Össur hf: Revised Guidance for 2022 and Preliminary Results for Q2 2022

Announcement no. 42/2022

18 July 2022

Revised guidance for 2022 and preliminary results for Q2 2022

Össur expects organic growth of 4-6% for FY 2022 (previous 6-9%) and EBITDA margin before special items of 18-20% for FY 2022 (previous 20-21%). Currently, management estimates that organic sales growth and EBITDA margin before special items for FY 2022 will be around the middle of the new guidance range. Other guidance parameters remain unchanged.

Össur revises its financial guidance due to lower-than-expected sales and higher-than-expected supply chain cost for FY 2022. Although sales have been strong in many key markets in EMEA and APAC in the first half of the year, sales have been slower than expected in Americas, COVID-19 has impacted sales in China and sales to Russia have been suspended from 24 February 2022 due to the ongoing war. In addition, shortage of certain raw materials and components, primarily for the new Power Knee, adversely affected sales in Q2 2022, as well as FX changes (primarily stronger USD). Furthermore, freight rates and raw material inflation are expected to increase cost of goods sold by USD 15 million on a full-year basis in FY 2022 from pre-pandemic levels in FY 2019, USD 6 million more than was estimated and communicated in the Q4 2021 Interim Report when the guidance for FY 2022 was presented. Thereof, around USD 9 million are estimated in freight cost and around USD 6 million in raw material prices. Össur implemented sales price increases in Q1 2022 and seeks to increase prices further in 2022 and 2023 which are eventually estimated to absorb the before mentioned supply chain cost increases.

Preliminary sales in Q2 2022 amounted to USD 181 million, corresponding to -1% organic growth and 2% growth including acquisitions (local currency growth). Preliminary gross profit in Q2 2022 amounted to USD 111 million or 61% of sales and preliminary EBIT amounted to USD 21 million or 11% of sales. Preliminary EBITDA before special items for Q2 2022 amounted to USD 33 million or 18% of sales.

Preliminary sales in 1H 2022 amounted to USD 351 million, corresponding to 2% organic growth and 5% growth including acquisitions (local currency growth). Preliminary gross profit in 1H 2022 amounted to USD 216 million or 61% of sales and preliminary EBIT amounted to USD 35 million or 10% of sales. Preliminary EBITDA before special items for 1H 2022 amounted to USD 60 million or 17% of sales.

Sveinn Sölvason, President and CEO, comments: "The preliminary results for the second quarter are disappointing. While sales remain strong in many of our key markets, we have experienced unforeseen events and supply chain challenges in the first half of the year which combined, affects our outlook for the full year. We are confident that our market position continues to be strong, and we expect continued organic growth in the remainder of the year.”

Össur will release its Q2 2022 interim report as scheduled on 21 July 2022.

Conference call details

Össur will host a conference call today, 18 July 2022 at 15.00 CEST (13.00 GMT, 9.00 ET), about the revised guidance and preliminary results. The conference call will be conducted in English.

Link to webcast: Össur Webcast

To participate in the conference call, please click on this link: Össur Conference Call

Further information

Edda Lára Lúðvígsdóttir, Investor Relations Director, eludvigsdottir@ossur.com, +354 8444759

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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 2022. Össur operates globally and employs around 4,000 employees. www.ossur.com