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ANNUAL REPORT
2025
Annual Report 2025
OVERVIEW
Embla Medical in Brief 3
Letter From the CEO 5
2025 Highlights 6
Business Segments
9
STRATEGY
Business Model 11
INNOVATION
Advancing Mobility Through Innovation
26
Strong Intellectual Property Portfolio
27
PERFORMANCE
Five-Year Overview 29
Performance in 2025 30
Guidance for 2026 33
SUSTAINABILITY
STATEMENT
Sustainability Statement 2025 52
Responsible for Tomorrow
53
General Disclosures (ESRS 2) 54
Our Environment 69
Our People
84
Our Business 97
Independent Limited Assurance
Report On Selected Sustainability Data 100
FINANCIAL
STATEMENTS
Consolidated
Financial
Statements
103
Growth’27 Strategy
14
GOVERNANCE
MARKETS
Shareholder Information
34
Markets and Trends
18
Corporate Governance
38
Streifeneder ortho.production
22
Risk Management
43
Leading the Future of Patient Care
23
Taxation
46
Growth Markets
24
Board of Directors
47
Executive Management
49
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
3
OVERVIEW
Embla Medical in Brief
Embla Medical is a leading global provider of
innovative
mobility
solutions
that help
people live
a Life Without
Limitations®. Founded as Össur
in
1971, Embla
Medical is now
home to industry-leading
brands such
as Össur, Fior
& Gentz, College
Park and
ForMotion.
We Improve
People’s Mobility
Össur is a leading global provider
of prosthetics
and bracing
& supports
solutions.
Fior &
Gentz is
an innovative developer of neuro orthotics, and
College Park designs and manufactures lower
limb prosthetics. ForMotion patient care clinics
are spread
across
multiple
countries
and provide
patients with compassionate care from world-class
healthcare professionals. Embla Medical is focused
on reaching more people with our mobility solutions
and contributing to
the advancement of
the Orthotic
& Prosthetic industry in a sustainable manner. Our
commitment and responsibility
extend to
our people
and our
planet as
we embrace
diversity
and recognize
the impact we have on the world around us.
Embla Medical
is listed
on
Nasdaq Copenhagen,
has operations
in over
40 countries
with around
4,500 employees worldwide.
Our Purpose
Embla Medical is a purpose-driven company
dedicated to improving people’s mobility through
the delivery
of Prosthetics,
Neuro Orthotics,
Bracing
& Supports and Patient Care.
Our passionate
commitment
to improving
people’s
quality of life through innovation and patient
outcomes has been the core of our success.
Helping
people
live a
Life Without
Limitations®
is why we
exist as
a company.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
4
HONESTY
Stay True
We show respect by adhering to facts and reality,
fulfilling promises and claims, and admitting failures.
We nurture honest communication throughout the
company by sharing
information and respecting each
other’s time and workload.
FRUGALITY
Make Every Step Count
We use resources wisely. The company aims to
minimize costs across all areas
of its business through
effective communication, preparedness,
planning and
optimized processes.
COURAGE
Aim Higher
We are open to change and constantly strive
for improvement. We challenge unwritten rules,
show initiative, and take
calculated risks, while at
the same time, take responsibility for our ideas,
decisions and actions.
OUR VALUES
Our Values
Embla Medical’s core values
of Honesty, Frugality
and Courage serve as
the foundation and driving
force behind
the company’s success, guiding
employees across the organization
in their day-to-day activities
and decision-
making.
At Embla Medical
we believe
that by
honoring the
values, the
company will
achieve long-term
sustainable
success, furthering our mission of improving people’s mobility.
Our Sustainability Commitment
We apply our core values in our approach towards sustainability.
We show courage in
setting ambitious goals and are
honest about
where we stand,
acknowledge the challenges we
face and what
we
can improve. We practice frugality by using our resources wisely
and efficiently. Our sustainability commitment is captured under
the theme of Responsible for
Tomorrow®, understanding that the
decisions
and actions
we take
today will
impact future
generations.
Vision
Enable Life Without Limitations
Mission
We Improve
People’s Mobility
Goal
Serve More People for
Profitable Growth
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
5
OVERVIEW
Letter from the CEO
2025 was a year of meaningful progress for Embla
Medical. Across geographies and patient care settings,
the need
for our
solutions
remains
as strong
as ever,
and
once again,
our teams delivered
with focus
and purpose.
We achieved 6% organic growth driven by strong
performance in Prosthetics & Neuro Orthotics and
delivered a robust EBITDA margin of 20%, reflecting
operational
efficiency
and effective
cost control.
These
results underscore
the strength
of our
business model
and our ability to operate in a dynamic environment.
We continued to advance our Growth’27 strategy
through
a combination
of innovative
solutions,
market
expansion,
and operational
execution.
A key
milestone
during the
year was
the acquisition
of a
majority share
in Streifender ortho.production, positioning Embla
Medical as a full-range provider. This investment
strengthens
our presence
in key
markets
and expands
our reach in less developed healthcare markets –
enabling us to better support clinicians, customers
and, most importantly, reach more patients.
Innovation
remains at the
heart of our
progress.
In 2025, we introduced new solutions across our
portfolio of leading global brands: Össur, College Park
and Fior & Gentz. Our innovations have improved
millions of lives and created lasting value for patients
and healthcare systems.
Yet, there
is so
much more
we
can do to
reach more people
with even more
impactful
solutions,
and we
are fortunate
to have
one of
the most
innovative teams in the industry leading the way.
We also
strengthened
our foundation
in Patient
Care
following a year with lower-than-expected growth,
as we undertook important changes to better support
patients and clinicians over
the long term. With
the global
rollout of our ForMotion
brand and the
implementation
of new performance management systems nearing
completion, our focus is on creating the best possible
environment for clinicians
to deliver
exceptional patient
care and on ensuring optimal outcomes for patients.
These efforts
position
our Patient
Care business
to
return to a stronger growth trajectory in 2026.
One particularly meaningful
milestone was
the opening
of a
new clinic
in Kyiv.
Establishing
a presence
in Ukraine
underscores our commitment to ensuring access to
high-quality mobility care and reflects our belief that
mobility is fundamental to dignity and independence.
During
the year,
we were
honored
to receive
multiple
awards and accolades, not only for our products
and innovation capabilities but also our broader
commitment to
responsible growth. This
includes being
named one of
TIME Magazine‘s World‘s
Best Companies
in Sustainable Growth. These recognitions are a
testament to the dedication of our employees and the
trust placed
in us
by customers,
partners,
and end-users
around the world.
While the
global environment
remains
challenging,
we
stay grounded and focused on what we can control.
What has
not changed, and
will not
change, is the
need
for what we do. People around the world continue to
count on
us to
improve their mobility,
and our
purpose
remains as strong as ever.
As we
look ahead,
we remain
confident
in our
strategy
and our ability to
navigate change while creating
value for
patients, customers,
employees, healthcare
systems and
shareholders. The
underlying drivers
of demand
- an
aging
population, rising incidence of
mobility-limiting conditions,
and growing
expectations
for quality
of life,
remain firmly
in place.
Our focus
is clear:
putting
patients
first. We
will
continue
to innovate,
collaborate,
and invest
in solutions
that help people
live life
without limitations.
I would like to sincerely thank our employees,
customers,
end-users,
and shareholders
for their
trust
and continued
collaboration.
Together,
we are
shaping
a future where
more people can
live a life
with greater
mobility, independence, and confidence.
Sveinn Sölvason
President and
CEO
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
6
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
7
Celebrating
Excellence
2025 was marked by achievements and accolades that reflect
our commitment
to innovation,
quality, and
meaningful impact.
These honors recognize the dedication of our teams and
the
trust of those we serve.
Embla Medical receives Iceland’s Presidential
Export
Award 2025,
recognizing
the company’s
success as an international business
Össur Americas
Customer
Care named
a finalist for the
“Best in Class Contact
Center” award at Customer Contact
Week (CCW)
Embla Medical
named one
of the
World’s
Best
Companies in Sustainable Growth 2026 by
TIME Magazine for the second year in a row
Forbes Magazine names Embla Medical to its
first-ever
global Accessibility
100 list,
recognizing
the company’s history
of innovative prosthetics,
neuro orthotics and bracing solutions,
and high-quality
patient care
services
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
8
2025 Financial Highlights
20%
EBITDA Margin
2025 Sustainability Highlights
929m
Highest Ever
Sales Recorded
(USD)
+6%
Organic
Sales
Growth
+7%
Local
Currency
Growth
(including acquisitions)
-13%
Emissions
Intensity
2024/2025
Market Based
Emissions
(tCO
2
e/mUSD)
49% : 51%
Gender Ratio
Female : Male
7.9
of 10
Employee
Engagement
Index
4.0
Employee
Incident
Rate
Total Recordable Incident
Rate
(TRIR) per 500 FTEs
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
9
OVERVIEW
Business Segments
Our Business Segments
Embla Medical
operates within
three business
segments of
the non-invasive
orthopaedics
market;
Prosthetics & Neuro Orthotics, Bracing & Supports and Patient Care.
Prosthetics & Neuro Orthotics
51% of Total
Sales
Our prosthetics product
portfolio, marketed under
the Össur and
College Park brands,
includes a range
of lower
and upper limb prosthetic components.
This offering now also includes
Streifeneder orthopaedic materials and
equipment, added through our
investment in Streifeneider ortho.production.
The portfolio spans solutions
that support individuals
with lower activity
levels who may
struggle to balance
safety,
comfort, and
mobility, as
well as
advanced solutions
designed to
empower more
active users to
excel and
engage
in high-impact activities.
Our neuro orthotics
product portfolio, marketed under
the Fior & Gentz
brand, includes a
range of premium
knee and
ankle orthotic joints to
create innovative custom-made orthotics
for patients experiencing gait impairments
resulting
from neurological conditions.
SUB-SEGMENT
END-USER PROFILE
IMPROVING
MOBILITY
Mechanical Products
People living with
lower and upper
limb loss or limb difference
Broad product offering
of prosthetics
and
neuro orthotics
Bionic Products
People living with
lower and upper
limb loss or limb difference
Advanced
microprocessor
-controlled feet,
knees,
hands,
fingers,
and
neuro
orthotic
joints
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
10
Bracing & Supports
16% of Total
Sales
Össur offers
a broad range
of mobility
solutions for
acute injuries
and osteoarthritis.
Össur’s osteoarthritis (OA) solutions
are designed to enhance
quality of life,
reduce pain, and
improve mobility
for people
living with
osteoarthritis.
Össur offers
the Unloader
One® range
of knee braces
that relieve
pain from
knee osteoarthritis, as
well as
the Unloader®
Hip which is
designed to
reduce pain by
optimizing load dispersion
for patients suffering from mild and moderate osteoarthritis of the hip.
SUB-SEGMENT
END-USER PROFILE
IMPROVING
MOBILITY
Injury Solutions
People recovering
from fractures,
ligament
injuries or need post-operative treatment
Products stabilizing
joints and
improving
healing
OA Solutions
People living with Osteoarthritis (OA)
Non-surgical treatment
by unloading
affected joint with braces
Össur’s portfolio
of solutions for
acute injuries are designed
for people recovering
from fractures,
ligament
injuries or
for those in
need of post-operative
treatment solutions.
These solutions
are designed
to support
the healing process of bone and soft tissue injuries.
Patient Care (ForMotion)
33% of Total
Sales
Embla Medical
provides patients
with world-class
care through
a global
network of
leading Orthotic
& Prosthetic
(O&P) facilities, operating under
the ForMotion brand. Each
location is staffed by
expert clinicians and highly
skilled professionals in mobility.
SUB-SEGMENT
END-USER PROFILE
IMPROVING
MOBILITY
Prosthetics
People living with lower
and upper limb
loss or limb difference
Fitting patients with lower
and upper limb
prostheses
Orthotics
People living with
neurological, gait, and
musculoskeletal conditions
Fitting patients with
orthotics and assistive
devices
Our Geographical Segments
With operations in over 40 countries, Embla Medical’s industry-leading brands have global operations
in three regions:
2025 Regional Overview
HQ FTEs: ~700
APAC
8%
of total sales
USD 73 million
Organic growth: 11%
FTEs: ~200
EMEA
49%
of total sales
USD 457 million
Organic growth: 8%
FTEs: ~1,900
Americas
43%
of total sales
USD 399 million
Organic growth: 2%
FTEs: ~1,400
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
11
Patient Care
Own O&P clinics and
independent providers
STRATEGY
Business Model
Our business
is centered
on improving
people‘s mobility
so they
can live
a Life Without
Limitations®.
We develop,
manufacture and distribute a
wide range of
prosthetic, neuro orthotic
and bracing &
supports solutions, and
we
serve patients in need of various mobility
solutions in our patient care facilities across the
globe.
Innovation
New product
introductions every year
Manufacturing
Off-the-shelf and
customized solutions
Prescribers and Payers
Over 90% of products
and services
reimbursed
Patients
Patient-centric
business model
Sales and Marketing
Mainly direct sales
but also distribution
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
12
Patients
The patients
we serve
include people
with lower
and upper
limb loss
resulting from
conditions
such as
vascular
disease, including diabetes, as
well as cancer,
trauma and congenital
defects. Our patient
population also
includes individuals who require
off-the-shelf or customized orthotic solutions
due to mobility
impairments
related to neurological conditions, osteoarthritis of
the knee or hip,
or musculoskeletal conditions present at
birth or caused by illness
or injury, or those who
require enhanced healing following surgery or
injury.
Growing Number
of Amputees
Receiving Prosthetics
Prosthetic Patients
Source: Embla Medical
Management estimates
The primary cause of
lower limb amputation is
vascular-related disease. Market data,
however, shows that
the proportion
of people
living with
limb absence
due to trauma,
cancer and congenital
defects is
higher than
incidence rates alone would suggest.
This is because individuals with
lower limb loss resulting
from vascular-
related diseases
have a shorter
average life
expectancy than
those whose
limb loss
is caused
by other
factors.
This underscores the potential opportunities in
catering to the needs
of chronic patients who
need lifelong
service and explains why 70-80% of Patient Care revenue is recurring.
Source: Embla Medical
Management estimates
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
13
Innovation
Embla Medical develops and
manufactures prosthetic, neuro orthotic
and bracing & supports
solutions, from
idea to finished product.
With every innovation, our
goal is to deliver
cost-effective mobility solutions that
create value
for patients
and healthcare
systems worldwide.
To obtain
independent
clinical
evidence and
health
economic data, Embla Medical
initiates and supports clinical
studies in cooperation with
leading scientists,
institutions, and healthcare professionals in the field.
As part
of our ambition
to remain
at the forefront
of innovation
and new
technology,
we participate
in externally
funded projects,
collaborating
with partners
across industry
and academia.
We contribute
to initatives
involving
world-class scientists engaged
in cutting
edge research. This
enables us to
jointly shape
the technologies of
the
future with the mission of improving people’s mobility.
Manufacturing and Quality
Embla Medical
maintains a
strong global
manufacturing
function.
At Embla
Medical,
there is
a continuous
strive
for efficiency, which includes
finding ways to optimize
the manufacturing process and
investments have been
made to make the manufacturing platform increasingly scalable.
Manufacturing of prosthetic solutions takes place in Iceland, Scotland,
Germany, United States and Mexico.
Neuro orthotics are manufactured in Germany, and manufacturing of bracing
solutions takes place in Mexico
with outsourcing of soft goods to China. We also operate a few smaller manufacturing and assembling facilities
in select countries.
Reykjavik (IS)
Livingston (SC)
Lüneburg (DE)
Olympia (WA, US)
Celle (DE)
Warren (MI, US)
Emmering (DE)
Newburgh (NY, US)
Orlando (FL, US)
China
Tijuana (MX)
Manufacturing
Locations
We place
great emphasis
on quality,
which is
an intrinsic
part of
our processes.
Embla Medical
entities
maintain
certified Quality Management Systems (QMS)
based on ISO standards, ensuring
compliance with applicable
medical device regulations in the countries where we operate.
Sales and Marketing
Products are delivered to users of
our products and solutions through healthcare providers who specialize in
assisting
individuals
who suffer
from impaired
mobility. In
Prosthetics
and Neuro
Orthotics,
these customers
are
Orthotic & Prosthetic (O&P)
clinics and in Bracing
& Supports, it is
a combination of O&P clinics,
hospitals, and
surgery centers. Our customers claim
reimbursement from private or public
insurance as the vast majority
of
Embla Medical’s products and services
are reimbursed. We have
operations in around 40 countries
and largely
sell our products through our own direct sales network.
Patient Care
Embla Medical products are serviced
through a global network of
patient care clinics. Moreover, in
selected
countries, Embla Medical manages its
own Patient Care facilities under the
ForMotion brand. Each location is
staffed by
expert clinicians
and highly
skilled mobility
professionals.
The clinics
help people
with limb
loss or limb
difference, and those in need
of gait and musculoskeletal support -
improving their mobility and quality of
life.
Prescribers and Payers
Prescribers
include healthcare
professionals
who prescribe
products
and services
based on
the clinical
indication
of their
patients. These include
orthopaedic surgeons, non-surgical physicians,
rehabilitation, and emergency
physicians as well as other professionals providing medical diagnosis.
Payers include healthcare systems, insurance
companies and individuals. In most cases,
when an individual has
been fitted
with a product,
Embla Medical’s
customers claim
reimbursement
from the relevant
public institutions
or private insurance companies. Around
90% of Embla Medical’s
product sales and services are
estimated to be
reimbursed by a third
party. Generally, Embla Medical’s sales
in the developed markets
are mostly reimbursed
while sales in emerging markets are mostly paid out-of-pocket.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
14
STRATEGY
Growth’27 Strategy
Embla Medical introduced
its five-year Growth’27 strategy
in 2023. The focus
of the Growth’27 strategy
is to reach
more people in need
of mobility solutions.
The strategy addresses
key industry themes
and supports our transformation
into an increasingly
patient-centric
company.
It is
our aim
to drive
accelerated
organic growth
and continue
generating
value for
individuals
and
healthcare systems.
Unlocking a Larger
Playing Field as
an Increasingly
Patient-Centric Organization
Over the past years,
we have been transitioning from
a product-focused company to
an increasingly patient-
centric organization.
This shift
primarily
focuses on
chronic mobility
categories,
where individuals
require lifelong
solutions, as well as
on those who have suffered
acute injuries requiring short-term solutions. This
transition
presents opportunities to gain direct
access to patients, payers, and
providers while addressing a broader
set of
chronic mobility
categories.
Growth Drivers
Patient Reach, Innovative Solutions, and O&P Value Creation are the three
growth drivers that form the basis
of Growth’27. These growth drivers address our ambition to become
increasingly patient driven and to cater
for the needs of individuals with chronic mobility challenges. In other words, they guide our strategic priorities
within Prosthetics, Neuro Orthotics and Patient Care.
In Bracing & Supports, we will continue to drive growth in line with our “Bracing Simplified” strategy, by being
a trusted partner for our customers through the delivery of a simplified and
strong product portfolio.
Embla Medical‘s M&A strategy is
also integral to the
execution of Growth’27 as
it involves actively seeking
strategic
acquisitions
to support
our vision
of enabling
Life Without
Limitations®.
In addition,
our foundational
pillars
of
Sustainability, People, and Scalability are the backbone of
successfully implementing our strategic ambitions.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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15
Transitioning from being a product company
to an
increasingly
patient-centric
organization
Our Growth’27 Strategy
*Subject to potential M&A and
special items
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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16
Patient Reach
Patient Reach is about creating value by
improving our ability to reach and
serve patients effectively. The patient
population we
focus on,
individuals with
chronic mobility
impairments, remains
widely underserved
in terms
of access
to
quality mobility
solutions. For
instance, globally,
only one
in three
new amputees
currently receives
a prosthetic
device.
Access to proper care
and products differs greatly between
countries, influenced by the
maturity of infrastructure
and healthcare
systems. Patient
Reach is
about collaborating
with our
primary stakeholders
in each
market to
reach more patients and
increase access to high-quality
mobility solutions. Our primary
stakeholders are classified
into four
segments:
Certified
Prosthetists
& Orthotists
(CPOs),
Payers (public
and private
insurance
companies),
Referral sources
(physicians
and rehabilitation
doctors), and
Patients.
Innovative Solutions
Embla Medical‘s
history is
deeply rooted
in innovation.
We integrate
innovation into
all our
actions, creating
value
for our customers through functional trade-up and
ease of doing business.
Through the Growth‘27 strategy,
our focus
is to drive
innovation across
the entire
value chain
and offer
lifelong health
services, ultimately
improving the quality of life for the patients who
rely on our products and services.
We aim
to capture
commercial
opportunities
with innovative
solutions
by pursuing
advancements
in technology
and clinical
applications that can
be perceived as
transformational for our
patients. We channel
our efforts
into
developing solutions that not only meet
the current lifestyle needs of
patients but also provide them with
the
prospect of
sustained mobility over
the long
term. To ensure
patients have access
to our
products and
services,
we continue
to prioritize
the collection
of clinical evidence
and engage with
payers and reimbursement
systems
around the world.
Our innovation
efforts enhance
our Patient
Reach through
distinct growth
drivers:
contribute
to higher
fitting
rates, increase bionic penetration, drive functional
trade-up and grow Emerging Markets.
O&P Value Creation
O&P Value
Creation
forms the
third pillar
of the
Growth’27
strategy,
connecting
Patient
Reach and
Innovative
Solutions. It revolves around driving
productivity across the entire
value chain, with the
aim of attracting and
better
serving
a greater
number of
patients in
O&P clinics,
while becoming
a stronger
partner
to our
O&P customers.
Over the last decade, we have strategically expanded our Patient Care portfolio, focusing on defining key
processes and leveraging economies of scale. Today, our Patient Care facilities
span 12 countries, with
approximately 200 locations across all regions.
Most patients visiting O&P
clinics face chronic
mobility challenges, which often lead
to the formation
of strong
bonds between the patient and
their Certified Prosthetist & Orthotist (CPO). While some
solutions offered are
off-the-shelf,
others are
more complex
and require
frequent clinic
visits. In
both cases,
maintaining
a consistently
high standard of care is
crucial to delivering enhanced value
to patients and underscores the importance
of having
a robust clinic
presence.
A key element in O&P Value Creation is driving innovation and productivity in the delivery of mobility solutions
within our Patient Care facilities. The end-goal is to achieve better
patient outcomes, enhanced service, and
an improved overall patient experience, resulting in higher-quality
care and an increased number of patients
seeking care at our clinics.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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Bracing Simplified
In the Bracing & Supports segment, our robust product portfolio
addresses fundamental healthcare challenges
for both acute and chronic injuries.
We began implementing our Bracing Simplified strategy in 2021
and continue to focus on the four key pillars
of the strategy: Identity, Customer Convenience, Product Confidence
and Responsibility. Our goal with
Bracing Simplified is to have a strategy that extends beyond innovation alone,
recognizing the increasing
costs and diminishing effectiveness of relying solely on innovation to drive
growth within the bracing industry.
Furthermore, our aim is to establish a framework that enhances efficiency
and streamlines our operations.
Acquisitions
We will continue
to pursue growth
opportunities
through strategic
acquisitions aligned
with our vision
of enabling
Life Without
Limitations®. Our M&A
focus will be
on acquisitions that
enable us to
reach and
serve more patients,
through a combination of market access, technology and portfolio expansion.
In September 2025, Embla Medical closed a majority investment in Streifeneder ortho.production,
an international developer and supplier of orthopaedic mobility solutions, employing around 100 people.
In addition to its offerings of prosthetic and orthotic components, Streifeneder ortho.production also supplies
orthopaedic materials and equipment to the O&P industry.
Financial Ambition
Sales Growth
7-10%
=
5-7%
+
2-3%
Local currency growth
Organic growth
Acquisitive growth
p.a. on average
p.a. on average
p.a. on average
EBITDA Margin
Before Special
Items
■
The ambition is to gradually increase the EBITDA margin before special items.
■
EBITDA margin expansion is subject to acquisitions and currency movements, in addition to changes
in the business mix.
Capital Allocation
■
We will prioritize growth opportunities, value-adding investments and acquisitions, while
maintaining
a healthy balance sheet with a target range of 2.0-3.0x NIBD/EBITDA before
special items.
■
Excess capital will be returned to shareholders via purchase of own shares.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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MARKETS
Markets and Trends
Embla Medical is a leading global provider of
innovative mobility solutions that help
people live
a Life Without Limitations®.
Home to several
leading
brands, Embla Medical is dedicated to improving
people‘s mobility by providing Prosthetics, Neuro
Orthotics, Bracing & Supports and Patient Care
through a global network of Orthotic & Prosthetic
facilities.
The
Prosthetics
Product Market
Prosthetics include artificial limbs and related
products for people who were born with limb
loss or limb difference, or who have undergone
limb amputation. Through
the Össur
and College
Park brands, we provide a full range of premium
and standard lower and upper limb prosthetics,
including feet, knees, hands, fingers, liners, and
other components.
The size of
the global
prosthetics
product market is estimated to be approximately
USD 2 billion. Embla Medical is
the second largest
company operating in Prosthetics with a market
share estimated at around 25%. The growth rate
of the market is estimated to be 6-8%.
Growth in the prosthetics industry is driven by
volume and
product mix,
supported
by a
consistent
renewal and maintenance cycle for prosthetic
products, increasing fitting rates for prosthetics
patients, expanding reimbursement coverage,
the adoption of
new innovative technologies for
reimbursement,
and improved
healthcare
access
and disposable income in emerging markets.
The primary sales channel in the prosthetics
market is Orthotic
& Prosthetic
(O&P) clinics
(Patient Care clinics).
Pricing in the prosthetics product market is on
average relatively
stable, with
annual adjustments
influenced by inflationary trends and regional
reimbursement developments.
Prosthetics
Product Market
Source: Embla Medical
Management estimates
Note: Estimates
only account for component
sales from providers
to suppliers, i.e.
not clinical services
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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19
The Neuro Orthotics Product
Market
Neuro orthotics include products
for people living with
a mobility impairment as
a result of stroke,
spinal
cord injuries, multiple sclerosis, cerebral palsy, or other neurological
conditions. Through the Fior & Gentz
brand, we provide a full range of premium orthotic joints for custom ankle foot orthoses
(AFOs) and knee
ankle foot orthoses (KAFOs).
The size of the global neuro orthotics product market in which Embla Medical
operates is estimated to be
approximately USD 500 million, and Embla Medical’s market share is estimated
at around 6%. The growth
rate of the market is estimated to be 10-12%.
Growth in the neuro orthotics industry is driven by both volume and mix, supported by a consistent
renewal
and maintenance cycle, increasing
fitting rates, expanding reimbursement
coverage, the acceptance of new
innovative technologies for reimbursement, and broader healthcare
coverage.
Pricing in the neuro orthotics product market is generally stable, with
annual adjustments influenced by
inflationary trends as well as region-specific reimbursement developments.
Neuro Orthotics
Product Market
Source: Embla Medical
Management estimates
Note: Estimates
only account for component
sales from providers
to suppliers, i.e.
not clinical services
The Bracing & Supports Product Market
Bracing & Supports include products used to provide support for both therapeutic
and preventative
purposes. Össur provides a comprehensive line of products with a primary focus on osteoarthritis and injury
solutions, including devices that support the spine, knee, hip, foot, ankle, and
hands.
The size of the global Bracing & Supports product market in which Embla Medical operates is estimated to
be approximately USD 3 billion, and Embla Medical’s market share is estimated
at around 5%. The growth
rate of the market is estimated to be 2-3%.
Market growth is driven by healthy volume growth. Rising participation in amateur sports and higher general
activity levels, along with increased volumes of elective surgeries such as knee
replacement procedures,
which drive demand for postoperative bracing, support ongoing
growth. Market expansion is further
supported by the adoption of high-end innovative products,
such as the Unloader® OA bracing products.
The primary sales channel in the Bracing & Supports market are Orthotic & Prosthetic clinics (Patient Care
clinics), hospitals, and orthopaedic clinics.
Price levels are relatively stable with annual
adjustments influenced by inflationary trends and region-specific
reimbursement developments. In some markets, however, moderate
price pressure exists for selected
product categories, particularly those with lower levels of innovation.
Bracing &
Supports Product
Market
Source: Embla Medical
Management estimates
Note: Estimates
only account for component
sales from providers
to suppliers, i.e.
not clinical services
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
20
The Patient Care
Market
The Patient Care market consists of patient care clinics, often referred
to as Orthotic & Prosthetic (O&P)
clinics, that provide services to patients with orthotic and prosthetic mobility
needs.
The size of the global Patient Care services market
is estimated to be approximately USD 15 billion.
Embla Medical is estimated to be the third or fourth largest company operating in
the market,
with a market share of around 2%. The market’s growth rate is estimated at
3-5%.
Growth in the Patient Care services market is driven by both volume and mix,
supported by a consistent
renewal and maintenance cycle, increasing fitting rates for orthotics
and prosthetics patients, expanding
reimbursement coverage, the acceptance of
new innovative technologies for reimbursement, and improved
healthcare coverage and disposable income in emerging markets.
Pricing in the market is determined by region-specific reimbursement systems and is, on
average, limited
to moderate. Selected markets increase reimbursement rates
up to inflationary levels, while most have
limited rate adjustments.
Patient Care
Market
Source: Embla Medical
Management estimates
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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21
Orthopaedic Industry Stakeholders
In the
orthopaedic
industry,
many stakeholders
and decision
makers are
involved
in the
purchasing decision. Stakeholders can be categorized into five groups.
Industry Trends
Create Opportunities
Economic development around
the world, along with
and global macrotrends,
is creating increased demand
and new opportunities for growth. We have selected six trends that positively
impact the demand for Embla
Medical‘s products and services:
Prescribers
Healthcare
professionals
who prescribe
products
based on
the
condition and clinical indication of the patient.
2
Providers
Healthcare
professionals,
such as
CPO’s, doctors,
and other
clinical specialists who provide patients with products.
3
Payers
Public and
private insurance
companies.
Around 90%
of Embla
Medical
sales are reimbursed by a third party.
4
Influencers
Healthcare
systems,
insurance
companies,
medical
associations,
patients and their families.
5
Patients
People who
receive
medical treatment
and use
our products
and service
solutions. Also referred to as a user or end-user of our products.
1
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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22
MARKETS
Streifeneder
ortho.production
In September 2025, Embla
Medical announced
an agreement to invest in a majority share
(51% of the shares) in privately owned
Streifeneder ortho.production GmbH located
in Bavaria, Germany.
Streifeneder ortho.production is an international
developer and supplier of orthopaedic mobility
solutions, employing around 100 people. In addition
to its
offerings of prosthetic
and orthotic components,
Streifeneder also supplies orthopaedic materials
and equipment to the O&P industry.
The investment in Streifeneder is a solid strategy
for Embla Medical to become a
full range provider
expanding our reach to a larger part of the global
O&P market including the Emerging Markets,
ultimately reaching more patients.
The majority investment in Streifeneder will also
strengthen
Embla Medical’s
presence
in Germany,
the second largest O&P market in the world.
Streifeneder is estimated
to grow
in line with
the
global prosthetics market
in the
range of
6-8% in
the near-term,
in addition
to realizing
commercial
synergies by leveraging Embla Medical / Össur’s
global footprint.
Key Facts
■
Family-owned business (Bavaria, Germany)
■
Sales of EUR 25m in 2024 (~USD 29m)
■
Employing around 100 people
■
Key player in German O&P market
■
Strong in Prosthetics “value segment”
■
Solid O&P materials offering
Source: Embla Medical
company data
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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23
MARKETS
Leading
the
Future
of Patient Care
INTERVIEW
WITH
Conal Harte
Executive Vice President, Patient Care
while honoring local expertise and heritage.
ForMotion represents a clear promise: access
to the highest standard of care in the industry,
wherever they are.
Q3:
The Patient Care business
delivered a period of lower growth in
2025. Why
do you
think this
is and
how do you
plan to
turn this around?
A:
Our Patient
Care business experienced
lower than
expected growth,
mainly in
some of
our more
mature
markets. This can partly be ascribed to softness and
timing in patient volumes amid
broader uncertainty,
especially in the US. At the same time, 2025 has
been a year of significant internal transformation.
Q1:
You are now 12 months into
your
role
as EVP
Patient
Care.
What
motivated you
to take
on the
role, and
how has your
experience been so
far?
A:
Having worked in the O&P industry since
2004,
I jumped at the opportunity to transition to Patient
Care. The field has evolved significantly in recent
years, and stepping into this role has been both
enlightening and energizing.
I have witnessed tremendous untapped potential
across our organization and am excited about what
we can achieve together as one global team.
Spending time face to face with teams in our clinics
around the world, seeing firsthand their relentless
focus on delivering the best possible care to
their patients, has been the most rewarding and
humbling experience of all.
Q2:
The ForMotion
rebranding
has
been a major initiative in 2025.
What was
the background
for this,
and what does it mean for the
organization and your patients?
A:
From late 2024 and throughout most of 2025,
we introduced a new unified brand identity,
ForMotion, across the majority of our Patient Care
facilities. The goal was to bring our network of O&P
clinics together under one cohesive brand.
Over the past 11 years, we have acquired many
clinics,
each with
its own
unique identity.
While this
individuality
remains important,
the time was
right
to unite
under the
ForMotion
brand and
clearly
articulate what we stand for in Patient Care.
ForMotion
has created
a stronger
sense of
belonging
and connection, transforming us into a truly global
team with a shared global purpose and the power
to impact
global change.
The transition has gone smoothly, credited
to meticulous planning and strong change
management. A key part of the process was
honoring the legacy of each local brand, retaining
what makes it unique while carrying that forward
into the new identity. These conversations were
essential in building local engagement and
identifying champions for the change.
ForMotion brings together some of the world‘s
best O&P clinics under a common purpose,
a shared goal, and a recognizable set of values.
The unified network will deliver comprehensive,
modern, and innovative care to our patients,
Alongside the ForMotion rebranding, we are
undertaking global system integrations to improve
operational efficiency and scalability. While these
initiatives are essential for long-term value creation
and sustainable growth, they have temporarily
impacted
revenue and
profitability.
Returning
Patient
Care to its historical growth levels is a top priority.
We have already launched focused performance
management
initiatives
to unlock
the full
potential
of the business,
and I am
confident that we are
on
the right path.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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24
MARKETS
Growth Markets
INTERVIEW
WITH
Gudjon G. Karason
President Growth Region
Q3:
The situation in Ukraine has
created a
significant humanitarian
challenge. How
can Embla
Medical
help address the unmet need in
a conflict setting?
A:
As a
result
of the
ongoing
war, there
are sadly
thousands of
new amputees
in Ukraine.
Many are
young
and veterans, and we have been encouraged
by the demand for high-end products.
This requires
more funding and more clinical effort, but we see
a willingness from governments and
private donors
to provide support during this difficult time.
As one of the leading players in the industry,
we want to be prepared when the war hopefully
soon comes to an end.
We have recently established
Q1:
Can you describe Embla
Medical’s activities in Emerging
Markets and why these markets
represent a
significant
untapped
opportunity?
A:
Approximately 80% of new amputees globally
live in Emerging Market
countries, yet these markets
still only represent a small share of Embla Medical’s
revenue. A key challenge is limited access to quality
healthcare, often compounded by little or no public
insurance coverage. In many regions, there is also
a lack of established supply chains and clinical
infrastructure, which restricts
patients’ access to
prosthetic care.
Amputees in Emerging Markets are generally
younger and healthier, meaning the potential
benefit of receiving a prosthetic device, is, all else
equal, even greater. We see this as a substantial
opportunity
as
we
establish
a
stronger
presence
in these countries. We are expanding our activities
in existing markets through locally relevant
innovations and offerings, while also selectively
growing our footprint to reach more patients.
Q2:
You have highlighted India as
a Private
Pay opportunity.
Can you
elaborate on this strategic
initiative?
A:
India is now the world’s most populous country
and has
a correspondingly
large amputee
population.
Historically, many of these amputations have largely
been work- or trauma-related, but we are seeing a
shift toward vascular disease as a growing cause.
Despite the high number of
amputations, fitting
rates remain low in many regions, preventing
patients, particularly younger individuals, from
returning to active lives and placing
a significant
burden on society.
Our approach
to unlocking
this potential
focuses
on addressing
three key
barriers:
access,
awareness,
and affordability. We aim to tackle these through
proprietary solutions combined with an agile and
innovative delivery model.
As a first step, we are launching a pilot clinic in
Delhi, taking a selective approach to both patient
groups and solution offerings to maximize positive
impact. While healthcare coverage remains
limited, we believe there is strong potential for
improvement in the near future.
and present with complex
injuries, including multiple
limb loss and
significant nerve damage.
This has led
to
greater than anticipated need
for advanced solutions,
including bionic
technologies.
Today, funding
is available through
a combination
of public sources and donations for both civilians
our first prosthetic clinic in Kyiv and
will continue to
strengthen our presence through clinician training
and education. Over time, we plan to expand our
organization and clinical footprint in Ukraine and
offer our full portfolio of mobility solutions across
a broad range of patient needs.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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25
Emerging Markets at Glance
Emerging Markets represent over 80% of the new amputee volume worldwide. However,
Emerging Markets only make up around 10%
of Embla Medical’s current sales, representing a material growth
contributor with ample room for further growth.
Overview of
the Emerging Markets
Growth Rates
in Emerging
Markets
*Russia not included
*Our Emerging Markets
growth calculation does
not include Russia.
Embla Medical has
taken the decision
not to sell into Russia due to the
ongoing war.
1) Embla Medical Market
Intelligence Reports and
News reports
Addressable Market
in Emerging
Markets
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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26
INNOVATION
Advancing Mobility
Through
Innovation
Our next generation multi-articulating hand
introduces several unique features, and initial user
feedback has been very positive. In addition, our
AeroFit®
liner, built
on proprietary
3D-printed
silicone
technology, significantly reduces humidity build-up
on the skin and
will soon be available
to conventional
socket users.
INTERVIEW
WITH
André Rocha
Executive Vice
President of
Research & Development
Finally, within the growing neuro orthotics space,
we are advancing bionic ankle and knee solutions
with our Fior & Gentz team.
Q3:
Embla Medical is a recognized
innovation leader. How has the
competitive environment
for product
development evolved?
Q4:
Bionics have been quite
transformative for many users.
What do
you see
as the
next major
Q1:
André, you
joined Embla Medical
less than a year ago as EVP R&D.
What attracted you to the role?
A:
Three things stood out. First, Embla Medical’s
mission and strong sense of purpose, making a
meaningful, positive impact on thousands of lives.
Second, the scale of the opportunity ahead. While
Embla Medical has delivered impressive growth,
there remains significant untapped potential to
help
even more people live without limitations.
Finally, the people and culture, particularly within
R&D. I had exposure to the team before joining,
and
their passion for improving mobility, their drive for
continuous improvement, and their warmth and
collaboration impressed me from the outset.
Q2:
Innovation has been a strong
growth driver in
2025. Looking at
the
pipeline, what
excites you
most going
forward?
A:
We have an exciting innovation pipeline.
We recently upgraded the Power Knee™ with
significant improvements, including a new
advanced gait algorithm, Synchronous Control™,
and work on the next release is already underway.
Powered microprocessor knees are the future,
and we are focused on strengthening our
leadership in this category.
We also see an opportunity to better serve the low
active population with a dedicated microprocessor
knee, complementing existing solutions such as
Rheo Knee®, ICON®, and Navii®.
A:
Competition
continues
to
challenge
us,
both established players and new entrants,
which keeps us focused on preserving and
strengthening our innovation leadership. This
requires
optimizing
both
the
effectiveness
and
efficiency of our innovation efforts and ensuring
we invest where we can deliver the greatest
benefit for users.
A share of our investment goes into exploratory
research and technology maturation, which is
essential for long-term leadership. At the same
time, industry-wide challenges, such as the
shortage
of
prosthetists
and
orthotists,
require
us to innovate beyond products, including making
solutions
easier
to
fit,
configure,
and
service,
and
improving
clinical
workflows.
What has not changed is the extent of unmet
need. People with mobility challenges still face
limitations
in
functionality,
comfort,
safety,
and ease of use, and only a small proportion of
amputees globally have access to prosthetic
solutions. Despite progress, there is still much
work to be done.
advances
in mobility
solutions?
A:
Digitalization and AI are already reshaping our
industry, from digital clinic workflows
and AI-based
control algorithms to the use of generative AI to
enhance innovation productivity.
At the same time, bionics still require advances
in actuation and control to achieve seamless
integration with user intent and become
a truly
natural extension of the body.
The quality of the human-device interface is critical,
making innovation in materials and interfaces a key
focus. Össur liners have long been foundational to
our business, with AeroFit® being a
recent example,
and there remains significant opportunity to
innovate in socket design as well.
Neuro orthotics also represent a major growth
opportunity. While awareness
remains low, solutions
for conditions such as stroke, MS,
and cerebral palsy
are clinically effective and life-changing. With the
expertise and solutions at Fior & Gentz, we are well
positioned to lead in this space.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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27
INNOVATION
Product Launches
during 2025
Strong
Intellectual
Property
Portfolio
Navii® by Össur
Icon® by
College Park
Odyssey® iQ
by College
Park
Patient-Driven
Innovation
Embla Medical‘s intellectual property
(IP) strategy
aims to safeguard our investment in innovation,
enhance its value and preserve the competitive
edge the company has gained through the
development of innovative products, processes,
and services.
Navii® is
a fully waterproof
bionic knee
designed
to enhance
mobility,
confidence,
and independence
across all activity levels. It features a powerful
actuator for controlled stair and ramp descent,
effortless swing dynamics, and automatic activity
modes for seamless transitions between walking,
running, cycling, and stair ascent.
Icon® is
a versatile
microprocessor-controlled
knee
for low to high activity users, featuring responsive
sensors,
streamlined
setup, and
the intuitive
Stride
Studio
TM
app.
The Odyssey® iQ is a lightweight,
weatherproof, low
profile microprocessor foot with hydraulic damping,
fast response, and long battery life, supporting
a wide range of users and activities.
Our intellectual property portfolio is strategically
developed to align with our overarching business
strategy and consists of a broad
range of IP assets.
At year-end 2025, the IP portfolio consisted of
around 2,200 patents and patent applications as
well as around 820 trademarks and 560 domain
registrations. According to a 2024 report by the
Icelandic Intellectual Property Office, Össur is
Pro-Flex® LP
Junior by
Össur
AeroFit® by
Össur
Power Knee
TM
by Össur
by far the largest patent holder in Iceland.
Designed for active young
users, the Pro-Flex®
LP
Junior delivers exceptional
ankle range and
power,
enhanced durability and
waterproof performance.
Built with the proven
Pro-Flex three-blade technology
and split toe
design, it promotes a
smooth, natural
gait combined with comfort
and control every
day.
AeroFit® is
a breathable
prosthetic interface system
combining
a vented
socket with
a 3D-printed
silicone
liner to significantly reduce humidity inside the
prosthesis. Excess moisture is a common cause
of discomfort
and skin
issues for
lower-limb.
Power Knee™
controls
have been
updated to
deliver
functional improvements that enhance mobility
and adoption of powered solutions. Synchronous
Control™ provides natural, powered motion that
adapts seamlessly to
each step
at any
walking speed.
Sit-to-stand
assistance
can now
be smoothly
ramped
and tailored to
user preference, while improved
stair
and stumble-recovery functions
deliver more natural
transitions and support when it is needed most.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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28
INTERVIEW
WITH
The Navii® is a fully waterproof bionic knee developed by Össur
featuring a powerful actuator provided to support consistency
for
stair and ramp descent.
Patients using the new Navii solution will enjoy
strong support and
enhanced mobility whether
they are
walking, standing
or descending and
this solution will provide safety and comfort in any terrain.
Juliet Björnsson
Former Global Product Manager, Navii (now with ForMotion)
Helgi Tómas
Hall
VP Global Prosthetics Lower Limb, Embla Medical
Q1:
How do you
work with product
development at Embla Medical?
A:
In the
product development team,
we continously
scan the market
for unmet user needs
and challenges.
This always frames “The Why” behind our new
product development. Our goal is to improve the
user experience while operating sustainable and
profitable business.
Q2:
What specific needs of
above-knee amputees
led to
the
development of Navii?
A:
Above-knee amputees typically have less
muscle
control, which can limit stability and confidence,
particularly in challenging environments such as
stairs, curbes,
and slopes. In
addition, many
existing
solutions have limited water resistance, restricting
participation
in activities
in and around
water. Users
are also increasingly informed and expect greater
personalization,
user-centric
design,
and meaningful
digital engagement. Addressing these needs was
central to the development of Navii.
Q3:
How did Navii address these
needs, and what
feedback have
you
received from users?
A:
With Navii,
our aim was
to deliver a
solution that
removes the need for users to consciously think
about how to
use their device.
We wanted users
to
trust the
knee to
support
them intuitively,
enabling
confident and natural movement.
A key focus
was eliminating
water-related
limitations,
allowing users to participate freely in activities
without planning around water exposure. We also
wanted Navii
to feel
personal,
something
that reflects
their individuality, while expanding the range of
functional exercises to help both prosthetists and
users get the most out of the device.
Ahead of
the external
launch, we
conducted pre-launch
evaluations in
18 countries
with 67
users. The
results
were very encouraging: 80%
of participants preferred
Navii over their
current prescribed device.
Qualitative
feedback highlighted
improved stability
during
standing
and greater
confidence and
security when
walking,
sitting, and navigating
stairs. These insights
reinforce our
excitement about
bringing Navii
to a
broader user
base.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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29
PERFORMANCE
Five-Year
Overview
USD MILLION
2025
2024
2023
2022
2021
Key Ratios
Gross profit margin %
62
63
62
61
63
EBIT margin %
13
13
11
9
14
EBITDA margin %
20
20
18
16
21
EBITDA margin before special items %
20
20
18
18
21
Equity ratio %
52
51
51
48
50
NIBD to EBITDA
2.4
2.4
2.8
3.2
2.4
Effective tax rate %
23
24
23
23
24
Return on equity %
10
9
9
7
11
CAPEX to net sales %
3.4
4.6
5.4
3.6
3.7
Full time equivalent at period end
4,192
4,078
3,999
3,892
3,761
Full time equivalent on average
4,138
4,091
3,945
3,866
3,668
Market
Market value of equity
2,202
2,125
1,713
421
14.0
14.0
2,035
423
10.3
10.3
2,724
423
15.6
15.5
Number of shares in millions
430
428
EPS in US cents
19.6
16.2
Diluted EPS in US cents
19.6
16.2
USD MILLION
2025
2024
2023
2022
2021
Net sales
929
855
786
719
719
Gross profit
579
535
486
440
455
Operating expenses (excl. other income)
454
422
398
373
360
EBITDA
186
169
139
114
149
EBITDA before special items
186
173
139
128
149
EBIT
125
113
89
65
97
Net profit
84
69
59
43
66
Sales Growth
Sales growth USD %
9
9
9
0
14
- Organic growth %
6
6
9
4
10
- Currency effect %
2
0
(1)
(7)
3
-
Acquired business %
1
3
1
3
1
Balance Sheet
Total assets
1,730
1,539
1,386
1,325
1,247
Equity
896
781
705
636
627
Net interest-bearing debt (NIBD)
439
414
395
404
363
Cash Flow
Cash generated by operations
178
160
126
92
128
Free cash flow
100
77
52
35
74
Definitions of key ratios and terms can be found on page 138 in
the notes to the Consolidated Financial Statements.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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30
PERFORMANCE
Performance in 2025
Financial Performance in 2025
■
Sales amounted to USD 929 million where organic growth was 6% and local
currency growth was 7%
including acquisitions.
■
Prosthetics & Neuro Orthotics sales grew by 10% organic, Bracing & Supports
declined
1%, and Patient
Care sales grew by 1% organic. Growth in 2025 was mainly attributed to strong volume
growth and
positive product mix supported by high-end solutions.
■
EMEA and
APAC regions
both demonstrated
strong performance;
especially in
Prosthetics &
Neuro Orthos
supported
by
solid
contribution
of recently
launched
innovation.
Growth
in
Neuro
Orthotics
was
also
good
following an ongoing expansion into multiple new markets.
■
Gross profit
margin was
62%, compared
to 63%
in 2024.
The gross
profit margin
was positively
impacted
by strong
sales in
Prosthetics &
Neuro Orthotics
and efficiency
gains in
manufacturing
but partially
offset
by tariffs, negative FX impact, and initiatives in Patient Care during the year.
■
EBITDA margin was 20%, on par with 2024. The EBITDA margin was negatively
impacted by a lower gross
profit margin, FX, temporary dilution effect from Streifeneder, and initiatives
in Patient Care to strengthen
growth and profitability of the segment. Total impact on EBITDA margin
from these initiatives and other
items amounts to ~1.5%-points in 2025.
■
Net profit grew
by 21% and
amounted to USD
84 million
or 9% of
sales, compared
to 8% of
sales in
2024.
■
Free cash flow amounted to USD 100 million or 11% of sales, compared to 9% of sales
in 2024. The strong
free cash flow generation benefitted from solid operating results and
lower CAPEX compared to 2024.
■
NIBD/EBITDA before special items was 2.4x at the end of 2025, within our target
range of 2-3x EBITDA
in line with our Capital Structure and Capital Allocation Policy.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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31
2026 Outlook
■
Organic sales growth guidance of 5-8%, driven by strong volume growth in the core business with moderate
price increases.
■
EBITDA margin guidance of 20-22%, driven by scale and efficiency coupled with
continued focus on cost
control in SG&A.
Financial Guidance
for 2026
USD MILLION
2025
2024
GUIDANCE 2026
Sales growth, organic
6%
6%
5-8%
EBITDA margin before special items
20%
20%
20-22%*
*Potential impact from US trade tariffs
continues to be an uncertain
element to quantify given the frequent
changes in the global tariff
environment. Consequently,
we deem it too
speculative to quantify
and guide an exact
impact from potential
tariffs on Embla Medical’s
financial
results, but some absorption of tariffs
is assumed in the guidance.
Financial Performance
Sales Performance
Sales in
2025 amounted
to USD 929
million, compared
to USD 855
million in
2024, corresponding
to 6% organic
growth, a 7% increase
including acquisitions (local currency growth) and a
9% reported growth (USD growth).
Impact on
sales from
acquisitions
amounts to
about 1%-point
positive effect
on the reported
growth rate.
Currency movements amounted to impact on reported sales was positive by 2%-point.
Sales by Geographical
Segment
USD MILLION
2025
ORGANIC
GROWTH
Δ ACQ. /
DIV.
Δ CURR.
EFFECT
USD
GROWTH
EMEA
457
8%
2%
5%
16%
Americas
399
2%
0%
0%
1%
APAC
73
11%
0%
(2%)
8%
Total
929
6%
1%
2%
9%
Sales by Business
Segment
USD MILLION
2025
ORGANIC
GROWTH
Δ
ACQ. /
DIV.
Δ CURR.
EFFECT
USD
GROWTH
Prosthetics &
Neuro Orthotics
513
10%
2%
2%
14%
Bracing &
Supports
148
(1%)
0%
1%
0%
Internal product
sales
(39)
0%
0%
2%
1%
External sales
623
8%
2%
2%
11%
Patient Care
306
1%
0%
3%
4%
Total
929
6%
1%
2%
9%
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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32
Business Segments
Prosthetics &
Neuro Orthotics
sales amounted
to USD
513 million
and grew
by 10%
organic in
2025. Bracing
&
Support sales
amounted to
USD 148
million and
declined
by 1%
organic, and Patient Care sales
amounted to
USD
306
million
and
grew
organically
by
1%.
In 2025 we saw
strong growth
in
Prosthetics
&
Neuro
Orthotics driven
by solid
volume growth
and
positive
product mix
supported by
our high-end
solutions.
Throughout the year
EMEA and APAC
contributed
strongly across
product categories,
especially across
Bionics and
Feet solutions
with strong
contribution
from
recent innovations
such as
Navii and
Pro-Flex Terra.
n addition,
Neuro Orthotics
performed well
following
an ongoing
expansion into
multiple new
markets.
Sales in Bracing and Supports came in soft in
2025 with
growth in
select markets
and product
categories, but offset by challenging market
dynamics in other markets.
In Patient Care, we delivered 1% organic growth.
Throughtout most of the year we delivered
modest growth
in Patient
Care, mainly
in Americas
region. The
performance can partly
be ascribed to
softness and timing in patient volumes but also
internal change
initiatives
including the
ForMotion
rebranding,
system
integrations,
and other
initiatives
temporarily impacting the business.
Operations
Gross profit in 2025 amounted to USD 579 million
or 62% of sales, compared to
63% of sales in 2024.
The gross profit margin was positively impacted
by strong sales in P&NO and efficiency gains in
manufacturing but offset by
negative impact from
FX, tariffs, and initiatives related to Patient Care.
Operating Expenses
Operating expenses, excluding
other income,
amounted to USD
454 million or 49%
of sales in
2025,
same as in 2024.
Throughout 2025, we continued
to see positive effects from effective cost control in
SG&A but operating expenses were
also negatively
impacted by initiatives
related to Patient
Care.
EBITDA
EBITDA amounted to USD 186 million or 20% of
sales, compared to EBITDA before special items of
USD 173 million or 20% of sales in 2024. The EBITDA
margin decreased
due to FX,
tariffs, slight
temporary
dilutive impact from the acquisition of Streifeneder,
and costs
related to
initiatives
to enhance
the growth
and profitability of Patient Care. These initiatives
include restructuring costs in the form of
severance,
ForMotion rebranding, and
system implementations
impacting both COGS and OPEX. Total impact on
EBITDA margin from these initiatives in Patient Care
and other items amounts to ~1.5%-points in 2025.
Negative impact from currency movements on the
EBITDA
margin amounted
to approximately
30 basis
points in 2025 when compared to 2024.
Financial
Items,
Income
Tax and
Net Profit
Net financial expenses in 2025 amounted
to USD 24
million, compared to USD 26 million in 2024. Lower
net financial expenses can be attributed to lower
financial expenses following a period with lower
interest rates.
Income tax amounted to USD 24 million in 2025,
corresponding
to a
23% effective
tax rate,
compared
to USD 22 million or 24% effective tax rate in 2024.
Net profit in 2025 increased by 21% and amounted
to USD 84 million or 9% of sales, compared to USD
69 million or 8% of sales in 2024. Net profit was
positively impacted by strong operating results and
net
financial
expenses.
Diluted
earnings
per
share
in 2025 amounted to 19.6 US cents, compared to
16.2 in 2024.
Cash Flow
Cash generated by
operations amounted to
USD 178
million or 19%
of sales
in 2025,
compared to USD
160
million or 19% of sales in 2024.
Capital expenditures (CAPEX) amounted to USD
32 million or
3% of sales
in 2025 compared to
USD
39 million or 5% of sales in 2024. CAPEX in 2025
returned
to a
normalized
level around
3% following
closure of
facility
expansion
programs
carried out
in
2024 to support growth.
Free cash flow
in 2025 amounted
to USD 100
million
or 11%
of sales,
compared to USD
77 million or
9% of
sales in
2024. Free
cash flow
was positively
impacted
by strong operating results and lower CAPEX
compared o 2024.
Bank balances and cash equivalents amounted to
USD 103
million at
year-end
2025 and
USD 114
million
of existing facilities were undrawn. Bank balances
and cash equivalents in addition to undrawn credit
facilities at the end of 2025,
therefore, amounted to
USD 217 million.
Capital Structure
Net Interest-Bearing
Debt
Net interest-bearing
debt, including
lease
liabilities,
amounted to USD 439 million at year-end 2025,
compared to USD 414 million at year-end 2024.
Net interest-bearing
debt to EBITDA corresponded
to 2.4x at year-end 2025, which
is within the target
range of 2.0-3.0x.
Share Buybacks
and Dividends
The purpose of the share buyback program is to
reduce the Company’s share capital and adjust
the capital
structure with
a desired
capital level
of
2.0-3.0x net
interest-bearing
debt to
EBITDA before
special
items, by
distributing
capital to
shareholders
in line with the Company’s Capital Structure and
Capital Allocation Policy.
During 2025, Embla Medical carried out a Share
Buyback program
acquiring
1,987,027
at an average
price of
DKK 32.00.
Following
the completion
of the
program Embla Medical hold 2,673,596 treasury
shares, corresponding to 0.62% of the Company‘s
total share capital.
A new
Share Buyback
program for
2026 was
announced 23 December 2025.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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33
PERFORMANCE
Guidance For 2026
GUIDANCE
GUIDANCE FY
2026
ACTUAL FY
2025
Sales growth, organic
5-8%
6%
EBITDA margin before special items
20-22%
20%
For Modeling Purposes
CAPEX as % of sales
3-4%
3%
Effective tax rate
23-24%
23%
For 2026 organic sales growth is
expected to be in the range
of 5-8%. We anticipate continued
strong momentum
in our Prosthetics &
Neuro Orthotics business across
regions supported by solid
contributions from our fast-growing
bionic portfolio and recently launched
innovations in addition to upcoming
launches in 2026. Some positive
impact
from the US Medicare Coverage
Expansion is also expected to
contribute to sales supported by
our existing portfolio
of microprocessor knee (MPK) solutions, which in
the future will be complemented by a dedicated K2 MPK
solution
to better
serve the
least mobile
users in
the low
active K2
patient
population.
In Neuro Orthotics we expect to see the increasing effects from the ongoing
roll out of our Neuro Orthotics
offerings (Fior & Gentz) into new markets leveraging our global commercial
infrastructure and ForMotion
footprint within O&P Clinics. Albeit growing from a low base we expect to see solid growth in the
EMEA region
with some contributions expected in Americas during the course of 2026 as we prepare ramp-up for a broader
launch of our first bionic knee joint “NEURO HiTRONIC MPKAFO”, which received
a reimbursement code last
summer in the important US market.
In Patient Care, we
expect growth to gradually improve
during 2026 with the
aim of eventually returning
to
consistent
sales performance
in line with
market. Growth
in 2026 is
expected to
be driven
by volume
growth,
increased efficiency supported
by effects
from the
initiatives implemented across
our Patient
Care business
in the second half of
2025. Focus will be on
strengthening growth and profitability and benefiting from the
structural growth in the O&P industry our product business has observed in recent periods.
Lastly, Bracing
& Supports
is expected
to grow
approximately
in line with
market growth.
We assume
solid
growth in selected key regions supported by
expected launches of new product categories but also
with
continued competitive pressure in selected markets.
EBITDA margin
is expected
in the range
of 20-22%
for 2026
compared to
20% in 2025.
The EBITDA
margin
is expected
to be positively
impacted by
solid sales
performance,
a favorable
product mix
from increased
sales
of our
high-end solutions, continued
efficiency gains in
manufacturing, increasing profitability
in Patient Care,
and cost control in SG&A.
At current
foreign exchange
rates, keeping
all other
factors constant,
the EBITDA
margin is
expected to
be
negatively impacted by about 30 basis points in 2026 when compared to 2025.
Foreign
Exchange
Sales
are particularly
exposed
to fluctuations
in the
EUR/USD
exchange
rate. Additionally,
the ISK
has a
relatively
high impact on operating
results as part of
manufacturing, R&D and some
corporate functions are based
in Iceland,
while sales
in ISK are
minimal. A
breakdown of
sales and
costs by
main currencies
can be found
in note
4 of the
accompanying
Condensed Consolidated
Financial Statements.
All else being equal, a +/- 5% movement in EUR/USD is estimated to have an
annual impact on EBITDA in
the range of +/- USD 3.5-4.5 million when unhedged. The same movement in ISK/USD is estimated to have
an annual impact on EBITDA in the range of +/- USD 4.0-5.0 million when unhedged. Embla Medical utilizes
forward contracts to hedge approximately 50% of the estimated
net currency exposure to ISK.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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34
GOVERNANCE
Shareholder Information
Embla Medical is a large cap company that has been listed on the Nasdaq Copenhagen
since 2009
and prior to that on Nasdaq Iceland since 1999.
At year-end 2025, the share capital of Embla Medical was 430,441,257 nominal
value, divided into
the same number of shares. There is only one class of shares, and all shares carry one
vote, besides
treasury shares that do not carry voting rights.
Key Information Table
Market
Nasdaq Copenhagen
ISIN
IS0000000040
Ticker
EMBLA
Industry
Healthcare
No. of Shares
430,441,257
Ownership Structure
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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35
Embla Medical’s largest shareholder is
William Demant
Invest A/S (WDI) which held 50.95% of the total shares
and 50.95%
of the
voting rights
at year-end
2025.
WDI has been a shareholder in Embla Medical
(previously Össur) since 2004. In an announcement
from WDI on 4 January 2018, when their ownership
in Embla Medical crossed the 50% threshold, it was
stated that the intention was to hold 50-60% of
Embla Medical’s shares going forward. Apart from
Embla Medical, the fund’s investment activities
include holdings in Demant, a leading provider of
hearing
aids, as
well as
Vision RT,
Vitrolife,
CellaVision,
Revenio, Jeudan, INVISIO, GN Store Nord and Pleo.
At year-end
2025, the
following
shareholders
had
announced holdings above 5% to the company.
Shareholders
- Geographical
Distribution
Share Performance
Embla Medical’s share price decreased by 9% in 2025, from DKK 35.6 per share at year-end 2024 to
DKK 32.50
per share at year-end 2025. Embla Medical’s market capitalization was
DKK 14 billion (USD 2.2 billion) at year-
end 2025 compared to DKK 15.3 billion (USD 2.1 billion) at year-end 2024.
Share Performance
(Indexed)
120
100
80
60
40
20
0
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Jul-25
Aug-25
Sep-25
Oct-25
Nov-25
Dec-25
Major Shareholders
The following
shareholders
have announced
holdings above
5% to the
company:
INVESTOR
TYPE
COUNTRY
THRESHOLD
CROSSED
William Demant Invest
Investment Fund
Denmark
50%
Inter Long Term Capital
S.A.
Investment Fund
Luxembourg
10%
ATP
Pension Fund
Denmark
5%
Lífeyrissjóður verzlunarmanna
Pension Fund
Iceland
5%
Embla Medical
OMX C25 GI
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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36
Capital Allocation
With emphasis on growth opportunities, value-
adding
investment
opportunities
and acquisitions,
Embla Medical decided to discontinue dividend
payments in 2022 and instead focus on
returning
excess capital
to shareholders
via purchase
of own
shares. This is
in accordance with
Embla Medical‘s
Capital Structure and Capital Allocation Policy
approved by the Board of Directors in 2022.
In February 2025, Embla Medical initiated a new
share buyback program allowing the company to
purchase
up to
2 million
shares under
the assumption
that the
total consideration for
the shares
purchased
would not exceed USD 10 million.
The program was completed December 23,
2025
with 1,987,027 shares being purchased at a total
consideration
of USD
9.96 million.
A new
program
was started in January 2026.
At year-end
2025, Embla
Medical‘s
treasury
shares
totaled 2,673,596.
Since
2013, when
Embla
Medical
started returning capital to
shareholders, we have paid out
total of USD 245 million.
Annual General Meeting
Embla Medical’s
2026 Annual
General Meeting
will be
held on
10 March
2026. The
meeting
is convened
with
at least
three weeks’ notice.
The AGM
results are
sent
to the news
system of Nasdaq
immediately following
the meeting and are also available on the
company’s
website
.
Analyst coverage
2025/2026
Names and analyst details of the financial institutions that publish equity research reports on
Embla Medical.
COMPANY
ANALYST
EMAIL
COUNTRY
ABG Sundal Collier
Morten Larsen
morten.larsen@abgsc.dk
Denmark
Danske Bank
Tobias Nissen
tonis@danskebank.dk
Denmark
Nordea
Martin Brenøe
martin.brenoe@nordea.com
Denmark
SEB
Yiwei Zhou
yiwei.zhou@seb.dk
Denmark
DNB Carnegie
Jesper Ingildsen
jesper.ingildsen@dnbcarnegie.co.uk
UK / Denmark
Økonomisk Ugebrev
Steen Albrechtsen
sa@ugebrev.dk
Denmark
Intron Health Research
Naresh Chouhan
naresh@intronhealthresearch.com
UK
Berenberg
Beatrice Fairbairn
beatrice.fairbairn@berenberg.com
UK
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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37
Financial Calendar
Contact Investor
Relations
and Corporate Communications
Investor Relations
Embla Medical‘s policy is to disclose financial and
corporate information to
provide investors, analysts,
and other stakeholders with comprehensive and
accurate
information
to help
them understand
Embla
Medical‘s current and expected developments.
Klaus Sindahl
Head of
Investor Relations
E
ksindahl@emblamedical.com
M
+45 536 30134
Financial
reports,
announcements,
presentations,
the financial calendar, upcoming events, share
information, and other information
can be found
on the
company’s website
.
Q1 2026
Q2 2026
Q3 2026
Q4 2026
Annual General Meeting
10 March 2026
Interim Report Q2
21 July 2026
Interim Report Q3
20 October 2026
Interim Report Q4
and Annual Report 2026
2 February 2027
Interim Report Q1
28 April 2026
Edda H. Geirsdóttir
VP Corporate
Communications
E
egeirsdottir@emblamedical.com
M
+354 664 1055
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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38
GOVERNANCE
Corporate Governance
At each Annual General
Meeting the Shareholders:
■
Confirm the
Consolidated Financial
Statements and decide on the
distribution of the net profit.
■
Approve the Remuneration Policy.
■
Decide on the
remuneration for the
Board of Directors.
■
Elect the Board of Directors.
■
Elect an auditor.
Other
resolutions
are
made on
an ad-hoc
basis, such
as:
■
Amendments to
the Articles
of Association:
–
Capital reductions.
–
Authorizations
for the Board
of Directors to
increase the
share
capital.
■
Authorizations to the
Board
of Directors:
–
Purchase own shares.
–
Initiate share
buyback programs.
Organizational
Structure
According to the Articles of Association,
Embla Medical is managed by
Shareholders’
Meetings,
the Board
of Directors
(the Board),
and the
Chief Executive
Officer (CEO).
Their roles
and responsibilities
are described
in this chapter.
Shareholders’
Meetings
The supreme authority
in Embla Medical’s
affairs
is in the hands
of lawful Shareholders’ Meetings,
within the limits provided for in the Articles
of Association
and law.
Resolutions at Shareholders’ Meetings generally
require a simple majority. However, resolutions to
amend the Articles of Association generally require
two-thirds
of the
votes cast
and capital
represented.
Minutes
of Shareholders’
Meeting
are available
on our website.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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39
Annual General Meeting
March Meeting
Election of
Chair and
Vice Chair
Appointment of
the
Audit Committee
Review of Internal
Rules
Board of Directors
The Board of Directors is the supreme authority
in Embla
Medical’s
affairs
between
Shareholders’
Meetings.
The Board
shall operate
in accordance
with
the Articles of Association and the Board’s Rules
of Procedure.
The Board of Directors’ work, role and
responsibilities are further described in the
Board’s
Rules of Procedure, which are reviewed annually
by the Board and updated as necessary.
The Board’s
Rules of
Procedure
are available
on our website.
The Board of Directors is composed of
six members,
all elected
by the
Shareholders
at the
Annual General
Meeting for a term of one year. The Board shall
be represented by at least 40% of each gender.
Currently,
the Board
consists
of three
men and
three
women. Several
Board members have
long-standing
tenure, providing continuity and deep insight into
Embla Medical’s business and
markets. Three Board
Members
are considered
independent
in accordance
with the Danish Recommendations on Corporate
Governance.
The Chair and Vice Chair of the Board of Directors
are elected annually following the Annual General
Meeting. The Chair’s primary responsibility is to
ensure that the Board performs its duties in an
orderly and efficient manner.
In the absence of
the
Chair,
the Vice
Chair assumes
these responsibilities.
Niels Jacobsen has served as
the Chair since 2006,
and Svafa Grönfeldt has served as Vice Chair
since 2021.
Further
information
on the
Board of
Directors
is
available on our website.
The Board of Directors’
Annual Schedule
Quarter 1
Quarter 2
Quarter 3
Quarter 4
February Meeting
Full-year results
Corporate Governance
Statement
Capital Structure
and
Capital Allocation
Policy
Agenda for the Annual
General Meeting
April Meeting
Quarterly results
July Meeting
Half-year results
October Meeting
Quarterly results
September Meeting
Strategy
December Meeting
Strategy and forecast
Performance
evaluation
The Board
has various
roles
and responsibilities:
■
Establish goals for Embla
Medical and
formulate the policy and strategy to
achieve those goals.
■
Hire a CEO to manage the daily
operations, supervise activities
and ensure that Embla Medical’s
organization and operations
are in
proper order.
■
Ensure adequate surveillance
of the
accounting and financial
management.
■
Evaluate the capital structure.
■
Evaluate the performance
of the
Board and the CEO.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
40
Audit Committee
The Audit Committee’s main objective is to
ensure a
competent and independent audit
of Embla Medical
and supervise the internal control system and risk
management.
The Audit
Committee’s
responsibilities
are further described in the Audit Committee’s
Terms of Reference, which are reviewed annually by
the Board of Directors and updated as necessary.
The Audit
Committee’s
Terms of
Reference
are
available on our website.
The Audit
Committee is
composed of
three Board
members. The majority of the Audit Committee
shall be
independent
of Embla
Medical,
the CEO
and the Auditor.
Audit Committee members shall possess the
knowledge and expertise needed to perform the
tasks of the Audit Committee. At least one Audit
Committee
member shall
have solid
knowledge
and
experience in the field of financial statements or
auditing. Arne Boye Nielsen
has served as
the Chair
of the Audit Committee since 2012.
Further
information
on the
Audit
Committee
is available on our website.
The Audit Committee’s Annual Schedule
The Audit Committee has various roles and responsibilities:
■
Ensure a competent and independent audit.
■
Monitor and assess Embla Medical’s
■
Submit proposals to the Board on the
internal control systems
and enterprise risk
nomination of an auditor candidate at the
management systems and perform other
Annual General Meeting.
related tasks and duties.
■
Submit proposals to the Board on an
■
Monitor
the financial
and sustainability
agreement with the Auditor, containing e.g.
reporting process and make
provisions on the audit fees as well as the
recommendations
or proposals
for securing
general scope of the Auditor’s non-audit
integrity.
This includes
reporting
to the
Board
services.
on significant
accounting policies, significant
accounting estimates, related
party
■
Monitor and evaluate the Auditor’s work,
transactions and uncertainties and risks,
including statutory audit of the financial
including in relation to the outlook, prior to
statements and annual report, taking into
the Board’s
approval
of financial
statements.
consideration the results of the most recent
quality control.
■
Assess the need for an internal audit
function taking into consideration the
■
Report to the Board the results of the
scale and complexity of Embla Medical’s
statutory audit and the sustainability
activities, risk
factors and
cost /
benefit
reporting, including the financial and
considerations.
sustainability reporting process.
■
Monitor Embla Medical’s Speak-Up Line.
■
Monitor the progress made on sustainability
targets and report the result to the Board.
■
Monitor Embla Medical’s Tax Policy.
The Audit Committee Meetings
AUDIT COMMITEE
MEMBER
MEETINGS
ATTENDED
Arne Boye Nielsen, Chair
Alberto Esquenazi
Caroline Vagner Rosenstand
Quarter 1
Quarter 2
Quarter 3
Quarter 4
February Meeting
Audit report
(presented
by the
Auditors)
Review of
Q4 and
full
year results
Related
party
transactions
Internal
Control
and
Risk Management
update
Report
on external
lending
ESG/CSRD reporting
update
Election of the
Chair
Annual
Schedule
Review of Q1
results
Related
party
transactions
Internal
Control
and
Risk Management
update
Status
of entities
integration
and systems
implementation
ESG/CSRD reporting
update
Audit plan
and fees
for the coming
year
(presented by the
Auditors)
Review of Q2
results
Related
party
transactions
Internal
Control
and
Risk Management
update
Report
on external
lending
ESG/CSRD reporting
update
October Meeting
Report on valuation
methods on significant
accounting estimates
Review of
Q3 results
Related
party
transactions
Internal Control and
Risk
Management update
Status of entities
integration and systems
implementation
ESG/CSRD reporting
update
Tax update
December Meeting
Meeting with the
Auditors (including
private session)
Report on Internal
Controls and Enterprise
Risk Management
Double Materiality
Assessment results
Security update
Speak-Up Line status
Assessment of the
need
for an internal audit
Financial forecast
assumptions and risk
Proposal to
the Board
on
nomination of auditors
and auditors’ agreement
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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41
Nomination Committee
A Nomination Committee was established in 2022. The Nomination Committee’s
main objective is to prepare
recommendations to the Board in relation to the composition, development,
and succession of the Board.
The Nomination Committee’s responsibilities are further described in the
Nomination Committee’s Terms
of Reference, which are reviewed annually by the Board of Directors
and updated as necessary.
The
Nomination Committee
Terms of
Reference
are available
on our
website.
The Nomination Committee
is composed of
the Chair of
the Board and
the Chair of
the Audit Committee.
Remuneration Committee
A Remuneration Committee was established in
2022. The Remuneration Committee’s main objective is to
prepare recommendations to the Board
in relation to the
remuneration policy and remuneration for
the Board,
the CEO,
and the
Executive Management. The
Remuneration Committee’s responsibilities are
further described
in the
Remuneration
Committee’s
Terms of
Reference,
which are
reviewed annually
by the
Board of
Directors
and
updated as necessary. The
Remuneration Committee’s Terms of
Reference
are available on our
website.
The Remuneration
Committee is composed
of the
Chair of
the Board and
the Chair
of the
Audit Committee.
Board Performance
Evaluation
The Board of Directors conducts a performance evaluation each year. The
Chair oversees the evaluation
process and proposes actions to be taken, if any. The Chair seeks external
assistance at least every three
years. The Board performance evaluation for 2025 was discussed by the Board
in December 2025.
The topics
discussed included
the following:
■
Size and composition of the Board
■
Board collaboration and the Chair’s leadership
■
Board meetings and Board material
■
Board responsibilities and focus areas
■
The Executive Management’s performance and collaboration with the Board
The main
conclusion
of the performance
evaluation for
2025 was
that the
Board performs
at a high
level and
contributes to Embla Medical’s growth and value creation.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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42
Chief
Executive
Officer
The CEO
is responsible
for Embla
Medical’s
daily
operations and is obliged to follow the Board
of Directors’ policy and directions, within the limits
provided for by the Articles of Association and law.
The daily
operations
do not
include
measures that
are
unusual or
extraordinary,
which may
generally
only be
taken if specially authorized by the Board.
The CEO
is not
a Board
member, but
shall attend
Board Meetings and has the right to participate
in discussions
and put forward
proposals, unless
otherwise decided
by the Board
in specific
instances.
The Board of Directors evaluates the CEO’s
performance
each year.
Subsequently,
the Chair
of the
Board and
the CEO
have a
meeting to
discuss
the results of the evaluation and the actions to be
taken, if any.
Executive
Management
Embla Medical also has a wider Executive
Management
consisting
of the
CEO, the
CFO and
Executive Vice Presidents.
The Executive Management generally meets every
week and collectively prepares and implements
Embla Medical’s strategic plans. The CEO is
responsible
for the
work and
results
of the
Executive
Management.
The CEO evaluates the performance of other
members of the Executive Management each year
and discusses
the results
of the
evaluation
with each
member and the actions to be taken, if any.
Further
information
on the
Executive
Management
is available on our website.
Remuneration
of
the
Board of Directors
and the Executive
Management
At Embla Medical’s Annual General Meeting on
12 March 2025, the shareholders approved a
Remuneration Policy, which applies to
the Board
of Directors, the CEO and other
members of the
Executive
Management.
The Remuneration
Policy
was prepared
by the
Remuneration
Committee
and
approved by the Board of Directors without any
amendments. The
Remuneration Policy
is available
on our website.
Information on the remuneration of the Board
of Directors, the CEO and other members of
the Executive Management
can be
found in
the
Remuneration
Report
, available
on our website.
Recommendations
for
Corporate Governance
Embla Medical
follows the
Danish Recommendations
for Corporate Governance issued on 2 December
2020 by the Danish Committee on Corporate
Governance, which are
available on the
Committee’s
website
. The
Recommendations
are the
best practice
guidelines for companies admitted to trading on
a regulated
market in
Denmark.
Each year, the Board of Directors evaluates and
decides
to what
extent Embla
Medical
should comply
with the Recommendations and consequently,
whether relevant
rules, policies
and processes
should
be adopted or updated.
In general, the Board of Directors shares the
Committee’s
views on
corporate
governance
and,
accordingly, Embla Medical complies with most
of the recommendations. In the
few cases where
Embla Medical
deviates from
the Recommendations,
the “comply or explain” principle is applied, and
well-founded explanations
are provided on why
the relevant
recommendation
is not considered
appropriate or desirable for Embla Medical.
Embla Medical’s
Corporate
Governance
Report
is approved by the Board of Directors. The Report
includes
both the
statutory
statement
on corporate
governance as well as comments and information
on each item in the Recommendations.
The
Corporate
Governance
Report
is available
on our website.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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43
GOVERNANCE
Risk Management
Key Risks
An investment in Embla Medical shares involves
various risks such as business, financial conditions,
and operational results, and could be negatively
affected if any of the factors described in this
chapter occur. Even though the long-term
prospects and underlying fundamental drivers
of the markets
where Embla
Medical operates
are
not expected to
change, Embla
Medical highlights
key risks
which are
currently considered
the most
relevant to the Company.
Embla Medical cannot ensure that the given
assumptions for the description of any of these
risks are
correct.
Additional
risks and
uncertainties,
as well
as risks
that Embla
Medical currently
deems
immaterial or are not presently known to us, may
adversely
affect Embla
Medical’s
business,
financial
conditions, and operational results.
I.
Reimbursement Landscape
Description
Most of Embla Medical’s products and services are
reimbursed by third-party payers, including both
government
healthcare
programs
and private
health
insurance plans. Third-party payers continue to
develop methods of controlling healthcare costs,
including reviews of claims, selective contracting,
and competitive bidding. Our business depends
on understanding and adapting to reimbursement
and insurance
plans in
all markets
where we
conduct
our business.
Potential Impact
These
cost-control
methods
may
limit
or
even
eliminate the coverage and the amount of payment
for which third-party payers may be willing
to pay
for Embla Medical’s products and services.
As a result, customers may reduce or eliminate
purchases and sales may decline significantly.
Reviews of claims may lead to repayment of prior
sales. Finally, failing to understand and adapt to
changes in reimbursement systems may affect
Embla Medical’s license to operate and
thus affect
our sales.
Mitigative Actions
Embla Medical only brings products and services
to the market that address medical indications,
and which are clinically validated. In addition,
we apply our reimbursement knowledge from
the
earliest
stages
of
product
development
to the post-sale education of customers.
Finally, we monitor and analyze changes to the
reimbursement
landscape
in
the
markets
where
we operate and adapt our reimbursement strategy
accordingly.
II.
Regulatory Requirements
Description
Embla Medical’s products and services are subject
to global and local regulations. Such regulations can
restrict practically all aspects of a medical device’s
design and testing, manufacturing, safety, labeling,
storage, record-keeping, reporting, clearance and
approval, promotion, distribution, and services.
In our interactions with government officials,
healthcare professionals, and
business partners,
we must comply with
relevant third-party regulatory
requirements. Finally, our footprint is growing in
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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44
new emerging markets which
are characterized
by complex regulations, business volatility and
unpredictability.
Potential Impact
Failure to comply with
the regulatory requirements
of the applicable authority may subject Embla
Medical to fines, penalties, sanctions, or product
withdrawals. If the Company would fail to receive
regulatory clearance and approval for the
products
and services it could adversely affect sales and
potential for future growth, threaten Embla
Medical’s license to operate in the respective
market, and affect the brand and reputation.
Mitigative Actions
Embla Medical maintains a robust global quality
system that complies with international medical
device standards, and which forms an intrinsic
part of internal processes. Embla Medical also
has a regulatory
compliance program, including a
Code of Conduct,
under which employees identify,
assess, manage, and report potential risks from
international and local regulations in the countries
where we market and sell our products and
services. Finally, tracking and analyzing regulatory
requirements of new markets forms a part of our
market access strategy.
III.
Insufficient
Innovation
and
Technology Obsolescence
Description
Embla Medical operates in markets where
technological development is ongoing and driven
by research. Technological innovation takes place
at various
stages in
our value
chain and
may include
individual components, design, and functionalities
of our products and services.
Potential Impact
The development
by suppliers
or competitors
of
substitute products or
components that better
satisfy market demands could have a material
adverse effect on Embla Medical’s business and
results
of operations.
A failure
to identify
and adopt
technologies
could cause
technological
gap, limiting
our ability to compete in specific markets and
impacting revenue growth.
Mitigative Actions
Embla Medical’s significant investment in research
and development and constant strive for finding
innovative technologies, has resulted in a vast
intellectual property portfolio and a strong position
to compete with potential new entries. External
connections
with universities,
research
institutes
and
investors provide us with the opportunity to stay
informed and review emerging innovation as part
of acquisitions
or research
cooperation
initiatives.
IV.
Industry Consolidation,
Forward
Integration, and Acquisitions
Description
Major shifts in
Embla Medical’s marketplace include
the consolidation
of orthotics
and prosthetics
(O&P)
manufacturers and forward integration, which
involves acquiring service providers in the O&P
industry. It
remains uncertain to
what degree we
will
be able
to participate
in manufacturer
consolidation,
forward integration or other acquisition
opportunities and how it will affect our operations.
Industry consolidation, forward integration, and
acquisitions can lead to increased challenges and
complexity, while our success depends in part on
our ability to effectively operate in this changing
marketplace.
Potential Impact
The consolidation has been a
material contributor
to the external growth of Embla Medical in the
past. Acquisitions
also play
a key
role in
our growth
and market expansion but come with risks such
as operational impact, integration
challenges,
and unmet
strategic objectives. If
we were
not
to participate
in further
consolidation,
forward
integration
or strategic
acquisitions,
it might
limit our
potential
for future
growth. In
addition,
these market
trends may impact
the competitive landscape of
the
industries and the associated market
shares. Finally,
these changes in the marketplace may impact our
customers and patients,
and interactions with
them.
Mitigative Actions
It is at the core
of our strategy to operate effectively
in this changing marketplace. Embla Medical
continuously reviews value enhancing acquisitions
and investment opportunities in our business
segments and keeps a good relationship with the
relevant stakeholders in the industry. By enhancing
acquisition and integration practices, we aim to
reduce risks and maximize the value of
acquisitions.
We operate our own clinics in certain regions and
have partnership programs in place with healthcare
providers to offer customers quality products and
services in the interest of our end-users. These
measures collectively support Embla Medical’s
ability to navigate market shifts and capitalize on
growth opportunities.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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45
V.
IT Systems, Cybersecurity,
and
AI-driven
Digital
Disruption
Description
Embla Medical
is exposed
to risks
related to
critical
IT systems, cybersecurity threats, and emerging
technologies,
including
Artificial
Intelligence,
which
are increasingly embedded in business processes.
Potential Impact
System outages, cyberattacks, or failures in digital
tools
or AI-driven
processes
could disrupt
operations,
compromise data, affect decision-making, and
adversely impact financial performance and
stakeholder trust.
Mitigative Actions
Embla Medical maintains an information security
framework aligned with ISO 27001, enhances
cybersecurity
controls,
follows
a cloud-first
approach
to strengthen
resilience, and continues
to mature
its
business continuity planning and governance over
emerging technologies, including AI.
VI.
Geopolitical Tensions
and
Macroeconomic Conditions
Description
Embla Medical is exposed to geopolitical
developments,
trade restrictions,
sanctions
regimes,
and macroeconomic volatility.
Potential Impact
Such developments
may disrupt
supply chains,
affect
cost structures, create compliance complexities,
or influence
strategic
decisions
and market
conditions.
Mitigative Actions
Embla Medical monitors
geopolitical and economic
developments,
assesses
exposure
within the
supply
chain, applies scenario planning, and incorporates
macroeconomic considerations into strategic and
operational planning.
VII.
Supplier
Dependency
Description
Embla Medical is
exposed to risks
related to
dependency on selected
suppliers of critical
components,
equipment and
raw materials.
Potential Impact
Disruptions
such as
delayed deliveries,
quality
issues,
or supplier insolvency could impede production,
increase costs, or negatively affect the availability
of products.
Mitigative Actions
Embla Medical conducts regular audits of key
suppliers,
maintains
safety stock
where appropriate,
applies structured onboarding and performance
monitoring,
and evaluates
alternative
supply
options
to safeguard business continuity.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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46
GOVERNANCE
Taxation
Our
Responsibility
Towards Taxation
Taxation is an integrated part of Embla Medical’s
business. We apply the same core values and
committment to the UN Sustainable Development
Goals when determining our global tax footprint,
acknowledging that being
a sustainable, responsible,
and compliant
taxpayer is
part of
our corporate
social
responsibility.
Embla Medical’s approach to
taxation
is guided
by the
following
principles:
Compliance and
Transparency
Embla Medical
complies with
local legislation
and
international
regulations,
both in
letter and
spirit,
guided by prudence and transparency. We are
committed to the
payment and remittance of
all
relevant domestic and foreign taxes and adhering
to transactional and periodical filing obligations
accurately,
in good
faith,
and on
time. We
recognize
the importance of technology in ensuring the
accuracy and reliability of our tax processes, tax
reporting and tax compliance obligations. Embla
Medical is part of the William Demant Invest A/S
consolidated group and
reports under Country-by-
Country Reporting requirements and the OECD
Global Anti-Base Erosion Model Rules (referred to
as Pillar Two). We respond to any enquiries from
authorities and provide information to external
stakeholders on our approach to taxation, annual
tax payments, and tax position in a timely and
transparent manner.
Business Driven
Approach
In managing our
tax affairs, Embla
Medical acts
responsibly, with commercial considerations
driving
our business
structure
in alignment
with
our business activities and ensuring genuine
operational substance. We do not engage in
artificial
or aggressive
tax planning
for transactions
and investments. Embla Medical does not have
operations in so-called tax havens. We operate
in accordance with the OECD Transfer Pricing
Guidelines (arm’s length principle) to ensure a
fair allocation
of revenue
and tax
payments
in the
countries where value is created and economic
activities take place.
Tax Incentives
When applying for tax credits, Embla Medical
ensures compliance with both business and
applicable legislative requirements, using such
incentives in the manner intended by the granting
authorities.
We have
been granted
two tax
incentives
for research and development activities in Iceland
(Össur) and the United Kingdom (Touch Bionics).
Governance
Embla Medical’s
Tax Policy
is the
responsibility
of
the Board
of Directors,
and assigned
to the Chief
Financial Officer, supported by an in-house Global
Tax team and external experts. These functions
advise and guide the business on the potential tax
implications
of commercial,
organizational,
business
and investment or divestment decisions. The Tax
Policy applies to all entities within Embla Medical.
Managing Tax
Risks
Embla Medical manages its
tax affairs responsibly
to protect its assets and reputation and
as an
integral part of
our Risk Management
Framework.
This includes continuous
monitoring of
legislative
developments in the
countries in which
we operate to:
■
Ensure compliance with tax law and regulations.
■
Ensure transparency regarding tax planning
and
contributions to society.
■
Minimize the unforeseen tax impacts arising
from
regulatory changes or new business initiatives.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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47
GOVERNANCE
Board of Directors
Niels Jacobsen
Chair of the Board of Directors
Born in 1957
Member of the Board of
Directors since 2005
Education
■
Master of Science
(MSc) degree
in Economic and
Business
Administration from the University of
Aarhus in Denmark
Board positions
■
Thomas B. Thrige Foundation,
Chair
■
Central Board of the Confederation of Danish Industry, Board member
■
The Board of
the Employers of
Industry (IAD,
under the
Confederation of Danish Industry), Board
member
Additional duties related
to William Demant
Invest A/S
■
Demant A/S, Deputy Chair
■
Jeudan A/S, Chair
■
Vision RT Ltd, Chair
Experience
Niels Jacobsen has extensive leadership
experience from major
international companies. His competencies
include business
management and in-depth knowledge
of financial matters,
accounting, risk management and
M&A. He has broad experience
from the global
healthcare industry.
He is currently
CEO of William
Demant Invest A/S and prior to that
he was President & CEO of
Demant A/S (formerly William Demant
Holding A/S).
Shares held in Embla
Medical
203,330 (incl. related
parties).
Niels holds no share options
in Embla Medical.
Other
Niels has no interest links with Embla
Medical’s main clients or
competitors. Niels is a dependent
member of the Board as he
represents the
interest of
Embla Medical’s
controlling shareholder,
William Demant Invest A/S.
Dr. Svafa Grönfeldt
Vice Chair of the Board of Directors
Born in 1965
Member of the Board of
Directors since 2008
Education
■
Doctorate in Industrial
Relations from
the London School
of Economics
Board positions
■
Icelandair hf., Board
member
■
Marel hf., Board
member
Experience
Dr. Svafa Grönfeldt is a Professor
of Practice at the Massachusetts
Institute of Technology. She is a founding
member of MIT’s newest
innovation accelerator DesignX
focused on developing
new ventures
created at MIT.
Svafa is the
cofounder of The
MET fund, a
Cambridge
based seed investment fund. Previous
positions include executive
leadership positions at two global
life science companies where she
served as Chief Organizational Development
Officer of Alvogen and
Deputy to the CEO of Actavis Group.
Svafa is a former President
of
Reykjavik University.
Shares held in Embla
Medical
Svafa holds no shares
nor share options in Embla
Medical.
Other
Svafa has no interest links with Embla
Medical’s main clients,
competitors, or
major shareholders.
Svafa is considered
a dependent
member of the Board due to her long
tenure on the Board.
Arne Boye Nielsen
Member of the Board of Directors
Born in 1968
Member of the Board of
Directors since 2009
Education
■
Master’s degree
in Business
Administration from
the Copenhagen
Business School in Denmark
Board positions
■
Revenio Group Oyj,
Chair
■
Cookie Information A/S, Board
member
■
Natus Sensory, Board
member
Experience
Arne has spent most of his career
with Demant A/S in various and
expanding roles throughout the world.
After working as an interim
General Manager of
Oticon Australia Pty
Ltd, Arne assumed,
in 1996,
as President of Diagnostics and Communications
in Demant, which
has operations worldwide. Arne left
Demant A/S in 2023.
Shares held in Embla
Medical
Arne holds no shares nor
share options in Embla Medical.
Other
Arne has no interest links with Embla
Medical’s main clients,
competitors, or
major shareholders.
Arne is considered
a dependent
member of the Board due to his long
tenure on the Board.
Dr. Alberto
Esquenazi
Member of the Board of Directors
Born in 1957
Member of the Board of
Directors since 2021
Education
■
Medical degree in
Medicine and Surgery
from Universidad Nacional
Autonoma de Mexico in Mexico
Board positions
■
AMRPA and Jefferson
Einstein Healthcare Network,
Board member
Experience
Dr. Alberto Esquenazi, MD, serves
as the John Otto Haas Chair of
the Department of
Physical Medicine and
Rehabilitation at Jefferson
MossMagee Rehabilitation in Philadelphia
and is the Chief Clinical
Officer as well as
Director of the Gait
and Motion Analysis Laboratory
and Clinical Director
of the Regional
Amputee Center.
He is Professor
of PM&R at Jefferson School of Medicine
and the SVP, Enterprise
Rehabilitation and Postacute Care
Network. Alberto is the past
president of the American Academy
of PM&R. He has published
widely and is a member of national
and international professional,
educational, and research societies.
Shares held in Embla
Medical
Alberto holds no shares
nor share options in Embla
Medical.
Other
Alberto has no
interest links with
Embla Medical’s main
clients,
competitors or major shareholders. Alberto
is an independent
member of the Board.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
48
GOVERNANCE
Board of Directors
Caroline Vagner Rosenstand
Member of the Board of Directors
Born in 1979
Member of the Board of
Directors since 2024
Education
■
Master’s degree
in Applied
Economics and
Finance from
Copenhagen Business School
Board Positions
■
K/S Habro-Plymouth,
Board member
Experience
Caroline Rosenstand is the EVP of
the Chronic Care Commercial
business unit of Coloplast A/S. In this
capacity, she serves as a
member of the Executive
Leadership Team of Coloplast
A/S. Previous
positions include Exective Vice President
and President for Atos
Medical AB, Vice President Central Eastern
Europe & Israel, and Vice
President Strategy, Mergers & Acquisition
for Coloplast A/S. The
positions were based
in Denmark, Sweden
and the US. Prior
to joining
Coloplast, Caroline was part of the
investment team in the Danish
private equity company Axcel, and
a management consultant at A.T.
Kearney in Copenhagen.
Shares held in Embla
Medical
Caroline holds no shares
nor share options in Embla
Medical.
Other
Caroline has no
interest links with
Embla Medical’s main
clients,
competitors or major shareholders. Caroline
is an independent
member of the Board.
Tina Abild Olesen
Member of the Board of Directors
Born in 1972
Member of the Board of
Directors since 2024
Education
■
Master’s degree in Economics and Business
Administration
(Strategy, Organization and Leadership) from Copenhagen
Business School
Experience
Tina Abild Olesen brings extensive
experience from several senior
leadership positions in the pharmaceutical
industry latest as Senior
Vice President (SVP)
of the Global
Diabetes Franchise at
Novo Nordisk
A/S. During her 16,5 years with Novo
Nordisk, Tina in addition held
various positions like SVP of Global
Commercial Strategy, General
Manager in Germany and head of
Marketing in the Danish, Norwegian
and German affiliates. Prior to joining
Novo Nordisk A/S, Tina worked
11,5 years for GlaxoSmithKline Pharma
primarily across Commercial
functions (Prescription / OTC medicines
and Vaccines) as well as
Corporate Affairs and New Business
Development.
Shares held in Embla
Medical
Tina holds no shares nor
share options in Embla Medical.
Other
Tina has no interest
links with Embla
Medical’s main clients,
competitors or major shareholders. Tina
is an independent
member of the Board.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
49
GOVERNANCE
Executive
Management
Ólafur
Gylfason
Christian
Robinson
André
Rocha
The
Executive Management
team
consists of
the
President and
CEO, together
with seven
senior leaders
who hold
executive responsibility
for our
Business
Areas
and the
functions
of Corporate
Finance,
Operations,
Research and Development,
and People, Strategy
and Sustainability.
Together, they oversee
the implementation of
Embla Medical’s strategic
plans, drawing on extensive
industry and leadership
experience.
Collectively,
the team
brings decades
of service
within Embla
Medical
and the broader medtech sector, providing
continuity, stability,
and a
strong
foundation
for long-term
value
creation.
See the biographies
of the Executive
Management members
on the following
page.
Conal
Harte
Lukas
Märklin
G. Arna
Sveinsdóttir
Margrét Lára
Fridriksdóttir
Sveinn
Sölvason
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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50
GOVERNANCE
Executive Management
Sveinn Sölvason
President and CEO
Born in 1978
With the company since
2009
Education
■
Master’s degree
in Finance and
Accounting (Cand.
Merc.FIR) from
Copenhagen Business School
■
Bachelor’s degree
in International
Business from
Copenhagen
Business School
Board Positions
■
Icelandic-American Chamber of
Commerce, Board member
Experience
Before being appointed
President and CEO
of the company
in 2022,
Sveinn served as the Chief Financial
Officer for almost a decade.
Sveinn first joined the organization in
2009 where he initially took on
roles within Corporate Development and
Treasury. Prior to that, he
worked at Marel,
Kaupthing Bank,
Goldman Sachs and
HSH Nordbank.
Shares held in Embla
Medical
68,342
G. Arna Sveinsdóttir
Chief Financial Officer
Born in 1966
With the company since
2022
Education
■
Master’s degree
in Accounting and
Finance from the
University of
Uppsala, Sweden
■
Cand.oecon. degree from
the University of
Iceland
Board Positions
■
Fossar, Board member
Experience
Before joining the
company in 2022,
G. Arna held
finance roles
at Kvika Bank and subsidiaries. Prior
to that, she was at Teva
Pharmaceuticals/Actavis for
ten years, including
as the
CFO of Teva
Pharmaceutical Generic R&D. During
her time at Teva, she worked
and lived in Switzerland and
in the US. G. Arna
was an independent
consultant to financial institutions
in Iceland before joining Teva
and worked in various finance roles at
Kaupthing Bank 2001-2008,
including as the
CFO. She also
worked at Eimskip
in Iceland and PWC
in Stockholm.
Shares held in Embla
Medical
G. Arna holds no shares
in Embla Medical.
Christian Robinson
President Americas & Global Bracing
Born in 1982
With the company since
2012
Education
■
Juris Doctorate from Harvard
Law School
■
Bachelor’s Degree
in English
Literature from
Brigham Young
University
Board Positions
■
National Association
for the
Advancement of
Orthotics and
Prosthetics (NAAOP), Board member
Experience
Since joining the company in 2012,
Christian served in several roles
including as General Counsel Americas,
VP of Finance Americas, and
as Managing Director Americas. Prior
to joining the organization, he
practiced corporate
and transactional
law with international
law firm
Paul Hastings LLP with a focus on M&A
and capital markets.
Shares held in Embla
Medical
13,207
Ólafur Gylfason
EVP Chronic Solutions
Born in 1969
With the company since
1997
Education
■
Master’s degree
in International Business
Economics from
Alborg
University in Denmark
■
Bachelor’s degree in
Business Administration
from Bifrost School
of
Business in Iceland
Experience
Ólafur joined the company in 1997
as the sales manager for emerging
markets. He moved to The Netherlands
in 2000 to establish and lead
the European region as part of the
executive team and then shifted
his role over to the Americas region
in 2013. Prior to his appointment
as Chief Commercial
Officer in 2022, Ólafur
was EVP of Global
Sales &
Marketing and Prosthetics for six
years.
Shares held in Embla
Medical
32,808
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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51
GOVERNANCE
Executive Management
Margrét Lára Fridriksdóttir
EVP of People, Strategy & Sustainability
Born in 1978
With the company since
2000
Education
■
Master’s degree
in Management and
Strategy from
the University
of Iceland
■
Bachelor’s degree in
Business Administration
from the University
of
Iceland
Board Positions
■
Investment committee member
of VEX I and VEX II
■
Icelandic Chamber of
Commerce, Board member
■
Annata, Board member
Experience
Over the course of more than two
decades at the company, starting
in 2000, Margrét
has held key
positions in finance,
corporate strategy
and human resources. Prior to joining
the Executive Management in
2013, Margrét served as Vice President
of Corporate Strategy.
Shares held in Embla
Medical
35,376
Lukas Märklin
Chief Operating Officer
Born in 1974
With the company since
2023
Education
■
Master’s degree
in Mechanical Engineering
from ETHZ Swiss
Federal Institute of Technology
Experience
Lukas was appointed Chief Operating
Officer in 2023. Lukas came
to the company
from Straumann,
the world’s largest
dental implant
manufacturer group. His career with
Straumann spans over two
decades where he most recently served
as Senior Vice President of
Operations. In between his time at
Straumann undertaking diverse
positions, Lukas worked
as Head of
Global Operations Management
at Endress+Hauser Group.
Shares held in Embla
Medical
Lukas Märklin holds no shares
in Embla Medical.
Conal Harte
EVP of Patient Care
Born in 1980
With the company since
2016
Education
■
Bachelors Degree
in International
Business from
National University
of Ireland, Galway
■
Diploma in Financial Management
from Dublin Business School
Experience
Conal has worked in the O&P industry
since 2004 in a variety of
commercial roles across international
markets. He came to Embla
Medical in 2016 through the acqusition
of Touch Bionics where he
served as General
Manager (Europe)
and subsequently
assumed the
role of Managing Director Emerging Markets
for Össur. He started
working in the Patient Care division
in 2023 as Vice President in
Europe.
Shares held in Embla
Medical
2,015
André Rocha
EVP of Research and Development (R&D)
Born in 1978
With the company since
2025
Education
■
Master of Business
Administration (MBA),
European School
of Management and Technology, Berlin,
Germany
■
Master of Science
in Economics, University
of Porto, Portugal
■
Bachelor of Science
in Electrical and
Computer Engineering,
University of Porto, Portugal
Experience
Before joining the
company in 2025,
André served as
Partner at global
management consulting firm, McKinsey
& Company, for 13 years,
where his work focused primarily on
R&D, innovation and product
development topics. His career also
included R&D roles in several
companies and research institutions,
including Nokia (formerly Nokia
Siemens Networks). Across his 25-year
trajectory before Embla
Medical, André led teams across a
wide range of geographies and
cultures, including the Nordics, Germany,
the Netherlands, the U.S.,
India, Japan, and Iberia.
Shares held in Embla
Medical
André Rocha holds no
shares in Embla Medical.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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52
Sustainability
Statement
2025
RESPONSIBLE FOR TOMORROW
53
GENERAL DISCLOSURES (ESRS 2) 54
Basis for Preparation 54
Governance 55
Strategy 57
Impact, Risk and Opportunity Management 64
OUR ENVIRONMENT 69
Climate Change (ESRS E1)
69
Pollution (ESRS E2)
76
Resource Use and Circular Economy (ESRS E5)
77
EU Taxonomy Key Performance Indicators (KPIs)
79
EU Taxonomy Tables
80
OUR PEOPLE 8
4
Own Workforce (ESRS S1)
84
Workers in the Value Chain (ESRS S2) 94
Consumers and End-Users (ESRS S4) 95
OUR BUSINESS 97
Business Conduct (ESRS G1) 97
INDEPENDENT LIMITED ASSURANCE REPORT
ON SELECTED SUSTAINABILITY DATA 100
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
|
53
Responsible for Tomorrow
®
INTERVIEW
WITH
Bergthora Hlidkvist Skuladottir
Global Sustainability Director
Q1:
How does sustainability fit into
Embla Medical’s
business strategy?
A:
Sustainability is embedded in our core strategy and
reflects
who we
are as
a company.
Our approach
is
built on a strong foundation that aligns with our
values and business model.
At the heart
of it, we
are
here to help people live
healthier, more mobile lives
without limitations,
and we want
to do
that in a
way
that is responsible for the planet and for people.
That means using production methods that minimize
our environmental footprint,
supporting global climate
action, and ensuring
that inclusivity and transparency
are part of everything we do.
We are committed to creating a safe, inclusive
workplace and respecting human rights across our
value chain. Strong governance ties this
all together by
keeping us transparent in our reporting, ensuring
ethical business practices,
and maintaining robust
compliance systems.
All our sustainability efforts
are managed within
our
Responsible for Tomorrow program, which brings
together teams across departments, business areas,
and countries. This collaborative approach ensures
that sustainability is integrated into everyday
operations and decision-making.
Our ambition is to grow responsibly and create
long-term value, for society
and for our
business.
Q2:
What
is
the
biggest
challenge
on
this journey,
and how
do you
see it
as
an opportunity?
A:
The biggest challenge today is delivering
on our
climate commitments while continuing to grow
and reach more patients. Decoupling growth from
environmental impact is difficult, but it is also
a significant opportunity to innovate and lead.
This year,
we are
sharing
our first
climate transition
plan to meet our science-based targets. This plan
is an ambitious roadmap for sustainable growth
and resilience, pushing us to rethink how we
operate,
explore
new technologies,
and strengthen
partnerships. By doing this, we’re not only cutting
emissions,
we are
making our
business
more efficient,
resilient, and prepared for future challenges.
For us, sustainable growth is not just
about hitting
targets. It is about shaping a future where health,
mobility, and environmental care go hand in
hand. That vision inspires us every day
and turns
challenges into opportunities.
Q3:
How do
you stay
committed amid
regulatory uncertainty?
A:
Regulations are constantly changing and
uncertainty
is part
of the
landscape.
However,
our commitment goes beyond compliance.
Sustainability
is a long-term responsibility
and
a strategic
advantage. Rules
may shift, but
our
purpose does not.
Sustainability
also strengthens
our business.
By embedding
risk management
into our
operations,
whether related to supply chain vulnerabilities,
climate-related impacts, or ethical compliance,
we reduce exposure to disruptions and remain
prepared.
This proactive
approach
helps us
anticipate
challenges and seize opportunities in a changing
market.
We are investing in transparency, innovation, and
partnerships
because we
believe
businesses
that lead
on sustainability will be more resilient. Our focus on
science-based
targets and
strong values
ensures that
our progress is meaningful and future-ready.
At the end of the day, sustainability is about trust
and impact.
Even in
times of
uncertainty,
we remain
committed to doing what is right, for our patients,
our communities, and the environment.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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54
SUSTAINABILITY
STATEMENT
General Disclosures (ESRS 2)
Basis for Preparation
General Basis
for Preparation
of Sustainability Statements (BP-1)
Embla Medical’s Sustainability
Statement is prepared
on a consolidated basis
unless otherwise specified
and incorporates
data points
from topical
standards
identified
as material
through
our Double
Materiality
Assessment (DMA). This statement
is inspired by
the principles of
the Directive (EU)
2022/2464 (the
Corporate Sustainability Reporting
Directive, CSRD)
and the
European
Sustainability
Reporting
Standards
(ESRS) issued by the European Commission.
The term
“inspired by CSRD”
indicates that this Statement
does not
fully comply
with all
ESRS requirements.
We
disclose all
material qualitative information
available
to us,
including relevant policies
and procedures. For
quantitative information, where we
report on a metric,
we comply with all
material data points as
required per
the ESRS and clearly indicate any deviations regarding
methodology from the ESRS
in the accompanying
accounting policies. Only
quantitative data
points for
2025 marked with the icon “
” have been subject to
limited assurance by
our auditor, PwC.
The auditor’s
limited assurance report
is included
at the
end of
this
Statement.
Due to uncertainties
regarding upcoming changes
to
the standards, we will
continue to report in
the same
manner as
in 2024. We
believe this
approach ensures
consistency and comparability.
Embla Medical has not excluded any information
related
to intellectual
property,
know-how,
innovation
results, or business-sensitive data. We remain
committed to transparency in our ongoing research
and development efforts.
Disclosures
in Relation
to Specific
Circumstances (BP-2)
The scope
of reporting covers
all Embla
Medical
subsidiaries, unless otherwise stated. It
encompasses
Embla Medical’s operations,
as well
as upstream
and downstream
value chain impacts,
risks, and
opportunities. When a
new company
is acquired,
environmental impact data from that
entity is included
only after
a full
year of
data has been
collected.
This approach ensures data accuracy
and comparability
and allows
proper integration with
our reporting
systems and
assurance processes.
Further details
are
provided
in the accompanying
accounting
policies.
We prioritize transparent
reporting to provide
our
stakeholders with a clear and
accurate view of our
sustainability efforts. When
data is unavailable,
we rely
on well-founded estimations
to ensure comprehensive
reporting.
We regularly
reassess our
use of estimates
based on
experience.
Main estimations,
assessments,
or changes in calculation methodologies are
explained
in the accounting
policies or in
relevant chapters.
In the
Our Environment
chapter, the primary changes
in the greenhouse gas (GHG) emissions calculation for
current reporting year are:
■
To improve transparency, the tables
in chapter E1-6:
Gross Scopes 1,
2, 3
and Total GHG
Emissions have
been revised so that
all information now appears
in two tables instead of
three. As a result, the
additional Scope 3
categories that were
previously
presented in a separate table
are now included
within the Total GHG emissions.
■
The emissions calculations
have been revised
for 3.1 Purchased
Goods and Services
and 3.2
Capital Goods by adjusting spend data for inflation.
Emission
data for
2024 and
the base
year were
also
adjusted for inflation and
historical figures restated.
Furthermore, for 3.1
Purchased Goods and Services,
we updated the emission data for both
2024 and
the base year
using more accurate
information from
patient care facilities.
The changes are
reflected
in the restated historical
figures.
■
Emissions from upstream and downstream
transportation are reported
separately in their
own
lines under 3.4 and
3.9 Upstream and Downstream
Transportation
and Distribution.
The changes
also
apply to the 2024
figures and are restated in
the
report.
■
The 2024
figure for
3.7 Employee
commuting has
been
restated using
updated commuting
distance data.
■
The 2024 mobile combustion figures have been
restated due to
inclusion of acquired companies.
The changes mentioned above are also reflected
in the total figures. For more information on the
changes
above, see
accounting
policies
in chapters
Energy Consumption and Mix (E1-5) and Gross
Scopes 1, 2, 3 and Total GHG Emissions (E1-6).
In the
Our People
chapter, this year’s report covers
S1-10: Adequate wages disclosure
requirements for
the first time.
In S1-13: Training
and Skills Development
Metrics, the
reported figures for
the average number
of training hours per
employee in 2024 have been
restated. This adjustment was necessary due
to
the identification of
some double counting
in the
previously recorded training hours.
Our accounting
policies are
applied consistently
throughout the financial year and correspond with the
comparative
figures,
where applicable.
All greenhouse
gas data points (GHG Scope
1-3) are reported based on
the Greenhouse Gas Protocol.
We have applied time horizons for material
impacts, risks, and opportunities, as presented in
chapter SBM-3
.
Embla Medical is required to comply with a wide
array of laws, regulations, and treaties pertaining
to sustainability, at both international and local
levels. However, a
comprehensive list of data
points
derived from other EU legislation is not included in
the current year’s Sustainability Statement and will
be phased in over the coming years.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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55
Governance
The
Role of
Our Management
(GOV-1)
Our management plays
a central role
in ensuring the
governance
processes,
controls,
and procedures
that
are necessary to monitor, manage, and oversee
sustainability-related impacts, risks,
and opportunities.
The Chief Financial Officer (CFO) is responsible
for enterprise risk management by establishing a
process for identifying, assessing, managing, and
reporting risks that may affect the achievement
of the company’s strategic objectives. This includes
ESG control systems to ensure the accuracy of the
company’s sustainability reporting and compliance
with relevant laws and regulations.
Sustainability is embedded into our strategy
and throughout our organization, and our
Responsible for Tomorrow® program ensures clear
departmental ownership and responsibilities for
metrics and targets. In 2025, the program’s focus
was on establishing a climate transition plan,
conducting a climate scenario analysis and working
on circular pilot projects.
The Program Steering Committee, chaired by the
Executive Vice President of People, Strategy &
Sustainability, sets our sustainability strategy and
ensures its execution throughout the organization.
The Committee meets at least quarterly and
reports
to
the
Executive
Management
team,
led
by the Chief Executive Officer (CEO).
Our Sustainability
Commitment
We provide
products
and services
that contribute
to good health, using responsible production
methods and supporting climate action, while
being a sponsor for inclusivity and transparency.
We believe
that sustainable
growth is
the only
way
to build a successful
and responsible business for
the benefit of future generations.
The Internal Control & Risk team ensures
that the results of the Double Materiality
Assessment are
incorporated into the annual Enterprise Risk
Assessment. Identified material risks are reported to
the
Steering
Committee of
the Responsible
for Tomorrow
program to
validate their
prioritization
and create
mitigation action plans to address the prioritized risks.
The sustainability
reporting process
is overseen by
the Audit Committee.
According to
the Terms of
Reference for
the Audit Committee
of Embla Medical
hf., the Committee
monitors the
financial and
sustainability
reporting process,
makes recommendations
to ensure
integrity,
monitors progress
on
sustainability
targets, reports
results to
the Board, and
assesses the company’s
internal control
and
enterprise risk
management systems.
The status of sustainability
reporting is reported
to the Audit
Committee four times a year.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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56
Sustainability Awareness
of Our
Management (GOV-2)
The Executive
Management
team is
updated
at least
once a year on the identification and assessment
of material impacts, risks, and opportunities.
The Steering
Committee
of the
Responsible
for
Tomorrow program regularly receives information
on the
results of
due diligence
processes,
as well
as
the effectiveness of policies, actions, and targets
in mitigating risks and achieving sustainability
objectives.
Chaired by
the Executive
Vice President
of People,
Strategy
& Sustainability,
the Responsible
for Tomorrow Steering Committee reports
directly to the Executive Management team on
material sustainability-related impacts, risks, and
opportunities. Additionally, ad-hoc updates are
provided if critical issues arise. The results of the
Double Materiality Assessment are reported to the
Audit Committee once a year. Our administrative,
management, and supervisory bodies actively
incorporate sustainability impacts, risks, and
opportunities
into the
company’s
strategy,
decision-
making, and risk management processes, ensuring
alignment with long-term goals.
Sustainability Related
Incentives
(GOV-3)
Including sustainability performance
in management
incentives is essential to aligning executive actions
with long-term corporate goals and stakeholder
expectations, thereby driving accountability and
progress. Embla Medical first incorporated social-
related sustainability metrics into its Executive
Committee
Incentive
Scheme. In
2025, the
scope was
expanded to include environmental and governance
metrics, ensuring a comprehensive approach to
sustainability performance.
Statement on Due
Diligence (GOV-4)
As part of our commitment to sustainable
business practices, and
inspired by
the Corporate
Sustainability Reporting Directive (CSRD), Embla
Medical
has implemented
due diligence
processes
to assess and manage the environmental, social,
and governance (ESG) impacts of our operations
and value
chain.
These processes
ensure compliance
with relevant sustainability legislation, mitigate
risks, and promote
long-term value creation for
our
stakeholders. Based on our due diligence findings,
we implement mitigation actions, for all material
risks
identified
in the
Double Materiality
Assessment.
We continuously track the effectiveness of our
actions using regular reporting mechanisms.
This approach ensures progress toward our
sustainability targets and enables us to adjust
strategies as needed. Our due diligence process
involves ongoing engagement with stakeholders,
helping us
to identify
new risks,
validate
our findings,
and ensure that our actions reflect stakeholder
concerns and expectations.
Risk
Management
and
Internal
Controls
(GOV-5)
Risks are a natural and integral part of our business
activities,
and our risk
profile is
continuously
evolving.
We aim
to mitigate
these risks
and reduce
them to
an
acceptable level through effective risk
management.
See more in our
Risk Management chapter
.
The results of
the Double Materiality Assessments
are integrated into our yearly Enterprise Risk
Assessment process to ensure alignment with
the
organization’s strategic goals. In the climate risk
assessment, key employees, identified as Subject
Matter Experts from various functions, evaluate
risks and opportunities across the entire value chain.
This assessment covers physical, regulatory,
technological, reputational, and
financial dimensions,
considering both the likelihood and impact on our
operations. To ensure the accuracy, completeness,
and consistency of our sustainability reporting,
Embla Medical is in the
process of strengthening risk
management and internal control processes.
Our internal controls over
sustainability reporting
include:
■
Data Governance: We have implemented
structured
data governance
to ensure
the accuracy
and reliability of the ESG data collected across
our operations.
This includes
data ownership,
responsibility for ESG metrics,
and clear
reporting lines.
■
Control Activities: We are in the process of
embedding
control
activities
into the
sustainability
reporting process, including checks and balances,
reconciliations, and validation procedures for
data inputs and outputs. These controls are
designed
to prevent,
detect,
and correct
errors or
irregularities in ESG reporting. Processes are still
in development for some activities, and we are
continually working on improving the controls.
■
Training and Awareness: We
conduct training for
relevant employees to ensure they understand
the importance of sustainability reporting and
their role in maintaining the quality and
integrity
of ESG disclosures.
To further enhance confidence in the reliability
of our sustainability disclosures, external auditors
provide limited assurance on selected
quantitative
data points.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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57
Strategy
Strategy, Business
Model and
Value Chain (SBM-1)
Embla
Medical
is
a leading
global
provider
of
innovative
mobility
solutions,
dedicated
to
helping
people
live
a Life Without Limitations®. Our mission is to improve people’s mobility, and
we do that through the delivery
of Prosthetics, Neuro Orthotics, and Bracing & Supports solutions, along
with Patient Care. An overview
of our products,
services, markets,
and business
models can
be found
in other
chapters of
this report.
Embla Medical
places a
strong emphasis
on product
quality,
which is
fundamental
to our
processes
as a medical
device company. With
a broad global
presence, our products
are available in
over 100 countries
and registered
in compliance with local medical device regulations.
We have adopted a management system approach to drive our sustainability
initiatives. The Double
Materiality Assessment process identifies which topical standards are
material to our operations.
For each standard, we manage, and control identified material impacts,
risks, and opportunities by
implementing relevant policies, processes, actions, metrics, and targets.
This is followed by internal control,
progress reporting, and assurance. We are continually enhancing this
management system to improve our
sustainability efforts. Reflecting the results from the Double Materiality Assessment,
our key sustainability-
related
goals
focus
on
developing
quality
products
and
services
that
improve
people’s
mobility,
reducing
our greenhouse gas emissions to meet our science-based targets, and
enhancing the well-being and
development of our employees within an inclusive and safe workplace.
Our primary sustainability challenge today is climate action. Embla Medical
faces a dilemma: while expanding
our operations to reach more patients and enhance their quality of life is crucial, this growth is currently linked
to increased greenhouse gas emissions due to global infrastructure constraints.
Our main challenge is to
decouple our growth from these emissions. For more details, please refer to
our
E1 chapter
.
We develop and manufacture a wide range of prosthetic, neuro orthotic and bracing & support solutions,
and serve patients in need of various mobility solutions in our patient care
facilities across the globe.
Our business model is patient centric. It encompasses the innovation of new product solutions,
manufacturing
of both off-the-shelf and customized high-quality solutions, and
sales and marketing through direct sales
channels and distributors. We prioritize patient care through our own O&P
clinics as well as independent
providers, working closely with prescribers and payers. Notably,
more than 90% of our products and services
are reimbursed by public healthcare systems and private insurance providers. Innovation to address emerging
patient needs drives our business model. Our goal is to deliver cost effective,
high-quality medical solutions
that provide value for patients and the healthcare systems while minimizing
our environmental impact.
In the orthopaedic industry, purchasing decisions involve multiple stakeholders
and decision-makers,
each playing a specific role. These stakeholders can be categorized into five groups: Patients, who are the
end-users of our products; Prescribers, healthcare professionals
who prescribe the products; Providers,
healthcare professionals who provide patients with products,
such as Certified Prosthetist Orthotists (CPOs)
doctors, and other clinical specialists; Payers, both public and private insurance companies that cover the cost;
and Influencers, including healthcare systems, insurance companies, medical
associations, patients and their
families. For more information, please refer to our
Markets and Trends chapter
.
At Embla Medical, we apply the highest quality standards for all our purchased
raw materials, components,
and finished goods. Our commitment is to deliver safe and reliable products
to our customers and the
patients we serve. The primary raw materials utilized in our manufacturing processes include metals, silicone,
composites, and plastics, sourced from our trusted key suppliers.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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58
Interests
and Views
of Stakeholders
(SBM-2)
We value
feedback from
our stakeholders
and strive
to understand
their perspectives,
expectations
and concerns
regarding
our sustainability
efforts. Our
key stakeholders
are our employees,
healthcare
professionals,
patients,
suppliers, shareholders/investors and
payers. The following
table highlights how
Embla Medical
engages with these
stakeholders to ensure
their interests and
views are
considered in our
strategy and
business model.
STAKEHOLDERS
PURPOSE OF
ENGAGEMENT
HOW ENGAGEMENT
IS ORGANIZED
EXAMPLES OF
OUTCOMES FROM
THE ENGAGEMENT
Employees
To foster a culture that attracts, retains, and
actively engages skilled employees by valuing
and addressing their
perspectives and concerns.
■
One-on-one or group meetings,
news on company
intranet, location announcements,
employee meetings, performance reviews and check-ins.
■
Global engagement surveys.
■
Quarterly employee meetings to
inform all employees of
updates within the
company.
■
Action plans from engagement survey outcome.
■
Policy updates.
■
Communication to new and
existing employees based
on
feedback.
Healthcare
Professionals
(Customers)
To deliver exceptional customer service while
advancing product and
solution expertise within
the O&P industry.
■
Regular communication with healthcare
professionals through in-person visits
and
customer service channels.
■
Regular training and education conducted in-person and virtually.
■
Tradeshows, conferences
and webinars.
■
Customer feedback processes.
■
Product and service improvements.
■
Supporting customers in
providing optimal clinical
outcomes to patients.
Patients
(End-Users)
To guide and support
our end-users in
using our
product solutions effectively to enhance their
quality of life.
■
Interaction with patients through the process
of fitting and caring for
their medical
needs.
■
Communication via online platforms, social media
and targeted publications.
■
On-site events such as mobility clinics
and other user experience days
where all
individuals are welcome.
■
Education and engagement during product development.
■
Product users educated about
solutions available for
different needs.
■
Product improvements.
■
Community where end-users seek advice and support.
Suppliers
To ensure
responsible sourcing
by promoting
a
safe and respectful
working environment in our
value chain and reducing environmental impact.
■
Collaborate with suppliers on
material selection to identify
high-quality and eco-
friendly materials.
■
Screening of suppliers in relation
to Environmental, Social and Governance aspects.
■
Performing Social Audits and Fire Safety Audits
at high-risk suppliers.
■
Performing annual surveys
on environmental management
at high-emitting
suppliers.
■
Code of Conduct Training.
■
Suppliers well-informed
on Embla Medical’s
sustainability strategy.
■
Enhanced trust and reliability.
■
Increased collaboration with
suppliers on improvements
to lower emissions.
Shareholders /
Investors
To ensure that ESG metrics are tied to business
objectives in a
transparent and measurable
way,
driving responsible behavior and attracting ESG
focused investors.
■
Regular outreach and engagement
through investor road show
activities and
conferences.
■
Quarterly releases and conference
calls.
■
Events such as Capital Markets Day, Expert Calls and Analyst Days.
■
ESG ratings through a global ESG
disclosure system (CDP, Sustainalytics etc.)
■
Investor confidence
through timely responses
and
transparency.
■
Continuous improvement of
ESG disclosures leads
to
improved ESG scores and industry ranking.
■
Positive brand reputation.
Payers
(Healthcare Reimbursement
Systems)
To ensure alignment
on reimbursement policies,
promote accessibility to innovative products,
and demonstrate the
value of medical solutions.
■
Regular meetings and consultations
with payers to understand
reimbursement
policies and requirements.
■
Providing clinical evidence and outcomes to support reimbursement.
■
Participation in industry forums and policy discussions.
■
Improved reimbursement policies
for innovative medical
solutions.
■
Expanded patient access to products and services.
■
Strengthened relationships
with payers
and
policymakers.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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59
Material
Impacts,
Risks and
Opportunities
(SBM-3)
The Double Materiality Assessment (DMA) is designed to identify material sustainability-related Impacts, Risks,
and Opportunities (IROs) and the results are the basis for determining the disclosures
in Embla Medical’s
Sustainability Statement.
In 2025, the DMA results were that 8 out of 12 ESRS standards are material
to Embla Medical, consistent with
the DMA results in 2024 and 2023. Besides ESRS 2 on General Disclosure, the material standards identified are:
E1 Climate Change, E2 Pollution, E5 Resource Use and Circular Economy,
S1 Own Workforce, S2 Workers in the
Value Chain, S4 Consumers and End-Users, and G1 Business Conduct.
The results align with and reinforce our
sustainability strategy. We strive to reduce our greenhouse gas emissions,
have a clear focus on our resource
use and strive to move from a linear to a circular economy. We are a global company
with a clear strategy on
the safety of our own workforce, workers in our
value chain, and our patients. Additionally, we maintain a strong
focus on opportunity and inclusion, and practice transparent and ethical
business conduct.
In the table below we have listed all identified material Negative and Positive
Impacts, Financial Risks and
Opportunities across our operations and value chain related to sustainability topics. Please refer to our topical
chapters for more information on our responses to identified material impacts,
risks and opportunities.
TOPIC
MATERIAL IMPACT,
RISK OR
OPPORTUNITY
EMBLA
MEDICAL’S
RESPONSE
VALUE CHAIN
TIME HORIZON
E1 Climate
Change
Negative Impact
Greenhouse gas emissions,
contributing to
climate change.
To reduce the impact, we have set science-based targets and actions
to meet them.
We have a certified
environmental management system
according to ISO 14001:2015
in our largest manufacturing
and distribution
sites, and in some of our patient care facilities.
Upstream
& Own Operations
Medium term
(1-5 years)
Financial Opportunity
Innovation in low-emission
products and
packaging, renewable
energy and energy efficiency.
We work on
energy efficiency, source around
95% of our
purchased
electricity from renewable energy sources and are exploring new
opportunities towards innovation on low-emission solutions for a
transition to a low carbon economy.
E2 Substances of
Concern
Financial Risks
Increased sourcing
and testing
costs due to restrictions on
substances of concern.
We are continuously improving
our management of
substances and
innovation towards safer alternatives.
Own Operations
Short term
(current
reporting
year)
Note: Table continues
on the next page
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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60
TOPIC
MATERIAL IMPACT,
RISK OR
OPPORTUNITY
EMBLA
MEDICAL’S
RESPONSE
VALUE CHAIN
TIME HORIZON
E5 Circular Economy
Negative Impact
Waste with
embedded greenhouse
gas emissions from raw materials.
Active innovation towards circular solutions and collaborative supplier
management. Partnering with responsible waste management service
companies.
Across
Short to
medium
term (current
reporting year
to 5 years)
Financial Risks
Failure to meet
new regulatory and
tender requirements or customer
expectations, resulting in reduced
sales.
Key focus is
to work towards innovation
on low-emission solutions on
products and packaging.
Financial Opportunity
Innovation in
circular solutions
enabling efficiency.
We innovate towards low-emission solutions for products and packaging
and continuously improve our processes to enhance raw material yield
and waste management. These
efforts are driven by
our R&D investments,
which are key to innovation and long-term sustainability.
S1 Employee Engagement,
Retention and Attraction
Negative Impact
Low job satisfaction harms well-
being, reducing
engagement, and
affecting workplace inclusion.
We foster an inclusive workplace through open engagement,
work-life balance, and address
issues like discrimination and inequality.
Own workforce
Medium term
(1-5 years)
Financial Risk
Potential talent loss
due to low
job
satisfaction or morale.
We invest in
development, monitor engagement,
and promote retention
through internal career opportunities.
S1 Health
and Safety
at
Work
Negative Impact
Potential health
issues due
to
workplace incidents.
We have a strong culture for safety and operate an efficient safety
management system in our largest
manufacturing and distribution sites,
as well as some patient care facilities. Safety is our top priority.
Own workforce
Short term
(current
reporting
year)
S2 Workers
in the
Value Chain
Negative Impact
Adversely affected
workers’ rights
and well-being due to unethical
practices in the supply chain.
We have implemented policies such as the Code of Conduct, Human
Rights Policy, and Speak-Up
Policy, and encourage reporting
of unethical
behavior. High-risk suppliers are subject
to enhanced ESG screening and
annual external compliance and social audits.
Across
Medium term
(1-5 years)
Note: Table continues
on the next page
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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61
TOPIC
MATERIAL IMPACT,
RISK OR
OPPORTUNITY
EMBLA
MEDICAL’S
RESPONSE
VALUE CHAIN
TIME HORIZON
S4 Data Privacy
Financial Risks
Penalties, reputational loss, and
potential business
impact due
to
non-compliance.
We have adequate policies and
procedures in place as
well as regular
training and awareness.
Own Operations
& Downstream
Medium term
(1-5 years)
S4 Product Quality
Positive Impact
Improved mobility and
participation in
society thanks
to high quality products.
Key focusing on producing high quality products, allowing users to become
mobile. Our processes include comprehensive testing of clinical benefits of
our products.
Own Operations
& Downstream
Medium term
(1-5 years)
G1 Business
Ethics
Financial Risk
Penalties, stakeholder trust loss.
We provide training and
awareness of our Code
of Conduct and core
values
Honesty, Frugality and Courage as well as other ethical policies, including
promoting the Speak-Up Line.
Across
Medium to long
term (from
1 year
to more than 10
years)
Financial Opportunity
Investor confidence,
competitive
differentiation.
Commitment to follow industry
standards and guidelines
regarding
Corporate Governance Reporting.
G1 Regulatory & Trade
Environment
Financial Risks
Higher compliance cost, legal
penalties and
reputational damage.
Exposure to changing trade
regulations.
Processes in place to monitor upcoming regulatory changes and to explore
alternative routes and adjust contracts to mitigate financial impacts and to
adapt as needed.
Across
Short to
long term
(current reporting
year to more than
5 years)
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical - 2025 Annual Report
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63
As part of the 2025 update of the Double Materiality Assessment, the company reviewed assessment of all material impacts, risks and opportunities (IROs). This reassessment resulted in a few changes to the materiality status
of topics compared to the 2024 reporting period. The changes reflect updated knowledge, regulatory developments, and process improvements. The changes did not result in an increase or decrease in the number of mandatory
ESRS disclosures, as the underlying topical standards remain material
for other impact or opportunity dimensions. The key changes are outlined
below:
TOPIC
CHANGE IN MATERIALITY
REASON FOR CHANGE
IMPACT ON
ESRS REPORTING
E1 Climate
Change
Financial Risk → Not Material
Reduced likelihood of cost increases due to regulatory changes
(EU Omnibus) and no
observed physical climate-related
financial
impacts.
No change; E1-9 becomes non-mandatory but is already subject
to phase-in. E1
remains material for Negative Impact
and Financial
Opportunity.
S2 Workers
in the
Value Chain
Financial Risk → Not Material
No financial impacts observed;
suppliers operate under stable
ethical standards.
No change; S2 remains material for Negative
Impact.
S4 Product Quality
Negative Impact → Not Material
Low incidence of
product quality issues; likelihood
below
threshold.
No change; topic remains material for
Positive Impact.
S1 Employee Engagement,
Retention and Attraction
New -> Material as Financial Risk
Separation of impact and
risk dimensions; clarified
assessment
shows potential financial effects of talent loss.
No change; disclosures already
required due to Negative
Impact
materiality.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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Impact, Risk and Opportunity Management
Double Materiality Assessment Process (IRO-1)
The purpose
of a Double Materiality
Assessment (DMA)
is to identify,
assess, prioritize
and monitor potential
and
actual impacts
on people and
the environment (Impact
Materiality) as well
as business
risks and opportunities
arising from
sustainability
topics (Financial
Materiality).
At Embla Medical,
the DMA is
conducted by
a cross-
functional team
with members
from Internal
Control & Risk,
Global Sustainability,
Finance, Operations,
Human
Resources and
other relevant subject
matter experts. While
the previous
assessment was based
on input from
internal stakeholders
only, in 2025
the process was
further strengthened
by involving
external stakeholders,
including selected
customers and
suppliers. Their
perspectives provided
valuable insights
into the company’s
sustainability-related
impacts and risks
across the value
chain. The process
begins with establishing
a mutual
understanding through business model mapping, value chain documentation,
and stakeholder mapping. Identified
stakeholders are
then engaged to
validate the
list of
potential sustainability topics
and provide feedback
on their
relevance and
significance.
Subsequently,
Impacts, Risks,
and Opportunities
(IROs) are identified
and listed, and
their materiality
is assessed according
to a
defined methodology inspired
by the
ESRS requirements.
When identifying IROs related
to climate change (E1),
Embla Medical has consistently
reported greenhouse gas
emissions
in accordance
with the
Greenhouse Gas
Protocol and
set Science-Based
Targets validated
by the SBTi.
Climate change is
therefore considered material
for Embla
Medical. Since 2023,
we have
conducted climate risk
assessments
as part
of our
Enterprise
Risk Assessment.
These assessments
evaluated Physical
Climate Risks
and
Transition Risks related
to regulations,
technology, reputation, and
financial aspects. The
2025 climate change
risk assessment
shows shift
in risk significance
compared to
2024, with
financial and
regulatory
risks decreasing,
technology risks increasing, and
physical risks remaining at
a medium level, while
more granular site-level risks
were identified as part of
improvements to the assessment process. Overall, the
results highlight the need for
ongoing monitoring and
mitigation to
maintain resilience against
evolving climate-related challenges.
The material IROs related to Pollution
(E2) is primarily due to
the financial risk of potential restrictions
on
chemical substances used in our
manufacturing. Embla Medical has a
certified environmental management
system at
our largest
manufacturing
and distribution
sites and
has screened
these locations
to identify
actual
and potential pollution-related IROs in our
operations. Pollution from our own operations was
not deemed
material, but we plan to
evaluate the upstream value chain as part of
our supplier management in the next
1-4 years.
We have not
conducted consultations
with affected
communities.
IROs related Water and
marine resources (E3) was not
deemed material for Embla Medical.
We have a certified
environmental management system
in place
at our largest
manufacturing and distribution
sites and comply
with
applicable
local regulations.
These locations
have been
screened to
identify actual
and potential
water and
marine
resource-related IROs within our operations.
We plan to assess water
and marine resources in our
upstream
value chain
as part of
our supplier
management processes
over the
next 1-4 years.
We have not
conducted
consultations with affected communities in relation to this topic.
Embla Medical has not assessed
the impact on Biodiversity and Ecosystems (E4).
While we acknowledge the
growing importance of this topic,
it has not been deemed
material due to limited information at
this stage.
As we gain
greater insight
into impacts
within our
upstream value
chain and
strengthen
collaboration
with our
suppliers, the outcome of the DMA for this topic may change.
We have screened our operations
to identify actual and potential
IROs related to Resource
Use and Circular Economy
(E5), both in our own operations and
downstream value chain, and this topic has been
deemed material. We have a
robust waste management system and as a
global market player, Embla Medical acknowledges the importance
of
circular solutions to
reduce the use
of virgin raw
materials to lower
greenhouse gas emissions.
In 2025, we
conducted
an impact analysis
of major
product portfolios,
identifying opportunities
for eco
-
design and service
-
based business models.
Embla Medical has screened its own
operations, suppliers and business partners to identify potential risks and
opportunities related to Business
Conduct (G1). Key risks
identified are corruption and bribery,
both for reputational
risk and financial risk. As a global medical device
manufacturer and service provider, changes in regulatory
environment and reimbursement systems for medical devices can
have a negative impact on the company.
In 2025, the company conducted a
physical climate scenario analysis for its
key locations. The assessment applied
IPCC-aligned scenarios (SSP1–2.6, SSP2–4.5, SSP3–7.0
and SSP5–8.5) and evaluated both
acute and chronic physical
climate hazards across
current conditions and
future horizons (2030–2100).
The results for
the most likely
scenario,
SSP2–4.5 by 2050, were used for further analysis and
mitigation actions. The results were used in our
Annual
Enterprise Risk Assessment and
integrated into our Property
Risk Assessment. The findings
highlight differentiated
risk profiles across the company’s locations and inform
prioritization within the climate risk management and
adaptation strategy.
Impact Materiality
The Impact Assessment contains
assessment based on scale,
scope, irremediability (together: severity) and
likelihood
with the
use of scoring
from 1
to 5 as
shown in the
table below.
For environmental
categories
the scope
is assessed
with regard
to how
many sites
and/or suppliers, products,
and immediate surroundings
are relevant.
For social and governance categories
the scope is assessed regarding
number of rights holders affected.
SCORING
SEVERITY /
IMPACT
LIKELIHOOD
Scale
Scope*
Irremediability
1
Very light
impact
Low number
Very easy
Rare:
> 10 years
2
Light impact
Several /
Low
number
Easy to remedy
Unlikely:
5-10 years
3
Medium
impact
Many /
Medium
number
Possible
Possible:
2-5 years
4
Heavy impact
Large /
High
number
Difficult
Likely:
1-2 years
5
Large impact
Major /
Very high
number
Non-remediable
Almost certain:
< 1 year
*See the severity and likelihood
scale on next page
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65
Financial Materiality
Financial Assessment is based on the potential financial effect on the company’s
revenue, costs, cash
flow, and market position over short-, medium-, and long-term horizons. Financial
Assessment contains
assessment based on the size of the financial impact (risk) and likelihood
(probability) with the use of scoring
from 1 to 5 as shown in the table below.
SCORING
SEVERITY /
IMPACT
LIKELIHOOD
1
0% - 25% Threshold
Rare: > 10 years
2
25% - 75% Threshold
Unlikely:
5-10 years
3
75% - 100% Threshold
Possible:
2-5 years
4
100 - 200% Threshold
Likely: 1-2
years
5
> 200% Threshold
Almost certain: <
1 year
Impacts, Risks and Opportunities are scored on a severity and likelihood
scale to prioritize high-risk areas.
Material risks are considered as those, which based on the severity and likelihood
assessment, have been
marked as high as shown in the table below.
DMA and Enterprise
Risk Assessment
After risks are assessed, Embla Medical prioritizes them based on their potential
financial impact and
strategic significance. High-priority risks are managed with specific
action plans, including mitigation
strategies and resource allocation. Results of the DMA are incorporated into
Enterprise Risk Management.
The Steering Committee of the Responsible for Tomorrow program makes
decisions on mitigation actions.
In addition to risks, the company identifies opportunities that are integrated
into the company’s business
model, aiming to leverage competitive advantages and enhance financial
performance.
Embla Medical monitors the risks and opportunities through its Enterprise
Risk Management system,
ensuring that emerging risks are identified and that mitigation strategies are
adjusted. Risks that have been
identified as material during Double Materiality Assessment are incorporated
into the company’s enterprise
risk register. Updates are provided to the Executive Management and the Audit Committee
to ensure
alignment with the overall corporate strategy. Our Double Materiality Assessment
is reviewed and updated
at least annually.
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66
Disclosure Requirements
Covered in
the Sustainability
Statement (IRO-2)
The
table
below
lists
the
Disclosure
Requirements
that
Embla
Medical
is
reporting
on
following
the
outcome
of
the
Double
Materiality
Assessment,
including
the
page
numbers
where
the
related
disclosures
can
be
found
in the Sustainability Statement. Disclosure requirements with quantitative
data points that have undergone limited assurance are marked
with an icon “
”.
ESRS
DR
NAME OF
DISCLOSURE REQUIREMENT
(DR)
PAGE
General Information
ESRS 2
BP-1
General basis for preparation of
the sustainability statement
54
BP-2
Disclosures in relation to specific circumstances
54
GOV-1
The role of the administrative, management and supervisory
bodies (also covering G1)
55
GOV-2
Information provided to and sustainability matters
addressed by the undertaking’s administrative, management
and supervisory bodies
56
GOV-3
Integration of sustainability-related performance
in incentive schemes (also covering
E1)
56
GOV-4
Statement on due diligence
56
GOV-5
Risk management and internal controls over
sustainability reporting
56
SBM-1
Strategy, business model and value chain
57
SBM-2
Interests and views of stakeholders (also
covering S1, S2, S4)
58
SBM-3
Material impacts, risks and opportunities and their interaction with strategy
and business model (also covering E1, S1, S2,
S4)
59
IRO-1
Description of the process to identify and
assess material impacts, risks and opportunities (also covering E1,
E2, E5, G1)
64
IRO-2
Disclosure Requirements in ESRS covered
by the undertaking’s sustainability statement
66
Environmental
Information
N/A
N/A
Disclosures pursuant to Article 8
of Regulation (EU) 2020/852 (Taxonomy
Regulation)
79
ESRS E1
E1-1
Transition plan for climate change mitigation
69
E1-2
Policies related to climate change
mitigation and adaptation
71
E1-3
Actions and resources in relation to climate change policies
71
E1-4
Targets related to climate
change mitigation and adaptation
72
E1-5
Energy consumption and mix
73
E1-6
Gross Scopes 1,2,3 and Total GHG
emissions
74
E1-7
GHG removals and GHG mitigation projects financed through carbon credits
75
Note: Table continues
on the next page
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ESRS
DR
NAME OF
DISCLOSURE REQUIREMENT
(DR)
PAGE
ESRS E2
E2-1
Policies related to pollution
76
E2-2
Actions and resources related to pollution
76
E2-3
Targets related to pollution
76
E2-5
Substances of concern and substances of
very high concern
76
ESRS E5
E5-1
Policies related to resource use and circular economy
77
E5-3
Targets related to resource use
and circular economy
77
E5-4
Resource inflows
78
E5-5
Resource outflows
78
Social Information
ESRS S1
S1-1
Policies related to own workforce
84
S1-2
Processes for engaging with own workers and
workers’ representatives about impacts
85
S1-3
Processes to remediate negative impacts and channels for
own workforce to raise concerns
85
S1-4
Taking action on material impacts on own workforce
86
S1-5
Targets related to managing
material negative impacts, advancing positive
impacts, and managing material risks
and opportunities
88
S1-6
Characteristics of the undertaking’s employees
89
S1-7
Characteristics of non-employees in the undertaking’s own workforce
91
S1-8
Collective bargaining coverage and social dialogue
91
S1-9
Diversity metrics
91
S1-10
Adequate wages
92
S1-13
Training and skills development metrics
92
S1-14
Health and safety metrics
93
S1-16
Metrics (pay gap and total remuneration)
93
S1-17
Incidents, complaints and severe human rights impacts and incidents
93
Note: Table continues
on the next page
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ESRS
DR
NAME OF
DISCLOSURE REQUIREMENT
(DR)
PAGE
ESRS S2
S2-1
Policies related to value chain workers
94
S2-2
Processes for engaging with value chain workers about impacts
94
S2-3
Processes to remediate negative impacts and channels for value chain workers
to raise concerns
94
S2-4
Taking action on material impacts on value chain workers
94
S2-5
Targets related to managing
material negative impacts, advancing positive
impacts, and managing material risks
and opportunities
94
ESRS S4
S4-1
Policies related to consumers and end-users
95
S4-2
Processes for engaging with consumers and end-users about impacts
95
S4-4
Taking action on material impacts on consumers and
end-users
96
S4-5
Targets related to managing
material negative impacts, advancing positive
impacts, and managing material risks
and opportunities
96
Governance Information
ESRS G1
G1-1
Business conduct policies and corporate culture
97
G1-2
Management of relationships with suppliers
98
G1-3
Prevention and detection of corruption or bribery
98
G1-4
Incidents of corruption or bribery
99
G1-5
Political influence and lobbying activities
99
G1-6
Payment practices
99
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Embla Medical - 2025 Annual Report
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69
SUSTAINABILITY
STATEMENT
Our Environment
Embla Medical has a positive impact
through our innovative products and helping people live a
Life Without
Limitations®. At the
same time, we
take responsibility for our
environmental impact and continually improve
our environmental
management and
performance.
However, we
are faced with
a dilemma: while
expanding our
operations to reach more patients
and enhance their quality
of life is crucial,
this growth is currently
linked to
increased greenhouse
gas emissions
due to global
infrastructure
constraints.
Our main challenge
is to decouple
our growth
from these
emissions. Our
efforts contribute
to the UN
Sustainable
Development
(SDGs) Goal
12 on
Responsible Consumption and
Production, and Goal
13 on
Climate Action. As
a signatory
of the
United Nations
Global Compact,
we are committed
to upholding
its environmental
principles,
integrating
sustainability
into our
operations, and supporting global efforts to protect our planet.
Climate Change (ESRS E1)
Addressing climate
change is crucial
for ensuring
the long-term
sustainability
and resilience
of our business.
By actively working
on climate initiatives,
we not
only mitigate risks
associated with climate
change but also
unlock opportunities for innovation and growth. Our
commitment to climate action demonstrates
our responsibility
to stakeholders
and helps us
align with global
sustainability
goals, ultimately
contributing
to a healthier planet and a more sustainable future for all.
Climate Transition
Plan (E1-1)
In 2025, Embla Medical
established a Climate Transition Plan
inspired by the requirements of
the European
Sustainability
Reporting
Standards (ESRS)
and the
Science Based
Targets initiative
(SBTi). Our
science-based
targets are consistent with the Paris Agreement objective of
limiting global warming to 1.5°C.
Past and
Current Actions
Since 2023,
we have
initiated
supplier sustainability
assessments,
implemented
eco-design
in our
packaging,
investigated and piloted
circular solutions, optimized our
transportation and distribution,
improved energy
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efficiency, and transitioned over 95% of our
electricity consumption to renewable energy
sources.
We have
also implemented
ISO 14001:2015
environmental management systems at selected
sites for
several years. Together,
these actions form
the foundation for our transition plan.
Emissions Profile
and Risks
As disclosed in 2024, approximately 90% of
Embla Medical’s base year GHG emissions occur
in Scope 3 (Purchased Goods and Services, and
Transportation and Distribution), while Scope 1 and
2 together account for approximately 10%. This
indicates a significant dependency on raw materials
and logistics, creating potential locked-in emissions
and transition risks.
Strategic
Actions (2026–2030)
Our Climate Transition Plan focuses on five
workstreams: Sustainable Procurement,
Eco-Design
Integration, Circular Solutions, Transportation
Optimization, and Energy Transition. Each
workstream
includes tailored
training
and awareness
programs to support effective implementation.
Integration
with Business
Strategy
The Climate Transition Plan is embedded within
our Responsible for Tomorrow program, and
integrated
into product
development,
supply chain
management,
and operational
efficiency initiatives.
Governance
and Monitoring
Governance of the Climate Transition Plan is
anchored in our Responsible
for Tomorrow program,
ensuring cross-functional accountability and
oversight. Progress is monitored through defined
KPIs and reported annually to ensure transparency
and accountability.
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71
Policies (E1-2)
The Embla
Medical Environmental
Policy states
that we
aim to
minimize our
negative environmental
impact
by reducing greenhouse
gas emissions to
mitigate climate change,
adapt to climate
change impacts, while
promoting energy efficiency and transitioning to renewable energy sources.
Actions
(E1-3)
Embla Medical’s actions
and resources in
relation to climate
change policies
are managed
under our Responsible
for Tomorrow program, explained in
chapter GOV-1
.
In 2025, we
focused our efforts on
the preparation of our
Climate Transition
Plan, conducting
a Climate
Scenario Analysis,
and executing
pilot projects
on circular
solutions.
Life Cycle
Assessment (LCA)
Embla Medical has developed internal expertise
and established a procedure for conducting
LCAs on our
products. Previously, external consultants performed LCAs
for our key
products. This internal expertise is
crucial to
our ongoing efforts
to map
emissions across our
product portfolio and
serves as the
foundation for
implementing
feasible design
changes to
reduce emissions
and support
our efforts
towards circular
solutions.
Circular Solutions
We are committed to advancing circular solutions that optimize material use and
support sustainable
growth, strengthening resilience in the healthcare sector.
Our recent
stakeholder
engagement
and market
analysis confirmed
that permanent
product ownership
is not
always required to
meet customer needs.
In some
cases, temporary or
metered access to
mobility-enhancing
solutions offers greater value and sustainability benefits.
Based on these insights, we
conducted an impact analysis of major
product portfolios in 2025, identifying
opportunities
for eco-design
and service-based
business models.
We completed
a circular
pilot in
full compliance
with medical device regulations,
validating the feasibility of
circular product use. Additional
pilots are under
evaluation to deepen understanding and quantify customer benefits.
To accelerate progress,
we launched the
Circular Solutions Initiative under
our Responsible for Tomorrow
program to
capture, prioritize,
and implement
scale-up projects.
These actions
will enable
systematic
integration
of circularity into our
business practices and set the
foundation for broader adoption in
the coming years.
Suppliers and Environmental Performance
Approximately 90% of our base year emissions originate from
our value chain, primarily from purchased goods,
reflecting the importance of supplier collaboration and management
in achieving our science-based targets.
Össur, Embla Medical’s largest
commercial entity, has assessed the
environmental sustainability performance
of key suppliers through annual surveys since 2023, encouraging them to join
our sustainability journey.
In 2025, Össur invited 59 suppliers, representing over 80% of direct goods
spend, to participate, achieving
a 93% response rate. As in previous years, suppliers were scored on a 100-point scale and grouped into four
categories: Unaware (0-20%), Aware (20-50%), Engaged (50-80%),
and Advanced (80-100%).
The 2025
results show significant
progress: 34% of
suppliers are now
in the Engaged
or Advanced categories,
up from
25% in
2024. We
welcome this
improvement
and will
use the
results for
further supplier
engagement.
The survey
will continue
annually, with
the goal
of increasing
the proportion
of Engaged
and Advanced
suppliers
year-over-year.
UNAWARE
AWARE
ENGAGED
ADVANCED
2025
2024
2025
2024
2025
2024
2025
2024
Suppliers (%)
25.4
28.1
33.9
39.1
23.7
17.2
10.2
7.8
Taxonomy
The information about Taxonomy-eligible CapEx is included in the notes 11,
12 and 14 to Consolidated Financial
Statement in lines representing additions and business combinations. Financial figures disclosed as
Taxonomy-
eligible OpEx are included in the Consolidated Income Statement –
specifically within lines of sales and
marketing, research and development and general and administrative
expenses. In 2025, Embla Medical did
not meet the requirements of alignment in the understanding of European
Union Taxonomy, resulting in no
aligned capital and operating expenditures.
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Targets (E1-4)
Embla Medical has received
validation from the Science
Based Target initiative (SBTi)
for our science-based
targets for
reduced Greenhouse
Gas emissions.
We have
identified
and implemented
several decarbonization
levers, outlined in our climate transition plan, see
section E1-1
.
Our Science-based
Targets:
■
Near-term 2030:
Embla Medical commits to reduce absolute scope 1 and 2 GHG emissions by 79% by
2030 from a 2019 base
year. Embla Medical also commits to reduce absolute scope 3 GHG emissions
from purchased goods and
services, fuel- and energy-related activities, upstream transportation
and distribution, and downstream
transportation and distribution 25% by 2030 from a 2021 base year.
■
Long-term 2050:
Embla Medical commits to
reduce absolute scope 1
and 2 GHG emissions
by 90% by 2050
from a 2019 base
year.
Embla Medical
also commits
to reduce
absolute
scope 3
GHG emissions
90% by
2050 from
a 2021
base year.
Progress on
Scope 1 and
2 Science-based
Targets
In 2025, our Scope 1 and market-based Scope 2 emissions were reduced by
68% compared to our 2019 base
year. This significant reduction is primarily due to
our commitment to purchasing Energy Attribute Certificates
(EACs) to confirm renewable electricity claims under the market-based approach.
As reflected in our Climate
Transition Plan we aim to meet our 2030 target by continuing to focus on energy
efficiency in our largest
facilities, the transition to electric leased vehicles and to purchase Energy Attribute
Certificates (EACs) for
renewable electricity.
2019 BASE
YEAR
2025
2024
2030
TARGET
2050
TARGET
Scope 1
& 2
emissions
(tCO
2
e)*
**
7,760
2,460
2,700
1,600
800
Scope 1
(tCO
2
e)**
2,870
2,290
2,390
Scope 2
market based
(tCO
2
e)
4,890
170
310
Scope 1 &
2 emissions %
change (-/+) from base
year
0%
-68%
-65%
-79%
-90%
*CO
2
-equivalent emissions (CO
2
, CH
4
, N
2
O) from company facilities
and vehicles, and purchased
electricity (market-based),
steam, heating,
and cooling for own use.
**Base year and 2024
year figure restated. See
accounting policies for
details.
Progress on
Scope 3 Science-based
Targets
The categories included in our
Scope 3 science-based targets are
Purchased Goods (cat. 3.1), Fuel-
and Energy
Related Activities
(cat. 3.4),
Upstream
Transportation
and Distribution
(cat. 3.4)
and Downstream
Transportation
and Distribution (cat.
3.9). In 2025,
the emissions from these
categories increased by 1%
compared to our
2021
base year.
As reflected in
our Climate Transition
Plan we aim
to meet our
2030 target by
decoupling our growth
from
our emissions
by sustainable
procurement,
applying eco-design
principles,
implementing
circular
solutions,
and optimizing the transportation and distribution of goods.
2021 BASE
YEAR
2025
2024
2030
TARGET
2050
TARGET
Scope 3 emissions (tCO
2
e)*
77,930
78,440
82,450
58,400
7,800
Scope 3 emissions %
change (-/+) from
base year
0%
1%
6%
-25%
-90%
*CO
2
-equivalent emissions (CO
2
, CH
4
, N
2
O) from purchased goods,
fuel- and energy-related
activities, and both upstream
and downstream
transportation and distribution of
goods. Base year and 2024 year figure
restated. See accounting policies
for details.
§ Acccounting Policies –
Targets Related to Climate Change Mitigation
and Adaptation (E1-4)
Science-based targets are
developed in accordance
with the requirements
of the Science
Based Target initiative
(SBTi),
with greenhouse gas (GHG) emissions
calculated following the Greenhouse
Gas Protocol.
Progress on Scope 1 and 2 emissions
targets is assessed by comparing current
year’s emissions against the 2019 base
year
emissions, both in absolute
terms and percentage change.
These emissions cover
CO
2
-equivalent emissions (CO
2
, CH
4
, N
2
O) from
company facilities and vehicles, as
well as market-based purchased electricity,
steam, heating, and cooling for
own use.
Progress on Scope
3 emissions targets
is assessed by
comparing current year’s
emissions against the
2021 base year
emissions,
both in absolute terms and percentage
change. These emissions originate
from purchased goods, fuel-
and energy-related
activities, as well as upstream and
downstream transportation and distribution.
The figures restated for
2024 and the base
year result from adjustments
in Scope 1 GHG
emissions related to
mobile combustion
and Scope 3 emissions in Category
1 – Purchased goods. For further
details on this restatement, see the accounting
policies for
Gross Scope 1, 2 and 3 Emissions
(E1-6).
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73
Energy
Consumption
and
Mix (E1-5)
§ Accounting Policies –
Energy Consumption and Mix (E1-5)
Energy consumption covers
stationary and mobile
combustion, purchased
electricity and district
heating.
Stationary Combustion
Gas consumption from
stationary combustion
is monitored at eight
manufacturing and distribution
sites located in Mexico,
the US,
the UK, and the Netherlands. To
ensure data completeness, gas
consumption at patient care locations
is estimated using a ratio of
consumption per full-time equivalent
(FTE), combined with country-level
statistics on natural gas use for heating.
Mobile Combustion
Mobile combustion is monitored through fuel consumption data from owned and leased vehicles, as well as distances driven under the
Embla Medical car allowance system. This covers over 300
vehicles across Europe, the U.S., Mexico, and emerging
markets. The mobile
combustion figures
for 2024 have
been restated to
include companies
acquired in the
previous reporting
year.
Purchased Electricity and
District Heating
Electricity consumption is
monitored at manufacturing
and distribution sites
in Iceland, Mexico,
the US, the UK,
Germany, and the
Netherlands. District heating is monitored
in Iceland.
For purchased electricity
at our global network
of patient care facilities,
consumption is estimated
using an emission
factor per FTE,
derived from available data
in Europe, Australia, and US. This factor is then extrapolated to ensure
comprehensive coverage across
all O&P clinic locations. To achieve
comprehensive coverage for electricity,
additional extrapolation is performed
for Embla Medical
entities not included above. This represents
approximately 3% (2024: 5%) of
the total electricity cost within the
consolidation.
Electricity consumption data
is connected to
grid datasets, providing
detailed energy mix information
for each grid.
Net revenue in 2025
for Embla Medical
is USD 929 million
(2024: USD 855 million)
as shown in Net
sales line in the Consolidated
Income Statement.
At Embla Medical, we
are committed to reducing our
environmental impact through responsible energy
management. In 2025, our total energy consumption was
30,610 MWh, up from 29,540 MWh in
2024.
Despite this increase, our energy
intensity per net revenue decreased
to 33.0 in 2025
from 34.5 in 2024.
The share
of energy
from renewable
sources rose
to 31%,
compared to
29% in 2024.
Our total
purchased
electricity was 18,540 MWh, up from 17,170 MWh in 2024*.
ENERGY CONSUMPTION
AND MIX
(MWh)
2025
2024
Fuel consumption from coal and coal products
0
0
Fuel consumption from crude oil and petroleum products*
5,490
6,300
Fuel consumption from natural gas
4,410
4,090
Fuel consumption from other fossil sources
0
0
Consumption of purchased
or acquired electricity, heat
steam and cooling from
fossil sources*
8,910
8,660
Total fossil energy consumption*
18,810
19,050
Share of fossil sources in total energy
consumption (%)
61%
64%
Consumption from nuclear sources
2,170
1,980
Share of consumption from nuclear
sources in total energy consumption (%)
7%
7%
Fuel consumption for renewable
sources, including biomass
(also comprising
industrial waste of biologic origin, biogas, renewable hydrogen, etc.)
0
0
Consumption of purchased
or acquired electricity, heat
steam and cooling from
renewable sources*
9,630
8,510
The consumption of self-generated non-fuel renewable
energy
0
0
Total renewable energy consumption*
9,630
8,510
Share of renewable sources in total energy
consumption (%)
31%
29%
Total energy consumption*
30,610
29,540
Energy Intensity
Per Net
Revenue
Total energy consumption from activities in high climate impact sectors
per net revenue from activities
in high climate impact
sectors (MWh/USD
million)*
33.0
34.5
*2024 year figure restated.
See accounting policies
for details.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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Gross Scopes
1, 2,
3 and
Total GHG
Emissions (E1-6)
Embla Medical conducted an assessment of all fifteen Scope 3 emissions categories
defined by the
Greenhouse Gas Protocol. Based on this assessment, seven categories were
identified as significant and are
therefore included in our disclosures.
In 2025, our total market-based greenhouse gas (GHG) emissions across Scope
1, Scope 2, and significant
Scope 3 categories amounted to 100,840 tCO
2
e, compared with 107,090 tCO
2
e in 2024, representing a year
on year decrease. The reduction was primarily driven by lower emissions from
purchased goods and business
travel, reflecting updated industry average emission factors for both key raw materials
and traveling activities.
In addition, emissions from fuel
and energy related activities declined, because purchased energy
attribute
certificates were mainly sourced from hydropower. Conversely,
we observed an increase in emissions from
upstream transportation and distribution, reflecting business expansion and
outreach to new markets.
Our GHG emissions intensity relative
to net revenue provides
insight into how effectively we
are decoupling
emissions from business growth.
In 2025, our total market-based
GHG emissions intensity
was 108.6 tCO
2
e
per USD million of net revenue, improving from 125.3 tCO
2
e per USD million in 2024. This represents an 13%
reduction in emissions intensity, driven by both lower total emissions and increased
net revenue.
GROSS SCOPES 1, 2,
3 GHG EMISSIONS
2025
2024
2025 / 2024 %
Total Scope 1,
2, and 3
emissions (tCO
2
e)
Total GHG emissions,
locations-based*
104,810
111,110
-6%
Total GHG emissions,
market-based*
100,840
107,090
-6%
GHG emissions
intensity per net
revenue (tCO
2
e/USD million)
Total GHG emissions
(location-based) per
net
revenue*
112.9
130.0
-13%
Total GHG
emissions (market-based)
per net
revenue*
108.6
125.3
-13%
GROSS SCOPES 1, 2,
3 GHG EMISSIONS
2025
2024
2025 / 2024 %
Scope 1 GHG
emissions (tCO
2
e)
Gross Scope 1 GHG emissions*
2,290
2,390
-4%
Stationary combustion
950
850
12%
Mobile combustion*
1,320
1,540
-14%
Fugitive emissions
20
0
n/a
Scope 1 GHG
emissions from regulated
emission trading schemes (%)
0
0
0%
Scope 2 GHG
emissions (tCO
2
e)
Gross location-based Scope 2 GHG emission
4,140
4,330
-4%
Gross market-based Scope 2 GHG emissions
170
310
-45%
Scope 1 and
2 emissions (tCO
2
e)
Gross Scope 1
and 2 GHG
emissions,
market-based*
2,460
2,700
-9%
Significant Scope 3
GHG emissions
(tCO
2
e)
Gross Scope 3 emissions (tCO
2
e)*
98,380
104,390
-6%
Category 1 - Purchased goods and services*
67,860
73,670
-8%
–
Purchased goods*
64,200
69,980
-8%
–
Purchased services
3,660
3,690
-1%
Category 2 - Capital goods*
5,470
5,700
-4%
Category 3 -
Fuel- and energy-related
activities
1,060
1,230
-14%
Category 4 -
Upstream transportation and
distribution*
11,850
9,890
20%
Category 6 - Business traveling
4,210
6,100
-31%
Category 7 - Employee Commuting*
6,600
6,450
2%
Category 9 -
Downstream transportation and
distribution*
1,330
1,350
-1%
*2024 year figure restated.
See accounting policies
for details.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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§ Accounting Policies –
Gross Scope 1, 2
and 3
Emissions (E1-6)
Scope 1 emissions
cover emissions
from stationary
combustion,
mobile combustion, and fugitive emissions.
Emissions are calculated by connecting
energy consumption
data to relevant emissions factors
for the calculation of tCO
2
e.
Energy consumption for Stationary
and Mobile Combustion is
calculated in accordance
with the accounting
policies for
Energy
Consumption and Mix
(E1-5). The mobile combustion
figures for
the previous year have been restated
to account for acquired
companies not included in last
year’s report.
Fugitive emissions arise from the
use of refrigerants in our
cooling systems in
Iceland and Eindhoven.
In 2024, there
were
no refrigerant refills in our systems.
Scope 2 emissions
cover emissions
from purchased
electricity
and district heating.
Emissions are calculated
by connecting
consumption data
to
relevant emissions factors for the
calculation of tCO
2
e.
For electricity, we report using both
the location-based
method (average
grid emission
factors) and
the market-based
method supported by Energy Attribute
Certificates (EACs).
This approach ensures compliance
with CSRD and ESRS
requirements for
dual reporting
and transparent
disclosure of
renewable energy sourcing.
EACs are purchased to confirm renewable
electricity claims
under the market-based approach
and are obtained both
bundled with electricity from our
utility provider and unbundled
through accredited
traders. Certificates
are retired
in proportion
to consumption.
In line with GHG
Protocol Scope 2
Guidance, electricity
matched
with confirmed EACs is assigned an
emission factor of zero.
For more information on the calculations
on purchased
electricity and district
heating, see
the accounting policy
for
Energy Consumption and Mix (E1-5).
Net revenue
in 2025 for Embla Medical is
USD 929 million
(2024: USD 855 million) as shown in
Net sales line in the
Consolidated Income Statement.
Net revenue is used to
calculate emissions
intensity of
significant emissions
categories.
Scope 3 emissions
Embla Medical evaluates all 15 Scope
3 categories outlined
by the Greenhouse Gas Protocol using
the operational
control approach. Of these, 10 categories
are relevant to our
operations and
emissions calculated.
Categories contributing
more than 5% of total Scope 3 emissions
are classified as
significant. This results in disclosure
of 5 significant categories
which are Purchased Goods and Services,
Capital Goods,
Upstream Transportation
and Distribution,
Business Travel,
and
Employee Commuting. In addition,
emissions from Fuel-
and
Energy-related Activities and Downstream
Transportation and
Distribution are deemed significant
and disclosed as they are
included in our science-based targets.
The seven significant
emissions categories cover 97% of all relevant
emissions
categories. Internal reassessment
is conducted every third year
to evaluate whether
the significance
of individual
categories has
changed.
For each
category, emissions
are calculated
by connecting
category specific activity data or spend
data to relevant
emissions factors for the calculation of
tCO
2
e.
To enhance
transparency, the
tables in
this chapter
have been
reorganized so that all information
is now presented in two
tables instead of three. As part of
this change, the additional
Scope 3 categories that were previously
shown separately
are now included within the Total
GHG Emissions table. This
revision increases the previously reported
2024 figures. The
total location-based GHG emissions are
now 25% higher, and
total market-based GHG emissions
are 26% higher. The same
percentage increase
also applies
to the 2024
GHG Intensity
Per
Net Revenue figures.
3.1
Purchased Goods and Services
Purchased goods are categorized into
three groups: raw
materials, outsourced finished components,
and outsourced
finished goods. Emissions from raw
materials are calculated
using activity data by weight and industry-average
emission
factors. For outsourced finished components
and goods,
emissions are estimated using spend
data combined with
country-specific emission factors. The
data is calculated based
on 80% of
total spend on purchased
goods, with the
remaining
20% extrapolated to ensure completeness.
Emissions from
purchased services are calculated
based on Embla Medical’s
total spend.
This reporting year, for purchased
goods, we achieved improved
accuracy in our data collection process
for patient care facilities.
This resulted in more accurate data
for purchased goods in
patient care facilities both for the
current reporting year and
prior years. We updated the figures
for prior year to reflect
those data changes.
For purchased goods,
we have also
adjusted
spend data for inflation, both for current
reporting year as well
as prior years. Additionally, the figures
for 2024 and the base
year have been restated to include
companies acquired in the
previous reporting year. Therefore,
historical figures for 2024
and the base year have been restated.
3.2
Capital Goods
Emissions from capital goods
are calculated based
on
Embla Medical’s spend, using country-specific
emission factors.
The emissions calculations have been
revised for Capital Goods
current reporting year by adjusting
spend data for inflation,
where applicable. To ensure methodological
consistency,
emission data for
2024 was adjusted
for inflation and
restated in
the report.
3.3
Fuel- and Energy-Related
Activities
This category includes upstream emissions
associated with
energy consumed in company operations.
Calculations are
based on Scope 1
and 2 energy
use and cover
fuels, electricity,
and district heating.
Emission factors
are applied according
to
energy source and consumption data.
3.4
Upstream transportation
and distribution
This category includes logistics services paid
for by Embla
Medical. Emissions are based on activity data, calculated
using the
distance-based method on a well-to-wheel
(WTW) basis. From
2025, we report on upstream and
downstream transportation
as separate lines. The division is determined by calculating
proportions from financial data. For consistency, the same
methodology has been applied to
2024 figures.
3.6
Business Travel
Emissions from business travel are
collected through Embla
Medical’s global travel system
which monitors emissions from
air travel and trains. The data covers
approximately 60% of
booked travel, with
the remaining
data extrapolated
to ensure
completeness. Emissions are calculated
on a well-to-wheel
(WTW) basis.
3.7
Employee Commuting
Emissions from employee commuting
are estimated through an
annual desk
study based
on the number
of employees
across five
regions: EMEA, Iceland, North America,
South America, and APAC.
The study
uses region-specific
assumptions and
emission factors,
which are reviewed and updated regularly
to reflect changes
in commuting patterns and data
availability. The comparative
figure for 2024 has been updated based on new
data regarding
commuting distances.
Consequently, the restated
number for
emissions from employee commuting in
2024 is 11% lower
than
previously reported.
3.9 Downstream transportation
and distribution
This category includes logistics services paid
for by the
customers of Embla Medical. Emissions
are based on activity
data, calculated using the distance-based
method on a
well-
to-wheel (WTW) basis.
From 2025, we
report on upstream
and
downstream transportation as separate
lines. The division is
determined by calculating
proportions from financial
data. For
consistency, the same methodology
has been applied to 2024
figures.
GHG Removals
and
Carbon Credits
(E1-7)
As a part of our science-based targets, Embla
Medical is committed to achieving Net Zero by
2050 by reducing emissions by 90% from base
years. The remaining emissions will be neutralized
through the purchase of carbon removal credits.
Embla Medical did not purchase carbon removal
credits in 2025.
As part of our commitment to mitigation beyond
our value chain, Embla Medical partners with
SoGreen to empower girls in developing countries
through education, which contributes to climate
change mitigation. This project also supports the
UN Sustainable Development Goal 5 on Gender
Equality and fosters innovation. Embla Medical has
contracted to purchase 500 pending avoidance
credits per year for five years, totaling 2,500 credits.
This method is currently in the certification process,
and since these are not removal credits,
they will not
be used to meet our Net Zero target.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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Pollution (ESRS E2)
At Embla Medical,
we are committed
to responsible
manufacturing practices and minimizing pollution
from our operations. The materiality of ESRS E2
Pollution
is primarily
driven by
the potential
financial
impact of possible restrictions on
the use of certain
chemical substances used in our operations.
Therefore, this chapter focuses mainly on our
management
of the
use of
chemical
substances.
Policies (E2-1)
At Embla
Medical,
we use
various chemical
products
in the design and manufacturing of our products.
In our Environmental Policy we aim to minimize
our negative environmental impact by
preventing
and reducing pollution and the use of harmful
substances
across our
value chain.
We apply
a risk-
based approach
and have
a certified
environmental
management system according to
ISO 14001:2015
in our
largest manufacturing and
distribution sites,
and in
some of
our patient care
facilities. As
part of
these systems,
we have
processes in place
to avoid
incidents
and emergency
situations,
and if
they occur,
to control and limit their impact on people and the
environment.
Actions (E2-2)
Our approach to chemical management is designed
to protect
our employees
through
safe usage,
ensure
regulatory compliance, and minimize environmental
impact through proper waste management.
As part
of our
Safety Management
System, we
have
implemented comprehensive emergency
response
plans for chemical spills, leaks, and other incidents
at our
largest manufacturing and
distribution sites,
using a risk-based approach. These plans ensure
quick and effective action to protect both workers
and the environment. We use Safety Data Sheets
(SDS) to provide detailed information on safe use,
hazards,
handling,
storage, and
emergency
measures.
Additionally, we conduct Job Safety Analyses
(JSA) in
our manufacturing
processes
to identify
potential hazards associated with
chemical use.
We implement
measures
to mitigate
these risks,
including engineering controls, personal protective
equipment
(PPE), and
safe work
practices.
For further
information on our actions to maintain
a safe
workplace,
please refer
to
chapter S1
.
We take full responsibility for ensuring regulatory
compliance in the use of chemicals, recognizing that
this strengthens our business resilience against
potential restrictions on their use, distribution, and
commercialization. Staying informed about changes
to existing
regulations,
as well
as new
regulations
that
may affect our operations, is a priority.
Our internal Regulatory Committee is dedicated to
monitoring developments in chemical regulations,
evaluating their relevance to our operations, and
ensuring
appropriate
responses.
We conduct
annual
compliance reviews at our largest manufacturing,
distribution
and patient
care facilities,
and regulatory
changes identified are forwarded to the Regulatory
Committee for evaluation, as needed. Compliance
extends to our supply chain, where we maintain
strong collaboration with our trusted suppliers to
ensure adherence to chemical legislation. As part of
our manufacturing processes,
we have
implemented
procedures for the safe disposal of chemical waste,
including recycling and treatment processes, to
minimize environmental impact. For
more details on
our waste management, please refer to
chapter E5
.
Targets (E2-3)
Embla Medical has not yet set formal targets for
managing substances
of concern
and substances
of very
high concern.
While we
have built
a strong
foundation
for understanding
ESRS E2
requirements,
ongoing regulatory uncertainty has led us to take
a cautious
approach to
new initiatives. We
remain
committed to
responsible chemical
management.
Substances of Concern and
Substances
of Very
High Concern
(E2-5)
Embla Medical strives to replace substances of
concern with safer alternatives whenever possible.
While developing a comprehensive overview
remains important, ongoing regulatory
uncertainty
makes us cautious about investing in projects that
may be subject to change. Clear definitions and
an authoritative list are still lacking, which limits
our ability to report quantities used or leaving
our facilities. Despite these challenges, we
remain
committed to transparency and responsible
chemical management.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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Waste
End-of-Life
Resource Use
and Circular
Economy (ESRS E5)
At Embla
Medical, we
are committed to
optimizing our raw
material yield
to minimize waste.
We are
actively mapping
our product
portfolio in
relation to emissions and
market demands and taking
initial steps towards
adopting circular
solutions.
Our existing
value chain
is predominantly
linear,
and to
successfully
introduce
circular
solutions,
we must
overcome
challenges of
both an
economic and regulatory
nature. For
circular
solutions to succeed,
all key stakeholders
in our value chain
must recognize
the value
of transitioning from
a linear
to a
circular business
model.
Policies (E5-1)
In our Environmental Policy we aim to minimize our negative
environmental impact by preventing and reducing pollution,
while
striving for the sustainable sourcing and reuse of raw materials.
Targets
(E5-3)
Medical Devices
Össur, the largest commercial entity of Embla Medical, aims to ensure
that 95%
of its
sold finished
products are
packaged according
to Össur’s
Environmental Packaging Criteria by 2030. Product packaging has a
relatively short lifetime and once it has served its purpose
of protecting
the product through transport and storage, our goal is to ensure that it
can be easily recycled and disposed of with as little impact as possible.
The Össur Environmental Packaging Criteria provides guidance on
sustainable
packaging
design and
we are
implementing
sustainable
packaging across different product lines
in a prioritized order
with
packaging volumes and impact in mind.
Regarding our product targets, Embla Medical is actively exploring
opportunities to increase material yield, reduce waste, and use raw
materials with lower emissions. These efforts are a part of our
Climate
Transition Plan as detailed in
chapter E1
.
Resource Inflows
and Outflows
Energy
Water
Emissions
Raw
Materials
Products
Product Loss
Waste
& Waste
Materials
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
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78
Resource Inflows
(E5-4)
At Embla Medical, our resource inflows include a variety of essential
materials and utilities used. These include raw materials such as
plastics, silicone, composites, textiles and metals, which are integral
to our manufacturing processes. We also purchase components and
finished goods from our suppliers. Energy, in the form of electricity
and gas, powers our operations, while water is utilized across our
facilities. Additionally, equipment is employed in our manufacturing
activities. Our packaging materials primarily consist of paper,
cardboard, and plastics.
Embla Medical faces significant challenges
in providing comprehensive
and reliable data on the total weight of materials and products used
in 2025, as in 2024. These challenges are mainly due to the complexity
of tracking and verifying data across our entities and global supply
chains. Additionally, ensuring the accuracy of
data related to sustainably
sourced materials and the use of secondary materials requires
consistent monitoring, which has not yet been standardized across our
global operations. As a result, Embla Medical is unable to report this
information for 2025.
However, we have taken important steps towards the sustainable
sourcing of packaging materials. Within Össur’s bracing & supports
product portfolio,
we have
focused
on FSC
certified packaging
materials.
In 2025, 24% of these products were sold in packaging with FSC
certification, representing 35% of total sales
§ Accounting Policies (E5-5)
Embla Medical only reports on
waste generated under Resource Outflow
(E5-5). We
are currently
unable to
report on
the recyclable
content rates
for all
products and
packaging across all entities and
brands.
The waste data covers
waste generated at our
largest manufacturing and distribution
sites in
Iceland, Mexico,
Germany, the
US, the
UK, and
the Netherlands
as well
as all
patient care facilities. The activity
data collected represent around 98% of
total Waste
disposal costs in Embla
Medical. Data collected
includes waste type,
disposal method,
and weight. Where direct data
is unavailable, waste volumes are
estimated using FTE
ratios and site type to ensure completeness.
No radioactive waste is generated
in Embla Medical’s operations and
is therefore
excluded from
the accompanying
table on
Waste from
Operations.
within this product group.
Resource Outflows (E5-5)
At Embla Medical, our primary resource outflows include the products
and packaging we place
on the market,
as well as waste
generated from
our manufacturing processes and product losses due to quality issues
and discontinuation. We recognize that a significant portion of the
environmental impact of products and packaging is determined during
the design phase.
Durability, repairability,
and recycling
play crucial
roles
in reducing
this impact.
Therefore,
we emphasize
eco-design
and circular
solutions as essential strategies to meet our science-based targets.
For further
information,
see
chapter E1
.
At Embla
Medical,
the expected
lifetime,
or durability,
of a
product
is the
period in which it is expected to be safe and effective for its intended
use. Regular safety checks, maintenance, repairs, or upgrades may be
necessary during the expected lifetime. The expected lifetime of Össur
products can be
found here
.
Embla Medical is dedicated to delivering medical products that meet
the highest standards of safety and performance. As part of this
commitment, we ensure servicing for all serviceable products to the
end of their expected life. Serviceable products include those eligible
for repairs,
which currently
encompass
all bionic
products
and selected
mechanical products.
WASTE FROM
OPERATIONS
2025
(METRIC TONS)
2024
(METRIC TONS)
Waste Diverted from Disposal
2,110
2,180
Hazardous Waste
80
50
Non-Hazardous Waste
2,030
2,130
– Preparation for Reuse
0
0
– Preparation for Recycling
2,010
2,110
– Preparation for Other Recovery
20
20
Waste Diverted to Disposal
1,140
1,240
Hazardous Waste
80
90
Non-Hazardous Waste
1,060
1,150
– Incineration
600
500
– Landfill
460
650
– Other Disposal Options
0
0
% of Non-Recycled Waste
35%
36%
Total Hazardous Waste
160
140
Total Waste
3,250
3,420
Embla Medical is currently unable to report on the recyclable
content
rates for all products and packaging across all entities and brands.
However, progress is
being made. Össur,
the largest commercial entity
of Embla Medical, has defined its Environmental Packaging Criteria,
which stipulates that final product packaging must consist of 100%
recyclable boxes with clear disposal and recycling information. By the
end of 2025, 48% of final products sold under the Össur brand had
been updated to meet these criteria compared to 45% in 2024. This
represents 59% of sales.
Waste Management
Good waste
management is
an important
part of
responsible
operations
where material
yield is
maximized to reduce
pollution and disposal
costs
in operations.
Embla Medical
has a certified
environmental
management
system according to ISO 14001:2015 in our largest manufacturing and
distribution sites, and in some of our patient care facilities (the ISO
certification is not covered by PwC assurance). The main waste types
reflect the
raw materials
used in
manufacturing,
e.g. metals,
composites,
silicone, plastics and textiles.
In 2025,
Embla Medical
operations generated
a total
of 3,250
metric tons
of
waste.
Of this,
2,110 metric
tons were
diverted from
disposal, primarily
through
recycling, resulting
in a
recycling rate
of 65%,
compared to
64% in
2024.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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EU Taxonomy Key
Performance
Indicators
(KPIs)
Embla Medical is obliged to disclose information on
EU Taxonomy in accordance with Regulation (EU)
2020/852 of the European Parliament and of the
Council. This means reporting on the company’s
environmentally sustainable economic
activities that
support the six objectives of the regulation, which
are:
■
Climate change mitigation (CCM),
■
Climate change adaptation (CCA),
■
The sustainable use and protection
of water
and marine resources (WTR),
■
The transition to circular economy (CE),
■
Pollution prevention and control (PPC) and
■
The protection and
restoration of biodiversity
and ecosystems (BIO).
All reported data regarding EU Taxonomy is
provided at a consolidated level
for the entire group.
In 2025, Embla Medical is reporting on the following
Taxonomy-eligible activities:
■
CE 1.2. Manufacture of
electrical and electronic
equipment (manufacturing of bionics),
■
CCM 4.16. Installation
and operation of
electric
heat pumps,
■
CE 5.2. Sale of spare
parts (sale of spare parts
of bionics),
■
CE 5.5. Product-as
-a-service and
other circular
use- and result-oriented service models (rental
program of products),
■
CCM 6.5. Transport by motorbikes, passenger
cars and light commercial vehicles (leasing
of passenger cars),
■
CCM 7.2. Renovation
of existing buildings
(renovations and reconstruction of leased
buildings),
■
CCM 7.3.
Installation, maintenance and
repair
of energy efficiency equipment (installations
or repairs of air conditioning and ventilation
systems),
■
CCM 7.4. Installation, maintenance and repair of
charging stations for electric vehicles
in buildings,
■
CCM 9.1.
Close to
market research, development
and innovation (costs of projects related to
sustainable solutions).
In 2025, the EU Taxonomy Regulation was
implemented in Iceland
in its
primary form under
Act No. 25/2023. The Icelandic adoption did not
incorporate
the Commission
Delegated Regulation
of
4 July 2025, being part of the “Omnibus I package”
intended to simplify reporting requirements. As the
Icelandic legislative approach remained unchanged
at the time of publishing this Annual Report, we
have decided to report
on the EU Taxonomy
without
applying any simplifications outlined in Commission
Delegated Regulation of 4 July 2025.
§ Accounting Policies
- Taxonomy
EU Taxonomy’s
Key Performance
Indicators (KPIs)
refer to
the share of turnover, operational
expenditures (OpEx) and
capital expenditures (CapEx) coming
from the Taxonomy-
eligible and Taxonomy-aligned activities.
Taxonomy-eligible activity
refers to economic activity
included in the Delegated Acts of the
EU Taxonomy
regulation, indicating
its potential
to be environmentally
sustainable.
Eligibility and Alignment
Assessment
The eligibility assessment
involved a
comprehensive review
of
all activities outlined in the Delegated
Acts to the Taxonomy
Regulation. After
identifying the
eligible activities performed,
the alignment assessment was conducted
by examining the
technical screening criteria for the activities
undertaken.
In 2025, the Substantial Contribution
Criteria or Do No
Significant Harm
requirements were
not met for
the selected
eligible activities, therefore they could
not be considered
aligned.
Embla Medical has not implemented any CapEx plan as
understood under point 1.1.2.
of Annex I to Commission
Delegated Regulation (EU) 2021/2178.
The eligible turnover
has been calculated as the proportion
of net turnover derived
from sales of products
and services of
Taxonomy-eligible activities
(the turnover numerator)
divided
by net sales
disclosed in Consolidated
Income Statement
(the
turnover denominator).
For two of the three eligible turnover activities,
CE 1.2 and
CE 5.2., two assumptions are made.
First, the product
margin from Patient
Care facilities
is estimated. Second,
it is
assumed all products in Clinics were
sold.
The aligned turnover
has been calculated as the proportion
of net turnover derived from sale of products
and services of
Taxonomy-aligned activities
(the turnover numerator)
divided
by net sales presented in Consolidated
Income Statement
(the turnover denominator).
In 2025, we
did not recognize
any
Taxonomy-aligned activities related
to turnover.
The eligible OpEx
has been calculated as the numerator
divided by
the denominator,
where denominator
covers direct
non-capitalized cost related to research
and development,
building renovation, short-term lease,
maintenance and
repair, and any other direct expenditures
relating to the day-
to-day servicing of assets of property,
plant and equipment.
The aligned OpEx
was determined
by dividing the
numerator,
which includes costs associated with
Taxonomy-aligned
activities, by the same denominator
used in the eligible OpEx
calculation. In 2025, there were no
activities relating to OpEx
that were aligned with the EU Taxonomy.
The eligible CapEx
has been calculated as the numerator
divided by the denominator, where
the denominator covers
additions to tangible and intangible assets
during the
financial year. Additions include
those coming from business
combinations and are considered
before depreciation,
amortization and any re-measurements,
including those
resulting from
revaluations and
impairments, for
the relevant
financial year and excluding fair value
change and goodwill.
Additions have been presented in
notes 11, 12 and 14 of the
Consolidated Financial Statements. The CapEx numerator has
been determined as part of the denominator
connected to
Taxonomy-eligible
activities. Following a revised
interpretation
of eligibility regarding the climate change
adaptation
environmental objective, we have chosen
not to report any
capital expenditure under activity CCA
8.2. “Computer
programming, consultancy and related
activities” and to
restate the comparative period’s eligible
amount to 0%.
According to Commission Delegated Regulation
(EU)
2021/2178, Embla Medical is required
to provide the
quantitative breakdown of amounts
presented in numerator
of eligible CapEx KPI. The numerator
in 2025 consists of
additions to property, plant and equipment
(45%), additions
to right of use assets (39%), and business
combinations
(16%). The most significant change in
capital expenditures
during the reporting
period was related
to facility renovations
and refurbishments, which decreased
from prior year.
The aligned CapEx
was calculated by dividing
the numerator,
which represents capital expenditures coming
from Taxonomy-
aligned activities, by the same denominator
as used in the
eligible CapEx calculation. No activities
have been recognized
as aligned with EU Taxonomy concerning
CapEx KPI in 2025.
Double Counting
Embla Medical takes
every measure to
avoid double counting
in the allocation in the numerator
of eligible turnover, CapEx
and OpEx KPIs. This is done by extracting
the amounts from
company financial systems, choosing
activities referring
to specific assets, costs and turnover
and using filters to
screen out overlapping
positions to ensure
that they are
not
duplicated in KPIs and between economic
activities.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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SUSTAINABILITY
STATEMENT
Our People
At Embla Medical, enhancing the social well-being of our people, including our own workforce,
workers in our
value chain, and our customers, is integral to our success. By prioritizing health, safety, and overall well-being,
we foster a supportive and productive environment that drives innovation and growth. This commitment not
only strengthens relationships with stakeholders but also ensures
that our operations contribute positively
to society. Investing in social well-being helps us build a resilient and sustainable
business while contributing
to the UN Sustainable Development (SDGs) Goal 3 on Good Health and Well-Being, Goal 5 on Gender Equality,
and Goal 8 on Decent Work and Economic Growth. As a signatory of the United
Nations Global Compact,
we actively support its social principles, promoting human rights, fair labor practices, and inclusive
workplaces across all our operations.
Own Workforce
(ESRS S1)
Embla Medical
and its subsidiaries
operate in over
40 countries.
With around 4,500
employees, our
diverse
team collaborates seamlessly to improve people’s mobility.
By valuing diverse perspectives, we foster
an environment where individual strengths,
skills, and knowledge thrive. All
manufacturing locations and
distribution centers have adopted lean manufacturing processes in addition to extensive loss prevention
initiatives focused on both personal and
operational safety. Local health and
safety committees lead our
efforts to ensure employee safety while adhering to local practices and policies.
Policies (S1-1)
Our main
policies for
managing material
impacts on
our own workforce
include the
Human Rights
Policy,
Health and
Safety Policy,
Opportunity
& Inclusion
Policy and
Code of
Conduct. These
policies
are communicated
internally through training and awareness and accessible on
our website
.
In our Human Rights Policy, we
pledge to operate in a manner that
respects and promotes human rights,
including
labor rights,
across all
aspects of
our operations.
This policy
is designed
to promote
honest and
ethical
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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conduct and
applies to all
individuals employed by,
or affiliated
with, Embla Medical
entities. We are
committed
to eradicating
all forms
of discrimination,
providing
a safe
and healthy
work environment,
and we do
not tolerate
any form
of modern slavery,
including forced labor,
child labor, compulsory
labor, or human
trafficking.
As outlined
in our Health
and Safety
Policy, safety
is our first
priority and
integral to
everything we
do.
We consistently adhere to relevant
health and safety standards, and
ensure employees are committed to
providing
a safe
and healthy
work environment.
Our commitment
extends to
continuous
improvement
and
proactive measures to
prevent accidents and
incidents, fostering a culture
of safety and
well-being for all.
Our Equal
Opportunity
Policy outlines
our commitment
to providing
equal employment
opportunities.
This commitment applies to all individuals involved in the
operations of Embla Medical and prohibits
discrimination by any employee of Embla Medical.
Our Code
of Conduct
outlines the
norms, rules,
responsibilities,
and proper
practices at
Embla Medical.
It guides
employees
in their
day-to-day activities,
ensuring
compliance with
all applicable
laws and
legislation.
Together with our values, it helps maintain and strengthen our company culture.
Engaging With
Own Workforce
(S1-2)
At Embla Medical, we are committed to
open and continuous engagement with our workforce to address
impacts, increase job
satisfaction and foster
an inclusive, supportive
work environment. We
prioritize learning
and professional
development opportunities while
promoting work-life balance.
Additionally, we
actively work
to mitigate
negative impacts such
as discrimination, inequality,
occupational injuries, and
pressures from
external barriers
like regulations and
industry-specific challenges. The
EVP of
People, Strategy
& Sustainability
is responsible
for ensuring
that engagement
aligns with
our commitments
to our
own workforce,
and reporting
progress to the Executive Management.
We engage
with our
employees daily
through various
channels to
keep them
well informed.
This includes
sharing
news on the company
intranet, global and local
announcements, and regular employee meetings. Quarterly
meetings
provide comprehensive
updates
on company
developments,
goals, and
progress.
Additionally,
one-on-
one meetings between employees and
managers foster open communication, deliver personalized feedback,
and support professional growth. This approach helps employees feel
valued and aligned with the company’s
goals, while addressing concerns promptly and effectively.
We have
a Competency
Framework
that defines
the behaviors
driving
successful
performance
and supports
our
business strategy. Our core competencies are
Collaboration, Communication, Driving Results, Customer Focus,
and Change. We conduct
annual performance reviews to
assess the past year’s
performance, as well
as plan for the
year ahead. Individual development plans are
created with consideration of the
overall strategy and goals, providing
employees with opportunities
to grow within the
organization. Regular check-ins
between employees and
managers
are encouraged
to discuss
performance
and competency
development.
These discussions
are supported
by Embla
Medical’s
Development
Guide, which
outlines
training
and development
opportunities
for each
competency.
In 2025, our employee
survey was conducted globally
on a quarterly basis.
This confidential and anonymous
process
allows us
to capture
employee
feedback
on a
variety of
topics, such
as engagement
and well-being.
The insights
gained from
these surveys
help us
better understand
the concerns
and needs
of our
diverse workforce,
enabling
informed
decision-making
and addressing
potential
negative
impacts
on our
employees
effectively.
We also
ensure that
our employees
have access
to the
People (Human
Resources) function
for advice,
assistance,
and support. This open-door policy
is a vital
part of our
engagement strategy, allowing employees to
voice their
concerns, seek guidance and receive the support they
need to address any issues they may
face.
Remediating Negative Impacts To Own Workforce (S1-3)
At Embla
Medical, we
have implemented a
comprehensive approach to
prevent, identify, and
mitigate negative
impacts on our workforce. We
offer training in Opportunity and Inclusion
to raise awareness and foster
an
inclusive workplace culture. Additionally,
we actively support
underrepresented groups and ensure
equal
opportunities for all employees. Our global Code of
Conduct training helps employees uphold the highest
standards
and minimize
potential risks.
For more details
on Code of
Conduct, refer
to the
Our Business chapter
.
We recognize
that despite
our best
efforts,
safety incidents
can occur.
Our Safety
Management
System includes
robust mechanisms for reporting,
investigating and remediating such incidents.
Employees are encouraged
to report near misses,
accidents and unsafe conditions
through accessible channels. Each report
initiates a
structured
response process,
where our
response team
promptly addresses
the issue
and implements
corrective
measures to
prevent recurrence. We
encourage our employees
to submit suggestions
on how to
improve safety
in their work area. In
2025, a total of
893 employee suggestions were implemented, compared to 755
in 2024.
This continuous
feedback loop
not only
amplifies employee
voices but
also transforms
their insights
into
meaningful safety improvements across our workplaces.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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We provide multiple avenues for employees to
raise concerns. Employees can discuss and report
issues directly to managers, supervisors, the
compliance team, or the People team. We ensure
that all
concerns
are heard
and addressed
promptly
and effectively. Our employee survey serves as a
key platform for feedback and raising concerns,
featuring an
anonymous solution where
employees
and managers
can interact
on various
topics without
revealing their identities.
The Embla Medical Speak-Up Line is our global
whistleblower and helpline system, available 24
hours every day of the year to anyone wishing to file
a report or raise a concern. All employees and other
stakeholders
can utilize
the Speak-Up
Line to
provide
anonymous
feedback
and complaints.
Employees
are
made aware of the Speak-Up Line through
our Code
of Conduct
Training.
Everyone who
reports an
issue in
good faith is guaranteed
protection from retaliation,
and all reports are treated as confidential.
Actions
(S1-4)
Our commitment to our workforce is reflected in
targeted
actions that
address
key impacts,
manage
risks, and leverage opportunities, ensuring both
employee
satisfaction
and organizational
resilience.
We place strong emphasis on fostering and
maintaining a diverse workforce, recognizing that
promoting opportunities and
inclusion fuels better
decision-making and innovation.
Opportunity & Inclusion
In 2025, we provided 665 courses, books,
videos, and audiobooks for our employees in
our
comprehensive Opportunity & Inclusion training
programs, to build Opportunity & Inclusion
awareness among our
employees and managers.
These resources are accessible through our
eLearning platform. We have global and
regional
Opportunity & Inclusion councils that set targets,
implement actions, and monitor our progress. The
global Opportunity & Inclusion council works on the
overall strategy
and implementation company-wide,
deciding on initiatives such as employee
survey
questions, training,
system data
improvement,
awareness campaigns, and more.
We continue to use our employee survey to
monitor and measure employees’ perceptions
of our Opportunity & Inclusion efforts. When
employees outside of
the US
were asked
if they
were satisfied with Embla Medical’s efforts to
support opportunities and inclusion (for example,
in terms of gender, ethnicity, disability, and socio-
economic
status), we
scored 8.3
on a 10
point scale.
Managers
and members
of the
People team
prioritize
addressing any deviations promptly, ensuring a
supportive and equitable workplace for all. In 2025,
we continued conducting our employee survey on a
quarterly basis, including
open comment sections,
to
understand employee sentiments and priorities on
these topics.
We conduct
regular salary audits
to ensure
equal pay
for equal work, adhering to the Equal Employment
Opportunity Commission (EEOC) standards in the
Americas, and similar principles in other regions. In
Iceland, we are Equal Pay Certified and have yearly
audits covering
for e.g.
review of
the Equal
Pay Policy,
Equality Opportunity Policy, objectives and plans.
We are
committed
to inclusive
recruitment
practices.
Our training of hiring managers includes an
introduction to inclusive language and unconscious
bias, helping to
attract a diverse
workforce. We have
a diversity dashboard available for leaders so they
can monitor the diversity in their teams. In 2025,
we continued bi-monthly new-hire networking
events in
the Americas,
which are
well-attended and
appreciated for fostering inclusivity. As part of our
recruitment
outreach,
we have
contracted
with large
job recruitment-based websites.
We prioritize the well-being and work-life balance
of our employees by offering flexible work
arrangements for roles that can be performed
remotely. This flexibility allows employees to
manage their work and personal lives and is highly
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STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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appreciated by
our team members.
Embla Medical’s
Give Back
Program offers all
employees globally one
paid volunteer
day per
year. On this
day, our
team
members dedicate their
time to
various causes
and
charities, making a positive impact
in the communities
where we live and work. We believe in the power
of giving back and encourage our employees to
participate in meaningful activities that
support
local initiatives.
Talent Development
At Embla Medical, we emphasize the importance
of attracting, retaining and investing in the skills
and competencies of our workforce to ensure
long-term, sustainable success.
We recognize that
continuous, intentional development is essential
to maintaining a workforce equipped to meet the
needs of a dynamic and evolving global market.
All employees have
access to Talent
Development
modules through our internal portal, which
includes over 23,000 eLearning courses. We also
encourage our customers to engage with some
of our internally produced eLearning modules,
as we believe that enabling our customers to
grow their skillsets alongside us is an important
aspect of our sustainable offerings. We support
professional development through a range of
learning methods, recognizing that employees
learn in
diverse ways.
These include
formal training
programs focused on soft skills, leadership, and
functional expertise, tailored to career stages from
entry-level to senior professionals. In addition, we
offer mentoring,
facilitated
coaching,
job shadowing,
and 360° assessments, while encouraging cross-
functional
collaboration
to promote
learning
through
experience
and peer
exchange. In
2025, we
launched
our AI-powered ‘Career Hub’, a dynamic platform
that enables employees to explore career paths,
discover relevant learning programs, and connect
with networking opportunities across the company.
All people leaders participate in our LEAD program,
a global leadership
development initiative,
where
we identify the
key attributes
of great leadership
and how to successfully lead at Embla Medical.
Participants learn through experiences, guided
exercises, feedback, coaching, and peer learning.
We actively
encourage
employee-driven
initiatives,
enabling individuals to propose new learning
opportunities
aligned with
their professional
goals
and the organization’s strategic direction.
To ensure the effectiveness
of our programs,
we
evaluate their success through
immediate feedback
surveys and targeted questions in our employee
engagement surveys. These insights are used by
our global Learning and Development team to
continuously refine
and enhance
our learning
offerings.
Our goal is to
foster an environment of continuous
improvement, where every
employee has access to
the
resources
needed to
thrive.
By continuously
assessing
and refining our talent development
initiatives, we aim
to support our employees’ growth
and maintain our
competitive edge.
Safety Management Training
Ensuring
the health
and safety
of our
workforce
is a core priority embedded in our operational
strategy.
Through our
Safety Management
System,
we take a proactive approach through training
and awareness
on identifying
and mitigating
risks
before they result in harm. This system enables
us to
continuously
monitor workplace
conditions,
assess potential hazards
and implement preventive
measures that support a safe and resilient working
environment. Our approach includes conducting
Job Safety Analyses to evaluate task-specific risks,
performing quarterly fire safety audits to maintain
emergency
readiness
and delivering
targeted
health
and safety training to ensure that all employees
understand and follow established procedures.
These efforts are complemented by awareness
campaigns
that promote
safe behaviors
and reinforce
a culture of shared responsibility. We view safety
as an opportunity to empower our workforce and
actively
encourage
employee
participation
in shaping
safer workplaces through feedback, innovation and
collaboration.
OVERVIEW
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INNOVATION
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Targets
(S1-5)
Embla Medical
has established
clear targets
to enhance
positive impacts
and manage
any material
negative impacts
on our own
workforce. Our
targets are
set through
a structured
process, embedding
principles
of gender
equality, employee
engagement,
and workplace
safety. They
reflect our
manufacturing
context, where
workplace
safety is
critical, and
are informed by
stakeholder expectations, regulatory
requirements, and internal
performance benchmarks.
OUR PEOPLE
TARGET 2025
2025
2024
Employee Engagement,
Retention and
Attraction
Gender balance, total workforce
*
50:50 (+/- 10%)
Female:Male
49:51
Female:Male
49:51
Female:Male
Gender balance, managers **
YoY improved
balance
42:58
Female:Male
40:60
Female:Male
Gender balance, top management level ***
YoY improved
balance
24:76
Female:Male
26:74
Female:Male
Engagement Index
>8.0
(10-point scale)
7.9
(10-point scale)
7.9
(10-point scale)
Participants in LEAD program
100%
(All new managers with
direct
reports)
100%
100%
Health and Safety
at Work
Implemented employee safety suggestions
n/a
893
755
Total Recordable Incident Rate (TRIR)
per 100 FTEs
<1.0
0.8
0.6
TRIR per 500 FTEs
<5.0
4.0
3.0
Number of recordable incidents
n/a
20
13
*Flexibility in gender
split allows for non-binary
gender, recognizing
that some employees
may not wish to
be categorized
**Includes all employees with
people management role
***Includes all employees with
Vice President role and
higher management levels
Gender Balance
We aim to achieve an equal
gender split across
our workforce, ensuring that gender balance
is actively considered in all key employment
decisions, including recruitment, promotions and
redundancies. In line with these objectives, we
remain focused on year-on-year improvement to
achieve balanced gender representation among
managers and at the top management level.
In 2025, women represented 49% of the total
workforce, 42% of managers,
and 24% of top
management positions.
Employee Engagement
Our target is to maintain an engagement index
above 8 on a 10-point scale, reflecting our
commitment to fostering a highly
motivated and
connected workforce. In 2025, the engagement
score reached 7.9, the same as in 2024.
Leadership Development
At Embla Medical, all new managers are
expected
to complete our LEAD leadership program within
their first six months. In 2025, with a target
of 100%
participation, all new leaders successfully completed
the program.
Health and Safety
We proactively strive to minimize work-related
incidents and monitor performance using the Total
Recordable
Incident
Rate (TRIR).
TRIR is
continuously
tracked globally and at individual sites to ensure
transparency and drive continuous improvement.
For 2025,
the TRIR
target was
set at
below 5.0
per
500 FTEs, and the actual TRIR was 4.0.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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Gender Identity
of Employees
at Period
End*
2025
2024
Female
Male
Other
Total
Female
Male
Other
Total
Employees
Contract
Type
Headcount
FTE
Headcount
FTE
Headcount
FTE
Headcount
FTE
Headcount
FTE
Headcount
FTE
Headcount
FTE
Headcount
FTE
Total
employees**
2,127
2,046
2,196
2,141
5
5
4,328
4,192
2,070
1,993
2,127
2,079
6
6
4,203
4,078
Permanent
employees
2,058
1,990
2,129
2,094
5
5
4,192
4,089
1,995
1,927
2,060
2,030
6
6
4,061
3,963
Temporary
employees
69
56
67
47
0
0
136
103
75
66
67
49
0
0
142
115
Non-guaranteed
hours employees
1
0.1
2
0.6
0
0
3
0.7
2
0.7
0
0
0
0
2
0.7
*Gender as specified by
the employees themselves
**As defined in note
6 in the Consolidated
Financial Statements
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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Workers
in
the
Value
Chain (ESRS S2)
Embla Medical partners with suppliers across our
global value chain who share our commitment to
quality,
ethical
standards,
and sustainable
practices.
Össur,
our largest
commercial
entity, oversees
most
of our outsourced manufacturing and supplier
relationships. Accordingly, the initiatives outlined
here primarily reflect Össur’s practices. We are
committed to continuously improving how we
manage and reduce negative impacts on workers
throughout our supply chain.
Policies (S2-1)
To safeguard
workers in
our value
chain, we
rely on
three core policies: the Human Rights Policy, the
Speak-Up Line Policy, and our Code of Conduct.
These documents
clearly
define our
expectations
for
ethical and sustainable behavior from all suppliers.
Processes for Engaging with Value
Chain
Workers About
Impacts (S2-2)
Össur has established comprehensive supplier
management systems designed to build long-
term partnerships and promote continuous
improvement. Suppliers are evaluated
based on
Environmental, Social, and Governance (ESG)
criteria. Those identified as high-risk, based on
spending thresholds and Social Progress Index
ratings, undergo additional third-party social audits.
These
audits follow
recognized
industry
standards
and include
confidential interviews with
randomly
selected workers to assess working conditions
and legal compliance. Findings are reviewed
collaboratively with suppliers,
and Össur
provides
support to help them implement improvements.
Remediation of
Negative Impacts
(S2-3)
When audits reveal critical issues, suppliers are
required to develop and execute a remediation
plan. Össur supports this process through targeted
training, risk and safety seminars, and awareness
initiatives. We maintain a zero-tolerance policy on
human rights violations, corruption, and bribery,
and ensure that workers are informed about
the Speak-Up Line. Suppliers who fail to meet
our standards or refuse to engage in corrective
actions may face relationship reviews and potential
disengagement.
Acting
on Material
Impacts on
Value
Chain Workers (S2-4)
High-risk suppliers must sign the Embla Medical
Code of Conduct, which includes strict provisions
on human rights, labor rights, and the prohibition
of forced or child labor.
It also sets expectations for
third-party relationships, reinforcing our alignment
with the UN Global Compact principles.
Targets
on Managing
Material
Impacts
(S2-5)
In 2025, third-party social audits were
conducted at
10 supplier sites. Each audit used a 100-point scale
to assess performance and categorize issues as
critical, major, or minor. Our goal is for all suppliers
to score at least 95%, with no critical issues.
We are pleased to
report that 8 out
of 10 suppliers
met this target.
For the remaining
two, corrective
action plans are underway
to close identified gaps
and
drive ongoing
improvements across our
value chain.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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Consumers and End-Users (ESRS S4)
Embla Medical makes a positive impact on
consumers and end-users through our core mission of
improving
people’s mobility. We are
committed to reaching individuals
of all ages and
activity levels with our
innovative
mobility
solutions and
delivering
safe and reliable
quality products
to our customers
and end-users.
Our product
and service offerings are commercialized under several industry-leading brand names.
Our customers
are medical professionals,
primarily within Orthotic
& Prosthetic (O&P)
Clinics, where
clinicians fit
patients with
the necessary
products
and solutions
and subsequently
claim reimbursement
from private
or public
insurance providers.
Our end-users
are a diverse
group of
individuals,
reflecting
the breadth
of our mobility
solutions portfolio.
Policies (S4-1)
Our main policies on managing
the material impacts
of our products and services on consumers and
end-users include our
Quality Policy, Human Rights
Policy, Information Security Policy, Personal Data
Protection Policy, and Code of Conduct.
Embla Medical business entities follow quality
policies where the purpose is to ensure that our
products meet the highest standards of quality and
safety. We design, manufacture and sell medical
devices where quality and safety
are an intrinsic part
of all processes.
The purpose of Embla Medical’s Human Rights
Policy is to ensure the company operates in a
manner that respects and promotes human rights
across all aspects of its operations. It is intended
to promote honest and
ethical conduct and applies
to all people employed by or affiliated with Embla
Medical entities.
Embla Medical collects and handles personal
data to conduct business
and provide services to
customers. We prioritize treating data with the
utmost respect and confidentiality. To ensure
compliance with data
protection legislation, we have
implemented an Information Security Policy and a
Personal Data Protection Policy.
Our Code of Conduct serves as a guide for
employees in their day-to-day activities, ensuring
compliance with all applicable laws
and regulations.
Our policies
and Code
of Conduct
are communicated
internally through training and awareness programs
and are accessible on
our website
.
Engagement
With
Customers
and
Patients (S4-2)
We actively
engage with
our customers
and patients
regarding our products and services and highly
value their feedback. Customer feedback is closely
monitored by our business entities and serves as
a key input for Research & Development when
improving
existing products
or developing
new ones.
As a part of our quality management systems,
we address feedback received from customers and
end-users. All feedback received, including positive
comments, complaints, and serious incidents, are
evaluated and analyzed on an individual basis.
The responsibility for product quality is
maintained
within each brand entity.
The end-users of our
products receive information
about available clinical options from their licensed
healthcare provider. Our leading product solution
brands also provide product information and
educational resources through online channels,
and products are accompanied by an IFU
(Instructions for Use) as applicable. In-person
events
such as Mobility Clinics and customer training
also provide participating end-users with valuable
information about the variety of product options
available to them. We provide end-users with
evidence-based and factual information, as
required
by medical device regulations.
The Embla Medical Speak-Up Line is our global
whistleblower and helpline system, available 24
hours each day of the year to anyone wishing to
file a report, ask a question, or make a complaint.
Customers and end-users can also use the Speak-
Up Line to provide feedback or report concerns.
Reports can be submitted anonymously.
OVERVIEW
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MARKETS
INNOVATION
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GOVERNANCE
SUSTAINABILITY STATEMENT
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Actions (S4-4)
The primary impact of Embla Medical on consumers and
end-users is positive, driven by our core mission to
improve people’s mobility. While
the risk of
incidents exists, we
mitigate it by prioritizing
the safety and quality
of our
products.
Our robust
quality management
systems,
compliant with
international
medical device
standards
and regulations, continuously evolve as
the standards expand and change.
Embla Medical entities maintain
certified Quality Management Systems (QMS)
based on ISO standards, ensuring
compliance with applicable
medical device regulations in the countries where we operate.
ISO Certificates
BRAND
ISO STANDARD
Össur
ISO 13485
Fior & Gentz
ISO 13485
College Park
ISO 13485
ForMotion Clinics (some clinics have ISO 9001)
ISO 9001
For Information Security, Embla
Medical uses ISO 27001:2022
as the standard framework.
We have set clear
targets of
maturity in all
controls that are
a part
of the
ISO 27001:2022 framework
and conduct a
formal internal
maturity assessment every year to
actively measure our progress in
implementing the controls. We train
our
employees in the
Code of
Conduct to
help them
to uphold
the highest
ethical standards in
line with
our company
culture and minimize potential risks of negatively
impacting our consumers and end-users.
Targets (S4-5)
At Embla Medical, we advance
our positive impact on consumers and
end-users by reaching more patients and
managing
material risks
and opportunities
through extensive
monitoring
of our quality
management systems
and
the Speak-Up Line.
As a medical device manufacturer, we operate under the EU Medical
Device Regulation and maintain a robust
ISO 13485-certified quality management system, which is subject
to regular independent third-party audits.
This framework includes strict regulatory requirements and comprehensive
monitoring metrics to ensure
product safety and compliance. These controls and performance indicators are mandated by law and
externally
verified, therefore, we do not define additional CSRD-specific targets under
ESRS S4, as our existing system
already meets and exceeds the necessary standards.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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SUSTAINABILITY
STATEMENT
Our Business
Ensuring ethical
and transparent governance
is vital
for building
trust
and credibility with our stakeholders.
It allows us to
demonstrate our
commitment to integrity and accountability, fostering a culture of
openness and responsibility. Transparent governance practices help
us effectively
manage risks,
make informed
decisions,
and achieve
our
sustainability goals.
Ultimately, this approach strengthens our reputation and supports
long-term success, and
at the
same time
contributes to UN
Sustainable
Development
Goal number
16 on
Peace, Justice
and Strong
Institutions.
As a signatory of the United Nations Global Compact, we uphold its
governance principles by fostering transparency, accountability,
and ethical
business practices
across all
levels of
our organization.
Business Conduct (ESRS G1)
Corporate Culture
(G1-1)
Communication with employees occurs daily
through in-person dialog, meetings,
digital channels, and more.
Our intranet provides
access to policies, procedures,
templates, and various other
guidelines and resources.
Additionally,
we use
internal communication
platforms to
share news
and updates,
both regionally
and globally,
fostering engagement among colleagues and teams.
Management hosts quarterly employee meetings
to discuss financial results,
key initiatives, and other
relevant
topics, ensuring employees are
well-informed. We conduct a
global workplace survey quarterly to
measure
engagement,
supplemented
by regular
employee surveys.
The results
of these surveys
are shared
and discussed
with employees, and each department identifies areas for
improvement based on these discussions.
Code of Conduct
At Embla Medical, we adhere to
our Code of Conduct, which is grounded
in our core values of Honesty,
Frugality,
and Courage,
deeply embedded
throughout
our organization.
The President
and CEO,
along with
top
management, serve as key spokespersons for our values and culture.
The Code of Conduct applies
to all employees globally and
is available in all main
languages of Embla Medical’s
office locations
and operations.
All employees
are required
to complete
regular training
in the Code
of Conduct,
which is also an integral part of the onboarding process for new employees.
OVERVIEW
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In addition to our Code of
Conduct, Embla Medical has implemented various policies that
provide practical
guidance
on compliance
and integrity
for all
employees.
These policies
are incorporated
into the
Code of
Conduct
training, ensuring that employees
receive training and awareness
on topics including, but
not limited to:
Anti-Corruption
and Bribery,
Competition,
Conflict
of Interest,
Fraud, Human
Rights, Speak-Up
Line, Interaction
with Healthcare Professionals,
Third-Party Relationships and
Environmental Responsibility. We
recognize the
benefits of taking a
holistic view of relevant
risks and combining efforts across
a broad range of
compliance
activities. This approach is expected to
have a positive, long-term impact on
our business, employees,
environment, and societies worldwide.
Speak-Up Line
The Embla Medical Speak-Up
Line is our global
whistleblower and helpline system, hosted
by an independent
external party to
ensure compliance with local
regulations, the General Data
Protection Regulation and other
privacy regulations.
All employees
are informed
about the
Speak-Up Line
through mandatory
Code of
Conduct
Training. The Speak-Up Line is
operated and monitored by the
Corporate Governance Office in accordance
with the Speak-Up Line Policy and
Investigation Management Manual. Subject matter experts tasked with
investigating reported incidents receive appropriate training.
In accordance
with the
Speak-Up Line
Policy,
everyone
who reports
an issue
in good
faith
is guaranteed
protection
from retaliation,
and all
reports are
treated
confidentially
as outlined
in the
investigation
manual. Reports
can also
be made
anonymously. The Speak-Up
Line is available
24 hours
every day of
the year, to
anyone wishing to
file a
report or
make a complaint.
The Speak-Up Line
is open to
employees, customers, and
all third
parties of Embla
Medical, and
is available in
all languages
of the
countries in which
Embla Medical and
its subsidiaries operate.
Embla Medical is subject to laws on Whistleblower protection, based on Directive (EU) 2019/1937.
Management of Relationships
with Suppliers (G1-2)
Embla Medical
is committed
to responsible
social and environmental
development,
respecting human
rights, and
making a positive impact. Cooperation with
suppliers is integral to achieving
this. If issues arise,
we engage with
our suppliers
and reserve
the right
to disqualify
any potential
supplier or
terminate any
relationship
with a current
supplier that
does not meet
our requirements.
As a medical
device manufacturer,
Embla Medical
has had supplier
controls in place for
many years to ensure
adherence to quality standards and safety
for our users. We
have also
collaborated with
our finished goods
suppliers for years
on property risk
assessment and human
rights. For more
information on our annual compliance
and social supplier audits, please
refer to
chapter S2
.
To learn about our
supplier surveys on environmental commitments, see
chapter E1
.
Prevention and Detection
of Corruption or
Bribery (G1-3)
As previously described, Embla Medical operates a
Speak-Up Line to detect potential
incidents of corruption
and bribery. The
Speak-Up Line Policy
and investigation manual
provides procedures around the
investigation
of cases
reported.
If needed,
the investigation
will be
outsourced
to an external
party. The
Governance Office
is
responsible for the investigations and can escalate matters to the Audit
Committee.
As preventive measures, all Embla
Medical employees receive regular awareness training
through the Code of
Conduct, which
is also
a part of
the onboarding
process for
new employees.
Anti-Corruption
and Anti-Bribery
is
included in
this training.
Selected groups of
employees who
are deemed to
be more exposed
to corruption and
bribery risks, undergo more in-depth training.
ACTIONS AND
PROGRESS
TARGET
2025
2024
Employees trained in the Code of Conduct*
>95%
93%
99%
Cases submitted to the Speak-Up Line
n/a
11
4
Harassment and discrimination
n/a
3
3
*Training of new
employees /onboarding
Anti-Corruption and Anti-Bribery
Our values - Honesty, Frugality and Courage - reflect our commitment to conduct
our business fairly and with
integrity, to use company assets wisely, and to speak up when confronted with unethical situations. Bribery and
corruption are strictly prohibited, and Embla Medical does not authorize nor tolerate any business practice
that
violates anti-bribery and anti-corruption laws or regulations, including
our Anti-Bribery and Anti-Corruption
(ABAC) Policy. All employees are informed of our ABAC Policy through the Code of Conduct
training.
A process with further guidelines, including outlining actions to address breaches in anti-corruption and
anti-bribery procedures and standards will supplement the policy.
Selected groups will receive more
in-depth ABAC training.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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§ Accounting Policies
(G1-4/G1-5/G1-6)
Incidents of Corruption
or Bribery:
Embla Medical collects data about
incidents of corruption or bribery
from its whistleblower function, the Speak-Up
Line. In addition,
the People function is
required to report
to the Governance
Office if reports
on corruption or bribery
are communicated to
the People
function through other means than the
Speak-Up Line, such as directly to
management. Any non-compliance related
to bribery or
corruption is reported to the Governance
Office.
Political Influence and
Lobbying Activities:
Embla Medical does not contribute
to political activities. Embla Medical’s
policy on political involvement
is to not actively engage in
political activity or publicly
support, or advocate
for, specific political
parties in the communities
or countries where we
do business.
Payment Practices:
Embla Medical is in the process of
implementing a net 60-day term payment
policy with exceptions for direct
purchases with long
invoice-to-receipt times (+30 days)
which have a net 90-day term. The 60-day
term is encouraged but in special
circumstances, such
as critical suppliers, a net 30-day
term is allowed. Critical suppliers are
defined as key silicone and bionic
part providers and certain
suppliers in Asia. Legal or local restrictions
require careful consideration and approval.
The data for the average time to
pay invoices,
or to close them
with credit notes,
includes all entities fully
incorporated into
the centralized Embla
Medical accounts payable
process
and represent 97% of our purchases
(2024: 91%).
The KPI reported under
G1-6 Payment Practices
does not fully align
with ESRS requirements.
The ESRS disclosure
requires data on the
average invoice payment time. Embla
Medical’s dataset also includes
some invoices closed by means other
than payment.
Incidents of Corruption
and Bribery (G1-4)
In both
2024 and
2025, there
were no
convictions
or fines
paid for
violations of
anti-corruption
and anti-bribery
laws. Additionally, no
actions were needed to
address breaches in procedures and
standards related to anti-
corruption and anti-bribery.
Political Influence
and Lobbying
Activities (G1-5)
It is Embla
Medical’s policy
not to actively
engage in
political
activity or
publicly support,
or advocate
for, specific
political parties in the communities or
countries where we operate. Likewise, Embla
Medical does not make
financial contributions to political parties, including for the year 2025.
While our
employees may
participate
as individual
citizens in
the political
process, decisions
to do so
are entirely
personal and
voluntary, and they
are personally responsible
for their
views and actions.
Only the
Embla Medical
Executive Management
team members
or those selected
by the CEO
may publicly
express the
company’s views
on legislation,
regulations,
or government
action. Other
employees may
communicate
the company’s
views only
with specific guidance from the CEO or Executive Management team members.
Public policy issues
have the potential to
impact Embla Medical’s business,
its employees, business partners,
shareholders,
and the communities
in which
Embla Medical
operates.
Embla Medical
believes that
in certain
cases
it may be appropriate, and in
the company’s best interest to contribute or
pay membership fees to trade and
industry associations and coalitions. The
use of any company
funds for contributions to Industry
Associations
must be approved by the head of the relevant business unit.
Embla Medical
is not registered
in the EU
Transparency
Registry.
No member of
the Embla Medical
management
or Board has held a public
administrative position in the 2 years before joining
the company.
Payment Practices (G1-6)
Fair payment terms
are crucial for
fostering trust, strengthening
relationships, and encouraging
collaboration
between Embla Medical and its suppliers. Paying suppliers
on time is crucial as timely payments ensure
sustainability
and growth.
We have set
our payment
terms in
line with
industry practice
outlined in
our Payment
Policy. In
2025, the
average time
it took to
pay or close
an invoice was
39.3 days,
compared to
35.5 days
in 2024.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
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SUSTAINABILITY
STATEMENT
Independent Limited Assurance Report
on
Selected Sustainability Data
To the Stakeholders
of Embla Medical
hf.
Embla Medical hf. (‘Embla Medical’ or “the Company”)
engaged us to provide limited assurance on Selected
Sustainability Data included in the
Sustainability Statement on pages 53-99
for the period 1 January
- 31 December
2025 marked with an icon “
” (the “Selected Sustainability Data”).
Our Conclusion
Based on the procedures we performed and the
evidence we obtained, nothing came to our
attention that
causes us
not to believe
that the Selected
Sustainability
Data for
the period
1 January
- 31 December
2025 for
Embla Medical
are prepared,
in all
material respects,
in accordance
with the
Sustainability
Accounting
Policies
developed by Embla Medical as stated on pages 53 - 101 (the “accounting policies”).
This conclusion is
to be read
in the
context of what
we state
in the remainder
of our
report.
What We Are
Assuring
The scope of our work
was limited to assurance over
the Selected Sustainability Data, as defined
in the first
paragraph
of our report,
including the
disclosures
in subsection
“EU Taxonomy”
on pages 79
- 83 with
Article 8
of
Regulation (EU) 2020/852 (the “Taxonomy Regulation”).
We express
limited assurance
in our
conclusion.
Professional
Standards
Applied
and Level
of Assurance
We performed a limited
assurance engagement in accordance with International Standard
on Assurance
Engagements
3000 (Revised)
‘Assurance
Engagements
other than
Audits and
Reviews
of Historical
Financial
Information’.
A limited assurance engagement
is substantially less
in scope than a
reasonable assurance engagement in
relation
to both
the risk
assessment
procedures,
including
an understanding
of internal
control,
and the
procedures
performed in response to the assessed risks; consequently,
the level of assurance obtained in
a limited assurance
engagement is substantially lower
than the assurance that
would have been obtained
had a reasonable assurance
engagement been performed.
Our Independence and
Quality Control
We have complied with
the independence requirements and other ethical
requirements in the International
Ethics Standards
Board for
Accountants’
International
Code of
Ethics for
Professional
Accountants
(IESBA Code),
which is founded on
fundamental principles of integrity,
objectivity, professional competence and due care,
confidentiality and professional behavior,
and ethical requirements applicable
in Denmark.
Our firm applies International Standard on
Quality Management 1, 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
regulatory requirements.
Our work was
carried out
by an independent
multidisciplinary
team with
experience in
sustainability
reporting
and assurance.
Understanding Reporting
and Measurement
Methodologies
The Sustainability
Data needs
to be read
and understood
together with
the accounting
policies.
The accounting
policies used for the
preparation of the Selected Sustainability Data
are accounting policies developed by
the
company, which Management is solely responsible for selecting and applying.
Work Performed
We are required
to plan and
perform our
work in
order to
consider the
risk of material
misstatement
of the
Selected Sustainability Data. In doing so and based on
our professional judgement, we:
■
Evaluated the appropriateness of the accounting policies used, their
consistent application and related
disclosures;
■
Made inquiries and conducted interviews with management with responsibility
for management and
reporting of the Selected Sustainability Data to assess reporting and
consolidation process, use of company-
wide systems and controls performed;
■
Performed limited substantive testing on a sample basis to underlying documentation and evaluated the
appropriateness of quantification methods and compliance with the accounting
policies for preparing
Selected Sustainability Data at corporate head office and in relation to
selected reporting sites;
■
Performed analytical review of the Selected Sustainability Data; and
■
Evaluated the evidence obtained.
OVERVIEW
STRATEGY
MARKETS
INNOVATION
PERFORMANCE
GOVERNANCE
SUSTAINABILITY STATEMENT
FINANCIAL STATEMENTS
Embla Medical -
2025 Annual Report
|
101
Management’s Responsibilities
Management is
responsible for:
■
Designing,
implementing
and maintaining
internal control
over information
relevant to
the preparation
of the
Selected Sustainability Data that is
free from material misstatement, whether due
to fraud or error;
■
Establishing objective accounting policies for preparing the Selected Sustainability Data;
■
Measuring and reporting the information in the Selected Sustainability Data based on the accounting
policies; and
■
The content of the Selected Sustainability Data.
Our Responsibility
We are responsible
for:
■
Planning and performing the engagement to obtain limited assurance
about whether the Selected
Sustainability Data for the period 1
January - 31 December 2025 are prepared, in
all material respects,
in accordance with the accounting policies;
■
Forming an independent conclusion, based on the procedures performed and the evidence obtained; and
■
Reporting our conclusion to the stakeholders of the Company.
Copenhagen,
3 February
2026
PricewaterhouseCoopers
Statsautoriseret
Revisionspartnerselskab
CVR no. 3377 1231
Rasmus Friis
Jørgensen
Torben
Jensen
State Authorized
Public Accountant
State Authorized
Public Accountant
© Embla Medical, 2026
Embla Medical hf.
Consolidated Financial Statements
31.12.2025
Table of Contents
Statement by the Board of Directors and President and CEO
1
Independent Auditor’s Report
5
Consolidated Income Statement
10
Consolidated Statement of Comprehensive Income
11
Consolidated Balance Sheet
12
Consolidated Statement of Cash Flow
14
Consolidated Statement of Changes in Equity
15
Notes to the Consolidated Financial Statements
16
Statement by the Board of Director and President and CEO
Embla Medical hf. Consolidated Financial Statements
2025
33
Embla
Medical
is
a
global
leader
in
non-invasive
orthopedics,
innovating,
producing,
and
providing
advanced
technological
solutions
within
the
prosthetics,
neuro
orthotics
and
bracing
&
supports
market.
The
Company
also
provides
patient
care
through
a global
network of
Orthotic and
Prosthetic
(O&P) facilities.
Embla Medical’s
mission is
to improve
the mobility
of our
end-users
so
they
can
live
their
Life
Without
Limitations®.
The
Company
is
headquartered
in
Iceland
and
owns
and
operates
subsidiaries
in
multiple
countries
around
the
world.
The
Company
sells
its
products
worldwide,
but
its
principal
markets
are
Europe
and
North
America.
The
Consolidated
Financial
Statements
of
Embla
Medical
hf.
as
at
and
for
the
year
ended
31
December 2025 comprise Embla Medical hf.
and its subsidiaries (together referred
to as "the Company" or "Embla Medical
”).
Embla Medical’s
Consolidated Financial
Statements are
prepared in accordance
with International
Financial Reporting Standards
(IFRS) accounting standards
as adopted by the European Union and
additional requirements in the Icelandic Annual
Accounts Act
no. 3/2006.
Operations in 2025
The total net sales of the Company
amounted to USD 928.7 million (2024: USD 854.9
million).
Organic sales increase was
6%. Net
profit amounted
to USD
83.6 million
(2024: USD
69.0 million).
Basic and
diluted earnings
per share
amounted to
US cents
19.6
(2024: US
cents
16.2). Earnings
before
interest,
taxes,
depreciation
and amortization
(EBITDA)
amounted
to
USD 185.9
million
and 20% of sales (2024: USD 169.1 million, 20%).
The total
assets of
the Company
amounted to
USD 1,730.5
million at
year end
(2024: USD
1,539.0 million),
total liabilities
were
USD 834.7 million (2024: USD 758.3
million) and total
equity was USD 895.8 million (2024:
USD 780.7 million). The equity
ratio at
year end was 52% (2024: 51%).
The Company
employed an
average
of 4,138
employees in
2025 (2024:
4,091) and
4,192 at
year end
(2024: 4,078).
Information
regarding salaries and salary related
expenses can be found in note
6.
In 2025
Embla Medical
managed to
grow the
business across
all regions
and business
segments.
Sales grew
6% organically
and
7% including
acquisitions.
Growth in
2025 was
driven by
Prosthetics
& Neuro
Orthotics and
Patients
Care mainly
with a
strong
performance in
EMEA and
supported by
recently launched
innovation.
Gross profit
margin was
62%, compared
to 63%
in 2024.
The gross profit
margin was positively
impacted by strong
sales in P&NO and
efficiency gains
in manufacturing but
was offset
by
negative impact from FX, tariffs
and turnaround initiatives in Patient
Care
No
subsequent
events
occurred
after
the
balance
sheet
date
that
would
require
disclosure
in
the
Consolidated
Financial
Statements.
Shareholders and share price
Embla Medical’s shares
are admitted to trading on
the Nasdaq Copenhagen stock exchange.
The market value of the Company
at
year end was USD 2,202
million (2024: USD 2,125 million).
The share price in DKK amounted
to 32.5 at year
end (2024: 35.6) and
decreased by 8.7% during
the year.
At year end,
registered shareholders
in Embla Medical
were 6,718 compared
to 6,095 at the
beginning of
the year.
It should
be noted
that due
to the
concentration
of trading
in Nasdaq
Copenhagen in
2017, about
1,600
shareholders that
held shares listed in
Iceland were consolidated
into a few
nominee accounts.
The ten largest
shareholders and
their
ownership
percentage
(net
of treasury
shares)
are: William
Demant
Invest
A/S
– 50.95%,
Interogo
Holding
AG –
11.54%,
Live Pension Fund –
6.05%, Arbejdsmarkedets
Tillægspension – 5.03%, SEB Investment
Management – 4.05%, Gildi Pension
Fund
– 3.48%, LSR Pension
Fund – 2.68%,
Handelsbanken Fonder
– 1.49%, Birta
Pension Fund
– 1.19%, ODIN
Fonder – 1.16%
.
William
Demant Invest
A/S (WDI) ownership
in Embla Medical
exceeded 50%
in January
2018. According
to WDI's announcement
at the
time, their intention
is to hold
50-60% of Embla Medical
’s
shares going forward
and they have
no intention of
taking over Embla
Medical or delisting Embla
Medical’s
shares from Nasdaq
Copenhagen. Furthermore, WDI
has no intention
of making changes to
Embla Medical’s strategy,
management or operations.
Statement by the Board of Director and President and CEO
Embla Medical hf. Consolidated Financial Statements
2025
34
Embla Medical shares and share contracts
Embla
Medical’s
total
share
capital
is
430.4
million
shares
with
a
nominal
value
ISK
1
each.
In
2025
in
connection
with
the
acquisition
of
Streifeneder
ortho.production,
new
shares
were
issued
raising
the
total
share
capital
in
nominal
value
by
0.7%,
from ISK 427.6
million to ISK
430.4 million resulting
in USD
15 million increase
in share
capital.
At year
end 2025
Embla Medical
held 2.7
million treasury
shares
that
equals to
0.6% of
issued shares.
The remaining
treasury
shares
held will
be used
to
fulfill
obligations
under
share
option
agreements
that
have
vested
or
will
be
vesting
in
2026.
Share
contracts
are
granted
to
management
and key
leaders.
In 2024
a new
long term
incentives
program
of performance
share units
("PSUs") and
restricted
shares
units
("RSUs")
was
initiated
in
accordance
with
approval
at
the
Company's
Annual
General
Meeting
for
2023.
This
program replaced the previous
share options plan. Total
granted and unexercised
share options and share units
at year end 2025
were 2.4 million shares
(2024: 3.9 million shares), of
which 1.2 million are exercisable
before year end
2026 and the remaining in
2027-2028. See further information in note
24.
Dividend proposal
In
line
with
the
Company‘s
Capital
Structure
and
Capital
Allocation
Policy,
the
Board
of
Directors
will
propose
to
the
Annual
General Meeting
in 2026
not to
pay a
cash dividend.
With emphasis
on prioritizing
investments
in growth
opportunities, value-
adding
investment
opportunities
and acquisitions,
Embla Medical
has
decided
to
discontinue
dividend
payments
and focus
on
returning excess
capital to shareholders
via purchase of
treasury shares
in accordance with
the Company’s
Capital Structure and
Capital Allocation Policy.
Corporate governance
and risk management
The Company
follows
the
Danish
Recommendations
for
Corporate
Governance
issued
by
the
Danish
Committee
on
Corporate
Governance,
available
at:
https://corporategovernance.dk/.
The Board
of Directors
complies with
applicable Icelandic
laws and
regulations,
the
Articles
of
Association
of
the
Company
and
the
Board
of
Directors'
Rules
of
Procedure,
which
addresses
the
Board’s
role
and
responsibilities.
The
Company’s
management
structure
consists
of
the
Board
of
Directors
and
the
Executive
Management, led by the
President and CEO.
The two bodies are separate,
and no person serves as
a member of both. The Board
of Directors
is composed
of six
members
elected by
shareholders
at each
Annual General
Meeting for
a term
of one
year.
The
Board
of Directors
consists
of three
women and
three
men and
is in
compliance with
Icelandic law
on gender
ratio.
No
Embla
Medical employee sits on the Board of Directors.
The President and CEO manages the Company’s
daily operations.
The
Board
of
Directors
has
established
three
committees,
the
Audit
Committee,
the
Nomination
Committee
and
the
Remuneration
Committee.
The
Audit
Committee
has
three
members
from
the
Board,
who
are
appointed
by
the
Board
of
Directors for
a term of one
year.
The Chairman of the
Board and
the Chairman of the
Audit Committee serve
on the Nomination
Committee together
with the President
& CEO
and the Remuneration
Committee. The
committees comply
with their respective
Terms of Reference,
which address their role and responsibilities
etc.
An
investment
in
Embla
Medical
involves
various
risks
as
the
business,
financial
conditions,
and
operational
results
rest
upon
certain
assumptions
and
could
have
negative
affect
the
Company.
Even
though
the
long-term
prospects
and
underlying
fundamental
drivers
of
our
markets
are
not
expected
to
change,
Embla
Medical
highlights
key
risks
which
are
currently
considered
the
most
relevant.
The
key
risks
identified
are:
reimbursement
landscape,
regulatory
requirements,
new
technologies,
industry
consolidation,
forward
integration
and
acquisitions.
Further
description
of
these
risks
as
well
as
other
relevant
material
risks
that
Embla
Medical
faces
can
be
found
in
the
Risk
Management
chapter
of
the
Annual
Report
and
Company’s website
.
Information about financial instruments
and financial risk management can be found
in note 34.
The Board of Directors
has an ongoing dialogue with
the President and CEO
on the identification, description
and handling of the
business
risks
to
which
the
Company
may
be exposed.
The Company’s
control
framework
in
relation
to
financial
processes,
is
designed
to
mitigate
risk
of
material
misstatements.
The
Company
designs
its
processes
to
ensure
there
are
no
material
weaknesses
with
internal
controls
that
could
lead
to
a
material
misstatement
in
its
financial
reporting.
The
external
auditor’s
role in these processes is included in the independent
auditor’s report.
Statement by the Board of Director and President and CEO
Embla Medical hf. Consolidated Financial Statements
2025
35
Sustainability at Embla Medical
Sustainability
is
embedded
into
Embla
Medical’s
strategy
and
throughout
its
organization.
The
Company
has
a
robust
sustainability
agenda
and
captures
its
commitment
under
the
theme
of
Responsible
for
Tomorrow®
recognizing
that
the
decisions and actions taken today,
will affect future generations.
The Company’s
Sustainability Commitment
is to provide
products and
services that contribute
to good
health, using responsible
production
methods
and
supporting
climate
action,
while
being
a
sponsor
for
inclusivity
and
transparency.
It
is
believed
that
sustainable growth is the only way
to build a successful and responsible business
for the benefit of future generations.
Our Environment
Embla Medical
takes
responsibility
for
its environmental
impact, has
set science-based
targets
and is
actively working
towards
Net-zero operations
by 2050. It is reducing the environmental
impact in the supply chain, and of the products and services.
Our People
The
Company
takes
responsibility
for
enhancing
the
social
well-being
of
the
people
across
its
value
chain.
It
develops
quality
products
and services
that improve
people’s
mobility,
nurtures the
well-being and
development
of its
employees
within a
safe
and
inclusive
work
environment.
Embla
Medical
partners
with
suppliers
that
are
committed
to
quality,
and
ethical
and
sustainable
practices,
and
creates
a
lasting
positive
impact
on
the
communities,
helping
more
people
to
live
a
Life
Without
Limitations®.
Multiple
policies
have
been
approved
and
implemented
to
support
and
guide
the
employees
and
other
stakeholders. Embla
Medical‘s policies are available
on the Company’s website:
https://emblamedical.com/policies
.
Our Business
The
Company
leads
its
business
with
integrity
and
transparency,
promoting
sound
governance
practices
in
all
its
activities.
In
accordance
with
its
values,
Embla
Medical
sets
high
ethical
standards,
and
has
a
zero-tolerance
policy
when
it
comes
to
corruption
and
bribery.
The
Company
guides
its
employees
through
the
Code
of
Conduct
and
offers
platforms
for
them
and
other stakeholders
to voice
any
potential concerns
through the
Embla Medical
Speak-Up
line. The
Board approves
a Corporate
Governance report
that includes
all the information
to be included
in the statutory
statement
referred
to in Article
66 (c) of
the
Icelandic Act
Annual Accounts
no. 3/2006,
as well
as explanations,
comments and
information
on each
recommendation
in the
Danish
Recommendation
for
Corporate
Governance.
The
report
is
available
on
the
Company’s
website:
https://www.emblamedical.com/investor
-relations/reports-and-presentations
.
The
Icelandic
Annual
Accounts
Act
no.
3/2006
requires
companies
in
Iceland
to
conclude
on
non-financial
information
in
the
Annual Report.
For 2025,
we are
disclosing the
information
regarding
sustainability
in reference
to the
Corporate
Sustainability
Reporting Directive
and European
Sustainability Reporting
Standards, and
including reporting
on sustainable
finance in line
with
the EU
Taxonomy
Regulation.
Embla Medical
has
obtained
limited assurance
according
to
ISAE 3000
on selected
sustainability
data
included in
the Sustainability
Statement
chapter
in the
Annual Report.
Embla Medical
is required
by the
EU Taxonomy
to
disclose
its
alignment
and
eligibility
of
turnover,
operating
expenses
and
capital
additions
with
six
environmental
objectives
stated in the EU 2020/852 regulation.
The results can be found in Sustainability
statement chapter in the
Annual Report.
Statement by the Board
of Directors and the President and CEO
According
to
our best
knowledge,
it is
our opinion
that
the Consolidated
Financial
Statements
give a
true and
fair
view of
the
consolidated financial
performance of the
Company for
the year 2025,
its assets, liabilities
and consolidated
financial position as
at
31
December
2025
and
its
consolidated
cash
flows
for
the
year
2025.
Furthermore,
it
is
our
opinion
that
the
financial
statements
and the
report of
the Board
of Directors
and the
President
and CEO
contain
a clear
overview of
developments
and
results in the Company's operations,
its position and describe the main risk factors and
uncertainties facing the Company.
In
our
opinion,
the
Sustainability
Statement
included
in
the
Annual
Report
represents
a
reasonable,
fair,
and
balanced
representation
of
the
Company's
sustainability
performance
and
are
prepared
in
accordance
with
the
stated
accounting
policies.
Furthermore,
disclosures
within
subsection
“EU
Taxonomy
KPIs”
in
the
environmental
section
of
the Sustainability Statement
are, in all material respects,
in accordance with Article 8 of EU Regulation
2020/852 (the “Taxonomy
Regulation”).
Statement by the Board of Director and President and CEO
Embla Medical hf. Consolidated Financial Statements
2025
36
In
our
opinion,
the
Consolidated
Financial
Statements
of
Embla
Medical
hf.
for
the
financial
year
2025
identified
as
“EmblaMedical-2025-12-31.zip” are prepared
in all material respects, in compliance with
the ESEF Regulation.
The
Board
of
Directors
and
President
and
CEO
of
Embla Medical
hf.
hereby
confirm
the
Consolidated
Financial
Statements
of
Embla Medical for the year 2025 with their signatures.
Reykjavík, 3 February 2026
Board of Directors
Niels Jacobsen
Chairman of the Board
Svafa Grönfeldt
Vice Chairman of the Board of Directors
Arne Boye Nielsen
Alberto Esquenazi
Member of the Board of Directors
Member of the Board of Directors
Tina Abild Olesen
Caroline Vagner Rosenstand
Member of the Board of Directors
Member of the Board of Directors
President and CEO
Sveinn Sölvason
Independent Auditor´s Report
Embla Medical hf. Consolidated Financial Statements
2025
37
To the
Board of Directors and the Shareholders
of Embla Medical hf.
Opinion
We have
audited the
accompanying
Consolidated Financial
Statements
of Embla
Medical hf.
and its
subsidiaries (the
Company)
for the year 2025, excluding
the Statement by the Board
of Directors and President and
CEO.
In
our
opinion,
the
Consolidated
Financial
Statements
give
a
true
and
fair
view
of
the
consolidated
financial
position
of
the
Company
as at
December 31,
2025, and
of its
consolidated
financial performance
and its
consolidated
cash
flows
for
the year
then
ended
in
accordance
with
IFRS
accounting
standards
as
adopted
by
the
European
Union
(EU),
and
applicable
articles
in
Icelandic law on annual accounts.
Our opinion is consistent with our additional
report to the Audit Committee and Board
of Directors.
The Consolidated Financial Statements
comprise
- The Statement by the Board of Directors
and President and CEO.
- The Consolidated Income Statement.
- The Consolidated Statement
of Comprehensive Income.
- The Consolidated Balance Sheet.
- The Consolidated Statement
of Cash Flow.
- The Consolidated Statement
of Changes in Equity.
- Notes to the Consolidated Financial Statements,
which include material accounting
policies and other explanatory information.
The Statement by the Board of Directors
and President and CEO and note
2. Quarterly statements
are excluded from the audit,
refer to section
reporting on other information
.
Basis for opinion
We conducted
our audit
in accordance
with International
Standards on
Auditing. Our
responsibilities under
those standards
are
further described in the auditor’s responsibilities
for the audit of the Consolidated Financial Statements
section of our report.
Independence
We
are
independent
of
the
Company
in
accordance
with
Icelandic
laws
on
auditors
and
auditing
and
the
code
of
ethics
that
apply to
auditors
in Iceland
and relate
to our
audit of
the Company's
Consolidated
Financial Statements.
We
have
fulfilled our
other ethical responsibilities in accordance
with these requirements.
To
the
best
of
our
knowledge
and
belief,
we
declare
that
non-audit
services
that
we
have
provided
to
the
Company
are
in
accordance
with
the
applicable
law
and
regulations
in
Iceland
and
that
we
have
not
provided
non-audit
services
that
are
prohibited under Article 5.1. of Regulation
(EU) No. 537/2014.
The non-audit
services
that
we
have
provided
to
the
Company,
in
the
period
from
1
January
2025
to
31 December
2025, are
disclosed in note no. 7 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.
Independent Auditor´s Report
Embla Medical hf. Consolidated Financial Statements
2025
38
Key Audit Matters
Key
audit
matters
are
those
matters
that,
in
our
professional
judgement,
were
of
most
significance
in
our
audit
of
the
Consolidated
Financial
Statements
of
the
current
period.
These
matters
were
addressed
in
the
context
of
our
audit
of
the
Consolidated Financial Statements
as a whole, and in
forming our opinion
thereon, and we do
not provide a separate
opinion on
these matters.
Key audit matter
Impairment of goodwill
The book
value
of goodwill
at
year
end
2025
amounted
to
USD 836 million.
The change
in goodwill
consists
of additions
due to
current
year
business
combinations
amounting
to
USD
19
million
together
with
exchange
rate
profits
amounting
to
USD
41
million.
The
carrying
value
of
goodwill
and
the
related
impairment
test
relies
on
the
discounted
expected
future
cash
flows
(value in
use) which
are complex
to determine
and require
significant
estimation
by
management.
The estimates
used
by
management
include
the
determination
of
market
and
sales
potential,
timing
of
product
launches,
profit
margins,
discount
rate
assumptions
and
the
determination
of
appropriate cash generating
units.
Due
to
the
relative
sensitivity
of
certain
inputs
to
the
impairment
testing
process,
and
in
particular
the
future
cash
flows
of
the
cash
generating
unit,
the
valuation
of
goodwill is considered to be a key
audit matter.
We
refer
to
note
no.
40
that
explains
the
impairment
and
Company’s
accounting
policies
in
further
detail.
We
also
refer to
note no.
13 on goodwill
and note
no. 33 relating
to
the change
in the
Company
due to
the acquisition
of other
companies.
Audit procedures
Our audit procedures included:
-
Understanding
management´s
process
for
assessing
the
goodwill
for
potential
impairment,
including
discussions
with
management
for
indications
of
impairment
of
goodwill.
-
Evaluation
of
the
reasonability
of
the
model
used
by
management
to calculate
the value
in use
of the
individual
cash
generation
units
and
if
it
complies
with
the
requirements
of IAS
36 Impairment
of assets.
This entailed
involving
our
internal
specialists
to
assist
with
the
audit
procedures
carried
out
in
relation
to
the
impairment
of
goodwill.
-
Understanding
and
validation
of
assumptions
used
to
calculate
the
discount
rates
and
value
in
use,
including
evaluation
of price
and volume
forecast,
long-term
growth
rates,
and
mathematical
accuracy
of
relevant
value-in-use
models prepared by management.
-
Performing
sensitivity
analysis
based
on
activity
and
our
understanding
of
the
future
prospects
to
identify
whether
these scenarios could give rise to an impairment.
-
Evaluation
of
the
presentation
and
disclosure
of
impairment
testing,
ensuring
compliance
with
applicable
accounting
standards.
Reporting on other information, including the
Statement by the Board of Directors
and President and CEO
The
Board
of
Directors
and
President
and
CEO
are
responsible
for
other
information.
The
other
information
comprises
of
the
Statement
by the
Board of
Directors and
President and
CEO, note
no. 2
Quarterly stateme
nts
and the
Annual Report,
which we
obtained prior to the date of this auditor’s
report.
Our
opinion
on
the
Consolidated
Financial
Statements
does
not
cover
the
other
information,
including
the
Statement
by
the
Board of Directors and President
and CEO.
In
connection
with
our
audit
of
the
Consolidated
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
Consolidated
Financial
Statements
or
our
knowledge
obtained
in
the
audit,
or
otherwise appears
to
be materially
misstated.
In
addition,
in
light of the knowledge
and understanding
of the entity
and its environment
obtained in the
course of the
audit, we are
required
to report
if we
have identified
material misstatements
in other
information
that we
obtained prior
to the
date of
this auditor’s
report. We have nothing
to report in this respect.
Independent Auditor´s Report
Embla Medical hf. Consolidated Financial Statements
2025
39
With respect
to the
Statement by
the Board
of Directors
and President
and CEO
we have,
in accordance
with article
104, of
the
Icelandic
law
on
annual
accounts
reviewed
that
to
the
best
of
our
knowledge,
the
Statement
by
the
Board
of
Directors
and
President
and
CEO
accompanying
the
Consolidated
Financial
Statements
includes
applicable
information
in
accordance
with
Icelandic law on annual accounts if not presented
elsewhere in the Consolidated Financial Statements.
Responsibilities of the Board of Directors
and President and CEO
The Board of
Directors and
the President
and CEO
are responsible
for the
preparation
and fair
presentation
of the Consolidated
Financial Statements
in accordance with
IFRS accounting
standards as adopted
by the EU, and
applicable articles in
Icelandic law
on annual accounts, and for such internal
control as determined necessary to
enable the preparation of financial statements
that
are free from material misstatement,
whether due to fraud or error.
In preparing
the Consolidated
Financial Statements,
management is
responsible for
assessing the
Company's ability
to continue
as a
going concern,
disclosing, as
applicable,
matters
related
to going
concern and
using the
going concern
basis of
accounting
unless management
either intends
to liquidate
the Company
or to cease
operations, or
has no realistic
alternative but
to do
so.
The
Company's
management
must
provide
appropriate
explanations
regarding
its
ability
to
continue
as
going
concern,
if
applicable,
and
why
management
applies
the
presumption
of
going
concern
in
the
preparation
and
presentation
of
the
Consolidated Financial Statements.
Those charged with governance are responsible
for overseeing the Company's
financial reporting process.
Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements
Our
objectives
are
to
obtain
reasonable
assurance
about
whether
the
Consolidated
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
International
Standards
on
Auditing
will
always
detect
a
material
misstatement
when
it
exists.
Misstatements
can
arise
from
fraud or error and are considered
material if,
individually or in the aggregate, they
could reasonably be expected
to influence the
economic decisions of users taken
on the basis of these Consolidated Financial Statements.
As
part
of an
audit
in
accordance
with
International
Standards
on
Auditing,
we
exercise
professional
judgement
and
maintain
professional skepticism
throughout the audit. We also:
Identify and
assess the
risks of
material misstatement
of the
Consolidated 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 Company’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
management’s
use
of
the
going
concern
basis
of
accounting
and,
based
on
the
audit
evidence obtained,
whether a
material uncertainty
exists related
to events
or conditions
that may
cast significant
doubt on
the
Company’s
ability
to
continue
as
a
going
concern.
If
we
conclude
that
a
material
uncertainty
exists,
we
are
required
to
draw
attention
in our
auditor’s
report
to
the related
disclosures
in the
Consolidated
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 Company to cease to continue
as a going concern.
Independent Auditor´s Report
Embla Medical hf. Consolidated Financial Statements
2025
40
Evaluate the
overall presentation,
structure and content
of the Consolidated
Financial Statements,
including the disclosures,
and
whether the Consolidated
Financial Statements
represent the
underlying transactions
and events
in a manner
that achieves
fair
presentation.
Obtain
sufficient appropriate
audit evidence
regarding
the financial
information
of the
entities
or business
activities within
the
Company to
express an
opinion on the
Consolidated Financial
Statements. We
are responsible
for the direction,
supervision and
performance of the Company audit. We
remain solely responsible for our audit
opinion.
We
communicate
with
those
charged
with
governance
regarding,
among
other
matters,
the
planned
scope
and
timing
of
the
audit and significant audit findings, including any
significant deficiencies in internal control
that we identify during our audit.
We
also
provide
those
charged
with
governance
with
a
statement
that
we
have
complied
with
relevant
ethical
requirements
regarding independence,
and to
communicate with
them all relationships
and other matters
that may
reasonably be
thought to
bear on our independence, and where applicable, 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
Consolidated Financial
Statements of
the current
period and are
therefore the
key audit
matters.
We describe these matters
in our auditor’s report unless
law or regulation precludes public disclosure
about the matter or when,
in extremely
rare
circumstances,
we determine
that
a matter
should
not be
communicated
in our
report
because
the adverse
consequences of doing so would reasonably be expected
to outweigh the public interest
benefits of such communication.
Report on other legal and regulatory
requirements
Report on European single electronic
format (ESEF Regulation)
As part of our
audit of the Consolidated
Financial Statements
of Embla Medical
hf.
we performed
procedures to
be able to
issue
an
opinion
on
whether
the
Consolidated
Financial
Statements
of
Embla
Medical
hf.
for
the
year
2025
with
the
file
name
EmblaMedical-2025-12-31.zip
is prepared,
in all
material
respects,
in accordance
with law
no. 20/2021
Act on
securities
issuer
obligations to
issue information
and self-report
relating to
requirements under
the European single
electronic format
regulation
EU no. 2019/815, which include requirements
concerning preparation of the Consolidated
Financial Statements in XHTML format
and iXBRL markup.
The Board of Directors and
President and CEO are responsible
for preparing the Consolidated
Financial Statements in accordance
with
law
no.
20/2021.
This
responsibility
includes
preparing
the
Consolidated
Financial
Statements
in
a
XHTML
format
in
accordance to EU regulation no. 2019/815 on
the European single electronic format (ESEF
regulation).
Our
responsibility
is
to
obtain
reasonable
assurance,
based
on
evidence
that
we
have
obtained,
on
whether
the
Consolidated
Financial
Statements
are
prepared
in
all
material
respects,
in
accordance
with
the
ESEF
Regulation,
and
to
issue
a
report
that
includes
our
opinion.
The nature,
timing
and
extent
of procedures
selected
depend
on
the
auditor's
judgement,
including
the
assessment
of the
risks
of material
departures
from the
requirements
set out
in the
ESEF regulation,
whether due
to
fraud
or
error.
Independent Auditor´s Report
Embla Medical hf. Consolidated Financial Statements
2025
41
In our
opinion, the
Consolidated Financial
Statements
of Embla
Medical hf.
for the
year 2025
with the
file name
EmblaMedical-
2025-12-31.zip is
prepared,
in all
material respects,
in accordance
with the
European single
electronic format
regulation EU
no.
2019/815.
Appointment
We
were
first
appointed
as
auditors
at
the
Company's
annual
general
meeting
on
8
March
2022.
Our
appointment
has
been
renewed
annually
at
the
Company's
annual
general
meeting
representing
a
total
period
of
uninterrupted
engagement
appointment of four years.
Reykjavík, 3 February 2026
PricewaterhouseCoopers ehf.
Vignir Rafn Gíslason
Ljósbrá Baldursdóttir
State Authorized Public Accountant
State
Authorized
Public
Accountant
Embla Medical hf. Consolidated Financial Statements
2025
42
Consolidated Income Statement
All amounts in USD '000
Notes
2025
2024
Net sales
3
928,689
854,889
Cost of goods sold
(350,134)
(320,189)
Gross profit
578,555
534,700
Other income / (expenses)
608
399
Sales and marketing expenses
(334,180)
(311,151)
Research and development expenses
(45,856)
(40,832)
General and administrative
expenses
(73,824)
(69,964)
Earnings before interest
and tax (EBIT)
125,303
113,153
Financial income
2,061
3,251
Financial expenses
(21,115)
(24,746)
Net exchange rate
difference
(4,974)
(4,435)
Net financial expenses
8
(24,028)
(25,930)
Share in net profit of associates
15
6,661
3,340
Earnings before tax (EBT)
107,936
90,563
Income tax
9
(24,291)
(21,603)
Net profit
83,645
68,960
Attributable to:
Owners of the Company
83,336
68,278
Non-controlling interests
309
682
Net profit
83,645
68,960
Earnings per share
10
Basic earnings per share (US cent)
19.6
16.2
Diluted earnings per share (US cent)
19.6
16.2
Embla Medical hf. Consolidated Financial Statements
2025
43
Consolidated Statement of Comprehensive Income
All amounts in USD '000
Notes
2025
2024
Net profit
83,645
68,960
Items that may be reclassified subsequently
to income statement:
Change in cash flow hedges
25
(1,826)
1,832
Fair value changes of financial liabilities
0
88
Exchange differences on
translating foreign operations
22,721
(11,175)
Income tax
22
4,997
(2,073)
Other comprehensive income, net of income
tax
25,892
(11,328)
Total comprehensive
income
109,537
57,632
Attributable to:
Owners of the Company
109,228
56,950
Non-controlling interests
309
682
Total comprehensive
income
109,537
57,632
Embla Medical hf. Consolidated Financial Statements
2025
44
Consolidated Balance Sheet
Assets
All amounts in USD '000
Notes
31.12.2025
31.12.2024
Property,
plant and equipment
11
80,215
71,824
Right of use assets
12
162,514
127,802
Goodwill
13
835,560
776,306
Other intangible assets
14
106,908
96,645
Investment in associates
15
27,950
20,364
Other financial assets
16
3,966
2,704
Deferred tax assets
27
55,380
46,365
Non-current assets
1,272,493
1,142,010
Inventories
17
165,617
143,102
Accounts receivable
18
144,782
121,915
Other financial assets
16
0
1,475
Other assets
19
45,092
44,300
Cash and cash equivalents
20
102,507
86,163
Current assets
457,998
396,955
Total assets
1,730,491
1,538,965
Embla Medical hf. Consolidated Financial Statements
2025
45
Consolidated Balance Sheet
Equity and liabilities
All amounts in USD '000
Notes
31.12.2025
31.12.2024
Issued capital and share premium
21
98,470
93,464
Other reserves
22
(50,494)
(75,390)
Retained earnings
23
842,572
759,112
Shareholders equity
890,549
777,186
Non-controlling interest
5,254
3,513
Total equity
895,803
780,699
Borrowings
26
292,174
328,754
Lease liabilities
12
153,499
118,279
Deferred tax liabilities
27
39,788
37,478
Provisions
28
8,723
7,937
Deferred income
29
11,346
8,589
Other financial liabilities
30
19,588
47,946
Non-current liabilities
525,117
548,982
Borrowings
26
67,678
28,620
Lease liabilities
12
28,218
24,136
Accounts payable
32,825
27,275
Income tax payable
21,322
18,305
Provisions
28
16,315
12,615
Accrued salaries and related expenses
59,550
48,715
Other financial liabilities
30
35,673
10,258
Other liabilities
32
47,989
39,361
Current liabilities
309,571
209,284
Total liabilities
834,688
758,266
Total equity
and liabilities
1,730,491
1,538,965
Embla Medical hf. Consolidated Financial Statements
2025
46
Consolidated Statement of Cash Flow
All amounts in USD '000
Notes
2025
2024
Earnings before interests
and tax (EBIT)
125,303
113,153
Depreciation, impairment and amortization
11, 12, 14
60,619
55,973
Change in inventories
(8,594)
(5,928)
Change in receivables
(12,321)
(5,524)
Change in payables
11,326
(2,279)
Change in provisions
3,858
3,174
Other operating activities
(2,403)
1,828
Cash generated from
operations
177,788
160,397
Interest received
1,984
3,238
Interest paid
(20,551)
(24,082)
Income tax paid
(26,603)
(23,487)
Net cash generated
from operating activities
132,618
116,066
Purchase of fixed and intangible
assets
11, 14
(32,332)
(39,227)
Acquisition of subsidiaries, net of cash in acquired
entities
33
(4,087)
(65,020)
Payment of contingent
consideration and deferred
payments
(10,603)
(5,052)
Dividend received
15
4,083
2,585
Other investing activities
(3,186)
1,944
Cash flows used in investing activities
(46,126)
(104,770)
Proceeds from long-term borrowings
26
57,463
0
Repayments of long-term borrowings
26
(59,011)
0
Changes in revolving credit facility
26
(30,823)
39,787
Payments of lease liabilities
12
(27,500)
(24,379)
Increase in subsidiaries not affecting control
23
(5,123)
(9,648)
Dividends from subsidiaries paid to non-controlling
interests
(35)
0
Purchased treasury shares
21
(9,752)
0
Cash flows (used in) / generated
from financing activities
(74,782)
5,761
Net change in cash
11,710
17,056
Exchange rate effects
on cash held in foreign currencies
4,634
(3,545)
Cash and cash equivalents at beginning of period
86,163
72,653
Cash and cash equivalents at end of period
102,507
86,163
Non-cash financing and investing activities
20
Embla Medical hf. Consolidated Financial Statements
2025
47
Consolidated Statement of Changes in Equity
Share-
Non-
Share
Share
Other
Retained
holders
controlling
Total
All amounts in USD '000
capital
premium
reserves
earnings
equity
interests
equity
Balance at 1 January 2024
4,781
61,479
(64,045)
699,667
701,883
3,123
705,005
Net profit
68,278
68,278
682
68,960
Change in cash flow hedges
1,466
1,466
1,466
Fair value changes of financial liabilities
66
66
66
Transl. diff.
of shares in subsidiaries
(12,860)
(12,860)
(12,860)
Total
comprehensive income
0
0
(11,328)
68,278
56,950
682
57,632
Put option for minority share in
subsidiary
689
689
689
Share contracts charge
602
602
602
Share contracts vested/expired
(1,308)
1,308
0
0
Issued new shares
48
27,156
27,204
27,204
Change in non-controlling interests
(10,142)
(10,142)
(292)
(10,434)
Balance at 31 December 2024
4,829
88,635
(75,390)
759,112
777,186
3,513
780,699
Net profit
83,336
83,336
309
83,645
Change in cash flow hedges
(1,461)
(1,461)
(1,461)
Transl. diff.
of shares in subsidiaries
27,353
27,353
27,353
Total
comprehensive income
0
0
25,892
83,336
109,228
309
109,537
Payment of dividends
0
(35)
(35)
Share contracts charge
1,970
1,970
1,970
Share contracts vested/expired
185
(2,967)
2,706
(76)
(76)
Purchase of treasury shares
(16)
(9,736)
(9,752)
(9,752)
Issued new shares
23
14,550
14,573
14,573
Minority interest arising on acquisition
0
4,611
4,611
Change in non-controlling interests
(2,581)
(2,581)
(3,143)
(5,724)
Balance at 31 December 2025
4,836
93,634
(50,494)
842,572
890,549
5,254
895,803
For details on other reserves refer
to note 22.
In June 2016 the
Icelandic Parliament
passed a legal
reform of
the Icelandic Financial
Statements
Act no. 3/2006
which became
effective
on
January
1,
2016.
It
requires
retained
earnings
to
be
separated
into
two
categories:
restricted
and
unrestricted
retained
earnings.
Profits,
net
of
dividend,
received
from
subsidiaries
are
classified
as
restricted
retained
earnings.
The
Company
could, based
on its
control
as the
parent
company,
decide to
let its
subsidiaries pay
dividends that
would lower
the
restricted
balance.
As
the
Company
has
sufficient
retained
earnings
from
previous
years,
this
legal
act
does
not
prevent
the
Company from making dividend payments
to its shareholders.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
48
1. General information
Embla Medical is a limited liability company incorporated and domiciled in Iceland. The address of its registered office is
Grjótháls 5, Reykjavík. Its ultimate controlling party is William Demant Invest A/S (WDI). The Consolidated Financial Statements
of the Company as at and for the year ended 31 December 2025 comprise the Company and its subsidiaries (together referred to
as "the Company" or "Embla Medical”).
The Company is a global orthopedics company, specializing in the design, development, manufacturing and sales of prosthetics
and bracing & supports products. Embla Medical also provides patient care through a global network of Orthotic and Prosthetic
(O&P) facilities. The Company sells its products worldwide, but the principal markets are Europe and North America.
Embla Medical’s Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards
(IFRS) accounting standards as adopted by the European Union and additional requirements in the Icelandic Annual Accounts Act
no. 3/2006.
The Consolidated Financial Statements are presented in US dollars and all values are rounded to the nearest thousand (’000),
except when otherwise indicated. This rounding may have impact on the total sum. In preparing the Consolidated Financial
Statements, the Company has applied the concept of materiality to the presentation and level of disclosure. It is the opinion of
management that essential and mandatory information is disclosed which is relevant to an understanding of these Consolidated
Financial Statements.
These Consolidated Financial Statements have been approved for issue by the Board of Directors and President and CEO on 3
February 2026. The Consolidated Financial Statements as presented in this report are subject to approval by the Annual General
Meeting of Shareholders, to be held on 10 March 2026.
The Company is listed on the Nasdaq Copenhagen Stock Exchange as EMBLA.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
49
2. Quarterly statements
Unaudited
Full year
Q4
Q3
Q2
Q1
2025
2025
2025
2025
2025
Net sales
928,689
256,691
236,795
232,418
202,786
Cost of goods sold
(350,134)
(98,625)
(88,559)
(87,931)
(75,020)
Gross profit
578,555
158,066
148,236
144,487
127,766
Gross profit margin
62%
62%
63%
62%
63%
Other income / (expenses)
608
175
(382)
447
367
Sales and marketing expenses
(334,180)
(92,194)
(81,400)
(82,529)
(78,057)
Research and development expenses
(45,856)
(11,948)
(11,489)
(11,851)
(10,569)
General and administrative expenses
(73,824)
(21,662)
(18,065)
(16,817)
(17,280)
EBIT
125,303
32,438
36,900
33,737
22,227
Net financial expenses
(24,028)
(2,947)
(4,135)
(9,764)
(7,181)
Share in net profit of associates
6,661
1,127
1,220
3,701
613
EBT
107,936
30,618
33,984
27,674
15,659
Income tax
(24,291)
(5,896)
(8,203)
(6,561)
(3,631)
Net profit
83,645
24,722
25,782
21,113
12,027
EBITDA
185,922
47,939
52,850
48,666
36,467
EBITDA margin
20%
19%
22%
21%
18%
There were no special items in the year
2025.
3. Net sales
2025
2024
Sales by geographical segment:
EMEA
457,445
394,869
Americas
398,516
392,898
APAC
72,728
67,122
Total
928,689
854,889
Sales by business segment:
Prosthetics & Neuro Orthotics
513,408
451,306
Bracing & Supports
148,383
148,386
Internal product sales
(39,036)
(38,516)
External product sales
622,756
561,176
Patient Care
305,933
293,713
Total
928,689
854,889
Sales of additional sold warranties and
service checks included in standard warranties
are deferred at point
of sale, then released
over
the warranty
period. Refer
to
note
40 for
accounting
policy on
revenue
recognition
and warranty
provisions
and refer
to
note 29 for breakdown
of revenues recognized
over time and amounts deferred
and released during the year.
All other revenues
are recognized at point
of sale.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
50
4. Segment information
The identified
operating
segments
comprise
the three
main
geographical
markets.
These segments
are
EMEA
(Europe
Middle-
East
and Africa),
Americas
and
APAC
(Asia-Pacific).
The
geographical
segments
form
the
basis
for
managerial
decision
making.
Information reported
to the President
and CEO for
the purposes of resource
allocation and assessment
of segment performance
focuses on geographical markets.
No single customer accounted for
more than 10% of the Company‘s
sales in 2025 or 2024.
2025
EMEA
Americas
APAC
Eliminations
Consolidated
Sales
External sales
457,445
398,516
72,728
0
928,689
Inter-segment sales
610,991
236,570
5,329
(852,890)
0
Total sales
1,068,436
635,086
78,057
(852,890)
928,689
Results
Segment results (EBIT)
72,142
42,599
10,562
0
125,303
Net financial expenses
(24,028)
Share in net profit of associates
6,661
Earnings before tax (EBT)
107,936
Income tax
(24,291)
Net profit
83,645
Balance sheet 31.12.2025
Segment assets
875,192
789,873
65,426
0
1,730,491
Segment liabilities
654,546
159,007
21,135
0
834,688
The total amount of non-current
assets other than financial instruments and deferred
tax assets, broken
down by the
Company´s country of domicile and other material
location of the assets, is shown in the below table:
Country
2025
2024
USA
527,240
520,992
Germany
206,730
158,507
France
146,470
127,620
Iceland
114,486
104,081
Netherlands
36,724
21,934
Sweden
46,436
40,439
UK
43,968
42,619
Australia
19,244
18,742
Other
71,849
58,007
1,213,147
1,092,941
Other information
EMEA
Americas
APAC
Eliminations
Consolidated
Capital additions
20,424
10,548
1,360
0
32,332
Depreciation, impairment and amortization
42,368
14,736
3,515
0
60,619
The majority of inter-segment sale prices are determined
using the Transactional
Net Margin Method (TNMM).
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
51
2024
EMEA
Americas
APAC
Eliminations
Consolidated
Sales
External sales
394,869
392,898
67,122
0
854,889
Inter-segment sales
509,552
160,128
4,955
(674,635)
0
Total sales
904,421
553,026
72,077
(674,635)
854,889
Results
Segment results (EBIT)
61,253
44,033
7,866
0
113,153
Net financial income/(expenses)
(25,930)
Share in net profit of associates
3,340
Earnings before tax (EBT)
90,563
Income tax
(21,603)
Net profit
68,960
Balance sheet 31.12.2024
Segment assets
719,241
759,915
59,809
0
1,538,965
Segment liabilities
581,549
158,382
18,335
0
758,266
Other information
EMEA
Americas
APAC
Eliminations
Consolidated
Capital additions
31,791
6,620
816
0
39,227
Depreciation, impairment and amortization
37,891
15,394
2,688
0
55,973
5. Sales and expenses split by main currencies
2025
2024
LCY
USD
%
LCY
USD
%
Sales
USD
358,545
358,545
39%
350,524
350,524
41%
EUR
251,970
285,142
31%
220,419
238,475
28%
ISK
562,783
4,391
1%
508,430
3,684
0%
SEK, NOK, DKK
107,189
12%
99,604
12%
GBP,
AUD, CAD & Other
173,422
19%
162,603
19%
Total
928,689
100%
854,889
100%
COGS and OPEX
USD
306,591
306,591
38%
302,848
302,848
41%
EUR
183,268
207,795
26%
164,563
178,000
24%
ISK
11,522,513
89,679
11%
11,112,364
80,541
11%
SEK, NOK, DKK
99,945
12%
91,609
12%
GBP,
MXN, CAD & Other
99,376
12%
88,738
12%
Total
803,386
100%
741,736
100%
Currency split is derived by using best available
information at each time.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
52
6. Salaries
2025
2024
Salaries
299,437
280,540
Salary-related expenses
70,250
63,776
369,687
344,316
Full time equivalent (FTE) on average
4,138
4,091
Full time equivalent at period end
4,192
4,078
Included in salary-related expense
are pension related expenses
amounting to USD 23 million (2024: USD 21.4 million).
Information on share
‑
based payments recognised in employee
remuneration, are outlined
in note 24 Share contracts.
Salaries and salary-related expenses,
classified by functional category:
2025
2024
Cost of goods sold
101,149
87,761
Sales and marketing expenses
197,593
192,302
Research and development expenses
28,390
24,873
General and administrative expenses
42,555
39,380
369,687
344,316
Expenses related to information
technology and human resource departments
are allocated to the functions
they support.
Management salaries and benefits
Salaries
Shares owned
(ii)
Board of Directors:
2025
2024
2025
2024
Niels Jacobsen - Chairman of the Board(i)
114
111
219,493,992
219,493,992
Svafa Grönfeldt - Vice Chairman
76
74
0
0
Alberto Esquenazi
46
44
0
0
Arne Boye Nielsen
53
52
0
0
Caroline Vagner Rosenstand
46
44
0
0
Tina Abild Olesen
38
37
0
0
(i)
Shares owned by William Demant Invest A/S which is represented by Niels Jacobsen on the Board. Niels Jacobsen and financially related parties own
personally 203,330 shares (2024: 203,330 shares).
(ii) Shares owned are displayed in total number of owned shares, not rounded to the nearest thousand.
The
Board
of
Directors
did
not
hold
any
share
option
contracts
at
the
end
of
the
current
period
nor
at
the
end
of
the
comparative period.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
53
2025
Fixed base
Cash based
Other
Share based
Total
salary
incentive
Pension
benefits
incentive
remuneration
Executive Management:
Sveinn Sölvason, President and CEO
(i)
745
223
133
24
276
1,400
Executive management (6.8 FTEs)
(ii)
2,842
780
368
85
567
4,642
3,587
1,003
500
109
843
6,043
2024
Fixed base
Cash based
Other
Share based
Total
salary
incentive
Pension
benefits
incentive
remuneration
Executive Management:
Sveinn Sölvason, President and CEO
(i)
576
225
128
25
59
1,014
Executive management (6.6 FTEs)
(ii)
2,558
814
368
41
418
4,199
3,134
1,040
496
66
477
5,213
In February
2025 Conal
Harte
was
appointed
to the
position of
EVP of
Patient
Care and
in April
2025, André
Rocha
joined the
company as
EVP of
Research
& Development,
succeeding Hildur
Einarsdóttir,
who departed
the company
at the
end of
January
2025.
Executive management
is the same as key management.
(i) Shares owned at year end by Sveinn Sölvason 68,342 (2024: 68,342).
(ii) Shares owned at year end by executive management 83,406
(2024: 81,991).
7. Fees to auditors
2025
2024
Audit of Financial Statements
1,681
1,664
Other services
122
90
1,803
1,754
The
table
shows
the
fees
to
PricewaterhouseCoopers
(PwC).
In
2025,
fees
for
other
services
amounting
to
USD
17
thousand
were paid
to PricewaterhouseCoopers
ehf.,
the auditor
of the Consolidated
Financial Statements;
no such fees
were incurred
in
2024.
8. Financial income / expenses
2025
2024
Interests on bank deposits
1,523
1,966
Other financial income
539
1,285
Financial income
2,061
3,251
Interests on loans
(12,263)
(17,883)
Interest on leases
(7,261)
(5,365)
Other financial expenses
(1,591)
(1,499)
Financial expenses
(21,115)
(24,746)
Net exchange rate differences
(4,974)
(4,435)
Net financial expenses
(24,028)
(25,930)
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
54
9. Income tax
2025
2024
Current tax expenses
(29,926)
(29,456)
Deferred tax expenses
5,635
7,853
(24,291)
(21,603)
2025
2024
Amount
%
Amount
%
Earnings before tax
107,936
90,563
Tax using Icelandic corporate
tax rate
(21,587)
20%
(19,018)
21%
Difference between tax rates of
non - Icelandic enterprises and
Icelandic corporate tax rate
(2,588)
2%
(2,905)
3%
Impact of non-deductible expenses / non-taxable income
850
1%
92
(0%)
Impact of unrecognized tax assets, net
(473)
0%
(10)
0%
Other impacts
(492)
(1%)
238
(0%)
(24,291)
23%
(21,603)
24%
Deferred tax expenses:
2025
2024
Origination and reversal of temporary differences
5,677
7,802
Effect of changes in tax rate
(42)
51
5,635
7,853
For compliance and
reporting on both
Country-by-Country
Reporting and Pillar
Two, Embla
Medical is part of
WDI group.
Embla
Medical is not materially impacted by OECD’s/EUs
Pillar Two Model Rules and local implementation
thereof.
10. Earnings per share
2025
2024
Net profit
83,645
68,960
Weighted average number of ordinary
shares (in '000)
426,959
426,644
Adjustments for calculation of diluted earnings per share:
Options and PSU/RSU
40
15
Weighted average number of shares including potential
shares (in '000)
427,000
426,659
Basic earnings per share (US cent)
19.6
16.2
Diluted earnings per share (US cent)
19.6
16.2
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
55
11. Property, plant and equipment
Leasehold
improvements
Machinery &
equipment
Office
equipment
Computer
equipment
Total
2025
Cost
At 1 January
51,273
80,116
14,939
13,941
160,269
Additions
6,921
10,675
1,197
3,279
22,073
Business combinations
2,294
599
403
63
3,359
Eliminated on disposal
(46)
(178)
(21)
(130)
(375)
Fully depreciated assets
(94)
(522)
(189)
(2,224)
(3,029)
Exchange rate differences
2,399
1,539
1,534
833
6,304
At 31 December 2025
62,745
92,228
17,862
15,764
188,600
Depreciation
At 1 January
19,654
50,499
9,850
8,442
88,445
Charge for the period
5,897
8,128
1,684
3,658
19,367
Eliminated on disposal
(23)
(183)
(19)
(106)
(331)
Fully depreciated assets
(94)
(522)
(189)
(2,224)
(3,029)
Exchange rate differences
1,652
888
849
545
3,935
At 31 December 2025
27,086
58,810
12,175
10,315
108,385
At 31 December 2025
35,660
33,418
5,688
5,449
80,215
Depreciation classified by functional category:
2025
2024
Cost of goods sold
9,739
9,850
Sales and marketing expenses
4,532
3,922
Research and development expenses
1,303
773
General and administrative expenses
3,793
4,030
Total
19,367
18,575
Leasehold
improvements
Machinery &
equipment
Office
equipment
Computer
equipment
2024
Total
Cost
At 1 January
42,814
71,701
15,033
14,941
144,489
Additions
11,522
10,712
1,313
3,486
27,033
Business combinations
10
459
10
115
594
Eliminated on disposal
(27)
(224)
0
(180)
(431)
Fully depreciated assets
(1,086)
(1,540)
(871)
(3,867)
(7,364)
Exchange rate differences
(1,960)
(992)
(546)
(554)
(4,052)
At 31 December 2024
51,273
80,116
14,939
13,941
160,269
Depreciation
At 1 January
17,284
44,462
9,431
8,926
80,103
Charge for the period
4,684
8,338
1,661
3,892
18,575
Eliminated on disposal
(14)
(144)
0
(155)
(313)
Fully depreciated assets
(1,086)
(1,540)
(871)
(3,867)
(7,364)
Exchange rate differences
(1,214)
(617)
(371)
(354)
(2,556)
At 31 December 2024
19,654
50,499
9,850
8,442
88,445
At 31 December 2024
31,619
29,617
5,089
5,499
71,824
None of the Company's property,
plant and equipment are pledged as security.
Major divestments are subject to bank approval.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
56
12. Leases
Right of use assets
Buildings &
sites
Machinery &
equipment
2025
Total
At 1 January
123,789
4,012
127,802
Additions and renewals
53,766
2,817
56,583
Depreciation charge and impairment for the period
(26,573)
(2,696)
(29,269)
Eliminated on disposal and termination
(2,790)
0
(2,790)
Exchange rate differences
9,664
524
10,188
At 31 December 2025
157,857
4,658
162,514
Depreciation and impairment classified by functional category:
2025
2024
Cost of goods sold
11,731
10,093
Sales and marketing expenses
9,161
5,047
Research and development expenses
3,149
3,028
General and administrative expenses
5,227
7,065
Total
29,269
25,233
Buildings &
sites
Machinery &
equipment
2024
Total
At 1 January
118,967
2,706
121,673
Additions and renewals
35,206
3,799
39,005
Depreciation charge for the period
(22,933)
(2,300)
(25,233)
Eliminated on disposal and termination
(1,649)
0
(1,649)
Exchange rate differences
(5,801)
(191)
(5,992)
At 31 December 2024
123,789
4,012
127,802
Lease liabilities
Contractual maturities analysis as follows:
31.12.2025
31.12.2024
In 2026 / 2025
35,227
29,307
In 2027 / 2026
31,089
24,831
In 2028 / 2027
26,456
20,438
In 2029 / 2028
21,763
16,985
Later
106,631
77,069
Total
221,166
168,629
Less: Present value discount
(39,450)
(26,214)
Lease liability
181,716
142,415
Lease liabilities are presented in the Consolidated Balance Sheet as follows:
Non-Current
153,499
118,279
Current
28,218
24,136
Total
181,716
142,415
Lease related expenses recognized in the Consolidated Income Statement:
2025
2024
Depreciation expense from right of use assets
29,269
25,233
Interest expense on lease liabilities
7,261
5,365
Exchange difference on lease liabilities
1,562
2,209
Short-term and low value lease expenses not included in lease liabilities
563
677
Termination of right of use asset
112
76
Total
38,766
33,560
Total cash
outflow for leases
34,761
29,743
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
57
13. Goodwill
2025
2024
At 1 January
776,306
690,855
Business combinations
18,698
104,489
Exchange rate differences
40,556
(19,038)
At 31 December
835,560
776,306
During the year,
the Company determined
the recoverable
amount of goodwill
and concluded that
none of the Company's
cash-
generating units have suffered
an impairment loss.
The carrying amount of goodwill was allocated
to the following cash-generating
units:
31.12.2025
31.12.2024
Americas
453,848
451,947
EMEA
365,582
309,266
APAC
16,130
15,093
Total
835,560
776,306
The recoverable
amount of the
cash-generating units
is determined
based on a
value in use
calculation which require
the use of
assumption.
The
calculation
use
cash
flow
projections
based
on
the
financial
forecast
for
the
year
2026
approved
by
management and the Board of Directors.
Cash flow beyond
the one-year
period are extrapolated
using the assumption
stated below.
Cash flows
beyond 2030
have been
extrapolated
using a
steady
growth rate
for all
cash-generating
units. This
growth rate
does not
exceed
the long-term
average
growth rate for
the market in
each segment. Management
believes that any
reasonable change in the key
assumptions on which
the recoverable amount
is based would not cause the carrying amount to exceed
its recoverable amount.
2025
Americas
EMEA
APAC
Sales growth (%)
7%
7%
12%
EBITDA margin (%)
20%
26%
16%
Capex ratio
3%
3%
4%
Perpetual growth rate (%)
2.5%
2.5%
2.5%
Pre-tax discount rate (%)
10.6%
10.2%
10.6%
Post-tax discount rate (%)
10.1%
9.7%
10.1%
2024
Americas
EMEA
APAC
Sales growth (%)
8%
8%
13%
EBITDA margin (%)
21%
25%
19%
Capex ratio
4%
3%
3%
Perpetual growth rate (%)
2.5%
2.5%
2.5%
Pre-tax discount rate (%)
10.6%
10.2%
10.6%
Post-tax discount rate (%)
10.2%
9.8%
10.1%
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
58
Management has determined the values
assigned to each of the above key assumptions
as follows:
Sales growth
Average annual
growth rate
over the five-year
forecast period
is in line with current
outlook, which is slightly
reduced compared
with the Growth’27 strategy approved
by the Board of Directors.
EBITDA margin
Average
annual EBITDA
margin over
the five-year
forecast
period based
on gradual
margin improvements
in line
with historical
margin increases.
CAPEX ratio
Average
annual amount
of purchased
fixed and
intangible
assets
as ratio
to sales.
This is
based on
both historical
and planned
purchases and sales.
Perpetual growth rate
Average
steady
growth
rate
used to
extrapolate
cash
flows
beyond
the forecast
period.
This growth
rate
does not
exceed
the
long-term average growth
rate for the market
in each segment
Pre-tax discount rate
Reflect specific risk relating to the relevant
segments and the countries in which they operate.
Post-tax discount rate
(WACC)
Reflect
specific
risk
relating
to
the
relevant
segments
and
the
countries
in
which
they
operate,
including
tax
effects
based
on
effective tax rates
in each segment.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
59
14. Other intangible assets
Customer &
distribution
relationships
Patents &
development
costs
Software &
other
2025
Trademarks
Total
Cost
At 1 January
36,701
32,214
8,156
63,175
140,246
Additions
0
960
39
1,409
2,408
Additions - internally generated
0
0
0
7,852
7,852
Business combinations
7,823
478
0
79
8,380
Fully amortized assets
0
0
(279)
(3,197)
(3,476)
Exchange rate differences
3,035
511
712
131
4,389
At 31 December 2025
47,559
34,163
8,627
69,448
159,798
Amortization
At 1 January
9,393
9,789
523
23,896
43,601
Charge for the period
3,668
2,311
104
5,901
11,984
Fully amortized assets
0
0
(279)
(3,197)
(3,476)
Exchange rate differences
478
279
0
23
781
At 31 December 2025
13,540
12,379
348
26,623
52,889
At 31 December 2025
34,019
21,784
8,280
42,825
106,908
Amortization classified by functional category:
2025
2024
Cost of goods sold
883
1,577
Sales and marketing expenses
6,819
6,377
Research and development expenses
1,882
1,691
General and administrative expenses
2,400
2,520
Total
11,984
12,165
Customer &
distribution
relationships
Patents &
development
costs
Software &
other
2024
Trademarks
Total
Cost
At 1 January
34,254
28,343
2,871
54,246
119,714
Additions
55
1,716
79
1,612
3,462
Additions - internally generated
0
0
0
8,732
8,732
Business combinations
22,321
1,953
5,766
1,049
31,089
Fully amortized assets
(19,426)
(18)
(323)
(2,290)
(22,057)
Exchange rate differences
(503)
220
(237)
(174)
(694)
At 31 December 2024
36,701
32,214
8,156
63,175
140,246
Amortization
At 1 January
25,676
7,780
588
19,829
53,873
Charge for the period
3,387
1,950
252
6,576
12,165
Fully amortized assets
(19,426)
(18)
(323)
(2,290)
(22,057)
Exchange rate differences
(244)
77
6
(219)
(380)
At 31 December 2024
9,393
9,789
523
23,896
43,601
At 31 December 2024
27,308
22,425
7,633
39,279
96,645
None of the Company's intangible assets
are with restricted title or pledged as security.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
60
15. Investment in associates
2025
2024
At 1 January
20,364
20,532
Additions
4,117
0
Share in net profit
6,661
3,340
Dividend received
(4,083)
(2,585)
Exchange rate differences
891
(923)
At 31 December
27,950
20,364
None of the individual associate´s financial information
are material.
16. Other financial assets
31.12.2025
31.12.2024
Financial asset at amortized cost:
Unlisted securities
1,651
856
Restricted cash
609
534
Financial asset at fair value through Income Statement:
Call option for shares in associates
1,706
1,315
Hedging derivatives:
Cash flow hedge - foreign currency forwards
0
1,475
3,966
4,179
Non-Current
3,966
2,704
Current
0
1,475
3,966
4,179
Hedging derivatives
are classified
as other financial
assets when
the book value
is positive
and as other
financial liabilities
when
book value is negative.
17. Inventories
31.12.2025
31.12.2024
Raw material
52,460
44,268
Work in progress
30,618
23,167
Finished goods
82,539
75,667
165,617
143,102
Inventories
of USD
12.0 million
(2024: USD
11.5 million)
are expected
to be
sold or
used in
production
after more
than twelve
months.
Inventories
recognized
as an expense
during the
period amounted
to USD
286.7 million
(2024: USD 260.6
million). Thereof
USD
5.3 million (2024:
USD
4.4 million) was
recognized as
an expense
in respect
of write-downs
of inventory
to net realizable
value.
There was
no reversal
of prior year
write downs
in the current
year.
The reserve
for obsolete
inventories
at year
end amounted
to USD 6.8 million compared to USD 5.6 million in 2024.
None of the Company's inventories
are pledged as security.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
61
18. Accounts receivable
31.12.2025
31.12.2024
Nominal value
149,302
125,949
Allowance for doubtful accounts
(4,521)
(4,034)
144,782
121,915
The average
credit period on
sale of goods
are 47 days
(2024: 43 days).
An allowance has
been made for
doubtful accounts.
This
allowance has
been determined
by management
with reference
to the
expected
credit
loss (ECL).
Management
considers
that
the carrying amount of receivables approximates
their fair value.
Movement in the allowance for doubtful accounts
2025
2024
At 1 January
(4,034)
(5,076)
Impairment (losses)/gains recognized on receivables
(2,024)
372
Amounts written off as uncollectable
1,731
494
Exchange rate differences
(194)
176
At 31 December
(4,521)
(4,034)
31.12.2025
Accounts receivable
Gross
carrying
amount at
default
Expected
credit loss
rate
Collective
allowance
(lifetime ECL)
Individual
allowance
Net carrying
amount
Not past due
95,498
0.1%
69
9
95,419
Less than six months past due
43,314
2.8%
1,195
310
41,809
Six to twelve months past due
4,000
12.5%
500
17
3,483
More than twelve months past due
6,490
19.5%
1,266
1,153
4,072
149,302
3,030
1,490
144,782
31.12.2024
Accounts receivable
Gross
carrying
amount at
default
Expected
credit loss
rate
Collective
allowance
(lifetime ECL)
Individual
allowance
Net carrying
amount
Not past due
81,684
0.1%
75
15
81,594
Less than six months past due
35,949
2.0%
722
429
34,798
Six to twelve months past due
2,755
17.1%
472
267
2,016
More than twelve months past due
5,561
27.4%
1,523
531
3,507
125,949
2,792
1,242
121,915
The expected
credit loss
on accounts
receivable is
estimated using
a provision
matrix with reference
to past
default experience,
general
economic
conditions
and
an
assessment
of
both
the
current
as
well
as
expected
conditions,
including
time
value
of
money where
appropriate.
Individual
allowances
and adjustments
to
the collective
bad debt
provision
are
made based
on the
individual assessment
of customers'
situation and
probability of
incoming payments.
Refer
to note
40 for
further details
related
to accounting policies.
The Company
writes off
accounts
receivable when
there is
information indicating
that the
debtor is
in severe
financial difficulty
and
there
is
no
realistic
prospect
of
recovery,
e.g.
when
the
debtor
has
been
placed
under
liquidation
or
has
entered
into
bankruptcy proceedings.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
62
19. Other assets
31.12.2025
31.12.2024
Prepaid expenses
19,275
22,630
VAT
refundable
8,758
7,361
Other
17,059
14,309
45,092
44,300
The other line primarily includes accrued income, security deposits,
various tax refunds and other short
-term receivables.
20. Cash and cash equivalents
For the
purpose of
presentation
in the
Consolidated Statement
of Cash
Flow,
cash and
cash equivalents
include bank
balances,
cash
on
hand
and
cash
equivalents.
Bank
overdrafts
are
shown
within
borrowings
in
current
liabilities
in
the
Consolidated
Balance Sheet.
Non-cash investing and financing activities
Non-cash investing and financing activities
disclosed in other notes are:
-
Exchange rate differences
on borrowings and amortization of borrowing
cost – note 26. Borrowings
-
Liabilities acquired in Business Combinations
– note 33. Business Combinations
-
Assets acquired in Business Combinations
– note 33. Business Combinations
-
Deferred payments and
contingent consideration
on acquisitions – note 33. Business Combinations
-
Additions to right of use assets and lease liabilities - note
12. Leases
-
Exchange rate adjustment
on lease liabilities - note 12. Leases
-
Additions to financial assets and financial liabilities – notes
16. Other financial assets and 30. Other financial liabilities
-
Fair
value
adjustment
on
financial
assets
and
financial
liabilities
-
notes
16.
Other
financial
assets
and
30.
Other
financial
liabilities
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
63
21. Issued capital and share premium
Common stock is as follows in thousands
of shares in ISK:
Treasury
shares
Issued shares
Total
Balance at 1 January 2024
421,000
(701)
420,299
Issued shares
6,636
6,636
Balance at 31 December 2024
427,636
(701)
426,935
Issued shares
2,805
2,805
Sold treasury shares
15
15
Purchased treasury shares
(1,987)
(1,987)
Balance at 31 December 2025
430,441
(2,673)
427,768
Movement in issued capital is as follows
in USD thousands:
Share
Share
capital
premium
Total
Balance at 1 January 2024
4,781
61,479
66,260
Issued shares
48
27,156
27,204
Balance at 31 December 2024
4,829
88,635
93,464
Issued shares
23
14,550
14,573
Sold treasury shares
0
185
185
Purchased treasury shares
(16)
(9,736)
(9,752)
Balance at 31 December 2025
4,836
93,634
98,470
In 2025
the share
buyback program
was
reinitiated.
Decisions
on share
buybacks
are
made in
accordance
with the
Company‘s
Capital
Structure
and
Capital
Allocation
Policy,
within
the
authorizations
granted
by
the
Annual
General
Meeting.
The
share
buyback
programs
are
managed
by
Nordea,
which
make
its
trading
decisions
independently
and
without
influence
by
the
Company
regarding
the
timing
of
the
purchases.
Share
option
contracts
amounting
to
15,078
Embla
Medical
hf
shares
were
exercised during the year.
In 2025 in
connection with the
investment in
a majority shares
of Streifeneder
ortho.production GmbH,
new shares were
issued
raising the
total share
capital in
nominal value
by 0.7%,
from ISK
427.6 million
to ISK
430.4 million,
resulting in
USD 14.6 million
share capital increase.
At year end 2025 Embla Medical held
2.7 million treasury shares that equals to 0.6% of issued
shares.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
64
22. Other reserves
The following table shows a breakdown
of the movement in other reserves in the Consolidated
Statement of Changes in Equity.
Statutory
Share
Financial
Currency
reserve
contracts
Hedging
assets
Translation
Total
Balance at 1 January 2024
1,267
5,691
(258)
(755)
(69,990)
(64,045)
Change in cash flow hedges
1,832
1,832
Income tax
(366)
(366)
Fair value changes of financial liabilities
88
88
Income tax
(22)
(22)
Transl. diff.
of shares in subsidiaries
(11,175)
(11,175)
Income tax
(1,685)
(1,685)
Total comprehensive
income
0
0
1,466
66
(12,860)
(11,328)
Put option for minority share in subsidiary
689
689
Share contracts charge
602
602
Share contracts vested/expired
(1,308)
(1,308)
Balance at 31 December 2024
1,267
4,985
1,208
0
(82,850)
(75,390)
Change in cash flow hedges
(1,826)
(1,826)
Income tax
365
365
Transl. diff.
of shares in subsidiaries
22,721
22,721
Income tax
4,632
4,632
Total comprehensive
income
0
0
(1,461)
0
27,353
25,892
Share contracts charge
1,970
1,970
Share contracts vested/expired
(2,967)
(2,967)
Balance at 31 December 2025
1,267
3,989
(253)
0
(55,497)
(50,494)
Statutory reserve
The statutory reserve comprises
certain portion of the share capital according
to Icelandic Company Act.
Share contracts reserve
The share
contracts
reserve is
used to
recognize
the fair
value of
options or
share units
issued to
employees but
not exercised,
see note 24 for details.
Hedging reserve
The hedging reserve includes the cash flow hedge reserve
and the costs of hedging reserve, see note 25 for
details. The cash flow
hedge reserve
is used to
recognize the
effective portion
of gains
or losses on
derivatives that
are designated
and qualify as
cash
flow hedges.
Currency translation reserve
The
currency
translation
reserve
comprises
all
currency
differences
arising
from
the
translation
of
the
financial
statements
of
subsidiaries having
different
functional currencies
than the
Company as
well as
from the
translation of
liabilities that
hedge net
investment.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
65
23. Retained earnings
Transaction with non
-controlling interests
During the year the Company
acquired remaining shares
in one of its subsidiar
y
(2024 two).
The effect on
the equity attributable
to the owners of the Company is as follows:
2025
2024
Carrying amount of non-controlling interest acquired
3,143
292
Consideration paid to non-controlling interest
(5,123)
(9,648)
Contingent consideration
(600)
(786)
Excess of consideration paid recognized in retained
earnings
(2,581)
(10,142)
24. Share contracts
In
2024
a
new
long
term
incentives
program
of
performance
share
units
("PSUs")
and
restricted
shares
units
("RSUs")
was
initiated
in accordance
with approval
at the
Company's
Annual General
Meeting for
2023. This
program
replaced
the previous
share options plan.
Under
this
program
management
and
key
leaders
can
be
rewarded
for
delivery
of
long-term
strategy
by
granting
PSUs
for
President
and
CEO
and
the
Executive
Management
or
RSUs
for
the
Executive
Management
direct
report
at
VP
level
and
key
specialists in strategic positions.
According
to
the
program,
if
performance
is
on
target,
PSUs
and
RSUs
will
be
granted
each
year
based
on
the
current
Embla
Medical
share
price
and
the
current
annual
fixed
salary
of
the
participants.
The
maximum
PSUs
granted
per
year
is
approximately
375,000. The
number of
PSUs granted
to the
participants will
follow the
guidelines described
in Embla
Medical’s
Remuneration Policy
and will be reported in
Embla Medical’s
Remuneration Report.
A maximum of 395,000 RSUs
will be granted
each year.
PSUs
value
at
granting
depends
on
performance
and
Embla’s
share
price.
To
calculate
the
PSUs/RSUs
value
at
granting,
the
volume-weighted
average
share
price
on
Nasdaq
Copenhagen
the
first
five
trading
days
following
the
date
of
publication
of
Embla
Medical’s
Consolidated
Financial
Statements
for
the
performance
period/previous
financial
year
is
used.
Performance
metrics
and
targets
are
set
at
the
beginning
of
the
performance
period.
Performance
metrics
shall
be
closely
aligned
with
Embla’s
long-term strategy
and sustainability
and shall include
a combination
of financial,
business and
non-financial targets.
At
granting, the
PSUs value
is set
within a
defined range
of the
President and
CEO’s
fixed annual
salary for
the President
and CEO,
and within
a separate
defined range
of fixed
annual salary
for other
executives,
with the specific
amount determined
according
to their respective
roles and responsibilities.
RSU value is
determined as
a portion of the
key employee’s
fixed annual
salary,
set
by
the
President
and
CEO
based
on
the
employee’s
role
and
responsibilities.
The
potential
value
of
the
PSUs/RSUs
at
vesting
depends
on
the
share
price
development
during
the
vesting
time.
The
vesting
time
of
the
PSUs/RSUs
is
three
years
from
granting. It
is a vesting
condition that the
respective executive/key
employee is employed
by an Embla Medical
entity at vesting,
subject to
certain good
leaver provisions.
At vesting,
the PSUs/RSUs are
converted into
Embla Medical shares
on a 1:1
ratio. For
delivery
of shares,
the
Board
may
either issue
new
shares
(subject
to
the
Annual
General
Meeting’s
approval)
or
allow
Embla
Medical to use treasury shares that
have been acquired based on authorization
from the Annual General Meeting.
According to prior incentive
plan (share options issued before
2024) where managers
were granted
options to purchase ordinary
shares at
an exercise
price, determined
by the
average
closing price
of shares
traded on
the OMX
Copenhagen stock
exchange
over the
20 trading
days prior
to the issue
date. The
employee must
remain continuously
employed with
the Company
until the
option expiring date, either as an employee
or in any other way,
deemed satisfactory by the Company.
Each
employee share
option converts
into
one ordinary
share on
exercise.
No amounts
are paid
or payable
by the
recipient
to
the Company
on receipt
of the
option.
The options
carry neither
right
to
dividends
nor voting
rights.
The Company
allows
net
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
66
settlement
of options
in which
an equivalent
number of
shares
are
delivered
to
the employee
that
equals
to
the profit
of the
exercised
options.
With
net
settlement,
the
Company
does
not
deliver
in
full
the
number
of
shares
at
exercise
price.
The
fair
value
of
the
share
options
granted
are
valued
using
the
Black-Scholes
pricing
model.
Variables
used
in
the
Black-Scholes
calculation
are
the
exercise
price per
share,
expected
life
in
years,
estimated
volatility,
annual
rate
of quarterly
dividends
and
annual discount
rate. Neither
in
2025 nor in 2024,
the expected volatility
was not assumed
nor the annual
discount rate
as new
stock options were not
granted. Expected
life of options are three
years and the options expire
one year after the vesting
date. If
a share
option vests
during a
closed period
for insider
trading
the vesting
period is
automatically
extended
until the
next open
window for insider trading.
The
following
share
PSU
/
RSU
and
share
options
contracts
(hereinafter
referred
to
as:
share
contracts)
are
outstanding
at
balance sheet date:
Number of
shares
Grant
year
Exercise
year
Exercise price
(in DKK)
Share price at
grant date (in
DKK)
Weighted
average
remaining
contr. life in
months
Issued to Executive Management:
PSU
Sveinn Sölvason President and CEO
162,764
2024-2025
2027-2028
30.7-33.3
20
Executive management (6 persons)
406,936
2024-2025
2027-2028
30.7-33.3
20
Total
569,700
Share options
Sveinn Sölvason President and CEO
140,000
2022 - 2023
2025 - 2026
29.9-34.2
29.2-34.6
1
Executive management (4 persons)
400,000
2022
2025
28.5-41.7
29.5-44.0
0
Executive management (3 persons)
180,000
2023
2026
27.9-34.2
27.5-34.6
8
Total
720,000
Issued to management team:
RSU
Managers (47 Persons)
667,334
2024-2025
2027-2028
30.7-32.2
21
Total
667,334
Share options
Managers (11 Persons)
410,000
2022
2025
28.5-41.7
29.5-44.0
0
Managers (1 person)
50,000
2023
2026
34.2
34.6
2
Total
460,000
Total issued RSU/ PSU
1,237,034
20
Total issued
share options
1,180,000
1
Total
2,417,034
Total weighted
average remain. contr.
life in months
11
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
67
Movements in share options and RSU / PSU during the period:
2025
2024
Number of
shares
Weighted
average
exercise price
(in DKK)
Number of
shares
Weighted
average
exercise price
(in DKK)
PSU / RSU
Outstanding at 1 January
654,447
0
Granted during period
592,693
699,700
Forfeited during period
(10,106)
(45,253)
Total outstanding
at 31 December
1,237,034
654,447
Share options
Outstanding at 1 January
3,294,000
40.0
4,872,800
41.3
Expired during period
(1,824,000)
44.8
(741,200)
44.7
Forfeited during period
(75,000)
33.1
(837,600)
43.3
Exercised during period
(215,000)
31.0
0
0
Total outstanding
at 31 December
1,180,000
34.8
3,294,000
40.0
In current
year a
total number
of 215,000
share options
were exercised
on various
dates.
The weighted
average
share price
at
the dates of exercise amounted
to DKK 35.2 per share.
The estimated
remaining cost
due to the
share contracts
and PSU/RSU is
USD 4.5 million
(2024: USD 2.5
million). An expense
of
USD 2.0
million (2024:
USD 0.6
million) is
recognized
in the
Consolidated
Income Statement
for the
period. The
exercise
period
of the share option contracts falls
in 2026 and for RSU and PSU ranges from
2027 and 2028.
The range of the
share price of exercised
and expired options
in the current year
is DKK 28.5 to
DKK 46.8
(2024: DKK 30.3 to
DKK
46.3).
Embla’s
Medical yearly
cost
related
to
the new
long-term
incentive
programs
is estimated
to
be around
USD 3.2
million
when
fully implemented.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
68
25. Hedging reserve
Embla
Medical
hedges
its
ISK
and
EUR
exposure,
using
a
twelve
month,
quarterly
layered
hedging
strategy.
This
is
done
with
forward
currency contracts
where Embla
Medical sells
EUR for
ISK. At
each balance
sheet date
Embla Medical
has outstanding
contracts
covering
approximately
50%
of
yearly
ISK
costs.
Due
to
the
layered
approach,
hedge
ratio
of
closed
contracts
is
approximately 80% of ISK costs.
Embla Medical applies hedge accounting (IFRS 9) to
the extent possible.
Movements in the hedging reserve during the period:
2025
2024
At 1 January
1,208
(258)
Change in fair value of hedging instrument recognized in Other Comprehensive Income
(5,234)
308
Reclassified to Income Statement
3,408
1,524
Deferred tax
365
(366)
At 31 December
(253)
1,208
At balance sheet
date ten forward
contracts were
open. The fair
value of the
contracts results
in an liability of
USD 0.4 million at
year
end
2025
(2024:
1.5
million
asset).
The
effects
of
the
foreign
currency-related
hedging
instruments
on
the
Company’s
financial position and performance are as follows:
31.12.2025
31.12.2024
Carrying amount
352
(1,475)
Notional amount
55,136
36,545
Maturity date
Mar-Dec 26
Mar-Dec 25
Hedge ratio
1:1
1:1
Weighted average hedged rate
for outstanding hedging instruments
149.2
153.8
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
69
26. Borrowings
31.12.2025
31.12.2024
Loans in USD
74,925
103,375
Loans In EUR
284,928
253,999
Total
359,853
357,374
Non-Current
292,174
328,754
Current
67,678
28,620
Total
359,853
357,374
Aggregated maturities of borrowings
are as follows:
31.12.2025
31.12.2024
In 2026 / 2025
67,678
28,620
In 2027 / 2026
238,626
51,224
In 2028 / 2027
10,651
277,530
In 2029 / 2028
10,641
0
Later
32,257
0
359,853
357,374
The table below shows how cash and non-cash
changes affect borrowings within the
Company:
2025
2024
At 1 January
357,374
333,335
Cash flows
(32,371)
39,787
Non-cash changes:
Acquisition related
2,506
0
Exchange rate differences
31,790
(16,198)
Amortization of borrowing costs
555
450
At 31 December 2025
359,853
357,374
The
weighted
average
interest
on
outstanding
loans
at
31.12.2025
was
2.5%
(2024:
3.3%).
The
following
table
highlights
key
information of the Company´s borrowings:
Lender
Type
Currency
Interest type
Outstanding
Available
Nordic Investment Bank
Term, Bullet
EUR
Fixed
59,175
0
Nordic Investment Bank
Term, Amortizing
EUR
Floating
58,433
0
Nordea, Danske Bank
Revolver
EUR
Floating
157,857
35,272
European Investment Bank
Term, Bullet
USD
Fixed
74,925
0
Danske Bank
Overdraft
Multicurrency
Floating
9,463
78,716
Total
359,853
113,988
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
70
27. Deferred tax assets / liabilities
2025
2024
At 1 January
8,887
13,111
Income tax payable for the period
29,926
29,456
Calculated tax for the period
(24,291)
(21,603)
Business combinations
(2,435)
(9,995)
Recognized in other comprehensive income
3,674
(1,697)
Exchange rate differences
(169)
(385)
At 31 December
15,592
8,887
Deferred tax in the Balance Sheet:
Deferred tax asset
55,380
46,365
Deferred tax liabilities
(39,788)
(37,478)
15,592
8,887
Movement in deferred tax
balances:
Recognized
in Income
Statement
Recognized
directly in
OCI
Other
(i)
Deferred tax
assets
Deferred tax
liabilities
1/1/2025
12/31/2025
Goodwill
(18,902)
(3,423)
(8)
(22,333)
4,228
(26,561)
Intangible assets
(16,657)
401
(3,471)
(19,727)
2,964
(22,691)
Property, plant and equipment
(1,870)
(327)
214
(1,983)
2,082
(4,065)
Tax loss carry forward
1,193
143
(43)
1,293
1,293
0
Inventories
19,227
6,382
3
25,612
26,424
(812)
Provisions
4,774
545
46
5,365
5,364
1
Current liabilities
16,745
969
225
17,939
19,363
(1,424)
Receivables
1,969
214
126
2,309
2,337
(28)
Other
2,408
731
3,674
305
7,118
7,197
(79)
Total
8,887
5,635
3,674
(2,603)
15,592
71,252
(55,660)
Deferred tax assets and liabilities offsetting
(15,872)
15,872
Net deferred tax assets (liabilities)
55,380
(39,788)
Recognized
in Income
Statement
Recognized
directly in
OCI
Other
(i)
Deferred tax
assets
Deferred tax
liabilities
1/1/2024
12/31/2024
Goodwill
(15,110)
(3,747)
(45)
(18,902)
4,240
(23,142)
Intangible assets
(8,899)
1,836
(9,594)
(16,657)
2,811
(19,468)
Property, plant and equipment
(1,946)
288
(212)
(1,870)
1,976
(3,846)
Tax loss carry forward
1,265
(7)
(65)
1,193
1,193
0
Inventories
15,972
3,257
(2)
19,227
20,040
(813)
Provisions
4,654
169
(49)
4,774
4,773
1
Current liabilities
11,842
4,981
(78)
16,745
17,890
(1,145)
Receivables
1,167
798
4
1,969
1,989
(20)
Other
4,166
279
(1,697)
(340)
2,408
3,490
(1,082)
Total
13,111
7,853
(1,697)
(10,381)
8,887
58,402
(49,515)
Deferred tax assets and liabilities offsetting
(12,037)
12,037
Net deferred tax assets (liabilities)
46,365
(37,478)
(i) Effects of foreign currency exchange
rate differences and acquisitions.
The Company
has unused
tax losses
available for
which no
deferred
tax asset
is recognized.
At year
end 2025
these unused
tax
losses amounted
to USD
28.4 million
(2024: USD
22.8 million).
USD 12.9
million of
this amount
will expire
in 5-10
years
(2024:
USD 8.4 million). The remaining tax losses
carry an indefinite term.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
71
In relation to the
elimination of intercompany
gain in inventories,
the Company has
recognized a deferred
tax benefit
of USD 6.2
million (2024: USD 0.9 million) in the Consolidated Income Statement.
Embla
Medical,
as
part
of
WDI
group
for
Pillar
Two
reporting,
has
applied
the
exception
to
recognize
deferred
tax
on
OECD’s/EU’s
Pillar Two Model Rules and local implementation
hereof.
28. Provisions
Warranty
Restructuring
Other
2025
provisions
provisions
provisions
Total
At 1 January
12,423
962
7,166
20,551
Additional provision recognized
11,722
700
3,645
16,067
Utilization of provision
(10,787)
(224)
(1,171)
(12,182)
Exchange rate differences
225
3
374
602
At 31 December 2025
13,583
1,441
10,014
25,038
Non-current
6,737
0
1,986
8,723
Current
6,846
1,441
8,028
16,315
At 31 December 2025
13,583
1,441
10,014
25,038
Warranty
Restructuring
Other
2024
provisions
provisions
provisions
Total
At 1 January
10,789
2,777
4,422
17,988
Additional provision recognized
10,012
2,452
4,176
16,640
Utilization of provision
(8,225)
(4,267)
(1,077)
(13,569)
Exchange rate differences
(152)
0
(356)
(508)
At 31 December 2024
12,423
962
7,166
20,551
Non-current
6,290
0
1,647
7,937
Current
6,133
962
5,519
12,615
At 31 December 2024
12,423
962
7,166
20,551
Warranty
provisions
are expected
to be
utilized
over the
next 6
years
in line
with warranty
terms. Restructuring
provisions
are
expected
to
be
utilized
within
the
next
12
months
as
projects
have
been
initialized
but
not
all
costs
have
materialized.
Other
provisions are
related
to various obligations
of which USD
8.0 million are expected
to be utilized
within the next
12 months, the
remaining amount in other provisions
relate to employee long term services.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
72
29. Deferred income
2025
2024
At 1 January
11,311
10,119
Deferred income
5,303
4,602
Released from deferred income
(3,110)
(2,962)
Exchange rate differences
851
(449)
At 31 December
14,355
11,311
Non-current
11,346
8,589
Current
3,009
2,722
At 31 December
14,355
11,311
Deferred
income
relates
to
the
sale
of
additional
warranty
for
prosthetic
products
and
service
checks
included
in
standard
warranty.
Income
from
additional
warranty
is
deferred
when
sold
and
released
on
a
straight
line
basis
within
the
warranty
period.
Income
from
service
checks
is
deferred
when
sold
and
released
when
the
service
has
been
rendered.
Additional
warranties range
from 2-6 years. The current
deferred income is presented
as part of other liabilities in the Consolidated
Balance
Sheet as indicated in note 32.
30. Other financial liabilities
31.12.2025
31.12.2024
Financial liabilities at amortized cost:
Deferred payments relating to business combinations
27,612
27,351
Other financial liabilities at amortized cost
212
381
Financial liabilities at fair value through Income Statement:
Contingent considerations relating to business combinations
25,380
29,157
Put options for shares in associates
1,706
1,315
Hedging derivatives:
Cash flow hedge - foreign currency forwards
352
0
55,261
58,204
Non-current
19,588
47,946
Current
35,673
10,258
55,261
58,204
Hedging derivatives
are classified
as other financial
assets when
the book value
is positive
and as other
financial liabilities
when
book value is negative.
Contingent consideration
relating to
business combination
is mainly resulting
from acquisition
of Streifeneder
and Fior &
Gentz.
The contingent
consideration
payments
for
Streifeneder
are
dependent
on savings
and fair
value
is determined
based
on best
information available at
the date of acquisition. The full value
of the contingent consideration
relating to Streifeneder
acquisition
was accounted
for at
acquisition date
and is payable
in 2026. The
payments related
to Fior
& Gentz
acquisition can
range up
to
17 million USD based
on management best
estimate. The first
payment was
made this year.
The remaining amount
is payable in
the years
2026 and
2027. The
estimated
payments
are based
on forecasted
sales growth
within the
Company’s
sales channels.
The
earnout
related
to
Naked
Prosthetics
acquisition
was
fully
paid
this
year.
The
amount
recognized
at
acquisition
date
for
current year’s
acquisition can be found in note 33. Business
combinations.
Put
options
for
purchase
of
remaining
shares
in
an
associates
are
calculated
as
a
multiple
of
EBITDA
of
the
associates
in
the
previous
financial
year
in
the proportion
which
the
put option
shares
bear
to
the
total
shares
of the
entities.
The option
s
are
exercisable in 2027 to 2033.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
73
31. Related party transactions
Balances
and
transactions
within
the
Company
(Embla
Medical
hf.
and
its
subsidiaries)
have
been
eliminated
in
consolidation
and are not disclosed in this note.
The Company
engages in
transactions with
some of its
associated companies
and other related
parties. The transactions
consist
of sale and purchases where commercial terms
and market prices apply.
Transactions
and balances with related parties:
Associates
2025
2024
Sales of products
5,929
2,825
Purchases
5,313
4,695
Receivables from associates at 31 December
1,347
647
Payables to associates at 31 December
378
469
Other related parties
2025
2024
Sales of products
1,143
890
Purchases
7,135
6,850
Receivables from other related at 31 December
533
440
Payables to other related at 31 December
111
612
For disclosures relating to key
management positions, refer
to note 6.
32. Other liabilities
31.12.2025
31.12.2024
Accrued expenses
25,105
23,033
Sales tax and VAT
6,861
4,979
Prepayments on orders
4,575
2,194
Sales return accrual
4,208
3,930
Deferred income
3,009
2,722
Other
4,231
2,503
47,989
39,361
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
74
33. Business combinations
On
17
July
2025
Embla
Medical
announced
the
acquisition
of
the
majority
share
(51%
of
the
shares)
in
the
privately
owned
Streifeneder
ortho.production
GmbH (“Streifeneder
”).
The investment
was
completed
on 29
August
2025 following
regulatory
approvals, hence four month
s
of sales is included in the Consolidated Financial Statement
s
for the year 2025 .
Streifeneder
is
an
international
developer
and
supplier
of
orthopaedic
mobility
solutions,
employing
around
100
people.
In
addition to its
offerings of
prosthetic and
orthotic components,
Streifeneder also
supplies orthopaedic materials
and equipment
to the
O&P industry.
In 2024, Streifeneder
realized sales
of EUR
25 million
(approximately
USD 29m) with
~70% of
sales related
to
prosthetics
and
orthopaedic
materials.
The
majority
of
sales
are
generated
in
Germany,
while
also
selling
into
other
key
European markets and distributing
into the Americas and APAC
regions.
As
part of
the consideration
paid
for
Streifeneder,
Embla
Medical
issued
2,805,135
new
shares.
The share
price of
each
share
was DKK 33.26, and the total value of the share
price capital increase is thus DKK 93 million (EUR 12.5 million / USD
14.6
million).
A few other small acquisitions were
made during the year.
Current year
acquisitions were
made to
strengthen
the Company´s
product and
service portfolios
and our patient
care business
segment. The accounting
for the acquisition
was provisionally
determined at the
end of the reporting
period. The goodwill is
not
deductible for income tax purpose.
In the
Consolidated
Income Statement
s
for the
year 2025,
sales amounting
to USD
11.8
million and
net loss
of USD
0.2 million
were related to current
year acquisitions.
The
current
year
acquisitions
took
place
in
the
middle
of
the
year.
If
the
acquisitions
had
occured
on
1
January
2025,
consolidated pro-forma
results for the
year ended 31 December
2025 would have
been revenue of
USD 29.4 million and
net loss
of USD 1.2
million.
Assets acquired and liabilities consumed at the date of acquisition:
Total
Property, plant and equipment
3,359
Other intangible assets
8,380
Other non-current assets
71
Inventories
6,029
Accounts and other receivables
392
Bank balances and cash equivalents
144
Borrowings
(2,506)
Deferred tax liabilities
(2,435)
Other liabilities
(3,978)
Non controlling interest
(4,611)
Net identifiable assets acquired
4,847
Goodwill
18,698
Net assets acquired
23,545
Consideration:
Net assets acquired
23,545
Contingent consideration and deferred payments
on current year´s acquisition
(4,740)
Issued new shares
(14,573)
Cash paid
4,232
Cash from acquired company
(144)
Consideration shown in Cash Flow
4,087
The split of property,
plant and equipment and other intangible assets
can be found in notes 11 and 14.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
75
34. Financial instruments
Financial assets and liabilities
The Company holds the following financial instruments:
Financial assets
Notes
31.12.2025
31.12.2024
Financial assets at amortized cost:
Accounts receivable
18
144,782
121,915
Cash and cash equivalents
20
102,507
86,163
Financial assets at amortized cost
16
2,260
1,390
Financial assets at fair value through Income Statement
16
1,706
1,315
Hedging derivatives - foreign currency forwards
16
0
1,475
Total
251,255
212,257
Financial liabilities
Notes
31.12.2025
31.12.2024
Financial liabilities at amortized cost:
Borrowings
26
359,853
357,374
Lease liabilities
12
181,716
142,415
Accounts payable
32,825
27,275
Other financial liabilities at amortized cost
30
27,824
27,732
Financial liabilities at fair value through Income Statement
30
27,086
30,472
Hedging derivatives - foreign currency forwards
30
352
0
Total
629,656
585,267
Fair value of financial instruments
In
the
above
overview
of
financial
instruments,
financial
assets
and
financial
liabilities
that
are
measured
at
fair
value
in
the
Consolidated Financial Statement
s
can be identified.
Except
as
detailed
in
the
following
table,
management
considers
that
the
carrying
amount
of
financial
assets
and
financial
liabilities recognized in the Consolidated
Financial Statements to approximate
their fair value.
31.12.2025
31.12.2024
Carrying
amount
Fair value
Carrying
amount
Fair value
Financial liabilities:
Borrowings
359,853
358,553
357,374
358,808
The
difference
between
the
fair
value
and
the
carrying
amount
relates
to
distribution
of
borrowing
cost
and
the
difference
between current market
floating rates and the
Company‘s rate
on fixed rate loans.
The fair value is determined as
a level 3 in the
fair value hierarchy.
Fair value hierarchy
The
following
table
explains
the
judgements
and
estimates
made
in
determining
the
fair
values
of
the
financial
instruments
recognized
and measured
at fair
value in
the Consolidated
Financial Statements.
In order
to convey
the reliability
of the
inputs
used
in
determining
the
fair
value,
the
Company
has
classified its
financial
instruments
into
the
three
levels
prescribed
under
IFRS accounting standards
as adopted by the European Union.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
76
Financial assets
Notes
Level 1
Level 2
Level 3
Total
Financial assets at fair value through income statement:
Call option for shares in associates
16
0
1,706
1,706
Total financial assets
0
0
1,706
1,706
Financial liabilities
Financial liabilities at fair value through income statement:
Contingent consideration related to
acquisition
30
25,380
25,380
Put option for shares in associates
30
1,706
1,706
Hedging derivatives - foreign currency forwards
30
352
352
Total financial liabilities
0
352
27,086
27,437
There were no transfers
between levels 1 and 2 for recurring
fair value measurements during
the year.
Level
1:
The
fair
value
of
financial
instruments
traded
in
active
markets
is
based
on
quoted
market
prices
at
the
end
of
the
reporting period. The quoted market price used
for financial assets held by the Company
is the current bid price.
Level
2: The
fair
value
of financial
instruments
that
are
not traded
in active
markets
is
determined
using
valuation
techniques
that maximise the use of observable market
data and rely as little as possible on entity
-specific estimates.
Level 3: If one or more of the significant inputs
is not based on observable market data,
the instrument is included in level 3.
Capital risk management
The
Company
manages
capital
to
ensure
that
the
Company
will
be
able
to
continue
as
a
going
concern
while
maximizing
the
return
to
stakeholders
through
the
optimization
of
the
debt
and
equity
balance.
The
Company's
overall
strategy
remains
unchanged since 2024.
The
capital
structure
of
the
Company
consists
of
debt,
which
includes
the
borrowings
disclosed
in
note
26,
cash
and
cash
equivalents and
equity attributable
to equity
holders of
the parent,
comprising issued
capital, reserves
and retained
earnings as
disclosed in the Consolidated Statement
of Changes in Equity.
Net interest bearing debt (NIBD) to
EBITDA before special items ratio
The
Company's
management
continuously
reviews
the
capital
structure.
As
a
part
of
this
review
the
management
considers,
amongst other the cost of capital and
net debt to EBITDA before special
items.
The NIBD to EBITDA before special items
at period end was as follows:
31.12.2025
31.12.2024
Net interest bearing debt
439,062
413,626
EBITDA before special items
185,922
173,264
Net interest bearing debt/EBITDA before special items
2.4
2.4
Loan covenants
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
77
Under the
terms of
the Company
borrowings,
which has
a carrying
amount of
USD 359.9
million (2024:
USD 357.4
million) the
Company is required to comply
with the following financial covenants
at the end of each annual and interim reporting period:
●
Net
debt
(including
deferred
payments
relating
to
business
combinations)
to
EBITDA
before
special
items
should
be
below 4.0.
The
Company
is
additionally
required
to
comply
with
the
following
financial
covenants
at
the
end
of
each
annual
reporting
period:
●
The
aggregate
EBITDA
of
the
Guarantors
for
the
relevant
reporting
period
represents
not
less
than
50%
of
the
Consolidated EBITDA of the Company.
●
The
aggregate
gross
assets
of
the
Guarantors
represents
not
less
than
50%
of
the
aggregate
gross
assets
of
the
Company.
The Company
has complied with
these covenants
throughout the
reporting period.
There are no
indications that
Embla Medical
will have difficulties complying with the covenants
in 2026.
Financial risk management objectives
The Company's
corporate
finance function
provides
services to
the business,
co-ordinates
access to
domestic and
international
financial markets, monitors
and manages the financial risks relating
to the operations of the Company
.
This is performed through
internal
risk reports
which analyze
exposures
by
degree
and
magnitude of
risks.
These risks
include liquidity
risk,
interest
rate
risk, foreign currency exchange
risk and counterparty credit risk.
The
general
policy
is
to
apply
natural
hedging
to
the
extent
possible
but
Embla
Medical
also
uses
active
hedging
of
currency
exposure that
is not covered
by the natural
hedge in sales
and costs
by currency.
The use of
financial derivatives
is governed
by
the Company's
policies approved
by the
Board of
Directors,
which provide
written
principles on
foreign
exchange
risk,
interest
rate
risk,
credit
risk,
the
use
of
financial
derivatives
and
non-derivative
financial
instruments
and
the
investment
of
excess
liquidity.
The
Company
does
not
enter
into
or
trade
financial
instruments,
including
derivative
financial
instruments,
for
speculative purposes.
Currency risk management
The
Company
operates
in
a
global
market,
hence
exposure
to
exchange
rate
fluctuations
arises.
Exchange
rate
exposures
are
managed within approved policy parameters.
The general policy is to apply natural
exchange rate hedging to
the extent possible.
Embla
Medical
hedges
its
ISK
and
EUR
exposure,
using
a
twelve
month,
quarterly
layered
hedging
strategy.
This
is
done
with
forward
currency contracts
where Embla
Medical sells
EUR for
ISK. At
each balance
sheet date
Embla Medical
has outstanding
contracts
covering
approximately
50%
of
yearly
ISK
costs.
Due
to
the
layered
approach,
hedge
ratio
of
closed
contracts
is
approximately 80% of
ISK costs. At
balance sheet date ten
forward contracts
were open. The fair
value of the contracts
results in
a liability
of USD 0.4
million at
year end
2025 (2024: USD
1.5 million
asset). Embla
Medical applies
hedge accounting
(IFRS 9)
to
the extent possible.
The carrying
amounts of
the Company's
monetary assets
and monetary
liabilities denominated in
currencies at the reporting date are as follows:
Liabilities
Assets
31.12.2025
31.12.2024
31.12.2025
31.12.2024
EUR
374,280
308,727
72,532
41,818
USD
177,931
198,980
110,533
110,606
ISK
62,588
56,210
18,783
15,723
SEK
28,218
24,562
14,522
9,317
GBP
7,672
6,486
6,832
4,888
Other
52,567
38,478
73,145
72,730
703,255
633,444
296,346
255,082
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
78
Foreign currency sensitivity analysis
The Company is mainly exposed to the fluctuation
of Icelandic krona (ISK) and Euro (EUR).
The following
table
details
the Company's
sensitivity
to a
10% decrease
in USD
against
the relevant
foreign
currencies
with all
other variables fixed.
The sensitivity analysis
includes all foreign
currency denominated
Income Statment
items and adjusts
their
translation
at the
period end
for a
10% change
in foreign
currency rates.
The table
below indicates
the effect
on net
profit and
equity where
USD weakens
10% against
the relevant
currency.
For
a 10%
strengthening
of USD
against
the relevant
currency,
there would be an equal and opposite impact on the profit
or loss and equity.
EUR
(i)
ISK
(ii)
2025
2024
2025
2024
Net profit / Equity
3,157
5,656
(4,780)
(5,726)
(i) 26%
(2024: 24%)
of the
Company's COGS
and OPEX
is in
EUR against
31% (2024:
28%) of
its sales
causing an
increase in
profit if
the USD
decreases against the EUR.
(ii) 11%
(2024: 11%)
of the
Company's COGS
and OPEX
is in
ISK against
0.5% (2024:
0.4%) of
its sales causing
a decrease
in profits
if the
USD
decreases against the ISK.
Hedge accounting is not considered in the above calculation.
Interest rate
risk management
The Company
is exposed
to interest
rate
risks as
funds are
borrowed
at floating
interest
rates.
Interest
rate
risk is
managed by
the Company´s
treasury
function and
fixed
rate
loans
or interest
rate
swap
contracts
may
be used
to
maintain
an appropriate
mix between
fixed
and
floating
rate
borrowings.
At
the
end
of 2025,
63%
of
total
borrowings
were
on
floating
interest
rates.
Hedging
activities
are
evaluated
regularly
to
align
with
interest
rate
views
and
defined
risk
appetite
and
to
ensure
optimal
hedging strategies are applied.
The Company did not have any
interest rate swap
agreements outstanding at balance sheet
date.
The
Company's
exposures
to
interest
rates
on
financial
assets
and
financial
liabilities
are
detailed
in
the
liquidity
risk
management section of this note.
Interest rate
sensitivity analysis
The
sensitivity
analysis
has
been
determined
based
on
the
exposure
to
interest
rates
on
borrowings
with
floating
terms.
The
analyses
is prepared
assuming the
amount of
liability outstanding
at the
reporting date
was outstanding
for the
whole year.
If
interest
rates
had
been
1
percent
higher/lower
and
all
other
variables
were
held
constant,
the
Company´s
profit
for
the
year
ended 31 December 2025 would have decreased/increased
by USD 2.3 million (2024: USD 2.3 million).
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
79
Liquidity risk management
The
Company
manages
liquidity
risk
by
maintaining
adequate
reserves,
banking
facilities
and
reserve
borrowing
facilities,
by
monitoring forecast
and actual cash
flows and matching
the maturity profiles
of financial assets
and liabilities. At
period end the
Company had
a total
liquidity of
USD 216.5
million, consisting
of undrawn
revolving
credit facilities
of USD
114.0 million
(2024:
USD 49.6 million) and cash and cash equivalents
of USD 102.5 million (2024: USD 86.2 million).
The
following
tables
detail
the
Company's
remaining
contractual
maturity
for
its
non-derivative
financial
liabilities.
The
tables
have
been
drawn
up
based
on
the
undiscounted
cash
flows
of
financial
liabilities
based
on
the
earliest
date
on
which
the
Company can be required to pay.
The table includes both interest and principal
cash flows.
Weighted
average
effective
interest
Less than 1
year
1-5 years
5+ years
Total
31.12.2025
Borrowings
3.2%
79,794
296,726
11,012
387,532
Lease liabilities
4.5%
35,227
114,325
71,615
221,166
Non-interest bearing liabilities
-
175,615
17,001
0
192,616
290,636
428,051
82,627
801,314
31.12.2024
Borrowings
4.5%
45,178
356,973
0
402,151
Lease liabilities
4.0%
29,307
86,347
52,975
168,629
Non-interest bearing liabilities
-
122,887
47,972
0
170,859
197,372
491,292
52,975
741,639
Credit risk management
The Company
manages the financial
counterparty credit
risk centrally.
Primary Banks should
have a
long-term credit
rating of
at
least A-/A3 and
a short-term credit
rating of at least
A-2/P-2. Other financial
counterparties should
have investment
grade credit
ratings.
Credit risk arises from
cash and cash equivalents
and deposits with banks and
financial institutions, as well as
credit exposures
to
customers, including outstanding
receivables.
Accounts
receivable
consist
of
a
large
number
of
customers
spread
across
geographical
areas.
Ongoing
credit
evaluation
is
performed
on the
financial condition
of accounts
receivable.
Refer
to note
18 for
assessment of
expected
credit
loss (ECL)
and
accounting policy on impairment of financial assets.
The Company
is exposed
to normal
business risk
in collecting
accounts receivable.
Adequate allowance
is made
for bad
debt in
line with the Company accounting policy.
Book value of financial assets measured at amortized
cost represents the maximum
exposure to credit risk.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
80
35. The Consolidation
Information about the main composition
of Embla Medical hf.
and its subsidiaries at the end of the reporting period is as
follows:
Place of registration
Name of company
and operation
Ownership %
Principal activity
Össur Americas Inc
USA
100%
Sales, R&D, distribution and manufacturer
Össur Australia PTY Ltd
Australia
100%
Sales, distribution and services
Össur Canada Inc
Canada
100%
Sales, distribution and services
Össur Deutschland GmbH
Germany
100%
Sales, distribution and services
Össur Europe BV
Netherlands
100%
Sales, distribution and services
Össur France Sarl
France
100%
Sales, distribution and services
Össur Iceland ehf
Iceland
100%
R&D and manufacturer
Össur UK Ltd
UK
100%
Sales, distribution and services
ForMotion Australia PTY Ltd
Australia
100%
Patient Care
College Park Industries, Inc
USA
100%
Sales, R&D, distribution and manufacturer
Fior & Gentz GmbH
Germany
100%
Sales, distribution and manufacturer
ForMotion Sweden AB
Sweden
100%
Patient Care
ForMotion Norway AS
Norway
100%
Patient Care
Touch Bionics Ltd
UK
100%
Manufacturer and R&D
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
81
36. Other information
The Company
is
required
to
file the
primary
statements
of
the
Consolidated
Financial
Statements
in
the
new
European
Single
Electronic Format
(ESEF) and
therefore
those statements
are prepared
in the XHTML
format that
can be displayed
in a standard
browser.
The primary statements
in the Consolidated Financial
Statements are
tagged using inline
eXtensible Business
Reporting
Language (iXBRL). The iXBRL
tags comply with the
ESEF taxonomy,
which is included in the
ESEF Regulation and
developed based
on
the
IFRS
taxonomy
published
by
the
IFRS
Foundation.
Where
a
primary
statements
line
item
is
not
defined
in
the
ESEF
taxonomy,
an extension
to the taxonomy
has been
created. Extensions
are anchored
to elements
in the ESEF
taxonomy,
except
for
extensions
which
are
subtotals.
The
Consolidated
Financial
Statements
submitted
to
the
Icelandic
Financial
Supervisory
Authority
consists
of
the
XHTML
document
together
with
certain
technical
files,
all
included
in
a
file
named
“EmblaMedical-
2025-12-31.zip”.
37. Insurance
31.12.2025
31.12.2024
Insurance
Book
Insurance
Book
value
value
value
value
Fixed assets and inventories
261,754
252,613
239,336
220,478
The book value of fixed
assets and inventories
is adjusted for inventory
reserve. The Company has purchased
a Property Damage
& Business
Interruption
insurance intended
to compensate
for damages
on owned
property and
temporary
loss of
income due
to
such
loss.
Additionally,
the Company
has
numerous
insurances
in
place
that
are
necessary
to
insure
against
the
risks
to
its
operations,
including
but
not
limited
to
general
and
product
liability,
professional
liability,
product
recall
insurance,
directors’
and officers’ liability and certain types of frauds
towards the Company.
38. Contingent liabilities
Embla Medical
has committed
to a
three-year
program designed
to deliver
high-quality prosthetic
care and
rehabilitation
to up
to
1,000
Ukrainian
amputees.
With
a
total
estimated
value
of
USD
11
million
over
three
years,
the
new
initiative
will
be
co-
financed by
the Government
of Iceland
(USD 3.9
million) and
Embla Medical
(USD 7.7
million). As
of year-end,
Embla Medical’s
remaining
financial
commitment
totals
USD 7.0 million,
which
will
be
recognized
as
expense
in
proportion
to
the
number
of
amputees served over the coming three-year
period.
The
Company
is
engaged
in
certain
litigation
proceedings
and
various
ongoing
audits
and
investigations.
Management,
on
an
ongoing basis,
assesses the
possible financial
impact of
current
and pending
litigations.
Relevant
information
is disclosed
when
management
is
able
to
assess
whether
a
litigation
could
potentially
have
a
material
financial
impact
on
the
Company.
In
the
opinion of management there
are currently no
litigations expected to
have a material
effect on the Company's
financial position,
operating profit or cash flow.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
82
39. Adoption of new and revised standards
New and amended IFRS that are effective for the current year
The following
amendment
to IFRS
became
mandatorily
effective
in the
current
year.
The application
of the
below amendment
has no effect on the Consolidated
Financial Statements:
Amendments to IAS 21: Lack of Exchangeability.
New and revised IFRS in issue but not yet effective
At the date
of authorization of
these Consolidated Financial
Statements, the Company
has not applied new and
revised IFRS that
have been issued but are not yet effective.
Management
of the
Company
does not
expect that
the adoption
of the
standards
will have
a material
impact on
the Financial
Statements of the Company in
future periods.
Management
has
performed
an
initial
assessment
of
the
impact
of
IFRS 18
on
the
Consolidated
Financial
Statements.
Since
IFRS 18
does
not
change
recognition
or
measurement
requirements,
but
focuses
on
presentation
and
disclosure,
the
implementation
is
not
expected
to
have
a
significant
impact
on
the
Company’s
overall
reported
financial
position
or
performance. Rather,
the impact will
primarily be related
to the classification
and presentation
changes within the
statement of
profit
or
loss,
enhanced
disaggregation
in
the
statement
of
financial
position
and
notes,
as
well
as
the
introduction
of
management-defined
performance
measures.
Based
on
the
analysis
performed,
the
Company
does
not
anticipate
any
material
adjustments
to
the
amounts
presented
in
the
Consolidated
Financial
Statements
that
would
be
required
by
IFRS 18.
Work
is
ongoing
to
update
internal
reporting
structures
to
comply
with
the
new
presentation
and disclosure
requirements
by
the effective date. IFRS
18 becomes effective for
annual reporting periods beginning on or after
1 January 2027.
Standards on
sustainability,
IFRS S1 and
IFRS S2 are
not impacting EU
companies as separate
legislation applies to
EU companies
(ESRS). The
European Sustainability
Reporting Standards
(ESRS) will
likely become
effective
in 2026
for the
Company depending
on when approved by Icelandic authorities.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
83
40. Summary of material accounting policies
Statement of compliance
The
Consolidated
Financial
Statements
have
been
prepared
in
accordance
with
IFRS
accounting
standards
as
adopted
by
the
European Union and additional requirements
in the Icelandic Annual Accounts Act no. 3/2006.
Basis of preparation
The
Consolidated
Financial
Statements
have
been
prepared
under
the
historical
cost
basis
except
for
certain
financial
instruments
that
are
measured
at
fair
values.
Historical
cost
is
generally
based
on
the
fair
value
of the
consideration
given
in
exchange
for
assets.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
at
the
measurement
date,
regardless
of
whether
that
price
is
directly
observable
or
estimated
using
another
valuation
technique.
In estimating
the fair
value
of an
asset
or a
liability,
the Company
considers
the
characteristics of the asset or
liability as market participants
would take those characteristics
into account when pricing the asset
or
liability
at
the
measurement
date.
Fair
value
for
measurement
and/or
disclosure
purposes
in
these
Consolidated
Financial
Statements
is determined
on such
a basis,
except for
share-based payment
transactions that
are within
the scope
of IFRS 2
and
measurements that
have some similarities
to fair
value but are
not fair
value, such as
net realizable
value of
inventories
in IAS 2
or value of assets in use in IAS 36.
Basis of consolidation
The
Consolidated
Financial
Statements
incorporate
the
financial
statements
of
the
Company
and
entities
controlled
by
the
Company and its subsidiaries. Control
is achieved when the Company:
-
has power over the investee
;
-
is exposed, or has rights, to variable returns
from its involvement with the investee
;
and
-
can use its power to affect its
returns.
The
Company
reassesses
whether
it
controls
an
investee
if facts
and
circumstances
indicate
that
there
are
changes
to
one
or
more of the three elements of control
listed above.
When the
Company has
less than
a majority
of the voting
rights of
an investee,
it has
power over
the investee
when the
voting
rights
are
sufficient
to
give
it
the
practical
ability
to
direct
the
relevant
activities
of
the
investee
unilaterally.
The
Company
considers
all relevant
facts
and circumstances
in assessing
whether the
Company's
voting rights
in an
investee
are sufficient
to
give it power,
including:
-
the
size
of
the
Company's
holding
of
voting
rights
relative
to
the
size
and
dispersion
of
holdings
of
the
other
vote
holders;
-
potential voting rights held by the Company,
other vote holders or other parties;
-
rights arising from other contractual
arrangements;
and
-
any
additional
facts
and
circumstances
that
indicate
that
the
Company
has,
or
does
not
have,
the
current
ability
to
direct
the
relevant
activities
at
the
time
that
decisions
need
to
be
made,
including
voting
patterns
at
previous
shareholders' meetings.
Subsidiaries are
fully consolidated
from the date
on which
control is
transferred
to the Company.
They are deconsolidated
from
the
date
that
control
ceases.
Specifically,
income
and
expenses
of
a
subsidiary
acquired
or
disposed
of
during
the
year
are
included
in
the
consolidated
statement
of
profit
or
loss
and
other
comprehensive
income
from
the
date
the
Company
gains
control until the date when the
Company ceases to control the
subsidiary.
Profit or loss and each
component of other comprehensive
income are attributed
to the owners of
the Company and to
the non-
controlling interests.
When necessary,
adjustments are made to
the financial statements
of subsidiaries to bring their accounting
policies in line with the Company's
accounting policies. All intercompany
assets and liabilities, equity,
income, expenses and cash
flows relating to transactions
between members of the Company are
eliminated in full on consolidation.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
84
Put
options
over
non-controlling
interest
are
recognized
as
financial
liabilities
at
the
present
value
of
the
estimated
exercise
price. The initial carrying amount is charged
against equity attributable
to owners of the parent, and
subsequent remeasurement
of the liability
are recognized
accordingly.
The Company
treats transactions
with non-controlling
interests that
do not result
in a
loss
of
control
as
transactions
with
equity
owners
of
the
Company.
A
change
in
ownership
interest
results
in
an
adjustment
between the carrying
amounts of the
controlling and
non-controlling interests
to reflect their
relative interests
in the subsidiary.
Any
difference
between
the
amount
of
the
adjustment
to
non-controlling
interests
and
any
consideration
paid
or
received
is
recognized directly in equity attributable
to owners of the Company.
Business combinations
Acquisitions
of
businesses
are
accounted
for
using
the
acquisition
method.
The
consideration
transferred
in
a
business
combinations is measured at fair
value, which is calculated as the sum of the acquisition
-date fair values of the assets transferred
by the Company,
liabilities incurred by
the Company to
the former owners
of the acquiree and
the equity interests
issued by the
Company in exchange for
control of the acquiree. Acquisition
-related costs are recognized
in profit or loss as incurred.
The acquiree's
identifiable
assets,
liabilities and
contingent
liabilities that
meet the
conditions
for recognition
under IFRS
3 are
recognized at their fair value
at the acquisition date, except
that:
-
deferred
tax
assets
or liabilities
and liabilities
or assets
related
to
employee
benefit arrangements
are
recognized
and
measured in accordance with IAS 12 Income Taxes
and IAS 19 Employee Benefits respectively;
-
liabilities or equity
instruments related
to share-based
payment arrangements
of the acquiree
or share-based
payment
arrangements
of
the
Company
entered
into
to
replace
share-based
payment
arrangements
of
the
acquiree
are
measured in accordance with IFRS 2 Share
-based Payment at the acquisition
date; and
-
assets (or disposal
groups) that are
classified as held for
sale in accordance
with IFRS 5 Non-current
Assets Held for
Sale
and Discontinued Operations are
measured in accordance with that standard.
Goodwill arising on
acquisition is recognized
as an asset
and initially measured
at cost,
being the excess
of the purchase
price of
the
business
combinations
over
the
Company's
interest
in
the
net
fair
value
of
the
identifiable
assets,
liabilities,
contingent
liabilities, the amount
of any non-controlling
interests in
the acquiree, and
the fair value
of the acquirer's
previously held
equity
interest
in the
acquiree. If,
after reassessment,
the Company's
interest
in the net
fair value
of the
acquiree's identifiable
assets,
liabilities and contingent
liabilities exceeds
the cost
of the business
combinations, the
excess is
recognized immediately
in profit
or
loss.
Non-controlling
interests
that
present
ownership
interests
and
entitle
their
holders
to
a
proportionate
share
of
the
entity's
net
assets
in the
event
of liquidation
may
be initially
measured
either at
fair
value
or
at
the non-controlling
interests'
proportionate
share
of
the
recognized
amounts
of
the
acquiree's
identifiable
net
assets.
The
choice
of
measurement
basis
is
made
on
a
transaction-by-transaction
basis.
Other
types
of
non-controlling
interests
are
measured
at
fair
value
or,
when
applicable, on the basis specified in another IFRS.
When
the
consideration
transferred
by
the
Company
in
a
business
combinations
includes
assets
or
liabilities
resulting
from
a
contingent
consideration
arrangement,
the contingent
consideration
is measured
at its
acquisition-date
fair value
and included
as
part
of the
consideration
transferred
in
a
business
combinations.
Changes
in
the
fair
value
of the
contingent
consideration
that qualify as
measurement period
adjustments are
adjusted retrospectively,
with corresponding
adjustments against
goodwill.
Measurement
period
adjustments
are
adjustments
that
arise
from
additional
information
obtained
during
the
‘measurement
period’ about facts and circumstances
that existed at the acquisition date.
The
subsequent
accounting
for
changes
in
the
fair
value
of
the
contingent
consideration
that
do
not
qualify
as
measurement
period
adjustments
depends
on
how
the
contingent
consideration
is
classified.
Contingent
consideration
that
is
classified
as
equity
is
not
remeasured
at
subsequent
reporting
dates
and
its
subsequent
settlement
is
accounted
for
within
equity.
Contingent
consideration
that is
classified as
an asset
or a
liability is
remeasured
at
subsequent
reporting
dates
in accordance
with IFRS 9 with the corresponding gain
or loss being recognized in profit or
loss.
If the
initial accounting
for a
business combinations
is incomplete
by the
end of
the reporting
period in
which the
combination
occurs,
the
Company
reports
provisional
amounts
for
the
items
for
which
the
accounting
is
incomplete.
Those
provisional
amounts
are
adjusted
during
the
measurement
period,
or
additional
assets
or
liabilities
are
recognized,
to
reflect
new
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
85
information obtained
about facts
and circumstances
that existed
at the acquisition
date that,
if known, would
have affected
the
amounts recognized at that
date.
When
a
business
combinations
is
achieved
in
stages,
the
Company's
previously
held
equity
interest
in
the
acquiree
is
remeasured to
fair value at
the acquisition date
(i.e., the date when
the Company obtains
control) and the
resulting gain or
loss,
if
any,
is
recognized
in
profit
or
loss.
Amounts
arising
from
interests
in
the
acquiree
prior
to
the
acquisition
date
that
have
previously
been
recognized
in
other
comprehensive
income
are
reclassified
to
profit
or
loss
where
such
treatment
would
be
appropriate if that interest
were disposed of.
The
measurement
period
is
the
period
from
the
date
of
acquisition
to
the
date
the
Company
obtains
complete
information
about facts and circumstances that
existed as of the acquisition date and is subject
to a maximum of one year.
Investments in associates
An associate is an entity
over which the Company has significant
influence. Significant influence is
the power to participate
in the
financial and operating policy decisions of the investee
but is not in control or joint control
over those policies.
The
profit
and
losses,
assets
and
liabilities
of
associates
are
incorporated
in
the
Consolidated
Financial
Statements
using
the
equity method
of accounting.
Under the
equity method,
investments
in associates
are initially
recognized
in the
balance sheet
and adjusted
for post-acquisition
changes in
the Company's
share of
the net
assets of
the associate,
less any
impairment in
the
value of
individual
investments.
Dividends received
or receivable
from associates
are
recognized
as a
reduction
in the
carrying
amount of the investment.
Where the Company´s
share of losses in
associates equals or exceeds
its interest in
the associate, the
Company does
not recognize
further losses,
unless it has
incurred legal
or constructive
obligations
or made payments
on behalf
of the associate.
The requirements
of IAS 36
Impairment of
Assets are
applied to determine
whether it is
necessary to
recognize any
impairment
loss with
respect to
the Company's
investment
in an
associate. When
necessary,
the entire
carrying amount
of the
investment
(including
goodwill)
is
tested
for
impairment
in
accordance
with
the
standard
as
a
single
asset
by
comparing
its
recoverable
amount
(higher of
value
in use
and fair
value
less
costs
of disposal)
with its
carrying
amount.
Any
impairment
loss
recognized
forms part
of the
carrying amount
of the
investment.
Any reversal
of that
impairment loss
is recognized
in accordance
with IAS
36 to the extent that the recoverable
amount of the investment subsequently
increases.
Upon loss
of significant
influence over
the associate,
the Company
measures and
recognizes
any retained
investment
at its
fair
value. Any
difference
between
the carrying
amount of
the associate
upon loss
of significant
influence and
the fair
value of
the
retained investment
and proceeds from disposal is recognized
in profit or loss.
Goodwill
Goodwill is initially
recognized
as an asset
at the excess
of the purchase
price of the
business combinations
over the
Company's
interest
in
the
net
fair
value
of
the
identifiable
assets,
liabilities,
contingent
liabilities,
the
amount
of
any
non-controlling
interests in the acquiree, and the fair
value of the acquirer's previously
held equity interest in the acquiree.
Goodwill
is
not
amortized
but
recognized
at
cost
less
accumulated
impairment
losses.
For
impairment
testing,
goodwill
is
allocated
to
each
of
the
Company's
cash-generating
units
(CGU)
expected
to
benefit
from
the
synergies
of
the
combination.
CGU’s
to which
goodwill has
been allocated
are tested
for impairment
annually,
or more
frequently when
there is
an indication
that the
unit may
be impaired.
When performing
the impairment
test,
the recoverable
amount of
the CGU
is determined.
The
value in use is calculated
as the present value
of expected future cash
flows from the CGU.
If the recoverable
amount of the CGU
is less than
its carrying amount,
the impairment loss
is allocated
first to
reduce the carrying
amount of any
goodwill allocated
to
the
unit
and
then
to
the
other
assets
of
the
unit
pro-rata
on
the
basis
of
the
carrying
amount
of
each
asset
in
the
unit.
Impairment loss
for goodwill
is recognized
directly in
profit or
loss in
the Consolidated
Income Statement.
The carrying
amount
of
goodwill
is
tested
for
impairment
together
with
the
other
non-current
assets
in
the
CGU
to
which
goodwill
is
allocated
to.
Impairment of goodwill is not reversed
in a subsequent period.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
86
Consistent
with
the
Company’s
management
and
reporting
structure,
the
lowest
level
of
CGU’s
is
the
individual
geographical
segment, as cash
inflows are
generated largely
independent of
cash inflow in
other geographical
segments within the
Company.
Accordingly,
impairment
tests
are
carried
out
per
geographical
segment,
and
goodwill
and
other
intangibles
are
allocated
to
these CGU’s.
On
disposal
of the
relevant
CGU,
the
attributable
amount of
goodwill
is
included
in the
determination
of the
profit
or
loss
on
disposal.
The Company's policy for
goodwill arising on the
acquisition of an associate
is described in the
accounting policy for
Investments
in associates above.
Revenue recognition
Revenue
is
measured
at
the
transaction
price
of
the
consideration
received
or
receivable.
Revenue
is
reduced
for
estimated
customer returns, rebates
and other similar allowances.
Sale of goods and services
The Company
sells bracing
& support
products,
prosthetics &
neuro orthotics
products,
and related
services both
as wholesaler
and directly to customers
through its own distribution channels.
Revenue for the
sale of products
including standard
warranty is recognized
when control
of the goods has transferred.
Control is
considered
transferred
when
the
goods
have
been
shipped
or
directly
delivered
to
retail
customer.
Following
shipment,
it
is
considered
that
our
customers
have
full discretion
over
the
manner
of distribution
and
price to
sell
the
goods.
They
hold
the
primary responsibility when selling the goods, and bear
the risks of obsolescence and loss in relation
to the goods. A receivable is
recognized by
the Company
when the goods
are shipped
to the customer
as this represents
the point
in time at
which the right
to consideration
becomes unconditional,
as only the
passage of time
is required before
payment is due.
General payment
terms
in the Company´s main markets
is 30 days.
Sales
related
standard
warranties
serve
as an
assurance
that
the products
sold
comply
with
agreed-upon
specifications,
those
warranties are
accounted for
in accordance
with IAS 37
Provisions.
For some prosthetics
products, a
service check is
included in
the
standard
warranty
and
is
treated
as
a
distinct
service
and
is
accounted
for
as
a
separate
performance
obligation.
The
customer
has an
option to
purchase
an additional
warranty,
which is
treated
as a
distinct
service as
the Company
promises
to
provide
the service
to the
customer in
addition to
the product
and the
standard
warranty.
That warranty
is accounted
for as
a
separate performance obligation.
Revenues from the
sale of additional warranties
are deferred when
sold and released on a
straight-line basis within the
warranty
period. Revenues
from service
checks included
in the
standard
warranty
are deferred
when sold
and released
when the
service
has been rendered
or the service
obligation has
ended. Deferred
revenues are
shown separately
within liabilities
in the balance
sheet.
Under the Company’s
standard contract
terms, customers have
a right of return
within 30-90 days.
At the point
of sale, a refund
liability
and
a
corresponding
adjustment
to
revenue
is
recognized
for
those
products
expected
to
be
returned.
The
Company
uses
its
accumulated
historical
experience
to
estimate
the
number
of
returns
on
a
portfolio
level
using
the
expected
value
method.
It
is
considered
highly
unlikely
that
a
significant
reversal
in
the
cumulative
revenue
recognized
will
occur
given
the
consistent level of returns
over previous years.
Interest revenue
and dividend
Interest income
from a financial asset
is recognized when
it is probable that
the economic benefits will
flow to the Company
and
the
amount
of
income
can
be
measured
reliably.
Interest
income
is
accrued
on
a
time
basis,
by
reference
to
the
principal
outstanding
and at
the effective
interest
rate applicable,
which is
the rate
that exactly
discounts estimated
future cash
receipts
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
87
through the
expected life
of the
financial asset
to that
asset's net
carrying amount
on initial
recognition. Dividend
income from
investments is recognized
when the shareholder's right to receive payment
has been established.
Leases
The Company
leases office
buildings,
manufacturing
and warehouse
facilities
and vehicles.
Rental
contracts
are
typically
made
for
fixed
periods
but
may
have
extension
options,
exercisable
by
the
Company.
In
determining
the
lease
term,
management
considers
all facts
and circumstances
that create
an economic
incentive
to exercise
an extension
option. Extension
options are
only
included
in
the
lease
term
if the
lease
is
reasonably
certain
to
be extended.
Lease
terms
are
negotiated
on
an
individual
basis and contain a wide range of different
terms and conditions.
The Company assesses
whether a contract
is or contains
a lease, at inception
of the contract.
The Company recognizes
a right of
use asset and a corresponding lease liability
with respect to all lease arrangements
in which it is the lessee, except
for short-term
leases (defined
as leases
with a
lease term
of 12
months or
less) and
leases of
low value
assets. For
these leases,
the Company
recognizes
the
lease
payments
as
an
operating
expense
on
a
straight-line
basis
over
the
term
of
the
lease,
unless
another
systematic basis is more representative
of the time pattern in which economic benefits
from the leased assets are consumed.
The lease liability
is initially measured
at the present
value of the
lease payments
that are
not paid at
the commencement
date,
discounted
by using
the rate
implicit in
the lease.
If this
rate
cannot
be readily
determined,
the Company
uses its
incremental
borrowing rate,
being the rate
that the
individual lessee
would have
to pay
to borrow
the funds necessary
to obtain
an asset
of
similar value to the right of use asset in a similar economic
environment,
with similar terms, security and conditions.
To
determine the
incremental
borrowing rate,
the Company
uses a
build-up approach
that begins
with a
risk-free
interest
rate.
The rate is
then adjusted for
credit risk for
leases held by the
Company and further
modified based on specific
lease factors
such
as term, country and currency.
The lease payments
incorporated
in the
measurement of
the lease
liability includes
fixed payments
less any
incentives, variable
lease payments
that depend on
an index or
rate, expected
residual guarantees
,
and the exercise
price of purchase
options if the
Company expects to exercise
the option.
The lease liability
is subsequently
measured by
increasing the carrying
amount to
reflect interest
on the lease
liability (using
the
effective
interest
method) and
by reducing
the carrying
amount to
reflect the
lease payments
made. The
Company remeasures
the lease
liability if
the lease
term has
changed,
when lease
payments
changes
in an
index or
rate
or when
a lease
contract
is
modified, and the modification is not accounted
for as a separate lease.
Right of
use asset
is initially
measured at
the amount
equal to
the initial
measurement
of lease
liability.
Right of
use assets
are
depreciated
over
the shorter
period of
lease term
and useful
life
of the
underlying
asset.
If a
lease transfers
ownership
of the
underlying
asset
or
the
cost
of
the
right-of-use
asset
reflects
that
the
Company
expects
to
exercise
a
purchase
option,
the
related
right-of-use
asset
is
depreciated
over
the
useful
life
of
the
underlying
asset.
The
depreciation
starts
at
the
commencement date of the lease.
Variable
rents
that depend
on usage
are not
included in
the measurement
of the
lease liability
and the
right of
use asset.
The
related
payments
are
recognized
as
an
expense
in
the
period
in
which
the
event
or
condition
that
triggers
those
payments
occurs.
As a practical
expedient, IFRS
16 permits a
lessee not to
separate non-lease
components, and
instead account
for any
lease and
associated non-lease components as
a single arrangement. The Company
has used this practical expedient.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
88
Foreign currencies
Functional and presentation currency
Items
included
in
the
financial
statements
of
each
of
the
group’s
entities
are
measured
using
the
currency
of
the
primary
economic
environment
in
which
the
entity
operates,
the
functional
currency.
The
Consolidated
Financial
Statements
are
presented in USD, which is the Company´s
reporting currency and the functional currency
of Embla Medical hf.
Transactions and
balances
Foreign
currency
transactions
are
translated
into
the
functional
currency
using
the
exchange
rates
at
the
dates
of
the
transactions.
Foreign exchange
gains and
losses resulting
from the
settlement
of such
transactions,
and from
the translation
of
monetary assets and
liabilities denominated in foreign
currencies at 31 December
2025 exchange rates,
are generally
recognized
in income statement.
Foreign subsidiaries
The income
statement
and balance
sheet of
foreign
subsidiaries
that have
a functional
currency different
from
the Company‘s
presentation currency are
translated into the presentation
currency as follows:
●
assets and liabilities are translated
at the closing rate at balance sheet date,
●
income
and
expenses
for
income
statement
and
statement
of
comprehensive
income
are
translated
at
average
exchange rates,
and
●
all resulting exchange differences
are recognized in other comprehensive
income.
On consolidation,
exchange
differences arising
from the
translation of
any net
investment
in foreign
entities, and
of borrowings
and
other
financial
instruments
designated
as
hedges
of
such
investments,
are
recognized
in
other
comprehensive
income.
When
a
foreign
operation
is
sold
or
any
borrowings
forming
part
of
the
net
investment
are
repaid,
the
associated
exchange
differences are reclassified
to profit or loss, as part of the gain or loss
on sale.
Goodwill and
fair value
adjustments
arising on
the acquisition
of a
foreign
operation
are treated
as assets
and liabilities
of the
foreign operation and translated
at the closing rate as per 31 December 2025.
Share capital
The share
capital
of Embla
Medical
at
balance
sheet
date
is
ISK 430,441,257
nominal
value,
divided
into
the
same
number
of
shares. There is only one class of shares, and all shares
carry one vote, besides treasury shares that
do not carry voting rights.
Share premium
The share premium
reserve is
comprised of payments
in excess
of nominal value
of ISK 1
per share
that
shareholders have
paid
for shares sold by the Company.
Share-based payments
Equity-settled
share-based
payments
to
employees
and others
providing
similar services
are
measured
at
the fair
value
of the
equity
instruments
at
the
grant
date.
Details
regarding
the
determination
of
the
fair
value
of
equity-settled
share-based
transactions are set out in note 24.
The fair value
determined at the
grant date
of the equity-settled
share-based payments
is expensed on
a straight-line
basis over
the
vesting
period,
based
on
the
Company's
estimate
of
equity
instruments
that
will
eventually
vest,
with
a
corresponding
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
89
increase in
equity.
At
the end
of each
reporting period,
the Company
revises
its estimate
of the
number of
equity instruments
expected
to
vest.
The
impact
of
the
revision
of
the
original
estimates,
if
any,
is
recognized
in
profit
or
loss
such
that
the
cumulative
expense
reflects
the
revised
estimate,
with
a
corresponding
adjustment
to
the
equity-settled
employee
benefits
reserve.
Taxation
Income tax expense represents
the sum of the tax currently payable
and deferred tax.
Current tax
The
tax
currently
payable
is
based
on
taxable
profit
for
the
period.
Taxable
profit
differs
from
net
profit
as
reported
in
the
Consolidated Income
Statement
because it
excludes items
of income
or expense
that are
taxable or
deductible in
other periods
and it
further excludes
items that
are never
taxable
or deductible.
The Company's
current
tax is
calculated
using tax
rates
that
have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax
Deferred
tax is
recognized
on temporary
differences
between the
carrying amounts
of assets
and liabilities
in the
Consolidated
Financial
Statements
and
the
corresponding
tax
bases
used
in
the
computation
of
taxable
profit.
Deferred
tax
liabilities
are
generally
recognized
for
all
taxable
temporary
differences.
Deferred
tax
assets
are
generally
recognized
for
all
deductible
temporary
differences
to
the
extent
that
it
is
probable
that
taxable
profits
will
be
available
against
which
those
deductible
temporary
differences
can
be
utilized.
Such
deferred
tax
assets
and
liabilities
are
not
recognized
if
the
temporary
difference
arises
from
goodwill
or
from
the
initial
recognition
(other
than
in
a
business
combinations)
of
other
assets
and
liabilities
in
a
transaction that affects neither
the taxable profit nor the accounting
profit.
Deferred
tax
liabilities
are
recognized
for
taxable
temporary
differences
associated
with
investments
in
subsidiaries,
except
where the
Company is
able to
control the
reversal of
the temporary
difference
and it
is probable
that the
temporary difference
will
not
reverse
in
the
foreseeable
future.
Deferred
tax
assets
arising
from
deductible
temporary
differences
associated
with
such investments
and interests
are only
recognized
to the
extent
that it
is probable
that there
will be
sufficient
taxable
profits
against which to utilize the benefits
of the temporary differences
and they are expected to reverse
in the foreseeable future.
The carrying amount
of deferred
tax assets
is reviewed at
each balance sheet
date and reduced
to the extent
that it is
no longer
probable that sufficient taxable
profits will be available to allow
all or part of the asset to be recovered.
Deferred
tax assets
and liabilities
are measured
at the
tax
rates
that are
expected to
apply in
the period
in which
the liability
is
settled or
the asset
realized,
based on
tax rates
(and tax
laws) that
have been
enacted or
substantively
enacted at
the balance
sheet
date.
The
measurement
of
deferred
tax
liabilities
and
assets
reflects
the
tax
consequences
that
would
follow
from
the
manner in which the Company expects, at
the reporting date, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax
assets and
liabilities are offset
when there is
a legally
enforceable right
to set off
current tax
assets against
current
tax liabilities
and when
they relate
to income
taxes
levied by
the same taxation
authority and
the Company
intends to
settle its
current tax assets and liabilities on
a net basis.
In the
preparation
of the
Consolidated
Financial Statements,
accumulated
gains
in inventories
from intercompany
transactions
are
eliminated.
This
influences
the
income
tax
expenses
of
the
consolidated
companies,
and
an
adjustment
is
included
in
the
deferred
tax
asset.
Income
tax
expense
is
calculated
in
accordance
with
tax
rates
in
the
countries
where
the
inventories
are
purchased.
Embla
Medical,
as
a
part
of
William
Demant
Invest
A/S
group
for
Pillar
Two
reporting,
has
applied
the
temporary
exception,
introduced in May
2023, from the accounting requirements
for deferred
taxes in IAS 12,
so that the group neither
recognizes nor
discloses information about deferred
tax assets and liabilities related to
Pillar Two income taxes.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
90
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
91
Current and deferred
tax for the year
Current
and
deferred
tax
are
recognized
in
profit
or
loss,
except
when
they
relate
to
items
that
are
recognized
in
Other
Comprehensive
Income
or
directly
in
equity,
in
which
case,
the
current
and
deferred
tax
are
also
recognized
in
Other
Comprehensive Income
or directly in
equity respectively.
Where current tax
or deferred
tax arises from
the initial accounting
for
a business combinations, the tax effect
is included in the accounting for the business
combinations.
Property, plant and equipment
Property,
plant and equipment
are recognized
as an asset
when it is probable
that future economic
benefits associated
with the
asset will flow to the Company and the cost
of the asset can be measured in a reliable manner.
Property,
plant
and equipment
which qualify
for
recognition
as an
asset are
initially measured
at
cost.
The cost
of a
property,
plant and
equipment comprises
its purchase
price and
any directly
attributable
cost
of bringing
the asset
to working
condition
for its intended use.
The
depreciable
amount
of
the
asset
is
allocated
on
a
straight-line
basis
over
its
useful
life.
The
depreciation
charge
for
each
period is
recognized
as an
expense.
The estimated
useful
lives,
residual
values
and depreciation
method
are
reviewed
at
each
balance sheet date, with the effect of any
changes in estimate accounted
for on a prospective basis.
The following useful lives are used
in the calculation of depreciation:
Machinery and equipment
3-10 years
Office equipment
5-8 years
Computer equipment
2-5 years
Leasehold improvements are depreciated
over the lease term.
The gain or loss arising
on the disposal or retirement
of an asset is determined
as the difference between
the sales proceeds and
the carrying amount of the asset at the date
of the sale transaction and is recognized
in the Consolidated Income Statement.
Intangible assets
Intangible assets acquired separately
Intangible assets
with finite
useful life
are reported
at cost
less accumulated
amortization
and accumulated
impairment losses.
Amortization
is
allocated
on
a
straight-line
basis
over
their
estimated
useful
lives.
The
estimated
useful
life
and
amortization
method are reviewed
at the end of each
balance sheet date,
with the effect of
any changes in
estimate being accounted
for on a
prospective basis. Intangible assets
with indefinite useful lives are carried at cost
less accumulated impairment losses.
The following useful lives are used
in the calculation of amortization:
Customer and distribution relationships
4-10 years
Patents and development
costs
5-50 years
Trademarks
3-infinitive
Software and other
2-10 years
Internally generated
intangible assets
Expenditure on research activities is recognized
as an expense in the period in which it is incurred.
An
internally
generated
intangible
asset
arising
from
the
Company's
development
is
recognized
only
if
all
of
the
following
conditions
are
met:
the
technical
feasibility
of
completing
the
intangible
asset
so
that
it
will
be
available
for
use
or
sale;
the
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
92
intention to complete
the intangible asset
and use or sell it; the
ability to use or sell
the intangible asset;
the intangible asset
will
generate
probable
future
economic
benefits;
the
availability
of adequate
technical,
financial
and
other
resources
to
complete
the development
and to
use or
sell the
intangible
asset and
the ability
to measure
reliably
the expenditure
attributable
to the
intangible asset during its development.
The amount
initially recognized
for internally
generated
intangible
assets is
the sum
of the
expenditure
incurred from
the date
when the intangible asset
first meets the recognition
criteria listed above.
Where internally generated
intangible asset cannot
be
recognized,
development
expenditure
is charged
to profit
or loss
in the
period in
which it
is incurred.
Majority of
development
expenditure is expensed in the period in which it is
incurred except for certain
projects.
After
initial
recognition,
internally
generated
intangible
assets
are
reported
at
cost
less
accumulated
amortization
and
accumulated impairment losses, on the same basis
as intangible assets acquired separately.
Intangible assets acquired in a business combinations
Intangible assets
acquired in
a business
combinations are
identified and
recognized
separately
from goodwill
where they
satisfy
the definition of
an intangible asset,
and their fair
values can be
measured reliably.
The cost of
such intangible assets
is their fair
value at the acquisition date.
After
initial
recognition,
intangible
assets
acquired
in
a
business
combinations
are
reported
at
cost
less
accumulated
amortization and accumulated impairment
losses, on the same basis as intangible assets acquired
separately.
Derecognition of intangible assets
An intangible
asset is
derecognized
on disposal,
or when
no future
economic benefits
are expected
from use
or disposal.
Gains
or losses
arising from
derecognition
of an
intangible
asset, measured
as the
difference
between the
net disposal
proceeds and
the carrying amount of the asset, are recognized
in profit or loss when the asset is derecognized.
Impairment of tangible and intangible assets excluding goodwill
At
each
balance
sheet
date,
the
Company
reviews
the
carrying
amounts
of
its
tangible
and
intangible
assets
to
determine
whether there is
any indication
that those assets
have suffered
an impairment loss.
If any such
indication exists,
the recoverable
amount
of
the
asset
is
estimated
to
determine
the
extent
of
the
impairment
loss.
Where
it
is
not
possible
to
estimate
the
recoverable amount
of an individual
asset, the Company
estimates the recoverable
amount of the
cash-generating unit
(CGU) to
which
the
asset
belongs.
Where
a
reasonable
and
consistent
basis
of
allocation
can
be identified,
assets
are
also
allocated
to
individual CGU,
or otherwise they
are allocated
to the smallest
group of
CGU’s
for which
a reasonable
and consistent
allocation
basis can be identified.
Intangible
assets
with indefinite
useful lives
and intangible
assets
not yet
available
for use
are tested
for
impairment
annually,
and whenever there is an indication that
the asset may be impaired.
Recoverable
amount is
the higher of
fair value
less costs
to sell
and value
in use.
In assessing value
in use, the
estimated future
cash
flows
are
discounted
to
their present
value
using
a pre
-tax
discount
rate
that
reflects
current
market
assessments
of the
time value of money and the risks specific to the asset
for which the estimates of future cash
flows have not been adjusted.
If the recoverable
amount of an asset
(or CGU) is estimated
to be less than its
carrying amount, the carrying
amount of the asset
(CGU) is reduced to its recoverable
amount. An impairment loss is recognized
immediately in profit or loss.
Cash and cash equivalents
Cash and
cash equivalents
comprise cash
on hand,
deposits with
banks and
deposits with
financial institutions.
Bank overdrafts
are
shown
within
borrowings
in
current
liabilities
in
the
Consolidated
Balance
Sheet.
Deposits
that
are
subject
to
regulatory
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
93
restrictions
and
are
therefore
not
available
for
general
use
by
the
Company
are
presented
as
restricted
cash
and
disclosed
in
note 16.
Inventories
Inventories
are stated
at the lower
of cost
and net realizable
value. Costs,
including an appropriate
portion of fixed
and variable
overhead expenses, are
assigned to inventories
held by the method most
appropriate to the class
of inventory,
with the majority
being
valued
on
a
standard
cost
basis.
Net
realizable
value
represents
the
estimated
selling
price
for
inventories
less
all
estimated costs of completion
and costs necessary to make the sale.
Provisions
Provisions are recognized
when the Company has a present
obligation as a result of a past event,
it is probable that the Company
will be required to settle the obligation,
and a reliable estimate can be made of the amount
of the obligation.
The amount
recognized
as a
provision
is the
best estimate
of the
consideration
required
to settle
the present
obligation
at the
balance sheet date,
considering the risks
and uncertainties
surrounding the
obligation. Where
a provision
is measured using
the
cash flows estimated to settle
the present obligation, its carrying amount
is the present value of those cash flows.
When some
or all
of the
economic benefits
required
to settle
a provision
are expected
to be
recovered
from a
third
party,
the
receivable is recognized as
an asset if it is virtually certain that
reimbursement will be received,
and the amount of the receivable
can be measured reliably.
Warranty provisions
The Company
generally offers
2-6 years
warranties
for its
prosthetics
products. Warranty
provisions include
expected
warranty
costs for products
sold with standard
warranty and are
recognized at the
date of sale of the
relevant products,
at management´s
best estimate
of the
expenditure
required to
settle the
Company's
obligation.
Management estimates
the related
provision
for
future
warranty
claims based
on historical
warranty
claim information,
as well
as recent
information
on parts
and labor
costs.
The assumptions made in relation to the current
period are consistent with those
in prior year.
Restructuring provisions
Restructuring
provision
is
recognized
when
the
Company
has
developed
a
detailed
formal
plan
for
the
restructuring
and
has
started
to implement
it or
announcing
its main
features
to those
affected
by
it. The
measurement
of a
restructuring
provision
includes only
the direct expenditures
arising from
the restructuring,
which are those
amounts that
are both necessarily
entailed
by the restructuring and not associated
with the ongoing activities of the entity.
Other provisions
Other provisions mainly consist of legal and
employee related provisions.
Financial instruments
Financial instruments
are financial
assets and
financial liabilities.
They are
recognized
in the Company’s
balance sheet
when the
Company
becomes
a
party
to
the
contractual
provisions
of
the
instrument
and
are
initially
measured
at
fair
value.
Transaction
costs that are directly
attributable to the
acquisition or issue of financial instruments
(other than financial assets and
financial liabilities
at
fair
value
through
profit
or
loss) are
instruments,
as appropriate,
on initial
recognition.
Transaction
costs
directly attributable
to the
acquisition of
financial instruments
at fair
value through
profit or
loss are
recognized
immediately in
profit or loss.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
94
Effective interest
method
The
effective
interest
method
is
a
method
of
calculating
the
amortized
cost
of
a
debt
instrument
and
of
allocating
interest
income
over
the
relevant
period.
The
effective
interest
rate
is
the
rate
that
exactly
discounts
estimated
future
cash
receipts
(including all fees
on points
paid or received
that form
an integral
part of the
effective interest
rate, transaction
costs and
other
premiums
or
discounts)
through
the
expected
life
of
the
debt
instrument
or,
where
appropriate,
a
shorter
period
to
the
net
carrying amount on initial recognition.
Income
is
recognized
on
an
effective
interest
basis
for
debt
instruments
other
than
those
financial
assets
classified
as
at
fair
value through profit or loss (FVTPL).
Financial assets
All
regular
way
purchases
or
sales
of
financial
assets
are
recognized
and
derecognized
on
a
trade
date
basis.
Regular
way
purchases or
sales are
purchases or
sales of
financial assets
that require
delivery of
assets within
the time frame
established
by
regulation or convention
in the marketplace. All
recognized financial
assets are measured
subsequently in their entirety
at either
amortized cost or fair value,
depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions
are measured subsequently at
amortized cost:
-
the financial asset
is held within
a business model
whose objective
is to hold
financial assets
to collect contractual
cash
flows; and
-
the
contractual
terms
of
the
financial
asset
give
rise
on
specified
dates
to
cash
flows
that
are
solely
payments
of
principal and interest on the principal amount
outstanding.
Financial assets
that do
not meet
the criteria
for being
measured
at amortized
cost
are measured
at FVTPL.
Financial assets
at
FVTPL are
measured at
fair value
at the
end of
each reporting
period, with
any fair
value gains
or losses
recognized
in profit
or
loss to the extent
they are not part
of a designated hedging
relationship. The net gain
or loss recognized
in profit or loss
includes
any dividend
or interest
earned on
the financial
asset. Fair
value is
determined in
the manner
described in
Basis of
preparation
above.
Impairment of financial assets
The Company
recognizes
a loss
allowance
for
expected
credit
losses
on investments
in debt
instruments
that are
measured
at
amortized
cost
and account
receivables.
The amount
of expected
credit
loss
(ECL) is
updated
at
each reporting
date
to
reflect
changes
in credit
risk from
initial recognition
of the
respective
financial instrument.
The company
applies the
IFRS 9
simplified
approach
to
measuring
ECL’s
which
uses
a
lifetime
expected
loss
allowance
for
accounts
receivables.
The
ECL
on
accounts
receivable
is
estimated
using
a
provision
matrix
by
reference
to
past
default
experience,
general
economic
conditions
and
an
assessment
of
both
the
current
as
well
as
expected
conditions,
including
time
value
of
money
where
appropriate.
Individual
allowance and adjustments
to the collective allowance
are made based on
the individual assessment
of customers' situation
and
probability
of incoming
payments.
As the
Company´s
historical
credit
loss experience
does not
show significantly
different
loss
patterns for
different
customer segments,
the provision
for loss
allowance based
on past
due status
is not further
distinguished
between the Company´s different
geographical segments.
A financial asset is
credit-impaired when one
or more events,
that have a
detrimental impact on
the estimated future
cash flows
of that financial asset,
have occurred. Evidence
that a financial asset is credit-impaired
includes observable data about
significant
financial difficulty of the borrower.
An allowance for credit-impaired
financial assets is measured on an individual basis.
The Company
writes off a
financial asset
when there is
information indicating
that the debtor
is in severe
financial difficulty and
there is no realistic
prospect of recovery,
e.g. when the debtor has
been placed under liquidation
or has entered into
bankruptcy
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
95
proceedings.
Financial
assets
written
off
may
still
be
subject
to
enforcement
activities
under
the
Company’s
recovery
procedures, taking into
account legal advice where appropriate.
Any recoveries made are
recognized in profit or loss.
Derecognition of financial assets
The Company derecognizes
a financial asset
only when the
contractual rights
to the cash
flows from the
asset expire,
or when it
transfers the financial
asset and substantially all the risks
and rewards of ownership of the asset
to another entity.
On
derecognition
of
a
financial
asset,
the
difference
between
the
asset's
carrying
amount
and
the
sum
of
the
consideration
received and receivable is recognized
in profit or loss.
Financial liabilities
All financial liabilities are measured subsequently
at amortized cost using the effective
interest method or at FVTPL.
Financial liabilities are classified
as at FVTPL when the financial
liability is (i) contingent
consideration of
an acquirer in a business
combinations, (ii) held for trading
or (iii) it is designated as at FVTPL.
A financial liability is classified as held for trading
if:
-
it has been acquired principally for the purpose of repurchasing
it in the near term; or
-
on initial recognition
it is part of
a portfolio of
identified financial instruments
that the Company
manages together and
has a recent actual pattern of short
-term profit-taking; or
-
it
is
a
derivative,
except
for
a
derivative
that
is
a
financial
guarantee
contract
or
a
designated
and
effective
hedging
instrument.
Derecognition of financial liabilities
The
Company
derecognizes
financial
liabilities
when,
and
only
when,
the
Company’s
obligations
are
discharged,
cancelled
or
have expired.
The difference
between the carrying
amount of the
financial liability derecognized
and the consideration
paid and
payable is
recognized in
profit or
loss. When the
Company exchanges
with the existing
lender one debt
instrument into
another
one with
the substantially
different terms,
such exchange
is accounted
for as
an extinguishment
of the
original financial
liability
and
the
recognition
of
a
new
financial
liability.
Similarly,
the
Company
accounts
for
substantial
modification
of
terms
of
an
existing
liability,
or
part
of it,
as
an
extinguishment
of the
original
financial
liability
and
the
recognition
of
a
new
liability.
It
is
assumed
that
the
terms
are
substantially
different
if
the
discounted
present
value
of
the
cash
flows
under
the
new
terms,
including any
fees paid
net of
any fees
received and
discounted
using the
original effective
rate,
is at
least 10
% different
from
the discounted
present value
of the
remaining cash
flows of
the original
financial liability.
If the
modification is
not substantial,
the difference between
the carrying amount of
the liability before
the modification and the
present value of
the cash flows
after
modification, should be recognized
in income statement as modification
gain or loss.
Employee benefits
Retirement benefit costs
Payments to defined
contribution retirement benefit
plans are recognized
as an expense when employees
have rendered service
entitling them to the contributions.
A liability is recognized
in respect of
wages and salaries,
annual leave and
sick leave in
the period the related
service is rendered
at the undiscounted amount of the benefits
expected to be paid in exchange
for that service.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
96
Derivative financial instruments
The Company
enters
into
derivative
financial instruments
to manage
its exposure
to currency
risk. Further
details of
derivative
financial instruments are disclosed in note
34.
Derivatives
are
initially
recognized
at
fair
value
at
the
date
a
derivative
contract
is
entered
into,
and
are
subsequently
remeasured
to their
fair value
at each
balance sheet
date. The
resulting
gain or
loss is
recognized
in profit
or loss
immediately
unless the derivative is designated
and effective as a hedging instrument,
in which event the timing of the recognition
in profit or
loss depends on
the nature
of the hedge
relationship. The Company
designates certain
derivatives as
either hedges of
cash flow
of recognized liabilities or hedges of net investments
in foreign operations.
A derivative
is
presented
as
a
non-current
asset
or
a
non-current
liability
if
the
remaining
maturity
of the
instrument
is
more
than
12 months
and it
is
not expected
to
be realized
or
settled
within
12
months.
Other derivatives
are
presented
as
current
assets or current liabilities.
Hedge accounting
The
Company
designates
certain
hedging
instruments,
which
include
derivatives
and
non-derivatives
in
respect
of
foreign
currency risk, as either cash flow hedges or hedges of net investment
in foreign operations.
At
the inception
of the
hedge relationship
the entity
documents the
relationship
between the
hedging instrument
and hedged
item, along with
its risk management
objectives and its
strategy for
undertaking various hedge
transactions. Furthermore,
at the
inception
of
the
hedge
and
on
an
ongoing
basis,
the
Company
documents
whether
the
hedging
instrument,
that
is
used
in
a
hedging relationship
,
is effective
in offsetting
changes in
fair values
or cash
flows of
the hedged
item attributable
to the
hedge
risk, which is when the hedging relationships meet all of the
following hedge effectiveness
requirements:
-
there is an economic relationship between
the hedged item and the hedging instrument;
-
the effect of credit risk does not dominate
the value changes that result from
that economic relationship; and
-
the hedge
ratio of
the hedging
relationship is
the same as
that resulting
from the
quantity of
the hedged
item that
the
Company
actually
hedges
and
the
quantity
of
the
hedging
instrument
that
the
Company
actually
uses
to
hedge
that
quantity of hedged item.
If
a
hedging
relationship
ceases
to
meet
the
hedge
effectiveness
requirement
relating
to
the
hedge
ratio,
but
the
risk
management objective
for that
designated hedging
relationship remains
the same,
the Company
adjusts the
hedge ratio
of the
hedging relationship (i.e., rebalances the hedge)
so that it meets the qualifying criteria again.
The
hedging
reserve
within
equity
represents
the
cumulative
portion
of
gains
and
losses
on
hedging
instruments
deemed
effective in cash
flow hedges. The cumulative
deferred gain
or loss on the hedging
instrument is reclassified
to profit or
loss only
when
the
hedged
transaction
affects
the
profit
or
loss,
or
is
included
as
a
basis
adjustment
to
the
non-financial
hedged
item,
consistent with the relevant
accounting policy.
Hedges of net investments in
foreign operations
Any
gain or
loss on
the hedging
instrument
relating
to the
effective
portion of
the hedge
is recognized
in equity
in the
foreign
currency translation reserve.
Gains and
losses deferred
in the
foreign
currency translation
reserve are
recognized
in profit
or loss
on disposal
of the
foreign
operation.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
97
Cash flow hedges
The
effective
portion
of
changes
in
the
fair
value
of
derivatives,
that
are
designated
and
qualify
as
cash
flow
hedges,
is
recognized
in other
comprehensive
income and
accumulated
under the
heading of
hedging reserve.
The gain
or loss
relating to
the ineffective portion is recognized
immediately in profit or loss.
Amounts
previously
recognized
in
Other
Comprehensive
Income and
accumulated
in
equity are
reclassified
to
profit
or
loss in
the periods
when the
hedged
item is
recognized
in profit
or loss,
in the
same line
of the
Income
Statement
as the
recognized
hedged
item.
However,
when
the
hedged
forecast
transaction
results
in
the
recognition
of
a
non-financial
asset
or
a
non-
financial
liability,
the
gains
and
losses,
previously
recognized
in
Other
Comprehensive
Income
and
accumulated
in
equity,
are
transferred from
equity and included in the initial measurement of the cost
of the non-financial asset or non-financial liability.
Hedge accounting is
discontinued when the
Company revokes
the hedging relationship,
when the hedging instrument
expires, is
sold,
terminated,
exercised,
or
when
it
no
longer
qualifies
for
hedge
accounting.
Any
gain
or
loss,
recognized
in
Other
Comprehensive
Income
and
accumulated
in
equity
at
that
time,
remains
in
equity
and
is
recognized
when
the
forecast
transaction is
ultimately recognized
in profit or
loss. When a
forecast transaction
is no longer
expected to
occur,
the gain
or loss
accumulated in equity is recognized
immediately in the Consolidated Income
Statement.
Government grants
Government grants
are not recognized
until there is
reasonable assurance
that the Company
will comply with the
set conditions
and
that
the grants
will be
received.
Government
grants
are
recognized
in
profit
or
loss
in
the periods
in
which
the Company
recognizes the related
expenses for which the grants
are intended to compensate.
Significant accounting judgments, estimates and assumptions
In
the
application
of
the
Company's
accounting
policies,
management
is
required
to
make
judgements,
estimates
and
assumptions about the carrying
amounts of assets and
liabilities that are not
readily apparent
from other sources.
The estimates
and
associated
assumptions
are
based
on
historical
experience
and
other
factors
that
are
considered
to
be
relevant.
Actual
results may differ from
these estimates.
The estimates
and underlying
assumptions are
reviewed on
an ongoing
basis. Revisions
to accounting
estimates are
recognized
in the period in which the estimate is revised. Revision
of accounting estimates can also
affect future periods.
Management has made significant accounting
estimates and judgements in respect
of the following areas:
Determining whether goodwill
is impaired requires
an estimation of the
value in use of
the cash-generating units
(CGU) to which
goodwill has
been allocated.
The value
in use calculation
requires the
entity to
estimate the
future cash
flows expected
to arise
from the
CGU and
a suitable
discount
rate
in order
to calculate
present value.
Details of
impairment calculations
are set
out in
note 13.
Acquisitions
as part
of business
combinations
results
in recognition
of goodwill
and various
assets
and liabilities.
The amounts
allocated
to
the
acquired
assets
and
liabilities
are
based
on
assumptions
and
estimates
about
their
fair
values.
Details
of
fair
value of assets and liabilities in business combinations
are set out in note 33.
In determining the
lease term on
initial recognition of
right of use
assets and lease
liabilities, management consider
all facts
and
circumstances
that
create
an
economic
incentive
to
exercise
and
extension
option.
Extension
options
are
only
included in
the
lease term if the
lease is reasonably
certain to be
extended. The lease
liability is initially
measured at the
present value
of future
lease payments,
discounted
by using
the rate
implicit in
the lease.
If this
rate
cannot be
readily determined,
the Company
uses
its
incremental
borrowing
rate.
To
determine
the
incremental
borrowing
rate,
the
Company
uses
a
build-up
approach
that
begins with a risk-free
interest rate.
The rate is then
adjusted for credit
risk for leases held
by the Company and
further modified
based on specific lease factors such
as term, country and currency.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
98
Warranty
provisions include expected
warranty costs
for products sold
with standard warranty
and are recognized
at the date of
sale of
the relevant
products,
at
management´s
best
estimate
of the
expenditure
required
to
settle
the Company's
obligation.
Management estimates
the related
provision for
future warranty
claims based
on historical
warranty
claim information,
as well
as recent information on parts
and labor costs.
Some of
the Company’s
assets
and liabilities
are
measured
at
fair
value
for
financial reporting
purposes.
In estimating
the fair
value of
assets
or liabilities,
the Company
uses market
-observable
data
to the
extent
it is
available.
Where such
inputs are
not
available,
the Company
uses valuation
models based
on observable
prices where
applicable else
non-observable
prices. Details
of fair value of financial assets and liabilities are
set out in note 34.
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
99
41.
Definitions of key ratios and terms
EBT
Earnings before interest
EBIT
Earnings before interest
and taxes
EBITDA
Earnings
before
interest,
taxes,
depreciation
and
amortization.
Financial
items
and
share
in
net
profit
or
loss
of
associated
companies are not included in the EBITDA measurement
EBITDA before special items
Management
monitors
the
performance
measure
EBITDA
before
special
items,
at
a
consolidated
level
and
considers
the
measure
relevant
to
an
understanding
of
the
Company's
financial
performance
as
it
facilitates
a
better
comparison
of
the
Consolidated
Income Statement
between periods.
Special items
comprise
material
amounts
of a
non-recurring
nature,
such as
costs relating to divestments,
closure or restructuring, lawsuits,
etc.
Aggregate EBITDA of Guarantors
Aggregate EBITDA of Guarantors
is the combined EBITDA of the Company´s Guarantors
as defined in loan agreements.
Aggregate gross assets of Guarantors
Aggregate
gross
assets
of
the
Guarantors
is
the
combined
gross
assets
of
the
Company´s
Guarantors
as
defined
in
loan
agreements
.
Gross profit margin
Gross profit as a percentage
of net sales
EBITDA margin
EBITDA as a percentage of revenues
EBIT margin
EBIT as a percentage of revenues
Free cash flow
Cash generated from operati
ng activities less capital expenditure
Equity ratio
Equity as a percentage of total
assets
Net interest-bearing debt (NIBD) to
EBITDA before special items
Aggregated interest
bearing debt, consisting
of borrowings and
lease liabilities, less cash
and cash equivalents
divided by EBITDA
before special items
Return on equity
Net profit as a percentage of
average equity
Capex to net sales
The amount of purchased fixed and
intangible assets to net sales
Market value of equity
Notes to the Consolidated Financial Statements
Embla Medical hf. Consolidated Financial Statements
2025
100
Value of the Company's
equity, measured
by multiplying the current stock price by
the total number of outstanding shares
Sales growth
The change in revenue compared
to prior period
Basic Earnings per share
Net
profit
attributable
to
the
parent
Company's
shareholders,
divided
by
the
parent
Company’s
average
number
of
shares
outstanding for the period
Diluted Earnings per share
Net
profit
attributable
to
the
parent
Company's
shareholders,
divided
by
the
parent
Company’s
average
number
of
shares
outstanding for the period adjusted
for effects of outstanding
share option contracts.