CEO's Foreword

Flemming Ørnskov, M.D., MPH

2023 was a landmark year for Galderma, marked not only by very strong growth but also by significant progress towards our purpose of advancing dermatology for every skin story. As the pure-play dermatology leader, we have successfully distinguished ourselves with a proven strategy in the fast-growing dermatology market, driving consistent and sustainable performance.

We compete in the high-growth and resilient dermatology market, focusing on the fast-growing and highly attractive consumer-focused sub-segments of Injectable Aesthetics, Dermatological Skincare and Therapeutic Dermatology. Unique to Galderma, our Integrated Dermatology Strategy capitalizes on our distinctive strengths and competitive advantage.

With the strong results we achieved in 2023, we are now concluding our first phase since becoming a standalone company in 2019. Among our key achievements has been the development of a scalable and integrated dermatology platform, crucial to our growth journey and our establishment as the leader in dermatology, the fastest growing ‘self-care’ market in healthcare.

Now entering Phase Two, Galderma will continue to execute its proven strategy to reliably outperform the market and deliver strong growth and continued margin expansion in the mid-term. Exciting developments include two biologic launches with blockbuster potential in two highly attractive and underserved indications in Therapeutic Dermatology - prurigo nodularis and atopic dermatitis - as well as in Injectable Aesthetics with a next-generation, highly differentiated liquid neuromodulator. Above all, we will continue to focus on what matters most: meeting the evolving needs of our consumers, patients and customers in close partnership with healthcare professionals.

Complete dedication to dermatology, the fastest growing self-care market

With our strong foundation in science and a rich consumer heritage of over 40 years, Galderma has emerged as the self-care category leader in dermatology. We are the only scaled company fully dedicated to dermatology, spanning its three most attractive segments. With a presence in over 90 countries through an integrated, omni-channel commercial platform and a consumer-centric business model enhanced by digitally enabled execution, we hold a unique position.

Compared to other self-care sectors, dermatology stands out for its size, growth, and untapped market penetration potential. Its expansion is propelled by several key trends: the rising middle class, increasing consumer awareness of skin health, a growing focus on preventive care, broader acceptance of aesthetic treatments, the continued importance of endorsements from healthcare professionals, and the influential role of social media.

Galderma has made deliberate choices to compete in high-growth segments where science and healthcare professionals are paramount. Valued at approximately $87 billion USD, the combined markets of Injectable Aesthetics, Dermatological Skincare and Therapeutic Dermatology are expected to grow to approximately $113 billion USD by 2027. This expansion of our target addressable market is also a result of our research and development efforts over recent years. As a result, we are preparing to enter the attractive biologics sub-segments of Therapeutic Dermatology with nemolizumab, our investigational monoclonal antibody for prurigo nodularis and atopic dermatitis. These sub-segments are forecast to reach $2 billion USD and $20 billion USD, respectively, by 2027.

Phase One (2019-2023): building our integrated dermatology platform

Galderma’s portfolio in dermatology is unparalleled, featuring flagship brands for every skin story. In 2023, our commitment to innovate led to significant milestones, such as FDA approval of Restylane® Eyelight™ and the introduction of multiple Restylane indications in China; the launch of Cetaphil Healthy Renew® in the U.S. and Brazil, with a tailored innovation pipeline to drive growth in China; the continued portfolio and geographic expansion of ALASTIN Skincare®; and unveiling new Phase IV data for Aklief®.

Highlighting our pipeline’s progress are positive Phase III results for nemolizumab in the ARCADIA 1 & 2 and OLYMPIA 1 & 2 trials for atopic dermatitis and prurigo nodularis, respectively. The OLYMPIA 2 results, published in the New England Journal of Medicine, highlight nemolizumab’s promise as a novel treatment. Additionally, relabotulinumtoxinA (QM-1114), an innovative ready-to-use liquid botulinum toxin A, has reached the regulatory filing stage, with results from the READY trial program indicating high patient satisfaction and long duration of effect.

Our global reach is achieved through omni-channel execution, a specialized salesforce of 1,900 employees, and a network covering 270,000 retailers and pharmacies. Engaging with over 110,000 healthcare professionals ensures our products and services are widely accessible and tailored to diverse needs. Recognizing the consumer-driven nature of our business, we seek to engage consumers in meaningful ways, including through digital tools, services, and loyalty programs.

We are further differentiated by market-leading education and services, highlighted by our significant presence at major congresses and events. In 2023, we presented over 50 scientific presentations at the World Congress of Dermatology, contributing also to the European Academy of Dermatology and Venereology (EADV), the Aesthetic & Anti-Aging Medical World Congress (AMWC), the American Academy of Dermatology (AAD), and IMCAS World Congress. Our commitment to advancing science is demonstrated by our extensive research, having conducted over 770 clinical trials since 2019.

Our propriety training education programs are also invaluable to healthcare practitioners and play a crucial role in our strategy. This is demonstrated by our hosting of over 11,000 such events annually, and training over 130,000 participants[1] through the Galderma Aesthetics Injectors Network (GAIN).

During 2023 we also embraced technology to launch several new digital solutions. One such innovation is FACE by Galderma™, a cutting-edge aesthetic visualization application that enables practitioners to show potential treatment outcomes in real time. Furthermore, Cetaphil AI Skin Analysis uses advanced artificial intelligence to enhance the shopping experience for users, providing personalized skincare recommendations based on their needs.

Our strong Phase One performance

Leveraging our platform, from 2019 to 2023 Galderma achieved a net sales constant currency CAGR of 11.9% and even faster growth in Core EBITDA, with a constant currency CAGR of 13.9%. Our portfolio has scaled to boost three blockbuster or near blockbuster product platforms: neuromodulators, plus fillers and biostimulators in Injectable Aesthetics, alongside Dermatological Skincare. In this timeframe, we also significantly invested in our pipeline, advancing nemolizumab and relabotulinumtoxinA to regulatory filings. With the anticipated launch of nemolizumab, which remains subject to regulatory approvals, Galderma has the potential to also elevate Therapeutic Dermatology to blockbuster status. Despite challenging economic and geopolitical landscapes, this period of growth and development highlights Galderma’s capacity to outpace broader market trends and increase our market share.

Galderma has a track record of meeting financial targets and upholding our commitments to growth and operational excellence. This has been particularly evident in the past two years, during which we have provided public guidance and successfully delivered on our objectives.

In 2023, we achieved net sales growth of 8.5% in constant currency compared to the previous year, surpassing 4 billion USD in revenue for the first time. This underscores the strong momentum and broad-based growth across our product categories and regions, attributed to our focus on volume expansion and tangible contributions from product mix and pricing. Furthermore, we reported a 202-basis point expansion in our Core EBITDA margin over the same period, reflecting our premiumization strategy, structural savings from our multi-year transformation program, and the normalization of investments in key projects in our pipeline.

In our product categories, Injectable Aesthetics continued its strong growth with market share gains in neuromodulators and biostimulators. Our flagship brands, Cetaphil^® and ALASTIN Skincare, drove substantial growth in Dermatological Skincare, with Cetaphil achieving sales of over $1 billion USD for the first time. Therapeutic Dermatology also recorded growth, driven by both the U.S. and international markets.

Our regions continued their growth momentum in 2023, especially in rapidly expanding markets in Asia Pacific and Latin America. In Europe, we secured a leading position in neuromodulators, while in the U.S., we accelerated our performance reaching double-digit growth in the latter half of the year.

Phase Two (2024 onwards): execution of a proven strategy to drive consistent above-market performance

Embarking on our next phase, we refocus on executing against our proven strategy. With a robust and well-established platform, we are poised to drive predictably high growth fueled by three product categories and the introduction of biologics into our portfolio. Our objective remains clear: to continue advancing science-based innovations that address the changing needs of consumers, patients, and healthcare professionals.

Galderma’s success is not dependent on any single product category, brand or market. Having scaled its portfolio and commercial platform, our leadership team is entirely focused on commercial execution and bringing our innovative pipeline to patients and consumers globally.

Among our many exciting growth prospects, relabotulinumtoxinA stands out with Phase III data demonstrating a highly differentiated efficacy and convenience profile as it navigates regulatory approval, complementing our broad Injectable Aesthetics offering; ALASTIN Skincare, recognized as the most preferred peri-procedural skincare brand in the U.S., and complementing our Dermatological Skincare portfolio, has doubled its sales since its acquisition by Galderma in December 2021. Additionally, nemolizumab is set to help countless patients with challenging skin conditions and significantly scale our Therapeutic Dermatology business.

Galderma is well-prepared for the next chapter of our growth, supported by robust processes and systems that align with public market standards. Our foundation includes professional investors relations and communications, further strengthened by progress in ESG (environmental, social and governance) and 15 Great Place to Work^® designations. Our experienced management team has a track record of value creation and is ready to steer our company through this next phase of growth.

Central to our journey is a highly motivated and talented team of 6,500 employees worldwide, whose energy and dedication to dermatology are the bedrock of our success. In collaboration with healthcare professionals and the dermatology community, our focused organization is fully committed to delivering superior outcomes for consumers, patients, and customers.

Looking ahead, my confidence in our company's potential is stronger than ever. Together, we are on a journey of growth, innovation, and leadership in the field of dermatology. This marks the beginning of a new and exciting chapter for Galderma.

FLEMMING ØRNSKOV, M.D., MPH
Chief Executive Officer