Embla Medical posted its second quarter (2Q) results during a conference call on July 23.
Highlights included:
- Sales amounted to (USD) $217 million and organic growth was 6 percent, compared to a strong comparison of 11 percent in 2Q 2023.
- Prosthetics and neuro orthotics sales grew by 6 percent organically, patient care grew by 9 percent, and bracing and supports grew by 2 percent. Growth was attributed to continued strong performance in Europe, the Middle East, and Africa (EMEA). Strong growth was also recorded in Asia-Pacific, while sales in the Americas were soft.
- Gross profit margin was 64 percent, compared to 63 percent in 2Q 2023. The increase in gross profit can partly be ascribed to cost-reduction initiatives in manufacturing implemented during the first quarter as well as positive product mix and scalability.
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $47 million and EBITDA margin was 2 percent for 2Q, compared to 19 percent for the same period last year. Increasing gross profit margin and cost control contributed to increased profitability despite a slight negative currency effect.
- Net profit totaled $20 million and net profit margin was 9 percent of sales, compared to 8 percent of sales in 2Q 2023.
- Free cash flow amounted to $18 million, or 8 percent of sales, compared to 5 percent of sales in 2Q 2023. Free cash flow was strong with solid operating results and increasing profitability.
- Net interest-bearing debt/EBITDA was 3.1x at the end of 2Q approaching the high-end of the target ratio for share buybacks at 2.0-3.0x.
- The guidance for the full-year 2024 has been narrowed to 6-8 percent organic growth (previously 5-8 percent) and EBITDA margin before special items was narrowed to 20 percent (previously 19-20 percent).
Sveinn Sölvason, president and CEO said, “We delivered our highest ever quarterly sales in 2Q 2024 with sales amounting to $217 million. Organic growth was 6 percent for 2Q and local currency growth 9 percent with continued strong momentum in EMEA, driven by a strong performance in prosthetics and neuro orthotics and patient care. In our bracing and supports business growth was more modest for the quarter. Our EBITDA margin came in strong for the quarter at 22 percent, supported by the cost reduction initiatives implemented in manufacturing in addition to a contribution from positive product mix and scalability. Toward the end of the quarter we introduced two new bionic knee products, NAVii by Össur and Icon by College Park, and we are excited about their potential in improving people’s mobility.
“Medicare in the US has finalized a proposal which will create a pathway for K2 amputees, which account for a significant part of the amputee population, to utilize more functional knee and foot solutions than they have historically had access to. This is great news, and we look forward to helping these individuals become more active and able in their daily activities. We are executing well on our Growth’27 strategy. We are narrowing our full-year guidance to 6-8 percent organic sales growth and 20 percent EBITDA margin before special items, as we expect continued good progress for the remainder of the year.”
