Össur: Q2 likely to be uneventful - ABG

- Q2 likely a solid but uneventful quarter
- ......with consensus leaning towards an upgrade to sales guidance
- Fair value range reiterated and limited estimate changes

ABGSCe Q2 sales of USD 197m, -1% vs. consensus
Going into the Q2 report, we know that there will be few strategic updates, as we had a thorough CMD in the spring, with the focus now being on execution on its Growth '27 strategy. However, we expect the quarter to be solid, with total sales growth of 9% (company-collected consensus 10.3%), supported by this year's price increases (as seen in Q1'23) and the fact that the supply chain challenges are easing somewhat. Productivity and costs are also normalizing, and the company expects a ~USD 6-7m decline in freight costs in FY'23 vs. FY'22.

Consensus FY'23 organic growth of 7.8%, guidance of 4-8%
Following the strong start to the year (9% organic growth in Q1), consensus has come up and now expects FY'23 organic sales growth of 7.8% (ABGSCe 7.4%), just shy of the high end of the current guidance of 4-8%. While we expect that the company will perform well in Q2, we note that an upgrade to guidance is not a given, as Q2 will likely have some positive effects from, e.g., the launch of the waterproof Proprio foot (April '23), and there are other product launches in H2, so the company will likely wait for those before reassessing the guidance.

Gearing to remain high - but scenario intact
Overall, the underlying fundamentals remain solid and the strategic execution is going ahead. We reiterate our fair value range of DKK 24-54, only changing our estimates slightly to reflect the continued high gearing (at the end of Q1, NIBD/EBITDA before special items was 3.2x, above the target of 2.0‐ 3.0x.), so we have increased the financial expenses for FY'23e.Läs mer på ABG Sundal Collier.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ossur/Equity-research/2023/7/ossur---q2-likely-to-be-uneventful/