Sustainable Cost Optimization (SCO) for regional HQs and Shared Service Centers in Switzerland Schaffhausen, in association with

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 1 Introduction Fuelled by a strong Swiss Franc and a strong economy direct and indirect expenses are increasing for key functions Strong Swiss Franc Real Estate Trend for Staff growth at reg. HQs Changes in corp. taxation High Productivity Clusters Well trained workforce Top Infrastructure International Business Environment, etc.

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 2 Typical HQs and SSC functions and possible optimization opportunites Operating Model ■IT Supplier / Governance ■IT Infrastructure ■Data & Records Management IT and Management Information Systems ■Professional Service Suppliers ■SCM Performance ■Vendor Management Procurement and Supply Chain ■Finance Organisational Optimization ■CPM Solutions ■Benchmark with Outside Providers ■Reporting Cycle Review ■Treasury Management ■Governance, Risk & Compliance Finance Function ■Indirect Tax Management ■Custom & Trade Management ■Contract + Tax Compliance ■Transfer Pricing ■Tax & Legal Compliance ■Tax Planning, Tax Rulings ■Legal Entity Maintenance & Rationalisation Tax / Legal Function ■Alternative Locations ■Facility Management ■Lease Review ■Facilities Utilisation Real Estate / Facilities ■Workforce Optimization ■Training & Education ■Visa / Work Permits ■Salary Benchmarks ■Payroll ■Expat Packages ■HR Operations Human Resources

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 3 Human Resources International Assignment Policy Local vs Expat Costs Expat cost USD k Standard Office Procedures Benefits Optimization Human Resources

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 4 Procurement Management In houseOutsourcing Vendor Management Process Improvement Volume Discounts Education Housing & Shipping Fleet Management Telecom Procurement and Supply Chain

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 5 Real Estate and Facilities Renegotiations Lease Agreement Regulations Utilization Ratios Optimization Support Services Facility Management Property Services Infra Services Cleaning Services Security Services Real Estate / Facilities

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 6 Finance Function Transactions Reporting s Analysis Reporting Analysis Transactions Optimization of Finance function Centralization - Decentralization Actions performed in a Pharma multinational ■Data entry – 4 different systems ■100’s of Excel spreadsheets ■Data quality – double/triple transactions Finance Function

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 7 IT and Management Information Systems IT – Strategy Procurement IT Equipment Set-up PC, Monitors, i-phones… Set-up Server Architecture (incl. cloud computing) Capacity Planning (Storage, Racks,…) Helpdesk Infrastructure (Security, HVAC, Cabling) Set-up of Network Actions performed in a multinational company in the Information Industry ■Server consolidation ■Network improvement (routers) ■Vendor negotiations (printer, Laptop and other IT equipment) ■Efficient back-up solutions (cloud) IT and Management Information Systems

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 8 Cross-functional analysis ■Identify benefits of current tax / legal set up in terms of existing tax rulings, ETR, risks and efficiencies ■Identify main administrative costs (tax & regulatory compliance costs, legal expense, etc.) and its improvement potential ■Assess legal / tax structure in regards to maintain / increase competitiveness and profitability ■Assess if new regulations (e.g. requirements for principal structures, BEPS, Corporate Tax Reform, CbC Reporting) have been proactively considered ■Evaluate usage of Tax Technology Tools Tax and Legal Model Tax / Legal Function

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 9 Analysis ■Analyze organizational / process charts and applied tax planning model ■Indentify quick cost savings wins and strategic cost optimization opportunities ■Review tax-set up Results ■Heat map with cost drivers for main functions ■Action plan for immediate and strategic cost saving opportunities ■Gap analysis of current situation against projected strategies in tax rulings highlighting areas of improvement Fact finding ■Interview a limited number of key individuals ■Review functional models for key functions ■Collect tax rulings Project Planning ■Analyze governance model and strategy ■Prepare a custom review plan based on cost structure, tax model and projected benefits […] Our approach towards sustainable cost optimization

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 10 Example of heat map Highest priorityMiddle priorityImportantLow Key: ReportingGuidelines Charts of account Treasury System Compensation Payroll Training/Education Data Management 11 IT infrastructure IT vendor management Tax Planning Contract compliance Transfer pricing model Tax / Legal Function Finance Function Human Resources IT and Management Information Systems

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 11 Action Plan FunctionsDocumentsActions Human Resources■Review of Guidelines ■Compensation and Benefits ■Relocation process ■Assess processes ■Benchmark ■Best practice Procurement■Review of vendor contracts■Identify savings potential based on other deals Finance■Data Flow ■Roles and Responsibilities ■Systems Support (excel?) ■Identify process improvements Real Estate/Facilities■Lease agreement ■Floor plans ■Assess potential lease renegotiation ■Assess utilization rate ■Facility Management organization IT Information Systems■Assess IT architecture ■Vendor agreement ■Provide alternatives ■Benchmark agreements

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 12 Savings overview (1-1.5 years) AreaCHFCost Savings Optimization of HR cost1.5 M10% Relocation (housing & shipping)0.3 M40% Telecom0.1 M20% Education0.1 M10% Building cost (inclusing furniture)2 M20% Total4 M15%

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 13 Example of gap analysis TopicProjectedCurrentTax statusTax rate Tax relevant?Risk Worst case tax rate Area of improvement Probable tax rate Employees505Full tax holiday for 10 years 0YesAbolishment of tax holiday and claw back Add more people or obtain tax ruling Investments20 MCHF in production facility 0 CHFFull tax holiday for 10 years 0YesAbolishment of tax holiday and claw back Invest or obtain tax ruling FunctionsEuropean CEO, CFO, COO, Heads of Procurement, Marketing, Quality Control, … Head of Marketing Full tax holiday for 10 years 0Non/a0Add more people or obtain tax ruling 0 Business Model Principal structure with limited risk distributors IP Company Full tax holiday for 10 years 0Non/a0Change business model or obtain tax ruling 0 Profit10 MCHF pa500 MCHF pa Full tax holiday for 10 years 0YesNo application of tax holiday on excess profit Obtain tax ruling

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 14 Typical HQs and SSC functions and possible optimization opportunites Operating Model ■IT Supplier / Governance ■IT Infrastructure ■Data & Records Management IT and Management Information Systems ■Professional Service Suppliers ■SCM Performance ■Vendor Management Procurement and Supply Chain ■Finance Organisational Optimization ■CPM Solutions ■Benchmark with Outside Providers ■Reporting Cycle Review ■Treasury Management ■Governance, Risk & Compliance Finance Function ■Indirect Tax Management ■Custom & Trade Management ■Contract + Tax Compliance ■Transfer Pricing ■Tax & Legal Compliance ■Tax Planning, Tax Rulings ■Legal Entity Maintenance & Rationalisation Tax / Legal Function ■Alternative Locations ■Facility Management ■Lease Review ■Facilities Utilisation Real Estate / Facilities ■Workforce Optimization ■Training & Education ■Visa / Work Permits ■Salary Benchmarks ■Payroll ■Expat Packages ■HR Operations Human Resources

© 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. André Guedel Head International Market Development KPMG AG Badenerstrasse 172, 8026 Zürich T:+41 (0) M:+41 (0) André Guedel Head International Market Development KPMG AG Badenerstrasse 172, 8026 Zürich T:+41 (0) M:+41 (0) Herbert Sterchi Managing Partner Herbert Sterchi Consulting Zürichstrasse Luzern M:+41 (0) Herbert Sterchi Managing Partner Herbert Sterchi Consulting Zürichstrasse Luzern M:+41 (0) Thomas Linder Director International Corporate Tax KPMG AG Badenerstrasse 172, 8026 Zürich T: M:+41 (0)