EDWARDS_LIFESCIENCES_LIMI - Accounts

The directors present the strategic report for the year ended 31 December 2022.

Net sales were up on the previous year driven by strong sales within the Transcatheter Heart Valve (THV) product line. THV enjoyed further success from the third generation Sapien 3 Transcatheter Aortic Valve

Implantation (TAVI) device that has enabled Edwards to take an even greater share of the UK & Irish TAVI market.

In addition, the strong sales performance within the Critical Care & Vascular (CCVas) division was driven by continued success in the Hemosphere Advanced Monitoring Platform.

Also there was a strong sales growth in Transcatheter Mitral and Tricuspid Therapies (TMTT) with continued adoption of the Pascal Precision Transcatheter Valve repair system.

The principal risk facing the company arises from the fact that the majority of sales are made to the NHS and as a result are reliant on NHS purchasing activity and the on-going centralisation of its purchasing organisation. The company therefore operates in an environment where less costly products and treatments may be seen as an attractive way to save funds in the short term and so a highly innovative and specialised company such as Edwards must therefore demonstrate the importance of better outcomes and the longer term benefits that our products bring.

It should also be noted that the impact on our business of the UK exiting the European Union at the start of 2021 was limited although we will continue to monitor the effects of key impact areas of Brexit such as changes to the UK healthcare product regulatory system and the cross-border movement of both people and products.  

The primary KPI is gross revenue, which has increased this year. The other KPI is to comply with all relevant regulations and medical technology industry standards, commercialize new products to remain competitive in the cardiovascular medical technology industry.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2022.

The principal activity of the company continued to be the sale and distribution of medical devices within the UK and the Republic of Ireland.

Throughout the current and previous year the company operated a branch in the Republic of Ireland.

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.

The company’s principal foreign currency exposures arise from trading with overseas companies. The Ireland branch transacts in Euro but overall exchange risk remains immaterial.

All customers who wish to trade on credit terms are subject to credit verification procedures.

The auditor, Craufurd Hale Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Edwards Lifesciences Limited is committed to achieving Net Zero emissions by 2045. As we pursue our patient-focused innovation strategy, Edwards understands the importance of addressing climate change and is committed to implement projects for decreasing our greenhouse gases (GHG) emissions until reaching Net Zero emissions.

Edwards Lifesciences Limited’s business has grown by a compound annual rate of 8.4% since 2019. As we continue to grow, we increase the number of employees, and the number of products that we place into the market. This results in an increase of our total emissions in absolute numbers. However, taking the growth into consideration, we are reducing our emissions on a per gross profit basis.

Our office is supplied by fully renewable electricity with zero CO2 emissions and there our electricity consumption related CO2 emissions are equal to zero (0). A report on the fuel mix of our supplier can be found on their website www.ecotricity.co.uk/our-green-energy/our-fuel-mix.

Baseline emissions are a record of the greenhouse gases that have been produced in the past and were produced prior to the introduction of any strategies to reduce emissions. Baseline emissions are the reference point against which emissions reduction can be measured. On the basis that 2019 had the most accurate data for our emissions, this was chosen as our baseline year against which emissions reduction can be measured.

Energy consumption have been reported and recorded in accordance with Environmental management system based on ISO 14001:2015. To record and report Edwards related CO2 emissions we have used GHG Reporting Protocol corporate standard and the appropriate emission conversion factors for greenhouse gas company reporting from UK Government GHG Conversion Factors for Company Reporting. The breakdown of emissions is detailed below.

2022

Total emissions: 126.341

2021

Total emissions: 116.0044

Emissions reduction targets

At Edwards Lifesciences Limited, a UK subsidiary of Edwards Lifesciences Corporation, we recognise that safe and environmentally responsible operations bring shared value to our patients, our employees, our stakeholders, and the communities in which we operate.

Edwards Lifesciences Corporation has globally adopted a plan to achieve carbon neutrality by the year 2030 and 1.5°C science-based targets. Edwards has committed to set and achieve targets approved by the Science-based Targets Initiative (SBTi). This global environmental goal has a direct impact on the Edwards UK subsidiary, and it sets targets for decreasing its emissions to achieve Net Zero by 2045.

In order to continue our progress to achieving Net Zero, we have adopted the following carbon reduction targets and we are working on the following projects:

• We are committed that our car fleet will be zero emitters. We strive to achieve this goal by 2035. Our existing car policy prefers selection of electric vehicles over classic petrol cars and prohibits the use of diesel engines. Close monitoring of fuel consumption per driver enables the motivation of our employees to reduce emissions.

• Our office is powered by 100% renewable electricity. The electricity we use is mainly produced by offshore and onshore wind and to lesser extent by solar power plant and hydropower plant. We are committed to keeping this approach and will verify the sources of energies with our supplier.

• Waste generated in our office is on average 35% separated and recycled. Our objective for 2023 is to increase the recycled waste by 5%. Our employee engagement programme as described in our Environmental Management System focuses on employee motivation to contribute fully to this target. Some of our motivational activities includes recycling competitions, local litter picks and an increase in informative communications to our staff encouraging them to recycle at the office.

• A sustainable travel guideline is being developed to encourage more sustainable business trips. The guideline promotes sustainable travelling, provides advice on travel carrier selection, and sets guidance on transportation preferences. We are committed to decreasing emissions from business travel by at least a normalised rate of 10% by 2030.

• We are motivating employees via our benefits scheme to preferably use public transportation over personal vehicles. Sustainability/Carbon reduction criteria are part of our employee benefits scheme selection, including motivation to reduce carbon dioxide and other greenhouse gases footprint. Specific targets and monitoring tools will be implemented in 2024.

• For our upstream transportation and distribution, we increased our emissions as a result of delivery risk mitigation related to Brexit. We contracted only air transport to prevent border delays for our critical healthcare products. We recently undertook a review of this risk to assess the impact on our business and decided to rearrange our transportation model. Starting in March 2023, we are going to ship approximately 40% of our total volume to the UK via alternative routes. Our objective is to reduce CO2e levels by a normalised rate of 31% by 2024.

• Our regional supplier selection process describes sustainability/carbon reduction commitments as a significant criteria for our vendor selection and monitoring process. Our objective is to engage only with suppliers that follow Carbon Reduction Plans which commit to UK government net zero ambitions.

• We operate a UK Environmental Management System based on ISO 14001:2015 set up principles designed to engage and motivate all employees to be able to contribute and to achieve Edwards global and local environmental objectives including those stated above.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of Edwards Lifesciences Limited (the 'company') for the year ended 31 December 2022 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are 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 the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) 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 financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Fraud and breaches of laws and regulations - ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud ("fraud risks") we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

- Enquiry of management and those charged with governance around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Using analytical procedures to identify any unusual or unexpected relationships.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

- Detailed reviews of the company's bank statements, testing all transactions deemed unusual and a sample of large material bank transactions.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.

As required by auditing standards, and taking into account our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make in appropriate accounting entries.

We did not identify any additional fraud risks.

We performed procedures including identifying journal entries to test based on risk criteria and comparing identified entries to supporting documentation. These included those posted to unrelated accounts, those posted containing key words, and those posted to an account linked to a fraud risk.

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience, and through discussions with the directors and other management (as required by auditing standards), and from inspection of the Company's regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation) and tax legislation, and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

We did not identify any others where the consequences of non-compliance alone could have a material effect on amounts or disclosures in the financial statements.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The income statement has been prepared on the basis that all operations are continuing operations.

Edwards Lifesciences Limited is a private company limited by shares incorporated in England and Wales. The registered office is Cannon Place, 78 Cannon Street, London, EC4N 6AF.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

In preparing the financial statements, the directors have considered the ability of the company to continue as a going concern and are actively monitoring the continued impact of Brexit on its financial condition, liquidity, operations and workforce to inform their decisions.true

The company made a profit before tax for the year ended 31 December 2022 of £5,373,602 (2021: £4,991,697) and at the balance sheet date had net current assets of £16,893,276 (2021: £12,431,240) and net assets of £17,247,323 (2021: £12,916,669).

The directors have reviewed the latest financial information and prepared cash flow forecasts identifying all known contractual cash commitments for a period including the twelve months from the date of approval of the financial statements and compared this to current cash holdings.

The directors have concluded that there are no material uncertainties that lead to significant doubt upon the company’s ability to continue as a going concern and therefore the directors believe that it remains appropriate to prepare the financial statements on the going concern basis.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets are measured at cost, net of depreciation.

Depreciation is recognised so as to write off the cost of assets over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

From time to time, the company reviews the carrying amounts of the assets it places in hospitals to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the asset is written down.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, those overheads that have been incurred in bringing the stocks to their present location and condition.

Cash and cash equivalents represents cash in hand and bank.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Basic financial assets, which include trade and other receivables and cash and bank balances, are measured at transaction price.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities are classified according to the substance of the contractual arrangements entered into. Apart from its Ordinary shares, the company has no equity instruments.

Basic financial liabilities, including trade and other payables, are recognised at transaction price.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

The only equity instruments are the Ordinary shares. Dividends payable are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

The costs of short-term employee benefits are recognised as a liability and an expense. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date set by the group, because the majority are inter-company balances. Transactions in foreign currencies are recorded at the rates set for each month on a Europe-wide basis within the group. Conversion differences are taken to the Income Statement. Translation differences relating to the Irish branch are reflected in the Statement of Comprehensive Income.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of 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 recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

An analysis of the company's turnover is as follows:

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 1).

When they change, UK tax rates change on 1 April each year. In what follows, the average rate for each year has been calculated.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The company contributes to a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Operating lease payments represent rentals payable by the company for its properties and for vehicle leases.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The immediate parent company is Edwards Lifesciences Holding B.V., which is incorporated in The Netherlands.

The ultimate parent company is Edwards Lifesciences Corporation which is incorporated in the USA.

The smallest group of undertakings for which group accounts are drawn up is Edwards Lifesciences B.V., which is registered in The Netherlands. Copies of the group accounts can be obtained from the company at Verlengde Poolesweg 16, 4818CL, Breda.

The largest group of undertakings for which group accounts are drawn up is Edwards Lifesciences Corporation, whose registered office is at One Edwards Way, Irvine, California 92614. Copies of the consolidated accounts can be obtained from that address and are available online at edwards.com.