Össur: FY’22 guidance downgrade - ABG

As pre-announced, Q2 sales weaker than expected FY’22 revenue/EBITDA guidance downgraded Fair value range reiterated at DKK 26-56 Weak US/APAC and negative FX impact lower Q2 top line

The company pre-announced Q2 numbers on Monday 18 July as part of its FY’22 guidance downgrade. Q2 was weak, with revenues of USD 181m (-7% vs. ABGSC at 194m and -6% vs. company-collected cons. of 193m), gross profit of USD 111m (-9% vs. ABGSC at 122m and -8% vs. cons. of 121m) and EBITDA of USD 33m (-15% vs. ABGSC at 39m and -18% vs. cons. of 40m). Sales were weak in both segments, each with negative organic sales growth of 1% in Q2, predominately driven by falling sales on the North American market (-4% organic sales decline) and APAC (mainly China) (-3% organic sales decline), while EMEA was up 3% organically. FX had a negative impact of -6% on the group level (due to stronger USD/EUR). Overall, we expect that at current FX levels, all else equal, the EBITDA margin will be lowered by 50bp in FY’22.

Continued high costs/weak Q2 drive guidance downgrade FY'22 guidance was downgraded (on 18 July) to organic growth of 4-6% (ABGSCe 4.7%, company-collected cons 6.2%) (previous 6-9%) and an EBITDA margin before special items of 18-20% (ABGSCe 19.2%, cons. 19.9%) for FY 2022 (previous 20-21%). The revision to its financial guidance is due to lower-than-expected sales and higher-than-expected supply chain costs for FY 2022. The company furthermore confirmed that it is currently trending towards the middle of the range, with guidance assuming a limited COVID impact in H2’22 (mainly China-related) and that especially the North American market will drive growth in H2’22.

Uncertainty persists in the short-term While we see no changes to the long-term fundamental case, we continue to see short-term volatility, driven by the uncertainty around 1) COVID, 2) Component sourcing, 3) Staffing shortages and 4) Costs. We update our estimates to reflect the new guidance and reiterate our scenario-based fair va ... Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ossur/Equity-research/2022/7/ossur---fy22-guidance-downgrade2/