Ypsomed Holding AG

Annual Report • May 16, 2023

Ypsomed Holding AG

Annual Report 2022/23

The Ypsomed Group is a leading developer and manufacturer of injection and infusion systems for self-medication and a renowned diabetes specialist with more than 35 years' experience. As a leader in innovation and technology, Ypsomed is the preferred partner for pharmaceutical and biotech companies for the supply of injections pens, autoinjectors and infusion systems to administer liquid drugs. Ypsomed promotes and sells its product portfolio under the umbrella brands, mylife Diabetescare directly to patients or through pharmacies and clinics, and under YDS Ypsomed Delivery Systems as business-to-business to pharmaceutical companies.

Ypsomed has its headquarters in Burgdorf, Switzerland, and operates a global network of manufacturing sites, subsidiaries and distributors. The Ypsomed Group employs over 2 000 employees.

Table of content 5

Table of content

• 6 Key figures
• 8 Letter to shareholders
• 12 Engagement
• 14 Innovation & Digital Health
• Ongoing development and digitisation
• mylife Loop is a game changer for people with diabetes
• We need to manage our growth in a responsible manner
• 22 Access & Expansion
• Access to easy and high-quality self-medication
• New options for injecting drugs with large volumes
• Treating obesity as a chronic disease
• 30 Responsibility & Engagement
• On course in sustainability
• Towards net zero emissions with sustainable plastics
• 42 Platforms & Operational Excellence
• Increasing availability and expanding cost leadership
• 46 Energy generation and energy efficiency at the Schwerin site (DE)
• Groundbreaking in China
• 50 Financial report
• 52 Profitable growth
• Consolidated income statement
• Consolidated balance sheet
• 56 Consolidated statement of cash flows
• Consolidated statement of changes in equity
• 58 Basis for the consolidated financial statements
• Alternative Performance Measures
• 65 Notes to the consolidated financial statements
• Statutory closing of Ypsomed Holding AG
• Multi-year overview
• 98 Corporate Governance
• Capital structure
• Shareholder structure
• Board of Directors
• Executive Board
• Remuneration, participations and loans
• Shareholders' rights of participation
• Change of control and blocking mechanisms
• Auditors
• Information policy
• Remuneration Report

Key figures

Contribution continuing

business

Turnover Ypsomed Diabetes Care

2021/22

Turnover Ypsomed Delivery Systems

■ EBIT at group level

Employee headcount

• 1 CO₂-eq emissions Scope 1 and 2 according to Greenhouse Gas Protocol
• 2 DiaExpert GmbH sold as per 31 December 2022
• 3 Retroactive corrections

Growth and increasing profitability Letter to shareholders

Dear shareholders, valued partners

The global supply chains remain fragile and will continue to be so in the years to come. With the outbreak of war in the Ukraine, we have been confronted with new, long forgotten challenges. After more than two decades, we are once again experiencing inflation as a relevant factor in our everyday professional and private lives, and even Europe's energy supply is no longer considered to be unconditionally secure. We are therefore all the more pleased that even under these difficult conditions we were able to meet our considerable social responsibility towards millions of people with chronic conditions and were able to deliver at all times and without any production bottlenecks. We look back on a successful year.

Strengthening the role of employees

On the one hand, our success is based on our fully automated manufacturing processes as well as our highly integrated value chain. On the other, sustainable success also requires a highly motivated and broad-based team. We have spent the last 18 months establishing decision-making competencies and corporate responsibility more deeply and thus more broadly throughout the organisation. In this process, we are relying on result-oriented units that can react more flexibly to market needs and can manage our expected growth more easily from an organisational point of view. This has allowed us to lay important groundwork which will enable us to continue to adapt to a changing environment at all times.

Gilbert Achermann, Chairman of the Board of Directors Simon Michel, Chief Executive Officer

Successful capacity expansion at Ypsomed Delivery Systems

We achieved a record result in the Delivery Systems division. The driving forces are our two most important platform product families, the pens and autoinjectors. Pens are mainly sold to providers of biosimilars in the field of diabetes. In this context, we are proud to be able to make an important contribution to providing global access to affordable insulin.

Our autoinjectors are mainly used by large pharmaceutical companies for selfcare with modern originator drugs. The YpsoMate 2.25 made a particularly encouraging contribution to growth in the past financial year. Together with our pharmaceutical partners, we were able to commercially launch a third drug in our autoinjector for larger volumes. The product in question is a treatment for severe asthma which proactively reduces inflammation. For those affected, this means fewer asthma attacks, better breathing and improved lung function.

We are constantly advancing our family of autoinjectors. Following our CO2-neutral YpsoMate Zero and our YpsoMate On with integrated connectivity of previous years, the latest addition is the YpsoMate 5.5 for volumes up to 5.5 ml. By injecting larger volumes, this larger autoinjector opens the way for the use of new medicines in selfcare. Thus, our autoinjectors can also be used, for example for cancer treatment in a domestic environment in the future.

New projects acquisition continues to be very successful and contributes significantly to our further medium and long-term growth potential. We were able to conclude 35 new project orders with existing and new pharmaceutical customers in the past financial year. These included very promising indications such as obesity, non-alcoholic fatty liver disease and other metabolic diseases.

At the same time, we are pressing ahead with the further development of our portfolio. In cooperation, we develop offers for digital therapeutic solutions and keep expanding our portfolio with innovative services in the area of sustainability.

Successful partnerships in Ypsomed Diabetes Care

Based on our partnerships, success has now also been achieved in the business with our mylife YpsoPump insulin pump. We were able to more than double commercial sales with the YpsoPump last year. Our partner CamDiab provides a world-leading, hybrid closed loop solution that enables users of our mylife YpsoPump to benefit from a unique, self-learning and adaptive algorithm that runs on a smartphone. With mylife Loop, consisting of the mylife YpsoPump and the mylife CamAPS FX app, Ypsomed offers the world's only automatic insulin delivery system which can be combined with both the Dexcom G6 sensor as well as the FreeStyle Libre 3 sensor from Abbott.

For people with diabetes, it is important to reduce the daily burden of diabetes management. mylife Loop makes a significant contribution to this. The most recent example is the Companion feature, which allows parents to view all relevant therapy data of their child via their smartphone at all times. In the second half of 2023, we expect to offer our mylife Loop service on iOS for Apple users.

In December 2022, Eli Lilly terminated the collaboration for the launch of the YpsoPump in America. Even though this was initially a disappointment for us, we see new possibilities and opportunities for access to the challenging American insulin pump market due to promising discussions with other interested partners. We will be reviewing and evaluating these new opportunities in the coming months. In the meantime, we are continuing the approval process with the US Food and Drug Administration (FDA) as planned.

In June 2022, Sébastien Delarive joined us as Chief Business Officer Diabetes Care. He and his newly organised team have managed to bring about huge improvements for people with diabetes in a short time, speeding up product design and making development much more agile. We exceeded the interim target of 30000 active users at the end of the financial year and can thus see clear signs back to profitability in the pump business.

Continued growth investments

Strong growth, especially in the Delivery Systems segment, is based on the successful and flexible capacity expansion at our production plant in Schwerin, Germany. Automation and modularity as the core of our production strategy are prerequisites for the easy scalability of our capacities. Due to the increasing demand, we will continuously expand our production capacities, particularly in Schwerin, over the coming years.

We are also pursuing this proven approach of extending our workbench to our new manufacturing site in China. By building a new plant there, we will be able to efficiently serve the rapidly growing Chinese market. The new location in China has no negative impact on the existing facilities in Switzerland. Freed up capacities in Solothurn will be used for customers who are geographically closer to us.

The review of the portfolio is ongoing

In the past financial year, we successfully completed the sale of DiaExpert. The stronger focus of our portfolio on the development, manufacture and distribution of our own products will help us to consistently exploit the growth opportunities in the area of injection systems and for our insulin pump. With this in mind, it is our strategic task to continue reviewing our broad portfolio on an ongoing basis.

Vision Ypsomed 2030

Based on our recurring business for people with chronic conditions, we see a clear and very encouraging development path ahead of us for the next five years. We exploit this positive operational momentum to focus more on our long-term strategic options. We have embarked on an in-house programme to look at opportunities with a view to the year 2030. This strategy programme is intent on finding and developing new areas of business that will allow us to build on our strong position and therefore enable sustainable growth in the future. Here we rely on the knowledge and competence of 30 of our own employees, who are mentored by the IMD in Lausanne. Our approach is based on systematically fostering creativity and diversity of ideas within our company, rather than bringing outside consultants in-house.

Corporate responsibility

Our corporate strategy focuses on sustainability and contributes to the United Nations' Sustainable Development Goals (SDGs). In the past financial year, we placed a strong focus on the intensified development of our ambitious climate programme. In our comprehensive Corporate Zero programme, we take into account scientific and established guidelines according to the Science Based Target initiative (SBTi). To implement our goals, we have defined concrete short- and medium-term reduction targets across the entire value chain and submitted these to the SBTi in spring 2023. We clearly see ourselves in a pioneering role for our industry here.

Our environmental management system was successfully certified according to the international standard ISO 14001. Manufacturing was ISCC+ certified. This refers to an international standard under which we can process granulates from biomaterials and pass on our products with this certification.

In the interests of our sustainable dividend policy, the Board of Directors will propose to the Annual General Meeting that CHF 1.30 per registered share be distributed in dividends for the financial year 2022/23 (previous year: CHF 0.60), half of which from capital contribution reserves and the other half from retained earnings.

We see that our efforts to achieve profitable and sustainable growth are paying off. Our positive assessment of the medium to long-term business performance has been confirmed. An important step was the very successfully completed increase in capital, with which we were able to significantly expand our financial flexibility and resilience. It was strongly supported by our existing shareholders. We regard this as an extraordinary sign of trust.

We wish to thank all our employees, who have worked tirelessly for the well-being of people with chronic conditions and who have contributed to our success. On behalf of the Board of Directors, our sincere thanks also go to our partners and shareholders for their continued support and their confidence in our company.

Gilbert Achermann

Chairman of the Board of Directors

Simon Michel

Chief Executive Officer

Our corporate responsibility Sustainable value creation

Three years ago, we integrated sustainability as the fourth pillar of our corporate strategy. For us, this has not changed our business practices or our attitudes. After all, we have always been a sustainably oriented company committed to responsibility toward society.

As a company which thinks long-term, sustainable action has always been one of our basic principles. Since the integration in our corporate strategy, we now view sustainability holistically within all business activities and business units. This means that we assign sustainability to our strategic pillars and integrate it into the overall report. As a result, since 2020/21 we have been applying an integrated reporting with a framework of measurable sustainability targets and outlining our progress. Here, we are guided by the principles of the Global Reporting Initiative (GRI) and the Sustainable Development Goals (SDGs) of the United Nations.

Materiality analysis (2020)

In our financial year 2020/21, we further developed our sustainability programme into an integrated, sustainable corporate strategy. To do this, we first conducted a materiality analysis to determine both the relevance for our stakeholders as well as the business relevance of 24 social, environmental and economic issues. In terms of stakeholder relevance, we surveyed customers, investors, suppliers and representatives from politics and nongovernmental organisations. Internal representatives from management and employees assessed the impact of these issues on the company's success. This resulted in a comprehensive overview of the issues which are key to our sustainability strategy. A total of 201 stakeholders participated in the materiality analysis (169 external/ 32 internal). The analysis will be repeated in the financial year 2023/24.

Our understanding of what is key: we consider social, environmental and economic issues to be key if they substantially shape the views and decisions of our stakeholders and thus impact the success of our business.

Based on the analysis, we defined the twelve sustainability issues most relevant to us:

Relevance from Ypsomed's point of view

Innovation & Digital Health

• 1 Innovative technologies
• 2 Digitisation in healthcare

Access & Expansion

• 3 Availability & affordability of healthcare
• 4 Product quality & safety
• 5 Patients' health & life quality

Responsibility & Engagement

• 6 Climate change & energy
• 7 Resource efficiency, recyclability & waste
• 8 Corporate governance & compliance
• 9 Human rights
• 10 Data privacy & security
• 11 Working conditions & employee satisfaction

Platforms & Operational Excellence

12 Long-term profitability

For these twelve essential topics, we ensure an explicit management process, which means that we have defined responsibilities for the topics, established the goals and introduced measures. As we continuously review their implementation and progress, the topics are firmly embedded in our processes. In our integrated report, we inform on our performance and progress in the twelve relevant sustainability topics and explain how we promote sustainability throughout the company.

The remaining twelve sustainability topics were assessed as comparatively less relevant for Ypsomed (e.g. biodiversity, water consumption/waste water, air pollutants) and are therefore not addressed as a priority.

Sustainable corporate strategy

Our corporate strategy already focuses on sustainability and contributes to the United Nations' Sustainable Development Goals (SDGs). Our ambitions for 2025 will further increase our commitment.

We strive to play a pioneering role in our industry in terms of sustainability. To this purpose, we examine the environmental, social and economic impact of our value chain on society.

Our processes and supply chains are guided by the principles of product stewardship and the circular economy. And we have set ourselves the ambitious goal of becoming a net zero company by 2040. This means we aim for net zero carbon dioxide emissions along our entire value chain

In this respect, we attach great importance to acting responsibly towards employees, partners and society. In doing so, we are committed to transparency, support diversity and openness and take measures against corruption.

We ensure that we are profitable in the long-term and can sustainably make our system-relevant contribution to society.

Our integrated sustainable corporate strategy

	Our impact	Sustainable Development Goals (SDGs) 1
Innovation & Digital Health	Innovative and evidence-based healthcare Digital therapy management and optimal therapy outcomes Advanced solutions in our industry (technology leadership)
Access & Expansion	Establishing as a global provider of self-medication Access to innovative medicines and biosimilars Improving patients' quality of life
Responsibility & Engagement	Reduction of environmental footprint Fostering of circular economy Acting responsibly towards employees, partners and society
Platforms & Operational Excellence	Reduced risk and short time to market Cost leadership due to scaling effects Lean management and agility

¹ See sdgs.un.org/goals

Scope of Ypsomed's reporting on sustainable corporate strategy: in principle, the corporate strategy covers all companies in the Ypsomed Group. However, Ypsomed AG and its subsidiaries are the most relevant. Unless otherwise stated, the performance and KPI information refers to Ypsomed AG and its subsidiaries.

Our investment in research and development is above average.

When developing our new technologies, the focus is on added value for those affected, the customers and society.

Ongoing development and digitisation

Digitisation has also conquered the healthcare system as its benefits became vividly apparent. We regard ourselves as an innovation leader in our market. We defend this position through product innovation in regard to the handling, the materials as well as the application capabilities of our devices. In addition, we want to continue shaping the market by expanding our portfolio with digital solutions for successful therapies.

Highlights 2022/23

• Successful launch of our advanced and modular mylife Loop automated insulin delivery system (AID) for insulin pump therapy that runs from the personal smartphone
• Offering the worldwide first automated insulin delivery solution authorised to work with the Freestyle Libre 3 from Abbott, giving people with diabetes freedom of choice for the first time
• 30% increase in smart solutions users
• 115 additional highly qualified employees in research and development

Innovation for easy self-medication and improved quality of life

392

in-house employees in research and development "Innovation & Digital Health" embraces the consistent further development of our products and services. Furthermore, we are also expanding our portfolio with digital services. We are convinced that the future of self-medication will rely heavily on networked devices and data-based systems as digital assistants.

Millions of people with chronic diseases use our products for self-medication purposes. We already have a portfolio of networked devices that make self-medication easier for users. These devices form the basis for new care and support models which help to relieve the burden on the healthcare system and make it more efficient.

Smartphone-based therapy management is the future of diabetes treatment. The mylife YpsoPump insulin pump, the mylife CamAPS FX mobile application and the Dexcom G6 or FreeStyle Libre 3 Continuous Glucose Monitoring (CGM) system combine for an automated insulin delivery system managed directly from your smartphone. We will consistently develop this system further in the coming years.

As a manufacturer of injection and infusion systems, we believe it is our duty to play a pioneering role and actively shape developments on the market. This includes the ongoing improvement and adaptation of existing products, as well as the development of new technologies and additional services for an active therapy support. This enables us to offer both our pharmaceutical customers and the end users of our products and services additional options and the evidence-based added value in the management of therapies.

Digitisation at Ypsomed

Digitisation changes the demands of patients and influences their behaviour. It offers the opportunity to gain a deeper understanding of specific therapy needs and demands from the data. At the same time, digitisation promotes a new understanding of the stakeholders' roles.

For us, digitisation means:

• application of digital technologies to increase therapeutic success
• collaboration with partners outside traditional industry boundaries
• creation of new mechanisms for patient interaction with users and stakeholder integration

Even though the requirements of our customers in the areas of Delivery Systems and Diabetes Care differ, they have one thing in common: everyone benefits from networked, intelligent platforms which help to improve adherence to therapy and the quality of life, the users, healthcare professionals, pharmaceutical companies, healthcare systems, health insurance funds, society and, last but not least, the environment.

Digital eco-systems for self-treatment:

• improve the quality of patients' life
• facilitate self-therapy as well as accompanying remote therapy
• enable therapy monitoring for users, physicians and caregivers
• make it easier to access healthcare anywhere and anytime
• improve overall therapy adherence, which improves therapeutic outcomes

Innovative technologies and solutions form integral parts of Ypsomed's endeavours. This is why we are increasing our efforts, particularly in the development of innovations and the expansion of technical expertise. Owing to our active patent strategy, we are the technology and innovation leader in the industry. A position we are continuing to strengthen. And in doing so, we ensure that our products and services always offer added value.

Ambitions 2025

Our innovative and smart solutions for self-medication improve adherence and increase therapeutic success.

Performance, KPI	2019/20	2020/21	2021/22	2022/23	Target 2025/26
Number of active users of smart solutions	20300	27800	41100	53780	200000
Total R&D staff (number)	179	228	277	392
Patents (number of first applications)	24	25	36	24
Patents (number of invention disclosures)	33	44	35	37

mylife Loop is a game changer for people with diabetes

"Welcome to the future!" – With these words, Professor Dr. Lutz Heinemann welcomed the participants of the Ypsomed Symposium at the ATTD Congress in Berlin at the end of February 2023. Whereas groundbreaking developments in this field were only promised in the past, they have now become a reality with the introduction of automated insulin delivery (AID) systems, Heinemann said. These hybrid closedloop solutions are a game changer for people with diabetes, he said, as they enable better treatment outcomes and a significant reduction in the burdens of everyday life.

In early summer last year, we launched our modular, smartphone-based therapy management solution mylife Loop together with CamDiab Ltd. mylife Loop combines the mylife YpsoPump, the mylife CamAPS FX and the Dexcom G6 sensor for continuous glucose monitoring (CGM) and has now been launched in many European countries and Australia. A further user option was added at the end of 2022 with the integration of the FreeStyle Libre 3 from Abbott. This is currently marketed in Germany, Switzerland, the Netherlands and the United Kingdom, with other countries to follow.

mylife Loop was developed to create an intelligent, automated process for insulin dosing based on real-time glucose data for people with type 1 diabetes. Here, the glucose values are measured every 8 to 12 minutes, and on this basis the mylife CamAPS FX app optimises the patient's individual insulin requirements.

The mylife YpsoPump and the mylife CamAPS FX app currently form the only automatic insulin delivery system which can be combined with both the Dexcom G6 sensor as well as the FreeStyle Libre 3 sensor from Abbott. At present, the mylife Loop can be used on Android smartphones; the app is expected to be available for Apple iOS in the second half of 2023.

Better therapy outcomes and quality of life

The mylife CamAPS FX app is the brain of the mylife Loop solution. The underlying algorithm was developed by Professor Roman Hovorka at Cambridge University. It has been comprehensively tested in clinical trials and the results have been published in leading international medical journals. It is currently the only intelligent and self-learning algorithm that is already approved for children from the age of one and for pregnant women. In combination with the Dexcom G6 it can be used for children from the age of two years, in combination with the FreeStyle Libre 3 it is suitable for children from the age of four years. To start, all you need to do is enter the body weight and average daily insulin dose as well as complete the bolus calculator settings. The algorithm automatically collects all other therapy data: it measures the glucose values, controls the insulin dosage and creates forecasts based on the collected data.

As Professor Hovorka demonstrated with a real-world analysis of CamAPS FX, the glucose levels improved across all user groups, while automatic insulin delivery ("closed loop") was active on both sensors on average for some 95% of the time. Significant improvements were observed particularly in young children who need to be monitored very closely.1 Hovorka explained: "Parents cannot adjust the dosage every ten minutes, the way the system does automatically."

For users, the fact that they can pass on part of the burden of therapy management to the AID solution and only occasionally have to intervene manually, for example at mealtimes, also plays an important role. Conventional diabetes management used to take up a lot of time, sometimes around the clock. Until now, parents of children with diabetes had to check their child's glucose level several times during the night. mylife Loop keeps the glucose level stable during the night and triggers an alarm if it falls below a predefined value. This gives parents and affected persons greater security, which in turn leads to a more restful sleep.2

The best AID system is the one that is used

All components of the mylife Loop solution are designed to be as simple and safe as possible and contribute to user-friendly handling in their entirety. As a result, the mylife YpsoPump is the lightest and smallest tube insulin pump on the market, designed for easy use with a menu navigation reduced to the essentials. The mylife CamAPS FX app, was also designed to be as simple as possible. "The best AID system is one that patients use," says Hovorka. Nevertheless, various personal settings can be defined.

The number of new mylife Loop users increases every month. This is a sure sign that the offer meets the needs of people with diabetes. Sébastien Delarive, Chief Business Officer Ypsomed Diabetes Care, says, "We want to engineer miracles for people with diabetes by bringing together insulin, medical technology and digital applications. At the moment, we have one of the best solutions on the market and we will continue to improve and expand our offer."

New monitoring function for parents, partners and caregivers

An important extension to the mylife Loop solution was also presented at the ATTD Congress: parents, partners, and caregivers can follow the glucose and insulin data of their child or partner via the mylife CamAPS FX app on their own smartphone using the new monitoring function. The new "CamAPS Companion" feature thus gives relatives and caregivers greater control and security. Parents in particular benefit here to a great extent. They can view all relevant therapy data of their child via their smartphone at all times – no matter whether the child is at school, pursuing its hobbies or meeting up with friends. Parents report getting back part of their lives, being able to read a book again, go out as a couple and some even consider going back to work more. Even the affected children report that they sleep better. Their feedback is that they are more focused and in a better mood overall.2

Our well-attended booth at the ATTD Congress 2023 in Berlin

¹ Ware et al, NEJM 386: 209–219 (2022)

² Kimbel et al, Diab Res Clin Pract 2022)

We need to manage our growth in a responsible manner

Ulrike Bauer joined Disetronic in Switzerland in 2001 and has accompanied Ypsomed and its predecessor for more than two decades now. The 54-year-old has been a member of the Management Board since 2014 and heads the Delivery Systems business area. In this interview, Ulrike Bauer talks about the increasing internationalisation of Ypsomed, leadership in a growth environment and new challenges in the treatment of chronic diseases.

Ulrike, how did you come to work for Ypsomed?

I often travelled to Switzerland for my former employer and I always liked it here, especially the beautiful nature and the proximity to the mountains. I wondered whether work could not be combined with living here. An acquaintance of mine then drew my attention to a vacancy at Disetronic and recommended the place to me as being a "cool company". Things worked out and so I started as Product and Key Account Manager at Disetronic in 2001. In those days, work permits for foreigners were still subject to quotas and it was perfectly normal for only Swiss German to be spoken. So I took a crash course and was pretty exhausted in the evenings for the first few weeks. But that way I learned to understand Swiss German very quickly.

Meanwhile, you have been with Ypsomed for more than 20 years. Can you share a memorable experience with us?

It was an impressive experience when I once went to eat in our canteen with two new employees and Simon Michel sat down with us. A conversation developed in which Simon wanted to know what the two of them were doing at Ypsomed, where they came from, and so on. Finally, one of the new colleagues asked Simon what he did at Ypsomed, whether he worked in marketing or sales; to which Simon simply replied: "I am the CEO." That impressed me. Because I am convinced that other CEOs might have been put out by the new colleague not recognising them, but not Simon. This little episode showed me that at Ypsomed we don't just have a "you" culture, but also live it through communication at eye level. Questions are allowed and you are also allowed the occasional faux pas. I believe this good and important.

What has been your biggest challenge in the last two years?

We are growing fast and need to manage our growth in a responsible manner. We are very well positioned in the autoinjector sector and are experiencing enormous growth. Now it is important to assess demand correctly, to utilise capacities well and to make investments in a well-considered and timely manner. These decisions are of great consequences and require taking the right measures and at the right time. In particular, we want to avoid dependencies and cluster risks. This requires overarching cooperation in a committed team with creative solutions.

Another consequence of our growth is that we are becoming more and more international as a team and have to take into account the increasing internationality of our staff. English is also becoming more and more important in-house. Our goal is not to lose anyone on this journey and at the same time to maintain and advance our corporate culture as we grow.

What advice do you have for a good work culture? What is your leadership style?

Last year, we created smaller units and put more responsibility into the hands of these agile teams. Employees should think like entrepreneurs and act holistically. The task of the Management is now primarily to take a step back, to let go and to accept the suggestions of the teams. In the Management Board, we occasionally have to take a good look at ourselves and not simply overrule these decisions. It's a learning process on both sides. A key task of supervisors is to place their employees in a position where they feel comfortable and can develop according to their strengths. For the long-term success of a team, it is important to create an environment in which employees enjoy their work and flourish in their tasks. You can only be as good as your team.

Ulrike Bauer, Chief Business Officer (CBO) YDS, in interview

What are your visions of the major challenges facing our society in the health sector, especially within the context of chronic diseases?

Chronic conditions are on the increase globally and already represent the main driver of healthcare costs. To reduce the burden, treatment must move towards the patient's home. And the conditions look good. On the one hand, many modern medicines are formulated for self-administration at home. On the other hand, patent protection has expired for some existing medicines. This makes lower-priced generic products possible, so-called biosimilars, which improve global access to affordable medical care. Successful selfcare not only improves the quality of life of those affected, but also that of their families. At the same time, it reduces the financial burden on the health system.

An upcoming field is digital therapy management. Digitisation is a key to greater efficiency in the health sector. Information, data and assistance can thus be made available more quickly and easily. The overriding objective is to guide patients through their therapy in a sustainable manner and to keep them on therapy in the long term. I see the willingness to invest in prevention and therapy adherence as the great levers and opportunities for our society to ensure the long-term affordability of healthcare. It is therefore safe to say that the need for reliable self-medication systems and solutions will continue to grow.

What would you say in conclusion, Ulrike: have you contributed to making the world a better place?

With our products and services, we give many people around the world improved access to medicines and selfcare. Medicines can be administered easily and safely. This adds freedom to patients' daily lives. They have to explain themselves less as they can treat themselves at home or very discreetly when they are out and about. This contributes to a better quality of life. With our platform approach, we also create market access for smaller biotech companies in the field of rare diseases who are not in a position to afford the development of their own delivery devices. So, to come back to the question: yes, I do believe that with all this we are contributing a little bit to making the world a better place. And we consider this a great privilege.

Our products help improve medical care for people with chronic diseases globally. We wish to serve the widest possible range of medical indications to make life easier for affected people.

Access to easy and high-quality self-medication

Our growth strategy benefits both our company and society. This is because products for self-medication and services for improving the success of therapy optimise the therapies of chronically ill people and thus significantly relieve the burden on the healthcare system. Our products also facilitate treatment because they are easy and safe to use.

Highlights 2022/23

• We have reached 400 000 more people with our Ypsomed products
• We have provided access to six additional Biosimilars as a contribution to affordable medical care
• We serve oncology as a new therapy area
• We have concluded a further 35 new projects orders in the pen business for important disease areas

Access to healthcare

8.1 Mio.

people use our solutions

"Access & Expansion" is our credo to help people access self-medication and medical care. We also pursue this ambition through growth, which enables us to reach more people with our injection and infusion systems for safe and easy self-medication. The reason being that self-medication fundamentally facilitates and improves the possibilities of medical care. In the segment of Ypsomed Delivery Systems, our pharmaceutical customers distribute our products worldwide. We market our Diabetes Care products directly through subsidiaries and distributors in over 40 countries.

The formulation of innovative medicinal products for subcutaneous injection, instead of intravenous infusion, allows for self-treatment in more and more indications. And the use of generic versions of expensive originator drugs or so-called biosimilars makes therapy more cost-effective and thus accessible to a larger group of patients.

Non-discriminatory access to healthcare for all levels of society, regardless of age, origin or status, is a top priority. Health and basic medical care is a universal human right. Thus, in India and Bangladesh, where our subsidiary Ypsomed India is active, we are specifically committed to the health of the weak and poor population through social and charitable organisations. Thanks to third-party institutions, children and financially disadvantaged people with diabetes have easy and free access to urgently needed medical products, which are subsidised by Ypsomed.

Quality of life and product quality

The high quality of the products and their ease of use play a major role in ensuring that the application of our solutions brings both benefits and relief. Successful self-medication requires that our products are safe and reliable, easy and intuitive to use, and that erroneous manipulation is impossible. This is why we place great emphasis on design, haptics, ergonomics and usability during development. In this process, we incorporate the insights we gain from focus-group testing and surveys during both the concept and development phases.

48 days

supplier audits

Product quality and safe application are key for us in delivering our vision. For this reason, we have a comprehensive system of processes to continuously improve and ensure quality and safety.

Our management system complies with the worldwide regulations for medical devices according to US 21 CFR 820 and is certified according to ISO 13485:2016 (EU + Canada) and MDR (EU) 2017/745 and therefore also according to the Medical Device Single Audit Program (MDSAP). At Ypsomed, compliance with these regulations and standards not only means implementing a quality system, but also ensuring that quality-oriented thinking is a core component of our corporate philosophy.

Our quality system is reviewed systematically every year during numerous audits by customers and regulatory authorities.

Ambitions 2025

• We enable self-medication solutions for over 10 million people.
• Our devices serve treatments in over 25 indications.
• Our medical technology products are the most user-friendly on the market.

SDGs

Performance, KPI	2019/20	2020/21	2021/22	2021/22	Target 2025/26
Access to healthcare
Reached people with Ypsomed products (million)1,2	5.7	6.2	7.7	8.1	10.0
Disease areas served (number)1	8	11	12	13	25
Injection systems for biosimilars (number)1	21	30	34	40	55
Injection systems for originator drugs (number)1	12	17	20	23	50
Product quality and safety
Audits of manufacturing sites by external parties (number of audit days)	137	73	149	148
Audits by external parties without significant findings (%)	79	100	81	83
Supplier audits (number of audit days)	23	19	39	48
Product recalls (number)	0	0	0	0

• 1 Due to a change in methodology, the historical values were adjusted. Clinical studies are no longer taken into account.
• 2 Estimations.

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New options for injecting drugs with large volumes

Chronic conditions such as asthma, cardiovascular disease, rheumatoid arthritis and other autoimmune diseases develop slowly and persist for a long time. They often cause great personal suffering for those affected and those close to them. These days, novel biologic drugs for chronic conditions in particular can be self-administered in many instances. The frequency of injections can be reduced or their effect improved if more active ingredients and thus often larger volumes are administered with a single injection. This is where Ypsomed comes into play, having extended its portfolio of autoinjectors with an injection device for volumes up to 5.5 ml.

Many chronic illnesses cannot be cured. Instead, the symptoms are treated, often requiring lifelong therapy. In recent years, however, the manner in which chronic conditions are treated has changed. With modern, biopharmaceutically manufactured drugs, it is now possible to treat diseases which were previously impossible or only difficult to treat. As a rule, these drugs, referred to as biologics, cannot be administered orally, but must be injected.

Self-medication makes daily life easier for many people with chronic illnesses and reduces the burden on the healthcare system. For those affected, the option of selfcare is an important factor in becoming more independent of healthcare facilities and being able to administer drug treatment according to their therapy plan, regardless of location. To enable them to administer their treatment independently, the injection device must be easy and safe to use. This includes taking into account the physical limitations of the affected persons, such as tremors, problems with gripping or impaired vision. This is exactly what the YpsoMate family of autoinjectors with a prefilled syringe has been designed for. All the patient has to do is remove the cap and press the autoinjector onto the skin. This automatically triggers the injection. Visual and audible signals provide the user with feedback as to whether the injection has been administered completely and

correctly. Due to our easy-to-use self-injection systems, affected persons can treat themselves at home instead of having to visit a medical facility for this purpose.

YpsoMate autoinjector platform for liquid drugs up to 5.5 ml

With the wider use of therapeutic proteins administered subcutaneously, the use of autoinjectors has increased steadily in recent years and continues to rise. It has become the standard for the self-administration of bioengineered drugs for a variety of chronic diseases such as rheumatoid arthritis, psoriasis, multiple sclerosis or migraine. Autoinjectors allow the safe and effective administration of a fixed dose.

Up to 2020, only autoinjectors with a volume of up to 1 ml were available on the market. Over the past five years, demand has emerged for new devices capable of subcutaneous drug administration with larger injection volumes. In view of this demand, Ypsomed already extended its YpsoMate autoinjector family to include two new variants, the YpsoMate 2.25 and the YpsoMate 2.25 Pro, for volumes up to 2.25 ml and for drugs that also have a high viscosity.

Are even higher volumes and thus longer injection times possible?

The development team at Ypsomed has conducted a series of user studies to assess the skills and needs of users for injectors larger than 2 ml. The results of these studies confirmed that even individuals with specific motor impairments were able to hold an autoinjector securely in position during injections well exceeding the 5 to 15 seconds that are commonplace nowadays1 .

Last autumn, we then introduced the YpsoMate 5.5 for liquid drugs with volumes up to 5.5 ml. It is based on the established technology of the YpsoMate 2.25 Pro. By allowing larger volumes to be injected, this larger autoinjector enables the use of new drugs in self-medication. In the future, autoinjectors could then not only be used for treating autoimmune diseases and rare diseases, but also increasingly for treating cancer in a domestic environment. Larger dosage volumes can also reduce the number of injections required and thus further reduce the burden of therapy for patients as well as caregivers.

In production design, a special emphasis was placed on optimally supporting larger volumes and a longer injection time. The YpsoMate 5.5 is equipped with a handle which offers comfortable handling and a stable hand position throughout the entire injection process. At the same time, a continuous visual and audible signal provides the user with good control.

Autoinjectors or patch injectors – what are the preferences of those affected?

In a recent study ² , participants from Germany were asked about their preferences for self-treatment. The survey focused on finding out whether users would prefer handheld autoinjectors or wearable large-volume injectors for their therapy. The results suggest that for those affected, the factors injection duration and injection frequency are the most relevant. Furthermore, the preference for the administration options also depends on the quality of life, in other words, on the current physical condition of the patient. Affected people with less pain and discomfort are more likely to opt for more frequent and shorter injections. In contrast, those suffering from more severe discomfort are more likely to value hands-free operation and the added safety offered by wearable injectors with visual and audible feedback elements. These users prefer less frequent injections, but are willing to accept a longer duration of the injection.

Affected people are more independent and regain quality of life

By being able to administer their drugs themselves at home, patients regain a part of their quality of life. They can treat themselves in their familiar environment without having to put up with long distances, waiting times and stays in hospital. Innovative formulations of drugs by the pharmaceutical industry and intelligent injection devices such as the new YpsoMate 5.5 from Ypsomed now even allow patients to administer complex therapies themselves at home. With the aid of digital therapy management, they can in future also be accompanied in their therapy, which can improve therapy adherence and thus also the outcome of the therapy.

¹ Reto Jost (2022), The new YpsoMate 5.5 – Taking handheld self-injection beyond volumes of 2 ml, On Drug Delivery, Issue 138, https://yds.ypsomed.com/files/media/03_Documents/12_Articles/PFS-ONdD-Oct-2022-Issue-138-LoRes.pdf.

² Andreas Schneider, Harald Kolrep, Hanns-Peter Horn, Christoph Jordi, Sina Gierig & Jakob Lange (2023), Understanding patient preferences for handheld autoinjectors versus wearable large-volume injectors, Expert Opinion on Drug Delivery 20:2, 273–283, DOI: 10.1080/17425247.2022.2162037.

Treating obesity as a chronic disease

Nowadays, there are more overweight people than ever before. The worldwide prevalence of obesity has tripled in the past 30 years. Industrially processed foods and a lack of exercise are blamed for this, but increasingly also biological and genetic causes. Not all people are able to reduce their weight with sports or a healthier diet and thus prevent serious health consequences. Now there is hope in the form of a new generation of drugs which those affected can inject themselves with and thereby reduce their weight without severe side effects.

One unit of measurement for estimating body weight in relation to height is the so-called body mass index, or BMI for short. The BMI is the quotient of body weight (in kg) and height squared (in m²). According to the World Health Organisation (WHO), adults with a BMI of over 25 kg/m² are considered to be overweight. Obesity begins at a body mass index of 30 kg/m². Today, well over 2 billion people are overweight, with over a third being obese.1 In light of this data, the World Health Organization (WHO) ranks obesity as one of the greatest public health threats of the 21st century.2

In today's society, overweight people are often accused of being lazy and unathletic – and that a little more exercise or sport would already solve many problems. But this cannot always be presumed. Our genes influence our feeling of satiety, fat metabolism and fat distribution. Studies have confirmed that only between 20 and 30% of our body weight is influenced by our lifestyle and environmental factors.³ Besides the genes, metabolic diseases, the social environment and psychological as well as biological factors play an important role. Obesity is therefore not always caused by a lack of willpower, but can be a predisposition or the consequence of a disease and consequently represents a medical problem.

Besides, there is also not always a correlation between obesity and health. Almost 30% of all overweight people are healthy from a metabolic point of view.4 This indicates that other factors besides weight need to be taken into account when assessing health.

Decades of research for evidence-based treatment

20 years ago, when treating type 2 diabetes with a mimicry of the natural hormone GLP-1 in clinical trials, scientists observed that participants also lost weight in addition to other effects. GLP-1 stands for "glucagon-like peptide 1" and is a natural hormone produced in the intestine and plays an important role in the incretin effect, the insulin response in the pancreas to glucose intake. It stimulates the production of insulin, thereby lowering blood glucose and slowing down both the receptors in the brain which control appetite and the receptors in the intestines which slow down digestion. This regulates the feeling of satiety and curbs appetite. In other words: it keeps you from thinking about food, and you lose weight without going hungry.

These findings led to the development of a new class of treatment options which can help people lose significant body weight effectively and with a minimum of side effects. Until now, this was only possible through surgical interventions such as the insertion of a gastric band. In addition to weight loss, this new treatment approach also exerts positive effects on the cardiovascular system. The reduction in weight can help people to feel physically more comfortable again and make lasting changes to their lifestyle. Treatment thus reduces the risk of serious secondary diseases in several ways.

Recognising obesity as a chronic disease

Given all these benefits, there is the potential risk that a trend of simply losing weight for aesthetic rather than health reasons could emerge in this context. We are therefore called upon as a society to treat overweight people with respect and esteem and thus help to ensure that this therapy is only used for medical reasons. It should serve a justifiable health need and not be the sole option for avoiding stigma. As with the use of any drug, users must seek advice and guidance from a professional. If we accept obesity as a chronic condition and treat it medically, this may mean taking the medication throughout a lifetime to maintain the lower weight.

Addressing socio-cultural factors

A healthy, balanced diet and sufficient exercise will always be the best prevention against metabolic diseases. We therefore not only need to address the biological but also the social and psychological factors which can lead to obesity. An open-minded social discussion about obesity can therefore help to improve the quality of life of all those affected through prevention, treatment or combating stigmatisation in everyday life.

Mechanism of action of the hormone GLP-1

¹ World Obesity Federation, World Obesity Atlas 2023

² www.who.int/europe, consulted on 21 March 2023

³ Stunkard, AJ et al, N. Engl J Med. 322:, 1483–1487 (1990)

⁴ Tomiyama et al, Int J Obes 40: 883–886 (2016)

We are committed to acting responsibly towards our employees, our partners and society.

We strive for a circular economy and to reduce our carbon footprint.

On course in sustainability

We are a value-based company and feel committed to society as a whole. That is why we take responsibility for the environmental, social and societal impact of our actions and are committed to long-term and sustainable development. And in doing so, we are open, fair and respectful towards customers, partners and employees.

Highlights 2022/23

• Corporate Zero Programme with medium- and longterm CO2 reduction targets towards net zero developed
• YpsoMate Zero on offer for our customers and further Zero platform products in development
• Environmental management system of Ypsomed AG and Ypsomed Produktion GmbH certified according to ISO 14001
• ISCC+ certification of the Lochbach production site for demonstrably sustainable plastic material for our Zero programme
• Silver medal in the Ecovadis rating for above-average quality in sustainability management
• Photovoltaic system of 7 300 m2 installed in Schwerin
• Award as a top employer: Ypsomed occupies Rank 7 in the electronic and medical equipment sector
• Successful establishment of the FlexWork working model

By "Responsibility & Commitment", we mean our social responsibility in environmental protection, the promotion and development of employees, as well as ethical behaviour as individuals and as a company.

Sustainability Management System

We apply the systematics of the ISO 14001 standard for environmental management in all our sustainability management. Ypsomed AG with its production sites in Switzerland and Ypsomed Produktion GmbH in Schwerin, Germany, were certified according to ISO 14001 for the first time in the 2022/23 financial year.

The fact that our Sustainability Management System has proven itself is evidenced, among other things, by our good performance in the internationally established Ecovadis rating, in which we were awarded the silver medal for our above-average quality in sustainability management.

We initiated the Ypsomed Sustainability Academy at the end of 2022 for internal and external networking, training and awareness-raising in the area of sustainability. In this context, we inform about and discuss current developments as well as implemented and planned measures in the area of sustainability and network with internal and external sustainability experts from our partners, customers and suppliers.

Silver medal for above-average quality in sustainability management

Environmental protection

We are committed to protecting the environment and are guided by the principles of product stewardship and the circular economy.

Product stewardship and the circular economy

We continuously optimise the entire life cycle of our products and our entire value chain – from development, procurement and production to packaging, use by users, as well as disposal and recycling.

We take on product stewardship by minimising the undesirable effects of our products and services on health, safety and the environment throughout the entire product life cycle. In doing so, we are committed to the principle of the circular economy. We strive to achieve this by developing products which minimise waste and emissions, which use fully or partially recyclable materials and renewable raw materials and which also protect the climate. Furthermore, we use energy efficiently. The highest premise remains the standard of medical technology and patient safety, which we ensure through outstanding product quality and very good user-friendliness.

Carbon footprint across the value chain (2021)

Climate and energy across the value chain

Climate change is one of the great global challenges of our time. As a socially responsible company, Ypsomed wants to make a significant contribution to reduce global warming. Which is why we have committed ourselves to net zero emissions across the entire value chain, a very ambitious goal.

The calculation of our corporate carbon footprint 2021 shows: our own greenhouse gas emissions at our company locations – so-called Scope 1 and 2 emissions according to the Greenhouse Gas Protocol – amount to 5% of total emissions. Emissions from heat consumption are the most relevant. Our electricity is already sourced 100% from renewable energy sources. 95% of the emissions thus originate from the value chain upstream and downstream of us (so-called Scope 3 emissions). The largest share is accounted for by purchased materials (in particular plastic granulate and transport containers). The second most important emission category is investments in capital goods, such as injection moulding equipment and buildings.

Corporate Zero Programme

In the past financial year, we placed a strong focus on the development of our climate programme. In our Corporate Zero Programme, we are guided by our short- and longterm climate ambitions as defined in 2021:

• By 2030, we aim to achieve net zero CO2 emissions in our operations (Scope 1 and 2).
• By 2030, a selection of our products are to meet net zero CO2 emissions (Scope 1–3).
• By 2040, we aim to achieve net zero CO2 emissions across our entire value creation chain (Scope 1–3).

In doing so, we take into account scientific and established guidelines according to the Science Based Target initiative (SBTi). We already signed an SBTi declaration of intent in May 2021. To implement our goals, we have defined concrete short- and medium-term reduction targets across the entire value chain in the past year. In spring 2023, we have now submitted these reduction targets for Scope 1–3 emissions to the SBTi and will communicate them as soon as the SBTi validation process has been completed.

The net zero target by 2040, ten years ahead of the Paris Climate Agreement, presents an enormous challenge.

95%

of the CO2 emissions in our corporate carbon footprint come from the upstream and downstream value chain (Scope 3)

Reduction before compensation

Nevertheless, in addition to CO2 reduction, some compensation will be necessary through supporting climate protection projects. The quality of externally supported climate protection projects is guaranteed through internationally recognised and certified standards (primarily Gold Standard and Verified Carbon Standard Verra). In addition, all externally supported climate protection projects contribute to other Sustainable Development Goals (SDGs). With the compensation projects, we contribute both to avoiding further emissions (avoidance projects) as well as to removing them from the atmosphere and storing them permanently (removal projects).

Since 2021, we have been developing a portfolio of carbon compensation projects based on these principles. For example, projects supported so far include the promotion of renewable energy in India, forest protection measures in Zimbabwe and a reforestation project in Tanzania.

Zero Product Programme

The fact that the materials we procure create the largest share of our carbon footprint inspired Ypsomed to develop Zero Products and to drive the decarbonisation of the individual product platforms.

The primary focus of our actions is on CO2 reduction. As already initiated for our YpsoMate Zero autoinjector as an exemplary measure, we are minimising CO2 emissions by using alternative materials for the housing and for packaging. Our partners and suppliers, with whom we work closely, also play a decisive role here.

As a result, the YpsoMate Zero autoinjector launched in 2020 is CO2-optimised by using bioplastics from renewable sources and a new packaging concept with transport containers made from recycled PET. As Ypsomed, we are proceeding in two steps. In step 1, we use CO2-reduced but chemically identical plastics and thus achieve a CO2 reduction of approximately 40%. In step 2, we aim to achieve a further reduction potential by testing alternative materials. The step 1 YpsoMate Zero is already available to customers, whereas for step 2 we continue to work towards net zero with iterative improvements.

A fundamental part of Ypsomed's approach is ISCC+ certification. The International Sustainability & Carbon Certification (ISCC) is an organisation which offers a globally recognised certification system for the manufacture of sustainable products. Hence, ISCC+ certification includes the traceability of sustainable materials in the mass balance approach, covering not only a single product but the entire supply chain. Ypsomed received ISCC+ certification for the Lochbach site in 2022. The certification of further sites is planned. This is an important milestone in the progressive transition to our Zero Products.

The promising and future-oriented findings from the development of the YpsoMate Zero were also applied more widely in the past financial year: decarbonisation projects are in development for the YpsoMate 2.25 ml and UnoPen platforms and the decarbonised products will soon be available for our customers.

The Alliance to Zero, founded in 2021 by Ypsomed and seven other companies along the pharmaceutical value chain, pursues the goal of achieving the transition to net zero emissions in line with the goals of the Paris Climate Agreement based on cooperation. In the past year, the Alliance has further developed its roadmap towards the net zero target and defined measures based on the ecological life cycle assessment of all participating companies. For example, it promotes research on the topic of the circular economy for medical devices in cooperation with the Delft University of Technology.

Climate and energy in operations

We have been reducing the energy consumption and CO2 emissions of our plants and production sites continuously for years. We have committed ourselves to this with binding targets to the federal government, and the Energy Agency for Industry (EnAW) is reviewing their implementation and effectiveness. A heat pump installed in Solothurn is particularly effective in saving energy: it has reduced natural gas consumption at the Solothurn site by over 80%. In addition, we only purchase the latest generation of injection moulding machines, which consume an average of 36% less energy than conventional injection moulding machines.

In anticipation of the feared energy shortage in the winter of 2022/23, we set up a task force and seized this occasion to identify and implement sustainable energysaving potentials. Simple measures such as switching off the outdoor lighting overnight and reducing the room temperature were implemented immediately. Employees in production were trained and sensitised to shut down production equipment when not needed for a prolonged period of time.

Besides reducing energy consumption, the promotion of renewable energy sources is a declared goal at Ypsomed. For example, we have been sourcing our electricity from 100% renewable energy since 2021. In addition, we will be generating renewable energy directly at our sites in the future: in 2022, a solar plant was installed at our production site in Schwerin (see also page 46). Its commissioning as well as the construction of further solar plants at our sites in Burgdorf are planned for 2023.

100%

electricity from renewable energy sources

We also focus on energy efficiency in the transport sector. We are currently working on analysing our vehicle fleet to make it more environmentally friendly. This includes the procurement of electric vehicles, as well as the use of new software to analyse and optimise the vehicles' degree of utilisation. We currently provide eight charging stations with 16 charging points for our employees. Bicycles are available for free use at all sites. We also promote the use of public transport with an eco-bonus for all employees in Switzerland as well as free all-season tickets for our approximately 60 apprentices. Due to our FlexWork initiative and the option of location-independent working, the number of commuter movements of our employees will also continue to decrease in the long term. By the same token, virtual meetings have become established for customer visits and further training over the last two years.

Ambitions 2025

• Reducing the ecological footprint by promoting product stewardship and the circular economy.
• Reducing our operational as well as upstream and downstream greenhouse gas emissions (according to the Science Based Targets initiative).
• Progressing towards net zero greenhouse gas emissions by 2030 for operational emissions and by 2040 for the entire value chain.
• Meeting the target agreement for energy efficiency (115%) and CO² intensity (55%) as specified with the Energy Agency for Industry (EnAW) for the Swiss sites.
• Making use of electricity from 100% renewable energy and increasing the share of self-produced renewable energy (use of waste heat, installation of solar systems).

SDGs

Performance, KPI	2019	2020	2021	2022	Target 2025
CO2 emissions, Scope 1 and 21 (t CO2-eq)	3920	3283	3453	2925	1
CO2 emissions, Scope 31 (t CO2-eq)	114089	62922	69042	1	1
Electricity from renewable energy (%)	9	58	100	100	100
Energy efficiency 2 (%)	109	111	112	112	115
CO2 intensity 2 (%)	55	38	32	36	55
Specific energy consumption (MWh per t processed plastic granulate) 3	8.5	7.6	7.9	7.5
Specific energy consumption (kWh per machine hour) 3	58	49	47	45
Specific CO2 emissions (kg per t processed plastic granulate) 3	213	128	136	128
Specific CO2 emissions (kg per machine hour) 3	1.5	0.8	0.8	0.8

• 1 CO2-eq emissions according to Greenhouse Gas Protocol, see illustration p. 33. Scope 3 value only collected for 2019–2021. Collection 2022 and definition of targets according to SBTi are work in progress. Historical data 2020 and 2021 were adjusted for comparability for the SBTi target definition (reference year 2020, without DiaExpert and without Ypsotec).
• 2 According to target agreement for the Swiss sites with the Energy Agency for Industry (EnAW).
• 3 Calculated for Swiss production sites.

40 %

less CO2 emissions per transport container made of recycled PET

Recycling and waste

Regulatory requirements and our high demands on quality require extensive test runs, which inevitably generate rejects in our plants. We are continuously working to minimise waste and rejects and to steadily increase the proportion of recycled waste at our production sites. In the past financial year, we were able to increase our recycling rate from 38.3 % to 39.1 %. Additional recycling potential is analysed on a regular basis. Last year, the labelling of the waste containers was renewed and the employees in production were made more aware of the need to recycle waste materials in a more targeted manner and thus increase our recycling rate.

We strive to apply the principles of circular economy both to the operational waste we generate as well as to the life cycle of our products. The Ecodesign Guideline implemented in 2021 and further developed in 2022 promotes environment-friendly product and packaging design at Ypsomed. Among other things, this includes the use of sustainable materials and the improvement of recyclability. As a consequence, our future product developments will now be systematically reviewed with regard to our ecodesign principles and evaluated according to the ecodesign Index.

In addition to product optimisation, this also includes Ecodesign projects for our packaging. With the transport container for the YpsoMate platform made of recycled PET, the CO2 emissions per container are reduced by some 40% and resources are kept for longer in the cycle. We aim to make further savings by reusing containers. To this purpose, a pilot project is ongoing in cooperation with selected customers.

Together with our customers and other partners, we are paving the way for the circular economy: proactively and with great commitment, we are tackling the challenges in the areas of ecodesign, recyclability, take-back and recycling systems.

Ambitions 2025

SDGs

• Promoting product stewardship and the circular economy within our company and in cooperation with our partners.
• Establishing an ecodesign process and optimising a selection of products accordingly.
• Reducing waste and increasing recycling of products and operational waste.

Performance, KPI	2019	2020	2021	2022	Target 2025
Amount of waste total (t) 1	965	1010	967	1054
Specific amount of waste (kg per t processed plastic granulate)	284	248	228	226	200
Specific amount of waste (kg per machine hour)	1.9	1.6	1.4	1.4
Waste per disposal process (t) 1
Recycling	338	360	371	412
Incineration plant	567	608	551	585
High-temperature combustion	52	44	34	39
Landfill	8	1	0	2
Proportion of total volume recycled (recycling rate) (%) 1	29.5	35.2	38.3	39.1	40
Categories of waste (t)
Sweepings	564	599	540	569
Paper/cardboard	180	172	148	152
Plastic, mono-material	67	101	171	190
Metals	31	44	35	46
Hazardous waste	53	45	34	40
Matured timber	52	56	33	36
Other	15	4	3	8

¹ Retroactive corrections due to improved data quality.

Employees

Ypsomed employs 2 059 qualified employees, 1 468 of them in Switzerland. This makes us one of the five largest employers in the medical technology sector in Switzerland. Our employees have attractive and futureoriented job and development opportunities. The company uses a structured talent management process to identify potential and consistently develop skills further. Ypsomed supports young talents and trains around 60 apprentices in twelve professions. Approximately 80% of these take up a position with Ypsomed after completing their apprenticeship. In the "Leading for Future" leadership development programme, employees develop the leadership skills that Ypsomed needs to remain successful in the future.

The promotion of employee diversity and the inclusion of different groups of people (age, gender, nationality, etc.) are important cornerstones of Ypsomed's personnel policy. Ypsomed consistently implements gender equality and ensures equal pay between men and women: that means, equal pay for the same job for the same experience and the same contribution to the company. This objective has been achieved for several years, as regular external and audited salary analyses have shown. For example, the legally stipulated compliance with equal pay was formally checked and confirmed for the first time in 2021 at Ypsomed AG, Switzerland, by an external auditing company (PwC). However, to maintain transparency, Ypsomed will in future conduct such an analysis every two years on a voluntary basis. Ypsomed is also holder of the ADVANCED independent fair-pay label, which additionally confirms equal pay between the genders.

Ypsomed offers optimal working conditions to protect the safety and health of its employees. All plants, buildings and work processes are equipped with protection and safety concepts and are subject to strict inspection and control protocols. The organisation is prepared for emergencies, both operationally and organisationally. For example, an evacuation drill is held annually at each site and the findings are integrated into the training courses. EHS training sessions on specific topics are held at regular intervals. In 2022, one focus was on lifting and carrying loads and on safety-relevant work preparation. Offers and information in the company and for leisure promote health and well-being, such as discounted access to fitness offers for employees.

For us, equal pay is a matter of course

The WE@Ypsomed programme, which was launched at the beginning of 2021 and supports employees and fellow citizens in the areas of health, culture and sustainability, has developed very well. The objective is to allocate Ypsomed's sponsorship budget primarily to our employees who are committed to internal and external projects. During the reporting period, more than 25 internal projects were supported, including events such as an Advent wreath workshop, an upcycling competition or various sports courses and events such as participation in the Berne Grand Prix. In addition, there were over 140 external sponsorship activities. In its entirety, the WE@Ypsomed programme makes another important contribution to Ypsomed's attractiveness as a company with regional roots which promotes togetherness and thus also contributes to greater employee satisfaction.

The multifaceted activities for employee development strengthen job satisfaction, identification and solidarity with the company. The employee survey is conducted every two years, most recently in 2020, and shows that employees rate the categories "satisfaction", "identification" and "solidarity" at a very high level.

This is also confirmed by the independent awards for popular employers: in a large, independent survey by the Handelszeitung, we were once again ranked as a "Top Employer 2022". This strengthens our commitment to our employees, which we will continue to pursue intensively during the next financial year.

Ambitions 2025

• Diversity and inclusion: increasing the proportion of women in administration, management and in executive positions, including different groups of people (age, gender, nationality).
• Leading the way in employee involvement and empowerment in our industry (employee commitment).
• Ensuring leadership skills in a complex, global and digital environment.
• Strengthening employer branding.

Performance, KPI	2019/20	2020/21	2021/22	2022/23	Target 2025/26
Employee survey, satisfaction 1 (points 0–100)	75	76	76	n/a	80
Employee survey, identification 1 (points 0–100)	82	82	82	n/a	80
Employee survey, solidarity 1 (points 0–100)	88	88	88	n/a	80
Leadership development, leaders enrolled for programme (%)	100	100	100	100	100
Talent liquidity, positions filled in-house (%)	29	18	30	26	30
Fluctuation rate 2,4 (%)	8.2	4.7	6.9	11.3	7.0
Equal pay, unexplained pay gap of women 3,4 (%)	–2.1	–2.1	–2.1	n/a	< 5
Gender diversity, share of women Board of Directors (%)	0	0	20	20	30
Gender diversity, share of women Executive Board (%)	13	13	13	14	20
Gender diversity, share of women in leadership positions (%) 5	19			21
Learning support, training budget per employee 4 (CHF)	1200	900	1200	1400
WE@Ypsomed, Budget for Corporate Social Responsibility 4 (CHF)	150000	175000	175000	175000
Share of trainees among employees (%)	3.0	3.4	3.5	3.5	3.0
Occupational accidents with lost days 4,5 (number)	12	13	10.0	14.0
Lost time injury severity rate 4,6	0.6	0.1	0.4	0.2

• 1 Values collected every two years, last survey 2020/21
• 2 Net fluctuation rate, excluding natural fluctuation (retirements, deaths, etc.).
• 3 Survey according to methodology recognised by the Confederation. Equal pay applies within the tolerance treshold of ± 5%. Certificate valid for 4 years, last certification 2021.
• 4 Data for Ypsomed AG.
• 5 Women's share for leadership positions is only calculated every 2–3 years for the Schilling Report on the Ypsomed Group
• 6 Recognised cases with daily allowance according to Suva (Swiss accident insurer). Retroactive accident reports are possible.
• 7 Number of days compensated by Suva per full-time employee. Retroactive accident reports are possible.

Integrity

Corporate Governance & Compliance

The success of Ypsomed depends directly on how we behave towards our customers, business partners and shareholders, but also towards each other. As a medical technology company, Ypsomed is heavily regulated worldwide through legislation and official requirements which guide us throughout the life cycle of our products to minimise undesirable effects on health, safety and the environment and thus contribute to the best possible quality of life. We pursue sustainable corporate development, which allows us to constantly adapt to the environment and be open to the needs of our stakeholders.

We take responsibility for complying with applicable laws, but also for consistently implementing our corporate values. We foster an open, honest and transparent corporate culture and stand up for what we do.

We respect the personality of our counterparts and avoid any kind of discrimination and harassment. We promote equal rights and opportunities for all employees and treat them with respect and appreciation. We strongly condemn bribery and any other form of corrupt business conduct and prevent such situations through transparency and honesty. This applies in particular when dealing with medical professionals and institutions, where we observe our internal guidelines as well as applicable laws and industry codes.

We regularly train our employees on the Code of Conduct and encourage them to report misconduct. We try to avoid conflicts of interest and disclose them to the Compliance Officer should they nevertheless occur. Together we take appropriate actions to defuse possible conflicts. New is our whistleblowing system Ypsomed Integrity Line, which is available for external and internal reporting.

Data protection, information security and cybersecurity We only use business secrets, confidential information and personal data, in particular health data, within the law and for specified purposes. We do not share confidential information illegally with third parties.

As a globally operating company, we organise ourselves in such a manner that we comply with all applicable data protection laws and their requirements and also take into account local stipulations and laws. Our data protection programme includes an organisation which is defined across all companies, and which ensures uniform processes as well as regular training of our employees. Ypsomed thus also offers people in countries without adequate data protection rights the opportunity for selfdetermination over their personal data. Our efforts and actions are analysed and assessed annually in a data protection report by an external service provider. The report prepared for this financial year attests to Ypsomed's good standard in the area of data protection.

We use electronic means of communication responsibly and conscientiously and protect our infrastructure against cyberattacks. In all processes where information and telecommunication technology is used, Ypsomed guarantees a high level of integrity, availability and confidentiality of business data and systems in keeping with the current state-of-the-art standards. We regularly have the effectiveness of the implemented technical measures checked by internal and external audits and adjust them wherever necessary. Furthermore, we are planning to have our information security management system certified according to ISO 27001.

All employees are requested to complete obligatory information security and cybersecurity training annually.

Responsible supply chain

We wish to promote ethical behaviour not just within Ypsomed – ethics are also crucial throughout the supply chain. Not only do we perceive this as a growing need among our stakeholders, but also many new laws are seeking to regulate this area more closely. We are preparing for the requirements of non-financial reporting as well as the new supply chain laws across the Group and implementing processes and measures wherever necessary.

Our Code of Conduct for Suppliers is an integral part of our supply contracts. In terms of materials for our products, we only consider suppliers who have a quality management system which enables them to demonstrate compliance with the law and our requirements. In addition, we require all our suppliers to live up to their social responsibility. In particular, we require that they respect internationally recognised human rights and treat their employees with dignity and respect. They reject child labour, refrain from any kind of forced or compulsory labour and compensate their employees fairly. In addition, our Code of Conduct for Suppliers obliges them to act ethically and with integrity, as well as to ensure the health and safety of their employees, customers and society, and to protect the environment. Already today, 30% of the relevant suppliers have an ISO 14001-certified environmental management system.

Affected and interested persons can express justified concerns regarding due diligence in the supply chain via the Ypsomed Integrity Line.

Ambitions 2025

• Consistently ensuring responsible behaviour towards our employees, partners and society.
• Increasing the level of employee training on the Code of Conduct to 100 % across the group.
• Strengthening Corporate Governance / Good Governance within the company.
• Increasing the level of employee training with regard to security awareness and data protection to 100% across the group.
• All our relevant suppliers are part of our sustainable procurement programme.

Performance, KPI	2019/20	2020/21	2021/22	2022/23	Target 2025/26
Code of Conduct, percentage of employees trained (%)	83.7	84.4	93.4	99.5	100
Security awareness training, percentage of employees (%)	0	72.5	72.5	82.4	100
Data protection training, percentage of employees (%)	85.5	87.3	84.8	88.8	100

Towards net zero emissions with sustainable plastics

Plastics play a major role on our route to net zero emissions. They must have a low CO² value and at the same time be of very high quality. Nadine Kaufmann, Development Engineer Expert Services, has been working at Ypsomed for over 16 years and is responsible for the various development initiatives involving sustainable plastics. In this interview, she talks about why plastics are the right choice in many cases and what is important when using them.

Plastics are coming under increasing criticism in terms of sustainability, and pressure is mounting to replace them with alternative materials. What fascinates you about plastics?

The criticism of plastics comes primarily from the large and highly visible amounts of waste. However, if plastics are properly disposed of or recycled, they are a more environment-friendly alternative for many applications when compared to other materials. For example, a PET bottle for beverages is more environment-friendly than a glass bottle in terms of its overall carbon footprint, because the glass bottle is heavier to transport and glass requires very high temperatures to melt down for recycling.

Substitution with paper or cardboard is not possible in many cases as the necessary functions of the packaging could then no longer be guaranteed. In addition, plastics are now available which are made from renewable sources or recycled materials rather than crude oil, making them more sustainable.

Why are plastics so important for safe and easy selfcare?

Our devices should be safe and easy to use for patients and as economical as possible for the healthcare system. In order to protect the environment, the devices should also be small and lightweight so that they require little energy during transport and refrigerated storage. Plastic is an extremely versatile material which is ideal for medical technology, enabling us to manufacture the complex components for our devices cost-effectively as well as with high precision and quality. We would not even be able to build our injection devices without plastic.

Nadine Kaufmann, Development Engineer Expert Services

Nadine Kaufmann is responsible for drawing up life cycle assessments and for selecting sustainable plastics. In addition, she is responsible for our eco-design guidelines for sustainable product development and works on other sustainability projects.

How large is the CO² share of our injection systems relative to the overall product?

Compared to the production of the filled drug, the contribution of our YpsoMate autoinjector to the carbon footprint is low. Therefore, careful consideration must always be given to the benefit of the device to protect the highvalue and often vital drug and the ability to administer it easily and safely. In any case, we do everything within our power to reduce the carbon footprint within our sphere of influence to a minimum in the coming years.

What are the requirements for plastic?

The plastics must be easy to process and, depending on the component, exhibit special properties, e.g. good friction, high stiffness, impact strength or good printability. The plastics must comply with all regulatory requirements for medical technology and chemical substances. We choose the most sustainable plastics and make sure that the materials and our devices can be recycled effectively. Another important point is the long-term supply security for a material, as material changes for a marketed medical device are very time-consuming and involve extensive testing.

Where is the future heading for plastics?

Most major manufacturers already offer plastics made from alternative sources such as waste oil and biogas. Currently, there is also substantial investment in chemical recycling plants, where plastic mixtures can be recycled in part. In this process, plastic approved for medical use can be produced again, which we could then use again. At the moment, however, these plants are not yet very environment-friendly as chemical recycling requires a great deal of energy. Research is also currently being conducted into how CO2 could be extracted directly from the air, which in turn could be used to produce plastics.

Where do you see the future of packaging for our devices, what challenges and changes can we expect here?

Our ambitions in the area of packaging are: reduce, reuse and recycle. Generally speaking, we try to reduce packaging materials and use alternative materials where appropriate and to close material cycles. For instance, our packaging specialists pay attention to packing the devices as tightly as possible, thus saving on material as well as on transport and storage space.

We also check with our pharmaceutical customers to see if they can return the packaging so that we can reuse it again. In our quest for more sustainable options, we are also constantly experimenting with completely new materials for packaging.

What goals does Ypsomed have?

For the future, we would like to utilise plastics for our products which were not produced from crude oil but, wherever possible, from waste materials. We want to use sustainable, CO2-reduced plastics which can be used for a long period of time and can then ideally be recycled.

Looking at the developments and progress made in recent years, I am confident that in the future we will have even more sustainable plastics and a far better recycling infrastructure, particularly for medical devices. Together with the increasingly minimised use of disposable materials, this will allow a significant overall reduction in CO² to be achieved.

What is your vision in terms of our society's big healthcare challenges from a sustainability perspective?

Generally, the healthcare sector generates large amounts of waste, especially in hospitals. This should change in the future, although a certain volume of waste is probably unavoidable for reasons of hygiene. However, self-injection at home with Ypsomed devices can help to significantly reduce the carbon footprint of a treatment.

Especially in the case of chronic complaints, it makes sense to use the injection devices for several injections and to replace and incinerate only those parts that are contaminated. Reusable components which are hygienically safe could significantly reduce plastic consumption per injection.

As a result of our internal eco-design processes, we are moving in this direction and are an important step closer to our net zero targets. Close cooperation with all partners across the value chain is essential, which is what we are doing in the Alliance to Zero, an industry association with the goal of aligning all suppliers to net zero in the value chain up to the pharmaceutical company level. But close coordination with our customers and suppliers is also important. Promoting circular economy is a major challenge for a company like ours in the field of medical technology and self-medication – but we embrace it with great motivation.

Due to our platform approach and the resulting ease of scaling capacities, we are able to provide our products quickly and reliably. We continuously optimise our highly automated work processes. This enables us to further expand our cost leadership.

Increasing availability and expanding cost leadership

We distinguish ourselves by developing and industrialising innovative technologies. Our platform strategy enables us to provide customised pens and autoinjectors for clinical studies in a very short period of time and to even manufacture large quantities due to scalable fully automated production. Based on the medium- and long-term demand, we set up the necessary production capacity in good time, thus ensuring that we can meet the required delivery volumes for our customers and users at all times. Due to our focus on proprietary products and crisis-proof supply chains, we can always reliably supply our customers with products.

Highlights 2022/23

• 35% more YpsoMates and 27% more UnoPens produced than in the previous year
• 146% increase in capacity at YpsoPump compared to last year
• 99% increase in output in Schwerin compared to last year
• Reduction of average energy consumption per production hour by 9.4% in the winter months

Platforms and production competence

"Platforms & Operational Excellence" stands for our platform approach as well as for the claim to continuously optimise our processes in order to further expand our cost leadership while continuing to maintain a high level of quality. As an experienced developer and manufacturer of injection and infusion systems, we offer our customers significant advantages in the development, project and commercialisation phases: our proven platform strategy enables us to achieve short implementation times for customer projects. We support pharmaceutical and biotech companies worldwide in providing their medicinal products in a timely manner for clinical trials of systems for self-injection and then using these to commercialise them more quickly. We base the customer-specific requirements on production processes which have already been established, industrialised and proven.

As an independent manufacturer, we are also able to serve smaller customer orders or start-up companies due to our flexibility in production. In this way, we make a significant contribution to the treatment of rare diseases with small patient numbers.

We continuously optimise our work processes and strive to further expand our cost leadership in this way. To achieve this, we operate according to the principles of lean management. This means that we continuously review all process steps to determine whether they add value and offer customer benefits. If this is not the case, we replace them with more efficient processes or eliminate them completely. Due to our high level of productivity and our reliable quality, we are able to further develop our workplaces in Switzerland and Germany. We create qualified jobs locally and this makes us successful in the face of international competition.

Capacities

In our growth strategy, we rely on our production capacities, which we are expanding continuously. In Switzerland, our production areas are almost fully utilised. In Schwerin, we are steadily expanding the capacities of the platforms. In China, we have laid the groundstone for another manufacturing plant. Thanks to a modular master plan, we are well prepared for further, seamless expansion in the coming years.

platforms foster economies of scale and enable a fast customisation

Ambitions 2025

• Accelerated expansion of production capacities for infusion sets, autoinjectors and pens.
• Further increase in efficiency and productivity through economies of scale.
• Consistent lean management and agile working methods.
• Expanding further cost leadership.

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SDGs

M	9

Performance, KPI	2019/20	2020/21	2021/22	2021/22	Target 2025/26
Number of platforms	8	9	9	9	13
Lean management
Overall Equipment Effectiveness (OEE) UnoPen (%)	58	62	62	63	70
Overall Equipment Effectiveness (OEE) YpsoMate (%)	66	68	69	71	70
Scrappings in % of manufacturing costs	1.8	1.4	1.4	1.1	1.0

Ypsomed's development process for custom products

Energy generation and energy efficiency at the Schwerin site (DE)

We have been reducing the energy consumption and CO² emissions of our plants and production sites continuously for several years now. At the same time, we are progressively increasing the share of self-generated, renewable energy. At our production site in Schwerin, we have installed a photovoltaic system on the roofs of our factory buildings covering 11 200 m² for this purpose, which will enable us to generate a large part of our local energy demand ourselves as from mid-2023.

Our new photovoltaic system on the roofs of our factory buildings in Schwerin

The raw materials we procure and process account for the largest part of our carbon footprint. With our Corporate Zero programme, we are driving the decarbonisation of the individual product platforms. In this process, we reduce CO2 emissions by using alternative materials, optimising transport containers and reusing packaging materials multiple times. Our Zero programme also includes "Zero Sites", i.e. sites that generate only small amounts of greenhouse gases during construction, but particularly during operation and maintenance. For the Zero Sites mission, we promote the use of renewable energy sources, install our own renewable energy generation facilities and invest in intelligent building technology, to name just some examples. This allows us to reduce or completely eliminate our dependence on fossil fuels and to reduce our energy costs over time.

Zero Site Schwerin

We currently cover our electricity needs via the local provider in the greater Schwerin area. This electricity already originates 100% from renewable energy sources. Since May 2023, our photovoltaic system is in operation so that we can generate a large part of the energy ourselves and thus reduce the amount of electricity we buy in. The new solar plant has an output of 1 500 kWp peak power and should generate around 1.2GWh per annum. This is equivalent to the annual consumption of around 400 households in Germany.

In addition to independent energy generation, the following other energy efficiency measures have already been implemented in Schwerin:

With a combined heat and power unit (CHP), we generate electrical energy and heat via the principle of cogeneration. The advantage of this system is a significantly higher overall utilisation rate compared to the conventional mixed operation of local heating and a central power supply from a power plant. This high level of efficiency is achieved by utilising the waste heat on site as process heat.

The heat generated during the supply of compressed air is consistently utilised by virtue of an installed heat recovery system. The heat is generated by the air compressors in the technical centres. When air is compressed, a considerable amount of heat is generated which must be dissipated so that the compressor does not overheat and the compressed air cools down before it reaches the users. A heat recovery system also includes our closed-loop systems, in which the heat of the exhaust air is used to preheat the outside air.

Our air-conditioning systems run in recirculation mode. The temperature-controlled air is reused and not discharged outdoors.

During construction five years ago, LED lighting was installed in all areas of the building. This is automatically monitored in many areas via motion sensors and can be dimmed. Further actions are planned so that we can continuously improve with a view to the future. We are currently examining the construction of a wind power plant and are being advised by an external consulting firm. Connection to the future local district heating network of the municipal utilities in Schwerin is also currently being examined.

Sensitisation of the employees

However, photovoltaic systems and a combined heat and power plant are not the only ways to save energy: we can also save a significant amount of electricity in the future through the responsible behaviour of all our employees. Our employee awareness programme therefore plays an important role in our Zero Site approach. Some employees in Schwerin have already switched to an electric car. We support these efforts and in return allow them to charge their vehicles at the charging stations on the company premises. If they commute to work by bicycle (e-bike or conventional bicycle), employees have the option of choosing one – Ypsomed pays the costs, leases the bicycle and thus supports sustainable commuting to work.

Groundbreaking in China

The Chinese market is growing rapidly and the number of our local customer projects is constantly rising. Due to this growth potential, the establishment of a manufacturing facility in China is an obvious option for us. In April 2023, official groundbreaking took place for our production plant in Changzhou. On over 15 000 m² of space, we are working on the completion of the production building over the next twelve months and expect to start with production in the second half of 2024.

China has the highest number of people suffering from diabetes in the world and the number is increasing steadily. Predictions suggest that 174 million people in China will be living with diabetes by 2045.

For over 15 years now, we have already been supplying China with our products, such as the reusable ServoPen and YpsoPen and very recently also our disposable UnoPen. To realise further growth potential, we are building a new production site in Changzhou – in China for China. We are investing in a first stage over CHF 35 million in the project and, after one year of construction, the production plant is expected to go into operation in the second half of 2024. At the start of production, some 50 employees will be employed by our Ypsomed Manufacturing Co., Ltd, and this number will grow continuously as production capacity expands.

Groundbreaking ceremony in Changzhou, China

In China for China

With the start on our manufacturing plant in China, we will be closer to our Chinese customers and in a position to work more flexibly with our partners locally. We wish to supply the Chinese market long-term – and to do this we need to be established locally to be successful in this challenging market in the long run. Production in China strengthens the trust we receive from our partners by manufacturing locally and thus supplying the market there directly. Furthermore, regulations for product registration and the requirements for approval can change rapidly in China. By being local, we will be in a better position to respond to these changes.

At the same time, we shorten and secure the supply chains, which in turn is a more sustainable approach. We save resources, emissions, time and costs for logistics and the shipping of our products and can respond even faster to customer-specific requests.

Our platform products, which are based on our fully automated and flexible assembly lines, support both high annual capacities as well as orders for smaller quantities. We can thus respond quickly to market demand to further expand our production capacities in China in the coming years in a modular and demand-oriented manner.

Tried and tested extension of our workbench

We are investing in the most modern, fully automated assembly lines from Europe for our production site in China. The centrepiece of injection moulding manufacturing, the specific injection tools for the manufacture of the pen components, will continue to be manufactured at the headquarters in Burgdorf. The entire production setup will take place under the guidance of our experts from Switzerland. By doing this, we are repeating the approach we have already taken for our production plant in Schwerin. We will be installing the same systems in China that we have constantly optimised, even perfected, over the years in Switzerland. While setting up a new production site in China, process development and know-how will remain firmly anchored in Switzerland in the future. The training of new employees is largely conducted at our locations in Switzerland, in Burgdorf and in Solothurn. We impart the necessary expertise here, familiarise them with our values and corporate culture, and thus ensure the transfer of knowledge from Switzerland to China.

The new location in China has no negative impact on the existing facilities. The size of the Solothurn location remains unchanged. Capacities that are now freed up in Solothurn are used for customers who are geographically closer to us.

The Changzhou location

Through cooperation with a Chinese consulting firm, we have found a location that is very well suited for our purposes: the city of Changzhou is located in the Yangtze River Delta, to the west of the metropolis of Shanghai and, with a population of over five million, is an up-and-coming trade and industrial location which ideally meets our criteria for a suitable production site. Due to our high demands on quality and our automated production processes, it was particularly important for us to be able to find and retain well-trained staff for the long term when choosing a location.

We view our first production location outside Europe, combined with a new culture, a new language and a different mentality, as a tremendous opportunity and are extremely positive about the development.

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In the financial year 2022/23, we achieved a sales growth of CHF 32.6 million.

The operating result (EBIT) amounted to CHF 60.6 million. The net profit amounts to CHF 51.3 million.

Profitable growth

In the financial year 2022/23, we achieved consolidated sales of CHF 497.5 million (previous year: CHF 464.8 million). Ypsomed realised a satisfying growth of CHF 32.6 million or about 7% during the reporting period. At constant exchange rates compared to the previous year, it would have been an increase of around 10% or about CHF 47 million. The divestment of the diabetes specialist DiaExpert in Germany on 31 December 2022 had a significant impact. We achieved a growth of around 16% or about 19% in constant currency with our continuing business, excluding DiaExpert.

Ypsomed doubled the operating profit (EBIT) to CHF 60.6 million (previous year: CHF 28.6 million) and doubled the net profit as well reaching CHF 51.3 million (previous year: CHF 23.1 million).

The pen and autoinjector business steadily grew by over 20%

The Ypsomed Delivery Systems (YDS) segment increased by 18.8% or CHF 48.8 million in the financial year 2022/23. The turnover for the reporting period amounts to CHF 307.8 million (previous year: CHF 259.0 million).

• Particulary pleasing was the performance of deliveries in the business with own injection systems with a growth of 25.3%. The main contributors to this growth were the YpsoMate 2.25 for larger volumes, the YpsoMate 1.0 and the two reusable insulin pens.
• Based on our continuously increasing project and order pipeline, project revenues also increased by another 14%. Project revenues include customer-specific adaptations of our standardised platform products as well as deliveries for clinical studies for the approval of new products.
• The acquisition of new projects continues to be successful, both with existing and new pharmaceutical customers. Another 35 new project orders were concluded in the reporting period.
• Sales in the Contract Manufacturing segment were 3.0% above the previous year's level. Turnover with Sanofi makes up 8.7% of the Group's turnover.

Strong growth of mylife YpsoPump with algorithm

In the Ypsomed Diabetes Care (YDC) segment, we recorded a decrease in turnover by 7.4% or CHF 14.0 million to CHF 173.5 million in the financial year 2022/23. In the continuing business, without DiaExpert, we achieved a growth of 13.3%.

• Sales for mylife YpsoPump improved by a remarkable 120% or more than 130% at constant exchange rates. The successful launch in summer 2022 of our solution for automated insulin delivery, mylife Loop, with a selflearning algorithm in collaboration with our partner CamDiab Ltd. generated significant demand.
• The recorded project revenues were significantly lower compared to the previous year. Eli Lilly has terminated the partnership in the insulin pump business for the US market before the next milestone payment was reached. As per 31 March 2022 accrued project revenue of approximately CHF 9 million had to be reversed in the reporting period. This, however, without affecting the operating result as we continue to aim for FDA approval and therefore capitalise the project costs. Ypsomed remains committed to its US strategy with a new partner.
• The Italian Ministry of Health demands that budget overruns of the regional authorities shall be recovered retroactively for the years 2015–2018 from each supplier. Ypsomed takes legal action against this procedure. Anyhow, a provision in the amount of CHF 3 million was recognised against net sales.
• The pen needle business increased slightly by 4.3% in the reporting period, while the blood glucose monitoring systems business continues to decline at a low level.

Other segment

In the segment Others, which consists of our subsidiary Ypsotec and real estate not used for operational purposes, the sales decreased by 12% to CHF 16.1 million (previous year: CHF 18.3 million) due to a volatile business environment.

Significantly higher gross margin

The gross margin improved considerably to 28.3% (previous year: 24.5%), due to higher sales. However the gross margin is still impacted by the expansion and the ongoing, continued ramp up of additional capacities at our production site in Schwerin.

Encouraging earnings contribution from the pen and autoinjector business

The operating profit for the financial year 2022/23 grew significantly and amounted CHF 60.6 million (previous year: CHF 28.6 million). The following factors have affected the result in the period under review:

• The increase in turnover and higher production capacity utilisation as well as continued high project revenues at Ypsomed Delivery Systems made a positive contribution to earnings.
• The operational business with the mylife YpsoPump burdens the result with CHF – 50.6 million (previous year: CHF –51.3 million). The improved result was negatively affected by about CHF 15 million of additional costs. They include strengthening the global marketing and sales organisation as well as the maintenance and support of the systems. Furthermore, higher depreciations and amortisations related to new product features account for additional CHF 5 million of costs.
• The provision for the claims of the Italian authorities reduce the results by about CHF 3 million.
• We achieved a gain on divestment of DiaExpert of approximately CHF 17 million.
• The decline in sales at Ypsotec decreases the results by approximately CHF 2 million.

In the 2022/23 financial year, we generated a net profit of CHF 51.3 million (previous year: CHF 23.1 million). The net profit margin doubled to 10.3% (previous year: 5.0%). The earnings per share are CHF 3.82 (previous year: CHF 1.83).

Continued high growth investments

In the financial year 2022/23, Ypsomed generated an operating cash flow from operating activities of CHF 129.5 million (previous year: CHF 85.7 million). The cash flow from investing activities remained at the previous year's level at CHF 122.0 million (previous year: CHF 125.7 million), with a net cash inflow of CHF 46.0 million from the divestment of DiaExpert. Investments in fixed assets amounted to CHF 98.9 million (previous year: CHF 51.6 million). In particular for doubling the capacities for YpsoMate 1.0 and the ongoing implementation for doubling the capacities for UnoPen, as well as expansions of other operating infrastructure. Investments in intangible assets amounted to CHF 70.3 million (previous year: CHF 75.8 million) and were made in favour of the further development of platforms for pen and autoinjector systems, smartphone apps, digital services in the field of smart services as well as the FDA approval for the US pump market.

On 13 June 2022, the board of directors decided to carry out a capital increase from authorised capital in the amount of a maximum of one million fully paid registered shares with a nominal value of CHF 14.15 each. As part of the offering, one million new registered shares were successfully placed with both existing and new shareholders.

The shareholder loans from Techpharma Management AG, respectively Willy Michel, were offset by CHF 85.0 million. The outstanding shareholder loan of CHF 25.0 million was fully repaid in October 2022. Our short-term financial liabilities to banks remain unchanged at CHF 157.0 million (previous year: CHF 157.0 million). Ypsomed's overall equity amounts to CHF 562.3 million (previous year: CHF 392.5 million). The equity ratio increased to 65.2% (previous year: 51.9%).

Constant dividend policy

In July 2022, in line with our constant dividend policy, we distributed CHF 8.2 million in dividends to our shareholders. The dividend was paid half from retained earnings and the other half from tax-privileged capital contribution reserves. The board of directors will propose to the Annual General Meeting a dividend of CHF 1.30 per share (previous year: CHF 0.60) for the financial year 2022/23, with half of the dividend paid from retained earnings and the other half from capital contribution reserves.

The Annual General Meeting of Ypsomed Holding AG will be held on 28 June 2023, in Burgdorf.

Consolidated income statement

(Audited Swiss GAAP FER figures) in thousand CHF	Notes	01 April 2022– 31 March 2023	in %	01 April 2021– 31 March 2022	in %
Sales of goods and services	21	497460	100.0%	464841	100.0%
Cost of goods and services sold		–356868	–71.7%	–351024	–75.5%
Gross profit		140591	28.3%	113817	24.5%
Marketing and sales expenses		–77074	–15.5%	–66391	–14.3%
Administration expenses		–26219	–5.3%	–23029	–5.0%
Other operating income	1	24521	4.9%	5073	1.1%
Other operating expenses		–1225	–0.2%	–891	–0.2%
Operating profit	21	60594	12.2%	28579	6.1%
Financial income	18	3164	0.6%	3045	0.7%
Financial expenses	19	–7121	–1.4%	–6083	–1.3%
Profit before income taxes		56637	11.4%	25540	5.5%
Income taxes	20	–5362	–1.1%	–2435	–0.5%
Net profit		51275	10.3%	23105	5.0%
Earnings per share (diluted and undiluted) in CHF	25	3.82		1.83
Operating profit		60594		28579
Depreciation and impairment of fixed assets		41810		40273
Amortisation and impairment of intangible assets		36750		27808
EBITDA (operating profit before depreciation and amortisation)		139154	28.0%	96660	20.8%

Consolidated balance sheet

(Audited Swiss GAAP FER figures) in thousand CHF

Assets	Notes	31 March 2023	in %	31 March 2022	in %
Cash and cash equivalents	4	25224	2.9%	17038	2.3%
Trade receivables	5	93336	10.8%	86986	11.5%
Other current assets		15624	1.8%	8338	1.1%
Accrued income and prepayments		15053	1.7%	10672	1.4%
Current income tax assets		66	0.0%	164	0.0%
Inventories	6	57704	6.7%	68299	9.0%
Customer machinery		1319	0.2%	2086	0.3%
Total current assets		208327	24.2%	193584	25.6%
Financial assets	7	2639	0.3%	2642	0.3%
Deferred income tax assets	20	31498	3.7%	33756	4.5%
Fixed assets	8	387677	45.0%	336150	44.4%
Intangible assets	9	231738	26.9%	190779	25.2%
Total non-current assets		653552	75.8%	563327	74.4%
Total assets		861879	100.0%	756910	100.0%
Liabilities and equity	Notes	31 March 2023	in %	31 March 2022	in %
Financial liabilities	11	157000	18.2%	157000	20.7%
Trade payables		19620	2.3%	17386	2.3%
Prepayments from customers		23918	2.8%	19544	2.6%
Current income tax payable	20	2239	0.3%	182	0.0%
Other payables		8101	0.9%	3608	0.5%
Accrued liabilities and deferred income		44284	5.1%	36789	4.9%
Provisions (short-dated)	13	3826	0.4%	2827	0.4%
Total current liabilities		258988	30.0%	237336	31.4%
Non-current liabilities to major shareholder	11	0	0.0%	110000	14.5%
State-subsidised payments	12	7976	0.9%	7739	1.0%
Other long-term liabilities		20234	2.3%	0	0.0%
Provisions (long-term)	13	9839	1.1%	6512	0.9%
Deferred income tax liabilities	13	2510	0.3%	2783	0.4%
Total non-current liabilities		40558	4.7%	127034	16.8%
Share capital	14	193144	22.4%	178994	23.6%
Capital reserves		206291	23.9%	104313	13.8%
Treasury shares		–167	–0.0%	0	0.0%
Translation differences		–25736	–3.0%	–23283	–3.1%
Goodwill offset		–313788	–36.4%	–322892	–42.7%
Retained earnings		502587	58.3%	455407	60.2%
Total equity		562333	65.2%	392540	51.9%
Total liabilities and equity		861879	100.0%	756910	100.0%

Consolidated statement of cash flows

(Audited Swiss GAAP FER figures) in thousand CHF	Notes	01 April 2022– 31 March 2023	01 April 2021– 31 March 2022
Net profit		51275	23105
Depreciation and amortisation of fixed and intangible assets		78560	68081
Change in provisions (incl. deferred income taxes)	13/20	6624	1514
Other expenses/income that do not affect the fund		–287	134
Income from disposal of non-current assets incl. investments and marketable securities	1/20	–17424	294
Increase (–)/decrease (+) in trade receivables		–18329	–16432
Increase (–)/decrease (+) in other receivables and prepayments and accrued income		–13368	5430
Increase (–)/decrease (+) in inventories1		–4304	–5919
Increase (–)/decrease (+) in customer machinery		767	–562
Increase (+)/decrease (–) in trade payables		5612	2016
Increase (+)/decrease (–) in prepayments from customers		4374	162
Increase (+)/decrease (–) in other payables and accrued liabilities and deferred income		15798	7883
Increase (+)/decrease (–) in other long-term liabilities		20234	0
Cash flow from operating activities		129531	85706
Disposal of financial assets and securities	7	0	2841
Purchases of fixed assets	8	–98878	–51592
Disposals of fixed assets	8	355	51
Purchases of intangible assets 1	9	–70295	–75838
Acquisition of subsidiaries less cash and cash equivalents acquired	2	0	–1162
Divestment of investment less cash and cash equivalents sold	1	45954	0
State-subsidised payments	12	845	0
Cash flow from investing activities		–122019	–125700
Proceeds from capital increase (incl. share premium)		35154	0
Proceeds of borrowings from major shareholder	11	0	77500
Proceeds of borrowings from banks		48000	2000
Repayment of borrowings from major shareholder	11	–25003	0
Repayment of short-dated financial liabilities to banks		–48000	–27500
Purchase of own shares		–1757	–263
Disposals of own shares	14/16	1061	1054
Distribution of capital reserves and retained earnings		–8190	–14667
Cash flow from financing activities		1265	38125
Effect of foreign currency translation		–591	–412
Total cash flow		8186	–2281
Cash and cash equivalents as of 01 April		17038	19320
Cash and cash equivalents as of 31 March		25224	17038

¹ Eli Lilly has terminated the partnership in the insulin pump business for the US market. The related development-/registration costs were accrued as net sales according to the percentage of completion (POCM cost-to-cost method). As of 31 March 2022, approximately CHF 9 million were reported under inventories. The costs relating to the approval of a base pump system for the US market were capitalised as intangible assets in the reporting period, as Ypsomed is adhering to its US strategy.

Consolidated statement of changes in equity

(Audited Swiss GAAP FER figures) in thousand CHF

	Share capital	Group reserves and share premium	Treasury shares	Currency translation differences	Goodwill offset	Retained earnings	Total
Balance as of 01 April 2021	178994	111433	-957	–10829	–322892	439635	395385
Net profit						23105	23105
Dividend payout from capital contribution reserves		–7333					–7333
Dividend payout from retained earnings						–7333	–7333
Purchase of own shares			–263				–263
Disposals of own shares		215	1219				1434
Currency translation differences				–12454			–12454
Balance as of 31 March 2022	178994	104313	0	–23283	–322892	455407	392540

		Group
	Share capital	reserves and share premium	Treasury shares	Currency translation differences	Goodwill offset	Retained earnings	Total
Balance as of 01 April 2022	178994	104313	0	–23283	–322892	455407	392540
Capital increase	14150	106004					120154
Recognition in profit or loss due to disposal1				2204	9104		11308
Net profit						51275	51275
Dividend payout from capital contribution reserves		–4095					–4095
Dividend payout from retained earnings						–4095	–4095
Purchase of own shares			–1745				–1745
Disposals of own shares		69	1578				1647
Currency translation differences				–4658			–4658
Balance as of 31 March 2023	193144	206291	–167	–25736	–313788	502587	562333

¹ The cumulative currency translation differences and goodwill are derecognized from equity and form part of the gain or loss on disposal, which is reported other operating income.

Share capital increase of Ypsomed Holding AG in June 2022

On 13 June 2022, the Board of Directors decided to execute a capital increase from authorised capital. In the course of the offering, all new registered shares were placed with both existing and new shareholders. At the offer price of CHF 122.50, the transaction volume amounts to CHF 122.5 million. Shareholder loans in the amount of CHF 85.0 million were offset. Prior to the capital increase, all loans of Techpharma Management AG (a company controlled by Willy Michel) were transferred to Willy Michel. The net proceeds from the capital increase, after deduction of the transaction costs of CHF 2.3 million, totalled CHF 120.2 million (whereas CHF 35.2 million in cash). The share capital now consists of 13 649 739 registered shares with a nominal value of CHF 14.15 each.

1. General information

Ypsomed Holding AG is a limited company (Aktiengesellschaft) established on 29 December 2003 under Swiss law with registered offices in Burgdorf (canton of Bern, Switzerland).

Operating in the field of medical technology, the Ypsomed Group is a leading independent manufacturer of injection pens for pharmaceutical and biotech companies, and of products for people with diabetes, such as insulin pumps, pen needles and blood glucose monitoring systems. Ypsomed's core manufacturing 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 Tábor (CZ) and – in expansion – Schwerin (DE) and has a global sales and distribution network. The shares of Ypsomed Holding AG have been traded on SIX Swiss Exchange since 2004.

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 expanded into the injection systems business in 1986.

The consolidated financial statements were approved for issue by the Board of Directors on 16 May 2023 and recommended for acceptance to the Annual General Meeting of Shareholders in Burgdorf on 28 June 2023.

2. Fundamental accounting and assessment methods

Principles

The Ypsomed Group has decided to apply the new or adapted accounting standards of Swiss GAAP FER 28 (government grants) and Swiss GAAP FER 30 (consolidated financial statements) ahead of time. The early application of these principles ensures that the Ypsomed Group already complies with the future requirements of Swiss GAAP FER and thus guarantees uniform and transparent accounting. The early application affects, among other things, the disclosure of government grants in the cash flow statement. Overall, the changes have a positive impact on the financial reporting and enable a better comparability with other companies. The early application of the aforementioned principles has no impact on the financial position or performance.

The consolidated financial statements have been prepared in accordance with the Swiss accounting and reporting recommendations of Swiss GAAP FER according to the principle of "true and fair view". They are based on the financial statements of the company prepared for the same reporting period using consistent accounting policies. The group's reporting currency is the Swiss Franc (CHF). The period under review comprises twelve months and ends 31 March.

The accompanying consolidated financial statements are published in German and English. The German version is legally binding.

All figures included in these financial statements and notes to the financial statements are rounded to the nearest CHF 1 000 except where otherwise indicated.

Consolidation

Subsidiaries: Subsidiaries are all entities over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or tradable can also 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 recognised using the purchase method. The consideration encompasses the compensation transferred in exchange for obtaining control over the identifiable assets, liabilities and contingent liabilities of the company acquired. 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. The net assets acquired, comprising of identifiable assets, liabilities and contingent liabilities, are recognised at their fair value. Goodwill is recognised as of the acquisition date and is measured as the excess of the consideration transferred as described over and above the fair value of the identified net assets. If the group does not acquire 100% of the shares of a company, the minority interest in equity is to be disclosed separately under equity.

Transactions, balances and gains on transactions between subsidiaries are eliminated. Losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.

In the event of a company being sold, the goodwill previously recorded under equity will be booked out and recorded in the income statement as part of the proceeds from the disposal.

Associates: Associated companies are those companies that are significantly influenced but not controlled by the group. This normally applies to investments in which the group owns between 20% and 50%. Investments in affiliated companies are accounted for using the equity method. The group's investment in associates includes goodwill identified on acquisition. Ypsomed does not currently have any investments in associated companies.

Foreign currency translation

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 recognised as financial income or expenses (individual financial statements).

In the consolidated financial statement, assets and liabilities of foreign subsidiaries are converted into Swiss francs at year-end exchange rates. Equity is converted with historical exchange rates. The income statement 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 non-currency congruent financed equity-like corporate loans denominated in foreign currencies are to be recognised in the equity, with no effect on the income statement. In the sale of a foreign subsidiary, the previously recognised cumulative translation differences in equity are derecognised and recorded in the income statement as part of the proceeds from the disposal.

Cash

Cash and cash equivalents comprise of cash on hand, demand deposits and time deposits with a residual term to maturity from the balance sheet date of 90 days at the most. They form the basis of the consolidated statement of cash flows.

Trade receivables/

other receivables as well as long-term receivables

Trade receivables, other receivables as well as long-term receivables are valued at the nominal amount less impairment, if any. 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 recognised at cost, semi-finished and finished goods at their production cost. Discounts are recognised as a reduction in the purchase price. Manufacturing costs include the associated direct production costs and production overheads. If the acquisition or manufacturing costs are higher than the net market value, an impairment loss is recorded on the income statement in the current period to write the inventories down to the net market value (lower of cost or market principle). Net market value is equivalent to the current market price less the usual sales deductions, marketing costs and administrative costs yet to be incurred. 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 machinery 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 as current assets until acceptance of the machinery. The prepayments from customers are recognised in current liabilities. Once the machinery is accepted, the advance and final payments from Ypsomed are settled with the prepayments.

Fixed assets

Fixed assets are carried at historical acquisition or manufacturing cost, with depreciation calculated using the straight-line method based on the following estimated useful lives:

Land	no depreciation
New buildings	30 to 40 years
Special buildings	20 to 30 years
High voltage current, sanitary, lifts	20 years
Heating/ventilation/
air-conditioning, floors	10 to 15 years
Production machinery	8 to 12 years
Measuring and inspection equipment	3 to 8 years
Software and hardware	3 to 5 years
Furniture, vehicles	5 to 8 years

Depreciation is included in the following income statement categories: manufacturing costs of goods sold, marketing and distribution costs, administration costs and other operating expenses. 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.

Value-enhancing expenditures are capitalised if the market value or the value in use increases as a result.

Long-term leasing contracts, which are, in substance, equivalent to the purchase of assets with long-term financing (financial leasing), are recognised at the beginning of the lease as an asset and measured at net market value/acquisition cost or, if lower, at the present cost of the leasing payments. The asset is depreciated in line with its useful economic life.

Investment properties are reported at cost of acquirement minus depreciation. The period of depreciation is calculated according to the category of asset.

Intangible assets

Goodwill: Net assets taken over in an acquisition are to be valued at actual values and any surplus of acquisition cost over the newly valued net assets is to be designated as goodwill (purchase price allocation). The goodwill is to be offset at the date of acquisition, the negative goodwill (badwill) is to be attributed to the equity. The effects of a theoretical capitalisation are to be disclosed in the notes, please refer to note 10.

Development costs: Development costs are capitalised if an intangible asset can be identified, finished, marketed or used internally, if it is controlled by the Ypsomed Group, if it is expected to provide the Ypsomed Group with an economic benefit over several years and if its costs can be reliably determined.

Capitalised development costs are amortised straightline over their useful economic life up to nine years after the beginning of marketing. The amortisation is included in the manufacturing costs of products and services sold. Costs accrued for development projects are tested for impairment on an annual basis.

Other intangible assets: Patents are carried at acquisition cost and amortised over their estimated useful lives up to 20 years. Amortisation is included in the costs of research and development that are integrated in the manufacturing costs of products and services sold.

Software is capitalised on the basis of the costs incurred to acquire the software and bring the software to use. These costs are amortised over the estimated useful life of three to five years using the straight-line method. Amortisation is mainly included in marketing&sales and administration expenses. Intangible assets, such as brand names or customer relationships that were acquired through a business combination and can be identified separately, are reported if they fulfil the definition of an intangible asset. The acquisition costs of such intangible assets correspond to their fair value at the time of acquisition. The value thereafter is measured at acquisition cost minus accumulated amortisation and impairment. The useful life is estimated at five to eight years. Amortisation is included in marketing and distribution costs.

Leasing

In the case of leasing transactions, a distinction is made between finance leasing and operational leasing. Finance leasing exists when substantially all risks and rewards incidental to the ownership of an asset are transferred. Assets and liabilities from finance leasing are shown in the balance sheet.

Leasing liabilities from operating leasing that cannot be terminated within one year are shown in Appendix 23 to the consolidated financial statement.

Financial assets

Financial assets are recognised at acquisition cost less impairment, if any. Impairment is recorded in profit or loss for the current period.

Impairment of assets

All assets are reviewed as of each balance sheet date for indications of impairment. If there are indications that an asset may be impaired, the recoverable amount of the asset is determined and the impairment loss is estimated. Should the estimated recoverable amount of the asset, which is equivalent to the higher of net market value and the value in use of the asset, be lower than the asset's book value, an adjustment is made to the income statement to reduce the book value of the asset to the estimated recoverable amount in the same period in which the impairment was discovered. Net market value is the price obtainable between independent third parties less the associated selling expenses. Value in use is based on the estimated future cash flows resulting from the use of the asset, including any possible cash flow at the end of the useful life, discounted using an appropriate long-term interest rate.

Financial liabilities

Financial liabilities are measured at its nominal amount.

Capacity reservation fees

Pharmaceutical partners reserve production capacities for the pen and autoinjector platforms by means of contractually agreed advance payments. These are accrued on an accrual basis. The terms of the contracts are between three and ten years. Sales are recognised over this period. The current portion of CHF 4.8 million (sales within twelve months after the balance sheet date) is presented under "Accrued liabilities and deferred income", the noncurrent portion of CHF 20.2 million under "Other longterm liabilities".

Provisions

Provisions are established when a legal or de facto obligation arising from previous events exists that will likely result in a cash outflow and this cash outflow can be reliably estimated. The provisions established represent the best possible estimate of the final obligation. Longterm provisions are discounted to their present values, provided that the impact is material. The subdivision into short-term and long-term provisions is based on whether utilisation is assumed to be probable within one year or at a later time.

Possible obligations whose existence requires confirmation by future events or obligations whose amount cannot be reliably estimated are disclosed in the notes to the financial statements as contingent liabilities.

State-subsidised grants

State-subsidised payments are shown as liabilities, which are reversed proportionately according to the specific depreciable life of the respective tangible fixed asset item that was qualified as state-subsidy. The reversal is posted net after deducting the cost of depreciation. The statesubsidised payments are disclosed within "cash flow from investing activities" in the consolidated statement of cash flows as they only consist of asset-related grants.

Pension benefit obligations

The pension benefit obligations of the group companies in respect of old age, death and disability comply with the statutory provisions and regulations in the respective countries. The employees of the Swiss companies have a legally independent pension fund for retirement, death and disability. The pension funds are financed by employer and employee contributions (defined contribution plan). The actual economic impact of pension plans on the company is calculated as of the balance sheet date. An economic benefit is capitalised, provided it will be available to reduce the company's future pension expenses. An economic obligation is recognised as a liability if the conditions for establishing a provision are met. Any unconditionally available employer contribution reserves are recognised as assets. The economic impacts of surpluses or deficits in the pension funds on the group as well as a change in any employer contribution reserves are recognised as profit or loss and reported as personnel expenses in addition to the contributions deferred to the reporting period.

Current income taxes

Income taxes are calculated based on reported profits and in conformity with the tax laws prevailing in the individual countries and recognised in profit or loss of the current period.

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 recognised 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 recognised in the consolidated income statement. Taxes on transactions that are reported in equity are also recognised in equity.

Net sales and sales recognition

Net sales: Sales consist of all sales proceeds attained from the delivery of goods and the provision of services to third parties after deducting discounts, rebates, cash discounts and value-added taxes. Sales proceeds are always included in the income statement as soon as the delivery of the goods has taken place and benefit and risk have been transferred to the buyer or the service has been rendered. Net sales also comprise of income from the provision of research, development, industrialisation and marketing services.

Other operating income: Other operating income primarily includes rental income arising from the leasing of properties owned by the Ypsomed Group, licencing income arising from the use of Ypsomed assets by external third parties and proceeds from the disposal of fixed and intangible assets as well as investments.

Long-term contracts: Development and industrialisation projects are accounted for according to the percentageof-completion method (POCM) if the respective criteria are met. Services and costs are correspondingly considered according to the degree of completion (cost-to-cost method) so that any profit is taken into consideration proportionally. The degree of completion for the services provided is calculated by determining the difference between the costs incurred and the costs expected for the whole order. If the criteria for the application of POCM are not met, the respective revenue is disclosed according to the amount of the realisable cost (without recognising any profit). However, respective losses and nonrecoverable costs are debited directly and reduces the profit of the financial year. The long-term contracted projects according to POCM are disclosed within the reporting lines inventories, trade receivables and prepayments from customers.

Research and development costs

Research costs are routinely included in the manufacturing costs of the products and services sold.

Development costs are capitalised if an intangible asset can be identified, finished, marketed or used internally, if it is controlled by the Ypsomed Group, if it is expected to provide the Ypsomed Group with an economic benefit over several years and if its costs can be reliably determined.

Borrowing costs

Borrowing costs are charged directly to the income statement.

Derivative financial instruments

Derivative financial instruments are entered into for hedging purposes and carried at market value. The adjustment of the changes in market value is recorded in the same way as for the underlying transaction.

3. Risk assessment

The management of the Ypsomed Group carries out a comprehensive risk assessment at least once a year. This standardised process is based on a risk inventory that encompasses the relevant risk categories such as strategic risks, management risks, general risks in the operating business, legal risks, systemic risks, financial risks (including market, credit and liquidity risks) and event risks (including political, regulatory, fiscal and external risks). The fundamental risks are assessed with regard to probability of occurrence and impact and both management and the Board of Directors decide on measures to be taken and monitor their implementation according to predetermined criteria.

4. Legal risks

The Ypsomed Group develops innovative platform technologies, produces customer-friendly medical devices, sells and supplies these to various customers in numerous countries and protects the technologies developed by Ypsomed in several countries. Ypsomed's business activities are exposed to numerous legal risks that could have a negative effect on the course of business, the financial situation or the competitiveness of the group.

Competitive pressure in the pharmaceutical sector has increased significantly with the emergence of new drug forms (generics, biosimilars), the medical device sector in general and infusion and injection systems in particular have also been affected. Regular legal disputes regarding the validity and alleged or actual infringement of intellectual property rights by drugs or medical devices, tightening of the regulatory environment, uncertainties and delays in the approval of new drugs and medical devices, cost-saving measures in the health sector, in particular reimbursements from health insurance funds, as well as risks in connection with product liability and data liability cohesive with infringement of individual-related data inclusive health data are risks to which Ypsomed is also exposed, in particular with its platform technology products. Furthermore, possible terminations of existing contracts of important suppliers or important customers and disputes in the context of the settlement of contractual relationships could impair Ypsomed's business development.

5. Key estimates and assumptions

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 of assets and liabilities shown in the balance sheet on the balance sheet date 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:

Capitalised development costs

The development expenses are capitalised when the requirements for the capitalisation are met. Ypsomed's estimation of future economic benefits is based on management's assumptions with regard to the economic baseline conditions, expected prospective cash flows and the expected period of time in which economic benefits are targeted. Capitalised development expenses as of 31 March 2023 amount to CHF 201.2 million (previous year: CHF 156.5 million).

Provisions for warranties

When determining the provisions for warranties, management takes into account 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. As of 31 March 2023, Ypsomed discloses provisions for warranties of CHF 7.1 million (previous year: CHF 5.2 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. With the capitalisation of deferred tax assets from losses carried forward, the value of these tax loss carryforwards and the tax rates to be applied must be estimated. Deferred income tax assets related to tax loss carryforwards as of 31 March 2023 amount to CHF 11.9 million. (previous year: CHF 11.7 million).

6. Impact of the COVID-19 pandemic on business

Ypsomed is a manufacturer of drug delivery systems that are classified as important drugs under the COVID-19 regime (for example insulin). In the insulin pump business, new pump starts were difficult in prior year as hospitals and diabetes centres continued to run a COVID-19-focused operation. In 2022/23 the situation normalised which enabled a satisfying increase in new pump starts. In the area of injection systems no significant impact occurred on deliveries of injection systems for approved drugs. Projects with pharmaceutical partners normalised and no material delays e.g. in studies or approvals, are noticeables.

7. Impact of the Ukraine crisis

The war between Ukraine and Russia shows a significant impact on the economies of both countries and beyond. While deliveries to pharmaceutical and biotech companies in Russia are at the reporting date not affected by sanctions, this may change over time. Ypsomed meets its obligations in a logistically challenging environment and supplies pharmaceutical companies with life-saving insulin pens. Future negative effects on Ypsomed, for example as a result of possible payment restrictions, cannot be excluded.

Alternative Performance Measures

Ypsomed's annual report in accordance with SWISS GAAP FER is enhanced by additional key financial figures that are not defined in SWISS GAAP FER. These are mainly EBIT and EBITDA.

EBIT and EBITDA

Ypsomed's EBITDA equals operating profit before amortisation, depreciation and impairment of tangible and intangible assets, whereas EBIT stands for operating profit. Ypsomed feels confident that both EBIT and EBITDA represent substantial financial ratios that allow for a comparison with other corporations with regard to different Capitalisation – or legal set-ups and therefore different interest- and tax rates. In addition, the ratios enable drawing comparisons to enterprises with differently occurring amortisation, depreciation and impairment of both tangible and intangible assets.

in thousand CHF	01 April 2022– 31 March 2023	01 April 2021– 31 March 2022
Operating profit	60594	28579
EBIT	60594	28579
Depreciation and impairment of fixed assets, refer to note 8.	42187	40656
Dissolved state-subsidies, refer to note 12.	–377	–383
Amortisation and impairment of intangible assets, refer to note 9.	36750	27808
EBITDA (operating profit before depreciation and amortisation)	139154	96660

Notes to the consolidated financial statements

In thousand CHF, unless otherwise stated.

1. Divestment DiaExpert GmbH

As of 31 December 2022 DiaExpert GmbH was sold to Mediq Groupe. DiaExpert is an established specialist and mail order company for the care of people with diabetes (exclusively) in Germany, with the specialisation of insulin pump therapies and was an important part of the Ypsomed Diabetes Care segment. With the sale DiaExpert will remain as a helpful companion to clients and health care providers and will continue its services. Ypsomed will increasingly focus on the development, production and distribution of own high-quality medical and technical products for people with chronic diseases.

Net sales and EBIT from discontinued operations	2022/23	2021/22
Net sales	56980	84567
Operating result	3928	4340
Assets and liabilities sold of	2022/23
Trade receivables	10924
Inventories	5323
Other current assets	3220
Fixed assets	2944
Current liabilities	–4728
Non-current liabilities	–7286
Net inflow of cash	2022/23
Consideration received in the form of cash	40723
Repayment of financial liabilities	6890
Cash and cash equivalents disposed of	–1659
Total net cash inflow	45954
Other operating income	2022/23	2021/22
Gain on sale DiaExpert GmbH	17294	0
Other operating income	7227	5073
Total other operating income	24521	5073

Profit and loss transfer agreement Ypsomed GmbH and DiaExpert GmbH

As of the balance sheet date, the profit and loss transfer for the abbreviated fiscal year 01 April to 31 December 2022 of DiaExpert GmbH to Ypsomed GmbH has not yet been completed. Legally, this result must flow to Ypsomed GmbH. As the annual result 01 April to 31 December 2022 less taxes has already been paid by means of the purchase price to Ypsomed GmbH by the purchaser, this must be passed on. This circumstance is shown gross. The receivable from DiaExpert GmbH of approximately CHF 3.5 million is recognised as "other current assets". The net liability to the buyer in the amount of CHF 2.5 million is shown as "other payables", the ordinary income taxes from the DiaExpert business as "current income tax payable".

2. Consolidation scope

	Interest held capital/votes		Share capital	Research & Development	Production	Marketing & Sales	Financing & Services
Ypsomed Holding AG, CH-Burgdorf		CHF	193143807
Ypsomed AG, CH-Burgdorf	100%	CHF	10000000
TecPharma Licensing AG, CH-Burgdorf	100%	CHF	100000
Ypsomed Immobilien AG, CH-Burgdorf 3	100%	CHF	200000
Ypsotec AG, CH-Grenchen	100%	CHF	1000000
Ypsotec s.r.o., CZ-Tábor	100%	CZK	33200000
Ypsomed GmbH, DE-Liederbach	100%	EUR	100000
Ypsomed Produktion GmbH, DE-Schwerin	100%	EUR	23000000
Ypsomed Distribution GmbH, DE-Rheinfelden	100%	EUR	25000
Ypsomed AB, SE-Solna	100%	SEK	10000000
Ypsomed S.A.S., FR-Paris	100%	EUR	1000000
Ypsomed BV, NL-Nieuwegein	100%	EUR	50000
Ypsomed India Private Ltd., IN-New Delhi	100%	INR	172316470
Ypsomed Ltd., UK-Escrick	100%	GBP	300000
Ypsomed GmbH, AT-Vienna	100%	EUR	35000
Ypsomed S.r.l., IT-Milano	100%	EUR	50000
Ypsomed Australia Pty Ltd., AU-Sydney	100%	AUD	700000
Ypsomed s.r.o., CZ-Prague	100%	CZK	5000000
Ypsomed Polska Sp. z o.o., PL-Warsaw	100%	PLN	1000000
Ypsomed BV, BE-Brussels	100%	EUR	300000
Ypsomed Diabetes S.L., ES-Barcelona	100%	EUR	500000
Ypsomed Canada inc., CA-Pointe Claire	100%	CAD	1000000
Ypsomed AS, NO-Drammen	100%	NOK	2000000
Ypsomed Oy, FI-Masala	100%	EUR	50000
Ypsomed ApS, DK-Copenhagen	100%	DKK	50000
Ypsomed Inc., US-Dover	100%	USD	100000
Ypsomed Software S.L., ES-Barcelona 2	100%	EUR	250000
Ypsomed Medical Devices Co. Ltd., CN-Beijing	100%	CHF	250000
Ypsomed Manufacturing Co., Ltd., CN-Changzhou 1	100%	EUR	8000000

¹ As of 24 October 2022, Ypsomed Manufacturing Co., Ltd. was founded with headquarters in Changzhou, China. The subsidiary will primarily manufacture pens for the Chinese market. The capital amounts to EUR 13.35 million, of which EUR 8 million has been paid in.

As of 31 December 2022 DiaExpert GmbH was sold in full and as a result deconsolidated.

² As of June 2021 Ypsomed Software S.L. was founded in Barcelona.

³ As of April 2021 Burkhard-Dreier AG, based in Burgdorf, was acquired and renamed to Ypsomed Immobilien AG.

3. Foreign currencies

	Balance sheet year-end rates			Income statement average rates
	31 March 2023	31 March 2022	2022/23	2021/22
Euro (EUR)	0.99	1.02	0.99	1.07
US Dollar (USD)	0.92	0.93	0.95	0.92
Swedish Krona (100SEK)	8.82	9.98	9.20	10.43
Norwegian Krone (100NOK)	8.74	10.63	9.60	10.58
Danish Krone (100DKK)	13.32	13.86	13.36	14.35
Czech Koruna (100CZK)	4.23	4.09	4.08	4.22
Indian Rupee (100INR)	1.11	1.22	1.19	1.23
British Pound sterling (GBP)	1.13	1.22	1.15	1.26
Australian Dollar (AUD)	0.61	0.69	0.65	0.68
Polish Zloty (100PLN)	21.21	21.48	21.12	23.29
Canadian Dollar (CAD)	0.68	0.74	0.72	0.73
Chinese Yuan Renminbi (100CNY)	13.31	14.64	13.94	14.31

4. Cash and cash equivalents

	31 March 2023	31 March 2022
Cash	897	406
Postal accounts	747	1179
Bank accounts	23581	15453
Total	25224	17038

5. Trade receivables

	31 March 2023	31 March 2022
Trade receivables	93772	87976
Provision for bad and doubtful debts	–435	–990
Total	93336	86986

Provision for bad and doubtful debts	2022/23	2021/22
At 01 April	990	435
Addition of provision	158	892
Use of provision of booked up trade receivables	–39	–27
Reversal of unneeded provisions	–7	–280
Disposal scope of consolidation	–812	0
Currency translation differences	146	–31
At 31 March	435	990

6. Inventories

	31 March 2023	31 March 2022
Raw materials and supplies	12243	8979
Goods in process	27604	33183
Finished products	19464	27597
Gross inventories	59310	69759
Valuation allowance	–1607	–1461
Total	57704	68299

7. Financial assets

Financial assets	31 March 2023	31 March 2022
CeQur SA, Switzerland	2500	2500
Other financial assets	139	142
Total	2639	2642

CeQur SA is in the commercialisation phase of a wearable, purely mechanical patch for bolus delivery of insulin.

8. Fixed assets

At 01 April 2021 128464 448074 26694 21420 13953 Initial consolidation 1250 Additions 1716 17032 2833 28502 454 Disposals –135 –14853 –2391 Transfers 287 17506 255 –18894 Currency translation differences –2490 –6322 –455 –558 At 31 March 2022 129092 461436 26935 30470 14407 Accumulated depreciation At 01 April 2021 –52803 –227953 –17699 0 –5771 Depreciation –3922 –32870 –3433 –431 Disposals 135 14853 2312 Currency translation differences 168 946 276 At 31 March 2022 –56422 –245024 –18543 0 –6202 Net book value at 01 April 2021 75661 220121 8995 21420 8182 Net book value at 31 March 2022 72670 216412 8392 30470 8205 Cost value At 01 April 2022 129092 461436 26935 30470 14407 Additions 1068 27439 4776 65016 419 Disposals –3624 –1154 Disposal scope of consolidation –2494 –1833 Transfers 506 21399 404 –22511 –70 Currency translation differences –686 –2140 –151 –762 At 31 March 2023 129980 502016 28978 72212 14756 Accumulated depreciation At 01 April 2022 –56422 –245024 –18543 0 –6202 Depreciation –3909 –34286 –3528 –464 Disposals 3437 1058 Disposal scope of consolidation 1779 1439 Currency translation differences 27 274 98 At 31 March 2023 –60304 –273819 –19476 0 –6666 Net book value at 01 April 2022 72670 216412 8392 30470 8205 Net book value at 31 March 2023 69676 228197 9502 72212 8090	Cost value	Land and buildings	Machinery and equipment	Other fixed assets	Assets under construction	Buildings for investment purposes	Total
							638605
							1250
							50537
							–17379
							–847
							–9826
							662340
							–304227
							–40656
							17301
							1391
							–326191
							334379
							336150
							662340
							98717
							–4778
							–4327
							–272
							–3738
							747943
							–326191
							–42187
							4495
							3218
							398
							–360266
							336150
							387677

There are no pledges as security for loans. Gains on the sale of tangible assets in the financial year 2022/23 amounted to CHF 0.1 million (previous year: CHF 0.0 million) and are included in other operating income in the income statement.

In the reporting period, our manufacturing capacity for the YpsoMate and UnoPen platforms was expanded in Germany and Switzerland.

9. Intangible assets

	Development			Client base/
Cost value	costs	Patents	Software	Other	Total
At 01 April 2021	217900	20660	47406	11952	297918
Additions	54365		3613		57977
Disposals			–3693	–16	–3709
Transfers	4		842		847
Currency translation differences	–804		–323	–339	–1467
At 31 March 2022	271465	20660	47844	11597	351566
Accumulated amortisation
At 01 April 2021	–93038	–660	–31599	–11892	–137190
Amortisation	–21954		–5823	–30	–27808
Disposals			3693	12	3705
Currency translation differences	65		104	336	505
At 31 March 2022	–114928	–660	–33626	–11574	–160787
Net book value at 01 April 2021	124862	20000	15806	61	160728
Net book value at 31 March 2022	156538	20000	14218	23	190779
Cost value At 01 April 2022 Additions	271465 73868	20660 2283	47844 3549	11597 0	351566 79700
Disposals	–904		–6506		–7410
Disposal scope of consolidation			–3656	–973	–4630
Transfers	114		157		272
Currency translation differences	–361		–113	–123	–598
At 31 March 2023	344183	22943	41274	10'500	418900
Accumulated amortisation
At 01 April 2022	–114928	–660	–33626	–11574	–160787
Amortisation	–28953	–2522	–5254	–21	–36750
Disposals	904		6506		7410
Disposal scope of consolidation			1791	973	2764
Currency translation differences	32		47	123	201
At 31 March 2023	–142944	–3182	–30537	–10499	–187162
		20000	14218	23	190779
Net book value at 01 April 2022	156538

Capitalised development costs include products in the development phase amounting to CHF 129.3 million (previous year: CHF 87.2 million), products in the industrialisation phase amounting to CHF 10.0 million (previous year: CHF 10.6 million), products in the pre-launch phase amounting to CHF 0.0 million (previous year: CHF 4.0 million) and products in the marketing phase amounting to CHF 62.0 million (previous year: CHF 54.7 million).

Eli Lilly has terminated the partnership in the insulin pump business for the US market. The related development-/ registration costs were accrued as net sales according to the percentage of completion (POCM cost-to-cost method). As of 31 March 2022, approximately CHF 9 million were reported under inventories. The costs relating to the approval of a base pump system for the US market were capitalised as intangible assets in the reporting period, as Ypsomed is adhering to its US strategy.

10. Goodwill not reported in the balance sheet

Acquired goodwill – the difference between acquisition costs and the recalculated current value of all net assets acquired – is offset directly against equity at the time of acquisition of a participation or business. Theoretical capitalisation of goodwill and amortisation over five years would produce the following stated values under assets and scheduled amortisation of goodwill in the income statement:

Cost value	2022/23	2021/22
At 01 April	322931	323776
Disposal scope of consolidation	–7520
Currency translation differences	–530	–845
At 31 March	314881	322931
Accumulated amortisation
At 01 April	–322931	–323776
Disposal scope of consolidation	7520
Amortisation, scheduled amortisation over 5 years	0	0
Currency translation differences	530	845
At 31 March	–314881	–322931
Net book value at 01 April	0	0
Net book value at 31 March	0	0

The value of acquired goodwill would have been completely amortised if the same had been hypothetically capitalised.

11. Financial liabilities

	31 March 2023	31 March 2022
Fixed advances banks (current)	157000	157000
Long-term loan from Techpharma Management AG, Burgdorf	0	110000

The fixed advances of the banks were granted to Ypsomed Holding AG and Ypsomed AG with a term of up to 12 months. The average interest rate is 1.2%. As at 31 March 2023, the maximum credit line for fixed advances was CHF 265 million. Interest of CHF 1.9 million (previous year: CHF 1.7 million) was paid on fixed advances in 2022/23.

At the beginning of fiscal year 2022/23, the shareholder loan of Techpharma Management AG totaled CHF 110 million. Prior to the capital increase carried out in June 2022, all loans of Techpharma Management AG (a company controlled by Willy Michel) were transferred to Willy Michel. The shareholder loans of main shareholder Willy Michel were offset in the amount of CHF 85.0 million upon the exercise of its subscription rights (offsetting). The remaining CHF 25.0 million were repaid in October 2022.

As of March 2022, Techpharma Management AG has granted a total of CHF 110 million divided into three shareholder loans. The new loan of CHF 55 million granted in the previous year bears interest at 0.3 %. The interest rate on a further loan in the amount of CHF 45 million was at 0.7 %. This loan was fully utilised throughout the previous year. The third loan, which was also fully utilised for the entire year in the previous year amounted to CHF 10 million at the 12-month saron CHF as published by the Swiss National Bank plus 0.5 %, but at least 0.7 %.

The interest rates charged in each case remained stable up to the repayment. The interests at 0.7% in the remaining CHF 25 million accumulated to CHF 0.2 million (previous year: CHF 0.4 million) until the repayment to Techpharma Management AG, respectively Willy Michel, took place.

12. State-subsidised grants

Ypsomed receives state-subsidies – granted by the German federal state of Mecklenburg-Vorpommern from funds of the joint expenditure "Improvement of the regional economic structure" – that is fully related to the set-up of the manufacturing site in Schwerin (DE), i.e. the construction of the building and the procurement of movable assets. The overall amount of these state-subsidies amounts EUR 9.8 million at most, and they are dependent on the ultimate amount of investment.

	2022/23	2021/22
At 01 April	7739	8757
Funds received	845	0
Partial reversal of subsidies	–377	–383
Currency translation differences	–231	–635
At 31 March	7976	7739

In the financial year 2022/23, Ypsomed received subsidies in the amount of CHF 0.8 million (previous year: CHF 0.0 million). The subsidies are carried as liabilities and released in line with the depreciation period of the respective subsidised asset. The conditions for receiving the subsidies were met on the reporting date.

13. Provisions /Deferred tax liabilities

			From pension
	Taxes	Warranties	plans	Restructuring	Other	Total
At 01 April 2021	2539	4445	0	0	4144	11128
Additions	254	2946			1167	4114
Initial consolidation					80	80
Release	–9	–697			–325	–1754
Utilisation		–1528			–810	–2338
Currency translation differences	–1				–82	–82
At 31 March 2022	2783	5165	0	0	4174	12122
of which current	0	2223	0	0	604	2827
At 01 April 2022	2783	5165	0	0	4174	12122
Additions	184	3689			3941	7813
Disposal scope of consolidation					–487	–487
Release	–455	–72			–274	–801
Utilisation		–1660			–776	–2436
Currency translation differences	–1				–36	–37
At 31 March 2023	2510	7123	0	0	6542	16175
of which current	0	3133	0	0	693	3826

Warranties

There is a risk that medical products developed, distributed 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 warranties and also to replacement costs for withdrawn products. The company's management bases these provisions on the estimated potential warranty 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 and, in particular, on the general development of the pharmaceutical 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.

Provisions for warranties cover any warranty claims that may occur for products on the market. The provisions extend for the average life of the products, which is between one and five years, depending on the product, and are also determined by the best possible assessment of the risk of a claim for each product category.

Other provisions

During the fiscal year 2022/23, the Italian Ministry of Health reactivated a legislative decree that was retroactive for the years 2015–2018. With the so-called "payback" system, the regional authorities can recover their budget overruns in aforementioned years for medical devices supplied based on this decree from the suppliers. Like numerous companies in the medical device industry, Ypsomed filed an objection to this procedure. In this context, a provision in the amount of CHF 2.9 million was recognised against net sales.

The other items are based on estimates and mainly include provisions for long-service benefits of employees. In the financial year 2022/23, CHF 0.5 million of provisions for long-service benefits of employees were derecognised in connection with the sale of DiaExpert GmbH. In addition, CHF 1.0 million was accrued, CHF 0.2 million released and CHF 0.6 million used. As of 31 March 2023, provisions for long-service benefits of employees amounted to CHF 2.9 million (previous year: CHF 3.2 million).

14. Share capital

Share capital (in thousand CHF)	2022/23	2021/22
At 01 April	178994	178994
Capital increase	14150
At 31 March	193144	178994
Shares issued at 31 March	13649739	12649739
Treasury shares at 31 March	1000	0
Shares outstanding at 01 April	12649739	12642953
Capital increase	1000000
Purchase number of shares	9254	1531
Average price in CHF	189	171.6
Disposal number of shares	8254	8317
Average price in CHF	201	172.4
Shares outstanding at 31 March	13648739	12649739

On 13 June 2022, the Board of Directors decided to execute a capital increase from authorised capital, which was created by the resolution of the Annual General Meeting of 30 June 2021, in the amount of a maximum of 1 million fully paid registered shares with a nominal value of CHF 14.15 each. In the course of the offering, all new registered shares were placed with both existing and new shareholders. The share capital now consists of 1349739 (previous year: 12649739) registered shares with a nominal value of CHF 14.15 each. As of 31 March 2023, Ypsomed group including the employee pension fund held 18 721 treasury shares (previous year: 16456).

Non-distributable reserves

Non-distributable reserves in the group's shareholders' equity amounted to CHF 38.6 million at the end of the reporting period (previous year: CHF 35.8 million).

15. Long-term contracts according to Percentage-of-Completion-Method (POCM)

	2022/23	2021/22
Revenue from development and industrialisation services (POCM)	29419	44282
Long-term contracts according to POCM in the balance sheet	31 March 2023	31 March 2022
Trade receivables	5960	9796
Inventories	1620	11152
Prepayments from customers	–19640	–17317

Eli Lilly has terminated the partnership in the insulin pump business for the US market. Development/registration costs associated with this were previously accrued as net sales according to the percentage of completion method and were included as an offsetting entry in inventories. As of 31 March 2022, these amounted to approximately CHF 9 million. Agreed additional milestones had not yet been met at the time of termination and accordingly these deferred net revenues from prior years had to be reversed.

16. Personnel expenses

	2022/23	%	2021/22	%
Wages and salaries	194495	83.7	176657	84.9
Social security expenses	30504	13.1	26849	12.9
Other personnel expenses	7382	3.2	4542	2.2
Total	232381	100.0	208048	100.0

Employees of Ypsomed AG were able to purchase shares of Ypsomed Holding AG at preferential conditions. All employees of who were in an employment relationship without notice at the time of the offer were entitled to acquire shares in Ypsomed Holding AG amounting to 90% of one month's salary.

The purchase price offered on 01 December 2022 corresponded to the average of all daily share prices for the months of September, October and November 2022 minus a discount of 20%. Partly due to tax considerations, the acquired shares cannot be sold during a blocking period of 3 years.

Ypsomed employees acquired a total of 8 254 Ypsomed Holding AG shares at the special price of CHF 128.49. The nominal discount per share on the grant date (date of origination of purchase agreement between Ypsomed AG and the employee, 08 December 2022) amounts to CHF 72.51. CHF 0.6 million is therefore reported under "Wages and salaries" (previous year: CHF 0.4 million).

Personnel at 31 March (full-time equivalents)	31 March 2023	31 March 2022
Australia	16	13
Belgium	1	2
China	8	7
Denmark	3	3
Germany	237	284
Finland	4	3
France	51	41
India	6	6
Italy	13	10
Canada	9	10
Netherlands	13	8
Norway	1	1
Austria	5	5
Poland	2	2
Sweden	8	6
Switzerland	1397	1294
Spain	73	17
Czechia	103	97
United Kingdom	26	21
United States of America	4	2
Total	1978	1831
Headcount	2059	1923

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17. Employee pensions

Within the group, there are various employee pension plans, of which most employees are members. For the companies abroad and one company in Switzerland, there are pension plans for which the obligation to provide benefits such as retirement, death or invalidity benefits lies with a state institution and/or an insurance company. For the pension plan of Ypsomed AG representing a proportion of 67% of the group's workforce as at 31 March 2023, there is a separate pension scheme set up in accordance with the Swiss Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans (BVG) and independent of the group. As at 31 March 2023, the pension scheme held a value fluctuation reserve of CHF 18.8 million (previous year: CHF 43.8 million). As in the

previous year, there were no non committed funds as per 31 March 2023. In the reporting period, the calculated coverage ratio was 106.9% within the meaning of art. 44 of the Ordinance on Occupational Retirement, Survivors' and Disability Pension Plans (BVV2), based on a technical interest rate of 1.0% and BVG 2020 (previous year: 116.9%, technical interest rate 1.0% and BVG 2020). Pension costs as part of personnel expense correspond to the standard contribution payments by the group companies involved.

	Surplus/deficit	Economic benefit/obligation		Contributions concerning the business period		Pension benefit expenses within personnel expenses
	31.03.2023	31.03.2023	31.03.2022	2022/23	2022/23	2021/22
Pension institutions without surplus/deficit	0	0	0	9998	9998	8683
Pension institutions without own assets	0	0	0	1124	1124	1158

Per end of the financial years 2022/23 and 2021/22, there were no employer contribution reserves existing.

18. Financial income

	2022/23	2021/22
Interest income	23	10
Gains from sale of securities	0	2
Foreign exchange gains	3140	2952
Dividends/other financial income	1	80
Total	3164	3045

19. Financial expenses

	2022/23	2021/22
Interest expenses	2088	2050
Loss from sale of securities	0	263
Foreign exchange losses	4811	3555
Other financial expenses	222	215
Total	7121	6083

20. Income taxes

	2022/23	2021/22
Current income taxes	3756	1675
Deferred income taxes	1606	761
Total	5362	2435
Weighted average tax rate in %	9.5%	9.5%
Weighted average tax rate in % without special item	14.3%	9.5%

The Group benefits from reduced tax rates at Ypsomed AG, which are subject to annual changes. In Switzerland, the Tax Reform and AHV Financing (STAF) was adopted, which are now affecting the Swiss Group companies. The aim of the STAF is to create an internationally compliant and competitive tax system for companies. Privileged taxation is no longer in conformity with the law. The Ypsomed Group can, among other things, obtain tax relief in this system for research and development activities as well as for patents. Tax rates of individual companies within the group may vary. Differences in the allocation of earnings to the companies also affects the effective, both in the international environment and between the cantons of Bern and Solothurn.

Ypsomed AG is benefitting from reduced tax rates due to the STAF. Deferred tax effects on the development of temporary differences as well as the offsetting of loss carryforwards are recognised at future tax rate of 11.275%, taking advantage of the maximum STAF relief.

At Ypsomed Produktion GmbH, losses incurred in connection with the set-up of production are recognised as deferred tax assets at a tax rate of 32%.

Special effects in current taxes (current year 2022/23) In the reporting period the gain on sale of DiaExpert GmbH, DE-Liederbach in the amount of CHF 17.3 million was taxed at a priviliged rate in Germany and resulted in taxes in the amount of CHF 0.3 million.

The group average tax rate used to calculate deferred income tax is 13.8% (previous year: 12.9%).

Special effects in deferred taxes

As at 31 December 2019, intercompany sales of trademarks and patents of TecPharma Licensing AG to Ypsomed AG amounted to CHF 242.0 million. In the 2019/20 financial year, ordinary current taxes of CHF 21.5 million were due on the gain of this intercompany transaction. At Group level, there are valuation differences due to sales of brands and patents within the group, as the brands and patents were capitalised by Ypsomed AG. Since 01 January 2020, these are amortised linearly for tax purposes over 10 years. As per 31 March 2023, the deferred income tax assets on this transaction amounted to CHF 18.4 million (31 March 2022: CHF 21.1 million). These were assessed at the future income tax rate of 11.275%, taking advantage of the maximum STAF relief.

31 March 2023 31 March 2022

Total capitalised deferred tax assets	31498	33756
of which temporary differences	19589	22091
of which not yet utilised tax-loss carryforwards	11910	11665

Deferred income tax assets from unused tax loss carryforwards are only capitalised if it is highly probable that future taxable profits will be generated. In the financial year 2022/23, deferred income tax assets on expired and thus unusable loss carryforwards in the amount of CHF 0.4 million were reversed (previous year: CHF 0.0 million). CHF 2.8 million (previous year: CHF 2.3 million) in assets were created for newly incurred losses. CHF 2.3 million (previous year: CHF 0.3 million) of the deferred tax assets from loss carryforwards were used by offsetting profits.

Deferred income tax assets are recognised on 80% (previous year: 98%) of the total loss carryforwards of CHF 67.7 million (previous year: CHF 67.9 million). From the usable loss carryforwads in Switzerland in the amount of CHF 8.9 million, CHF 8.3 million from the value adjustment of the receivable against Insulet Corp. cannot be offset against cantonal and communal taxes. This is because Ypsomed Distribution AG was taxed at a priviliged rate in the past. In the case of federal taxes, however, these can be fully offset.

At Ypsomed AG, CHF 3.5 million of losses carried forward were used for cantonal and communal taxes to reduce the taxation of the entry into the patent box for individual pens and autoinjectors.

21. Segment information

Ypsomed discloses net sales from the perspective of sales structures, according to Ypsomed Delivery Systems (YDS: injection systems) and Ypsomed Diabetes Care (YDC: insulin pumps, infusion sets, pen needles, blood glucose monitoring systems and other accessories). The YDS division provides pharmaceutical and biotech customers with injection systems and related services. This is a B2B business which is handled directly from the headquarters in Burgdorf. In the YDC area, the products are sold directly to hospitals, doctors, pharmacies and patients via Ypsomed subsidiaries and distributors. The segment Others comprises Ypsotec and properties not used for operational purposes.

Due to possible competitive disadvantages, segment results are not disclosed in accordance with Swiss GAAP FER 31/8. Compared to relevant competitors in the field of injection systems and insulin pumps, this results in significantly higher transparency with regard to the cost and margin structure, and Ypsomed would be the only company to provide detailed segment profitability information. Most of the relevant competitors are companies without publicly available financial information (Owen Mumford and SHL Group), or large companies with large reporting segments and diluted comparative information (Roche and Medtronic). Accordingly, disclosure of such information would result in a significant competitive disadvantage compared to competitors. In addition, such information can have a negative impact on the negotiating position towards customers and suppliers.

		2209	–2209	0
173530	307807	16122		497460
Ypsomed Diabetes Care	Ypsomed Delivery Systems	Others	Eliminations	Group
				68081
				108514
				6.1%
				28579
187490	259036	20187	–1871	464841
		1871	–1871	0
187490	259036	18316		464841
Ypsomed Diabetes Care	Ypsomed Delivery Systems	Others	Eliminations	Group

Operating profit 60594 EBIT margin 12.2% Investments in fixed and intangible assets 178417 Depreciation/Amortisation/Impairment 78560

Financial report

Sales of goods and services by regions	2022/23	2021/22
Switzerland	60801	42427
Europe	308875	296625
North America	39811	41192
Rest of the World	87973	84597
Total	497460	464841

Sales of goods and services are reported by geographical location in accordance with the invoice address. The sales of injection systems to biotech and pharmaceutical partners are made mainly to their European group companies. These companies market the products worldwide.

22. Contingent liabilities

Ypsomed has indefinite contingent liabilities (mainly guarantees) from current business activities with regard to third parties to the amount of CHF 3.8 million (previous year: CHF 2.1 million). Ypsomed is of the opinion that it is unlikely that these contingent liabilities will be utilised. In addition, there are contingencies and commitments in the context of law cases that could occur in the course of normal business operations.

23. Leasing and contractual obligations

The maturities of the group's fixed operating leasing/rental liabilities that cannot be terminated within 12 months are as follows (undiscounted):

	31 March 2023 31 March 2022
Less than 1 year	2290	3343
1 to 5 years	6725	11003
Over 5 years	1470	3106
Total	10485	17452

The above overview includes a lease agreement concluded between Ypsomed AG and Techpharma Management AG, a company controlled by Willy Michel. The rent is based on an independent rental valuation, and starting from 01 June 2020 it amounts to CHF 840 000 per year plus VAT and is linked to the national consumer price index. The rental contract stipulates that small and standard maintenance work on the building shall be paid by the tenant up to a maximum amount of 2.0% of the annual rent per calendar year. The contract ends on 31 December 2029. The total obligation until expiry of the contract amounts to CHF 5.7 million. A significant part of the leasing obligations was reduced due to the sale of DiaExpert GmbH.

Further contractual obligations	31 March 2023 31 March 2022
Purchase commitments for products	10991	15378
Obligations for the purchase of fixed assets	72148	36039
Obligations for the purchase of intangible assets	1050	1811
Liabilities for miscellaneous purchasing	3159	589
Total	87348	53817

The increase for obligations for the acquisition of fixed assets is primarily related to the expansion (extension of hall, assembly facilities, injection moulding machines, etc.) at the manufacturing site of Ypsomed Produktion GmbH in Schwerin.

Financial report

24. Transactions with related parties

Related parties are Techpharma Management AG, TecMed AG and the employee pension funds. On the balance sheet date, trade receivables and advance payments to related parties amounted to CHF 1.1 million (previous year: CHF 1.1 million).

As in the previous year, there were no liabilities at the reporting date. The reporting year includes the following significant transactions with related parties:

Expenses	2022/23	2021/22
Techpharma Management AG (interest according to note 11)	178	365
Techpharma Management AG (compensation for rented business premises)	840	840
Techpharma Management AG (amounts in accordance with service contract)	34	17
Total expenses	1052	1222
Income/Sale of capitalised development expenditures
TecMed AG (development activities rendered regarding YpsoPod enhancement project since 01.01.2021) in sales of goods and services	11375	9076
Total income	11375	9076

Lease Agreement

Since 01 January 2006, Techpharma Management AG, which is controlled by Willy Michel, has rented the commercial property at Buchmattstrasse in Burgdorf to Ypsomed. The parties have signed this lease contract that stipulates i.e. an index-linked lease at arms' length; the determination of the lease has been reviewed and agreed by an independent assessor. The lease contract could be terminated on 31 December 2029 conditional upon a 24 months' notice, and after this date on any month. During the entire lease period, there is an unlimited purchase option for the lessee, which definitely will end after 25 years after the beginning of the lease. In addition, the lease contract stipulates that moderate and usual maintenance work amounting up to 2% of the annual lease per calendar year shall be borne by the lessee. More extensive maintenance expenses in order to preserve the substance of the building shall be borne by the lessor. Realised and with the hirer agreed modifications of the building shall be reimbursed upon the termination of the contract; the respective book values derive from the asset ledger by applying the respective depreciation rates according to Swiss GAAP FER. This lease contract was discussed and agreed by the Board of Directors who have obtained the opinion that the contract is at arm's length.

Further contractual relations

Techpharma Management AG, which is controlled by Willy Michel, and Ypsomed have concluded a framework service contract that can be terminated by either side at any time. This contract allows Techpharma Management AG for providing service as of needed basis to Ypsomed Group (e.g. hotel, catering) as well as selected management support services (including temporary labour leasing) and, for its part, for Ypsomed Group to offer occasional services Techpharma Management AG (e.g. management – and IT support, including temporary labour leasing). The required services are being invoiced at a prevailing market rate. This service contract was discussed and agreed by the Board of Directors who have obtained the opinion that the contracts is at arm's length.

Sale and the further development of YpsoPod development project

As of 01 January 2021, Ypsomed sold the development project YpsoPod (patch-pump technology) to TecMed AG, a company controlled by Willy Michel. This sale enabled Ypsomed to enhance the entrepreneurial freedom and to invest the resources by focusing on all activities, which contribute to profitability faster. Ypsomed has a preemption right if TecMed AG prospectively sells the YpsoPod in future. If Ypsomed is opting out the preemption right, then it could claim 20% earn-out. In addition, Ypsomed can repurchase the product at the respective stage of development.

As stipulated in a service contract, TecMed AG has mandated Ypsomed AG to enhance YpsoPod. Ypsomed charges occurring expenditures and processing services with a mark-up of 5%. The risks of the enhancement and industrialization bear TecMed AG. If TecMed AG outsources the production of YpsoPod, Ypsomed AG has the right to submit an offer. The corresponding contracts have been discussed and approved by the Board of Directors and, in the opinion of the Board of Directors, correspond to a cooperation customary in the market.

25. Earnings per share

The earnings per share are calculated by dividing the net profits by the monthly weighted number of outstanding shares during the period. Here, the average number of own shares held by the group companies is subtracted from the issued shares.

	2022/23	2021/22
Net profits in thousand CHF	51275	23105
Number of outstanding shares weighted on a monthly basis	13418662	12645041
Earnings per share in CHF (diluted and undiluted)	3.82	1.83

Subsequent events

There were no events after the balance sheet date that had a significant impact on the financial or earnings position.

Report of the group auditors

Report of the statutory auditor

to the General Meeting of Ypsomed Holding AG

Burgdorf

Report on the audit of the consolidated financial statements

We have audited the consolidated financial statements of Ypsomed Holding AG and its subsidiaries (the Group), which comprise the consolidated income statement for the financial year ended 31 March 2023, the consolidated balance sheet as at 31 March 2023, consolidated statement of cash flows and consolidated statement of changes in equity for the financial year then ended, the basis for the consolidated financial statements and notes to the consolidated financial statements

In our opinion, the consolidated financial statements (pages 54 to 63 and 65 to 82) give a true and fair view of the consolidated financial position of the Group as at 31 March 2023 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Swiss GAAP FER and comply with Swiss law.

Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor's responsibilities for the audit of the consolidated financial statements' section of our report. We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our audit approach

Overall Group materiality: CHF 3'600'000

We concluded full scope audit work at 5 Group companies in 2 countries. These Group companies contributed 90% of the Group's sales of goods and

As key audit matter the following area of focus has been identified:

Impairment of capitalized development costs

Materiality

The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due

PricewaterhouseCoopers AG, Bahnhofplatz 10, Postfach, 3001 Bern, Switzerland Telefon: +41 58 792 75 00, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial statements as a whole.

Overall Group materiality	CHF 3'600'000
Benchmark applied	Sales of goods and services
Rationale for the materiality benchmark applied	We chose sales of goods and services as the benchmark because, in our view, it is one of the benchmarks against which the performance of the group is most commonly measured, and it is a generally accepted benchmark for materiality considerations.

We agreed with the Audit & Risk Committee that we would report to them misstatements above CHF 360'000 identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons

Audit scope

We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial statements. In particular, we considered where subjective judgements were made; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

The Group comprises three business divisions (Ypsomed Delivery Systems, Ypsomed Diabetes Care, Others) and it is active in four regions, 'Switzerland', 'Europe', 'North America' and 'Rest of the World'. The Group financial statements are a consolidation of 29 reporting units, comprising the Group's operating businesses and centralised service and corporate functions.

The Group audit strategy was determined taking into account the work performed by the Group auditor as well as by the component auditors in the PwC network. In relying on the component auditors, we have ensured that their work provides sufficient appropriate audit evidence on the components' financial information as a basis for the Group audit opinion. This involvement of the Group auditor in the work of the component auditors was based on audit instructions and prestructured reporting. It also included the assessment of the risk assessments and reporting of the component auditors as well as various telephone conferences with them.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Impairment of capitalized development costs

Key audit matter

As at 31 March 2023, Ypsomed Group disclosed capitalized development costs in the amount of CHF 201.2 million (prior year: CHF 156.5 million). In this regard, we also refer to section 5 of the basis for the consolidated financial statements and in section 9 of the notes to the consolidated financial statements.

Capitalized development costs include products in the development phase in the amount of CHF 129.3 million (prior year: CHF 87.2 million), products in the industrialization phase of CHF 10.0 million (prior year: CHF 10.6 million), products in the pre-launch phase of CHF 0.0 million (prior year: CHF 4.0 million) and products in the marketing phase of CHF 62 million (prior year: CHF 54.7 million).

In order to test the development costs for impairment, management assesses the probability of any expected future economic benefits. We consider the impairment of capitalized development costs as a key audit matter, as the profitability analysis used for this purpose is substantially based on management estimates.

How our audit addressed the key audit matter

We tested the appropriateness of the Group's financial reporting in relation to the impairment of capitalized development costs

Based on the following audit procedures we tested how management made the accounting estimate in terms of the profitability analysis:

• . We compared the relevant parameters used in the profitability analysis with data sources of the group.
• . We assessed the accuracy of past plans by comparing them with the values, that actually occurred.
• · Furthermore, we evaluated how sensitively the calculations reacted to changes in the input parameters and whether the calculation models used were mathematically accurate.

We consider the profitability analysis applied by management to be an appropriate basis for the assessment of the impairment of capitalized development cost.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements, the consolidated financial statements, the remuneration report and our auditor's reports thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' responsibilities for the consolidated financial statements

The Board of Directors is responsible for the preparation of the consolidated financial statements, which give a true and fair view in accordance with Swiss GAAP FER and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is located on EXPERTsuisse's website: http://www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.

Report on other legal and regulatory requirements

In accordance with article 728a paragraph 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists which has been designed for the preparation of the consolidated financial statements according to the instructions of the

We recommend that the consolidated financial statements submitted to you be approved.

PricewaterhouseCoopers AG

Oliver Kuntze Licensed audit expert Auditor in charge

Bern, 16 May 2023

Astrit Mehmeti Licensed audit expert

Balance sheet of Ypsomed Holding AG – statutory financial statements

In thousand CHF

Assets	31 March 2023	31 March 2022
Cash	484	2291
Other short-term interest-bearing receivables from third parties	993	0
Other short-term receivables to third parties	35	19
Accrued income	31	384
Total current assets	1542	2694
Investments	301342	306144
Long-term receivables group companies	582957	601760
Total non-current assets	884299	907904
Total assets	885841	910598
Liabilities and equity	31 March 2023	31 March 2022
Trade payables third parties	56	60
Other short-term payables to third parties	0	16
Short-term financial liabilities to bank	104000	117000
Short-term financial liabilities to group companies	15203	15063
Accrued liabilities and deferred income	1140	1639
Current income taxes payable	28	54
Total current liabilities	120427	133833
Long-term interest-bearing financial liabilities to major shareholder (Techpharma Management AG, CH-Burgdorf) Total non-current liabilities	0 0	110000 110000
Total liabilities	120427	243833
Share capital	193144	178994
Statutory capital reserves
Capital contribution reserves	204466	102556
Disagio	–150	–150
Statutory retained earnings
General legal reserves	50	50
Reserve for treasury shares	167	0
Retained earnings	381053	393093
Net result	–13315	–7778
Treasury shares	0	0
Total shareholders' equity	765415	666765

Income statement of Ypsomed Holding AG – statutory financial statements

In thousand CHF

Operating expenses	01 April 2022– 31 March 2023	01 April 2021– 31 March 2022
Administrative expenses	1372	1247
Costs of services	700	700
Impairment of investment Ypsotec AG	4800	0
Impairment of long-term receivables Ypsotec AG	7693	0
Total operating expenses	14565	1947
Operating result	–14565	–1947
Financial income
Interest income third parties	14	0
Interest income investments	6438	3497
Dividend income	0	81
Income treasury shares	0	215
Foreign exchange gains realised and unrealised	156	26
Total financial income	6608	3819
Financial expense
Interest expense third parties	–1546	–1523
Interest expense investments	–141	–93
Securities expenses third incl. reversal of previous year's revaluation	0	–288
Expenses own shares	0	–1
Foreign exchange losses realised and unrealised	–3465	–7557
Other financial expenses	–20	–23
Total financial expenses	–5172	–9486
Financial result	1436	–5667
Result before taxes	–13129	–7614
Taxes	–186	–164
Net result	–13315	–7778

Notes to the statutory financial statements of Ypsomed Holding AG

General

The creation of the annual financial statements 2022/23 is in adherence to the regulations of the Swiss Reporting Authorisation (32nd title of Swiss Code of Obligations) Additional information in the notes to the annual financial statement, the cash flow statement and the situation report was dispensed with in accordance with art. 961d OR as Ypsomed Holding AG prepares a consolidated financial statement in accordance with a recognised standard for financial accounting.

Valuation principles

This annual financial statement was prepared in accordance with the provisions on commercial accounting of the Swiss Code of Obligations (art. 957–963b OR, applicable as of 01 January 2013).

Assets and liabilities

Assets are valued no higher than the purchasing costs, listed securities at market value. All changes in values are posted in the profit and loss results. No provisions are made for a fluctuation reserve. Liabilities are valued at their nominal value.

Investments and financial assets

Investments and financial assets are valued at acquisition costs less impairment. Value adjustments affecting net income are included in the results for the period.

Foreign currency translation

All assets and liabilities in foreign currencies are translated at the exchange rates applicable at the reporting date. The translation of income and expenses in foreign currencies as well as all transactions in foreign currencies are made at the exchange rates applicable on the respective transaction dates. The resulting differences in exchange rates are included in the profit and loss account.

Number of full-time equivalents

The annual average of full time equivalents was 0 – in both the reported financial year and the previous year.

Securities

The remaining shares of Bionime Corp. were sold in full in the previous year.

Direct investment

The investment in Ypsotec AG was impaired by an additional CHF 4.8 million (previous year: CHF 0.0 million) to a new value of CHF 0.0. The share in the investment in Ypsomed BV, BE-Brussels (0.34%) was sold to Ypsomed AG, Burgdorf at cost. Ypsomed AG is now the sole owner of Ypsomed BV, BE-Brussels (100%).

Long-term receivables group companies

The loan to Ypsotec AG amounts to CHF 27.2 million (previous year: CHF 21.9 million) and was impaired for the first time in the current financial year by CHF 7.7 million to a value of CHF 19.5 million. Additionally, a subordination of CHF 3.5 million was granted.

Long-term interest-bearing financial liabilities to major shareholder

The loan of Techpharma Management AG for a total of CHF 110.0 million was assigned to the private person Willy Michel in June 2022. With the capital increase of June 2022, the shares subscribed by Willy Michel were offset against the loan by means of a off-set in the amount of CHF 85.0 million. The remaining loan of Willy Michel in the amount of CHF 25.0 million was repaid in October 2022.

Derivative financial instruments

No transactions with derivative financial instruments were carried out in the reporting year.

Financial income

In the previous year resulted a financial expense of CHF 0.3 million due to the sale of Bionime. No transactions took place in the reporting year.

Financial expenses

The foreign currency valuation of the loan to Ypsomed Produktion GmbH resulted in an unrealised foreign currency loss of CHF – 3.5 million (previous year: CHF – 7.5 million)

Share capital

The share capital increase of a maximum of CHF 14150000 through the issuance of a maximum of 1000000 fully paid registered shares with a nominal value of CHF 14.15 each, as resolved at the AGM on 30 June 2021, was completed on time on 27 June 2022. The share capital amounting to CHF 193143806 (previous year: CHF 178993806) consists of 13649739 (previous year: 12649739) registered shares with a nominal value each of CHF 14.15 (previous year: CHF 14.15).

The reserves from capital contributions now amount to CHF 204.465 million (previous year: CHF 102.556 million).

This is after the contribution of the share premium of CHF 108.35 million, the costs of the capital increase of CHF –2.345 million and the payment of the dividend from capital contributions of CHF –4.095 million.

Impact of the COVID-19 pandemic on business

We refer to the consolidated financial statements on page 63.

Significant shareholders and shareholder groups

		31 March 2023		31 March 2022
	Number of shares	Capital and vote share	Number of shares	Capital and vote share
Shareholder group Michel family	10072139	73.8%	9324912	73.7%

As of 31 March 2023, no further notifiable holdings have been reported.

Treasury shares

		31 March 2023		31 March 2022
	Number of shares	Ø price (CHF)	Number of shares	Ø price (CHF)
Treasury shares at the beginning	0		6786
Purchase of treasury shares	0		1531	171.64
Disposal of treasury shares	0		–8317	172.40
Treasury shares held	0		0

The sale of treasury shares in the previous year was made at market value. Ypsomed AG owns 1 000 shares of Ypsomed Holding AG, which represents the reserve of treasury shares.

Direct investments

	31 March 2023			31 March 2022
	Capital and vote share	Book value (CHF)	Capital and vote share	Book value (CHF)
Ypsomed AG, CH-Burgdorf	100%	299812758	100%	299812758
Ypsotec AG, CH-Grenchen	100%	0	100%	4800000
TecPharma Licensing AG, CH-Burgdorf	100%	1529702	100%	1529702
Ypsomed BV, BE-Brussels	0%	0	0.34%	1177
Ypsomed India Private Ltd., IN-New Delhi	0.01%	0	0.01%	0
Total Investments		301342460		306143637

Indirect and substantial investments

	Holding by	Capital and vote share
		31 March 2023	31 March 2022
Ypsomed GmbH, DE-Liederbach	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed BV, NL-Nieuwegein	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed S.A.S., FR-Paris	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed AB, SE-Solna	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Produktion GmbH, DE-Schwerin	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed India Private Ltd., IN-New Delhi	Ypsomed AG, CH-Burgdorf	99.99%	99.99%
Ypsomed Ltd., UK-Escrick	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed GmbH, AT-Vienna	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed S.r.l., IT-Milano	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Medical Devices Co. Ltd., CN-Beijing	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Australia Pty Ltd., AU-Sydney	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed s.r.o., CZ-Prague	Ypsomed AG, CH-Burgdorf	100%	100%
DiaExpert GmbH, DE-Liederbach	Ypsomed GmbH, DE-Liederbach	0%	100%
Ypsotec s.r.o., CZ-Tábor	Ypsotec AG, CH-Grenchen	100%	100%
Ypsomed Polska Sp. z o.o., PL-Warsaw	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed BV, BE-Brussels	Ypsomed AG, CH-Burgdorf	100%	99.66%
Ypsomed Diabetes, S.L., ES-Barcelona	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Canada inc., CA-Pointe Claire	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed AS, NO-Drammen	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Oy, FI-Masala	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed ApS, DK-Copenhagen	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Inc., US-Dover	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Distribution GmbH, DE-Rheinfelden	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Immobilien AG, CH-Burgdorf	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Software S.L., ES-Barcelona	Ypsomed AG, CH-Burgdorf	100%	100%
Ypsomed Manufacturing Co., Ltd., CN-Changzhou	Ypsomed AG, CH-Burgdorf	100%	0%

In the reporting period Ypsomed Manufacturing Co., Ltd., CN-Changzhou was founded.

DiaExpert GmbH, DE-Liederbach, was completely sold on 31 December 2022.

Patronage agreements to investments

None

Securities, reserve for guarantees and collateral order in favour of third parties

In thousand CHF

B	31 March 2023 31 March 2022
Credit Suisse (Schweiz) AG, CH-Zurich, guarantee in connection with credit business for Ypsomed AG	87500	87500
BNP Paribas (Suisse) SA, CH-Geneva, guarantee in connection with tender transactions of subsidiaries	9925	10229

Long-term receivables group companies

In thousand CHF

B	31 March 2023 31 March 2022
Ypsomed AG, CH-Burgdorf	436802	476243
Ypsotec AG, CH-Grenchen, of which CHF 3.5 million with subordination	19549	21892
Ypsomed Produktion GmbH, DE-Schwerin	126606	103625
Total long-term receivables group companies	582957	601760

Investments held by the Board of Directors and members of Executive Board

As at 31 March 2023, executive and non-executive members of the Board of Directors, members of the Executive Board and persons closely linked to them held the following investments in total. No options on Ypsomed shares were held. Own shares held by the Ypsomed Group and shares of Ypsomed Holding AG held by the employee pension fund are not allocated to any member of the Board of Directors or Executive Board.

Share ownership of Board of Directors	31 March 2023 31 March 2022
Dr.h.c. Willy Michel, Chairman, until 29.06.2022		9009852
Indirect investments		9721
Total Willy Michel and indirectly held investments		9019573
Gilbert Achermann, Chairman, since 29.06.2022	10550	10550
Paul Fonteyne, Member	0	0
Dr. Martin Münchbach, Member	400	0
Betül Susamis Unaran, Member	0	0
Simon Michel, Member, since 29.06.2022	177496
Total shares Board of Directors	188446	9030123
Members of Executive Board
Simon Michel, Chief Executive Officer (CEO) and member of the Board of Directors	177496	164495
Dr. Beat Maurer, Chief Legal Officer (CLO) and secretary of the Board of Directors until 31.03.2023	695	695
Niklaus Ramseier, Chief Financial Officer (CFO) Hans Ulrich Lehmann, Senior Vice President Technology (CTO), until 30.09.2022	1356	1260 274
Ulrike Bauer, Chief Business Officer Ypsomed Delivery Systems (CBO YDS)	679	465
Dr. Eberhard Bauer, Senior Vice President Diabetes Care, until 31.03.2022		200
Frank Mengis, Chief Operating Officer (COO)	750	550
Michael Zaugg, Chief Corporate Officer (CCO)	26	25
Sébastien Delarive, Chief Business Officer Ypsomed Diabetes Care (CBO YDC), since 01.06.2022	838

Refer to the Corporate Governance on page 104 for details of the shareholder group Michel family and their share ownership.

Financial report

Proposed appropriation of available earnings and the proposed repayment of the legal capital reserve The Board of Directors proposes to the Annual General Meeting of Shareholders a distribution of the retained earnings and the legal capital reserve as follows:

In thousand CHF

B	31 March 2023	31 March 2022
Retained earnings	381220	393093
Allocation reserves for treasury shares	–167	0
Retained earnings brought forward after allocation of reserves for treasury shares	381053	393093
Net result	–13315	–7778
Retained earnings at disposal of the General Meeting of Shareholders	367738	385315
Distribution of dividend from retained earnings 1	–8872	–4095
Allotment from capital contribution reserves 1	8872	4095
Distribution of dividend from capital contribution reserves 1	–8872	–4095
Carried forward to the next year	358866	381220
Fully paid registered shares as of 31 March each at CHF 14.15 par value	13649739	12649739
1 million new shares issued in June 2022 were already entitled for dividends		1000000
Number of fully paid registered shares with a dividend entitlement of 14.15 each		13649739

¹ The Board of Directors proposes to the Annual General Meeting of Shareholders a dividend payment from retained earnings of CHF 0.65 (previous year: CHF 0.30) and a tax free distribution of capital contribution reserves in the amount of CHF 0.65 (previous year: CHF 0.30) per share. The total distribution based on the outstanding shares as of 31 March 2023 amounts to approximately CHF 17.7 million (previous year: CHF 8.2 million).

In the reporting period (June 2022), 1 000 000 new shares were issued as part of the capital increase carried out.

Report of the statutory auditors

Report of the statutory auditor

to the General Meeting of Ypsomed Holding AG

Burgdorf

Report on the audit of the financial statements

We have audited the financial statements of Ypsomed Holding AG (the Company), which comprise the balance sheet as at 31 March 2023, and the income statement for the year then ended, and notes to the statutory financial statements, including a summary of significant valuation principles.

In our opinion, the financial statements (pages to 87 bis 93) comply with Swiss law and the Company's articles of incorporation.

Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor's responsibilities for the audit of the financial statements' section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our audit approach

Overview

Overall materiality: CHF 7'000'000

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the industry in which the Company operates.

As key audit matter the following area of focus has been identified:

Impairment of investments and long-term receivables group companies

The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

PricewaterhouseCoopers AG, Bahnhofplatz 10, Postfach, 3001 Bern, Switzerland Telefon: +41 58 792 75 00, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.

Overall materiality	CHF 7'000'000
Benchmark applied	total assets
Rationale for the materiality benchmark applied	We chose total assets as the benchmark because, in our view, it is a relevant benchmark against which a holding company can be assessed, and it is a generally accepted benchmark for materiality considerations.

We agreed with the Audit & Risk Committee that we would report to them misstatements above CHF 360'000 identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative

Audit scope

We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we considered where subjective judgements were made; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Impairment of investments and intercompany loans

Key audit matter

As at 31 March 2023, Ypsomed Holding AG holds investments and long-term receivables group companies in the amount of kCHF 884'299 (prior year: kCHF 907'904).

To test the investments and long-term receivables group companies positions for impairment, management prepares medium-term plans. These medium-term plans form the basis for testing the impairment of investments and long-term receivables group companies' positions. These medium-term plans are substantially based on management estimates.

We consider the impairment of investments and long-term receivables group companies as a key audit matter due to their relevance to the financial position of Ypsomed Holding AG

This matter is presented in the statutory financial statements in the notes to the statutory financial statements in the «valuation principles to investments and financial assets» and «direct investment» as well as «long-term receivables group companies».

How our audit addressed the key audit matter

In order to test the appropriateness of the impairment assessment undertaken by management, we performed the following audit procedures:

• · We assessed the mathematical accuracy and consistency of the applied calculation models.
• · We assessed the accuracy of past planning by comparing it to what actually occurred.
• · Furthermore, we assessed whether the medium-term plans used in impairment testing were consistent with the planning data that was used in connection with the consolidated financial statements.

We consider the assessment procedures used by management to be an appropriate and adequate basis for the impairment testing of investments and long-term receivables group companies.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements, the consolidated financial statements, the remuneration report and our auditor's reports thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' responsibilities for the financial statements

The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse's website; http://www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.

Report on other legal and regulatory requirements

In accordance with article 728a paragraph 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists which has been designed for the preparation of the financial statements according to the instructions of the Board of Directors

We further confirm that the proposed appropriation of available earnings and the proposed repayment of the legal capital reserve comply with Swiss law and the Company's articles of incorporation. We recommend that the financial statements submitted to you be approved.

PricewaterhouseCoopers AG

Oliver Kuntze Licensed audit expert Auditor in charge

Astrit Mehmeti Licensed audit expert

Bern, 16 May 2023

Multi-year overview

In thousand CHF

A	2022/23	2021/22	2020/21	2019/20
Sales of goods and services 1	497460	464841	403656	394264
Gross profit	140591	113817	94827	90974
Gross profit in %	28.3%	24.5%	23.5%	23.1%
Operating profit	60594	28579	9269	9687
Operating profit in %	12.2%	6.1%	2.3%	2.5%
Net profit	51275	23105	5811	11734
Net profit in %	10.3%	5.0%	1.4%	3.0%
Depreciation of tangible assets	41810	40273	34053	30365
Amortisation of intangible assets	36750	27808	21972	22434
EBITDA2	139154	96660	65294	62486
EBITDA in %	28.0%	20.8%	16.2%	15.8%
Current assets	208327	193584	185141	189890
Non-current assets	653552	563327	532543	488351
Current liabilities	258988	237336	272377	276003
Non-current liabilities	40558	127034	49921	24579
Balance sheet total	861879	756910	717683	678240
Capital expenditure	–98717	–50537	–57197	–78155
Cash flow from operating activities	129531	85706	85828	49089
Cash flow from investing activities	–122019	–125700	–106914	–115834
Cash flow from financing activities	1265	38125	26669	68661
Issued shares at 31 March	13649739	12649739	12649739	12649739
Average shares outstanding	13418662	12645041	12612184	12602953
Earnings per share in CHF(basic/diluted)	3.82	1.83	0.46	0.93
Dividend per share (in CHF)	1.30	0.60	1.16	0.20
Book value per issued share (in CHF) 3	41.20	31.03	31.26	29.86
Share price: year's highest (in CHF)	205.50	193.00	162.80	160.00
Share price: year's lowest (in CHF)	121.60	138.20	112.40	102.40
Share price: year-end (in CHF)	192.40	163.00	158.60	125.00
Market capitalisation (in million CHF)	2626	2062	2006	1581
Average headcount	2060	1882	1799	1684
Average full-time equivalent	1967	1791	1712	1602
Year-end headcount	2059	1923	1824	1714
Year-end full-time equivalent	1978	1831	1737	1627
Sales per average full-time equivalent (in CHF)	252903	259543	235780	246107

¹ See basis for the consolidated financial statements on page 58.

² Operating profit before depreciation and amortisation.

³ The goodwill was offset with equity under Swiss GAAP FER.

The Corporate Governance report describes the management and control principles at the highest corporate level of Ypsomed Holding AG and its subsidiaries. This report is based on the directive of the SIX Swiss Exchange on corporate

governance.

Corporate Governance

The 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 SIX Swiss Exchange as of 29 June 2022 (Corporate Governance Directive) concerning information on corporate governance.

Ypsomed, with headquarters in Burgdorf, Switzerland, is a world leader in the field of injection systems for the administration of pharmaceutical substances. Ypsomed develops and produces its products primarily in Switzerland. Ypsomed injection systems are marketed by globally operating pharmaceutical and biotechnology companies. As part of its Diabetes Care business segment, Ypsomed focuses on self-medication products for patients with diabetes. The company's own infusion pumps, pen needles as well as infusion sets and commercial products purchased from third parties, in particular devices for the self-monitoring of blood glucose levels, are sold through the company's own distribution network and by independent distributors. The Ypsomed Group also includes Ypsotec, with headquarters in Grenchen and a subsidiary in Czechia, a supplier of precision-turned parts and components.

The Ypsomed Group's principles and regulations on Corporate Governance are defined in the Articles of Association, in the Organisational Regulations of Ypsomed Holding AG as well as the Code of Conduct of the Ypsomed Group and correspond to the Corporate Governance Directive. The organisational policy issued by the Board of Directors governs the duties, powers and responsibilities of the executive bodies of the Ypsomed Group, with the main features of this policy set out on page 112 under section "Definition of competences". Ypsomed Holding AG's Articles of Association (in German) can be ordered in printed form from the company or can be viewed on the company's website at www.ypsomed.com (under: www.ypsomed.com/articlesofassociation).

The Code of Conduct of the Ypsomed Group can be ordered in printed form from the company or can be viewed on the company's website at www.ypsomed.com (www.ypsomed.com/codeofconduct). Implementation of the basic principles and values laid down in the Code of Conduct is reviewed on an ongoing basis during the company's day-to-day business. To this purpose, the Board of Directors receives information on a regular basis regarding experiences with the Code of Conduct.

Group structure

Ypsomed Holding AG is organised as a holding company pursuant to Swiss law and directly or indirectly owns or controls all the companies that form part of the Ypsomed Group worldwide. None of Ypsomed Holding AG's subsidiaries are listed companies.

History of Ypsomed's development

Ypsomed was formed from what was previously Disetronic, which was founded in 1984 and had developed and produced infusion systems and also, from 1986, injection systems. On 30 April 2003, Roche Holding AG acquired the infusion business of Disetronic through a public tender offer. Willy Michel continued the injection business under the Ypsomed company name.

Listed group company

Ypsomed Holding AG, which has its headquarters in Burgdorf, Switzerland, is the parent company of the Ypsomed Group. It has a share capital of CHF 193143806.85, divided into 13649739 registered shares with a nominal value of CHF 14.15 each. Shares in Ypsomed Holding AG have been traded on the Domestic Standard of the Swiss Stock Exchange, the SIX Swiss Exchange, security number 1939699/ticker symbol: YPSN.

	Per 31 March 2023	Per 31 March 2022
Market capitalisation in CHF	2626209784	2061907457
In % of equity 1	467.0	525.3
Share price in CHF	192.40	163.00
Price/earnings ratio2	50.35	89.21

¹ Equity capital on 31 March 2023: kCHF 562333 Equity capital on 31 March 2022: kCHF 392540

<-- PDF CHUNK SEPARATOR -->

As of 01 October 2022, the operating organisational structure of the Ypsomed Group has been increasingly aligned with market requirements. In particular, product management and product development were merged into the two business areas Ypsomed Diabetes Care and Ypsomed Delivery Systems and the technology department, which previously accommodated product development, was disbanded. In addition to these two business areas, there are four supporting corporate areas: Operations, Corporate Services, Finance and Legal & Intellectual Property. The Executive Board members responsible for the Business Areas and Corporate Areas all report directly to the CEO. As a rule, two members of the Executive Board sit on the supreme body of each subsidiary. The Executive Board of Ypsotec reports directly to the CEO; the Executive Boards of the foreign sales companies and Ypsomed Software S.L.U., Barcelona (ES) report to the Executive Board member Chief Business Officer Ypsomed Diabetes

Care; the Executive Board of Ypsomed Medical Devices Co., Ltd. (CN) reports to the Executive Board member Chief Business Officer Ypsomed Delivery Systems; the Executive Boards of Ypsomed Produktion GmbH, Schwerin (DE) and of Ypsomed Manufacturing Co., Ltd., Changzhou (CN) report to the Executive Board member Chief Operating Officer (COO).

In terms of operations, the Ypsomed Group is divided into two business segments, so-called Business Areas: The "Ypsomed Delivery Systems" segment comprises the business with the injection systems developed and manufactured by Ypsomed. The "Ypsomed Diabetes Care" segment comprises the business with various supplies for diabetes care, such as infusion pumps, infusion sets, pen needles, blood glucose monitoring systems and other accessories. The "Others" segment comprises precision turned parts as well as real estate not currently in operational use.

Group structure as at 31 March 2023

The capital of each company is given in the appendix to the consolidated annual balance, see page 66 under note 2. Consolidation scope.

Share capital

The share capital of Ypsomed Holding AG amounts to CHF 193 143 806.85. It is divided into 13 649 739 fully paid-up registered shares, each with a nominal value of CHF 14.15.

Conditional share capital

The Ypsomed Holding AG does not own conditional capital as of 31 March 2023.

Authorised share capital

On 13 June 2022, the Board of Directors decided to carry out a capital increase from authorised capital, created by the resolution of the Annual General Meeting of 30 June 2021, to the amount of a maximum of 1 million fully paid registered shares with a nominal value of CHF 14.15 each. In the context of the offering, 1 million new registered shares were placed with both existing and new shareholders. At the offer price of CHF 122.50, the placement volume amounts to CHF 122.5 million. The shareholder loans of Willy Michel were offset in the amount of CHF 85.0 million (offset with a claim). Prior to the capital increase, all loans of Techpharma Management AG, a company controlled by Willy Michel, were transferred to Willy Michel. The share capital now consists of 13649739 registered shares at a nominal value of CHF 14.15 each.

Equity analysis of Ypsomed Holding AG

(Values in CHF)

		Number of
Date	Process	shares	Par value	Share capital	Retained earnings
31.03.20	Holdings	12649739	14.15	178993806.85	187261508.04
01.04.20	Transfer of net profit carried forward to retained earnings				217037679.63
10.07.20	Dividend from capital contribution reserves
10.07.20	Dividend from retained earnings				–1260295.30
27.01.21	Disposal of 40000 own shares
31.03.21	Net result
31.03.21	Holdings	12649739	14.15	178993806.85	403038892.37
01.04.21	Transfer of net profit carried forward to retained earnings				–2612622.87
09.07.21	Dividend from capital contribution reserves
09.07.21	Dividend from retained earnings				–7332912.74
10.–14.12.21	Purchase of 1531 own shares
17.12.21	Disposal of 8317 own shares
31.03.22	Net result
31.03.22	Holdings	12649739	14.15	178993806.85	393093356.76
01.04.22	Transfer of net profit carried forward to retained earnings				–7778319.49
27.06.22	Capital increase	1000000	14.15	14150000.00
27.06.22	Capital increase – Agio
27.06.22	Capital increase – Cost & Emissions tax
06.07.22	Dividend from capital contribution reserves
06.07.22	Dividend from retained earnings				–4094921.70
12.12.22	Reserves for treasury shares (at Ypsomed AG)				–166748.60
31.03.23	Net result
31.03.23	Holdings	13649739	14.15	193143806.85	381053366.97

Shares and participation certificates

The 13 649 739 registered shares are fully paid-up, and each has a nominal value of CHF 14.15. One registered share represents one vote. All shares have equal dividend rights. There are no preferential rights. Ypsomed Holding AG has no participation capital.

Dividend rights certificates

Ypsomed Holding AG owns no dividend rights certificates.

Changes in capital

The capital changed as follows in the past years: changes in the share capital up to 31 March 2023 in accordance with the statutory financial statement of Ypsomed Holding AG.

	General legal	Capital contribution	Other capital reserves	Reserves for
Total equity	reserves	reserves	(disagio)	treasury shares	Treasury shares	Net result
687747325.51	50000.00	111149285.55	–150000.00		–6594954.56	217037679.63
687747325.51						–217037679.63
686487030.21		–1260295.30
685226734.91
690865134.91					5638400.00
688252512.04						–2612622.87
688252512.04	50000.00	109888990.25	–150000.00		–956554.56	–2612622.87
688252512.04						2612622.87
680919599.30		–7332912.74
673586686.56
673323900.16					–262786.40
674543241.12					1219340.96
666764921.63						–7778319.49
666764921.63	50000.00	102556077.51	–150000.00		0	–7778319.49
666764921.63						7778319.49
680914921.63
789264921.63		108350000.00
786919286.69		–2345634.94
782824364.99		–4094921.70
778729443.29
778729443.29				166748.60
765414548.58						–13314894.71
765414548.58	50000.00	204465520.87	–150000.00	166748.60		–13314894.71

Shareholder structure

Registered shareholders

There were 5 387 shareholders owning shares registered in the Share Register on 31 March 2023 (previous year: 5 499 shareholders). Of these shareholders, some 97 % report Switzerland as their place of residence. The distribution of shareholdings is as follows:

	Number of shareholders as at	Number of shareholders as at
Number of shares	31 March 2023	31 March 2023
1 to 100	3161	3287
101 to 1000	1984	1995
1001 to 10000	209	185
10001 to 100000	25	25
over 100000	8	7

Significant shareholders and significant shareholder groups

The Michel family shareholder group, set up for the purpose of keeping shares in family ownership, consists of Willy Michel, Chairman of the Board of Directors of Ypsomed Holding AG until the General Meeting of Shareholders on 29 June 2022, who holds shares both directly and indirectly via Techpharma Management AG, which he controls, and his children Simon Michel, member of the Board of Directors of Ypsomed Holding AG as well as CEO of Ypsomed Holding AG and the Ypsomed Group, Serge Michel and Lavinia Camilla Nussio, who each hold the shares directly. As at 31 March 2023, the Michel family shareholder group holds a combined total of 10072139 (previous year: 9324912) registered shares in Ypsomed Holding AG, which represents 73.8 % (previous year: 73.7%) of all the shares in the company.

There are no other known significant shareholders or significant shareholder groups. No shareholder agreements have been disclosed.

In the reporting year, there were no disclosure notifications. The disclosure notifications published pursuant to art. 120 ff. of the Financial Market Infrastructure Act can be accessed at the website of SIX Swiss Exchange via the following link: www.ser-ag.com.

Cross participations

There are no cross participations.

Limitation on the transferability of shares

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 their 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 5.0% 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 1.0% or more of the share capital. The 5.0% 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. After having heard the parties involved, the Board of Directors may remove the entry as a shareholder with voting rights from the Share Register and replace it with an entry as a shareholder without voting rights if the entry was made on the basis of incorrect information. No applications for the entry of nominees were made in the reporting year.

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 the meeting.

Convertible bonds and options

There are no outstanding convertible bonds, and no options on participation rights for Ypsomed Holding AG or any group companies have been issued.

Board of Directors

Gilbert Achermann

Member of the Board of Directors of the Ypsomed Holding AG since 2020 and Chairman of the Board of Directors of the Ypsomed Holding AG since the Annual General Meeting 2022; member of the Nomination & Compensation Committee (NCC), Audit & Risk Committee (ARC) and Innovation & Sustainability Committee (ISC). After completing his banking apprenticeship at the Bankverein and the HWV in St. Gallen, he worked in investment banking at UBS in Switzerland and abroad from 1988 to 1998. In 1998, he moved to the MedTech industry as CFO at Straumann, where he was appointed CEO in 2002 and has been Chairman of the Board of Directors of Straumann Holding AG since spring 2010. In this function, he has been a member of the Board of Directors of the academic partner organisation ITI ("International Team for Implantology") since 2002. In addition, Gilbert Achermann was Chairman of the Board of Directors of Siegfried Holding AG in Zofingen (2011 to 2014) and Vitra Holding AG in Birsfelden (2012 to 2015). Since 2012 he has been a member of the Board of Directors of the private bank Julius Baer, since 2016 a member of the Chamber of Commerce of both Basel cantons and a member of the Supervisory Board of IMD – International Institute for Management Development in Lausanne, since 2020 a member of the Board of Directors of Swiss Medtech as well as since 2022 a member of the Board of Directors of greenTEG AG in Rümlang and a member of the Board of Directors of Unilabs in Kopenhagen, Denmark. He is also involved in Venture Kick as a juror and is an active investor in Swiss start-ups.

Paul Fonteyne

Member of the Board of Directors of the Ypsomed Holding AG since 2018 and Vice Chairman of the Board of Directors of Ypsomed Holding AG; Chairman of the NCC. After graduating from Brussels University with a degree in chemical engineering and an MBA from Carnegie Mellon University in Pittsburgh, he held various positions at Abbott Laboratories Inc. and Merck and Co. Inc. He joined the Boehringer Ingelheim Group in 2003. For the first five years, he headed the Human Pharmaceuticals Division in the USA. From 2008 to 2011, he lived in Germany to lead the worldwide marketing team for human pharmaceuticals. From 2012 to 2018, he was Chairman of the Board of Directors and CEO of Boehringer Ingelheim USA as well as Country Managing Director for the United States. Paul Fonteyne previously served as Chairman of the National Pharmaceutical Council (NPC) and as a member of the Board of Directors of Pharmaceutical Research and Manufacturers of America (PhRMA), of ResTORbio Inc. (until 2020), of AMAG Pharmaceuticals

Inc. (until 2020) and of Covetrus Inc. (until 2022). He is currently a member of the Board of Directors of the four biotechnology companies Amylyx Pharmaceuticals Inc, Gelesis Inc and Apellis Pharmaceuticals Inc, all based in Boston, as well as DalCor Inc, based in London. He is associated with Canaan Partners (Venture Capital) as Executive in Residence.

Dr. Martin Münchbach

Member of the Board of Directors of Ypsomed Holding AG since 2019; Chairman of the ARC. After graduating from ETH Zurich with a degree in natural sciences followed by a doctorate (Dr. sc. nat.) in protein chemistry and further postgraduate studies in economics, business and management sciences from ETH Zurich, he worked in various functions at venture capital firms in Switzerland. He is currently Managing Partner of Pureos Bioventures, a venture capital firm specialising in early-stage financing to support innovative young drug development companies with a focus on Switzerland and Europe. Through his involvement as a venture capitalist, he has been able to establish numerous medical technology and biotechnology companies that have brought innovative drugs and diagnostics to market approval. Martin Münchbach was a member of the Board of Directors of Binx Health Ltd. in Trowbridge, UK, until November 2022 and is presently a member of the Board of Directors of Ariceum Therapeutics in Berlin, Germany, Alentis Therapeutics AG in Basel and River Renal Inc. in New York, USA.

Betül Susamis Unaran

Member of the Board of Directors of Ypsomed Holding AG since 2021; Chairwoman of the ISC. After graduating in industrial engineering from Bogazici University, she started her career in various positions at Procter & Gamble in Istanbul and Frankfurt. After completing her MBA at INSEAD, she joined McKinsey & Company as a consultant in 2004, working in London and Geneva in various industries with a focus on healthcare, strategy and transformation. From 2012–2017, she worked at Ferring Pharmaceuticals, where she held the position of Director of Global Operations and then Global Head of Digital. From 2018 to 2019, she was Global Head of Digital Medicines at Novartis Pharmaceuticals and a member of the Novartis Pharma Global Commercial Leadership Team and the Novartis Global Digital Leadership Team. From 2019 to 2022, she worked as Chief Strategy and Digital Officer at the Zur Rose Group AG, the largest e-commerce pharmacy in Europe. Since April 2023 she works as Chief Commercial Officer at Unilabs. Betül

Susamis Unaran was a member of the Advisory Board of NATIVE in 2020, a leading design agency in London and San Francisco. Since 2022, she has been a member of the Board of Directors of DSS Sustainable Solutions Holding SA, Versoix in the Canton of Geneva, and of Brain+ A/S, which is listed in Denmark. She is also a member of the Advisory Board of Lumanity, an Arsenal Capital Partners company, with the vision to accelerate and optimise access to advances in medicine. Betül Susamis Unaran has been included in the 2022 Global Top CDO 100 list by Hot-Topics.ht in collaboration with Hewlett Packard Enterprise (January 2022). Furthermore, she was named one of the "10 forward thinkers in Switzerland" by the Handelszeitung (December 2021) and one of the "20 amazing women leading Europe's tech revolution" by Mindquest (April 2021).

Simon Michel

Member of the Board of Directors of Ypsomed Holding AG since 2022 and CEO of Ypsomed Holding AG and the Ypsomed Group; member of the ARC and the ISC. With Ypsomed since October 2006. Member of Executive Board since 2008 and responsible for Marketing & Sales and CEO since July 2014. From 2003 until 2006, Simon Michel worked for Orange Communications AG. Simon Michel studied economics at the University of St. Gallen and completed a Masters with a focus on media and communications management. He is a member of the Board of Directors of Unitectra AG, sitem-insel AG, Forster Rohner AG and LEM Surgical AG. Simon Michel is on the Board of the Canton Bernese Trade and Industry Association and the Solothurn Chamber of Commerce and has been a Board member of Swiss Medtech since 2015. Since 2017, he has been Chairman of the Board of Directors of DCB Research AG, which works closely with the University Hospital UDEM of the Insel Group in Switzerland and conducts research into new therapeutic approaches to improve the quality of life of people with diabetes. Since 2021, he has also been Chairman of the Board of Ahueni AG, a company involved in the development and trading of CO2 certificates in Africa. In March 2017, Simon Michel was elected to the Canton Council of the Canton Solothurn.

Members of the Board of Directors

Name	Nationality	Year of birth	Position	Member since	Elected until AGM
Dr.h.c. Willy Michel 1	CH	1947	Chairman until AGM 2022	1984	2022
Gilbert Achermann 2,3,4,5	CH	1964	Member since AGM 2022 President of the Board of Directors	2020	2023
Paul Fonteyne 2,3	BE/USA	1961	Vice President of the Board of Directors	2018	2023
Dr. Martin Münchbach 2,4	DE/CH	1970	Member	2019	2023
Betül Susamis Unaran2,5	CH/TR	1976	Member	2021	2023
Simon Michel4,5,6	CH	1977	Member	2022	2023

• 1 Until April 2003, Willy Michel was a member of the Executive Board of Disetronic Holding AG and from 2003 to August 2011 he was the non-executive Chairman of the Board of Directors of Ypsomed Holding AG. From August 2011 to June 2014, Willy Michel was the Delegate of the Board of Directors and CEO of Ypsomed Holding AG and the Ypsomed Group. Since July 2014 and up to the AGM 2022, he was the non-executive Chairman of the Board of Directors of Ypsomed Holding AG. He left the Board of Directors as per the 2022 Annual General Meeting. Information on his person is included in the Annual Report 2021/22, which is posted on the company's website, www.ypsomed.com/reports.
• 2 Non-executive member of the Board of Directors, no operational activity for Ypsomed Holding AG and its subsidiaries in the current year and the three preceding financial years.
• 3 Member of the Nomination & Compensation Committee (NCC)
• 4 Member of the Audit & Risk Committee (ARC)
• 5 Member of the Innovation & Sustainability Committee (ISC)
• 6 Simon Michel, CEO of the Ypsomed Holding AG and the Ypsomed Group since July 2014 and thus operationally active for Ypsomed Holding AG and its subsidiaries in the current and more than the three previous financial years, was newly elected to the Board of Directors at the Annual General Meeting in June 2022.

Gilbert Achermann

Paul Fonteyne Betül Susamis Unaran

Dr. Martin Münchbach

Simon Michel

Other activities and vested interests

There are no other activities or vested interests apart from those already mentioned.

Significant business relations

With the exception of Willy Michel, Chairman of the Board of Directors of Ypsomed Holding AG up to the General Assembly of Shareholders 2022, there are no business relations between the individual members of the Board of Directors and Ypsomed Holding AG and its subsidiaries. The business relations between Willy Michel and/or parties related to him with Ypsomed Holding AG and/or its subsidiaries in the reporting year are listed below.

Payments made during the reporting year as part of business-related services between Willy Michel and companies in the Ypsomed Group are given in the table "Transactions with related parties" in the appendix to the consolidated annual balance on page 81. In addition to remuneration for his office as President of the Board of Directors of the Ypsomed Holding AG up to the General Assembly of Shareholders 2022, these payments represent all compensations and remunerations for services within the scope of the business relations between Willy Michel and companies of the Ypsomed Group.

Sale and the further development of YpsoPod

As of 01 January 2021, Ypsomed has sold the YpsoPod development project (patch pump technology) to TecMed AG, a company controlled by Willy Michel. Ypsomed has the right of first refusal in the event of a potential future sale of the YpsoPod by TecMed AG. If this right is not exercised, Ypsomed is entitled to a 20% earn-out. In addition, Ypsomed can also buy back the product at the respective stage of development.

Ypsomed will continue to develop the YpsoPod on behalf of TecMed AG up to production maturity within the context of a service contract. Ypsomed shall charge a profit mark-up of 5% for costs incurred and development services. Insofar as TecMed AG outsources the production of the YpsoPod, Ypsomed shall have the right to submit an offer.

The corresponding contracts were discussed and approved by the Board of Directors and, in its opinion, they correspond to the conventional standard of market cooperation. Further information on this can be found in the notes to the consolidated financial statements on page 82.

Executive loan

Techpharma Management AG, a company controlled by Willy Michel, has granted loans to Ypsomed Holding AG based on loan agreements from the years 2022, 2020 and 2004. Prior to the capital increase conducted in June 2022, all loans of Techpharma Management AG were transferred to Willy Michel. As part of the capital increase conducted in June 2022, the shareholder loans of Willy Michel in the amount of CHF 85.0 million were offset (offset with a claim). The outstanding shareholder loan of CHF 25.0 million was repaid in full in October 2022.

There are no other executive loans.

Rental contract

Techpharma Management AG, which is controlled by Willy Michel, has been renting out the building on Buchmattstrasse in Burgdorf to Ypsomed since 01 January 2006. The parties have signed a rental contract set at an indexed market rent based on a rental assessment performed by an independent party. The rental contract can be terminated on 31 December 2029 conditional upon 24 months' notice and after this at any month. The tenant has unlimited first right of refusal for purchasing the property for the entire rental period, but for a maximum of 25 years from the start of the rental. The rental contract stipulates that small and standard maintenance work on the building shall 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 are 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 Swiss GAAP FER depreciation rates at the residual book value. The rental contract was discussed and approved by the Board of Directors, in whose opinion it is commensurate with a rental contract at normal market conditions.

Other contractual relationships

Techpharma Management AG, which is controlled by Willy Michel, and Ypsomed have concluded a framework service agreement, which can be terminated by either side at any time. This contract allows 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 leasing) 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 leasing). The individual services are invoiced at normal market conditions. The contract was discussed and approved by the Board of Directors, in whose opinion it is commensurate with a cooperation contract at normal market conditions.

Number of permissible mandates

Ypsomed Holding AG's Articles of Association prevent the members of the Board of Directors from accepting more than 15 additional mandates in legal entities and limit such outside activity to five mandates in listed companies. A mandate is deemed to be any activity in the highest management or administrative bodies of other legal entities that are obliged by law to be entered into the commercial register or a comparable foreign register and that are not directly or indirectly controlled by Ypsomed Holding AG or control the company. Mandates with different legal entities that are under joint control are deemed as being one mandate. Mandates that a member of the Board of Directors accepts on the instructions of the company, as well as mandates in associations, organisations and legal entities that are of a charitable or public nature, or in foundations, trusts and pension schemes are not governed by the restriction on admissible mandates.

Election and period of office

The members of the Board of Directors as well as the Chairman are elected on an annual basis. Re-election is possible. There is no restriction to the period of office. The members of the Board of Directors were each elected individually at the General Meeting of Shareholders 2022 and Gilbert Achermann was elected as President of the Board of Directors. The results of the first election can be seen in the table on page 106. The statutes of Ypsomed Holding AG do not include any rules that deviate from the applicable legal provisions regarding the appointment of the chairperson, the members of the compensation committee (NCC) and the independent proxy.

Internal organisation

The Chairman of the Board of Directors is elected by the General Meeting of Shareholders. In addition, the Board of Directors constitutes itself. With the exception of Simon Michel, member of the Board of Directors and CEO, none of the members of the Board of Directors in office as at 31 March 2023 have ever belonged to the Executive Board of Ypsomed Holding AG or one of its subsidiaries, and they are also independent from Ypsomed Holding AG and its subsidiaries due to the non-existence of business relationships. There is no advisory board.

Division of duties in the Board of Directors

The Chairman of the Board of Directors of Ypsomed Holding AG chairs the General Meeting of Shareholders and the meetings of the Board of Directors. He is the link between the Board of Directors and the CEO, is in regular contact with the CEO, discusses individual transactions with the CEO and monitors the activities of the CEO and of Executive Board. According to the Organisational Regulations, the CEO represents the company externally.

The the Board of Directors decided in August 2022 to also assign the Compensation Committee in particular with the support for the selection of members for the Board of Directors and the Executive Board; accordingly, the Compensation Committee has been renamed Nomination & Compensation Committee. Furthermore, the Board of Directors has established two additional committees, the Audit & Risk Committee and the Innovation & Sustainability Committee. The full Board of Directors can delegate further powers to an ad hoc board committee on a case-by-case basis. The committees analyse certain areas and topics in depth and report to the full Board of Directors in preparation for its resolutions or to safeguard its supervisory function. The three committees are chaired by an independent member of the Board of Directors. The chairperson of the Board of Directors is a member of all three committees, but he does not chair any of the committees. The chairpersons of the committees each have members of the Executive Board or other persons from the company as direct contacts who also attend the committee meetings. The full Board of Directors decides on motions, proposals and recommendations of the committees.

Nomination & Compensation Committee (NCC)

The General Assembly of Shareholders 2022 re-elected Paul Fonteyne and Gilbert Achermann as members of the Compensation Committee, since August 2022 referred to as Nomination & Compensation Committee (NCC). Dr Martin Münchbach as well as Betül Susamis Unaran did not stand for re-election at the 2022 Annual General Meeting as they have each taken over chairmanship of one of the two other committees. The Board of Directors appoints the chairperson of the NCC; Paul Fonteyne was appointed as chairman. Michael Zaugg, Head of Corporate Services, supports the NCC as the Executive Board member responsible for Human Resources. In his role as CEO, Simon Michel generally attends the meetings of the NCC. The NCC supports the full Board of Directors in determining and reviewing the compensation principles and guidelines relating to the members of the Board of Directors and the Executive Board, in drafting the Remuneration Report and in preparing the proposals for the General Meeting of Shareholders with regard to the remuneration of the Board of Directors and Executive Board. Since August 2022, the NCC has also supported the full Board of Directors in the selection and hiring of members of the Executive Board, the termination of employment contracts with members of the Executive Board, the selection of new members of the Board of Directors as well as the assessment of the personnel policy and corporate culture to enable Ypsomed to position itself as an attractive employer.

Audit & Risk Committee (ARC)

At its meeting on 22 August 2022, the Board of Directors appointed Dr Martin Münchbach as chairman of the ARC and Gilbert Achermann and Simon Michel as members of the ARC. CFO, Niklaus Ramseier, supports the ARC.

The ARC supports the full Board of Directors in assessing the cooperation between the external auditors and internal auditors as well as in assessing the functionality of the internal control system (ICS), the enterprise risk management (ERM) and the compliance system. Furthermore, it supports the full Board of Directors in the preliminary review of both the individual and consolidated financial financial statements for the semi-annual and annual financial statements as well as in meetings with the CFO, with the function holder responsible for internal auditing and with the external auditors. In terms of the latter, the ARC assists the full Board of Directors in assessing their performance and remuneration, as well as in reviewing their independence.

Innovation & Sustainability Committee (ISC)

At its meeting on 22 August 2022, the Board of Directors appointed Betül Susamis Unaran as Chairwoman of the ISC as well as Gilbert Achermann and Simon Michel as members of the ISC. The members of the Executive Board responsible for the business areas Ypsomed Diabetes Care and Ypsomed Delivery Systems, Sébastien Delarive and Ulrike Bauer, support the ISC.

The ISC supports the full Board of Directors in the assessment of marketing & sales as well as innovation strategies. Specifically, it supports the review of scenarios and the assessment of developments in the areas of product technology, digitisation, networking of intelligent platforms, data analytics, therapy management and the market. The ISC also assesses developments in the health sector, particularly with regard to medical compliance and reimbursement systems. Furthermore, it supports the full Board of Directors in setting sustainability targets and in assessing the environmental, community and social impact of Ypsomed's business activities.

Modus operandi of the Board of Directors

The Board of Directors meets regularly four times per financial year. Here, it receives the written reports of the CEO, the business areas Ypsomed Delivery Systems and Ypsomed Diabetes Care as well as the corporate areas Finance, Operations and Corporate Services and the corresponding verbal explanations. The Board of Directors confers and decides on the proposals from the CEO as well as from the committees. The auditors participate in the May Board meeting, in which they provide information on the comprehensive report and on other questions. The Board of Directors meets regularly on one additional occasion per year for a strategy meeting with Executive Board. Occasionally, the Board of Directors also passes resolutions by means of circular letter. The items to be included in the agenda on a regular or periodic basis are defined in the Organisational Regulations, whereby each member of the Board of Directors may request that items be included in the agenda. The final agenda is determined by the Chairman. The members, as well as the CEO and CFO and the officers responsible for internal audit and risk management generally receive the agenda and the necessary documentation for decision making seven to ten days before the meeting. Any member of the Board of Directors may request information about any aspect of the Ypsomed Group's affairs. Votes and elections within the Board of Directors are passed by majority of the votes. In the event of a tied vote, the Chairman has the casting vote, in his absence, the vice chairman shall have the casting vote. Votes may not be taken by proxy. The CEO and the CFO as well as the office holders responsible for internal audit and risk management and, on a case-bycase basis, other members of Executive Board or employees with an advisory role are present at the meetings. As a rule, external consultants are not called in.

The Board of Directors met a total of six times during the reporting year, three of which were in connection with the increase in capital in June 2022. Apart from the meetings in connection with the increase in capital in June 2022, which were of shorter duration and took place twice online, the Board of Directors meetings were held in person and lasted between 3.5 and 7.25 hours each. The lead auditor took part in the Board of Directors meeting in May 2022. In addition, the Board of Directors convened for 2 days in March 2023 as part of the strategy meeting with Executive Board. Apart from the three meetings in connection with the increase in capital, all members of the Board of Directors attended all meetings of the Board of Directors and the strategy meeting in March 2023. Willy Michel and Paul Fonteyne were excused for the two meetings on decision-making and implementation of the increase in capital. At the meeting of the Board of Directors at which the resolutions necessary for the implementation of the increase in capital were passed, Willy Michel was the only member of the Board of Directors present; this complies with Art. 23 Sec. 4 of the Articles of Association. Paul Fonteyne was excused for the General Meeting of Shareholders in June 2022; the other members of the Board of Directors were present at the General Meeting of Shareholders in 2022.

Modus operandi of the committees

The chairperson of the respective committee invites the participants of the meeting in good time. He/she informs the full Board of Directors in an appropriate form about the activities and the results of the committee.

The Compensation Committee met in May 2022. In addition, the NCC held four meetings, one physical and three online. The ARC met once physically and once hybrid and the ISC met once physically and twice online. The meetings lasted between one and three hours. All members of the respective committees were either present or logged in. The Head of Internal Audit was also present at each of the ARC meetings. The full Board of Directors decided on the motions put forward by the committees.

The NCC called in HCM International Ltd., Zurich, as an external consultant for the development of a new, longterm remuneration system (Long-Term Incentive Plan). HCM participated in the two meetings in January 2023 and the meeting in March 2023.

Definition of competences

The Board of Directors is entrusted to perform the nontransferable and inalienable tasks to which it is entitled by law: it has the highest decisionmaking 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 organisation of the Ypsomed Group, supervises operating 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 and the Remuneration Report, issues the Code of Conduct, approves the budget and the mid-term planning for Executive Board and also monitors the business activities of the Group companies and it periodically assesses strategic, operational and financial risks. The Board of Directors approves individual business affairs. In particular, this includes decisions on the purchase or sale of companies and participations in companies as well as legal transactions concluded with individual members of the Board of Directors, the Executive Board or persons related with them, with the main shareholder or with members of the Michel shareholder group. The competences of the Board of Directors and of the other decisionmakers within the Ypsomed Group are defined within the Organisational Regulations. The Organisational Regulations can be viewed on the company's website, www. ypsomed.com (www.ypsomed.com/regulatorypolicy). In all other respects, the Board of Directors has delegated the management of the business to the Executive Board under the direction of the CEO.

Instruments for information and control with regard to Executive Board

The Ypsomed Group's information and control tools, which are at the disposal of the Board of Directors, consist of a quarterly written management report (management review, quarterly reports), and a financial report. The Chairman of the Board of Directors and the CEO have direct access at all times to the management information system (MIS).

Furthermore, the Board of Directors uses strategic planning documents as management tools for steering the company. Responsibility for risk management and monitoring rests with Executive Board, which reports on these matters periodically to the full Board of Directors, but at least once a year. In addition to these documents, further selected financial figures are available to Executive Board on a monthly basis.

Risk assessment is based on a risk inventory that encompasses the relevant risk categories such as strategic risks, management risks, general risks in the operating business, legal risks, systemic risks, financial risks, including market, credit and liquidity risks and event risks, including political, regulatory, fiscal and external risks, and assesses these with regard to probability of occurrence and impact.

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 fulfilment of business goals and objectives; evaluation of the effectiveness of risk management, control and corporate management processes; optimisation of business processes; improvement of controls and processes with regard to the information systems; verification of controls and processes for accounting systems and financial reporting; confirmation and guarantee of authorised business transactions; safeguarding and protection of assets; support with regard to complying with legal and regulatory requirements; reviewing significant or special business cases and transactions. The Board of Directors can determine additional areas to be reviewed. The person responsible for "Internal auditing" provides the auditors several times per year with appropriate documentation on his/her internal auditing activities and coordinates these with the auditing to be carried out by the auditors within the framework of the interim and year-end audits.

The CEO, together with the other members of the Executive Board, is responsible for the operational management of the Ypsomed Group within the scope of the guidelines defined by the Board of Directors.

Within the context of adjusting the organisational structure as of 01 October 2022, the Technology department was disbanded and the Executive Board reduced by one member. Accordingly, Hans Ulrich Lehmann has resigned from the Executive Board as of 30 September 2022. Information on his person is included in the Annual Report 2021/22, which is posted on the company's website, www.ypsomed.com (www.ypsomed.com/reports).

Members of the Executive Board

Name	Nationality	Year of birth	Employed at Ypsomed (n.b. Position before 2003 for Disetronic) since
Simon Michel	CH	1977	Chief Executive Officer (CEO) and member of the Board of Directors	2006
Frank Mengis	DE/CH	1964	Chief Operating Officer (COO)	2015
Ulrike Bauer	DE/CH	1969	Chief Business Officer Ypsomed Delivery Systems (CBO YDS)	2001
Sébastien Delarive	CH	1969	Chief Business Officer Ypsomed Diabetes Care (CBO YDC)	2022
Niklaus Ramseier	CH	1963	Chief Financial Officer (CFO)	2002
Michael Zaugg	CH	1972	Chief Corporate Officer (CCO)	2017
Dr. Beat Maurer1	CH	1958	Chief Legal Officer (CLO) and Secretary of the Board of Directors	1992

¹ Dr Beat Maurer left the Executive Board on 31 March 2023 for retirement reasons. His successor, Dr Nicolas Meyer, took up his position at Ypsomed on 01 May 2023. In the interim, the Legal and Intellectual Property Department was headed by Simon Michel.

Simon Michel

Member of the Board of Directors of Ypsomed Holding AG since 2022 and CEO of Ypsomed Holding AG and the Ypsomed Group; member of the ARC and the ISC. With Ypsomed since October 2006. Member of Executive Board since 2008 and responsible for Marketing & Sales and CEO since July 2014. From 2003 until 2006, Simon Michel worked for Orange Communications AG. Simon Michel studied economics at the University of St. Gallen and completed a Masters with a focus on media and communications management. He is a Member of the Board of Directors of Unitectra AG, sitem-insel AG, Forster Rohner AG and LEM Surgical AG. Simon Michel is on the Board of the Canton Bernese Trade and Industry Association and the Solothurn Chamber of Commerce and has been a Board Member of Swiss Medtech since 2015. Since 2017, he has been Chairman of the Board of Directors of DCB Research AG, which works closely with the University Hospital UDEM of the Insel Group in Switzerland and conducts research into new therapeutic approaches to improve the quality of life of people with diabetes. Since 2021, he has also been Chairman of the Board of Ahueni AG, a company involved in the development and trading of CO2 certificates

in Africa. In March 2017, Simon Michel was elected to the Canton Council of the Canton Solothurn.

Frank Mengis

Chief Operating Officer (COO). Joined Ypsomed in 2015 as a member of the Executive Board, responsible for the areas Production, Supply Chain and QM & RA. He comes with many years of experience in the development and production of medical devices: previously he was COO and member of the Executive Management of Nobel Biocare AG, responsible for the production plants worldwide and the global supply chain. In the years 2001 to 2012 he held various management functions in the Straumann Group in Switzerland and the USA in the areas of quality management, production and development. After graduating, he started his career at F. Hoffmann-La Roche AG in Basel in the Engineering Department (1990–1999). Of German-Swiss dual nationality, he graduated as Dipl. Ing. Mechanical Engineering from the Technical University Karlsruhe followed by further training at both the IMD Lausanne and the Harvard Business School (AMP Programme). From 2017–2021 he was a member of the Board of Directors at Qualitech AG. He has also been a member of the Board of Directors at Nemis Technologies AG since 2021.

Sébastien Delarive

Chief Business Officer Ypsomed Diabetes Care (CBO YDC), employed at Ypsomed since 2022. From 2000– 2022, he held various management positions in France, Scandinavia, the USA, Japan as well as Latin America with the pharmaceutical company Sanofi and was most recently responsible for the Medicine Division as Head of Europe. After completing his studies, he started his career in sales at Astra Pharmaceutica AG, Dietikon, and Biokema SA, Crissier. Sébastien Delarive studied chemistry at the ETH Lausanne (EPFL).

Ulrike Bauer

Chief Business Officer Ypsomed Delivery Systems (CBO YDS), employed at Ypsomed (resp. Disetronic before 2003) since 2001 in various marketing and sales functions and since 2014 is a member of the Executive Board and responsible for the Delivery Systems Business Unit. Previously Product Manager with Mettler Toledo (1996–2001). She has a degree (Dipl. Ing.) in chemical engineering and biotechnology at the University of Aachen as well as a postgraduate diploma in International Management at the Kalaidos University of Applied Sciences in Zurich.

Niklaus Ramseier

Chief Financial Officer (CFO), with Ypsomed (pre-2003 with Disetronic) 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 (1983–1995). Education: Swiss certified expert in accounting and controlling.

Michael Zaugg

Chief Corporate Officer (CCO), has been with Ypsomed since 2017. Since 2020 also Chairman of the Board of Trustees of the Ypsomed Group Pension Fund Foundation. From 2011 to 2017 he was employed as Head of Talent Europe at ABB. Previous positions included HR at Credit Suisse: Division HR Manager, Head of Graduates Recruiting& Development and University Marketing (1997–2004). Furthermore, Consultant and Management Member at schärpartners ag (2004–2007), Head of HR Services at Valiant Holding (2007–2008), Head of HR Recruiting at BKW FMB AG (2008–2011). Michael Zaugg held several part-time mandates: Member of the Board of Directors at Poolside AG in Zurich, Member of the Board at IngCH, lecturer at the ZfU and the Further Education Centre of the University St. Gallen in the field of Talent Management as well as the University of Bern on the topic of "Leadership in an innovative environment", President of the ABB childcare centres. Education: Study of Economics at the University of Basel (degree: lic.rer. pol) with business focus on personnel management, marketing and environmental economics; completion of interfaculty concomitant uni-versity studies in Mankind – Society – Environment (MGU); Executive Master of Human Resources Management at the Institute of Applied Psychology in Zurich.

Beat Maurer

Dr. iur., attorney-at-law, Chief Legal Officer (CLO) and Secretary to the Board of Directors of Ypsomed Holding AG, with Ypsomed (resp. 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 Fribourg, studied at the Free University of Berlin, took a doctorate in law at the University of Bern and was admitted to the bar in the canton of Berne. Beat Maurer has been a judge specialising in issues relating to business law and intellectual property law at the commercial court of the canton of Berne since 2002. Furthermore, he was President of the "Legal & Compliance" specialist group of Swiss Medtech until 2022. Due to retirement, he resigned from Executive Board as of 31 March 2023.

Other activities and vested interests

There are no other activities or vested interests apart from those already mentioned.

Number of permissible mandates

Ypsomed Holding AG's Articles of Association prevent the members of the Executive Board from accepting more than seven additional mandates in legal entities and limit such outside activity to two mandates in listed companies.

A mandate is deemed to be any activity in the highest management or administrative bodies of other legal entities that are obliged by law to be entered into the commercial register or in a comparable foreign register and that are not directly or indirectly controlled by Ypsomed Holding AG or control the company. Mandates with different legal entities that are under joint control are deemed as being one mandate. Mandates that a member of the Executive Board accepts on the instructions of the company, as well as mandates in associations, organisations and legal entities that are of a charitable or public nature, or in foundations, trusts and pension schemes are not governed by the restriction on admissible mandates.

Management contracts

There are no management contracts.

Simon Michel – Chief Executive Officer (CEO)

Frank Mengis – Chief Operating Officer (COO)

Sébastien Delarive – Chief Business Officer Ypsomed Diabetes Care (CBO YDC)

Ulrike Bauer – Chief Business Officer Ypsomed Delivery Systems (CBO YDS)

Niklaus Ramseier – Chief Financial Officer (CFO)

Michael Zaugg – Chief Corporate Officer (CCO) Dr. Beat Maurer – Chief Legal Officer (CLO)

Remuneration, participations and loans

Information on the remuneration and participations of members of the Board of Directors and the Executive Board, the contents and determination procedure as well as the statutory rules governing the principles, loans, credits and insurance benefits and the principles governing the votes of the Annual General Meeting of Shareholders regarding remuneration as well as the actual remuneration paid to current and former members of the Board of Directors and the Executive Board in 2022/23 can be found in the Remuneration Report 2022/23, as of page 120.

Shareholders' rights of participation

Voting right restrictions and representation

All shareholders who are entered in the Share Register with voting rights by the book closure are entitled to vote at the General Meeting of Shareholders. The date of book closure is at the earliest five days before the General Meeting and is determined together with the Share Register. Shareholders may arrange to be represented at the General Meeting of Shareholders by written proxy. In exercising their voting rights, no shareholder may directly or indirectly amalgamate more than 5% of the total voting rights in the form of their own shares and those they are 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 does not apply to the exercise of voting rights by the independent proxy. It does also not apply to Willy Michel, his legal successors due to inheritance, estate distribution, anticipatory successions or matrimonial property rights as well as to natural or legal persons and partnerships which directly or indirectly or in mutual agreement with Willy Michel form a group in the meaning of art. 120 of the Financial Market Infrastructure Act and disclose the same, as he was registered with more than 5% of all voting rights on 18 September 2004 (art. 13 Ypsomed Holding AG's Articles of Association, www.ypsomed.com/ articlesofassociation). Furthermore, the Board of Directors may decide on exceptions to the restriction of voting rights in justified cases. The Board of Directors did not decide to make any exceptions during the reporting year. There are no rules governing the annulment of statutory voting right restrictions.

Independent proxy

The Annual General Meeting of Shareholders 2022 elected Dr. Peter Stähli, attorney-at-law and notary, Burgdorf, as the independent proxy for the period up to the conclusion of the Annual General Meeting of Shareholders 2023. According to the Articles of Association, the Board of Directors can issue a directive governing the independent proxy and determine the requirements under which valid instructions may be issued to the independent proxy. Shareholders may give their proxies and instructions to the independent proxy in writing or in an electronic form determined by the Board of Directors. The details regarding the electronic issuance of powers of attorney and instructions to the independent proxy are explained in the invitation to the Annual General Meeting.

Statutory quorums

Unless otherwise stipulated by law or by the Articles of Association, the General Meeting of Shareholders shall adopt resolutions and conduct votes on the basis of an absolute majority of the votes cast, excluding blank and invalid votes. The Chairman of the Board of Directors shall also vote and, if the vote is tied, he shall have the casting vote. The quorums laid down in the Ypsomed Holding AG's Articles of Association reflect the quorums of the applicable legal provisions.

Convening the General Meeting of Shareholders

The invitation to the General Meeting will be sent either by letter, e-mail or other electronic media to the shareholders registered in the Share Register at least 20 days before the date of the meeting and by one-time publication 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 item of the agenda and the proposal. 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

All shareholders entered up to book closure in the Share Register with voting rights are entitled to vote at the General Meeting. The date of book closure is at the earliest five days before the General Meeting and is determined together with the Share Register. There are no rules governing the granting of exceptions.

In the event of a public takeover offer, the bidder is required pursuant to art. 135 of the Financial Market Infrastructure Act to make an offer for all of the company's listed shares as soon as they acquire shares in the company directly, indirectly or in concert with third parties, which along with the shares already held exceed the

threshold of 49.0% of the voting rights of the company, whether exercisable or not (art. 7 Articles of Association, www.ypsomed.com/articlesofassociation).

There are no change-of-control clauses with members of the Board of Directors, Executive Board and/or other management personnel.

Term of mandate of auditors and term of the lead auditor

On 01 July 2020, the General Meeting of Shareholders of Ypsomed Holding AG selected PwC /Pricewaterhouse-Coopers AG, Berne, as auditors for the first time. The auditors are each appointed for a period of office of one year by the General Meeting of Shareholders, the last time being on the occasion of the 2022 General Meeting of Shareholders. At the 2022 General Meeting of Shareholders, PwC /PricewaterhouseCoopers AG, Berne, was re-elected as auditors. Oliver Kuntze has been the lead auditor for Ypsomed Holding AG since the 2020/2021 financial year.

Auditing fees

The total auditing fees invoiced by the auditors PwC to Ypsomed Holding AG and its group companies during the reporting year amounted to CHF 309 360. During the reported year, the PwC auditors provided and charged additional, so-called non-auditing services to Ypsomed Holding AG and its group companies totalling CHF 2 450.

Instruments for supervision and control with regard to auditing

The full Board of Directors undertakes the supervision and control of the auditor and is supported by the ARC in the process. The lead auditor is in attendance during the discussion and acceptance of the consolidated and annual financial statements by the full Board of Directors. The auditor compiles a comprehensive report annually for the attention of the Board of Directors and this is discussed by the Board of Directors with the lead auditor in attendance.

Information policy

Ypsomed Holding AG maintains an open and transparent communication policy towards shareholders, potential investors, financial analysts, the media, customers and other interested people, based on the principle of equality. The company uses the following tools: annual report, semi-annual report, presentation of the annual results to the media and financial analysts ahead of the Annual General Meeting of Shareholders, as well as media briefings and company publications that have potential relevance to the share price. The CEO is responsible for communication with investors.

The following research banks monitor the development of the Ypsomed Group

Credit Suisse, Zurich: Christoph Gretler Zürcher Kantonalbank, Zurich: Daniel Buchta Vontobel AG, Zurich: Sibylle Bischofberger Frick Octavian AG, Zurich: Sandra Dietschy Research Partners, Zurich: Urs Kunz

On our website at www.ypsomed.com (under Media& Investors), all interested parties can access up-to-date and potentially market-relevant information (pull system) without charge. Furthermore, all interested parties can subscribe to an e-mail distribution list under www.ypsomed. com/newsservice (push system). The official publication organ of Ypsomed Holding AG is the Swiss Official Gazette of Commerce (SOGC). Company publications with potential relevance to the share price are identified as ad hoc announcements and usually communicated after the close of the trading day. Such publications are reported in advance to the SIX Swiss Exchange Regulation and thereafter uploaded to the above-mentioned website and simultaneously communicated to a number of national newspapers, electronic information systems and to persons registered on the e-mail distribution list.

Equity trading

The registered shares of Ypsomed Holding AG are traded on the SIX Swiss Exchange.

Ticker symbols: YPSN (Telekurs) YPSN.S (Reuters) YPSN SW (Bloomberg) Security number: 1 939 699 ISIN: CH 001 939 699 0

Blackout Periods

During the blackout periods (no-trade periods), the following persons are not permitted to trade in shares or place orders to trade Ypsomed Holding AG shares. Affected are:

• Employees of Ypsomed AG and other companies belonging to the Ypsomed Group, who have access to the financial statements, as well as persons closely associated with them,
• Members of the Board of Directors of all companies of the Ypsomed Group and persons closely associated with them.

The blackout periods in the reporting year were:

• from 01 October until the publication of the semiannual figures
• from 01 April until the publication of the annual financial statement.

The Board of Directors of Ypsomed Holding AG or the Executive Board can also, in special situations, specify ad hoc blackout periods for individual groups of persons, who have access to price-sensitive information. Ad hoc blackout periods end with the notification of the persons concerned or immediately after publication of the price-sensitive information.

Important dates

28 June 2023: Annual General Meeting of Shareholders, Burgdorf

15 November 2023: Media conference and analysts' presentation of the semi-annual figures 2023/24, Zurich

22 May 2024: Media conference and analysts' presentation of the annual figures 2023/24, Burgdorf

Ypsomed Holding AG Thomas Kutt Head Investor Relations thomas.kutt@ypsomed.com +41 34 424 35 55

Remuneration Report

The Remuneration Report for Ypsomed Holding AG for the financial year 2022/2023 sets out the remuneration principles, the remuneration system as well as the actual remuneration for the Board of Directors and Executive Board in accordance with legal provisions and those of the Articles of Association (www.ypsomed.com/articlesofassociation).

The overall responsibility for the definition of the remuneration principles is held by the Board of Directors. The remuneration committee, respectively the Nomination & Compensation Committee (NCC) since August 2022, supports these in determining and reviewing the remuneration principles, in drafting the Remuneration Report and in preparing the proposals for the Annual General Meeting with regard to the remuneration of the Board of Directors and the Executive Board. The members of the Board of Directors and the members of the Executive Board present at the relevant meeting of the Board of Directors have the right of participation and the right to comment if their remuneration is being decided by the committee responsible.

At the Annual General Meeting of Shareholders of Ypsomed Holding AG of 28 June 2023, the Annual General Meeting of Shareholders shall decide with binding effect and in separate votes on the maximum total amount of the fixed remuneration both for the members of the Board of Directors for the period until the next Annual General Meeting of Shareholders 2024 and for the members of the Executive Board for the duration of the following financial year 2024/25 as well as on the performance-related remuneration for the members of the Board of Directors and the Executive Board for the financial year preceding the Annual General Meeting of Shareholders, ending on 31 March 2023. Insofar as the Annual General Meeting 2023 approves the corresponding amendments to the Articles of Association in advance, the Annual General Meeting on 28 June 2023 will also vote for the first time on a share-based, longterm remuneration element for the members of the Board of Directors and for the members of the Executive Board. Information on the share-based, long-term remuneration element can be found on page 125 of the Remuneration Report.

The relevant total amounts shall include all employer contributions to the social insurance and occupational insurance. No credits, loans or insurance benefits apart from those from the occupational insurance were granted to the members of the Board of Directors and the Executive Board.

Fees and expenses that are paid in compliance with the regulations approved by the authorities are not deemed to be remuneration subject to authorisation.

Board of Directors remuneration

The fixed basic component and further benefits as well as a performance-related component, are discussed, examined and presented to the full Board of Directors for a decision annually by the Compensation Committee respectively the NCC. The full Board of Directors reviews the remuneration annually and determines any adjustments at its own discretion and without consulting external advisors. In the reporting year, the NCC consulted HCM International Ltd, Zurich, for the introduction of the share-based long-term incentive plan (LTIP), but not with regard to the specific remuneration of the members of the Board of Directors. Information on the share-based, long-term remuneration element for the members of the Board of Directors is provided on page 125 of the Remuneration Report.

The fixed basic remuneration in the period from the Annual General Meeting 2022 to the Annual General Meeting 2023 is CHF 150000 (previous year: CHF 150 000) for the Chairman of the Board of Directors and CHF 90 000 (previous year: CHF 90 000) for each member of the Board of Directors. The activities in the committees for the period from the Annual General Meeting 2022 to the Annual General Meeting 2023 will not be remunerated separately. Due to the time and effort involved in committee work, it is planned to remunerate this work separately in future. Participation in the meetings of the Board of Directors and the committees as well as participation in the strategy meeting and the Annual General Meeting are not remunerated separately.

The performance-related component of the Board of Directors for the reporting year comprises between 0% and a maximum of 41 ⁵ ⁄8% of the fixed component. According to the profit-sharing provisions, the amount of the performance-related component depends on the achieved versus budgeted targets, based on two-thirds of the consolidated EBIT margin and one-third of the consolidated turnover, and amounts to CHF 156 300 or 37.2% of the fixed basic remuneration for all members of the Board of Directors in the reporting year, based on a target achievement level of 111.6%. If target attainment had been 100%, the performance-related components would have totalled around CHF 140 000. No short-term, performance-related remuneration for the Board of Directors is planned for the current financial year ending 31 March 2024. Instead – and subject to the corresponding amendment to the Articles of Association – a sharebased, long-term remuneration element will be introduced, in which the members of the Board of Directors will also participate.

The remuneration of Simon Michel as a member of the Board of Directors and two committees is included in his remuneration as CEO, he will not receive any additional compensation for the mandate as a member of the Board of Directors.

The Board of Directors' fees will be paid to the members of the Board of Directors after the Annual General Meeting in July 2023.

All remuneration for the period from the Annual General Meeting 2022 to the Annual General Meeting 2023 is cash remuneration. Remuneration relating to the reporting year does not include any share or option plans. Depending on the situation, VAT or statutory social insurance is to be paid on remuneration to the Board of Directors. No occupational benefits were granted to members of the Board of Directors during the reporting year.

Information on all the actual remuneration paid to the current and former members of the Board of Directors in the financial year 2022/23 is given in the table on page 123.

Executive Board remuneration

The elements of the remuneration granted to the Executive Board comprise a fixed basic component, further benefits (e.g. service years award) as well as a performance-related component based on the company result and the attainment of individual targets. The Compensation Committee respectively the NCC assesses the performance and the remuneration of the members of the Executive Board every year and recommends any adjustments to the Board of Directors to decide on at its own discretion and without consulting external advisors. In the reporting year, the NCC consulted HCM International Ltd, Zurich, for the introduction of the share-based longterm incentive plan (LTIP), but not with regard to the spe-

Remuneration approval process

	Type of remuneration	Nomination & Compensation Committee	Full Board of Directors	Annual General Meeting of Shareholders
Board of Directors Fixed remuneration	Maximum amount of fixed remuneration for members of the Board of Directors for the period 29 June 2023 until the next Annual General Meeting in 2024	Review of the principles and proposal to the Board of Directors	Proposal to AGM	Approval at the AGM of 28 June 2023
	Individual remuneration to the Chairman and the members of the Board of Directors	Proposal to the Board of Directors	Approval
Board of Directors Performance	Total amount of performance-related remu neration to the members of the Board of Directors for the financial year 2022/23	Recommendation	Proposal to AGM	Approval at the AGM of 28 June 2023
related remuneration	Individual remuneration to the members of the Board of Directors	Proposal to the Board of Directors	Approval
Board of Directors Share-based long-term remuneration	Total amount of the allocation for the share based long-term remuneration to members of the Board of Directors for the period from 29 June 2023 until the next Annual General Meeting in 2024	Recommendation	Proposal to AGM	Approval at the AGM of 28 June 2023
	Individual remuneration to the members of the Board of Directors	Proposal to the Board of Directors	Approval
Executive Board Fixed remuneration	Maximum fixed remuneration to members of the Executive Board for the financial year 2024/25	Review of the principles and proposal to the Board of Directors	Proposal to AGM	Approval at the AGM of 28 June 2023
	Individual remuneration to the members of the Executive Board	Proposal to the Board of Directors	Approval
Executive Board Performance	Total amount of performance-related remune ration to the members of the Executive Board for the financial year 2022/23	Recommendation	Proposal to AGM	Approval at the AGM of 28 June 2023
related remuneration	Individual remuneration to the members of the Executive Board	Proposal to the Board of Directors	Approval
Executive Board Share-based long-term	Total amount of the allocation for the share based long-term remuneration to the members of the Executive Board for the financial year 2023/24	Recommendation	Proposal to AGM	Approval at the AGM of 28 June 2023
remuneration	Individual remuneration to the members of the Executive Board	Proposal to the Board of Directors	Approval

cific remuneration of the members of the Executive Board. Information on the share-based, long-term remuneration element for the members of the Executive Board is provided on page 125. The fixed basic remuneration is dependent on the function, the qualification, the professional experience and the performance of the relevant person. The performance-related component for the CEO amounts to between 0% and a maximum of 62.5% and for the other members of the Executive Board between 0% and a maximum of 31 ¹ ⁄4% of the annual basic remuneration (gross) of the individual member of the Executive Board. According to the remuneration principles, the performance-related component is dependent on the targets achieved vis-à-vis the set targets and is 50% based on the consolidated EBIT margin, 25% on the consolidated sales and in the reported year still 25% on the attainment of the individual targets of the relevant member of the Executive Board. The individual targets are set together with the line manager during the annual performance appraisal and can include project targets, personal development targets or the contribution to the target attainment of a team or the department. A management system for the assessment of performance ensures that targets are defined, and that target attainment is assessed during the annual performance appraisal. The amount of the performance-related component for the CEO in the reporting year amounted to CHF 353438 resp. 54.4% of the fixed basic remuneration, based on a target attainment level of 108.75%. If target attainment had been 100%, the performance-related component would have been around CHF 28 438 lower. The amount of the performance-related component for the other members of the Executive Board in the reporting year amounted to CHF 626 171 resp. 27.4% of the fixed basic remuneration, based on a target attainment level of 109.9%. If target attainment had been 100%, the performance-related component would have been around CHF 56 370 lower.

The fixed remuneration as well as other remuneration for the members of the Executive Board relating to the 2022/23 financial year are cash remunerations. Remuneration relating to the reporting year does not include any share or option plans. The Board of Directors is authorised to pay all types of permissible remuneration from the approved fixed remuneration amounts or the additional amounts and subject to the legal requirements. Members of the Executive Board are granted insurance benefits from the occupational insurance within the framework of the statutory provisions and the provisions according to the regulations including extra-mandatory benefits and in the case of illness or accident their remuneration continues to be paid and/or is paid as insurance and bridging benefits within the framework of the statutory provisions and the provisions according to the regulations.

In the same manner as employees of Ypsomed AG, members of the Executive Board were able to acquire shares in Ypsomed Holding AG at preferential conditions in the 2022/2023 financial year, provided they were in ongoing employment without notice of termination at the time of the offer. They were entitled to acquire shares in Ypsomed Holding AG to the amount of 90% of a monthly salary. The purchase price offered on 01 December 2022 corresponded to the average of all daily closing prices for the months of September, October and November 2022 less a discount of 20% granted by Ypsomed. The acquired shares cannot be sold during a blocking period of three years. There is no obligation to return the shares.

No severance pay and no notice periods of more than six months have been agreed with any members of the Executive Board. In the reporting year, no severance pay was paid to former members of executive bodies. Information on the actual remuneration paid directly and indirectly to the current and former members of the Executive Board in the financial year 2022/23 is given in the table on page 123.

Board of Directors remuneration (certified by auditor)

Gross, in thousand CHF	Fixed remuneration		Performance-related remuneration		Employer contribution to social insurance		Total
	2022/23	2021/22	2022/23	2021/22	2022/23	2021/22	2022/23	2021/22
Gilbert Achermann, Chairman since 29.06.2022	150	94.5	55.8	25.5	16.2	9.5	222.1	129.5
Paul Fonteyne	90	94.5	33.5	25.5			123.5	120.0
Martin Münchbach	90	94.5	33.5	25.5	9.7	9.5	133.2	129.5
Betül Susamis Unaran	90	93.0	33.5	25.5	9.7	9.4	133.2	127.9
Simon Michel, Member since 29.06.2022	0.0		0.0		0.0		0.0
Dr. h.c. Willy Michel, Chairman until 29.06.2022		154.5		42.5		0.0		197.0
Total Board of Directors remuneration	420	531.0	156.3	144.5	35.7	28.4	612.1	703.9
Highest remuneration to Gilbert Achermann							222.1
Highest remuneration to Willy Michel								197.0
Further remuneration to persons related to Willy Michel:
Techpharma Management AG: for loans (Interest 01.04.–23.06.2022 until transfer to Willy Michel)							128.3	365.1
Dr. h.c. Willy Michel: for loans (Interest 24.06.–03.10.2022 until prepayment of the loan)							49.6
Techpharma Management AG: for rented business premises and services provided							840.0	840.0

No further benefits.

The total performance-related remuneration of the Board of Directors amounts to kCHF 166.0 (previous year: kCHF 150.6). The performance-related portion amounts to kCHF 156.3 (previous year: kCHF 144.5) plus corresponding employer contributions to social security of kCHF 9.7 (previous year: kCHF 6.1).

The fixed remuneration of kCHF 620 approved at the AGM as at 29 June 2022 was not utilised by kCHF 200.0 (excluding social security contributions).

The remuneration of Simon Michel as a member of the Board of Directors and two committees is included in his remuneration as CEO, he will not receive any additional remuneration for the mandate as a member of the Board of Directors.

Executive Board remuneration (certified by auditor)

Gross, in thousand CHF		Fixed remuneration		Other remuneration		Performance-related remuneration		Employer contribution to social insurance		Total
	2022/23	2021/22	2022/23	2021/22	2022/23	2021/22	2022/23	2021/22	2022/23	2021/22
Simon Michel, CEO	650.0	640.3	25.7	20.0	353.4	284.6	108.9	101.5	1138.0	1046.4
Add. members	2284.6	2410.1	60.3	115.8	626.2	543.8	451.0	440.3	3422.1	3510.0
Subtotal	2934.6	3050.4	86.0	135.8	979.6	828.4	559.9	541.8
Total Executive Board remuneration									4560.1	4556.4
Highest remuneration to Simon Michel							1138.0	1046.4

The net fixed basic remuneration of kCHF 2 934.6 plus employer contributions to social security of kCHF 475.9 totalled kCHF 3 410.5. This means that the maximum total amount of fixed remuneration for the 2022/23 financial year of kCHF 3 900.0 which was approved at the AGM on 30 June 2021 was not utilised by kCHF 489.5.

The total performance-related remuneration paid to the Executive Board amounts to kCHF 1 063.5 (previous year: kCHF 902.8) – the performance-related remuneration amounts to kCHF 979.6 (previous year: kCHF 828.4) plus corresponding employer contributions to social security kCHF 83.9 (previous year: kCHF 74.4).

No loans and credits

No loans or credits were granted to current or former members of the Board of Directors and the Executive Board or to related parties close to them during the reporting year. No such loans or credits were outstanding as of 31 March 2023.

No other remuneration

No remuneration or waiving of claims was granted to present or former members of the Board of Directors and the Executive Board or parties related to them during the reporting year, with the exception of remuneration given in the table on page 123.

Statutory rules governing the principles of remuneration

The Articles of Association of Ypsomed Holding AG contain the following with regard to the principles of remuneration:

• The General Meeting of Shareholders approves annually on a binding basis and upon the proposal of the Board of Directors the total amounts of the fixed remuneration for the following approval periods:
• for the Board of Directors until the next Annual General Meeting of Shareholders.
• for the Executive Board for the financial year following the Annual General Meeting of Shareholders.
• If the General Meeting of Shareholders should refuse to approve a total amount, the Board of Directors may propose new motions at the same General Meeting of Shareholders or defer the approval of the remuneration until an Extraordinary General Meeting of Shareholders or until the next Annual General Meeting of Shareholders. Until the fixed remuneration components have been approved by the General Meeting of Shareholders the remuneration can be paid subject to approval.

• The General Meeting of Shareholders approves annually on a binding and individual basis the amount of the performance-related remuneration components for the members of the Board of Directors and the Executive Board for the financial year preceding the General Meeting of Shareholders.

• The amounts of remuneration approved by the General Meeting of Shareholders can be paid by the company itself or by the company that it controls.

• The Board of Directors is entitled to pay all types of permissible remuneration from the authorised, fixed remuneration amounts or the additional amounts subject to legal provisions.
• Remunerations may be paid in cash, in contributions in kind and in rights to receive equity shares.
• If new members are elected to the Executive Board following the resolution of the General Meeting of Shareholders, an additional amount of a maximum of 25% of the previous total of the approved fixed remuneration amounts for the approval period shall be made available to the company.
• The company can conclude temporary and permanent contracts with members of the Board of Directors governing their remuneration. Temporary contracts have a maximum period of one year, but they may be renewed more than once. Permanent contracts have a maximum notice period of twelve months.
• The company can conclude temporary and permanent contracts with members of the Executive Board governing their remuneration. Temporary contracts have a maximum period of six months, but they may be renewed more than once. Permanent contracts have a maximum notice period of six months.
• The remuneration for non-competition clauses concluded with members of the Executive Board may be paid for a maximum of twelve months and must not exceed the last annual remuneration paid prior to the departure of this member.

Investments held by the Board of Directors and the Executive Board

See notes on the annual financial statement 2022/23 of Ypsomed Holding AG, page 92.

Outlook: introduction of long-term incentive plan as of financial year 2023/2024

To further strengthen Ypsomed's strategic long-term interests and sustainable growth with increased profitability and thus the value of the company, a share-based longterm remuneration element will be introduced with the long-term incentive plan (LTIP) as from the 2023/2024 financial year. As a share-based plan, the LTIP follows the market standard among listed Swiss companies and covers the Board of Directors, the Executive Board as well as other executives. The introduction of the LTIP for the Board of Directors and the Executive Board requires a corresponding amendment of the Articles of Association, which is on the agenda for the Annual General Meeting 2023. Insofar as the Annual General Meeting 2023 approves these amendments to the Articles of Association in the context of remuneration, the Annual General Meeting on 28 June 2023 will also vote for the first time on a share-based, long-term remuneration element for the members of the Board of Directors and for the members of the Executive Board. The Annual General Meeting will vote accordingly on the total allocation amount for all members of the Board of Directors and on the total allocation amount for all members of the Executive Board for a given period in each case. The allocation amount is calculated assuming a target achievement of 100%, whereby the actual target achievement can vary between 0% and 200%.

The LTIP provides for an annual allocation of unsecured and conditional deferred subscription rights in the form of performance share units (PSUs), which are subject to a three-year performance period (vesting period). The number of allocated PSUs per annum is calculated on the basis of an allocation amount individually determined by the Board of Directors divided by the price per PSU; the price per PSU corresponds to the volume-weighted average of the daily closing prices of the share over 20 trading days prior to the start of the vesting period. The performance and service conditions defined for the respective vesting period are decisive for the realisation of the PSUs.

The performance conditions for the LTIP include:

• Total Shareholder Return with a weighting of 50% to promote long-term corporate value creation;
• Cumulative EBIT with a weighting of 50% to support sustainable growth in profitability.

The targets for each performance condition are defined annually by the Board of Directors for the respective three-year vesting period. Depending on the target achievement, the PSUs will be converted into shares after the three-year vesting period in a possible ratio between 0.0 to 2.0; in case of a target achievement of 100%, the conversion will be one-to-one, i.e. each PSU will be converted into one share. In this context, future share price volatility will affect the equivalent value that the entitled persons will receive. The shares are not blocked.

The service condition is reflected by the requirement of an existing employment or mandate relationship at the end of the respective vesting period. Termination of the employment or mandate relationship generally leads either to a reduction in the number of the granted PSUs or to their forfeiture.

With the introduction of the LTIP, the Board of Directors has decided to waive performance-related remuneration for the Board of Directors for the respective completed financial year, for the first time for the current financial year 2023/24. In the area of fixed remuneration, it was decided that the work in the Board of Directors' committees should be remunerated separately as from the 2023 Annual General Meeting. For the period from the Annual General Meeting 2023 to the Annual General Meeting 2024, CHF 20 000 are foreseen for the chairmanship of a committee and CHF 10 000 per seat on a committee; these amounts are included in the fixed remuneration for the period from the Annual General Meeting 2023 to the Annual General Meeting 2024.

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Report of the statutory auditor

to the General Meeting of Ypsomed Holding AG

Burgdorf

Report on the audit of the remuneration report

Opinion

We have audited the remuneration report of Ypsomed Holding AG (the Company) for the year ended 31 March 2023. The audit was limited to the information on remuneration, loans and advances pursuant to Art. 14 to 16 of the Ordinance against Excessive Remuneration in Listed Companies Limited by Shares (Ordinance) contained in the tables labeled 'certified by auditor' on page 123 of the remuneration report.

In our opinion, the information on remuneration, loans and advances in the remuneration report (page 123) complies with Swiss law and article 14 to 16 of the Ordinance.

Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor's responsibilities for the audit of the remuneration report' section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the tables marked 'certified by auditor' in the remuneration report, the consolidated financial statements, the financial statements and our auditor's reports thereon.

Our opinion on the remuneration report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the remuneration report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the audited financial information in the remuneration report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' responsibilities for the remuneration report

The Board of Directors is responsible for the preparation of a remuneration report in accordance with the provisions of Swiss law and the company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of a remuneration report that is free from material misstatement, whether due to fraud or error. The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.

Auditor's responsibilities for the audit of the remuneration report

Our objectives are to obtain reasonable assurance about whether the information on remuneration, loans and advances pursuant to article 14 to 16 of the Ordinance is free from material misstatement, whether due to fraud or error, and to

PricewaterhouseCoopers AG, Bahnhofplatz 10, Postfach, 3001 Bern, Switzerland Telefon: +41 58 792 75 00, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity

As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement in the remuneration report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safe-quards applied.

PricewaterhouseCoopers AG

Oliver Kuntze Licensed audit expert Auditor in charge

Bern, 16 May 2023

Astrit Mehmeti Licensed audit expert

Asthma

Bronchial asthma (asthma for short) is a chronic disease of the respiratory airways. Asthma is characterised by spasms of the bronchi and a swelling of the bronchial mucosa with an excessive production of viscous mucus. The result is a narrowing of the bronchi (bronchospasm) with the typical sudden attacks of asthma complaints: coughing, wheezing (whistling breath, particularly when exhaling), a feeling of tightness in the airways, up to severe attacks of asthma with life-threatening shortness of breath. Respiratory distress is expressed by sudden attacks, frequently at night or the early morning.

Autoinjector

In autoinjectors, needle insertion into the skin and/or injection of the drug are automatic, usually driven by means of a spring mechanism.

Basal rates

The basal rate is the continuous dosage of rapid-acting insulin to cover a patient's basic needs.

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 for the 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 (hyperglycaemia), diabetes mellitus typically exists. In intensive 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.

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 using a photometric or electrochemical process and displayed by the monitoring device. In the case of intensive insulin therapy, the measuring of the blood sugar takes place at least four times daily.

Bolus

When a patient needs more insulin (especially at mealtimes), a bolus, i.e. an additional dose of insulin, is administered to cover this increased requirement.

Cartridge

A drug reservoir containing the drug to be administered used with, for example, reusable pens. Some substances need pens with dualchamber cartridges, which contain lyophilised drugs and diluent that are mixed automatically in the pen before use.

CGM/FGM

Continuously measuring glucose sensors measure the concentration of tissue glucose in the body. Continuous glucose monitoring (CGM) is generally used in people with diabetes mellitus in order to better control the therapy. In FGM systems (Flash Glucose Monitoring), the tissue glucose concentration is not measured or scanned continuously, but only on demand.

Compliance

In medicine, we talk about the compliance of the patient. This means that, in the case of many illnesses, the patient must have a cooperative attitude for healing to occur. In the medical sense therefore, compliance can be described as observing your therapy and taking your 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.

Diabetes mellitus

Diabetes mellitus is a chronic metabolic disorder involving increased blood sugar levels. In people with diabetes mellitus, the glucose in the blood can no longer be absorbed into the cells of the body in the requisite quantity for the production of energy. As a result, there is excess glucose in the blood (hyperglycaemia/excess sugar), which is then excreted in part through the kidneys. In type 1 diabetes mellitus, the body produces insufficient insulin, or no 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 cases 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. It is therefore frequently labelled 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.

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 produced on an ongoing basis. 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 the subcutaneous injection of GLP-1 prevents excessively high levels of blood sugar.

Hyperglycaemia

Hyperglycaemia (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 hyperglycaemia 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 is that 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 recognised 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 hyperglycaemia.

Hypoglycaemia

Hypoglycaemia is low blood sugar with a blood sugar value of less than 40 mg/dl (2.2 mmol/l) without the presence of symptoms. Hypoglycaemia can occur in all diabetics who are treated with sulphonylurea, glinides 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 by drinking fruit juice. Severe hypoglycaemia can lead to unconsciousness and requires immediate medical attention.

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 autoinjectors 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 pump

Insulin pumps are small, battery-operated devices (about the size of a pager or mobile phone) that can replace regular insulin injections for patients managing diabetes. They contain an insulin  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, the cannula for which is under the skin. The catheter and cannula are changed every one to three 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 he/she is asleep. In addition, the patient can deliver extra insulin doses at the touch of a button in order to be able to cover additional insulin requirements, for example at mealtimes. 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 as necessary.

Migraine

Migraine is a neurological disease which affects approximately 10% of the population. It is three times more prevalent in women than men and is typically characterised by periodically recurring sudden attacks of pulsating and unilateral headaches which can be accompanied by additional symptoms such as nausea, vomiting, sensitivity to light or noise.

Multiple sclerosis

Multiple sclerosis (MS) is a chronic inflammatory disease which attacks the myelin sheath in the central nervous system. Next to epilepsy, it is one of the most common neurological diseases in young adults and of considerable socio-medical significance.

Originator drug

Original products are approved medicinal products which allowed first use of a specific drug substance for therapeutic purposes in humans (or animals).

Osteoporosis

Osteoporosis is a classical age-related disease that causes bones to become weak and brittle and it therefore increases the risk of a broken bone.

Pen (injection pen)

Injection device that 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 single 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.

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), autoinjectors, motor-driven injection systems, safety products and needle-free technology.

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.

Viscosity

Viscosity expresses the fluidity or ductility of liquids and gases. The greater the viscosity, the more viscid (less flowable) the fluid, the lower the viscosity, the less viscid (flowable) it is, in other words, it can flow faster under the same conditions.

Automatic production of our YpsoMate autoinjector in Burgdorf

Publisher Ypsomed Holding AG, Burgdorf

Text, Concept and Design Ypsomed AG, Communications, Solothurn

Printing

Stämpfli Communications, staempfli.com

The Ypsomed Group publishes its 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", "target", "ambition" 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.

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mylife, YpsoPump, YpsoMate, YpsoPen, UnoPen, ServoPen and YpsoDose are registered trademarks of Ypsomed AG.

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