Financial Report

Notes to the financial statements of PolyPeptide Group AG

General information

Accounting policies
These financial statements were prepared in accordance with the provisions of the Swiss Law on Accounting and Finance Reporting (32nd title of the Swiss Code of Obligations). Significant valuation principles that have been applied in the preparation of these financial statements that are not prescribed by law are described below.

Presentation of cash flow statement and additional disclosures in the notes dispensed with
As PolyPeptide Group AG (the “Company”) has prepared consolidated financial statements under a recognized accounting standard (IFRS), it has decided, in accordance with the law, to dispense with the presentation of information on interest-bearing liabilities and audit fees in the notes, a cash flow statement, and an annual review.

Financial year 2021 and 2022
The first financial year ran from 7 April 2021 to 31 December 2021.
In 2022, the financial year ran from 1 January 2022 to 31 December 2022.

Valuation principles
Assets are valued at no more than cost. Liabilities are carried at nominal value.

All assets and liabilities in foreign currencies are translated by applying the exchange rate prevailing on the balance sheet date. Exchange differences are recognized in the income statement.

Earnings and expenses originated in foreign currencies are translated with the monthly exchange rate.

Investments
Investments are shown at individual historical acquisition costs less impairment, if any.

Own shares
Own shares are recognized in equity as a negative item at cost as per the date of acquisition. In the event of a subsequent sale, a gain or loss is recognized through the income statement and is included in retained earnings or accumulated deficit to be carried forward in equity.

Share-based payments
Part of the variable compensation paid to members of the Executive Committee and part of the compensation paid to members of the Board of Directors is in the form of Company shares. The acquisition cost of the shares is recorded under personnel expense.

Declaration of the number of full-time equivalents (FTEs)
The average number of full-time positions during the reporting was below 50.

1 Cash and cash equivalents

Financial Report

1Cash and cash equivalents

kCHF

2022

2021

 

 

 

Cash

10,061

24,968

Fixed-term deposit

92,500

Balance as at 31 December

10,061

117,468

2 Investments

Financial Report

2Investments

As at 31 December 2022, the Company held the following direct and significant indirect investments:

Group companies

Location

Capital and voting shares

 

 

Direct

Indirect

 

 

 

 

Polypeptide Laboratories Holding (PPL) AB

Limhamn, Sweden

100%

 

Polypeptide Laboratories (Sweden) AB

Limhamn, Sweden

 

100%

PolyPeptide SA

Braine-l’Alleud, Belgium

 

100%

PolyPeptide Laboratories France S.A.S.

Strasbourg, France

 

100%

PolyPeptide Laboratories Inc.

Torrance, CA, USA

 

100%

PolyPeptide Laboratories San Diego, LLC

San Diego, CA, USA

 

100%

PolyPeptide Laboratories Pvt. Ltd.

Ambernath (East), India

 

100%

PolyPeptide Laboratories A/S

Hillerød, Denmark

 

100%

As at 31 December 2021, the Company held the following direct and significant indirect investments:

Group companies

Location

Capital and voting shares

 

 

Direct

Indirect

 

 

 

 

Polypeptide Laboratories Holding (PPL) AB

Limhamn, Sweden

100%

 

Polypeptide Laboratories (Sweden) AB

Limhamn, Sweden

 

100%

PolyPeptide SA

Braine-l’Alleud, Belgium

 

100%

PolyPeptide Laboratories France S.A.S.

Strasbourg, France

 

100%

PolyPeptide Laboratories Inc.

Torrance, CA, USA

 

100%

PolyPeptide Laboratories San Diego, LLC

San Diego, CA, USA

 

100%

PolyPeptide Laboratories Pvt. Ltd.

Ambernath (East), India

 

100%

PolyPeptide Laboratories A/S

Hillerød, Denmark

 

100%

PolyPeptide Laboratories GmbH 1

Hamburg, Germany

 

100%

1 During 2022, PolyPeptide Laboratories GmbH was merged into Polypeptide Laboratories Holding (PPL) AB.

Percentage of voting shares is equal to percentage of ownership.

3 Contingent liabilites and guarantees

Financial Report

3Contingent liabilites and guarantees

Limited Partnership Investments

 

2022

2021

 

kUSD

kCHF

kUSD

kCHF

 

 

 

 

 

Uncalled capital commitment as at 31 December

27,000

24,932

27,000

24,709

Limited Partnership Investments
In November 2021, the Company entered into a limited partnership agreement. The Company committed to invest a maximum amount of kUSD 30,000. As at 31 December 2021 and 31 December 2022, kUSD 3,000 has already been invested and thus kUSD 27,000 is disclosed as an uncalled capital commitment.

Guarantee pension fund
All members of the PRI Pensionsgaranti, the issuer of the definied benefit plan in Sweden, are subject to a mutual liability. This liability would only be invoked in the event that PRI Pensionsgaranti has consumed all its assets. The mutual liability of the Group is limited to a maximum of 2% of the Group's individual pension liability with PRI Pensionsgaranti. As such, the Group has a contingent liability of kEUR 225 as at 31 December 2022 (2021: kEUR 182), for which it has issued a guarantee to PRI Pensionsgaranti.

4 Share capital

4Share capital

The Company was founded with a share capital of CHF 300,000 and was increased to CHF 331,250.01 on 28 April 2021. As at 31 December 2022, the share capital in the amount of CHF 331,250.01 consists of 33,125,001 registered shares with a nominal value of CHF 0.01 per share. 

5 Reserves from capital contributions

Financial Report

5Reserves from capital contributions

CHF

2022

2021

 

 

 

Reserves from capital contributions (foreign)

1,909,783,753

1,919,700,000

Reserves from capital contributions (domestic)

195,019,440

195,019,440

Total reserves from capital contribution as at 31 December

2,104,803,193

2,114,719,440

The reported reserves from capital contributions as capital contributions within the meaning of Art. 5 para. 1bis (for the part of the “domestic KER”) or Art. 5 para. 1quater lit. a of the Withholding Tax Act (for the part of the “foreign KER”) have been confirmed by the Swiss Federal Tax Administration as at 1 June, 2022.

6 Treasury shares

Financial Report

6Treasury shares

2022

No of Shares

Average prices in CHF

 

 

 

Own shares as at 1 January 2022

20,371

64.00

Purchase

200,000

71.86

Allocations to Board members/executive management (incl. group companies)

21,175

70.68

Own shares as at 31 December 2022

199,196

70.54

 

 

 

 

 

 

2021

No of Shares

Average prices in CHF

Own shares as at 1 January 2021

0

 

Purchase

93,750

64.00

Allocations to Board members/executive management (incl. group companies)

73,379

64.00

Own shares as at 31 December 2021

20,371

64.00

From March to July 2022, the Company purchased 200,000 own shares at the average price of CHF 71.86 to be held as treasury shares. 21,175 number of shares have been transferred to employees and Board members as part of their share-based remuneration during 2022 (2021: 73,379 number of shares were transferred to employees and Board members as part of their share-based remuneration, including as part of the IPO recognition bonus reimbursed by Draupnir Holding B.V.).

7 Financial income

Financial Report

7Financial income

kCHF

2022

2021

 

 

 

Interest income from Group companies

2,212

248

Realized capital gain treasury shares

251

Total financial income

2,212

499

8 Other financial expenses

Financial Report

8Other financial expenses

kCHF

2022

2021

 

 

 

Foreign exchange result

-4,716

2,225

Other financial expenses

-742

Realized capital loss treasury shares

-616

Total other financial expenses

-6,074

2,225

9 Impairment loss on investments

9Impairment loss on investments

Due to the large weight of the main asset (i.e., the investment in Polypeptide Laboratories Holding (PPL) AB, Sweden) in the overall assets of PolyPeptide Group AG, the decreased share price of the PolyPeptide Group AG represents an impairment indicator for the underlying investment.

For reasons of valuation consistency, the impairment test was carried out using the same method as the original pricing of the shares at the IPO:
30,000,000 (number of shares) x CHF 25.32 (share price on 31 Dec 2022) - CHF 300,000 =
Net market value of PolyPeptide Laboratories Holding (PPL) AB, Sweden.

The impairment test resulted in an impairment loss of CHF 1,160,400 in 2022, which has been recognized in the income statement. 

10 Share ownership of the Board of Directors and the Executive Committee

Financial Report

10Share ownership of the Board of Directors and the Executive Committee

As at 31 December 2022:

 

Function

Number of shares

which are blocked

allocated in the reporting period

 

 

 

 

 

Klaus Peter Wilden

Chairman

8,402

8,402

6,744

Patrick Aebischer

Vice-Chairman

5,318

5,318

4,213

Beat In-Albon

Member

4,787

4,787

3,792

Jane Anne Salik

Member

19,553

2,292

1,816

Erik Schropp

Member

3,193

Philippe Weber

Member

5,835

5,835

4,610

Total Board of Directors

 

47,088

26,634

21,175

 

 

 

 

 

 

Function

Number of shares

which are blocked

allocated in the reporting period

 

 

 

 

 

Raymond De Vré

CEO

16,486

9,766

6,720

Jan Fuhr Miller

CFO

7,767

Daniel Lasanow 1)

Director Global Operations

7,767

Christina Del Vecchio

General Counsel

Neil James Thompson

Director Global Sales and Marketing

1,122

Jens Fricke 2)

Director Global Operations

1,380

Total Executive Committee

 

34,522

9,766

6,720

 

 

 

 

 

Total

 

81,610

36,400

27,895

1 Member of the Executive Committee until 30 November 2022.

2 Member of the Executive Committee as of 1 December 2022.

As at 31 December 2021:

 

Function

Number of shares

which are blocked

allocated in the reporting period

 

 

 

 

 

Klaus Peter Wilden

Chairman

1,658

1,658

1,658

Patrick Aebischer

Vice-Chairman

1,105

1,105

1,105

Beat In-Albon

Member

995

995

995

Jane Anne Salik

Member

17,737

476

17,737

Erik Schropp

Member

3,193

3,193

Philippe Weber

Member

1,225

1,225

1,225

Total Board of Directors

 

25,913

5,459

25,913

 

 

 

 

 

 

Function

Number of shares

which are blocked

allocated in the reporting period

 

 

 

 

 

Raymond De Vré

CEO

16,486

unvested

unvested

Jan Fuhr Miller

CFO

7,767

7,767

Jan Christensen 1)

Director Global Sales and Marketing

7,767

7,767

Daniel Lasanow

Director Global Operations

7,767

7,767

Christina Del Vecchio

General Counsel

Neil James Thompson 2)

Director Global Sales and Marketing

1,122

1,122

Total Executive Committee

 

40,909

24,423

 

 

 

 

 

Total

 

66,822

5,459

50,336

1 Member of the Executive Committee until 31 December 2021.

2 Member of the Executive Committee as of 1 January 2022.

11 Major Shareholders

Financial Report

11Major Shareholders

Based on the available information, the following shareholders are considered significant shareholders in accordance with Art. 120 of the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (the “FMIA”) (> 3% of the registered share capital).

Major shareholders 2022:

Shareholder

Number of shares

Percentage of voting rights

Cryosphere Foundation (St. Peter Port, Guernsey) / Draupnir Holding B.V. (Hoofddorp, The Netherlands) 1)

18,582,406

56.10%

Capital Research and Management Company (Los Angeles, USA)

T. Rowe Price Associates, Inc. (Baltimore, USA) 2)

1,430,263

4.31%

Rudolf Maag (Binningen BL, Switzerland) 3)

1,100,000

3.32%

Premier Fund Managers Limited (Guildford, Surrey, UK) 4)

1,073,211

3.24%

Premier Portfolio Managers Limited (Guildford, Surrey, UK) / Premier Miton European Opportunities Fund 5)

1,002,111

3.03%

Total important shareholders

23,187,991

70.00%

1 Disclosure notice of 9 December 2022. The disclosure notice included shares held by the Company (PolyPeptide Group AG, Baar, Zug, Switzerland) as well as sale positions by the Company pursuant to the long-term incentive plan representing 0.03% of voting rights corresponding to the maximum award of 9,909 performance share units. As at 31 December 2022, the Company was a 55.47% subsidiary of Draupnir Holding B.V., a company registered in The Netherlands. Draupnir Holding B.V.'s ultimate parent entity is Cryosphere Foundation (St. Peter Port, Guernsey; formerly known as Foundation Mamont), a foundation registered on Guernsey of which Mr. Frederik Paulsen (1006 Lausanne, Vaud, Switzerland) is at present the principal beneficiary pursuant to the charter of the foundation governed by the laws of Guernsey.

2 Disclosure notice of 13 December 2022. The Company received an updated disclosure notice of 10 January 2023 indicating that the reported shareholding had fallen below 3%.

3 Disclosure notice of 4 May 2021.

4 Disclosure notice of 9 December 2022.

5 Disclosure notice of 9 December 2022.

Major shareholders 2021:

Shareholder

Number of shares

Percentage of voting rights

Draupnir Holding B.V. (Hoofddorp, The Netherlands) 1)

18,396,859

55.54%

Capital Research and Management Company (Los Angeles, USA) 2)

1,546,023

5.34%

Rudolf Maag (Binningen BL, Switzerland) 3)

1,100,000

3.32%

T. Rowe Price Associates, Inc. (Baltimore, USA) 4)

995,004

3.00%

Total important shareholders

22,037,886

67.20%

1 PolyPeptide Group AG (the "Company") was incorporated in Switzerland on 6 April 2021. As at 31 December 2021, the Company was a 55.54% subsidiary of Draupnir Holding B.V., a company registered in The Netherlands. Draupnir Holding B.V.'s ultimate parent entity is Foundation Mamont, a foundation registered on Guernsey of which Mr. Frederik Paulsen (1006 Lausanne, Vaud, Switzerland) is at present the principal beneficiary pursuant to the charter of the charter of foundation governed by the laws of Guernsey.

2 The disclosure notice of 6 May 2021 includes 1,546,023 shares of the Company corresponding to 5.34% of all voting rights, of which 0.67% were delegated by a third party.

3 Disclosure notice of 5 May 2021.

4 Disclosure notice of 17 February 2022.

12 Residual amount of leasing obligations

12Residual amount of leasing obligations

The maturity of leasing obligations which have a residual term of more than twelve months or which cannot be canceled within the next twelve months is as follows:

kCHF

31 December 2022

31 December 2021

 

 

 

0-1 years

113

1-5 years

452

More than 5 years

481

Total

1,046

13 Subsequent events

13Subsequent events

There have been no significant events subsequent to the balance sheet date that would require additional disclosure in the financial statements.

The financial statements for 2022 were approved for issue by the Board of Directors on 9 March 2023 and are subject to approval by the Annual General Meeting on 12 April 2023.

14 Proposal for the appropriation of accumulated deficit

Proposal for the appropriation of accumulated deficit

The Board of Directors proposes that the General Meeting approves that the accumulated deficit of CHF 1,173,234,646 be carried forward to the new account.

Appropriation of accumulated deficit

CHF

2022

 

 

Accumulated deficit brought forward

-9,603,831

Net loss for the period

-1,163,630,815

Accumulated deficit to be carried forward

-1,173,234,646