Annual report
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ANNUAL REPORT 2025
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OVERVIEW Embla Medical in Brief 3 Letter From the CEO 5 2025 Highlights 6 Business Segments 9 STRATEGY Business Model 11 Growth’27 Strategy 14 MARKETS Markets and Trends 18 Streifeneder ortho.production 22 Leading the Future of Patient Care 23 Growth Markets 24 INNOVATION Advancing Mobility Through Innovation 26 Strong Intellectual Property Portfolio 27 PERFORMANCE Five-Year Overview 29 Performance in 2025 30 Guidance for 2026 33 GOVERNANCE Shareholder Information 34 Corporate Governance 38 Risk Management 43 Taxation 46 Board of Directors 47 Executive Management 49 Annual Report 2025 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
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Embla Medical - 2025 Annual Report | 3OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS 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. OVERVIEW Helping people live a Life Without Limitations® is why we exist as a company.
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Vision Enable Life Without Limitations Mission We Improve People’s Mobility Goal Serve More People for Profitable Growth Embla Medical - 2025 Annual Report | 4OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS OUR VALUES 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 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. 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.
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Embla Medical - 2025 Annual Report | 5OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS 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 Letter from the CEO OVERVIEW
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Embla Medical - 2025 Annual Report | 6OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS 2025 Highlights OVERVIEW Conal Harte appointed as the Executive Vice President of Patient Care André Rocha appointed as the new Executive Vice President of R&D Fior & Gentz awarded a new reimbursement code in the US for the “NEURO HiTRONIC MPKAFO” (bionic knee joint) Embla Medical acquires majority share in Streifeneder ortho.production, a manufacturer of prosthetics, orthotics, materials and workshop supplies Embla Medical Expands Support for Ukrainian Amputees with New Kyiv Clinic and Iceland Partnership Patient Care facilities in Denmark, Finland, Iceland, Norway, Sweden and the Netherlands re-branded to ForMotion Launch of Odyssey® iQ by College Park Full launch of new bionic knees - Icon® by College Park and Navii® by Össur Continued re-brand of Patient Care facilities to ForMotion in Australia and the US Q1 Q2 Q3 Q4
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Embla Medical - 2025 Annual Report | 7OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS 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
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2025 Financial Highlights 2025 Sustainability Highlights 929m 49% : 51%-13% 7.9 of 10 4.0 +6% 20%+7% Highest Ever Sales Recorded (USD) Gender Ratio Female : Male Emissions Intensity 2024/2025 Market Based Emissions (tCO2e/mUSD) Employee Engagement Index Employee Incident Rate Total Recordable Incident Rate (TRIR) per 500 FTEs Organic Sales Growth EBITDA MarginLocal Currency Growth (including acquisitions) Embla Medical - 2025 Annual Report | 8OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS
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Embla Medical - 2025 Annual Report | 9OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS 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. OVERVIEW 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 2025 Revenue USD 929m Organic Growth +6% Patient Care Global network of leading O&P clinics operated under ForMotion brand Bracing & Supports Broad offering of Össur mobility solutions for acute injuries and osteoarthritis 16% Bracing & Supports Neuro Orthotics Premium knee and ankle neuro orthotic joints marketed under Fior & Gentz Prosthetics Lower and upper limb prosthetic devices marketed under the Össur and College Park brands 51% Prosthetics & Neuro Orthotics 33% Patient Care Clinics Chronic m obility Acute
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Embla Medical - 2025 Annual Report | 10OVERVIEW STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTS 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. 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. 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. 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 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 Our Geographical Segments With operations in over 40 countries, Embla Medical’s industry-leading brands have global operations in three regions: Americas APAC USD 399 million Organic growth: 2% FTEs: ~1,400 USD 73 million Organic growth: 11% FTEs: ~200 EMEA of total salesof total sales of total sales USD 457 million Organic growth: 8% FTEs: ~1,900 HQ FTEs: ~700 2025 Regional Overview 43% 49% 8%
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Patients Patient-centric business model Manufacturing Off-the-shelf and customized solutions Innovation New product introductions every year Patient Care Own O&P clinics and independent providers Prescribers and Payers Over 90% of products and services reimbursed Sales and Marketing Mainly direct sales but also distribution Embla Medical - 2025 Annual Report | 11STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. STRATEGY
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Thousands 1 200 900 600 300 0 2000 2010 2020 2030 1% >3% New major lower limb amputations New amputees fitted with a prosthesis Source: Embla Medical Management estimates Source: Embla Medical Management estimates 30-40% of new amputees are fitted with prosthetic solutions > 30,000 New major upper limb amputees per year > 850,000 New major lower limb amputees per year 65-70 is the average age of the amputee population 70% Vascular related diseases 20% Trauma 10% Other Causes for Lower Limb Amputations Causes for Upper Limb Amputations 70% Trauma 30% Other Embla Medical - 2025 Annual Report | 12STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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. Prosthetic Patients Growing Number of Amputees Receiving Prosthetics
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Tijuana (MX) Olympia (WA, US) Reykjavik (IS) China Warren (MI, US) Newburgh (NY, US) Orlando (FL, US) Livingston (SC) Lüneburg (DE) Celle (DE) Emmering (DE) Embla Medical - 2025 Annual Report | 13STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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. Manufacturing Locations
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Embla Medical - 2025 Annual Report | 14STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. STRATEGY 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. 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. We connect directly with patients and reach out to payers and prescribers. We embrace innovation in all our actions. We provide innovative and patient-centric solutions combining product and service. Patient Reach Innovative Solutions We offer business solutions to our customers, including Orthotic & Prosthetic (O&P) clinics enabling seamless service and close partnership. O&P Value Creation
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Prosthetics Neuro Orthotics Bracing & Supports Patient Care in O&P Clinics Chronic mobility impaired people Other Channels Acutely injured people Embla Medical - 2025 Annual Report | 15STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 1) 2) 3) Market Expansion Portfolio Expansion Technology Enabled by People, Sustainability & Scalability Ambition to gradually increase the EBITDA margin* O&P Growth Drivers Continuity Bracing Simplified O&P Value Creation Innovative Solutions Patient Reach Growth Initiatives M&A Strategy Sales Growth EBITDA LCY growth p.a. on average Organic growth p.a. on average Acquisitive growth p.a. on average 7-10% = 5-7% + 2-3% Transitioning from being a product company to an increasingly patient-centric organization Our Growth’27 Strategy *Subject to potential M&A and special items
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Certified Prosthetists and Orthotists (CPOs) Payers Referrals Patients Increase fitting rates for amputees (up from 1/3) Increase Bionic Penetration among low active Drive functional trade-up; ensure users receive best possible solution Grow Emerging markets through better access Embla Medical - 2025 Annual Report | 16STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Identity Be the trusted partner for our customers Customer Convenience Reduce complexity for our partners Product Confidence Provide our partners with a simplified and strong portfolio Responsibility Reduce our footprint and that of our partners Market Access Technology Portfolio Expansion Local currency growth p.a. on average Organic growth p.a. on average Acquisitive growth p.a. on average 7-10% = 5-7% + 2-3% Embla Medical - 2025 Annual Report | 17STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. Financial Ambition Sales Growth 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. 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.
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Embla Medical - 2025 Annual Report | 18STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. Markets and Trends MARKETS Americas EMEA APAC Market size Market share Market growth Embla Medical Other 6-8% Source: Embla Medical Management estimates Note: Estimates only account for component sales from providers to suppliers, i.e. not clinical services USD ~2bn ~ 25% Prosthetics Product Market
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Americas EMEA APAC Market size Market share Market growth Embla Medical Other 10-12% USD ~0.5 bn ~6% Source: Embla Medical Management estimates Note: Estimates only account for component sales from providers to suppliers, i.e. not clinical services Neuro Orthotics Product Market Market size Market share Market growth Embla Medical Other 2-3% USD ~3bn ~5% Source: Embla Medical Management estimates Note: Estimates only account for component sales from providers to suppliers, i.e. not clinical services Americas EMEA APAC Bracing & Supports Product Market Embla Medical - 2025 Annual Report | 19STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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.
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Americas EMEA APAC Market size Market share Market growth Embla Medical Other 3-5% USD ~15 bn ~2% Source: Embla Medical Management estimates Patient Care Market Embla Medical - 2025 Annual Report | 20STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 21STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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: 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. Prescribers Healthcare professionals who prescribe products based on the condition and clinical indication of the patient. Providers Healthcare professionals, such as CPO’s, doctors, and other clinical specialists who provide patients with products. Payers Public and private insurance companies. Around 90% of Embla Medical sales are reimbursed by a third party. Influencers Healthcare systems, insurance companies, medical associations, patients and their families. 1 2 3 4 5 ■ Individuals are taking greater control of their healthcare decisions, pushing for solutions that meet their needs. ■ Patients are more willing to switch providers if dissatisfied, often using online resources to find alternatives. ■ Increased demand for transparency to support informed care decisions. Healthcare consumerism empowering patients ■ Global economic growth is increasingly driven by emerging markets. ■ Disposable income and willingness to pay out-of-pocket are rising in these regions. ■ Increasing healthcare coverage in emerging markets. Access to healthcare improving in emerging markets ■ New innovative technologies being accepted for reimbursement. ■ Expanded healthcare coverage is improving access and increasing patient fitting rates. ■ Increased acknowledgment of the total health economic benefits of high-end solutions. Improved treatment options and penetration of high-end solutions ■ The global population aged 65 and older is increasing, as is the amputee population. ■ A growing number of people affected by vascular disease, the leading cause of amputation. ■ Incidences of fractures, joint instability, and joint disorders are rising. An aging and more active population ■ Digitalization is transforming communication between patients and healthcare providers, as well as between businesses. ■ Increased automation through digital processes in order flow and manufacturing. ■ Data driven insights enable more timely and improved service delivery to patients. Digitalization increasing ease of doing business ■ Healthcare systems efforts to manage cost, increasing need for innovation and health economic benefits. ■ Consolidation in the Patient Care services market. ■ Growing demand for cost-effective solutions without compromising quality. Healthcare consolidation and budget management
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Source: Embla Medical company data Embla Medical - 2025 Annual Report | 22STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 Streifeneder ortho.production MARKETS Prosthetics Materials Orthotics/Equipment Regional split Sales split Germany International Lower Limb Prosthetics Materials & Equipment
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Embla Medical - 2025 Annual Report | 23STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW INTERVIEW WITH Conal Harte Executive Vice President, Patient Care 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, 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. 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. Leading the Future of Patient Care MARKETS
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Embla Medical - 2025 Annual Report | 24STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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 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 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 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. INTERVIEW WITH Gudjon G. Karason President Growth Region Growth Markets MARKETS
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USD ~500m (2025)1 2022 2023 2024 2025 *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 *Russia not included Emerging Markets ~25m amputees (+650k new every year) Developed Markets ~5m amputees (+200k new every year) Embla Medical - 2025 Annual Report | 25STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Growth Rates in Emerging MarketsOverview of the Emerging Markets Addressable Market in Emerging Markets Embla Medical growing at ~21% CAGR ‘22-25 in Emerging Markets Market Growth in Emerging Markets*: 10-12% annual growth1 Global Market Growth: 6-8% annual growth1 Emerging Markets at Glance Embla Medical Others 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.
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Embla Medical - 2025 Annual Report | 26STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW INTERVIEW WITH Advancing Mobility Through Innovation INNOVATION André Rocha Executive Vice President of Research & Development 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®. 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. 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? 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. Q4: Bionics have been quite transformative for many users. What do you see as the next major 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.
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Embla Medical - 2025 Annual Report | 27STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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 by far the largest patent holder in Iceland. Navii® by Össur Icon® by College Park Odyssey® iQ by College Park Pro-Flex® LP Junior by Össur AeroFit® by Össur Power KneeTM by Össur 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 StudioTM 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. 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. Strong Intellectual Property Portfolio Patient-Driven Innovation INNOVATION Product Launches during 2025
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Embla Medical - 2025 Annual Report | 28STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. Juliet Björnsson Former Global Product Manager, Navii (now with ForMotion) INTERVIEW WITH Helgi Tómas Hall VP Global Prosthetics Lower Limb, Embla Medical 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.
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Embla Medical - 2025 Annual Report | 29STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Five-Year Overview PERFORMANCE 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 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 2,035 2,724 Number of shares in millions 430 428 421 423 423 EPS in US cents 19.6 16.2 14.0 10.3 15.6 Diluted EPS in US cents 19.6 16.2 14.0 10.3 15.5 Definitions of key ratios and terms can be found on page 138 in the notes to the Consolidated Financial Statements.
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Embla Medical - 2025 Annual Report | 30STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. PERFORMANCE
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Embla Medical - 2025 Annual Report | 31STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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% 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% Sales by Geographical Segment Sales by Business Segment 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. USD MILLION 2025 2024 GUIDANCE 2026 Sales growth, organic 6% 6% 5-8% EBITDA margin before special items 20% 20% 20-22%* Financial Guidance for 2026 *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.
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51% Prosthetics & Neuro Orthotics 16% Bracing & Supports 33% Patient Care USD 929 million Embla Medical - 2025 Annual Report | 32STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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.
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Embla Medical - 2025 Annual Report | 33STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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% Guidance For 2026 PERFORMANCE
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Strategic Long-Term Investments William Demant Invest William Demant Foundation 20% 24%30% 20% 8% >10%44%55-60% 93%51% Grant Activities 100% Other Investments Embla Medical - 2025 Annual Report | 34STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Shareholder Information GOVERNANCE 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 Ownership Structure Market Nasdaq Copenhagen ISIN IS0000000040 Ticker EMBLA Industry Healthcare No. of Shares 430,441,257
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Country Distribution 59% Denmark 15% Iceland 12% Luxembourg 5% Sweden 9% Others Embla Medical - 2025 Annual Report | 35STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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. Major Shareholders The following shareholders have announced holdings above 5% to the company: Shareholders - Geographical Distribution Share Performance (Indexed) 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% 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 Embla Medical OMX C25 GI
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Embla Medical - 2025 Annual Report | 36STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Analyst coverage 2025/2026 Names and analyst details of the financial institutions that publish equity research reports on Embla Medical. 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. 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. 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 Since 2013, when Embla Medical started returning capital to shareholders, we have paid out total of USD 245 million.
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Embla Medical - 2025 Annual Report | 37STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Financial Calendar Contact Investor Relations and Corporate Communications Q1 2026 Annual General Meeting 10 March 2026 Interim Report Q1 28 April 2026 Q2 2026 Interim Report Q2 21 July 2026 Q3 2026 Interim Report Q3 20 October 2026 Q4 2026 Interim Report Q4 and Annual Report 2026 2 February 2027 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. Financial reports, announcements, presentations, the financial calendar, upcoming events, share information, and other information can be found on the company’s website. Klaus Sindahl Head of Investor Relations Edda H. Geirsdóttir VP Corporate Communications ksindahl@emblamedical.com +45 536 30134 egeirsdottir@emblamedical.com +354 664 1055 E M E M
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Embla Medical - 2025 Annual Report | 38STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Corporate Governance GOVERNANCE 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. 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.
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Embla Medical - 2025 Annual Report | 39STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 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. The Board of Directors’ Annual Schedule Quarter 1 February Meeting ■ Full-year results ■ Corporate Governance Statement ■ Capital Structure and Capital Allocation Policy ■ Agenda for the Annual General Meeting Annual General Meeting March Meeting ■ Election of Chair and Vice Chair ■ Appointment of the Audit Committee ■ Review of Internal Rules Quarter 2 April Meeting ■ Quarterly results Quarter 3 July Meeting ■ Half-year results September Meeting ■ Strategy Quarter 4 October Meeting ■ Quarterly results December Meeting ■ Strategy and forecast ■ Performance evaluation BOARD MEMBER INDEPENDENT NATIONALITY GENDER BOARD TENURE BOARD MEETINGS ATTENDED Niels Jacobsen, Chair No Danish Male 20 years Svafa Grönfeldt, Vice Chair No Icelandic Female 17 years Arne Boye Nielsen No Danish Male 16 years Alberto Esquenazi Yes American Male 5 years Tina Abild Olesen Yes Danish Female 2 years Caroline Vagner Rosenstand Yes Danish Female 2 years
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Embla Medical - 2025 Annual Report | 40STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 has various roles and responsibilities: ■ Ensure a competent and independent audit. ■ Submit proposals to the Board on the nomination of an auditor candidate at the Annual General Meeting. ■ Submit proposals to the Board on an agreement with the Auditor, containing e.g. provisions on the audit fees as well as the general scope of the Auditor’s non-audit services. ■ Monitor and evaluate the Auditor’s work, including statutory audit of the financial statements and annual report, taking into consideration the results of the most recent quality control. ■ Report to the Board the results of the statutory audit and the sustainability reporting, including the financial and sustainability reporting process. ■ Monitor the progress made on sustainability targets and report the result to the Board. ■ Monitor and assess Embla Medical’s internal control systems and enterprise risk management systems and perform other related tasks and duties. ■ Monitor the financial and sustainability reporting process and make recommendations or proposals for securing integrity. This includes reporting to the Board on significant accounting policies, significant accounting estimates, related party transactions and uncertainties and risks, including in relation to the outlook, prior to the Board’s approval of financial statements. ■ Assess the need for an internal audit function taking into consideration the scale and complexity of Embla Medical’s activities, risk factors and cost / benefit considerations. ■ Monitor Embla Medical’s Speak-Up Line. ■ Monitor Embla Medical’s Tax Policy. The Audit Committee Meetings The Audit Committee’s Annual Schedule Quarter 1 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 Quarter 2 April Meeting ■ 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 Quarter 3 July Meeting ■ 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 Quarter 4 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 AUDIT COMMITEE MEMBER MEETINGS ATTENDED Arne Boye Nielsen, Chair Alberto Esquenazi Caroline Vagner Rosenstand
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Embla Medical - 2025 Annual Report | 41STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 42STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 43STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 Risk Management GOVERNANCE
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Embla Medical - 2025 Annual Report | 44STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 45STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 46STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. Taxation GOVERNANCE
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Embla Medical - 2025 Annual Report | 47STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Board of Directors GOVERNANCE 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.
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Embla Medical - 2025 Annual Report | 48STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Board of Directors GOVERNANCE 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. 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.
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Embla Medical - 2025 Annual Report | 49STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. Executive Management GOVERNANCE Lukas Märklin G. Arna Sveinsdóttir Ólafur Gylfason Conal Harte Margrét Lára Fridriksdóttir Sveinn Sölvason André Rocha Christian Robinson
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Embla Medical - 2025 Annual Report | 50STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 Executive Management GOVERNANCE 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
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Embla Medical - 2025 Annual Report | 51STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. Executive Management GOVERNANCE
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Embla Medical - 2025 Annual Report | 52STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 84 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
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Embla Medical - 2025 Annual Report | 53STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. Our Environment Responsible for our environmental impact Our People Our Business Responsible for enhancing the social well-being of our people & communities Responsible business leading with integrity and transparency We improve people’s mobility so they can live a Life Without Limitations® INTERVIEW WITH Responsible for Tomorrow ®
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Embla Medical - 2025 Annual Report | 54STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. SUSTAINABILITY STATEMENT
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Embla Medical - 2025 Annual Report | 55STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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). 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. Responsible for Tomorrow Program PROJECT EXECUTION PROGRAM MANAGEMENT Eco-Design Solutions Owner: R&D Supply Chain & Operational Efficiency Owner: Operations Product Environmental Compliance Owner: Quality and Regulatory ESG Awareness & Communications Owner: People, Strategy and Sustainability ESG Accounting and Reporting Owner: Finance / People, Strategy and Sustainability Circular Business Solutions Owner: Commercial 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. Program Steering Committee Program Owner
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Embla Medical - 2025 Annual Report | 56STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 57STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 58STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 59STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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
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Embla Medical - 2025 Annual Report | 60STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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
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Embla Medical - 2025 Annual Report | 61STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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)
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Double Materiality Assessment Outcome Financially Material Topics Non-material Topics Impact and Financially Material Topics Impact Material Topics SocialEnvironmental Governance Low Low High High 1 1 2 3 4 5 2 3 4 5 FINANCIAL MATERIALITY IMPACT MATERIALITY 1 25 8 15 10 7 12 1413 3 4 11 9 6 16 17 MATERIAL TOPIC IMPACT / RISK / OPPORTUNITY 1 Climate Change (E1) Negative Impact 2 Circular Economy (E5) Negative Impact & Financial Risk 3 Workers in the Value Chain (S2) Negative Impact 4 Health and Safety at Work (S1) Negative Impact 5 Substances of Concern (E2) Financial Risk 6 Product Quality (S4) Positive Impact 7 Business Ethics (G1) Financial Opportunity 8 Business Ethics (G1) Financial Risk 9 Employee Engagement, Retention and Attraction (S1) Negative Impact & Financial Risk 10 Data Privacy (S4) Financial Risk 11 Supplier Relations (G1) Financial Risk 12 Regulatory & Trade Environment (G1) Financial Risk 13 Climate Change (E1) Financial Opportunity 14 Circular Economy (E5) Financial Opportunity NON-MATERIAL TOPICS 15 Water and Marine Resources (E3) 16 Biodiversity and Ecosystems (E4) 17 Affected Communities (S3) Materiality: Increased Decreased Stayed the same Embla Medical - 2025 Annual Report | 62STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW
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Embla Medical - 2025 Annual Report | 63STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 64STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 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. *See the severity and likelihood scale on next page
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SEVERITY LIKELIHOOD Embla Medical - 2025 Annual Report | 65STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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. 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 5 high high high high high 4 medium high high high high 3 medium medium medium high high 2 low low medium medium medium 1 low low low low low 1 2 3 4 5
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Embla Medical - 2025 Annual Report | 66STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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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Embla Medical - 2025 Annual Report | 67STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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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Embla Medical - 2025 Annual Report | 68STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 | 69STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. SUSTAINABILITY STATEMENT 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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Sustainable Procurement Eco Design Circular Solutions Target 2030 Carbon Removals NET ZERO 2050 Transp. Distrib. 2021 + Exp. growth impact to 2030 90% of total emissions Transition Plan Road Map to Net Zero Value Chain Emissions, Purchased Goods and Transportation and Distribution (Selected Scope 3 Emissions) Source Green Electricity Shift to Electric Company Cars Energy Efficiency Carbon Removals NET ZERO 20502019 10% of total emissions Transition Plan Road Map to Net Zero Energy Transition (Scope 1 and 2 Emissions) Target 2030 Embla Medical - 2025 Annual Report | 70STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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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Embla Medical - 2025 Annual Report | 71STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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%). 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. 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 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.
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Embla Medical - 2025 Annual Report | 72STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 (tCO2e)* ** 7,760 2,460 2,700 1,600 800 Scope 1 (tCO2e)** 2,870 2,290 2,390 Scope 2 market based (tCO2e) 4,890 170 310 Scope 1 & 2 emissions % change (-/+) from base year 0% -68% -65% -79% -90% 2021 BASE YEAR 2025 2024 2030 TARGET 2050 TARGET Scope 3 emissions (tCO2e)* 77,930 78,440 82,450 58,400 7,800 Scope 3 emissions % change (-/+) from base year 0% 1% 6% -25% -90% *CO2-equivalent emissions (CO2, CH4, N2O) 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. *CO2-equivalent emissions (CO2, CH4, N2O) 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. 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. § 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 CO2-equivalent emissions (CO2, CH4, N2O) 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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Embla Medical - 2025 Annual Report | 73STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Energy Consumption and Mix (E1-5) 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 (MW h) 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 § 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. *2024 year figure restated. See accounting policies for details.
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Embla Medical - 2025 Annual Report | 74STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW GROSS SCOPES 1, 2, 3 GHG EMISSIONS 2025 2024 2025 / 2024 % Total Scope 1, 2, and 3 emissions (tCO2e) 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 (tCO2e/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 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 tCO2e, compared with 107,090 tCO2e 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 tCO2e per USD million of net revenue, improving from 125.3 tCO2e 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 % Scope 1 GHG emissions (tCO2e) 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 (tCO2e) 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 (tCO2e) Gross Scope 1 and 2 GHG emissions, market-based* 2,460 2,700 -9% Significant Scope 3 GHG emissions (tCO2e) Gross Scope 3 emissions (tCO2e)* 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.
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Embla Medical - 2025 Annual Report | 75STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW § 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 tCO2e. 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 tCO2e. 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 tCO2e. 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.
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Embla Medical - 2025 Annual Report | 76STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Energy Emissions Water Raw Materials Waste End-of-Life Medical Devices Resource Inflows and Outflows Product Loss & Waste Waste Materials Products Embla Medical - 2025 Annual Report | 77STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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) 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.
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Embla Medical - 2025 Annual Report | 78STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 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. 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. § 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. 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
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Embla Medical - 2025 Annual Report | 79STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW § 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. 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.
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Embla Medical - 2025 Annual Report | 80STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 2025 SUBSTANTIAL CONTRIBUTION CRITERIA DNSH (DO NO SIGNIFICANT HARM) Economic activities Codes Absolute turnover in USD ‘000 Proportion of turnover (%) Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Minimal safeguards Taxonomy-aligned (A1) or -eligible (A.2.) proportion of turnover, 2024 (%) Category (enabling activity) (E) Category (transitional activity) (T) Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N Y,N Y,N Y,N Y,N Y,N Y,N A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1.) 0 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% Of which enabling 0 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% E Of which transitional 0 0% N N N N N N N 0% T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy- aligned) EL, N/EL EL, N/EL EL, N/EL EL, N/EL EL, N/EL EL, N/EL Manufacture of electrical and electronic equipment 1.2. CE 110,834 11.93% N/EL N/EL N/EL EL N/EL N/EL 10.79% Sales of spare parts 5.2. CE 837 0.09% N/EL N/EL N/EL EL N/EL N/EL 0.09% Product-as-a-service and other circular use- and result-oriented service models 5.5. CE 17 0.00% N/EL N/EL N/EL EL N/EL N/EL 0.01% Turnover of Taxonomy-eligble but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 111,688 12.03% 0% 0% 0% 12.03% 0% 0% 10.88% Total (A.1 + A.2) 111,688 12.03% 0% 0% 0% 12.03% 0% 0% 10.88% B. TAXONOMY NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy non- eligible activities (B) 817,001 87.97% Total (A + B) 928,689 100% *Y - Yes, N - No, N/EL - Non-eligible Turnover KPI EU Taxonomy Tables
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Embla Medical - 2025 Annual Report | 81STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW CapEx KPI 2025 SUBSTANTIAL CONTRIBUTION CRITERIA DNSH (DO NO SIGNIFICANT HARM) Economic activities Codes CapEx in USD ‘000 Proportion of CapEx (%) Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Minimal safe- guards Taxonomy-aligned (A1) or -eligible (A.2.) proportion of CapEx, 2024 (%) Category (enabling activity) (E) Category (transitional activity) (T) Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N Y,N Y,N Y,N Y,N Y,N Y,N A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1.) 0 0 0% 0% 0% 0% 0% 0% N N N N N N N 0% Of which enabling 0 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% E Of which transitional 0 0% 0% N N N N N N N 0% T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy- aligned) EL, N/EL EL, N/EL EL, N/EL EL, N/EL EL, N/EL EL, N/EL Installation and operation of electric heat pumps 4.16. CCM 53 0.05% EL N/EL N/EL N/EL N/EL N/EL 0.00% Transport by motorbikes, passenger cars and commercial vehicles 6.5. CCM 4,027 4.00% EL N/EL N/EL N/EL N/EL N/EL 3.11% Renovation of existing buildings 7.2. CCM 4,898 4.87% EL N/EL N/EL N/EL N/EL N/EL 5.47% Installation, maintenance and repair of energy efficiency equipment 7.3. CCM 475 0.47% EL N/EL N/EL N/EL N/EL N/EL 0.07% Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) 7.4. CCM 15 0.01% EL N/EL N/EL N/EL N/EL N/EL 0.00% Installation, maintenance and repair of renewable energy technologies 7.6. CCM 0 0.00% EL N/EL N/EL N/EL N/EL N/EL 0.05% Computer programming, consultancy and related activities 8.2. CCA 0 0.00% N/EL N/EL N/EL N/EL N/EL N/EL 0.00%** CapEx of Taxonomy-eligble but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 9,468 9.41% 9.41% 0% 0% 0% 0% 0% 8.70% Total (A.1 + A.2) 9,468 9.41% 9.41% 0% 0% 0% 0% 0% 8.70% B. TAXONOMY NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy non- eligible activities (B) 91,185 90.59% Total (A + B) 100,653 100% *Y - Yes, N - No, N/EL - Non-eligible **Restated figure
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Embla Medical - 2025 Annual Report | 82STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW OpEx KPI 2025 SUBSTANTIAL CONTRIBUTION CRITERIA DNSH (DO NO SIGNIFICANT HARM) Economic activities Codes OpEx in USD ‘000 Proportion of OpEx (%) Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Minimal safe- guards Taxonomy-aligned (A1) or -eligible (A.2.) proportion of OpEx, 2024 (%) Category (enabling activity) (E) Category (transitional activity) (T) Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N, N/EL Y,N Y,N Y,N Y,N Y,N Y,N Y,N A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1.) 0 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% Of which enabling 0 0% 0% 0% 0% 0% 0% 0% N N N N N N N 0% E Of which transitional 0 0% 0% N N N N N N N 0% T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy- aligned) EL, N/EL EL, N/EL EL, N/EL EL, N/EL EL, N/EL EL, N/EL Close to market research, development and innovation 9.1. CCM 347 0.61% EL N/EL N/EL N/EL N/EL N/EL 0.30% OpEx of Taxonomy-eligble but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 347 0.61% 0.61% 0% 0% 0% 0% 0% 0.30% Total (A.1 + A.2) 347 0.61% 0.61% 0% 0% 0% 0% 0% 0.30% B. TAXONOMY NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy non- eligible activities (B) 56,885 99.39% Total (A + B) 57,232 100.00% *Y - Yes, N - No, N/EL - Non-eligible
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Embla Medical - 2025 Annual Report | 83STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW NUCLEAR AND FOSSIL GAS RELATED ACTIVITIES NUCLEAR ENERGY RELATED ACTIVITIES The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. No The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. No The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. No FOSSIL GAS RELATED ACTIVITIES The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. No The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. No The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. No Nuclear and fossil gas related activities – disclosure related to turnover, CapEx and OpEx KPIs in reference to Article 8 (6) and (7) of Delegated Regulation (EU) 2021/2178 Summary Tables Proportion of turnover / Total turnover Objective Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0.00% 0.00% CCA 0.00% 0.00% WTR 0.00% 0.00% CE 0.00% 12.03% PPC 0.00% 0.00% BIO 0.00% 0.00% Proportion of CapEx/ Total CapEx Objective Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0.00% 9.41% CCA 0.00% 0.00% WTR 0.00% 0.00% CE 0.00% 0.00% PPC 0.00% 0.00% BIO 0.00% 0.00% Proportion of OpEx/ Total OpEx Objective Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0.00% 0.61% CCA 0.00% 0.00% WTR 0.00% 0.00% CE 0.00% 0.00% PPC 0.00% 0.00% BIO 0.00% 0.00%
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Embla Medical - 2025 Annual Report | 84STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 SUSTAINABILITY STATEMENT
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Embla Medical - 2025 Annual Report | 85STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 86STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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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Embla Medical - 2025 Annual Report | 87STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 88STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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. 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
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Embla Medical - 2025 Annual Report | 89STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Our Employees (S1-6) In 2025, Embla Medical had a total headcount of 4,328 employees, compared to 4,203 in 2024, with characteristics defined by location and gender identity. The distribution remained consistent, with 13 countries having more than 50 employees, accounting for 94% of the total headcount, unchanged from the previous year. Over the course of the year, 741 employees left Embla Medical, resulting in a turnover rate of 17.4%, compared to 846 employees and turnover rate of 20.3% in 2024. For a more detailed breakdown of Embla Medical’s employee characteristics, please refer to the accompanying tables. Further information about salaries and employee numbers can be found in note 6 to the Consolidated Financial Statements. 2025 2024 Country Female Male Other Headcount Female Male Other Headcount United States of America 498 490 3 991 512 505 4 1,021 Iceland 292 381 2 675 294 389 2 685 Sweden 244 182 0 426 236 185 0 421 Mexico 159 226 0 385 169 223 0 392 Germany 118 198 0 316 75 130 0 205 France 139 172 0 311 137 171 0 308 The Netherlands 137 126 0 263 133 124 0 257 Poland 144 43 0 187 138 41 0 179 Norway 120 51 0 171 110 51 0 161 Australia 63 57 0 120 62 53 0 115 United Kingdom 41 47 0 88 44 48 0 92 Denmark 46 34 0 80 43 32 0 75 Canada 21 30 0 51 N/A N/A N/A N/A China N/A N/A N/A N/A 34 20 0 54 Locations by Countries With More Than 50 Employees § Accounting Policies (S1-6/S1-7/S1-8/S1-9/S1-13) Employees Employee headcount includes all active full-time and part- time contracts across all entities within Embla Medical. Each individual employed by the organization is counted as one, regardless of employment type or working hours. Full-Time Equivalent (FTE) includes all active full-time and part-time contracts across all entities within Embla Medical. FTE is calculated by dividing each employee’s actual working hours for the reporting period by the organization’s standard full-time working hours. Both Headcount and FTE are calculated at the end of the reporting period. Non-employee workers at Embla Medical are either those directly contracted by the company to provide labour or workers supplied by entities primarily engaged in employment activities. These individuals are excluded in the Embla Medicals employee headcount. Headcount of non-employees is calculated at the end of the reporting period. Gender is classified by gender identification, as reported by employees themselves, into three categories: male, female and other. Average employee headcount calculation is based on headcount at the beginning and the end of the reporting period. Employee turnover refers to the number of employees who have left Embla Medical within the reporting year, relative to the average headcount. Ratio of employees covered by collective bargaining agreements shows the percentage of Embla Medical’s total employees under such agreements in the reporting year, based on total headcount at the end of the reporting period. Top Management includes all employees with Vice President role and higher management levels. Performance reviews are limited to employees with at least three months of service. Non-employees are excluded from these figures. As a result, the total headcount reported for performance reviews is lower than the headcount disclosed in note 6 of the Consolidated Financial Statements. Training hours are calculated as the total duration of all courses completed within the reporting period, divided by total employee headcount. Non-employees are excluded from this calculation. The 2024 figures were revised to correct double counting of training hours. Note: N/A reflects that headcount is below 50
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Embla Medical - 2025 Annual Report | 90STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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 Identity of Employees at Period End* *Gender as specified by the employees themselves **As defined in note 6 in the Consolidated Financial Statements
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Embla Medical - 2025 Annual Report | 91STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 2025 2024 Gender Headcount % Headcount % Male 44 75.9% 37 74.0% Female 14 24.1% 13 26.0% Total 58 100% 50 100.0% COVERAGE RATE EMPLOYEES – EEA (FOR COUNTRIES WITH >50 EMPLOLYEES, REPRESENTING >10% TOTAL EMPLOYEES) 0-19% 20-39% 40-59% 60-79% 80-100% Iceland / Sweden 2025 2024 Age Distribution Headcount % Headcount % Between 30-50 2,479 57.3% 2,410 57.3% Over 50 1,031 23.8% 977 23.3% Under 30 818 18.9% 816 19.4% Total 4,328 100.0% 4,203 100.0% Gender Distribution in Number and Percentage at Top Management Level Collective Bargaining Coverage Distribution of Employees by Age Group Our Non-Employees (S1-7) In 2025, Embla Medical’s non-employees’ workforce primarily consisted of contractors and workers supplied by entities primarily engaged in employment activities, with a headcount of 301, compared to 290 in 2024. Collective Bargaining (S1-8) Embla Medical upholds employees’ right to unionize, freely establish or join organizations of their choice, and participate in collective bargaining, in line with international human rights standards. In 2025, 31% of the total Embla Medical workforce were covered by collective bargaining agreements, compared to 30% in 2024. Diversity Metrics (S1-9)
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Embla Medical - 2025 Annual Report | 92STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Adequate Wages (S1-10) Embla Medical is committed to ensuring that all employees receive wages that meet or exceed the definition of an adequate wage, supporting a decent standard of living. For 2025, our assessment shows that all our employees are paid an adequate wage, in line with applicable benchmarks. § Adequate Wages (S1-10) Adequate wages are defined as pay that meets or surpasses the country-specific benchmark for Embla Medical employees. The percentage of employees earning below the applicable adequate wage benchmark is reported for any country where some employees do not receive adequate wages, based on the total number of employees at the end of the reporting period, excluding non-employees. Wage calculations for comparison with the benchmark are based on hourly rates and include only guaranteed fixed payments. Adequate wages are defined as wages that meet or exceed established reference standards. For countries in the EEA the benchmark is minimum National Hourly Wages where available. When a country does not have a set national minimum wage, the benchmark is determined to be at least 60% of the country’s median wage and 50% of the gross average wage, following common international practice. Outside the EEA, adequate wage benchmarks are set by relevant laws or agreements ensuring a decent standard of living. If these don’t exist, national or sub-national minimum wages established by legislation or collective bargaining are used; or, if needed, a living wage benchmark from WageIndicator.org is used. Embla Medical was able to confirm that 95% of employees received adequate wages. For the remaining 5%, representing workers from recently acquired companies in Europe, wage verification was not conducted during this period. However, no indications of non-compliance with wage standards have been identified and the large majority of these employees are located in European countries with strong regulation around minimum wages. Performance Reviews 2025 2024 PARTICIPATED IN PERFORMANCE REVIEWS Female Male Other Total Female Male Other Total Headcount % Headcount % Headcount % Headcount % Headcount % Headcount % Headcount % Headcount % Yes 1,873 46.5% 1,913 47.5% 5 0.1% 3,791 94.2% 1,940 48.0% 2,010 49.8% 6 0,1% 3,956 97.9% No 102 2.5% 131 3.3% 0 0.0% 233 5.8% 45 1.1% 38 0.9% 0 0,0% 83 2.1% Total 1,975 49.1% 2,044 50.8% 5 0.1% 4,024 100.0% 1,985 49.1% 2,048 50.7% 6 0,1% 4,039 100.0% Training and Skills Development Metrics (S1-13) GENDER 2025 2024 Male* 4.5 3.7 Female* 4.3 3.9 Other* 1.7 1.3 Overall average* 4.4 3.8 Average Number of Training Hours per Employee *2024 year figure restated. See accounting policies for details.
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Embla Medical - 2025 Annual Report | 93STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Health and Safety Metrics (S1-14) In 2025, 59% of our workforce was covered by our Safety Management System, compared to 57% in 2024. During the current reporting period, a total of 20 work-related recordable incidents occurred compared to 13 in 2024. This resulted in a Total Recordable Incidents Rate (TRIR) of 4.0 per 500 employees, compared to 3.0 in 2024. No work- related fatalities occurred in either the current reporting year or the previous one. Compensation Metrics (S1-16) We at Embla Medical are committed to equal pay and have a constant focus on ensuring equal pay for equal positions and competences when hiring or promoting. To ensure equal pay for equal work we conduct regular salary audits (for details, see chapter S1-4). Embla Medical’s total remuneration ratio is 17.7 in 2025, compared to 13.4 in 2024. Incidents and Complaints (S1-17) § Accounting Policies (S1-16/S1-17) The annual total remuneration ratio is calculated by comparing the annual remuneration of Embla Medical’s highest-paid individual, the CEO, which includes fixed salary, cash-based incentives, pension, and share-based payments (excluding other benefits), with the average FTE salary (excluding the CEO’s remuneration and salary-related expenses apart from pension). Calculation is based on numbers reported in note 6 in the Consolidated Financial Statements. The total remuneration ratio reported under S1-16 does not fully align with ESRS requirements. The ESRS disclosure stipulates the use of median remuneration as the basis for calculation, whereas the statement uses average remuneration. In the current reporting year, Embla Medical is not reporting on pay gap. Incidents of discrimination and harassment include cases reported through the Speak-Up Line during the reporting period (for details, see chapter G1-1). Total number of complaints filed includes cases reported through the Speak-Up Line during the reporting period that relate to working conditions, equal treatment and opportunities for all and other work-related rights, excluding discrimination and harassment cases. The data concerning incidents of discrimination and complaints is currently based solely on reports made through the Speak-Up Line, as global data collection from the People function has not yet been implemented. Fines, penalties, and compensation for damages includes any financial payments made in connection with confirmed cases during the fiscal year. § Accounting Policies (S1-14) Recordable incidents are defined as work-related incidents that results in days away from work (more than the incident day), restricted work, transfer to another job, loss of consciousness or death. Recordable incidents include all on-site workers at Embla Medical’s largest manufacturing and distribution sites, as well as some patient care facilities. For the current reporting period, the scope has expanded compared to the prior year to include Fior&Gentz and ForMotion France. This change increases the total headcount and exposure hours included in the calculation of health and safety metrics, which may affect year-on-year comparability of TRIR and other rates. Any observed changes in these metrics should be interpreted considering this expanded scope. Data from recently acquired companies and patient care facilities in Netherlands and US is excluded from the incident count. Total Recordable Incidents Rate (TRIR) is calculated by dividing the number of recordable incidents by total hours worked by own workforce covered by the Safety Management System, and multiplied by 1.000.000. This rate shows the number of incidents per one million hours worked, equivalent to incidents per 500 full-time employees annually. Fatalities are the number of employees who lost their lives as a result of a work-related incident and are included in TRIR. The percentage of headcount covered by the Safety Management System (SMS) is calculated by dividing the total headcount covered by the SMS by the total Embla Medical headcount at the end of the reporting period for all entities. INCIDENTS, COMPLAINTS AND SEVERE HUMAN RIGHTS IMPACTS 2025 2024 Unit Value Incidents of discrimination, including harassment* Number 3 3 Complaints filed through channels for people in own workforce to raise concerns* Number 0 0 Fines, penalties and compensation for damages as a result of incidents of discrimination, including harassment and complaints USD 0 0 Severe human rights incidents connected to own workforce Number 0 0 Fines, penalties and compensation for damages related to severe human rights incidents USD 0 0 *Only cases reported via the Speak-Up Line during the period are included
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Embla Medical - 2025 Annual Report | 94STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 95STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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.
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Embla Medical - 2025 Annual Report | 96STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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. BRAND ISO STANDARD Össur ISO 13485 Fior & Gentz ISO 13485 College Park ISO 13485 ForMotion Clinics (some clinics have ISO 9001) ISO 9001 ISO Certificates 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.
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Embla Medical - 2025 Annual Report | 97STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. SUSTAINABILITY STATEMENT
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Embla Medical - 2025 Annual Report | 98STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. 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. 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
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Embla Medical - 2025 Annual Report | 99STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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. § 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.
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Embla Medical - 2025 Annual Report | 100STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Independent Limited Assurance Report on Selected Sustainability Data SUSTAINABILITY STATEMENT 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 - 99 (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.
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Embla Medical - 2025 Annual Report | 101STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW 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
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FINANCIAL STATEMENTS 2025
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Embla Medical - 2025 Annual Report | 103STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW TABLE OF CONTENTS Statement by the Board of Directors and President and CEO 104 Independent Auditor’s Report 106 Consolidated Income Statement 109 Consolidated Statement of Comprehensive Income 109 Consolidated Balance Sheet 110 Consolidated Statement of Cash Flow 111 Consolidated Statement of Changes in Equity 111 Notes to the Consolidated Financial Statements 112 Consolidated Financial Statements FINANCIAL STATEMENTS
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Embla Medical - 2025 Annual Report | 104STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Statement by the Board of Director and President and CEO Embla Medical hf. Consolidated Financial Statements 2025 1 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 2 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.
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Embla Medical - 2025 Annual Report | 105STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Statement by the Board of Director and President and CEO Embla Medical hf. Consolidated Financial Statements 2025 3 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 4 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
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Embla Medical - 2025 Annual Report | 106STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Independent Auditor´s Report Embla Medical hf. Consolidated Financial Statements 2025 5 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 6 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 statements 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.
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Embla Medical - 2025 Annual Report | 107STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Independent Auditor´s Report Embla Medical hf. Consolidated Financial Statements 2025 7 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 8 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.
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Embla Medical - 2025 Annual Report | 108STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Independent Auditor´s Report Embla Medical hf. Consolidated Financial Statements 2025 9 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
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Embla Medical - 2025 Annual Report | 109STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Embla Medical hf. Consolidated Financial Statements 2025 10 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 11 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
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Embla Medical - 2025 Annual Report | 110STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Embla Medical hf. Consolidated Financial Statements 2025 12 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 13 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
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Embla Medical - 2025 Annual Report | 111STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Embla Medical hf. Consolidated Financial Statements 2025 14 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 15 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.
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Embla Medical - 2025 Annual Report | 112STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 16 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 17 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.
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Embla Medical - 2025 Annual Report | 113STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 18 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 19 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.
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Embla Medical - 2025 Annual Report | 114STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 20 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 21 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)
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Embla Medical - 2025 Annual Report | 115STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 22 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 23 11. Property, plant and equipment 2025 Leasehold improvements Machinery & equipment Office equipment Computer equipment Total 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 2024 Leasehold improvements Machinery & equipment Office equipment Computer equipment 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.
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Embla Medical - 2025 Annual Report | 116STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 24 12. Leases Right of use assets 2025 Buildings & sites Machinery & equipment 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 2024 Buildings & sites Machinery & equipment 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 25 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%
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Embla Medical - 2025 Annual Report | 117STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 26 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.
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Embla Medical - 2025 Annual Report | 118STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 27 14. Other intangible assets 2025 Customer & distribution relationships Patents & development costs Trademarks Software & other 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 2024 Customer & distribution relationships Patents & development costs Trademarks Software & other 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 28 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.
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Embla Medical - 2025 Annual Report | 119STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 29 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 30 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
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Embla Medical - 2025 Annual Report | 120STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 31 21. Issued capital and share premium Common stock is as follows in thousands of shares in ISK: Issued shares Treasury 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 32 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.
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Embla Medical - 2025 Annual Report | 121STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 33 23. Retained earnings Transaction with non-controlling interests During the year the Company acquired remaining shares in one of its subsidiary (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 settlement of options in which an equivalent number of shares are delivered to the employee that equals to the profit of the Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 34 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
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Embla Medical - 2025 Annual Report | 122STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 35 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 36 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
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Embla Medical - 2025 Annual Report | 123STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 37 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 38 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: 1/1/2025 Recognized in Income Statement Recognized directly in OCI Other (i) 12/31/2025 Deferred tax assets Deferred tax liabilities 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) 1/1/2024 Recognized in Income Statement Recognized directly in OCI Other(i) 12/31/2024 Deferred tax assets Deferred tax liabilities 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.
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Embla Medical - 2025 Annual Report | 124STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 39 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 40 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 options are exercisable in 2027 to 2033.
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Embla Medical - 2025 Annual Report | 125STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 41 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 42 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 months of sales is included in the Consolidated Financial Statements 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 Statements 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.
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Embla Medical - 2025 Annual Report | 126STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 43 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 Statements 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 44 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
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Embla Medical - 2025 Annual Report | 127STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 45 Loan covenants 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 46 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 7,176 5,656 (6,374) (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).
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Embla Medical - 2025 Annual Report | 128STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 47 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 48 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
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Embla Medical - 2025 Annual Report | 129STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 49 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 50 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.
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Embla Medical - 2025 Annual Report | 130STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 51 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 52 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 information obtained
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Embla Medical - 2025 Annual Report | 131STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 53 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 54 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
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Embla Medical - 2025 Annual Report | 132STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 55 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 56 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 increase
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Embla Medical - 2025 Annual Report | 133STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 57 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 58 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
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Embla Medical - 2025 Annual Report | 134STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 59 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 60 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.
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Embla Medical - 2025 Annual Report | 135STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 61 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 62 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.
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Embla Medical - 2025 Annual Report | 136STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 63 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 64 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.
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Embla Medical - 2025 Annual Report | 137STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 65 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.
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Embla Medical - 2025 Annual Report | 138STRATEGY MARKETS PERFORMANCEINNOVATION GOVERNANCE SUSTAINABILITY STATEMENT FINANCIAL STATEMENTSOVERVIEW Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 66 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 operating 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 Value of the Company's equity, measured by multiplying the current stock price by the total number of outstanding shares Notes to the Consolidated Financial Statements Embla Medical hf. Consolidated Financial Statements 2025 67 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.
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