Embla Medical hf: Interim Report Q3 2024

Rhea-AI Summary

Embla Medical reported solid Q3 2024 results with sales of USD 214 million, representing 7% organic growth and 11% reported growth. The company saw strong performance in EMEA, driven by Prosthetics & Neuro Orthotics and Patient Care. EBITDA margin was strong at 22%, benefiting from cost reduction initiatives and improved product mix.

Key highlights include:

• Gross profit margin improved to 63% from 62% in Q3 2023
• Net profit grew by 58% to USD 22 million
• Free cash flow was 15% of sales
• NIBD/EBITDA before special items was 2.8x

Embla Medical reiterated its full-year guidance of 6-8% organic sales growth and ~20% EBITDA margin before special items. The company continues to execute its Growth'27 strategy and is preparing for the full launch of new bionic knee solutions in early 2025.

Positive

• 7% organic sales growth and 11% reported growth in Q3 2024
• EBITDA margin improved to 22% from 19% in Q3 2023
• Net profit grew by 58% to USD 22 million
• Free cash flow increased to 15% of sales from 9% in Q3 2023
• Reiterated full-year guidance of 6-8% organic sales growth and ~20% EBITDA margin

Negative

• Bracing & Supports business showed modest growth of 1% organically
• Performance in Americas remained soft
• Share buybacks continue to be paused

Insights

Financial Analyst

Embla Medical delivered a solid Q3 2024 performance with notable improvements across key financial metrics. Organic sales growth of 7% and local currency growth of 11% demonstrate strong market demand, particularly in EMEA. The EBITDA margin of 22% shows significant improvement from 19% in Q3 2023, reflecting successful cost reduction initiatives and improved product mix.

The company's gross profit margin increased to 63%, up from 62% year-over-year, indicating enhanced operational efficiency. Net profit grew impressively by 58% to $22 million, with the net profit margin expanding from 7% to 10%. Strong cash generation is evident, with free cash flow at 15% of sales, up from 9% in Q3 2023.

Embla's reiterated guidance of 6-8% organic sales growth and ~20% EBITDA margin for the full year suggests confidence in maintaining this positive trajectory. The expanded Medicare access for advanced bionics and upcoming product launches in 2025 present potential catalysts for future growth.

Medical Device Industry Expert

Embla Medical's Q3 results highlight its strong position in the prosthetics and orthotics market. The 9% organic growth in both Prosthetics & Neuro Orthotics and Patient Care segments is particularly impressive, indicating robust demand for advanced medical devices. The softer 1% growth in Bracing & Supports suggests potential for targeted improvements in this area.

The expansion of US Medicare coverage for advanced bionics to K2 patients is a significant development that could drive future sales growth. This policy change opens up a larger patient pool for Embla's high-end prosthetic solutions. The ongoing launch of new bionic knee solutions (NAVii® and Icon®) with full launch expected in early 2025 positions Embla well to capitalize on this expanded market access.

The introduction of the third generation Naked Prosthetics finger device portfolio demonstrates Embla's commitment to innovation. Combined with the strong performance of their prosthetics in the 2024 Paralympic Games, this reinforces Embla's brand reputation and technological leadership in the industry.

Announcement no. 12/2024

Interim report Q3 2024

22 October 2024

COPENHAGEN, Denmark, Oct. 22, 2024 /PRNewswire/ -- 

Sveinn Sölvason, President and CEO, comments:

"We delivered solid sales in the third quarter amounting to USD 214 million. Organic sales growth was 7% and local currency growth was 11%. The strong momentum we have seen in EMEA throughout 2024 continued driven by strong performance in Prosthetics & Neuro Orthotics and Patient Care. In our Bracing & Supports business growth was more modest for the quarter.

As of September 1, 2024, US Medicare has expanded access to advanced bionics for K2 patients. Healthcare professionals are currently assessing first patients as part of the replacement cycle through medical documentation that a bionic knee would improve the patient's functional health outcomes.

Our EBITDA margin came in strong for the quarter at 22%. We continue to see the positive effects from the cost reduction initiatives implemented in manufacturing earlier this year as well as contribution from better product mix and cost control.

We are executing well on our Growth'27 strategy and reiterate our full year guidance of 6-8% organic sales growth and ~20% EBITDA margin before special items."

Highlights Q3 2024

• Sales amounted to USD 214 million and organic growth was 7%, compared to 7% in Q3 2023. In local currency sales growth was 10% increase including acquisitions and 11% reported growth (USD growth).
• Prosthetics & Neuro Orthotics sales grew by 9%, Patient Care grew 9%, while Bracing & Supports grew by 1% (all organically). EMEA continued to contribute strongly during Q3, whereas performance in Americas remained soft. APAC delivered good growth.
• Gross profit margin was 63%, compared to 62% in Q3 2023. The increase in gross profit can partly be ascribed to cost reduction initiatives in manufacturing implemented during Q1 as well as better product mix and manufacturing efficiency.
• EBITDA amounted to USD 47 million, and EBITDA margin was 22% of sales, compared to 19% in Q3 2023. Increasing gross profit margin and continued cost control contributed to increased profitability.
• Net profit grew by 58% and was USD 22 million with a net profit margin of 10%, compared to 7% of sales in Q3 2023.
• Cash generated from operations amounted to USD 52 million or 24% of sales, compared to 17% of sales in Q3 2023.
• Free cash flow amounted to USD 33 million or 15% of sales, compared to 9% of sales in Q3 2023. Free cash flow was strong in the third quarter with solid operating results.
• NIBD/EBITDA before special items was 2.8x at the end of Q3 2024. Share buybacks continue to be paused.

Other highlights

• During the third quarter we introduced the third generation of our Naked Prosthetics finger device portfolio, while our newly launched bionic knee solutions, NAVii^® by Össur and Icon^® by College Park continue to be rolled out in selected markets as part of our limited launch program. A full launch of NAVii and Icon is expected early 2025, as previously announced.
• A global team of elite para-athletes who wear Össur's renowned prosthetics won 22 medals and set five new Paralympic Records during the 2024 Paralympic Games in Paris, with the company's iconic carbon fiber Cheetah sports blades, easily identifiable by their distinctive yellow stripe, dominating several categories of Athletics competition.

2024 outlook

• We reiterate our full year guidance of 6-8% organic sales growth and ~20% EBITDA margin before special items.

Conference call details

Embla Medical will host a conference call on October 22, 2024, at 9:00 CET / 7:00 GMT / 3:00 EST.

The conference call webcast can be accessed through following link:
https://edge.media-server.com/mmc/p/o2dxucfe

To actively participate in the Q&A session of the call please use following link for dial in options
ttps://register.vevent.com/register/BI0f67d9e43c4f4ff484123ef1cff5e472

The latest investor presentation can be downloaded through following link Embla Medical Reports & Presentations

Further information
Klaus Sindahl, Head of Investor Relations, KSindahl@emblamedical.com, +45 5363 0134

Embla Medical press releases by e-mail
If you wish to receive Embla Medical press releases by e-mail, please register at http://www.emblamedical.com/investors

About Embla Medical

Embla Medical (Nasdaq Copenhagen: EMBLA) was founded in Reykjavik in 1971 with the mission to improve people's mobility. Embla Medical is home to several brands renowned for positively impacting people's health and well-being. They include Össur, a leading global provider of prosthetics and bracing and supports solutions; FIOR & GENTZ, an innovative developer of neuro orthotics; and College Park Industries, creators of custom-built prosthetic solutions. Embla Medical also provides patients with world-class care through a global network of Orthotic and Prosthetic (O&P) facilities. Embla Medical is committed to sustainable business practices and is signatory to the UN Global Compact, UN Women's Empowerment Principles, and contributes to the UN Sustainable Development Goals. The company's climate targets have been verified by the Science Based Targets initiative. Embla Medical operates globally and has more than 4,000 employees. www.emblamedical.com 

Embla Medical was formerly listed as Össur (OSSR) on Nasdaq Copenhagen until 8 April 2024.

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20241022 EMBLA Company Announcement Q3 2024 incl Financials FINAL

 

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SOURCE Embla Medical hf.

FAQ

What was Embla Medical's (EMBLA) organic sales growth in Q3 2024?

Embla Medical (EMBLA) reported 7% organic sales growth in Q3 2024.

How much did Embla Medical's (EMBLA) net profit grow in Q3 2024?

Embla Medical's (EMBLA) net profit grew by 58% in Q3 2024 compared to the same period last year.

What is Embla Medical's (EMBLA) full-year guidance for 2024?

Embla Medical (EMBLA) reiterated its full-year guidance for 2024 of 6-8% organic sales growth and approximately 20% EBITDA margin before special items.

When is Embla Medical (EMBLA) planning to fully launch its new bionic knee solutions?

Embla Medical (EMBLA) is planning to fully launch its new bionic knee solutions, NAVii and Icon, in early 2025.