Medacta : 2024 Financial Report

About this update from Medacta Group Sa

Financial Report Medacta's 360° Cervical Platform INDEX 1. CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 126 2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 127 3. CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 128 4. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 129 5. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 130 6. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 131 7. AUDIT REPORT - CONSOLIDATED FINANCIAL STATEMENTS 179 8. STATUTORY FINANCIAL STATEMENTS MEDACTA GROUP SA 188 9. AUDIT REPORT - MEDACTA GROUP SA FINANCIAL STATEMENTS 194 SUSTAINABLE INNOVATION Our ideation and passion drive us continuously to improve our Products, Processes and Technologies in a sustainable way. TRUST AND EFFICIENT PATIENT AND SUSTAINABLE TEAMWORK INTEGRITY EXECUTION CUSTOMER FOCUSED INNOVATION 1. Consolidated Statement of Profit or Loss for the years ended December 31, 2024 and 2023 (Thousand Euro) Notes 31.12.2024 31.12.2023 Revenues 6.24.1 590'580 510'778 Cost of Sales (191'141) (162'931) GROSS PROFIT 399'439 347'847 Research and Development expenses 6.24.2 (21'392) (20'318) Sales and Marketing expenses (210'549) (186'671) General and Administrative expenses 6.24.2 (77'246) (67'332) Other income 6.24.3 2'635 2'150 Other expenses 6.24.3 (2'055) (1'233) OPERATING PROFIT (EBIT) 90'832 74'443 Financial income 6.24.4 17'322 7'916 Financial costs 6.24.4 (20'385) (23'633) PROFIT BEFORE TAXES 87'769 58'726 Income taxes 6.11 (14'883) (11'364) PROFIT FOR THE YEAR 72'886 47'362 ATTRIBUTABLE TO Shareholders of the parent company 6.27 72'886 47'362 BASIC EARNINGS PER SHARE 6.27 3.66 2.37 DILUTED EARNINGS PER SHARE 6.27 3.65 2.37 The Notes are an integral part of the Consolidated Financial Statements 2. Consolidated Statement of Comprehensive Income for the years ended December 31, 2024 and 2023 (Thousand Euro) Notes 31.12.2024 31.12.2023 PROFIT FOR THE YEAR 72'886 47'362 OTHER COMPREHENSIVE INCOME Remeasurements of defined benefit obligations 6.19 (4'725) (2'148) Tax effect on remeasurements of defined benefit obligations 656 372 TOTAL ITEMS NOT TO BE RECLASSIFIED TO PROFIT OR LOSS (4'069) (1'776) IN SUBSEQUENT PERIODS Currency translation differences (7'124) 22'382 TOTAL ITEMS TO BE RECLASSIFIED TO PROFIT OR LOSS (7'124) 22'382 IN SUBSEQUENT PERIODS OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX (11'193) 20'606 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 61'693 67'968 ATTRIBUTABLE TO Shareholders of the parent company 61'693 67'968 The Notes are an integral part of the Consolidated Financial Statements 3. Consolidated Statement of Financial Position for the years ended December 31, 2024 and 2023 ASSETS (Thousand Euro) Notes 31.12.2024 31.12.2023 P A r S o S p E e T rt S y, plant and equipment 6.7 262'617 222'942 R (T ig h h o t u -o sa f- n u d se Eu as ro s ) ets No 6 te .8 s 31.12 5 . 4 2 '8 0 8 2 7 4 31.12 4 . 4 2 '3 0 9 2 7 3 I P n r t o a p n e g r i t b y l , e p a la s n s t e a ts nd equipment 6.9 7 2 5 6 3 2'6 2 1 5 7 2 5 2 1 2' 4 9 1 4 7 2 N Ri o g n h - t c -o u f r - r u e s n e t f a in s a s n et c s ial assets 6. 6 1 . 0 8 54' 9 8 9 8 5 7 44' 7 3 1 9 2 7 D In e ta fe n r g re ib d le ta a x s a se s t s s ets 6. 6 1 . 1 9 2 5 4 3 '67 2 6 5 2 5 7 1 '9 4 3 1 6 7 T N O on T - A c L ur N re O n N t - f C in U a R nc R i E a N la T ss A e S t S s ETS 6.10 396'8 9 0 9 0 5 347'4 7 0 1 4 2 I D n e v fe n rr to ed rie t s ax assets 6.12 1 23 2 4'4 6 1 7 1 6 21 2 3 7 '92 3 4 6 T r O a T d A e L re N c O ei N va -C b U le R s RENT ASSETS 6.13 3 1 9 0 6 8'1 8 6 0 7 0 34 94 7' 6 4 5 0 1 4 C In u v r e r n e t n o t r f ie in s ancial assets 6.10 2 234' 6 4 9 1 2 1 21 7 3 ' ' 0 9 5 2 1 4 O Tr t a h d e e r c re u c rr e e i n va t b a l s e sets and prepaid expenses 6.14 3 1 1 0 6 8' 5 1 1 6 9 7 1 9 2 4 '0 6 4 5 9 1 Ca u s rr h en a t n f d in c a a n s c h ia e l q a u s i s v e a t le s nts 6.15 0 31 4 '5 6 8 9 8 2 20 7 '7 0 9 5 2 1 T O O th T e A r L cu C r U re R n R t E a N ss T e A ts S a S n E d T p S repaid expenses 6.14 39 1 5 6 ' ' 3 5 7 1 7 9 34 1 8 2 ' ' 4 0 6 4 7 9 T C O as T h A a L n A d S c S a E s T h S equivalents 6.15 79 3 2 1 ' ' 1 5 7 8 7 8 69 2 5 0 ' ' 8 7 7 9 1 2 TOTAL CURRENT ASSETS 395'377 348'467 TOTAL ASSETS 792'177 695'871 LIABILITIES AND EQUITY (Thousand Euro) Notes 31.12.2024 31.12.2023 S LI h A a B re IL c IT a I p E i S ta A l ND EQUITY 6.16 1'775 1'775 C (T a h p o it u a s l a c n o d nt E ri u b r u o t ) ion reserve N 6 o . t 1 e 6 s 31.12. 4 2 '8 0 9 24 31.12 1 . 0 2 '4 0 9 2 1 3 R Sh e a ta r i e n c e a d p e it a a r l nings and other reserves 6.16 346 1 '0 7 73 5 282 1 '3 7 1 7 6 5 T C r a e p a it s a u l r c y o s n h t a ri r b e u s tion reserve 6.16 (9 4 '4 ' 8 9 0 4 ) ( 1 8 0 '0 '4 7 9 0 1 ) F R o e r t e a ig n n ed cu e r a r r e n n in c g y s tr and sla o ti h o e n r reserve s 6.16 3 3 46' 4 0 0 7 2 3 2 4 8 3 2 ' ' 5 3 2 16 T O re T a A su L r E y Q s U ha IT re Y s 6.16 37 (9'4 '6 8 6 0 4 ) 33 (8 0 '0 '0 7 3 0 8 ) N For n e - i c g u n rr c e u n r t re f n in c a y n t c r i an l s li la b tio lit n ie r s eserve 6.17 6 14 3 3 6 '3 4 5 0 9 2 11 4 6 3 '0 5 8 2 7 6 N TO on T - A c L ur E re Q n U t I l T e Y ase liabilities 6.17 37 3 9' 3 66 2 4 33 2 0' 1 03 9 8 Non-current p fi r n o a v n is ci o a n l l s iabilities 6.18 7 14 4 3' 0 35 7 9 11 3 6 ' ' 9 0 4 8 2 7 E N m on p - l c o u y r e ren b t e l n e e a f s it e o li b a l b ig il a it t ie io s n 6.19 7 1 3 7 9 '5 3 7 6 4 2 1 3 2'5 1 8 3 0 9 D N e o f n e - r c r u e r d re ta n x t p li r a o b v il i i s tie o s ns 6.11 8 49 4 '01 5 7 48 3 '6 9 9 4 9 2 O Em th p e l r o n y o e n e - b cu en rre f n i t o li b a l b ig il a it t ie io s n 6.2 1 1 9 1 1 7'5 9 7 7 4 12' 9 5 6 8 5 0 T D O ef T e A rr L ed N t O a N x - l C ia U b R ili R tie E s NT LIABILITIES 6.11 25 4 4 9 ' ' 9 0 6 1 6 7 21 4 6 8 ' ' 4 6 1 9 2 9 T O r t a h d e e r n p o a n y - a c b u l r e r s ent liabilities 6.22 1 35 1 '3 5 8 9 7 38 2 '8 9 5 6 1 5 C TO ur T re A n L t N fin O a N n - c C ia U l R li R a E b N ilit T ie L s IABILITIES 6.17 254 0 ' 8 9 2 6 5 6 21 4 6' 9 4 2 1 4 2 C Tr u a r d ren p t a le y as b e le l s iabilities 6.1 2 7 2 1 3 0 5 '32 8 7 38' 6 8 1 5 3 1 Current p fi r n o a v n is ci o a n l l s iabilities 6.18 7 50' 1 82 0 5 46' 1 92 0 4 A C c u c r r e u n e t d l e a x s pen li s a e b s ili a ti n es d deferred income 6.2 1 3 7 4 1 3 0 '9 3 4 2 8 7 40 8 '1 6 6 1 1 3 O Cu th rr e e r n c t u p rre o n vi t s li o a n b s ilities 6.2 1 1 8 16'9 1 4 2 0 14'7 1 5 2 2 0 T A O cc T r A ue L d C e U x R p R e E n N se T s L a I n A d B d IL e I f T e I r E r S ed income 6.23 15 4 7 3 ' ' 5 9 47 8 149 0 ' ' 4 1 2 6 1 O TO th T e A r L cu L r I r A e B nt IL li I a T b IE ili S ties 6.21 412 6 ' ' 5 9 1 4 3 0 36 1 5 4 ' ' 8 7 3 5 3 2 TOTAL C LI U A R B R IL E I N TI T ES LI A B N I D LI E T Q IE U S ITY 7 1 9 5 2 7 '1 5 7 4 7 6 1 9 4 5 9 ' ' 8 4 7 2 1 TOTAL LIABILITIES 412'513 365'833 TOTAL LIABILITIES AND EQUITY 792'177 695'871 The Notes are an integral part of the Consolidated Financial Statements 4. Consolidated Statement of Changes in Equity for the years ended December 31, 2024 and 2023 Attributable to shareholders of Medacta Group SA (Thousand Euro) Foreign BALANCE JANUARY 1, 2024 Profit for the year Remeasurements of defined benefit obligations Tax effect on remeasurements of defined benefit obligations Currency translation differences TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - 68'817 Dividends paid Purchase of treasury shares Usage of treasury shares Share-based payment transactions BALANCE DECEMBER 31, 2024 (Thousand Euro) BALANCE JANUARY 1, 2023 Profit for the year Remeasurements of defined benefit obligations Tax effect on remeasurements of defined benefit obligations Currency translation differences TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - 45'586 Purchase of treasury shares Usage of treasury shares Share-based payment transactions BALANCE DECEMBER 31, 2023 Dividends paid currency Treasury translation shares reserve Total equity (8'070) 43'526 330'038 - - 72'886 - - (4'725) - - 656 - (7'124) (7'124) - (7'124) 61'693 - - (11'194) (4'788) - (4'788) 3'378 - - - - 3'915 (9'480) 36'402 379'664 Attributable to shareholders of Medacta Group SA Foreign currency Treasury translation shares reserve Total equity (4'159) 21'144 274'655 - - 47'362 - - (2'148) - - 372 - 22'382 22'382 - 22'382 67'968 - - (11'054) (3'911) - (3'911) - - - - - 2'380 (8'070) 43'526 330'038 Capital Contribution Retained earnings and Capital Contribution Retained earnings and 5. Consolidated Statement of Cash Flows for the years ended December 31, 2024 and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otes to the Consolidated Financial Statements for the years ended December 31, 2024 and 2023 General information Medacta Group SA (referred to hereafter as the "Company" or together with its subsidiaries the "Group") has been registered in the Commercial Register of the Canton Ticino since November 30, 2018 and is a limited company incorporated and domiciled in Canton Ticino. The registered office is Strada Regina 34, 6874 Castel San Pietro, Ticino, Switzerland. The Company shares are publicly traded and listed on the SIX Swiss Exchange in Zurich. The Group operates globally to develop, manufacture and distribute orthopedic and neurosurgical medical devices. The Group was founded in 1999 with a vision of redefining better through innovation for people needing joint replacement and spine surgery. The Group has a Financial Year ending December 31. Statement of compliance The Consolidated Financial Statements as of December 31, 2024 have been prepared in accordance with the International Financial Reporting Standards (hereinafter also "IFRS") as issued by the International Accounting Standards Board (IASB). The principles and standards utilised in preparing these Consolidated Financial Statements have been consistently applied through all periods presented, with the exception of the new standards and interpretations that are effective for reporting periods beginning on and after January 1, 2025, as disclosed in Note 6.3 "New accounting and International Financial Reporting Standards". These Consolidated Financial Statements are composed of a Consolidated Statement of Profit or Loss, a Consolidated Statement of Comprehensive Income, a Consolidated Statement of Financial Position, a Consolidated Statement of Changes in Equity, a Consolidated Statement of Cash Flows and the related Notes to the Consolidated Financial Statements. In the Consolidated Profit or Loss, the Group presents operational expenses by function. The Group presents current and non-current assets and current and non-current liabilities as separate classifications in its Consolidated Statement of Financial Position. This presentation of the Consolidated Statement of Profit or Loss and of the Consolidated Statement of Financial Position is believed to provide the most relevant information. The Consolidated Statement of Cash Flows from operating activities was prepared and presented utilising the indirect method and cash flows from investing and financing activities were prepared and presented utilising the direct method. The Consolidated Statement of Cash Flows includes actual inflows and outflows of cash and cash equivalents only; accordingly, it excludes all transactions that do not directly affect cash receipts and payments. The reason for excluding non-cash transactions in the Statement of Cash Flows and placing them within disclosures keeps the statement's primary focus on cash flows from operating, investing, and financing activities in the original state so that users of financial statements can fully understand the importance of what this financial statement does. An example of non-cash transactions, as mentioned in IAS 7, is the acquisition of assets by assuming directly related liabilities or by means of a lease. Basis of measurement The Consolidated Financial Statements have been prepared using the historical cost convention, with the exception of certain financial assets and liabilities for which measurement at fair value is required (see Note 6.5 "Fair value measurement and classification"). The Consolidated Financial Statements have been prepared on a going concern basis. The Directors believe that there are no financial or other indicators presenting material uncertainties that may cast significant doubt upon the Group's ability to meet its obligations in the foreseeable future and in particular in the next 12 months (see also considerations reported in Note 6.1 "Significant events and transactions", paragraph "Macroeconomic environment"). Presentation currency Items included in the financial statement of each entity of the Group are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The Group's presentation currency is Euro, while the functional currency of the Parent Company is Swiss Franc. All values are rounded to the nearest thousand except where otherwise indicated. Use of estimates and judgements The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates and assumptions which influence the value of assets and liabilities in the Consolidated Statement of Financial Position and recognition of revenue and expenses in the Consolidated Statement of Profit or Loss, and the disclosures included in the Notes of the Consolidated Financial Statements. The most significant accounting principles which require a higher degree of judgement from management are described below: • Leases - Due to the application of IFRS 16, judgement is required to determine the lease term. Management considers all circumstances and facts that create an economic incentive to exercise an extension or termination option. The assessment is reviewed if a significant event or a significant change in circumstances impact the initial evaluation. • Development costs - Applying IAS 38, the Group recognises an internally-generated intangible asset arising from development only if all the conditions specified in the standard have been demonstrated (refer to Note 6.2 "Consolidation principles, composition of the Group and significant accounting policies", paragraph "Significant accounting policies"). Management uses its judgement, based on facts and circumstances of each development project, to assess whether the conditions of IAS 38 par. 57 have been met. Estimates are based on historical experience and other factors. The resulting accounting estimates could differ from the related actual results. Estimates are periodically reviewed, and the effects of each change are reflected in the Consolidated Financial Statements in the year in which the change occurs. The key sources of estimation uncertainty are the following: • Impairment test for intangible assets - The Group owns intangible assets mainly represented by internal capitalised development costs, trademarks and customer lists acquired through business combination. Capitalised development costs are reviewed on a regular basis and the Group determines annually, in accordance with the accounting policy, whether any of the assets should be tested for impairment. In-process development capitalised costs are tested for impairment at least annually. For the impairment tests, estimates are made on the expected future cash flows from the use of the asset or cash-generating unit. The actual cash flows could vary significantly from these estimates. A sensitivity analysis was performed to review the impact of reasonably possible changes in key assumptions (see Note 6.9 "Intangible assets", paragraph "Impairment test for intangible assets"). • Deferred tax assets - The consolidated balance sheet includes deferred tax assets related to deductible differences and, in certain cases, tax losses carried forward, provided that their utilisation has been determined to be probable. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods. Estimates of future taxable income are subject to change due to both markets and government related uncertainties, as well as Medacta's own future decisions. • Valuation of inventories - The orthopedic market, in which the Group operates, typically requires a high level of inventories, some of which are located at customer premises and are available for immediate use, including large and small sizes that are used less frequently than standard sizes and may generate excess inventory towards the end of the product life cycle. Inventories are periodically assessed and written down if their net realisable value is less than their carrying amount, including adjustments to reflect the situation described above. Write-downs for obsolescence or slow moving are calculated based on management's assumptions and judgements derived from experience and historical results. As of December 31, 2024, management has not changed the key assumptions underlying the calculation methodology. The provision for slow moving, discontinued and obsolete inventory is not considered to have a range of potential outcomes that is significantly different to the write-downs to net realisable value recognised in "Cost of Sales" as of December 31, 2024 (see Note 6.12 "Inventories"). The provision has a high degree of estimation uncertainty, depending on the range of products and sizes, on new customers acquisitions and on the achievement of target sales and procurement needs. • Pension plans - The Group participates in pension plans in various countries. The present value of pension liabilities is determined using actuarial techniques and certain assumptions. These assumptions include the discount rate, the expected return on plan assets, the rates of future compensation increase, and rates related to mortality and resignations. Any change in the above-mentioned assumptions could result in significant effects on the employee benefit liabilities. The sensitivity analysis related to the changes in the assumptions is reported in Note 6.19 "Employee benefit obligation".

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