Össur - Progressing on recovery
Q4 revenues of USD 170m (ABGSCe 168m; cons. 172m) Solid FY’21 guidance We expect a slight positive share reaction today Improved product mix Q4’20 saw gradual recovery vs. past quarters, with an organic sales decline of 4% organic. However, the company saw an improved product mix in Q4, as the prosthetics segment grew by 1% organic (cons.
at 1%) while B&S decline by 12% organic, improving the gross margin to 64% (cons. at 63%) vs. 63% in Q4’19.
The Q4 EBITDA margin of 14% vas diluted due to one-off costs related to divestments made in Q4, and would have been 19% adjusted for these (cons. 22%). The company continues to have strong cash flows and sees profitability returning with normalized levels as sale recover, they furthermore announced USD 38m of acquisitions, supporting the case of generating external growth FY’21 EBITDA margin guidance of 23-24% (cons.
at 23%) Guidance for FY’21 looks decent, with organic revenue of 10-15% (cons. 13. 9%) and an EBITDA margin of 23-24% (Cons.
23%) indicating the outlook for 2021 is more uncertain than usual as chages in measures to control COVID in the companys main markets can have significant implications. %) Continued confidence in long-term fundamentals Despit the pandemic, the company continues to see the long-term fundamentals as being unchanged and expect profitability to recover with sales and are currently seeing manufacturing sites gradually increasing operational capacity, indicating an increase in demand. The company furthermore provided some more clarity into the competitive bidding process in the US, which they now expect will impact themnegativly by USD 8-9m (up from USD -6m), while they estimate that the impact on operating profits can be mitigated by up to 50% by securing lower cost components.
