Össur hf. Q4&FY 2017 Investor Presentation

Transcription

1 Össur hf. Q4&FY 2017 Investor Presentation Jon Sigurdsson, President & CEO Sveinn Solvason, CFO 6 February 2018

2 Forward looking statements 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. 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. 1

3 1. FY 2017 highlights 2. Q4 review 3. Guidance for Appendix 2

4 FY 2017 Highlights Sales EBITDA* 2017 Highlights USD million FY '16 FY '17 9% growth in USD 8% growth in LCY 5% organic growth USD million FY '16 FY '17 5% EBITDA growth in USD 10% EBITDA growth in LCY EBITDA% 18% vs. 19% in 2016 GPM 62% vs. 63% in 2016 Good performance in Prosthetics with growth above estimated market growth Slow year for B&S with operational challenges in distribution companies impacting B&S growth negatively by 140 bps, whereas direct sales continue to grow FX impacted profitability negatively by ~70 bps Touch and Medi successfully integrated US and France tax changes resulting in lower tax rate Note: Amounts are in USD and all growth numbers refer to year-on-year growth and measured in LCY unless otherwise stated * Before special items 3

5 Good momentum in our strategic focus areas during the year Numerous high-end products developed in both prosthetics and bracing & supports Partnership with IUVO/COMAU to develop wearable bionic bracing Over 100 patents granted Over 30 collaborative research studies ongoing 16 peer reviewed publications by Össur research partners 5% organic sales growth Over 40 new product solutions introduced to the market High-end innovative products such as RHEO KNEE and Unloader One performed excellent during the year Touch Bionics and Medi Prosthetics now a full part of Össur s global prosthetic offering Good progress with direct sales model in China Successful integration of Medi Prosthetics and Touch Bionics Efficiency initiatives launched in September 2017 progressing well Preparations begun to move part of the feet manufacturing and assembly from Iceland to Mexico manufacturing plant West Coast distribution center in the US to be moved to Mexico manufacturing plant in 2018 Restructuring of own distribution companies finalized by year-end

6 FY 2017 growth bridge Sales contribution in USD million 2017 highlights USD 569 million in sales vs. USD 521 million in 2016 corresponding to 9% growth LCY growth of 8% and 5% organic growth Growth contribution Organic LCY USD +4% +1% +5% +3% +8% +1% +9% Good performance in Prosthetics in 2017 with growth above estimated market growth Slow 2017 for B&S with operational challenges in distribution companies, whereas direct sales continue to grow Currency positively impacting sales growth in the year Note: Bridge is an approximation for growth contribution and figures in bridge are rounded to million 5

7 Profit & Loss FY 2017 Financial results USD million FY '17 FY '16 Net Sales LCY growth 8% 9% Organic growth 5% 4% Gross Profit % of sales 62% 63% EBITDA % of sales 17% 18% EBITDA (adj.) % of sales 18% 19% EBIT % of sales 13% 14% Net Profit % of sales 10% 10% 6

8 FY EBITDA bridge EBITDA margin bridge Item USDm Comments z EBITDA Δ GP +26 Δ S&M -11 Δ R&D -4 Δ G&A -3 Δ FX -3 EBITDA % LCY / 5% organic sales growth Positive product mix Cost increases in certain smaller manufacturing locations 6% LCY / 3% organic growth Investment in EMEA and emerging markets Integration synergies 18% LCY / 12% organic growth Acquisitions and investments in R&D 6% LCY / 4% organic growth Scalability and synergies Negative ~70 bps impact from FX on EBITDA margin (net of hedge) Note: Operational expenses delta profitability impact refers to year-on-year changes and measured in LCY. EBITDA (adjusted) in the graph above refers to EBITDA before special items. EBITDA was adjusted in 2017 for USD 5.6 million in total, USD 3.0 million due to the efficiency initiatives announced on September 25, 2017 and 2.6 million due to the Medi Prosthetics acquisition EBITDA was adjusted in 2016 for USD 4.6 million in total, USD 2.3 million due to the Touch Bionics acquisition, USD 1.5 million Share Service Center in Poland and USD 0.8 million for M&A costs and provisions for a legal dispute 7

9 1. FY 2017 highlights 2. Q4 review 3. Guidance for Appendix 8

10 Q4 Highlights Sales EBITDA Q4 Highlights USD million Q4 '16 Q4 '17 11% growth in USD 7% growth in LCY 7% organic growth USD million Q4 '16 Q4 '17 19% EBITDA growth in USD 15% EBITDA growth in LCY EBITDA% 20% vs. 19% Q GPM 63% vs. 63% in Q Continued excellent performance in Prosthetics Direct sales in B&S continues to grow while distribution companies negatively impacted B&S growth by 90 bps in the quarter Strong operating profit growth US tax changes resulting in onetime tax benefit, no cash impact Note: Amounts are in USD and all growth numbers refer to quarter-on-quarter growth and measured in LCY unless otherwise stated 9

11 Q4 Sales by business segment and geography Total sales by business segment Total sales by geography APAC 16% growth 8% B&S 3% growth 50% 154 million 50% Prosthetics 11% growth EMEA 8% growth 50% 154 million 42% Americas 5% growth Note: Amounts are in USD and all growth numbers refer to quarter-on-quarter growth and measured in LCY unless otherwise stated Percentages within the charts refer to % of total sales 10

12 Q4 Sales highlights by business segments Sales contribution in USD million Q4 highlights USD 154 million in sales vs. USD 138 million in Q which corresponds to 11% growth Organic growth of 7% and acquisitions in 2016 now fully in comparable figures Growth contribution Organic LCY USD +5% +2% +7% - +7% +4% +11% Growth in the quarter driven by the prosthetics segment Direct sales part of B&S continues to grow while own distribution companies in the US negatively impacted B&S growth Currency positively impacting sales growth in the quarter Note: Bridge is an approximation for growth contribution and figures in bridge are rounded to million 11

13 Q4 Sales highlights by geography Americas 5% growth EMEA 8% growth APAC 16% growth 8% 64 million 42% 78 million 12 million 50% RHEO KNEE upgrade driving growth on the prosthetics side Americas region negatively impacted by about 130 bps due to own distribution companies whereas direct sales in B&S continue to grow High-end products, such as RHEO KNEE and Unloader One, performing well in both business segments Growth across all major regions in both segments Strong growth in both prosthetics and B&S All major regions performing well Excellent performance in China Note: Amounts are in USD and all growth numbers refer to quarter-on-quarter growth and measured in LCY unless otherwise stated Percentages next to charts refer to % of total sales 12

14 Profit & Loss Q Financial results USD million Q4 '17 Q4 '16 Net Sales LCY growth 7% 13% Organic growth 7% 4% Gross Profit % of sales 63% 63% EBITDA % of sales 20% 19% EBIT % of sales 16% 14% Net Profit % of sales 15% 10% 13

15 Q4 EBITDA bridge EBITDA margin bridge Item USD m Description EBITDA 26 Δ GP +6 7% sales growth Product mix, scalability and efficiency Δ S&M -2 3% growth Δ R&D 0 Δ G&A -1 FX +1-4% growth Q expected to be higher 7% growth Synergies from integration Investments in other G&A functions Negative ~20 bps impact from FX on EBITDA margin (net of hedge) EBITDA 30 Note: Operational expenses delta profitability impact refers to quarter-on-quarter changes and measured in LCY 14

16 Status on efficiency initiatives Initiative Description Progress Update on progress Manufacturing and distribution Simplify manufacturing and distribution organization Further growth of the Mexico operation Investments in equipment in Mexico Expect to finalize moving our distribution from West Coast to Mexico in Q Strategic sourcing Volume concentration Best-practice evaluation Global sourcing Process improvement Vendor relationships Good progress made Currently working on several categories Costs in 2018 and 2019 of USD ~12 million in total (special items) Savings per year by end of year 2020 of USD ~10 million Note: Össur announced efficiency initiatives in September For further information see company announcement no. 68/

17 Cash flow and other items Cash generated by operations USD million 20% 28 7% 16% 16% % Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Cash generated by operations % of sales Cash generated by operations USD 34 million or 22% of sales CAPEX USD 7 million or 4% of sales NIBD is USD 121 million or 1.2x LTM EBITDA (adj.) 16

18 1. FY 2017 highlights 2. Q4 review 3. Guidance for Appendix 17

19 Guidance for 2018 Actual 2017 Guidance 2018 Sales growth LCY 8% 4-5% Sales growth Organic 5% 4-5% EBITDA margin Before special items 18% ~19% CAPEX % of sales 3% ~4% Tax Effective tax rate 25-26%* 23-24% *The tax rate has been normalized for all the one-time benefits impacting the tax rate in Q Reported effective tax rate amounted to 16% in the FY

20 1. FY 2017 highlights 2. Q4 review 3. Guidance for Appendix 19

21 Financial calendar and upcoming events & conferences Financial calendar Annual General Meeting 8 March 2018 Interim Report Q April 2018 Interim Report Q July 2018 Interim Report Q October 2018 Interim Report Q and Consolidated Financial Statements for FY February 2019 Annual General Meeting 7 March 2019 Meet the management Iceland (Q4/FY roadshow) 6 February 2018 Copenhagen (Q4/FY roadshow) 7 February 2018 Helsinki (Q4/FY roadshow) 8 February 2018 Frankfurt (Q4/FY roadshow) 8 February 2018 New York (Q4/FY roadshow) 9 February 2018 Netherlands (Q4/FY roadshow) 9 February 2018 Carnegie Healthcare Seminar (SE) 15 March 2018 Goldman Sachs 15th Annual European Medtech and Healthcare Conference (UK) 5-6 September 2018 Further information: David Hreidarsson, Investor Relations dohreidarsson@ossur.com Tel: Össur press releases by If you wish to receive Össur press releases by please register at the web-site: 20

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