February 7, 2017

Össur Posts 4Q, Full Year 2016 Results

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Össur, Reykjavik, Iceland, has reported its fourth quarter (4Q) and full year (FY) 2016 financial results, as follows.

4Q 2016 Highlights
  • Sales were US $138 million compared to US $125 million in 4Q 2015, corresponding to local currency growth (LCY) of 13 percent and 4 percent organic growth.
  • Gross profit was US $87 million or 63 percent of sales, compared to US $78 million or 63 percent of sales in 4Q 2015.
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA) were US $26 million or 19 percent of sales, compared to US $25 million or 20 percent of sales in 4Q 2015.
  • Net profit was US $14 million or 10 percent of sales, compared to US $13 million or 10 percent of sales in 4Q 2015.
  • Cash flow from operations was US $28 million or 20 percent of sales, compared to US $31 million or 25 percent of sales in 4Q 2015.
  • The safe harbor share buyback program that was launched in December 2015 ended in November 2016. A new share buyback program was initiated in December 2016 where the company may purchase up to five million shares.
  • In December, Össur signed a €50 million financing agreement with Nordic Investment Bank.
Full Year 2016 Highlights
  • Sales were US $521 million compared to US $483 million in 2015, corresponding to LCY of 9 percent and 4 percent organic growth. Bracing and supports sales grew 2 percent and 2 percent organic, and prosthetics sales grew 19 percent and 7 percent organic, all measured in local currency.
  • Gross profit was US $328 million or 63 percent of sales, compared to US $303 million or 63 percent of sales in 2015.
  • EBITDA before special items were US $98 million or 19 percent of sales, compared to US $99 million or 20 percent of sales in 2015.
  • Net profit was US $51 million or 10 percent of sales, compared to US $51 million or 11 percent of sales in 2015.
  • Changes in foreign exchange rates had a negative impact on the reported sales and profits when comparing to prior year results.
  • Cash flow from operations was US $88 million or 17 percent of sales, compared to USD 84 million or 17 percent of sales in 2015. Capital expenditure to net sales was 4.7 percent.
  • The board of directors will propose to the annual general meeting that the company pays a cash dividend of DKK 0.12 per share for 2016, equivalent to 15 percent of net profit in 2016.
  • In 2016, Össur purchased 7,853,968 of its own shares for about DKK 193 million (US $30 million).

The board of directors will also propose to the annual general meeting to reduce the share capital by cancelling 5,837,832 of the company’s own shares.

Financial Guidance for 2017

Össur provided the following financial guidance for 2017:
  • Sales growth LCY of 7-8 percent
  • Organic sales growth LCY of 4-5 percent
  • EBITDA before special items margin of 19-20 percent
  • Capital expenditures around 4 percent of net sales
  • Effective tax rate around 26 percent
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