Össur, Reykjavik, Iceland, announced its financial results for fourth quarter (Q4) 2019 and fiscal year (FY) 2019. Financial amounts, unless otherwise noted, are in US dollars.
Highlights include:
· Sales growth of 10 percent in local currency in Q4 2019 and organic sales growth of 1 percent. Sales growth of 16 percent in local currency for FY 2019 and organic sales growth of 5 percent.
· Both the prosthetics segment and the bracing and supports (B&S) segment grew 1 percent organic in Q4 2019. Organic growth for FY 2019 was 7 percent for prosthetics and 3 percent for B&S. Strong organic growth in 2019 is attributed to good sales of high‐end products, recently launched products, and strong sales in the emerging markets.
· Gross profit margin in Q4 2019 was 63 percent. Gross profit margin for FY 2019 was 64 percent compared to 63 percent for FY 2018. The increase is driven by positive impact from changes in product mix, savings from the ongoing efficiency initiatives, and scalability in manufacturing.
· The earnings before interest, taxes, depreciation, and amortization (EBITDA) margin before special items was 21 percent in Q4 2019. Excluding the impact of International Financial Reporting Standards (IFRS) 16, it was 18 percent.
· EBITDA margin before special items for FY 2019 was 22 percent. Excluding the impact of IFRS 16, it was 19 percent compared to 19 percent for FY 2018. Profitability was positively impacted by change in product mix and savings from the ongoing efficiency initiatives, however profitability was impacted by acquisitions and investments in emerging markets. Net profit in Q4 2019 and FY 2019 was 10 percent of sales.
· Cash generated by operations was 13 percent of sales in Q4 2019. Cash generated by operations was 17 percent of sales for FY 2019 compared to 15 percent of sales for FY 2018.
· Össur acquired 1,525,437 of its own shares through the ongoing share buyback program for $11 million in Q4 2019. For FY 2019, Össur acquired 4,784,631 of its own shares for $30 million.
· Össur made three acquisitions with combined full‐year sales of about $20 million in FY 2019.
· The financial guidance for the full year 2020 is 3‐5 percent organic sales growth, 21‐23 percent EBITDA margin before special items, 4‐5 percent capital expenditure (CAPEX) of sales, and an effective tax rate of 23‐24 percent.
“The results for the full year are strong with growth of 16 percent in local currency and 5 percent organic growth,” said Jon Sigurdsson, president and CEO. “Growth drivers include our high‐end products in both prosthetics and bracing and supports, including recently launched products…. We furthermore made good progress with our external growth strategy by acquiring three companies during the year in addition to signing an agreement to acquire the prosthetics manufacturer College Park Industries. Despite the temporary slowdown in prosthetics sales in the fourth quarter, we are confident that our market position continues to be strong, and we expect continued organic growth and increasing profitability in 2020.”
