Össur hf: Interim Report Q4 & FY 2022

Announcement no. 02/2023

Interim report Q4 & FY 2022

31 January 2023

Sveinn Sölvason, President and CEO, Comments:

“Sales amounted to 191 million and the EBITDA margin before special items was 18% in Q4 2022. Despite a challenging external environment, we have grown the business in all regions and business segments in 2022. We ended the year with a strong quarter of growth driven by prosthetics sales in Americas and EMEA, and bionic sales were particularly strong. As we remain focused on growth and innovation, we successfully launched our Power Knee, the first motor powered prosthetic knee, in all our regions this year. We are very pleased with how positively it has been received and are excited about the potential of powered prosthetics. One of our other highlights this year was the acquisition of Naked Prosthetics, a leading provider of prostheses for finger and partial hand amputees which has strengthened our position in upper limb prosthetics. I sincerely want to thank our employees and customers for the collaboration over the past year. We are looking ahead with optimism and are fueled by our dedication to improve people’s mobility.”

Highlights Q4 and FY 2022

• Sales amounted to USD 191 million in Q4 2022. Sales growth was 9% in local currency and increased by 6% organic compared to 11% in local currency and 5% organic in Q4 2021. Sales amounted to USD 719 million in FY 2022, sales growth was 7% in local currency and increased by 4% organic, in line with the guidance for FY 2022.
• Prosthetics sales grew by 7% organic and Bracing & Supports (B&S) sales increased by 5% organic in Q4 2022 compared to 6% and 3% respectively, in Q4 2021. Prosthetics grew by 4% in FY 2022 and B&S by 3%.
• Due to the strengthening of the USD against the EUR and other key currencies, reported sales were negatively impacted by USD 14 million in Q4 2022 compared to Q4 2021, which corresponds to about an 8%-point negative effect on the reported growth rate. The adverse FX effect on reported sales in FY 2022 amounted to USD 47 million.
• Gross profit margin was 61% in Q4 2022 compared to 64% in Q4 2021. Gross profit was 61% in FY 2022 or 62% excluding special items mainly in connection to the cost saving initiatives announced last quarter, compared to 63% in FY 2021.
• EBITDA before special items amounted to USD 34 million in Q4 2022, and the EBITDA margin before special items was 18% compared to 22% in Q4 2021. In FY 2022, EBITDA before special items amounted to USD 128 million and the EBITDA margin before special items was 18% in line with guidance for FY 2022, compared to USD 149 million and 21% in FY 2021. The EBITDA margin before special items in 2022 was mainly affected by temporary high supply chain and manufacturing cost.
• Net profit in Q4 2022 amounted to USD 13 million or 7% of sales compared to USD 18 million or 9% of sales in Q4 2021. Net profit in FY 2022 amounted to USD 43 million compared to USD 66 million in FY 2021.
• Cash generated by operations amounted to USD 39 million or 21% of sales in Q4 2022 and amounted to USD 92 million or 13% of sales in FY 2022.
• NIBD/EBITDA before special items was 3.2x at the end of Q4 2022, above the target ratio of 2.0-3.0x due to higher net debt in connection to renewals of lease agreements, lower cash generated by operations and adverse FX impact. In line with Össur’s Capital Structure and Capital Allocation Policy, Össur continues to temporarily pause share buybacks as NIBD/EBITDA before special items is above the target leverage range.
• The financial guidance for the full year 2023 is 4-8% organic sales growth, 17-20% EBITDA margin before special items, 3-4% CAPEX of sales, and an effective tax rate of 23-24%.

Q4 and FY 2022 conference call details

Össur will host a conference call on 31 January 2023 at 9:00 CET / 8:00 GMT / 3:00 ET. To participate in the call, please click on this link: Össur Conference Call

A webcast can be followed on the Össur website: http://www.ossur.com/investors

Further information

Edda Lára Lúðvígsdóttir, Investor Relations Director, [email protected], +354 844 4759

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About Össur

Össur (Nasdaq Copenhagen: OSSR) is a leading global provider of innovative mobility solutions that help people live a Life Without Limitations®. For over 50 years, Össur has had a strong purpose rooted in positively impacting people’s health and well-being. A recognized “Technology Pioneer”, Össur focuses on improving people’s mobility through the delivery of solutions that advance patient care. Significant investment in research and development has led to over 2,000 patents, award-winning designs, successful clinical outcomes, and steady growth. Össur is committed to sustainable business practices and is signatory to the UN Global Compact, UN Women’s Empowerment Principles, and contributes to the UN Sustainable Development Goals. Össur operates globally and has around 4,000 employees. www.ossur.com