Össur hf: Interim report Q2 2020

Announcement no. 32/2020

Interim report Q2 2020

23 July 2020

Highlights

  • Sales declined by 23% in local currency in Q2 2020 and by 26% organic. Sales declined by 13% in local currency in 1H 2020 and by 16% organic. Sales were impacted in most markets in line with measures to control the COVID-19 pandemic.
  • The prosthetics segment declined by 21% organic and the B&S declined by 32% organic in Q2 2020. The prosthetics segment declined by 13% in 1H 2020 organic and the B&S segment declined by 20%.
  • Gross profit margin was 58% in Q2 2020 and 60% in 1H 2020. EBITDA margin was 9% in Q2 2020 and 12% in 1H 2020. Profitability is lower than in the comparable period last year, mainly due to lower sales in relation to COVID-19. Profitability is expected to normalize as sales continue to recover.
  • Net loss in Q2 2020 amounted to USD 18 million and net loss in 1H 2020 amounted to USD 11 million. The loss is due to lower sales in addition to impairment charges and costs in relation to the potential divestment of Gibaud.
  • Cash generated by operations was strong and amounted to USD 29 million or 22% of sales in Q2 2020 and amounted to USD 60 million or 21% of sales in 1H 2020.
  • Össur’s liquidity position remains strong where bank balances and cash equivalents amounted to USD 149 million at the end of the quarter in addition to committed credit facilities of USD 133 million.
  • The share capital of Össur is now ISK 423,000,000 nominal value as 2,377,804 of own shares with nominal value of ISK 1 each were cancelled at the end of May 2020.
  • The acquisition of the prosthetics manufacturer College Park Industries was completed on June 1. College Park’s FY2019 pro-forma sales amounted to USD 20 million.
  • Össur entered exclusive negotiation in relation to the potential divestment of Gibaud in France on July 13. Gibaud’s sales amounted to USD 51 million in 2019. Closing is subject to consultation with the employee representative bodies of Gibaud and Innothera is expected to close in the second half of 2020.

Jon Sigurdsson, President & CEO, comments:

“Sales in the second quarter were significantly impacted by the COVID-19 pandemic as it resulted in a negative short-term impact on demand for prosthetics and bracing & supports products. Since the beginning of April, Össur’s sales have continued to gradually recover in all our major markets. Even though we are on a clear path towards recovery, it remains uncertain how long the impact of COVID-19 will last. We are however confident that there will be no long-term change in the demand for our products and services. We continue to manage our variable costs and were able to reduce our operating costs temporarily in the quarter. We recently completed the acquisition of the prosthetics manufacturer College Park Industries and entered into exclusive negotiations regarding the potential divestment of Gibaud in France.”

Q2 2020 conference call details

Össur will host a conference call on 23rd of July 2020 at 9:00 CET / 7:00 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 52599633#. A webcast can be followed on the Össur website: www.ossur.com/investors.

Further information

David Hreidarsson, Investor Relations Manager, dhreidarsson@ossur.com, +354 661 8225

Helga Daníelsdóttir, Investor Relations Analyst, hdanielsdottir@ossur.com, +354 766 4959

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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