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Össur - Second Quarter Report 2013

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Highlights

  * Sales amounted to USD 106 million compared to USD 103 million in Q2'12,
    corresponding to a 3% local currency growth.
  * Bracing and supports sales were flat while prosthetics sales grew by 6%,
    measured in local currency.
  * Performance in EMEA was excellent with strong growth across all markets and
    segments. Performance in the US was mixed and continued to be impacted by
    turbulence in the US reimbursement environment.
  * The cost reduction initiative is on track and expected to reduce costs by
    USD 5 million in 2013. Full year 2014 impact of these initiatives amounts to
    USD 8 million. One-time expenses relating to these initiatives amounted USD
    4.5 million in Q2'13.
  * Gross profit amounted to USD 65 million and 61% of sales. Adjusted for one-
    time expenses gross profit amounted to USD 66 million or 62% of sales. Gross
    profit margin in Q2'12 was 62%.
  * EBITDA amounted to USD 15 million corresponding to 14% of sales. Adjusted
    for one-time expenses, EBITDA amounted to USD 20 million corresponding to a
    margin of 19%, the same ratio as in Q2'12.
  * Net profit amounted to USD 8 million or 8% of sales. Adjusted for one-time
    expenses net profit amounted to USD 12 million and 11% of sales. Net profit
    in Q2'12 amounted to USD 10 million and 10% of sales.
  * Cash generated by operations was 11% of sales, compared to 19% in Q2'12.
    Affecting cash generation is the payment of one-time expenses as well as an
    increase in working capital.
  * In May Össur signed an agreement to acquire the Swedish orthotic and
    prosthetic provider TeamOlmed for USD 47 million. The acquisition is
    expected to close in Q3'13.

Financial Guidance for 2013

  * Management reiterates its previous guidance for 2013; LCY organic sales
    growth is expected to be in the range of 2-4% and adjusted EBITDA margin
    18-19%.
  * As communicated in the Q1'13 report, management expects the results of 2013
    to be in the lower end of the guided range, both in terms of sales and
    EBITDA.


Jón Sigurðsson, President & CEO, comments:
"The results of the second quarter are in line with our expectations.
Performance in EMEA is excellent, delivering growth in all product segments and
markets. Challenges in Americas continue as previously communicated. Cost
reduction initiatives already executed are on track and we are confident that
they will yield the expected results. In May we signed an agreement to acquire
TeamOlmed, an orthotic and prosthetic provider, strengthening our position in
the Swedish market".

Conference Call
Össur will host a conference call on Thursday 25 July 2013 at 12:00 CET/ 10:00
GMT/ 6:00 EST. To participate in the call please dial Europe: +44 (0)
203 364 5374 or +46 (0) 8 505 564 74, The United States: + 1 855 753 2230,
Iceland: 800 8660

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