Markets


Economic development around the world and global macrotrends in the market create opportunities for growth. We have selected six trends that create opportunities for Össur:

INDUSTRY TRENDS CREATE OPPORTUNITY

Aging and more active population

Aging and more active population

  1. The global population of 65 and older is increasing, and so is the amputee population
  2. Growing number of people afflicted by vascular disease, the leading cause of amputation
  3. Increased amount of fractures, joint instability and joint afflictions
Growing middle class in emerging markets

Growing middle class in emerging markets

  1. Global economic growth will be powered by emerging markets
  2. Disposable income increasing in emerging markets, willingness to pay out-of-pocket
  3. Increasing healthcare coverage in emerging markets
Increased pressure on healthcare budgets

Increased pressure on healthcare budgets

  1. Healthcare providers increasing efforts to manage cost
  2. Demand for cost effective solutions without compromising quality
  3. Consolidation in patient care
Increased penetration of new technologies and high-end products

Increased penetration of new technologies and high-end products

  1. New innovative technologies being accepted for reimbursement
  2. Gradual transition from volume to value-based payment in healthcare
  3. Increased acknowledgement of total healthcare economic benefits of bionics and OA bracing
Increasing regulatory requirements

Increasing regulatory requirements

  1. Investments in people and processes to adapt to changing healthcare requirements
  2. Product development to meet prevailing regulatory requirements
  3. Increasing importance of digital and personal data security
Improved treatment options

Improved treatment options

  1. Earlier diabetic detection, limb salvage and alternative treatment options
  2. Surgery, wound care and easily accessible pain medication provide alternatives to bracing
  3. Increasing healthcare coverage and better access to patients

Össur operates within the global non-invasive orthopaedic industry, delivering advanced and innovative solutions within the prosthetics and bracing & supports markets.

MEDICAL DEVICE MARKET

Cardio-
vascular

Ophthalmology

General
Surgery

Neurological
Products

Orthopaedics

Diagnostics

Imaging
and Other

Urology

Commodity
Supplies

Arthroscopy

Reconstructive

Spinal

Trauma

Bracing &
Supports

Prosthetics

Pain
Management

Ancillary
Products

Bone
Growth

MEDICAL DEVICE MARKET

  • Cardio vascular
  • Ophthalmology
  • General Surgery
  • Orthopaedics
    • Arthroscopy
    • Reconstructive
    • Spinal
    • Trauma
    • Bracing & Supports
    • Prosthetics
    • Pain Management
    • Ancillary Products
    • Bone Growth
  • Diagnostics
  • Imaging and Other
  • Urology
  • Commodity Supplies

The prosthetics market

Prosthetics include artificial limbs and related products for individuals who were born without limbs or who have had limbs amputated. Össur offers a full range of premium lower- and upper-limb prosthetics, including feet, knees, hands, liners, and other components.

The size of the global prosthetics component market is estimated to be approximately USD 1.3-1.4 billion. Össur is the second largest company operating in prosthetics with a market share estimated at 22-23%.

The growth rate of the prosthetics market is estimated to be 3-5%. Volume growth in the market is estimated to be moderate. Volume growth is determined by a relatively stable global amputee population and a moderate increase in the number of new amputees that get fitted with a prosthesis every year. Pricing in the prosthetics market is on average relatively stable. Growth in the prosthetics industry is mainly driven by increased utilization of higher quality prosthetics that lead to increased mobility and quality of life for the users.

Prosthetic market

Market size

USD billion
1.3-1.4

Market share

#2 Worldwide
22–23%

Market growth

3-5%
Moderate volume growth
Relatively stable pricing
Positive product mix*

Primary Sales Channels

Orthotic & Prosthetic clinics (O&P)

Source: Össur management estimates
Note: Estimates only account for component sales from providers to suppliers, i.e. not clinical services
* Increased penetration of high-end innovative products

The bracing & supports market

Bracing & supports (B&S) include products used to support joints and other body parts for therapeutic and preventative purposes. The B&S market includes devices supporting spinal, knee, hip, foot, ankle, and hands. Össur offers a comprehensive line of customer made and off-the-shelf products with primary focus on osteoarthritis and injury solutions.

The size of the global B&S product market is estimated to be approximately USD 2.7-3.0 billion. Össur is the second largest company operating in B&S with a market share estimated between 6-8%.

The growth rate of the B&S market is estimated to be 3-5%. We observe a healthy volume growth in the B&S market supported by global healthcare trends such as an aging and more active population. Price levels are relatively stable as B&S products are fully reimbursed in most of the markets that Össur operates in. For some markets, there is moderate price pressure for selected product categories, mainly products of a lower innovation level. Increased utilization of high-end innovative products such as Unloader bracing supports market growth in B&S.

Bracing & Supports market

Market size

USD billion
2.7 - 3.0

Market share

#2 Worldwide
6 - 8%

Market growth

3-5%
Healthy volume growth
Moderate stable pressure
Positive product mix*

Primary Sales Channels

Orthotic & Prosthetic clinics (O&P)
Hospitals
Orthopaedic clinics

Source: Össur management estimates
Note: Estimates only account for component sales from providers to suppliers, i.e. not clinical services
* Increased penetration of high-end innovative products

Orthopaedic industry stakeholders

In the orthopaedic industry, many stakeholders and decision makers are involved in the purchasing decision. Stakeholders can be categorized into five groups.

Orthopaedic industry stakeholders

End-Users
Individuals that use the products.

Prescribers
Healthcare professionals who prescribe the products, based on the condition/clinical indication of the user.

Providers
Healthcare professionals who provide users with products, such as CPO's, doctors, podiatrists.

Payers
Public and private insurance companies. About 95% of Össur products are reimbursed by a third party.

Influencers
Healthcare systems, insurance companies, medical associations, end-users and their families.

User Stories

Markus Rehm

Markus is a 3x Paralympic Champion and World Record holder in long jump. Not only is he a professional athlete but he is also a certified prosthetist. He knows first-hand about the challenges people face following an amputation. He knows the fears of his patients because he has felt them himself. In 2003, he lost his left leg below the knee – he was only 14. He now draws strength from his job, which he pursues with enthusiasm. “Helping people return to mobility is one of my biggest goals.” 

Even when he was a child, sport was a big part of Markus Rehm’s life. He had to learn to live with the consequences of a tragic accident at a young age. In 2005, only two years after his accident, he finished second in the German youth championships which set the stage for what became his passion for athletics. Today, he is the undisputed champion in his class (T64 Long Jump). The list of his achievements continues to grow, as he chases his own world record distance of 8.48m. 

Markus is also very active in his private life and needs a prosthesis that can keep up with his busy lifestyle. Whether navigating the confined spaces of the workshop, running back and forth between appointments, or training in the weight room, the Pro-Flex XC Torsion from Össur, meets the challenges of his day-to-day activities. For his sport, he has worked closely with Össur in the development of the latest generation of sports blade for long jump, the Cheetah Xpanse. 

Eyes on the goal, breaking his own World Record, winning gold medals and bringing the topic of inclusion into the public eye. Markus wants to show the world that challenged athletes are worthy of competing against able-bodied athletes.

Life Without Limitations means to me: Jumping further!

Business model


Össur’s business model in brief

Össur manufactures a wide range of prosthetics and bracing & supports solutions with high standards of quality and excellence. These high-end products are developed with the objective to improve the mobility of end-users. The products are delivered to the end-users through customers (healthcare providers) who specialize in assisting individuals who suffer from movement impairment. Össur’s products are in the vast majority of cases reimbursed by public or private insurance (payers). Össur makes a significant investment every year in R&D to further advance products and technologies for the benefit of all stakeholders.

Business Model

Innovation

  • Technology trade-up
  • High-end products

Manufacturing

  • Consolidated footprint
  • High quality and sustainability

Sales

  • Direct Sales
  • Distribution

Prescribers

  • Surgeons
  • Physicians
  • Doctors

Providers

  • O&P clinics
  • Hospitals
  • Retail

Payers

  • Healthcare systems
  • Insurance companies
  • Out-of-pocket

End-user

  • OA
  • Amputation
  • Injuries

Business Model

Innovation

  • Technology trade-up
  • High-end products

Manufacturing

  • Consolidated footprint
  • High quality and sustainability

Sales

  • Direct Sales
  • Distribution

Prescribers

  • Surgeons
  • Physicians
  • Doctors

Providers

  • O&P clinics
  • Hospitals
  • Retail

Payers

  • Healthcare systems
  • Insurance companies
  • Out-of-pocket

End-user

  • OA
  • Amputation
  • Injury

The end-users

End-users include lower and upper extremity amputees who have lost a limb due to, for example, vascular diseases including diabetes, trauma, and cancer. Össur also helps individuals who require support as they may have, for example, developed osteoarthritis in knee or hip ligaments, incurred temporary immobilization, or require enhanced healing after surgery.

By collaborating closely with the end-users, Össur gains a better understanding of their needs and challenges. In turn, Össur helps them to improve their mobility by providing new technologically advanced products to achieve their goals. The involvement with the end-user is not limited to research and development as there is also an aim to provide them with quality services, directly through clinics operated by Össur or indirectly through customer service programs.

Prosthetics Users

> 750,000
new lower limb amputees per year

> 25,000
new upper limb amputees per year

30-40%
of new amputees are fitted
with prosthetic solutions

65-70
is the average age
of the amputee population

Source: Management estimates

Research & Development

Össur develops prosthetics and bracing & supports, from an idea to a finished product. With every product, the aim is to deliver cost effective medical solutions that provide value for end-users and the healthcare system. When a product is designed, Össur accumulates medical and biomechanical data during the development process to verify product safety and efficacy before launch. Also, to obtain independent clinical evidence for product outcomes as well as health economic data, Össur initiates and promotes clinical studies in cooperation with leading scientists, institutions, and healthcare professionals in the field.

Össur supports open collaboration within the industry and academia. An example of such an initiative is the recent joint investment by Össur and Comau in IUVO, a spin-off company of The BioRobotics Institute (Scuola Superiore Sant’Anna) in the field of wearable technologies. The objective of IUVO is to create wearable, intelligent and active tools for a better quality of life. The first concrete examples are bionic bracing (robotic exoskeletons) capable of aiding and improving the quality of life for workers in industrial and service fields, and for end-users in need of improved mobility.

Manufacturing & Quality

Össur maintains a strong global manufacturing function. Manufacturing of advanced prosthetic solutions, including bionics, takes place in Iceland and Scotland. Manufacturing of other prosthetics solutions, components and premium bracing solutions takes place in Mexico. Össur also manufactures some bracing and support products in France and outsources the manufacturing of soft goods to China. At Össur there is a continuous strive for profitability improvements, which includes finding ways to optimize the manufacturing process.

As a healthcare company, a great emphasis is placed on quality and it is highly important that quality is an intrinsic part of processes whereby Össur has had a certified quality system in place since 1993. Össur complies with various global quality and regulatory requirements for medical devices and is currently certified with the ISO9001:2008/2015, ISO14001:2015 and ISO13485:2016 standards.

Manufacturing Locations

Sales & Marketing

Össur operates within a highly specialized industry where the primary customers are specialized healthcare providers who provide and fit individuals with Össur products. In prosthetics these customers are orthopaedic and prosthetic (O&P) clinics and in bracing & supports it is a combination of O&P clinics, hospitals, and surgery centers. In a few selected markets, Össur operates its own O&P clinics. In most cases, when a user has been fitted with a product, Össur’s customers claim reimbursement from the relevant public institutions or private insurance companies. Össur sells its products through its own direct sales network, and in some cases through distributors, with operations in more than 26 countries.

Prosthetic Users

Source: Össur Managament Estimates

Payers, providers, and prescribers

Prescribers include healthcare professionals who prescribe products based on the clinical indication of the users. These include orthopaedic surgeons, non-surgical physicians, and emergency physicians as well as other professionals providing medical diagnosis.

Providers are healthcare professionals who provide users with prosthetic and bracing products, and related services. These include certified prosthetists and orthotists (CPOs) working at O&P clinics, durable medical equipment (DME) clinics, orthopaedic clinics, and hospitals. Many providers not only recommend specific products but also fit and tailor-make certain products. For non-reimbursed products, a provider can be a pharmacy or sports store.

Payers include government reimbursement or insurance companies, where the vast majority of Össur’s products are reimbursed by a third party. It should be noted that reimbursement systems vary substantially between countries. In other cases, the end-user would pay for the products out of pocket.

Innovation


Strong portfolio of Intellectual Property

Össur protects its investment in R&D by strategically growing its intellectual property portfolio. Proprietary technologies and products are protected with various types of intellectual property rights, such as patents, design registrations and, trade secrets. The IP portfolio is well diversified and representative of the business areas and markets in which Össur operates. In recent years, the portfolio has grown around 10% annually, which is mostly contributed to in-house innovation efforts. In 2019 alone, Össur was granted 104 new patents in addition to filing 113 new patent applications. At year-end 2019, Össur had around 1660 granted patents and some 350 pending patent applications. In addition, Össur’s brand is protected by more than 500 trademark registrations.

Patent Portfolio

Functional trade-up through technology

One of Össur’s key innovation efforts has been to develop solutions explicitly intended for the large population of elderly amputees. Elderly individuals rarely receive advanced prosthetic solutions but need functional assistance and an effortless interface in order to use the prosthesis and feel confident enough to maintain an independent lifestyle. Össur’s proven technology platforms in the field of prosthetics are the foundation for those new solutions. In 2019, Össur introduced three new product groups catering for the less active, more reliant amputee, facilitating functional trade-up through technology for this population. These products are specifically designed as complete solutions, aesthetically pleasing and user centric.

Connect TF is a prefabricated adjustable socket that can be donned in a user friendly and effortless manner, while allowing for residual limb volume changes, which are both common reasons for low utilization of prosthetics in the indicated population.

Iceross Seal-In X Locking is a silicone liner interface, applicable for all activity levels but specifically designed with the elderly population in mind. It combines the benefits of locking suspension with the advantages of Össur’s proprietary Seal-In technology, providing volume and rotational control.

Balance Foot S is a lightweight, waterproof foot designed to meet the needs of low active walkers by introducing a cushioning heel with gradual stiffening and a wide sole blade. Both providing enhanced stability perception and a smooth rollover.

Össur also introduced exciting new products within the area of bracing & supports. New launches included an addition to the Unloader family of osteoarthritis bracing. The Unloader One knee brace has for years been one of Össur‘s top performing products, clinically proven to relieve pain for patients with osteoarthritis, and providing improved quality of life and mobility for its users. In 2019, Össur launched an upgraded version of the brace, Unloader One X, incorporating the proprietary Dynamic Force Strap System and offering improved levels of comfort, aesthetics and ease of use.

Mind-controlled prosthetics

Technology advancements in the field of bionics have been extensive over the past decade where bionic components have become lighter, faster, more customizable and robust to various conditions. Össur believes that the future of prosthetics lies in providing the user with more direct control of the prosthesis, allowing the amputee to intuitively affect the behavior of their leg or arm. To further advance this vision, Össur signed a milestone agreement with the Alfred Mann Foundation on the development and licensing of a myoelectric sensor system (IMES), a solution utilizing implantable sensors that collect signals from the amputee’s muscles and translate those into prosthetic movements. The focus for the first phase of this research and development initiative will be on upper limb controls. In 2019, Össur supplemented its upper limb prosthetic offering by launching the i-Limb Wrist, an active wrist rotator that can in the future, along with the i-Limb hand, be controlled through the IMES technology.

New Technologies

In collaboration with external parties, Össur has continued to explore the field of augmenting systems; wearable exoskeletons designed for both medical rehabilitation and industrial applications. Össur is applying existing high-end technology platforms ranging from bracing & supports to prosthetics to further advance the exploration and development in this area.

Strategy


Össur is a pioneer of advanced technology and by listening to people’s needs and pushing the boundaries of technology, continues to create some of the best products and services available in the fields of prosthetics and bracing & supports. In the end, we strive to create a Life Without Limitations for all our users. Össur’s mission is to improve people’s mobility and its vision is to be a leading company in the non-invasive orthopaedics market.

Össur will continue to generate value for individuals and healthcare systems by focusing our business strategy on successful product innovation, sustainable growth and efficiency.

Main focus areas

Innovation

Innovation

Execute Ideas that add Value

We embrace innovation in all our actions by creating value for our customers. We will be at the forefront of indication-related innovation to ensure our consistently strong position in the market.

In 2019, Össur continued to increase its investments level...


Read more about our innovation in 2019

In 2019, Össur continued to increase its investment level in research & development which currently stands at 5% of sales or USD 31 million. Össur launched more than a total of 25 new products and incremental updates to the market.

In prosthetics, Össur introduced the bionic PROPRIO FOOT which makes use of a motor-powered micro-processor-controlled ankle to adjust the foot position of the user in real time. The foot is designed to address variations in terrain better than other prosthetic feet. The PROPRIO FOOT provides a stable foot placement on stairs and inclined surfaces while reducing the risk of trips and falls by lifting the toe in every step.

In bracing & supports, Össur introduced the Unloader One X, the latest in Össur’s range of clinically proven OA knee braces. The product is designed to be effortless to wear and easy to use.

During the year, good progress continued to be made in research & development in new technologies for our users. Össur, for example, signed an agreement with the Alfred Mann Foundation to extend the exploration of mind-controlled prosthetics. Additionally, continued investments were made in bionic solutions and wearable exoskeletons.

Growth

Growth

Maintain Sustainable Growth

We will achieve growth by successfully commercializing our innovation through our local go-to-market strategy and commitment to our customers’ needs. We will further develop our business and leverage untapped market opportunities.

Organic sales growth amounted to 5% in 2019, driven...


Read more about our growth in 2019

Organic sales growth amounted to 5% in 2019, driven by a strong performance in prosthetics and high-end innovative products in both business segments. These products include bionics such as the RHEO KNEE and PROPRIO FOOT, high-end mechanical feet such as the Pro-Flex range, OA bracing like the Unloader One X and post-operative bracing such as the Rebound Post-Op Knee.

One of the growth opportunities is within emerging markets where penetration of prosthetics and bracing is still relatively low. Össur continued to invest in selected emerging markets during the year by establishing direct sales and infrastructure. The goal in these markets is to drive conversion, technology trade-up, and offer partnership services.

Össur made good progress during the year with its partnership service model. These services include professional education, solutions to ease the reimbursement claim process, tools to enhance clinical outcomes, and outsourced fabrication.

Our strategy also includes exploring growth opportunities through acquisitions. Össur signed an agreement to acquire the prosthetics manufacturer College Park Industries. Össur furthermore acquired three companies with combined full-year sales of about USD 20 million. Two of the companies began to contribute to sales in the beginning of the fourth quarter of 2019 but the other began to contribute to sales in November of 2019.

Efficiency

Efficiency

Conduct Business Efficiently

We strive to increase efficiency and drive continuous improvement. We run efficient operations in the most optimal locations, hire passionate employees and deliver strong profit and cash flow.

EBITDA margin before special items amounted to...


Read more about our efficiency in 2019

EBITDA margin before special items amounted to 22% in 2019. Profitability was positively impacted by changes in product mix and savings from the ongoing efficiency initiatives, however the increase in profitability was neutralized by investments in emerging markets and impact from acquisitions.

In 2019, as in recent years, the gross profit margin increased as a result of changes in product mix. The positive development is mainly driven by stronger growth in high-end innovative products than in the remainder of the product portfolio, such as bionics, high-end mechanical feet and OA solutions.

Good progress was made with the ongoing efficiency initiatives this year which are in the area of distribution, manufacturing and strategic sourcing. The savings target of USD 6 million in 2019 was reached, corresponding to USD 3 million in additional savings when compared to the previous year. Össur targets savings of USD 10 million in 2020 corresponds to USD 4 million in additional savings when compared with 2019.

Össur has been investing in an increasingly scalable infrastructure. As an example, the global manufacturing platform is consolidating with about 10 fewer locations since the year 2009. Investments have been made in centralized procurement (strategic sourcing) and implementation of a new CRM platform. The shared service center in Poland supports around 60% of Össur’s entities and the global IT department around 90% of entities.

People


At Össur we nurture a spirit of innovation; we offer an open and vibrant environment where each employee can achieve his or her full potential. We live by a set of values that are the foundation for our strategy and success. Our core values are Honesty, Frugality, and Courage; and these values guide our decisions. We live these values every day in everything that we do—in our interactions with colleagues and customers, and in our work efforts.

We have about 3,500 FTEs working in over 26 countries. While we are a diverse company, we work as one to improve people’s mobility. Different ideas and points of view are beneficial to our business, and we believe in creating an environment where diversity, knowledge, skills, and strengths are fully utilized. As individuals, our employees can expect equal treatment and equal opportunities for growth within Össur. Our employees take responsibility, both for their current job and for their career advancement. We offer various learning opportunities, so employees can build lasting and rewarding careers with us.

We measure our employees’ motivation once a year and we are proud that our employee satisfaction and motivation is high. Our employees’ passion, drive, and capabilities to help our customers are our greatest assets.

We have a Competency Framework within Össur that allows us to identify the behaviors that drive successful performance. It provides a clear behavioral link to our business strategy and suggested methods for our employees to further develop their competencies.

Össur recruits competent and ambitious individuals that can work on demanding projects, and we are proud that we’ve been able to provide advancement opportunities for our talented employees. Our hiring decisions are based on a potential employee’s skills and abilities. Our global team of talented professionals is passionate about helping people live a Life Without Limitations. While innovation drives us as we strive to be the leading company in non-invasive orthopaedics, it is the people that work at Össur that make this possible.

If you are interested in joining our team you can view and apply for an open position on Össur’s applicant portal.

Our Values

Össur's core values ensure successful cooperation and partnerships, and are the foundation for our strategy and success.

Honesty

Stay True

We show respect by adhering to facts and reality, fulfilling promises and claims, and admitting failures. We nurture honest communication throughout the Company by sharing information and respecting each other’s time and workload.

Frugality

Make Every Step Count

We use resources wisely. The Company aims to minimize costs across all areas of its business through effective communication, preparedness, planning, and optimized processes.

Courage

Aim Higher

We are open to change and constantly strive for improvement. We challenge unwritten rules, show initiative and take calculated risks, while at the same time taking responsibility for our ideas, decisions, and actions.

Diversity and Equality

Every day we interact with people from a wide range of cultures and backgrounds. We do business in numerous locations around the world, working and communicating with many different colleagues, customers and other stakeholders in our industry.

Diversity and equality are extremely important to us. Different ideas and points of view are beneficial to our business, and we believe in creating an environment where all our knowledge, skills and strengths are fully utilized. As individuals, we can expect equal treatment and equal opportunities for growth within Össur.

Diversity and Equality

Risk management


Four key risks

Investment in Össur’s shares involves various risks where the business, financial conditions, and results of operations going forward rest upon certain assumptions and could be negatively affected if any of the factors described in this chapter occur. Össur has chosen to highlight four key risks which are currently considered most relevant. Össur cannot ensure that given assumptions for the description of the risk is correct. Furthermore, additional risks and uncertainties which are listed on Össur’s corporate website, or not presently known to Össur, or that the Company currently deems immaterial, may adversely affect its business operations and financial results, to an even greater extent, than the four risks identified here.

Changes in reimbursement

Description

Most of Össur’s products and services are reimbursed by third-party payers, including government healthcare programs and private health insurance plans. All third-party payers continue to develop methods of controlling healthcare costs, including review of claims, selective contracting, and competitive bidding.

Potential impact

These cost-control methods may limit or even eliminate the coverage and the amount of payment for which third-party payers may be willing to pay on Össur‘s products and services. As a result, sales may decline significantly, and customers may reduce or eliminate purchases. Reviews of claims may lead to repayment of prior sales.

Mitigative actions

Össur only brings products to the market that have medical indication and are clinically validated. Össur applies its reimbursement knowledge from the earliest stages of product development to the post-sale education of customers. Össur also pursues several strategies to manage the reimbursement of its products and services.

Regulatory requirements

Description

Össur’s products are medical devices that are subject to extensive global regulations by the respective authorities in countries where Össur conducts its business. Such regulations can restrict virtually all aspects of a medical device’s design and testing, manufacturing, safety, labeling, storage, recordkeeping, reporting, clearance and approval, promotion, distribution, and services.

Potential impact

Failure to comply with the regulatory requirements of the applicable authority may subject Össur to sanctions ranging from warning letters to penalties and product withdrawal. Össur’s failure to comply with regulatory requirements or receive regulatory clearance and approval for its products or operations would adversely affect Össur’s sales and potential for future growth.

Mitigative actions

Össur maintains a robust global quality system that complies with international medical device standards and is an intrinsic part of internal processes. Furthermore, employees actively monitor the medical device regulation landscape and stay on top of changes to international and local regulations in the countries where Össur markets and sells medical devices.

Össur may be unable to develop or secure the use of new technologies

Description

Össur operates in markets that are characterized by rapid technological change, driven by extensive research that is carried out by market participants. Technological innovation takes place at various stages in Össur’s value chain and may include individual components, design, and functionalities of Össur products, and patient care.

Potential impact

The development by any suppliers or competitors of substitute products or components that better satisfy market demands could have a material adverse effect on Össur’s business and results of operations. A failure to develop new products or enhance existing products could also have a material adverse effect on Össur’s operations and potential for future growth.

Mitigative actions

Significant reinvestment into R&D and constant strive to find new technologies has resulted in a vast IP portfolio and enables a strong position to compete with potential new entries. External connections and appeal to universities, research institutes and investors provides the opportunity to stay informed and review emerging innovation as part of acquisitions or research cooperation initiatives.

Industry consolidation and forward integration

Description

Major shifts in Össur’s marketplace include the consolidation of prosthetics manufacturers in recent years and the additional momentum that forward integration is gaining in the industries where the Company operates. Given the nature of acquisitions, it is uncertain to what degree Össur will be able to participate in further consolidation and to what degree forward integration will affect Össur‘s operations.

Potential impact

The consolidation has been a material contributor to the growth of Össur in the past. If Össur were not to participate in further consolidation or forward integration, it might limit Össur‘s potential for future growth. In addition, these shifts may impact the competitive landscape of the industries and the associated market shares. Changes in the industry may furthermore impact Össur’s customers.

Mitigative actions

Össur continuously reviews value enhancing acquisition and investment opportunities in its business segments and keeps a good relationship with the relevant stakeholders in the industry. Össur furthermore operates its own clinics in certain regions and has partnership programs in place with patient care providers to offer end-users quality services.

Other relevant risk factors

For other relevant risk factors please see the Investor Relations section on our corporate website.


Össur 2019 Annual Report