Össur hf: Interim Report Q2 2022

Announcement no. 44/2022

Interim Report Q2 2022

21 July 2022

Sveinn Sölvason, President and CEO, Comments:

“The macro environment remains volatile, with external factors affecting sales and supply chain challenges driving higher cost and delays in delivery of products. However, sales growth continues to be strong in EMEA and APAC with the exception of China. We are very pleased with how the Power Knee has been received in the market and are optimistic about the potential of powered prosthetics. While managing through this volatile environment that is impacting our operational cost, our focus remains on providing innovative mobility solutions to more individuals.”

Highlights Q2 2022

• Sales amounted to USD 181 million. Sales growth was 2% in local currency and declined by 1% organic. In 1H 2022, sales amounted to USD 351 million, sales growth was 5% in local currency and increased by 2% organic.
• Prosthetics declined by 1% organic and Bracing & Supports (B&S) also declined by 1% organic. Prosthetics grew by 2% in 1H 2022 and B&S by 2%.
• Sales growth was negatively impacted by USD 12 million due to currency movements in Q2 2022 compared to Q2 2021, which corresponds to about a 6%-point negative effect on the reported growth rate.
• Gross profit margin was 61% in Q2 2022 compared to 63% in Q2 2021. Supply chain cost increases 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, compared to an increase of USD 10 million in FY 2021. Gross profit was 61% in 1H 2022 compared to 64% in 1H 2021. Össur implemented sales price increases in Q1 2022 and seeks to increase prices further in 2022 and 2023.
• EBITDA amounted to USD 33 million in Q2 2022, and the EBITDA margin was 18% compared to 22% in Q2 2021.
• Net profit in Q2 2022 amounted to USD 14 million or 8% of sales compared to USD 19 million or 10% of sales in Q2 2021. Net profit in 1H 2022 amounted to USD 24 million compared to USD 31 million in 1H 2021.
• Cash generated by operations amounted to USD 17 million or 10% of sales in Q2 2022 and amounted to USD 31 million or 9% of sales in 1H 2022.
• NIBD/EBITDA was 2.7x at the end of Q2 2022, within the target ratio of 2.0x-3.0x.
• The financial guidance for the full year has been revised as per announcement no. 42/2022 on 18 July 2022. The financial guidance for the full year 2022 is 4-6% organic sales growth (previous 6-9%), 18-20% EBITDA margin before special items (previous 20-21%), 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 around the middle of the new guidance range.

Q2 2022 conference call details

Össur will host a conference call on 21 July 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