Announcement no. 3/2024

Interim report Q4 2023

30 January 2024

Sveinn Sölvason, President and CEO, Comments:

"I'm very pleased to end the year on a solid quarter with organic growth of 9%, driven by continued strong performance in Prosthetics and Patient Care. Organic growth for the full year was 9% and in 2023 we have grown the business in all regions and business segments. We reached a major milestone in our journey to become an increasingly patient focused company, addressing chronic mobility challenges in a broader context, by acquiring FIOR & GENTZ in January 2024. With the acquisition we are entering the new but highly complementary product segment of lower limb neuro orthotics addressing the needs of patients with gait impairment due to neurological conditions. We look forward to continuing executing on our Growth'27 strategy in 2024 and reach even more patients across the world."

Financial Performance Q4 2023

  • Sales grew by 10% and amounted to USD 210 million and organic growth was 9%. In FY 2023, sales amounted to USD 786 million and organic growth was 9%.
  • Prosthetics sales grew by 9% organic, Bracing & Supports (B&S) sales grew by 1% organic and Patient Care sales grew by 12% organic. In FY 2023, Prosthetics sales grew by 13% organic, Bracing & Supports sales grew by 3% organic and Patient Care sales grew by 8% organic. Growth is attributed to strong volume growth and positive product mix with a strong performance in our high-end solutions, in addition to some price increases.
  • Gross profit was USD 129 million and gross profit margin was 61% compared to 61% in Q4 2022. In FY 2023, gross profit margin was 62% compared to 62% excluding special items in FY 2022. The gross profit margin was positively impacted by strong sales growth, favorable product mix, and lower freight cost but is adversely impacted by higher unit cost in manufacturing and time-lag in reimbursement.
  • EBITDA grew by 12% and amounted to USD 37 million with an EBITDA margin of 18% of sales, unchanged compared to Q4 2022. In FY 2023, EBITDA margin was 18% of sales, unchanged from FY 2022. In addition to the items mentioned impacting gross profit, EBITDA was positively impacted by operational efficiency and savings from streamlining announced in the fall of 2022 but adversely impacted by FX and inflationary cost increases in SG&A expenses.
  • Net profit grew by 49% and was USD 19 million with net profit margin of 9% of sales compared to 7% of sales in Q4 2022. In FY 2023, net profit grew by 36% and the net profit margin was 7% of sales compared to 6% of sales in FY 2022.
  • Free cash flow was strong and amounted to USD 26 million or 13% of sales compared to 9% of sales in Q4 2022. In FY 2023, free cash flow amounted to 7% of sales compared to 5% of sales in FY 2022.
  • NIBD/EBITDA before special items was 2.8x at the end of Q4 2023, within the target ratio of 2.0-3.0x.

Other highlights

  • Össur announced and closed the acquisition of FIOR & GENTZ on 16 January 2024. FIOR & GENTZ develops and distributes knee and ankle orthotic joints to create custom-made orthotics for patients with gait impairment due to neurological conditions.
  • On 18 January 2024, Medicare published a draft proposal that would give K2 patients access to prosthetic knees and feet previously restricted to K3-K4 patients. The proposal represents a potentially significant shift in Medicare coverage, potentially opening access to high-quality mobility solutions to a larger part of the amputee population. Effective date is unknown.

2024 outlook

  • Organic sales growth guidance is 5-8%, expected to be driven by continued strong volume growth and moderate price increases.
  • EBITDA margin before special items guidance is 19-20%, expected to be driven by favorable product mix, increased efficiency in manufacturing and scalability.

Conference call details

Össur will host a conference call on 30 January 2024 at 9:00 CET / 8:00 GMT / 4:00 ET. A conference call webcast can be accessed here: Össur Conference Call Webcast.

To actively participate in the Q&A session of the call please click on this link: Register here.

Further information

David Hreidarsson, VP of Investor Relations, IR@ossur.com, +354 661 8225

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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

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