Coloplast A/S
1 October 2021
– 30 September 2022
FIVE-YEAR FINANCIAL HIGHLIGHTS AND KEY RATIOS
A message from the Chairman
2
Five-year financial highlights and key ratios
Income
statement, DKK million
2021/22
2020/21
2019/20
2018/19
2017/18
Revenue
22,579
19,426
18,544
17,939
16,449
Research and development costs
-866
-755
-708
-692
-640
Operating profit before interest, tax, depr. and amort. (EBITDA)
7,369
6,947
6,705
5,807
5,716
Operating profit before interest, taxes and amortisation (EBITA) before special
items
7,170
6,484
6,013
5,707
5,248
Operating profit
(EBIT) before special items 6,910
6,355
5,854
5,556
5,091
Special items
-471
-200
- -400
-
Operating profit (EBIT)
6,439
6,155
5,854
5,156
5,091
Net financial income and expenses
-312
78
-388
-128
-82
Profit
before tax 6,127
6,233
5,466
5,028
5,009
Net profit for the year
4,706
4,825
4,197
3,873
3,845
Revenue growth
Annual growth in revenue, %
16
5
3
9
6
Growth breakdown:
Organic
growth, % 6
7
4
8
8
Currency effect, %
4
-2
-1
1
-4
Acquired operations, %
6
0
- 0
1
Other matters, %
- - - -
1
Balance sheet, DKK million
Total assets
34,956
15,841
13,499
12,732
11,769
Capital invested
27,679
11,576
9,864
8,748
8,468
Net interest
-bearing debt 18,091
2,112
1,162
539
754
Equity at year end
8,292
8,168
7,406
6,913
6,418
Cash flows and
investments, DKK million
Cash flows from operating activities
5,099
5,290
4,759
4,357
4,361
Cash flows from investing activities
-11,759
-2,011
-901
-591
-947
Investments in property, plant and equipment, gross
-927
-919
-846
-617
-616
Free cash flow
-6,660
3,279
3,858
3,766
3,414
Cash flows from financing activities
6,591
-3,176
-3,857
-3,714
-3,430
Key ratios
Average number of employees, FTEs
13,650
12,578
12,250
11,821
11,155
Operating margin (EBIT margin) before special items, %
31
33
32
31
31
Operating margin (EBIT margin), %
29
32
32
29
31
Operating margin before interest, tax, depr. and amort. (EBITDA margin), %
33
36
36
32
35
Gearing ratio, NIBD/EBITDA before special items
2.3
0.3
0.2
0.1
0.1
Return on average invested capital before tax (ROIC), %¹
⁾
35
58
59
62
57
Return on average invested capital after tax (ROIC), %¹
⁾
27
45
46
48
44
Return on equity, %
64
70
66
65
72
Equity ratio, %
24
52
55
54
55
Net asset value per outstanding share, DKK
39
38
35
33
30
Share data
Share price, DKK
776
1,007
1,004
825
657
Share
price/net asset value per share 20
26
29
25
22
Average number of outstanding shares, in million
213
213
213
212
212
PE, price/earnings ratio
35
44
51
45
36
Dividend per share, DKK²
⁾ 20.0
19.0
18.0
17.0
16.0
Payout
ratio, %³⁾ 84
81
91
86
88
Earnings per share (EPS), diluted
22.11
22.63
19.67
18.18
18.10
Free cash flow per share
-31
15
18
18
16
Key ratios have been calculated and applied in accordance with
the Recommendations and Financial Ratios issued by the Danish Society of Financial Analysts.
1
) This item is provided before special items. After special items, ROIC before tax was 33%/57%/61%/60%/62%, and ROIC after tax was
25
%/44%/47%/46%/47%. 2) The figure shown for the 2021/22 financial year is the proposed dividend. 3) For the 2021/22, 2020/21 and 2018/19 financial years,
this item is before
special items. After special items, the payout ratio is 90%/84%/93%.
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2021/22 IN BRIEF • 2022/23 OUTLOOK AND GUIDANCE
3
Table of contents
The Management’s Report
Five-year financial highlights and key ratios 2
Highlights 4
Chairman’s letter 4
CEO letter 6
At a glance 8
2021/22 in brief 10
2022/23 outlook and guidance 12
Our business 14
Mission and business model 14
Strive25 Strategy 16
Business areas; strategy, markets and performance 17
Ostomy Care 17
Continence Care 21
Voice and Respiratory Care 25
Wound and Skin Care 28
Interventional Urology 31
2021/22 Financial and non-financial performance 34
Financial results 34
Sustainability and people 38
Risk management 46
Risk management 46
Governance and Ownership 52
Corporate governance 52
The Board of Directors 56
The Executive Leadership Team 58
Shareholders and ownership 59
The Financial Statements
Consolidated financial statements 62
Statement of comprehensive income 62
Statement of cash flows 63
Assets 64
Equity and liabilities 65
Statement of changes in equity, current year 66
Statement of changes in equity, last year 67
List of notes 68
Notes 69
Statements 118
Statement by the Board of Directors and the Executive Management 118
Independent auditors’ report 119
Parent company financial statements 127
Additional information (part of Management’s Report)
Shareholder information 136
HIGHLIGHTS
A message from the Chairman
4
Dear shareholders,
The year 2022 will be remembered as
one of the most challenging years the
world has seen in decades. In addition to
the COVID-19 pandemic, soaring
inflation, disrupted supply chains and
rising interest rates have all challenged
the global economic outlook.
At Coloplast, we make life easier for
people with intimate healthcare needs.
This is our mission.
In this challenging year, the company
continued to outperform the market
and to make progress on the Strive25
strategy. We delivered another year
with a solid set of results.
My belief is that effective boardrooms
are built on a foundation of
collaboration, respect and trust. I also
place great emphasis on strong
collaboration between the Board and
the Executive Leadership Team.
This past year, the Board has engaged
extensively with management on
navigating inflation, COVID-19 in China
and the fallout from the war in Ukraine.
We have an ongoing dialogue on key
strategic topics, including innovation,
digitalisation, sustainability, culture,
M&A and successful execution in our
key focus markets – the US and China.
We must ensure that the decisions taken
today support Coloplast’s long-term
value creation for all stakeholders –
consumers, healthcare professionals,
employees, communities and
shareholders.
Let me now highlight two key
developments from 2021/22.
First, the acquisition of Atos Medical, a
company that is a strong fit for
Coloplast in all the parameters –
mission, strategy and financial
performance. Atos Medical is market
leader in the laryngectomy segment,
which in many ways resembles
Coloplast’s chronic care segments:
Ostomy Care and Continence Care –
their market leadership position,
innovative product portfolio, long-term
partnership with healthcare
professionals and a consumer focus.
Market penetration across geographies
is low, and the opportunity to expand
coverage to benefit many more patients
is significant. Atos Medical is a growth
option that supports Coloplast’s long-
term growth agenda and value creation.
The acquisition was financed with a
corporate bond, issued in May with
significant demand.
Second, Sustainability remains on top of
the Board’s agenda. I firmly believe that
sustainability is a key competitive
advantage, and we must ensure that
Coloplast stays ahead of the curve. At
Coloplast, we have always aspired to
act responsibly. As part of Strive25,
Sustainability has been elevated to an
enterprise theme, backed by significant
investments.
The climate crisis is one of the most
urgent issues of our time. We must act
now. At Coloplast, we are committed to
ambitious science-based climate action.
In June, our carbon emission reduction
targets were approved by the Science
Based Target initiative. This is
recognition that the targets across our
production and valuechain are
consistent with the reduction required to
keep global warming to 1.5˚C.
HIGHLIGHTS
A message from the Chairman
Despite the external challenges, the last couple of years confirmed
the resilience of Coloplast’s business model and our position as one of
the best performing medical device companies in the world.
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2021/22 IN BRIEF • 2022/23 OUTLOOK AND GUIDANCE
5
Inclusion and Diversity is another area
that I feel passionate about. In 2021/22,
we welcomed a new Board member,
Annette Brüls, who brings invaluable
executive management experience
from the global medical device industry.
I am pleased to say that we now have a
balanced gender distribution among the
shareholder-elected Board members.
Today, I am pleased to present our
Annual Report, Sustainability Report
and Remuneration Report. The Annual
Report looks back on another year with
negative impact from COVID-19,
especially in China as well as inflationary
pressure on input costs, a topic which
continues into next year. In spite of
these challenges, Coloplast once again
delivered solid performance and
earnings growth.
In conclusion, based on our company’s
financial performance in 2021/22, the
Board of Directors will propose a total
dividend of DKK 20.00 per share at the
Annual General Meeting in December
2022.
On behalf of the Board of Directors, I
would like to thank Coloplast’s
Executive Leadership Team for guiding
the organisation through this uncertain
environment.
A big thank you also goes to our
employees for their hard work and
dedication to the company and our
mission. The commitment shown by our
over 14,500 employees worldwide is
truly admirable.
I would also like to thank you, our
shareholders, for your continued trust
and support.
Despite the external challenges, the last
couple of years confirmed the resilience
of Coloplast’s business model and our
position as one of the best performing
medical device companies in the world.
We continue building the consumer
healthcare company of the future and
helping millions of people with intimate
healthcare needs.
Lars Rasmussen
Chairman of the Board of Directors
Proposed dividend per
share
is DKK 15.00 on
top of
a half-year
dividend of DKK 5.00
.
The Board of Directors recommends
that the shareholders attending the
general meeting approve a year
-end
dividend of DKK
15.00 per share. In
addition to a dividend of DKK 5.00 per
share paid out in connection with the
half
-year results in May 2022, which
b
rings the total dividend paid for the
year to DKK
20.00
per share, compared
with DKK 19.00 per share last year.
DIVIDEND PER SHARE (DKK)
*
Proposed dividend per share.
5,0 5,0 5,0
13,0
14,0
15,0*
2019/20 2020/21 2021/22
Interim udbytte Ordinært udbytte
HIGHLIGHTS
Our CEO’s view on the business
6
Dear shareholders,
At Coloplast, we work to make life
easier for people with intimate
healthcare needs. This year, we
continued to help more than two million
users. We also welcomed more than
250,000 new users to our patient
support programme, Coloplast® Care.
Yet, many more should have access to
better products, technologies and
services. This is what we fight for. As the
market leader, we build better
standards of care, open access for more
users and raise the bar with innovative
products. We are making progress, but
we also have more work to do.
This work supports our vision to build
the consumer healthcare company of
the future – a company that supports
patients directly and enables them to
take care of themselves at home. We
believe this is where healthcare needs to
go to effectively meet the demand from
a world ageing at an unprecedented
rate. The world needs healthcare
companies to enable self-care for
people with chronic conditions. This is
what we are building.
Atos Medical acquisition
A key highlight for me this past year is
the acquisition of Atos Medical, a
company that I have followed and
admired at a distance for their work on
setting the standard of care for
laryngectomy patients.
Coloplast and Atos Medical have many
similarities: We serve chronic users, we
are undisputed category leaders, and
we believe in a commercial model
centred on innovation, partnership with
healthcare professionals, and a direct-
to-consumer setup. We are also
companies that serve markets where
many more people should have access
to better products and support.
With an organic growth expected at
8%-10% and an EBITDA margin in the
mid-30s, the financial profile of Atos
Medical is highly attractive. The
acquisition is expected to be EPS
accretive starting 2022/23.
Ten months into the acquisition, I am
pleased to say that the attractiveness of
the acquisition is confirmed, and the
performance and integration are on
track. I am excited to continue the
growth journey of Atos Medical as part
of the Coloplast family and enable self-
care for people with a laryngectomy or
tracheostomy.
Solid 2021/22 results
Turning to the results for the year, we
delivered another solid set of numbers
with 6% organic growth, 31% EBIT
margin before special items, and 27%
return on invested capital after tax
(before special items). China, a key focus
market, continued to be negatively
impacted by COVID-19. Elsewhere,
growth is back, and the business
performed largely in line with the
Strive25 ambitions. The EBIT margin
was negatively impacted by inflationary
pressure on input costs, a normalisation
of our spend post-COVID, as well as
continued investments in innovation and
growth initiatives.
Strive25 – Sustainable Growth
Leadership
Let me share a few highlights from our
Strive25 strategy around innovation
and growth.
First, innovation. To address the key
challenges users face and raise the
standard of care, we continue the work
in Chronic Care and are making solid
progress on our Clinical Performance
Programme. Heylo™, the new digital
leakage platform in ostomy care, is in
pilot launches in the UK and Germany,
trialled by hundreds of users. Luja™, our
new catheter platform with micro-hole
zone technology, will be launched in the
second half of 2022/23.
In Wound Care, we have the strongest
portfolio to date, and solid momentum
in Europe.
In Interventional Urology, we are
strengthening the business through
organic innovation and inorganic
opportunities in attractive adjacent
segments.
Second, growth. As COVID-19 began to
release its grip on the healthcare
systems, we started to see a comeback
in growth across our businesses and
geographies. Once again, we grew
above the market and gained market
shares across all business areas.
In the US, our ostomy care business
delivered double-digit growth, on the
back of the GPO wins and sales force
expansion. In China, we maintain our
strong ostomy care market share across
channels despite the impact from
COVID-19. The long-term potential of
the Chinese market remains intact, and
we remain fully committed to the
market.
Our Strive25 strategy is supported by
key growth enablers – Efficiency, People
and Culture, and Sustainability.
We continue to strive for unparalleled
efficiency and industry leading margins.
Within our Global Operations Plan 5
(GOP5), the automation programme is
Our CEO’s view on the business
I am optimistic about our future. Coloplast is a long-term growth
company with industry
-leading profitability.
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2021/22 IN BRIEF • 2022/23 OUTLOOK AND GUIDANCE
7
largely on track to deliver FTE neutrality
in 2022/23, and our second volume
factory in Costa Rica opened this year.
We expect around 25% of the volumes
to be produced in Costa Rica in 2025,
providing a more robust and global
network. Despite the progress made,
our GOP5 is challenged by the
inflationary environment and significant
increases in raw material prices,
electricity prices and wages in Hungary.
Finally, we continue to see a positive
scale effect in our business support
organisation driven by further utilisation
of our Business Centre in Poland.
At the core of delivering on Strive25
are our people and culture. We have a
purpose driven organisation which has
engaged employees who are motivated
by helping our users. Despite a
challenging job market, I am happy to
say that the voluntary turnover level in
2021/22 was on par with last year.
I am also pleased to release this year’s
Sustainability Report together with the
Annual Report. In 2021/22, our carbon
emission reduction targets were
approved by the Science Based Target
initiative, a recognition of our efforts to
contribute towards solving the climate
crisis. I am happy that in 2021/22 we
increased our renewable energy use to
72%, from 67% last year, driven by the
installation of electric heating pumps at
our production sites in Hungary and
China. We also signed the first Power
Purchasing Agreement which secures
new green power for Coloplast’s
electricity consumption in Denmark.
Looking ahead
As we enter a new financial year, the
world is in a very different place from
where it was just a year ago and the list
of challenges is long: war in Europe,
inflation on the rise globally, a pandemic
still ongoing in parts of the world,
disrupted supply chains, and increasing
interest rates – to name just a few.
Coloplast is not immune to these
challenges. Inflationary pressure on
energy prices in Hungary and raw
material prices pose a headwind to our
margin outlook for 2022/23. Inflation is
challenging because we operate in an
industry where a large share of sales
comes from reimbursed categories,
limiting our ability to pass on the
inflationary pressure.
Despite the near-term challenges, I
remain fundamentally optimistic about
our future. Coloplast is a long-term
growth company with industry-leading
profitability. We remain one of the best-
performing medical device companies in
the world.
Across our business areas and
geographies, I see a lot of unmet user
needs and untapped market potential.
With our robust commercial model
focused on innovation, partnership with
healthcare professionals and direct-to-
consumer setup, we are well positioned
to continue the journey of building the
consumer healthcare company of the
future.
Finally, I would like to say thank you to
all my colleagues at Coloplast for their
continued commitment and hard work
in another challenging year. I would also
like to thank our customers and
investors for their confidence.
Kristian Villumsen
President & CEO
HIGHLIGHTS
Coloplast across regions and business areas
8
Coloplast across regions and business areas
Regions and business areas revenue
Coloplast Group
22.6 bn
Reported revenue in DKK
+6%
Organic growth at
constant exchange rates
Voice and
Respiratory Care
1.2 bn
Reported revenue in DKK
Continence
Care
7.6 bn
Reported revenue
in DKK
Wound and Skin
Care
2.7 bn
Reported revenue
in DKK
Interventional
Urology
2.4 bn
Reported revenue
in DKK
Ostomy
Care
8.6 bn
Reported revenue
in DKK
Heat- and Moisture Exchangers (HMEs),
Voice Prosthesis and adhesives
Intermittent catheters,
collecting devices
and bowel management
Advanced wound care
dressings, liquids and creams
to treat wounds and contract
manufacturing of consumer
products
Vaginal slings, penile implants and
disposable products for use in surgery
Ostomy bags, plates and
supporting products
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2021/22 IN BRIEF • 2022/23 OUTLOOK AND GUIDANCE
9
European markets
Western, Northern and
Southern Europe
Other developed
markets
USA, Canada, Japan,
Australia and New Zealand
Emerging markets
All other markets
12.9 bn
Reported revenue in DKK
+5%
Organic growth at constant
exchange rates
5.8 bn
Reported revenue in DKK
+6%
Organic growth at constant
exchange rates
3.9 bn
Reported revenue in DKK
+10%
Organic growth at constant
exchange rates
European markets
Other developed markets
Emerging markets
HIGHLIGHTS
2021/22 in brief
10
Organic growth was 6%, with all
business areas contributing to growth.
Ostomy Care was the main growth
contributor and grew 7% organically,
followed by Continence Care with 6%
organic growth. Interventional Urology
also made a solid contribution, growing
at 9%, while the wound and skin care
business grew 4% organically.
Revenue in DKK amounted to 22,579
million, which was a 16% increase from
19,426 million last year. Revenue from
acquisitions contributed 6%-points to
reported growth, as a result of the Atos
Medical acquisition in 2021/22.
EBIT before special items amounted to
DKK 6,910 million, a 9% increase from
DKK 6,355 million last year.
The increase in EBIT was a result of
increasing revenues, leverage effect on
operating expenses, and tailwind from
currencies, with an offsetting effect from
normalised commercial activity levels as
COVID-19 restrictions eased, and
continued investments in growth
initiatives. The EBIT margin also
included an impact from increasing
input costs and amortisations related to
the Atos Medical acquisition.
The EBIT margin after special items was
29%.
ROIC after tax before special items was
27% against 45% last year. ROIC was
negatively impacted in 2021/22 by the
acquisition of Atos Medical in January
2022, while 2020/21 was negatively
impacted by the acquisition of Nine
Continents Medical in November 2020.
REVENUE (DKK MILLION)
GROSS PROFIT AND EBIT (DKK MILLION)
DEVELOPMENT IN ROIC AFTER TAX
2021/22 in brief
22,579
19,426
2021/22 2020/21
15,529
13,313
6,910
6,355
2021/22 2020/21
Gross profit EBIT (before special items)
27%
45%
2021/22 2020/21
6%
Organic revenue
growth in 2021/22.
Growth was broad-
based
31%*
EBIT margin driven
by efficiency gains
and cost prudency
* Before special items
27%*
ROIC after tax
compared to 45%
last year
* Before special items
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2021/22 IN BRIEF • 2022/23 OUTLOOK AND GUIDANCE
11
Cash flows from operating activities
amounted to DKK 5,099 million, against
DKK 5,290 million last year. The
negative development in cash flows
from operating activities was mainly due
to changes in working capital and
financial items, partly offset by an
increase in operating profit (EBIT).
Cash flows from investing activities was
an outflow of DKK 11,759 million in
2021/22 compared with DKK 2,011
million last year mainly due to the
acquisition of Atos Medical.
The free cash flow was an outflow of
DKK -6,660 million compared to an
inflow of DKK 3,279 million last year,
which was impacted by the Atos
Medical acquisition.
CASH FLOW (DKK MILLION)
Highlights from our
sustainability
agenda
250,000
patients joined Coloplast® Care
in 2021/22
71%
production waste is recycled,
improved from 58% in 2020/21
8%
scope 1 and 2 emissions
reduced since the base year 2018/19
Please go to
page 38 to read more
about sustainability
in Coloplast.
Download our
Sustainability report
https://sustainability.coloplast.com/sustainabi
lity/reporting/reports/
5,099
5,290
-6,660
3,279
2021/22 2020/21
Operating cash flow Free cash flow
-6,660 m
Free cash flow in
DKK impacted by
investments and
acquisitions
HIGHLIGHTS
2022/23 outlook and guidance
12
Long-term financial
guidance
The long-term financial guidance for the
Strive25 strategy period running until
end 2024/25 is the following:
7-9%
Organic growth p.a.
above 30%
EBIT margin at constant
exchange rates
Dividend policy
The Board of Directors intends to
distribute excess liquidity to the
shareholders through dividends and
share buybacks. The target payout ratio
is 60-80% of net profit.
Key assumptions
The impact of current macroeconomic
trends and global events, especially
input costs development and COVID-19
in China, is continuously monitored and
evaluated on a short- and medium-term
basis. The financial guidance is subject
to a higher degree of uncertainty due to
the changing environment.
The addressable market in which
Coloplast operates is expected to
continue growing at 4-5% and includes
negative impact from COVID-19 in
China.
Revenue growth
Organic growth is expected at 7-8% in
constant currencies and assumes:
a) Limited impact from COVID-19 on
hospital activity across markets,
except for China
b) The Chronic Care business
excluding China is expected to
grow largely in line with the
Strive25 ambitions. The
assumptions by region include:
• Continued good momentum in
Europe
• US – sustained good momentum in
Ostomy Care and improvement in
growth in Continence Care
• Emerging markets – broad-based
double-digit growth excluding China.
• China is expected to remain
impacted by COVID-19 restrictions,
impacting hospital access and
procedural volumes and consumer
sentiment
c) Wound and Skin Care is expected to
deliver growth above the market in
line with the Strive25 ambitions.
China is expected to remain
impacted by COVID-19 restrictions,
impacting hospital access and
procedural volumes
d) Interventional Urology is expected
to deliver high single-digit growth in
line with the Strive25 ambitions
e) Voice and Respiratory Care is
expected to grow at 8-10%, with 8
months impact on organic growth
f) Revenue exposure to Russia and
Ukraine is expected to be on par
with 2021/22 i.e., around 1% of
group revenues with a flat growth
rate in FY 2022/23.
g) No current knowledge of significant
health care reforms; positive pricing
impact is expected
h) A stable supply and distribution of
products across the company;
impact from backorders in Collecting
Devices and Wound Care expected
to persist into first half of 2022/23.
Reported growth in DKK is expected at
11-12%, due to favourable FX
movements, expected around 1%-point,
and impact from the Atos Medical
acquisition, expected around 3%-points
(4 months impact).
The expectation of long-term price
pressure of up to 1% annually is
unchanged.
EBIT margin
The EBIT margin is expected at 28-
30%, and assumes:
a) Leverage effect on fixed costs and
continued efficiency improvements
through Global Operations Plan 5
b) An increase in input costs, driven
mostly by:
• Raw materials – double-digit price
increase
• Energy – doubling of electricity costs
compared to 2021/22
• Wages in Hungary – double-digit
increase
Outlook and financial guidance
2022/23 outlook and guidance
Our guidance
for 2022/23
7-8%
Organic revenue growth at
constant exchange rates
28-30%
Reported EBIT margin
Around 1.4 bn
Capital expenditure in DKK
Around 21%
Effective tax rate
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2021/22 IN BRIEF • 2022/23 OUTLOOK AND GUIDANCE
13
c) Prudent management of operating
costs, expected to grow below
reported revenue in DKK (excluding
acquired growth)
d) Full year impact of around DKK 230
million of amortisation related to
the Atos Medical acquisition
Capex
Capex is expected to be around DKK
1.4 billion and includes investments in
automation at volume sites in Hungary
and China as part of GOP5, investments
in new machines for existing and new
products, IT and sustainability
investments, as well as Atos Medical
capex and integration capex.
Effective tax rate
The effective tax rate is expected to be
around 21%, positively impacted by the
transfer of Atos Medical IP.
Other assumptions
The provision made to cover costs
relating to transvaginal surgical mesh
products remains subject to a degree of
estimation.
Atos Medical financial assumptions
The key financial assumptions for Atos
Medical during the Strive25 strategy
period are summarized below:
a) Organic growth is expected to be 8-
10%, with an EBITDA margin in the
mid-30s level
b) The transaction is expected to be
increasingly EPS accretive from FY
2022/23. Estimated run-rate
operational synergies of up to DKK
100 million from utilising Coloplast
infrastructure, with full impact
estimated from FY 2023/24
c) Capex integration costs of up to
DKK 150 million split over 2021/22-
2023/24, of which the vast majority
will be IT capex
d) The acquisition is structured as a
100% cash payment financed
through debt financing
e) The blended interest rate for the
debt financing package is expected
around 1.95% in FY 2022/23
f) Around 75% of the purchase value
will be treated as goodwill, and the
remaining 25% as intangibles, to be
amortised over approximately 15
years
g) Around DKK 50 million integration
cost in FY 2022/23, to be treated
as special items as expected
Forward-looking
statements
The forward-looking statements in this
announcement, including revenue and
earnings guidance, do not constitute a
guarantee of future results and are
subject to risk, uncertainty and
assumptions, the consequences of
which are difficult to predict.
The forward-looking statements are
based on our current expectations,
estimates and assumptions and are
provided on the basis of information
available to us at the present time.
Major fluctuations in the exchange rates
of key currencies, significant changes in
the healthcare sector or major
developments in the global economy
may impact our ability to achieve the
defined long-term targets and meet our
guidance. This may impact our
company’s financial results.
Exchange rate exposure
Our financial guidance for the 2022/23
financial year has been prepared on the
basis of the following assumptions for
the company’s principal currencies:
Overview of exchange rates for key
currencies against DKK
GBP
USD
HUF
Average exchange
rate 2020/21
852
622
2.08
Average exchange
rate 2021/22
878
688
1.97
Change in average
exchange rates for
2021/22 versus
2020/21
3% 11% -5%
Spot rate on
4 November 2022
854
762
1.83
Change in spot
rates compared
with average
exchange rate
2021/22
-3% 11% -7%
Revenue is particularly exposed to
developments in USD and GBP relative
to DKK. Fluctuations in HUF against
DKK impact the operating profit
because a substantial part of our
production, and thus of our costs, are in
Hungary, whereas our sales there are
moderate.
Effect over 12 months of a 10% initial
drop in exchange rates for key currencies
(DKK million)
Revenue
EBIT
USD
-490
-220
GBP
-320
-220
HUF
- 130
OUR BUSINESS
Mission and business model
14
Mission
Coloplast’s mission is to make life easier
for people living with intimate
healthcare needs. This has been at the
very core since the company’s
beginnings more than 65 years ago.
This year, we again helped more than
2 million chronic users in 140 countries.
There are many more who should have
access to better products, services, and
new technologies. We are committed to
continue building healthcare standards
and ensure more users get proper
access to the products they need to live
a better life.
Business model
Healthcare globally is changing and
experiencing demographic pressure,
more demanding consumers, digital
transformation, price pressure and
channel consolidation. Healthcare
systems need to adapt to these trends
and meet the increase in demand in a
cost-effective way.
At Coloplast, we are building a company
that can take an active role in the care
continuum and ensuring users can get
treated at home and enable self-care.
In short – we are building the consumer
healthcare company of the future.
Our model is defined around the patient
and has five elements. First, clinically
differentiated products are a must.
Here, we aim to raise the bar with our
Clinical Performance Programme in
Chronic Care and product launches
within existing categories across
business areas. Next, building clinical
preference and partnering with
healthcare professionals, which we
achieve through our Coloplast®
Professional programme, educational
events and advisory boards. We have
built a direct-to-consumer channel and
a strong patient support programme,
Coloplast® Care, adapted to more than
30 markets. Finally, building payer
preference by documenting the value
we create with data.
OUR BUSINESS
Mission and business model
Mission and business model
MISSION AND BUSINESS MODEL • STRIVE25 STRATEGY
15
In September 2020, we announced our
Strive25 – Sustainable Growth
Leadership strategy, covering the period
ending in 2025.
‘Sustainable’ because it sends an
important signal. Sustainability is an
important enterprise theme.
'Growth' because we want Coloplast to
continue to be an innovative growth
company.
1)
Constant currencies, based on FX rates as
of 29 September 2020.
‘Leadership' because we aspire to lead
our categories and also because we aim
to evolve the way we lead.
Our strategy has four enterprise-wide
themes: Innovation, Unparalleled
efficiency, Sustainability and Talent,
Leadership & Culture. These four
themes are enablers of the revenue
growth and value creation that our
business areas deliver.
We continue to focus on value creation
and our ambition with the Strive25
strategy is to continue to deliver 7-9%
organic growth year-on-year with an
EBIT margin above 30%.
1)
During the strategy period, we will
continue to invest up to 2% of annual
revenue in incremental innovation and
commercial activities to drive our
growth and value creation agenda.
Sustainable Growth Leadership
OUR BUSINESS
Strive25 Strategy
16
We will pursue market leading growth
across all our business areas with a
common theme of innovation and a
geographical emphasis on the US and
China. The strategy will allow us to help
even more users living with intimate
healthcare needs.
To create long-term growth options
beyond the strategy period, M&A will
also play a bigger role during Strive25.
With the acquisition of Atos Medical in
2021/22, Coloplast added a new long-
term growth option in a category with
significant untapped market potential.
Innovation
Innovation is a core driver of organic
growth. We aim to enable personalised
care through an ecosystem of
innovation which comprises core
products, extended solutions and
services. We will continue to invest
around 4% of sales in R&D across all
business areas.
The most important initiative in this
strategy period is to deliver our Clinical
Performance Programme in Chronic
Care, and to launch clinically
differentiated products backed by
clinical evidence. The first two products
from the Programme, the new catheter
platform Luja™ and the world’s first
digital leakage platform in ostomy care
Heylo™ will launch in 2023.
We also continue to deliver new
products across all business areas within
existing technologies. A recent example
is SpeediCath® Flex Set, a flexible
catheter with a set solution.
Besides organic innovation, we will use
business development and M&A to build
more options in the pipeline, such as the
Intibia device for over-active bladder
treatment in Interventional Urology.
Unparalleled efficiency
The first area of efficiency work is our
Global Operations Plan 5 (GOP5). Since
2008, Global Operations have delivered
significant value through Global
Operations Plans. GOP5 is different
from previous plans since the
benefits from further offshoring of
manufacturing are limited.
In addition, external factors like wage
inflation and labour shortages in
Hungary, and more recently in 2022
inflationary pressure on raw materials,
freight and energy prices, put pressure
on the overall financial performance.
To deliver a strong platform for
supporting sustainable growth, GOP5
focuses on five themes: commercial
collaboration, automation, seamless
supply, network and footprint as well as
a simple and cost-efficient culture.
Automation at our volume sites in
Hungary and China is a key theme. We
are making solid progress towards being
headcount neutral at our manufacturing
sites by the end of 2022/23, with a net
impact of around 1,000 FTEs.
As part of the network and footprint
theme, Coloplast has expanded the
production footprint in Costa Rica. The
two factories in Costa Rica support a
wider geographical spread of risk and a
more robust set up. Around 25% of
volumes are expected to be produced in
Costa Rica by 2024/25.
We also expect continued positive scale
effect in our business support
organisation driven by further utilisation
of our Coloplast Business Centre and
investments in IT.
Sustainability
With Strive25, sustainability was
integrated into our strategy and
elevated to an enterprise theme. We are
supporting sustainable development
with an emphasis on improving
environmental performance and
investments of up to DKK 250 million
during the strategy period. Our priorities
for sustainability are improving products
and packaging and reducing emissions.
As part of the sustainability agenda, we
will also continue to work on priorities
within the theme ‘Responsible
Operations’, which covers a multitude of
topics, such as creating access to
healthcare for more users, employee
satisfaction, safety and health, gender
representation in management,
inclusion and diversity, business ethics,
as well as product safety and quality.
Talent, leadership and
culture
Coloplast is a global employer with a
strong purpose driven culture. We have
a strong start on employee engagement
and talent promotion that we strive to
maintain. The People and Culture
agenda is centred on three themes:
evolving how we lead, talent for the
future as well as inclusion and diversity.
Strive25 Strategy
OUR BUSINESS
Ostomy Care
17
Underlying conditions and users
A stoma is created by way of surgery in
case of intestinal dysfunction due to a
disease, accident or congenital
disorder. A part of the intestine is
surgically redirected through an opening
in the abdominal wall, allowing faeces to
be diverted out of the body through the
abdomen. People with a stoma use an
ostomy bag, which adheres to the
peristomal skin and collects the output
from the stoma. Supporting products
are used in combination with an ostomy
bag, to ensure a good fit as well as care
for the peristomal skin.
A stoma surgery can be performed on
the colon (colostomy), small intestine
(ileostomy) or urinary bladder
(urostomy). An estimated half of the
procedures are colostomies, typically
caused by cancer, an estimated third
are ileostomies, typically caused by
inflammatory bowel diseases (IBD), and
the remaining procedures are
urostomies, caused by bladder cancer.
An ostomy surgery can be permanent
or temporary, with the majority of
surgeries being permanent. Over the
past decade, medical advances have led
to an increase in the incidence of
temporary stomas, i.e. when ostomy
products are only needed for a limited
period of time.
Between 2 and 3 million people live with
a stoma worldwide, and around three-
quarters of those are in the developed
markets. Each year up to around
300,000 people undergo a stoma
surgery in the developed markets and
China combined.
A chronic category
The ostomy care business is referred to
as Chronic Care because in most cases
the products are used to manage
chronic conditions. On average, people
with a stoma use stoma pouches for
about 10 years.
Another characteristic of the chronic
category is that more than 90% of
product sales are reimbursed. One
exception is China, where products
usage outside of hospital is largely out
of pocket.
Less than 10% of product sales are
made through a hospital or clinical
setting, which leaves most of the sales in
the community, after users have been
discharged from a hospital or clinic.
Users tend to be very loyal to the
products, and in most cases continue
using the same product they have been
discharged on from the hospital or clinic.
Therefore, the choice of product and
sales through a hospital or clinical
setting is essential for Coloplast.
Ostomy Care products
Ostomy bags consist either of an
adhesive base plate bonded together
with a bag (1-piece system) or of two
separate parts in which the bag is
replaced more often than the base plate
(2-piece system). It is important for
users to avoid leakage and skin
irritation, so they can live as normal a
life as possible. As a result, the adhesive
must ensure a constant and secure seal,
and it must be easy to remove without
causing damage or irritation to the skin.
To ensure a personalised fit, users also
turn to supporting products.
Coloplasts portfolio of ostomy care
products spans the full range from bags
and baseplates to supporting products.
The approach has been to launch a new
product portfolio every 8-10 years.
Today, the portfolio consists of the
brands Alterna®, Assura®, SenSura®,
SenSura® Mio and Brava®.
Consumer focus
Over the past several years, Coloplast
has invested in building stronger ties
with end users and embarked on a
journey of becoming a consumer
healthcare company, offering not only
the most innovative products, but also
supporting services to users through the
Coloplast® Care programme. The
programme provides knowledge and
support around living life with a stoma.
Coloplast maintains a database of
around two million users across business
areas and offers direct support to end
users in more than 30 countries. More
than 250,000 new users were
welcomed to the programme in the
financial year 2021/22.
In 2021/22 Coloplast launched
MyOstomy – a new consumer
companion app, designed to support
users in managing life with a stoma.
Coloplast also sells products directly to
end users in its top five markets – the
US, the UK, France, Germany and
China, ensuring end users have access
to the most innovative products in the
market and providing a high level of
service.
Ostomy Care
BUSINESS AREA
Ostomy Care
OUR BUSINESS
Ostomy Care
18
Strive25: Sustaining
growth leadership
Our ambition for the Ostomy Care
business is to continue to deliver strong
growth above the market. It all starts
with innovation which is our first priority.
As a market leader, we are fully
committed to drive and improve
standards of care through better
technologies, product categories,
services and training.
Heylo™, the world’s first digital leakage
platform, is an example of an innovative,
first of its kind technology, to be
launched in 2023.
Turning to the focus areas by
geography, one of the biggest
opportunities in Ostomy Care is the US
market, where we have around a 15%
market share. The strategy is to win
across the patient pathway in the US.
We now have access to around 75% of
the acute channel, through the two
biggest Group Purchasing
Organisations, Vizient and Premier, and
we are in a better position than ever to
execute on the strategy.
Another priority is building on our
market leading position in China. At the
core, we aim to sustain growth above
the market in Ostomy Care. Beyond
COVID-19, China is expected to
constitute a significant share of our
global Ostomy Care growth.
To maintain above market growth, we
will continue to drive a value upgrade
and expand the consumer business with
China-specific digital solutions.
Beyond China, our stance on Emerging
Markets is to focus on the large core
markets, improve the standard of care
and build on our e-commerce business.
Market access is key to establishing our
categories in new markets and
improving funding in existing markets.
The ambition for Emerging Markets is to
deliver double-digit growth.
In Europe, we aim to sustain our
leadership position and continue to
deliver above market growth. We will
continue our current path of driving
growth by leveraging our innovation
and services as well as through our
direct businesses. We still see many
pockets of growth in Europe.
Across markets, we continue to
leverage our patient support
programme, Coloplast® Care, and our
direct businesses and digital solutions to
provide support and services to users
once they are released from the
hospital.
Heylo, the world’s first digital leakage
platform
Key strategic
highlights 2021/22
During the year, Coloplast made
significant progress on the digital
leakage platform. Heylo, is in a pilot
launch in Germany and the UK. The
clinical studies needed to create
reimbursement are in progress in both
markets. The product is expected to
launch in 2023.
Coloplast has decided to refocus R&D
efforts and reallocate resources from
the development of the new ostomy
care platform with skin protective
technology to other promising
platforms, such as Heylo, which has
demonstrated great results in our pilot
studies, as well as other ongoing
projects within Ostomy Care. This
decision is a result of a recently
published guidance on Medical Device
Regulation on borderline between
medical devices and medicinal products,
which classifies the new skin protective
technology as a class III device. This
would require incremental investment
and time, which impacts the business
case and is not in-line with Coloplast’s
overall regulatory strategy for Ostomy
Care.
The US ostomy care business delivered
a solid year on the back of the GPO
wins and sales force expansion.
During the year, we also continued
investments in key markets and focus
areas, such as the US and digital
offering.
Ostomy Care
Ostomy Care
BUSINESS AREA
OSTOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
19
Market description
In 2021/22, the global market for
ostomy care products was worth an
estimated DKK 20-21 billion. The bags
and plates category comprised around
85% of the market, with the remaining
15% in the supporting products
category.
The market size is primarily impacted by
the prevalence of colorectal and
bladder cancer and inflammatory bowel
diseases. Another significant driver is the
availability of reimbursement for ostomy
products across different geographies.
The ostomy market is a chronic market,
with the majority of product usage
happening in community, i.e. after users
have been discharged from hospital.
Market growth
The annual market growth is estimated
at 4–5%.
Market volume growth is driven by the
ageing Western population, increased
cancer screening, and expanded access
to healthcare in emerging markets.
Another volume growth driver is
compliance and usage rates across
markets. The increase in the incidence
of temporary stomas over the past
decade has had a negative impact on
volume growth.
Price and mix also have an impact on
market growth. As markets mature,
there is an increased demand for more
advanced product categories, as well as
an increased usage of supporting
products. Historically, healthcare
reforms have led to negative price
pressure, but no significant healthcare
reforms were implemented during
2021/22.
Except for China, growth in new
patients was largely normalised at pre-
COVID levels across all regions in
2021/22. In China, the COVID-19
related restrictions have led to a decline
in procedural volumes and lower growth
in new patients. The Chinese market has
also been impacted by a lower average
value per patient due to the increased
economic uncertainty and weaker
consumer sentiment.
The impact from COVID-19 on the
Chinese ostomy market is expected to
be temporary. The underlying dynamics
and growth drivers of the Chinese
ostomy market are not expected to
change beyond the pandemic.
Market shares
Coloplast is the global market leader in
ostomy care with a market share of
35%-40%.
In addition to Coloplast, there are two
larger global manufacturers in the
ostomy market as well as a few local
manufacturers, especially within the UK.
Regional market shares
40%-50%
Share of European markets
15
%-25%
Share of Other developed
markets
45
%-55%
Share of Emerging markets
Supporting products market
The market for ostomy supporting
products is estimated at DKK 3-4 billion
with an estimated annual segment
growth of 6%-8%.
Coloplast also has a market leading
position within this segment, with a
market share of 35%–40%.
Ostomy care market
20-21 bn
Market size
globally in DKK
4%-5%
Market growth
annually
35%-40%
Market share
globally
#1
Market position
globally
European markets
Other developed markets
Emerging markets
Source:
Coloplast
Global market
by region
OUR BUSINESS
Ostomy Care
20
Ostomy Care generated 7% organic
sales growth for the 2021/22 financial
year, with reported revenue in DKK
growing by 10% to DKK 8,620 million.
The SenSura® Mio portfolio and the
Brava® range of supporting products
continued to be the main drivers of
revenue growth. At the product level,
SenSura Mio Convex was the main
contributor to growth driven by Europe,
especially the UK and Germany, as well
as the US. SenSura Mio Concave also
contributed to growth, driven mostly by
Europe.
The SenSura and Assura/Alterna®
portfolios continued to contribute to
growth in the Emerging markets region,
where they are being actively promoted,
most notably LATAM. Sales of the
Brava range of supporting products
continued to contribute to growth,
driven by Europe, especially the UK and
France, the US as well as broad-based
growth in the Emerging markets region.
From a geographical perspective,
Europe was the main contributor to
growth, led by the UK. The US delivered
a strong year and contributed nicely to
growth. Emerging markets excluding
China also made a solid contribution to
growth, driven by LATAM.
In China, COVID-19 restrictions
hampered growth and led to lower level
of procedural volumes and sales in the
hospital channel. The average value per
patient remained below pre-COVID
levels, due to economic uncertainty
which continued to impact consumer
sentiment.
Outside of China, growth in new patients
during the year was largely normalised
at pre-COVID levels.
Ostomy care performance
BUSINESS AREA
8.6 bn
Reported revenue
in DKK for 2021/22
7%
Organic growth
at constant
exchange rates
10%
Reported growth
in DKK
Reported revenue included a
positive effect from FX rates.
European markets
Other developed markets
Emerging markets
56%
18%
26%
21/22
geographical
revenue split
OSTOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
21
Underlying conditions and users
The continence care business area
addresses two types of continence
control issues: people unable to empty
their bladder or bowel and people
suffering from urinary or faecal
incontinence.
People unable to empty their bladder
can use an intermittent catheter, which
is inserted through the urethra of the
urinary tract to empty the bladder. One
of the main groups of users of
intermittent catheters are people with a
spinal cord injury. Other user groups are
people with multiple sclerosis and
people with congenital spina bifida, as
well as men with benign prostatic
hyperplasia.
Urinary incontinence means that a
person has lost the ability to hold urine,
resulting in uncontrolled or involuntary
release, which is also called stress
urinary incontinence. Incontinence
affects older people more often than
younger people because the sphincter
muscle and the pelvic muscles gradually
weaken as people grow older.
In bowel management, users have lost
the ability to control bowel movements.
A typical user is a person with a spinal
cord injury.
A chronic category
The continence care business, similar to
the ostomy care business, is referred to
as Chronic Care because in most cases
the products are used to manage
chronic conditions. On average, users of
intermittent catheters with a chronic
condition use catheters for about 30
years.
Another characteristic of the chronic
category is that more than 90% of
product sales are reimbursed.
Less than 10% of product sales are
made through a hospital or clinical
setting, which leaves most of the sales in
the community, after users have been
discharged from a hospital or clinic.
Users tend to be very loyal to the
products once they have a good
routine, and in most cases continue
using the same product they have been
given when discharging from the
hospital or clinic. Therefore, the choice
of product and sales through a hospital
or clinical setting is essential for
Coloplast, and so is the personalised
support through our patient support
programme Coloplast® Care.
Continence Care products
Coloplasts portfolio of intermittent
catheters, spans the full range from
uncoated catheters to discreet,
compact and ready to use catheters,
coated in a saline solution. The portfolio
consists of the brands SelfCath® and
SpeediCath®.
Within Collecting Devices, Coloplast has
a wide range of urine bags and
urisheaths for capturing and storing
urine. This is a segment with many
suppliers, including low-cost providers.
In Bowel Management, Coloplast offers
the Peristeen® anal irrigation system for
controlled emptying of the bowels.
Consumer focus
Over the past several years, Coloplast
has invested in building stronger ties
with end users and embarked on a
journey of becoming a consumer
healthcare company, offering not only
the most innovative products, but also
supporting services to users through
Coloplast Care. The programme
provides knowledge and support around
living life with incontinence.
Coloplast maintains a database of
around two million users across business
areas and offers direct support to end
users in more than 30 countries. More
than 250,000 new users were
welcomed to the programme in
2021/22.
Coloplast also sells products directly to
end users in it’s the top five markets –
the US, the UK, France, Germany and
China, ensuring that end users have
access to the most innovative products
in the market along with good service.
Continence Care
OUR BUSINESS
Continence Care
22
Strive25: Sustaining
growth leadership
Our ambition for the Continence Care
business is to continue to deliver strong
growth above the market. Like Ostomy
Care, the first priority is innovation and
bringing clinically differentiated products
to the market.
As the market leader, we are fully
committed to driving and improving
standards of care through better
technologies, product categories and
training. An example of this is our new
catheter platform, Luja™, with a new
micro-hole zone technology, which is
expected to be launched in 2023.
From a geographical perspective, a key
focus market is the US, where we have
around a 30% market share. The
strategy in the US is to upgrade the
market to hydrophilic, ready-to-use
intermittent catheters, and we do this
through product innovation and
partnership with healthcare
professionals to enable better patient
outcomes.
In Europe, we aim to sustain our
leadership position and continue to
deliver above market growth. We will
continue our current path of driving
growth through market development
initiatives aimed at treatment
penetration and compliance as well as
through our direct businesses. We still
see many pockets of growth in Europe.
In Emerging Markets, we focus on
establishing our categories in new
markets and improving funding in
existing markets. Today, across most
Emerging Markets, the level of
penetration of Intermittent Catheters,
and especially hydrophilic catheters, is
very low, due to a lack of clinical
awareness and a lack of
reimbursement. Market access work on
improving clinical standards and
securing reimbursement is key to driving
growth.
The ambition for Emerging Markets is to
deliver double-digit growth.
Across markets, we continue to
leverage our patient support
programme, Coloplast® Care, and our
direct businesses and digital solutions to
provide support and services to users
once they are released from the
hospital.
SpeediCath® Flex Set, a flexible
catheter with a set solution
Key strategic
highlights 2021/22
During the year, Coloplast made solid
progress on the new catheter platform,
Luja™, part of the Clinical Performance
Programme. The pivotal studies are on
track, and the launch of the product is
expected in the second half of 2022/23.
Outside of the Clinical Performance
Programme, Coloplast continues to
launch products within existing
categories. During 2022, Coloplast
launched SpeediCath® Flex Set,
expanding the flexible catheters
portfolio with a set solution.
During the year, we also continued
investments in key markets and focus
areas, such as market development and
digital offering.
Continence Care
BUSINESS AREA
Continence Care
OSTOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
23
Market description
In 2021/22, the global market for
continence care products was worth an
estimated DKK 15–16 billion.
The intermittent catheters category
comprised around 80% of the
continence market, with the remaining
20% in the collecting devices category.
The market size is primarily influenced
by the number of people suffering from
spinal cord injuries, multiple sclerosis
(MS), benign prostatic hyperplasia
(BPH), and people born with congenital
spina bifida. Another driver is the
availability of reimbursement for
continence care products across
markets. The continence market is a
chronic market, and the majority of
product usage happens in the
community, i.e. after users have been
discharged from the hospital.
Market growth
The annual market growth is estimated
at 5%–6%.
The fastest growing segment is
intermittent catheters. Growth in this
segment is driven by the increasing
treatment penetration of intermittent
catheters as an alternative to
permanent or indwelling catheters. The
underlying volume growth is driven by
the number of spinal cord injured
patients, the ageing Western population
and increasing access to healthcare in
emerging markets. Another volume
growth driver is compliance and usage
rates across developed markets.
Price and mix also have an impact on
market growth. As markets mature,
there is an increased demand for more
advanced product categories.
Historically, healthcare reforms have led
to negative price pressure, but no
significant healthcare reforms were
implemented during 2021/22.
Growth in new patients was largely
normalised at the pre-COVID levels
across all regions throughout 2021/22,
except for the US. In the US, the growth
in new patients was lower in the first
half of the year, due to the negative
impact from COVID-19. Growth in new
patients in the US normalised to pre-
COVID levels in the second half of the
year.
The impact from the lower growth in
new patients in the US on the
continence care market was temporary,
and the underlying dynamics and
growth drivers of the continence care
market are not expected to change
beyond the pandemic.
Market shares
Coloplast is the global market leader in
continence care, with a market share of
40%–45%. The continence care market
is characterised by four larger global
manufacturers, including Coloplast.
There are also a number of local and
low-priced manufacturers.
Regional market shares
45%-55%
Share of European markets
25
%-35%
Share of Other developed markets
40
%-50%
Share of Emerging markets
Continence care market
15-16 bn
Market size
globally in DKK
5%-6%
Market growth
annually
40%-45%
Market share
globally
#1
Market position
globally
European markets
Other developed markets
Emerging markets
Source: Coloplast
Global market
by region
OUR BUSINESS
Continence Care
24
Continence Care generated 6% organic
sales growth for the 2021/22 financial
year, with reported revenue in DKK
growing by 9% to DKK 7,643 million.
The SpeediCath® intermittent catheters
were the main drivers of revenue
growth. Sales growth in the SpeediCath
portfolio was driven by compact
catheters, standard catheters, and
flexible catheters, all of which are ready-
to-use hydrophilic coated catheters. The
growth in flexible catheters and
compact catheters was mainly driven by
Europe, in particular France, the UK and
Germany, as well as the US. SpeediCath
Navi, a hydrophilic catheter specifically
designed for emerging markets and
lower priced developed markets, also
contributed nicely to growth.
Sales growth was driven by the
SpeediCath portfolio, and more
specifically compact, flexible and
standard catheters. SpeediCath Flex
Set, a flexible hydrophilic catheter with a
new integrated sterile bag, has been
launched in seven markets. The product
is performing well and contributed to
the growth in the SpeediCath portfolio.
The Bowel Management business made
a solid contribution to growth, driven by
Peristeen® in Europe and the US.
Peristeen Plus, the newest addition to
the Bowel Management portfolio, has
been well-received and is on track to
replace Peristeen as the standard of
care in the 19 markets, where the
product has been launched.
Collecting Devices had a negative
impact on growth, due to backorders on
Conveen® urisheaths. The backorder
situation emerged due to shortages
experienced by raw material suppliers.
From a geographical perspective, sales
growth was driven by Europe, in
particular the UK, as well as the US and
LATAM. Markets with recent
reimbursement openings, such as
Poland, Australia, Japan and South
Korea, delivered double-digit growth.
In the US, growth in the first half of
2021/22 was negatively impacted by
lower growth in new patients, due to
COVID-19. During the second half,
growth in new patients normalised at
the pre-COVID levels.
Elsewhere, growth in new patients
during the year was largely normalised
at the pre-COVID levels.
Continence care performance
BUSINESS AREA
7.6 bn
Reported revenue
in DKK for 2021/22
6%
Organic growth
at constant
exchange rates
9%
Reported growth
in DKK
Reported revenue included a
positive effect from FX rates.
European markets
Other developed markets
Emerging markets
65%
25%
10%
21/22
geographical
revenue split
STOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
25
Voice and Respiratory Care is our new
business area, added through the
acquisition of Atos Medical. The
business is expected to grow between
8%-10% organically p.a., with an
EBITDA margin in the mid-30s and
deliver cost synergies up to DKK 100
million in 2024/25.
The business area consists of
laryngectomy, representing around two-
thirds and tracheostomy, the remaining
one-third. Laryngectomy is expected to
grow at a high-single to double-digit
rate, and tracheostomy is expected to
grow at a mid-single digit rate. Around
half of the sales in laryngectomy are
direct to consumers.
Laryngectomy market
A total laryngectomy is a procedure in
which the larynx (voice box), is removed.
With the removal, the patient loses the
ability to produce voice and depends on
a Voice Prosthesis (VP) to speak. The
procedure also leads to a loss of the
upper airway functions. The patient is
required to breathe through a stoma in
the throat and relies on Heat- and
Moisture Exchangers (HMEs) for
humidification and filtration of the air.
A total laryngectomy is an irreversible
procedure, and patients need to
manage a chronic condition. People use
the products for an average of 8-10
years. After surgery, a VP is inserted by
a healthcare professional. The patients
apply the HMEs themselves daily, with
an adhesive to keep the HMEs in place.
The recommended change frequency is
3-4 VPs per year, 2-3 HMEs per day
and 1-2 adhesives per day.
Strategic focus: Eliminate white space
In laryngectomy, our strategy revolves
around addressing the large unserved
patient population in existing and new
markets. We refer to this as a ‘white
space’ opportunity. Coloplast is seeking
to eliminate the white space, by
increasing treatment penetration and
compliance in existing markets, while
opening and developing new markets.
To increase penetration in existing
markets, we strive to set the clinical
standards and drive market access.
To ensure better user experience and
compliance with the recommended
change frequency, a new product
portfolio, Provox® Life, has been
introduced, providing products for
situational use. The direct to consumer
model is uniquely tailored to help drive
better compliance.
Outside of the existing markets, we are
working on obtaining reimbursement in
new markets, with recent successes in
South Korea, Brazil and Japan.
A key opportunity is China, where
around a fifth of the total global
laryngectomy procedures take place.
Today, there are no products in China,
and the treatment is not established.
First step towards building the market is
to register the product portfolio. In
2022, the HMEs and adhesives were
registered, and the VPs registration is in
progress. Once the full product portfolio
has been registered, we will continue
with market access work to establish
treatment standards and ensure we
reach as many patients as possible.
Provox® Life HMEs
Tracheostomy market
A tracheostomy is a procedure in which
an opening is created in the throat to
facilitate breathing.
A tracheostomy is an invasive, last in
line treatment to aid patients in
breathing. Patients undergoing a
tracheostomy surgery suffer from a
variety of underlying conditions,
including head and neck cancer, lung
infections or trauma.
In contrast to a total laryngectomy, a
tracheostomy procedure is reversable,
and the patient pool consists of a mix of
chronic and temporary patients. There
are around 1 million procedures
performed per year, and on average,
one in three patients use tracheostomy
products for more than six months. A
small segment of the patients uses the
products for a couple of years.
Patients get a cannula inserted by a
healthcare professional and may apply
HMEs themselves. While HMEs are
important for pulmonary health, HME
use is less prevalent than in people living
with a laryngectomy.
Strategic focus: Build the business
In tracheostomy, our strategy focuses
on establishing a chronic segment.
Tracheostomy is today mostly a hospital
business, and chronic patients living with
a tracheostomy are largely unserved.
To address the chronic segment, we are
developing a new tracheostomy specific
model. The focus is to develop a new
go-to-market model with community
and direct-to-consumer focus and to
adapt our product offering and services
to the needs of tracheostomy patients.
Voice and Respiratory Care
OUR BUSINESS
26
Market description
In 2021/22, the global market for
products was worth an estimated DKK
1-1.5 billion.
A total laryngectomy is the preferred
treatment for advanced laryngeal and
hypopharyngeal cancer as well as
cancer recurrence. The market size is
primarily impacted by the prevalence of
laryngeal and hypopharyngeal cancer,
driven by a growing ageing population,
and impacted by smoking and alcohol
consumption. Another significant driver
is the availability of reimbursement for
laryngectomy products across different
geographies.
There are around 50,000 new total
laryngectomies performed per year. It is
a chronic market, with the majority of
product usage happening in community,
i.e. after users have been discharged
from the hospital.
Market growth
The annual market growth is estimated
at 8%-10%.
Market growth in the laryngectomy
market is driven by underlying
laryngectomy patient growth, increasing
treatment penetration, as well as
increased compliance and product
consumption in existing markets.
The market penetration in the
laryngectomy segment today is low,
with a large unserved patient population
in both existing and new markets. The
low market penetration is due to a lack
of clinical standards in existing markets,
low treatment compliance and lack of
reimbursement in emerging markets.
In the existing markets today, mostly
Europe and the US, a large unserved
patient population remains, despite the
availability of products and
reimbursement.
In Northern Europe, which is the most
developed region, treatment
penetration is high, products are
reimbursed, and almost all patients with
a total laryngectomy are using products
to manage their chronic condition.
Moving to Southern Europe, despite
existing reimbursement, it is estimated
that only around half of the existing
patient population are using relevant
products. Looking at the penetration in
the US, this number drops further to
around 40%. Finally, outside of Europe
and the US, access and product usage is
very limited.
Price and mix also have an impact on
market growth. In core markets,
Coloplast has been successful at
upgrading users to the more advanced
Provox® Life product portfolio, which is
also priced at a premium compared to
the older generation of products.
Market shares
Coloplast is the global market leader in
laryngectomy with a market share of
around 85%.
In addition to Coloplast, there are two
smaller competitors, present mainly in
the UK, US and Germany. Outside these
markets, competition is limited.
Regional market shares
80%-90%
Share of European markets
80
%-90%
Share of Other developed markets
95
%-100%
Share of Emerging markets
Voice and respiratory care market
BUSINESS AREA
Voice and Respiratory Care
Voice and respiratory care market
Voice and Respiratory Care
1-1.5 bn
Market size*
globally in DKK
8%-10%
Market growth
annually
~85%
Market share
globally
#1
Market position
globally
European markets
Other developed markets
Emerging markets
* Market data for
Laryngectomy only
Source: Coloplast
Global market
by region
OSTOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
27
The acquisition of Atos Medical was
completed on 31 January 2022, adding
a new chronic care business segment,
Voice and Respiratory Care. The
integration of Atos Medical into
Coloplast is progressing according to
plan, with continued strong business
momentum.
Voice and Respiratory Care contributed
6%-points to the reported growth for
the 2021/22 financial year, reflecting
eight months of revenue impact.
The underlying growth of Voice and
Respiratory Care was solid high single-
digit, in line with expectations. Growth
was driven by Laryngectomy, with a
solid double-digit underlying growth,
driven by growth in patients served in
existing and new markets as well as an
increase in patient value driven by the
Provox® Life™ portfolio. Provox Life is
Atos Medical’s new personalised
solution and product line designed to
optimise patient’s breathing ability under
different circumstances, further enabling
24/7 use of Heat and Moisture
Exchangers (HMEs) for improved
pulmonary health. The Provox Life
portfolio is now launched in 15 of the 25
countries where Atos has its own
subsidiaries.
Tracheostomy and ENT (Ear, Nose and
Throat), also contributed to growth, with
an underlying mid-single digit growth, in
line with expectations.
From a geographical perspective, all the
regions contributed to growth, led by
Europe as the biggest region. The US
also delivered a solid contribution to
growth, while the fastest growing region
was Emerging markets.
Voice and respiratory performance
1.2 bn
Reported revenue
in DKK for
2021/22*
* Contain revenue for February – September,
matching the period of the ownership of Atos
Medical
6%
Acquired growth
impact
Reported revenue included a
positive effect from FX rates.
European markets
Other developed markets
Emerging markets
75%
22%
3%
21/22
geographical
revenue split
OUR BUSINESS
Wound and Skin Care
28
Underlying conditions
In Wound Care, patients are treated for
chronic wounds such as leg ulcers,
which are typically caused by insufficient
or impaired circulation in the veins of
the leg, pressure ulcers caused by
extended bed rest or diabetic foot
ulcers. Most chronic wounds contain
exudate, varying from small amounts to
high levels.
Wound Care products
A good wound dressing should provide
optimal conditions for wound healing, it
should be easy for healthcare
professionals to change and should
ensure that patients are not
inconvenienced by exudate, liquid or
odours. A moist wound environment
provides the best conditions for wound
healing for optimal exudate absorption.
The Coloplast product portfolio consists
of advanced foam dressings sold under
the Biatain® Silicone brand with 3DFit
Technology and Biatain® brand and
hydrocolloid dressings sold under the
Comfeel® brand. Coloplast is also
present in the gelling fibres segment of
the advanced wound care market with
the Biatain® Fiber product range.
Skin Care
In Skin Care, patients are treated for
skin damage associated with moisture,
incontinence, skin folds and obesity as
well as prevention of skin impairments.
Coloplasts skin care products consist of
disinfectant liquids or creams used to
protect and treat the skin and clean
wounds. For the treatment and
prevention of skin fold problems such as
fungal infections, damaged skin or
odour nuisance, Coloplast sells
InterDry®.
Coloplast mostly sells skin care products
to hospitals and clinics in the US and
Canada.
Compeed contract manufacturing
Wound and Skin Care includes contract
manufacturing of Compeed, a plaster
for blisters and cold sores.
Strive25: Focused
category leadership
Our view is that we have a stronger
than ever starting point for our wound
and skin care business, and our aim is to
deliver growth above the market and
expand margins.
We will continue to focus on the fast-
growing silicone category with our
Biatain Silicone portfolio with 3DFit
Technology, which is our point of
differentiation, as well as the gelling
fibres category, in which we launched
Biatain Fiber during 2020/21.
As with Chronic Care, two individual
markets really matter – China and the
US, where we will structure for success
to deliver on the global ambition.
In China, we aim to scale our business
by strengthening our commercial
foundation and building a stronger
position in the silicone market.
In the US, we will scale our business in
the hospital channel with 3DFit
Technology and maximise the
commercial potential of our skin care
portfolio.
In Europe, we will continue to build on
the momentum created with the 3DFit
Technology and Biatain Fiber as well as
aim to take market leadership positions.
In Emerging Markets, we will selectively
invest in key markets to accelerate
growth.
On the product side, we aim to deliver
new innovation and strong life cycle
management in the key focus markets.
Key strategic
highlights 2021/22
Despite negative impact from COVID-19
on the two key focus markets – China
and the US, the Wound and Skin Care
business delivered a satisfactory year,
with solid performance in Europe and
Emerging Markets, outside of China.
The Biatain Silicone portfolio was the
key growth driver. Coloplast is the third
largest player in the silicone foams
market in Europe.
Biatain Fiber, an absorbent fibre
dressing used to reduce exudate pooling
in exuding wounds, continues to
perform well. In Germany and France,
Coloplast’s market share within the
community gelling fibre market is now
around 10%.
Biatain Silicone
Wound and Skin Care
BUSINESS AREA
Wound and Skin Care
OSTOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
29
Market description
In 2021/22, the global market for
advanced wound care products was
worth an estimated DKK 24–26 billion,
excluding the negative pressure wound
therapy segment, where Coloplast is not
present. Coloplast is focused on two
attractive segments - Silicone Foams
and Gelling Fibres, which comprise
roughly 45% of the market. Compared
to the chronic care business, the wound
care market is to a larger extent a
hospital market, especially in the US and
China. In Europe, wounds are to a
greater extent treated in community.
Market growth
The annual market growth is estimated
at 2%–4%. The silicone foams market,
where Coloplast markets its Biatain®
Silicone products, is growing faster at
4%–6% per year, while Gelling Fibres,
where Coloplast markets Biatain® Fiber,
is growing on par with the market.
The underlying wound care market
growth is driven by demographics,
including ageing, obesity, and diabetes.
A growing elderly population leads to an
increase in the treatment of chronic
wounds, and a growing obese and
diabetic population results in a growing
number of patients receiving preventive
wound care treatment. Increased
competition between manufacturer,
pricing pressure originating from lower
public healthcare budgets and a lower
degree of perceived product
differentiation compared to the chronic
business, has a negative impact on the
market growth.
With the exception of China, the
underlying growth in the wound care
segment where Coloplast competes, has
returned to healthy levels, following a
negative impact from the COVID-19
pandemic. The wound care market in
China declined due to significant
negative impact from COVID-19
restrictions and limited hospital access.
The impact from COVID-19 on the
Chinese wound care market is expected
to be temporary. The underlying
dynamics and growth drivers of the
Chinese wound care market are not
expected to change beyond the
pandemic.
Market shares
Coloplast’s global market share in
advanced wound care is 5%-10%, and
Coloplast is the world’s fifth largest
manufacturer.
The market consists of many direct
competitors ranging from global
manufacturers to small, local
manufactures, as well as various
alternative treatment options, such as
negative pressure wound therapy and
traditional wound dressings.
Regional market shares
5%-10%
Share of European markets
0
%-5%
Share of Other developed markets
5
%-10%
Share of Emerg
ing markets
Skin Care
In 2021/22, the global market for skin
care products, in which Coloplast
competes, was worth an estimated DKK
4–5 billion with an estimated annual
segment growth of 2%-4%.
Coloplast holds a market share of 10%-
15% in the fragmented skin care
segment, which is mainly a US-based,
hospital business, where patients are
treated with a variety of skin care
products.
Wound and skin care market
24-26 bn
Market size*
globally in DKK
2%-4%
Market growth*
annually
5%-10%
Market share*
globally
#5
Market position*
globally
European markets
Other developed markets
Emerging markets
* Market data for Wound Care only
Source: Coloplast
Global market
by region
(Wound Care)
OUR BUSINESS
30
Wound and Skin Care generated 4%
organic sales growth for the 2021/22
financial year, with reported revenue in
DKK growing by 8% to DKK 2,689
million.
The wound care business alone
delivered 4% organic growth for the
financial year 2021/22.
The Biatain® Silicone portfolio was the
main contributor to growth. Biatain®
Fiber continues to perform well and also
contributed to growth.
From a geographical perspective,
Europe was the main growth
contributor, driven by solid momentum
in Germany and Spain. Emerging
markets excluding China also
contributed nicely to growth. China had
a negative impact on growth, due to
COVID-19 restrictions, which have led
to a decline in procedural volumes and
sales in the hospital channel.
The Compeed contract manufacturing
business made a solid contribution to
growth and grew double-digit, reflecting
improved consumer demand, as well as
a lower baseline last year.
The skin care business, which is mostly a
US hospital business, had a negative
impact on growth, impacted by lower
demand due to COVID-19.
Wound and skin care performance
BUSINESS AREA
Wound and Skin Care
2.7 bn
Reported revenue
in DKK for 2021/22
4%
Organic growth
at constant
exchange rates
8%
Reported growth
in DKK
Reported revenue included a
positive effect from FX rates.
European markets
Other developed markets
Emerging markets
51%
27%
22%
21/22
geographical
revenue split
OSTOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
31
Underlying conditions
Coloplast is present in four segments of
the Interventional Urology market –
Men’s Health, Women’s Health,
Endourology and Bladder Health.
Within Men’s Health, men are treated
for erectile dysfunction. Around 25% of
men aged 40-70 years old experience
moderate to severe erectile dysfunction.
Within Women’s Health, women are
treated for pelvic organ prolapse and
stress urinary incontinence. Around
50% of women 50-79 years old report
experiencing pelvic organ prolapse
symptoms. An estimated 32% of
women suffer from stress or mixed
urinary incontinence.
In Endourology and Bladder Health,
patients are treated for kidney stones
and other urological conditions, such as
prostate disorders, urethral strictures,
and voiding dysfunctions.
Interventional Urology products
Within Men’s Health and Women’s
Health, Coloplast markets implantable
products. The implant business
manufactures vaginal slings used to
restore continence and synthetic mesh
products used to treat a weak pelvic
floor. Key brands within this segment
are Altis® and Restorelle®. The business
also includes penile implants for men
experiencing severe impotence that
cannot be treated with drugs. The key
brand within the penile implants
business is Titan® Touch.
Within Endourology and Bladder Health,
Coloplast manufactures and markets
single-use devices for use before, during
and after surgery such as prostate
catheters and stents.
Strive25: On the move
for patients
Interventional Urology transforms life
for patients suffering from urological
conditions by advancing interventional
treatment solutions.
The business area represents an
important growth opportunity for
Coloplast - the base case for the
business is to deliver high-single digit
organic growth and sustain strong
profitability.
On the portfolio side, we will increase
our investments into enhancing our core
businesses by substantially increasing
our investments in R&D.
We are actively pursuing M&A and
distribution agreements in high-growth
adjacent segments. An example of this
is the acquisition of Nine Continents
Medical in 2020, with which Coloplast
obtained an early-stage technology,
Intibia, for third line treatment of over-
active bladder. The market for third line
therapies market is estimated at USD 1
billion, with high-single digit growth.
We also see good organic opportunities
in employing our existing portfolio
across geographies.
In North America, we sell implantable
devices and we will continue to invest
and grow the implantable business. In
addition, we aim to increase our
presence in Endourology in the US. The
product portfolio has been launched,
and we have invested into a specialised
sales force.
In Europe, we will focus on driving
growth in Men’s Health through patient
education, and growth in Endourology
through portfolio expansion.
Finally, we will work on expanding our
presence in Emerging Markets in
selected high potential countries.
Key strategic
highlights 2021/22
During the year, Coloplast initiated
A pivotal study on Intibia. The product is
expected to launch in 2025/26.
To strengthen the core portfolio
offering, Coloplast will launch two
products – Saffron™, a tissue fixation
system in the Women’s Health portfolio
and Soprano®, a hybrid guidewire in the
endourology portfolio. Both products
will be launched during 2022/23.
As part of the strategy to expand into
adjacent segments, Coloplast is entering
the lasers segment, and has initiated the
launch of its first laser equipment,
Thulium Fiber Laser Drive in key
markets in 2021/22. The laser has been
obtained via a distribution agreement
and allows Coloplast to compete in the
laser market, worth an estimated DKK 3
billion.
Thulium Fiber Laser Drive
Interventional Urology
OUR BUSINESS
Interventional Urology
32
Market description
In 2021/22, the global market for
interventional urology products was
worth an estimated DKK 13-14 billion,
up from DKK 12-13 billion in 2020/21,
following a resumption in elective
procedures and a continued
improvement in growth in 2021/22.
Around half of the interventional
urology market is within endourology,
with the remaining half of the market
split almost equally between men’s
health, women’s health, and bladder
health.
The endourology and bladder health
categories consist of single-use devices,
while men’s health and women’s health
consist of implantable devices.
Market growth
The annual market growth is estimated
at 3%–5%.
Market growth in the interventional
urology market is driven by the ageing
population and lifestyle diseases, as well
as advancements in treatment solutions
leading to more cost-efficient surgical
procedures. For implants, market
growth drivers include a growing
awareness of the treatment options
available for men with severe impotence
and women with urological disorders.
2021/22 saw a soft start to the year
due to the spread of the Omicron
variant, but the elective procedures
rebounded towards the end of first half
of the year, with healthy growth in
elective procedures in second half of
2021/22.
The COVID-19 pandemic has shown
that the interventional urology market is
not immune to a global pandemic, as
COVID-19 restrictions led to postponed
or cancelled elective procedures.
However, we also saw that the business
recovers relatively fast once elective
procedures were allowed to resume.
Market shares
Coloplast holds a market share of about
15%-20% in interventional urology and
is the fourth largest manufacturer within
this market.
Within men’s health and women’s
health, which are mostly US markets,
Coloplast is the second and third largest
manufacturer respectively.
Within endourology in Europe, which
accounts for roughly a quarter of the
total endourology market, Coloplast is
the second largest manufacturer.
Regional market shares
20%-25%
Share of European markets
15
%-20%
Share of Other developed markets
5
%-10%
Share of Emerging markets
E
ntry into adjacent markets
Our
entry into the lasers segment, with
the launch of Th
ulium Fibre Laser, and
the over
-active bladder market will, in
effect, almost double the addressable
market. The market for lasers is
estimated at around DKK 3 billion and
the market for third line therap
ies for
over
-active bladder is estimated at
around USD 1 billion.
Interventional urology market
BUSINESS AREA
Interventional Urology
13-14 bn
Market size
globally in DKK
3%-5%
Market growth
annually
15%-20%
Market share
globally
#4
Market position
globally
European markets
Other developed markets
Emerging markets
Source: Coloplast
Global market
by region
OSTOMY CARE • CONTINENCE CARE • VOICE AND RESPIRATORY CARE • WOUND AND SKIN CARE • INTERVENTIONAL UROLOGY
33
Interventional Urology generated 9%
organic sales growth for the 2021/22
financial year, with reported revenue in
DKK growing by 16% to DKK 2,424
million.
Growth was broad-based, driven by
both Men’s and Women’s Health in the
US, and Endourology in Europe, most
notably France. Region Emerging
markets also contributed nicely to the
growth in Endourology.
From a geographical perspective, the
US was the main growth contributor,
followed by Europe, and in particular
France and Spain.
The Men’s Health business, which is
mainly a US business, delivered a solid
contribution to growth in 2021/22
driven by the Titan® penile implants.
Elective procedure volumes within
Men’s Health were healthy throughout
the year.
The Women’s Health business, which is
also primarily a US business, made a
solid contribution to growth as well.
Growth was driven by both the mesh
product portfolio for pelvic organ
prolapse treatment and the sling
portfolio for treatment of stress urinary
incontinence.
In 2021/22, Coloplast invested further
into strengthening the Women’s Health
business with the development of
Saffron™, a new tissue fixation system,
which will be added to the existing
portfolio of products that Coloplast
provides for pelvic floor reconstruction
in women. The product will be
commercially available in the US market
in autumn 2022.
Performance in Endourology continues
to be driven by Europe. The US also
contributed nicely to growth in 2021/22
on the back of successful US product
registration and investments into a
specialised US endourology sales force.
In 2021/22, Coloplast invested further
into strengthening the endourology
product portfolio with the development
of Soprano®, a hybrid guidewire, used to
facilitate the placement of
endourological instruments during
diagnostic or interventional procedures.
Soprano will be launched in the US and
European markets in the first quarter of
2022/23 and will allow Coloplast to fill
an important portfolio gap, thereby
increasing the relevance and
competitiveness of the aggregate
endourology product portfolio.
In addition to strengthening the existing
core product portfolio within
Interventional Urology, Coloplast is
launching Thulium Fiber Laser Drive,
the first laser equipment in the portfolio,
and enters an adjacent growth market,
in line with the strategic ambition set out
in Strive25. The Thulium Fiber Laser
Drive represents the latest cutting-edge
laser technology, bringing highly
effective intra-operative performance. It
is an all-in-one solution for lithotripsy,
benign prostatic hyperplasia treatment
and soft tissue, offering full support and
customisation. The Thulium Fiber Laser
Drive is launched in the US and key
European markets in 2022 and 2023.
Interventional urology performance
2.4 bn
Reported revenue
in DKK for 2021/22
9%
Organic growth
at constant
exchange rates
16%
Reported growth
in DKK
Reported revenue included a
positive effect from FX rates.
European markets
Other developed markets
Emerging markets
34%
56%
10%
21/22
geographical
revenue split
2021/22 FINANCIAL AND NON-FINANCIAL PERFORMANCE
Financial results
34
Earnings
Revenue
The organic growth was 6%. Reported
revenue in DKK was up by 16% to DKK
22,579 million. Acquired growth
impacted revenue by 6% and exchange
rate developments increased revenue
by 4% mainly related to the
appreciation of the USD, GBP and CNY
against DKK.
Gross profit
Gross profit was DKK 15,529 million
compared to DKK 13,313 million last
year and equivalent to a gross margin of
69%, on par with last year. The gross
margin included a positive impact from
currencies, mainly related to the
appreciation of USD, GBP and CNY
against DKK. The depreciation of the
HUF against DKK also contributed
positively. Around 80% of the
company’s production volumes are in
Hungary. In addition to currencies, the
gross margin was positively impacted by
the inclusion of Atos Medical, and
operating leverage and efficiency
savings from Global Operations Plan 5.
The above-mentioned positive drivers
were largely offset by double-digit wage
inflation in Hungary, increasing prices
for raw materials, energy and
transportation, as well as the ramp-up
costs in Costa Rica.
Costs
Operating expenses amounted to DKK
8,619 million, a DKK 1,661 million
increase (24%) from last year. Atos
Medical contributed with DKK 754
million to operating expenses (8 months
impact), of which DKK 152 million were
amortisation costs, included under
distribution costs.
Excluding the Atos Medical impact,
operating expenses increased by DKK
907 million, or 13%, from last year.
Distribution costs amounted to DKK
6,797 million, a DKK 1,312 million
increase (24%) from DKK 5,485 million
last year and were impacted by the
inclusion of Atos Medical (8 months
impact). Distribution costs amounted to
30% of revenue compared to 28% last
year. The higher distribution costs
reflect a normalisation of sales,
marketing and travel expenses as
COVID-19 restrictions were eased
across most markets. Distribution costs
were likewise impacted by higher
logistics costs, as a result of increased
freight rates as well as continued
commercial investments in the US,
Interventional Urology, consumer and
digital initiatives.
Administrative expenses amounted to
DKK 1,005 million, up DKK 243 million
(32%) from DKK 762 million last year
and were impacted by the inclusion of
Atos Medical (8 months impact). The
increase in administrative expenses was
driven by legal, consultancy and IT
costs. Administrative expenses
accounted for 4% of revenue, which is
on par with last year.
EBIT growth of 9% before special items
2021/22 FINANCIAL AND NON-FINANCIAL PERFORMANCE
Financial results
Income statement, DKK million
2021/22 Index
Revenue
22,579
116
Production costs
-7,050
115
Gross profit
15,529
117
Distribution costs
-6,797
124
Administrative expenses
-1,005
132
Research and development costs
-866
115
Other operating
income 74
101
Other operating expenses
-25
86
Operating profit (EBIT) before special items
6,910
109
Special items
-471
n/a
Operating profit (EBIT)
6,439
105
Financial income
119
87
Financial expenses
-431
731
Profit
before tax 6,127
98
Tax on profit for the year
-1,421
101
Net profit for the year
4,706
98
FINANCIAL RESULTS • SUSTAINABILITY
35
The R&D costs were DKK 866 million, a
DKK 111 million (15%) increase
compared to last year, due to an
increased activity level across all
business areas. R&D costs amounted to
4% of revenue on par with last year.
The R&D costs were also impacted by
the inclusion of Atos Medical (8 months
impact).
Other operating income and other
operating expenses amounted to a net
income of DKK 49 million, against DKK
44 million last year.
Operating profit (EBIT) before special
items
EBIT before special items amounted to
DKK 6,910 million, a DKK 555 million
(9%) increase from DKK 6,355 million
last year. The EBIT margin before
special items was 31% compared to
33% last year. The EBIT margin includes
a positive impact from currencies,
mainly related to the appreciation of
USD, GBP and CNY against DKK. EBIT
was negatively impacted by higher sales
and marketing activities and travel
expenses as COVID-19 restrictions were
eased across most markets, continued
commercial investments as well as DKK
152 million in amortisation costs related
to the Atos Medical acquisition.
Special items
During the financial year of 2021/22,
Coloplast incurred special items
expenses of DKK 471 million.
In June, Coloplast made a further
provision of DKK 300 million to cover
potential settlements and costs in
connection with lawsuits in the US
alleging injury resulting from the use of
transvaginal surgical mesh products
designed to treat pelvic organ prolapse
and stress urinary incontinence. The
increase comes as the process is taking
longer than previously anticipated,
including delays due to COVID-19,
which has led to an increase in legal
advisory costs. The increase brings the
total amount recognised since the
2013/14 financial year for expected
costs of litigation in the US to DKK 6.15
billion including legal costs (before
insurance cover of DKK 0.5 billion).
Coloplast continues to make settlement
progress on unresolved MDL cases and
has now settled around 99% of the
former MDL cases.
The remaining expenses of DKK 171
million are related to transaction and
integration costs, in connection with the
acquisition of Atos Medical.
Operating profit (EBIT) after special
items
EBIT after special items was DKK 6,439
million. The EBIT margin after special
items was 29%.
Financial items and tax
Financial items were a net expense of
DKK 312 million, compared to a net
income of DKK 78 million last year. The
net expense was primarily due to losses
on currency hedges of DKK 191 million,
on mainly GBP and USD, and fees of
DKK 68 million, of which DKK 39 million
are loan fees in relation to the Atos
Medical acquisition. Interest expenses
amounted to DKK 156 million, from
DKK 13 million last year, impacted by
the financing of the Atos Medical
acquisition. This was only partly offset,
mainly by gains on balance sheet items
denominated in foreign currencies,
including CNY and USD, of DKK 57
million.
The tax rate was 23.2%, compared to
22.6% last year. The tax expense
amounted to DKK 1,421 million against
DKK 1,408 million last year. The tax rate
was impacted by non-deductible
expenses, partly offset by a temporary
increase in the tax-deductible value on
R&D expenses in Denmark.
Net profit
Net profit before special items was DKK
5,068 million, a DKK 87 million increase
from DKK 4,981 million last year.
Diluted earnings per share (EPS) before
special items increased by 2% from DKK
23.36 last year to DKK 23.82.
Net profit after special items was DKK
4,706 million and diluted earnings per
share (EPS) after special items were
DKK 22.11.
2021/22 FINANCIAL AND NON-FINANCIAL PERFORMANCE
Financial results
36
Cash flows and
investments
Cash flows from operating activities
Cash flows from operating activities
amounted to DKK 5,099 million, against
DKK 5,290 million last year. The negative
development in cash flows from
operating activities was mainly due to an
increase in inventories, other receivables
and expired hedges.
Investments
Coloplast made investments of DKK
1,135 million in the financial year
2021/22 or 5% of revenue, compared
with DKK 1,966 million last year.
Investments last year included the
acquisition of Nine Continents Medical
of DKK 950 million. Excluding
acquisitions, investments last year
amounted to DKK 1,016 million or 5%
of revenue.
Total cash flows from investing activities
were a DKK 11,759 million outflow, due
to the acquisition of Atos Medical,
against a DKK 2,011 million outflow last
year.
Free cash flow
As a result, the free cash flow was an
outflow of DKK 6,660 million compared
to an inflow of DKK 3,279 million last
year. The decrease was mainly driven
by an increase in inventories and
prepaid costs including costs related to
the acquisition of Atos Medical. Adjusted
for acquisitions, the free cash flow for
the financial year 2021/22 was DKK
3,973 million, an increase of DKK 597
million compared to last year.
Capital resources
As a 30 September 2022, Coloplast had
net interest-bearing debt, including
securities, of DKK 18,091 million,
against DKK 2,112 million as at 30
September 2021. The increase in net
interest-bearing debt was mainly due to
the acquisition of Atos Medical. The
gearing ratio at the end of the period
was 2.3x EBITDA (before special items).
Continuous
growth (DKK)
6,910 m*
EBIT up from
6,355 m last year
* Before special items
5,099 m
cash flows from
operating
activities
-11,759 m
outflow from
investing activities
FINANCIAL RESULTS • SUSTAINABILITY
37
Statement of financial
position and equity
Balance sheet
As at 30 September 2022, total assets
amounted to DKK 34,956 million, an
increase of DKK 19,115 million
compared to 30 September 2021. The
increase was mainly due to an increase
in intangible assets driven by the
acquisition of Atos Medical.
Working capital
Working capital was 25% of revenue,
compared to 24% as at 30 September
2021, driven by an increase in
inventories and trade receivables.
Inventories increased by DKK 759
million to DKK 3,187 million, driven by
increased safety stocks on raw
materials, to provide protection from
supply chain constraints, increase in
finished goods due to the transfer of
production to Costa Rica and an
increases in prices. Atos Medical also
contributed to the increase in
inventories with DKK 169 million. Trade
receivables increased by DKK 728
million to DKK 3,940 million. Atos
Medical contributed to the increase in
trade receivables with DKK 270 million.
Trade payables increased by DKK 206
million relative to 30 September 2021
to stand at DKK 1,242 million.
Equity
Equity increased by DKK 124 million
relative to 30 September 2021 to DKK
8,292 million. Payment of dividends
amounting to DKK 4,041 million and net
effect of treasury shares bought and
sold of DKK 619 million was only partly
offset by total comprehensive income
for the year of DKK 4,783 million and
share-based remuneration of DKK 51
million.
Dividends
Coloplast paid interim dividends totalling
DKK 1,062 million in May, equal to DKK
5.00 per share.
Share buy-backs
A share buy-back programme of DKK
500 million was initiated in February
2022 and was completed on 21 April
2022.
Treasury shares
As at 30 September 2022, Coloplast’s
holding of treasury shares consisted of
3,692,876 B shares, which was 493,527
more than at 30 September 2021. The
increase was due to the share buy-back
programme.
Eurobond issuance related to the Atos
Medical acquisition
On 11 May 2022, Coloplast announced
the successful issuance of EUR 2.2
billion senior notes under its Euro
Medium Term Note programme,
impacting the non-current liability by
DKK 16,359 million. The net proceeds
from the Eurobond issuance have been
used for refinancing of the term loan
facility established in connection to the
acquisition of Atos Medical, which
closed on 31 January 2022.
In connection with the bond issue,
Coloplast obtained a credit rating of
BBB by S&P Global Ratings.
Return on invested capital
ROIC after tax before special items was
27% against 45% as of 30 September
2021. The decrease was due to the
acquisition of Atos Medical.
4,041 m
paid dividend in
DKK
34,956 m
total assets in DKK
25%
working capital
in % of revenue
27%*
return on
invested capital
* Before special items
84%*
payout
ratio
2021/22 FINANCIAL AND NON-FINANCIAL PERFORMANCE
Sustainability
38
Coloplast is committed to advancing the
sustainability efforts across our priority
areas, without compromising product
safety and clinical performance. This is
formalised in our commitment to the
UN Global Compact and our
contributions to the UN Sustainable
Development Goals (SDGs).
As part of our corporate strategy,
Strive25, we are dedicated to doing
even more to reduce the impacts from
our products and packaging and to
reduce our emissions. Furthermore, we
have an ongoing commitment to ensure
responsible operations.
We are committed to report step-by
step according to the Task Force on
Climate-Related Financial Disclosures
(TCFD) framework, and we have carried
out an assessment of the eligibility of
our core activities vis-a-vis the new EU
Taxonomy regulation. We conclude that
we have no material eligible activities on
which to report within revenue, CAPEX
and OPEX.
Coloplast is in the process of integrating
Atos Medical into our sustainability
ambition and reporting. From 2022/23,
Atos Medical sustainability data will be
included in our reporting.
The Sustainability Report ensures
compliance with the requirements of
Section 99a, 99b and 107d of the
Danish Financial Statements Act and
also includes Coloplast’s EU Taxonomy
Regulation disclosure and constitutes
our Communication on Progress in
implementing the principles of the
United Nations Global Compact.
Download our
Sustainability report
https://sustainability.coloplast.com/s
ustainability/reporting/reports/
Sustainability
Our commitments and progress
Commitments
UN Global Compact
principles
2025 ambitions
2021/22
2020/21
Strive25
priority areas
Improving
products and
packaging
Principle
s 7-9
90% of packaging is recyclable
80% of packaging consists of renewable materials
75% of production waste is recycled
78%
1)
76%
1)
71%
75%
70%
58%
Reducing
emissions
2)
Principle
s 7-9
100% reduction of scope 1 & 2 emissions by 2030
2) 3)
100% renewable energy
50% electric company cars
50% scope 3 emissions reduced per product by 2030
2)3)
10% reduction of air
travel
2)
and then freeze
5% limit on goods transported by air
8%
72%
4%
9%
55%
3%
-
7%
67%
2%
10%
81%
2%
Ongoing commitment
Responsible
operations
Principle
s 1-6, 10
100% white collars trained in Code of
Conduct
2.0 lost time injury frequency
4)
40
% representation of female senior leaders
5)
by 2030
75% share of diverse teams
Engagement score above industry benchmark
100%
2.4
21%
55%
8.2%
99%
2.2
24%
50%
8.2%
1
)
Due to a new and improved reporting tool, the packaging data is not comparable with the data previously reported
2)
From base year 2018/19,
3)
Target validated by the Science-Based Targets initiative (SBTi),
4)
In parts per million,
5)
VP+ level.
FINANCIAL RESULTS • SUSTAINABILITY
39
Coloplast is a purpose driven company.
We make life easier for people living with
intimate healthcare needs. Most
Coloplast users have chronic conditions
that require permanent management.
In 2021/22, we continued to help more
than two million users globally and
welcomed more than 250,000 new
users to our patient support
programme, Coloplast® Care. But many
user needs remain unmet across our
business areas. Building better
standards of care, raising the bar with
innovative products and creating access
for as many users as possible is a direct
embodiment of the our mission. We are
building the consumer healthcare
company of the future – enabling self-
care for chronic users and supporting
healthcare systems to meet, in a cost-
effective way, increasing demand as the
world population ages. These are the
guiding principles of our work and our
key contribution to SDG 3.
Innovation
Through innovation, we aim to enable
personalised care, covering core
products, extended solutions and
services. Within core products and
extended solutions, our Clinical
Performance Programme aims to bring
clinically differentiated products to the
market, backed by clinical evidence. The
new catheter platform, Luja™, addresses
key urinary tract infection risk factors
and will launch in 2023. The world’s first
digital leakage platform, Heylo™, also
launching in 2023, addresses the mental
burden caused by fear of leakage. Atos
Medical continues the launch of the
Provox® Life™ portfolio, which is now
available in 15 markets. Provox Life is a
new product line designed to optimise
patients’ breathing ability under
different circumstances, further enabling
24/7 use of Heat and Moisture
Exchangers for improved pulmonary
health.
Supporting users and
healthcare
professionals
Getting appropriate support is crucial in
ensuring that users establish a good
routine and experience a high quality of
life. Through the Coloplast Care
Programme, we support users in more
than 30 countries with services tailored
to the needs of each individual market.
We also provide training for healthcare
professionals through our educational
collaboration platform Coloplast®
Professional. During 2021/22, Atos
Medical also launched a website offering
easy access to reliable information and
patient testimonials for total laryngec-
tomy patients and their loved ones. We
further support education and improve-
ment of treatment standards through
our Access to Healthcare programme.
Access to healthcare
Coloplast’s corporate partnership
programme Access to Healthcare aims
to improve conditions for people within
ostomy, continence and wound and skin
care. Established in 2007, the
programme has so far supported more
than 80 projects across more than 20
countries. All Access to Healthcare
projects are created in collaboration
with local stakeholders, focusing on
various themes with the common goal
of creating value for people with
intimate healthcare needs and helping
them live with dignity.
Access to Healthcare projects bring
together practitioners, users, NGOs and
other public and private stakeholders to
empower users, train practitioners and
advocate for better care. The
programme also supports Coloplast’s
long-term ambitions by bringing us
closer to users and helping us gain
insights into the needs of diverse
stakeholders, including healthcare
practitioners, societies and policy
makers.
Creating access for
more users
As market leader, Coloplast is
committed to establishing lasting and
consistent access to products,
technologies, services and training that
benefit users, beyond choice of brand.
We have set a long-term ambition of
continually creating or improving access
to better care for another one million
new users across all our business areas
and geographies.
To achieve this ambition, we raise the
standards of care in two main ways.
First, we advocate for establishing and
improving reimbursement to ensure that
users have access to the products they
need for as long as they need them.
Recent successes include establishing or
improving reimbursement for
hydrophilic catheters in Japan, Poland,
South Korea and Australia. A current
key focus area is improving bladder
management for people with spinal cord
injuries in China, where access to
intermittent catheters is limited. Second,
we are entering new segments in
existing markets, such as Multiple
Sclerosis in Europe.
Living the Coloplast mission
2021/22 FINANCIAL AND NON-FINANCIAL PERFORMANCE
Sustainability
40
Our position on plastic
As a manufacturer of medical products
made of plastic, Coloplast has a
responsibility and has clear priorities:
• Product safety and clinical
performance cannot be
compromised
• Single-use products are the easiest
and safest option for our users.
• Sustainability should be easy for our
users
• We need to identify new materials
and support the development of
new technologies
• Partnerships across the industry are
essential
Read the full position on plastic on our
website.
Our substance position
To make our ambitions clear, Coloplast
has developed a position on substances:
• All Coloplast products are
biocompatible and safe for the
intended purposes
• Coloplast is mindful when selecting
materials and substances used in its
products and complies with
international and local regulations
and standards, including REACH and
the California proposition 65 list
• Coloplast monitors regulations,
science and technology to identify
opportunities and risks to proactively
substitute substances if needed
Read the full position on substances on
our website.
Science-Based Targets
Coloplast is committed to the Business
Ambition for 1.5°C. We have set scope
1, 2 and 3 emission reduction targets,
which were validated by the Science-
Based Targets initiative in 2021/22:
• Absolute reduction of scope 1 and 2
emissions by 2030 (with 2018/19 as
the base year)
• Continued annual sourcing of 100%
renewable electricity through 2025
• 50% per-product reduction of scope
3 emissions manufactured by 2030
(with 2018/19 as the base year).
Self-reporting on the life-cycle costs of
our products and setting targets to
reduce our emissions will prove to our
customers that we are committed to
sustainability.
Our supplier ambitions
Coloplast continues to work on its
Supplier Sustainability Programme,
which provides the framework for
collaborating with suppliers. The
programme supports our ambitions by
supporting suppliers’ efforts to reduce
their emissions and identifying raw
materials with a lower carbon footprint.
In 2021/22, Coloplast surveyed 50 of
our top-emitting raw material suppliers
to map emission reduction activities in
our value chain. The insights from the
survey will inform our ongoing work.
During 2022/23, we will expand the list
of top-emitting suppliers to 100+
suppliers. We will formulate and
communicate our aspirations for these
suppliers to commit to reducing
emissions as an important driver in
reducing our scope 3 emissions.
Our positions and ambitions
Coloplast’s total Scope 1, 2
and 3 emissions
Scope 1 and 2 – Natural gas
and company cars
Scope 3 – Raw Materials
Scope 3 – Transportation of
goods
Scope 3 – Fuel and energy-
related
Scope 3 – Other reported
11%
62%
13%
3%
11%
181,600
Tonnes CO2e
in 2021/22
FINANCIAL RESULTS • SUSTAINABILITY
41
As part of Strive25, Coloplast has made
it a strategic priority to reduce emissions
and contribute to accelerating climate
action. Our decarbonisation plan is
based on detailed emission mapping of
all activities across our value chain.
In 2021/22, we reduced scope 1 and 2
emissions by 8% compared to the base
year 2018/19 and reduced our scope 3
emissions by 9% per product since the
base year 2018/19.
Reducing scope 1 and 2
emissions
Coloplast continues to advance our
efforts on renewable energy with the
ambition to have all sites running on
100% renewable energy by 2025.
Renewable energy use was 72% of the
total energy use in 2021/22, positively
impacted by efforts to phase out natural
gas at Coloplast’s manufacturing sites
during 2021/22. Our approach is to
procure electricity from renewable
sources and phase out the use of
natural gas primarily through
electrification such as electric heat
pumps but also by other means such as
utilisation of district heating based on
renewables where feasible. Coloplast
achieved a 3% reduction in the total
energy use in 2021/22 compared to last
year.
For some years, Coloplast has been
purchasing renewable energy
certificates (RECs) for electricity
consumption at all our production sites.
Electricity accounts for more than 60%
of the total energy consumption in our
production. Coloplast currently covers
100% of electricity use with RECs,
effectively reducing our emissions by
30,000 tonnes CO2e in 2021/22.
Our ambition is to replace RECs with
Power Purchase Agreements (PPAs). In
2021/22, Coloplast signed its first PPA,
which will ensure renewable energy
covering 100% of the electricity
consumption for Coloplast in Denmark
from 2023/24 onwards.
Coloplast operates a car fleet consisting
of around 2,000 cars, which emitted
10,700 tonnes CO2e in 2021/22. To
reduce our impact, we will shift to
electric company cars with an ambition
of 50% by 2025 and 100% by 2030.
Reducing scope 3
emissions
Raw materials used in Coloplast’s
products are a major source of value
chain emissions, accounting for 68% of
the reported scope 3 emissions in
2021/22. We engage with 50 of our
top-emitting suppliers, and in 2021/22
we worked to include more suppliers in
our Supplier Sustainability Programme.
Furthermore, we have integrated
climate impact assessment into our
product innovation process, effectively
setting emission-related criteria to
suppliers of raw materials for our new
products. In addition, in 2021/22 we
initiated emission assessments of our
existing products, identifying priority
products for projects designed to reduce
emissions from raw materials used.
Transportation of goods accounted for
approximately 15% of Coloplast’s total
scope 3 emissions in 2021/22. With
Coloplast’s growth rates, transportation
needs will increase going forward.
Coloplast mitigates emissions from
transportation of goods by substituting
air with sea and ground freight with an
ambition to limit the use of air freight to
5% of total goods transported.
Reducing emissions
Key figures
Share of renewable energy
Share of goods
transported by air*
* Accounting for weight and
distance (i.e., tonne-kilometre)
Share of electric
company cars*
* 2030 ambition is 100% electric
company cars in scope 1 and 2
100%
72%
2025 ambition 2021/22
5%
3%
2025 ambition 2021/22
50%
4%
2025 ambition 2021/22
2021/22 FINANCIAL AND NON-FINANCIAL PERFORMANCE
Sustainability
42
As a manufacturer of medical products
made primarily of plastic, Coloplast
embraces our responsibility to
contribute to solving the problems with
plastic waste in support of SDG 12.
When addressing these challenges, we
must work within the distinct clinical and
regulatory limitations of our industry.
We incorporate environmental
performance when developing new
products. Our focus is on designing our
products and packaging to be
recyclable and made of renewable
materials, such as recycled or bio-based,
with a lower environmental impact.
Renewable and
recyclable packaging
Implementing material changes to
medical devices takes time. We see
more immediate opportunities when it
comes to improving our packaging. Our
ambition is to reach 90% recyclable
packaging and 80% packaging
consisting of renewable materials by
2025. Our secondary and tertiary
packaging already consists of renewable
materials and is recyclable.
Primary packaging of Coloplast
products is often an integral part of the
product, providing key functionalities
such as usability and sterility. In
2021/22, we initiated a project to
achieve sustainable primary packaging
for a range of products across the
business areas of wound and skin care,
continence care and ostomy care. By
spanning several business areas, the
project has the potential to contribute
significantly to delivering on our
Strive25 ambitions.
Sustainability in
innovation
To improve transparency in decision-
making and address environmental
challenges early in the product
development phase, Coloplast
integrates eco-design principles into our
innovation processes. The principles are
based on life cycle thinking and help us
ensure that our future products use less
materials, generate less production
waste, use more sustainable raw
materials such as renewable and
recycled materials, avoid hazardous
substances, are more recyclable and
have more recyclable packaging.
Waste recycling
During 2021/22, we continued our
progress on recycling more of our
production waste. A total of 71% of
Coloplast’s production waste is now
recycled compared to 58% in 2020/21.
We have mainly focused our waste
recycling efforts on our major
production sites in Hungary, which are
responsible for 80% of Coloplast’s total
production waste. As we look ahead, we
will expand our focus to all production
sites globally.
Coloplast is dedicated to broadening our
approach to sustainable waste
management even further. In the
coming years, we will focus on higher-
value activities such as reducing, reusing
and repurposing. Currently, we are
exploring new and emerging
technologies within mechanical and
chemical recycling as well as
commercial and applied research
partnerships.
Improving products and packaging
Key figures
SHARE OF RECYCLABLE
PACKAGING
1)2)
PRODUCTION WASTE
RECYCLING RATE
1)
Packaging ambitions covering
products currently on the market
2)
Due to a new and improved
reporting tool, the packaging data is
not comparable with data previously
reported
90%
78%
2025 ambition 2021/22
75%
71%
2025 ambition 2021/22
FINANCIAL RESULTS • SUSTAINABILITY
43
Quality standards
It is essential to Coloplast to deliver safe
and reliable products. Our products and
quality management system meet strict
regulatory standards established by
authorities worldwide, and compliance is
verified on site by independent auditors
and notified bodies.
Medical Device
Regulation (MDR)
Coloplast has revised every aspect of
our quality management system and is
in the process of revising all relevant
product documentation to ensure
compliance with MDR. Coloplast has
obtained MDR certificates for the first
15 product groups (representing around
75% of Coloplast revenue), while Atos
Medical is in great momentum with the
MDR certification process for the voice
prosthesis Provox Vega. TRACOE has
received its first MDR certificate.
Coloplast BEST
The Coloplast BEST Code of Conduct
outlines our commitment to responsible
business practices and our approach to
acting with integrity. Regular training in
Coloplast BEST is mandatory for all
employees, and all white-collar
employees must complete the Coloplast
BEST e-learning module within 45 days
of hire. In 2021/22, the Coloplast BEST
completion rate was 100%.
Atos Medical’s Code of Conduct is built
on the same principles as Coloplast
BEST.
Ethics Hotline
Coloplast has a global Ethics Hotline,
which enables employees and other
stakeholders to, anonymously and in
good faith, report any suspected
breaches of Coloplast BEST or other
concerns. Coloplast’s Ethics Hotline is
managed by an independent third party.
In 2021/22, Coloplast received a total of
70 cases, of which 48 were within the
scope of the Ethics Hotline. Cases not in
scope are redirected to People and
Culture for investigation.
Data privacy
Coloplast collects and handles personal
data as part of our online activities. Our
users trust us with very sensitive
information, and it is a priority for us to
treat this data with the utmost respect
and confidentiality. Coloplast handles
and protects all personal data in
accordance with national law – and with
the same approach across all group
companies. Internal and third-party
audits are conducted to ensure secure
and reliable data handling. Coloplast is
certified according to ISO 27001 on
information security and facilitates
awareness and training sessions for
employees on data privacy.
Ethical marketing
practices
Healthcare professionals and the people
who use our products and services
count on us to provide clear and
accurate information. We follow all
applicable regulations regarding
promotion, always ensuring that our
communication is factual, evidence-
based and gives accurate, objective and
complete information. We do not
engage in medical diagnosis or advise
on course of treatment but
unequivocally refer to a healthcare
professional and/or Intended Use of the
products.
Reducing occupational
injuries
Coloplast continues to progress on our
efforts to reduce occupational injuries.
In 2021/22, our lost-time injury
frequency was 2.4 ppm, which accounts
for 57 accidents. The increase from 2.2
ppm in 2020/21 can be explained by
more employees returning to our sites
post-COVID-19. We are on track to
reach our 2025 ambition of 2.0 ppm.
Responsible tax
management
Coloplast ensures that taxes are paid
where business activities generate value
in accordance with internationally
accepted standards. Coloplast does not
allow commercial needs to override
compliance with applicable laws, nor do
we base commercial activities on tax
avoidance schemes. Within these
principles, Coloplast will pursue tax
opportunities, including seeking relevant
government-sponsored tax incentives
and strive to avoid double taxation.
Coloplast publishes country-by-country
tax reporting for 2021/22 on our
website in line with the relevant EU
directive.
Responsible operations
2021/22 FINANCIAL AND NON-FINANCIAL PERFORMANCE
Sustainability
44
Coloplast aspires to be the employer of
choice. As a growing company,
Coloplast has expanded the total
workforce by 2,100 employees, mainly
driven by 1,200 additional colleagues
from the acquisition of Atos Medical.
During the Strive25 period, Coloplast
will continue to grow and to attract and
retain people in all regions.
We want to foster a culture where every
individual feels engaged and is
empowered to make decisions. In
addition, and as part of our leadership
promise, we continue to create an
inclusive workplace.
Expanding our
Leadership promise
During 2021/22, we have continued to
make our leadership promise come alive
by building our leaders’ capabilities. We
have built a leadership programme for
our global production and launched a
‘Leadership Injections’ initiative to ignite
more cross-functional collaboration. We
also continue to run our global talent
programmes and our new global
graduate programme Coloplast Strive.
Besides our global programmes, we
believe in and develop our employees
and leaders individually through
targeted development plans to secure a
strong leadership pipeline. This year,
85% of critical managerial positions
were filled by internal candidates,
exceeding our 67% aspration.
Talent for the future
Today’s talent marketplace is more
competitive than ever. We focus
increasingly on how to position
Coloplast as an attractive employer, and
how to best identify, attract and recruit
future global and local talent.
Employee engagement
Employee engagement is a key
indicator of employees’ well-being. The
result of Coloplast’s engagement survey
is shared with local management who
act on key areas to maintain high
engagement levels. Coloplast upholds
our engagement score of 8.2 in
2021/22 with a response rate of 90%.
This score is above the healthcare
industry benchmark.
Employee turnover
The voluntary turnover level in 2021/22
was 10.6%, which is comparable with
2020/21 levels and pre-COVID-19
levels.
People and culture
Key figures
14,572
Employees at
year-end (FTEs)
8.2 of 10
employee
engagement score
compared to 8.2 in 2020/21
10.6%
voluntary
employee turnover
in 2021/22
compared to 10.1% in 2020/21
2.4 ppm
lost time injury
frequency
compared to 2.2 ppm in
2020/21
FINANCIAL RESULTS • SUSTAINABILITY
45
Coloplast is committed to building and
sustaining an inclusive culture that
offers equal opportunities and leverages
diversity at all levels. We have integrated
inclusion and diversity in all people
processes, such as attraction and
recruitment, performance and
development, succession and
engagement survey.
Inclusive workplace
environment
Enabling employees to bring their
differences to work and fulfil their
potential because of – not despite –
their differences is key to Coloplast. We
prohibit all discrimination or harassment
based in gender identity, age, race,
ethnicity, nationality, sexual orientation,
religious belief, social and economic
background, physical or mental ability.
This is formalised in our policies on
Inclusion and Diversity, Anti-Harassment
and Anti-Discrimination, and Anti-
Retaliation are available on our website.
Diverse teams
We believe that diversity in teams leads
to better innovation, performance and
decisions. We lead and drive diversity
through teams and strive to ensure a
healthy balance of gender, generation
and nationality in each team. We track
and monitor the mix of diversity in all
teams at Director level and above. Our
ambition is to reach a share of 75%
diverse teams before 2025 through
natural attrition. We have seen a rise in
the share of diverse teams from 50% to
55%.
Along with this, to ensure racial and
ethnic equity, we offer unconscious bias
training broadly and inclusive leadership
training to our leaders. This year we
have added further to our Employee
Resource Groups (ERGs) – voluntary,
employee-led groups driven by highly
passionate individuals, which set up
educational events, social discussion etc.
to raise awareness of inclusion and
diversity topics.
Gender representation
in management
Coloplast continues to track and
monitor progress on gender
representation at all levels. Coloplast is
committed to a target of 40/60 gender
distribution in management and on the
Board of Directors by 2030. As of
2021/22, 45% of all managers are
female. Looking at senior leadership*
alone, the representation of females is
21% in 2021/22. However, we are on
target with a 40/60 split at Director
level, indicating a strengthened female
leadership pipeline.
To ensure progress on gender
representation, Coloplast has
implemented initiatives including
monitoring the diversity in our
succession pipelines and talent pools, a
global recruitment process that
mitigates biases and ensures diversity in
all our recruitments, and engagement in
diversity related events, boards and
partnerships globally.
Inclusion and diversity
Gender
composition of our
people managers
Share of female
senior leaders*
Diversity at team
level
* Senior leadership comprising Vice
Presidents, Senior Vice Presidents
and the Executive Leadership Team.
45%
of leaders are
female (2021/22)
40%
21%
2030 ambition 2021/22
75%
55%
2025 ambition 2021/22
RISK MANAGEMENT
How we manage the risks of doing business
46
Risk reporting process
and governance
The management of the individual
business units and group functions is
responsible for identifying, assessing,
and managing risks in their specific parts
of the organisation. The most significant
risks to our business over a five-year
time-horizon are reported quarterly to
Group Risk Management. The risk
reporting process now includes climate-
related risks, however, climate-related
risks usually have a longer time-horizon
than other risks (more than five years).
Following the acquisition, Atos Medical
and Tracoe Group have been integrated
into the risk reporting process.
The risk reporting process and
supporting interviews form the basis of
the quarterly risk update submitted by
the CFO to the Executive Leadership
Team and the Board of Directors.
The Executive Leadership Team is
responsible for defining Coloplast’s
overall risk profile, and for setting
standards for risk taking and for aligning
it with the overall strategies and policies.
The Executive Leadership Team is also
responsible for launching and approving
risk treatment plans and activities to
address the most significant risks.
The Board of Directors perform risk
oversight, monitors the overall risk
landscape and reviews, on a quarterly
basis, the conclusions and
recommendations submitted by the
Executive Leadership Team.
The effectiveness of the risk reporting
process is regularly monitored by the
CFO together with the Board of
Directors, and the overall process is
followed by the Audit Committee on an
ongoing basis. Our aim is to have a
culture that manages risks well and not
just a strong process.
In our risk reporting, we have identified
a range of principal risks believed to
have the potential to significantly
threaten and adversely impact the
Group’s business model, strategy, and
future performance.
Those principal risks are categorised
and described on the following pages,
along with examples of actions taken to
mitigate them. Each risk is linked to one
or more of the themes of Coloplast’s
strategy Strive25.
If material change has occurred to the
assessment of a risk compared to last
year, this is elaborated in the following
sections.
The current risk landscape
RISK MANAGEMENT
How we manage the risks of doing business
Pricing and
reimbursement
Information security
Legal and compliance
Product quality and
safety
Production and business
continuity
Product innovation and
development
PR
P
QS
PBC
PID
PBC
PR
IS
LC
PQS
PID
LC
IS
RISK MANAGEMENT
47
Pricing and reimbursement
Description
A large part of Coloplast’s products is
sold in markets that are subsidised and
eligible for reimbursement from local
healthcare authorities. As a result, the
prices of Coloplast’s products are
influenced by the economic and political
developments in natio
nal and regional
markets, budgetary constraints of
governments and healthcare reforms,
bargaining power of large wholesalers
and distributors, as well as Coloplast’s
ability to convince buyers of the
economic value of its products based on
clinical evidenc
e, costs, and patient
outcomes.
In 2021/22 we have experienced higher
prices on energy, raw materials,
logistics, machinery, and wage inflation,
and with a somewhat limited possibility
to offset negative effects through price
increases and
negotiations with
customers, the likelihood of this risk has
increased.
Risk examples
Lower reimbursements and increasing
price pressure due to healthcare and
price reforms.
No bigger healthcare reforms are
currently expected for the next fiscal
year 20
22/23, and global price
development
remain positive in the
short term. However, in the medium to
long
-term our expectation is a negative
price impact of
-1%.
Lack of or inadequate clinical evidence
to support reimbursement levels.
Global, regional, or l
ocal political
instability, emerging geopolitical drivers
of risk, and economic matters, such as
interest rate, inflation, or currency rate
fluctuations.
Risk response
Monitoring markets and sales
developments, economic and political
developments, and cha
nges to public
sector guidelines and reimbursement
schemes.
Interaction with healthcare authorities,
patient associations and industry
associations to try to prevent, postpone
or minimise the impact.
Financial risk management, including
hedging in acco
rdance with Coloplast’s
financial mandate (see note 21
-23 to
the financial statements).
COVID-19 pandemic risks
The COVID-19 pandemic has continued to cause disruptions globally in 2021/22. Coloplast carefully monitors the effects of the
pandemic in the short, medium, and long-term, and at current the pandemic is mainly impacting our Chinese business.
Global guidelines and health plans are regularly being reassessed to minimize any negative effect on the Group and to be prepared in
case of future pandemics. Our focus remains to ensure availability for our users while at the same time keeping our people safe and
maintain business continuity.
RISK MANAGEMENT
How we manage the risks of doing business
48
Information security
Description
Coloplast operates in a dynamic
information risk environment with
regulatory and legislative data
compliance obligations and depend on a
wide range of information technology
systems, operational technology
systems, people, and suppliers to
manage the busin
ess. The company
processes highly confidential
information and legally protected
personal health information and the
product portfolio include digitally
connected products, like Heylo.
Coloplast follows the ISO 27001 to
constantly drive improvement and
validate performance of the Information
Security Management System through
audits and risk management.
All sites
within the ISO 27001 certification scope
are internally audited annually in
addition to external audits as required
under the certification.
In
last year’s Annual Report, the Cyber
risk assessment displayed in the risk
matrix only reflected the risk of
cyberattacks, now the risk assessment
includes all Information Security related
risks, and the assessment is updated
accordingly.
Risk examples
D
isruption to information technology
and operation technology systems, such
as cyber
-attacks, human error, or
infrastructure failure resulting in
business disruption or data
confidentiality incidents like loss of
intellectual property or data
privacy
breach. An intentional cyberattack or an
unintentional human error can in a
worst
-case scenario affect business
operations and delivery performance.
Like previous years, we did not
experience any material impact to our
business from cyberattacks in 2021/22.
Essential Coloplast business and support
processes are reliant on third
-party
suppliers.
Reduced or compromised
availability and reliability of supplier's
services, systems, or materials would
threaten operations and business
continuity.
In addition, some suppliers
have access to Coloplast information,
which
would be collateral damage if a
supplier is breached or experiences a
cyberattack.
Risk responses
Implemented a robust Information
Security risk management process to
identify, assess, report, and
mitigate
risks with a direct link to the quarterly
Group Risk Management process. The
process covers four key areas: threats,
compliance and regulations, business
interactions and relations, and
employee conduct (as elaborated
below). All high residual ris
ks require a
risk treatment plan that is monitored
and communicated to the Chief
Information Officer on a quarterly basis.
Confidence in our internal organi
s
ational
and technical controls are further
enhanced by external security
assessments.
Our ambition is to continuously raise our
information security maturity in parallel
to ensuring effective supplier due
diligence and resilient capabilities within
IT service and business continuity.
Current information security threats relevant to Coloplast
These key threats are actively managed in our Information Security risk management process:
• Social engineering enables phishing, CEO fraud, and other cyberattack methods • Privileged access abuse from an intentional insider
threat that can include data exfiltration to competitors • Supplier security vulnerabilities that can spill over and impact operations •
Compliance with national cybersecurity and data privacy laws challenge efficient and scalable IT system management • Russia-
Ukrainian War increases possibility of collateral damage from cyber hacktivists and cyber warfare • System intrusion occurs from
phishing or other attack vectors • Human error that impacts data integrity and availability • Malware / Ransomware is considered the
biggest cyber threat; continues to be a lucrative business for cybercriminal organisations.
RISK MANAGEMENT
49
Legal and compliance
Description
Coloplast operates in a heavily
regulated industry that is subject to
various laws,
regulations and industry
standards across geographies and
business areas. The different legal
environments can be unpredictable and
politically motivated, and as a market
leader, Coloplast could face legal risks
at any given time. In addition, there is
gro
wing public awareness of business
ethics, enforcement of anti
-corruption
laws and protection of personal data. It
is at the heart of Coloplast’s culture to
act with respect and responsibility and
to comply with the laws and regulations.
Despite these effor
ts, Coloplast
recognises that mistakes may happen
when people are involved and,
therefore, takes relevant action should a
situation arise.
Risk examples
Violations of anti
-corruption laws and
non
-compliance with Coloplast’s own
and the industry’s codes of
conduct
could damage Coloplast’s reputation
and involve a risk of monetary fines,
sanctions, or inability to continue to
manufacture products.
Lawsuits filed by competitors or
customers or investigations by
authorities into certain business
practices cou
ld have a negative
reputational and financial impact
Risk responses
Ensuring that all employees including
externals receive training in Coloplast’s
Code of Conduct as formulated in our
Business Ethical Standards and in our IT
policies under Coloplast’s IT
Awareness
programme.
Ensuring that business partners are
aware of Coloplast’s ethical standards
including our codes of conduct for
Distributors and Suppliers and that they
work with us to continuously maintain
and develop compliance practices.
We have
established an independent
and confidential ethics hotline for
reporting of unethical situations,
violations, and misconduct.
Product quality and safety
Description
Coloplast is committed to ensuring the
quality of its products and the safety of
its
users, including organising the
security of personal data. All Coloplast
products must comply with the medical
device directives and legislation imposed
by local healthcare authorities, such as
the US Food and Drug Administration
(FDA) and the new EU Medic
al Device
Regulation (MDR).
Coloplast passed the first MDR key
milestone in May 2021 and are working
towards having all products certified in
accordance with the transition period
authorised by MDR (by May 2024).
Risk examples
Loss of licences to
sell or manufacture
due to non
-compliance with new laws
and regulations on medical devices in
force from time to time.
Defects and omissions and critical
product quality and safety issues in
product design and manufacturing that
could disrupt operations,
sales, lead to
product recalls, bodily injury, and
product liability claims.
Non
-compliance with data protection
legislation or personal data leaks that
could lead to monetary fines and
damage Coloplast’s reputation.
Risk responses
Continuous investment in the
development and improvement of
control processes, quality procedures,
and supporting information
technologies, from the design phase to
post
-market surveillance.
Monitoring legislation and market
standards to ensure that any
amendments or changes are
incorporated into internal procedures.
Certification of our Quality Management
Systems to national and international
standards and carrying out internal and
external audits.
RISK MANAGEMENT
How we manage the risks of doing business
50
Production and business continuity
Description
Coloplast operates facilities all over the
world, the most recent addition being
Costa Rica, the two manufacturing
facilities of Atos Medical in Sweden and
Tracoe Group in Germany. Most
production takes place at central
facilities and in some c
ases, Coloplast
purchases raw materials, components
used in production, and finished
products from sole suppliers for reasons
of availability, quality assurance and
cost effectiveness.
The current global macroeconomic
trends like high
inflation, disrupted
supply chains, weakening consumer
sentiment, and tightening monetary
policies, and geopolitical drivers of risk
like the war in Ukraine, are challenging
the operating environment, and have
resulted in an increased level of
challenges s
hort-term. Coloplast have
risk responses in place (as described to
the right). In addition, we keep an
increased focus on the timely
communication of forecasts and orders
and on execution of improvement
projects in the Global Operations Plan 5.
Risk examples
Major disruption at a manufacturing or
distribution facility due to natural
disasters or other emergencies, such as
natural catastrophe, pandemics, and fire
may disrupt Coloplast’s ability to
manufacture and distribute its products.
A major disrupti
on of the supply chain
due to shortfalls in delivery and quality
issues, force majeure situations, change
in market conditions, strikes, political
unrest or other events beyond
Coloplast’s control, which could result in,
price increases, inability to sourc
e
critical raw materials, components, and
finished products, and the disruption of
the supply to customers.
Risk responses
Implemented emergency response plans
and contingency plans, keeping critical
processes and workflows physically
separated and havin
g all the relevant
facilities certified to the ‘highly
-
protected risk’ industry standards.
Identified high
-risk suppliers and
prepared contingency plans, including
maintaining multiple inventories,
collaboration with selected suppliers to
mitigate physica
l risks at their facilities,
dual supplier qualification for critical raw
materials and component, and
qualification of substitute materials
where applicable.
Built up additional inventory as a
contingency for potential fluctuations in
demand or supply c
hain disruptions.
Re
-visited worst-case scenarios for
short
-term disruptions to utility supplies
like electricity for key facilities in Europe
and updated contingency plans
accordingly.
RISK MANAGEMENT
51
Product innovation and development
Description
It is
essential that Coloplast maintains a
competitive and innovative product
pipeline that meets the needs of the
users. To achieve this, Coloplast relies
on its ability to interact with end users
and healthcare professionals, to protect
intellectual property a
gainst
infringement from competitors and to
understand the surgical and medical
trends that may impact or limit sales.
Risk example
Medical and technological innovations
disrupting Coloplast’s core business.
Lack of innovation increasingly resulting
in a commoditisation trend, allowing the
entry of low
-cost competitors,
potentially increasing price pressures
and diminishing clinical differentiation of
the products on the market and
resulting in a loss of market share.
Infringement of intell
ectual property
rights may reduce Coloplast’s
competitive advantages and negatively
impact sales.
Risk response
Investing in new innovative growth
initiatives for the purpose of developing
superior and clinically differentiated
products, such as our clini
cal
performance programme.
Patenting to prevent competitors from
copying Coloplast products or from
producing technical equivalent
alternatives.
Monitoring surgical and medical
developments and disruptive
technologies that may impact the
various business
areas.
Climate change
Description
The industry which Coloplast is in, is not
considered to have a high exposure to
climate change risks
, and therefore not
material for Coloplasts risk landscape
.
However, a preliminary risk assessment
performed by
internal working groups
revealed potential long
-term exposures
to both physical and transitional climate
change risks within our supply chain and
manufacturing
, in accordance with the
Task Force on Climate
-
related Financial
Disclosures framework (TCFD)
.
Coloplast is committed to report step
-
by
-step according to the
recommendations of the
TCFD
framework and has signed the business
ambition for 1.5°C aligning with the
Paris agreement, and our carbon
emission reduction targets are approved
by the Science Bas
ed Target initiative.
Risk example
Transitional risks such as increased
demand for more sustainable products
and packaging and increased legal and
compliance requirements with focus on
ESG in our supply chain.
Physical climate risks such as extreme
weath
er patterns affecting our supply
chain and rising sea water levels at own
facilities.
Recent internal assessment has not
found that Coloplast facilities have
increased exposure to physical risks due
to more frequent and severe weather
systems and changin
g climate
conditions in the short
- and medium-
term. However, a more detailed analysis
will be carried out in 2022/23.
Risk response
A sustainability strategy that is an
integral part of our corporate strategy,
Strive25
, and a sustainability steering
committee governed by the Executive
Leadership Team, ensuring progress on
the strategy.
To increase the internal focus on actions
to reduce climate change, a
performance target linked to climate
-
related criteria has been implemented in
the remuneration for Executive
Leadership Team in 2021.
The risk reporting process is adjusted to
accommod
ate for reporting on climate-
related risks, which usually have a
longer time horizon (more than five
years
and therefore not material for
Coloplasts risk landscape
) than other
risks.
GOVERNANCE AND OWNERSHIP
Corporate governance
52
Governance structure
Coloplast has a two-tier management
structure comprised of Board of
Directors and the Executive Leadership
Team. There are no overlapping
members.
The Board of Directors determines the
Group's objectives, strategies and
overall action plans. On behalf of the
shareholders, the Board of Directors
supervises the company's organisation,
day-to-day management and results.
The Board of Directors also sets
guidelines for the Executive Leadership
Team’s execution of the day-to-day
management of the company and for
assigning tasks among the individual
members of the Executive Leadership
Team.
The Board of Directors and the
Executive Leadership Team further
assess the company’s business
processes, the definition and
implementation of the company’s
purpose, the organisation, stakeholder
relations, strategy, risks, business
objectives and controls.
A set of rules of procedure governs the
work of Coloplast's Board of Directors.
These rules are reviewed annually by
the Board of Directors and updated as
necessary. The rules set out the
guidelines for the activities of the Board
of Directors.
Six members of the Board of Directors
are elected at the general meeting and
three members of the Board of
Directors are elected by the employees.
Four out of six shareholder-elected
members are considered to be
independent in accordance with the
Danish corporate governance
recommendations.
Nine board meetings were held in the
2021/22 financial year, of which two
were extraordinary meetings and one
was a strategy meeting.
Annette Brüls was elected as new board
member at the annual general meeting
held on 2 December 2021 replacing
Birgitte Nielsen.
GOVERNANCE AND OWNERSHIP
Corporate governance
Corporate governance at Coloplast
OVERVIEW OF BOARD MEMBERS
Board member
Audit
Comm.
Rem. &
Nomin.
Comm.
Indepen
-
den
t
Nat
ionality
Gender
Board
tenure
Election
period
Board meetings attended
3)
Lars Rasmussen
,
Chairman
1)
No
Danish
Male
4
years
1 year
Niels Peter Louis
-Hansen,
Deputy Chairman
1)
No
Danish
Male
5
4 years
1 year
Marianne Wiinholt
1)
Yes
Norwegian
Fem
ale
2
years
1 year
Annette Brüls
1) 2)
Yes
Belgian
Female
1
year
1 year
Jette Nygaard
-Andersen
1)
Yes
Danish
Female
7
years
1 year
Carsten
Hellmann
1)
Yes
Danish
Male
5
years
1 year
Thomas Barfod
3)
No
Danish
Male
1
6 years
4 years
Roland V. Pedersen
3)
No
Danish
Male
4
years
4 years
Nikolaj Kyhe Gundersen
3)
No
Danish
Male
4
years
4 years
1)
Shareholder-elected board member.
2)
Birgitte Nielsen attended three out of three board meetings before she left the Board of Directors at the Annual General Meeting held on 2 December 2021.
3
)
Employee-elected board member.
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
53
Committee structure
The Board of Directors has established
two committees: an Audit Committee
and a Remuneration and Nomination
Committee.
Four Audit Committee meetings were
held in the 2021/22 financial year.
Four Remuneration and Nomination
Committee meetings were held in the
2021/22 financial year.
AUDIT COMMITTEE
Committee member
Meetings
attended
1)
Marianne Wiinholt,
Chairman
Lars Rasmussen
Birgitte Nielsen
1)
Carsten Hellmann
REMUNERATION
AND NOMINATION COMMITTEE
Committee member
Meetings attended
Lars Rasmussen
, Chairman
Niels Peter
Louis-Hansen
Jette Nygaard
-Andersen
Annette Brüls
1)
Birgitte Nielsen attended one out of one Audit Committee meeting before she left the Board of Directors
on the Annual General Meeting 2 December 202
1.
Activities and responsibilities of the
Audit Committee
Activities and responsibilities of the
Remuneration and Nomination Committee
The
Audit Committee is, among others, responsible for the
oversight of
:
•
The financial reporting and associated processes, including the
statutory audit of the financial statements.
•
The company’s internal control systems and risk management
systems, including insurance matters.
•
Review of the Group’s IT security and the auditors’ annual
IT audit.
•
The independence of the auditors, including the provision of
non-audit services to the Group.
•
The procedure of selecting and making recommendation to the
Board of Directors in respect of the appointment of auditors.
•
Activities reported through the Coloplast Ethics Hotline.
In the 202
1/22 financial year, the main activities have been:
•
Overseeing Atos integration.
•
Selecting new audit firm to be elected as of FY 2023/24.
•
Evaluating the provision relating to the mesh litigation and Atos
US billing compliance.
•
Overseeing corporate bond issue.
•
Monitoring progress on sustainability targets and reporting.
The
Remuneration and Nomination Committee is, among
others,
responsible for the oversight of:
•
The competence profile and composition of the Board of
Directors.
•
Nomination of members to the Board of Directors and the
Board committees.
•
The leadership pipelines.
•
The remuneration policy for the members of the Board of
Directors and the Executive Management
and other tasks on an
ad hoc basis as specifically determined by the Board of
Directors.
In
the 2021/22 financial year, the main activities have been:
•
Redesigning process for on-boarding and off-boarding new
board members.
•
Reviewing governing bodies and ensure proper succession
planning.
•
Conducting the annual board self-assessment.
•
Alignment of the incentive structure in Atos.
•
Evaluation of remuneration structure in light of geopolitical
changes.
GOVERNANCE AND OWNERSHIP
Corporate governance
54
Assessment of the work
performed by the Board
of Directors
Every year, the Board of Directors
conducts a self-assessment. Based on
the result of this assessment, the
organisation and efficiency of the Board
of Directors' work are discussed at a
Board meeting.
In 2022, the annual self-assessment of
the Board of Directors was performed
with external assistance as the Board of
Directors has decided that the self-
assessment will be carried out with
external support every second year. The
self-assessment consisted of
conversations with each member of the
Board of Directors as well as each
member of the Executive Leadership
Team and a bespoke, online
questionnaire in which board members
as well as the Executive Leadership
Team participated anonymously.
The self-assessment shows that there is
an open and transparent dialogue
between the Board of Directors and the
Executive Leadership Team, and the
board committees serve as good
vehicles for framing the discussions in
the Board of Directors and ensure that
key risks are addressed.
Furthermore, the self-assessment shows
that the composition of the Board of
Directors, including relevant
competencies, to a large extent
matches what the Board of Directors
considers necessary to best perform its
tasks, such as finance, digital
transformation, customer experience,
commercialisation, sustainability,
industry knowledge, general
management, innovation, legal affairs
and acquisitions. Furthermore,
competencies related to the US market
is now explicitly represented in the
Board of Directors. However, over time
the Board would like to strengthen its
competences within Innovation.
During the past year, the Board of
Directors has spent time monitoring and
discussing the progress made on
Coloplast’s Strive25 strategy as well as
the company’s acquisition of Atos
Medical AB. Furthermore, the Board of
Directors has spent a significant amount
of time discussing and addressing
challenges caused by current world
events. Further, the board strategy days
were held in the US where the board
conducted a deep dive of the US
business.
Clear governance and diverse board profiles ensure that the Board of
Directors can operate efficiently
and support the company’s strategy.
4 out of 6
shareholder-
elected members
are independent
Independent
Not independent
Gender
composition of
shareholder-
elected members
Female
Male
4/6
are independent
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
55
Remuneration of the
Board of Directors
and the Executive
Management
At the Coloplast Annual General
Meeting held on 2 December 2021, the
shareholders adopted an updated
Remuneration Policy for Coloplast,
which had been prepared by the Board
of Directors. The Remuneration Policy is
available on the company’s website.
Coloplast has also prepared a
Remuneration Report detailing, among
other things, the remuneration to the
Board of Directors and the Executive
Management which complies with
Section 139(b) of the Danish Companies
Act. The Remuneration Report was
presented and adopted at the
Annual General Meeting held on
2 December 2021.
Recommendations on
Corporate governance
For the financial year 2021/22,
Coloplast is reporting on the new
recommendations on corporate
governance issued by the Committee on
Corporate Governance applying to
financial years starting 1 January 2021
or thereafter. Reporting on these
recommendations is also required by
Supplement A – Nasdaq Copenhagen to
Nasdaq’s Nordic Main Market Rulebook
for Issuers of Shares. The Board of
Directors reviews the recommendations
in force on a regular basis and at least
once a year. The Board of Directors and
the Executive Leadership Team share
the committee's views and generally
complies the recommendations.
The recommendations consist of 40
individual recommendations. Coloplast
complies fully with 38 recommendations
corresponding to 95%.
Coloplast’s position on each of the
recommendations as well as a
description of the internal control and risk
management system relating to financial
reporting can be found in the Corporate
Governance Report which is prepared
pursuant to Section 107(b) of the Danish
Financial Statements Act.
Data ethics policy
Download the
Remuneration
Report
www.coloplast.com/remuneration
-
reports/
Download the Corporate
Governance
Report
www.coloplast.com/corporate
-
governance/
GOVERNANCE AND OWNERSHIP
56
The Board of Directors
Meet our Board of Directors
Lars Rasmussen
Chairman of the
Board,
non
-independent
Born 1959. Lars Rasmussen has extensive
executive management and board
experience from international listed
companies in the med
-tech and pharma
industry. He possesses in
-depth knowledge
within
the commercialisation of innovation,
B2
B and B2C sales models and efficiency
improvements.
Other board
and management positions:
• H. Lundbeck A/S: Chairman of the
Board, Chairman of the
Remuneration and Nomination
Committee and member of the A
udit
Committee
• Danish Committee of Corporate
Governance: Chairman
• Danish Life Science Council:
Chairman
• University of Copenhagen: Board
member
J
oined the Board of Directors in 2018.
Niels Peter Louis
-Hansen
Deputy Chairman of the Board
,
non
-independent
Born 1947. Through decades of
board work,
Niels Peter Louis
-Hansen has gained in-dept
h
knowledge of the industries in which
Coloplast operates, its dynamics and key
players as well as deep insight into strategy
development. Furthermore, Niels Peter
Louis
-Hansen is a key contributor to
preserving the Coloplast
-culture.
Other board and management positions:
• Aage og Johanne Louis-Hansens
Fond: Chairman of the Board
• Aage og Johanne Louis-Hansen A/S:
Chairman of the Board
• N. P. Louis-Hansen ApS: CEO
• NPLH Property Investments ApS:
CEO
• NPLH Anpartsinvest ApS: CEO
J
oined the Board of Directors in 1968.
Annette Brüls
Board member, independent
Born 1971. Annette Brüls has considerable
executive management experience within
global medical device businesses. Annette
Brüls has
in-depth knowledge and
understanding of product development and
commercialisation within the med
-tech
industry and in particular in chronic disease
management, including digital services and
value
-based healthcare models .
Other board and
management positions:
• Medela AG: CEO
Joined the Board of Directors in 20
21.
See the full CVs of the Board of
Directors
on our website
https://www.coloplast.com/about
-
coloplast/management1/
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
57
Carsten Hellmann
Board member, independent
Born 1964. Carsten Hellmann has
considerable executive
management
experience and extensive experience in
product development and international
commerciali
sation within highly regulated
industries as well as M&A activities, including
post integration.
Other board and management positions:
• ALK-Abelló A/S: President & CEO
• Copenhagen Capacity: Board
member
• The Danish Chamber of Commerce:
Board member
Joined the Board of Directors in 2017
.
Jette Nygaard
-Andersen
Board member, independent
Born 1968. Jette
Nygaard-Andersen has
considerable executive management and
board experience within global med
-tech,
media
and entertainment, and digital growth
businesses. She has extensive experience
within business and marketing strategies,
digital transformation, opti
misation of
customer experience and engagement,
working with digital growth start
-
ups globally
and M&A activities, including post integration.
Other board and management positions:
• Entain plc: CEO & Executive Director
• BetMGM, LLC: Board member
Joined the Board of Directors in 2015
.
Marianne Wiinholt
Board member, independent
Born 1965. Marianne Wiinholt
has
considerable executive management
experience and extensive experience within
finance and accounting. Furthermore,
Marianne Wiinholt has considerable
knowledge and experience in leading, driving
and delivering a sustainability agenda on a
global scale.
Other board and management positions:
• WS Audiology A/S: CFO
• Widex A/S: Chairman of the Board
• Norsk Hydro ASA: Board member
and Chairman of the Audit
Committee
Joined the Board of Directors in 2020.
Thomas Barfod
Employee
-elected board member
Born
1970. Title: Team Manager.
Joined the Board of Directors in 2006.
Roland V. Pedersen
Employee
-elected board member
Born 1962. Title: Lead Negotiator.
Joined the Board of Directors in 2018.
Nikolaj Kyhe
Gundersen
Employee
-elected board member
Born 1969. Title: Skilled Precision Engineer.
Joined the Board of Directors in 2018.
GOVERNANCE AND OWNERSHIP
58
The Executive Leadership Team
Meet our Executive Leadership Team
Kristian Villumsen
President & CEO
With Coloplast since 2008.
Educational background:
MA Political Science, Aarhus University
MA in Public Policy, Harvard University
Kennedy School of Government
Other board positions:
Demant
A/S: Board member
and member of
the Audit Committee
Anders Lonning
-Skovgaard
Executive Vice President, CFO
With Coloplast since 2006.
Educational background:
MSc
Finance and Accounting, Aarhus
University
Allan Rasmussen
Executive Vice President, Global Operations
With Coloplast since 1992.
Educational background:
BPSE, IMD
E*MBA, Scandinavian International
Management Institute
BSc (Mech. Eng.), Technical University of
Denmark
Paul Marcun
Executive Vice President, Growth
With Coloplast since 2015.
Educational
background:
MBA in Corporate Finance
and Marketing,
Sydney University of Technology
Nicolai Buhl Andersen
Executive Vice President, Innovation
With Coloplast since 20
05.
Educational background:
MA in Economics
and Business, Copenhagen
Business School and Sophia University, Japan
Dorthe Rønnau
Senior Vice President, People
and Culture
With Coloplast since 20
22.
Educational background:
MSc in industrial engineering, University of
Copenhagen
MSc Psychology in
Organisations (MPO),
Roskilde University
Graduate diploma in Business Administration
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
59
Ownership and
shareholdings
The company had 53,712 shareholders
at the end of the financial year, which
was 4,052 more than last year.
Institutional investors based outside
Denmark held 37% of Coloplast's shares
on 30 September 2022, compared to
38% a year earlier. Registered
shareholders represented 96% of the
entire share capital.
Pursuant to the company's articles of
association, shares must be registered in
the name of the holder to carry voting
rights. Three shareholders have
reported to the company, pursuant to
section 55 of the Danish Companies Act
and section 38 of the Danish Capital
Markets Act, that at the date of this
annual report they held 5% or more of
the share capital or voting rights.
Residence
Ownership
share
Voting
rights
Shareholders with ownership or
voting rights of more than
5%
Niels Peter Louis
-Hansen¹⁾
Vedbæk
20.7% 41.1%
Aage og Johanne Louis
-Hansens A/S²⁾
Nivå
11.5% 15.2%
Benedicte Find
Humlebæk
3.7% 5.5%
¹
⁾ In addition to the personally held shares, Niels Peter Louis-
Hansen's wholly owned company
N. P. Louis
-Hansen ApS, has an additional 0.5% ownership representing 0.3% of the votes.
²
⁾ Wholly owned by Aage og Johanne Louis-Hansens Fond.
A
shares
'000 units
B shares
'000 units
Ownership
share
Voting
rights
Ownership structure of
Coloplast A/S
Holders of A shares and their
families
18,000
77,378
44% 68%
Danish institutions
- 13,314
6% 4%
Foreign
institutions - 79,625
37% 21%
Coloplast A/S³
⁾
- 3,693
2% 0%
Other shareholders
- 15,966
7% 4%
Non
-registered shareholders - 8,024
4% 0%
Total
18,000
198,000
100%
97%
³
⁾ The 3,692.876 shares held by Coloplast on 30 September 2022, equivalent to 2% of the
share capital, are treasury shares without voting rights.
A shares
'000 units
B shares
'000 units
Number of
insiders
Shares held by
management
Board of Directors, non
-independent directors 12,285
33,862
5
Board of Directors, independent directors
- 6
4
Executive Management
- 91
5
Total
12,285
33,959
14
GOVERNANCE AND OWNERSHIP
60
Share classes and
authorisations
Coloplast’s share capital is DKK 216
million divided into DKK 18 million A
shares and DKK 198 million B shares.
Each A and B share has a nominal value
of DKK 1.
Each A share entitles the holders to ten
votes and each B share entitles the
holders to one vote. The A shares are
non-negotiable instruments. The B
shares are negotiable instruments and
were listed on the Copenhagen Stock
Exchange (Nasdaq Copenhagen) in
1983. Any change of ownership or
pledging of A shares requires the consent
of the Board of Directors, whereas B
shares are freely negotiable.
The Board of Directors may increase the
company's share capital by a nominal
value of up to DKK 15 million in one or
more issues of B shares either with or
without pre-emption rights for existing
shareholders. The authorisation is valid
until and including 4 December 2023.
Moreover, the Board of Directors has
been authorised to acquire treasury
shares of up to 10% of the company's
share capital provided that the
company’s total holding of treasury
shares does not exceed 10% of the
company’s share capital at any time. The
highest and lowest amount to be paid for
the shares by the company is the price
applicable at the time of purchase +/-
10%. This authorisation is valid until and
including 4 December 2024.
At general meetings, matters are decided
by a simple majority of votes. Resolutions
to amend the company's articles of
association require that not less than half
of the share capital is represented and
that the resolution is adopted by not less
than two-thirds of the votes cast as well
as of the voting share capital represented
at the general meeting. The resolution
lapses if the above-mentioned share
capital is not represented, or if a
resolution is not adopted by two-thirds of
the votes cast. If a resolution is adopted
by two-thirds of the votes cast but
without at least half of the share capital
being represented, the Board of
Directors must convene a new
extraordinary general meeting within two
weeks.
If, at this meeting, the resolution is
adopted by not less than two-thirds of
the votes cast and of the voting share
capital represented, it will be passed
irrespective of the amount of the share
capital represented at the meeting.
In the event of a change of control in the
company resulting from a change of
ownership, issued share options will be
subject to accelerated vesting. No other
important agreements are in place that
would be affected in the event of a
change of control of the company
resulting from a takeover, and no special
agreements have been made between
the company, its management or
employees if their positions are
discontinued due to a change of
ownership. There are no special
provisions governing the election of
members to Coloplast's Board of
Directors.
Ownership and major shareholders
Open and
transparent
communication
Coloplast has established a policy for
communicating information to investors
and shareholders, under which the
Executive Leadership Team and the
Investor Relations team are in charge of
communications pursuant to guidelines
agreed with the Board of Directors. The
communication of information complies
with the rules laid down by Nasdaq,
comprising:
• Full-year and interim financial
statements and the annual report.
• Replies to enquiries from analysts,
investors and shareholders.
• Site visits by investors and analysts.
• Presentations to Danish and foreign
investors.
• Capital markets days for analysts and
investors.
• Conference calls in connection with
the release of financial statements.
• Dedicated investor relations section
on Coloplast’s corporate website.
Meet the Management event 2022
Coloplast hosted an event at the
headquarters in Humlebæk, Denmark
on 31 August with around 60 in-person
participants and around 200 virtual
participants. All material from the day is
available on our website under the
dedicated investor relations section.
61
Consolidated
financial
statements
CONSOLIDATED FINANCIAL STATEMENTS
62
Statement of comprehensive income
1 October – 30 September
DKK million
Note 2021/22 2020/21
Revenue
4 22,579 19,426
Production costs
5, 11, 12, 13 -7,050 -6,113
Gross profit
Distribution costs
5, 11, 12, 13 -6,797 -5,485
Administrative expenses
5, 11, 12, 13 -1,005 -762
Research and development costs
5, 11, 12, 13 -866 -755
Other operating income
Other operating expenses
-25 -29
Operating profit (EBIT) before special items
Special items
6 -471 -200
Operating profit (EBIT)
Financial income
7 119 137
Financial expenses
7 -431 -59
Profit before tax
Tax on profit for the year
8 -1,421 -1,408
Net
profit for the year 4,706 4,825
Remeasurements of defined benefit plans
18 75 -11
Tax on remeasurements of defined benefit plans
-19 3
Items that will not be reclassified to the income statement
Value
adjustment of hedging
Transferred to financial items
Tax effect of hedging
Currency adjustment of opening balances and other value adjustments relating to
subsidiaries
-409 -11
Tax effect of
currency adjustment, assets in foreign currency
-26 -1
Items that may be reclassified to the income statement
Total other comprehensive income
Total comprehensive income
DKK
Earnings per share (EPS)
9 22.14 22.67
Earnings per share (EPS), diluted
9 22.11 22.63
Statement of comprehensive income and cash flows
CONSOLIDATED FINANCIAL STATEMENTS
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • LIST OF NOTES • NOTES
63
Statement of cash flows
1 October – 30 September
DKK million
Note 2021/22 2020/21
Operating profit
Amortisation
Depreciation
Adjustment for other non
-cash operating items 24 56 -31
Changes in working capital
24 -849 -75
Interest received, etc.
Interest paid, etc.
-378 -81
Income tax paid
-1,115 -1,501
Cash flows from operating activities
Investments in intangible assets
-208 -1,047
Investments in land and buildings
-8 -8
Investments in plant and
machinery and other fixtures and fittings, tools and equipment
-41 -102
Investments in property, plant and equipment under construction
-878 -809
Property, plant and equipment sold
Investment in other investments
-2 -14
Acquisition of subsidiaries
32 -10,633 -97
Net sales/purchase of marketable securities
Cash flows from investing activities
-11,759 -2,011
Free cash flow
-6,660 3,279
Dividend to
shareholders
-4,041 -3,830
Acquisition of treasury shares
-500 -500
Sale of treasury shares and loss on exercised options
-119 306
Financing from shareholders
-4,660 -4,024
Repayment of lease liabilities
24 -239 -202
Financing through issuing long
-term bonds 24 16,367 -
Hedging gain
Drawdown on credit facilities
24 -5,398 1,050
Cash flows from financing activities
Net cash flows
-69 103
Cash and cash equivalents at 1 October
Value adjustment of cash and bank balances
Cash and cash equivalents, acquired operations
-2 2
Net cash flows
-69 103
Cash and cash equivalents at 30 September
25 414 448
CONSOLIDATED FINANCIAL STATEMENTS
64
Assets
At 30 September
DKK million
Note 2022 2021
Intangible assets
11 20,277 3,651
Property, plant and equipment
12 4,474 3,785
Right
-of-use assets 13 677 601
Other equity
investments
Deferred tax asset
14 674 743
Other receivables
16 31 26
Non
-current assets 26,184 8,847
Inventories
15 3,187 2,428
Trade receivables
16 3,940 3,212
Income tax
Other
receivables
Prepayments
Marketable securities
Cash and cash equivalents
Current assets
Assets
Balance sheet
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
65
Equity and liabilities
At 30 September
DKK million
Note 2022 2021
Share capital
Currency translation reserve
-910 -392
Reserve for hedging
Proposed ordinary dividend for the year
Retained earnings
Equity
9, 10 8,292 8,168
Provisions for pensions and similar liabilities
18 115 181
Provision for deferred tax
14 2,077 671
Other provisions
19 258 56
Bonds
20 16,359 -
Other payables
Lease liability
Prepayments
Non
-current liabilities 19,328 1,359
Provisions for pensions and similar liabilities
18 6 15
Other provisions
19 347 150
Other credit institutions
20 1,644 2,160
Trade payables
Income tax
Other payables
Lease liability
Prepayments
26 2 8
Current liabilities
Equity and liabilities
CONSOLIDATED FINANCIAL STATEMENTS
66
Notes to the consolidated financial statements
Statement of changes in equity, current year
At 30 September
Share capital Reserves
DKK million
A shares
B shares
Currency
translation
Hedging
Proposed
dividend
Retained
earnings
Total
2021/22
Equity at 1 October
Net profit for the year
Other comprehensive income
Total comprehensive income
Acquisition of treasury shares
Sale of treasury shares and loss on
exercised options
Share
-based payment - - - - - 51 51
Tax on share
-based payment, etc. - - - - - -50 -50
Interim
dividend paid out in respect of
2021/22
Dividend paid out in respect of
2020/21
Transactions with shareholders
Equity at 30
September 18 198 -910 415 3,185 5,386 8,292
Statement of changes in equity
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
67
Statement of changes in equity, last year
At 30 September
Share capital Reserves
DKK million
A shares
B shares
Currency
translation
Hedging
Proposed
dividend
Retained
earnings
Total
2020/21
Equity at 1 October
Net profit for the year
Other comprehensive income
Total comprehensive income
Acquisition of treasury shares
Sale of treasury shares and loss on
exercised options
Share
-based payment - - - - - 50 50
Tax on share
-based payment, etc. - - - - - 32 32
Interim dividend paid out in respect of
2020/21
Dividend paid out in respect of
2019/20
Transactions with
shareholders - - - - -3,830 -112 -3,942
Equity at 30 September
CONSOLIDATED FINANCIAL STATEMENTS
68
Notes to the consolidated financial statements
Key accounting policies
1 Basis of preparation
2 Changes in accounting policies
3 General accounting policies
Profit and loss
4 Segment information
5 Staff costs
6 Special items
7 Financial income and expenses
8 Tax on profit for the year
9 Earnings per share (EPS)
10 Dividend per share
Assets and liabilities
11 Intangible assets
12 Property, plant and equipment
13 Right-of-use assets
14 Deferred tax
15 Inventories
16 Trade receivables and other receivables
17 Share options
18 Provisions for pensions and similar obligations
19 Other provisions
20 Credit institutions
21 Financial instruments by category
22 Financial risks
23 Derivative financial instruments
Cash flows and credit facilities
24 Specifications of cash flow from operating
and financing activities
25 Cash and cash equivalents
Other disclosures
26 Public grants
27 Contingent liabilities and guarantees
28 Remuneration of the Board of Directors and
Executive Management
29 Related party transactions
30 Fees to auditors appointed by the Annual
General Meeting
31 Events occurring after the balance sheet date
32 Acquisitions
33 Company overview
34 Definitions of key ratios
Notes to the consolidated financial statements
List of notes
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
69
Note 1
Basis of preparation
The consolidated financial statements for 2021/2022 have been prepared in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the EU and additional disclosure requirements pursuant to the Danish Financial
Statements Act for Class D companies.
General information
The annual report has been prepared on the basis of the historical cost principle, modified in that certain financial assets and
liabilities are measured at fair value. Subsequent to initial recognition, the assets and liabilities are measured as described below
in respect of each individual item or in the relevant note.
Significant estimates and judgements
In connection with application of the accounting policies described, it may be necessary for Management to make estimates in
respect of the accounting items. The estimates and assumptions applied are based on historical experience and other factors
that Management considers reasonable under the circumstances, but which are inherently uncertain and unpredictable. Such
assumptions may be incomplete or inaccurate, and unexpected events or circumstances may arise. In addition, the company is
subject to risks and uncertainties that may cause actual outcomes to deviate from these estimates.
It may be necessary to change previous estimates as a result of changes to the assumptions on which the estimates were based
or due to new information or subsequent events.
A further description of the principal accounting estimates and judgements is provided in the relevant notes.
Management has made significant accounting estimates and judgements in respect of the following areas:
Area
Estimate/
judgement
Note
Risk of
impact and
degree of
estimation
Goodwill and other intangible assets
Estimate and
judgement
11
A
cquisitions of businesses
Estimate
11, 32
Inventories
Estimate
1
5
Deferred tax assets and uncertain tax
positions
Estimate
14
Provisions for litigation about transvaginal surgical mesh products
Estimate
6,
19
Other provisions
Estimate
19
CONSOLIDATED FINANCIAL STATEMENTS
70
Notes to the consolidated financial statements
Note 2
Changes in accounting policies
Effective from the 2021/22 financial year, the Coloplast Group has implemented all new, updated or amended international
financial reporting standards and interpretations (IFRSs) as issued by the IASB and IFRSs adopted by the EU that are effective
for the 2021/22 financial year.
Coloplast has made an assessment of the impact of the agenda decision in relation to Cloud Computing Arrangement. The
assessment showed that the agenda decision did not have an impact on the profit/loss statement or equity.
Further Coloplast has implemented the amendments to IFRS 7, IFRS 9 and IFRS 16 Interests Rate Benchmark Reform - Phase 2.
The amendments did not have an impact on recognition or measurement.
The implementation of new, updated or amended international financial reporting standards and interpretations (IFRSs and
IFRICs) did not, in all material respects, affect the financial statements.
New financial reporting standards to be adopted
New and amended standards are implemented when taking effect.
Reporting standards or interpretations which are not adopted by the EU have not been applied in this annual report.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
71
Note 3
General accounting policies
This section provides a summary of significant accounting policies, and other general accounting policies. A detailed description
of the accounting policies applied and the estimates made relative to each individual item is provided in relevant notes, such that
all information about a specific accounting item can be found there.
Foreign currency
The financial statement items of individual Group entities are measured in the currency used in the primary economic
environment in which the entity operates (functional currency). The consolidated financial statements are presented in Danish
kroner (DKK), which is the functional and presentation currency of the parent company. Other currencies are considered foreign
currencies.
Translation of foreign currencies
Transactions denominated in foreign currencies are translated into an entity’s functional currency at the exchange rate
prevailing at the transaction date.
Monetary items denominated in foreign currencies are translated at the exchange rate prevailing at the balance sheet date.
Exchange adjustments arising as the difference between exchange rates at the balance sheet date and exchange rates at the
transaction date of monetary items are recognised in the income statement as financial income or expenses.
On translation of entities with a functional currency other than DKK, balance sheet items are translated at the exchange rates at
the balance sheet date and income statement items are translated at the exchange rates at the transaction date. The resulting
exchange adjustments are taken directly to other comprehensive income.
The Argentinian economy has been considered a hyperinflation economy effective from 1 July 2018. Accordingly, the Group’s
Argentinian subsidiary is recognised in accordance with IAS 29. The subsidiary’s financial statements were inflation adjusted at a
retail price index increase of 73.9% (source: Bloomberg) prior to recognition in the consolidated financial statements. The
income statement and the balance sheet of the inflation-adjusted financial statements are included in the consolidated financial
statements at the exchange rate applying at the balance sheet date standing at 5.16.
Consolidation, business combinations and associates
The consolidated financial statements comprise the financial statements of Coloplast A/S (the parent company) and enterprises
(subsidiaries) controlled by the parent company. The parent company is considered to exercise control when it has power over
the relevant activities of the enterprise, is exposed or has rights to a variable return from the investment and has the ability to
affect those returns through its power.
The consolidated financial statements are prepared by aggregating the financial statements of the parent company and the
individual subsidiaries, all of which are prepared in accordance with the Group’s accounting policies. Intra-group transactions,
balances, dividends and unrealised gains and losses on transactions between Group companies are eliminated.
Enterprises, which are not subsidiaries but in which the Group holds at least 20% of the voting rights or otherwise exercise a
significant influence, are regarded as associates. The Group’s proportionate share of unrealised gains and losses on transactions
between the Coloplast Group and associates is eliminated.
Enterprises recently acquired or divested are included in the consolidation in the period in which the Coloplast Group has control
of the enterprise. Comparative figures are not restated to reflect acquisitions.
CONSOLIDATED FINANCIAL STATEMENTS
72
Notes to the consolidated financial statements
Note 3, continued
Acquisitions are accounted for using the purchase method, according to which the assets and liabilities and contingent liabilities
of enterprises acquired are measured at fair value at the date of acquisition.
Goodwill on the acquisition of subsidiaries or associates is calculated as the difference between the fair value of the
consideration and the fair value of the Group companies’ proportionate share of identifiable assets less liabilities and contingent
liabilities at the date of acquisition.
The consideration for an enterprise consists of the fair value of the agreed consideration for the acquired enterprise. If part of
the consideration is contingent on future events, such part is recognised at its fair value at the date of acquisition. Costs directly
attributable to business combinations are recognised directly in the income statement as special items when incurred.
In cases where the fair value of acquired identifiable assets, liabilities or contingent liabilities subsequently turns out to differ from
the values calculated at the date of acquisition, the calculation, including goodwill is adjusted until up to 12 months after the
date of acquisition. Subsequently, goodwill is not adjusted. Changes to the estimates of contingent consideration are generally
recognised in the income statement.
Goodwill arising in connection with the acquisition of subsidiaries is recognised in the balance sheet under intangible assets in the
consolidated financial statements and tested annually for impairment.
Revenue
Revenue comprises income from the sale of goods after deduction of any price reductions, quantity discounts or cash discounts.
Sales transactions are recognised in the income statement at the point in time when control of the goods is transferred to the
customer, and when the consideration is assessed to be collectible. Revenues from sales transactions are measured at the
transaction price to which Coloplast expects to be entitled.
Within all segments, revenues are typically recognised when the customer takes possession of the goods. Exceptions to this
comprise Interventional Urology revenues, as revenues from certain surgical products are generated from consignment sales as
well as the contract manufacturing business. Certain surgical products within Interventional Urology are always available at our
partner hospitals to ensure that all sizes and fits are always available. Revenues from consignment sales are recognised as the
goods are used (i.e. in surgery). Revenues from contract manufacturing business is recognised when the products are available
for delivery when this coincides with the transfer of control of the products.
Coloplast generates most of its sales through distributors that operate under various conditions and who for that reason require
varying sales agreements. Coloplast’s distributor agreements contain volume and product-specific rebates, which require data
management and monitoring of sales to individual distributors at the product level. In addition, the sales agreements contain
various right-of-product-return requirements.
Payment terms for trade receivables from customers depend on creditworthiness, customary business practices and contract
negotiations. Payment terms for some customers include a period of credit which commences when the products are shipped
while other customers are requested to pay in advance or provide appropriate collateral for the payment. Prepayments from
customers are recognised as revenue in the following period upon satisfying the performance obligations.
Variable considerations include volume and product-specific rebates which, for some markets, are accumulated and paid
annually or quarterly. Accruals for variable considerations are constrained by uncertainty of future events, such as the expected
volume of sales, and require significant estimate.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
73
Note 3, continued
Revenue is measured at the fair value of the agreed consideration. All discounts granted are recognised in revenue. An estimate
of expected returns is also recognised in revenue.
Coloplast applies the practical expedient in IFRS 15, para 63 associated with the determination of whether a significant financing
component exists for transactions where payment is expected in less than 12 months from the delivery of goods (transfer of
control).
Marketable securities
Marketable securities are part of a portfolio which is managed and measured on a fair value basis as per transaction date.
Adjustments to fair value is recognised through profit or loss as financial items.
Bonds forming part of repo transactions, i.e. the sale of bonds that are bought back at a later date remain classified as financial
assets in the balance sheet, while amounts received from repo transactions are recognised as repo debt. Returns on such bonds
are recognised under financials.
Cash flow statement
The consolidated cash flow statement, which is presented according to the indirect method, shows the Group’s cash flow from
operating, investing and financing activities as well as the Group’s cash and cash equivalents and short-term debt to credit
institutions at the beginning and end of the year. Cash and cash equivalents comprise cash and debt to credit institutions
recognised under current assets and current liabilities, respectively. Marketable securities include bonds with maturities of more
than three months and are recognised under investing activities.
Reporting under the ESEF Regulation
The Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) has
introduced a single electronic reporting format for the annual financial reports of issuers with securities listed on the EU
regulated markets.
The ESEF Regulation sets out the following main requirements: (1) Issuers shall draw up and disclose their annual financial
reports using the XHTML format; and (2) issuers that draw-up their primary consolidated financial statements in accordance
with IFRS as endorsed by the EU shall tag those consolidated financial statements using inline eXtensible Business Reporting
Language (iXBRL) and with effect from the 2022 annual report block-tag the notes to the consolidated financial statements.
The combination of the XHTML format with the iXBRL tags makes the annual financial reports both human-readable and
machine-readable, thus enhancing accessibility, analysis and comparability of the information included in the annual financial
reports.
iXBRL tags shall comply with the ESEF taxonomy, which is included in the ESEF Regulation and developed based on the IFRS
taxonomy published by the IFRS Foundation.
As part of the tagging process financial statement line items are marked up to elements in the ESEF taxonomy. If a financial
statement line item is not defined in the ESEF taxonomy, an extension to the taxonomy is created. Extensions have to be
anchored to elements in the ESEF taxonomy, except for extensions which are subtotals.
The annual report submitted to the Danish Financial Supervisory Authority (The Officially Appointed Mechanisms) consists of the
XHTML document together with some technical files all included in a ZIP file named Coloplast-2022-09-30-en.ZIP.
CONSOLIDATED FINANCIAL STATEMENTS
74
Notes to the consolidated financial statements
Note 4
Segment information
Segmentation of the income statement
The operating segment Chronic Care covers the sale of ostomy care products and continence care products. The operating
segment Interventional Urology covers the sale of urological products, including disposable products, as well as R&D activities.
The operating segment Wound and Skin Care covers the sale of wound and skin care products and the operating segment
Voice and Respiratory Care covers the sale of laryngectomy and tracheostomy products, as well as R&D activities. The
reporting segments are also Chronic Care, Interventional Urology, Wound and Skin Care and Voice and Respiratory Care. The
segmentation reflects the structure of reporting to the Executive Leadership Team.
The shared/non-allocated comprises support functions (production units and staff functions) and eliminations, as these functions
do not generate revenue. While the costs of R&D for Interventional Urology
and Voice and Respiratory Care are included in the
segment operating profit/loss for that segment, R&D activities for Chronic Care and Wound and Skin Care are shared functions
which are included in shared/non-allocated. Financial items and income tax are not allocated to the operating segments. The
shared/non-allocated costs also include PPA amortisation expenditures related to Voice and Respiratory Care.
Geographic information
revenue in 2020/21 and 2021/22.
DKK million
2021/22 2020/21
Specification of revenue representing over 10% of the Group’s revenue
by customer location including
Denmark
US
4,269 3,639
UK
3,086 2,836
France
2,462 2,415
Denmark
302 249
Other
12,460 10,287
Total
22,579 19,426
Specification of non
-current assets¹⁾ by location of the subsidiary
Denmark
4,239 3,983
Sweden
15,119 -
Hungary
1,430 1,491
Other
4,640 2,563
Total
25,428 8,037
¹
⁾ Non-current assets by location consist of intangible assets and property plant and equipment.
Notes to the consolidated financial statements
Accounting policies
The operating segments are defined on the basis of the monthly reporting to the Executive Leadership Team, which is considered the
chief operating decision maker, and the management structure. Reporting to Management is based on four operating segments:
Chronic Care, Interventional Urology, Wound and Skin Care and Voice and Respiratory Care.
Management does not receive reporting on assets and liabilities by reporting segments. Accordingly, the reporting segments are not
measured in this respect, nor do we allocate resources on this background.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
75
Note 4, continued
DKK million
Chronic Care
Interventional
Urology
Wound and
Skin Care
Voice and
Respiratory
Care¹⁾
Total
2021/22
Segment revenue:
Ostomy Care 8,620
- - - 8,620
Continence Care 7,643
- - - 7,643
Interventional Urology - 2,424 - - 2,424
Wound and Skin Care - - 2,689
- 2,689
Voice and Respiratory Care - - - 1,203
1,203
External revenue as per the Statement of
comprehensive income
16,263
2,424 2,689
1,203
22,579
Costs allocated to
segment -6,677
-1,564 -1,600
-820
-10,661
Segment operating profit/loss
9,586
860 1,089
383
11,918
Shared/non
-allocated
-5,008
Special items not included in segment operating profit/loss (see note 6 to the
financial statements)
-471
Operating profit before tax (EBIT) as per the Statement of comprehensive income
6,439
Net financials
-312
Tax on profit/loss for the year
-1,421
Profit/loss for the year as per the
Statement of comprehensive income
4,706
¹
⁾ Only eight months impact in 2021/22.
DKK million
Chronic Care
Interventional
Urology
Wound and
Skin Care
Voice and
Respiratory
Care Total
2020/21
Segment revenue:
Ostomy Care 7,841
- - - 7,841
Continence Care 7,003
- - - 7,003
Interventional Urology - 2,097 - - 2,097
Wound and Skin Care - - 2,485
- 2,485
Voice and Respiratory Care - - - - -
External revenue as per the Statement of
comprehensive income
14,844
2,097 2,485
- 19,426
Costs allocated to segment
-6,070
-1,279 -1,456
- -8,805
Segment operating profit/loss
8,774
818 1,029
- 10,621
Shared/non
-allocated
-4,266
Special items not included in segment operating profit/loss (see note 6 to the financial statements)
-200
Operating profit before tax (EBIT) as per the Statement of comprehensive income
6,155
Net
financials
78
Tax on profit/loss for the year
-1,408
Profit/loss for the year as per the Statement of comprehensive income
4,825
Management reviews each operating segment separately, applying their market contributions to earnings and allocating
resources on that basis. The market contribution is defined as external revenue less the sum of direct production costs,
distribution, sales and marketing costs and administrative expenses. Costs are allocated directly to segments. Certain immaterial
indirect costs are allocated systematically to the shared/non-allocated and the reporting segments.
CONSOLIDATED FINANCIAL STATEMENTS
76
Notes to the consolidated financial statements
Note 5
Staff costs
DKK million
2021/22 2020/21
Specification of staff costs recognised in the financial year
Salaries, wages and directors' remuneration¹
⁾ 5,684 4,755
Pension costs
- defined contribution plans (note 18) 359 320
Pension costs
- defined benefit plans (note 18) 12 13
Other social security costs
731 525
Total
6,786 5,613
Staff costs allocated to functions
Production costs
1,448 1,253
Distribution costs
4,139 3,468
Administrative expenses
662 470
Research and development costs
486 422
Special items
51 -
Total
6,786 5,613
Average number of employees, FTEs
Number of employees at 30
September, FTEs 14,572 12,728
Number of employees at 30 September, headcount
14,783 12,874
¹
⁾ Including share based payment. See note 17 to the financial statements.
See note 28 to the financial statements for information on the Executive Management's and the Board of Directors'
remuneration.
Note 6
Special items
Notes to the consolidated financial statements
Accounting policies
Staff costs are recognised in the financial year in which the staff performed the relevant work.
Accounting policies
Special items comprise material amounts of a non-recurring nature, such as costs relating to acquisitions, divestment, closure or
restructuring, provisions for lawsuits, etc. These items are presented separately to facilitate the comparability of the income statement
and to provide a better picture of the operating results.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
77
Note 6, continued
Special items contains expenses to cover further costs to resolve the remaining claims in connection with legal assistance
related to litigation about transvaginal surgical mesh products as the process takes longer than previously anticipated. See note
19 to the financial statements for more information regarding the litigation about transvaginal surgical mesh products. For
2021/22, special items also contains expenses related to business combinations. See note 32 to the financial statements.
DKK million
2021/22 2020/21
Provisions for litigation about transvaginal surgical mesh products
-300 -200
Expenses related to business combinations
-171 -
Total
-471 -200
Note 7
Financial income and expenses
DKK million
2021/22 2020/21
Financial income
Interest income
12 11
Fair value adjustments of forward contracts transferred from other
comprehensive income - 19
Fair value adjustments of cash
-based share options 2 -
Interest hedges
27 -
Net exchange adjustments
57 95
Hyperinflationary adjustment of monetary position
19 11
Other financial income
2 1
Total
119 137
Financial expenses
Interest expenses
40 13
Interest expenses, lease liabilities
16 12
Interest expenses, bonds
116 -
Fair value adjustments of forward contracts transferred from other comprehensive income
191 -
Fair value adjustments of cash
-based share options - 2
Other financial expenses and fees
68 32
Total
431 59
Accounting policies
Financial income and expenses include interest, financing costs of leases, realised and unrealised foreign exchange adjustments, gains
on net monetary items in hyperinflationary economies, fair value adjustment of forward contracts transferred from other
comprehensive income, fair value adjustments of cash settled share options, fees, market value adjustments of securities and dividend
received on shares recognised under securities.
See note 23 to the financial statements for more information about accounting policy for items transferred from hedging reserve.
CONSOLIDATED FINANCIAL STATEMENTS
78
Notes to the consolidated financial statements
Note 8
Tax on profit for the year
DKK million
2021/22 2020/21
Specification of tax on profit for the year
Current tax on profit for the year
1,526 1,201
Change in deferred tax on profit for the year
-98 216
Tax on profit from ordinary activities for the year
1,428 1,417
Adjustment of tax
relating to prior years -5 -12
Change due to change in tax rate
-2 3
Tax on profit for the year
1,421 1,408
Tax on equity and other comprehensive income entries, income (
-) / expense (+) -84 62
Reconciliation of tax rate
differences
Danish tax rate
22.0% 22.0%
Effect of change of tax rates
0.0% 0.1%
Deviation in foreign subsidiaries' tax percentage
0.1% 0.1%
Non
-taxable income and non-deductible expenses 1.0% 0.0%
Research and development incentives
-0.6% -1.2%
Acquisitions and divestments
0.0% 0.7%
Other taxes and other adjustments, net
0.7% 0.9%
Effective tax rate
23.2% 22.6%
Notes to the consolidated financial statements
Accounting policies
Coloplast A/S is jointly taxed with wholly owned Danish subsidiaries. The jointly taxed Danish enterprises are covered by the Danish
on-account tax scheme.
Additions, deductions and allowances relating to the on-account tax scheme are included in financial items.
Current tax on the net profit or loss for the year is recognised in the income statement together with any change in deferred tax. Tax
on changes in other comprehensive income is taken directly in other comprehensive income.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
79
Note 9
Earnings per share (EPS)
2021/22 2020/21
Net profit for the year, DKK million
4,706 4,825
Net profit for the year before special items, DKK million
5,073 4,981
Weighted average number of outstanding shares, millions of units
212.5 212.8
Dilutive effect of outstanding share options, millions of units
0.3 0.4
Average number of unrestricted shares including dilutive effect of
outstanding share options, millions of units 212.8 213.2
Earnings per share before special items, DKK
23.87 23.40
Earnings per share, DKK
22.14 22.67
Earnings per share before special items, diluted, DKK
23.82 23.36
Earnings per
share, diluted, DKK 22.11 22.63
Accounting policies
Earnings per share (EPS) reflects the ratio between profit for the year and the year’s weighted average of issued, ordinary shares,
excluding ordinary shares purchased by the Group and held as treasury shares. Earnings per share, diluted, is calculated as the net
profit for the year divided by the average number of outstanding shares adjusted for the dilutive effect of outstanding share options in
the money.
2021/22 2020/21
Outstanding shares ('000):
A shares
B shares
A shares
B shares
Outstanding shares at 1 October
18,000
194,801
18,000
194,681
Sale of treasury shares
- 19
- 618
Acquisition of treasury shares
- -513
- -498
Outstanding shares at 30 September
18,000
194,307
18,000
194,801
Holding of treasury shares at 30 September
- 3,693
- 3,199
Total shares issued at 30 September
18,000
198,000
18,000
198,000
Both share classes have a face value of DKK 1 per share. Class A shares carry 10 votes each, while class B shares carry 1 vote each.
The class A shares are non-negotiable instruments. Any change of ownership or pledging of class A shares requires the consent of the
Board of Directors. B shares are negotiable instruments, and no restrictions apply to their negotiability. No special dividend rights
attach to either share class. The Group does not hold A shares.
CONSOLIDATED FINANCIAL STATEMENTS
80
Notes to the consolidated financial statements
Note 10
Dividend per share
DKK
2021/22 2020/21
Interim dividend per share
5.00 5.00
Proposed dividend per share
15.00 14.00
Total dividend per share
20.00 19.00
Total dividend for the year, DKK million
4,247 4,044
Payout ratio
90% 84%
The Board of Directors recommends that the shareholders attending the general meeting approve an additional dividend of
DKK 15.00 per share. An interim dividend of DKK 5.00 per share was distributed in the financial year, bringing the total dividend
per share for the year to DKK 20.00. The increase in dividend per share, compared to last financial year, amounts to 5%. The
payout ratio after special items for the year is 90%.
Notes to the consolidated financial statements
Accounting policies
Dividend is recognised in the balance sheet as a liability when adopted at the Annual General Meeting. Proposed but not yet paid
dividend for the financial year is recognised in equity until approved by the shareholders at the general meeting.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
81
Note 11
Intangible assets
Accounting policies
Intangible assets with a finite life are measured at cost less accumulated amortisation and impairment losses. Subsequent milestone
payments related to acquired patents, trademarks and know-how payable on achievement of a contingent event will be capitalised
when the contingent event is achieved. Borrowing costs are recognised as part of cost. Amortisation is made on a straight-line basis
over the expected useful lives of the assets, which are:
Software 3 – 5 years
Acquired patents, customer list, trademarks and know-how etc. 5 – 15 years
Goodwill and other intangible assets with indefinite lives are tested for impairment annually or whenever there is an indication of
impairment, while the carrying amount of intangible assets with finite lives measured at cost or amortised cost are assessed if there is
an indication of impairment. If a write-down is required, the carrying amount is written down to the higher of net selling price and value
in use. For the purpose of assessing impairment, assets are grouped in the smallest group of assets that generates identifiable cash
inflows (cash-generating units). The cash-generating units are defined as the smallest identifiable group of assets that generates cash
inflows and which are largely independent of cash flows from other assets or groups of assets.
For other intangible assets, the amortisation period is determined on the basis of Management’s best estimate of the expected
economic lives of the assets. The expected economic lives are assessed at least annually, and the amortisation period is determined
based on the latest assessment. For purposes of calculating amortisation, the residual value of the assets is nil, unless a third party has
committed to purchasing the asset after its use or there is an active market for the asset. With the exception of goodwill and some
specific trademarks, all intangible assets have a finite life.
All in-house research costs are recognised in the income statement as incurred. Management believes that mandatory regulatory
approvals of products, completing the development of new products involves a high degree of uncertainty, for which reason the
technical feasibility criteria are not considered to have been met.
Gains or losses on the disposal of intangible assets are stated as the difference between the selling price less costs to sell and the
carrying amount at the date of disposal and are included in the income statement under other operating income or other operating
expenses, respectively.
Key accounting estimates and judgements
Goodwill and other intangible assets: The measurement of intangible assets, including goodwill and acquired patents, could be
materially affected by significant changes in estimates and assumptions underlying the calculation of values. The carrying amount of
intangible assets was DKK 20,277 million as at 30 September 2022 (30 September 2021: DKK 3,651 million).
Atos Medical was acquired in 2022 and the acquisition method for the Intangible assets involves the use of significant estimates as the
identifiable net assets of the acquiree are recognised at their fair value for which observable market prices are typically not available.
Customer relationships have been measured using an income-based method (MEEM), by which the present value of future cash flows
from recurring contract customers expected to be retained after the date of acquisition has been valuated using a WACC of 6.7% as
discount rate. Technology and corporate trademarks has been measured by applying the income-based (relief from royalty) method
to the revenue stream.
Nine Continents Medical was acquired in a share deal in 2020. Shortly following the acquisition, all intangible assets was transferred to
Coloplast A/S resulting in US exit taxation. The subsequent transfer of the intangible assets to Coloplast A/S is considered an integral
part of the transaction and, consequently, the tax base in Coloplast A/S is considered established upon the acquisition. The transfer is
considered an integral part of the transaction because not transferring the intangible assets to Coloplast A/S with the current tax
setup of the Groups is not a viable solution.
CONSOLIDATED FINANCIAL STATEMENTS
82
Notes to the consolidated financial statements
Note 11, continued
DKK million
Acquired
patents,
trademarks
and know
-
how etc.
Goodwill
Software
Prepay
-
ments and
intangible
assets in
progress
Total
intangible
assets
2021/22
Cost at 1 October
3,010 2,028 526 84 5,648
Exchange adjustment
-30 -259 -1 -1 -291
Additions from acquisitions
7,112 10,039 23 14 17,188
Transfers
- - 93 -93 -
Additions during the year
8 - 36 164 208
Disposals during the year
- - -15 -16 -31
Cost at 30 September
10,100 11,808 662 152 22,722
Amortisation at 1 October
1,628 - 369 - 1,997
Exchange adjustment
220 - -1 - 219
Amortisation for the year
190 - 70 - 260
Amortisation reversed on
disposals during the year - - -15 -16 -31
Amortisation at 30 September
2,038 - 423 -16 2,445
Carrying amount at 30 September
8,062 11,808 239 168 20,277
2020/21
Cost at 1 October
1,729 1,976 458 76 4,239
Exchange adjustment
13 7 2 - 22
Additions from acquisitions
50 45 - - 95
Transfers
- - 51 -51 -
Additions during the year
1,218 - 38 59 1,315
Disposals during the year
- - -23 - -23
Cost at 30
September 3,010 2,028 526 84 5,648
Amortisation at 1 October
1,533 - 342 - 1,875
Exchange adjustment
13 - 3 - 16
Amortisation for the year
82 - 47 - 129
Amortisation reversed on disposals during the year
- - -23 - -23
Amortisation at 30 September
1,628 - 369 - 1,997
Carrying amount at 30 September
1,382 2,028 157 84 3,651
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
83
Note 11, continued
Goodwill
Goodwill mainly relates to the acquisitions of Atos Medical in 2022, Mentor's urology and continence business in 2006, Mpathy
in 2010, Comfort Medical in 2016, Lilial in 2018, Hope Medical and Affordable Medical in 2021 as well as Goodwill from the
acquired businesses has been allocated on the individual cash-generating units according to earnings at the date of acquisition.
The allocation was made to the operating segment Chronic Care, Interventional Urology and the new operating segment Voice
and Respiratory Care.
Pursuant to IAS 36, a goodwill impairment test is performed when there is an indication of impairment, but at least once a year.
In the impairment test, the carrying amount is compared with the recoverable amount (value in use or fair value less cost of
disposal) of each cash-generating unit, calculated as the discounted expected future cash flows.
Future cash flows are determined using forecasts based on realised sales growth, earnings and strategy plans, etc. These
forecasts are based on specific assumptions for each cash-generating unit during the planning period with respect to sales,
results of operations, working capital, capital investments and assumptions for cost of capital, inflation and the level of interest
rates.
Growth rates during the terminal period correspond to the expected long-term rate of inflation.
2021/22 2020/21
Chronic
Care
Interven
-
tional
Urology
Voice and
Respira
-
tory Care
Chronic
Care
Interven
-
tional
Urology
Key parameters applied in the
calculation of recoverable amounts:
Revenue growth in terminal period
2.1% 2.1% 1.5% 1.4% 1.4%
Tax percentage
23.0% 27.0% 21.8% 23.0% 27.0%
Carrying amount of trademarks¹
⁾, DKK million 54 - 3,235 54 -
Carrying amount of
goodwill, DKK million 1,762 394 9,652 1,690 338
¹
⁾ Carrying amount includes only those trademarks with indefinite useful lives.
2021/22 2020/21
Before
tax
After
tax
Before
tax
After
tax
Discount rates
applied in the calculation of recoverable amounts:
Chronic Care
7.9% 6.5% 7.7% 6.1%
Interventional Urology
12.5% 9.5% 12.3% 9.1%
Voice and Respiratory Care
8.1% 6.7% - -
The discount rate for 2021/22 and 2020/21 is based on the WACC used by the external analysts’ covering Coloplast.
Special assumptions applied in impairment tests performed in Chronic Care
Chronic Care consists of the Ostomy Care and the Continence Care businesses. The Ostomy Care business involves the
production and sale of ostomy pouches and accessories. The Continence Care business involves the production and sales of
disposable catheters and various types of products designed for people suffering from urinary or faecal incontinence.
The impairment test performed for Chronic Care was based on forecasts for the 2022/23 financial year. Assumptions for
Coloplast’s long-term strategy were applied for the financial years 2023/24 to 2025/26.
CONSOLIDATED FINANCIAL STATEMENTS
84
Notes to the consolidated financial statements
Note 11, continued
Revenue growth rates of 6-7% were assumed for the budget period, which are supported by the organic growth rates in recent
financial years. On the other hand, it was assumed that the gross margin will decrease slightly until the terminal period due to
anticipated price pressures and healthcare reforms. It was also assumed that the Group’s focus on cost management and
regular efficiency improvements will ensure that overhead costs will increase at a rate lower than revenue, which will produce
an annual margin improvement.
The Group’s general tax rate was applied in the impairment test for Chronic Care because these products are sold in all of the
Group’s markets. Working capital invested has been projected using the same growth rate as that for revenue.
Special assumptions applied in impairment tests performed in Interventional Urology
The interventional urology business consists of the production and sale of products used in surgical procedures in urology and
gynaecology, including prostate catheters, stents, vaginal slings used to restore continence, mesh products used to treat weak
pelvic floor and penile implants for men experiencing severe impotence.
The impairment test performed for Interventional Urology was based on forecasts for the 2022/23 financial year. Assumptions
for the long-term strategy of the urology business were applied for the financial years 2023/24 to 2025/26.
Revenue growth rates of 5-9% were assumed for the budget period, which are supported by the Interventional Urology organic
growth rates in recent financial years. On the other hand, it was assumed that the gross margin will decrease slightly until the
terminal period due to general anticipated price pressures and healthcare reforms. It was also assumed that the Group’s focus
on cost management and regular efficiency improvements will ensure that overhead costs would increase at a rate lower than
revenue, which will in turn produce an annual margin improvement.
The tax rate applied in the impairment test for Interventional Urology was higher than the rate applied for the Group because
sales and production mostly take place in the US, which imposes a corporate tax rate higher than the Group average. Working
capital invested has been projected using the same growth rate as that for revenue.
Special assumptions applied on Voice and Respiratory Care
The voice and respiratory care business consists of sales of laryngectomy and tracheostomy products, used to treat removal of
all or part of the larynex.
The impairment test performed for Voice and Respiratory Care was based on forecasts for the 2022/23 financial year from the
Management approved business case. Assumptions for Coloplast’s long-term strategy were applied for the financial years
2023/24 to 2030/31.
Revenue growth rates of 7-10% were assumed for the budget period, which are supported by the organic growth rates in
recent financial years. On the other hand, it was assumed that the gross margin will decrease slightly until the terminal period
due to anticipated price pressures and health care reforms. It was also assumed that the Group’s focus on cost management
and regular efficiency improvements will ensure that overhead costs will increase at a rate lower than revenue, which will
produce an annual margin improvement. A tax rate of 21.8% was applied in the impairment test for Voice and Respiratory Care
because these products are sold in all of the Group’s markets. Working capital invested has been projected using the same
growth rate as that for revenue.
The disclosed key parameters and discount rate arose from the Management approved business case regarding Atos Medical
Group, consequently the carrying amount is compared with fair value less cost to sell based on a discount cash flow model (level
3 in the fair value hierarchy). The key parameters and discount rate are assessed to still be prudent as of 30 September 2022,
and no impairment triggers are identified in the subsequent period, hence Management has used the business case as basis for
the impairment test as of 30 September 2022.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
85
Note 11, continued
Acquired patents, trademarks and know-how etc.
This year’s additions of acquired customer list, patents and trademarks are associated with the acquisition in 2022 of Atos
Medical, where Coloplast completed the acquisition of all shares and voting rights of Atos Medical at a cash consideration of
DKK 10,622 million. Acquired patents and trademarks are associated with the acquisition of Mentor’s urology business in 2006,
the Mpathy acquisition in 2010. Coloplast acquired during 2020/21 three small US direct-to-consumer Durable Medical
Equipment (DME) dealers, Hope Medical Supply, Rocky Mountain Medical Supply and Affordable Medical, LLC amounted to DKK
50 million, and Nine Continents Medical of DKK 1,218 million, where of the full amount has not been paid in cash. In connection
with the acquisitions, intangible assets were identified, and the cost was allocated to net assets at fair value at the date of
acquisition, calculated on the basis of factors such as expected sales and revenue trends. Each component is amortised over its
estimated useful life using the straight line method, we refer to note 32.
Patented and unpatented technologies
On acquiring Atos Medical in January 2022, Coloplast acquired several patented technologies and unpatented technologies.
Unpatented technologies include:
• Unpatented inventions
• Trade secrets
• Know-how
• Confidential information
• Copyrights on computer software, databases or instruction manuals and the like
On acquiring Nine Continents Medical in November 2020, Coloplast acquired a number of patented and unpatented
technologies. Unpatented technologies include inventions not patentable or protectable, know-how, confidential information
and copyrights on computer software and the like. Most relate to know-how regarding various technologies. Division of the
individual components into small intangible assets is not considered material or relevant.
On acquiring Mentor’s urology business, Coloplast acquired a large number of patented technologies (more than 300) and
unpatented technologies. On acquiring Mpathy, Coloplast acquired about 50 patented technologies.
Trademarks
In addition to patented and unpatented technologies, Coloplast acquired the Atos Medical and TRACOE trademarks through the
acquisition of Atos Medical. On acquiring Mentor, Coloplast acquired a large number (more than 150) of registered and
unregistered trademarks, including pending applications for trademark registration, but Coloplast did not acquire the Mentor
trademark. Individual acquired trademarks, each representing a limited value, are not material for Coloplast’s sales, as is also the
case for patented and unpatented technologies. On acquiring Mpathy, Coloplast acquired a small number (less than 20) of
trademarks. On acquiring Nine Continents, Coloplast acquired some unregistered trademarks and a domain name.
Management has assessed that the value of brands with indefinite useful life can be maintained for an indefinite period, as these
are well-established brands in their markets, having existed for decades. The industry is characterised as being very stable with
consistent consumer demand and a predictable competitive environment, and is expected to be profitable for the foreseeable
future. Control of the brands is legally established and enforceable indefinitely. In management’s opinion, the risk of the useful
life of these brands becoming finite is minimal because of their individual market positions and because current and planned
marketing initiatives are expected to sustain their useful life.
CONSOLIDATED FINANCIAL STATEMENTS
86
Notes to the consolidated financial statements
Note 11, continued
Customer lists/loyalties
Coloplast also acquired a substantial number of customer relationships on acquiring Atos Medical. Customer relationships
include lists of and access to Atos’ existing customers, both users, hospitals and distributors. On acquiring both Mentor and
Mpathy, Coloplast also acquired a substantial number of customer relationships. As long-term customer contracts are rarely
made in the field of urology, customer lists are valued as a whole at the date of acquisition.
2021/22 2020/21
Amortisations on intangible assets break down as follows
Production costs
21 60
Distribution costs¹
⁾
219 59
Administrative expenses
10 6
Research and development costs
10 4
Total
260 129
¹
⁾ Includes amortisation costs related to the acquisition of Atos Medical.
Note 12
Property, plant and equipment
DKK million
2021/22 2020/21
Depreciations on property, plant and equipment break down as follows
Production costs
339 377
Distribution costs
35 33
Administrative expenses
23 10
Research and development costs
38 38
Total
435 458
Notes to the consolidated financial statements
Accounting policies
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Cost comprises the cost of
acquisition and expenses directly attributable to an acquisition until the asset is ready for use. In case of assets manufactured by the
company, cost comprises materials, components, sub-supplier services, direct labour and costs directly attributable to the
manufactured asset. In addition, borrowing costs are recognised as part of cost.
Depreciation is provided on a straight-line basis over the expected useful lives of the assets. The expected useful lives are:
Land not depreciated
Buildings 15 – 25 years
Building installations 5 – 10 years
Plant and machinery 5 – 15 years
Other fixtures and fittings, tools and equipment 3 – 7 years
At the balance sheet date, the residual values, remaining useful lives and depreciation pattern of the assets are reassessed. Any
changes are treated as changes to accounting estimates. Gains and losses on the sale or scrapping of an item of property, plant and
equipment are recognised in the income statement as other operating income and other operating expenses, respectively.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
87
Note 12, continued
DKK million
Land and
buildings
Plant and
machinery
Other
fixtures
and
fittings,
tools and
equipment
Prepay
-
ments and
assets
under
construc
-
tion
Total
property,
plant and
equipment
2021/22
Cost at 1 October
2,748 4,957 1,172 802 9,679
Exchange and other adjustments
36 -115 14 -10 -75
Additions from acquisitions
137 32 49 29 247
Transfers
251 326 72 -649 -
Additions and improvements during the year
8 15 26 878 927
Disposals during the year
-13 -89 -14 -35 -151
Cost at 30 September
3,167 5,126 1,319 1,015 10,627
Depreciation at 1 October
1,501 3,494 899 - 5,894
Exchange and other adjustments
-13 -42 11 - -44
Depreciations for the year
116 205 114 - 435
Depreciations reversed on disposals during the year
-8 -110 -14 - -132
Depreciation at 30 September
1,596 3,547 1,010 - 6,153
Carrying amount at 30 September
1,571 1,579 309 1,015 4,474
Cost of property, plant and equipment fully depreciated
705 2,515 862 - 4,082
2020/21
Cost at 1 October
2,467 4,505 1,122 764 8,858
Exchange and other adjustments
23 30 7 3 63
Transfers
289 409 61 -759 -
Additions and improvements during the year
8 68 34 809 919
Disposals during the year
-39 -55 -52 -15 -161
Cost at 30 September
2,748 4,957 1,172 802 9,679
Depreciation at 1 October
1,409 3,321 817 - 5,547
Exchange and other adjustments
10 12 6 - 28
Depreciations for the year
106 225 127 - 458
Depreciations reversed on disposals during the year
-24 -64 -51 - -139
Depreciation at 30 September
1,501 3,494 899 - 5,894
Carrying amount at 30 September
1,247 1,463 273 802 3,785
Cost of property, plant and equipment fully depreciated
1,024 2,314 623 - 3,961
The Group has signed agreements with contractors for the supply of buildings, technical plant and machinery for DKK 250
million at 30 September 2022 (DKK 126 million at 30 September 2021).
CONSOLIDATED FINANCIAL STATEMENTS
88
Notes to the consolidated financial statements
Note 13
Right-of-use assets
The majority of the Group's right-of-use assets comprise office space, warehouses, cars and IT equipment. Leasing
arrangements are preferred for certain types of assets as it stabilises cash flows and reduces capital invested in non-current
assets.
In certain situations, the leasing contracts include a right for Coloplast to extend the leasing period but this is only reflected in the
cost of the right-of-use assets, and the corresponding lease liability, if it is reasonably certain that the option will be utilised.
Variable lease payments, which are not included in the measurement of the lease liability, are expensed directly in profit or loss.
These payments are mainly related to consumption-based charges, e.g. extra mileage in leased cars.
The Group enters into new lease contracts continually, e.g. to replace an old right-of-use asset which is returned to lessor. The
new contracts are usually entered prior to commencing the leasing period when a right-of-use assets is available for use.
Consequently, the Group may have committed to lease contracts, which are insignificant from an individual perspective, at the
balance sheet date which are not yet recognised on the balance sheet date.
The extent of residual value guarantees for right-of-use assets is limited and expected payments are included in the initial
amount of the lease liability.
Notes to the consolidated financial statements
Accounting policies
At the commencement date, when a leased asset is made available for use, a right-of-use asset and a corresponding lease liability is
recognised on the balance sheet.
Right-of-use assets are initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made
prior to the commencement date and any initial direct costs. Subsequently, the right-of-use asset is measured at cost less depreciation
and impairment losses and adjusted for the remeasurement of the lease liability. The right-of-use assets are depreciated on a straight-
line basis over the shorter of the lease term or the useful life of the right-of-use asset.
Options to extend the initial leasing period are only included in the initial measurement if it is reasonably certain that the option will be
utilised.
Lease liabilities are initially measured at the present value of future lease payments. The lease payments are discounted using the
implicit rate of the lease contract or, if not readily determinable, the incremental borrowing rate of Coloplast for loans with similar term
and security. As a practical expedient, the discount rates are determined on basis of a portfolio of leases with similar characteristics,
e.g. a portfolio of leased cars in a specific country. The lease liabilities are subsequently reduced by the portion of lease payments
which is regarded as repayment of those lease liabilities. Lease liabilities are remeasured in the event of a lease modification or a
reassessment of the lease term which in turn may also impact the carrying value of the right-of-use assets. The lease term is
reassessed when a significant event or change, which is within the control of Coloplast, affects the prior assessment.
Short-term leases and leases of low-value assets are exempted from the above accounting model. Consequently, lease payments
associated with such lease contracts are recognised as an operating expense on either a straight-line basis over the lease term or
another systematic basis which is more representative of the pattern of the benefit of the leased assets.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
89
Note 13, continued
DKK million
Land and
buildings
Other fixtures and
fittings, tools and
equipment
Total
right
-of-use assets
2021/22
Carrying amount at 1 October
447 154 601
Exchange and other adjustments
-2 5 3
Additions from acquisitions
51 23 74
Additions during the year
151 100 251
Disposals during the year
-20 -77 -97
Depreciations for the year
-128 -107 -235
Depreciations reversed on disposals during the year
9 71 80
Carrying amount at 30 September
508 169 677
DKK million
Land and buildings
Other fixtures and
fittings, tools and
equipment
Total
right
-of-use assets
2020/21
Carrying amount at 1 October
437 178 615
Exchange and other adjustments
4 1 5
Additions during the year
126 93 219
Disposals during the year
-43 -62 -105
Depreciations for the year
-108 -97 -205
Depreciations reversed on disposals during the year
31 41 72
Carrying amount at 30 September
447 154 601
DKK million
2021/22 2020/21
Depreciations on right
-of-use assets break down as follows
Production costs
24 22
Distribution costs
182 157
Administrative expenses
27 24
Research and development costs
2 2
Total
235 205
Other lease expenses recorded in the income statement
Lease payments related to short
-term leases 11 4
Lease payments related to low
-value assets 23 19
Variable lease payments
21 18
Total
55 41
Total cash outflow for leases
Payments related to right
-of-use assets 243 204
Payments related to other lease contracts
49 36
Total
292 240
CONSOLIDATED FINANCIAL STATEMENTS
90
Notes to the consolidated financial statements
Note 13, continued
DKK million
2022 2021
Maturity analysis of lease
liabilities (undiscounted)
In less than one year
227 191
Current lease liability (undiscounted)
227 191
Within 1 to 5 years
406 362
After more than 5 years
110 102
Non
-current lease liability (undiscounted) 516 464
Total lease liability (undiscounted)
743 655
Note 14
Deferred tax
The Group’s tax losses expiring after more than five years amount to DKK 34 million at 30 September 2022 (DKK 21 million at
30 September 2021). Of these tax losses, the Group has recognised a tax asset of DKK 4 million on a DKK 15 million tax loss at
30 September 2022 (DKK 6 million on a DKK 21 million tax loss at 30 September 2021).
Accounting policies
Full provision is made for deferred tax on the basis of all temporary differences in accordance with the balance sheet liability method.
Temporary differences arise between the tax base of assets and liabilities and their carrying amounts which are offset over time.
Deferred tax relating to differences between initial recognition of assets or liabilities is not recognised if at the transaction date neither
the accounting profit nor the taxable income is affected unless such differences occurred in a business combination.
Uncertain tax positions generally relate to transfer pricing disputes and are recognised under payable tax and measured according to
current tax rules and at the tax rates assumed in the year in which the assets are expected to be utilised.
Deferred tax assets are recognised to the extent that it is probable that future positive taxable income will be generated, against which
the temporary differences and tax losses can be offset. Deferred tax assets are measured at expected net realisable values.
The value of future tax deductions in relation to share option programmes is recognised as deferred tax, until they are exercised by
the employees. Any estimated excess tax deduction compared to the costs realised in the income statement is charged to equity.
Key accounting estimates and judgements
The recognition of deferred tax assets and uncertain tax positions requires an assessment by management. Deferred tax assets,
including the tax base of tax loss carry-forwards, are recognised if management estimates that the tax assets can be utilised within a
foreseeable future by offsetting against future positive taxable income. The assessment is made annually on the basis of budgets and
business plans for the following years, including any scheduled business measures. As the Group conducts business globally, transfer
pricing disputes may arise with tax authorities in respect of settlement prices etc. Management applies a probability-weighted
assessment to determine obligations in connection with transfer pricing disputes.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
91
Note 14, continued
The tax value of the Group’s tax credits amounts to DKK 134 million at 30 September 2022 (DKK 128 million at 30 September
2021). This amount includes a recognised tax asset of DKK 39 million at 30 September 2022 (DKK 51 million at 30 September
2021). The tax credits expire after more than five years.
Taxable temporary differences regarding investments in subsidiaries and branches are insignificant and no deferred tax has
been provided because the company controls the timing of the elimination of the temporary difference, and it is probable that
the temporary difference will not be reversed in the foreseeable future.
DKK million
2021/22 2020/21
Deferred tax at 1 October, net
72 300
Exchange adjustments
9 4
Additions from
acquisitions -1,581 -5
Adjustment due to change in tax rate
2 -3
Prior
-year adjustments 4 3
Other changes in deferred tax
– charged to income statement 98 -216
Change in deferred tax
- charged to equity -7 -11
Deferred tax at 30
September, net -1,403 72
DKK million
2022 2021
Recognised in the balance sheet as follows
Deferred tax assets
674 743
Provision for deferred tax
-2,077 -671
Deferred tax at 30 September, net
-1,403 72
Deferred tax relates to the following items
Intangible assets
-2,084 -553
Property, plant and equipment
-184 -179
Indirect production costs
-14 -11
Unrealised gain from intra
-group sale of goods 451 455
Trade
receivables -33 -67
Provisions
142 155
Jointly taxed companies (recaptured balances)
-10 -9
Share options
33 106
Tax losses carried forward and tax credits
44 56
IFRS 16 liabilities
112 109
Effect from hedge of cash flow and
interest rates 131 11
Other
9 -1
Deferred tax at 30 September, net
-1,403 72
CONSOLIDATED FINANCIAL STATEMENTS
92
Notes to the consolidated financial statements
Note 15
Inventories
DKK million
2022 2021
Raw materials and consumables
621 453
Work in progress
722 580
Manufactured goods
1,844 1,395
Inventories at 30 September
3,187 2,428
DKK million
2021/22 2020/21
Write
-downs at 1 October 50 37
Additions from acquisitions
9 -
Write
-downs realised during the year -21 -14
Write
-downs reversed during the year -23 -12
Additional write
-downs made during the year 34 39
Write
-downs at 30 September 49 50
Production overheads was included in the carrying amount of inventories with DKK 889 million at 30 September 2022 (DKK
649 million at 30 September 2021).
Production costs include directly attributable production costs of DKK 4,633 million related to goods sold (2020/21: DKK 3,844
million).
Notes to the consolidated financial statements
Accounting policies
Inventories are measured at the lower of cost and net realisable value. Cost is determined using the FIFO principle. The cost of finished
goods and work in progress comprises raw materials, direct labour, other direct costs and indirect production overheads. Production
overheads comprise indirect material and labour costs, maintenance and depreciation of the machinery and production buildings used
in the manufacturing process as well as costs of production administration and management. Net realisable value is the expected
selling price less cost of completion and costs to sell.
Key accounting estimates and judgements
Capitalised production overheads have been calculated using a standard cost method, which is reviewed regularly to ensure the
relevant assumptions concerning capacity utilisation, lead times and other relevant factors in the calculation of actual costs of sales.
Changes to the calculation method for production overheads, including levels of capacity utilisation, lead times, etc. could affect the
gross margin and the overall valuation of inventories.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
93
Note 16
Trade receivables and other receivables
DKK million
2022 2021
Ageing of trade receivables
Not due
2,825 2,626
Due up to 30 days
384 233
Due between 30 and 90 days
238 140
Due more
than 90 days 601 352
Trade receivables at 30 September, gross
4,048 3,351
Loss allowance at 30 September
-108 -139
Trade receivables at 30 September, net
3,940 3,212
Loss allowance at 1 October
-139 -122
Exchange adjustment
-4 -1
Allowances used during the year (realised losses)
17 31
Unused allowances reversed during the year
38 -
Additional allowances recognised during the year
-20 -47
Loss allowance at 30 September
-108 -139
Given the profile of our customers, including large wholesalers and government-backed agencies, the risk of loss allowance is
assessed to be limited, consequently the loss allowance in percent of due amounts is low.
Other receivables, non-current
The portion of other receivables, which are falling due after more than one year after the balance sheet date, is recognised in
the balance sheet as non-current assets and amounts to DKK 31 million (DKK 26 million at 30 September 2021).
The majority of the non-current other receivables falls due after three years of the balance sheet date. Interest accruing on
receivables is 0%.
Accounting policies
Receivables consist mainly of trade receivables. On initial recognition, receivables are measured at fair value and subsequently at
amortised cost. Receivables are written down on the basis of an individual assessment and the simplified approach in accordance with
IFRS 9 where loss allowances are based on lifetime expected credit losses.
CONSOLIDATED FINANCIAL STATEMENTS
94
Notes to the consolidated financial statements
Note 17
Share options
Share options are granted to members of the executive management and other senior management for the purpose of
motivating and retaining a qualified management group and in order to align the interests of management with those of the
shareholders. Options are awarded as unconditional allocations at the date of grant, but vest over a three-year period. The
value of options at the date of grant equalled an average of three months' salary for each recipient, with the exception of the
executive management.
The carrying amount of the cash settled share option programmes was DKK 2 million at 30 September 2022 (DKK 7 million at
30 September 2021), while the fair value of all option programmes amounted to DKK 226 million at 30 September 2022 (DKK
553 million at 30 September 2021).
DKK million
2021/22 2020/21
Share options have affected the profit or loss for the year as follows
Staff costs, accounting value of cash and equity
-settled programmes 51 51
Financial costs, fair value adjustment of cash
-settled programmes -2 2
Cost of share options recognised in profit or loss
49 53
The fair value of the options was calculated using the Black-Scholes formula at the date of the grant, in which the interest rate
applied was the yield on Danish government securities. Volatility in the share is calculated as monthly movements (period-end to
period-end) over five years. Options are assumed to be exercised on average one year into the exercise period.
2021 2020
The following assumptions were applied in determining the fair value of share options granted during the
financial year
Black
-Scholes value, DKK 119.70 92.17
Share price, DKK
1,154.91 934.15
Exercise price, DKK
1,212.65 980.86
Expected dividend per share, DKK
1.50% 1.50%
Expected duration, years
4.00 4.00
Volatility
19.90% 19.65%
Risk
-free interest -0.39% -0.63%
Value, million DKK
63.97 59.45
Notes to the consolidated financial statements
Accounting policies
Share options are granted to the executive management and senior management. For equity-settled schemes, the fair value of
options is determined at the grant date. The option value is subsequently recognised over the vesting period as staff costs. For cash-
settled schemes, the fair value of options granted during the period is recognised as staff costs, whereas the fair value adjustment of
granted options from previous periods is recognised under financial items. The purchase and selling prices of treasury shares on
exercise are deducted from or added to equity, as the case may be.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
95
Note 17, continued
2021/22 2020/21
No. of
options
Average
exercise
price
Average
share price
No. of
options
Average
exercise
price
Average
share price
Outstanding share options at 1 October
2,080,407 768
2,061,254 625
Options awarded
534,416 1,209
647,806 977
Options forfeited
-61,570 1,053
-6,586 1,013
Options exercised
-321,732 580 1,018 -622,067 496 1,018
Outstanding share options at 30 September
2,231,521 892 2,080,407 768
Year of issue
No. of
options
issued
Share
options
lapsed
Options
exercised
Not
exercised
at 30
September
2022¹
⁾
Exercise
price²
⁾³⁾
Exercise
period
Specification of outstanding share options
2017
596,363 -41,711 -372,093 182,559 497 31/12/20 - 31/12/22
2017 US
107,767 -3,807 -53,136 50,824 533 31/12/20 - 31/12/22
2018
501,877 -10,461 -185,212 306,204 620 31/12/21 - 31/12/23
2018 US
119,260 - -28,388 90,872 635 31/12/21 - 31/12/23
2019
403,750 -11,337 - 392,413 859 31/12/22 - 31/12/24
2019 US
88,846 - - 88,846 870 31/12/22 - 31/12/24
2020
531,920 -24,981 - 506,939 974 31/12/23 - 31/12/25
2020 US
109,900 -9,902 - 99,998 1,002 31/12/23 - 31/12/25
2020 JP
3,232 - - 3,232 974 31/12/23 - 31/12/25
2021
⁴⁾ 436,138 -21,075 - 415,063 1,208 31/12/24 - 31/12/26
2021 US
95,846 -3,707 - 92,139 1,213 31/12/24 - 31/12/26
2021 JP
2,432 - - 2,432 1,208 31/12/24 - 31/12/26
Total
2,997,331 -126,981 -638,829
2,231,521
¹
⁾ Exercisable options as per 30 September 2022 was 630,459.
²
⁾ Average exercise price for options exercisable at the balance sheet date was DKK 578.73.
³
⁾ The exercise prices are adjusted for payment of dividend. In 2021/22, the adjustment of the exercise price was DKK -1.43.
⁴⁾
Of which 134,837 was granted to key management.
Coloplast's holding of treasury shares fully covers the option programmes, so the options exercised under the programme will
not influence the Group's cash position by forcing it to buy up shares in the market. See note 9 to the financial statements for an
overview of treasury shares held by Coloplast at the balance sheet date.
CONSOLIDATED FINANCIAL STATEMENTS
96
Notes to the consolidated financial statements
Note 18
Provisions for pensions and similar obligations
Defined contribution plans
The Group offers pension plans to certain groups of employees in Denmark and abroad. Most of the pension plans are defined
contribution plans. The Group funds the plans through regular payments of premiums to independent insurance companies
responsible for the pension obligations towards the beneficiaries. Once the pension contributions for defined contribution plans
have been made, the Group has no further obligation towards current or former employees. Contributions to defined
contribution plans are recognised in the income statement when paid. In 2021/22, DKK 359 million (2020/21: DKK 320 million)
was recognised.
Defined benefit plans
For certain groups of employees in foreign subsidiaries, the Group has signed agreements to pay defined benefits, including
pension payments.
Share of gross obligation by country
2022 2021
France
21% 19%
Germany
12% 9%
UK
66% 71%
Italy
1% 1%
Total
100% 100%
These pension liabilities are not or are only partly covered by insurance (in the UK). Defined benefit liabilities are recognised in
the balance sheet and in the income statement as indicated below. Coloplast funds the plans in the UK and Italy have been
closed, and no further payments are made.
The figures below include liabilities regarding the post-service remuneration scheme applicable to Board members prior to the
amendment to the articles of association adopted at the Annual General Meeting held in 2002.
The pension plans are based on the individual employee's salary and years of service with the company, and benefits are paid as
a lifelong pension. The active plans are not exclusive to any particular employee group.
Notes to the consolidated financial statements
Accounting policies
In defined contribution plans, the Group makes regular payments of fixed contributions to independent pension funds and insurance
companies. The Group is under no obligation to pay additional contributions. Costs for defined contribution plans are recognised in the
income statement as Coloplast assumes an obligation to make the payment.
In defined benefit plans, the Group is under an obligation to pay a defined benefit on retirement. The actuarially calculated present
value less the fair value of any plan assets is recognised in the balance sheet under provision for pension and similar obligations or in
plan assets in the balance sheet. The total service costs of the year plus calculated interest based on actuarial estimates and financial
assumptions at the beginning of the year are recognised in the income statement. The difference between the forecast development
in plan assets and liabilities and the realised values at the end of the year is called actuarial gains or losses and is recognised in other
comprehensive income. In connection with a change in benefits regarding the employees’ employment with the Group to date, there
will be a change in the actuarial calculation of the net present value, which is taken directly to the profit or loss.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
97
Note 18, continued
Special funding requirements apply in the UK, while this is not the case for the other countries. In the UK, employee interests are
handled by a Trustee Board. Accounts are prepared every three years and funding of any deficit is determined. Any surplus
reverts to Coloplast. The plans have no requirements for risk diversification on equities or for matching strategies. The plans
have a duration of an average of 11 years, and all plans generally mature after more than 10 years.
The Group expects to pay DKK 6 million to the defined benefit plans in 2022/23.
DKK million
2021/22 2020/21
Defined contribution plans
359 320
Defined benefit plans
12 13
Cost of pension plans recognised in profit or loss
371 333
Pension costs concerning
current financial year 10 10
Pension costs concerning prior financial years
- 1
Net interest expenses
2 2
Cost of defined benefit plans recognised in profit or loss
12 13
Costs of defined benefit plans break down as
follows
Production costs
3 3
Distribution costs
8 9
Research and development costs
1 1
Cost of defined benefit plans recognised in profit or loss
12 13
Actuarial gains/losses on pension obligations
227 -8
Actuarial gains/losses on plan assets
-152 -3
Actuarial gains/losses on defined benefit plans recognised in other comprehensive income
75 -11
Plan assets at 1 October
397 376
Exchange adjustments
-2 23
Actual rate of interest
8 6
Actuarial gains/losses on plan assets
-152 -3
Paid by the Coloplast Group
14 16
Benefit paid out
-16 -21
Plan assets at 30 September
249 397
DKK million
2022 2021
Specification of plan assets
Shares, listed
63 72
Bonds
57 112
Investments funds
126 210
Cash and similar assets
3 3
Plan assets at 30 September
249 397
CONSOLIDATED FINANCIAL STATEMENTS
98
Notes to the consolidated financial statements
Note 18, continued
DKK million
2021/22 2020/21
Specification of present value of defined benefit obligation
Present value of defined benefit liability at 1 October
593 565
Exchange adjustments
- 22
Current service costs
10 10
Past service costs
- 1
Calculated interest on liability
10 8
Actuarial gains/losses, financial assumptions
-223 15
Actuarial gains/losses, demographic assumptions
11 -
Actuarial gains/losses, experience
-15 -7
Benefit
paid out -16 -21
Present value of defined benefit liability at 30 September
370 593
Fair value of plan assets at 30 September
-249 -397
Net liability of defined benefit plans at 30 September
121 196
Net liability of
defined benefit plans at 1 October 196 189
Expenditure for the year
12 13
Actuarial gains/losses on pension obligation
-227 8
Exchange adjustment
2 -1
Actuarial gains/losses on plan assets
152 3
Payments received
-14 -16
Net liability of defined benefit plans at 30 September
121 196
Actuarial assumptions applied at the balance sheet date (expressed as an average)
Discount rate
3.5% 1.1%
Future rate of salary increases
2.0% 1.6%
Inflation
1.7% 1.6%
Notes to the consolidated financial statements
The below sensibility analysis shows the change in one of the actuarial assumptions, while other assumptions are kept constant. In
practice, a change in one of the assumptions will in many instances be matched by a change in the other assumptions.
2021/22 2020/21
+1%
-point
-
1%-point
+1%
-point
-
1%-point
Percentage increase/decrease in the gross liability resulting from a
change in a single actuarial assumption
Discount rate
-13% 15% -21% 23%
Future rate of salary
increases 2% -2% 3% -2%
Inflation
8% -7% 15% -14%
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
99
Note 19
Other provisions
2021/22 2020/21
DKK million
Legal
claims
Other
Total
Legal
claims
Other
Total
Provisions at 1 October
194 12 206 276 11 287
Exchange adjustment
61 -5 56 -6 - -6
Additions from acquisitions
- 400 400 - - -
Provisions used during the year
-361 - -361 -296 - -296
Unused provisions reversed during the year
-12 - -12 -4 -1 -5
Additional provisions
315 1 316 224 2 226
Provisions at 30 September
197 408 605 194 12 206
Expected maturities
Non
-current liabilities 51 207 258 50 6 56
Current liabilities
146 201 347 144 6 150
Provisions at 30 September
197 408 605 194 12 206
Provisions charged to profit or loss during the year
303 1 304 220 1 221
Accounting policies
Provisions are recognised when the Group has a legal or constructive obligation arising from a past event, and it is probable that an
outflow of the Group’s financial resources will be required to settle the obligation. Provisions are measured as Management's best
estimate of the amount with which the liability is expected to be settled. The Group recognises a provision for the replacement of
products covered by warranties at the balance sheet date.
Key accounting estimates and judgements
Provisions for legal obligations consist of provisions for pending litigation. Management makes assessments of provisions and
contingent liabilities, including the probable outcome of pending and possible future litigation, which is inherently subject to uncertain
future events. Based on information available, Management believes that adequate provisions have been made for pending litigation,
but there can be no assurance that the scope of these matters will not be extended, nor that material lawsuits, claims, legal
proceedings or investigations will not arise in the future.
CONSOLIDATED FINANCIAL STATEMENTS
100
Notes to the consolidated financial statements
Note 19, continued
Legal claims
The amounts are gross amounts relating to certain legal claims.
Since 2011, Coloplast, along with a number of other major manufacturers, has been named as a defendant in individual lawsuits
in various federal and state courts around the United States alleging injury resulting from use of transvaginal surgical mesh
products designed to treat pelvic organ prolapse and stress urinary incontinence. A multidistrict litigation (MDL) was formed in
2012 in the Southern District of West Virginia to consolidate federal court cases in which Coloplast is the first named defendant.
Since the first lawsuits were filed, Coloplast has been intent on disputing the current and any future litigation and has continually
considered which strategy and other steps may serve the company’s best interests.
Against this background, Coloplast has from the start reached settlements with groups of law firms. In 2017, Judge Joseph
Goodwin issued a court order stating that plaintiffs may no longer direct claims against Coloplast in the ongoing MDL. In 2019,
the remaining cases were remanded to the relevant Courts, and on 18 December 2020 the MDL was formally closed. It is
estimated that around 99% of the former MDL cases have been settled to date.
An additional expense of DKK 0.3 billion has been recognised in the 2021/22 financial year to cover further costs to resolve the
remaining claims as the process takes longer than previously anticipated. The expense is recognised under special items in the
income statement. This brings the total amount recognised since the 2013/14 financial year for expected costs of litigation in
the US to DKK 6.15 billion including legal costs (before insurance cover of DKK 0.5 bn).
The total expected expense is based on a number of estimates and assumptions and is therefore subject to uncertainty.
The remaining provision made for legal claims amounted to DKK 0.2 billion at 30 September 2022 (DKK 0.2 billion at 30
September 2021) plus DKK 0.3 billion recognised under other debt (DKK 0.1 billion at 30 September 2021). Liabilities are
classified as other debt when agreements are reached with the plaintiffs’ legal counsel and amounts and timing become known.
Other
Other liabilities relate to provisions for expenses associated with restructuring, guarantees and other non-legal claims.
The majority of the provisions are related to Atos Medical Inc. (US) which is on a regular basis subject to public audits regarding
billing compliance. It is assessed that these audits are associated with a material risk of recoupment and based on the
preliminary high-level analysis the maximum exposure was estimated to around DKK 500 million at the acquisition date. The
exposure and the related provision has been reassessed at the end of the financial year 2021/22 which lead to an adjustment so
the provision at 30 September 2022 amounts to DKK 400 million.
Note 20
Credit institutions
Notes to the consolidated financial statements
Accounting policies
Borrowings from credit institutions are recognised at fair value less expenses incurred and subsequently at amortised cost. Repo debt
relates to mortgage bonds forming a part of repo transactions. Repo debt is recognised at amortised cost plus accumulated repo
interest.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
101
Note 20, continued
DKK
million 2022 2021
Maturity
Repo debt to credit institutions
199 203
Less than one month
Other borrowings from credit institutions
1,445 1,957
Less than one year
Borrowings from credit institutions at 30 September
1,644 2,160
Bonds
16,359 -
Matures in 2024, 2027 and 2030
Lease liability
705 626
See note 13 'Right
-of-use assets'
Other payables
16 -
Less than one month
Marketable securities
-219 -226
Matures in 2022
-2023
Bank balances
-414 -448
Available for withdrawal
Net interest
-bearing debt at 30 September
18,091
2,112
Debt to credit institutions from repo transactions
Coloplast has concluded repo transactions on mortgage bonds, according to which Coloplast has an obligation to buy back the
bonds at a fixed price. Repo transactions are accounted for as lending transactions. Repo debt amounted to DKK 199 million at
30 September 2022 (DKK 203 million at 30 September 2021) with a due date of 14 October 2022. The repo debt carries a
fixed rate of interest of 0.8% from the transaction date (minus 0.3% at 30 September 2021).
Bonds for which the ownership has been transferred to the counterpart as part of a repo transaction had a carrying amount of
DKK 199 million at 30 September 2022 (DKK 203 million at 30 September 2021). See note 22 to the financial statements for
information on interest rate risk relating to bonds.
Other borrowings from credit institutions
Other borrowings from credit institutions mainly comprise drawdowns on revolving credit facilities which are committed for
three years on the balance sheet date in addition to minor bank overdrafts on authorised short-term facilities. The borrowings
from credit institutions are presented as current liabilities due to its nature as instruments for liquidity management.
Bonds
Coloplast has in 2021/22 raised EUR 2.2 billion in debt financing through the issuance of senior unsecured notes in an
aggregate principal amount of EUR 2.2 billion under the Coloplast Euro Medium Term Note programme. The Notes are
unconditionally and irrevocably guaranteed by Coloplast. COLOCB1 EUR 650 million Floating Rate Note carries a coupon
adjusted quarterly. COLOCB2 EUR 700 million carries a fixed coupon for five years, and COLOCB3 EUR 850 million a fixed
coupon for eight years. COLOCB2 and COLOCB3 can be redeemed at a market price fixed on the redemption date in relation to
named EUR bonds with similar maturity.
A pre-hedge was made with Interest swaps on COLOCB2 and COLOCB3 with mandatory breakage on the day the bonds are
issued to limit the financial risks. The gain of DKK 521 million has as per hedge accounting been set off in the equity and
transferred to the financial items during the lifetime of the bonds.
Short name
Currency
Nom. amount,
million
Due < 1 year
Due 1
-5 years
Due > 5 years
Coupon¹
⁾
COLOCB1
EUR
650
7 655
- 1,10
COLOCB2
EUR
850
19 927
- 2.25
COLOCB3
EUR
700
19 77
758
2.75
¹
⁾ Fixed for COLOCB1 as per 17-08-2022. The coupon rate is set as 3M Euribor + 0.75%.
CONSOLIDATED FINANCIAL STATEMENTS
102
Notes to the consolidated financial statements
Note 21
Financial instruments by category
DKK million
Amortised cost
Fair value through
profit or loss
(level 1)
Hedging instruments
at fair
value through
OCI (level 2)
Total
2022
Trade receivables
3,940 - - 3,940
Other receivables
325 - 89 414
Marketable securities¹
⁾ - 219 - 219
Cash and cash equivalents
414 - - 414
Financial
assets 4,679 219 89 4,987
Other credit institutions
1,644 - - 1,644
Bonds²
⁾
16,359 - - 16,359
Trade payables
1,242 - - 1,242
Other payables
2,389 - 171 2,560
Lease liability
705 - - 705
Financial liabilities
22,339 - 171 22,510
2021
Trade receivables
3,212 - - 3,212
Other receivables
234 - 18 252
Marketable securities¹
⁾ - 226 - 226
Cash and cash equivalents
448 - - 448
Financial assets
3,894 226 18 4,138
Other credit institutions
2,160 - - 2,160
Trade payables
1,036 - - 1,036
Other payables
1,777 - 63 1,840
Lease liability
626 - - 626
Financial
liabilities 5,599 - 63 5,662
¹
⁾ The securities portfolio consists of mortgage bonds and corporate bonds. The bond portfolio carried an effective rate of interest of 1-6%
(2020/21: 1
-6%). ²⁾ The fair value of the bonds amounts to DKK 15,636 million calculated based on market prices (level 2).
Notes to the consolidated financial statements
Accounting policies
Financial instruments are measured at either amortised cost or fair value. Those financial instruments, which are measured at fair
value, can be categorised according to the fair value measurement hierarchy below:
Level 1: Observable prices in active markets for identical instruments.
Level 2: Valuation models primarily based on observable prices or traded prices of comparable instruments.
Level 3: Valuation models primarily based on non-observable prices.
The fair value of forward exchange contracts and other derivative financial instruments are considered a level 2 fair value
measurement as the fair value is determined directly based on the published exchange rates and quoted forward exchange rates at
balance sheet dates. The fair value of derivative financial instruments is calculated on the basis of current market data.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
103
Note 22
Financial risks
Risk management policy
Financial risks are managed centrally and, accordingly, all derivative instruments are managed and controlled by the parent
company. The framework is determined by the financial policy approved annually by the Board of Directors. The financial policy
comprises policies for foreign exchange, funding, liquidity and financial counterparts. The core principle is for financial risk to be
managed with a view to reducing significant risk.
Foreign exchange risk
A number of the Group’s financial instruments is exposed foreign exchange risks as a natural consequence of its global activities.
The Board of Directors determines the level of risk as a percentage of EBITDA. Foreign exchange risk is calculated by applying
the principles of a cash-flow-at-risk model. The foreign exchange risk related to financial instruments is concentrated in
receivables, payables and cash positions denominated in foreign currencies. In addition to this, the fair value of the Group’s
hedging instruments is significantly exposed to changes in foreign exchange rates. On the other hand, there is only a low foreign
exchange risk attached to the Group’s marketable securities as these are denominated in DKK and EUR. Borrowings from credit
institutions, including repo debt, are denominated in DKK, and bonds in EUR.
While EUR is a key currency for the Group, the foreign exchange risk is regarded as low due to fixed exchange rate policy of the
central bank of Denmark.
As at 30 September 2022, an average of 59% of the following twelve months of expected net cash flows were hedged (30
September 2021: 52% of the following twelve months of cash flows).
The table below show how a theoretical change of +/- 5% in all currencies against Danish kroner will impact the financial
instruments recognised at the balance sheet date. The impact on profit or loss comes mainly from receivables denominated in
foreign currencies. The impact on other comprehensive income relates to the fair value of hedging instruments. The hedged
exposure is included in the sensitivity analysis and, therefore, the effect is reduced.
2021/22 2020/21
DKK million
USD
GBP
HUF
EUR
Other
USD
GBP
HUF
EUR
Other
Impact from a 5% increase in currencies
Profit or loss
50 -6
20
-786 59
11
8 -16
-29
153
Other comprehensive income
-48 -61
19
- -72
-38
-52 23
- -67
Total
comprehensive income 2 -67
39
-786 -13
-27
-44 7
-29
86
Impact from a 5% decrease in currencies
Profit or loss
-50 6
-20
786 -59
-11
-8 16
29
-153
Other
comprehensive income 48 61
-19
- 72
38
52 -23
- 67
Total comprehensive income
-2 67
-39
786 13
27
44 -7
29
-86
The increase and decrease resulting from a 5% change are the same as all hedging instruments are forward contracts.
CONSOLIDATED FINANCIAL STATEMENTS
104
Notes to the consolidated financial statements
Note 22, continued
Interest rate risk
60% of the Group's net interest-bearing debt is carrying fixed interest rate for 5-8 years, and 40% is at floating interest rate. The
duration as per balance sheet date was 4.3 years.
Liquidity risk
The exposure to liquidity risks is considered to be low. In addition to cash available for withdrawal and marketable securities, the
Group’s cash reserves comprise a mix of committed and uncommitted credit facilities to ensure an adequate level of funding for
the Group’s activities, even in periods of operational uncertainty.
DKK million
2022 2021
Cash and
cash equivalents 414 448
Marketable securities
219 226
Liquid assets recorded on the balance sheet at 30 September
633 674
Committed credit facilities, unutilised (2 years term)
4,370 2,359
Uncommitted credit facilities, unutilised
(short-term) 3,170 1,221
Financial reserves at 30 September
8,173 4,254
The Board of Directors generally intends to distribute excess cash to the shareholders by way of dividends and share buybacks.
It is expected that dividends will be paid twice a year: after the Annual General Meeting and after the release of the half-year
interim report. However, share buybacks and distribution of dividend will always be made with due consideration for the Group’s
liquidity requirements and plans.
The capital management objective of the Group is to raise new debt only for acquisition purposes or for other special purposes.
The Group assesses the capital on the basis of the solvency ratio, which is calculated in accordance with the guidelines issued by
the Danish Society of Financial Analysts.
Credit risk
The Group’s credit risk relates to the possibility that the counterparties of its financial assets are not able to meet their oblige-
tions as they fall due. The carrying amount of the financial assets represents the maximum credit risk exposure. The Group’s
policy for managing credit risks involves an ongoing credit assessment of major customers and other key business partners.
The credit risk exposure relates to (i) receivables, (ii) bank deposits, (iii) marketable securities (mortgage bonds and corporate
bonds) as well as (iv) derivative financial instruments (forward exchange contracts) with a positive fair value at the balance sheet
date.
• The credit risk relating to trade receivables and other receivables is diversified over a large number of customers and
other counterparties. For this reason, the credit risk is regarded as insignificant. See also note 16.
• The credit risk relating to bank deposits is, pursuant to the Group’s counterparty policy, managed and mitigated by
making money market deposits only with selected financial institutions holding a satisfactory credit rating. In addition, the
maximum deposit limits have been defined for each financial counterparty.
• The credit risk relating to marketable securities is considered to be limited as investment is only made in selected liquid
bonds with a high credit rating.
• The credit risk relating to derivative financial instruments is aligned with the credit risk for bank deposits as derivative
contracts are only entered with selected financial institutions with a satisfactory credit rating.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
105
Note 23
Derivative financial instruments
Pursuant to the Group’s foreign exchange policy, forward exchange contracts are used for the purpose of neutralising and
delaying the effect of exchange rate fluctuations in profit or loss and thereby enhance the predictability of the financial results.
The foreign exchange risk is calculated by applying the principles of a cash-flow-at-risk model, with the Board of Directors
determining the level of risk as a percentage of operating profit (EBITDA). The risk is managed and mitigated through cash flow
hedges and, in some cases, through fair value hedges. Sources of hedging ineffectiveness comprise mainly those that arise from
assumptions on expected 12-month rolling cash flows not being realised.
The Group hedges key currencies e.g. USD, GBP, JPY and HUF, and selectively hedges emerging markets currencies taking the
cost of hedging into consideration.
The Group does not hedge forecasted cash flows denominated in EUR as the foreign exchange risk is regarded as low due to
the fixed exchange rate policy of the central bank of Denmark.
Accounting policies
At the initiation of derivative contracts, it is assessed whether they qualify for hedge accounting and the derivatives are classified as
either cash flow hedges or fair value hedges. Cash flow hedges relates to highly probable forecasted transactions at a future point in
time. Fair value hedges relate to changes in the fair value of assets or liabilities recognised on the balance sheet.
Upon initial recognition, the fair values of derivative financial instruments are recognised as an asset or a liability on the balance sheet
date. These are presented together with other receivables or other payables, respectively. The fair values of derivative financial
instruments are subsequently remeasured at fair value at each reporting date.
The subsequent value adjustments of cash flow hedges are recognised through other comprehensive income as a cash flow hedge
reserve when the hedging relationship continues to meet the effectiveness requirement. The reserve is recognised in the income
statement upon realisation of the hedged transactions. Interest hedge of bonds with fixed rate is recognized in the other
comprehensive income as reserve for currency hedging, until the hedged interests will be recognized in the income statement. If a
derivative financial instrument used to hedge expected future transactions expires, is sold or no longer qualifies for hedge accounting,
any accumulated reserve remains in equity until the hedged transaction is concluded. If a transaction is no longer expected to be
concluded, any reserve accumulated under equity is transferred to the income statement.
The subsequent value adjustments of fair value hedges are recognised through profit or loss along with any adjustments of the value
of the hedged asset that concern the hedged risk.
CONSOLIDATED FINANCIAL STATEMENTS
106
Notes to the consolidated financial statements
Note 23, continued
Specification of derivative financial instruments held at the balance sheet date.
DKK million
Contract
amount at
year
-end¹⁾
Fair value
of contract
at year
-
end²
⁾
Average
exchange
rate per
the
hedging
contracts
Expiry period of the
contracts
2022
USD
960 -107 671.49 Oct 22 - Aug 23
GBP
1,367 44 859.67 Oct 22 - Aug 23
JPY
177 8 5.54 Oct 22 - Sep 23
HUF
-438 -39 1.82 Oct 22 - Aug 23
Other currencies
953 -6 n/a
Oct 22 - Sep 23
Forward
exchange contracts at 30 September, cash flow hedges 3,019 -100
HUF
275 18 1.84 Nov 22 - Jan 23
Forward exchange contracts at 30 September, fair value hedges
275 18
Deferred gain on settled interest
swaps:
EUR
2,974 120
May 27
EUR
5,577 373
May 30
Interest swaps at 30 September, to hedge future interest payments
8,551 493
2021
USD
821 -28 617.01 Oct 21 - Aug 22
GBP
1,145 -12 848.16 Oct 21 - Sep 22
JPY
176 1 5.76 Oct 21 - Sep 22
HUF
-490 -2 2.04 Oct 21 - Sep 22
Other currencies
828 -11 n/a
Oct 21 - Sep 22
Forward exchange contracts at 30 September, cash flow hedges
2,480 -52
HUF
310 6 2.07 Oct 21 - Sep 22
Forward exchange contracts at 30 September, fair value hedges
310 6
¹
⁾ Amount is translated to DKK millions using the exchange rates per the hedging contracts. Positive amounts indicate a forecasted sale of the
currency in question; negative amounts indicate a forecasted purchase of currency in question.
²
⁾ Positive amounts indicate that the net fair value of the hedging contracts is an asset. Negative amounts indicate that the net fair value of the
hedging contracts is a liability.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
107
Note 24
Specifications of cash flow from operating and financing activities
DKK million
2021/22 2020/21
Net gain/loss on divestment of non
-current assets 7 4
Change in other provisions
-3 -85
Other non
-cash operating items 52 50
Adjustment for other non
-cash operating items 56 -31
Inventories
-540 -161
Trade receivables
-351 -235
Other receivables, including amounts held in escrow
-295 97
Trade and other payables etc.
337 224
Changes in
working capital -849 -75
2021/22 2020/21
DKK million
Lease
liability
Bonds
Credit
facilities
Total
Lease
liability
Credit
facilities
Total
Balance at 1 October
626 - 2,160 2,786 636 1,111 1,747
Addition from
acquisitions 74
4,882 4,956 - - -
Additions during the year
251 - - 251 219 - 219
Cash flows
-239 16,367 -5,398 10,730 -202 1,050 848
Exchange and other adjustments
-7 -8
-15 -27 -1 -28
Balance at 30
September 705 16,359 1,644 18,708 626 2,160 2,786
Note 25
Cash and cash equivalents
DKK million
2022 2021
Bank deposits, short term
414 448
Cash and cash equivalents at 30 September
414 448
Accounting policies
Cash and cash equivalents, recognised under current assets, comprise bank deposits and cash at hand and are measured at fair
value.
CONSOLIDATED FINANCIAL STATEMENTS
108
Notes to the consolidated financial statements
Note 26
Public grants
The Group has received DKK 4 million in public grants for research and development purposes (2020/21: DKK 1 million) and
DKK 5 million in public grants for investments (2020/21: DKK 4 million). An income of DKK 13 million relating to investment
grants has been recognised under production costs in the income statement (2020/21: DKK 13 million).
Note 27
Contingent liabilities and guarantees
As part of the normal course of business, Coloplast is involved in pending litigations, claims and investigations. Provisions for
probable losses have been made for those matters Management has assessed as needed, but there are uncertainties associated
with these estimates. Please also see note 19 to the financial statements.
Coloplast does not expect any pending litigations, claims and investigations to materially influence the Group’s future earnings,
cash flows or financial position, neither individually nor in aggregate, in addition to the amounts recognised as provisions.
Bonds in repo transactions have been provided as collateral for repo debt. Bonds provided as collateral were valued at DKK 199
million at 30 September 2022 (DKK 203 million at 30 September 2021). See note 20 to the financial statements for information
on interest rate risk relating to bonds.
Notes to the consolidated financial statements
Accounting policies
Public grants comprise of grants for research, development and other investments. Grants for investments are recognised as deferred
income, which is recognised systematically in the income statement under production costs from the date when the conditions
attaching to them are deemed to be complied with until the date on which the deadline for retaining such conditions expires. Other
grants are recognised as income on a systematic basis, so that they are matched with the related costs for which they compensate.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
109
Note 28
Remuneration of the Board of Directors and Executive Management
The current policy for the remuneration of the Board of Directors and Executive Management was adopted in 2020 and sets
out the general guidelines for the remuneration of the Group’s management. The guidelines for the remuneration of the Board
of Directors and Executive Management are available on the Group website.
In addition to the disclosures provided in this note, more details on the remuneration of Executive Management and Directors
are provided in the separate Remuneration report for the Coloplast Group, which is not a part of the audited financial
statements. The report is also available on the Group website.
Fees to Board members in respect of the current financial year
Fees to Board members make up DKK 7.0 million (2020/21: DKK 7.0 million) of the total staff costs (see note 5 to the financial
statements) and are specified as follows:
DKK million
2021/22 2020/21
Ordinary board member fee
5.3 5.3
Audit Committee
1.0 1.1
Nomination and Remuneration Committee
0.7 0.6
Fee to members of the Board of Directors
7.0 7.0
In addition, the accounting cost of not-yet-vested share options held by the Chairman amount to DKK 0.9 million in 2021/2022
(2020/21: DKK 2.8 million) of the total staff costs (see note 5 to the financial statements). The accounting cost is calculated in
line with IFRS 2 and relates to share options awarded to him during his term as CEO.
Remuneration of members of the Executive Management in respect of the current financial year
Remuneration of members of Executive Management make up DKK 61 million (2020/21: DKK 61.6 million) of the total staff
costs (see note 5 to the financial statements) and are specified as follows:
DKK million
2021/22 2020/21
Base salaries
33.2 32.3
Pension
4.9 4.8
Other benefits
1.9 1.7
Cash bonus
5.7 7.5
Remuneration of Executive Management, excluding value of share options and contingent salary items
45.7 46.3
Share options
14.9 12.9
Contingent bonus schemes¹
⁾
0.4 2.4
Remuneration of Executive Management
61.0 61.6
¹
⁾ When Paul Marcun joined Executive Management in 2018/19, he was offered a contingent cash bonus as compensation for waiving long-
term incentive schemes offered by his previous employer. The cash bonus is contingent on continued employment, whereof DKK 5.
1 million
was paid in December 2020 and the remaining DKK 5.1 million was pa
id in December 2021. The cash bonus is expensed in profit or loss over
the vesting period.
CONSOLIDATED FINANCIAL STATEMENTS
110
Notes to the consolidated financial statements
Note 28, continued
The value of share options, which is calculated as the fair value of share options at the grant date using the Black-Scholes
Formula in line with IFRS 2, comprise the annual accounting cost of share options awarded in the current and in prior years in
accordance with the accounting policies applied. Consequently, it does not represent the fair value of share options awarded or
exercised in the current financial year.
If a member of Executive Management is given notice of termination by the company and such termination is not due to breach
on the part of the member of Executive Management, such member is entitled to compensation corresponding to a maximum
of two years’ salary and pension contribution.
Share options are granted to members of Executive Management and senior management. See note 17 to the financial
statements for further information regarding share-based payments as well as the separate Remuneration Report for the
Coloplast Group, which is not part of the audited financial statements. The report is available on the Group website.
Note 29
Related party transactions
Related parties to the Coloplast Group include members of the Board of Directors and the Executive Management and main
shareholders of the parent company, Coloplast A/S. There were no major transactions with related parties. Information about
the remuneration of the Management is set out in note 28 to the financial statements.
Note 30
Fees to auditors appointed by the Annual General Meeting
DKK million
2021/22 2020/21
Statutory audit
12 9
Assurance engagements other than audit
1 1
Tax
advisory 3 1
Other services
2 2
Fee to PricewaterhouseCoopers
18 13
Fee for non-audit services provided to the Group by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab,
Denmark, amounted to DKK 4 million (2020/21: DKK 3 million), relating to tax compliance, transfer pricing, due diligence and
other assurance assessments and opinions.
Certain of the Group's subsidiaries are not subject to an audit by PricewaterhouseCoopers.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
111
Note 31
Events occurring after the balance sheet date
No events have occurred after the balance sheet date which are deemed to have a material impact on the financial results or
equity at 30 September 2022.
Note 32
Acquisitions
On 31 January 2022, Coloplast completed the acquisition of all shares and voting rights of Atos Medical at a cash consideration
of DKK 10,622 million.
About Atos Medical
Atos Medical is the global market leader in laryngectomy. Laryngectomy is a chronic business that fits into Coloplast’s mission,
vision and values. Atos Medical’s purpose of making life easier for people living with a neck stoma is closely aligned with
Coloplast’s purpose of making life easier for people with intimate healthcare needs. The Atos Medical group serves customers in
around 90 countries and a direct presence in 30 countries across the world. Atos Medical employs about 1,200 employees.
Strategic rationale
The transaction represents a new long-term growth category for Coloplast operating with its own identity, brand and execution
strength while benefitting from the industry leading capabilities and track record of Coloplast to drive continuous growth and
value creation. The acquisition of Atos Medical adds therefore a new long-term growth compounder in a category with
significant untapped market potential. Following the acquisition, Coloplast gains access to a new chronic care segment to be run
as a separate strategic business unit operating on shared Coloplast infrastructure.
Goodwill recognised mainly related to the expertise and knowhow of the acquired workforce and expected synergies from the
integration to Coloplast Group. Recognised goodwill is non-deductible for tax purposes.
Transaction and integration costs
In 2021/22, Coloplast incurred transaction and integration costs relating to the acquisition of DKK 171 million, which has been
recognised under special items in the statement of comprehensive income. Transaction costs accounts for DKK 95 million.
Fair value of acquired net assets and recognised goodwill
The fair value of the acquired net assets has been identified and goodwill recognised. Net assets, goodwill and contingent assets
and liabilities recognised at the reporting date are to some extent still provisional. Adjustments may be applied to the purchase
price allocation for a period of up to 12 months from the acquisition date in accordance with IFRS 3.
The main categories of net assets, for which acquisitional accounting is still ongoing, are mainly related to other provisions and
deferred tax assets.
Intangible assets consist of customer lists (DKK 2,427 million) and patents and trademarks (DKK 4,699 million). Customer lists
consist of access to Atos’s existing customer base (users) and physician lists. Patents and trademarks consist of the Atos
trademark and name. Receivables represent a gross amount of DKK 321 million and have only been subject to insignificant
writedowns.
After recognition of identifiable assets and liabilities at fair value, goodwill related to the acquisition amounts to DKK 10,039
million, which is not deductible for tax purposes.
CONSOLIDATED FINANCIAL STATEMENTS
112
Notes to the consolidated financial statements
Note 32, continued
DKK million
Fair value at date of
acquisition
(31/01/2022)
Assets identified at fair value:
Customer relationships
2,427
Patents and
trademarks 4,699
Software
23
Intangible assets (under construction)
29
Property, plant and equipment
218
Right
-of-use assets 74
Deferred tax assets
45
Inventories
151
Trade receivables
248
Other receivables
73
Cash and cash
equivalents -
Total assets
7,987
Liability identified at fair value:
Lease liabilities
76
Borrowings
4,990
Provisions
407
Corporate tax
48
Trade payables
60
Other payables
310
Deferred tax liability
1,513
Total
liability 7,404
Total net assets acquired
583
Goodwill
10,039
Cash consideration
10,622
Acquired cash
-
Consideration, cash and debt
-free 10,622
Earnings impact
We have initiated the operational and legal integration of Atos Medical, while focusing on maintaining a high service level
towards our customers in the transition phase.
Atos Medical is recognised in consolidated net revenue at DKK 1,203 million and in consolidated operating profit before special
items at DKK 231 million, which also includes around DKK 152 million in PPA amortisation costs. If the acquisition had occurred
on 1 October 2021, consolidated pro-forma revenue and operating profit before special items for the period ended 30
September 2022 of the combined Group would have been approximately DKK 23,165 million and DKK 7,000 million,
respectively.
The Atos Medical activities is presented as a new operating segment for the Coloplast Group.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
113
Note 32, continued
Fair value measurement
Material net assets acquired for which significant estimates have been applied in the fair value assessment have been
recognised using the following valuation techniques:
Customer relationships
Customer relationships have been measured using an income-based method (MEEM), by which the present value of future cash
flows from recurring contract customers expected to be retained after the date of acquisition has been valuated using a WACC
of 6.7% as discount rate. In total, customer relationships amounting to DKK 2,427 million have been included in the opening
balance. The main input value drivers in the MEEM model used are the estimated future retention rate and net cash flow of the
acquired contract customer base. These inputs have been estimated based on Management’s professional judgement from
analysis of the acquired customer base, historical data and general business insight.
Patents and trademarks
Technology has been measured by applying the income-based (relief from royalty) method to the revenue stream.
The discount rate applied is 6.7% which is deemed a fair reflection of the risk comprised in the technology.
The corporate trademarks, Atos and TRACOE, are measured by applying the income-based (relief from royalty) method to the
revenue stream. The estimated royalty rate of 6.0% is based on the average of the comparable licence contracts. The discount
rate applied is 6.7% which is deemed a fair reflection of the risk comprised in the corporate trademarks.
Provisions
The provisions are related to Atos Medical Inc. (US) which is on a regular basis subject to public audits regarding billing
compliance. It is assessed that these audits are associated with a material risk of recoupment and based on the preliminary high-
level analysis the maximum exposure was estimated to around DKK 500 million at the acquisition date. The exposure and the
related provision has been reassessed at the end of the financial year 2021/22 which lead to an adjustment so the provision at
30 September 2022 amounts to DKK 400 million.
Trade receivables and payables
Fair value of trade receivables and trade payables has been measured at the contractual amount expected to be received or
paid. In addition, collectability has been taken into consideration on trade receivables. The amounts have not been discounted,
as maturity on trade receivables- and payables generally is very short and the discounted effect therefore immaterial.
Financial liabilities
Lease liabilities have been measured at the present value of the remaining lease payments at the acquisition date discounted
using an appropriate incremental borrowing rate.
Borrowings
Borrowings have been measured at the present value of the repayable amounts discounted using a representative borrowing
rate, unless the discount effect is insignificant.
Other
In addition to the above Coloplast has acquired 100% of the shares and voting rights in a small French direct-to-consumer
Durable Medical Equipment (DME) dealer, Mercure Medical. The acquisition is expected to expand Coloplast’ footprint in Paris,
France.
The fair value of net assets acquired is identified and recognised. The purchase price is recognised as intangible assets. The
agreed consideration for the shares amounts EUR 1.5 million (DKK 11 million), which fell due for payment on the date of the
acquisition.
CONSOLIDATED FINANCIAL STATEMENTS
114
Notes to the consolidated financial statements
Note 33
Company overview
Notes to the consolidated financial statements
Company
Country
Ownership
Parent company
Coloplast A/S
Denmark
Sales subsidiaries
Coloplast de Argentina SA
Argentina
100%
Atos Medical Pty Ltd
Australia
100%
Coloplast Pty Ltd
Australia
100%
Atos Medical Austria GmbH
Austria
100%
Coloplast Ges.m.b.H.
Austria
100%
TRACOE
Medical GmbH
Austria
100%
Atos Medical BVBA
Belgium
100%
Coloplast Belgium NV/SA
Belgium
100%
Atos Medical Brasil Ltda
Brazil
100%
Coloplast do Brasil Ltda.
Brazil
100%
Atos Medical Canada Inc.
Canada
100%
Coloplast Canada Corporation
Canada
100%
Atos (Beijing) Medical Technology CO.
Ltd
China
100%
Coloplast (China) Medical Devices Ltd.
China
100%
Coloplast (Hong Kong) Ltd.
China
100%
Coloplast Czech s.r.o.
Czech
Republic
100%
Atos Medical ApS
Denmark
100%
Coloplast Danmark A/S
Denmark
100%
Coloplast Oy
Finland
100%
Atos Medical SAS
France
100%
Laboratoires Coloplast S.A.S.
France
100%
Lilial S.A.S.
France
100%
Atos Medical GmbH
Germany
100%
Coloplast GmbH
Germany
100%
Coloplast (India) Private Limited
India
100%
Coloplast Israel Ltd.
Israel
100%
Atos Medical Srl
Italy
100%
Coloplast S.p.A.
Italy
100%
Atos Medical Japan Inc.
Japan
100%
Coloplast K.K.
Japan
100%
Coloplast Korea Limited
Korea
100%
Company
Country
Ownership
Atos Medical BV
Netherlands
100%
Coloplast B.V.
Netherlands
100%
MC Europe BV
Netherlands
100%
Atos Medical Ltd.
New
Zealand
100%
Atos Medical AS
Norway
100%
Coloplast Norge AS
Norway
100%
Atos Medical Poland Sp. Z.o.o.
Poland
100%
Coloplast Sp. zo.o.
Poland
100%
Coloplast II Portugal, Unipessoal Lda
Portugal
100%
Coloplast Portugal, Sociedade
Unipessoal, Lda
Portugal
100%
Coloplast LLC
Russia
100%
Coloplast Slovakia s.r.o.
Slovakia
100%
Atos Medical S.L.
Spain
100%
Coloplast Productos Médicos S.A
Spain
100%
Coloplast AB
Sweden
100%
Coloplast AG
Switzerland
100%
Coloplast Taiwan Co., Ltd.
Taiwan
100%
Coloplast Turkey Medikal Gereçler San.
ve Tic. A.Ş.
Turkey
100%
Atos Medical UK Ltd.
UK
100%
Charter
Healthcare Limited
UK
100%
Coloplast Limited
UK
100%
Coloplast Medical Limited
UK
100%
Kapitex Healthcare Ltd
UK
100%
Porges UK Limited
UK
100%
Affordable Medical LLC
USA
100%
Atos Medical Inc.
USA
100%
Coloplast Corp.
USA
100%
Comfort
Medical, LLC
USA
100%
Hope Medical Supply Company
USA
100%
Rocky Mountain Medical, LLC
USA
100%
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
115
Note 33, continued
Company
Country
Ownership
Manufacturing
subsidiaries
Coloplast (China) Ltd.
China
100%
Coloplast Volume Manufacturing Costa
Rica S.A.
Costa Rica
100%
Coloplast Manufacturing France S.A.S.
France
100%
Coloplast Distribution GmbH
Germany
100%
TRACOE Medical GmbH
Germany
100%
Coloplast Hungary Kft.
Hungary
100%
Atos Medical AB
Sweden
100%
Coloplast Manufacturing US, LLC
USA
100%
Coloplast representative offices and branches
Dubai
Saudi Arabia
Egypt
Singapore
Hungary
South Africa
New Zealand
Ukraine
Atos group representative offices and branches
Bahrain
Korea
Czech Republic
Portugal
Finland
Switzerland
Hungary
Company
Country
Ownership
Other
Coloplast Ejendomme A/S
Denmark
100%
Mercure Medical
(société à
responsabilité limité)
France
100%
Heimomed Heinze Gmbh & Co KG
Germany
100%
Heimomed Heinze Verwaltungs
-GmbH
Germany
100%
iSKiA GmbH & Co KG
Germany
100%
iSKiA Verwaltungs
-GmbH
Germany
100%
NRH Medizintechnik GmbH & Go KG
Germany
30%
NRH Medizintechnik Verwlatungs
-
GmbH
Germany
30%
Coloplast Finance B.V.
Netherlands
100%
Coloplast Business Centre Sp. zo.o.
Poland
100%
Atos Medical Holding
Sweden
100%
Lary 2 AB
Sweden
100%
Lary 3 AB
Sweden
100%
Lary 4 AB
Sweden
100%
XTR
Holding Ltd.
UK
100%
Francis Medical
USA
13%
Griffin Laboratories Inc.
USA
100%
Nine Continents, Inc.
USA
100%
CONSOLIDATED FINANCIAL STATEMENTS
116
Notes to the consolidated financial statements
Note 34
Definitions of key ratios
The ratios are calculated and applied in accordance with Recommendations and Financial Ratios issued by the Danish Society of
Financial Analysts. Key ratios are shown on page 2.
EBIT
Earnings before interest and tax
EBITDA
Earnings before
interest, tax, depreciation and amortisation
Invested capital
Assets less cash, less marketable securities plus accumulated goodwill amortised before 1 October 2002 less non
-
interest bearing debt including
provisions
EBIT margin, %
EBIT as a
percentage of revenues
Return on average invested capital (ROIC), %
EBIT as a percentage of invested capital (average)
Return on equity, %
Profit for the year attributable to Coloplast as a percentage of equity before minority interests (average)
Equity ratio, %
Equity at year
-end as a percentage of total assets at year-end
Net asset value per share, DKK
Equity excluding minority interests per outstanding share
Market price/net asset value per share
Market price per share
relative to net asset value per share
PE, price/earnings ratio
Market price per share relative to earnings per share (EPS)
Payout ratio, %
Dividend declared as a percentage of profit for the year attributable to Coloplast
Earnings per
share (EPS)
Profit for the year attributable to Coloplast per outstanding share
(average of four quarters)
Free cash flow per share
Free cash flow per outstanding share
(average of four quarters)
STATEMENTS • INDEPENDENT AUDITOR’S REPORTS
117
STATEMENTS
Statement by the Board of Directors and the Executive Management
Executive Management
Board of Directors
STATEMENTS
118
Independent Auditor’s Reports
Independent Auditor’s Reports
STATEMENTS
STATEMENTS • INDEPENDENT AUDITOR’S REPORTS
119
STATEMENTS
120
Independent Auditor’s Reports
STATEMENTS • INDEPENDENT AUDITOR’S REPORTS
121
STATEMENTS
122
Independent Auditor’s Reports
• Evaluate the appropriateness of
STATEMENTS • INDEPENDENT AUDITOR’S REPORTS
123
CVR no.
STATEMENTS
124
Independent Auditor’s Reports
125
Parent
company
financial
statements
Coloplast
PARENT COMPANY FINANCIAL STATEMENTS
126
Independent Auditor’s Reports
Income statement
1 October - 30 September
DKK million
Note 2021/22 2020/21
Revenue
3 14,548 13,822
Production costs
4 -7,182 -6,473
Gross profit
7,366 7,349
Distribution costs
4 -1,256 -1,193
Administrative expenses
4, 5 -864 -644
Research and development costs
4 -889 -786
Other operating income
11 18
Other operating expenses
- -7
Operating profit
(EBIT)
4,368 4,737
Profit/loss after tax on investments in subsidiaries
10 682 870
Financial income
6 183 143
Financial expenses
6 -363 -24
Profit before tax
4,870 5,726
Tax on profit for the year
7 -908 -995
Net
profit for the year 2 3,962 4,731
PARENT COMPANY FINANCIAL STATEMENTS
Income statement and balance sheet
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
127
Balance sheet
At 30 September
DKK million
Note 2022 2021
Assets
Intangible assets
8 2,121 2,091
Property, plant and equipment
9 689 661
Financial assets
10 19,378 3,916
Non
-current assets 22,188 6,668
Inventories
11 1,240 1,027
Trade receivables
478 388
Receivables from Group companies
3,152 3,016
Other receivables
183 117
Prepayments
183 73
Amounts held in
escrow 12 - -
Marketable securities
219 226
Cash and cash equivalents
201 85
Current assets
5,656 4,932
Assets
27,844 11,600
Equity and liabilities
Share capital
216 216
Reserve for
hedging
415 -41
Proposed ordinary dividend for the year
3,185 2,979
Retained earnings
2,528 3,877
Equity
13 6,344 7,031
Provisions for pensions and similar liabilities
14 2 2
Provision for deferred tax
15 200 324
Other provisions
14 30 30
Payable to Group companies
16,360 -
Non
-current liabilities 16,592 356
Other provisions
14 139 138
Other credit institutions
1,794 2,306
Trade payables
373 270
Payable to Group companies
1,015 531
Income tax
782 506
Other payables
805 462
Current liabilities
4,908 4,213
Liabilities
21,500 4,569
Equity and liabilities
27,844 11,600
Contingent items and
other financial liabilities 16
128
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 1
Accounting policies
Basis of preparation
The parent company’s financial statements are presented in accordance with the Danish Financial Statements Act for
companies in reporting class D.
The accounting policies of the parent company are the same as those of the Group, but with the addition of the policies
described below. The Group’s accounting policies are set out in note 1, 2 and 3 to the consolidated financial statements.
Other than as set out hereinabove, there have been no changes to the accounting policies relative to last year.
General information
No separate cash flow statement has been prepared for the parent company as per the exemption clause of section 86(4) of
the Danish Financial Statements Act. The consolidated cash flow statement is set out on page 63.
Intangible assets
Goodwill is measured at cost less accumulated amortisation and impairment. Amortisation is calculated using the straight-line
method over the expected useful life, estimated at 10 years. This estimate was made on the basis of estimated useful lives of the
other assets acquired in the transaction.
Property, plant and equipment
Leases, under which substantially all risk and rewards or ownership of an asset are transferred, are classified as finance leases.
Other leases are classified as operating leases. No finance leases have been recognised in the parent company’s financial
statements.
Financial assets
In the parent company’s financial statements, investments in subsidiaries and associates are recognised according to the equity
method. The share of the results of subsidiaries less unrealised intra-group gains is recognised in the parent company’s income
statement. Net revaluation of investments in subsidiaries and associates exceeding the dividend declared by such companies is
recognised in equity as reserve for net revaluation according to the equity method.
Financial instruments
The accounting policies and other information about derivative financial instruments are set out in note 23 to the consolidated
financial statements.
Tax
The parent company is taxed jointly with its domestic subsidiaries. The jointly taxed Danish subsidiaries are covered by the
Danish on-account tax scheme. Current tax for jointly taxed companies is recognised in each individual company.
Note 2
Profit distribution
DKK million
2021/22 2020/21
Profit distribution
Retained earnings
-285 687
Dividend paid during the year
1,062 1,065
Proposed dividend for the year
3,185 2,979
Total
3,962 4,731
Notes to Parent Company financial statements
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
129
Note 3
Revenue
DKK million
2021/22 2020/21
Business areas
Intimate healthcare
14,548 13,822
Total
14,548 13,822
Geographical markets
Europe
9,411 8,824
Americas
3,361 3,168
Rest of the world
1,776 1,830
Total
14,548 13,822
Note 4
Staff costs
DKK million
2021/22 2020/21
Specification of staff costs recognised in the financial year
Salaries, wages and directors' remuneration
1,148 1,126
Pensions
98 92
Other social security costs
11 10
Total
1,257 1,228
Average number of employees, FTEs
1,378 1,339
See note 28 to the consolidated financial statements for information on the remuneration for the Board of Directors and
Executive Management.
Note 5
Fees to auditors appointed by the Annual General Meeting
DKK million
2021/22 2020/21
Statutory audit
5 4
Assurance engagements other than audit
1 1
Tax advisory
2 1
Other services
2 1
Fee to PricewaterhouseCoopers
10 7
Fee for non-audit services provided to the Parent Company by PricewaterhouseCoopers Statsautoriseret
Revisionspartnerselskab, Denmark, amounted to DKK 4 million (2020/21: DKK 3 million), relating to tax compliance, transfer
pricing, due diligence and other assurance assessments and opinions.
130
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 6
Financial income and expenses
DKK million
2021/22 2020/21
Financial income
Interest income, etc.
7 5
Interest income from Group companies
109 20
Interest hedges
27 -
Net exchange
adjustments 40 99
Fair value adjustments, forward contracts
- 19
Total
183 143
Financial expenses
Interest expenses, etc.
48 22
Interest expenses from Group companies
124 2
Net exchange adjustments
- -
Fair
value adjustments, forward contracts 191 -
Total
363 24
Note 7
Tax on profit for the year
DKK million
2021/22 2020/21
Current tax on profit for the year
994 732
Change in deferred tax on profit for the year
-98 264
Adjustment of tax relating to prior years
12 -1
Tax on profit for the year
908 995
Tax on equity entries, income
8
74
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
131
Note 8
Intangible assets
Total
DKK million
Acquired
patents,
trademarks
and know
-
how etc.
Goodwill
Software
Prepay
-
ments and
intangible
assets in
progress
2021/22 2020/21
Cost at 1 October
2,743 1,546 464 84 4,837 3,441
Transfers
- - 81 -81 - -
Additions and improvements during the year
- - 33 163 196 1,419
Disposals during the year
- - - - - -23
Cost at 30 September
2,743 1,546 578 166 5,033 4,837
Amortisation at 1 October
1,414 1,025 307 - 2,746 2,582
Amortisation for the year
8 96 62 - 166 187
Amortisation reversed on disposals during the year
- - - - - -23
Amortisation at 30 September
1,422 1,121 369 - 2,912 2,746
Carrying amount at 30 September
1,321 425 209 166 2,121 2,091
Note 9
Property, plant and equipment
Total
DKK million
Plant and
machinery
Other
fixtures
and
fittings,
tools and
equipment
Prepay
-
ments and
assets
under
construc
-
tion
2021/22 2020/21
Cost at 1 October
613 868 206 1,687 1,584
Transfers
15 42 -57 - -
Additions during the year
12 12 165 189 208
Disposals during the year
-15 - -33 -48 -105
Cost at 30 September
625 922 281 1,828 1,687
Depreciations at 1 October
356 670 - 1,026 945
Depreciations for the year
36 82 - 118 144
Depreciations reversed on disposals during the year
-5 - - -5
-63
Depreciations at 30 September
387 752 - 1,139 1,026
Carrying amount at 30 September
238 170 281 689 661
132
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 10
Financial assets
Total
DKK million
Investments in
Group companies
Receivables from
Group companies
Other securities and
investments
2021/22 2020/21
Cost at 1 October
5,126 93 42 5,261 4,068
Capital investments
10,449 4,984 2 15,435 1,532
Divestments
- -3 - -3
-339
Cost at 30 September
15,575 5,074 44 20,693 5,261
Value adjustments at 1 October
-1,344 - -1
-1,345 -457
Profit after tax
682 - - 682 870
Dividend received
-1,639 - - -1,639 -679
Exchange adjustments
102 - 8 110 56
Other adjustments
877 - - 877 -1,135
Value adjustments at 30 September
-1,322 - 7
-1,315 -1,345
Carrying amount at 30 September
14,253 5,074 51 19,378 3,916
See note 33 in the consolidated financial statements for an overview of subsidiaries.
Note 11
Inventories
DKK million
2022 2021
Raw materials and consumables
61 41
Work in progress
303 229
Manufactured goods
876 757
Inventories at 30 September
1,240 1,027
The company has not provided inventories as security for debt obligations.
Note 12
Amounts held in escrow
Amounts paid into escrow accounts relate to the litigation about transvaginal surgical mesh products. See note 19 to the
consolidated financial statements for more information regarding the litigation about transvaginal surgical mesh products.
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
133
Note 13
Statement of changes in equity
Share capital Total equity
DKK million
A shares
B shares
Hedging
reserve
Proposed
dividend
Retained
earnings
2021/22 2020/21
Equity at 1 October
18 198 -41 2,979 3,877 7,031 6,367
Net profit for the year
- - - 4,247 -285 3,962 4,731
Value adjustment of hedging
- - 281 - - 281 -109
Transferred to financial items
- - 164 - - 164 -19
Tax effect of hedging
- - 11 - - 11 28
Currency adjustment of opening
balances and other adjustments
relating to subsidiaries
- - - - -505 -505 -109
Transactions with shareholders
Acquisition of treasury shares
- - - - -500 -500 -500
Sale of treasury shares and loss on
exercised options
- - - - -89 -89 395
Share
-based payment - - - - 33 33 31
Tax on equity
entries - - - - -3 -3
46
Interim dividend paid out in respect of
2021/22
- - - -1,062 - -1,062 -1,065
Dividend paid out in respect of
2020/21
- - - -2,979 - -2,979 -2,765
Equity at 30 September
18 198 415 3,185 2,528 6,344 7,031
Note 14
Provisions
Total
DKK million
Legal
claims
Pension
2021/22 2020/21
Provisions at 1 October
168 2
170 270
Exchange adjustments
60 - 60 -6
Provisions used during the year
-359 - -359 -294
Additional provisions
300 - 300 200
Provisions at 30 September
169 2
171 170
Expected maturities
Non
-current liabilities 30 2 32 32
Current liabilities
139 - 139 138
Provisions at 30
September 169 2
171 170
See note 19 to the consolidated financial statements for more information regarding the litigation about transvaginal surgical
mesh products.
134
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 15
Deferred tax
DKK million
2022 2021
Calculation of deferred tax is based on the following items
Intangible assets
341 333
Property, plant and equipment
36 44
Production overhead
12 11
Provisions
-46 -48
Jointly taxed companies (recaptured balances)
9 10
Cash flow hedges
-131 -11
Other
-21 -15
Deferred tax at
30 September, net 200 324
Note 16
Contingent items and other financial liabilities
2022 2021
DKK million
Rent
Other
operating
leases
Total
Rent
Other
operating
leases
Total
Falling due in
Less than one year
54 15 69 49 26 75
Within 1 to 5 years
4 22 26 49 22 71
After more than 5 years
- - - - - -
Other financial liabilities at 30 September
58 37 95 98 48 146
The parent company had provided guarantees for loans raised by Group companies amounting to DKK 542 million at 30
September 2022 (DKK 519 million at 30 September 2021).
The parent company has issued a letter of subordination to the benefit of other creditors of subsidiaries.
The parent company is involved in minor lawsuits, which, other than as described in note 19 to the consolidated financial
statements, are not expected to influence the parent company’s future earnings.
The parent company is jointly and severally liable for tax on the Group’s jointly taxed Danish income, etc.
Bonds in repo transactions have been provided as collateral for repo debt. Bonds provided as collateral were valued at DKK 199
million at 30 September 2022 (DKK 203 million at 30 September 2021).
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
135
Announcements 2021/22
Financial calendar 2022/23
2021
2022
06/2021 Full-year Financial Results 2020/21
07
/2021 Annual Report 2020/21 and
Remuneration Report 2020/21
08
/2021 Sustainability Report 2020/21
09/2021
Agreement to acquire Atos Medical
1
0/2021 Notice of Annual General Meeting
1
1/2021 Decisions of Annual General Meeting
2021
10 October Silent period until 7 November
19
October Deadline for submission of agenda points for
the Annual General Meeting
7
November Financial Statements for the full year
2021/22 and Annual Report 2021/22
1
December Annual General Meeting 2022
6
December Dividends for 2021/22 at the disposal of
shareholders
2
7 December Silent period until 3 February 2023
20
22
20
23
01/2022 Interim Financial Report, Q1 2021/22
0
2/2022 Coloplast completes the acquisition of
Atos Medical
03/202
2 Share Buyback Programme
0
4/2022 Interim Financial Report, H1 2021/22
05/2022
Establishment of Euro Medium Term
Note programme
06/2022
Successful issuance of EUR 2.2 billion
senior notes under Euro Medium Term
Note programme
0
7/2022 Interim Financial Report, 9M 2021/22
0
8/2022 Financial Calendar 2021-22
3 February Interim Financial Statements for Q1
2022/23
11
April Silent period until 11 May
11
May Interim Financial Statements for H1
2022/23
3
July Silent period until 17 August
17
August Interim Financial Statements for 9M
2022/23
1
1 October Silent period until 9 November
25
October Deadline for submission of agenda points for
the Annual General Meeting
9
November Financial Statements for the full year
2022/23 and Annual Report 2022/23
7
December Annual General Meeting 2023
12
December Dividends for 2022/23 at the disposal of
shareholders
Banks and stockbroking companies following Coloplast
ABG Sundal Collier
AlphaValue
Barclays
Berenberg
Bo
fA Securities
Carnegie
CFRA
Credit Suisse
Danske Bank
D
NB
Exane BNP Paribas
Handelsbanken
J.P. Morgan
Jefferies
Jyske Bank
Kepler Cheuvreux
Morgan Stanley
Morningstar Inc.
Nykredit
ODDO BHF
Redburn
SEB
Sydbank
UBS
Investor Relations contacts
Aleksandra Dimovska
Director, Investor Relations
Kristin
e Husted Munk
Senior Manager, Investor Relations
Tel. +45 49 11 24 58
Tel. +45 49 11
32 66
Email: dkadim@coloplast.com
Email: dk
khu@coloplast.com
SHAREHOLDER INFORMATION
Financial calendar, analysts following Coloplast and contact information
136
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
The Coloplast story begins back in 1954. Elise
Sørensen is a nurse. Her sister Thora has just had
an ostomy operation and is afraid to go out in
public, fearing that her stoma might leak. Listening
to her sister’s problems, Elise conceive
s the idea of
the world’s first adhesive ostomy bag.
Based on Elise’s idea, Aage Louis
-Hansen, a civil
engineer and plastics manufacturer, and his wife
Johanne Louis
-Hansen, a trained nurse, created
the ostomy bag. A bag that does not leak, giving
Thora
– and thousands of people like her – the
chance to live the life they want.
A simple solution that makes a difference.
Today, our business includes Ostomy Care,
Continence Care, Wound
and Skin Care and
I
nterventional Urology, and Voice and Respiratory
Care.
We operate globally and employ more than
1
4,500 employees.
Our mission
Making life easier for people
with intimate healthcare needs
Our values
Closeness... to better understand
Passion... to make a difference
Respect and responsibil
ity... to guide us
Our vision
Setting the global standard
for listening and responding
who use our products, we create solutions that are sensitive to their special needs. We call this intimate healthcare. Our bu
siness includes ostomy care,
continence care, wound and skin care, interve
ntional urology, and voice and respiratory care. We operate gl obally a nd employ more than 14,500
employees.
The Coloplast logo is a registered trademar
k of Coloplast A/ S . © 2022-11.
All rights reserved
Coloplast A/S, 3050 H , Denmark.
3050
Compan
y registration (CVR) No. 69 74 99 17