Embla Medical Hf S/Adr

Welcome to this EMPLAIR Medical Full Year Results 2024 presentation. Today's call is being recorded. If you have any objections to this, please disconnect your line. All participants will be in a listen-only mode throughout the presentation, and afterwards, there will be a question and answer session. I would like to introduce CEO Svend Solvason and CFO Anna Svendsdottir. Please begin your presentation.

Thank you very much. Good morning and welcome to the AmpliMedical conference call where we will review the fourth course and full year results for 2024. I'm Fred Sjölvason, President and CEO of AmpliMedical. And joining me on today's call is our CFO Sven Stotte and AmpliMedical's Head of Investor Relations. The presentation should take approximately 20 minutes after which there will be an opportunity to ask questions during a Q&A session. If you can please go to the next slide. As we look back on an eventful 2024, what stands out is delivering on our relentless commitment to improving people's mobility. Our innovative product solutions and patient care has a positive impact on millions of individuals around the world. The past year was marked by several milestones as we continue to take steps on our journey to build a company that is focused on delivering products and service for individuals with a chronic as well as acute mobility need. This includes the establishment of Andromedical, starting to also unite our patient care facilities on the promotion brand and the acquisition of your engines, also to name a few. Additionally, we are seeing positive market trends such as expanded U.S. Medicare coverage for advanced bionic prosthetics for less mobile K2 amputees, bringing potential for improved quality of life for a large patient population. I'm also very happy with our progress within R&D as we launched several exciting innovations during COVID. the year, and these include, amongst others, the bionic knees icon and Navi. Lastly, I want to highlight the Paralympic Games in Paris. In the latter part of the summer here, a global team of elite para-athletes using their renowned prosthetics won 22 medals and set five new Paralympic records. And if you please turn to the next slide for an overview of some of the key highlights here in the fourth quarter. Throughout 2024, we have delivered solid organic sales growth with also increasing profitability. For the full year, our organic sales growth was 6%, driven by a strong performance in our mayor region, as well as the prosthetics, neuro-orthotics, and patient care segments. Growth in local currency was 9% when we reviewed the impact of the acquisition of Fiori Gens that we completed in the beginning of the year. The fourth quarter isolation grew slightly lower than the full year of 5% organic mainly due to a stronger comparable in our patient care business where we had somewhat of an extraordinary strong quarter in 2023. EBITDA margin before special items came in strong for the quarter at 21%, and for the full-year margin was 20%, up two percentage points from 2023. We continue to see positive effects from cost reduction initiatives implemented in manufacturing during quarter one, as well as positive contribution from product mix and cost control in our FD&M costs. In addition, here in COP24 we've delivered strong cash flow. We are receiving very good initial feedback on our recently launched bionic knee. The Nadi knee is receiving a very positive response as being a much smoother and reactive knee joint, while still offering a more stable and safer gait for amputees. Both Navi and Icon continue to be in limited launch, with full launch expected towards the latter half of the quarter, here in the beginning of the year. 12 months ago, as I mentioned earlier, we acquired Shuri Gens, which is a leading maker of lower limb neuro-optic components. The acquisition was an important step in our growth journey and expansion into the field of neuro-optics. a field we are optimistic about as we are, as a company, broadening our ability to support individuals with chronic mobility challenges. We're pleased to see good progress on the integration of current gants. In the fourth quarter, we have started to roll out the new orthotics portfolio in the US, France, and Switzerland, leveraging our commercial infrastructure in these markets to with the ultimate objective of bringing these solutions to more patients. On the patient care front, we announced our intent to unite our network of patient care facilities under a new common brand, Formotion. And Formotion brand continues to be introduced gradually to the markets we operate in within patient care. During the fourth quarter, we rebranded our clinics in Denmark and a few locations in the U.S., while Norway is on the agenda here close to one. And it's our expectation that we will complete the rebranding in most of our patient care locations this year. For 2025, we've issued new guidance of 5% to 8% organic sales growth, coupled with guidance of delivering a 20% to 21% EBITDA margin before specialized use. Lastly, in line with our capital structure and capital allocation policy, a new shared buyback program is to be initiated as planned, as we are back within our target range of two to three times net interest rate at the OED. And we expect to announce more details around this program as soon as possible. If you please turn to the next slide. Sales in Americas were strong in the quarter after a period of slower growth and tougher comparisons. The 7% growth in quarter 4 was driven by solid organic sales growth in our prosthetics and neuro-orthotics business as well as good growth in patient care. In bionics, we're seeing some initial traction during the limited launch period with our recently launched Navi and Icon bionic knees. In the EMEA region, the strong growth trajectory we've seen in the past quarters in this part of our business continued. Sales in our patient care business in the EMEA region were, however, soft in the quarter and mainly related to a strong comparable quarter in quarter four, 23, as I mentioned earlier, impacted the reported growth rate here in quarter four. And lastly, in APAC, we've seen a more Modest performance for the quarter prosthetics and neuro-orthoptics demonstrated good growth in the region, driven by Australia and New Zealand, which was partly offset by softer performance in some of our largest markets in the Asia region. If you please turn to the next slide on going deeper into the segments. starting with prosthetics and neural optics, we delivered 12% organic growth here in the quarter and 9% for the full year. In EMEA, we continue to see a strong momentum driven by a volume of growth across all major markets, including also good progress on bionics. In Americas, also across all major product categories, including bionics with some contribution, as I mentioned earlier, from Navi and Icon. In APAC, also good performance in our prosthetics and new orthotic segments. And as I mentioned earlier, a little slowdown in some of the Asia markets. And lastly, here, part of the new orthotic segment is our pure and dense business, which continues to deliver in line with our expectations, as the expectations we set when we did the acquisition a year ago. To turn to the next slide, please, on bracing, bracing and support sales grew by 2% organically in Q4 and 1% for the full year. Growth in our bracing and support business has been impacted by, I would say, somewhat of a challenging market dynamic in selected product categories, mainly in our Americas market. We have, however, seen positive signs with increased uptake during the fourth quarter, driven mainly by our away business in European markets. During most of 2014, growth in the Americas was impacted following the cyber attack at UnitedHealthcare in the early quarters of the year. That had a big impact on our customers' ability to process reimbursement claims. And APAC sales were strong in in particularly Australia and New Zealand, but as with prosthetics and neuroendotic soft in some of the large Asian markets. So the next slide, please. Sales in the patient care segment amounted to $80 million here in Kosovo, and our organic sales declined by 1%. For the school year, our organic sales growth was 5%. Looking at the regions, we delivered solid sales growth in Americas, mainly driven by good uptake and good volume development in key regions, but offset by softer sales in the May and APAC region, where, again, I'll refer to a particularly strong quarter in the comparable year last year. Now, this concludes the sales performance overview for the quarter, and I would like to hand it over to Artna to go through the financials in more detail. Artna, please.

Thank you. Please turn to the next slide for an overview of our financials. In Q4, the gross profit margin was 63% of sales, compared to 61% in Q4 2023. The 2% point gross profit margin Margin expansion for the quarter was supported by cost reduction initiatives in manufacturing, implemented during Q1 2024, in addition to positive product mix, scalability, and manufacturing efficiency. For the full year 2024, gross profit margin before special items was 63%, compared to 62% of sales in 2023. We are pleased to see that Opus growth continues to be well managed, In Q4, OPEX grew 5% organically, as we saw effective cost control and scalability in SG&A costs being partially offset by investment in R&D. Currencies impacted our EBITDA margin positively by roughly 40 basis points for the quarter. With an increase in gross profit margin and continued focus on effective cost control in our operational expenses, I'm pleased to report another strong quarter with our EBITDA margin reaching 21%, which is 3 percentage points after Q4 2023. For the full year 2024, our EBITDA margin before special items was 20% for sale compared to 18% in 2023, a 2 percentage point increase between years. The increase in our EBITDA margin was driven by chain drivers as for Q4. However, the currency impact, NAFTA hedging, was not so compared to 2023. Net profit came in at $19 million, or 8% of sales for the quarter, and was on par with Q4 2023. For the full year, net profit grew 70% and amounted to $69 million, or 8% of sales. compared to $59 million for 10% of sales in 2023. Net profits were positively impacted by strong growth in profit during the year, but negatively impacted by net financial items, driven by negative impacts on balanced items due to currency movements. Please turn to the next slide for a status on our cash flow and leverage. During the fourth quarter, CapEx was $8 million and below 4% of sales. CapEx has come down in the last couple of quarters relative to the first part of 2024, as facility expansion programs to support our growth have now been concluded. All things equal, CapEx is expected to return to a more normalized level of 3% to 4% of sales in the coming periods. In the fourth quarter, we continue to deliver strong cash flow, driven by solid cash generation from our operations. Additionally, positive effects come in promoting capital and lower capital contribution to stronger cash flow. Inventories remain slightly elevated following the buildup of new bionic solutions in preparation for full launch of our two bionics new solutions, as mentioned earlier. On the left, we see our net interest-bearing debt to EBITDA ratio returned to our targeted range of 2 to 3 times EBITDA. At the near end, our net interest-bearing debt to EBITDA before special items was 2.4 times. As announced by the second beginning of this call, we will initiate a new shareback program, and further details on the program will be communicated shortly. With this, I will hand over to you again.