Össur: Soft FY'23 guidance - ABG

FY'23 guidance indicates slow margin pick-up
CMD in March should confirm intact LT outlook
Fair value range of DKK 24-54 reiterated


Margin pick-up is likely overestimated by consensus

Q4'22 saw solid sales, coming in at USD 191m (-1% vs. ABGSCe and +4% vs. company-collected consensus), primarily driven by strong bionic sales (accounted for 25% of prosthetic component sales vs. 23% in Q4'21) and good organic growth in Americas (6%) and EMEA (7%). However, margins disappointed, with an EBITDA margin of 18% vs. cons. of 20%, due to continued cost pressure. Looking at FY'23, the company guides for organic sales growth of 4-8% (ABGSCe 5%, cons. 5.3%) and an EBITDA margin of 17-20% (ABGSCe 18.3%, cons. 19.3%). The organic growth guidance range assumes a solid underlying market growth of 2-5% and tailwinds from expected price increases (ABGSCe 2-4% at group level) to be implemented during FY'23. However, the price increases for FY'23 range from zero to inflation-related price increases, which at group level indicates that the company will not be able to fully pass on cost increases/inflation. This is reflected in the FY'23 EBITDA margin guidance range, which is softer than the latest EBITDA margin guidance from FY'22 (18-20%).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ossur/Equity-research/2023/1/ossur---soft-fy23-guidance/