Össur reported its interim financial report for the fourth quarter (4Q) and the year-end results for fiscal year (FY) 2022.
Highlights included:
- Sales were $191 million in 4Q; sales growth was 9 percent in local currency and increased by 6 percent organic compared to 11 percent in local currency and 5 percent organic in 4Q 2021.
- Sales were $719 million in FY 2022; sales growth was 7 percent in local currency and increased by 4 percent organic, in line with the guidance for FY 2022.
- Prosthetics sales grew by 7 percent organic, and bracing and supports (B&S) sales increased by 5 percent organic in the last quarter of 2022 compared to 6 percent and 3 percent respectively, for the same period in 2021.
- Prosthetics grew by 4 percent in FY 2022 and B&S by 3 percent.
- Due to the strengthening of the dollar against the euro and other key currencies, reported sales were negatively impacted by $14 million in 4Q 2022 compared to 4Q 2021, which corresponds to about an 8 percent-point negative effect on the reported growth rate.
- The adverse foreign exchange effect on reported sales in FY 2022 totaled $47 million.
- Gross profit margin was 61 percent in 4Q 2022 compared to 64 period from the same period in 2021.
- Gross profit was 61 percent in FY 2022 or 62 percent excluding special items mainly in connection to cost saving initiatives announced previously, compared to 63 percent in FY 2021.
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) before special items totaled $34 million in 4Q 2022, and the EBITDA margin before special items was 18 percent compared to 22 percent in 4Q 2021.
- In FY 2022, EBITDA before special items amounted to $128 million and the EBITDA margin before special items was 18 percent in line with guidance for FY 2022, compared to $149 million and 21 percent 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 4Q 2022 was $13 million or 7 percent of sales compared to $18 million or 9 percent of sales in 4Q 2021.
- Net profit in FY 2022 totaled $43 million compared to $66 million in FY 2021.
- Cash generated by operations was $39 million or 21 percent of sales in 4Q 2022 and $92 million or 13 percent of sales in FY 2022.
- Net interest-bearing debt (NIBD)/EBITDA before special items was 3.2x at the end of 4Q 2022, above the target ratio of 2-3x due to higher net debt in connection to renewals of lease agreements, lower cash generated by operations, and adverse foreign exchange impact. In line with Össur’s capital structure and capital allocation policy, it continues to temporarily pause share buybacks as NIBD/EBITDA before special items is above the target leverage range.
- The financial guidance for 2023 is 4-8 percent organic sales growth, 17-20 percent EBITDA margin before special items, 3-4 percent capital expenditure of sales, and an effective tax rate of 23-24 percent.
“Despite a challenging external environment, we have grown the business in all regions and business segments in 2022,” said Sveinn Sölvason, Össur president and CEO. “We ended the year with a strong quarter of growth driven by prosthetics sales in Americas and [Europe, Middle East, and Africa], and bionic sales were particularly strong…. One of our other highlights…was the acquisition of Naked Prosthetics, which has strengthened our position in upper-limb prosthetics.”
