Ossur, a global provider of prosthetics and bracing and support systems for orthopaedic rehabilitation, has achieved financial results in line with its previous guidance, with the fourth quarter of 2012 being a record quarter in bionics for the company.
Key Financial Highlights
Sales growth for 2012 was 3 per cent measured in local currency, which is in line with guidance of 2 to 3 per cent. Total sales amounted to US$399 million compared with US$398 million in 2011. Growth remains good across all segments and key markets in Europe, while prosthetics in Americas have been affected by adverse market conditions. Sales growth in prosthetics was 4 per cent, and sales growth for bracing and supports was 3 per cent, both measured in local currency. The fourth quarter was a record quarter in bionic sales, accounting for 17 per cent of prosthetics sales.
Gross profit margin remained stable. The company's manufacturing facility in Mexico is contributing as well as other lean initiatives within manufacturing and operations. Slow prosthetic sales in Americas affected the gross profit margin negatively. Gross profit amounted to US$248 million, or 62 per cent, the same ratio as in 2011. EBITDA amounted to US$70 million, corresponding to a margin of 18 per cent, which is in line with guidance of 18 to 19 per cent.
Net profit increased by 9 per cent in 2012, and amounted to US$38 million, compared with US$35 million in 2011. Ossur's cash flow continues to be strong and cash flow from operations was 18 per cent of sales in 2012, up from 17 per cent in 2011. Through consistent profitability and strong cash flows, Ossur has built up a strong balance sheet. The company is now in a position to return capital to shareholders. The Board of Directors will thus propose a new dividend policy to the shareholders at the annual general meeting.
One of the company's bionic products, Power Knee, was accepted into the reimbursement system in the US as of 1st January 2013. During 2012, 29 products were launched, with a healthy mix between bracing and supports and prosthetics. Within bracing and supports, focus has been on further establishing and broadening successful product segments such as the Unloader One, treating knee osteoarthritis, spinal support products and the Rebound Walker. In prosthetics the highlight of the year was Symbionic Leg, the first complete bionic leg. Other major projects in prosthetics include the Balance line, which is primarily for elderly users and people with low activity level.
2012 was the first full year of operation in Ossur's new Mexico facility, which opened in September 2011. The transfer of products previously manufactured in other Ossur locations to the Mexico facility was reportedly successful and without any major complications. The facility is well equipped.
Ossur estimates organic local currency sales growth for 2013 to be in the range of 2 to 4 per cent. EBITDA margin is estimated to be in the range of 18 to 19 per cent of sales for the year.