Carnegie Healthcare Seminar

Transcription

1 Carnegie Healthcare Seminar Sveinn Sölvason, CFO 15 March, 2018

2 A global leader in non-invasive orthopaedics Global medical device company Prosthetics and Bracing & Supports Operations in more than 25 countries Over 3,000 employees across the globe Innovation driven ~5% of sales invested in R&D Over 1,300 patents New product launches every year Profitable growth Organic and acquisitive sales growth USD 569 million in sales with 21% CAGR since % average historical 5Y EBITDA margin Shareholders Listed on Nasdaq in Copenhagen Market capitalization of ~2 billion USD Largest shareholder William Demant Invest A/S 1

3 With our well diversified global operations we are able to serve our customers locally 44% Americas California USA 3Y avg organic growth: +3% HQ Reykjavik Iceland ~450 FTEs ~1,200 FTEs EMEA Eindhoven Netherlands 3Y avg organic growth: +6% ~1,200 FTEs 49% APAC Shanghai China 3Y avg organic growth: +6% ~150 FTEs 7% Note: Percentage split indicates sales split between regions in 2017 Historical organic growth rates are calculated as an average of organic growth rates from

4 The path to value creation lies in our business model 1. Overview Segments Products Market 2. Strategy Growth Innovation Efficiency 3. Value creation Sales Profitability Cash flow 3

5 Equally diversified into two synergistic business segments Bracing & supports Prosthetics 50% of total sales 50% of total sales Sub-segment User profile Improving mobility Sub-segment User profile Improving mobility Injury solutions People recovering from fractures, ligament injuries or need a post operative treatment Products stabilizing joints and improving healing Mechanical products People living with lower extremity amputation Broad product offering for lower extremity prosthetics OA solutions People living with Osteoarthritis (OA) Non surgical treatment by unloading affected joint with braces Bionic products People living with lower and upper extremity amputation Advanced microprocessor controlled feet, knees, hands and fingers 4

6 Össur is the second largest player worldwide in both business segments Market size Market share Market growth Primary sales channel Bracing & supports USD billion Various smaller players 6-8% #2 3-5% Volume growth Moderate pricing pressure Hospitals Orthopaedic clinics O&P clinics 2 Positive product mix 1 Prosthetics Various smaller players 3-5% USD billion % #2 Moderate volume growth Relatively stable pricing O&P clinics 2 Positive product mix 1 Source: Össur management estimates Note: Estimates only account for component sales from providers to suppliers, i.e. not clinical services 1. Increased penetration of high-end innovative products 2. Orthotic & Prosthetic clinics 5

7 Össur s vision is to maintain a leading position in non-invasive orthopaedics MAIN FOCUS AREAS Maintain sustainable growth Technology trade-up Conduct business efficiently 6

8 We provide high-end innovative solutions to our users and enable value creation for healthcare systems Indication based innovation Acquisitions Technology trade-up Geographic expansion GROWTH High-end innovative products Expanding in the value chain Customer value creation 7

9 From simple prosthetics to powered, intelligent and energy efficient bionic solutions Technology trade-up Bionic feet and knee solution Mindcontrolled prosthetics $ 36,000 Bionic feet solution $ 9,000 Mechanical feet solution $ 2,000 Cosmetic feet solution $ 70 Note: Manufacturer sales price indicators in USD 8

10 New generation of products will focus on the seamless integration of technology and human function Wearable bionic brace capable of providing assistance and improving quality of life The goal is to have all Össur bionic devices mind-control compatible 9

11 We continuously seek ways to optimize our operations with the objective to increase efficiency in global service offerings Prosthetics B&S B&S (outsourced) COGS 38% S&M 33% G&A 11% R&D 5% Scalability High Scalability Medium Scalability High Scalability Low Note: Percentages are expense categories as % of total sales 10

12 USD million Össur has grown with a combination of organic development and acquisitions Organic Acquired Note: Chart is an approximation for split between organic and acquired sales 11

13 USD million Össur has a history of underlying margin improvements but overall margin diluted by acquisitions and currency headwind Reported EBITDA and EBITDA margins Strong underlying operational improvement USD million % EBITDA (adj.*) % of sales 20.5% 18.9% % % * Before special items 12

14 USD million USD million USD million With a strong cash flow generation and capital structure, Össur began returning capital to shareholders via buybacks and dividends in Free cash flow 200% % 100% 50% 0% FCF was 77% of EBIT In Net interest-bearing debt 8.0 x 6.0 x 4.0 x 2.0 x 0.0 x Target x NIBD/EBITDA Share buybacks Dividends Share buybacks and dividends Total of USD 142 million since 2013 Note: Free cash flow shown as to firm and calculated as cash generated by operations less capital expenditures and taxes 13

15 Our strategy supports our long-term ambitions Technology trade-up Indication based innovation New technologies Organic development Acquisitions Customer value creation Product mix Economies of scale Efficiency initiatives Goal is to grow above the market and increase profitability 14

16 Forward-looking statement This presentation contains forward-looking statements, which reflect the Management s current views with respect to certain future events and financial performance. Although the statements are based upon estimates the Management believes to be reasonable, there is no assurance that these statements will be achieved. ÖSSUR. 09-Mar- 18 Statements containing the financial outlook for 2018 and the following years naturally involve risks and uncertainties, and consequently actual results will differ, and may differ materially, from those projected or implied in the forward-looking statements. The risks and uncertainties may include unexpected developments in the international currency exchange and securities markets, financing, market driven price decreases for Össur s products, delay or failure of development products, production problems and unexpected cost increases, development of new technologies by competitors, the introduction of competing products within Össur s core areas, exposure to product liability and other lawsuits, changes in reimbursement rules and governmental laws. 15