Annual Report 2021/22
Wonderful
Sound for
All
Unlocking human potential
by making wonderful sound
part of everyone’s life.
Follow us
4
Overview
5 At a glance
6 Chair / CEO letter
9 Innovation highlights
10 Performance highlights
11 5-year key figures and
financial ratios
12
Strategy and sustainability
13 Market overview
16 Strategic ambition and goals
19 Business model
21 Building a wonderful place to work
24 Protect the planet
27 Innovation
29 Our brands
42
Governance
43 Corporate governance
45 Risk management
48 Board of directors and executive
management
52 Investor information
38
Performance
39 Sales performance
40 Financial review
53
Statements
54 Management report
55 Independent auditor's report
57 Independent auditor’s
assurance report
59
Financial statements
60 Consolidated financial
statements
125 Parent financial statements
132 Consolidated ESG statements
157 GRI index
Coverpage image:
Signia. Be Brilliant.
Table of contents
3
WS Audiology Annual Report 2021/22
Text anchor
Overview Strategy and Sustainability Performance Governance Statements Financial statements
At a glance
6
main production sites
in Denmark, Singapore,
China, Mexico, Poland and the
Philippines.
3.5 million
people equipped with WSA
hearing aid devices in more than
130
countries during 2021/2022.
Headquartered in Denmark and
Singapore
12,000
employees in more than
45
offices globally.
Main production sites
Presence
5
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Following a strong first half with 12%
organic growth, the second half was
impacted by general macro weakness.
Still, we were able to keep our guidance
and delivered 7.4% organic growth for
the full fiscal year and a normalized
EBITDA of EUR 502 million in line with
the guidance of +EUR 500 million. We are
deeply grateful to the dedication and
motivation of our 12,000 employees who
together achieved this solid result.
Letter from our Chair and CEO
A solid
result
Eric Bernard
President and CEO
Marco Gadola
Chair of the Board of Directors
6WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Chair / CEO letter
Motivated by our purpose of Wonderful
Sound for All, we have embedded Awareness,
Access, and Affordability in our strategy.
Strategy
The global hearing aids market
continues to be full of opportunities for
growth, as the need for hearing aids
is greater than ever and most people
with hearing loss are not served with
any form of hearing care. Motivated by
our purpose of Wonderful Sound for
All, we feel a strong urge to change that
and have embedded awareness, access
and affordability in our strategy, while
fighting the stigma of wearing hearing
aids with unique design solutions and
inspiring role models.
Our efforts to build a diverse, inclu-
sive, and supportive culture have
started to pay off. A survey in June
2022 showed a significant jump of the
employee engagement from 7.2 to 7.6
out of 10. We continue to work hard
building a great place to work for all
our employees. In 2022 we launched
programs to make leaders aware of the
importance of psychological safety.
Only when employees feel the room
to speak up freely and say what they
really believe, we can create an optimal
innovation climate.
Another pillar of our strategy is our
program to minimize our impact on the
environment. This is not just about the
Main events
Late in 2021, WSA published the indus-
try’s first ever Life Cycle Assessment
study of rechargeable hearing aids.
The study shows that our rechargeable
hearing aids have a 65% lower environ-
mental impact compared to traditional
battery driven hearing aids.
In December WSA announced the
appointment of Marianne Wiinholt as
Group CFO. She joined in April 2022
from a position as Group CFO of the
renewable energy company Ørsted.
In January we announced the strategic
acquisition of leading Brazilian hearing
aid distributor Audibel, active in both
the public and private local market.
In February, Russia invaded Ukraine.
We strongly condemned this blatant
violation of international law and
way we work, the energy we consume,
the footprint of our activities, but also
about the way we help our customers
to minimize their impact, by offering
rechargeable solutions and optimizing
to more resilient supply chains, with
ever more ambitious recycling levels.
In addition, we of course continue to
support the UN Global Compact.
Market conditions
Although market conditions did never
stop to be challenging with continued
COVID lockdowns, supply issues, infla-
tionary pressure, material costs and
wages, the first half of the financial year
showed strong growth. But in Q3 all of
the above plus the consequences of the
war in Ukraine, with a looming energy
crisis, high inflation and the prospect of
economic depression, started to have
an impact on the sale of hearing aids,
especially in markets where hearing
aids are not or not fully reimbursed. We
were confronted with market softening
and in some markets, volume even
contracted versus last year. France had
a very high base of comparison due to
the French healthcare reform in 2021.
And consumer sentiment in the US was
weakening. Still, we were able to gain
market share during the 2021-2022
fiscal year.
Purpose
Wonderful
Sound for
All
human decency. We managed to get
our Ukrainian team and their fami-
lies from Kiev to safer ground and
suspended all shipments to Russia.
Globally, employees collected a huge
sum of money for the Red Cross and
our owners contributed generously.
To structurally mitigate supply chain
challenges, improve our customer
service and increase the resilience
of our manufacturing network, we
decided to near-shore part of our
custom hearing aid production for
the Americas from China to Tijuana,
Mexico. In September 2022 we
announced the move of all Signia oper-
ations from Piscataway, New Jersey, to
the Mexican site, to serve all customers
in North and South America.
In August we launched a retail
rebranding program that will transform
7WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Marco Gadola
Chair of the Board of Directors
Eric Bernard
President and CEO
our retail stores to provide hearing care
consumers with a modern, unified, and
more seamless experience. Imple-
mentation of the program has already
started in North America.
During the same month we changed
our regional set-up and appointed
Carsten Buhl as leader of the new
region Americas. The formation of
Americas will strengthen our growing
network of partners in the US, Canada,
and Brazil, as well as leverage new busi-
ness models in the region.
On August 16th, the Food & Drug
Administration (FDA) published the
final rule for the over-the-counter sales
of hearing aids in the US. WSA supports
this development as it connects with
our strategic goals to increase the
awareness, access, and affordability of
hearing care.
In September we announced a partner-
ship agreement with Sony Corporation.
Aim of the partnership is to jointly
develop and supply new products
and services in the over-the-counter
hearing aid market, beginning with the
United States. In October we launched
the first joint product under the Sony
brand. It is being sold by Sony online,
by big American retailers and by
independent partners who would like
to supplement their offering with OTC
hearing aids. Realistically it will take a
few years until this OTC market will be
sizeable. The reason that many people
in the US and other markets do not seek
hearing care when they have hearing
loss, is a complex mix of lack of aware-
ness, access, affordability, and stigma.
Overcoming these hurdles will require
some patience.
Outlook
Since the third quarter of FY 2021/22
we saw the momentum in some of the
larger markets most notably US and
France softening due to macroeco-
nomic headwinds and in France also
due to the high comparison base driven
by the introduction of the national
healthcare reform in 2021.
We expect the US private pay market
to remain soft into FY 2022/23, while
Managed Care in the US will main-
tain its strong growth momentum. In
France we also expect that the soft-
ness we saw in the last quarters of FY
2021/22 to continue at least into the
first quarter of FY 2022/23.
The growth fundamentals of the
hearing care market remain strong. We
will continue to leverage our unique
product portfolio and our multi-brand,
multi-channel strategy, and we expect
to deliver low single-digit organic
growth in FY 2022/23.
The reported EBITDA margin is
expected to increase by 1-2 percent-
age-points compared to FY 2021/22
driven by the increased topline, impact
of efficiency measures and reduction of
normalizations.
Minimizing our environmental impact is not just about the
way we work, the energy we consume, or the footprint of our
activities. It's also about helping our customers minimize their
own impact such as offering rechargeable solutions.
8WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Innovation highlights
In 2021/22 we launched several groundbreaking innovations.
Signia Augmented
Xperience platform
The world's first
dual processor
technology ensuring
that users always
hear clearly and enjoy
handsfree calling with
controls directly at the
hearing aid.
Signia
Styletto AX
Hearing aids in an
award-winning design
preferred by 8 out of 10
people including on-the
go-charging.
Signia
My WellBeing
Empowering wearers
to stay healthy in body
and mind by utilizing the
hearing aids sensors.
As a world’s first adding
conversation time
tracking.
Rexton
BiCore platform
A smooth all-round
hearing experience, with
an ultra-quick binaural
link and embedded
Speech Preservation
Technology.
Widex
Instant Eartips
A new range of
instant eartips that
work together with
TruAcoustics™ to
provide better
acoustical stability.
Widex
SoundRelax
TM
Expansion of our fractal
sound stimulation
universe, providing
a new palette of
sounds designed to
relax the mind and aid
concentration.
Widex
Moment Sheer sRIC
The smallest
rechargable RIC
featuring Widex
PureSound, that is
delivered by the ultra-
fast ZeroDelay pathway.
9WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Performance highlights
Non-financialFinancial
Outlook Outlook FY 2021/22 Realized FY 2021/2022
Normalized EBITDA > EUR 500 mio. EUR 502 mio.
Read more
Financial review and
Outlook FY23
Read more
Financial Statement
section
Read more
ESG Statement
section
6,069
Capital employed EURm
7%
Organic growth
203
Free cash flow EURm
21%
EBITDA Margin, Normalized
Expand access
million people equipped
with hearing aids
7.6
>8.0
FY22 FY25
Wonderful place
to work
Engagement score, 1 - 10
41%
100%
FY22 FY25
Protect the planet
% of renewable
energy used
3.5
>5.5
FY22 FY28
10WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
5-year key figures and financial ratios
2021/22 2020/21 2019/20 2018/19 2017/18
12 months 12 months 12 months 17 months 12 months
EURm IFRS IFRS IFRS IFRS* IFRS*
Income statement
Revenue 2,351 2,053 1,738 1,670 599
Gross profit 1,376 1,202 973 998 441
R&D costs** 120 102 84 84 30
EBITDA, Normalized 502 464 331 316 120
EBITDA 422 413 201 104 132
Depreciation and amortization *** 323 305 317 183 20
EBIT 99 109 (116) (79) 100
Net financial items (372) (190) (183) (220) (10)
(Loss)/Profit before tax (273) (81) (299) (299) 90
(Loss)/Profit for the year (270) (82) (243) (285) 70
Balance sheet
Assets 6,779 6,668 6,811 6,691 615
Net Interest Bearing Debt 3,806 3,504 3,452 - -
Net Working Capital 285 225 241 - -
Equity 1,593 1,701 1,770 1,982 318
* WS Audiology A/S was established on 28 February 2019 to effectuate the merger of the Sivantos Group and the Widex Group.
Widex group was regarded as the account acquirer and consequently the figures from 2017/18 and the first 5 month of 2018/19
disclose pre-merger figures from the Widex Group
** Total R&D spend amounted to EUR 162 million in 2021/22 (2020/21: EUR 142 million) and includes expensed cost of EUR 120
million (2020/21: EUR 102 million) and capitalized costs of EUR 100 million (2020/21: EUR 81 million) offset by amortizations for
the year, refer to page 40 for breakdown.
*** Includes amortization of identifiable assets from Purchase Price Allocations of EUR 159 million (2020/21: EUR 181 million) from
business combinations.
2021/22 2020/21 2019/20 2018/19 2017/18
12 months 12 months 12 months 17 months 12 months
EURm IFRS IFRS IFRS IFRS* IFRS*
Other key figures
Investment in property, plant and
equipment 60 43 35 39 18
Cash flow from operating activities 368 397 240 168 94
Free cash flow 203 262 116 - -
Average number of employees 12,000 11,441 10,791 10,899 4,175
Financial ratios, %
Organic growth 7 22 (11) 4 -
Gross profit margin 59 59 56 60 74
EBITDA margin, Normalized 21 23 19 19 22
EBITDA margin 18 20 12 6 20
EBIT margin 4 5 (7) (5) 17
Return on equity (16) (5) (13) (25) 24
Equity ratio 24 26 26 30 52
ESG
People equipped with hearing aids
(million) 3.5 3.1 2.2 - -
Gender diversity in managerial roles
(% of female) 39% 37% 38% - -
Renewable electricity (%) 41% 23% 16% - -
Key figures/ financial ratios definitions
EBITDA = Earnings before interest, tax, depreciation, amortization
EBIT = Earnings before interest and tax
Net financial items = Interest income, interest expenses and other
financials net
Gross profit margin = Gross profit/(loss) x 100/revenue
EBITDA margin = EBITDA x 100/revenue
EBITDA margin, normalized = EBITDA, normalized x 100/revenue
EBIT margin = EBIT x 100/Revenue
Return on equity = Profit/(loss) for the year x 100/average equity
Equity ratio = Total equity/total assets x 100
Net Working Capital = Trade receivable + Inventories – Trade payables
Free cash flow = Operating cash flow - net capex
Net interest-bearing debt = total interest-bearing debt – cash and cash
equivalents
11WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
* Source: WHO, Hopkins Medicine
Market
overview
Underpenetrated market
Today more than 1.6 billion people
suffer from hearing loss. Of these,
430* million have disabling moderate
to complete hearing loss requiring
treatment.
However, less than 20% of people* in
need are equipped with hearing aids,
despite the adverse consequences
associated with hearing loss both for
the individual and society, specifically:
• Social isolation and loneliness
• Higher risk of developing dementia
• Higher risk of unemployment
Translated into economic value, unad-
dressed hearing loss has an annual cost
to society of more than $980 billion*
driven by healthcare spend, education,
and productivity losses.
The main barriers holding people back
from adopting hearing aids are:
1. Awareness of own problem and
solution benefits
2. Access to care
3. Affordable solutions
4. Stigma perception/association with
aging and lower intelligence
5. User experience (complex user
journey)
The prevalence of each barrier is highly
dependent on the country in question.
At WSA, we are on a mission to
break down each barrier by growing
a sustainable business to deliver
Wonderful Sound for All.
Mild Moderate
369m
Severe
31m
Profound
17m
Complete
13m1,153m
430m
people with disabling hearing loss
1.6 bn
in total
People with varying degrees of hearing loss
4 types
of hearing
solutions
Hearing loss
Over-the-counter
(OTC) hearing aids
sold directly to
consumers without
prescription
Hearing aids
fitted by hearing
care professionals
and dispensed
by licensed
audiologists
Bone-anchored
hearing aids
(BAHA) covering
surgical titanium
implants
Electronic
cochlear implants
surgically inserted
Mild 20 to < 34 dB
Moderate 35 to < 64 dB
Severe 65 to < 79 dB
Profound 80 to < 94 dB
Complete 95 dB or greater
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements Financial statements StatementsGovernancePerformance Strategy and Sustainability Overview
13
Resilient industry
Globally, approximately 12 million
people are fitted with new hearing aids
every year, roughly equaling 20 million
hearing aids. This number grows by
5-6% annually, driven by a set of key
factors, including:
1. Increase in number of people with
disabling hearing loss
a. Growing population
b. Aging population
c. Noise pollution (concerts, audio
behavior, occupation, etc.)
2. Increase in number of replacement
cycles of hearing aids due to longer
life expectancies
Historically, little progress has been
made in breaking down the main
barriers to increased user adoption and
unlock further growth of the industry.
The industry is characterized by resi-
lience to general economic turbulence
due to factors including:
1. Growth decoupled from macro
effects (population growth, demo-
graphic shifts)
2. Public reimbursement support
across many markets
3. User group primarily with fixed
income, higher net worth, and less
exposure to unemployment risk
During the COVID-19 pandemic, for
example, the market contracted by
-18% in volume in 2020, as hearing care
professionals were forced to close their
centers. But as soon as 2021, the market
bounced back with +33% growth due
to pent-up demand. In addition, during
the 2008 financial crisis, the market
only dropped by approximately 1% in
terms of volume.
Source: WHO
14WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Component
Suppliers
Become
aware of
hearing loss
Assess
hearing loss
Try &
test
Consider
options to
address
Get fitted with
a hearing aid
Purchase Follow-ups
Research &
Development
Manufacturing
& Assembly
Branding &
distribution to
professionals
and end-users
Distribution channels
The way people obtain hearing aids
varies greatly by country and highly
depends on local reimbursement bene-
fits and support. Most people typically
first consult their general practitioner
and/or ENT (ear, nose, and throat)
specialist, who act as intermediaries,
before going to a professional hearing
care center. Professional channels
include:
a. Independent hearing centers
(incl. ENTs)
b. Governments (public centers,
hospitals)
c. Specialized hearing chains
d. Big Box chains
e. Optical chains
In addition, some people prefer online-
to-offline models where consultation
is done online before being fitted at a
hearing center. Others have insurance
benefits and leverage managed care
providers to help them navigate the
journey (managed care only exists in
the US).
Online direct-to-consumer models
today account for approximately 1% of
the traditional hearing aid market. This
is driven by strong regulation in most
Western countries, where hearing aids
can only be acquired after prescription
and testing by a hearing care profes-
sional. In addition, user preference
for face-to-face consultation and
complexity of the fitting process, espe-
cially for more severe hearing loss, adds
to the low prevalence of online direct-
to-consumer models today. However,
this channel is expected to grow rapidly
as countries start to ease regulation,
self-fitting technologies improve,
and more tech-savvy end users enter
the category. China is one example
where there is limited regulation, and
therefore substantial volume is sold
online via Tmall and other e-commerce
platforms. However, the majority of
this volume consist of Personal Sound
Amplification Products (PSAP) and not
true hearing aids.
In the US, the over-the-counter Hearing
Aid law is now effective. The law allows
certain types of hearing aids to be
made available over the counter (OTC)
to Americans with mild to moderate
hearing loss.
Industry Value Chain
User Journey
15WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
1
Increase awareness
4
Deliver profitable growth
5
Build a wonderful place to work
6
Protect the planet
2
Expand access
3
Tackle affordability
Purpose:
Wonderful
Sound for
All
Strategic ambition
and goals
Our strategic ambition is linked to our purpose of providing
Wonderful Sound for All, while growing a sustainable business.
We aspire to become a true market leader by changing lives
across all markets, channels, and price points.
We have defined 6 strategic goals:
1
Increase awareness – We make
people aware of hearing health and
hearing solutions that fit personal
needs.
2
Expand access – We make it easy
to get hearing solutions wherever
people are.
3
Tackle affordability – We bring rele-
vant hearing solutions to all people,
through technology and commer-
cial innovation.
4
Deliver profitable growth – We
further the investment in R&D and
customer care to strengthen our
solution offering for all.
5
Build a wonderful place to work
– We foster the inclusion of people
with diverse views, opinions, and
backgrounds.
6
Protect the planet – We take care of
the planet and we therefore evolve
towards circular business models.
16WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
FY20 FY21 FY22 FY28
0.5
1.0
1.5
�4.0
FY20 FY21 FY22 FY28
2.2
3.1
3.5
�5.5
FY20 FY21 FY22 FY25
7.2
n/a
7.6
�8.0
FY20 FY21 FY22 FY28
0.8
1.1
1.2
�2.0
FY20 FY21 FY22 FY25
16%
23%
41%
100%
FY20 FY21 FY22
331
464
502
*For FY23
outlook please
go to page 8.
Strategic Goals
For each goal we have set a clear target:
(1) Including public sales, managed care, OTC and price points below pp50.
Our way to differentiate
The hearing aid market for manufac-
turers is highly consolidated, whereas
the retail market is very fragmented.
The competitive landscape of manufac-
turers has been rather stable for the
last few decades, except for the merger
that formed WSA in 2019. Competition
is intensifying, especially in retail,
where manufacturers are including
the direct distribution of products, and
new direct-to-consumer companies
are entering the category in market
segments where regulation allows.
In this competitive market, WSA is well
positioned to be a market leader, due to:
• Scaling advantages from producing
the most hearing aids globally
• Unique multi-brand portfolio
allowing us to cater to more partners
and end users than anyone else,
supported by two distinct audiology
platforms
• Unparalleled R&D setup with 1,000+
people across 3 hubs pioneering
innovation via new design and
features to reduce the stigma,
improve user experience and create
affordable solutions
• Leadership in high-growth distri-
bution channels (Hear.com and
managed care in the US)
• Strong position in fast growing
markets (China, India, Brazil, SEA,
and Turkey)
Areas where we invest
To continue to drive leadership and
strengthen our competitive differentia-
tion, we make investments to:
• Accelerate growth in the Americas,
leveraging our unique business
portfolio
• Strengthen our retail brand and
end-user experience
• Bring new solutions (R&D) to our
partners and end users
• Enhance service across our busi-
nesses to improve our partner and
end-user experience
• Developing and supplying new prod-
ucts and services in the over-the-
counter (“OTC”) self-fitting hearing
aid market in partnership with Sony
Corporation.
Increase awareness
Million people hearing
tested
Profitable growth
Normalized EBITDA, mEUR
Wonderful place to work
Engagement score, 1 - 10
Protect the planet
% of renewable energy
used
Expand access
Million people equipped
with a hearing aid
Tackle affordability
Million people equipped
with hearing aids with
lower private-pay
(1)
1 2 3
4 5 6
17WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
To achieve this vision, we launched a
retail rebranding program in North
America in August that will transform
our retail stores to provide hearing care
consumers with a modern, unified, and
more seamless experience.
In the US, 28 retail brands are now
under one, HearUSA, brand. In Canada,
17 retail brands are now under one,
HearCanada, brand.
Watch
the video
of the
launch
Spotlight story
Rebranding retail in
North America
Introducing the sound
of the new age
Hearing loss is the most common
physical condition that adults face. In
a time where everything is possible,
no one should be left to struggle with
their hearing health. But the prejudice
and negativity associated with hearing
health is still preventing too many from
living their lives to the fullest.
Transforming the hearing health
industry to better meet our clients’
needs while breaking the stigma
around aging to help everyone
embrace the next chapter in their lives
is a bold ambition and it needs a bold
new brand to make it a reality. That is
why we have developed a new retail
brand with the vision of reinventing the
industry standards to deliver cutting
edge hearing care solutions for the
new age.
18WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Business model
Research
& development
Manufacturing
& assembly
Branding & distribution
to partners (B2B)
Branding & distribution
to end-users (B2C)
1,000 people
Work across 3 R&D locations
enabling us to access top talents
across geographies
>150 mEUR
Invested annually in pioneering
innovation across traditional
hearing and beyond
2 audiology platforms
To support our multi-brand
strategy
2,500 people
Work within operations to effi-
ciently produce and distribute
the best hearing aids and
accessories
6 production sites
Distributed across our 3 regions
to ensure a resilient supply
chain: Denmark, Singapore,
Poland, Philippines, Mexico, and
China
5,000 people
Work to directly support
end-users getting the solutions
they need
4 own B2C channels
Allow us to serve end-users
with different preferences:
Retail, Managed Care,
Online, Over-The-Counter/
Direct-To-Consumer
1,000 own hearing centers
Distributed across 20 countries
employing hearing care profes-
sionals who diagnose, fit and
sell hearing aids
3,500 people
Work to support our partners
getting the hearing solutions
they need
5 product brands
Make up our multi-brand
product portfolio: Widex, Signia,
Rexton, AudioService and Vibe
+90,000 partners
Receive hearing solutions from
our portfolio of brands and
businesses
Value
This year, 3.5 million
people were equipped
with WSA hearing aid
devices
EUR 2,351 million
Revenue
EUR 502 million
Normalized EBITDA
generated
Science Based Targets
were submitted and
the share of renewable
electricity reached 41%
Resources
In WSA, we are
12,000 people
Working from
45 offices globally
Our products are
sold in more than
130 countries
Wonderful
Sound for All
Growing a
sustainable business
19WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
In 2022, WSA and HearInAfrica, a
Cape Town based audiology practice,
launched the #Hearittogether Hearing
Healthcare Program. The launch took
place in Grassy Park Western Cape,
where a local NGO partner, LOFOB, and
WSA’s General Practitioner Network,
participated in free hearing screen-
ings as a start to the larger initiative
#Hearittogether.
Hearing care is not common in South
Africa due to lack of awareness and
inadequate access to good audiology
services or affordable hearing aids.
An estimated 4-10% of the South
African population suffer from hearing
loss, 50% of which is preventable. More
than 75% have never had a hearing test.
#Hearittogether is the start of a
journey that aims at not only driving
awareness of hearing care but also to
take an active step in making hearing
screenings, diagnostic tests, and
hearing devices more accessible and
affordable for all.
Together, the Hearittogether partners
bring the hearing test to people where
they are - in churches, in shopping
malls, or at home.
Since the launch of the program, 115
people have participated in hearing
screenings. 83% of them did not pass
the screening, which indicates hearing
issues. Many of them continued the
diagnostic testing and were fitted
with hearing aids from the WSA brand
Rexton.
Spotlight story
South Africa:
Bringing hearing
care to more
people
It is our goal to increase
awareness by making more
people understand their own
hearing needs, expanding
access to reach more people,
and tackling affordability
by providing lower cost
solutions.
Watch
the video
of the
launch
One of the key take-aways
has been the importance of
partnering with local NGOs,
charity organizations, and
other service providers
and role players within the
community.”
Rouxsanne Smit, Product and Brand
Manager at WSA South Africa
20
Overview Strategy and Sustainability Performance Governance Statements Financial statements
7.9
0.7 vs.
Jan 2021
7.8
0.4 vs.
Jan 2021
7.6
0.5 vs.
Jan 2021
In WSA we focus on creating a culture
anchored in a psychologically safe envi-
ronment that embraces differences and
honors diverse views. Our three values
show the company we are building:
Going Beyond Together, where we
embrace diversity and inclusion,
Pioneering for Better Solutions, where
we share our passion for our customers
and consumers, and Passion for Impact,
where we deliver results while we grow
and learn. We have anchored our culture
journey around three main pillars:
1. Strengthening and refining our
people processes to activate the
WSA culture in all touchpoints
2. Establishing a safe and trusted envi-
ronment where all our employees
can thrive, and
3. Expanding our communication
and activation efforts to bring the
culture to life.
Our values # Going beyond
together
# Passion for impact # Pioneering for better
solutions
Building a wonderful
place to work
In our people processes, we focus on
encouraging and living our WSA values
and behaviors. We have also enhanced
our talent development framework
to ensure that we take a broader and
more holistic view when defining the
developmental needs of our talents.
The refinement of our core people
processes and activations has resulted
in a strong improvement in our regular
pulse survey results. Our latest WSA
Heartbeat pulse survey in June 2022
showed that our employees are truly
living our values and there has been
a solid improvement over the last 12
months.
21WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
7.6
Engagement score in
June 2022 - up from 7.2
in Jan 2021.
Employee engagement
The overall engagement score
improved to 7.6 - an increase of 0.4
points compared to last year when we
launched the program. We are pleased
to see this positive development, as
it is an important step towards the
continued efforts to make WSA a
wonderful place to work and grow.
This improvement shows the trust and
support our employees have in the
company and its direction. This means
the collective efforts of everyone within
the company, not least role modelled
by our leaders. Some key highlights
include having more regular global
and local town hall meetings and
‘Ask-Me-Anything Cafes,’ allowing
employees to stay connected with what
is happening across WSA. The majority
of our activation campaigns are driven
by employees. A recent example was
‘Passion for impact’ week in Lynge,
where employees from various func-
tions introduced their innovations
to their fellow colleagues. In Singa-
pore, actions were prioritized around
promoting well-being and social activi-
ties among colleagues. In USA Retail we
launched a Hearing Care Professional
advisory board to ensure providers'
voices are heard and incorporated into
future actions and to further connect
employees to the company.
Employee development
People development is fundamental
for WSA. We are building a culture
where everyone gets the opportunity
to learn and grow and we encourage
our colleagues to learn on the job,
both from colleagues and by attending
formal training.
For leaders, we focus on enhanced
self-awareness using 360-tools and
leadership programs designed for both
new and more experienced leaders.
The main aim is to equip leaders with
the skills and mindset to successfully
deliver on our WSA business priorities
and thrive in today’s fast-changing
world. Team and specialist develop-
ment has also been a focal point.
Additionally, we have invested in Digital
Learning across the company. A total of
86% of all invited employees have acti-
vated their Digital Learning accounts
and completed a total of more than
23,000 courses online.
Diversity and inclusion
At WSA we are committed to building a
company that is inclusive, diverse, and
equitable for all. This is reflected in our
purpose of Wonderful Sound for All and
our value ‘Going beyond together.’
Advancing a diverse, equitable, and
inclusive workforce
We believe diversity is multifaceted,
and it is important to protect and cele-
brate all elements of our employees’
and customers’ identities around
the globe. In early 2022, a global D&I
strategy was introduced to foster an
inclusive, diverse, and equitable work
environment. Moreover, we translated
our global strategy to local strategies
in all three regions (APAC, EMEA, and
Americas), and focused our efforts
on four building blocks (shown to the
right).
Building an inclusive and psychologi-
cally safe culture
A psychologically safe work environ-
ment is a prerequisite for creating a
diverse and inclusive workplace. This
year, HR professionals across all WSA’s
locations participated in unconscious
bias and psychological safety training
courses.
The main objective of these courses
is to spark conversations on how to
cultivate an inclusive and psychologi-
cally safe environment and unlock the
potential of all WSA colleagues.
Creating a deeper
understanding of
what D&I is and the
importance of it.
Establishing a clear
link between D&I,
culture, strategy and
sustainability.
Enabling leaders
to anchor the D&I
agenda locally.
Creating transparency
and celebrating
milestones.
22WS Audiology Annual Report 2021/22
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It takes all kinds of voices to deliver
Wonderful Sound for All and it requires
a psychologically safe environment to
make it possible!
Spotlight story
Diversity
& Inclusion
It takes all kinds of voices to deliver
Wonderful Sound for All and it requires
a psychologically safe environment to
make it possible!
Guided by our WSA values, we believe
that we all should be role models and
contribute to an inclusive and psychologi-
cally safe culture. We are certain that with
such a culture, we will reach our ambi-
tion of building a diverse, equitable, and
inclusive hearing aid company. We know
that diverse views, together with an open
and encouraging culture, make us drive
performance and impactful innovation
to the benefit of our customers and
consumers.
In the past year, we have focused on
anchoring our values, creating an inclu-
sive and psychologically safe environment
through our internal networks – the TIDE
Council (Team for Inclusion, Diversity,
and Equity in the USA) and the global DEI
Network. Both networks have seen an
influx of new members who are motivated
to make a difference.
Ensuring local anchoring:
the TIDE Council focused their
efforts locally on introducing an
Unconscious Bias Training in the US
and rolled out a local DEI Survey
including a focus group discussion
that will further contribute
to developing local strategy
for the US region.
This year’s
mark days related
to diversity, equity
and inclusion were
all opportunities to
celebrate our diversity
and focus on the topic
of inclusion.
Enabling active
allyship: Global DEI
Network focused on
launching guidelines,
articles, and e-learnings
on how to become an
active ally and and
support the culture of
inclusion.
All members went above and beyond
and dedicated their free time to
creating a great place to work that is
inclusive and psychologically safe for
all. Currently, we have 30 passionate
colleagues representing all three
regions, role-modelling our value of
Going Beyond Together by setting clear
standards of behavior for inclusion and
empowering everyone to challenge
exclusionary behavior.
Over the course of 2021 both networks
were successful in implementing
several actions supporting our cultural
journey and the global D&I strategy.
23WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Protect
the planet
At WSA we want to contribute
to meeting global climate
goals, limiting the global
temperature rise to 1.5°C,
and reducing biodiversity
loss. Therefore, we strive to
integrate circular business
models.
1
A circular business model is about
keeping materials in the usage phase
for as long as possible, reduce the
extraction of natural resources, and
reduce the generated wastes. The
circular business model is enabled
by design, realized by operation, and
sorted by business partners such as
customers and suppliers.
1 Understanding circularity - UNEP circularity platform (buildingcircularity.org)
Sustainable materials
FSC paper,
recycled plastics,
and responsible
minerals
Wastes sent for incineration
and energy recovery
End of first life
Give the hearing
aids a second life,
if possible
Product usage
with reduced impact
Energy efficient and
carbon neutral
hearing aids
Clean production
Reduce wastes
generation and
recycle wastes
Circularity by design
Designed to be
durable, resilient,
reparable, and
low impact.
Refurbish
R
e
p
a
i
r
R
e
u
s
e
R
e
c
y
c
l
e
70%
of non-hazardous wastes
from main production sites
are sent for recycling
24WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Clean production
In the ongoing SMART LEAN manu-
facturing program at our Singapore
site, environment is one of the main
pillars where we assess and identify
opportunities to reduce the environ-
mental impact of our production.
Two key results of the assessment
have led to reusing shipping
packaging and recovering e-waste.
Certain components in packaging
are reused. Precious metals from the
e-waste are recovered and the resi-
dues are processed and converted
to cement.
This year, we sent 70% of non-haz-
ardous waste from our main produc-
tion sites to recycling. This means
we have already achieved our 2023
target of increasing recycling rate.
See more in ESG Statements
Note 12.1
Product usage with
reduced impact
At WSA we focus on the entire value
chain when it comes to reducing
environmental impact. As such, we
strive to support our customers and
consumers in reducing environ-
mental impacts associated with our
hearing aids. Our lifecycle assess-
ment has proven that rechargeable
hearing aids are more environmen-
tally friendly than batteries, but we
also understand that all users have
different needs and not everyone
prefers to use rechargeable hearing
aids.
To help our consumers reduce the
carbon footprint associated with
both rechargeable and non-re-
chargeable hearing aids, we have
been running a pilot project offering
carbon-neutral hearing aids to all
customers and consumers in Swit-
zerland since January 2022. As part
of this effort, our Swiss colleagues
engaged with a local reforestation
project through which the carbon
footprint associated with the
hearing aids are offset.
End of first life
We receive our hearing aids back
from consumers after the trial
period or for repair. We reuse parts
and components from the returned
hearing aids where possible. All
reused parts have been thoroughly
tested in accordance with applicable
standards and permissible regula-
tory frameworks. 100% of the elec-
tronic waste from our repair center
is sent for recycling.
There are still many old hearing aids
out there. We conducted a survey to
understand what our consumers do
with old hearing aids they no longer
use. About 24% of the consumers
keep them at home and 22% throw
them away. We see this as an oppor-
tunity and this year, we initiated a
pilot project in our Bloom Hearing
Australia retail shops to take back
used hearing aids from consumers.
The purpose is to give these hearing
aids a second life if possible. With
approximately 95% of the hearing
aids found to be functioning prop-
erly, they are cleaned and donated
to local charity.
At WSA we focus on the entire value chain
when it comes to reducing environmental
impact. As such, we strive to support our
customers and consumers in reducing
environmental impacts associated with our
hearing aids."
Circularity by design
Through product and process
innovation, we strive to design our
hearing aids to be repairable and
recyclable.
Our hearing aids are long-lasting
by design. They are durable and
resilient to external factors, such as
sweat and ear wax. If ever damaged,
the devices are returned to our
Global Service Center, where a dedi-
cated team ensures repair.
Sustainable materials
This year, we started a project to
reduce the environmental impact
of packaging. We established an
internal policy to work toward
phasing out virgin plastics, intro-
ducing FSC-certified paper into
product packaging, and optimizing
shipping packaging to reduce
waste. We support sustainable
forest management by switching
to FSC paper in our packaging. All
the new products developed since
March 2022 will be packed in FSC
paper. With this transition already
underway, 47% of paper packaging
material sourced in this year are
made of FSC paper.
25WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Reduce greenhouse gas emissions
By advancing towards a circular
business model, working closely with
stakeholders in our value chain, we are
not only making more efficient use of
natural resources, but also reducing
our greenhouse gas emissions.
We continue to be committed to
setting science-based targets. In July,
we submitted our Scope 1, 2, and 3
emissions reduction targets to the
Science-Based Targets initiative (SBTi).
We remain committed to transitioning
to 100% renewable electricity where
we operate, including all manufac-
turing sites, offices, warehouses, and
retail stores. This is in line with the
Paris Agreement of limiting the global
temperature rise to maximum 1.5°C. We
will share the full scope of our emis-
sions reduction targets and pathway to
reach the targets after SBTi’s approval.
This year, the share of renewable
electricity reached 41%. We installed
solar panels at our manufacturing
site in Suzhou, China. The solar
panels currently cover about 14%
electricity consumption of our China
site. Together with the wind turbine
outside our Lynge headquarters in
Denmark and the solar panels used
by TruHearing in USA, the renewable
electricity we produced on our sites
accounts for 9% of total consump-
tion. The remaining 32% of renewable
electricity is sourced directly from
utility companies or through energy
attributes certificates. By powering our
business with renewable electricity, we
reduced 4,655 tons CO
2
emissions.
See more in ESG
Statements Note
12.5 and 12.6
Purchased
goods and services
265,960 ton CO
2
eq.
(70.8%)
Waste generated
in operations
3,496 ton CO
2
eq.
(0.9%)
Business travel and
employee commuting
27,289 ton CO
2
eq.
(7.3%)
Energy used
by WSA
12,104 ton CO
2
eq.
(3.2%)
Transport
57,319 ton CO
2
eq.
(15.3%)
Use of sold
products
1,971 ton CO2 eq.
(0.5%)
End of life of
sold products
621 ton CO
2
eq.
(0.2%)
Scope 3
Upstream
Scope 1 & 2
WSA Operations
Scope 3
Downstream
26WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Innovation
Wonderful Sound for All
WSA builds on a 140-year history of driving ground-breaking
innovations in hearing care. While in the past audiological
innovation was the main domain driving our roadmaps, we
are now pursuing a much broader pallet of innovations, while
strengthening our lead in delivering exceptional audiological
benefits.
We are the only player in our industry
that follows two different philoso-
phies with regards to sound: Creating
the most natural sound using ultra-
fast processing in our PureSound
technology and enhancing hearing
performance by offering several break-
through audiological features via our
dual-processor Augmented Experience
technology.
Too many people choose to live with
untreated hearing loss. Our purpose
of bringing wonderful sound to all
through our multi-brand, multi-channel
strategy puts very high standards on
our R&D teams as each brand, each
channel and each consumer segment
has unique requirements. To obtain
those channel- and brand specific
consumer and customer insights
we deploy various strategies. They
range from using classical qualitative,
quantitative, and observational market
research to leveraging GDPR-compliant
big data analysis on datasets derived
from our own retail stores, our on-line
sales agents in hear.com and our fitting
software.
Serving our multi-brand multi-
channel strategy
We are tapping into more technolo-
gies than ever before to accommodate
27WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
+1000
More engineers based
out of our three innova-
tion hubs in Denmark,
Germany, and Singapore
consumer needs. Some examples of
already broadly applied technologies
are ultra-low-power ASIC designs,
advanced speech enhancement, noise
reduction algorithms, electro-acoustic,
rechargeability, Deep Learning and
miniaturization.
Other examples of technologies
used in modern hearing aid designs
are advanced connectivity proto-
cols, allowing our hearing aids to be
connected to mobile phones, and
Artificial Intelligence to help consumers
fine-tune their individual sound expe-
rience within the boundaries set by the
hearing care professional.
Using these diverse technologies,
some of them driven by the consumer
electronics domain, we do not only
serve those channels and customers
that have been relying on our solutions
for decades, but also serve new and
emerging channels such as the optical
and the over-the-counter channel
(OTC). With this growing number of
channels, it also becomes more and
more important to provide an intuitive
UX/UI to the hearing care professionals
who use our fitting software to person-
alize our solutions to the specific needs
of their clients.
On top of this, we spend a significant
amount of effort to make our advanced
hearing solutions available for people,
who cannot afford expensive hearing
aid fittings or do not have access to a
hearing care professional.
Our continuously increasing invest-
ments in R&D have brought us to
a point where we are now serving
more brands than ever before with
brand-specific innovations. Our 1000+
engineers based out of our three
innovation hubs in Denmark, Germany,
and Singapore keep developing unique,
stigma-fighting form-factors and life-
style-oriented accessories.
To remain at the forefront of innovation
we are strengthening our early-phase
innovation efforts, too. This will result
in a broader pipeline of new brand
specific and brand agnostic technol-
ogies available to fuel our product
roadmaps for the future.
To ensure the effectiveness and effi-
ciency of our R&D efforts, we have opti-
mized our so-called platform strategy
with the aim of maximizing relevant
brand differentiation while benefitting
from scale effects in brand agnostic
parts of the solution.
Our latest innovations
During the past business year, the key
innovations around rechargeability
have been rolled out into the portfolio.
The first rechargeable custom-made
in-the-ear solutions, chargers with
built-in power-bank and Qi charging, as
well as portable chargers, have been
designed for a growing part of our
hearing aid portfolio.
In September we introduced innova-
tions on our two main platforms: We
introduced Widex MOMENT SHEER
with improvements in audiology,
design and usability and we added the
Signia My WellBeing APP that uses the
hearing aid sensors for a wide range of
health measurements and four health
indicators.
28WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Our brands
WS Audiology has a strong
brand portfolio with five distinct
product brands and more.
Rooted in unparalleled innovation and decades of experience, our brands are managed
independently and built on truly differentiated platforms with their own unique technology
inside. We take a dialogue-based approach and engage closely with our stakeholders
to ensure continued development and refinement. We conduct research, surveys, and
interviews to establish valuable and actionable insights into the needs, wants, and
aspirations of consumers and hearing care professionals. Through our extensive partner
network of independents, large accounts, and strong local retail brands, we offer the most
differentiated choice of brands to our channel partners and consumers.
29WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Insio Charge&Go AX
(ITE/ITC custom fit)
Pure Charge&Go AX
Pure 312 AX (RIC)
Top 3 products
Styletto AX
(SlimRIC)
Our Brands
Signia
Signia is distributed broadly due to
its presence in brick & mortar and
online channels across wholesale,
retail, and governmental segments,
supported by targeted communication
in key B2B and B2C owned and bought
media. The Augmented Xperience (AX)
platform, the introduction of new
app innovations as well as brand acti-
vation initiatives, have driven Signia’s
growth.
We have continued to expand the
Augmented Xperience platform with
RIC, slim RIC, and custom fit form
factors, upgraded the AX firmware for
better speech intelligibility in rever-
berant environments (Auto EchoShield),
The Signia brand has a clear promise: Be Brilliant. It is both a challenge and an
invitation. A call to everybody with hearing loss to grab the opportunity, take
action, and perform at their best. At the heart of the Signia brand strategy lies
the passion for multi-dimensional user-centric innovation, making the brand
one of the leading players in the hearing aid industry.
In early 2022, Signia received the
CES innovation award for the AX
platform as well as the CES innova-
tion award and the iF design award
for Insio Charge & Go AX . The Net
Promotor Score among Signia
customers is consistently high, as are
the satisfaction scores.
and introduced a new generation of
our Own Voice Processing technology .
Moreover, we introduced HandsFree for
iOS, including the CallControl tech-
nology that allows wearers to answer
and end calls directly on their hearing
aids .
As a natural part of its devotion to
challenging the status quo, Signia has
launched its Responsibility strategy.
Rooted in WSA’s bold ambitions within
Sustainability, the purpose of the Signia
Responsibility strategy is to drive
positive change in partnership with
customers and consumers on topics like
the environment, stigma, and hearing
health.
30WS Audiology Annual Report 2021/22
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When I found
out that Signia
now is making
hearing aids that
are not only small
technological
marvels but
stylishly designed,
I summoned up
the courage.
After 15 years with complex hearing
damage caused by a wild life of night-
clubbing, leading to gradually being
sidelined in meetings, social events,
and groups, I finally sought help for
my hearing loss at the age of 55. It took
me a long time to acknowledge that
the damage was so great that it was
actually having a negative impact on
my busy everyday life. It was difficult
for me to see how I could ever equate
myself with something as archaic as a
hearing aid.
But when I found out that Signia now is
making hearing aids that are not only
small technological marvels but styl-
ishly designed, I summoned up
the courage.
And what a difference it has made!
Simply put, I feel like I’ve gotten large
parts of my quality of life back, and I
would wish no less for others, young
and old alike, who are suffering from
hearing loss. The entire process really
got me thinking about why I could
have ever had so much resistance to a
hearing aid, which, when it really comes
down to it, is not that different from
wearing a pair of glasses. What is it that
makes us ashamed of hearing loss and
getting help for it?
It became clear to me that there is
obviously a huge amount of stigma
associated with the use of hearing
aids. Together with Signia I set out on
a mission. We would work together to
demystify and break down the taboo
surrounding hearing aids, so that
more people could benefit from the
new breakthroughs in this field and
regain their quality of life. I became
a public face for hearing aid use, and
we launched a campaign that awoke
massive interest on social media and in
the press.
Together we have tackled the stigma
and proudly continue this work today.
Biography: Denmark’s Uffe Buchard
works as a creative director within
design, lifestyle, fashion, interiors and
art in his own creative agency Darling
Creative Studio alongside a TV career
lasting for more than two decades.
Reflections from Uffe Buchard
Together we tackle
the stigma
Like every sixth Dane over the age of 18, Uffe Buchard has
problems with hearing. Now, he wants to destigmatize having
hearing loss and wearing hearing aids.
31WS Audiology Annual Report 2021/22
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Our Brands
Widex
Widex continued strengthening the
MOMENT platform by introducing
a rechargeable BTE device and two
new chargers, along with a new RIC
and charger in September. Widex also
updated the design of the award-win-
ning TV PLAY. On the app side, Widex
strengthened its AI leadership by
updating the MOMENT app's My Sound
features and functionalities to better
meet the needs of end users. Further-
more, with the Widex SoundRelax
update, the brand provides new ZEN
tones, which are highly appreciated,
especially by tinnitus patients.
Widex is one of WSA's key brands in the premium B2B2C segment,
catering to the independent channel. At the heart of Widex hearing aids is
its distinctive time-domain signal processing, which is unique compared
to the frequency-domain approach by all other players in the hearing
aid industry. This one-of-a-kind approach to signal processing relies on
principles that mimic how the human ear works, producing the superior,
natural PureSound quality of Widex hearing aids.
Widex Instant
Eartips
Widex Moment
Sheer sRIC
Widex
SoundRelax
TM
By offering a new Point of Sale expe-
rience, Widex is transforming the
traditional clinic environment into an
inviting and stimulating place that
focuses on empowering the patient.
The success of these initiatives is
reflected in high brand awareness and
strong Net Promotor Scores, especially
on service, sound, and app.
Widex continues to share its passion
for sound via the Sound Ambassador
program, which engages with inspi-
rational musicians, composers, and
sound experts. Over the past year, the
program has expanded globally by
partnering with David Garrett and the
Orchestre de Paris. In addition, Widex
has cemented the benefit of the Widex
sound with a long series of testimonials
from satisfied users in Japan, Australia,
Portugal, the US, and more.
Top 3 products
32
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
As a musician,
I live for sound.
Sound is so
much more than
music; hearing is
multifaceted, and
all the different
sounds greatly
influence our
well-being.
As a musician, I live for sound. Sound
is so much more than music; hearing
is multifaceted, and all the different
sounds greatly influence our well-
being. That’s why I like to work to give
people with hearing loss their quality of
life back, especially the natural sound
that people long for. That's precisely
what Widex stands for.
It quickly became apparent to me that
Widex and I share a passion for the
perfect sound. Both of us are interested
in pushing boundaries and becoming
even better.
Since I've been working with Widex and
learned a lot about hearing loss and
the solutions that are available today,
I've been emphasizing the importance
of sound in everyday life. I also find it
important to raise awareness about the
impact hearing impairment has on your
ability to enjoy life if you don’t seek
help in time.
The more I study the subject, the
more it fascinates me, and the more
convinced I am. After all, Widex'
hearing systems strive for perfection
and have a lasting positive impact on
people's quality of life.
And should it need any more proof: I
recently took my mother to a hearing
care professional, and we got a Widex
hearing system for her. Guess what?
She immediately felt safer when
driving, but the most beautiful thing for
her was listening to music. She could
perceive a much more comprehensive
range of sound.
Reflections from David Garrett
Sounds have a
significant influence
on our well-being
David Garrett is an exceptional German/American violinist. At the age of five, he won a prize
at the prestigious Jugend Musiziert (Youth plays Music) competition, and at thirteen, he had
his first recording contract. How did the greatest violinist of his generation become a sound
ambassador for Widex?
33WS Audiology Annual Report 2021/22
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Rexton has been delivering proven hearing technology
to the market since 1955. Over the financial year, Rexton
solidified its unique brand positioning Rely on Rexton.
Our Brands
Rexton
With this brand positioning Rexton
targets hearing aid users who need
durable hearing aids that can with-
stand challenging environments or
situations where reliability is key. They
will perform reliably at home, at work,
during exercise, and you can wear
them in all weather. They are tough and
tested rigorously to answer all chal-
lenges that life throws at its wearers.
Rexton calls their hearing aids: Life-
proof. This focus is also highly visible in
all communication efforts.
Rexton is on a strong growth trajectory,
especially in Latin America, the Middle
East, and Africa.
The launch of the new BiCore product
range has driven sales in the US and
Germany. As a unique benefit for the
product range, the BiCore Technology
separates and processes speech and
background noise to provide the best
speech clarity while maintaining the
background sounds around the wearer.
From a consumer perspective, Rexton
has deployed significant upgrades to
the Rexton Assist and the feature set,
which provides wearers even more
empowering options to personalize and
optimize the hearing aid experience.
Rexton BiCore
Top 3 products
Rexton BiCore
Slim RIC
Rexton BiCore
Custom Li
34
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
The focus of Audio Service is on the
brands of its customers, supporting
them to develop initial product port-
folios and service models, while also
creating the market-driven innovations
that keep them moving forward.
Audio Service has three business areas:
1. Own product labels and hearing aid
portfolios for customers that are
looking for a ready-made portfolio.
2. Private label solutions for large
accounts and solutions for smaller
customers to help them market their
own brand.
3. Non-hearing aid products that
include hearing aid batteries, special
equipment like our Unity measure-
ment system, hygiene, and cleaning
products.
By focusing on the needs and demands
of the various B2B channels, Audio
Service has achieved a healthy growth
over the last 3 years. Audio Service has
the most unique positioning within the
own label business. In the fast-growing
hearing aid industry, Audio Service is
the only partner that puts the custom-
er’s brand first. To achieve this, Audio
Service offers a smart choice of product
& service solutions to help customers
build their own brand.
The Audio Service team also takes
care of two special WSA brand labels:
Coselgi, a business that more than
doubled this fiscal year, and A&M,
which offers a broad range of essen-
tial products. A&M was revitalized in
2021 and has shown solid double-digit
growth since then.
The Audio Service team handles WSA’s B2B customers. The
team partners with a diverse range of companies: independent
audiologists, buying groups, retail brands, and large accounts.
Our Brands
Audio Service
Top 3 products
R Li 7
SR Li 7
ITE/ITC 7
35WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
“Web-fitting” is the process for a
consumer to take an online hearing
screening and then fit his or her Vibe
hearing aid in less than 15 minutes.
Web-fitting was previously only avail-
able for the high-end Vibe products.
Now it is available for the basic prod-
ucts as well.
In 2022, Vibe also received FDA 510(k)
clearance for its new line of Vibe self-fit-
ting hearing aids.
Vibe users in China have been given
the additional option of controlling
their hearing aids with the introduction
of a WeChat mini program – a first in
WS Audiology. Because Android app
stores are not available in China, many
Vibe users didn't have access to the
standard apps to get the best of their
devices.
Over the course of the financial year,
Vibe started new initiatives in Egypt,
Vietnam, Korea, the Philippines, and
Japan with different sales channels.
Examples include e-commerce market-
places, our own webstore, and the
optical channel.
Vibe is the over-the-counter hearing aid brand in markets
outside the United States where people don't have access
to support from an audiologist or do not seek professional
support. Each Vibe product is digitally aided with hearing
screening tools and self-adjustment to make the process easy
for the consumer. This makes Vibe well-positioned to be placed
in new channels such as e-Commerce, optical stores, and
pharmacies. Vibe is already available in some markets.
Our Brands
Vibe
Top products
Vibe Go
Vibe Complete
36
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Strategic Partnership
with Sony Corporation
Top products
CRE-C10
“Invisible” CIC
CRE-E10
Earbud style ITE
Through the partnership, Sony and
WSA will combine their respective
technological and medical expertise
to create solutions that will shape this
new field. To this end, the partnership
will leverage Sony’s longstanding audio
and product miniaturization technolo-
gies, its brand, and its broad consumer
sales and service infrastructure that
manages a wide array of products, in
conjunction with WSA’s hearing aid
technology and innovation strength,
as well as its distribution power in the
professional channel, which has been
at the forefront of providing better
solutions to help people with hearing
loss for over 100 years.
Going forward, both companies
will pursue enhanced products and
services, striving to create OTC hearing
aids that can be used more naturally
and comfortably. By focusing on OTC
hearing aids, both companies are trying
to build a world where top-of-the-line
hearing aids can be obtained more
easily and by all people who are seeking
solutions for better hearing with easy-
to-use features that personalize the
hearing aid.
Sony and WSA introduced the first Sony
branded OTC hearing aid product in
October 2022.
In September, Sony Corporation and WS Audiology informed
the markets that the companies entered into a partnership
agreement and various ancillary agreements with the aim of
jointly developing and supplying new products and services in
the over-the-counter (“OTC”) self-fitting hearing aid market.
37WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Revenue
split by
region
Sales performance
US
Our US business grew 4% organically despite chal-
lenging market conditions in the second half of the
fiscal year. Strong growth was achieved across the
independent segment in our wholesale as we continue
to leverage the multi-brand strategy coupled with
our unique product portfolio to support audiolo-
gists and their clients. A strong volume uptake in
the Managed Care division contributing positively
to the organic growth throughout the year. Our
online business however, continued to be challenged
with disappointing growth rates and market shares
affecting their overall performance and earnings.
We announced our new retail brand across the US,
HearUSA. The brand was received very well, and we
are confident that this will fuel further growth in our
retail footprint.
EMEA-LA-CA
Our teams in EMEA, Latin America and Canada
delivered a solid sales performance, with 9% organic
growth. This is a strong result taking into consideration
the impact from the war in Ukraine, continued chal-
lenges with Covid as well as supply challenges.
The success of the Signia AX platform continued during
the fiscal year. And the launch of Signia Insio Charge
and Go AX in key markets clearly contributed. The
performance in 2021/22 was further supported by Latin
American countries and Canada where our retail busi-
ness delivered a strong organic growth. We continued
our expansion, with the acquisition of the Brazilian
Distributor Audibel Aparelhos Auditivos in the begin-
ning of the year, strongly supported local growth.
APAC
Sales performance was solid in our APAC business,
which increased revenue by 7% organically despite
challenging market conditions. The year was impacted
by severe lockdowns in China and restrictions in other
important markets such as Japan. These were partly
outweighed by strong growth in India and South-East
Asia. New product launches and innovative customer
concepts helped boosting the performance and
secure a faster growth than the market in most of the
countries.
EUR
966 m
+18% reported growth
EUR
1,003 m
+11% reported growth
EUR
382 m
+12% reported growth
US 41%
APAC 16%
EMEA-LA-CA 43%
39
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Profit and loss
Revenue
Revenue amounted to EUR 2,351 million
corresponding to a reported growth
of 14.5%. The organic growth ended at
7.4% in line with the guidance given at
the beginning of the year of high single
digit organic growth. Tailwind from
currencies lifted the reported growth
mainly due to the stronger USD.
After a very strong first half of the
fiscal year with growth rates well above
double-digit, the markets softened in
the second half of the year impacted
by the war in Ukraine, the energy crisis
and rising interest rates.
The revenue growth was driven by
strong performance in the whole-
sale business in all regions and in the
Managed Care business in the US.
China realized negative organic growth
due to Covid lock-downs. The US retail
business was challenged by a shortfall
of HCPs (Hearing Care Professionals)
which impacted revenue for the year.
In the other retail markets growth was
solid.
The growth in revenue was attributable
to a significant growth in volumes as
well as an increase in the average sales
prices (ASP) for the hearing aids driven
by price increases that were success-
fully implemented to compensate for
the high-cost inflation.
Gross profit and margin
WSA’s reported gross profit was EUR
1,376 million, up by 14.5% compared to
last year (2020/21: 1,202 million). The
gross margin remained relatively flat at
58.5%.
Excluding one-time items, the Group’s
normalized gross margin for 2021/22
was lower at 60.8% (2020/21: 61.3%)
driven by higher input costs due to
pressure on the supply chains mainly
related to freight and components,
cushioned by scale effects and syner-
gies realized from the integration and
transformation projects.
Research and development expenses
Total research and development costs
incurred in 2021/22 amounted to EUR
162 million (2020/21: EUR 142 million) of
which EUR 100 million was capitalized.
The R&D spend was kept stable as a
percentage of revenue (around 7%) and
the spend was focused on strength-
ening the future product portfolio
based on our multi-brand strategy.
Selling and general administrative
expenses
Total reported selling and general
administrative expenses were EUR
1,129 million or 48.0% as a percentage
of revenue (2020/21: EUR 997 million
and 48.6%). The improved ratio was
due to scale effects and prudent cost
management. Normalized selling and
general and administrative expenses
were 41.8% as a percentage of revenue,
higher by 1.2% points on comparable
year-on-year basis due to rebranding of
WSA retail stores in US and Canada to
drive further B2C growth.
Effects of normalization
Post-merger, certain one-time costs
and gains incurred are normalized if
they are unusual or non-recurring by
nature. Normalized items are excluded
from the reported EBIT and EBITDA
to arrive at the underlying business
results. Total normalizations, including
hear.com adjustments, for the fiscal
year 2021/22 amounted to a net effect
of EUR 80.2 million (2020/21: EUR 50.6
million) and were mainly impacted by
costs related to the acquisition related
costs of EUR 2.7 million, transforma-
tion projects of EUR 24.9 million, ERP
IT transformation projects of EUR 9.8
million, merger and integration costs
of EUR 6.0 million, others of EUR 12.4
million and hear.com adjustments of
EUR 24.4 million as a result of its unsuc-
cessful IPO and write-down of legacy
receivables.
Financial review
Revenue EUR
2,351m
+14.5% Reported growth
+7.4 % Organic growth
EURm 2021/22 2020/21
R&D expenses (P&L) 120 102
Depreciation & Amortization (58) (41)
Capitalization 100 81
R&D expenditure incurred 162 142
2019/20 2020/21 2021/22
0
200
400
600
800
1000
1200
1400
0
10
20
30
40
50
60
70
62%
54%
53%
84 102 120
999
997
1,128
Opex in percent of
revenue
Sales and general
adminstrative expenses
R&D expensed
Opex in percent of
revenue
40WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Operating profit (EBIT)
Reported EBIT ended at EUR 99 million
(2020/21: 109 million), corresponding
to a reported EBIT margin for 2021/22
of 4.2% (2020/21: 5.3%), mainly due to
lower gross profit. The operating profit
was moreover negatively affected by
one-time costs.
Net financials
Net financial expenses amounted to
EUR 372 million in 2021/22 (2020/21:
EUR 190 million).
The net interest expenses of EUR 226
million were higher than the EUR 216
million in 2020/21 due to higher interest
rates. The net impact from exchange
rate adjustments was EUR -186 million
(EUR -15 million in 2020/21) and related to
the currency revaluation of the USD term
loan due to the appreciation of the USD.
Net result
Net income ended at EUR -270 million,
down EUR 188 million versus 2020/21,
mainly due to the adverse foreign
currency impacts .
Cash flow
Operating activities
Cash flows from operating activities
decreased by 7.3% to EUR 368 million
(2020/21: EUR 397 million) as stronger
EBITDA compared to 2021/22 and
lower tax payments were offset by an
increase in net working capital items
mainly due to higher inventories related
to safety stocks held to compensate for
the tight supplier market for certain
components.
Investing activities
Cash flows from investing activities
increased by 11.0% to EUR 200 million
(2020/21: EUR 180 million) mainly driven
by higher capitalized R&D expendi-
ture. The Group also acquired Audibel
in Brazil and Longkang in China and
expanded the retail footprint through
acquisitions of retail stores in Australia,
France, and US.
Financing activities
Cash flows from financing activities was
an outflow of EUR 198 million (2020/21:
EUR 324 million) mainly due to draw
EURm 2021/22 2020/21
Reported EBITDA 422 413
ERP IT transformation 10 13
Transformation projects 25 13
Merger and integration costs 6 15
Acquisition related costs 2 1
Others 13 (3)
Normalizations (excluding hear.com adjustments) 56 39
Hear.com adjustments 24 12
Normalizations (including hear.com adjustments) 80 51
Normalized EBITDA 502 464
down of credit facilities to finance
investing activities.
Change in liquidity
Total liquidity (cash and available credit
facilities) amounted to EUR 229 million
on 30 September 2022 (EUR 301 million
at 30 September 2021). The reduction in
liquidity was attributable to higher net
working capital and higher capex.
Balance sheet
Total assets
Current assets increased to EUR 766
million mainly due to lower cash and
cash equivalents. Non-current assets
increased by EUR 80 million to EUR
6,014 million largely due to goodwill
from acquisitions and derivatives from
the application of hedge accounting on
the interest rate swaps.
Net working capital
Net working capital amounted to EUR
285 million (EUR 224 million in 2020/21).
Net working capital as a percentage of
sales increased from 11% to 12% mainly
as a result of the higher safety stock.
Interest-bearing net debt
Interest-bearing net debt increased
from EUR 3,504 million to EUR 3,806
million mainly from the translation
effect of the USD term loan and draw-
down of the revolving credit facility.
Reported EBITDA and normalized
EBITDA
Reported EBITDA amounted to EUR 422
million (2020/21: EUR 413 million) corre-
sponding to a reported EBITDA margin
for 2020/21 of 17.9% (2020/21: 20.1%).
The lower EBITDA margin was driven
by a write-off of costs related to the
hear.com IPO that was not effectuated.
Normalized EBITDA increased to EUR
502 million (2020/21: EUR 464 million)
which was in line with the guidance
given at the start of the year of a
normalized EBITDA of above EUR 500
million.
The normalized EBITDA margin fell
from 22.6% to 21.3% due to a lower
gross profit.
41WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Corporate governance
Board of Directors
Executive Board
and Group Management
WS Audiology Group
Remuneration
Committee
Sustainability
Committee
Independent
Auditor
Product Portfolio
Strategy Committee
Shareholders
43WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Main activities of the Board of Directors in
FY21/22
The board directors participated in five general
board meetings and one special update. The
main activities included:
1. Approved budget for next fiscal year
2. Consulted on and approved reorganization to
form new regional structure (Americas)
3. Approved key M&A activities (Long Kang,
Audibel)
4. Consulted on and approved R&D roadmap
5. Consulted on and approved future business
plans by key topics (i.e. Sony OTC partnership
agreement)
6. Consulted on cybersecurity approach
7. Consulted on sustainability approach WSA
44WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Risk management
Risk management
process
Identification
Risks are continously identified
and reported using uniform
templates and tools
Assessment
Identified risks are analysed and
assessed to determine triggers, impact
and likelihood
Monitoring
Development of key risks and mitigation
actions are monitored by risk deep-dives
and reporting
Recording
Key risks are established,
prioritized and documented, and
risk owners are appointed
Mitigation
Risk mitigation action plans
are prepared and implemented
across the affected businesses
High
Low Impact
Probability
High
1
Interest and currencies
2
Cybersecurity
3
Supply chain bottlenecks and Inflation
4
Product development
5
Quality and Regulatory
1
4
5
3
2
WS Audiology’s key risks and relevant mitigating
efforts are described in more detail below.
45WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Risk Description Potential impact Mitigation
Interest and
currencies
Cybersecurity Cybersecurity is a key risk as global market service
46WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Risk Description Potential impact Mitigation
Supply chain
bottleneck and
Ination
Product development As a leading player in the hearing aid markets investment
Quality & Regulatory As a medical device company, we understand that product
47WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Board of directors and executive management
Board of Directors
From left:
Kasper Knokgaard
Jan Tøpholm
Karen Prange
Jes Munk Hansen
Marco Gadola
Malou Aamund
Egbert van Acht
Adam Westermann
Marcus Brennecke
Julian Tøpholm
48
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Chair Vice-Chair
Marco Gadola Jan Tøpholm Malou Aamund Egbert van Acht Marcus Brennecke Jes Munk Hansen
Swiss Danish Danish Dutch German Danish
Marco Gadola is a consultant,
professional board member,
and senior advisor to EQT.
He served as CEO of the
Straumann Group, the world-
leading brand for confidence
in esthetic dentistry, from
2013-2019 after working as
CFO and regional CEO of
APAC for Panalpina from
2008-2012.
Marco Gadola is currently
Chair of DKSH Holding and
Medartis as well as Vice-
Chair of MCH Group. He is
a board member of Tally
Weijl Holding, Straumann,
and AVAG Anlage und
Verwaltungs AG.
Jan Tøpholm is a professional
board member and Chair of
T&W Medical, which is the
main investment vehicle of
the Tøpholm and Westermann
families and the majority
shareholder in WS Audiology.
He is a co-owner of WS Audi-
ology and currently active on
the boards of several compa-
nies controlled by the families
and served as Chair of Widex
from 2013-2021 and CEO of
the company from 1985-2013.
Jan Tøpholm was also a
board member of A.P. Moller -
Maersk from 2001-2014.
Malou Aamund served as
Managing Director of Google
Denmark from 2016-2022.
Prior to that, she worked in
several leading positions in
Microsoft from 2011 - 2016
including as COO and CMO
of the Danish company and
Business Group Leader of
Microsoft Western Europe.
From 2007-2011, she was a
Member of Parliament in
Denmark, and prior to that she
held management positions
in IBM.
Malou Aamund is Chair of
Thinkproject and she is a
board member of KIRKBI A/S,
the LEGO Foundation and DSV.
Egbert van Acht is an inde-
pendent board member,
advisor, and investor in a range
of Consumer Health and Digital
Health companies in Europe,
Asia, and the US. Focus on
scale-up activities and driving
accelerated, profitable growth.
He served as marketing
director at Procter & Gamble
and in a range of leadership
positions at the Philips Group
between 2002 and 2018,
most recently as CEO of the
Personal Health Business
and as member of the Group
Executive Committee. Egbert
van Acht is a member of the
Advisory Council of Latent-
View, a global digital analytics
consulting and solutions firm.
Marcus Brennecke is Partner
and Co-Head of EQT Private
Equity Advisory Team and has
been with EQT since 2005,
where he is a member of the
Equity Partners Investment
Committee, Chair of the
Portfolio Review Committee
and Head of the Industrial
Network.
Prior to joining EQT, he worked
at PE from 1994-2004 and
Axel Springer Publishing
Group from 1987-1994. He
currently serves on the board
of Ottobock.
Jes Munk Hansen has served
as CEO & President of TERMA
Group, which provides
mission-critical solutions for
the defense and aerospace
industry, since 2019 after
holding executive positions at
OSRAM from 2013-2019, most
recently as CEO of OSRAM
USA and Head of OSRAM
Global Sales Function.
Prior to that, he served as
CEO & President of Grundfoss
Holding’s North American
activities, among others. Jes
Munk Hansen is currently a
board member of the Confed-
eration of Danish Industry.
Independent Not independent Independent Independent Not independent Independent
Board of Directors
49WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Board of Directors (continued)
80%
20%
60%
40%
60%
10%
10%
10%
10%
Kasper Grundtvig
Knokgaard
Karen Prange Julian Tøpholm Adam Westermann
Danish American Danish Danish
Kasper Grundtvig Knokgaard
is Partner at EQT Partners
and Global Head of EQT’s
Services Sector Team. He
joined EQT in 2007 and has
worked in the Copenhagen,
New York, and Munich
offices.
Prior to joining EQT Partners,
he worked with McKinsey &
Co.
He is currently also on the
board of Cast & Crew, Magnit
and United Talent Agency.
Karen Prange is a profes-
sional board member and
senior advisor to EQT. She
served as CEO of Global
Animal Health, Medical and
Dental Surgical Group at
Henry Schein and a member
of the Executive Committee
from 2016-2018 after working
as Senior Vice President
of Boston Scientific and
President of the company’s
Urology & Women’s Health
division from 2012-2016.
Prior to that, Karen Prange
held management positions
at Johnson & Johnson and
Cordis. She is currently a
board member of ViewRay,
AtriCure, Nevro and Embecta.
Julian Tøpholm is a senior
advisor at T&W Medical and
a co-owner of WS Audiology.
He has previously held senior
positions at Widex A/S.
He is a board member of
T&W Medical, which is the
main investment vehicle
of the Tøpholm and West-
ermann and the majority
shareholder in WS Audiology.
Adam Westermann is Vice Pres-
ident Global Innovation in R&D
at WS Audiology. He is also
co-owner of WS Audiology.
He has held various positions
in R&D at Widex and WS Audi-
ology since 2015 after working
at the National Acoustics Labo-
ratories in Australia as a PhD
candidate and postdoctoral
researcher from 2011-2015.
Adam Westermann is a board
member of T&W Medical, which
is the main investment vehicle
of the Tøpholm and Wester-
mann families and the majority
shareholder in WS Audiology.
Not independent Independent Not independent Not independent
Diversity
Nationality
Board members elected by shareholders
Gender
Board members elected by shareholders
Swiss
Danish
Dutch
German
American
Male
Female
Diversity among independent
50WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Executive Board
Group CEO Group CFO
Eric Bernard Marianne Wiinholt
French Norwegian
Eric Bernard started his career at
the LVMH Group. He joined Essilor
International in 1994 where he spent 25
years in country, regional, and global
leadership roles and was a member
of its executive committee for nine
years until joining WSA in June 2019.
He has lived in Japan, Singapore, the
US, Australia, and China and currently
resides in Denmark.
Marianne Wiinholt joined WS
Audiology in April 2022 from
Ørsted, the global leader in
off-shore wind, where she was
the CFO since 2013. Prior to
Ørsted she worked in senior roles
at Borealis and Arthur Andersen.
She is currently a board member
and head of the Audit Committees
of both Coloplast and Norsk
Hydro.
Eric Bernard
Group CEO (French)
Marianne Wiinholt
Group CFO (Norwegian)
Maarten Barmentlo
Chief Marketing Officer (Dutch)
Carsten Buhl
President Region Americas (Danish)
Roberto Di Fiore
Chief Operations Officer and
President Region APAC (Italian)
Mary Doumtsi
Chief Retail Officer (Greek)
Thomas Hies
Chief Quality & Regulatory
Officer (German)
Nicolai Jensen
Chief HR Officer (Danish)
Roman Lychman
Chief IT Officer (Ukrainian)
Stefan Menzl
Chief R&D Officer (Swiss)
Jan-Peter Rekling
President Region Nordic (Danish)
Dawn Seah
Chief Legal Officer (Singaporean)
Annemarie van Neck
President Region EMEA (Dutch.
Joined WSA 1 November 2022)
Group Management
Read CVs at WSA.com
51
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Ownership
distribution
51%
49%
Ownership
WS Audiology share capital is divided
into 100 million shares, enjoying equal
voting rights and dividend rights. WS
Audiology is privately owned by T&W
Medical A/S – the jointly owned invest-
ment vehicle of families Tøpholm and
Westermann – as well as funds under
the management of EQT.
The owners possess comprehensive
healthcare industry and technology
insight as well as experience building
global market leaders with significant
value-creation opportunities.
Debt and ratings
The WS Audiology Group has issued
senior secured and second lien loans in
its holding company Auris Luxembourg
III S.A. The holding company Auris
Luxembourg II is rated by Fitch, S&P,
and Moody’s.
Annual General Meeting
and dividends
The Board of Directors will not propose
distribution of dividends at the Annual
General Meeting to be held on January
16, 2023.
Investor Relations
It is WS Audiology’s objective to provide
information about matters deemed
relevant to enable debt investors and
rating agencies to assess the business
and financial development and risks of
the WS Audiology Group.
Financial calendar
February 2023 Q1 interim results
presentation 2022/23
May 2023 H1 interim results
presentation 2022/23
August 2023 9M interim results
presentation 2022/23
December 2023 Annual results
presentation 2022/23
Investor Relations contact
Henning Klemmensen
Head of Group Treasury, Insurance
& Investor Relations
Tel. +45 44 35 56 00
investor.relations@wsa.com
Current ratings ( as of Nov 2022 )
Issuers Fitch S&P Moody’s
Auris Luxembourg II SA
(Corporate Family/Issuer)
B-Stable
Outlook
B-Stable
Outlook
B3-Stable
Outlook
T&W Medical A/S
EQT VII, VIII and co-investors
Investor information
The Executive Board and the Investor
Relations function manage relations
with debt investors and rating agencies
and host quarterly conference calls.
52WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Statement by
Management on the
Annual Report
Executive Management
Board of Directors
54WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Management Report
Management report
Independent auditor's report
Opinion
Basis for opinion
Management's responsibilities for the consolidated
financial statements and the parent financial
statements
55WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Independent auditor's report
Auditor's responsibilities for the audit of the
consolidated financial statements and the parent
financial statements
Business Registration No 3 3 96 3 5 56
Identification No. (MNE)
Identification No. (MNE)
56WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Independent auditor’s
assurance report
To the Management and stakeholders of
WS Audiology A/S
Management’s responsibility
57WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Independent auditor's assurance report
Conclusion
Copenhagen, 28 November 2022
Deloitte
Statsautoriseret Revisionspartnerselskab
Business Registration No 33 96 35 56
Nikolaj Thomsen
State-Authorized Public Accountant
Identification No. (MNE) mne33276
Helena Barton
Partner, ESG and Lead Reviewer
58WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Contents
1 Basis of preparation 67
1.1 General accounting policies 67
1.2 Significant accounting estimates
and judgments 69
1.3 Adoption of new and amended IFRS 69
2 Results of the year 70
2.1 Revenue 70
2.2 Staff costs 72
2.3 Income taxes 73
3 Operating assets and liabilities 78
3.1 Intangible assets 78
3.2 Property, plant and equipment 82
3.3 Depreciation, amortization, and impairment 83
3.4 Right-of-use assets/Lease liabilities 85
3.5 Customer loans 87
3.6 Other assets 89
3.7 Inventories 89
3.8 Trade receivables 90
3.9 Other liabilities 92
3.10 Provisions 93
Notes to the Consolidated Financial Statements
Income Statement 62
Statement of Comprehensive Income 62
Balance Sheet 63
Statement of Cash Flows 64
Statement of Changes in Equity 65
Consolidated Financial Statements
4 Capital structure and financing items 95
4.1 Outstanding shares 95
4.2 Financial risks and financial instruments 96
4.3 Liabilities from financing activities 106
4.4 Financial income and expenses 107
4.5 Government grants 107
5 Other disclosures 108
5.1 Business combinations 108
5.2 Remuneration of Key Management Personnel 111
5.3 Management Participation Program liability 111
5.4 Pension obligations 112
5.5 Contingent assets and liabilities 117
5.6 Associates 117
5.7 Non-cash adjustments 118
5.8 Fees to auditors appointed at the
annual general meeting 118
5.9 Related parties 119
5.10 Companies in the WS Audiology A/S Group 119
5.11 Significant events after the balance sheet date 124
5.12 Approval of the consolidated financial statements 124
WS Audiology Annual Report 2021/22
Overview Strategy and Sustainability Performance Governance Statements Financial statements
61
Consolidated Contents
Consolidated Financial Statements
EURm Note 30 Sept. 2022 30 Sept. 2021
Revenue 2.1 2,351.1 2,053.2
Cost of goods sold (974.8 ) (850.8 )
Gross profit 1,376.3 1,202.4
Research and development costs 3.1 (119.9 ) (102.4 )
Selling and general administration expenses (1,128.6 ) (997.0 )
Other operating (costs)/income, net (28.6 ) 5.4
Share of (loss)/profit in associates, net of tax 5.6 (0.5 ) 0.2
Operating profit 98.7 108.6
Interest income 4.4 7.9 5.7
Interest expenses 4.4 (233.5 ) (222.1 )
Other financial (expenses)/income, net 4.4 (146.3 ) 26.4
Loss before tax (273.2 ) (81.4 )
Income taxes 2.3 3.1 (0.5 )
Loss for the year (270.1 ) (81.9 )
Attributable to:
Non-controlling interests (4.7 ) 5.2
Shareholders of WS Audiology A/S (265.4 ) (87.1 )
EURm Note 30 Sept. 2022 30 Sept. 2021
Loss for the year (270.1 ) (81.9 )
Items that will not be reclassified to profit or loss:
Actuarial gains 5.4 9.6 8.1
Tax on items that will not subsequently
be reclassified to the income statement 2.3 (2.9 ) (2.5 )
Capital gains tax on sale of a subsidiary 2.3 - (6.7 )
Items that may be reclassified subsequently
to profit or loss:
Change in fair value gains of cash flow hedge 96.2 1.6
Tax on items that have been or may subsequently
be reclassified to the income statement 2.3 (26.1 ) (0.3 )
Foreign currency translation differences 102.0 15.9
Other comprehensive income for the year, net of tax 178.8 16.1
Total comprehensive loss for the year (91.3 ) (65.8 )
Attributable to
Non-controlling interests 4.3 5.0
Shareholders of WS Audiology A/S (95.6 ) (70.8 )
Income Statement
For the financial year ended 30 September 2022
Statement of Comprehensive Income
For the financial year ended 30 September 2022
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Income Statement CON Statement of Comprehensive Income
Consolidated Financial Statements
EURm Note 30 Sept. 2022 30 Sept. 2021
Assets
Goodwill 3.1 3,623.0 3,559.3
Other intangible assets 3.1 1,802.1 1,866.8
Property, plant and equipment 3.2 165.5 145.4
Right-of-use assets 3.4 198.3 205.8
Investments in associates 5.6 3.7 4.2
Deferred tax assets 2.3 48.3 80.1
Customer loans 3.5 50.2 54.0
Other assets 3.6 122.4 17.6
Total non-current assets 6,013.5 5,933.2
Inventories 3.7 198.1 168.4
Trade receivables 3.8 305.5 288.2
Current income tax receivables 41.2 34.4
Customer loans 3.5 19.6 17.2
Other assets 3.6 77.6 82.0
Cash and cash equivalents 123.7 144.5
Total current assets 765.7 734.7
Total assets 6,779.2 6,667.9
EURm Note 30 Sept. 2022 30 Sept. 2021
Equity and Liabilities
Share capital 4.1 100.0 100.0
Other reserves 2,182.5 2,029.0
Accumulated losses (744.1 ) (485.2 )
Total equity attributable to the shareholders
of WS Audiology A/S 1,538.4 1,643.8
Non-controlling interests 55.0 57.4
Total equity 1,593.4 1,701.2
Long-term debts 4.3 3,824.2 3,523.9
Lease liabilities 4.3 174.0 182.5
Pension obligations 5.4 15.9 17.1
Provisions 3.10 28.0 29.6
Deferred tax liabilities 2.3 340.7 369.0
Other liabilities 3.9 92.8 128.7
Total non-current liabilities 4,475.6 4,250.8
Short-term debts 4.3 105.6 124.7
Lease liabilities 4.3 44.1 40.7
Trade payables 218.7 231.7
Current income tax liabilities 32.6 28.6
Provisions 3.10 77.8 60.1
Other liabilities 3.9 231.4 230.1
Total current liabilities 710.2 715.9
Total equity and liabilities 6,779.2 6,667.9
Balance Sheet
As at 30 September 2022
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Balance Sheet
Consolidated Financial Statements
EURm Note 30 Sept. 2022 30 Sept. 2021
Operating activities
Loss for the year (270.1 ) (81.9 )
Depreciation, amortization and impairment 3.3 322.7 304.8
Income tax expense, net 2.3 (3.1 ) 0.5
Interest expense, net 225.6 215.8
Loss/(Gain) on sales and disposals of intangibles,
plant and equipment and right-of-use assets 0.7 (0.5 )
Reversal of impairment loss on right-of-use assets 3.4 (1.1 ) (0.4 )
Share of loss/(profit) in associates 5.6 0.5 (0.2 )
Other non-cash adjustments 5.7 234.8 22.5
Cash flow from operating activities before
changes in working capital 510.0 460.6
Change in inventories (4.8 ) (21.7 )
Change in trade and other receivables (7.1 ) 2.1
Change in trade payables (42.1 ) 40.0
Change in customer loans 6.3 13.7
Change in other assets and other liabilities (81.6 ) (56.2 )
Change in provisions 9.9 (4.3 )
Cash flow from operating activities before
financial items and tax 390.6 434.2
Financial income received 7.0 3.5
Income taxes paid, net (29.5 ) (40.6 )
Cash flow from operating activities 368.1 397.1
EURm Note 30 Sept. 2022 30 Sept. 2021
Investing activities
Acquisition of companies/operations, net of cash acquired (35.4 ) (46.1 )
Investments in intangible assets and property,
plant and equipment (177.5 ) (140.7 )
Investments in other assets 0.2 -
Proceeds from disposal of intangible assets and property,
plant and equipment 13.0 6.7
Cash flow used in investing activities (199.7 ) (180.1 )
Cash flow from operating and investing activities 168.4 217.0
Financing activities
Transaction costs paid for issuance of long-term debt 4.3 (0.9 ) −
Proceeds from long-term and short-term debt 4.3 199.1 82.8
Repayment of long-term and short-term debt 4.3 (162.1 ) (166.9 )
Other transactions with non-controlling interests (7.6 ) 2.8
Financial expenses paid 4.3 (171.9 ) (190.1 )
Cash flows relating to lease liabilities 4.3 (56.5 ) (51.4 )
Change in other short-term debt and other financing
activities 1.3 (1.5 )
Cash flow used in financing activities (198.6 ) (324.3 )
Net cash flow (30.2 ) (107.3 )
Cash and cash equivalents, beginning of year 144.5 248.5
Adjustment foreign currency, cash and cash equivalents 9.4 3.3
Cash and cash equivalents, end of year 123.7 144.5
Statement of Cash Flows
For the financial year ended 30 September 2022
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Statement of Cash Flows
Consolidated Financial Statements
EURm
Share
capital
Other
reserves
Foreign
exchange
adjustments
Hedging
reserve
Accumulated
losses
Equity of
shareholders in
WS Audiology A/S
Non-
controlling
interests
Total
equity
Equity at 30 September 2021 100.0 2,041.5 (12.9 ) 0.4 (485.2 ) 1,643.8 57.4 1,701.2
Loss for the year − − − − (265.4 ) (265.4 ) (4.7 ) (270.1 )
Actuarial gains − − − − 9.6 9.6 − 9.6
Adjustment of cash flow hedges − − − 96.2 − 96.2 − 96.2
Foreign exchange adjustment, etc. − − 93.0 − − 93.0 9.0 102.0
Tax relating to other comprehensive income − − (2.8 ) (23.3 ) (2.9 ) (29.0 ) − (29.0 )
Total comprehensive loss for the year – – 90.2 72.9 (258.7 ) (95.6 ) 4.3 (91.3 )
Changes in other reserves − (9.6 ) − − (0.2 ) (9.8 ) 0.9 (8.9 )
Dividends − − − − − − (6.5 ) (6.5 )
Other transactions with non-controlling interests − − − − − − (1.1 ) (1.1 )
Equity at 30 September 2022 100.0 2,031.9 77.3 73.3 (744.1 ) 1,538.4 55.0 1,593.4
Statement of Changes in Equity
For the financial year ended 30 September 2022
Consolidated Financial Statements
WS Audiology Annual Report 2021/22
65
Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Statement of Changes in Equity
Consolidated Financial Statements
EURm
Share
capital
Other
reserves
Foreign
exchange
adjustments
Hedging
reserve
Accumulated
losses
Equity of
shareholders in
WS Audiology A/S
Non-
controlling
interests
Total
equity
Equity at 30 September 2020 100.0 2,047.6 (28.8 ) (1.1 ) (397.0 ) 1,720.7 49.5 1,770.2
Loss for the year − − − − (87.1 ) (87.1 ) 5.2 (81.9 )
Actuarial gains − − − − 8.1 8.1 − 8.1
Adjustment of cash flow hedges − − − 1.6 − 1.6 − 1.6
Foreign exchange adjustment, etc. − − 16.1 − − 16.1 (0.2 ) 15.9
Tax relating to other comprehensive income − − (0.2 ) (0.1 ) (9.2 ) (9.5 ) − (9.5 )
Total comprehensive loss for the year − − 15.9 1.5 (88.2 ) (70.8 ) 5.0 (65.8 )
Changes in other reserves − (3.2 ) − − − (3.2 ) − (3.2 )
Other transactions with non-controlling interests − (2.9 ) − − − (2.9 ) 2.9 −
Equity at 30 September 2021 100.0 2,041.5 (12.9 ) 0.4 (485.2 ) 1,643.8 57.4 1,701.2
Description of Other reserves:
– Capital reserve relates to deemed contribution by the shareholders in relation to the reverse acquisition in 2018/19.
– The difference between the consideration paid, in the form of acquiring the shares of the Sivantos Group and the net equity of the subsidiaries acquired in 2018/19.
– The elimination of the investment in the Widex Group in 2018/19.
– The reserves under the scope of IFRS 2 (Note 5.3).
Statement of Changes in Equity (cont’d)
For the financial year ended 30 September 2022
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements Consolidated Financial Statements
Notes
– For the financial year ended 30 September 2022
1 Basis of preparation
The consolidated financial statements for the
Group and separate parent financial statements
for WS Audiology A/S have been prepared in
accordance with IFRS as adopted by the European
Union (EU) and additional requirements of the
Danish Financial Statements Act Large C.
The consolidated financial statements and sepa-
rate parent financial statements are presented
in Euros (EUR) which is the functional currency of
WS Audiology A/S. All values are rounded to the
nearest million (EUR) with one decimal, except
where indicated otherwise.
The Group’s general accounting policies are
described in Note 1.1 General accounting policies
below. In addition to this, specific accounting
policies are described in each of the individual
notes to the consolidated financial statements.
The accounting policies set out below and, in each
note, have been used consistently in respect of
the financial year and the comparative figures.
1.1 General accounting policies
Basis of consolidation
The consolidated financial statements comprise
the financial statements of WS Audiology A/S
(the parent company) and subsidiaries, which are
entities controlled by WS Audiology A/S, prepared
in accordance with Group policies. The Group
controls an entity when it is exposed to, or has
rights to, variable returns from its involvement
with the entity and has the ability to affect those
resulting gain or loss is recognized in profit or
loss.
Translation of foreign currency
A functional currency is determined for each of
the reporting entities in the Group. The func-
tional currency is the primary currency used
for the reporting entity’s operations. Transac-
tions denominated in other than the functional
currency are translated into the functional
currency at the exchange rates at the transaction
date. Foreign exchange differences between the
exchange rate at the transaction date and at the
date of payment are recognized in other financial
income/expenses, net.
The WS Audiology Group has significant activities
in EUR and has raised significant debt in EUR.
Therefore, the functional currency of WS Audi-
ology A/S and the presentation currency of the WS
Audiology Group is determined to be EUR.
Monetary assets and liabilities denominated
in foreign currencies are translated into the
functional currency at the exchange rate at
the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a
foreign currency are translated into the functional
currency at the exchange rate when the fair value
was determined. Non-monetary items that are
measured based on historical cost in a foreign
currency are translated at the exchange rate at
the transaction date.
returns through its power over the entity. Subsidi-
aries are listed in note 5.10.
The consolidated financial statements are
prepared by combining items of a uniform nature
and subsequently eliminating intercompany
transactions, internal shareholdings and balances
and unrealized intercompany gains or losses. The
financial statements of subsidiaries are included
in the consolidated financial statements from the
date on which control commences and until the
date on which control ceases.
The accounting items of subsidiaries are recog-
nized 100% in the consolidated financial state-
ments. Non-controlling interest’s share of subsid-
iaries’ profit or loss for the year and of equity are
included in the Group’s profit or loss and equity,
but are disclosed separately.
Acquisitions or disposals on non-controlling
interests in subsidiaries, which does not result in
obtaining or losing control of such subsidiaries,
are treated as an equity transaction in the consol-
idated financial statements, and any difference
between the consideration and the carrying
amount of the non-controlling interest is allocated
to the Parent’s share of the equity.
When the Group loses control over a subsidiary,
it derecognizes the assets and liabilities of the
subsidiary, as well as any related non-controlling
interests and other components of equity. Any
interest retained in the former subsidiary is
measured at fair value when control is lost. Any
Foreign exchange differences are generally recog-
nized in other financial income/expenses, net in
the income statement. However, the following
foreign exchange differences are recognized in
other comprehensive income (“OCI”):
• Qualifying cash flow hedges to the extent that
the hedges are effective
• Foreign exchange adjustment of balances with
foreign entities that are considered part of the
net investment in the entity
The assets and liabilities of foreign operations,
including goodwill and fair value adjustments
arising on acquisition, are translated into EUR
at the exchange rates at the reporting date. The
income statements and statement of cash flows
of foreign operations are translated into EUR at
average exchange rates for the period, unless
such average exchange rates are unrepresenta-
tive of the exchange rates prevailing at the trans-
action dates, in which case the transaction date
exchange rates are applied.
Foreign exchange differences arising on transla-
tion of the opening balance of equity of foreign
entities at the exchange rate at the reporting date
and on translation of the income statement from
the average exchange rate to the exchange rate
at the reporting date are recognized on other
comprehensive income and attributed to a sepa-
rate translation reserve in equity, except to the
extent that the translation difference is allocated
to non-controlling interests.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 1 CON Note 1.1
Consolidated Financial Statements
Notes
On complete or partial disposal of a foreign
entity such that control, significant influence or
joint control is lost, or on repayment of balances
that constitute part of the net investment in
the foreign entity, the share of the cumulative
amount of the exchange differences recognized
in other comprehensive income relating to
that foreign entity is recognized in the income
statement as part of the gain or loss on disposal.
When the Group disposes of part of its interest
in a subsidiary but retains control, the relevant
portion of the cumulative amount is reattributed
to non-controlling interest. On partial disposal
of an associate or joint venture while retaining
significant influence or joint control, the relevant
portion of the cumulative amount is reclassified to
the income statement.
Statement of cash flows
The cash flow statement shows cash flows from
operating, investing and financing activities as
well as cash and cash equivalents at the beginning
and the end of the financial year.
Cash flows from operating activities are presented
using the indirect method and calculated as the
profit or loss for the period adjusted for non-cash
operating items, changes in working capital and
income taxes paid.
1.1 General accounting policies (cont'd)
Cash flows from investing activities comprise
payments in connection with acquisition and
divestment of enterprises, activities and fixed
asset investments as well as purchase, develop-
ment, improvement and sale, etc. of intangible
assets and property, plant and equipment. Cash
flows from acquired enterprises are recognized
in the cash flow statement from the acquisition
date. Cash flows from disposed enterprises are
recognized up until the disposal date.
Cash flows from financing activities comprise
changes in the size or composition of the contrib-
uted capital and related costs as well as the
raising of loans, repayment of interest-bearing
debt (principal and interest), lease liabilities,
acquisition and disposal of treasury shares and
payment of dividends to shareholders.
Cash and cash equivalents comprise cash and
short-term securities with an insignificant price
risk.
Cash flows cannot be derived directly from the
statement of financial position and income state-
ment.
Applying materiality
The consolidated financial statements are a result
of processing large numbers of transactions
and aggregating those transactions into classes
according to their nature or function. The trans-
actions are presented in classes of similar items
in the consolidated financial statements. If a line
item is not individually material, it is aggregated
with other items of a similar nature in the consoli-
dated financial statements or in the notes.
There are substantial disclosure requirements
throughout IFRS. Management provides specific
disclosures required by IFRS unless the informa-
tion is not applicable or considered immaterial
to the economic decision-making of the users of
these financial statements.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 1.2
Consolidated Financial Statements
Notes
Specific accounting estimates and judgments are described in each of the following individual notes to the
consolidated financial statements:
Principal accounting policies Key accounting Note Estimation risk
Income tax and deferred
income taxes
Judgment and estimate of deferred tax assets
and uncertain tax positions
2.3 Medium
Depreciation, amortization
and impairment
Estimates used in impairment testing 3.3 High
Depreciation, amortization
and impairment
Estimates of useful lives of intangible asset and
property, plant and equipment
3.3 Medium
Financial instruments Judgment and estimate for expected credit
losses for customer loans
3.5 Medium
Provisions Estimates over the measurement of provisions 3.10 Medium
Business combinations Estimates over the measurement of contingent
consideration
5.1 Medium
1.2 Significant accounting estimates and judgments
In preparation of the consolidated financial statements, Management makes various accounting estimates
and judgments that form the basis of presentation, recognition and measurement of the Group’s assets,
liabilities, income and expenses. The key accounting estimates identified are those that have a significant
risk of resulting in a material adjustment to the carrying amounts of assets or liabilities within the next
financial year.
The application of the Group’s accounting policies may require Management to make judgments that can
have a significant effect on the amounts recognized in the consolidated financial statements. Manage-
ment judgment is required in particular when assessing the substance of transactions that have a compli-
cated structure or legal form.
The accounting estimates and judgments made are based on historical experience and other factors that
Management assesses to be reliable, but that, by nature, are associated with uncertainty and unpredicta-
bility and may therefore prove incomplete or incorrect.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 1.3
Consolidated Financial Statements
Notes
2 Results of the year
2.1 Revenue
EURm 30 Sept. 2022 30 Sept. 2021
Revenue by geographic region:
EMEA-LA-CA 1,002.6 900.0
US 966.2 817.8
Asia-Pacific 382.3 335.4
Total 2,351.1 2,053.2
Revenue is predominantly recognized at a point in time, and revenue recognized over time is not signif-
icant. Revenues are attributed to countries on the basis of the customer's location. The Region “EMEA-
LA-CA” consists of Europe, the Middle East, Africa, Canada and Latin-America. The Region “US” is the
United States. The Region “Asia-Pacific” consists of Asia, Australia and the Pacific region.
Consolidated revenue mainly derives from sale of goods and is broken down by the selling entity. No
individual customer accounts for 10% or more of the total revenue. The Group considers its operations to
constitute a single operating segment.
Contract liabilities
The Group has recognized the following liabilities related to contracts with customers:
EURm 30 Sept. 2022 30 Sept. 2021
Customer prepayments 13.9 9.4
Deferred revenue 36.6 31.2
Volume discounts 43.3 45.9
Right of return 30.7 23.8
Total 124.5 110.3
Significant changes in the contract liabilities balances during the year are as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Contract liabilities
Opening balance at 1 October 110.3 102.2
Foreign currency translation adjustments 10.3 (5.5)
Revenue recognized that was included in the contract liability from
prior year and current year balance (53.1) (43.1)
Advances received during the year 55.9 51.0
Others 1.1 5.7
Total 124.5 110.3
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 2 CON Note 2.1
Consolidated Financial Statements
Notes
2.1 Revenue (cont'd)
§
Accounting policies
Revenue from sale of products is recognized when
the Group has transferred control of products
sold to the buyer and it is probable that the Group
will collect the consideration to which it is entitled
for transferring the products. Control of the
products is transferred at a point in time, typically
on delivery.
Revenue is measured at the fair value of the con-
sideration received or receivable net of discounts,
VAT and other duties.
Contracts with customers sometimes include
multiple promises that constitute separate per-
formance obligations, and to which a portion of
the transaction price needs to be allocated. The
total transaction price in the contract is allocated
to separate performance obligation based on the
relative stand-alone selling prices of each such
performance obligation. Each separate perfor-
mance obligation is recognized when control is
transferred to the customer.
When products are sold with a right of return, a
refund liability and a corresponding adjustment
to revenue is recognized for those products ex-
pected to be returned. In such cases, the expected
returns are estimated based on an analysis of his-
torical experience adjusted for any known factors
impacting expectations for future return rates. To
the extent that the Group will be able to recover
the cost of returned products, when the custom-
ers exercise their right to return, a separate right
to returned products asset and a reduction in cost
of sales is recognized.
Discounts, rebates, and sales incentives
to customers
The Group pays various discounts, rebates and
sales incentives to customers including trade dis-
counts and volume rebates. Furthermore, custom-
er discounts include the difference between the
present value and the nominal amount of loans to
customers at below market interest rates, cf. Note
3.5 Customer loans.
Discounts, rebates, and sales incentives to
customers are deducted from revenue and are
measured using either the expected value method
or the most likely amount method depending on
which method better predicts the amount of con-
sideration to which the Group will be entitled net
of discounts, rebates and sales incentives.
Estimates of the number of returns of products
under customers right of return are based on the
right of return policies and practices, accumulated
historical experience, sales trends and the timing
of returns from the original transaction date
when applicable. Where new products are sold
or products are sold to new markets, for which
sufficient historical experience does not exist,
refund liability and revenue to be recognized
are based on estimated demand and acceptance
rate for well-established products with similar
market characteristics. If such similar product or
market characteristics do not exist, recognition
of revenue is postponed until there is evidence of
consumption of the products by the customer, or
when the right of return has expired.
Discounts, rebates and sales incentives are esti-
mated and accrued when the related revenue is
recognized. To make such estimates require use
of judgment, as all conditions are not known at
the time of the sale, e.g. the number of units sold
to a given customer or the expected utilization of
loyalty programmes. Liabilities in respect of sales
discounts, rebates and loyalty programmes are
adjusted, as the Group gain better information
on the likelihood that they will be realized and the
value at which they are expected to be realized.
The accrual against revenue of discounts from
issue of customer loans at off-market terms (cf.
Note 3.5 Customer loans) is based on the cus-
tomers total committed purchases of products
throughout the term of the customer loan, and is
recognized as a discount for each product sold.
Extended warranties
The Group offers customers the option to sepa-
rately purchase extended warranties for inven-
tories sold. The extended warranty is a distinct
service to the customer. Under IFRS 15, the Group
accounts for a service-type warranty as a separate
performance obligation to which the Group
allocates a portion of the transaction price when
the warranty is bundled together with the sale of
inventories. The portion of the transaction price
allocated to the service-type warranty is initially
recorded as a contract liability and recognized as
revenue on a straight-line basis over the period
the warranty services are provided. Revenue
is recognized when the customer receives the
warranty coverage and loss and damage as part of
the purchase of the hearing aid.
The standard warranty period for hearing aids
varies across territories, typically between 12 and
36 months. The extended warranty covers periods
beyond the standard warranty period or standard
warranty terms. Payment terms vary significantly
across territories.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
2.2 Staff costs
EURm 30 Sept. 2022 30 Sept. 2021
Wages, salaries and remuneration 709.8 614.9
Statutory social welfare contributions 75.6 67.7
Expenses relating to pension plans and long-term employee benefits 20.4 17.1
Total 805.8 699.7
Included in:
Cost of goods sold 131.8 110.5
Research and development costs 100.9 88.3
Selling and general administration expenses 573.1 500.9
Total 805.8 699.7
Average number of full-time employees 12,000 11,441
For information regarding remuneration of the Board of Directors, Executive Management and other Key
Management Personnel, please refer to Note 5.2 Remuneration of Key Management Personnel.
§
Accounting policies
Wages, salaries, social security contributions, annual leave and sick leave, bonuses and non-monetary
benefits are recognized in the year in which the associated services are rendered by employees of the
Group. Where the Group provides long-term employee benefits, the costs are accrued to match the ren-
dering of the services by the employees concerned.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 2.2
Consolidated Financial Statements
Notes
EURm 30 Sept. 2022 30 Sept. 2021
Tax relating to other comprehensive income
Actuarial gains 2.9 2.5
Adjustment of cash flow hedges 23.3 0.1
Foreign exchange adjustments, etc. 2.8 0.2
Gain on sale of a subsidiary - 6.7
Total 29.0 9.5
Deferred Tax
EURm 30 Sept. 2022 30 Sept. 2021
Opening deferred tax, net (288.9) (288.2)
Foreign currency translation adjustments (0.7) 0.6
Changes in deferred tax assets recognized in income statement 29.7 8.2
Additions relating to acquisitions (3.1) −
Adjustment of deferred tax, prior years (1.1) (7.6)
Impact of changes in corporate tax rates 0.7 0.8
Deferred tax related to changes in equity, net recognized in other
comprehensive income (29.0) (2.7)
Closing deferred tax, net (292.4) (288.9)
Deferred tax recognized in the balance sheet
Deferred tax assets 48.3 80.1
Deferred tax liabilities (340.7) (369.0)
Deferred tax, net (292.4) (288.9)
2.3 Income taxes
Income taxes consists of the following:
EURm 30 Sept. 2022 30 Sept. 2021
Current tax for the year (30.6) (4.5)
Deferred tax for the year 29.7 9.8
Effect of change in income tax rates 0.7 (0.8)
Withholding tax (1.8) (1.0)
Adjustment to current tax with respect to prior years 6.2 3.6
Adjustment to deferred tax with respect to prior years (1.1) (7.6)
Total 3.1 (0.5)
Income tax benefit/(expense) differs from the amounts computed by applying the statutory Denmark
income tax rate of 22% (2021: 22%) as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Reconciliation of effective tax rate
Expected income tax benefit 60.1 17.9
Non-deductible expenses (73.5) (32.1)
Non-taxable income 4.7 2.3
Adjustment of tax with respect to prior years 5.1 (4.0)
Change in unrecognized deferred tax assets and
temporary differences (18.1) (27. 2)
Effect of change in income tax rates 0.7 (0.8)
Effect of tax rates in foreign jurisdictions (4.7) 10.9
Tax incentives 26.3 26.5
R&D tax credits 7.0 7.4
Withholding tax (1.7) (1.0)
Others, net (2.8) (0.4)
Total 3.1 (0.5)
Consolidated Financial Statements
73
Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 2.3
Consolidated Financial Statements
Notes
2.3 Income taxes (cont'd)
Breakdown of the Group’s temporary differences and changes
EURm
Tax effect of
temporary
differences at
1 Oct. 2021
Foreign
currency
translation
adjustments
Acquisitions
and Disposal
Recognized
in loss for
the year
Recognized
in other
comprehensive
income
Tax effect of
temporary
differences at
30 Sept. 2022
Other assets 17.7 0.4 - (1.8) - 16.3
Intangible assets (387.9) (8.4) (3.1) 22.7 - (376.7)
Property, plant and equipment (10.2) (1.2) - (0.7) - (12.1)
Right-of-use assets (41.1) (2.1) - 4.0 - (39.2)
Inventories 26.8 0.3 - 2.4 - 29.5
Receivables − 0.1 - (47.7) (23.1) (70.7)
Pension plans and similar commitments (3.9) 0.6 - 2.0 (2.9) (4.2)
Provisions 10.8 1.0 - (3.1) - 8.7
Other liabilities 9.0 3.3 - (8.0) - 4.3
Lease liabilities 45.9 2.2 - (4.8) - 43.3
Tax loss and credit carry-forward 35.4 1.0 - 79.3 - 115.7
Others 8.6 2.1 - (15.0) (3.0) (7. 3)
Total (288.9) (0.7) (3.1) 29.3 (29.0) (292.4)
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
2.3 Income taxes (cont'd)
Breakdown of the Group’s temporary differences and changes
EURm
Tax effect of
temporary
differences at
1 Oct. 2020
Foreign
currency
translation
adjustments
Recognized
in loss for
the year
Recognized
in other
comprehensive
income
Tax effect of
temporary
differences at
30 Sept. 2021
Other assets 17.0 − 0.7 − 17.7
Intangible assets (405.6) (0.4) 18.1 − (387.9)
Property, plant and equipment (4.0) − (6.2) − (10.2)
Right-of-use assets (51.9) (0.2) 11.0 − (41.1)
Inventories 22.7 0.1 4.0 − 26.8
Receivables 2.8 − (2.8) − −
Pension plans and similar commitments (1.8) − 0.3 (2.4) (3.9)
Provisions 11.7 0.2 (1.1) − 10.8
Other liabilities 9.6 0.3 (0.9) − 9.0
Lease liabilities 54.0 0.1 (8.2) − 45.9
Tax loss and credit carry-forward 48.3 0.2 (13.1) − 35.4
Others 9.0 0.3 (0.4) (0.3) 8.6
Total (288.2) 0.6 1.4 (2.7) (288.9)
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
2.3 Income taxes (cont'd)
The tax loss carry-forward (gross amount) of EUR 262.6 million (2021: EUR 130.0 million) includes tax losses
of EUR 2.1 million (2021: EUR 3.5 million) that can be carried forward for 2 to 30 years. The remaining tax
loss have no expiry date.
The interest carry-forward of EUR 195.0 million (2021: EUR 3.9 million) can be carried forward indefinitely.
Unrecognized deferred tax assets
Unrecognized tax assets are based on the Managements expectation about the future taxable profits
during the periods in which those temporary differences and tax loss carry forwards become deductible.
Management considers the expected reversal of deferred tax liabilities and projected future taxable
income in making this assessment. Based upon the level of historical taxable income and projections for
future taxable income over the periods in which the deferred tax assets are deductible, it is probable the
Group will realize the benefits of these deductible differences.
Deferred tax assets have not been recognized with respect to the following items (gross amounts):
§
Accounting policies
Income tax comprises current tax and changes
in deferred tax for the year, including changes as
a result of changes in tax rates. The tax expense
for the year is recognized in profit or loss except
to the extent that it relates to items recognized
directly in other comprehensive income or directly
in equity.
WS Audiology A/S is jointly taxed with all Danish
subsidiaries, Danish parent entities exercising
control over WS Audiology A/S (T&W Medical
A/S) and any Danish subsidiaries of such parent
entities. The current Danish corporation tax is
allocated between the jointly taxed companies
in proportion to their taxable income. The jointly
taxed companies are taxed under the on-account
tax scheme.
Current tax liabilities or assets are measured
using the tax rates and tax laws that have been
enacted or substantively enacted in each jurisdic-
tion by the end of the reporting period.
Deferred tax is measured using the balance sheet
liability method and comprises all temporary
differences between the carrying amount and tax
base of assets and liabilities. Deferred tax is not
recognized for taxable or deductible temporary
differences:
EURm 30 Sept. 2022 30 Sept. 2021
Capital losses carry forwards - 0.1
Tax losses carry forwards 474.9 365.2
Total unrecognized tax carry forwards 474.9 365.3
Unrecognized deferred tax liabilities
The Group has not recognized deferred tax liabilities for income taxes or foreign withholding taxes on the
cumulative earnings of subsidiaries of EUR 18.7 million (2021: EUR 14.6 million) because the earnings are
intended to be permanently reinvested in the subsidiaries.
• arising from the initial recognition of goodwill
• on the initial recognition of assets and liabilities
in a transaction that is not a business combina-
tion, and at the time of the transaction, affects
neither accounting profit nor taxable profit
• associated with investments in subsidiaries,
branches, associates and joint arrangements
to the extent that the Group is able to control
the timing of the reversal of the temporary dif-
ferences and it is probable that the temporary
differences will not reverse in the foreseeable
future.
If amortization of goodwill is deductible for tax
purposes, a deferred tax liability is recognized on
temporary differences arising after initial recogni-
tion of goodwill.
Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences
when they reverse, using tax rates enacted or
substantially enacted at the reporting date.
Deferred tax assets and tax liabilities are offset if
the entity has a legally enforceable right to offset
current tax liabilities and tax assets or intends
either to settle current tax liabilities and tax assets
or to realise the assets and settle the liabilities
simultaneously.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
The Group operates in a large number of tax
jurisdictions where tax legislation can be highly
complex and subject to interpretation. Significant
judgment and estimates are required in deter-
mining the worldwide accrual for income taxes,
deferred tax assets and liabilities and uncertain
tax positions.
Deferred tax assets are recognized to the extent
that it is probable that future taxable income will
be available against which the deductible tempo-
rary differences, unused tax losses and unused
tax credits can be utilised. This judgment is made
annually and based on budgets and business
plans, including planned commercial initiatives,
for the coming five years unless a longer period
in certain situations (e.g. for start-up businesses)
is warranted. Currently, a longer period than five
years has not been applied in any of the jurisdic-
tions in which the Group operates.
In the course of conducting business globally, tax
and transfer pricing disputes with tax authorities
may occur. Management judgment is applied to
assess the possible outcome of such disputes. The
“most probable outcome” method is used when
determining whether to recognize any amounts
related to such uncertain tax position. If it is
probable that a tax adjustment will be required,
the amount of such adjustment is measured at
the most likely amount or the expected value,
whichever method better predict the resolution of
the uncertain tax position.
2.3 Income taxes (cont'd)
Significant judgments and
accounting estimates
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
3 Operating assets and liabilities
3.1 Intangible assets
EURm Goodwill
Development
projects
Customer
relationships
Trademarks,
patents, and
similar rights
Core patented
technology and
intellectual
property Software Total
Cost at 1 October 2021 3,559.3 289.5 1,400.0 183.7 843.4 118.1 6,394.0
Foreign exchange adjustments 46.0 20.0 39.0 5.5 0.4 11.2 122.1
Additions from business combinations 18.6 − 5.1 6.6 − − 30.3
Additions − 100.2 − 0.1 − 17.7 118.0
Disposals − (0.7) (10.6) (0.4) − (1.9) (13.6)
Cost at 30 September 2022 3,623.9 409.0 1,433.5 195.5 843.8 145.1 6,650.8
Accumulated amortization and impairment at 1 October 2021 – (99.1) (344.4) (94.4) (360.3) (69.7) (967.9)
Foreign exchange adjustments − (12.8) (15.1) (2.2) (0.1) (7.6) (37.8)
Amortization − (54.3) (84.4) (8.1) (58.5) (25.2) (230.5)
Impairment (0.9) − − − − (0.3) (1.2)
Disposals − − 10.6 0.1 − 1.0 11.7
Accumulated amortization and impairment at 30 September 2022 (0.9) (166.2) (433.3) (104.6) (418.9) (101.8) (1,225.7)
Carrying amount at 30 September 2022 3,623.0 242.8 1,000.2 90.9 424.9 43.3 5,425.1
Consolidated Financial Statements
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CON Note 3 CON Note 3.1
Consolidated Financial Statements
Notes
3.1 Intangible assets (cont'd)
EURm Goodwill
Development
projects
Customer
relationships
Trademarks,
patents, and
similar rights
Core patented
technology and
intellectual
property Software Total
Cost at 1 October 2020 3,495.5 210.2 1,396.8 175.1 839.7 122.3 6,239.6
Foreign exchange adjustments 5.8 2.8 3.3 0.4 0.1 1.9 14.3
Additions from business combinations 59.3 − − 7.6 3.6 − 70.5
Additions − 81.0 − 0.6 − 17.4 99.0
Disposals (1.3) (4.5) (0.1) − − (23.5) (29.4)
Cost at 30 September 2021 3,559.3 289.5 1,400.0 183.7 843.4 118.1 6,394.0
Accumulated amortization at 1 October 2020 − (65.2) (237.6) (87.6) (309.1) (70.7) (770.2)
Foreign exchange adjustments − (1.6) (1.9) (0.2) − (1.1) (4.8)
Amortization − (36.8) (104.9) (6.6) (51.2) (21.5) (221.0)
Disposals − 4.5 − − − 23.6 28.1
Accumulated amortization at 30 September 2021 − (99.1) (344.4) (94.4) (360.3) (69.7) (967.9)
Carrying amount at 30 September 2021 3,559.3 190.4 1,055.6 89.3 483.1 48.4 5,426.1
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
3.1 Intangible assets (cont'd)
Development costs
EURm 30 Sept. 2022 30 Sept. 2021
Research and development cost incurred 162.1 142.5
Development costs capitalized as development projects (100.2) (81.0)
Depreciation of operating assets etc., used for development purposes 3.5 4.4
Amortization of capitalized development projects 54.5 36.5
Total expensed development costs 119.9 102.4
Please refer to Note 5.1 for further information about increases in goodwill related to the business combi-
nations.
Impairment losses recognized
An impairment loss of EUR 0.9 million was recognized on goodwill at 30 September 2022 (30 September
2021: Nil) due to a sale of assets in the Group’s retail outlet in the United Kingdom.
§
Accounting policies
Identification of cash generating units
Management has determined that WS Audiology
only has one operating segment in accordance
with IFRS 8, which is related to developing, pro-
ducing and selling of hearing aids, and the entire
value chain from development to sale of hearing
aids to end customer is integrated and interrelat-
ed. Management has assessed that the goodwill
acquired relates to the entire combined value
chain and monitors goodwill at group level.
Goodwill
On initial recognition, goodwill is recognized and
measured at cost. Subsequently goodwill is meas-
ured at cost less accumulated impairment losses.
Goodwill is not amortized but is tested for
impairment at least annually. For the purpose of
impairment testing, goodwill is allocated to each
of the Group’s cash generating units (CGUs) ex-
pected to benefit from synergies of the business
combination, and that represent the lowest level
at which the goodwill is monitored for internal
management purposes. The lowest level at which
the goodwill is tested for impairment is at the
level of operating segments before aggregation
according to IFRS 8 Operating Segments.
CGUs to which goodwill has been allocated are
tested for impairment annually, or more frequent-
ly when there is an indication that the CGU may be
impaired. If the recoverable amount of the CGU
is less than the carrying amount of the CGU, the
impairment loss is allocated first to reduce the
carrying amount of goodwill allocated to the CGU
and then to the other assets of the CGU on the
basis of the carrying amount of each asset in the
CGU. An impairment loss recognized for goodwill
is not reversed in a subsequent period.
Other intangible assets
Other intangible assets include development pro-
jects, acquired intellectual property, trademarks,
patents and licenses, acquired customer contracts
and relationships, and software.
Development projects that are clearly defined
and identifiable, where the technical feasibility
of completion, availability of adequate resources
to complete, existence of potential future market
can be demonstrated, and where Management
has the intent to manufacture, market or apply
the product or process in question are recognized
as intangible assets. Other development costs
are recognized as costs in the income statement
as incurred. The costs of development projects
comprise all directly attributable costs including
wages, salaries, costs to external consultants,
rent, materials and services and other costs.
Intangible assets other than goodwill are meas-
ured at cost less accumulated amortization and
impairement losses. Amortization is provided on
a straight-line basis over the expected useful lives
of the assets to their estimated residual value if
any.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
Internal development expenditure is capitalized
only if it meets the recognition criteria of IAS 38
Intangible Assets. Where regulatory and other un-
certainties are such that the criteria are not met,
the expenditure is charged to profit and loss.
Where, however, recognition criteria are met,
intangible assets are capitalized and amortized
on a straight-line basis over their useful economic
lives from product launch, of which judgment is
required.
Costs incurred on development projects are rec-
ognized as an intangible asset when the following
criteria are met:
• It is technically feasible to complete the product
so that it will be available for use;
• Management intends to complete the product
and use it;
• The product can be used;
• It can be demonstrated how the product will
generate probable future economic benefits;
• Adequate technical, financial and other re-
sources to complete development and use the
product are available;
3.1 Intangible assets (cont'd)
§
Accounting policies (cont'd)
• The expenditure attributable to the product
during its development can be reliably meas-
ured.
The Group has defined milestones for various
phases of the development of new products, from
the commencement of the project to successful
realization and subsequently product launch. The
criteria as required by IAS 38 for the recognition of
development costs, have been adapted within the
work processes of the first milestone, to ensure
that all criteria have been met for development
cost to be capitalized.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
3.2 Property, plant and equipment
EURm
Land and
buildings
and
leasehold
improvements
Plant and
machinery
Other plant,
fixtures and
operating
equipment
Assets
under
construction Total
Cost at 1 October 2021 128.1 127.0 127.6 11.4 39 4.1
Foreign exchange adjust-
ments 14.9 5.9 19.1 0.7 40.6
Additions from business
combinations 0.2 0.2 0.9 − 1.3
Additions 13.5 10.2 25.1 10.7 59.5
Disposals (10.4) (5.1) (12.8) (4.8) (33.1)
Transfers 1.7 3.7 3.0 (8.4) −
Cost at 30 September 2022 148.0 141.9 162.9 9.6 462.4
Accumulated depreciation
at 1 October 2021 (66.2) (92.6) (89.9) – (248.7)
Foreign exchange adjustments (8.9) (4.0) (15.1) − (28.0)
Depreciation (12.8) (8.4) (20.5) − (41.7)
Disposals 4.9 4.7 11.9 − 21.5
Transfers (0.2) (0.1) 0.3 − −
Accumulated depreciation
at 30 September 2022 (83.2) (100.4) (113.3) − (296.9)
Carrying amount at
30 September 2022 64.8 41.5 49.6 9.6 165.5
EURm
Land and
buildings
and
leasehold
improvements
Plant and
machinery
Other plant,
fixtures and
operating
equipment
Assets
under
construction Total
Cost at 1 October 2020 127.5 116.0 114.4 9.3 367.2
Foreign exchange adjust-
ments 2.2 1.7 2.5 0.2 6.6
Additions from business
combinations 0.3 0.1 0.2 − 0.6
Additions 6.6 9.5 15.3 10.3 41.7
Disposals (8.3) (2.9) (6.8) (0.9) (18.9)
Transfers (0.2) 2.6 2.0 (7.5) (3.1)
Cost at 30 September 2021 128.1 127.0 127.6 11.4 394.1
Accumulated depreciation
at 1 October 2020 (60.0) (83.4) (77.8) – (221.2)
Foreign exchange adjustments (1.0) (1.0) (2.0) − (4.0)
Depreciation (11.1) (11.6) (16.8) − (39.5)
Disposals 5.3 2.4 5.2 − 12.9
Transfers 0.6 1.0 1.5 − 3.1
Accumulated depreciation
at 30 September 2021 (66.2) (92.6) (89.9) − (248.7)
Carrying amount at
30 September 2021 61.9 34.4 37.7 11.4 145.4
The Group has contractual commitments for purchases of property, plant and equipment amounting to
EUR 12.4 million (2021: EUR 6.7 million) as of 30 September 2022.
Consolidated Financial Statements
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CON Note 3.2
Consolidated Financial Statements
Notes
3.3 Depreciation, amortization, and impairment
EURm 30 Sept. 2022 30 Sept. 2021
Depreciation and impairment of property, plant, equipment, right-of-use
assets recognized in the income statement as follows:
Cost of goods sold 22.6 22.7
Research and development costs 3.5 3.6
Selling, general and administrative expenses 64.9 57.5
Total 91.0 83.8
Amortization and impairment of intangible assets recognized in the
income statement as follows:
Cost of goods sold 45.8 46.2
Research and development costs 54.5 37.3
Selling, general and administrative expenses 131.4 137.5
Total 231.7 221.0
3.2 Property, plant and equipment (cont'd)
§
Accounting policies
Property, plant and equipment are measured at cost less accumulated depreciation and impairment loss-
es. Cost comprises the purchase price and costs directly attributable to bringing the asset to its location
and condition necessary for its intended use. In addition, the initial estimate of the costs related to dis-
mantling and removing the asset and restoring the site on which the asset is located are added to the cost,
if relevant. Where individual components of an item of property, plant and equipment, that is material,
have different useful lives, they are accounted for as separate items, and depreciated separately.
§
Accounting policies
Depreciation
Depreciation is recognized on a straight-line basis
over the expected useful lives of property, plant
and equipment, taking into account the expected
residual value after the end of the useful life.
Depreciation is recognized in the income state-
ment as production costs, development costs,
distribution costs, and administrative expenses.
Impairment
Goodwill and intangible assets not yet available
for use, e.g. development projects in progress, are
not subject to amortization, but are tested for im-
pairment at least annually, irrespective of whether
there is any indication that they may be impaired.
Other intangible assets, which are subject to
amortization, and property, plant and equipment
are reviewed for impairment whenever events or
changes in circumstances indicate that the carry-
ing amount may not be recoverable. If assets do
not generate cash flows that are largely independ-
ent of those from other assets or groups of assets,
the impairment test is performed at the level of
the CGU to which the asset belong.
Recoverability of assets is measured by comparing
the carrying amount of the asset or CGU with the
recoverable amount, which is the higher of the
asset’s or CGU’s value in use and its fair value less
costs to sell.
If the carrying amount of an asset, or of the CGU
to which the asset belong, is higher than its recov-
erable amount, the carrying amount is reduced to
the recoverable amount, and an impairment loss
is recognized in the income statement.
Impairment of intangible assets, other than
goodwill, and impairment of property, plant and
equipment is reversed only to the extent of chang-
es in the assumptions and estimates underlying
the impairment calculation. Impairment is only
reversed to the extent that the asset’s new carry-
ing amount does not exceed the carrying amount
of the asset after amortization had the asset not
been impaired.
Significant judgments and
accounting estimates
Impairment test – Goodwill
The recoverable amount of the CGU was tested
on the basis of fair value less costs to sell. The fair
value less cost to sell was determined mainly by
computing the Enterprise Value (“EV”).
The EV was estimated as of 30 September 2022
by taking the market capitalization of a compa-
rable peer group, adjusted for the most updated
balance sheet numbers of interest-bearing debt
and other liabilities with the carrying amounts.
The estimated EV was then compared with the
respective consensus EBITDA to derive multiple,
Consolidated Financial Statements
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CON Note 3.3
Consolidated Financial Statements
Notes
Determination of the useful life of intangible
assets
Management applies judgments in determination
of the useful lives of intangible assets.
For patents, licenses, acquired intellectual prop-
erty and other intangible assets arising from
contractual or other legal rights, the useful life
is the shorter of the period of the contractual or
legal rights and the economic useful life.
For acquired customer relationships, the useful
life is based on normal attrition/churn rates within
the hearing aid business in the market in ques-
tion, with a maximum of 10 years, except in excep-
tional situations, where a longer useful life can be
justified. The useful life for customer contracts is
based on the contractual term including expected
extensions of the term.
The estimated useful lives are as follows:
Completed development projects 3 years
Patents and rights 3 - 10 years
Customer relationships acquired 2 - 10 years
Customer contracts 15 - 20 years
Trademarks 20 years
Acquired intellectual property 8 - 12 years
Software 10 years
taking into account an illiquidity discount and
control premium.
The Group applied the EV/EBITDA multiple to the
adjusted consensus EBITDA of WS Audiology; the
carrying amount of the CGU was determined to
be lower than its recoverable amount and the
Group has therefore no impairment loss to be
recognized.
Key assumptions used in the determination of the
fair value less costs to sell are consensus EBITDA
for the comparable companies as well as for WS
Audiology, where adjustments for one-time cost
as described in the management commentary
were factored in. Furthermore, in using the mar-
ket-based EV/EBITDA multiple models, the Group
has applied relevant illiquidity discounts and con-
trol premiums to reflect the ownership structure
of WS Audiology. The adjusted consensus EBITDA
is based on Management’s best estimates and
most recent financial budgets for the coming year
as approved by the Board of Directors. All the
above inputs are level 3 input factors according to
the fair value hierarchy.
Management has not identified any reasonably
possible changes in the above key assumptions
that could cause the carrying amount to exceed
the recoverable amount.
The estimated useful life and amortization
method are reviewed at the end of each reporting
period, with the effect of any changes in estimate
being accounted for on a prospective basis.
Determination of the useful life of property,
plant and equipment
The estimated useful lives are as follows:
Factory and office buildings 20 - 50 years
Technical machinery & equipment 4 - 10 years
Other fixtures and fittings,
tools and equipment, furniture etc 3 - 5 years
Land is not depreciated.
Estimated useful lives and residual values are
reassessed annually. If the residual value exceeds
the carrying amount, depreciation is discontin-
ued. When changing the expected useful lives or
the expected residual value, the effect on the de-
preciation is recognized prospectively as a change
in accounting estimates.
3.3 Depreciation, amortization, and impairment (cont'd)
Significant judgments and
accounting estimates (cont'd)
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
3.4 Right-of-use assets/Lease liabilities
Right-of-use assets:
EURm
Buildings and
retail shops
Vehicle
fleet
Other plant,
fixtures and
operating
equipment Total
Cost at 1 October 2021 275.1 9.1 1.2 285.4
Foreign currency translation
adjustments 18.3 − − 18.3
Additions during the year 28.7 2.6 0.8 32.1
Disposals (14.9) (1.9) (0.1) (16.9)
Cost at 30 September 2022 307.2 9.8 1.9 318.9
Accumulated depreciation and
impairment at 1 October 2021 (74.7) (4.5) (0.4) (79.6)
Foreign currency translation
adjustments (7.2) − − (7.2)
Depreciation (45.9) (2.8) (0.3) (49.0)
Disposals 12.0 2.3 0.1 14.4
Impairment (0.3) − − (0.3)
Reversal of impairment 1.1 − − 1.1
Accumulated depreciation and
impairment at 30 September 2022 (115.0) (5.0) (0.6) (120.6)
Carrying amount at 30 September 2022 192.2 4.8 1.3 198.3
EURm
Buildings and
retail shops
Vehicle
fleet
Other plant,
fixtures and
operating
equipment Total
Cost at 1 October 2020 268.5 7.3 1.2 277.0
Foreign currency translation
adjustments 2.1 − − 2.1
Additions during the year 25.1 2.7 − 27.8
Disposals (18.0) (0.9) − (18.9)
Transfers (2.6) − − (2.6)
Cost at 30 September 2021 275.1 9.1 1.2 285.4
Accumulated depreciation and
impairment at 1 October 2020 (42.6) (2.6) (0.2) (45.4)
Foreign currency translation
adjustments (0.7) 0.1 − (0.6)
Transfers 2.6 − − 2.6
Depreciation (41.2) (2.9) (0.2) (44.3)
Disposals 6.8 0.9 − 7.7
Reversal of impairment 0.4 − − 0.4
Accumulated depreciation and
impairment at 30 September 2021 (74.7) (4.5) (0.4) (79.6)
Carrying amount at 30 September 2021 200.4 4.6 0.8 205.8
Consolidated Financial Statements
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CON Note 3.4
Consolidated Financial Statements
Notes
Lease payments include the following:
• Fixed payment (including in-substance fixed
payments), less any lease incentives receivables;
• Variable lease payment that are based on an
index or rate, initially measured using the index
or rate at the commencement date;
• Amount expected to be payable under residual
value guarantees;
• The exercise price of a purchase option if it is
reasonably certain to exercise the option; and
• Payment of penalties for terminating the lease,
if the lease term reflects the Group exercising
that option.
For contracts that contain both lease and non-
lease components, the Group allocates the
consideration to each lease component on the
basis of the relative stand-alone price of the lease
and non-lease component. The Group has elected
to not separate lease and non-lease component
for property leases and account for these as one
single lease component.
Lease liability is measured at amortized cost using
the effective interest method. Lease liability is
remeasured when:
• There is a change in future lease payments
arising from changes in an index or rate;
• There is a change in the Group’s assessment of
whether it will exercise an extension option; or
• There is a modification in the scope or the con-
sideration of the lease that was not part of the
original term.
§
Accounting policies
When the Group is the lessee:
At the inception of the contract, the Group as-
sesses if the contract contains a lease. A contract
contains a lease if the contract conveys the right
to control the use of an identified asset for a
period of time in exchange for consideration. Re-
assessment is only required when the terms and
conditions of the contract are changed.
Right-of-use assets
The Group recognized a right-of-use asset and
lease liability at the date which the underlying
asset is available for use. Right-of-use assets
are measured at cost which comprises the initial
measurement of lease liabilities adjusted for any
lease payments made at or before the commence-
ment date and lease incentive received. Any initial
Lease liability is remeasured with a corresponding
adjustment to the right-of-use asset, or is record-
ed in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
Short term and low value leases
The Group has elected to not recognize right-of-
use assets and lease liabilities for short-term leas-
es that have lease terms of 12 months or less and
low value leases, except for leased asset subject to
sublease arrangements. Lease payments relating
to these leases are expensed to profit or loss on a
straight-line basis over the lease term.
Significant judgments and
accounting estimates
The lessee's incremental borrowing rate is the
rate of interest that a lessee would have to pay
to borrow over a similar term and with a similar
security, the funds necessary to obtain an asset of
a similar value to the right-of-use asset in a similar
economic environment. That is, the rate specific
to:
• The lessee – i.e. it is a company specific rate that
reflects the credit worthiness of the company
• The term of the arrangement
• The amount of the funds “borrowed”
• The “security”- i.e. the nature and quality of the
underlying asset; and
• The economic environment, encompassing the
jurisdiction, the currency and the date at which
the lease entered into.
3.4 Right-of-use assets/Lease liabilities (cont'd)
Other disclosures relating to right-of-use assets/lease liabilities are as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Interest expense on lease liabilities (9.7) (10.0)
Lease expense not capitalized in lease liabilities:
Lease expense – short-term leases and low value assets (5.8) (6.7)
Variables lease payment which do not depends on an index or rate (0.3) -
Total cash outflow for all leases (56.5) (51.4)
The maturity analysis of the lease liabilities is included in Note 4.2 Financial risks and financial instru-
ments/liquidity risk.
direct costs that would not have been incurred if
the lease had not been obtained are added to the
carrying amount of the right-of-use assets.
These right-of-use assets are subsequently de-
preciated using the straight-line method from the
commencement date to the earlier of the end of
the useful life of the right-of-use assets or the end
of the lease term.
Lease liabilities
The initial measurement of lease liability is meas-
ured at the present value of the lease payments
discounted using the implicit rate in the lease if
the rate can be readily determined. If that rate
cannot be readily determined, the incremental
borrowing rate is used.
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
3.5 Customer loans
Customer loans are as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Non-current 50.2 54.0
Current 19.6 17.2
Total 69.8 71.2
The below table shows the carrying amount of customer loans by categories representing Management’s
credit risk assessment (credit risk rating grades) and gross carrying amounts.
Group internal credit rating
Expected
credit loss
(ECL) rate
Basis for recognition of
expected credit loss
Gross
carrying
amount
(EURm)
30 September 2022:
Performing 1% 12-month expected credit loss (Low risk) 51.8
Performing 6% 12-month expected credit loss (Medium risk) 10.5
Underperforming 47% Lifetime expected credit losses (High risk) 10.9
Credit impaired 86% Assets derecognized through
the income statement (In default)
18.7
Total customer loans at 30 September 2022 91.9
30 September 2021:
Performing 4% 12-month expected credit loss (Low risk) 50.0
Performing 5% 12-month expected credit loss (Medium risk) 12.8
Underperforming 43% Lifetime expected credit losses (High risk) 14.3
Credit impaired 84% Assets derecognized through
the income statement (In default)
18.6
Total customer loans at 30 September 2021 95.7
The 12-month and lifetime expected credit losses (ECL) have developed as follows:
EURm
Performing
(12-month
ECL- Low
risk)
Performing
(12-month
ECL –
Medium
risk)
Under-
performing
(Lifetime
ECL)
Credit
impaired
(Lifetime
ECL) Total
Opening loss allowance at
1 October 2021 1.9 0.7 6.2 15.7 24.5
Foreign currency translation
differences (1.7) – 1.2 3.9 3.4
Net impairment loss/(reversal)
for the year 0.1 (0.2) (2.3) (3.4) (5.8)
Closing loss allowance at
30 September 2022
(calculated under IFRS 9) 0.3 0.5 5.1 16.2 22.1
Opening loss allowance at
1 October 2020 8.2 − 11.0 13.6 32.8
Write-off for the year − − − (4.2) (4.2)
Foreign currency translation
differences − − 0.3 0.6 0.9
Net impairment loss/(reversal)
for the year (6.3) 0.7 (5.1) 5.7 (5.0)
Closing loss allowance at
30 September 2021
(calculated under IFRS 9) 1.9 0.7 6.2 15.7 24.5
Consolidated Financial Statements
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CON Note 3.5
Consolidated Financial Statements
Notes
3.5 Customer loans (cont'd)
The following significant changes in gross
carrying amount of customer loans contributed to
changes in the loss allowance:
• New customer loans of EUR 13.5 million (2021:
EUR 10.3 million) were issued in the year ended
30 September 2022;
• Customer loans with a gross carrying amount of
EUR 0.5 million (2021: EUR 0.5 million) went from
performing to underperforming during the year
ended 30 September 2022;
• Customer loans with a gross carrying amount
of EUR 23.9 million (2021: EUR 2.0 million) were
repaid in the year ended 30 September 2022.
Management has put a special focus on situa-
tions where the COVID-19 situation has rendered
additional financial pressure on already low
performing customers which is reflected in
the evaluation of credit risks and the basis of
expected credit losses applied. As such, adjust-
ments to the loan allowances were made where
deemed necessary, including instances where
enforcement activities are still undergoing, which
is evaluated on a case-by-case basis.
Significant judgments and
accounting estimates
§
Accounting policies
Customer loans are initially recognized at fair value
less transaction costs and subsequently measured
at amortized cost less loss allowance or impairment
losses. Any difference between the nominal value
and the fair value of the loans at initial recognition
For customer loans performing in all material
respect, and for which no other indications of
increase in credit risk exist, the expected credit
loss on the customer loan and related prepaid
discount is measured at 12-month expected credit
loss. For customer loans that are underperforming
compared to the repayment plan agreed when the
loans were issued, or for which there are other indi-
cations of increase in credit risk, the expected credit
loss is measured at lifetime expected credit loss.
Loss rates are based on actual credit loss expe-
rience over the past years, and considered any
forward-looking elements such as new signif-
icant developments, such as COVID-19. These
rates are multiplied by factors to reflect possible
differences between economic conditions during
the period over which the historic data has been
collected, current conditions and the Group’s view
of economic conditions over the expected lives of
the receivables.
The calculation of 12-month expected credit
losses on performing customer loans are based
on a weighted average of historical annual losses
on customers. Payment plans are agreed with
customers when issuing loans to them. The credit
risk of loans to customers is considered to have in-
creased significantly since initial recognition when
the loan is no longer assessed to be performing
under the Group’s risk assessment model. Based
on the above, the customer loans and related pre-
paid discount are categorised as either perform-
ing, non-performing or credit impaired.
The Group grants sales related financing in the
form of loans to some of its customers. These
customer loan arrangements are complex, cover
several aspects of the customer relationship and
may vary from agreement to agreement. Man-
agement has determined that off-market terms,
is treated as a prepaid discount on future sales
to the customer, and is recognized in the income
statement as a reduction of revenue as and when
the customer purchases goods from the Group.
The fair value of customer loans at initial recog-
nition is measured at the present value of future
repayments of the loan discounted at a market
interest rate corresponding to the money market
rate based on the expected maturity of the loan
with the addition of a risk premium. The effective
interest on customer loans is recognized as inter-
est income in the income statement over the term
of the loans.
A loss allowance is recognized at initial recognition
and subsequently based on 12-months expected
credit losses, unless a significant increase has
arisen since the initial recognition of the loan, in
which case the loss allowance is based on lifetime
expected credit losses.
Customer loans are written off when all possible
options have been exhausted and there is no
reasonable expectation of recovery.
if any, represent a prepayment of discounts on
future sales to the customer.
Significant accounting estimates are involved in
determination of the expected maturity of the
loans, as repayments may to some extent be
aligned with the customers purchases of goods,
and also in determining a market-based dis-
count rate for each customer loan. Management
estimates are based on current market condition
at the time of issuing the loan as well as historical
sales information and e.g. market penetration
rates for loans to customers without substantial
history with the Group.
The Group’s assessment of credit risk associat-
ed with customer loans and prepaid discounts
primarily involves consideration of the economic
environment in which the customer operates,
historic loss rates for customer loans, and the
actual repayments on the loans compared to
the repayment plan agreed when the loans were
issued, along with any new significant develop-
ments across the macroeconomic landscape, such
as COVID-19. This assessment is performed using
a scoring matrix that covers 3 broad categories
namely customer type, payment and performance
and risk and bankruptcy. Based on the credit score
assessed, the risk category of the customer will be
determined to be one of the following:
• Low risk (performing)
• Medium risk (performing)
• High risk (underperforming)
• In default
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
3.6 Other assets
Other non-current assets are as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Prepaid assets 0.6 0.9
Asset for deferred compensation plan 9.7 3.4
Derivative financial instruments 93.4 −
Deposits 8.7 6.4
Others 10.0 6.9
Total 122.4 17.6
Other current assets are as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Prepaid assets 21.6 18.6
Loans receivables from third parties 0.1 0.7
Derivative financial instruments 7.4 1.5
Miscellaneous tax receivables 27.8 31.6
Deposits 11.9 17. 3
Others 8.8 12.3
Total 77.6 82.0
§
Accounting policies
Other assets are recognized initially at fair value less directly attributable transactions costs. Subsequent-
ly, they are measured at amortized cost using the effective interest method less impairment. A loss al-
lowance is recognized at initial recognition and subsequently based on 12-months expected credit losses,
unless a significant increase has arisen since the initial recognition of the loans and receivables, in which
case the loss allowance is based on lifetime expected credit losses.
3.7 Inventories
EURm 30 Sept. 2022 30 Sept. 2021
Raw materials and purchased components 91.4 69.8
Work in progress 20.4 20.5
Right of return 14.4 12.6
Finished goods and goods for resale 71.9 65.5
Total 198.1 168.4
Write-downs, provisions for obsolescence etc. included in the above (42.8) (38.2)
Included in the income statement under production costs:
EURm 30 Sept. 2022 30 Sept. 2021
Write-downs of inventories for the year (5.7) (7.6)
Cost of goods sold during the year (766.9) (789.7)
Total (772.6) (797. 3)
§
Accounting policies
Inventories are measured at the lower of cost and net realisable value, cost being generally determined
on the basis of a weighted average method. Cost comprise raw materials, consumables, direct labour and
indirect production overheads. Indirect production overheads comprise indirect supplies, wages, and sal-
aries, amortization of brands and software, as well as maintenance and depreciation of machinery, plant
and equipment used for production.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses.
Consolidated Financial Statements
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CON Note 3.6 CON Note 3.7
Consolidated Financial Statements
Notes
3.8 Trade receivables
EURm
Current
not due
1-30 days
past due
31-60 days
past due
61-90 days
past due
91-180 days
past due
More than 181
days past due Total
30 September 2022
Gross carrying amount – Trade receivables 270.2 27. 3 12.6 10.7 16.5 30.0 367. 3
Sales rebates (32.8) − − − − − (32.8)
Specific loss allowance at 30 September 2022
(expected credit loss model) (4.9) (0.4) (0.6) (0.5) (1.6) (18.6) (26.6)
General loss allowance at 30 September 2022
(expected credit loss model) (1.2) (0.2) (0.1) (0.1) (0.5) (0.3) (2.4)
Trade receivables at 30 September 2022 231.3 26.7 11.9 10.1 14.4 11.1 305.5
Expected loss rate -0.4% -0.7% -0.8% -0.9% -3.0% -1.0% -0.7%
30 September 2021
Gross carrying amount – Trade receivables 245.8 25.5 14.0 7.5 14.9 38.8 346.5
Sales rebates (30.8) − − − − − (30.8)
Specific loss allowance at 30 September 2021
(expected credit loss model) (2.9) (0.6) (0.5) (0.5) (3.2) (16.9) (24.6)
General loss allowance at 30 September 2021
(expected credit loss model) (1.0) (0.2) (0.2) (0.2) (0.3) (1.0) (2.9)
Trade receivables at 30 September 2021 211.1 24.7 13.3 6.8 11.4 20.9 288.2
Expected loss rate -0.4% -0.8% -1.4% -2.7% -2.0% -2.2% -0.8%
Consolidated Financial Statements
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CON Note 3.8
Consolidated Financial Statements
Notes
The below table shows the movement in lifetime expected credit losses that has been recognized for trade
receivables and contract assets in accordance with the simplified approach set out in IFRS 9.
EURm
Collectively
assessed
Individually
assessed
(credit impaired) Total
Opening loss allowance at 1 October 2021 (2.9) (24.6) (27.5)
Net remeasurement of loss allowance (0.7) (1.2) (1.9)
Amounts written off 0.9 0.4 1.3
Other changes 0.3 (1.2) (0.9)
Closing loss allowance at 30 September 2022 (2.4) (26.6) (29.0)
Opening loss allowance at 1 October 2020 (4.2) (24.8) (29.0)
Net remeasurement of loss allowance 2.1 0.5 2.6
Amounts written off 0.1 − 0.1
Other changes (0.9) (0.3) (1.2)
Closing loss allowance at 30 September 2021 (2.9) (24.6) (27.5)
Receivables acquired in business combinations are recognized in the consolidated financial statements at
fair value at the date of acquisition, which in most cases equals the carrying amounts net of loss allow-
ance. Expected credit losses related to receivables acquired in business combinations are therefore only
included in the above to the extent that the loss allowance for the receivables has increased compared to
the acquisition date.
§
Accounting policies
Trade receivables and contract assets are meas-
ured at amortized cost less allowance for lifetime
expected credit losses.
To measure the expected credit losses, trade re-
ceivables and contract assets have been grouped
based on shared credit risk characteristics and the
days past due. For trade receivables and contract
assets that are considered credit impaired, the
expected credit loss is determined individually.
Loss allowance is calculated using a provision
matrix that incorporates an ageing factor, geo-
graphical risk and specific customer knowledge.
The provision matrix is based on historical credit
losses incurred within relevant time bands of days
past due adjusted for a forward-looking element.
Trade receivables and contract assets are written
off when all possible options have been exhaust-
ed and there is no reasonable expectation of
recovery.
3.8 Trade receivables (cont'd)
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
3.9 Other liabilities
Other non-current liabilities are as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Derivative financial instruments 6.9 53.0
Deferred revenue 27.1 23.8
Employee related liabilities 4.0 4.3
Liability under MPP scheme 49.4 41.8
Others 5.4 5.8
Total 92.8 128.7
Other current liabilities are as follows:
EURm 30 Sept. 2022 30 Sept. 2021
Bonuses and discounts to customers 12.1 11.4
Customers with net credit balances 11.5 5.1
Customer prepayment 13.9 9.4
Deferred revenue 14.2 11.4
Derivative financial instruments 3.4 1.2
Employee related liabilities 76.0 75.6
Payroll and social security taxes 48.8 46.1
Sales tax and other tax liabilities 16.7 27.6
Earnout provision 6.9 20.9
Others 27.9 21.4
Total 231.4 2 30.1
Earnout provision from business combinations
relates to components of the purchase price for
which the payments depend on the achievement
of defined performance measures. For additional
information related to business combinations in
the period, refer to Note 5.1.
§
Accounting policies
Financial liabilities are measured initially at fair
value less transaction costs and subsequently at
amortized cost using the effective interest rate
method.
The Group bifurcates embedded derivatives
at initial recognition when they are not closely
related to the respective host contract. Bifurcated
derivatives are measured at fair value through
profit or loss.
Liability under MPP scheme is measured at fair
value, with reference to Note 5.3.
Other liabilities are measured at amortized cost.
Consolidated Financial Statements
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CON Note 3.9
Consolidated Financial Statements
Notes
3.10 Provisions
EURm Warranties
Right of
return
Asset
Retirement
Obligation Others Total
Provision at 1 October 2021 50.0 23.8 5.3 10.6 89.7
Foreign exchange adjustments 6.4 2.9 0.1 (0.1) 9.3
Additions 24.3 4.3 0.3 8.2 37.1
Usages (23.4) (0.1) − (2.2) (25.7)
Reversals (3.0) (0.2) (0.3) (0.1) (3.6)
Accretion and effect of changes in
discount rates (1.3) − 0.3 − (1.0)
Provision at 30 September 2022 53.0 30.7 5.7 16.4 105.8
Which is presented in the consolidated
balance sheet as
Non-current liabilities 21.9 0.1 5.7 0.3 28.0
Current liabilities 31.1 30.6 − 16.1 77.8
Provision at 30 September 2022 53.0 30.7 5.7 16.4 105.8
EURm Warranties
Right of
return
Asset
Retirement
Obligation Others Total
Provision at 1 October 2020 46.3 26.4 4.8 4.9 82.4
Foreign exchange adjustments 1.1 0.4 0.1 (0.1) 1.5
Additions 15.6 0.5 0.5 5.8 22.4
Usages (11.8) (3.5) − − (15.3)
Reversals (1.1) − − − (1.1)
Reclassifications − − (0.2) − (0.2)
Accretion and effect of changes in
discount rates (0.1) − 0.1 − −
Provision at 30 September 2021 50.0 23.8 5.3 10.6 89.7
Which is presented in the consolidated
balance sheet as
Non-current liabilities 23.6 0.1 5.2 0.7 29.6
Current liabilities 26.4 23.7 0.1 9.9 60.1
Provision at 30 September 2021 50.0 23.8 5.3 10.6 89.7
Consolidated Financial Statements
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CON Note 3.10
Consolidated Financial Statements
Notes
The Group’s provisions are generally expected to
result in cash outflow during the next one to ten
years.
Right of return relates to products sold for which
customers have the right to return the products
at their own discretion within a specified period.
Based on historical data, return rates are calcu-
lated and provisions are recorded to cover the
expected cost.
The warranty provision represents Management’s
best estimate of the Group’s liability under assur-
ance type warranties granted on hearing aids
sold. The warranty period of regular assurance
type warranties differ depending on jurisdiction
and range between 1 and 3 years.
Asset retirement obligation relates to the Group’s
obligations to restore rented premises to the
certain standards upon the expiry of the lease
contracts including removal of leasehold improve-
ments and other assets from the premises.
§
Accounting policies
A provision is recognized in the statement of
financial position when the Group has a present
legal or constructive obligation as a result of a
past event, and it is probable that an outflow of
economic benefits will be required to settle the
obligation and a reliable estimate can be made of
the amount of the obligation.
If the effect is material, provisions are measured
at present value by discounting the expected
future cash flows expected to settle the liability at
a pre-tax rate that reflects current market assess-
ment of the time value of money.
3.10 Provisions (cont'd)
Significant judgments and
accounting estimates
Significant estimates are involved in the deter-
mination of provisions related to warranty costs,
right of return, legal proceedings. Due to the
technological features of the Group’s products,
the Group incurs a substantial amount of warran-
ty costs and the determination of future warranty
costs related to products sold is based on historic
results as well as estimated product defects.
In some jurisdictions, the Group sells extended
warranties to customers and/or provide other
service-type warranties in addition to regular
(assurance-type) warranties. Such warranties are
treated as separate performance obligations in
the contracts with the customers and are recog-
nized as contract liabilities and not provisions.
In determining whether a warranty is an assur-
ance type warranty or a service type warranty,
Management considers factors such as whether
the warranty is required by law, the length of the
warranty coverage period and the nature of the
tasks that the entity promises to perform in case
of product defects. Generally, warranties covering
periods after 3 years from the sale of the hearing
aid are considered to be service-type warranties
and treated as separate performance obligations.
The Group is from time to time subject to legal dis-
putes and regulatory proceedings in several juris-
dictions. Such proceedings may result in criminal
or civil sanctions, penalties, damage claims and
other claims against the Group. Regulatory and
legal proceedings as well as government investi-
gations often involve complex legal issues and are
subject to substantial uncertainties. Accordingly,
Management exercises considerable judgment in
determining whether there is a present obligation
as a result of a past event, whether it is more likely
than not that an outflow of economic resources
will be required and the estimated amount of
such outflow. Management considers the input of
external counsels on each case, as well as known
outcomes in case law. Although, Management be-
lieves that the total provisions for legal proceed-
ings are adequate based on currently available
information, there can be no assurance that there
will not be any changes in facts or circumstances,
or that any future lawsuits, claims, proceedings or
investigations will not be material.
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
4 Capital structure and financing items
4.1 Outstanding shares
Outstanding
shares (mil)
Total number
of shares (mil)
Nominal value
of outstanding
shares EURm
Number/value of shares at 30 September 2022 and
30 September 2021 100.0 100.0 100.0
All shares are fully issued and paid up. The share capital was nominally EUR 100,000,100 divided into a
corresponding number of 100,000,100 (2021: EUR 100,000,100 divided into a corresponding number of
100,000,100). There are no restrictions on the negotiability or voting rights of the shares.
Capital structure
The Group’s ambition is to maintain access to a strong capital base and with a high degree of investor,
creditor and market confidence to support the strategic development of the Group. To support this ambi-
tion, the Group has obtained a credit rating from the three rating agencies Moody’s, Standard & Poor and
Fitch Ratings.
The capital structure of the Group consists of net debt (short-term and long-term borrowings disclosed in
Note 4.2 after deducting cash and cash equivalents) and equity of the Group (comprising issued capital,
reserves, retained earnings and non-controlling interests).
The Group raised debt in 2019 to finance the establishment of the Group through the merger of Sivantos
and Widex. In June 2020, the Group raised an additional Sidecar loan of EUR 100.0 million with a backup
guarantee from the Danish Export Credit Foundation (EKF) as contingency working capital in the face of
COVID-19. This sidecar loan was repaid in December 2021 with an add on of EUR 100.0 million to Facility B1.
The Group's debt is shown in table below:
Debt Interest rate Hedge interest
FY 2022
Facility B1 EUR 2,062.5 million Euribor + 4.0% Partly till FY 2024
Facility B2 USD 1,192.0 million USD Libor + 3.75% Partly till FY 2024
2nd Lien Loan EUR 525.0 million Euribor + 6.75% Partly till FY 2024
Revolving Facility EUR 100.0 million Euribor + 2.75% No
FY 2021
1
Sidecar Loan 100.0 million Euribor + 4.5% No
Facility B1 EUR 1,962.5 million Euribor + 4.0% Partly till FY 2022
Facility B2 USD 1,204.3 million USD Libor + 3.75% Partly till FY 2023
2nd Lien Loan EUR 525.0 million Euribor + 6.75% No
Revolving Facility EUR 90.5 million Euribor + 2.75% No
1 The Group hedged interest in FY 2021 but did not adopt hedge accounting.
If Euribor or Libor is less than zero, the rate shall be deemed as zero.
The Senior Secured Term Loans are secured by a pledge of the shares of major subsidiaries as well as
pledge of assets of major subsidiaries and are subject to a loan covenant. The Group has complied with to
the loan covenants of the Senior Facilities Agreement.
Interest rate benchmark transition for non-derivative financial instruments.
The Group is currently in negotiations with its lenders to reprice its loans from IBOR equivalent rates to
SOFR, which would only take into effect in 2023. The Group does not foresee any material changes from the
change in interest rate benchmark.
Consolidated Financial Statements
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CON Note 4 CON Note 4.1
Consolidated Financial Statements
Notes
§
Accounting policies
Proposed dividend is recognized as a liability at
the date when it is adopted at the Annual General
Meeting (declaration date). The dividend recom-
mended by the Board of Directors, and therefore
expected to be paid for the year, is disclosed in the
notes.
over a certain amount. The Group does not require
collateral in respect of financial assets. However,
the Group has credit enhancements such as
personal guarantees and share pledges related
to customer loan. Assessment of the credit risk
related to customers is further described in Note
3.5 Customer loans and Note 3.8 Trade receivables.
There were no significant concentrations of credit
risk at 30 September 2022 and 30 September 2021.
The maximum exposure to credit risk of financial
assets is represented by their carrying amount.
Concerning trade receivables and other receiv-
ables, as well as loans or receivables included in
line item ‘Other financial assets’ that are neither
impaired nor past due, there were no indications
as of 30 September 2022 (30 September 2021: Nil),
that defaults in payment obligations will occur.
Liquidity risk
Liquidity risk results from the Group’s potential
inability to meet its financial liabilities, in particular
paying suppliers and servicing interest-bearing
debt.
The Group finances itself from its operating cash
flow and through access to EUR 260 million of
committed Revolving Credit provided by a group of
banks – of which EUR 93.5 million has been carved
out as ancillary facilities.
The Group had cash and cash equivalents of EUR
123.7 million as of 30 September 2022 (30 September
2021: EUR 144.5 million). In addition, the Group has
4.2 Financial risks and financial instruments
Financial risk management
The Group is exposed to several financial risks
arising from its operating, investing and financial
activities, including foreign exchange risk, interest
rate risk, liquidity risk and credit risk.
Liquidity risk, foreign exchange risk and interest
rate risk are managed by Group Treasury while
customer credit risk is managed by the individual
business units and affiliates. The Group uses finan-
cial instruments only to mitigate financial risks. The
objective, policies and processes for managing the
risk exposure to these items are further explained
in the following sections.
Credit risk
Credit risk is defined as an unexpected loss in
cash and earnings if the customer is unable to
pay its obligations in due time. The Group may
incur losses if the credit quality of its customers
deteriorates or if they default on their payment
obligations to the Group. The Group’s exposure
to credit risk arises primarily from trade and other
receivables including loans to customers.
The Group has a credit policy in place and the
exposure to credit risk is monitored on an ongoing
basis. This includes the review of individual receiv-
ables and of individual customer creditworthiness
on a case-by-case basis as well as the review of
current economic trends, the analysis of historical
bad debts on a portfolio basis, and the consider-
ation of country credit ratings. Credit evaluations
are performed on all customers requiring credit
access to EUR 105.8 million (30 September 2021: EUR
157.2 million) available Revolving Credit Facility as of
30 September 2022. With its strong operating cash
flow, the Group expects to be able to meet all of its
present and future obligations arising from opera-
tional cash needs.
In addition to having implemented effective
working capital and cash management, the Group
has implemented short-term and medium term-li-
quidity forecasts. Group Treasury monitors the
level of expected cash inflows on trade and other
receivables together with expected cash outflows
on trade and other payables.
The Group maintains an in-house banking and cash
pool setup. A significant part of cash balances from
affiliates is pooled centrally with Group Treasury to
secure an effective liquidity management and use
of funds within the Group.
The following table reflects all contractually fixed
payoffs for settlement, repayments and interest
resulting from recognized financial liabilities. It
includes expected net cash outflows from deriv-
ative financial liabilities that were in place at 30
September 2022 and 30 September 2021. Such
expected net cash outflows are undiscounted net
cash outflows for the respective upcoming fiscal
years, based on the earliest date on which the Group
could be required to pay. Cash outflows for financial
liabilities (including interest) without fixed amount
or timing are based on the conditions existing at 30
September 2022 and 30 September 2021.
4.1 Outstanding shares (cont'd)
Consolidated Financial Statements
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CON Note 4.2
Consolidated Financial Statements
Notes
EURm
Less than
1 year
Between
1-5 years
More than
5 years Total
30 September 2022
Interest-bearing debt 247.8 4,686.0 − 4,933.8
Lease liabilities 55.1 116.7 87.5 259.3
Trade payables 218.7 − − 218.7
Other financial liabilities 171.9 56.3 − 228.2
Total non-derivative financial liabilities 693.5 4,859.0 87.5 5,640.0
Derivative financial liabilities 3.4 6.9 – 10.3
30 September 2021
Interest-bearing debt 254.3 3,680.8 542.6 4,477.7
Lease liabilities 44.9 98.9 113.1 256.9
Trade payables 231.7 − − 231.7
Other financial liabilities 181.9 47.0 − 228.9
Total non-derivative financial liabilities 712.8 3,826.7 655.7 5,195.2
Derivative financial liabilities 1.2 53.0 – 54.2
The risk implied from the values in the table above reflects the one-sided scenario of cash outflows only.
Obligations under trade payables and other financial liabilities mainly originate from the financing of
assets used in the Group’s ongoing operations such as property, plant and equipment, and investments
in working capital such as inventories and trade receivables. These assets are considered in the Group’s
overall liquidity risk management.
4.2 Financial risks and financial instruments (cont'd)
Foreign currency risk
Translation risk and effects of foreign currency translation
Most of the Group’s entities are located outside the Eurozone. Since the Group’s reporting currency is
EUR, the financial statements of foreign operations are translated into EUR for the preparation of the
consolidated financial statements. To consider the effects of foreign currency translation in the risk
management, the general assumption is that investments in foreign operations are permanent and that
reinvestment is continuous. Effects from foreign currency exchange rate fluctuations on the translation of
net assets amounts into EUR are reflected in the Group’s consolidated statement of changes in equity. The
Group does not hedge net investments in foreign operations.
Sensitivity analysis for foreign currency risk
The following table demonstrates the approximate effect on the Group’s income statement (financial
items) in response to fluctuation of the currencies other than the Group’s reporting currency EUR. This
analysis assumes that all other variables, in particular interest rates, remain constant.
EURm Profit/(Loss)
30 September 2022
USD +5% (57.9)
CAD +5% 3.0
BRL +5% 2.4
30 September 2021
USD +5% (48.2)
CAD +5% 1.6
CNY +5% (0.9)
AUD +5% 0.8
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
4.2 Financial risks and financial instruments (cont'd)
Specification of net interest-bearing debt
EURm 30 Sept. 2022 30 Sept. 2021
Cash and cash equivalents 123.7 144.5
Bank loans, non-current liabilities (3,824.2) (3,523.9)
Bank loans, current liabilities (105.6) (124.7)
Total net interest-bearing debt (3,806.1) (3,504.1)
Interest rate sensitivity analysis
The Group is exposed to change in the following interest rates: EURIBOR and LIBOR. The sensitivity
analysis has been determined based on the exposure to interest rates at the reporting date. For floating
rate liabilities, the analysis is prepared assuming the amount of liability outstanding (after hedging) at
the reporting date was outstanding for the whole year. A 1% per cent increase or decrease is used when
reporting interest rate risk internally to key management personnel and represents management’s
assessment of the reasonably possible change in interest rates.
At 30 September 2022, if interest rates had been 1 per cent higher and all other variables were held
constant, the Group’s loss for the year ended 30 September 2022 would increase by EUR 3.6 million (2021:
EUR 2.9 million). This is mainly attributable to the Group’s exposure to interest rates on its variable rate
borrowings.
Interest rate risk
At 30 September 2022, the Group’s long-term debt consists of secured term loans of EUR 2,062.5 million
(2021: EUR 2,062.5 million) and USD 1,192.0 million (2021: USD 1,204.3 million) as well as 2nd lien term loan
of EUR 525.0 million (2021: EUR 525 million) with a floating interest rate of which 90% (2021: 72%) have been
swapped into fixed interest rate. The Group have applied hedge accounting in relation to these interest
rate swaps effective October 2021.
Hedging of future cash flows
Foreign currency risk hedging
The Group has cash flow in foreign currencies due to its international operations and USD denomi-nated
debt which exposes the Group to fluctuations in exchange rates vs reporting currency EUR. Foreign
currency exchange rate fluctuations may create unwanted and unpredictable earnings and cash flow vola-
tility. The Group manufactures and distributes most of its products at its headquarters in Singapore and
of the buying entities.
The majority of the Group’s sales and costs are in USD, JPY, GBP, AUD, CAD and SGD. The Group’s hedging
policy is to reduce the Group currency exposure mainly through employment of foreign exchange forward
contracts to mitigate the Group’s major risks from adverse foreign exchange movements impact on net
cashflow for 3 - 12 months rolling forward.
The foreign currency risk is centrally managed by Group Treasury. The policy for the Group is to maintain
an adequate hedging level of between 40% and 75% of the net foreign currency exposure. Group Treasury
is not allowed to undertake any financial transactions in foreign currencies of a speculative nature. Cash
flow hedge accounting shall be applied to the extent possible to mitigate negative impacts of adverse
development from foreign exchange risk on the consolidated operating result of the Group.
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
Cash flow hedges of foreign currency risk
Hedging instruments:
30 Sept. 2022
Average
exchange rate
Notional value:
Foreign
currency
Notional value:
Functional
currency (EUR)
Carrying
amount of
hedging
instruments -
Assets
Carrying
amount of
hedging
instruments -
Liabilities
Rate mil EURm EURm EURm
Sell AUD
< 3 months 1.6 (11.2) 7.0 − (0.4)
3-12 months 1.5 (41.0) 27.0 0.1 −
Sell CAD
< 3 months 1.4 (6.9) 5.0 − (0.1)
3-12 months 1.4 (19.0) 14.0 − (0.1)
Sell GBP
< 3 months 0.9 (6.0) 7.0 0.2 −
3-12 months 0.9 (24.4) 27.5 0.3 −
Sell JPY
< 3 months 131.0 (1,960.3) 15.0 1.1 −
3-12 months 138.0 (6,193.1) 27.5 0.4 −
Sell USD
< 3 months 1.1 (2.3) 2.0 − (0.3)
Buy SGD
< 3 months 1.5 22.6 (15.0) 1.1 −
3-12 months 1.5 73.8 (50.0) 2.2 −
5.4 (0.9)
30 Sept. 2021
Average
exchange rate
Notional value:
Foreign
currency
Notional value:
Functional
currency (EUR)
Carrying
amount of
hedging
instruments -
Assets
Carrying
amount of
hedging
instruments -
Liabilities
Rate mil EURm EURm EURm
Sell AUD
< 3 months 1.6 (8.0) 5.0 * −
3-12 months 1.6 (30.4) 19.0 0.2 −
Sell CAD
< 3 months 1.5 (3.0) 2.0 − *
3-12 months 1.5 (3.0) 2.0 − *
Sell GBP
< 3 months 0.9 (5.2) 6.0 − (0.1)
3-12 months 0.9 (19.5) 22.5 − *
Sell JPY
< 3 months 128.0 (1,920.3) 15.0 0.2 −
3-12 months 130.8 (3,924.1) 30.0 − (0.2)
Buy SGD
< 3 months 1.6 32.1 (20.0) 0.3 −
3-12 months 1.6 32.3 (20.0) 0.4 −
1.1 (0.3)
* Amount less than EUR 0.1 mil
4.2 Financial risks and financial instruments (cont'd)
Consolidated Financial Statements
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Consolidated Financial Statements
4.2 Financial risks and financial instruments (cont'd)
Hedged Items - Foreign currency hedge
The hedged items are forecasted transactions denominated in foreign currencies. The ineffective portions
of these hedges are insignificant.
Interest rate risk hedging
The Group has long-term loans on floating interest rate which expose the Group to interest rate fluctu-
ations. Interest rate swaps are used to hedge interest rate risks arising from the floating rate loans. The
strategy for the Group is to maintain a mid-term adequate hedging ratio of between 35% to 90% of its
interest rate exposure. The Group applied hedge accounting in relation to these interest rate swaps effec-
tive from 1 October 2021.
Cash flow hedges of interest rate risk
Hedging instruments:
30 Sept. 2022
Weighted
average rate
Notional
value:
Foreign
currency
Notional value:
Functional
currency (EUR)
Carrying
amount of
hedging
instruments -
Assets
Carrying
amount of
hedging
instruments -
Liabilities
Rate mil EURm EURm EURm
EUR – 6m Euribor
< 12 months 0.68 1,865 1,865 36.3 –
12-24 months 1.47 1,300 1,300 5.8 −
EUR – 3m Euribor
< 12 months 1.04 475 475 7.3 –
USD
< 12 months 0.89 1,080 1,108- 30.7 –
12-24 months 2.86 600 615- 12.5 –
92.6 –
Hedged Items – Interest rate hedge
The hedged items are future interest payments under floating interest rates. Details of the hedged items
are disclosed in Note 4.1.
Cash Flow Hedge Reserve
The risk categories recognized in the cash flow hedge reserve is reconciled in the table below with items
impacting the comprehensive income for the period.
EURm 30 Sept. 2022 30 Sept. 2021
Carrying amount at 1 October 0.4 (1.1)
Changes in fair value:
Foreign currency risk – cash flow hedge 8.5 1.7
Interest rate risk – cash flow hedge 92.6 –
Amounts reclassified to profit or loss:
Foreign currency risk – cash flow hedge (4.9) (0.1)
Tax ef fect (23.3) (0.1)
Carrying amount at 30 September 73.3 0.4
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
§
Accounting policies
Derivative financial instruments, including
hedge accounting
The Group uses various financial instruments to
reduce the impact of foreign exchange and inter-
est rates on financial results. The derivative finan-
cial instruments are used to manage the exposure
to market risk. Treasury enters into derivative con-
tracts in accordance with Group policies. Financial
instruments used include e.g. foreign currency
exchange contracts, interest rate swaps, interest
rate floors and redemption options (the latter two
being bifurcated embedded derivatives).
All derivative financial instruments are recog-
nized initially and subsequently at fair value. Any
attributable transaction costs are recognized in
the income statement in other financial income,
net as incurred.
On initial recognition, Management determines
if the derivative financial instrument qualifies
for hedge accounting and if so, designates the
instrument as a hedging instrument in a fair value
hedge, cash flow hedge or hedge of net invest-
ment respectively.
4.2 Financial risks and financial instruments (cont'd)
Cash flow hedges
For cash flow hedges, the portion of the fair value
adjustments on the hedging instrument that is an
effective hedge is recognized in other compre-
hensive income and accumulated in a separate
reserve in equity. The cumulative fair value ad-
justments of these contracts are transferred from
the reserve in equity and recycled to the income
statement through other comprehensive income
when the hedged transaction is recognized in the
income statement. However, when the forecast
transaction subsequently results in the recog-
nition of a non-financial asset or non-financial
liability, the transfer from the reserve in equity
is recognized directly in the initial cost or other
carrying amount of the asset or liability without
recycling through other comprehensive income.
When a hedging instrument expires or is sold,
or when a hedge no longer meets the criteria for
hedge accounting, any cumulative gain or loss
existing in the reserve within equity at that time
remains in the reserve and is recognized when the
forecast transaction is ultimately recognized in
the income statement. When a forecast transac-
tion is no longer expected to occur, the cumulative
gain or loss existing in the reserve is immediately
transferred to the income statement as a recycling
through other comprehensive income and recog-
nized in other financial income, net.
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
Categories of financial assets and financial liabilities and Fair value hierarchy
The below table shows the categories of financial assets and financial liabilities, their carrying amounts and their levels in the fair value hierarchy. It does not include fair value information for financial assets and finan-
cial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
EURm Carrying Amount Fair Value
30 September 2022 Notes
Financial assets
measured
at fair value
through profit
and loss
Financial
assets used
as hedging
instruments
Financial
assets
measured at
amortized
cost
Financial
liabilities at
amortized
costs
Financial
liabilities
measured at fair
value through
profit and loss Total Level 1 Level 2 Level 3 Total
Financial assets measured at fair value through P&L
Forward Exchange Contracts (designated as hedging instruments) 3.6 − 7.4 − − − 7.4 − 7.4 − 7.4
Interest rate risk - cash flow hedge 3.6 − 92.6 − − − 92.6 − 92.6 − 92.6
Interest rate swaps 3.6 0.8 − − − − 0.8 − 0.8 − 0.8
Fair value of call option 5.1 2.1 − − − − 2 .1 − − 2.1 2.1
2.9 100.0 – – – 102.9
Financial assets measured at amortized cost
Trade receivables* 3.8 − − 305.5 − − 305.5 − − − −
Customer loans* 3.5 − − 69.8 − − 69.8 − − − −
Other financial assets* − − 37.4 − − 37.4 − − − −
Cash and cash equivalents* − − 123.7 − − 123.7 − − − −
– – 536.4 – – 536.4
Financial liabilities measured at fair value through P&L
Forward Exchange Contracts (designated as hedging instruments) 3.9 − − − − 1.8 1.8 − 1.8 − 1.8
Forward Exchange Contracts (not designated as hedging instruments) 3.9 − − − − 1.6 1.6 − 1.6 − 1.6
Redemption call option and interest rate floors 3.9 − − − − 6.9 6.9 − − 6.9 6.9
– – – – 10.3 10.3
Financial liabilities measured at amortized cost
Trade payables* − − − 218.7 − 218.7 − − − −
Other financial liabilities* − − − 242.0 − 242.0 − − − −
Loans under Senior Facilities Agreement and other short-term debt 4.3 − − − 3,929.8 − 3,929.8 45.2 3,884.6 − 3,929.8
– – – 4,390.5 – 4,390.5
* The Group has not disclosed the fair values for financial instruments such as short-term trade receivables and payables, because their carrying amounts are a reasonable approximation of fair value.
4.2 Financial risks and financial instruments (cont'd)
Consolidated Financial Statements
102
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Consolidated Financial Statements
Notes
EURm Carrying Amount Fair Value
30 September 2021 Notes
Financial
assets
measured
at fair value
through
profit and loss
Financial
assets used
as hedging
instruments
Financial
assets
measured at
amortized
cost
Financial
liabilities at
amortized
costs
Financial
liabilities
measured
at fair value
through
profit and loss Total Level 1 Level 2 Level 3 Total
Financial assets measured at fair value through P&L
Forward Exchange Contracts (designated as hedging instruments) 3.6 − 1.5 − − − 1.5 − 1.5 − 1.5
– 1.5 – – – 1.5
Financial assets measured at amortized cost
Trade receivables* 3.8 − − 288.2 − − 288.2 − − − −
Customer loans* 3.5 − − 71.2 − − 71.2 − − − −
Other financial assets* − − 43.6 − − 43.6 − − − −
Cash and cash equivalents* − − 144.5 − − 144.5 − − − −
– – 547. 5 – – 547. 5
Financial liabilities measured at fair value through P&L
Forward Exchange Contracts (designated as hedging instruments) 3.9 − − − − 0.4 0.4 − 0.4 − 0.4
Forward Exchange Contracts (not designated as hedging instruments) 3.9 − − − − 0.8 0.8 − 0.8 − 0.8
Interest rate swaps 3.9 − − − − 7.4 7.4 − 7.4 − 7.4
Redemption call option and interest rate floors 3.9 − − − − 45.6 45.6 − − 45.6 45.6
– – – – 54.2 54.2
Financial liabilities measured at amortized cost
Trade payables* − − − 231.7 − 231.7 − − − −
Other financial liabilities* − − − 232.2 − 232.2 − − − −
Loans under Senior Facilities Agreement and other short-term debt 4.3 − − − 3,648.6 − 3,648.6 3.8 3,644.8 − 3,648.6
– – – 4,112.5 – 4,112.5
* The Group has not disclosed the fair values for financial instruments such as short-term trade receivables and payables, because their carrying amounts are a reasonable approximation of fair value.
4.2 Financial risks and financial instruments (cont'd)
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
The fair values of cash and cash equivalents, trade
and other receivables and trade payables with
a remaining term of up to twelve months, other
current financial liabilities and borrowings under
revolving credit facilities are approximately equal
to their carrying amount, mainly due to the short-
term maturities of these instruments.
Treasury enters into derivative contracts in
accordance with Group policies. The exact calcula-
tion of fair values of derivative financial instru-
ments depends on the specific type of instrument.
• Forward currency contracts – the fair value of
foreign currency exchange contracts is based on
forward exchange rates.
• Interest rate swap contracts – the fair value is
based on discounted cash flows of fixed leg and
floating legs.
• Interest rate floors – the fair value is based on
discounted cash flows of floorlets.
• Loan Repayment call option – the fair value is
based on backward induction method calculated
from valuation model.
The Group select valuation methods based on
market’s best practice. Market data required in
the valuation model is extracted from third party
financial data provider Bloomberg.
The levels of the fair value hierarchy and its appli-
cation to financial assets and financial liabilities
are described below:
Level 1: Quoted prices in active markets for
identical assets or liabilities;
Level 2: Inputs other than quoted prices that
are observable for the asset or liability,
either directly (i.e. as prices) or indirectly
(i.e. derived from prices); and
Level 3: Valuations methods, with significant
inputs not being based on observable
market data.
Type Valuation Technique
Significant
unobservable inputs
Sensitivity of fair
value to significant
unobservable inputs
FX contracts The fair value of the
exchange rate contracts is
based on forward exchange
rates (level 2)
Not applicable Not applicable
Interest rate swaps The fair value of Interest
Rate Swaps are determined
using discounted cash flows
of fixed leg and net present
value of floating leg based
on forward rate curve, and
can be categorized as level
2 (observable inputs) in the
fair value hierarchy
Not applicable Not applicable
Interest rate floors The fair value of interest
rate floors is based on
discounted cash flows or
floorlets for intrinsic and
option pricing models with
implied volatility for time
value component (level 3
unobservable inputs)
Implied volatility Higher implied volatility
will lead to higher fair
value and vice versa.
Change in implied volatility
will not result in significant
financial impact
Loan Repayment
call option
Backward induction method
where total remaining
cash flows are calculated
at each prepayment date.
The prepayment gain is
then calculated based on
the probability of a credit
rating improved at future
repayment date (level 3
unobservable data)
1-year migration matrix The higher the proba-
bility of an increase in
credit quality, the higher
the value of prepayment
option
4.2 Financial risks and financial instruments (cont'd)
Consolidated Financial Statements
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Consolidated Financial Statements
Notes
The following table shows the reconciliation of Level 3 fair value measurements of the loan repayment call
option and interest rate floors:
EURm 30 Sept. 2022 30 Sept. 2021
Carrying amount 1 October (45.6) (67.2)
Total gains or losses:
- Recognized in profit or loss 38.7 21.6
Carrying amount 30 September (6.9) (45.6)
Offsetting, Master netting agreements and similar arrangements
The Group enters into derivative transactions under International Swaps and Derivatives Association
(ISDA) master netting agreements/FX Payment Netting Agreements. In general, under such agreements
the amounts owed by each counterparty on a single day in respect of all transactions outstanding in
the same currency are aggregated into a single net amount that is payable by one party to the other. In
certain circumstances – e.g. when a credit event such as a default occurs – all outstanding transactions
under the agreement are terminated, the termination value is assessed and only a single net amount is
payable in settlement of all transactions.
EURm 30 Sept. 2022 30 Sept. 2021
Counterparty A: Goldman Sachs
Derivative assets 14.4 0.6
Derivative liabilities (0.5) (0.7)
Net amount 13.9 (0.1)
Counterparty B: Standard Chartered Bank
Derivative assets 0.5 0.7
Derivative liabilities (1.2) (0.3)
Net amount (0.7) 0.4
Counterparty C: Jyske Bank
Derivative assets 1.0 0.1
Derivative liabilities (0.3) (0.2)
Net amount 0.7 (0.1)
Counterparty D: Nordea
Derivative assets 0.4 −
Derivative liabilities * −
Net amount 0.4 –
Counterparty E: Danske
Derivative assets 84.5 −
Derivative liabilities * −
Net amount 84.5 –
* Amount less than EUR 0.1 mil
4.2 Financial risks and financial instruments (cont'd)
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
4.3 Liabilities from financing activities
EURm
Loans and
borrowings
Other short-
term debt
Derivatives
relating to
financing
agreements
Interest
rate swap
Lease
liabilities Others Total
Liabilities at 1 October 2021 3,644.8 3.8 45.6 7.4 223.2 – 3,924.8
Proceeds from loans and borrowings 160.0 39.1 − − − − 199.1
Transaction costs related to loans and borrowings (0.9) – − − − − (0.9)
Interest paid (146.9) (0.1) − (13.8) − (11.1) (171.9)
Repayment of borrowings (162.1) − − − − − (162.1)
Payment of lease liabilities − − − − (56.5) − (56.5)
Others − − − − − 0.3 0.3
Total changes from financing cash flows (149.9) 39.0 – (13.8) (56.5) (10.8) (192.0 )
Accrued loan interest 174.6 − − − − − 174.6
Amortization of transaction costs 23.0 − − − − − 23.0
Effective changes in hedge accounting − − − (92.6) − − (92.6)
Foreign exchange adjustments 191.9 2.4 − − 11.9 − 206.2
Other changes 0.2 − (38.7) 5.6 39.5 10.8 17.4
Liabilities at 30 September 2022 3,884.6 45.2 6.9 (93.4) 218.1 − 4,061.4
Liabilities at 1 October 2020 3,699.4 1.3 67.2 29.6 248.0 – 4,045.5
Proceeds from loans and borrowings 50.0 32.8 − − − − 82.8
Interest paid (160.8) (0.1) − (22.0) − (7. 2) (190.1)
Repayment of borrowings (136.4) (30.5) − − − − (166.9)
Payment of lease liabilities − − − − (51.4) − (51.4)
Others − − − − − (1.5) (1.5)
Total changes from financing cash flows (247.2) 2.2 – (22.0) (51.4) (8.7) (327.1)
Accrued loan interest 161.0 − − − − − 161.0
Amortization of transaction costs 20.8 − − − − − 20.8
Other changes 10.8 0.3 (21.6) (0.2) 26.6 8.7 24.6
Liabilities at 30 September 2021 3,644.8 3.8 45.6 7.4 223.2 – 3,924.8
§
Accounting policies
Financial liabilities, other than derivatives, are
initially recognized at fair value less transaction
costs, and subsequently measured at amortized
cost using the effective interest method. Accord-
ingly, the difference between the proceeds and
the nominal value is recognized in the income
statement over the term of the liability.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 4.3
Consolidated Financial Statements
Notes
4.4 Financial income and expenses
EURm 30 Sept. 2022 30 Sept. 2021
Interest income
− 0.8
Interest income from customer loans 1.5 2.5
Other interest income 6.4 2.4
Total interest income 7.9 5.7
Interest expenses (233.3) (221.2)
Interest expense from pension plans (0.2) (0.3)
Other interest expenses
− (0.6)
Total interest expenses (233.5) (222.1)
Other financial income/expenses, net
Foreign exchange differences (186.3) (15.1)
Change in fair value of derivatives relating to financing arrangements 38.8 21.6
Change in fair value of derivative financial instruments,
not designated hedging instruments 1.8 21.4
Others (0.6) (1.5)
Total other financial (expenses)/income, net (146.3) 26.4
Interest income and interest expense includes those generated from financial assets/(financial liabilities)
not measured at fair value through profit or loss.
4.5 Government grants
For the financial year ended 30 September 2022,
various subsidiaries of the Group received govern-
ment grants for wage subsidy schemes, training
grants or in lieu of negative business impact
caused by the COVID-19 pandemic. The total grant
amount received by the Group recorded within
other income in profit or loss is EUR 2.6 million
(2021: EUR 8.7 million), mainly for a training grant
received from the Economic Development Board
in Singapore.
§ Accounting policies
Grants from the government are recognized as
a receivable at their fair value when there is rea-
sonable assurance that the grant will be received
and the Group will comply with all the attached
conditions.
Government grants receivable are recognized as
income over the periods necessary to match them
with the related costs which they are intended to
compensate, on a systematic basis. Government
grants relating to expenses are shown separately
as other income.
§ Accounting policies
Financial income and expenses comprise interest
income and expenses, gains and losses on secu-
rities, exchange rate adjustments on receivables,
payables and transactions denominated in foreign
currencies, credit card fees, amortization and
impairment of financial assets other than trade re-
ceivables and contract assets and liabilities, gains
and losses on derivative financial instruments not
designated as hedging instruments etc.
Interest income and expenses on financial assets
and liabilities measured at amortized cost is
recognized using the effective interest method.
Other financial income and expenses are recog-
nized on an accrual basis in the period to which
they relate.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 4.4 CON Note 4.5
Consolidated Financial Statements
Notes
5 Other disclosures
5.1 Business combinations
The Group had completed various acquisitions
during the year. The acquisitions are meant to
increase the Group’s footprint in various regions
and expand its technological capabilities.
Acquisition of Zhejiang Longkang Medical
Equipment Co., Ltd and its related companies–
22 September 2021
On 22 September 2021, the Group, through its
subsidiary, Widex Hearing Aid (Shanghai) Co., Ltd,
entered into a Sales and Purchase agreement to
acquire 51% equity interest in Zhejiang Long-
kang Medical Equipment Co., Ltd and its related
companies (collectively known as “Longkang”) for
a consideration of approximately EUR 7.6 million.
Longkang operates online stores across several
different ecommerce marketplaces in China and
is and one of the top companies in online hearing
aid business in China. The acquisition is expected
to increase the Group’s footprint in China through
an “Online to Offline” business model. The acqui-
sition was completed on 8 November 2021 and
accordingly, the Group recognized the Longkang
entities and subsidiaries and consolidated them
from 8 November 2021 onwards.
The amounts recognized in respect of the identifiable assets acquired and liabilities assumed are as set
out in the table below.
EURm Longkang Audibel
Other
acquisitions
Assets acquired:
Other intangible assets 2.6 10.2 0.1
Property, plant and equipment 0.1 - 0.2
Inventories 1.7 1.6 0.1
Trade and other receivables 0.2 1.2 0.2
Other current assets 0.2 0.7 -
Cash and cash equivalents 0.3 0.7 0.2
Total assets acquired at the date of acquisition 5.1 14.4 0.8
Liabilities assumed at the date of acquisition:
Trade payables (0.6) (1.8) (0.4)
Other current liabilities (0.2) (0.8) (0.3)
Deferred tax liabilities (0.9) - -
Current income tax payable - (0.1) -
Total liabilities assumed at the date of acquisition (1.7) (2.7) (0.7)
Net assets acquired 3.4 11.7 0.1
Goodwill 3.9 5.1 11.8
Fair value of call option 2.1 - -
Non-controlling interest (1.7) - -
Total consideration 7.7 16.8 11.9
Cash and cash equivalents acquired (0.1) (0.7) (0.2)
Total cash consideration paid 7.6 16.1 11.7
Under the Sales and Purchase agreement, the
Group was also awarded a call option to purchase
the remaining 49% of the equity interests from the
Sellers. The call option will vest 3 years from the
acquisition date and will expire after the 5th anni-
versary of the acquisition date. The call option was
priced using the Binomial options pricing model
and has a fair value on recognition of approxi-
mately EUR 2.1 million.
Acquisition of Centro Auditivo Audibel
Exportacao Ltda – 22 October 2021
On 22 October 2021, the Group, through its
subsidiary, WS Audiology Solucoes Auditiva Ltda,
entered into a Sales and Purchase agreement to
acquire full interests in Centro Auditivo Audibel
Exportacao Ltda (also known as “Audibel”) for a
consideration of approximately EUR 16.1 million.
Audibel is active in the selling and distribution
of hearing aids in Brazil and has a strong brand
name in the hearing aid industry. The acquisition
is expected to grow WSA’s wholesale footprint in
Brazil and also through the sale of Audibel private
labelled WSA hearing aids. The acquisition was
completed on 31 January 2022.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 5 CON Note 5.1
Consolidated Financial Statements
Notes
Longkang
The Group has used the present ownership instruments
at a proportionate share of 51% in Longkang’s identifi-
able net assets for measuring non-controlling interest.
The Group has conducted a Purchase Price Allocation
exercise to identify any identifiable assets. Trademarks
are identified as identifiable assets, valued using the
Income Approach method. The residual amount allo-
cated to goodwill of EUR 3.9 million is attributed to Long-
kang’s expertise in running online stores and increasing
market share of WSA hearing aids through online and
offline channels. Subsequent to the acquisition, the
staying sellers of Longkang continue to hold manage-
ment positions in Longkang. The related earnout in
this arrangement is capped at a maximum payment of
EUR 6.8 million subject to achieving certain percentage
of revenue and EBITDA. In considering various factors
5.1 Business combinations (cont'd)
§
Accounting policies
Newly acquired or newly established enterprises
are recognized in the consolidated financial state-
ments from the time of acquisition or formation.
The time of acquisition is the date when control
of the enterprise is transferred to the Group. On
acquiring new enterprises of which the Group
obtains control, the purchase method is ap-
plied according to which their identified assets,
liabilities and contingent liabilities are measured
at their fair values on the acquisition date. Any
non-current assets acquired for the purpose of
resale are, however, measured at their fair values
less expected costs to sell. Restructuring costs are
solely recognized in the pre-acquisition balance
sheet if they are a liability for the acquired enter-
prise. Any tax effect of revaluations will be taken
into account.
Goodwill is measured at the excess of the sum of
the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the
fair value of the Group’s previously held equity
interests in the acquiree (if any) over the net of ac-
quisition date fair values of the identifiable assets
and liabilities and contingent liabilities. Goodwill is
not amortized but tested at least annually for im-
pairment. The first impairment test is performed
within the end of the acquisition year.
The consideration transferred consists of the fair
value of the consideration paid for the enterprise.
If the final consideration is conditional upon one
among which the term of the continuing employ-
ment, the level or remuneration as compared to
other employees, the earnout payment is treated
as an employee remuneration rather than consid-
eration.
Audibel
The fair value of the financial assets includes trade
receivables with a fair value of EUR 1.4 million.
The best estimate at acquisition date of the trade
receivables not to be collected is EUR 0.2 million.
The Group has done a provisional Purchase Price
Allocation exercise to identify any identifiable as
sets. The Group has identified trademarks and
customer relationships as identifiable assets. The
residual amounts allocated to goodwill of EUR
5.1 million relate to synergies acquired to expand
Share of revenue and loss from the acquisitions:
EURm 30 Sept. 2022
The share of revenue and loss for the year from the acquisition date:
Revenue 13.2
EBIT (0.2)
Loss for the year (0.4)
The share of revenue and loss if acquisitions had taken place at 1 October 2021 :
Revenue 17.2
EBIT (0.2)
Loss for the year (0.4)
WSA’s market share through additional sales
channels. As part of the aquisition, the maximum
provisional amount of earnout is EUR 3.3 million.
Excluding 40% of the earnout which relates to
employees' remuneration, the provisional earnout is
EUR 2 million. As of 30 September 2022, no provision
has been made as the Group is still assessing the
potential earnout.
Other acquisitions
During the year, the Group acquired various retail
chains which are not individually material.
The Group incurred acquisition-related cost of EUR
0.2 million (2021: EUR 0.8 million) for audit, legal
and due diligence services. These costs have been
included as part of profit or loss when incurred.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
5.1 Business combinations (cont'd)
§
Accounting policies (cont'd)
or more future events, the consideration will be
recognized at the fair value on acquisition. Any
subsequent adjustment of contingent considera-
tion is recognized directly in the income state-
ment, unless the adjustment is the result of new
information about conditions prevailing on the
acquisition date, and this information becomes
available up to 12 months after the acquisition
date. Transaction costs are recognized directly in
the income statement when incurred.
If, on the acquisition date, there are any uncer-
tainties with respect to identifying or measuring
acquired assets, liabilities or contingent liabilities
or uncertainty with respect to determining their
cost, initial recognition will be made on the basis
of provisionally calculated values. Such provi-
sionally calculated values may be adjusted, or
additional assets or liabilities may be recognized
up to 12 months after the acquisition date, if new
information becomes available about conditions
prevailing on the acquisition date, which would
have affected the calculation of values on that day,
had such information been known.
Non-controlling interests are measured at the
transaction date at either fair value or at its
proportionate share of the fair value of identified
Brands and trademarks
The value of brands and trademarks acquired and
their useful lives are based on the brands’ and
trademarks’ market position, expected long-term
developments in the relevant markets and profit-
ability. Management determines the useful life for
each brand and trademark based on its relative
local, regional and global market strength, market
share, and the current and planned marketing
efforts that are helping to maintain and increase
the value of the brand or trademark.
When the value of a well-established brand or
trademark is expected to be maintained for an in-
definite period in the relevant markets, and these
markets are expected to be profitable for a long
period, the useful life of the brand or trademark is
determined to be indefinite.
The fair value of brands and trademarks is based
on the relief from royalty method, under which
the value is calculated from expected future cash
flows for the brands and trademarks. Cash flows
are based on key assumptions about expected
useful life, royalty rate, growth rate and tax
effects. A post-tax discount rate that reflects the
risk-free interest rate with the addition of a risk
premium associated with the particular brand is
used to discount the expected future cash flows.
Significant judgments and
accounting estimates
Customer relationships
Customer relationships are valued based on the
multi-period excess earnings method. Cash flows
related to the customer relationships are based on
the forecasted revenues from existing customers,
reduced by the expected future churn. Profits
generated from those revenues are typically
adjusted for saved selling costs, given that in most
cases part of the selling costs relates solely to ac-
quiring new customers. Profits are then netted of
taxes and reduced by charges on contributory as-
set, which are required to generate those profits.
Cash flows calculated in this way are discounted
and adjusted for tax amortization benefit.
Contingent consideration
Business combinations may include contingent
considerations, e.g. when the Group acquires
audiology chains or shops. Such contingent
considerations are usually additional payments to
the previous owners, when certain events occur
or certain financial results are achieved. The
measurement of contingent consideration at fair
value at the transaction date inherently involve
significant estimates. In making these estimates,
Management considers sales run rates of the
acquired business.
net assets, determined on a transaction-by-trans-
action basis.
When a business combination is achieved in
stages, the Group’s previously held interests in
the acquired business are remeasured to its ac-
quisition-date fair value and the resulting gain or
loss, if any, is recognized in the income statement.
Amounts arising from interests in the acquiree
prior to the acquisition date that have previously
been recognized in Other comprehensive income
are reclassified to the income statement, where
such treatment would be appropriate if that inter-
est were disposed of.
Goodwill and fair value adjustments in connec-
tion with the acquisition of a foreign operation
with a functional currency other than the Group’s
presentation currency (EUR) are treated as assets
and liabilities belonging to the foreign entity and
translated into the foreign operations functional
currency at the exchange rate at the transaction
date.
Acquisition or sale of equity interests without
gaining or losing control of an entity is accounted
for as equity transactions.
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
5.2 Remuneration of Key Management Personnel
EURm
Short-term
benefits
Termination
benefits Total
1 October 2021 – 30 September 2022
Executive Management 4.1 0.1 4.2
Board of Directors 0.6 - 0.6
Total 4.7 0.1 4.8
1 October 2020 – 30 September 2021
Executive Management 3.8 - 3.8
Board of Directors 0.5 - 0.5
Total 4.3 - 4.3
The Executive Management and Board of Directors hold ordinary and preference shares in NH Lux ManCo
SCSp. Please refer to Note 5.3 for details of this program. The shares held by the Executive Management
and the Board of Directors are insignificant.
The Group has in place a Management Participation Program (“MPP”) - Certain members of management
(the “MPP Participants”) may acquire a minority partnership interest in NH Lux ManCo SCSp (“NHSCSp”),
which is controlled by North Harbour Lux TopCo S.a.r.l. (“TopCo”), a holding entity that is fully consolidated
within WS Audiology, therefore indirectly having an ownership interest in the intermediate Group.
The fair value of the equity instruments on acquisition date is equivalent to the cost. The redemption price
is based on the leaver status at the time of redemption.
The MPP participants acquired ordinary shares, which rank pari passu in all respects, as well as prefer-
ence shares. The reacquisition of the ownership interests by TopCo is triggered upon the termination of
employment of MPP Participants; a liability in this regard is included in Other non-current liabilities, with
reference to Note 3.9.
MPP Liability
Number of
shares (mil)
Outstanding at 1 October 2021 37.1
Additions 0.5
Disposals (3.0)
Outstanding at 30 September 2022 34.6
Outstanding at 1 October 2020 35.7
Additions 3.8
Disposals (1.4)
Others (1.0)
Outstanding at 30 September 2021 37.1
§ Accounting policies
The accounting for the shares purchased by management (at fair value, represented by ‘interests’ in
NHSCSp) as part of the North Harbour MPP scheme falls within the scope of IFRS 2 as a cash-based arrange-
ment. A liability is recognized reflecting the fair value of the Group’s intention to acquire the ‘interests’.
5.3 Management Participation Program liability
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 5.2 CON Note 5.3
Consolidated Financial Statements
Notes
703 former employees with vested rights and 420
retirees and surviving dependents). Individual
benefits are generally based on eligible compen-
sation levels and/or ranking within the Group's
hierarchy and years of service. The characteristics
of the defined benefit plans and the risks asso-
ciated with them vary depending on legal, fiscal
and economic requirements in each country. For
the major defined benefit plans of the Group the
characteristics and risks are as follows:
Germany:
In Germany, the Group provides pension benefits
through the cash-balance plan BSAV (Beitragsori-
entierte Siemens Altersversorgung), frozen legacy
plans and deferred compensation plans. Active
employees in Germany participate in the BSAV
introduced in fiscal 2004. A legacy pension plan
(Altzusage) has been transformed into BSAV.
These benefits are predominantly based on
contributions made by the Group and returns
earned on such contributions, subject to a
minimum return guaranteed. In general, the BSAV
is fully funded from the Group's perspective.
Sivantos GmbH has set up a CTA (Contractual
Trust Arrangement) in order to take precautions
of financing all of its BSAV pension obligations,
including the Group. Individual benefits under the
frozen legacy plans are based on eligible compen-
sation levels or ranking within the Group's hier-
archy and years of service. In connection with the
implementation of the BSAV, benefits provided
under the frozen legacy plans were modified to
5.4 Pension obligations
Post-employment benefits provided by the Group
are organized primarily through defined contri-
bution plans as well as defined benefit plans
which cover almost all of the Group’s domestic
employees and many of the Group’s foreign
employees. Post-employment defined benefit
plans include to the major extent pension bene-
fits.
Defined benefit plans
General principles are determined in a corporate
pension policy. That means inter alia that the
Group regularly reviews the design of its post-em-
ployment defined benefit plans. In order to
reduce Group’s exposure to certain risks associ-
ated with defined benefit plans, such as longevity,
inflation, effects of compensation increase, the
Group regularly review and continuously improves
the design of its post-employment defined benefit
plans. The benefits of the defined benefit plan
open to new entrants are based predominantly
on contributions made by the Group and are
still affected by longevity, inflation adjustments
and compensation increases, but only to a lesser
extent. The major pension plans are funded with
assets in segregated pension entities.
The existing defined benefit plans cover approx-
imately as of 30 September 2022 – 3,570 partic-
ipants, including 2,457 active employees, 706
former employees with vested rights and 407
retirees and surviving dependents (2021: 3,488
participants, including 2,365 active employees,
substantially eliminate the effects of compensa-
tion increases by freezing the accretion of benefits
under the majority of these plans. However, these
frozen plans still expose the Group to actuarial
risks such as investment risk, interest rate risk and
longevity risk. Furthermore, deferred compen-
sation plans are offered which are funded via a
CTA. In Germany no legal or regulatory minimum
funding requirements apply. The Trust which
is legally separate manages its plan assets as
trustee in accordance with the respective trust
agreements.
U.S.:
The assets under these pension plans are admin-
istered by the Group and are, therefore, the sole
responsibility of the Group. The assets are not
separately identifiable; instead the companies had
a common right to the trusts' assets. One major
defined benefit plan, the Sivantos Pension Plan,
is frozen to new entrants and accretion of new
benefits. Employees hired prior to April 1, 2006
participate in the Sivantos Pension Plan. Most of
the defined benefit plan participants' benefits are
calculated using a cash balance formula; although
a small group of participants are eligible for a
benefit based on a final average pay formula. This
frozen defined benefit plan exposes the Group to
actuarial risks such as investment risk, interest
rate risk and longevity risk.
The defined benefit plan assets are held in a
Master Trust. The Group, as the sponsoring
employer, has delegated investment oversight of
the plans' assets to the Investment Committee.
The Investment Committee members have a
fiduciary duty to act solely in the best interests of
the beneficiaries according to the trust agreement
and U.S. law. The Committee has established an
Investment Policy Statement which articulates
the goals and objectives of the plans' investment
management, including diversifying the assets of
the Master Trust with the intention of appropri-
ately addressing concentration risks. The trustee
of the Master Trust acts only by direction of the
Investment Committee. It is responsible for the
safekeeping of the trust, but generally has no
decision-making authority over the plan assets.
The legal and regulatory framework for the
plans is based on the applicable U.S. legislation
Employee Retirement Income Security Act (ERISA).
Based on this legislation a funding valuation is
prepared annually. There is a regulatory require-
ment to maintain a minimum funding level of
80% in the defined benefit plans in order to avoid
benefit restrictions.
The amounts included in the Group's Consoli-
dated Statements of Financial Position arising
from its pension obligations at 30 September are
as follows:
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 5.4
Consolidated Financial Statements
Notes
5.4 Pension obligations (cont'd)
EURm
Defined benefit
obligation
Fair value
of plan assets Total
30 September 2022
Germany (46.4) 50.8 4.4
U.S. (37.2) 30.9 (6.3)
Others (7.5) 3.2 (4.3)
Total (91.1) 84.9 (6.2)
30 September 2021
Germany (63.3) 59.9 (3.4)
U.S. (39.5) 33.7 (5.8)
Others (7.9) 3.4 (4.5)
Total (110.7) 97.0 (13.7)
The following table show the total defined benefit cost that was recognized in profit or loss account and
other comprehensive income at the end of the reporting period.
EURm 30 Sept. 2022 30 Sept. 2021
Current service cost 2.5 2.7
Net interest expenses 0.2 0.3
Liability administration expenses - 0.2
Defined benefit costs recognized in the income statement 2.7 3.2
3.2
Return on plan assets (excluding amounts included in net interest
expense and net interest income) 17.7 (6.3)
Remeasurement losses on defined benefit obligations (27.3) (2.1)
Foreign currency translation differences - 0.3
Remeasurements of defined benefit plans recognized in the
Statement of Comprehensive Income (9.6) (8.1)
Change in defined benefit obligations:
Defined benefit obligation at beginning of year 110.7 110.6
Current service cost 2.5 2.7
Interest expense 1.7 1.3
Contributions paid 0.2 (0.1)
Net accumulated actuarial gains (27. 3) (2.1)
Benefits paid (4.3) (3.0)
Foreign currency effects 7.6 1.3
Defined benefit obligation at 30 September 91.1 110.7
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
EURm 30 Sept. 2022 30 Sept. 2021
Change in plan assets:
Fair value of plan assets at beginning of year 97.0 86.8
Interest income 1.5 1.0
Remeasurement gains (Return on plan assets excluding amounts
included in net interest income and net interest expense) (17.7) 6.3
Contributions paid 0.3 0.6
Benefits paid (3.0) (1.5)
Employer contributions 0.4 2.6
Liability administration costs - (0.2)
Foreign currency effects 6.4 1.4
Fair value of plan assets at 30 September 84.9 97.0
Plan assets comprise of the following:
Investment funds 84.4 95.6
Cash and cash equivalents 0.5 1.4
Total 84.9 97.0
Quoted 84.4 95.6
Unquoted 0.5 1.4
Total 84.9 97.0
The Group has reported EUR 9.7 million (2021: EUR 3.4 million) of asset for deferred compensation plan
under Note 3.6, which is used to fund the pension obligations.
5.4 Pension obligations (cont'd)
Actuarial assumptions
Assumed discount rates, compensation increase rates, pension progression rates and mortality rates used
in calculating the DBO vary according to the economic and other conditions of the country in which the
retirement plans are situated.
The mortality tables used for the actuarial valuation of the DBO were as follows (most significant coun-
tries):
Germany Heubeck Richttafeln 2005G (modified)
U.S. RP-2014 Employee and Healthy Annuitant Tables projected with Scale MP-2015 for all years
The DBO was only significantly affected by other financial assumptions in Germany and U.S. For Germany,
the long-term rate of compensation increase and the pension increase rate were constant on average in
fiscal year 2022 and 2021. For U.S., the DBO was mainly affected by the discount rate as the plan is frozen
to new entrants and accretion of new benefits.
The DBO is also affected by assumed future inflation rates. The effect of inflation is recognized within the
assumptions above where applicable.
The following were the principal actuarial assumptions at the reporting date (expressed as weighted
averages).
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Consolidated Financial Statements
Notes
EURm 30 Sept. 2022 30 Sept. 2021
Germany
Discount rate 3.66% 0.85%
Future salary growth 2.25% 2.25%
Expected return on assets 2.25% 1.75%
Expected pension progression 2.25% 1.75%
U.S.
Discount rate 5.08% 2.39%
Future salary growth N/A N/A
Expected return on assets 5.08% 2.39%
Expected pension progression 3.00% 3.00%
Assumptions regarding future mortality have been based on published statistics and mortality tables. The
current longevities underlying the values of the defined benefit obligation at the reporting date were as
follows:
EURm 30 Sept. 2022 30 Sept. 2021
Germany
Longevity at age 55 for current pensioners
Males 20.0 20.0
Females 24.0 24.0
Longevity at age 55 for current pensioners with 10% reduction in
mortality rates
Males 21.0 21.0
Females 25.0 25.0
U.S.
Longevity at age 55 for current pensioners
Males 28.8 28.6
Females 31.3 31.1
Longevity at age 55 for current pensioners with 10% reduction in
mortality rates
Males 29.8 29.6
Females 32.2 32.0
The weighted-average duration of the defined benefit obligation was 9.7 years at 30 September 2022
(2021: 11.2 years).
Although the analysis does not take account of the full distribution of cash flows expected under the plan,
it does provide an approximation of the sensitivity of the assumptions shown.
5.4 Pension obligations (cont'd)
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
Sensitivity analysis
As the significant part of the DBO results from the German and U.S. entities, the sensitivity analysis were
as follows:
30 Sept. 2022
EURm 0.5% decrease 0.5% decrease
Germany
Discount rate (1.9) 2.1
Rate of pension progression 1.4 1.2
-1 year +1 year
Life expectancy (0.9) 1.0
U.S. 0.5% increase 0.5% decrease
Discount rate (1.3) 1.4
30 Sept. 2021
EURm 0.5% decrease 0.5% decrease
Germany
Discount rate (3.6) 4.1
Rate of pension progression 2.5 (2.3)
-1 year +1 year
Life expectancy (1.7) 1.9
U.S. 0.5% increase 0.5% decrease
Discount rate (1.8) 1.9
5.4 Pension obligations (cont'd)
The Company expects to pay EUR 7.6 million (2021:
EUR 7.0 million) in contributions to its defined
benefit plans in the upcoming financial year.
Defined contribution plan
The amount recognized as an expense for defined
contribution plans at 30 September 2022 was EUR
11.7 million (2021: EUR 10.2 million).
§ Accounting policies
Defined contribution plans
The Group operates a number of defined contri-
bution plans around the world. These plans
are externally funded in entities, e.g. insurance
entities, that are legally separate from the Group.
Contributions to defined contribution plans are
recognized in the income statement in the year to
which they relate.
Defined benefit plans
The Group also operates defined benefit plans in
a few jurisdictions, primarily in Germany and the
USA.
The liability and costs for the year for defined
benefit plans are determined using the projected
unit credit method. This reflects services rendered
by employees to the valuation dates and is based
on actuarial assumptions regarding future
compensation and benefit increases, mortality,
expected return on plan assets and discount
rates. Discount rates are based on average market
yields of high-quality corporate bonds in the
country and/or currency in which the pension
liabilities are expected to be settled.
Current service cost, past service cost and settle-
ments for post-employment benefits as well as
other administration costs which are unrelated to
the management of plan assets are recognized in
the income statement and allocated among func-
tional costs, following the functional area of the
corresponding profit and cost centre. Administra-
tion costs which are related to the management of
plan assets and taxes directly linked to the return
on plan assets and payable by the plan itself are
included in the return on plan assets and are
recognized in other comprehensive income.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assump-
tions are recognized in Other comprehensive
income in the period in which they arise. Past
service costs are recognized immediately in the
income statement.
For unfunded plans, the Group recognizes a
post-employment liability as non-current liability.
For funded plans, the Group offsets the fair value
of plan assets with the benefit obligations, and
recognizes the net amount, after adjustments for
effects related to any asset ceiling, as a non-cur-
rent liability or other current assets.
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Consolidated Financial Statements
Notes
5.5 Contingent assets and liabilities
Guarantees
The Group has issued Corporate Guarantees,
mainly to the business partners, outstanding for
an amount of EUR 109.3 million at 30 September
2022 (2021: EUR 101.2 million). None of the
outstanding guarantees are likely to be drawn,
hence no provisions have been made.
Outstanding Lawsuits and disputes
The Group is, from time to time, subject to legal
disputes in connection with its business activities.
In the light of the number of legal disputes and
proceedings in which the Group is involved, it
cannot be ruled out that some of these proceed-
ings could result in rulings against the Group.
Although the Group maintains liability insur-
ance in its non-amounts the Group considers
consistent with industry practice, it may not be
fully insured against all potential damages that
may arise out of any claims to which the Group
may be party in the ordinary course of the Group’s
business. At this time, however the Group does
not expect any significant negative effects on the
Group’s financial position or finance and earnings
situation resulting from legal disputes.
The Group seeks to make adequate provisions for
any legal disputes and proceedings, and assesses
the likely outcome in which the Group is involved.
5.6 Associates
EURm
Investments
in associates
Receivables
from
associates
Balance at 30 September 2021 4.2 3.2
Share of post-acquisition retained earnings and translation differences (0.5) -
Carrying amount at 30 September 2022 3.7 3.2
Balance at 30 September 2020 4.0 3.2
Share of post-acquisition retained earnings and translation differences 0.2 -
Carrying amount at 30 September 2021 4.2 3.2
Included in the investments in associates is a customer loan to an associate, Hear-Mart Holdings LLC, of
EUR 1.7 million. The investment was fully impaired in 2019/20 as Management has assessed that there are
difficulties in recovering the loan.
The Group’s investments in associates are not individually material.
Please refer to Note 5.10 for a list of associates.
§ Accounting policies
Associates are those entities in which the Group
has significant influence but not control or joint
control over the financial and operating policies.
A joint venture is an arrangement in which the
Group has joint control over the financial and
operating policies, and where the Group has
rights to the net assets of the arrangement, rather
than rights to its assets and obligations for its
liabilities.
Investments in associates and joint ventures
are accounted for using the equity method. This
entails that the investments are initially recog-
nized at cost and adjusted thereafter to recog-
nize the Group’s share of the profit or loss and
other comprehensive income of the associate or
joint venture calculated in accordance with the
Group’s accounting policies. When the Group’s
share of losses of an associate or joint venture
exceeds the Group’s interest in such associate
or joint venture, the Group discontinues recog-
nizing its share of future losses. Additional losses
are recognized only to the extent that the Group
has incurred legal or constructive obligations or
made payments on behalf of the associate or joint
venture.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 5.5 CON Note 5.6
Consolidated Financial Statements
Notes
5.7 Non-cash adjustments
EURm 30 Sept. 2022 30 Sept. 2021
Unrealized loss on foreign currency translation 227.0 18.5
Others 7.8 4.0
Total 234.8 22.5
Significant non-cash transaction – for the period 1 October 2021 – 30 September 2022
For the financial year ended 30 September 2022, there were no significant non-cash transaction.
5.8 Fees to auditors appointed at the annual general meeting
EURm Deloitte Others
1 October 2021 - 30 September 2022
Audit fees 0.9 -
Other assurance related services 0.9 1.6
Tax services 0.7 1.6
Other services 0.1 0.2
Total 2.6 3.4
1 October 2020 - 30 September 2021
Audit fees 0.9 0.1
Other assurance related services 0.9 1.6
Tax services 1.5 1.6
Other services 0.1 1.2
Total 3.4 4.5
Consolidated Financial Statements
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 5.7 CON Note 5.8
Consolidated Financial Statements
Notes
5.9 Related parties
Related parties include North Harbour VIII S.à.r.l., North Harbour VII S.à.r.l., Auris Luxembourg I S.A.,T&W
Medical A/S, as well as transactions with associates.
Other related parties in the summary below include those entities controlled by T&W Medical A/S.
Transactions with related parties
In addition to the related party disclosure that is disclosed elsewhere in the financial statements, the
following significant transactions between the Group and its related parties took place at terms agreed
during the fiscal year:
EURm 30 Sept. 2022 30 Sept. 2021
Transactions with associates
- Sales of goods and services 0.4 9.5
Other related parties
- Purchase of goods and services (7.6) (7.2)
Total transactions with related parties (7.2) 2.3
At 30 September 2022, the outstanding balances with the associates are EUR 5.7 million (2021: EUR 5.7
million).
Transactions with related individuals
The Group's Executive management is defined as those persons, who are responsible for the Group's
worldwide operating business, based on their function within the Group or the interests of WS Audiology
A/S and registered directors in the parent company. In financial years 2021/22 and 2020/21, there were no
significant, material or major transactions between the Group and members of the Executive Manage-
ment and Board of Directors, other than their remuneration and transactions towards the participation
program. For information about re¬muneration to Executive management and Board of Directors refer to
Note 5.2.
5.10 Companies in the WS Audiology A/S Group
List of the Group’s companies included in the Consolidated Financial Statements:
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
WS Audiology A/S Denmark 100 100
North Harbour Topco S.à.r.l. Luxembourg 100 100
North Harbour Midco S.à.r.l. Luxembourg 99 99
Auris Luxembourg II S.A. Luxembourg 100 100
Auris Luxembourg III S.à.r.l. Luxembourg 100 100
Widex A/S Denmark 100 100
Sivantos Holding Singapore Pte. Ltd. Singapore 100 100
Hear.com N.V. Netherlands 100 100
Subsidiaries of Widex A/S
EMEA-LA
Bloomhearing ApS Denmark 100 100
WSAUD A/S (formerly Investment DK ApS) Denmark 100 100
WS Audiology Benelux BV Netherlands 100 100
Widex UK Ltd. UK 100 100
Widex DK A/S Denmark 100 100
Coselgi DK ApS Denmark - 100
SAS Clermont Distribution France 100 100
SAS Pavillon de l'audition
1
France - 100
SAS Clarte Audition France 100 -
Widex S.A.S France 100 100
Bloom Hearing Specialists Ltd. UK 100 100
Aberdeen Hearing Services Ltd. (under liquidation) UK - 100
Bonavox Limited Ireland 100 100
1 SAS Pavillion De’L Audition was merged into SAS Clermont Distribution during 2021/22.
Consolidated Financial Statements
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119
Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 5.9 CON Note 5.10
Consolidated Financial Statements
Notes
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Widex A/S (cont'd)
EMEA-LA (cont'd)
WS Audiology Chile SpA (formerly Widex Chile SpA) Chile 100 100
Widex Uruguay Uruguay 51 51
COW-Audición en Alta Definición S.A. de C.V Mexico 100 100
Widex Argentina S.A Argentina 51 51
Centro Auditivo Widex Brasitom Ltda Brazil - 100
Communicare Aparelhos Auditivos Ltda
1
Brazil 100 100
RAR Comercio e Servicos em Aparelhos
Auditivos Ltda
1
Brazil - 100
WS Audiology Solucuoes Auditiva Ltd. Brazil 100 100
Centro Auditivo Audibel Importacao
E Exportacao Ltda Brazil 100 -
Bloom Hörakustik AG (dormant) Switzerland 100 100
WS Audiology Switzerland AG Switzerland 100 100
Widex Hörgeräte GmbH Germany 100 100
Widex AB
2
Sweden 100 100
Hörselhuset Aktiebolag
2
Sweden - 100
Widex Biocord AB
2
Sweden - 100
Widex OOO LLC (dormant) Russia 100 100
Widex Norge AS Norway 100 100
Widex-Reabilitacão Auditiva Lda. Portugal 100 100
WSA Portugal S.A. Portugal 100 100
WSA Rus LLC Russia 100 100
5.10 Companies in the WS Audiology A/S Group (cont'd)
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Widex A/S (cont'd)
EMEA-LA (cont’d)
Widex Akustik OY Finland 100 100
Widex Lines s.r.o Czech Republic 100 100
Widex Poland Sp. Z.o.o Poland 60 60
Widex Tibbi ve Teknik Chihazlar San.ve Tic. AŞ Turkey 100 100
Widex Trading d.o.o Ljubljana Slovenia 60 60
Slušni Aparati d.o.o. Widex Ljubljana Slovenia 84 84
WS Audiology-H Kft (formerly Widex-H Kft) Hungary 100 100
Audiofon Kft Hungary 100 100
Myprojects Kft
3
Hungary - 100
Widex Italia s.r.l. Italy 100 100
WS Audiology Slovakia s.r.o
(formerly Widex-Slovton Slovakia) Slovakia 100 100
Widex Slušni Aparati d.o.o. Bosnia 60 60
ReOton Ltd Ukraine 100 100
Koalys Technologies Ltd Israel 100 100
Shoebox France SARL France 100 100
Koalys Poland Sp z.oo Poland 100 100
Widex Regional Operation Center EMEA Poland 100 100
Asia-Pacific
Widex Hearing Aid Sdn Bhd Malaysia 100 100
Widex Singapore Pte Ltd Singapore 100 100
Bloom Hearing Co. Ltd. Japan 100 100
Widex Co. Ltd. Japan 100 100
1 RAR Comercio e Servicos em Aparelhos Auditivos Ltda was merged into Communicare Aparelhos Auditivos Ltda during 2021/22.
2 Hörselhuset Aktiebolag and Widex Biocord AB was merged into Widex AB during 2021/22.
3 Myprojects Kft merged into Audiofon Kft during 2021/22.
Consolidated Financial Statements
120
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Widex A/S (cont'd)
Asia-Pacific (cont’d)
Widex Hearing Aid (Shanghai) Co. Ltd. China 100 100
Widex India Private Ltd. India 100 100
Widex New Zealand Ltd.
1
New Zealand - 100
Active Hearing Pty. Ltd. Australia 100 100
Hearclear Audiology Pty. Ltd. Australia 100 100
Hutchinson Audiology Clinics Pty Ltd Australia 100 -
Bloom Hearing Ltd.
1
New Zealand 100 100
Widex Hong Kong Hearing & Speech Centre Ltd. Hong Kong 100 100
Starry Hearing & Speech Centre Ltd. Hong Kong 65 65
Zhejiang Longkang Medical Equipment Co. Ltd. China 51 -
Hangzhou Miaoyin Medical Equipment Co. Ltd. China 51 -
Hangzhou V Hearing Medical Equipment Co. Ltd. China 51 -
Hong Kong V Hearing Trading Co. Ltd Hong Kong 51 -
Suzhou FenBei Medical Equipment Co. Ltd. China 51 -
WS Audiology Philippines Corp. Philippines 100 -
North America
TW Group Canada Ltd. Canada 100 100
Lifestyle Hearing Corporation Inc.
2
Canada 100 100
Lifestyle Hearing Corporation USA Inc.
3
USA 100 100
Widex USA Inc. USA 100 100
5.10 Companies in the WS Audiology A/S Group (cont'd)
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Lifestyle Hearing Corporation Inc.
North America
Lifestyle Hearing Network Inc. Canada 100 100
Helix Hearing Inc. Canada 100 100
Hearcanada Inc.
2
Canada - 100
Helix Service Corporation Inc. Canada 100 100
Manji Nicholaou Audiology Inc. Canada 100 100
Subsidiaries of Lifestyle Hearing Corporation USA Inc.
North America
Audiology Management Group Inc. USA 100 100
Helix Hearing Care (California) Inc. USA 100 100
New Asheville Audiology Services PLLC
3
USA - 100
Lifestyle Hearing Professionals LLC
3
USA - 100
Helix Hearing Care (Texas) LLC
3
USA - 100
Helix Hearing Care (Florida) LLC
3
USA - 100
My Hearing Centers LLC USA 100 100
Hear Again Hearing Aids LLC. USA 60 60
Helix Hearing Care Naples LLC USA 60 60
The Hearing Center of ENTA LLC USA 60 60
Medical Hearing Systems LLC USA 70 70
PAS Development services LLC
3
USA - 82
1 Widex New Zealand Ltd. was merged into Bloom Hearing Ltd. during 2021/22.
2 Hearcanada Inc. was merged into Lifestyle Hearing Corporation Inc. during 2021/22.
3 Helix Hearing Care (Florida) Partnership, LLC., Helix Hearing Care (Texas) Partnership, LLC., New Asheville Audiology
Services PLLC, PAS Development Services, LLC. and Lifestyle Hearing Professionals, LLC. was merged into Lifestyle Hearing
Corporation USA, Inc. during 2021/22.
Consolidated Financial Statements
121
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Other equity investments
Hearing Instrument Manufacturers Software
Association A/S Denmark 25 25
HIMSA II a/s Denmark 20 20
HIMSA II K/S Denmark 17 17
HIMPP A/S Denmark 13 13
K/S HIMPP Denmark 9 9
Sound Advice Hearing Ltd. UK 49 49
D Med Hearing Company Thailand 38 38
Widex Columbia SAS Columbia 30 30
Hear-Mart Holdings LLC. USA 49 49
Audiology Associates of Westchester LLC USA 49 49
Smartcare LLC USA 10 10
Widex Servicios Technico S.A. Spain 30 30
Widex Audifonos S.A. Spain 30 30
Instituto Auditivo Widex C.A. Venezuela 30 30
Widex Macau Hearing & Speech Centre Ltd. Macau 49 49
Subsidiary of Sivantos Holding Singapore Pte. Ltd.
Sivantos Pte. Ltd. Singapore 100 100
5.10 Companies in the WS Audiology A/S Group (cont'd)
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Sivantos Pte. Ltd.
EMEA-LA
Sivantos Holding Germany GmbH Germany 100 100
Sivantos A/S Denmark 100 100
Oorwerk B.V. Netherlands 100 100
Oorwerk den Haag B.V. Netherlands 100 100
Hoortechnish Centrum Schagen B.V (dormant) Netherlands 100 100
Sivantos Isitme Cihazlari Sanayi Ve Ticaret A.S. Turkey 100 100
Sivantos Europe GmbH (under liquidation) Germany 100 100
Bloom Hörakustik GmbH Austria 100 100
WS Audiology Spain S.A. Spain 100 100
Sivantos (RUS) LLC (dormant) Russia 100 100
Biotone Technologie SAS France 100 100
North America
WS Audiology Mexico S.A. de C.V. Mexico 100 100
Asia-Pacific
Sivantos K.K. Japan 100 100
Hearing Express K.K. Japan 100 100
WS Audiology Korea Limited Korea 100 100
Consolidated Financial Statements
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122
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Sivantos Holding
Germany GmbH
Sivantos GmbH Germany 100 100
Subsidiaries of Sivantos GmbH
EMEA-LA
AS-AUDIO SERVICE GmbH Germany 100 100
Signia GmbH Germany 100 100
Sivantos Kft. (under liquidation) Hungary 100 100
Sivantos AS Norway 100 100
Sivantos s.r.o Czech Republic 100 100
Sivantos Sp. z o.o. Poland 100 100
Sivantos S.r.l Italy 100 100
Signia S.A.S. France 100 100
WS Audiology Limited (formerly Sivantos Limited) UK 100 100
WS Audiology South Africa Pty Ltd South-Africa 100 100
North America
Sivantos, Inc. USA 100 100
Audiology Distribution, LLC
1
USA 100 100
HearX West, LLC USA 50 50
HearX West, Inc. USA 50 50
HearUSA IPA, Inc. USA 100 100
WS Audiology Canada Inc Canada 100 100
Shoebox, Inc. Canada 100 100
5.10 Companies in the WS Audiology A/S Group (cont'd)
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Sivantos GmbH (cont'd)
North America (cont'd)
TruHearing, Inc. USA 100 100
TruHearing IPA LLC USA 100 100
Hearing Care Solutions, Inc USA 100 100
Harmony Hearing Services LLC
1
USA - 100
MEDPlus Health Solutions LLC USA 100 100
Asia-Pacific
Sivantos (Suzhou) Co. Ltd. China 100 100
Sivantos India Pvt. Ltd India 100 100
WS Audiology ANZ Pty Ltd Australia 100 100
Other equity investments
Koden Co., Ltd. Japan 43 43
Kikoeno Soudanshitsu Co., Ltd. Japan 50 50
Kanto Hochouki Co., Ltd. Japan 25 25
Subsidiaries of Hear.com N.V.
Hear.com Korea Limited Korea 100 100
Soundrise Hearing Solutions Private Limited India 100 100
hear.com USA Parent LLC USA 100 100
hear.com, LLC USA 100 100
1 Harmony Hearing Services LLC was merged into Audiology Distribution LLC during 2021/22.
Consolidated Financial Statements
123
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated Financial Statements
Notes
Company Country
30 Sept. 2022
Equity
Interest %
30 Sept. 2021
Equity
Interest %
Subsidiaries of Hear.com N.V. (cont'd)
Sivantos NewCo GmbH
1
Germany - 100
audibene GmbH
1
Germany 100 100
audibene GmbH Switzerland 100 100
Audiocare Hearing Experts Malaysia Sdn. Bhd. Malaysia 100 100
audibene B.V. Netherlands 100 100
Ihre Hörgeräte Beratung GmbH Germany 100 100
Hear.com - Simply Good Hearing Inc (dormant) Canada 100 100
Hearing Experts (Thailand) Co. Ltd.
(under liquidation) Thailand 100 100
5.10 Companies in the WS Audiology A/S Group (cont'd) 5.11 Significant events after
the balance sheet date
There have been no adjusting or non-adjusting
events after the balance sheet date that would
be expected to influence the economic decisions
that users make on the basis of these financial
statements.
5.12 Approval of the consolidated
financial statements
The annual report of WS Audiology A/S were
approved by the Board of Directors and author-
ised for issue on 28 November 2022.
1 Sivantos NewCo GmbH was merged into audibene GmbH during 2021/22.
Consolidated Financial Statements
WS Audiology Annual Report 2021/22
124
Overview Strategy and Sustainability Performance Governance Statements Financial statements
CON Note 5.11 CON Note 5.12
Parent Financial Statements
Contents
6 Basis of preparation 129
7 Results of the year 129
7.1 Income taxes 129
8 Operating assets and liabilities 129
8.1 Investment in subsidiaries 129
9 Other disclosures 130
9.1 Outstanding shares 130
9.2 Related parties 130
9.3 Fees paid to the auditor appointed at
the annual general meeting 130
9.4 Fees paid to the Board of Directors 130
9.5 Significant events after the balance sheet date 130
9.6 Approval of the consolidated financial statements 130
Entity information 131
Notes to the Parent Financial Statements
Income Statement 127
Balance Sheet 127
Statement of Cash Flows 128
Statement of Changes in Equity 128
Parent Financial Statements
WS Audiology Annual Report 2021/22
Parent Financial Statements
126
Overview Strategy and Sustainability Performance Governance Statements Financial statements
126
Parent Contents
Parent Financial Statements
EURm Note 30 Sept. 2022 30 Sept. 2021
General and administration expenses (0.9) (0.9)
Operating loss before tax (0.9) (0.9)
Income taxes 7.1 0.2 0.6
Loss for the year (0.7) (0.3)
Income Statement
For the financial year ended 30 September 2022
EURm Note 30 Sept. 2022 30 Sept. 2021
Assets
Investments in subsidiaries 8.1 3,985.5 3,985.5
Total non-current assets 3,985.5 3,985.5
Current income tax receivables 0.5 0.4
Cash 0.2 0.2
Total current assets 0.7 0.6
Total assets 3,986.2 3,986.1
Equity and Liabilities
Share capital 9.1 100.0 100.0
Other reserves 3,885.5 3,885.5
Accumulated losses (2.8) (2.1)
Total equity attributable to the shareholders
of WS Audiology A/S 3,982.7 3,983.4
Deferred tax liabilities 0.1 −
Total non-current liabilities 0.1 −
Other current financial liabilities 0.3 0.4
Amounts due to related parties 3.1 2.3
Total current liabilities 3.4 2.7
Total equity and liabilities 3,986.2 3,986.1
Balance Sheet
As at 30 September 2022
WS Audiology Annual Report 2021/22
Parent Financial Statements
127
Overview Strategy and Sustainability Performance Governance Statements Financial statements
PAR Income Statement PAR Balance Sheet
Parent Financial Statements
EURm Note 30 Sept. 2022 30 Sept. 2021
Operating activities
Loss for the year (0.7) (0.3)
Income tax expense, net (0.2) (0.6)
Cash flow from operating activities before
changes in working capital (0.9) (0.9)
Changes in other liabilities (0.1) 0.3
Change in amounts due to related parties 0.8 0.6
Cash flow from operating activities before
financial items and tax (0.2) −
Income taxes received, net 0.2 0.2
Cash flow from operating activities - 0.2
Net cash flow – 0.2
Cash and cash equivalents, beginning of year 0.2 −
Cash and cash equivalents, end of year 0.2 0.2
EURm
Share
capital
Other
reserve
Accumulated
losses
Total
equity
Equity at 30 September 2020 100.0 3,885.5 (1.8) 3,983.7
Loss for the year − − (0.3) (0.3)
Equity at 30 September 2021 100.0 3,885.5 (2.1) 3,983.4
Loss for the year − − (0.7) (0.7)
Equity at 30 September 2022 100.0 3,885.5 (2.8) 3,982.7
Statement of Cash Flows
For the financial year ended 30 September 2022
Statement of Changes in Equity
For the financial year ended 30 September 2022
WS Audiology Annual Report 2021/22
Parent Financial Statements
128
Overview Strategy and Sustainability Performance Governance Statements Financial statements
PAR Statement of Cash Flows PAR Statement of Changes in Equity
Parent Financial Statements
Notes
6 Basis of preparation
The parent financial statements for WS Audiology A/S have been prepared in accordance with IFRS as
adopted by the European Union (EU) and further requirements in the Danish Financial Statements Act
Large C.
The parent financial statements are presented in Euros (EUR) which is the functional currency of WS Audi-
ology A/S. All values are rounded to the nearest million (EUR) with one decimal, except where indicated
otherwise.
The terminology used in the consolidated financial statements has been applied in the parent's financial
statements to ensure a uniform presentation. The parent's accounting policies on recognition and meas-
urement are generally consistent with those of the Group with reference to Note 1.1 in the consolidated
financial statements.
7 Results of the year
7.1 Income taxes
EURm 30 Sept. 2022 30 Sept. 2021
Income taxes
Current tax for the year 0.2 0.2
Deferred tax for the year − 0.4
Total 0.2 0.6
Reconciliation of effective tax rate
Danish tax rate 22% 22%
Expected income tax benefit 0.2 0.2
Adjustment of tax with respect to prior years − 0.4
Total 0.2 0.6
8 Operating assets and liabilities
8.1 Investment in subsidiaries
EURm 30 Sept. 2022 30 Sept. 2021
Capital contributions to subsidiaries 3,985.5 3,985.5
Group companies are listed on Note 5.10 of the Group financial statements.
Investments in subsidiaries are carried at cost less accumulated impairment losses in the parent's balance
sheet. On disposal of such investments, the difference between disposal proceeds and the carrying
amounts of the investments are recognized in the income statement.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
PAR Note 6 PAR Note 7 PAR Note 8
Parent Financial Statements
Notes
9 Other disclosures
9.1 Outstanding shares
For more information regarding outstanding
shares, please refer to Note 4.1 in the consolidated
financial statements.
9.2 Related parties
T&W Medical A/S is the parent entity and ultimate
parent controlling WS Audiology A/S. There have
been no transactions with subsidiaries or other
related parties during the year besides related
party balances at market rates.
9.3 Fees paid to the auditor appointed at the
annual general meeting
Fees paid to Deloitte for assurance related
services for the year ended 30 September 2022
was EUR 0.2 million (2021: EUR 0.1 million).
9.4 Fees paid to the Board of Directors
Please refer to Note 5.2 in the Consolidated
Financial Statements for fees paid to the Board of
Directors of WS Audiology A/S.
9.5 Significant events after the balance sheet
date
There have been no non-adjusting events after
the balance sheet date that would be expected to
influence the economic decisions that users make
on the basis of these financial statements.
9.6 Approval of the consolidated financial
statements
The financial statements of WS Audiology A/S
were approved by the Board of Directors and
authorised for issue on 28 November 2022.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
PAR Note 9
Parent Financial Statements
Entity information
Entity
WS Audiology A/S
Business Registration No (CVR): 4 029 6 63 8
Founded: 28.02.2019
Registered in: Allerød
Financial year: 01.10.2021 – 30.09.2022
Board of Directors
Marco Gadola, Chairman
Jan Tøpholm, Vice-Chairman
Adam Westermann
Egbertus Adrianus Johannes van Acht
Jes Carøe Munk Hansen
Julian Tøpholm
Karen Naomi Prange
Kasper Grundtvig Knokgaard
Malou Aamund
Marcus Eckart Friedrich Karl Brennecke
Executive Management
Eric Alain Bernard, Chief Executive Officer
Marianne Wiinholt, Chief Financial Officer
Auditors
Deloitte Statsautoriseret Revisionspartnerselskab
Weidekampsgade 6
2300 København S
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Entity information
Consolidated ESG Statements
Contents
10. Basis of preparation 137
10.1 Materiality 137
10.2 Basis of consolidation 137
11.1 Awareness, Accessibility, and Affordability 138
11 Social Performance 138
11.2 Diversity and inclusion 139
11.3 Employee engagement 140
11.4 Talent attraction, development and retention 140
11.5 Health and safety 141
11.6 Human Rights 142
11.7 Community engagement 143
12.1 Waste from production sites 144
12 Environmental Performance 144
12.2 Water consumption 145
12.3 Sustainable materials 145
12.4 Energy Consumption 146
12.5 Climate change 147
12.6 TCFD 149
13.1 Sustainable Supply Chain 152
13 Governance 152
13.2 Business ethics 153
13.3 Product safety 155
13.4 Ethical marketing 156
13.5 Data privacy 156
13.6 Data ethics 156
13.7 Cyber security 156
Notes to the Consolidated ESG Statements
Social Performance 134
Environmental Performance 135
Governance 136
Consolidated ESG Statements
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Consolidated ESG Statements Contents
Consolidated ESG Statements
Social Performance
Note Unit Target FY21-22 FY20-21 FY19-20
Awareness, accessibility, aordability
Additional people that become aware of hearing loss through
WSA online and offline screening platforms
11.1 Number >4 million (2028) 1.5 million 1.0 million 0.5 million
People equipped with hearing devices 11.1 Number >5.5 million (2028) 3.5 million 3.1 million 2.2 million
People equipped with affordable hearing devices 11.1 Number >2 million (2028) 1.2 million 1.1 million 0.8 million
(2025) 540,000 390,000
Diversity and inclusion
Gender on Board of Directors 11.2 Number of
female
2 (2022) 2 2 1
Gender in Group Management Team 11.2 % of female 30% (2025) 25% 15% 8%
Gender in Global Leadership Team 11.2 % of female 35-40% (2025) 25% 27% 28%
Gender in managerial roles 11.2 % of female 45-50% (2025) 39% 37% 38%
Unique nationality in Group Management Team 11.2 Number 9 10 9
Employee engagement
Employee engagement 11.3 Number 8.0 (2025) 7.6 7.2 65%
Talent attraction, development and retention
Total employee turnover 11.4 % 12% (2025) 22.9% 22% 18%
Total voluntary employee turnover 11.4 % 6% (2025) 13.4% 14% 9%
Health and safety
Rate of recordable work-related injuries 11.5 % 0 (target for every year) 1.85 1.96 N/A
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Social performance
Consolidated ESG Statements
Environmental Performance
Note Unit Target FY21-22 FY20-21 FY19-20
Clean production
Hazardous waste 12.1 Kg 53,268 42,987 33,894
Non-hazardous waste 12.1 Kg 807,416 676,305 549,208
Non-hazardous waste sent for recycling 12.1 % 70% 60% N/A
Water consumption 12.2 ton 35,464 32,362 24,947
Sustainable materials
Share of product packaging in FSC paper 12.3 % 100% (2025) 47% - -
12.3
Energy consumption
Total energy consumption 12.4 MWh 58,103 50,411 61,051
Share of renewable electricity 12.4 % 100% (2025) 41% 23% 16%
-
Climate change
Scope 1 GHG emission 12.5 CO
2
-eq t Carbon-neutral (2025) 4,402 3,764 6,940
Scope 2 GHG emission (location-based) 12.5 CO
2
-eq t Carbon-neutral (2025) 12,357 12,066 13,335
Scope 2 GHG emission (market-based) 12.5 CO
2
-eq t Carbon-neutral (2025) 7,703 11,094 13,372
Scope 3 GHG emission 12.5 CO
2
-eq t Set science-based target
across all scopes (2023)
363,723 383,900 463,400
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Environmental performance
Consolidated ESG Statements
Note Unit Target FY21-22 FY20-21 FY19-20
Sustainable supply chain
Share of high-risk suppliers audited for their social, environ-
mental, and ethical management systems and performance
13.1 % 100% (2022) 100% 20% 8%
Suppliers audited for their social, environmental, and ethical
management systems and performance
13.1 Number 15 (2022) 15 5 3
Suppliers with major social, environmental, or ethical on-com-
pliance
13.1 Number 15 4 0
Suppliers establishing improvement plans to rectify non-com-
pliance
13.1 Number 15 4 0
Business ethics and anti-corruption
Substantiated breaches – corruption or bribery incident 13.2 Number 0 0 0
Governance
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ESG Governance
Consolidated ESG Statements
Notes
1
4
2
5
3
6
8
9
10
17
7
11
12
14
13
15
16
10. Basis of preparation
The WSA consolidated ESG Statement has been prepared in accordance with Danish Financial Statements
Act, GRI standards, principles of United Nations Global Compact (UNGC), and Task Force on Climate
Related Financial Disclosures (TCFD).
10.1 Materiality
Prioritizing the Environmental, Social, and Governance (ESG) topics that are material to WSA helps us to
maximize our impact. The consolidated ESG Statement discloses material topics, which are defined based
on dedicated materiality assessments and ongoing stakeholder engagement.
WSA’s materiality assessment is conducted every two years with a systematic double materiality
approach. It means the assessment considers the impact of WSA’s activities on ESG topics, as well as
impact of ESG topics on WSA’s financial performance.
The long list of ESG topics assessed is generated on the basis of Sustainable Development Goals, topics
and future challenges for the sector reported by peers, competitors, and NGOs, relevant laws and regula-
tions, reporting standards (incl. GRI & SASB).
Stakeholders engaged in the materiality assessment include Group Management, select employees,
customers, and suppliers. WSA’s Board of Directors reviews the results of the materiality assessment.
In addition to the materiality assessment conducted in FY20-21, ongoing stakeholder engagement is also
taken into consideration. The ongoing stakeholder engagement in FY21-22 is based on the customer Net
Promotion Score (NPS) survey, global employee sustainability ideation challenge, etc.
10.2 Basis of consolidation
The disclosure of waste and water consumption covers five main production sites of WSA in Denmark,
Singapore, China, Poland, and the Philippines. Other sites are considered to not have significant impact
due to waste and water consumption.
The disclosure of the energy consumption, greenhouse gas emissions, social and governance topics
covers the WSA Group, including production sites, distribution centers, offices, and retail stores.
Material topics
Create positive impact
Awareness of hearing health
Affordability
Access to hearing care
People
Diversity & Inclusion
Employee engagement
Talent attraction, development and retention
Human rights & labor rights
Planet
Circular economy and clean production
Climate action
Environment – innovation & product design
Business ethics and compliance
Business ethics and anti-corruption
Suppliers code of conduct and due diligence
Product safety
Ethical marketing
Anti-trust/anti-competition
Data privacy and cyber security
Governance
Governance and accountability
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 10 ESG Note 10.1 ESG Note 10.2
Consolidated ESG Statements
Section 11 Social Performance
11 Social Performance
11.1 Awareness, Accessibility, and Affordability
At WSA, it is our priority to make people aware of hearing health and hearing solutions that fit personal
needs, make it easy to get hearing solutions wherever people are, and bring relevant hearing solutions to
all people, through technology and commercial innovation.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Additional people that
become aware of hearing
loss through WSA online
and offline screening
platforms
Number >4 million
(2028)
1.5 million 1.0 million 0.5 million
People equipped with
hearing devices
Number >5.5 million
(2028)
3.5million 3.1 million 2.2 million
People equipped with
affordable hearing devices
Number >2 million
(2028)
1.2 million 1.1 million 0.8 million
Almost 1.5 million additional people became aware of their hearing capability through WSA online and
offline platforms, which contributed to an impressive increase of 53% compared to last years' perfor-
mance. This positive result was driven by the organic growth of Shoebox and the acquisition of Koalys,
which doubled the number of tests performed through this channel.
3.5 million people were equipped with our brand's hearing aids. This was a 13% increase compared to last
years' data. This metric depicts the positive impact of the continuous effort to make hearing aids more
accessible to more and more people.
1,2 million people were equipped with affordable hearing aids, which belonged to our low-cost channels
(public, managed care, OTC) and basic segment products. This was a 9% increase compared to last year, a
slightly softer growth rate due to high inflation rates impacting these channels.
§
Accounting principles
Additional people that become aware of hearing loss through WSA online and offline screening plat-
forms – WSA online and offline screening tools capture the number of screening tests completed. Each
test is counted for one person. Number of tests also includes hearing appointments performed by WSA
own retail and a proxy for Managed care, based on people served with hearing devices, assuming a fallout
rate of 30%. The accounting principle of this KPI was updated in FY21-22, and data of FY19-21 are updated
based on new accounting principle.
People equipped with hearing devices – Number of people equipped is calculated based on hearing
devices sales volume and binaural rate.
People equipped with affordable hearing devices – Number of people equipped in low-cost channels
(public, managed care, OTC) and with hearing devices offered in the Basic price segments across all chan-
nels. Basic segment is the entry-level segment in the global WS Audiology product portfolio. The number
is calculated based on hearing devices sales volume in the channels and price segments mentioned above
and binaural rate. The accounting principle of this KPI was updated in FY21-22, and data of FY19-21 are
updated based on new accounting principle.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 11 ESG Note 11.1
Consolidated ESG Statements
Section 11 Social Performance (cont'd)
11.2 Diversity and inclusion
Diversity and Inclusion (D&I) comprise a cornerstone in our culture. We are building upon a culture where
everyone can bring their whole self to work, and we condemn all forms of discrimination.
Through a global D&I Dashboard, monthly reporting of our gender KPIs, and the bi-annual Pulse Survey,
we measure the impact of our actions and maintain an ongoing view of representation, equity, and
employee sentiment.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Gender on Board of Directors Number of
female
2 (2022) 2 2 1
Gender in Group Manage-
ment Team
% of female 30% (2025) 25% 15% 8%
Gender in Global Leadership
Team
% of female 35-40%
(2025)
25% 27% 28%
Gender in managerial roles % of female 45-50%
(2025)
39% 37% 38%
Unique nationality in Group
Management Team
Number 9 10 9
The overall employee composition in FY21-22 was 58% women, 41% men, and remaining 1% employees
decided not to declare their gender. As of September 2022, our Group Management Team had 12 members
representing 9 nationalities and was 25% comprised of women. Our target is to reach 30% women in the
Group Management Team by 2025, 35-40% women in the Global Leadership Team, and 45-50% women in
other managerial roles.
Many of our efforts are now focused on improving the pipeline of future women leaders to ensure that
we achieve our ambition by 2025. Over FY21-22 our global recruitment team attended unconscious bias
training, added D&I as part of the global recruitment training, developed inclusive recruitment guide-
lines, and used AI to maximize inclusive language in our verbal communication. As a result, hiring is
approaching gender parity. However, with the current gap it will still be necessary to push for increased
hiring of women at all managerial levels of WSA.
Moreover, we monitor gender breakdown in attrition and retention on managerial levels. During FY21-22,
we saw total attrition of 8.4% for Male Managers, and 7.8% for Female Managers.
§
Accounting principles
Board of Directors – The highest governance body of WS Audiology.
Executive Board – Consists of Group CEO and Group CFO
Group Management Team – Consists of Group CEO, CXOs and SVPs.
Global Leadership Team – Consists of direct reports to CXOs of grade directors and above, Country GM/
CEO/MD and Country CFOs.
Managerial roles – Consists of all managers with direct reports.
All employees – Consists of all employees, including operators, retail employees, and white-collar staff.
Only employees with a permanent working contract are included.
Unique nationality in Group Management Team – The number of unique nationalities among all Group
Management members.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 11.2
Consolidated ESG Statements
Section 11 Social Performance (cont'd)
11.3 Employee engagement
We aim to ensure high workplace satisfaction and actively engaged employees while reducing employee
turnover. We therefore strive to make WS Audiology a great place to work and grow.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Employee engagement Number 8.0 (2025) 7.6 7.2 65%
The overall engagement score as of FY21-22 was 7.6; an improvement of 0.4 compared to FY20-21, when
the program was first launched. Significant efforts were implemented across the organization both at a
global and country level in building the WSA culture and a great place to work. Over FY21-22, we strength-
ened our people processes on a structural level ensuring our values and behaviors were connected to
everything we do starting with our performance and development processes. We initiated a wide spec-
trum of employee activities such as ‘Going Beyond’ event among our retail employees and ‘Pioneering
Week’ across our key sites in Lynge, Erlangen and Singapore.
We recognize that employees increasingly seek to integrate work and personal life commitments. Our
workplace wellness plans are supported by flexible, part-time and working-from-home arrangements, as
well as comprehensive parental leave and nursing rooms.
§
Accounting principles
Employee engagement – Employee engagement score is a computed score based on the key drivers of
engagement defined by the selected engagement platform. Starting from FY20-21, the employee engage-
ment survey was facilitated by Peakon and based on their methodology. The scoring scale is 0-10. The
survey population taken for FY20-21 is based on 10% representative population of WSA and in FY21-22, we
have expanded the scope to include 100% of all WSA employees for the engagement survey. In FY19-20,
the employee engagement survey was facilitated by the Great Place to Work Institute and based on their
methodology. The scoring scale was 0-100%. The survey was sent to 10% of WSA employees.
11.4 Talent attraction, development and retention
We monitor employee turnover on several levels (total, involuntary and voluntary) as part of the key
business metrics. We aim to create a strong workplace culture where employees find joy in work and grow
their careers. To ensure employee turnover is at a healthy level, we create a workplace that is stable and
forward looking.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Total employee turnover % 12% (2025) 22.9% 22% 18%
Total voluntary employee
turnover
% 6% (2025) 13.4% 14% 9%
The total employee turnover as of FY21-22 was at 22.9% which was 0.9% higher compared to FY20-21. The
total voluntary employee turnover was 13.4% as of the end of FY21-22, 0.6% lower compared to FY20-21.
The increase in total turnover was attributed to pockets of structural changes that took place in parts
of the organization. We monitored the voluntary attrition situation within the organization on a regular
basis and across various segments of the business – region, site, functional and employee groups. This
detailed analysis allowed us to identify specific ‘at-risk’ segments and deep dive where needed for actions
to be taken. We also took reference from the external market benchmarks at the country level to provide
another perspective. Exit interviews were conducted with employees to further understand the rationale
for leaving and identify measures to be put in place.
§
Accounting principles
Total employee turnover – Total number of permanent employees who leave WS Audiology within a
12-month period divided by total number of permanent employees for the current month. Permanent
Employees are defined as the Regular Employees who have working contracts.
Total voluntary employee turnover – Total number of permanent employees who leave WS Audiology
within a 12-month period voluntarily divided by total number of permanent employees for the current
month. Voluntary leavers are defined as employees who resign from WS Audiology.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 11.3 ESG Note 11.4
Consolidated ESG Statements
Section 11 Social Performance (cont'd)
11.5 Health and safety
WS Audiology is committed to providing safe and healthy working conditions for our employees, contrac-
tors, and visitors, and systematically eliminating hazards and reducing risks. Our commitment is outlined
in our Environmental, Health & Safety Policy.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Recordable work-related
injuries
Number 0 (target for
every year)
11 11 10
Rate of recordable work-
related injuries
% 0 (target for
every year)
1.85 1.96 N/A
Fatalities Number 0 (target for
every year)
0 0 0
Rate of recordable work-related injuries decreased by 6% compared to last year. 11 recordable work-re-
lated injuries occurred, which was the same as last year.
The safety of our employees will always be our top priority, so each recordable work-related injury that
occurred was reported to our Environmental Health & Safety (EH&S) team. The EH&S team thoroughly
investigates each case, generated “lessons learned” report, took corrective- and preventive actions,
including changes to systems and procedures if applicable.
Though our work environment is generally safe, certain incidents did unfortunately occur. In June, an
employee slipped, fell, and injured her ankle when walking down a flight of stairs in our Suzhou manu-
facturing site. The investigation revealed that the root cause of the accident was that the employee’s
safety shoes were worn out and she did not hold the handrail. The employee’s ankle was treated immedi-
ately. She returned to work after 90 days of rest. Several preventive actions were taken after the incident
occurred. All employees’ working shoes were checked and replaced where necessary. In addition, a voice
prompter was installed at the entrance of the stairs to remind employees to use the handrails when
walking on the stairs. The EH&S team continues to track the effectiveness of the actions taken.
We continue to maintain ISO 45001-certified health and safety management systems in our main produc-
tion sites in Singapore, China, and Poland. In FY21-22, our headquarter Lynge site, successfully completed
the ISO45001 third party certification audit with a recommendation for certification. We expect to receive
the certification in early FY22-23.
Site FY21-22 FY20-21 FY19-20
China ISO 45001 ISO 45001 OHSAS 18001
Singapore ISO 45001 Not certified OHSAS 18001
Poland ISO 45001 Not certified OHSAS 18001
§
Accounting principles
Recordable work-related injuries – Data is consolidated from production sites in Denmark, Singapore,
China, and Poland. Any work-related injury that results in any one of the following is considered recorda-
ble: 1) Days away from work (lost day cases), 2) Restricted work or transfer to another job, and 3) Medical
treatment beyond first aid, loss of consciousness, or diagnosis of a significant injury or illness by a physi-
cian or other licensed healthcare professional.
Rate of recordable work-related injuries – Data is consolidated from production sites in Denmark, Singa-
pore, China, and Poland. Rate of recordable work-related injuries equals number of recordable work-re-
lated injuries divided by number of hours worked. The number of hours worked is recorded in HR’s IT
system.
Fatality – Number of victims of fatal accidents at work. Data is consolidated from the entire company.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 11.5
Consolidated ESG Statements
Section 11 Social Performance (cont'd)
11.6 Human Rights
The WSA Code of Conduct reflects our commitment to respecting human rights. We support the ten princi-
ples of the United Nations (UN) Global Compact, the UN Guiding Principles on Business and Human Rights
(UNGP), and the International Labor Organization Core Conventions.
1. Salient human rights issues
Overview of salient human rights issues, scope, and issue owners:
Salient human rights issue Own operation Supply chain
Occupational Health, Safety and Security X X
Violence and Harassment X X
Non-Discrimination and Equal Opportunity X X
Freedom of Association and Collective Bargaining X X
Forced Labor X X
Working Conditions: Working Hours, Wages & Benefits X X
Young Workers and Child Labor X X
Grievance Mechanisms and Access to Remedy X X
Access to Healthcare and Right to Science X
Responsible Marketing and Sales X
Product Quality and Safety X
Sourcing from Conflict-Affected and High-Risk Areas X
The salient human rights issues in our own operation are owned by relevant departments, such as EH&S,
HR, Legal, Marketing, and Quality. The supply chain human rights issues are jointly owned by Procure-
ment, Sustainability, and Legal.
2. Human rights due diligence process
We have due diligence processes to identify potential human rights impacts and risks, both within our own
operation, in our supply chain, and through potential M&A.
The salient human rights issues in our own operation and supply chain are identified based on a human
rights assessment conducted by external human rights experts in FY20-21. It covers the full scope of
WSA’s global operations and value chain, from supply chain to sales, marketing, and distribution. The
assessment is based on internal and external stakeholder interviews and documentation review.
The respective issue owners continue to assess, monitor, and mitigate the risks associated with salient
human rights issues in our own operation. We include vulnerable groups in the risk assessment, where
applicable. For example, the health and safety risk assessment conducted in our Singapore production site
in FY21-22 included a specific review for pregnant women and colleagues with disability.
Due diligence of suppliers with respect to human rights is outlined in notes 13.1 Sustainable Supply Chain.
Beginning this year, we have also integrated human rights in our M&A due diligence questionnaire. We will
introduce human rights risk assessment in high-risk countries in FY22-23.
3. Mitigation and remediation
We ensure compliance with national labor legislation, having open and honest relationships with
employees, and respecting their right to be informed, heard, and to voice their concerns in an open and
transparent manner.
In FY21-22, 11 health and safety incidents have been directly reported to EH&S officers. All cases have
been investigated and resolved, with preventive actions taken to mitigate risks. See notes 11.5 for an
example of mitigation actions of a health and safety incident.
The WSA Compliance Portal is also a channel for all internal and external stakeholders to raise their
concerns of human rights violations anonymously. Read more about the WSA Compliance Portal in note
13.2 Business ethics.
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 11.6
Consolidated ESG Statements
Section 11 Social Performance (cont'd)
11.7 Community engagement
Helping others fully participate in life again is a great motivation for many of the employees who work
for us. We adhere to an “every-step-counts” approach and encourage all employees to participate in any
activity that makes a positive difference. We have a broad scope of engagement that has been driven by
the passion of our people. Some examples are:
• The WSA employees together donated €89,146 for the benefit of Ukrainian refugees fleeing the conflict
in their country.
• Our colleagues donated 20 desktop computer units (incl. monitor, CPU, keyboard, and mousepad) to the
schools in impoverished communities in the Philippines.
• Fund raised by the Bloom Hearing Australia team to help kids battle cancer.
• Fund raised by the Widex US team to support those fighting against breast cancer.
• Colleagues in Singapore volunteered to collect trash along the riverside, supporting local NGO.
ESG Note 11.7
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Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated ESG Statements
Section 12 Environmental Performance
12 Environmental Performance
12.1 Waste from production sites
We are committed to protect the environment, as stated in our Environmental, Health and Safety Policy.
As part of our focus on the transition to a circular business model, we endeavor to make efficient use of
resources, reduce waste generated from production sites, increase waste segregation, and send waste to
recycling as much as possible.
Performance FY21-22
Clean production Unit Target FY21-22 FY20-21 FY19-20
Hazardous waste Kg 53,268 42,987 33,894
Hazardous waste sent for
incineration (mass burn)
% 40% 45% 34%
Hazardous waste sent for
other disposal method
% 60% 55% 66%
Non-hazardous waste Kg 807,416 676,305 549,208
Non-hazardous waste sent
for recycling
% 70% (2023) 70% 60% N/A
The share of wastes sent for recycling increased by 10%, which was driven by better waste sorting and
waste recycling by competent vendors. We achieved our target earlier than planned. We will review our
target in FY22-23.
Generation of hazardous waste increased by 24% and non-hazardous waste increased by 19%. The
increase of quantity of waste generated was mainly driven by increased production. The waste intensity
(waste generated per hearing aids produced) remained stable.
We continue to maintain ISO 14001-certified environmental management systems in our main production
sites in Singapore, China, Poland, and Philippines. In FY21-22, our headquarter Lynge site, successfully
completed the ISO14001 third party certification audit with a recommendation for certification. We expect
to receive the certification in early FY22-23.
Site FY21-22 FY20-21 FY19-20
China ISO 14001 ISO 14001 ISO 14001
Singapore ISO 14001 Not certified ISO 14001
Poland ISO 14001 Not certified ISO 14001
The Philippines ISO 14001 ISO 14001 ISO 14001
§
Accounting principles
Hazardous waste – Hazardous waste includes both solid and liquid hazardous waste generated in our
main production sites: Denmark, Poland, Singapore, China, and the Philippines. Hazardous waste is classi-
fied based on the MSDS card information and national regulations. The quantity of the hazardous waste is
based on the forwarding notes to the authorized vendor.
Hazardous waste sent for incineration (mass burn) – Chemical substances are incinerated or used as fu-
els. This includes solid hazardous waste (e.g., electronic/electrical parts containing hazardous substances).
Hazardous waste sent for other disposal method – Neutralization processes (disassembly, composting,
distillation, and transformation) according to local regulations.
Non-hazardous waste – Non-hazardous waste includes defective hearing aids, packaging, and waste from
production activities at main production sites. Depending on the type of non-hazardous waste in question,
the quantity is based on the forwarding notes to the authorized vendor or weight records kept by WSA. To-
tal weight of certain types of non-hazardous waste in China, Singapore, and Poland are estimated based on
samples. The quantity of the non-hazardous waste from the site in China has been included since FY20-21.
Office waste from China and Singapore is not included.
Non-hazardous waste sent for recycling – The amount of non-hazardous waste generated in our main
production sites in Denmark, Poland, Singapore, China, and the Philippines that is sent for recycling.
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ESG Note 12 ESG Note 12.1
Consolidated ESG Statements
Section 12 Environmental Performance (cont'd)
12.2 Water consumption
The production of hearing aids is not water intensive. The consumption of water is driven mainly by office
activities. We keep monitoring the water consumption in main production sites to ensure that malfunc-
tioning (e.g. leakage) of the water supply system is detected early.
Performance FY21-22
Unit FY21-22 FY20-21 FY19-20
Water consumption Ton 35,464 32,362 24,947
Water consumption increased by 10%, mainly driven by increased number of colleagues who returned to
office after COVID-19.
§
Accounting principles
Water consumption – Overall usage based on water billing information or own meters at our main pro-
duction sites in Denmark, Poland, Singapore, China, and the Philippines.
12.3 Sustainable materials
We put high focus on using sustainable materials to produce our hearing aids and packaging. We have
an internal policy to work toward phasing out virgin plastics, introduce FSC-certified paper into product
packaging, and optimize shipping packaging to reduce waste.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Share of product packaging
in FSC paper
% 100% (2025) 47% - -
We support sustainable forest management by switching to FSC paper in our packaging. All the new prod-
ucts developed since March 2022 will be packed in FSC paper. With this transition already underway, 47%
of paper packaging material sourced in this year were made of FSC paper.
§
Accounting principles
Share of product packaging in FSC paper – Total number of packaging includes user guide, manual, leaf-
let, carton box and packaging box. Each piece is counted as one packaging item. The share is calculated
based on number of packaging in FSC paper divided by total number of packaging.
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ESG Note 12.2 ESG Note 12.3
Consolidated ESG Statements
Section 12 Environmental Performance (cont'd)
12.4 Energy Consumption
Energy consumption at WSA is driven mainly by electricity consumption, heating and cooling in production
sites, offices, and retail stores. In addition, we also consume fossil fuels for company cars used for sales
trips.
Increasing energy efficiency and switching to renewable electricity are the key drivers for us to achieve
our science-based ambitious decarbonization targets.
Performance FY21-22
Energy consumption Unit Target FY21-22 FY20-21 FY19-20
Total energy consumption MWh 58,103 50,411 61,051
Fuel consumption MWh 19,799 16,415 23,434
Electricity, heating, and
cooling consumption
MWh 38,304 33,996 37,617
Share of renewable electricity % 100% (2025) 41% 23% 16%
Total energy consumption increased by 15%, including 21% increase in company car fuel consumption and
13% increase in electricity, heating, and cooling consumption. The increase of company car fuel consump-
tion was driven by resumed customer visits post COVID-19 restrictions. The increase in electricity, heating,
and cooling was driven by opening of new retail and office sites, and better estimation of heating from
natural gas based on more actual data.
WSA is committed to reducing energy consumption through optimization, innovation, and assets upgrade.
WSA’s Singapore site was selected for an energy site audit to identify opportunities for energy savings. We
performed an energy assessment, understanding load profiles and energy correlation to identify energy
conservation measures (ECM). Potential energy/CO
2
savings of about 10% of the total consumption can
be achieved if the measures are implemented. A roadmap for this operation is in progress, while an ECM
selection and prioritization strategy is also being developed, depending on the complexity and impact of
the projects. The energy savings will not only contribute to the overall CO
2
neutrality target, but will also
benefit the company financially.
We continue to seek opportunities to install onsite renewable energy. The wind turbine in our manufac-
turing site in Lynge generated 2,167 MWh. Solar panels in China have been producing power since June,
and as of September 30th, the solar panels have produced 97 MWh. Solar panels in our TruHearing site in
USA produced 1,171 MWh. These onsite renewable energy assets power our production during the week.
Over the weekend, the additional renewable electricity is sent to the grid to support the local community.
Where onsite renewable energy is not feasible, such as in our manufacturing site in Singapore and many
small offices and retail stores, we purchase renewable energy certificates.
Our manufacturing sites in Denmark, China, Singapore, and Poland and our R&D center in Germany are
powered by 100% renewable electricity. This is achieved through onsite renewable and energy attribute
certificates. Due to the limited quantity of energy attribute certificates available in Singapore, we
purchased certificates from Vietnam and Thailand to balance our consumption in Singapore. This supports
the green transition of the ASEAN region overall.
§
Accounting principles
Total energy consumption – Total energy consumption includes fuel, electricity, district heating, and cool-
ing consumed on sites where WSA has operational control.
This year we increased the amount of primary data collection, emissions from 62% of the non-retail sites
and 7% of the retail sites are based on energy bills. Emissions from 38% of the non-retail sites and 93% of
the retail sites are calculated based on primary data from other sites. 97% of the estimated emissions were
calculated with data from the same country and the remaining 3% from global averages.
Fuel consumption – This includes fuel consumption in onsite stationary combustion (e.g., heating boilers),
and in process (e.g. back-up electricity generators), and company-owned or leased vehicles for business
trips. The company fleet is comprised of vehicles owned or controlled by WSA that are used for transpor-
tation and business trips. The leased cars that are paid for by WSA but used by employees for commuting
are not in scope. Only primary data was used to calculate for fuel consumption.
Electricity, heating, and cooling consumption – This includes electricity, district heating, and cooling
consumption.
Share of renewable electricity – This is calculated as renewable electricity consumption divided by total
electricity consumption.
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ESG Note 12.4
Consolidated ESG Statements
Section 12 Environmental Performance (cont'd)
12.5 Climate change
1. Greenhouse gas emissions
WSA is committed to reducing our own greenhouse gas emissions, working closely with key suppliers to
reduce their emissions, and improving circularity of our products.
We are committed to the Science-Based Targets initiative (SBTi). We submitted our emissions reduction
targets in scope 1, 2, and 3 to SBTi for approval on 1st of July 2022.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Scope 1 GHG emissions CO
2
-eq t Carbon-neutral
(2025)
4,402 3,764 6,940
Scope 2 GHG emissions
(location-based)
CO
2
-eq t Carbon-neutral
(2025)
12,357 12,066 13,335
Scope 2 GHG emissions
(market-based)
CO
2
-eq t Carbon-neutral
(2025)
7,703 11,094 13,372
Total Scope 3 GHG emissions CO
2
-eq t Set science-
based target
across all
scopes (2023)
363,723 383,900 463,400
Overall GHG emissions, including all scopes, reduced 6% compared to FY20-21. Market-based scope 2
emissions decreased by 31% due to an increased share of renewable energy. GHG scope 1 emissions
increased 17%, mainly driven by resumed customer visits post COVID-19 restrictions.
2. Scope 3 emissions
Scope 3 categories Unit FY21-22 FY20-21
Purchased goods and services CO
2
-eq t 265,960 291,369
Capital goods CO
2
-eq t 3,499 2,034
Fuel- and energy-related activities, not included in scope 1 or
scope 2
CO
2
-eq t 3,568 3,353
Upstream transport CO
2
-eq t 57,319 64,081
Waste generated in operations CO
2
-eq t 3,496 615
Business Travel CO
2
-eq t 6,889 451
Employee commuting CO
2
-eq t 20,400 20,400
Use of sold products CO
2
-eq t 1,971 1,069
EoL of sold products CO
2
-eq t 621 528
GHG scope 3 emissions decreased 5% across categories compared to FY20-21. Higher accuracy in our
accounting has driven this decrease.
Emissions previously accounted for in Purchased goods and services have been more accurately distrib-
uted to other categories, such is the case of Capital goods and Waste generated in operations.
The increase in emissions from the Business travel category is driven by the change in accounting meth-
odology, moving from spend-based to emission reports from our travel agencies. Increases in Use of sold
products and EoL of sold products are attributed to an increase in sales compared to FY20-21.
WSA works with numerous suppliers to manufacture and deliver HAs to our customers. Suppliers of parts
and components contribute to most of our scope 3 emissions. We have submitted an ambitious scope 3
emission reduction target to SBTi. We will engage with suppliers with high amount of spend that trans-
lates into significant percentage of our scope 3 emissions. Our goal is to work closely with these suppliers
towards emissions disclosure and reduction.
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ESG Note 12.5
Consolidated ESG Statements
Section 12 Environmental Performance (cont'd)
From the initial engagement done with the selected suppliers, the maturity of the suppliers varies. Some
suppliers are aware of the existence of science-based targets. These suppliers already have plans to
improve the sustainability of their operations, and some are even considering making their own commit-
ment to science-based targets. Some suppliers needed more assistance and guidance on how to improve
the sustainability aspect of their operations and goods sold to WSA. Based on the insights and feedback
collected from the engagement process, WSA will select feasible opportunities to further explore the
possibilities of reducing our scope 3 emissions.
§
Accounting principles
Greenhouse gas emissions – This GHG inventory was compiled in accordance with the WRI/WBCSD
Greenhouse Gas (GHG) Protocol. The organizational boundary applied to consolidate WS Audiology’s
emissions was the operational control approach. No sites have been excluded from the inventory bounda-
ry over the reporting period FY21-22.
More than 1,100 WSA sites are in Scope based on the operational control approach. This includes more
than 100 non-retail sites and over 1000 retail shops. This year we increased the amount of primary data
collection, emissions from 62% of the non-retail sites and 7% of the retail sites are based on energy bills.
Emissions from 38% of the non-retail sites and 93% of the retail sites are calculated based on primary data
from other sites, from which 97% of the estimated emissions were calculated with data from the same
country and the remaining 3% from global averages.
Scope 1 GHG emissions – Activity data and emissions include onsite stationary combustion of fossil-fuel
burning equipment (e.g., heating boilers) or process-based emissions (e.g., back-up electricity genera-
tors), company-owned or leased vehicles for business trips. Fugitive emissions associated with the use of
HVAC equipment are included here.
Scope 2 GHG emissions (location-based) – Following the Scope 2 Guidance from the GHG Protocol, WSA
uses the national or regional emissions factors for indirect (scope 2) emissions defined by the following
methods in each relative geography where WSA operates:
• Department for Environment, Food & Rural Affairs (DEFRA) CO2
• Emissions from Fuel Combustion and Refrigerants
• For US sites: US EPA Emissions & Generation Resource Integrated Database (eGRID)
• For UK sites: Department for Environment, Food & Rural Affairs (DEFRA) conversion factors
• For remaining countries: International Energy Agency (IEA) Emissions Factors database.
Scope 2 GHG emissions (market based) – Based on the latest available emissions factors, published by the
electricity supplier(s), and relating specifically to the carbon intensity of the electricity procured.
• Supplier-specific emissions factors for the reporting year 2020-21 were collected, along with support-
ing evidence (such as Energy Attribute Certificates, supplier invoices, etc.) and checked against quality
criteria as described in the GHG Protocol Standard requirements for Scope 2 reporting. Supplier-specific
emissions factors were collected from sites in Canada, Finland, Germany, Italy, Japan, the Netherlands,
Singapore, Slovenia, South Korea, and Switzerland. For the remaining sites, following GHG protocol
hierarchy, residual mix or location-based emissions factors were used according to availability.
Scope 3 GHG emissions – Scope 3 emission are calculated based on hearing aids life cycle assessments
results from our main brands, transportation & logistics providers carbon emission reports, and travel
carbon emission reports in combination with the Quantis Tool. Scope 3 covers all company activities that
are not covered by scope 1 and 2 emissions.
Due to the nature of WSA’s operation, only three greenhouse gases are considered to be released in signif-
icant quantifies for tracking: CO2, CH4, and N2O. Global warming potentials (GWPs) are taken from the
Intergovernmental Panel on Climate Change (IPCC) IPCC Fifth Assessment Report (AR5) using 100-year
values. For the current inventory the following values are used: CO2 GWP = 1, CH4 GWP = 28, N2O GWP =
265.
FY19-20 is the base year for GHG emissions reporting and target setting.
12.5 Climate change (cont'd)
§
Accounting principles (cont'd)
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Consolidated ESG Statements
Section 12 Environmental Performance (cont'd)
12.6 TCFD
We have performed a first alignment with Task Force on Climate-related Disclosures (TCFD), to assess risks
and opportunities posed by climate change and the transition to a low-carbon economy. Focusing on core
elements of our organizational operation: governance, strategy, risk management, metrics, and targets.
Governance
The Board of Directors has the ultimate responsibility of outlining the overall vision, strategy, and objec-
tives of the company.
The Sustainability Committee reports to the Board of Directors in sustainability matters including
climate-related risks and opportunities. The committee meets on a monthly basis and is comprised of the
Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operations Officer (COO), Chief Quality &
Regulatory Officer (CQRO), Chief Retail Officer (CRO), and Chief Human Resources Officer (CHRO).
The Global Head of Sustainability, supported by other members from the sustainability core team,
reports to the Sustainability Committee and is responsible for the execution of the climate strategy and
climate-related issues. The team reports to the Operations Steering Committee before escalating topics
to the Sustainability Committee. The Operation-Sustainability Steering Committee includes the COO and
CQRO.
The sustainability core team is the multi-disciplinary department responsible of developing and over-
seeing WSA’s sustainability strategy and involving the required internal and external stakeholders to
assess climate-related risks and opportunities.
Board of Directors
Sustainability Committee
Sustainability Team
Operations Steering Committee
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ESG Note 12.6
Consolidated ESG Statements
Section 12 Environmental Performance (cont'd)
High
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Risk Management
We have acknowledged the climate-related risks and opportunities that are relevant for our organization
and performed an initial evaluation of transition and physical risks in the short (5-10 years), mid (10-20
years), and long (>20 years) term across our geographical locations.
To increase the degree of robustness of our climate-related risk management strategy, transition impacts
were evaluated following two scenarios from the International Energy Agency (IEA), representing a 1.5-2°C
and a business-as-usual pathway. Specifically, the Sustainable Development Scenario (SDS) with a Net
Zero Emissions by 2050 (NZE) supplement and the Stated Policies Scenario (STEPS). Physical impacts were
assessed based on two Shared Socioeconomic Pathway (SSP) scenarios by the Intergovernmental Panel
on Climate Change (IPCC). SSP1-2.6 for a 1.5-2°C trajectory in line with our Science-Based Target ambition,
and SSP5-8.5 where an increase of 4°C in global temperatures is expected by 2100.
All climate-related transition and physical risks were identified through a qualitative assessment involving
internal subject-matter experts and considered potential implications in finance, business interruption,
mitigation time, supply chain impact, and likelihood for our company. Each potential risk/opportunity was
evaluated considering WSA’s level of preparedness for potential mitigation/ implementation. Possible
responses on the short, medium, and long term were identified for each to set a strategy moving forward.
The climate-related key risks identified are related to WSA´s supply chain disruptions, which are addressed
in the company´s overall risk management strategy. Any possible risks are managed following a process
of identification, assessment, recording, mitigation and monitoring. Read more on risk management on
page 45.
12.6 TCFD (cont'd)
Transition Risk
1
Increased pricing of GHG emissions
2
Enhanced reporting obligations
3
Increased regulation of existing products
4
Exposure to litigation
5
Substitution of existing products with lower emis-
sions options
6
Unsuccessful investment in new technologies
7
Costs to transition to lower emissions technology
8
Changing customer behavior
9
Uncertainty and instability in market
10
Increased cost of raw materials
11
Shifts in consumer preferences
12
Stigmatization of sector
13
Increased stakeholder concern or negative feedback
Physical Risk
14
Increased severity of extreme weather events
15
Changes in precipitation patterns and extreme variability in weather patterns
16
Rising mean temperatures
17
Rising sea levels
Impact
Likelihood
Low
High
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Consolidated ESG Statements
Section 12 Environmental Performance (cont'd)
Strategy
The resiliency of our climate strategy, including GHG emissions reduction and energy-related goals,
reduces our risks related to fluctuations in carbon and energy markets. Our product portfolio manage-
ment, sector, and business model mitigate risks of transition to lower-carbon technology and reputa-
tion-related risks such as sector stigmatization.
Physical and transition risks with potential implication in our supply chain in the mid- to long-term related
to raw materials shortages (battery minerals) and extreme weather events are tackled by our circularity
strategy, and diversification of production locations and suppliers.
Currently, any transitional, acute, or chronic disruption is addressed by our Business Continuity Plan, and
any damages to company property are mitigated through our insurance system, for which exposure to
climate-related events was modeled through location-specific data.
WSA´s main opportunities are related to energy and resource efficiency, including energy efficiency in
operations and production, renewable energy sources, and decentralization of energy generation. These
opportunities are all addressed by our overall sustainability strategy and climate goals, which are focused
on renewable energy transition. A more robust circularity and energy efficiency strategy will be developed
in 2023.
Metrics and Targets
Energy and carbon-related risks are addressed by our renewable energy and GHG emissions reduction
targets in all scopes. KPIs related to energy and material efficiency will be developed along our Circular
Economy strategy in 2023.
12.6 TCFD (cont'd)
High
1
2
3
4
5
6
7
Impact
Likelihood
Low
High
Opportunities
1
Use of more efficient modes of transport
2
Use of more efficient production and distribution processes
3
Use of recycling, reduced water consumption
4
Use of lower-emission sources of energy
5
Shift toward decentralized energy generation
6
Use of supportive policy incentives
7
Resource substitutes/diversification
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Consolidated ESG Statements
Section 13 Governance
13 Governance
13.1 Sustainable Supply Chain
A resilient and sustainable supply chain is critical for the success of WSA. We are taking steps to improve
our natural resource utilization and adoption of renewable energy in our operations (refer to 12.2, 12.3
and 12.4). To show our commitment in making our Supply Chain more sustainable, we have submitted
our proposal to Science-Based Target initiative (refer to 12.5). We work with our suppliers to promote
and ensure fair labor standards, explore ways to reduce our environmental impact, and maintain ethical
business practices.
Our supply chain consists mainly of direct material suppliers and indirect suppliers. Direct material
suppliers provide us with electronic components, electronic manufacturing services, packaging, resins,
and accessories. Indirect suppliers include utilities, professional consulting services, real estate owners,
and other service providers. Our main suppliers are based in and operate from Europe, Americas, and Asia
& Others. From a spend perspective, approximately 43% are in Europe, 21% are in Americas, and 36% in
Asia & Others.
To further improve the sustainability of our supply chain, we have also initiated discussions with our
suppliers to identify ways to systematically reduce our Scope 3 emissions. By engaging our suppliers and
onboarding them with us on this meaningful journey, we increase our prospects of incorporating sustain-
ability factors into our supply chain and the hearing aids that our customers use.
Through the Sustainable Supply Chain Program, we conduct due diligence of our suppliers with the aim of
ensuring their compliance to the WSA Supplier Code of Conduct.
The due diligence process starts with risk assessment. We identify suppliers at high risk of non-compli-
ance with our Code of Conduct based on the country, category, spend, and business relations on annual
basis. High-risk suppliers are audited by third-party auditors every two years. All the salient human rights
issues are covered in both the risk assessment and audit.
Based on the audit, suppliers with non-compliances must improve to become compliant.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Share of high-risk suppliers
audited for their social,
environmental, and ethical
management systems and
performance
% 100% (2022) 100% 20% 8%
Suppliers audited for their
social, environmental, and
ethical management systems
and performance
Number 15 (2022) 15 5 3
Suppliers with major social,
environmental, or ethical
non-compliance
Number 15 4 0
Suppliers establishing
improvement plans to rectify
non-compliance
Number 15 4 0
In FY21-22, we planned and conducted Code of Conduct audits of 15 high-risk suppliers. Besides auditing
100% of high-risk suppliers identified in this financial year, we also conducted some audits that were
planned for last year but postponed due to COVID-19 restrictions. The major non-compliances are related
to health and safety and working hours. The suppliers have established relevant improvement action
plans to rectify major non-compliances. We are committed to working closely with the suppliers to drive
improvements.
In addition, we further improved the risk criteria by updating the risks of the product and service catego-
ries.
Cobalt is used in lithium-ion batteries that form an integral part of electrical equipment. Demand for
cobalt is therefore expected to increase significantly over the coming years. Cobalt is extracted in mech-
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ESG Note 13 ESG Note 13.1
Consolidated ESG Statements
Section 13 Governance (cont'd)
13.1 Sustainable Supply Chain (cont'd)
anized and artisanal mining operations. Multiple reports have highlighted concerns over social and envi-
ronmental impacts of cobalt extraction, including child labor and unsafe working conditions in artisanal
cobalt mining. We have actively conducted surveys within our battery supply chain per OECD due diligence
guidelines and ensured transparency, and no illegal cobalt smelters have been reported within our supply
chain.
Similarly, we are planning to conduct the Conflict Mineral survey throughout the supply chain to ensure
supply chain transparency. We will also be implementing standard operating procedure and workflow for
Conflict Minerals reporting management along with our Chemical In Products management system. This
updated management system will enable us to ensure our supply chain and our products are compliant
with environmental regulations and also sustainable.
§
Accounting principles
Share of high-risk suppliers audited for their social, environmental, and ethical management systems
and performance – Number of high-risk suppliers audited divided by number of high-risk suppliers iden-
tified.
Suppliers audited for their social, environmental, and ethical management systems and performance
– Number of suppliers that are audited against WSA 's Code of Conduct. The scope of this audit includes
human rights, labor rights, environment, and anti-corruption.
Suppliers with major social, environmental, or ethical non-compliance – The suppliers with major
non-compliances based on the Code of Conduct audits.
Suppliers establish improvement plans to rectify non-compliance – Suppliers with significant non-com-
pliances are either terminated or put on improvement plans to rectify the non-compliances.
13.2 Business ethics
1. Anti-corruption
We are committed to working against corruption in all its forms, by always acting professionally, fairly,
and with integrity. We take a zero-tolerance approach to bribery, corruption, and fraud. This is entrenched
in our Code of Conduct, which guides the organization and employees in conducting their day-to-day
business.
Anti-corruption considerations are integral to our business partners’ handling processes, and we continue
to ensure that our partners acknowledge and respect their responsibility when doing business with us.
The main risks related to our activities include employee- and business partner violation of our anti-cor-
ruption commitment and the resulting potential legal and financial consequences. We have established
multiple measures, such as vetting of relevant suppliers and ad hoc evaluations, to ensure zero tolerance
of any corrupt behavior in our business.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Substantiated violations –
corruption or bribery incident
Number 0 0 0
Substantiated violation of corruption or bribery incident remains zero.
In this financial year, we developed comprehensive training for relevant employees to strengthen their
knowledge in these areas and equip them with the tools to handle or escalate issues.
We continue to make efforts to strengthen these processes in line with applicable laws and regulations.
Central to our anti-bribery and corruption governance process are detailed policies and training provi-
sions for our relevant employees, as well as a publicly accessible whistle-blowing channel.
The Gifts, Entertainments, Donations & Speakers policy sets out clear guidelines on giving and receipt of
gifts and hospitality items. This includes charitable donations and sponsorships, which will go through
a review process in accordance with the policy where recipients are subject to appropriate due diligence
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ESG Note 13.2
Consolidated ESG Statements
Section 13 Governance (cont'd)
13.2 Business ethics (cont'd)
before approval by relevant parties in authority. The Conflict of Interest policy provides binding principles
to be complied with. Declarations apply to all relevant employees and managers have the responsibility of
ensuring conflict of interests are appropriately addressed. WSA also has an Anti-money Laundering policy
which guides employees to recognize the WSA Group's legal obligations and their personal obligations.
§
Accounting principles
Substantiated breaches involving corruption or bribery incidents – Number of corruption or bribery
incidents that are substantiated.
2. Anti-competitive behavior
We adhere to antitrust laws and ensure fair competition, achieving our market position through the
outstanding quality of our products as well as our performance. We do not discuss any antitrust-related
information with competitors, suppliers, or customers. Furthermore, we do not participate in any discus-
sions or enter into agreements with competitors that could result in a restriction of competition, or use
our position in the market to discriminate against others through unfair business practices. In addition,
our ethical guidelines in competitive intelligence govern us when collecting information about competi-
tors. Our approach is aligned with Strategic & Competitive Intelligence Professionals (SCIP).
As we expand our global footprint, we continuously assess our market position across the markets in
which operate. We also continue to develop our employees through training to ensure that they are
familiar with the relevant laws and regulations and commit to conducting business fairly and in line with
our Code of Conduct.
3. Whistleblower mechanism
We foster an environment where our employees can ask questions and raise issues or concerns about
business ethics and other topics without fear of retaliation. Employees can raise concerns to their
managers, Local Compliance Advisor, Regional Compliance Officer, and Human Resources Department.
At the start of the financial year, we worked with an independent third-party service provider of a whistle-
blower software to launch a whistleblowing system, the WSA Compliance Portal. The portal allows whistle-
blowers (incl. both internal and external stakeholders) to report anonymously 24-7, provides translations
in 15 languages, and is externally hosted in a secured environment by the independent third-party service
provider. The portal replaced the previous ombudsman setup that had limitations in language and acces-
sibility, as the ombudsman was based in Germany. Issues that can be raised via the portal include topics in
WSA Code of Conduct, such as corruption, harassment, discrimination, human rights, environment, etc.
In addition to the new WSA Compliance Portal, employees can also raise concerns to their managers,
Human Resources Department, Local Compliance Adviser, Regional Compliance Officer, or through the
compliance mailbox at tell-us@wsa.com.
We follow up on every reported violation with internal compliance investigations when justified by
supporting evidence. Upon completion of an investigation, we propose solutions for any identified issue
and ensure that appropriate actions are carried out. We also respond to incidents of employee misconduct
with appropriate disciplinary action.
All emails and reporting are always kept confidential to the extent permitted by law and will only be
shared on a need-to-know basis with the required person(s) investigating and/or deciding on the reported
potential violation.
We continuously strive to improve our whistleblower mechanism by reviewing its effectiveness while
aligning with best practices in the countries where we operate.
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Consolidated ESG Statements
154
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Consolidated ESG Statements
Section 13 Governance (cont'd)
13.3 Product safety
As a medical device company, we understand that product safety and information must never be compro-
mised, as quality issues and unsafe use of our hearing aids or other devices could lead to consumer injury.
Our quality policy outlines our commitment to high-quality and safe hearing solutions.
Performance FY21-22
Unit Target FY21-22 FY20-21 FY19-20
Class I recalls Number 0 0 0 0
Class II recalls Number 0 0 0 0
Number of class I and class II recalls remains zero.
WS Audiology’s product risk management procedure is ISO 14971-certified. We are committed to mini-
mizing residual risks as far as reasonably possible to avoid serious injuries.
Our ISO 13485-certified multi-site Quality Management System (QMS) allows global governance and local
adaptations to ensure efficient quality management throughout the WS Audiology Group.
Our products are registered according to local regulations. We continuously survey requirements and take
them into consideration when we develop new products.
• Our manufacturing sites in China, Denmark, Germany, the US, and Singapore have all successfully
passed US Food and Drug Administration (FDA) audit inspections since 2018.
• WS Audiology was the first hearing aid manufacturing company that was successfully audited under the
EU’s new Medical Device Regulation (MDR) and received the new certificates in Q1/2020.
Our post-market surveillance system enables us to follow and manage complaints. In the event of safety
issues, we have a procedure to report to authorities, and if necessary, recall products.
Health and safety impacts are assessed for improvement for all our product categories.
In addition to implementing the Product Related Environmental Protection (PREP) procedure to comply
with RoHS and REACH regulations, we have also extended our focus to comply with UK REACH, UAE RoHS,
and few other regional environmental regulations. In coming years, we will keep focusing on strategic and
systematic approach to comply with all current and upcoming regulations with efficient data.
Our quality management systems in our manufacturing sites in Denmark, Singapore, China, Poland,
Mexico, and USA are ISO 13485-certified.
§
Accounting principles
Class I recalls – A situation in which there is a reasonable probability that the use of- or exposure to a
volatile product will cause serious adverse health consequences.
Class II recalls – A situation in which use of- or exposure to a volatile product may cause temporary or
medically reversible adverse health consequences or where the probability of serious adverse health
consequences is remote.
WS Audiology Annual Report 2021/22
Consolidated ESG Statements
155
Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 13.3
Consolidated ESG Statements
Section 13 Governance (cont'd)
13.4 Ethical marketing
To ensure the veracity of marketing claims, we maintain a claim management practice that establishes the
claim type and required data substantiation. Each claim and supporting substantiation is listed in a plat-
form evidence document. Furthermore, each product launch is documented with a clinical evaluation.
We ensure that the product safety manual for each product is included in the package to every consumer
who purchases our hearing devices.
We have zero incidents of non-compliance with regulations and/or voluntary codes concerning product
and service information and labeling.
13.5 Data privacy
We strive to promote a corporate culture of responsibility, respect, and trust for personal data and the
privacy rights of individuals by complying with all applicable laws wherever we do business. The WSA Code
of Conduct includes our policy on data privacy.
Through routinely reviewed processes and policies, WS Audiology ensures that personal data is collected,
stored, processed, disclosed, protected, secured, and destroyed properly and in accordance with good
data protection practices. Individuals exercising their rights to rectify, change, or be informed about what
data WS Audiology processes from and about them can exercise those rights in compliance with relevant
legal requirements.
As data privacy regulations continue to evolve, we closely monitor these developments to quickly adapt
and apply changes to our existing processes as needed. We also subject our new and existing processes
to regular reviews in order to ensure that they are relevant and have the appropriate measures for data
privacy.
WSA has in 2022 adopted a Policy on Data Ethics that serves as a framework for the ethical management of
data within the WSA group. WSA hereby supplements its general commitment to integrity and compliance
- not only in relation to personal data but in relation to any kind of data processed by WSA. The Data Ethics
Policy applies globally, and it is mandatory for management and employees in the WSA group to comply
with the policy.
13.6 Data ethics
WSA has in 2022 adopted a Policy on Data Ethics that serves as a framework for the ethical management of
data within the WSA group. WSA hereby supplements its general commitment to integrity and compliance
- not only in relation to personal data but in relation to any kind of data processed by WSA. The Data Ethics
Policy applies globally, and it is mandatory for management and employees in the WSA group to comply
with the policy.
13.7 Cyber security
Secure, reliable, and precise handling of information is essential to the success of our business. Risk
management and IT security are therefore an integral part of WSA Strategy and are subject to an over-
sight by the Group Management Audit Committee and Board of Directors Cybersecurity Committee.
As member of the WSA board, Jes Munk Hansen chairs the cyber security committee. Jes Munk Hansen
receives ongoing briefings from relevant cyber and security organizations about the current threat land-
scape and intelligence and comes with extensive experience, including the application of the US Depart-
ment of Defense, Cybersecurity Maturity Model Certification (CMMC).
Key objectives are:
• We ensure the security of corporate information and critical application and infrastructure through a
risk-based approach and in close collaboration with our business partners.
• We maintain high level of cybersecurity aware among our employee via recurrent trainings, awareness
campaigns and drills
• We work with our Cybersecurity partners to ensure our detection and response capabilities are up to
date to face evolving cybersecurity threats.
WS Audiology Annual Report 2021/22
Consolidated ESG Statements
156
Overview Strategy and Sustainability Performance Governance Statements Financial statements
ESG Note 13.4 ESG Note 13.5 ESG Note 13.6
GRI index
Disclosure
Number Aspect Page or comments
Organizational prole
102-1 Name of the organization p1
102-2 Activities, brands, products,
and services
p13-36
102-3 Location of headquarters p5
102-4 Location of operations p5
102-5 Ownership and legal form Privately held stock corporation
102-6 Markets served p5
102-7 Scale of the organization p5
102-8 Information on employees
and other workers
WS Audiology Group employs 12,431 employees across all
entities and countries. The following breakdown data in-
cludes Audibene, TruHearing, CommuniCare and Shoebox.
3 main regions - Asia Pacific, Americas, and EMEA. We em-
ployed 3,779 employees in APAC (99% permanent and 1%
temporary), 4,147 employees in Americas (98.6% permanent
and 1.4% temporary) and 4,505 employees in EMEALA-CA
(96.5% permanent and 3.5% temporary).
3 main groups of employees - White Collars (63%), Manufac-
turing
Operators (14%) and Retail Employees (23%). 12,183 perma-
nent employees, incl. 42.2% male and 57.8% female. 248 tem-
porary employees, incl. 48.9% male and 51.1% female. 11,140
full time employees, incl. 43.9% male and 56.1% female. 1291
part time employees, incl. 29.4% male and 70.6% female.
Disclosure
Number Aspect Page or comments
Organizational prole (cont'd)
102-9 Supply chain Note 13.1
102-10 Significant changes to
the organization and its
supply chain
Note 13.1
102-11 Precautionary Principle or
approach
We are committed to the UNGC Ten Principles, which in-
cludes the precautionary approach.
Strategy
102-14 Statement from senior
decision-maker
p6
102-15 Key impacts, risks, and
opportunities
p44
Ethics and integrity
102-16 Values, principles, standards,
and norms of behavior
Note 13.2
102-17 Mechanisms for advice and
concerns about ethics
Note 13.2
Governance
102-18 Governance structure p42
102-19 Delegating authority p42
WS Audiology Annual Report 2021/22
GRI index
158
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
Governance (cont'd)
102-20 Executive-level responsibility
for economic, environmental,
and social topics
Chief Quality and Regulatory Affairs Officer is chiefly re-
sponsible for Sustainability (incl. economic, environmental,
and social topics). This role reports directly to the President
and CEO.
102-21 Consulting stakeholders on
economic, environmental, and
social topics
Note 10.1
102-22 Composition of the highest
governance body and its
committees
As of 09/30/2022, average tenure in the Board of Directors
was 3 years. 9 members were of the age group of 30-60, 1
member of the age group above 60. No directors represent
other under-represented social groups.
One member of Board of Directors closely guides WS Audio-
logy on sustainability.
102-23 Chair of the highest govern-
ance body
p48
102-24 Nominating and selecting
the highest governance
body
The members of the Board of Directors are chosen based
on their experience and qualifications as well as to achieve
diversity in regard to nationality and gender mix.
Disclosure
Number Aspect Page or comments
Governance (cont'd)
102-25 Conflicts of interest
Conflict of Interest Policy. A process has been established to
ensure that conflicts of interest are avoided. Each WS Audi-
ology employee has a duty to make business decisions in the
interest of WS Audiology and not be influenced by their own
personal interests. For senior employees, the disclosure will
be done on an annual basis. Conflicts of interest for senior
employees are disclosed to Group Management and/or the
Board of Directors.
WSA Code of Conduct
102-26 Role of highest governance
body in setting purpose,
values, and strategy
p42-43
102-27 Collective knowledge of
highest governance body
p48-49
102-28 Evaluating the highest
governance body’s
performance
p42-43
102-29 Identifying and managing
economic, environmental,
and social impacts
Note 10.1
102-30 Effectiveness of risk
management processes
p44-46
102-31 Review of economic, environ-
mental, and social topics
Note 10.1
102-32 Highest governance body’s
role in sustainability reporting
p43
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
159
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
Governance (cont'd)
102-33 Communicating critical con-
cerns
p43
102-34 Nature and total number of
critical concerns
None
102-35 Remuneration policies We reward our employees in accordance with market bench-
marks, seniority levels, and roles. Employees’ renumeration
packages are made up of different components including
fixed salary, allowances, commissions, short term incentives
(based on individual and company performance), and long-
term incentives. WS Audiology adheres to the local statutory
contribution for each employee.
We follow a strict renumeration process where 2-level ap-
provals are required for salary changes (known as the four
eyes principle). For senior executives, salary is approved via
the remuneration committee, which is comprised of select
board members. For the Global Leadership Team (GLT), sal-
ary changes are approved by the Chief HR Officer and the
President and CEO.
WS Audiology makes use of salary grading/evolution to en-
sure that we are on par with market conditions to attract the
best talents in our competitive environment. The grading/
evaluation exercises are supported and based on Mercer
Salary Grading framework.
In addition to compensation, our employees also enjoy a
wide variety of benefits including medical, hospitalization,
screenings, as well as subsidies, such as hearing aids for
themselves and their immediate family members.
Disclosure
Number Aspect Page or comments
Governance (cont'd)
102-36 Process for determining
remuneration
p43
102-37 Stakeholders’ involvement
in remuneration
p43
102-38 Annual total compensation
ratio
Data not for disclosure.
102-39 Percentage increase in annual
total compensation ratio
Data not for disclosure.
Stakeholder engagement
102-40 List of stakeholder groups Stakeholders are selected based on the stakeholders’ inter-
ests in WSA and stakeholders’ influence on WSA. Stakehold-
er identification and prioritization is an integrated part of
our materiality assessment.
102-41 Collective bargaining
agreements
19% of all employees are covered by collective bargaining
agreements. 4% increase comparing to FY20-21.
102-42 Identifying and selecting
stakeholders
Note 10.1
102-43 Approach to stakeholder-
engagement
Note 10.1
102-44 Key topics and concerns raised Note 10.1
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
160
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
Reporting practice
102-45 Entities included in the
consolidated financial
statements
Note 5.10
102-46 Defining report content and
topic Boundaries
The reporting content and topic are defined based on mate-
riality assessment.
102-47 List of material topics Note 10.1
102-48 Restatements of information None.
102-49 Changes in reporting None.
102-50 Reporting period 10/1/2021-09/30/2022
102-51 Date of most recent report 12/15/2021, WSA Annual Report FY20-21
102-52 Reporting cycle Annually
102-53 Contact point for questions
regarding the report
Please call +45 44 35 56 00 to be directed to the Sustainability
Team
102-54 Claims of reporting in accord-
ance with the GRI Standards
This report has been prepared in accordance with the GRI
Standards: Core option
102-55 GRI content index GRI content index
102-56 External assurance Deloitte is appointed to conduct the third-party assurance
for this report. Deloitte is also the assurance provider for
WSA’s financial report. See page 57-58 for assurance report.
Disclosure
Number Aspect Page or comments
GRI 205: Anti-corruption 2016
103-1 Explanation of the material
topic and its Boundary
Note 13.2
103-2 The management approach
and its components
Note 13.2
103-3 Evaluation of the management
approach
There have not been any substantiated incidents of corrup-
tion or bribery in the last financial year.
No reports were made to the Ombudsman on corruption or
bribery incidents in the last financial year.
205-3 Confirmed incidents of
corruption and actions taken
Note 13.2
GRI 206: Anti-competitive behavior 2016
103-1 Explanation of the material
topic and its Boundary
Note 13.2
103-2 The management approach
and its components
Note 13.2
103-3 Evaluation of the management
approach
There have not been any substantiated incidents of corrup-
tion or bribery in the last financial year.
No reports were made to the Ombudsman on corruption or
bribery incidents in the last financial year.
206-1 Legal actions for anti-compe-
titive behavior, anti-trust, and
monopoly practices
No legal actions pending or completed.
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
161
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
GRI 302: Energy 2016
103-1 Explanation of the material
topic and its Boundary
Note 12.4
103-2 The management approach
and its components
Note 12.4
103-3 Evaluation of the management
approach
Note 12.4
We evaluate the management approach of material topics
through quantified KPIs and internal audits or reviews.
302-1 Energy consumption within
the organization
Note 12.4
GRI 305: Emissions 2016
103-1 Explanation of the material
topic and its Boundary
Note 12.5
103-2 The management approach
and its components
Note 12.5
103-3 Evaluation of the management
approach
Note 12.5
305-1 Direct (Scope 1) GHG
emissions
Note 12.5
305-2 Energy indirect (Scope 2) GHG Note 12.5
305-3 Other indirect (Scope 3) GHG
emissions
Note 12.5
Disclosure
Number Aspect Page or comments
GRI 306: Waste 2020
103-1 Explanation of the material
topic and its Boundary
Note 12.1
103-2 The management approach
and its components
Note 12.1
103-3 Evaluation of the management
approach
Note 12.1
306-1 Waste generation and
significant waste-related
impacts
The waste from our own operation includes waste from pro-
duction, packaging waste from goods received, and office
waste. Downstream packaging waste is also a material topic
for us.
306-2 Management of significant
waste-related impacts
WS Audiology gradually implements the concept of lean pro-
duction in the production process to control waste volumes.
We monitor waste production every month, identify abnor-
mal data in time, and take control measures. Qualified waste
disposal suppliers handle our waste according to applicable
regulations and jurisdiction where we operate.
306-3 Waste generated Note 12.1
GRI 307: Environmental compliance 2016
103-1 Explanation of the material
topic and its Boundary
Note 12.1
103-2 The management approach
and its components
Note 12.1
103-3 Evaluation of the management
approach
Note 12.1
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
162
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
GRI 307: Environmental compliance 2016 (cont'd)
307-1 Non-compliance with environ-
mental laws and regulations
None
GRI 308: Supplier environmental assessment 2016
103-1 Explanation of the material
topic and its Boundary
Note 13.1
103-2 The management approach
and its components
Note 13.1
103-3 Evaluation of the management
approach
Note 13.1
308-2 Negative environmental
impacts in the supply chain
and actions taken
Note 13.1
GRI 401: Employment 2016
103-1 Explanation of the material
topic and its Boundary
p21-23
103-2 The management approach
and its components
p21-23, Note 11
103-3 Evaluation of the management
approach
Note 11
Disclosure
Number Aspect Page or comments
GRI 401: Employment 2016 (cont'd)
401-1 New employee hires and
employee turnover
WS Audiology hired a total of 3,332 employees in the report-
ing period of which 59.4 % are female and 36.3 % are male.
The regional breakdown and age group breakdown of the
new hires are similar to the Group distribution.
WS Audiology has a total annualized attrition rate of 22.9 .%
of which voluntary attrition rate stands at 13.4 % over a 12
month period. A total of 2,541 employees had left WS Audi-
ology over the 12 months period.
GRI 403: Occupational health and safety 2018
103-1 Explanation of the material
topic and its Boundary
Note 11.5
103-2 The management approach
and its components
Note 11.5
103-3 Evaluation of the management
approach
Note 11.5
403-1 Occupational health and
safety management system
Note 11.5
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
163
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
GRI 403: Occupational health and safety 2018 (cont'd)
403-2 Hazard identification, risk as-
sessment, and incident
investigation
WS Audiology established the Standard Operating Pro-
cedure (SOP) "EH&S Aspects Impacts and Hazards Risks
Assessment" to systematically identify and assess risks in
the workplace. The SOP is reviewed at least once a year, and
relevant training is carried out to ensure that the evaluators
have the relevant competence. In addition, employees are
encouraged to report Near Miss incidents at work to identify
risks in a wider scope. Our SOP follows ISO 14001 and OHSAS
18001.
403-3 Occupational health services WS Audiology has established a risk identification and
evaluation system to determine the major risks and control
measures.
403-4 Worker participation, consul-
tation, and communication on
occupational health and safety
WS Audiology has implemented the EHS management sys-
tem by establishing an EHS committee, electing/appointing
employee representatives, holding regular EHS committee
meetings, communicating EHS related information, and en-
suring consultation and participation of workers.
403-5 Worker training on occupa-
tional health and safety
WS Audiology organizes a variety of training programs to
ensure that employees are aware of the risks and necessary
precautions associated with their jobs, as well as emergency
response actions.
403-6 Promotion of worker health In addition to the basic and mandatory medical insurance,
WS Audiology also purchases additional commercial insur-
ance for its employees to provide additional protection for
their physical and mental health.
Disclosure
Number Aspect Page or comments
GRI 403: Occupational health and safety 2018 (cont'd)
403-7 Prevention and mitigation of
occupational health and safe-
ty impacts directly linked by
business relationships
Potential fire hazards can cause significant negative occupa-
tional health and safety impacts. WS Audiology protects em-
ployees against these risks by setting up fire alarm systems
and organizing relevant training and drills.
403-9 Work-related injuries Note 11.5
GRI 405: Diversity and equal opportunity 2016
103-1 Explanation of the material
topic and its Boundary
p21-23, Note 11.2
103-2 The management approach
and its components
p21-23, Note 11.2
103-3 Evaluation of the management
approach
p21-23, Note 11.2
405-1 Diversity of governance
bodies and employees
p21-23, Note 11.2
GRI 406: Non-discrimination 2016
103-1 Explanation of the material
topic and its Boundary
WSA own operation and supply chain.
103-2 The management approach
and its components
We are committed to non-discrimination and we expect our
suppliers to do the same. This is included in our company
policies. Our employees can raise complaints through our
grievance mechanism.
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
164
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
GRI 406: Non-discrimination 2016 (cont'd)
103-3 Evaluation of the management
approach
We evaluate the management of the discrimination topic
through employee engagement surveys. Supplier compli-
ance is evaluated through audits.
406-1 Incidents of discrimination
and corrective actions taken
No legal actions or complaints registered with WS Audiology
or competent authorities through a formal process, includ-
ing WS Audiology’s grievance mechanism.
GRI 407: Freedom of association and collective bargaining 2016
103-1 Explanation of the material
topic and its Boundary
Note 11.6
103-2 The management approach
and its components
Note 11.6
103-3 Evaluation of the management
approach
Note 11.6
407-1 Operations and suppliers in
which the right to freedom of
association and collective
bargaining may be at risk
Note 11.6
GRI 408: Child labor 2016
103-1 Explanation of the material
topic and its Boundary
Note 11.6
103-2 The management approach
and its components
Note 11.6
Disclosure
Number Aspect Page or comments
GRI 408: Child labor 2016 (cont'd)
103-3 Evaluation of the management
approach
Note 11.6
408-1 Operations and suppliers at
significant risk for incidents of
child labor
Note 11.6
GRI 409: Forced or compulsory labor 2016
103-1 Explanation of the material
topic and its Boundary
Note 11.6
103-2 The management approach
and its components
Note 11.6
103-3 Evaluation of the management
approach
Note 11.6
409-1 Operations and suppliers at
significant risk for incidents of
forced or compulsory labor
WSA UK Modern Slavery Act Statement FY20-21
Note 11.6
GRI 412: Human rights assessment 2016
103-1 Explanation of the material
topic and its Boundary
Note 11.6
103-2 The management approach
and its components
Note 11.6
103-3 Evaluation of the management
approach
Note 11.6
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
165
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
GRI 412: Human rights assessment 2016 (cont'd)
412-1 Operations that have been
subject to human rights re-
views or impact assessments
Note 11.6
412-2 Employee training on human
rights policies or procedures
Human rights training has been provided to all employees
through WSA Code of Conduct eLearning
GRI 413: Local communities 2016
103-1 Explanation of the material
topic and its Boundary
Note 11.7
103-2 The management approach
and its components
Note 11.7
103-3 Evaluation of the management
approach
Our communication department evaluates the quality of
local community engagement activities and communicates
high-quality engagement stories to encourage other col-
leagues.
413-2 Operations with significant
actual and potential negative
impacts on local communities
Our operation is located in a commercial building with very
limited negative impact on local communities, i.e. no human
rights (incl. land rights) violations. Water is sourced from the
municipal water system, waste is handled by qualified ven-
dors. Read more about GHG emissions in note 12.5.
Disclosure
Number Aspect Page or comments
GRI 414: Supplier social assessment 2016
103-1 Explanation of the material
topic and its Boundary
Note 13.1
103-2 The management approach
and its components
Note 13.1
103-3 Evaluation of the management
approach
Note 13.1
414-2 Negative social impacts in the
supply chain and actions taken
Note 13.1
GRI 416: Customer health and safety 2016
103-1 Explanation of the material
topic and its Boundary
Note 13.3
103-2 The management approach
and its components
Note 13.3
103-3 Evaluation of the management
approach
Note 13.3
416-1 Assessment of the health and
safety impacts of product and
service categories
100% product and service categories for which health and
safety impacts are assessed for improvement.
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
166
Overview Strategy and Sustainability Performance Governance Statements Financial statements
Disclosure
Number Aspect Page or comments
GRI 417: Marketing and labeling 2016
103-1 Explanation of the material
topic and its Boundary
Note 13.4
103-2 The management approach
and its components
Note 13.4
103-3 Evaluation of the management
approach
Note 13.4
417-2 Incidents of non-compliance
concerning product and ser-
vice information and labeling
Note 13.4
GRI 418: Customer privacy 2016
103-1 Explanation of the material
topic and its Boundary
Note 13.5
103-2 The management approach
and its components
Note 13.5
103-3 Evaluation of the management
approach
Note 13.5
418-1 Substantiated complaints con-
cerning breaches of customer
privacy and losses of customer
data
WS Audiology has not recorded any non-compliance with
data privacy regulations, and no fines have been imposed on
WS Audiology.
Disclosure
Number Aspect Page or comments
GRI 419: Socioeconomic compliance 2016
103-1 Explanation of the material
topic and its Boundary
Note 11
103-2 The management approach
and its components
Note 11
103-3 Evaluation of the management
approach
Note 11
419-1 Non-compliance with laws and
regulations in the social and
economic area
WS Audiology has not recorded any non-compliance with
regulations in the social and economic area, and no fines
have been imposed on WS Audiology.
GRI index (cont'd)
WS Audiology Annual Report 2021/22
GRI index
167
Overview Strategy and Sustainability Performance Governance Statements Financial statements
We delivered a solid performance in the 2021/22 fiscal year in
line with our guidance. The results are delivered by our team in a
challenging business environment. Thank you so much to our 12,000
dedicated colleagues across WSA. Together, we enabled millions of
people to enjoy wonderful sound as part of their lives.
Eric Bernard
President and CEO
WS Audiology
wsa.com
Phone: +45 44 35 56 00
Phone: +65 6370 9666
Sivantos Pte. Ltd
18 Tai Seng Street
Singapore 539775