Financial Performance

Five-Year Overview


USD million
2021
2020
2019
2018
2017

Net sales

719

630

686

613

569

Gross profit

455

391

439

387

355

Operating expenses (excl. other income)

360

338

341

304

280

EBITDA

149

93

141

107

97

EBITDA before special items

149

93

150

115

103

EBIT

97

28

98

79

75

Net profit

66

8

69

80

58

Sales Growth

Sales growth USD %

14

(8)

12

8

9

- Organic growth %

10

(10)

5

5

5

- Currency effect %

3

0

(4)

1

0

- Acquired/divested business %

1

2

11

2

4

Balance Sheet

Total assets

1,247

1,214

1,091

914

793

Equity

627

577

569

538

500

Net interest-bearing debt (NIBD)

363

381

302

180

121

Cash Flow

Cash generated by operations

128

119

120

92

90

Free cash flow

74

68

63

39

55

Key Ratios

Gross profit margin %

63

62

64

63

62

EBIT margin %

14

4

14

13

13

EBITDA margin %

21

15

21

18

17

EBITDA margin before special items %

21

15

22

19

18

Equity ratio %

50

48

52

59

63

NIBD to EBITDA

2.4

4.1

2.0

1.6

1.2

Effective tax rate %

24

38

24

18

16

Return on equity %

11

1

12

15

12

CAPEX / Net sales %

3.7

3.8

4.6

5.0

3.4

Full time employees on average

3,761

3,505

3,382

2,775

2,948

Market

Market value of equity

2,724

3,380

3,340

2,055

1,871

Number of shares in Millions

423

423

425

431

437

Diluted EPS in US cents

15.5

1.9

16.2

18.7

13.3

USD million

Net sales

Gross profit

Operating expenses (excl. other income)

EBITDA

EBITDA before special items

EBIT

Net profit

Sales Growth

Sales growth USD %

- Organic growth %

- Currency effect %

- Acquired/divested business %

Balance Sheet

Total assets

Equity

Net interest-bearing debt (NIBD)

Cash Flow

Cash generated by operations

Free cash flow

Key Ratios

Gross profit margin %

EBIT margin %

EBITDA margin %

EBITDA margin before special items %

Equity ratio %

NIBD to EBITDA

Effective tax rate %

Return on equity %

CAPEX / Net sales %

Full time employees on average

Market

Market value of equity

Number of shares in Millions

Diluted EPS in US cents

Financial Performance

Performance in 2021


Sales amounted to USD 719 million in 2021. Sales increased by 11% in local currency in 2021 and by 10% organic, in line with the guidance for 2021, compared to a decline in local currency of 8% and a decline of 10% organic in 2020.

Financial Performance in 2021
  • Prosthetics sales increased by 11% organic and Bracing & Supports sales increased by 8% organic in 2021.
  • In 2021, Össur continued to invest in growing the infrastructure in new and Emerging Markets and went direct in seven new markets in the Eastern part of Europe. Now, Össur has operations in 35 countries globally.
  • Gross profit margin was 63% in 2021 compared to 62% in 2020.
  • The EBITDA margin for 2021 was 21% in line with guidance, compared to an EBITDA margin of 15% for 2020 that was affected by extraordinary costs related to divestments.
  • Net profit in 2021 amounted to USD 66 million compared to USD 8 million in 2020.
  • Cash generated by operations amounted to USD 128 million or 18% of sales in 2021.
  • In 2021, Össur completed acquisitions of entities with combined annual sales of USD 26 million.
  • NIBD/EBITDA was 2.4x at the end of 2021, within the target level of 2.0x-3.0x.
  • Össur has decided to restart its share buyback program and will commence it shortly. The share buyback program was put on hold on 17 March 2020 due to the impact of the COVID-19 pandemic, as the net interest-bearing debt to EBITDA ratio was temporarily above the target level. With emphasis on growth opportunities, value-adding investment opportunities and acquisitions, Össur has decided to discontinue dividend payments and focus on returning excess capital to shareholders via purchase of own shares in accordance with the Company’s updated Capital Structure and Capital Allocation Policy.
  • The financial guidance for the full year 2022 is 6-9% organic sales growth, 20-21% EBITDA margin before special items, 3-4% CAPEX of sales, and an effective tax rate of 23-24%.
Key Financials and Guidance
USD million
FY 2021
FY 2020
FY Guidance 2022

Net sales

719

630

Sales growth, organic

10%

(10%)

6-9%

Gross profit margin

63%

62%

EBITDA

149

93

EBITDA margin

21%

15%

EBITDA, before special items

149

93

EBITDA margin, before special items

21%

15%

20-21%

CAPEX as % of sales

4%

4%

3-4%

Effective tax rate

24%

38%

23-24%

USD million

Net sales

Sales growth, organic

Gross profit margin

EBITDA

EBITDA margin

EBITDA, before special items

EBITDA margin, before special items

CAPEX as % of sales

Effective tax rate

Sales Performance

Sales amounted to USD 719 million in 2021 compared to USD 630 million in 2020, corresponding to a 10% increase organic, 11% increase including acquisitions/divestments (local currency growth) and 14% increase reported (USD growth).

Currency movements in 2021 impacted sales growth positively by USD 20 million, which corresponds to about a 3%-point positive effect on the reported growth rate.

Throughout 2021, Össur completed several acquisitions of entities with full year sales of around USD 26 million.

Sales by Regions
Sales by Regions (USD million)
FY 2021
Organic growth*
Δ Acq. / div.
Δ Curr. effect
USD growth*

Americas

339

8%

2%

0%

10%

EMEA

315

12%

0%

6%

18%

APAC

65

9%

0%

7%

16%

Total

719

10%

1%

3%

14%

Sales by Regions (USD million)

Americas

EMEA

APAC

Total

*growth/(decline)

Sales by Segments
Sales by Segments (USD million)
FY 2021
Organic growth*
Δ Acq. / div.
Δ Curr. effect
USD growth*

Prosthetics

453

11%

8%

2%

22%

Bracing & Supports

266

8%

-9%

4%

3%

Total

719

10%

1%

3%

14%

Sales by Segments (USD million)

Prosthetics

Bracing & Supports

Total

*growth/(decline)

Business Segments

Prosthetics sales in 2021 amounted to USD 453 million and increased by 11% organic. Sales of bionic products accounted for 21% of Prosthetics component sales in 2021. Bionic sales growth was strong in all regions towards the end of the year, back to pre-pandemic levels of 23% of Prosthetics component sales in Q4 2021. Although bionic products have been impacted more by COVID-19 than mechanical products due to the more intensive bionic sales and fitting procedure as well as a more elaborate reimbursement process, this development indicates that Bionics are gradually back on track. Bracing & Supports sales in 2021 amounted to USD 266 million and increased by 8% organic.

USD 719 million

Sales in 2021 by Segments

The COVID-19 pandemic has impacted Prosthetics and Bracing & Supports differently. Throughout the COVID-19 pandemic, Prosthetics sales have been more resilient than Bracing & Supports. The demand for prosthetic solutions is, in the markets that Össur generates the majority of sales, mostly driven by servicing the existing amputee population with maintenance, renewals, and upgrades of prosthetic solutions. The demand for bracing & supports products is largely driven by injuries, surgeries, and prevalence of osteoarthritis (OA). The COVID-19 pandemic and the associated measures to control the spread of the virus have had a significant impact on amateur sports and activity levels that have resulted in fewer injuries. It is not expected that there will be pent-up demand for injury solutions. COVID-19 has impacted volumes of elective surgeries such as knee replacement surgeries, that drive demand for post-operative bracing solutions. OA bracing sales have also been impacted, primarily due to limitations to physician access.

Operations

Gross profit for 2021 amounted to USD 455 million or 63% of sales compared to USD 391 million or 62% of sales for 2020. In the second half of 2021, the gross profit margin was affected by temporary variable cost increases and related negative impact on productivity. Össur’s manufacturing sites and warehouses operated at normal capacity within local COVID-19 restrictions, but supply chain challenges have had a short-term negative effect on productivity. Supply chain cost increases affected cost of goods sold negatively by USD 10 million on a full-year basis in 2021.

Operating expenses (OPEX) amounted to USD 358 million or 50% of sales for 2021. Excluding extraordinary OPEX in 2020, the main driver for OPEX growth in 2021 is variable sales and marketing cost, as customer activities and variable payroll is higher compared to last year. In addition, cost in relation to further investments in the Emerging Markets platform and digital initiatives are impacting OPEX growth.

Management remains focused on managing cost with the ultimate objective to maintain and increase profitability as sales normalize.

Operating Profit

In 2021, EBITDA amounted to USD 149 million or 21% of sales compared to EBITDA of USD 93 million or 15% of sales in 2020. The EBITDA in 2020 was impacted by extraordinary items in the amount of net USD 11 million. Currency impact on the EBITDA margin net of hedge was positive by about 30 basis points for 2021.

Financial Items, Income Tax and Net Profit

Net financial expenses for 2021 amounted to USD 11 million, compared to USD 16 million in 2020.

Income tax amounted to USD 21 million in 2021, corresponding to a 24% effective tax rate.

Net profit in 2021 amounted to USD 66 million compared to USD 8 million profit in 2020. Diluted earnings per share in 2021 amounted to 15.5 US cents compared to 1.9 US cents in 2020. In 2020, net profit was impacted by extraordinary items related to divestments, acquisitions, litigation, severance, and government grants, in addition to COVID-19.

Sales

USD 719 million

EBITDA

USD 149 million

Cash Flow

Cash flow was strong in 2021 despite prioritizing production and product availability while impacted by COVID-19 and supply chain challenges. Cash generated by operations amounted to USD 128 million or 18% of sales for 2021 compared to USD 119 million or 19% of sales for 2020.

Capital expenditures for 2021 amounted to USD 27 million or 4% of sales, compared to USD 24 million, also 4% of sales for 2020.

Bank balances and cash equivalents amounted to USD 85 million at the end of 2021 and USD 109 million of existing facilities were undrawn. Bank balances and cash equivalents in addition to undrawn credit facilities at the end of 2021, therefore, amounted to USD 194 million.

Capital Structure

Net-Interest Bearing Debt

Net interest-bearing debt, including lease liabilities, at year-end 2021 amounted to USD 363 million compared to USD 381 million at year-end 2020. Net interest-bearing debt to EBITDA corresponded to 2.4x at year-end 2021 within the target range in the Company's Capital Structure and Capital Allocation Policy (2.0x-3.0x NIBD/EBITDA).

Share Buybacks and Dividends

The share buyback program will shortly commence again. The share buyback program was put on hold on 17 March 2020 due to the impact of the COVID-19 pandemic, as the net interest-bearing debt to EBITDA ratio was temporarily above the target level. The net interest-bearing debt to EBITDA was within the target range at year-end 2021, at 2.4x. The purpose of the share buyback programs is to adjust the capital structure in line with the desired level of net debt to EBITDA. The Company's Capital Structure and Capital Allocation Policy has been updated to reflect the focus on returning excess capital to shareholders via purchase of own shares and discontinuing dividend payments, with emphasis on growth opportunities, value-adding investment opportunities and acquisitions. At year-end 2021, treasury shares totaled 739,862.

Sales Performance
Sales amounted to USD 719 million in 2021 compared to USD 630 million in 2020, corresponding to a 10% increase organic, 11% increase including acquisitions/divestments (local currency growth) and 14% increase reported (USD growth).

Financial Performance

Outlook for 2022


Financial Guidance for 2022
Guidance
Guidance FY 2022
Actual FY 2021

Sales growth, organic

6-9%

10%

EBITDA margin before special items

20-21%

21%

CAPEX as % of sales

3-4%

4%

Effective tax rate

23-24%

24%

Guidance

Sales growth, organic

EBITDA margin before special items

CAPEX as % of sales

Effective tax rate

2021 Annual Report

2021 Annual Report
The Big Picture
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Our Business