Coloplast A/S
Holtedam 1, 3050 Humlebæk
1 October 2020
– 30 September 2021
FIVE-YEAR FINANCIAL HIGHLIGHTS AND KEY RATIOS
A message from the Chairman
2
Five-year financial highlights and key ratios
2020/21
2019/20
2018/19
2017/18
2016/17
Income statement, DKK million
Revenue
19,426
18,544
17,939
16,449
15,528
Research and
development costs -755
-708
-692
-640
-574
Operating profit before interest, tax, depr. and amort. (EBITDA)
6,947
6,705
5,807
5,716
5,635
Operating profit (EBIT) before special items
6,355
5,854
5,556
5,091
5,024
Special items¹
⁾
-200
- -400
- -
Operating profit (EBIT)
6,155
5,854
5,156
5,091
5,024
Net financial income and expenses
78
-388
-128
-82
-72
Profit before tax
6,233
5,466
5,028
5,009
4,950
Net profit for the
year 4,825
4,197
3,873
3,845
3,797
Revenue growth
Annual growth in revenue, %
5
3
9
6
6
Growth breakdown:
Organic growth, %
7
4
8
8
7
Currency effect, %
-2
-1
1
-4
-1
Acquired operations, %
0
- 0
1
1
Other matters, %
- - -
1
-1
Balance sheet, DKK million
Total assets
15,841
13,499
12,732
11,769
12,050
Capital invested
11,576
9,864
8,748
8,468
7,977
Net interest
-bearing debt 2,112
1,162
539
754
826
Equity at year end
8,168
7,406
6,913
6,418
5,952
Cash flows and investments, DKK million
Cash flows from operating activities
5,290
4,759
4,357
4,361
3,251
Cash flows from investing activities
-2,011
-901
-591
-947
-1,619
Investments in property, plant and equipment, gross
-919
-846
-617
-616
-661
Free cash flow
3,279
3,858
3,766
3,414
1,632
Cash
flows from financing activities -3,176
-3,857
-3,714
-3,430
-1,863
Key ratios
Average number of employees, FTEs
12,578
12,250
11,821
11,155
10,420
Operating margin (EBIT margin) before special items, %
33
32
31
31
32
Operating margin (EBIT margin), %
32
32
29
31
32
Operating margin before interest, tax, depr. and amort. (EBITDA margin), %
36
36
32
35
36
Return on average invested capital before tax (ROIC), %²
⁾ 58
59
62
57
61
Return on average invested capital after tax (ROIC), %²
⁾ 45
46
48
44
47
Return on equity, %
70
66
65
72
77
Equity ratio, %
52
55
54
55
49
Net asset value per outstanding share, DKK
38
35
33
30
28
Share data
Share price, DKK
1,007
1,004
825
657
511
Share price/net asset value per share
26
29
25
22
18
Average number of outstanding shares, in million
213
213
212
212
212
PE, price/earnings ratio
44
51
45
36
29
Dividend per
share, DKK³⁾
19.0
18.0
17.0
16.0
15.0
Payout ratio, %
⁴⁾
81
91
86
88
84
Earnings per share (EPS), diluted
22.63
19.67
18.18
18.10
17.87
Free cash flow per share
15
18
18
16
8
The Group has applied IFRS 16 “Leases” for the first time on 1 October 2019.
The amounts for 2016/17-2018/19 have not been restated.
Key ratios have been calculated and applied in accordance with Recommendations & Financial Ratios issued by the
Danish Society of Financial Analysts.
1)
Special items include the costs of settlements and costs in connection with the lawsuits in the United States alleging injury resulting from the use of transvaginal
surgical mesh products.
2) This item is provided before special items. After special items, ROIC before tax was 57%/61%/60%/62%/74%, and ROIC after tax was
44%/
47%/46%/47%/57%. 3) The figure shown for the 2020/21 financial year is the proposed dividend. 4) For the 2020/21 and 2018/19 financial years, this item
is before
special items. After special items, the payout ratio is 84%/93%.
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2020/21 IN BRIEF • 2021/22 OUTLOOK & GUIDANCE
3
Table of contents
The Management’s Report
Five-year financial highlights and key ratios 2
Highlights 4
Chairman’s letter 4
CEO letter 6
At a glance 8
2020/21 in brief 10
2021/22 outlook and guidance 12
2020/21 Performance 14
Ostomy Care 14
Continence Care 16
Interventional Urology 18
Wound & Skin Care 20
Financial results 22
Our business 25
Strategy and markets 25
Sustainability 32
Risk management 38
Governance & Ownership 42
The Board of Directors 46
The Executive Leadership Team 48
Shareholders and ownership 49
The Financial Statements
Consolidated financial statements 52
Statement of comprehensive income 52
Statement of cash flows 53
Assets 54
Equity and liabilities 55
Statement of changes in equity, current year 56
Statement of changes in equity, last year 57
List of notes 58
Notes 59
Statements 105
Statement by the Board of Directors and the Executive Management 105
Independent auditors’ report 106
Parent company financial statements 113
Additional information (part of Management’s Report)
Shareholder information 122
HIGHLIGHTS
A message from the Chairman
4
Dear shareholders,
As I write this letter, the world continues
to grapple with the COVID-19 pandemic
that has impacted us all, professionally
and personally. At Coloplast, our mission
continues to guide us. We are here to
make life easier for people with intimate
healthcare needs – today and
tomorrow.
As the impact of the pandemic wanes
across the world, we see a path to
recovery and continue to focus on
building the consumer healthcare
company of the future. We launched a
new corporate strategy last year,
Strive25, and despite the challenges
presented by COVID-19, I look back on
a year in which the company delivered
solid results and took market shares
across all business areas.
As a company, we continue to strive
towards long-term value creation for all
our stakeholders – consumers,
healthcare professionals, employees,
communities and shareholders.
In my role, I continue to firmly believe
that effective boardrooms are built on a
foundation of collaboration, respect and
trust. I also place great emphasis on the
strong collaboration between the Board
and the Executive Leadership Team.
One of my key priorities since becoming
Chairman of the Board has been to
broaden the scope of the Board’s
strategic work. Over the past year, the
Board has engaged extensively with
management on navigating the impacts
of COVID-19 as well as key strategic
topics, including innovation,
digitalisation, sustainability, culture,
M&A and successful execution in the US
and China. Let me highlight two key
areas.
First, our strategy must evolve as the
marketplace changes. To name a few
key developments, COVID-19 has
accelerated the digital transformation
and introduced new ways of working
that will have large ramifications in the
years to come. COVID-19 has also put
pressure on input costs which will be a
key topic going forward.
Second, Sustainability is on top of the
Board agenda. I firmly believe that
sustainability is key to corporate
competitiveness and a company’s
continued ability to operate. The Board
is committed to addressing these
concerns and to providing the adequate
disclosure and transparency necessary
to assess our progress. At Coloplast, we
have always aspired to act responsibly.
As part of Strive25, Sustainability has
been elevated to an enterprise theme
backed by large investments.
The climate crisis is one of the most
urgent issues of our time and we must
act now. At Coloplast, we have taken
key steps to advance our environmental
commitment. I strongly support the
recommendations of the Task Force on
Climate-related Financial Disclosures
and encourage other business leaders
to join the effort.
As outlined in our Remuneration report,
to underline our commitment to climate
action and ensure solid progress,
executive remuneration will be linked to
climate-related non-financial metrics.
HIGHLIGHTS
A message from the Chairman
As a company, we continue to strive towards long-term value
creation for all our stakeholders
– consumers, healthcare
professionals, employees, communities and shareholders.
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2020/21 IN BRIEF • 2021/22 OUTLOOK & GUIDANCE
5
Inclusion & Diversity is another area
that I feel passionate about.
In 2020, I became Chairman of the DI
(Danish Industry) Committee on
Diversity. Most recently, as part of the
company's inclusion and diversity
efforts, Coloplast has signed the
Confederation of Danish Industry's
Gender Diversity Pledge, committing to
a target of a 40/60 gender distribution
in management and our Board of
Directors by 2030.
During the year, Coloplast undertook an
independent Board evaluation to assess
whether the board’s composition,
dynamics, operations and structure are
effective for the company and its
business environment in the short and
long term. The review identified future
development areas and also highlighted
areas of strength.
At the Annual General Meeting in
December, the Board will propose the
election of a new Board member who
has extensive commercial experience
from the US market.
Today, I am pleased to present our
Annual Report, which looks back on
another challenging year due to COVID-
19. Despite a significant negative impact
on growth in our chronic care business
due to the pandemic, it is fair to
conclude that this year once again
confirmed the strength of Coloplast’s
business model to deliver solid
performance and earnings growth even
in tough times. Most importantly, our
products have continued to help make
life easier for millions of people with
intimate healthcare conditions.
In conclusion, based on our company’s
financial performance in 2020/21, the
Board of Directors will propose a total
dividend of DKK 19.00 per share at the
Annual General Meeting in December
2021.
On behalf of the Board of Directors, I
would like to thank Coloplast’s
Executive Leadership Team for guiding
the organisation through this difficult
and fast-moving environment.
Once again, thank you to our
employees for their dedication to the
company and our mission. 2020/21 was
not an easy year. The commitment,
which has been shown by our
approximately 12,500 employees
worldwide, is truly humbling. I would
also like to thank you, our shareholders,
for your continued trust and support.
Lars Rasmussen
Chairman of the Board of Directors
Proposed dividend per
share
is DKK 14.00 on
top of
a half-year
dividend of DKK 5.00
.
The Board of Directors recommends
that
the shareholders attending the
general meeting approve a year
-end
dividend of DKK 1
4.00 per share. In
addition to
a dividend of DKK 5.00 per
share paid out in connection with the
half
-year results in May 2021, which
brings the total dividend paid for the
year to DKK 1
9
.00 per share, compared
with DKK 1
8.00 per share last year.
DIVIDEND PER SHARE (DKK)
*
Proposed dividend per share.
5.0 5.0 5.0
12.0
13.0
14.0*
2018/19 2019/20 2020/21
Year-end dividend Half-year dividend
HIGHLIGHTS
Our CEOs view on the business
6
Dear shareholders,
At Coloplast, we work to make life
easier for people with intimate
healthcare needs. By listening to the
people who use our products – users as
well as the nurses and specialists who
care for them – we get a better
understanding of their needs and
challenges. That knowledge inspires our
innovation. This approach has brought
us close to our customers. It has allowed
us to deliver pioneering products and
made us one of the best performing
medical device companies in the world.
We’re very proud of that. But we have
more work to do.
This year year, I am proud to say that
we helped more than 2 million chronic
users. Our key focus has been to keep
our employees safe, continue to serve
our customers and maintain business
operations.
As we enter a new financial year, the
world is still experiencing disruptions as
a result of the global pandemic and its
long-term effects will continue to impact
us. But I am confident that the
pandemic will also have lasting positive
implications. I am fundamentally
optimistic about our future. Coloplast is
a long-term growth company. We
operate in attractive underlying markets
growing 4-5% driven by demographics,
increasing health care standards in
emerging markets and innovation. We
continue to build the consumer
healthcare company of the future with a
strong commercial model based on
category leadership through innovation,
strong partnerships with clinicians and a
large-scale direct-to-consumer setup.
The pandemic has validated our model.
COVID-19 has accelerated digital
trends
What we have witnessed over the past
year is an acceleration of the digital
transformation and we will not run our
company the same way again.
Triggered by the pandemic, healthcare
professionals have been profoundly
impacted by the shift to remote work,
our employees found new ways of
working and consumers became reliant
on strong digital offerings. Coloplast has
responded in turn and invested in digital
tools, data security and artificial
intelligence that will help us excel in a
more digitised environment.
Solid 2020/21 results
Despite COVID-19, we delivered a
strong set of numbers with 7% organic
growth, 33% EBIT margin before special
items and 45% return on invested
capital after tax (before special items).
COVID-19 had a large impact on our
chronic care business, but on a positive
note, the growth in new patients is
recovering. Our smaller business areas,
Interventional Urology and Wound &
Skin Care, made a strong recovery this
year as elective procedures and hospital
activity resumed. Across all business
areas we once again gained market
shares. The strong EBIT margin was
supported by the successful execution
of our Global Operations Plans. We
continued to invest in innovation and
commercial growth initiatives, in
particular in the US and China, as well
as digital initiatives. Importantly, our
employees remained engaged and our
most recent employee engagement
score was again above the benchmark.
Strive25 – Sustainable Growth
Leadership
Last year, we announced our new
strategy, Strive25, with a clear
emphasis on growth and innovation, US
and China. Growth will be fuelled by
incremental investments of up to 2% of
revenues annually in innovation and
commercial initiatives across all business
areas. We will also actively pursue M&A
opportunities to build growth options.
A few highlights from the first year of
Strive25:
First, innovation. We aim to set the
standard of care in the categories we
compete in. With user needs at the
centre, we have made progress on our
Clinical Performance Programme in
Chronic Care. The programme marks
the start of an important transition to
outcome-based innovation, which forces
us to think differently and which will be
key over the next decade as our
healthcare ecosystem becomes
increasingly value based. We need to
demonstrate value to wider sets of
stakeholders including consumers,
clinicians and not least payers. Clinical
evidence, data and demonstrating value
will be critical.
In Wound Care, we have strengthened
our product portfolio with the launch of
Biatain Fiber. In Interventional Urology,
we have taken steps to build new
growth options into the pipeline through
the acquisition of Nine Continents
Medical, an early-stage technology
company within the overactive bladder
market.
Second, growth. It has been a tough
year for healthcare systems. Despite
challenging market conditions, we made
key progress on our commercial growth
agenda. In Chronic Care, we seek to
continue to drive growth above the
market with a strong contribution from
our US and emerging market regions. In
the US, we achieved a key milestone by
Our CEOs view on the business
I am fundamentally optimistic about our future. Coloplast is a long-
term growth company.
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2020/21 IN BRIEF • 2021/22 OUTLOOK & GUIDANCE
7
securing access to the largest Ostomy
GPOs. In China, we have initiated a large
project with hundreds of ostomy nurses
aimed at raising standards of care for
ostomy users. In Poland, reimbursement
for hydrophilic catheters has been
significantly improved for adults and
children with neurogenic bladder and is
now on par with the European standard
of care. This important step forward will
help thousands of people to lead more
dignified lives.
Our new strategy is supported by key
growth enablers, including Efficiency,
People and Culture and Sustainability.
We continue to strive for unparalleled
efficiency and industry leading margins.
Our ambitious 3-year Global Operations
Plan 5 is off to a solid start. Our
extensive automation programme is on
track and our first volume factory in
Costa Rica opened this year. Our
second volume factory in Costa Rica will
open next year. By the end of Strive25,
Costa Rica is expected to produce 25-
30% of our global volumes, ensuring
that we have a more diversified global
production network. We also continue to
see a positive scale effect in our
business support organisation driven by
the further utilisation of our Coloplast
Business Centre in Poland. However, we
also see headwinds from pressure on
input costs, mainly from wage inflation
in Hungary and increasing raw materials
costs.
A purpose driven culture with the
focus on Sustainability
At the heart of delivering on Strive25 is
our people and culture. The pandemic
has been tough on all employees. As
societies open again across the world,
we are reconnecting with our
colleagues. We are united around a
strong purpose, but the pandemic has
led to lasting changes in how we work.
To succeed in this new environment, we
are discovering new ways of organising
and leading, along with new approaches
to recruiting, developing and engaging
employees. We have also set clear goals
on diversity for all leaders in the
company. We all need to make this a
priority.
I am very pleased to release this year’s
Sustainability Report together with the
Annual Report. Last year, Coloplast
made Sustainability an enterprise
theme. We have set a number of
ambitious targets to support the UN
Sustainable Development Goals and to
reduce emissions from Scope 1, 2 and 3
in line with the Paris agreement to limit
global temperature rise to 1.5°C. By
submitting targets for validation to the
Science-Based Targets initiative, we
have increased transparency across our
entire value chain. Our environmental
sustainability initiatives are supported by
investments of up to DKK 250 million
over the strategy period. We are acting
now.
Despite a challenging year, I remain
optimistic about our future which holds
many opportunities for growth. I want to
say thank you to all the employees at
Coloplast for your continued
commitment to build our company and
deliver on our mission. I would also like
to thank our customers and investors
for your confidence.
Kristian Villumsen
President & CEO
HIGHLIGHTS
Coloplast across regions and business areas
8
Coloplast across regions and business areas
Ostomy Care
Ostomy bags, plates and
supporting products
7.8 bn
Reported revenue in DKK
+6%
Organic growth at constant
exchange rates
Continence Care
Intermittent catheters, collecting devices
and bowel management
7.0 bn
Reported revenue in DKK
+5%
Organic growth at constant
exchange rates
Interventional Urology
Vaginal slings, penile implants
and disposable products
for use in surgery
2.1 bn
Reported revenue in DKK
+19%
Organic growth at constant
exchange rates
Wound & Skin Care
Advanced wound care dressings, liquids and creams to
treat wounds and contract manufacturing of
consumer products
2.5 bn
Reported revenue in DKK
+8%
Organic growth at constant
exchange rates
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2020/21 IN BRIEF • 2021/22 OUTLOOK & GUIDANCE
9
European markets
Western, Northern and
Southern Europe
Other developed
markets
USA, Canada, Japan,
Australia and New Zealand
Emerging markets
All other markets
11.3 bn
Reported revenue in DKK
+4%
Organic growth at constant
exchange rates
4.8 bn
Reported revenue in DKK
+8%
Organic growth at constant
exchange rates
3.4 bn
Reported revenue in DKK
+15%
Organic growth at constant
exchange rates
European markets
Other developed markets
Emerging markets
HIGHLIGHTS
2020/21 in brief
10
Organic growth was 7%, with all
business areas contributing to growth.
Ostomy Care was the main growth
contributor and grew 6% organically.
Continence Care delivered 5% organic
growth. Interventional Urology
contributed with 19% organic growth.
The wound and skin care business grew
8% organically.
Revenue in DKK amounted to 19,426
million, which is a 5% increase from
18,544 million last year.
EBIT before special items amounted to
DKK 6,355 million, which is a 9%
increase from DKK 5,854 million last
year.
The increase in EBIT was a result of
increasing revenues, a gross margin that
increased to 69% compared to 68% last
year, driven by efficiency gains, and a
lower level of commercial spending
impacted by the COVID-19 pandemic.
The EBIT margin after special items was
32%.
ROIC after tax before special items was
45% against 46% last year.
ROIC was negatively impacted by the
acquisition of Nine Continents Medical in
November 2020.
REVENUE (DKK MILLION)
GROSS PROFIT AND EBIT (DKK MILLION)
DEVELOPMENT IN ROIC AFTER TAX
2020/21 in brief
19,426
18,544
2020/21 2019/20
13,313
12,612
6,355
5,854
2020/21 2019/20
Gross profit EBIT (before special items)
45%
46%
2020/21 2019/20
7%
Organic revenue
growth in 2020/21.
Growth was broad-
based
33%*
EBIT margin driven
by efficiency gains
and cost prudency
* Before special items
45%*
ROIC after tax
compared to 46%
last year
* Before special items
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2020/21 IN BRIEF • 2021/22 OUTLOOK & GUIDANCE
11
Cash flows from operating activities
amounted to DKK 5,290 million, against
DKK 4,759 million last year. The positive
development in cash flows from
operating activities was mainly due to
an increase in operating profit (EBIT), an
improvement on financial items and
positive changes in working capital.
Cash flow from operating activities was
impacted by a one-off tax payment
related to Nine Continents Medical exit
taxation in the US.
Cash flows from investing activities was
an outflow of DKK 2,011 million in
2020/21 compared with DKK 901
million last year mainly due to the
acquisition of Nine Continents Medical.
The free cash flow was an inflow of DKK
3,279 million compared to an inflow of
DKK 3,858 million in the same period
last year, which was mostly impacted by
the Nine Continents Medical acquisition.
CASH FLOW (DKK MILLION)
Highlights from our
sustainability
agenda
58%
production waste is recycled,
improved from 41% in 2019/20
10%
scope 3 emissions reduced per product
compared to base year 2018/19.
2.2 ppm
lost time injury frequency, improved.
From 2.5 ppm in 2019/20.
Please go to
page 32 to read more
about sustainability
in Coloplast.
Download our
Sustainability report
https://sustainability.coloplast.com/sustainabi
lity/reporting/reports/
5,290
4,759
3,279
3,858
2020/21 2019/20
Operating cash flow Free cash flow
3,279 m
Free cash flow
impacted by
investments and
acquisitions
HIGHLIGHTS
2021/22 outlook and guidance
12
Key assumptions
Revenue growth
The impact of COVID-19 and the spread
of the Delta variant are continuously
monitored and evaluated on a short-
and medium-term basis, and the
financial guidance is subject to higher
uncertainty. The ongoing COVID-19
pandemic has had a negative impact on
the addressable market growth, and for
2021/22 we expect market growth to
be at the lower end of the 4-5% range.
Coloplast expects to grow above the
market and gain market share.
Coloplast’s full year guidance assumes
the following:
a) Continued resumption of hospital
activity across business areas
b) For the Chronic Care business, the
assumptions by region include:
• Europe – continued improvement
in growth, as a result of a norma-
lised growth in new patients in line
with pre-COVID levels
• US – continued improvement in
growth driven by a gradual
normalisation of growth in new
patients to pre-COVID levels,
especially in Continence Care
• Emerging markets – broad-based
double-digit growth. China is
expected to remain impacted by
COVID-19 and economic
uncertainty.
c) Interventional Urology and Wound &
Skin Care deliver in line with Strive 25
ambitions
d) No current knowledge of significant
health care reforms
e) A stable supply and distribution of
products across the company
Reported growth in DKK is expected to
be around 8%.
The financial guidance takes account of
known reforms. The company’s
expectations of long-term price
pressure, of up to 1% annually is
unchanged. The financial guidance
further assumes a continuation of the
successful roll-out of new products.
EBIT margin
The EBIT margin guidance reflects an
increase in operating costs related to
the resumption of business activity as
the impact of COVID-19 recedes. The
guidance also reflects cost inflation
including a low single-digit increase in
raw material costs and double-digit
wage inflation in Hungary.
The EBIT margin guidance assumes
leverage effect on fixed costs and
continued efficiency improvements
through the Global Operations Plan 5.
The guidance also reflects additional
incremental investments of up to 2% of
revenue for innovation as well as sales
and marketing purposes.
Capex
The capex guidance includes
investments in automation initiatives at
volume sites in Hungary and China as
part of GOP5, establishment of the
second volume site in Costa Rica,
investments in new machines for
existing and new products, IT
investments and sustainability
investments.
Other assumptions
The provision made to cover costs
relating to transvaginal surgical mesh
products remains subject to a degree of
estimation.
Outlook and financial guidance
2021/22 outlook and guidance
Our guidance
for 2021/22
Around 7%
Organic revenue growth at
constant exchange rates
Around 32%
Reported EBIT margin
Around 1.2 bn
Capital expenditure in DKK
22-23%
Effective tax rate
CHAIRMAN’S LETTER • CEO LETTER • AT A GLANCE • 2020/21 IN BRIEF • 2021/22 OUTLOOK & GUIDANCE
13
Long-term financial
guidance
The long-term financial guidance for the
Strive25 strategy period running until
end 2024/25 is the following:
7
-9%
Organic growth p.a.
above 30%
EBIT margin at
constant
exchange rates
Dividend policy
The Board of Directors intends to
distribute excess liquidity to the
shareholders through dividends and
share buybacks.
Forward-looking
statements
The forward-looking statements in this
report, including revenue and earnings
guidance, do not constitute a guarantee
of future results and are subject to risk,
uncertainty and assumptions, the
consequences of which are difficult to
predict.
The forward-looking statements are
based on our current expectations,
estimates and assumptions and are
provided on the basis of information
available to us at the present time.
Major fluctuations in the exchange rates
of key currencies, significant changes in
the healthcare sector or major
developments in the global economy
may impact our ability to achieve the
defined long-term targets and meet our
guidance. This may impact our
company’s financial results.
Exchange rate
exposure
Our financial guidance for the 2021/22
financial year has been prepared on the
basis of the following assumptions for
the company’s principal currencies:
OVERVIEW OF EXCHANGE RATES FOR
KEY CURRENCIES AGAINST DKK
GBP
USD
HUF
Average exchange
rate 2019/20
850
667
2.17
Average exchange
rate 2020/21
852
622
2.08
Change in average
exchange rates for
2020/21 versus
2019/20
0% -7% -4%
Spot rate on
27 October 2021
881
641
2.04
Change in spot
rates compared
with average
exchange rate
2020/21
3% 3% -2%
Revenue is particularly exposed to
developments in USD and GBP relative
to DKK. Fluctuations in HUF against
DKK impact the operating profit
because a substantial part of our
production, and thus of our costs, are in
Hungary, whereas our sales there are
moderate.
EFFECT OVER 12 MONTHS OF A 10%
INITIAL DROP IN EXCHANGE RATES FOR
KEY CURRENCIES (DKK MILLION)
Revenue
EBIT
USD
-420
-170
GBP
-290
-200
HUF
- 120
2020/21 PERFORMANCE
The ostomy business continued solid growth, largely recovered from
14
Performance
Ostomy Care generated 6% organic
sales growth for the 2020/21 financial
year, with reported revenue in DKK
growing by 4% to DKK 7,841 million.
The SenSura® Mio portfolio and the
Brava® range of supporting products
continued to be the main drivers of
revenue growth. At the product level,
SenSura Mio Convex was the main
contributor to growth driven by
Germany, the UK and the US. SenSura
Mio Concave continued to contribute to
growth driven by the UK and Germany.
The SenSura and Assura/Alterna®
portfolios also contributed to growth in
the markets where they are being
actively promoted, such as China and
other Emerging markets. Sales of the
Brava range of supporting products
continue to contribute to growth driven
by China, the US, Germany and the UK.
From a geographical perspective, the
emerging markets region was the main
contributor to growth, led by China and
LATAM. Among the European markets,
the UK and Germany were the main
growth contributors. The US also
contributed to growth.
During 2020/21, growth in Ostomy
Care was negatively impacted by lower
growth in new patients, as only the most
acute ostomy surgeries took place due
to the COVID-19 pandemic. The impact
was most pronounced in Europe, in
particular in the UK as well as the US.
Growth in new patients normalised
during the second half of FY 2020/21,
following the resumption of hospital
activity.
In March 2021, Coloplast was awarded
a contract for ostomy products with
Vizient, Inc., the largest healthcare
performance improvement company in
the US. The agreement is multi-source
and effective for three years beginning
1 July 2021. The new agreement allows
Vizient members access to contracted
pricing of Coloplast’s full portfolio of
ostomy products, including ostomy
pouches and supporting products.
Vizient serves more than half of the
healthcare organisations across the
country – from large integrated delivery
networks and academic medical centres
to community hospitals, children’s
hospitals and non-acute care providers.
Ostomy Care
2020/21 PERFORMANCE
The ostomy business continued solid growth, largely recovered from
COVID
-19
7.8 bn
Reported revenue
in DKK for 2020/21
6%
Organic growth
at constant
exchange rates
4%
Reported growth
in DKK
Reported revenue included a
negative effect from FX rates.
European markets
Other developed markets
Emerging markets
58%
17%
25%
20/21
geographical
revenue split
OSTOMY CARE • CONTINENCE CARE • INTERVENTIONAL UROLOGY • WOUND & SKIN CARE • FINANCIAL RESULTS
15
Market
MARKET DESCRIPTION
In 2020/21, the global market for
ostomy care products was worth an
estimated DKK 18-19 billion. Around
85% of the market is within the bags
and plates category, the remaining 15%
in the supporting products category.
The market size is primarily impacted by
the prevalence of colorectal and
bladder cancer and inflammatory bowel
diseases. Another significant driver is the
availability of reimbursement for ostomy
products across different geographies.
The ostomy market is a chronic market,
with the majority of product usage
happening in community, i.e. after users
have been discharged from the hospital.
MARKET GROWTH
The annual market growth is estimated
at 4–5%, excluding any short-term
impact from COVID-19.
Market volume growth is driven by the
ageing Western population and
increasing access to healthcare in
emerging markets. Another volume
growth driver is compliance and usage
rates across markets. The incidence of
temporary stomas, i.e. when ostomy
products are only needed for a limited
period of time, has increased due to
medical advances. This trend has had a
negative impact on volume growth over
the past decade.
Price and mix also have an impact on
market growth. As markets mature,
there is an increased demand for more
advanced product categories.
Historically, prices have seen negative
pressure due to healthcare reforms. No
significant healthcare reforms were
implemented during 2020/21.
The COVID-19 pandemic has had a
negative impact on the market growth.
The number of new patients entering
the market during 2020/21 was
depressed, as screening and treatment
were either cancelled or postponed.
Growth in new patients normalised
towards pre-COVID levels across most
markets in the second half of 2020/21,
as hospital activity resumed.
The impact from COVID-19 on the
ostomy market is expected to be
temporary. The underlying dynamics
and growth drivers of the ostomy
market are not expected to change
beyond the pandemic.
MARKET SHARES
Coloplast is the global market leader in
ostomy care, with a market share of 35-
40%.
There are three larger global
manufacturers in the ostomy market,
including Coloplast, and a few local
manufacturers especially in the UK.
REGIONAL MARKET SHARES
40-50%
Sh
are of European markets
15
-25%
Share of Other developed markets
4
5-55%
Share of
Emerging markets
SUPPORTING PRODUCTS MARKET
The market for ostomy supporting
products is estimated to be around DKK
3 billion.
The annual segment growth is
estimated at 6-8%, excluding any short-
term impact from COVID-19.
Coloplast also has a market leading
position within this segment, with a
market share of 35–40%.
18-19 bn
Market size
globally in DKK
4-5%
*
Market growth
annually
35-40%
Market share
globally
#1
Market position
globally
European markets
Other developed markets
Emerging markets
*
Excluding any impact from COVID-19
Source: Coloplast
Global market
by region
2020/21 PERFORMANCE
The continence business continued solid growth, not fully recovered from
COVID-19
16
Performance
Continence Care generated 5% organic
sales growth for the 2020/21 financial
year, with reported revenue in DKK
growing by 3% to DKK 7,003 million.
SpeediCath® intermittent catheters
were the main drivers of revenue
growth. The growth in sales of the
SpeediCath portfolio was driven by
compact catheters, standard catheters
and flexible catheters, all of which are
ready-to-use hydrophilic coated
catheters. The growth in flexible
catheters and compact catheters was
mainly driven by the US, France, the UK
and Germany. SpeediCath Navi, a
hydrophilic catheter specifically
designed for emerging markets and
lower priced developed markets, also
contributed to growth.
The Bowel Management business also
contributed to growth, driven by
Peristeen® in Europe. Growth in
Collecting Devices was flat for the year,
impacted by COVID-19.
From a geographical perspective, sales
growth was mainly driven by Europe, in
particular the UK and France, and the
US.
During 2020/21, growth in Continence
Care was negatively impacted by lower
growth in new patients due to the
COVID-19 pandemic, as only the most
acute patient groups, such as spinal
cord injured received treatment, while
other patient groups, such as multiple
sclerosis (MS), benign prostatic
hyperplasia (BPH) and bowel
management were deprioritised for
treatment. The impact was most
pronounced in Europe, in particular in
the UK, and the US.
Growth in new patients increased during
the second half of FY 2020/21,
following the resumption of hospital
activity. In Europe, it approached pre-
COVID levels towards the end of the
financial year. Growth in new patients in
the US is improving, but it is still below
pre-COVID levels.
The continence business continued solid growth, not fully recovered from
COVID
-19
Continence Care
7.0 bn
Reported revenue
in DKK for 2020/21
5%
Organic growth
at constant
exchange rates
3%
Reported growth
in DKK
Reported revenue included a
negative effect from FX rates.
European markets
Other developed markets
Emerging markets
68%
23%
9%
20/21
geographical
revenue split
OSTOMY CARE • CONTINENCE CARE • INTERVENTIONAL UROLOGY • WOUND & SKIN CARE • FINANCIAL RESULTS
17
Market
MARKET DESCRIPTION
In 2020/21, the global market for
continence care products was worth an
estimated DKK 14–15 billion.
Around 80% of the continence market
is within the intermittent catheters
category, and the remaining 20% in the
collecting devices category.
The market size is primarily influenced
by the number of people suffering from
spinal cord injuries, benign prostatic
hyperplasia (BPH), multiple sclerosis
(MS) and people born with congenital
spina bifida. Another driver is the
availability of reimbursement for
continence care products across
markets. The continence market is a
chronic market, and the majority of
product usage happens in the
community, i.e. after users have been
discharged from the hospital.
MARKET GROWTH
The annual market growth is estimated
at 5–6% excluding any short-term
impact from COVID-19.
The fastest growing segment of the
market is intermittent catheters. Growth
in this segment is driven by the
increasing use of intermittent catheters
as an alternative to permanent or
indwelling catheters. The underlying
volume growth is driven by the number
of spinal cord injured patients treated
with intermittent catheterisation, the
ageing Western population and
increasing access to healthcare in
emerging markets. Another volume
growth driver is compliance and usage
rates across developed markets.
Price and mix also have an impact on
market growth. As markets mature,
there continues to be an upgrade to
more advanced product categories.
Historically, prices have been under
negative pressure due to healthcare
reforms. No significant healthcare
reforms were implemented during
2020/21.
The COVID-19 pandemic has had a
negative impact on the market growth.
The number of new patients entering
the market during 2020/21 was
depresssed, as treatment was either
cancelled or postponed. Growth in new
patients started to increase across most
markets in the second half of 2020/21,
but it remained below pre-COVID levels,
as some of the candidates for
intermittent catheterisation were not
prioritised or were given alternative
treatments.
The impact of COVID-19 on the
continence care market is expected to
be temporary. The underlying dynamics
and growth drivers of the continence
care market are not expected to
change beyond the pandemic.
MARKET SHARES
Coloplast is the global market leader in
continence care, with a market share of
40–45%. The continence care market is
characterised by four larger global
manufacturers, including Coloplast.
There are also a number of local and
low-priced manufacturers.
REGIONAL MARKET SHARES
45-55%
Share of European markets
2
5-35%
Share of Other developed markets
3
5-45%
Share of
Emerging markets
14-15 bn
Market size
globally in DKK
5-6%
*
Market growth
annually
40-45%
Market share
globally
#1
Market position
globally
European markets
Other developed markets
Emerging markets
* Excluding any impact from COVID-19
Source: Coloplast
Global market
by region
2020/21 PERFORMANCE
Tailwind in Interventional urology business partly due to COVID-19 2019/20
baseline
18
Performance
Interventional Urology generated 19%
organic sales growth in the 2020/21
financial year, with reported revenue in
DKK growing by 14% to DKK 2,097
million.
During the year, elective procedures
resumed across regions and business
areas. Men’s Health and the disposable
surgical products segment returned to
pre-COVID growth levels during the
year. Women’s Health is recovering at a
slower pace, but the trend was positive
in the second half of the year.
Growth was primarily driven by the
Titan® penile implants in the US. Sales
of disposable surgical products in
Europe also contributed positively to
growth as well as the Women’s Health
business in the US.
From a geographical perspective, the
US market was the largest contributor
to growth in Interventional Urology
followed by France.
Coloplast is actively seeking long-term
growth opportunities in adjacent
segments in the Interventional urology
business through inorganic means,
including early-stage equity
investments.
In November 2020, Coloplast acquired
Nine Continents Medical, an early-stage
company pioneering an implantable
tibial nerve stimulation treatment for
over-active bladder. The implantable
tibial nerve stimulation treatment that
Nine Continents has developed falls
under the category of third line
therapies for over-active bladder.
Today, the market for third line
therapies is approx. USD 1 billion in size
and growing mid-single digits. Coloplast
expects to begin a pivotal study in the
US before the end of 2021, with the
ambition to obtain pre-market approval
for a Class III device in the US and EU
market approvals in the 2024-2025
time frame.
During 2020/21, Coloplast also
participated in the Series B equity
financing of Francis Medical, an early-
stage company working on a water
vapor treatment for prostate cancer.
Coloplast made its first investment in
Francis Medical in 2020, when Coloplast
announced a minority equity investment
in the company of USD 4 million (DKK
25 million).
Tailwind in Interventional urology business partly due to COVID-19 2019/20
baseline
Interventional Urology
2.1 bn
Reported revenue
in DKK for 2020/21
19%
Organic growth
at constant
exchange rates
14%
Reported growth
in DKK
Reported revenue included a
negative effect from FX rates.
European markets
Other developed markets
Emerging markets
36%
55%
9%
20/21
geographical
revenue split
OSTOMY CARE • CONTINENCE CARE • INTERVENTIONAL UROLOGY • WOUND & SKIN CARE • FINANCIAL RESULTS
19
Market
MARKET DESCRIPTION
In 2020/21, the global market for
interventional urology products
returned to growth as elective
procedures resumed, increasing to an
estimated DKK 12–13 billion from an
estimated DKK 11–12 billion in the
previous year. Thus, the market size was
back to its pre-COVID level.
The interventional urology market
consists of implantable products within
men’s health and women’s health, and
single-use devices within endourology
and bladder health and surgery.
Roughly half of the market is within the
endourology segment, and the rest is
almost equally divided between the
other three areas.
MARKET GROWTH
The annual market growth is estimated
at 3–5% excluding any short-term
impact from COVID-19.
Market growth in the interventional
urology market is driven by the ageing
population and lifestyle diseases as well
as ongoing innovation leading to more
cost-efficient surgical procedures. For
implants, market growth drivers include
a growing awareness of the treatment
options available for men with severe
impotence and women with urological
disorders.
COVID-19 had a significant negative
impact on the urology market. At the
beginning of the pandemic, during the
first half of 2019/20, many hospitals
postponed or cancelled elective
procedures, and this resulted in negative
market growth during 2019/20.
Over the course of 2020/21, elective
procedures across most markets
resumed, and market growth started to
recover. The market was back to
positive growth in 2020/21.
The impact of COVID-19 on the
interventional urology market is
expected to be temporary. The
underlying dynamics and growth drivers
of the interventional urology market are
not expected to change beyond the
pandemic.
MARKET SHARES
Coloplast holds a market share of about
15% in interventional urology and is the
fourth largest manufacturer within this
market.
Within men’s health and women’s
health, which are mostly US markets,
Coloplast has a market position of
number two and three, respectively, in
the US.
Within endourology in Europe, which
accounts for roughly a quarter of the
total endourology market, Coloplast has
a number two market position.
REGIONAL MARKET SHARES
20-25%
Share of European markets
15
-20%
Share of Other developed markets
5
-10%
Share of
Emerging markets
12-13 bn
Market size
globally in DKK
3-5%
*
Market growth
annually
~15%
Market share
globally
#4
Market position
globally
European markets
Other developed markets
Emerging markets
* Excluding any impact from COVID-19
Source: Coloplast
Global market
by region
2020/21 PERFORMANCE
Wound and skin care business had a strong year partly due to COVID-19
19/20 baseline
20
Performance
Wound & Skin Care generated 8%
organic sales growth for the 2020/21
financial year, with reported revenue in
DKK growing by 6% to DKK 2,485
million.
The wound care business in isolation
delivered organic growth of 11% for the
2020/21 financial year.
The Biatain® Silicone portfolio was the
main growth contributor, followed by
the newly launched Biatain Fiber
portfolio. Biatain Fiber, a gel-forming
fibre dressing used for deeper wounds
and wound cavities with exudate, has
been launched in nine markets and
continues to be well-received.
From a geographical perspective, the
European markets and China were the
main contributors to growth. China
posted solid growth for the financial
year, positively impacted by a lower
baseline in 2019/20 due to COVID-19.
The growth in the European wound
care business was primarily driven by
growth in the Biatain Silicone and
Biatain Fiber portfolios in Germany,
France and Spain.
Growth in the skin care business was flat
for the year, driven by lower demand
due to COVID-19. The Compeed
contract manufacturing business made
a modest positive contribution to
growth as a result of strong growth in
Q4, which was driven by a low baseline
and an improved demand situation.
Wound and skin care business had a strong year partly due to COVID-19
19/20 baseline
Wound & Skin Care
2.5 bn
Reported revenue
in DKK for 2020/21
8%
Organic growth
at constant
exchange rates
6%
Reported growth
in DKK
Reported revenue included a
negative effect from FX rates.
European markets
Other developed markets
Emerging markets
50%
28%
22%
20/21
geographical
revenue split
OSTOMY CARE • CONTINENCE CARE • INTERVENTIONAL UROLOGY • WOUND & SKIN CARE • FINANCIAL RESULTS
21
Market
WOUND CARE
MARKET DESCRIPTION
The market is estimated to be worth
DKK 22–24 billion and is defined as
advanced wound care products
excluding the negative pressure wound
therapy segment. Coloplast is focused
on two of the fastest growing market
segments within advanced wound care -
Silicone Foams and Gelling Fibers, which
account for roughly 45% of the market.
Compared to the chronic care business,
the wound care market is more of a
hospital market, in particular in the US
and China. In Europe, wounds are to a
greater extent treated in the
community.
MARKET GROWTH
The annual market growth is estimated
at 2–4% excluding any short-term
impact from COVID-19. The silicone
foams market, in which Coloplast
markets its Biatain® Silicone products, is
growing faster, at 4–6% per year.
Underlying growth in the wound care
market is driven by the ageing
population, the growing diabetics
population and a growing number of
patients receiving preventive wound
care treatment. Increased competition
between manufacturers and pricing
pressure originating from lower public
healthcare budgets and reimbursement
reforms in Europe have a negative
impact on the market growth.
Growth in the part of the global wound
care segment in which Coloplast
competes has been negatively impacted
by the COVID-19 pandemic. The
underlying dynamics of the global
wound care market are not expected to
change beyond the pandemic.
MARKET SHARES
Coloplast’s global market share in
advanced wound care is 5-10%, making
the company the world’s fifth largest
manufacturer of advanced wound care
products.
The market consists of a large number
of direct competitors ranging from
global manufacturers to small, local
manufactures as well as various
alternative treatment options, such as
negative pressure wound therapy and
traditional wound dressings.
REGIONAL MARKET SHARES
5-10%
Share of European markets
0
-5%
Share of Other developed markets
5
-10%
Share of
Emerging markets
SKIN CARE
The market for skin care products, in
which Coloplast competes, is estimated
at DKK 4–5 billion. Skin Care is a mainly
a hospital business. Patients are treated
in hospital with a variety of skin care
products.
The annual market growth is estimated
at 2–4% excluding any short-term
impact from COVID-19. The underlying
dynamics of the skin care market are
not expected to change beyond the
pandemic.
Coloplast holds a market share of 10-
15% in the fragmented Skin Care
segment, which is mainly a US-based
business.
22-24 bn
Market size*
globally in DKK
2-4%
**
Market growth*
annually
5-10%
Market share*
globally
#5
Market position*
globally
European markets
Other developed markets
Emerging markets
* Market data for Wound Care only
** Excluding any impact from
COVID-19
Source: Coloplast
Global market
by region
(Wound Care)
2020/21 PERFORMANCE
Financial results
22
Earnings
Revenue
The full-year organic growth was 7%,
adversely impacted by lower growth in
new patients due to the COVID-19
pandemic. Reported revenue in DKK
was up by 5% to DKK 19,426 million.
Exchange rate developments decreased
revenue by 2% mainly related to the
depreciation of the USD and several
emerging markets currencies against
DKK in particular ARS, BRL and RUB.
Gross profit
Gross profit was up by 6% to DKK
13,313 million compared to DKK 12,612
million last year and equivalent to a
gross margin of 69%, against 68% last
year. The gross margin included a
negative impact from currencies, mainly
related to the depreciation of USD, ARS
and BRL against DKK, which was only
partly offset by a positive impact from
the depreciation of the HUF against the
DKK. Around 80% of the company’s
production volumes are in Hungary.
The gross profit was positively impacted
by leverage on the production costs and
efficiency gains from the Global
Operations Plan 4 and 5. This was partly
offset by a negative impact from wage
inflation and labour shortages in
Hungary. Higher costs related to scaling
up of activities in Costa Rica also
impacted the gross profit negatively.
The automation programme, which is a
key component of the GOP5 plan, is
progressing according to plan and has
contributed to maintaining a flat level of
blue-collar workers, while ramping up
the volume site in Costa Rica. Increasing
raw material prices had an immaterial
impact on costs, but the impact
increased during Q4.
Costs
Distribution costs amounted to DKK
5,485 million, a DKK 168 million
increase (3%) from DKK 5,317 million
last year. The increase was mainly due
to commercial investments in Asia, the
US, Interventional Urology and
consumer and digital initiatives. The
investments were partly offset by lower
travel and sales & marketing expenses
as a result of the COVID-19 pandemic.
Increasing freight rates had an
immaterial impact on logistic costs but
the impact increased during Q4.
Distribution costs amounted to 28% of
revenue compared to 29% last year.
Administrative expenses amounted to
DKK 762 million, at the same absolute
level as last year. Administrative
expenses accounted for 4% of revenue
which was consistent with last year.
The R&D costs were DKK 755 million, a
DKK 47 million (7%) increase compared
to last year due to an increased activity
level. R&D costs amounted to 4% of
revenue, on par with last year.
Other operating income and other
operating expenses amounted to a net
income of DKK 44 million, against DKK
29 million last year. The increase was
due to the sale of a property in
Denmark (DKK 16 million).
Special items
Coloplast made a further provision of
DKK 200 million, in March 2021, to
cover potential settlements and costs in
connection with lawsuits in the US
alleging injury resulting from the use of
transvaginal surgical mesh products
designed to treat pelvic organ prolapse
and stress urinary incontinence. The
Financial results
EBIT growth of 9% before special items
Income statement, DKK million
2020/21 Index
Revenue
19,426
105
Production costs
-6,113
103
Gross profit
13,313
106
Distribution costs
-5,485
103
Administrative expenses
-762
100
Research and development costs
-755
107
Other operating income
73
149
Other operating expenses
-29
145
Operating profit (EBIT) before special items
6,355
109
Special items
-200
n/a
Operating profit (EBIT)
6,155
105
Financial income
137
685
Financial expenses
-59
14
Profit before tax
6,233
114
Tax on profit for the year
-1,408
111
Net profit for the year
4,825
115
OSTOMY CARE • CONTINENCE CARE • INTERVENTIONAL UROLOGY • WOUND & SKIN CARE • FINANCIAL RESULTS
23
process to resolve outstanding cases is
taking longer than previously
anticipated, including delays due to
COVID-19, which led to an increase in
legal advisory costs. Further settlement
progress has been made and it is now
estimated that 98% of MDL cases have
been settled.
Operating profit (EBIT)
EBIT before special items amounted to
DKK 6,355 million, a DKK 501 million
(9%) increase from DKK 5,854 million
last year. The EBIT margin before
special items was 33% compared to
32% last year. The EBIT margin includes
a negative impact from currencies,
mainly related to the depreciation of
USD against DKK.
EBIT after special items was DKK 6,155
million, including special items of DKK
200 million related to the
aforementioned lawsuits. The EBIT
margin after special items was 32%.
EBIT during 2020/21 was positively
impacted by efficiency gains and lower
travel and sales & marketing expenses
following the COVID-19 outbreak. The
company continued to invest in
innovation and commercial activities in
markets where the COVID-19 situation
had normalised.
Financial items and tax
Financial items were a net income of
DKK 78 million, compared to a net
expense of DKK 388 million last year.
The net income of DKK 78 million was
mainly due to gains on balance sheet
items denominated in several foreign
currencies, including the British Pound
and the Chinese Yuan, of DKK 95
million, and gains on currency hedges of
DKK 19 million on mainly the US dollar.
This was only partly offset, mainly by
other financial expenses and fees of
DKK 32 million.
The tax rate was around 23% for the
financial year, which was in line with last
year. The tax rate this year was
impacted by two separate matters – the
Nine Continents acquisition and a
temporary increase in the tax-
deductible value of R&D expenses in
Denmark. The tax expense amounted to
DKK 1,408 million against DKK 1,269
million last year.
Net profit
Net profit before special items was DKK
4,981 million, a DKK 784 million
increase from DKK 4,197 million last
year. Diluted earnings per share (EPS)
before special items increased by 19%
from DKK 19.67 last year to DKK 23.36.
Net profit after special items was DKK
4,825 million and diluted earnings per
share (EPS) after special items was DKK
22.63.
Cash flows and
investments
Cash flows from operating activities
Cash flows from operating activities
amounted to DKK 5,290 million, against
DKK 4,759 million last year. The positive
development in cash flows from
operating activities was mainly due to an
increase in operating profit (EBIT), an
improvement on financial items and
positive changes in working capital.
Cash flow from operating activities was
impacted by a one-off tax payment
related to Nine Continents exit taxation in
the US.
Continuous
growth (DKK)
6,355 m*
EBIT up from
5,854 m last year
* Before special items
5,290 m
cash flows from
operating
activities
2,011 m
outflow from
investing activities
1,408 m
tax expense
2020/21 PERFORMANCE
Financial results
24
Investments
Coloplast made investments of DKK
1,966 million in 2020/21 compared with
DKK 931 million last year. Investments
related to the acquisition of Nine
Continents Medical amounted to DKK
950 million. Excluding acquisitions,
capex amounted to DKK 1,016 million
or 5% of revenues on par with last year.
The increase in investments was mainly
linked to the new factory in Costa Rica
and the automation programme within
Global Operations.
Free cash flow
As a result, the free cash flow was an
inflow of DKK 3,279 million compared to
an inflow of DKK 3,858 million last year.
Adjusted for the acquisition of Nine
Continents Medical, the free cash flow
was DKK 4,547 million corresponding to
an increase of 18%.
Capital resources
At 30 September 2021, Coloplast had
net interest-bearing debt, including
securities, of DKK 2,112 million, against
DKK 1,162 million at 30 September
2020. The increase in net interest-
bearing debt was mainly due to the
acquisition of Nine Continents Medical in
November 2020.
Statement of financial
position and equity
Balance sheet
At 30 September 2021, total assets
amounted to DKK 15,841 million, an
increase of DKK 2,342 million compared
to 30 September 2020. The increase
was mainly due to an increase in
intangible assets as a result of the DKK
950 million acquisition of Nine
Continents Medical.
Working capital
Working capital was 24% of revenue,
compared to 23% at 30 September
2020. Inventories increased by DKK 201
million to DKK 2,428 million and trade
receivables increased by DKK 278
million to DKK 3,212 million.
Trade payables increased by DKK 222
million relative to 30 September 2020
to stand at DKK 1,036 million.
Equity
Equity increased by DKK 762 million
relative to 30 September 2020 to DKK
8,168 million. Total comprehensive
income for the year of DKK 4,704
million, share-based remuneration of
DKK 50 million and tax on equity entries
of DKK 32 million were only partly offset
by the payment of dividends amounting
to DKK 3,830 million, along with the net
effect of treasury shares bought and
sold of DKK 194 million.
Share buybacks
A share buyback programme of DKK
500 million was initiated in Q2 2020/21
and completed in August 2021.
Treasury shares
At 30 September 2021, Coloplast’s
holding of treasury shares consisted of
3,199,349 B shares, which was 119,646
fewer than at 30 September 2020. The
decrease was due to the exercise of
share options.
Return on invested capital
ROIC after tax before special items was
45% against 46% last year, negatively
impacted by the acquisition of Nine
Continents Medical.
3,830 m
paid dividend in
DKK
15,841 m
total assets in DKK,
increased by 17%
24%
working capital
in % of revenue
45%
return on
invested capital
84%
payout
ratio
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
25
In September 2020, we announced our
new strategy, Strive25 – Sustainable
Growth Leadership.
‘Sustainable’ because it sends an
important signal. Sustainability is an
important enterprise theme.
'Growth' because we want Coloplast to
continue to be an innovative growth
company.
1
Constant currencies, based on FX rates as
at 29 September 2020.
'Leadership' because we aspire to lead
our categories but also because we aim
to evolve the way we lead.
Our strategy has four enterprise wide
themes: Innovation, Unparalleled
efficiency, Sustainability and Talent,
Leadership & Culture. These four
themes are enablers of the revenue
growth and value creation that our
business areas will deliver.
We will continue to focus on value
creation and our ambition with the
Strive25 strategy is to continue to
deliver 7-9% organic growth year-on-
year with an EBIT margin above 30%.
1
In the strategy period, we will continue
to invest up to 2% of annual revenue in
incremental innovation and commercial
activities to drive our growth and value
creation agenda.
OUR BUSINESS
Strategy and markets
Sustainable Growth Leadership
OUR BUSINESS
Strategy and markets
26
We will pursue market leading growth
across all our business areas with a
common theme of innovation and a
geographical emphasis on the US and
China. The strategy will allow us to help
millions more with intimate healthcare
needs.
Innovation
Innovation is a core driver of organic
growth, and we will continue to invest
around 4% of sales in R&D across all
business areas.
The most important initiative in this
strategy period is to deliver on the
Clinical Performance Programme in
Chronic Care, and to launch clinically
differentiated products backed by
clinical evidence.
We will also continue to deliver new
products across all business areas within
existing technologies.
Finally, we are looking to build more
options into the pipeline through organic
initiatives, business development and
M&A. The aim is to create long-term
growth options beyond the strategy
period.
Unparalleled efficiency
The first area of efficiency work is our
Global Operations Plan 5 (GOP5). Since
2008, Global Operations has delivered
significant value through Global
Operations Plans. GOP5 will be different
to the previous plans since opportunities
for cost savings from offshoring
manufacturing no longer exist.
In addition, external factors like wage
inflation and labour shortage in Hungary
put pressure on the overall financial
performance.
In order to deliver a strong platform for
supporting sustainable growth, five
strategic themes in GOP5 have been
selected. They are commercial focus,
automation, seamless supply, network
and footprint as well as simple and cost-
efficient culture.
A key theme in GOP5 is automation at
our volume sites in China and Hungary.
The aim is to be headcount neutral at
our manufacturing sites by the end of
2022/23 financial year.
We also expect to continue to see a
positive scale effect in our business
support organisation driven by further
utilisation of our Coloplast Business
Centre and investments in IT.
Sustainability
At Coloplast, we have always worked on
our sustainability agenda. Now, as part
of Strive25, we have integrated
sustainability into our corporate
strategy. We will support sustainable
development with a strong emphasis on
improving our environmental
performance and we will invest up to
DKK 250 million over the next five years
to support this agenda.
To do so, we have set two new priorities
for sustainability: improving products
and packaging and reducing emissions.
As part of the sustainability agenda, we
will also continue to work on a number
of priorities within the theme
‘Responsible Operations’. Responsible
Operations covers a multitude of topics,
such as employee satisfaction, safety
and health, gender representation in
management, inclusion and diversity,
business ethics and product safety and
quality.
Each of these areas are detailed on
pages 32 to 37.
Talent, leadership and
culture
Coloplast is a global employer with a
strong purpose driven culture. We have
a strong start on employee engagement
and talent promotion that we strive to
maintain. At the heart of delivering on
Strive25 is our people and culture.
The People & Culture agenda is centred
on three themes: evolving how we lead,
talent for future as well as inclusion and
diversity.
Each of these areas are detailed on
pages 36 to 37.
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
27
In September 2020, Coloplast presented the new strategy “Strive25 – Sustainable Growth Leadership”. Below are key
highlights on the progress made during FY 2020/21.
Update on strategic priorities
Growth
US Chronic Care
Expanded the US Ostomy Care sales force in order, to
capitalise on the Vizient and Premier GPO access.
China
Large project initiated with hundreds of ostomy nurses
aimed at raising standards of care for users.
Poland
Significantly improved the reimbursement for hydrophilic
catheters for people with neurogenic bladder, thereby
allowing for a full upgrade to the European standard of
care.
Interventional Urology
Enhanced commercial activities within Men’s Health,
focusing on patient awareness and education programmes.
Innovation
Chronic Care – Clinical Performance Programme
Payer pilot studies on the Digital Ostomy Tool in Germany
and the UK initiated in Q4 2021.
Solid progress on the ostomy and new catheter platforms –
pivotal studies to be initiated in 2021 and 2022.
Wound Care – launch new pipeline
Entered the gelling fibre market in nine markets with the
launch of Biatain® Fiber, an absorbent fibre dressing.
Interventional Urology – enter adjacent segments
Acquisition of Nine Continents Medical, an early-stage
company pioneering a treatment for over-active bladder. A
pivotal study in the US is expected to be initiated before the
end of 2021.
Sustainability
Improving products and packaging
Achieved a breakthrough in waste recycling, with 58% of
production waste recycled, exceeding the 2025 ambition of
50%. New ambition set at 75% of production waste to be
recycled by 2025.
Reducing emissions
Ambitious scope 1, 2 and 3 emission ambitions submitted
for validation to the Science-Based Targets initiative.
Responsible operations
Increased tax transparency by implementing country-by-
country tax reporting.
Operational efficiency
Global Operations Plan 5
Opened the first volume site in Costa Rica. Construction of
the second volume site in Costa Rica in progress and
expected to be operational in the second half of 2021/22
financial year.
The automation programme progressing according to plan,
with 20% of the planned machines installed. The number of
blue-collar FTEs remained flat vs last year.
Business Centre and IT infrastructure
Positive scale effect driven by the further utilisation of the
Coloplast Business Centre and IT infrastructure,
characterised by one ERP and CRM system.
OUR BUSINESS
Strategy and markets
28
Strive25: Sustaining
growth leadership
Our ambition for the Chronic Care
business is to continue to deliver strong
growth above the market. It all starts
with innovation which is our first priority.
As market leader, we are fully
committed to drive and improve
standards of care through better
treatments, technologies, product
categories and training.
Our second priority is to deliver strong,
double-digit growth in the US. With
significant investments in the LEAD20
strategy, the ambition is to deliver
consistent double-digit growth.
Our third priority is to build on our
market leading position in China. At the
core, we aim to sustain growth above
the market in Ostomy Care which will
constitute a significant share of our
global Ostomy Care growth for the
strategy period.
We will continue to drive value upgrade
in Ostomy Care, build our intermittent
catheter business and expand the
consumer business with China-specific
digital solutions.
Beyond China, our stance on Emerging
Markets is to focus on the large core
markets, build on our e-commerce
business and secure Intermittent
Catheters reimbursement in new
markets. Market access is key in
Emerging Markets to establish our
categories in new markets and improve
funding in existing markets. The
ambition for Emerging Markets is to
deliver double-digit growth.
In Europe, we aim to sustain our
leadership position and continue to
deliver above market growth. We will
continue our current path of driving
growth through our direct businesses
and investing in market development
initiatives to drive compliance and
retention. We still see many pockets of
growth in Europe.
Across markets, we continue to
leverage Coloplast Care, our direct
businesses and digital solutions to get
closer to users.
SenSura® Mio Concave
Key highlights 2020/21
During the year, Coloplast made
significant progress on the Clinical
Performance Programme. Key
highlights include:
• For the new Digital Ostomy Tool, the
CE mark has been obtained and
payer pilot studies in Germany and
the UK have been initiated
• On the new Ostomy Platform, an
optimised product design has been
developed and a new pivotal study
will be initiated towards the end of
2021
• On the new Catheter Platform, solid
progress has been made on the
product design and performance,
and the products are now expected
to launch in the first half of the
Strive25 strategy period
We also continued our commercial
investments in high-priority markets.
In the US, we now have access to
around 75% of the acute channel,
through the two biggest Group
Purchasing Organisations, Vizient and
Premier. To capitalise on this, we have
significantly expanded our ostomy care
sales force.
Finally, we continued our investments in
China, especially focusing on digital
offerings.
Chronic Care
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
29
Chronic care market
The chronic care business
The ostomy care and continence care businesses are referred to as Chronic Care because in most cases the products are used to
manage chronic conditions. On average, people with a stoma use stoma pouches for about 10 years and users of intermittent
catheters with a chronic condition use catheters for about 30 years.
Common to both segments is that more than 90% of product sales are reimbursed. Less than 10% of product sales are made through
a hospital or clinical setting, which leaves most of the sales in the community, after users have been discharged from a hospital or clinic.
Users tend to be very loyal to products, and in most cases continue using the same product they have been discharged on from the
hospital or clinic. Therefore, the choice of product and sales through a hospital or clinical setting is essential for Coloplast.
The chronic care user flow
Coloplast has over the past several years invested in building stronger ties with end users and embarked on a journey of becoming a
consumer healthcare company, offering not only the most innovative products, but also supporting services to users through the
Coloplast Care programme. The programme provides knowledge and support around living life with incontinence or a stoma.
Coloplast maintains a database of around two million users currently and offers direct support to end users in more than 30 countries.
Coloplast also sells products directly to end users in its top five markets; the US, the UK, France, Germany and China, ensuring end
users have access to the most innovative products in the market and providing a good service.
Ostomy Care
A stoma is created in an operation necessary in case of intestinal dysfunction due to a disease, an accident or a congenital disorder.
Part of the intestine is surgically redirected through an opening in the abdominal wall, enabling the patient to empty the colon
(colostomy), small intestine (ileostomy) or urinary bladder (urostomy). 50-60% of stoma operations are performed as a consequence of
cancer.
Ostomy bags consist either of an adhesive base plate bonded together with a bag (1-piece system) or of two separate parts in which
the bag is replaced more often than the base plate (2-piece system). It is important for users to avoid leakage and skin irritation, so
they can live as normal a life as possible. As a result, the adhesive must ensure a constant and secure seal, and it must be easy to
remove without causing damage or irritation to the skin. To ensure a personalised fit, users also turn to supporting products.
Continence Care
This business area addresses two types of continence control issues: people unable to empty their bladder or bowel, and people
suffering from urinary or faecal incontinence. People unable to empty their bladder can use an intermittent catheter, which is inserted
through the urethra of the urinary tract to empty the bladder. The main group of users of intermittent catheters are people with a
spinal cord injury that very often is the result of an accident. Other user groups are people with multiple sclerosis and people with
congenital spina bifida. Coloplast's portfolio of intermittent catheters spans the full range from uncoated catheters to discreet, compact
and ready to use, coated in a saline solution, catheters.
Urinary incontinence means that a person has lost the ability to hold urine, resulting in uncontrolled or involuntary release, which is also
called stress urinary incontinence. Incontinence affects older people more often than younger people because the sphincter muscle
and the pelvic muscles gradually weaken as people grow older. Coloplast has a wide range of urine bags and urisheaths for capturing
and storing urine. This is a segment with many suppliers, including low-cost providers.
People suffering from bowel or sphincter muscle dysfunction can use the Peristeen® anal irrigation system for controlled emptying of
the bowels. A typical Peristeen user has a spinal cord injury and has therefore lost the ability to control bowel movements.
OUR BUSINESS
Strategy and markets
30
Strive25: Drive growth
with 3DFit Technology
Our view is that we have a stronger
starting point for our wound & skin care
business than we have ever had, and
our aim is to deliver growth above the
market and expand margins.
We will continue to focus on the fast-
growing silicone category with our
Biatain® Silicone portfolio with 3DFit
Technology, which is our point of
differentiation.
As with Chronic Care, two individual
markets really matter – China and the
US – and we will structure for success in
these markets to deliver on the global
ambition and strategy.
In China, we will scale our business by
strengthening our commercial
foundation and building a stronger
position in the silicone market.
In the US, we will scale our business in
the hospital channel with 3DFit
Technology and maximise the
commercial potential of our skin care
portfolio.
In Europe, we will build on the
momentum we have created with 3DFit
Technology and aim to take market
leadership positions.
In Emerging Markets, we will accelerate
growth in key markets by investing in
selected markets.
We must deliver innovations and strong
life cycle management to the markets
we want to grow in.
Key highlights 2020/21
During the year, we drove solid market
share gains in the two market segments
we are focused on – silicone foams and
gelling fibres, especially in Europe.
The Biatain Silicone portfolio posted
solid growth above the market and
Biatain Silicone
Coloplast is now the third largest player
in the silicone foams market in Europe.
Coloplast entered the gelling fibre
market this year with the launch of
Biatain Fiber, an absorbent fibre
dressing used to reduce exudate pooling
in exuding wounds. The portfolio has
been launched in nine markets and has
been well received, especially in
Germany and France.
Wound & Skin Care
Wound & Skin Care Market
In Wound Care, patients are treated for chronic wounds such as leg ulcers, which are
typically caused by insufficient or impaired circulation in the veins of the leg, pressure
ulcers caused by extended bed rest, or diabetic foot ulcers. Most chronic wounds
contain exudate, varying from small amounts to high levels.
A good wound dressing should provide optimum conditions for wound healing, is easy
for healthcare professionals to change, and should ensure that patients are not
inconvenienced by exudate, liquid or odours. A moist wound environment provides
the best conditions for wound healing for optimum exudate absorption.
The Coloplast product portfolio consists of advanced foam dressings sold under the
Biatain Silicone with 3DFit Technology and Biatain brand and hydrocolloid dressings
sold under the Comfeel® brand.
Coloplast's skin care products consist of disinfectant liquids or creams used to protect
and treat the skin and clean wounds. For the treatment and prevention of skin fold
problems such as fungal infections, damaged skin or odour nuisance, Coloplast sells
InterDry®, a textile placed in a skin fold to absorb moisture. Coloplast mostly sells skin
care products to hospitals and clinics in the US and Canadian markets.
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
31
Strive25: On the move
for patients
Interventional Urology represents an
important growth opportunity for the
Group in line with the conclusions from
our strategic review concluded in 2019.
Interventional Urology transforms life
for patients suffering from urological
conditions by advancing interventional
treatment solutions.
The base case for the business is to
deliver high single digit organic growth
and sustain strong profitability.
On the portfolio side, we will increase
our investments into enhancing our core
businesses by substantially increasing
our investments in R&D.
We will actively pursue M&A and
distribution agreements in high-growth
adjacent segments.
We also see good organic opportunities
in working with the existing portfolio in
new geographies.
In North America, we currently mainly
sell implantable devices. During the
strategy period, we will drive our global
market share in Endourology by
launching the portfolio to the US.
In Europe, we will focus on driving
growth in Men’s Health through patient
education and Endourology growth
through portfolio expansion.
Finally, we will look into expanding our
presence in Emerging Markets in a
select number of high potential
countries.
Key highlights 2020/21
During the year, Coloplast took the first
steps towards expanding the
endourology business in the US, through
the launch of the product portfolio and
investments into a specialised sales
force.
As part of the strategy to pursue M&A
in adjacent segments, Coloplast made
two investments during 2020/21.
In November 2020, Coloplast acquired
Nine Continents Medical, an early-stage
company pioneering an implantable
tibial nerve stimulation treatment for
over-active bladder. A pivotal study in
the US is expected to be initiated before
the end of 2021.
In September 2021, Coloplast
participated in the Series B financing of
Francis Medical, an early-stage
company working on a water vapor
treatment for prostate cancer.
Coloplast’s stake in Francis Medical is
around 13%.
Titan® Touch
Interventional Urology
Interventional
urology market
Within Interventional Urology
patients are treated for various
urological conditions, such as kidney
stones, pelvic floor prolapse and
stress urinary incontinence (specific
for women) and urinary
incontinence, enlarged prostate and
impotence (specific for men).
The business area consists of a
broad portfolio of products used in
connection with urological and
gynaecological surgery procedures
and includes both implants and
disposable products.
Coloplast manufactures and
markets disposable products for use
before, during and after surgery,
such as prostate catheters and
stents, some of them under the
Porgès brand.
The implant business manufactures
vaginal slings used to restore
continence and synthetic mesh
products used to treat a weak pelvic
floor.
The business also includes penile
implants for men experiencing
severe impotence that cannot be
treated by using drugs.
OUR BUSINESS
Sustainability
32
Coloplast’s mission supports social
development in society. By making life
easier for people with intimate health
care needs, we enable people to take
part in society.
Since 2002, Coloplast has been part of
the UN Global Compact. This underlines
our commitment to make sustainability
easier for our users without
compromising product safety and
clinical performance. Our users do not
choose their conditions and they should
never be concerned about using
Coloplast products in any way.
As part of our corporate strategy,
Strive25, we have assessed our impacts
and priorities. We can do even more to
reduce the impacts from products and
packaging and reduce our emissions.
Furthermore, we have an ongoing
commitment to ensure responsible
operations, and we will invest up to DKK
250 million to deliver on our
sustainability ambitions. Along with this,
we are committed to report step-by-
step according to the Task Force on
Climate-related Financial Disclosures
(TCFD) framework.
The Sustainability Report ensures
compliance with the requirements of
Section 99a, 99b and 107d of the
Danish Financial Statements Act.
Download our
Sustainability report
https://sustainability.coloplast.com/s
ustainability/reporting/reports/
Sustainability
Making sustainability easy for users
Commitments
UN Global Compact
principles
2025 ambitions
2020/21
2019/20
Strive25
priority areas
Improving
products and
packaging
Principle 7-9
90% of packaging is recyclable
80% of packaging consists of renewable materials
75
% of production waste is recycled
75%
70%
58%
75%
70%
41%
Reducing
emissions
1)
Principle 7-9
Net
-zero scope 1 and 2 emissions
2) 3)
100% renewable energy
50% electric company cars
50% scope 3 emissions reduced per product by 2030
3)
10% reduction of air travel vs 2018/19 and then freeze
5% limit on goods transported by air
23,100
67%
2%
10%
81%
2%
21,000
67%
1%
0.3%
45%
4%
Ongoing commitment
Responsible
operations
Principle 1-6, 10
100% white collars trained in Code of Conduct
2.0
lost time injury frequency
4)
30% representation of female senior
leaders
75% share of diverse teams
Engagement score above industry benchmark
99%
2.2
24%
50%
8.2
%
98
%
2.5
24%
51
%
7.9
%
1)
From base year 2018/19,
2)
In tonnes CO2e,
3)
Targets submitted to Science-Based Targets initiative (SBTi) for validation,
4)
In ppm
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
33
Our position on plastic
As a manufacturer of medical products
made of plastic, Coloplast has a
responsibility and has clear priorities;
• Product safety and clinical
performance cannot be
compromised.
• Single use products are the easiest
and safest option for our users.
• Sustainability should be easy for our
users.
• We need to identify new materials
and support the development of
new technologies.
• Partnerships across the industry are
essential.
Read the full position on plastic on our
website.
Our substance position
In 2020/21, Coloplast developed a
position on substances to make its
ambitions clear:
• All Coloplast products are
biocompatible and safe for the
intended purpose.
• Coloplast is mindful when selecting
materials and substances used in its
products and complies with
international and local regulations
and standards, including REACH and
the California proposition 65 list.
• Coloplast monitors regulations,
science and technology to identify
opportunities and risks to proactively
substitute substances if needed.
Read the full position on substances on
our website.
Business Ambition for
1.5°C
In 2020/21, Coloplast committed to the
Business Ambition for 1.5°C, aligning
with the Paris Agreement and have
submitted our scope 1, 2 and 3 emission
reduction ambitions to the Science-
Based Targets initiative (SBTi) for
validation. Our ambition is to become
net-zero in scope 1 and 2 and use
100% renewable energy by 2025 and
by 2030, Coloplast aims to reduce 50%
scope 3 emissions per product.
During 2020/21, Coloplast performed
an emission screening to map all value
chain activities. In additionally, Coloplast
reached out to 50 of its raw material
suppliers responsible for 70% of its
scope 3 emissions from raw materials to
improve data quality.
Our supplier ambitions
During 2020/21, Coloplast developed a
new Supplier Sustainability Programme
to map its supply chain impact within
direct and indirect suppliers. This
includes an evaluation of suppliers’
sustainability practices. Coloplast
developed a materiality assessment to
identify which suppliers are exposed to
sustainability risks e.g. violating human
rights, environmental laws, health and
safety or ethical standards.
Next year, Coloplast will initiate a pilot
to verify the materiality assessment and
evaluation process in order to develop
and design the final programme. By
2025, Coloplast aims to address 100%
of its direct and indirect suppliers in tier
one through the Supplier Sustainability
Programme.
Our positions and ambitions
Our new
ambitions
75%
production waste
recycled by 2025
Net-zero
scope 1 and 2
emissions by 2025*
50%
scope 3 emissions
reduced per
product by 2030*
* Targets submitted to Science-Based
Targets initiative (SBTi) for validation
OUR BUSINESS
Sustainability
34
As a manufacturer of medical products
made primarily of plastic, Coloplast
embraces the responsibility to
contribute to solving the problems with
plastic waste and wants to support the
UN Sustainable Development Goal
(SDG) 12 on responsible production and
consumption. However, within
healthcare there are distinct clinical and
regulatory limitations to reducing plastic
waste.
Coloplast users depend on Coloplast
products to live the life they want and
are increasingly concerned about
environmental impacts.
Coloplast incorporates environmental
performance when developing new
products, but we can do better in
designing our products and packaging
to be recyclable and made of renewable
materials (such as recycled or biobased)
with less environmental impact.
Renewable and
recyclable packaging
While there are strict limitations on our
products, there are more possibilities
when it comes to packaging. For our
products currently on the market, we
have initiated packaging projects with
the ambition of providing our users with
90% recyclable packaging and 80%
packaging consisting of renewable
materials by 2025. Our secondary and
tertiary packaging material, such as
retail and shipper boxes, are already
consisting of renewable materials and
are recyclable. Most of these come from
sustainable forestry.
In 2020/21, we have focused our efforts
on primary packaging, which is part of
the product. We have carried out
internal investigations to find recyclable
solutions for converting multilayer foil
packaging which helps to hold the saline
solution in intermittent catheters. We
also launched a project to convert virgin
PET plastic trays to recycled PET plastic
trays used in ostomy protective seals
and baseplates within our supporting
product portfolio.
Applying sustainability
in innovation
The primary method used by Coloplast
to address environmental challenges is
to incorporate eco-design principles
when developing new products.
Waste recycling
During 2020/21, a new pilot project in
Hungary led to a breakthrough in
Coloplast’s waste recycling resulting in
58% of production waste being recycled
– and exceeding our previously set
ambition of 50% in 2025.
The recycled waste is used by a local
waste handling company in producing
rubber flooring for sports fields, railway
systems, riding halls, building insulation
and kindergartens.
As Coloplast is committed to making
further improvements, and as we have
already achieved our previous 2025
ambition, we have set a new ambition of
increasing our recycling rate to 75% by
2025.
Improving products and packaging
Key figures
SHARE OF RECYCLABLE
PACKAGING*
SHARE OF PACKAGING
CONTAINING RENEWABLE
MATERIALS*
RECYCLING RATE OF
PRODUCTION WASTE
* Packaging ambitions covering
products currently on the market
90%
75%
2025 ambition 2020/21
80%
70%
2025 ambition 2020/21
75%
58%
2025 ambition 2020/21
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
35
Using energy from
renewable sources
With the Strive25 strategy, Coloplast
aims to use 100% renewable energy by
2025. Our plan is to procure electricity
from renewable sources and phase out
the use of natural gas. Coloplast has
committed to investing approximately
DKK 100 million in CAPEX to achieve
this ambition.
Climate-related criteria in remuneration
for Executive Management will be
implemented from 2021/22 financial
year.
Coloplast currently covers 100% of
electricity use with renewable energy,
effectively reducing our emissions with
more than 29,000 tonnes CO
2e.
Coloplast will replace our Renewable
Energy Certificates covering electricity
use with Power-Purchasing Agreements
(PPAs) at all global sites that ensures
additionality by establishing new
renewable power sources on Coloplast’s
request. In 2020/21, we have been in
dialogue with renewable energy
suppliers globally and have initiated a
project to install solar panels on the roof
of our Minneapolis site in the US. Our
new site in Costa Rica is already using
100% renewable electricity from the
grid.
During 2020/21, we have investigated
scenarios for phasing out natural gas at
our global sites focusing on Denmark,
Hungary and the US. We are currently
working with engineering consultants to
have the technical plans finalised and
ready for implementation in 2021/22.
Electric company cars
Coloplast operates a car fleet consisting
of around 2,000 cars, which emitted
11,500 tonnes CO
2e in 2020/21. To
reduce its impact, Coloplast will shift to
electric company cars with an ambition
of 100% by 2030 and 50% by 2025.
Reducing scope 3
emissions
Out of the total scope 3 emissions, 67%
of Coloplast’s scope 3 emissions are
from raw materials. Therefore, in
2020/21, Coloplast initiated an
engagement with 50 of its raw material
suppliers responsible for 70% of the raw
material emissions to start a dialogue
about identifying materials with a lower
environmental footprint and to get more
detailed emission data from the
suppliers.
We will continue to increase our
engagement with direct and indirect
suppliers across the value chain. In
2020/21, Coloplast reduced scope 3
emissions by 10% per product. This was
mainly due to using less air freight for
the transportation of goods such as
shipping items from our production site
in Hungary to China using rail transport.
Additionally, due to COVID-19, our
business travel was significantly
reduced.
Reducing emissions
Key figures
SHARE OF RENEWABLE ENERGY
BUSINESS TRAVELS*
* Reduction based on 2018/19
levels. Ambitions is 10% reduction
vs. 2018/19 and then freeze.
Scope 1 and 2 - Natural gas &
c
ompany cars
Scope 3 - Raw materials
Scope 3 - Transportations of
goods & fuel and energy
-related
activities
Scope 3 - Other reported
100%
67%
2025 ambition 2020/21
45%
81%
2019/20 2020/21
176,900
tonnes CO
2e
in 2020/21
OUR BUSINESS
Sustainability
36
Evolving how we lead
During 2020/21 as a first priority, to
enable strong execution of our Strive25
strategy, Coloplast introduced our new
leadership promise which builds on our
existing strong purpose-driven company
culture: we aim high, we simplify, we
empower, and we are inclusive. This
year, our focus has been on making our
leadership promise come alive through
our leaders. All our senior leaders (VP+)
are going through an extensive leader-
ship journey. We also continue to run
our Business Leadership Programme for
our Director level leaders.
To secure strong leadership focus, we
track progress on two key metrics:
employee engagement and voluntary
employee turnover.
Employee engagement
Coloplast tracks employee engagement
twice a year. Despite the continued
interference from COVID-19, Coloplast
sees a highly engaged workforce.
During 2020/21, the engagement score
was 8.2 compared to 7.9 in 2019/20,
with a response rate of 90%. The score
is above the Healthcare industry
benchmark and places Coloplast in the
top 25th percentile.
Employee turnover
Voluntary turnover level in 2020/21
reached 10.1%, compared to 8.2% in
2019/20, which, however, is still below
the pre-COVID-19 level. Coloplast has
seen a positive effect on voluntary
turnover rates during COVID-19.
Flexible working and
safety
COVID-19 has had far-reaching
consequences for our daily lives and
ways of working together. Coloplast
quickly adapted its ways of working, its
processes, and digital platforms to
support a home office set-up. Coloplast
has now launched an updated global
position on flexible working to stay an
attractive, inclusive and modern
workplace.
Providing a safe and healthy work
environment for our employees is a core
value for Coloplast. Safety is
everybody’s responsibility in Coloplast -
both managers and employees.
This year, Coloplast’s lost-time injury
frequency was 2.2 ppm. Coloplast has
thereby achieved the ambition to
reduce the LTI frequency to 2.8 ppm by
2021. The ambition is to be 2.0 ppm by
2025.
Talent for future
Attracting and developing talent is a
core element of ensuring Coloplast has
the best people for the future. We hire
for careers, not just jobs, which means
that we mobilise and develop talent to
secure strong succession for critical
managerial positions.
This year, 59% of critical managerial
positions were filled by internal
candidates. This is below our 67%
aspiration as we have taken in external
talent in key leadership positions.
People and culture
Key figures
12,728
Employees at
year-end (FTEs)
8.2 of 10
employee
engagement score
compared to 7.9 in 2019/20
10.1%
voluntary
employee turnover
in 2020/21
compared to 8.2% in 2019/20
2.2 ppm
lost time injury
frequency
compared to 2.5 ppm in
2019/20
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
37
It is part of Coloplast’s DNA to respect
the individual and secure equal
opportunities for all. Coloplast is
committed to building an inclusive
culture that leverages diversity at all
levels. Inclusion and diversity are
integrated in all our people processes
including our global recruitment process
and performance evaluation, and is now
also an integrated element in our
leadership promise ‘We are inclusive’.
Inclusive workplace
environment
Coloplast wants every employee to feel
that they belong in the company, to
bring their differences to work daily and
to fulfil their potential because of and
not despite of their differences.
Coloplast prohibits any kind of dis-
crimination or harassment of employees
due to their gender identity, age, race,
ethnicity, nationality, sexual orientation,
religious belief, social and economic
background, physical or mental ability
etc. This is formalised in our Inclusion &
Diversity policy, Anti-Harassment and
Anti-Discrimination policy as well as the
Anti-Retaliation policy which are
available on our website.
Diverse teams
We believe that diversity in teams leads
to better innovation, performance and
decisions. Therefore, we have chosen to
lead and drive diversity through teams
and strive to ensure a healthy balance
of gender, generation and nationality in
each team. To increase the share of
diverse teams, we track and monitor the
mix of diversity in all teams from the
director level and above. It is Coloplast’s
ambition to reach a share of 75%
diverse teams before 2025 through
natural turnover. In 2020/21, the share
of diverse teams was 50%, compared to
51% in 2019/20. Over the past two
years, VPs and above have made five-
year action plans for how to create
diverse teams within their area of
responsibility. This year, our Director
level leaders will also create plans to
meet our ambition. Successful diverse
teams only flourish if we lead inclusively
– we, therefore offer unconscious bias
e-learning to all and inclusive leadership
training to our leaders.
Gender representation
in management
Coloplast continues to track and
monitor progress on gender
representation at all levels. During
2020/21, Coloplast signed the
Confederation of Danish Industry’s
Gender Diversity Pledge, committing to
a target of 40/60 gender distribution in
management and our board of directors
by 2030. In 2020/21, Coloplast had
46% female managers at or above
manager level from 43% last year.
However, looking at senior leadership*
alone, there is an underrepresentation
of females. This year, the share of
female senior leaders is 24%, which is
the same as last year. To ensure
progress on gender representation, as
well as diversity, Coloplast has
implemented different initiatives
including monitoring the diversity in our
succession pipelines and talent pools, a
new global recruitment process that
mitigates biases and ensures diversity in
all our recruitments and engagement in
multiple diversity related events, boards
and partnerships globally.
Inclusion and diversity
Gender
composition of our
people managers
Share of female
senior leaders*
Diversity at team
level
* Senior leadership comprising Vice
Presidents, Senior Vice Presidents
and the Executive Leadership Team.
46%
of leaders are
female (2020/21)
30%
24%
2025 ambition 2020/21
75%
50%
2025 ambition 2020/21
OUR BUSINESS
How we manage the risks of doing business
38
Risk reporting process
and governance
The management of the individual
business units and group functions is
responsible for identifying, assessing and
managing risks in their specific parts of
the organisation. The most significant
risks to our business over a five-year
horizon are reported quarterly to Group
Risk Management. The reporting
process and supporting interviews form
the basis of the quarterly risk update
submitted to the Executive Leadership
Team and the Board of Directors.
The Executive Leadership Team is
responsible for defining Coloplast’s
overall risk profile, and for setting
standards for risk taking and for aligning
it with the overall strategies and policies.
The Executive Leadership Team is also
responsible for launching and approving
activities to address the most significant
risks.
The Board of Directors monitors the
overall risk landscape and reviews, on a
quarterly basis, the conclusions and
recommendations submitted by the
Executive Leadership Team.
In our risk reporting, we have identified
a range of significant risks believed to
have the potential to threaten and
adversely impact the Group’s business
model, strategy, and future
performance.
Those risks are categorised and
described on the following pages, along
with examples of action taken to
mitigate them. Each risk is linked to one
or more of the themes of Coloplast’s
strategy Strive25.
Coloplast’s most significant risk
categories are largely unchanged as to
impact and likelihood assessment
compared to last year.
How we manage the risks of doing business
The current risk landscape
Coloplast’s most significant risk
categories are:
Legal and compliance
Pricing and reimbursement
Product quality and safety
Product innovation and
development
Production and business
continuity
Climate
Cyber
Impact
Likelihood
PQS
PR
PBC
PID
LC
LC
PR
PQS
PID
PBC
CLR
CRR
CLR
CRR
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
39
Legal and compliance
Risk description
Coloplast operates in a heavily
regulated industry that is subject to
various laws and regulations across
geographies and business areas. The
different legal environments can be
unpredictable and politically motivated,
and
as a market leader, Coloplast could
face legal risks at any given time. In
addition, there is growing public
awareness of business ethics,
enforcement of anti
-
corruption laws and
protection of personal data. It is at the
heart of Coloplast’s culture to act
with
respect and responsibility and to comply
with the laws and regulations. Despite
these efforts, Coloplast recognises that
mistakes may happen when people are
involved and, therefore, takes relevant
action should a situation arise.
Risk examples
Viola
tions of anti-corruption laws and
non
-compliance with Coloplast’s own
and the industry’s codes of conduct
could damage Coloplast’s reputation
and involve a risk of monetary fines.
Lawsuits filed by competitors or
customers or investigations by
authorities into certain business
practices could have a negative
reputational and financial impact.
Risk response
Ensuring that all employees receive
training in Coloplast’s Code of Conduct
(BEST) which also include training in the
company’s IT policies.
Currently 99% of
all white collar are trained.
Ensuring that business partners are
aware of Coloplast’s ethical standards
including our codes of conduct for
Distributors and Suppliers and that they
work with us to continuously maintain
and develop compli
ance practices.
We have established an i
ndependent
and confidential ethics hotline for
reporting of unethical situations,
violations, and misconduct.
Climate related risks
In 2020/21, Coloplast committed to report step-by-step
according to the Task Force on Climate-related Financial
Disclosures (TCFD) framework. Coloplast signed the
business ambition for 1.5°C, aligning with the Paris
agreement and submitted climate targets to the Science-
Based Targets initiative (SBTi) for validation. The aim is to
become net zero in scope 1 and 2 by 2025 and reduce
scope 3 emissions per product by 50% by 2030.
Based on a preliminary climate risk assessment, physical
risks such as rising water levels at Coloplast facilities and
extreme weather patterns affecting supply chain were
identified. Transitional risks such as demand for more
sustainable products and packaging and further legal
requirements with focus on ESG (Environmental, Social and
Governance) for supply chain were also identified.
Going forward, climate-related risks and opportunities will
be aligned with the business, strategy, and financial
planning based on scenario analysis for reporting. Climate-
related criteria in remuneration for Executive Management
will be implemented from 2021/22 financial year.
Cyber-related risks
Coloplast follow the ISO 27001 to constantly drive
improvement and validate performance of the Information
Security Management System through audits and risk
management. Coloplast received the initial ISO 27001
certification in October 2017 and added two manufacturing
sites to our 2020 recertification. All certified sites are
internally audited annually in addition to the external audits
as required under the certification.
There is a robust Information Security risk management
process to identify, assess, report, and mitigate risks with a
direct link to the quarterly Group risk reporting process.
Confidence in our internal organisational and technical
controls are enhanced by external security assessments.
Coloplast do annual test and review of ISO 27001-certified
IT contingency plans, investments in IT security and risk
transfer solutions.
Coloplast ambition is to continuously raise our information
security maturity in parallel to ensuring cyber resilient
capabilities within IT service and business continuity.
OUR BUSINESS
How we manage the risks of doing business
40
Pricing and reimbursement
Description
A large part of Coloplast’s products
is
sold in markets that are subsidised and
eligible for reimbursement from local
health care authorities. As a result, the
prices of Coloplast’s products are
influenced by the economic and political
developments in national markets,
budgetary constraints of
governments
and health care reforms, bargaining
power of large wholesalers and
distributors, a
s well as Coloplast’s ability
to convince buyers of the economic
value of its products based on clinical
evidence, costs, and patient outcomes
.
Risk examples
Low
er reimbursements and increasing
price pressure due to healthcare and
price reforms. No bigger healthcare
reforms are currently expected for the
next fiscal year 2021/22, and global
price erosion remain up to 1% per year.
Lack of or inadequate clinical ev
idence
to support reimbursement levels.
Global or local political and economic
matters, such as interest rate or
currency volatility.
Risk response
Monitoring economic and political
developments, and changes to public
sector guidelines and reimbursement
schemes.
Interaction with health care authorities,
patient associations and industry
associations to try to prevent, postpone
or minimise the impact.
Financial risk management, including
hedging in accordance with Coloplast’s
financial mandate (see not
e 22 and 23
to the financial statements).
Product quality and safety
Description
Coloplast is committed to ensuring the
quality of its products and the safety of
its users, including organising the
security of personal data. All Coloplast
products must comply with the medical
device directives and legislation imposed
by local health care authorities, such as
the US Food and Drug Administration
(FDA) and the new EU Medical Device
Regulation (MDR).
Coloplast has successfully passed the
first key milestone of May 2021
,
including received the
first MDR
certificate
and are working towards
having all products gradually certified in
accordance with the transition period
authorized by MDR
.
Risk examples
Loss of licences to sell or
manufacture
due to non
-compliance with new laws
and regulations on medical devices in
force from time to time.
Defects and omissions and critical
product quality and safety issues in
product design and manufacturing that
could disrupt operations, sales, l
ead to
product recalls, bodily injury, and
product liability claims.
Non
-compliance with data protection
legislation or personal data leaks that
could lead to monetary fines and
damage Coloplast’s reputation.
Risk response
Ensuring that Coloplast continu
ously
develops and improves its control
processes and quality procedures, from
the design phase to post
-market
surveillance.
Monitoring legislation and market
standards to ensure that any
amendments or changes are
incorporated into internal procedures.
Certification of our Quality Management
Systems to the national and
international standards and carrying out
internal and external audits.
STRATEGY AND MARKETS • SUSTAINABILITY AND PEOPLE • RISK MANAGEMENT
41
Product innovation and development
Description
It is essential that Coloplast maintains a
competitive and innovative product
pipeline that meets the needs of the
users. To achieve this, Coloplast relies
on its ability to interact with end users
and health care professionals, to protect
intellectual pro
perty against
infringement from competitors and to
understand
the surgical and medical
trends that may impact or limit sales.
Risk example
Medical and technological innovations
disrupting Coloplast’s core business.
Lack of innovation increasingly resulting
in a commoditisation trend, allowing the
entry of low
-cost competitors,
potentially increasing price pressures
and diminishing clinical differentiation of
the products on the market and
resulting in a loss of market share.
Infringem
ent of intellectual property
rights may reduce Coloplast’s
competitive advantages and negatively
impact sales.
Risk response
Investing in new innovative growth
initiatives for the purpose of developing
superior and clinically differentiated
products, such
as our clinical
performance programme.
Patenting to prevent competitors from
copying Coloplast products or from
producing technical equivalent
alternatives.
Monitoring surgical and medical
developments and disruptive
technologies that may impact the
var
ious business areas.
Production and business continuity
Description
Coloplast operates facilities all over the
world, the most recent addition being
the establishment of manufacturing
facilities in Costa Rica. Most production
takes place at
central facilities and in
some cases, Coloplast purchases raw
materials and components used in
production from sole suppliers for
reasons of availability, quality assurance
and cost effectiveness.
The pandemic, high demand in Asia, and
supply disruptions
in Europe and the
US
have led to a bullwhip effect on global
demand that is impacting global raw
material prices. Coloplast already have
risk responses in place (as described to
the right). In addition, we have increased
our focus on
the timely communication
of forecasts and orders and on
execution of improvement projects in
GOP5.
Risk example
Major disruption at a manufacturing or
distribution facility due to natural
disasters or other emergencies, such as
fire and pandemics, may disrupt
Coloplast’s ability to manufacture and
distribute its products.
A major disruption of the supply chain
due to force majeure situations, change
in market conditions, strikes or other
events beyond Coloplast’s control,
which could result in, price increases
,
inability to source critical raw materials
and
the disruption of the supply to
customers.
Risk response
Implemented emergency response and
contingency plans, keeping critical
processes and workflows physically
separated and having all
the relevant
facil
ities certified to the ‘highly-
protected risk’ industry standards.
Identified high
-risk suppliers and
prepared contingency plans, including
maintaining multiple inventories, dual
supplier qualification for raw materials,
and qualification of
substitute materials
where applicable.
Built up additional inventory as a
contingency for potential fluctuations in
demand or supply chain disruptions.
GOVERNANCE & OWNERSHIP
Corporate governance
42
Governance structure
Coloplast has a two-tier management
structure comprising the Board of
Directors and the Executive Leadership
Team. There are no overlapping
members.
The Board of Directors determines the
Group's objectives, strategies and
overall action plans. On behalf of the
shareholders, the Board of Directors
supervises the company's organisation,
day-to-day management and results.
The Board of Directors also sets
guidelines for the Executive Leadership
Team’s execution of the day-to-day
management of the company and for
assigning tasks among the individual
members of the Executive Leadership
Team.
The Board of Directors and the
Executive Leadership Team further
assess the company’s business
processes, the definition and
implementation of the mission, the
organisation, stakeholder relations,
strategy, risks, business objectives and
controls.
A set of rules of procedure governs the
work of Coloplast's Board of Directors.
These rules are reviewed annually by
the Board of Directors and updated as
necessary. The rules set out the
guidelines for the activities of the Board
of Directors.
Six members of the Board of Directors
are elected at the general meeting and
three members of the Board of
Directors are elected by the employees.
Four out of six shareholder-elected
members are considered to be
independent in accordance with the
Danish corporate governance
recommendations.
Nine board meetings were held in the
2020/21 financial year, of which two
were extraordinary meetings and one
was a strategy meeting.
GOVERNANCE & OWNERSHIP
Corporate governance
Corporate governance at Coloplast
OVERVIEW OF BOARD MEMBERS
Board member
Audit
Comm.
Rem. &
Nomin.
Comm.
Indepen
-
den
t
Nationality
Gender
Board
tenure
Election
period
Board meetings attended
3)
Lars Rasmussen
,
Chairman
1)
No
Danish
Male
3
years
1 year
Niels Peter Louis
-Hansen,
Deputy Chairman
1)
No
Danish
Male
5
3 years
1 year
Marianne Wiinholt
1) 3)
Yes
Norwegian
Fem
ale
1 year
1 year
Birgitte Nielsen
1)
Yes
Danish
Female
6
years
1 year
Jette Nygaard
-Andersen
1)
Yes
Danish
Female
6
years
1 year
Carsten Hellmann
1)
Yes
Danish
Male
4
years
1 year
Thomas Barfod
2)
No
Danish
Male
1
5 years
4 years
Roland V. Pedersen
2)
No
Danish
Male
3
years
4 years
Nikolaj Kyhe Gundersen
2)
No
Danish
Male
3
years
4 years
1)
Shareholder-elected board member.
2)
Employee-elected board member.
3
)
Jørgen Tang-Jensen attended three out of three board meetings before he left the Board of Directors on the Annual General Meeting 3 December 2020 where
he was replaced by Marianne Wi
inholt.
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
43
Committee structure
The Board of Directors has established
two committees: an Audit Committee
and a Remuneration and Nomination
Committee.
Five Audit Committee meetings were
held in the 2020/21 financial year, of
which one was an extraordinary
meeting.
Three Remuneration and Nomination
Committee meetings were held in the
2020/21 financial year.
AUDIT COMMITTEE
Committee member
Meetings attended
1)
Marianne Wiinholt,
Chairman
1)
Lars Rasmussen
Birgitte Nielsen
Carsten Hellmann
1
)
Jørgen Tang-Jensen attended one out of one audit committee meeting before he left the Board of
Directors on the Annual General Meeting 3 December 2020
where he was replaced by Marianne Wiinholt.
REMUNERATION
AND NOMINATION COMMITTEE
Committee member
Meetings attended
Lars Rasmussen
, Chairman
Niels
Peter Louis-Hansen
Jette Nygaard
-Andersen
Activities and responsibilities of the
Audit Committee
Activities and responsibilities of the
Remuneration and Nomination Committee
The
Audit Committee is, among others, responsible for
monitoring
the following:
•
The financial reporting and associated processes, including the
statutory audit of the financial statements.
•
The company’s internal control systems and risk management
systems, including insurance matters.
•
Review of the Group’s IT security and the auditors’ annual IT
audit.
•
The independence of the auditors, including the provision of
non-audit services to the Group.
•
The procedure of selecting and making
recommendation to the
Board of Directors in respect of the appointment of auditors.
•
Activities reported through the Coloplast Ethics Hotline.
In the 2020/21 financial year, the main activities have been:
•
Evaluating and implementing country-by-country tax reporting.
•
Defining sustainability ambitions, including external sustainability
reporting.
• Evaluating the provision relating to the mesh litigation.
The
Remuneration and Nomination Committee is, among
others, responsible for the oversight of:
•
The competence profile and composition of the Board of
Directors.
•
Nomination of members to the Board of Directors.
•
Nomination of members to the Board committees.
•
The leadership pipelines.
•
The remuneration policy for the members of the Board of
Directors and the Executive Management
and other tasks on an
ad hoc basis as specifically determined by the Board of
Directors.
In the 2020/21 financial year, the main activities have been:
•
Redesigning the short-
term incentive structure for the Executive
Leadership Team to include one or more sustainability
ambitions.
•
Proposing a new candidate to the Board of Directors as one
board member has decided not to seek re-election.
•
Conducting the annual board self-assessment.
GOVERNANCE & OWNERSHIP
Corporate governance
44
Assessment of the work
performed by the Board
of Directors
Every year, the Board of Directors
conducts a self-assessment. Based on
the result of this assessment, the
organisation and efficiency of the Board
of Directors' work are discussed at a
Board meeting.
In 2021, the annual self-assessment of
the Board of Directors was performed
without external assistance as the
Board of Directors has decided that the
self-assessment will be carried out with
external support every second year. The
self-assessment consisted of
conversations between the Chairman of
the Board of Directors and each board
member as well as each member of the
Executive Leadership Team and a
bespoke, online questionnaire in which
board members as well as the Executive
Leadership Team participated
anonymously.
The self-assessment shows that there is
an open and transparent dialogue
between the Board of Directors and the
Executive Leadership Team, and the
board committees serve as good
vehicles for framing the discussions in
the Board of Directors and ensure that
key risks are addressed.
Furthermore, the self-assessment shows
that the composition of the Board of
Directors, including relevant
competencies, to a large extent
matches what the Board of Directors
considers necessary to best perform its
tasks, such as finance, digital
transformation, customer experience,
commercialisation, industry knowledge,
general management, innovation, legal
affairs and acquisitions. However, over
time the Board would like strengthen its
competences within Innovation in light
of the new strategy.
During the past year, the Board of
Directors has spent a significant amount
of time discussing and addressing
challenges caused by COVID-19.
Furthermore, the Board of Directors has
monitored and discussed the progress
made one year into Coloplast’s Strive25
strategy which was announced to the
market on 29 September 2020.
Clear governance and diverse board profiles ensure that the Board of
Directors can operate efficiently
and support the company’s strategy.
4 out of 6
shareholder-
elected members
are independent
Independent
Not independent
Gender
composition of
shareholder-
elected members
Female
Male
4/6
are independent
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
45
Remuneration of the
Board of Directors and
the Executive
Management
At the Coloplast Annual General
Meeting held on 3 December 2020, the
shareholders adopted an updated
Remuneration Policy for Coloplast,
which had been prepared by the Board
of Directors. The Remuneration Policy is
available on the company’s website.
Coloplast has also prepared a
Remuneration Report detailing, among
other things, the remuneration to the
Board of Directors and the Executive
Management which complies with
Section 139(b) of the Danish Companies
Act. The Remuneration Report was
presented and adopted at the Annual
General Meeting held on 3 December
2020.
Download the
Remuneration
Report
www.coloplast.com/remuneration
-
reports/
Recommendations on
Corporate governance
The recommendations of the
Committee on Corporate Governance
were revised in November 2017 and
applies to the financial years
commencing on or after 1 January
2018. The company reports on these
recommendations as also required by
Supplement A – Nasdaq Copenhagen to
Nasdaq’s Nordic Main Market Rulebook
for Issuers of Shares. The Board of
Directors reviews the recommendations
in force on a regular basis and at least
once a year. The Board of Directors and
the Executive Leadership Team share
the committee's views and generally
follow the recommendations.
The recommendations consist of 47
individual recommendations. Coloplast
complies fully with 45 recommendations
corresponding to 96%.
New recommendations on corporate
governance have been adopted by the
Committee on Corporate Governance
and these new recommendations apply
to financial years starting 1 January
2021 or thereafter. Accordingly,
Coloplast will report on the new
recommendations in the financial year
2021/22.
Coloplast’s position on each of the
recommendations as well as a
description of the internal control and risk
management system relating to financial
reporting can be found in the Corporate
Governance Report which is prepared
pursuant to Section 107(b) of the Danish
Financial Statements Act.
Data ethics policy
The Board of Directors has adopted a
Data Ethics Policy which applies to all
Coloplast group companies. In working
with data, Coloplast ensures that
appropriate measures are in place to
safeguard ethical data processing, and it
has implemented extensive security
measures to ensure secure storage of
data.
Coloplast adheres to a high standard of
data ethics and solely uses and
processes data for legitimate purposes
that serves shared benefit for all
interested parties. Data processing in
Coloplast must never lead to any form
of discrimination or biased decisions,
decision-making or results. Regardless
of how Coloplast collects data, Coloplast
always respects applicable data privacy
laws. When sharing data, Coloplast
imposes high standards on the
recipients to ensure appropriate data
security.
Coloplast never sells data.
Download the Corporate
Governance
Report
www.coloplast.com/corporate
-
governance/
GOVERNANCE & OWNERSHIP
The Board of Directors
46
The Board of Directors
Meet our Board of Directors
Lars Rasmussen
Chairman of the Board
,
non
-independent
Born 1959. Lars
Rasmussen has extensive
executive management and board
experience from international listed
companies in the med
-tech and pharma
industry. He possesses in
-depth knowledge
within
the commercialisation of innovation,
B2B and B2C sales models and efficiency
i
mprovements.
Other board
and management positions:
•
H. Lundbeck A/S: Chairman of the
Board, Chairman of the Remuneration
and Nomination C
ommittee and member
of the Audit Committee
•
Igonomix S.L.: Chairman of the Board
•
Danish Committee of Corporate
Governance: Chairman
•
University of Copenhagen: Board
member
J
oined the Board of Directors in 2018.
Niels Peter Louis
-Hansen
Deputy Chairman of the Board
,
non
-independent
Born 1947. Through decades of board work,
Niels Peter Louis
-Hansen has gained in-dept
h
knowledge of the industries in which
Coloplast operates, its dynamics and key
players as well as deep insight into strategy
development. Furthermore, Niels Peter
Louis
-Hansen is a key contributor to
preserving the Coloplast
-culture.
Other board a
nd management positions:
•
Aage og Johanne Louis-Hansens Fond:
Chairman of the Board
•
Aage og Johanne Louis-Hansen A/S:
Chairman of the Board
•
N. P. Louis-Hansen ApS: CEO
•
NPLH Property Investments ApS: CEO
•
NPLH Anpartsinvest ApS: CEO
J
oined the Board of Directors in 1968.
Birgitte Nielsen
Board member, independent
Born 1963. Birgitte Nielsen has extensive
management experience and considerable
board experience from both listed companies
and large privately held companies within the
med
-tech industry and the financial sector.
Birgitte Nielsen has extensive financial and
accounting experience as well as in
-depth
knowledge of the financial markets.
Other board and management positions:
•
Matas A/S: Board member and
Chairman of the Audit Committee
•
De Forenede Ejendomsselskaber A/S:
Board member
•
Kirk Kapital A/S: Board member
•
Topsøe Holding A/S: Board member
•
SameSystem A/S: Board member
•
Danmark Genopretningsfond A/S: Board
member
Joined the Board of Directors in 2015.
See the full CVs of the Board of
Directors
on our website
https://www.coloplast.com/about
-
coloplast/management1/
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
47
Carsten Hellmann
Board member, independent
Born 1964.
Carsten Hellmann has
considerable executive management
experience and extensive experience in
product development and international
commerciali
sation within highly regulated
industries as well as M&A activities, including
post integration.
Other board and
management positions:
•
ALK-Abelló A/S: President & CEO
•
Copenhagen Capacity: Board member
•
The Danish Chamber of Commerce:
Board member
Joined the Board of Directors in 2017
.
Jette Nygaard
-Andersen
Board member, independent
Born 1968. Jette
Nygaard-Andersen has
considerable executive management and
board experience within global med
-tech,
media & entertainment, and digital growth
businesses. She has extensive experience
within business and marketing strategies,
digital transformation, optimis
ation of
customer experience and engagement,
working with digital growth start
-
ups globally
and M&A activities, including post integration.
Other board and management positions:
•
Entain plc: CEO & Executive Director
•
BetMGM, LLC: Board member
Joined the
Board of Directors in 2015.
Marianne Wiinholt
Board member, independent
Born 1965. Marianne Wiinholt
has
considerable executive management
experience and extensive experience within
finance and accounting. Furthermore,
Marianne Wiinholt has considerable
knowledge and experience in leading, driving
and delivering a sustainability agenda on a
global scale.
Other board and management positions:
•
Ørsted A/S: CFO
•
Norsk Hydro ASA: Board member and
Chairman of the Audit Committee
Joined the Board of Directors in 2020.
Thomas Barfod
Employee
-elected board member
Born
1970. Title: Senior Controller.
Joined the Board of Directors in 2006.
Roland V. Pedersen
Employee
-elected board member
Born 1962. Title: Lead Negotiator.
Joined the Board of Directors in 2018.
Nikolaj Kyhe Gundersen
Employee
-elected board member
Born 1969. Title:
Skilled Precision Engineer.
Joined the Board of Directors in 2018.
GOVERNANCE & OWNERSHIP
48
The Executive Leadership Team
Meet our Executive Leadership Team
Kristian Villumsen
President & CEO
With Coloplast since 2008.
Educational background:
MA Political Science, Aarhus University
MA in Public Policy, Harvard
University
Kennedy School of Government
Other board positions:
Demant
A/S: Board member
and member of
the Audit Committee
Anders Lonning
-Skovgaard
Executive Vice President, CFO
With Coloplast since 2006.
Educational background:
MSc
Finance and Accounting, Aarhus
University
Allan Rasmussen
Executive Vice President, Global Operations
With Coloplast since 1992.
Educational background:
BPSE, IMD
E*MBA, Scandinavian International
Management Institute
BSc (Mech. Eng.),
Technical University of
Denmark
Paul Marcun
Executive Vice President, Growth
With Coloplast since 2015.
Educational background:
MBA in Corporate Finance & Marketing,
Sydney University of Technology
Nicolai Buhl Andersen
Executive Vice
President, Innovation
With Coloplast since 20
05.
Educational background:
MA in Economics & Business, Copenhagen
Business School and Sophia University, Japan
Camilla G. Møhl
Senior Vice President, People & Culture
With Coloplast since 20
16.
Educational b
ackground:
MA in Human Resource Management,
Copenhagen Business School
CORPORATE GOVERNANCE • BOARD OF DIRECTORS • EXECUTIVE LEADERSHIP TEAM • OWNERSHIP AND MAJOR SHAREHOLDERS
49
Ownership and
shareholdings
The company had 49,660 shareholders
at the end of the financial year, which
was 7,545 more than last year.
Institutional investors based outside
Denmark held 38% of Coloplast's shares
on 30 September 2021, compared to
37% a year earlier. Registered
shareholders represented 96% of the
entire share capital.
Pursuant to the company's articles of
association, shares must be registered in
the name of the holder to carry voting
rights. Three shareholders have
reported to the company, pursuant to
section 55 of the Danish Companies Act
and section 38 of the Danish Capital
Markets Act, that at the date of this
annual report they held 5% or more of
the share capital or voting rights.
Ownership and major shareholders
Residence
Ownership
share
Voting
rights
Shareholders with
ownership or
voting rights of more than 5%
Niels Peter Louis
-Hansen¹⁾
Vedbæk
20.7% 41.1%
Aage og Johanne Louis
-Hansens A/S²⁾
Nivå
11.5% 15.2%
Benedicte Find
Humlebæk
3.7% 5.4%
¹
⁾ In addition to the personally held shares, Niels Peter Louis-
Hansen's wholly owned company
N. P. Louis
-Hansen ApS, has an additional 0.5% ownership representing 0.3% of the votes.
²
⁾ Wholly owned by Aage og Johanne Louis-Hansens Fond.
A
shares
'000 units
B shares
'000 units
Ownership
share
Voting
rights
Ownership structure of
Holders of A shares and their
families
18,000
78,871
45% 68%
Danish institutions
- 10,758
5% 3%
Foreign institutions
- 81,526
38% 22%
-
3,199
1% 0%
Other shareholders
- 15,775
7% 4%
Non
-registered shareholders - 7,871
4% 0%
Total
18,000
198,000
100%
97%
³
⁾ The 3,199,349 shares held by Coloplast on 30 September 2021, equivalent to 1% of the
share capital, are treasury shares without voting rights.
A shares
'000 units
B shares
'000 units
Number of
insiders
Shares held by
management
Board of Directors, non
-independent directors 12,285
33,862
5
Board of Directors, independent directors
- 6
4
Executive Management
- 91
5
Total
12,285
33,959
14
GOVERNANCE & OWNERSHIP
50
Share classes and
authorisations
Coloplast’s share capital is DKK 216
million divided into DKK 18 million A
shares and DKK 198 million B shares.
Each A and B share has a nominal value
of DKK 1.
Each A share entitles the holders to ten
votes and each B share entitles the
holders to one vote. The A shares are
non-negotiable instruments. The B
shares are negotiable instruments and
were listed on the Copenhagen Stock
Exchange (Nasdaq Copenhagen) in
1983. Any change of ownership or
pledging of A shares requires the consent
of the Board of Directors, whereas B
shares are freely negotiable.
The Board of Directors may increase the
company's share capital by a nominal
value of up to DKK 15 million in one or
more issues of B shares either with or
without pre-emption rights for existing
shareholders. The authorisation is valid
until and including 4 December 2023.
Moreover, the Board of Directors has
been authorised to acquire treasury
shares of up to 10% of the company's
share capital provided that the
company’s total holding of treasury
shares does not exceed 10% of the
company’s share capital at any time. The
highest and lowest amount to be paid for
the shares by the company is the price
applicable at the time of purchase +/-
10%. This authorisation is valid until and
including 4 December 2024.
At general meetings, matters are decided
by a simple majority of votes. Resolutions
to amend the company's articles of
association require that not less than half
of the share capital is represented and
that the resolution is adopted by not less
than two-thirds of the votes cast as well
as of the voting share capital represented
at the general meeting. The resolution
lapses if the above-mentioned share
capital is not represented, or if a
resolution is not adopted by two-thirds of
the votes cast. If a resolution is adopted
by two-thirds of the votes cast but
without at least half of the share capital
being represented, the Board of
Directors must convene a new
extraordinary general meeting within two
weeks.
If, at this meeting, the resolution is
adopted by not less than two-thirds of
the votes cast and of the voting share
capital represented, it will be passed
irrespective of the amount of the share
capital represented at the meeting.
In the event of a change of control in the
company resulting from a change of
ownership, issued share options will be
subject to accelerated vesting. No other
important agreements are in place that
would be affected in the event of a
change of control of the company
resulting from a takeover, and no special
agreements have been made between
the company, its management or
employees if their positions are
discontinued due to a change of
ownership. There are no special
provisions governing the election of
members to Coloplast's Board of
Directors.
Ownership and major shareholders
Open and
transparent
communication
Coloplast has established a policy for
communicating information to investors
and shareholders, under which the
Executive Leadership Team and the
Investor Relations team are in charge of
communications pursuant to guidelines
agreed with the Board of Directors. The
communication of information complies
with the rules laid down by Nasdaq,
comprising:
• Full-year and interim financial
statements and the annual report.
• Replies to enquiries from analysts,
investors and shareholders.
• Site visits by investors and analysts.
• Presentations to Danish and foreign
investors.
• Capital markets days for analysts and
investors.
• Conference calls in connection with
the release of financial statements.
• Dedicated investor relations section
on Coloplast’s corporate website.
51
Consolidated
financial
statements
CONSOLIDATED FINANCIAL STATEMENTS
52
Statement of comprehensive income
1 October – 30 September
DKK million
Note 2020/21 2019/20
Revenue
4 19,426 18,544
Production costs
5, 11, 12, 13 -6,113 -5,932
Gross profit
Distribution costs
5, 11, 12, 13 -5,485 -5,317
Administrative expenses
5, 11, 12, 13 -762 -762
Research and development costs
5, 11, 12, 13 -755 -708
Other operating income
Other operating expenses
-29 -20
Operating profit (EBIT) before special items
Special items
6 -200 -
Operating profit (EBIT)
Financial income
7 137 20
Financial expenses
7 -59 -408
Profit before tax
Tax on
profit for the year 8 -1,408 -1,269
Net profit for the year
Remeasurements of defined benefit plans
18 -11 12
Tax on remeasurements of defined benefit plans
Items that will not be
reclassified to the income statement -8
Value adjustment of currency hedging
-110 55
Transferred to financial items
-19 90
Tax effect of hedging
Currency adjustment of opening balances and other market value
adjustments relating
to subsidiaries
-11 -252
Tax effect of currency adjustment, assets in foreign currency
-1 12
Items that may be reclassified to the income statement
-113 -127
Total other comprehensive income
-121 -119
Total comprehensive income
DKK
Earnings per share (EPS)
9 22.67 19.74
Earnings per share (EPS), diluted
9 22.63 19.67
Statement of comprehensive income and cash flows
CONSOLIDATED FINANCIAL STATEMENTS
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • LIST OF NOTES • NOTES
53
Statement of cash flows
1 October – 30 September
DKK million
Note 2020/21 2019/20
Operating profit
Depreciation and amortisation
Adjustment for other non
-cash operating items 24 -31 -135
Changes in working capital
24 -75 -352
Ingoing interest payments, etc.
Outgoing interest payments, etc.
-81 -191
Income tax paid
-1,501 -1,277
Cash flows from operating activities
Investments in intangible assets
-1,047 -85
Investments in land and buildings
-8 -18
Investments in plant and machinery and other fixtures and fittings, tools and equipment
-102 -42
Investments in property, plant and equipment under construction
-809 -786
Property, plant
and equipment sold
Investment in other investments
-14 -26
Acquisition of operations
-97 -
Net sales/purchase of marketable securities
Cash flows from investing activities
-2,011 -901
Free cash
flow 3,279 3,858
Dividend to shareholders
-3,830 -3,612
Acquisition of treasury shares
-500 -500
Sale of treasury shares
Financing from shareholders
-4,024 -3,705
Repayment of lease
liabilities 24 -202 -197
Drawdown on credit facilities
24 1,050 45
Cash flows from financing activities
-3,176 -3,857
Net cash flows
Cash and cash equivalents at 1 October
Value
adjustment of cash and bank balances
Cash and cash equivalents, acquired operations
Net cash flows
Cash and cash equivalents at 30 September
25 448 323
CONSOLIDATED FINANCIAL STATEMENTS
54
Assets
At 30 September
DKK
million Note 2021 2020
Intangible assets
11 3,651 2,364
Property, plant and equipment
12 3,785 3,311
Right
-of-use assets 13 601 615
Other equity investments
Deferred tax asset
14 743 669
Other
receivables 16 26 24
Non
-current assets 8,847 7,010
Inventories
15 2,428 2,227
Trade receivables
16 3,212 2,934
Income tax
Other receivables
Prepayments
Marketable
securities
Cash and cash equivalents
Current assets
Assets
Balance sheet
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
55
Equity and liabilities
At 30 September
DKK million
Note 2021 2020
Share capital
Currency translation reserve
-392 -375
Reserve for currency hedging
-41 60
Proposed ordinary dividend for the year
Retained earnings
Equity
9, 10 8,168 7,406
Provisions for pensions and similar liabilities
18 181 176
Provision for deferred tax
14 671 369
Other provisions
19 56 128
Lease liability
Prepayments
Non
-current liabilities 1,359 1,114
Provisions for pensions and similar liabilities
18 15 13
Other provisions
19 150 159
Other credit institutions
20 2,160 1,111
Trade payables
Income tax
Other payables
Lease liability
Prepayments
26 8 9
Current
liabilities 6,314 4,979
Equity and liabilities
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
56
Statement of changes in equity, current year
At 30 September
Share capital Reserves
DKK million
A shares
B shares
Currency
translation
Currency
hedging
Proposed
dividend
Retained
earnings
Total
2020/21
Equity at 1 October
Net profit for the year
Other comprehensive income
Total comprehensive income
Acquisition of treasury shares
Sale of treasury shares
Share
-based payment - - - - - 50 50
Tax on share
-based payment, etc. - - - - - 32 32
Interim dividend paid out in respect of
2020/21
Dividend paid out in respect of
2019/20
Transactions with shareholders
Equity at 30 September
Statement of changes in equity
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
57
Statement of changes in equity, last year
At 30 September
Share capital Reserves
DKK million
A shares
B shares
Currency
translation
Currency
hedging
Proposed
dividend
Retained
earnings
Total
2019/20
Equity at 1 October
Net profit for the year
Other comprehensive income
Total comprehensive income
Transfers
- - - - -1 1 -
Acquisition of treasury shares
Sale of treasury shares
Share
-based payment - - - - - 39 39
Tax on share
-based payment, etc. - - - - - 81 81
Interim dividend paid out in respect of
2019/20
Dividend paid out in respect of
2018/19
Transactions with shareholders
Equity at 30 September
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
58
Key accounting policies
1 Basis of preparation
2 Changes in accounting policies
3 General accounting policies
Profit and loss
4 Segment information
5 Staff costs
6 Special items
7 Financial income and expenses
8 Tax on profit for the year
9 Earnings per share (EPS)
10 Dividend per share
Assets and liabilities
11 Intangible assets
12 Property, plant and equipment
13 Right-of-use assets
14 Deferred tax
15 Inventories
16 Trade receivables and other receivables
17 Share options
18 Provisions for pensions and similar obligations
19 Other provisions
20 Credit institutions
21 Financial instruments by category
22 Financial risks
23 Derivative financial instruments
Cash flows and credit facilities
24 Specifications of cash flow from operating
and financing activities
25 Cash and cash equivalents
Other disclosures
26 Public grants
27 Contingent liabilities and guarantees
28 Remuneration of the Board of Directors and
Executive Management
29 Related party transactions
30 Fees to auditors appointed by the Annual
General Meeting
31 Events occurring after the balance sheet date
32 Acquisitions
33 Company overview
34 Definitions of key ratios
Notes to the consolidated financial statements
List of notes
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
59
Note 1
Basis of preparation
The consolidated financial statements for 2020/2021 have been prepared in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the EU and additional disclosure requirements pursuant to the Danish Financial
Statements Act for Class D companies.
General information
The annual report has been prepared on the basis of the historical cost principle, modified in that certain financial assets and
liabilities are measured at fair value. Subsequent to initial recognition, the assets and liabilities are measured as described below
in respect of each individual item or in the relevant note.
Significant estimates and judgements
In connection with the practical use of the accounting policies described, it may be necessary for Management to make
estimates in respect of the accounting items. The estimates and assumptions applied are based on historical experience and
other factors that Management considers reasonable under the circumstances, but which are inherently uncertain and
unpredictable. Such assumptions may be incomplete or inaccurate, and unexpected events or circumstances may arise. In
addition, the company is subject to risks and uncertainties that may cause actual outcomes to deviate from these estimates.
It may be necessary to change previous estimates as a result of changes to the assumptions on which the estimates were based
or due to new information or subsequent events.
A further description of the principal accounting estimates and judgements is provided in the relevant notes.
Management has made accounting estimates and judgements in respect of the following areas:
Area
Estimate/
judgement
Note
Risk of
impact and
degree of
estimation
Goodwill and other intangible assets
Estimate and
judgement
11
Inventories
Estimate
1
5
Deferred tax assets and uncertain tax positions
Estimate
14
Trade receivables and bad debts
Estimate
16
Provisions for litigation about transvaginal surgical mesh products
Estimate
6,
19
Other provisions
Estimate
19
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
60
Note 2
Changes in accounting policies
Effective from the 2020/21 financial year, the Coloplast Group has implemented all new, updated or amended international
financial reporting standards and interpretations (IFRSs) as issued by the IASB and IFRSs adopted by the EU that are effective
for the 2020/21 financial year.
Coloplast has adopted the amendments to IFRS 3. The amendments narrow and clarify the definition of a business and permit a
simplified assessment of whether an acquired set of activities and assets is a group of assets rather than a business
(concentration test). The amendments are applied prospectively to all business combinations and asset acquisitions with an
acquisition date on or after 1 October 2020.
The implementation of new, updated or amended international financial reporting standards and interpretations (IFRSs and
IFRICs) did not, in all material respects, affect the financial statements.
New financial reporting standards to be adopted
New and amended standards are implemented when taking effect.
Coloplast has made an initial assessment of the impact of the agenda decision in relation to Cloud Computing Arrangement.
Based on the initial assessment, this decision is not expected to have a significant impact on the profit/loss statement or equity.
A final assessment is expected to be conducted in Q1 2021/22.
Reporting standards or interpretations which are not adopted by the EU have not been applied in this annual report.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
61
Note 3
General accounting policies
This section provides a summary of significant accounting policies, and other general accounting policies. A detailed description
of the accounting policies applied and the estimates made relative to each individual item is provided in relevant notes, such that
all information about a specific accounting item can be found there.
Foreign currency
The financial statement items of individual Group entities are measured in the currency used in the primary economic
environment in which the entity operates (functional currency). The consolidated financial statements are presented in Danish
kroner (DKK), which is the functional and presentation currency of the parent company. Other currencies are considered foreign
currencies.
Translation of foreign currencies
Transactions denominated in foreign currencies are translated into an entity’s functional currency at the exchange rate
prevailing at the transaction date.
Monetary items denominated in foreign currencies are translated at the exchange rate prevailing at the balance sheet date.
Exchange adjustments arising as the difference between exchange rates at the balance sheet date and exchange rates at the
transaction date of monetary items are recognised in the income statement as financial income or expenses.
On translation of entities with a functional currency other than DKK, balance sheet items are translated at the exchange rates at
the balance sheet date and income statement items are translated at the exchange rates at the transaction date. The resulting
exchange adjustments are taken directly to other comprehensive income.
The Argentinian economy has been considered a hyperinflation economy effective from 1 July 2018. Accordingly, the Group’s
Argentinian subsidiary is recognised in accordance with IAS 29. The subsidiary’s financial statements were inflation adjusted at a
retail price index increase of 60.5% (source: Bloomberg) prior to recognition in the consolidated financial statements. The
income statement and the balance sheet of the inflation-adjusted financial statements are included in the consolidated financial
statements at the exchange rate applying at the balance sheet date standing at 6.49.
Consolidation, business combinations and associates
The consolidated financial statements comprise the financial statements of Coloplast A/S (the parent company) and enterprises
(subsidiaries) controlled by the parent company. The parent company is considered to exercise control when it has power over
the relevant activities of the enterprise, is exposed or has rights to a variable return from the investment and has the ability to
affect those returns through its power.
The consolidated financial statements are prepared by aggregating the financial statements of the parent company and the
individual subsidiaries, all of which are prepared in accordance with the Group’s accounting policies. Intra-group transactions,
balances, dividends and unrealised gains and losses on transactions between Group companies are eliminated.
Enterprises, which are not subsidiaries but in which the Group holds at least 20% of the voting rights or otherwise exerts a
significant influence, are regarded as associates. The Group’s proportionate share of unrealised gains and losses on transactions
between the Coloplast Group and associates is eliminated.
Enterprises recently acquired or divested are included in the consolidation in the period in which the Coloplast Group has control
of the enterprise. Comparative figures are not restated to reflect acquisitions. Divested activities are shown separately as
discontinued operations.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
62
Note 3, continued
Acquisitions are accounted for using the purchase method, according to which the assets and liabilities and contingent liabilities
of enterprises acquired are measured at fair value at the date of acquisition.
Goodwill on the acquisition of subsidiaries or associates is calculated as the difference between the fair value of the
consideration and the fair value of the Group companies’ proportionate share of identifiable assets less liabilities and contingent
liabilities at the date of acquisition.
The consideration for an enterprise consists of the fair value of the agreed consideration for the acquired enterprise. If part of
the consideration is contingent on future events, such part is recognised at its fair value at the date of acquisition. Costs directly
attributable to business combinations are recognised directly in the income statement as administrative expenses when
incurred.
In cases where the fair value of acquired identifiable assets, liabilities or contingent liabilities subsequently turns out to differ from
the values calculated at the date of acquisition, the calculation, including goodwill is adjusted until up to 12 months after the
date of acquisition. Subsequently, goodwill is not adjusted. Changes to the estimates of contingent consideration are generally
recognised in the income statement.
Goodwill arising in connection with the acquisition of subsidiaries is recognised in the balance sheet under intangible assets in the
consolidated financial statements and tested annually for impairment.
Revenue
Revenue comprises income from the sale of goods after deduction of any price reductions, quantity discounts or cash discounts.
Sales transactions are recognised in the income statement at the point in time when control of the goods is transferred to the
customer, and when the consideration is assessed to be collectible. Revenues from sales transactions are measured at the
amount of consideration to which Coloplast expects to be entitled.
Within all segments, revenues are typically recognised when the customer takes possession of the goods. Exceptions to this
comprise Urology Care revenues, as revenues from certain surgical products are generated from consignment sales as well as
the contract manufacturing business. Certain surgical products within Urology Care are always available at our partner hospitals
to ensure that all sizes and fits are always available. Revenues from consignment sales are recognised as the goods are used (i.e.
in surgery). Revenues from contract manufacturing business is recognised when the products are available for delivery when
this coincides with the transfer of control of the products.
Coloplast generates most of its sales through distributors that operate under various conditions and who for that reason require
varying sales agreements. Coloplast’s distributor agreements contain volume and product-specific rebates, which require data
management and monitoring of sales to individual distributors at the product level. In addition, the sales agreements contain
various right-of-product-return requirements.
Payment terms for trade receivables from customers depend on creditworthiness, customary business practices and contract
negotiations. Payment terms for some customers include a period of credit which commences when the products are shipped
while other customers are requested to pay in advance or provide appropriate collateral for the payment. Prepayments from
customers are recognised as revenue in the following period upon satisfying the performance obligations.
Variable considerations include volume and product-specific rebates which, for some markets, are accumulated and paid
annually or quarterly. Accruals for variable considerations are constrained by uncertainty of future events, such as the expected
volume of sales, and require significant judgement.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
63
Note 3, continued
Revenue is measured at the fair value of the agreed consideration. All discounts granted are recognised in revenue. An estimate
of expected returns is also recognised in revenue.
Coloplast has chosen to adopt the practical expedient in IFRS 15, para 63 associated with the determination of whether a
significant financing component exists for transactions where payment is expected in less than 12 months from the delivery of
goods (transfer of control).
Marketable securities
Marketable securities are part of a portfolio which is managed and measured on a fair value basis as per transaction date.
Adjustments to fair value is recognised through profit or loss as financial items.
Bonds forming part of repo transactions, i.e. the sale of bonds that are bought back at a later date remain classified as financial
assets in the balance sheet, while amounts received from repo transactions are recognised as repo debt. Returns on such bonds
are recognised under financials.
Cash flow statement
The consolidated cash flow statement, which is presented according to the indirect method, shows the Group’s cash flow from
operating, investing and financing activities as well as the Group’s cash and cash equivalents and short-term debt to credit
institutions at the beginning and end of the year. Cash and cash equivalents comprise cash and debt to credit institutions
recognised under current assets and current liabilities, respectively. Marketable securities include bonds with maturities of more
than three months and are recognised under investing activities.
Reporting under the ESEF Regulation
The Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) has
introduced a single electronic reporting format for the annual financial reports of issuers with securities listed on the EU
regulated markets.
The ESEF Regulation sets out the following main requirements: (1) Issuers shall draw up and disclose their annual financial
reports using the XHTML format; and (2) issuers that draw-up their primary consolidated financial statements in accordance
with IFRS as endorsed by the EU shall tag those consolidated financial statements using inline eXtensible Business Reporting
Language (iXBRL) and with effect from the 2022 annual report block-tag the notes to the consolidated financial statements.
The combination of the XHTML format with the iXBRL tags makes the annual financial reports both human-readable and
machine-readable, thus enhancing accessibility, analysis and comparability of the information included in the annual financial
reports.
iXBRL tags shall comply with the ESEF taxonomy, which is included in the ESEF Regulation and developed based on the IFRS
taxonomy published by the IFRS Foundation.
As part of the tagging process financial statement line items are marked up to elements in the ESEF taxonomy. If a financial
statement line item is not defined in the ESEF taxonomy, an extension to the taxonomy is created. Extensions have to be
anchored to elements in the ESEF taxonomy, except for extensions which are subtotals.
The annual report submitted to the Danish Financial Supervisory Authority (The Officially Appointed Mechanisms) consists of the
XHTML document together with some technical files all included in a ZIP file named Coloplast-2021-09-30-da.ZIP.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
64
Note 4
Segment information
Segmentation of the income statement
The operating segment Chronic Care covers the sale of ostomy care products and continence care products. The operating
segment Interventional Urology covers the sale of urological products, including disposable products, as well as R&D activities.
The operating segment Wound & Skin Care covers the sale of wound & skin care products. The reporting segments are also
Chronic Care, Interventional Urology and Wound & Skin Care. The segmentation reflects the structure of reporting to the
Executive Management.
The shared/non-allocated comprises support functions (production units and staff) and eliminations, as these functions do not
generate revenue. While the costs of R&D for Interventional Urology are included in the segment operating profit/loss for that
segment, R&D activities for Chronic Care and Wound & Skin Care are shared functions which are included in shared/non-
allocated. Financial items and income tax are not allocated to the operating segments.
Chronic Care
Interventional
Urology Wound & Skin Care Group
DKK million
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
Segment revenue:
Ostomy Care 7,841
7,538 - - - - 7,841
7,538
Continence Care 7,003
6,819 - - - - 7,003
6,819
Interventional Urology - - 2,097
1,835
- - 2,097
1,835
Wound & Skin Care - - - - 2,485
2,352 2,485
2,352
External revenue as per the Statement of
comprehensive income
14,844
14,357 2,097
1,835
2,485
2,352 19,426
18,544
Costs allocated to segment
-6,070
-6,039 -1,279
-1,181
-1,456
-1,411 -8,805
-8,631
Segment operating profit/loss
8,774
8,318 818
654
1,029
941 10,621
9,913
Shared/non
-allocated
-4,266
-4,059
Special items not included in segment operating
profit/loss (see note 6 to the financial statements) -200
-
Operating profit before tax (EBIT) as per the Statement of comprehensive income
6,155
5,854
Net financials
78
-388
Tax on profit/loss for the year
-1,408
-1,269
Profit/loss for the year as per the Statement of comprehensive income
4,825
4,197
Management reviews each operating segment separately, applying their market contributions to earnings and allocating
resources on that basis. The market contribution is defined as external revenue less the sum of direct production costs,
distribution, sales and marketing costs and administrative expenses. Costs are allocated directly to segments. Certain immaterial
indirect costs are allocated systematically to the shared/non-allocated and the reporting segments.
Notes to the consolidated financial statements
Accounting policies
The operating segments are defined on the basis of the monthly reporting to the Executive Management, which is considered the
senior operational management, and the management structure. Reporting to Management is based on three operating segments:
Chronic Care, Interventional Urology and Wound & Skin Care.
Management does not receive reporting on assets and liabilities by reporting segments. Accordingly, the reporting segments are not
measured in this respect, nor do we allocate resources on this background.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
65
Note 4, continued
Geographic information
Coloplast A/S’ registered office is situated in Denmark . No single customer accounted for more than 10% of the Group’s
revenue in 2019/20 and 2020/21.
DKK million
2020/21 2019/20
Specification of revenue
representing over 10% of the Group’s revenue including Denmark
US
3,639 3,538
UK
2,836 2,727
France
2,415 2,334
Denmark
249 239
Other
10,287 9,706
Total
19,426 18,544
Specification of non
-current assets¹⁾ by location of the subsidiary
Denmark
3,983 2,702
Hungary
1,491 1,321
Other
2,563 2,267
Total
8,037 6,290
¹
⁾ Non-current assets by location consist of intangible assets and property plant and equipment.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
66
Note 5
Staff costs
DKK
million 2020/21 2019/20
Specification of staff costs recognised in the financial year
Salaries, wages and directors' remuneration
4,715 4,635
Pension costs
- defined contribution plans (note 18) 360 317
Pension costs
- defined benefit plans (note 18) 13 13
Other social security costs
525 474
Total
5,613 5,439
Staff costs allocated to functions
Production costs
1,253 1,234
Distribution costs
3,468 3,364
Administrative expenses
470 455
Research and development costs
422 386
Total
5,613 5,439
Average number of employees, FTEs
12,578 12,250
Number of employees at 30 September, FTEs
12,728 12,427
Number of employees at 30 September, headcount
12,874 12,568
See note 28 to the financial statements for information on the Executive Management's and the Directors' remuneration.
Note 6
Special items
Notes to the consolidated financial statements
Accounting policies
Staff costs are recognised in the financial year in which the staff performed the relevant work.
Accounting policies
Special items comprise material amounts of a non-recurring nature, such as costs relating to divestment, closure or restructuring,
provisions for lawsuits, etc. These items are presented separately to facilitate the comparability of the income statement and to
provide a better picture of the operating results.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
67
Note 6, continued
Special items contain expenses to cover further costs to resolve the remaining claims in connection with legal assistance relating
to litigation about transvaginal surgical mesh products in US as the process takes longer than previously anticipated.
See note 19 to the financial statements for more information regarding the litigation about transvaginal surgical mesh products.
DKK million
2020/21 2019/20
Provisions for litigation about transvaginal surgical mesh products
200 -
Total
200 -
Note 7
Financial income and expenses
DKK million
2020/21 2019/20
Financial income
Interest income
11 8
Fair value adjustments of forward contracts transferred from other
comprehensive income 19 -
Net exchange adjustments
95 -
Hyperinflationary adjustment of monetary position
11 11
Other financial income
1 1
Total
137 20
Financial expenses
Interest expenses
13 16
Interest
expenses, lease liabilities 12 14
Fair value adjustments of forward contracts transferred from other comprehensive income
- 90
Fair value adjustments of cash
-based share options 2 7
Net exchange adjustments
- 248
Other financial
expenses and fees 32 33
Total
59 408
Accounting policies
Financial income and expenses include interest, financing costs of leases, realised and unrealised foreign exchange adjustments, gains
on net monetary items in hyperinflationary economies, fair value adjustment of forward contracts transferred from other
comprehensive income, fair value adjustments of cash settled share options, fees, market value adjustments of securities and dividend
received on shares recognised under securities.
See note 23 to the financial statements for more information about accounting policy for items transferred from hedging reserve.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
68
Note 8
Tax on profit for the year
DKK million
2020/21 2019/20
Specification of tax on profit for
the year
Current tax on profit for the year
1,201 1,290
Change in deferred tax on profit for the year
216 -19
Tax on profit from ordinary activities for the year
1,417 1,271
Adjustment of tax relating to prior years
-12 -2
Change due
to change in tax rate 3 -
Tax on profit for the year
1,408 1,269
Tax on equity and other comprehensive income entries, income
62 57
Reconciliation of tax rate differences
Danish tax rate
22.0% 22.0%
Effect of change of
tax rates 0.1% 0.0%
Deviation in foreign subsidiaries' tax percentage
0.1% 0.3%
Non
-taxable income and non-deductible expenses 0.0% 0.4%
Research and development incentives
-1.2% -0.1%
Acquisitions and divestments
0.7% 0.0%
Other taxes and other
adjustments, net 0.9% 0.6%
Effective tax rate
22.6% 23.2%
Notes to the consolidated financial statements
Accounting policies
Coloplast A/S is jointly taxed with wholly owned Danish subsidiaries. The jointly taxed Danish enterprises are covered by the Danish
on-account tax scheme.
Additions, deductions and allowances relating to the on-account tax scheme are included in financial items.
Current tax on the net profit or loss for the year is recognised as an expense in the income statement together with any change in the
provision for deferred tax. Tax on changes in other comprehensive income is taken directly on other comprehensive income.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
69
Note 9
Earnings per share (EPS)
2020/21 2019/20
Net profit for the year, DKK million
4,825 4,197
Net profit for the year before special items, DKK million
4,981 4,197
Weighted average number of outstanding shares, millions of
units 212.8 212.6
Dilutive effect of outstanding share options, millions of units
0.4 0.6
Average number of unrestricted shares including dilutive effect of outstanding share options, millions of units
213.2 213.3
Earnings per share
before special items, DKK 23.40 19.74
Earnings per share, DKK
22.67 19.74
Earnings per share before special items, diluted, DKK
23.36 19.67
Earnings per share, diluted, DKK
22.63 19.67
Accounting policies
Earnings per share (EPS) reflects the ratio between profit for the year and the year’s weighted average of issued, ordinary shares,
excluding ordinary shares purchased by the Group and held as treasury shares. Earnings per share, diluted, is calculated as the net
profit for the year divided by the average number of outstanding shares adjusted for the dilutive effect of outstanding share options in
the money.
2020/21 2019/20
Outstanding shares
('000):
A shares
B shares
A shares
B shares
Outstanding shares at 1 October
18,000
194,681
18,000
194,423
Sale of treasury shares
- 618
- 763
Acquisition of treasury shares
- -498
- -505
Outstanding shares at 30
September 18,000
194,801
18,000
194,681
Holding of treasury shares at 30 September
- 3,199
- 3,319
Total shares issued at 30 September
18,000
198,000
18,000
198,000
Both share classes have a face value of DKK 1 per share. Class A shares carry 10 votes each, while class B shares carry 1 vote each.
The class A shares are non-negotiable instruments. Any change of ownership or pledging of class A shares requires the consent of the
Board of Directors. B shares are negotiable instruments, and no restrictions apply to their negotiability. No special dividend rights
attach to either share class. The Group does not hold A shares.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
70
Note 10
Dividend per share
DKK
2020/21 2019/20
Interim dividend per share
5.00 5.00
Proposed dividend per share
14.00 13.00
Total dividend per share
19.00 18.00
Total dividend for the year, DKK million
4,044 3,829
Payout ratio
84% 91%
The Board of Directors recommends that the shareholders attending the general meeting approve an additional dividend of
DKK 14.00 per share. An interim dividend of DKK 5.00 per share was distributed in the financial year, bringing the total dividend
per share for the year to DKK 19.00. The increase in dividend per share, compared to last financial year, amounts to 6%. The
payout ratio for the year is 84%.
Notes to the consolidated financial statements
Accounting policies
Dividend is recognised in the balance sheet as a liability when adopted at the Annual General Meeting. Proposed but not yet paid
dividend for the financial year is recognised in equity until approved by the shareholders at the general meeting.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
71
Note 11
Intangible assets
Accounting policies
Intangible assets with a finite life are measured at cost less accumulated amortisation and impairment losses. Subsequent milestone
payments related to acquired patents, trademarks and know-how payable on achievement of a contingent event will be capitalised
when the contingent event is achieved. Borrowing costs are recognised as part of cost. Amortisation is made on a straight-line basis
over the expected useful lives of the assets, which are:
Software 3 – 5 years
Acquired patents, trademarks and know-how etc. 5 – 15 years
Goodwill and other intangible assets with indefinite lives are tested for impairment annually or whenever there is an indication of
impairment, while the carrying amount of intangible assets with finite lives, property, plant and equipment and investments measured
at cost or amortised cost are assessed if there is an indication of impairment. If a write-down is required, the carrying amount is written
down to the higher of net selling price and value in use. For the purpose of assessing impairment, assets are grouped in the smallest
group of assets that generates identifiable cash inflows (cash-generating units). The cash-generating units are defined as the smallest
identifiable group of assets that generates cash inflows and which are largely independent of cash flows from other assets or groups of
assets.
For other intangible assets, the amortisation period is determined on the basis of Management’s best estimate of the expected
economic lives of the assets. The expected economic lives are assessed at least annually, and the amortisation period is determined
based on the latest assessment. For purposes of calculating amortisation, the residual value of the assets is nil, unless a third party has
committed to purchasing the asset after its use or there is an active market for the asset. With the exception of goodwill and some
specific trademarks, all intangible assets have a finite life.
All in-house research costs are recognised in the income statement as incurred. Management believes that mandatory regulatory
approvals of products, completing the development of new products involves a high degree of uncertainty, for which reason the
technical feasibility criteria are not considered to have been met.
Gains or losses on the disposal of intangible assets are stated as the difference between the selling price less costs to sell and the
carrying amount at the date of disposal and are included in the income statement under other operating income or other operating
expenses, respectively.
Key accounting estimates and judgements
Goodwill and other intangible assets: The measurement of intangible assets, including goodwill, could be materially affected by
significant changes in estimates and assumptions underlying the calculation of values. The carrying amount of intangible assets was
DKK 3,651 million as at 30 September 2021 (30 September 2020: DKK 2,364 million).
Nine Continents Medical was acquired in a share deal. Shortly following the acquisition, all intangible assets was transferred to
Coloplast A/S resulting in US exit taxation. The subsequent transfer of the intangible assets to Coloplast A/S is considered an integral
part of the transaction and, consequently, the tax base in Coloplast A/S is considered established upon the acquisition. The transfer is
considered an integral part of the transaction because not transferring the intangible assets to Coloplast A/S with the current tax
setup of the Groups is not a viable solution.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
72
Note 11, continued
DKK million
Acquired
patents,
trademarks
and know
-
how etc.
Goodwill
Software
Prepay
-
ments and
intangible
assets in
progress
Total
intangible
assets
2020/21
Cost at 1
October 1,729 1,976 458 76 4,239
Exchange adjustment
13 7 2 - 22
Additions from acquisitions
50 45 - - 95
Transfers
- - 51 -51 -
Additions and improvements during the year
1,218 - 38 59 1,315
Disposals
during the year - - -23 - -23
Cost at 30 September
3,010 2,028 526 84 5,648
Amortisation at 1 October
1,533 - 342 - 1,875
Exchange adjustment
13 - 3 - 16
Amortisation for the year
82 - 47 - 129
Amortisation reversed on disposals during the year
- - -23 - -23
Amortisation at 30 September
1,628 - 369 - 1,997
Carrying amount at 30 September
1,382 2,028 157 84 3,651
2019/20
Cost at 1
October 1,827 2,030 416 50 4,323
Exchange adjustment
-98 -54 - - -152
Transfers
- - 49 -49 -
Additions and improvements during the year
- - 10 75 85
Disposals during the year
- - -17 - -17
Cost at 30 September
1,729 1,976 458 76 4,239
Amortisation at 1 October
1,503 - 318 - 1,821
Exchange adjustment
-88 - - - -88
Amortisation for the year
118 - 41 - 159
Amortisation reversed on disposals during the year
- - -17 - -17
Amortisation at 30 September
1,533 - 342 - 1,875
Carrying amount at 30 September
196 1,976 116 76 2,364
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
73
Note 11, continued
Goodwill
Goodwill mainly relates to the acquisitions of Mentor's urology and continence business in 2006, Mpathy in 2010, Comfort
Medical in 2016, Lilial in 2018 as well as Hope Medical and Affordable Medical in 2021. Goodwill from the acquired businesses
has been allocated on the individual cash-generating units according to earnings at the date of acquisition. The allocation was
made to the cash-generating units Chronic Care and Interventional Urology.
Pursuant to IAS 36, a goodwill impairment test is performed when there is an indication of impairment, but at least once a year.
In the impairment test, the carrying amount is compared with the recoverable amount (value in use) of each cash-generating
unit, calculated as the discounted expected future cash flows.
Future cash flows are determined using forecasts based on realised sales growth, earnings and strategy plans, etc. These
forecasts are based on specific assumptions for each cash-generating unit during the planning period with respect to sales,
results of operations, working capital, capital investments and assumptions for cost of capital, inflation and the level of interest
rates.
Growth rates during the terminal period correspond to the expected long-term rate of inflation.
2020/21 2019/20
Chronic
Care
Interven
-
tional
Urology
Chronic
Care
Interven
-
tional
Urology
Key parameters applied in the calculation of recoverable amounts:
Revenue growth in terminal period
1.4% 1.4% 1.3% 1.3%
Tax percentage
23.0% 27.0% 23.0% 27.0%
Carrying amount of trademarks¹
⁾, DKK million 54 - 50 -
Carrying amount of goodwill, DKK million
1,690 338 1,640 336
¹
⁾ Carrying amount includes only those trademarks with indefinite useful lives.
2020/21 2019/20
Before
tax
After
tax
Before
tax
After
tax
Discount rates applied in the calculation of recoverable amounts:
Chronic Care
7.7% 6.1% 5.0% 4.1%
Interventional Urology
12.3% 9.1% 9.7% 7.1%
The discount rate for 2020/21 is based on the WACC used by the external analysts’ covering Coloplast.
Special assumptions applied in impairment tests performed in Chronic Care
Chronic Care consists of the Ostomy Care and the Continence Care businesses. The Ostomy Care business involves the
production and sale of ostomy pouches and accessories. The Continence Care business involves the production and sales of
disposable catheters and various types of products designed for people suffering from urinary or faecal incontinence.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
74
Note 11, continued
The impairment test performed for Chronic Care was based on forecasts for the 2021/22 financial year. Assumptions for
Coloplast’s long-term strategy were applied for the financial years 2022/23 to 2024/25.
Revenue growth rates of 6-7% were assumed for the budget period, which are supported by the organic growth rates in recent
financial years. On the other hand, it was assumed that the gross margin will decrease slightly until the terminal period due to
anticipated price pressures and health care reforms. It was also assumed that the Group’s focus on cost management and
regular efficiency improvements will ensure that overhead costs will increase at a rate lower than revenue, which will in turn
produce an annual margin improvement.
The Group’s general tax rate was applied in the impairment test for Chronic Care because these products are sold in all of the
Group’s markets.
Working capital invested has been projected using the same growth rate as that for revenue.
Special assumptions applied in impairment tests performed in Interventional Urology
The interventional urology business consists of the production and sale of products used in surgical procedures in urology and
gynaecology, including prostate catheters, stents, vaginal slings used to restore continence, mesh products used to treat weak
pelvic floor and penile implants for men experiencing severe impotence.
The impairment test performed for Interventional Urology was based on forecasts for the 2021/22 financial year. Assumptions
for the long-term strategy of the urology business were applied for the financial years 2022/23 to 2024/25.
Revenue growth rates of 5-9% were assumed for the budget period, which are supported by the Interventional Urology organic
growth rates in recent financial years. On the other hand, it was assumed that the gross margin will decrease slightly until the
terminal period due to general anticipated price pressures and health care reforms. It was also assumed that the Group’s focus
on cost management and regular efficiency improvements will ensure that overhead costs would increase at a rate lower than
revenue, which will in turn produce an annual margin improvement.
The tax rate applied in the impairment test for Interventional Urology was higher than the rate applied for the Group because
sales and production mostly take place in the US, which imposes a corporate tax rate higher than the Group average.
Working capital invested has been projected using the same growth rate as that for revenue.
Acquired patents, trademarks and know-how etc.
Acquired patents and trademarks are associated with the acquisition of Mentor’s urology business in 2006, the Mpathy
acquisition in 2010 as specified in the table below. Coloplast acquired during 2020/21 three small US direct-to-consumer
Durable Medical Equipment (DME) dealers, Hope Medical Supply, Rocky Mountain Medical Supply and Affordable Medical, LLC
amounted to DKK 50 million, and Nine Continents Medical of DKK 1,218 million, where of the full amount has not been paid in
cash. In connection with the acquisitions, intangible assets were identified, and the cost was allocated to net assets at fair value
at the date of acquisition, calculated on the basis of factors such as expected sales and revenue trends. Each component is
amortised over its estimated useful life using the straight line method.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
75
Note 11, continued
Patented and unpatented technologies
On acquiring Mentor’s urology business, Coloplast acquired a large number of patented technologies (more than 300) and
unpatetented technologies. On acquiring Mpathy, Coloplast acquired about 50 patented technologies.
Unpatented technologies include (Mentor only):
• Inventions not patentable/protectable
• Trade secrets
• Know-how
• Confidential information
• Copyrights on computer software, databases or instruction manuals and the like
Most relate to know-how regarding various materials and processes used in production. Division of the individual components
into small intangible assets is not considered material or relevant.
On acquiring Nine Continents Medical in November 2020, Coloplast acquired a number of patented and unpatented
technologies. Unpatented technologies include inventions not patentable or protectable, know-how, confidential information
and copyrights on computer software and the like. Most relate to know-how regarding various technologies. Division of the
individual components into small intangible assets is not considered material or relevant.
Trademarks
In addition to patented and unpatented technologies, Coloplast acquired a large number (more than 150) of registered and
unregistered trademarks, including pending applications for trademark registration, but Coloplast did not acquire the Mentor
trademark. Individual acquired trademarks, each representing a limited value, are not material for Coloplast’s sales, as is also the
case for patented and unpatented technologies. On acquiring Mpathy, Coloplast acquired a small number (less than 20) of
trademarks. On acquiring Nine Continents, Coloplast acquired some unregistered trademarks and a domain name.
Customer lists/loyalties
Coloplast also acquired a substantial number of customer relationships when acquiring both Mentor and Mpathy. As long-term
customer contracts are rarely made in the field of urology, customer lists are valued as a whole at the date of acquisition.
DKK mil
lion
Remaining
amortisation period
2021 2020
Patented technologies and unpatented technologies
5 years 11 37
Trademarks
5 years 21 39
Customer lists/loyalty
4 years 15 25
Carrying value of the Mentor and Mpathy assets at 30 September
47 101
2020/21 2019/20
Amortisations on intangible assets break down as follows
Production costs
60 79
Distribution costs
59 67
Administrative expenses
6 10
Research and development costs
4 3
Total
129 159
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
76
Note 12
Property, plant and equipment
DKK million
2020/21 2019/20
Depreciations on
property, plant and equipment break down as follows
Production costs
377 384
Distribution costs
33 32
Administrative expenses
10 13
Research and development costs
38 56
Total
458 485
Notes to the consolidated financial statements
Accounting policies
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Cost comprises the cost of
acquisition and expenses directly attributable to an acquisition until the asset is ready for use. In case of assets manufactured by the
company, cost comprises materials, components, sub-supplier services, direct labour and costs directly attributable to the
manufactured asset. In addition, borrowing costs are recognised as part of cost.
Depreciation is provided on a straight-line basis over the expected useful lives of the assets. The expected useful lives are:
Land not depreciated
Buildings 15 – 25 years
Building installations 5 – 10 years
Plant and machinery 5 – 15 years
Other fixtures and fittings, tools and equipment 3 – 7 years
At the balance sheet date, the residual values, remaining useful lives and depreciation pattern of the assets are reassessed. Any
changes are treated as changes to accounting estimates. Gains and losses on the sale or scrapping of an item of property, plant and
equipment are recognised in the income statement as other operating income and other operating expenses, respectively.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
77
Note 12, continued
DKK
million
Land and
buildings
Plant and
machinery
Other
fixtures
and
fittings,
tools and
equipment
Prepay
-
ments and
assets
under
construc
-
tion
Total
property,
plant and
equipment
2020/21
Cost at 1 October
2,467 4,505 1,122 764 8,858
Exchange and other adjustments
23 30 7 3 63
Transfers
289 409 61 -759 -
Additions and improvements during the year
8 68 34 809 919
Disposals during the year
-39 -55 -52 -15 -161
Cost at 30
September 2,748 4,957 1,172 802 9,679
Depreciation at 1 October
1,409 3,321 817 - 5,547
Exchange and other adjustments
10 12 6 - 28
Depreciations for the year
106 225 127 - 458
Depreciations reversed on
disposals during the year -24 -64 -51 - -139
Depreciation at 30 September
1,501 3,494 899 - 5,894
Carrying amount at 30 September
1,247 1,463 273 802 3,785
Cost of property, plant and equipment fully
depreciated 1,024 2,314 623 - 3,961
2019/20
Cost at 1 October
2,657 4,537 1,107 411 8,712
Reclassification to right
-of-use-assets -142 - -8 - -150
Exchange and other adjustments
-121 -102 -19 -45 -287
Transfers
68 223 85 -376 -
Additions and improvements during the year
18 9 33 786 846
Disposals during the year
-13 -162 -76 -12 -263
Cost at 30 September
2,467 4,505 1,122 764 8,858
Depreciation at 1 October
1,384 3,310 769 - 5,463
Reclassification to right
-of-use-assets -16 - -6 - -22
Exchange and other adjustments
-51 -69 -11 - -131
Depreciations for the year
105 242 138 - 485
Depreciations reversed on
disposals during the year -13 -162 -73 - -248
Depreciation at 30 September
1,409 3,321 817 - 5,547
Carrying amount at 30 September
1,058 1,184 305 764 3,311
Cost of property, plant and equipment fully
depreciated 617 2,342 547 - 3,506
The Group has signed agreements with contractors for the supply of buildings, technical plant and machinery for DKK 126
million at 30 September 2021 (DKK 173 million at 30 September 2020).
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
78
Note 13
Right-of-use assets
The majority of the Group's right-of-use assets comprise office space, warehouses, cars and IT equipment. Leasing
arrangements are preferred for certain types of assets as it stabilises cash flows and reduces capital invested in non-current
assets.
In certain situations, the leasing contracts include a right for Coloplast to extend the leasing period but this is only reflected in the
cost of the right-of-use assets, and the corresponding lease liability, if it is reasonably certain that the option will be utilised.
Variable lease payments, which are not included in the measurement of the lease liability, are expensed directly in profit or loss.
These payments are mainly related to consumption-based charges, e.g. extra mileage in leased cars.
The Group enters into new lease contracts continually, e.g. to replace an old right-of-use asset which is returned to lessor. The
new contracts are usually entered prior to commencing the leasing period when a right-of-use assets is available for use.
Consequently, the Group may have committed to lease contracts, which are insignificant from an individual perspective, at the
balance sheet date which are not yet recognised on the balance sheet date.
The extent of residual value guarantees for right-of-use assets is limited and expected payments are included in the initial
amount of the lease liability.
Notes to the consolidated financial statements
Accounting policies
At the commencement date, when a leased asset is made available for use, a right-of-use asset and a corresponding lease liability is
recognised on the balance sheet.
Right-of-use assets are initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made
prior to the commencement date and any initial direct costs. Subsequently, the right-of-use asset is measured at cost less depreciation
and impairment losses and adjusted for the remeasurement of the lease liability. The right-of-use assets are depreciated on a straight-
line basis over the shorter of the lease term or the useful life of the right-of-use asset.
Options to extend the initial leasing period are only included in the initial measurement if it is reasonably certain that the option will be
utilised.
Lease liabilities are initially measured at the present value of future lease payments. The lease payments are discounted using the
implicit rate of the lease contract or, if not readily determinable, the incremental borrowing rate of Coloplast for loans with similar term
and security. As a practical expedient, the discount rates are determined on basis of a portfolio of leases with similar characteristics,
e.g. a portfolio of leased cars in a specific country. The lease liabilities are subsequently reduced by the portion of lease payments
which is regarded as repayment of those lease liabilities. Lease liabilities are remeasured in the event of a lease modification or a
reassessment of the lease term which in turn may also impact the carrying value of the right-of-use assets. The lease term is
reassessed when a significant event or change, which is within the control of Coloplast, affects the prior assessment.
Short-term leases and leases of low-value assets are exempted from the above accounting model. Consequently, lease payments
associated with such lease contracts are recognised as an operating expense on either a straight-line basis over the lease term or
another systematic basis which is more representative of the pattern of the benefit of the leased assets.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
79
Note 13, continued
DKK million
Land and buildings
Other
fixtures and
fittings, tools and
equipment
Total
right
-of-use assets
2020/21
Carrying amount at 1 October
437 178 615
Exchange and other adjustments
4 1 5
Additions during the year
126 93 219
Disposals during the
year -43 -62 -105
Depreciations for the year
-108 -97 -205
Depreciations reversed on disposals during the year
31 41 72
Carrying amount at 30 September
447 154 601
DKK million
Land and buildings
Other fixtures and
fittings, tools and
equipment
Total
right
-of-use assets
2019/20
Carrying amount at 1 October
- - -
Reclassification of IAS 17 leases
126 2 128
Change in accounting policy
291 181 472
Exchange and other
adjustments -14 -6 -20
Additions during the year
141 101 242
Disposals during the year
-1 -17 -18
Depreciations for the year
-107 -100 -207
Depreciations reversed on disposals during the year
1 17 18
Carrying
amount at 30 September 437 178 615
DKK million
2020/21 2019/20
Depreciations on right
-of-use assets break down as follows
Production costs
22 23
Distribution costs
157 164
Administrative expenses
24 20
Research and development costs
2 -
Total
205 207
Other lease expenses recorded in the income statement
Lease payments related to short
-term leases 4 4
Lease payments related to low
-value assets 19 17
Variable lease
payments 18 13
Total
41 34
Total cash outflow for leases
Payments related to right
-of-use assets 204 208
Payments related to other lease contracts
36 31
Total
240 239
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
80
Note 13, continued
DKK million
2021 2020
Maturity analysis of lease liabilities (undiscounted)
In less than one year
191 188
Current lease liability (undiscounted)
191 188
Within 1 to 5 years
362 372
After
more than 5 years 102 120
Non
-current lease liability (undiscounted) 464 492
Total lease liability (undiscounted)
655 680
Note 14
Deferred tax
The Group’s tax losses expiring after more than five years amount to DKK 21 million at 30 September 2021 (DKK 19 million at
30 September 2020). Of these tax losses, the Group has recognised a tax asset of DKK 6 million on a DKK 21 million tax loss at
30 September 2021 (DKK 2 million on a DKK 7 million tax loss at 30 September 2020).
Notes to the consolidated financial statements
Accounting policies
Full provision is made for deferred tax on the basis of all temporary differences in accordance with the balance sheet liability method.
Temporary differences arise between the tax base of assets and liabilities and their carrying amounts which are offset over time.
Deferred tax relating to differences between initial recognition of assets or liabilities is not recognised if at the transaction date neither
the accounting profit nor the taxable income is affected unless such differences occurred in a business combination.
Uncertain tax positions generally relate to transfer pricing disputes and are recognised under payable tax and measured according to
current tax rules and at the tax rates assumed in the year in which the assets are expected to be utilised.
Deferred tax assets are recognised to the extent that it is probable that future positive taxable income will be generated, against which
the temporary differences and tax losses can be offset. Deferred tax assets are measured at expected net realisable values.
The value of future tax deductions in relation to share option programmes is recognised as deferred tax, until they are exercised by
the employees. Any estimated excess tax deduction compared to the costs realised in the income statement is charged to equity.
Key accounting estimates and judgements
The recognition of deferred tax assets and uncertain tax positions requires an assessment by management. Deferred tax assets,
including the tax base of tax loss carry-forwards, are recognised if management estimates that the tax assets can be utilised within a
foreseeable future by offsetting against future positive taxable income. The assessment is made annually on the basis of budgets and
business plans for the following years, including any scheduled business measures. As the Group conducts business globally, transfer
pricing disputes may arise with tax authorities in respect of settlement prices etc. Management applies a probability-weighted
assessment to determine obligations in connection with transfer pricing disputes.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
81
Note 14, continued
The tax value of the Group’s tax credits amounts to DKK 128 million at 30 September 2021 (DKK 130 million at 30 September
2020). This amount includes a recognised tax asset of DKK 51 million at 30 September 2021 (DKK 53 million at 30 September
2020). The tax credits expire after more than five years.
Taxable temporary differences regarding investments in subsidiaries and branches are insignificant and no deferred tax has
been provided because the company controls the timing of the elimination of the temporary difference, and it is probable that
the temporary difference will not be eliminated in the foreseeable future.
DKK million
2020/21 2019/20
Deferred tax at 1 October, net
300 326
Exchange adjustments
4 -11
Additions from acquisitions
-5 -
Adjustment due to change in tax rate
-3 -
Prior
-year adjustments 3 -18
Other changes in deferred tax
– charged to income statement -216 19
Change in deferred tax
- charged to equity -11 -16
Deferred tax at 30 September, net
72 300
DKK million
2021 2020
Recognised in the balance sheet as follows
Deferred tax assets
743 669
Provision for deferred tax
-671 -369
Deferred tax at 30 September, net
72 300
Deferred tax relates to the following items
Intangible assets
-553 -271
Property, plant and equipment
-179 -196
Indirect production costs
-11 -14
Unrealised gain from intra
-group sale of goods 455 327
Trade receivables
-67 -19
Provisions
155 131
Jointly taxed companies (recaptured balances)
-9 -9
Share options
106 150
Tax losses carried forward and tax credits
56 53
IFRS 16
liabilities 109 131
Cash flow hedges
11 -17
Other
-1 34
Deferred tax at 30 September, net
72 300
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
82
Note 15
Inventories
DKK million
2021 2020
Raw materials and consumables
453 420
Work in
progress 580 464
Manufactured goods
1,395 1,343
Inventories at 30 September
2,428 2,227
DKK million
2020/21 2019/20
Write
-downs at 1 October 37 36
Write
-downs realised during the year -14 -17
Write
-downs reversed during the year -12 -11
Additional write
-downs made during the year 39 29
Write
-downs at 30 September 50 37
Production overheads was included in the carrying amount of inventories with DKK 649 million at 30 September 2021 (DKK
559 million at 30 September 2020).
Production costs include directly attributable production costs of DKK 3,844 million related to goods sold (2019/20: DKK 3,672
million).
Notes to the consolidated financial statements
Accounting policies
Inventories are measured at the lower of cost and net realisable value. Cost is determined using the FIFO principle. The cost of finished
goods and work in progress comprises raw materials, direct labour, other direct costs and indirect production overheads. Production
overheads comprise indirect material and labour costs, maintenance and depreciation of the machinery and production buildings used
in the manufacturing process as well as costs of production administration and management. Net realisable value is the expected
selling price less cost of completion and costs to sell.
Key accounting estimates and judgements
Capitalised production overheads have been calculated using a standard cost method, which is reviewed regularly to ensure the
relevant assumptions concerning capacity utilisation, lead times and other relevant factors in the calculation of actual costs of sales.
Changes to the calculation method for production overheads, including levels of capacity utilisation, lead times, etc. could affect the
gross margin and the overall valuation of inventories.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
83
Note 16
Trade receivables and other receivables
DKK million
2021 2020
Ageing of trade receivables
Not due
2,626 2,243
Due up to 30 days
233 250
Due between 30 and 90 days
140 182
Due more than 90 days
352 381
Trade receivables at 30 September, gross
3,351 3,056
Loss allowance at 30 September
-139 -122
Trade receivables at 30 September, net
3,212 2,934
Loss allowance at 1 October
-122 -93
Exchange adjustment
-1 5
Allowances used during the year (realised losses)
31 8
Additional allowances recognised during the year
-47 -42
Loss allowance at 30 September
-139 -122
Trade receivables by currency
DKK
95 43
EUR
1,145 1,048
USD
726 698
GBP
369 311
Other currencies
877 834
Trade receivables at 30 September, net
3,212 2,934
Accounting policies
Receivables consist mainly of trade receivables. On initial recognition, receivables are measured at fair value and subsequently at
amortised cost. Receivables are written down on the basis of an individual assessment and the simplified approach in accordance with
IFRS 9 where loss allowances are based on lifetime expected credit losses.
Key accounting estimates and judgements
Receivables and trade receivables are recognised at amortised cost less loss allowances. The individual provision is made for losses
considered likely to arise. If the financial position of a customer deteriorates, making it unable to make payments, it may prove
necessary to make additional provisions in future accounting periods. The allowance for lifetime expected losses is based on credit risk
characteristics for a group of customers and days past due. When assessing whether the Group has made adequate allowances for
bad and doubtful debts, management reviews the receivables, including previous losses on trade receivables, the customer's
creditworthiness, current economic conditions and changes to customer payment terms and conditions.
Loss allowances are generally linked to a customer’s inability to pay resulting from bankruptcy or expected bankruptcy. Overdue
receivables do not only reflect customers’ general ability to pay, but also the payment patterns in markets in which Coloplast operates.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
84
Note 16, continued
Other receivables, non-current
The portion of other receivables, which are falling due after more than one year after the balance sheet date, is recognised in
the balance sheet as non-current assets and amounts to DKK 26 million (DKK 24 million at 30 September 2020).
The majority of the non-current other receivables falls due after three years of the balance sheet date. Interest accruing on
receivables is 0%.
Note 17
Share options
Share options are granted to members of the executive management and other senior management for the purpose of
motivating and retaining a qualified management group and in order to align the interests of management with those of the
shareholders. Options are awarded as unconditional allocations at the date of grant, but vest over a three-year period. The
value of options at the date of grant equalled an average of three months' salary for each recipient, with the exception of the
executive management.
The accounting liability of the share option programmes was DKK 7 million at 30 September 2021 (DKK 11 million at 30
September 2020), while the fair value of all option programmes amounted to DKK 553 million at 30 September 2021 (DKK 746
million at 30 September 2020).
DKK million
2020/21 2019/20
Share options have affected the profit or loss for the year as follows
Staff costs, accounting value of cash and equity
-settled programmes 51 40
Financial costs, fair value adjustment of cash
-settled programmes 2 7
Cost of share options recognised in profit or loss
53 47
The accounting value of the options was calculated using the Black-Scholes formula at the date of the grant, in which the
interest rate applied was the yield on Danish government securities. Volatility in the share is calculated as monthly movements
(period-end to period-end) over five years. Options are assumed to be exercised on average one year into the exercise period.
Notes to the consolidated financial statements
Accounting policies
Share options are granted to the executive management and senior management. For equity-settled schemes, the fair value of
options is determined at the grant date. The option value is subsequently recognised over the vesting period as staff costs. For cash-
settled schemes, the fair value of options granted during the period is recognised as staff costs, whereas the fair value adjustment of
granted options from previous periods is recognised under financial items. The purchase and selling prices of treasury shares on
exercise are deducted from or added to equity, as the case may be.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
85
Note 17, continued
2020 2019
The following assumptions were applied in determining the fair value of share options granted during the
financial year
Black
-Scholes value, DKK 92.17 93.73
Share price, DKK
934.15 828.20
Exercise price, DKK
980.86 869.61
Expected dividend per share, DKK
1.50% 1.50%
Expected duration, years
4.00 4.00
Volatility
19.65% 21.53%
Risk
-free interest -0.63% -0.59%
Value, million DKK
59.45 45.91
2020/21 2019/20
No. of
options
Average
exercise
price
Average
share price
No. of
options
Average
exercise
price
Average
share price
Outstanding share
options at 1 October
2,061,254 625
2,351,113 547
Options awarded
647,806 977
489,842 866
Options forfeited
-6,586 1,013
-12,902 635
Options exercised
-622,067 496 1,018 -766,799 528 955
Outstanding share
options at 30 September 2,080,407 768
2,061,254 625
Year of issue
No. of
options
issued
Share
options
lapsed
Options
exercised
Not
exercised
at 30
September
2021³
⁾
Exercise
price¹
⁾²⁾
Exercise period
Specification of outstanding share options
2016
639,227 -62,178 -562,284 14,765 474 31/12/19 - 31/12/21
2016 US
114,231 -7,419 -106,812 - 502 31/12/19 - 31/12/21
2017
596,363 -41,711 -284,860 269,792 499 31/12/20 - 31/12/22
2017 US
107,767 -3,807 -47,002 56,958 534 31/12/20 - 31/12/22
2018
501,877 -10,461 - 491,416 621 31/12/21 - 31/12/23
2018 US
119,260 - - 119,260 635 31/12/21 - 31/12/23
2019
403,750 -2,406 - 401,344 861 31/12/22 - 31/12/24
2019 US
88,846 - - 88,846 870 31/12/22 - 31/12/24
2020
531,920 -2,546 - 529,374 976 31/12/23 - 31/12/25
2020 US
109,900 -4,480 - 105,420 1,002 31/12/23 - 31/12/25
2020 JP
3,232 - - 3,232 977 31/12/23 - 31/12/25
Total
3,216,373 -135,008 -1,000,958 2,080,407
¹
⁾ The exercise prices are adjusted for payment of dividend. In 2020/21, the adjustment of the exercise price was DKK 3.91.
²
⁾ Average exercise price for options exercisable at the balance sheet date was DKK 501.76.
³
⁾ Exercisable options as per 30 September 2020 was 304,970.
Coloplast's holding of treasury shares fully covers the option programmes, so the options exercised under the programme will
not influence the Group's cash position by forcing it to buy up shares in the market. See note 9 to the financial statements for an
overview of treasury shares held by Coloplast at the balance sheet date.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
86
Note 18
Provisions for pensions and similar obligations
Defined contribution plans
The Group offers pension plans to certain groups of employees in Denmark and abroad. Most of the pension plans are defined
contribution plans. The Group funds the plans through regular payments of premiums to independent insurance companies
responsible for the pension obligations towards the beneficiaries. Once the pension contributions for defined contribution plans
have been made, the Group has no further obligation towards current or former employees. Contributions to defined
contribution plans are recognised in the income statement when paid. In 2020/21, DKK 360 million (2019/20: DKK 317 million)
was recognised.
Defined benefit plans
For certain groups of employees in foreign subsidiaries, the Group has signed agreements to pay defined benefits, including
pension payments.
Share of gross obligation by country
2021 2020
France
19% 21%
Germany
9% 10%
UK
71% 68%
Italy
1% 1%
Total
100% 100%
These pension liabilities are not or are only partly covered by insurance (in the UK). Uncovered liabilities are recognised in the
balance sheet and in the income statement as indicated below. Coloplast effects payments to the plans. The plans in the UK and
Italy have been closed, and no further payments are made.
The figures below include liabilities regarding the post-service remuneration scheme applicable to Board members prior to the
amendment to the articles of association adopted at the Annual General Meeting held in 2002.
The pension plans are based on the individual employee's salary and years of service with the company, and benefits are paid as
a lifelong pension. The active plans are not exclusive to any particular employee group.
Notes to the consolidated financial statements
Accounting policies
In defined contribution plans, the Group makes regular payments of fixed contributions to independent pension funds and insurance
companies. The Group is under no obligation to pay additional contributions. Costs for defined contribution plans are recognised in the
income statement as Coloplast assumes an obligation to make the payment.
In defined benefit plans, the Group is under an obligation to pay a defined benefit on retirement. The actuarially calculated present
value less the fair value of any plan assets is recognised in the balance sheet under provision for pension and similar obligations or in
plan assets in the balance sheet. The total service costs of the year plus calculated interest based on actuarial estimates and financial
assumptions at the beginning of the year are recognised in the income statement. The difference between the forecast development
in plan assets and liabilities and the realised values at the end of the year is called actuarial gains or losses and is recognised in other
comprehensive income. In connection with a change in benefits regarding the employees’ employment with the Group to date, there
will be a change in the actuarial calculation of the net present value, which is taken directly to the profit or loss.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
87
Note 18, continued
Special funding requirements apply in the UK, while this is not the case for the other countries. In the UK, employee interests are
handled by a Trustee Board. Accounts are prepared every three years and funding of any deficit is determined. Any surplus
reverts to Coloplast. The plans have no requirements for risk diversification on equities or for matching strategies. The plans
have a duration of an average of 15 years, and all plans generally mature after more than 10 years.
The Group expects to pay DKK 15 million to the defined benefit plans in 2021/22.
DKK million
2020/21 2019/20
Defined contribution plans
360 317
Defined benefit plans
13 13
Cost of pension plans recognised in profit or loss
373 330
Pension
costs concerning current financial year 10 11
Pension costs concerning prior financial years
1 -
Net interest expenses
2 2
Cost of defined benefit plans recognised in profit or loss
13 13
Costs of defined benefit plans
break down as follows
Production costs
3 3
Distribution costs
9 9
Research and development costs
1 1
Cost of defined benefit plans recognised in profit or loss
13 13
Actuarial gains/losses on pension obligations
-8 -10
Actuarial gains/losses on plan assets
-3 22
Actuarial gains/losses on defined benefit plans recognised in other comprehensive income
-11 12
Plan assets at 1 October
376 357
Exchange adjustments
23 -12
Actual rate of interest
6 7
Actuarial gains/losses on plan assets
-3 22
Paid by the Coloplast Group
16 21
Benefit paid out
-21 -19
Plan assets at 30 September
397 376
DKK million
2021 2020
Specification of plan assets
Shares, listed
72 98
Bonds
112 39
Funds
210 231
Cash and similar assets
3 8
Plan assets at 30 September
397 376
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
88
Note 18, continued
DKK million
2020/21 2019/20
Specification of present value of defined benefit obligation
Present value of defined benefit liability at 1 October
565 566
Exchange adjustments
22 -12
Current service costs
10 11
Past service costs
1 -
Calculated interest on liability
8 9
Actuarial gains/losses, financial assumptions
15 19
Actuarial gains/losses, demographic assumptions
- -4
Actuarial gains/losses, experience
-7 -5
Benefit paid out
-21 -19
Present value of defined benefit liability at 30 September
593 565
Fair value of plan assets at 30 September
-397 -376
Net liability of defined benefit plans at 30 September
196 189
Net liability of defined benefit
plans at 1 October 189 209
Expenditure for the year
13 13
Actuarial gains/losses on pension obligation
8 10
Exchange adjustment
-1 -
Actuarial gains/losses on plan assets
3 -22
Payments received
-16 -21
Net liability of
defined benefit plans at 30 September 196 189
Actuarial assumptions applied at the balance sheet date (expressed as an average)
Discount rate
1.1% 0.8%
Future rate of salary increases
1.6% 2.5%
Inflation
1.6% 1.6%
Notes to the consolidated financial statements
The below sensibility analysis shows the change in one of the actuarial assumptions, while other assumptions are kept constant. In
practice, a change in one of the assumptions will in many instances be matched by a change in the other assumptions.
2020/21 2019/20
+1%
-point
-
1%-point
+1%
-point
-
1%-point
Percentage increase/decrease in the gross liability resulting from a
change in a single actuarial assumption
Discount rate
-21% 23% -21% 23%
Future rate of salary
increases 3% -2% 3% -3%
Inflation
15% -14% 17% -14%
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
89
Note 19
Other provisions
2020/21 2019/20
DKK million
Legal
claims
Other
Total
Legal
claims
Other
Total
Provisions at 1 October
276 11 287 451 7
458
Exchange adjustment
-6 - -6
-25 -1 -26
Provisions used
during the year -296 - -296 -151 - -151
Unused provisions reversed during the year
-4 -1 -5
-3 - -3
Additional provisions
224 2 226 4 5 9
Provisions at 30 September
194 12 206 276 11 287
Expected maturities
Non
-current liabilities 50 6 56 118 10 128
Current liabilities
144 6 150 158 1 159
Provisions at 30 September
194 12 206 276 11 287
Provisions charged to profit or loss
during the year 220 1 221 1 5 6
Accounting policies
Provisions are recognised when the Group has a legal or constructive obligation arising from a past event, and it is probable that an
outflow of the Group’s financial resources will be required to settle the obligation. Provisions are measured as Management's best
estimate of the amount with which the liability is expected to be settled. The Group recognises a provision for the replacement of
products covered by warranties at the balance sheet date.
Key accounting estimates and judgements
Provisions for legal obligations consist of provisions for pending litigation. Management makes assessments of provisions and
contingent liabilities, including the probable outcome of pending and possible future litigation, which is inherently subject to uncertain
future events. Based on information available, Management believes that adequate provisions have been made for pending litigation,
but there can be no assurance that the scope of these matters will not be extended, nor that material lawsuits, claims, legal
proceedings or investigations will not arise in the future.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
90
Note 19, continued
Legal claims
The amounts are gross amounts relating to certain legal claims.
Since 2011, Coloplast, along with a number of other major manufacturers, has been named as a defendant in individual lawsuits
in various federal and state courts around the United States alleging injury resulting from use of transvaginal surgical mesh
products designed to treat pelvic organ prolapse and stress urinary incontinence. A multidistrict litigation (MDL) was formed in
2012 in the Southern District of West Virginia to consolidate federal court cases in which Coloplast is the first named defendant.
Since the first lawsuits were filed, Coloplast has been intent on disputing the current and any future litigation and has continually
considered which strategy and other steps may serve the company’s best interests.
Against this background, Coloplast has from the start reached settlements with groups of law firms. In 2017, Judge Joseph
Goodwin issued a court order stating that plaintiffs may no longer direct claims against Coloplast in the ongoing MDL. In 2019,
the remaining cases were remanded to the relevant Courts, and on 18 December 2020 the MDL was formally closed. It is
estimated that around 98% of the MDL cases have been settled to date.
An additional expense of DKK 0.2 bn has been recognised in the 2020/21 financial year to resolve the remaining claims as the
process takes longer than previously anticipated. The expense is recognised under special items in the income statement. This
brings the total amount recognised since the 2013/14 financial year for expected costs of litigation in the US to DKK 5.85 bn
including legal costs (before insurance cover of DKK 0.5 bn).
The total expense is based on a number of estimates and assumptions and is therefore subject to substantial uncertainty.
The remaining provision made for legal claims amounted to DKK 0.2 billion at 30 September 2021 (DKK 0.3 billion at 30
September 2020) plus DKK 0.1 billion recognised under other debt (DKK 0.1 billion at 30 September 2020). Liabilities are
classified as other debt when agreements are reached with the plaintiffs’ legal counsel and amounts and timing become known.
With reference to the prejudicial exemption in IAS 37, Coloplast will not disclose any further information about the assumptions
for the provision, including any details about current and the expected number of lawsuits and settled claims.
The disclosure of such information is believed to be detrimental to Coloplast in connection with the ongoing confidential
negotiations and could inflict financial losses on Coloplast and its shareholders.
Other
Other liabilities relate to provisions for expenses associated with restructuring, guarantees and other non-legal claims.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
91
Note 20
Credit institutions
DKK million
2021 2020
Maturity
Repo debt to credit institutions
203 208
Less than one month
Other borrowings from credit institutions
1,957 903
Less than one year
Borrowings from credit institutions at 30
September 2,160 1,111
Lease liability
626 636
See note 13 'Right
-of-
use assets'
Marketable securities
-226 -262
Matures in 2021
-2023
Bank balances
-448 -323
Available for
withdrawal
Net interest
-bearing debt at 30 September 2,112 1,162
Debt to credit institutions from repo transactions
Coloplast has concluded repo transactions on mortgage bonds, according to which Coloplast has an obligation to buy back the
bonds at a fixed price. Repo transactions are accounted for as lending transactions. Repo debt amounted to DKK 203 million at
30 September 2021 (DKK 208 million at 30 September 2020) with a due date of 13 October 2021. The repo debt carries a
fixed rate of interest of minus 0.3% from the transaction date (minus 0.3% at 30 September 2020).
Bonds for which the ownership has been transferred to the counterpart as part of a repo transaction had a carrying amount of
DKK 203 million at 30 September 2021 (DKK 208 million at 30 September 2020). See note 22 to the financial statements for
information on interest rate risk relating to bonds.
Other borrowings from credit institutions
Other borrowings from credit institutions mainly comprise drawdowns on revolving credit facilities which are committed for
three years on the balance sheet date in addition to minor bank overdrafts on authorised short-term facilities.
The borrowings from credit institutions are presented as current liabilities due to its nature as instruments for liquidity
management.
Accounting policies
Borrowings from credit institutions are recognised at fair value less expenses incurred and subsequently at amortised cost. Repo debt
relates to mortgage bonds forming a part of repo transactions. Repo debt is recognised at amortised cost plus accumulated repo
interest.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
92
Note 21
Financial instruments by category
DKK million
Amortised cost
Fair value through
profit or loss
(level 1)
Hedging instruments
at fair value through
OCI (level 2)
Total
2021
Trade receivables
3,212 - - 3,212
Other receivables
234 - 18 252
Marketable securities¹
⁾ - 226 - 226
Cash and cash equivalents
448 - - 448
Financial assets
3,894 226 18 4,138
Other credit institutions
2,160 - - 2,160
Trade payables
1,036 - - 1,036
Other payables
1,777 - 63 1,840
Lease liability
626 - - 626
Financial liabilities
5,599 - 63 5,662
2020
Trade receivables
2,934 - - 2,934
Other receivables
243 - 119 362
Marketable securities¹
⁾ - 262 - 262
Cash and cash equivalents
323 - - 323
Financial assets
3,500 262 119 3,881
Other
credit institutions 1,111 - - 1,111
Trade payables
814 - - 814
Other payables
1,630 - 34 1,664
Lease liability
636 - - 636
Financial liabilities
4,191 - 34 4,225
¹
⁾ The securities portfolio consists of mortgage bonds and corporate bonds. The bond portfolio carried an effective rate of interest of 1-6%
(2019/20: 1
-6%).
Notes to the consolidated financial statements
Accounting policies
Financial instruments are measured at either amortised cost or fair value. Those financial instruments, which are measured at fair
value, can be categorised according to the fair value measurement hierarchy below:
Level 1: Observable prices in active markets for identical instruments.
Level 2: Valuation models primarily based on observable prices or traded prices of comparable instruments.
Level 3: Valuation models primarily based on non-observable prices.
The fair value of forward exchange contracts and other derivative financial instruments are considered a level 2 fair value
measurement as the fair value is determined directly based on the published exchange rates and quoted forward exchange rates at
balance sheet dates. The fair value of derivative financial instruments is calculated on the basis of current market data.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
93
Note 22
Financial risks
Risk management policy
Financial risks are managed centrally and, accordingly, all derivative instruments are managed and controlled by the parent
company. The framework is determined by the financial policy approved annually by the Board of Directors. The financial policy
comprises policies for foreign exchange, funding, liquidity and financial counterparts. The core principle is for financial risk to be
managed with a view to reducing significant risk.
Foreign exchange risk
A number of the Group’s financial instruments is exposed foreign exchange risks as a natural consequence of its global activities.
The Board of Directors determines the level of risk as a percentage of EBITDA. Foreign exchange risk is calculated by applying
the principles of a cash-flow-at-risk model. The foreign exchange risk related to financial instruments is concentrated in
receivables, payables and cash positions denominated in foreign currencies. In addition to this, the fair value of the Group’s
hedging instruments is significantly exposed to changes in foreign exchange rates. On the other hand, there is only a low foreign
exchange risk attached to the Group’s marketable securities as these are denominated in DKK and EUR. Borrowings from credit
institutions, including repo debt, are denominated in DKK.
While EUR is a key currency for the Group, the foreign exchange risk is regarded as low due to fixed exchange rate policy of the
central bank of Denmark.
As at 30 September 2021, an average of 52% of the following twelve months of expected net cash flows were hedged (30
September 2020: 58% of the following twelve months of cash flows).
The table below show how a theoretical change of +/- 5% in all currencies against Danish kroner will impact the financial
instruments recognised at the balance sheet date. The impact on profit or loss comes mainly from receivables denominated in
foreign currencies. The impact on other comprehensive income relates to the fair value of hedging instruments. The hedged
exposure is included in the sensitivity analysis and, therefore, the effect is reduced.
2020/21 2019/20
DKK million
USD
GBP
HUF
All
currencies
USD
GBP
HUF
All
currencies
Impact from a 5%
increase in currencies
Profit or loss
11 8 -16 126 -8 10 -15 109
Other
comprehensive
income
-38 -52 23 -135 -37 -48 22 -131
Total comprehensive
income
-27 -44 7
-9
-45 -38 7
-22
Impact from a 5%
decrease in currencies
Profit or loss
-11 -8 16 -126 8 -10 15 -109
Other comprehensive
income
38 52 -23 135 37 48 -22 131
Total comprehensive
income
27 44 -7
9
45 38 -7
22
The increase and decrease resulting from a 5% change are the same as all hedging instruments are forward contracts.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
94
Note 22, continued
Interest rate risk
The exposure to interest rate risks is consider insignificant as the Group's net interest-bearing debt remains an insignificant part
of the Groups capital structure. The credit facilities are at floating interest rate. The duration as per balance sheet date was 1.6
years.
Liquidity risk
The exposure to liquidity risks is considered to be low. In addition to cash available for withdrawal and marketable securities, the
Group’s cash reserves comprise a mix of committed and uncommitted credit facilities to ensure an adequate level of funding for
the Group’s activities, even in periods of operational uncertainty.
DKK million
2021 2020
Cash and cash equivalents
448 323
Marketable securities
226 262
Liquid assets recorded on the balance sheet at 30 September
674 585
Committed credit facilities, unutilised (2 years term)
2,359 1,680
Uncommitted credit facilities, unutilised (short
-term) 1,221 2,196
Financial reserves at 30 September
4,254 4,461
The Board of Directors generally intends to distribute excess cash to the shareholders by way of dividends and share buybacks.
It is expected that dividends will be paid twice a year: after the Annual General Meeting and after the release of the half-year
interim report. However, share buybacks and distribution of dividend will always be made with due consideration for the Group’s
liquidity requirements and plans.
The capital management objective of the Group is to raise new debt only for acquisition purposes or for other special purposes.
The Group assesses the capital on the basis of the solvency ratio, which is calculated in accordance with the guidelines issued by
the Danish Society of Financial Analysts.
Credit risk
The Group’s credit risk relates to the possibility that the counterparties of its financial assets are not able to meet their oblige-
tions as they fall due. The carrying amount of the financial assets represents the maximum credit risk exposure. The Group’s
policy for managing credit risks involves an ongoing credit assessment of major customers and other key business partners.
The credit risk exposure relates to (i) receivables, (ii) bank deposits, (iii) marketable securities (mortgage bonds and corporate
bonds) as well as (iv) derivative financial instruments (forward exchange contracts) with a positive fair value at the balance sheet
date.
• The credit risk relating to trade receivables and other receivables is diversified over a large number of customers and other
counterparties. For this reason, the credit risk is regarded as insignificant. See also note 16.
• The credit risk relating to bank deposits is, pursuant to the Group’s counterparty policy, managed and mitigated by making
money market deposits only with selected financial institutions holding a satisfactory credit rating. In addition, the maximum
deposit limits have been defined for each financial counterparty.
• The credit risk relating to marketable securities is considered to be limited as investment is only made in selected liquid bonds
with a high credit rating.
• The credit risk relating to derivative financial instruments is aligned with the credit risk for bank deposits as derivative
contracts are only entered with selected financial institutions with a satisfactory credit rating.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
95
Note 23
Derivative financial instruments
Pursuant to the Group’s foreign exchange policy, forward exchange contracts are used for the purpose of neutralising and
delaying the effect of exchange rate fluctuations in profit or loss and thereby enhance the predictability of the financial results.
The foreign exchange risk is calculated by applying the principles of a cash-flow-at-risk model, with the Board of Directors
determining the level of risk as a percentage of operating profit (EBITDA). The risk is managed and mitigated through cash flow
hedges and, in some cases, through fair value hedges. Sources of hedging ineffectiveness comprise mainly those that arise from
assumptions on expected 12-month rolling cash flows not being realised.
The Group hedges key currencies e.g. USD, GBP, JPY and HUF, and selectively hedges emerging markets currencies taking the
cost of hedging into consideration.
The Group does not hedge forecasted cash flows denominated in EUR as the foreign exchange risk is regarded as low due to
the fixed exchange rate policy of the central bank of Denmark.
Accounting policies
At the initiation of derivative contracts, it is assessed whether they qualify for hedge accounting and the derivatives are classified as
either cash flow hedges or fair value hedges. Cash flow hedges relates to forecasted transactions at a future point in time. Fair value
hedges relate to changes in the fair value of assets or liabilities recognised on the balance sheet.
Upon initial recognition, the fair values of derivative financial instruments are recognised as an asset or a liability on the balance sheet
date. These are presented together with other receivables or other payables, respectively. The fair values of derivative financial
instruments are subsequently remeasured at fair value at each reporting date.
The subsequent value adjustments of cash flow hedges are recognised through other comprehensive income as a cash flow hedge
reserve when the hedging relationship continues to meet the effectiveness requirement. The reserve is recognised in the income
statement upon realisation of the hedged transactions. If a derivative financial instrument used to hedge expected future transactions
expires, is sold or no longer qualifies for hedge accounting, any accumulated reserve remains in equity until the hedged transaction is
concluded. If a transaction is no longer expected to be concluded, any reserve accumulated under equity is transferred to the income
statement.
The subsequent value adjustments of fair value hedges are recognised through profit or loss along with any adjustments of the value
of the hedged asset that concern the hedged risk.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
96
Note 23, continued
Specification of derivative financial instruments held at the balance sheet date.
DKK million
Contract
amount at
year
-end¹⁾
Fair value
of contract
at year
-
end²
⁾
Average
exchange
rate per
the
hedging
contracts
Expiry period of the
contracts
2021
USD
821 -28 617.01 Oct 21 - Aug 22
GBP
1,145 -12 848.16 Oct 21 - Sep 22
JPY
176 1 5.76 Oct 21 - Sep 22
HUF
-490 -2 2.04 Oct 21 - Sep 22
Other currencies
828 -11 n/a
Oct 21 - Sep 22
Forward exchange contracts at 30 September, cash flow hedges
2,480 -52
HUF
310 6 2.07 Oct 21 - Sep 22
Forward exchange contracts at 30 September, fair
value hedges 310 6
2020
USD
871 37 659.85 Oct 20 - Aug 21
GBP
1,115 46 844.53 Oct 20 - Sept 21
JPY
189 5 6.16 Oct 20 - Sept 21
HUF
-514 -29 2.14 Oct 20 - Sept 21
Other
currencies 844 18 n/a
Oct 20 - Sept 21
Forward exchange contracts at 30 September, cash flow hedges
2,505 77
HUF
315 9 2.10 Oct 20 - Dec 20
Forward exchange contracts at 30 September, fair value hedges
315 9
¹
⁾ Amount is translated to DKK millions using the exchange rates per the hedging contracts. Positive amounts indicate a forecasted sale of the
currency in question; negative amounts indicate a forecasted purchase of currency in question.
²
⁾ Positive amounts indicate that the net fair value of the hedging contracts is an asset. Negative amounts indicate that the net fair value of the
hedging contracts is a liability.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
97
Note 24
Specifications of cash flow from operating and financing activities
DKK million
2020/21 2019/20
Net gain/loss on divestment of non
-current assets 4 2
Change in other provisions
-85 -177
Other non
-cash operating items 50 40
Adjustment for other non
-cash operating items -31 -135
Inventories
-161 -403
Trade receivables
-235 81
Other receivables, including amounts held in escrow
97 -150
Trade and other payables etc.
224 120
Changes in
working capital -75 -352
2020/21 2019/20
DKK million
Lease
liability
Credit
facilities
Total
Lease
liability
Credit
facilities
Total
Balance at 1 October
636 1,111 1,747 142 1,066 1,208
Impact of accounting
policy change - - - 472 - 472
Additions during the year
219 - 219 242 - 242
Cash flows
-202 1,050 848 -197 45 -152
Exchange and other adjustments
-27 -1 -28 -23 - -23
Balance at 30 September
626 2,160 2,786 636 1,111 1,747
Note 25
Cash and cash equivalents
DKK million
2021 2020
Bank deposits, short term
448 323
Cash and cash equivalents at 30 September
448 323
Accounting policies
Cash and cash equivalents, recognised under current assets, comprise bank deposits and cash at hand and are measured at fair
value.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
98
Note 26
Public grants
The Group has received DKK 1 million in public grants for research and development purposes (2019/20: DKK 1 million) and
DKK 4 million in public grants for investments (2019/20: DKK 3 million). An income of DKK 13 million relating to investment
grants has been recognised under production costs in the income statement (2019/20: DKK 12 million).
Note 27
Contingent liabilities and guarantees
As part of the normal course of business, Coloplast is involved in pending litigations, claims and investigations. Provisions for
probable losses have been made for those matters Management has assessed as needed, but there are uncertainties associated
with these estimates. Please also see note 19 to the financial statements.
Coloplast does not expect any pending litigations, claims and investigations to materially influence the Group’s future earnings,
cash flows or financial position, neither individually nor in aggregate, in addition to the amounts recognised as provisions.
Bonds in repo transactions have been provided as collateral for repo debt. Bonds provided as collateral were valued at DKK 203
million at 30 September 2021 (DKK 208 million at 30 September 2020). See note 20 to the financial statements for information
on interest rate risk relating to bonds.
Notes to the consolidated financial statements
Accounting policies
Public grants comprise of grants for research, development and other investments. Grants for investments are recognised as deferred
income, which is recognised systematically in the income statement under production costs from the date when the conditions
attaching to them are deemed to be complied with until the date on which the deadline for retaining such conditions expires. Other
grants are recognised as income on a systematic basis, so that they are matched with the related costs for which they compensate.
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
99
Note 28
Remuneration of the Board of Directors and Executive Management
The current policy for the remuneration of the Board of Directors and Executive Management was adopted in 2020 and sets
out the general guidelines for the remuneration of the Group’s management. The guidelines for the remuneration of the Board
of Directors and Executive Management are available on the Group website.
In addition to the disclosures provided in this note, more details on the remuneration of Executive Management and Directors
are provided in the separate Remuneration report for the Coloplast Group, which is not a part of the audited financial
statements. The report is also available on the Group website.
Fees to Board members in respect of the current financial year
Fees to Board members make up DKK 7.0 million (2019/20: DKK 7.0 million) of the total staff costs (see note 5 to the financial
statements) and are specified as follows:
DKK million
2020/21 2019/20
Ordinary board member fee
5.3 5.3
Audit Committee
1.1 1.1
Nomination and Remuneration Committee
0.6 0.6
Fee to members of the Board of Directors
7.0 7.0
In addition, the accounting cost of not-yet-vested share options held by the Chairman amount to DKK 2.8 million in 2020/21
(2019/20: DKK 4.5 million) of the total staff costs (see note 5 to the financial statements). The accounting cost is calculated in
line with IFRS 2 and relates to share options awarded to him during his term as CEO. Cost at grant 2020/21 is DKK 0 (2019/20:
DKK 1.4 million).
Remuneration of members of the Executive Management in respect of the current financial year
Remuneration of members of Executive Management make up DKK 61.6 million (2019/20: DKK 49.8 million) of the total staff
costs (see note 5 to the financial statements) and are specified as follows:
DKK million
2020/21 2019/20
Base salaries
32.3 27.5
Pension
4.8 4.1
Other benefits
1.7 1.3
Cash bonus
7.5 3.8
Remuneration of Executive Management, excluding value of share options and contingent salary items
46.3 36.7
Share options
12.9 8.8
Contingent bonus schemes¹
⁾ 2.4 4.3
Remuneration of Executive Management
61.6 49.8
¹
⁾ When Paul Marcun joined Executive Management in 2018/19, he was offered a contingent cash bonus as compensation for waiving long-
term incentive schemes offered by his previous employer. The cash bonus is contingent on continued employment, whereof DKK 5.
1 million
was paid in December 2020 and the remaining DKK 5.1 million is payable in December 2021. The cash bonus is expensed in profit
or loss over
the vesting period.
At 1 October 2020 the Executive Management was expanded from four to five members.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
100
Note 28, continued
The value of share options, which is calculated as the fair value of share options at the grant date using the Black-Scholes
Formula in line with IFRS 2, comprise the annual accounting cost of share options awarded in the current and in prior years in
accordance with the accounting policies applied. Consequently, it does not represent the fair value of share options awarded or
exercised in the current financial year.
If a member of Executive Management is given notice of termination by the company and such termination is not due to breach
on the part of the member of Executive Management, such member is entitled to compensation corresponding to a maximum
of two years’ salary and pension contribution.
Share options are granted to members of Executive Management and senior management. See note 17 to the financial
statements for further information regarding share-based payments as well as the separate Remuneration Report for the
Coloplast Group, which is not part of the audited financial statements. The report is available on the Group website.
Note 29
Related party transactions
Related parties to the Coloplast Group include members of the Board of Directors and the Executive Management and main
shareholders of the parent company, Coloplast A/S. There were no major transactions with related parties. Information about
the remuneration of the Management is set out in note 28 to the financial statements.
Note 30
Fees to auditors appointed by the Annual General Meeting
DKK million
2020/21 2019/20
Statutory audit
9 8
Assurance engagements other than audit
1 -
Tax
advisory 1 -
Other services
2 3
Fee to PricewaterhouseCoopers
13 11
Fee for non-audit services provided to the Group by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab,
Denmark, amounted to DKK 3 million (2019/20: DKK 1 million), relating to tax compliance, transfer pricing, due diligence and
other assurance assessments and opinions.
Certain of the Group's subsidiaries are not subject to an audit by PricewaterhouseCoopers.
Notes to the consolidated financial statements
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
101
Note 31
Events occurring after the balance sheet date
No events have occurred after the balance sheet date which are deemed to have a material impact on the financial results or
equity at 30 September 2021.
Note 32
Acquisitions
Coloplast acquired 100% of the shares and voting rights of three small US direct-to-consumer Durable Medical Equipment
(DME) dealers in the financial year, Rocky Mountain Medical Supply on 4 January 2021, Hope Medical Supply on 1 March 2021
and Affordable Medical, LLC on 4 May 2021.
The agreed consideration for the shares in total for the entities amounts to DKK 97 million (USD 16 million), which fell due for
payment on the date of the acquisitions.
The acquisitions are expected to expand Coloplast’s footprint in the US market and enable Coloplast to offer innovative
products and services to a broader part of the US market.
If the acquisitions had occurred on 1 October 2020, the contribution to the Group’s reported growth, revenue and profit in the
financial year would have been immaterial.
The fair value adjustments for the three distributors consist mainly of trademarks of DKK 4 million and customer lists of DKK 45
million. Customer lists consist of access to Durable Medical Equipment (DME) dealers’ existing customer base (users) and
physician lists. Trademarks consist of the Durable Medical Equipment (DME) dealers’ trademark and name, which are both
associated with sales of catheter supplies.
After recognition of identifiable assets and liabilities at fair value, goodwill related to the acquisition amounts to DKK 45 million,
which amount is deductible for tax purposes. Goodwill expresses the synergies expected to be achieved from the broader
geographical coverage of the US market, access to providing innovative products and services and the opportunity to attract
new users.
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Reports
102
Note 33
Company overview
Notes to the consolidated financial statements
Company
Country
Ownership
Parent company
Coloplast A/S
Denmark
Sales and/or manufacturing subsidiaries
Coloplast de
Argentina S.A.
Argentina
100%
Coloplast Pty. Ltd.
Australia
100%
Coloplast Ges.m.b.H.
Austria
100%
Coloplast Belgium S.A.
Belgium
100%
Coloplast do Brasil Ltda.
Brazil
100%
Coloplast Canada Corporation
Canada
100%
Coloplast Czech s.r.o.
Czech
100%
Republic
Coloplast (China) Ltd.
China
100%
Coloplast (China) Medical Devices Ltd.
China
100%
Coloplast (Hong Kong) Ltd.
China
100%
Coloplast Volume Manufacturing
Costa Rica
100%
Costa Rica S.A.
Coloplast Danmark A/S
Denmark
100%
Coloplast Oy
Finland
100%
Laboratoires Coloplast S.A.S.
France
100%
Coloplast Manufacturing France S.A.S.
France
100%
Lilial S.A.S.
France
100%
Lilial Executives S.A.S.
France
100%
Lilial Preference S.A.S.
France
100%
Coloplast GmbH
Germany
100%
Coloplast Distribution GmbH
Germany
100%
Coloplast Hungary Kft.
Hungary
100%
Coloplast (India) Private Limited
India
100%
Coloplast Israel Ltd.
Israel
100%
Coloplast S.p.A.
Italy
100%
Coloplast K.K.
Japan
100%
Coloplast Korea Limited
Korea
100%
Coloplast B.V.
Netherlands
100%
Coloplast Norge AS
Norway
100%
Coloplast Sp. zo.o.
Poland
100%
Coloplast Portugal Lda.
Portugal
100%
Coloplast II Portugal Lda.
Portugal
100%
Company
Country
Ownership
Coloplast OOO
Russia
100%
Coloplast Slovakia s.r.o.
Slovakia
100%
Coloplast Productos Médicos S.A.
Spain
100%
Coloplast AB
Sweden
100%
Coloplast AG
Switzerland
100%
Coloplast Taiwan Co., Ltd.
Taiwan
100%
Coloplast Turkey AS
Turkey
100%
Coloplast Limited
UK
100%
Coloplast Medical Limited
UK
100%
Charter Healthcare Limited
UK
100%
Porgès UK Limited
UK
100%
Coloplast Corp.
USA
100%
Coloplast Manufacturing US, LLC
USA
100%
Comfort Medical, LLC
USA
100%
Affordable Medical LLC
USA
100%
Hope Medical Supply Company
USA
100%
Rocky Mountain Medical LLC
USA
100%
Nine Continents Medical, Inc.
USA
100%
Other companies
Coloplast Ejendomme A/S
Denmark
100%
Coloplast Business Centre Sp. zo.o.
Poland
100%
Francis Medical, Inc.
USA
13%
Representative offices and branches
Czech Republic
Saudi Arabia
Dubai
Singapore
Egypt
Slovakia
Hungary
South Africa
New Zealand
Ukraine
COMPREHENSIVE INCOME • CASH FLOWS • BALANCE SHEET • EQUITY • NOTES
103
Note 34
Definitions of key ratios
The ratios are calculated and applied in accordance with Recommendations & Financial Ratios issued by the Danish Society of
Financial Analysts. Key ratios are shown on page 2.
EBIT
Earnings before
interest and tax
EBITDA
Earnings before interest, tax, depreciation and amortisation
Invested capital
Assets less cash, less marketable securities plus accumulated goodwill amortised before 1 October 2002 less non
-
interest bearing debt including
provisions
EBIT margin, %
EBIT as a percentage of revenues
Return on average invested capital (ROIC), %
EBIT as a percentage of invested capital (average)
Return on equity, %
Profit for the year attributable to Coloplast as a
percentage of equity before minority interests (average)
Equity ratio, %
Equity at year
-end as a percentage of total assets at year-end
Net asset value per share, DKK
Equity excluding minority interests per outstanding share
Market
price/net asset value per share
Market price per share
relative to net asset value per share
PE, price/earnings ratio
Market price per share relative to earnings per share (EPS)
Payout ratio, %
Dividend declared as a percentage of profit
for the year attributable to Coloplast
Earnings per share (EPS)
Profit for the year attributable to Coloplast per outstanding share
(average of four quarters)
Free cash flow per share
Free cash flow per outstanding share
(average of four quarters)
STATEMENTS
Independent Auditor’s Reports
104
The Board of Directors and the
Executive Management have today
considered and approved the Annual
Report of Coloplast A/S for the financial
year 1 October 2020 – 30 September
2021.
The consolidated financial statements
have been prepared in accordance with
the International Financial Reporting
Standards as adopted by the EU and
additional requirements set out in the
Danish Financial Statements Act.
The parent company financial
statements have been prepared in
accordance with the Danish Financial
Statements Act. In our opinion, the
consolidated financial statements and
the parent company financial
statements give a true and fair view of
the Group’s and the parent company’s
assets, liabilities and financial position at
30 September 2021 and of the results
of the Group’s and the parent
company’s operations and the cash
flows for the Group for the financial
year 1 October 2020 – 30 September
2021.
In our opinion, the Management’s report
includes a fair account of the
development and performance of the
Group and the parent company, the
results for the year and of the financial
position of the Group and the parent
company, together with a description of
the principal risks and uncertainties that
the Group and the parent company
face.
In our opinion, the Annual Report for the
financial year 1 October 2020 to 30
September 2021 with the file name
Coloplast-2021-09-30-da.zip is
prepared, in all material respects, in
compliance with the ESEF Regulation.
We recommend the annual report for
adoption at the Annual General
Meeting.
STATEMENTS
Statement by the Board of Directors and the Executive Management
Humlebæk, 1 November 2021
Executive Management
Kristian Villumsen
Anders Lonning-Skovgaard
Nicolai Buhl Andersen
President, CEO
Executive Vice President, CFO
Executive Vice President
Paul Marcun
Allan Rasmussen
Executive Vice President
Executive Vice President
Board of Directors
Lars Rasmussen
Niels Peter Louis-Hansen
Carsten Hellmann
Chairman
Deputy Chairman
Birgitte Nielsen
Jette Nygaard-Andersen
Marianne Wiinholt
Thomas Barfod
Roland V. Pedersen
Nikolaj Kyhe Gundersen
Elected by the employees
Elected by the employees
Elected by the employees
STATEMENTS • INDEPENDENT AUDITOR’S REPORTS
105
To the shareholders of Coloplast A/S
Report on the audit of the
Financial Statements
Our opinion
In our opinion, the Consolidated
Financial Statements give a true and fair
view of the Group’s financial position at
30 September 2021 and of the results
of the Group’s operations and cash
flows for the financial year 1 October
2020 to 30 September 2021 in
accordance with International Financial
Reporting Standards as adopted by the
EU and further requirements in the
Danish Financial Statements Act.
Moreover, in our opinion, the Parent
Company Financial Statements give a
true and fair view of the Parent
Company’s financial position at 30
September 2021 and of the results of
the Parent Company’s operations for
the financial year 1 October 2020 to 30
September 2021 in accordance with the
Danish Financial Statements Act.
Our opinion is consistent with our
Auditor’s Long-form Report to the Audit
Committee and the Board of Directors.
What we have audited
The Consolidated Financial Statements
of Coloplast A/S for the financial year 1
October 2020 to 30 September 2021
comprise statement of comprehensive
income, statement of cash flows,
balance sheet, statement of changes in
equity and notes, including summary of
significant accounting policies.
The Parent Company Financial
Statements of Coloplast A/S for the
financial year 1 October 2020 to 30
September 2021 comprise income
statement, balance sheet and notes,
including summary of significant
accounting policies.
Collectively referred to as the “Financial
Statements”.
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(ISAs) and the additional requirements
applicable in Denmark. Our
responsibilities under those standards
and requirements are further described
in the Auditor’s responsibilities for the
audit of the Financial Statements
section of our report.
We believe that the audit evidence we
have obtained is sufficient and
appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group in
accordance with the International Ethics
Standards Board for Accountants’
International Code of Ethics for
Professional Accountants (IESBA Code)
and the additional ethical requirements
applicable in Denmark. We have also
fulfilled our other ethical responsibilities
in accordance with these requirements
and the IESBA Code.
To the best of our knowledge and belief,
prohibited non-audit services referred to
in Article 5(1) of Regulation (EU) No
537/2014 were not provided.
Appointment
We were first appointed auditors of
Coloplast A/S on 12 June 1998 for the
financial year 1997/98. We have been
reappointed annually by shareholder
resolution for a total period of
uninterrupted engagement of 24 years
including the financial year 2020/21.
Key audit matters
Key audit matters are those matters
that, in our professional judgement,
were of most significance in our audit of
the Financial Statements for 2020/21.
These matters were addressed in the
context of our audit of the Financial
Statements as a whole, and in forming
our opinion thereon, and we do not
provide a separate opinion on these
matters.
Independent Auditor’s Reports
STATEMENTS
STATEMENTS
Independent Auditor’s Reports
106
Key audit matter
How our audit addressed the key audit matter
Effect of pending and potential transvaginal
mesh cases
Since 2011, Coloplast has been a party to individual lawsuits
in different federal and state courts in the USA where claims
of product liability have been registered relating to the use of
transvaginal mesh for the treatment of pelvic organ prolapse
and st
ress urinary incontinence.
We focused on the assessment of the liability relating to the
transvaginal mesh cases as the valuation is subject to
significant
estimates, including significant
assumptions relating
to
expected settlement amounts and legal costs per case as
well as the number of cases.
We refer to note
19 in the Consolidated Financial Statements
for detailed information on the transvaginal mesh cases.
We discussed the principles for the assessment of the liability
relating to the transvagina
l mesh cases with Management.
We obtained and evaluated the accuracy of Management’s
calculation of the liability relating to the transvaginal mesh
cases. Further, we assessed and tested key data input and
significant assumptions and recalculated the lia
bility.
We tested the principles for identification and assessment of
potential and on
-going transvaginal mesh cases, and we
discussed and obtained statements from internal and external
legal counsel on the likely economic consequences of the
transvaginal mesh cases, including the expected number of
cases, the expected settlement amounts and the expected
legal costs.
Based on the historical development of the overall
proceedings of the transvaginal mesh cases, we evaluated
Coloplast’s ability
to estimate its monetary exposure to the
transvaginal mesh cases by comparing historically recorded
liabilities to actual monetary amounts incurred upon
resolution of prior legal matters. Furthermore, we assessed
the reasonableness of Management’s expectat
ions of the
settlement amount per case with respect to cases not yet
settled and expectations for any additional registration of
claims as well as additional legal costs.
We also assessed the disclosures in note
19 of the
Consolidated Financial Statements
relating to the cases.
Revenue recognition
T
he preparation and negotiation of sales agreements take
place with due consideration of territorial healthcare reforms,
diverse legislation, increased competition, growth strategies
and
requirements relating to various tenders. The main part
of Coloplast’s sales are carried out through distributors, who
operate under diverse circumstances and consequently have
different requirements that affects the sales agreements
.
Coloplast’s agreeme
nts with distributors include volume and
product dependent discounts, which requires data
management and monitoring of sales at product level to the
individual distributor
s.
We focused on the recognition of revenue as the accounting
rules are complex an
d involve assessments of the timing and
amount of the revenue to be recognised.
We refer to note
3 in the Consolidated Financial Statements.
We reviewed and assessed the procedures and internal
controls relating to revenue and tested relevant controls with
special focus on controls relating to the conclusion of
agreements and collection of relevant data
.
We discussed the recognition principles with Management
including distributor agreements and the related sales
transactions.
We applied data
analysis to revenue transactions in order to
obtain an understanding of the transaction flow in the Group
and in relation hereto, we tested a sample of revenue
transactions.
Finally, we tested a sample of revenue transactions to sales
agreements, tested p
rovisions for discounts and tested the
time of recognition of sales transactions.
STATEMENTS • INDEPENDENT AUDITOR’S REPORTS
107
Statement on Management’s Review
Management is responsible for
Management’s Review.
Our opinion on the Financial Statements
does not cover Management’s Review,
and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the
Financial Statements, our responsibility
is to read Management’s Review and, in
doing so, consider whether
Management’s Review is materially
inconsistent with the Financial
Statements or our knowledge obtained
in the audit, or otherwise appears to be
materially misstated.
Moreover, we considered whether
Management’s Review includes the
disclosures required by the Danish
Financial Statements Act.
Based on the work we have performed,
in our view, Management’s Review is in
accordance with the Consolidated
Financial Statements and the Parent
Company Financial Statements and has
been prepared in accordance with the
requirements of the Danish Financial
Statements Act. We did not identify any
material misstatement in Management’s
Review.
Management’s responsibilities for the
Financial Statements
Management is responsible for the
preparation of consolidated financial
statements that give a true and fair view
in accordance with International
Financial Reporting Standards as
adopted by the EU and further
requirements in the Danish Financial
Statements Act and for the preparation
of parent company financial statements
that give a true and fair view in
accordance with the Danish Financial
Statements Act, and for such internal
control as Management determines is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error.
In preparing the Financial Statements,
Management is responsible for
assessing the Group’s and the Parent
Company’s ability to continue as a going
concern, disclosing, as applicable,
matters related to going concern and
using the going concern basis of
accounting unless Management either
intends to liquidate the Group or the
Parent Company or to cease
operations, or has no realistic
alternative but to do so.
Auditor’s responsibilities for the audit
of the Financial Statements
Our objectives are to obtain reasonable
assurance about whether the Financial
Statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level of
assurance, but is not a guarantee that
an audit conducted in accordance with
ISAs and the additional requirements
applicable in Denmark will always detect
a material misstatement when it exists.
Misstatements can arise from fraud or
error and are considered material if,
individually or in the aggregate, they
could reasonably be expected to
influence the economic decisions of
users taken on the basis of these
Financial Statements.
As part of an audit in accordance with
ISAs and the additional requirements
applicable in Denmark, we exercise
professional judgement and maintain
professional scepticism throughout the
audit. We also:
• Identify and assess the risks of
material misstatement of the
Financial Statements, whether due
to fraud or error, design and
perform audit procedures
responsive to those risks, and obtain
audit evidence that is sufficient and
appropriate to provide a basis for
our opinion. The risk of not detecting
a material misstatement resulting
from fraud is higher than for one
resulting from error, as fraud may
involve collusion, forgery, intentional
omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal
control relevant to the audit in order
to design audit procedures that are
appropriate in the circumstances,
but not for the purpose of
expressing an opinion on the
effectiveness of the Group’s and the
Parent Company’s internal control.
STATEMENTS
Independent Auditor’s Reports
108
• Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting
estimates and related disclosures
made by Management.
• Conclude on the appropriateness of
Management’s use of the going
concern basis of accounting and
based on the audit evidence
obtained, whether a material
uncertainty exists related to events
or conditions that may cast
significant doubt on the Group’s and
the Parent Company’s ability to
continue as a going concern. If we
conclude that a material uncertainty
exists, we are required to draw
attention in our auditor’s report to
the related disclosures in the
Financial Statements or, if such
disclosures are inadequate, to
modify our opinion. Our conclusions
are based on the audit evidence
obtained up to the date of our
auditor’s report. However, future
events or conditions may cause the
Group or the Parent Company to
cease to continue as a going
concern.
• Evaluate the overall presentation,
structure and content of the
Financial Statements, including the
disclosures, and whether the
Financial Statements represent the
underlying transactions and events
in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit
evidence regarding the financial
information of the entities or
business activities within the Group
to express an opinion on the
Consolidated Financial Statements.
We are responsible for the direction,
supervision and performance of the
group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged
with governance regarding, among
other matters, the planned scope and
timing of the audit and significant audit
findings, including any significant
deficiencies in internal control that we
identify during our audit.
We also provide those charged with
governance with a statement that we
have complied with relevant ethical
requirements regarding independence,
and to communicate with them all
relationships and other matters that
may reasonably be thought to bear on
our independence and, where
applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with
those charged with governance, we
determine those matters that were of
most significance in the audit of the
Financial Statements of the current
period and are therefore the key audit
matters. We describe these matters in
our auditor’s report unless law or
regulation precludes public disclosure
about the matter or when, in extremely
rare circumstances, we determine that a
matter should not be communicated in
our report because the adverse
consequences of doing so would
reasonably be expected to outweigh the
public interest benefits of such
communication.
Report on compliance with the
ESEF Regulation
As part of our audit of the Financial
Statements we performed procedures
to express an opinion on whether the
annual report of Coloplast A/S for the
financial year 1 October 2020 to 30
September 2021 with the filename
Coloplast-2021-09-30-da.zip is
prepared, in all material respects, in
compliance with the Commission
Delegated Regulation (EU) 2019/815
on the European Single Electronic
Format (ESEF Regulation) which
includes requirements related to the
preparation of the annual report in
XHTML format and iXBRL tagging of
the Consolidated Financial Statements.
Management is responsible for
preparing an annual report that
complies with the ESEF Regulation. This
responsibility includes:
• The preparing of the annual report
in XHTML format;
• The selection and application of
appropriate iXBRL tags, including
extensions to the ESEF taxonomy
and the anchoring thereof to
elements in the taxonomy, for all
financial information required to be
tagged using judgement where
necessary;
• Ensuring consistency between
iXBRL tagged data and the
Consolidated Financial Statements
presented in human-readable
format; and
• For such internal control as
Management determines necessary
to enable the preparation of an
annual report that is compliant with
the ESEF Regulation.
STATEMENTS • INDEPENDENT AUDITOR’S REPORTS
109
Our responsibility is to obtain reasonable
assurance on whether the annual report
is prepared, in all material respects, in
compliance with the ESEF Regulation
based on the evidence we have
obtained, and to issue a report that
includes our opinion. The nature, timing
and extent of procedures selected
depend on the auditor’s judgement,
including the assessment of the risks of
material departures from the
requirements set out in the ESEF
Regulation, whether due to fraud or
error. The procedures include:
• Testing whether the annual report is
prepared in XHTML format;
• Obtaining an understanding of the
company’s iXBRL tagging process
and of internal control over the
tagging process;
• Evaluating the completeness of the
iXBRL tagging of the Consolidated
Financial Statements;
• Evaluating the appropriateness of
the company’s use of iXBRL
elements selected from the ESEF
taxonomy and the creation of
extension elements where no
suitable element in the ESEF
taxonomy has been identified;
• Evaluating the use of anchoring of
extension elements to elements in
the ESEF taxonomy; and
• Reconciling the iXBRL tagged data
with the audited Consolidated
Financial Statements.
In our opinion, the annual report of
Coloplast A/S for the financial year 1
October 2020 to 30 September 2021
with the file name Coloplast-2021-09-
30-da.zip is prepared, in all material
respects, in compliance with the ESEF
Regulation.
Hellerup, 1 November 2021
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no. 33 77 12 31
Mogens Nørgaard Mogensen
State Authorised Public Accountant
mne21404
Kim Tromholt
State Authorised
Public Accountant
mne33251
STATEMENTS
Independent Auditor’s Reports
110
111
Parent
company
financial
statements
Coloplast
PARENT COMPANY FINANCIAL STATEMENTS
Independent Auditor’s Reports
112
Income statement
1 October - 30 September
DKK million
Note 2020/21 2019/20
Revenue
3 13,822 12,679
Production costs
4 -6,473 -6,071
Gross profit
7,349 6,608
Distribution costs
4 -1,193 -1,202
Administrative expenses
4, 5 -644 -356
Research and development costs
4 -786 -716
Other operating income
18 16
Other
operating expenses -7 -8
Operating profit (EBIT)
4,737 4,342
Profit/loss after tax on investments in subsidiaries
10 870 942
Financial income
6 143 28
Financial expenses
6 -24 -318
Profit before tax
5,726 4,994
Tax on
profit for the year 7 -995 -897
Net profit for the year
2 4,731 4,097
PARENT COMPANY FINANCIAL STATEMENTS
Income statement and balance sheet
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
113
Balance sheet
At 30 September
DKK million
Note 2021 2020
Assets
Intangible assets
8 2,091 859
Property, plant and equipment
9 661 639
Financial assets
10 3,916 3,611
Non
-current assets 6,668 5,109
Inventories
11 1,027 1,225
Trade receivables
388 378
Receivables from Group companies
3,016 2,503
Other receivables
117 250
Prepayments
73 95
Amounts held in escrow
12 - -
Marketable securities
226 262
Cash and cash equivalents
85 41
Current assets
4,932 4,754
Assets
11,600 9,863
Equity and liabilities
Share
capital
216 216
Reserve for currency hedging
-41 59
Proposed ordinary dividend for the year
2,979 2,765
Retained earnings
3,877 3,327
Equity
13 7,031 6,367
Provisions for pensions and similar liabilities
14 2 3
Provision for deferred tax
15 324 81
Other provisions
14 30 115
Non
-current liabilities 356 199
Other provisions
14 138 152
Other credit institutions
2,306 1,307
Trade payables
270 235
Payable to
Group companies
531 559
Income tax
506 676
Other payables
462 368
Current liabilities
4,213 3,297
Liabilities
4,569 3,496
Equity and liabilities
11,600 9,863
Contingent items and other
financial liabilities 16
114
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 1
Accounting policies
Basis of preparation
The parent company’s financial statements are presented in accordance with the Danish Financial Statements Act for
companies in reporting class D.
The accounting policies of the parent company are the same as those of the Group, but with the addition of the policies
described below. The Group’s accounting policies are set out in note 1, 2 and 3 to the consolidated financial statements.
Other than as set out hereinabove, there have been no changes to the accounting policies relative to last year.
General information
No separate cash flow statement has been prepared for the parent company as per the exemption clause of section 86(4) of
the Danish Financial Statements Act. The consolidated cash flow statement is set out on page 53.
Intangible assets
Goodwill is measured at cost less accumulated amortisation and impairment. Amortisation is calculated using the straight-line
method over the expected useful life, estimated at 10 years. This estimate was made on the basis of estimated useful lives of the
other assets acquired in the transaction.
Property, plant and equipment
Leases, under which substantially all risk and rewards or ownership of an asset are transferred, are classified as finance leases.
Other leases are classified as operating leases. No finance leases have been recognised in the parent company’s financial
statements.
Financial assets
In the parent company’s financial statements, investments in subsidiaries and associates are recognised according to the equity
method. The share of the results of subsidiaries less unrealised intra-group gains is recognised in the parent company’s income
statement. Net revaluation of investments in subsidiaries and associates exceeding the dividend declared by such companies is
recognised in equity as reserve for net revaluation according to the equity method.
Financial instruments
The accounting policies and other information about derivative financial instruments are set out in note 23 to the consolidated
financial statements.
Tax
The parent company is taxed jointly with its domestic subsidiaries. The jointly taxed Danish subsidiaries are covered by the
Danish on-account tax scheme. Current tax for jointly taxed companies is recognised in each individual company.
Note 2
Profit distribution
DKK million
2020/21 2019/20
Profit distribution
Retained earnings
687 269
Dividend paid during the year
1,065 1,063
Proposed dividend for the year
2,979 2,765
Total
4,731 4,097
Notes to Parent Company financial statements
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
115
Note 3
Revenue
DKK million
2020/21 2019/20
Business areas
Intimate healthcare
13,822 12,679
Total
13,822 12,679
Geographical markets
Europe
8,824 8,717
Americas
3,168 2,383
Rest of the world
1,830 1,579
Total
13,822 12,679
Note 4
Staff costs
DKK
million 2020/21 2019/20
Specification of staff costs recognised in the financial year
Salaries, wages and directors' remuneration
1,126 1,072
Pensions
92 91
Other social security costs
10 8
Total
1,228 1,171
Average number of employees, FTEs
1,339 1,376
See note 28 to the consolidated financial statements for information on the remuneration for the Board of Directors and
Executive Management.
Note 5
Fees to auditors appointed by the Annual General Meeting
DKK million
2020/21 2019/20
Statutory audit
5 5
Assurance engagements other than audit
1 -
Tax advisory
1 -
Other services
1 1
Fee to PricewaterhouseCoopers
8
6
116
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 6
Financial income and expenses
DKK
million 2020/21 2019/20
Financial income
Interest income, etc.
5 5
Interest income from Group companies
20 23
Net exchange adjustments
99 -
Fair value adjustments, forward contracts
19 -
Total
143 28
Financial expenses
Interest expenses, etc.
22 12
Interest expenses from Group companies
2 2
Net exchange adjustments
- 214
Fair value adjustments, forward contracts
- 90
Total
24 318
Note 7
Tax on profit for the year
DKK million
2020/21 2019/20
Current tax on profit for the year
732 879
Change in deferred tax on profit for the year
264 14
Adjustment of tax relating to prior years
-1 4
Tax on profit for the year
995 897
Tax on equity
entries, income 74 9
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
117
Note 8
Intangible assets
Total
DKK million
Acquired
patents,
trademarks
and know
-
how etc.
Goodwill
Software
Prepay
-
ments and
intangible
assets in
progress
2020/21 2019/20
Cost at 1 October
1,461 1,506 398 76 3,441 3,372
Transfers
- - 51 -51 - -
Additions and improvements during the year
1,282 40 38 59 1,419 85
Disposals during the year
- - -23 - -23 -16
Cost at 30 September
2,743 1,546 464 84 4,837 3,441
Amortisation at 1 October
1,369 929 284 - 2,582 2,386
Amortisation for the year
45 96 46 - 187 212
Amortisation reversed on disposals during the year
- - -23 - -23 -16
Amortisation at 30 September
1,414 1,025 307 - 2,746 2,582
Carrying amount at 30 September
1,329 521 157 84 2,091 859
Note 9
Property, plant and equipment
Total
DKK million
Plant and
machinery
Other
fixtures
and
fittings,
tools and
equipment
Prepay
-
ments and
assets
under
construc
-
tion
2020/21 2019/20
Cost at 1 October
595 831 158 1,584 1,656
Transfers
52 42 -94 - -
Additions and improvements during the year
35 30 143 208 176
Disposals during the year
-69 -35 -1 -105 -248
Cost at 30 September
613 868 206 1,687 1,584
Depreciations at 1 October
342 603 - 945 994
Depreciations for the year
43 101 - 144 177
Depreciations reversed on disposals during the year
-29 -34 - -63 -226
Depreciations at 30 September
356 670 - 1,026 945
Carrying amount at 30 September
257 198 206 661 639
118
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 10
Financial assets
Total
DKK million
Investments in
Group companies
Receivables from
Group companies
Other securities and
investments
2020/21 2019/20
Cost at 1 October
3,619 414 35 4,068 3,877
Capital investments
1,507 9 16 1,532 246
Divestments
- -330 -9 -339 -55
Cost at 30 September
5,126 93 42 5,261 4,068
Value adjustments at 1 October
-449 - -8
-457 -764
Profit after tax
870 - - 870 940
Dividend received
-679 - - -679 -409
Exchange adjustments
57 - -1 56 -226
Other adjustments
-1,143 - 8 -1,135 2
Value adjustments at 30 September
-1,344 - -1
-1,345 -457
Carrying amount at 30 September
3,782 93 41 3,916 3,611
See note 33 in the consolidated financial statements for an overview of subsidiaries.
Note 11
Inventories
DKK million
2021 2020
Raw materials and consumables
41 36
Work in progress
229 225
Manufactured goods
757 964
Inventories at 30 September
1,027 1,225
The company has not provided inventories as security for debt obligations.
Note 12
Amounts held in escrow
Amounts paid into escrow accounts relate to the litigation about transvaginal surgical mesh products. See note 19 to the
consolidated financial statements for more information regarding the litigation about transvaginal surgical mesh products.
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
119
Note 13
Statement of changes in equity
Share capital Total equity
DKK million
A shares
B
shares
Currency
hedging
reserve
Proposed
dividend
Retained
earnings
2020/21 2019/20
Equity at 1 October
18 198 59 2,765 3,327 6,367 5,928
Net profit for the year
- - - 4,044 687 4,731 4,097
Value adjustment of
currency hedging - - -109 - - -109 55
Transferred to financial items
- - -19 - - -19 89
Tax effect of hedging
- - 28 - - 28 -32
Currency adjustment of opening
balances and other adjustments
relating to subsidiaries
- - - - -109 -109 -227
Transactions with shareholders
Acquisition of treasury shares
- - - - -500 -500 -500
Sale of treasury shares
- - - - 395 395 501
Share
-based payment - - - - 31 31 27
Tax on
equity entries - - - - 46 46 41
Interim dividend paid out in respect of
2020/21
- - - -1,065 - -1,065 -1,063
Dividend paid out in respect of
2019/20
- - - -2,765 - -2,765 -2,549
Equity at 30 September
18 198 -41 2,979 3,877 7,031 6,367
Note 14
Provisions
Total
DKK million
Legal
claims
Pension
2020/21 2019/20
Provisions at 1 October
267 3
270 443
Exchange adjustments
-6 - -6
-24
Provisions used during the year
-293 -1 -294 -149
Additional provisions
200 - 200 -
Provisions at 30 September
168 2
170 270
Expected maturities
Current liabilities
138 - 138 152
Non
-current liabilities 30 2 32 118
Provisions at 30 September
168 2
170 270
See note 19 to the consolidated financial statements for more information regarding the litigation about transvaginal surgical
mesh products.
120
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
Note 15
Deferred tax
DKK million
2021 2020
Calculation of deferred tax is based on the following items
Intangible assets
333 57
Property, plant and equipment
44 63
Production overhead
11 14
Provisions
-48 -59
Jointly taxed companies (recaptured balances)
10 10
Cash flow hedges
-11 -
Other
-15 -4
Deferred tax at 30
September, net 324 81
Note 16
Contingent items and other financial liabilities
2021 2020
DKK million
Rent
Other
operating
leases
Total
Rent
Other
operating
leases
Total
Falling due in
Less than one year
49 26 75 49 20 69
Within 1 to 5 years
49 22 71 99 21 120
After more than 5 years
- - - - - -
Other financial liabilities at 30 September
98 48 146 148 41 189
The parent company had provided guarantees for loans raised by Group companies amounting to DKK 519 million at 30
September 2021 (DKK 525 million at 30 September 2020).
The parent company has issued a letter of subordination to the benefit of other creditors of subsidiaries.
The parent company is involved in minor lawsuits, which, other than as described in note 19 to the consolidated financial
statements, are not expected to influence the parent company’s future earnings.
The parent company is jointly and severally liable for tax on the Group’s jointly taxed Danish income, etc.
Bonds in repo transactions have been provided as collateral for repo debt. Bonds provided as collateral were valued at DKK 203
million at 30 September 2021 (DKK 208 million at 30 September 2020).
INCOME STATEMENT • BALANCE SHEET • NOTES • SHAREHOLDER INFORMATION
121
Announcements 2020/21
Financial calendar 2021/22
2020
2021
10/2020 Full-year Financial Results 2019/20
11
/2020 Annual Report 2019/20 &
Remuneration Report 2019/20
12/2020
Sustainability Report 2019/20
13
/2020 Notice of Annual General Meeting
14
/2020 Decisions of Annual General Meeting
2020
15
/2020 Articles of Association
4 October Closing period until 1 November
20
October Notice of submission of agenda points for
Annual General Meeting
1
November Financial Statements for the full year
2020/21 and Annual Report 2020/21
2
December Annual General Meeting
7
December Dividends for 2020/21 at the disposal of
shareholders
20 December
Closing period until 25 January 2022
20
21
20
22
01/2021 Interim Financial Report, Q1 2020/21
0
2/2021 Share Buyback Programme
0
3/2021 Interim Financial Report, H1 2020/21
0
4/2021 Interim Financial Report, 9M 2020/21
0
5/2021 Financial Calendar 2021-22
25 January Interim Financial Statements for Q1
2021/22
11
April Closing period until 5 May
5
May Interim Financial Statements for H1
2021/22
4
July Closing period until 17 August
17
August Interim Financial Statements for 9M
2021/22
10
October Closing period until 7 November
19
October Notice of submission of agenda points for
Annual General Meeting
7
November Financial Statements for the full year
2021/22 & Annual Report 2021/22
1
December Annual General Meeting 2022
6
December Dividends for 2021/22 at the disposal of
shareholders
Banks and stockbroking companies following Coloplast
ABG Sundal Collier
AlphaValue
Barclays
Berenberg
Bernstein
Bo
fA Merrill Lynch
Carnegie
CFRA
Citi
Credit
Suisse
Danske Bank
D
NB
Exane BNP Paribas
Goldman Sachs
Handelsbanken
J.P. Morgan
Jyske Bank
Kepler Cheuvreux
Morgan Stanley
Morningstar Inc.
Nordea
Nykredit
ODDO BHF
Redburn
SEB
Sydbank
Investor Relations contacts
Ellen Bjurgert
Vice
President, Investor Relations
Aleksandra Dimovska
Senior Manager, Investor Relations
Tel. +45 49 11 33 76
Tel. +45 49 11 24 58
Email: dkebj@coloplast.com
Email: dkadim@coloplast.com
SHAREHOLDER INFORMATION
Financial calendar, analysts following Coloplast and contact information
122
Notes to Parent Company financial statements
PARENT COMPANY FINANCIAL STATEMENTS
The Coloplast story begins back in 1954. Elise
Sørensen is a
nurse. Her sister Thora has just had
an ostomy operation and is afraid to go out in
public, fearing that her stoma might leak. Listening
to her sister’s problems, Elise conceives the idea of
the world’s first adhesive ostomy bag.
Based on Elise’s idea, A
age Louis-Hansen, a civil
engineer and plastics manufacturer, and his wife
Johanne Louis
-Hansen, a trained nurse, created
the ostomy bag. A bag that does not leak, giving
Thora
– and thousands of people like her – the
chance to live the life they want.
A
simple solution that makes a difference.
Today, our business includes Ostomy Care,
Continence Care, Wound & Skin Care and
Interventional Urology. We operate globally
and employ about 12,
500 employees.
Our mission
Making life easier for people
with intimate healthcare needs
Our values
Closeness... to better understand
Passion... to make a difference
Respect and responsibility... to guide us
Our vision
Setting the global standard
for listening and responding
Coloplast
who use our products, we create solutions that are sensitive to their special needs. We call this intimate healthcare. Our bu
siness includes ostomy care,
cont
inence care, wound and skin care and interventional urology. We operate gl obally a nd employ about 12,500 employees.
The Coloplast logo is a registered trademark of Coloplast A/S. © 2020
-11.
All rights reserved Coloplast A/S,
3050 Humlebaek, Denmark .
Holtedam 1
3050
Company registration (CVR) No. 69 74 99 17