1
William Demant Invest • Annual Report 2022
Annual Report
2022
2 William Demant Invest • Annual Report 2022
Evergreen investor
We are a long-term investor with keen focus on companies with
sustainable business models and structures resembling those of
Demant and favourable growth prospects.
We believe in ownership longevity as a means of fostering the right
conditions for long-term value creation. In short, we are in it for the
long haul.
2 William Demant Invest • Annual Report 2022
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William Demant Invest • Annual Report 2022
Content
Insights and highlights
1
Letter from the CEO 5
About William Demant Invest 7
Investment strategy 8
William Demant Invest at a glance 9
Pro forma consolidation 10
The William Demant Invest companies 11
Demant 12
Össur 14
Vision RT 16
Vitrolife 18
CellaVision 20
Revenio 22
INVISIO 24
Jeudan 26
Corporate information 28
Board of Directors 29
Board of Directors 30
Management 31
Group approach to ESG 32
ESG investment policy 33
Investment case: ESG in Demant 34
Financial report 35
Financial review 37
Key figures and financial ratios 38
Management statement 39
Independent auditor’s report 40
Notes to consolidated financial statements 48
Parent financial statements 106
Notes to parent financial statements 110
Insights and highlights The WDI companies Corporate information Financial report
Letter from the CEO
4 William Demant Invest • Annual Report 2022
Insights and
highlights
Active ownership
We are looking for companies
where we can be an active partner.
We want to be a part of – and contribute to
– the companies we invest in.
Insights and highlights The WDI companies Corporate information Financial report
4 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Letter from the CEO
5 William Demant Invest • Annual Report 2022
In stable periods characterised by
predictability and low inflation levels, you
normally observe a clear correlation
between the performance of a company
and its market value. However, 2022 was
neither stable, nor predictable: Russia’s
invasion of Ukraine destabilised Europe
and beyond, and high inflation and
increasing interest levels resulted in vastly
decreasing asset and stock prices, also
impacting the William Demant Invest
portfolio.
However, despite negative market value
development, we have seen good
business momentum and solid results
across our portfolio companies.
Therefore, the decreasing market value
during 2022 of the companies in the
William Demant Invest portfolio does not
reflect the underlying performance or
prospects of the companies. Entering
2022, some companies had surely
anticipated more, but on an overall level,
the companies have progressed with
generally healthy business performance –
with some companies even delivering
their strongest results ever in 2022.
During the year, we completed the
divestment of our share in the German
offshore wind farm Borkum Riffgrund I. As
mentioned in last year’s annual report, the
decision was driven by us refocusing our
investment activities, and the divestment
also reflected the strong efforts made
over the years by our portfolio companies
in developing their own sustainability
metrics.
Furthermore, we also ended our
involvement in the start-up studio and
company builder Founders, which was
always meant to be a 10-year project. As
part of the separation agreement with
Founders Management, we and the two
other partners still hold a significant
ownership in Pleo – a company active
within expense management and
technology for smart company card
payments.
In 2022, we continued to execute on our
investment strategy and increased and
strengthened our ownership in various
companies in our portfolio, including
Vitrolife, Revenio and INVISIO.
Furthermore, we made a new investment
during the year, where we acquired 10%
of GN Store Nord, which amounts to an
investment of more than DKK 2 billion.
Consequently, we have seen a natural
increase in the debt level in William
Demant Invest, but nevertheless, we
consider the current capital structure
balanced and sustainable given the nature
of our business model and the quality and
volume of our portfolio companies.
A challenging year does not change our
investment strategy and our long-term,
evergreen approach towards our
investments, and we are very optimistic
about the future. During the year, we saw
positive tendencies where markets started
to slowly normalise, which calls for
optimism about a more stable and
normalised period ahead.
We have great faith in our portfolio of
companies, and we see clear growth
trajectories in the entire portfolio – and
already in 2023, this optimism will
hopefully again materialise into increasing
market value growth.
We would like to thank both employees
and customers of the companies in the
William Demant Invest group for their
efforts in 2022 – and we look forward to
continuing the collaboration in 2023.
Niels Jacobsen
Letter from the CEO
In a year of challenges and uncertainty, the companies
in the William Demant Invest portfolio still managed to
progress in a satisfactory way. However, the market value
of the companies saw a significant decrease, which we
ascribe to the geopolitical uncertainty and high inflation
levels in the countries and markets where the companies
operate.
Insights and highlights The WDI companies Corporate information Financial report
Letter from the CEO
6 William Demant Invest • Annual Report 2022
“The kite is a symbol of how we conduct our
business in William Demant Invest. Hovering
high up in the air, the kite possesses
perspective and overview of the landscape
below. To make sure that it never flies off in
unwanted directions, it is held tight by a string,
ensuring a grounded connection to the world.”
Niels Jacobsen, CEO
Insights and highlights The WDI companies Corporate information Financial report
6 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
About William Demant
Invest
7
William Demant Invest • Annual Report 2022
History and
purpose
William Demant Invest was founded in
2004 as a wholly owned holding company
for all William Demant Foundation’s
investment activities. Today, William
Demant Invest secures liquidity primarily
from capital returns from subsidiaries and
associated companies.
The main purpose of William Demant
Foundation is to secure and expand
Demant and to donate a share of its net
income to charter-defined causes. This
long-term perspective recurs in the
majority of William Demant Invest’s other
investments where William Demant Invest
seeks a substantial and active
participation in the further development
of subsidiaries and associated companies.
Group structure
and governance
William Demant Invest is the holding
company for William Demant
Foundation’s investment activities. The
wholly owned relationship between
William Demant Foundation and William
Demant Invest as well as the identical
Boards of Directors ensure that
investments are carried out in respect of
the charter of William Demant Foundation
along with the investment strategy
outlined in William Demant Invest.
The investment strategy is undertaken by
William Demant Invest, however, voting
rights and decisions to buy or sell Demant
shares are exercised and made by William
Demant Foundation. William Demant
Foundation has communicated a 55-60%
ownership interval in Demant.
About William Demant Invest
The Group structure illustrated above reflects ownership figures as of 20 March 2023. Ownership in Demant
and INVISIO represents the combined ownership of William Demant Foundation and William Demant Invest.
The strategic long-term investments are presented in the section “The William Demant Invest companies”
on page 11.
Insights and highlights The WDI companies Corporate information Financial report
Investment strategy
8
William Demant Invest • Annual Report 2022
Through the many years of engagement in
Demant, William Demant Invest has built
up extensive knowledge of developing and
managing a company of this kind – a
knowledge and expertise permeating the
investment strategy of William Demant
Invest.
Because of the success of Demant, it is
natural to search for similarities in new
investments and thereby reuse the
expertise gained over the years.
Therefore, William Demant Invest mainly
looks for innovation-driven companies in
niche markets, with a strong, unified
product program and a global distribution
model, with local sales activities and a
growth and globalisation journey ahead of
them.
Historically, several investments have
been within the MedTech industry.
William Demant Invest also takes up
ownership within other industries besides
MedTech, however, normally in
companies with a business model similar
to Demant’s.
Stable cash flow
generation
Competent
management
Preferably listed
companies
Strong underlying market
factors
Revenue around
DKK 250 million or more
and strong profitability
Investment strategy
Criteria for ownership
The investment strategy of William Demant Invest is summarised through
the following criteria for ownership
Insights and highlights The WDI companies Corporate information Financial report
William Demant Invest at a
glance
9 William Demant Invest • Annual Report 2022
William Demant Invest at a glance
Key figures
Aggregate figures for all William Demant Invest companies (100% level)
William Demant Invest’s total market value*
DKK billion
*Calculated as the sum of William Demant Invest's proportional share of market capitalisation of all portfolio
companies less William Demant Invest's net debt. Please see pro forma consolidation on page 10 for a
specification.
0
20
40
60
80
100
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Demant Other William Demant Invest companies
Revenue (DKK million)
50,038
Growth
14%
2021: DKK 43,838 million
EBITDA (DKK million)
9,604
Growth
-13%
2021: DKK 10,992 million
Average # of employees
33,664
Growth
15%
2021: 29,375
Mkt. cap EoY (DKK billion)
134
Growth
-47%
EoY 2021: DKK 254 billion
Insights and highlights The WDI companies Corporate information Financial report
Pro forma consolidation
10 William Demant Invest • Annual Report 2022
The pro forma consolidation is prepared
on the basis of average share of owner-
ship in the reported years (adjusted for
treasury shares). The market capitalisation
is prepared on the basis of share of
ownership end of period. In the market
capitalisation figures, William Demant
Invest’s debt to William Demant
Foundation is eliminated.
The “Other” category includes Vision RT
and administration costs. The comparable
numbers for Borkum Riffgrund 1, which
was divested during 2022, represent
Boston Holding’s proportional share of the
wind farm (50%) and William Demant
Invest’s share of ownership, until the
divestment of Borkum Riffgrund 1,
amounted to 19%.
Pro forma consolidation
Individual entities -
100%
William Demant Invest
A/S proportional share
2022 2021 2022 2021
Employees, average
Demant A/S
19,239 16,866 11,274 9,593
Össur hf. 3,866 3,668 2,017 1,905
Vision RT Ltd.
267 256 238 228
Vitrolife AB
1,117 478 315 121
CellaVision AB
254 215 51 42
Revenio Group Oyj
194 167 29 19
J
eudan A/S 637 598 267 251
INVISIO AB
208 187 28 8
GN Store Nord A/S
7,871 6,919 28 -
Other
11 21 11 13
Total 33,664 29,375 14,258 12,180
Market capitalisation (DKK million)
Demant A/S (DKK 192.6/335.1)*
42,970 77,117 25,351 44,604
Össur hf. (DKK 33.6/42.3) 14,122 17,862 7,368 9,276
Vitrolife AB (SEK 186.2/560.0)
16,856 55,046 4,834 14,719
CellaVision AB (SEK 229.0/325.2)
3,652 5,631 728 1,122
Revenio Group Oyj (EUR 38.6/55.6)
7,659 11,032 1,232 1,451
J
eudan A/S (DKK 240.0/275.0) 13,304 15,244 5,582 6,396
INVISIO AB (SEK 164.6/163.8)*
4,958 5,297 828 413
GN Store Nord A/S (DKK 159.8/411.3)
20,450 52,530 2,195 -
Other**
10,218 14,213 -1,109 3,294
Total 134,189 253,972 47,009 81,275
Parentheses show year-end share prices.
*Including the ownership of William Demant Foundation.
**Other includes Net debt subtracted value of Vision RT and Pleo in 2022 and value of Vision RT, Founders and Borkum
Riffgrund 1 subtracted Net debt in 2021.
(DKK million)
Individual entities -
100%
William Demant Invest
A/S proportional share
2022 2021
2022 2021
Revenue
Demant A/S 19,705 17,905 11,545 10,176
Össur hf. 5,090 4,524 2,653 2,344
Vitrolife AB
2,199 1,211 621 305
CellaVision AB
435 407 87 79
Revenio Group Oyj
721 586 108 67
J
eudan A/S 2,001 1,814 840 761
Borkum Riffgrund 1 (Boston Holding A/S)
- 727 - 269
Invisio AB
527 427 70 18
GN Store Nord A/S
18,687 15,775 67 -
Other
673 462 600 412
Total
50,038 43,838 16,591 14,431
EBITDA
Demant A/S
4,383 4,730 2,568 2,690
Össur hf. 810 943 423 490
Vitrolife AB
714 392 202 99
CellaVision AB
134 141 27 27
Revenio Group Oyj
246 191 37 22
J
eudan A/S 1,006 896 422 376
Borkum Riffgrund 1 (Boston Holding A/S)
- 578 - 214
Invisio AB
76 50 10 2
GN Store Nord A/S
2,045 3,048 7 -
Other
190 23 166 29
Total 9,604 10,992 3,862 3,949
Insights and highlights The WDI companies Corporate information Financial report
Demant
11 William Demant Invest • Annual Report 2022
Diversified portfolio
Over the years, we have accumulated extensive expertise in building up
and managing global companies, especially in the MedTech industry.
We have a deep understanding of the businesses where we are
involved, and we see how people benefit from the products and services
we help come to life. In addition to significant holdings in various quality
MedTech companies, we are also proud owners of companies in such
diverse areas as personal communication equipment and real estate
and financial services.
The William
Demant Invest
com
p
anies
Insights and highlights The WDI companies Corporate information Financial report
11 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Demant
12
William Demant Invest • Annual Report 2022
*Incl. William Demant Foundation
ownership
Revenue (DKK million)
19,705
Growth (reported)
10%
2021: DKK 17,905 million
EBITDA (DKK million)
4,383
EBITDA margin
22%
2021: DKK 4,730 million
Average # of employees
19,239
Growth
14%
2021: 16,866
Mkt. cap EoY (DKK million)
42,970
End of 2021
77,117
WDI ownership EoY
*
59%
End of 2021
58%
Insights and highlights The WDI companies Corporate information Financial report
Demant
12
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Demant
13 William Demant Invest • Annual Report 2022
About Demant A/S
Demant is a leading global hearing
healthcare company, which develops,
manufactures and sells hearing
healthcare products and services as well
as equipment for audio communications.
Focus areas are: Hearing Aids, Hearing
Care, Diagnostics and Communications.
Demant is listed on Nasdaq Copenhagen.
2022 at a glance
Sales in Demant increased by 10% to DKK
19,705 million. Growth in local currency
was 5% of which 4% was organic growth.
The revenue growth was primarily due to
a strong performance in Hearing
Healthcare in a hearing aid market which
grew less than expected in 2022. The
Communications business was negatively
impacted by a very weak gaming market
and delivered negative growth in 2022.
During the year, Demant decided to
discontinue its Hearing Implants business
and the business area has subsequently
been divested to Cochlear with closing
expected in Q2 2023.
Demant’s Hearing Healthcare business
grew 5% organically driven by strong
performances in Hearing Aids and
Diagnostics both of which continue to gain
market share in 2022. Despite a weaker-
than-expected hearing aid market, growth
was broadly based and positively
impacted by a strong portfolio of products
of services. In Hearing Care, organic
growth was negative due to strong
comparison figures in France and weaker-
than-expected performance in markets,
which are dominated by private pay, e.g.
in the US. Communications also saw
negative growth driven by high
comparative figures in the beginning of
the year, and a very weak market for
gaming headsets.
Demant’s markets have during 2022 been
negatively impacted by the current
macroeconomic uncertainty and low
consumer confidence and despite
improvements in the Covid-19 situation,
these dynamics may continue to
negatively impact the market for hearing
aids and audio solutions in the coming
year.
Earnings before interest, taxes,
depreciation and amortisation (EBITDA)
amounted to DKK 4,383 million, which is a
decrease of 7% from 2021 and
corresponds to an EBITDA margin of 22%.
Read more at www.demant.com
Key financial figures
DKK million
13,937
14,946
14,469
17,905
19,705
21%
21%
18%
26%
22%
0
5,000
10,000
15,000
20,000
2018 2019 2020 2021 2022
Revenue
EBITDA margin
Demant
Board of Directors
Niels B. Christiansen Chairman
Niels Jacobsen Deputy Chairman
Anja Madsen
Sisse F. Rasmussen
Kristian Villumsen
Thomas Duer Staff-elected
Casper Jensen Staff-elected
J
ørgen Møller Nielsen Staff-elected
Executive Management
Søren Nielsen President & CEO
René Schneider
Arne Boye Nielsen
Niels Wagner
CFO
President, Diagnostics
& Communications
President, Hearing
Care
Insights and highlights The WDI companies Corporate information Financial report
Demant
14
William Demant Invest • Annual Report 2022
Ö
ssur
Revenue (USD million)
719
Growth (reported)
0%
2021: USD 719 million
EBITDA (USD million)
114
EBITDA margin
16%
2021: USD 149 million
Average # of employees
3,866
Growth
5%
2021: 3,668
Mkt. cap EoY (DKK million)
14,122
End of 2021
17,862
WDI ownership EoY
52%
End of 2021
52%
Insights and highlights The WDI companies Corporate information Financial report
Össur
14
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Össur
15 William Demant Invest • Annual Report 2022
About Össur hf.
Össur is a global leader in non-invasive
orthopaedics, focused on delivering
innovative solutions in the prosthetics and
bracing and supports market. The
company was founded in 1971, is
headquartered in Iceland and has been
listed on the Icelandic Stock Exchange
from 1999 to 2017 and on Nasdaq
Copenhagen since 2009.
William Demant Invest started investing in
Össur in 2004 and has continually bought
up Össur shares. Today, William Demant
Invest is the majority shareholder, holding
around 52% of the share capital.
2022 at a glance
Össur realised total revenue of USD 719
million which was unchanged from 2021
in reported terms. In local currency,
revenue increased by 7%, of which organic
growth was 4%.
The Prosthetics business segment
increased organically by 4% compared to
2021 and accounts for 63% of total
revenue in 2022. Sales of bionic products
accounted for 21% of Prosthetics
component sales. Towards the end of the
year, this was especially driven by sale of
the Power Knee which is the first motor-
powered prosthetic knee. The Power Knee
was launched in the beginning of the year
and continues to see high demand going
into 2023. Sales in the Bracing & Supports
business segment increased organically by
3% compared to 2021 and accounted for
37% of total revenue.
Covid-19 continued to impact sales in the
first months of the year across all regions,
especially in Australia and China, with the
latter being highly impacted throughout
most of 2022.
In the second half of the year, Össur
acquired the US-based company, Naked
Prosthetics, a leading provider of
prostheses for finger and partial hand
amputees with the purpose of
strengthening its position within upper
limb prosthetics.
Earnings before interest, taxes, and
amortisation (EBITDA) amounted to USD
114 million in 2022, corresponding to an
EBITDA margin of 16%. Adjusted for special
items, the EBITDA margin was 18%.
Read more at www.ossur.com
Key financial figures
USD million
613
686
630
719 719
18%
21%
15%
21%
16%
0
200
400
600
800
2018 2019 2020 2021 2022
Revenue
EBITDA margin
Ö
ssur
Board of Directors
Niels Jacobsen Chairman
Svafa Grönfeldt Deputy Chairman
Arne Boye Nielsen
Dr. Alberto Esquenazi
Guðbjörg Edda Eggertsdóttir
Executive Management
Sveinn Sölvason President & CEO
Insights and highlights The WDI companies Corporate information Financial report
Össur
16 William Demant Invest • Annual Report 2022
Vision RT
Insights and highlights The WDI companies Corporate information Financial report
Vison RT
16 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Vison RT
17
William Demant Invest • Annual Report 2022
About Vision RT Ltd.
Vision RT is a UK-based pioneer and
leading manufacturer of surface-guided
radiation therapy (SGRT). The company,
which was founded in 2001, develops and
manufactures camera systems that
improve the efficiency, efficacy, and
patient comfort during radiation therapy.
William Demant Invest acquired approx.
89% of the shares in Vision RT in 2018 –
thus becoming the majority shareholder
alongside the company’s original
founders.
2022 at a glance
Despite geopolitical uncertainty and a
challenged macroeconomic environment,
Vision RT saw very strong organic growth
in 2022, driven by market share gains in
most mature markets and SGRT
increasingly being perceived as standard
of care in radiation therapy. The growth in
2022 is a continuation of strong
performance in 2021, where Vision RT,
among others, revitalised its market
position in the US market, which has also
been an important growth driver in 2022.
In 2022, Vision RT announced an
expansion of the global strategic
partnership with GenesisCare, one of the
largest providers of integrated cancer care
globally, with centres in the US, Europe,
and Australia. The agreement is a
testament to Vision RT’s market leading
position within SGRT and will help support
Vision RT’s global expansion and
integration of SGRT as standard of care in
radiation therapy. Albeit still in early
phase of commercial expansion, Vision RT
has seen encouraging growth in more
emerging SGRT markets such as China,
where penetration rates are still low. With
a local organisation in place in China,
Vision RT is well-positioned to grow this
very important market in the years to
come.
Since our investment in Vision RT in 2018,
we have from first-hand witnessed the
dedication and passion from the many
employees of Vision RT to support cancer
care patients in receiving the most
efficient procedures for radiation therapy.
With the most comprehensive and clinical-
proven product portfolio in the market,
Vision RT is set to continue to develop and
pioneer the market for SGRT and taking a
step closer to realise its mission of making
radiation therapy more effective for
cancer patients.
Read more at www.visionrt.com
Vison RT
Board of Directors
Niels Jacobsen Chairman
Søren Nielsen
Norman Smith
Gideon Hale
Executive Management
Norman Smith President & CEO
WDI ownership EoY
89%
End of 2022
89%
Insights and highlights The WDI companies Corporate information Financial report
Vison RT
18
William Demant Invest • Annual Report 2022
Vitrolife
Revenue (SEK million)
3,234
Growth (reported)
92%
2021: SEK 1,681 million
EBITDA (SEK million)
1,050
EBITDA margin
33%
2021: SEK 544 million
Average # of employees
1,117
Growth
134%
2021: 478
Mkt. cap EoY (SEK million)
25,220
End of 2021
75,850
WDI ownership EoY
29%
End of 2021
27%
18
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Vitrolife
Insights and highlights The WDI companies Corporate information Financial report
Vitrolife
19 William Demant Invest • Annual Report 2022
About Vitrolife AB
Vitrolife is an international medical device
Group specialising in production and
development of products for assisted
reproduction. The company was founded
in 1994 and was one of the first companies
to provide IVF laboratories with high quality
ready-to-use culture media. The company
is headquartered in Gothenburg, Sweden,
and is listed on Nasdaq Stockholm.
In 2014, William Demant Invest divested its
31% share in Unisense FertiliTech A/S to
Vitrolife in exchange for shares in the
company and has continually bought up
shares in Vitrolife. William Demant Invest
has since 2017 been the largest
shareholder in Vitrolife and today holds
around 29% of the shares.
2022 at a glance
Vitrolife increased total revenue by 92% to
SEK 3,234 million. In local currency, the
growth was 75%, of which 10% was
organic, while acquired growth from the
acquisition of Igenomix, which closed in the
end of 2021, was 65%.
The activity level within IVF treatment – the
main driver of demand for Vitrolife’s
products – was impacted by different
external factors during 2022. In Japan, a
newly introduced IVF reimbursement
system supported sales growth in that
region, while the zero-tolerance Covid-19
policy in China resulted in significant
headwind in that market. In addition, the
geopolitical situation and macroeconomic
uncertainty has given indications of
changed spending patterns for private-
paying IVF patients, especially in Australia
and Europe.
In 2022, the integration of Igenomix has
been a focus area and has progressed as
planned with several synergy-related
initiatives already implemented, including
merging of the sales organisations in
selected regions. Vitrolife ripens the fruits
of the combined product and service
offering which the company is now able to
offer the IVF clinics and chains that are
generally undergoing a continued
consolidation increasing the focus on
workflow and clinical efficiency.
Earnings before interest, taxes,
depreciation, and amortisation (EBITDA)
amounted to SEK 1,050 million,
corresponding to an EBITDA margin of 33%
which was unchanged from 2021.
Read more at www.vitrolife.com
Key financial figures
SEK million
1,151
1,480
1,246
1,681
3,234
42%
40%
36%
32%
33%
0
1,000
2,000
3,000
4,000
2018 2019 2020 2021 2022
Revenue
EBITDA margin
Vitrolife
Board of Directors
J
ón Sigurðsson Chairman
Henrik Blomquist
Lars Holmqvist
Pia Marions
Karen Lykke Sørensen
Vesa Koskinen
Executive Management
Thomas Axelsson CEO
Insights and highlights The WDI companies Corporate information Financial report
Vitrolife
20
William Demant Invest • Annual Report 2022
CellaVision
Revenue (SEK million)
639
Growth (reported)
13%
2021: SEK 566 million
EBITDA (SEK million)
198
EBITDA margin
31%
2021: SEK 196 million
Average # of employees
254
Growth
18%
2021: 215
Mkt. cap EoY (SEK million)
5,462
End of 2021
7,757
WDI ownership EoY
20%
End of 2021
20%
Insights and highlights The WDI companies Corporate information Financial report
CellaVision
20
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
CellaVision
21 William Demant Invest • Annual Report 2022
About CellaVision AB
CellaVision is a global leader of digital
solutions for medical microscopy in the
field of hematology. The company
develops analysers, software and
applications that make it easier, faster,
and more efficient to carry out blood cell
analysis, ranging from among others pre-
classification of white-blood cell types to
morphological characteristics of red-blood
cells. The company is headquartered in
Lund, Sweden, and has since 2011 been
listed on Nasdaq Stockholm.
William Demant Invest started investing in
CellaVision in 2017 and with an ownership
of 20%, William Demant Invest is the
largest shareholder in the company.
2022 at a glance
CellaVision increased total revenue by
13% to SEK 639 million. In local currency,
revenue increased by 4%, which accounts
only for organic growth.
The company had a good start to the year
driven by strong growth in more mature
markets such as the US and select
European countries. However, due to an
uncertain macroeconomic environment,
especially during the second half of the
year, demand dried somewhat out as
customers were more cautious to invest in
new capital equipment.
Furthermore, since the outbreak of Covid-
19, CellaVision has faced very challenging
market conditions in the APAC region,
namely in China. In 2022, sales declined
by almost 24%, which is also a main
explanation of the lower-than-expected
growth in 2022.
In 2022, CellaVision hosted their first
Capital Markets Day, which included a
strategy update. CellaVision continues to
pioneer and develop the market for digital
cell morphology, which is also going to be
a main growth driver in the years to come.
Also, as part of the strategy update,
CellaVision has identified new areas of
growth, i.e., within digital cell pathology,
where CellaVision can leverage their
current technology leadership and
commercial footprint.
Earnings before interest, taxes,
depreciation, and amortisation (EBITDA)
was SEK 198 million in 2022,
corresponding to an EBITDA margin of
31% which is a decrease of 4 percentage
points compared to 2021.
Read more at www.cellavision.com
Key financial figures
SEK million
365
462
471
566
639
32%
32%
30%
35%
31%
0
200
400
600
800
2018 2019 2020 2021 2022
Revenue
EBITDA margin
CellaVision
Board of Directors
Mikael Worning Chairman
Christer Fåhraeus
Ann-Charlotte Jarleryd
Åsa Hedin
Stefan Wolf
Kent Stråhlen Staff-elected
Markus J. Kristoffersson Staff-elected
Executive Management
Simon Østergaard CEO
Insights and highlights The WDI companies Corporate information Financial report
CellaVision
22
William Demant Invest • Annual Report 2022
Re
v
enio
Revenue (EUR million)
97
Growth (reported)
23%
2021: EUR 79 million
EBITDA (EUR million)
33
EBITDA margin
34%
2021: EUR 26 million
Average # of employees
194
Growth
16%
2021: 167
Mkt. cap EoY (EUR million)
1,030
End of 2021
1,482
WDI ownership EoY
16%
End of 2021
13%
Insights and highlights The WDI companies Corporate information Financial report
Revenio
22
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Revenio
23 William Demant Invest • Annual Report 2022
About Revenio Group Oyj
Revenio operates within ophthalmological
devices and software solutions for eye
care. The company develops tonometers
(intraocular pressure measurement
device), fundus imaging devices,
perimeters and clinical software solutions
under the iCare brand focusing on early-
stage detection of globally prevailing eye
diseases, including glaucoma, diabetic
retinopathy, age-related macular
degeneration (AMD) and cataract as well
as the monitoring of these diseases during
the treatment process. Revenio is
headquartered in Helsinki, Finland, and is
listed on Nasdaq OMX Helsinki.
William Demant Invest started investing in
Revenio in 2018 and is today the largest
shareholder with 16% ownership.
2022 at a glance
Revenio increased total revenue by 23% to
EUR 97 million. In local currency, the
growth was 16% and entirely organic.
North America is Revenio’s largest region
and accounted for 54% of total revenue
while Europe and the rest of the world
accounted for 18% and 28%, respectively.
In order to reinforce its presence in the
growing Chinese market, Revenio
established a sales office in China during
the fourth quarter.
Sales of retinal imaging devices were very
strong and demand for tonometers also
developed positively. The second
generation of Revenio’s device for
measuring intraocular pressure at home,
iCare HOME2, received positive feedback
from customers and grew in demand.
In the first half of the year, Revenio
launched a screening solution using
artificial intelligence, iCare ILLUME. This
solution detects signs of vision-
threatening diabetic retinopathy using AI-
technology to analyse retinal images
captured with the iCare DRSplus fundus
imaging system. The initial feedback from
the market has been excellent and the
first commercial deliveries happened at
the end of the year.
Earnings before interest, taxes,
depreciation, and amortisation (EBITDA)
was EUR 33 million corresponding to an
EBITDA margin of 34% which was
unchanged from 2021 when adjusting for
one-off costs related to the Oculo
acquisition in the comparison period.
Read more at www.reveniogroup.com
Key financial figures
EUR million
31
49
61
79
97
35%
30%
36%
33%
34%
0
20
40
60
80
100
2018 2019 2020 2021 2022
Revenue
EBITDA margin
Revenio
Board of Directors
Arne Boye Nielsen Chairman
Bill Östman Deputy
Chairman
Ann-Christine Sundell
Pekka Tammela
Riad Sherif
Executive Management
J
ouni Toijala CEO
Insights and highlights The WDI companies Corporate information Financial report
Revenio
24
William Demant Invest • Annual Report 2022
INVISIO
Revenue (SEK million)
776
Growth (reported)
31%
2021: SEK 593 million
EBITDA (SEK million)
113
EBITDA margin
15%
2021: SEK 70 million
Average # of employees
208
Growth
11%
2021: 187
Mkt. cap EoY (SEK million)
7,415
End of 2021
7,296
WDI ownership EoY
17%
End of 2021
8%
Insights and highlights The WDI companies Corporate information Financial report
INVISIO
24
William Demant Invest • Annual Report 2022
*Incl. William Demant Foundation
ownership
Insights and highlights The WDI companies Corporate information Financial report
INVISIO
25 William Demant Invest • Annual Report 2022
About INVISIO
INVISIO is a Danish-based company
operating within advanced
communication systems that help
professionals in noisy and mission-critical
environments to work more safely and
effectively while protecting their hearing.
The company offers personal
communication equipment and hearing
protection as well as an intercom system
for primarily defence and security
customers. The product portfolio includes
headsets, control units and cables. The
intercom system enables users of
personal equipment to communicate
within a group, e.g. in a vehicle, as well as
with individuals in the field while being on
the move. INVISIO is listed on Nasdaq
OMX Stockholm and headquartered in
Copenhagen, Denmark.
William Demant Invest started investing in
INVISIO in 2020 and today owns approx.
17% of the company (including the
ownership of William Demant
Foundation).
2022 at a glance
INVISIO increased its total revenue to SEK
776 million which corresponds to an
increase of 31%. In local currency, growth
was 23% which was highly driven by
strong performance in the second half of
the year.
In terms of revenue, the first half of the
year was slightly weak, although the order
intake was very high and subsequently
materialised into high revenue growth in
the second half of the year. This is a result
of the significant investments in the sales
and R&D organisation over the previous
years as well as the realisation of pent-up
demand from Covid-19 and the generally
increased defence budgets throughout
many European countries following the
invasion of Ukraine which is now starting
to slowly materialise.
INVISIO and Racal Acoustics launched
their first joint product solution, the
RA5100 Tactical Communications Headset
for extremely noisy environments - a
product area that has seen a significant
step-up in demand during the year due to
an increased activity level in the market
for military vehicles.
Earnings before interest, taxes,
depreciation, and amortisation (EBITDA)
amounted to SEK 113 million,
corresponding to an EBITDA margin of
15% and an increase of 61%.
Read more at www.invisio.com
Key financial figures
SEK million
355
514
532
593
776
19%
28%
20%
12%
15%
0
200
400
600
800
2018 2019 2020 2021 2022
Revenue
EBITDA margin
INVISIO
Board of Directors
Annika Andersson Chairman
Ulrika Hagdahl
Martin Krupicka
Charlott Samuelsson
Hannu Saastamoinen
Executive Management
Lars Højgård Hansen CEO
Insights and highlights The WDI companies Corporate information Financial report
INVISIO
26
William Demant Invest • Annual Report 2022
J
eudan
Revenue (DKK million)
2,001
Growth (reported)
10%
2021: DKK 1,814 million
EVBAT (DKK million)
815
EVBAT margin
41%
2021: DKK 768 million
Average # of employees
637
Growth
7%
2021: 598
Mkt. cap EoY (DKK million)
13,304
End of 2021
15,244
WDI ownership EoY
42%
End of 2021
42%
Insights and highlights The WDI companies Corporate information Financial report
J
eudan
26
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
J
eudan
27
William Demant Invest • Annual Report 2022
About Jeudan A/S
Jeudan is Denmark’s largest publicly listed
real estate and service company. Jeudan’s
activities consist of investment in and
operation of commercial and residential
properties, mainly in Copenhagen.
William Demant Invest started investing in
Jeudan in 2004 and today holds around
42% of the shares.
2022 at a glance
In a year of vastly changing
macroeconomic dynamics, most
pronounced higher inflation and interest
rates which typically have negative
implications for the broader real estate
market, Jeudan managed to end 2022 on
solid footing growing the revenue to the
tune of 10% to DKK 2 billion due to good
growth in the service business as well as
the property business.
The occupancy rate stood at 97.7% by year
end, which is almost in line with last year’s
record high of 98.6% and continues to
underpin that Jeudan has a very attractive
portfolio of commercial and residential
properties and not least a solid and robust
business model, which appeals to existing
and prospective customers due to
favourable and flexible terms and the
breath of service offerings.
During the year, Jeudan received the price
“Årets Velkomst” by Estate Media for the
collaboration with Nordic Female Founders
on the creation of Female Founders House,
an innovate environment for (female)
entrepreneurship located in Bredgade 45.
Also in 2022, Jeudan was awarded “Årets
Cykelinitiativpris” by the Danish Transport
Federation (DI transport) and the Danish
Cyclists’ Federation (Cyklistforbundet) as an
acknowledgement of Jeudan’s contribution
to the replacement of cars with bikes as
means of transportation. Today, 54% of
Jeudan’s car fleet consists of electric
vehicles and the ambition is to reach a
target of 90% by the end of 2025.
Earnings after interest expense, but before
value adjustments and tax (EBVAT) arrived
at DKK 815 million, up 6% compared to last
year, while net result increased by DKK
1,007 million to DKK 3,359 million, mainly
due to positive value adjustments of
Jeudan’s interest bearing debt.
During 2022, Jeudan invested in four
properties amounting to around DKK 2.4
billion, leaving the full portfolio of 200
properties with a book value of more than
DKK 34 billion by year end.
Read more at www.jeudan.dk
Key financial figures
DKK million
1,583
1,566
1,534
1,814
2,001
41%
47%
48%
42%
41%
0
500
1,000
1,500
2,000
2,500
2018 2019 2020 2021 2022
Revenue
EBVAT margin
J
eudan
Board of Directors
Niels Jacobsen Chairman
Tom Knutzen Deputy Chairman
Claus Gregersen
Helle Okholm
Nicklas Hansen
Executive Management
Per Wetke Hallgren, CEO
Søren B. Andersson CFO
Insights and highlights The WDI companies Corporate information Financial report
Board of Directors
28 William Demant Invest • Annual Report 2022
Corporate
information
Competent management
Respect and trust are keywords in William Demant Invest.
We respect the original values and legacy of the companies we invest in.
And we respect the unique competencies, knowledge and experience
they have built up over the years.
Equally important our collaboration must be founded on trust where we
bring our experience to the table to help a company reach its full
potential.
Insights and highlights The WDI companies Corporate information Financial report
28 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Board of Directors
29
William Demant Invest • Annual Report 2022
Niels B. Christiansen
Board member
Born 1966
J
oined the Board in 2019
(up for election in 2023)
Considered independent: Yes
Other directorships: LEGO A/S
(President & CEO), Demant A/S (chairman),
Tetra Laval S.A. (board member), William
Demant Foundation (deputy chairman)
Education: Master of Science in
Engineering from the Technical University
of Denmark (DTU), MBA from INSEAD
(France)
Competences: Special qualifications
within international business management
of major, global, industrial hi-tech
corporations, including extensive board
experience from listed companies as well
as comprehensive insight into industrial
policy
Total fee in William Demant
Foundation and William Demant
Invest A/S in 2022: DKK 475,000
Lars Nørby Johansen
Chairman
Born 1949
J
oined the Board in 2017
(up for election in 2023)
Considered independent: Yes
Other directorships: Dansk Vækstkapital
I (chairman), Copenhagen Airports A/S
(chairman), Montana Møbler A/S
(chairman), Arp-Hansen Hotel Group A/S
(deputy chairman), Kadeau ApS (board
member), William Demant Foundation
(chairman)
Education: Master of Social Sciences from
the University of Odense
Competences: Extensive international
experience as a corporate executive,
including vast board experience from listed
companies, and profound knowledge of
the challenges resulting from globalisation
and not least industrial policy
Total fee in William Demant
Foundation and William Demant
Invest A/S in 2022: DKK 1,200,000
J
esper Brandgaard
Deputy chairman
Born 1963
J
oined the Board in 2019
(up for election in 2023)
Considered independent: Yes
Other directorships: LEO Pharma A/S
(chairman), Chr. Hansen Holding A/S
(deputy chairman), Vækst Partner Kapital
(member of advisory board), William
Demant Foundation (board member)
Education: Master of Science in Econo-
mics and Auditing and an MBA from CBS
Competences: Special qualifications
within the area of group management in a
multinational pharmaceutical company,
including responsibility for strategy
development and implementation,
information technology, as well as financial
and accounting experience
Total fee in William Demant
Foundation and William Demant
Invest A/S in 2022: DKK 525,000
Board of Directors
Insights and highlights The WDI companies Corporate information Financial report
Board of Directors
30
William Demant Invest • Annual Report 2022
Anna Cecilia Frellsen
Board member
Born 1973
J
oined the Board in 2020
(up for election in 2023)
Considered independent: Yes
Other directorships: Maternity
Foundation (CEO), Center for Ledelse
(board member), Ovacure (board
member), William Demant Foundation
(board member)
Education: Bachelor of Science in
Business Administration from CBS, MBA
from IESE (Barcelona, Spain)
Competences: Special qualifications
within global health, growth strategy,
digital health and philanthropy
Total fee in William Demant
Foundation and William Demant
Invest A/S in 2022: DKK 400,000
Tine Roed
Board member
Born 1964
J
oined the Board in 2021
(up for election in 2023)
Considered independent: Yes
Other directorships: CBS Board
Leadership Education (CEO), Nykredit
Alternatives Core AIF-SIKAV (chairman),
Multimanager Invest (chairman), Nykredit
Alpha (chairman), Investeringsforeningen
Sparinvest (board member), InvestIn
SICAV-RAIF (board member), Investin
(board member), Nykredit Invest, Nykredit
Almen Bolig and Private Banking Elite
(board member), Nykredit Alpha SICAV-
RAIF (board member), William Demant
Foundation (board member)
Education: Master of Law from the
University of Copenhagen
Competences: Special qualifications
within regulation of companies and funds
as well as deep insight into politics and
social as well as economic conditions.
Furthermore, strong skills and experience
in strategic management and
communication
Total fee in William Demant
Foundation and William Demant
Invest A/S in 2022: DKK 400,000
Board of Directors
Insights and highlights The WDI companies Corporate information Financial report
Management
31
William Demant Invest • Annual Report 2022
Niels Jacobsen
CEO
Born 1957
Education
Niels Jacobsen holds a Master of Science
degree in Economics from Aarhus
University
Group-related directorships
Demant A/S, deputy chairman
Össur hf., chairman
Vision RT Ltd., chairman
J
eudan A/S, chairman
Other directorships
Nissens A/S, board member
Thomas B. Thrige Foundation, chairman
ABOUT YOU Holding GmbH, deputy
chairman
ATP Langsigtet Dansk Kapital, member of
advisory board
Central Board of the Confederation of
Danish Industry, member
Management
Nicklas Hansen
Investment Director
Born 1986
Education
Nicklas Hansen holds a Master of Science
degree in Finance and Accounting from
Copenhagen Business School
Group-related directorships
J
eudan A/S, board member
Vision RT Ltd., board observer
INVISIO AB, board observer
Insights and highlights The WDI companies Corporate information Financial report
Group approach to ESG
32
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
ESG investment policy
33 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Investment case: ESG in
Demant
34
William Demant Invest • Annual Report 2022
2050
Insights and highlights The WDI companies Corporate information Financial report
Investment case: ESG in
Demant
35 William Demant Invest • Annual Report 2022
Financial re
p
ort
Cash flow-positive
We invest in strong, cash flow-positive, quality companies that
hold leading positions in their industry niche.
We look for companies with products and a business model
already proven and accepted in the market.
Insights and highlights The WDI companies Corporate information Financial report
35 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Investment case: ESG in
Demant
36
William Demant Invest • Annual Report 2022
Financial review
Revenue (DKK million)
25,468
Growth
10%
2021: DKK 23,160 million
EBITDA (DKK million)
6,924
EBITDA margin
27%
2021: DKK 7,008 million
Average # of employees
23,383
Growth
12%
2021: 20,893
Insights and highlights The WDI companies Corporate information Financial report
Financial review
36
William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Financial review
37 William Demant Invest • Annual Report 2022
The consolidated income statement and
balance sheet of William Demant Invest
comprise three subsidiaries – Demant,
Össur, Vision RT and the parent company
William Demant Invest.
Income statement
William Demant Invest’s consolidated
revenue amounted to DKK 25,468 million
in 2022 compared to DKK 23,160 million in
2021. Earnings before interest, taxes,
depreciation and amortisation (EBITDA)
amounted to DKK 6,924 million compared
to DKK 7,008 million in 2021. Operating
profit (EBIT) was DKK 5,342 million
compared to DKK 5,052 million in 2021,
whereas profit before tax was DKK 4,652
million compared to DKK 4,677 million in
2021.
In 2022, William Demant Invest’s share of
the aggregate net result was DKK 2,479
million. Profit for the year is deemed
satisfactory.
Equity and capital structure
Total assets amounted to DKK 61,545
million at 31 December 2022 compared to
DKK 52,207 million in 2021. Consolidated
equity in 2022 amounted to DKK 27,858
million compared to DKK 25,734 million in
2021. No dividends have been paid out to
William Demant Foundation in 2022 as was
the same in 2021.
Cash flows
Cash flow from operating activities
amounted to DKK 3,107 million in 2022
compared to DKK 4,691 million in 2021,
whereas cash flow from investing
activities amounted to an outflow of DKK
6,569 million in 2022 compared to an
outflow of DKK 4,437 million in 2021.
Finally, cash flow from financing activities
amounted to DKK 3,558 million in 2022
compared to DKK 271 million in 2021.
Tax
William Demant Invest is the
administration company for the joint
taxation of Demant and other Danish
subsidiaries. Total corporate tax expensed
in 2022 amounted to DKK 692 million
compared to DKK 850 million in 2021. Tax
in associated companies is paid in the
respective companies.
Knowledge resources
William Demant Invest has 11 employees
but does to a great extent rely on the
development and retention of knowledge
resources in subsidiaries and associated
companies. Further elaboration of
knowledge resources can be found in
subsidiaries and associated companies’
annual reports and webpages.
Risks
William Demant Invest’s risks primarily
relate to developments in our subsidiaries
and associated companies, global health-
care and Danish commercial occupancy
rates and the financial markets. For a
further review of financial risks, please
refer to note 4.1. Further elaboration on
business-related risks can be found in
subsidiaries’ and associates’ annual
reports and webpages.
Research and development activities
William Demant Invest’s research and
development activities are placed in
subsidiaries and associated companies.
Further elaboration on research and
development activities can be found in
subsidiaries’ and associates’ annual
reports and webpages.
Financial review
Insights and highlights The WDI companies Corporate information Financial report
Key figures and financial
ratios
38 William Demant Invest • Annual Report 2022
Key figures and financial ratios
DKK million
2022 2021 2020 2019 2018
Income statement
Revenue 25,468 23,160 19,307 20,272 18,410
Gross profit 18,385 16,522 13,206 14,793 13,626
R&D costs
-1,652 -1,434 -1,519 -1,385 -1,233
Share of profit after tax, associates and joint ventures
1,665 1,196 748 568 3,549
EBITDA
6,924 7,008 3,680 4,746 7,286
Amortisation and depreciation etc.
1,582 1,956 1,645 1,389 730
Operating profit (EBIT)
5,342 5,052 2,035 3,357 6,556
Net financial items
-690 -375 146 18 -242
Profit before tax
4,652 4,677 2,181 3,375 6,314
Profit after tax - continuing operations
3,960 3,827 1,951 2,841 5,688
Profit after tax - discontinued operations
-192 -183 - - -
Profit for the year
3,768 3,644 1,951 2,841 5,688
Balance sheet
Net interest-bearing debt 22,495 16,152 14,050 14,474 10,604
Assets 61,545 52,207 44,683 43,470 36,560
Equity
27,858 25,734 21,816 20,825 19,052
Other key figures
Investment in property, plant and equipment, net 755 669 587 714 569
Cash flow from operating activities (CFFO) 3,107 4,691 3,388 3,025 2,353
Free cash flow
1,921 3,765 2,589 1,980 1,629
Average number of full time employees
23,383 20,800 19,924 19,052 17,221
Financial ratios
Gross profit margin
72.2% 71.3% 68.4% 73.0% 74.0%
EBITDA margin 27.2% 30.3% 19.1% 23.4% 39.6%
Profit margin (EBIT margin)
21.0% 21.8% 10.5% 16.6% 35.6%
Return on equity
10.6% 11.9% 8.0% 12.3% 35.5%
Equity ratio
45.3% 49.3% 48.8% 47.9% 51.9%
We refer to section 9.1 for a description of the accounting policies for key figures and financial ratios.
Insights and highlights The WDI companies Corporate information Financial report
Management statement
39 William Demant Invest • Annual Report 2022
Executive Board Board of Directors
Insights and highlights The WDI companies Corporate information Financial report
Independent auditor’s
report
40 William Demant Invest • Annual Report 2022
Independent auditor’s report
Insights and highlights The WDI companies Corporate information Financial report
Independent auditor’s
report
41 William Demant Invest • Annual Report 2022
CVR No 33 771231
Insights and highlights The WDI companies Corporate information Financial report
Consolidated income
statement
42 William Demant Invest • Annual Report 2022
Consolidated income statement
(DKK million)
Note 2022 2021
Revenue
1.1
Production costs
1.2 / 1.3 / 1.5 / 8.3
-7,083 -6,638
Gross profit 18,385 16,522
R&D costs
1.2 / 1.3 / 8.3
-1,652 -1,434
Distribution costs
1.2 / 1.3 / 8.3
-11,217 -9,682
Administrative expenses
1.2 / 1.3 / 8.2 / 8.3
-1,839 -1,649
Share of profit after tax, associates and joint ventures
3.4
Other operating income
6.2
Operating profit (EBIT) 5,342 5,052
Financial income
4.2
Financial expenses
4.2
-835 -431
Profit before ta
x
Tax on profit for the year
5.1
-692 -850
Profit after tax - continuing operations 3,960 3,827
Profit after tax - discontinued operations
6.3
-192 -183
Profit for the year 3,768 3,644
Profit for the year attributable to:
William Demant Invest A/S' shareholder
Non-controlling interests
Insights and highlights The WDI companies Corporate information Financial report
Consolidated statement
of comprehensive
income
43 William Demant Invest • Annual Report 2022
Consolidated statement of comprehensive income
(DKK million)
2022 2021
Profit for the year
Foreign currency translation adjustment, subsidiaries
-45 675
Other comprehensive income adjustments and associates
-251 531
Value adjustment of hedging instruments:
Value adjustment for the year
-48 -178
Value adjustment transferred to revenue
Tax on items that have been or may subsequently be reclassified to the income statement
-32 29
Items that have been or may subsequently be reclassified to the income statement
-174 1,093
Actuarial gains/losses on defined benefit plans 105 62
Tax on items that will not subsequently be reclassified to the income statement
-27 -12
Items that will not subsequently be reclassified to the income statement
Other comprehensive income -96 1,143
Comprehensive income 3,672 4,787
Comprehensive income attributable to:
William Demant Invest A/S' shareholder
Non-controlling interests
Breakdown of tax on other comprehensive income:
Foreign currency translation adjustment, foreign enterprises
Value adjustment of hedging instruments for the year
Value adjustment of hedging instruments transferred to revenue
-44 -8
Actuarial gains/losses on defined benefit plans
-27 -12
Tax on other comprehensive income
-59 17
Insights and highlights The WDI companies Corporate information Financial report
Consolidated balance
sheet at 31 December
44 William Demant Invest • Annual Report 2022
Consolidated balance sheet at 31 December
(DKK million)
Note 2022 2021
Assets
Intangible assets
3.1
Property, plant and equipment
3.2
Lease assets
3.3
Investments in associates and joint ventures
3.4
Receivables from associates and joint ventures
3.4 / 4.3 / 4.4
Other investments
3.4 / 4.3 / 4.5
Customer loans
1.7 / 3.4
Other receivables
3.4 / 4.3 / 4.4
Deferred tax assets
5.2
Other non-current assets 22,060 17,072
Non-current assets 48,615 41,772
Inventories
1.5
Trade receivables
1.6 / 4.3
Receivables from associates and joint ventures
4.3
Income tax 206 105
Customer loans
1.7
Other receivables
4.3 / 4.4
Unrealised gains on financial contracts
2.3 / 4.3 / 4.4 / 4.5
Prepaid expenses
Cash
4.3 / 4.4
Assets held for sale
6.3
Current assets 12,930 10,435
Assets 61,545 52,207
(DKK million)
Note 2022 2021
Equity and liabilities
Share capital
Other reserves
Equity attributable to William Demant Invest
A/S' shareholder
Equity attributable to non-controlling interests 4,659 4,382
Equit
y
Borrowings
4.3 / 4.4
Lease liabilities
3.3
Deferred tax liabilities
5.2
Provisions
7.1
Other liabilities
4.3 / 7.2
Deferred income
7.3
Non-current liabilities 15,239 9,261
Borrowings
4.3 / 4.4
Lease liabilities
3.3
Trade payables
4.3
Income tax
Provisions
7.1
Other liabilities
4.3 / 7.2
Unrealised losses on financial contracts
2.3 / 4.3 / 4.4 / 4.5
Deferred income
7.3
Liabilities related to assets held for sale
6.3
Current liabilities 18,448 17,212
Liabilities 33,687 26,473
Equity and liabilities 61,545 52,207
Insights and highlights The WDI companies Corporate information Financial report
Consolidated cash flow
statement
45 William Demant Invest • Annual Report 2022
Acquisitions of enterprises, participating
interest and activities include loans of DKK
0 million (DKK 63 million in 2021) classified
as other non-current assets, which have
been settled as part of acquisitions
without cash payments.
Consolidated cash flow statement
(DKK million)
Note 2022 2021
Repayments of borrowings
4.4
-3,194 -2,529
Proceeds from borrowings
4.4
Change in short-term bank facilities
4.4
-250 2,070
Repayments of lease liabilities
3.3/4.4
-773 -664
Dividends paid
Transactions with non-controlling interests -1,548 -924
Cash flow from financing activities (CFFF) 3,558 271
Cash flow for the year, net - continuing operations 96 525
Cash flow for the year, net - discontinued operations
6.3
-253 -314
Cash flow for the year, net -157 211
Cash and cash equivalents at the beginning of the year 1,940 1,698
Foreign currency translation adjustment of cash and
cash equivalents
-37 31
Cash and cash equivalents at the end of the year 1,746 1,940
Breakdown of cash and cash equivalents at the
end of the year:
Cash
4.3/4.4
Cash and cash equivalents at the end of the year 1,746 1,940
(DKK million)
Note 2022 2021
Operating profit (EBIT)
Non-cash items etc.
1.8
-62 684
Change in receivables etc. -696 -501
Change in inventories
-762 -437
Change in trade payables and other liabilities etc.
Change in provisions 85 94
Dividends received
Cash flow from operating profit 4,244 5,640
Financial income etc. received 75 45
Financial expenses etc. paid -576 -405
Income tax paid
-636 -589
Cash flow from operating activities (CFFO) 3,107 4,691
Acquisition of enterprises, participating interests and
activities
6.1/3.4
-6,295 -3,672
Divestment of enterprises, participating interests and
activities
6.2
Investments in intangible assets
-343 -222
Investments in property, plant and equipment -771 -684
Disposal of property, plant and equipment
Investments in other non-current assets
-347 -425
Disposal of other non-current assets 259 390
Cash flow from investing activities (CFFI) -6,569 -4,437
Insights and highlights The WDI companies Corporate information Financial report
Consolidated statement
of changes in equity
46 William Demant Invest • Annual Report 2022
Consolidated statement of changes in equity
(DKK million) Other reserves
Share capital
Foreign currency
translation reserve Hedging reserve Retained earnings
William Demant
Invest A/S’
shareholder's share
Non-controlling
interests’ share Equity
Equity at 1.1.2022 4 196 -28 21,180 21,352 4,382 25,734
Comprehensive income in 2022:
Profit for the year
Other comprehensive income:
Foreign currency translation adjustment, subsidiaries
Other comprehensive income adjustments and
associates
Value adjustment of hedging instruments:
Value adjustment, year
Value adjustment transferred to revenue
Actuarial gains/losses on defined benefit plans
Tax on other comprehensive income
Other comprehensive income
Comprehensive income for the year - -102 67 2,521 2,486 1,186 3,672
Transactions with non-controlling interests - - - -687 -687 -945 -1,632
Other changes in equity
Equity at 31.12.2022
Insights and highlights The WDI companies Corporate information Financial report
Consolidated statement
of changes in equity –
continued
47 William Demant Invest • Annual Report 2022
Consolidated statement of changes in equity – continued
(DKK million) Other reserves
Share capital
Foreign currency
translation reserve Hedging reserve Retained earnings
William Demant
Invest A/S’
shareholder's
share
Non-controlling
interests’ share Equity
Equity at 1.1.2021 4 -266 31 17,745 17,514 4,302 21,816
Comprehensive income in 2021:
Profit for the year - - - 2,320 2,320 1,324 3,644
Other comprehensive income:
Foreign currency translation adjustment, subsidiaries - 464 - - 464 211 675
Other comprehensive income adjustments and
associates - - - 531 531 - 531
Value adjustment of hedging instruments:
Value adjustment, year - - -97 - -97 -81 -178
Value adjustment transferred to revenue - - 20 - 20 16 36
Actuarial gains/losses on defined benefit plans - - - 34 34 28 62
Tax on other comprehensive income - -2 18 -7 9 8 17
Other comprehensive income - 462 -59 558 961 182 1,143
Comprehensive income for the year - 462 -59 2,878 3,281 1,506 4,787
Transactions with non-controlling interests - - - 553 553 -1,430 -877
Other changes in equity - - - 4 4 4 8
Equity at 31.12.2021 4 196 -28 21,180 21,352 4,382 25,734
Insights and highlights The WDI companies Corporate information Financial report
Notes to consolidated
financial statements
48 William Demant Invest • Annual Report 2022
Section 1 – page 49
Operating activities and cash
flow
1.1 Revenue
1.2 Employees
1.3 Amortisation, depreciation and
impairment losses
1.4 Proposed dividend
1.5 Inventories
1.6 Trade receivables
1.7 Customer loans
1.8 Specification of non-cash items etc.
Section 2 – page 58
Exchange rates and hedging
2.1 Exchange rate risk policy
2.2 Sensitivity analysis in respect of
exchange rates
2.3 Hedging and forward exchange
contracts
Section 3 – page 61
Assets base
3.1 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Other non-current assets
3.5 Impairment testing
Capital structure and financial
management
4.1 Financial risk management and
capital structure
4.2 Net financial items
4.3 Categories of financial instruments
4.4 Net interest-bearing debt, liquidity
and interest rate risks
4.5 Fair value hierarchy
Section 5 – page 81
Tax
5.1 Tax on profit
5.2 Deferred tax
Section 6 – page 85
Acquisitions and divestments
6.1 Acquisition of enterprises and
activities
6.2 Divestment of enterprises and
activities
6.3 Discontinued operations and assets
held for sale
Section 7 – page 92
Provisions, other liabilities etc.
7.1 Provisions
7.2 Other liabilities
7.3 Deferred income
7.4 Contingent liabilities
Section 8 – page 98
Other disclosure requirements
8.1 Related parties
8.2 Fees to parent's auditors appointed
at the annual general meeting
8.3 Government grants
8.4 Events after the balance sheet date
Section 9 – page 101
Basis for preparation
9.1 Group accounting policies
9.2 Accounting estimates and
judgements
Section 10 – page 110
Notes to parent financial
statements
10.1 Employees
10.2 Fees to parent's auditors appointed
at the annual general meeting
10.3 Net financial items
10.4 Financial assets
10.5 Debt to William Demant Foundation
10.6 Contingent liabilities
10.7 Proposed distribution of net profit
10.8 Related parties
10.9 Shareholder
10.10 Events after the balance sheet date
10.11 Parent accounting policies
Section 11 – page 115
Subsidiaries, associates and
joint operations
Subsidiaries, associates and joint
operations in William Demant Invest A/S
Subsidiaries in Vision RT Ltd.
Subsidiaries in Össur hf.
Subsidiaries, associates and joint
ventures in Demant Group
Notes to consolidated financial statements
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
49 William Demant Invest • Annual Report 2022
Section 1
Operating activities
and cash flow
Insights and highlights The WDI companies Corporate information Financial report
49 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
50 William Demant Invest • Annual Report 2022
Consolidated revenue derives from the
sale of goods and services and is broken
down by the customers’ geographic
region.
Revenue generated in Denmark is DKK
348 million (DKK 340 million in 2021). For
the Group, the ten largest customers
account for approx. 10% of total
consolidated revenue.
Value adjustments transferred from
equity relating to derivatives made for
hedging foreign exchange risks on
revenue amount to DKK -202 million (DKK
-36 million in 2021).
1.1 Revenue
(DKK million)
Revenue by geographic region
2022 2021
Europe
10,502 10,167
North America
10,826 9,417
Asia
2,103 1,747
Pacific region
1,317 1,324
Other regions
720 505
Revenue 25,468 23,160
(DKK million)
Revenue by business area
2022 2021
Hearing Care
8,123 7,553
Hearing Aids
8,231 7,346
Prosthetics, Bracing & supports
5,090 4,524
Diagnostics
2,291 1,823
Communications
1,060 1,183
Other
673 731
Revenue
25,468 23,160
(DKK million)
Liabilities related to contracts with customers
2022 2021
Customer prepayments*
178 172
Future performance obligations*
1,010 915
Expected volume discounts and other customer-related items**
406 357
Expected product returns***
172 162
Transferred to liabilities related to assets held for sale
-4 -
Contract liabilities with customers 1,762 1,606
*Included in deferred income.
**Included in other cost payables under Other liabilities.
***Included in product-related liabilities under Other liabilities
(DKK million)
Changes in contract liabilities with customers
2022 2021
Contract liabilities at 1.1.
1,606 1,408
Foreign currency translation adjustment
20 56
Revenue recognised and included in the contract liability balance
at 1.1. -615 -593
Increases due to cash received, excluding amounts recognised as
revenue during the year
693 597
Changes from expected volume discounts and other customer
related items 44 86
Changes from product returns
6 41
Additions from acquisitions
12 11
Transferred to liabilities related to assets held for sale
-4 -
Contract liabilities at 31.12.
1,762 1,606
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
51 William Demant Invest • Annual Report 2022
Nature of goods and services
Control is normally transferred to the
customer when the goods are shipped to
the customer, though delivery terms can
vary, and control may be transferred at a
later point. When selling our products to
customers, we transfer control and
recognise revenue when the product is
delivered to the customer at a given point
in time. For hearing aids, the revenue is
recognised when it is initially fitted to the
user’s specific hearing loss. In some
countries, the users are granted a trial
period. In such cases, the transfer of
control occurs when the trial period
expires.
In some countries, customers are given
the right to return our products for a
certain period. In such cases, the expected
returns are estimated based on an
analysis of historical experience adjusted
for any known factors impacting
expectations for future return rates.
Revenue and cost of goods sold are
adjusted accordingly, and contract
liabilities (refund liabilities) and rights to
the returned goods (included in prepaid
expenses) are recognised for the expected
returns.
Our activities also involve delivery of
various services, such as extended
warranties, warranty-related coverages
(loss and damage) and after-sales services
(e.g. fine-tuning of products, additional
test, cleaning and service checks).
Revenue from these services is recognised
on a straight-line basis over the warranty
or service period as the users makes use
of the services continuously. Some users
purchase a battery package or are
provided with batteries free of charge as
part of the purchase of some products,
entitling them to free batteries for a
certain period. Revenue is recognised
when the customer receives the batteries
or is provided with batteries free of charge
as part of the purchase of product. When
available, we use an observable price to
determine the stand-alone selling price for
the separate performance obligations
related to these services, and in countries
where observable prices are not available,
we use a cost-plus-margin method.
The standard warranty period for our
products varies between countries but is
typically 12 and 24 months and for certain
products or countries up to 48 months.
The extended warranty covers periods
beyond the standard warranty period or
standard warranty terms. Payment terms
vary significantly across countries and
depend on whether the customer is a
private or public customer.
The majority of our products sold to end-
users are invoiced and paid for after the
initial accept, but some customers choose
to have the products financed by us. The
transaction price of such arrangements is
adjusted for any significant financing
benefit, and the financing component is
recognised as financial income.
Accounting policies
Revenue is recognised when obligations
under the terms of the contract with the
customer are satisfied, which usually
occurs with the transfer of control of our
products and services. Revenue is
measured as the consideration we expect
to receive in exchange for transferring
goods and providing services net of the
estimated discounts or other customer-
related reductions.
Accounting estimates and judgements
Discounts, returns etc. (estimate)
Discounts, loyalty programmes and other
revenue reductions are estimated and
accrued when the related revenue is
recognised. To make such estimates is a
matter of judgement, as all conditions are
not known at the time of sale, e.g. the
number of units sold to a given customer
or the expected utilization of loyalty
programmes. Sales discounts, rebates and
loyalty programmes are adjusted, as we
gain better information on the likelihood
that they will be realised and the value at
which they are expected to be realised.
Sales discounts and rebates are
recognised under other cost payables in
other liabilities, and loyalty programmes
are recognised in deferred income.
Depending on local legislation and the
conditions to which a sale is subject, some
customers have the option to return
purchased goods for a refund. Based on
historical return rates, an estimate is
made of the expected returns and a
provision is recognised. This provision is
updated, as returns are recognised or
when we collect more accurate data on
return rates.
After-sales services (estimate)
After-sales services are provided to end-
users of our products and are based on
estimates as not all end-users make use of
these services. The estimate is a matter of
judgement and is based on the number of
visits, the duration of the visits of an
average user’s visit and the expected
number of end-users that make use of the
after-sales services.
1.1 Revenue – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
52 William Demant Invest • Annual Report 2022
Remuneration of the Executive Board
The total remuneration of the Executive
Board comprises:
• Wages and salaries consisting of base
salary.
• A short-term incentive programme
including a bonus scheme based on the
development in the fair value of the net
assets within William Demant Invest A/S
and William Demant Foundation.
Remuneration of the Board of
Directors
The remuneration of the Board of
Directors comprises a fixed fee and is not
incentive based.
In 2022, the basic remuneration of a
member of the Parent’s Board of Directors
was DKK 250,000 (DKK 250,000 in 2021).
The Chair of the Board of Directors
receives three times the basic
remuneration and the Deputy Chair one
and a half time the basic remuneration.
Accounting policies
Employee costs comprise wages, salaries,
social security contributions, annual and
sick leave, bonuses and non-monetary
benefits and are recognised in the year in
which the associated services are
rendered by the employees. Where
William Demant Invest A/S provides long-
term employee benefits, the costs are
accrued to match the rendering of the
service by the employees concerned.
1.2 Employees
(DKK million)
Note 2022 2021
Employee costs
Wages and salaries
9,273 8,254
Share-based remuneration
32 18
Defined contribution plans
271 201
Defined benefit plans
7.1
16 19
Social security costs etc.
1,103 906
Employee costs
10,695 9,398
Employee costs by function
Production costs
1,623 1,382
R&D costs
1,039 911
Distribution costs
6,641 5,856
Administrative expenses
1,392 1,249
Employee costs
10,695 9,398
Average number of full-time employees
23,383 20,800
Remuneration to Executive Board included in
employee costs:
Wages and salaries
5.9 5.9
Short-term cash incentive
- 22.8
Executive Board
5.9 28.7
Fees to Board of Directors
1.9 1.9
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
53 William Demant Invest • Annual Report 2022
For accounting policies on amortisation
and depreciation, please refer to
Note 3.1, Note 3.2 and Note 3.3.
1.4 Proposed
dividend
The Board of Directors will at the annual
general assembly meeting propose not to
distribute dividend for 2022.
1.3 Amortisation, depreciation and impairment losses
(DKK million)
Note 2022 2021
Amortisation of intangible assets
3.1
267 238
Depreciation of property, plant and equipment
3.2
539 931
Depreciation of leased assets
3.3
776 732
Amortisation, depreciation and impairment losses
1,582 1,901
Amortisation, depreciation and impairment losses by function:
Production costs
233 635
Research and development costs
86 89
Distribution costs
964 833
Administrative expenses
299 344
Amortisation, depreciation and impairment losses
1,582 1,901
Net gains from sale of assets
-2 -6
Net gains from sale of assets
-2 -6
Net gains from sale of assets by function:
Administrative expenses
-2 -6
Net gains from sale of assets
-2 -6
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
54 William Demant Invest • Annual Report 2022
Inventories of DKK 54 million (DKK 54
million in 2021) are expected to be sold or
used in production after more than twelve
months.
Write-downs for the year are shown net,
as breakdown into reversed write-downs
and new write-downs is not possible.
Accounting policies
Raw materials, components and goods for
resale are measured at cost according to
the FIFO principle (according to which the
most recently purchased items are
considered to be in stock) or at their net
realisable value, whichever is lower.
Group-manufactured finished goods and
work in progress are measured at the
value of direct cost, direct payroll costs,
consumables and a proportionate share
of indirect production costs, which are
allocated on the basis of the normal
capacity of the production facility. Indirect
production costs include the
proportionate share of capacity costs
directly relating to Group-manufactured
goods and work in progress.
The net realisable value of inventories is
calculated as the estimated selling price
less costs of completion and costs to sell.
Accounting estimates and judgements
Indirect production cost (significant
judgement)
Indirect production cost allocations to
inventory are based on relevant
judgements related to capacity utilisation
at the production facility, production time
and other product-related factors. The
judgements are reviewed regularly to
ensure that inventories are measured at
their actual production cost. Changes in
judgements may affect gross profit
margins as well as the valuation of work in
progress, finished goods and goods for
resale.
Obsolescence provision (estimate)
The obsolescence provision for
inventories is based on the expected sales
forecast for the individual types of hearing
devices, diagnostic equipment, hearing
implants, communication devices and
prosthetics equipment. Sales forecasts are
based on Management’s expectations of
market conditions and trends, and the
obsolescence provision is subject to
changes in these assumptions.
1.5 Inventories
(DKK million)
2022 2021
Raw materials and purchased components
1,525 1,142
Work in progress
181 151
Finished goods and goods for resale
2,184 1,796
Inventories 3,890 3,089
Write-downs, provisions for obsolescence etc. included in the
above
175 210
Included in the income statement under production costs:
Write-downs of inventories for the year, net
68 56
Cost of goods sold for the year
5,834 5,126
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
55 William Demant Invest • Annual Report 2022
The opening balance of trade receivables
in 2021 amounted to DKK 3,578 million.
Of the total amount of trade receivables,
DKK 251 million (DKK 284 million in 2021)
is expected to be collected after 12
months. For information on security and
collateral, please refer to Credit risks in
note 4.1.
Accounting policies
Trade receivables and contract assets are
measured at amortised costs less
expected lifetime credit losses.
For trade receivables, the Group has a
simplified approach to determining the
expected credit loss. The allowance for
credit loss is measured through a
provision matrix. To measure the
expected credit loss, trade receivables
have been grouped based on shared
credit risk and the number of days that
have passed after the due date.
Allowances have also been made for trade
receivables not due. For trade receivables
that are considered credit-impaired, the
expected credit loss is determined on an
individual basis.
Accounting estimates and judgements
Impairment of receivables (estimate)
The Group has historically incurred
insignificant losses on trade receivables
and contract assets.
Allowance for impairment is calculated for
trade receivables. The allowance is
determined as expected credit losses
based on an assessment of the debtor’s
ability to pay. These assessments are
made by local management for uniform
groups of debtors based on a maturity
analysis. When indicated by special
circumstances, impairments are made for
individual trade receivables.
1.6 Trade receivables
Credit risk
(DKK million)
Balance not
due
0-3 months
overdue
3-6 months
overdue
6-12
months
overdue
More than
12 months
overdue
Total
carrying
amount
2022
Gross carrying
amount
3,187 940 274 257 309 4,967
Specific loss
allowance -16 -43 -51 -69 -137 -316
General loss
allowance -14 -12 -5 -7 -8 -46
Total 3,157 885 218 181 164 4,605
Expected loss rate 0.9% 5.9% 20.4% 29.6% 46.9% 7.3%
2021
Gross carrying
amount 2,839 720 251 237 349 4,396
Specific loss
allowance -19 -40 -51 -50 -174 -334
General loss
allowance -13 -8 -4 -6 -11 -42
Total 2,807 672 196 181 164 4,020
Expected loss rate 1.1% 6.7% 21.9% 23.6% 53.0% 8.6%
(DKK million)
2022 2021
Allowance for impairment
Allowance for impairment at 1.1. -376 -437
Foreign currency translation adjustments
-11 -7
Realised during the year
154 89
Additions during the year
-190 -152
Reversals during the year
43 131
Transfer to assets held for sale
18 -
Allowance for impairment at 31.12.
-362 -376
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
56 William Demant Invest • Annual Report 2022
Accounting policies
Customer loans are initially recognised at
fair value less transaction costs and
subsequently measured at amortised
costs less loss allowance or impairment
losses. Any difference between the
nominal value and the fair value of the
loans at initial recognition is treated as
prepaid discount on future sales to the
customer and is recognised in the income
statement as a reduction of revenue when
the customer purchases goods from the
Group.
The fair value of customer loans at initial
recognition is measured as the present
value of future repayments on the loan
discounted at a market interest rate. The
effective interest on customer loans is
recognised as financial income in the
income statement over the term of the
loans.
A loss allowance is recognised on initial
recognition and subsequently based on a
12-months expected credit loss model. If a
significant increase in the credit risk has
arisen since the initial recognition of the
loan, a loss allowance based on lifetime
expected credit loss is provided.
Accounting estimates and judgments
Accounting treatment (judgment) and
impairment (estimate) of loans
The Group provides sales-related
financing in the form of loans to some of
its customers. These customer loan
arrangements are complex, cover several
aspects of the customer relationship and
may vary from agreement to agreement.
Management assesses the recognition
and classification of income and expenses
for each of these agreements, including
whether the agreement represents a
discount on future sales. Management
also assesses whether there is an
indication of impairment based on current
economic market conditions and changes
in customer’s payment behaviour
(estimate).
1.7 Customer loans
(DKK million)
2022 2021
Non-current customer loans 566
494
Current customer loans
229
196
Total customer loans
795 690
Allowance for impairment
Allowance for impairment at 1.1. -17 -20
Foreign currency translation adjustments
- -2
Realised during the year
1 6
Additions during the year
-26 -2
Reversals during the year
9 1
Allowance for impairment at 31.12.
-33 -17
Group internal credit rating
2022
Expected
credit loss
rate
Gross
carrying
amount
Carrying
amount
Performing 12-month expected credit loss 0.3% 673 671
Underperforming Lifetime expected credit loss
20.0% 155 124
Total customer loans
828 795
2021
Performing 12-month expected credit loss 0.3% 578 576
Underperforming Lifetime expected credit loss 11.6% 129 114
Total customer loans 707 690
Insights and highlights The WDI companies Corporate information Financial report
Section 1
Operating activities and
cash flow
57 William Demant Invest • Annual Report 2022
1.8 Specification of non-cash items etc.
(DKK million)
2022 2021
Amortisation and depreciation
1,582 1,956
Share of profit after tax, associates and joint ventures
-1,665 -1,196
Gain on sale of intangible assets and property, plant and
equipment -1 -4
Provisions including one-offs
-29 -29
Exchange rate adjustments
-51 -46
Employee salary share arrangement
80 65
Divestment of enterprises
- -100
Other non-cash items
22 38
Non-cash items etc.
-62 684
Insights and highlights The WDI companies Corporate information Financial report
Section 2
Exchange rates and
hedging
58 William Demant Invest • Annual Report 2022
Section 2
Exchange rates and
hedging
Insights and highlights The WDI companies Corporate information Financial report
58 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 2
Exchange rates and
hedging
59 William Demant Invest • Annual Report 2022
The Group has cash flow in foreign
currencies due to its international
operations which exposes the Group to
fluctuations in exchange rates. Hedging
against exchange rate exposures ensure
greater predictability in profit. The
exposure of the Group mainly come from
Demant A/S, which manufactures and
distributes most of its products from the
production facilities in Poland. The
products are sold to its regional affiliates
and as a general principle invoiced in the
functional currency of the buying entities.
The currencies that mainly contribute to
the Group’s foreign exchange risks are US
dollars, British pound, Canadian dollars,
Australian dollars, Japanese yen, Polish
zloty, Icelandic Krona and Chinese yuan
(renminbi). The aim of the Group’s
hedging policy is to reduce the Group’s
exposure to exchange rate fluctuations,
mainly by entering into forward exchange
contracts to mitigate the Group’s risks
related to the impact that exchange rate
fluctuations have on consolidated
earnings for up to 18 months rolling
forward.
Hedging is done in accordance with the
Group’s policy with the aim to maintain an
overall adequate hedging level in the rage
of 70% -100% of the Group’s exposure to
exchange rate fluctuations. The Group
does not undertake any financial
transactions in foreign currencies of a
speculative nature. Cash flow hedge
accounting are applied to the extent
possible to mitigate negative impacts of
adverse development in exchange rates
on the consolidated operating result of
the Group.
Due to the fixed exchange rate policy
towards the euro in Denmark, the risk
associated with exposure to fluctuations is
considered to be limited and is not
hedged.
The tables show the impact on the year’s
operating profit (EBIT) and consolidated
equity, given a change of 5% in the
currencies with the highest exposures.
The exchange rate impact on EBIT has
been calculated on the basis of the
Group’s EBIT for each currency and does
not take into account a possible exchange
rate impact on balance sheet values in
those currencies.
2.1 Exchange rate
risk policy
2.2 Sensitivity analysis in respect
of exchange rates
Effect on EBIT, 5% positive change in
exchange rates*
Effect on equity, 5% positive change in
exchange rates
(DKK million)
2022 2021
(DKK million)
2022 2021
USD
+74 +103 USD +59 +89
GBP
+42 +29 GBP +38 +28
CAD
+23 +22 CAD +20 +20
AUD
+11 +13 AUD +9 +13
J
P
Y
+5 +4
J
P
Y
+5 +4
PLN
-30 -25 PLN -31 -25
CN
Y
+4 +8 CN
Y
+3 +8
IS
K
+0 +0 IS
K
+0 -2
*Estimated on a non-hedged basis, i.e. the total annual exchange rate effect, excluding forward exchange contracts.
Insights and highlights The WDI companies Corporate information Financial report
Section 2
Exchange rates and
hedging
60 William Demant Invest • Annual Report 2022
Open forward exchange contracts at the
balance sheet date may be specified as
shown in the table, with the contracts for
sale of currencies being shown with their
negative contract values. The expiry dates
reflect the periods in which the hedged
cash flows are expected to be realised.
Realised forward exchange contracts are
recognised in the income statement
together with the items, typically the
revenue in foreign currency, that such
contracts are designed to hedge. In 2022,
our forward exchange contracts realised a
loss of DKK 202 million (loss of DKK 36
million in 2021), which decreased reported
revenue for the year. There has been no
ineffectiveness in 2022 or 2021.
Accounting policies
On initial recognition, derivatives are
measured at fair value at the settlement
date. After initial recognition, derivatives
are measured at fair value at the balance
sheet date. Any positive or negative fair
values of derivatives are recognised as
separate items as Unrealised gains/losses
on financial contracts in the balance
sheet.
Forward exchange contracts and interest
swaps are measured based on current
market data and by use of commonly
recognised valuation methods. Please
refer to Note 4.5.
Any changes in fair values of derivatives
classified as hedging instruments and
satisfying the criteria for hedging the fair
value of a recognised asset or a
recognised liability, are recognised in the
income statement together with any
changes in the fair value of the hedged
asset or hedged liability.
Any changes in fair values of derivatives
classified as hedging instruments and
satisfying the criteria for effective hedging
of future transactions are recognised in
other comprehensive income.
The ineffective portion is recognised
directly in the income statement. On
realisation of the hedged transactions, the
accumulated changes are recognised
together with the related transactions.
Derivatives not fulfilling the conditions for
treatment as hedging instruments are
considered trading investments and
measured at fair value, with fair value
adjustments being recognised on an
ongoing basis in the income statement.
2.3 Hedging and forward exchange contracts
Forward exchange contracts
2022
Expiry Hedging period*
Average
hedging
rate
Contractual
value Fair value
Positive fair
value at
year-end
Negative
fair value at
year-end
(DKK million)
USD 2023 10 months 701 -1,072 18 30 12
AUD 2023 9 months 487 -263 8 8 -
GBP 2023 9 months 855
-470 13 13 -
CAD 2023 9 months 533
-362 16 16 -
J
P
Y
2023 10 months 5.34 -85 - 1 1
PLN 2023 9 months 150
479 15 15 -
EUR** 2024 36 months 742
891 -2 - 2
EUR 2023 12 months 740
-222 -9 - 9
-1,104 59 83 24
*Hedging periods represent the estimated periods for which the exchange rate exposure of a relative share of our
revenue in a currency will be covered by forward exchange contracts.
**Forward exchange contracts in euros hedged a fixed committed financial loan.
2021
Expiry Hedging period
Average
hedging
rate
Contractual
value Fair value
Positive fair
value at
year-end
Negative
fair value at
year-end
(DKK million)
USD 2022 11 months 632 -1,124 -38 1 39
AUD 2022 10 months 464 -334 -8 - 8
GBP 2022 11 months 863 -552 -12 - 12
CAD 2022 11 months 495 -441 -16 - 16
J
P
Y
2022 11 months 5.69 -120 - 1 1
PLN 2022 10 months 160 432 -4 1 5
EUR 2024 36 months 741 895 3 3 -
-1,244 -75 6 81
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
61 William Demant Invest • Annual Report 2022
Section 3
Assets base
Insights and highlights The WDI companies Corporate information Financial report
61 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
62 William Demant Invest • Annual Report 2022
3.1 Intangible assets
2022
2021
(DKK million) Goodwill
Patents and
licences
Other
intangible
assets
Assets
under
develop-
ment*
Total
intangible
assets Goodwill
Patents and
licences
Other
intangible
assets
Assets
under
develop-
ment*
Total
intangible
assets
Cost at 1.1. 19,545 249 1,837 274 21,905 17,841 221 1,607 283 19,952
Foreign currency translation adjustments
53 -3 36 2 88 586 8 49 5 648
Additions during the year
- 22 127 194 343 - 11 82 136 229
Additions relating to acquisitions
2,771 35 249 4 3,059 1,118 2 27 - 1,147
Disposals relating to divestments
- - - - - - - -4 - -4
Disposals during the year
-1 -5 -47 - -53 - -5 -62 - -67
Transferred to/from other items
- - 107 -107 - - 12 138 -150 -
Transferred to assets held for sale
-459 -66 -18 -107 -650 - - - - -
Cost at 31.12. 21,909 232 2,291 260 24,692 19,545 249 1,837 274 21,905
Amortisation at 1.1. - -139 -775 - -914 - -124 -583 - -707
Foreign currency translation adjustments
- -1 -25 - -26 - -3 -25 - -28
Amortisation for the year
- -13 -254 - -267 - -12 -227 - -239
Disposals during the year
- 4 43 - 47 - 1 61 - 62
Amortisation transfer
- - - - - - -1 -1 - -2
Transferred to assets held for sale
- 62 11 - 73 - - - - -
Amortisation at 31.12.
- -87 -1,000 - -1,087 - -139 -775 - -914
Carrying amount at 31.12. 21,909 145 1,291 260 23,605 19,545 110 1,062 274 20,991
*Prepayments are included in assets under development.
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
63 William Demant Invest • Annual Report 2022
Accounting policies
On initial recognition, goodwill is
recognised and measured as the
difference between the acquisition cost –
including the value of non-controlling
interests in the acquired enterprise and
the fair value of any existing investment in
the acquired enterprise – and the fair
values of the acquired assets, liabilities
and contingent liabilities. Please refer to
Accounting policies in Note 6.1.
On recognition, goodwill is allocated to
corporate activities that generate
independent payments (cash-generating
units). The definition of a cash-generating
unit is in line with the Group’s managerial
structure as well as the internal financial
management reporting. Goodwill is not
amortised but is tested for impairment at
least once a year. If the recoverable
amount of a cash-generating unit is lower
than the carrying amounts of property,
plant and equipment and intangible
assets, including goodwill, attributable to
the particular cash-generating unit, the
particular assets will be written down.
Patents and licences acquired from third
parties are measured at cost less
accumulated amortisation and
impairments. Patents and licenses are
amortised on a straight-line basis over
their estimated useful lives.
Other intangible assets consist of
software, other rights than patents and
licenses and other intangible assets
acquired in connection with acquisitions,
primarily brand value, customer bases
and non-compete agreements.
Other intangible assets are measured at
cost less accumulated amortisation and
impairment losses. Other intangible
assets are amortised on a straight-line
basis over their estimated useful lives,
except for other rights which are not
amortised, due to the residual value of
other rights are considered to exceed the
cost price and are instead tested for
impairment annually. Please refer to Note
3.5.
Assets under development include
internally developed IT systems. Assets
under development is measured at cost,
which include direct salaries, consultant
fees and other direct costs attributable to
the development. Assets under
development are not amortised, as the
assets are not available for use.
Patents and licenses 5-50 years
Software 2-10 years
Brand value 5-10 years
Customer relationships 4-10 years
Non-compete
agreements
For the
duration of the
agreement
Accounting estimates and judgements
Product development (judgement)
It is Management’s opinion that the
product development undertaken by the
Group today cannot meaningfully be
allocated to either the development of
new products or the further development
of existing products. Moreover, as the
products are subject to approval by
various authorities, it is difficult to
determine the final completion of new
products.
3.1 Intangible assets – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
64 William Demant Invest • Annual Report 2022
3.2 Property, plant and equipment
2022
2021
(DKK million)
Land and
buildings
Plant and
machinery
Other plant,
fixtures and
operating
equipment
Leasehold
improve-
ments
Assets
under
construc-
tion*
Total
property,
plant and
equipment
Land and
buildings
Plant and
machinery
Other plant,
fixtures and
operating
equipment
Leasehold
improve-
ments
Assets
under
construc-
tion*
Total
property,
plant and
equipment
Cost at 1.1. 1,260 2,845 1,801 1,246 127 7,279 1,209 2,746 1,465 1,073 181 6,674
Foreign currency translation adjustments
10 21 24 8 - 63 15 32 57 36 3 143
Additions during the year
8 101 230 225 207 771 7 92 254 169 80 602
Additions relating to acquisitions
3 11 24 46 - 84 3 4 6 7 - 20
Disposals relating to divestments
- -1,788 - - - -1,788 - -3 -13 -1 - -17
Disposals during the year
-8 -113 -105 -45 - -271 -2 -52 -59 -57 -4 -174
Transferred to/from other items
23 82 -50 59 -114 - 28 26 91 19 -133 31
Transferred to assets held for sale
- -46 -24 -13 - -83 - - - - - -
Cost at 31.12.
1,296 1,113 1,900 1,526 220 6,055 1,260 2,845 1,801 1,246 127 7,279
Depreciation and impairment losses at 1.1. -250 -1,403 -1,240 -677 - -3,570 -217 -880 -1,016 -568 - -2,681
Foreign currency translation adjustments
-4 -13 -17 -7 - -41 -6 -21 -41 -21 - -89
Depreciation for the year
-29 -143 -200 -172 - -544 -28 -558 -216 -137 - -939
Disposals relating to divestments
- 742 - - - 742 - 2 12 1 - 15
Disposals during the year
5 110 95 42 - 252 - 47 57 51 - 155
Transferred to/from other items
- -2 -8 10 - - 1 7 -36 -3 - -31
Transferred to assets held for sale
- 25 21 10 - 56 - - - - - -
Depreciation and impairment losses at
31.12.
-278 -684 -1,349 -794 - -3,105 -250 -1,403 -1,240 -677 - -3,570
Carrying amount at 31.12. 1,018 429 551 732 220 2,950 1,010 1,442 561 569 127 3,709
*Prepayments are included in assets under construction.
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
65 William Demant Invest • Annual Report 2022
Accounting policies
Property, plant and equipment are
recognised at cost less accumulated
depreciation and impairment losses. Cost
is defined as the acquisition price and
costs directly relating to the acquisition
until the point in time when the particular
asset is ready for use. For assets produced
by the Group, cost includes all costs
directly attributable to the production of
such assets, including materials,
components, sub-supplies and payroll.
Interest expenses on loans for financing of
the construction of property, plant and
equipment are recognised in the cost of
the assets if such expenses pertain to the
manufacturing period. Other borrowing
costs are recognised in the income
statement.
If the acquisition or the use of an asset
requires the Group to defray costs for the
demolition or restoration of such asset,
the calculated costs hereof are recognised
as a provision and as part of the cost of
the particular asset, respectively.
Assets consisting of various elements will
be depreciated separately if their useful
lives are not the same. Property, plant and
equipment are depreciated on a straight-
line basis over their estimated useful lives.
Land is not depreciated.
Accounting estimates and judgements
Useful life and residual value (estimate)
The depreciation basis is cost less the
estimated residual value of an asset after
the end of its useful life. The residual
value is the estimated amount, which
could after deduction of costs to sell be
obtained through the sale of the asset
today, such asset already having the age
and being in the state of repair expected
after the end of its useful life. The residual
value is determined at the time of
acquisition and is reviewed annually. If the
residual value exceeds the carrying
amount, depreciation will be
discontinued.
Depreciation methods, useful lives and
residual values are reviewed annually.
Property, plant and equipment are written
down to their recoverable amounts, if
these are lower than their carrying
amounts.
3.2 Property, plant and equipment – continued
Buildings 25-50 years
Technical installations 2-10 years
Plant and machinery 3-10 years
Plant and machinery,
wind farm
20-25 years
Other plant, fixtures and
operating equipment
3-10 years
IT hardware and software 2-5 years
Leasehold improvements Up to 10 years
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
66 William Demant Invest • Annual Report 2022
Approx. 98% of the Group’s leases consist
of property agreements. The lease terms
are of various length and may contain
extension and termination options.
Management exercises judgement in
determining whether it is reasonably
certain that these extension and
termination options will be exercised.
Accounting policies
Lease assets
Lease assets and liabilities are recognised
in the balance sheet at the
commencement date of the contract, if it
is or contains a lease. Lease assets are
recognised at cost less accumulated
depreciation and impairment.
Cost is defined as the lease liability
adjusted for any lease payments made at
or before the commencement date. Lease
assets are depreciated on a straight-line
basis over the lease term.
Lease liabilities
Lease liabilities are measured at the
present value of future payments, using
the interest rate implicit in the lease
agreement. Lease payments are
discounted,using the Group’s incremental
borrowing rate adjusted for the functional
currencies and length of the lease term, if
the interest rate implicit in the lease
agreement cannot be determined.
Lease payments contain fixed payments
less any lease incentives receivable,
variable lease payment that depend on an
index or a rate as well as payments of
penalties for terminating the lease, if the
terms of the lease warrants that the
Group exercises that option.
The lease liability is remeasured if or when
the future payment or lease term
changes. Any net remeasurement of the
lease liability is recognised as an
adjustment to the lease asset. If the
carrying amount of the lease asset is
reduced to zero, the adjustment will be
recognised in the income statement.
Additional information
Short-term lease expenses, low-value
assets and variable lease payments are
classified as operating expenses in the
income statement.
Please refer to Note 4.4 for a maturity
analysis of the lease liabilities.
3.3 Leases
(DKK million)
2022 2021
Lease assets at 1.1.
2,961 2,636
Foreign currency translation adjustments
24 84
Additions during the year
970 937
Additions relating to acquisitions
170 99
Disposals during the year
-111 -51
Depreciations during the year
-781 -744
Transferred to assets held for sale
-18 -
Lease assets at 31.12.
3,215 2,961
(DKK million)
2022 2021
Lease liabilities at 1.1. 3,091 2,695
Foreign currency translation adjustments
10 91
Additions during the year
973 924
Additions relating to acquisitions
170 99
Covid-19-related rent concessions
-3 -2
Disposals during the year
-45 -49
Payments
-850 -738
Interest
77 71
Transferred to liabilities related to assets held for sale
-19 -
Lease liabilities at 31.12. 3,404 3,091
Current lease liabilities 795 659
Non-current lease liabilities
2,609 2,432
Amounts recognised in the income statement:
Variable lease payments
31 32
Short-term lease expenses
50 31
Low-value assets
4 5
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
67 William Demant Invest • Annual Report 2022
Accounting estimates and judgements
Lease term (judgement)
The lease term is the period during which
the lease contract is enforceable. If the
original expiry date of a lease contract has
passed, typically in the case of property
leases, but the contract continues without
a determined expiry date, the lease term
is set for an estimated period during
which the lease contract is expected to be
enforceable. This assessment is based on
Management’s judgement and takes into
consideration the location of the lease,
capitalised leasehold improvements and
the experience with similar leases for the
specific area.
Extension and termination options
(significant judgement)
When determining the lease term for
lease agreements containing extension
and termination options, Management
considers circumstances that create a
financial incentive to exercise an
extension option or not to exercise a
termination option. Extension and
termination options are only included in
the lease term if it is reasonably certain
that a lease will be extended/terminated.
3.3 Leases – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
68 William Demant Invest • Annual Report 2022
3.4 Other non-current assets
2022 2021
Other receivables Other receivables
(DKK million)
Investments
in associates
and joint
ventures
Receivables
from
associates
and joint
ventures
Other
investments
Customer
loans Other
Investments
in associates
and joint
ventures
Receivables
from
associates
and joint
ventures
Other
investments
Customer
loans Other
Cost at 1.1. 9,039 271 134 501 151 5,311 247 478 446 145
Foreign currency translation adjustments
21 -2 - 23 1 30 15 1 34 4
Additions during the year
822 120 2,912 303 24 2,721 106 113 282 1
Additions relating to acquisitions
7 - - - 9 - - - - -
Disposals related to step-up acquisition of associates
-15 -20 - - -5 -26 -98 - - 4
Disposals, repayments etc. during the year
-47 - -83 -56 -12 -82 - -4 -117 -1
Transferred to current assets
- - - -184 - - 1 - -144 -2
Transferred to/from other items
- - - - - 1,085 - -454 - -
Cost at 31.12.
9,827 369 2,963 587 168 9,039 271 134 501 151
Value adjustments at 1.1. 3,282 -4 -19 -7 -56 1,801 - 621 -9 -54
Foreign currency translation adjustments
-4 - - -1 1 1 - - - -2
Share of profit after tax
1,665 - - - - 1,196 - - - -
Dividends received
-260 - - - - -259 - - - -
Disposals relating to step-up acquisitions of associates
- - - - - -2 -1 - - -
Fair value adjustments
- - -231 - - - - -9 - -
Other adjustments
-249 6 - -14 -2 545 -3 - -2 -
Disposals during the year
- - - 1 - - - - 4 -
Transferred to/from other items
- - - - - - - -631 - -
Value adjustments at 31.12.
4,434 2 -250 -21 -57 3,282 -4 -19 -7 -56
Carrying amount at 31.12. 14,261 371 2,713 566 111 12,321 267 115 494 95
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
69 William Demant Invest • Annual Report 2022
Transactions with associates and joint
ventures
In 2022, the Group recognised revenue
from associates and joint ventures of DKK
612 million (DKK 566 million in 2021),
received royalties from and paid licence
fees of net DKK 18 million (DKK 0 million
in 2021) and received dividends of DKK
165 (DKK 259 million in 2021).
In 2022, the Group received interest
income of DKK 16 million (DKK 11 million
in 2021). The transactions with related
parties were made on arm’s length basis.
Under the provisions of contracts
concluded with associates and joint
ventures, the Group is not entitled to
receive dividends from certain associates
and joint ventures. This is reflected in the
profit included in the income statement,
as no profit is recognised if the Group is
not entitled to receive dividends.
Accounting policies
Investments in associates and joint
ventures are recognised and measured
using the equity method, i.e. investments
are recognised in the balance sheet at the
proportionate share of the equity value
determined in accordance with the
Group’s accounting policies after the
deduction and addition of proportionate
intra-group gains and losses, respectively,
and after the addition of the carrying
amount of any goodwill. The
proportionate shares of profit after tax in
associates and joint ventures are
recognised in the income statement after
the year’s changes in unrealised intra-
group profits less any impairment loss
relating to goodwill.
The proportionate shares of all
transactions and events, which have been
recognised in other comprehensive
income in associates and joint ventures,
are recognised in the consolidated other
comprehensive income. On the
acquisition of interests in associates and
joint ventures, the acquisition method is
applied.
3.4 Other non-current assets - continued
(DKK million)
2022 2021
Aggregate information of associates that are not
individually material
Revenue
1,155 986
Profit for the year
179 143
Comprehensive income
179 143
Carrying amount of the Group's interest in the associate
3,735 3,615
Jeudan Vitrolife
(DKK million) 2022 2021 2022 2021
Key financial figures (100% share)
Revenue 2,001 1,814 2,199 1,211
Depreciations and amortisations
16 20 269 79
Financial income
7 10 - 18
Financial expenses
181 118 79 -
Tax expenses
954 665 97 84
Profit for the year
3,359 2,352 268 247
Other comprehensive income
- - 779 14
Comprehensive income
3,359 2,352 1,047 261
Dividends paid to William Demant Invest
during the year
56 56 22 17
Balance sheet items (100% share)
Non-current assets 34,688 31,045 12,689 13,084
Cash
15 2 386 457
Current assets
2,375 324 1,052 1,021
Non-current financial liabilities*
19,173 17,643 1,366 1,471
Non-current liabilities
22,092 19,903 2,133 2,275
Current financial liabilities*
651 805 122 331
Current liabilities
1,663 1,386 415 693
Equity
13,308 10,080 11,193 11,137
Reconciliation to the carrying amount
Proportion of the Group's ownership
interest in the associate
42.0% 42.0% 28.7% 26.7%
Goodwill
160 160 1,574 1,343
Carrying amount of the Group's interest in
the associate 5,743 4,389 4,783 4,317
*Included in non-current and current liabilities, respectively. Financial liabilities consists of borrowings, deposits and
lease liabilities.
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
70 William Demant Invest • Annual Report 2022
Impairment testing is carried out for the
Group's four cash-generating units: (1)
Prosthetics, Bracing & Supports, (2)
Radiotherapy, (3) Hearing Healthcare and
(4) Communications. Based on the
impairment tests performed, a material
excess value was identified in each cash-
generating unit, compared to the carrying
amount, for which reason no impairment
of goodwill was made on 31 December
2022. This conclusion is supported by the
fact that the market capitalisations of
Demant A/S and Össur hf. on Nasdaq
Copenhagen by far exceeds the equity
value of the companies.
The impairment testing is performed as a
test of the value in use, including a five-
year budget/projection period from 2023-
2027.
Future cash flows are based on the
budget for 2023, on strategy plans and on
projections hereof. Projections extending
beyond 2023 are based on general
parameters, such as expected market
growth, selling prices and profitability
assumptions.
The market growth rate in the non-
invasive orthopaedics, radiation oncology
and the hearing aid industry as well as for
audio solutions is predominantly
determined by the following factors:
Prosthetics, Bracing & Supports
• Growth in emerging markets due to
increased utilization of prosthetic
solutions in the markets, better
healthcare coverage and increasing
disposable income.
• Increased utilisation of higher quality
prosthetics.
• Increasing share of elderly with more
active lifestyles.
Radiotherapy
• Surface Guided Radiation Therapy
(SGRT) becoming standard of care in all
major markets driving market growth
and increased penetration.
• Vision RT is the clear market leader and
SGRT innovator with 80-95% market
shares in key geographies.
• Growing demographics and an
increasing share of elderly in the
population driving demand for cancer
care treatment and SGRT.
Hearing Healthcare
• Growing demographics and an
increasing share of elderly in the
population driving stable volume
growth in the hearing aid market.
• Expansion of diagnostic instruments
and services across the world.
• Increased penetration rates of hearing
healthcare solutions due to education,
increased affluence and availability.
Communications
• Increasing adoption of Unified
Communications and Collaboration
equipment, especially professional
headsets.
• Emergence and establishment of video
solutions for enterprises.
• An increasing prevalence of gamers
driving growth in gaming headsets.
Sensitivity calculations show that even a
significant increase in the discount rates
or a significant reduction of the growth
assumptions will not change the outcome
of the impairment tests. Apart from
goodwill, all intangible assets have limited
useful lives.
The goodwill allocation per cash-
generating unit is presented in the table.
The terminal values for the period after
2027 and the discount rates used in the
impairment tests for the four cash-
generating units are based on the growth
assumptions in the table.
3.5 Impairment testing
2022
2021
(DKK million)
Terminal
growth rate
WACC
Carrying amount
goodwill
Terminal
growth rate
WACC
Carrying amount
goodwill
Prosthetics, Bracing & Supports
2.5% 9.4% - 10.4% 7,666 2.5% 7.8% - 8.7% 7,163
Radiotherapy
2.0% 9.0% 2,755 2.0% 9.0% 2,911
Hearing Healthcare
2.0% 8.0% 11,071 2.0% 6.5% 9,054
Communications
2.0% 12.0% 417 2.0% 12.0% 417
21,909 19,545
Insights and highlights The WDI companies Corporate information Financial report
Section 3
Assets base
71 William Demant Invest • Annual Report 2022
Accounting estimates and judgements
Cash-generating units (judgements)
Impairment testing is carried out annually
on preparation of the annual report or on
indication of impairment in which
discounted values of future cash flows are
compared with carrying amounts. In
Hearing Healthcare, the Group enterprises
cooperate closely on R&D, purchasing,
production, marketing and sale, as the use
of resources in the individual markets is
coordinated and monitored by
Management in Denmark. Group
enterprises are thus highly integrated. Any
business activity that largely acts with
autonomy in relation to the Group and
whose profitability can be measured
independently of the other activities
constitutes a separate cash-generating
unit. Management therefore considers it
most appropriate to separate the activities
into four cash-generating units,
Prosthetics, Bracing & supports,
Radiotherapy, Hearing Healthcare and
Communications for which impairment
testing is carried out.
Accounting policies
The carrying amounts of property, plant
and equipment and intangible assets with
definite useful lives as well as investments
in associates and joint ventures are
reviewed at the balance sheet date to
determine whether there are indications
of impairment. If so, the recoverable
amount of the particular asset is
calculated to determine the need for
impairment, if any. The recoverable
amounts of goodwill and other intangible
assets with indefinite useful lives will be
estimated, whether or not there are
indications of impairment.
The recoverable amount is estimated for
the smallest cash-generating unit of which
the asset is part. The recoverable amount
is determined as the higher of the fair
value of the asset or cash-generating unit
less costs to sell and the value in use of
such asset or unit. On determination of
the value in use, estimated future cash
flows will be discounted to their present
values using a discount rate that reflects
partly current market valuations of the
time value of money, and partly the
special risks attached to the particular
asset or cash-generating unit for which no
adjustment has been made in the
estimated future cash flows. If the
recoverable amount of a particular asset
or cash-generating unit is lower than its
carrying amount, such asset or unit is
written down to its recoverable amount.
Impairment losses are recognised in the
income statement. On any subsequent
reversal of impairment losses due to
changes in the assumptions on which the
calculation of the recoverable amount is
based, the carrying amount of an asset or
cash-generating unit is increased to the
adjusted estimate of the recoverable
amount, however not exceeding the
carrying amount of the asset or cash-
generating unit, had the particular asset
or cash-generating unit not been written
down. Impairment of goodwill is not
reversed.
3.5 Impairment testing – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
72 William Demant Invest • Annual Report 2022
Section 4
Capital structure and
financial management
Insights and highlights The WDI companies Corporate information Financial report
72 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
73 William Demant Invest • Annual Report 2022
Policies relating to financial risk
management and capital structure
Financial risk management concentrates
on identifying risks in respect of exchange
rates, interest rates, credit and liquidity
with a view to protecting the Group
against potential losses and ensuring that
Management’s forecasts for the current
year are only to a limited extent affected
by changes or events in the surrounding
world – be they changes in exchange rates
or in interest rates. It is Group policy to
exclusively hedge commercial risks and
not to undertake any financial
transactions of a speculative nature.
Interest rate risks
Because of the Group’s high level of cash
generation and relatively low financial
gearing, the majority of our loans are
raised on floating terms and
predominantly as short-term
commitments, resulting in a low level of
interest expenses. In order to secure
relatively low interest rates for the Group
on the long term and as a consequence of
our attractive funding possibilities in the
financial market, the Group now partly
funds its debt through long-term
committed facilities with fixed rates and
through financial instruments, which
limits the interest rate risk.
The Group’s net interest bearing debt
amounted to DKK 22,495 million as of 31
December 2022 (DKK 16,152 million in
2021).
Credit risks
The Group’s credit risks relate primarily to
trade receivables and loans to customers
or business partners. Our customer base
is fragmented, so in general, credit only
involves minor losses on individual
customers. For the Group, the ten largest
customers account for approx. 10% of
total consolidated revenue.
Furthermore, when granting loans, we
require that our counterparties provide
security in their business. Overall, we
therefore estimate that the risk relative to
our total credit exposure is well-balanced
at Group level.
The maximum credit risk relating to
receivables matches the carrying amounts
of such receivables. Overall, the Group
has limited deposits with financial
institutions for which reason the credit
risk of deposits is considered to be low.
Liquidity risks
The Group aims to have sufficient cash
resources to be able to take appropriate
steps in case of unforeseen fluctuations in
cash outflows. We have access to
considerable undrawn credit facilities, and
the liquidity risk is therefore considered to
be low. We are of the opinion that the
Group has strong cash flows and a solid
credit profile to secure the current inflow
of working capital and funds for potential
acquisitions. Neither in previous years nor
in the financial year 2022, has the Group
defaulted on any loan agreements.
4.1 Financial risk management and capital structure
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
74 William Demant Invest • Annual Report 2022
In addition to the foreign exchange items,
the consolidated income statement is also
affected by foreign exchange hedging
instruments as described in Note 2.3, as
well as by foreign exchange effects of
balance sheet items affecting production
costs with a gain of DKK 85 million in 2022
(a gain of DKK 33 million in 2021).
Accounting policies
Net financial items mainly consist of
interest income and interest expenses,
credit card fees and bank fees and also
include interest on lease liabilities,
unwinding of discounts on financial assets
and liabilities, fair value adjustments of
“shadow shares” under share-based
remuneration programmes, fair value
adjustments on other investments as well
as certain realised and unrealised foreign
exchange gains and losses. Interest
income and interest expenses are accrued
based on the principal amount and the
effective interest rate. The effective
interest rate is the discount rate used for
discounting expected future payments
attaching to the financial asset or financial
liability in order for the present value to
match the carrying amount of such asset
or liability.
4.2 Net financial items
(DKK million)
2022 2021
Interest on cash and bank deposits
17 5
Interest on receivables, customer loans etc.
46 34
Other financial income
46 17
Financial income from financial assets measured at amortised cost 109 56
Foreign exchange gains, net 36 -
Financial income
145 56
Interest on bank debt, mortgages etc. -334 -202
Interest expenses on lease liabilities
-77 -71
Financial expenses on financial liabilities measured at amortised cost
-411 -273
Fair value adjustment on other investments -231 -9
Financial expenses on financial assets measured at fair value
-231 -9
Fair value adjustments on financial liabilities -28 -
Financial expenses on financial liabilities measured at fair value -28 -
Foreign exchange losses, net -6 -13
Transaction costs
-159 -136
Financial expenses -835 -431
Net financial items -690 -375
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
75 William Demant Invest • Annual Report 2022
The following non-financial items are
included in the balance sheet and
represent the difference between the
table and the balance sheet: Other
liabilities DKK 530 million (DKK 481 million
in 2021).
Accounting policies
Debt to credit institutions and other
interest-bearing debt is recognised at the
date of borrowing at the proceeds
received less transaction costs. For
subsequent periods, financial liabilities are
measured at amortised cost in order for
the difference between proceeds and the
nominal value to be recognised as a
financial expense over the term of the
loan.
On initial recognition, other financial
liabilities are measured at fair value and
subsequently at amortised cost using the
effective interest method, and the
difference between proceeds and the
nominal value is recognised in the income
statement as a financial expense over the
contractual maturity term.
On initial recognition, other investments
classified as current assets are recognised
at their fair values adjusted for any
directly related costs from the purchase of
the other investments. The other
investments are subsequently measured
at fair value based on listed prices in an
active market for the same type of
instrument. Unrealised value adjustments
are recognised in other comprehensive
income, except for impairment losses
which are included in the income
statement as part of net financial items.
When other investments are disposed or
sold, the accumulated value adjustments
are reclassified to the net financial items
in the income statement.
The component parts of compound
instruments (convertible promissory
notes) are classified separately as financial
liabilities and equity if fair value at initial
recognition can be allocated to the
conversion option. Fair value of the
conversion option is calculated as the
residual value between fair value of the
liability component, using prevailing
market interest rates for similar non-
convertible instruments, and fair value of
the entire instrument. The liability
component is subsequently measured at
amortised cost.
4.3 Categories of financial instruments
(DKK million)
2022 2021
Unrealised gains on financial contracts
103 6
Financial assets used as hedging instruments
103 6
Receivables from associates and joint ventures 541 414
Customer loans
795 690
Other receivables
584 596
Trade receivables
4,605 4,020
Cash
1,746 1,940
Financial assets at amortised cost
8,271 7,660
Other investments 2,713 115
Financial assets at fair value through income statement
2,713 115
Unrealised losses on financial contracts -24 -81
Financial liabilities used as hedging instruments
-24 -81
Debt to credit institutions etc. -14,301 -8,045
Short-term bank facilities etc.
-5,748 -5,954
Lease liabilities
-3,404 -3,091
Debt to parent
-2,023 -2,018
Trade payables
-1,073 -993
Other liabilities
-3,363 -2,870
Financial liabilities measured at amortised cost
-29,912 -22,971
Other liabilities -339 -330
Financial liabilities measured at fair value through the
income statement
-339 -330
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
76 William Demant Invest • Annual Report 2022
Trade payables and other liabilities have a
contractual maturity of less than one year,
with the exception of other liabilities of
DKK 1,057 million (DKK 783 million in
2021) which have a contractual maturity
of 1-5 years. The contractual cash flows
approximate their carrying amounts.
Interest-bearing borrowings broken down
by currency: 8% in US dollars (11% in
2021), 62% in Danish kroner (62% in 2021),
24% in euros (21% in 2021), 1% in
Australian dollars (1% in 2021), 2% in
Canadian dollars (2% in 2022) and 3% in
other currencies (3% in 2021).
4.4 Net interest-bearing debt, liquidity and interest rate risks
Contractual cash flows
(DKK million)
Less than 1
year 1-5 years
More than
5 years Total
Carrying
amount
Weighted
average
effective
interest
rate
2022
Interest-bearing receivables* 302 790 194 1,286 1,235
Cash
1,756 - - 1,756 1,746
Interest-bearing assets
2,058 790 194 3,042 2,981 2.6%
Debt to credit institutions etc. -6,514 -7,415 -885 -14,814 -14,301
Debt to parent
-90 -2,218 - -2,308 -2,023
Short-term bank facilities etc.
-5,784 - - -5,784 -5,748
Borrowings -12,388 -9,633 -885 -22,906 -22,072 2.6%
Lease liabilities -862 -2,056 -959 -3,877 -3,404
Net interest-bearing debt -11,192 -10,899 -1,650 -23,741 -22,495
2021
Interest-bearing receivables* 256 748 47 1,051 1,016
Cash 1,944 - - 1,944 1,940
Interest-bearing assets 2,200 748 47 2,995 2,956 1.8%
Debt to credit institutions etc. -3,578 -4,615 - -8,193 -8,045
Debt to parent -2,047 - - -2,047 -2,018
Short-term bank facilities etc. -5,977 - - -5,977 -5,954
Borrowings -11,602 -4,615 - -16,217 -16,017 0.9%
Lease liabilities -688 -1,825 -960 -3,473 -3,091
Net interest-bearing debt -10,090 -5,692 -913 -16,695 -16,152
*Interest-bearing receivables comprise customer loans, receivables from associates and joint ventures as well as other receivables.
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
77 William Demant Invest • Annual Report 2022
4.4 Net interest-bearing debt, liquidity and interest rate risks – continued
(DKK million) 2021
Cash flows
from
financing
activities
COVID-19 -
rent
concessions Acquisition
Foreign
exchange
movement
Other
additions Disposals
Transferred
to liabilities
related to
assets held
for sale 2022
Lease liabilities 3,091 -773 -3 170 10 973 -45 -19 3,404
Debt to parent 2,018
5 - - - - - - 2,023
Debt to credit institutions etc. 8,045
6,124 - 30 97 5 - - 14,301
Short-term bank facilities 5,954
-250 - - 45 - - -1 5,748
Interest-bearing liabilities 19,108 5,106 -3 200 152 978 -45 -20 25,476
(DKK million) 2020
Cash flows
from
financing
activities
COVID-19 -
rent
concessions Acquisition
Foreign
exchange
movement
Other
additions Disposals
Transferred
to liabilities
related to
assets held
for sale 2021
Lease liabilities 2,695 -667 -2 99 91 924 -49 - 3,091
Debt to parent 2,216 - - - - - -198 - 2,018
Debt to credit institutions etc. 8,091 -7 - -30 -12 3 - - 8,045
Short-term bank facilities 3,663 2,067 - 3 214 - 7 - 5,954
Interest-bearing liabilities 16,665 1,393 -2 72 293 927 -240 - 19,108
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
78 William Demant Invest • Annual Report 2022
The fair value of interest cap (a strip of call
options) outstanding at the balance sheet
date is DKK 20 million (DKK 0 million in
2021), and the contractual value of
interest cap is DKK 650 million (DKK 650
million in 2021). The cap will run until
2023.
Reconciliation of liabilities arising
from financing activities
The table shows the changes in
consolidated liabilities arising from
financing activities, including both cash
and non-cash changes. Liabilities arising
from financing activities are those for
which cash flows were, or future cash
flows will be, classified in the consolidated
cash flow statement as cash flows from
financing activities.
Sensitivity analysis in respect of
interest rates
Based on the Group’s net debt at the end
of the 2022 financial year, a rise of 1
percentage point in the general interest
rate level will cause an increase in
consolidated annual interest expenses
before tax of approximately DKK 79
million (DKK 46 million in 2021).
The Group has limited the maximum
interest rates on part of its non-current
debt through an interest rate cap.
4.4 Net interest-bearing debt, liquidity and interest rate risks – continued
(DKK million) 2022 2021
Expiry
Interest rate
/ strike
Contractual
amount at
year end
Positive fair
value at
year-end
Negative fair
value at
year-end Expiry
Interest rate
/ strike
Contractual
amount at
year end
Positive fair
value at
year-end
Negative fair
value at
year-end
DKK/DKK 2023 0% 650 20 - 2023 0% 650 - -
650 20 - 650 - -
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
79 William Demant Invest • Annual Report 2022
Methods and judgements for
calculation of fair values
Other investments
Other investments are assessed on the
basis of their fair value.
Derivatives
Forward exchange contracts are assessed
using discounted cash flow valuation
techniques. Future cash flows are based
on forward exchange rates from
observable forward exchange rates at the
end of the reporting period and on
contractual forward exchange rates
discounted at a rate that reflects the credit
risk related to various counterparties.
Interest swaps are assessed using
discounted cash flow valuation
techniques. Future cash flows are based
on observable forward yield curves at the
end of the reporting period and on
contractual interest rates discounted at a
rate that reflects the credit risk related to
various counterparties.
The value of a cap is assessed using
discounted cash flow valuation
techniques. A cap consists of a series of
interest rate options (IRGs) with the same
strike rate. The individual interest rate
options each cover an interest period. The
key elements when pricing interest rate
options are strike rate, forward rate,
maturity and volatility. The value of an
interest rate option is made up of the
intrinsic value and the time value of such
option. The value of a cap is the combined
value of the individual IRGs.
Contingent considerations
Contingent considerations are measured
at their fair values based on the
contractual terms of the contingent
considerations and on non-observable
inputs, such as the financial performance
and purchasing patterns of the acquired
enterprises for a period of typically 1-5
years after the date of acquisition.
Fair value hierarchy for assets and
liabilities measured at fair value in the
balance sheet
Financial instruments measured at fair
value are broken down according to the
fair value hierarchy:
• Listed prices in an active market for the
same type of instrument (level 1)
• Listed prices in an active market for
similar assets or liabilities or other
valuation methods, with all significant
inputs being based on observable
market data (level 2)
• Valuation methods, with any significant
inputs not being based on observable
market data (level 3)
Accounting policies
On initial recognition, other investments
are recognised at fair value and
subsequently measured at fair value in
the income statement. Unrealised value
adjustments are recognised in the income
statement. On realisation, value
adjustments are recognised in net
financial items in income statement.
Contingent considerations arising from
the acquisition of enterprises and
activities are recognised at fair value at
the time of acquisition. The obligations are
re-evaluated on a recurring basis.
4.5 Fair value hierarchy
Insights and highlights The WDI companies Corporate information Financial report
Section 4
Capital structure and
financial management
80 William Demant Invest • Annual Report 2022
There are no transfers between levels in
the 2022 and 2021 financial years.
Certain financial assets excluding other
investments, other financial liabilities and
contingent considerations are measured
at fair value in the balance sheet based on
valuation methods, with any significant
inputs not being based on observable
market data. Most of the contingent
considerations recognised relate to
deferred payments, which are not
dependent on any performance
obligations and will usually be paid out
within 1-5 years.
The majority of the contingent
considerations is recognised as the
maximum consideration to be paid, which
Management has assessed to be the most
likely outcome.
4.5 Fair value hierarchy – continued
(DKK million) 2022
2021
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets used as hedging
instruments
- 103 - 103 - 6 - 6
Other investments
2,698 - 15 2,713 104 - 11 115
Financial liabilities used as hedging
instruments
- -24 - -24 - -81 - -81
Financial liabilities at fair value through
income statement - - -339 -339 - - -330 -330
Contingent considerations
- - -652 -652 - - -260 -260
Level 3 Assets and liabilities
Financial
assets
Other financial
liabilities
Contingent
considerations
(DKK million)
2022 2021 2022 2021 2022 2021
Carrying amount at 1.1.
115 1,099 -330 -307 -260 -185
Foreign currency translation adjustment
- 1 19 -23 3 -6
Acquisitions
2,912 113 - - -660 -175
Disposals, repayments, settlements etc.
-83 -1,089 - - 221 77
Other adjustments
-231 -9 -28 - 34 29
Transferred to liabilities related to assets held for sale
- - - - 10 -
Carrying amount at 31.12.
2,713 115 -339 -330 -652 -260
Insights and highlights The WDI companies Corporate information Financial report
Section 5
Tax
81 William Demant Invest • Annual Report 2022
Section 5
Tax
Insights and highlights The WDI companies Corporate information Financial report
81 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 5
Tax
82 William Demant Invest • Annual Report 2022
Accounting policies
Tax on the year’s profit includes current
tax and any changes in deferred tax.
Current tax includes taxes payable
determined on the basis of the estimated
taxable income for the year and any prior-
year tax adjustments. Tax on changes in
equity and other comprehensive income
is recognised directly in equity and in
other comprehensive income,
respectively.
Foreign currency translation adjustments
of deferred tax are recognised as part of
the year’s adjustments of deferred tax.
Permanent differences primarily include
non-taxable dividends and sale of shares,
R&D incentives, profit in associates/joint
ventures, non-deductible share-based
payments, and loss on accounts
receivables.
Current tax liabilities or tax receivables
are recognised in the balance sheet and
determined as tax calculated on the year’s
taxable income adjusted for any tax paid
on account. The tax rates prevailing at the
balance sheet date are used for
calculation of the year’s taxable income.
(DKK million)
2022 2021
Current tax on profit for the year -687 -773
Adjustment of current tax, prior years
14 12
Change in deferred tax
-20 -113
Adjustment of deferred tax, prior years
10 13
Impact of changes in corporate tax rates
-9 11
Tax on profit for the year
-692 -850
Reconciliation of tax rates
Danish corporate tax rate
22.0% 22.0%
Differences between tax rates of non-Danish enterprises and
Danish corporate tax rate 0.4% 1.2%
Impact of changes in corporate tax rates
0.2% -0.2%
Impact of unrecognised tax assets
0.2% -0.2%
Permanent differences
-7.9% -5.6%
Other items, including prior-year adjustments
0.0% 1.0%
Effective tax rate
14.9% 18.2%
5.1 Tax on profit 5.2 Deferred tax
(DKK million)
2022 2021
Deferred tax recognised in the balance sheet
Deferred tax assets
823 819
Deferred tax liabilities
-811 -690
Deferred tax, net at 31.12. 12 129
Deferred tax, net at 1.1. 129 217
Foreign currency translation adjustments
-17 -2
Changes in deferred tax
-20 -113
Additions relating to acquisitions
-32 -1
Disposals relating to divestments
33 -
Adjustment of deferred tax, prior years
10 13
Impact of changes in corporate tax rates
-9 11
Deferred tax relating to changes in equity, net
-50 4
Transferred to assets held for sale
-32 -
Deferred tax, net at 31.12
12 129
Insights and highlights The WDI companies Corporate information Financial report
Section 5
Tax
83 William Demant Invest • Annual Report 2022
The tax value of deferred tax assets not
recognised is DKK 188 million (DKK 189
million in 2021) and relates mainly to tax
losses and tax credits for which there is
considerable uncertainty about their
future utilisation. Tax losses of DKK 33
million will expire within 5-10 years,
whereas other tax losses carried forward
have no expiry date.
5.2 Deferred tax – continued
(DKK million)
Temporary
differences
at 1.1.
Foreign
currency
translation
adjustments Acquisitions
Recognised
in profit for
the year
Recognised
in other
comprehen-
sive income
Transferred
to assets
held for sale
Temporary
differences
at 31.12.
2022
Intangible assets -619 -20 -33 -9 -
1 -680
Property, plant and equipment
-109 -1 33 -49 -
14 -112
Leased assets
33 - - - -
- 33
Inventories
305 1 1 16 -
-48 275
Receivables
60 2 - -10 -1
-1 50
Provisions
104 -2 - 16 -
-1 117
Deferred income
152 3 - 6 -
- 161
Tax losses
105 - - -1 -
- 104
Other
98 - - 12 -49
3 64
Total
129 -17 1 -19 -50 -32 12
Temporary
differences
at 1.1.
Foreign
currency
translation
adjustments Acquisitions
Recognised
in profit for
the year
Recognised
in other
comprehen-
sive income
Transferred
to assets
held for sale
Temporary
differences
at 31.12.
2021
Intangible assets -511 -24 - -84 -
- -619
Property, plant and equipment -90 1 - -20 -
- -109
Leased assets 12 - - 21 -
- 33
Inventories 276 4 - 25 -
- 305
Receivables 77 3 -1 -18 -1
- 60
Provisions 106 4 - -6 -
- 104
Deferred income 159 6 - -13 -
- 152
Tax losses 163 6 - -64 -
- 105
Other 25 -2 - 70 5
- 98
Total 217 -2 -1 -89 4 - 129
Insights and highlights The WDI companies Corporate information Financial report
Section 5
Tax
84 William Demant Invest • Annual Report 2022
Accounting policies
Deferred tax is recognised using the
balance sheet liability method on any
temporary differences between the tax
base of assets and liabilities and their
carrying amounts, except for deferred tax
on temporary differences arisen either on
initial recognition of goodwill or on initial
recognition of a transaction that is not an
acquisition, with the temporary difference
ascertained on initial recognition affecting
neither net profits nor taxable income.
Deferred tax is determined on the basis of
the tax rules and rates prevailing at the
balance sheet date in a particular country.
The effect of any changes in tax rates on
deferred tax is included in tax on the
year’s profit, unless such deferred tax is
attributable to items previously
recognised directly in equity or in other
comprehensive income. In the latter case,
such changes will also be recognised
directly in equity or in other
comprehensive income. The tax base of a
loss, if any, which may be set off against
future taxable income, is carried forward
and set off against deferred tax in the
same legal tax entity and jurisdiction.
Accounting estimates and judgements
Deferred tax assets (estimate)
Deferred tax assets, including the tax
value of any tax losses allowed for
carryforward, are recognised in the
balance sheet at the estimated realisable
value of such assets, either by a set-off
against a deferred tax liability or by a net
asset to be set off against future positive
taxable income. At the balance sheet date,
an assessment is made as to whether it is
probable that sufficient taxable income
will be available in the future against
which the deferred tax asset can be
utilised. Deferred tax on temporary
differences between the carrying amounts
and the tax values of investments in
subsidiaries, associates and joint ventures
is recognised, unless the parent is able to
control the time of realisation of such
deferred tax, and it is probable that such
deferred tax will not be realised as current
tax in the foreseeable future.
5.2 Deferred tax – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 6
Acquisitions and
divestments
85 William Demant Invest • Annual Report 2022
Section 6
Acquisitions and
divestments
Insights and highlights The WDI companies Corporate information Financial report
85 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 6
Acquisitions and
divestments
86 William Demant Invest • Annual Report 2022
6.1 Acquisition of enterprises and activities
2022
2021
(DKK million) Össur* Sheng Wang* Demant, other* Total Össur* Demant, other* Total
Intangible assets 48 82 158 288 17 12 29
Property, plant and equipment
14 40 30 84 7 13 20
Other non-current assets
- 139 45 184 - 98 98
Inventories
21 38 45 104 9 9 18
Current receivables
15 101 56 172 13 18 31
Cash and cash equivalents
17 41 56 114 9 30 39
Non-current liabilities
-20 -96 -75 -191 -3 -97 -100
Current liabilities
-27 -201 -101 -329 -28 -48 -76
Acquired net assets
68 144 214 426 24 35 59
Goodwill 405 1,736 630 2,771 305 813 1,118
Acquisition cost
473 1,880 844 3,197 329 848 1,177
Carrying amount of non-controlling interests on obtaining control - - -15 -15 - -18 -18
Fair value adjustment of non-controlling interests on obtaining control
- - -14 -14 - -48 -48
Contingent considerations and deferred payments
-182 -426 -52 -660 -62 -113 -175
Acquired cash and cash equivalents
-17 -41 -56 -114 -9 -30 -39
Cash acquisition cost
274 1,413 707 2,394 258 639 897
*Acquisitions made in the Össur Group and Demant Group, respectively.
Insights and highlights The WDI companies Corporate information Financial report
Section 6
Acquisitions and
divestments
87 William Demant Invest • Annual Report 2022
On 14 June 2022, the Demant Group
announced the acquisition of the remaining
80% of the shares in Sheng Wang, thereby
taking full ownership of the business. This
followed the 20% minority investment
announced on 4 March 2022.
The payment was transferred on 1 July 2022
from which date Demant took ownership
and achieved control of Sheng Wang.
During the year, Össur acquired a 100%
share in Naked Prosthetics, a leading
provider of mechanical finger prosthesis for
finger and partial hand amputees.
Furthermore, the Demant Group acquired
Inventis Srl., a developer and manufacturer
of audiological and balance equipment
based in Italy.
The Demant Group made a number of
minor retail acquisitions in North America,
Asia and Europe as well as Össur made
further acquisitions to strengthen the
Company's sales channels in 2022. In respect
of these acquisitions, we paid acquisition
costs exceeding the fair values of the
acquired assets, liabilities and contingent
liabilities. Such positive balances in value can
be attributed to expected synergies between
the activities of the acquired entities and our
existing activities, to the future growth
opportunities and to the value of staff
competencies in the acquired entities. These
synergies are not recognised separately from
goodwill, as they are not separately
identifiable.
At the time of acquisition, non-controlling
interests’ shares of acquisitions were
measured at their proportionate shares of
the total fair value of the acquired entities,
including goodwill. On obtaining a control-
ling interest through step acquisitions,
previously held non-controlling interests are
at the time of obtaining control included at
fair value with fair value adjustments in the
income statement.
In 2022, a few adjustments were made to the
preliminary recognition of acquisitions made
in 2021. These adjustments were made in
respect of payments made, contingent
considerations provided, and net assets and
goodwill acquired.
The impact of these adjustments on
payments made was DKK 0 million (DKK 6
million in 2021), the impact on goodwill was
DKK 11 million (DKK 14 million in 2021), the
impact on contingent considerations was
DKK 2 million (DKK 8 million in 2021). In
relation to acquisitions with final recognition
in 2014-2021, adjustments were made in
2022 in respect of estimated contingent
considerations. Such adjustments are
recognised in the income statement.
The total impact on the income statement of
fair value adjustments of non-controlling
interests in step acquisitions amounted to
DKK 14 million (DKK 48 million in 2021), and
adjustments of contingent considerations
made via the income statement of DKK 32
million (DKK 30 million in 2021) are
recognised under distribution costs for
acquisitions.
Of the total acquisition entries in 2022, the
fair value of estimated contingent
considerations in the form of earn-outs or
deferred payments accounted for DKK 660
million (DKK 183 million in 2021). Such
payments depend on the results of the
acquired entities for a period of 1-5 years
after takeover and can total a maximum of
DKK 753 million (DKK 183 million in 2021) for
acquisitions.
The acquired assets include contractual
receivables amounting to DKK 69 million
(DKK 27 million in 2021) of which DKK 2
million (DKK 3 million in 2021) was thought
to be uncollectible at the date of the
acquisition. Of total goodwill in the amount
of DKK 2,771 million (DKK 1,118 million in
2021), DKK 202 million (DKK 567 million in
2021) can be amortised for tax purposes.
Transaction costs in connection with
acquisitions made in 2022 amounted to DKK
15 million (DKK 5 million in 2021), which has
been recognised under distribution costs.
Revenue and profit generated by the
acquired enterprises since our acquisition in
2022 amount to DKK 405 million (DKK 278
million in 2021) and DKK -18 million, (DKK 25
million in 2021), respectively. Had such
revenue and profit been consolidated on 1
January 2022, we estimate that consolidated
pro forma revenue and profit would have
been DKK 25,558 million (DKK 23,916 million
in 2021) and DKK 3,620 million (DKK 3,658
million in 2021), respectively. Without taking
synergies from our core business into
account, we believe that these pro forma
figures reflect the level of consolidated
earnings after our acquisition of the
enterprises.
The statements of the fair values of
acquisitions are not considered final until 12
months after takeover.
From the balance sheet date and until the
date of financial reporting in 2023, the
Demant Group have acquired additional
distribution enterprises. We are in the
process of assessing their fair value. The
acquisition cost is expected to relate
primarily to goodwill.
6.1 Acquisition of enterprises and activities – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 6
Acquisitions and
divestments
88 William Demant Invest • Annual Report 2022
Accounting policies
Newly acquired or newly established
enterprises are recognised in the
consolidated financial statements from
the time of acquisition or formation. The
time of acquisition is the date when
control of the enterprise is transferred to
the Group. For Group accounting policies
on control, please refer to consolidated
financial statements in Note 9.1. In
respect of newly acquired enterprises,
comparative figures and key figures will
not be restated. On acquiring new
enterprises of which the Group obtains
control, the purchase method is applied
according to which their identified assets,
liabilities and contingent liabilities are
measured at their fair values on the
acquisition date. Any non-current assets
acquired for the purpose of resale are,
however, measured at their fair values
less expected costs to sell. Restructuring
costs are solely recognised in the pre-
acquisition balance sheet if they are a
liability for the acquired enterprise. Any
tax effect of revaluations will be taken into
account.
The acquisition cost of an enterprise
consists of the fair value of the
consideration paid for the enterprise. If
the final consideration is conditional upon
one or more future events, the
consideration will be recognised at the fair
value on acquisition. Any subsequent
adjustment of contingent consideration is
recognised directly in the income
statement, unless the adjustment is the
result of new information about
conditions prevailing on the acquisition
date, and this information becomes
available up to 12 months after the
acquisition date. Transaction costs are
recognised directly in the income
statement when incurred. If costs exceed
the fair values of the assets, liabilities and
contingent liabilities identified on
acquisition, any remaining positive
differences (goodwill) are recognised in
the balance sheet under intangible assets
and tested for impairment at least
annually.
If the carrying amount of an asset exceeds
its re-coverable amount, it will be written
down to such lower recoverable amount.
If, on the acquisition date, there are any
uncertainties with respect to identifying or
measuring acquired assets, liabilities or
contingent liabilities or uncertainty with
respect to determining their cost, initial
recognition will be made on the basis of
provisionally calculated values. Such
provisionally calculated values may be
adjusted, or additional assets or liabilities
may be recognised up to 12 months after
the acquisition date, if new information
becomes available about conditions
prevailing on the acquisition date, which
would have affected the calculation of
values on that day, had such information
been known.
Accounting estimates and judgements
Identification of assets and liabilities
(judgement)
On recognition of assets and liabilities
from acquisitions, management
judgements may be required for the
following areas:
• Intangible assets resulting from
technology, customer relationships,
client lists or brand names
• Contingent consideration
arrangements
Contingent consideration (estimate)
Acquisitions may include provisions that
additional payments of contingent
considerations be paid to the previous
owners, when certain events occur, or
certain results are obtained. Management
assesses on a regular basis the estimates
made in respect of the particular
acquisitions, taking sales run rates of the
acquired entity into account.
6.1 Acquisition of enterprises and acti
v
ities – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 6
Acquisitions and
divestments
89 William Demant Invest • Annual Report 2022
In 2022, the Group divested its share in
Boston Holding A/S, a joint operation
company with a proportional share of the
wind farm (50%) in Borkum Riffgrund 1.
In 2021, the Group divested FrontRow
Calypso LLC, a 75%-owned subsidiary
focused specifically on audio systems for
classrooms and schools. The divestment
resulted in a gain, including recycling of
cumulative exchange differences of DKK
99 million, which is recognised as other
income in the income statement.
6.2 Divestment of enterprises and activities
2022
2021
(DKK million) Boson Holding Total Demant* Total
Non-current assets 1,046 1,046 8 8
Current assets
65 65 84 84
Non-current liabilities
-953 -953 -3 -3
Current liabilities
-35 -35 -7 -7
Carrying amount of net assets divested
123 123 82 82
Non-controlling interests - - -20 -20
Carrying amount of net assets divested attributable to William Demant
Invest A/S' shareholder
123 123 62 62
Recycling of cumulative exchange differences - - -3 -3
Gain on divestment
- - 102 102
Cash consideration received** 123 123 161 161
Figures are shown at fair value on the divestment date.
*Divestments made in the Demant Group.
**Including repayment loan from William Demant Invest of DKK 789 million.
Insights and highlights The WDI companies Corporate information Financial report
Section 6
Acquisitions and
divestments
90 William Demant Invest • Annual Report 2022
On 27 April 2022, Demant announced the
decision to discontinue its Hearing
Implants business. In 2022, discontinued
operations thus comprise the Hearing
Implants business, which realised a profit
after tax of DKK -192 million. The negative
result can be attributed to a slight decline
in revenue, a lower gross margin as well
as higher expenses in 2022. The bone
anchored hearing systems business area
delivered growth in the year, supported by
the launch of the Ponto 5 sound
processor, but revenue for Hearing
Implants was negatively affected by a
lower sales of Neuro Zti implants
following the voluntary field corrective
action in 2021.
Accounting policies
Discontinued operations represent a
separate line of business disposed of or in
preparation for sale. The results of
discontinued operations are presented
separately in the income statement, and
comparative figures are restated. Cash
flows from discontinued operations are
presented separately in the cash flow
statement.
6.3 Discontinued operations and assets held for sale
(DKK million)
2022 2021
Revenue
497 482
Expenses
-737 -678
Amortisation and depreciation
-10 -21
Profit before tax - discontinued operations -250 -217
Tax on profit for the year
58 34
Profit after tax - discontinued operations
-192 -183
Profit after tax - discontinued operations attributable to:
William Demant Invest A/S' shareholder
-192 -183
-192 -183
Cash flow from discontinued operations
Cash flow from operating activities (CFFO)
-232 -318
Cash flow from investing activities (CFFI)
-4 4
Cash flow from financing activities (CFFF)
-17 -
Cash flow for the year, net - discontinued operations
-253 -314
Insights and highlights The WDI companies Corporate information Financial report
Section 6
Acquisitions and
divestments
91 William Demant Invest • Annual Report 2022
On 27 April 2022, Demant entered into an
agreement with the intention to divest the
Hearing Implants business to Cochlear
Limited for a conditional payment of DKK
850 million on a cash- and debt-free basis.
Assets classified as held for sale at 31
December 2022 thus comprise the
Hearing Implants business. Cochlear will
take over the obligations to service
existing customers. The divestment is
subject to regulatory approval and other
customary closing conditions with closing
expected in Q2 2023.
Accounting policies
Assets and liabilities relating to the
discontinued operations are classified as
held for sale. Assets held for sale, except
financial assets etc., and liabilities related
to assets held for sale are measured at
the lower of their carrying amount and
their fair value less costs to sell. Non-
current assets held for sale are not
depreciated.
6.3 Discontinued operations and assets held for sale – continued
(DKK million)
2022
Balance sheet items:
Intangible assets
577
Property, plant and equipment
27
Lease assets
18
Deferred tax assets
32
Other non-current assets
2
Non-current assets
656
Current assets 308
Assets held for sale 964
Provisions 28
Lease liabilities
19
Other liabilities
128
Liabilities related to assets held for sale
175
Insights and highlights The WDI companies Corporate information Financial report
Section 7
Provisions, other
liabilities etc.
92 William Demant Invest • Annual Report 2022
Section 7
Provisions, other
liabilities etc.
Insights and highlights The WDI companies Corporate information Financial report
92 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 7
Provisions, other
liabilities etc.
93 William Demant Invest • Annual Report 2022
Miscellaneous provisions relate to
provisions for disputes etc. and are
essentially expected to be realised within
the next five years.
7.1 Provisions
(DKK million)
2022 2021
Provisions for restructuring costs
65 1
Employee-related provisions
69 67
Miscellaneous provisions
89 229
Other provisions 223 297
Defined benefit plan liabilities, net 91 193
Provisions at 31.12. 314 490
Breakdown of provisions:
Non-current provisions
184 374
Current provisions
130 116
Provisions at 31.12.
314 490
2022
2021
(DKK million)
Restruc-
turing costs
Employee-
related
Miscellan-
eous Total
Restruc-
turing costs
Employee-
related
Miscellan-
eous Total
Other provisions at 1.1. 1 67 229 297 2 59 148 209
Foreign currency translation adjustments
- 2 2 - - 4 4
Additions relating to acquisitions
- 1 5 6 - 1 4 5
Disposals relating to divestment
- - -100 -100 - - - -
Provisions during the year
112 1 29 142 - 1 104 105
Realised during the year
-48 -1 -51 -100 -1 - -28 -29
Reversals during the year
- 1 -3 -2 - 6 -3 3
Transferred to liabilities related to assets
held for sale
- - -22 -22 - - - -
Other provisions at 31.12.
65 69 89 223 1 67 229 297
Breakdown of provisions:
Non-current provisions
- 64 29 93 - 63 118 181
Current provisions
65 5 60 130 1 4 111 116
Other provisions at 31.12.
65 69 89 223 1 67 229 297
Insights and highlights The WDI companies Corporate information Financial report
Section 7
Provisions, other
liabilities etc.
94 William Demant Invest • Annual Report 2022
Generally, the Group does not offer
defined benefit plans, but it has such
plans in Switzerland, France and Germany
where they are required by law.
Defined benefit plan costs recognised in
the income statement amount to DKK 16
million (DKK 19 million in 2021), and the
accumulated actuarial gain recognised in
the statement of comprehensive income
amount to DKK 28 million (loss of DKK 73
million in 2021).
In 2023, the Group expects to pay
approximately DKK 15 million (DKK 18
million in 2022) into defined benefit plans.
Defined benefit obligations in the amount
of DKK 130 million (DKK 137 million in
2021) will mature within 1-5 years and
obligations in the amount of DKK 299
million (DKK 401 million in 2021) after five
years.
If the discount rate is 0,5% higher (lower),
the defined benefit obligation would
decrease by 5% (increase by 6%). If the
expected salary growth rate is 0,5% higher
(lower) the defined benefit obligation
would increase by 1% (decrease by 1%).
Plan assets are recognised as follows:
Equity 17%
Bonds 23%
Property 20%
Other 41%
Accounting policies
Provisions are recognised if, as a result of
an earlier event, the Group has a legal or
constructive obligation, and if the
settlement of such an obligation is
expected to draw on corporate financial
resources, but there is uncertainty about
the timing or amount of the obligation.
Provisions are measured on a discounted
basis based on Management’s best
estimate of the amount at which a
particular liability may be settled. The
discount effect of any changes in the
present value of provisions is recognised
as a financial expense.
The Group has defined benefit plans and
similar agreements with some of its
employees. As regards defined
contribution plans, the Group pays
regular, fixed contributions to
independent pension companies.
Contributions are recognised in the
income statement for the period in which
employees have performed work entitling
them to such pension contributions.
Contributions due are recognised in the
balance sheet as a liability.
As regards defined benefit plans, the
Group is obliged to pay a certain
contribution when an employee covered
by such a plan retires, for instance a fixed
amount or a percentage of the employee’s
final salary. An actuarial calculation is
made periodically of the accrued present
7.1 Provision – continued
(DKK million)
2022 2021
Present value of defined benefit obligations:
Defined benefit obligations at 1.1.
541 564
Foreign currency translation adjustments
22 21
Additions relating to acquisitions
- -
Current service cost
15 19
Calculated interest on defined benefit obligations
2 -
Actuarial gains/losses
-134 -53
Net benefits paid
-21 -19
Contribution from plan participants
10 9
Transferred to liabilities related to assets held for sale
-6 -
Defined benefit obligations at 31.12
429 541
Fair value of defined benefit assets:
Defined benefit assets at 1.1.
348 321
Foreign currency translation adjustments
16 15
Expected return on defined benefit assets
- -1
Actuarial gains/losses
-29 9
Contributions
24 23
Net benefits paid
-21 -19
Defined benefit assets 31.12.
338 348
Defined benefit obligations recognised in the balance sheet,
net
91 193
Return on defined benefit assets:
Actual return on defined benefit assets
-29 8
Expected return on defined benefit assets
- -1
Actuarial gains/losses on defined benefit assets -29 9
Assumptions:
Discount rate
2.3% 0.3%
Expected return on defined benefit assets
0% 0%
Future salary increase rate
1.4% 1.2%
Insights and highlights The WDI companies Corporate information Financial report
Section 7
Provisions, other
liabilities etc.
95 William Demant Invest • Annual Report 2022
value of future benefits to which
employees through their past
employment with the Group are entitled
and which are payable under the defined
benefit plan. This defined benefit
obligation is calculated annually using the
projected unit credit method on the basis
of judgements in respect of the future
development in for instance wage levels,
interest rates, mortality and inflation
rates.
The defined benefit obligation less the fair
value of any assets relating to the defined
benefit plan is recognised at the balance
sheet under provisions.
Defined benefit costs are categorised as
follows:
• Service costs, including current service
costs, past service costs as well as gains
and losses on curtailments and
settlements
• Net interest expense or income
• Remeasurements
Remeasurements, comprising actuarial
gains and losses, any effects of changes to
the asset ceiling and return on defined
benefit assets excluding interest, are
reflected immediately in the balance sheet
with a charge or credit recognised in other
comprehensive income in the period in
which it occurs.
Remeasurements recognised in other
comprehensive income are reflected
immediately in retained earnings and are
not reclassified to the income statement.
Service costs and net interest expense or
income are included in the income
statement as employee costs.
Other non-current employee benefits are
recognised using actuarial calculation.
Actuarial gains or losses on such benefits
are recognised directly in the income
statement.
Accounting estimates and judgements
Assessment of provisions (estimate)
Management assesses, on an ongoing
basis, provisions for restructuring costs
and the likely outcome of pending and
probable lawsuits etc. (other provisions).
When assessing the likely outcome of
lawsuits, Management bases its
assessment on internal and external legal
advice and established precedent.
Provisions for restructuring costs are
based on the estimated costs of
implementing restructuring initiatives and
thus on a number of judgements about
future costs and events. For all provisions,
the outcome and final expense depend on
future events, which are by nature
uncertain.
7.1 Provision – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 7
Provisions, other
liabilities etc.
96 William Demant Invest • Annual Report 2022
Product-related liabilities include standard
warranties and returned products etc.
Employee-related liabilities include
holiday pay and payroll costs due. The
carrying amount of other liabilities
approximate the fair value of such
liabilities.
Accounting policies
Other non-financial liabilities are
recognised if, as a result of an earlier
event, the Group has a legal or
constructive obligation, and if the
settlement of such an obligation is
expected to draw on corporate financial
resources. Other non-financial liabilities
are measured on a discounted basis, and
the discount effect of any changes in the
present value of the liabilities is
recognised as a financial expense.
On the sale of products with a right of
return, a refund liability and a right to the
returned products are recognised as a
refund liability and a current asset
(included in prepaid expenses),
respectively. The refund liability is
deducted from revenue and the right to
the returned products is offset in cost of
sales. Warranty commitments include the
obligation to remedy faulty or defective
products during the warranty period.
Other financial liabilities mainly consist of
liabilities to acquire additional shares in
subsidiaries. The liabilities are measured
at fair value through income statement.
The fair value is estimated based on
valuation principles agreed between the
parties.
Accounting estimates and judgements
Warranty and return liabilities (estimates)
Liabilities in respect of service packages
and warranties are calculated on the basis
of information on products sold, related
service and warranty periods and past
experience of costs incurred by the Group
to fulfil its service and warranty liabilities.
Liabilities in respect of returns have been
calculated based on information on
products sold, related rights concerning
returns and past experience of products
being returned in the various markets.
Consolidated product-related liabilities are
the sum of a large number of small items,
the sum changing constantly due to a
large number of transactions.
7.2 Other liabilities
(DKK million)
2022 2021
Product-related liabilities
530 481
Employee-related liabilities
1,303 1,133
Other debt, public authorities
307 457
Contingent considerations
652 260
Other costs payable
1,101 1,020
Other financial liabilities
339 330
Other liabilities 4,232 3,681
Due within 1 year 3,175 2,898
Due within 1-5 years
1,057 783
Insights and highlights The WDI companies Corporate information Financial report
Section 7
Provisions, other
liabilities etc.
97 William Demant Invest • Annual Report 2022
Free products, service and some
warranty-related services mentioned in
the table are provided free of charge to
the customer. Certain other warranty-
related services are paid by the customer
in connection with delivery of the related
goods, but delivery of the service takes
place 1-6 years after delivery of the goods.
Please refer to Note 1.1 for a description
of the nature of the deferred income.
Accounting policies
Deferred income includes income
received or future performance
obligations relating to subsequent
financial years and is recognised as
revenue when the Group performs the
obligations by transferring the goods or
services.
The William Demant Invest Group is
involved in minor litigations, claims,
disputes etc. Management is of the
opinion that such disputes do not and will
not significantly affect the Group’s
financial position. The Group seeks to
make adequate provisions for legal
proceedings.
As part of our business activities, the
Group has entered into normal
agreements with customers and suppliers
etc. as well as agreements for the
purchase of shareholdings.
William Demant Invest A/S is in relation to
certain investments and securities
committed to inject additional capital to
the extent that the activities of these
investments require additional capital.
7.3 Deferred income 7.4 Contingent
liabilities
(DKK million)
2022
2021
Prepayments from customers 178 172
Future performance obligations:
Deferred warranty-related revenue
646 576
Deferred free products revenue
98 109
Deferred service revenue
266 230
Total
1,188 1,087
Expected recognition of revenue
Less than
1 year 1-2 years 2-4 years
More than
4 years Total
2022
Prepayments from customers
178 - - - 178
Deferred warranty-related
revenue 289 262 89 6 646
Deferred free products revenue
48 36 8 6 98
Deferred service revenue
130 95 37 4 266
Total
645 393 134 16 1,188
2021
Prepayments from customers 172 - - - 172
Deferred warranty-related
revenue 275 212 85 4 576
Deferred free products revenue 64 36 8 1 109
Deferred service revenue 112 77 38 3 230
Total 623 325 131 8 1,087
Insights and highlights The WDI companies Corporate information Financial report
Section 8
Other disclosure
requirements
98 William Demant Invest • Annual Report 2022
Section 8
Other disclosure
requirements
Insights and highlights The WDI companies Corporate information Financial report
98 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 8
Other disclosure
requirements
99 William Demant Invest • Annual Report 2022
William Demant Foundation,
Kongebakken 9, 2765 Smørum, Denmark,
is the only related party with a controlling
interest. Related parties with significant
influence are the Company’s Executive
Board, Board of Directors and their
related parties. Furthermore, related
parties are companies in which the above
persons have significant interests.
Subsidiaries, associates, joint ventures
and joint operations as well as the Group’s
ownership interests in these companies
appear in section 11. For financial
information on associates and joint
ventures please refer to Note 3.4.
In 2022, William Demant Foundation paid
administration fees to William Demant
Invest A/S of DKK 3 million (DKK 2 million
in 2021). Further, William Demant
Foundation has granted loans (convertible
promissory notes) to William Demant
Invest A/S totalling DKK 2,000 million at
year-end 2022, on which interest in 2022
totals DKK 82 million (DKK 70 million in
2021). At year-end 2022, William Demant
Foundation has other current receivables
of DKK 23 million (DKK 18 million in 2021)
in William Demant Invest A/S arising from
accrued interest.
In 2022, William Demant Foundation
donated DKK 0 million (DKK 1 million
in 2021) to Eriksholm Research
Centre and DKK 0 million (DKK 2
million in 2021) to an industrial PhD
project in Oticon A/S. Further,
William Demant Foundation
acquired diagnostic and Oticon
equipment worth DKK 2,7 million
and DKK 1,1 million, respectively
(DKK 0.1 million and DKK 0 million in
2021), from the Group.
In 2022, the members of the Executive
Board and the Board of Directors
received remuneration from Group
companies in the amount of DKK 3
million (DKK 3 million in 2021).
There have been no transactions with
the Executive Board and the Board of
Directors apart from normal
remuneration. Please refer to Note 1.2
Some of the Group's subsidiaries are not
subject to auditing by
PricewaterhouseCoopers.
In 2022, the fee for non-audit services
delivered by PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab,
Denmark, amounted to DKK 2 million
relating to issuance of various assurance
reports as well as consulting services.
In 2021, the fee for non-audit services
delivered by Deloitte Statsautoriseret
Revisionspartnerselskab, Denmark,
amounted to DKK 2 million in 2021 and
consisted of VAT and tax services, tax
advisory services related to transfer
pricing, issuance of various assurance
reports as well as consulting services.
8.1 Related parties
8.2 Fees to parent's auditors appointed
at the annual general meeting
(DKK million)
2022* 2021
Statutory audit
24 24
Tax and VAT advisory services
- 2
Other services
2 5
Total
26 31
*PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab (PricewaterhouseCoopers Denmark) was appointed
as Group auditor at the annual general meeting in March 2022, replacing Deloitte Statsautoriseret
Revisionspartnerselskab.
Insights and highlights The WDI companies Corporate information Financial report
Section 8
Other disclosure
requirements
100 William Demant Invest • Annual Report 2022
In 2022, the William Demant Invest Group
received government grants in the
amount of DKK 25 million (DKK 48 million
in 2021), of which DKK 12 million are
COVID-19-related publicly funded
compensation schemes. Non-COVID-19
grants are offset against R&D costs.
Accounting policies
Government grants are recognised when
there is reasonable certainty that the
conditions for such grants are satisfied
and that they will be awarded. Grants
received as compensation for costs
incurred are recognised proportionately in
the income statement over the periods in
which the related costs are recognised in
the income statement and are offset
against costs incurred. Government grants
relating to the acquisition of non-current
assets are deducted from the cost of such
asset.
No events have occurred after the balance
sheet date that might affect the financial
statements.
8.3 Government grants
8.4 Events after the balance sheet date
(DKK million)
2022 2021
Government grants by function
Production costs
1 5
R&D costs
17 22
Distribution costs
7 19
Administrative expenses
- 2
Total
25 48
Insights and highlights The WDI companies Corporate information Financial report
Section 9
Basis for preparation
101 William Demant Invest • Annual Report 2022
Section 9
Basis for preparation
Insights and highlights The WDI companies Corporate information Financial report
101 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 9
Basis for preparation
102 William Demant Invest • Annual Report 2022
The Group’s general accounting policies
are described below. In addition to this,
specific accounting policies are described
in each of the individual notes to the
consolidated financial statements as
outlined here:
1.1 Revenue
1.2 Employees
1.5 Inventories
1.6 Trade receivables
1.7 Customer loans
2.3 Hedging and forward exchange
contracts
2.4 Exchange rates
3.1 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Other non-current assets
3.5 Impairment testing
4.2 Net financial items
4.3 Categories of financial instruments
4.5 Fair value hierarchy
5.1 Tax on profit
5.2 Deferred tax
6.1 Acquisition of enterprises and
activities
6.3 Discontinued operations and assets
held for sale
7.1 Provisions
7.2 Other liabilities
7.3 Deferred income
8.3 Government grants
General
The consolidated financial statements are
presented in compliance with
International Financial Reporting
Standards (IFRS) as adopted by the EU and
Danish disclosure requirements for
annual reports published by reporting
class C (large) companies, cf. the Danish
executive order on IFRS issued in
compliance with the Danish Financial
Statements Act. The registered office of
William Demant Invest A/S is in Denmark.
The consolidated financial statements are
presented in Danish kroner (DKK), which is
the functional currency for the Parent. The
consolidated financial statements are
presented based on historical cost, except
for obligations for contingent
consideration in connection with
acquisitions, share-based remuneration,
other investments and derivatives which
are measured at fair value.
The financial statements for the Parent as
well as the Parent’s accounting policies are
presented separately from the
consolidated financial statements and are
shown on the last pages of this Annual
Report 2022.
Effect of new accounting standards
The Group has adopted the new,
amended and revised accounting
standard and interpretation as published
by the IASB and adopted by the EU
effective for the accounting period
beginning 1 January 2022. The new,
updated and amended standards and
interpretations did not result in any
changes to the accounting policies for the
Group nor had it any significant impact on
the consolidated financial statements for
2022.
IASB has issued new accounting standards
and amendments effective for accounting
periods beginning after 1 January 2022,
which have not been adopted by the EU
yet. The changes to these standards are
not expected to have any significant
impact on the Group.
Except for the implementation of the new
and amended standard, the accounting
policies remain unchanged compared to
last year.
Consolidated financial statements
The consolidated financial statements
comprise William Demant Invest A/S (the
Parent) and the enterprises in which the
Parent can or does exercise control by
either directly or indirectly holding more
than 50% of the voting rights, or in which
the Parent exercises control in some other
manner. Enterprises in which the Group
holds 20-50% of the voting rights and/or in
some other manner can or does exercise
significant influence are considered
associates or joint ventures and are
incorporated proportionately into the
consolidated financial statements using
the equity method.
Consolidation principles
The consolidated financial statements are
prepared based on the financial
statements of the Parent and its
subsidiaries by aggregating uniform items.
Enterprises that, by agreement, are
managed jointly with one or more other
enterprises are recognised using the
equity method. The consolidated financial
statements are prepared in accordance
with the Group’s accounting policies. Intra-
group income, expenses, shareholdings,
balances and dividends as well as
unrealised intra-group profits on
inventories are eliminated.
9.1 Group accounting policies
Insights and highlights The WDI companies Corporate information Financial report
Section 9
Basis for preparation
103 William Demant Invest • Annual Report 2022
The accounting items of subsidiaries are
recognised 100% in the consolidated
financial statements.
On initial recognition, non-controlling
interests are measured either at fair value
or at their proportionate share of the fair
value of the identifiable assets, liabilities
and contingent liabilities of the acquired
subsidiary. The method is chosen for each
individual transaction. Non-controlling
interests are subsequently adjusted
according to their proportionate share of
changes in equity of the subsidiary.
Comprehensive income is allocated to
non-controlling interests whether or not,
as a result hereof, the value of such
interests is negative. The purchase or sale
of non-controlling interests in a
subsidiary, which does not result in
obtaining or discontinuing control of such
subsidiary, is treated as an equity
transaction in the consolidated financial
statements, and any difference between
the consideration and the carrying
amount is allocated to the Parent’s share
of the equity.
Foreign currency translation
The Group’s presentation currency is
Danish kroner.
On initial recognition, transactions in
foreign currencies are translated at the
exchange rates prevailing at the date of
the transaction. The functional currencies
of the enterprises are determined by the
economic environment in which the enter-
prises operate, normally the local
currency.
Receivables, payables and other monetary
items in foreign currencies are translated
into Danish kroner at the exchange rates
prevailing at the balance sheet date.
Realised and unrealised foreign currency
translation adjustments are recognised in
the income statement under gross profit
or net financial items, depending on the
purpose of the underlying transaction.
Property, plant and equipment, intangible
assets, inventories and other non-
monetary assets purchased in foreign
currencies and measured on the basis of
historical cost are translated at the ex-
change rates prevailing at the transaction
date. Non-monetary items, which are re-
valued at their fair values, are translated
using the exchange rates at the
revaluation date.
On recognition in the consolidated
financial statements of enterprises
presenting their financial statements in a
functional currency other than Danish
kroner, the income statement is
translated using average exchange rates
for the months of the year in question,
unless they deviate materially from actual
exchange rates at the transaction dates. In
case of the latter, actual exchange rates
are applied.
Balance sheet items are translated at the
exchange rates prevailing at the balance
sheet date. Goodwill is considered as be-
longing to the acquired enterprise in
question and is translated at the exchange
rate prevailing at the balance sheet date.
All foreign currency translation
adjustments are recognised in the income
statement, except for the following, which
are recognised in other comprehensive
income:
• The translation of income statements
of foreign subsidiaries using monthly
average exchange rates for the
respective months of the year, whereas
balance sheet items of such foreign
subsidiaries are translated using
exchange rates prevailing at the
balance sheet date.
• The translation of non-current, intra-
group receivables that are considered
to be an addition to or deduction from
net investments in foreign subsidiaries.
• The translation of investments in
associates and joint ventures.
Income statement
Income and costs are recognised on an
accruals basis. The income statement is
broken down by function, and all costs,
including depreciation, amortisation and
impairment losses, are therefore charged
to production, distribution, administration
and R&D.
Production costs
Production costs are costs incurred to
generate revenue. Distribution companies
recognise cost of goods sold under
production costs. Production companies
recognize cost of raw materials,
consumables, production employees as
well as maintenance of and depreciation,
amortization and impairment losses on
property, plant and equipment and
intangible assets used in the production
process under production costs.
R&D costs
Research costs are always recognised in
the income statement as such costs incur.
Development costs include all costs not
satisfying capitalisation criteria, but
incurred in connection with development,
prototype construction, development of
new business concepts and amortisation
of capitalised development costs.
9.1 Group accounting policies – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 9
Basis for preparation
104 William Demant Invest • Annual Report 2022
Distribution costs
Distribution costs include costs relating to
training, sales, marketing, promotion
materials, distribution, bad debts as well
as depreciation, amortisation and
impairment losses on assets used for
distribution purposes.
Administrative expenses
Administrative expenses include
administrative employee costs, office
expenses as well as depreciation,
amortisation and impairment losses on
assets used for administrative purposes.
Other operating income
Other operating income includes income
from all activities not related to the core
business activities of the Group.
Prepaid expenses
Prepaid expenses recognised under
assets include costs relating to the
subsequent financial years. Prepaid
expenses are measured at cost.
Equity
Foreign currency translation reserve
includes foreign currency translation
adjustments on the translation of financial
statements of foreign subsidiaries,
associates, and joint ventures from their
respective functional currencies into
Danish kroner. Foreign currency
translation adjustments are recognised in
the income statement on realisation of
the net investment. Hedging reserves
include fair value adjustments of
derivatives and loans satisfying the criteria
for hedging of future transactions. The
amounts are recognised in the income
statement or the balance sheet at the
same time as hedged transactions are
recognised.
Treasury shares and dividend
On the buy-back of shares or sale of
treasury shares, the purchase price or
selling price, respectively, is recognised
directly in equity under other reserves
(retained earnings). A capital reduction
through the cancellation of treasury
shares will reduce the share capital by an
amount corresponding to the nominal
value of such shares. Proposed dividends
are recognised as a liability at the time of
adoption at the annual general meeting.
Cash flow statement
The cash flow statement is prepared
according to the indirect method and
reflects the consolidated net cash flow
broken down into operating, investing,
and financing activities.
Cash flow from operating activities
includes inflows from the year’s
operations adjusted for non-cash
operating items, changes in working
capital, financial income received, financial
expenses paid, realised foreign currency
translation gains and losses and income
tax paid. Operating cash flow include also
short-term lease payments, payments for
leases of low-value assets and variable
lease payments.
Cash flow from investing activities
includes payments in respect of the
acquisition or divestment of enterprises
and financial assets as well as the
purchase, development, improvement or
sale of intangible assets and property,
plant and equipment. In addition to this,
cash flow from investing activities also
includes movement in receivables from
associates and joint ventures, and
customer loans.
Cash flow from financing activities
includes payments to and from
shareholders and the raising and
repayment of non-current and current
debt and lease liabilities. Repayment of
lease liabilities are included as well.
Cash flow in currencies other than the
functional currency is recognised at
average exchange rates for the months of
the year unless they deviate significantly
from actual exchange rates on the
transaction dates.
Cash and cash equivalents are cash less
overdrafts, which consist of uncommitted
bank facilities that often fluctuate from
positive to overdrawn. Any short-term
bank facilities that are consistently
overdrawn are considered cash flow from
financing activities.
9.1 Group accounting policies – continued
Insights and highlights The WDI companies Corporate information Financial report
Section 9
Basis for preparation
105 William Demant Invest • Annual Report 2022
Key figures and financial ratios
Financial ratios are calculated in
accordance with “Recommendations and
Ratios” from CFA Society Denmark.
On the preparation of the consolidated
financial statements, Management makes
a number of accounting estimates and
judgements. These relate to the
recognition, measurement and
classification of assets and liabilities. Many
items can only be estimated rather than
accurately measured. Such estimates are
based on the most recent information
available on preparation of the financial
statements. Estimates and judgements
are therefore reassessed on an ongoing
basis. Actual figures may, however,
deviate from these estimates. Any
changes in accounting estimates will be
recognised in the reporting period in
which such changes are made.
Significant accounting estimates and
judgements are described in the individual
notes to the consolidated financial
statements as outlined below:
1.1 Revenue
1.6 Inventories
3.3 Leases
3.5 Impairment (identification of CGUs)
5.2 Deferred tax
6.1 Acquisition of enterprises and
activities
Specific accounting estimates and
judgements are described in each of the
individual notes to the consolidated
financial statements as outlined below:
1.1 Revenue
1.2 Employees
1.5 Inventories
1.6 Trade receivables
1.7 Customer loans
3.1 Intangible assets
3.2 Property, plant, and equipment
3.3 Leases
5.2 Deferred tax
6.1 Acquisition of enterprises and
activities
7.1 Provisions
7.2 Other liabilities
9.1 Group accounting policies –
continued
9.2 Accounting estimates and
j
udgements
EBITDA Operating profit before amortisation, depreciation and
impairment losses.
EBIT Operating profit
Free cash flow Cash flow from operating activities (CFFO) and investing activities
(CFFI) before acquisitions and disposals of enterprises,
participating interests and activities.
Net interest-
bearing debt (NIBD)
Net amount of borrowings and lease liabilities less interest-
bearing receivables and cash.
Gross margin
Gross profit *100
Revenue
EBITDA margin
Operating profit before amortisation, depreciation and
impairment losses *100
Revenue
EBIT margin
Operating profit *100
Revenue
Return on equity
Average equity attributable to William Demant Invest A/S'
shareholder adjusted for share buy-backs
Profit for the year attributable to William Demant Invest A/S'
shareholder
Equity ratio
Equity
Assets
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106 William Demant Invest • Annual Report 2022
Parent
Parent financial
statements
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106 William Demant Invest • Annual Report 2022
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107 William Demant Invest • Annual Report 2022
Parent income statement
(DKK million)
Note 2022 2021
Revenue
- -
Fee income
1 1
Administrative expenses
10.1/10.2
-31 -46
Operating profit (EBIT)
-30 -45
Financial income
10.3
1,422 2,387
Financial expense
10.3
-355 -89
Profit before ta
x
1,037 2,253
Tax on profit for the year
69 23
Profit for the year
1,106 2,276
Financial report
Parent financial statements
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108 William Demant Invest • Annual Report 2022
Parent balance sheet at 31 December
(DKK million)
Note 2022 2021
Equity and liabilities
Share capital
4 4
Retained earnings
12,750 11,644
Total equit
y
12,754 11,648
Debt to William Demant Foundation
10.5
2,000 -
Non-current liabilities
2,000 -
Debt to credit institutions
4,983 2,756
Debt to William Demant Foundation
10.5
23 2,018
Payable joint taxation
98 138
Income tax
135 -
Other liabilities
4 30
Current liabilities
5,243 4,942
Liabilities
7,243 4,942
Equity and liabilities
19,997 16,590
Contingent liabilities
10.6
Proposed distribution of net profit
10.7
Related parties
10.8
Shareholder
10.9
Events after the balance sheet date
10.10
Parent accounting policies
10.11
(DKK million)
Note 2022 2021
Assets
Investments in subsidiaries
7,240 7,190
Investments in associates and joint ventures
9,753 8,319
Receivables from joint operations
- 814
Other investments
2,698 104
Financial assets
10.4
19,691 16,427
Non-current assets
19,691 16,427
Receivable joint taxation
306 147
Income tax
- 16
Receivables
306 163
Current assets
306 163
Assets
19,997 16,590
Financial report
Parent financial statements
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109 William Demant Invest • Annual Report 2022
Parent statement of changes in equity
(DKK million)
Share-
Capital
Other
reserves
Total
equity
Equity at 1.1.2021 4 9,368 9,372
Profit for the year - 2,276 2,276
Equity at 31.12.2021 4 11,644 11,648
Profit for the year 1,106 1,106
Equity at 31.12.2022
4 12,750 12,754
Financial report
Parent financial statements
Insights and highlights The WDI companies Corporate information Financial report
Section 10
Notes to parent
financial statements
110 William Demant Invest • Annual Report 2022
Section 10
Notes to parent
financial statements
Insights and highlights The WDI companies Corporate information Financial report
110 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Section 10
Notes to parent
financial statements
111 William Demant Invest • Annual Report 2022
In 2022, the basic remuneration of a
member of the parent’s Board of Directors
was DKK 250,000 (DKK 250,000 in 2021).
The Chairman of the Board of Directors
receives three times the basic
remuneration and the Deputy Chairman
one and a half time the basic
remuneration.
The remuneration of the Executive Board
in William Demant Invest A/S includes
cash remuneration, short-term benefits
and social security. Short-term benefits
include a bonus scheme based on the
development in the fair value of the net
assets within the William Demant Invest
A/S and Demant Foundation.
10.1 Employees
10.2 Fees to parent's auditors
appointed at the annual general
meeting
(DKK million)
2022* 2021
Statutory audit
0.4 0.5
Total
0.4 0.5
*PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab (PricewaterhouseCoopers Denmark) was appointed
as Group auditor at the annual general meeting in March 2022, replacing Deloitte Statsautoriseret
Revisionspartnerselskab.
10.3 Net financial items
(DKK million)
2022 2021
Dividends from subsidiaries
180 -
Dividends from associates
95 153
Interest from joint operations
- 35
Dividends and impairment of associates, net
682 -
Gain on disposal of joint operations
91 -
Other financial income
18 -
Gain on disposal of shares in Demant A/S
356 2,199
Financial income
1,422 2,387
Valuation adjustment of other investments -231 -9
Interest to parent
-82 -70
Other financial expenses
-42 -10
Financial expenses -355 -89
Net financial items 1,067 2,298
(DKK million)
2022 2021
Wages and salaries
15.6 37.0
Social security costs
0.2 0.3
Employee costs 15.8 37.3
Average number of full-time employees 11 10
Remuneration to Executive Board included in
employee costs:
Fixed base salary
5.9 5.9
Short-term cash incentive
- 22.8
Executive Board
5.9 28.7
Fees to Board of Directors
1.9 1.9
Insights and highlights The WDI companies Corporate information Financial report
Section 10
Notes to parent
financial statements
112 William Demant Invest • Annual Report 2022
As of 1 January 2021, Revenio has been
transferred from Other Investments to
Investments in associates and joint
operations.
10.4 Financial assets
2022
2021
Investments
in
subsidiaries
Receivables
from
subsidiaries
Investments
in
associates
and joint
operations
Receivables
from joint
operations
Other
investments
Investments
in
subsidiaries
Receivables
from
subsidiaries
Investments
in
associates
and joint
operations
Receivables
from joint
operations
Other
investments
(DKK million)
Cost at 1.1.
7,190 - 8,319 814 113 7,311 105 4,595 979 454
Foreign currency translation adjustments
- - - 1 - - 6 - 1 -
Additions during the year
85 - 822 37 2,908 - - 2,721 35 113
Disposals during the year
-35 - -48 -852 -83 -121 -111 -82 -201 -
Disposals relating to divestments
- - -22 - - - - - - -
Dividends and impairments of associates, net
- - 682 - - - - - - -
Transferred to/from other items
- - - - - - - 1,085 - -454
Cost at 31.12.
7,240 - 9,753 - 2,938 7,190 - 8,319 814 113
Value adjustments at 1.1. - - - - -9 - - - - 631
Value adjustments during the year
- - - - -231 - - - - -9
Transferred to/from other items
- - - - - - - - - -631
Value adjustments at 31.12. - - - - -240 - - - - -9
Carrying amount 31.12. 7,240 - 9,753 - 2,698 7,190 - 8,319 814 104
Insights and highlights The WDI companies Corporate information Financial report
Section 10
Notes to parent
financial statements
113 William Demant Invest • Annual Report 2022
10.5 Debt to
William Demant
Foundation
Of the total debt to William Demant
Foundation of DKK 2,023 million (DKK
2,018 million in 2021) DKK 2,000 million
(DKK 2,000 million in 2021) is in
convertible promissory notes, DKK 23
million (DKK 18 million 2021) is accrued
interest.
The notes are convertible into ordinary
shares of William Demant Invest A/S, at
the option of William Demant Foundation,
or repayable on 1 June 2027. The
conversion rate is the fair value at the
time of conversion.
The loan was refinanced in 2022 and is
classified as non-current liabilities.
10.6 Contingent
liabilities
William Demant Invest A/S is the
administration company of the joint taxation
arrangement with the Danish subsidiaries in
the William Demant Invest Group and is
under an unlimited and joint liability regime
for all Danish tax payments and withholding
taxes on dividends, interests and royalties
from the jointly taxed entities.
10.7 Proposed
distribution of net
profit
(DKK million)
2022 2021
Retained earnings
1,106 2,276
Total 1,106 2,276
10.8 Related
parties
William Demant Foundation,
Kongebakken 9, 2765 Smørum, Denmark,
is the only related party with a controlling
interest. Related parties with significant
influence are the Company’s Executive
Board, Board of Directors and their
related parties.
Furthermore, related parties are
companies in which the above persons
have significant interests.
During 2022, William Demant Invest A/S
acquired shares in Demant A/S from
William Demant Foundation amounting to
DKK 84 million (DKK 0 million in 2021) and
sold shares in Demant A/S to William
Demant Foundation amounting to DKK 91
million (DKK 0 million in 2021). Further,
William Demant Invest A/S acquired
shares in INVISIO AB from William Demant
Foundation amounting to DKK 167 million
(DKK 13 million in 2021), and sold shares
in INVISIO AB to William Demant
Foundation amounting to DKK 83 million
(DKK 0 million in 2021)
During the year, William Demant Invest
A/S sold shares in Demant A/S to Demant
A/S amounting to DKK 0 million (DKK
1,506 in 2021).
The transactions were conducted on an
arm’s length basis.
10.9 Shareholder
The entire share capital is owned by
William Demant Foundation,
Kongebakken 9, 2765 Smørum,
Denmark.
10.10 Events after
the balance sheet
date
Please refer to Note 8.4 Events after the
balance sheet date in the consolidated
financial statements.
Insights and highlights The WDI companies Corporate information Financial report
Section 10
Notes to parent
financial statements
114 William Demant Invest • Annual Report 2022
The financial statements for the Parent,
William Demant Invest A/S, are presented
in accordance with the provisions of the
Danish Financial Statements Act for class
C (large) entities.
The parent financial statements are
presented in Danish kroner (DKK), which is
also the functional currency for the
Parent. The accounting policies are the
same as last year.
The Parent’s accounting policies in respect
of recognition and measurement are
generally consistent with the Group’s
accounting policies. The instances in
which the Parent’s accounting policies
deviate from those of the Group are
described in the following.
Income Statement
Tax
The Parent is administration company in
the joint taxation with the Danish
subsidiaries in the William Demant Invest
Group. Current income tax is allocated to
the jointly taxed Danish companies in
proportion to their taxable incomes.
The Parent’s tax for the year is comprised
by tax of the Parent’s taxable income for
the year, changes to deferred tax and any
adjustments for tax on taxable income for
previous years. Tax for the year is
recognised in the income statement,
unless the tax relates to items recognised
in equity.
Balance Sheet
Investments in subsidiaries, associates and
joint operations
Investments in subsidiaries, associates
and joint operations are recognised and
measured at cost. If cost exceeds the
recoverable value, write down to the
lower recoverable value will be made.
Dividends from investments in
subsidiaries, associates and joint
operations are recognised as income in
the Parent’s income statement under
financial income in the financial year in
which the dividends are declared.
Other investments
On initial recognition, other investments
are measured at cost. Subsequently, they
are measured at their fair values on the
balance sheet date and any changes in fair
values are recognised in the income
statement under net financial items.
Receivables from subsidiaries and joint
operations.
Receivables from subsidiaries and joint
operations is recognised at amortised cost
which in all material aspect is nominal
value.
10.11 Parent accounting policies
Insights and highlights The WDI companies Corporate information Financial report
Notes to consolidated
financial statements
115 William Demant Invest • Annual Report 2022
Section 11
Subsidiaries,
associates and joint
operations
115 William Demant Invest • Annual Report 2022
Insights and highlights The WDI companies Corporate information Financial report
Insights and highlights The WDI companies Corporate information Financial report
Notes to consolidated
financial statements
116 William Demant Invest • Annual Report 2022
Subsidiaries in Vision RT Ltd.
Company Interest
Vision RT Ltd, U
K
Parent
Vision RT Inc, USA 100%
Vision RT Australia Pty Ltd, Australia 100%
Vision RT India Private Limited, India 100%
Aurora Computer Systems Ltd, U
K
100%
Vision RT GmbH, Germany 100%
Vision RT (Shanghai) Limited, China 100%
Vision RT (Beijing) Limited, China 100%
Vision RT Poland Sp. Z o.o. 100%
Subsidiaries in
Ö
ssur hf.
Company Interest
Össur hf., Iceland Parent
APC Prosthetics PTY Ltd, Australia 100%
Össur Americas Inc, USA 100%
Össur Australia PTY Ltd, Australia 100%
Össur Canada Inc, Canada 100%
College Park Industries, Inc, USA 100%
OCH Ortopedi AS, Norway 100%
Ortos A/S, Denmark 100%
Össur Deutschland Gmbh, Germany 100%
Össur Europe BV, Netherlands 100%
Össur France Sarl, France 100%
Össur Hong Kong Ltd, Hong Kong 100%
Össur Iceland ehf, Iceland 100%
Össur Mexico S. de R.L. de C.V, Mexico 100%
Össur Nordic AB, Sweden 100%
Össur Prosth. & Rehabilition Co Ltd, China 100%
Össur UK Ltd, U
K
100%
TeamOlmed AB, Sweden 100%
Touch Bionics Ltd, U
K
100%
Subsidiaries, associates and joint
operations in William Demant Invest
A/S
Company Interest
Demant A/S, Denmark 57%
Össur hf., Iceland 52%
Vision RT Ltd., United Kingdom 89%
J
eudan A/S, Denmark 42%
Vitrolife AB, Sweden 29%
CellaVision AB, Sweden 20%
Revenio Group Oyj, Finland 16%
Anpartsselskabet af 7.11.2022 33%
INVISIO AB, Sweden 10%
GN Store Nord A/S 10%
Insights and highlights The WDI companies Corporate information Financial report
Notes to consolidated
financial statements
117 William Demant Invest • Annual Report 2022
The list includes the Group's active companies
Subsidiaries, associates and joint ventures in Demant Group
Company Interest
Oticon A/S, Denmark* 100%
Oticon AS, Norway* 100%
Oticon Denmark A/S, Denmark* 100%
Oticon GmbH, Germany 100%
Oticon Limited, United Kingdom* 100%
Oticon Medical A/S, Denmark* 100%
Oticon Medical AB, Sweden 100%
Oticon Medical Maroc, Morocco* 100%
Oticon Medical, LLC, United States 100%
Oticon Polska Sp. z o.o., Poland* 100%
Oticon Portugal, Unipessoal LDA, Portugal 100%
Acoustic Metrology Limited, United Kingdom 100%
ACS Audika Sp. z.o.o., Poland 100%
Acustica Sp. z o.o., Poland* 100%
Advanced Hearing Providers, LLC, United States 100%
Akoustica Medica S.A., Greece* 100%
Amplivox Limited, United Kingdom 100%
Audika AB, Sweden* 100%
Audika AG, Switzerland* 100%
Audika ApS, Denmark* 100%
Audika Australia Pty. Ltd., Australia 100%
Audika GmbH, Germany 100%
Audika Groupe S.A.S., France* 100%
Audika Management GmbH, Germany 100%
Audika New Zealand Limited, New Zealand* 100%
Audika NV, Belgium* 100%
Audio Seleccion S.L., Spain* 100%
Audiology Services Company USA, LLC, United States 100%
AudioNet America, Inc., United States 100%
Audmet Australia Pty Ltd., Australia 100%
Audmet Canada Ltd., Canada 100%
Company Interest
Audmet New Zealand Limited, New Zealand* 100%
Audmet Oy, Finland* 100%
Audmet Srl, Italy* 100%
AudPractice Group, LLC, United States 100%
Beijing Shengwang Yuanbo Commerce and Trade Co., Ltd., China* 100%
Bernafon (UK) Limited, United Kingdom* 100%
Bernafon A/S, Denmark* 100%
Bernafon AB, Sweden* 100%
Bernafon AG, Switzerland* 100%
Bernafon Hörgeräte GmbH, Germany 100%
Bernafon, LLC, United States 100%
Birdsong Hearing Benefits, LLC, United States 100%
Centro Auditivo Telex Ltda., Brazil 100%
CQ Partners, LLC, United States 100%
Danacom Høreapparater A/S, Denmark* 100%
Demant Australia Pty Ltd, Australia* 100%
Demant Business Services Poland Sp. z o.o., Poland* 100%
Demant Iberica, S.A., Spain* 100%
Demant Italia S.r.l., Italy* 100%
Demant Japan K.K., Japan* 100%
Demant Korea Co., ltd., Korea* 100%
Demant Malaysia Sdn. Bhd., Malaysia* 100%
Demant México, S.A. de C.V., Mexico 100%
Demant Nederland B.V., Netherlands* 100%
Demant New Zealand Limited, New Zealand* 100%
Demant Operations Poland Sp. z o.o, Poland 100%
Demant Operations S.A. de C.V., Mexico 100%
Demant Sales Strategic Accounts A/S, Denmark* 100%
Demant Schweiz AG, Switzerland* 100%
Demant Singapore Pte Ltd, Singapore* 100%
Demant South Africa (Pty) Ltd., South Africa* 100%
Demant Sweden AB, Sweden* 100%
*Directly owned by the Parent for 100%.
Insights and highlights The WDI companies Corporate information Financial report
Notes to consolidated
financial statements
118 William Demant Invest • Annual Report 2022
Subsidiaries, associates and joint ventures in Demant Group
Company Interest
Etymonic Design Inc., Canada* 100%
Fluorite Sp. z o.o., Poland 100%
Great Lakes Provider Network, LLC, United States 100%
Guymark UK Limited, United Kingdom 100%
Hearing Screening Associates, LLC, United States 100%
HearingLife Canada Ltd., Canada* 100%
Hidden Hearing (N.I.) Limited, United Kingdom 100%
Hidden Hearing (Portugal), Unipessoal, Lda., Portugal* 100%
Hidden Hearing International Plc, United Kingdom* 100%
Hidden Hearing Limited, Ireland* 100%
Hidden Hearing Limited, United Kingdom 100%
Hidden Hearing Properties Ltd, United Kingdom 100%
IDEA Isitme Sistemleri Sanayi ve Ticaret A.S., Turkey* 100%
Interacoustics A/S, Denmark* 100%
Interacoustics Pty Ltd, Australia 100%
Inventis North America Inc., United States 100%
Inventis S.r.l., Italy* 100%
Kuulopiiri Oy, Finland* 100%
Langer Hörstudio GmbH, Germany 100%
LeDiSo Italia S.r.l., Italy* 100%
Maico Diagnostics GmbH, Germany* 100%
Maico S.r.l., Italy* 100%
Mediszintech Audiologica Kft., Hungary* 100%
MedRx, Inc., United States 100%
Micromedical Technologies, Inc., United States 100%
Moser Hörgeräte GmbH, Germany 100%
Neurelec S.A.S, France* 100%
NexGen Healthcare Management Inc., Canada** ***
100%
Northeast Hearing Instruments, LLC, United States 100%
Oticon (Shanghai) Hearing Technology Co., Ltd., China* 100%
Oticon, Inc., United States 100%
Company Interest
Demant Technology & Innovation Centre Sdn. Bhd., Malaysia* 100%
Demant Technology Centre Sp. z o.o., Poland* 100%
DGS Diagnostics Sp. z o.o., Poland 100%
Diagnostic Group LLC, United States 100%
Diatec A/S, Denmark* 100%
Diatec AG, Switzerland* 100%
Diatec Diagnostics GmbH, Germany* 100%
Diatec Polska Sp. z o.o., Poland* 100%
Diatec Shanghai Medical Technology Co., Ltd., China* 100%
Diatec Spain, S.L.U., Spain* 100%
DSEA A/S, Denmark 100%
e3 Diagnostics, Inc., United States 100%
Entomed MedTech AB, Sweden* 100%
EPOS Audio Australia Pty Ltd, Australia 100%
EPOS Audio India Private Limited, India 100%
EPOS Audio Ireland Limited, Ireland 100%
EPOS Audio Singapore Pte. Ltd., Singapore 100%
EPOS Audio UK Ltd., United Kingdom 100%
EPOS Austria GmbH, Austria 100%
EPOS Belgium BV, Belgium 100%
EPOS Canada Ltd., Canada* 100%
EPOS France S.A.S, France 100%
EPOS Germany GmbH, Germany 100%
EPOS Group A/S, Denmark* 100%
EPOS Hong Kong Limited, Hong Kong 100%
EPOS Japan Kabushiki Kaisha, Japan 100%
EPOS Netherlands B.V., Netherlands 100%
EPOS Sales A/S, Denmark 100%
EPOS Sweden AB, Sweden 100%
EPOS Switzerland AG, Switzerland 100%
EPOS USA, Inc., United States 100%
*Directly owned by the Parent for 100%
**Subconsolidated group of companies, including companies with non-controlling interests.
***Subconsolidated group of companies, including associated companies.
The list includes the Group's active companies
Insights and highlights The WDI companies Corporate information Financial report
Notes to consolidated
financial statements
119 William Demant Invest • Annual Report 2022
Subsidiaries, associates and joint ventures in Demant Group
Company Interest
Philiear Inc., Philippines* 100%
Phonic Ear Inc., United States 100%
Prodition S.A.S, France* 100%
Ritter Hörgeräte GmbH, Germany 100%
SBO Hearing A/S, Denmark* 100%
SBO Hearing US, Inc., United States 100%
SBO International Sales A/S, Denmark* 100%
SES Isitme Cihazlari Sanayi ve Ticaret A.S., Turkey* 100%
Shanghai YinPo Technology Co., Ltd., China 100%
Shin Nihon Hochoki Kabushiki Kaisha, Japan* 100%
Sonic AG (Sonic SA) (Sonic Ltd.), Switzerland* 100%
Sonic Equipment Australia Pty Ltd, Australia 100%
Sonic Innovations, Inc., United States 100%
Synapsys S.A.S, France 100%
The Hearing Center of Northeast Pennsylvania, LLC, United States 100%
Udicare S.r.l., Italy* 100%
Value Hearing (Pty) Ltd., South Africa* 100%
Van Boxtel Hoorwinkels B.V., Netherlands 100%
WDH Germany GmbH, Germany* 100%
WDH UK Limited, United Kingdom* 100%
WDH USA, Inc., United States* 100%
Workplace Integra Inc., United States 100%
Audilab SAS, France* ** *** 95%
Medton Ltd., Israel 90%
Colorado Hearing, LLC, United States 80%
Destin Hearing Associates, LLC, United States 70%
ADB Sarl, France 60%
Audika Alpes Sarl, France 60%
Institut de l'Audition du Var Sarl, France 60%
European Hearing Care (Myanmar) Limited, Myanmar 50%
Conc. Maico - Centro Otoacustico Marchesin S.r.l., Italy 50%
Company Interest
Audiovita S.r.l., Italy 49%
Exclusive Hearing Limited, United Kingdom 49%
Ma.Bi.Ge Bioacustica S.r.l., Italy 49%
Microfon S.r.l., Italy 49%
Otic Hearing Solutions Private Limited, India 49%
Audiology Concepts, LLC, United States 40%
Audition Bahuaud SAS, France 40%
Dencker A/S, Denmark 40%
Vocechiara S.r.l., Italy 40%
Acustica Umbra S.r.l., Italy 35%
Centro Audioprotesico Lombardo S.r.l., Italy 35%
Euro Hearing LLC, Uzbekistan 35%
Fonema Italia S.r.l., Italy 30%
HearWell Audiology Clinics Inc., Canada 25%
Hemmerich Hearing Center Ltd., Canada 25%
HIMSA A/S, Denmark 25%
Imperial Hearing Limited, United Kingdom 25%
Acufon S.r.l., Italy 20%
Acustica Marche S.r.l., Italy 20%
Audiovox Preduzece Za Izradu I Promet Ortopedskih Pomagaladoo, Serbia 20%
Bontech Research CO D.o.o., Croatia 20%
Solaborate Inc., United States 20%
The Hearing Doctors of Georgia, LLC, United States 20%
K/S Himpp, Denmark 18%
HIMSA II A/S, Denmark 17%
HIMSA II K/S, Denmark 15%
Himpp A/S, Denmark 13%
HearBase Limited, United Kingdom 10%
*Directly owned by the Parent for 100%
**Subconsolidated group of companies, including companies with non-controlling interests.
***Subconsolidated group of companies, including associated companies.
The list includes the Group's active companies
Insights and highlights The WDI companies Corporate information Financial report
Notes to consolidated
financial statements
120 William Demant Invest • Annual Report 2022
Phone +45 3917 7300
Fax +45 3927 8900
CVR no. 27761291
Editing, design and production:
William Demant Invest A/S