XHEL:OPTOMED ESEF Annual Report
Optomed Oyj (XHEL:OPTOMED)
ESEF Annual Report
2022-03-17
For: 2020-12-31
View Original
Added on
September 23, 2026
Board of Directors’
Report and Financial
Statements 2020
2
Board of Directors’ Report
Optomed in brief
Optomed is a Finnish medical technology company and one of the
leading providers of handheld fundus cameras. Optomed combines
handheld screening devices with software and articial intelligence with
the aim to transform the diagnostic process of blinding eye-diseases
such as rapidly increasing diabetic retinopathy. In its business Optomed
focuses on eye-screening devices and software solutions related R&D
in Finland and sales through dierent channels in over 60 countries.
The company has an extensive portfolio of 56 international patents
protecting the technology. In 2020, Optomed’s revenue reached EUR
13 million and in 2019 revenue amounted to EUR 15 million. At the
end of 2020, Optomed employed 109 professionals.
Operating Environment
The gure below illustrates the global fundus camera market measured
by revenue (USD million)
1
The global handheld fundus camera market was estimated to amount
to USD 44 million in 2017, corresponding to a penetration of approxi-
mately 9 percent. This penetration is expected to increase to appro-
ximately 12,8 percent in 2022 and to further increase to 14.4 percent
in 2024. The handheld fundus camera market can be split between
non-mydriatic and mydriatic handheld cameras, with non-mydriatic
cameras accounting for approximately 91 percent of the total market.
The gure below illustrates the global fundus camera market measured by revenue (USD million)
1
3
In 2020, the largest geographical region in the handheld fundus camera
segment was is estimated to be the North America region with a share
of approximately 44 percent, followed by the Asia-Pacic region with a
share of 27 percent, Europe with a share of 24 percent, Latin America
with a share of three percent and Middle East & Africa with a share
of one percent
2
.
In the handheld fundus camera segment, the highest growth is esti-
mated to stem from the Asia-Pacic region, where the annual market
growth is expected to be approximately 17 percent between 2017 and
20243. The Company’s management believes that the increasing num-
ber of people suering from diabetes and the increasing awareness of
the complications and costs resulting from blindness are among the
most important drivers for growth in the handheld camera market.
Additionally, management also believes that the relatively small ins-
talled base of desktop fundus cameras results in increased use of new
technology and in particular handheld cameras
4
. High growth rates are
also expected in the Latin America and Middle East & Africa regions,
mainly due to increasing economic growth and growing healthcare
expenditure
5
. The European market is estimated to grow at a rate of
approximately 11.8 percent per year, and the growth is driven by the
adoption of the device amongst general practitioners and healthcare
professionals other than those specializing in eye diseases. Handheld
fundus cameras have traditionally been used by ophthalmologists
oering remote consultation, however, as handheld fundus cameras
have become more common, other medical professionals have also
begun to consider them as space- saving and cost-eective alternatives
to desktop fundus cameras
6
. The gure below illustrates the regional
market sizes and growth rates.
1Zion Market Research (2018).
2 Zion Market Research (2018).
3 Zion Market Research (2018).
4 Company estimate.
5 Zion Market Research (2018).
6Data Research: European Market Report for Fundus Cameras (2016).
4
The adaptation of articial intelligence took a major leap forward in
2020 as the new reimbursement code for diabetic retinopathy sc-
reening with AI was approved to be opened in the beginning of 2021
in the USA. This new CPT-code 92229 retinal imaging with automated
point-of-care, will enable the use of AI within the US market as pay-
ment for the service is more straightforward with the new coding. The
exact reimbursement sum of the code is still undetermined, but it is
expected to be communicated in the rst half of 2021. The FDA has
now cleared two AI companies’ diabetic retinopathy algorithm to be
sold with dedicated retinal cameras in the US market.
5
Group summary - Key gures and APM’s
Revenue, Profitability and Result
EUR, thousand 2020 2019 Change, % Proforma 2018
Revenue 13,011 14,977 -13.1% 14,463
Gross prot * 8,955 9,944 -9.9% 10,398
Gross margin % * 68.8% 66.4% 71.4%
EBITDA -733 -335 -118.8% 1,188
EBITDA margin *, % -5.6% -2.2% 8.4%
Adjusted EBITDA * -733 -196 -274.6% 1,661
Adjusted EBITDA margin *, % -5.6% -1.3% 11.5%
Operating result (EBIT) -2,906 -2,596 -11.9% -664
Operating margin (EBIT) *, % -22.3% -17.3% -4.6%
Adjusted operating result (EBIT) * -2,906 -2,457 -18.3% -338
Adjusted operating margin (EBIT margin) *, % -22.3% -16.4% -2.3%
Net prot/ loss -3,177 -2,875 -10.5% -1,327
Earnings per share -0.24 -0.32 29.5% -0.17
Cash ow from operating activities -2,801 161 -1839.7% -76
Net Debt -4,090 -8,940 -54.3% 8,207
Net debt/ Adjusted EBITDA (LTM) 5.6 45.7 4.9
Equity ratio * 64.6% 57.2%
24.0%
R&D expenses personnel 1,406 1,540 -8.7% 1,369
R&D expenses other costs 253 234 8.1% 188
Total R&D expenses 1,659 1,774 -6.5% 1,557
Optomed uses certain alternative performance measures (APMs) with the purpose to provide a better understanding of how the business
develops. These APMs, as dened, cannot be fully compared with other companies’ APMs.
*) Alternative performance measures, see section Alternative Performance Measures for denitions and calculations.
6
In January-December 2020, Group revenue decreased by 13.1 percent
to EUR 13,011 (14,977) thousand. The Software segment performed
well considering the ongoing COVID-19 situation, and its revenue
growth was 3.2 percent driven by stable recurring business from the
existing customers. The Devices segment’s revenue decreased by 30.3
percent. The decrease was a result of the COVID-19 pandemic causing
a decline in OEM sales. Optomed branded products performed well
despite pandemic and exceeded OEM sales. The gross margin increa-
sed to 68.8 percent from 66.4 percent of the comparison period. The
company received other operating income of EUR 157 (254) thousand
for the full year of 2020 and 2019, which increased the gross margin
of both periods. The January-December gross margin excluding other
operating income was 67.6 percent in 2020 and 64.7 percent in 2019.
In January-December 2020 EBITDA amounted to EUR -733 (-335)
thousand and adjusted EBITDA totaled EUR -733 (-196) thousand.
January-December 2019 was aected by EUR 139 thousand of IPO
expenses classied as items aecting comparability. The main reasons
for the adjusted EBITDA variance versus 2019 were lower revenue which
was partly compensated by higher gross margin and lower operating
expenses due to the layos, lower level of corporate travelling, as well
as external events that had been cancelled or postponed due to the
COVID-19 situation. EBIT was EUR -2,906 (-2,596) thousand and adjusted
EBIT was EUR -2,906 (-2,457) thousand.
Net nancial items amounted to EUR -341 (-356) thousand in January-De-
cember 2020 and consisted mainly of interest payments to nancial
institutions and the translation eect of Chinese RMB and USD to EUR.
EUR, thousand 2020 2019 Change, %
Revenues Gross 5,097 7,309 -30.3 %
prot * Gross 2,862 4,200 -31.9 %
margin % * 56.1 % 57.5 %
EBITDA -251 -408 38.5 %
EBITDA margin *, % -4.9 % -5.6 %
Operating result (EBIT) -1,820 -1,913 4.8 %
Operating margin (EBIT) *, % -35.7 % -26.2 %
Financial summary per segment
Devices segment
Optomed has two synergistic business segments: Devices and Soft-wa-
re. The Devices segment develops, commercializes and manu-factures
easy-to-use and aordable handheld fundus cameras, that are suitable
for any clinic for screening of various eye diseases, such as diabetic
retinopathy, glaucoma and AMD (Age Related Macular De-generation).
*) Alternative performance measures, see section Alternative Performance Measures for denitions
and calculations
In January-December 2020, the Devices segment revenue decreased
by 30.3 percent and was EUR 5,097 (7,309) thousand caused by the
COVID-19 pandemic aecting mainly OEM sales.
In January-December 2020, the gross margin decreased to 56.1 percent
from 57.5 percent in the previous year. The company received other
operating income of EUR 101 (175) thousand in 2020. The gross margin
excluding other operating income was 54.1 percent in 2020 and 55.1
percent in 2019. In January-December 2020, EBITDA was EUR -251
(-408) thousand or -4.9 (-5.6) percent of revenue. In spite the revenue
decreased by 30.3 percent, the EBITDA was improved while cost saving
measures started in response to the pandemic.
7
*) Alternative performance measures, see section Alternative Performance Measures for denitions
and calculations
*) Alternative performance measures, see section Alternative Performance Measures for
denitions and calculations
Software segment
Optomed has two synergistic business segments: Devices and Softwa-
re. The Software segment develops and commercializes screening
software for diabetic retinopathy and cancer screening for healthcare
organizations. The segment also distributes o-the-shelf products
from selected partners to supplement its own solutions and expertise
and provides software consultation to support the Devices segment
screening solution projects.
Group-wide expenses
Group-wide expenses consist of functions supporting the entire group
such as treasury, group accounting, marketing, legal, HR and IT as well
as public listing expenses.
Group-wide operating expenses amounted to EUR 2,408 (1,593)
thousand. Group-wide expenses include EUR 139 thousand of IPO
related expenses for the full year 2019. The IPO related expenses are
classied as items aecting comparability.
Organic Growth
The following table shows the organic growth of the group and the se-
gments. The adjusted elements are related to exchange rate variances
between EUR, USD and Chinese RMB.
EUR, thousand 2020 2019 Change, %
Revenues 7,913 7,668 3.2 %
Gross prot * 6,093 5,744 6.1 %
Gross margin % * 77.0 % 74.9%
EBITDA 1,927 1,667 15.6 %
EBITDA margin *, % 24.4 % 21.7%
Operating result (EBIT) 1,324 909 45.6 %
Operating margin (EBIT) *, % 16.7 % 11.9 %
In January-December 2020, the Software segment revenue increased
by 3.2 percent and was EUR 7,913 (7,668) thousand. The gross prot
included other operating income of EUR 56 thousand in 2020 com
-
pared to EUR 79 thousand in 2019. The gross margin excluding other
operating income was 76.3 percent in 2020 and 73.9 percent in 2019.
EBITDA was EUR 1,926 (1,667) thousand or 24.3 (21.7) percent of re-
venue.
Organic Growth, percent 2020 2019
Devices segment * -29.5% -2.5%
Software segment * 3.2% 6.9%
Group * -12.7% 1.5%
Balance sheet, financial position and
investments
The consolidated balance sheet total amounted to EUR 31,073 (39,611)
thousand on December 31, 2020. Consolidated shareholders’ equity
8
amounted to EUR 20,073 (22,637) thousand. The consolidated equity
ratio was 64.6 (57.1) percent. The consolidated goodwill recorded on the
balance sheet on December 31, 2020 was EUR 4,256 (4,256) thousand.
Cash ow from operating activities amounted to EUR –2,801 (161)
thousand for the year. The decrease is mainly related to payment
of IPO related expenses in the rst quarter of 2020. Consolidated
cash and cash equivalents at the end of the period amounted to EUR
10,608 (18,866) thousand. Interest-bearing net debt totaled EUR –4,090
(-8,940) thousand at the end of the period. Net cash used in investing
activities was EUR -1,820 (-1,434) and relates mainly to capitalized
development expenses.
Net working capital was EUR 3,440 (1,275) thousand at the end of
the period.
Research and development
Optomed is a research and development driven healthcare technology
company, employing 60 full-time equivalent (“FTE”) employees within
its research and development function, divided between the Devices
and Software segments. The strong focus on research and develop-
ment has been the core of the operations since the foundation of the
company in 2004 and has resulted in a strong international patent
portfolio comprising 56 international patents and 9 pending patents.
Additionally, Optomed has nine registered as well as 40 registered
and 3 pending trademarks.
Optomed’s management believes that the strong patent portfolio and
continuous development of new camera and software solutions are
the most important competitive advantages of the company. Opto-
med’s proprietary and patented technology have resulted in Optomed
being able to develop and construct handheld fundus cameras that
are able to provide high- quality fundus images. The quality of the
images is higher or on the same level as most traditional desktop
fundus cameras.
The research and development expenditure totaled EUR 3,108 thousand,
representing 23.9 percent of revenue in 2020, compared to EUR 2,659
thousand or 17.8 percent of revenue in 2019. The research and deve-
lopment expenditure increased 16.9 percent compared to 2019.
Non-financial information
Environment, Social and Governance (ESG) related matters are an in-
tegral part of Optomed’s operations. The company is still rather small
which enables the management to take ESG matters into consideration
eciently.
Optomed has identied manufacturing as one of its key ESG elements
and the key ESG related risks are within the scope of manufacturing.
Therefore, the ESG matters are taken into account when making reso-
lutions with regards to manufacturing. Currently, Optomed’s devices
are manufactured by an ESM partner that is a NYSE listed entity with
its own strict sustainability requirements and reporting. This gives Op-
tomed visibility and assurance that ESG matters are taken into account
with regards to its device manufacturing.
Optomed has implemented a governance structure required for the
Nasdaq Helsinki main list and implemented signicant amount of
EUR, thousand 2020 2019
R&D expenditure 3,108 2,659
As percentage of revenue 23.9% 17,8%
9
policies, including the code of conduct and whistleblowing that all
employees are expected to follow. The code of conduct also highlights
Anti-Bribery and Corruption (ABC) matters as they have been assessed
to be extremely important due to the global nature of Optomed’s ope-
rations. The governance function has been strengthened signicantly
and new expertise has been brought to the board and audit committee.
The governance structure is described in detail in Optomed’s Corporate
Governance Statement.
Health technology is a regulated sector which also contributes to the
company’s ESG approach. Optomed complies with RoHS, REACH, conict
mineral regulations and all applicable privacy, consumer protection
and product safety regulations. Optomed’s compliance with respect
to various medical devices related regulations is also audited by third
parties regularly.
Personnel, management and legal
structure
Personnel
On 31 December 2020, Optomed had a total of 109 employees, of which
a signicant number worked in expert roles. The employee contracts
are mostly permanent contracts.
Graphical distribution of employees 2020 2019
Finland 96 95
China 12 13
United States 1 0
Total 109 108
Management
The Group CEO is responsible for the management of the company’s
operations and governance in accordance with the instructions of the
Board of Directors. The CFO is responsible for the company’s nance
function, which includes accounting and reporting, business control-
ling, treasury, tax, human resources, investor relations and internal
controls. The Vice President, Devices is responsible for the company’s
Devices segment, which also includes a sales team, and the Vice Pre-
sident also acts as the Operating Director of Optomed China. The Vice
President, Software is responsible for the company’s Software seg-
ment, in addition the Vice President acts as the Managing Director of
Optomed Software Oy and is responsible for the group’s IT function.
The Vice President, Marketing is responsible for brand and marke-
ting strategy for new and existing product, product management and
training, as well as management of marketing campaigns and events.
The Chief Legal Ocer’s responsibilities include legal matters, M&A,
compliance, corporate governance, corporate responsibility and risk
management. The Chief Legal Ocer also acts as the secretary to the
Board of Directors of the company.
Number of employees 2020 2019
Average number of employees 105 106
Number of employees at the end
of the period
109 108
10
Seppo Kopsala
Chief Executive Ocer
Lars Lindqvist
Chief Financial Ocer
Laura Piila
VP, Devices
Markku Myllylä
VP, Software
Sakari Knuutti
Chief Legal Ocer
Niina Huikuri
VP, Marketing
Quality and
Regulation
Design
Value Chain
Management
R&D
Sales
Optomed China
Finance and
Accounting
Business Control,
Admin and HR
Marketing
Sales
R&D
Group ICT
functions
Professional services,
non-health care
Healthcare
solutions delivery
Optomed Inc
11
Subsidiaries of the company
Consolidated
shareholding and
voting right, %
Country of
incorporation
Optomed Software Oy 100.0% Finland
O p t o m e d H o n g K o n g L t d 100.0% Hong Kong
O p t o m e d C h i n a L i m i t e d C o . , L t d 100.0% China
Shanghai Optomed Medical
Techno l o g y C o ., Ltd
100.0% China
O p t o m e d U S A I n c . 100.0% United States
Legal structure
Optomed group consists of the parent company Optomed Plc and ve
subsidiaries in Finland, China, the USA and Hong Kong. In addition,
Optomed Plc has a branch in Sweden, Optomed Sweden Filial. The
parent company of the group, Optomed Plc, is responsible for, among
other things, the management of the group as well as nance and
accounting functions, human resources, legal aairs and corporate
communication. The parent company is responsible for the Devices
segment operations, while the Software segment operations are carried
out through Optomed Software Oy. In addition to Finland, Optomed
operates in China and the USA through its subsidiaries. The main res-
ponsibilities of the foreign subsidiaries are local sales and distribution
channel management, product registration as well as the launching
of new products, brand building, marketing, aftersales services, and
repair services.
The following table presents the subsidiaries of the company along
with respective ownership shares on 31 December 2020.
Shares and shareholders
The company has one share series with all shares having the same
rights. At the end of the review period Optomed Plc’s share capital
consisted of 14,003,144 shares and the company held 740,378 shares
in the treasury which corresponds to approximately 5.3 percent of the
total amount of the shares and votes. Optomed’s market capitalization
was EUR 95.8 million at the of the review period.
Optomed’s shareholder structure was as follows at the year-end:
The USA subsidiary Optomed USA Inc. was established in early 2020.
The China subsidiary Shanghai Optomed Medical Consulting Ltd was
closed in early 2020.
12
Sector Number of shareholders % of shareholders Number of shares % of shares
Private companies 129 3.31 1,237,674 8.84
Financial and insurance institutions 12 0.31 3,587,689 25.62
Public sector organizations 2 0.05 731,080 5.22
Households 3,738 95.87 2,131,325 15.22
Non-prot instit serving households 4 0.1 42,370 0.3
Foreigners 6 0.15 4,372 0.03
Total 3,891 99.79 7,734,510 55.23
Nominee registered 8 0.21 6,268,634 44.77
Total shares 14,003,144 100
Number of shares Shareholders % Shares %
1 - 100 1,284 32.93 62,204 0.44
101 – 1,000 2,333 59,84 817,409 5.84
1,001 – 10,000 258 6.62 675,673 4.83
10,001 – 100,000 9 0.23 482,868 3.45
100,001 – 1,000,000 13 0.33 5,798,137 41.41
> 1,000,000 2 0.05 6,166,853 44.04
Total 3,899 100 14,003,144 100.00
Nominee registered 8 21 6,268,634 44.77
Number of shares issued 14,003,144 100
13
Shareholder Shares % of shares
1
* Skandinaviska Enskilda Banken Ab (publ)
Helsingin Sivukonttori
4,487,601 32.05
2 * Nordea Bank Abp 1,679,252 11.99
3 Optomed Oyj 740,378 5.29
4 Aura Capital Oy 691,756 4.94
5 Kopsala Seppo Henrik 637,080 4.55
6 Mandatum Henkivakuutusosakeyhtiö 635,000 4.53
7 Suomen Teollisuussijoitus Oy 601,080 4.29
8 Keskinäinen Vakuutusyhtiö Kaleva 490,000 3.5
9 Sr Nordea Nordic Small Cap 434,578 3.1
10 Sr Aktia Capital 400,000 2.86
10 largest shareholders total 10,796,725 77.10
on which nominee registered 6,166,853 44.04
Others 3,206,419 22.90
In total 14 003 144 100
*Nominee register
At the end of the review period, Optomed’s Chairman and Members of
the Board of Directors controlled 2,451,393 shares, representing appro-
ximately 17.5 percent of the total number of all shares and 18.5 percent
of all shares excluding shares in treasury. The CEO and management
team owned 637,080 shares and 490,000 options. Additional information
with regards to the shareholding of the board and the management is
available at the company’s corporate governance statement.
Flagging notifications
Under the provisions of the Finnish Securities Markets Act, sharehol-
ders of listed companies have an obligation to notify both the Finnish
Financial Supervision Authority and the listed company of changes in
their holdings when crossing predened thresholds.
In 2020, Optomed received two major shareholder notications from
OP-Rahastoyhtiö Oy. According to the latest notication, the total
holdings in Optomed shares and votes held by OP-Rahastoyhtiö has
decreased to 4.99 per cent of all of the registered shares in Optomed
on 16 October 2020.
The company is not aware of the existence of any Shareholders’ agree-
ments and it is not controlled by anyone. Additional information with
respect to the shares, shareholding and trading can be found on the
company’s website w ww.optomed.com.
Authorizations
On 11 June 2020, the Annual General Meeting approved the autho-
rization for the Board of Directors to accept as pledge and repurcha-
se of Optomed’s own shares. Altogether no more than 1,400,314
shares may be repurchased or accepted as pledge. The authorizati-
on will be valid until the earlier of the end of the next Annual Gene-
ral Meeting or 18 months from the resolution of the Annual General
Meeting.
14
Optomed’s shares were listed on Nasdaq Helsinki stock exchange on 5.12.2019
Group Share Indicators 2020 2019 2018
Earnings per share -0.24 -0.32 -0,17
Equity per share 1.51 1.72 0,71
Dividend per share - -
Dividend % of earnings - -
eective dividend yield % - -
P/E ratio -31.05 -19.70
Share price performance, share issue adjusted *
Lowest share price 2.92 4.53
Highest share price 7.57 7.52
Average share price 5.33 6.13
Closing share price 7.22 6.34
Market value of shares at end of period 101,103 88,780
Weighted average adjusted number of shares during the nancial period 13,262,766 8,935,654 7,775,473
Weighted average adjusted number of shares in the end of nancial year 13,262,766 13,262,766 8,147,700
Further, the General Meeting authorized the Board of Directors to
decide on the issuance of shares as well as the issuance of options
and other special rights entitling to shares referred to in chapter 10
section 1 of the Finnish Companies Act. The number of shares to
be issued based on this authorization may not exceed 1,400,314.
The Board of Directors is authorized to resolve on all terms and
conditions of the issuance of shares and special rights entitling to
shares, including the right to derogate from the pre-emptive right of
the shareholders. The authorization will be valid until the earlier of
the end of the next Annual General Meeting or 18 months from the
resolution of the Annual General Meeting.
15
Calculation of share indicators
Option programs
Optomed has established several option programs as incentive pro-
grams covering employees, managing directors and consultants of
the group.
Optomed’s amended option programs are described below.
Each option entitles its owner to subscribe for one (1) new, or if the
company’s Board of Directors so decides, existing A share in the com-
pany or if the company would only have one class of shares, as is the
case following the Listing, such shares. The share subscription prices
and the exercise periods are set out in the terms and conditions of
the options.
The dividend right of the new shares and other shareholder rights
Earnings per share
Net result / Number of outstanding shares (reecting changes in the number of shares following the resolution of the
EGM to split the shares of the company with a ratio of 1:20)
Equity per share Shareholders’ equity / adjusted number of shares at the end of the nancial period - own shares
Dividend per share Total dividend / adjusted number of shares at the end of the nancial period - own shares
Dividend, % of earnings Dividends per share / earnings per share × 100
Eective dividend yield, % Dividend per share x 100 / adjusted share price at the end of the nancial period
P/E ratio Earnings per share / market value per share
will commence after the shares upon exercise of the relevant option
are recorded into the Trade Register, or if existing shares of the com-
pany are being issued, upon completion of the transfer of the share
provided that the transfer has been fully paid.
The options are forfeited and automatically transferred to the company
without consideration if the employment or service relationship to the
group is terminated, for any reason whatsoever, or if the consulting
agreement regarding the option holder’s work performed for the
group is terminated for any reason whatsoever, unless the Board of
Directors decides to deviate from the main rule.
16
Program Subscription price (EUR) Exercise Period Outstanding options
2009A 0.7 1 July 2020 – 1 July 2021 34,000
2015 3.5 1 July 2020 – 1 July 2024 246,000
2017 3.5 1 July 2020 – 1 July 2024 210,000
2017B 3.5 1 July 2020 – 1 July 2022 52,000
2018C 3.5 (50%) 1 July 2020 – 31 December 2024 251,000
(50%) 1 July 2021 – 31 December 2024
2019A 3.5 1 July 2021 – 31 December 2024 84,000
2019B 3.5 (40%) 1 July 2020 – 31 December 2024 100,000
(20%) 1 September 2020 – 31 December 2024
(40%) 1 September 2021 – 31 December 2024
2019C 3.5 (50%) 1 July 2020 – 31 December 2024 20,000
(50%) 1 September 2020 – 31 December 2024
2019D 5 1 January 2023 – 31 December 2023 72,000
2020A 3.5 1 January 2023 – 31 December 2023 98,000
Total 1,167,000
17
Decisions of the annual general meeting
The Annual General Meeting held on 11 June 2020 approved the -
nancial statements, adopted the Remuneration Policy for governing
bodies and discharged the responsible parties from liability for the
nancial period ended 31 December 2019. The Annual General Meeting
resolved in accordance with the proposal of the Board of Directors
that no dividend will be paid for t he year 2019.
The number of members of the Board of Directors was conrmed
as ve:
• Seppo Mäkinen, Petri Salonen, Reijo Tauriainen and Jun Wu were
re-elected as members of the Board
• Anna Tenstam was elected as a new member of the Board
The Annual General Meeting conrmed the annual Board remune-
ration as follows:
• Chairman of the Board EUR 36,000
• Members of the Board EUR 18,000
In addition, a meeting fee in the amount of EUR 500 is paid to the
Chairman of the Audit Committee for each Audit Committee meeting.
40 percent of the Board remuneration is paid in Optomed shares
and 60 percent in cash. The remuneration was paid in August, after
Optomed’s H1 report was announced.
The Annual General Meeting decided that KPMG Oy Ab, authorized
public accountants is elected as the Company’s auditor. KPMG Oy Ab
has informed the Company that Authorized Public Accountant Tapio
Raappana would continue as the auditor with principal responsibility.
Auditor’s remuneration will be paid in accordance with an invoice
approved by the Company.
At its meeting held after the Annual General Meeting, the Board of
Directors elected from among its members Petri Salonen as its Chair-
man. The committee members were elected as follows
Audit Committee:
• Reijo Tauriainen (chairman)
• Seppo Mäkinen
• Anna Tenstam
Remuneration Committee:
• Seppo Mäkinen (chairman)
• Reijo Tauriainen
• Anna Tenstam
Risks and uncertainties
COVID-19 coronavirus
The COVID-19 outbreak has turned into a pandemic the length and
prolonged eect of which are uncertain.
The company’s software segment continues to be largely unaected due
to recurring nature of the business and long-term customer agreements,
however, the Devices segment sales have been negatively aected
by the pandemic. The medical sector as a whole is concentrated on
addressing the immediate pandemic and other supplier meetings and
purchases are postponed. This has an eect on the company’s ability
to sell its devices and increase its customer base especially because
face -to-face meetings are market standard for fundus camera sales.
Currently, it seems like the People’s Republic of China and the Asia-Pa-
cic have recovered from the pandemic and demand is back to normal
in key countries of the area. However, Europe and the US have been
18
hit by a new wave of infections which may have a negative eect on
both the European sales and the US operations that are in the ramp-up
phase. In spite the vaccinations are progressing, Optomed recognizes
the risk of a prolonged pandemic which may cause additional restric-
tions and other negative eects globally. Further, the pandemic has
increased the risk of component sourcing issues. The company has
taken precautions to protect its currently strong cash position and to
secure alternative components.
High quality products
The quality and safety of the Company’s products are extremely im-
portant for competitiveness.
The company may be adversely aected if it fails to continuously
develop and update its fundus cameras and software solutions or
to identify or integrate new products and product platforms into its
oering.
Strategy and M&A
The company may be unsuccessful in fullling its strategy or the stra-
tegy itself may be unsuccessful.
The successful implementation of the company’s strategy depends
upon several factors, some of which are completely or partially out-
side the company’s control. The company has an appropriate risk
management function in the context of the size of the company’s
operations, however, it may not be able to identify or monitor all
relevant risks and determine ecient risk management procedures
and responsible persons that may again aect the strategy. The com-
pany is also dependent on its ability to develop and manage varying
routes-to-market for its products, the eciency of its sales channels
and its customer and distributor relationships. Further, the company
has an opportunistic view on M&A which by nature include inherent
risks. Fail ure of strategy may force the company to record write-do-
wns on its goodwill.
Market and competition
The company operates in a market that is highly competitive.
Optomed operates in the fundus camera market that is developing fast
and the competition is sometimes erce. The market acceptance of the
company’s products and solutions is important for its future growth.
Optomed recognizes a possibility of new market changing products
entering the market. Further, in certain key geographies Optomed’s
client base is limited and, therefore, a loss of a key customer in a key
market may adversely aect the Company’s revenue streams.
External economic and political
risks and natural disasters
Optomed operates globally and is thus exposed to various external risks.
The company is exposed to natural disasters taking place in countries
where it operates. In addition to these, the company is also exposed to
general and country specic, economic, political and regulatory risks,
which could entail volatile sales in key markets.
Supply chain
Optomed’s business is dependent on the eectiveness of purchasing
materials, manufacturing and timely distribution.
The company is dependent on contract manufacturers for functioning,
ecient and eective production and product assembly. Further, the
company is dependent on suppliers which may aect the company’s
ability to supply its customers in a timely manner.
19
Systems and information
Optomed’s operations are increasingly dependent on IT systems.
Disruption of the company’s IT systems could inhibit the business ope-
rations in a number of ways, including disruption to nancial reporting,
sales, production and cash ows.
Litigation
Optomed operates globally and pursues double digit annual organic
growth in medium term.
Optomed may not always be able to reach the best contractual terms
with stakeholders. The company may be negatively aected by legal
or administrative proceedings directed at the company or third parties
due to back-to-back liability, or other disputes and claims including
product liability, especially in terms of medical devices, and intellectual
property rights related items.
Trade secrets and patents
The technological capabilities are a competitive advantage that the
company must be able to protect.
The company may not be able to protect its trade secrets and know-how
which could lead to losing the competitive advantage the company has.
At the same time, the company may be forced to take actions against
parties that violate Optomed’s IPRs.
Talent & organisation
A skilled workforce and agile organisation are essential for the conti-
nued success of the business.
The company may be adversely aected if it would lose its key person-
nel or fails to attract the right talent.
Finance
The company needs external nancing to operate and is not currently
protable.
The company is dependent on external nancing and the company may
have diculties accessing additional nancing on competitive terms
or at all which may again contribute the company’s liquidity risks. The
company is also subject to credit and counterparty risks through its
trade receivables.
Forex
Optomed operates globally and is thus exposed to currency exchange
risks.
The company is exposed to foreign exchange rate risks arising from
uctuations in currency exchange rates, especially with regards to USD,
EUR and RMB. Currency rates, along with demand cycles, can result in
signicant swings in the prices of the raw materials needed to produce
the Company’s goods, sales prices and OPEX.
Legal and regulatory
Compliance with laws and regulations is an essential part of Optomed’s
business operations.
Optomed and its’ suppliers and distributors operate globally and are
subject to various national and regional regulations in the areas of
medical devices, product safety, product claims, data protection, intel-
lectual property rights, health and safety, competition, employment,
20
taxes and anti-money laundering and anti-bribery & corruption (AML
& ABC). Furthermore, many of the company’s devices are subject to
various medical related assessment (including clinical trials), clearance
and approval processes that are required to introduce the Company’s
products on the markets.
Failure to comply with the regulations might lead to loss of sales per-
mits in dierent markets, product recalls, reputational issues, civil and
criminal actions leading to various direct and indirect damages to Opto-
med and its employees that are not completely covered by Optomed’s
insurance coverage. Especially, failures with respect to compliance with
certain medical devices related regulations and processes may hinder
the company’s devices market access.
DISPUTES
The company is not currently involved in any disputes or trials that
would have a signicant impact on the group’s nancial
position.
Major events after the review period
On 12 January 2021, Optomed announced that it has been awarded
a contract to develop an advanced IT system for the automation and
evaluation of outcomes in ophthalmic care. The system is developed
for the Finnish University Eye Clinics.
On 14 January 2021, Optomed announced the proposal of the Nomi-
nation Board to the next Annual General Meeting. The Nomination
Board proposed that Seppo Mäkinen, Petri Salonen, Reijo Tauriainen
and Anna Tenstam are re-elected as Board members and Haohao
Zhang is elected as a new Board member. The Board remuneration
was proposed to remain as-is.
On 28 January, Optomed announced that it has established an in-
ternational scientic advisory board. The board consists of globally
recognized and scientically merited medical doctors specializing in
ophthalmology and neuro-ophthalmology, with advanced experience
on articial intelligence applied to detection of ophthalmic conditions.
The board’s proposal for the distribu-
tion of profit
The parent company’s non-restricted equity on December 31, 2020
was EUR 19,442,899.33 and the net loss for the nancial year was EUR
2,142,670.91. The Board of Directors proposes to the Annual General
Meeting that no dividend will be paid and the non-restricted equity on
the outstanding 14,003,144 shares shall be retained and carried forward.
Outlook 2021
Optomed expects its full year 2021 revenue to grow as compared to
2020.
21
Alternative performance measures definitions
Alternative Performance Measures Denition
Gross prot Revenue + Other operating income – Materials and services expenses
Gross margin, % Gross prot / Revenue
EBITDA Operating result before depreciation, amortisation and impairment losses
EBITDA margin, % EBITDA / Revenue
Operating result Prot/loss after depreciation, amortisation and impairment losses
Operating margin, % Operating result / Revenue
Adjusted operating result Operating result excluding items aecting comparability
Adjusted operating margin, % Adjusted operating result / Revenue
Adjusted EBITDA EBITDA excluding items aecting comparability
Adjusted EBITDA margin % Adjusted EBITDA / Revenue
Items aecting comparability Material items outside ordinary course of business including restructuring costs, net gains or losses from sale of business
operations or other non-current assets, strategic development projects, external advisory costs related to capital reorgani-
sation, impairment charges on non-current assets incurred in connection with restructurings, compensation for damages
and transaction costs related to business acquisitions.
Net Debt Interest-bearing liabilities (borrowings from nancial institutions, government loans and subordinated loans) – cash and
cash equivalents (excl. lease liabilities according to IFRS 16)
Net Debt / Adjusted EBITDA (LTM), times Net Debt / Adjusted EBITDA (for the last twelve months, LTM)
Earnings per share Net result / Number of outstanding shares (reecting changes in the number of shares following the resolution of the
EGM to split the shares of the Company with a ratio of 1:20)
Equity ratio, % Total equity / Total assets
R&D expenses Employee benet expenses for R&D personnel and other operational expenses related to R&D activities
22
Organic growth, % Organic growth refers to revenue growth excluding (i) growth attributable to acquisitions and divestments; and (ii) growth
attributable to uctuations in exchange rates. The various components in organic growth is calculated as follows:
Acquisitions and divestments: Shows how acquisitions and divestments completed during the relevant period have aected
the reported revenues. To estimate the impact of acquisitions on reported revenue, the revenue from the contributions of
the acquired units for the current period is subtracted from the total revenue for the same period. To estimate the im-
pact of divestments on reported revenue, the revenue from the contributions from the divested units for the current period
is subtracted from the total revenue from the previous respective comparison period. Currency Fluctuations: Shows how
the reported revenue has been aected by the translation of revenue generated in other currencies than the euro (which is
the Group’s accounting currency) when there are exchange rate dierences between the current period and the corres-
ponding comparative period. Income in currencies other than euro for the comparative period is recalculated using the
applicable exchange rate for the current period to eliminate the eects of exchange rate uctuations for the relevant
period.
23
Reconciliation of Alternative Performance Measures
EUR, thousand 2020 2019 Pro forma, 2018
Revenues 13,011 14,977 14,463
Other operating income 157 254 889
Material and services -4,213 -5,287 -4,954
Gross prot 8,955 9,944 10,398
Operating prot/loss (EBIT) -2,906 -2,596 -664
Items aecting comparability
PO related expenses 0 139 135
Acquisition related expenses 0 0 191
Adjusted EBIT -2,906 -2,457 -338
Depreciation, amortization and impairment losses 2,173 2,261 1,997
Adjusted EBITDA -733 -196 1,661
24
Organic growth for the Group 2020 2019
Revenue 13,010 14,977
Acquisitions (elimination of revenues for comparability) 0 0
Revenue excluding acquisitions 13,010 14,977
Currency eects 0 -82
Revenue excluding acquisitions and currency eects 13,010 14,895
Organic growth, percent -12.7 %
Organic growth for the Devices segment 2020 2019
Revenue 5,097 7,309
Acquisitions (elimination of revenues for comparability) 0 0
Revenue excluding acquisitions 5,097 7,309
Currency eects 0 -82
Revenue excluding acquisitions and currency eects 5,097 7,227
Organic growth, percent -29.5 %
Organic growth for the Devices segment 2020 2019
Revenue 7913 7668
Acquisitions (elimination of revenues for comparability) 0 0
Revenue excluding acquisitions 7913 7668
Currency eects 0 0
Revenue excluding acquisitions and currency eects 7913 7668
Organic growth, percent 3.2 %
25
Consolidated income statement
In thousand of euro Note Jan 1 - Dec 31, 2020 Jan 1 - Dec 31, 2019
Revenue 2, 3 13,011 14,977
Other operating income 4 157 254
Materials and services 5 -4,213 -5,287
Employee benet expenses 6 -7,319 -7,299
Depreciation, amortisation and impaiment losses 8 -2,173 -2,261
Other operating expenses 7 -2,369 -2,980
Operating result -2,906 -2,596
Finance income 8 452 8
Finance expenses 8 -794 -365
Net nance expenses -341 -356
Loss before income taxes -3,247 -2,952
Income tax expense 10 70 77
Loss for the nancial year -3,177 -2,875
Loss for the nancial year attributable to
Owners of the parent company -3,177 -2,875
Loss per share attributable to owners of the parent company
Basic loss per share (euro) 11 -0.24 -0.32
26
Consolidated comprehensive income statement
In thousand of euro Jan 1 - Dec 31, 2020 Jan 1 - Dec 31, 2019
Loss for the nancial year -3,177 -2,875
Other comprehensive income
Items that may be subsequently reclassied to prot or loss
Foreign currency translation dierence
Other comprehensive income for the nancial year, net of tax 77 14
Total comprehensive income for the nancial year -3,100 -2,861
Total comprehensive loss attributable to
Owners of the parent company
-3,100 -2,861
27
Consolidated balance sheet
In thousand of euro Note Jan 1 - Dec 31, 2020 Jan 1 - Dec 31, 2019
ASSETS
Non-current assets
Goodwill 4,256 4,256
Development costs 5,667 5,218
Customer relationships 1,608 1,829
Technology 738 840
Other intangible assets 485 519
Total intangible assets 12 12,753 12,662
Tangible assets 13 359 406
Right-of-use assets 14 1,165 1,075
Deferred tax assets 10 11 8
Total non-current assets 14,289 14,151
Current assets
Inventories 15 2,539 2,468
Trade receivables 16.21 2,639 2,897
Other receivables 17 998 1,228
Cash and cash equivalents 16 10,608 18,866
Total current assets 16,784 25,459
Total assets 31,073 39,611
28
In thousand of euro Note Jan 1 - Dec 31, 2020 Jan 1 - Dec 31, 2019
LIABILITIES
Non-current liabilities
Borrowings from nancial institutions 19.21 3,520 5,104
Government loans 19.21 2,670 2,998
Lease liabilities 14.19 782 699
Deferred tax liabilities 10 540 616
Total non-current liabilities 7,512 9,416
Current liabilities
Borrowings from nancial institutions 19.21 0 1,766
Government loans 19.21 328 60
Lease liabilities 14.19 425 414
Trade payables 19 595 1,667
Other payables 20 2,141 3,650
Total current liabilities 3,489 7,557
Total liabilities 11,001 16,973
Total equity and liabilities 31,073 39,611
In thousand of euro Note Jan 1 - Dec 31, 2020 Jan 1 - Dec 31, 2019
EQUITY
Share capital
Share premium
Reserve for invested non-restricted equity
Translation dierences
Retained earnings
-14,970 -12,500
Prot (loss) for the nancial year
-3,177 -2,875
Total equity
18 20,073 22,637
29
Consolidated cash ow statement
In thousand of euro Note Jan 1 - Dec 31, 2020 Jan 1 - Dec 31, 2019
Cash ows from operating activities
Loss for the nancial year -3,177 -2,875
Adjustments:
Depreciation, amortisation and impairment losses 7 2,173 2,261
Finance income and nance expenses 9 343 356
Other adjustments 284 466
Cash ows before change in net working capital -377 207
Change in net working capital:
Change in trade and other receivables (increase (-) / decrease (+)) 496 -783
Change in inventories (increase (-) / decrease (+)) -83 -1,346
Change in trade and other payables (increase (+) / decrease (-)) -2,402 2,396
Cash ows before nance items -2,367 475
Interest paid -75 -202
Other nance expenses paid -725 -136
Interest received 366 24
Net cash from operating activities (A) -2,801 161
Cash ows from investing activities
Acquisition of intangible assets 12 -1,553 -1,175
Acquisition of tangible assets 13 -268 -260
30
Net cash from (used in) operating, investing and
nancing activities (A+B+C)
-8,319 16,849
Net increase (decrease) in cash and cash equivalents -8,319 16,849
Cash and cash equivalents at January 1 18,866 2,000
Eect of movements in exchange rate on cash held 61 17
Cash and cash equivalents at December 31 16 10,608 18,866
Net cash used in investing activities (B) -1,820 -1,434
Cash ows from nancing activities
Proceeds from share subscriptions 18 92 23,000
Share issue transaction costs 0 -4,208
Proceeds from loans and borrowings 19 -167 176
Repayment of loans and borrowings 19 -3,233 -460
Repayment of lease liabilities 14.19 -390 -385
Net cash from nancing activities (C) -3,698 18,123
31
Consolidated statement of changes in equity
Equity attributable to owners of the parent company
In thousand of euro Note
Share
Capital
Share
Premium
Reserve for
invested
non-restricted
Translation
dierences
Retained
earnings
Total
Balance at January 1, 2020 80 504 37,341 89 -15,376 22,637
Comprehensive income
Loss for the nancial year - - - - -3,177 -3,177
– translation dierences - - - 77 77
Total comprehensive income for
the nancial year
- - - 77 -3,177 -3,100
Transactions with owners of the
company
Share issue 18 - - - - - -
Share options 6 - - 129 - 406 535
Total transactions
with owners of the company
- 0 129 - 406 535
Balance at December 31, 2020 18 80 504 37,470 166 -18,147 20,073
32
In thousand of euro Note
Share
Capital
Share
Premium
Reserve for
invested
non-restricted
Translation
dierences
Retained
earnings
Total
Balance at January 1, 2019 19 565 18,549 75 -13,656 5,552
Comprehensive income
Loss for the nancial year
- - - - -2,875 -2,875
Other comprehensive income
– translation dierences
- - - 14 - 14
Transactions with owners of the
company
- - - 14 -2,875 -2,861
Total comprehensive income for
the nancial year
Share issue 18 61 -61 18,792 - 694 19,486
Share options 6 - - - - 461 461
Total transactions with owners
of the company
Balance at December 31, 2019 18 80 504 37,341 89 -15,376 22,637
Equity attributable to owners of the parent company
Notes to the consolidated
financial statements
34
1. Corporate information and basis
of accounting
1.1 Corporate information
or ‘Group’) that specialises in hand-held fundus cameras and solutions
for screening of blinding eye diseases, established in 2004.
The Group’s parent company, Optomed Plc. (hereafter the ‘Compa-
ny’) is a Finnish public limited liability company established under
the laws of Finland, and its business ID is 1936446-1. It is domiciled in
1, 90230 Oulu , Finland .
The Board of Directors of Optomed Plc approved these consolidated
nancial statements for issue. According to the Finnish Limited Liability
Companies’ Act, the shareholders have the right to approve or reject
the nancial statements in the Annual General Meeting held after the
publication of the nancial statements. Furthermore, the Annual Ge-
neral Meeting can decide on modications to be made to the nancial
statements.
1.2 Basis of accounting
General policies applied that relate to the consolidated nancial state-
ments as a whole are described in this section 1.2. Accounting policies
that are specic to a component of the nancial statements, together
with descriptions of management judgements, related estimates and
assumptions, have been incorporated into the relevant note.
The consolidated nancial statements are prepared on a historical cost
basis, except for the following that are measured at fair value (refer to
1.2.3 Measurement of fair values below):
— share-based payments
The nancial year of Optomed is the calendar year. The gures in the
nancial statements are mainly presented in thousands of euro. All
gures presented have been rounded, and consequently the sum of
individual gures may deviate from the presented aggregate gure.
Key gures are computed using exact gures.
1.2.1 Consolidation
The consolidated nancial statements incorporate the nancial state-
ments of the parent company Optomed Plc. and of all those subsidiaries
over which the parent company has control at the end of the reporting
period. Optomed controls an entity when Optomed is exposed to, or
has rights to, variable returns from its involvement with the entity and
has the ability to aect those returns through its power to direct the
activities of the entity. Acquired subsidiaries are consolidated from the
date on which control is transferred to Optomed until control ceases.
Refer to Note 23. Related party transactions for disclosures on the
Group structure.
Intra-group transactions, receivables, liabilities and unrealized mar-
gins, as well as distribution of prots within the Group, are eliminated
in preparing the consolidated nancial statements. Optomed had no
non-controlling interests (NCI) during the nancial years in the report
Acquired or established subsidiaries are accounted for by using the
acquisition method.
35
1.2.2 Foreign currency transactions and balances
Items included in the nancial statements of each subsidiary are measu-
red using the currency of the primary economic environment in which
the company operates (‘the functional currency’). The consolidated
nancial statements are presented in Euro, which is the functional and
presentation currency of the parent company.
For those subsidiaries with non-Euro functional and presentation
currency, the income and expenses for the income statement and
comprehensive income statement, and the items for cash ow state-
ment, are translated into Euro using the average exchange rates of the
reporting period. The assets and liabilities for the balance sheet are
translated using the exchange rates prevailing at the reporting date.
The translation dierences arising from the use of dierent exchange
rates explained above are recognized in consolidated other compre-
hensive income.
Any goodwill arising on the acquisition of foreign operations and any
fair value adjustments to the carrying amounts of assets and liabilities
arising on the acquisition of those foreign operations are treated as
assets and liabilities of those foreign operations. They are translated
into Euro using the exchange rates prevailing at the reporting date.
When a foreign operation is sold, or is otherwise partially or completely
disposed of, the translation dierences accumulated in equity are re-
classied in prot or loss as part of the gain or loss on the transaction.
1.2.3 Measurement of fair values
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants
at the measurement date. A number of the Group’s accounting poli-
cies and disclosures require the measurement of fair values, for both
nancial and non-nancial assets and liabilities. When measuring the
fair value of an asset or a liability, the Group uses observable market
data as far as possible. Fair values are categorised into dierent le-
vels in a fair value hierachy based on the inputs used in the valuation
techniques as follows:
— Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities.
— Level 2: inputs other than quoted prices included in Level 1 that are
observable for the asset or liability; either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
— Level 3: inputs for the asset or liability that are not based on obser-
vable market data (unobservable inputs).
Specic valuation techniques used in fair value measurement include:
— Share-based payments – Black-Scholes option pricing model (Note
6.4 Share-based payment plans )
— Intangible assets identied in the Commit acquisition - multi-period
excess earnings method and relief-from-royalty
method.
1.2.4 Operating result
Optomed has determined operating result to be a relevant subtotal in
understanding the Group’s nancial performance. However, IFRS does
not dene the concept of operating result. The Group has dened it
as follows: operating result is the net amount attained when revenues
are added by other operating income, less:
— purchase expenses, adjusted with change in inventories
— employee benet expenses
— depreciation, amortisation and any impairment losses, and
— other operating expenses.
All other items are presented below operating result in the income
statement.
36
1.2.5 Non-current assets held for sale
Non-current assets (or disposal groups) are classied as held for sale,
if their carrying amounts are to be recovered principally through a
sale transaction rather than through continuing use. From the date of
classication, these assets (or disposal groups) are measured at the
lower of their carrying amounts and fair value less the costs to sell,
and the recognition of depreciation or amortisation is discontinued.
1.2.6 Critical management judgments and related
estimates and assumptions
The preparation of nancial statements under IFRS requires manage-
ment to make judgments, estimates and assumptions that aect the
reported amounts of assets and liabilities, and disclosure of contingent
assets and liabilities at the end of the reporting period as well as the
reported amounts of income and expenses during the reporting period.
These estimates and assumptions are based on historical experience
and other justied assumptions, such as future expectations, that Op-
tomed management believes are reasonable under the circumstances
at the end of the reporting period and the time when they were made.
Although these estimates are based on management’s best knowledge
of current events and actions, actual results may ultimately dier from
those estimates. The estimates and underlying assumptions are re-
viewed on an on-going basis and when preparing nancial statements.
Changes in accounting estimates may be necessary if there are changes
in the circumstances on which the estimate was based, or as a result
of new information or more experience. Such changes are recognized
in the period in which the estimate or the assumption is revised.
Use of judgment and estimates
Judgements that management has made in the process of applying
accounting policies and that have the most signicant eect on the
amounts recognised in the nancial statements, relate to the following
areas:
— capitalisation of development costs: determination of development
expenditure eligible for capitalisation (Note 12. Intangible assets )
— leases: determination of lease term (Note 14. Leases )
Assumptions and estimation uncertainties that have a signicant risk
of resulting in a material adjustment to the carrying amounts of assets
and liabilities within the next nancial year are the following:
— goodwill impairment testing (Note 12. Intangible assets )
— capitalisation of development expenditures
(Note 12. Intangible assets )
— Development expenditures impairment testing
(Note 12. Intangible assets)
1.2.7 Adoption of new and amended standards in
future nancial years
Optomed has not yet adopted the following amended standards and
interpretations already issued by the IASB. The Group will adopt these
pronouncements as of the eective date of each of the pronounce-
ments, or if the eective date is not the rst day of the nancial year, as
of the beginning of the next nancial year following the eective date.
Currently Optomed believes that the adoption of these pronouncements
will not have a signicant eect on the future consolidated nancial
statements.
Eective for nancial years beginning on or after
January 1, 2020:
Amendments to References to Conceptual Framework in IFRS Standards
: The revised Framework codies IASB’s thinking adopted in recent
standards. The Conceptual Framework primarily serves as a tool for
the IASB to develop standards and to assist the IFRS Interpretations
37
Committee in interpreting them. It does not override the requirements
of individual IFRSs.
Amendments to IAS 1 Financial Statements: Presentation and IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors - De-
nition of Material : The amendments clarify the denition of material
and include guidance to help improve consistency in the application
of that concept across all IFRS standards. In addition, the explanations
accompanying the denition have been improved.
Other amendments and interpretations are not expected to have an
impact on the consolidated nancial statements when adopted.
2. Segment reporting
2.1 Accounting policy
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur expenses
and for which discrete nancial information is available. Optomed has
two reportable segments, Devices and Software.
Software segment oers products for optimal management of various
screening operations as well as IT solutions and services for storing,
viewing and working with medical images. Also professional IT consul-
ting services for government institutions are included in this segment.
Currently it comprises own screening solution products for diabetic
retinopathy and breast, cervical and bowl cancer screening management
as well as Sectra software solutions and articial intelligence algorithms.
Devices segment consists of handheld fundus camera products, which
are used in ophthalmology, pediatric care, endocrinology, neurology
and primary care. Currently it comprises all Optomed branded camera
products, such as Optomed Smartscope Pro and Optomed Aurora
cameras. Also the OEM cameras are included in this segment Pictor
Plus, Pictor Prestige (Volk), Visuscout 100 (Zeiss), Fundus Module 300
(Haag-Streit) and Signal (Topcon).
In Optomed Group the CEO has been identied as being the chief
operating decision maker responsible for assessing performance of
the segments and making resource allocating decisions. The segment
disclosures presented are based on the internal management repor-
ting. Optomed has not aggregated operating segments into reportable
segments.
38
2020
2.2 Reportable segments
In thousand of euro Devices Software Group Admin Group, Total
External revenue 5,097 7,913 0 13,011
Net operating expenses -2,235 -1,820 0 -4,055
Margin 2,862 6,093 0 8,955
Depreciation and amortisation -1,569 -603 0 -2,173
Other expenses -3,112 -4,167 -2,408 -9,688
Operating result -1,820 1,323 -2,408 -2,906
0 0 -341 -341
Loss before tax expense -1,820 1,323 -2,749 -3,247
Segment assets 10,205 7,836 221 18,263
Capital expenditure 1,510 291 21 1,822
Segment liabilities 452 232 89 774
39
2019
In thousand of euro Devices Software Group Admin Group, Total
External revenue 7,310 7,668 0 14,977
Net operating expenses -3,109 -1,924 0 -5,033
Margin 4,200 5,744 0 9,944
Depreciation and amortisation -1,504 -757 0 -2,261
Other expenses -4,609 -4,077 -1,593 -10,279
Operating result -1,913 909 -1,593 -2,596
0 0 -356 -356
Loss before tax expense -1,913 909 -1,949 -2,952
Segment assets 10,351 7,864 193 18,408
Capital expenditure 1,172 177 0 1,349
Segment liabilities 1,582 272 73 1,927
40
to which Optomed expects to be entitled in exchange for those goods
or services.
Devices segment sells medical imaging tools and solutions to distri-
butors. The agreements with distributors are frame agreements. An
enforceable contract is created based on each purchase order com-
bined with the frame agreement. Typical sales agreements for the
Software segment include maintenance service agreements, resource
hiring agreements, service portal agreements and software package
agreements.
For medical imaging tools and solutions each product in a purchase
order forms a separate performance obligation as:
— the distributor can benet from the good on its own, and
— the promise to transfer the good to the customer is separately
identiable from other promises in the contract.
Extended warranty may be sold separately, it is also a separate per-
formance obligation.
For Software segment:
— A maintenance contract has one performance obligation containing
overall service for the period agreed upon.
— A resource hiring contract is based on hourly fee. Each hour of
consulting service is a separate performance
obligation.
— A service portal agreement includes following separate performance
obligations: implementation, additions for
new service providers, recongurations and continuous service pro-
vided.
— A software package agreement includes following separate perfor-
mance obligations: licences, implementation and
continuous maintenance service.
Transaction prices in the contracts are mostly xed. Some contracts
may, however, include a minimum amount for transactions in a certain
period, for example. The variable fee is constrained to the amount
for which it is highly probable that a signicant reversal will not occur
2.3 Geographic information
In presenting the geographic information, segment assets were
based on the geographic location of the assets. Segment assets
are measured in the same way as in the IFRS nancial statements.
Disaggreration of consolidated revenue by geographical market is
disclosed in Note 3.2 Disaggregation of revenue.
2.4 Major customers
The Group’s revenues from two major customers in the nancial years
2020-2019 were approximately as follows: from one customer EUR 2,1
million (2020), and EUR 1.9 million (2019), and from another customer
EUR 2,1 million (2020) and EUR 0,8 million (2019).
3. Revenue
3.1 Accounting policy
Optomed recognises revenue to depict the transfer of promised goods
or services to customers in an amount that reects the consideration
In thousands of euro 2020 2019
Finland 14,011 13,778
China 267 365
Total 14,278 14,143
Non-current assets
1
1 Group's non-current assets exclude nancial instruments and deferred tax assets. Optomed has
no dened benet pension plans and thus no related assets.
41
In thousands of euro 2020 2019
Finland 7,777 60 % 7,308 49 %
China 2,443 19 % 1,795 12 %
Other 2,791 21 % 5,874 39 %
Total 13,011 100 % 14,977 100 %
subsequently. The terms of payment applied vary to some extent geo-
graphically and in dierent business areas, but the term of payment
provided is nonetheless always clearly less than a year. Consequently,
contracts do not include a signicant nancing component.
Optomed allocates the transaction price for medical imaging tools and
solutions to performance obligations based their stand-alone selling
prices using price lists. For service portal and software package contracts
the transaction price is allocated based on costs incurred plus margin.
For Devices segment the revenues from sales of medical imaging tools
and solutions are recognised when the performance obligation is satis-
ed by transferring a promised good to the distributor, i.e. at a point
in time. The control is transferred when Optomed has present right to
payment, signicant risks and rewards of ownership have transferred
to the distributor as well as the legal title and physical possession of
the products.
In respect of Software segment:
— Service revenues are recognised over time as the customer simul-
taneously receives and consumes the benets
provided by Optomed’s performance.
— Revenues from implementation projects are recognised at a point
in time when the customer gets control and is able to
start using the end product.
— Licence revenues are recognised at the point in time when the
customer gets control. This is based on the nature of
licences, being to provide a right to use intellectual property of the
Software segment as that intellectual property
3.2 Disaggregation of revenue
In the following tables, consolidated revenue is disaggregated by
geographical market1 and timing of revenue recognition.
Trade receivables and related credit losses are described in Notes 16. Financial assets and 21.5
Liquity risk.
2020 2019
Products and services
transferred at a point
in time
9,934 76 % 9,884 66 %
Services transferred
over time
3,077 24 % 5,094 34 %
Total 13,011 100 % 14,977 100 %
42
4. Business combination
4.1 Accounting policy
Other operating income comprises income from activities outside the
ordinary business of Optomed. Examples include government grants,
rental income and gains from disposals of tangible and intangible assets.
The Group recognises a government grant only when:
— there is reasonable assurance that Optomed will comply with the
conditions attached to the grant, and
— the grant will be received.
Income-related grants are recognised in prot or loss over the periods
necessary to match them with the related costs that they are intended
to compensate. They are presented under the line item Other operating
income. Asset-related grants, such as government grants received for
development purposes, are deducted in arriving at the carrying amount
of the assets. The grant is recognised over the life of the asset as a
reduced depreciation expense.
4.2 Assumptions and estimation uncertainties
from Business Finland. In 2019 Optomed most signicant received
grant was from the EU Horizon 2020 funding programme for research
and innovation. The Horizon grants were deducted from the carrying
amount of related capitalised development costs, as applicable.
5.Materials and services
5.1 Breakdown of materials and services expense
During the nancial years 2020-2019 Optomed has received government
grants from various organisations, such as Business Finland (previously
Tekes). The most signicant grants for the year 2020 Optomed received
In thousands of euro 2020 2019
Other operating income 157 254
Total 157 254
In thousands of euro 2020 2019
Purchase expenses -2,964 -4,768
External services
-967 -259
-282 -259
-4,213 -5,287
43
6. Employee benefits
6.1 Accounting policy
Employee benets include the following:
a) short-term employee benets b) post-employment benets
c) other long-term employee benets (no such benets were provided
during the nancial years 2018-2019)
d) termination benets, i.e. benets provided in exchange for the
termination of an employment
(no such benets were provided during the nancial years 2018-2019)
e) share-based payments (refer to Note 6.4 Share-based payment
plans below).
a) Wages, salaries, fringe benets, annual leave and bonuses are in-
cluded in short-term employee benets. They are recognised in the
period in which the work is performed.
b) Post-employment benets are payable to employees after the
completion of employment. In Optomed, these benets are related to
pensions. Pension coverage of the Group is arranged through external
pension insurance companies. Pension plans are classied as either
dened contribution or dened benet plans. Optomed only has de-
ned contribution plans. A dened contribution plan is a pension plan
under which Optomed pays xed contributions into a separate entity.
Optomed has no legal or constructive obligations to pay further contri-
butions if the fund does not hold sucient assets to pay all employees
the related benets. All other plans are classied as dened benet
plans. The contributions for dened contribution plans are recognized
as employee benet expense in those periods to which they relate.
Prepaid contributions are recognized as an asset to the extent that a
cash refund or a reduction in the future payments is available.
c) Other long-term employee benets are all employee benets other
than short-term employee benets, post-employment benets and
termination benets. Examples include long-term paid absences such
as sabbatical leave.
d) Termination benets are not based on work performance but on
the termination of employment. These benets consist of severance
payments. Termination benets result either from the Group’s decision
to terminate the employment or the employee’s decision to accept
the benets oered by Optomed in exchange for the termination of
employment. Such benets are recognised at the earlier of: when Op-
tomed can no longer withdraw the oer of the benets, and when the
Group recognises costs for a restructuring that involves the payment
of termination benets.
e) The Group has ve share-based incentive plans for the Group key
personnel, which are share option plans. The purpose of the plans is
to encourage the employees to work on a long-term basis in order
to increase shareholder value, and to commit the key employees to
the company. The payments for the incentives are made with equity
instruments.
Share-based compensation is measured at the grant date and expen-
sed using the straight-line method in the income statement over the
vesting period. The expense determined at grant date is based on
Optomed’s estimate of the number of share options to which it is
assumed that rights will vest by the end of the vesting period. The fair
value is determined using the Black-Scholes pricing model. The Group
updates its estimate of the nal number of the share options that will
vest at each reporting date. Changes in this estimate are recognised
in the income statement. The options will be returned to Optomed in
case the employee leaves the Group before the subscription period
has commenced. There are no other vesting conditions.
44
When the option rights are exercised, the proceeds received are re-
cognised in accordance with the terms of the plan under Reserve for
invested non-restricted equity, net of any transaction costs.
6.2 Expenses recognised in prot or loss
2009 plan
At May 29, 2009 the extraordinary general meeting decided on the
issuance of a maximum of 120,000 option rights that entitle their ow-
ners to subscribe for a total of 120,000 A shares in the company, to the
Group’s key persons. The Board of Directors issued a total of 100,000
option rights, for which 20,000 were used to share subscriptions prior
to January 1, 2016. The share subscription period for remaining options
rights commenced at July 1, 2020 and it expired at July 1, 2021. This
option program was updated in EGM meeting 13.9.2019
2015 - 2017 plan
At August 14, 2015 the meeting of shareholders decided on the issuan-
ce of a maximum of 640,000 option rights that entitle their owners to
subscribe for a total of 640,000 A shares in the company, to the Group’s
key persons. During the years 2015-2018 the Board of Directors issued
a total of 657,000 option rights, for which 89,000 were returned to the
company, resulting in 568,000 option rights issued on a net basis. The
numbers and share subscription periods are as follows:
— 460,000 pcs: July 1, 2020 - July 1, 2024
— 60,000 pcs: January 1, 2020 - December 31, 2021
— 24,000 pcs: July 1, 2020 - December 31, 2024
— 24,000 pcs: July 1, 2021 - December 31, 2024.
This option program was updated in EGM meeting 13.9.2019
2018 plan
The annual general meeting held at February 1, 2018 decided on the
issuance of a maximum of 440,000 option rights that entitle their ow-
ners to subscribe for a total of 440,000 A shares in the company, to
the Group’s key persons. During the year 2018 the Board of Directors
issued a total of 424,000 option rights, for which 4,000 were returned
to the company, resulting in 420,000 option rights issued on a net basis.
In thousands of euro 2020 2019
Wages and salaries -5,827 -5,677
Contributions to dened contribution
post-employment plans
-842 -894
Other social security expenses -245 -267
Share-based payment plans -406 -461
Total -7,319 -7,299
2020 2019
Average number of employees for
the nancial year
105 106
6.3 Number of personnel
6.4 Share-based payment plans
The gures presented below reect the changes in the number of
options following from the share split carried out in November 2019
45
The numbers and share subscription periods are as follows:
— 110,000 pcs: July 1, 2020 - December 31, 2024
— 106,000 pcs: July 1, 2021 - December 31, 2024.
— 84,000 pcs July 1,2021 - December 31, 2024.
— 100,000 Pcs September 1 - 2020-December 31 2024
— 20,000 pcs July 1 2020 - December 31, 2024.
This option program was updated in EGM meeting 13.9.2019
2019D plan
The general meeting of 13.9. amended 14.11.2019 decided on the
issuance of a maximum of 72,000 option rights that entitle their ow-
ners to subscribe for a total of 72,000 A shares in the company, to the
Group’s key persons. During the year 2019 the Board of Directors issued
a total of 72,000 option rights The numbers and share subscription
periods are as follows:
-72,000 Pcs January, 1,2023-December 31, 2023
2020A plan
The general meeting of 11.6.2020 decided on the issuance of a maxi-
mum of 150,000 option rights that entitle their owners to subscribe
for a total of 150,000 A shares in the company, to the Group’s key
persons. During the year 2020 the Board of Directors issued a total
of 98,000 option rights The numbers and share subscription periods
are as follows:
-98,000 Pcs January, 1,2023-December 31, 2023
46
Key terms and measurement of option plans
Plan 2009 2015 2017 2017B 2018C
Maximum number of options 80,000 250,000 210,000 58,000 266,000
Number of options issued 80,000 250,000 210,000 58,000 266,000
Issued 2009 2015-2018 2017 2017 2018
Vesting period 2009 - 2020 2015 - 2020 2017 - 2020 2017 - 2020 2018 - 2021
Vesting condition Employment Employment Employment Employment Employment
Option subscription price 0.7 3.50 3.50 3.50 3.50
Fair value at grant date
-1
) 2.25 2.17 2.09 2.09
Total fair value (1,000 EUR)
-1
) 562 455 121 556
Plan 2019A 2019B 2019C 2019D 2020A
Maximum number of options 84,000 100,000 20,000 72,000 150,000
Number of options issued 84,000 100,000 20,000 72,000 98,000
Issued 2019 2019 2019 2019 2020
Vesting period 2019 - 2021 2019 - 2020 2019 - 2020 2019 - 2023 2020 - 2023
Vesting condition Employment Employment Employment Employment Employment
Option subscription price 3.50 3.50 3.50 5.00 3.50
Fair value at grant date 2.09 2,02-2,09 2.02 1.69 2.97
Total fair value (1,000 EUR) 175 205 40 122 446
47
The grant-date fair value of options is determined using the Black
Scholes option pricing model that takes into account the following
key inputs:
— expected fair value of the underlying share EUR 5.0 - 6.5
— expected volatility 30 - 60 %
— the term of the option 1.3 - 3.7 years
1) No fair value was determined for the 2009 plan, since the vesting period closed in 2011. These
options had no impact on the 2019-2020 consolidated nancial statements.
Changes in outstanding share options
Pieces 2020 2019
Outstanding at January 1 1,140,000 870,000
Granted during the year 98,000 272,000
Forfeited during the year -2,000
Exercised during the year -71,000 -
Expired during the year - -
Outstanding at December 31 1,167,000 1,140,000
Exercisable at December 31 740,000 0
In thousands of euro 2020 2019
Equity-settled share-based payments -406 -461
In thousands of euro 2020 2019
Travel expenses -222 -651
Marketing expenses -422 -489
IT expenses -353 -385
Oce expenses -168 -189
Other administrative expenses -714 -504
Research and development expenses -276 -356
Other xed expenses -212 -407
Total -2,367 -2,980
In case the share options issued are fully exercised, the number of
outstanding A shares will increase by 9.2 %. The subscription prices
will be recorded in the Reserve for invested non-restricted equity.
Expenses from share-based payment plans
Total expenses arising from share-based payment plans recognised
as part of employee benets were as follows:
7. Other operating expenses
7.1 Accounting policy
Optomed’s other operating expenses include:
— expenses other than the cost of goods sold, such as travel, marke-
ting, IT and oce expenses.
— losses on the disposal of tangible and intangible assets.
7.2 Breakdown of other operating expenses
Other operating expenses also comprise changes in expected credit
losses and realised credit losses.
48
7.3 Auditor’s fees
In thousands of euro 2020 2019
Intangible assets
Development costs -1,014 -848
Customer relationships -222 -222
Technology -102 -136
Other intangible assets -129 -74
Total -1,467 -1,280
In thousands of euro 2020 2019
Tangible assets
Machinery and equipment -313 -595
Total -313 -595
Total depreciation and amortisati-
on / owned assets
-1,779 -1,875
In thousands of euro 2020 2019
Foreign exchange gains 364 23
Interest income 8 3
Other nance income 81 -18
Total 452 8
8. Depreciation, amortisation and
impaiment losses
8.1 Accounting policy
Depreciation and amortisation is the systematic allocation of the dep-
reciable amount of a tangible / an intangible asset over its useful life.
Optomed generally applies the straight-line method. An impairment
loss is the amount by which the carrying amount of an asset exceeds
its recoverable amount. Refer to Notes 12. Intangible assets and 13.
Tangible assets.
8.2 Depreciation, amortisation and impaiment losses
by asset category
8.3 Impairment losses
The Group recognised impairment losses on intangible assets during
nancial year 2020 of 160 thousand euros and 0 in 2019
There were no recognised impairment losses on tangible assets during
years 2020,2019.
9. Finance income and expenses
The accounting policies for nancial assets and nancial liabilities are
presented in Note 17. Financial assets and 20. Financial liabilities.
Recognised through prot or loss
9.1 Finance income
In thousands of euro 2020 2019
Audit fees -77 -85
Tax advisory services -23 -24
Other services -29 -510
Total -129 -618
49
In thousands of euro 2020 2019
Foreign exchange losses -466 -3
Interest expenses -171 -371
Other nance expenses -157 9
Total -794 -365
Net nance expenses -341 -356
9.2 Finance expenses
9.3 Borrowing costs - government loans
Optomed has capitalised under Development costs those borrowing
costs incurred from the government loans (Business Finland) granted
for development activities, refer also to Note 19. Financial liabilities. The
capitalisation rate used to determine the amount of borrowing costs to
be capitalised was 1 % for the years 2020-2019, being the interest rate
applicable to those loans during the said annual periods.The capitalised
costs amounted to EUR 14 thousand (2020) and EUR 8 thousand (2019),
which were recorded as a deduction to interest expenses.
10. Income taxes
10.1 Accounting policy
The income tax expense for the period consists of:
— current tax, and
— change in deferred tax assets and deferred tax liabilities.
Income tax is recognized in the income statement, except that the in-
come tax eects of items recognized in other comprehensive income
or directly in equity are similarly recognized in other comprehensive
income or equity.
The current income tax charge is calculated on the basis of the taxable
income determined in accordance with the tax rates and laws enacted
(or substantively enacted) in the countries where Optomed operates
and generates taxable income. Income taxes are adjusted with any
taxes relating to previous nancial years. Other taxes not based on
income are included within other operating expenses. Current taxes
are calculated using the tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting period.
Taxable prot diers from the prot reported in the consolidated
income statement, since:
— some income or expense items are taxable or deductible in other
years, and/or
— certain income items are not taxable or certain expense items are
non-deductible for taxation purposes.
Generally deferred tax is provided using the liability method on:
— temporary dierences arising between the tax bases of assets and
liabilities and their carrying amounts
in the nancial statements, and
— unused tax losses or unused tax credits.
Deferred tax assets are recognised for deductible temporary dieren-
ces only to the extent that it is probable that future taxable prots will
be available, against which Optomed can utilise deductible temporary
dierences. The amount and the probability of the utilisation of de-
ferred tax assets are reviewed at the end of each reporting period. A
valuation allowance is recognized against the deferred tax asset, if the
utilisation of the related tax benet is no more considered probable.
Deferred tax liabilities are usually recognized in full. However, deferred
tax liability is not accounted for, if it arises from:
50
— the initial recognition of goodwill, or
— the initial recognition of an asset or a liability in a transaction which
is not a business combination, and
at the time of the transaction, aects neither accounting prot nor
taxable prot (tax loss).
A deferred tax liability is recognised for investments in subsidiaries,
except to the extent that Optomed is able to control the timing of the
reversal of the temporary dierence and it is probable that the tem-
porary dierence will not reverse in the foreseeable future.
Deferred tax assets and deferred tax liabilities are determined using tax
rates (and laws) that are expected to apply when the related deferred
tax asset is realized or the deferred tax liability is settled. The applied
tax rate is the rate enacted or substantively enacted by the balance
sheet date in the respective countries.
10.2 Current tax
In thousands of euro 2020 2019
Current tax for the reporting year - -
Current tax adjustments for prior years -9 -
Change in deferred taxes 80 77
70 77
2020 2019
Prot before income tax -3,247 -2,952
Tax using the Finnish corporate tax rate
(20 %)
649 590
Eect of tax rate in foreign
jurisdictions
12 14
Unrecognised deferred tax assets on
taxable losses
-261 -255
Non-deductible expenses 7 -14
Share option expense -107 -92
Depreciation and amortisation not
deducted for tax purposes
-249 -240
Consolidation-related adjustments 20 73
Taxes in the income statement 70 77
10.3 Reconciliation between income tax expense
in prot or loss and tax expense calculated using
the Finnish corporate tax rate
10.4 Income taxes recognised in other
comprehensive income
During the years 2019-2020 the Group did not recognise any income
taxes in other comprehensive inco
51
10.5 Movements in deferred tax asset and deferred tax liability balances
In thousands of euro
At Jan 1,
2020
Business
combinations
Recognised
through
prot or loss
Recognised
in equity
Exchange
dierences and
other changes
At Dec 31,
2020
Deferred tax assets
Right-of-use assets 8 - 3 - - 11
Total 8 3 - - 11
Deferred tax liabilities
PPA Intangible assets -534 - 65 - - -469
Development costs -82 - 12 - - -70
Total -616 - 76 - - -540
Total deferred tax assets and deferred tax liabilities -608 - 76 - - -529
In thousands of euro
At Jan 1,
2019
Business
combinations
Recognised
through
prot or loss
Recognised
in equity
Exchange
dierences and
other changes
At Dec 31,
2019
Deferred tax assets
Right-of-use assets 8 - - - - 8
Total
-
- 8
Deferred tax liabilities
PPA Intangible assets -534 - 65 - - -534
Development costs -82 - 12 - - -82
Total -616 - 77 - - -616
Total deferred tax assets and deferred tax liabilities -608 - 77 - - -608
2020
2019
52
In thousands of euro Dec 31, 2020 Dec 31, 2019
Tax losses approved by tax authorities 10,409 6,129
Depreciation and amortisation not
deducted for tax purposes
4,702 3,455
10.6 Group’s tax losses and depreciation and
amortisation not deducted for tax purposes
These tax losses relate to Optomed Plc and its Chinese subsidiaries.
The Group has not recognised any deferred tax asset on these losses
as at the time of preparation of these nancial statements it is unlike-
ly that these entities will generate taxable income against which the
losses could be utilised before their expiration dates. The losses will
expire in the years 2019-2029.
The depreciation and amortisation not deducted for tax purposes
relate to Optomed Plc.
11. Loss per share
11.1 Accounting policy
Basic and diluted earnings (loss) per share
Basic earnings (loss) per share is calculated by dividing:
— the prot (loss) attributable to owners of the parent company
— by the weighted average number of ordinary shares (A and C shares)
outstanding during the nancial year.
In calculating the diluted earnings (loss) per share, the dilutive eect
of all dilutive potential ordinary shares is taken into account in the
weighted average number of outstanding shares. The Group’s dilutive
potential ordinary shares comprise the share-based incentive plans
payable in shares.
11.2 Loss per share
2020 2019
Loss attributable to owners of the
parent company (in thousands of euro)
-3,177 6,129
Weighted average number of
shares outstanding during the
nancial year (pcs)
13,262,766 8,935,654
Basic loss per share (EUR/share) -0.24 -0.32
The table presented above reects changes in the number of shares
following the resolution of the Extraordinary General Meeting on 14
November 2019 to split the shares of the company with a ratio 1:20.
Diluted loss per share is not presented, as the results for the nancial
years 2019 and 2020 were negative and thus the dilutive instruments
would have an undilutive eect on loss per share.
53
nerate probable future economic benets.
— The Group has adequate technical, nancial and other resources
available to complete the development and
to use or sell the intangible asset
— Optomed is able to measure reliably the expenditure attributable to
the intangible asset during its development. Capitalised development
costs comprise all directly attributable costs (mainly labour) necessary
to prepare the asset to be capable of operating in the manner inten-
ded. Optomed has also:
— capitalised borrowing costs arisen from government loans granted
for development purposes, and
— deducted an applicable amount of major government grants re-
ceived for development activities from
the carrying amount.
Development expenditure that was initially expensed is not capitali-
sed at a later date. The estimated useful life for development costs
is 10 years.
Research is original and planned investigation Optomed undertakes
with the prospect of gaining new scientic or technical knowledge and
understanding. Such costs are expensed as incurred.
c) Customer relationships and technology: these assets were measu-
red at fair value at the acquisition date using the multi-period excess
earnings method and the relief-from-royalty method. Their estimated
remaining useful lives are 10 years.
d) Other intangible assets: An intangible asset is recognised only if
it is probable that the expected future economic benets that are
attributable to the asset will ow to Optomed, and the cost of the
asset can be measured reliably. All other expenditure is expensed as
incurred. Group’s other intangible assets mainly comprise patents
and trademark rights, which are amortised on a straight-line basis
over their estimated useful lives (10 years).
12. Intangible assets
13.1 Accounting policy
The Group’s intangible assets comprise the following: a) goodwill, b)
development costs, c) customer relatioships and technology (identied
in the Commit acquisition) and d) other intangible assets.
a) Goodwill: The excess of the
— consideration transferred
— amount of any non-controlling interest in the acquired entity,
measured at fair value, and
— acquisition-date fair value of any previous equity interest in the
acquired entity,
over the fair value of the net identiable assets acquired is recorded
as goodwill. Goodwill reects e.g. expected future synergies resulting
from acquisitions. Goodwill is not subject to amortisation but is tested
annually for impairment, or more frequently if there is any indication
that it might be impaired, refer to Note 12.3 below. Goodwill is carried
at historical cost less accumulated impairment losses.
b) Development costs: Development is the application of research
ndings or other knowledge to a plan or design for the production of
new or substantially improved materials, devices, products, processes,
systems or services before the start of commercial production or use.
Optomed capitalises such costs when all the following criteria are met:
— Optomed can demonstrate the technical feasibility of completing
the intangible asset so that it will be
available for use or sale.
— Optomed intends to complete the intangible asset and use or sell it.
— Optomed is able to use or sell the intangible asset.
— Optomed is able to demonstrate how the intangible asset will ge-
54
Optomed reviews the amortisation periods and the amortisation
methods applied at least at each nancial year-end. If the expected
useful life of the asset is dierent from previous estimates, the amor-
tisation period shall be changed accordingly. The changes of useful
lives can be due to e.g. technical development, changes in demand
or competition, for example.
The Group assesses, at each reporting date, whether there is an indica-
tion that an intangible asset other than goodwill may be impaired. If any
indication exists, Optomed estimates the asset’s recoverable amount.
An impairment loss is recognised in the income statement when the
carrying amount of an asset exceeds its recoverable amount.
12.2 Assumptions and estimation uncertainties –
development costs
Optomed capitalises development expenditure as an intangible asset
where the related criteria are met (refer to 12.1 Accounting policy
above). This requires management to make judgement on when all
of the criteria for capitalisation are met and when to cease capitalisa-
tion and start amortising the asset. The point at which development
costs meet the criteria for capitalisation is dependent on Optomed
management’s judgement of, for example, the point at which technical
feasibility is demonstrable.
In impairment testing the recoverable amount of development costs
are determined based on value-in-use calculations. The calculations
use cash ow projections approved by management covering a four-
year period. Cash ows beyond the four-year period are extrapolated
using the estimated steady growth rate of 1.8 %. The cash ow pro-
jections exclude expansion investments. The discount rate is dened
as WACC (weighted average cost of capital), which reects the total
cost of equity and debt while considering the asset-specic risks. The
pre-tax discount rate was 13.6% (13.6%) and the post-tax discount
rate 11.2% (11.2%)
The sensivity analysis is prepared in respect of the discount rate and the
terminal growth rate applied beyond the four-year projection period.
The changes in these key assumptions - holding other assumptions
constant - would result in the recoverable amount of the tested assets
to equal their carrying amount as at December 31, 2020.
55
In thousands of euro Goodwill
Develop-
ment costs
Customer
relationships
Technology
Other
intangible
assets
Total
Cost
Balance at January 1 4,256 8,246 2,222 1,023 859 16,606
Business combinations - - - - - -
Additions - 1,463 - - 86 1,549
Balance at December 31 4,256 9,709 2,222 1,023 945 18,156
Accumulated amortisation and impairment losses
Balance at January 1 - -3,029 -392 -184 -340 -3,945
Amortisation - -854 -222 -102 -121 -1,298
Impairment losses - -160 - - - -160
Eect of movements in exchange rates - - - - - -
Balance at December 31 - -4,043 -614 -286 -461 -5,403
Carrying amount at Jan 1 4,256 5,218 1,829 840 519 12,662
Carrying amount at Dec 31 4,256 5,667 1,608 738 485 12,753
12.3 Reconciliation of carrying amounts
At December 31, 2020
56
In thousands of euro Goodwill
Develop-
ment costs
Customer
relationships
Technology
Other
intangible
assets
Total
Cost
Balance at January 1 4,256 7,353 2,222 1,023 543 15,397
Business combinations - - - - - -
Additions - 894 - - 316 1,210
Balance at December 31 4,256 8,246 2,222 1,023 859 16,606
Accumulated amortisation and impairment losses
Balance at January 1 - -2,181 -170 -82 -168 -2,601
Amortisation - -848 -222 -102 -172 -1,344
Balance at December 31 - -3,029 -392 -184 -340 -3,945
Carrying amount at Jan 1 4,256 5,172 2,051 942 376 12,796
Carrying amount at Dec 31 4,256
5,218 1,829 840 519 12,662
At December 31, 2019
The research and development costs expensed amounted to EUR 1,659 thousand (2020) and EUR 1,774 thousand (2019), mainly comprising
personnel expenses.
57
12.4 Impairment testing of goodwill
12.4.1 Accounting policy
For the purposes of impairment testing goodwill is allocated to the
cash-generating units (CGUs) or the groups of CGUs that are expected
to benet from the business combination in which the goodwill arose.
A cash-generating unit is the smallest identiable group of assets in
Optomed that generates inows that are largely independent from the
cash inows from other assets or groups of assets. A cash-generating
unit is impaired when its carrying amount exceeds its recoverable
amount. The recoverabe amount is:
— the higher of the asset’s or CGU’s fair value less costs of disposal, and
— its value in use.
Optomed determines recoverable amounts based on value-in-use
calculations prepared using discounted future net cash ows.
12.4.2 Assumptions and estimation uncertainties
At each balance sheet date Optomed management assesses if there is
any indication of impairment of goodwill (or other intangible, tangible
asset or right-of-use asset). Review is based on indicators that measure
economic performance, such as Group’s management reporting as
well as economic environment and market follow-up.
Such indications may include, among others:
— unexpected changes in signicant factors underlying impairment
tests (revenues, protability levels and changes in
prevailing interest rates), and
— changes in market conditions.
The recoverable amount determined in the testing process is based
on assumptions and estimates made by management on future sales,
production costs, sales growth rate and discount rate, among others.
Optomed has allocated the goodwill arisen from the Commit acquisition
to the Software operating segment. This segment establishes a single
cash-generating unit. The carrying amount of the assets amounted to
EUR 7,864 thousand as at December 31, 2020, including the goodwill
of EUR 4,256 thousand.
In impairment testing the recoverable amount of the Software segment
is determined based on value-in-use calculations. The calculations use
cash ow projections approved by management covering a ve-year
period. Cash ows beyond the ve-year period are extrapolated using
the estimated steady growth rate of 1.8 %. The cash ow projections
exclude expansion investments. The discount rate is dened as WACC
(weighted average cost of capital), which reects the total cost of equity
and debt while considering the asset-specic risks. The pre-tax discount
rate was 13.6% (13.6%) and the post-tax discount rate 11.2% (11.2%.)
The sensivity analysis is prepared in respect of the discount rate and the
terminal growth rate applied beyond the ve- year projection period.
The changes in these key assumptions - holding other assumptions
constant - would result in the recoverable amount of the tested assets
to equal their carrying amount as at December 31, 2020:
— The pre-tax discount rate should increase by 3.8 percentage point.
— The terminal growth rate should decrease by 7.7 percentage point.
Based on the impairment test carried out as at December 31, 2020
the goodwill was not impaired.
58
13. Tangible assets
13.1 Accounting policy
Tangible assets acquired by Optomed held for use are stated in the
balance sheet at their cost. The cost comprises directly attributable
incremental costs incurred in their acquisition and installation. Sub-
sequently tangible assets are carried at cost, less any accumulated
depreciation and any accumulated impairment losses. Ordinary repairs
and maintenance costs are expensed during the reporting period in
which they are incurred. Government grants are accounted for by
reducing the carrying amount of the asset. The grant is then recognised
in prot or loss over the useful life of the asset by way of a reduced
depreciation charge.
Depreciation is charged so as to write o the cost of assets using the
straight-line method, over their estimated useful lives, as follows:
— Production machinery and equipment: six years
— Other machinery and equipment: three years
— Oce furniture: three years
— Cars: three years
Expected useful lives and residual values are reviewed at least at each
nancial year-end and if they dier signicantly from previous estimates,
the useful lives are revised accordingly. Recognition of depreciation is
discontinued when a tangible asset is classied as held for sale. The
Group assesses, at each reporting date, whether there is an indica-
tion that a tangible asset may be impaired. If any indication exists,
Optomed estimates the asset’s recoverable amount. An impairment
loss is recognised when the carrying amount of an asset exceeds its
recoverable amount.
The gain or loss arising on the disposal or retirement of a tangible asset
is determined as the dierence between any net sale proceeds and
the carrying amount of the asset and is recognised in other operating
income or other operating expenses.
13.2 Reconciliation of carrying amounts
2020 2019
Cost
Balance at January 1
Business combinations 1,992 1,729
Additions 265 262
Balance at December 31 2,257 1,992
Accumulated depreciation and im-
pairment losses
Balance at January 1 -1,585 -990
Depreciation -313 -595
Balance at December 31 -1,898 -1,585
Carrying amount at January 1 406 739
Carrying amount at December 31 359 406
Machinery and equipment
Refer to Note 14. Leases for disclosures on Group’s tangible assets
acquired under lease agreements.
59
14. Leases
14.1 Accounting policy
The Group acts as a lessee leasing mainly business premises, IT equip-
ment as well as other machinery and equipment. As a general rule,
Optomed recognises a leased asset (right-of-use asset) and a lease
liability for all leases, except for short-term leases and leases of low-va-
lue items (the accounting treatment is described below). The Group
assesses whether a contract is or contains a lease at inception of a
contract. A contract is or contains a lease if the contract conveys the
right to control the use of an identied asset for a period in exchange
for consideration.
The Group recognises a right-of-use asset and a lease liability at the
lease commencement date. The right-of- use asset is initially measured
at cost, which comprises:
— the amount of the initial measurement of the lease liability
— any lease payments made at or before the commencement date,
less any lease incentives (e.g. lease-free months)
— any initial direct costs incurred by Optomed, and
— an estimate of restoration costs to be incurred by Optomed.
After the commencement date the right-of-use assets are measured
at cost less any accumulated depreciation and any accumulated im-
pairment losses and adjusted for certain remeasurements of the lease
liability. The right-of-use asset is depreciated using the straight-line
method, from the commencement date to the earlier of the end of the
useful life of the right-of-use asset, or the end of the lease term. The
estimated useful life for the business premises applied by Optomed is
three years. The right-of-use asset is tested for impairment where ne-
cessary and any impairment loss identied is recorded in prot or loss.
Initially the lease liability is measured at the present value of the lease
payments that are not paid at the commencement date. The discount
rate used by the Group is Optomed’s incremental borrowing rate. Lease
payments included in the measurement of the lease liability comprise:
— xed payments, including in substance xed payments
— variable lease payments that depend on an index or a rate, initially
measured using the index or rate as at
the commencement date of the contract
— amounts expected to be payable under a residual value guarantee,
and
— the exercise price under a purchase option that the Group is rea-
sonably certain to exercise.
Subsequently the lease liability is measured at amortised cost using
the eective interest method. It is remeasured when there is a change
in future lease payments arising from change in an index or rate, if
there is a change in the Group’s estimate of the amount expected to
be payable under a residual value guarantee or if the Group changes
its assessment of whether it will exercise a purchase, extension or
termination option. When a lease liability is remeasured in this way,
a corresponding adjustment is made to the carrying amount of the
right-of-use asset or is recorded in prot or loss if the carrying amount
of the right-of-use asset has been reduced to zero.
Optomed has elected not to recognise right-of-use assets and lease
liability for:
— short-term leases (that have a lease term of 12 months or less)
— leases of low-value assets (each asset with a value of approximately
EUR 5,000 or less when new).
Such assets include IT equipment as well as other machinery and
equipment.
The Group recognises the lease payments associated with above-men-
tioned leases as an expense on a straight-line basis over the lease term.
60
14.2 Management judgements
Some business facility leases of the Group include termination options.
Optomed uses such terms in its contract management to maximise
operational exibility for its business. Termination options are consi-
dered on a case-by-case basis following a regular management asses-
sment. The factors considered include, for example, contractual terms
and conditions for optional periods compared with market rates, the
importance of the underlying asset to Optomed’s operations as well
as termination and replacement costs.
14.3 Amounts recognised in income statement
In thousands of euro 2020 2019
Expense relating to leases of low-value
assets1 (that are not short-term leases)
-6 -6
Depreciation charge for right-of-use assets by
class of underlying asset (business premises)
(included in Depreciation, amortisation and
impairment losses in the income statement)
-394 -386
Interest expense on lease liabilities
(included in Finance expenses)
-32 -30
In thousands of euro 2020 2019
Additions to right-of-use assets 484 378
Depreciation charge for right-of-use assets -394 -386
Carrying amount at the end of
the nancial year
1,165 1,075
In thousands of euro 2020 2019
Current 425 414
Non-current 782 699
Total 1,207 1,113
Total cash outow for leases -390 -385
14.4 Amounts presented in cash ow statement
14.5 Leased tangible assets
Leased tangible assets comprise business premises and are presented
as a separate line item Right-of-use assets in the consolidated balance
sheet.
14.6 Lease liabilities
The weighted average Optomed’s incremental borrowing rate applied
for discounting purposes was 3.2 %.
The above liabilities are presented on the line item Lease liabilities
(non-current / current) in the consolidated balance sheet, based on their
maturity. The maturity analysis is disclosed in Note 21.5 Liquidity risk.
61
15. Inventories
15.1 Accounting policy
Inventories are stated at the lower of cost and net realisable value.
The cost of ready purchased products consists of the purchase price,
including direct transportation, processing and other costs.
Cost is determined using the rst-in, rst-out (FIFO) method. Net rea-
lisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and the estimated
costs necessary to make the sale.
In thousands of euro 2020 2019
Raw materials and consumables 2,539 2,468
Total 2,539 2,468
Optomed has not recognised any impairment losses on inventories in
the nancial years 2019-2020.
16. Financial assets
16.1 Accounting policy
Optomed classies nancial assets as follows:
— nancial assets measured at fair value through prot or loss (FVTPL)
— nancial assets measured at amortised cost, and
— nancial assets measured at fair value through other comprehen-
sive income (FVOCI).
Classication of nancial assets is made based on their purpose of
use upon initial recognition. Classication relies on the objectives of
Optomed’s business model and the contractual cash ows from -
nancial assets, or by applying the fair value option upon initial
recognition. Optomed recognises all its nancial assets at amor-
tised cost.
All purchases and sales of nancial assets are recognised at the tra-
de date. For nancial assets not carried at fair value through prot
or loss, transaction costs are included in the initial carrying amount.
Financial assets are derecognised when the Group loses the rights to
receive the contractual cash ows on the nancial asset or it has tran-
sferred substantially all the risks and rewards of ownership outside
the Group.
Financial assets measured at amortised cost
Optomed recognises all trade receivables that are non-derivative as-
sets at amortised cost. In the Group trade receivables are held within
a business model whose objective is to collect the contractual cash
ows, and those cash ows that are solely payments of principal and
interest. Trade receivables are current assets that Optomed has the
intention to hold for less than 12 months from the end of reporting
period. Assets classied in this category are measured at amortised
cost using the eective interest (EIR) method. The carrying amounts
of current trade receivables are expected to substantially equal their
fair values.
Optomed recognizes a loss allowance for expected credit losses on
nancial assets that are measured at amortised cost. The expected
credit losses on trade receivables are recorded based on Optomed’s
historical knowledge on trade receivables at default and payment de-
lays due to nancial diculties. The loss allowance is assessed both
on an individual basis and collectively. The expected loss is measured
as the dierence between the asset’s carrying amount and the pre-
62
17. Other receivables
sent value of estimated future cash ows discounted at the nancial
asset’s eective interest rate. This adjustment is recognised in other
operating expenses and as a deduction to the carrying amount of the
receivable.
All realised credit losses are recognised in prot or loss. A credit loss
is reversed in a subsequent period, if the reversal can be related ob-
jectively to an event occurring after the impairment was recognised.
Optomed did not recognise credit losses during the nancial years
2019-2020.
Cash and cash equivalents
The Group’s cash and cash equivalents consist of cash on hand, de-
mand deposits and short-term, highly liquid investments. Items quali-
fying as cash equivalent have a maturity of three months or less from
the date of acquisition.
16.2 Carrying amounts - at amortised cost
Current nancial assets
In thousands of euro Note 2020 2019
Trade receivables
Recourse factoring 21 131 1,242
Other trade receivables 21 2,509 1,655
Total trade receivables 2,641 2,897
Cash and cash equivalents 10,608 18,866
Total 13,249 21,763
16.3 Cash and cash equivalents
The Group had no non-current nancial assets at the end of the nan-
cial years 2019-2020.
In thousands of euro 2020 2019
Cash and bank accounts
10,608 18,866
Total 10,608 18,866
In thousands of euro 2020 2019
Prepayments and accrued income 762 924
Other 236 304
Total 998 1,228
18. Capital and reserves
18.1 Accounting policy
The Group classies the instruments it has issued either as equity
instruments or nancial liabilities based on their nature.
— An equity instrument is any contract that evidences a residual inte-
rest in the assets of Optomed after deducting all of
its liabilities.
— A nancial liability is an instrument that obligates Optomed to de-
63
liver cash or another nancial asset, or the holder has a right to de-
mand cash or another nancial asset.
Optomed evaluates the terms of an issued compound instrument
to determine whether it contains both a liability and an equity com-
ponent. Such components are classied separately as nancial liabi-
lities, nancial assets or equity instruments in accordance with the
substance of the contractual arrangement.
18.2 Share capital and share series
18.2.1 Accounting policy
The share capital consists of the parent company’s ordinary shares
classied as equity. The subscription price of a share received by the
company in connection with share issues is credited to the share ca-
pital, unless it is provided in the share issue decision that a part of
the subscription price is to be recorded in the Reserve for invested
non-restricted equity. Transaction costs directly attributable to the
issue of new shares are recorded in equity as a deduction, net of tax,
from the proceeds.
The share capital of Optomed Plc amounted to EUR 80 thousand at
December 31, 2020 and 80 thousand at December 31.12.2019 . The
share capital consists of one share class.
The shares have no nominal value. All issued shares have been fully
paid. Each share carries one vote.
The company had three share series at the beginning of 2019 A, B
and C series. Each B share and C share were converted into A shares
by using a conversion ratio of 1:1 upon the closing of an Initial Public
Oering (IPO) in December 5th 2019.
64
18.2.2 Movements in share numbers and Group’s equity
The table below discloses changes in the number of shares and respective changes in Group’s equity (A and C share classes).
2020
A series
B series
(liability)
C series Total
Share
capital
Reserve for invested
non- restricted equity
At January 1, 2020 14,003,144 - - 14,003,144 80 37,341
Additions to Reserve for Invested non-equity
based on option subscription
- - 129
- -
- -
At Dec 31, 2020 14,003,144 - - 14,003,144 80 37,470
Pieces In thousands of euro
65
2019
A series
B series
(liability)
C series Total
Share
capital
Reserve for invested
non- restricted equity
At January 1, 2019 7,421,640 280,560 445,500 8,147,700 19 18,549
Share issue: registered June 5, 2019 600,000 - - 600,000 - 3,000
Combination of share series December 5, 2019 726,060 -280,560 -445,500 -
Share issue: registered December, 2019 5,255,444 5,255,444 61 15,792
At Dec 31, 2019 14,003,144 - - 14,003,144 80 37,341
Pieces In thousands of euro
The Extraordinary General Meeting resolved on 14 November 2019 to split the shares of the company with a ratio 1:20. The tables presented
above reect this change in the number of shares.
66
18.3 Treasury shares
18.3.1 Accounting policy
The consideration paid for treasury shares, including any directly
attributable transaction costs (net of taxes), is deducted from equity,
until the shares are cancelled or reissued. Where such shares are
subsequently sold or reissued, any consideration received, net of
any directly attributable transaction costs and net of taxes, is directly
recognised in equity.
The total amount of treasury shares was 740 378 shares in the end of
the nancial year.
18.4 Dividends
18.4.1 Accounting policy
Dividend distribution to the parent company’s shareholders is recogni-
sed as a liability in the consolidated balance sheet in the period in which
the dividends are approved by the company’s Annual General Meeting.
Under the Finnish Limited Liability Companies Act the amount of
capitalised development costs (accounted for in accordance with the
Finnish Accounting Act) is deducted from unrestricted equity in calcu-
lating distributable funds.
Optomed Plc has distributed dividends on cumulative preference sha-
res (B share series) at the combination of share series on December
5, 2019 and the preference share liability is fully paid.
18.5 Reserves
Reserve for invested non-restricted equity
The reserve for invested non-restricted equity comprises other equity
investments and that part of the share subscription price that has not
specically been allocated to share capital.
Share premium
The share premium accrued under the previous Finnish Limited Liability
Companies Act. Under the current Act the share premium is classied
as restricted equity and may no longer increase. The share premium
may be reduced in accordance with the rules applying to decreasing
share capital and can be used to increase the share capital as a reserve
increase.
Translation dierences
The reserve includes translation dierences arisen from the IFRS
post-transition date (January 1, 2016) translation of the nancial sta-
tements of foreign operations into euro.
Retained earnings
Retained earnings are earnings accrued over the previous nancial
years that have not been transferred to equity reserves or issued as
dividends to owners.
18.6 Capital management
Optomed’s objective in capital management is to maintain optimum
capital structure in order to secure normal operating conditions and
to optimise cost of capital to create value to shareholders. For capital
management purposes, Optomed manages equity as indicated in the
consolidated balance sheet. The equity is mainly inuenced through
share issues and restructuring of loans and borrowings. The Group is
67
not subject to externally imposed capital requirements. Group mana-
gement and the Board of Directors of the parent company monitor
Group’s capital structure and liquidity development. The objective of
this monitoring is to ensure Group’s liquidity and exibility of capital
structure in order to full the growth strategy.
Optomed monitors the development of capital structure based on
equity ratio, which was:
— 69.03 % (at December 31, 2020, Group)
— 57.53 % (at December 31, 2019, Group)
Equity ratio is also the nancial covenant of Optomed’s borrowing fa-
cilities (line item Borrowings from nancial institutions). For covenant
accounting purposes equity ratio is calculated following FAS (Finnish
Accounting Standards), based on the related terms of the borrowings.
19. Financial liabilities
19.1 Accounting policy
Optomed classies nancial liabilities as follows:
— nancial liabilities measured at amortised cost, and
— nancial liabilities measured at fair value through prot or loss
(FVTPL).
Optomed did not use derivative instruments during the years 2019-2020,
and the Group had no other nancial liabilities at fair value through
prot or loss at the end of nancial years 2019-2020.
Financial liabilities at amortised cost
Financial liabilities are initially recognised at fair value. Transaction
costs are included in the original carrying amount. Subsequently these
nancial liabilities are measured at amortised cost using the eective
interest rate (EIR) method. A nancial liability is classied as current if
Optomed does not have an unconditional right to defer settlement of
the liability for at least 12 months after the end of the reporting period.
In respect of loans and borrowings current nancial liabilities comprise
the portion falling due within less than 12 months and repayments in
accordance with the repayment plans.
Financial liabilities may be interest-bearing or non-interest-bearing.
The Group’s all nancial liabilities carry interest.
A nancial liability (or part of the liability) is not derecognised until the
liability has ceased to exist, that is, when the obligation identied in a
contract has been fullled, cancelled or is no longer eective.
Borrowing costs
Optomed capitalises borrowing costs that are directly attributable to
creation of a qualifying asset as an addition to the cost of that asset.
— Borrowing costs are interest and other costs that Optomed incurs
in connection with the borrowing of funds.
— A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use.
Optomed considers capitalised development costs to be a qualifying
asset. Consequently, the Group recognises those borrowing costs
incurred from the government loans (from Business Finland), granted
for development activities, as an addition to the carrying amount of the
development cost. The capitalised borrowing costs are recorded as a
deduction to interest expenses. Other borrowing costs are expensed
in the period in which Optomed incurs them. Optomed ceases capita-
lising borrowing costs when the development project is substantially
complete.
For cash ow statement purposes Optomed classies cash ows related
to capitalised borrowing costs as operating activities.
68
19.2 Financial liabilities measured at amortised cost
In thousands of euro 2020 2019
Non-current nancial liabilities
Borrowings from nancial institutions 3,520 5,104
Government loans 2,670 2,998
Lease liabilities 782 699
Total 6,972 8,800
Current nancial liabilities
Borrowings from nancial institutions 0 1,766
Government loans 328 60
Lease liabilities 425 414
Trade payables 595 1,667
Total 1,348 3,907
Total nancial liabilities 8,320 12,707
The company mortgages related to the borrowings from nancial
institutions are disclosed in Note 22. Contingent assets, contingent
liabilities and commitments.
19.3 Changes in nancial liabilities
In the nancial year 2020 the Group adjusted the repayment schedule
for borrowings from nancial institutions, however, the repayment
dates remained unchanged.
19.4 Financial covenant
Optomed’s borrowings from nancial institutions contain a nancial
covenant (equity ratio) and Optomed also has to meet certain key ope-
rative targets. The related liabilities amounted to EUR 3,524 thousand
(at December 31, 2020) and EUR 6,698 thousand (at December 31,
2019). The borrowings will be repaid in accordance with the repayment
schedule.
Optomed has to comply with the nancial covenant terms specied
in the loan agreement terms at the nancial year-end. Equity ratio is
calculated using the agreed formula. The table below summarises the
Group’s nancial covenant term and compliance over the nancial
years 2019-2020.
Covenant
term
Actual
ratio
Applicable
level
At December 31, 2020 25 % 69.03 %
Optomed
Group
At December 31, 2019 25 % 57.53 %
Optomed
Group
For covenant accounting purposes equity ratio is calculated following
FAS (Finnish Accounting Standards), based on the related terms of the
borrowings.
Optomed was in compliance with the covenant as at December 31,
2020 and as at December 31, 2019.
19.5 Government loans - borrowings costs
Optomed has capitalised borrowing costs incurred from the govern-
ment loans granted for development activities in the balance sheet
69
under Development costs. Details are disclosed in Note 9.3 Borrowing
costs - government loans.
19.6 Fair values - nancial liabilities measured
at amortised cost
Optomed considers that the carrying amounts of the nancial liabilities
measured at amortised cost substantially equal to their fair values.
This estimate corresponds to the fair value hierachy Level 3, as the
measurement of the said liabilities is based on Optomed management
view. The fair value hierarchy is presented in Note 1.2.3 Fair value
measurement.
20. Other payables
In thousands of euro 2020 2019
Accrued expenses and prepaid income 1,494 2,911
Other 646 739
Total 2,141 3,650
21. Financial risk management
21.1 Principles of nancial risk management
Optomed’s nancial risks consist of liquidity risk, interest rate risk,
foreign exchange transaction risk, foreign The Group manages cent-
rally loan negotiations for the parent company and the subsidiaries,
for example, and projects the nancing requirements for the next 12
months on a rolling basis, in order to ensure long-term liquidity. The
Group also handles negotiations in respect of letters of credit
and recourse factoring on a centralised basis.
The objective is to ensure that the Group has liquidity for outgoing
commitments at all times and that the nancing portfolio is well diver-
sied. The nancing portfolio should also be exible in case of changes
in Optomed’s business operations.
The Board of Directors of the parent company has the following res-
ponsibilities:
— reviewing and approving the Group’s risk management policy and
the Group’s strategy concerning external nancing and nancial
risk management on an annual basis
— evaluating and approving new nancial instruments and arrange-
ments
— delegating the authority to undertake nancial risk management
and nancing activities to the CEO and CFO
— reviewing the Group’s risk exposures on a monthly basis, and
— reviewing any policy breaches.
Currently letters of credit, recourse factoring agreements as well as
non-current loans and borrowings from nancial institutions are the
only approved nancial instruments.
Subsidiaries should maximise their long-term performance by opti-
mising their working capital structure. Basic nancial management
operations are delegated to the subsidiaries, such as payment tran-
sactions and debt collection.
21.2 Foreign exchange transaction risk and foreign exchange trans-
lation risk
Due to its international operations, Optomed is exposed to tran-
saction risks arising from foreign currency positions and risks from
investments denominated in foreign currencies translated into the
functional currency of the parent company.
The Group’s foreign exchange translation risk is dened as the nega-
70
tive eect of movements in exchange rates on the value of a foreign
subsidiary’s assets when those values are translated into the reporting
currency of the parent company. The Group has subsidiaries in
China. So far, the translation dierence has not been a signicant
item, and thus the Group has not hedged this risk by using currency
derivative instruments.
Optomed’s trade receivables and trade payables may be denominated
in foreign currencies and thus prone to foreign exchange transaction
risk. Foreign exchange transaction risk may also arise from tangible
assets subject to price changes due to volatility in exchange rates.
The Group has foreign currency positions denominated in Chinese
Renminbi (CNY) and US Dollar (USD). Transaction is managed by acti-
vely monitoring currency positions, i.e. absolute amounts. Should the
absolute amounts for currency positions increase signicantly, Opto-
med may consider using currency derivative instruments for hedging
purposes, where necessary.
21.2.1 Currency risk exposure
In thousands of euro USD CNY
At December 31, 2020
Gross trade receivables 15 1,352
Trade payables 163 0
Total 178 1,352
At December 31, 2019
Gross trade receivables 104 640
Trade payables 689 0
Total 793 640
In thousands of euro strenghtening weakening
At December 31, 2020
Gross trade receivables
+/- 10 % change in USD 2 -2
+/- 10 % change in CNY 135 -135
Trade payables
+/- 10 % change in USD -16 16
+/- 10 % change in CNY 0 0
Total net eect 121 -121
In thousands of euro strenghtening weakening
At December 31, 2019
Gross trade receivables
+/- 10 % change in USD 10 -10
+/- 10 % change in CNY 64 -64
Trade payables
+/- 10 % change in USD -69 69
+/- 10 % change in CNY 0 0
Total net eect 6 -6
21.2.2 Sensitivity analysis on exchange rate movements
Income statement
71
crease following a change of 1 percentage point (100 basis points) in
reference interest rates. In respect of the government loans a change
of 3 percentage points was applied since only a change of at least 3
percentage points would increase the Group’s interest expenses, based
on the loan terms. The eect of decrease in interest expenses – either
by 1 (one) or 3 (three) percentange points – is excluded from the sen-
sitivity analysis, as the reference rate cannot be negative.
21.3.1 Cash ow sensitity due to interest rates
Average rate Closing rate Average rate Closing rate
2020 2020 2019 2019
EUR/USD 0.86 0.81 0.89 0.90
EUR/CNY 0.13 0.12 0.13 0.13
21.2.3 Average rates and closing rates for nancial
years used in consolidated nancial statements
21.3 Interest rate risk
Optomed’s interest rate risk is primarily derived from outstanding
oating-rate borrowings from nancial institutions. Interest rate risk
is not signicant. The Group’s revenues and operational cash ows are
to a large extent independent of uctuations in interest rates.
Optomed’s loans and borrowings carry variable interest. The Group
had interest-bearing nancial liabilities totaling EUR 6,518 thousand
(at December 31, 2020) and EUR 9,927 thousand (at December 31,
2019). Those liabilities are linked to Euribor rates (0 to 12 months). The
weighted average interest rate was 0.50 % (2020) and
0.50 % (2019).
Optomed manages interest rate risk by projecting its outstanding net
debt for the next 12 months on a rolling basis. In addition, the Group
uses likely interest rate scenarios to identify the eect interest rate risk
could have on Optomed’s result and key gures. As the interest rate
risk is not signicant for the Group, Optomed has not used derivative
instruments to hedge nancial liabilities against changes in market
interest rates.
The following interest rate sensitivity analysis presents how Optomed’s
interest expenses on borrowings from nancial institutions would in-
In thousands of euro 100 bps increase 300 bps increase
At December 31, 2020
Borrowings from nancial institutions 45
Government loans 99
At December 31, 2019
Borrowings from nancial institutions 66
Government loans 95
Income Statement
21.4. Credit risk and counterparty risk
Credit and counterparty risk arise from a counterparty not being
able to full its contractual requirements, and thus resulting in a loss
to the creditor. Trade receivables are the main driver of credit and
counterparty credit risk. Counterparty risk results from receivables
from companies with which the Group provides credit.
Optomed considers it has no signicant credit risk concentrations.
Credit risk is actively managed, in order to avoid such concentrations.
72
Optomed manages counterparty credit risk by using credit limits
approved by the Board of Directors and only dealing with authorized
counterparties when it comes to nancing activities such as letters
of credit. Optomed has policies in place to ensure that products are
sold and services provided only to those clients with appropriate
credit history. Client credit data is reviewed prior to the signing of
the agreement. Receivable collection and follow up are performed
actively and streamlined by the recourse factoring agreement with a
Finnish nancial institution. In the recourse factoring arrangement the
nancial institution manages collection activities and partly guarantees
receivables but the nal risk remains with Optomed. The arrangement
reduces the Group’s credit risk and improves liqiuidity. The Group also
manages counterparty credit risk with advance payments and letters of
credit. The maximum exposure to credit risk at the end of the nancial
year is the carrying amount of nancial assets.
The following tables disclose credit exposure per geographical area,
aging analysis for trade receivables and related expected credit losses
(ECL). The loss allowance has been recorded in accordance with the
tables presented below.
21.4.1 Credit exposure per geographical area
21.4.2 Exposure to credit risk and loss allowance
In thousands of euro
Gross carrying
amount
Weighted av.
loss rate %
Loss
allowance
At December 31, 2020
Current (not past due) 2,290 0.5 % 11
Past due
1-30 days 181 1.5 % 3
31-60 days 48 4 % 2
61-90 days 3 9 % 0
More than 90
days past due
3 12 % 0
Total 2,525 17
At December 31, 2019
Current (not past due) 921 0.5 % 5
Past due
1-30 days 220 1.5 % 3
31-60 days 4 4 % 0
61-90 days 8 9 % 1
More than 90
days past due
600 12 % 72
Total 1,752 81
In thousands of euro 2020 2019
Gross trade receivables from companies
Finland 912 814
China 1,352 892
Other 377 1,191
Total 2,641 2,897
Carrying amount
73
21.5 Liquidity risk
Liquidity risk is incurred from a potential mismatch between Optomed’s
liquid assets and nancing requirements. The company adheres to ca-
reful liquidity risk management and aims to ensure sucient liquidity
even in dicult circumstances. The Group manages liquidity risk by
ensuring that non-current liabilities have dierent maturities and by
limiting individual receivables. Optomed also aims at ensuring liquidity
through credit instruments. The liquidity of the company is monitored
and forecasted over a 12-month period and, if necessary, short-term
liquidity is monitored. Liquidity is followed up on a rolling basis and
any changes are addressed promptly.
The liquidity reserve comprises highly liquid assets that can be used
without delay to cover nancial obligations at all times. Optomed aims
at ensuring that it always has the amount of liquid funds available to
fund operations. The liquidity reserve includes the following compo-
nents: cash and cash equivalents, liquid investments and credit limits.
The table below analyses nancial liabilities based on their contractual
maturities. The amounts disclosed are undiscounted, comprising both
interest payments and repayments of capital.
21.4.3 Reconciliation of loss allowance
In thousands of euro 2020 2019
Balance at January 1 81 64
Amounts written o -9 0
Net remeasurement of loss allowance -56 16
Balance at December 31 16 81
In thousands of euro 2020 2019
Carrying amount at December 31
Trade receivables, recourse factoring 131 1,242
Total 131 1,242
Changes in expected credit losses and realised credit losses are
recognised in the income statement under Other operating expenses.
21.4.4 Recourse factoring (insured receivables)
In the recourse factoring arrangement, Optomed transfers trade re-
ceivables to be collected by a nancial institution and thereby receives
credit insurance covering a large part of the carrying amount of trade
receivables. Owing to the nature of the arrangement and the extent
of the insurance, receivables do not include signicant credit risk and
consequently those trade receivables are excluded from expected
credit losses (ECL) accounting.
74
21.5.1 Contractual maturities of nancial liabilities
The Covenant equity ratio must be at least 25% until the end of 2020
and 35% thereafter. If the covenants are breached, the nancial insti-
tution has the right to immediately terminate the contracts or require
repayment and/or alternatively the right to increase the marginal for
the borrowings and obligations by 2 percentage points. The covenant
agreement is in force as long as Optomed Plc has unpaid debt, obli-
gations or other commitments. The Group carried out a share issue
in spring 2019, and autumn 2019.
In 2020 Optomed changed repayment programs and the changes
aect the future payments. The loan periods were not extended but
repayment amounts were modied to be better aligned with Opto-
med’s liquidity.
It is not possible to repay the borrowings at an earlier date than agreed
in the related terms. The lender has no right to demand for repayment,
except in the event of a breach of the covenant (refer to Note 19.4
Financial covenant ). The borrowings can be renegotiated.
In thousands of euro Total 0-3 months 3-12 months 2-3 years 4-5 years Over 5 years
At December 31, 2020
Borrowings from nancial institutions 3,524 - - 1,762 1,762 -
Government loans 2,998 166 161 991 948 732
Lease liabilities 1,207 106 319 782 - -
Trade payables 595 595 - - - -
Total 8,324 868 479 3,535 2,710 732
In thousands of euro Total 0-3 months 3-12 months 2-3 years 4-5 years Over 5 years
At December 31, 2019
Borrowings from nancial institutions 6,698 397 1,190 3,333 1,778 -
Government loans 3,057 - 335 1,075 865 783
Lease liabilities 1,113 175 524 414 - -
Trade payables 1,667 1,667 - - - -
Total 12,535 2,239 2,049 4,822 2,642 783
75
22.2 Collaterals
22. Contingent liabilities, contingent
assets and commitments
22.1 Accounting policy
A contingent liability arises when:
— there is a possible obligation that arises from past events and whose
existence will be conrmed by a future event
that is outside the control of Optomed
— there is a present obligation that arises from past events, but pro-
bably will not require an outow of resources, or
— Optomed cannot make a suciently reliable estimate of the amount
of a present obligation.
Contingent liabilities are not recognised, but require disclosure unless
the possibility of outow is remote.
A contingent asset arises when:
— the inow of economic benets to Optomed is probable, but not
virtually certain, and
— occurrence depends on an event outside the control of Optomed.
Contingent assets require disclosure only. If the realisation of income
is virtually certain, the income item is recognised.
In thousands of euro 2020 2019
Liabilities secured under company mortgages
given by Optomed
1
Borrowings from nancial institutions, current 328 7,826
Borrowings from nancial institutions, non-cur-
rent
6,194 2,100
Total 6,522 9,927
Collaterals given by collateral type
Borrowings from nancial institutions, company
mortgages given
8,700 8,700
Other collaterals given 800 800
Total 9,500 9,500
1 Nominal values of the borrowings, which dier from the amounts recognised in the consolidated
balance sheet, measured at amortised cost.
22.3 Guarantees
Delivery guarantee, Fabrinet Pte Ltd. USD 800 thousand
2019:
Delivery guarantee, Fabrinet Pte Ltd. USD 800 thousand
76
22.4 Legal proceedings and disputes
Optomed was not involved in any legal proceedings nor had any dis-
putes during the nancial years 2019-2020.
22.5 Contingencies attaching to government grants
Non-compliance with the conditions attached to the EU Horizon 2020
funding programme may result in, for example, the rejection of ineli-
gible costs or reduction of the grant. Refer to Note 4. Other operating
income for more detailed information on the grant.
23. Related party disclosures
23.1 Accounting policy
The parent company Optomed Plc’s related parties include the following:
— its subsidiaries
— key management personnel, comprising the members of the Board
of Directors, CEO and the Group Management
Team members
— entities, over which the above-mentioned persons have control,
joint control or signicant inuence
— close family members of the above-mentioned persons
The related party transactions disclosed consist of transactions carried
out with related parties that are not eliminated in the consolidated
nancial statements.
23.2 Key management personnel compensation
The amounts disclosed in the tables below represent the expenses
recognised in those nancial years. Salary amounts include any fringe
benets. The CEO and the Group Management Team members are
entitled to the statutory pension, and the retirement age is determined
by the Finnish statutory pension system.
In thousands of euro 2020 2019
CEO Seppo Kopsala
Salaries and other short-term employee benets -144 -105
Pension benets (dened contribution plans) -28 -22
Share-based payments - -
Total -172 -127
In thousands of euro 2020 2019
Group Management Team
Salaries and other short-term employee benets -731 -615
Pension benets (dened contribution plans) -157 -125
Share-based payments -249 -163
Total -1,137 -902
In thousands of euro 2020 2019
Key management personnel
Salaries and other short-term employee benets -876 -720
Pension benets (dened contribution plans) -185 -147
Share-based payments -249 -163
Total -1,310 -1,029
77
In thousands of euro Revenues
Trade
receivables
Other
expenses
2019 2,200 1,172 -143
2020 2,685 1,389 -103
23.3 Transactions with other related parties and
outstanding balances
Revenues and trade receivables relate to the major shareholders of
Optomed Plc considered to be related parties to the parent company.
Refer also to Note 2.4 Major customers.
Other expenses consist of expenses consulting fees paid to the Chair-
man of the Board of Directors.
23.4 Group structure
At December 31, 2020 the Group comprised the following companies:
The Chinese subsidiary Optomed Medical Consulting (Shanghai) Co. Ltd
was closed in early 2020. Optomed Usa Inc was founded early 2020.
24. Events after the end of the
reporting period
On 12 January 2021, Optomed announced that it has been awarded
a contract to develop an advanced IT system for the automation and
evaluation of outcomes in ophthalmic care. The system is developed
for the Finnish University Eye Clinics.
On 14 January 2021, Optomed announced the proposal of the Nomi-
nation Board to the next Annual General Meeting. The Nomination
Board proposed that Seppo Mäkinen, Petri Salonen, Reijo Tauriainen
and Anna Tenstam are re-elected as Board members and Haohao
Zhang is elected as a new Board member. The Board remuneration
was proposed to remain as-is.
On 28 January, Optomed announced that it has established an in-
ternational scientic advisory board. The board consists of globally
recognized and scientically merited medical doctors specializing in
ophthalmology and neuro-ophthalmology, with advanced experience
on articial intelligence applied to detection of ophthalmic conditions.
Subsidiary Domicile
Ownership
interest, %
Optomed Software Oy Finland 100
Optomed Hong Kong Ltd. Hong Kong 100
Optomed China Ltd China 100
Shanghai Optomed Medical Technology Ltd China 100
Optomed USA Inc USA 100
78
1 Jan - 31 Dec 2020 1 Jan - 31 Dec 2019
NET TURNOVER 4,228,777.54 6,432,200.99
Other operating income 160,731.26 312,947.83
Materials and supplies
Raw materials and consumables
Purchases during the nancial year -2,163,549.24 -3,184,890.04
Change in stocks -22,069.61 -18,390.16
External services 0.00 -2,185,618.85 -8,104.39 -3,211,384.59
Personnel expenses
Wages and salaries -2,352,188.27 -2,341,781.32
Social security expenses
Pension expenses -392,853.96 -404,968.55
Other social security expenses -103,472.20 -2,848,514.43 -57,275.34 -2,804,025.21
Depreciation, amortisation and impairment
Depreciation and amortisation according to plan -1,246,801.50 -1,246,801.50 -1,201,913.95 -1,201,913.95
Other operating expenses -1,724,644.28 -1,914,680.45
OPERATING PROFIT (LOSS) -3,616,070.26 -2,386,855.38
Financial income and expenses
From others 7,439.81 2,030.28
Interest expense and other nancial expenses
To group undertakings (–) -12,980.16 -27,647.01
To others (–) -220,621.64 -226,161.99 -4,253,538.78 -4,279,155.51
PROFIT (LOSS) BEFORE APPROPRIATIONS
AND TAXES
-3,842,232.25 -6,666,010.89
Appropriatons
Group contribution 1,699,561.34 1,699,561.34 1,175,474.55 1,175,474.55
PROFIT (LOSS) FOR THE FINANCIAL YEAR -2,142,670.91 -5,490,536.34
Profit and loss account
Parent Company’s Financial Statements
79
31 Dec 2020 31 Dec 2019
Assets
NON-CURRENT ASSETS
Intangible assets
Development expenditure 5,378,568.98 5,098,409.81
Intangible rights 298,350.18 249,653.92
Other capitalised long-term expenditure 130,135.98 5,807,055.14 173,426.31 5,521,490.04
Tangible assets
Machinery and equipment 397,895.02 393,534.26
Other tangible assets 950.00 398,845.02 950.00 394,484.26
Investments
Holdings in group undertakings 9,266,906.46 9,082,863.03
Receivables from group undertakings 1,003,875.27 10,270,781.73 1,033,582.47 10,116,445.50
TOTAL NON-CURRENT ASSETS 16,476,681.89 16,032,419.80
CURRENT ASSETS
Stocks
Raw materials and consumables 1,186,165.07 968,727.28
Finished products / goods for resale 1,132,020.27 2,318,185.34 1,274,559.21 2,243,286.49
Long-term receivables
Amounts owed by group undertakings 81,492.95 81,492.95 0.00
Short-term receivables
Trade debtors 5,083,426.44 5,414,257.04
Amounts owed by group undertakings 730,117.05 449,534.95
Other receivables 201,783.07 231,726.10
Prepayments and accrued income 342,625.71 6,357,952.27 275,994.16 6,371,512.25
Cash at bank and in hand 7,985,918.68 17,943,853.21
TOTAL CURRENT ASSETS 16,743,549.24 26,558,651.95
Total assets 33,220,231.13 42,591,071.75
Balance sheet
80
31 Dec 2020 31 Dec 2019
Capital, reserves and liabilities
CAPITAL AND RESERVES
Share capital 80,000.00 80,000.00
Share premium account 503,699.60 503,699.60
Reserve for invested free own capital 41,384,281.85 41,255,042.75
Retained earnings (Cumulative loss) -14,420,142.63 -8,929,606.29
Prot (loss) for the nancial year -2,142,670.91 -5,490,536.34
TOTAL CAPITAL AND RESERVES 25,405,167.91 27,418,599.72
LIABILITIES
Non-current
Loans from credit institutions 6,194,905.28 7,833,823.28
Amounts owed to group undertakings 0.00 6,194,905.28 1,374,060.40 9,207,883.68
Current
Loans from credit institutions 327,583.21 2,100,381.77
Advances received 39,386.50 66,649.30
Trade creditors 444,594.45 1,528,295.26
Amounts owed to group undertakings 0.00 31,938.68
Other liabilities 86,498.53 84,635.83
Accurals and deferred income 722,095.25 1,620,157.94 2,152,687.51 5,964,588.35
TOTAL LIABILITIES 7,815,063.22 15,172,472.03
Total capital, reserves and liablities 33,220,231.13 42,591,071.75
Balance sheet
81
1 Jan 2020–31 Dec 2020 1 Jan 2019–31 Dec 2019
Cash ow from operating activities:
Prot(loss) (+/–) -2,142,670.91 -5,490,536.34
Adjustments to operating prot (+/–) for:
Depreciation according to plan 1,246,801.50 1,201,913.95
Unrealised foreign exchange gains and losses 49,178.43 -25.65
Financial income and expenses 176,983.56 4,279,155.51
Other adjustments, share benet - members of the board 37,564.74 0.00
Cash ow before working capital changes -632,142.68 -9,492.53
Working capital changes:
Increase/decrease in trade an other short-term interest-free receivables -67,932.97 -1,000,911.91
Increase/decrease in stocks -74,898.85 -1,352,419.77
Increase/decrease in short-term interest-free liabilities -2,556,530.08 2,372,738.78
Operating cash ow before nancing items and taxes -3,331,504.58 9,914.57
Interest and other nancial expenses paid relating to operating activities (–) -216,764.89 -4,247,380.81
Interest received relating to operating activities 7,439.81 507.78
Cash ow from operating activities: -3,540,829.66 -4,236,958.46
Cash ow from investing activities:
Purchase of tangible and intangible items (–) -1,536,727.35 -1,135,267.88
Purchase of investments (–) -184,043.43 0.00
Proceeds from repayment of loans 29,707.20 0.00
Cash ow from investing activities -1,691,063.58 -1,135,267.88
Cash ow from nancing activities
Proceeds from issuance of share capital 91,700.00 22,706,043.36
Proceeds from short-term borrowings 0.00 753,144.82
Repayment of short-term borrowings (–) -1,529,857.24 -460,387.04
Repayment of long-term borrowings (–) -3,287,858.40 0.00
Cash ow from nancing activities -4,726,015.64 22,998,801.14
Net increase (+)/ decrease (–) in cash and cash equivalents -9,957,908.88 17,626,574.80
Cash and cash equivalents at beginning of period 17,943,827.56 317,252.76
Cash and cash equivalents at end of period 7,985,918.68 17,943,827.56
Cash flow stament - indirect
82
Accounting policies
Optomed Oyj nancial statements have been prepared in accordance
with the Finnish Accounting Act (FAS)
Valuation principles and methods
Valuation principles and methods of non-current assets
Tangible and intangible assets are recognised in the balance sheet at
cost less depreciation according to plan. Cost includes variable expen-
diture relating to the acquisition and production of the assets. Grants
received are deducted from the cost. Depreciation according to plan
is calculated using the straight-line method based on the useful life
of the assets. Depreciation is started at the month when the asset is
taken into use.
The depreciation periods are as follows: Intangible assets 5-10 years
Machinery and equipment 3–6 years
The cost of tangible and intangible assets whose probable useful life is
less than 3 years or whose value is low (less than 850.00 €) is recognised
as an expense as incurred expense.
Valuation of stocks
Stocks are recognised by using the FIFO method at cost, reacquisition
cost, or probable selling price, whichever lower. Cost includes, in addi-
tion to variable costs, an appropriate portion of xed costs attributable
to the purchase and production or construction of the asset.
Recognition of development costs and long-term expenditure
Company has capitalized R&D costs relating to new product develop-
ment according to Finnish Accounting Act (KPL 5:8§). Capitalized costs
include personnel and other costs that directly relate to developing the
product to its intended use. Capitalized R&D costs are depreciated du-
ring their estimated useful life that is 10 year straight line depreciation.
Change in the presentation of the prot and loss account or
balance sheet
Increase or decrease in stocks is partly included in the purchases du-
ring nancial year. This accounting princible has no material eect to
the assessment of the company’s performance and nancial position.
Preparation of the cash ow statement
The cash ow statement was drawn up in accordance with the Ac-
counting Board’s general guideline (30 Jan 2007). Cash ow from
operating activities is indicated on indirect method.
83
Notes to the profit and loss account
1 Jan 2020–31 Dec 2020 1 Jan 2019–31 Dec 2019
Net turnover
Net turnover by geographical markets
Finland 16,000.00 8,273.00
EU 550,488.95 2,270,868.40
Outside the EU 3,662,288.59 4,153,059.59
4,228,777.54 6,432,200.99
Other operating income
Contributions received 100,000.00 165,603.50
Management fee from group companies 59,086.23 138,366.29
Other income 1,645.03 8,978.04
160,731.26 312,947.83
Other operating income includes an contribuiton of 100.000 euros
received from Business Finland.
Materials and services
Materials and supplies
Purchases during the nancial year -2,163,549.24 -3,184,890.04
Variation in stocks -22,069.61 -18,390.16
External services 0.00 -8,104.39
-2,185,618.85 -3,211,384.59
Notes relating to personnel
Average number of personnel during the nancial year 53.08 49.00
53.08 49.00
Wages, salaries and pension expenses
Wages and salaries -2,352,188.27 -2,341,781.32
Pension expenses -392,853.96 -404,968.55
Other sta expenses -103,472.20 -57,275.34
-2,848,514.43 -2,804,025.21
Wages, salaries and other remuneration of directors and management
CEO and Board members compensation -316,942.80 -218,138.20
Depreciation, amortisation and impairment
Depreciation according to plan 1,246,801.50 -1,201,913.95
1,246,801.50 -1,201,913.95
84
1 Jan 2020–31 Dec 2020 1 Jan 2019–31 Dec 2019
Other operating expenses
Administrative expenses -366,962.37 -200,132.15
Marketing expenses -115,252.30 -171,357.61
Travelling expenses -82,386.98 -327,136.60
Representation expenses -1,380.93 -17,718.27
Other operating expenses -1,158,661.70 -1,198,335.82
-1,724,644.28 -1,914,680.45
Auditor's fees
Audit of nancial statements -55,961.00 -60,599.89
Tax consulting -21,500.00 -23,900.00
Other fees -90,735.00 -491,615.65
-168,196.00 -576,115.54
Financial income and expenses
Other interest income
From others 7,439.81 2,030.28
Total interest income 7,439.81 2,030.28
Total nancial income 7,439.81 2,030.28
Interest and nancial expenses
Group undertakings -12,980.16 -27,647.01
Others -220,621.66 -4,253,538.78
Total interest and nancial expenses -233,601.82 -4,281,185.79
Other nancial expenses of nancial year 2019 include costs related
to listing total of 3 917 991,86 euros.
Total nancial expenses -233,601.82 -4,281,185.79
Total nancial income and expenses -226,162.01 -4,279,155.51
85
Notes to assets
Amortisation period for capitalised development
expenditure
Development costs: Development is the application of research ndings
or other knowledge to a plan or design for the production of new or
substantially improved materials, devices, products, processes, systems
or services before the start of commercial production or use. Optomed
capitalises such costs when all the following criteria are met:
— Optomed can demonstrate the technical feasibility of completing
the intangible asset so that it
will be available for use or sale.
— Optomed intends to complete the intangible asset and use or sell it.
— Optomed is able to use or sell the intangible asset.
— Optomed is able to demonstrate how the intangible asset will ge-
nerate probable future economic benets.
— The Group has adequate technical, nancial and other resources
available to complete the development and to use or sell the intan-
gible asset
— Optomed is able to measure reliably the expenditure attributable
to the intangible asset during its development.
Capitalised development costs comprise all directly attributable costs
(mainly labour) necessary to prepare the asset to be capable of ope-
rating in the manner intended. Optomed has also:
— capitalised borrowing costs arisen from government loans granted
for development purposes,
and
— deducted an applicable amount of major government grants recei-
ved for development
activities from the carrying amount.
Development expenditure that was initially expensed is not capitalised at
a later date. The estimated useful life for development costs is 10 years.
Amortisation period for capitalised intangible rights
and other long-term expenditure
An intangible asset is recognised only if it is probable that the expected
future economic benets that are attributable to the asset will ow to
Optomed, and the cost of the asset can be
measured reliably. All other expenditure is expensed as incurred.
Depreciation times and methods of other intangible assets are:
License fees and computer software 5 year straight-line
Patents 10 year straight-line
Trademarks 10 year straight-line
Stocks 31 Dec 2020 31 Dec 2019
Raw materials and consumables 1,186,165.07 968,727.28
Finished products /
goods for resale
1,132,020.27 1,274,559.21
2,318,185.34 2,243,286.49
86
Development
expenditure
Intangible
rights
Other longterm
expenditure
Total
Acquisition cost at 1 Jan 2020 8,125,449.23 360,015.82 228,141.63 8,713,606.68
Additions 1,279,244.60 95,000.99 1,500.00 1,375,745.59
Disposals -160,033.09 0.00 0.00 -160,033.09
Acquisition cost at 31 Dec 2020 9,244,660.74 455,016.81 229,641.63 9,929,319.18
Accumulated amortisation and reduction in value at 1 Jan 2020 3,027,039.42 110,361.90 54,715.32 3,192,116.64
Amortisation for the nancial year 839,052.34 46,304.73 44,790.33 930,147.40
Accumulated amortisation and reduction in value at 31 Dec 2020 3,866,091.76 156,666.63 99,505.65 4,122,264.04
Book value at 31 Dec 2020 5,378,568.98 298,350.18 130,135.98 5,807,055.14
Book value at 31 Dec 2019 5,098,409.81 249,653.92 173,426.31 5,521,490.04
Tangible assets Machinery and equipment Total
Acquisition cost at 1 Jan 2020 1,193,923.81 1,193,923.81
Additions 160,981.76 160,981.76
Acquisition cost at 31 Dec 2020 1,354,905.57 1,354,905.57
Accumulated amortisation and reduction in value at 1 Jan 2020 800,389.55 800,389.55
Amortisation for the nancial year 156,621.01 156,621.01
Accumulated amortisation and reduction in value at 31 Dec 2020 957,010.56 957,010.56
Book value 31 Dec 2020 397,895.01 397,895.01
Book value 31 Dec 2019 393,534.26 393,534.26
Book value of machinery and equipment used for production at 31 Dec 2020 315,271.71
Book value of machinery and equipment used for production at 31 Dec 2019 319,202.12
Non-current assets
87
Investments Shares in group companies Receivables from group companies Total
Acquisition cost at 1 Jan 2020 9,082,863.03 1,033,582.47 10,116,445.50
Additions 184,043.43 51,785.75 235,829.18
Acquisition cost at 31 Dec 2020 9,266,906.46 1,085,368.22 10,352,274.68
Book value 31 Dec 2020 9,266,906.46 1,085,368.22 10,352,274.68
Book value 31 Dec 2019 9,082,863.03 1,033,582.47 10,116,445.50
Group undertakings Ownership %
Optomed Software Oy, Espoo 100
Optomed Hong Kong Limited, China 100
Optomed China Ltd, China 100
Shanghai Optomed Medical Technology Ltd 100
Optomed USA Inc 100
Holdings in other undertakings
Group company Optomed Medical Consulting (Shanghai) Co. Ltd , has been shut down in early 2020. Group company Optomed Inc, USA was
founded early 2020.
88
Long-term receivables 31 Dec 2020 31 Dec 2019
From group undertakings
Loans receivable 681,212.49 602,295.25
Other receivables 404,155.73 431,287.22
Total 1,085,368.22 1,033,582.47
Total long-term receivables 1,085,368.22 1,033,582.47
Short-term receivables
From group undertakings
Trade debtors 4,681,323.60 3,793,558.29
Other receivables 811,610.00 449,534.95
Total 5,492,933.60 4,243,093.24
From others
Trade debtors 402,102.84 1,620,698.75
Other receivables 201,783.07 231,726.10
Prepayments and accrued income 342,625.71 275,994.16
Total 946,511.62 2,128,419.01
Total short-term receivables 6,439,445.22 6,371,512.25
Analysis of receivables
89
Restricted equity 31 Dec 2020 31 Dec 2019
Subscribed capital at 1 January 80,000.00 18,501.20
Share issue 0.00 61,498.80
Subscribed capital at 31 December 80,000.00 80,000.00
Share premium account at 1 January 503,699.60 565,198.40
Reduction of share premium account 0.00 -61,498.80
Share premium account at 31 December 503,699.60 503,699.60
Total restricted equity 583,699.60 583,699.60
Unrestricted equity
Reserve for invested unrestricted equity at 1 January 41,255,042.75 18,548,999.39
Share issue 129,239.10 22,706,043.36
Reserve for invested unrestricted equity at 31 December 41,384,281.85 41,255,042.75
Retained earnings from previous nancial years at 1 January -14,420,142.63 -8,929,606.29
Retained earnings from previous nancial years 31 December -14,420,142.63 -8,929,606.29
Prot for the nancial year -2,142,670.91 -5,490,536.34
Total unrestricted equity 24,821,468.31 26,834,900.12
Total capital and reserves 25,405,167.91 27,418,599.72
Capital and reserves
90
31 Dec 2020 31 Dec 2019
Distributable equity
Calculation regarding distributable equity
Prot from previous nancial years -14,420,142.63 -8,929,606.29
Prot of the nancial year -2,142,670.91 -5,490,536.34
Reserve for invested unrestricted equity 41,384,281.85 41,255,042.75
Capitalised development expenditure -5,378,568.98 -5,098,409.81
19,442,899.33 21,736,490.31
Optomeds share treasury
Optomed has conveyed 7,622 treasury shares to the members of the
Board of Directors as a part of the Board members’ annual remunerati-
on in accordance with the decision of the Annual General Meeting 2020.
The number of shares is based on the monthly remuneration of the
Board of Directors decided by the Annual General Meeting and the
weighted average price of the Optomed share on the exercise date.
In addition total of 35,500 of shares have been subscribed for under
the Company’s stock option plans 2009A, 2015, 2017B and 2018C and
Optomed has used treasury shares for the share subscriptions.
The total amount of treasury shares was 740 378 shares in the end of
the nancial year.
91
Appropriations 31 Dec 2020 31 Dec 2019
Non-current liabilities
Loans from nancial institutions 6,194,905.28 7,833,823.28
Other non-current liabilities 0.00 1,374,060.40
6,194,905.28 9,207,883.68
Liabilities falling due later than in ve years
Loans from nancial institutions 527,882.00 686,729.00
527,882.00 686,729.00
Current liabilities
Amounts owed to group undertakings
Trade creditors 0.00 20,459.75
Other liabilities 0.00 31,938.68
0.00 52,398.43
Amounts owed to others
Loans from nancial institutions 327,583.21 1 825,501.77
Advances received 39,386.50 66,649.30
Trade creditors 444,594.47 1,507 835.51
Other liabilities 86,498.53 84,635.83
Accruals and deferred income 722,095.25 2,152,687.51
1,620,157.96 5,689,708.35
Material items included in accruals and deferred income
Wages and salaries including social security costs 636,192.64 570,844.10
Interest 14,085.72 14,488.56
Other 71,816.89 1,567,354.85
722,095.25 2,152,687.51
Liabilities
92
Related party transactions
The following material transctions were carried out with related parties during the nancial period:
31 Dec 2020 31 Dec 2019
Sale of goods, group companies 1,655,184.00 892,720.00
Other operating income, group companies 59,086.23 138,366.29
Purchases, group companies -841,351.56 -219,519.91
Interests of loans, group companies -12,980.16 -27,647.01
Total 859,938.51 783,919.37
Liabilities in balance sheet secured by enterprise mortgages 31 Dec 2020 31 Dec 2019
Loans from nancial institution 3,524,445.28 6,697,777.28
Enterprise mortgages 3,524,445.28 8,700,000.00
Enterprise mortgages, total 8,700,000.00 8,700,000.00
The transactions between group companies are carried out with regular terms. Parent company has also received a group contribution of
1.699.561,34€.
Guarantees and contingent liabilities
Pension obligations
The company’s pension obligations are insured in external pension insurance companies. The pension obligations are fully covered.
93
Other commitments 31 Dec 2020 31 Dec 2019
Rental commitments (Inc. VAT)
Payble during the following nancial year 105,999.60 82,960.32
Payable in later years 0.00 0.00
Total 105,999.60 102,870.79
Amounts payable based on lease contracts (Inc.VAT)
Payble during the following nancial year 935.95 1,008.00
Payable in later years 0.00 924.00
935.95 1,932.00
Other o-balance-sheet financial commitments
Company has o-balance sheet commitment to enterprice resource planning system licence fees total of 31,321.32 euros.
Company has delivery guarantee to Fabrinet Pte Ltd, 800.000,00 USD
Collateralised loans include covenants. The specic terms relate to the company’s solvency and liquidity. Breaching the covenants may increase
the cost of nancing or result in termination of the loans. The management of the company states that the covenants are met and they are
being monitored.
94
Signatures to the Financial Statements and Board of Director’s Report
Espoo, February 17, 2021
Petri Salonen
Chairman of the Board
Anna Tenstam
Board Member
Seppo Mäkinen
Board Member
Jun Wu
Board Member
Reijo Tauriainen
Board Member
Seppo Kopsala
CEO
Tapio Raappana
Authorised Public Accountant, KHT
The Auditor’s Note
A report on the audit performed has been issued today. Oulu, February 18, 2021
KPMG Oy Ab
95
www.optomed.com