ANNUAL REPORT 2022
2BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Table of Content
Highlight from 2022
CEO´s Review
7
Strategy 2023
9
Innovative Products
10
Corporate Governance Statement 2022
11
Information for Shareholders
19
Board of Directors
20
Group Management Team
22
Financial Statements
23
3BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Biohit Oyj is a globally operating
Finnish biotechnology company
that develops diagnostic and other
health products. Biohit’s mission
is “Innovating for Health”. Biohit is
headquartered in Helsinki and has
subsidiaries in Italy and the United
Kingdom. Biohit’s Series B shares
(BIOBV) have been listed on NASDAQ
OMX Helsinki since 1999, in the
Small Cap / Healthcare segment. The
company was established in 1988.
Biohit in Brief
“
...globally operating Finnish
biotechnology company.”
4BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Global Operations
Gebro Pharma launched nicotine-free
Acetium® lozenge for smoking cessation in
Switzerland in May 2022. Gebro Pharma, a
subsidiary of Austrian Gebro Holding, distributes both
OTC and prescription medicines in Switzerland. The
group was founded in 1947 and in 2021, its
revenue was approximately MEUR 212.
Biohit participated actively in
healthtech fairs. Biohit had
pretentious stands in AACC
in Chicago, UEG in Vienna
and Medica in Düsseldorf.
Biohit is a profitable Finnish healthtech
company operating globally. 97.9% of
total revenues are generated from
international operations.
5BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Highlights from 2022
FEBRUARY
DECEMBER
AUGUST
Biohit made a new multiannual distribution agreement
for certain GastroPanel® products in China with
Biohit HealthCare (Hefei) Co. Ltd.
CEO Päivi Siltala leaves the company, CFO Jussi Hahtela is appointed to new CEO.
Controller Jussi Sorvo is appointed to CFO.
GastroPanel® availability expands substantially when Randox started the global sales of its
CE-labelled MULTIPLEX GASROINTESTINAL PANEL-test based on the Biohit license. Randox is
a British health technology enterprise operating on global market, with the annual turnover of
around 730 million euro in 2021.
R&D Director Minna Mäki resigns. Head of Technical
Product Management Panu Hendolin is appointed to new
R&D Director.
Biohit gives a positive profit warning and raises its guidance for 2022.
Respected Maatsricht/Florence Consensus Report gives very strong scientific
evidence of the benefits of GastroPanel® test in diagnosing H. pylori infec-
tion, finding causes for dyspepsia and reflux symptoms, as well as evaluating
risks for gastric and esophageal cancer, and early perception of them.
SEPTEMBER
6BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Key figures 2022 2021
Revenue (MEUR)
11.0 9.4
EBITDA (MEUR)
1.6 0.5
Operative EBITDA (MEUR)
1.8 0.5
Operating profit/loss (MEUR)
1.1 -1.5
Profit/loss before taxes (MEUR)
0.9 -1.3
Profit/loss for the period (MEUR)
0.6 -1.5
Average number of personnel
45 44
Number of personnel at the end of the period
43 41
Equity ratio (%)
68.3% 76.3%
Earnings per share (EUR), Undiluted
0.04 -0.10
Earnings per share (EUR), Diluted
0.04 -0.10
Shareholders' equity per share (EUR)
0.50 0.49
Average number of shares during the period
15,045,593 15,045,593
Number of shares at the end of the period
15,045,593 15,045,593
11
10
9
8
7
6
5
4
3
2
1
0
2018
2019 2020 2021 2022
Summary 2022
10.951 meur 1.8 meur68.3%
REVENUE FROM
INTERNATIONAL OPERATIONS
97.9%
OPERATIVE EBITDA
EQUITY RATIO
REVENUE
Revenue 2018-2022, MEUR
7BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
The year 2022 marked a turning point for
Biohit. We reorganised our operations and
allocated our resources more efficiently
than ever before. The significant increase
in revenue and the turn to profitability
are strong evidence that we are on the
right track.
President and CEO Jussi Hahtela
“
The significant increase in revenue
and the turn to profitability are
strong evidence that we are
on the right track.”
In 2022, our revenue grew by 17%, to a total of
11.0 million euros. The previous year’s revenue
was 9.4 million euros. Cost control and making
sales a priority area were positively reflected
in the profitability figures. Our EBITDA margin
was 14.7 percent and our operating margin
10.3 percent. In euros, operative EBITDA was
1.8 million (2021: 0.5 million) and operating
profit 1.1 million (2021: -1.5 million).
The most encouraging thing about the rapid
improvement of the result is that there are
several drivers behind the growth. More royalty
revenues from China were recorded compared
to previous year and the sales of the parent
company and British subsidiary grew rapidly.
The combined sales of different quick tests
increased by 30% and the traditional ELISA
versions of our flagship product GastroPanel®
reached the same growth rate. Geographically,
the growth curves were steepest in Europe
and in Asia.
8BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
New management group
The composition of Biohit’s management group
changed last year. CEO Päivi Siltala left the
company at the beginning of September and
I started as CEO immediately thereafter. Jussi
Sorvo, who previously worked as a controller
in the company, was appointed as CFO in my
place. Product development director Minna
Mäki resigned in December and the job went
to Panu Hendolin, who previously worked as
product management director.
All the positions were filled from within the
company, which enabled quick and smooth
changes without interruptions affecting opera-
tional activities. The new management group
has excellent strategic and operational pre-
conditions for developing business and profit-
ability even further.
Lagging production chains and shadows in Italy
We did not make it through last year without
some bumps along the way. Especially in the
second half of the year, we suffered from pro-
duction chain-related challenges which affected
our revenue. We worked hard to solve the
logistical challenges and to identify operational
risks in general. In the future, we will be better
prepared for the various challenges we may face.
It was in Italy that we experienced the most
frustrating moments of the year. The Italian
state is demanding ex post compensation from
suppliers of medical equipment for the budget
overruns of the Italian administrative regions
in the years 2015–2019. Like other operators
in the field, we have vehemently denied the
absurd demands, which are contrary to common
sense. Despite this, due to the claims for com-
pensation, we had to make a reservation of 250
thousand euros in the financial statements.
Our reported revenue is thus 250 thousand
euros lower than our actual sales.
Our gaze is tightly focused on the future
Last year was strong for Biohit by all mea-
sures, and I am confident that the positive
trend will continue in the future. Biohit is a
growth-oriented company, and above all, it is
a company that has the ability to grow.
Our main themes of the year were clearing
obstacles to sales and cost control. We have
changed our operating methods to make them
more market oriented. Sales are at the centre
of operations and the rest of the organisation
supports sales. We will continue on this tried
and tested path also in 2023.
Our fixed costs are still quite high, but this is
a conscious and reasoned choice. Health tech-
nology is heavily regulated, and the in-house
production of regulation-related operations
is expensive. On the other hand, our existing
regulatory structure is easily scaled to larger
volumes. For a growth-oriented company with
a strong balance sheet and strong liquidity,
the current arrangement is therefore justified.
Biohit develops, manufactures and sells
cost-effective and easy-to-use diagnostics for
the gastrointestinal tract which reduces the
cost burden of health care and helps to opti-
mally allocate scarce health care resources.
Up to 40 percent of the world’s population suffers
from upper stomach problems. There is a clear
demand in the market for modern diagnostics
that save costs and improve the effectiveness
of treatment. With determined work, we will
take a bigger share of this market for our-
selves every year.
Towards the new year with
positive expectations
The past year has been full of work, but our
eye has been kept firmly on the goals. A big
thank you to our staff, Team Biohit, who have
committed to moving the changes forward. It
is a joy and an honour to work with you all.
Thanks also to our customers, owners and
partners for your support.
We expect our EBIT to increase in 2023
compared to 2022 (in 2022: EUR 1.1 million).
The risks are primarily related to high inflation
and the global economic trends.
n
9BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Strategy 2023
IN 2023, BIOHIT’S STRATEGY
SHIFTS TO THE NEW ERA:
Innovation based customer
centric health technology
pioneer - profitability as
the foundation of business
“
Our products aim to promote medical research and early diagnosis, and prevent serious
illnesses. Our portfolio includes innovative in vitro diagnostics related to digestive tract, and products that bind acetaldehyde.”
Biohit’s strategy, which emphasizes customer orientation, quality, and
improving operational agility and cost-effectiveness remains unchanged;
implementation of the strategy will now be intensified and closely monitored.
The main priorities for ensuring profitable growth
in the coming years are:
“
Mission: Innovating for health.”
IMPROVING THE
COST STRUCTURE
OF OUR DISTRIBU-
TION CHAIN
Streamlining our
processes by
digitizing
and automating
operations
QUALITY AND
EFFICIENCY AS
THE BASIS OF
OUR OPERATIONS
A continuous
approach to
developing
and evolving
REFINING OUR
PRODUCT
DEVELOPMENT
Streamlining
operations by
concentrating
resources on those
projects critical to
our business
EXPANSION OF THE
MARKETING
NETWORK FOR
OUR MAIN
PRODUCTS
Our main markets
are China, the EU,
the UK, and the
Middle East
10BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Innovative Products
GASTROPANEL®
Gastric Health Test
GastroPanel® is a unique test developed by Biohit for the diagnosis of
upper abdominal disorders. GastroPanel reliably evaluates the health
of the gastric lining. Launched in 2021, the GastroPanel rapid tests can
deliver results in just 15 minutes.
GastroPanel combines four tests to analyze the health of the stomach
from a blood sample. The quick test is performed with a fingerprick
blood sample. GastroPanelis suitable for diagnosing atrophic gastritis
and Helicobacter pylori infections, as well as for assessing the risk of
stomach cancer. The GastroPanel test determines the levels of type
I and II pepsinogens, gastrin-17, and antibody levels for Helicobacter
pylori found in the blood.
ACETIUM® LOZENGE
– Quit Smoking Without Nicotine
Carcinogenic acetaldehyde is one of the harmful substances in tobacco
smoke. Acetium® lozenge binds up to 90% of the acetaldehyde in saliva.
Acetium reduces the pleasure received from smoking, making it easier
to quit.
The effect of Acetium lozenge on smoking cessation has been investi-
gated in two clinical studies. Regular use of the lozenge during smoking
increased the likelihood of quitting smoking by a factor of 1.5 compared
to the placebo. Acetium lozenge does not have the side effects associ-
ated with other methods of quitting smoking, such as nicotine addiction
or possible side effects from medicines.
Biohit´s R&D cooperation across
different scientific fields, innova-
tions and applications have es-
tablished valuable results for the
healthcare worldwide.
GastroPanel® tests and Acetium®
lozenges are examples of our inno-
vative products for the pro-motion
of health and prevention of diseases.
11BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Corporate Governance Statement 2022
INTRODUCTION
Biohit Oyj has prepared this Corporate Gover-
nance Statement based on Section 54 of the
Finnish Corporate Governance Code for listed
companies issued by the Securities Mar-
ket Association. The company will publish
seprate remuneration report for the financial
year 2022 for governing bodies according to
new shareholders right directive. The existing
remuneration policy and information on the
remuneration to the rest of the management
team the company publishes on its website
www.biohithealthcare.com/investors.
The Board of Directors reviewed the renume-
ration reportin its meeting on February 6, 2023.
The Report of the Board of Directors, the Audi-
tor’s Report, and the full Corporate Gover-
nance Statement, the remuneration policy and
the rest of the management team remuneration
are available at www.biohithealthcare.com/
investors.
RULES OBSERVED BY BIOHIT
Biohit Oyj is a Finnish public limited company
whose series B shares are listed on Nasdaq
Helsinki in the Small cap/Healthcare group.
Biohit Group (hereinafter referred to as
“Biohit”) comprises the parent company,
Biohit Oyj, and its foreign subsidiaries, which
primarily focus on sales and marketing for
Biohit Oyj’s products. Biohit is headquartered
in Helsinki.
Biohit’s governance complies with applicable
legislation, standards and recommendations
concerning public listed companies, the regu-
lations of Nasdaq Helsinki Ltd, and Biohit Oyj’s
Articles of Association. Biohit Oyj has adminis-
tered its affairs in compliance with the corpo-
rate governance code 2020 for Finnish listed
companies, and this Statement has been pre-
pared in accordance with the code. The Corpo-
rate Governance Code is available at
www.cgfinland.fi.
None of the members of the five-person Board
of Directors is independent of the company,
so the company does not fulfil recommenda-
tion number 10 stating that the majority of
the members of the Board of Directors must
be independent of the company. The company
deviates from the recommendation because
the current Board composition has the best
available competence to lead the company on
its existing strategy. Biohit’s Board of Directors
is one of the best in its size according to the
Nordic Business Diversity Index, which mea-
sures Board diversity in Finland, Sweden, and
Denmark through four different variables: age,
gender, education background and nationality.
The company strives to comply with high inter-
national standards of corporate governance
and the key principles of corporate gover-
nance among Finnish listed companies.
BIOHIT’S ADMINISTRATIVE BODIES IN 2022
The highest decision-making power at Biohit
Oyj is exercised by the company’s shareholders
at the Annual General Meeting. The company’s
Board of Directors supervises the administra-
tion and organisation of the company and the
Group’s earnings trends. The President & CEO
is responsible for operative management and
is assisted by the Management Team.
12BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Annual General Meeting
Biohit Oyj held its 2022 Annual General Meet-
ing on June 15
th
in Helsinki. 2,686,488 shares
and 42,738,488 votes were represented at the
meeting, corresponding to 17.86% of all the
shares in the company and 59.71% of the votes.
The meeting was attended by one of the six
members of the Board of Directors, the Presi-
dent & CEO, and the principal auditor.
Board of Directors
The Board of Directors, which comprises 5–7
members elected by the Annual General Meet-
ing, is responsible for the administration and
appropriate organisation of Biohit’s business
operations. Proposals concerning membership
of the Board of Directors are prepared by the
Board of Directors. Biohit has defined the prin-
ciples applying to diversity within the Board of
Directors in accordance with recommendation
9 of the corporate governance code. Biohit’s
objective is for both sexes to be represented
on the company’s Board of Directors. In line
with this objective, the Board of Directors had
members of both sexes.
The Board of Directors elects a chairman from
amongst its members.
Board members’ terms of office run from the
date of their election by the AGM until the end
of the next AGM.
The Board’s areas of responsibility are stated
in the written rules of procedure approved by
the Board. They are as follows:
n
Increasing shareholder value
n
Ensuring the appropriate organisation of
accounting and financial management
n
Approving Biohit Oyj’s financial statements,
consolidated financial statements and the
Report of the Board of Directors for the
most recent financial period
n
Approving the half year financial report
annually for the period ending at
the end of June
n
Deciding on Biohit’s business plan, budget,
and investment plan
n
Deciding on Biohit’s financing and risk
management policies
n
Approving the remuneration and incentive
schemes for senior managers
n
Appointing the President & CEO
n
Deciding on Biohit’s strategy, organisational
structure, investments, and other wide-
reaching and significant issues
The Board’s decision-making is based on
reports prepared by the company’s operative
management on the operational development
of the Group and its business units.
The Chairman is responsible for convening
Board meetings and arranging the work of
the Board. The Board convenes 5–12 times
per year, usually meeting once every month
or once every two months, and the meeting
schedule for the entire term is confirmed in
advance. When necessary, Board meetings are
held more frequently or by teleconference.
Board of Directors in 2022
Until the Annual General Meeting held on
15 June 2022, the following six people were
on the Board of Directors: Eero Lehti (chair-
man), Franco Aiolfi, Liu Feng, Matti Härkönen,
Lea Paloheimo and Osmo Suovaniemi. At the
Annual General Meeting, Franco Aiolfi, Liu
Feng, Lea Paloheimo and Osmo Suovaniemi
were re-elected to the Board of Directors to
serve until the end of the Annual General
Meeting in 2023. Kalle Härkönen was elected
as a new member to the Board f Directors. The
Board of Directors elected Lea Paloheimo as
its chairman.
Biohit Oyj’s Board of Directors convened 6
times in 2022 (9 times in 2021). The average
attendance was 92 per cent (92 per cent).
“
...Board of Directors is one the best
in its size according to the Nordic
Business Diversity Index...”
13BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Biohit Oyj’s Board of Directors
on 31 December 2022
Lea Paloheimo (b. 1951), Chairman
PhD (clinical biochemistry), hospital chemist
n
Member of the Board since 2019
n
Independent of the major shareholders but
non-independent of the company
n
Employed by Biohit Oyj during 2001-2019,
recently working as a Production and
Product Development Director and
Business Development Director.
n
Attended 6 Board meetings in 2022
n
Direct shareholding: series B shares: 7,000
Franco Aiolfi (b. 1947), Degree in Pharmacy
awarded by the University of Urbino
n
Member of the Board since 2013
n
Independent of the major shareholders but
non-independent of the company
n
Attended 5 Board meetings in 2022
n
Direct shareholding: no Biohit shares
n
Indirect shareholding: Majority owner
of BioBrick S.p.A 31 December 2021.
BioBrick S.p.A. owned 92,807 series
B shares in 31 December 2021.
Liu Feng (b. 1972), General Manager of
Hefei Medicine Co., Ltd, Owner of
Biohit Healthcare Hefei
n
Member of the Board since 2018
n
Non-independent of the major shareholders
and of the company n
n
Attended 4 Board meetings in 2022
n
Indirect shareholding via Biohit Healthcare
(Hefei) Co., Ltd.: series A shares: 850,000,
B shares: 4,095,415
Kalle Härkönen (b. 1968), MSc (Tech.)
n
Member of the Board since 2022
n
Non-independent of the company
n
CEO at Uusioaines Oy
n
Attended 3 Board meetings in 2022
n
Direct shareholding: series B shares: 4,333
Professor Osmo Suovaniemi (b. 1943),
MD, PhD
n
Member of the Board since 1988 and
Chairman 2011-2021
n
Non-independent of major shareholders
and of the company
n
Founder of Biohit and its former
President & CEO
n
Attended 6 Board meetings in 2022
n
Direct shareholding: series A shares:
2,018,310; series B shares: 0
Board committees
The Board of Directors have assessed that the
scope of the Biohit Oyj’s business does not
require the appointment of a separate Audit
Committee, and consequently no separate
committees have been appointed to increase
the efficiency of the Board.
President & CEO
The President & CEO is responsible for the day-
to-day management of the company in accor-
dance with the instructions and regulations
issued by the Board of Directors. The Presi-
dent & CEO of the parent company is elected
by the Board and acts as Group President. He
also ensures the appropriate organisation and
legality of the company’s accounting and asset
management. The terms of employment of the
President & CEO are based on a written con-
tract that is approved by the Board of Direc-
tors. The President & CEO cannot be elected
Chairman of the Board. During the financial
period Päivi Siltala MSc (until 1 September
2022) and Jussi Hahtela MSSc. (starting 2 Sep-
tember 2022) have acted as the CEO.
14BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Jussi Hahtela, (b. 1973)
n
MSSc
n
With Biohit Oyj since 2021
(CEO from 2 September 2022)
n
Previously: Chief Strategist, Head of FX &
Money Markets Sales Finland,
Nordea Markets
n
No direct shareholding
Päivi Siltala, (b. 1974)
n
MSc
n
CEO until 1 September 2022
n
Previously: Sales Director at Johnson &
Johnson and Cook Medical Endoscopy.
Business Development Director
at Pentax Medical
n
No direct shareholding
Group Management Team
The composition and areas of responsibility of
the Group’s Management Team were as follows:
Jussi Hahtela (President & CEO), Jussi Sorvo
(finance, ICT, HR), Suvi Elomaa (production),
Panu Hendolin (R&D), Ilari Patrakka (sales and
marketing) and Daniela Söderström (quality
and registration).
Jussi Sorvo (b. 1990)
n
MSc (Econ.)
n
Finance, HR, ICT
n
With Biohit Oyj since 2021
n
Previously: Accountant, PwC
n
No direct shareholding
Suvi Elomaa (b. 1985)
n
Biotechnology and food engineer
n
Production Director
n
With Biohit Oyj since 2013
n
Previously: Project engineer at the Institute
of Biomedicine, Department of Physiology
at University of Turku
n
No direct shareholding
Ilari Patrakka (b. 1980)
n
MSc (Econ.)
n
Sales and Marketing Director
n
With Biohit Oyj since 2012
n
Previously: retail sales channel manager at
Marioff Corporation Oy, marketing and
export manager at Gasmet Technologies Oy,
sales manager at Gasmet Technologies
(Asia) Ltd.
n
Direct shareholding: series B shares: 4,116
Panu Hendolin (b. 1971)
n
Ph.D. (Molecular medicine)
n
R&D Director
n
With Biohit Oyj as R&D and Production
Director 2007-2008 as well as 2014-2017.
Head of Technical Product Management
from February to December 2022.
n
Previously: Production Director at United
Medix Laboratories Oy and Chief Technology
Officer at Sulapac Oy
n
No direct shareholding
Daniela Söderström (b. 1987)
n
MSc (Tech.)
n
Quality and Regulatory Affairs Director
n
With Biohit Oyj in the field of quality
management since 2014.
n
Direct shareholding: series B shares:
30,000
Management of subsidiaries
The Managing Directors of the subsidiaries
are responsible for the management of sub-
sidiary operations and report to the President
& CEO of the parent company. The subsidiaries
are responsible for the sales and marketing
of Biohit’s products in their market areas. The
managers of subsidiaries operate under the
management and supervision of Biohit’s Pres-
ident & CEO. In 2022, the Managing Directors
of Biohit’s subsidiaries were: Graham Johnson
(United Kingdom) and Franco Aiolfi (Italy).
The personal details and shareholdings of
Biohit Oyj’s Board of Directors and opera-
tive management are available at www.bio-
hithealthcare.com/investors.
15BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Decision-making procedure
concerning remuneration
The remuneration policy and the rest of the
management team remuneration are available
at www.biohit.fi/investors.
Remuneration of members of
the Board of Directors
The Annual General Meeting approves the fees
of Biohit Oyj’s Board of Directors. The remu-
neration paid to the other members of Biohit
Oyj’s Board of Directors is decided by the com-
pany’s Board of Directors in accordance with
the company’s rules on related party trans-
actions, which are described on section
“related party transactions”.
President & CEO and other
company management
The Board approves the President & CEO’s
remuneration and terms of employment. The
severance payment is dependent on the dura-
tion of the CEO’s term.
The Board approves the remuneration and
terms of employment of members of the
Management Team. Biohit Oyj’s Board of
Directors approves the principles of the incen-
tive schemes for Management Team members
and the President & CEO.
The President & CEO approves the salaries
and profit-based incentives of subsidiaries’
Managing Directors in accordance with the
instructions provided by Biohit’s Board of
Directors. Profit-based incentives are depen-
dent on sales and profitability trends for each
unit.
Pension plans
No other pension arrangements, beyond those
mandated by law, have been made with the
Managing Directors of Group companies.
MAIN CHARACTERISTICS OF INTERNAL
CONTROL OF THE FINANCIAL REPORTING
PROCESS AND RISK MANAGEMENT
Biohit’s internal control is responsible for
ensuring that the Group carries out its business
operations within the framework of current
regulations and legislation and in accordance
with the instructions of the Board of Directors.
Internal control seeks to ensure that the
Group operates with maximum efficiency and
that efforts are made at various levels of the
organisation to achieve the objectives set in
the strategy approved by the Board of Directors.
Risk management is geared towards supporting
the achievement of these objectives by anti-
cipating and managing business-related risks.
Control environment
Biohit’s business operations and administration
aim to realise the company’s values, of which
the most important is to promote health and
wellbeing through innovation. Biohit will con-
tinue to focus on its diagnostics business and
products that bind acetaldehyde – the areas
where the company conducts global opera-
tions in manufacturing, sales and marketing.
“
...the most important is
to promote health and wellbeing
trough innovation.”
16BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Biohit’s control environment is defined by
the Board of Directors, which, as the highest
administrative body, is responsible for organi-
sing internal control. The President & CEO is
responsible for maintaining the efficiency of
the control environment and the functionality
of internal control. Biohit’s financial depart-
ment is responsible for the functionality of
financial reporting as well as the interpre-
tation and application of financial statement
standards in line with the separately approved
instructions.
Risk assessment
In the assessment of risks related to finan-
cial reporting, Biohit’s objective is to identify
the major risks associated with the Group’s
business operations and environment. The
cost-effective management and monitoring of
these risks will then ensure that the company’s
strategic and operational targets can be reached
as intended.
The Board of Directors carries the main
responsibility for risk assessment and monito-
ring the implementation of risk management.
The President & CEO works with the parent com-
pany’s operative management and subsidiar-
ies’ managers to ensure that the Group’s risk
management is duly arranged. The parent com-
pany’s 17 operative management is respon-
sible for identifying and managing the risks
involved within each business area, while the
subsidiaries’ Management Teams are respon-
sible for those in their own market areas.
Risk management is one of the areas covered
by Biohit’s internal control processes, which
regularly monitor the risks associated with
the company’s business operations, identify
any changes and, if necessary, take appropriate
action to hedge against them. Risk manage-
ment focuses on ensuring the continuity of
business operations and preventing financial
misconduct.
Control measures
Internal control measures are integrated
into the Group’s general business manage-
ment and reporting process. The subsidiar-
ies report to Group Management on business
and earnings trends and the most significant
deviations on a monthly and quarterly basis.
The Group’s Management Team reports to the
Board of Directors on the overall development
of business; these two bodies, together with the
President & CEO, decide on overall corporate
strategies and procedures guiding the opera-
tions of the Group.
The subsidiaries’ Boards follow business
developments and ensure that the parent com-
pany’s approved instructions and guidelines
are followed. As a rule, the Boards of Direc-
tors of the subsidiaries meet monthly. Board
work in the subsidiaries is based on financial
reports and the written monthly and annual
reports drawn up by subsidiary management.
Biohit’s business control is carried out in
accordance with the management system
described above. The company provides the
reporting systems necessary for business and
financial management. The financial depart-
ment of the parent company provides instruc-
tions for drawing up annual and interim finan-
cial statements and prepares the consolidated
financial statements.
The parent company’s finance department
retains central control of funding and adminis-
trative matters within the framework of the
instructions provided by the Board of Directors
and the President & CEO and is also respon-
sible for the management of interest and
exchange rate risks. The Managing Directors
of the subsidiaries ensure that the subsidiaries’
reporting is carried out in accordance with the
instructions given by the Group’s Management
Team.
The parent company’s administration depart-
ment controls and provides instructions
on Group-level personnel policies and any-
magreements made within the Group.
17BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Disclosure policy
Biohit aims to provide all its stakeholders with
information about the company’s operations in
a proactive, consistent and timely manner. The
company seeks to take the special require-
ments and interests of all its stakeholders
into account in its communications in order to
increase confidence in the company and there-
by promote its business operations. Biohit’s
Board of Directors has approved an informa-
tion release policy with a view to ensuring
the accuracy and reliability of any informa-
tion released. The policy also specifies who is
responsible for communications in different
situations.
Biohit’s financial department regularly pro-
vides information on processes related
to financial administration reporting. This
ensures the real-time availability of data,
which is a prerequisite for efficient internal
control.
Financial administration guidelines and the
company’s information release policy aim to
ensure the promptness and comprehensiveness
of communications and the release of informa-
tion required for internal control purposes.
Monitoring
The efficiency of internal controls on financial
reporting is overseen by the Board of Direc-
tors, the President & CEO, Management Team
members, and the Managing Directors of sub-
sidiaries. Control focuses on following weekly
and monthly financial reports and forecasts
and analysing any deviations from business
plans. Monitoring is performed at all Board and
Management Team meetings where reports
are reviewed. It is supported by regular con-
tact between Group Management and the com-
pany’s auditor, and analysis of any deviations,
which occurs at least once per quarter.
The audit frameworks for the Group’s sub-
sidiaries and key audit areas are jointly defined
by the Group’s financial management and the
chief auditor. Biohit has not appointed a sepa-
rately organised function for internal auditing
purposes, but Biohit’s financial department
has responsibility to implement it in practise.
The Group has internal control reporting sys-
tems required for financial management and
monitoring business development. The reporting
systems produce monthly financial data, so that
financial management can ensure compliance
with the parent company’s approved instruc-
tions on matters such as authorisation.
The Group’s auditor and the auditors of each
subsidiary evaluate the effectiveness of the
internal control system in connection with the
external audit.
AUDIT 2022
The auditor elected by the AGM is responsible
for Biohit’s statutory audit. According to the
Articles of Association, the company must
have one auditing body approved by the Cen-
tral Chamber of Commerce. The 2022 Annual
General Meeting re-elected auditing firm Price-
waterhouseCoopers Oy as the company’s audi-
tor for a one-year term, with Tiina Puukkoniemi,
Authorised Public Accountant, as chief auditor.
Auditor and auditor’s fees
The 2022 Annual General Meeting decided to
pay auditor’s fees in accordance with the audi-
tor’s invoice. The Group’s invoiced auditors’
fees for the 2022 financial period totalled EUR
59,000 (EUR 54,000 in 2021). In addition to this,
PricewaterhouseCoopers Oy was paid a total
of EUR 66,000 for other services (EUR 60,000
in 2021).
18BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
RELATEDPARTY TRANSACTIONS
Biohit Oyj’s Board of Directors made following
decision on 2022 related party transactions
1. As part of his work as the head of scientific
advisory board, Osmo Suovaniemi’s
compensation amounted 129,000 EUR
(2021: 200,000 EUR).
2. As part of his work as the managing director
of Biohit Healthcare S.r.I, Franco Aiolfi will
be paid a fixed fee of 18,000 EUR
(2021: 36,000 EUR).
3. The members of the scientific advisory board
will be paid 85 EUR per hour for the work
outside the scientific advisory board.
INSIDERS
Biohit applies the Guidelines for Insiders
approved by Nasdaq Helsinki Ltd, as well as
any relevant amendments.
Biohit’s President & CEO is responsible for
insider control. He ensures that people who
handle insider information are aware of insider
regulations and adhere to trading restrictions.
Insiders are not allowed to trade Biohit Oyj
securities for 30 days before the publication of
the company’s financial statement bulletin and
interim reports. Insiders participating in projects
are not allowed to trade shares in Biohit before
an announcement has been made of the con-
tinuation or discontinuation of a project.
Information on the shareholdings of Biohit’s
insiders and their trading activity is available
on Biohit’s website at www.biohithealthcare.
com/investors.
n
19BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Information for Shareholders
General meeting of shareholders
Biohit Oyj’s Annual General Meeting has been
planned for Wednesday 14 June 2023 in
Helsinki, Finland. The Board of Directors will
call the General Meeting.
Board of directors´proposal regarding
the distripution of profits
On 31 December 2022, the parent company’s
distributable assets (unrestricted equity)
amounted to EUR 4,711,504.69, including the
loss for the financial period of EUR 934,640.55.
The Board of Directors proposes to the Annual
General Meeting that no dividend be distributed
by the company for the most recent financial
period.
Shares
Total number of shares: 15,045,593
(15,045,593 in 2021)
Series A shares (20 votes per share):
2,975,500 (2,975,500 in 2021)
Series B shares (1 vote per share):
12,070,093 (12,070,093 in 2021)
Biohit Oyj’s series B shares are listed in the
Nasdaq Helsinki Ltd Small Cap group. The
shares are traded under the symbol BIOBV.
More detailed information about Biohit Oyj’s
shares is provided in the notes to the consolidated
financial statements and on the company’s web-
site at www.biohithealthcare.com/investors.
Financial communication
The financial reviews and other stock exchange
releases published by Biohit are available on
the company’s website at www.biohithealth-
care.com/investors. You can also subscribe
to receive financial communications by email
using the subscription form on the website.
Publication dates for financial report in 2023
Wednesday 9 August 2023: Interim report,
January–June (H1).
Silent period
Biohit observes a silent period of 30 days
before results are published. During this period,
Biohit’s management and other personnel will
not provide information about the company’s
financial position or marketrelated comments,
nor will they meet with representatives from
equity markets or the financial media. However,
if an event that requires immediate publication
takes place during the silent period, Biohit will
publish information without delay in accor-
dance with disclosure regulations. In such
cases, the company is able to comment on the
event.
n
20BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Franco Aiolfi
born in 1947
Degree in Pharmacy awarded by Urbino University
Member of the Board of Biohit Oyj since 2013
Non-independent of the company, but independent of
a major shareholder.
Other relevant experience:
n
Managing Director of BioAir S.p.A. in 31.12.2020 and majority
owner through Arsfin Consult Srl
Boards of Directors
Lea Paloheimo
born in 1951
PhD (clinical biochemistry), hospital chemist
Chairman of Biohit Oyj’s Board of Directors
Member of the Board of Biohit Oyj since 2019
Non-independent of the company but independent of
major shareholder.
Other relevant experience:
n
With Biohit Oyj during the years 2001-2019. Production
and Product Development Director, Business
Development Director.
Liu Feng
born in 1972
General manager of Hefei Medicine Co., Ltd,
Owner of Biohit Healthcare Hefei
Member of the Board of Biohit Oyj since 2018
Non-independent of the company and major shareholder
Other relevant experience:
n
Special researcher at the Counselor’s Office of
Anhui Provincial People’s Government
n
The vice chairman of the Chinese National Early
GastrointestinalCancer Prevention & Treatment
Center Alliance
n
Member of the council of the China Health
Promotion Foundation.
n
In 2013, Liu Feng and his companies and Biohit Oyj
established a joint venture Biohit Healthcare (Hefei) Co., Ltd
21BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Boards of Directors
Kalle Härkönen
born in 1968
Foamit Group Oy, CEO, and MD Uusioaines Oy 2020 –
Member of the Board of Biohit Oyj since 2022
Other relevant experience:
More than 25 years of experience in international business in various
industries, especially in managing and developing companies and
their global supply chains through digitalization and innovation.
n
Teknos Group Oy, Deputy CEO, COO, Head of Group
Operation and Logistics, 2016 – 2020
n
Fazer Confectionery Ltd, Vice President Supply chain &
sourcing, 2013 – 2016
n
Sartorius Biohit Liquid Handling Oy, part of Sartorius Lab
Holding GmbH, Vice President, Liquid Handling Operation,
2012 – 2013
n
Biohit Oyj, Chief Operational Officer (COO), 2001 – 2012
Osmo Suovaniemi
born in 1943
MD, PhD, Professor
Member of the Board of Biohit Oyj since 1988,
Chairman 2011-2021
Non-independent of both company and major shareholder
Other relevant experience:
n
The founder of Biohit Oyj
n
The founder, main shareholder, chairman, and CEO of
Labsystems Oyj and Eflab Oy.
n
Received an award in 1992 for having most patents in Finland.
n
A board member, vice-chairman, and chairman of the General
Industry Group in Finland in 1978-1986.
n
A board member of the Confederation of Finnish
Industry in 1986.
n
A member of the Academy of Technical Sciences from 2003.
22BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Group Management Team
Ilari Patrakka
born in 1980
MSc (Econ.), Sales and
Marketing Director
With Biohit Oyj since 2012.
Daniela Söderström
born in 1987
MSc (Tech.), Quality and
Regulatory Affairs
Director
With Biohit Oyj since 2014.
Jussi Hahtela
born in 1973
MSSc, President and CEO
With Biohit Oyj since 2021.
Panu Hendolin
born in 1971
Ph.D. (Molecular medicine),
R&D Director
With Biohit Oyj since 2022.
Suvi Elomaa
born in 1985
Biotechnology and food
engineer, Production Director
With Biohit Oyj since 2013.
Jussi Sorvo
born in 1990
MSc (Econ.), CFO
With Biohit Oyj since 2021.
23BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Financial Statements
Table of Content
1. Report by the Board of Directors
24
2. Consolidated Financial Statements*
30
Consolidated Comprehensive Income Statement
30
Consolidated Balance Sheet
31
Statement of Changes in Consolidated Shareholders´ Equity
33
Consolidated Cash Flow Statement
34
Notes to the Parent Company´s Financial Statements
36
3. Key Indicators
65
4. Shares and Shareholders
67
5. Formulae for Calculating Key Indicators
70
6. Parent Company’s Financial Statement*
71
7. Board of Director´s Proposal Regarding the Distribution of Profits*
85
8. Auditor´s Report
86
* Part of the financial statements
Information in ESEF format has not been audited.
24BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
1. Report by the Board of Directors 2022
Summary
n
Revenue EUR 11.0 million (EUR 9.4 million)
n
Revenue grew by 17.0% compared to 2021
n
Operative EBITDA EUR +1.8 million (EUR 0,5 million)
n
Cash at the end of the period EUR 2.1 million (EUR 1.1 million)
n
ROE 8.1% (-18.7%)
n
Fair value of Genetic Analysis AS investment EUR 0.3 million
(EUR 0.9 million 31 December 2021)
n
Revenue from international operations 97.9% (97.5%) of total revenue
n
Equity ratio 68.3% (76.3%)
Year 2022 Biohit’s revenue grew 17.0% from the previous year. Solid balance sheet creates good conditions to business development and utilizing of products’ commercial potential.
Biohit’s equity ratio was 68.3% (76.3%) at the end of financial year 2022. Company’s financial assets totalled EUR 5.9 million (EUR 4.6 million).
BIOHIT GROUP KEY FIGURES
1–12/2022 1–12/2021
Revenue (MEUR) 11.0 9.4
EBITDA (MEUR) 1.6 0.5
Operative EBITDA (MEUR) 1.8 0.5
Operating profit/loss (MEUR) 1.1 -1.5
Profit/loss before taxes (MEUR) 0.9 -1.3
Profit/loss for the period (MEUR) 0.6 -1.5
Average number of personnel 45 44
Number of personnel at the end of the period 43 41
Equity ratio (%) 68.3% 76.3%
Earnings per share (EUR), Undiluted 0.04 -0.10
Earnings per share (EUR), Diluted 0.04 -0.10
Shareholders' equity per share (EUR) 0.50 0.49
Average number of shares during the period 15,045,593 15,045,593
Average number of shares end of the period 15,045,593 15,045,593
25BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
CONSOLIDATED REVENUE AND OPERATING PROFIT
2022 2021
Revenue MEUR 11.0 9.4
Operating income MEUR 1.1 -1.5
ALTERNATIVE PERFORMANCE MEASURES
Bridge calculation of operative EBITDA
EUR million
1-12/2022 1-12/2021
Operating profit/loss 1.1 -1.5
Depreciation and amortization 0.5 2.0
IFRS 2 Share based payments 0.2 0.0
Operative EBITDA 1.8 0.5
REPORTING
Biohit’s product portfolio consists of diagnostic tests, analysis systems,
products binding carcinogenic acetaldehyde into a harmless compound,
monoclonal antibodies, as well as laboratory operations for research
and development. The entire product portfolio is reported under a single
segment.
REVENUE AND EBIT
Revenue grew by 17.0% from 2021. Revenue from international
operations was 97.9% (97.5%) of total revenue. EBIT was EUR 1.1
million (EUR -1.5 million).
BALANCE SHEET, FINANCING AND OPERATIONAL CONTINUITY
On the 31 December 2022 the balance sheet totalled EUR 11.0 million
(EUR 9.6 million 31 Dec 2021). At the end of the reporting period our
equity ratio stood at 68.3% (76.3% 31 Dec 2021).
Profitable financial period increased the balance sheet.
Biohit Oyj has a stable financing position. On the 31 December 2022
company’s financial assets totalled EUR 5.9 million (EUR 4.6 million)
which does not include Genetic Analysis AS shares.
The company has managed to keep its working capital on a good level and
the management believes that working capital will cover the operations
for the next 12 months and the company is not dependent on external
financing to be able to guarantee the continuity of its operations.
Cash flow from operating activities was EUR 1.8 million during the
review period and EUR 0.9 million during the second half of the year.
Company’s management assessment is that company’s ability to continue
its operations is good and there are no indications towards events or
circumstances that alone or together might give a significant reason to
doubt the organisation’s ability to continue its operations.
INVESTMENTS
Gross investments during the 1-12/2022 reporting period totalled
EUR 0.0 million (EUR 0.0 million).
PERSONNEL
During the review period the Biohit Group employed on average 45 (44)
people of whom 36 (35) were employed by the parent company and 9 (9)
by the subsidiaries.
26BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
SHORTTERM RISKS AND UNCERTAINTY FACTORS
Biohit’s key risks are related to global economic trends, the success of
product registrations and the selection and development of new market
areas and distribution channels.
Rising inflation and especially higher cargo tariffs are a thread to Biohit’s
competitiveness. The diagnostic industry is heavily regulated, and this
may have an effect on Biohit’s sales. The duration of the product regis-
tration process is different in each market area. For this reason, it is
not possible to accurately assess the time taken for the authorities to
handle registrations and for product sales to begin.
It is also critical in the short-term to implement the changes in Biohit’s
product portfolio and processes according to new IVDR EU regulation,
so that the sales of the existing products can continue.
When investing liquid assets, the objective is to gain a return on invest-
ment with a low risk of equity loss. The investment portfolio consists of
deposits, investment funds and corporate loans. A fundamental aspect
in portfolio management is sufficient diversification across different
asset classes, investment instruments and counterparties. The invest-
ment portfolio is subject to equity risk that is managed by diversification
and allocation decisions. The portfolio is also subject to interest rate
risk, which is managed by adjusting the duration of the portfolio. In
addition, general instability in the financial markets impacts negatively
on the value of the investment portfolio.
The Group’s investment in listed Genetic Analysis AS is subject to
changes in share price and EUR/NOK foreign exchange rate.
Biohit’s customer base is widely diversified, with the exception of
GastroPanel® sales in China, which currently represents a major
single business for Biohit. Biohit HealthCare (Hefei) Co. Ltd. has, based
on a security agreement signed on 8 February 2022, pledged to Biohit
1,500,000 class B Biohit shares as security for its obligations referred
to therein. The pledge decreases significantly risks that are related to
sales in China.
Otherwise the company is not significantly dependent on individual
customers or project deliveries.
Balance sheet and sales of the Biohit’s UK subsidiary are in GBP. As a
result, Biohit is exposed to risk of GBP weakening. Otherwise, most of
the company’s business is conducted in EUR and the indirect effects of
currency exchange rate fluctuations are considered insignificant.
OUTLOOK FOR 2023
Biohit expects its EBIT to increase in 2023 compared to 2022 (2022:
EUR 1.1 million).
The risks are primarily related to high inflation and the weakening
growth of the global economy.
MAIN EVENTS IN THE FINANCIAL YEAR
Biohit’s revenue continued to grow reaching EUR 11.0 million (2021:
EUR 9.4 million, growth 17%). Profitability improved, EBITDA was
EUR 1.8 million. Growth from previous year was EUR 1.3 million. EBIT
was EUR 1.1 million, EUR 2.6 million higher than in 2021. Gross margin
rose to 62.2% from 59.3% in 2021.
27BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Growth in revenue was broad based. New multi-annual distribution
agreement with Biohit HealthCare (Hefei) Co. Ltd signed in February
regarding certain GastroPanel products played important role. Product
and raw material sales and royalty payments boosted net sales.
Biohit was granted funding for two R&D projects by the European Union
and Business Finland in 2021. The total amount of these grant fundings
is EUR 0.9 million, of which EUR 0.3 million was deferred as a revenue
to the reporting period. Centre for Economic Development, Transport
and the Environment decided to grant Biohit Oyj EUR 0.2 million support
for corporate development, this support had no financial impact on the
reporting period.
Italian subsidiary made EUR 0.3 reservation regarding Italians state’s
demand of ex post compensation from suppliers of medical equipment
for the budget overruns of the Italian administrative regions in the
years 2015-2019. Like other operators in the field, Biohit has denied the
demands. Reservation decreases H2 revenues.
Biohit owns 5.71% of the listed Norwegian Genetic Analysis AS. Valua-
tion of the shareholding decrease by EUR 0.6 million to EUR 0.3 million
in 2022.
In comparison period 2021 the financial result was affected by the patent
depreciation regarding the divestment of Biohit Healthcare (Hefei) Co.
Ltd capitalized in 2017. Annual depreciations of EUR 1.5 million ended 2021.
Expanding distribution network and CE mark
for GastroPanel® Quick Test
GastroPanel quick test is the further development of the unique Biohit
GastroPanel examination which is the most important product for us in
terms of revenue. GastroPanel quick test is based on immunoassay meth-
od detecting GastroPanel biomarkers from EDTA-plasma or finger
prick blood 5 in only 20 minutes. In August 2021 we received CE mark for
the plasma version and in May 2022 for the finger brick version.
The global need in health care is evident for reliable quick tests intended
for diagnosing Helicobacter pylori infection, atrophic gastritis and cancer
risk from patients with dyspeptic symptoms.
Biohit has actively widened the coverage of its sales activities in the
global markets. Three new significant distribution agreements were
signed in 2022. These agreements expand our markets to Poland,
Singapore and Peru.
New CEO
CEO Päivi Siltala resigned on September 1, 2022. CFO Jussi Hahtela was
appointed as the new CEO starting on September 2, 2022.
Before Biohit Hahtela has worked at Nordea Markets as a Chief Strategist
and Head of FX and Money Market Sales Finland.
RESEARCH AND DEVELOPMENT AND CLINICAL STUDIES
R&D operations focus on innovations, as well as product development
and further improved usability. Biohit also employs external experts
and subcontractors in its R&D operations.
Development expenditure has not been capitalized. Research and
development expenditure during the 1-12/2022 reporting period
amounted to EUR 1.2 million (EUR 1.2 million) of which the second half-
year accounted for EUR 0.7 million (EUR 0.5 million).
28BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Finger brick version of GastroPanel quick test was CE-marked in 2022.
The Quick test system comprises an immunological test and dedicated
GP Reader device which interprets the result. The Quick test enables
first-line diagnosis and screening of dyspeptic patients easier than
ever before.
2022 was an unconventional year in R&D. We continued to develop new
products and to do lifecycle updates to existing products, but IVDR and
MDR related regulation compliance consumed resources more than
usually. However, this allocation need was known beforehand, and we
were prepared.
FINANCIAL REPORTING
In 2023 Biohit will publish the half-year financial report for period
January - June 2023 (H1) at 9:30 am local time (EET) on Wednesday 9
August 2023.
MAJOR EVENTS AFTER THE CLOSE OF THE REVIEW PERIOD
The company’s management is not aware of any other material events
since the balance sheet date.
GOVERNMENT
Annual General Meeting in 2022
AGM decided on June 15, 2022 as suggested by the Board of Directors,
that no dividend will be paid on the financial year 2021.
The AGM resolved that five (5) members are elected to the Board of Direc-
tors and that CEO Franco Aiolfi, CEO Liu Feng, CEO Kalle Härkönen, PhD
Lea Paloheimo and professor h.c., MD, PhD Osmo Suovaniemi are elected
as members of the Board of Directors until the end of the next AGM.
AGM decided to choose PricewaterhouseCoopers as an audit firm.
Biohit Oyj’s Management Team
The members of Biohit’s Management Team are: CEO Jussi Hahtela, CFO
Jussi Sorvo, Production Director Suvi Elomaa, Research and Develop-
ment Director Panu Hendolin, Sales and Marketing Director Ilari Patrakka
and Quality and Regulatory Affairs Director Daniela Söderström
SHARES AND SHAREHOLDERS
Biohit Oyj’s number of shares is 15,045,593 (15,045,593), of which
2,975,500 (2,975,500) are Series A shares and 12,070,093 (12,070,093)
are Series B shares. The Series B shares are quoted on NASDAQ Helsinki
in the Small cap/Healthcare group under the code BIOBV.
“
The Quick test enables first-line
diagnosis and screening of dyspeptic
patients easier than ever before.”
29BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
BIOBV/NASDAQ OMX Helsinki
1-12/2022 1-12/2021
High (EUR) 2.15 2.54
Low (EUR) 1.05 1.82
Average (EUR) 1.71 2.11
Latest (EUR) 1.57 1.84
Turnover (EUR 6,398,774 8,892,806
Turnover volume 3,751,374 4,213,424
SHAREHOLDERS
At the end of the reporting period on 31 December 2022 the company
had 7,734 shareholders (7,669 on 31 December 2021). Private house-
holds held 60.2% (59.2%), companies 5.3% (5.3%) and public sector
organisations 0.0% (0.0%). Foreign ownership or nominee registrations
accounted for 33.1% (33.2%) of shares.
Further information on the shares, major shareholders and manage-
ment shareholdings is available on the company’s website.
www.biohithealthcare.com/en/investors
BOARD’S PROPOSAL FOR DISTRIBUTIONS OF PROFIT
The parent company’s distributable funds (unrestricted equity) on 31
December 2022 are EUR 4,711,504.69 of which the period net profit is
EUR 934,640.55. The Board of Directors proposes to the Annual General
Meeting that no dividend be paid for the fiscal year.
AGM in 2023
Biohit Oyj’s Annual General Meeting has been planned for Wednes-
day 14th of June 2023. The Board of Directors will call the General
Meeting later.
Corporate governance statement
Biohit Oyj will release a separate Corporate Government Statement in
its internet site: www.biohithealthcare.com/investors/corporate-
governance/
Helsinki 14 February 2023
Biohit Oyj
Board of Directors
30BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
€ 1,000 Note 1 Jan - 31 Dec 2022 1 Jan - 31 Dec 2021
Revenue 2.3 10,951 9,361
Change in inventories of finished and unfinished products -16 -305
Other operating income 2.5 299 258
Materials and services 2.6 -3,823 -3,141
Expences arising from employment benefts 2.7 -3,618 -3,450
Other operating expenses 2.8 -2,184 -2,215
EBITDA 1,610 508
Depreciation and amortization 2.10 -481 -1,988
Operating profit/loss 1,129 -1,480
Financial income 2.11 92 209
Financial expenses 2.11 -352 -33
Profit/loss before taxes 868 -1,305
Income taxes 2.12 -267 -195
Profit/loss for the financial period 601 -1,500
Other items of comprehensive income
Items that may later be reclassified through profit and loss
Translation differences -31 12
Items that will not be reclassified through profit and loss
Changes in the fair value of equity instruments measured at fair value through other comprehensive income -609 74
Total comprehensive income for the period -39 -1,414
Distribution of profit/loss for the financial period
To the owners of the parent company 601 -1,500
Total 601 -1,500
Distribution of comprehensive income for the financial period
To the owners of the parent company
-39 -1,414
Total
-39 -1,414
Earnings per share calculated from earnings attributable to the owners of the parent company
Undiluted earnings per share (EUR)
2.13 0.04 -0.10
Diluted earnings per share (EUR)
2.13 0.04 -0.10
2. Consolidated Financial Statements
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
31BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
€ 1,000 Note 31 Dec 2022 31 Dec 2021
ASSETS
Non-current assets
Intangible assets 2.14 41 137
Property, plant and equipment 2.15 140 201
Right-of-use assets 2.15, 2.16 853 219
Other non-current financial assets 2.17 58 58
Deferred tax assets
2.19 22 14
Total non-current assets
1,115 629
Current assets
Inventories 2.20 920 750
Trade and other receivables 2.17, 2.21 2,753 2,720
Other current financial assets 2.17 4,105 4,413
Cash and cash equivalents 2.17, 2.18 2,122 1,102
Total non-current assets 9,900 8,984
Total assets 11,015 9,613
CONSOLIDATED BALANCE SHEET
32BIOHIT Healthcare ANNUAL REPORT 2022
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€ 1,000 Note 31 Dec 2022 31 Dec 2021
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders' equity
Share capital 2.22 2,350 2,350
Fair value reserve 2.22, 2.23 -1,701 -1,092
Invested unrestricted equity fund 2.22, 2.23 5,138 5,138
Translation differences -107 -76
Retained earnings 1,777 979
Shareholders' equity attributable to shareholders of the parent company 7,458 7,300
Total shareholders' equity 7,458 7,300
Long-term liabilities
Lease liabilities 2.16, 2.18, 2.24 686 155
Deferred tax liabilities 2.19, 2.25 2 2
Other liabilities 2.18, 2.25 8 7
Total long-term liabilities
696 164
Short-term liabilities
Trade payables
2.17, 2.25 676 577
Tax liabilities
2.17, 2.25 139 180
Short-term interest-bearing liabilities
2.16, 2.17, 2.24 257 66
Other liabilities
2.25 1,789 1,324
Total short-term liabilities 2,862 2,149
Total shareholders' equity and liabilities 11,015 9,613
33BIOHIT Healthcare ANNUAL REPORT 2022
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STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS´ EQUITY
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY
€ 1,000 Share capital
Invested
unrestricted
equity fund
Translation
differences
Fair value
reserve
Retained
earnigns
Total
shareholders'
equity
Shareholders' equity 1 January 2022 2,350 5,138 -76 -1,092 979 7,300
Share-based payments
- - - -
195 195
Adjustments of translation differences - -
- -
1 1
Total comprehensive income for the period - - -31 -609 601 -39
Shareholders’ equity 31 December 2022 2,350 5,138 -107 -1,701 1,777 7,458
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY
€ 1,000 Share capital
Invested
unrestricted
equity fund
Translation
differences
Fair value
reserve
Retained
earnigns
Total
shareholders’
equity
Shareholders' equity 1 January 2021 2,350 5,138 -88 -1,165 2,468 8,703
Share-based payments - - - - 17 17
Adjustments of translation differences - - - - -5 -5
Total comprehensive income for the period - - 12 74 -1,500 -1,414
Shareholders' equity 31 December 2021 2,350 5,138 -76 -1,092 979 7,300
34BIOHIT Healthcare ANNUAL REPORT 2022
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CONSOLIDATED CASH FLOW STATEMENT
€ 1,000 Note 2022 2021
Cash flow from operating activities
Profit/loss for the financial period 601 -1,500
Adjustments to profit for the financial period
Business activities with no payment transactions*
206 -12
Depreciation and impairment 2.10 481 1,988
Unrealised exchange rate gains and losses -2 -3
Financial income and expenses 248 -193
Income taxes 2.12 267 195
Total adjustments to income for the financial period
1,199 1,976
Change in working captial
Increase (-)/ decrease (+) in short-term interest-free trade receivables -29 -1,395
Increase (-)/ decrease (+) in inventories -165 161
Increase (+)/ decrease (-) in short-term interest-free liabilities 547 213
Total change in working capital
353 -1,021
Interest paid -106 -25
Interest received 122 120
Realised exchange rate gains and losses -9 24
Income tax paid -313 -18
Net cash flow from operating activities 1,848 -444
35BIOHIT Healthcare ANNUAL REPORT 2022
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€ 1,000 Note 2022 2021
Cash flow from investments
Investments in tangible and intangible assets -59 -33
Income from disposal of tangible and intangible assets 0 20
Investments in funds and deposits -2,900 -1,592
Profit from the sale of investments in funds and deposits 2,334 2,365
Net cash flow from investments
-625 760
Cash flow from financial activities
Repayment of lease liabilities
-186 -266
Net cash flow from financial activities
-186 -266
Change in financial assets 1,036 50
Cash and cash equivalents at the beginning of the period
1,102 1,038
Effects of changes in exchange rates
-16 13
Cash and cash equivalents at the end of the period
2,122 1,102
* Includes EUR 195 thousand option costs (year 2022)
36BIOHIT Healthcare ANNUAL REPORT 2022
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NOTES TO THE PARENT COMPANY´S FINANCIAL STATEMENTS
2.1 BASIC INFORMATION ON THE COMPANY
Biohit Oyj is a Finnish public limited company that manufactures that bind
acetaldehyde, diagnostic products and systems for diagnostic analysis for
the use of research institutions, healthcare and industry. The parent
company’s domicile is Helsinki, Finland.
A copy of the consolidated financial statements is available on the web-
site, www.biohithealthcare.com, and at the headquarters of the Group’s
parent company at Laippatie 1, Helsinki, Finland.
Biohit Oyj’s Board of Directors approved the financial statements for publi-
cation on February 14th 2022. In accordance with the Finnish Limited Liabil-
ity Companies Act, shareholders have the opportunity to approve or reject
the financial statements at the Annual General Meeting, which is to be held
after the financial statements have been published. At the Annual General
Meeting, it is also possible for a decision to be made to alter the financial
statements.
2.2 ACCOUNTING PRINCIPLES
Accounting principles
These financial statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS) endorsed by the
European Union. The IAS and IFRS standards that were valid on 31
December 2022 have been followed, as well as SIC and IFRIC interpreta-
tions. The IFRS refer to standards and interpretations thereof approved
for application in the EU in compliance with the proceedings stipulated
in Regulation (EC) 1606/2002, as referred to in the Finnish Accounting
Act and subsequent regulations. The notes to the consolidated financial
statements also comply with Finnish accounting and corporate legislation.
The consolidated financial statements have been prepared in compli-
ance with the principle of operational continuity. Despite its loss-making
financial periods, the company has succeeded in keeping its working
capital at a good level and the company believes that it is sufficient to
cover the next 12 months of operations. The company is not dependent
on external financing to guarantee operational continuity. In the assess-
ment of the company’s senior management, the company’s capacity to
continue operating is good, and there are no foreseeable events or con-
ditions that could occur individually or in combination to give major
cause to doubt the company’s ability to continue operating.
The consolidated financial statements have been prepared on the basis
of acquisition cost with the exception of equity investments recognised
at fair value through other comprehensive income and financial assets
and liabilities recognised at fair value through profit or loss. The financial
statements are presented in thousands of euros. The figures presented
in the financial statements are rounded from precise figures, so the
combined total of individual figures may differ from the total sum pre-
sented. Indicators have been calculated using precise values.
The preparation of IFRS-compliant financial statements requires the
Group management to make certain estimations and judgments when
applying the Group’s accounting policies. Information on judgements
that the management has made when applying the Group’s accounting
37BIOHIT Healthcare ANNUAL REPORT 2022
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principles and that have the most significant effect on the figures pre-
sented in the financial statements are presented under “Accounting
policies calling for judgements by the management and key sources of
estimation uncertainty”.
Presentation method
The Group’s income statement is presented as a single calculation in
which the share of the income accounted for by the Group’s ongoing
operations is presented first and income due to discontinued operations
is then presented on a single line. In the 2021 and 2022 financial periods
Biohit had no discontinued operation to present.
Consolidation principles
The consolidated financial statements include the parent company, Biohit
Oyj, and all its subsidiaries. Subsidiaries are companies over which the
Group exercises control. The Group has a controlling interest in a company
if, by being involved in the company, it is exposed to fluctuating returns
or is entitled to such fluctuating returns and it is able to influence these
returns by exercising its control over the company.
Mutual shareholdings of Group companies have been eliminated using
the acquisition cost model. Acquisition costs include transferred assets
at fair value, generated or assumed liabilities and equity-based instru-
ments that are issued. Acquired subsidiaries are consolidated from the
moment that the Group gains control over them and divested subsidiaries
are consolidated until this control ends. All internal Group business
transactions, receivables, liabilities, unrealised profits and internal profit
distribution are eliminated when preparing the consolidated financial
statements. Unrealised losses are not eliminated if the loss results
from impairment. The distribution of profits for the financial period to
the parent company’s owners and minority interest-holders is presented in
the income statement, and the minority interest-holders’ share of equity
is presented as a separate item in the balance sheet under equity. The
minority interest-holders’ share of accumulated losses is recognised in
the consolidated financial statements up to the amount of the invest-
ment. The Group has no associated companies or minority shareholders.
Subsidiaries
Subsidiaries are consolidated into the financial statements from the
moment that the Group gains control over them until this control ends.
The consolidated financial statements have been prepared using the
acquisition-cost method. The Group’s share of assets, liabilities and
contingent liabilities on the date of acquisition is recognised at fair val-
ue and the amount in excess of the fair-value acquisition cost is rec-
ognised as goodwill. If the acquisition cost of a subsidiary is less than
the value of the net assets on the date of acquisition, the difference is
recognised in the income statement. Internal Group business transac-
tions, receivables, liabilities and unrealised profits from internal sales
are eliminated in the consolidated financial statements. Unrealised losses
are also eliminated unless an internal business transaction demon-
strates that an asset has become impaired. The share of a subsidiary
owned by minority interest-holders is presented in the consolidated
balance sheet under equity, separately from shareholders’ equity. The
accounting principles applied by subsidiaries have been adapted to cor-
respond to the Group’s principles. On 31 December 2022, the company
had no goodwill on its balance sheet.
Translating items denominated in foreign currencies
The profit and financial position of the Group’s units are measured in
the currency of the main operating region of the unit in question. The
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consolidated financial statements are presented in euro, which is the
functional and presentation currency of the Group’s parent company.
Foreign currency business transactions are recorded in the functional
currency at the exchange rate on the date of transaction. Monetary
receivables and liabilities are translated at the exchange rate on the
closing date of the financial period. Non-monetary foreign currency
items have been translated into the functional currency at the exchange
rates on the transaction date. Any exchange differences arising from
translation are recognised in the income statement. Any exchange
differences arising from the translation of accounts receivable and
accounts payable within the Group are recognised as financial items,
while corresponding external items are treated as sales or purchase
adjustment items. The income statements of foreign subsidiaries have
been translated into euro at the average exchange rate for the financial
period and the balance sheets have been translated at the exchange
rate on the closing date of the financial period. The exchange difference
resulting from translating income statement items using the average
exchange rate and balance sheet items at the exchange rate on the
closing date of the financial period has been recognised as a separate
item under translation differences in equity. Exchange differences from
monetary items calculated as net investments made in foreign sub-
sidiaries are recognised as translation differences.
Business segments
Biohit’s product portfolio consists of diagnostic tests, analysis systems,
products that bind carcinogenic acetaldehyde into harmless compounds,
monoclonal antibodies and service laboratory operations. The company
classifies its entire product and service portfolio into one segment.
Segment information is provided to the most senior operative deci-
sion-making body as part of internal reporting in a consistent manner.
The Group’s Management Team is the most senior operative decision-
making body. It is responsible for allocating resources to business
segments.
Revenue recognition
The Group applies IFRS 15 Revenue from contracts with customers.
The new standard establishes a five-step model for recognizing revenue
from contracts with customers.
Revenue is recognised on a gross basis, as Biohit acts as a principal
towards customers. The transaction price is estimated separately for
each contract at the amount of consideration that Biohit is expected
to be entitled to in exchange of the goods or services transferred. The
determination of the transaction price is normally straightforward, as
Biohit’s contracts include no variable consideration such as retrospective
discounts. Biohit applies the practical expedient and therefore does not
recognise a significant financing component, i.e. does not adjust the
promised consideration for time value of money when the time between
the delivery of the promised good or service to the customer and the
payment by the customer is less than one year.
Revenue for each good or service as well as royalty from license-based
business is recognised as a distinct performance obligation, as those
are separately identifiable and Biohit’s customers can benefit from
them individually. Revenue from goods sold is recognised at a point of
time when control over them is transferred to the customer in accor-
dance with the commercial terms of delivery, i.e. when the goods leave
the warehouse in accordance with “ex-works”.
Biohit also has licensing agreement, in which Biohit fulfills the perfor-
mance obligation at one point in time. In that case, the sales revenue is
recorded in full when the license is granted to the customer. The consid-
39BIOHIT Healthcare ANNUAL REPORT 2022
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eration is then variable up to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will
not occur when the uncertainty is subsequently resolved. Biohit values
the variable consideration as an expected value that corresponds to the
sum of the amounts weighted by probabilities. The variable amount of
money is based on the management’s estimate of the annual payments
that Biohit will likely receive.
For laboratory services, Biohit considers that control is transferred
to the customer when the results of an analysis are delivered to the
customer, and revenue is recognised at a point of time. Revenue from
licence-based contracts is recognised based on a so-called subsequent
sale, i.e. on the basis of revenue generated from the sales of the licenced
goods by the customer or on the basis of the number of goods sold.
Where Biohit is unable to receive from the customer the information
regarding the amount of sales or the number of goods sold that forms
the basis for royalty income, royalty income is estimated based on his-
torical data. In the financial year 2020, royalty income is based on infor-
mation submitted by the customers.
Biohit has a contractual obligation to withdraw defective goods from
the market and replace them with new products without a separate
compensation. Costs relating to the withdrawal are accounted for in
accordance with IAS 37 Provisions, contingent liabilities and contingent
assets. The amount of costs relating to goods withdrawn has not been
material in Biohit’s business.
Biohit recognises a contract asset when the right to a consideration
is not unconditional. The asset is recognised within sales receivables
when the right to a consideration is unconditional, i.e. when only passage
of time is required before payment of the consideration is due. A contract
liability is recognised for payments received from customers for which
no goods or services have yet been delivered by Biohit.
Biohit has not incurred any significant costs to obtain the contracts,
such as sales commissions. Biohit applies a practical expedient and
recognises the incremental costs of obtaining a contract as an expense
as incurred, if the amortisation period for the related asset would be
one year or less.
Biohit applies the practical expedient and does not disclose information
about partly or completely unsatisfied performance obligations that
relate to contracts with a duration one year or less. Biohit’s contracts
with a duration of more than one year consist of distribution agree-
ments that are framework contracts by nature and do not meet the
criteria in IFRS 15 for the existence of a contract without specific
purchase orders for quantities to be delivered. In this case, future sales
relating to distribution agreements are not accounted for as unsatisfied
performance obligations, and no transaction price is allocated to them.
Public grants
Public grants are recognized according to the IAS20-standard.
Public grants are recognized as fair value when it reasonably certain
that they will be granted and that the company fulfils the requirements
for them. Public grants are accrued and recognised in the profit and
loss statement for the financial period in which the right to receive the
grant is fulfilled based on actual costs.
Product development grants e.g., Business Finland, are recognizes as
Other operating income. Cost support e.g. The State Treasury’s busi-
ness cost support is recognized as Other operating costs deductibles.
40BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Estimates made relating to revenue recognition
Biohit uses management’s estimate when recognizing sales revenue
from customer contracts that include a variable amount of money. The
variable amount of money is based on the management’s estimate of
the annual payments that Biohit will likely receive. The management
uses the customer’s previous payment behavior as the basis for the
estimate.
Property, plant and equipment
Property, plant and equipment are recognised at original acquisition
cost, less accumulated depreciation and impairments. Acquisition cost
includes the direct costs arising from acquisition. Costs that arise sub-
sequently are included in the book value of the asset or recognised
as separate assets only if it is likely that the future financial benefit
associated with the asset will benefit the Group and the acquisition cost
of the asset can be reliably determined. Other repair and maintenance
costs are recognised through profit or loss in the period during which
they have materialised.
Straight-line depreciation is applied to assets according to the estimated
useful life. No depreciation is made on land. The estimated useful lives
are as follows:
Machinery and equipment: 3–10 years
The residual value and the useful life of assets are checked in every
financial statement and, if necessary, adjusted to represent changes
that have occurred in the expectations of financial benefit. Sales gains
and losses accumulated from the disposal or transfer of tangible fixed
assets are included in other operating income or expenses.
IFRS 16 Leases
Biohit implemented IFRS 16 for the first time for the reporting period
beginning on 1 January 2019. It will result in almost all leases being
recognised on the balance sheet by lessee as the distinction between
operating and finance leases is removed.
Under the new standard, lessee recognises a right-of-use asset (the
right to use the leased item) and a lease liability to pay rentals. The
standard includes optional recognition exemptions for short-term leases
(12 months or less) and leases for which the underlying asset is of low
value. Biohit has decided to apply the optional exemptions and recog-
nises these expenses as straight-line basis over the period of the lease.
The most significant impact of adopting the standard was that Biohit
recognises new liabilities and right-of-use assets, relating to office
premises and company cars from existing lease contracts.
According to IFRS 16 -standard, the lessee’s lease period is the period
during which the lease cannot be terminated. Also, a potential extension
or termination option should be considered, if the use of such option is
estimated to be reasonable certain. The lease term for ongoing contracts
is based on estimate by Biohit’s management. Management regularly
estimates the length of those leases.
The lessee should value the lease agreement by discounting the future
lease payments to the present value at the inception of the contract.
The internal interest rate implicit in the lease is not easily available
which is why the future minimum lease payments are discounted using
Biohit’s incremental borrowing rate. According to the standard, the
incremental borrowing rate is defined as the interest that the lessee
would have to pay when borrowing for a similar term and with similar
security to obtain an asset of an equivalent value to the right-of-use
asset in similar economic environment. Biohit has determined the incre-
41BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
mental borrowing rate for leases based on the debt based financing
offers received from the 3rd party. Biohit has applied a single discount
rate to a portfolio of leases with similar characteristics.
INTANGIBLE ASSETS
Research and development expenses
Research expenditure is recognised as an expense in the balance sheet.
Development expenditure related to designing new and more advanced
products is capitalised in the balance sheet as an intangible asset when
the product can be technically realised and commercially exploited, and
the product is expected to generate a future financial benefit. Develop-
ment expenditure that has previously been recognised as an expense
cannot be capitalised at a later date. Depreciation is booked for an asset
from the time it is ready for use. No development expenditure was
capitalised on the balance sheet on 31.12.2022.
Other intangible assets
Intangible assets are only entered in the balance sheet if the acquisition
cost of the asset can be reliably determined and if it is likely that the
expected financial benefit from the asset will benefit the company. Other
intangible assets with a limited useful life are entered in the balance
sheet at original acquisition cost, and costs are booked in the income
statement based on straight-line depreciation over the course of the
known or estimated useful life of the asset. The Group has no intangible
assets with indefinite useful lives.
The depreciation periods are as follows:
Patents: 4–10 years
IT software: 3 years
Other intangible assets: 5–10 years
Impairments of tangible and intangible assets
On the closing day of each financial period, the Group assesses whether
there are indications of impairment in the value of a particular asset.
If there are such indications, the recoverable amount from the said
asset is estimated. Additionally, the recoverable amount is estimated
annually for goodwill, regardless of whether there is any indication of
impairment. The need for impairment is reviewed at the level of
cash-generating units, that is, the lowest unit level that is largely inde-
pendent of other units, and whose cash flow can be separated from
other cash flows. The discount rate used is the interest rate that is
determined before taxes and that describes the market’s view of the
time value of money and the risks incorporated in the tested asset.
The recoverable amount is the asset’s fair value, less costs arising from
transfer or a higher utility value. Value in use is the estimated future net
cash flow from the asset or cash-generating unit, which is discounted
to its present value. Impairment loss is recognised if the book value
of the asset is higher than the recoverable amount. Impairment loss
is recognised immediately in the income statement. If the impairment
loss is allocated to a cash-generating unit, it is first allocated to reduce
the goodwill of the cash-generating unit and then to reduce the other
assets of the unit pro rata. The impairment loss is cancelled if there
is a change in the conditions and the recoverable amount from the
asset has changed since the impairment loss was booked. However,
the impairment loss may not be reversed in excess of what the asset’s
book value would be without the recognition of the impairment loss.
Impairment losses recognised for goodwill are never reversed.
42BIOHIT Healthcare ANNUAL REPORT 2022
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Inventories
Inventories are measured at acquisition cost or net realisable value,
whichever is lower. The acquisition cost is determined using the FIFO
method. The acquisition cost for finished and unfinished products con-
sists of raw materials, direct labour costs, other direct costs, and the
appropriate share of manufacturing-related variable overheads and
fixed overheads at a normal level of operations. The net realisable value
is the estimated selling price in the ordinary course of business, less
the estimated costs for completing the product and costs related to
sales.
Pension obligations
In Group companies, pension cover is arranged in accordance with the
pension legislation and practices of the country in question. The pension
arrangements are defined-contribution plans. The payments related to
defined-contribution pension plans are recognised as costs in the financial
period in which they arise.
Share-based payments
In the future the Group might have incentive plans where payments
are made in the form of equity instruments. The benefits granted under
the plans are recognised at fair value on the date on which they were
granted and entered as costs evenly throughout the period during
which they were earned. The effect of the plans on profit or loss is pre-
sented under costs of employee benefits.
The cost determined on the date on which the options were granted is
based on the Group’s estimate of the number of options for which rights
are presumed to arise at the end of the incentive-earning period. The
Group updates the presumption of the final number of options on the
final day of every reporting period. Changes in estimates are treated
through profit or loss. The fair value of option plans is defined on the
basis of the Black-Scholes option pricing model. Terms that are not
market-based, such as profitability and specific growth targets, are not
taken into consideration when determining the fair value of options.
Instead, they affect the estimate of the final number of options.
When option rights are exercised, the assets obtained from share sub-
scriptions are entered into the invested unrestricted equity fund in
accordance with the terms of the plan.
Provisions
A provision is entered when the Group has, due to a past event, a legal
or factual obligation, and the obligation is likely to materialise and the
sum of the obligation can be reliably estimated. The amount to be
recognised as a provision corresponds to the best estimate of the costs
required to meet existing obligations on the closing date of the financial
period. If the time value of money has a material impact, the amount of
the provision is recognised as the present value of anticipated expenses.
Taxes based on taxable income for the period and deferred taxes
The tax expense in the income statement consists of the current tax
expense and deferred tax. The amount of tax based on the taxable profit
for the period is calculated from the taxable profit based on the appli-
cable tax rate in each country. The tax is adjusted by possible taxes
related to previous periods. Deferred taxes are calculated from all tem-
porary differences between the book value and tax base. The biggest
43BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
temporary differences arise from the depreciation of property, plant
and equipment, deferred tax assets and internal margins on inventory.
No deferred tax is recognised for non-deductible goodwill impairment
or for the undistributed profits of subsidiaries if the temporary difference
is not likely to dissolve in the foreseeable future.
Deferred tax is calculated using the tax rates enacted by the balance
sheet date. Deferred tax assets are recognised to the amount for which
it is likely that taxable profit will be generated in the future against
which the temporary difference can be utilised.
Financial Assets
Group’s financial assets are classified in the following measurement
categories: amortized cost, fair value through other comprehensive
income and fair value through profit or loss. The classification depends
on used business model for managing the financial assets and the con-
tractual terms of the cash flows. Assets are classified as current assets,
except for maturities over 12 months after balance sheet date, which
are classified as non-current assets. Purchases and sales of financial
assets are recognised on the settlement date. Financial assets are
derecognised when the rights to receive cash flows from the invest-
ments have expired or have been transferred and the Group has trans-
ferred substantially all risks and rewards of ownership.
Amortized cost category consists of cash and cash equivalents, trade
receivables and loan receivables where the business model is to hold
the asset to collect the contractual cash flows. Financial assets recognised
at amortized cost are valued using the effective interest method.
Assets at fair value through profit or loss consist of interest or equity
funds or investments into listed bonds. All gains or losses of fair value
changes investments in the category is included in financial income and
expenses.
Assets at fair value fair value through other comprehensive income
consist from equity investments to unlisted Genetic Analysis AS shares.
All fair value changes in this category are recognised in equity and any
potential future gain or loss from sale of assets will lead to transfer
between equity to retained earnings without impact to the profit and
loss statement. Dividends from equity investments are recognised at
profit and loss statement.
Financial Liabilities
Group’s financial liabilities are classified as amortized cost and mea-
sured at fair value net of transaction cost at settlement date. Financial
liabilities are subsequently measured at amortized cost using the
effective interest method. Financial liabilities at amortized cost consist
from loans from financial institutions. Financial liabilities are included
in non-current liabilities, except for items with maturities less than 12
months after the balance sheet date, which are included in current
liabilities. A financial liability is derecognised when the related obli-
gation is discharged, cancelled or expires. The group does not have any
derivative liabilities.
The fair values of other interest-bearing liabilities at amortized cost
are determined by using the discounted cash flow method employing
market interest rates at the balance sheet date.
Impairment
The credit loss is recognised based on individual assessment of
receivable. The simplified expected credit loss model is applied for
44BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
trade receivables. The impairment process is based on historical credit
loss experience combined with current conditions and forward looking
macroeconomic analysis.
Realised loss levels are adjusted based on history, so that they repre-
sent the current and future information and macroeconomic factors,
that influence the customers ability to make the payments for receiv-
ables. Financial items based on trade receivables and contracts are
recognised off the balance sheet as final credit loss., when it is not
plausible to expect to receive payment e.g. in the process of bankruptcy.
The impairment or credit loss is recognised in the consolidated state-
ment of income within other expenses.
Maturity analyses for trade receivables, movement in allowance account
and general provisioning matrix is presented at note 2.26 under section
credit risk. The Other financial assets at amortized cost consist from
cash at banks.
Concept of operating profit and loss
IAS 1 Presentation of Financial Statements does not define the concept of
operating profit. The Group has defined it as follows: operating profit or
loss is a net total that can be calculated by adding other operating income
to net sales, subtracting purchase expenses adjusted by the change
in the stock of finished and unfinished products as well as expenses
caused by production for own use, subtracting expenses from employee
benefits, depreciation and potential impairment losses, as well as other
operating expenses. All other items, including discontinued operations,
are presented beneath operating profit or loss. Exchange differences
and changes in the fair value of derivatives are included in operating
profit or loss providing they arise from business-related items. Otherwise,
they are recognised as financial items. Exchange differences related
to the Group’s internal receivables and liabilities are recognised as
financial items.
Accounting policies calling for judgements by the management
and key sources of estimation uncertainty
When preparing the financial statements, the management must make
assessments and assumptions concerning the future, and the outcome
may deviate considerably from the original assessments and assump-
tions. In addition, discretion must be used in applying the accounting
policies. Although the estimates are based on the most recent informa-
tion available, the realised values may differ from these estimates. The
most important areas in which estimates, and discretion are used are
described below.
Revenue recognisation of license agreements
If the consideration of the license agreements includes a variable
amount of money, Biohit values the amount of money as an expected
value, which corresponds to the sum of the amounts of money weighted
by probabilities. The variable amount of money is based on the manage-
ment’s estimate of the annual payments that Biohit will likely receive.
Impairment testing
The Group conducts impairment tests as required on intangible assets.
It also assesses any indication of impairment in accordance with the
aforementioned accounting policies. The recoverable amounts of
cash-generating units are measured on the basis of value-in-use calcula-
tions. Preparing these calculations requires the use of estimates.
45BIOHIT Healthcare ANNUAL REPORT 2022
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REVENUE BY MARKET AREA
€ 1,000 2022 2021
Finland 235 238
Europe, Other 4,591 4,286
North and South America 274 282
Asia 4,731 3,614
Other Countries 1,121 941
Revenue from contracts with customers total 10,951 9,361
2.3 REVENUE AND SEGMENT INFORMATION
The company’s product portfolio consists of diagnostic tests, products that
bind acetaldehyde and monoclonal antibodies. The company classifies
its entire product portfolio into one segment.
Deferred tax assets
Deferred tax assets for unused tax losses and temporary differences in
regard to recognised deferred tax assets are estimated by the Group
at least once per year to determined the likelihood of the company in
question generating sufficient taxable income before the unused tax
losses expire.
Other liabilities
Biohit uses judgement when evaluating the size of the expense provi-
sion for the subsidiary Biohit Healthcare S.r.l. The expense provision
is based on the compensation demanded by the Italian state from
suppliers of medical equipment for the budget overruns of the Italian
administrative regions in 2015-19. There is uncertainty about the size
of the actual cost effect, but since the counterparty is the Italian state,
the provision has been recorded in full under other liabilities and to
reduce turnover.
Measurement of assets at fair value fair value through
other comprehensive income where senior
managers’ judgement is required
After being listed on 1.10.2021 the Genetic Analysis AS share price is
based on the stock quote, and as follows does not require the senior
managers’ judgement anymore. Before being listed, the input data for
the valuation of Genetic Analysis AS consisted of transactions involving
the company’s shares on market terms between third parties. If there
were no third-party transactions the assessment was based on the
discounted cash-flow model based on the budgets by the management
of Genetic Analysis AS.
Application of new or amended IFRS standards
and IFRIC interpretations
Biohit will begin applying new or amended IFRS standards and inter-
pretations as of the date on which they enter into force or when they are
approved for adoption in the EU. The consolidated financial statements
were prepared in compliance with the same principles used in 2021.
No significant new standards or interpretations were introduced in 2022.
46BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
The majority of Biohit’s revenue is generated from distributor agree-
ments for diagnostic products. Biohit’s customers, i.e. the distributors,
buy and resell the products. Biohit has no post-sales rights or obli-
gations relating to the control over the products, except for a right of
return relating to some distribution agreements. The goods that are
sold include several various tests for diagnostics of diseases in the gas-
trointestinal tract, such as celiac quick test, lactose intolerance test,
Vitamin D test, GastroPanel® test for the first-line diagnosis of dyspepsia
measured on simple blood test. Furthermore, the product portfolio
includes Acetium® lozenge and Acetium capsule, which are acetalde-
hyde-binding products sold under the trademark Acetium.
In licencing agreements, Biohit transfers licensed immaterial rights to
a customer, and the customer both produces and sells the products.
Licencing agreements cover both diagnostic products and Acetium
products.
Biohit also has contracts that include both a distribution agreement and
a licensing agreement. In this case, Biohit sells to the customer finished
products and raw materials needed for production and, in addition,
receives a royalty fee based on the sale of the product. Revenue from
the sale of finished products, raw materials and royalty income from
licences are recognised as separate performance obligations. In the
case of the licensing agreement, Biohit fulfills the performance obli-
gation at one point in time. In that case, the sales revenue is recorded
in full when the licence is granted to the customer. The consideration is
then variable up to the extent that it is highly probable that a signifi-
cant reversal in the amount of cumulative revenue recognised will not
occur when the uncertainty is subsequently resolved. Biohit values
the variable consideration as an expected value that corresponds to the
sum of the amounts weighted by probabilities. The variable amount of
money is based on the management’s estimate of the annual payments
that Biohit will likely receive.
Sales to one of the most important customers is presented in note 2.27
(Related party transactions)
Contract assets and liabilities:
Biohit recognises revenue at a point of time when goods and services
are delivered. The payment terms in Biohit’s contracts with customers
vary from a payment to be made one month in advance to payment
in 60 days.
A contract liability is recognised for payments received where the goods
or services have not yet been delivered. This is the case, among others,
with countries outside Europe, where as a result of a higher credit risk
relating to customers, an advance payment is received, on the average, one
month before the delivery of the goods. The timing difference between
the receipt of the advance payment by Biohit and the delivery of the
products or the results of a service does not exceed one year.
€ 1,000 31 Dec 2022 31 Dec 2021
Contract Assets 1,200 -
Trade receivables 1,140 2,260
Contract assets and receivables total 2,340 2,260
€ 1,000 31 Dec 2022 31 Dec 2021
Contract liabilities 104 50
Contract liabilities / total 104 50
The items included in contract liabilities at the beginning of the period
have been recognised as revenue during the financial year.
47BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
2.4 ACQUIRED BUSINESSES
No new businesses were acquired in the 2021 and 2022 financial periods.
2.5 OTHER OPERATING INCOME
€ 1,000 2022 2021
Subsidies 294 238
Capital gain from property, plant and equipment - 20
Others 5 -
Total 299 258
2.6 MATERIALS AND SERVICES
€ 1,000 2022 2021
Materials. supplies and goods 2,630 2,038
External manufacturing services 1,194 1,104
Total
3,823 3,141
2.7 EXPENSES ARISING FROM EMPLOYMENT BENEFITS
€ 1,000 2022 2021
Salaries 3,083 2,916
Pension expenses – defined-contribution plans 441 431
Options and share bonuses realised and paid
in shares 199 17
Other personnel expenses 94 86
Total 3,817 3,450
Average number of Group employees in the financial period
2022 2021
Group total 45 44
Details of the employment benefits enjoyed by senior managers
are presented in note 2.27 (Related-party transactions).
2.8 OTHER OPERATING EXPENCES
€ 1,000 2022 2021
Travel expenses and other personnel expenses 212 203
Rents and maintenance expenses 139 107
Sales and marketing expenses
448 511
Other external services 1,008 1,242
Other operating expenses 376 151
Total 2,184 2,215
Other operating expenses include research and development expenses
of EUR 1,238 thousand (EUR 1,219 thousand).
2.9 AUDITORS’ FEES
€ 1,000 2022 2021
Companies belonging to the Pricewaterhouse
Coopers chain
Auditors' fees 59 54
Other services
66 60
Total fees paid to the auditor 125 114
48BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
2.10 DEPRECIATION AND IMPAIRMENT
€ 1,000 2022 2021
Intangible assets 106 1,626
Right-of-use assets 269 258
Plant and equipment
105 105
Total 481 1,988
2.11 FINANCIAL INCOME AND EXPENSES
€ 1,000 2022 2021
Financial income
Exchange rate gains from financial assets
and liabilities 20 25
Net loss on investments recognised at fair
value through profit or loss 69 69
Other financial income 3 114
Total 92 209
Financial expenses
Interest expenses on financial liabilities
Net loss on investments recognised at fair
value through profit or loss -34 -9
Exchange rate losses from financial assets
and liabilities -29 -2
Other financial expences -289 -23
Total -352 -33
Total financial income and expenses -260 175
Other financial expences mainly consists of impairment of investments.
2.12 INCOME TAXES
Direct taxes
€ 1,000 2022 2021
Tax based on taxable income for
the financial period -77 -64
Withholding tax liabilities
-204 -131
Change in deferred taxes 14 -1
Total Direct taxes -267 -195
Reconciliation of tax expenses on
the income statement
€ 1,000 2022 2021
Profit before taxes 868 -1,305
Consolidated income taxes at Group’s domestic
tax rate (20%) -174 261
Impact of different tax rates of
foreign subsidiaries 3 2
Non-deductible expenses -81 -0
Tax-exempt income 0 14
Non-creditable withholding taxes -204 -131
Effect of deferred tax assets not recognised 189 -341
Taxes on the income statement -267 -195
The group has depreciation expenses that have been entered in
accounting but not in taxation. Of these, no deferred tax assets have
been recorded.
49BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
2022 2021
Profit for the period attributable to the
owners of the parent company
(EUR thousand) 601 -1,500
Average number of shares. undiluted 15,045,593 15,045,593
Average number of shares. diluted 15,065,486 15,045,593
Earnings per share. undiluted (EUR) 0.04 -0.10
Earnings per share. diluted (EUR) 0.04 -0.10
2.13 EARNINGS PER SHARE
Undiluted earnings per share are calculated by dividing the profit
attributable to shareholders of the parent company in the financial
period by the weighted average number of shares in circulation during
the financial period.
2.14 INTANGIBLE ASSETS
2022
€ 1,000
Intangible
rights Total
Acquisition cost 1 January 2022 8,986 8,986
Increases 11 11
Acquisition cost 31 December 2022
8,997 8,997
Accumulated depreciation and impairment
1 January 2022 -8,849 -8,849
Depreciation -106 -106
Accumulated depreciation and impairment 31
December 2022 -8,955 -8,955
Book value 1 January 2022 137 137
Book value 31 December 2022 41 41
2021
€ 1,000
Intangible
rights Total
Acquisition cost 1 January 2021 8,986 8,986
Acquisition cost 31 December 2021 8,986 8,986
Accumulated depreciation and impairment
1 January 2021 -7,223 -7,223
Depreciation -1,626 -1,626
Accumulated depreciation and impairment
31 December 2021 -8,849 -8,849
Book value 1 January 2021 1,763 1,763
Book value 31 December 2021 137 137
Intangible rights consist of patents.
50BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
2.15 TANGIBLE ASSETS
2022
€ 1,000
Right-of-use
assets
Plant and
equipment Total
Acquisition cost 1 January 2022 917 1,733 2,650
Increases 904 44 948
Acquisition cost 31 December 2022
1,820 1,777 3,598
Accumulated depreciation and impairment 1 January 2022 -698 -1,532 -2,230
Depreciation -269 -105 -375
Accumulated depreciation and impairment 31 December 2022 -967 -1,637 -2,604
Book value 1 January 2022 219 201 420
Book value 31 December 2022 853 140 993
2021
€ 1,000
Right-of-use
assets
Plant and
equipment Total
Acquisition cost 1 January 2021 811 1,697 2,508
Increases
286 37 322
Decreases -180 - -180
Acquisition cost 31 December 2021 917 1,733 2,650
Accumulated depreciation and impairment 1 January 2021 -440 -1,428 -1,868
Depreciation -258 -105 -362
Accumulated depreciation and impairment 31 December 2021 -698 -1,532 -2,230
Book value 1 January 2021 371 269 640
Book value 31 December 2021 219 201 420
51BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Right-of-use assets
€ 1,000 31 Dec 2022 31 Dec 2021
Buildings 649 78
Equipment 5 14
Vehicles
199 127
Total 853 219
Depreciation charge of right-of-use assets
€ 1,000 31 Dec 2022 31 Dec 2021
Buildings 196 206
Equipment 9 22
Vehicles
65 29
Total 269 258
Amounts recognised in the income statement
€ 1,000 31 Dec 2022 31 Dec 2021
Depreciation of right-of-use assets 269 258
Expenses relating to short-term leases and leases of low value assets 14 1
Interest expenses on lease liabilities 33 6
Total 317 264
Amounts presented in the consolidated cash flow statement
€ 1,000 31 Dec 2022 31 Dec 2021
Payment of principal portion of lease liabilities 186 266
Interest expenses on lease liabilities 33 6
Total 219 271
2.16 LEASES
Below stated information is based on the leasing contracts where the Biohit Group is the lessee. The Group has committed to a lease that has not
yet to begun. The lease begins on 1 January 2023, the duration is 2 years and it is worth EUR 54 thousand in total. The previous lease has been
paid in full 31 December 2022.
52BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
The maturity analysis of lease liabilities is presented in note 2.26
(Management of financing risks).
The Group leases mainly company cars and premises. Rental contracts
are typically made for fixed periods of 12 months to 5 years but may
have extension options.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of
the following lease payments:
n
fixed payments
n
variable lease payment that are based on an index or a rate, initially
measured using the index or rate as at the commencement date
n
the exercise price of a purchase option if the group is reasonably
certain to exercise that option
Lease payments to be made under reasonably certain extension options
are also included in the measurement of the liability.
According to the standard, the incremental borrowing rate is defined
as the interest that the lessee would have to pay when borrowing for a
similar term and with similar security to obtain an asset of an equivalent
value to the right-of-use asset in similar economic environment. Biohit
has determined the incremental borrowing rate for leases based on
the debt-based financing offers received from the 3rd party. Biohit has
applied a single discount rate to a portfolio of leases with similar
characteristics.
The Group is exposed to potential future increases in variable lease
payments based on an index or rate, which are not included in the lease
liability until they take effect. When adjustments to lease payments
based on an index or rate take effect, the lease liability is reassessed
and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The
finance cost is charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of
the liability for each period.
The standard includes optional recognition exemptions for short-term
leases (12 months or less) and leases for which the underlying asset is
of low value. Biohit has decided to apply the optional exemptions and
recognises these expenses as straight-line basis over the period of the
lease.
According to IFRS 16 -standard, the lessee’s lease period is the period
during which the lease cannot be terminated. Also, a potential extension
or termination option should be considered, if the use of such option
is estimated to be reasonably certain. The lease term for ongoing con-
tracts is based on estimate by Biohit’s management. Management
regularly estimates the length of those leases.
53BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
2.17 FINANCIAL ASSETS AND LIABILITIES BY CATEGORY
The Group categorised its financial assets and liabilities into
the following categories on 31 December 2022:
Amortized cost
€ 1,000
Fair value through
profit and loss
€ 1,000
Fair value
through OCI
€ 1,000
Hierarchical
level
Non-current assets
Other non-current assets 58
Level 2
Current assets
Fund shares - 1,374 - Level 1
Investment to Genetic Analysis AS - 280 Level 1
Bonds - 2,451 - Level 2
Trade receivables 2,340 - -
Other receivables 413 - -
Cash and cash equivalents 2,122 - -
The Group categorised its financial assets and liabilities into
the following categories on 31 December 2021:
Amortized cost
€ 1,000
Fair value through
profit and loss
€ 1,000
Fair value
through OCI
€ 1,000
Hierarchical
level
Non-current assets
Other non-current assets 58
Level 2
Current assets
Fund shares - 1,117 - Level 1
Investment to Genetic Analysis AS - - 889 Level 1
Bonds - 2,407 - Level 2
Trade receivables 2,260 - -
Other receivables 460 - -
Cash and cash equivalents 1,102 - -
54BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
2.18 NET LIABILITIES
€ 1,000 2022 2021
Cash and cash equivalents 2,122 1,102
Other investments 3,825 3,523
Non-current liabilities -8 -7
Lease liabilities -943 -222
Net liabilities 4,996 4,396
Liquid assets and other financial assets 5,947 4,625
Gross liabilities - fixed interest -951 -229
Net liabilities 4,996 4,396
Other investments are short-term money market investments that are traded on active markets and that are measured at fair value through profit and loss.
The company has classified the hierarchies of financial assets
according to the availability of data on market terms and other price
data.
The fair values on level 1 of the hierarchy are based on the quoted
(unadjusted) prices of identical assets or liabilities on active markets.
The group has mainly used valuations provided by its asset manage-
ment partner as a source of price data for determining the fair value
of these instruments, and the company has verified that the price data
represents genuine, frequent market transactions involving the instru-
ments in question.
In significant part, the fair values of level 2 instruments are based on
other input data than the quoted prices included in level 1, although
this data can be obtained for the assets or liabilities in question either
directly (as a price) or indirectly (as a derivative of the price). The Group
uses generally accepted valuation models to determine the fair values
of these instruments, and the input data for these models are based in
significant part on observable market data.
The level in the fair value hierarchy at which a certain item measured
at fair value is classified overall is determined on the basis of the
significant input data on the lowest level with regard to the entire item
measured at fair value. The significance of input data is evaluated in its
entirety in relation to the item valued at fair value.
The original book value of other receivables corresponds to their fair
value because the effect of discounting is negligible view of the maturity
of the receivables.
Genetic Analysis AS was listed year 2021. The hierarchical level was
changed from level 3 to level 1. Fair value at the time was EUR 889
thousand.
Financial liabilities include trade payables EUR 676 thousand (EUR 577
thousand).
55BIOHIT Healthcare ANNUAL REPORT 2022
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2.19 DEFERRED TAXES
Deferred tax assets
€ 1,000
1 Jan 2022
Recognised
through profit
and loss
Recognised under
other items of compre-
hensive income Other adjustments 31 Dec 2022
Internal inventory margin 8 -1 - - 7
Other items 6 15 - -5 16
Total 14 14 - -5 22
Deferred tax liabilities
€ 1,000
1 Jan 2022
Recognised
through profit
and loss
Recognised under
other items of compre-
hensive income Other adjustments 31 Dec 2022
Capitalisation of tangible assets 2 1 - - 2
Financial securities measured via the fair value reserve 0 - - - 0
Total 2 1 - - 2
Deferred tax assets
€ 1,000
1 Jan 2021
Recognised
through profit
and loss
Recognised under
other items of compre-
hensive income Other adjustments 31 Dec 2021
Internal inventory margin 9 -2 - - 8
Other items 7 -1 - - 6
Total 17 -3 - - 14
Deferred tax liabilities
€ 1,000
1 Jan 2021
Recognised
through profit
and loss
Recognised under
other items of compre-
hensive income Other adjustments 31 Dec 2021
Capitalisation of tangible assets
3 -1 - - 2
Financial securities measured via the fair value reserve
0 - - - 0
Total 3 -1 - - 2
The Group has tax-deductible losses of EUR20.1million for the periods from 2012 to 2022 for which no deferred tax assets have been recognised.
In addition the group has entered R&D costs for EUR 4.7 million in accounting but not in tax deduction. No deferred tax assets has been recognised for these R&D costs.
56BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Tax losses carried forward
€ 1,000
Expiring year Losses
2022 787
2023 2,828
2024 4,241
2025 3,395
2026 2,421
2027
1,684
2028 2,247
2029
296
2030
2,188
2031
299
2032
288
2.20 INVENTORIES
€ 1,000 2022 2021
Materials and supplies 533 352
Work in progress 13 27
Finished products/goods 374 371
Total inventories 920 750
The amount of inventories recognised as an expense during the period
was EUR 56 thousand (EUR 143 thousand).
2.21 TRADE AND OTHER RECEIVABLES
Short-term receivables
€ 1,000 2022 2021
Trade receivables 1,140 2,260
Contract assets 1,200 -
Accrued income 383 434
Other receivables 30 27
Total 2,753 2,720
The age analysis of the trade receivables is presented in note 2.26
(Management of financing risks).
2.22 NOTES RELATED TO SHAREHOLDERS’ EQUITY
Biohit Oyj’s share capital is EUR2,350,350.81 (EUR 2,350,350.81) and
there are 15,045,593 (15,045,593) shares, of which 2,975,500 (2,975,500)
belong to Series A and 12,070,093 (12,070,093) belong to Series B.
Series B is listed on the stock exchange.
The shares have no nominal value. Shares in Series A and B differ from
each other in that each Series A share entitles its holder to twenty (20)
votes at general meetings, while each Series B sharecarries one (1)
vote. The dividend paid for Series B shares is, however, two (2) per cent
of the nominal value higher than that paid for Series A shares. When
this regulation is applied, the nominal value of the shares is taken to be
EUR 0.17, which was the nominal value of the company’s shares when
it decided to discontinue using nominal values for shares.
The shareholders’ equity has been paid in full.
The table for tax losses carried forward is presented below.
57BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
Description of shareholders’ equity funds:
The translation differences reserve includes the translation differences
arising when the financial statements of foreign subsidiaries and joint
ventures are translated into euros.
The invested unrestricted equity fund includes other investments
similar to shareholders’ equity and the subscription prices of shares
insofar as no specific decision is taken to recognise these under share-
holders’ equity.
The fair value reserve consists of Genetic Analysis AS stocks. Dividends
on equity investments are recognised in the income statement.
Capital management
For capital management purposes Biohit defines capital as total
equity and interest-bearing liabilities less cash and cash equivalents
and current financial investments.
The main objectives of Biohit’s capital management are to maintain a
solid overall financial position and to ensure sufficient financial flexi-
bility to implement long-term business strategy.
2.23 SHAREBASED PAYMENTS
Share-based payments terms and conditions
During the financial period 2021 Biohit Oyj established an option pro-
gramme within the framework of the share-based incentive scheme. In
accordance with the terms of the option programme, options are granted
without cash payment, but a subscription price is set for the shares. The
key terms and conditions of the incentive scheme are shown in the table
below.
Options granted during the 2021 financial period:
Scheme
I 2021
Types A, B, C,
D, E
I 2021
Types A, B,
C, D
Nature of the scheme Share options Types A, B, C, D, E
Date of granting 7 December 2021 7 December 2021
Number of instruments granted 440,000 440,000
Subscription price EUR 1.00 EUR 2.00
Share price at the time of granting EUR 1.93 EUR 1.93
Period of validity (years)
6.24 6.24
Realisation In shares In shares
Options granted during the 2022 financial period:
Scheme
I 2022
Types A, B, C,
D, E
I 2022
Types A, B,
C, D
Nature of the scheme Share options Share options
Date of granting
29 November 2022 29 November 2022
Number of instruments granted 80,000 80,000
Subscription price EUR 1.00 EUR 2.00
Share price at the time of granting EUR 1.76 EUR 1.76
Period of validity (years)
5.26 5.26
Realisation In shares In shares
For series I 2021 and I 2022 the share subscription is 1.3.2023-1.3.2028
and for series II 2021 and II 2022 1.3.2024-1.3.2028. The right to exercise
shares requires the fulfilment of specifically determined profit objec-
tives. If a option rights holders employment ends for whatever reason,
they are obligated to return those option rights whose subscription
period has not begun when the employment or management position
ceases to the Company.
58BIOHIT Healthcare ANNUAL REPORT 2022
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Options in circulation
Number of options 2022 2021
In circulation at the beginning of the financial period 880,000 -
Granted during the financial period 160,000 880,000
Forfeited -280,000 -
Options in circulation at the end of the financial period 760,000 880,000
Determining fair value
The Group uses the Black-Scholes model to determine the fair value of its option schemes.
Presumptions used to determine fair value during the 2022 financial period
Scheme I 2022 II 2022
Anticipated volatility 44.4% 44.4%
Anticipated average period of validity of options on the issue date (years) 5.26 5.26
Risk-free rate (%) 2.25% 2.25%
Fair value of the instrument defined on the date of issue (EUR) 1.05 0.68
Presumptions used to determine fair value during the 2021 financial period
Scheme I 2021 II 2021
Anticipated volatility 36.4% 36.4%
Anticipated average period of validity of options on the issue date (years) 6.24 6.24
Risk-free rate (%) 0.00% 0.00%
Fair value of the instrument defined on the date of issue (EUR) 1.09 0.65
The amount recognised as expenses is included in note 2.7 (Expenses arising from employment benefits).
59BIOHIT Healthcare ANNUAL REPORT 2022
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2.24 INTERESTBEARING LIABILITIES
Balance sheet values of interest-bearing liabilities
€ 1,000
2022 2021
Long-term interest-bearing liabilities
Lease liabilities 686 155
Total interest-bearing long-term liabilities 686 155
Short-term interest-bearing liabilities
Lease liabilities 257 66
Total interest-bearing short-term liabilities 257 66
Total interest-bearing liabilities 943 222
Covenants connected to long-term loans
There are no special covenants attached to the company’s long-term
financial lease liabilities.
Subordinated loans
The company has no subordinated loans.
2.25 TRADE PAYABLES AND OTHER LIABILITIES
Long-term interest-free liabilities
€ 1,000
2022 2021
Other long-term liabilities 8 7
Total 8 7
Short-term interest-free liabilities
€ 1,000
2022 2021
Trade payables 676 577
Other payables 250 53
Advances received 104 50
Tax liabilities 139 180
Accruals and deferred income 1,435 1,272
Total 2,604 2,132
Total interest-free liabilities 2,612 2,139
The most substantial item included in accruals and deferred income
is the deferral of employment benefits EUR 666 thousand (EUR 605
thousand).
Other payables include Biohit Healthcare S.r.l. cost accrual 250
thousand euros. This accrual has been recognised in revenue.
The Italian state is demanding ex post compensation from suppliers of
medical equipment for the budget overruns of the Italian administrative
regions in the years 2015–2019.
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Analysis of the maturities of financial liabilities in 2022
€ 1,000 <1 year 1-5 year >5 year Total
Accounts payable and other interest-free liabilities 676 - - 676
Lease contracts 276 719 - 995
Total 952 719 - 1,671
Analysis of the maturities of financial liabilities in 2021
€ 1,000 <1 year 1-5 year >5 year Total
Accounts payable and other interest-free liabilities 577 - - 577
Lease contracts 52 155 - 208
Total 630 155 0 785
2.26 MANAGEMENT OF FINANCING RISKS
Biohit’s management of financing risks focuses on analysing and mini-
mising the following financing risks:
Exchange rate risk
Exchange rate risks are associated with international business activities.
When calculated using comparable currencies, Biohit’s net revenue
not materially different to the reported values. Overall, exchange rate
changes did not significant affect the company’s profitability in the last
financial period. The company’s sales are primarily denominated in
euros and the company does not have any exchange rate hedging.
Most of the Group’s trade receivables and payables are in functional
currency of each group company and do not involve significant trans-
action risk. The Group monitors the translation risk related to Biohit
Healthcare Ltd, but the risk is not hedged.
Interest rate risk
Interest rate changes have a minor effect on Biohit’s earnings. For this
reason, the Group did not use any separate hedging against this risk in
the financial period.
Liquidity risk
Liquidity risk management aims to safeguard the Group’s finances
under all circumstances. The Group’s current financial assets on the
balance sheet date amounted to EUR 5.9 million (EUR 4.6 million).
The company also holds shares in Genetic Analysis AS worth EUR 0.3
million (EUR 0.9 million). The aim of the investment activities related to
the company’s current liquid assets is to achieve profit at very low risk
of capital loss.
The Group’s equity ratio was 68.3% (76.3%).
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Age distribution of trade receivables
€ 1,000 2022
Impairment
loss Net 2022 2021
Impairment
loss Net 2021
Not yet at maturity 800 -1 799 2,087 -1 2,085
Less than 30 days overdue 101 0 101 83 0 83
30–60 days overdue 89 -5 85 40 0 39
61–90 days overdue 64 -5 59 29 -1 28
More than 90 days overdue 100 -3 98 26 0 25
Total 1,155 -14 1,140 2,264 -4 2,260
The impairment loss is calculated on the basis of historical data and is based on the payment behavior of Biohit’s customers in previous years.
EUR 10 thousand was recognised in credit losses for 2022.
EUR 5 thousand was recognised in credit losses for 2021, but simultaneously 19 thousand of previously recognised credit losses were returned.
Commodity risk
The company is not using derivatives to hedge against commodity risks
because the company is not exposed to commodity risks by virtue of the
nature of its business.
Credit and counterparty risk
The business units are responsible for the credit risks connected to
their trade receivables, and they have evaluated the risk of credit losses
for each customer.
Biohit’s customer base primarily consists of solvent companies. As
such, Biohit’s risk of credit losses cannot be considered significant. The
company has not used credit insurance. The majority of customer
relationships are long-term in nature and business relations are active,
so the company will become aware of changes in customers’ credit-
worthiness at an early stage.
The investment portfolio consists of direct corporate bond loans, struc-
tured products, corporate loan funds, money market funds and cash in
bank accounts. Some of the products in the investment portfolio are
listed, while others are not. Sufficient diversification of investments
between asset categories, investment instruments and counterparties
is essential. The company uses at least two partners in its investment
activities. Approximately 35% of the investment portfolio is cash, low-
risk money market fund investments and investment-grade invest-
ments. Approximately 50% of the portfolio is investments rated BB-B,
while investments without credit ratings account for 15%.
On 31 December 2022, trade receivables totalled EUR 1.1 million
(EUR 2.3 million).
The maximum amount of credit risk is the book value of the trade
receivables.
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Equity ratio
€ 1,000 2022 2021
Total shareholders' equity 7,458 7,300
Balance sheet total 11,015 9,613
Advances received
-104 -50
Equity ratio 68.3% 76.3%
Capital structure management
The equity ratio – an indicator of the company’s capital structure – is calculated by dividing the Group’s equity by the balance sheet total less
advances received. The result of this calculation is then multiplied by one hundred.
2.27 RELATEDPARTY TRANSACTIONS
Parties are considered to be related parties if one of the parties is able to exercise control or considerable influence over the other’s decision-making
related to finances and business The Group’s related parties include the members of the Board of Directors and the Group Management Team, as
well as the President & CEO. In addition the Group’s related parties include Biohit HealthCare (Hefei) Co. Ltd and subsidiaries.
Management remuneration 2022
€ 1,000
Salaries and other short-
term employment benefits
Post-employment and
termination benefits
Share-based
remuneration
Parent company
Management teams 579 108 152
President & CEO 197 37 26
Members of the scientific advisory board 129 - -
Management remuneration 2021
€ 1,000
Salaries and other short-
term employment benefits
Post-employment and
termination benefits
Share-based
remuneration
Parent company
Management teams 455 80 14
President & CEO 187 33 2
Members of the scientific advisory board 197 - -
63BIOHIT Healthcare ANNUAL REPORT 2022
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Share-based remuneration includes expenses recorded for the share-based incentive option programme.
Osmo Suovaniemi has been employed by the company as a member of the scientific advisory board by the Board of Directors’ decision. The com-
pensation, including fringe benefits,is EUR129 thousand (EUR197thousand) “In addition, the members of the scientific advisory board are paid an
hourly compensation of 85 euros for work outside the advisory board. Will be paid 85 EUR per hour for the work outside the scientific advisory board.”
Market-based long term loans of EUR 57 thousand (EUR 57 thousand) have been granted to group management team members.
Loan interest rate is 12-month Euribor plus 0.3%. Interest is paid annually in arrears.
Loan period is five years. The borrower is entitled to pay back loan early.
Subsidiaries
Management remuneration 2022
€ 1,000
Salaries and other short-
term employment benefits
Post-employment and
termination benefits
Share-based
remuneration
Managing Directors 177 17 21
Management remuneration 2021
€ 1,000
Salaries and other short-
term employment benefits
Post-employment and
termination benefits
Share-based
remuneration
Managing Directors 128 13 2
Board of Directors’ remuneration
€ 1,000 2022 2021
Parent company
Lea Paloheimo Chairman 8 15
Eero Lehti Member 3 11
Osmo Suovaniemi Member 8 15
Franco Aiolfi Member 18 11
Matti Härkönen Member 3 15
Liu Feng Member 5 12
Kalle Härkönen Member 5 -
Timo Joensuu Member - 12
Total board remuneration 48 90
Liu Feng is the owner of Biohit HealthCare (Hefei) Co. Ltd, and he exercises control over the company.
On 31 December 2022, the members of the Board of Directors and President & CEO owned a total of 2,868,310 Series A shares and 4,236,748
Series B shares, either directly or through companies under their control. These correspond to 47.2% of all of the shares in the company and 86.1%
of all of the votes.
64BIOHIT Healthcare ANNUAL REPORT 2022
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The Group’s parent company and subsidiaries
Parent company Biohit Oyj, Finland
Group
ownership
Biohit Healthcare Ltd, United Kingdom 100%
Biohit Healthcare S.r.l., Italy 100%
Sales of goods and licenses to related party companies
€ 1,000 2022 2021
Sales of goods
Biohit HealthCare (Hefei) Co. Ltd 2,283 2,150
License sales
Biohit HealthCare (Hefei) Co. Ltd 2,205 1,300
Total 4,488 3,450
Trd rcivbls nd othr rcivbls from rltd prty compnis
€ 1,000 2022 2021
Trade receivables
Biohit HealthCare (Hefei) Co. Ltd - 1,500
Contract assets
Biohit HealthCare (Hefei) Co. Ltd 1,200 -
Total 1,200 1,500
Biohit HealthCare (Hefei) Co. Ltd owns 32.87 percent of Biohit’s shares.
Biohit and Biohit HealthCare (Hefei) Co. Ltd have signed a distribution
agreement in 2022. Based on the agreement Hefei has pledged to
Biohit 1.5 million Biohit series B shares (EUR 2.4 million) as security
for its obligations under the agreement.
Other operating expenses
€ 1,000 2022 2021
Consultancy. administration and logistics
fees (companies under the control of
members of the Board of Directors)
Euroclone S.p.A. Franco Aiolfi 70 -
BioBrick S.p.A. Franco Aiolfi - 69
BioAir S.p.A. Franco Aiolfi - 13
Oy Tech Know Ltd. Matti Härkönen 4 48
Total 74 130
2.28 COLLATERAL AND CONTINGENT LIABILITIES
€ 1,000 2022 2021
Collateral pledged on the
company’s own behalf
Guarantees 4 4
Total collateral and contingent liabilities 4 4
2.29 EVENTS AFTER THE FINANCIAL PERIOD
The company’s management is not aware of material events since the
balance sheet date.
65BIOHIT Healthcare ANNUAL REPORT 2022
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IFRS IFRS IFRS IFRS IFRS
2018 2019 2020 2021 2022
Revenue € 1,000 9,931 10,052 7,123 9,361 10,951
Change in revenue % 10.6% 1.2% -29.1% 31.4% 17.0%
Operating profit/loss € 1,000 -1,965 -1,412 -3,174 -1,480 1,129
Proportion of revenue (%) -19.8% -14.0% -44.6% -15.8% 10.3%
Profit/loss before extraordinary items and taxes € 1,000 -2,024 -1,227 -3,261 -1,305 869
Proportion of revenue (%) -20.4% -12.2% -45.8% -13.9% 7.9%
Profit/loss before taxes € 1,000 -2,024 -1,227 -3,261 -1,305 602
Proportion of revenue (%) -20.4% -12.2% -45.8% -13.9% 5.5%
Return on equity (%) -12.9% -9.3% -28.5% -18.7% 8.1%
Return on investments (%) -10.9% -8.0% -25.8% -15.3% 15.3%
Equity ratio (%) 89.2% 83.9% 80.8% 76.3% 68.3%
Investments in fixed assets € 1,000 13 48 15 37 55
Proportion of revenue (%) 0.1% 0.5% 0.2% 0.4% 0.5%
Research and development expenditure € 1,000 1,290 1,232 1,043 1,219 1,237
Proportion of revenue (%) 13.0% 12.3% 14.6% 13.0% 11.3%
Balance sheet total € 1,000 17,887 17,372 10,777 9,613 11,015
Average number of personnel 50 46 45 44 45
3. Key Indicators
3.1 INDICATORS OF FINANCIAL TRENDS
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IFRS IFRS IFRS IFRS IFRS
2018 2019 2020 2021 2022
Earnings per share, undiluted (EUR) -0.14 -0.09 -0.22 -0.10 0.04
Shareholders' equity attributable to the owners of the parent company (EUR per share) 1.06 0.97 0.58 0.49 0.50
Price-to-earnings ratio (P/E) -21.1 -37.3 -11.3 -18.5 39.3
Series B share price trend (EUR)
- average 2.99 2.56 2.11 1.71
- low 2.10 1.90 1.82 1.05
- high 3.70 4.30 2.54 2.15
- price 31 December 3.36 2.48 1.84 1.57
Market capitalisation EUR 1,000
(presuming the same market value for Series A shares as for Series B shares) 44,258 50,553 37,313 27,609 23,622
Turnover of Series B shares (thousands) 8,616 3,362 5,518 4,213 3,751
- proportion of the total (%) 71.9% 27.9% 45.7% 34.9% 31.1%
Average ex-rights adjusted number of shares 14,901,904 15,005,253 15,045,593 15,045,593 15,045,593
- taking into consideration the diluting effect of options and convertible bonds 15,015,256 15,005,253 15,045,593 15,045,593 15,065,486
Ex-rights adjusted number of shares at the end of the financial period 14,952,041 15,045,593 15,045,593 15,045,593 15,045,593
- taking into consideration the diluting effect of options and convertible bonds 15,065,593 15,045,593 15,045,593 15,045,593 15,065,486
3.2 SHARESPECIFIC INDICATORS
The company has had options that had a dilutive effect in previous financial years. As the company was loss making, no dilutive effect has been presented.
67BIOHIT Healthcare ANNUAL REPORT 2022
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4. Share and Shareholders
4.1 FINAL MARKET VALUES OF SHARES
4.2 SHARES AND SHAREHOLDERS
Shareholdings by owner group 31 December 2022
Series A shares
Number
of owners
shares %
Number of
shares %
1. Companies 2 22.2 874,990 29.4
2. Households 7 77.8 2,100,510 70.6
Shares on the waiting list 0.0
Total number of Series A shares 9 100.0 2,975,500 100.0
Series B shares
Number
of owners
shares %
Number of
shares %
1. Households 7,487 96.9 6,959,917 57.7
2. Financial and insurance institutions 6 0.1 39,083 0.3
3. Companies and housing companies 191 2.5 764,611 6.3
4. Non-profit organisations 6 0.1 2,761 0.0
5. Public corporations 0 0.0 0 0.0
6. Nominees and foreign owners 35 0.5 4,298,129 35.6
In joint and clearing accounts 0 0.0 5,592 0.0
Total number of Series B shares 7,725 100.0 12,070,093 100.0
Total number of Series A and Series B shares 7,734 15,045,593
68BIOHIT Healthcare ANNUAL REPORT 2022
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Series A shares
Number of
owners shares %
Number of
shares %
1–1,000 0 0.0 0 0.0
1,001–10,000 5 55.6 25,000 0.8
10,001–100,000 2 22.2 82,190 2.8
More than 100,001 2 22.2 2,868,310 96.4
Total number of Series A shares 9 100.0 2,975,500 100.0
Series B shares
Number of
owners shares %
Number of
shares %
1–1,000 6,635 85.9 1,585,286 13.1
1,001–10,000 963 12.5 2,752,463 22.8
10,001–100,000 124 1.6 3,061,903 25.4
More than 100,001 3 0.0 4,664,849 38.6
Shares in joint and clearing accounts 0 0.0 5,592 0.0
Total number of Series B shares 7,725 100.0 12,070,093 100.0
Total number of Series A and Series B shares 7,734 15,045,593
69BIOHIT Healthcare ANNUAL REPORT 2022
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Largest registered shareholders 31 December 2022
10 largest owners in terms of the number of shares Series A shares Series B shares Total number of shares %
Biohit Healthcare (Hefei) Co., Ltd. 850,000 4,095,415 4,945,415 32.9
Suovaniemi Osmo Antero 2,018,310 0 2,018,310 13.4
Härkönen Matti 57,200 267,965 325,165 2.2
Interlab Oy 0 130,000 130,000 0.9
Suovaniemi Vesa Jukka Markku 0 85,353 85,353 0.6
Syrjälä Pekka 0 77,650 77,650 0.5
Jaakkola Sami Juhani 0 76,600 76,600 0.5
Virkkala Juha Jarkko 0 70,500 70,500 0.5
Ruusila Ari Tapio 0 70,000 70,000 0.5
Oy Tech Know Ltd 24,990 43,600 68,590 0.5
10 largest owners in terms of the number of votes Series A shares Series B shares Total number of shares %
Suovaniemi Osmo Antero 2,018,310 0 40,366,200 56.4
Biohit Healthcare (Hefei) Co.. Ltd. 850,000 4,095,415 21,095,415 29.5
Härkönen Matti 57,200 267,965 1,411,965 2.0
Oy Tech Know Ltd 24,990 43,600 543,400 0.8
Luostarinen Reijo 10,000 14,460 214,460 0.3
Interlab Oy 0 130,000 130,000 0.2
Suovaniemi Vesa Jukka Markku 0 85,353 85,353 0.1
Syrjälä Pekka 0 77,650 77,650 0.1
Jaakkola Sami Juhani 0 76,600 76,600 0.1
Virkkala Juha Jarkko 0 70,500 70,500 0.1
Senior management ownership 31 December 2022
On 31 December 2022, the members of the Board of Directors and President & CEO owned a total of 2,868,310 Series A shares and 4,236,748 Series
B shares, either directly or through companies under their control. These correspond to 47.2% of all of the shares in the company and 86.1% of all
of the votes.
70BIOHIT Healthcare ANNUAL REPORT 2022
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5. Formulae For Calculating Key Indicators
Return on equity, %
profit/loss for the financial period
x 100
shareholders’ equity (average for the year)
Return on investments, %
profit before extraordinary items + interest and other financial expenses
x 100
balance sheet total - interest-free liabilities (average for the year)
Equity ratio, %
shareholders’ equity on the balance sheet
x 100
balance sheet total - advances received
Earnings per share (EUR)
profit/loss for the financial period
average number of ex-rights shares during the period
Shareholders’ equity per share (EUR)
shareholders' equity on the balance sheet
number of shares on the balance sheet date
Dividend per share
dividend distributed for the financial period
number of shares on the balance sheet date
Dividend payout ratio, %
dividend per share
x 100
earnings per share
Effective dividend yield , %
dividend per share
last transaction rate in the financial period
Price-to-earnings ratio (P/E)
last transaction rate in the financial period
earnings per share
The new instructions issued by the European Securities and Markets
Authority (ESMA) on Alternative Performance Measures (APMs) took effect
for the 2016 financial period. In conjunction with the transition to an income
statement model based on expense types, Biohit will present APMs to
describe the financial development of its business and improve compara-
bility between different periods. APMs should not be considered substitutes
for the key indicators specified in the IFRS norms for financial statements.
The operational key indicators have been adjusted for certain measurement
items that do not constitute part of ordinary business activities or that do not
affect cash flow during the period but that affect comparability. The items
that affect comparability and the APMs used by Biohit Oyj are defined as follows.
Items that affect comparability:
Certain business transactions that do not constitute part of ordinary business
activities or measurement items that do not affect cash flow but that have a
significant effect on the income statement for the period have been adjusted for
items that affect comparability. These items arise through non-recurring trans-
actions such as:
n
Asset impairments
n
Asset sales or purchases
n
Expense entries for benefits in accordance with IFRS 2
In addition, Biohit Oyj presents the following APMs:
n
EBITDA (EUR) = operating profit + depreciation and impairment
n
Operative EBITDA (EUR) = operating profit + depreciation, impairment -
items affecting comparability
n
Free cash flow (FCF) (EUR) = Cash flow from operating activities -
Investments and tangible and intangible assets + Revenue from
disposal of tangible and intangible assets
71BIOHIT Healthcare ANNUAL REPORT 2022
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PARENT COMPANY’S INCOME STATEMENT (FAS)
€ 1,000 Note 1 Jan - 31 Dec 2022 1 Jan - 31 Dec 2021
Revenue 6.2 7,811 6,361
Change in inventories of finished and unfinished products -1 -221
Other operating income 6.3 749 598
Materials and services 6.4 -2,380 -1,836
Expenses arising from employment benefts 6.5 -2,765 -2,844
Other operating expenses 6.6 -1,894 -2,031
EBITDA 1,519 28
Depreciation and amortization 6.7 -142 -1,658
Operating profit/loss 1,377 -1,629
Financial income and expences 6.9 -238 167
Profit/loss before taxes 1,138 -1,462
Withholding taxes 6.10 -204 -131
Profit/loss for the financial period 935 -1,593
6. Parent Company´s Financial Statement
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€ 1,000 Note 31 Dec 2022 31 Dec 2021
Assets
Non-current assets
Intangible assets 6.11 18 42
Tangible assets 6.12 154 221
Investments
Shares in Group companies 6.13 31 31
Other investments 6.13 2 2
Total fixed assets 203 296
Current assets
Inventories 6.14 742 548
Long-term receivables 6.15 212 57
Short-term receivables 6.15 2,204 2,463
Financial securities 6.16 4,079 4,386
Cash at bank and in hand
6.17
1,409 528
Total current assets 8,646 7,982
Total Assets 8,849 8,278
€ 1,000 Note 31 Dec 2022 31 Dec 2021
Liabilities and shareholders’ equity
Shareholders’ equity
Share capital 6.18 2,350 2,350
Fair value reserve 6.18 -1,701 -1,092
Invested unrestricted equity found 6.18 4,042 4,042
Retained earnings 6.18 1,435 3,028
Profit/loss for the financial period 6.18 935 -1,593
Total shareholders’ equity Liabilities 7,062 6,736
Liabilities
Long-term liabilities 6.19 - -
Short-term liabilities
6.21 1,787 1,542
Total liabilities 1,787 1,542
Total liabilities and shareholders’ equity 8,849 8,278
PARENT COMPANY’S BALANCE SHEET (FAS)
73BIOHIT Healthcare ANNUAL REPORT 2022
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€ 1,000 Note 2022 2021
Cash flow from operating activities:
Profit/loss before appropriations and taxes
1,138 -1,462
Adjustments:
Planned depreciation 142 1,658
Unrealised exchange rate gains and losses -2 -3
Other income and expenses unconnected to payment 16 -66
Financial income and expenses 238 -167
Change in working capital:
Increase (-)/decrease (+) in short-term interest-free trade receivables -4 -1,183
Increase (-)/decrease (+) in inventories -194 84
Increase (+)/decrease (-) in short-term interest-free liabilities 291 183
Interest paid and payments on other operating financial expenses -104 -23
Dividends received 1
1
Income and interest received from business activities 124 133
Paid direct taxes
-237
-
Cash flow from operating activities 1,409 -847
Cash flow from investments:
Investments in tangible and intangible assets -55 -31
Investments in other instruments -2,900 -1,577
Revenue from disposal of other investments 2,334 2,365
Loans 100 -
Cash flow from investments -521 757
Cash flow from financing activities:
Repayment of long-term loans -8 -17
Cash flow from financing activities -8 -17
Increase (+)/decrease (-) in cash and cash equivalents 881 -107
Cash and cash equivalents at the beginning of the period 528 636
Cash and cash equivalents at the end of the period 6.17 1,409 528
PARENT COMPANY’S CASH FLOW STATEMENT
74BIOHIT Healthcare ANNUAL REPORT 2022
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NOTES TO PARENT THE COMPANY´S FINANCIAL STATEMENT
6.1 ACCOUNTING PRINCIPLES
When preparing the financial statements in accordance with good
accounting practices, the company’s senior managers are called upon
to make make estimates and assumptions that affect the content of the
financial statements. The outcomes may differ from these estimates.
The parent company’s financial statements have been prepared
in accordance with the Finnish Accounting Act.
The financial statements present figures in thousands of euros based
on the original values of business transactions, with the exception of
financial securities, a component of current assets, which are measured
at fair value.
Valuation of property, plant and equipment
Property, plant and equipment are recognised on the balance sheet at
acquisition cost, less received contributions, planned depreciation and
impairments. Planned depreciation is calculated using a straight-
line model based on the useful life of the asset.
The planned depreciation periods are as follows:
Intangible rights 3 -10 years
Other long-term expenses 5 - 10 years
Plant and equipment 3 -10 years
Valuation on inventories
Inventories are presented in accordance with the FIFO principle at
acquisition cost or replacement cost or likely sale price, whichever is
lower. The acquisition cost of inventories includes variable costs as
well as the allotted proportion of the fixed expenses of purchasing and
manufacturing.
Valuation of financial securities
Financial securities, which belong to current assets, are measured at
fair value in accordance with section 5.2a§ of the Finnish Accounting
Act. The fair fair value of investments is determined based on price quo-
tations on active markets, i.e., the buy quotation on the closing date of
the financial period. Unrealised profits and losses due to changes in the
fair value of money market investments are recognised in the income
statement under financial income and expenses in accordance with the
Group’s updated accounting policies.
Investments recognised via the fair value reserve consist solely of the
equity investment in the unlisted shares in Genetic Analysis AS.
Genetic Analysis AS was listed on the Spotlight Stock Market in
Stockholm on 1 October 2021. Despite being traded in Sweden, the
Genetic Analysis AS shares are listed in Norwegian krone. The valuation
is consistent with the accounting principles of the Group.
75BIOHIT Healthcare ANNUAL REPORT 2022
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6.2 REVENUE BY BUSINESS SECTOR
€ 1,000 2022 2021
Diagnostics 7,811 6,361
Total 7,811 6,361
REVENUE BY MARKET AREA
€ 1,000 2022 2021
Finland 235 238
Europe, other 1,453 1,290
North and South America 271 280
Asia 4,731 3,612
Other countries 1,121 941
Total 7,811 6,361
6.3 OTHER OPERATING INCOME
€ 1,000 2022 2021
From Group companies 455 340
Grants 294 238
Gains from sales of fixed assets - 20
Total 749 598
Research and development expenditure
Research expenses are recognised as annual expenses in the year in
which they were incurred.
Principle for revenue recognition
When calculating net sales, indirect sales taxes and discounts are
deducted from sales revenues. Sales of work performances are recognised
when they are handed over.
Maintenance and repairs
Maintenance and repair expenses are recognised as expenses for the
financial period.
Pensions
The company’s statutory pension cover and any applicable additional
benefits is insured by a pension insurance company. Pension expenses
are recognised on the basis of work performed by employees during
working hours.
Deferred taxes
No deferred taxes have been recognised on the balance sheet. In accor-
dance with general guidelines issued by the Accounting Board on 12
September 2006, the amounts of deferred taxes that must be entered
into the balance sheet are presented in the notes, along with the
amounts of tax liabilities and assets that should not be entered into the
balance sheet because they are unlikely to be realised.
Items denominated in foreign currencies
Receivables and liabilities in foreign currencies have been translated
into euros at the exchange rate quoted by the European Central Bank on
the balance sheet date. Translation differences have been recognised
through profit and loss.
76BIOHIT Healthcare ANNUAL REPORT 2022
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6.5 PERSONNEL EXPENSES AND NUMBER OF PERSONNEL
€ 1,000 2022 2021
Salaries 2,339 2,421
Pension expenses 380 373
Other personnel expenses 46 49
Total personnel expenses 2,765 2,844
In the financial period, the parent company employed an average of
2022 2021
Office personnel 36 35
Average number of personnel 36 35
Number of personnel at the end of
the financial period
34 32
6.6 OTHER OPERATING EXPENSES
€ 1,000 2022 2021
Travel expenses and other
personnel expenses 150 168
Rents and maintenance expenses 286 304
Sales and marketing expenses 246 405
Other external services 693 992
Change in value of trade receivables 16 -66
Other operating expenses 502 228
Total 1,894 2,031
6.7 DEPRECIATION AND IMPAIRMENT
€ 1,000 2022 2021
Intangible assets 35 1,554
Plant and equipment 107 103
Total 142 1,658
6.8 AUDITORS’ FEES
€ 1,000 2022 2021
Companies belonging to the
PricewaterhouseCoopers chain
Auditors' fees 70 65
Other services - -
Total fees paid to the auditor 70 65
6.4 MATERIALS AND SERVICES
€ 1,000 2022 2021
Purchases during the financial period 2,576 1,972
Change in inventories -196 -137
Total materials and supplies 2,380 1,836
Total materials and services 2,380 1,836
77BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
6.9 FINANCIAL INCOME AND EXPENSES
€ 1,000 2022 2021
Dividend income
From Group companies 1 1
Total dividend income 1 1
Other interest and financial income
From Group companies 5 6
From others 71 184
Other interest and financial income 76 190
Total financial income 77 191
Interest expenses and otherfinancial expenses financial expenses
To Group companies - -
To others -315 -23
Total financial expenses -315 -23
Total financial income and expenses -238 167
Financial income and expenses include foreign exchange gains/losses (net) -29 -1
6.10 INCOME TAXES
€ 1,000 2022 2021
Withholding tax -204 -131
Total -204 -131
The items above operating profit include foreign exchange losses/gains (net) or EUR 20 thousand (EUR 24 thousand)
78BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
6.11 INTANGIBLE ASSETS
2022
€ 1,000
Intangible
rights
Total
Acquisition cost at the beginning of the financial period 7,942 7,942
Increases 11 11
Acquisition cost at the end of the financial period 7,952 7,952
Accumulated depreciation and impairment in the financial period -7,899 -7,899
Depreciation and impairment in the financial period -35 -35
Accumultd dprcition t th nd of th finncil priod -7,934 -7,934
Book value at the beginning of the financial period 42 42
Book value at the end of the financial period 18 18
2021
€ 1,000
Intangible
rights
Total
Acquisition cost at the beginning of the financial period 7,942 7,942
Acquisition cost at the end of the financial period 7,942 7,942
Accumulated depreciation and impairment in the financial period -6,345 -6,345
Depreciation and impairment in the financial period -1,554 -1,554
Accumulated depreciation at the end of the financial period -7,899 -7,899
Book value at the beginning of the financial period 1,597 1,597
Book value at the end of the financial period 42 42
79BIOHIT Healthcare ANNUAL REPORT 2022
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6.12 TANGIBLE ASSETS
2022
€ 1,000
Plant and
equipment Total
Acquisition cost at the beginning ofthe financial period 1,602 1,602
Increases 39 39
Acquisition cost at the end of the financial period 1,641 1,641
Accumulated depreciation and impairment in the financial period -1,381 -1,381
Depreciation in the financial period
-107 -107
Accumulated depreciation at the end of the financial period -1,488 -1,488
Book value at the beginning of the financial period 221 221
Book value at the end of the financial period 154 154
2021
€ 1,000
Plant and
equipment Total
Acquisition cost at the beginning of the financial period 1,566 1,566
Increases 36 36
Acquisition cost at the end of the financial period
1,602 1,602
Accumulated depreciation and impairment in the financial period -1,278 -1,278
Depreciation in the financial period
-103 -103
Accumulated depreciation at the end of the financial period
-1,381 -1,381
Book value at the beginning of the financial period 289 289
Book value at the end of the financial period 221 221
6.13 INVESTMENTS
Shares 2022
€ 1,000
Group
companies
Others Total
Book value at the beginning of the financial period 31 2 32
Book value at the end of the financial period 31 2 32
Shares 2021
€ 1,000
Group
companies
Others Total
Book value at the beginning of the financial period 31 2 32
Book value at the end of the financial period 31 2 32
80BIOHIT Healthcare ANNUAL REPORT 2022
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6.15 RECEIVABLES
€ 1,000 2022 2021
Long-term receivables
Other receivables
Loan receivables 212 57
Total non-current receivables 212 57
Short-term receivables
Receivables from Group companies
Trade receivables 237 128
Loan receivables - 255
Accrued income - -
Other receivables
Trade receivables 1,590 1,660
Other receivables 178 225
Accrued income 199 195
Total curret receivables 2,204 2,463
6.14 INVENTORIES
€ 1,000 2022 2021
Materials and supplies 533 351
Work in progress 13 27
Finished products/goods 196 169
Total inventories 742 548
81BIOHIT Healthcare ANNUAL REPORT 2022
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6.16 FINANCIAL SECURITIES
Assets measured at fair value
€ 1,000 2022 Level 1 Level 2
Traded securities and investment to Genetic Analysis AS * 4,079 1,654 2,425
* Genetic Analysis AS 280 thousand euros on level 1
Assets measured at fair value
€ 1,000 2021 Level 1 Level 2
Traded securities and investment to Genetic Analysis AS * 4,386 2,006 2,380
* Genetic Analysis AS 889 thousand euros on level 1
Financial securities consist of fixed-income investments, corporate loans and money market investments.
The hierarchy levels are described in the Group’s note 2.17
6.17 CASH AND CASH EQUIVALENTS
€ 1,000 2022 2021
Cash in hand and at bank 1,409 528
82BIOHIT Healthcare ANNUAL REPORT 2022
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6.18 SHAREHOLDERS’ EQUITY
€ 1,000 2022 2021
Share capital 1 January 2,350 2,350
Share capital 31 December 2,350 2,350
Fair value reserve 1 January -1,092 -1,165
Increases - 74
Decreases -609 -
Fair value reserve 31 December -1,701 -1,092
Invested unrestricted equity fund 1 January 4,042 4,042
Invested unrestricted equity fund 31 December 4,042 4,042
Retained earnings 1 January 1,435 3,028
Retained earnings 31 December 1,435 3,028
Reported profit/loss for the financial period 935 -1,593
Total shareholders' equity 7,062 6,736
Shares and voting rights
Biohit’s shares are divided into Series A and Series B shares. The series from each other in that each Series A share entitles its holder to twenty
(20) votes at general meetings, while each Series B share carries one (1) vote. The dividend The dividend paid for Series B shares is, however, two
(2) per cent of the nominal value higher than that paid for Series A shares. When this regulation is applied, the nominal value of the shares is taken
to be EUR 0.17, which was the nominal value of the company’s shares when it decided to discontinue using nominal values for shares.
83BIOHIT Healthcare ANNUAL REPORT 2022
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Calculation of distributable equity 31 December
€ 1,000 2022 2021
Retained earnings 1,435 3,028
Profit/loss for the financial period 935 -1,593
Invested unrestricted equity fund 4,042 4,042
Fair value reserve -1,701 -1,092
Government granted cost support - -190
Total 4,712 4,196
Parent company’s share capital structure
2022
shares
%
of shares
%
of votes
2021
shares
Series A shares (20 votes per share) 2,975,500 19.8 83.1 2,975,500
Series B shares (1 vote per share) 12,070,093 80.2 16.9 12,070,093
Total 15,045,593 100.0 100.0 15,045,593
6.19 LONGTERM LIABILITIES
€ 1,000 2022 2021
Loans from Group companies - -
Loans from financial institutions - -
From others
- -
Total - -
The company’s share capital is EUR 2,350,350.81. The company does not hold any of its own shares. Based on a resolution of the AGM held on
16 September 2020, the Board of the company is authorised to decide on the issue of shares and to issue the special rights referred to in Chapter 10
of the Limited Liability Companies Act so that the maximum number of new Series B shares to be issued pursuant to the special rights is 3,000,000,
which corresponds to approximately 24.9% of all of the company’s Series B shares. In 2021, the company issued shares options for 880,000 new
shares.
84BIOHIT Healthcare ANNUAL REPORT 2022
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6.21 SHORTTERM LIABILITIES
€ 1,000 2022 2021
Loans from financial institutions.
current proportion 0 8
Advances received 104 50
Trade payables 506 358
Accruals and deferred income 834 804
Other liabilities 343 323
Total short-term liabilities 1,787 1,542
6.22 PLEDGES, CONTINGENT LIABILITIES AND OTHER LIABILITIES
€ 1,000 2022 2021
Debts for which mortgages have
been pledged
The company has not pledged
any collateral.
Leasing commitments
Payable in the next financial period 62 24
Payable later 120 62
Total 182 87
Rental commitments
Payable in the next financial period 181 90
Payable later
724 724
Total 905 814
Other contingent liabilities
Guarantees 4 4
6.20 DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax liabilities
There are no deferred tax liabilities.
Deferred tax assets
The tax-deductible losses have not been noted in the balance sheet.
There is a total of EUR19.9million loss in Finland (Year 2012-2020:
EUR19.9million)
The significant items of accruals and deferred income are salary-
related deferred items valued at EUR 666 thousand
(EUR 605 thousand).
Leasing and rental fees mainly consist of fixed-term leasing and rental
agreements lasting longer than one year.
Contingent liabilities on behalf of Group companies
The company has no contingent liabilities on behalf of Group companies.
85BIOHIT Healthcare ANNUAL REPORT 2022
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7. Board of Director’s proposal Regarding the Distribution of Profits
On 31 December 2022, the parent company’s distributable assets (unrestricted equity) amounted to EUR 4,711,504.69, including the profit for the
financial period of EUR 934,640.55. The Board of Directors proposes to the Annual General Meeting that the company distribute no divided for the
last financial year and that the profit for the financial year be transferred to retained earnings.
Helsinki, 14 February 2023
Lea Paloheimo
Chairman of the Board of Directors
Auditor’s statement
A statement has been issued today on the completed audit.
Helsinki, 15 February 2023
PricewaterhouseCoopers Oy
Firm of auditors
Franco Aiolfi
Member of the Board of Directors
Liu Feng
Member of the Board of Directors
Kalle Härkönen
Member of the Board of Directors
Osmo Suovaniemi
Member of the Board of Directors
Jussi Hahtela
President & CEO
Tiina Puukkoniemi
Authorised Public Accountant
86BIOHIT Healthcare ANNUAL REPORT 2022
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8. Auditor’s Report
OPINION
In our opinion
n
the consolidated financial statements give a true and fair view of
the group’s financial position and financial performance and cash
flows in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU
n
the financial statements give a true and fair view of the parent
company’s financial performance and financial position in accor
dance with the laws and regulations governing the preparation
of the financial statements in Finland and comply with statutory
requirements.
Our opinion is consistent with the additional report to the Board
of Directors.
What we have audited
We have audited the financial statements of Biohit Oyj (business identity
code 0703582-0) for the year ended 31 December 2022. The financial
statements comprise:
n
the consolidated balance sheet, consolidated comprehensive
income statement, statement of changes in consolidated share-
holders’ equity, consolidated cash flow statement, and notes to the
consolidated financial statements, including a summary of signifi-
cant accounting policies
n
the parent company’s balance sheet, income statement, statement
of cash flows and notes.
BASIS FOR OPINION
We conducted our audit in accordance with good auditing practice in
Finland. Our responsibilities under good auditing practice are further
described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the parent company and of the group companies
in accordance with the ethical requirements that are applicable in Finland
and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, the non-audit services that we
have provided to the parent company and to the group companies are
in accordance with the applicable law and regulations in Finland and we
have not provided non-audit services that are prohibited under Article
5(1) of Regulation (EU) No 537/2014. The non-audit services that we
have provided are disclosed in note 2.9 to the Financial Statements.
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
87BIOHIT Healthcare ANNUAL REPORT 2022
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OUR AUDIT APPROACH
Materiality:
n
Overall group materiality: € 110 thousand
Audit scope:
n
In addition to the parent company, our group scope consists of two
foreign subsidiaries.
Key audit matter:
n
Cut-off of Revenue recognition
n
Royalty income from License included in Distribution Agreement
(Biohit HealthCare (Hefei) Co. Ltd)
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular,
we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain.
MATERIALITY
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial
statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the
consolidated financial statements as set out in the table below. These, together with qualitative considerations, helped us to determine the scope
of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial statements as
a whole.
Materiality
Group
scoping
Key audit
matters
Overview
88BIOHIT Healthcare ANNUAL REPORT 2022
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Overall group materiality € 110 thousand (€ 85 thousand in 2021)
How we determined it We used total assets as benchmark and 1 % rule of thumb to deter
mine overall group materiality.
Rationale for the materiality benchmark applied Based on our assessment the total assets provide a more solid base
for determining the materiality than the commonly used income state
ment based benchmarks.
How we tailored our group audit scope
We tailored the scope of our audit, taking into account the structure of
the group, the accounting processes and controls, and the industry in
which the group operates. Biohit Oyj is a Finnish biotechnology company
operating on global markets, which has foreign subsidiaries in Great
Britain and Italy.
We determined the type of work that needed to be performed at group
companies. This work was performed by the group audit team. Audit
was performed for the parent company and for Biohit Healthcare Ltd,
UK. For the Italian subsidiary, we performed selected audit procedures
on specified account balances as well as analytical procedures. In addi-
tion, we performed audit procedures on the group level.
By performing the procedures above, we have obtained sufficient and
appropriate evidence regarding the financial information of the Group
as a whole to provide a basis for our opinion on the consolidated financial
statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of
the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
As in all of our audits, we also addressed the risk of management over-
ride of internal controls, including among other matters consideration
of whether there was evidence of bias that represented a risk of mate-
rial misstatement due to fraud.
89BIOHIT Healthcare ANNUAL REPORT 2022
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KEY AUDIT MATTER IN THE AUDIT OF THE GROUP
Cut-off of Revenue recognition
Refer to the financial statements accounting principles and the financial
statements note 2.3 Net sales and segment information
Biohit Oyj (“Biohit”) is a Finnish Biotechnology company operating on
global markets. Biohit’s product portfolio consists of diagnostic tests,
analysis systems, products that bind carcinogen acetaldehyde in mono-
clonal antibodies and service laboratory operations. The Group’s reve-
nue is predominately generated from distribution agreements signed
with several distributors who then sell the products further to health-
care operators.
Revenue from distribution agreement-based product sales is recognised
at a point of time when the control has transferred to a distributor in
accordance with delivery terms.
We determined cut-off of revenue recognition as an audit focus area, as
there is a risk that revenue in the financial statements is recognised in
an incorrect period due to either errors or fraud.
Royalty income from License included in Distribution Agreement
(Biohit HealthCare (Hefei) Co. Ltd)
Refer to the financial statements accounting principles and the financial
statements note 2.3, Net sales and segment information and note 2.27
Related party transactions
Biohit Oyj’s shareholder Biohit HealthCare (Hefei) Co. Ltd (”Hefei”) acts
as the exclusive distributor of Biohit’s certain GastroPanel® products in
China. The parties have in February 2022 agreed on new multiannual
distribution agreement for certain GastroPanel products in China.
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
We gained an understanding of the revenue recognition process and we
performed substantive audit procedures to ensure revenue is recorded
in the correct period. Our substantive audit procedures included:
n
testing a sample of selected distribution agreements to ensure the
correctness of revenue recognition criteria applied
n
testing revenue transaction that occurred close to the year end
n
testing certain revenue related balances recognised in the balance
sheet
n
testing a sample of revenue transactions occurred during the year
n
testing the basis for revenue recognition cut-off for selected
manual journal entries posted in revenue accounts
n
auditing the notes and accounting principles regarding revenue
recognition
We obtained understanding of the impact of the new distribution agree-
ment to royalty income from license and related balance sheet items.
Our substantive audit procedures included following procedures:
n
we read the Distribution agreement signed 8 February 2022 and
obtained evidence that Hefei pledged 1.5 million of its Biohit class
B shares (value approximately 2.4 million euros) to Biohit, as a
security for its payment obligations.
n
we made an accounting analysis of the royalty income from license
based on IFRS 15.
90BIOHIT Healthcare ANNUAL REPORT 2022
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n
we reconciled the management calculation of estimated royalty
income based on distribution agreement to the accounting records
and financial statements and ensured those were
correctly accounted for.
n
we audited royalty payments by Hefei in 2022.
n
we audited balance sheet items relating to royalty income from
license
n
we audited the notes and accounting principles regarding royalty
income from license.
As disclosed in note 2.27 “Related parties”, royalty income from license
to Hefei has increased significantly to 2.2 million euros (1.3 million euros
in 2021). This is based on the new distribution agreement, its IFRS-
accounting interpretation, cash flow probabilities and timing (note 2.3).
As disclosed in note 2.27, Hefei has pledged 1.5 million of its Biohit
class B (value approximately 2.4 million euros on December 31, 2022)
shares to Biohit as a security for its payment obligations under the new
distribution agreement.
Royalty income from License included significant management estimation.
We determined that Royalty income from License is a key audit matter
due to the significance of the transaction and due to the estimation
uncertainty relating to it.
The above-mentioned Key audit matter “Royalty income from License included in Distribution Agreement (Biohit HealthCare (Hefei) Co. Ltd)“ is also a
key audit matters with respect to our audit of the parent company financial statements. Our audit procedures were aligned with the ones presented
above.
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated
financial statements or the parent company financial statements.
91BIOHIT Healthcare ANNUAL REPORT 2022
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Responsibilities of the Board of Directors and the Managing Director
for the Financial Statements
The Board of Directors and the Managing Director are responsible for
the preparation of consolidated financial statements that give a true
and fair view in accordance with International Financial Reporting Stan-
dards (IFRS) as adopted by the EU, and of financial statements that
give a true and fair view in accordance with the laws and regula-
tions governing the preparation of financial statements in Finland
and comply with statutory requirements. The Board of Directors and
the Managing Director are also responsible for such internal control
as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Board of Directors and the
Managing Director are responsible for assessing the parent company’s
and the group’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going con-
cern basis of accounting. The financial statements are prepared using
the going concern basis of accounting unless there is an intention to
liquidate the parent company or the group or to cease operations, or
there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
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 good
auditing practice 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 financial statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
n
Identify and assess the risks of material misstatement of the 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 high-
er than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of
internal control.
n
Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circum-
stances, but not for the purpose of expressing an opinion on the effec-
tiveness of the parent company’s or the group’s internal control.
n
Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made
by management.
92BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
n
Conclude on the appropriateness of the Board of Directors’ and the
Managing Director’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 parent company’s or the group’s ability to continue as a going con-
cern. 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
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 condi-
tions may cause the parent company or the group to cease to continue
as a going concern.
n
Evaluate the overall presentation, structure, and content of the
financial statements, including the disclosures, and whether the finan-
cial statements represent the underlying transactions and events so
that the financial statements give a true and fair view.
n
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 inde-
pendence, 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 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 con-
sequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
OTHER REPORTING REQUIREMENTS
Appointment
We were first appointed as auditors by the annual general meeting on
14 April 2014. Our appointment represents a total period of uninter-
rupted engagement of 9 years.
Other Information
The Board of Directors and the Managing Director are responsible for
the other information. The other information comprises the report of the
Board of Directors and the information included in the Annual Report,
but does not include the financial statements and our auditor’s report
thereon. We have obtained the report of the Board of Directors prior to
the date of this auditor’s report and the Annual Report is expected to be
made available to us after that date.
Our opinion on the financial statements does not cover the other
information.
93BIOHIT Healthcare ANNUAL REPORT 2022
BIOHIT IN BRIEF CEO´S REVIEW STRATEGY CORPORATE GOVERNANCE FINANCIAL STATEMENT
In connection with our audit of the financial statements, our respon-
sibility is to read the other information identified above and, in doing
so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. With respect to the
report of the Board of Directors, our responsibility also includes consid-
ering whether the report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
In our opinion
n
the information in the report of the Board of Directors is consis-
tent with the information in the financial statements
n
the report of the Board of Directors has been prepared in accor-
dance with the applicable laws and regulations.
If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, 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.
Helsinki, 15 February 2023
PricewaterhouseCoopers Oy
Authorised Public Accountants
Tiina Puukkoniemi
Authorised Public Accountant (KHT)
n
biohithealthcare.com
Biohit Oyj
Laippatie 1
00880 Helsinki
Finland
Tel. +358 9 773 861
info@biohit.fi
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