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Össur hf: Interim report Q4&FY 2020

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Announcement no. 02/2021

Interim report Q4&FY 2020

2 February 2021

Jon Sigurdsson, President & CEO, comments:

“We are satisfied with the results for 2020 considering this unprecedented year. We have seen a strong recovery in sales, with prosthetics reporting positive organic sales growth in the last quarter of the year. The cash flow was strong in 2020 with the focus on managing working capital and capital expenditures. We expect the impact from the pandemic to be short-term, and that the long-term prospects and underlying fundamental drivers of the business are unchanged. Our business mix has changed during the year, where we sharpened our sales strategy in the B&S markets with the divestment of Gibaud and entities focused on B&S sales in the US, while making good progress with our external growth strategy through several acquisitions. I would like to thank all our employees and customers for their flexibility, positive team spirit and efforts during this challenging year.”

Financial performance in Q4 and FY 2020 impacted by the COVID-19 pandemic and M&A activity

  • Sales have gradually recovered during the year, however, many markets are still impacted by measures to control the COVID-19 pandemic. Sales declined by 8% in local currency in Q4 2020 and declined by 4% organic. Sales declined by 8% in local currency in FY 2020 and by 10% organic.
  • The prosthetics segment grew by 1% organic and the bracing & supports (B&S) declined by 12% organic in Q4 2020. The prosthetics segment declined by 7% organic in FY 2020 and the B&S segment declined by 15%.
  • Gross profit margin in Q4 2020 was 64% compared to 63% in Q4 2019. Gross profit margin for FY 2020 was 62% compared to 64% for FY 2019.
  • EBITDA margin was 14% in Q4 2020 compared to EBITDA margin of 21% in Q4 2019. Excluding extraordinary costs related to divestments completed in Q4 2020, EBITDA margin would have been 19%. EBITDA margin for FY 2020 was 15% compared to an EBITDA margin before special items of 22% for FY 2019.
  • Net profit in Q4 2020 amounted to USD 4 million and 2% of sales. Net profit for FY 2020 amounted to USD 8 million and 1% of sales as it was impacted by extraordinary items related to divestments, acquisitions, litigation, severance, and government grants, in addition to COVID-19.
  • Cash flow was strong in 2020, mainly due to inventory management efforts and lower capital expenditure. Cash generated by operations amounted to USD 27 million or 16% of sales in Q4 2020. Cash generated by operations amounted to USD 119 million or 19% of sales in FY 2020 compared to USD 120 million or 17% of sales in FY 2019.
  • Össur’s liquidity position remains strong. Bank balances and cash equivalents in addition to undrawn credit facilities at the end of 2020 amounted to USD 275 million. NIBD/EBITDA was 4.1x at end of 2020, primarily due to temporarily lower EBITDA in 2020. The current NIBD/EBITDA is above the target ratio of 1.5x-2.5x.
  • Össur completed three acquisitions in Q4 2020 and one in the first week of January 2021 with combined annual sales of USD 38 million.
  • Össur completed the divestment of entities focused on B&S sales in the US at year-end 2020. The sold entities generated USD 20 million of sales in FY 2020.
  • The financial guidance for the full year 2021 is 10-15% organic sales growth, 21-23% EBITDA margin before special items, 3-4% CAPEX of sales, and an effective tax rate of 23-24%.

Q4&FY 2020 conference call details

Össur will host a conference call on 2 February 2021 at 9:00 CET / 8:00 GMT / 3:00 EDT. To participate in the call please dial: Europe: + 45 35 44 55 77, +44 (0) 333 300 0804 or +46 (0) 8 566 426 51, The United States: + 1 631 913 1422, Iceland: +354 800 7437. The PIN CODE to access the call is 95081003#. A webcast can be followed on the Össur website: www.ossur.com/investors.

Further information

Investor Relations, IR@ossur.com, +354 515 1300

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About Össur

Össur (Nasdaq Copenhagen: OSSR) is a global leader in non-invasive orthopedics that help people live a life without limitations. A recognized “Technology Pioneer,” Össur focuses on improving people’s mobility through the delivery of innovative technologies in Prosthetics and Bracing & Supports, by investing significantly in research and product development to create award-winning designs with consistently strong market positions. Successful patient and clinical outcomes are further empowered via Össur’s educational programs and business products.  As part of Össur’s long-standing commitment to social responsibility, the company has been a signatory to the United Nations Global Compact since 2011, and also participates in the Nasdaq Nordic and Baltic exchanges’ voluntary guidelines for Environment, Social and Corporate Governance (ESG). Össur is headquartered in Iceland, with major operations in the Americas, Europe and Asia, and additional distributors worldwide. www.ossur.com

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