„With the integration of our most recent acquisitions we are now able to provide a full product offering that includes the most technologically advanced prosthesis in the world.“
As a global market leader in non-invasive orthopaedics, Össur maintained its market position as the second largest player in both prosthetics and bracing & supports in the year 2017
Growth in the year was driven by the prosthetics segment, which grew above estimated market growth, and high-end innovative products from both business segments. Local currency growth was 8% with the acquisitions made in the year 2016.
EBITDA before special items grew by 10% in local currency and the margin was within the communicated financial guidance range. We accelerated our investments in R&D projects for high-end innovative products, such as bionic bracing, during the year. Even so, we grew our operating profit faster than sales with positive contribution from product mix, integration efforts and economies of scale.
Net profit amounted to USD 58 million in the year or 10% of sales. Diluted earnings per share amounted to 13.3 US cents. Good growth in profit can primarily be attributed to strong performance in sales.
Össur aims to maintain a healthy balance sheet with a level of net interest-bearing debt ratio of 1‐2x to EBITDA. Össur has strong cash generation and as means to maintain the desired debt level, the Company acquired own shares for approximately USD 37 million during the year and paid out dividends in the amount of USD 7 million.
Organic growth: 1%
FTEs: ~1200
Organic growth: 7%
FTEs: ~1200
Organic growth: 15%
FTEs: ~150
HQ FTEs: ~450
Bracing and supports (B&S) sales amounted to USD 285 million and grew by 1% organically.
Growth in EMEA was good where the primary growth drivers were our high-end products, which include the Unloader One®. In the Americas, the Canadian market grew well and direct B&S sales in the US grew modestly. Growth in the Americas was however negatively impacted due to sales decline in own distribution companies. The nature of the operational challenges in our own distribution companies is mainly due to internal restructuring efforts. These distribution companies accounted for ~8% of our global B&S sales in 2017 and have had a negative impact on organic growth rates of about 1% on average in 2015-2017. This means that direct sales have been growing annually in line with the estimated 3-5% market growth during that period. The restructuring efforts are now mostly complete and we are expecting the distribution companies to have limited impact on growth in 2018. Growth in APAC was excellent with a good contribution from Australia, Japan, and China.
Over 10 new B&S products were introduced to the market in 2017. These include the Unloader One® Lite knee brace, which is a new addition to the growing OA solutions portfolio.
Prosthetics sales amounted to USD 282 million and grew by 17% and 9% organically, both measured in local currency.
We continued to see good performance in prosthetics with growth above estimated market growth. Growth in EMEA was strong across all major regions with the RHEO KNEE® driving growth along with other high-end products. In a similar fashion, the RHEO KNEE® was the key organic growth driver in the Americas for prosthetics. There was excellent sales growth for prosthetics in APAC and are pleased to see our high-end products performing well in all regions. Performance in China was especially strong after adjusting the sales approach during 2016 and selling direct.
Sales of bionic products accounted for 21% of prosthetics component sales, compared to 24% in 2016. The decrease between years is attributed to additional mechanical products coming from the Medi Prosthetics acquisition and good performance in our high-end mechanical prosthetics solutions during the year.
Over 30 new prosthetic products were introduced to the market in 2017. These included new versions of the highly regarded RHEO KNEE® and powered thumb rotation as well as four new grips to accompany the i-Limb® Ultra hand.
Innovative products, ground-breaking technology and successful events paved the way for yet another memorable year for Össur
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2017 highlights
Organic sales growth amounted to 5% in 2017 and our EBITDA grew 8% organically when measured in local currency. Growth during the year was primarily driven by excellent performance in our prosthetics segment which grew above estimated market growth in addition to a stellar contribution from our high-end innovative products across our portfolio in both prosthetics and bracing & supports. We accelerated our investments in R&D projects for high-end innovative products, such as bionic bracing, during the year. Even so, we grew our operating profit faster than sales with positive contribution from product mix, integration efforts and economies of scale.
Össur continued to step into the spotlight during the past year as we pushed the boundaries on innovation even further. With every employee working towards the mission of improving people’s mobility, we continued to develop new products for both the prosthetics and bracing & supports segments. For example, we introduced upgraded versions of our highly regarded RHEO KNEE ® within prosthetics and launched a new osteoarthritis solution, Unloader One ® Lite, within the bracing & supports segment. In total, we launched more than 30 prosthetic solutions and more than 10 bracing & supports solutions during the year.
We actively engaged in research projects throughout the year that encouraged creative development to drive the industry forward. For example, the recently established collaboration with Comau and IUVO to develop bionic bracing products to support people in various endeavors of their life. To be at the forefront of innovation, we strive to find new solutions to help our users live a life without limitations.
We have an aging and more active population emerging. Forecasts estimate the age group of 65 and older to significantly increase in the coming years, and the population of elderly amputees is expected to follow similar trends. Still relatively few elderly amputees receive a prosthetic solution and even fewer a bionic solution. This is despite recent studies clearly demonstrating the economic benefit of bionic solutions and their proven capability to improve the quality of life for amputees. It is therefore not economical to withhold bionics from patients. This is an area where Össur aims to support industry developments in the future by providing effective, powered, intelligent and energy-efficient prosthetic solutions for low active amputees. In doing so, we pursue opportunities that add value for our customers; an effort that will continue to drive our success for many years to come.
We pursue opportunities that add value for our customers; an effort that will continue to drive our success for many years to come
Össur’s sales have grown at a 21% compounded annual growth rate since the initial stock exchange listing in 1999. This growth has been driven by a combination of organic and acquired growth, where the acquisitions of Touch Bionics and Medi Prosthetics represent the latest additions to the Össur business. Össur’s profitability has grown at a similar rate with a continuous focus on operational improvements. Further opportunities to increase efficiency were identified during the year and Össur announced efficiency initiatives within the areas of Manufacturing, Distribution, and Sourcing. Work has already begun in these areas and we are progressing according to plan.
We had many accomplishments in the past year that helped Össur maintain its strong presence as an industry leader. With the intergration of our most recent acquisitions we are now able to provide a full product offering that includes the most technologically advanced prosthesis in the world. In addition, we have been able to return value to shareholders through dividends and share buybacks.
We have so many examples of triumph and success in our business that there is no shortage of inspiration. In 2017, Team Össur succeeded at the IPC Para Athletics World Championships winning 15 medals, and there are countless stories of our users pushing the boundaries of limitation. We are also very happy to have been voted one of Orange County’s Top Workplaces as well as being named the most popular company in Iceland. Mid-year, our #MyWinningMoment campaign, which celebrates overcoming individual challenges, was nominated for two Digital Communications Award. This fantastic program shows the courage and tenacity our users embody as they face any obstacle in their path. It is namely because of our users that we find such great pride in everything we do.
At Össur, our passion for what we do makes us stand out. Guided by our mission to improve people’s mobility, and our vision to be the leading company in non-invasive orthopaedics, Össur rises to any challenge that may emerge. Our drive for innovation enables us to provide premier solutions for all who face mobility challenges. We would like to thank our amazing employees, customers, and users, as well as our shareholders for making this possible. We look forward to continuing to work with all of you as we invest in our bright future.
Jon Sigurdsson
President and CEO
Össur is a global leader in non-invasive orthopaedics; innovating, producing, and providing advanced technological solutions within prosthetics and bracing & supports. Our mission is to improve the mobility of our users, so they can live their Life Without Limitations ®.
Össur was founded in 1971 and has since grown through innovation and acquisitions in both prosthetics and bracing & supports. Today, Össur has a strong global position in the industry and key markets being the second largest player worldwide in both segments and in a good position to leverage future growth opportunities. Össur has been listed since 1999 and since 2009 on Nasdaq Copenhagen. Össur has operations in over 25 countries and more than 3,000 employees.
Every year there are individuals who are born without a limb or lose a limb at different stages of their life due to vascular diseases, diabetes or trauma. There are also individuals who develop knee pain, are diagnosed with osteoarthritis in their joints, incur fractures to their ligaments or injure themselves resulting in movement impairment. Össur’s mission is to help these individuals regain their mobility by developing, producing, and providing them with prosthetic and bracing solutions.
In 2017 alone, our solutions helped millions of users improve their mobility, so they can live their life without limitations
Össur is a pioneer of advanced technology where our brand recognition is based on innovative and scientifically-proven solutions that deliver effective clinical outcomes. By researching and understanding people’s needs and pushing the boundaries of advanced technology, we continue to develop amongst the most effective solutions and services available in the fields of prosthetics and bracing & supports. Every year between 4-5% of Össur’s sales is re-invested in research & development with roughly 150 full-time employees working on new innovative products for the benefit of our users. In 2017 we introduced more than 30 prosthetics products and more than 10 bracing & supports products to the market.
Össur operates within two market segments of the orthopaedic market: bracing & supports and prosthetics. Prosthetic products include artificial limbs and related products for amputees. Bracing & supports products are primarily used to support joints and other body parts, both for preventive and therapeutic purposes.
For years Össur has helped people focus on new goals rather than limitations by offering comprehensive solutions that are designed with the needs of the user top of mind. Össur’s prosthetics portfolio includes a full spectrum of premium lower and upper limb prosthetic components. The portfolio ranges from solutions to support less active individuals who may struggle to maintain the ideal balance of safety, comfort, and mobility all the way to solutions designed to enable especially active people to engage in high-impact endeavors.
Össur’s osteoarthritis (OA) solutions are designed to enhance quality of life, reduce pain, and improve mobility for people living with osteoarthritis. The Össur Unloader® brand name has become synonymous with OA bracing, representing OA Solutions’ technology as the industry standard, with more than 15 clinical studies demonstrating its efficacy. Össur offers the Unloader One® and Unloader One® Lite knee braces that relieve pain from knee osteoarthritis, as well as the Unloader ® Hip which is designed to reduce pain by optimizing load dispersion for patients suffering from mild and moderate osteoarthritis of the hip.
Össur’s injury solutions are designed for people recovering from fractures, ligament injuries or for those in need of post-operative treatment solutions. These solutions are designed to enhance the healing process of bone and soft tissue injuries. Össur Injury Solutions are globally recognized, primarily under the brand names CTi®, Rebound®, Miami® and Form Fit®. Many Rebound® solutions furthermore come with the Functional Healing seal which identifies Össur Rebound products designed for indication-based protocols. It signifies a healing solution that helps enhance the body’s natural healing process while maximizing mobility.
