Underlying Q1 growth intriguingly good

Solid 7% organic growth in Q1, underlying was even better. Another $3m in restructuring costs reveals margin pressure. Maintain FV 25-37 after smaller EPS changes.

Embla Medical (Buy, TP: DKK39.00) - Solid start to 2024

Embla Medical’s (formerly Össur’s) organic growth print in Q1 was solid, 7% above consensus of 5.6%. Reported margins were somewhat soft on unexpected one-offs related to cost saving initiatives, but underlying margins were in line with consensus, and the commentary from management about the gross-margin trajectory for the remainder of 2024 was supportive. On limited estimate changes, we reiterate our BUY and DKK39 target price.

Embla Medical (Buy, TP: DKK39.00) - Q1 set to build momentum

We expect Embla Medical (formerly Ossur) to report another solid organic growth quarter, despite tough comparables and Easter effects. We forecast the bionics portfolio to continue to drive prosthetics growth, with more muted growth in Bracing and Support and Patient Care. While we expect the EBIT margin to expand YOY in Q1, and continue to build throughout 2024, we estimate previously taken cost savings to have less effect in the quarter. We reiterate our BUY and DKK39 target price.

Ossur (Buy, TP: DKK39.00) - Mixed Q4, supportive 2024 guidance

The Q4 results were mixed, with a comfortable beat on organic growth but below-consensus margins. The 2024 guidance was above consensus for organic growth and the EBITDA margin. We still like Ossur, and reiterate our BUY and DKK39 target price.

Ossur (Buy, TP: DKK39.00) - Q4e another solid quarter

In line with consensus, we expect Q4 to mark a solid end to 2023, driven by strong prosthetics growth and more muted growth for the rest of the business. We expect a strong Q4 EBITDA margin, finishing the year at a high of c20%. We expect more clarity on the proposed Medicare reimbursement changes with the Q4 results (due at 08:00 CET on 30 January) and estimate that the changes could more than double the US bionic knee market over time. We reiterate our BUY and DKK39 target price.

Ossur (Buy, TP: DKK39.00) - Robust Q3 top line

Össur reported another strong top-line quarter, in line with our estimates and consensus, driven by still-strong bionic demand. The EBITDA margin was stronger than we expected despite still-high unit costs, supported by cost savings. Based on the results and the maintained 2023 guidance, we see the case as unchanged. We reiterate our BUY and DKK39 target price.

Ossur (Buy, TP: DKK39.00) - Q3e top line to keep marching on

We expect another strong top-line quarter with c8% organic growth YOY, slightly below recent quarters (c11% in Q2) on tougher comparables, Margins are, however, likely to remain under pressure from still-high costs. Based on strong growth momentum, we believe Ossur could raise its 2023 growth guidance and narrow its EBITDA margin guidance to the middle on still-high costs. We reiterate our BUY and DKK39 target price.

Northern Lights

Ossur (Buy, TP: DKK39.00) - Sales momentum accelerates

Ossur’s strong top-line momentum surprised yet again in Q2, with accelerating organic growth driven by strong bionics demand, while the EBITDA margin just missed expectations, albeit improving, and seems set for more, in our view. Despite tougher comparables ahead, we believe the new top-line guidance looks conservative. We reiterate our BUY and DKK39 target price.

Northern Lights

Ossur (Buy, TP: DKK39.00) - Q2e likely another strong quarter

We expect Ossur’s growth momentum to have continued in Q2, with c10% YOY organic growth (c9% in Q1) and its EBITDA margin increasing QOQ to c19%. Based on a likely strong H1e, we believe Ossur could raise its full-year guidance with its Q2 results. We reiterate our BUY and DKK39 target price.

Northern Lights

Ossur (Buy, TP: DKK39.00) - Strong sales momentum

The Q1 results were much stronger than expected on the top line (even excluding pricing), while the EBITDA margin remained under pressure from inflation (although it should improve through the year). Considering the Q1 results, the maintained 2023 guidance looks very conservative to us, especially on the top line. We reiterate our BUY and DKK39 target price.

Northern Lights

Ossur (Buy, TP: DKK39.00) - Likely strong start to the year

We expect a strong Q1 report (due 08:00 CET on 25 April), driven by a continued healthy rebound in bionics sales and recent price increases. In turn, we believe Össur could at least narrow its 2023 guidance towards the higher end with the results. We reiterate our BUY and DKK39 target price.

Northern Lights

Ossur (Buy, TP: DKK39.00) - Broadening its horizons

Today, we attended Ossur’s CMD in Copenhagen, where the company presented its new strategy, Growth’27. Overall, we see the strategy to transition from a product company to a patient-driven one as credible and expect this, along with an improved business mix, to help Ossur achieve its new long-term organic growth target of 5–7%. However, the long-term EBITDA margin outlook remains less clear to us, with M&A likely to drive fluctuation. We reiterate our BUY and DKK39 target price.

Ossur (Buy, TP: DKK39.00) - Soft but improving 2023 outlook

The Q4 results and 2023 guidance were somewhat soft but encouraging, as the report a showed a strong rebound in bionic sales, driven by solid demand for the power knee. We still see the headwinds as short-term and believe things will improve throughout 2023, while the short-term focus is likely to move to the end-March CMD. We reiterate our BUY and DKK39 target price.

Ossur (Buy, TP: DKK39.00) - Focus on 2023 guidance

We expect Össur’s 2022 results (Q4 report due at 08:00 CET on 31 January) to be at the low end of its guidance, but this is unlikely to come as a surprise. Instead, focus will likely be on the 2023 guidance, which we expect to be boosted by further price increases, and we expect the company to confirm a CMD – which could include a strategy update – at end-March. We reiterate our BUY and have raised our target price to DKK39 (37).

Sector Fast Comment - Hospital data update

Better hospital margins in September Weaker procedure volume momentum into Q4 Small positive for capex exposure