Financials
Annual Report 2022 11
Report of the Board of Directors 2022
Purmo Group is a leader in sustainable
indoor climate comfort solutions. The
Group provides complete heating and
cooling solutions to residential and
non-residential buildings, including
underfloor heating and cooling
systems, a broad range of radiators,
heat pumps, flow control and hydronic
distribution systems, as well as smart
products. Our mission is to be the
global leader in sustainable indoor
climate comfort solutions. Our 3,400
employees operate in 24 countries,
manufacturing and distributing top-
quality products and solutions to our
customers in more than 100 countries
globally. Purmo Group’s shares are
listed on Nasdaq Helsinki with the
ticker symbol PURMO.
Key figures
EUR million 2022 2021 Change, %
Net sales 904.1 843.6 7%
Adjusted EBITDA 92.9 103.9 -11%
Adjusted EBITDA margin 10.3% 12.3%
Adjusted EBITA 64.6 76.6 -16%
Adjusted EBITA margin 7.1% 9.1%
EBIT 39.0 3.5 1025%
EBIT margin 4.3% 0.4%
Profit for the period 13.1 -18.8 170%
Adjusted profit for the period 34.9 51.4 -32%
Earnings per share, basic, EUR 0.32 -0.65 149%
Adjusted earnings per share, basic, EUR 0.85 1.77 -52%
Cash flow from operating activities 31.1 35.4 -12%
Adjusted operating cash flow, last 12 months
1
51.9 50.2
6
3%
Cash conversion
2
55.9% 48.3%
6
Operating capital employed
3
305.0 271.8 12%
Return on operating capital employed
4
12.8% 1.3%
Net debt 275.2 239.5 15%
Net debt / Adjusted EBITDA
5
2.96 2.31 29%
1
Adjusted EBITDA on a rolling 12-month basis less by the change in net working capital and capex on a rolling 12-month basis.
2
Adjusted operating cash flow divided by Adjusted EBITDA, both on a rolling 12-month basis.
3
Net working capital, other intangible assets, property, plant and equipment, and right-of-use-assets.
4
EBIT based on a rolling 12-month calculation divided by operating capital employed. Return on operating capital employed without
non-recurring items was 1.0% (22.0%).
5
Adjusted EBITDA based on a rolling 12-month basis.
6
Figures for 1-12/2021 restated for comparability reasons.
Group financial overview
Net sales
EUR million 2022 2021 Change, %
Net sales, by segment
Radiators 478.7 506.3 -5%
ICS 425.3 337.2 26%
Total 904.1 843.6 7%
In January–December 2022, Purmo Group’s net sales
amounted to EUR 904.1 million (843.6), an increase
of 7 per cent. Organic net sales growth was 3 per
cent. Thermotech and Evroradiator acquistions
contributed 3 per cent to net sales growth. The net
currency effect was positive 1 per cent.
The Group’s net sales in 2022 were supported by
strong growth in the ICS division while weak demand
in the Radiators division during the second half of the
year reduced net sales growth in 2022.
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In January–December 2022, Purmo Group’s adjusted
EBITDA reached EUR 92.9 million (103.9); a decrease
of 11 per cent. The adjusted EBITDA margin was 10.3
per cent (12.3). Comparability adjustments amounted
to EUR 21.7 million (70.2).
The ICS division generated strong growth in
Adjusted EBITDA, driven by strong volume growth,
pricing improvements, and cost control, while
adjusted EBITDA declined for the Radiators division
primarily due to low sales volumes and decreased
the Group’s Adjusted EBITDA for 2022.
Net financial items amounted to EUR -17.4 million
(-8.6).
Profit before tax was EUR 21.6 million (-5.1).
Income tax expenses were EUR -8.4 million (-13.7)
corresponding to an effective tax rate of 39.1 per cent
(29.1 without IFRS 2 merger impact). When excluding
certain non-deductible items, the effective tax rate
was 20.1 per cent (25.8).
Profit for the review period was EUR 13.1 million
(-18.8) and adjusted profit for the period was EUR
34.9 million (51.4). Earnings per share were EUR
0.32 (-0.65) and adjusted earnings per share were
Results and profitability
EUR million 2022 2021 Change, %
Adjusted EBITDA, by
segment
Radiators 50.3 66.0 -24%
ICS 51.9 43.7 19%
Other -9.4 -5.8 62%
Total 92.9 103.9 -11%
Adjusted EBITDA
margin, % 10.3% 12.3%
EUR 0.85 (1.77). The earnings per share in the
comparison period are based on Purmo Group Ltd
shares amounting to 29,249,105 shares, using the 31
December 2021 conversion ratio. After the merger
on 31 December 2021 between Virala Acquisition
Company Plc and Purmo Group Ltd, the combined
company’s shares amounted to 40,374,531 class C
shares and 1,565,217 class F shares. The directed
share issue of 671,779 class C shares in March 2022
and the directed share issue of 66,403 class C shares
in October 2022 also diluted the earnings per share
in the review period. The share issues were related
to the acquisition of Thermotech and the new share-
based incentive plan for the key personnel.
Cash flow and financial position
In January–December 2022, cash flow from
operating activities was EUR 31.1 million (35.4). The
decrease was due to lower profitability despite
positive development in net working capital.
The typical seasonal low point for net working
capital is December, after which it builds up during
the first and second quarters before reducing again
during the third and fourth quarters.
Adjusted operating cash flow for the last 12 months
increased by 3 per cent to EUR 51.9 million (50.2) and
the cash conversion increased to 55.9 per cent (48.3).
The change was a result of increased capex spend
in the last 12 months of EUR -24.0 million (-14.8)
mainly related to strategic projects but was offset by
a favourable change in net working capital of EUR
-16.9 million (-38.8). The adjusted EBITDA during the
last 12 months decreased slightly to EUR 92.9 million
(103.9).
Cash flow from investment activities was EUR -32.9
million (-18.6). The change was primarily attributable
to the Thermotech acquisition of EUR -14.6 million
(2021: EUR -4.5 million related to the acquisition of
Evroradiator) as well as investments in property,
plant and equipment, and intangible assets of EUR
-24.0 million (-14.8). The increased investments were
offset by EUR 3.1 million (0.7) proceeds from the sale
of property, plant and equipment, and intangible
assets mostly from the sale of the Irish production
site as well as EUR 2.7 million (0.0) proceeds from the
divestment of a discontinued Chinese subsidiary.
Cash flow from financing activities was EUR -110.8
million (105.4), mostly from the repayment of the EUR
95.0 million bridge-loan facility in January and an
increase in short-term funding of EUR 10.0 million
during the year. In May the first instalment of the
return of capital of EUR 0.18 per class C share and
EUR 0.03 per class F share was paid, totalling EUR 7.4
million. The second instalment of EUR 0.18 per class
C share and EUR 0.04 per class F share was paid in
October 2022, totalling EUR 7.5 million.
At the end of December 2022, the Group’s net debt
was EUR 275.2 million (239.5) and the equity ratio
was 41.0 per cent (37.3). The net debt to adjusted
EBITDA ratio, based on the last 12 months' adjusted
EBITDA, was 2.96 (2.31).
At the end of 2022, the liquidity position in terms of
cash and cash equivalents totalled EUR 56.3 million
(177.6). The decline in cash and cash equivalents was
driven by the repayment of the bridge loan facility
of EUR 95.0 million at the beginning of the financial
year. The company had a Finnish commercial paper
programme totalling EUR 100.0 million of which EUR
10.0 million was outstanding at the end of 2022. As of
31 December 2022, Purmo Group also had EUR 80.0
million undrawn committed revolving credit facility
and EUR 20.5 million of undrawn overdraft facilities
with core financial institutions.
Equity attributable to owners of the parent
company totalled EUR 403.3 million (390.6).
Radiators Division
EUR million 2022 2021 Change, %
Net sales 478.8 506.3 -5%
Adjusted EBITDA 50.3 66.0 -24%
Adjusted EBITDA
margin, % 10.5% 13.0%
Depreciations,
amortisations and
impairments -28.1 -21.1 33%
Purmo Group’s Radiators division is a leading
manufacturer of premium-quality radiators with
strong local brands around the world. Demand is
driven by residential repair and maintenance (about
60 per cent of sales) and new construction (about 40
per cent of sales). The division manufactures panel,
tubular and electrical radiators, which are sold
mainly to installers through wholesalers, either as
individual units or as part of complete indoor climate
comfort solutions.
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Market overview
For the full year 2022, the markets for radiators
developed favourably in the first half, when
wholesalers were increasing their inventories after
the lifting of COVID-19 lockdowns. In the latter
half of the year, a correction in the supply chain
occurred, as high inventory levels were met by
weaker demand. This led to a decline in sales and
profitability in the Radiators division.
As a response of the weaker demand in the latter
half of the year, Radiators division implemented
significant price increases and introduced several,
rapid cost-saving actions, including workforce
reduction but also limiting operational expenses
and relocating production to facilities with lower
production cost.
Net Sales
In January–December 2022, net sales for the
Radiators division decreased by 5 per cent to EUR
478.8 million (506.3), of which decline of organic net
sales was of 7 per cent. An increase in sales prices
of 17 per cent offset 22 per cent organic volume
declines. Acquisitions contributed 1 per cent to the
division’s net sales growth. The currency impact was
positive 1 per cent.
Profitability
In January–December 2022, adjusted EBITDA of the
Radiators division declined by 24 per cent to EUR
50.3 million (66.0). The adjusted EBITDA margin was
10.5 per cent (13.0).
Adjusted EBITDA of the Radiators division for 2022
declined due to lower sales volumes, as a result of
weak demand, especially in the latter half of the year.
Key activities during the year
The Radiators division completed several profitability
actions, including the implementation of price
increases, optimising the workforce, and moving
production to facilities with lower production cost, as
a response to the challenging market environment.
The expansion of the division’s largest manufacturing
plant in Rybnik, Poland was completed during the
year. The installation of machinery for the facility will
be finalised in 2023. The exit from our business in
Russia is ongoing. The Russian subsidiary operates
as a stand-alone business with a separate, local
brand (EVRA). The Radiators division introduced new
products to the EU market in 2022: Purmo Flex, a
panel radiator with middle connection, and Tinos H,
the decorative radiator that was introduced to new
markets.
ICS Division
EUR million 2022 2021 Change, %
Net sales 425.3 337.2 26%
Adjusted EBITDA 51.9 43.7 19%
Adjusted EBITDA
margin, % 12.2% 13.0%
Depreciations,
amortisations and
impairments -11.4 -9.0 26%
Purmo Group’s Indoor Climate Systems (ICS)
division is one of the leading indoor climate
comfort solution providers offering a broad range
of components as well as products and systems to
specifiers, developers, installers and wholesalers
primarily in the residential and the non-residential
sector. Demand is driven by new construction (about
70 per cent of sales) as well as repair, renovation
and maintenance of buildings (about 30 per cent
of sales). The division offers Radiant Heating and
Cooling (RHC) including underfloor heating systems,
Air Heating and Cooling (including air-conditioning),
heat pumps, fan convectors, ventilation, water-
distribution and connection systems, and HVAC
system components such as hydronic and electronic
controls and flow balancing technology.
Market overview
In the full year 2022, ICS business developed strongly,
showing double-digit growth in every quarter. Italy
had the highest contribution to net sales growth,
but other regions also performed well, including
Germany and the Nordics which was supported
by Thermotech, acquired in the beginning of the
year. The demand for heat pumps was strong in
each quarter, demonstrating a customer behaviour
towards modern and sustainable heating and
cooling solutions. In the latter part of the year, the
ICS division faced supply chain constraints and high
raw material prices due to high inflation. These were
compensated by several price increases.
Net sales
In January-December 2022, net sales for the ICS
division increased by 26 per cent to EUR 425.3 million
(337.2), of which 19 per cent was organic net sales
growth. Thermotech contributed 6 per cent to the
division’s net sales growth and the net currency
effect was 1 per cent. Net sales growth for full year
2022 was a result of successful and gradual price
increases in the division. Furthermore, sales volumes
were achieved in Italy, Benelux countries and Central
Europe.
Profitability
In January–December 2022, adjusted EBITDA of the
ICS division increased by 19 per cent to EUR 51.9
million (43.7). The adjusted EBITDA margin was 12.2
per cent (13.0). The strong growth in Adjusted EBITDA
was driven by volume growth, price increases, and
cost control.
Key activities during the year
On 1 March 2022, Purmo Group acquired TT
Thermotech Intressenter AB (Thermotech), the
Nordic heating-systems company. In line with Purmo
Group’s growth strategy, Thermotech strengthens
the ICS division’s offering of smart technologies, it
improves focus on solution sales and it strengthens
ICS’s position in the Nordic underfloor heating
market. In 2021 the company’s total net sales were
EUR 23.8 million. In June, ICS successfully completed
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the plant relocation of its brass site in Ireland. The
efficiency in the production of brass components
improved through the relocation of the production
from Ireland, to other existing ICS sites in Italy and
Sweden. The site in Ireland was closed in June and
the property was sold to a third party. During 2022,
the ICS division developed the Unisenza PLUS control
range, built upon the original Unisenza underfloor
heating platform solution. Unisenza PLUS is designed
to allow multiple Purmo Group products to be inter-
connected as part of a common indoor climate
comfort control system. The new control range is
available from Q1 2023.
Investments, acquisitions,
structural changes and R&D
Investments
Capital expenditure for the full year, excluding
business combinations and leased assets, totalled
EUR 24.0 million (14.8). The investments were related
primarily to strategic projects and maintenance.
Acquisitions and disposals
During the third quarter, a subsidiary of Purmo
Group was divested to a third party. It owned real
estate property and land area in Tianjin, China. The
subsidiary was divested due to its discontinued use
for production, sales and distribution.
On 1 March 2022, Purmo Group announced that
it had acquired the entire share capital of the Nordic
heating system company TT Thermotech Intressenter
AB. The company manufactures and supplies
customised and prefabricated underfloor heating
systems to customers in the Nordic region. Thermotech
is reported under the ICS segment. The acquisition
supports Purmo Group’s growth strategy by bringing
smart technologies to the company’s Indoor Climate
System (ICS) offering, supporting its solution-selling
approach and strengthening Purmo Group’s position
on the Nordic underfloor heating market.
Structural changes
At the end of March 2022, Purmo Group made the
decision to exit its business in Russia. The company
is seeking to divest and complete an orderly transfer
of the business to a new owner in compliance
with international and local laws in Russia. Upon
completion of the divestment, the company will no
longer have a manufacturing operation or sales
in Russia. Purmo Group has classified its Russian
business as assets held for sale, resulting in a non-
recurring impairment and write-down of EUR 6.9
million in March 2022 and an additional write-down
of EUR 6.0 million in December 2022, totalling EUR
12.9 million. For accounting purposes, the Russian
business is presented as continuing operations
as it does not meet the criteria for discontinued
operations. Russia represented less than 4 per cent
of Purmo Group’s total net sales in 2022.
Research and development
Product development of Purmo Group focuses
on connecting smart HVAC equipment from the
energy source to thermal emitters in one unified
and intelligent system. Additionally, the focus is
on minimising material usage including product
packaging, and on smart design that improves
emitter system performance. Purmo Group also
continues collaboration with its network in the field of
control systems.
In line with its strategy, Purmo Group’s Smart
Products pipeline continued to focus on three
clear strategic priorities during the fourth quarter:
intelligence and connectivity, sustainability and
aesthetics.
Purmo Group’s research and development
expenditure totalled EUR 6.1 million (5.9) in January–
December 2022.
In 2022, the ICS division introduced panels for
radiant floor systems in the Southern Europe. The
panel is suitable for renovation purposes, offers an
improved thermal output and is made partly from
recycled materials. Furthermore, the ICS division
developed the Unisenza PLUS control range which is
built upon the original Unisenza underfloor heating
platform solution. Unisenza PLUS is designed to allow
multiple Purmo Group products, such as electronic
radiator valves and wireless thermostats, to be inter-
connected as part of a common indoor climate
comfort control system. The hardware is adapted to
future third-party home automation platforms. The
new control range is available from Q1 2023.
In 2022, the Radiators division launched the Purmo
Flex radiator, which offers flexibility in planning and
installation due to a valve insert of choice. Purmo
Flex is a high-quality product available in a wide
range of dimensions, colours and designs (profiled,
flat and fine-profiled). In addition, the Radiators
division introduced a new vertical model of the
ULOW E2 radiator, the energy-efficient ultralow
temperature radiator by Purmo Group. The model
is ideal in combination with underfloor heating
for rooms in e.g., modern buildings with limited
space under windows or in spaces that are not
in continuous use and hence require short heat-
up time. The radiator is fully compatible with heat
pumps and Purmo Group’s home automation
system. During 2022, the division also focused
on developing on new versions of radiators
including fan-assisted and low-cost units which are
compatible with heat pumps.
Strategy
The company’s growth strategy is built on three
pillars:
(i) scaling-up of solution-selling in order to provide
complete solutions and to capture growth
potential in underpenetrated markets;
(ii) launching and delivering smart products that are
more intelligent, connectable, sustainable and
aesthetic; and
(iii) focusing on growth markets to capture the
biggest opportunities outside of current markets.
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M&A is an important enabler supporting the
realisation of Purmo Group's strategy.
The strategy is further supported by continuous
improvement of operational excellence and by
investments in people and culture.
Strategy acceleration programme
On 5 October 2022, Purmo Group announced a
strategy acceleration programme, “Accelerate PG”,
to strengthen the execution of the strategy. The
programme focuses on improving net sales growth,
profitability and net working capital efficiency to
support reaching its financial targets.
To support the execution of the programme,
align resources with the strategic direction and to
strengthen customer focus, the company announced
a new organisational structure which came into
effect on 1 January 2023.
The new organisation will consist of two business
divisions: Climate Products & Systems, which will
sell through the wholesaler channels; and Climate
Solutions, which will sell integrated solutions directly
to installers, served by the company’s Emmeti
business in South Europe and Thermotech business
in the Nordic region.
Purmo Group’s management team in the new
organisational structure is:
• John Peter Leesi, Chief Executive Officer
• Erik Hedin, Chief Operating Officer; leading also
the strategy acceleration programme
• Mike Conlon, President, Climate Solutions division
• Barry Lynch, President, Climate Products &
Systems division
• Linda Currie, Chief People Officer
Matts Rosenberg was appointed interim CFO of
Purmo Group Plc, effective as of 1 January 2023. On
22 February 2023, Purmo Group announced that Jan-
Elof Cavander (MSc. Ind. Eng.) has been appointed
Chief Financial Officer of Purmo Group Plc and a
member of the Management team. He will join
Purmo Group on 22nd of June 2023, the latest. Mr.
Cavander will report to Chief Executive Officer John
Peter Leesi and will be based in Helsinki, Finland.
On 8 November 2022, Purmo Group announced
that due to the weak market environment, the
company expands its earlier announced strategy
acceleration programme. The targeted adjusted
EBITDA run-rate improvements are EUR 20 million
(upgraded from EUR 15 million) by the end of 2023,
and cumulatively EUR 40 million (upgraded from
EUR 35 million) by the end of 2024.
The upgraded profitability improvements will
include both variable and fixed cost savings,
excluding areas where market growth is expected
to continue. Additionally, the company will continue
to evaluate accelerating its footprint optimisation,
covering both manufacturing and supply chain.
The costs for the programme are expected to be
approximately EUR 43 million (previously EUR 40
million), of which EUR 33 million (previously EUR 30
million) is expected to be incurred before the end of
2023 and the remainder in 2024.
The programme is currently progressing
according to plan. By the end of 2022, Purmo Group
had already validated over 150 initiative roadmaps
which support the achievement of the targeted
improvements. Implemented run-rate EBITDA
improvements at the end of 2022 amounted to EUR
1.4 million, which is according to expectations given
the phasing of the programme’s initiatives.
Financial targets and
dividend policy
Purmo Group has set the following financial targets
and dividend policy:
Growth
Purmo Group is targeting organic net sales growth
in excess of market growth. In addition, Purmo
Group aims for notable inorganic growth through
acquisitions.
In January–December 2022, organic net sales
grew by 3 per cent, while total net sales increased by
7 per cent to EUR 904.1 million (843.6). The Group’s
net sales in 2022 were supported by strong growth in
the ICS division while a supply chain correction and
weak demand in the Radiators division especially
during the second half of the year decreased net
sales growth during 2022.
Profitability
Purmo Group is targeting an adjusted EBITDA margin
above 15 per cent in the medium- to long-term.
In January–December 2022, the adjusted EBITDA
margin was 10.3 per cent (12.3). The Group’s
profitability was supported by the ICS division’s
solid performance throughout the year, while
the high inventory levels of wholesalers and low
market sentiment overall led to modest demand in
the Radiators division, and decreased the Group’s
Adjusted EBITDA margin for 2022.
The strategic transition to a solutions business
and the introduction of the strategy acceleration
programme in the fourth quarter of 2022 are
expected to expand the adjusted EBITDA margin
towards the 15 per cent medium to long-term target.
Leverage
The leverage ratio is targeted not to exceed 3.0x,
measured as interest-bearing net debt / Adjusted
EBITDA on a rolling twelve-month basis. However,
leverage may temporarily exceed the target level,
for example in conjunction with acquisitions or
restructuring actions.
At the end of December 2022, net debt / adjusted
EBITDA was 2.96 (2.31). The increase in the ratio was
due to lower adjusted EBITDA and an increase in net
debt.
Dividend
Purmo Group’s aim is to distribute at least 40 per
cent of annual net profit as dividends or return of
capital, intended to be paid out after considering
earnings trends for the Group, its financial position
and future growth potential.
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For financial year 2022, the Board of Directors of
Purmo Group Plc proposes to the Annual General
Meeting planned to be held on 12 April 2023 that a
return of capital of EUR 0.36 per class C share and
EUR 0.07 per class F share shall be paid.
Financial guidance for 2023
Purmo Group’s adjusted EBITDA in 2023 is expected
to be on a similar level as in 2022 (EUR 92.9 million).
Similar means being within +/- 5 per cent from the
previous year.
Visibility for 2023 is limited due to the geopolitical
and macroeconomic uncertainties impacting
Purmo Group’s addressable markets. The
company continues to actively manage the
situation and improve its financial performance
through, for example, pricing and cost reduction
initiatives. Purmo Group reiterates the previously
communicated targets for the strategy acceleration
programme – targeted adjusted EBITDA run-rate
improvements of EUR 20 million by the end of 2023
and cumulatively EUR 40 million by the end of 2024.
Non-Financial information
This section describes Purmo Group’s non-financial
information as required in Chapter 3a of the Finnish
Accounting Act on non-financial information (NFI).
Business model
Purmo Group, headquartered in Finland, is a leading
manufacturer and supplier of sustainable indoor
climate comfort solutions, specialising in heating and
cooling solutions. Purmo Group makes embedded
radiant-heating and cooling systems, air-based
heating and cooling systems (including ventilation),
hydronic and electric radiators, dedicated hydronic
and electronic controls and piping distribution
systems. Purmo Group products are manufactured
for residential buildings (both new builds and
renovations), commercial buildings, industrial
buildings, and public spaces such as airports,
schools, and hospitals. The products are mainly
sold via sanitary and heating wholesalers, but also
directly to installers.
The company's strategy is to leverage its
leadership position in sustainable indoor comfort
climate solutions with a well-known brand portfolio
and strong relationships with key technical
wholesalers to increasingly provide integrated
solutions.
With heating and cooling of household buildings
making up 17% of total energy consumption in
Europe, the company’s vision is that indoor climates
should not cost the planet’s climate. The industry
can help to create a significant positive impact on
the planet’s future, which is why Purmo Group’s aim
is to create value for society by delivering smart,
connectable, sustainable, and aesthetic solutions.
Purmo Group’s Complete Care sustainability strategy
puts climate at the heart of its business and covers
four key areas, our production, our solutions, our
people, and our communities. These are enabled
by strong governance, safe working practices, and
ethical behaviour.
Material issues in sustainability
In 2021, Purmo Group founded its sustainability
function and ran an extensive stakeholder
engagement survey consisting of over 130 interviews,
a landscape assessment and workshops for Purmo
Group’s employees, customers, peers, competitors
and suppliers. The assessment was completed to
analyse and define material issues for sustainability.
Key issues were prioritised, targets were set, and
roadmaps and governance were created for
implementation. The implementation was developed
together with reporting capabilities. All of which
led up to the launch of the sustainability strategy,
Complete Care.
Material issues identified in 2021:
• 301: Materials
• 302: Energy
• 303: Water and effluents
• 305: Emissions
• 306: Waste
• 308: Environmental compliance
• 403: Occupational Health and Safety
• 404: Training and education
• 405: Diversity and equal opportunity
• 406: Non-discrimination
• 408: Child labour
• 409: Forced or compulsory labour
• 413: Local communities
• 414: Supplier social assessment
Code of Conduct and policies
Purmo Group respects in all activities the
International Labour Organisation’s (ILO) Declaration
on Fundamental Principles and Rights at Work
and complies with local and international laws,
regulations and guidelines to ensure the well-being
and rights of Group personnel. The Purmo Group
Code of Conduct sets the ethical principles that lead
all activities in the Group. The Code of Conduct is
aligned with the United Nations Global Compact.
Purmo Group expects its employees, suppliers and
other business partners to comply with the same
ethical principles. In addition, specific policies have
been established on Group and local levels where
relevant to ensure sustainable compliance with the
Code of Conduct.
Purmo Group has a whistleblowing channel
for both internal and external parties where
anyone can anonymously report any suspected
wrongdoing via a link found in the Group intranet
and corporate website. The channel provides the
opportunity for personnel and external parties to
report any suspected breach of laws or principles
laid out in the Code of Conduct. All reports are
treated as confidential and in accordance with
legal requirements. Promoting the importance to
report observations is part of continuous internal
communication.
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Risk management
Purmo Group’s risk management approach is a
Group-wide process that is guided by the Enterprise
Risk Management Policy and encompasses all
business units. The risk management process maps
Group-wide risks annually. The process is monitored
by the Core Leadership Team and reviewed by the
Board of Directors. Sustainability issues are assessed
as their own risk category, which is the responsibility
of the Head of Sustainability.
Governing sustainability
Purmo Group’s Board of Directors approves the
Sustainability Policy and decides on the Group-level
sustainability strategy and target-setting that will
guide the annual business planning. They also review
Purmo Group’s sustainability performance and
reporting.
Purmo Group’s Management Team (“CLT”) is
responsible for setting the sustainability objectives
and proposing Purmo Group’s sustainability targets
for approval by the Board of Directors. The CLT
monitors the sustainability performance on a bi-
monthly basis.
Purmo Group’s Head of Sustainability & Corporate
Social Responsibility (CSR), with the support of the
ESG steering Group, is responsible for coordinating
and developing sustainability at the Purmo Group
level. This includes the Sustainability Policy and
related Group-level instructions and manuals. The
Head of Sustainability & CSR is also responsible
for monitoring the policy implementation and for
performance reporting to CLT on a bi-monthly basis.
Purmo Group’s Head of Sustainability & CSR leads
sustainability in the development of common goals,
targets, instructions, and procedures in the whole
company.
Purmo Group’s Extended Leadership Team is
responsible for defining detailed sustainability
targets based on ambition defined by CLT and the
Head of Sustainability & CSR, developing action
plans in accordance with Group-level targets,
and ensuring the inclusion of these in the business
goals. The divisions compare their sustainability
performance against the targets monthly or bi-
monthly.
Environment
Purmo Group’s environmental commitments are
to align its operations to a 1.5 C future, increase
resource efficiency, reduce waste, and source key
materials responsibly.
All Purmo Group’s manufacturing plants manage
environmental impacts through environmental
management systems that have locally determined
procedures in place to monitor and continuously
promote its environmental performance. All the
manufacturing plants are ISO14001 certified. In
addition, Purmo Group aims to achieve ISO 50001
energy management certification in all its plants.
Sustainability & CSR
Risk management
Legal
HR
Finance
Communications
ESG Governance model
ESG Governance model illustrates the relationship between management,
ESG steering group, company functions and business divisions.
ESG steering group
Stakeholders
Investors
Radiators
Indoor
Climate Systems
Board of Directors
Audit
Committee
Core Leadership Team
Annual Report 2022 88
Environmental risks deal with increasing regulation
on topics such as the energy efficiency of products
and the EU’s Carbon Border Adjustment Mechanism
(CBAM) which enters its transitional phase from
October 2023 with the permanent system in force
from 1 January 2026, which may negatively impact
Purmo Group’s business operations and investments.
To mitigate these risks Purmo Group aims to develop
and source products that comply with the highest
energy efficiency ranking in their category. Purmo
Group also plans to take the possibility of a carbon
tax into consideration in the Group’s investment
activities, where the carbon tax would be relevant to
the planned operating model. The risk of a potential
carbon tax is further diminished by the fact that
Purmo Group's business units primarily serve their
home region, mainly to and from Europe.
EU taxonomy assessment
Purmo Group is subject to the Non-Financial
Reporting Directive (NFRD) and is required, under
EU Taxonomy Regulation 2020/852, to disclose
the extent to which its economic activities have a
substantial positive environmental impact.
Taxonomy-eligibility describes if an economic activity
is included in the scope of activities recognised in
the Taxonomy Regulation. In the Annual Reports for
2022, published in 2023, companies are obligated to
report also the share of Taxonomy-alignment in their
operations.
Taxonomy-alignment describes if an economic
activity is sustainable based on defined science based
technical screening criteria specified for the activity.
During the first two reporting years of the EU
Taxonomy, the focus is on activities contributing
to climate objectives, climate change mitigation
and adaptation, according to the EU Climate
Delegated Act.
An economic activity is classified as taxonomy
aligned if it:
• Contributes substantially to one or more of the
taxonomy’s six environmental objectives: climate
change mitigation, climate change adaptation,
the sustainable use and protection of water and
marine resources, the transition to a circular
economy, pollution prevention and control, and
the protection and restoration of biodiversity and
ecosystems;
• Does not do any significant harm to any other
environmental objective;
• Is in alignment with the OECD Guidelines for
Multinational Enterprises and UN Guiding
Principles on Business and Human Rights,
including the International Labour Organisation’s
(‘ILO’) declaration on Fundamental Rights and
Principles at Work, the eight ILO core conventions
and the International Bill of Human Rights.
Minimum safeguards
Taxonomy Regulation specifies that in addition to
substantial contribution and 'do nosignificant harm'
criteria, an economic activity can be considered
environmentally sustainable only if it is carried out
in compliance with the minimum safeguards. The
minimum safeguards prevent activities from being
labelled sustainable if they violate human or labour
rights, engage in corrupt, anti-competitive or non-
compliant taxation practices. The compliance can be
assessed by ensuring there are adequate processes
and controls in place in the areas of human rights,
corruption, taxation and fair competition and there
are no breaches or violations existing
Purmo Group assessed compliance with minimum
safeguards by reviewing the company processes
for human rights, corruption, taxation and fair
competition. Whilst we recognise the need to
continuously improve Purmo Group considers
its processes to be on a robust level and with no
violations to meet the alignment with the minimum
safeguards. Purmo Group expects formalised human
rights due diligence process to be in place by the end
of 2023.
EU taxonomy eligible products of Purmo
Group based on 2021 assessment:
• Radiators: Radiators are included under economic
activity 3.5 Manufacture of energy efficiency
equipment, where the description refers to, among
others, NACE
**
code C25 (including C25.21
Manufacture of central heating radiators and
boilers as defined in chapter 1.1.3.1. in Annex I to
the Taxonomy regulation Delegated Act.). Electric
radiators have been excluded as they are not
part of central heating.
• Heating and cooling: Cooling and ventilation
systems are included under economic activity
3.5 where the technical screening criteria refers
in particular to 3.5 (i) cooling and ventilation
systems, 3.5(k) heat pumps
• Convectors: Included under economic activity 3.5
(Manufacture of central heating radiators and
boilers)
• Radiant heating and cooling: Underfloor heating
systems (UFH) are included under economic
activity 3.5 Manufacture of energy efficiency
equipment as they are part of central heating
systems.
• System components: Included under economic
activity 3.5, in particular 3.5(m) energy-efficient
building automation and control systems, 3.5(n)
zoned thermostats and devices for the smart
monitoring of the main electricity loads and heat
loads, 3.5(o) products for heat metering and
thermostatic controls for individual homes, and
for central heating systems.
• Water distribution systems: The product category
mainly includes generic pipes and related
equipment, which are not listed as relevant
economic activities.
• Chimneys: Chimneys are not listed as a relevant
economic activity.
Annual Report 2022 9
9
EU taxonomy aligned products of Purmo
Group based on 2022 assessment:
During 2022 Purmo Group formed a working group
to assess if the eligible activities recognised in the
EU Taxonomy are fulfilling the criteria for Taxonomy
alignment. For each economic activity, Purmo Group
conducted assessment for substantial contribution
and ‘do no significant harm’ criteria to determine
the alignment. The alignment was determined for
the climate change mitigation objective. Minimum
safeguards were assessed on the Group level.
Purmo Group’s taxonomy aligned turnover consists
mostly of solution sales (total package installations)
under the activity 3.5. Manufacture of energy
efficiency equipment for buildings. The total package
deliveries include underfloor heating equipment,
automation, control valves and in some cases also
heat pumps.
Purmo group identified the following as EU
taxonomy aligned products and carried out the
assessments for Taxonomy-eligibility and Taxonomy-
alignment based on the best interpretation of the
Taxonomy Regulation and the Climate Delegated
Act and the currently available guidelines from
the European Commission.
The Human Resources Department is responsible
for monitoring and updating the global policies,
whereas local policies and procedures are subject
to monitoring and continuous improvement at the
country level.
Purmo Group operates many factories and
warehouses with heavy equipment and materials
that can pose risks on employees’ health if proper
procedures and processes are not followed. To
tackle this risk, safe working practices have been
embedded in the sustainability strategy, and all
Purmo Group’s operations are covered by health
and safety policies and procedures implemented on
the country level.
In 2022 the implementation of a new Health and
Safety organisational structure across Purmo Group
was completed. Every manufacturing plant now has
a Health and Safety senior sponsor and manager
who focus to reduce accidents in the workplace and
improve employee wellbeing.
Loss of key people or inability to attract talent can
have an adverse impact on Purmo Group’s business
and operations. To continue to attract and retain top
talent, Purmo Group aims to offer a mix of interesting
career opportunities and employee benefits at an
industry-leading and fast-developing company.
Employee turnover and satisfaction are monitored
regularly and in 2022 Purmo Group carried out a
companywide employee survey achieving an eNPS
score of -8, up from -9 in the previous year.
Human rights
Purmo Group is committed to respecting
internationally acknowledged human rights and
has so far focused on human rights matters in its
own operations such as labour rights and health
and safety. The implementation of the sustainability
programme will expand the human rights work
under the topic of responsible sourcing.
Accordingly in 2022, Purmo Group continued to
evaluate and improve supplier evaluation, and the
target is that all major suppliers will be on-boarded
and audited against responsible sourcing standards
by 2024.
Purmo Group complies with all relevant local
and international regulations, such as the Modern
Slavery Act 2015 in the United Kingdom, and has
prepared and published the Modern Slavery
Statement accordingly.
Anti-corruption and bribery
Ethical behaviour and strong governance are part
of the foundation for Purmo Group’s sustainability
strategy. Purmo Group has zero tolerance towards
bribery and corruption. The Code of Conduct outlines
the approach for ethical business conduct and
is complimented by global policies such as Anti-
Corruption and Anti-Bribery Policy, Competition Law
Compliance Policy, and Financial Crime Risks Policy.
• Radiant heating and cooling: underfloor heating
systems under economic activity 3.5; underfloor
heating systems specifically sold through the
company’s business Thermotech in the Nordics.
• System components: in particular solutions sold
by the company’s business Emmeti in Italy, which
includes a FEBOS system.
The portion of the aligned turnover is lower than that
of the eligible turnover, due to the fact that Purmo
Group’s radiator and underfloor heating product
categories initially identified as eligible do not fulfill
the substantial contribution criteria due to the fact
that there is no required energy labeling currently
available for these products.
Social and employee matters
Purmo Group is committed to building and
maintaining a diverse workforce and inclusive work
environments, opposing all forms of bullying and
discrimination, and fostering equal opportunities
in recruitment, learning and development, and
remuneration, where decisions are made against
objective selection criteria. These commitments
are outlined in our global Equality, Diversity, and
Inclusion Policy. Other global policies specific to
social and employee-related matters include
Health and Wellbeing Policy as well as policies
on recruitment and onboarding, learning and
development, and employee engagement, for which
policies are complemented with local policies and,
where relevant, with additional global guidelines.
Annual Report 2022 10
10
All Purmo Group employees are expected to
familiarise themselves with the Anti-Corruption and
Anti-Bribery Policy, conduct mandatory training on
the Code of Conduct’s anti-corruption elements,
and speak up and report concerns. Employees at
greatest risk of facing corruption – especially those in
the supply chain, international sales, contracting or
procurement – are provided with additional training
on avoiding, preventing, recognising, and reporting
bribery and corruption. All business units are also
expected to reasonably investigate intermediaries
and to include anti-corruption clauses in contracts.
Purmo Group’s most significant risks in corruption
and bribery deal with corrupt arrangements that
may involve extortion or collusion by Purmo Group’s
employees and other individuals to steal, falsify, or
destroy company assets or business information for
personal gain. Purmo Group mitigates these risks
through annual training to increase risk awareness,
via internal procedures, implementation of
prevention processes, and investigation of red flags.
Summary of key non-financial performance indicators
2022 2021
8
Change, %
Production
Scope 1 and 2 GHG emissions, tCO
2
e
1
79,035 86,780 -9%
Scope 3 GHG emissions from procured steel, tCO
2
e
2
279,578 381,166 -27%
Scope 1 and 2 carbon intensity
3
87.4 102.9 -15%
Solutions
Customer Net Promoter Score, cNPS
4
33 N/A -3%
Customer Sustainability Net Promoter Score, sNPS
5
8 N/A N/A
People
Lost Time Injury Frequency Rate, LTIFR
6
4.9 5.2 -6%
Number of safety observations 1,218 1,013 20%
Number of accidents 28 32 -13%
Proportion women in senior management positions 27% 24%
Employee Net Promoter Score (eNPS) -8 -9 -11%
Anti-corruption policy training coverage
7
94% completion
74% pass
99% completion
83% pass
Communities
Number of volunteering hours 6,680 N/A N/A
1
Market-based GHG emissions based on Purmo Group’s procurement mix of electricity and gas in countries with manufacturing operations.
2
2021 World Steel Association data of 1.89 tCO2e embodied carbon produced for every tonne of crude steel cast.
3
tCO2e/net sales in EUR million.
4
Question asked: ‘How likely is it that you would recommend <Purmo brand> to a friend or colleague?’
5
Question asked: ‘How likely is it that you would recommend <Purmo brand> to a friend or colleague as a leader in sustainable indoor climate comfort?’
6
Lost Time Injury Frequency Rate (LTIFR) is the number of lost time injuries occurring in a workplace per 1 million hours worked.
7
Of Purmo Group people in a position to make decisions on behalf of the company
8
Certain data from the comparison periods are unavailable as the data collection for these sustainability focus areas began only after
the comparison periods.
Annual Report 2022 1111
Substantial Contribution criteria
DNSH criteria
("Does Not Significantly Harm")
Economic activties Codes
Absolute
turnover,
MEUR
Propor-
tion of
turnover,
%
Climate
Change
Mitigati-
on, %
Climate
Change
Adapta-
tion, %
Water
marine
resource,
%
Circular
Econom,
%
Pollution,
%
Biodiver-
sity and
ecosys-
tems, %
Climate
Change
Miti-
gation,
(Y/N)
Climate
Change
Adap-
tation,
(Y/N)
Water
marine
resources,
(Y/N)
Circular
Economy,
(Y/N)
Pollution,
(Y/N)
Biodi-
versity
and eco-
systems,
(Y/N)
Mini-
mum
safe-
guards,
(Y/N)
Category
(enabling
activity
(E)
Category
(transi-
tional
activity)
(T)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmental sustainable activities
(Taxonomy aligned)
Manufacture of energy eciency
equipment for buildings
3.5 51.7 6% 100% N/A Y Y Y Y Y Y 3% E
Turnover of environmental sustainable
activities (Taxonomy-aligned) (A.1.)
51.7 6%
A.2. Taxonomy-Eligible but not
environmental sustainable activites
(not Taxonomy-aligned activities)
Manufacture of energy eciency
equipment for buildings
3.5 710.5 79%
Turnover of Taxonomy-eligible but not
environmental sustainable activities
(not Taxonomy-aligned activities) (A.2.)
710.5 79%
Total (A.1. + A.2) 762.2 84%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible
activities (B)
141.9 16%
Total (A+B) 904.1 100%
Proportion of Turnover from products or services associated with Taxonomy-aligned aconomic activities 2022
Taxonomy-
aligned
proportion
of turnover
year N, %
Taxonomy-
aligned
proportion
of turnover
year N-1, %*
Annual Report 2022 1212
Substantial Contribution criteria
DNSH criteria
("Does Not Significantly Harm")
Economic activties Codes
Absolute
turnover,
MEUR
Propor-
tion of
turnover,
%
Climate
Change
Mitigati-
on, %
Climate
Change
Adapta-
tion, %
Water
marine
resource,
%
Circular
Econom,
%
Pollution,
%
Biodiver-
sity and
ecosys-
tems, %
Climate
Change
Miti-
gation,
(Y/N)
Climate
Change
Adap-
tation,
(Y/N)
Water
marine
resources,
(Y/N)
Circular
Economy,
(Y/N)
Pollution,
(Y/N)
Biodi-
versity
and eco-
systems,
(Y/N)
Mini-
mum
safe-
guards,
(Y/N)
Category
(enabling
activity
(E)
Category
(transi-
tional
activity)
(T)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmental sustainable activities
(Taxonomy aligned)
Manufacture of energy eciency
equipment for buildings
3.5 0.6 3% 100% N/A Y Y Y Y Y Y 3% E
Turnover of environmental sustainable
activities (Taxonomy-aligned) (A.1.)
0.6 3%
A.2. Taxonomy-Eligible but not
environmental sustainable activites
(not Taxonomy-aligned activities)
Manufacture of energy eciency
equipment for buildings
3.5 15.1 78%
Turnover of Taxonomy-eligible but not
environmental sustainable activities
(not Taxonomy-aligned activities) (A.2.)
15.1 78%
Total (A.1. + A.2) 15.6 81%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible
activities (B)
3.6 19%
Total (A+B) 19.3 100%
Proportion of CapEx from products or services associated with Taxonomy-aligned aconomic activities 2022
Taxonomy-
aligned
proportion
of turnover
year N, %
Taxonomy-
aligned
proportion
of turnover
year N-1, %*
Annual Report 2022 1313
Substantial Contribution criteria
DNSH criteria
("Does Not Significantly Harm")
Economic activties Codes
Absolute
turnover,
MEUR
Propor-
tion of
turnover,
%
Climate
Change
Mitigati-
on, %
Climate
Change
Adapta-
tion, %
Water
marine
resource,
%
Circular
Econom,
%
Pollution,
%
Biodiver-
sity and
ecosys-
tems, %
Climate
Change
Miti-
gation,
(Y/N)
Climate
Change
Adap-
tation,
(Y/N)
Water
marine
resources,
(Y/N)
Circular
Economy,
(Y/N)
Pollution,
(Y/N)
Biodi-
versity
and eco-
systems,
(Y/N)
Mini-
mum
safe-
guards,
(Y/N)
Category
(enabling
activity
(E)
Category
(transi-
tional
activity)
(T)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmental sustainable activities
(Taxonomy aligned)
Manufacture of energy eciency
equipment for buildings
3.5 0.4 2% 100% N/A Y Y Y Y Y Y 2% E
Turnover of environmental sustainable
activities (Taxonomy-aligned) (A.1.)
0.4 2%
A.2. Taxonomy-Eligible but not
environmental sustainable activites
(not Taxonomy-aligned activities)
Manufacture of energy eciency
equipment for buildings
3.5 17.6 91%
Turnover of Taxonomy-eligible but not
environmental sustainable activities
(not Taxonomy-aligned activities) (A.2.)
17.6 91%
Total (A.1. + A.2) 18.1 93%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible
activities (B)
1.3 7%
Total (A+B) 19.4 100%
Proportion of OpEx from products or services associated with Taxonomy-aligned aconomic activities 2022
Taxonomy-
aligned
proportion
of turnover
year N, %
Taxonomy-
aligned
proportion
of turnover
year N-1, %*
Annual Report 2022 1414
issuance of a maximum of 8,000,000 class C shares
as well as the issuance of special rights entitling to
class C shares referred to in Chapter 10, Section 1 of
the Finnish Companies Act in one or several tranches.
The proposed number of shares corresponds to
approximately 20 per cent of all class C shares in
the company. However, a maximum of 25 per cent
of the authorisation, i.e., a maximum of 2,000,000
class C shares (including shares to be received
based on special rights) may be used for incentive
arrangements and remuneration schemes.
The Annual General Meeting authorised the Board
of Directors to repurchase a maximum of 4,000,000
of the company’s own class C shares as well as on
the acceptance of them as a pledge. The shares
shall be repurchased with funds from the company’s
Transaction day Shareholder
Direct holding
after the transaction
Direct holding
before the transaction Total holding
5 Jan 2022 Rettig Group Ltd. 66.64% 68.28% 66.64%
17 Aug 2022 Virala Corporation
1
15.09% 12.32% 15.14%
1
Virala Corporation held 4,895,000 class C and 1,565,217 class F shares of Purmo Group on 31 December 2022.
unrestricted shareholders’ equity. The number of
shares corresponds to approximately 10 per cent of
all class C shares in Purmo Group.
The authorisation may be used to improve Purmo
Group’s capital structure, to finance or carry out
corporate acquisitions or other arrangements, for
incentive arrangements and remuneration schemes
or for other purposes resolved by the Board of
Directors. The authorisations are effective until the
end of the next Annual General Meeting, however,
no longer than until 30 June 2023.
Flagging notifications
During 2022, Purmo Group received the following
notifications from major shareholders:
More information on flagging notifications is available on the company’s website.
Shares and shareholders
Basic share information
31 Dec 2022
Listed on Nasdaq Helsinki
Trading code PURMO
ISIN code FI4000507488
Number of class C shares 41,112,713
Number of class F shares 1,565,217
High, EUR 15.65
Low, EUR 8.12
Volume-weighted average price 10.45
Closing price, EUR,
31 December 2022 8.22
Market capitalisation, class C share,
EUR million, 31 December 2022 337.9
Number of shareholders 3,315
(31 Dec 2021: 3,095)
Number of traded shares 11,872
Purmo Group Plc has two share classes of which
class C shares are listed and class F shares are held
by Purmo Group Plc’s founding shareholder, Virala
Corporation.
The company’s class F shares are subject to
redemption and consent clauses in accordance
with the Articles of Association, which restrict the
rights to transfer or acquire class F shares. The
holder of class F shares has the right to demand
conversion into class C shares subject to certain price
hurdles calculated in accordance with the Articles
of Association. Further class F shares carry a right to
asset distribution equivalent to a certain proportion
of assets distributed to class C shares in accordance
with the Articles of Association.
Purmo Group Plc (former Virala Acquisition
Company Plc) announced on 20 September
2021 that the first share price hurdle as set out in
the company’s Articles of Association had been
exceeded, pursuant to which 18.75 per cent of
class Fshares held by the company’s founding
shareholder, Virala Corporation, have become
eligible for conversion into class C shares starting
from 28 June 2024.
The number of shares outstanding on
31December 2022 was 41,112,713 class C shares and
1,565,217 class F shares. The company’s registered
share capital on 31 December 2022 was EUR
3,080,000. The company has no treasury shares.
Trading in Purmo Group Plc’s shares commenced in
Nasdaq Helsinki on 3 January 2022.
On 31 December 2022, the five largest
shareholders were Rettig Group Ltd (61.80 per cent
of total shares), Virala Corporation (15.14 per cent),
Ahlström Invest B.V. (2.81 per cent), Varma Mutual
Pension Insurance Company (2.34 per cent) and
Jussi Capital Oy (1.44 per cent).
Board authorisation regarding share issue
and share repurchase
The Annual General Meeting of 25 April 2022
authorised the Board of Directors to resolve the
Annual Report 2022 15
15
Shareholders by type on 31 December 2022
Owner type
Number of
shares % of shares
Family-owned investment
companies 36,043,763 84.46%
Private Individuals 2,060,841 4.83%
Pension & insurance 1,713,453 4.01%
Other 979,935 2.30%
Fund companies 779,627 1.83%
Foundation 717,770 1.68%
Unknown type 382,541 0.89%
Total number of shares 42,677,930 100.00%
Shareholders by holding on 31 December 2022
Owner distribution by holdings
Number of
shares % of shares
1-100 96,586 0.23%
101-500 295,502 0.69%
501-1,000 185,590 0.43%
1,001-5,000 393,338 0.92%
5,001-10,000 253,313 0.59%
10,001-50,000 850,164 1.99%
50,001-100,000 364,246 0.85%
100,001-500,000 4,205,685 9.86%
500,001-1,000,000 1,616,077 3.79%
1,000,001- 34,034,888 79.75%
Unknown holding size 382,541 0.89%
Total 42,677,930 100.00%
Shareholding by country on 31 December 2022
Country Number of shares % of shares
Finland 39,033,162 91.46%
Netherlands 1,201,678 2.82%
Sweden 1,000,757 2.35%
United Kingdom 728,347 1.71%
Denmark 229,989 0.54%
Luxembourg 51,000 0.12%
Poland 35,628 0.08%
Austria 3,960 0.01%
Estonia 2,804 0.01%
Belgium 2,603 0.01%
Germany 1,874 0.00%
Italy 1,784 0.00%
France 670 0.00%
South Africa 441 0.00%
India 202 0.00%
Russian Federation 150 0.00%
Czech Republic 100 0.00%
Thailand 100 0.00%
Vietnam 100 0.00%
Mexico 40 0.00%
Unknown country 382,541 0.89%
Total 42,677,930 100.00%
Largest shareholders on 31 December 2022
Name Shares Change % of shares % of votes
1 Rettig Group Oy Ab 26,373,971 0 61.8% 61.8%
2 Virala Corporation 6,460,217 0 15.1% 15.1%
3 Ahlstrom Invest B.V. 1,200,700 0 2.8% 2.8%
4 Varma Mutual Pension Insurance Company 1,000,000 0 2.3% 2.3%
5 Jussi Capital Oy 616,077 0 1.4% 1.4%
6 Fennia Mutual Insurance Company 500,000 0 1.2% 1.2%
7 Svenska Litteratursällskapet i Finland 500,000 0 1.2% 1.2%
8 Oy Julius Tallberg Ab 442,000 0 1.0% 1.0%
9 John Peter Leesi 408,927 0 1.0% 1.0%
10 Aipa Invesco AB 337,208 0 0.8% 0.8%
Total 10 37,839,100 0 88.7% 88.7%
Others 4,838,830 0 11.3% 11.3%
Total number of shares 42,677,930 0 100.0% 100.0%
Managers' transactions
Purmo Group's managers' transactions are
published as stock exchange releases, and they are
available on the company’s website.
Share price performance in 2022
Annual Report 2022 1616
Personnel
2022 2021 2020
Number of employees at
the end of the period 3,372 3,471 3,262
Average number of
employees 3,476 3,360 3,287
Personnel by region
1
2022 2021 2020
Northern Europe 678 661 627
Western Europe 950 927 938
Central and Eastern Europe 1,265 1,421 1,232
Southern Europe 329 317 325
Rest of the world 150 145 140
Total 3,372 3,471 3,262
1
Figures for 2020-2021 restated for comparability reasons.
Changes in the management team
On 5 October 2022, Purmo Group announced a new
organisational structure effective from 1 January
2023. The management team within the new
organisational structure is as follows:
• John Peter Leesi, Chief Executive Officer
• Erik Hedin, Chief Operating Officer; leading also
the strategy acceleration programme
• Mike Conlon, President, Climate Solutions division
• Barry Lynch, President, Climate Products &
Systems division
• Linda Currie, Chief People Officer
On 25 November 2022, Purmo Group announced
that Matts Rosenberg had been appointed interim
CFO of Purmo Group Plc, effective as of 1 January
2023. He reports to CEO John Peter Leesi. On 22
February 2023, Purmo Group announced that Jan-
Elof Cavander (MSc. Ind. Eng.) has been appointed
Chief Financial Officer of Purmo Group Plc and a
member of the Management team. He will join
Purmo Group on 22nd of June 2023, the latest. Mr.
Cavander will report to Chief Executive Officer John
Peter Leesi and will be based in Helsinki, Finland.
On 4 July 2022, Barry Lynch was appointed Senior
Vice President of the Radiators division and member
of the Management Team. He succeeded Tomasz
Tarabura, who left the company.
Share-based incentive plans
On 20 July 2022, Purmo Group announced that
the Board of Directors had decided to launch a
new share-based incentive plan for management
and key employees. The purpose of the plan
is to align the targets of shareholders and key
employees in order to increase the long-term value
of the company, retain key employees and offer a
competitive incentive plan that is based on company
share ownership and successful performance.
On 27 September 2022, Purmo Group announced
that the Board approved a total of 66,403
subscriptions of new class C shares in the share
issue for management and key employees. The
subscription price of EUR 10.23 per share was based
on the trade volume weighted average price of the
Company’s share on Nasdaq Helsinki Ltd during 12
July–5 September 2022. The total subscription price
of the new class C shares was EUR 679,302.69.
The performance criterion of the plan is the Total
Shareholder Return (TSR) of the class C share. The
minimum threshold for reward pay-out is a share
price of EUR 16.00, and maximum reward shares are
earned at a share price of EUR 24.00. Paid dividends
and return on capital during the plan are added to
the share price when calculating the TSR.
The reward will be paid in both Purmo Group
class C shares and in cash to cover taxes and
statutory social security contributions arising
from receipt of the reward. The rewards payable
according to the incentive plan, including the
proportion to be paid in cash, correspond to the
Governance
A Corporate Governance Statement, required by the
Corporate Governance Code 2020, is presented as a
separate report in connection with the Financial
Statements. In addition, it is publicly available on the
company's website.
Personnel
The number of Group full-time-equivalent
employees averaged 3,476 (3,360) in January–
December. At the end of the period, the Group had
3,372 (3,471) full-time-equivalent employees. The
decrease in full-time-equivalent employees was
mainly due to organisational effectiveness related
to Accelerate PG.
Board of Directors’ shareholdings on
31 December 2022
Class C
shares
Class F
shares
Tomas von Rettig 0 0
Matts Rosenberg 2,496 0
Alexander Ehrnrooth 5,560 0
Carina Edblad 1,784 0
Carlo Grossi 1,784 0
Jyri Luomakoski 1,970 0
Catharina Stackelberg 2,476 0
Total 16,070 0
Out of total shares
outstanding (class C shares) 0.04% 0.00%
Influence in Rettig Group Ltd which held 26,373,971 class C shares in
Purmo Group on 31 December 2022.
Influence in Virala Corporation which held 4,895,000 class C shares
and 1,565,217 class F shares in Purmo Group on 31 December 2022.
Management Team's shareholdings on
31 December 2022
Class C
shares
Class F
shares
John Peter Leesi 408,927 0
Erik Hedin 245,356 0
Mike Conlon 31,770 0
Linda Currie 23,582 0
Barry Lynch 31,718 0
Total 741,353 0
Out of total shares
outstanding (class C share) 1.80% 0.00%
Wages and salaries
EUR million 2022 2021 2020
Wages and salaries total 127.6 128.2 120.1
Annual Report 2022 1717
value of an approximate maximum total of 1,500,000
class C shares of Purmo Group Plc. The final number
of reward shares is subject to each participant’s
personal share ownership and achievement of set
TSR targets.
Purmo Group Plc has financed the subscriptions of
the class C shares by offering interest-bearing loans
to the participants to a maximum amount of 50
per cent of the subscription value of the subscribed
shares. Participants have pledged the subscribed
shares as security for performing their obligations
under the concluded loan agreement.
The performance period covers the financial
years of 2022–2025 and the payout period covers
the financial years of 2026–2027. The plan has 29
participants in total.
Purmo Group Plc’s Remuneration Policy is
available on the company’s website.
Annual General Meeting
The Annual General Meeting was held on 25 April
2022. The meeting adopted the Annual Accounts,
including the Consolidated Annual Accounts for 2021,
and discharged the members of the company’s
Board of Directors and the CEO from the liability for
the financial year 2021. The Annual General Meeting
also adopted the remuneration policy. All resolutions
of the Annual General Meeting are available on the
company’s website.
Return of capital
The Annual General Meeting decided that a return
of capital of EUR 0.36 per class C share is to be paid
for the financial year 2021 in two instalments and
that a return of capital for class F shares is to be
paid in accordance with the Articles of Association
of the company for the financial year 2021 in two
instalments. The first instalment of the return of
capital was EUR 0.18 per class C share and EUR 0.03
per class F share. The first instalment of the return
on capital was paid on 4 May 2022. The second
instalment of the return on capital was EUR 0.18 per
class C share and EUR 0.04 per class F share. The
second instalment was paid on 3 October 2022.
Remuneration of the members of the Board of
Directors
The Annual General Meeting resolved that the
following annual remuneration will be paid to the
members of the Board of Directors: EUR 92,000
per year for the Chair of the Board, EUR 53,000 per
year for the Vice Chair of the Board, EUR 53,000 per
year for each of the Chairs of the Board Committees
and EUR 48,000 per year for each ordinary board
member.
Approximately 40 per cent of the remuneration
is to be used to acquire class C shares and the
remainder is to be paid in cash. The annual
remuneration shall be paid to the members of the
Board of Directors in proportion to the length of their
term of office.
Board of Directors
The Annual General Meeting resolved that the
number of members of the Board of Directors shall
be seven. Tomas von Rettig, Matts Rosenberg,
Alexander Ehrnrooth, Catharina Stackelberg, Carlo
Grossi, Carina Edblad and Jyri Luomakoski were re-
elected to the Board of Directors for a term of office
ending at the conclusion of the next Annual General
Meeting. The Annual General Meeting elected Tomas
von Rettig as the Chairman of the Board and Matts
Rosenberg as the Vice-Chairman.
Board authorisations
Board authorisations decided by the Annual General
Meeting are presented in the section ‘Shares and
Shareholders’.
Committees nominated by the Board
Purmo Group Plc’s Board of Directors appointed
the following members to its committees at its
constitutive meeting on 25 April 2022:
• Audit Committee: Jyri Luomakoski (Chair), Matts
Rosenberg, Alexander Ehrnrooth
• M&A Committee: Matts Rosenberg (Chair),
Alexander Ehrnrooth, Carlo Grossi
• Remuneration Committee: Tomas von Rettig
(Chair), Catharina Stackelberg, Carina Edblad
Shareholders’ Nomination Board
In June 2022, Purmo Group Plc’s three largest
shareholders nominated the following
representatives to the Shareholders’ Nomination
Board:
• Matts Rosenberg (Chair)
• Alexander Ehrnrooth
• Peter Seligson
Risks and uncertainties in the near future
Purmo Group is affected by global supply chain
disturbances which started during the COVID-19
pandemic. This involves uncertainties and may
adversely affect the demand and delivery capability
of the company’s products as well as the availability
of financing. Possible new COVID restrictions in
China in particular might have an effect on Purmo
Group’s business. Purmo Group has been able to
manage the adverse effect of the disturbances on
its operations and hence, the impact of challenges in
sourcing raw materials and components has been
limited.
Purmo Group’s costs have been affected by
commodity and energy price increases caused, for
example, by the sharp global increase in demand
for commodities as well as other supply chain
disturbances. The company has been able to
manage profitability by implementing sales price
increases with a reasonable delay. Inflation rates in
Purmo Group’s core markets are high and there is
no certainty whether the inflation rates will decrease
in the near future. Fluctuations in the prices of raw
materials, consumables, energy, and freight rates
as well as problems with the availability of raw
materials, supplies, labour and freight shipping
may have a negative impact on profitability and
operations in general.
Annual Report 2022 18
18
to the expectations and requirements. The ongoing
energy transition is expected to accelerate the
demand for low-temperature systems and solutions
which are compatible with energy sources other than
fossil fuels. This is an opportunity for the execution of
Purmo Group’s solution-selling strategy. There are
differences between markets in how the transition
changes the product mix demand, however, Purmo
Group is well-positioned to manage the change and
capture opportunities with the support of its wide
product portfolio.
The war in Ukraine has resulted in economic
sanctions being imposed on Russia by many
countries. Purmo Group has about 210 employees
in Russia and two freelance sales representatives
in Ukraine, based in Kyiv. The Group has been
importing into both countries for several years
and, in 2021, established sourcing, production and
additional sales in Russia through its acquisition of 51
per cent of the shares in Euroradiators Holding B.V.,
a Dutch holding company holding all shares in the
Russian Evroradiators LLC, from Bosch Group. Before
suspending sales and operations in Russia, sales
were generated both from Polish imports as well as
an increasing portion of local production following
the acquisition. Imports into Ukraine made up less
than 1 per cent of total Group sales in 2022 and those
into Russia, less than 4 per cent. On 31 March 2022,
Purmo Group decided to exit its business in Russia.
The economic downturn in Ukraine continues to
have a significant negative impact on demand for
Purmo Group’s products in the country. The company
temporarily halted deliveries to Ukraine after the
invasion but has later continued deliveries where
arrangements have been possible. The health and
safety of employees, customers and the business are,
as always, a priority.
The impact of the war has started to materialise
in markets other than Russia and Ukraine, with
effects including high inflation and a decline in the
construction market. There is a risk that private and
commercial investment decisions will continue to
be postponed or cancelled due to high inflation,
increased interest rates and/or general economic
uncertainty. The length of the decline in the
construction markets in areas other than Russia and
Ukraine is hard to estimate.
Events after the review period
On 22 February 2023, Purmo Group announced
that Jan-Elof Cavander (MSc. Ind. Eng.) has been
appointed Chief Financial Officer of Purmo Group
Plc and a member of the Management team. He
will join Purmo Group on 22 June 2023, the latest. Mr.
Cavander will report to Chief Executive Officer John
Peter Leesi and will be based in Helsinki, Finland.
On 16 February 2023, Purmo Group announced
that it issues green capital securities of EUR 60
million in total (the “Capital Securities”). The Capital
Securities will bear interest at a fixed rate of 9.5 per
cent per annum until 23 February 2026 after which
the Capital Securities will bear interest at a floating
interest rate quarterly in arrears on each interest
payment date. The Capital Securities do not have
a specified maturity date, and Purmo Group is not
under an obligation to repay, repurchase or redeem
the Capital Securities at any specified date. Purmo
Group has the possibility to redeem the Capital
Securities on the reset date, 23 February 2026.
Purmo Group’s major shareholder, Rettig Group Oy
Ab, and its affiliates are participating in the issuance
by subscribing for the Capital Securities in an
amount of EUR five (5) million. The rationale for the
issuance of the Capital Securities is to ensure funding
for Purmo Group’s announced strategy acceleration
programme. The net proceeds from the issue will
be used in accordance with Purmo Group’s Green
Finance Framework announced on 13 February
2023. The issue date for Capital Securities will be 23
February 2023.
On 13 February 2023, Purmo Group announced
that it has established a Green Finance Framework
to integrate the company’s sustainability ambitions
into its funding. The Green Finance Framework is
designed to support financing or refinancing Eligible
Assets and Expenditures, in part or in full, that enable
energy efficiency improvements, such as equipment
for heating and cooling systems, and components
enabling smart controlling and monitoring of heating
and cooling systems.
The short-term demand for Purmo Group’s
products depends on fluctuations in demand in the
construction industry, which is cyclical in nature,
especially in new building. Volumes and profitability
may vary as a result of economic conditions and the
amount of investments in real estate.
Financial uncertainty in the global economy
and rising inflation can increase volatility in foreign
exchange rates as well as have an adverse effect
on interest rates and the availability of funding.
Due to Purmo Group’s global presence, it is
exposed to currency risks. Purmo Group’s financial
risk management approach is to hedge highly
probable foreign currencies (Swedish krona, British
pound, Polish zloty and Romanian leu) cash flows.
Regardless of hedging activities, the Group may still
encounter fluctuations in its financial position due
to volatility in foreign exchange rates. The Central
bank’s actions to tackle inflation with tightening
monetary policy have had an impact on the cost
of funding for Purmo Group. The company has
encountered financial derivatives to reduce and
manage the impact of interest rate fluctuations. The
Group has sufficient short- and long-term committed
funding to meet its short- and long-term obligations.
Climate change-related impacts mean that Purmo
Group must develop products that meet customer
expectations and follow the changing regulations
related to, for example, energy efficiency and
product life cycle requirements. Purmo Group has
a sustainability strategy and a function. Proactive,
effective and right measures may mean that Purmo
Group is able to use business opportunities relating
Annual Report 2022 19
19
Board of Director's proposal
for the distribution of profit
The parent company’s distributable equity on 31
December 2022 totalled EUR 407,036,848.65. The
Board of Directors of Purmo Group Plc proposes
to the Annual General Meeting convening on 12
April 2023 that a return of capital of EUR 0.36 per
class C share be paid for the financial year 2022
and that a return of capital for class F shares be
paid in accordance with the Articles of Association
of the Company for the financial year 2022 from
the reserve for invested unrestricted equity of the
Company.
All the class C shares in the Company are entitled
to a return of capital except for treasury shares held
by the Company on the return of capital record date.
In accordance with the Articles of Association of the
Company and as a consequence of the first share
price hurdle for conversion of class F shares into
class C shares having been exceeded in September
2021, class F shares currently carry a right to asset
distribution equivalent to 0.69 per cent of the return
of capital proposed to be distributed to class C
shares, which corresponds to a return of capital of
EUR 0.07 per class F share.
According to the Company’s dividend policy, at
least 40% of annual net profit will be distributed as
dividends or return of capital.
The return on capital is proposed to be paid in
four instalments in Q2 2023, Q3 2023, Q4 2023 and
Q1 2024.
Annual Report 2022 20
20
Key figures Information about the share
EUR million 1-12/2022 1-12/2021 1-12/2020
Net sales 904.1 843.6 671.2
EBITDA 78.5 33.6 71.9
EBITDA margin 8.7 % 4.0% 10.7%
Adjusted EBITDA 92.9 103.9 85.1
Adjusted EBITDA margin 10.3 % 12.3% 12.7%
EBITA 46.8 6.3 44.9
EBITA margin 5.2 % 0.8% 6.7%
Adjusted EBITA 64.6 76.6 58.1
Adjusted EBITA margin 7.1 % 9.1% 8.7%
EBIT 39 3.5 42.0
EBIT margin 4.3 % 0.4% 6.3%
Profit before tax 21.6 -5.1 31.9
Profit for the period 13.1 -18.8 25.3
Adjusted profit for the period 34.9 51.4 38.5
Earnings per share, basic, EUR 0.32 -0.65 0.86
Adjusted Earnings per share, basic, EUR 0.85 1.77 1.32
Cashflow from operating activities 31.1 35.4 68.9
Capex 24 14.8 11.6
Acquisitions 14.6 4.5 0.0
Adjusted Operating Cash Flow for the last 12 months 51.9 50.2
1
94.2
Cash conversion 55.9 % 48.3%
1
110.7%
Cash and cash equivalents 56.3 177.6 55.0
Net working capital 91.4 72.3 33.5
Operating capital employed 305 271.8 235.6
Return on operating capital employed 12.8 % 1.5% 17.8%
Net debt 275.2 239.5 75.1
Net debt / Adjusted EBITDA 2.96 2.3 0.9
Equity / Asset ratio 41.0 % 37.3% 61.7%
Return on Equity 3.3 % -4.0% 4.8%
1
Figures for 1-12/2021 restated for comparability reasons.
EUR million 31 Dec 2022 31 Dec 2021 31 Dec 2020
Share capital, at the end of the year, EUR million 3.1 3.1 0.0
Class C-shares outstanding at the end of the year
1
41,112,713 40,374,531 28,846,195
Class F-shares outstanding at the end of the year 1,565,217 1,565,217 N/A
Weighted average adjusted number of shares, basic 41,244,426 29,124,487 28,787,686
Weighted average adjusted number of shares, diluted 41,244,426 29,124,487 28,964,881
Earnings per share, EUR 0.32 -0.65 0.86
Earnings per share, diluted, EUR 0.32 -0.65 0.86
Dividend payout per class C-share and return of capital, EUR
2
0.36 0.36 N/A
Dividend payout per class F-share and return of capital, EUR
2
0.07 0.07 N/A
Dividend and return of capital per earnings, class C-share, % 112.7% -83.0% N/A
Dividend and return on capital per earnings, class F-share, % 0.3% -8.3% N/A
Eective dividend yield, class C-share, % 4.4% 2.5% N/A
Equity per share, EUR 9.45 9.31 18.94
Market capitalisation, class C-share, EUR million 337.9 413.6 N/A
Price to earnings ratio (P/E) 25.69 -21.85 N/A
Highest share price, EUR 15.65 14.50 N/A
Lowest share price, EUR 8.12 9.78 N/A
Volume-weighted average share price, EUR 10.45 11.40 N/A
Share price, 31 December, EUR 8.22 14.20 N/A
1
2019-2020 converted with merger consideration ratio class K share to class C share 2,600334506.
2
The amount for 2022 is based on the Board of Directors' proposal to the AGM.
Annual Report 2022 21
Calculation of key figures
Key figure Definition Reason for use
EBIT Profit before tax and net financial items
(Operating profit).
EBIT is used to measure profitability generated by
operating activities of the Group.
EBIT margin EBIT as per centage of net sales.
EBITDA Operating profit before depreciation, amortisation and
impairment.
EBITDA is an indicator to measure the operating
performance of the Group, before depreciation,
amortisation and impairment.
EBITDA margin EBITA as per centage of net sales.
EBITA Operating profit before the amortisation of intangibles
including trademarks.
EBITA is an indicator to measure the operating
performance of the Group, before amortisation of
intangibles including trademarks.
EBITA margin EBITA as per centage of net sales.
Gross profit Net sales less cost of sales.
Comparability
adjustments
Comparability adjustments comprise of direct
transaction and integration costs on M&A activities,
restructuring costs and costs incurred in connection
with performance improvement programmes, costs
that have been incurred in connection with the
formation of Purmo Group and costs incurred to
achieve stand-alone readiness which will not continue
post-merger as well as costs incurred as a result of
Rettig Group’s ownership comprising of management
fees and Rettig Group’s legacy incentive plans in
addition to other one-o costs such as legal claims or
significant out-of-period adjustments and exceptional
gains and losses on sale of fixed assets.
Comparability adjustments account for items that
have been adjusted due to specific events that
otherwise aect comparability between dierent
periods. Provides a better understanding to
management and investors of the comparable
operating activities.
Adjusted EBITDA, adjusted EBITDA margin, Adjusted
EBITA and Adjusted EBITA margin are presented
in addition to EBIT, EBITDA and EBITA to reflect
the underlying business performance by adjusting
for items that the Group considers impacting
comparability (“Comparability adjustments”).
Adjusted EBITDA EBITDA before comparability adjustments.
Adjusted EBITDA
margin
Adjusted EBITDA as per centage of net sales.
Adjusted EBITA EBITA before comparability adjustments.
Adjusted EBITA
margin
Adjusted EBITA as per centage of net sales.
Adjusted Profit for
the period
Profit before the period before comparability
adjustments.
Key figure Definition Reason for use
Capex Capex is a measure of capital expenditure for the
period which comprises the Group’s investments in
property plant and equipment and intangible assets
derived from the consolidated cash flow statement.
Capex is an indicator of the Group’s investments in
property plant and equipment and intangible assets.
Acquisitions
(M&A)
Acquisitions of subsidiaries and investments in
associates derived from the consolidated cash flow
statement for the period.
Acquisition capex is an indicator for investments in
acquisition of businesses that are intended to grow
the Group’s product or service oering, assets or
technologies, productive capacity or performance.
Adjusted
operating cash
flow for the last 12
months
Adjusted EBITDA on a rolling twelve-month basis less
change in net working capital and capex on a rolling
twelve-months basis.
Adjusted operating cash flow provides information
on the Group’s operating cash flow on an
annualised basis, excluding adjusting items.
Cash conversion Adjusted operating cash flow divided by Adjusted
EBITDA based on a rolling twelve-month calculation.
Cash conversion is used to assess Purmo Group’s
eciency to convert its operating results into cash.
The ratio indicates the Group’s capacity to pay
dividends and / or generate funds for acquisitions or
other transactions.
Net working
capital
Purmo Group’s inventories, operative receivables
less trade and other operative liabilities.
Net working capital is a useful measure to monitor
the level of direct net working capital tied to the
operations and changes therein.
Operating capital
employed
Net working capital, other intangible assets, property,
plant, equipment and right-of-use assets.
Capital employed presents the total investment in
the Group’s business operations.
Return on
operating capital
employed
EBIT based on a rolling twelve-month calculation
divided by operating capital employed.
Measures the return on the capital tied up in the
business.
Net debt Non-current and current borrowings (including
shareholder loan) and non-current and current lease
liabilities less cash and cash equivalents.
To show the net of interest-bearing assets and
interest-bearing liabilities.
Net debt/Adjusted
EBITDA
Net debt divided by Adjusted EBITDA based on a
rolling twelve-month calculation.
The ratio indicates how fast the Group can repay its
net debt using adjusted EBITDA (expressed in years),
and it is a useful measure to monitor the level of the
Group’s indebtedness.
Equity to Asset
ratio
Total equity attributed to the owners of the company
divided by total assets derived from the IFRS
consolidated financial statements.
The ratio is a useful indicator to measure how much
of the Group’s assets are funded by issuing shares
rather than through external borrowings.
Return on equity Group’s profit for the period attributable to the owners
of the Parent based on a rolling twelve-month basis
divided by the average total equity attributable to
owners of the company.
Shows owners the return on their invested capital.
Annual Report 2022 22
Reconciliation of Alternative Performance Measures
EUR million unless otherwise indicated 2022 2021 2020
Comparability adjustments
IFRS 2 merger impact - 52.3 -
M&A related transactions and integration costs 2.2 0.1 0.4
Restructuring costs and one-o costs related to eciency programs 6.3
1
8.9 7.8
Formation of Purmo group and standalone preparations 0.3 6.6 2.0
Management fee to owners and legacy Rettig Group incentive plans 0 2.4 2.9
Impairment and write-down 12.9 - -
Other 0.2 0.0 0.1
Total adjustments 21.7 70.2 13.2
Net sales 904.1 843.6 671.2
EBIT 39.0 3.5 42.0
EBIT margin 4.3% 0.4% 6.3%
Amortisation and impairment 7.9 2.9 2.9
EBITA 46.8 6.3 44.9
EBITA margin 5.2% 0.8% 6.7%
Depreciation and impairment 31.6 27.3 27.0
EBITDA 78.5 33.6 71.9
EBITDA margin 8.7% 4.0% 10.7%
Adjusted EBITDA
EBIT 39.0 3.5 42.0
Depreciation, amortisation and impairment excluding
comparability adjustments 32.1 30.2 29.9
Adjustments 21.7 70.2 13.2
Adjusted EBITDA 92.9 103.9 85.1
Adjusted EBITDA margin 10.3% 12.3% 12.7%
EUR million unless otherwise indicated 2022 2021 2020
Adjusted EBITA
EBIT 39.0 3.5 42.0
Amortisation excluding comparability adjustments 3.9 2.9 2.9
Adjustments 21.7 70.2 13.2
Adjusted EBITA 64.6 76.6 58.1
Adjusted EBITA margin 7.1% 9.1% 8.7%
Adjusted profit/loss for the period
Profit/loss for the period 13.1 -18.8 25.3
Adjustments 21.7 70.2 13.2
Adjusted profit/loss for the period 34.9 51.4 38.5
Adjusted Operating cash flow for the last 12 months
Adjusted EBITDA in the last 12 months 92.9 103.9 85.1
Change in net working capital compared to previous year same period -16.9 -38.8 20.7
Capex for last 12 months -24.0 -14.8 -11.6
Adjusted Operating cash flow for the last 12 months 51.9 50.2 94.2
Cash conversion
Adjusted Operating cash flow for the last 12 months 51.9 50.2
1
94.2
Adjusted EBITDA 92.9 103.9 85.1
Cash conversion 55.9% 48.3% 110.7%
Net working capital
Inventories 174.1 157.4 105.3
Operative receivables
1
110.5 104.7 70.7
Operative liabilities
2
193.1 189.7 142.5
1
Includes EUR 5.7 million non-cash expenses
1
Includes trade receivables and EUR 21.3 million (31 Dec 2021: EUR 27.0 million and 31 Dec 2020: EUR 17.1 million) other current operative
receivables included in other receivables and EUR 0.1 million (31 Dec 2021: EUR 0.5 million and 31 Dec 2020: EUR 0.5 million) non-current operative
receivables in other receivables.
2
Includes EUR 192.0 million (31 Dec 2021: EUR 188.6 million and 31 Dec 2020: EUR 141.3 million) included in current trade and other payables and
EUR 1.1 million (31 Dec 2021: EUR 1.2 million and 31 Dec 2020: EUR 1.2 million) in non-current other payables.
Annual Report 2022 23
EUR million unless otherwise indicated 2022 2021 2020
Operative capital employed
Net working capital 91.4 72.3 33.5
Other intangible assets 47.0 36.3 38.0
Property, plant and equipment 127.3 131.9 133.3
Right-of-use assets 39.3 31.3 30.9
Operative capital employed 305.0 271.8 235.6
Return on operating capital employed
Operative capital employed 305.0 271.8 235.6
EBIT for the last 12 months 39.0 3.5 42.0
Return on operating capital employed 12.8 % 1.3% 17.8%
Net debt
Loans and borrowings (non-current) 278.1 285.7 0.0
Loans and borrowings (non-current) 11.3 95.0 94.5
Loans and borrowings, assets held for sale 7.2 - -
Lease liabilities (non-current) 34.3 30.7 29.7
Lease liabilities (current) 9.4 5.6 5.9
Lease liabilities, assets held for sale 0.4
Cash and cash equivalents -56.3 -177.6 -55.0
Cash and cash equivalents, assets held for sale -9.1 - -
Net debt 275.2 239.5 75.1
Net debt/Adjusted EBITDA
Net debt 275.2 239.5 75.1
Annualised adjusted EBITDA 92.9 103.9 85.1
Net debt/Adjusted EBITDA 2.96 2.31 0.88
Equity/Asset ratio
Equity attributable to owners of the Company 403.3 390.6 515.5
Total assets 983.7 1,046.2 836.2
Equity/Asset ratio 41.0% 37.3% 61.7%
Return on equity
The cumulative last 12 month profit attributable to owners of the company 13.1 -18.8 24.9
Equity attributable to owners of the company beginning of period 390.6 515.5 516.7
Equity attributable to owners of the company end of period 403.3 390.6 515.5
Equity attributable to owners of the company average 396.9 453.1 516.1
EUR million unless otherwise indicated 2022 2021 2020
Return on equity 3.3% -4.2% 4.8%
Basic earnings per share
Profit/loss attributable to shareholders of the parent company for class C
shares (EUR million) 13.0 -18.7 24.9
Profit/loss attributable to shareholders of the parent company for class F
shares (EUR million)
0.1 -0.1 -
Profit/loss attributable to the owners of the Company (EUR million) 13.1 -18.8 24.9
Weighted average number of shares outstanding (pcs)
2
41,244,426 29,124,487 28,787,686
2
Basic earnings per share, EUR 0.32 -0.65 0.86
Diluted earnings per share
Profit/loss attributable to shareholders of the parent company for class C
shares (EUR million) 13.0 -18.7 24.9
Profit/loss attributable to shareholders of the parent company for class F
shares (EUR million) 0.1 -0.1 -
Profit/loss attributable to the owners of the company (EUR million) 13.1 -18.8 24.9
Diluted weighted average number of shares outstanding (pcs)
2
41,244,426 29,124,487 28,964,881
3
Diluted earnings per share, EUR 0.32 -0.65 0.86
Adjusted basic earnings per share
Adjustments 21.7 70.2 13.2
Adjusted profit/loss attributable to shareholders of the parent company for
class C shares (EUR million) 34.6 51.1 37.8
Adjusted profit/loss attributable to shareholders of the parent company for
class F shares (EUR million) 0.2 0.4 0.3
Adjusted profit/loss attributable to the owners of the company (EUR million) 34.9 51.4 38.0
Weighted average number of shares outstanding (pcs)
2
41,244,426 29,124,487 28,787,686
3
Adjusted basic earnings per share, EUR 0.85 1.77 1.32
Adjusted diluted earnings per share
Adjustments 21.7 70.2 13.2
Adjusted profit/loss attributable to shareholders of the parent company for
class C shares (EUR million) 34.6 51.1 37.8
Adjusted profit/loss attributable to shareholders of the parent company for
class F shares (EUR million) 0.2 0.4 0.3
Adjusted profit/loss attributable to the owners of the company (EUR million) 34.9 51.4 38.0
Diluted weighted average number of shares outstanding (pcs)
2
41,244,426 29,124,487 28,964,881
3
Adjusted diluted earnings per share, EUR 0.85 1.77 1.32
1
Figures for 2021 restated for comparability reasons.
2
Including 293,478 class F shares convertible to class C shares at the start of the conversion period on 28 June 2024.
3
Converted with merger consideration ratio class K share to class C share 2,600334506.
Annual Report 2022 24
CONSOLIDATED FINANCIAL
STATEMENTS 26
Consolidated statement of
profit and loss 26
Consolidated statement of
comprehensive income 26
Consolidated statement of
balance sheet 27
Consolidated statement of
cash flows 28
Consolidated statement of
changes in equity 29
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS 30
PROPOSAL OF THE
BOARD OF DIRECTORS 82
AUDITOR’S REPORT 83
Table of Contents
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS 30
1. Accounting principles for the consolidated
financial statement 30
1.1 General information 30
1.2 Basis of preparation 30
1.3 Management judgement and use
of estimates 31
1.4 New and amended IFRS standards and
IFRIC interpretations 31
2. Group performance 32
2.1 Segment information 33
2.2 Net sales 33
2.3 Other income and expenses 35
2.4 Employment benefit expenses 36
2.5 Share-based payments 37
3. Goodwill, intangible and tangible assets 39
3.1 Goodwill and other intangible assets 39
3.2 Impairment testing of goodwill 41
3.3 Property, plant and equipment 43
3.4 Right-of-use assets 44
3.5 Depreciation, amortisation and impairment 46
4. Operational assets and liabilities 46
4.1 Inventories 46
4.2 Trade and other receivables 47
4.3 Trade and other payables 47
4.4 Provisions 47
4.5 Post-employment obligations 49
5. Capital structure and financial instruments 51
5.1 Financial income and expenses 51
5.2 Financial risk management 51
5.3 Financial assets and liabilities 55
5.4 Cash and cash equivalents 57
5.5 Equity 57
5.6 Interest-bearing liabilities 60
5.7 Derivative financial instruments 61
5.8 Commitments and contingent assets and
liabilities 63
6. Group structure 63
6.1 Business combinations 63
6.2 Assets held for sale 66
6.3 Subsidiaries 67
6.4 Exchange rates 68
7. Other notes 69
7.1 Related party transactions 69
7.2 Taxes 70
7.3 Events after the balance sheet date 73
8. Parent company financial statements 74
Parent company income statement 74
Parent company balance sheet 74
Parent company cash flow statement 75
Notes to the Parent Company
Financial Statements 76
Annual Report 2022 25
Consolidated statement of profit and loss Consolidated statement of comprehensive income
EUR million | Note | 2022 | 2021 |
Net sales | 2.2 | ||
Cost of sales | 2.3 | - | - |
Gross profit | |||
Sales and marketing expenses | 2.3 | - | - |
Administrative expenses | 2.3 | - | - |
Research and development expenses | 2.3 | - | - |
Other income | 2.3 | ||
Other expenses | 2.3 | - | - |
Operational expenses | - | - | |
EBIT | |||
Finance income | 5.1 | ||
Finance expenses | 5.1 | - | - |
Net financial items | - | - | |
Profit before tax | - | ||
Income tax expense | 7.2 | - | - |
Profit for the period | - | ||
| Profit for the period attributable to: | |||
Owners of the parent | - | ||
Non-controlling interests | |||
| Earnings per share for profit attributable to the ordinary | |||
| equity holders of the parent company: | |||
Earnings per share basic, EUR | 5.5 | - | |
Earnings per share diluted, EUR | 5.5 | - |
The Notes are an integral part of these financial statements.
Consolidated financial statements
EUR million | 2022 | 2021 |
Profit for the period | - | |
| Other comprehensive income | ||
| Items that will never be reclassified to profit and loss | ||
Remeasurement of defined benefit liability (asset) | ||
Related tax | - | |
Total items that will not be reclassified to profit and loss | ||
| Items that are or may be reclassified to profit and loss | ||
Foreign operations – foreign currency translation dierences | ||
Reclassification of foreign currency translation dierences through profit and loss | ||
Cash flow hedges – eective portion of changes in fair value | - | |
Cash flow hedges – reclassified to profit and loss | ||
Related tax | - | |
Total items that are or may be reclassified to profit and loss | ||
Other comprehensive income, net of tax | ||
Total comprehensive income for the period | - | |
| Total comprehensive income attributable to: | ||
Owners of the parent | - | |
Non-controlling interests |
The Notes are an integral part of these financial statements.
Annual Report 2022 26
EUR million | Note | 2022 | 2021 |
| Assets | |||
| Non-current assets | |||
Goodwill | 3.1,3.2 | ||
Other intangible assets | 3.1 | ||
Property, plant and equipment | 3.3 | ||
Right-of-use assets | 3.4 | ||
Derivative assets | 5.7 | ||
Other receivables | 4.2 | ||
Deferred tax assets | 7.2 | ||
Defined benefit assets | 4.5 | ||
Total non-current assets | |||
| Current assets | |||
Inventories | 4.1 | ||
Trade receivables | 4.2 | ||
Derivative assets | 5.7 | ||
Other receivables | 4.2 | ||
Current tax asset | 7.2 | ||
Cash and cash equivalents | 5.7 | ||
Total current assets | |||
Assets held for sale | 6.2 | ||
Total assets | |||
| Equity and liabilities | |||
| Equity | |||
Share capital | 5.5 | ||
Reserve of invested unrestricted equity | 5.5 | ||
Other reserves | 5.5 | - | - |
Consolidated balance sheet
EUR million | Note | 2022 | 2021 |
Retained earnings | |||
Profit for the period | - | ||
Equity attributable to owners of the company | |||
Non-controlling interests | |||
Total equity | |||
| Liabilities | |||
| Non-current liabilities | |||
Loans and borrowings | 5.6 | ||
Lease liabilities | 3.4 | ||
Defined benefit liabilities | 4.5 | ||
Other payables | 4.3 | ||
Provisions | 4.4 | ||
Deferred tax liabilities | 7.2 | ||
Total non-current liabilities | |||
| Current liabilities | |||
Loans and borrowings | 5.6 | ||
Lease liabilities | 3.4 | ||
Trade and other payables | 4.3 | ||
Derivative liabilities | 5.7 | ||
Provisions | 4.4 | ||
Current tax liabilities | 7.2 | ||
Total current liabilities | |||
Total liabilities | |||
Liabilities directly attributed to assets held for sale | 6.2 | ||
Total equity and liabilities |
The Notes are an integral part of these financial statements.
Annual Report 2022 27
EUR million | Note | 2022 | 2021 |
| Cash flow from operating activities | |||
Profit for the period | - | ||
| Adjustments | |||
Depreciation, amortisation and impairment losses | |||
Gain on sale of property plant and equipment and intangible assets | - | ||
Gain and losses on sale of subsidiaries | - | ||
Share-based payments | |||
Finance income and expenses | |||
Income tax expenses | |||
Reverse recapitalization | |||
Other non-cash income and expenses | |||
Cash flow before change in net working capital | |||
| Changes in net working capital | |||
Inventories, increase (-) / decrease (+) | 4.1 | - | - |
Trade and other receivables, increase (-) / decrease (+) | 4.2 | - | |
Trade and other payables, increase (+) / decrease (-) | 4.3 | - | |
Provisions and employee benefits, increase (+) / decrease (-) | 4.4 | - | - |
Changes in net working capital | - | - | |
Net cash flow from operating activities before financial items and taxes | |||
Financial items, net | - | - | |
Income tax paid, net | - | - | |
Cash flow from operating activities |
Consolidated statement of cash flows
EUR million | Note | 2022 | 2021 |
| Cash flow from investing activities | |||
Proceeds from sale of property, plant and equipment and intangible assets | |||
Proceeds from sale of subsidiaries | |||
Purchases of property, plant and equipment and intangible assets | - | - | |
Acquisitions of subsidiaries, net of cash acquired | - | - | |
Long-term loan receivables granted | - | ||
Proceeds from long-term loan receivables | |||
Cash flow from investing activities | - | - | |
| Cash flow from financing activities | |||
Proceeds from long-term borrowings | |||
Increase of equity | |||
Proceeds from share issue | |||
Dividends and group contributions paid to related party | - | ||
Return of capital paid | - | ||
Repayment of lease liabilities | - | - | |
Proceeds from short-term borrowings | |||
Repayment of short-term borrowings | - | - | |
Proceeds from short-term borrowings from related party | |||
Repayment of short-term borrowings to related party | - | ||
Cash flow from financing activities | - | ||
Change in cash and cash equivalents, increase (+) / decrease (-) | - | ||
Cash and cash equivalents at beginning of the period | |||
Impact of change in exchange rates | |||
Cash classified as assets held for sale | - | ||
Cash and cash equivalents at end of the period |
The Notes are an integral part of these financial statements.
Annual Report 2022 28
Consolidated statement of changes in equity
Attributable to owners of the parent company | Non-controlling interest | Total equity | |||||||
| Share | Reserve of invested | Share-based | |||||||
| EUR million | capital | unrestricted equity | Translation reserve | Fair value reserve | payments reserve | Retained earnings | Total | ||
Balance as at 1 Jan 2022 | - | - | |||||||
Profit for the period | |||||||||
Other comprehensive income | |||||||||
Total comprehensive income for the period | |||||||||
Dividends and and return of capital paid | - | - | - | ||||||
Share issue | |||||||||
Share-based payments | |||||||||
Other changes | - | - | - | ||||||
Balance as at 31 Dec 2022 | - | ||||||||
Attributable to owners of the parent company | Non-controlling interest | Total equity | |||||||
| Share | Reserve of invested | Share-based | |||||||
| EUR million | capital | unrestricted equity | Translation reserve | Fair value reserve | payments reserve | Retained earnings | Total | ||
Balance as at 1 Jan 2021 | - | - | |||||||
Profit for the period | - | - | - | ||||||
Other comprehensive income | - | ||||||||
Total comprehensive income for the period | - | - | - | - | |||||
Dividend and return of capital paid | - | - | - | - | |||||
Long term incentive plan | |||||||||
Reverse recapitalization | - | - | |||||||
Acqusition of minority | - | - | - | - | |||||
Balance as at 31 Dec 2021 | - | - | |||||||
Annual Report 2022 29
Notes to the consolidated
financial statements
1. Accounting principles for the consolidated
financial statement
How should Purmo Group’s accounting principles be read?
The accounting principles used for the financial statements of Purmo Group are described at the beginning
of each note to help understand each area of the financial statements. The following table summarizes the
notes to each accounting principle and the relevant IFRS standard related to the note.
Accounting principle Note IFRS standard
Segment information 2.1 Segment information IFRS 8
Revenue recognition 2.2 Net sales IFRS 15
Employment benefit expenses 2.4 Employment benefit expenses IAS 19
Share-based payments 2.5 Share-based payments IFRS 2
Reverse recapitalization 2.3 Other income and expenses IFRS 3, IFRS 2
Other intangible assets
3.1 Goodwill and other intangible assets
3.2 Impairment testing of goodwill IAS 36, IAS 38
Property, plant and equipment 3.3 Property, plant and equipment IAS 16, IAS 36
Leases 3.4 Right-of-use assets IFRS 16
Inventory 4.1 Inventories IAS 24
Financial risk management 5.2 Financial risk management IAS 32, IFRS 7, IFRS 9, IFRS 13
Financial assets and liabilities 5.3 Financial assets and liabilities IAS 32, IFRS 7, IFRS 9, IFRS 13
Equity 5.5 Equity IAS 1
Business combinations 6.1 Business combinations IFRS 3
Assets held for sale 6.2 Assets held for sale IFRS 5
Related party transactions 7.1 Related party transactions IAS 24
Income taxes 7.2 Taxes IAS 12
Annual Report 2022 30
Annual Report 2022 31
2. Group performance
Group’s divisions
Purmo Group’s business operations are run through two divisions: Radiators and ICS, which form Purmo
Group’s segments.
The Radiator division manufactures two broader product categories: panel radiators comprising of
horizontal and decorative panel radiators and vertical decorative radiators, and other radiators comprising
of towel warmers, decorative tubular radiators and electric radiators.
ICS division provides a comprehensive range of components or full systems to wholesalers, specifiers and
installers comprising of four product categories; radiant heating and cooling, air heating and cooling, water
distribution systems and system components and controls.
Other and unallocated comprises of corporate headquarter functions and other Group level costs including
Group Finance, Group Legal, Group Sustainability, Group Communications and Group Human Resources and
M&A. The head office costs comprise mostly of salaries, rent and professional fees that are operated for the
benefit of the whole group and are not allocated to the divisions.
2.1 Segment information
Group’s main products include panel radiators, tubular and electric radiators, underfloor heating
and piping systems, system components and air conditioners. Purmo Group sells its products mainly to
wholesalers and national merchants in both residential and non-residential sectors in northern, western,
southern and eastern Europe but also in the rest of the world (including Brazil, China, Japan and the United
States).
2022
EUR million Radiators ICS Other Group
Net sales 478.8 425.3 - 904.1
Adjusted EBITDA 50.3 51.9 -9.4 92.9
Adjusted EBITDA, % of sales 10.5% 12.2% 10.3%
Material items impacting period profit and loss -14.4
Depreciation, amortisation and impairment charges -39.5
EBIT 39.0
Net financial items -17.4
Profit before tax 21.6
Additional information for segments
Depreciation, amortisation and impairment charges by segment -28.1 -11.4 - -39.5
2021
EUR million Radiators ICS Other Group
Net sales 506.3 337.2 - 843.6
Adjusted EBITDA 66.0 43.7 -5.8 103.9
Adjusted EBITDA, % of sales 13.0% 13.0% 12.3%
Management fee to owners and legacy Rettig incentive plans -2.4
Material items impacting period profit and loss -67.9
Depreciation, amortisation and impairment charges -30.2
EBIT 3.5
Net financial items -8.6
Profit before tax -5.1
Additional information for segments
Depreciation, amortisation and impairment charges by segment -21.1 -9.0 - -30.2
Annual Report 2022 32
2.2 Net sales
Annual Report 2022 33
Non-current assets by country
Non-current assets by country excludes financial instruments and deferred tax assets. Goodwill has not been
allocated to geographical areas.
EUR million 2022 2021
Poland 45.8 39.7
Finland 27.2 21.3
UK 24.7 26.8
Germany 24.4 23.1
Italy 24.2 27.0
China 14.1 17.3
Belgium 12.3 14.1
Rest of the world 43.7 37.4
Goodwill 370.6 369.2
Deferred tax assets 29.2 26.5
Total 616.2 602.4
Assets and liabilities related to contracts with customers
The Group has no contract assets on the balance sheet. Contract liabilities include EUR 0.8 (6.1) million of
advance payments from customers and they are presented in Trade and other payables in the balance
sheet. Prepayments recognised as liabilities in the balance sheet are recognised as revenue during the
following financial year (please see also Note 4.3 Trade and other payables).
Annual Report 2022 34
amount which are listed below to provide a better understanding of the operating performance for the
Group.
Annual Report 2022 35
2.4 Employment benefit expenses
Annual Report 2022 36
Annual Report 2022 37
Annual Report 2022 38
3. Goodwill, intangible and tangible assets
3.1 Goodwill and other intangible assets
Annual Report 2022 39
Annual Report 2022 40
3.2 Impairment testing of goodwill
Impairment testing
The amount of goodwill allocated to each CGU is presented in the following table.
Carrying amount of goodwill allocated to cash generating unit:
EUR million 2022 2021
Radiators 254.4 252.0
ICS 116.1 117.2
Total 370.6 369.2
Annual impairment test 2022
As at 31 December 2022 goodwill totalled EUR 370.6 million. Given that the recoverable amount of each CGU
significantly exceeded the carrying value of goodwill, no indication of impairment was found in 2022. The
value in use calculations were derived from estimates, forecasts and strategy figures reviewed by Purmo
Group’s management and approved by the Board of Directors.
Annual Report 2022 41
The calculations are prepared using a fair value less costs of disposal model. In the impairment testing, the
cash flows for the cash generating units were forecast for five years, based on operative plans. The financial
plan is conducted annually and is approved by management. Cash flows beyond this forecast period were
extrapolated using a constant 2% long-term growth rate, which reflects the sustainable long-term level of the
operations.
The forecasts in the financial plans for both CGU’s are based on management’s estimate of the sustainable
profit margins. The forecasts take into account anticipated changes in market demand, sales prices and costs
based on management’s past experience and are in line with available external market data and research.
The terminal growth rate after the forecast period reflects an estimate of long-term inflation.
Discount rates
Discount rates represent the current market assessment of the risks specific to each cash generating unit and
are determined using the weighted average cost of capital, based on industry peers. The components of the
discount rate are:
• Market-specific risk-free rate, based on a weighted average for the largest market
• Market risk premium, based on a weighted average for the largest markets
• Industry-specific risk, which is incorporated by applying asset beta factors that are annually derived from
publicly available market data for peer companies
• Required return of debt, based on market information
• Debt-to-equity ratio, based on industry peers
The discount rates determined are a post-tax rates as the company is using a fair value model to estimate
the recoverable amounts. Below are presented the sales growth rate beyond the five-year period, the
average EBITDA level and the post-tax discount rate, by CGU.
2022 2021
Long term
growth rate, %
Post-tax discount
rate, %
Average EBITDA
level, %
Long term
growth rate, %
Post-tax discount
rate, %
Average EBITDA
level, %
Radiators 2.0% 8.4% 10.7% 2.0% 7.5% 11.5%
ICS 2.0% 8.4% 15.3% 2.0% 7.9% 11.6%
Sensitivity analysis
A sensitivity analysis was carried out by Purmo Group management using downside scenarios. The scenarios
involved raising the applied discount rate and reducing the forecasted EBITDA margin level for the forecast
and terminal periods. A change in an assumption that would cause the recoverable amount to equal the
carrying amount is presented in the table below separately for each CGU.
Change
Radiators
Forecasted EBITDA margin decrease more than 3.0 per centage points
WACC increase more than 2.3 per centage points
Residual growth decrease more than 1.5 per centage points
ICS
Forecasted EBITDA margin decrease more than 5.5 per centage points
WACC increase more than 6.9 per centage points
Residual growth decrease more than 12.0 per centage points
In management’s opinion, the changes in the basic assumptions shall not be seen as an indication that these
factors are likely to materialise. The sensitivity analyses are hypothetical and should therefore be treated with
caution.
Annual Report 2022 42
3.3 Property, plant and equipment
Property, plant and equipment
2022
EUR million
Land and
water Buildings
Machinery and
equipment
Other tangible
assets
Assets under
construction Total
Acquisition cost
1 Jan 2022 8.4 118.8 465.3 10.2 9.5 612.1
Purchases of subsidiaries and
business acquisitions - - 0.6 - 0.5 1.1
Additions - 0.6 15.4 0.4 7.2 23.7
Disposals -0.1 -10.4 -15.1 -0.1 - -25.8
Transfers 0.8 0.1 1.2 0.0 -1.5 0.7
Impairment charges - - -3.0 - - -3.0
31 Dec 2022 9.1 107.8 458.8 10.4 15.7 601.7
Accumulated depreciation and
impairment losses
1 Jan 2022 0.3 -77.6 -394.8 -8.2 - -480.1
Depreciation - -3.2 -15.2 -0.7 - -19.1
Depreciation on disposals - 5.7 14.7 - - 20.4
Transfers -0.9 - - - - -0.9
31 Dec 2022 -0.5 -74.4 -390.7 -8.7 - -474.4
Carrying amount at 31 Dec 2022 8.6 33.4 68.0 1.6 15.7 127.3
Annual Report 2022 43
2021
EUR million
Land and
water Buildings
Machinery and
equipment
Other tangible
assets
Assets under
construction Total
Acqusition cost
1 Jan 2021 8.5 118.5 451.7 9.9 5.0 593.5
Purchases of subsidiaries and
business acquisitions - 0.4 2.5 0.0 0.0 2.9
Additions - 0.2 6.4 0.6 4.6 11.9
Disposals -0.1 -0.6 -1.0 -0.1 -0.1 -1.9
Transfers - -0.1 3.6 - 0.1 3.6
31 Dec 2021 8.4 118.8 465.3 10.2 9.5 612.2
Accumulated depreciation and
impairment losses
1 Jan 2021 0.4 -74.0 -379.1 -7.4 - -460.2
Depreciation - -3.7 -15.3 -0.9 - -19.9
Depreciation on disposals - 0.4 0.4 0.0 - 0.8
Transfers - 0.0 - - - 0.0
31 Dec 2021 0.3 -77.6 -394.8 -8.2 0.0 -480.3
Carrying amount at 31 Dec 8.7 41.3 70.4 2.0 9.5 132.0
3.4 Right-of-use assets
Annual Report 2022 44
Right-of-use assets
2022
EUR million
Land and
water Buildings
Machinery and
equipment Total
Acquisition cost
1 Jan 2022 1.1 37.4 15.2 53.7
Purchases of subsidiaries and business acquisitions - 2.6 0.3 2.9
Classified as assets held for sale - - 0.0 0.0
Additions - 11.2 3.2 14.4
Disposals -0.2 - - -0.2
Impairment charges - 0.4 0.0 0.4
31 Dec 2022 0.9 50.9 18.6 70.4
Accumulated depreciation and impairment losses
1 Jan 2022 -0.1 -14.1 -8.2 -22.4
Depreciation 0.0 -5.6 -3.6 -9.2
31 Dec 2022 -0.1 -19.4 -11.6 -31.1
Carrying amount at 31 Dec 2022 0.8 31.5 7.0 39.3
2021
EUR million
Land and
water Buildings
Machinery and
equipment Total
Acquisition cost
1 Jan 2021 1.1 33.8 11.2 46.1
Purchases of subsidiaries and business acquisitions - 0.5 - 0.5
Additions 0.0 2.6 4.0 6.5
31 Dec 2021 1.1 37.4 15.2 53.7
Accumulated depreciation and impairment losses
1 Jan 2021 -0.1 -9.7 -5.5 -15.2
Depreciation 0.0 -4.5 -2.8 -7.4
31 Dec 2021 -0.1 -14.2 -8.2 -22.5
Carrying amount at 31 Dec 2021 1.0 23.2 7.0 31.3
Annual Report 2022 45
3.5 Depreciation, amortisation and impairment
Depreciation, amortisation and impairment
EUR million 2022 2021
Amortisation and impairment on intangible assets -7.9 -2.9
Tangible assets -22.5 -19.9
Right-of-use assets -9.2 -7.4
Total -39.5 -30.2
Lease liabilities
EUR million 2022 2021
Non-current 34.3 30.7
Current 9.4 5.6
Total lease liabilities 43.7 36.4
Amounts recognised in profit or loss
EUR million 2022 2021
Depreciation of right-of-use assets -9.2 -7.4
Interest on lease liabilities -2.2 -2.1
Expense related to short-term leases -1.2 -1.3
Expense related to leases of low-value assets -0.5 -0.4
Total -13.1 -11.2
Amounts recognised in statement of cash flows
EUR million 2022 2021
Total cash outflow for leases -11.6 -9.6
4. Operational assets and liabilities
4.1 Inventories
Inventories
EUR million 2022 2021
Raw materials and consumables 55.0 60.6
Work in progress 21.6 21.7
Finished goods 105.2 82.8
Inventory value - gross 181.7 165.1
Inventory write-down -7.6 -7.7
Total 174.1 157.4
Write-downs of inventories to net realisable value amounted to EUR 7.6 (7.7) million. These were recognised
as an expense and included in cost of sales in the profit and loss.
Annual Report 2022 46
4.2 Trade and other receivables
Credit risk and impairment losses
Information about the Group’s exposure to credit risks and impairment losses for trade and other receivables
is included in Note 5.2 Financial risk management.
Trade and other receivables
EUR million 2022 2021
Trade receivables 89.1 77.1
Prepayments and accrued income 6.5 8.5
Other receivables 19.7 22.2
Total 115.3 107.8
Non-current 0.7 1.0
Current 114.6 106.8
Total 115.3 107.8
Trade and other payables
EUR million 2022 2021
Trade payables 102.1 116.8
Accruals and deferred income 92.6 76.4
Total 194.8 193.2
Non-current 1.4 1.2
Current 193.4 192.0
Total 194.8 193.2
4.3 Trade and other payables
4.4 Provisions
Annual Report 2022 47
Annual Report 2022 48
Annual Report 2022 49
Annual Report 2022 50
5.2 Financial risk management
Principles and process
The nature of Purmo Group’s global operations exposes the Group to a variety of business and financial risks.
Financial risks are managed centrally by the Group Treasury (Treasury) under annually reviewed Group Treasury
Policy approved by the Board of Directors. The objective of financial risk management is to mitigate potential
adverse effects of financial risks on Group’s financial performance. Treasury identifies, evaluates and hedges
financial risks in close co-operation with the subsidiaries. Treasury operates as counterparty to the subsidiaries,
manages centrally external funding and is responsible for the management of financial assets and appropriate
hedging measures. Treasury uses only hedging instruments whose market value can be reliably monitored
and are in line with the Group Treasury Policy. In addition Treasury provides consultation and services to Group
companies in all financing related matters. The Group’s risk management policy is essentially risk averse.
5. Capital structure and financial instruments
Annual Report 2022 51
continuously. According to management assessment, no significant credit losses are anticipated on the
liquidity reserves.
Derivatives are subject to netting agreements such as ISDA (Master agreement of International Swaps and
Derivatives Association). Netting agreement allows for settling on a net basis all outstanding items within the
scope of the agreement, such as in the event of default. As the Company does not meet IFRS right of set-off,
these amounts are presented gross on the balance sheet. At the reporting date, the remaining net settlement,
as allowed by the netting arrangements, was EUR 0.0 (1.4) million for the derivative liabilities and EUR 3.8 (0.1)
million for derivative assets.
Annual Report 2022 52
1
Maturity analysis restated compared to financial statements 2021.
Annual Report 2022 53
Annual Report 2022 54
5.3 Financial assets and liabilities
Annual Report 2022 55
Annual Report 2022 56
5.4 Cash and cash equivalents
ACCOUNTING PRINCIPLES
The Group’s equity consists of share capital, reserve of invested unrestricted equity, translation differences,
fair value reserve, and retained earnings.
Other reserves
The Company’s other reserves include fair value reserve, cumulative translation difference reserve
and share-based payments reserve. The fair value reserve includes fair value changes of derivative
instruments used for cash flow hedging. The translation difference reserve comprises all foreign exchange
differences arising from the translation of the financial statements of foreign operations. The share-based
payments reserve represents the portion of the grant date fair value of share-based incentive plans
granted to the key management personnel of the Group that has been recognised in accordance with the
accounting policy adopted for share-based payments.
Profit distribution
Profit distribution includes dividends and return of capital repayments. Dividends and return of capital
proposed by the Board of Directors are recognised in the consolidated financial statements when they
were approved by the shareholders at the General Meeting.
Cash and cash equivalents
EUR million 31 Dec 2022 31 Dec 2021
Bank balances 56.3 177.6
Total 56.3 177.6
31 December 2022 Group had cash and cash equivalents by the amount of EUR 9.1 million classified as assets
held for sale.
At the end of 2021 cash and cash equivalents included EUR 96.8 million of proceeds in the initial public
offering in blocked bank accounts. As the terms and conditions of the escrow agreement were met end
of 2021, funds were already booked to bank balances. On the basis of escrow agreement the funds were
released to Purmo Group Plc’s bank account on 3 January 2022.
5.5 Equity
Share capital and number of shares
The Company’s registered share capital on 31 December 2022 was EUR 3,080,000. The Company has two
share classes of which class C shares are listed and class F shares are held by Purmo Group Plc’s founding
shareholder, Virala Corporation. The shares have no nominal value. The Founder Shares are not publicly
traded. The company has no treasury shares.
The Company’s class F shares are subject to redemption and consent clauses in accordance with the
Articles of Association, which restrict the rights to transfer or acquire class F shares. The holder of class F
shares have right to demand conversion into class C shares subject to certain price hurdles calculated in
accordance with the Articles of Association. Further class F shares carry a right to asset distribution equivalent
to a certain proportion of asset distributed to class C shares in accordance with the Articles of Association.
Annual Report 2022 57
Authorisation of the Board of Directors to resolve on the issuance of shares as well as on the issuance of
special rights entitling to shares
On 24 April 2022 the Annual General Meeting decided that the Board of Directors is authorised to resolve on
the issuance of class C shares as well as the issuance of special rights entitling to class C shares referred to in
Chapter 10, Section 1 of the Finnish Companies Act in one or several tranches.
The number of class C shares to be issued based on this authorisation shall not exceed 8,000,000 shares
(including shares to be received based on special rights), which corresponds to approximately 20 per cent
of all of class C shares in Purmo Group. The authorisation may be used to improve Purmo Group’s capital
structure, to finance or carry out corporate acquisitions or other arrangements, for incentive arrangements
and remuneration schemes or for other purposes resolved by the Board of Directors. However, a maximum of
25 per cent of the authorisation, i.e., a maximum of 2,000,000 class C shares (including shares to be received
based on special rights) may be used for incentive arrangements and remuneration schemes. The Board of
Directors shall decide on all the conditions of the issuance of shares and of special rights entitling to shares.
The issuance of shares and of special rights entitling to shares may be carried out in deviation from the
shareholders' pre-emptive rights (directed issue).
The authorisation is effective until the end of the next Annual General Meeting, however no longer than
until 30 June 2023. The authorisation revokes the previous authorisation granted by the Extraordinary General
Meeting on 13 December 2021 to resolve on the issuance of shares as well as on the issuance of special rights
entitling to shares.
Authorisation to purchase own shares
On 24 April 2022 the Annual General Meeting decided that the Board of Directors is authorised to resolve on
the repurchase of the Company’s own class C shares as well as on the acceptance of them as pledge.
The number of class C shares to be repurchased or accepted as pledge by virtue of this authorisation shall
not exceed 4,000,000 own class C shares in the Company, which corresponds to approximately 10 per cent of
all of class C shares in Purmo Group, subject to the provisions of the Finnish Companies’ Act on the maximum
amount of own shares owned by or pledged to the company and its subsidiaries.
The shares may be repurchased or accepted as pledge in one or several instalments and either through
a tender offer made to all shareholders on equal terms or otherwise than in proportion to the shares held by
the shareholders (directed repurchase) in public trading at the prevailing market price or at a price otherwise
formed on the market. The shares would be repurchased with funds from the Company’s unrestricted
shareholders’ equity.
Purmo Group Plc (former Virala Acquisition Company Plc) announced on 20 September 2021 that the
first share price hurdle as set out in the company’s Articles of Association had been exceeded, pursuant to
which 18.75 per cent of class F shares held by the company’s founding shareholder, Virala Corporation, have
become eligible for conversion into class C shares starting from 28 June 2024.
At the General Meeting of shareholders, one share of either class carries one vote. Class C shares carry
a preferential right to dividends and to other distributions of assets until an aggregate amount of EUR
60,000,000 has been distributed to class C shares whereafter class C shares and class F shares carry equal
right to dividends and to other distributions of assets unless otherwise stipulated in the Articles of Association
of Purmo Group.
Changes in share capital
Number of outstanding
shares (pcs)
Share capital
(EUR million)
Reserve of
unrestricted equity
(EUR million)
Class C share Class F share
1 Jan 2022 40,374,531 1,565,217 3.1 385.9
1 Mar 2022 Directed share issue of class C shares 671,779 - - 9.1
4 May 2022 Return of capital - - - -7.3
3 Oct 2022 Return of capital - - - -7.6
25 Oct 2022 Directed share issue of class C shares 66,403 - - 0.7
31 Dec 2022 41,112,713 1,565,217 3.1 380.8
Annual Report 2022 58
Annual Report 2022 59
Annual Report 2022 60
5.7 Derivative financial instruments
Annual Report 2022 61
Derivatives and hedge accounting
The following table summarises the effects of the foreign-currency related hedging instruments on the Group’s
financial position and performance, including amounts recycled to profit or loss during the year.
EUR million unless otherwise stated 31 Dec 2022 31 Dec 2021
Foreign currency forward contracts
Carrying amount, assets 2.0 0.5
Carrying amount, liabilities 1.4 1.4
Notional amount 160.8 114.1
Hedge ratio 1:1 1:1
Hedging results, recycled to other expenses -0.5 -1.9
Weighted average hedged rates (FX rate)
GBP 0.90 0.87
PLN 4.96 4.70
SEK 10.79 10.25
RON 5.31 5.08
Maturity breakdown of notional amounts
Between 1 and 6 months 115.0 80.2
Between 6 and 12 months 101.3 73.5
Over 12 months - -
Total 216.3 153.7
The following table summarises the effects of the interest rate swaps, to which hedge accounting is
applied, on the Group’s financial position and performance. The fixed interest rate of the interest rate swaps
varied between 1.3 and 3.0 percent as at 31 December 2022.
EUR million unless otherwise stated 31 Dec 2022 31 Dec 2021
Interest rate swaps
Carrying amount, assets 2.7 -
Carrying amount, liabilities - -
Notional amount 100.0 -
Hedge ratio 1:1 -
Hedging results, recycled to other expenses -0.4 -
Maturity breakdown of notional amounts
Under 12 months - -
Over 12 months 100.0 -
Total 100.0 -
Annual Report 2022 62
5.8 Commitments and contingent assets and liabilities
Guarantees
EUR million 2022 2021
Bank guarantees 8.3 8.0
Parent guarantees 15.7 21.0
Total 24.0 29.0
Off-balance sheet leases include low-value leases, and leases that have not yet commenced. The Group
does not have material lease agreements not yet commenced as at the balance sheet dates. Information on
leases is disclosed in Note 3.4.
6. Group structure
6.1 Business combinations
Annual Report 2022 63
Annual Report 2022 64
2021
Merger of Virala Acquisition Compand Plc and Purmo Group Ltd
On 31 December 2022 Virala Acqusition Company Plc ("VAC") and Purmo Group Ltd were merged according
to the merger plan approved 13 December 2021. As VAC didn’t meet the definition of a business, the merger
was not accounted for as a business combination but as a reverse recapitalisation, in which no goodwill
was recognised and Purmo Group obtained a public company status- The difference of the fair value of
the equity instruments issued by VAC and the fair value of VAC’s net assets was accounted for as a non-
cash share-based payment in accordance with IFRS 2 Share-Based Payments and recorded as an expense
through the profit and loss and was considered to represent a service for listing of Purmo Group’s shares.
As a result of the application to IFRS 3 reverse acquisition guidance by analogy to the merger , Purmo
Group’s operating history and financial performance forms the basis for the comparative consolidated
financial information for the combined company.
Euroradiators Holding B.V.
On 4 November 2020 Purmo Group signed an agreement to acquire 51% of the issued share capital of
Euroradiators Holding B.V. from Bosch Group. The closing date of the acquisition was 30 April 2021 when
Purmo Group gained control over Euroradiators. Euroradiators is a factory that was established in 2014 for
the production of radiators for the Russian market.
The provisional fair value of the net assets acquired at the acquisition date was EUR 7.1 million and
accordingly Purmo Group recognised a provisional goodwill of EUR 4.0 million, which has been allocated to
Radiators cash-generating unit for impairment testing purposes. End of March 2022 Purmo Group decided
to exit its business in Russia and the goodwill was impaired. The Russian business has been measured at fair
value less costs to sell and classified as assets held for sale and continuing operations at the balance sheet
date; see Note 6.2 Assets held for sale.
The acqusition-related costs have been included under other operating expenses. The acquisition did not
have a material impact on the Group’s revenue or profit for the period.
The redemption liability to redeem the 49% minority has been increased by EUR 2.2 million post-acquisition.
which corresponds to the cash injection to the investee by the minority shareholder. In accordance with the
put and call option terms, the redemption liability is increased with a corresponding amount. The redemption
liability has been measured at fair value and classified as liabilities related to assets held for sale.
Fair values of acquired assets and liabilities at time of acquisition:
2021
EUR million
Purchase price
Purchase price paid in cash 5.5
Fair value of net identifiable assets acquired
Intangible assets 0.0
Tangible assets 2.9
Right-of-use assets 0.5
Inventories 2.8
Other current assets 2.7
Total assets 8.9
Interest-bearing liabilities 1.0
Deferred tax liabilities 0.1
Current liabilities 0.7
Total liabilities 1.8
Net assets acquired 7.1
Redemption liability 5.6
Goodwill 4.0
Cash flow impact
Purchase price paid in cash -5.5
Cash and cash equivalents of the acquired company 1.0
Expenses related to the acquisition -0.0
Impact on cash flow -4.5
Annual Report 2022 65
6.2 Assets held for sale
6.1.2 Disposals
2022
In September 2022 Purmo Group divested the shares in Lampo Heating (Tianjin) Co., Ltd., to a third party. The
company owned a real-estate property and a land area in Tianjin, China. The impact of the divestment on
the profit for the financial period is approx. EUR 1.3 million.
EUR million
Assets 2.9
Liabilities 0.3
Net assets disposed 2.6
Cash consideration received 4.3
Translation dier anslation differences reclassified to profit and loss -0.4
Net assets sold -2.6
Sales gain 1.3
Cash flow impact
Purchase price received in cash 4.3
Cash and cash equivalents of the disposed company -1.5
Expenses related to the disposal 0.0
Impact on cash flow 2.7
2021
No disposals during the period.
EUR million 2022 2021
Assets held for sale
1
Tangible assets 0.0 -
Inventories 4.4 -
Other assets 0.6 -
Cash and cash equivalents 9.1 -
Total 14.0 -
Liabilities related to assets held for sale
Interest-bearing liabilities 7.6 -
Other liabilities 2.4 -
Total 10.0 -
1
Amounts are presented net of internal balances with other Purmo Group subsidiaries.
End of March 2022 Purmo Group took the decision to exit its business in Russia. The Group will seek to divest
and complete an orderly transfer of the business to a new owner, in compliance with international and
local laws and considering the wellbeing of our employees in Russia. Upon completion of the divestment,
the Group will no longer have a manufacturing operation or sales in Russia. The Russian business has been
measured at fair value less costs to sell and classified as assets held for sale and continuing operations. The
Group’s management has assessed the balance sheet impact of the decision to divest the business in Russia.
The management has considered indicators of impairment of goodwill and intangible assets, the
recoverable amount of property plant and equipment and right-of-use assets, the valuation of inventories,
trade receivables and the redemption liability. Due to the significant uncertain-ties related to the business
in Russia the Group has recognised impairment charges and write-downs of EUR 6.9 million in March
2022 on goodwill, intangible assets, property, plant and equipment, right-of-use assets, inventories and the
redemption liability and an additional write-down of EUR 6.0 million in December 2022 on inventories and
other assets.
Annual Report 2022 66
Purmo Group’s subsidiaries as at 31 December 2022 are set out below. Unless otherwise stated the portion of
ownership interest held equals the voting rights held by the Purmo Group.
Company Country of incorporation Activities % Equity interest
Purmo Group Oyj Finland Parent company 100
Purmo Group Finland Oy Ab Finland Sales 100
Purmo Group Latvia SIA Latvia Sales 100
Purmo Group Estonia AS Estonia Sales 100
ZAO EVRA Varme RUS Russia Sales 100
Purmo Group Denmark ApS Denmark Sales 100
Company Country of incorporation Activities % Equity interest
Rettig Heating Equipment (Jiangsu) Co. Ltd China Production and sales 100
Purmo Group Poland Sp. z o.o Poland Production and sales 100
Purmo Group Sweden AB Sweden Production and sales 100
Emmeti S.p.A Italy Production and sales 100
Emmeti Iberica S.L. Spain Sales 100
Fabricca Italiana Valvole S.r.l Italy Production and sales 100
SFERA Comercial e Importadora Brazil Sales 100
Sigarth GmbH Germany Sales 100
Sigarth Sp. z o.o. Poland Production and sales 100
PG Austria GmbH Austria Production and sales 100
PG Hungary Kft Hungary Production and sales 100
PG Hrvatska d.o.o. Croatia Sales 100
PG Slovenija d.o.o. Slovenia Sales 100
PG Germany GmbH Germany Production and sales 100
Hewing GmbH Germany Production and sales 100
NORAL Beteiligungs GmbH & Co. KG Germany Services 100
Rettig Heating Group UK Ltd United Kingdom Dormant 100
Purmo Group Belgium NV Belgium Production and sales 100
Purmo Group Ireland Limited Ireland Dormant 100
PG Ceska s.r.o Czech Republic Sales 100
Purmo Group USA Inc United States Sales 100
Purmo Group Turkey Ticaret ve Sanayi A.S. Turkey Production and sales 100
Purmo Group Romania srl Romania Sales 100
CAN Sp. z o.o Poland Services 100
Purmo Group France SAS France Production 100
Purmo Group (UK) Ltd United Kingdom Production and sales 100
Purmo Group UK Pension Trustee Limited United Kingdom Dormant 100
Vogel & Noot Products Ltd United Kingdom Dormant 100
Euroradiators Holding B.V. Netherlands Holding 51
Evroradiators LLC Russia
1
Russia Production and sales 51
TT Thermotech Management Services AB Sweden Holding 100
TT Thermotech Scandinavia AB Sweden Production and sales 100
Thermotech Scandinavia Finland Oy Finland Sales 100
Thermotech Pipeline Oy Finland Dormant 100
6.3 Subsidiaries
1
100% owned by Euroradiators Holding B.V
Annual Report 2022 67
6.4 Exchange rates
ACCOUNTING PRINCIPLES
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional
currency at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated
in foreign currencies that are measured at fair value are translated into the functional currency at
the exchange rate at the date when the fair value was determined. Foreign currency differences are
generally recognised in profit or loss. Non-monetary items that are measured based on historical cost in
a foreign currency are not retranslated. Foreign exchange gains and losses, net that relate to operating
items are presented in other income or expenses, depending of the net position. Foreign exchange gains
and losses, net, that relate to financing items are presented in finance income or expenses, depending of
the net position.
Average rates Closing rates
2022 2021 31 Dec 2022 31 Dec 2021
CNY Chinese yuan 7.0789 7.6298 7.3582 7.1947
GBP Pound sterling 0.8528 0.8598 0.8869 0.8403
HUF Hungarian forint 391.30 358.54 400.87 369.19
PLN Polish zloty 4.6861 4.5652 4.6808 4.5969
RON Romanian leu 4.9313 4.9213 4.9495 4.9490
RUB Russian ruble 71.87 87.17 77.30 85.30
SEK Swedish krona 10.6294 10.1459 11.1218 10.2503
USD US dollar 1.0530 1.1827 1.0666 1.1326
Annual Report 2022 68
7. Other notes
Annual Report 2022 69
1
Comparative figure restated
Annual Report 2022 70
Annual Report 2022 71
Annual Report 2022 72
7.3 Events after the balance sheet date
As of 1 January 2023 Purmo Group's segment reporting will be changed based on the new organisation
structure announced 5 October 2023. The new organisation will consist of two business divisions: Climate
Products & Systems, which will sell through the wholesaler channels; and Climate Solutions, which will sell
integrated solutions directly to installers served by the company’s Emmeti business in South Europe and
Thermotech business in the Nordic region. The third reporting segment will be Other and unallocated items.
The company will provide adjusted comparison figures for the new segments before the publication of the
January–March 2023 interim report.
On 16 February 2023 Purmo Group announced the issue of green capital securities of EUR 60.0 million.
The Capital Securities will bear interest at a fixed rate of 9.5 percent per annum until 23 February 2026 after
which the Capital Securities will bear interest at a floating interest rate quarterly in arrears on each interest
payment date. The Capital Securities do not have a specified maturity date, and Purmo Group is not under
an obligation to repay, repurchase or redeem the Capital Securities at any specified date. Purmo Group has
the possibility to redeem the Capital Securities on the reset date, on 23 February 2026. Purmo Group’s major
shareholder, Rettig Group Oy Ab, and its affiliates are participating in the issuance by subscribing for the
Capital Securities in an amount of EUR 5.0 million. The rationale for the issuance of the Capital Securities is to
ensure funding for Purmo Group’s announced strategy acceleration programme. The net proceeds from the
issue will be used in accordance with Purmo Group’s Green Finance Framework announced on 13 February
2023. The issue date for the Capital Securities will be 23 February 2023. The Capital Securities are instruments
that are subordinated to the company's other debt obligations and will be treated as equity in Purmo Group’s
consolidated financial statements prepared in accordance with IFRS. The Capital Securities do not confer
to its holders the rights of a shareholder and does not dilute the holdings of the current shareholders. An
application will be made to have the Capital Securities listed on the official list of the Helsinki Stock Exchange
maintained by Nasdaq Helsinki Ltd within three months from the issue date.
On 22 February 2023 Purmo Group announced that Jan-Elof Cavander (MSc. Ind. Eng.) has been
appointed Chief Financial Officer of Purmo Group Plc and a member of the Management team. He will
report to Chief Executive Officer John Peter Leesi and will be based in Helsinki, Finland. Mr. Cavander will join
Purmo Group on 22 June 2023, the latest.
Annual Report 2022 73
EUR thousand Note 2022 2021
Other operating income 8.2 22,068 -
Employee benefit expenses 8.3 -2,222 -137
Depreciations and amortisations 8.4 -3,712 -
Other operating expenses 8.5 -32,968 -9,926
Operating profit/loss -16,834 -10,063
Financial income and expenses 8.6 48,503 0
Profit/loss before appropriations and taxes 31,669 -10,063
Appropriations 8.7 630 -
Income tax expense 8.8 2,011 2,013
Profit/loss for the period 34,310 -8,050
8. Parent company financial statements
EUR thousand Note 2022 2021
Assets
Non-current assets
Intangible assets 8.9 25,682 28,933
Tangible assets 8.10 3 3
Investments 8.11 559,148 559,634
Total non-current assets 584,833 588,570
Current assets
Long-term receivables 8.12 65,144 29,179
Short-term receivables 8.13 143,368 111,393
Cash and cash equivalents 46,189 163,304
Total current assets 254,701 303,876
Total assets 839,534 892,446
Equity and liabilities
Equity
Share capital 8.14 3,080 3,080
Unrestricted equity reserve 8.14 380,779 385,917
Retained earnings 8.14 -8,052 -2
Profit/loss for the fiscal period 34,310 -8,050
Total equity 410,117 380,945
Liabilities
Long-term liabilities 8.15 278,052 277,654
Short-term liabilities 8.16 151,365 233,847
Total current liabilities 429,417 511,501
Total equity and liabilities 839,534 892,446
Parent company income statement Parent company balance sheet
Annual Report 2022 74
EUR thousand 2022 2021
Cash flows from operating activities
Profit before appropriations and taxes 31,669 -10,063
Depreciations 3,712 -
Finance income and expenses -48,503 0
Other adjustments 9,523 0
Operating profit before change in working capital -3,599 -10,063
Change in working capital
Increase (-) / decrease (+) of current receivables -4,104 -532
Increase (+) / decrease (-) of current non-interest bearing liabilities 21,624 2,660
Cash flows from operating activities before financial items and taxes 13,920 -7,936
Interests paid and other finance costs -14,379 0
Interests received 7,962 -
Dividends received 53,689 -
Direct income taxes paid -265 -
Net cash from operating activities 60,927 -7,936
Cash flows from investing activities
Purchases of property, plant, equipment and intangible assets -460 -
Change in long-term loan receivables -115 -
Acquisition of subsidiaries -2,339 63,434
Sale of subsidiaries 4,226 -
Net cash from investing activities 1,312 63,434
Parent company cash flow statement
EUR thousand 2022 2021
Cash flows from financing activities
Capital returns paid -14,886 -
Proceeds from share capital increase - 77
Proceeds from share issues 679 226
Proceeds from oering - 107,500
Change in short-term loans -85,000 -
Change in subsidiary long-term loans -35,139 -
Change in subsidiary short-term loans -45,008 -
Net cash fom financing activities -179,354 107,803
Change in cash and cash equivalents -117,115 163,302
Cash and cash equivalents at the beginning of the period 163,304 2
Cash and cash equivalents at the end of the period 46,189 163,304
Annual Report 2022 75
Notes to the Parent Company Financial
Statements
8.1 Accounting principles
The financial statements of the parent company, Purmo Group, have been prepared in accordance with the
Finnish Generally Accepted Accounting Principles. The financial statements are presented in thousand euros.
Foreign currency translations and derivatives
Transactions in foreign currencies are recorded in euro at the exchange rate prevailing at the date of the
transaction. At the end of the accounting period, monetary items are valued at the exchange rate prevailing
at the end of period.
Company uses derivatives to hedge its foreign exchange and interest rate risk. The fair value of derivative
instruments is presented as off-balance sheet liability in note 8.14 Derivative contracts.
Tangible and intangible assets
Tangible and intangible assets are valued at historical cost, less accumulated depreciation according to plan.
Depreciation and amortisation is calculated on a straight-line basis over the expected useful lives of the
assets as follows:
Trademarks 5–10 years
Computer software 3–5 years
Other intangible assets 20 years
Machinery and equipment 3–5 years
Receivables
Receivables are valued to acquisition cost or to a lower probable value.
Loan arrangement fee
The loan arrangement fee is recognised at amortised cost using the effective interest method.
Leases
Lease payments are treated as rentals.
Income taxes
Income tax expense includes taxes calculated for the financial year, adjustments to prior year taxes, and
changes in the deferred taxes. Deferred tax assets and liabilities have been recognized in the financial
statements.
Dividends and return of capital
Dividends and return of capital proposed by the Board of Directors are not recorded in the financial
statements until they have been approved by the Annual General Meeting.
Acquisitions
The merger of Virala Acquisition Company Plc and Purmo Group Ltd was completed on 31 December 2021.
Virala Acquisition Company Plc continues as the parent company changing its name to Purmo Group Plc.
The received assets and liabilities were recorded in book values.
Annual Report 2022 76
8.5 Other operating expenses
EUR thousand 2022 2021
Expenses related to the share issue - -6,114
Administration - -3,654
Loss on sale of subsidiary shares -1,744 -
Write-down of subsidiary shares -7,754 -
Other expenses -23,469 -158
Total -32,968 -9,926
Auditors' fees
EUR thousand 2022 2021
Authorised Public Accountants KPMG
Audit -171 -34
Audit related services -79 -22
Tax consultation -52 -2
Other services -0 -346
Total -302 -404
8.2 Other operating income
EUR thousand 2022 2021
Service income 22,068 -
Total 22,068 0
8.4 Depreciations and amortisations
EUR thousand 2022 2021
Other intangible assets -3,707 -
Machinery and equipment -4 -
Total -3,712 0
8.3 Employee benefit expenses
EUR thousand 2022 2021
Salaries and fees -1,912 -135
Social security costs -44 -2
Pension costs -267 -
Total -2,222 -137
Salaries and fees to the management
Chief Executive Ocer - -
Board of Directors -496 -135
Personnel on average 14 -
Annual Report 2022 77
8.8 Income taxes
EUR thousand 2022 2021
Income tax for prior financial years -265 -
Change in deferred taxes 2,276 2,013
Total 2,011 2,013
8.7 Approriations
EUR thousand 2022 2021
Group contributions received 630 -
Total 630 -
8.6 Financial income and expenses
EUR thousand 2022 2021
Dividend income
From Group companies 53,689 -
Interest income
From Group companies 10,396 -
From others 2,710 -
Other financial income
From Group companies 8,981 -
From others 25,005 -
Total 100,781 -
Interest expenses
To Group companies -2,221 -
To others -14,042 0
Other financial expenses
To Group companies -12,331 -
To others -23,684 -
Total -52,278 0
Financial income and expenses total 48,503 0
8.9 Intangible assets
EUR thousand 2022 2021
Other intangible assets
Acquisition cost 1 Jan 36,377 -
Additions 0
Additions coming from the merger 36,377
Acquisition cost 31 Dec 36,833 36,377
Accumulated amortisation 1 Jan -7,443 -
Accumulated amortisation of the merger - -7,443
Amortisations for the financial year -3,707
Accumulated amortisation 31 Dec -11,151 -7,443
Book value 31 Dec 25,682 28,933
Annual Report 2022 78
8.10 Tangible assets
EUR thousand 2022 2021
Machinery and equipment
Acquisition cost 1 Jan 46 -
Additions 4 -
Additions coming from the merger - 46
Acquisition cost 31 Dec 50 46
Accumulated depreciation 1 Jan -43 -
Accumulated depreciation of the merger - -43
Depreciations for the financial year -4 -
Accumulated amortisation 31 Dec -47 -43
Book value 31 Dec 3 3
8.12 Long-term receivables
Long-term receivables
Receivables from Group companies
EUR thousand 2022 2021
Loan receivables 60,687 26,754
Total 60,687 26,754
Receivables from others
EUR thousand 2022 2021
Loan receivables 529 413
Total 529 413
Deferred tax assets
EUR thousand 2022 2021
Deferred tax assets 1 Jan 2,012 -
From result for the financial year 1,916 2,012
Deferred tax assets 31 Dec 3,929 2,012
Long-term receivables total 65,144 29,179
8.11 Investments
EUR thousand 2022 2021
Investments in Group companies
Acquisition cost 1 Jan 559,634 -
Increases 13,239 -
Increases coming from the merger - 559,634
Decreases -13,724 -
Acquisition cost 31 Dec 559,148 559,634
Annual Report 2022 79
8.14 Equity
EUR thousand Share capital
Unrestricted
equity reserve
Retained
earnings Equity total
Equity 1 Jan 2022 3,080 385,917 -8,052 380,945
Capital return -14,886 -14,886
Share issue 9,748 9,748
Result for the financial year 34,310 34,310
Equity 31 Dec 2022 3,080 380,779 26,258 410,117
Equity 1 Jan 2021 3 0 -2 2
Merger 278,191 278,191
Share issue 3,077 107,726 110,803
Result for the financial year -8,050 -8,050
Equity 31 Dec 2021 3,080 385,917 -8,052 380,945
Distributable equity
EUR thousand 2022 2021
Reserve for invested unrestricted equity 380,779 385,917
Retained earnings -8,052 -2
Net result for the financial period 34,310 -8,050
Total 407,037 377,865
8.13 Short-term receivables
Receivables from Group companies
EUR thousand 2022 2021
Loan receivables 125,296 101,558
Interest receivables 3,957 428
Trade receivables 1,253 2,970
Other receivables 9,828 3,448
Total 140,334 108,403
Receivables from others
EUR thousand 2022 2021
Interest receivables 6 -
Income tax receivables 490 -
Value added tax receivables 127 2,124
Loan receivables - 233
Other receivables 598 -
Prepayments and accrued income 1,813 633
Total 3,034 2,989
Short-term receivables total 143,368 111,393
8.14 Long-term liabilities
Liabilities to others
EUR thousand 2022 2021
Loans from financial institutions 278,052 277,654
Total 278,052 277,654
Long-term liabilities total 278,052 277,654
Annual Report 2022 80
8.17 Collaterals
Commitments and contingencies
EUR thousand 2022 2021
Guaranties given on behalf of group companies 28,079 21,006
Total 28,079 21,006
Lease commitments
EUR thousand 2022 2021
Payments in the following year 139 65
Payments later 23 13
Total 162 78
8.18 Derivative contracts
EUR thousand 2022 2021
Foreign exchange derivatives
Foreign exchange forward contracts, nominal value 365,821 276,751
Interest rate derivatives
Interest rate swaps, nominal value 100,000 -
8.16 Short-term liabilities
Liabilities to Group companies
EUR thousand 2022 2021
Loan payables 3,816 43,147
Interest payables 4 30
Trade payables 2,006 1,444
Cash pool payables 131,153 67,645
Other accruals and deferred income 302 18,475
Total 137,282 130,741
Liabilities to others
EUR thousand 2022 2021
Loans from financial institutions - 95 000
Commercial papers 9 960 -
Interest payables 137 -
Trade payables 1 155 3 425
Other liabilities - 983
Accruals and deferred income 2 832 3 698
Employee benefit expenses 463 -
Incom tax payables 105 -
Other accruals and deferred income 2 264 3 698
Total 14 083 103 106
Short-term liabilitites total 151 365 233 847
Annual Report 2022 81
Proposal of the Board of Directors
Purmo Group Plc’s distributable funds on 31 December 2022 total EUR 407,036,848.65 which includes EUR
34,309,926.59 in net profit for the year. The Board of Directors proposes to the Annual General Meeting
convening that a return of capital of EUR 0.36 per class C share be paid for the financial year 2022 and that
a return of capital for class F shares be paid in accordance with the Articles of Association of the Company
for the financial year 2022 from the reserve for invested unrestricted equity of the Company. All the class C
shares in the Company are entitled to a return of capital except for treasury shares held by the Company
on the return of capital record date. In accordance with the Articles of Association of the Company and as a
consequence of the first share price hurdle for conversion of class F shares into class C shares having been
exceeded in September 2021, class F shares currently carry a right to asset distribution equivalent to 0.69 per
cent of the return of capital proposed to be distributed to class C shares, which corresponds to a return of
capital of EUR 0.07 per class F share.
The dividend shall be paid in four instalments. The first instalment of EUR 0.09 per class C share and
EUR 0.02 EUR per class F share, based on the class F shares right to asset distribution in accordance with
the Articles of Association shall be paid to the shareholders who are registered in the list of shareholders
maintained by Euroclear Finland Ltd on the dividend record date of 14 April 2023. The payment day proposed
by the Board for this instalment is 21 April 2023.
The second instalment of EUR 0.09 per class C share and EUR 0.02 per class F share, based on the class F
shares right to asset distribution in accordance with the Articles of Association. The dividend record day for
the second instalment as per the current rules of the Finnish book-entry system would be 15 September 2023
and the dividend payment day 22 September 2023.
The third instalment of EUR 0.09 per class C share and EUR 0.02 per class F share, based on the class F
shares right to asset distribution in accordance with the Articles of Association. The dividend record day for
the second instalment as per the current rules of the Finnish book-entry system would be 12 December 2023
and the dividend payment day 19 December 2023.
The fourth instalment of EUR 0.09 per class C share and EUR 0.01 per class F share, based on the class F
shares right to asset distribution in accordance with the Articles of Association. The dividend record day for
the second instalment as per the current rules of the Finnish book-entry system would be 15 March 2023 and
the dividend payment day 22 March 2024.
No significant changes have taken place in the company’s financial position since the end of the financial
year. The company’s liquidity is good and in the opinion of the Board of Directors the proposed return of
capital will not put the company’s solvency at risk.
Helsinki, 20 March 2023
Tomas von Rettig Alexander Ehrnrooth
Chair of the Board
Carina Edblad Carlo Grossi
Jyri Luomakoski Catharina Stackelberg-Hammarén
Matts Rosenberg John Peter Leesi
CEO
Our auditor’s report has been issued today.
Helsinki, 20 March 2023
KPMG Oy Ab
Authorized Public Accountant Firm
Kim Järvi
APA
Annual Report 2022 82
Auditor’s report
To the Annual General Meeting of Purmo Group Plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Purmo Group Plc (business identity code 2890898-5) for the
year ended 31 December 2022. The financial statements comprise the consolidated balance sheet, statement
of comprehensive income, statement of changes in equity, statement of cash flows and notes, including
a summary of significant accounting policies, 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, financial
performance and cash flows in accordance with International Financial Reporting Standards (IFRS) 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 Audit Committee.
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 the 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 2.3 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.
Materiality
The scope of our audit was influenced by our application of materiality. The materiality is determined
based on our professional judgement and is used to determine the nature, timing and extent of our audit
procedures and to evaluate the effect of identified misstatements on the financial statements as a whole. The
level of materiality we set is based on our assessment of the magnitude of misstatements that, individually or
in aggregate, could reasonably be expected to have influence on the economic decisions of the users of the
financial statements. We have also taken into account misstatements and/or possible misstatements that in
our opinion are material for qualitative reasons for the users of the financial statements.
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. The significant risks of material misstatement referred to in the EU Regulation No
537/2014 point (c) of Article 10(2) are included in the description of key audit matters below.
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.
Annual Report 2022 83
This document is an English translation of the Finnish auditor’s
report. Only the Finnish version of the report is legally binding.
The key audit matter How the matter was addressed in the audit
Valuation of goodwill (refer to accounting principles for the consolidated financial statements and note 3.1)
• At the end of the financial year, the group had EUR 371
million of goodwill. The goodwill amounts to 92 % of the
group equity and 38 % of the group’s total assets on 31
December 2022.
• Goodwill is tested for impairment when indicators
of impairment exist, or at least annually. Goodwill
impairment testing is conducted by comparing the
carrying value with the recoverable amount using a
discounted cash flow model.
• Determining the key assumptions used in the cash flow
forecasts requires management judgement and estimates
especially relating to long term growth, profitability, and
discount rates.
• Valuation of goodwill is considered a key audit matter
due to the significant carrying value and high level of
management judgement involved.
• We assessed the impairment tests prepared by the
Company.
• Our detailed audit work with the involvement of KPMG
valuation specialists included testing the integrity of the
calculations and the technical model. We challenged
the assumptions used by management in respect of
forecasted growth rates and profitability as well as the
appropriateness of the discount rates used. We also
validated the assumptions used in relation to market and
industry information.
• We also compared the cash flows used in the testing to the
group’s business plans to our views.
• Furthermore, we have considered the adequacy of the
group’s disclosures in respect of the impairment testing.
Revenue recognition (refer to note 2.2 of the consolidated financial statements)
• Revenue is mainly generated through the sale of
manufactured goods. The revenue is generated by
subsidiaries in dierent countries. The revenue earned
from the sale of goods is recognised when the control
associated with ownership is transferred to the buyer in
accordance with the terms of delivery.
• In general, revenue recognition within the group is not
complex but the large volumes of transactions and the
fact that the revenue is generated through subsidiaries
in dierent countries makes revenue recognition an area
of focus in the audit and is therefore determined as a key
audit matter.
• Auditors of subsidiaries have performed testing of controls
related to revenue recognition and performed substantive
procedures such as testing of sales agreements and year-
end transactions.
• On group level we have assessed the revenue recognition
principles and based on the work performed by the
auditors in the subsidiaries evaluated compliance with
group revenue recognition principles.
The key audit matter How the matter was addressed in the audit
Valuation of Inventories (refer to note 4.1 of the consolidated financial statements)
• The value of inventories amounted to EUR 174 million
at the end of the financial year. It is essential from an
accounting perspective that the internal control related
to inventory accounting and valuation is appropriately
organized.
• The valuation of inventories is based on management
estimates in respect of slow moving and obsolescence
assessment.
• Due to the significant carrying amount and management
judgement involved, valuation of inventories is determined
as a key audit matter that our audit is focused on.
• In our audit the key focus has been on the pricing and
valuation of inventories. Our component auditors carried
out controls testing and substantive testing in relation to
inventory costing and obsolescence provisions including
monitoring of inventory levels.
• On group level we have assessed the work performed by
the auditors in the subsidiaries and on group level made
an overall assessment of the valuation of inventories.
Annual Report 2022 84
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 International Financial Reporting
Standards (IFRS) 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 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.
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.
Annual Report 2022 85
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting for the financial period ended 31.12.2018.
Purmo Group Plc (formerly Virala Acquisition Company Plc) has become a public interest entity on 29.6.2021.
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 the 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.
Helsinki, 20 March 2023
KPMG Oy Ab
Kim järvi
Authorised Public Accountant, KHT
Annual Report 2022 86
We have undertaken a reasonable assurance engagement in respect of whether the consolidated
financial statements for the year ended 31 December 2022 included in the digital financial statements
743700JHE9365SIHRE72-2022-12-31-en.zip of Purmo Group Plc (Business ID 2890898-5) have been marked
up with iXBRL markups in accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815
(ESEF RTS).
The Responsibility of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of
Directors and financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS.
This responsibility includes:
• preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
• marking up the primary statements and the notes to the consolidated financial statements, and the
company identification data included in the ESEF financial statements with iXBRL tags in accordance with
Article 4 of the ESEF RTS; and
• ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem
necessary to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical requirements applicable in Finland,
which apply to the engagement we have performed, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to
design, implement and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulations
requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the
marking up of the consolidated financial statements included in the ESEF financial statements comply in all
material respects with the Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in
accordance with International Standard on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence whether;
• the primary statements of the consolidated financial statements included in the ESEF financial statements
are, in all material respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
• whether the notes to the consolidated financial statements and the company identification data included
in the ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in
accordance with Article 4 of the ESEF RTS; and
• whether the ESEF financial statements and the audited financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes
the assessment of the risks of material departures from the requirements set out in the ESEF RTS, whether due
to fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated
financial statements and the company identification data included in the ESEF financial statements of Purmo
Group Plc identified as 743700JHE9365SIHRE72-2022-12-31-en.zip for the year ended 31 December 2022 are,
in all material respects, marked up in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of Purmo Group Plc for the year
ended 31 December 2022 is set out in our Auditor’s Report dated 20 March 2023. In this report, we do not
express any audit opinion or other assurance conclusion on the consolidated financial statements.
Helsinki 20 March 2023
KPMG Oy Ab
Kim Järvi
Authorised Public Accountant, KHT
Independent Auditor’s Reasonable Assurance Report on
Purmo Group Plc’s ESEF Financial Statements
To the Board of Directors of Purmo Group Plc
Annual Report 2022 87