Announcement no. 63/2018
Interim report Q3 2018
25 October 2018
Highlights
- Organic sales growth of 7% in Q3 2018 and 5% in USD. Organic sales growth of 5% in 9M 2018.
- The prosthetics segment grew 11% organic in Q3 2018 and the B&S segment grew 2% organic. Growth in both business segments can be attributed to strong sales of high-end innovative products.
- Gross profit margin was 64% in Q3 2018 compared to 63% in the comparable quarter. The increase is driven by positive impact from changes in product mix, stable unit cost and savings from the ongoing efficiency initiatives. Gross profit margin in 9M 2018 amounted to 63%.
- EBITDA margin before special items was 21% in Q3 2018, compared to an EBITDA margin before special items of 18% in Q3 2017. EBITDA growth in local currency and before special items amounted to 22% in Q3 2018. The increase in EBITDA margin is driven by a positive impact from changes in product mix, scalability in operations, and savings from the ongoing efficiency initiatives. EBITDA margin before special items in 9M 2018 amounted to 18%.
- Net profit grew by 43% in Q3 2018 and amounted to 11% of sales. Growth in diluted EPS amounted to 44% in Q3 2018. Net profit grew by 33% in 9M 2018 and amounted to 10% of sales.
- Cash generated by operations was strong in Q3 2018 and amounted to 22% of sales compared to 16% of sales in Q3 2017. Cash generated by operations amounted to 14% of sales in 9M 2018.
- Guidance for capital expenditures has been updated due to various investments made in relation to the ongoing efficiency initiatives. Other guidance parameters remain unchanged. The financial guidance for the full year 2018 is 4-5% organic sales growth, ~19% EBITDA margin before special items, ~5% CAPEX of sales (previous ~4%), and an effective tax rate in the range of 23-24%.
- Össur recently made two acquisitions with combined full-year sales of about USD 40 million. The acquisitions had no impact on operating income in Q3 2018 but will have an impact in Q4 2018.
- As part of the share buyback program, Össur acquired 1,006,399 of own shares for approx. USD 5 million in Q3 2018. In 9M 2018, Össur acquired 4,437,862 of own shares for approx. USD 21 million.
Jon Sigurdsson, President & CEO, comments:
"We are pleased to deliver a strong quarter in terms of sales growth and profitability. Sales growth in the quarter was driven by the prosthetics segment, which grew 11%, and our high-end products continue to perform well in both business segments. Additionally, growth in countries classified as emerging markets was strong in both business segments. Profitability is increasing in line with our plans, driven by scalability from strong sales growth, positive changes in product mix, and our ongoing efficiency initiatives. In line with the operating results, we also have a strong cash generation in the quarter."
Q3 2018 conference call details
Össur will host a conference call on Thursday 25 October 2018 at 11:00 CET / 9:00 GMT / 5:00 EDT. To participate in the call please dial: Europe: + 45 3544 5580, +44 (0) 203 364 5374 or +46 (0) 8 505 564 74, The United States: + 1 855 753 2230, Iceland: +354 800 7417. A webcast can be followed on the Össur website: www.ossur.com/investors.
Further information
David Hreidarsson, Investor Relations, dhreidarsson@ossur.com, +354 515 1380
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About Össur
Össur (NASDAQ OMX: OSSR) is a global leader in non-invasive orthopaedics that help people live a life without limitations. Its business is focused on improving people's mobility through the delivery of innovative technologies within the fields of Prosthetics and Bracing & Supports. A recognized "Technology Pioneer," Össur invests significantly in research and product development-its award-winning designs ensuring a consistently strong position in the market. Successful patient and clinical outcomes are further empowered via Össur's educational programs and business solutions. Headquartered in Iceland, Össur has major operations in the Americas, Europe and Asia, with additional distributors worldwide. www.ossur.com
