2023
Annual and
Sustainability Report
CONTENTS
Annual review 3
Orthex in brief 4
Key figures 5
Highlights of the year 6
Review by the CEO 7
Purpose and values 10
Strategy 11
Sustainability 14
Key sustainability actions 2023 15
Sustainability at Orthex 16
Environmental: Reducing emissions 22
Social: Safe workplace and tested products 32
Sustainability governance: Part of everyday work 37
Governance 41
Corporate governance statement 2023 42
Board of Directors 46
Management Team 50
Remuneration report 2023 54
Financial review 58
Board of Directors’ report 60
Financial statements 82
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Orthex in brief
Orthex is a leading Nordic houseware company. Orthex designs, produces,
markets, and sells practical and durable household products with a mission
to make consumers’ everyday life easier. Orthex main consumer brands are
SmartStore™ in storage products, GastroMax™ in kitchenware and Orthex™
in home and plant care categories. In addition, Orthex sells kitchen utensils
under the Kökskungen™ brand.
Orthex has more than 100 years of experience of household products, and it
has approximately 800 customers in more than 40 countries. Orthex’s core
geographic market is Europe. Orthex is headquartered in Espoo, Finland and
listed on Nasdaq Helsinki Ltd (ORTHEX).
Orthex aims to be the industry forerunner in sustainability. Our high-quality,
safe, and durable products are made with care and timeless design. They
are made for long-term use and are recyclable in all our markets. We are
actively increasing the share of renewable and recycled raw materials in our
products. At the same time, we continuously strive to reduce the carbon
footprint of our products and operations and are aiming towards carbon
neutral production by 2030.
Product categories:
Storage Kitchen Home
& yard
Plant care
1)
Invoiced sales of SmartStore, GastroMax, Orthex, and Kökskungen
branded products accounted for 91% of total invoiced sales in 2023.
~300 employees
>
40
customer countries
Sustainability focus
>
90%
own brand sales
1)
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Key figures
11.2%
Net sales growth
outside Nordics
281
Personnel,
FTE during the year
8. 9%
Storage category
growth
1.8
66.4
75.9
88.7
84.0
85.9
2019 2020 2021 2022 2023
Net sales, EUR million
6.5
12.3
9.3
5.2
10.8
2019 2020 2021 2022 2023
Operating profit, EUR million
7.6
12.9
11.0
5.5
10.9
2019 2020 2021 2022 2023
Adjusted EBITA, EUR million
11.4 %
17.0 %
12.4 %
6.5 %
12.7 %
2019 2020 2021 2022 2023
Adjusted EBITA margin, %
66.4
75.9
88.7
84.0
85.9
2019 2020 2021 2022 2023
Net sales, EUR million
6.5
12.3
9.3
5.2
10.8
2019 2020 2021 2022 2023
Operating profit, EUR million
7.6
12.9
11.0
5.5
10.9
2019 2020 2021 2022 2023
Adjusted EBITA, EUR million
11.4 %
17.0 %
12.4 %
6.5 %
12.7 %
2019 2020 2021 2022 2023
Adjusted EBITA margin, %
66.4
75.9
88.7
84.0
85.9
2019 2020 2021 2022 2023
Net sales, EUR million
6.5
12.3
9.3
5.2
10.8
2019 2020 2021 2022 2023
Operating profit, EUR million
7.6
12.9
11.0
5.5
10.9
2019 2020 2021 2022 2023
Adjusted EBITA, EUR million
11.4 %
17.0 %
12.4 %
6.5 %
12.7 %
2019 2020 2021 2022 2023
Adjusted EBITA margin, %
66.4
75.9
88.7
84.0
85.9
2019 2020 2021 2022 2023
Net sales, EUR million
6.5
12.3
9.3
5.2
10.8
2019 2020 2021 2022 2023
Operating profit, EUR million
7.6
12.9
11.0
5.5
10.9
2019 2020 2021 2022 2023
Adjusted EBITA, EUR million
11.4 %
17.0 %
12.4 %
6.5 %
12.7 %
2019 2020 2021 2022 2023
Adjusted EBITA margin, %
kgCO2
eq./kg
Our relative carbon footprint
(2022: 1.8 kgCO2 eq./kg)
2023 2022 2021 2020 2019
Net sales, EUR million 85.9 84.0 88.7 75.9 66.4
Adjusted EBITA, EUR million 10.9 5.5 11.0 12.9 7.6
Adjusted EBITA margin, % 12.7% 6.5% 12.4% 17.0% 11.4%
Operating profit, EUR million 10.8 5.2 9.3 12.3 6.5
Net debt / Adjusted EBITDA 1.5 2.8 1.7 2.3 3.5
Earnings per share, basic (EUR) 0.39 0.12 0.35 0.47 0.12
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ISCC PLUS certificate
Gnosjö factory granted with the
ISCC PLUS certificate facilitating
the use of renewable materials
applying the mass balance
approach.
Circular economy
Extension of product portfolio
made from recycled plastic
including the new under-bed
storage solution SmartStore™
Bedroller 60 L.
Highlights of the year
Transparent
reporting
Ecovadis awarded Orthex
with a silver medal for its
sustainability performance.
Orthex’s climate work was
recognised with a top score A-
in the CDP reporting.
Mass balance
We extended the usage of
renewable and recycled
raw materials produced by
applying the mass balance
approach in several new
product ranges.
Digitalisation
A big development
step in digitalisation –
transition to cloud-based
ERP system.
In-store excellence
More than 160 SmartStore™
new point of sale solutions
together with major retail
chains and introduction of
SmartStore™ campaign truck in
several countries.
JuneMay
2023
September October November December
International
organisation
Strengthening of our
international sales
organisation for
example by recruiting
a sales manager for
Benelux countries.
The issuing Certification Body is responsible for the accuracy of this document.
Version / Date:
1 (no adjustment)
/
1
7
.03.2022
Page
1
of
2
ISCC PLUS Certificate
Certificate Number:
ISCC
-
PLUS
-
Cert
-
SE205
-
00000
376
DNV Business Assurance Sweden AB,
Box 6046, Solna, Sweden
certifies
that
Oy Orthex Finland Ab
Immulantie 166
,
08500
Lohja
,
Finland
complies with the requirements of the certification system
ISCC
PLUS
(International Sustainability and Carbon Certification)
Place of the audit
(if different from the legal address of the system user as stated above; only
applicable for traders and traders with
storage):
n.a.
This certificate is valid from
1
7
.0
3
.2022
to
1
6
.0
3
.2023
.
The
site
of the system user is
certified as
:
Co
-
Processing
The
scope of the certificate includes the
following chain of custody options
:
(not applicable for paper traders)
Mass Balance
Stockholm
17
.03.2022
Place and d
ate
of issue
Stamp, Signature
of issuing party
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Review by the CEO
Orthex purpose is to improve consumers’ everyday life with practical, beautiful, and
sustainable products. The aim is to be the most sustainable choice for the consumer
by offering timelessly designed, high-quality, safe, and long-lasting products, reducing
the carbon footprint of our operations and products, and increasingly sourcing
renewable and recycled raw materials.
The business climate in 2023 was volatile, characterized by careful consumer behaviour, cost
inflation, consumer and customer uncertainty, and weak exchange rates in Sweden and Norway.
Inflation pressure slowed down consumer demand during the first half of the year. Demand
started to recover towards the end of the year and the overall performance was returning to more
normal levels.
Strong profit performance
Orthex’s profit performance was strong with almost doubled adjusted EBITA compared to 2022
despite challenging market conditions. The adjusted EBITA for 2023 was 10.9 million euros (5.5).
A more normal raw-material price-level, the recovering demand and efficiently adapting the
operations to changing volumes affected the result positively. Orthex also received 0.7 million euros
in electricity price support in Sweden. Aided by the strong finish of the year, the net sales growth
pace shows a full-year growth of 2.3% and net sales of 85.9 million euros (84.0). Including constant
currency effects, net sales grew by 5.3%. The net sales growth in the second half of the year was
driven by strong in-store activities, new product and customer listings, and normalising demand in
the Nordics.
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The Board of Directors proposes a dividend payout of 0.21 euros per share,
totalling 3.7 million euros and 54.1% of net profit meaning an increase in
both dividends and in percentages compared to the year 2021 which was the
previous normal year in respect of profit performance.
Sales by geography
Our growth strategy with a focus on accelerated European and international
growth with a strong commitment to sustainability is progressing according
to plan. All functions and activities are designed to support our growth
ambition to become the number one brand in the storage category in Europe
while strengthening our Nordic category leader position. Orthex’s full-year
invoiced sales in our European strategic markets grew by 16.4%. Invoiced
sales outside the Nordic markets accounted for 21.9% (20.2) of Orthex’s
invoiced sales.
In 2023, invoiced sales in the Nordics were 68.7 million euros (68.5). Sales
were affected by careful consumer behaviour during the first half, and weak
currencies throughout the whole year. During the second half, we could see
a recovery in demand and customer purchasing behaviour compared to a
weaker year-end period in 2022. The growth that started in the second half
of the year finally resulted in a slight full-year invoiced sales increase of
+0.4% thanks to the very strong finish of the year.
Sales by product category
The Storage category continued to grow at a good pace of 8.9% compared
to the previous year. Orthex is focusing on launching several new products
in the Storage category. A bedroller made from recycled material was a
remarkable new launch. The Storage category accounted for 68.2% of total
invoiced sales in 2023.
Kitchen, Plant Care and Home & Yard categories, traditionally strong in the
Nordics, declined because of the careful Nordic customer and consumer
behaviour. Invoiced sales in the Kitchen category declined 6.2% and in
the Plant Care category 13.5%. The Home & Yard category also declined
by 13.4%. In the fourth quarter, there was a strong recovery in the Kitchen
category driven by campaigns in the Nordics and a new international
customer listing.
Accelerated sales with instore visibility
We have put additional focus on instore visibility to drive shopper action in
the store. A milestone is the implementation of more than 160 SmartStore™
shelf solutions together with international retailers. The food storage product
branding was consolidated under the SmartStore™ brand for increased
marketing and sales efficiencies to promote international demand. During the
year, we have grown with existing big retail chains and signed new important
customer agreements outside the Nordics. We have also succeeded to
increase our assortment in several important retail chains and continued
strengthening our international commercial team, with more local resources
in France, the UK, and the Benelux.
Our growth strategy is
progressing according
to plan.
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Our journey towards carbon neutrality
Orthex’s main sustainability target is to aim towards carbon neutrality in
production by 2030. The Science Based Targets initiative (SBTi) has approved
Orthex’s near-term science-based emissions reduction target, which means
that Orthex’s climate targets are aligned with the target to keep global
warming below 1.5°C.
We started to use renewable raw materials by applying a mass balance
approach in selected series of our products. This makes it possible for us to
offer consumers a more sustainable choice that reduces the usage of fossil-
based plastic. Overall, our target is to increase the share of renewable and
recycled raw materials in our production to 80% by 2030. In 2023, the share
increased to 15.8% (2022: 13.6%).
During the year, Orthex participated in the Ecovadis ESG assessment
for the first time and was awarded with a silver medal for sustainability
performance. In addition, our climate work was recognised with a Leadership
level A- top score in the global CDP rating for the first time. In May, Orthex’s
Gnosjö factory was granted an ISCC PLUS certificate, that will enable the
company to extend the usage of ISCC PLUS certified renewable raw materials
applying the mass balance approach in the production.
Collaborating with customers and
partners
Orthex participates in two large research projects for the development of
recycled and renewable plastics. During 2023, Orthex tested recycled plastic’s
suitability for food contact, and the results are promising. The significant
investment in research supports Orthex’s 2030 carbon neutrality target and
the target to increase the use of sustainable raw materials. As we increase
the share of renewable and recycled raw materials in our production and
proceed towards carbon neutrality, we can further support our customers in
achieving their own sustainability targets.
We measure customer satisfaction with a biannual customer survey. In the
2023 survey, we improved our customer satisfaction rate to 4.08 (2021: 3.93),
on a scale from 1 to 5. I am happy to see that our customers were extremely
pleased with the activity and help from their key contact persons.
Digitalisation and e-commerce drive
growth
A big development step in digitalisation was taken in terms of the ERP
(Enterprise Resource Planning) system – from an on-premises ERP system
to a cloud-based Infor M3 ERP system. The implementation was a big
achievement for the whole team involved in the migration and I am especially
proud of the speed and commitment to success shown by everyone involved.
In our growth strategy, we have defined e-commerce as an avenue for
growth. Our presence on different e-commerce platforms and in retail
customers’ web shops has developed fast and the strategy is bringing solid
sales growth and strengthened brand visibility.
I am pleased with our strong performance and very proud of the teamwork,
individual efforts, and commitment of our employees in delivering solid
steps on our growth strategy. During turbulent times, it is important to fully
align everyone in the organisation behind a successful strategy and adapt to
fast-changing conditions. I want to thank everyone at Orthex for their strong
contribution throughout the year and all our customers and stakeholders for
the trust in Orthex that contributed to a successful 2023. We are eager and
ready to take on 2024.
Alexander Rosenlew
CEO
We improved our customer
satisfaction rate to 4.08.
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Purpose and values
We are inspired by our purpose: Improve everyday
life with sustainable and practical products.
We develop, design, produce, and market functional household products to
customers and consumers. Our offering is based on appealing and innovative
concepts, responsibly produced, long-lasting products of high quality and
strong brands.
Constant improvement through
innovation
We believe in development through continuous
improvement.
Professional implementation
We work hard to meet our customers’ and consumers’
expectations every day.
Respectful teamwork
We strive to minimise our impact on the environment
and actively promote sustainability.
Sustainable and responsible
development
We are committed to developing our employees,
showing respect, and promoting health and safety.
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Orthex’s key priorities in its growth strategy are to become the number one brand in the storage product
category in Europe and strengthen its position as a leading Nordic houseware company with strong brands
and sustainable products.
Solid actions to keep
winning in the
Nordics
Accelerating growth in
the international markets
through strong customer
collaboration
Accelerating growth
through the online
retail channel
Market consolidation
provides growth
opportunities
1 2 3
Orthex aims to grow the Storage product category in
the Nordics through campaigns, expansion of in-store
concepts and launch of novelties.
Orthex targets growth in the Kitchen product category
by focusing on sustainable products and distribution
expansion opportunities.
Orthex expects major growth opportunities in the
international markets and its go-to-market strategy
is delivered through local presence with a key account
approach. The key focus is to improve the distribution of
Orthex products in Europe, invest in strategic customers
and new customer acquisition.
The company takes advantage of the e-commerce
growth opportunities by strengthening relationships
with e-commerce companies and working closely with
retailers executing a multi-channel strategy.
Orthex anticipates that acquisitions could
be an important opportunity to reach the
company’s strategic objectives. Orthex intends
to carefully evaluate acquisition opportunities
in Europe. The synergies achieved through
acquisitions are typically related to production,
sales and marketing, logistics, product category
expansions, overheads, and a stronger
bargaining position.
In 2023, international markets
accounted for 21.9 percent of
Orthex invoiced sales.
In 2023, the Nordics accounted
for 78.1 percent of Orthex
invoiced sales.
Strategy
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Commercial factors supporting the growth strategy
• Accelerating efforts to grow the Storage category in
international markets utilising the company’s long experience
in the Nordics.
• The close distribution linkage between Kitchen and Storage
categories enables cross-selling by leveraging Orthex’s existing
customer network.
CLEAR CATEGORY
STRATEGY
FOCUSING ON STORAGE
• Orthex aims to be the most sustainable choice for the consumer
by offering high-quality, safe, and long-lasting products with
timeless design. Orthex is reducing the carbon footprint of its
production and products by increasing the use of renewable and
recycled raw materials.
• Orthex believes that it has potential to become a preferred
supplier of sustainable products.
• Innovation plays an important role in Orthex growth strategy.
• When developing new products and concepts Orthex will
focus on improving consumers’ everyday life with sustainable
and practical products with timeless design.
GROWTH THROUGH INNOVATIONSSHOWING THE WAY IN SUSTAINABILITY
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Long-term
financial
targets
Sales growth
Pay-out ratio
An annual organic net sales growth to
exceed 5 per cent on a Group level,
and 10 per cent outside the Nordics
(growth in local currencies).
Leverage
Net debt to adjusted EBITDA below
2.5x. Leverage may temporarily exceed
the target (for example, in conjunction
with acquisitions).
Profitability
Improving EBITA margin
(adjusted for items affecting
comparability) exceeding 18 per
cent over time.
Distribution of a stable and over
time increasing dividend with a pay-
out of at least 50% of net profit on
a bi-annual basis.
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Annual and Sustainability Report 2023
Key sustainability actions 2023
On our journey towards
carbon neutral production,
Gnosjö factory was granted
the ISCC PLUS certificate.
We increased the share
of renewable and recycled
materials (used kg) to 15.8%
(2022: 13.6%).
We were awarded a silver
medal for our sustainability
performance in EcoVadis
ESG assessment, and our
climate work earned a top
score A- in CDP reporting.
Our customer satisfaction
rate improved to 4.08,
on a scale from 1 to 5
(2021: 3.93).
Our employees’ safety
at work rate (LTIF)
improved and was 6
(2022: 9).
Read more Read more
Read more
Read more
Read more
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Annual and Sustainability Report 2023
Sustainability at Orthex
Sustainability is a core element in implementing Orthex’s growth strategy and
key objectives as we strive to be the number one brand in storage products
in Europe and strengthen our position as a leading houseware company in
the Nordics. Sustainability is a key factor in all decision making at Orthex and
a significant driver of our development and investment agenda. For example,
a prerequisite for all new product investments is that the material is either
recycled or renewable.
The main building blocks of our approach to sustainability are our products,
sustainable raw materials, and our target towards carbon neutrality. Orthex’s
high-quality, safe, and durable products are made with care and timeless
design. They are made for long-term use and are recyclable in all our
markets. We are actively increasing the share of renewable and recycled
raw materials in our products. We continuously strive to reduce the carbon
footprint of our operations and products and are aiming towards carbon
neutral production by 2030¹). With these priorities, our goal is to be the
industry forerunner in sustainability.
Several initiatives around the world strive to reduce the use of single-use
plastic products that can end up as waste in nature or the oceans. Orthex
does not make single-use products. On the contrary, we believe that plastic
is a valuable raw material that should be used to make long-lasting, reusable,
and recyclable products, such as our own.
As stated in the EU’s European strategy for plastics, “plastics are an
important material in our economy and daily lives”. Orthex’s products and
resource-efficient operations contribute to the EU’s target to accelerate the
transition to a circular plastics economy.
Orthex supports the Plastics Roadmap for Finland which identifies measures
to reduce the harm caused by plastic waste, enhance the recycling and
product design of plastics, create conditions for circular innovations, and
reduce the dependency on fossil-based raw materials by advancing bio-
based solutions.
Long-term structural changes require strong cooperation across the
value chains. Together with partners, Orthex is involved in two significant
research projects, the goals of which are to increase the use of recycled and
renewable plastics. In line with Orthex’s sustainability strategy, both projects
support our 2030 carbon neutral production target and the target to increase
the use of sustainable raw materials.
1)
Target includes Orthex’s Scope 1 and 2 greenhouse gas emissions and relevant parts of Scope 3
emissions. More details later in this section.
Orthex belongs to the group of international pioneering companies
committed to science-based climate targets set by the Science-Based
Targets initiative (SBTi). SBTi has approved Orthex’s near-term science-based
emissions reduction target, which means that Orthex’s climate targets are
aligned with the target to keep global warming below 1.5°C in accordance
with the Paris Agreement.
Our climate targets are
aligned with the target to
keep global warming below
1.5 degrees.
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Annual and Sustainability Report 2023
Materiality assessment
Orthex’s sustainability work and sustainability strategy are based on a
stakeholder materiality assessment to ensure that our sustainability priorities
focus on the most relevant sustainability topics. The latest sustainability
materiality assessment was conducted in 2022, and the materiality was
reviewed during 2023 as part of the annual strategy review with no major
changes.
We ensure that our sustainability
strategy is in line with stakeholders’
expectations.
In the materiality matrix, the sustainability topics are presented based on
their importance to our stakeholders and on the impacts on Orthex business.
The matrix is based on 2022 materiality assessment, before the sustainability
strategy was restructured to follow ESG (Environmental, Social and
Governance) structure. The next materiality assessment will be conducted
according to the Corporate Sustainability Reporting Directive’s (CSRD) double
materiality principles.
Orthex materiality assessment
Impacts on Orthex business
ENVIRONMENTAL SOCIAL ECONOMICAL
Recycling of plastic
Sustainable
raw materials
Production scrap
Carbon emissions
Energy
Product safety
Employee health
and well-being
Zero accidents
Requirements for suppliers
Nordic production
Sustainability targets of customers
Profitability and growth
Sustainability reporting
Biodiversity
Importance to stakeholders
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Annual and Sustainability Report 2023
Orthex’s sustainability strategy
Orthex’s sustainability strategy is confirmed annually for a three-year period.
In 2022, we renewed our sustainability strategy and the key sustainability
aspects were restructured to follow ESG structure. In 2023 sustainability
strategy review, no major changes have been implemented.
Environmental
We focus on continuously minimising our impact on the environment and
climate, and our key target is aiming towards carbon neutral production by
2030. Our key environmental topics are environmentally sustainable choices,
resource efficiency and responsible production and consumption.
Social
Caring for our people, product safety and customer satisfaction are the
key elements of our social responsibility. Orthex promotes a zero-accident
vision and culture, and we measure our performance with Lost-Time Injury
Frequency (LTIF) rate. In 2023, we introduced a new employee satisfaction
KPI, Engagement Index.
Governance
Orthex’s way of conducting business goes beyond compliance with applicable
laws and regulations - high ethical standards and integrity are present in
everything we do. Our Code of Conduct and Supplier Code of Conduct define
the key principles for how we engage in business.
Orthex’s sustainability strategy, relevant sustainability topics and set targets
and indicators are illustrated in the following two pages.
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Annual and Sustainability Report 2023
KPIs
Topics
Caring for our people
Product safety
Customer satisfaction
Ethical business practices
Transparency
Environmentally sustainable choices
Resource efficiency
Responsible production and consumption
Sustainable materials
Energy efficiency
Production scrap
Reducing carbon footprint
Employee health and safety
Zero accidents culture
Employee satisfaction
Safe and tested products
Customer satisfaction
Ethics and integrity
Sustainable supply chain
Transparent reporting and commitment
ENVIRONMENTAL SOCIAL GOVERNANCE
PURPOSE: Improve everyday life with sustainable, practical products
Orthex designs, produces, markets and sells functional household products to customers and
consumers. Our offering is based on appealing and innovative concepts, responsibly produced,
long-lasting products of high quality and leading brands.
3. Promoting circular economy
4. Cooperation across the value chain
1. Sustainable raw materials share 2030: 80%
2. Energy efficiency and renewable energy
Actions:
VISION
#1 Brand in storage in Europe and the leading houseware company in the Nordics.
Showing the way in sustainability in the industry.
TARGET 2030
Towards carbon neutral production
MISSION
Sustainability strategy
Aspects
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Annual and Sustainability Report 2023
Targets and indicators
Orthex’s sustainability targets and key performance indicators (KPIs)
Aspect Topic KPI Indicator Target Result 2021 Result 2022 Result 2023
E
ENVIRONMENTAL
Environmentally
sustainable choices
Sustainable materials
Share of renewable and recycled materials (used kg) 2030 > 80% 14.1% 13.6% 15.8%
Increase sales of products made from renewable
and recycled materials (%)
> 2 times net sales growth
30.0%
(Net sales 16.9%)
5.0%
(Net sales -5.2%)
67.0%
(Net sales 2.3%)
Resource efficiency
Energy efficiency
Improve 1% annually, baseline 2022
(kWh/produced kg)
< 1.059 in 2025 1.10 0 1.092 1.025
Production scrap Scrap rate 2024 < 1.42% 0.98% 0.96% 0.87%
Responsible
production and
consumption
Reducing carbon footprint
CO2 calculation for our operations (tCO2 eq./a)
Towards carbon neutral production
by 2030
33,937
1)
25,309
1)
27 217
CO2 per produced kg (kgCO2
eq./a) Reduce annually 2.1
1)
1.8
1)
1.8
S
SOCIAL
Caring for our
people
Employee health and safety Sickness absence rate (factory employees) < 5% 6.6% 6.5% 6.1%
Zero accident culture LTIF
2)
< 10
3)
N/A 9 6
Employee satisfaction
4)
Engagement index
4)
Improve annually
4)
NEW NEW 79 / 100
Product safety Safe and tested products All food contact materials tested 100% 100% 100% 100%
Customer
satisfaction
Customer satisfaction Customer satisfaction rate Improve 3.93 / 5 3.93 / 5 (2021) 4.08 / 5
G
GOVERNANCE
Ethical business
practices
Ethics and integrity Share of employees committed to Code of Conduct 100% N/A N/A 100%
Sustainable supply chain
Suppliers aligned with Supplier Code of Conduct
(A+B suppliers)
100% N/A N/A 88%
Share of suppliers that are BSCI members
(in risk countries), repr. 90% of purchase value
100% 75% 94% 100%
Transparency
Transparent reporting and
commitment
CDP reporting Minimum B-level annually N/A B A-
Commitment to Science Based Targets initiative
Net-Zero Target validated and
approved by 2025
N/A N/A In progress
Achieved In progress Actions needed New target
1)
Data is restated with updated information: update in emission factor of Euro-pallets (Scope 3, Purchased goods and services).
2)
Corrected that the figure covers all group employees.
3)
Target updated, target for 2023 < 20.
4)
New KPI, indicator and target replacing KPI “Work environment evaluation” due to unavailability of the previous employee survey.
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UN Sustainable Development Goals
Orthex supports all seventeen UN Sustainable Development Goals (SDGs).
Based on identified priority sustainability topics, we have determined the
most relevant SDGs for Orthex, and how we can best contribute to them.
We have determined
the most relevant SDGs
for Orthex.
SDG 8 Decent work and
economic growth
We care for our employees and the people who work for our partners and
suppliers. We strive for sustainable growth by providing environmentally
sustainable choices and enhancing energy efficiency.
SDG 9 Industry, innovation,
and infrastructure
We produce sustainable and safe products. In our operations, we
continuously seek to improve energy efficiency.
SDG 12 Responsible production
and consumption
In our operations, we are committed to reducing our greenhouse gas
emissions, controlling our chemical use and waste management in a
responsible manner, and minimising scrap. Our products are recyclable
and increasingly made with renewable and recycled materials, and
we are committed to responsible sourcing. The foundation of our
sustainability work lies upon ethical business conduct, compliance
with legislation, certified environmental management systems, and
sustainability reporting.
SDG 13
Climate action
We are committed to reducing our greenhouse gas emissions and aim
towards carbon neutral production by 2030.
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We focus on reducing
our emissions.
Environmental:
Reducing emissions
Orthex strives to continuously minimise its impact on the environment and
climate. The products we manufacture are of the highest quality and are
meant to last for years or even decades. Even after a product has worn out, it
can be recycled, and the material reused for some other purpose.
All our factories are ISO 14001 and 9001 certified for environmental and
quality management, respectively. These certificates were renewed in 2023.
We have made significant efforts to increase energy efficiency and have been
able to reduce energy consumption year after year.
Our focus areas within responsible production and consumption are reducing
our greenhouse gas emissions, increasing the share of renewable and
recycled raw materials in our production and promoting the recycling of
plastics.
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Our road map towards
carbon neutrality by 2030
We have set an ambitious target and are aiming towards carbon neutrality
in our production by 2030. This is why we have simulated our road map
towards carbon neutrality, taking into account Scope 1, 2 and 3 emissions.
In addition to direct greenhouse gas emissions from our operations
(Scope 1) and the production of purchased energy (Scope 2), we have
included the following relevant indirect emissions (Scope 3) in our target:
purchased goods and services; fuel and energy-related activities; upstream
transportation and distribution and waste generated in operations.
Our Scope 2 emissions are zero since we use renewable hydropower
electricity in all our factories. As almost all our remaining emissions
originate from the raw materials (Scope 3), we will focus our efforts on
increasing the share of renewable and recycled raw materials in our
production. Key drivers enabling us to move towards our goal are further
adoption of the mass balance approach (read more later in this section of
the report), innovations, new sources of raw materials, and development of
plastic recycling technology.
In 2023, we have continued our systematic work towards carbon neutrality
target with extending usage of ISCC PLUS certified renewable raw
materials applying mass balance approach in the production into new
products: SmartStore™ Vision dry food keepers and SmartStore™ Snack
lunch boxes as well as GastroMax™ measuring cups. This way we can offer
consumers more sustainable products.
2030
We focus
on Scope 3
emissions
Actions to improve resource efficiency
Mass balance approach
We will continue implementing a mass balance approach to make it
possible for us to offer consumers more sustainable products.
100%
renewable
energy
Zero Scope 2
emissions
Raw material
development
Orthex road map towards carbon neutrality by 2030
Innovations
We invest in researching new sources of raw materials.
Recycling technology
We closely follow development of plastic recycling
technologies e.g. chemical recycling.
2020
CO2 emissions
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Most of our greenhouse gas emissions originate from purchased goods
and services, such as raw material extraction, and the end-of-life of sold
products, like the incineration of products for energy. The latter is excluded
from our 2030 carbon neutrality target. This is because of our limited ability
to influence consumer behaviour – whether they recycle or discard our
products after use – but also because it is difficult to evaluate how the
recycling of plastic develops.
As our products will be in use for decades, it is likely that by the time they
reach their end-of-life stage, most plastic will be fully recycled. Even if we
have limited influence on consumer recycling behaviour, we proactively
promote the recycling of plastics in our communication channels and we
actively participate in plastic recycling awareness-raising activities. In
addition, we make considerable investments to find new methods and raw
material solutions. Read more about our investments in research later in
this report.
In 2023, our relative carbon footprint that eliminates the impact of business
growth remained at the same level at 1.8 kg CO2 eq./kg (2022: 1.8 kg CO2
eq./kg). Due to volume growth, our total emissions increased to 27,217
tCO2-e (2022: 25,309 tCO2-e). We continue our work to increase the share
of renewable and recycled raw materials in our production in order to reduce
emissions.
SCOPE 2
SCOPE 3
Waste generated
in operations
EoL sold
products
Production of
purchaced energy
Fuel and energy
related activities
SCOPE 1
Direct emissions
at production
plants
Upstream
transportation
and distribution
Purchased
goods and
services
Carbon footprint 2020-2023 (tCO2 eq.)
Year Scope 1 Scope 2 Scope 3 Total
kgCO2 eq./kg
of plastic products EoL sold products
2020 72 3,052 28,742
1)
31,866
1)
2.2
1)
27,28 0
2021 66 0 33,871
1)
33,937
1)
2.1
1)
30,203
2022 74 0 25,235
1)
25,309
1)
1.8
1)
26,534
2023 66 0 27,151 27, 217 1.8 30,047
1)
Data is restated with updated information: update in emission factor of Euro-pallets
(Scope 3, Purchased goods and services).
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Sustainable raw materials
Increasing the share of renewable and recycled raw materials
Orthex promotes sustainability in all choices made along the life cycle of a
product. We only use durable and recyclable raw materials while minimising
their use and optimising logistics. Reducing greenhouse gas (GHG) emissions
and sourcing more and more renewable and recycled raw materials are at
the core of our strategy and sustainability vision.
Our target is to increase the share of used renewable and recycled raw
materials in our production to 80% by 2030. In 2023, this share increased to
15.8% (2022: 13.6.%). In addition, the growth in sales of products made from
renewable and recycled materials was significantly faster than the overall net
sales growth. The growth was due to the fact that we switched to using ISCC
PLUS certified, renewable, and recycled raw materials produced by applying
the mass balance approach in several product ranges.
Renewable raw materials
Plastics made from renewable raw materials, also often called bio-based,
reduce our dependency on limited fossil resources and have a significantly
smaller carbon footprint than fossil-based plastics. Orthex launched its
first products made from renewable raw materials already in 2016, and
we calculated the carbon footprints of all our bio-based product lines in
2020. For example, the carbon footprint of our BIO food storage products,
which include sugarcane-based raw material, is reduced by more than 80%
compared to only using conventional plastic. The reduction is explained
by the carbon dioxide (CO2) generated in manufacturing being largely
compensated for by the CO2 absorbed during plant growth.
We currently use three renewable raw materials for our BIO products:
wood fibre, sugarcane, and castor oil. All these products have OK Biobased
certifications, which assures the share of bio-based raw materials in the
products. We buy the renewable raw materials from reliable suppliers who
we have long relationship with and require that the raw materials have
applicable certificates.
Recycled raw materials
We want to create value out of what has been discarded, which is why we
have used recycled plastic in our production since the 1990s. For example,
the carbon footprint of our SmartStore™ products made with recycled
content is reduced by up to 60% compared to only using conventional
plastic. The SmartStore™ Recycled product line is also certified according
to the Blue Angel ecolabel which sets strict standards for environmentally
friendly products and services.
Orthex was among the first consumer goods companies in the world to start
using plastic packaging recycled by consumers as raw material for new
products in 2017, as soon as technology allowed it. Today, this plastic comes
from EuCertPlast-certified suppliers in Europe. The EuCertPlast certification
(European Certification of Plastics Recycling) is designed to ensure the
traceability and transparency of recycled plastics in the European market. It
verifies the quality and sustainability of plastic recycling processes.
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The carbon footprint
of our products made
with recycled content is
reduced by up to 65%.
The long cooperation between Orthex and Fortum created a new
application for Fortum Circo® PP-T recycled plastic material:
Orthex SmartStore
TM
Collect product range grew with stylish black
sorting bins.
The use of recycled materials and sustainable production
have always been important values to Orthex. Currently, the
prerequisite for all new products is that the material is either
recycled or biobased.
The collaboration between Orthex and Fortum started as early as
2016 when Fortum’s plastic refinery in Riihimäki was established
with the purpose of converting consumers’ plastic waste into
recycled plastic grades that suit different purposes. One of these
plastic grade solutions was Fortum Circo®, which Orthex started
to use to produce flowerpots and buckets.
The collaboration between the two companies has been ongoing
ever since in the form of joint development projects and new
applications. One of Fortum Circo’s most important qualities is its
low carbon footprint: the footprint for Fortum Circo® PP-T grades
is over 65% smaller than the footprint of virgin polypropene.
ORTHEX AND FORTUM COLLABORATE TO CREATE NEW APPLICATIONS FOR RECYCLED
PLASTIC
We also use recycled plastic from industrial sources. This material originates
from reliable EuCertPlast certified suppliers as well. The suppliers make
the raw material by collecting post-industrial plastic waste from various
sources, and the mix may vary. Post-industrial plastic waste is generated for
example in industrial packaging, injection moulding, thermoforming, plastic
manufacturing, and industrial processing.
The plastic in our products can be recycled approximately 10 times. In
practice, however, recycled plastic is always a mix of plastics of different ages
(some recycled more, some fewer times). This means that while a certain
part of the plastic mass can be recycled ten times, the product as a whole
can be recycled almost indefinitely.
In addition, we use plastic raw material made from old fishing nets to
produce household buckets and other household products. Fishing nets are a
major source of plastic ocean waste. Reusing them as raw material prevents
ocean pollution and considerably reduces the carbon footprint of the new
products, compared to virgin plastic material. We use Ocean Action label
material in our products made from old fishing nets, which is the world’s first
label material made from ocean bound plastic waste.
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Mass balance approach to drive the change
As transparent plastic and food contact with plastic are still difficult or
even impossible to achieve with recycled plastic, we have started to use
renewable raw materials by applying mass balance approach in our products
to make it possible for us to offer consumers more sustainable products.
The mass balance approach means that renewable materials are mixed with
fossil materials in the raw material production process as presented in the
illustration below. This reduces the amount of fossil-based plastic in the
world.
In 2023, the ISCC PLUS certificate of Orthex’s Lohja factory was renewed
and Gnosjö factory was granted the ISCC PLUS certificate. This allowed us
to extend the usage of renewable and recycled raw materials produced
by applying the mass balance approach in several new product ranges:
SmartStore™ Vision dry food keepers, SmartStore™ Snack lunch boxes
and GastroMax™ measuring cups. We also continued using renewable raw
materials applying mass balance approach in the production of our popular
ISCC certified
renewable and/
or recycled
feedstock
Fossil
feedstock
Raw material
manufacturing
process
Product
manufacturing
process
Mixing of renewable/recycled
and fossil raw materials.
By keeping track of quantities, the
renewable/recycled raw material can
be allocated to specific products.
Fossil raw material
Conventional
product
Mixed raw material
ISCC certified product
Physically mixed raw material with documented
and verified quantity of renewable/recycled
content throughout the value chain.
The ISCC PLUS certified content is
allocated to this product by applying
mass balance approach. Mass balance
products carry the ISCC logo.
ISCC PLUS certified mass balance approach
Mass balance approach is a method to document and track renewable and/or
recycled content throughout complex manufacturing systems to the end product.
SmartStore™ Compact and Compact Clear storage boxes. Each product has
on average at least 20% of renewable or recycled raw material allocated to
it, according to the mass balance approach. This way we can offer consumers
more sustainable products. Applying mass balance approach supports
Orthex’s long-term carbon neutrality target, and our target to increase the
share of sustainable raw materials in our production to 80% by 2030.
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Investing in the research of
sustainable raw materials
We invest in research to find new methods and raw materials
We want to provide consumers with the opportunity to choose more
environmentally friendly products, and to invest in research to find new
methods and raw material solutions. Orthex is involved in two significant
research projects, the goals of which are to increase the use of recycled and
renewable plastics. In line with Orthex’s sustainability strategy, both projects
support our 2030 carbon neutrality target and the target to increase the use
of sustainable raw materials.
Orthex launched a significant research project for the development of future
recycled plastic products in September 2022. The project will be carried out
in cooperation with partners and will last until the end of 2024. The goals of
the project are to build an ecosystem aimed at increasing the use of recycled
plastic and to generate new information about the use of recycled plastic in
different applications, especially in products suitable for food contact. The
project is part of the extensive and pioneering Borealis SPIRIT (Sustainable
Plastics Industry Transformation) programme supported by Business
Finland, which aims to transform the plastics industry towards a more
sustainable future.
As a part of the SPIRIT programme, Orthex is researching in collaboration
with Fortum and other partners whether recycled plastic could be used in
products suitable for food contact. The results of the product development
and tests are encouraging and indicate that recycled plastic is, at least
in principle, suitable for food contact. However, starting production on a
profitable industrial scale would require e.g., further development of sorting
technology. Challenges are also posed by the closed cycle required for
product safety, i.e., ensuring that recycled plastic intended for food contact is
made from plastic packaging that was originally used for packaging food.
In 2024, the research project will focus on the development of sorting
technology, improvement of traceability, and further review of the
legal restrictions.
Since January 2023, Orthex also participates in a large cooperation project
of seven years to promote the circular economy of plastics. The PlastLIFE
SIP-EU project piloted by the Ministry of the Environment and the Finnish
Environment Institute (SYKE) is part of the EU’s LIFE program. As part of the
PlastLIFE SIP-EU project, the goal of Orthex’s work package is to find new
potential, environmentally friendly plastic raw materials, test raw materials
in production and as finished products, and then bring new products to the
market.
During the year, Orthex has mapped potential new raw material suppliers and
tested new plastic raw materials. As one example of the results of this work,
Orthex launched to the market the new SmartStore
TM
Bedroller product, which
is manufactured using a new recycled plastic raw material.
Transforming the plastics
industry towards a more
sustainable future.
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As a part of the SPIRIT programme, Orthex and Fortum are
researching whether Fortum Circo® recycled plastic could be
used in products suitable for food contact, if it was made from
plastic food packaging collected from consumers.
A specified amount of food packaging waste of different colours
was separated from other plastic packaging waste at Fortum’s
plastic refinery in Riihimäki. The packages were then washed,
shredded, and granulated into three different coloured recycled
plastic granules. At Orthex’s Lohja factory, granulates were made
into freezer boxes. When the freezer boxes were tested, they
passed all the same laboratory tests that Orthex regularly uses to
ensure the safety and suitability of its products for food contact.
The executed pilot study shows that even mechanically recycled
material is safe to use and can even be used in food packaging.
The carbon footprint of the Fortum Circo®-PP grade used in the
project is more than 70% lower than that of virgin polypropylene
and was therefore a sustainable choice as a raw material.
The research results were promising, but the start of industrial
use will require further research and improvements in the sorting
technology. Going forward, the research project will focus on the
development of sorting technology, improvement of traceability,
and further review of the legal restrictions.
PIONEERING R&D COLLABORATION
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Resource efficiency
Our efficient operations save natural resources
Orthex’s operations are resource efficient and have minimal impact on the
environment, including local biodiversity. In optimizing resource efficiency,
our focus areas are improving energy efficiency and decreasing production
waste, or scrap. Our objective is always to save natural and other resources.
A significant way to improve energy efficiency in our operations is to replace
old machines with energy efficient ones. Investments in energy efficient
machines have contributed to reducing Orthex’s energy consumption
significantly as described in the table below. We adjusted our energy
efficiency target for the period of 2023–2025 to improve energy efficiency
1% annually (baseline year 2022). Since we reached the target set for the
year 2025 already in 2023, we will set a new target for energy efficiency
during 2024.
Progress in energy consumption 2019-2023 (kWh/kg)
Year Outcome Target
2019 1.158 1.196
2020 1.131 1.145
2021 1.10 0 1.106
2022 1.092 1.073
2023 1.025 1.081
We optimise our production in a way that minimises the emergence of poor-
quality products or production scrap. If scrap is created despite our measures,
mainly due to colour or material change during production, we are able to
reuse the vast majority of it as raw material elsewhere in production. This
effectively eliminates the creation of actual scrap. Our target is to achieve a
production scrap rate (cost of scrap products compared to produced volume)
of 1.42% by 2024. In 2023, we managed to reduce scrap even further so that
the scrap rate was only 0.87%. As the scrap rate has been under the target
set for the year 2024 for several years already, we will set a new target for
scrap rate during 2024.
Progress in reducing production scrap 2019-2023
(cost of scrap products compared to produced volume,
%)
Year Outcome Target
2019 1.47% 1.50%
2020 1.09% 1.50%
2021 0.98% 1.50%
2022 0.96% 1.47%
2023 0.87% 1.45%
All our factories have closed-loop systems for water use. Our operations
use cooling water in their manufacturing processes, and the water is fully
recycled in production. No wastewater is created in our operations, and no
water is released into nature.
As our products only contain the raw material and colour, we use minimal
volumes of chemicals in our production. Some chemicals are used for other
purposes, for example for cleaning. We also follow the Substitute It Now (SIN)
list to control the chemicals included in the making of our raw materials.
The SIN-list is a database of chemicals likely to be restricted or banned in
the EU. The purpose of this list is to support organisations in identifying and
replacing substances of high concern, based on the criteria defined in REACH,
the EU’s chemical regulation.
No wastewater is created in
our operations, and no water
is released into nature.
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Biodiversity
Our biodiversity impacts come from our supply chains
Orthex’s own operations are resource efficient and have minimal impact
on the environment, including local biodiversity. Our indirect biodiversity
impacts come from our supply chains, and together with the Finnish
Chemical Industry Federation and other member companies we have created
long-term, industry-level biodiversity vision, targets, and roadmap. The most
significant identified impacts of the chemical industry on biodiversity are
associated with raw material supply. These are greenhouse gas emissions,
changes in land- and water-use and natural resource use and exploitation.
During 2023, we continued the cooperation with the Finnish Chemical
Industry Federation to establish a common approach to measure and track
biodiversity impacts within the industry over the years.
Promoting the recycling of plastic
Orthex fully supports the notion that plastic belongs in circulation, not in
nature. Plastic is a valuable material and recycling plastic is a responsible act
for a sustainable future.
We proactively promote the recycling of plastics in our communication
channels and various events, while also engaging in dialogue with relevant
actors. In addition, we actively participate in awareness-raising activities,
organised by the Finnish Plastics Industries Federation, that seek to advance
the recycling of plastics in Finland. Orthex also cooperates with its customers
to raise awareness on recycling.
In 2023, Orthex promoted recycling of plastics in Finland by
participating in a nation-wide awareness-raising campaign, and
together with other industry operators collected almost 26,000
kilograms of hard plastics from consumers for recycling. This is
more than double the amount collected in the previous year’s
campaign.
Orthex has participated in this campaign ever since it was started
in 2018. The campaign highlights the importance of plastic
recycling and encourages people to recycle also hard plastic
items in addition to plastic packaging waste in their everyday
life. The 2023 campaign gathered broken hard plastic items from
households, like buckets, flowerpots, watering cans, and freezer
boxes. The discarded products will get a new life as recycled
plastic products or valuable energy, if feasible.
Orthex collected hard plastic items next to its Outlet in Lohja. Tom
Ståhlberg, Operations Director of Orthex Lohja factory and ESG
Advisor Katja Tolkki from Orthex as well as Vesa Kärhä, Managing
Director of Finnish Plastics Industries Federation, were collecting
the plastic items and giving recycling tips to consumers.
RECYCLING 26,000 KG OF HARD PLASTIC
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Social: Safe workplace and
tested products
Caring for our people
It is our responsibility to ensure that everyone feels safe and motivated
at work, enjoys their workplace, and can contribute through continuous
improvement. We do this by managing our occupational health and safety
risks, taking preventive measures, educating employees, and continuously
evaluating and improving our work. Leadership, commitment, and engaged
employees are key factors for us to succeed in this area and in general. We
follow up on our progress in monthly and annual reports and meetings.
Occupational safety
Orthex promotes a zero-accident vision and culture. We want to ensure
that all our employees have a safe workplace every day. Our focus is on
preventing safety incidents, which is why we encourage our employees to
report any near-misses, unsafe practices, or other safety observations. All
reports are carefully analysed, and actions are carried out to prevent similar
situations from re-occurring in the future.
To ensure the safe use of chemicals, we provide our employees with
bulletins that define the hazard level of the chemical and include relevant
instructions for use and protective gear. Our Supplier Code of Conduct also
requires our suppliers to ensure a safe and healthy working environment
for their employees.
Orthex’s operations are audited with ISO 45001 certification for
occupational health and safety (OHS). This certificate was renewed in
2023. The certificate provides requirements for and guidance on an OHS
management system. The goal is to enable organisations to provide safe
and healthy workplaces by preventing work-related injuries and health
issues, and to help improve their OHS performance.
In 2022, we introduced a new KPI for safety at work – Lost-Time Incident
Frequency (LTIF) rate. This KPI replaced the number of work-related
accidents and allows us to benchmark our safety performance, since this
KPI is widely used in peer companies. In this context, we defined the LTIF
target for the year 2023 regarding the entire personnel as less than 20
incidents per million work hours. We achieved this target already in 2022,
and in 2023, our employees’ LTIF rate further improved and was 6 (2022:
9). Therefore, we have set a new LTIF target: less than 10 incidents per
million work hours. This figure is clearly below the average LTIF rate in
Finnish industry.
Health and well-being
We believe that the health and well-being of our employees form an
important part of their working ability. To ensure this, Orthex offers its
employees high-quality employer-provided occupational health care. We
also promote an early support model that aims to prevent and detect
early any negative developments regarding employee health, safety,
and well-being. The model also enables managers to provide adequate
and timely support to employees and to promote dialogue as part of the
company culture.
We measure health and well-being of our factory employees with a key
performance indicator for sickness absence rate (% of total theoretical
working hours). The target for this indicator is to reach the level of below
5%. In 2023, sickness absences decreased to 6.1% (2022: 6.5%). It is a top
priority for us to ensure the health and safety of our employees and they
are instructed to stay at home with the slightest symptoms of an illness.
We also continue hybrid working practices where remote and in-office days
vary depending on the situation.
Employee feedback helps us build
a safe and motivating workplace.
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Human resources
In human resources, we focus on constantly developing an organisation
with highly motivated and skilled employees and competent leadership,
while enabling continuous improvement for all. Orthex’s people
management and development process is a key element in guiding
employee performance and development. All managers are evaluated by
their teams annually, and all employees are provided with a structured way
of giving and receiving feedback. This helps ensure that everyone has an
opportunity to influence their personal development.
Our employee performance reviews and employee survey, both conducted
annually, are also important elements of people management at Orthex.
In 2023, the annual employee survey was conducted based on a survey
provided by a new service provider. The survey focuses on the following
topics: engagement, leadership, team efficiency, organisational and social
work environment, and management. The employee survey’s response rate
was excellent 98% (2022: 94%).
Along with the new employee survey, we introduced a new employee
satisfaction KPI, Engagement Index, and set a target to improve it annually.
Based on the responses to eight questions related to motivation and
commitment, our employees’ Engagement Index was 79/100 in 2023. Due
to the new survey, we do not have a comparison figure from the year 2022.
Employee survey helps to identify employee strengths and areas of
improvement. Each team discussed the results of the survey and
drew up plans for development actions with regular follow-up of
their implementation.
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Diversity and inclusion
We promote equality and do not tolerate discrimination in any form. Our
employees have the freedom to organise themselves, and we respect trade
unions and personnel representatives and engage in open dialogue with
them. Our new employee survey also confirms that our employees feel
that people are treated fairly at work, regardless of sex, age, or cultural
background and that they can express themselves freely and safely and
feel part of a greater context.
We operate an internal reporting system for employees’ improvement
proposals, reports of deviation and close calls. Each proposal and report
is evaluated and documented. Based on these employee observations,
we have done numerous improvements in, for example, our ways of
working, work environment, and safety equipment. Our target is to
have each production site employee submit at least one development
proposal annually. In 2023, we got 148 development proposals meaning
that we didn’t quite reach our target. In 2024, we will be even more
active in communicating to our employees about the importance of
development proposals.
Men 53%
Women 47%
Employees
by gender
Men 53%
Women 47%
Employees
by gender
Members of the
Management Team
by gender
Men 75%
Women 25%
Members of the
Management Team
by gender
Men 75%
Women 25%
Production (165)
Warehouse (66)
Sales (53)
Admin (22)
Marketing (12)
Headcount
by function
Total 318
Production (165)
Warehouse (66)
Sales (53)
Admin (22)
Marketing (12)
Headcount
by function
Total 318
We promote equality
and do not tolerate
discrimination in any
form.
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Product safety
We always make sure our products are safe to use
Product safety is a top priority for Orthex. We take great pride in offering
products that are manufactured with safe, high-quality raw materials
that make them durable, functional, and safe to use. We comply with all
relevant product safety regulations and guidelines, such as the EU’s Good
Manufacturing Practices and regulation concerning Plastic Materials and
Articles Intended to Come into Contact with Food.
All our products made from conventional plastic are free of Bisphenol A (BPA)
and phthalates. Recycled plastic is also tested and safe, but as it originates
from multiple plastic products, it cannot be used in food-contact products.
Around 90% of Orthex’s products are manufactured at our factories in
Finland and Sweden. The remaining 10% are manufactured by carefully
selected suppliers, mainly in Far East. We only work with big, reliable
suppliers that follow all regulations for food contact materials and test their
raw materials. For more information about how we work with our suppliers,
see section Responsible sourcing.
Food-contact products
We follow all EU regulations concerning food contact products. All these
products are carefully tested on a regular basis in independent, accredited
laboratories to ensure product safety. For example, our food storage
products, excluding dry food keepers, undergo microwave testing to ensure
that no substances are released into food during heating. We specify these
details in our product-specific Declarations of Compliance. In addition,
symbols on our products and their packaging present which temperatures
the product endures and whether it is safe to use in, for example, the
microwave, fridge, or dishwasher. For more information about our product
symbols, visit www.orthexgroup.com.
Product safety
is a top priority
for Orthex.
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Customer satisfaction
We help our customers achieve their sustainability targets
Orthex serves various retail customers, such as traditional convenience
stores, specialty and hardware retailers, online stores, and department stores.
Consumers – the customers of our customers – are another important
stakeholder group to us. We believe that satisfied customers and consumers
will lead to a healthy and growing business. We work hard to meet or exceed
the expectations of our customers and consumers, and we seek to be the
preferred value-creating partner to our customers. As we increase the share
of renewable and recycled raw materials in our production and proceed
towards carbon neutrality, we can further support our customers in achieving
their own sustainability targets.
We actively participate in the sustainability work of our customers and
provide data and information for them so that they can use it in their
calculations and target setting.
90% of our products are manufactured in Finland and Sweden, which means
that the distance to our core markets – Nordic countries and Europe – is
short. This enables us to react to customer needs in a timely manner and
with less tiers in the customer’s supply chain. Our warehouse in Germany
increases the efficiency of our logistics in Europe.
We measure customer satisfaction with a survey every second year. The
latest survey was conducted in 2023 when we improved our customer
satisfaction rate to 4.08 (2021: 3.93), on a scale from 1 to 5. Our customers
were extremely pleased with the activity and help of their key contact
persons at Orthex thanking them with an excellent rate of 4.5 (2021:
4.17). Orthex customers were also asked to rate Orthex as a forerunner in
sustainability and the rate improved to 4.22 (2021: 3.88).
We believe that satisfied
customers and consumers
will lead to a healthy and
growing business.
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Sustainability governance:
Part of everyday work
Orthex’s sustainability strategy is confirmed annually for a three-year period
including the company’s key sustainability topics in environmental, social and
governance (ESG) areas. Key performance indicators and targets are defined
for each topic.
Sustainability work is led by the Board of Directors, the CEO, and the
Management Team. The Board of Directors approves the company’s
sustainability strategy and annually set sustainability targets and monitors
performance against the targets. The Management Team reviews the
company’s most important sustainability indicators monthly, and all
indicators once a year. Progress in sustainability is part of the CEO’s incentive
plan (read more in the Remuneration Report 2023).
The everyday sustainability work at Orthex is integrated into all our
operations and functions. Orthex’s sustainability strategy is implemented by a
dedicated team which monitors the progress of the set sustainability targets.
The team is led by the Chief Marketing and Sustainability Officer (CMSO) and
Operations Director (OD) who report directly to the CEO and are members of
the Management Team. The team comprises ESG Advisor and representatives
of our quality functions and, through the CMSO and OD, covers production,
procurement, marketing, sustainability, product development, and
commercial functions. The ESG Advisor is responsible for the development of
the company’s sustainability strategy and for coordinating and implementing
sustainability initiatives in line with the sustainability strategy. In addition,
in 2023 Orthex established an ESG working group to prepare for the entry
into force of the Corporate Sustainability Reporting Directive (CSRD), which
applies to the company from the beginning of 2025.
Orthex’s key sustainability-related policies and principles are:
• Orthex Code of Conduct
• Supplier Code of Conduct
• Anti-Corruption Policy
• Equal Rights & Opportunities Policy
• Quality, Environmental and Safety Policy
• Purchasing Policy
• HR Policy
We have a dedicated
team that is monitoring
the progress of set
sustainability targets.
Sustainability-related risks
Orthex’s risk management policy classifies risks into three groups: strategic,
operational, and financial risks. Orthex assesses ESG risks as part of
systematic risk management process. Sustainability-related risks are typically
covered under operational risks, where we review circumstances or events
that can cause harm to people, property, business, information, or the
environment.
The responsibility for implementing risk management lies with the
Management Team, and we strive to ensure that each employee
understands and can control risks within their operational environment
and responsibilities. We do this by, for example, implementing our Code of
Conduct (business ethics risks) and ISO 45001-certified management system
(occupational safety risks). All our employees also receive training in cyber
security, and competition law training is provided for employees in our
commercial functions. Read more about our risk management and ESG risks
in the Board of Directors’ Report for the year 2023.
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Ethics and integrity
We aim to go beyond compliance
Orthex operates internationally, and we strive to comply with all laws and
regulations applicable to our operations. However, our way to conduct
business goes beyond that: high ethical standards and integrity are present
in everything we do. Everyone at Orthex has a role in ensuring that the
company operates in an ethical and responsible manner, regardless of the
situation. We train and educate our employees to ensure that everyone
understands what ethical behaviour is and how to demonstrate it.
Orthex Code of Conduct applies to all our employees, and members of the
Management Team and the Board of Directors. The Code of Conduct defines
the key principles for how we engage in business, treat each other, and
safeguard Orthex’s assets. It is a tool that helps recognise ethical dilemmas
and presents ways to solve them. Our employees are encouraged to report
any breaches of the Code of Conduct to their supervisors or through Orthex’s
whistleblowing channel. In 2022, we set a new KPI to follow the share of
employees committed to Orthex Code of Conduct, and the target is 100%. In
2023, we achieved this target.
To promote accountability and foster a responsible company culture, we have
an internally operated whistleblowing channel. The channel is open to all
internal and external stakeholders and can be used anonymously. Employees
can use the channel via the company’s intranet pages and other stakeholders
through the company’s website (Whistleblowing - Orthex Group). The
employees and other stakeholders may use the channel to report suspected
Orthex’s way to conduct
business goes beyond
complying with laws and
regulations.
non-compliance with Orthex’s Code of Conduct or Supplier Code of Conduct;
breaches of legislation; or other regulations or guidelines. Such non-
compliance may include, for example, approval of a gift against guidelines,
fraud, forgery, conflicts of interest, or inappropriate behaviour by a colleague
or partner.
When Orthex receives a report on a suspected misconduct or non-
compliance, the matter is first investigated by the CEO and the relevant
Operations Director. After processing the report, the CEO determines
potential further actions, which can be corrective or disciplinary. The
whistleblowing reports are always processed in confidence, and the
whistleblower, their personal data, and the subject of the report are always
protected in accordance with the applicable whistleblower protection, data
protection and information security laws. We did not receive any reports
through the whistleblowing channel in 2023 nor the previous year.
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Responsible sourcing
We have strict sustainability requirements for our suppliers
Our suppliers are key partners for us in controlling and developing the
sustainability of our value chain. We aim for active engagement with and
continuous evaluation of our suppliers.
Supplier Code of Conduct
Our Supplier Code of Conduct (SCoC) presents Orthex’s sustainability
requirements for suppliers. Our suppliers must either commit to our Supplier
Code of Conduct or present their own code of conduct with similar or stricter
sustainability requirements compared to those in our SCoC. In 2022, we set a
target that all our A and B classified suppliers must align with Orthex Supplier
Code of Conduct. We did not fully reach that target yet in 2023: the result
was 88%. We will continue the dialogue with the few suppliers for whom the
process is still in progress.
In addition to engaging with our suppliers directly, we are a member of amfori
BSCI, a platform that enables companies to improve visibility over the social
performance of their supply chain. In countries that we have determined
high-risk, we monitor compliance with our SCoC in the supply chain through
amfori BSCI which carries out on-site inspections, audits, and periodic self-
evaluations of suppliers and their sub-contractors.
If the measures of amfori BSCI, or our own, reveal non-compliance with
our ScoC, we require the supplier to take corrective action and remedy
any adverse impacts on people or the environment, as well as ensure the
prevention of similar issues taking place in the future. The supplier is given
a timeframe to complete the agreed actions. If the supplier is unable to take
corrective, remedial, or preventative measures on its own, we will support in
developing and implementing an action plan.
If the supplier is unwilling to take corrective action, or there are repeated
and serious breaches of our ScoC, Orthex has the right to end the business
relationship. Orthex will not conduct any business with a supplier engaged in
violations of fundamental human rights, and we will immediately terminate
the business relationship with a supplier that commit such violations. These
zero-tolerance practices are listed in our ScoC.
Companies can join amfori BSCI to have access to a joint platform for
monitoring and auditing their supply chain. The platform is based on sharing
supplier information with members, which reduces time, effort, and costs for
individual companies but also increases consistency for buyers and suppliers.
Orthex has been a member of amfori BSCI since 2018. In 2022, we adjusted
our KPI for this area: we follow-up share of suppliers that are BSCI members
(in risk countries) and represent 90% of purchase value. The target is to cover
100% of these suppliers, and the result in 2023 was in line with the target at
100% (2022: 94%).
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Transparent reporting and commitment
We consider transparent reporting of our environmental, social and
governance (ESG) impacts and efforts an important part of how we do
business. We receive an increased number of various ESG related questions
and requests from our stakeholders, especially from customers and investors,
and we seek to increase transparency and provide reliable data on material
sustainability topics. Orthex reports on its sustainability efforts annually as a
part of Annual and Sustainability Reports. In addition, Orthex also contributes
to several third-party sustainability reports and commitments.
In 2023, Orthex participated for the first time in the EcoVadis ESG assessment
and was awarded with a silver medal for sustainability performance. The
result places Orthex globally among the top 18 percent of companies
assessed by EcoVadis.
Orthex also reports on risk management and management practices related
to climate change in Climate Disclosure Project’s (CDP) climate change
program annually. CDP is a non-profit organisation that runs the global
disclosure system for investors, companies, cities, and states to manage
their environmental impacts. In 2022, we achieved our target to reach the
Management level with a score B in CDP reporting. Outcome of the 2023
CDP reporting was disclosed in February 2024, and we reached the highest
Leadership level with a score A- meaning that we exceeded our target.
Companies receiving a Leadership level score must demonstrate both
awareness of their impact on the environment, and commitment to reduce
emissions to keep global warming below 1.5°C in accordance with
the Paris Agreement.
We reached the highest
Leadership level with a
top score A- in the CDP
climate reporting.
Orthex is certified Nasdaq ESG Transparency Partner. This certification is
used by Nasdaq to show engagement in the market transparency and raising
environmental standards. Sustainability is a core element in Orthex’s strategy
and with this reporting to Nasdaq’s ESG Data Portal we want to provide
quantifiable data on environmental, social and governance issues to investors
and other stakeholders.
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CORPORATE GOVERNANCE
STATEMENT 2023
Orthex Corporation (”Orthex” or ”the company”) is a public limited liability
company listed on Nasdaq Helsinki Ltd and headquartered in Espoo, Finland.
The company’s corporate governance complies with the company’s Articles
of Association and Corporate Governance Principles as well as rules and
regulations applicable to Finnish listed companies such as the Finnish Limited
Liability Companies Act (“Companies Act”) and Securities Markets Act, and
rules and regulations of Nasdaq Helsinki Ltd. The company also adheres
to the Finnish Corporate Governance Code 2020 (”CG Code”) issued by the
Securities Market Association. The CG Code is available on the association’s
website (www.cgfinland.fi).
This Corporate Governance Statement is issued as a separate statement
from the Board of Directors’ report, but it is published simultaneously with
the Board of Directors’ report and with the company’s financial statements,
sustainability report, and the remuneration report for the year 2023 on the
corporate website at www.investors.orthexgroup.com. As the company
has no audit committee, the company’s Board of Directors has reviewed the
Corporate Governance Statement.
Governing bodies
The Annual General Meeting, the Board of Directors and the CEO are
responsible for the governance of Orthex. The company’s shareholders
exercise the highest decision-making power at the general meeting of
shareholders. The Shareholders’ Nomination Board prepares proposal for the
composition of the Board of Directors to the Annual General Meeting. The
Annual General Meeting elects the members of the Board of Directors. The
company is managed by the Board of Directors and the CEO, appointed by the
Board of Directors. The company’s Management Team assists the CEO in the
operative management of the company. The members of the Management
Team are appointed by the Board of Directors together with the CEO.
Governance structure of Orthex Corporation
Shareholders
External independent auditor General meeting of shareholders
Board of Directors
CEO
Management Team
Shareholders’ Nomination Board
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General Meeting of Shareholders
The General Meeting of Shareholders is the ultimate decision-making body
of the company. At the General Meeting of Shareholders, shareholders
exercise their powers in accordance with the Companies Act and the Articles
of Association. The General Meeting of Shareholders decides on matters
that under the Companies Act and the Articles of Association are within its
purview. Annual General Meeting of Shareholders is convened by the Board
of Directors annually and it is held within six months from the end of the
previous financial year. An Extraordinary Meeting of Shareholders may be
convened as stipulated in the Companies Act. Matters on which the Annual
General Meeting decides include the adoption of the financial statements,
distribution of profits, discharge from liability, and election of the members
of the Board of Directors and the auditor, as well as their remuneration.
Decisions to amend the Articles of Association are also taken by the General
Meeting of Shareholders.
Annual General Meeting 2023
Orthex Corporation’s Annual General Meeting was held on 18 April 2023 in
Espoo, Finland. The general meeting adopted the financial statements and
discharged the members of the Board of Directors and the CEO from liability
for the financial year 2022. The general meeting also approved the amended
remuneration policy and the remuneration report 2022 for the governing
bodies.
The general meeting resolved that for the financial year 2022, shareholders
will be paid a dividend of EUR 0.11 per share totalling approximately
EUR 2.0 million in two instalments. The first instalment of the dividend
amounting to EUR 0.06 per share was paid on 27 April 2023 and the second
instalment amounting to EUR 0.05 per share on 10 October 2023.
The general meeting resolved that Sanna Suvanto-Harsaae, Markus
Hellström, Jyrki Mäki-Kala and Jens-Peter Poulsen be re-elected to the
Board and that Anette Rosengren be elected as new member to the Board.
The Board members’ term of office will end at the end of the next Annual
General Meeting. Satu Huber stepped down from the Board.
The new director Anette Rosengren (b. 1966) is Swedish citizen and holds
a bachelor’s degree in business administration. Since 2019, she serves Philip
Morris International as the Managing Director for the Nordics. Prior to that,
she held Managing Director position at Fazer Bakery in Sweden and CEO
position at Lantmännen Doggy. Ms Rosengren started her professional career
at Unilever in marketing and commercial roles and then joined Kraft Foods
where she made over ten-year career advancing to international director and
VP positions with responsibilities mainly in marketing, category development,
and strategic development. Since 2016, she is a member of the Board of
Directors of the Greenfood Group.
Sanna Suvanto-Harsaae continues to chair Orthex Board of Directors. The
members of the Board of Directors are independent of the company and its
significant shareholders.
As to Board remuneration, the general meeting resolved that the
remuneration of the members of the Board of Directors remain the same and
that the Chair of the Board of Directors be paid a monthly fee of EUR 4,000
and other members of the Board of Directors a monthly fee of EUR 2,000.
Ernst & Young Oy, a firm of Authorised Public Accountants, was re-elected
the company’s auditor for a term of office ending at the end of the next
Annual General Meeting. As announced by Ernst & Young Oy, APA Mikko
Rytilahti acts as the signing audit partner succeeding APA Johanna
Winqvist-Ilkka. The remuneration of the auditor was resolved to be paid
according to a reasonable invoice approved by the Board.
In addition, the general meeting resolved to make technical amendments
to Articles 5 and 8, and to supplement the Article 10 of the Articles of
Association so that the general meeting of shareholders may also be held
completely without a physical meeting venue as a virtual meeting.
The general meeting also authorised the Board of Directors to issue or
convey a total maximum of 1,600,000 new shares and special rights entitling
to shares in one or several issues and to acquire a maximum of 175,000
shares in the company. The authorisations will be valid until 30 June 2024.
Further information about the decisions of the general meeting can be found
in the AGM documents, which are available on the corporate website at
Annual General Meeting 2023 – Orthex Group.
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The Board of Directors
Under the company’s Articles of Association, the Board of Directors is
composed of a minimum of four and a maximum of eight members. Members
of the Board of Directors are elected at the general meeting. The term of
office of a member of the Board of Directors commences from the close of
the general meeting in which they are elected and expires at the close of the
following annual general meeting. The Board of Directors elects a chair from
among its members.
The Board of Directors is quorate when more than one-half of its members
are present. A decision by the Board of Directors is the opinion supported by
more than one-half of the members present at a meeting. In the event of a
tie, the Chair of the Board has the casting vote.
The Board of Directors convenes according to a pre-agreed schedule
normally from six to ten times a year and holds extra meetings when deemed
necessary. Meetings can also be held as teleconference meetings or by using
other technical means or devices.
The Board evaluates its operations and working methods once a year.
Duties of the Board of Directors
The tasks and responsibilities of the Board of Directors of the company are
determined in the Companies Act as well as in other applicable legislation.
The Board of Directors has general authority to decide and act in all matters
not reserved for other corporate governing bodies by law or under the
provisions of the company’s Articles of Association. The general task of the
Board of Directors is to duly organise Orthex’s management and operations.
1)
Member until 18 April 2023.
2)
Member from 18 April 2023.
In all situations, the Board of Directors must act in accordance with Orthex’s
best interest.
The Board of Directors has a written charter that specifies its duties. The
duties of the Board of Directors include:
• approving reports of the Board of Directors, financial statements, and
interim reports
• seeing to the appropriate organisation of accounts and financial
administration
• preparing proposals for the general meeting of shareholders and convening
general meetings of shareholders
• approving and confirming strategic guidelines and long-term strategic
targets
• approving principles for risk management and internal control
• confirming annual budgets and operating plans
• appointing the CEO and deciding on the terms and conditions of the CEO
contract
• deciding on the company structure
• making significant business decisions, such as decisions on mergers
and acquisitions, significant contracts, investments, and financing
arrangements and
• deciding on other matters falling under the statutory responsibilities of the
Board of Directors.
Orthex’s Board of Directors has no committees, but the Board may consider
setting up potential committees in the future. As there are no committees,
the entire Board of Directors is responsible for discharging the statutory
duties of the audit committee.
Number of Board meetings and attendance rates
In 2023, the Board held 9 meetings. Some of these meetings were held
remotely. Attendance in the meetings is reported in the table below.
Number of Board meetings and
members’ attendance 2023
Director
Attendance /
No. of meetings Attendance-%
Sanna Suvanto-Harsaae
(Ch.)
9/9 100
Markus Hellström 9/9 100
Satu Huber
1)
2/2 100
Jyrki Mäki-Kala 8/9 89
Jens-Peter Poulsen 9/9 100
Anette Rosengren
2)
7/7 100
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41-50 years 20%
51-60 years 60%
61-65 years 20%
Age
Below 2 years 20%
2-3 years 60%
Above 3 years 20%
Tenure
Diversity of the Board of Directors
Orthex regards diversity as an important and natural approach in its
operations. Diversity shall be part of such cooperative and functional Board
of Directors which is able to respond to the requirements set out in the
company’s business and strategic objectives. Such Board of Directors will also
be able to support and challenge the company’s operative management in a
proactive and constructive manner. The principles concerning the diversity of
the Board of Directors are in line with this premise.
When preparing the composition of the Board of Directors of Orthex,
attention is paid to the requirements set by the company’s Articles
of Association and the Corporate Governance Code, as well as to the
requirements set by the company’s operations and the premises of diversity
derived therefrom.
Significant factors concerning the composition of the Board of Directors
include mutually complementary variety of competences, education and
experience in different areas and professional fields and in management
and business operations existing in different development phases, as well as
the personal capabilities of each member, all of which add to the diversity
of the Board of Directors. Diversity is considered not only from the aspect of
gender but also from other factors promoting the Board’s diversity, such as
the age structure of the Board, the members’ educational and professional
background, their experience relevant for the position, and personal
characteristics. When preparing the composition, it is also assessed how
the members’ skills, education and experience complement each other. The
company’s long-term needs are also considered.
The purpose of the diversity principles is to contribute to making sure that
the Board of Directors’ combined competence and experience and the
diversity of its composition are sufficiently aligned with Orthex’s operational
needs. With regard to gender structure, the objective is that different genders
are sufficiently represented on the Board.
At year-end 2023, the company’s Board of Directors comprised five members.
Diversity of the Board of Directors with respect to gender, nationality, age,
tenure as well as educational and professional background is described on
this and on the next two pages. Additional information for example on the
Board members’ previous positions of trust is available on the corporate
website at Board of Directors - Orthex Group.
Male 60%
Female 40%
Gender
Finland 40%
Sweden 20%
Denmark 20%
Finland-Denmark 20%
Nationality
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Jyrki Mäki-Kala
Member of the Board of Directors since 2022
Born 1961
Finnish citizen
Master’s degree in Economics
Independent of the company and its significant shareholders
Main occupation: Professional director
• Neste Corporation, Chief Financial Officer, and member of Executive Committee
2013–2022
• Kemira Oyj, Chief Financial Officer 2008–2013
• Kemira Pulp & Paper, Vice President, and President positions 2005–2008
• Nokia Chemicals/Finnish Chemicals Oy, Director, and Vice President positions
1988–2005
• Anora Group Plc, Vice-Chair of the Board of Directors since 2023 and member of the
Board and Chair of the Audit Committee since 2020
• Outokumpu Oyj, member of the Board of Directors and Chair of the Audit Committee
since 2023
Sanna Suvanto-Harsaae
Chair of the Board of Directors since 2021, member since 2020
Born 1966
Finnish and Danish citizen
Bachelor’s degree in Economics
Independent of the company and its significant shareholders
Main occupation: Professional director
• Finnair Plc, Chair of the Board of Directors since 2023
• N’Age A/S, Chair of the Board of Directors since 2023
• Posti Group Corporation, Chair of the Board of Directors since 2020
• BoConcept A/S, Chair of the Board of Directors since 2016
• TCM Group A/S, Chair of the Board of Directors since 2016
• Nordic Pet Care Group A/S, Chair of the Board of Directors since 2012
• Elopak ASA, member of the Board of Directors since 2021
• CEPOS (Center for Political Studies), member of the Board of Directors since 2017
• Broman Group Oy, member of the Board of Directors since 2016
Markus Hellström
Member of the Board of Directors since 2022
Born 1974
Finnish citizen
Master’s degree in Engineering
Independent of the company and its significant shareholders
Main occupation: Managing Director of Oy Snellman Ab since 2023
• Fazer Group, Executive Vice President, and Managing Director of Fazer Confectionery
Ltd. 2020–2023
• Fazer Bakeries Finland, Country Manager and Fazer Bakeries Ltd., Managing Director
2014–2020
• Fazer Bakeries Ltd., Vice President, Head of Operations, Bakery Business Unit
2013–2014
• Fazer Bakeries Ltd., Business Development Director / Business Controller 2007–2012
• Fazer Group, Sourcing Manager for Logistics Services 2004–2007
• Logico Solutions, Partner 2003–2004
• Candyking, Sweden, Logistics Manager 2000–2003
Members of the Board of Directors on 31 December 2023
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Jens-Peter Poulsen
Member of the Board of Directors since 2021
Born 1967
Danish citizen
Master’s degree in Economics
Independent of the company and its significant shareholders
Main occupation: Chief Executive Officer of Kvik A/S since 2013
• LEGO Group, Senior Vice President of the Market Group Asia & Emerging Markets
2011–2012
• LEGO System A/S, Senior Vice President, Market Group 1, 2006–2011
• LEGO System A/S, various Vice President and Senior Director positions and
responsibilities for different operations 2000–2005
• Jensen’s Catering A/S, Sales and Marketing Manager 1999–2000
• Arla Foods, several positions 1993–1999
• European House of Beds A/S, member of the Board of Directors since 2021
• Holmris B8 A/S, member of the Board of Directors since 2017
Anette Rosengren
Member of the Board of Directors since 2023
Born 1966
Swedish citizen
Bachelor’s degree in business administration
Independent of the company and its significant shareholders
Main occupation: Managing Director of Philip Morris Nordics since 2019
• Fazer Bakery (Sweden), Managing Director 2015–2018
• Lantmännen Doggy, CEO 2012–2015
• Lantmännen Group, SVP, Head of CF Communication, Sustainability and R&D
2008–2012
• Kraft Foods, Director, Strategic Development and Marketing, Nordic 2005–2008
• Kraft Foods (Austria), VP Category Development, EEMA region 2004–2005
• Kraft Foods (USA), Director, Marketing Service, International 2002–2004
• Kraft Foods (Nordic), marketing and commercial roles 1995–2003
• Unilever, marketing and commercial roles 1989–1995
• Greenfood AB (publ), member of the Board of Directors since 2016
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Shareholders’ Nomination Board
Orthex Corporation’s Extraordinary General Meeting on 5 March 2021 decided
to establish a Shareholders’ Nomination Board. The Nomination Board
annually prepares proposals for the election and remuneration of members
of the Board of Directors to the Annual General Meeting. It is also the duty of
the Nomination Board to search for new director candidates.
The Extraordinary General Meeting adopted a Charter of the Shareholders’
Nomination Board, which governs the appointment, composition, and duties
and responsibilities of the Nomination Board. The Charter is available on the
corporate website at Nomination Board - Orthex Group. The Nomination
Board has been established for the time being and can only be dissolved
by a decision of the general meeting. The term of office of the members of
the Nomination Board expires annually when a new Nomination Board has
been appointed.
The Nomination Board consists of the four largest shareholders of the
company as of 31 August or, if the company has more than four shareholders,
whose shareholding and voting rights in the company are more than 10
per cent, the corresponding number of shareholders or persons appointed
by them. The Chair of the Board acts as an expert member of the
Nomination Board.
Based on the shareholder register of Orthex Corporation as of 31 August
2023, the shareholders represented in the Shareholders’ Nomination Board
are Conficap Oy, Alexander Rosenlew, Ilmarinen Mutual Pension Insurance
Company and Thominvest Oy (former Thomasset Oy).
The representatives of the four largest shareholders in the Nomination Board
are:
• Maarit Toivanen, Chair of Board of Directors, Conficap Oy
• Alexander Rosenlew
• Annika Ekman, Head of Direct Equity Investments, Ilmarinen Mutual
Pension Insurance Company
• Mats Söderström, CEO, Thominvest Oy
Maarit Toivanen chairs the Nomination Board, and its expert member is
Sanna Suvanto-Harsaae, Chair of Orthex’s Board of Directors. No changes
took place in the composition of the Nomination Board during 2023.
The Nomination Board prepared the proposals for the composition and
remuneration of the Board of Directors and submitted them to the Board of
Directors of Orthex Corporation. The Board of Directors incorporated these
proposals into the notice of the meeting when convening Orthex Annual
General Meeting 2023.
Shareholdings of the members of the Board of Directors
The shareholdings of the members of the Board of Directors and their closely
associated persons as at the end of 2023, are presented in the table below.
None of the members of the Board of Directors nor their closely associated
persons or entities has any share-based rights in Orthex or its subsidiaries.
Board of Directors’ shareholdings on 31 December 2023
Director Position
Number of shares on
31 Dec. 2023
Sanna Suvanto-Harsaae Chair 8,515
Markus Hellström member 3,640
1)
Jyrki Mäki-Kala member 2,010
Jens-Peter Poulsen member 15,713
Anette Rosengren member 2,000
Tot al 31,878
% of total number of shares 0.2%
Orthex total number of
shares
17,758,8 5 4
1)
Incl. holdings of closely associated persons
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Chief Executive Officer
Alexander Rosenlew has been the Chief Executive Officer of Orthex
Corporation since 2010. Mr Rosenlew holds master’s degrees both in
economics and in management.
The CEO is responsible for the operational management of Orthex in
accordance with the instructions and orders given by the Board of Directors.
The CEO prepares matters to be decided by the company’s Board of Directors,
develops Orthex’s operations together with the Board in accordance with
the set objectives and ensures the proper implementation of the Board’s
decisions. The CEO is also responsible for ensuring that Orthex complies
with applicable laws and regulations and that the company’s financial affairs
have been arranged in a reliable manner. The CEO chairs the meetings of the
Management Team.
Management Team
The role of Orthex’s Management Team is to manage Orthex’s operative
business as a whole. The members of the Management Team have certain
powers to act within their respective areas of responsibility, and they have
a duty to develop Orthex’s business in accordance with the objectives set by
the company’s Board of Directors and the CEO.
Orthex’s Board of Directors appoints the members of the Management Team
together with the CEO. The Management Team meets regularly on a monthly
basis or when deemed necessary.
Members of Orthex’s Management Team are presented on the following
page. No changes took place in the composition of the Management Team
during 2023. Additional information on the Management Team members’
career history and potential positions of trust is available on the corporate
website at Management Team - Orthex Group.
Shareholdings of the members of the Management Team
The shareholdings of the CEO and other members of the Management Team
(including their closely associated persons or entities), as at the end of 2023,
are presented in the table below.
The CEO or other members of the Management Team (or their closely
associated persons or entities) have no share-based rights in Orthex or
its subsidiaries.
Management Team’s shareholdings on 31 December
2023
Management
Team member Position
Number of
shares on 31
Dec. 2023
Alexander
Rosenlew
CEO 2,0 47,72 6
Oy Rosaco Ab
1)
33,500
Saara Mäkelä Chief Financial Officer 141,000
Hanna Kukkonen
Chief Marketing and
Sustainability Officer 200,800
Nicholas Ledin Sales Director, Nordic 61,850
Alex Nielsen
Sales Director, Europe and
International Markets 1,000
Hans Cronquist Operations Director, Tingsryd 100,000
Peter Ottosson Operations Director, Gnosjö 91,100
Tom Ståhlberg Operations Director, Lohja 315,250
2)
Tot al 2,992,226
% of total number of shares 16.8%
Orthex total number of shares 17,758,8 5 4
1)
Controlled entity
2)
Incl. holdings of closely associated persons
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Members of the Management Team on 31 December 2023
Alexander Rosenlew
Chief Executive Officer
Management Team member since 2010
Employed by Orthex since 2010
Born 1971, Finnish citizen
Master’s degrees in Economics and in Management
Alex Nielsen
Sales Director, Europe and International Markets
Management Team member since 2022
Employed by Orthex since 2022
Born 1972, Danish citizen
Business diploma in Marketing, HD(A)
Saara Mäkelä
Chief Financial Officer
Management Team member since 2017
Employed by Orthex since 2017
Born 1976, Finnish citizen
Master’s degree in Economics
Hans Cronquist
Operations Director, Tingsryd
Management Team member since 2019
Employed by Orthex since 2019
Born 1970, Swedish citizen
Master’s degree in Mechanical Engineering
Hanna Kukkonen
Chief Marketing and Sustainability Officer
Management Team member since 2012
Employed by Orthex since 2012
Born 1973, Finnish citizen
Master’s degree in Economics
Peter Ottosson
Operations Director, Gnosjö (until 30 April 2024)
Management Team member since 2013
Employed by Orthex since 2009
Born 1974, Swedish citizen
Bachelor’s degree in Machine Engineering, eMBA
Nicholas Ledin
Sales Director, Nordic
Management Team member since 2015
Employed by Orthex since 2001
Born 1970, Swedish citizen
High school graduate
Tom Ståhlberg
Operations Director, Lohja
Chief Supply Officer as of 1 March 2024
Management Team member since 2012
Employed by Orthex since 2012
Born 1969, Finnish citizen
Master’s degree in Industrial Engineering
and Management
From left: Tom Ståhlberg, Saara Mäkelä, Alex Nielsen, Alexander Rosenlew, Nicholas Ledin, Hanna Kukkonen, Peter Ottosson, Hans Cronquist.
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Financial reporting process
Orthex compiles its financial reporting in accordance with the International
Financial Reporting Standards (IFRS), the Finnish Securities Markets Act, the
Finnish Accounting Act and the guidelines and statements of the Finnish
Accounting Board, while also complying with the rules and regulations
of the Financial Supervisory Authority and the rules of Nasdaq Helsinki
Ltd. The principles, instructions, practices, and areas of responsibility in
internal auditing and risk management relating to the company’s financial
reporting process are aimed at ensuring that the company’s financial
reporting is reliable and that the financial statements have been prepared
in accordance with applicable laws, regulations, and the company’s
operating principles. Orthex’s financial reporting is supervised on two levels,
in individual companies and at the group level. On both levels, control
measures and analyses are carried out to ensure the validity of financial
reporting. The Board of Directors is responsible for overseeing the financial
reporting process.
Risk management
The purpose of Orthex’s risk management is to ensure the fulfilment of
customer promises, business profitability, ability to pay dividends, value
creation for shareholders, responsible business, and business continuity. To
achieve this, Orthex strives to be aware of the uncertainties and risk factors
and opportunities associated with its objectives and operations, and to
identify, assess and manage risks and their consequences in a consistent and
effective manner.
Orthex has a risk management policy approved by the Board of Directors
that guides risk management in a way that supports the achievement of the
company’s objectives, protects personnel and the company’s various assets,
and ensures the financial sustainability of operations.
The responsibility for implementing risk management lies with the
Management Team. In addition, each employee must be aware of and
manage the risks associated with their own operating environment and areas
of responsibility. The company’s Board of Directors approves the company’s
risk management policy and monitors and assesses the effectiveness of
risk management.
Risk management principles
Risk management is a systematic activity designed to ensure comprehensive
and appropriate risk identification, assessment, management, and control.
It is an integral part of Orthex’s planning and management process,
decision making, day-to-day management of operations, and monitoring
and reporting procedures. Risks are assessed and managed in a business-
oriented and thorough manner. This means that key risks are systematically
identified, evaluated, managed, monitored, and reported as part of
the business.
Risk management process and reporting
Orthex prioritises risks according to the importance of the risk by
assessing the impact, likelihood, and level of risk management of the risk
materialisation. Risk management measures address the most significant
risks through cost-effective and appropriate policy options.
The Management Team regularly monitors the implementation of risk
management. If necessary, corrective measures will be taken.
The Management Team reports to the Board of Directors on risks and risk
management measures 2–3 times a year. The Board reviews the most
significant risks, measures to manage them and assesses the efficiency
and effectiveness of risk management. The Board reports on the most
significant risks and uncertainties in the annual Board of Directors’ reports
and any material changes in these factors in the interim reports. Additional
information on the company’s risk management and on the most significant
risks and uncertainties is available in the Board of Directors’ Report for the
year 2023.
Internal control and audit
The Company’s Board of Directors has confirmed the operating principles
of internal control followed at Orthex, aiming to ensure that the company’s
objectives regarding, inter alia, Orthex’s strategy, operations, practices, and
financial reporting in particular are met. The operating principles of internal
control also contribute to ensuring the company’s compliance with legislation
and regulations. Internal control is an essential part of business management
and in ensuring that the set objectives are met. Internal control is aimed to
be organised efficiently, so that any deviations from targets can be detected
as early as possible or that they can be prevented.
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Orthex’s tools of internal control include internal policies, guidelines, and
instructions, together with manual controls as well as controls built into
systems. In addition, internal control is implemented in the form of various
monitoring reports and meetings. The Board of Directors of Orthex is
responsible for organising the internal control and oversees the efficiency
of internal control. The Management Team and the CEO are responsible that
functioning control procedures are in use.
Orthex Group has not organised its internal audit as a separate function. The
Board assesses annually the need for internal audit procedures and may use
internal company resources or external service providers for internal audit
measures. Any outcomes of such procedures or measures are reported to the
Board of Directors.
Related party transactions
The Board of Directors has defined the principles for monitoring and
evaluating related party transactions. The company evaluates and monitors
transactions concluded between the company and its related parties and
ensures that any conflicts of interest are taken into account appropriately in
the decision-making process of the company. The company keeps a list of
related parties.
Approval of related party transactions concluded in the ordinary course of
business and on customary commercial terms is subject to the company’s
normal approval policies and processes. Approval of a related party
transaction that is not concluded in the ordinary course of business or
on customary terms is subject to the Board of Directors’ approval. The
company’s finance function monitors related party transactions as a part of
the company’s normal reporting and control procedures and reports related
party transactions to the Board of Directors.
The Board of Directors regularly evaluates the reported related party
transactions and the appropriateness of the company’s process and policies
on related party transactions. Information on transactions concluded
between the company and its related parties is disclosed, as required,
annually in the notes to the company’s consolidated financial statements.
Material related party transactions are disclosed in accordance with Chapter
8, section 1a of the Securities Markets Act.
Insider administration
Orthex has prepared insider guidelines approved by the company’s Board of
Directors, the purpose of which is to clarify and supplement the operating
methods of Orthex and its insiders and to serve as a practical tool in handling
insider matters. The Insider Guidelines define clear operating instructions for,
among other things, the management of inside information, the maintenance
of insider lists and the reporting of transactions by persons subject
to disclosure.
The Insider Guidelines apply to Orthex and persons in managerial positions at
Orthex, as well as to persons working for Orthex who have access to inside
information or who have otherwise become aware of inside information. In
addition, the Insider Guidelines apply by agreement to persons otherwise
acting on behalf of or for Orthex in the performance of their duties through
which they have access to inside information.
Orthex’s insider administration compiles insider lists and keeps them up to
date in electronic form. In addition to individual insider lists (project-specific
insider list), Orthex may prepare a supplement for permanent insiders
(permanent insiders). Permanent insiders include only those persons who,
by virtue of their duties, are considered to have continuous access to all
inside information about Orthex. In the project-specific insider list, Orthex
will include those with inside information about the project, including any
external advisors and experts.
Insider lists are maintained by an electronic procedure prepared and / or
approved by the Financial Supervisory Authority or another appropriate body
that meets the applicable requirements. Insider lists are not public and are
not made available to the public.
Orthex will notify the insider in writing of his or her insider status, the
resulting obligations and any penalties for breach of those obligations.
The person entered in the project-specific insider list will be notified of the
termination of the project and the closure of the project-specific insider list.
Persons discharging managerial responsibilities at Orthex and other
permanent insiders, as determined by Orthex, should schedule their trading
in Orthex financial instruments in a manner that does not undermine
confidence in the securities market.
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Persons discharging managerial responsibilities at Orthex are the members of
the Board of Directors, the CEO, and the members of the Management Team.
Orthex maintains a list of the persons in managerial position and the persons
and entities closely associated with them. Orthex does not maintain a list of
permanent insiders.
The persons in managerial position at Orthex may not enter into transactions
with Orthex financial instruments for their own account or for the account
of a third party during a closed period beginning 30 days prior to the
disclosure date of Orthex’s financial statements release, half-year financial
report and the three- and nine-month interim reports provided periodically
by Orthex and ends 24 hours after publishing the group’s interim report,
half-year financial report or financial statements release. In addition, Orthex
recommends that persons discharging managerial responsibilities in the
company do not engage in transactions with the company’s financial
instruments after the end of each quarterly period and that they time their
potential transactions to the two-week-period, which begins on a date
following the disclosure date of the afore mentioned financial reports.
In accordance with Nasdaq Helsinki Ltd’s insider guidelines, Orthex maintains
a list of persons who participate in the preparation, auditing, or publication
of Orthex’s financial reports. Such persons may not carry out transactions for
their own account or on behalf of a third party during a closed period.
Persons in managerial position at Orthex and their close associates shall
disclose to Orthex and the Financial Supervisory Authority all transactions
they make on their own account with Orthex’s shares, debt instruments or
derivatives or other related financial instruments. The reporting obligation
applies to transactions carried out on or off any marketplace.
A person in managerial position or another person subject to a trading
restriction specified by the company should request an assessment of the
legality and regularity of the proposed transaction in the financial instrument
from the company’s insider administration. Notwithstanding the assessment
procedure, the person in a managerial position or the other person
mentioned above is responsible for ensuring that they comply with the laws,
regulations, and instructions.
Orthex has an internally operated whistleblowing channel through which
Orthex employees can anonymously report any suspected violations of
financial market rules and regulations. Other stakeholders can report
suspected infringements by sending email to whistleblow@orthexgroup.com.
Further information and instructions for whistleblowing are available on the
corporate website at Whistleblowing - Orthex Group.
External audit
According to the Articles of Association, the company has one auditor.
The auditor must be a firm of authorised public accountants. The auditor
is elected annually by the Annual General Meeting for a term that expires
at the end of the next Annual General Meeting following the election. The
task of the auditor is to audit the consolidated financial statements, the
financial statements of the parent company, the accounting of the Group
and the parent company and the administration of the parent company.
The company’s auditor submits the auditor’s report to the shareholders in
connection with the annual financial statements and submits regular reports
on its findings to the Board of Directors.
At the Annual General Meeting 2023, Ernst & Young Oy, a firm of Authorised
Public Accountants, was elected the company’s auditor with Mikko
Rytilahti, Authorised Public Accountant, as the signing audit partner
succeeding Johanna Winqvist-Ilkka, Authorised Public Accountant. The
audit fees paid to the auditor in 2023 totalled EUR 208 thousand (2022:
174 thousand). In addition, EUR 12 thousand (2022: 35 thousand) was paid to
the auditor for non-audit services.
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REMUNERATION REPORT
2023
Orthex Corporation’s (”Orthex” or ”the company”) remuneration report for
the financial year 2023 has been prepared in accordance with the Finnish
Corporate Governance Code 2020 issued by the Securities Market Association
and other applicable regulations. The Corporate Governance Code is available
on the association’s website (www.cgfinland.fi). The remuneration report
is published simultaneously with the corporate governance statement, the
Board of Directors’ report, the financial statements, and the sustainability
report on the corporate website at www.investors.orthexgroup.com. The
company’s Board of Directors has prepared and approved this remuneration
report and it will be presented to the Annual General Meeting to be held on 9
April 2024 for the shareholders’ advisory approval.
This remuneration report describes how Orthex has applied the amended
remuneration policy approved at the company’s Annual General Meeting
on 18 April 2023. The remuneration policy was amended so that the
remuneration policy defines clear maximum payments for short- and long-
term incentives payable to the CEO and that the company’s potential long-
term incentive scheme can be other than share based. The remuneration
report describes the remuneration and other financial benefits paid to the
members of the Board of Directors and the CEO during the financial year
2023. In addition, the remuneration report compares the development of the
remuneration of the Board of Directors and the CEO with the development
of the employees’ average remuneration and the company’s financial
development over the past five years.
Introduction
The goal of Orthex’s remuneration schemes is to promote the company’s
competitiveness and support the implementation of the company’s strategy.
The remuneration schemes also aim to engage key personnel in long-term
work to achieve personal and shared goals and increase shareholder value.
Effective and competitive remuneration is an essential tool for hiring capable
management in the company, which in turn contributes to the company’s
financial success and implementation of good governance. Remuneration
supports the implementation of the company’s strategy and long-term
profitability and promotes the company’s competitiveness.
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Development of the Group’s financial performance and remuneration
The following table shows the development of the total remuneration of the Board of Directors and the CEO compared to the development of Orthex employees’
average remuneration and the company’s financial development over the past five years.
Development of total remuneration and financial development over the past five years
EUR thousand 2023 2022 2021 2020 2019
Net sales 85,945 84,048 88,694 75,865 66,427
Adjusted EBITA 10,918 5,490 10,996 12,933 7,593
Board of Directors
1)
144 144 126 71 58
CEO
1)
437 527 478 367 302
Employees' average remuneration
2)
59 55 58 55 53
1)
The remuneration of the Board of Directors and the CEO was adjusted in connection with the company’s IPO in March 2021.
2)
Employees’ average remuneration is total employee remuneration divided by the average number of personnel during the year.
Summary of remuneration in 2023
In 2023, the actual remuneration of the members of the Board of Directors
and the CEO followed the remuneration policy. Orthex did not deviate
from the remuneration policy in the remuneration of the members of the
Board of Directors and the CEO and did not exercise its right to recover the
remuneration during 2023.
During the financial year 2023, the members of the Board of Directors were
paid fixed monthly fees. The amount of the fees paid depended on the
member’s role in the Board: Chair of the Board – member of the Board. As
decided at the 2023 AGM, the monthly fees remained the same. The fees
paid are disclosed under section “Remuneration of the Board of Directors”.
The total remuneration paid to the CEO during the financial year 2023
consisted of fixed base salary with fringe benefits and variable short-term
incentive paid for the performance in 2022. The set performance targets for
the company’s short-term incentive plan 2022 were mostly not achieved. The
CEO’s total remuneration in the financial year 2023 amounted to EUR 437,427,
of which variable remuneration accounted for 2.7 per cent. Orthex has no
long-term share-based or other incentive schemes in place, which partly
explains the share of variable remuneration of the CEO’s total remuneration.
The salaries and incentives paid to the CEO are disclosed under section
“Remuneration of the CEO”.
66.4
75.9
88.7
84.0
85.9
2019 2020 2021 2022 2023
Net sales, EUR million
6.5
12.3
9.3
5.2
10.8
2019 2020 2021 2022 2023
Operating profit, EUR million
7.6
12.9
11.0
5.5
10.9
2019 2020 2021 2022 2023
Adjusted EBITA, EUR million
11.4 %
17.0 %
12.4 %
6.5 %
12.7 %
2019 2020 2021 2022 2023
Adjusted EBITA margin, %
66.4
75.9
88.7
84.0
85.9
2019 2020 2021 2022 2023
Net sales, EUR million
6.5
12.3
9.3
5.2
10.8
2019 2020 2021 2022 2023
Operating profit, EUR million
7.6
12.9
11.0
5.5
10.9
2019 2020 2021 2022 2023
Adjusted EBITA, EUR million
11.4 %
17.0 %
12.4 %
6.5 %
12.7 %
2019 2020 2021 2022 2023
Adjusted EBITA margin, %
66.4
75.9
88.7
84.0
85.9
2019 2020 2021 2022 2023
Net sales, EUR million
6.5
12.3
9.3
5.2
10.8
2019 2020 2021 2022 2023
Operating profit, EUR million
7.6
12.9
11.0
5.5
10.9
2019 2020 2021 2022 2023
Adjusted EBITA, EUR million
11.4 %
17.0 %
12.4 %
6.5 %
12.7 %
2019 2020 2021 2022 2023
Adjusted EBITA margin, %
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Remuneration of the Board of Directors
The Annual General Meeting decides on the remuneration to be paid to the
members of the Board of Directors. The proposal for the remuneration of the
members of the Board of Directors for the 2023 Annual General Meeting was
prepared by the company’s Shareholders’ Nomination Board.
In accordance with the decision of the Annual General Meeting in 2023, the
remuneration of the Board of Directors remained the same and the Chair
of the Board of Directors was paid a monthly fee of EUR 4,000 and other
members of the Board of Directors a monthly fee of EUR 2,000.
Board fees were paid monthly in cash. No meeting fees were paid for Board
meetings. The remuneration of the members of the Board of Directors does
not involve pension contributions and the members of the Board of Directors
are not covered by Orthex’s incentive schemes.
Reasonable travel and other expenses related to the Board work were
reimbursed in accordance with the company’s travel rules.
The remuneration paid to the members of the Board of Directors in 2023 is
shown in the table on the right. The members of the Board of Directors did
not receive any other financial benefits.
Remuneration of the Board of Directors 2023
EUR Remuneration
Sanna Suvanto-Harsaae (Ch.) 48,000
Markus Hellström 24,000
Satu Huber
1)
8,000
Jyrki Mäki-Kala 24,000
Jens-Peter Poulsen 24,000
Anette Rosengren
2)
16,000
Tot al 144,000
1)
Member of the Board until 18 April 2023.
2)
Member of the Board from 18 April 2023.
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Remuneration of the CEO
The Board of Directors decides on the remuneration of the CEO. The CEO of
Orthex is Alexander Rosenlew since 2010. The CEO’s remuneration consists
of a fixed base salary with fringe benefits and a variable short-term incentive.
In 2023, Orthex did not have any long-term share-based or other incentive
schemes. The purpose of rewarding the CEO is to guide the implementation
of the company’s strategic goals and thereby promote the company’s long-
term financial success, competitiveness, and favourable development of
shareholder value. The CEO’s significant shareholding (11.7%) in the company
strengthens the alignment of the CEO’s interests with those of shareholders.
Under Orthex’s variable short-term incentive scheme, the CEO may be
granted annual performance-based incentives in addition to his fixed annual
salary. The aim of the incentive scheme is to encourage the CEO to commit
to the company and motivate him to achieve the best possible result. In
addition, the incentive scheme is intended to encourage the CEO to work in a
way that supports Orthex’s strategy, growth, and competitiveness.
Incentives under annually commencing short-term incentive plans are
discretionary and tied to Orthex’s results of operations and the achievement
of relevant performance metrics and/or individual performance targets. The
terms and objectives of the incentive plan, including performance metrics
and weights, are determined, and approved annually in advance by the
company’s Board of Directors. In 2023, the metrics and weights of the CEO’s
incentive plan were as follows: profitability 50%, turnover 35%, sustainability
15%. During the financial year 2023, the maximum amount of the CEO’s
incentive corresponded to 7 months’ gross base salary.
The CEO is entitled to a statutory pension. The CEO’s pension and retirement
age are determined on the basis of the Employees’ Pensions Act. The CEO
does not have any supplementary pension insurance paid by the company.
The salaries, incentives and fringe benefits paid to the CEO in 2023 are
shown in the table below. The CEO’s monthly salary was adjusted in
December 2023. The incentive paid in 2023 is based on the 2022 short-term
incentive plan. The CEO’s earned short-term incentive for 2022 was 5% of
the annual maximum short-term incentive. The set performance targets for
the company’s short-term incentive plan 2022 were mostly not achieved.
Remuneration of the CEO paid in 2023
EUR 2023
Fixed based salary and mobile phone benefit 425,527
Incentives 11,900
Other financial benefits -
Tot al 437, 427
Share of fixed pay of total remuneration 97.3%
Share of variable pay of total remuneration 2.7%
The CEO participated in the company’s short-term incentive plan 2023.
The CEO’s earned short-term incentive for 2023 was 50% of the annual
maximum short-term incentive. The performance-based incentive for the
year 2023 will be paid in April 2024.
Remuneration of the CEO not yet paid but due based on
the year 2023
Short-term incentive scheme EUR
Remuneration due based on the achievement of STI
performance targets in 2023 125,748
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CONTENTS
Board of Directors’ report 61
KEY FIGURES 75
Financial statements 82
CONSOLIDATED FINANCIAL STATEMENTS, IFRS 83
Consolidated income statement 83
Consolidated statement of comprehensive income 83
Consolidated statement of financial position 84
Consolidated statement of changes in equity 85
Consolidated statement of cash flows 86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 87
1. Accounting principles for the consolidated financial statements 87
2. Net sales 90
3. Other operating income 91
4. Operating expenses 91
5. Employee benefits 92
6. Financial income and expenses 94
7. Income taxes 95
8. Intangible assets 98
9. Property, plant and equipment 100
10. Leases 102
11. Financial assets and financial liabilities 104
12. Fair value hierarchy 114
13. Inventories 116
14. Trade and other receivables 116
15. Trade and other payables 116
16. Share capital and reserves 117
17. Related party disclosures 118
18. Collaterals, commitments and contingent assets and liabilities 119
19. Subsequent events 119
PARENT COMPANY FINANCIAL STATEMENTS, FAS 120
Parent company income statement 120
Parent company balance sheet 121
Parent company statement of cash flows 122
Notes to the parent company financial statements 123
SIGNATURES OF THE BOARD OF DIRECTORS’ REPORT
AND FINANCIAL STATEMENTS 127
AUDITOR’S REPORT 128
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Board of Directors’ report
Orthex is a leading Nordic houseware company. Orthex designs, produces,
markets, and sells household products with a mission to make consumers’
everyday life easier. Orthex offers a broad assortment of household products
in four product categories: Storage, Kitchen, Home & Yard, and Plant Care.
Orthex strives to create functional, durable, and high-quality household
products. Orthex also aims to be the industry forerunner in sustainability.
Orthex markets and sells its products under three main consumer brands:
SmartStore
TM
, GastroMax
TM
and Orthex
TM
. In addition, it sells outsourced
kitchen products under the Kökskungen
TM
brand. Orthex’s core geographic
markets are the Nordics and the export markets. The export markets
are divided into the Rest of Europe and the Rest of the world. Orthex is
headquartered in Espoo, Finland, and it currently has eight local sales
organisations located in the Nordics, Germany, France, the United Kingdom,
and the Benelux.
Key figures
EUR million 2023 2022 2021
Invoiced sales 88.0 85.8 90.6
Net sales 85.9 84.0 88.7
Gross margin 24.3 17.9 23.2
Gross margin, % 28,3% 21.3% 26.2%
EBITDA 14.9 9.2 13.2
EBITDA margin, % 17.3% 10.9% 14.9%
Adjusted EBITDA 14.9 9.3 14.8
Adjusted EBITDA margin, % 17.4% 11.1% 16.7%
EBITA 10.9 5.3 9.4
EBITA margin, % 12.6% 6.3% 10.6%
Adjusted EBITA 10.9 5.5 11.0
Adjusted EBITA margin, % 12.7% 6.5% 12.4%
Operating profit 10.8 5.2 9.3
Operating profit margin, % 12.5% 6.2% 10.4%
Net cash flows from operating activities 10.2 6.2 9.0
Net debt / Adjusted EBITDA 1.5x 2.8x 1.7x
Adjusted return on capital employed (ROCE), % 31.8% 15.9% 33.0%
Equity ratio, % 40.2% 36.3% 35.8%
Earnings per share, basic (EUR) 0.39 0.12 0.35
FTEs 281 295 314
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Market overview
Orthex operates in the home storage, kitchenware, plant care and other
household products market, which has historically been stable and resilient
throughout different economic cycles. The market for household products
in Europe is fragmented. According to Orthex’s estimate, there are more
than 30 significant competitors in Europe, 15 of which are roughly as
big as Orthex in terms of net sales. Although the market is competitive,
fragmentation lowers the threshold to increase market share and find
attractive niches.
The major megatrends supporting Orthex’s business include urbanisation
and the related increase in the number of households and decrease in living
space per household. As the area allocated for housing is sparser and more
expensive in growth centres benefiting from urbanisation, consumers often
choose location over space, resulting in increasing supply of smaller homes.
Small spaces, in turn, drive demand for functional storage solutions and
household products that allow efficient use of the living space. More people
live in single-person households and family sizes are decreasing. According
to Eurostat, the number of single-person households in the EU increased
by 30.7% between 2009 and 2022. Despite households being inhabited by
fewer people, the need for necessities, such as home storage, food storage
and kitchen utensils, remains nearly the same per household.
Consumption patterns supporting Orthex’s business are mainly related
to how people spend their time at home. One of these is the interest in
cooking at home, which is becoming more common as a healthy, and less
expensive way of eating. In addition, consumers are increasingly concerned
about climate change and biodiversity and want to do their part in the fight
against them by buying sustainable products, avoiding food waste, and
sorting and recycling their waste. Tightening legislation also supports this
development. However, only a few households have enough pre-installed
waste recycling and sorting solutions, which creates a demand for these
and for sorting and recycling solutions that can also function as interior
design elements.
A third consumption pattern supporting Orthex’s business is the demand
for houseplants. Houseplants bring fresh air, colour, and cosiness
into homes. Their use as design elements is becoming commonplace,
particularly in dense urban areas that have limited green spaces. In
addition, there is increasing popularity for gardening herbs and vegetables
at home and indoors. These trends are driving demand for flowerpots and
related products.
The uncertainties related to the general development of the global
economy, such as the risk of an economic recession, general cost inflation,
increased interest rates and energy crisis as well as geopolitical tensions
influence consumer confidence, purchasing power and behaviour and,
as a result, can have an impact on Orthex’s business. As a result of the
prevailing consumption uncertainty, many retailers are carefully monitoring
their inventory levels. Orthex product price points are relatively low, and
the products are bought to solve real needs, therefore Orthex believes that
its product categories will be less affected by careful consumer purchasing
behaviour than other, more expensive consumer goods categories.
Long-term financial targets
As long-term financial targets the company has adopted to an average
annual organic net sales growth to exceed 5 per cent at the Group level
and to exceed 10 per cent outside the Nordics (growth in local currencies),
adjusted EBITA margin (adjusted for items affecting comparability) to
exceed 18 per cent over time and net debt to adjusted EBITDA ratio to
stay below 2.5x. Leverage may temporarily exceed the target range (for
example, in conjunction with acquisitions).
The company aims to distribute a stable and over time increasing
dividend with a pay-out of at least 50 per cent of net profit, in total, on a
biannual basis.
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Group performance
Net sales and profitability
In 2023, the Group’s Net sales increased by 2.3% to EUR 85.9 million (84.0).
Invoiced sales amounted to EUR 88.0 million (85.8). The increase of constant
currency Net sales was 5.3% compared to 2022.
2023 net sales were particularly affected by careful consumer behaviour, cost
inflation, consumer and customer uncertainty, and weak exchange rates in
Sweden and Norway. The growth in net sales in the second half of the year
was driven by strong in-store activities, new product and customer listings,
and normalising demand in the Nordics.
EBITA was 10.9 million (5.3) during 2023 and increased by 104.3%. Adjusted
EBITA increased by 98.9% to EUR 10.9 million (5.5). Adjusted EBITA margin
increased to 12.7% (6.5). Operating profit was EUR 10.8 million (5.2). Items
affecting comparability totalled EUR 0.1 million (0.2).
Orthex’s financial income and expenses during the financial year consisted of
EUR 2.2 million net expenses (2.2).
Profit before taxes was EUR 8.5 million (3.0) and profit for the period was
EUR 6.9 million (2.1).
During the review period, the most significant factor affecting profitability
was the decrease in raw material prices from the exceptional high level
in 2022 closer to the long-term average. The electricity support from the
Swedish State during Q2 had a positive effect on profitability. The net effect
of the weakening values of the Swedish and Norwegian krona on profitability
was negative.
Development by geography
Orthex’s core market area by geography is the Nordics, where the Group’s
invoiced sales in 2023 amounted to EUR 68.7 million (68.5). Invoiced sales in
the Nordics totalled 78.1% (79.8) of the Group’s total invoiced sales. Invoiced
sales in the Rest of Europe grew to EUR 18.5 million (15.9). Sales in the Rest of
the world decreased to EUR 0.8 million (1.5).
Invoiced sales increased in the Nordic core markets thanks to generally
successful campaigns and levelled inflation. In the strategically important
European markets, sales developed positively during the year.
Orthex’s products are sold in more than 40 countries, and export to non-
Nordic countries grew by 11.2 percentage points and accounted for 21.9%
(20.2) of the Group’s invoiced sales at the end of the period.
Invoiced sales by geography
EUR million 2023 2022 2021
Nordics 68.7 68.5 73.0
Rest of Europe 18.5 15.9 15.1
Rest of the world 0.8 1.5 2.4
Tot al 88.0 85.8 90.6
Development by product category
Orthex has four product categories: Storage, Kitchen, Home & Yard, and
Plant Care. The largest category is Storage with invoiced sales totalling
EUR 60.0 million (55.1) during 2023. The Storage category represents most
of the business outside of the Nordic countries and the positive sales
development in the Rest of Europe took the overall Storage category growth
to 8.9% compared to the previous year.
Orthex has a strong position in the Nordics in food storage and kitchenware
markets. However, the Group’s invoiced sales in the Kitchen category
decreased to EUR 18.6 million (19.8). Sales of Kitchen products declined driven
by the careful Nordic customer and consumer behaviour.
Invoiced sales in the Plant Care category decreased to EUR 4.8 million (5.5).
Invoiced sales in the Home & Yard category decreased to EUR 4.6 million
(5.3).
Invoiced sales by product category
EUR million 2023 2022 2021
Storage 60.0 55.1 59.4
Kitchen 18.6 19.8 20.1
Plant Care 4.8 5.5 5.7
Home & Yard 4.6 5.3 5.4
Tot al 88.0 85.8 90.6
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Financial position and cash flow
At the end of December, the balance sheet totalled EUR 85.6 million (81.8),
of which equity accounted for EUR 34.4 million (29.7).
The Group’s net debt was EUR 22.3 million (26.0) at the end of the review
period. Non-current interest-bearing liabilities were EUR 29.6 million (32.0)
and Orthex’s total interest-bearing liabilities were EUR 33.9 million (36.3).
Interest-bearing liabilities include loans from credit institutions, pension
liabilities and lease liabilities.
During the period January−December 2023, the Group’s net cash flows
from operating activities were EUR 10.2 million (6.2) and cash conversion
was 82.6% (61.9). Interest paid during the period totalled EUR 1.9 million
(1.1). Cash and cash equivalents amounted to EUR 11.6 million (10.3) at the
end of the review period.
Net debt/adjusted EBITDA was 1.5x (2.8). Orthex’s long-term target is to
keep Net debt/adj. EBITDA below 2.5x.
At the end of the review period, the Group’s Equity ratio was 40.2% (36.3).
Adjusted return on capital employed (ROCE) was 31.8% (15.9) and return on
equity (ROE) 21.5% (6.9).
Investments, research, and product
development
Orthex’s investments during 2023 amounted to EUR 2.6 million (3.6) and
were mainly related to moulds for new products.
In 2022, Orthex launched a research project for the development of
recycled plastics. The goals of the project are to build an ecosystem aimed
at increasing the use of recycled plastic and to generate new information
about the use of recycled plastic in different applications, especially
in products suitable for food contact. Since January 2023, Orthex is
participating in a large seven-year cooperation research project to find new
potential renewable plastic raw materials.
During 2023, Orthex tested the suitability of recycled plastic for the
food contact, and the results have been promising. In addition, Orthex
has mapped potential renewable raw material suppliers and tested new
renewable plastic raw materials. These investments in research support
Orthex’s 2030 carbon neutrality target and the target to increase the use of
sustainable raw materials.
Research and product development expenses have not been capitalized.
Personnel
In 2023, the average number of personnel employed by Orthex was
281 (295) and wages and salaries amounted to EUR 17.9 million. In
2022 and 2021, wages and salaries amounted to EUR 18.3 million and
EUR 19.7 million, respectively. Group headcount at the end of the financial
year was 318 (316), of which 52% (54) worked in production, 21% (21)
in warehouse, 18% (16) in sales, 6% (5) in administration and 4% (4)
in marketing.
Group structure
There were no changes in the Group structure during 2023.
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Governance
The company’s governance complies with the company’s Articles of
Association and Corporate Governance Principles as well as rules and
regulations applicable to Finnish listed companies such as the Finnish
Limited Liability Companies Act and Securities Markets Act, and rules
and regulations of Nasdaq Helsinki Ltd. The company also adheres to
the Finnish Corporate Governance Code 2020 (”CG Code”) issued by the
Securities Market Association. The CG Code is available on the association’s
website (www.cgfinland.fi).
Further information on the company’s governance principles is available
in the Corporate Governance Statement 2023 published simultaneously
with the Board of Directors’ report and the Financial Statements. As the
company has no audit committee, the company’s Board of Directors has
reviewed the Corporate Governance Statement.
Decisions of the Annual General Meeting
Orthex Corporation’s Annual General Meeting was held on 18 April 2023
in Espoo, Finland. The general meeting adopted the financial statements
and discharged the members of the Board of Directors and the CEO from
liability for the financial year 2022. The general meeting also approved the
amended remuneration policy and the remuneration report 2022 for the
governing bodies.
The general meeting resolved that for the financial year 2022, shareholders
will be paid a dividend of EUR 0.11 per share totalling approximately
EUR 2.0 million in two instalments. The first instalment of the dividend
amounting to EUR 0.06 per share was paid on 27 April 2023 and the
second instalment amounting to EUR 0.05 per share on 10 October 2023.
The general meeting resolved that Sanna Suvanto-Harsaae, Markus
Hellström, Jyrki Mäki-Kala and Jens-Peter Poulsen be re-elected to the
Board and that Anette Rosengren be elected as new member to the
Board. The Board members’ term of office will end at the end of the next
Annual General Meeting. Satu Huber stepped down from the Board. Sanna
Suvanto-Harsaae continues to chair the Board. The general meeting further
resolved that the remuneration of the members of the Board of Directors
remain the same and that the Chair of the Board of Directors be paid a
monthly fee of EUR 4,000 and other members of the Board of Directors a
monthly fee of EUR 2,000.
Ernst & Young Oy, a firm of Authorised Public Accountants, was re-elected
the company’s auditor for a term of office ending at the end of the next
Annual General Meeting. As announced by Ernst & Young Oy, APA Mikko
Rytilahti acts as the signing audit partner succeeding APA Johanna
Winqvist-Ilkka. The remuneration of the auditor was resolved to be paid
according to a reasonable invoice approved by the Board.
In addition, the general meeting resolved to make technical amendments
to Articles 5 and 8, and to supplement the Article 10 of the Articles of
Association so that the general meeting of shareholders may also be held
completely without a physical meeting venue as a virtual meeting.
The general meeting also authorised the Board of Directors to issue or
convey a total maximum of 1,600,000 new shares and special rights
entitling to shares in one or several issues and to acquire a maximum of
175,000 shares in the company. The authorisations will be valid until 30
June 2024.
Further information about the decisions of the general meeting can be
found in the AGM documents, which are available on the corporate website
at Annual General Meeting 2023 – Orthex Group.
Board of Directors
On 31 December 2023, the company’s Board of Directors consisted of the
following members: Sanna Suvanto-Harsaae (Chair), Markus Hellström,
Jyrki Mäki-Kala, Jens-Peter Poulsen and Anette Rosengren.
Management’s ownership and remuneration
On 31 December 2023, the members of the Board of Directors, the CEO, and
other members of the Management Team, including their closely associated
persons and entities, owned a total of 3,024,104 shares in the company,
corresponding to 17.0% of the total number of shares. Information on the
shareholdings of the members of the Board of Directors, the CEO, and
other members of the Management Team is disclosed in the Corporate
Governance Statement 2023 and on the corporate website.
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Information on the remuneration of the members of the Board of Directors,
the CEO, and other members of the Management Team is disclosed in the
notes to the financial statements. The remuneration of the members of
the Board of Directors and the CEO is also described in the Remuneration
Report 2023.
Composition of Shareholders’ Nomination Board
The Extraordinary General Meeting on 5 March 2021 decided to establish
a Shareholders’ Nomination Board for the company and the Nomination
Board’s charter was approved. The Nomination Board consists of the four
largest registered shareholders of the company as of 31 August. According
to the shareholders’ register, the company’s four largest shareholders on
31 August 2023 were Conficap Oy, Alexander Rosenlew, Ilmarinen Mutual
Pension Insurance Company, and Thominvest Oy (former Thomasset Oy).
On 12 September 2023, the company announced that these shareholders
have appointed their representatives to the Shareholders’ Nomination
Board, the composition of which is as follows:
• Maarit Toivanen, Chair of the Board of Conficap Oy
• Alexander Rosenlew
• Annika Ekman, Head of Direct Equity Investments,
Ilmarinen Mutual Pension Insurance Company
• Mats Söderström, CEO of Thominvest Oy
The Nomination Board has elected Maarit Toivanen as its chair. The Chair
of Orthex’s Board of Directors, Sanna Suvanto-Harsaae, acts as an expert
member of the Nomination Board.
More information on the Nomination Board is available on the corporate
website at Nomination Board - Orthex Group.
Shares and shareholders
Orthex’s shares are listed on the main list of Nasdaq Helsinki Ltd since
March 2021.
At the end of the reporting period, Orthex Corporation’s registered share
capital amounted to EUR 80,000 and the registered number of issued
shares was 17,758,854. All shares carry one vote and have equal voting
rights. There are no voting restrictions associated with the shares. The
shares hold no nominal value. The trading code of the shares is “ORTHEX”,
and the ISIN code FI4000480504.
Trading volume during the period was EUR 7.3 million and 1,497,211 shares.
The highest price of the share was EUR 5.76 and the lowest was EUR 3.70.
The closing price of the share at the end of December was EUR 5.40. The
year-end market value of the share capital stood at EUR 95.9 million. The
company did not have any treasury shares at the end of the review period.
At year-end, the number of registered shareholders including nominee
registers was 15,587. The nominee-registered shares accounted for 11.8%
of the total number of shares and amounted to 2,099,534 shares. At the
end of the period, the ten largest registered shareholders possessed a total
of 50.0% of Orthex’s shares and votes.
Authorisations, option and share-based incentive
schemes
During 2023, Orthex did not have any share option or share-based incentive
schemes.
Orthex’s Board of Directors is authorised to issue or convey a total
maximum of 1,600,000 shares and special rights entitling to shares in
one or several issues. The Board of Directors is also authorised to acquire
a maximum of 175,000 shares in the company. The authorisations
will be valid until 30 June 2024. The Board of Directors has no
other authorisations.
Major shareholders 31 Dec 2023*
Shareholder
No. of
shares
% of
shares
Conficap Oy 2,486,240 14.00
Rosenlew Alexander 2,047,726 11.53
Ilmarinen Mutual Pension Insurance
Company
1,061,000 5.97
Thominvest Oy 761,000 4.29
Varma Mutual Pension Insurance
Company
639,350 3.60
OP-Finland Small Cap 506,901 2.85
Oy Julius Tallberg Ab 435,571 2.45
Fondita Nordic Micro Cap Investment
Fund
328,500 1.85
Ståhlberg Tom Christian 313,000 1.76
Aktia Capital Mutual Fund 300,000 1.69
Tot al 8,879,288 50.0
*)
Source: Euroclear Finland
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Share distribution 31 Dec 2023*
Number of shares Number of shareholders % of shareholders Number of shares % of shares
1-100 10,408 66.77 576,192 3.25
101-1,000 4,605 29.54 1,435,461 8.08
1,001-10,000 484 3.11 1,211,072 6.82
10,001-100,000 70 0.45 2,253,848 12.69
100,001-1,000,000 16 0.10 4,816,969 27.12
> 1,000,000 4 0.03 7,465,312 42.04
Tot al 15,587 100 17,758,854 100
Nominee registered 7 0.04 2,099,534 11.82
*)
Source: Euroclear Finland
Under the provisions of the Securities Market Act, changes in holdings
must be disclosed when the holding reaches, exceeds, or falls below
5, 10, 15, 20, 25, 30, 50 or 66,7 (2/3) per cent of the voting rights or
the number of shares in the company. The stock exchange releases on
notifications of changes in holdings (flaggings) are available on the corporate
website at https://investors.orthexgroup.com/media/.
Sector distribution 31 Dec 2023*
Sector
No. of
shares
% of
shares
Households 6,342,003 35.71
Private companies 4,984,389 28.07
Financial and insurance institutions 1,814,034 10.21
Public sector organisations 2,188,906 12.33
Non-profit institutions 308,922 1.74
Foreigners 21,066 0.12
Nominee registered 2,099,534 11.82
Tot al 17,758,85 4 100
*)
Source: Euroclear Finland
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Sustainability
Sustainability is a core element in implementing Orthex’s growth strategy and
key objectives as we strive to be the number one brand in storage products
in Europe, and to strengthen our position as a leading houseware company in
the Nordics. Sustainability is a key factor in all decision making at Orthex and
a significant driver of our development and investment agenda. For example,
a prerequisite for all new product investments is that the material should be
either recycled or renewable.
Orthex aims to be the industry forerunner in sustainability by offering
timelessly designed, high-quality, safe, and long-lasting products, reducing
the carbon footprint of its operations and products, and sourcing more and
more of its raw materials from renewable and recycled materials. Orthex’s
main sustainability target is to aim towards carbon neutrality in production
by 2030. The Science Based Targets initiative (SBTi) has approved Orthex’s
near-term science-based emissions reduction target, which means that
Orthex’s climate targets are aligned with the target to keep global warming
below 1.5°C in accordance with the Paris Agreement.
Orthex has identified priority sustainability topics in environmental, social
and governance (ESG) areas. For each topic, the company has defined key
performance indicators and targets. More information on the company’s
sustainability strategy, targets, and results for 2023 can be found in the
Annual and Sustainability Report’s dedicated section on sustainability.
Sustainability actions in 2023
During the first quarter of 2023, Orthex’s Lohja factory was audited and ISCC
PLUS certificate was renewed. Usage of ISCC PLUS certified renewable raw
materials applying the mass balance approach support Orthex’s long-term
carbon neutrality target, and the target to increase the share of sustainable
raw materials in production.
During the second quarter of the year, Orthex participated in Ecovadis ESG
assessment for the first time and was awarded with a silver medal for its
sustainability performance. The assessment results places Orthex globally
among the top 18 percent of companies assessed by EcoVadis, the world’s
largest and most trusted provider of business sustainability ratings. In May,
Orthex’s Gnosjö factory was granted an ISCC PLUS certificate, that will enable
the company to extend the usage of ISCC PLUS certified renewable raw
materials applying the mass balance approach in the production. In June,
Orthex was awarded the Nasdaq ESG Transparency Partner badge for 2022
ESG reporting.
During the third quarter of the year, Orthex extended its usage of ISCC PLUS
certified renewable raw materials applying mass balance approach in the
production into new products: SmartStore™ Vision dry food keepers and
SmartStore™ Snack lunch boxes as well as GastroMax™ measuring cups.
Each product has on average at least 20% of renewable content allocated
to it, according to the mass balance approach. In September, Orthex started
preparations for the entry into force of the Corporate Sustainability Reporting
Directive (CSRD), which will apply to the company from the beginning
of 2025.
During the last quarter of the year, Orthex renewed ISO 9001, 14001 and
45001 certificates for quality, environment and health and safety in all its
factories and offices in Finland and Sweden. These management systems
support Orthex’s journey for even better product quality, environmental
performance, and safety at work. In October, Orthex participated in a
competition for the most sustainable product in Finland with two products:
Orthex™ Paulina flowerpot and the SmartStore™ Collect sorting solution.
Out of almost 200 pre-screened products, the competition panel selected
Orthex’s SmartStore™ Collect sorting solution as one of the 16 finalists. The
purpose of this competition is to fight against greenwashing by highlighting
consumer products that support a sustainable lifestyle.
Orthex participates in two large research projects for the development of
recycled and renewable plastics. During 2023, Orthex tested the suitability of
recycled plastic for the food contact, and the results have been promising. In
addition, Orthex has mapped potential renewable raw material suppliers and
tested new renewable plastic raw materials. These significant investments
in research support Orthex’s 2030 carbon neutrality target and the target to
increase the use of sustainable raw materials.
Orthex reports on risk management and management practices related to
climate change in Climate Disclosure Project’s (CDP) climate change program
annually. Outcome of the 2023 CDP reporting was disclosed in February 2024,
and Orthex reached the highest Leadership level with a score A-.
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A comprehensive description of Orthex’s sustainable business practices is
included in the 2023 Annual and Sustainability Report’s dedicated section on
sustainability. As brought up in the sustainability report, the company has
continued its investments in building the roadmap towards carbon neutrality
and in the use of renewable and recycled materials to reduce the carbon
footprint of its products and production.
Risks and uncertainties
Risk management
The purpose of Orthex’s risk management is to ensure the fulfilment of
customer promises, business profitability, ability to pay dividends, value
creation for shareholders, responsible business, and business continuity. To
achieve this, Orthex strives to be aware of the uncertainties and risk factors
and opportunities associated with its objectives and operations, and to
identify, assess and manage risks and their consequences in a consistent and
effective manner.
Orthex’s risk management policy guides risk management in a way that
supports the achievement of the company’s objectives, protects personnel
and the company’s various assets, and ensures the financial sustainability of
operations.
The responsibility for implementing risk management lies with the
Management Team. In addition, each employee must be aware of and
manage the risks associated with their own operating environment and areas
of responsibility. The company’s Board of Directors approves the company’s
risk management policy and monitors and assesses the effectiveness of
risk management.
Risk management principles
Risk management is a systematic activity designed to ensure comprehensive
and appropriate risk identification, assessment, management, and control.
It is an integral part of Orthex’s planning and management process,
decision making, day-to-day management of operations, and monitoring
and reporting procedures. Risks are assessed and managed in a business-
oriented and thorough manner. This means that key risks, including ESG risks,
are systematically identified, evaluated, managed, monitored, and reported as
part of the business.
Risk management process and reporting
Orthex prioritises risks according to the importance of the risk by
assessing the impact, likelihood, and level of risk management of the risk
materialisation. Risk management measures address the most significant
risks through cost-effective and appropriate policy options.
The Management Team regularly monitors the implementation of risk
management. If necessary, corrective measures will be taken.
The Management Team reports to the Board of Directors on risks and risk
management measures 2-3 times a year. The Board reviews the most
significant risks, measures to manage them and assesses the efficiency and
effectiveness of risk management.
Risk classification
Risk refers to an event or circumstance that may hinder or prevent the
achievement of targets or may result in missing of business opportunities.
Orthex classifies risks in three groups:
• Strategic risks
• Operational risks
• Financial risks
Strategic risks refer to uncertainty that is primarily related to changes in the
operating environment and the ability to utilize or anticipate these changes.
These changes may relate, for example, to the general economic situation,
customer consumption behaviour, competition, legislation, or technological
developments. When assessing strategic risks and opportunities, the goal
is to find the business opportunities that are used to achieve the goals with
manageable risks, while avoiding those that present unreasonably high risks.
Operational risk means a circumstance or event that can prevent or hinder
the achievement of objectives or cause harm to people, property, business,
information, or the environment. Operational risks are avoided or reduced,
but in such a way, that the costs of risk avoidance are proportionate to the
magnitude of the risk.
Financial risks are those related to Orthex’s financial position. These include
e.g., availability and cost of finance, net working capital and liquidity, and
foreign exchange rate fluctuations. Orthex’s financial risk management is
described in the notes to the consolidated financial statements.
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Non-economic impacts are also considered when assessing risks. Reputation
risk arises if Orthex’s operations conflict with the expectations of various
stakeholders, such as customers, suppliers, regulators, or shareholders.
Responsible practices are key to preventing reputational risks. Reputation
risks are managed through timely and adequate communication.
Main strategic, operational, and financial risks
Risks relating to the macroeconomic environment
Cost inflation, interest rate levels, and geopolitical tensions impact the
global economic trend as well as the development of consumers’ purchasing
behaviour and, as a result, can have an impact on Orthex’s business. Russia’s
war against Ukraine or the conflict between Israel and Hamas do not
directly affect Orthex’s business as Orthex does not sell products to Russia,
Belarus, Ukraine, or Israel or source raw materials from these countries.
However, geopolitical tensions cause disturbances in global supply chains
and contribute to the general economic situation and consumers’ purchasing
power and behaviour. These factors may affect the company’s sales and
profitability as well as operational reliability and efficiency. The Group has
hedged part of its interest-bearing liabilities against rising interest rates with
interest derivatives. In addition, some of the electricity contracts have been
purchased at fixed prices due to the strong volatility of market electricity.
Risks relating to changes in competitive environment
Orthex operates in a competitive and fragmented home storage, kitchenware,
plant care and other household products market. Even though the markets
in which Orthex operates are fragmented, Orthex’s competitors may
consolidate, establish consortiums, or aim to expand their operations in the
future, which may increase competition in Orthex’s markets, including in the
Nordics. Any significant consolidation could create competitors with more
financial, technical, marketing, or other resources that would enable them
to assign more resources to the sale of household goods than currently,
which, in turn, could have an adverse effect on Orthex’s business and
growth opportunities.
Risks relating to sourcing of raw materials
Plastic polymers are the largest group of raw materials used in the
production of Orthex’s products. Raw material prices are typically negotiated
annually based on estimated volumes for the year ahead. Orthex does
not hedge against raw material price fluctuations. Accordingly, Orthex’s
profitability is particularly exposed to fluctuations in virgin plastic polymer
(produced directly from crude oil and never been used or processed before)
prices, which have historically fluctuated to a certain extent in line with crude
oil price fluctuations.
Orthex also uses renewable and recycled materials in the production of its
products and sells products entirely sourced from external suppliers, as well
as products that are partly produced in-house and partly consist of externally
sourced components. The prices of these raw materials and traded goods
have not historically been subject to the same level of fluctuation as virgin
plastic polymers. However, there has been shortage on the market because
of higher demand and this can lead to higher prices also in renewable
and recycled materials. If Orthex is unable to offset price increases in raw
materials and traded goods, whether through price increases or otherwise, or
should there be significant disruptions in their availability, this could have a
material adverse effect on Orthex’s profitability and/or margins.
In the comparison period 2022, the raw material prices were at an
exceptionally high level throughout the year, and this had an adverse effect
on Orthex’s profitability. During 2023, the raw material price level was more
normal. Fluctuations in the raw material prices may continue to have an
adverse effect on Orthex’s profitability.
Risks relating to quality of products
Thanks to its own production, Orthex can control the quality of its products
and the health and environmental aspects of production and products.
Although Orthex has several quality control measures in place, there can
be no assurances that such measures will always be adequate to detect
potential product quality defects.
Any significant quality issue may require a considerable amount of
management resources. Responding to detected or suspected quality issues,
for example, by proactively adjusting production processes or by switching
the materials or components used, usually gives rise to costs that may be
significant. Such events may also lead to product recalls, product liability or
warranty claims, and contractual liabilities towards Orthex’s customers and/
or end-customers, or to third-party claims. Product quality issues or product
recalls may also harm Orthex’s reputation and lead to loss of customers.
Furthermore, Orthex’s insurance coverage does not cover claims based on
quality issues and product liability claims concerning Orthex’s products.
Realisation of the aforementioned risks may have a material adverse
effect on Orthex’s business, results of operations, financial position, and/
or reputation.
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Risks relating to changes in customer preferences
Several megatrends and consumer preferences have been driving the
demand in the home storage, food storage and kitchen utensils markets in
recent years, including population growth, urbanisation, changes in the form
of housing, sustainability, and design preferences among the end-customers
of Orthex’s products. Changes in consumer preferences could relate to,
among others, improved functionality, higher quality, innovative solutions,
new technologies, attractive design, and new and more advanced materials.
If Orthex is unable to successfully anticipate and identify changing consumer
preferences, Orthex could lose its market share in the Nordics, its sales
development may be slower than expected, and it may be forced to rely on
price reductions to dispose of excess or slow-moving inventory or to make
significant investments in the future to remain competitive. Any of these
could have a material adverse effect on Orthex’s business, financial position
and/or results of operations.
Risks relating to production facilities and warehouse
operations
As Orthex’s production largely relies on its own production facilities, events
that would cause significant disruptions in or the suspension of Orthex’s
production facilities could materially affect Orthex’s ability to deliver its
products to its customers in a timely manner. Orthex’s production facilities
may be damaged or destroyed, or they may be closed or the equipment on
the premises may be damaged due to, for example, fire, accident, natural
disaster, or equivalent events beyond Orthex’s control. Similarly, Orthex’s
warehouses could be subject to similar events, which could destroy all or
part of Orthex’s inventory. Such events or incidents could result in material
disruptions and delays in Orthex’s production and deliveries and in Orthex
not necessarily being able to fulfil its obligations to its customers. If Orthex
were unable to locate alternative production facilities, transfer production
to Orthex’s other production facilities or to repair the damaged premises or
equipment in a timely and cost-effective manner, such conditions could have
a material adverse effect on Orthex’s business, financial position and/or
results of operations.
Risks relating to IT infrastructure and systems
Difficulties in maintaining and updating IT infrastructure, deficiencies in
IT systems, and external cyber-attacks related to IT systems may have an
adverse effect on Orthex. Orthex uses information technology infrastructure,
applications and software products that cover essential aspects of its
business, such as production, inventory management, logistics, human
resources, finances, and other administrative systems. Orthex’s IT systems
and infrastructure may be vulnerable to cybersecurity risks, including
cyber-attacks, direct or indirect, such as computer viruses and worms,
phishing attacks, and penetrating or bypassing security measures in order
to gain unauthorised access to Orthex’s information networks and systems.
Exploitation of possible weaknesses in Orthex’s security controls could
disrupt its business and cause leakage of sensitive information, theft of
intellectual property and damage to Orthex’s reputation.
Risks relating to management and employees
The success of Orthex’s business and strategy depends on Orthex’s ability
to attract and retain key management and production personnel. The loss
of management or key personnel may result in the loss of expertise or, in
certain circumstances, the transfer of expertise to Orthex’s competitors. In
addition, Orthex’s production processes require qualified, skilled production
workers (particularly with specialized training and knowledge of plastic).
In accordance with its current strategy, in addition to strengthening its
market position in the Nordics, Orthex will focus on accelerating its growth in
the international markets outside the Nordics, which imposes new demands
to Orthex’s management and personnel. Orthex’s geographical expansion
also requires the recruitment of additional personnel. If Orthex is not
successful in recruiting and retaining qualified key personnel, this may have
an adverse effect on Orthex’s business.
Risks relating to regulation and compliance
With operations in several countries, Orthex is subject to a variety of laws and
regulations, and potential violations of such laws and regulations could have
an adverse effect on Orthex. Orthex must comply with laws and regulations
enacted at both the national and EU level concerning its operations in
relation to matters including health, safety, consumer protection and
marketing, general product safety, environment, employment, competition,
company law, data protection, international trade, and taxation in all
countries in which Orthex pursues business. Failure to comply with applicable
laws and regulations may cause Orthex financial losses, undermine Orthex’s
business opportunities and harm Orthex’s reputation.
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Risks relating to taxation
Orthex’s tax burden depends on certain tax laws and regulations and their
application and interpretation (for example, with regard to transfer pricing
rules). Changes in tax laws and regulations or their interpretation and
application may increase Orthex’s tax costs to a significant degree, which
could have an adverse effect on Orthex’s financial position and/or results
of operations. In addition, Orthex may at times be subject to tax audits
conducted by national tax authorities. Tax audits or other auditing measures
carried out by tax or other authorities, such as customs officials, could result
in an imposition of additional taxes (such as income taxes, taxes at source
and property, capital, transfer, and value-added taxes), which could lead to an
increase in Orthex’s tax liability.
Orthex Group was subject to a tax audit of Orthex Corporation regarding
the financial years 2020 and 2021. Orthex Corporation received early in May
2022 a tax audit report from the Finnish tax authorities including subsequent
taxes and tax increases amounting to a total of EUR 0.3 million relating to
the VAT deductibility of IPO related costs. The company disagrees with the
interpretation made in the tax audit and has filed a claim for adjustment
to its taxation with the Assessment Adjustment Board of the Finnish tax
authority. However, the company was requested to pay additional taxes in
accordance with the interpretations set out in the tax audit report and the
company paid the subsequent taxes and tax increases in June 2022. The
Group has not recognised the subsequent taxes and tax increases in the
consolidated statement of comprehensive income. At the time of publishing
this report, the company’s claim for adjustment was still pending.
Risks relating to currency fluctuations
Orthex has operations in several countries, so the company is exposed to
transaction and translation risk related mainly to the Swedish krona, the
Norwegian krone, the Danish krone, the British pound sterling and the
U.S. dollar. The Group is typically not hedged against currency risk, except
for certain large purchases under the Kökskungen brand. Fluctuations in
exchange rates have had and may continue to have a material adverse effect
on Orthex’s results of operations.
Risks relating to liquidity
Orthex currently finances its business and investments with operational
cash flows and debt financing. Sufficient cash flow is required for Orthex’s
business and maintaining its ability to service its debt. There can be no
assurance that Orthex will be able to secure financing to a sufficient extent
and on competitive terms to finance its business and investments. Changes
in the macroeconomic environment or in the general financial markets may
have an adverse effect on the availability, price, and other terms of financing.
Changes in the availability of equity and debt financing and in the terms of
the financing available may influence Orthex’s ability to invest in developing
and growing its business in the future. If Orthex is not able to obtain
financing on competitive terms or at all, this may have a material adverse
effect on Orthex’s business, financial position and/or results of operations.
ESG risks
Orthex assesses ESG risks as a part of its systematic risk management
process. During 2023, ESG risks were reviewed and the following most
significant ESG risks were identified: unfavourable changes in environmental
and other related legislation, product safety related issues, and employee
health and safety related risks. To mitigate these risks, Orthex actively
monitors applicable legislation, uses accredited test laboratories for
food contact testing, and systematic health and safety process has been
implemented through the work environment committee. Failure to comply
with environmental legislation, product safety regulations or laws and
regulations applicable to employee health and safety may cause Orthex
financial losses, undermine Orthex’s business opportunities and harm
Orthex’s reputation.
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Board of Directors’ proposal for the
use of the profit shown on the balance
sheet and resolution on the distribution
of dividends
According to the financial statements to be adopted for the financial year
ended 31 December 2023, the parent company’s distributable funds amount
to EUR 18,987,687.26, including the profit for the period of EUR 8,636,002.00.
The Board of Directors proposes to the general meeting that based on
the financial statements to be adopted for the financial year ended on
31 December 2023, shareholders be paid a dividend of EUR 0.21 per share
totalling approximately EUR 3.7 million based on the number of registered
shares in the company at the time of the proposal.
The dividend is proposed to be paid in two instalments as follows:
• The first instalment of the dividend amounting to EUR 0.11 per share will
be paid to a shareholder who is registered in the company’s shareholder
register held by Euroclear Finland Oy on the record date of the first
instalment of the dividend payment 11 April 2024. The Board of Directors
proposes that the first instalment of the dividend be paid on 18 April 2024.
• The second instalment of the dividend amounting to EUR 0.10 per share
will be paid in October 2024 to a shareholder who is registered in the
company’s shareholder register held by Euroclear Finland Oy on the
record date of the second instalment of the dividend payment 2 October
2024. The Board of Directors proposes that the second instalment of
the dividend be paid on 9 October 2024. The Board of Directors further
proposes that the Board be authorised to decide, if necessary, on a new
record date and date of payment for the second instalment of the dividend
should the rules of Euroclear Finland Oy or statutes governing the Finnish
book-entry system change or otherwise so require.
There have been no significant changes in the parent company’s financial
position after the financial year-end. The company’s liquidity is good, and the
Board of Directors deems that the company’s solvency will not be jeopardised
by the proposed dividend distribution.
Events after the financial year
On 9 January 2024, Orthex Corporation announced that Peter Ottosson,
member of Orthex’s Management Team and Operations Director of the
Gnosjö factory, has decided to leave his position to assume a role with
another employer. Mr Ottosson will continue in his current role until the
month of May. Orthex has started the succession planning process.
On 30 January 2024, Orthex Corporation disclosed the Shareholders’
Nomination Board’s proposals to the Annual General Meeting 2024 regarding
the composition and remuneration of the Board of Directors.
The Shareholders’ Nomination Board proposes that the Board of Directors
would consist of five (5) members and that Sanna Suvanto-Harsaae, Markus
Hellström, Jyrki Mäki-Kala, Jens-Peter Poulsen and Anette Rosengren be
re-elected to the Board, all for a term of office ending at the end of the next
Annual General Meeting.
All director nominees have consented to their election and confirmed that
they are independent of the company and its significant shareholders.
Background information on the director nominees is available on the
corporate website at Board of Directors - Orthex Group.
Regarding the remuneration of the members of the Board of Directors, the
Shareholders’ Nomination Board proposes that the Board fees remain the
same and that the Chair of the Board of Directors be paid a monthly fee of
EUR 4,000 and other members of the Board of Directors a monthly fee of
EUR 2,000. The Nomination Board further proposes that reasonable travel
and other expenses related to the Board work be reimbursed in accordance
with the company’s travel rules.
On 14 February 2024, Orthex announced that Operations Director Tom
Ståhlberg has been appointed Chief Supply Officer (CSO) assuming the overall
responsibility for Orthex production, supply chain and purchasing starting 1
March 2024. The change also removed the need to replace Peter Ottosson’s
position in the Management Team.
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Market outlook
Global volatility, cost inflation, consumer and customer uncertainty, and weak
exchange rates in Sweden and Norway affected the business environment
during 2023. Whilst inflation pressures eroded consumer demand in the first
half of the year, demand recovered towards the end of the year.
To ensure effective implementation and adoption of its strategy, Orthex
is constantly evaluating consumer trends, customer demands and market
conditions. The strategy is designed to deliver the specified long-term
financial targets. In addition, an overall focus on sustainability is at the heart
of the business development.
In 2023, raw material prices stabilised from exceptionally high levels a year
before. The price level in 2024 will be affected by the development of the
demand for plastic raw materials and the potential escalation of the crisis
in the Middle East. The European Central Bank’s forecast says that inflation
pressures will ease in 2024 and the increase in earnings level will help the
private consumption to recover. Orthex will follow the market trends and
strive to navigate through changing conditions as efficiently as possible.
Orthex long-term target is to exceed 10 percent growth in organic net sales
outside the Nordics. In 2023, invoiced sales in the Rest of Europe grew 16.4
percent. International distribution build-up is progressing according to plan,
delivering a growing base of customers and point of sales throughout Europe.
In addition, Orthex has strengthened its international sales organisation
supporting the positive sales development in the Rest of Europe in 2024.
Russia’s war against Ukraine or the conflict between Israel and Hamas do not
directly affect Orthex’s business as Orthex does not sell products to Russia,
Belarus, Ukraine, or Israel or source raw materials from these countries.
However, geopolitical tensions cause disturbances in global supply chains and
contribute to the general economic trend and consumers’ purchasing power
and behaviour.
Espoo, 4 March 2024
Board of Directors
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EUR thousand 2023 2022 2021
Net sales 85,945 84,048 88,694
Net sales growth, % 2.3% -5.2% 16.9%
Constant currency net sales growth, % 5.3% -3.8% 15.7%
Invoiced sales 87, 989 85,794 90,552
Invoiced sales growth, % 2.6% -5.3% 16.3%
Gross margin 24,320 17, 919 23,204
Gross margin, % 28.3% 21.3% 26.2%
EBITDA 14,892 9,15 4 13,226
EBITDA margin, % 17. 3% 10.9% 14.9%
EBITA 10,863 5,317 9,380
EBITA margin, % 12.6% 6.3% 10.6%
Operating profit 10,750 5,191 9,250
Operating profit margin, % 12.5% 6.2% 10.4%
Items affecting comparability 55 173 1,616
Adjusted gross margin 24,320 17,919 23,279
Adjusted gross margin, % 28.3% 21.3% 26.2%
Adjusted EBITDA 14,947 9,328 14,842
Adjusted EBITDA margin, % 17.4% 11.1% 16.7%
Adjusted EBITA 10,918 5,490 10,996
Adjusted EBITA margin, % 12.7% 6.5% 12.4%
Adjusted operating profit 10,805 5,364 10,867
Adjusted operating profit margin, % 12.6% 6.4% 12.3%
FTEs 281 295 314
Personnel expenses 17,921 18,300 19,693
EUR thousand 2023 2022 2021
Key cash flows indicators
Net cash flows from operating activities 10,169 6,177 8,979
Operating free cash flows 12,353 5,774 10,046
Cash conversion, % 82.6% 61.9% 67.7%
Investments in tangible and intangible assets -2,594 -3,553 -4,797
Financial position key figures
Net debt 22,317 26,028 25,887
Net debt / adjusted EBITDA last 12 months 1.5x 2.8x 1.7x
Net working capital 14,266 13,670 14,482
Capital employed excluding goodwill 34,462 33,487 34,004
Return on capital employed (ROCE), % 31.6% 15.4% 28.1%
Adjusted return on capital employed (ROCE), % 31.8% 15.9% 33.0%
Equity ratio, % 40.2% 36.3% 35.8%
Return on equity, % 21.5% 6.9% 24.7%
Key figures
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Share-related key figures
EUR 2023 2022 2021
Earnings per share, basic (and diluted) 0.39 0.12 0.35
Equity per share 1.94 1.67 1.79
Effective dividend yield, % 3.9% 2.4% 1.6%
Price per earnings 13.91 3 9.19 31.88
Closing share price on the last day of trading 5.40 4.68 11.04
Highest 5.76 11. 29 12.50
Lowest 3.70 3.82 7.3 0
Market value of shares at the end of period, EUR
million
95.9 8 3.1 19 6.1
No. of shares traded, pcs 1, 4 97, 211 5,653,412 21,933,614
Of weighted average number of shares, % 8.4% 31.8% 125.9%
No. of shares outstanding at the end of the period,
pcs 17,75 8 , 85 4 17,75 8 , 85 4 17,75 8 , 85 4
Weighted average number of shares outstanding,
pcs
17,75 8 , 85 4 17,75 8 , 85 4 17,425,944
Dividend payout and capital return per share total 0.21*) 0.11 0.18
Dividend payout and capital return per share,
total of result, % 5 4.1% 92.1% 52.0%
*) Board of Directors’ proposal
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EUR thousand 2023 2022 2021
Net sales growth, %
Net sales 85,945 84,048 88,694
Net sales growth, % 2.3% -5.2% 16.9%
Constant currency Net sales growth, %
Net sales 85,945 84,048 88,694
FX rate adjustment - -2,412 -1,291
Constant currency Net sales 85,945 81,636 87,403
Constant currency Net sales growth, % 5.3% -3.8% 15.7%
Invoiced sales
Net sales 85,945 84,048 88,694
Discounts and bonuses 3,715 3,182 3,067
Other sales and refunds -1,672 -1,437 -1,209
Invoiced sales 87,989 85,794 90,552
Invoiced sales growth, % 2.6% -5.3% 16.3%
Gross margin
Net sales 85,945 84,048 88,694
Cost of sales -61,625 - 66,129 -65,490
Gross margin 24,320 17,919 23,204
Gross margin, % 28.3% 21.3% 26.2%
EUR thousand 2023 2022 2021
EBITDA
Operating profit 10,750 5,191 9,250
Depreciation, amortisation and impairment 4,142 3,964 3,976
EBITDA 14,892 9,15 4 13,226
EBITDA margin, % 17. 3% 10.9% 14.9%
EBITA
Operating profit 10,750 5,191 9,250
Amortisation and impairment 113 126 129
EBITA 10,863 5,317 9,380
EBITA margin, % 12.6% 6.3% 10.6%
Operating profit
Operating profit 10,750 5,191 9,250
Operating profit margin, % 12.5% 6.2% 10.4%
Items affecting comparability / adjustments
(Gross margin)
Other items affecting comparability - - 75
Items affecting comparability / adjustments
(Gross margin) - - 75
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EUR thousand 2023 2022 2021
Items affecting comparability / adjustments
(EBITDA)
Other items affecting comparability 55 173 85
Costs related to listing - - 1,531
Items affecting comparability / adjustments
(EBITDA) 55 173 1,616
Adjusted gross margin
Gross margin 24,320 17, 919 23,204
Adjustments (gross margin) - - 75
Adjusted gross margin 24,320 17,919 23,279
Adjusted gross margin, % 28.3% 21.3% 26.2%
Adjusted EBITDA
Operating profit 10,750 5,191 9,250
Depreciation, amortisation and impairment 4,142 3,964 3,976
Adjustments (EBITDA) 55 173 1,616
Adjusted EBITDA 14,947 9,328 14,842
Adjusted EBITDA margin, % 17.4% 11.1% 16.7%
Adjusted EBITA
Operating profit 10,750 5,191 9,250
Amortisation and impairment 113 126 129
Adjustments (EBITA) 55 173 1,616
Adjusted EBITA 10,918 5,490 10,996
Adjusted EBITA margin, % 12.7% 6.5% 12.4%
EUR thousand 2023 2022 2021
Adjusted operating profit
Operating profit 10,750 5,191 9,250
Adjustments 55 173 1,616
Adjusted operating profit 10,805 5,364 10,867
Adjusted operating profit margin, % 12.6% 6.4% 12.3%
Earnings per share, basic (and diluted), EUR
Profit for the period 6,892 2,121 6,035
Weighted average number of shares outstanding 17,759 17,759 17,426
Earnings per share, basic (and diluted), EUR 0.39 0.12 0.35
Operating free cash flows
Adjusted EBITDA 14,947 9,328 14,842
Investments in tangible and intangible assets -2,594 -3,553 -4,797
Operating free cash flows 12,353 5,774 10,046
Cash conversion, %
Operating free cash flows 12,353 5,774 10,046
Adjusted EBITDA 14,947 9,328 14,842
Cash conversion, % 82.6% 61.9% 67.7%
Net debt
Total interest-bearing liabilities 33,885 36,312 40,220
Cash and cash equivalents -11,568 -10,284 -14,334
Net debt 22,317 26,028 25,887
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EUR thousand 2023 2022 2021
Net debt/ Adjusted EBITDA
Net debt 22,317 26,028 25,887
Adjusted EBITDA, 12 months 14,947 9,328 14,842
Net debt/ Adjusted EBITDA 1.5x 2.8x 1.7x
Net working capital
Inventories 12,088 14,283 12,647
Trade and other receivables 17, 8 66 13,387 15,528
Trade and other payables -15,687 -14,000 -13,692
Net working capital 14,266 13,670 14,482
Capital employed excluding goodwill
Total equity 34,436 29,711 31,798
Net debt 22,317 26,028 25,887
Goodwill -22,292 -22,252 -23,680
Capital employed excluding goodwill 34,462 33,487 34,004
Return on capital employed (ROCE), %
Operating profit 10,750 5,191 9,250
Average capital employed excluding goodwill 33,975 33,746 32,920
Return on capital employed (ROCE), % 31.6% 15.4% 28.1%
EUR thousand 2023 2022 2021
Adjusted return on capital employed (ROCE), %
Adjusted operating profit 10,805 5,364 10,867
Average capital employed excluding goodwill 33,975 33,746 32,920
Adjusted return on capital employed (ROCE), % 31.8% 15.9% 33.0%
Equity ratio, %
Total equity 34,436 29,711 31,798
Total assets 85,568 81,837 88,842
Equity ratio, % 40.2% 36.3% 35.8%
Return on equity, %
Profit for the period 6,892 2,121 6,035
Total equity (average for the first and last day of the
period) 32,074 30,754 24,410
Return on equity, % 21.5% 6.9% 24.7%
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Calculation of key figures
IFRS key figures
Earnings per
share,
basic (and diluted)
= Profit for the period attributable to the
owners of the parent / Weighted average
number of shares outstanding
Alternative performance measures
Orthex presents alternative performance measures as additional information
to financial measures presented in the consolidated income statement,
consolidated balance sheet and consolidated statement of cash flows
prepared in accordance with IFRS. In Orthex’s view, alternative performance
measures provide significant additional information on Orthex’s results of
operations, financial position and cash flows to management, investors,
analysts, and other stakeholders.
Alternative performance measures should not be viewed in isolation or as
a substitute to the IFRS financial measures. All companies do not calculate
alternative performance measures in a uniform way, and therefore Orthex’s
alternative performance measures may not be comparable with similarly
named measures presented by other companies.
Key figure Formula
Constant currency net sales growth, % Net sales growth calculated by using previous year’s revenue translated at average foreign
exchange rates for the current year
Invoiced sales Product sales to resale customers excluding off invoice discounts, customer bonuses and
cash discounts
Invoiced sales growth, % Increase in invoiced sales
Gross margin Net sales less Cost of sales
Gross margin, % Gross margin / Net sales
EBITDA Operating profit before depreciation, amortisation and impairment
EBITDA margin, % EBITDA / Net sales
EBITA Operating profit before amortisation and impairment
EBITA margin, % EBITA / Net sales
Operating profit Operating profit
Operating profit margin, % Operating profit / Net sales
Items affecting comparability Material items outside ordinary course of business including restructuring costs, net
gains or losses from sale of business operations or other non-current assets, strategic
development projects, external advisory costs related to capital reorganisation, impairment
charges on non-current assets incurred in connection with restructurings, compensation
for damages and transaction costs related to business acquisitions
Adjusted gross margin Gross margin excluding items affecting comparability
Adjusted gross margin, % Adjusted gross margin / Net sales
Adjusted EBITDA EBITDA excluding items affecting comparability
Adjusted EBITDA margin, % Adjusted EBITDA / Net sales
Adjusted EBITA EBITA excluding items affecting comparability
Adjusted EBITA margin, % Adjusted EBITA / Net sales
Adjusted operating profit Operating profit excluding items affecting comparability
Adjusted operating profit margin, % Adjusted operating profit / Net sales
Net cash flows from operating activities Net cash from operating activities as presented in the consolidated statement of cash flows
Operating free cash flows Adjusted EBITDA less investments in tangible and intangible assets
Cash conversion, % Operating free cash flows / Adjusted EBITDA
Part of the Board of Directors’ report
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Key figure Formula
Investments in tangible and intangible assets Investments in tangible and intangible assets as presented in the consolidated statement
of cash flows
Net debt Current and non-current interest-bearing liabilities less cash and cash equivalents
Net debt / adjusted EBITDA last 12 months Net debt / Adjusted EBITDA
Net working capital Inventories, trade and other receivables less trade and other payables
Capital employed excluding goodwill Total equity and net debt and less goodwill
Return on capital employed (ROCE), % Operating profit / Average capital employed excluding goodwill
Adjusted return on capital employed (ROCE), % Adjusted operating profit / Average capital employed excluding goodwill
Equity ratio, % Total equity / Total assets
Return on equity, % Profit for the period / Total equity (average for the first and last day of the period)
Share-related key figures
Equity per share, EUR Total equity attributable to the equity holders of the parent / Number of outstanding shares
at the end of the financial year
Effective dividend yield, % Dividend/share / Price of share at the end of the accounting period
Price per earnings, EUR Closing price of share at the end of the financial year / Earnings per share
Market value of shares at the end of period Number of shares at the end of accounting period x Price of the
share at the end of accounting period
Dividend payout and capital return per share, total
of result, %
(Dividend/share + Return of capital/share) / Earnings per share
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Consolidated income statement
EUR thousand Note
Jan 1 - Dec 31
2023
Jan 1 - Dec 31
2022
Net Sales 2 85,945 84,048
Cost of sales -61,625 -66,129
Gross Margin 24,320 17,919
Other operating income 3 811 206
Selling and marketing expenses -9,237 -7,846
Administrative expenses -5,143 -5,089
Operating profit 10,750 5,191
Financial income and expenses 6 -2,231 -2,182
Profit before taxes 8,520 3,009
Income taxes 7 -1,628 -888
Profit for the period 6,892 2,121
Profit for the period attributable to:
Equity holders of the parent 6,892 2,121
Earnings per share for profit attributable
to the equity holders of the parent:
Earnings per share, basic (and diluted), EUR 0.39 0.12
Consolidated statement of comprehensive income
EUR thousand Note
Jan 1 - Dec
31 2023
Jan 1 - Dec
31 2022
Profit for the period 6,892 2,121
Other comprehensive income
Items that may be reclassified subsequently to profit or
loss:
Translation differences 85 -2,053
Items that will not be reclassified to profit or loss:
Remeasurement gains (+) / losses (-) from defined benefit
plans
5 -298 1,042
Other comprehensive income for the period, net of tax -213 -1,011
Total comprehensive income for the period 6,679 1,110
Total comprehensive income attributable to:
Equity holders of the parent 6,679 1,110
Consolidated financial statements, IFRS
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Consolidated statement of financial position
EUR thousand Note 31 Dec 2023 31 Dec 2022
ASSETS
Non-current assets
Intangible assets 8 22,303 22,377
Property, plant and equipment 9 13,942 13,547
Right-of-use assets 10 6,999 7,011
Other non-current assets 107 95
Deferred tax assets 7 695 760
Total non-current assets 44,046 43,790
Current assets
Inventories 13 12,088 14,283
Trade and other receivables 14 17,866 13,387
Derivative financial instruments 11 - 93
Cash and cash equivalents 11 11,568 10,284
Total current assets 41,522 38,047
TOTAL ASSETS 85,568 81,837
EUR thousand Note 31 Dec 2023 31 Dec 2022
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the parent
company
Share capital 80 80
Invested unrestricted equity fund 7,851 7,851
Retained earnings 26,941 22,301
Translation differences -436 -521
Total equity 11 34,436 29,711
Non-current liabilities
Loans from credit institutions 11 19,391 22,363
Lease liabilities 10, 11 6,629 6,480
Pension liabilities 5, 11 3,613 3,179
Deferred tax liabilities 7 796 769
Total non-current liabilities 30,429 32,791
Current liabilities
Loans from credit institutions 11 3,000 3,000
Lease liabilities 10, 11 1,252 1,290
Trade and other payables 15 15,687 14,000
Derivative financial instruments 11 41 8
Income tax liabilities 723 1,037
Total current liabilities 20,703 19,335
Total liabilities 51,132 52,126
TOTAL EQUITY AND LIABILITIES 85,568 81,837
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Consolidated statement of changes in equity
Equity attributable to the equity holders of the parent company
EUR thousand Share capital
Invested unrestricted
equity fund Retained earnings
Translation
differences Total equity
1 Jan 2023 80 7,851 22,301 -521 29,711
Profit for the period 6,892 6,892
Translation differences 85 85
Remeasurement gains (+) / losses (-) from defined benefit plans -298 -298
Total comprehensive income for the period 6,593 85 6,679
Transactions with owners:
Dividends paid -1,953 -1,953
31 Dec 2023 80 7,851 26,941 -436 34,436
1 Jan 2022 80 11,047 19,138 1,532 31,798
Profit for the period 2,121 2,121
Translation differences -2,053 -2,053
Remeasurement gains (+) / losses (-) from defined benefit plans 1,042 1,042
Total comprehensive income for the period 3,163 -2,053 1,110
Transactions with owners:
Capital return from the invested unrestricted equity fund -3,197 -3,197
31 Dec 2022 80 7,851 22,301 -521 29,711
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Consolidated statement of cash flows
EUR thousand Note
1 Jan - 31 Dec
2023
1 Jan - 31 Dec
2022
Cash flows from operating activities
Profit before taxes 8,520 3,009
Adjustments:
Depreciation, amortisation and impairment 4 4,142 3,964
Financial income and expenses 6 2,230 2,182
Other adjustments -206 204
Cash flows before changes in working capital 14,686 9,358
Changes in working capital
Decrease (+) / increase (–) in trade and other receivables -4,383 1,324
Decrease (+) / increase (–) in inventories 2,196 -2,358
Decrease (–) / increase (+) in trade and other payables 1,346 1,155
Cash flows from operating activities before financial
items and taxes 13,845 9,479
Interests paid -1,918 -1,135
Income taxes paid -1,757 -2,167
Net cash flows from operating activities 10,170 6,177
Cash flows from investing activities
Investments in tangible and intangible assets -2,594 -3,553
Sale of tangible and intangible assets - 28
Net cash flows from investing activities -2,594 -3,525
EUR thousand Note
1 Jan - 31 Dec
2023
1 Jan - 31 Dec
2022
Cash flows from financing activities
Repayment of lease liabilities 10 -1,329 -1,312
Proceeds from long-term borrowings - 25,500
Repayment of long-term borrowings - -25,500
Repayment of short-term borrowings 11 -3,000 -1,500
Capital return from the invested unrestricted equity fund 16 - -3,197
Dividends paid 16 -1,953 -
Net cash flows from financing activities -6,283 -6,008
Net change in cash and cash equivalents 1,293 -3,356
Net foreign exchange differences 11 -9 -694
Cash and cash equivalents at 1 January 10,284 14,334
Cash and cash equivalents at 31 December 11,568 10,284
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Parent company financial statements, FAS
Parent company income statement
EUR Note
1 Jan - 31 Dec
2023
1 Jan - 31 Dec
2022
Net sales 2 840,000.00 840,000.00
Administrative expenses -1,313,057.17 -1,129,658.85
Operating profit - 473,057.17 -289,658.85
Interest income from group companies 632,065.24 596,288.04
Dividends received from group companies 7,000,000.00 2,000,000.00
Other interest and financial income from others 59,602.27 0.01
Interest and financial expenses to others -1,578 ,15 0.03 -640,831.85
Financial income and expenses 5 6,113,517.48 1,955,456.20
Profit (loss) before appropriations and taxes 5,640,460.31 1,665,797.3 5
Appropriations
Group contribution 6 3,400,000.00 3,100,000.00
Income taxes 7 -404,458.31 -462,066.80
Profit (loss) for the period 8,636,002.00 4,303,730.55
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Parent company balance sheet
EUR Note 31 Dec 2023 31 Dec 2022
ASSETS
NON-CURRENT ASSETS
Investments
Holdings in subsidiaries 8 25,295,133.29 25,295,133.29
Receivables from subsidiaries 8 11,16 6,487.06 10,534,421.82
Investments total 36,461,620.35 35,829,555.11
NON-CURRENT ASSETS TOTAL 36,461,620.35 35,829,555.11
CURRENT ASSETS
Short-term receivables
Receivables from subsidiaries 9 5,481,359.46 2,402,779.70
Prepayments and accrued income 10 261,157.41 360,668.86
Short-term receivables total 5,742,516.87 2,763,448.56
Cash and cash equivalents 148,760.99 135,414.20
CURRENT ASSETS TOTAL 5,891,277.86 2,898,862.76
ASSETS TOTAL 42,352,898.21 38,728,417.87
EUR Note 31 Dec 2023 31 Dec 2022
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital 80,000.00 80,000.00
Invested unrestricted equity fund 8,430,263.84 8,430,263.84
Retained earnings 1,921,421.42 - 428 ,835.19
Profit (loss) for the period 8,636,002.00 4,303,730.55
SHAREHOLDERS’ EQUITY TOTAL 11 19,067,687.26 12,385,159.20
LIABILITIES
Long-term liabilities
Loans from credit institutions 12 19,500,000.00 22,500,000.00
Long-term liabilities total 19,500,000.00 22,500,000.00
Short-term liabilities
Loans from credit institutions 12 3,000,000.00 3,000,000.00
Income tax liabilities 404,458.31 462,066.80
Trade payables 18,646.07 56,800.19
Other payables 46,026.94 3 8,135.64
Accruals and deferred income 13 316,079.63 286,256.04
Short-term liabilities total 3,785,210.95 3,843,258.67
LIABILITIES TOTAL 23,285,210.95 26,343,258.67
SHAREHOLDERS’ EQUITY AND LIABILITIES
TOTAL
42,352,898.21 38,728,417.87
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Parent company statement of cash flows
EUR Note
1 Jan - 31 Dec
2023
1 Jan - 31 Dec
2022
Cash flows from operating activities
Profit before appropriations and tax 5,640,460.31 1,665,797.35
Adjustments:
Financial income and expenses 5 - 8,113,517. 48 -1,955,456.20
Other adjustments 0.01 -44,630.90
Cash flows before changes in working capital -2,473,057.16 -334,289.75
Changes in working capital
Decrease (+) / increase (–) in trade and other
receivables
2,160,533. 9 6 -239,680.53
Decrease (–) / increase (+) in trade and other
payables
-439.23 2,065,610.05
Cash flows from operating activities before
financial items and taxes -312,962.43 1,491,639.77
Interests and other financing expenses paid -1,578,150.03 -596,200.95
Dividends received 5,088,672.52 -
Income taxes paid -462,066.80 -
Net cash flows from operating activities 2,735,493.26 895,438.82
Cash flows from investing activities
Net cash flows from investing activities - -
EUR Note
1 Jan - 31 Dec
2023
1 Jan - 31 Dec
2022
Cash flows from financing activities
Dividend distribution -1,953,473.94 -
Capital return from the invested unrestricted equity
fund
- -3,196,593.72
Repayment of short-term loans -3,000,000.00 -1,500,000.00
Proceeds from long-term borrowings - 25,500,000.00
Repayment of long-term borrowings - -25,500,000.00
Group contributions received 2 , 231,327. 4 8 3,740,000.00
Net cash flows from financing activities -2,722,146.46 -956,593.72
Net change in cash and cash equivalents 13,346.80 - 61,15 4. 9 0
Cash and cash equivalents at 1 January 135,414.19 196,569.09
Cash and cash equivalents at 31 December 148,760.99 135,414.19
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Notes to the parent
company financial
statements
1. Parent company accounting principles
The financial statements of Orthex Corporation have been prepared in
accordance with the Finnish Accounting Act and Ordinance and other
statutes regulating the preparation of financial statements (Finnish
Accounting Standards, FAS). The financial statements are presented in euros.
The preparation of financial statements in conformity with regulations in
force and generally accepted accounting principles requires management
to make estimates and assumptions that affect the valuation of assets and
liabilities and reported amounts of revenues and expenses. Actual results
could differ from those estimates.
Transactions in foreign currencies
Transactions in foreign currencies are recorded at the rates of exchange
prevailing at the date of the transaction. At the end of the reporting period
balances in foreign currencies are translated using the exchange rate
prevailing at the end of the reporting period.
Income taxes
Income taxes consist of the aggregate current tax expense based on the
Finnish tax rules and adjustments to prior year taxes.
The parent company does not account for deferred taxes as a stand-
alone entity.
Receivables
Receivables are valued at the lower of book value and recoverable value.
Derivatives
Orthex Corporation has interest rate derivatives. Hedge accounting is not
applied to interest rate derivatives to the extent that the derivatives protect
the parent company’s interest rate risk. The fair values of the derivatives are
recorded in the balance sheet and changes in the fair value are recorded in
the financial items of the income statement. The realized profit or loss of
interest rate swaps hedging variable rate loans is presented in the income
statement in financial items. The fair values of interest rate swaps are
determined using a method based on the present value of future cash flows,
which is supported by market interest rates at the end of the reporting period
and other market information.
Appropriations
Appropriations in the parent company balance sheet consist of received
group contributions.
2. Net sales
Net sales
EUR 2023 2022
Administration services 840,000.00 840,000.00
3. Personnel costs and number of
employees
Personnel costs, book value
EUR 2023 2022
Wages and salaries 828,775.51 763,240.79
Pension costs 97,616 . 8 6 114,731.09
Other personnel costs 12,651.85 16,030.41
Tot al 939,044.22 894,002.29
CEO and Board remuneration, book value
EUR 2023 2022
CEO 437,427.00 437,761.00
Board of Directors 144,000.00 144,000.00
Number of employees
Average (FTE) 2023 2022
Employees 2 2
Tot al 2 2
The CEO and CFO of Orthex Group work in Orthex Corporation.
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4. Fees paid to company’s auditors
EUR 2023 2022
Audit fees 116,166.00 83,176.0 0
Other 3,000.00 19,032.03
Tot al 119,166.00 102,208.03
5. Financial income and expenses
EUR 2023 2022
Interest and financial income from
group companies 632,065.24 596,288.04
Dividends received from group
companies 7,000,000.00 2,000,000.00
Other interest and financial income
from others 59,602.27 0.01
Total financial income 7,691,667.51 2,596,288.05
Interest and financial expenses to
others -1, 578,150.03 -640,831.85
Total financial expenses -1,578,15 0.03 -640,831.85
Total financial income and
expenses
6,113,517.48 1,955,456.20
8. Investments
EUR Holdings in subsidiaries
Receivables from
subsidiaries Total
Acquisition cost
Balance at 1 Jan 2022 25,295,133.29 9,938,133.78 35,233,267.07
Additions - 596,288.04 596,288.04
Balance at 31 Dec 2022 25,295,133.29 10,534,421.82 35,829,555.11
Additions - 632,065.24 632,065.24
Balance at 31 Dec 2023 25,295,133.29 11,166,487.06 36,461,620.35
Shares in subsidiaries
Number of shares Domicile % of share capital Book value, EUR
Oy Orthex Finland Ab 135,170 Helsinki 100 25,295,133.29
Total, Dec 31 2023 25,295,133.29
6. Appropriations
EUR 2023 2022
Group contribution received 3,400,000.00 3,100,000.00
Tot al 3,400,000.00 3,100,000.00
7. Income taxes
EUR 2023 2022
Current year taxes -404,458.31 -462,066.80
Tot al -404,458.31 -462,066.80
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11. Shareholders’ equity
EUR 2023 2022
Share capital, 1 Jan 80,000.00 80,000.00
Share capital, 31 Dec 80,000.00 80,000.00
Invested unrestricted equity fund, 1 Jan 8,430,263.84 11,626,857.5 6
Capital return from the invested unrestricted equity fund - -3,196,593.72
Invested unrestricted equity fund, 31 Dec 8,430,263.84 8,430,263.84
Retained earnings, 1 Jan 3,874,895.36 -428,835.19
Dividend distribution -1,953,473.94 -
Retained earnings, 31 Dec 1,921,421.42 -428,835.19
Profit (loss) for the period 8,636,002.00 4,303,730.55
Distributable earnings, 31 Dec 18,987,687.26 12,305,159.20
Shareholders’ equity total, 31 Dec 19,0 67,687.26 12,385,159.20
9. Receivables from subsidiaries
EUR 2023 2022
Sales receivables - 171,452.22
Other receivables 5,481,359.46 2,231,327.48
Tot al 5,481,359.46 2,402,779.70
10. Prepayments and accrued income
EUR 2023 2022
Value added taxes related to
the tax audit
265,828.75 265,828.75
Derivatives - 92,766.00
Other items -4,671.34 2,074.11
Tot al 261,157.41 360,668.86
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12. Long-term liabilities
EUR 31 Dec 2023 31 Dec 2022
Loans from credit institutions:
Payable in the next 12 months 3,000,000.00 3,000,000.00
Payable between one and five
years
19,500,000.00 22,500,000.00
13. Accruals and deferred income
EUR 31 Dec 2023 31 Dec 2022
Wages, salaries and social costs 153,483.69 108,193.07
Derivatives 10,821.00 -
Other 151,774.94 178,062.97
Tot al 316,079.63 286,256.04
The value of the underlying asset of the derivatives in the financial
statements on 31 December 2023 was EUR 11,250,000.00, and the maturity
date of the derivatives is 22 December 2025.
14. Contingencies and pledged assets
EUR 31 Dec 2023 31 Dec 2022
Pledges given on behalf of
Group companies:
Enterprise mortgages 48,100,000.00 48,100,000.00
Property mortgages 10,192,32 9.66 10,192,32 9.66
Tot al 58,292,329.66 58,292,329.66
The company has a credit limit of EUR 7,000,000.00, of which
EUR 1,000,000.00 has been allocated to Oy Orthex Finland Ab and
EUR 878,023.08 to Orthex Sweden AB.
Contingent liabilities
Orthex Corporation was subject to a tax audit regarding the financial years
2020 and 2021. The company received in February 2022 a tax audit report
from the Finnish tax auhorities. The tax audit report included subsequent
taxes and tax increases amounting to a total of EUR 0.3 million, relating to
the VAT deductibility of IPO related costs. The company disagrees with the
interpretation made in the tax audit and has filed a claim for adjustment.
The company was requested to pay additional taxes in accordance with
the interpretations set out in the tax audit report. The company paid the
subsequent taxes and tax increases in June 2022 but has filed a claim for
adjustment to its taxation to the Assessment Adjustment Board of the
Finnish tax authority. The company has not recognised the subsequent taxes
and tax increases in the income statement. At the time of releasing the
financial statements, the company’s claim for adjustment was still pending.
15. Company shares
The company has 17,758,854 shares. The company’s share capital is
EUR 80,000.00. Each share entitles its holder to one vote at the Annual
General Meeting.
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Signatures of the Board of Directors’ report and financial statements
Espoo, 4 March 2024
Sanna Suvanto-Harsaae, Chair of the Board of Directors Markus Hellström Jyrki Mäki-Kala
Jens-Peter Poulsen Anette Rosengren Alexander Rosenlew, CEO
Auditor’s note
Our auditor’s report has been issued today.
Espoo, March
Ernst & Young Oy
Authorised Public Accountant Firm
Mikko Rytilahti
Authorised Public Accountant
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Auditor’s report
To the Annual General Meeting of Orthex Corporation
Report on the Audit of the
Financial Statements
Opinion
We have audited the financial statements of Orthex Oyj (business identity
code 2727990-2) for the year ended 31 December 2023. The financial
statements comprise the consolidated balance sheet, income statement,
statement of comprehensive income, statement of changes in equity,
statement of cash flows and notes, including material accounting policy
information, as well as the parent company’s balance sheet, income
statement, statement of cash flows and notes.
In our opinion
• the consolidated financial statements give a true and fair view of the
group’s financial position as well as its financial performance and its cash
flows in accordance with IFRS Accounting Standards as adopted by the EU.
• the financial statements give a true and fair view of the parent company’s
financial performance and financial position in accordance with the laws
and regulations governing the preparation of financial statements in
Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Board
of Directors.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland.
Our responsibilities under good auditing practice are further described in the
Auditor’s Responsibilities for the Audit of Financial Statements section of
our report.
We are independent of the parent company and of the group companies
in accordance with the ethical requirements that are applicable in Finland
and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that
we have provided to the parent company and group companies are in
compliance with laws and regulations applicable in Finland regarding these
services, and we have not provided any prohibited non-audit services
referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services
that we have provided have been disclosed in note 4 to the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities
for the Audit of Financial Statements section of our report, including in
relation to these matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risks of material
misstatement of the financial statements. The results of our audit procedures,
including the procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying financial statements.
We have also addressed the risk of management override of internal controls.
This includes consideration of whether there was evidence of management
bias that represented a risk of material misstatement due to fraud.
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Key Audit Matter How our audit addressed the Key Audit Matter
Valuation of goodwill
We refer to note 8 to the consolidated financial statements.
The value of goodwill at the date of the financial statements amounted to 22.3 million euros, representing
26.1% of the group’s total assets and 64.8% of the group’s equity.
Valuation of goodwill is based on management’s estimates about the value-in-use calculations of the
group’s cash generating units.
There are a number of underlying assumptions used to determine the value-in-use of a cash generating
unit, including the development of revenue and profitability and the discount rate applied to cash flows
estimates. The results of value-in-use calculations may vary significantly when the underlying assumptions
are changed. Changes in the above-mentioned individual assumptions may result in an impairment of
goodwill.
Valuation of goodwill was a key audit matter because the assessment process requires significant
management judgements and forecasts to be made, because it is based on assumptions related to market
and economic conditions extending far into the future and because the amount of goodwill is material to the
consolidated financial statements.
This matter was also a significant risk of material misstatement as defined by EU Regulation No 537/2014,
point (c) of Article 10(2).
Our audit procedures to address the risk of material misstatement regarding valuation of goodwill included
among others:
• involving our valuation specialists to assist us in assessing the appropriateness of the methodologies,
impairment calculations and underlying assumptions applied by management in the impairment testing;
• testing the mathematical accuracy of the impairment calculations;
• comparing the key assumptions applied by management in the impairment testing to approved budgets
and forecasts, information available in external sources and our independently calculated industry
averages such as for the weighted average cost of capital used in discounting cash flows;
• comparing the outcome of the impairment test to the market capitalization of Orthex Oyj; and
• comparing the principles applied by management in the impairment testing to the requirements set out in
the standard IAS 36 Impairment of Assets.
We also assessed the appropriateness of the disclosures regarding impairment testing made in the notes to
the consolidated financial statements.
Revenue recognition
We refer to note 2 to the consolidated financial statements.
According to the accounting policy presented in the consolidated financial statements, revenue from the
sales of
goods is recognized at the point in time when control of the goods is transferred to the customer. Cash and
volume discounts granted to customers are taken into account when determining the amount of revenue
recognized.
The revenue of Orthex Group is mainly generated from sales of household products to retailers.
There are multiple varying contractual terms across the group’s markets regarding the above-mentioned
discounts which could lead to misstatement of revenue, either due to fraud or error. The group focuses
on revenue as a key performance measure which could create an incentive for revenue to be recognized
prematurely. Due to these circumstances, revenue recognition was determined to be a key audit matter.
This matter was also a significant risk of material misstatement as defined by EU Regulation No 537/2014,
point (c) of Article 10(2).
Our audit procedures to address the risk of material misstatement regarding revenue recognition included
among others:
• assessing the compliance of the group’s accounting policies over revenue recognition, including those
related to discounts, with the applicable accounting standards;
• analyzing a sample of contracts with customers and comparing the terms determined in them to the terms
used in the group’s calculations regarding discounts;
• testing the mathematical accuracy of the group’s calculations of discounts and assessing the adequacy of
liabilities recognized based on those calculations;
• testing the accuracy of revenue recognition by performing both analytical procedures and tests of details
on a transaction level before and after the date of the financial statements; and
• analyzing the timing of revenue recognition based on delivery lead times.
We also assessed the appropriateness of the disclosures regarding revenue recognition made in the notes
to the consolidated financial statements.
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Key Audit Matter How our audit addressed the Key Audit Matter
Valuation of inventories
We refer to note 13 to the consolidated financial statements.
The value of inventories at the date of the financial statements amounted to 12.1 million euros, representing
14.1%
of the group’s total assets and 35.2% of the group’s equity.
Inventories are valued at the lower of cost or net realizable value. Inventories are presented net of an
impairment loss allowance recognized for slow-moving or obsolete inventories or for inventories that have
an otherwise lower net realizable value than cost.
Valuation of inventories was a key audit matter because the carrying value of inventories is material to the
consolidated financial statements and because valuation of inventories involves management’s judgment
and estimates in order to determine the amount of slow-moving or obsolete inventories as well as the net
realizable value of inventories.
Our audit procedures included among others:
• assessing the group’s accounting policies over inventory valuation and comparing them to the applicable
accounting standards;
• comparing unit values of selected inventory items to sales prices;
• testing exceptional inventory values using data analysis;
• assessing the assumptions applied and the calculations prepared by management regarding slow-moving
or obsolete inventories and the expected demand and net realizable value of inventory items; and
• testing the mathematical accuracy of the impairment loss allowance calculations prepared by
management and assessing the adequacy of the allowances recognized.
We also assessed the appropriateness of the disclosures regarding valuation of inventories made in the
notes to the consolidated financial statements.
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Responsibilities of the Board of Directors
and the Managing Director for the Financial
Statements
The Board of Directors and the Managing Director are responsible for the
preparation of consolidated financial statements that give a true and fair
view in accordance with IFRS Accounting Standards as adopted by the EU,
and of financial statements that give a true and fair view in accordance with
the laws and regulations governing the preparation of financial statements in
Finland and comply with statutory requirements. The Board of Directors and
the Managing Director are also responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the
Managing Director are responsible for assessing the parent company’s and
the group’s ability to continue as going concern, disclosing, as applicable,
matters relating to going concern and using the going concern basis of
accounting. The financial statements are prepared using the going concern
basis of accounting unless there is an intention to liquidate the parent
company or the group or cease operations, or there is no realistic alternative
but to do so.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance on whether the financial
statements as a whole are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with good auditing practice will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the
financial statements.
As part of an audit in accordance with good auditing practice, we exercise
professional judgment and maintain professional skepticism throughout the
audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the parent
company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made
by management.
• Conclude on the appropriateness of the Board of Directors’ and the
Managing Director’s use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on
the parent company’s or the group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the
parent company or the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events so that the financial
statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the group to express
an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
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We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we
have complied with relevant ethical requirements regarding independence,
and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit of
the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of
such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting on May
7, 2009 and our appointment represents a total period of uninterrupted
engagement of 15 years. Orthex Oyj has been a public interest entity since
March 25, 2021.
Other information
The Board of Directors and the Managing Director are responsible for the
other information. The other information comprises the report of the Board
of Directors and the information included in the Annual Report, but does not
include the financial statements and our auditor’s report thereon. We have
obtained the report of the Board of Directors prior to the date of this auditor’s
report, and the Annual Report is expected to be made available to us after
that date.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility
is to read the other information identified above and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. With respect to report of the Board of Directors,
our responsibility also includes considering whether the report of the Board
of Directors has been prepared in accordance with the applicable laws
and regulations.
In our opinion, the information in the report of the Board of Directors is
consistent with the information in the financial statements and the report of
the Board of Directors has been prepared in accordance with the applicable
laws and regulations.
If, based on the work we have performed on the other information that we
obtained prior to the date of this auditor’s report, we conclude that there is
a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Espoo, March 4, 2024
Ernst & Young Oy
Authorized Public Accountant Firm
Mikko Rytilahti
Authorized Public Accountant
