Össur hf: Interim Report Q3 2022

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Announcement no. 61/2022

Interim Report Q3 2022

25 October 2022

Sveinn Sölvason, President and CEO, Comments:

“Sales amounted to 177 million and EBITDA margin before special items was 20% in Q3 2022. Growth was very strong in APAC as both China and Australia are regaining ground and sales were stronger in Americas this quarter. We continue to face supply chain challenges and emphasize delivering our products and solutions to patients. Interest in the Power Knee remains high, and patient and provider satisfaction fuels our ongoing dedication to improving people’s mobility. We acquired Naked Prosthetics in the quarter, a market leader in mechanical finger prostheses, which strengthens our upper limb product offering. We have made organizational changes and initiated cost savings as we remain focused on future growth and profitability.”

Highlights Q3 2022

  • Sales amounted to USD 177 million. Sales growth was 6% in local currency and increased by 4% organic. In 9M 2022, sales amounted to USD 528 million, sales growth was 6% in local currency and increased by 3% organic.
  • Prosthetics grew by 4% organic and Bracing & Supports (B&S) grew by 2% organic in Q3 2022. Prosthetics grew by 3% in 9M 2022 and B&S by 2%.
  • Sales were negatively impacted by USD 14 million due to currency movements in Q3 2022 compared to Q3 2021, which corresponds to about an 8%-point negative effect on the reported growth rate.
  • In Q3 2022, Össur made organizational changes and initiated cost savings to support further growth and profitability, and simplified operations to better leverage key strategic locations. Total annual cost savings amount to USD 15 million and are expected to materialize from the beginning of 2023. In Q3 2022, net special items cost amounted to USD 14 million, mainly due to the cost saving initiatives.
  • Gross profit margin was 61% in Q3 2022 compared to 62% in Q3 2021. Gross profit margin in Q3 2022 was 63% excluding special items, mainly in connection to the cost saving initiatives. Gross profit was 61% in 9M 2022 or 62% excluding special items, compared to 63% in 9M 2021.
  • EBITDA before special items amounted to USD 35 million in Q3 2022, and the EBITDA margin was 20% compared to 21% in Q3 2021.
  • Net profit in Q3 2022 amounted to USD 7 million or 4% of sales compared to USD 17 million or 10% of sales in Q3 2021, also affected by the before mentioned special items. Net profit in 9M 2022 amounted to USD 30 million compared to USD 48 million in 9M 2021.
  • Cash generated by operations amounted to USD 21 million or 12% of sales in Q3 2022 and amounted to USD 53 million or 10% of sales in 9M 2022.
  • NIBD/EBITDA was 2.8x at the end of Q3 2022, within the target ratio of 2.0-3.0x. In line with Össur’s Capital Structure and Capital Allocation Policy, Össur has temporarily paused share buybacks as NIBD/EBITDA is now at the upper end of the target leverage range.
  • In Q3 2022, Össur acquired Naked Prosthetics, a leading provider of mechanical finger prostheses for finger and partial hand amputees, with FY 2021 sales of USD 9 million.
  • The financial guidance for the full year 2022 is 4-6% organic sales growth, 18-20% EBITDA margin before special items, 3-4% CAPEX of sales, and an effective tax rate of 23-24%. Currently, management estimates that organic sales growth and EBITDA margin before special items for FY 2022 will be at the lower end of the guidance range.

Q3 2022 conference call details

Össur will host a conference call on 25 October 2022 at 9:00 CEST / 7:00 GMT / 3:00 ET. To participate in the call please click on this link: Össur Conference Call

A webcast can be followed on the Össur website: www.ossur.com/investors

Further information

Edda Lára Lúðvígsdóttir, Investor Relations Director, eludvigsdottir@ossur.com, +354 844 4759

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About Össur

Össur (Nasdaq Copenhagen: OSSR) is a global leader in non-invasive orthopaedics that helps people live a Life Without Limitations. A recognized “Technology Pioneer” with a rich 50-year history, Össur focuses on improving people’s mobility through the delivery of innovative technologies in Prosthetics and Bracing & Supports. Significant investment in research and development have led to over 2,000 patents, award-winning designs, successful clinical outcomes, and consistently strong market positions. Össur is signatory to the UN Global Compact, UN Women’s Empowerment Principles, contributes to the UN Sustainable Development Goals and became carbon neutral in 2021. Össur operates globally and employs around 4,000 employees. www.ossur.com