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Annual Report
2021
Annual Report 2021
Innovation
Corporate Governance
THE BIG
Letter From
the CEO
50 years
of improving
people’s mobility
The year 2021 was another milestone year for Össur
as we marked the Company’s 50
th
anniversary. In
today’s ever-changing environment a rich, fifty-
year history is something we can truly be proud of.
Founded as a domestic clinic by Össur Kristinsson
in 1971, Össur’s global journey began to take off in
the mid-1990’s with the world’s first silicone
prosthetic liner, the Iceross
®
, and quickly
accelerated after the Company went public in 1999. I
have been fortunate enough to lead Össur since 1996
and see the Company, and the overall industry
transform in many positive ways.
Technical and clinical advancements, comprehensive
service offerings, digital solutions, and an increased
emphasis on sustainability are all developments that
Össur has embraced and are a key focus for our
business.
The challenges presented by the global pandemic in
2020 have continued somewhat in 2021 but society as
a whole is adjusting to a new normal and we have also
adopted new ways of working at Össur. Our employees
in manufacturing and distribution have been exceptional
in maintaining our product supply, and our sales and
customer care teams have done their utmost to meet the
varying circumstances of our
customers. Not only were we able to continue bringing
new products to market, but we also progressed with
ongoing research and development projects and added to
service offerings that are being well-received by our
customers.
Feedback on the newly launched Össur Power Knee™ is
very impressive. Prosthetists and end-users alike
comment that the stability and powerful motion of the
knee lead to transformational outcomes. The energy
added by the powered prosthesis helps amputees
preserve their valuable energy for other activities.
Innovation remains a key pillar of our strategy and
recognition received from the World Intellectual Property
Organization (WIPO) earlier in the year, confirmed our
leadership position. Össur ranks second in the world for
top patent applicants in conventional mobility assistive
technologies. Össur is also listed among the top
applicants in patent filings for advanced prosthetics and
exoskeletons.
It was a pleasure to see our Team Össur athletes gather in
Tokyo to compete on the world’s stage after years of
preparation and hard work. Our Össur athletes won a total
of 28 medals and set four new World Records and three
Paralympic Records at the Games. Our world- renowned
Cheetah
®
blades remain the prostheses
of choice for elite athletes, and we are beaming with
2
ÖSSUR ANNUAL REPORT
THE BIG
pride. It was an extraordina ry time for sport and the
determination and resilience of athletes rose to new
heights.
Another significant milestone reached during our
anniversary year is carbon neutrality. We care about the
environment and have actively worked on establishing a
good overview of the Company’s carbon footprint. In 2021,
we proudly became Carbon Neutral for energy and fuel
consumption, waste generation, business travel,
transportation of goods, and electricity consumption of
finished goods suppliers. As part
of our larger commitment to sustainability, we are
contributing to the UN Sustainable Development Goal
on Climate Action which is one of four SDGs we have
chosen to focus on. The others are Good Health and
Well-being, Gender Equality, and Responsible
Consumption and Production. Sustainability is a topic
of great importance to our employees, customers, and
shareholders alike, and we at Össur are committed
to actively contributing to a better society for future
generations.
Additionally, in 2021 we made an effort to elevat e our
commitment to diversity, equity and inclusion and actively
communicated our desire to celebrate different ideas,
perspectives and backgrounds. Our strong company
culture and values foster an environment
for acceptance and belonging. We also introduced the
Össur Give Back Program which offers all employees
globally one volunteer day per year to give back to their
communities. The program has been extremely well-
received and numerous causes and charities have
benefitted from the efforts of our employees.
I recently announced my retirement and at the end of Q1
2022, I will be passing the torch to Sveinn Sölvason,
Össur’s Chief Financial Officer. I have thoroughly enjoyed
my 26 years at Össur, and I am immensely proud of our
accomplishments, not to mention the many great
colleagues, customers and end-users I have crossed paths
with over the years. Össur has grown from being a niche
company with USD 5 million in revenue and 40
employees, to a leading global medical device company
with annual sales of USD 719 million and around 4,000
employees worldwide. Guided by our values and
commitment to improving people’s mobility, we have not
only brought life-changing products to
market and forged valuable partnerships with our
customers, but also contributed positively to the
communities we serve. I have no doubt that the strong
Össur culture will continue to be the foundation for future
success.
It has been an absolute pleasure to lead Össur from being
a one product company to a leading global medical device
company. There have been countless milestones over the
years that have contributed to our growth and market
leading position, but our biggest asset is our valuable team
of employees around the world. Their passion and
dedication to our customers and end-users is exceptional
and I am immensely proud to have been part of this
winning team.
As we embark on a new chapter in the Össur journey,
I would like to extend my sincere thanks to our employees,
customers, end-users and shareholders for their partnership
and collaboration over the years. My very best wishes to all
of you.
Jon
Sigurdsson
3
ÖSSUR ANNUAL REPORT
THE BIG
2021 in Brief
Össur is a global leader in non-invasive orthopaedics
Business
Sales in 2021 by
Segments
Prosthetics
63%
Bracing & Supports
37%
USD 719
million
Regional Overview
Americas
EME
APA
47
44
9
as % of sales
as % of sales
as % of sales
USD 339 million
Organic growth: 8%
FTEs: ~1,400
USD 315 million
Organic growth: 12%
FTEs: ~1,500
USD 65 million
Organic growth: 9%
FTEs: ~200
HQ FTEs:
4
ÖSSUR ANNUAL REPORT
THE BIG
Financial Highlights
Sustainability and CSR
5
ÖSSUR ANNUAL REPORT
67% 53% 47% 38%
Waste Gender Female
recycled ratio management
Male Female
Female in management
positions
0.5 4.1 of 5
Incident rate Global employee
Incident rate per 100 FTEs
satisfaction
10% 21% 18% 2.4x
Organic growth EBITDA margin Cash generated NIBD/EBITDA
by operations
THE BIG
Year in Review
Össur’s 50
th
anniversary year was memorable in numerous ways. Paralympic Records,
World Records, carbon neutrality, new products, and noteworthy recognition on many
fronts. Strong partnerships with our customers and end-users continue to strengthen our
commitment to Life Without Limitations
®
.
Januar
y
February
March
Marie-Amélie Le Fur
Össur announced it will be Carbon
Neutral in 2021.
Team Össur member Marie-Amélie Le Fur,
broke her own world record in long jump to
6.14m at the Para Grand Prix in Dubai.
Össur celebrated the International Day of
Women and Girls in Science.
Össur’s stand at ISPO 2019, held in Kobe,
Japan, chosen as one of the best booth
designs and featured in “The Booth
Design” book, published in 2021.
WIPO
Citrix Innovation Award
Össur won the 2020-2021 Citrix
Innovation Award.
Össur’s Diversity, Equity & Inclusion
statement published.
Össur recognized by the World Intellectual
Property Organization (WIPO) for its
intellectual property leadership in conventional
mobility assistive technologies.
O&P Almanac
Össur’s 50
th
anniversary kicks off,
celebrating 50 years of Life Without
Limitations
®
.
Össur featured in O&P Almanac.
April
May
Jun
e
Rebound
®
DUAL Recover
GIVE
i-Limb
®
Quantum
Rebound
®
Post-Op Elbow
Markus Rehm
Team Össur member Markus Rehm breaks
his own long jump world record from 8.48m
to 8.62m at the IPC European
Championships in Poland.
The Netflix documentary Rising Phoenix won
two prestigious Sports Emmy Awards. The
film features Team Össur athletes Bebe Vio
and Ntando Mahlangu.
Renowned British designer Ilse Crawford
featured the i-Limb
®
in a Good Design
Masterclass episode.
Cheetah
®
Össur launched three new, next-
generation Cheetah
®
running prosthesis
and the Rebound
®
DUAL Recover brace.
Össur introduced the Össur Give Back
Program, giving all employees globally one
volunteer day per year.
Team Össur member Fleur Jong broke her
own world record in the long jump and
becomes the first double amputee to jump
over 6 meters (6.02m).
Fréttablaðið
An 8-page spread in Fréttablaðið, an
Icelandic daily newspaper, to celebrate
Össur’s 50
th
anniversary.
Össur launched the new Rebound
®
Post-
Op Elbow, the lightest brace of its kind.
Össur Ambassadors participated in the “Tell
me you’re an amputee without telling me you
are an amputee” challenge on Instagram.
6
ÖSSUR ANNUAL REPORT
THE BIG
Year in Review
Jul
y
August
September
Interview with Team Össur member Fleur
Jong on Primetime Dutch television,
reaching 1.4 million viewers.
Tokyo Paralympic Games - Team Össur
won 28 medals, set four new World
Records and three new Paralympic
Records.
Össur Ambassador from Spain, Marta
Casado (with her Cheetah
®
Knee and Flex-
Run™) is the face of a new campaign by
“Lefties”, an international clothing brand.
Össur DACH opened a new office in
Cologne, Germany.
Team Össur member Trenten Merrill
featured in the LA Times.
Össur supports the #WeThe15 global
movement, a public campaign for
disability visibility, inclusion and
accessibility.
Össur featured in L’Equipe, the leading
sport magazine in France.
October
November
December
NPC Iceland
Fleur Jong
Rebound
®
ACL
Össur + CAF Running
& Mobility Clinic
Hilmar Snær
Örvarsson
Össur extended its 30-year long
partnership with the Icelandic Disabled
Sports Association (NPC Iceland).
Össur named one of Medtech’s 100
largest players.
Team Össur member Marko Cheseto
Lemtukei set another new World Record at
the 2021 New York Marathon with a time
of 2:35:55.
Össur had a great showing at the NYC
Marathon with Marko Cheseto, Richard
Whitehead, Rudy Garcia-Tolson, and Ernst
van Dyk all participating in the grueling
marathon with great results.
The first Össur + CAF Running & Mobility
Clinic of 2021 in Denver was featured in
Amplitude Magazine.
Ntando Mahlangu
Real Bodies exhibition
Team Össur member Fleur Jong featured on
the cover of Women’s Health Magazine.
The world’s most renowned surgeons met in
Stockholm to discuss Össur’s Rebound
®
ACL brace.
Össur products featured in the famous
Real Bodies exhibition in Bologna, Italy.
Hilmar Snær Örvarsson, leading
para-alpine skier, joined Team Össur.
Team Össur member Ntando Mahlangu
named GQ Magazine’s Sportsperson of
the Year.
Jon Sigurdsson, Össur’s President and CEO
announces plans to retire after Q1 2022.
Sveinn Sölvason, Össur’s Chief Financial
Officer named successor.
7
ÖSSUR ANNUAL REPORT
THE BIG
Össur at a Glance
We Improve People’s Mobility
Össur is a global leader in non-invasive orthopaedics;
innovating, producing, and providing advanced and
innovative technological solutions within the prosthetics and
bracing & supports market. Our mission is to improve the
mobility of our end-users so they can live their Life Without
Limitations
®
.
Since the foundation of Össur in 1971, 50 years ago, the
Company has grown through a healthy combination
of organic development and acquisitions, both in
Prosthetics and Bracing & Supports. Össur has a strong
global presence in its industries and key markets and is
well positioned to leverage future growth opportunities.
Össur’s main focus areas are innovation, growth and
efficiency. Össur is listed on Nasdaq Copenhagen,
has operations in 35 countries and has around 4,000
employees across the globe. Össur is signatory to the
UN Global Compact, UN Women’s Empowerment
Principles, contributes to the UN Sustainable
Development Goals and became carbon neutral in
2021.
Life Without Limitations
®
We strive to create a Life Without Limitations
®
for our
end-users. They are at the core of everything we do,
and we specialize in providing qualitative and
comprehensive solutions to their wide range of
individual needs.
Our End-Users
We help our end-users to advance in their everyday life
and pursue their goals without limitations. Prosthetics are
used by individuals who are living with limb loss
or limb difference for a variety of reasons. Vascular
disease, diabetes, trauma, and congenital defects are
some of the more common reasons. Bracing &
Supports are used by individuals who develop knee
pain, are diagnosed with osteoarthritis in their joints,
incur fractures to their ligaments or injure themselves
causing movement impairment.
World Class Innovation Capabilities
Significant investment in research and development has
resulted in over 2,000 patents, award-winning designs,
successful clinical outcomes, and consistently strong
market positions. Every year, we invest around 5% of
sales in research and development to progress and
enhance our product portfolio for the benefit of our end-
users. Össur is a pioneer of advanced technology with top
tier brand recognition based on quality and high reliability,
providing scientifically proven solutions that deliver
effective clinical outcomes. We emphasize listening to and
learning from our end-users to develop successful
products. By understanding our end-users’ needs, through
continuous development and pushing the boundaries of
technology, we continue to create some of the best
products and services available
in Prosthetics and Bracing & Supports. In 2021, we
introduced 14 new products to the market.
8
ÖSSUR ANNUAL REPORT
THE BIG
Our Segments
Össur operates within two market segments of the orthopaedic market: Prosthetics and Bracing & Supports. Prosthetic
products include artificial limbs and related products for amputees while bracing & supports products are used to support
joints and other body parts, both for preventive and therapeutic purposes.
9
ÖSSUR ANNUAL REPORT
Our Segments
Prosthetics Bracing & Supports
63%
of total sales
37%
of total sales
Sub-Segment
End-User Improving
Profile Mobility
Injury Solutions
People Products
recovering stabilizing
from fractures, joints and
ligament injuries improving or
need a healing
post operative
treatment
OA Solutions
People Non surgical
living with treatment
Osteoarthritis by unloading
(OA) affected joint
with braces
Sub-Segment
End-User Improving
Profile Mobility
Mechanical
People living Broad product
Products
with lower offering for
extremity lower extremity
amputation prosthesis
Bionic
People living Advanced
Products
with lower and microprocessor
upper extremity controlled feet,
amputation knees, hands
and fingers
THE BIG
Our Products
Prosthetics
Össur’s prosthetics product portfolio includes a full range
of premium lower and upper limb prosthetic
components. The portfolio ranges from solutions to
support low active individuals who may be challenged to
maintain the ideal balance of safety, comfort, and
mobility, to solutions designed to enable especially
active people to excel and engage in high-impact
activities.
Bracing & Supports
OA solutions
Össur’s osteoarthritis (OA) solutions are designed to
enhance quality of life, reduce pain, and improve
mobility for people living with osteoarthritis. Össur
offers the Unloader One
®
range of knee braces that
relieve pain from knee osteoarthritis, as well as the
Unloader
®
Hip which is designed to reduce pain by
optimizing load dispersion for patients suffering from mild
and moderate osteoarthritis of the hip.
Injury solutions
Össur’s injury solutions are designed for people
recovering from fractures, ligament injuries or for those in
need of post-operative treatment solutions. These
solutions are designed to support the healing process of
bone and soft tissue injuries. Several of these products
come with the Functional Healing
®
seal that signifies a
clinically validated healing solution that helps enhance the
body’s natural healing process while maximizing mobility.
10
ÖSSUR ANNUAL REPORT
Who are the end-
users that benefit
from our solutions?
Prosthetics
•
High and low active
lower limb amputees
•
Upper limb amputees
•
Children living with limb loss
•
Athletes living with limb loss
Bracing & Supports
•
People that require post-operative
treatment
•
People in rehabilitation for
PCL ruptures
•
People requiring protection and
joint stabilization
•
People with foot and ankle injuries
that require immobilization
•
People with mild to severe
osteoarthritis
•
People seeking treatment for
venous ulcers and swelling
FINANCIAL
Five-Year Overview
11
ÖSSUR ANNUAL REPORT
Five-Year Overview
USD million
2021
2020
2019
2018
2017
Net sales
719
630
686
613
569
Gross profit
455
391
439
387
355
Operating expenses (excl. other income)
360
338
341
304
280
EBITDA
149
93
141
107
97
EBITDA before special items
149
93
150
115
103
EBIT
97
28
98
79
75
Net profit
66
8
69
80
58
Sales growth
Sales growth USD %
14
(8)
12
8
9
- Organic growth %
10
(10)
5
5
5
- Currency effect %
3
0
(4)
1
0
- Acquired/divested business %
1
2
11
2
4
Balance Sheet
Total assets
1,247
1,214
1,091
914
793
Equity
627
577
569
538
500
Net interest-bearing debt (NIBD)
363
381
302
180
121
Cash Flow
Cash generated by operations
128
119
120
92
90
Free cash flow
74
68
63
39
55
Key ratios
Gross profit margin %
63
62
64
63
62
EBIT margin %
14
4
14
13
13
EBITDA margin %
21
15
21
18
17
EBITDA margin before special items %
21
15
22
19
18
Equity ratio %
50
48
52
59
63
NIBD to EBITDA
2.4
4.1
2.0
1.6
1.2
Effective tax rate %
24
38
24
18
16
Return on equity %
11
1
12
15
12
CAPEX to net sales %
3.7
3.8
4.6
5.0
3.4
Full time employees on average
3,761
3,505
3,382
2,775
2,948
Market
Market value of equity
2,724
3,380
3,340
2,055
1,871
Number of shares in Millions
423
423
425
431
437
Diluted EPS in US cents
15.5
1.9
16.2
18.7
13.3
FINANCIAL
Performance in 2021
Financial Performance in 2021
•
Sales amounted to USD 719 million in 2021. Sales increased by 11% in local currency in 2021 and by 10% organic, in
line with the guidance for 2021, compared to a decline in local currency of 8% organic and a decline of 10% organic in
2020.
•
Prosthetics sales increased by 11% organic and Bracing & Supports sales increased by 8% organic in 2021.
•
In 2021, Össur continued to invest in growing the infrastructure in new and Emerging Markets and went direct in seven
new markets in the Eastern part of Europe. Now, Össur has operations in 35 countries globally.
•
Gross profit margin was 63% in 2021 compared to 62% in 2020.
•
The EBITDA margin for 2021 was 21% in line with guidance, compared to an EBITDA margin of 15% for 2020 that was
affected by extraordinary costs related to divestments.
•
Net profit in 2021 amounted to USD 66 million compared to USD 8 million in 2020.
•
Cash generated by operations amounted to USD 128 million or 18% of sales in 2021.
•
In 2021, Össur completed acquisitions of entities with combined annual sales of USD 26 million.
•
NIBD/EBITDA was 2.4x at the end of 2021, within the target level of 2.0x-3.0x.
•
Össur has decided to restart its share buyback program and will commence it shortly. The share buyback program was
put on hold on 17 March 2020 due to the impact of the COVID-19 pandemic, as the net interest-bearing debt to EBITDA
ratio was temporarily above the target level. With emphasis on growth opportunities, value -adding investment
opportunities and acquisitions, Össur has decided to discontinue dividend payments and focus on returning excess
capital to shareholders via purchase of own shares in accordance with the Company’s updated Capital Structure and
Capital Allocation Policy.
•
The financial guidance for the full year 2022 is 6-9% organic sales growth, 20-21% EBITDA margin before special
items, 3-4% CAPEX of sales, and an effective tax rate of 23-24%.
12
ÖSSUR ANNUAL REPORT
Key Financials and Guidance
USD million
FY 2021
FY 2020
FY Guidance 2022
Net sales
719
630
Sales growth, organic
10%
(10%)
6-9%
Gross profit margin
63%
62%
EBITDA
149
93
EBITDA margin
21%
15%
EBITDA before special items
149
93
EBITDA margin before special items
21%
15%
20-21%
CAPEX as % of sales
4%
4%
3-4%
Effective tax rate
24%
38%
23-24%
FINANCIAL
Financial Performance
Sales Performance
Sales amounted to USD 719 million in 2021 compared to USD 630 million in 2020, corresponding to a 10% increase
organic, 11% increase including acquisitions/divestments (local currency growth) and 14% increase reported (USD
growth).
Currency movements in 2021 impacted sales growth positively by USD 20 million, which corresponds to about a 3%-
point positive effect on the reported growth rate.
Throughout 2021, Össur completed several acquisitions of entities with full year sales of around USD 26 million.
* growth/(decline)
* growth/(decline)
13
ÖSSUR ANNUAL REPORT
Sales by Segments
Sales by Segments
(USD million)
FY 2021
Organic
growth*
Δ Acq. / div.
Δ Curr. Effect
USD growth*
Prosthetics
453
11%
8%
2%
22%
Bracing & Supports
266
8%
-9%
4%
3%
Total
719
10%
1%
3%
14%
Sales by Regions
Sales by Regions
(USD million)
FY 2021
Organic
growth*
Δ Acq. / div.
Δ Curr. Effect
USD growth*
Americas
339
8%
2%
0%
10%
EMEA
315
12%
0%
6%
18%
APAC
65
9%
0%
7%
16%
Total
719
10%
1%
3%
14%
FINANCIAL
Business
Operations
Gross profit for 2021 amounted to USD 455 million or
63% of sales compared to USD 391 million or 62% of
sales for 2020. In the second half of 2021, the gross profit
margin was affected by temporary variable cost increases
and related negative impact on productivity. Össur’s
manufacturing sites and warehouses operated at normal
capacity within local COVID-19 restrictions, but supply
chain challenges have had a short-term negative effect on
productivity. Supply chain cost increases affected cost of
goods sold negatively by USD 10 million on a full-year
basis in 2021.
Operating expenses (OPEX) amounted to USD 358
million or 50% of sales for 2021. Excluding
extraordinary OPEX in 2020, the main driver for OPEX
growth in 2021 is variable sales and marketing cost, as
customer activities and variable payroll is higher
compared to last year. In addition, cost in relation to
further investments in the Emerging Markets platform and
digital initiatives are impacting OPEX growth.
Management remains focused on managing cost with
the ultimate objective to maintain and increase
profitability as sales normalize.
Operating Profit
In 2021, EBITDA amounted to USD 149 million or 21% of
sales compared to EBITDA of USD 93 million or 15% of
sales in 2020. The EBITDA in 2020 was impacted
by extraordinary items in the amount of net USD 11
million. Currency impact on the EBITDA margin net of
hedge was positive by about 30 basis points for 2021.
Prosthetics sales in 2021 amounted to USD 453 million
and increased by 11% organic. Sales of bionic products
accounted for 21% of Prosthetics component sales
in 2021. Bionic sales growth was strong in all regions
towards the end of the year, back to pre-pandemic levels
of 23% of Prosthetics component sales in Q4 2021.
Although bionic products have been impacted more by
COVID-19 than mechanical products due to the more
intensive bionic sales and fitting procedure as well as a
more elaborate reimbursement process, this development
indicates that Bionics are gradually back on track. Bracing
& Supports sales in 2021 amounted to USD 266 million
and increased by 8% organic.
The COVID-19 pandemic has impacted Prosthetics
and Bracing & Supports differently. Throughout the
COVID-19 pandemic, Prosthetics sales have been
more resilient than Bracing & Supports. The demand for
prosthetic solutions is, in the markets that Össur
generates the majority of sales, mostly driven by
servicing the existing amputee population with
maintenance, renewals, and upgrades of prosthetic
solutions. The demand for bracing & supports products is
largely driven by injuries, surgeries, and prevalence of
osteoarthritis (OA). The COVID-19 pandemic and the
associated measures to control the spread of the virus
have had a significant impact on amateur sports and
activity levels that have resulted in fewer injuries. It is not
expected that there will be pent-up demand for injury
solutions. COVID-19 has impacted volumes of elective
surgeries such as knee replacement surgeries, that drive
demand for post-operative bracing solutions. OA bracing
sales have also been impacted, primarily due to
limitations to physician access.
14
ÖSSUR ANNUAL REPORT
Sales in 2021 by Segments
USD 719
million
Prosthetics
63%
Bracing & Supports
37%
FINANCIAL
Financial Items, Income Tax
and Net Profit
Net financial expenses for 2021 amounted to USD 11
million, compared to USD 16 million in 2020.
Income tax amounted to USD 21 million in 2021,
corresponding to a 24% effective tax rate.
Net profit in 2021 amounted to USD 66 million
compared to USD 8 million profit in 2020. Diluted
earnings per share in 2021 amounted to 15.5 US cents
compared to 1.9 US cents in 2020. In 2020, net profit
was impacted by extraordinary items related to
divestments, acquisitions, litigation, severance, and
government grants, in addition to COVID-19.
Cash Flow
Cash flow was strong in 2021 despite prioritizing
production and product availability while impacted by
COVID-19 and supply chain challenges. Cash generated
by operations amounted to USD 128 million or 18% of
sales for 2021 compared to USD 119 million or 19% of
sales for 2020.
Capital expenditures for 2021 amounted to USD 27 million
or 4% of sales, compared to USD 24 million, also 4% of
sales for 2020.
Bank balances and cash equivalents amounted to USD
85 million at the end of 2021 and USD 109 million of
existing facilities were undrawn. Bank balances and cash
equivalents in addition to undrawn credit facilities at the
end of 2021, therefore, amounted to USD 194 million.
Capital Structure
Net-Interest Bearing Debt
Net interest-bearing debt, including lease liabilities, at
year-end 2021 amounted to USD 363 million compared to
USD 381 million at year-end 2020. Net interest- bearing
debt to EBITDA corresponded to 2.4x at year- end 2021
within the target range in the Company's Capital Structure
and Capital Allocation Policy (2.0x-3.0x NIBD/EBITDA).
Share Buybacks and Dividends
The share buyback program will shortly commence
again. The share buyback program was put on hold on
17 March 2020 due to the impact of the COVID-19
pandemic, as the net interest-bearing debt to EBITDA
ratio was temporarily above the target level. The
net interest-bearing debt to EBITDA was within the
target range at year-end 2021, at 2.4x. The purpose of
the share buyback programs is to adjust the capital
structure in line with the desired level of net debt to
EBITDA. The Company's Capital Structure and Capital
Allocation Policy has been updated to reflect the focus
on returning excess capital to shareholders via purchase
of own shares and discontinuing dividend payments,
with emphasis on growth opportunities,
value-adding investment opportunities and acquisitions. At
year-end 2021, treasury shares totaled 739,862.
15
ÖSSUR ANNUAL REPORT
FINANCIAL
Outlook for 2022
Financial Guidance for 2022
16
ÖSSUR ANNUAL REPORT
Guidance
Guidance FY 2022
Actual FY 2021
Sales growth, organic
6-9%
10%
EBITDA margin before special items
20-21%
21%
CAPEX as % of sales
3-4%
4%
Effective tax rate
23-24%
24%
Team Össur Paralympic Success
The Paralympic Games took place in Tokyo in September 2021 after having been postponed for a year due to the
pandemic. A global team of athletes who use Össur Prosthetics won 28 medals and set new World and Paralympic
Records. Competitors using the iconic Össur Cheetah
®
sports blades, easily identified by their yellow stripe, dominated
several categories of competition, particularly Athletics.
WORLD
RECORDS
4
SILVE
GOLD
BRONZ
PARALYMPIC
RECORDS
3
Össur athletes set four new World Records and three
new Paralympic records, including a complete
sweep of the Women’s T62-64 Long Jump, led by gold
medalist Fleur Jong of The Netherlands, who also set a
new World Record in the event. Marie-Amélie Le Fur
from France, won the silver medal and Marlene van
Gansewinkel, also from the Netherlands, won the bronze
medal. Marlene also set two new Paralympic Records
while winning gold in both the T64 100m and 200m
events.
Össur athletes also swept the Men’s T61 200m, led
by gold medalist Ntando Mahlangu of South Africa,
followed by the Great Britain’s Richard Whitehead.
Ntando also set a new World Record and took gold in
T61/T63 Long Jump. Germany’s Markus Rehm,
continued his winning streak in T64 Long Jump, winning
his fourth consecutive gold medal and leading a total
sweep by Össur athletes in that category.
In Cycling, Jody Cundy marked his seventh consecutive
Paralympic Games by setting a new World Record and
taking gold as a member of Great Britain’s Team Sprint
Cycling, as well as a silver in the individual 1km Time Trial.
In Wheelchair Fencing, Italy’s Bebe Vio successfully
defended her gold medal in the Foil B individual event and
earned an additional silver medal as a member of Italy’s
Foil B Team.
It was an extraordinary time for sport and the athletes who
participated not only overcame the postponement of the
Games, but also the considerable challenges
of competing during a global pandemic. Their
determination and resilience rose to new heights with
incredible performances. If Össur athletes were
counted as a country, Össur’s gold medal wins would
have ranked it as 13
th
overall among all 162
participating nations.
17
ÖSSUR ANNUAL REPORT
OUR
Markets
Össur operates within the global non-invasive orthopaedic industry, delivering
advanced and innovative solutions within the prosthetics and bracing &
supports markets.
Medical Device Market
18
ÖSSUR ANNUAL REPORT
Cardio-
vascular
Ophthal-
mology
General
Surgery
Neurological
Products
Orthopaedics
Diagnostics
Imaging
& Other
Urology
Commodity
Supplies
Arthroscopy
Reconstructive
Spinal
Trauma
Bracing &
Supports
Prosthetics
Pain
Management
Ancillary
Products
Bone
Growth
OUR
The Prosthetics Market
Prosthetics include artificial limbs and related products for
individuals who were born without limbs or who have had
limbs amputated. Össur offers a full range of premium
lower and upper limb prosthetics, including feet, knees,
hands, liners, and other components.
The size of the global prosthetics component market is
estimated to be approximately USD 1.3-1.4 billion.
Össur is the second largest company operating in
Prosthetics with a market share estimated at 23-24%.
The growth rate of the prosthetics market is estimated to
be 3-5%. We estimate that the market declined 6-7% in
2020 due to the COVID-19 pandemic but that the market
was largely back to pre-COVID levels at the end of 2021.
Volume growth in the market is estimated to be moderate.
Volume growth is determined by a relatively stable global
amputee population and a moderate increase in the
number of new amputees that get fitted with a prosthesis
every year. Pricing in the prosthetics market is on average
relatively stable. Growth in the prosthetics industry is
mainly driven by increased utilization of higher quality
prosthetics that lead to increased mobility and quality of
life for the end-users as well as growth in emerging
markets due to increased utilization of prosthetic solutions
in the markets, better healthcare coverage and increasing
disposable income.
Source: Össur Management estimates
Note: Estimates only account for component sales
from providers to suppliers, i.e. not clinical services
* Increased penetration of high-end innovative products
19
ÖSSUR ANNUAL REPORT
Prosthetics Market
Market Size
USD billion
1.3-1.4
Market Share
23-24%
Market Growth
3-5%
Moderate volume growth
Relatively stable pricing
Positive product mix*
Primary Sales
Channels
Orthotic &
Prosthetic clinics
(O&P)
OUR
The Bracing & Supports Market
Bracing & Supports include products used to provide
support for therapeutic and preventative purposes. Össur
offers a comprehensive line of products with primary focus
on osteoarthritis and injury solutions including devices
supporting the spine, knee, hip, foot, ankle, and hands.
The size of the global bracing & supports product market
that Össur operates in is estimated to be approximately
USD 2.7-3.0 billion and Össur’s market share is estimated at
5-7%.
The growth rate of the bracing & supports market is estimated
to be 2-3%. We estimate that the market declined by 15-20% in
2020 as the demand for bracing & supports products is largely
driven by injuries, surgeries, and physician access which was
affected by the COVID-19 pandemic and the associated
lockdowns, but we estimate that the market was largely at pre-
COVID levels at the end of 2021.
Market growth is driven by a healthy volume growth in
the bracing & supports market supported by global
healthcare trends such as an aging and more active
population. Price levels are relatively stable as bracing &
supports products are reimbursed in most of the markets that
Össur operates in. For some markets, there is moderate
price pressure for selected product categories, mainly
products of a lower innovation level. In addition, measures
such as competitive bidding for off-the-shelf spinal and back
braces in the US which came into effect
in January 2021, puts further pressure on pricing for certain
products. Increased amateur sports and activity levels,
increased volumes of elective surgeries such as knee
replacement surgeries, that drive demand for post- operative
bracing solutions and the utilization of high-end innovative
products such as the Unloader
®
OA bracing products
support market growth in Bracing & Supports.
Source: Össur Management estimates
Note: Estimates only account for component sales
from providers to suppliers, i.e. not clinical services
* Increased penetration of high-end innovative products
20
ÖSSUR ANNUAL REPORT
Bracing & Supports Market
Market Size
USD billion
2.7-3.0
Market Share
5-7%
Market Growth
2-3%
Moderate volume growth
Relatively stable pricing
Positive product mix*
Primary Sales
Channels
Orthotic & Prosthetic
clinics (O&P)
Hospitals
Orthopaedic clinics
OUR
Orthopaedic Industry Stakeholders
In the orthopaedic industry, many stakeholders and decision makers are involved in the purchasing decision.
Stakeholders can be categorized into five groups.
Orthopaedic Industry Stakeholders
Industry Trends Create Opportunities
Economic development around the world and global macrotrends create demand and opportunities for growth. We have
selected six trends that have a positive impact on demand for Össur’s products and services:
•
•
•
The global population of 65 and older is increasing and so is the amputee population
A growing number of people afflicted by vascular disease, the leading cause of amputation An
increased number of fractures, joint instability, and joint afflictions
An aging and more
active population
•
•
•
Global economic growth will be powered by emerging markets
Disposable income increasing in emerging markets, willingness to pay out-of-pocket
Increasing healthcare coverage in emerging markets
A growing middle class
in emerging markets
•
•
•
Healthcare providers increasing efforts to manage cost
Demand for cost effective solutions without compromising quality
Consolidation in patient care
Increased pressure on
healthcare budgets
•
•
•
New innovative technologies being accepted for reimbursement Gradual
transition from volume to value-based payment in healthcare
Increased acknowledgment of total healthcare economic benefits of Bionics and OA bracing
Increased penetration
of new technologies and
high-end products
•
•
•
Investments in people and processes to adapt to changing healthcare requirements
Product development to meet prevailing regulatory requirements
Increasing importance of digital and personal data security
Increasing regulatory
requirements
•
•
•
Increasing healthcare coverage and better access to patients New
amputees more often get fitted with a prostheses
Innovative products enabling more amputees to benefit from using a prostheses
Improved treatment
options
21
ÖSSUR ANNUAL REPORT
End-Users Prescribers Providers Payers Influencers
Individuals that use Healthcare Healthcare Public and Healthcare
the products. professionals professionals who private insurance systems, insurance
who prescribe the provide end-users companies. Around companies, medical
products, based with products, such 90% of Össur associations, end-
on the condition/ as CPO’s, doctors, products are users and their
clinical indication of podiatrists. reimbursed by a families.
the end-user. third party.
OUR
Business
Össur develops, manufactures, and brings to market a wide range of prosthetics and bracing & supports solutions with
high standards of quality. These high-end products are developed with the objective to improve the mobility of end-
users. The products are delivered to the end-users through healthcare providers who specialize in assisting individuals
who suffer from movement impairment. Össur’s products are in most cases reimbursed by public or
private insurance. Every year, Össur makes a significant investment in research and development to further advance
products and technologies for the benefit of all stakeholders.
Business Model
22
ÖSSUR ANNUAL REPORT
Payers
•
Healthcare systems
•
Insurance companies
•
Out-of-pocket
End-user
•
OA
•
Amputation
•
Injuries
Providers
•
O&P clinics
•
Hospitals
•
Retail
Prescribers
•
Surgeons
•
Physicians
•
Doctors
Innovation
•
Technology trade-up
•
High-end products
Manufacturing
•
Consolidated
footprint
•
High quality and
sustainability
Sales
•
Direct Sales
•
Distribution
OUR
The End-Users
End-users include lower and upper extremity amputees
who have lost a limb due to, for example, vascular
diseases including diabetes, trauma, and cancer. They
also include individuals who require support as they may
have, for example, developed osteoarthritis in knee or hip
ligaments, incurred temporary immobilization, or require
enhanced healing after surgery.
By collaborating closely with the end-users, Össur gains a
better understanding of their needs and challenges.
In turn, Össur improves their mobility by providing new
technologically advanced products to achieve their
goals. The involvement with the end-user is not
limited to research and development as there is also an
aim to provide quality services, directly through clinics
operated by Össur or indirectly through customer service
programs.
Source: Össur Management estimates
23
ÖSSUR ANNUAL REPORT
Prosthetics End-Users
1.000k
1%
>3%
800k
600k
400k
200k
0
2000 2005 2010 2015
New major lower limb amputees
New amputees fitted with a prostheses
Prosthetics End-Users
>750,000
New major lower limb
amputees per year
Lower Limb Amputations
Vascular related diseases
70%
Trauma
20%
Other
10%
>25,000
New upper limb amputees
per year
Upper Limb Amputations
Trauma
70%
Other
30%
30-40%
of new amputees are fitted with
prosthetic solutions
65-70
is the average age of the
amputee population
OUR
Manufacturing Locations
Research and Development
Össur develops Prosthetics and Bracing & Supports,
from an idea to a finished product. With every product,
the aim is to deliver cost effective medical solutions that
provide value for end-users and the healthcare system.
When a product is designed, Össur accumulates medical
and biomechanical data during the development process
to verify product safety and efficacy before the product
launch. Also, to obtain independent clinical evidence for
product outcomes as well as health economic data,
Össur initiates and promotes clinical studies in
cooperation with leading scientists, institutions, and
healthcare professionals in the field.
Össur supports open collaboration within the industry and
academia. An example of such an initiative is the
collaboration between Össur and the Alfred Mann
Foundation on the development and licensing of a
myoelectric sensor system (IMES
®
). The solution utilizes
implantable sensors that collect signals from the
amputee’s muscles and translate those into prosthetic
movements.
Manufacturing and Quality
Össur maintains a strong global manufacturing function.
Manufacturing of advanced prosthetic solutions, including
bionics, takes place in Iceland and Scotland.
Manufacturing of other prosthetics solutions, components
and premium bracing solutions takes place in Mexico.
Össur outsources the manufacturing of soft goods to
China. At Össur, there is a continuous strive for efficiency,
which includes finding ways to optimize the manufacturing
process.
Great emphasis is placed on quality, and it is an intrinsic
part of our processes. Össur has had a certified Quality
Management system in place since 1993 which is based on
ISO management standards and complies with the
applicable medical device regulations in the countries that
Össur operates in. Össur is certified to the global ISO
13485:2016 Medical Device Standard and the Medical
Device Single Audit Program (MDSAP).
The new European Medical Device Regulation (EU)
2017/745 (MDR) came into effect in late May 2021. The
aim of the regulation is to ensure patient safety, increase
transparency, and to enhance the quality of medical
devices. Össur was well prepared and fully ready for the
regulation to take effect. The Company’s extensive
globally aligned quality management system has been
updated to the MDR requirements and it has gone
through a successful system audit by Össur’s notified
body BSI.
24
ÖSSUR ANNUAL REPORT
OUR
Sales and Marketing
Össur operates within a highly specialized industry where
the primary customers are specialized healthcare providers
who provide and fit individuals with Össur products. In
Prosthetics these customers are Orthotic and Prosthetic
(O&P) clinics and in Bracing & Supports
it is a combination of O&P clinics, hospitals, and surgery
centers. In a few selected markets, Össur operates its own
O&P clinics. Össur largely sells its products through its own
direct sales network.
Prescribers, Providers and Payers
Prescribers include healthcare professionals who
prescribe products based on the clinical indication of the
end-users. These include orthopaedic surgeons, non-
surgical physicians, and emergency physicians as well as
other professionals providing medical diagnosis.
Providers are healthcare professionals who provide end-
users with prosthetic and bracing & supports products,
and related services. These include certified prosthetists
and orthotists (CPOs) working at O&P clinics, durable
medical equipment (DME) clinics, orthopaedic clinics,
and hospitals. Many providers not only recommend
specific products but also fit and tailor-make certain
products. For non-reimbursed products, a provider can
be a pharmacy or a sports store.
Payers include healthcare systems and insurance
companies. In most cases, when an end-user has
been fitted with a product, Össur’s customers claim
reimbursement from the relevant public institutions or
private insurance companies. Around 90% of Össur’s
products are estimated to be reimbursed by a third party
but reimbursement systems vary substantially between
countries. In other cases, the end-user pays for the
products out-of-pocket.
25
ÖSSUR ANNUAL REPORT
MEMORABLE
MOMENTS
1971
Össur was founded in 1971 by Icelandic prosthetist
Össur Kristinsson,
together with several Icelandic
disability organizations. Initially, the company
served only as a prosthetic clinic for the domestic
Icelandic market.
1986
In 1986,
Össur Kristinsson developed the world’s
first silicone prosthetic liner called Iceross
®
. This was
the company’s first patented invention and marked the
beginning of Össur’s commitment to innovation and
technological advancements for the benefit
of amputees around the world. Össur started its
international expansion, in the same year as Össur
received its first patent.
2000
Össur acquired Flex-Foot in 2000.
Originally developed
by Van Phillips in the 1980’s, Flex-Foot prospered as the
company that first brought carbon fiber prosthetic feet to
the market. That formed the basis for further innovation
and development by Össur of carbon fiber feet that
continue to be recognized for function and quality the
world over.
Since then,
Össur has grown
both through organic growth and
external growth spurred by over 60 acquisitions in the past 20 years.
26
ÖSSUR ANNUAL REPORT
OUR
Strategy
Össur’s mission is to improve people’s mobility and our vision is to continue to be a leading company in the non- invasive
orthopaedics market globally. Össur is a pioneer of advanced technology and by listening to our end-users and
understanding their needs, as well as continuously improving and pushing the boundaries of technology, we continue to
create some of the best products and services available in Prosthetics and Bracing & Supports. Our aim is to create a Life
Without Limitations
®
for all our end-users.
Össur will continue to generate value for individuals and healthcare systems by focusing our business strategy on
valuable product innovation, delivering profitable and sustain able growth, and efficiency.
In 2021, Össur continued to invest around 5% of sales in
research and development, amounting to USD 32
million, and launched 14 new products to the market.
In 2021, Össur’s next generation Power Knee was
introduced and received good feedback. The Power Knee
is the world’s first actively powered prosthetic knee. This
new version of the knee is ideal for amputees seeking
increased assistance from their prosthetic device and
those who require better symmetry, more natural gait, and
increased participation in the daily activities they enjoy.
The introduction of the new Power Knee marks a new era
in powered prosthetics and is the result of years of research
and development expertise as well as patient and clinician
feedback. Össur has championed actively powered knee
technology for
over 15 years, understanding that the added benefit of
power improves patient’s short and long-term
outcomes.
Össur also successfully launched the new Sport
Solutions offering that Össur and Nike partnered to
design for athletes, leveraging Össur’s expertise in
running prosthetics with Nike’s traction and sole
technologies. Össur’s renowned Cheetah
®
running feet
design was improved and a specific long jump foot was
included. The Cheetah
®
feet are compatible with the Nike
Traction SoleX, an interchangeable sole system and a
new generation of the Nike Spike Pad and five new
alignment adapters were introduced.
In addition, Össur launched a variety of products within
Bracing & Supports during the year. Amongst product
launches were knee braces under the Rebound
®
umbrella,
adding to a versatile portfolio of high-quality injury
recovery solutions for all the stages of treatment, from
rehabilitation to recovery.
Furthermore, Össur is creating solutions for ease of
doing business for our customers, such as the Össur
portal as well as applying innovative technology to
enhance processes. Össur fosters an inclusive and
innovative culture with its diverse workforce.
Össur has a strong IP portfolio, with more than 2,000
patents and patent applications and the Össur brand is
protected by more than 500 trademark registrations. In
2021, the World Intellectual Property Organization
(WIPO) ranked Össur second in the world for top patent
applicants in conventional mobility assistive technologies.
27
ÖSSUR ANNUAL REPORT
Innovation
We execute ideas that add value
We embrace innovation in all our actions by creating value for our customers through
technology trade-up and ease of doing business to ensure our consistently strong position in
the market.
OUR
Organic sales growth was 10% in 2021 in line with the
guidance for the year. Organic growth was especially
strong in the EMEA and APAC regions apart from
Australia that was more affected by the COVID -19
pandemic. Although affected by the pandemic, sales in
Americas, our largest market, continued to normalize.
Bionic sales growth was strong in all regions towards the
end of the year, indicating that Bionics are back
on track. This reconfirms our belief that the long-term
prospects and underlying fundamental drivers of the
prosthetics and bracing & supports markets are not
expected to change. We have taken on challenges
presented by the COVID-19 pandemic throu ghout the
year and managed to maintain our product supply and
continued our investments in our global growth platform
as well as in research and development.
Össur has grown through a combination of organic and
acquisitive growth with a Compounded Average Sales
Growth rate of 17% since the Company was listed in
year 1999. Össur’s main growth priorities are
Technology Trade -up, Emerging Markets, partnership
services and solutions and acquisitions.
Össur’s strategy includes exploring growth
opportunities through acquisitions that support our
vision of being a global leader in non-invasive
orthopaedics. In the past years, Össur has both
acquired and divested part of the business to
strengthen the focus and support future growt h of
Prosthetics and Bracing & Supports.
Emerging Markets offer a significant growth opportunity as
penetration of prosthetics and bracing & supports products
is still relatively low. We continued to invest
in growing our Emerging Markets platform and further
strengthened our direct sales and infrastructure.
28
ÖSSUR ANNUAL REPORT
Growth
We deliver profitable and sustainable growth
We will achieve profitable and sustainable growth by generating value for individuals,
customers and healthcare systems.
OUR
Gross profit for 2021 amounted to 63% of sales
compared to 62% of sales for 2020. Össur’s
manufacturing sites and warehouses operated at normal
capacity, within local COVID -19 restrictions, but the
gross profit margin was affected by temporary variable
cost increases and related negative impact on
productivity.
The EBITDA margin for 2021 was 21%, in line with the
guidance for the year. The EBITDA margin is slightly
below a normalized level, mainly due to the slow-down in
sales as a result of COVID-19 impact on sales in the
second half of 2021, in addition to supply chain related
cost increases. Furthermore, throughout the COVID-19
impacted period, Össur has continued to invest in research
and development, made investments in digitalization
initiatives and grown the infrastructure in Emerging
Markets by going direct in seven new markets in the
Eastern part of Europe in 2021.
Össur has been investing in an increasingly scalable
infrastructure. As an example, the global manufacturing
platform is consolidating with about 12 fewer locations
since the year 2009. Investments have been made
in centralized procurement (strategic sourcing) and
implementation of a new CRM platform. The shared
service center in Poland supports around 60% of
Össur’s entities and the global IT department which is
supporting the majority of Össur‘s entities. Össur
emphasizes manufacturing efficiency and a continuous
improvement culture while protecting the environment.
Össur has been actively reducing the carbon footprint of
the Company and reached the milestone of being Carbon
Neutral in 2021.
29
ÖSSUR ANNUAL REPORT
Efficiency
We conduct business efficiently
We run efficient operations in the most optimal locations, hire passionate employees and
deliver strong profit and cash flow through manufacturing and operational efficiency.
OUR
Innovation
Strong Intellectual Property
Portfolio
Protecting our innovation with a strong and sustainable
intellectual property portfolio has been a part of Össur’s
strategy since its foundation. We utilize IPR protection
extensively throughout our operations where patents,
design registrations and trademarks are strategically used
to protect the Össur brand and the majority of our products
and technological advances.
At year-end 2021, Össur had around 2,000 granted
patents and 300 patent applications pending.
Furthermore, the Össur brand is prot ected by more
than 600 trademarks and 250 domain registrations
worldwide.
In 2021, the World Intellectual Property Organization
(WIPO) published a first of its kind comprehensive report,
titled WIPO Technology Trends Report 2021: Assistive
Technologies. This is the first study which systematically
investigates patenting and technological trends across the
field of assistive technology at scale, analyzing data on
patent filings from 1998-2019. Key findings in the report
show that Össur ranks second
in the world for top patent applicants in conventional
mobility assistive technologies. Össur was also listed
among the top applicants in patent filings for advanced
prosthetics and exoskeletons and ranks 12
th
in the world
among top patent applicants for emerging mobility
assistive technologies. WIPO’s acknowledgment of Össur’s
contribution to innovation confirms our industry leadership
in research and development and emphasis on intellectual
property driven development.
30
ÖSSUR ANNUAL REPORT
Patent Portfolio
2,000
1,800
1,892
1,723
1,600
1,660
1,400
1,500
1,323
1,200
1,235
1,117
1,000
1,008
937
800
869
752
600
400
404
391
353
375
374 375 379
352
346
317
300
200
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Granted Pending
OUR
Prosthetics
Technology trade-up through innovation has always been
at the core of Össur’s strategy. Applying vast knowledge
and expertise accumulated over the years in proven
technology platforms is the foundation for new products
and solutions that are brought to market regularly. In
2021, eight new prosthetic products were launched.
Since the launch of the first Power Knee™ fifteen years
ago, Össur has championed actively powered knee
technology in Prosthetics, understanding that the added
benefit of power improves patients’ short and long-term
outcomes. In 2021, a new, next generation Power
Knee™ was introduced. The prosthetic knee is ideal for
amputees seeking increased assistance from their
prosthetic device, and for those who require better
symmetry, a more natural gait, and increased
participation in the daily activities they enjoy. The
introduction of the new Power Knee™ marks a new era
in powered prosthetics and is the result of years of
research and development expertise, as well as patient
and clinician feedback.
One of the other highlights of the year was the release of
the new Sport Solutions offering. Össur and Nike partnered
to design a new offering for athletes, leveraging Össur’s
expertise in running prosthetics with Nike’s traction and
sole technologies. Össur’s renowned Cheetah
®
running feet
now have an improved design, and also include a specific
long jump foot. The Cheetah
®
feet are compatible with the
Nike Traction SoleX,
an interchangeable sole system. Additionally, a new
generation of the Nike Spike Pad has been introduced, as
well as five new alignment adapters, for quicker set up
and optimal alignment of the blades.
This year, a global team of athletes who wear Össur’s
renowned Prosthetics, won 28 medals and set new
World and Paralympic Records during the 2020 Tokyo
Paralympic Games. Athletes using Össur’s iconic carbon
fiber Cheetah
®
sports blades, easily identified by their
yellow stripe, dominated several categories of
competition, particularly Athletics.
Constant exploration of innovative technologies aimed at
improving end-users’ mobility is crucial for sustaining a
successful long-term strategy. To ensure Össur’s
continued leadership in the innovation of mobility
solutions, a new Center for New Technologies within
Össur’s research and development department, will focus
on advanced innovative solutions and technologies that
will feed into product development,
as well as invest in projects for the exploration of future
prosthetic platforms.
31
ÖSSUR ANNUAL REPORT
OUR
Bracing & Supports
Össur launched six bracing & supports products during the
year. Amongst the new additions to our portfolio were knee
braces that are a part of Össur’s Rebound
®
injury solution
brand. The Rebound
®
Dual Basic and Rebound
®
Recover
braces offer the value and simplicity needed to navigate
the complex treatment landscape of braces needed from
rehabilitation to recovery. Within the versatility of the
Rebound collection, Össur offers high quality recovery
solutions from a single source, to help end-users transition
back to their active life.
Following significant effort in systematically re- evaluating
the rapidly evolving market landscape, Össur has reshaped
the approach to product development in Bracing &
Supports. A new value engineering process has been
employed to provide a reliable, available and profitable
portfolio that is less complex and improves the
environmental sustainability of bracing. The same
methodology was applied across the whole bracing
& supports product offering, resulting in numerous
potential projects.
Össur Bracing & Supports will continue to innovate and
deliver unmatched value for our customers and strive to
improve the mobility of our end-users.
MDR Compliant Design and
Development Process
The new European Medical Device Regulation (EU)
2017/745 (MDR) came into effect in late May 2021. The
aim of the regulation is to ensure patient safety,
increase transparency, and to enhance the quality of
medical devices. The regulation introduces a large-
scale change to the regulatory framework of medical
devices sold in the European Union, including, but not
limited to: increasing requirements for clinical
investigations and evaluations, strengthening of post-
market surveillance, new labeling requirements, and
introduction of a unique device identifier (UDI). Össur
was well prepared and fully ready for the regulation to take
effect. Every aspect of the design and development
process, including clinical investigations and evaluation,
has been updated and product documentation has been
revised. Össur has received an MDR certificate for the
new innovative bionic knee products (Power Knee™ and
Mobili Knee™).
32
ÖSSUR ANNUAL REPORT
MEMORABLE
MOMENTS
1996
In 1996,
Jon Sigurdsson was hired as Össur’s
President & CEO.
He led the company during its
successful growth journey and was named among the 20
greatest business thinkers in the Nordics in 2013.
2009
After its initial listing on the Iceland Stock Exchange in
1999, Össur expanded rapidly through a series of
strategic acquisitions. Significant ongoing investment in
research and innovation has also been central to its
growth and award-winning designs have ensured a
consistently strong position in the market.
In 2009,
Össur was listed on Nasdaq Copenhagen and
celebrated its 20-year listing anniversary at
Nasdaq in New York in 2019.
2021
Össur now has more than 2,000 patents and patent
applications
and the Össur brand is protected by more
than 500 trademark registrations. In 2021, the
World Intellectual Property Organization (WIPO) ranked
Össur second in the world for top patent applicants in
conventional mobility assistive technologies.
33
ÖSSUR ANNUAL REPORT
OUR
People
At Össur we nurture a spirit of innovation; we offer a
flexible, open and vibrant environment where each
employee can achieve their full potential. We live by a set
of values that are the foundation for our strategy and
success. Our core values are Honesty, Frugality, and
Courage; and these values guide our decisions. We live
these values every day in everything that we do—in our
interactions with colleagues and customers, and in our
work efforts.
We have around 4,000 employees working in 35
countries. While we are a diverse company, we work as
one to improve people’s mobility. Different ideas and
points of view are beneficial to our business, and we
believe in creating an environment where diversity,
knowledge, skills, and strengths are fully utilized. As
individuals, our employees can expect fair and equal
treatment and equal opportunities for growth within
Össur. Our employees take responsibility, both for their
current job and for their career advancement. We offer
various learning opportunities, so employees can build
lasting and rewarding careers with us.
We measure our employees’ engagement at least once a
year and we are proud that our engagement and
employee satisfaction is high. Our employees’ passion,
drive, and capabilities to help our customers are our
greatest assets.
We have a Competency Framework within Össur that
allows us to identify the behaviors that drive successful
performance and supports our business strategy.
Our competencies are collaboration, communication,
driving results, customer focus and change. We
have annual performance reviews, where we review
the performance of the past year and plan for the
performance of the coming year. Regular check-ins
are encouraged between employees and managers to
discuss both performance and development of our
competencies which are supported by Össur‘s
Development Guide that lists training and development
opportunities for each competency. All employees,
regardless of their role or location, have access to
thousands of on-line and virtual courses to learn
and grow. All leaders go through our LEAD program,
a global leadership development program. We also offer
mentoring, 360 assessments, and 1:1 coaching to support
the development efforts and to further grow our talented
employees.
Össur recruits competent and ambitious individuals who
can work on demanding projects, and we are proud that
we’ve been able to provide advancement opportunities
for our talented employees. Our hiring decisions are
based on the skills and abilities we need to grow the
business and our global team of talented professionals is
passionate about helping people live a Life Without
Limitations
®
.
If you are interested in joining our team, you can view
and apply for an open position
here
on Össur’s
applicant portal.
34
ÖSSUR ANNUAL REPORT
V ALUE S
Stay True
Make Every Step Count
Aim Higher
OUR
Diversity, Equity and Inclusion
Every day, we interact with people from a wide range
of cultures and backgrounds. We do business in
numerous locations around the world, working and
communicating with many different colleagues,
customers and other stakeholders in our industry.
Diversity, equity and inclusion are extremely important to
us. At Össur, we have a passion for helping people
pursue a Life Without Limitations
®
. We celebrate different
ideas, perspectives and backgrounds. We
are committed to creating a culture of acceptance and
belonging, while proudly serving as a diverse, global
community. To make a difference in this world, we
embrace differences within the world.
We monitor and measure diversity and inclusivity on a
continuous basis, making sure it is part of our
company culture. We included questions on diversity and
inclusion in our annual workplace survey. We have
increased training opportunities on diversity, equity and
inclusion in our online learning system and we have a
diversity dashboard available for our leaders so they can
monitor the diversity of their teams. We offer flexible work
arrangements for positions that can be done remotely, so
employees have the ability to more flexibly manage how
and where they work, a benefit that many employees
appreciate.
As part of our efforts to be an employer of choice in all
markets and support diversity outside our organization, we
launched the Össur Give Back Program in 2021, providing
all employees with the opportunity to give back to their
community by offering one volunteer day per year.
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ÖSSUR ANNUAL REPORT
Diversity, Equity and Inclusion
Gender Ratio
Female in
Male
53%
Management
Female
47%
Positions
38%
Education Age
University Degree
44%
16-25
7%
Other
46%
26-35
28%
Vocational or
36-45
29%
Technical Training
10%
46-55
20%
55+
16%
OUR
Össur Give Back Program
Össur has long placed emphasis on making a positive
contribution to the local communities where we do
business.
Introduced in 2021, the Össur Give Back Program offers all
employees globally, one volunteer day per year to give
back to their communities. We encourage our team
members around the world to work with local causes and
charities to make a difference.
In its first year, the Give Back Program was well received
by Össur employees who participated in volunteer
activities in their communities.
GIVE BACK
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ÖSSUR ANNUAL REPORT
Diverse causes and charities benefited from
donated working hours, such as the following:
•
South Jersey Food Bank
•
Newburgh Farm and Food Initiative
•
Woodstock Farm Sanctuary
•
Beach clean-up in Southern California
•
Park clean-up in Ohio
•
Cathedral Kitchen in New Jersey
•
River Kids Charity in Scotland
•
Reykjadalur summer camp for disabled kids
and youngsters
•
Reykjavik Forestry Association
•
Beach clean-up on the Reykjanes Peninsula
•
Iceland Family Aid
•
Forest clean-up in Poland
•
Sports day for the visually impaired in the
Netherlands
•
China Association of Persons with Physical Disability
OUR
Ramp Up Reykjavik
Another community initiative Össur participated in was
the Ramp Up Reykjavik project. Initiated in March 2021,
the goal was to help local businesses in Iceland to install
wheelchair ramps to improve accessibility for people with
disabilities. Össur was one of the founding members of
the project, spearheaded by entrepreneur Halli
Thorleifsson. Not only did the project meet its initial goal
of installing 100 ramps around the capital four months
ahead of schedule, but the surplus funds will also be
used to fund additional ramp access in Reykjavik and
other towns in Iceland. “All the founding members,
planning authorities, restaurants and shops in the area
really pushed the boat out to get the ramps set up and we
had a lot of support from the start,” said Halli Thorleifsson.
Össur Mobility Clinics
For over 25 years, Össur has partnered with the
Challenged Athletes Foundation to host running and
mobility clinics. Held at various locations across the US,
throughout the year, these free clinics provide
opportunities for amputees to learn techniques from
world-renowned gait experts, Össur athletes and CAF
mentors with the goal of helping individuals move better
and more confidently with their prosthesis.
Össur Mobility Clinics have also been held in South Africa,
Australia, and other countries over the years. In November
2021, a successful Össur Mobility Clinic was held in South
Africa and the participants were excited to be with their
peers for the first time in over two years. The event was an
inspirational and supportive forum connecting people of all
ages and abilities.
37
ÖSSUR ANNUAL REPORT
MEMORABLE
MOMENTS
Össur’s extensive bracing range dates back to
the first prototype of the CTi
®
ligament
which
was created in 1981 and the Unloader brace
which began with a prototype of plastic and metal
in 1986. The Unloader One
®
brace has developed
into a world-class, clinically proven,
biomechanical treatment option, used by
osteoarthritis sufferers around the world.
Össur has also launched notable braces
such
as the Rebound
®
Cartilage, Rebound
®
PCL and
Rebound
®
ACL and won numerous awards and
recognition over the years for its bracing
portfolio.
38
ÖSSUR ANNUAL REPORT
OUR
Risk Management
Five Key Risks
An investment in Össur involves various risks as the business, financial conditions, and results of operations rest upon
certain assumptions and could be negatively affected if any of the factors described in this chapter occur. Össur has chosen
to highlight five key risks which are currently considered the most relevant, including impact of the COVID-19 pandemic
although the long-term prospects and underlying fundamental drivers of the prosthetics and bracing & supports markets are
not expected to change.
Össur cannot ensure that the given assumptions for the description of the risks are correct. Additional risks and
uncertainties listed on Össur’s corporate website, as well as risks that Össur currently deems immaterial or are not
presently known to us, may adversely affect our business operations and financial results, to an even greater extent than
the five key risks identified here.
39
ÖSSUR ANNUAL REPORT
I. Changes in Reimbursement
Description
Most of Össur’s products and services are reimbursed by third-party payers, including both government healthcare
programs and private health insurance plans. Third-party payers continue to develop methods of controlling healthcare
costs, including reviews of claims, selective contracting, and competitive bidding. Össur’s business depends on
understanding and adapting to reimbursement and insurance plans in all global markets of our business operations.
Potential Impact
These cost-control methods may limit or even eliminate the coverage and the amount of payment for which third-
party payers may be willing to pay for Össur products and services. As a result, customers may reduce or eliminate
purchases and sales may decline significantly. Reviews of claims may lead to repayment of prior sales. Finally, failing
to understand and adapt to changes in reimbursement systems, may affect Össur’s license to operate and thus affect
our sales.
Mitigative Actions
Össur only brings products and services to the market that address medical indications, and which are clinically
validated. Össur applies its reimbursement knowledge from the earliest stages of product development to the post-
sale education of customers. Össur also pursues several strategies to manage the reimbursement of its products
and services.
OUR
40
ÖSSUR ANNUAL REPORT
III. Össur May be Unable to Develop or Secure the Use of New Technologies
Description
Össur operates in markets that are characterized by rapid technological change, driven by extensive research that is
carried out by market participants. Technological innovation takes place at various stages in Össur’s value chain and
may include individual components, design, and functionalities of Össur products and services.
Potential Impact
The development by any suppliers or competitors of substitute products or components that better satisfy market
demands could have a material adverse effect on Össur’s business and results of operations. A failure to develop new
products or enhance existing products could also have a material adverse effect on Össur’s operations and potential for
future growth.
Mitigative Actions
Össur’s significant investment in research and development and constant strive to finding new technologies, has
resulted in a vast IP portfolio and a strong position to compete with potential new entries. External connections and
appeal to universities, research institutes and investors provide Össur with the opportunity to stay informed and review
emerging innovation as part of acquisitions or research cooperation initiatives.
II. Regulatory Requirements
Description
Össur’s medical devices are subject to extensive global regulations by the respective authorities in countries where
Össur conducts its business. Such regulations can restrict virtually all aspects of a medical device’s design and
testing, manufacturing, safety, labeling, storage, recordkeeping, reporting, clearance and approval,
promotion, distribution, and services. Össur’s international footprint is growing in new emerging markets. These
markets are characterized by more complex regulations, business volatility and unpredictability, and interactions with
government officials, new market participants, business partners, and other third parties.
Potential Impact
Failure to comply with the regulatory requirements of the applicable authority may subject Össur to fines, penalties,
sanctions, or product withdrawal. Össur’s failure to comply with regulatory requirements or receive regulatory clearance
and approval for its products or operations could adversely affect Össur’s sales and potential for future growth, threaten
Össur’s license to operate in the respective market, and affect our reputation and brand.
Mitigative Actions
Össur maintains a robust global quality system that complies with international medical device standards and is an
intrinsic part of Össur‘s internal processes. Össur also has a global regulatory compliance program, including a new Code
of Conduct, in which our employees identify, assess, manage, and report potential risks from international and local
regulations in the countries where Össur markets and sells medical devices.
OUR
41
ÖSSUR ANNUAL REPORT
Other Risks
Össur is exposed to a range of other risks, a list of which is available
here
on Össur’s website.
V. Impact of the COVID-19 Pandemic
Description
The COVID-19 pandemic affects Össur’s business and operations as well as our suppliers, business partners,
customers, end-users, and employees. Össur is operating in a new working environment, both from home and in the
office, maintaining employee health and morale, and avoiding issues in IT and infrastructure. Attracting and retaining
talent remain essential.
Potential Impact
COVID-19 can impact our sales as measures to control the pandemic can affect demand and the ability to service our
customers and end-users. The pandemic may impact global supply chains, adversely affect access to raw materials and
components, cause delays in deliveries and increase our cost. Working from home may increase our exposure to
information security threats and data breaches. The chance to fraud and other misconduct increases, as the usual
people, protocols, and controls in place are not on site to act. Inability to attract and retain talent may result in knowledge
loss, decreased productivity, and lost sales.
Mitigative Actions
Primary focus is on business continuity and the safety of employees, customers, and end-users. We have maintained
our operations throughout the pandemic, prioritizing production and product availability, and ensured that guidelines
from local and global healthcare authorities are being followed. We work closely with our stakeholders to professionally
and timely adapt to changes and challenges. Össur supports employees working from home with up-to-date IT
systems and security. We have policies, processes, and controls to detect and prevent misconduct. Finally, new, and
creative ways of working together are developed and stimulated to secure health and safety, and employee morale.
IV. Industry Consolidation and Forward Integration
Description
Major shifts in Össur’s marketplace include the consolidation of prosthetics manufacturers in recent years and the
additional momentum that forward integration is gaining in the industries where Össur operates, which involves
acquiring service providers in the O&P industry. Given the nature of acquisitions, it is uncertain to what degree Össur
will be able to participate in further consolidation and to what degree forward integration will affect Össur‘s operations.
Potential Impact
The consolidation has been a material contributor to the external growth of Össur in the past. If Össur were not to
participate in further consolidation or forward integration, it might limit Össur‘s potential for future growth. In addition,
these shifts may impact the competitive landscape of the industries and the associated market shares. Changes in the
industry may furthermore impact Össur’s customers.
Mitigative Actions
Össur continuously reviews value enhancing acquisitions and investment opportunities in its business segments and
keeps a good relationship with the relevant stakeholders in the industry. Össur operates its own clinics in certain
regions and has partnership programs in place with patient care providers to offer end-users quality products and
services.
CORPORATE
Shareholder Information
Össur's share price decreased by 13% in 2021, compared to a 19% increase of the OMXC25GI index, a leading index for
the Danish equity market.
Össur’s shares are listed on Nasdaq Copenhagen. Össur was the 32
nd
largest company of 125 companies listed on
Nasdaq Copenhagen when measured in terms of market value at year-end 2021.
The share capital of Össur is ISK 423,000,000 nominal value, divided into the same number of shares. There is only one
class of shares and all shares carry one vote, besides treasury shares that do not carry voting rights.
Key Information Table
Össur’s largest shareholder is William Demant Invest A/S (WDI) which held 52% of the total shares and 52% of the
voting rights at year-end 2021. WDI has been a shareholder in Össur since 2004. In an announcement from WDI on 4
January 2018, when their ownership in Össur crossed the 50% threshold, it was stated that the intention was to hold 50-
60% of Össur’s shares going forward. Apart from Össur, the fund’s investment activities include holdings
in Demant, a leading provider of hearing aids, as well as Vision RT, Vitrolife, Cellavision, Revenio, Jeudan, Invisio,
Founders and Borkum Riffgrund.
Ownership Structure
42
ÖSSUR ANNUAL REPORT
William Demant Foundation
100%
William Demant Invest
Strategic Long-Term Investments Renewables
Borkum Riffgrund
Demant Visionrt
19%
55-60%
52%
89%
Vitrolife Cellavision
Revenio
27% 20%
14%
Invisio Jeudan
7% 42%
Other Investments
Founders
33%
Market ISIN Ticker Industry No. of Shares
CPH (DKK) IS0000000040 OSSR Healthcare 423,000,000
CORPORATE
Share Performance
Össur’s share price decreased by 13% in 2021, from DKK 48.5 per share at year-end 2020 to DKK 42.3 per share at year-
end 2021. Össur’s market capitalization was DKK 17.9 billion (USD 2.7 billion) at year-end 2021 compared to DKK
20.5 billion (USD 3.4 billion) at year-end 2020.
43
ÖSSUR ANNUAL REPORT
Share Performance (Indexed)
150
100
50
Jan Feb Mar
Apr May
June July Aug Sep Oct Nov Dec
Össur OMXC25GI
Shareholders
Scandinavia
86%
USA
6%
Other
8%
At year-end, about ~86% of Össur’s shareholders
were located in Scandinavia. The remaining ~14% of
the shares are held by investors residing in other
countries.
CORPORATE
Capital Allocation
With emphasis on growth opportunities, value-adding investment opportunities and acquisitions, Össur has decided to
discontinue dividend payments and focus on returning excess capital to shareholders via purchase of own shares in
accordance with the Company's updated Capital Structure and Capital Allocation Policy. Therefore, the Board of Directors
will not propose to the Annual General Meeting in 2022 to pay a cash dividend.
Össur’s share buyback program will shortly commence again. The share buyback program was put on hold on 17 March
2020 due to the impact of the COVID-19 pandemic, as the net interest-bearing debt to EBITDA ratio was temporarily above
the target level. The net interest-bearing debt to EBITDA was within the target range at year-end 2021, at 2.4x. The purpose
of the share buyback programs is to adjust the capital structure in line with the desired level of net debt to EBITDA. At year-
end 2021, treasury shares totaled 739,862. The Board of Directors will not propose to the Annual General Meeting 2022 to
reduce the share capital by way of cancelling shares as Össur’s current shareholding will be utilized to meet share option
obligations.
Annual General Meeting
According to the Articles of Association, the Annual General Meeting (AGM) shall be held before the end of April. Össur’s
AGM will be held on 8 March 2022. The meeting is convened with at least three weeks’ notice. The AGM results are sent to
the news system of Nasdaq immediately following the meeting and are also made available on Össur’s website.
44
ÖSSUR ANNUAL REPORT
Share Buybacks and Dividends
50
45
44
40
Share buybacks*
35
Dividends
30
25
20
15
10
5
0
2017 2018 2019 2020 2021
Over the last five years, Össur has paid out USD 136 million to its shareholders.
*The share buyback program will commence again in 2022. The share buyback program was put on hold on 17 March 2020 due to the impact of
the COVID-19 pandemic, as the net interest-bearing debt to EBITDA ratio was temporarily above the target level
37
39
35
30
26
18
9
9
9
9
7
0
CORPORATE
Investor Relations
Össur’s policy is to disclose financial and corporate
information to provide investors, analysts, and other
stakeholders with comprehensive and accurate
information to help them understand Össur’s current and
expected developments. Six sell-side equity analysts
currently cover Össur.
Financial reports, announcements, presentations, the
financial calendar, upcoming events, share information,
and other information is available
here
on Össur’s
website.
Contact Investor Relations
Edda Lára Lúðvígsdóttir, Investor Relations Director
E-mail: [email protected]
Tel.: +354 844 4759
45
ÖSSUR ANNUAL REPORT
Financial Calendar
Annual General Meeting
8 March 2022
Interim Report Q1 2022
26 April 2022
Interim Report Q2 2022
21 July 2022
Interim Report Q3 2022
25 October 2022
Interim Report Q4 2022 and
Annual Report 2022
31 January 2023
Annual General Meeting
10 March 2023
CORPORATE
Corporate Sustainability
Össur emphasizes Corporate Social Responsibility
through active employee involvement throughout the
Company. Össur joined the UN Global Compact in 2011
and signed the UN Women’s Empowerment Principles in
2014. In 2019, Össur evaluated its impact on the UN
Sustainable Development Goals (SDGs) and choose four
goals to specifically contribute to. Össur has published a
separate Corporate Sustainability Report (CSR) which
discusses initiatives and progress in more detail.
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ÖSSUR ANNUAL REPORT
Össur’s sustainability vision is to provide
products and services that contribute to
good health, using responsible production
methods and supporting climate action, while
being a sponsor for gender equality.
Access to healthcare for
elderly amputees
Our ongoing commitment to
gender equality
Reducing the environmental
footprint of our products
Actively working towards
carbon neutral operations
CORPORATE
Össur’s Contribution to the UN Sustainable Development Goals (SDGs)
Össur’s largest impact on society is through the Company’s innovative products, research activities and expertise in the field
of Prosthetics and Bracing & Supports. Össur works with individuals, clinicians, and diverse communities around the world
to support a better quality of life and to increase the mobility of millions of people. Consequently, Össur’s greatest impact is
on Goal 3, Good Health and Well-Being. Additionally, Össur contributes to Goal 5 on Gender Equality, Goal 12 on
Responsible Consumption and Production and Goal 13 on Climate Action.
Össur’s Key Performance Indicators (KPI’s) are monitored and reported to the Executive Management. The KPI’s
reflect Össur’s commitment to the UN Global Compact and the UN Sustainable Development Goals.
Principle 6
SDG 5
Gender split among employees
Female managers as % of total number of managers
M53% / F47%
38%
Principle 10
Code of Conduct training*
Anti-bribery and corruption & competition training for at risk
employees*
n/a
n/a
Principle 7,8,9
SDG 12, 13
Carbon neutral operations**
Electricity purchased from renewable energy sources
Yes
99%
SDG 3
Total Recordable Incident Rate, TRIR ***
New products specially designed for elderly end-users
Ongoing prosthetic studies which will inform developers
about the elderly customer group
0.5
3
30%
* KPI established in 2021. New Code of Conduct was launched at the end of 2021 and therefore, comparable numbers are not available
** Össur was Carbon Neutral, also referred to as Net Zero, for Scope 1 and 2, and selected Scope 3 emissions, following the Greenhouse Gas Protocol
*** Recordable Incidents per 100 FTE’s
Össur Was Carbon Neutral in 2021
In recognition of our commitment to sustainable development and to commemorate the Company‘s 50
th
anniversary, Össur
was Carbon Neutral in 2021, also referred to as Net Zero, for Scope 1 and 2, and selected Scope 3 emissions, following
the Greenhouse Gas Protocol. This represents Össur‘s direct and indirect energy and fuel consumption, business travel,
transportation of goods, electricity consumption of finished goods suppliers and waste treatment.
In 2021, Össur‘s greenhouse gas emissions were 47% lower than in 2019, the baseline year. The largest contribution to
these significant results was the commitment to purchase electricity from renewable energy sources. The remaining
emission was offset through VCS and Gold Standard emission reduction projects to support the UN Sustainable
Development Goals.
Össur partnered with First Climate, a leading service provider of carbon emissions management, to achieve carbon
neutrality.
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ÖSSUR ANNUAL REPORT
Contribution to UNGC and SDGs KPI 2021
CORPORATE
Environment
The below reporting on environmental metrics is in accordance with the Nasdaq ESG guidance. Össur strives to
continuously improve its Greenhouse Gas emission reporting with more extensive data from suppliers and service
providers. Further details on environmental initiatives are discussed in Össur’s Sustainability Report.
*
**
According to the GHG Protocol Scope 2 Guidance, for the market-based method, all electricity purchased with canceled Energy Attribute Certificates (EACs) have an emission factor of 0
Össur purchased Energy Attribute Certificates (EACs) for the electricity used in the production of Össur purchased finished goods under the Össur brand. This use of renewable energy
from purchased products is accounted for following the hybrid method in "Purchased goods and services" category in the GHG Protocol Scope 3 Guidance
All electricity consumed (except Clinics Australia), backed up with Energy Attribute Certificates (EACs) for the first time
According to the GHG Protocol Scope 2 Guidance, all electricity purchases with canceled EACs have an emission factor of 0
***
48
ÖSSUR ANNUAL REPORT
Environment
Connection to
Frameworks
2021
2020
E - 1
GhG Emissions in tonnes CO2 equivalents (tCO2e)
UNGC P7
1.1
Scope 1 - Direct emissions, tCO2e
1,700
1,800
Gas consumption for heating
500
500
Fuel consumption in vehicle fleet
1,200
1,300
1.2
Scope 2 - Indirect emissions, tCO2e - Market based*
250
5,000
Purchased electricity and heat - Location-based
5,000
5,000
Purchased electricity and heat - Market-based*
250
5,000
1.3
Scope 3 - Other relevant indirect emissions, tCO2e
9,970
9,330
Finished Goods Suppliers electricity consumption**
290
2,200
Transportation of goods
7,950
4,700
Waste treatment
130
130
Business travel (Air, hotels, trains)
1,600
2,300
Total emission - Scope 1, 2, 3, (Market based), tCO2e
11,920
16,130
Retired Carbon Credits from emission reduction projects, tCO2e
SDG 13, UNGC P7, P8
11,920
E - 2
Emissions Intensity
2.1
Total GhG emissions per revenue, tCO2e/USD Million
SDG 12, UNGC P7, P8
17
26
Revenues (USD Million)
719
630
E - 3
Energy Usage
3.1
Total energy directly consumed (MWh)
7,100
7,030
Gas consumption for heating
SDG 12, UNGC P7, P8
2,300
2,230
Fuel consumption of vehicle fleet
4,800
4,800
E - 4
Energy Intensity
Total energy directly consumed per revenue, MWh/USD Million
10
11
E - 5
Energy Mix
% electricity from renewable energy sources ***
99%
24%
% electricity from other energy sources
1%
76%
E - 6
Water Usage
6.1
Total amount of water consumed (m3)
92,000
89,700
E - 7
Environmental operations
7.1
Does Össur follow a formal Environmental Policy?
yes
yes
7.2
Does Össur follow specific waste, water, energy, and/or recycling polices?
yes
yes
7.3
Does Össur use a recognized energy management system?
yes
yes
E - 8
Climate Oversight / Board
Does Össur Board of Directors oversee and/or manage climate-related risks?
no
no
E - 9
Climate Oversight / Management
UNGC P9
Does Senior Management Team oversee and/or manage climate-related risks?
yes
no
E - 10
Climate Oversight / Management
Total amount invested, annually, in climate-related infrastructure, resilience, and
product development
n.a.
n.a.
CORPORATE
Social
The below reporting on social metrics is in accordance with the Nasdaq ESG guidance. Further details on social
initiatives are discussed in Össur’s Sustainability Report.
* Comparable numbers for 2020 corrected from last year’s report
49
ÖSSUR ANNUAL REPORT
Social Metrics
Connection to
Frameworks
2021
2020
2019
S - 1
CEO Pay Ratio
UNGC: Principle 6
1)
CEO total compensation to median FTE total compensation*
37
23
21
2)
Does your company report this metric in regulatory filings?
Yes/No
Yes
Yes
Yes
S - 2
Gender Pay Ratio
UNGC: Principle 6
Equal pay audit
Yes
Yes
Yes
S - 3
Employee Turnover
UNGC: Principle 6
1)
Year-over-year change for full-time employees
19%
17%
10%
2)
Year-over-year change for part-time employees
n/a
n/a
n/a
3)
Year-over-year change for contractors and/or consultants
n/a
n/a
n/a
S - 4
Gender Diversity
UNGC: Principle 6,
SDG 5
1)
Total enterprise headcount held by men and women
M 53%/
F 47%
M 54%/
F 46%
M 51%/
F 49%
2)
Entry- and mid-level positions held by men and women
M52%/
F48%
M52%/
F48%
M62%/
F38%
3)
Senior- and executive-level positions held by men and women
M64%/
F36%
M66%/
F34%
M74%/
F26%
S - 5
Temporary Worker Ratio
UNGC: Principle 6
1)
Total enterprise headcount held by part-time employees
8%
9%
8%
2)
Total enterprise headcount held by contractors and/or
consultants
107
144
124
S - 6
Non-Discrimination
UNGC: Principle 6
1)
Does your company follow a sexual harassment and/or non-
discrimination policy? Yes/No
Yes
Yes
Yes
S - 7
Injury Rate
SDG 3
1)
Total Recordable Incident Rate per 100 employees
0.5
0.7
0.6
S - 8
Global Health and Safety
SDG 3
1)
Does your company follow an occupational health and/or
global health & safety policy? Yes/No
Yes
Yes
Yes
S - 9
Child & Forced Labor
UNGC: Principle 4,5
1)
Does your company follow a child and/or forced labor policy?
Yes/No
Yes
Yes
Yes
2)
If yes, does your child and/or forced labor policy See also:
cover suppliers and vendors? Yes/No
Yes
Yes
Yes
S - 10
Human Rights
UNGC: Principle 1,2
1)
Does your company follow a human rights policy? Yes/No
Yes
Yes
Yes
2)
If yes, does your human rights policy See also: cover suppliers
and vendors? Yes/No
Yes
Yes
Yes
CORPORATE
Corporate Governance
Össur’s Corporate Governance reporting complies with the Danish Recommendations on Corporate Governance. Further
details on the Corporate Governance Reporting can be found
here
in Össur’s Corporate Governance Report.
The below reporting on governance metrics is in accordance with the Nasdaq ESG guidance. Further details on
Governance related initiatives are discussed in Össur’s Sustainability Report.
* The Board has only one committee, Audit Committee, explaining the uneven gender split
** Percentage of suppliers categorized as critical suppliers. No Changes between years, due to review of the Code. Updated Code will be introduced in 2022
*** Percentage of key employees in sales and employees with responsibilities in high risk areas. A new Code was launched in December 2021
As training and acknowledgment will take place in 2022, comparable numbers are not applicable
50
ÖSSUR ANNUAL REPORT
Governance Metrics
Connection to
Frameworks
2021
2020
2019
G - 1
Board Diversity
1)
Percentage: Total board seats occupied by women (as compared to men)
M 60% /
F 40%
M 60% /
F 40%
M 60% /
F 40%
2)
Percentage: Committee chairs occupied by women (as compared to
men)*
M 100% /
F 0%
M 100% /
F 0%
M 100% /
F 0%
G - 2
Board Independence
1)
Does company prohibit CEO from serving as board chair? Yes/No
Yes
Yes
Yes
2)
Percentage: Total board seats occupied by independents
D 60% /
I 40%
D 60% /
I 40%
D 60% /
I 40%
G - 3
Incentivized Pay
1)
Are executives formally incentivized to perform on sustainability? Yes/No
No
No
No
G - 4
Collective Bargaining
UNGC: Principle 3
1)
Total enterprise headcount covered by collective bargaining agree-
ment(s)
29%
39%
41%
G - 5
Supplier Code of Conduct
UNGC: Principle
2,3,4,8 SDG 12
1)
Are your vendors or suppliers required to follow a Code of Conduct? Yes/
No
Yes
Yes
Yes
2)
If yes, what percentage of your suppliers have formally certified their
compliance with the code?**
n/a
76%
76%
G - 6
Ethics & Anti-Corruption
UNGC: Principle 10
1)
Does your company follow an Ethics and/or Anti-Corruption policy?
Yes/No
Yes
Yes
Yes
2)
If yes, what percentage of your workforce has formally certified its
compliance with the policy?***
n/a
91%
91%
G - 7
Data Privacy
1)
Does your company follow a Data Privacy policy? Yes/No
Yes
Yes
Yes
2)
Has your company taken steps to comply with GDPR rules? Yes/No
Yes
Yes
Yes
G - 8
ESG Reporting
UNGC: Principle 8
1)
Does your company publish a sustainability report? Yes/No
Yes
Yes
Yes
2)
Is sustainability data included in your regulatory filings? Yes/No
Yes
Yes
Yes
G - 9
Disclosure Practices
UNGC: Principle 8
1)
Does your company provide sustainability data to sustainability reporting
frameworks? Yes/No
Yes
Yes
Yes
2)
Does your company focus on specific UN Sustainable Development Goals
(SDGs)? Yes/No
Yes
Yes
Yes
3)
Does your company set targets and report progress on the UN SDGs?
Yes/No
Yes
Yes
Yes
G - 10
External Assurance
UNGC: Principle 8
Are your sustainability disclosures assured or validated by a third party?
Yes/No
Assurance and third party audits have
performed some of the data in the report.
Further details in the CSR report.
CORPORATE
Corporate Governance
Organizational Structure
According to Össur’s Articles of Association, the Company is managed by Shareholders’ Meetings, the Board of
Directors (the Board), and the Chief Executive Officer (CEO). Their roles and responsibilities are described below.
Shareholders’ Meetings
The supreme authority in Össur’s affairs is in the hands of lawful Shareholders’ Meetings, within the limits provided for in
the Company’s Articles of Association and law.
Resolutions at Shareholders’ Meetings generally require a simple majority. However, resolutions to amend the
Company’s Articles of Association usually require two-thirds of the votes cast and capital represented.
Minutes of Shareholders’ Meetings are available
here
on Össur’s website.
51
ÖSSUR ANNUAL REPORT
At each Annual General Meeting Other resolutions are made on an ad-hoc
the shareholders: basis, such as:
•
Confirm the Company’s consolidated financial • Amendments to the Company’s Articles of
statements and decide on the distribution of Association
the Company’s net profit
- Capital reductions
•
Approve the Company’s Remuneration policy
- Authorizations for the Board of
•
Decide on the remuneration for
Directors to increase the share capital
the Board of Directors
• Authorizations to the Board of Directors
•
Elect the Board of Directors
- Purchase own shares
•
Elect an auditor
- Initiate share buyback programs
CORPORATE
Board of Directors
The Board of Directors is the supreme authority in
Össur’s affairs between Shareholders’ Meetings. The
Board shall operate in accordance with the Company’s
Articles of Association and the Board’s Rules of
Procedure.
The Board of Directors’ work, role and responsibilities are
further described in the Board’s rules of procedure, which
are reviewed annually by the Board and updated as
necessary. The Board’s rules of procedure are available
here
on Össur’s website and below is the Board’s Annual
Schedule.
52
ÖSSUR ANNUAL REPORT
The Board of Directors’ Annual Schedule
Quarter 1
Quarter 2 Quarter 3 Quarter 4
February Meeting
April Meeting
July Meeting October Meeting
•
Full-year results
Quarterly results
• Half-year results • Quarterly results
•
Corporate Governance
September Meeting December Meeting
Statement
•
Capital Structure and
• Strategy • Strategy and forecast
Dividend Policy
• Performance evaluation
•
Agenda for the Annual
• Diversity discussions
General Meeting
Annual General Meeting
March Meeting
•
Election of Chairman and
Vice Chairman
•
Appointment of the Audit
Committee
•
Review of Internal Rules
The Board has various roles and responsibilities
•
Establish goals for the Company and formulate
the policy and strategy to achieve those goals.
•
Hire a CEO to manage the Company’s daily
operations, supervise the Company’s activities
and ensure that the Company’s organization
and operations are in good and proper order.
•
Ensure adequate surveillance of the accounting
and financial management of the Company.
•
Evaluate the Company’s capital structure.
•
Evaluate the performance of the Board and
the CEO.
CORPORATE
The Board of Directors is composed of five individuals, all
elected by the shareholders at the Annual General
Meeting for a term of one year. The Board shall be
represented by at least 40% of each gender, and
currently there are three men and two women on the
Board. All Board Members except one have served for
several years, which ensures consistency and good
insights into Össur’s business and markets. Two of
the Board Members are considered independent in
accordance with the Danish Recommendations on
Corporate Governance.
The Chairman and the Vice Chairman of the Board of
Directors are elected each year following Össur’s
Annual General Meeting. The Chairman’s main
responsibility is to ensure that the Board performs its
duties in an orderly and efficient manner. In the
absence of the Chairman, the Vice Chairman performs
his duties. Niels Jacobsen has served as the Chairman
since 2006 and Svafa Grönfeldt as the Vice Chairman
since 2021.
Further information on each Member of the Board of
Directors is available
here
on Össur’s website.
53
ÖSSUR ANNUAL REPORT
Board Member Independent Nationality Gender Board Tenure Board Meetings
Attended
Niels Jacobsen, Chairman No Danish Male 16 years
Svafa Grönfeldt, Vice Chairman No Icelandic Female 13 years
Arne Boye Nielsen No Danish Male 12 years
Alberto Esquenazi* Yes American Male 1 year
Guðbjörg Edda Eggertsdóttir Yes Icelandic Female 8 years
*Kristján Tómas Ragnarsson attended the first Board Meeting before he retired and was replaced
by Alberto Esquenazi at the Annual General Meeting on 8 March 2021
CORPORATE
Audit Committee
The Board of Directors has established one committee,
the Audit Committee. The Audit Committee acts as an
advisor to the Board of Directors but has no authority to
make any decisions on behalf of the Board.
The Audit Committee’s work, role and responsibilities are
further described in the Audit Committee’s rules of
procedure, which are reviewed annually by the Board of
Directors and updated as necessary. The Audit
Committee’s rules of procedure are available
here
on
Össur’s website and below is the Audit Committee’s
Annual Schedule.
The Audit Committee is composed of three Board
Members. The majority of the Audit Committee shall be
independent of the Company, the CEO, and the Auditor.
The Members of the Audit Committee shall possess the
knowledge and expertise needed to perform the tasks
of the Audit Committee. At least one Member of the
Audit Committee shall have solid knowledge and
experience in the field of financial statements or
auditing. Arne Boye Nielsen has served as the Chairman of
the Audit Committee since 2012.
Further information on each Member of the Audit
Committee is available
here
on Össur’s website.
54
ÖSSUR ANNUAL REPORT
Audit Committee Member* Meetings Attended
Arne Boye Nielsen, Chairman
Alberto Esquenazi**
Guðbjörg Edda Eggertsdóttir
*The Chairman of the Board and the Vice Chairman of the Board also attended all the Audit Committee meetings
**Svafa Grönfeldt attended the first Audit Committee meeting before she became the
Vice Chairman of the Board on 8 March 2021 and was replaced on the Audit Committee by Alberto Esquenazi
The Audit Committee’s Annual Schedule
Quarter 1 Quarter 2
Quarter 3 Quarter 4
February Meeting April Meeting
July Meeting October Meeting
•
Report on prior year audit • Election of Chairman
• Audit plan for the coming • Company’s report on
(presented by the Auditor) • Compliance &
year (presented by the internal controls
•
Audit Committee report to Security update
Auditor) • Compliance &
the Board on prior year
• Company’s report on Security update
•
Compliance & Security
various accounting and
December Meeting
update
control items
• Meeting with the Auditors
•
Compliance & Security
update
The Audit Committee has various roles and
responsibilities
•
Ensure a competent and independent audit of
the Company.
•
Submit proposals to the Board on the
nomination of an auditor candidate at the
Annual General Meeting.
•
Submit proposals to the Board on an agreement
with the Auditor, containing e.g. provisions on the
audit fees as well as the general scope of the
Auditor’s non-audit services for the Company.
•
Monitor the Auditor’s work for the Company,
including the audit of the consolidated financial
statements.
•
Monitor the preparation of financial statements
and report to the Board on significant accounting
policies, significant accounting estimates, related
party transactions and uncertainties and risks,
including in relation to the outlook, prior to the
Board’s approval of financial statements.
•
Monitor and assess the Company’s internal
control systems and its risk management and
perform other related tasks and duties.
•
Assess the need for an internal audit.
•
Monitor and assess the Company's
management of compliance and security risks.
CORPORATE
Board Performance Evaluation
The Board of Directors conducts a performance
evaluation each year, which includes evaluation of
individual contribution, co-operation within the
Board and with the CEO, the Chairman’s leadership and
setup of meetings, quality of board material, committee
structure, etc. The Board also evaluates its composition
each year to ensure that the Members of the Board have
the relevant knowledge between them, professional
experience, expertise, and skills required to perform the
Board’s tasks in the best interest of
the Company. The Chairman oversees the evaluation
process and proposes actions to be taken, if any. The
Chairman shall seek external assistance at least every
three years.
The Board performance evaluation for the year 2020 was
carried out with external assistance in February 2021. The
evaluation areas were the tasks of the Board, the Board
competences and composition, the Chairman and
Chairmanship and underlying dynamics. The conclusion of
the evaluation was that the Board was well functioning and
competent with efficient leadership and strong values,
thorough strategy process with clear Board involvement
and alignment, and well-balanced underlying dynamics
fostering stability and long-term growth. Observations were
made that the Board should be aware of complacency
coming from long tenure and common understanding and
make sure to protect and nurture the key criteria for
success when bringing in new Board Members. The Board
was recommended to monitor risk of complacency and
create a succession process for the CEO and the
Chairman.
Chief Executive Officer
The CEO is responsible for Össur’s daily operations
and is obliged to follow the Board of Directors’ policy
and directions, within the limits provided for by the
Company’s Articles of Association and law. The daily
operations do not include measures that are unusual or
extraordinary, which may generally only be taken if
specially authorized by the Board. The CEO is not a
Member of the Board of Directors, but the CEO shall
attend Board Meetings and has the right to participate in
discussions and put forward proposals, unless otherwise
decided by the Board in specific instances.
The Board of Directors evaluates the CEO’s performance
each year. Subsequently, the Chairman of the Board and
the CEO have a meeting to discuss the results of the
evaluation and the actions to be taken,
if any.
Executive Management
Össur also has a wider Executive Management consisting
of the CEO, the CFO and Executive Vice Presidents. The
Executive Management generally meets every week and
collectively prepares and implements the Company’s
strategic plans. The CEO is responsible for the work and
results of the Executive Management.
The CEO evaluates the performance of other Members of
the Executive Management each year and discusses the
results of the evaluation with each Member and the actions
to be taken, if any.
Further information on each Member of the Executive
Management is available
here
on Össur’s website.
55
ÖSSUR ANNUAL REPORT
CORPORATE
Remuneration of the Board of
Directors and the Executive
Management
At Össur’s Annual General Meeting on 8 March 2021,
the shareholders approved an updated Remuneration
Policy, which applies to the Board of Directors and the
Executive Management. The Remuneration Policy was
prepared by the Board of Directors and was approved
without any amendments. The Remuneration Policy is
available
here
on Össur’s website.
Information on the remuneration of the Board of Directors
and the Executive Management can be found in Össur’s
Remuneration Report, available
here
on Össur’s website.
Recommendations on Corporate
Governance
Össur follows the Danish Recommendations on
Corporate Governance issued on 2 December 2020 by
the Danish Committee on Corporate Governance,
which are available on the Committee's website:
corporategovernance.dk
. The Recommendations are
the best practice guidelines for companies admitted to
trading on a regulated market in Denmark.
Each year, the Board of Directors evaluates and decides to
what extent the Company should comply with the
Recommendations and consequently, whether relevant
rules, policies and processes should be adopted or
updated.
In general, the Board of Directors shares the
Committee’s views on corporate governance and,
accordingly, Össur complies with most of the
recommendations. In the few cases where Össur
deviates from the Recommendations, the “comply or
explain” principle is applied, and well-founded
explanations are provided on why the relevant
recommendation is not considered appropriate or
desirable for the Company.
Össur’s Corporate Governance Report is approved by
the Board of Directors. The Report includes both the
statutory statement on corporate governance as well as
comments and information on each item in the
Recommendations. The Report is available
here
on
Össur’s website.
56
ÖSSUR ANNUAL REPORT
CORPORATE
Board of Directors
Niels Jacobsen
Chairman of the Board of Directors
Svafa Grönfeldt
Vice Chairman of the Board of Directors
Arne Boye Nielsen
Member of the Board of Directors
Born in 1957
Member of the Board of Directors since the year
2005
Education
Master’s degree in Business Administration from
the University of Aarhus in Denmark
Board positions
•
KIRKBI A/S, deputy chairman
•
Nissens A/S, chairman
•
Thomas B. Thrige Foundation, chairman
•
ABOUT YOU Holding GmbH, deputy chairman
Additional duties related to William Demant
Invest A/S:
•
Demant A/S, deputy chairman
•
Jeudan A/S, chairman
•
Vision RT Ltd., chairman
•
Founders A/S, chairman
•
Boston Holding A/S, board member
Experience
Mr. Jacobsen has broad management experience,
both as a CEO and as a chairman in major
international companies. He is currently the CEO of
William Demant Invest A/S. Previous positions
include President & CEO of Demant A/S (formerly
William Demant Holding A/S), President of Orion
A/S and Vice President overseeing corporate affairs
for both Atlas Danmark A/S and Thrige- Titan A/S.
Shares held in Össur
203,330 (incl. related parties).
Mr. Jacobsen holds no share options in the
Company.
Other
Mr. Jacobsen has no interest links with the
Company’s main clients or competitors. Mr.
Jacobsen is a dependent member of the Board.
Born in 1965
Member of the Board of Directors since the year
2008
Education
Doctorate in Industrial Relations from the London
School of Economics
Board positions
•
Icelandair, board member
•
Marel, board member
Experience
Svafa Grönfeldt is a Professor of Practice at the
Massachusetts Institute of Technology. She is a
founding member of MIT’s newest innovation
accelerator DesignX focused on developing new
ventures created at MIT. Dr. Gönfeldt is the co-
founder of The MET fund, a Cambridge
based seed investment fund. Previous positions
include executive leadership positions at two global
life science companies where she served as Chief
Organizational Development Officer of Alvogen and
Deputy to the CEO of Actavis Group. Dr. Grönfeldt
is a former President of Reykjavik University.
Shares held in Össur
Dr. Grönfeldt holds no shares nor share options in
the Company.
Other
Dr. Grönfeldt has no interest links with the
Company’s main clients, competitors, or major
shareholders. Dr. Grönfeldt is a dependent Board
member.
Born in 1968
Member of the Board of Directors since the year
2009
Education
Master’s degree in Business Administration from
the Copenhagen Business School in Denmark
Board positions
•
Epos A/S, chairman
•
Revenio Group Oyj, board member
•
Interacoustics A/S, president
Experience
Mr. Nielsen has spent his entire career with Demant
A/S in various and expanding roles throughout the
world. After working as an interim General Manager
of Oticon Australia Pty Ltd. Mr. Nielsen assumed, in
1996, his current position as President of
Diagnostics and Communications in Demant, which
has operations worldwide.
Shares held in Össur
Mr. Nielsen neither has shares nor share options in
the Company.
Other
Mr. Nielsen has no interest links with the
Company’s main clients or competitors. Mr.
Nielsen is a dependent member of the Board.
57
ÖSSUR ANNUAL REPORT
CORPORATE
Board of Directors
Dr. Alberto Esquenazi
Member of the Board of Directors
Gudbjörg Edda Eggertsdottir
Member of the Board of Directors
Born in 1957
Member of the Board of Directors since the year
2021
Education
Medical degree in Medicine and Surgery from
Universidad Nacional Autonoma de Mexico in
Mexico.
Board positions
•
American Academy of PM&R, past president
•
AMRPA and Einstein Healthcare Network, board
member
Experience
Dr. Esquenazi, MD, serves as the John Otto Haas
Chair of the Department of Physical Medicine and
Rehabilitation at MossRehab, in Philadelphia and is
the Chief Medical Officer as well as Director
of the Gait and Motion Analysis Laboratory and
Clinical Director of the Regional Amputee Center.
He is Professor of PM&R at Jefferson School of
Medicine and the SVP, Enterprise Rehabilitation
and Postacute Care Network. Dr. Esquenazi has
published widely and is a member of national and
international professional, educational, and
research societies.
Shares held in Össur
Dr. Esquenazi holds no shares options in the
Company.
Other
Dr. Esquenazi has no interest links with the
Company’s main clients, competitors or major
shareholders.
Dr. Esquenazi is an independent member of the
Board.
Born in 1951
Member of the Board of Directors since the year
2013
Education
Master’s degree (Pharm.) from Copenhagen
University in Denmark
Board positions
•
Brunnur Investment Fund, chairman
•
Coripharma Holding ehf., vice chairman
•
Florealis ehf., chairman
•
Orf Genetics hf., board member
•
Vistor hf., board member
•
Saga Natura ehf., board member
•
Pretium ehf., chairman
Experience
Previous positions include President & EVP
Strategic Projects of Actavis Plc in Iceland, a global
integrated specialty pharmaceutical company;
Deputy CEO and EVP Third Party Sales at Actavis
Group hf.; Deputy CEO, Head of R&D, Assistant
Managing Director, Development Manager,
Regulatory Manager and Marketing Manager at
Delta hf.; and Medical Representative at Pharmaco
hf. She was the President of the European Generic
Medicines Association from 2011-2013.
Shares held in Össur
26,318 (incl. related parties).
Ms. Eggertsdottir holds no share options in the
Company.
Other
Ms. Eggertsdottir has no interest links with the
Company’s main clients or competitors. Ms.
Eggertsdottir is an independent member of the
Board.
58
ÖSSUR ANNUAL REPORT
Executive Management
Jon Sigurdsson
President and CEO
Sveinn Sölvason
Chief Financial Officer
Egill Jonsson
EVP of Manufacturing and Operations
Born in 1956
With Össur since the year 1996
Education
Master’s degree in Business Administration (MBA)
from the United States International University in
San Diego
Bachelor’s degree in industrial engineering from
Odense Technical College in Denmark
Board positions
•
Vitrolife AB, Chairman
•
The Icelandic American Chamber of Commerce
Experience
Jon has been the CEO of Össur since 1996 and
prior to that he was the Commercial Counselor for
the Icelandic Trade Council in New York (1992-
1996), Chief Financial Officer at Álafoss (1989-
1991), Head of the International Division of
Eimskip (1986-1989) and an Engineer for Bang and
Olufsen Denmark (1982- 1984).
Jon’s experience as a member of the
Board of Directors in other companies/
organizations includes:
•
Rio Tinto Alcan Iceland 2003-2015
•
The Icelandic Chamber of Commerce 2002-2012
•
Reykjavik University from 2002-2009
•
Samherji hf. from 2002-2006
•
The Icelandic Trade Council from 1997-2003
•
Research Liaison Office of the University of
Iceland from 1996-2001
Shares held in Össur
902,708 (incl. related parties)
Born in 1978
With Össur since the year 2009
Board positions
•
Icelandic Chamber of Commerce
Education
Master’s degree in Finance and Accounting (Cand.
Merc.FIR) from Copenhagen Business School
Bachelor’s degree in international business from
Copenhagen Business School
Experience
Sveinn has been with Össur since 2009, previously
as Director of Treasury and Corporate
Development. Prior to joining Össur, he worked at
Marel, Kaupthing Bank, Goldman Sachs and HSH
Nordbank.
Shares held in Össur
25,000
Born in 1957
With Össur since the year 1996
Board positions
•
Federation of Icelandic Industries
•
Technical College Reykjavik, Chairman
Education
Master’s degree in Mechanical Engineering from
the Technical University in Copenhagen (DTU)
Bachelor’s degree in engineering from the
University of Iceland
Experience
Egill has led the M&O function since he joined in
1996. He was formerly a Project Manager at VGK
hf., an Engineering firm in Reykjavik (1985-1996).
Shares held in Össur
822,749 (incl. related parties)
59
ÖSSUR ANNUAL REPORT
Executive Management
Olafur Gylfason
EVP of Prosthetics and
Europe/Emerging Markets
Margret Lara Fridriksdottir
EVP of Human Resources and Corporate
Strategy
Gudjon G. Karason
EVP of Clinics
Born in 1969
With Össur since the year 1998
Board positions
•
Iðunn framtakssjóður slhf.
Education
Master’s degree in Engineering from the
University of Iceland
CS degree in Mechanical Engineering from the
University of Iceland
Experience
Gudjon has been with Össur since 1998, and
has since then worked in R&D, Marketing,
Sales, and Clinics in multiple positions. Prior to
joining Össur, Gudjon worked as a Development
Manager for a couple of smaller industrial
companies in Iceland.
Shares held in Össur
85,732
Born in 1969
With Össur since the year 1997
Education
Master’s degree in International Business
Economics from Alborg University in Denmark
Bachelor’s degree in business administration
from Bifrost School of Business in Iceland
Experience
Olafur has been with Össur since 1997; from 2001-
2013 as the Managing Director of EMEA and before
that, in Emerging Markets.
Shares held in Össur
9,517
Born in 1978
With Össur since the year 2000
Board positions
•
Investment committee of VEX I
Education
Master’s degree in Management and Strategy
from the University of Iceland
Bachelor’s degree in Business Administration
from the University of Iceland
Experience
Margret has been with Össur since 2000 in
various roles in finance, corporate strategy and
human resources.
Shares held in Össur
16,300
60
ÖSSUR ANNUAL REPORT
CORPORATE
Executive Management
Christian Robinson
EVP of Bracing & Supports and Americas
Dr. Kristleifur Kristjansson
EVP of Research and Development
Born in 1982
With Össur since the year 2012
Board positions
•
National Association for the Advancement of
Orthotics and Prosthetics (NAAOP)
Education
Juris Doctorate from Harvard Law School
Bachelor’s Degree in English Literature from
Brigham Young University
Experience
Since joining Össur in 2012, Christian has served in
several roles including as General Counsel
Americas, VP Finance Americas, and as Managing
Director Americas. Prior to joining Össur, he
practiced corporate and transactional law with
international law firm Paul Hastings LLP with a
focus on M&A and capital markets.
Shares held in Össur
11,314
Born in 1955
With Össur since the year 2012
Board positions
•
Skraeda ehf., chairman
Education
Medical Doctor degree from the University of
Iceland
Board-Certified Pediatrician from the Medical
College of Georgia
Clinical and molecular genetics fellowship from the
Baylor College of Medicine in Houston, Texas
Certified Pediatrician and Clinical Geneticist in
Iceland from 1993
Experience
Dr. Kristjansson joined Össur in 2012, for the
first 5 years as a Medical Officer and another 2
years as a Medical Officer and VP of Clinical
Affairs. Dr. Kristjansson’s previous positions
include co-founder and VP of Clinical Affairs and
Collaborations at deCODE genetics ehf. 1995
to 2012 and co-founder and CEO of Pediatric
Services in Iceland 1995 to 2014. Dr. Kristjansson
has acted as a consulting Pediatrician and Clinical
Geneticist for the University Hospital, Landspitalinn
Reykjavik Iceland, from 1998 to the present, and he
is the Founder of Skraeda ehf.
Shares held in Össur
1,850
61
ÖSSUR ANNUAL REPORT
CONSOLIDATED FINANCIAL
STATEMENTS
Össur hf.
Consolidated Financial Statements
31 December 2021
62
ÖSSUR ANNUAL REPORT
©
ÖSSUR, 02. 2022
Össur hf.
Consolidated Financial Statements
31.12.2021
Table of Contents
Statement by the Board of Directors and President and CEO
1
Independent Auditor’s Report
13
Financial Highlights and Key Ratios
18
Consolidated Income Statement
19
Consolidated Statement of Comprehensive Income
20
Consolidated Balance Sheet
21
Consolidated Statements of Cash Flow
23
Consolidated Statement of Changes in Equity
24
Notes to the Consolidated Financial Statements
25
Össur Consolidated Financial Statements 2021 10
Statement by the Board of Directors and President and CEO
0
It is the opinion of the Board of Directors and the President and CEO of Össur hf. (the Company or Össur), that these
Consolidated Financial Statements present the necessary information to evaluate the financial position of the Company at year
end, the operating results for the year and financial developments during the year 2021. Össur Consolidated Financial
Statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European
Union and additional Danish disclosure requirements for listed companies and additional requirements in the Icelandic
Financial Statement Act no. 3/2006.
Össur hf. designs, manufactures and sells orthopedic products specializing in prosthetics and bracing and supports solutions.
The Company is headquartered in Iceland and owns and operates subsidiaries in multiple countries around the world. The
Company sells its products worldwide, but the principal market areas are North America and Europe.
A requirement to conclude on non-financial information has been made part of Icelandic law from 2016 as part of the
implementation of EU directive 2013/34/EU that became effective for Member States in 2017. It is the Board of Directors
opinion that necessary information to analyze the environmental, social and employee aspects of the business can be obtained
by reviewing information in the Annual Report and in the Corporate Sustainability Report to help provide fundamental
understanding of the Company’s development, performance and position on non-financial matters. Össur joined the UN
Global Compact in 2011 and signed the UN Women’s Empowerment Principles in 2014. Annually, Össur publishes a report on
the progress of key projects in the four categories set forth by the Global Compact; environmental concerns, labor practices,
human rights and anti-corruption. In addition Össur publishes information on its contribution to selected UN Sustainable
Development Goals. Further information about Össur’s corporate sustainability and social responsibility activities can be found
in the Annual Report and 2021 progress report, available on the Company’s website:
https://www.ossur.com/global/our-
responsibility/our-commitments/csr -reports
.
The total sales of the Company amounted to USD 718.7 million (2020: USD 629.5 million) and increased by 14% from the
preceding year. Organic local currency sales increase was 10%. Net profit amounted to USD 65.7 million (2020: USD 7.9
million). Diluted Earnings per Share amounted to US cents 15.5 (2020: US cents 1.9.). Earnings before interest, taxes,
depreciation, impairment and amortization (EBITDA) amounted to USD 149.0 million (2020: USD 93.0 million).
The total assets of the Company amounted to USD 1,246.9 million at year end, liabilities were USD 620.3 million and equity
was USD 626.6 million. The equity ratio at year end was 50%, (2020: 48%).
The Company employed on average 3,761 employees in 2021 (2020: 3,505) and 3,668 at year end (2020: 3,385).
Össur’s shares are admitted to trading on the Nasdaq Copenhagen stock exchange. The market value of the Company at year
end was USD 2,724 million (2020: USD 3,380 million) and the share price in DKK decreased by 12.7% during the year. At year
end, registered shareholders in Össur were 4,540 compared to 4,512 at the beginning of the year. It should be noted that due
to the concentration of trading in Nasdaq Copenhagen in 2017, about 1,600 shareholders that held shares listed in Iceland
were consolidated into a few nominee accounts. The ten largest shareholders and their ownership percentage are: William
Demant Invest A/S - 51.9%, Islandsbanki Bank – 14.9% (nominee), Arbejdsmarkedets Tillægspension (ATP) - 5.2%, State Street
Bank – 3.8%, Lannebo Fonder – 2.1%, SEB Sverigefond Smabolag Chans/Risk - 2.0%, Landsbankinn Bank – 2.0% (nominee), SEB
SV SMABOL – 1.5%, Clearstream – 1.3% (nominee) and JP Morgan Bank Luxembourg - 1.3% (nominee). William Demant Invest
A/S (WDI) ownership in Össur exceeded 50% in January 2018. According to WDI's announcement at the time, their intention is
to hold 50-60% of Össur’s shares going forward and WDI has no intention of taking over Össur or delisting Össur’s shares from
Nasdaq Copenhagen. Furthermore, WDI has no intention of making changes to Össur’s strategy, management or operations.
Össur Consolidated Financial Statements 2021 11
Statement by the Board of Directors and President and CEO
0
The Company follows the Danish Recommendations for Corporate Governance issued by the Danish Committee on Corporate
Governance, available at:
https://corporategovernance.dk/
. The Board of Directors complies with the Articles of Association of
the Company and the Board of Directors' Rules of Procedure, which address the Board’s roles and responsibilities etc. The
Board of Directors is composed of five members elected at each Annual General Meeting for a term of one year. The Board of
Directors consists of two women and three men in compliance with Icelandic law on gender ratio. No Össur employee sits on
the Board of Directors. The Audit Committee complies with the Committee’s Rules of procedures, which address the
Committee’s roles and responsibilities etc. The Audit Committee is composed of three members elected by the Board. The CEO
manages the Company’s daily operations. The Board has approved an Equal Opportunity Policy that prohibits all
discrimination. The policy is available on the Company’s website:
https://www.ossur.com/global/our -responsibility/our-
commitments/policies
Responsibility report available on the Company’s website:
https://www.ossur.com/global/our -responsibility/our-
commitments/csr-reports
. The Board approves a Corporate Governance report that includes all the information to be included
in the statutory statement referred to in Article 66 (c) of the Icelandic Financial Statement Act no. 3/2006, as well as
explanations, comments and information on each recommendation in the Danish Recommendation for Corporate Governance.
The report is available on the Company’s website:
h
ttps://www.ossur.com/global/investor -relations/corporate/reports
.
No share buybacks were made in 2021. Össur has decided to revive its share buyback program and will commence it shortly.
Össur will propose not to reduce the share capital at the Annual General Meeting as the Company did not acquire any treasury
shares in 2021 and the treasury shares held will be used to fulfill obligations under share option agreements that have vested
or will be vesting in 2022. Share options contracts were settled with 162 thousands of Össur treasury shares during the year.
In line with the Company‘s Capital Structure and Capital Allocation Policy, the Board of Directors will propose to the Annual
General Meeting in 2022 not to pay a cash dividend. With emphasis on prioritizing investments in growth opportunities, value-
adding investment opportunities and acquisitions, Össur has decided to discontinue dividend payments and focus on returning
excess capital to shareholders via purchase of treasury shares in accordance with the Company’s Capital Structure and Capital
Allocation Policy.
Össur has maintained its operations throughout the COVID-19 pandemic, prioritizing production and product availability, and
ensured that guidelines from local and global healthcare authorities are being followed. The COVID-19 pandemic and the
associated lockdowns had an adverse effect on sales in 2021, primarily in Americas and Australia in the third quarter, while
other regions were less affected. Furthermore, the pandemic has caused temporary variable cost increases due to global
supply chain challenges, and related short-term negative impact on productivity although Össur’s manufacturing sites and
warehouses are operating at normal capacity. The long-term prospects or underlying fundamental drivers of the prosthetics
and bracing & supports markets are not expected to change and the impact from COVID-19 is expected to lead to some pent-
up demand. Primary focus is on business continuity and the safety of employees, customers, and end-users.
Össur Consolidated Financial Statements 2021 12
Statement by the Board of Directors and President and CEO
0
In our opinion, the Consolidated Financial Statements of Össur hf. for the financial year 2021 identified as “ossur-2021-12-
31.zip” are prepared in all material respects, in compliance with the ESEF Regulation.
The Board of Directors and President and CEO of Össur hf. hereby confirm the Consolidated Financial Statements of Össur for
the year 2021 with their signatures.
Reykjavík, 1 February 2022
Board of Directors
Niels Jacobsen
Chairman of the Board
Svafa Grönfeldt Alberto Esquenazi
Arne Boye Nielsen Guðbjörg Edda Eggertsdóttir
President and CEO
Jón Sigurðsson
Össur Consolidated Financial Statements 2021 13
Independent auditor’s report
0
To the Shareholders of Össur hf.
Opinion
We have audited the Consolidated Financial Statements of Össur hf. and its subsidiaries (the Company), which comprise the
Consolidated Balance Sheet as at December 31, 2021, the Consolidated Income Statement, the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Cash Flow, the Consolidated Statement of Changes in Equity for the
year then ended, and the Notes to the Consolidated Financial Statements, including a summary of significant accounting
policies. In our opinion, the accompanying Consolidated Financial Statements give a true and fair view of the Company´s
financial position at December 31, 2021, and its consolidated financial performance and its consolidated cash flows for the
year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union,
additional Danish disclosure requirements for listed companies and additional requirements in the Icelandic Financial
Statement Act no. 3/2006. Our opinion in this report on the Consolidated Financial Statements is consistent with the content
of the additional report that has been submitted to the audit committee in accordance with the EU Audit Regulation 537/2014
Article 11.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section
of our report. We are independent of the Company in accordance with the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are
relevant to our audit of financial statements in Iceland, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code. This includes that, based on the best of our knowledge and belief, no prohibited
services referred to in the EU Audit Regulation 537/2014 Article 5.1 has been provided to the audited company or, where
applicable, its parent company or its controlled companies within the EU. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
Consolidated Financial Statements of the current period. These matters were addressed in the context of our audit of the
Consolidated Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Impairment of goodwill
Book value of goodwill at year end amounted to 644 million. The change in goodwill consist s of provisional additions due to
current year acquisitions and adjustments to prior year provisional values amounting to 48.5 million as well as exchange rate
difference loss amounting to 16.4 million.
The management considers that each geographical segment constitutes its own cash generating unit (‘CGU’). The key
assumptions applied by the managements in the impairment test are segment specific discount rates, future revenue growth
and expected future margins. Determining whether the carrying value of goodwill is recoverable requires management to
make significant estimates regarding key assumptions based on management’s view of future business prospects.
Össur Consolidated Financial Statements 2021 14
Independent auditor’s report
0
Due to the relative sensitivity of certain inputs to the impairment testing process, in particular the future cash flows of the
CGUs noted above, the valuation of goodwill is considered a key audit matter.
In order to address this key audit matter, we audited the assumptions used in the impairment model for goodwill. As part of
our work, we engaged our internal specialists to assist with:
●
Critically evaluating whether the model used by management to calculate the value in use of the individual CGU’s
complies with the requirements of IAS 36 Impairment of Assets;
●
Validating the assumptions used to calculate the discount rates and recalculating these rates;
●
Considering the projected future cash flows, understanding variances between the forecast and actual results for the
year ended 31 December 2021 and comparing the forecast growth trends to historic trends;
●
Comparing the long-term growth rates for each CGU to external market data;
●
Evaluating the appropriateness of the sensitivity analysis applied by management to the impairment testing model
including considering whether the scenarios reasonably represent possible changes in key assumptions;
●
Performing further sensitivity analysis based on recent trading activity and our understanding of the future prospects
to identify whether these scenarios could give rise to further impairment; and
●
Analysing the future projected cash flows used in the models to determine whether they are reasonable and
supportable given the current macroeconomic climate and expected future performance of the CGU’s.
We also reviewed the disclosures presented in note 14 to the Consolidated Financial Statements to confirm compliance with
the requirements within IAS 36.
Other information
Management is responsible for other information. Other information consists of Management Commentary. Our opinion on
the Consolidation Financial Statements does not cover the other information and we do not express any form of assurance
conclusion thereon except the confirmation regarding Statement of Board of Director and President and CEO as stated below.
In connection with our audit of the Consolidated Financial Statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the information in the Consolidated
Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
In accordance with Paragraph 2 article 104 of the Icelandic Financial Statement Act no. 3/2006, we confirm to the best of our
knowledge that the Statement of Board of Director and President and CEO includes all information required by the Icelandic
Financial Statement Act that is not disclosed elsewhere in the Consolidated Financial Statements.
Responsibilities of management and those charged with governance for the Consolidated Financial Statements
Management and those charged with governance is responsible for the preparation and fair presentation of the Consolidated
Financial Statements in accordance with IFRS as adopted by the European Union, additional Danish disclosure requirements
for listed companies and additional requirements in the Icelandic Financial Statement Act no. 3/2006, and for such internal
control as management and those charged with governance determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the Consolidated Financial Statements, management and those charged with governance is responsible for
assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management and those charged with governance either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Össur Consolidated Financial Statements 2021 15
Independent auditor’s report
0
Auditor’s responsibilities for the audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these Consolidated Financial Statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
●
Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
●
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
●
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
●
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consolidated
Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
●
Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the
disclosures, and whether the Consolidated Financial Statements represent the underlying transactions and events in a
manner that achieves fair presentation.
●
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the Consolidated Financial Statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Össur Consolidated Financial Statements 2021 16
Independent auditor’s report
0
In addition to our work as the auditors of the Company, Deloitte has provided the firm with permitted additional services such
as other assurance engagements and consultation on tax matters. Deloitte has in place internal procedures in order to ensure
its independence before acceptance of additional services. The Company’s Audit Committee also has in place internal
procedures to approve additional services before they commence. The Audit Committee also evaluates the independence of
the Company’s auditors on yearly basis to ensure their independence and objectivity.
OTHER LEGAL AND REGULATORY REQUIREMENTS
Report on compliance with the ESEF Regulation
As part of our audit of the Consolidated Financial Statements of Össur hf. we performed procedures to express an opinion on
whether the annual report for the year then ended 31.12.2021 with the file name “ossur-2021-12-31.zip” is prepared, in all
material respects, in compliance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic
Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in XHTML format.
Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes:
●
The preparation of the annual report in XHTML format;
●
The selection and application of appropriate iXBRL tags,including extensions to the ESEF taxanomy and the anchoring
thereof to elements in the taxanomy, for financial information required to be tagged using judgement where
necessary;
●
Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human
readable format; and
●
For such internal control as management determines necessary to enable the preparation of an annual report that is
compliant with ESEF Regulation.
Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in
compliance with the ESEF Regulation based on the evidence we have obtained, and to issue a report that includes our opinion.
The nature, timing and extent of procedures selected depend on the auditor´s judgement, including the assessment of the
risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The
procedures include:
●
Testing whether the annual report is prepared in XHTML format;
●
Obtaining an understanding of the Company´s iXBRL tagging process and of internal control over the tagging process;
●
Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements;
●
Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and
●
Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements.
Össur Consolidated Financial Statements 2021 17
●
Independent auditor’s report
0
In our opinion, the annual report of Össur hf. for the financial year 1.1.2021 – 31.12.2021 with the file name “ossur-2021-12-
31.zip” is prepared, in all material respects, in compliance with the ESEF Regulation.
Deloitte was appointed auditor of Össur hf. by the general meeting of shareholders on 8 March 2021. Deloitte has been
elected auditor since the Company´s founding in 1971.
Kópavogur, 1 February 2022
Deloitte ehf.
Eyþór Guðjónsson Signý Magnúsdóttir
State Authorized Public Accountant State Authorized Public Accountant
Össur Consolidated Financial Statements 2021 18
Financial Highlights and Key Ratios
USD millions
2021
2020
2019
2018
2017
Income Statement
Net sales
719
630
686
613
569
Gross profit
455
391
439
387
355
Operating expenses (excl. other income / exp.)
360
338
341
304
280
EBITDA
149
93
141
107
97
EBITDA before special items
149
93
150
115
103
EBIT
97
28
98
79
75
Net profit
66
8
69
80
58
Sales growth
Sales growth USD
%
14
(8)
12
8
9
Growth breakdown:
%
10
(10)
5
5
5
%
3
0
(4)
1
0
%
1
2
11
2
4
Balance Sheet
Total assets
1,247
1,214
1,091
914
793
Equity
627
577
569
538
500
Net interest-bearing debt (NIBD)
363
381
302
180
121
Cash Flow
Cash generated by operations
128
119
120
92
90
Free cash flow
74
68
63
39
55
Key ratios
Gross profit margin
%
63
62
64
63
62
EBIT margin
%
14
4
14
13
13
EBITDA margin
%
21
15
21
18
17
EBITDA margin before special items
%
21
15
22
19
18
Equity ratio
%
50
48
52
59
63
Net debt to EBITDA before special items
2.4
4.1
2.0
1.6
1.2
Effective tax rate
%
24
38
24
18
16
Return on equity
%
11
1
12
15
12
CAPEX to net sales
%
3.7
3.8
4.6
5.0
3.4
Full time employees at period end
3,668
3,385
3,449
3,147
2,990
Full time employees on average
3,761
3,505
3,382
2,775
2,948
Market
Market value of equity
2,724
3,380
3,340
2,055
1,871
Number of shares in millions
423
423
425
431
437
Diluted EPS in US cents
15.5
1.9
16.2
18.7
13.3
Össur Consolidated Financial Statements 2021 19
Consolidated Income Statement
All amounts in USD '000
Notes
2021
2020
Net sales
3
Cost of goods sold
(263,282 )
(238,268 )
Gross profit
Other income / (expenses)
6
(24,978 )
Sales and marketing expenses
(253,885 )
(229,285 )
Research and development expenses
(31,735 )
(31,018 )
General and administrative expenses
(74,143 )
(77,666 )
Earnings before interest and tax (EBIT)
97,311
28,288
Financial income
Financial expenses
(12,774 )
(10,918 )
Net exchange rate difference
(5,880 )
Net financial expenses
9
(10,671 )
(15,568 )
Earnings before tax (EBT)
Income tax
10
(20,984 )
(4,799 )
Net profit
Attributable to:
Owners of the Company
Non-controlling interests
Net profit
65,656
7,921
Earnings per share
11
Earnings per share (US cent)
Diluted earnings per share (US cent)
Össur Consolidated Financial Statements 2021 20
Consolidated Statement of Comprehensive Income
All amounts in USD '000
2021
2020
Net profit
Items that may be reclassified subsequently to profit or loss:
Change in cash flow hedges
(13 )
(400 )
Exchange differences on translating foreign operations
(14,098 )
Acc.transl.diff. reclassified to profit or loss on disposal of foreign operations
Income tax relating to components of other comprehensive income
(1,878 )
Other comprehensive income, net of income tax
(15,989 )
Total comprehensive income
Attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income
49,667
23,186
Össur Consolidated Financial Statements 2021 21
Consolidated Balance Sheet
Assets
All amounts in USD '000
Notes
31.12.2021
31.12.2020
Property, plant and equipment
12
Right of use assets
13
Goodwill
14
Other intangible assets
15
Investment in associates
16
Other financial assets
17
Deferred tax assets
25
Non-current assets
Inventories
18
Accounts receivable
19
Other assets
20
Bank balances and cash equivalents
21
Current assets
Total assets
Össur Consolidated Financial Statements 2021 22
Consolidated Balance Sheet
Equity and liabilities
All amounts in USD '000
Notes
31.12.2021
31.12.2020
Issued capital and share premium
22
Reserves
(45,917 )
(31,514 )
Retained earnings
Equity attributable to owners of the Company
621,586
572,512
Non-controlling interest
Total equity
Borrowings
24
Lease liabilities
13
Deferred tax liabilities
25
Provisions
26
Deferred income
27
Other financial liabilities
28
Non-current liabilities
Borrowings
24
Lease liabilities
13
Accounts payable
Income tax payable
Provisions
26
Accrued salaries and related expenses
Other liabilities
30
Current liabilities
Total equity and liabilities
Össur Consolidated Financial Statements 2021 23
Consolidated Statement of Cash Flow
All amounts in USD '000
Notes
2021
2020
Earnings before interests and tax (EBIT)
Depreciation, amortization and impairment
12, 13, 14, 15
Change in inventories
(15,783 )
Change in receivables
(13,184 )
Change in payables
(7,905 )
Other operating activities
Cash generated by operations
Interest received
Interest paid
(12,150 )
(10,441 )
Income tax paid
(16,298 )
(16,940 )
Net cash provided by operating activities
Purchase of fixed and intangible assets
12, 15
(26,688 )
(24,022 )
Acquisition / divestment of subsidiaries, net of cash in acq. entities
31
(33,940 )
(76,286 )
Other investing activities
(6,141 )
Cash flows to investing activities
(59,447 )
(106,449 )
Proceeds from long-term borrowings
Repayments of long-term borrowings
(17,352 )
(13,586 )
Changes in revolving credit facility
(14,038 )
Payments of lease liabilities
(20,046 )
(17,043 )
Payment of dividends
(9,276 )
Increase in subsidiaries not affecting control
(2,546 )
Dividends from subsidiaries paid to non-controlling interests
(1,330 )
(48 )
Change in treasury shares
(3,943 )
Cash flows from / (to) financing activities
(51,073 )
Net change in cash
(9,990 )
(7,176 )
Cash at beginning of period
Cash at end of period
85,197
Össur Consolidated Financial Statements 2021 24
Consolidated Statement of Changes in Equity
Share
Attributable to
Non-
Share
Share
Statutory
option
Fair value
Translation
Accumulate
owners of
controlling
Total
All amounts in USD '000
capital
premium
reserve
reserve
reserve
reserve
profits
the parent
interests
equity
Balance at 1 January 2020
(51,069 )
Net profit
Change in cash flow hedges
(320 )
(320 )
(320 )
Transl. diff. of shares in subsidiaries
Acc.transl.diff. reclassified to profit or loss on
disposal of subsidiaries
3,155
Total comprehensive income
(320 )
Payment of dividends
(9,276 )
(9,276 )
(48 )
(9,324 )
Share option charge for the period
Share option vested during the period
(992 )
(10 )
Change in non-controlling interests
(1,434 )
(1,434 )
(1,179 )
(2,613 )
Purchase of treasury shares
(10 )
(9,299 )
(9,309 )
(9,309 )
Minority interest arising on acquisition
(391 )
(391 )
Balance at 31 December 2020
(35,484 )
Net profit
Change in cash flow hedges
(83 )
(83 )
(83 )
Transl. diff. of shares in subsidiaries
(15,906 )
(15,906 )
0
(15,906 )
Total comprehensive income
(83 )
(15,906 )
Payment of dividends
(1,330 )
(1,330 )
Share option charge for the period
Share option vested during the period
(682 )
(1,217 )
(1,199 )
0
(1,199 )
Balance at 31 December 2021
(51,390 )
In June 2016 the Icelandic Parliament passed a legal reform of the Icelandic Financial Statements Act no. 3/2006 which became effective on January 1, 2016. The requirement is that retained earnings are separated into two
categories: restricted and unrestricted retained earnings. Unrestricted retained earnings consist of undistributed profits and losses accumulated by the Company, less transfers to the Company's statutory reserve and other restricted
retained earnings categories. The amount of restricted retained earnings is USD 380 million at year end (2020: USD 307 million).
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 25
1. General information
Össur is a limited liability company incorporated and domiciled in Iceland. The address of its registered office is Grjothals 5,
Reykjavik. Its ultimate controlling party is William Demant Invest A/S. The Consolidated Financial Statements of the Company
as at and for the year ended 31.12.2021 comprise the Company and its subsidiaries (together referred to as "the Company" or
"Össur”).
The Company is a global orthopaedics company, specializing in the design, development, manufacturing and sales of
prosthetics and bracing and supports products. The Company sells its products worldwide, but the principal market areas are
North America and Europe.
The Consolidated Financial Statements are presented in US dollars and all values are rounded to the nearest thousand (’000),
except when otherwise indicated. In preparing the Consolidated Financial Statements, the Company has applied the concept
of materiality to the presentation and level of disclosure. It is the option of management that essential and mandatory
information is disclosed which is relevan t to an understanding by the reader of these Consolidated Financial Statements.
These Consolidated Financial Statements have been approved for issue by the Board of Directors and CEO on 1 February 2022.
The Consolidated Financial Statements as presented in this report are subject to approval by the Annual General Meeting of
Shareholders, to be held on 8 March 2022.
The Company is listed on the Nasdaq Copenhagen Stock Exchange.
2. Quarterly statements
Unaudited
Full year
Q4
Q3
Q2
Q1
2021
2021
2021
2021
2021
Net sales
718,669
187,542
180,289
189,992
160,846
Cost of goods sold
(263,282)
(67,007)
(68,513)
(69,513)
(58,249)
Gross profit
455,387
120,535
111,776
120,479
102,597
Gross profit margin
63%
64%
62%
63%
64%
Other income / (expenses)
1,687
1,093
85
236
273
Sales and marketing expenses
(253,885)
(67,624)
(62,309)
(64,017)
(59,935)
Research and development expenses
(31,735)
(8,397)
(8,011)
(8,055)
(7,272)
General and administrative expenses
(74,143)
(19,664)
(16,845)
(18,690)
(18,944)
EBIT
97,311
25,943
24,696
29,953
16,719
Net financial income / (expenses)
(11,790)
(2,775)
(2,495)
(3,700)
(2,820)
Net exchange rate difference
1,119
334
764
(1,127)
1,148
EBT
86,640
23,502
22,965
25,126
15,047
Income tax
(20,984)
(5,947)
(5,535)
(5,846)
(3,656)
Net profit
65,656
17,555
17,430
19,280
11,391
EBITDA
148,954
40,613
37,310
42,382
28,649
EBITDA margin
21%
22%
21%
22%
18%
EBITDA is calculated as earnings before interest, taxes, depreciation, impairment and amortization. Financial items and share
in net profit or loss of associated companies are not included in the EBITDA measurement.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 26
3. Net Sales
2021
2020
Specified according to geographical segments:
Americas
338,882
307,135
EMEA
315,173
266,902
APAC
64,614
55,466
Total
718,669
629,503
Specified according to product lines:
Prosthetics
452,772
372,058
Bracing and Supports
265,897
257,445
Total
718,669
629,503
Timing of revenue recognition
Revenues from additional sold warranties and service checks included in standard warranties are released over the warranty
period. Refer to note 36 for accounting policy on revenue recognition and note 27 for breakdown of revenues recognised over
time and amounts deferred and released during the year. All other revenues are released at point in time.
4. Segment Information
Information reported to the President and CEO for the purposes of resource allocation and assessment of segment
performance focuses on geographical markets from the location of customers. The geographical segments are EMEA (Europe
Middle-East and Africa), Americas and APAC (Asia-Pacific).
2021
Americas
EMEA
APAC
Eliminations
Consolidated
Sales
External sales
338,882
315,173
64,614
0
718,669
Inter-segment sales
100,542
418,317
9,630
(528,489)
0
Total sales
439,424
733,490
74,244
(528,489)
718,669
Results
Segment results
38,156
47,206
11,949
0
97,311
Net financial income / (expenses)
(10,671)
EBT
86,640
Income tax
(20,984)
Net profit
65,656
Balance sheet 31.12.2021
Segment assets
649,080
532,865
64,970
0
1,246,915
Segment liabilities
145,873
455,935
18,512
0
620,320
Other information
Capital additions
6,661
18,235
1,792
0
26,688
Depreciation, impairment and amortization
18,553
30,674
2,416
0
51,643
The majority of inter-segment sale prices are set using the Transactional Net Margin Method (TNMM).
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 27
2020
Americas
EMEA
APAC
Eliminations
Consolidated
Sales
External sales
307,135
266,902
55,466
0
629,503
Inter-segment sales
90,941
360,397
8,625
(459,963)
0
Total sales
398,076
627,299
64,091
(459,963)
629,503
Results
Segment results
5,878
14,920
7,489
0
28,288
Net financial income/(expenses)
(15,568)
EBT
12,720
Income tax
(4,799)
Net profit
7,921
Balance sheet 31.12.2020
Segment assets
616,806
539,113
58,412
0
1,214,331
Segment liabilities
151,706
468,843
16,592
0
637,141
Other information
Capital additions
3,164
18,558
2,300
0
24,022
Depreciation, impairment and amortization
17,728
45,634
1,337
0
64,699
5. Sales and expenses split by main currencies
2021
2020
LCY
USD
%
LCY
USD
%
Sales
USD
310,130
310,130
43%
293,548
293,548
47%
EUR
139,681
165,119
23%
120,125
136,888
22%
ISK
327,759
2,579
0%
277,592
2,056
0%
Nordic curr. (SEK, NOK, DKK)
102,099
14%
91,602
14%
Other (GBP, AUD, CAD & Other)
138,742
19%
105,409
17%
Total
718,669
100%
629,503
100%
COGS and OPEX
USD
289,268
289,268
47%
293,249
293,249
49%
EUR
94,175
111,274
18%
103,458
117,080
19%
ISK
7,476,759
58,840
10%
8,176,402
60,642
10%
Nordic curr. (SEK, NOK, DKK)
91,396
15%
84,001
14%
Other (GBP, MXN, CAD & Other)
70,580
11%
46,244
8%
Total
621,358
100%
601,215
100%
Currency split is derived by using best available information at each time.
6. Other income / (expenses)
Other income / (expenses) in 2020 consist mainly of cost related to divestment of subsidiaries, as described in note 31.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 28
7. Salaries
2021
2020
Salaries
239,363
219,485
Salary-related expenses
53,497
49,258
292,860
268,743
Full time employees (FTE) on average
3,761
3,505
Full time employees at period end
3,668
3,385
Included in salary-related expense are pension related expenses amounting to USD 17.6 million (2020: USD 14.0 million).
Salaries and salary-related expenses, classified by functional category:
2021
2020
Cost of goods sold
67,199
65,201
Sales and marketing expenses
154,998
137,396
Research and development expenses
21,746
20,422
General and administrative expenses
48,917
45,724
292,860
268,743
Management salaries and benefits
Salaries
Shares owned
(ii)
Board of Directors:
2021
2020
2021
2020
Niels Jacobsen - Chairman of the Board
(i)
100
100
219.493.992
219.493.992
Kristján Tómas Ragnarsson - Vice Chairman in 2020
0
60
0
0
Svafa Grönfeldt - Vice Chairman in 2021
60
40
0
0
Alberto Esquenazi
40
0
0
0
Arne Boye Nielsen
40
40
0
0
Guðbjörg Edda Eggertsdóttir
40
40
26,318
26,318
(i) Shares owned by William Demant Invest A/S which Niels Jacobsen represents on the Board. Niels and financially related parties own personally 203,330
shares (2020: 203,330 shares).
(ii) Shares owned are displayed in total number of owned shares, not rounded to the nearest thousand.
The Board of Directors did not hold any share option contracts at the end of the current period nor at the end of the prior year
period.
2021
Fixed base
Cash based
Other
Share based
Total
salary
incentive
Pension
benefits
incentive
remuneration
Executive Management:
Jón Sigurðsson President and CEO
(i)
1,054
707
21
159
416
2,357
Executive management (7 people)
(ii)
2,429
979
303
50
814
4,576
3,483
1,687
324
210
1,230
6,934
2020
Fixed base
Cash based
Other
Share based
Total
salary
incentive
Pension
benefits
incentive
remuneration
Executive Management:
Jón Sigurðsson President and CEO
(i)
956
0
0
163
330
1,448
Executive management (7 people)
(ii)
2,031
0
252
52
536
2,871
2,987
0
252
214
866
4,319
(i) Shares owned by Jón Sigurðsson 902,708 (2020: 899,474)
(ii) Shares owned by members of executive management at year end 972,462 (2020: 918,159).
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 29
8. Fees to Auditors
2021
2020
Audit of Financial Statements
1,569
1,459
Other services
215
592
1,784
2,051
9. Financial Income / Expenses
2021
2020
Interests on bank deposits
168
459
Share in profit of associated companies
396
290
Other financial income
420
481
Financial income
984
1,230
Interests on loans
(5,117)
(5,158)
Interest on leases
(4,681)
(4,453)
Other financial expenses
(2,976)
(1,307)
Financial expenses
(12,774)
(10,918)
Net exchange rate differences
1,119
(5,880)
Net financial expenses
(10,671)
(15,568)
In the year 2020, accumulated translation difference amounting to USD 3.2 million loss, relating to divestment of subsidiaries,
was reclassified from equity to net exchange rate difference.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 30
10. Income Tax
2021
2020
Current tax expenses
(19,487)
(9,002)
Deferred tax expenses
(1,497)
4,203
(20,984)
(4,799)
2021
2020
Amount
%
Amount
%
Earnings before taxes
86,640
12,720
Income tax calculated at 20%
(17,328)
20%
(2,544)
20%
Effect of different tax rates of other jurisdictions
(2,550)
3%
224
(2%)
Effect of non-deductible expenses / non-taxable income
(678)
1%
(3,137)
25%
Effect of change in tax rate
(3)
0%
(41)
0%
Other effects
(425)
0%
699
(5%)
(20,984)
24%
(4,799)
38%
The 20% tax rate used for 2021 and 2020 in the above tax rate reconciliation is the statutory corporate income tax rate
applicable to entities subject to tax in Iceland. Taxation for other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
Deferred tax:
2021
2020
Origination and reversal of temporary differences
(1,500)
4,162
Effect of changes in tax rate
3
41
(1,497)
4,203
Deferred tax recognized in the Consolidated Income Statement:
2021
1/1/2021
Recognized in
Income
Statement
Recognized
directly in
equity
Acquisitions /
disposals
Exc. rate
difference
31.12.2021
Goodwill
(10,122)
(1,215)
41
(11,296)
Intangible assets
(7,910)
178
(38)
227
(7,543)
Property, plant and equipment
(1,979)
100
2
(1,877)
Tax loss carry forward
2,897
(708)
(123)
2,066
Inventories
4,337
8
4
4,349
Provisions
2,151
767
(35)
2,883
Current liabilities
4,814
357
(32)
5,139
Receivables
1,993
(991)
(218)
(26)
758
Other
5,278
7
(1,718)
(29)
3,538
Total
1,459
(1,497)
(1,718)
(256)
29
(1,983)
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 31
2020
1/1/2020
Recognized in
Income
Statement
Recognized
directly in
equity
Acquisitions /
disposals
Exc. rate
difference
31.12.2020
Goodwill
(7,617)
(2,449)
(56)
(10,122)
Intangible assets
(9,638)
3,118
(1,133)
(257)
(7,910)
Property, plant and equipment
(2,888)
858
81
(30)
(1,979)
Tax loss carry forward
836
3,001
(1,051)
111
2,897
Inventories
5,818
(1,484)
(4)
7
4,337
Provisions
2,159
(46)
(8)
46
2,151
Current liabilities
3,996
182
643
(7)
4,814
Receivables
1,485
266
232
10
1,993
Other
3,260
757
1,559
(316)
18
5,278
Total
(2,589)
4,203
1,559
(1,556)
(158)
1,459
The Company has unused tax losses available for which no deferred tax asset is recognized. At year end 2021 these unused tax
losses amounted to USD 15.0 million (2020: USD 15.1 million). Of this amount, USD 6.4 million of unused tax losses will expire
in 5-10 years (2020: USD 6.5 million). The remaining tax losses carry an indefinite term.
11. Earnings per share
2021
2020
Net profit
65,656
7,921
Total weighted average number of ordinary shares (in '000)
422,161
421,775
Total weighted avg. number of shares incl. potential shares (in '000)
422,795
422,725
Earnings per share (US cent)
15.6
1.9
Diluted earnings per share (US cent)
15.5
1.9
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 32
12. Property, plant and equipment
Buildings &
sites
Machinery &
equipment
Fixtures &
office equip.
Computer
equipment
Total
2021
Cost
At 1 January
2,251
69,654
45,193
15,701
132,799
Reclassification
(430)
0
331
99
0
Additions
118
8,867
3,912
4,062
16,959
Acquired on acquisition of subsidiary
63
519
526
(21)
1,087
Exchange rate differences
(136)
(1,059)
(1,902)
(432)
(3,529)
Eliminated on disposal
(260)
(1,575)
(637)
(996)
(3,468)
Fully depreciated assets
0
(4,075)
(1,342)
(1,054)
(6,471)
At 31. December 2021
1,606
72,331
46,081
17,359
137,377
Depreciation
At 1 January
233
41,165
22,196
10,739
74,333
Reclassification
0
0
(59)
59
0
Charge for the period
184
9,009
5,865
3,498
18,556
Exchange rate differences
(5)
(729)
(951)
(325)
(2,010)
Eliminated on disposal
0
(1,044)
(349)
(987)
(2,380)
Fully depreciated assets
0
(4,075)
(1,342)
(1,054)
(6,471)
At 31. December 2021
412
44,326
25,360
11,930
82,028
At 31. December 2021
1,194
28,005
20,721
5,429
55,349
Depreciation classified by functional category:
2021
2020
Cost of goods sold
8,571
9,925
Sales and marketing expenses
5,071
3,328
Research and development expenses
833
1,190
General and administrative expenses
4,081
3,883
Total
18,556
18,326
2020
Buildings &
sites
Machinery &
equipment
Fixtures &
office equip.
Computer
equipments
Total
Cost
At 1 January
12,498
89,640
48,869
16,089
167,096
Additions
136
6,037
5,215
2,380
13,768
Acquired on acquisition of subsidiary
2,000
2,270
1,064
185
5,519
Exchange rate differences
619
1,726
1,524
530
4,399
Eliminated on disposal/divestment
(13,002)
(19,735)
(3,438)
(1,532)
(37,707)
Fully depreciated assets
0
(10,284)
(8,041)
(1,951)
(20,276)
At 31. December 2020
2,251
69,654
45,193
15,701
132,799
Depreciation
At 1 January
9,563
55,610
26,445
10,283
101,901
Charge for the period
197
9,684
5,111
3,334
18,326
Exchange rate differences
453
1,322
832
361
2,968
Eliminated on disposal/divestment
(9,980)
(15,167)
(2,151)
(1,288)
(28,586)
Fully depreciated assets
0
(10,284)
(8,041)
(1,951)
(20,276)
At 31. December 2020
233
41,165
22,196
10,739
74,333
At 31. December 2020
2,018
28,489
22,997
4,962
58,466
None of the Company's property, plant and equipment are pledged. Major divestments are subject to bank approval.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 33
13. Leases
Right of use assets
2021
Buildings &
sites
Machinery &
equipment
Total
At 1 January
111,174
1,735
112,909
Additions and renewals
36,442
3,107
39,549
Depreciation charge for the period
(19,567)
(1,738)
(21,305)
Eliminated on disposal
(1,009)
(2)
(1,011)
Exchange rate differences
(3,048)
(363)
(3,411)
At 31. December 2021
123,992
2,739
126,731
Depreciation classified by functional category:
2021
2020
Cost of goods sold
8,522
7,381
Sales and marketing expenses
4,261
3,690
Research and development expenses
2,557
2,214
General and administrative expenses
5,965
5,170
Total
21,305
18,455
2020
Buildings &
sites
Machinery &
equipment
Total
At 1 January
94,791
3,427
98,218
Additions and renewals
31,566
794
32,360
Depreciation charge for the period
(16,545)
(1,910)
(18,455)
Eliminated on disposal / divestment
(1,977)
(753)
(2,730)
Exchange rate differences
3,339
177
3,516
At 31. December 2020
111,174
1,735
112,909
Lease liabilities
Maturity analyses:
31.12.2021
31.12.2020
In 2022 / 2021
25,403
22,632
In 2023 / 2022
23,555
21,546
In 2024 / 2023
21,048
19,991
In 2025 / 2024
17,376
19,991
Later
76,484
68,721
Total
163,866
152,881
Less: Present value discount
(23,948)
(27,011)
Lease liability
139,918
125,870
Lease expenses recognised in consolidated income statement:
2021
2020
Depreciation expense from right of use assets
21,305
18,455
Interest expense and exchange difference on lease liabilities
3,751
4,453
Short-term and low value lease expenses not included in lease liabilities
687
681
Total
25,743
23,589
Total cash outflow for leases
24,728
21,500
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 34
14. Goodwill
2021
2020
At 1 January
612,191
521,046
Arising on acquisition of subsidiaries
50,369
87,733
Purchase price allocation
(1,913)
(6,815)
Exchange rate differences
(16,379)
15,474
Impairment
(115)
(5,247)
At 31. December 2021
644,153
612,191
If the initial accounting for a business combination is incomplete at year end, the Company reports provision al amounts. The
accounting for the acquisitions in the year have been provisionally finalized. The fair value of assets and liabilities provisionally
determined, based on management best estimate, is USD 2.5 million (2020: USD 5.1 million). Fair value changes related to
prior year acquisitions amounted to USD 0.6 million (2020: USD 1.7 million).
During the year, the Company assessed the recoverable amount of goodwill and determined that none of the Company's cash-
generating units have suffered an impairment loss. The Company recognized USD 5.2 million impairment in 2020 related to
divestment of subsidiaries, the impairment is shown as part of other income/(expenses) in the Consolidated Income Statement
2020.
The carrying amount of goodwill was allocated to the following cash-generating units:
WACC %
31.12.2021
31.12.2020
Americas
8.3 / 8.1
421,562
383,011
EMEA
7.8 / 8.1
206,046
211,652
APAC
8.7 / 9.0
16,545
17,528
Total
644,153
612,191
The recoverable amount of the cash-generating units is determined based on a value in use calculation which uses cash flow
projections based on the financial forecast for 2022 approved by management and the Board of Directors. The discount rate of
7.8 - 8.7% (2020: 8.1 - 9.0%) per annum was used.
Cash flow projections in the forecast are based on gradual margin improvements throughout the period. Cash flows beyond
2026 have been extrapolated using a steady 2,5% per annum growth rate for all cash-generating units. This growth rate does
not exceed the long-term average growth rate for the market in each market area. Management believes that any reasonable
change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to exceed its
recoverable amount.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 35
15. Other intangible assets
2021
Cust./distrib.
relationships
Patents
Trademarks
Software and
other
Total
Cost
At 1 January
40,026
18,363
2,576
44,517
105,482
Additions
113
1,251
114
1,139
2,617
Additions - internally generated
0
0
0
7,112
7,112
Acquired on acquisition of subsidiary
281
0
0
16
297
Purchase price allocation
2,076
283
0
6
2,365
Eliminated on disposal
0
(37)
(407)
(2,068)
(2,512)
Fully amortized assets
(2,831)
(58)
(361)
(1,609)
(4,859)
Exchange rate differences
(1,387)
(342)
(59)
(274)
(2,062)
At 31. December 2021
38,278
19,460
1,863
48,839
108,440
Amortization
At 1 January
24,539
4,918
636
15,887
45,980
Charge for the period
4,442
1,155
81
5,989
11,667
Eliminated on disposal
0
(5)
0
(2,054)
(2,059)
Fully amortized assets
(2,831)
(58)
(361)
(1,609)
(4,859)
Exchange rate differences
(831)
(24)
(56)
(214)
(1,125)
At 31. December 2021
25,319
5,986
300
17,999
49,604
At 31. December 2021
12,959
13,474
1,563
30,840
58,836
Amortization and impairment classified by functional category:
2021
2020
Cost of goods sold
118
144
Other Income / (expenses)
0
11,327
Sales and marketing expenses
6,632
6,703
Research and development expenses
1,452
1,473
General and administrative expenses
3,465
3,024
Total
11,667
22,671
In relation to divestment of Gibaud SAS subsidiary in 2020 the Gibaud trademark was impaired. The impairment is shown as
part of other income / (expenses) in the Income Statement 2020.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 36
2020
Cust./distrib
relationships
Patents
Trademarks
Software and
other
Total
Cost
At 1 January
42,983
16,257
13,806
48,073
121,119
Reclassification
699
0
0
(699)
0
Additions
30
517
36
1,876
2,459
Additions - internally generated
0
0
0
7,795
7,795
Acquired on acquisition of subsidiary
0
367
104
2,133
2,604
Purchase price allocation
4,789
1,223
1,028
0
7,040
Eliminated on disposal/divestment
(19)
(227)
(1,181)
(3,414)
(4,841)
Fully amortized assets
(10,568)
(301)
(11,974)
(11,671)
(34,514)
Exchange rate differences
2,112
527
757
424
3,820
At 31. December 2020
40,026
18,363
2,576
44,517
105,482
Amortization
At 1 January
29,057
4,100
395
24,909
58,461
Reclassification
699
0
0
(699)
0
Charge for the period
4,225
1,060
134
5,925
11,344
Impairment
0
0
11,327
0
11,327
Eliminated on disposal/divestment
0
0
0
(3,309)
(3,309)
Fully amortized assets
(10,568)
(301)
(11,974)
(11,671)
(34,514)
Exchange rate differences
1,126
59
754
732
2,671
At 31. December 2020
24,539
4,918
636
15,887
45,980
At 31. December 2020
15,487
13,445
1,940
28,630
59,502
16. Investment in associates
2021
2020
At 1 January
13,352
6,099
Additions
78
6,850
Share in net profit
396
290
Dividend received
(75)
0
Exchange rate differences
(104)
113
At 31 December
13,647
13,352
17. Other financial assets
31.12.2021
31.12.2020
Restricted cash
477
421
Other financial assets
2,447
3,520
2,924
3,941
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 37
18. Inventories
31.12.2021
31.12.2020
Raw material
30,194
24,120
Work in progress
11,443
11,812
Finished goods
62,348
57,299
103,985
93,231
Inventories of USD 8.3 million (2020: USD 13.5 million) are expected to be sold or used in production after more than twelve
months.
In the preparation of the Consolidated Financial Statements, accumulated gains in inventories from intercompany transactions
amounting to USD 24.2 million (2020: USD 24.3 million) were eliminated. This has an effect on the income tax expense of the
consolidated companies, and an adjustment of USD 5.7 million (2020: USD 5.7 million) is made in the Consolidated Financial
Statements to adjust income tax expense.
The cost of inventories recognized as an expense includes USD 2.5 million (2020: USD 2.1 million) in respect of write -downs of
inventory to net realizable value. Reserve for obsolete inventories at year end is USD 4.8 million compared to USD 5.5 million
in 2020.
19. Accounts Receivable
31.12.2021
31.12.2020
Nominal value
108,041
103,019
Allowances for doubtful accounts
(5,273)
(4,666)
102,768
98,353
The avera ge credit period on sales of goods is 44.4
days (2020: 46.9 days). Allowance has been made for doubtful accounts .
This allowance has been determined by management in reference to future expectations. Management considers that the
carrying amount of receivables approximates their fair value.
Movement in the allowance for doubtful accounts
2,021
2,020
At 1 January
(4,666)
(3,793)
Impairment (losses)/gains recognized on receivables
(1,978)
(1,397)
Amounts written off as uncollectable
1,193
561
Exchange rate difference
178
(37)
At 31 December
(5,273)
(4,666)
31.12.2021
Accounts receivable
Gross
carrying
amount at
default
Expected
credit loss
rate
Collective
allowance
(lifetime ECL)
Individual
allowance
Net carrying
amount
Not past due
77,340
0.1%
98
364
76,878
Less than six months past due
24,035
4.3%
1,025
570
22,440
Six to twelve months past due
3,055
35.3%
1,077
110
1,868
More than twelve months past due
3,611
51.2%
1,850
179
1,582
108,041
4,050
1,223
102,768
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 38
31.12.2020
Accounts receivable
Gross
carrying
amount at
default
Expected
credit loss
rate
Collective
allowance
(lifetime ECL)
Individual
allowance
Net carrying
amount
Not past due
80,135
2.3%
1,828
0
78,307
Less than six months past due
18,127
4.0%
154
578
17,395
Six to twelve months past due
1,889
13.7%
234
25
1,630
More than twelve months past due
2,868
64.4%
1,679
168
1,021
103,019
3,895
771
98,353
The expected credit loss (ECL) on accounts receivable is estimated using a provision matrix by reference to past default
experience, general economic conditions and an assessment of both the current as well as expected conditions, including time
value of money where appropriate. Individual allowance and adjustments to the collective bad debt provision are made based
on the individual assessment of customers' situation and probability of incoming payments. Refer to note 36 for further
details.
The Company writes off an accounts receivable when there is information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered
into bankruptcy proceedings.
20. Other assets
31.12.2021
31.12.2020
Prepaid expenses
14,045
12,844
VAT refundable
2,756
2,719
Receivables related to divestment of subsidiaries
1,135
10,924
Other
8,345
6,024
26,281
32,511
21. Bank balances and cash equivalents
Bank balances and cash equivalents include bank balances and minor cash equivalents.
22. Issued capital and share premium
Common stock is as follows in thousands of shares:
Issued shares
Treasury
shares
Total
Balance at 1 January 2020
425,378
(3,360)
422,018
Cancellation of own shares
(2,378)
2,378
0
Sold treasury shares
1,375
1,375
Purchased treasury shares
(1,295)
(1,295)
Balance at 31 December 2020
423,000
(902)
422,098
Sold treasury shares
162
162
Balance at 31 December 2021
423,000
(740)
422,260
Share options contracts were settled with 162 thousands of treasury shares during the year. No share buybacks were made in
2021. Decisions on share buybacks are made in accordance with the Company‘s Capital Structure and Dividend Policy within
the authorizations granted by the Annual General Meeting.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 39
Movement in issued capital is as follows in USD thousands:
Share
Share
capital
premium
Total
Balance at 1 January 2020
4,794
73,019
77,813
Sold treasury shares
11
6,357
6,368
Purchased treasury shares
(10)
(9,299)
(9,309)
Balance at 31 December 2020
4,794
70,077
74,871
Sold treasury shares
1
699
700
Balance at 31 December 2021
4,795
70,776
75,571
23. Share options contracts
The Company has in place a share option plan, approved at the Company's Annual General Meetings, under which managers
may be granted options to purchase ordinary shares at an exercise price, determined by the average closing price on shares
traded on the OMX Copenhagen stock exchange over the 20 trading days prior to the issue date. The employee must remain
continuously employed with the Company until expiring date, either as an employee or in any other way, deemed satisfactory
by the Company.
Each employee share option converts into one ordinary share on exercise. No amounts are paid or payable by the recipient to
the Company on receipt of the option. The options carry neither rights to dividends nor voting rights and are valued using the
Black-Scholes pricing model. The expected volatility assumptions used to value the options range from 30.15% to 30.30% and
the annual discount rate range from -0.6% to -0.5%. The options expire one year after the exercise date. If a share option vests
during a closed period for insider trading the vesting period is automatically extended until the next open window for insider
trading.
The following share option contracts are outstanding at balance sheet date:
Number of
shares
Grant/Issue
year
Exercise
year
Exercise price
(in DKK)
Fair value at
grant date
(in DKK)
Issued to Executive Management:
Jón Sigurðsson President and CEO
1,140,000
2018 - 2021
2021 - 2024
27.7-46.8
28.0-47.7
Members of executive management (6 persons)
586,400
2018
2021
27.7-32.3
27.7-32.2
Members of executive management (4 persons)
366,400
2019
2022
32.3/45.5
33.5/47.9
Members of executive management (4 persons)
550,000
2020
2023
38.5-46.3
38.6-47.5
Members of executive management (7 persons)
870,000
2021
2024
44.6
43.6
3,512,800
Issued to management team:
Six managers
243,600
2018
2021
27.5-32.3
27.7-32.2
Nine managers
265,200
2019
2022
32.3-49.8
33.5-52.3
Twenty-one managers
613,600
2020
2023
38.5-46.3
38.6-47.5
Thirty-eight managers
1,273,200
2021
2024
44.5-44.6
43.2-43.8
2,395,600
Total outstanding at 31 December
5,908,400
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 40
Movements in share options during the period:
2021
2020
Number of
shares
Weighted
average
contract rate
(in DKK)
Number of
shares
Weighted
average
contract rate
(in DKK)
Outstanding at 1 January
4,463,000
36.3
3,971,000
29.6
Granted during period
2,386,800
44.7
1,867,000
42.9
Forfeited during period
(166,400)
46.1
0
0.0
Exercised during period
(775,000)
28.2
(1,375,000)
25.9
Total outstanding at 31 December
5,908,400
40.5
4,463,000
36.3
Estimated remaining cost due to the share option contracts is USD 3.7 million. An expense of USD 2.3 million (2020: USD 1.3
million) is recognized in the Consolidated Income Statement for the period. Exercise period of the share options contracts is
2022-2025.
24. Borrowings
31.12.2021
31.12.2020
Current
Non-current
Current
Non-current
Loans in USD
0
99,051
0
99,016
Loans in EUR
46,043
99,196
17,545
125,066
Revolver in USD
0
13,000
0
30,000
Revolver in EUR
0
50,943
0
85,896
46,043
262,190
17,545
339,978
The maturity of the revolving credit facility is Q1 2023. The Company has classified the revolving credit facility as non-current
liability as the intention is to use it to finance further growth of the Company.
Aggregated maturities of borrowings are as follows:
31.12.2021
31.12.2020
In 2022 / 2021
46,043
17,545
In 2023 / 2022
129,891
14,371
In 2024 / 2023
248
186,912
In 2025 / 2024
232
1,171
Later
131,819
137,524
308,233
357,523
Össur has a multicurrency term and revolving credit facility with Nordea and Danske Bank for a total amount of USD 174.2
million (USD 117.2 million outstanding and USD 57.0 million undrawn). In addition, the Company has an overdraft facility with
Danske Bank for a total amount of USD 84.9 million (USD 33.1 million outstanding and USD 51.8 million undrawn). Össur has
two loans with the Nordic Investment Bank for a total amount of USD 81.8 million and one loan with the European Investment
Bank for a total amount of USD 75 million. All loans contain covenants that place various financial and operational restrictions
on the Company and are in line with market standards for investment grade rated companies. At year end 2021, the Company
was in compliance with all loan covenants. Current weighted average interest terms on floating rate loans are <100 bps
+LIBOR/EURIBOR, changing in line with financial leverage.
The table below shows how cash and non-cash changes affect borrowings within the Company.
Non-cash changes
31.12.2020
Cash flows
Acquisition
related
Exchange rate
Transaction
costs
31.12.2021
Borrowings
357,523
(29,697)
(4,819)
(15,286)
512
308,233
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 41
25. Deferred tax assets / (liabilities)
2021
2020
At beginning of period
1,459
(2,589)
Income tax payable for the period
19,487
9,002
Calculated tax for the period
(20,984)
(4,799)
Arising on acquisition of a subsidiary
(256)
(1,556)
Recognized directly through equity
(1,718)
1,559
Exchange rate differences
29
(158)
At 31 December
(1,983)
1,459
Deferred tax in the Balance Sheet:
Deferred tax asset
27,044
27,512
Deferred tax liabilities
(29,027)
(26,053)
(1,983)
1,459
The following are the major deferred tax liabilities and assets recognized:
31.12.2021
Assets
Liabilities
Net
Goodwill
5,747
(17,043)
(11,296)
Intangible assets
2,539
(10,082)
(7,543)
Property, plant and equipment
850
(2,727)
(1,877)
Tax loss carry forward
2,066
0
2,066
Inventories
4,944
(595)
4,349
Provisions
2,444
439
2,883
Current liabilities
5,706
(567)
5,139
Receivables
1,227
(469)
758
Other
4,290
(752)
3,538
Total tax assets / (liabilities)
29,813
(31,796)
(1,983)
Tax asset and liabilities offsetting
(2,769)
2,769
0
27,044
(29,027)
(1,983)
31.12.2020
Assets
Liabilities
Net
Goodwill
5,747
(15,869)
(10,122)
Intangible assets
2,281
(10,191)
(7,910)
Property, plant and equipment
453
(2,432)
(1,979)
Tax loss carry forward
3,032
(135)
2,897
Inventories
4,873
(536)
4,337
Provisions
2,151
0
2,151
Current liabilities
5,087
(273)
4,814
Receivables
1,993
0
1,993
Other
5,318
(40)
5,278
Total tax assets / (liabilities)
30,935
(29,476)
1,459
Tax asset and liabilities offsetting
(3,423)
3,423
0
27,512
(26,053)
1,459
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 42
26. Provisions
Warranty
Other
2021
provisions
provisions
Total
At 1 January
6,472
12,852
19,324
Additional provision recognized
6,365
4,317
10,682
Utilization of provision
(5,345)
(4,835)
(10,180)
Exchange rate differences
(106)
(258)
(364)
At 31. December 2021
7,386
12,076
19,462
Non-current
3,703
5,085
8,788
Current
3,683
6,991
10,674
At 31. December 2021
7,386
12,076
19,462
Warranty
Other
2020
provisions
provisions
Total
At 1 January
5,522
10,451
15,973
Additional provision recognized
5,120
7,751
12,871
Utilization of provision
(4,186)
(5,573)
(9,759)
Exchange rate differences
16
223
239
At 31. December 2020
6,472
12,852
19,324
Non-current
3,116
4,840
7,955
Current
3,357
8,013
11,369
At 31. December 2020
6,472
12,852
19,324
The warranty provision represents management's best estimate of the Company's liability under 2-5 years warranties granted
on prosthetic products, based on past experience.
Other provisions include earn outs related to acquisitions and divestments of companies and restructuring provisions.
27. Deferred income
2021
2020
At 1 January
9,834
8,917
Deferred income
3,578
3,789
Released from deferred income
(3,273)
(3,331)
Exchange rate differences
(518)
459
At 31 December
9,621
9,834
Non-current
6,250
6,739
Current
3,371
3,095
At 31 December
9,621
9,834
Deferred income relates to sale of additional warranty for prosthetic products and service checks included in standard
warranty. Income from additional warranty is deferred when sold and released on a straight line basis within the warranty
period. Income from service checks is deferred when sold and released when the service has been rendered. Additional
warranties range from 2-6 years.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 43
28. Other financial liabilities
Other financial liabilities consist of deferred payments relating to acquisitions amounting to USD 7.7 million, fair value of
hedge contracts and fair value of a purchase option of minority shares in subsidiary amounting to USD 1.2 million (2020: USD
1.1 million).
29. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated in consolidation and are not disclosed in this note.
The Company engages in transactions with some of its associated companies and other related parties. The transactions
consist of, among others, sale of Össur products where commercial terms and market prices apply.
Transactions and balances with related parties:
2021
2020
Sales of products
3,318
867
Purchases
2,258
2,188
Receivables at 31 December
786
848
For disclosures relating to key management positions, refer to note 7.
30. Other liabilities
31.12.2021
31.12.2020
Accrued expenses
15,091
17,771
Sales tax and VAT
4,025
4,686
Deferred income
3,371
3,095
Sales return accrual
1,904
1,943
Other
7,693
10,629
32,084
38,124
31. Business combinations
Acquisition of subsidiaries
Össur made acquisitions during 2021 to strengthen the Company's sales channels . In the Consolidated Income Statement of
the year 2021, sales amounting to USD 15.4 million (2020: USD 11.9 million) and net profit of USD 2.5 million (2020: USD 0.9
million) were related to acquisitions.
The purchase price allocation (PPA) for assets and liabilities acquired in 2020 was finalized during 2021, resulting in fair value
changes of USD 0.6 million (2020: USD 1.7 million), mainly relating to fair value recognition of other intangible assets. The
initial accounting for the acquisitions in 2021 has been provisionally determined at balance sheet date. The PPA will be
finalized within 12 months from the acquisition date.
The total PPA amounted to USD 1.9 million (2020: USD 6.8 million), mainly related to intangible assets. Amortization of
intangibles relating to the PPA was recognized in the Consolidated Income Statement for USD 0.4 million (2020: USD 0.2
million) during 2021.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 44
2021
Assets acquired and liabilities
recognized at the date of acquisition:
Book value at
Fair value
changes
Total
fair value
Americas
EMEA
Total
Current assets
2,872
2,094
4,966
(414)
4,552
Non-current assets
384
1,000
1,384
2,365
3,749
Non-current liability
0
(414)
(414)
(38)
(452)
Current liabilities
(3,053)
(1,061)
(4,114)
0
(4,114)
Non controlling interest
0
(42)
(42)
0
(42)
203
1,577
1,780
1,913
3,693
Consideration
52,149
Book value of identifiable net assets acquired
(1,780)
Fair value of identifiable net assets acquired
(1,913)
Goodwill arising on acquisition
48,456
Consideration
52,149
Deferred payments on current year´s acquisitions
(10,016)
Deferred payments on prior year´s acquisitions / divestments
(6,806)
Cash from acquired companies
(1,387)
Consideration shown in Cash flow
33,940
2020
Assets acquired and liabilities
recognized at the date of acquisition:
Book value at
Fair value
changes
Total
fair value
Americas
EMEA
Total
Current assets
12,010
18,872
30,882
561
31,443
Non-current assets
3,523
5,215
8,738
7,040
15,778
Non-current liability
0
(15,648)
(15,648)
(786)
(16,434)
Current liabilities
(5,339)
(9,820)
(15,159)
0
(15,159)
Non controlling interest
0
391
391
0
391
10,194
(990)
9,204
6,815
16,019
Consideration
96,937
Book value of identifiable net assets acquired
(9,204)
Fair value of identifiable net assets acquired
(6,815)
Goodwill arising on acquisition
80,918
Consideration
96,937
Deferred payments
(2,394)
Cash from acquired companies
(11,943)
Consideration shown in Cash flow
82,600
Divestment of subsidiaries
There were no divestment of subsidiaries made in 2021.
Össur divested subsidiaries during 2020 to sharpen the focus and align with Bracing and Support go-to market strategy.
In the Consolidated Income Statement of the year 2020, sales amounting to USD 51.5 million were related to these
divestments. Contribution to net profit from the divested subsidiaries was negative during the year.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 45
2020
Assets and liabilities derecognized at the date of divestment:
Book value at
Current assets
44,458
Non-current assets
11,206
Non-current liability
(1,741)
Current liabilities
(22,735)
31,188
Loss on divestment
(5,369)
Total consideration
25,820
Cash and cash equivalents
11,980
Deferred payment
13,840
Total consideration
25,820
Consideration received in cash and cash equivalents
11,980
Less cash and cash equivalents disposed
(5,667)
Consideration shown in cashflow
6,314
Assets eliminated and impairment related to 2020 divestments amounted to USD 17.8 million and cost related to divestment
amounted to USD 5.1 million are shown as part of other income / (expenses) in the Income Statement 2020.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 46
32. Financial instruments
Capital risk management
The Company manages capital to ensure that affiliates within the consolidation will be able to continue as a going concern
while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company's overall
strategy remains unchanged from 2020.
The capital structure of the Company consists of debt, which includes the borrowings disclosed in note 24, cash and cash
equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings
as disclosed in the equity overview.
Net debt to EBITDA
Company's management continuously reviews the capital structure. As a part of this review, the management considers,
amongst other, the cost of capital and net debt to EBITDA.
The net debt to EBITDA at period end was as follows:
31.12.2021
31.12.2020
Net debt
362,954
381,030
EBITDA
148,954
92,987
Net debt/EBITDA
2.4
4.1
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 36 to the Consolidated Financial Statements.
Financial risk management objectives
The Company's Corporate Finance function provides services to the business, co-ordinates access to domestic and
international financial markets, monitors and manages the financial risks relating to the operations of the Company through
internal risk reports which analyze exposures by degree and magnitude of risks. These risks include liquidity risk, interest rate
risk, foreign exchange risk and counterparty credit risk.
The general policy is to apply natural hedging to the extent possible but Össur has decided to amend its hedging policy and
allow for active hedging of currency exposure that is not covered by the natural hedge in sales and costs by currency. The use
of financial derivatives is governed by the Company's policies approved by the Board of Directors, which provide written
principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial
instruments and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including
derivative financial instruments, for speculative purposes.
The Company is exposed to normal business risk in collecting accounts receivable. Adequate allowance is made for bad debt
expenses.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 47
Foreign currency risk management
The Company operates on a global market, hence exposure to exchange rate fluctuations arises. Exchange rate exposures are
managed within approved policy parameters. The general policy is to apply natural exchange rate hedging to the extent
possible.
Össur currently hedges its ISK and EUR exposure, using a twelve month, quarterly layered hedging strategy. This is done with
forward currency contracts where Össur sells EUR for ISK. At each balance sheet date Össur has outstanding contracts covering
appr. 50% of yearly ISK costs. Due to the layered approach, hedge ratio of closed contracts is approximately 80% of ISK costs.
At balance sheet date eleven forward contracts are open. The fair value of the contracts is positive of USD 0.1 million at year
end 2021 (2020: USD 0.1 million). Össur applies hedge accounting (IFRS 9) to the extent possible.
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:
Liabilities
Assets
31.12.2021
31.12.2020
31.12.2021
31.12.2020
EUR
220,727
266,675
49,389
64,731
USD
235,941
222,452
86,721
100,274
ISK
37,064
30,292
8,409
12,699
SEK
23,678
26,634
13,539
13,075
GBP
6,721
5,565
8,366
8,772
Other
32,515
32,310
50,746
37,616
556,646
583,928
217,170
237,168
Foreign currency sensitivity analysis
The Company is mainly exposed to the fluctuation of the Iceland (ISK) and the Eurozone (EUR) currency.
The following table details the Company's sensitivity to a 10% decrease in USD against the relevant foreign currencies with all
other variables fixed. The sensitivity analysis includes all foreign currency denominated items and adjusts their translation at
the period end for a 10% change in foreign currency rates. The table below indicates the effect on profit or loss and other
equity where USD weakens 10% against the relevant currency. For a 10% strengthening of USD against the relevant currency,
there would be an equal and opposite impact on the profit or loss and other equity.
EUR
(i)
ISK
(ii)
2021
2020
2021
2020
Net profit
4,091
1,236
(4,203)
(3,628)
Equity
1,518
(1,248)
(3,017)
(2,136)
(i) 18% (2020: 19%) of the Company's COGS and OPEX is in EUR against 23% (2020: 22%) of its sales causing an increase in profit if the USD
decreases against the EUR.
(ii) 10% (2020: 10%) of the Company's COGS and OPEX is in ISK against 0.4% (2020: 0.3%) of its sales causing a decrease in profits if the USD
decreases against the ISK.
Össur currently hedges its ISK and EUR exposure, using a twelve month, quarterly layered hedging strategy. This is done with forward
currency contracts where Össur sells EUR for ISK. At each balance sheet date Össur has outstanding contracts covering appr. 50% of yearly
ISK costs. Due to the layered approach, hedge ratio of closed contracts is approximately 80% of ISK costs. This is not considered in the above
calculations.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 48
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 49
Interest rate risk management
The Company is exposed to interest rate risks as funds are borrowed at floating interest rates. Interest rate risk is managed by
the Company´s Treasury function and fixed rate loans or interest rate swap contracts may be used to maintain an appropriate
mix between fixed and floating rate borrowings. Hedging activities are evaluated regularly to align with interest rate views and
defined risk appetite, ensuring optimal hedging strategies are applied. The Company did not have interest rate swap
agreements outstanding during the ye ar.
The Company's exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note.
Management believes that realistic changes in floating interest rates will not materially affect the Consolidated Income
Statement or the Company´s equity.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. At period end
the Company had a total liquidity of USD 194.0 million, consisting of undrawn revolving credit facilities of USD 108.8 million
(2020: USD 173.2 million) and cash and cash equivalents of USD 85.2 million (2020: USD 102.4 million).
The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Company can be required to pay. The table includes both interest and principal cash flows.
Weighted
average
effective
interest
Less than 1
year
1-5 years
5+ years
Total
31.12.2021
Borrowings
1.6%
51,425
274,930
26
326,381
Lease liabilities
4.3%
25,501
84,538
53,828
163,866
Non-interest bearing liabilities
-
97,774
7,753
0
105,527
174,700
367,221
53,854
595,774
31.12.2020
Borrowings
1.6%
23,687
353,105
72
376,864
Lease liabilities
4.0%
22,874
77,950
45,978
146,802
Non-interest bearing liabilities
-
96,373
11,410
0
107,784
142,934
442,465
46,050
631,449
Credit risk management
The Company does not undertake trading activity in financial instruments.
Accounts receivable consist of a large number of customers spread across geographical areas. Ongoing credit evaluation is
performed on the financial condition of accounts receivable. Refer to note 19 for assessment of expected credit loss (ECL) and
accounting policy on impairment on financial assets.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 50
Book value of financial assets measured at amortized cost represents the maximum exposure to credit risk.
Fair value of financial instruments
Except as detailed in the following table, management considers that the carrying amounts of financial assets and financial
liabilities recognized in the Consolidated Financial Statements approximate their fair values.
31.12.2021
31.12.2020
Carrying
amount
Fair value
Carrying
amount
Fair value
Financial liabilities:
Borrowings
308,233
308,678
357,523
359,041
33. Other information
From 2021, the Company is required to file the primary statements of the Consolidation Financial Statements in the new
European Single Electronic Format (ESEF) and therefore those statements are prepared in the XHTML format that can be
displayed in a standard browser. The primary statements in the Consolidated Financial Statements are tagged using inline
eXtensible Business Reporting Language (iXBRL). The iXBRL tags comply with the ESEF taxonomy, which is included in the ESEF
Regulation and developed based on the IFRS taxonomy published by the IFRS Foundation. Where a primary statements line
item is not defined in the ESEF taxonomy, an extension to the taxonomy has been created. Extensions are anchored to
elements in the ESEF taxonomy, except for extensions which are subtotals. The Consolidated financial statements submitted to
the Icelandic Financial Supervisory Authority consists of the XHTML document together with certain technical files, all included
in a file named “ossur-2021-12-31.zip”.
Össur UK Holding ltd. are claiming exemption from preparing individual audited accounts based on section 479A of the UK
Companies Act 2006.
In 2021, the Company made a conversion of a non-current revolving credit facility to an overdraft facility. This increases short
term borrowings.
34. Insurance
31.12.2021
31.12.2020
Insurance
Book
Insurance
Book
value
value
value
value
Fixed assets and inventories
187,503
164,105
244,239
157,196
The Company has purchased a Property Damage & Business Interruption insurance intended to compensate for damages on
owned property and temporary loss of income due to such loss. Additionally Össur has numerous insurances in place that are
necessary to insure against the risks to its operations, including but not limited to product and professional liability insurance,
product recall insurance, directors and officers liability and certain types of frauds towards the company.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 51
35. Adoption of new and revised standards
New and amended IFRS standards that are effective for the current year
The following amendments to IFRS standards became mandatorily effective in the current year. The application of the below
amendments has minor effects on the Consolidated Financial Statements:
•
Amendments to IFRS 9 – Financial Instruments, IAS 39 – Financial Instruments: Recognition and Measurement, IFRS 7 –
Financial Instruments: Disclosures and IFRS 16 – Leases, Interest Rate Benchmark Phase 2.
New and revised IFRS standards in issue but not yet effective
At the date of authorization of these Consolidated Financial Statements, the Company has not applied new and revised IFRS
standards that have been issued but are not yet effective.
Management of the Company does not expect that the adoption of the standards will have a material impact on the Financial
Statements of the Company in future periods.
36. Summary of Significant Accounting Policies
Statement of compliance
The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards as
adopted by the European Union, additional Danish disclosure requirements for listed companies and additional requirements
in the Icelandic Financial Statement Act no. 3/2006.
Basis of preparation
The Consolidated Financial Statements have been prepared under the historical cost basis except for certain financial
instruments that are measured at fair values. Historical cost is generally based on the fair value of the consideration given in
exchange for assets. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company considers the
characteristics of the asset or liability as market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these Consolidated
Financial Statements is determined on such a basis, except for share-based payment transactions that are within the scope of
IFRS 2 and measurements that have some similarities to fair value but are not fair value, such as net realizable value of
inventories in IAS 2 or value of assets in use in IAS 36.
Basis of consolidation
The Consolidated Financial Statements incorporate the financial statements of the Company and entities controlled by the
Company and its subsidiaries. Control is achieved when the Company:
•
has power over the investee ;
•
is exposed, or has rights, to variable returns from its involvement with the investee ; and
•
can use its power to affect its returns.
The Company reassesses whether it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 52
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting
rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company
considers all relevant facts and circumstances in assessing whether the Company's voting rights in an investee are sufficient to
give it power, including:
•
the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
•
potential voting rights held by the Company, other vote holders or other parties;
•
rights arising from other contractual arrangements; and
•
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct
the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders'
meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains
control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests. When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies in line with the Company's accounting policies. All intercompany assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Company are eliminated in full on consolidation.
Changes in the Company's ownership interests in subsidiaries that do not result in the Company losing control over the
subsidiaries are accounted for as equity transactions. The carrying amounts of the Company's interests and the non-controlling
interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount
by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized
directly in equity and attributed to owners of the Company.
Business combination
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets
transferred by the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity interests
issued by the Company in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as
incurred.
The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are
recognized at their fair value at the acquisition date, except that:
•
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and
measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
•
liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment
arrangements of the Company entered into to replace share-based payment arrangements of the acquiree are measured
in accordance with IFRS 2 Share-based Payment at the acquisition date; and
•
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale
and Discontinued Operations are measured in accordance with that standard.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 53
Goodwill arising on acquisition is recognized as an asset and initially measured at cost, being the excess of the purchase price
of the business combination over the Company's interest in the net fair value of the identifiable assets, liabilities, contingent
liabilities, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held
equity interest in the acquiree. If, after reassessment, the Company's interest in the net fair value of the acquiree's identifiable
assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognized immediately
in profit or loss. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate
share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-
controlling interests' proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of
measurement basis is made on a transaction -by-transaction basis. Other types of non-controlling interests are measured at fair
value or, when applicable, on the basis specified in another IFRS.
When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a
contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included
as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against
goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the
‘measurement period’ about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as
equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity.
Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance
with IFRS 9, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or
loss being recognized in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognized, to reflect
new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have
affected the amounts recognized at that date.
When a business combination is achieved in stages, the Company's previously held equity interest in the acquire is remeasured
to fair value at the acquisition date (i.e., the date when the Company obtains control) and the resulting gain or loss, if any, is
recognized in profit or loss. Amounts arising from interests in the acquire prior to the acquisition date that have previously
been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate
if that interest were disposed of.
The measurement period is the period from the date of acquisition to the date the Company obtains complete information
about facts and circumstances that existed as of the acquisition date and is subject to a maximum of one year.
Investments in associates
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The profit and losses, assets and liabilities of associates are incorporated in the Consolidated Financial Statements using the
equity method of accounting. Under the equity method, investments in associates are initially recognized in the balance sheet
and adjusted for post-acquisition changes in the Company's share of the net assets of the associate, less any impairment in the
value of individual investments. Losses of an associate more than the Company's interest in that associate are recognized only
to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 54
Any excess of the cost of acquisition over the Company's share of the net fair value of the identifiable assets, liabilities and
contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included
within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the
Company's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition,
after reassessment, is recognized immediately in profit or loss.
The requirements of IAS 36 are applied to determine whether it is necessary to recognize any impairment loss with respect to
the Company's investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill)
is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount
(higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognized forms
part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with IAS 36 to
the extent that the recoverable amount of the investment subsequently increases.
Upon loss of significant influence over the associate, the Company measures and recognizes any retained investment at its fair
value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the
retained investment and proceeds from disposal is recognized in profit or loss.
Goodwill
Goodwill is initially recognized as an asseet at the excess of the purchase price of the business combination over the
Company's interest in the net fair value of the identifiable assets, liabilities, contingent liabilities, the amount of any non-
controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree.
Goodwill is not amortized but is reviewed for impairment at least annually. For impairment testing, goodwill is allocated to
each of the Company's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units
to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that
the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro -rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is
recognized directly in profit or loss in the Consolidated Income Statement. An impairment loss recognized for goodwill is not
reversed in a subsequent period.
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which
goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise
from the cash-generating unit and a suitable discount rate in order to calculate present value.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
The Company's policy for goodwill arising on the acquisition of an associate is described in the accounting policy for
Investments in associates above.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances.
Sale of goods and services
The Company sells Bracing and Support products and Prosthetics products and related services both as wholesaler and directly
to customers through its own distribution channels.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 55
Revenue is recognized for the sale of products including standard warranty when control of the goods has transferred. Control
is considered transferred when the goods have been shipped or directly delivered to retail customer. Following shipment, it is
considered that our customers have full discretion over the manner of distribution and price to sell the goods, have the
primary responsibility when selling the goods, and bear the risks of obsolescence and loss in relation to the goods. A receivable
is recognized by the Company when the goods are shipped to the customer as this represents the point in time at which the
right to consideration becomes unconditional, as only the passage of time is required before payment is due. Sales related
standard warranties serve as an assurance that the products sold comply with agreed-upon specifications, those warranties
are accounted for in accordance with IAS 37 Provisions.
For some Prosthetics products, a service check is included in the standard warranty and is treated as a distinct service and is
accounted for as a separate performance obligation. The customer has an option to purchase an additional warranty which is
treated as a distinct service because the Company promises to provide the service to the customer in addition to the
product and the standard warranty. That warranty is accounted for as a separate performance obligation.
Revenues from the sale of additional warranties are deferred when sold and released on a straight-line basis within the
warranty period. Revenues from service checks included in the standard warranty are deferred when sold and released when
the service has been rendered or the service obligation has ended. Deferred revenues are shown separately within liabilities in
the Balance sheet
Under the Company’s standard contract terms, customers have a right of return within 30-90 days. At the point of sale, a
refund liability and a corresponding adjustment to revenue is recognized for those products expected to be returned.
The Company uses its accumulated historical experience to estimate the number of returns on a portfolio level using the
expected value method. It is considered highly unlikely that a significant reversal in the cumulative revenue recognized will
occur given the consistent level of returns over previous years.
Royalties
Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreement. Royalties
determined on a time basis are recognized on a straight-line basis over the period of the agreement. Royalty arrangements
that are based on production, sales, and other measures are recognized by reference to the underlying arrangement (provided
that it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably).
Interest revenue and dividend
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset's net carrying amount on initial recognition. Dividend income from
investments is recognized when the shareholder's right to receive payment has been established.
Leases
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognizes a right
of use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-
term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the
Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless
another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are
consumed.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 56
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its
incremental borrowing rate. The lease payments included in the measurement of the lease liability comprise fixed payments
less any incentives, variable lease payments that depend on an index or rate, expected residual guarantees and the exercise
price of purchase options if the Company expects to exercise the option.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Company
remeasures the lease liability if the lease term has changed, when lease payments changes in an index or rate or when a lease
contract is modified, and the modification is not accounted for as a separate lease.
Right of use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise
a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
Variable rents that depend on usage are not included in the measurement of the lease liability and the right of use asset. The
related payments are recognized as an expense in the period in which the event or condition that triggers those payments
occurs.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease
and associated non-lease components as a single arrangement. The Company has used this practical expedient.
Foreign currencies
For consolidation purposes, the assets and liabilities of the Company's foreign operations are expressed in USD, which is also
the Company´s functional currency, using exchange rates prevailing at the balance sheet date.
Income and expense items are translated at the average exchange rates for each month.
Exchange differences arising, if any,
are classified as equity and transferred to the Company's translation reserve (attributed to non-controlling interests as
appropriate).
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate. Exchange differences arising, if any, are recognized in equity.
Exchange differences are recognized in the Consolidated Income Statement in the period they occur, except for exchange
differences on monetary items receivable from or payable to a foreign operation, which are recognized initially in other
comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
Transactions in currencies other than local currency are initially recorded at the rates of exchange prevailing on the dates of
the transactions. Other assets, such as inventories and operating fixed assets, purchased in foreign currencies are to be valued
at cost at the exchange rate prevailing on the date of the transaction.
Share-based payments
Equity-settled share -based payments to employees and others providing similar services are measured at the fair value of the
equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based
transactions are set out in note 23.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 57
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight -line basis
over the vesting period, based on the Company's estimate of equity instruments that will eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits
reserve.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the
Consolidated Income Statement because it excludes items of income or expense that are taxable or deductible in other
periods and it further excludes items that are never taxable or deductible. The Company's current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Consolidated
Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are
generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible
temporary differences to the extent that it is probable that taxable profits will be available against which those deductible
temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference
arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except
where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with
such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits
against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance
sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to
settle its current tax assets and liabilities on a net basis.
In the preparation of the Consolidated Financial Statements, accumulated gains in inventories from intercompany transactions
are eliminated. This influences the income tax expenses of the consolidated companies, and an adjustment is included in the
deferred tax asset. Income tax expense is calculated in accordance with tax rates in the countries where the inventories are
purchased.
Current and deferred tax for the year
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 58
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in Other
Comprehensive Income or directly in equity, in which case, the current and deferred tax are also recognized in Other
Comprehensive Income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting
for a business combination, the tax effect is included in the accounting for the business combination.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 59
Property, plant and equipment
Property, plant and equipment are recognized as an asset when it is probable that future economic benefits associated with
the asset will flow to the Company and the cost of the asset can be measured in a reliable manner.
Property, plant and equipment which qualify for recognition as an asset are initially measured at cost. The cost of a property,
plant and equipment comprises its purchase price and any directly attributable cost of bringing the asset to working condition
for its intended use.
The depreciable amount of the asset is allocated on a straight-line basis over its useful life. The depreciation charge for each
period is recognized as an expense. The estimated useful lives, residual values and depreciation method are reviewed at each
balance sheet date, with the effect of any changes in estimate accounted for on a prospective basis.
The following useful lives are used in the calculation of depreciation:
Customer and distribution relationships
4-10 years
Patents
5-50 years
Trademarks
3-infinitive
Software & other
2-10 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds
and the carrying amount of the asset at the date of the sale transaction and is recognized in the Consolidated Income
Statement.
Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful life are reported at cost less accumulated amortization and accumulated impairment losses.
Amortization is allocated on a straight-line basis over their estimated useful lives. The estimated useful life and amortization
method are reviewed at the end of each balance sheet date, with the effect of any changes in estimate being accounted for on
a prospective basis. Intangible assets with indefinite useful lives are carried at cost less accumulated impairment losses.
Intangible assets with finite useful lives are amortized on a straight - line basis over their useful lives.
The following useful lives are used in the calculation of amortization:
Buildings & sites
25-50 years
Machinery and equipment
5-10 years
Fixtures and office equipment
3-10 years
Computer equipment
2-5 years
Internally generated intangible assets
Expenditure on research activities is recognized as an expense in the period in which it is incurred.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 60
An internally-generated intangible asset arising from the Company's development is recognized only if all of the following
conditions are met: the technical feasibility of completing the intangible asset so that it will be available for use or sale; the
intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; the intangible asset
will generate probable future economic benefits; the availability of adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset and the ability to measure reliably the expenditure
attributable to the intangible asset during its development.
The amount initially recognized for internally generated intangible assets is the sum of the expenditure incurred from the date
when the intangible asset first meets the recognition criteria listed above. Where internally generated intangible asset cannot
be recognized, development expenditure is charged to profit or loss in the period in which it is incurred.
After initial recognition, internally generated intangible assets are reported at cost less accumulated amortization and
accumulated impairment losses, on the same basis as intangible assets acquired separately.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are identified and recognized separately from goodwill where they satisfy
the definition of an intangible asset and their fair values can be measured reliably. The cost of such intangible assets is their
fair value at the acquisition date.
After initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated
amortization and accumulated impairment losses, on the same basis as intangible assets acquired separately.
Derecognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains
or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and
the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated to determine the extent of the impairment loss. Where it is not possible to
estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-
generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, assets are
also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually,
and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized
immediately in profit or loss.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 61
Inventories
Inventories are stated at the lower of cost and net realizable value. Costs, including an appropriate portion of fixed and
variable overhead expenses, are assigned to inventories held by the method most appropriate to the class of inventory, with
the majority being valued on a standard cost basis. Net realizable value represents the estimated selling price for inventories
less all estimated costs of completion and costs necessary to make the sale.
Provisions
Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable that the
Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the
balance sheet date, considering the risks and uncertainties surrounding the obligation. Where a provision is measured using
the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the
receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
Warranties
Warranty provision includes expected warranty costs for products sold with standard warranty and are recognized at the date
of sale of the relevant products, at management´s best estimate of the expenditure required to settle the Company's
obligation.
Other
Other provisions are mainly related to restructuring and earnouts related to acquisitions of companies. Restructuring provision
is recognized when the Company has developed a detailed formal plan for the restructuring and has started to implement it or
announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct
expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring
and not associated with the ongoing activities of the entity.
Financial instruments
Financial assets and financial liabilities are recognized in the Company’s Balance Sheet when the Company becomes a party to
the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit
or loss.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest
income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts
(including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the debt instrument or, where appropriate, a shorter period to the
net carrying amount on initial recognition.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 62
Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as at fair
value through profit or loss (FVTPL).
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by
regulation or convention in the marketplace. All recognized financial assets are measured subsequently in their entirety at
either amortized cost or fair value, depending on the of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortized cost:
•
the financial asset is held within a business model whose objective is to hold financial assets to collect contractual
cash flows; and
•
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets that do not meet the criteria for being measured at amortized cost are measured at FVTPL. Financial assets at
FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or
loss to the extent they are not part of a designated hedging relationship. The net gain or loss recognized in profit or loss
includes any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Basis of
preparation above.
Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at
amortized cost and account receivables. The amount of expected credit loss is updated at each reporting date to reflect
changes in credit risk from initial recognition of the respective financial instrument. The Company measures the collective
allowance for trade receivables at an amount equal to lifetime expected credit loss (ECL). The expected credit loss on accounts
receivable is estimated using a provision matrix by reference to past default experience, general economic conditions and an
assessment of both the current as well as expected conditions, including time value of money where appropriate. Individual
allowance and adjustments to the collective bad debt provision are made based on the individual assessment of customers'
situation and probability of incoming payments. As the Company´s historical credit loss experience does not show significantly
different loss patterns for different customer segments, the provision for loss allowance based on past due status is not
further distinguished between the Company´s different geographical segments.
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
flows of that financial asset have occurred. Evidence that a financial asset is credit -impaired includes observable data about
significant financial difficulty of the borrower. An allowance for credit-impaired financial assets is measured on an individual
basis.
The Company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty
and there is no realistic prospect of recovery, e.g., when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Company’s
recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss.
Derecognition of financial assets
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 63
On derecognition of a financial asset, the difference between the asset's carrying amount and the sum of the consideration
received and receivable is recognized in profit or loss.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 64
Financial liabilities
All financial liabilities are measured subsequently at amortized cost using the effective interest method or at FVTPL.
Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an acquirer in
a business combination, (ii) held for trading or (iii) it is designated as at FVTPL.
A financial liability is classified as held for trading if:
•
it has been acquired principally for the purpose of repurchasing it in the near term; or
•
on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together
and has a recent actual pattern of short -term profit-taking; or
•
it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging
instrument.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or
have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid
and payable is recognized in profit or loss. When the Company exchanges with the existing lender one debt instrument into
another one with the substantially different terms, such exchange is accounted for as an extinguishment of the original
financial liability and the recognition of a new financial liability. Similarly, the Company accounts for substantial modification of
terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new
liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new
terms, including any fees paid net of any fees rec eived and discounted using the original effective rate is at least 10 per cent
different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is
not substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present
value of the cash flows after modification should be recognized in profit or loss as the modification gain or loss within other
gains and losses.
Employee benefits
Retirement benefit costs
Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered
service entitling them to the contributions.
A liability is recognized in respect of wages and salaries, annual leave and sick leave in the period the related service is
rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Derivative financial instruments
The Company enters into derivative financial instruments to manage its exposure to currency risk. Further details of derivative
financial instruments are disclosed in note 32.
Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each balance sheet date. The resulting gain or loss is recognized in profit or loss immediately
unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit
or loss depends on the nature of the hedge relationship. The Company designates certain derivatives as either hedges of cash
flow of recognized liabilities or hedges of net investments in foreign operations.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 65
A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more
than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current
assets or current liabilities.
Hedge accounting
The Company designates certain hedging instruments, which include derivatives and non-derivatives in respect of foreign
currency risk, as either cash flow hedges or hedges of net investment in foreign operations.
At the inception of the hedge relationship the entity documents the relationship between the hedging instrument and hedged
item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at
the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument that is used in a
hedging relationship is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedge
risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements:
•
there is an economic relationship between the hedged item and the hedging instrument;
•
the effect of credit risk does not dominate the value changes that result from that economic relationship; and
•
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the
Company actually hedges and the quantity of the hedging instrument that the Company actually uses to hedge that
quantity of hedged item.
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk
management objective for that designated hedging relationship remains the same, the Company adjusts the hedge ratio of the
hedging relationship (i.e., rebalances the hedge) so that it meets the qualifying criteria again.
The hedging reserve within equity represents the cumulative portion of gains and losses on hedging instruments deemed
effective in cash flow hedges. The cumulative deferred gain or loss on the hedging instrument is reclassified to profit or loss
only when the hedged transaction affects the profit or loss, or is included as a basis adjustment to the non-financial hedged
item, consistent with the relevant accounting policy.
Hedges of net investments in foreign operations
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in equity in the foreign
currency translation reserve.
Gains and losses deferred in the foreign currency translation reserve are recognized in profit or loss on disposal of the foreign
operation.
Cash flow hedges
The effective portion of changes in the fair value of derivatives, that are designated and qualify as cash flow hedges, is
recognized in other comprehensive income and accumulated under the heading of hedging reserve. The gain or loss relating to
the ineffective portion is recognized immediately in profit or loss, and is included in the ‘other financial expense / income' line
item.
Amounts previously recognized in Other Comprehensive Income and accumulated in equity are reclassified to profit or loss in
the periods when the hedged item is recognized in profit or loss, in the same line of the Income Statement as the recognized
hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-
financial liability, the gains and losses previously recognized in Other Comprehensive Income and accumulated in equity are
transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.
Notes to the Consolidated Financial Statements
Össur Consolidated Financial Statements 2021 66
Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging instrument expires,
is sold, terminated, exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in Other
Comprehensive Income and accumulated in equity at that time remains in equity and is recognized when the forecast
transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or
loss accumulated in equity is recognized immediately in the Consolidated Income Statement.
Government grants
Government grants are not recognized until there is reasonable assurance that the Company will comply with the set
conditions and that the grants will be received. Government grants are recognized in profit or loss in the periods in which the
Company recognizes the related expenses for which the grants are intended to compensate. Government grants that are
received as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to
the Company with no future related costs are recognized in profit or loss in the period in which they are received. Government
grants that are compensating for revenue loss are presented as Other income / (expenses) in the Income Statement.
Significant accounting judgments, estimates and assumptions
In the application of the Company's accounting policies, management is required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised. Revision of accounting estimates can also affect future periods.