Embla Medical hf: Interim Report Q1 2024

Announcement no. 10/2024

Interim report Q1 2024

23 April 2024

Sveinn Sölvason, President and CEO, comments:

“Sales growth was strong in the first quarter or 10% and organic growth was 7%, driven by volume growth in Prosthetics & Neuro Orthotics and Patient Care. Growth was driven by a strong performance in EMEA, but the year started off slowly in Americas and APAC. Financial performance of FIOR & GENTZ, which we acquired in January, was strong in the first quarter post-acquisition and work has begun to leverage our global sales infrastructure to harvest commercial synergies. This is the first quarter we report under the new parent company name Embla Medical which became the parent organization for our leading product brands Össur, College Park, and FIOR & GENTZ, in addition to our Patient Care business.”

Highlights Q1 2024

• Sales amounted to USD 200 million and grew by 10%. Organic growth was 7%, compared to 9% in Q1 2023.
• Prosthetics & Neuro Orthotics sales grew by 10% organic, Bracing & Supports (B&S) sales grew by 1% organic and Patient Care sales grew by 6% organic. Growth is attributed to strong volume growth and sales of high-end solutions. Growth was driven by strong sales in EMEA while sales in Americas and APAC were soft.
• Gross profit margin before special items was 62% in Q1 2024, same as in Q1 2023. Cost reduction initiatives were executed in late Q1 to lower unit cost in manufacturing.
• EBITDA before special items was USD 33 million and EBITDA margin before special items was 17%, compared to 16% in Q1 2023. EBITDA margin before special items was positively impacted by scalability in operating expenses while currency movements negatively impacted the EBITDA margin by 70 basis points.
• Net profit was USD 8 million and net profit margin was 4% of sales, compared to 6% of sales in Q1 2023. Net profit was impacted by the expense of special items in the quarter.
• Free cash flow was negative by USD 7 million in the quarter. Free cash flow is seasonally low in the first quarter of the year and was impacted by CAPEX investments.
• NIBD/EBITDA before special items was 3.3x at the end of Q1 2024 (2.9x excl. leases), above the target ratio of 2.0-3.0x as expected due to the acquisition of FIOR & GENTZ in January.

Other highlights

• On 13 March 2024, Embla Medical was established as the new name of the parent organization to leading product brands Össur, College Park, and FIOR & GENTZ in addition to a portfolio of Patient Care facilities. Embla Medical is listed on Nasdaq Copenhagen and the trade ticker was changed to EMBLA on 8 April 2024 (previously OSSR).
• On 18 January 2024, Medicare in the US published a draft proposal that would grant K2 (low active) patients access to prosthetic knees and feet previously restricted to K3-K4 (high active) patients. The effective date for these proposed changes has not been announced.

2024 outlook

• Organic sales growth guidance is unchanged at 5-8%.
• EBITDA margin before special items guidance is unchanged at 19-20%.

Conference call details

Embla Medical will host a conference call on 23 April 2024 at 9:00 CET / 7:00 GMT / 3:00 ET. A conference call webcast can be accessed here: Össur Conference Call Webcast.

To actively participate in the Q&A session of the call please click on this link: Register here.

Further information

David Hreidarsson, VP of Investor Relations, IR@emblamedical.com, +354 661 8225

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About Embla Medical

Embla Medical (Nasdaq Copenhagen: EMBLA) was founded in Reykjavik in 1971 with the mission to improve people's mobility. Embla Medical is home to several brands renowned for positively impacting people's health and well-being. They include Össur, a leading global provider of prosthetics and bracing and supports solutions; FIOR & GENTZ, an innovative developer of neuro orthotics; and College Park Industries, creators of custom-built prosthetic solutions. Embla Medical also provides patients with world-class care through a global network of Orthotic and Prosthetic (O&P) facilities. Embla Medical is committed to sustainable business practices and is signatory to the UN Global Compact, UN Women’s Empowerment Principles, and contributes to the UN Sustainable Development Goals. The company's climate targets have been verified by the Science Based Targets initiative. Embla Medical operates globally and has more than 4,000 employees. www.emblamedical.com

Embla Medical was formerly listed as Össur (OSSR) on Nasdaq Copenhagen until 8 April 2024.