Össur, Reykjavík, Iceland, released its first quarter (1Q) 2016 financial results on April 27. Net profit was US $9 million or 8 percent of sales, similar as to what was reported in 1Q 2015.* Sales were US $114 million compared to US $114 million in 1Q 2015, corresponding to 3 percent growth measured in local currency (LCY).* Earnings before interest, taxes, depreciation, and amortization (EBITDA) were US $19 million or 16 percent of sales, compared to US $21 million or 18 percent of sales in 1Q 2015. Cash generated by operations was US $16 million or 14 percent of sales, compared to US $7 million or 6 percent of sales in 1Q 2015.
Highlights for the quarter include the following:
- Dividends of DKK 0.12 (Danish Krone) per share, corresponding to about 16 percent of the company’s net profit in 2015, were paid at the end of March.
- Registration of the share capital reduction of 3,292,688 shares with a nominal value of ISK 1 (Icelandic Krona) each was completed on March 21.
- On April 11 Össur acquired Touch Bionics, Livingston, Scotland, for US $39 million on a cash and debt-free basis.
- Össur acquired 1,915,432 of its own shares in 1Q 2016 for US $6.4 million. The acquisition of Touch Bionics will not affect Össur’s share buyback program.
“The sales growth in the quarter is in line with expectations,” said Jon Sigurdsson, president and CEO. “The first quarter of the year is seasonally our weakest quarter. Americas had strong growth in both business segments where our newly launched Pro-Flex® was well received and contributed to the growth. We experienced a temporary slowdown in EMEA [Europe, the Middle East, and Africa] but expect to be back on track for the remainder of the year. Our product pipeline is strong and newly launched products have been performing well. In April, we entered the upper-limb prosthetics market with the acquisition of Touch Bionics, which is a leader in the field. With this acquisition we can now offer a complete bionic portfolio to our customers.”
The financial guidance for the full year of 2016 is unchanged. Sales growth LCY has been added to the guidance following the acquisition of Touch Bionics.
- Sales growth LCY of 7-9 percent
- Organic sales growth LCY of 3-5 percent
- EBITDA margin of 20-21 percent of sales
- Capital expenditures of 3-4 percent of sales
- Effective tax rate around 26 percent
*Editor’s note: Although not stated by the company, it appears that these 1Q 2016/1Q 2015 dollar amounts are the same but the percentages differ due to the strengthening of the U.S. dollar.
