2014 Valartis Group Consolidated Financial Statements

Valartis Group AG / 2014 Valartis Group Consolidated Financial Statements . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

The 2014 Valartis Group Consolidated Financial Statements, in accordance with International Financial Reporting Standards (IFRS), show a Group loss of CHF 73.3 m for continued operations and discontinued operations, taking into consideration non-recurring, exceptional factors (2013 on a comparable basis: Group profit of CHF 0.4 m). This is made up of the loss of CHF 19.6 m from discontinued operations resulting from divestment of Valartis Bank AG, Switzerland and Valartis Wealth Management S.A. plus a loss from continued operations of CHF 53.7 m. The loss from continued operations of CHF 53.7 m is mainly attributable to the following factors: necessary value adjustments on receivables from the 2012 sale of Eastern Property Holdings Ltd., impairment of goodwill positions, a decrease in income from interest and a significantly lower trading result in 2014 due to lower rouble valuations on private equity holdings and losses on the ENR Russia Invest S.A. bond portfolio.

Due to divestment of Valartis Bank AG, Switzerland and Valartis Wealth Management S.A., the provisions of the International Reporting Standards (IFRS) for continued and discontinued operations (IFRS 5) apply for the Valartis Group 2014 Annual Report. The activities of these two companies are allocated to discontinued operations in 2014.

Overview of continued operations

The Group loss from continued operations amounting to CHF 53.7 m is mainly attributable to the following factors:

• value adjustments which became necessary in 2014 on receivables from the 2012 sale of Eastern Property Holdings Ltd. amounting to CHF 27.5 m due to substantial value adjustments on real estate projects effected by that company as a result of the current economic situation in Russia on the back of international sanctions;
• impairment of goodwill positions amounting to CHF 10.6 m;
• a significant decrease in income from interest for continued operations amounting to CHF 8.3 m due to declining market interest rates and the lack of reinvestment in bonds in FY 2014;
• a significantly lower 2014 trading result due to lower rouble valuations on private equity holdings and losses on the ENR Russia Invest SA bonds portfolio amounting to CHF 8.1 m.

Continued operations from an operational viewpoint