EUR 84.28 For Business Accounts Only

Ossur (Buy, TP: DKK51.50) - Q4 set for sequential improvement

We expect Ossur to report a decent end to the year (Q4 results due at 08:00 CET on 2 February), with sequential improvements all round, supported by easy comparables and pent-up demand. The focus is likely to be on the 2021 guidance, which could be wide to reflect new Covid-19 restrictions and competitive bidding. We have made minor estimate changes and reiterate our DKK51.5 target price and BUY. Set for sequential improvements in Q4. We expect 0.5% organic sales growth in Q4 (consensus -2.1%), the first quarter in 2020 with positive organic sales growth as the pandemic has hit hard (especially the bracing and supports business). We see this improvement driven by pent-up demand before new restrictions hit late in the quarter, and easy comparables, while we expect the divestment of Gibaud that took place in Q4 to put pressure on reported sales, largely offsetting FX tailwinds. Profitability also set to improve. Similarly to Q3, we expect the better sales momentum to offer good operational leverage and hence improved profitability. We forecast a 22.8% EBITDA margin in Q4 (consensus 21.3%) – roughly the level prior to Covid-19 – indicating that profitability could return to previous levels when volumes normalise post-pandemic. We note the divestment of Gibaud should have a positive effect on the EBITDA margin.