Össur hf: Interim report Q3 2019

Announcement no. 62/2019

Interim report Q3 2019

22 October 2019

Highlights

  • Sales growth of 19% in local currency in Q3 2019 and organic sales growth of 5%. Sales growth of 19% in local currency in 9M 2019 and organic sales growth of 7%.
  • The prosthetics segment grew 6% organic and the B&S segment grew 5% organic. Strong growth is attributed to good sales of high-end solutions and recently launched products.
  • Gross profit margin in Q3 2019 was 64%, same as in the comparable quarter last year. Gross profit margin in 9M 2019 was 64% compared to 63% in the comparable period. The increase is driven by positive impact from changes in product mix, savings from the ongoing efficiency initiatives, and scalability in manufacturing.
  • EBITDA margin before special items was 24% in Q3 2019. EBITDA margin before special items and excluding the impact of IFRS 16 was 21% in Q3 2019 compared to 21% in the comparable quarter. EBITDA margin before special items in 9M 2019 was 22% and excluding the impact of IFRS16 was 19% compared to 18% in 9M 2018. Higher EBITDA margin is a result of changes in product mix, savings from the ongoing efficiency initiatives, scalability, and currency movements.
  • Net profit in Q3 2019 amounted to 9% of sales. Net profit in 9M 2019 amounted to 10% of sales and grew by 12%.
  • Cash generated by operations amounted to 29% of sales in Q3 2019 compared to 22% of sales in the comparable quarter last year. Cash generated by operations amounted to 19% of sales in 9M 2019.
  • Össur acquired 1,167,767 of own shares through the ongoing share buyback program for USD 8 million in Q3 2019. In 9M 2019, Össur acquired 3,259,351 of own shares for USD 19 million.
  • In the beginning of Q4 2019, Össur made two acquisitions with combined full-year sales of about USD 13 million.
  • With strong sales growth in the first nine months of the year, the financial guidance range for organic growth has been narrowed to ~6% (previous 5-6%). The financial guidance for the full year 2019 is therefore ~6% organic sales growth, ~23% EBITDA margin before special items*, 4-5% CAPEX of sales, and an effective tax rate of 23-24%.

Jon Sigurdsson, President & CEO, comments:

“Sales growth in the third quarter of the year was strong with a good contribution from both prosthetics and bracing & supports while bearing in mind a strong comparable quarter last year. Growth drivers in the quarter include our high-end solutions in both prosthetics and bracing & supports products and recently launched products such as the new PROPRIO FOOT® which we launched in the beginning of the year. With strong sales growth in the first nine months of the year, we are narrowing our full year guidance for organic growth to ~6% compared to the previous guidance of 5-6%. The profitability of the company is increasing in the first nine months of the year which can be attributed to favorable changes in product mix, additional savings from the ongoing efficiency initiatives, and scalability.”

Q3 2019 conference call details

Össur will host a conference call on 22 October 2019 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 19260853#. A webcast can be followed on the Össur website: www.ossur.com/investors.

Further information

David Hreidarsson, Investor Relations, dhreidarsson@ossur.com, +354 515 1380

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About Össur

Össur (NASDAQ OMX: OSSR) is a global leader in non-invasive orthopaedics that help people live a life without limitations.  Its business is focused on improving people’s mobility through the delivery of innovative technologies within the fields of Prosthetics and Bracing & Supports.  A recognized “Technology Pioneer,” Össur invests significantly in research and product development—its award-winning designs ensuring a consistently strong position in the market.   Successful patient and clinical outcomes are further empowered via Össur’s educational programs and business solutions.  Headquartered in Iceland, Össur has major operations in the Americas, Europe and Asia, with additional distributors worldwide. www.ossur.com