Össur: Lifting growth and margins in 2024 - ABG

Ossur reported strong growth and weak margins in Q4
New Medicare reimbursement could have substantial positive impact
We narrow fair value range to DKK 25-37


The Q4

Ossur delivered very healthy 9% organic growth in Q4 for revenues of USD 210m (-3% vs. ABGSC; +5% vs. Cons). Gross margin was bang in line with our estimate, but undershot consensus by 120bp as Ossur continues to struggle rightsizing its production unit costs. EBITDA (pre-items) came in at USD 37m (-16% vs. ABGSC; +6% vs. Cons). Growth was driven by the "right" segment i.e. the Prosthetics business (9% organic) with Ossur benefiting from strong volume growth, positive product mix and price hikes. Bionics was 24% of Prosthetics sales (FY'23 25%). Ossur ended the year with a strong USD 46m in cash flow from operations as inventories have finally started to move positively. Net debt was USD 395m for 2.8x net debt/EBITDA.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ossur/Equity-research/2024/1/ossur---lifting-growth-and-margins-in-2024-/