Embla Medical Hf S/Adr

At this time, I would like to welcome everyone to this emblematical Q4 and annual report for 2025 conference call. Today's call is being recorded. If you have any objections, please disconnect at this time. Throughout the presentation, all participants will be in a listen-only mode. Afterwards, there will be a question and answer session. To ask a question during the Q&A, please press 5-star on your telephone keypad. I'll now turn the call over to your speakers. You may now begin.

Thank you very much, operator. Good morning, and welcome to the Ampla Medical conference call, where we will review the fourth quarter and full year results for 2025. I'm Sved Solvason, President and CEO of Ampla Medical. Today, also joining me here is our Chief Financial Officer, Artna Svensdottir, and Ampla Medical's Head of Investor Relations, Klaus Sintas. 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. 2025 was a year of meaningful progress for Ample Medical, with several milestones as we continue to take steps on our journey to build a company that is focused on delivering products and services for individuals with a chronic as well as acute mobility need. The need for our solutions remains as strong as ever and once again our team delivered with focus and purpose. I want to take the opportunity to recap some of the key highlights on this slide. In September we completed the majority investment in Stryphonator. The investment marks a key milestone for Ampla Medical positioning us as a full range provider in the prosthetics market while strengthening our presence in key markets, especially private pay markets with less developed healthcare systems. In addition, Stripe Network will help us expand our reach and ultimately enable us to reach more patients that need our products. Innovation remains at the heart of our progress. In 2025, we introduced new impactful solutions, including two new bionic knees, Navi and Icon, as well as the Odyssey IQ8 bionic foot. We're also pleased to see that Turing-Gentz was awarded its first reimbursement code in the United States last summer for their microprocessor-controlled knee joint. Another meaningful milestone I also wanted to highlight is the opening of our first clinic in Ukraine. Establishing a presence in Ukraine during a very difficult time underscores our commitment to ensuring access to high quality mobility care. In conjunction with the opening of our Kiev clinic, we also announced a landmark partnership with the government of Iceland to launch the Iceland Support Mobility in Ukraine initiative. This initiative is a three year program designed to deliver high quality prosthetic care and rehabilitation to Ukrainian amputees. Lastly, I'm also proud that AmpliMedical earned a place among the world's top 500 companies pairing strong growth with environmental responsibility. This was the second consecutive year AmpliMedical was highlighted as one of the world's best companies in sustainable growth. Please turn to the next slide for an overview of the key highlights for the fourth quarter and full year. In 2025, we delivered solid organic sales growth with increasing underlying profitability as well as strong cash flow. For the full year, organic sales growth was 6% driven by strong performance in prosthetics and neuro-orthotics. Reported growth was 9% and growth in local currency was 7% for 2025, including contribution from the majority investment in Streifenetter, which was completed as earlier mentioned in September. Sales in the fourth quarter amounted to 257 million, representing 7% organic growth. Our reported growth was 40% for the quarter, including five percentage points contribution from FX and three points from M&A. Growth in the fourth quarter was solid, driven again by the prosthetics and neuro-orthotics segment, as well as also now patient care, where sales picked up in quarter four with a strong finish to the year. The EBITDA margin came in at 20% for the full year on par with 24. For the fourth quarter, the EBITDA margin was 19% compared to 21% in quarter four, 24, and Artna will elaborate on that later. We delivered strong cash flow in the quarter and full year as well, benefiting from solid operating results and lower capex compared to the same period in 24. During the fourth quarter, we continue to roll out of our Formotion brand at several patient care facilities in the US and Australia. And we expect our global rebranding to complete in the first quarter this year. In patient care, we have implemented several initiatives during last year to enhance long-term growth and profitability in our patient care business. And I'll add a little bit more color on that also later. I also want to highlight progress in our R&D in the fourth quarter with two important product launches during the quarter. Proflex LP Junior by Usher is a new prosthetic ankle and foot designed for active young users delivering enhanced durability and waterproof performance. In our power portfolio, we have updates for our Power Knee with functional improvements enhancing both mobility and adoption of power solutions. Lastly, we have issued new guidance for 2026 of 5% to 8% organic sales growth and an EBITDA margin of 20% to 22%. And in line with our capital structure and capital allocation policy, a new share buyback program was initiated here in the beginning of January. Please turn to the next slide. In both EMEA and APAC regions, we had strong sales growth in the fourth quarter. Sales were very strong in the EMEA region with 12% growth, while APAC delivered 9%. Americas ended, however, flat following a good third quarter. And we'll cover the dynamics in each of our reporting segments on the following slide. If you turn to the next slide, please. Starting with prosthetics and neuro-orthotics, we delivered 9% organic sales growth for the coaster and 10% for the full year. In EMEA, we continue to see strong momentum in the coaster with good sales growth across all major markets driven by solid contribution from recently launched innovations. In addition, we see very encouraging and strong organic contribution in the coaster from the newly acquired Stripenator. Growth in the Americas was moderate after a strong quarter three and somewhat below our expectations. The weaker performance in the fourth quarter is partly explained by a strong comparison with the same period in 24. Meanwhile, we remain encouraged with the progress as we saw strong sales growth, especially in our college park portfolio driven by the Iconi and the new Odyssey IQ. Lastly, solid growth in APAC, driven by Australia, while partly offset by more moderate growth in the rest of Asia. In new orthotics, the business continues to track in line with expectations following the expansion into new international markets in the last 12 to 18 months. Sales growth in the fourth quarter was very solid, driven by continued growth momentum in our existing German business and supported by good uptake in new markets such as Australia and France. To turn to the next slide, please, on bracing. Sales in bracing and supports were soft in the fourth quarter and for the full year with some regional variances. Sales performance in 2025 continues to be impacted by shift in market dynamics and price sensitivity, causing partial loss of business in addition to an overall just an increasing and a very competitive environment. Antler Medical has a very good position in the key bracing markets in both the U.S. and Europe, and we expect to grow in line with market here in 26, supported by focused initiatives as well as new product launches. Next slide, please. Sales in patient care picked up in quarter four with a strong finish to the year. In May, we saw strong growth return across our key markets. Meanwhile, America's ended down in the quarter due to partly a very strong comparable quarter in 24. Despite the declining sales in America, we see very encouraging signs, results of the work we're doing. to get our patient care business back on track. Lastly, we saw a strong finish to the year in APAC, driven by very solid performance in Australia. As communicated in the third quarter of 2025, our patient care business has, over the last few quarters, experienced lower than expected growth, mainly in our biggest regions, both EMEA and Americas, The performance can partly be ascribed to some softness and timing or fluctuations in patient volumes, especially in the first courses of the year, but also these internal change initiatives, including the brand change, systems integrations, and other change initiatives that have had some disruption or caused some disruption in our business temporarily. We have several initiatives that are being implemented in our patient care business with heavy focus on performance management to strengthen the long-term growth and profitability of this important segment. It's our clear vision to get the patient care business back on track and deliver in line with the structural growth we see elsewhere in the O&P industry. With this overview of our performance for the quarter and year, I would like to now hand it over to you, Artna, to go through the financials in more detail. Artna, please.

Yes, thank you, Sveit. If you can please turn to the next slide for an overview of our financials. In Q4, the gross profit margin was 62% compared to 63% in the comparable period 2024. The gross profit margin was positively impacted by strong sales in prosthetic and neuro-orthotics, and efficiency gains in manufacturing, but offset by effects, tariffs, and initiatives in patient care. For the full year, the gross profit margin was 62%, largely explained by the same items as for the quarter. Opus grew organically 7% in the fourth quarter, But excluding the initiatives in patient care, OPEX grew organic below sales growth. In line, we continued to focus on cost management on the SG&A side. Our EBITDA margin was 90% for the quarter, compared to 21% in Q4 2024. While the margin was 20% in the full year and on par with 2024. While the EBITDA margin was positively impacted by strong sales growth and efficiency manufacturing, it was negatively impacted by FX, tariffs, and initiatives in patient care. The initiatives in patient care impacted both COGS and OPEX by approximately $2 million in the quarter and around $6 million in the full year. If you sum up the impact of the patient care initiatives, FX, and tariffs, the total impact on EBITDA margin was around 3 percentage points in the quarter and 1.5 percentage points in the full year. I'm very pleased to see that we delivered strong net profit in the quarter, which grew 33 percent compared to the same period in 24. And our net profit for the full year grew 21 percent compared to 24. If you please turn to the next slide for the status on our cash flow and leverage. During the first quarter CAPEX was $8 million or 3% relative to sales. CAPEX in 2025 returned to normalized level around 3% to 4% following closure of Facilitate Expansion Program carried out in 24 to support growth. Our free cash flow was strong in the quarter as it generated 42 million compared to 33 million for the same period last year. The strong cash flow benefited from solid operating results, positive effect from net working capital, and normalized capex levels. For the full year 25, free cash flow amounted to 100 million, or 11% of sales, compared to 77 million, or 9% of sales in 2024. On the balance sheet, our net interest rate in debt to EBITDA corresponded to 2.4 times at year end, and within the range of two to three times. As we are within our target range, we continue with our Shared VibeWalk program. And with this overview on our finals, I will hand over to Sven again for his closing remarks and comment around our guidance.