378
Total expenses
3 603
3 349
Net profit
8308
11 716
Total income
Expenses
Administration Income tax expenses
In thousand CHF
Retained earnings
31 March 2011
31 March 2010
48 229
36 722
8 308
11 716
56 537
48 229
Decrease / Increase reserve for own shares Net profit for business year Retained earnings at disposal of the General Meeting
Allotment from capital contribution reserves Distribution of dividend from capital contribution reserves1 Carried forward to the next year
1
The Board of Directors proposes to the General Meeting of Shareholders on 28 June 2011 instead of a reduction of the nominal value of the Ypsomed share (prior year CHF 0.25) a withholding tax free distribution of capital contribution reserves in the amount of CHF 0.20 per share.
–209
2 529
0
–2 529
0
56 537
48 229
The total distribution based on the actual share capital as per 31 March 2011 will be approximately CHF 2.5 million (prior year reduction of the nominal value CHF 3.2 million). This amount will be credited to shareholders.
107
Financial Report
Proposal for the appropriation of retained earnings The Board of Directors proposes to the General Meeting of Shareholder that the retained earnings be appropriated as follows:
Ypsomed – Financial Report
Notes to the financial statements 2010/11 of Ypsomed Holding AG Income Financial income mainly consists of dividends, interest income and gains on securities.
Share capital The share capital of CHF 178 993 806 (prior year CHF 182 156 241) consists of 12 649 739 (prior year 12 649 739) registered shares with a nominal value of CHF 14.15 (prior year CHF 14.40 ).
Conditional share capital The company has a conditional share capital totalling CHF 2.2 million (prior year CHF 2.3 million). The company may issue a maximum of 160 000 (prior year 160 000) fully paid up registered shares with a nominal value of CHF 14.15 (prior year CHF 14.40 ) each to selected employees and members of the Board of the Directors.
Important shareholders Dr. h. c. Willy Michel
31 March 2011
31 March 2010
Number of shares
Capital and vote share
Number of shares
Capital and vote share
8 946 834
70.7 %
8 946 834
70.7 %
507 125
4.0 %
330 362
2.6 %
Techpharma Management AG, Burgdorf
Investments
31 March 2011 Interest held
Ypsomed AG, CH-Burgdorf
31 March 2010 Share capital
Interest held
Share capital
100 %
CHF
10 000 000
100 %
CHF
10 000 000
Ypsotec AG, CH-Grenchen
100 %
CHF
1 000 000
100 %
CHF
1 000 000
Techpharma Licensing AG, CH-Burgdorf
100 %
CHF
100 000
100 %
CHF
100 000
Ypsomed Distribution AG, CH-Burgdorf
100 %
CHF
6 000 000
100 %
CHF
100 000
Bionime Corporation, Taiwan
8.7 %
TWD
399 516 310
9.6 %
TWD
362 356 310
Insulet Corporation, Bedford, MA, U.S.A.
1.3 %
USD
45 441
1.6 %
USD
37 755
Own shares
31 March 2011
31 March 2010
Number of shares
Ø price
Number of shares
Ø price
1
52
3 786
66
–570
77
Purchase of own shares Disposal of own shares Own shares held
27 877
27 876
Claim subject to subordination clause against subsidiaries
31 March 2011
31 March 2010
Loan to Ypsomed Distribution AG, CH-Burgdorf
17 167 872
11 201 167
31 March 2011
31 March 2010
22 500 00
15 000 000
In addition there is letter of comfort with unlimited amount in favour of a group company.
Securities, reserve for guarantees and collateral order in favour of third parties
Credit Suisse, CH-Zürich Guarantee in the context of credit business for Ypsomed AG
108
Ypsomed – Financial Report
Risk assessment Ypsomed Holding AG performs an extensive risk assessment at least once a year. The standardized process is based on an inventory of risks, which covers the relevant categories of risks as strategic risks, management risks, general risks of the business areas, legal risks, system risks, financial risks including market-, credit- and liquidity risks and occurrence risks covering
political, regulatory, fiscal and external risks. The significant risks are valuated regarding the probability of occurrence and impact, and both Management and the Board of Directors determine measures and monitor the implementation according to established criteria.
Board of Directors remuneration (Gross, in thousand CHF, exclusive VAT) Dr. h. c. Willy Michel (Chairman)
10/11
Fixed amount Variable amount Attendance fee / Others Total remuneration and attendance fee
Techpharma Management AG: for consultancy services Dr. h. c. Willy Michel Total remuneration Board of Directors
Gerhart Isler (Member)
Anton Kräuliger (Vice-Chairman)
Prof.Dr. Dr. h. c. mult. Norbert Thom (Member)
09/10
10/11
09/10
10/11
09/10
10/11
09/10
150.0 150.0
90.0
90.0
90.0
90.0
90.0
90.0
7.0
4.0
7.0
4.0
7.0
4.0
9.0
9.0
7.5
7.5
106.0 103.0
104.5
101.5
11.7
6.7
9.0
9.0
9.0
7.5
170.7
165.7
106.0
101.5
140.0
140.0
310.7 305.7
Total 10/11
09/10
420.0 420.0 32.7
18.7
34.5
33
487.2 471.7
140.0 140.0
106.0
Highest remuneration to Dr. h. c. Willy Michel
101.5
106.0 103.0
104.5
101.5
627.2
611.7
310.7 305.7
Further transactions to affiliated persons of Dr. h. c. Willy Michel Techpharma Management AG: for loan (interest)
400.5 357.8
Techpharma Management AG: for rented business premises (rent)
985.4 985.4
109
Financial Report
Remuneration Board of Directors
Ypsomed – Financial Report
Management remuneration (Gross, in thousand CHF) Highest remuneration to:
Richard Fritschi, CEO Additional members of management including those who left the company in the year under review
Basic Salary
Variable Salary
10/11
09/10
10/11
09/10
607.1
607.1
214.2 161.4
1 508.0 2 007.8
133.8 164.0
Payments
10/11
52.0
Employer contributions to Social Insurance
09/10
5.0
10/11
Total
09/10
10/11
09/10
100.2 126.9
921.5
895.4
244.4 326.1
1 938.2 2 502.9
2 859.7 3 398.3
Total management remuneration
As of 31 March 2011 the non-executive members oft he board of directors held the following shares. No Ypsomed share options were held.
Share ownership of Board of Directors
Dr. h. c. Willy Michel, Chairman Techpharma Management AG as related person of Dr. h. c. Willy Michel, Chairman Total of Willy Michel and Techpharma Management AG combined
Gerhart Isler, Member Anton Kräuliger, Vice-Chairman Prof. Dr. rer. pol. Dr. h. c. mult. Norbert Thom, Member Total
Shares as of 31 March 2011
Shares as of 31 March 2010
8 946 834
8 946 834
507 125
330 362
9 453 959
9 277 196
3 000
3 000
225
225
0
0
9 457 184
9 280 421
As of 31 March 2011 members of the non-executive and executive boards held the following shares. No Ypsomed share options were held.
Share ownership of Management
Richard Fritschi, CEO Simon Michel, Senior Vice President Marketing & Sales Dr. Manfred Mäder, Senior Vice President Quality Management & Regulatory Affairs Dr. Beat Maurer, Senior Vice President Legal and Intellectual Property, Secretary of the Board Maurice Meytre, Chief Operating Officer (COO) Yvonne Müller, Senior Vice President Human Resources Niklaus Ramseier, Chief Financial Officer (CFO) Dr. Christoph Rindlisbacher, Senior Vice President Corporate Development Total
110
Shares as of 31 March 2011
Shares as of 31 March 2010
3 500
3 500
8 528
8 528
no longer member
0
3 000
3 000
no longer member
500
800
800
1 069
1 069
no longer member
0
16 897
17 397
Ypsomed â&#x20AC;&#x201C; Financial Report
Financial Report
Report of the statutory auditors
111
Ypsomed â&#x20AC;&#x201C; Financial Report
112
Ypsomed – Financial Report
In thousand CHF
2010/11
2009/10
2008/09
2007/08
2006/07
242 461
254 014
275 058
287 468
277 450
Gross profit
66 724
66 446
84 310
90 197
64 239
Gross profit in %
27.5 %
26.2 %
30.7 %
31.4 %
23.2 %
Operating profit
8 610
13 449
30 735
30 976
2 338
Total Sales
1
Operating profit in %
3.6 %
5.3 %
11.2 %
10.8 %
0.8 %
Net profit
5 206
9 425
26 166
26 583
2 742
Net profit in %
2.1 %
3.7 %
9.6 %
9.2 %
1.0 %
19 645
23 946
24 753
22 678
23 825
5 436
3 532
1 770
1 667
1 237
33 691
40 926
57 258
55 322
27 400
13.9 %
16.1 %
20.8 %
19.2 %
9.9 %
Current assets
107 385
100 152
98 461
144 164
161 541
Non-current assets
567 247
561 858
533 755
494 066
461 248
Current liabilities
100 742
77 953
43 391
48 056
40 551
35 834
46 314
151 793
172 595
192 210
Balance sheet total
674 632
662 010
632 216
638 230
622 789
Capital expenditure
–14 485
–32 487
–43 698
–42 741
–36 808
Depreciation of fixed assets Amortization of intangible assets EBITDA
2
EBITDA in %
Non-current liabilities
Cash flow from operating activities
29 504
22 480
48 404
70 155
32 189
Cash flow from investing activities
–27 458
–43 739
–49 589
–52 306
–19 096
Cash flow from financing activities
–4 911
20 489
–28 041
–20 130
–38 131
Issued shares as of 31 March
12 649 739
12 649 739
11 244 213
11 244 213
11 244 213
Average shares outstanding
12 621 863
11 975 054
11 223 971
11 233 080
11 229 318
Earnings per share in CHF (basic / diluted)
0.41
0.79
2.33
2.37
0.24
Dividend per share (in CHF)
0.00
0.00
0.00
0.00
0.00
Par value repayment per share (in CHF)
0.25
0.60
0.60
0.00
1.25
Book value per issued share (in CHF)
42.53
42.51
38.87
37.14
34.69
Share price: year’s highest (in CHF)
70.00
79.00
101.00
120.30
215.15
Share price: year’s lowest (in CHF)
51.50
58.75
64.80
75.00
87.30
Share price: year-end (in CHF)
57.00
68.00
76.90
92.00
103.20
721
860
865
1 034
1 160
Average headcount
1 150
1 228
1 209
1 208
1 225
Average fulltime equivalent
1 104
1 176
1 152
1 157
1 178
Year-end headcount
1 097
1 199
1 209
1 210
1 211
Year-end fulltime equivalent
1 056
1 149
1 153
1 150
1 166
219 620
215 998
238 766
248 629
235 526
Market capitalization (in million CHF)
Sales per average fulltime equivalent (in CHF) 1 2
Since April 1, 2008, Real Estate income has been included in Total sales. Operating profit before depreciation and amortization.
113
Financial Report
Five-year overview 1 April – 31 March
Ypsomed – Corporate Governance Report
Corporate Governance
This Corporate Governance report describes the management and control principles at the highest corporate level of Ypsomed Holding AG and its subsidiaries according to the directive of the SIX Swiss Exchange concerning information on corporate governance. Ypsomed, which is headquartered in Burgdorf, Switzerland, is a world leader in the field of injection systems for the selfadministering of pharmaceutical substances. Ypsomed develops and produces its products primarily in Switzerland. Ypsomed injection systems are largely marketed by biotech and pharmaceutical partners around the world. Increasingly, Ypsomed also sells medical products, focusing on self-medication products for patients with diabetes. The company’s own injection systems and pen needles as well as commercial products purchased from third parties are sold through the company’s own distribution network and by independent distributors. The Ypsomed Group also includes Ypsotec, headquartered in Grenchen, Switzerland, a supplier of precision turning parts and subassemblies. The Ypsomed Group’s rules and regulations on Corporate Governance are defined in the Articles of Association, in the Organizational Policy of Ypsomed Holding AG and in the
Code of Conduct of the Ypsomed Group and correspond to the Corporate Governance Directive of October 29, 2008, issued by the SIX Swiss Exchange. The Board of Directors has issued an organizational policy that stipulates the duties, powers and responsibilities of the executive bodies of the Ypsomed Group. A copy of Ypsomed Holding AG’s Articles of Association (in the German version) can be ordered from the company or can be viewed on the company’s website at www.ypsomed.com (under Company / Investors / Corporate Governance). A copy of the Code of Conduct of the Ypsomed Group (in the German, English and French versions) can be ordered from the company or can be viewed on the company’s website at www.ypsomed.com (under Company / Investors / Corporate Governance). Compliance with the basic principles and values laid down in the Code of Conduct is reviewed on an ongoing basis during the company’s day-today business. In addition, the Board of Directors receives information on a periodic basis regarding experiences with the Code of Conduct. In the previous business year, contracts with suppliers were amended to ensure compliance with the basic principles stipulated in our Code of Conduct with regard to health, safety and environmental protection.
Corporate structure at March 31, 2011
Ypsomed Holding AG Burgdorf
Ypsomed AG Burgdorf / Solothurn 100 %
Ypsomed Distribution AG Burgdorf 100 %
TecPharma Licensing AG Burgdorf 100 %
Ypsotec AG Grenchen 100 %
Ypsotec s.r.o Tábor, CZ 100 %
Ypsomed GmbH Liederbach, DE 100 %
DiaExpert GmbH Liederbach, DE 100 %
114
feelfree GmbH Liederbach, DE 100 %
Ypsomed BV Vianen, NL 100 %
Ypsomed AB Helsingborg, SE 100 %
Ypsomed SAS Paris, FR 100 %
Ypsomed Ltd. Selby, UK 100 %
Ypsomed India Private Ltd. New Delhi, IN 100 %
Ypsomed – Corporate Governance Report
Group structure
Operating organization
Ypsomed Holding AG is organized as a holding company pursuant to Swiss law and directly or indirectly owns or controls all companies that are part of the Ypsomed Group worldwide. None of Ypsomed Holding AG’s subsidiaries are listed companies.
Ypsomed was formed from what was previously Disetronic, which was founded in 1984 and which developed and produced infusion systems and also, starting in 1986, injection systems. On April 30, 2003, Roche Holding AG acquired the infusion business of Disetronic through a public tender offer. Dr. h. c. Willy Michel continued the injection business under the Ypsomed trade name.
The Ypsomed Group’s operating organization is based on a parent company structure. It is divided into the following departments: CEO (including Technology, Production & Logistics, Quality Management & Regulatory Affairs and Precision Rotary Parts), Corporate Finance / IT, Marketing & Sales, Human Resources, and Legal & Intellectual Property. As a rule, two members of Ypsomed Group management sit on the Board of Directors of each subsidiary. In terms of operations, the Ypsomed Group is divided into two business segments: the Delivery Devices segment consists of business with the product groups pen systems, pen needles and other injection-molded parts. The Diabetes Direct Business segment consists of the sales and direct trade business with various supplies for diabetic needs. The “Other” segment brings together precision revolving parts and properties not currently used operationally.
Listed holding company
The corporate structure of Ypsomed Holding AG on March 31, 2011, is illustrated on page 84.
History of Ypsomed’s development
Market capitalization in CHF in % of equity Share price in CHF Price-earnings ratio
as of 31 March 2011
as of 31 March 2010
721 035 123
860 182 252
134.0*
160.0*
57.0
68.0
139.0**
86.0**
Corporate Governance
Ypsomed Holding AG, which has its headquarters in Burgdorf, is the holding company of the Ypsomed Group. It has a share capital of CHF 178 993 806.85, divided into 12 649 739 registered shares with a par value of CHF 14.15 each. Shares in Ypsomed Holding AG have been traded on the principal market of the SIX Swiss Exchange since September 22, 2004, and since June 27, 2007 on the BX Bern eXchange, under Security Number 1 939 699 and the symbol YPSN.
* Equity on 31 March 2010: CHF 537 742 766 Equity on 31 March 2011: CHF 538 056 159 ** Profit per share 31 March 2010: CHF 0.79 Profit per share 31 March 2011: CHF 0.41
115
Ypsomed – Corporate Governance Report
Capital structure Capital
Ypsome d H olding AG has a share capit al of CH F 178 993 806.85, divided into 12 649 739 fully paid up registered shares, each with a par value of CHF 14.15. All shares entitle the holder to receive dividends. Ypsomed Holding AG does not have an authorized share capital amount. The company has issued neither profit certificates nor participation certificates. There are no convertible bonds outstanding, and no options have been issued for participation rights in Ypsomed Holding AG or any Group companies.
Changes in capital
Changes in capital up to March 31, 2011, pursuant to the accounts of Ypsomed Holding AG (all amounts in CHF) Date
29.12.03
Founding
31.03.04 Net profit 01.04.04 Balance 01.07.04
Reverse merger with Finox Beteiligungen AG
28.07.04 Capital increase settled with shareholder loan 18.09.04
Conditional share capital
Issue
Split 1 : 8
20.09.04 Capital increase IPO 28.09.04 Capital increase IPO over-allotment
Ypsomed Holding AG has conditional share capital totaling CHF 2 264 000. The company may issue to selected employees and members of the Board of Directors up to 160 000 registered shares, to be paid up in full, with a par value of CHF 14.15 each. Shareholders’ purchase and advance subscription rights are excluded. Pursuant to the Articles of Association, shares and option rights may be issued at a price below the stock market value. The acquisition of shares through the exercising of subscription or option rights is subject to the statutory recording limitation and the statutory voting right limitation (see thereafter). The company has not issued any shares or option rights to date.
31.03.05 Net profit 31.08.05 Nominal value reduction CHF 0.90 per share 31.03.06 Net profit 05.09.06 Nominal value reduction CHF 1.25 per share 31.03.07 Reserves for own shares 31.03.07 Net profit 31.03.08 Reserves for own shares 31.03.08 Net profit 16.09.08
Nominal value reduction CHF 0.60 per share
31.03.09 Reserves for own shares 31.03.09 Net profit 03.07.09 Nominal value increase Capital increase 23.09.09 Nominal value reduction CHF 0.60 per share 31.03.10
Reserves for own shares
31.03.10
Net profit
14.09.10
Nominal value reduction CHF 0.25 per share
31.03.11
Reserves for own shares
31.03.11
Reassignment of capital reserves to reserves as capital investments
31.03.11
Reassignment of capital reserves to reserves as capital investments
31.03.11
Reclassification of general reserves
31.03.11
Net profit
31.03.11
Balance
Share premium of IPO 20. + 28.09.2004
18.09.04 Capital increase 28.09.04 Capital increase Total
The costs for the IPO have been capitalized in the statutory accounts and have been amortized over five years since September 2004.
116
Ypsomed – Corporate Governance Report
General statutory reserves Number of shares
Nominal value
Share capital
2 500
100.00
250 000.00
100.00
100.00
8 000 000
12.50
Reserves from equity
General reserves
Reserves for own shares
Total
250 000.00
250 000.00 –150 000.00
997 500
Retained earnings
11 096 910.20
11 346 910.20
11 096 910.20
11 346 910.20
6 315 915.24
17 512 825.44 117 262 825.44
99 750 000.00
117 262 825.44
3 016 000
12.50
37 700 000.00
165 143 042.21
320 105 867.65
228 213
12.50
2 852 662.50
12 495 951.29
335 454 481.44 825 726.81
–0.90
336 280 208.25 326 160 416.55
–10 119 791.70 1 187 206.38
–1.25
327 347 622.93 313 292 356.68
–14 055 266.25 –2 223 985.21
2 223 985.21
1 020 967.85
314 313 324.53
873 759.26
–873 759.26
6 099 149.38 –0.60
320 412 473.91
392 705.90
11 968 630.02
1 405 526 –0.6
384 666 694.38 16 163 522.75
421 913 107.13 414 323 263.73
–7 589 843.40 –208 715.75
208 715.75
11 715 880.66 –0.25
422 876 709.64
–3 162 434.75 51.50 193 802 516.25
422 876 709.64
150 000.00
–150 000.00
422 876 709.64
–50 000.00
178 993 806.85
422 876 709.64
–193 802 516.25
50 000.00
422 876 709.64
8 308 089.98 14.15
414 323 263.73 426 039 144.39
–51.50
12 649 739
313 665 946.11 325 634 576.13
59 032 118.25 21 082 890.00
314 313 324.53
313 665 946.11
–6 746 527.80 –392 705.90
5.25
313 292 356.68
193 652 516.25
56 536 777.42
431 184 799.62 193 652 516.25
50 000.00
1 951 699.10
431 184 799.62
Capital
in %
IPO costs Share premium gross
Share premium net
37 700 000.00
92.97 %
10 189 057.47 165 143 042.21
154 953 984.74
2 852 662.50
7.03 %
770 979.90
12 495 951.29
11 724 971.39
40 552 662.50
100.00 %
10 960 037.37
177 638 993.50
166 678 956.13
117
Corporate Governance
2 500
Capital reserves
Ypsomed – Corporate Governance Report
Shareholder structure Registered shareholders
There were 5789 shareholders registered in the Share Register on March 31, 2011 (prior year: 6449 shareholders). Of these shareholders, 98 % report Switzerland as their place of residence. The distribution of shareholdings is as follows: Number of shares
Number of shareholders Number of shareholders as of 31 March 2011 as of 31 March 2010
1 to 100
3 234
3 597
101 to 1000
2 357
2 646
178
186
10 001 to 100 000
16
16
more than 100 000
4
4
31 March 2011
31 March 2010
1001 to 10 000
Shareholder structure according to investor category as of 31 March 2011 (number of shares)
Dr. h. c. Willy Michel including affiliated persons
74.7 %
73.3 %
Natural persons
8.6 %
9.9 %
Banks
0.5 %
0.7 %
Funds, foundations, pension funds, insurances, public corporations and other legal entities
6.0 %
6.6 %
10.2 %
9.5 %
Not registered in Share Register
Significant shareholder
Cross participations
The significant shareholder is Dr. h. c. Willy Michel, Chairman of the Board of Directors of Ypsomed Holding AG, who held 8 946 834 registered shares on March 31, 2011 (prior year: 8 946 834 shares). Dr. h. c. Willy Michel as well as Techpharma Management AG, over which he exerts full control, hold a total of 9 453 959 registered shares, which equals to 74.7 % of the shares (prior year: 9 277 196 shares, making up 73.3 %).
There are no cross participations.
There are no shareholder agreements or other agreements between shareholders
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Ypsomed – Corporate Governance Report
Limitation on the transferability of shares
Board of Directors Members of the Board of Directors
The Board of Directors consists of a minimum of three and a maximum of five members elected for a term of office of three years with the possibility of re-election. The Board of Directors was re-elected on the occasion of the 2010 General Meeting of Shareholders. The Board of Directors is selfconstituting. All four members are non-executive members. Dr. h. c. Willy Michel was a member of the executive management of Disetronic Holding AG until April 2003. The main task of the Board of Directors is the overall management of the company and the supervision and control of executive management. No member of the Board of Directors holds an operative function with Ypsomed Holding AG or one of its subsidiaries or has held such a position in the past three years. With the exception of Dr. h. c. Willy Michel, no business relationships exist between the individual members of the Board of Directors and Ypsomed Holding AG or any of its subsidiaries. The following business relationships between Dr. h. c. Willy Michel and affiliated persons and Ypsomed Holding AG and / or its subsidiaries existed in the year under review (information relating to the actual remuneration paid directly or indirectly in the 2010/11 business year that is stipulated by Art. 663b bis of the Swiss Code of Obligations can be found in the Notes to the 2010/11 financial statement, page 109):
Corporate Governance
No share certificates are issued for Ypsomed Holding AG shares. Any shareholder may ask the company at any time to issue a confirmation regarding the registered shares entered in the Share Register in his name. Any person validly entered in the Share Register as an owner or beneficiary is considered to be a shareholder of the company. Any person acquiring registered shares or the beneficial entitlement to registered shares must apply in writing to be entered in the Share Register. Approval is given by the Board of Directors, which may delegate this power. The transfer is then entered in the Share Register. Applicants will be entered in the Share Register as shareholders with voting rights provided they expressly declare that they have acquired the registered shares in their own name and for their own account. If this declaration is not made, the Board of Directors may refuse the entry. The Board of Directors may draw up guidelines for the entry of nominees and may permit nominees to be entered in the Share Register with voting rights for shares up to a maximum of 5 % of the nominal share capital. The Board of Directors may also allow nominees to be entered in the Share Register with voting rights for shares exceeding this limit if the nominees disclose the names, addresses, nationality, domicile and shareholdings of the natural persons and legal entities on whose account they hold 1 % or more of the nominal share capital. The 5 % limit also applies to nominees who are related to one another through capital ownership or voting rights by virtue of a common management or otherwise. If a shareholder has been entered in the Share Register on the basis of incorrect information, having given the parties involved the right to be heard, the Board of Directors may remove from the Share Register the entry as a shareholder with voting rights and replace it instead with an entry as a shareholder without voting rights. In the year under review, no applications for the entry of nominees were made. Restrictions on the transfer of registered shares may only be amended by a resolution passed at the General Meeting of Shareholders with a qualified majority of at least two-thirds of the votes represented and an absolute majority of the nominal share capital represented at such meeting.
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Ypsomed – Corporate Governance Report
Executive loans
Other contractual relationships
Dr. h. c. Willy Michel made a loan to the company that he assigned to his company Techpharma Management AG. In the year under review, an amount of CHF 10 million was paid off. As of March 31, 2011, a loan amount of CHF 34.5 million was still outstanding. The key terms of the loan agreement are: since April 1, 2010, the loan has borne interest at a rate based on the CHF 12-month LIBOR as published by the Swiss National Bank plus 0.5 % and it is adjusted in line with the prevailing rate as at the end of March and the end of September every year. Ypsomed Holding AG may repay the loan in full or partially at any time. However, it is repayable by March 31, 2014, at the latest. Starting April 1, 2011, Techpharma Management AG may each year demand repayment of a maximum of CHF 10 million on three months’ notice. There are no further executive loans.
Dr. h. c. Willy Michel (respectively his company Techpharma Management AG) and Ypsomed have concluded a service contract that can be terminated by either side at any time. This contract allows for Techpharma Management AG to provide occasional services to the Ypsomed Group (e. g. hotel and catering services) as well as selected management support services (including temporary personnel) and, for its part, for the Ypsomed Group to offer occasional services to Techpharma Management AG (e. g. management and IT support, including temporary personnel). The services are invoiced at normal market conditions. The mutual supply of temporary personnel is invoiced at the personnel cost rate. This contract was discussed and approved by the Board of Directors, in whose opinion this is regarded as a cooperation agreement at normal market conditions. In the year under review, there were no significant temporary personnel services.
Rental contract
Dr. h. c. Willy Michel (respectively his company Techpharma Management AG) has been renting the building on Buchmattstrasse in Burgdorf (Ypsomed Nord) to Ypsomed since January 1, 2006. The parties signed a rental contract set at an indexed market rent, based on a rental assessment performed by an independent party. The rent was last adjusted on January 1, 2009, to CHF 985 402 plus VAT (excluding additional costs). The rental contract can be terminated for the first time on December 31, 2015, conditional upon 24 months’ notice. The tenant has unlimited first right of refusal for purchasing the property for the entire rental period, for a maximum of 25 years from the start of the rental. The rental contract dictates that small and normal maintenance work on the building be paid by the tenant up to a maximum amount of 2 % of the annual rent per calendar year. Major maintenance work and repairs necessary for safeguarding the asset value of the building is at the lessor’s expense. On termination of the contract, the tenant will be reimbursed for the alterations carried out to the leased property with the lessor’s consent in application of IFRS depreciation rates at the residual book value. The rental contract was discussed and approved by the Board of Directors, in whose opinion this is regarded as a rental contract at normal market conditions.
120
Furthermore Dr. h. c. Willy Michel has a minority shareholding in Faes Bau AG, which is headquartered in Burgdorf, and is a member of its Board of Directors. Ypsomed occasionally awards Faes Bau AG with building contracts that are in line with normal market conditions based on a competitive proposal process.
Contractual cooperation with Finox AG
Agreements on cooperation exist between Ypsomed Holding AG and two of its subsidiaries on the one hand, and Techpharma Management AG and its subsidiary Finox AG, which belong to Dr. h. c. Willy Michel, on the other hand. The business objective of Finox AG is the development, manufacturing and sale of pharmaceuticals. The cooperation between Ypsomed AG and Finox AG relates to research and development in the field of devices for administering drugs and their exchange and compensation. Furthermore, employees may switch between the two companies on a project-specific basis. The services provided by the parties on the corresponding projects are remunerated at standard market rates; Ypsomed AG also receives a right of first refusal to purchase the shares of Finox AG. The contractual cooperation was discussed and approved by the Board of Directors, in whose opinion it is consistent with customary cooperation agreements in the market.
Ypsomed – Corporate Governance Report
Members of the Board of Directors Prof. Dr. rer. pol. Dr. h. c. mult. Norbert Thom, Member
of the Board of Directors of Ypsomed Holding AG since 2005. After studying economics and social sciences, he became a scientific assistant, project manager and private tutor at the University of Cologne, Acting Professor at the University of Giessen and then full Professor of management, organization and human resources studies at the University of Freiburg, Switzerland. Prof. Thom is the founder (in 1991) and director of the Institute for Organization and Human Resources at the University of Bern as well as a full Professor of Business Management Studies. From 1995 until 1997 he was ViceChancellor of Finance and Planning and member of the Board of Governors at the University of Bern. From 1997 until 2000 he was a member of the Swiss Scientific Board, which is the advisory body of the Federal Council for questions concerning economic policy. Prof. Thom has three honorary doctorates for his academic achievements in the areas of public management, organization and human resource management. He received these awards from universities in Lithuania (Vilnius), Austria (Linz) and Germany (Halle-Wittenberg). He has many years of practical experience as, among other things, an organizational and human resources advisor to companies, authorities and governments. He is further a member of the Board of Directors at WIFAG Polytype Holding AG, Bern (up to 2011). He has extensive involvement in the further training of managers, is a lecturer for several executive master level courses and is Vice-Chairman of the Volkswirtschaftliche Gesellschaft of the Canton of Bern and Vice Chairman of the Schweizerische Gesellschaft für Organisation und Management (SGO).
121
Corporate Governance
Dr. h. c. Willy Michel, Chairman of the Board of Directors of Ypsomed Holding AG, founded Disetronic together with his brother in 1984. They were together until his brother’s departure from the business in 1995, and thereafter Dr. h. c. Willy Michel was solely responsible for the development, production, distribution and sale of Disetronic products (until 1999). Within the scope of the sale of Disetronic to Roche Holding AG in 2003, Dr. h. c. Willy Michel repurchased the injection business of Disetronic, which has since then traded under the name Ypsomed. He has held the post of Chairman of the Board of Directors of the Disetronic Group and now the Ypsomed Group without interruption. Prior to the founding of Disetronic, Dr. h. c. Willy Michel, who holds a professional qualification as a pharmaceutical consultant with a federal diploma, obtained a broad range of experience with several industrial and pharmaceutical companies in the fields of development, sales & marketing, and he was the head of Novo-Nordisk Switzerland for six years (from 1978 until 1984). For three years (from 1998 until 2001) he was a member of the Burgdorf City Council, and in 2004 the city awarded him its Medal of Honor. In addition, he is the owner of a number of companies including several wellknown firms involved in the fields of art, watchmaking and gastronomy as well as Finox AG, which is active in the development, manufacturing and sale of pharmaceuticals. He is currently Vice-Chairman of the Board of Directors of BV Holding AG (from 2001 until March 2008 President), member of the Board of Directors of Adval Tech Holding AG (since 2007), and is a member of the Boards of Directors of various non-listed companies operating in different sectors to the Ypsomed Group and of no significance to its business activities (Faes Bau AG and others). In 2005, Dr. h. c. Willy Michel was declared the “Master Entrepreneur of the Year” for his overall business performance by Ernst & Young AG, and in 2006 he was awarded an honorary doctorate (Dr. h. c.) by the Economic and Social Science Faculty of the University of Bern.
Ypsomed – Corporate Governance Report
Gerhart Isler, Member of the Board of Directors of Ypsomed
Anton Kräuliger, Vice-Chairman of the Board of Directors
Holding AG since 2008. After completing his studies in economics at the University of Zurich, Mr. Isler joined the family newspaper publishing company Finanz und Wirtschaft AG as an editor in 1976. In 1980 he managed the company’s editorial department in New York, was head of foreign correspondents from 1981 until 1986, and then held the position of manager of the publishing house until 1989. He then became the owner of Finanz und Wirtschaft, which enjoyed strong growth up to 2000 and became the country’s most important financial newspaper. Mr. Isler subsequently sold the publishing firm but continued as its publisher until the end of 2004. From 2005 until the end of 2008, Mr. Isler was a member of the Board of Directors of the listed company PubliGroupe. In 2005, he was elected to the Board of Directors of Grand Casino Baden. Mr. Isler has been a member of the Board of Trustees of the move>med Foundation, which is involved in the field of sports, since 2005. In 2008, Mr. Isler was elected to the Board of Directors of the listed investment company New Value. Furthermore Mr. Isler is head of the Bergdietikon municipal council.
of Ypsomed Holding AG (member since 2007). After completing his studies at ETH Zurich with a degree in Mechanical Engineering, Mr. Kräuliger joined the family business in 1971 and in 1978 took over the majority shareholding in Lyss AG (today Metalyss AG), a metal foundry and fittings factory. He developed this company into the leading fittings group on the Swiss market, the Similor Group. Within the scope of the sale of the fittings division to Madison Private Equity Holding AG in 2002 and 2005, Mr. Kräuliger repurchased the Industrial Division, which today is combined into Metalyss AG once more. Between 1993 and 2004, Mr. Kräuliger was a member of the Board of Directors of the listed Bernese Kantonalbank BEKB | BCBE and continues to be an active member of several Boards of Directors including serving as Chairman of the Board of Directors of Metalyss AG (since 1978), Chairman of the Board of Directors of Sécheron SA (since 2005) as well as a member of the Board of Directors of the parent company Sécheron- Hasler Holding AG (since 2005). Anton Kräuliger is also owner of Moospinte AG, a restaurant in Wiggiswil / Münchenbuchsee. As a member of the City Council for the town of Kappelen he is director of the Finance Department.
Name
Nationality
Yea of birth
Position
Member since*
Elected until the GM
Dr. h. c. Willy Michel
Swiss
1947
Chairman of the Board of Directors
1984
2013
Gerhart Isler
Swiss
1949
Member of the Board of Directors
2008
2013
Prof. Dr. rer. pol. Dr. h. c. mult. Norbert Thom German
1946
Member of the Board of Directors
2005
2013
Anton Kräuliger
1946
Vice-Chairman of the Board of Directors
2007
2013
Swiss
* including Member of the Board of Directors of Disetronic
122
Prof. Dr. rer. pol. Dr. h. c. mult. Norbert Thom
Anton Kr채uliger
Gerhart Isler
Corporate Governance
Dr. h. c. Willy Michel
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Ypsomed – Corporate Governance Report
Dr. h. c. Willy Michel, Chairman of the Board of Directors of Ypsomed Holding AG, is also Vice-Chairman of the Board of Directors of BV Holding AG, which is listed on the BX Bern eXchange. On March 31, 2011, BV Holding AG held a total of 22 500 shares in Ypsomed Holding AG (previous year: 22 500 shares), representing a shareholding of 0.18 % (previous year: 0.18 %).
within the Board of Directors are taken by majority decision; if the vote is tied, the Chairman, or in his absence the ViceChairman, has the deciding vote. Votes may not be taken by proxy. Meetings of the Board of Directors are regularly attended by the CEO and the CFO and, depending on the business to be discussed, by other members of management. Simon Michel, the son of Dr. h. c. Willy Michel and who is a member of management, also takes part in Board of Directors’ meetings with an advisory role.
Dr. h. c. Willy Michel, Chairman of the Board of Directors of Ypsomed Holding AG, is also a member of the Board of Directors of Adval Tech Holding AG, a company listed on the SIX Swiss Exchange and with headquarters in Niederwangen. In June 2007, Ypsomed AG and Adval Tech Holding AG signed an agreement on strategic cooperation in tool construction with a fixed contract term of 5 years. The objective of this cooperation is to bring together the respective strengths and core competencies of both companies and to use them for the efficient manufacturing of high-quality products. As part of this agreement Ypsomed buys from time to time tools manufactured by Adval Tech or its group companies at fair market prices based on industry standard conditions and existing competitive offers.
Given the size and composition of the Board of Directors, it may advise and decide on all matters in plenary. However, pursuant to the Organizational Policy, it may delegate some of its powers to a committee of the Board of Directors on a case-by-case basis. The Board of Directors appointed a committee of the Board of Directors in the form of a one-man committee consisting of the Chairman of the Board of Directors. In addition, a monitoring committee was recently established consisting of three members of the Board of Directors, but not the Chairman of the Board of Directors. The members of the monitoring committee are Anton Kräuliger, Gerhart Isler and Prof. Norbert Thom. Furthermore, the Chairman of the Board of Directors routinely meets with the CEO several times a month to discuss individual business operations.
How the Board of Directors operates
In the year under review, the Board of Directors met a total of four times and passed several resolutions by correspondence. During the Board of Directors’ meeting in May 2010, the lead auditor participated. The Board of Directors’ additionally met in January 2011 for 2.5 days as part of the strategy meeting with executive management. With the exception of Prof. Thom, who was unable to participate in one meeting, all members of the Board of Directors‘ participated in all Board of Directors’ meetings, in the General Meeting of Shareholders of June 2010, and in the strategy meeting of January 2011.
Interrelated companies
The Board of Directors holds regular meetings four times per year at which it accepts management’s written report and the verbal comments of the CEO, deliberates and also decides on management proposals. The auditors participate in the May meeting of the Board of Directors at which they give information on the comprehensive report and on other questions. The Board of Directors meets on one additional occasion per year for two to three days within the context of a strategy meeting with management. Occasionally the Board of Directors makes additional decisions by correspondence. The agendas for the meetings are set by the Chairman in agreement with the CEO; any member may ask for points to be included on the agenda. The members receive the agenda and the necessary basis for decision-making generally 7 to 10 days before each meeting. Any member of the Board of Directors may request information about any aspect of the Group’s affairs. Votes and resolutions
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Ypsomed – Corporate Governance Report
The Board of Directors has certain non-transferable and irrevocable duties under Swiss corporate law. It has the highest decision-making power in the company, under restriction of those matters on which shareholders must decide in accordance with the law. In particular, it defines company policy, the mission statement – consisting of a mission and a vision – and the strategic direction of the Ypsomed Group, sets its targets and priorities, and allocates the resources for achieving the targets set. The Board of Directors defines the organization of the Ypsomed Group, supervises business activities, controls the finance and accounting divisions and is responsible for appointments and dismissals as well as the supervision of the individuals entrusted with management duties. It is responsible for the Annual Report, issues the Code of Conduct, approves the budget and the mid-term planning for executive management and also monitors the business activities of the Group companies. The Board of Directors approves individual business affairs. This includes, in particular, decisions on the purchase or sale of companies and properties as well as the conclusion of contracts regarding strategic cooperation and contracts with other financial significance. The committee of the Board of Directors appointed by the Board of Directors in the form of a one-man committee consisting of the Chairman of the Board of Directors approves individual business affairs. This includes, in particular, decisions on benchmark figures of a cooperation outside of previous business activities, with the principle of a cooperation being reserved for the whole Board of Directors, as well as benchmark figures relating to financially significant cooperation agreements within the context of usual business activities; it approves, furthermore, securities obligations and employment contracts with members of management. The members of the monitoring committee discuss individually at least once a year with the persons in charge for internal control system, risk management, compliance and internal audit planning, and report on their findings to the entire Board of Directors. The responsibilities of the Board of Directors, the appointed one-man committee and the other decisionmaking bodies within the Ypsomed Group are fixed in the assignment of authority.
Instruments for information about and control of management
The Ypsomed Group’s information and control instruments, which are at the disposal of the Board of Directors, consist of written management reporting, which is produced quarterly (management review, quarterly reports), and financial reporting, which is based on Group accounting in accordance with IFRS, comprising comprehensive consolidated accounts (profit & loss statement, balance sheet, cash flow statement) with a budget comparison as well as selected management statistics. Furthermore, the Board of Directors uses strategic planning documents as management instruments for steering the company. Responsibility for risk management and monitoring rests with management, which reports on these matters periodically to the Board of Directors, but at least once a year. In addition to these documents, further selected financial figures are at management’s disposal on a monthly basis. Minutes of management meetings are also at the disposal of the Chairman of the Board of Directors. The Internal Auditing function, for which the Board of Directors is directly responsible, is commissioned with the constant expansion of the documented, internal control system. The auditing plans are based on a risk-oriented procedure that relates to business processes and are geared towards the following goals and tasks: reviewing the fulfillment of business goals and objectives; evaluation of the effectiveness of risk management, control and corporate management processes; optimization of business processes; improvement of controls and processes with regard to the information systems; verification of controls and processes for accounting systems; confirmation and guarantee of authorized business transactions; safeguarding of assets; support with regard to complying with legal and regulatory requirements; and reviewing significant or particular business cases and transactions. The Board of Directors can determine additional areas to be reviewed.
Otherwise, the Board of Directors has delegated responsibility for running the company to the CEO and management.
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Corporate Governance
Regulations concerning authority
Ypsomed – Corporate Governance Report
Executive Management The CEO and the executive management team are responsible for the operational management of the Ypsomed Group within the scope of the guidelines laid down by the Board of Directors. Name
Nationality
Year of birth
Position
Acting for Ypsomed (or pre-2003 for Disetronic) since
Richard Fritschi
Swiss
1960
CEO
2006
Simon Michel
Swiss
1977
Senior Vice President Marketing & Sales
2006
Niklaus Ramseier
Swiss
1963
Chief Financial Officer (CFO)
2002
Yvonne Müller
Swiss
1969
Senior Vice President Human Resources
2003
Dr. Beat Maurer
Swiss
1958
Senior Vice President Legal & Intellectual Property, Secretary of the Board
1992
Niklaus Ramseier, Chief Financial Officer (CFO) 126
Simon Michel, Senior Vice President Marketing & Sales
Yvonne MĂźller, Senior Vice President Human Resources
Dr. Beat Maurer, Senior Vice President Legal & Intellectual Property 127
Corporate Governance
Richard Fritschi, Chief Executive OfďŹ cer (CEO)
Ypsomed – Corporate Governance Report
Organisation of Ypsomed
Board of Directors
CEO R. Fritschi
Legal & IP B. Maurer
Finance & IT CFO N. Ramseier
Richard Fritschi, CEO, at Ypsomed since September 2006,
previously active in the field of medical technology for several years, for example as President Europe / Australasia of Zimmer GmbH, Winterthur (from 2003 until 2005), President Europe / Asia / South America at Sulzer Orthopädie / Sulzermedica, Winterthur (from 2001 until 2003), and Sales Manager of Sulzer Orthopädie / Sulzermedica, Winterthur (from 1999 until 2001). At the beginning of his professional life he worked in the field of finance (latterly as CFO of Allo Pro / Sulzer Orthopädie, Baar / Winterthur from 1991 until 1999), and he worked in England and France for a long time. He is Vice President of the Board of Directors of Vetropack AG in Bülach (since 2006, Member of the Board of Directors since 2005), Chairman of the Board of Directors of Cornaz AG-Holding in Oberrieden (since 2009, Member of the Board of Directors since 2004), Member of the Board of Directors of Reinhard Fromm Holding AG in Steinhausen (since 2008) and a holder of Board of Director mandates with several unlisted companies. Education: degree in Business Science / Controller SIB as well as the Advanced Management Program “General Management” at the Harvard Business School. Richard Fritschi is a member of the Board of Management of the Medical Cluster organization and of the Board of Directors of Medtech Switzerland, both based in Bern. He is also a member of the Foundation Board of the Competence Center for Medical Technology (CCMT) Foundation, which is also headquartered in Bern. Simon Michel, Senior Vice President Marketing & Sales, with
Ypsomed since October 2006. Member of management since 2008 and responsible for Marketing & Sales. From 2003 until 2006, he worked for Orange Telecommunications in Zurich and Lausanne where he was responsible for, among other things, the introduction and marketing of UMTS. He has been
128
Marketing & Sales S. Michel
Human Resources Y. Müller
on the Board of Directors at Sphinx Werkzeuge AG since 2006 and on the executive committee of the local trade and industry association since 2008. Simon Michel has studied Economics at the University of St. Gallen and completed a Masters with a focus on Media and Communications Management. Niklaus Ramseier, CFO, with Ypsomed (pre-2003 with Dis-
etronic) since 2002, prior to that Head of Finance and Controlling for the industrial services product line of the Von Roll Group (from 1995 until 2002) and various advisory and accounting functions within a trust and auditing company. Education: Swiss certified expert for accounting and controlling. Yvonne Müller, Senior Vice President Human Resources,
with Ypsomed since 2003, prior to that responsibility for training at BEKB (from 2002 until 2003) and for human resources at X-Media and Scout24 (from 2000 until 2002) as well as at IKEA (from 1996 until 2000). Education: graduate human resources specialist. Beat Maurer: Dr. iur., attorney-at-law, Senior Vice President
Legal & Intellectual Property, Secretary to the Board of Directors of Ypsomed Holding AG, with Ypsomed (pre-2003 with Disetronic) since 1992, prior to that tax and legal consultant with a trust and auditing company. Education: degree in Law from the University of Freiburg, studied at the Free University of Berlin, doctorate in Law from the University of Bern and admitted to the bar in the Canton of Bern. Beat Maurer has been a judge specializing in issues relating to intellectual property law at the commercial court of the Canton of Bern since 2002. He is also a member of the Board of Directors of FASMED, the Federation of Swiss Medical Devices Trade and Industry Associations, based in Muri near Bern.
Ypsomed – Corporate Governance Report
There are no management contracts.
Board of Directors’ remuneration The members of the Board of Directors draw a remuneration that is discussed and established by the complete Board of Directors. A decision on the amount and form of the remuneration is made at the discretion of the Board of Directors during a plenary session. All remunerations are paid in cash. Share or option plans do not exist. If compared with the remuneration paid by other listed companies of a similar size from the Mittelland region, the amount of the total remuneration of the Board of Directors should lie in the middle of the range (for reference figures, see actual values out of annual reports and the journal “Handelszeitung” no. 46 from November 17, 2010, p. 20f.).
The Board of Directors’ remuneration (consisting of a fixed amount, a variable amount and an attendance fee) is set anew each year by the Board of Directors. The variable amount depends on achieved vs. budgeted targets based on two-thirds of the consolidated EBIT margin and one-third of the consolidated sales. The fixed sum amounts to CHF 150 000 (prior year: CHF 150 000) for the Chairman of the Board of Directors and CHF 90 000 (prior year: 90 000) per member of the Board of Directors; the variable sum amounts to at most CHF 50 000 (prior year: CHF 50 000) for the Chairman of the Board of Directors and CHF 30 000 (prior year: CHF 30 000) for each member. The attendance fee amounts to CHF 1 500 per meeting (prior year: CHF 1 500). The Board of Directors’ remuneration and attendance fees are paid to the members of the Board of Directors following the General Meeting of Shareholders. In addition, for consulting services, the Chairman of the Board of Directors (respectively his company Techpharma Management AG) receives a flat fee of CHF 140 000 + VAT (prior year: CHF 140 000). The relationship to affiliated persons is described in the section Board of Directors, Members of the Board of Directors, page 124. Information relating to all actual remuneration paid to present and former members of the Board of Directors in the 2010/11 business year as stipulated by Art. 663b bis of the Swiss Code of Obligations can be found in the Notes to the 2010/11 financial statement, page 109.
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Corporate Governance
Management contracts
Ypsomed – Corporate Governance Report
Management remuneration Remuneration for members of management consists of a base salary and a variable amount depending on the success of the company and the achievement of individual goals as well as an individual one-off bonus of a maximum of CHF 25 000 to be paid in exceptional cases. If compared with the remuneration paid by other listed companies of a similar size from the Mittelland region, the amount of the total remuneration should lie in the middle of the range. In addition to actual reference values, in particular the Ethos studies regarding remuneration of executive bodies from 2006 until 2010 were referred to when calculating the remuneration. The variable salary amount for the CEO is at most CHF 500 000 (net) and for the remaining members of management it is at most 31.25 % of their annual salary (gross). The variable salary amount depends on achieved vs. budgeted targets based on 50 % of the consolidated EBIT margin and 25 % each of the consolidated sales and the achievement of individual targets. The amount of the base salary is approved annually as a whole by the Board of Directors in its sole discretion; individual adjustments are made at the CEO’s request by the Chairman of the Board of Directors in his sole discretion. The gradation of the variable salary is adjusted annually at the CEO’s request through the Chairman of the Board of Directors and is based on the budget that has been approved by the complete Board of Directors. All remunerations are paid in cash. Share or option plans do not exist.
The payment of lump sum expenses is based on the expense regulation approved by the Canton of Bern; according to this, lump sum expenses only cover effective expenses and are thus not reported separately. Likewise, additional payments (such as discounts for purchasing Reka vacation checks, etc.) are not listed as long as they do not exceed a total amount of CHF 2000 per person per year. No severance payments have been agreed upon with directors, nor have any long-term contracts of more than 12 months duration been signed with members of management. In the year under review, Maurice Meytre, Dr. Manfred Mäder and Dr. Christoph Rindlisbacher resigned from management. Since January 1, 2011, Maurice Meytre has been CEO of Ypsotec AG, a subsidiary of Ypsomed Holding AG. No severance payments were paid to former directors in the year under review. Information relating to the actual remuneration paid directly and indirectly to members of management and former members of management in the 2010/11 business year as stipulated by Art. 663b bis of the Swiss Code of Obligations can be found in the Notes to the 2010/11 financial statement, page 110.
Allocation of shares in the year under review
No shares were allocated in the year under review.
Share ownership
Information relating to the actual shares held directly and indirectly by members of the Board of Directors, management and affiliated persons in the 2010/11 business year as stipulated by Art. 663c of the Swiss Code of Obligations can be found in the Notes to the 2010/11 financial statement, page 110. There were no options issued by the company on equities of Ypsomed Holding AG or Group companies.
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Ypsomed – Corporate Governance Report
Shareholders’ rights of participation Voting right restrictions and representation
All shareholders who are entered in the Share Register with voting rights are entitled to vote at the General Meeting of Shareholders. Shareholders may arrange to be represented at the General Meeting of Shareholders by written proxy. In exercising his voting rights, no shareholder may directly or indirectly amalgamate more than 5 % of the total voting rights in the form of his own shares and those he is representing. Legal entities and partnerships that are related to one another through capital ownership or voting rights or by virtue of a common management or otherwise, as well as natural persons, legal entities or partnerships that adopt a coordinated approach in order to circumvent the restrictions on voting rights, will be considered as one person. However, the restriction on voting rights will not apply to the exercise of voting rights by the company representative, a depositary representative or the specially designated independent shareholder representative, nor to Dr. h. c. Willy Michel because more than 5 % of all voting rights were registered to him in the Share Register at the time the Articles of Association were drawn up (Art. 16 of the Articles of Association).
Convening the General Meeting of Shareholders
The General Meeting of Shareholders will be convened by way of a letter to the shareholders who are entered in the Share Register at least 20 days prior to the meeting as well as by publishing a notice in the Swiss Official Gazette of Commerce (SHAB).
Agenda items
Shareholders holding shares with a nominal value of at least CHF 1 million have the right to request that a specific matter be put on the agenda by specifying the items of the agenda and the proposals. Such requests must be submitted in writing to the Chairman of the Board of Directors at least 45 days before the meeting.
Entries in the Share Register
Entries in the Share Register will be made until six days prior to the General Meeting of Shareholders.
Change of control and blocking mechanisms
Unless otherwise stipulated by law or by the Articles of Association, the General Meeting of Shareholders will adopt resolutions and conduct votes on the basis of an absolute majority of the votes cast, excluding blank and invalid votes. The Chairman will also vote and, if the vote is tied, he will have the deciding vote. The quorums laid down in the Articles of Association reflect statutory quorums.
In the event of a public takeover bid, the bidder is required pursuant to Art. 32 of the Swiss Stock Exchange Act to make an offer for all of the company’s listed shares as soon as it acquires shares directly, indirectly or in concert with third parties, which along with the shares already held exceed the threshold of 49 % of the voting rights of the company, whether exercisable or not (Art. 10 Articles of Association). There are no change-of-control clauses with members of the Board of Directors, management and / or other personnel.
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Corporate Governance
Quorums according to the Articles of Association
Ypsomed – Corporate Governance Report
Auditors Term of mandate of auditors and term of the lead auditor
On June 27, 2007, the General Meeting of Shareholders of Ypsomed Holding AG selected Ernst & Young AG, Bern, as auditors for the first time. The lead auditor, Mr. Christian Schibler, has been in office at Ypsomed Holding AG since June 2007 and will be replaced in 2014 at the latest due to the rotation obligation. The auditors are each appointed for a term of one year by the General Meeting of Shareholders, the last time being on the occasion of the 2010 General Meeting of Shareholders.
Auditing fees
The total auditing fees charged by the auditor for Ypsomed Holding AG and its Group companies in the course of the year under review amount to TCHF 297. Ypsomed Holding AG and its Group companies were invoiced TCHF 44 for additional so called non-auditing services in respect to tax advisory and interpretation of IFRS and disclosure requirements.
Instruments for supervision and control of auditing
The complete Board of Directors undertakes the supervision and control of the auditor. The lead auditor is in attendance during the discussion and acceptance of the consolidated and annual financial statements by the Board of Directors. The auditor compiles a comprehensive report annually for the attention of the Board of Directors, and it is discussed by the Board of Directors with the lead auditor in attendance.
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Ypsomed – Corporate Governance Report
Information policy Ypsomed Holding AG maintains an open and transparent communication policy towards shareholders, potential investors, financial analysts, the media, and customers, based on the principle of equality. The company uses the following instruments: annual report, half-year report, presentation of the annual results to the media and financial analysts ahead of the shareholders’ meeting, as well as briefing the media on important events. Responsibility for communication with investors rests with the Chairman of the Board of Directors, who may delegate this duty to the CEO. The following banks monitor the development of the Ypsomed Group:
communicated to a number of national newspapers, electronic information systems and to persons registered on the e-mail distribution list.
Stock listing The registered shares of Ypsomed Holding AG are traded at the SIX Swiss Exchange and at the BX Bern eXchange. Ticker symbols: YPSN (Telekurs) YPSN.S (Reuters) YPSN SW (Bloomberg) Securities numer 1939 699 ISIN CH 001 939 699 0
Bank am Bellevue, Zürich (www.bellevue.ch), Dr. Sandra Künzle
CAI Cheuvreux, Zürich (www.cheuvreux.ch), Thomas Bernhardsgrütter Credit Suisse, Zürich (www.credit-suisse.com), Christoph Gretler Helvea SA, Zürich (www.helvea.com), Daniel Jelovcan Kepler Equities, Zürich (www.kepler-equities.com), Florian Gaiser Vontobel, Zürich (www.vontobel.com), Christoph Gubler Zürcher Kantonalbank, Zürich (www.zkb.ch), Sibylle Bischofberger Frick On our website at www.ypsomed.com (under Company/Investor) any interested person can access up to date and market relevant information (pull system) without charge. Furthermore any interested person can register at www.ypsomed.com/ ch/unternehmen/investoren/122.html (push system) to be added to an e-mailing list to receive the described publications about the company (push system). The official publication organ of Ypsomed Holding AG is the Swiss Official Gazette of Commerce (SOGC). Company publications which potentially relevance to the share price are usually communicated at the end of daily trading. Such publications are initially reported to the SIX Swiss Exchange Regulation and thereafter installed on the above mentioned website and simultaneously
Key forthcoming dates 28 June 2011
General Meeting of Shareholders, Bern 3 November, 2011
Press conference and presentation of the half-year figures 2011/12, Solothurn 22 May 2012
Press conference and presentation of the annual results 2011/12, Burgdorf
Corporate Governance
BZ-Bank, Wilen (www.bzbank.ch), Urban Fritsche
Contact Ypsomed Holding AG Daniel Kusio, Head of Investor & Public Relations Ursula Rytz, Head of Communication Services Phone +41 34 424 41 43 Telefax +41 34 424 41 55 www.ypsomed.com investor@ypsomed.com
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Ypsomed – Glossary
Glossary
Ampule / Cartridge A drug reservoir containing the drug to be administered used with, for example, reusable pens. Some substances need pens with two-chamber cartridges, which contain lyophilized drug and diluent that are mixed automatically in the pen before use. (See also Cartridge) Amylin Hormone produced together with insulin in the pancreas. Like insulin, it is no longer produced in the case of a functional inability of the pancreas. According to latest research, amylin complements the effect of insulin in the treatment of diabetes and allows the blood sugar level to be controlled more effectively. Anemia Anemia means an insufficiency of blood. This can manifest itself in a reduction in hemoglobin concentration (red blood pigment), in the hematocrit (measurement of blood thickness, packed cell volume) and / or in the number of erythrocytes (red blood cells) in the blood compared with the age norm. Among its effects is a reduction in the transport capacity for oxygen in the blood. The classic symptoms include loss of energy and rapid fatigue as well as pallor, fatigue, breathlessness and palpitations (the heart beats irregularly, faster or more forcefully than it should in relation to the level of activity demanded of it). Anemia can have a number of different causes. Auto-injector In auto-injectors, needle insertion into the skin and / or injection of the drug are automatic, usually being driven by means of a spring mechanism. Biomolecule injectables Drugs manufactured using biotechnology. Such biomolecules cannot be delivered using traditional methods (e. g. orally) because they would be destroyed by the digestive tract and thus require the injectable route of administration. Biosimilar The term “biosimilar” refers to a protein-based mimetic drug that has been produced using biotechnology and which is approved after the expiration of the patent period of an original active substance. Unlike the classic drugs defined in terms of molecular structure, the active substances of these novel biotechnology products are not completely identical to the original active substance and therefore require more extensive approval and monitoring procedures than the classic generics. The main reasons for these differences are the different organisms (for example E. coli bacteria) on which the target protein is expressed, and the different methods applied, such as separation and cleansing. Blood sugar (blood glucose) Blood sugar means, in general, the level of glucose in the blood. Glucose is an important source of energy for the body and represents a significant measured value in medicine. If the blood sugar is high over a sustained period of time (hyperglycemia), diabetes mellitus typically exists. In intensified insulin therapy, the blood sugar or blood glucose should be measured at least four times a day so that the amount of insulin administered can be adjusted to actual requirements. A person’s insulin requirements change over the course of the day due to the varying levels of hormones that influence blood sugar, the consumption of food, physical activity or febrile infectious diseases.
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Blood sugar monitoring (blood glucose monitoring) Diabetics normally measure their blood sugar levels themselves using a portable blood sugar monitor. To carry out the measurement, a small blood sample must first be placed on a test strip. Through an enzymatic reaction with the test strip, the blood sugar is converted into a measurable product that is then measured on the basis of a photometric or an electrochemical process and displayed by the monitoring device. In the case of intensive insulin therapy, the measuring of the blood sugar takes place a minimum of four times daily. Cannula See Pen needle. Cartridge A drug reservoir containing the drug to be administered used with, for example, reusable pens. Some substances need pens with two-chamber cartridges that contain a lyophilized drug and diluent that are mixed automatically in the pen before use. (See also Ampule / Cartridge) CM (Contract Manufacturing) Contract Manufacturing refers to the assigning of several or individual stages in the manufacture of a product to a contractor (outsourcing manufacturing). There are cost benefits for the OEM / ODM manufacturer as the infrastructure is not just utilized for a single product line / assembly line or product, but for several manufacturers or products. The specialization of the contractor with specific infrastructure leads to larger production volumes (numbers of units). Thus both parties benefit. Compliance In medicine we talk about the compliance of the patient. This means that, in many illnesses, for healing to occur the patient must have a cooperative attitude. In the medical sense, compliance can therefore be described as sticking to one’s therapy, taking one’s medicine as prescribed; in short, following the doctor’s recommendations. Compliance is particularly important for diabetics with regard to taking their medicine, following a diet or making lifestyle changes. CO 2 equivalent Indicator of the greenhouse gas potential of substances in the earth’s atmosphere, such as methane (CH 4), nitrous oxide (N 2O), HCFC / CFC or sulfur hexafluoride (SF6). The greenhouse effect of carbon dioxide serves as a reference value. Calculations use factors as defined in IPC C2001. Depot formulation “Depot form / formulation” is synonymous with the terms “long-acting” or “sustained release formulation”; in other words, the fact that the substance that is taken orally or with an injection is released into the bloodstream in a delayed manner e. g. in order to achieve a longer duration of effect or to permit an active ingredient to be supplied on a continuous basis.
Ypsomed – Glossary
Dual chamber ampule The dual chamber ampule was developed primarily for lyophilized substances. Dual chamber technology enables efficient use of the active substance through careful product reconstitution. The dual chamber technology was thus designed specifically for sensitive drugs that are preserved through freeze drying. One of the two chambers contains the lyophilized active substance (freeze-dried active substance) and the other contains the solvent. The two are mixed together only immediately before use. This “all-in-one” design facilitates both a higher degree of accuracy in dosage and easier handling. EIP (Environmental impact points) Quantitative expression of environmental impact in the form of a measurement based on the principle of ecological scarcity. Environmental impact points are determined on the basis of the extent to which environmental quality targets for air, water, soil and resources have been met. EPO (erythropoietin) Natural hormone mainly produced by the kidney that regulates the formation of red blood cells (erythrocytes) in the bone marrow. FDA (Food and Drug Administration) US health agency. FSH (follicle-stimulating hormone) FSH is a germ line hormone (a hormone excreted by the anterior pituitary gland and placenta) that stimulates follicle growth in females and activates sperm-forming cells in males. FSH is used for treating infertility.
GLP-1 Glucagon-like peptide-1 (GLP-1) is a peptide hormone formed in the intestines that plays an important part in glucose metabolism as part of the “incretin effect” – the insulin response of beta cells in the pancreas to the supply of sugar through the intestines and the blood. GLP-1 is released directly into the bloodstream when food is eaten. It is broken down within minutes by the enzyme dipeptidyl peptidase-4 (DPP-4) and therefore must be constantly produced. It stimulates the production of insulin in the pancreas and slows the emptying of the stomach contents into the intestine, thereby suppressing hunger pangs and thirst. It also reduces glucagon levels. Glucagon helps the release and synthesis of glucose from the liver. In this way, secretion in sufficient quantities or subcutaneous injection of GLP-1 prevents excessively high levels of blood sugar. Greenhouse gases Gases in the air that contribute to climate change (global warming) and that may be of either natural or anthropogenic origin. They emit thermal radiation corresponding to their temperature (infrared radiation) that acts as atmospheric counter-radiation and heats the surface of the earth in addition to the heat from sunlight. On the other hand, greenhouse gases also absorb some of the infrared radiation given off by the earth that would otherwise escape into space. hGH (human growth hormone – somatotropin) One of the body’s natural hormones used today primarily to treat growth disorders. Heparin Medication with anticoagulation properties. An anticoagulant is a substance that delays or stops blood clotting. Hyperglycemia Hyperglycemia (excess sugar) is an increased blood sugar value (glucose value) with clinical values above 110 mg / dl (6.1 mmol / l) on an empty stomach or above 140 mg / dl (7.8 mmol / l) two hours after eating. The cause of the hyperglycemia is a relative or absolute insulin deficiency (diabetes mellitus). This has the effect that the glucose cannot be transported from the blood into the cells and at the same time glucose is released from the liver, for example. The result: blood sugar increases. The body attempts to excrete the blood sugar through the kidneys, thereby losing vital amounts of liquid, and affected parties react with strong thirst and frequent urination. Slight increases in blood sugar remain unnoticed for the most part because the initial symptoms, such as fatigue and lethargy, are not recognized as resulting from high levels of blood sugar. A complete insulin deficiency and a prolonged increase in blood sugar may lead to nausea, vomiting, a smell of acetone on the breath, the appearance of glucose and acetone in the urine and finally to a life-threatening diabetic coma. Insulin is administered and the intake of liquids is increased for the treatment of hyperglycemia. Hypoglycemia Hypoglycemia is low blood sugar with a blood sugar value of less than 40 mg / dl (2.2 mmol / l) without the presence of symptoms. Hypoglycemia can occur in all diabetics who are treated with sulfonylurea, glinide or insulin. Low blood sugar can occur when the factors reducing blood sugar (e. g. insulin, tablet effectiveness, physical activity) outweigh the factors increasing blood sugar (e. g. food intake, sugar regeneration in the liver). The symptoms include, among other things, trembling and sweating, increased appetite, headaches, weakness, a loss of concentration and blurred vision. It can be treated by the immediate administration of glucose or drinking fruit juice. Severe hypoglycemia can lead to unconsciousness and requires immediate medical attention.
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Glossary
Diabetes mellitus Diabetes mellitus is a chronic metabolic disorder involving increased blood sugar levels. In people with diabetes mellitus, the blood sugar is no longer absorbed from blood cells in the requisite quantity for the production of energy. As a result, there is excess glucose in the blood (hyperglycemia / excess sugar), which is then excreted in part through the kidneys. In Type 1 diabetes mellitus, the body produces insufficient insulin, if any insulin at all (absolute insulin deficiency), because most or all of the insulin-producing cells in the pancreas have become damaged by an autoimmune disease. It generally manifests itself in persons up to 35 years old and requires the regular subcutaneous administration (injection) of insulin. Type 1 diabetes mellitus accounts for about 10 % of all case of diabetes mellitus and, thanks to its clear principal symptoms, is generally correctly diagnosed and treated by physicians. In Type 2 diabetes mellitus, which is much more common, the pancreas continues to produce insulin, however its effectiveness is reduced by an insulin resistance (insulin insensitivity) of the somatic cells. As a rule, this leads to an increased release of insulin (hyperinsulin anemia) in order to compensate for the deficient insulin effectiveness. Risk factors, such as being overweight or lack of exercise, promote the development of Type 2 diabetes, therefore it frequently has the designation of an illness of affluence. Type 2 diabetes mellitus is generally diagnosed in people over the age of 40 and who are overweight. As a first step, it is often successfully treated by following a healthy diet and by getting more physical exercise. In later phases, tablets and insulin injections may be considered. According to estimates, about half of all people who currently have Type 2 diabetes mellitus are unaware of that fact. If both types of diabetes are not diagnosed at an early stage or if they are inadequately treated, this can lead to serious secondary diseases affecting the kidneys, nerves, eyes or blood vessels.
Ypsomed – Glossary
Incretins Incretins are hormones produced in the small intestine (peptide hormones) that are released after food is eaten and stimulate insulin secretion by the pancreas. At the same time, they prevent the insulin antagonist, glucagon, from being released. Patients with Type 2 diabetes release lower levels of incretin than healthy individuals. The incretins GLP-1 (glucagon-like peptide-1) and GIP (gastric inhibitor peptide) are of particular interest in the treatment of diabetes. There are two new classes of drugs that act on incretin metabolism: the “incretin mimetics” that imitate the action of incretins, and the “DPP-4 inhibitors” that delay the breakdown of endogenous incretins. Injection Administration of liquid substances with a syringe. Injection systems / injection devices Injection systems or injection devices include self-injection devices such as pens and auto-injectors as well as pen needles. Insulin A vital peptide hormone that is produced by the pancreas in the beta cells of the islets of Langerhans. The primary effect of insulin is the fast reduction of the blood sugar concentration in that it supports the transport of glucose from the blood into the cells’ interior. Insulin was first discovered in 1921 by two Canadians, Dr. Frederick Banting and Charles Best, and has since been used to treat diabetes. Today, it is produced mainly by means of biotechnological processes and must be either injected or infused. It cannot be administered orally because the peptide hormone insulin would be destroyed by gastric acid. Insulin analogs Insulin analogs are insulins with a modified amino acid sequence that have an altered metabolization compared with human insulin. The motivation for developing insulin analogs was to improve the ability to control the insulin treatment. In the case of normal insulin, the effect sets in after about 30 minutes, and the maximum effect is reached after 1 to 2 hours. Through the exchange of certain amino acids, the metabolization (pharmacokinetics) of the insulin can be altered without affecting its action, i. e. binding to the insulin receptors. Insulin pump Insulin pumps are small, battery-operated devices (about the size of a pager or cell phone) that can replace regular insulin injections for patients managing diabetes. They contain an insulin ampoule / cartridge with fast-acting insulin. The insulin is delivered at regular intervals into the subcutaneous fatty tissue of the body by means of a catheter, for which the cannula is under the skin. The catheter and cannula are changed every 1 to 3 days. The infusion pump allows for an almost normal adjustment of blood sugar by continuously delivering small doses of insulin, preprogrammed by the patient, around the clock, even while a patient sleeps. In addition, the patient can deliver additional insulin doses at the touch of a button in order to be able to cover additional insulin requirements, for example at meals. The treatment with an insulin pump requires the patient to continue to take regular blood sugar measurements so that the insulin dose can be adjusted, if necessary.
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Insulin patch pumps Patch pumps represent a new generation of pumps; patch pumps are disposable pumps usable for up to three days, after which they are disposed of. They consist of a plastic case containing the insulin reservoir, and, with a small cannula that is placed under the skin, are adhered directly to the body. The tubing system connecting the pump and body is therefore no longer required. The pump system is operated via a remote control that is carried externally. The first patch pump available on the American market was the Omnipod ®, which will be distributed in Europe from June 2010 as the mylife OmniPod. Interferon alpha Interferons play an important role as messengers and cues for different defense mechanisms in the immune system. They are released by cells that are afflicted with viruses. In this way, defense cells of the immune system, such as macrophages, natural killer cells and cytocidal T lymphocytes, are activated. In addition, interferons inhibit the growth and the division of healthy as well as malignant cells. Alpha interferon is used for the treatment of acute and chronic hepatitis C infections. Lantus® Lantus ® from Sanofi-Aventis is a long-acting insulin analog injected one to two times daily that lowers glucose levels for up to 24 hours. Lantus ® is a basal insulin in that it provides for a slow and steady release of insulin. Monoclonal antibodies Monoclonal antibodies are highly specialized and targeted antibodies – active protein molecules that are produced by the immune system in response to a foreign substance (e. g. foreign bodies, pathogens) and can render it harmless – that are created synthetically using biotechnological processes. What is special about them is that they are able to activate the body’s own natural defense mechanisms to combat a disease. Until now, monoclonal antibodies have been used in cancer therapy in particular and for the suppression of adverse immune reactions, e. g. in cases of psoriasis. This may also involve autoimmune diseases or even the prevention of rejection reactions after organ transplants.
Ypsomed – Glossary
ODM (Original Design Manufacturer) A company is described as an Original Design Manufacturer (ODM) if it undertakes make-to-order production for another company. An ODM manufactures products commissioned by other companies, some of which it develops itself. The products are then sold under the buying company’s brand name. This method enables a customer of an ODM to offer branded products without having to run its own factory for this product. “Design” is significant in the definition of an ODM, as an ODM also carries out the planning and design of the parts produced. This is in contrast to a CM (Contract Manufacturer), which only undertakes the make-to-order production. Oncology The branch of medicine / science concerned with the prevention, diagnosis, treatment, follow-up care and study of cancer / tumor diseases.
Thrombosis Thrombosis is the presence or accumulation of a blood clot (thrombus) in a blood vessel. In principle, thrombosis can develop in all vessels (arteries, veins). Colloquially, however, we commonly refer to thrombosis of the deep leg veins even when we mean phlebothrombosis. Arterial thrombosis occurs significantly less frequently. An embolism is a dangerous complication of thrombosis. In this case, the thrombosis has detached from its point of origin in the vessel and is transported (embolism) in the body through the blood flow. Should the embolism block a narrow point in the vascular system, the tissue behind the affected location will no longer be properly supplied with blood and will be damaged. This is called an infarction. Infarctions can damage all organs (myocardial infarction, apoplexy, pulmonary embolism).
Pen (injection pen) Injection device that externally looks like a fountain pen or ballpoint pen. The dose of medication prescribed by a doctor is set by adjusting a dosage knob and is injected from a cartridge through a cannula (pen needle) into the body. Pen needle (cannula) A fine hollow needle for one-time use attached to the tip of the injection pen in order to inject the drug into the body. Ypsomed’s pen needles feature a click-on mechanism that makes the pen needle easy to attach to the pen. Psoriasis Psoriasis is a non-communicable autoimmune disorder that affects the skin, resulting in lesions over various areas of the body. The most common form (accounting for 80 % of all cases) is plaque psoriasis, characterized by red, raised skin covered with scales. /™ The ® or ™ symbols, when used in this document, indicate that the relevant name is a registered trademark of the relevant pharma partner of Ypsomed or Ypsomed itself. ®
Rheumatoid arthritis Rheumatoid arthritis (also chronic polyarthritis) is the most common condition that leads to inflammation in the lining of the joints. Most commonly, the chronic condition develops episodically, with an episode lasting typically between several weeks and a few months. The pain recedes between individual episodes. The cause of the condition has not been fully explained although it is thought to result from an autoimmune condition. Self-injection devices When used in this document, self-injection devices include pens (disposable, reusable and semi-disposable pens), auto-injectors, motor-driven injection systems, safety products, and needle-free technology.
Glossary
Subcutaneous (from Lat. sub = under, cutis = skin, abbr. s. c.) A subcutaneous injection is an injection into the fatty tissue under the skin. Using pens or other injection systems, drugs can, for example, be administered intramuscularly, subcutaneously or intravenously.
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Editor: Ypsomed Holding AG, Burgdorf Concept & Design: KOMET Werbeagentur AG BSW, Bern www.komet.ch Photos: Maurice Haas, Zurich Printing: Stämpfli Publikationen AG, Bern
The Group publishes Annual Reports in English and German. The German version is legally binding.
Disclaimer This annual report contains certain forward-looking statements. These can be identified by terms such as “should”, “accept”, “expect”, “anticipate”, “intend” or similar terms and phrases. The actual future results may differ materially from the forward-looking statements in this annual report, due to various factors such as legal and regulatory developments, exchange rate fluctuations, changes in market conditions, as well as the activities of competitors, the non-introduction or delayed introduction of new products for various reasons, risks in the development of new products, interruptions to production, the loss of or inability to obtain intellectual property, litigation and administrative proceedings, adverse publicity and news coverage. The people pictured are taken partly from agency photographs; their biographies and testimonials are fictitious. Links to third party websites and other references to the information of third parties are offered as a courtesy; we accept no responsibility for any third party information. All product names mentioned in this report are trademarks owned by or licensed to the Ypsomed Group. Third-party trademarks are marked with ® combined with the product name.
Ypsomed Holding AG
Brunnmattstrasse 6 Postfach 3401 Burgdorf Switzerland Phone +41 34 424 41 11 Fax +41 34 424 41 22 www.ypsomed.com info@ypsomed.com