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Ossur Hf : Interim report Q4 2018

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Announcement no. 7/2019
Interim report Q4 2018
5 February 2019

Highlights

  • Sales growth of 12% in local currency in Q4 2018, organic sales growth of 4% and reported growth of 9%. Sales growth of 7% in local currency in FY 2018, organic growth of 5% and 8% reported growth.
  • The prosthetics segment grew 6% organic in Q4 2018 and the B&S segment grew 3% organic. Growth in both business segments can be attributed to strong sales of high-end innovative products.
  • Gross profit margin was 64% in Q4 2018 compared to 63% in the comparable quarter. The increase is driven by positive impact from changes in product mix and savings from the ongoing efficiency initiatives. Gross profit margin in FY 2018 amounted to 63%.
  • EBITDA margin before special items was 20% in Q4 2018, same as in the comparable quarter last year. The EBITDA margin was positively impacted by changes in product mix, savings from the ongoing efficiency initiatives, and currency movements. The EBITDA margin was slightly negatively impacted by OPEX investments and the recent acquisitions. EBITDA margin before special items in FY 2018 amounted to 19%.
  • Össur made four acquisitions in 2018. Three of the acquisitions were made in Q4 2018, of which two acquisitions had no impact on operating income in Q4 2018. The combined full-year sales of the four acquisitions amount to about USD 70 million. The acquisitions resulted in a revaluation of previously acquired shares, impacting effects from associates positively by USD 17 million in Q4 2018.
  • Net profit grew by 47% in Q4 2018 and amounted to 20% of sales. Growth in diluted EPS amounted to 48% in Q4 2018. Net profit grew by 38% in FY 2018 and amounted to 13% of sales.
  • Cash generated by operations was strong in Q4 2018 and amounted to 18% of sales. Cash generated by operations amounted to 15% of sales in FY 2018.
  • Össur acquired 726,566 of own shares through the ongoing share buyback program for USD 5 million in Q4 2018. In FY 2018, Össur acquired 5,430,259 of own shares for USD 26 million.
  • The Board of Directors will propose to the Annual General Meeting in 2019 that Össur pays a cash dividend of DKK 0.14 per share for 2018, an 8% increase from DKK 0.13 per share for 2017, and cancel all the shares that Össur acquired in 2018 amounting to 5,430,259 shares.
  • The financial guidance for the full year 2019 is 4-5% organic sales growth, ~23% EBITDA margin before special items*, 4-5% CAPEX of sales, and an effective tax rate of 23-24%.

Jon Sigurdsson, President & CEO, comments:

"We delivered on all our guidance parameters for the year and for the third year in a row, we grew our prosthetics segment above estimated market growth. The key growth drivers were our high-end innovative products which performed well in both prosthetics and bracing & supports, in addition to strong growth in emerging markets. With favorable changes in product mix and savings from the ongoing efficiency initiatives, we were able to increase our profitability during the year."

* Guidance for EBITDA margin before special items includes the expected impact of IFRS 16. Excluding the impact of IFRS 16, the EBITDA margin is expected to be ~20%. See further information in the section on financial guidance for 2019.

Q4&FY 2018 conference call details

Össur will host a conference call on Tuesday 5 February 2019 at 9:00 CET / 8:00 GMT / 3:00 EDT. To participate in the call please dial: Europe: + 45 3544 5580, +44 (0) 203 364 5374 or +46 (0) 8 505 564 74, The United States: + 1 855 753 2230, Iceland: +354 800 7417. A webcast can be followed on the Össur website: www.ossur.com/investors.

Further information

David Hreidarsson, Investor Relations, dhreidarsson@ossur.com, +354 515 1380

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About Össur

Össur (NASDAQ OMX: OSSR) is a global leader in non-invasive orthopaedics that help people live a life without limitations.  Its business is focused on improving people's mobility through the delivery of innovative technologies within the fields of Prosthetics and Bracing & Supports.  A recognized "Technology Pioneer," Össur invests significantly in research and product development-its award-winning designs ensuring a consistently strong position in the market.   Successful patient and clinical outcomes are further empowered via Össur's educational programs and business solutions.  Headquartered in Iceland, Össur has major operations in the Americas, Europe and Asia, with additional distributors worldwide. www.ossur.com

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