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Embla Medical hf
Quarterly Report • Feb 5, 2025
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Quarterly Report
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Interim Report Q4 2024 Announcement no. 1/2025
Sveinn Sölvason, President and CEO, comments:
"Sales in Q4 2024 amounted to USD 225 million, where our organic sales growth was 5% for the quarter and local currency growth was 8%. The continued strong momentum we have seen throughout the year in our Prosthetics & Neuro Orthotics business continued to drive our growth, supported by good growth contribution across all our regions. Bracing & Supports sales growth was modest for the quarter while sales in Patient Care declined, impacted by a strong comparison. For the full year 2024, our organic sales growth was 6%, driven by a strong performance in EMEA and our Prosthetics & Neuro Orthotics and Patient Care segments.
EBITDA margin (before special items) came in strong at 21% for Q4 and 20% for the full year. We continue to see the positive effects from the cost reduction initiatives implemented in manufacturing during Q1 2024 as well as positive contributions from product mix and cost control in SG&A. In addition, we also saw strong cash flow generated for the quarter with USD 34 million or equivalent to 15% of sales.
We are very pleased with the progress on our Growth'27 strategy and ability to execute on our ambitious targets and priorities such as the Fior & Gentz acquisition we completed in January 2024, starting to unify our Patient Care business under the ForMotion brand and delivering exciting new innovation. These initiatives are all enabling us to reach even more people with our mobility solutions. Lastly, we have issued new guidance for 2025 of 5-8% organic sales growth and 20-21% EBITDA margin before special items."
Highlights Q4 2024
- Sales amounted to USD 225 million and organic growth was 5%, compared to 9% in Q4 2023. Local currency sales growth was 8% including acquisitions and 7% reported growth in USD. For FY 2024, organic sales growth was 6%.
- Prosthetics & Neuro Orthotics sales grew by 12% organic, Bracing & Supports sales grew by 2% organic, while Patient Care sales declined by 1% organic in Q4 2024 due to a strong comparison in Q4 2023. For FY 2024, Prosthetics & Neuro Orthotics sales grew by 9% organic, Bracing & Supports sales grew by 1% organic and Patient Care sales grew by 5% organic. Growth is attributed to solid volume growth and positive product mix supported by strong performance in our high-end solutions.
- Gross profit was USD 142 million and gross profit margin was 63%, compared to 61% in Q4 2023. For FY 2024, the gross profit margin was 63% compared to 62% in 2023. The gross profit margin was positively impacted by cost reduction initiatives in manufacturing implemented during the first quarter of 2024, as well as favorable product mix and manufacturing efficiency.
- EBITDA amounted to USD 47 million and EBITDA margin was 21% of sales, compared to 18% in Q4 2023. In FY 2024, EBITDA margin before special items increased to 20% compared to 18% for FY 2023. The EBITDA margin expansion was driven by strong sales performance, cost savings and efficiency in manufacturing, and effective cost control in SG&A.
- Net profit was USD 19 million and net profit margin was 8% of sales, compared to 9% of sales in Q4 2023. While stronger operating profit contributed positively to net profit in Q4 2024, financial expenses and net exchange rate differences due to currency fluctuations impacted net profit negatively. In FY 2024, net profit grew by 17% and the net profit margin increased to 8% compared to 7% in FY 2023.
- Free cash flow amounted to USD 34 million or 15% of sales, compared to 13% of sales in Q4 2023. In FY 2024, free cash flow amounted to 9% of sales compared to 7% of sales in FY 2023, with the increase driven by stronger operation profit.
- NIBD/EBITDA before special items was 2.4x at the end of Q4 2024, within our target range of 2-3x EBITDA in line with our capital structure and capital allocation policy. Therefore, the share buyback program is to be reinitiated shortly.
Other highlights
▪ In December 2024 Embla Medical (Össur) was ranked #41 and highlighted as one of the World's Best Companies in Sustainable Growth 2025 by TIME Magazine. The ranking, developed by TIME and Statista, a leading data analytics platform, names 500 companies pairing growth with environmental stewardship. The survey evaluated companies based on their environmental disclosure and scored them according to their revenue growth, financial stability, and environmental impact.
2025 Outlook
- Organic sales growth guidance of 5-8%, driven by strong volume growth and moderate price increases.
- EBITDA margin guidance of 20-21%, driven by scale and efficiency coupled with continued focus on cost control in SG&A.
| 2024 | 2023 | Q4 2024 | Q4 2023 | Guidance 2025 | |
|---|---|---|---|---|---|
| Sales growth, organic | 6% | 9% | 5% | 9% | 5-8% |
| EBITDA margin | 20% | 18% | 21% | 18% | 20-21% |
| Q4 | Q4 | FY | FY | FY | FY | FY | ||
|---|---|---|---|---|---|---|---|---|
| USD millions | 2024 | 2023 | 2024 | 2023 | 2022 | 2021 | 2020 | |
| Income Statement | ||||||||
| Net sales | 225 | 210 | 855 | 786 | 719 | 719 | 630 | |
| Gross profit | 142 | 129 | 535 | 486 | 440 | 455 | 391 | |
| Operating expenses (excl. other income / exp.) | 110 | 104 | 422 | 398 | 373 | 360 | 338 | |
| EBITDA | 47 | 37 | 169 | 139 | 114 | 149 | 93 | |
| EBITDA before special items | 47 | 37 | 173 | 139 | 128 | 149 | 93 | |
| EBIT | 32 | 25 | 113 | 89 | 65 | 97 | 28 | |
| Net profit | 19 | 19 | 69 | 59 | 43 | 66 | 8 | |
| Sales Growth | ||||||||
| Sales growth USD | % | 7 | 10 | 9 | 9 | 0 | 14 | (8) |
| Growth breakdown: | ||||||||
| Organic growth | % | 5 | 9 | 6 | 9 | 4 | 10 | (10) |
| Currency effect | % | (1) | 1 | 0 | (1) | (7) | 3 | 0 |
| Acquired business | % | 3 | 0 | 3 | 1 | 3 | 1 | 2 |
| Balance Sheet | ||||||||
| Total assets | 1,539 | 1,386 1,539 | 1,386 | 1,325 | 1,247 | 1,214 | ||
| Equity | 781 | 705 | 781 | 705 | 636 | 627 | 577 | |
| Net interest-bearing debt (NIBD) | 414 | 395 | 414 | 395 | 404 | 363 | 381 | |
| Cash Flow | ||||||||
| Cash generated by operations | 54 | 46 | 160 | 126 | 92 | 128 | 119 | |
| Free cash flow | 34 | 26 | 77 | 52 | 35 | 74 | 68 | |
| Key Ratios | ||||||||
| Gross profit margin | % | 63 | 61 | 63 | 62 | 61 | 63 | 62 |
| EBIT margin | % | 14 | 12 | 13 | 11 | 9 | 14 | 4 |
| EBITDA margin | % | 21 | 18 | 20 | 18 | 16 | 21 | 15 |
| EBITDA margin before special items | % | 21 | 18 | 20 | 18 | 18 | 21 | 15 |
| Equity ratio | % | 51 | 51 | 51 | 51 | 48 | 50 | 48 |
| Net debt to EBITDA before special items* | 2.4 | 2.8 | 2.4 | 2.8 | 3.2 | 2.4 | 4.1 | |
| Effective tax rate | % | 25 | 21 | 24 | 23 | 23 | 24 | 38 |
| Return on equity* | % | 9 | 9 | 9 | 9 | 7 | 11 | 1 |
| CAPEX / Net sales | % | 3.6 | 4.9 | 4.6 | 5.4 | 3.6 | 3.7 | 3.8 |
| Market | ||||||||
| Market value of equity | 2,125 | 1,713 2,125 | 1,713 | 2,035 | 2,724 | 3,380 | ||
| Number of shares in millions | 428 | 421 | 428 | 421 | 423 | 423 | 423 | |
| Basic EPS in US cents | 4.4 | 4.5 | 16.2 | 14.0 | 10.3 | 15.6 | 1.9 | |
| Diluted EPS in US cents | 4.4 | 4.5 | 16.2 | 14.0 | 10.3 | 15.5 | 1.9 |
* Financial ratios are based on operations for the preceding 12 months.
Management's report
Financial performance
Sales
Sales increased by 5% organic in Q4 2024
30 April 2020 Announcement no.
Interim report Q4
Sales performance in line with expectations
Össur guidane suspended
27/2020
2023
Negative FX impact of USD 1M in Q4 2024
Sales in FY 2024 amounted to USD 855 million, compared to USD 786 million in 2023, corresponding to 6% organic growth, 9% increase including acquisitions (local currency growth) and 9% reported growth (USD growth). Sales in Q4 2024 amounted to USD 225 million, compared to USD 210 million in Q4 2023, corresponding to 5% organic growth, 8% increase including acquisitions (local currency growth) and 7% reported growth (USD growth).
Impact on sales from acquisitions amounted to USD 5 million in Q4 2024 corresponding to about a 3% point positive effect on the reported growth rate. Currency impact on reported sales was negative by 1% point or 1 million USD in Q4 2024, mainly due to a stronger USD against the EUR.
| Sales by geographical segment (USD million) |
2024 | Q4 Organic growth |
Δ Acq. | Δ Curr. effect |
USD growth |
2024 | FY Organic growth |
Δ Acq. | Δ Curr. effect |
USD growth |
|---|---|---|---|---|---|---|---|---|---|---|
| Americas | 107 | 7% | 0% | (1%) | 6% | 393 | 3% | 0% | 0% | 2% |
| EMEA | 101 | 4% | 6% | (1%) | 9% | 395 | 10% | 7% | 0% | 17% |
| APAC | 17 | 3% | 0% | (1%) | 2% | 67 | 4% | 0% | (2%) | 3% |
| Total | 225 | 5% | 3% | (1%) | 7% | 855 | 6% | 3% | 0% | 9% |
| Sales by business | Q4 Organic | Δ Acq. | Δ Curr. | USD | FY Organic | Δ Acq. | Δ Curr. | USD | ||
| segment (USD million) | 2024 | growth | effect | growth | 2024 | growth | effect | growth | ||
| Prosthetics & Neuro Orthotics |
119 | 12% | 6% | (1%) | 17% | 451 | 9% | 6% | (1%) | 14% |
| Bracing & Supports | 37 | 2% | 0% | 0% | 2% | 148 | 1% | 0% | 0% | 1% |
| Internal product sales | (11) | 19% | 0% | (4%) | 16% | (39) | 9% | 0% | (1%) | 8% |
| External sales | 145 | 9% | 4% | (1%) | 13% | 561 | 7% | 5% | 0% | 11% |
| Patient Care | 80 | -1% | 0% | (1%) | -2% | 294 | 5% | 0% | 0% | 5% |
Strong EMEA and Americas growth in Prosthetics & Neuro Orthotics
Sales in Americas performed well in Q4 driven by solid sales growth in our Prosthetics & Neuro Orthotics business and good growth in Patient Care. The strong performance in Prosthetics & Neuro Orthotics was supported by strong sales across categories including bionics, as recently introduced bionic knees Navii® and Icon® are building good initial traction during the limited launch period. As expected, we are yet to see any material impact from the US Medicare coverage expansion for K2 patients, which took effect during the fall 2024. First patients are being processed and approved for bionic knee upgrades, while fittings are expected to increase in the periods to come as prosthetists generate experience with fitting K2 patients. Performance in Bracing & Supports was soft, partly due to timing of sales between quarters.
In the EMEA region the strong performance in Prosthetics & Neuro Orthotics continued in Q4. The strong growth trajectory was seen broadly across our European markets supported by strong volume growth in key product categories. In Bracing & Supports our sales growth performance was solid for the quarter driven by good growth in key European markets. Sales in Patient Care were soft in the quarter, impacted by a strong comparable quarter in Q4 2023 and timing of sales between quarters.
In APAC, sales were modest for the quarter. Prosthetics & Neuro Orthotics demonstrated good growth driven by Australia and New Zealand, which was partly offset by softer performance in Patient Care. We are seeing gradually improvement in the NDIS reimbursement backlog in Australia which has impacted growth during the year, whereas sales growth was impacted by timing between quarters.
Q4: 12% organic sales growth in Prosthetics & Neuro Orthotics
Limited
In Q4 2024, Prosthetics & Neuro Orthotics sales amounted to USD 119 million and grew by 12% organically. Sales of high-end solutions continue to increase in Prosthetics as well as our Neuro Orthotics business (FIOR & GENTZ) continue to deliver strongly and in line with expectations. During the fourth quarter we continued to expand our sales reach internationally as distribution is being transferred to Embla Medical (Össur).
Bracing & Supports (B&S) sales amounted to USD 37 million in Q4 2024 and grew by 2% organically. Growth in our Bracing & Supports business has been impacted by challenging market dynamics in select product categories and markets during the year. In Q4, we however had good growth in key markets in EMEA and APAC.
Sales in our Patient Care segment amounted to USD 80 million in Q4 2024 while our organic sales declined by 1%. In Americas sales growth in Patient Care was solid, mainly driven by good uptake in select regions but offset by softer sales in EMEA and APAC regions, where the strong comparable quarter in Q4 2023 (12% growth in EMEA) and timing impacted sales.
Operations
Gross profit in FY 2024 amounted to USD 535 million or 63% of sales, compared to USD 486 million or 62% of sales in 2023. In Q4 2024, gross profit amounted to USD 142 million or 63% of sales, compared to USD 129 million or 61% of sales in Q4 2023. The 2%-point gross profit margin expansion was supported by cost reduction initiatives in manufacturing implemented during Q1 2024 in addition to positive product mix, scalability, and manufacturing efficiency. Gross profit margin of 63% in Q4 2024
Operating expenses
OPEX ratio of 49% in Q4 2024
EBITDA margin before special
Q4 2024
Operating expenses, excluding other income, amounted to USD 422 million or 49% of sales in FY 2024, compared to USD 398 million or 51% of sales in FY 2023. Operating expenses, excluding other income, amounted to USD 110 million or 49% of sales in Q4 2024, compared to USD 104 million or 50% of sales in Q4 2023.
OPEX grew 5% organically in the fourth quarter. Effective cost control and scalability in SG&A cost was partly offset by investments in R&D.
EBITDA
In FY 2024, EBITDA before special items amounted to USD 173 million or 20% of sales, compared to EBITDA before special items of USD 139 million or 18% of sales in 2023. In Q4 2024, EBITDA amounted to USD 47 million or 21% of sales, compared to EBITDA of USD 37 million or 18% of sales in Q4 2023. items of 21% in
EBITDA margin expansion for the quarter and FY 2024 was driven by an increase in our gross margin as well as effective cost control in our SG&A costs.
Currencies impacted our EBITDA margin positively by roughly 40 basis points in Q4, driven by hedging. The effects from currencies were mainly driven by a strengthened US dollar compared to the Euro. For FY 2024 the currency impact net of hedging on our EBITDA margin was neutral compared FY 2023.
Financial items, income tax and net profit
Net financial expenses in 2024 amounted to USD 26 million, compared to USD 17 million in 2023. Net financial expenses in Q4 2024 amounted to USD 8 million, compared to USD 3 million in Q4 2023.
The increase in financial expenses compared to prior periods is mainly related to the higher borrowings in relation to the acquisition of FIOR & GENTZ in January 2024. In addition, net exchange rate differences due to currency developments impacted our net financial expenses negatively by USD 3 million Q4 compared to positive USD 1 million in Q4 2023 and negatively USD 4 million in FY 2024 compared to USD 1 million in FY 2023.
Income tax amounted to USD 22 million in 2024, corresponding to 24% effective tax rate, compared to USD 17 million in 2023. In Q4 income tax amounted to USD 6 million, corresponding to 25% effective tax rate, compared to USD 5 million in Q4 2023. Effective tax rate of 25% in Q4 2024
Net profit in 2024 amounted to USD 69 million or 8% of sales, compared to USD 59 million or 7% of sales in 2023. Net profit in Q4 2024 amounted to USD 19 million or 8% of sales, compared 9% of sales in Q4 2023. Net profit was positively impacted by stronger operating profit but negatively impacted by net financial items. Net profit margin of 8% in Q4 2024
Diluted earnings per share in 2024 amounted to 16.2 US cents, compared to 14.0 in 2023. Diluted earnings per share in Q4 2024 amounted to 4.4 US cents, compared to 4.5 US cents in Q4 2023.
Cash flow
Cash generated by operations Cash generated by operations amounted to USD 160 million or 19% of sales in 2024, compared to USD 126 million or 16% of sales in 2023. Cash generated by operations amounted to USD 54 million or 24% of sales in Q4 2024, compared to USD 46 million or 22% of sales in Q4 2023. Cash generation was strong in FY 2024, mainly due to increased sales and strong operating results. Inventory levels remain however elevated as we prepare for the full launch of our Navii® and Icon® bionic knee solutions. Cash generation of USD 54 million in Q4 2024
Capital expenditures CAPEX was 4% of
Free cash flow
Capital expenditures in 2024 amounted to USD 39 million or 5% of sales, compared to USD 42 million or 5% of sales in 2023. Capital expenditures in Q4 2024 amounted to USD 8 million or 4% of sales, compared to USD 10 million or 5% of sales in Q4 2023. sales in Q4 2024
The increase in CAPEX in FY 2024 was mainly driven by facility expansion programs at key locations to support future growth. Programs were concluded during the third quarter 2024 and CAPEX returned to normalized levels in Q4.
Free cash flow
Free cash flow in 2024 amounted to USD 77 million or 9% of sales, compared to USD 52 million or 7% of sales in 2023. Free cash flow in Q4 2024 amounted to USD 34 million or 15% of sales, compared to USD 26 million or 13% of sales in Q4 2023. Increase in free cash flow was driven by stronger operating profit. was 15% of sales in Q4 2024
Bank balances and cash equivalents Cash and undrawn
Bank balances and cash equivalents amounted to USD 86 million at the end of Q4 2024 and USD 50 million of existing facilities were undrawn. Bank balances and cash equivalents in addition to undrawn credit facilities at the end of Q4 2024, therefore, amounted to USD 136 million. facilities were USD 136 million
Capital structure
Net-interest bearing debt
NIBD/EBITDA before special items at 2.4x
Share buybacks to be reinitiated shortly
items corresponded to 2.4x at quarter-end Q4 2024, which is within the target range of 2.0-3.0x.
Share buybacks and treasury shares
The purpose of the program is to reduce the Company's share capital and adjust the capital structure with a desired capital level of 2.0-3.0x net interest-bearing debt to EBITDA before special items, by distributing capital to shareholders in line with the Company's Capital Structure and Capital Allocation Policy. The leverage ratio is back within the target range of 2.0-3.0x and therefore the share buyback program is to be reinitiated shortly.
Net interest-bearing debt, including lease liabilities, amounted to USD 414 million at quarter-end Q4 2024 compared to USD 395 million at quarter-end Q4 2023. Net interest-bearing debt to EBITDA before special
At the end of Q4 2024, treasury shares totaled 701,647.
2025 Financial guidance
| Guidance | Guidance FY 2025 | Actual FY 2024 |
|---|---|---|
| Sales growth, organic | 5-8% | 6% |
| EBITDA margin before special items | 20-21% | 20% |
| For modelling purposes | ||
| CAPEX as % of sales | 3-4% | 5% |
| Effective tax rate | 23-24% | 24% |
For 2025 organic sales growth is expected to be in the range of 5-8%. Continued strong performance is expected in Prosthetics & Neuro Orthotics across regions supported by solid growth in the core business, contributions from the full launch of bionic knees Navii® and Icon® expected in Q1 2025, and positive impact from the US Medicare Coverage Expansion for K2 patients. In addition, the ongoing roll out of our Neuro Orthotics offerings (Fior & Gentz) into new markets is expected to contribute to growth leveraging Össur's global commercial infrastructure and the ForMotion footprint within O&P clinics.
In Patient Care, we expect good growth in line or above market growth across regions with solid volume growth, increased efficiency, bearing in mind that EMEA may be somewhat impacted by a strong comparison in 2025 compared to 2024.
Lastly, Bracing & Supports is expected to grow approximately in line with market growth, with solid growth in key regions and product categories in 2025, but some competitive pressure in selected markets.
EBITDA margin is expected to be in the range of 20-21% for 2025. The EBITDA margin is expected to be positively impacted by solid sales performance, a favorable product mix from high-end solutions, continued efficiency gains in manufacturing, and cost control in SG&A.
Potential impact as a result of the US trade tariffs has not been reflected in the guidance. It should be noted that potential tariffs can directly negatively impact Embla Medical's cost of goods sold (COGS). However, significant uncertainty remains regarding the details of implementation and which product groups may eventually be affected. When the situation becomes clearer, Embla Medical will provide more specific communication around the potential impact on its business and financial guidance.
At current foreign exchange rates, the EBITDA margin, is expected to have a largely neutral impact compared to 2024 assuming all other factors remain constant. Additional information on foreign exchange assumptions can be found in the next section.
Foreign Exchange
Sales are particularly exposed to fluctuations in the EUR/USD exchange rate. Additionally, the ISK has a relatively high impact on operating results as a substantial part of manufacturing, R&D and some corporate functions are based in Iceland, while sales in ISK are minimal. A breakdown of sales and costs by main currencies can be found in note 4 of the accompanying Condensed Consolidated Financial Statements.
All else being equal, a +/- 5% movement in EUR/USD is estimated to have an annual impact on EBITDA in the range of +/- USD 3.5-4.5 million when unhedged. The same movement in ISK/USD is estimated to have an annual impact on EBITDA in the range of +/- USD 3.5-4.5 million when unhedged. Embla Medical utilizes forward contracts to hedge approximately 50% of the estimated net currency exposure in ISK.
| Currency overview USD | EUR | ISK |
|---|---|---|
| Average exchange rate FY 2024 | 1.082 | 0.0073 |
| Opening rate February 4 2025 | 1.031 | 0.0071 |
| Estimated average exchange rate for FY 2025* | 1.031 | 0.0071 |
| Change in estimated exchange rate FY 2025 compared to last year's average | -5% | -3% |
*Estimated FY 2025 average exchange rate is calculated as the exchange rate of Feb 4, 2025 (open) for the remainder of the year
Other highlights
US Medicare Expands Access to Advanced Bionics for K2 patients as of September 1, 2024
As of September 1, 2024, US Medicare expanded its coverage of microprocessor knees (MPKs) to include K2 amputees in the United States. The extended coverage enables a large patient group of active K2 functional level amputees to gain access to bionic knee technology. Previously, Medicare had restricted access to these knees to only high-active amputees classified as functional level K3 and K4.
The decision by US Medicare relied upon a substantial body of research spanning more than a decade establishing that more advanced prosthetic devices lead to significant clinical benefits for active K2 amputees, including reduced fall rates, improved mobility, and increased patient confidence while walking. These benefits, in turn, have the potential to positively reduce healthcare expenditures while simultaneously improving quality of life.
The new policy does not automatically create access for every person currently classified as a K2 amputee. Treating healthcare professionals will have to establish through medical documentation that a bionic knee (MPK or microprocessor-controlled knee) or other K3 knee would improve the patient's functional health outcomes, help them accomplish activities of daily living, and that lower-level knee options have been considered and ruled out. In addition, to provide a K2 patient with an MPK, clinicians must use knees with integrated stumble recovery.
In addition, the extended coverage may also grant these active K2 functional level amputees' access to a compatible high active K3 foot solution as a complement to the bionic knee when certain coverage criteria are met.
Link to the news: https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdid=39777
Product launches
| Launch quarter | Segment | Product name | Product description |
|---|---|---|---|
| Q1 2024 | Prosthetics Mechanical feet |
Pro-Flex® Terra (Össur) |
Pro-Flex Terra offers the flexibility, balance and adaptability of a low-active foot and at the same the performance, push off and energy of a high active foot. |
| Q2 2024 | Prosthetics Bionic knee |
Icon® (College Park) |
Icon features responsive sensors, streamlined setup, and the intuitive Stride Studio app. Icon is the versatile solution for low to high activity users. |
| Q2 2024 | Prosthetics Bionic knee |
Navii® (Össur) |
Navii® is a fully waterproof bionic knee featuring a powerful actuator provided to support consistency for stair and ramp descent. Navii® posses a variable position mechanical lock that can securely lock at three different angles and stay locked for standing during longer periods of time. |
| Q2 2024 | Prosthetics Liners |
Iceross Seal-In® X Locking TF (Össur) |
Build for comfort and stability, the Icelock 850 Hybrid Lock and Iceross Seal-In X Locking TD liner bring the benefits of advanced vacuum suspension of the Seal In system to users with lower limb amputations of all activity levels who prefer or rely on locking or lanyard suspensions. |
| Q3 2024 | Prosthetics Upper limb |
NP 3rd generation (Naked Prosthetics) |
The third generation of Naked Prosthetics technology features significant enhancements to the PIPDriver®, MCPDriver®, ThumbDriver®, and GripLock Finger®. With a refreshed color palette, new surface textures, and customizable hardware, this update delivers greater personalization and improved durability, driven by market feedback and advanced manufacturing. |
Conference call and financial calendar
Conference call details
Embla Medical will host a conference call on February 5, 2025, at 9:00 CET / 7:00 GMT / 3:00 ET.
To participate in the telephone conference, please use the dial-in details provided below:
DK: +45 78 76 84 90 SE: +46 31-311 50 03 UK: +44 20 3769 6819 US: +1 646 787 0157 Participant access code: 274982
The webcast will be available through following link: Embla Medical Q4/FY 2024 webcast
Financial calendar and events 2025
| February 5 2025 | Interim report Q4 2024 and Annual Report 2024 |
|---|---|
| February 5 2025 | Q4/FY presentation and virtual Q&A (HCA Capital) |
| February 5 2025 | Q4/FY Road Show Reykjavik (Embla HQ) |
| February 6 2025 | Q4/FY Road Show Copenhagen (ABG) |
| February 7 2025 | Q4/FY Road Show Stockholm (ABG) |
| February 10 2025 | Q4/FY Road Show London (Intron Health) |
| February 11-12 2025 | Q4/FY Road Show New York City/CT/Boston (SEB) |
| February 26-27 2025 | Q4/FY Road Show Benelux (DNB) |
| March 12 2025 | Annual General Meeting 2025 |
| March 26-27 2025 | DNB Nordic-American Healthcare Conference, New York City |
| April 29 2025 | Interim report Q1 2025 |
| May 19 2025 | AktieInfo investor event, Copenhagen |
| May 22 2025 | Redeye Orthopedic Event, Stockholm |
| June 3 2025 | Carnegie Healthcare Day, Paris |
| July 22 2025 | Interim report Q2 2025 |
| October 21 2025 | Interim report Q3 2025 |
For further information
| Contact details | ||
|---|---|---|
| Klaus Sindahl, Head of Investor Relations | +45 5363 0134 | [email protected] |
Embla Medical corporate announcements by e-mail
If you wish to receive Embla Medical's e-mail alerts, please register on our website: https://emblamedical.com/investor-relations
Forward-looking statements
This press release includes "forward-looking statements" which involve risks and uncertainties that could cause actual results to differ materially from results expressed or implied by these statements. Embla Medical hf. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.
Embla Medical hf.
Condensed Consolidated Financial Statements
31.12.2024
Embla Medical hf Grjóthálsi 5 110 Reykjavík Id-no. 560271-0189
Statement by the Board of Directors and President and CEO
The Condensed Consolidated Financial Statements of Embla Medical hf. for the period from 1 January 2024 to 31 December 2024 consist of the Financial Statements of Embla Medical hf. and its subsidiaries (together referred to as "the Company" or "Embla Medical"). The Condensed Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards for Interim Financial Reporting, IAS 34, as adopted by the EU. The Condensed Consolidated Financial Statements are neither audited nor reviewed by the Company's auditors.
The total Net sales of the Company amounted to USD 854.9 million and the Net profit amounted to USD 69.0 million. Total assets of the Company amounted to USD 1,539.0 million at the end of period, liabilities were USD 758.3 million and equity was USD 780.7 million.
It is our opinion that these Condensed Consolidated Financial Statements present all the information necessary to give a true and fair view of the Company's financial position at 31 December 2024 and financial performance and cash flow for the period ended 31 December 2024.
The Board of Directors and the President and CEO of Embla Medical hf. hereby confirm the Condensed Consolidated Financial Statements for the period from 1 January 2024 to 31 December 2024 with their signatures.
Reykjavík, 5 February 2025
Board of Directors
Niels Jacobsen Chairman of the Board
Svafa Grönfeldt Vice Chairman of the Board of Directors
Arne Boye Nielsen Alberto Esquenazi
Tina Abild Olesen Caroline Vagner Rosenstand Member of the Board of Directors Member of the Board of Directors
Member of the Board of Directors Member of the Board of Directors
President and CEO
Sveinn Sölvason
Consolidated Income Statement
| All amounts in USD '000 | Notes | 2024 | 2023 | Q4 2024 | Q4 2023 |
|---|---|---|---|---|---|
| Net sales | 3 | 854,889 | 785,683 | 224,781 | 210,197 |
| Cost of goods sold | (320,189) | (300,110) | (82,663) | (81,646) | |
| Gross profit | 534,700 | 485,573 | 142,117 | 128,551 | |
| Other income / (expenses) | 399 | 1,927 | (86) | 302 | |
| Sales and marketing expenses | (311,151) | (293,080) | (80,628) | (76,933) | |
| Research and development expenses | (40,832) | (38,142) | (11,005) | (10,110) | |
| General and administrative expenses | (69,964) | (66,891) | (18,532) | (17,179) | |
| Earnings before interest and tax (EBIT) | 113,153 | 89,387 | 31,867 | 24,631 | |
| Financial income | 3,251 | 4,608 | 860 | 951 | |
| Financial expenses | (24,746) | (20,720) | (5,724) | (5,001) | |
| Net exchange rate difference | (4,435) | (666) | (3,177) | 788 | |
| Net financial expenses | (25,930) | (16,778) | (8,041) | (3,262) | |
| Share in net profit of associates | 3,340 | 3,398 | 1,055 | 2,799 | |
| Earnings before tax (EBT) | 90,563 | 76,007 | 24,882 | 24,169 | |
| Income tax | (21,603) | (17,206) | (6,263) | (5,154) | |
| Net profit | 68,960 | 58,801 | 18,619 | 19,015 | |
| Attributable to: | |||||
| Owners of the Company | 68,278 | 58,389 | 18,207 | 18,995 | |
| Non-controlling interests | 682 | 412 | 413 | 20 | |
| Net profit | 68,960 | 58,801 | 18,619 | 19,015 | |
| Earnings per share | |||||
| Basic earnings per share (US cent) | 16.2 | 14.0 | 4.4 | 4.5 | |
| Diluted earnings per share (US cent) | 16.2 | 14.0 | 4.4 | 4.5 |
Consolidated Statement of Comprehensive Income
| All amounts in USD '000 | 2024 | 2023 | Q4 2024 | Q4 2023 |
|---|---|---|---|---|
| Net profit | 68,960 | 58,801 | 18,619 | 19,015 |
| Items that may be reclassified subsequently to profit or loss: | ||||
| Change in cash flow hedges | 1,832 | 963 | 1,676 | (642) |
| Fair value changes of financial liabilities | 88 | 93 | 88 | 93 |
| Exchange difference on translating foreign operations | (11,175) | 4,839 | (5,773) | 7,566 |
| Income tax | (2,073) | 811 | (1,259) | 1,439 |
| Other comprehensive income, net of income tax | (11,328) | 6,706 | (5,268) | 8,456 |
| Total comprehensive income | 57,632 | 65,507 | 13,352 | 27,471 |
| Attributable to: | ||||
| Owners of the Company | 56,950 | 65,095 | 12,939 | 27,451 |
| Non-controlling interests | 682 | 412 | 413 | 20 |
| Total comprehensive income | 57,632 | 65,507 | 13,352 | 27,471 |
Consolidated Balance Sheet
Assets
| All amounts in USD '000 | Notes | 31.12.2024 | 31.12.2023 |
|---|---|---|---|
| Property, plant and equipment | 5 | 71,824 | 64,386 |
| Right of use assets | 6 | 127,802 | 121,673 |
| Goodwill | 7 | 776,306 | 690,855 |
| Other intangible assets | 8 | 96,645 | 65,841 |
| Investment in associates | 20,364 | 20,532 | |
| Other financial assets | 2,704 | 4,530 | |
| Deferred tax assets | 46,365 | 41,888 | |
| Non-current assets | 1,142,010 | 1,009,706 | |
| Inventories | 143,102 | 136,226 | |
| Accounts receivable | 121,915 | 127,844 | |
| Other financial assets | 1,475 | 0 | |
| Other assets | 44,300 | 39,253 | |
| Cash and cash equivalents | 86,163 | 72,653 | |
| Current assets | 396,955 | 375,976 | |
| Total assets | 1,538,965 | 1,385,682 |
Consolidated Balance Sheet
Equity and liabilities
| All amounts in USD '000 | 31.12.2024 | 31.12.2023 |
|---|---|---|
| Issued capital and share premium | 93,464 | 66,260 |
| Reserves | (75,390) | (64,045) |
| Retained earnings | 759,112 | 699,667 |
| Shareholders equity | 777,186 | 701,883 |
| Non-controlling interest | 3,513 | 3,123 |
| Total equity | 780,699 | 705,005 |
| Borrowings | 328,754 | 311,802 |
| Lease liabilities | 118,279 | 112,605 |
| Deferred tax liabilities | 37,478 | 28,777 |
| Provisions | 7,937 | 6,666 |
| Deferred income | 8,589 | 7,277 |
| Other financial liabilities | 47,946 | 17,351 |
| Non-current liabilities | 548,982 | 484,478 |
| Borrowings | 28,620 | 21,533 |
| Lease liabilities | 24,136 | 21,793 |
| Accounts payable | 27,275 | 30,749 |
| Income tax payable | 18,305 | 12,138 |
| Provisions | 12,615 | 11,322 |
| Accrued salaries and related expenses | 48,715 | 50,068 |
| Other financial liabilities | 10,258 | 9,583 |
| Other liabilities | 39,361 | 39,012 |
| Current liabilities | 209,284 | 196,198 |
| Total liabilities | 758,266 | 680,676 |
| Total equity and liabilities | 1,538,965 | 1,385,682 |
Consolidated Statement of Cash Flow
| All amounts in USD '000 | Notes | 2024 | 2023 | Q4 2024 | Q4 2023 |
|---|---|---|---|---|---|
| Earnings before interests and tax (EBIT) | 113,153 | 89,387 | 31,867 | 24,631 | |
| Depreciation and amortization | 5, 6, 8 | 55,973 | 49,920 | 14,636 | 12,856 |
| Change in inventories | (5,928) | (2,268) | (641) | 4,952 | |
| Change in receivables | (5,524) | (16,370) | 688 | (1,534) | |
| Change in payables | (2,279) | 14,896 | 4,505 | 8,953 | |
| Change in provisions | 3,174 | (7,365) | 96 | (438) | |
| Other operating activities | 1,828 | (2,214) | 2,770 | (2,968) | |
| Cash generated from operations | 160,397 | 125,986 | 53,921 | 46,452 | |
| Interest received | 3,238 | 4,733 | 870 | 315 | |
| Interest paid | (24,082) | (16,046) | (5,767) | (840) | |
| Income tax paid | (23,487) | (20,349) | (7,070) | (9,151) | |
| Net cash generated from operating activities | 116,066 | 94,324 | 41,954 | 36,776 | |
| Purchase of fixed and intangible assets | 5, 8 | (39,227) | (42,278) | (8,003) | (10,288) |
| Acquisition of subsidiaries, net of cash in acquired entities | 9 | (70,072) | (11,903) | (667) | (6,733) |
| Other investing activities | 4,529 | (2,966) | 4,823 | (3,474) | |
| Cash flows used in investing activities | (104,770) | (57,147) | (3,847) | (20,495) | |
| Repayments of long-term borrowings | 0 | (13,202) | 0 | (6,166) | |
| Changes in revolving credit facility | 39,787 | (1,575) | (21,571) | (3,008) | |
| Payments of lease liabilities | (24,379) | (25,423) | (6,438) | (5,330) | |
| Increase in subsidiaries that does not affect control | (9,648) | 0 | (1,016) | 0 | |
| Dividends from subsidiaries paid to non-controlling interests | 0 | (759) | 0 | (759) | |
| Cash flows generated from financing activities | 5,761 | (40,959) | (29,025) | (15,263) | |
| Net change in cash | 17,056 | (3,782) | 9,082 | 1,018 | |
| Exchange rate effects on cash held in foreign currencies | (3,545) | (196) | (4,126) | 1,279 | |
| Cash and cash equivalents at beginning of period | 72,653 | 76,631 | 81,207 | 70,356 | |
| Cash and cash equivalents at end of period | 86,163 | 72,653 | 86,163 | 72,653 |
Consolidated Statement of Changes in Equity
| All amounts in USD '000 | Share capital |
Share premium |
Other reserves |
Retained earnings |
Share- holders equity |
Non controlling interests |
Total equity |
|---|---|---|---|---|---|---|---|
| Balance at 1 January 2023 | 4,781 | 61,430 | (70,467) | 639,961 | 635,704 | (194) | 635,510 |
| Net profit | 58,389 | 58,389 | 412 | 58,801 | |||
| Change in cash flow hedges | 770 | 770 | 770 | ||||
| Fair value changes of financial liabilities | 70 | 70 | 70 | ||||
| Transl. diff. of shares in subsidiaries | 5,866 | 5,866 | (0) | 5,866 | |||
| Total comprehensive income | 0 | 0 | 6,706 | 58,389 | 65,095 | 412 | 65,507 |
| Payment of dividends | 0 | (759) | (759) | ||||
| Put option for minority share in | |||||||
| subsidiary | (825) | (825) | (825) | ||||
| Share option charge for the period | 1,759 | 1,759 | 1,759 | ||||
| Share option vested during the period | 0 | 49 | (1,218) | 1,088 | (81) | (81) | |
| Change in non-controlling interests | 229 | 229 | 3,665 | 3,894 | |||
| Balance at 31 December 2023 | 4,781 | 61,479 | (64,045) | 699,667 | 701,883 | 3,123 | 705,005 |
| Net profit | 68,278 | 68,278 | 682 | 68,960 | |||
| Change in cash flow hedges | 1,466 | 1,466 | 1,466 | ||||
| Fair value changes of financial liabilities | 66 | 66 | 66 | ||||
| Transl. diff. of shares in subsidiaries | (12,860) | (12,860) | (12,860) | ||||
| Total comprehensive income | 0 | 0 | (11,328) | 68,278 | 56,950 | 682 | 57,632 |
| Put option for minority share in | |||||||
| subsidiary | 689 | 689 | 689 | ||||
| Share option charge for the period | 602 | 602 | (0) | 602 | |||
| Share option vested during the period | (1,308) | 1,308 | 0 | 0 | |||
| Issued new shares | 48 | 27,156 | 27,204 | (0) | 27,204 | ||
| Change in non-controlling interests | (10,142) | (10,142) | (292) | (10,434) | |||
| Balance at 31 December 2024 | 4,829 | 88,635 | (75,390) | 759,112 | 777,186 | 3,513 | 780,699 |
1. Summary of Material Accounting Policies
Statement of compliance
The Condensed Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standard (IFRS) for Interim Financial Reporting, IAS 34 as adopted by the EU. The Condensed Consolidated Financial Statements are presented in accordance with the new and revised IFRS accounting standards and new interpretations (IFRIC), applicable for the period. New and amended IFRS accounting standards that are effective for the current year have minor impact on the Company´s Financial Statements. The Company has not early applied new and revised IFRS accounting standards that have been issued but are not yet effective. The Financial Statements are presented in USD, which is the Company's functional currency. They do not include all of the information required for full Annual Consolidated Financial Statements and should be read in conjunction with the Company's Annual Consolidated Financial Statements for the period ended 31 December 2024. The Company's Annual Consolidated Financial Statements can be found on the Company's website www.emblamedical.com.
Basis of preparation
The Condensed Consolidated Financial Statements have been prepared under the historical cost basis except for certain financial instruments that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Condensed Consolidated Financial Statements are presented in USD and all values are rounded to the nearest thousand ('000), except when otherwise indicated. This rounding may have impact on the total sum. The accounting policies adopted are consistent with those followed in the preparation of the Company's Annual Consolidated Financial Statements for the period ended 31 December 2024.
2. Quarterly statements
| Full year | Q4 | Q3 | Q2 | Q1 | |
|---|---|---|---|---|---|
| 2024 | 2024 | 2024 | 2024 | 2024 | |
| Net sales | 854,889 | 224,781 | 213,528 | 216,727 | 199,852 |
| Cost of goods sold | (320,189) | (82,663) | (79,916) | (78,192) | (79,418) |
| Gross profit | 534,700 | 142,117 | 133,612 | 138,535 | 120,435 |
| Gross profit margin | 63% | 63% | 63% | 64% | 60% |
| Other income | 399 | (86) | 123 | 126 | 236 |
| Sales and marketing expenses | (311,151) | (80,628) | (75,333) | (78,882) | (76,307) |
| Research and development expenses | (40,832) | (11,005) | (9,498) | (10,481) | (9,848) |
| General and administrative expenses | (69,964) | (18,532) | (16,263) | (16,072) | (19,097) |
| EBIT | 113,153 | 31,867 | 32,641 | 33,225 | 15,419 |
| Net financial expenses | (25,930) | (8,041) | (5,171) | (7,543) | (5,174) |
| Share in net profit of associates | 3,340 | 1,055 | 668 | 878 | 739 |
| EBT | 90,563 | 24,882 | 28,138 | 26,559 | 10,984 |
| Income tax | (21,603) | (6,263) | (6,165) | (6,493) | (2,682) |
| Net profit | 68,960 | 18,619 | 21,973 | 20,066 | 8,302 |
| EBITDA | 169,126 | 46,502 | 46,568 | 47,040 | 29,016 |
| EBITDA margin | 20% | 21% | 22% | 22% | 15% |
| EBITDA before special items | 173,264 | 46,502 | 46,568 | 47,040 | 33,154 |
| EBITDA margin before special items | 20% | 21% | 22% | 22% | 17% |
3. Net Sales
| 2024 | 2023 | Q4 2024 | Q4 2023 | |
|---|---|---|---|---|
| Sales by geographical segment: | ||||
| EMEA | 394,869 | 336,278 | 100,750 | 92,774 |
| Americas | 392,898 | 384,057 | 106,768 | 100,571 |
| APAC | 67,122 | 65,348 | 17,263 | 16,853 |
| Total | 854,889 | 785,683 | 224,781 | 210,197 |
| Sales by business segment: | ||||
| Prosthetics & Neuro Orthotics | 451,306 | 394,837 | 118,834 | 101,619 |
| Bracing & Supports | 148,386 | 146,500 | 36,715 | 36,117 |
| Internal product sales | (38,516) | (35,748) | (10,660) | (9,228) |
| External product sales | 561,176 | 505,587 | 144,888 | 128,508 |
| Patient Care | 293,713 | 280,096 | 79,892 | 81,689 |
| Total | 854,889 | 785,683 | 224,781 | 210,197 |
In 2023 a new business segment split was presented. Further evaluation has resulted in a a reclass between Prosthetic & Neuro Orthotics and Internal products sales for comparatives in 2023 and 2024 Q1. This reclass has no effects on total product sales. Adjusted comparatives can be found in following table:
| Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | |
|---|---|---|---|---|---|
| Sales by business segment: | |||||
| Prosthetics & Neuro Orthotics | 90,994 | 101,870 | 100,354 | 101,619 | 105,066 |
| Bracing & Supports | 35,368 | 38,145 | 36,870 | 36,117 | 35,905 |
| Internal product sales | (8,666) | (8,994) | (8,860) | (9,228) | (8,377) |
| External product sales | 117,696 | 131,021 | 128,364 | 128,508 | 132,594 |
| Patient Care | 63,517 | 70,333 | 64,556 | 81,689 | 67,258 |
| Total | 181,212 | 201,353 | 192,920 | 210,197 | 199,852 |
4. Sales and expenses split by main currencies
| 2024 | Q4 2024 | |||||
|---|---|---|---|---|---|---|
| LCY | USD | % | LCY | USD | % | |
| Sales | ||||||
| USD | 350,524 | 350,524 | 41% | 96,412 | 96,412 | 43% |
| EUR | 220,419 | 238,475 | 28% | 56,958 | 60,792 | 27% |
| ISK | 508,430 | 3,684 | 0% | 147,160 | 1,068 | 0% |
| Nordic curr. (SEK, NOK, DKK) | 99,604 | 12% | 26,202 | 12% | ||
| Other (GBP, AUD, CAD & Other) | 162,603 | 19% | 40,307 | 18% | ||
| Total | 854,889 | 100% | 224,781 | 100% | ||
| COGS and OPEX | ||||||
| USD | 302,848 | 302,848 | 41% | 78,446 | 78,446 | 41% |
| EUR | 164,563 | 178,000 | 24% | 44,642 | 47,647 | 25% |
| ISK | 11,112,36 | 80,541 | 11% | 2,826,323 | 20,509 | 11% |
| Nordic curr. (SEK, NOK, DKK) | 91,609 | 12% | 23,954 | 12% | ||
| Other (GBP, MXN, CAD & Other) | 88,738 | 12% | 22,357 | 12% | ||
| Total | 741,736 | 100% | 192,913 | 100% | ||
| 2023 | Q4 2023 | |||||
| LCY | USD | % | LCY | USD | % | |
| Sales | ||||||
| USD | 346,755 | 346,755 | 44% | 91,822 | 91,822 | 44% |
| EUR | 173,902 | 188,065 | 24% | 45,605 | 49,081 | 23% |
| ISK | 503,403 | 3,659 | 0% | 145,632 | 1,049 | 0% |
| Nordic curr. (SEK, NOK, DKK) | 93,268 | 12% | 29,005 | 14% | ||
| Other (GBP, AUD, CAD & Other) | 153,936 | 20% | 39,240 | 19% | ||
| Total | 785,683 | 100% | 210,197 | 100% | ||
| COGS and OPEX | ||||||
| USD | 308,819 | 308,819 | 44% | 76,809 | 76,809 | 41% |
EUR 135,361 146,369 21% 37,771 40,650 22% ISK 9,959,251 72,122 10% 2,846,413 20,497 11% Nordic curr. (SEK, NOK, DKK) 85,118 12% 24,905 13% Other (GBP, MXN, CAD & Other) 83,868 12% 22,705 12% Total 696,296 100% 185,566 100%
Currency split is derived by using best available information at each time.
5. Property, plant and equipment
| 2024 | Leasehold improvements |
Machinery & equipment |
Office equipment |
Computer equipment |
Total |
|---|---|---|---|---|---|
| Cost | |||||
| At 1 January | 42,814 | 71,701 | 15,033 | 14,941 | 144,489 |
| Additions | 11,522 | 10,712 | 1,313 | 3,486 | 27,033 |
| Business Combinations | 10 | 459 | 10 | 115 | 594 |
| Eliminated on disposal | (27) | (224) | 0 | (180) | (431) |
| Fully depreciated assets | (1,086) | (1,540) | (871) | (3,867) | (7,364) |
| Exchange rate differences | (1,960) | (992) | (546) | (554) | (4,052) |
| At 31 December 2024 | 51,273 | 80,116 | 14,939 | 13,941 | 160,269 |
| Depreciation | |||||
| At 1 January | 17,284 | 44,462 | 9,431 | 8,926 | 80,103 |
| Charge for the period | 4,684 | 8,338 | 1,661 | 3,892 | 18,575 |
| Eliminated on disposal | (14) | (144) | 0 | (155) | (313) |
| Fully depreciated assets | (1,086) | (1,540) | (871) | (3,867) | (7,364) |
| Exchange rate differences | (1,214) | (617) | (371) | (354) | (2,556) |
| At 31 December 2024 | 19,654 | 50,499 | 9,850 | 8,442 | 88,445 |
| At 31 December 2024 | 31,619 | 29,617 | 5,089 | 5,499 | 71,824 |
| Depreciation classified by functional category: | 2024 | 2023 | Q4 2024 | Q4 2023 | |
| Cost of goods sold | 9,850 | 9,129 | 2,566 | 2,658 | |
| Sales and marketing expenses | 3,922 | 4,549 | 893 | 1,163 | |
| Research and development expenses | 773 | 673 | 196 | 199 | |
| General and administrative expenses | 4,030 | 3,275 | 1,071 | 819 | |
| Total | 18,575 | 17,626 | 4,726 | 4,839 |
6. Leases
Right of use assets
| Buildings & | Machinery & | |||
|---|---|---|---|---|
| 2024 | sites | equipment | Total | |
| At 1 January | 118,967 | 2,706 | 121,673 | |
| Additions and renewals | 35,206 | 3,799 | 39,005 | |
| Depreciation charge for the period | (22,933) | (2,300) | (25,233) | |
| Eliminated on disposal and termination | (1,649) | 0 | (1,649) | |
| Exchange rate differences | (5,801) | (191) | (5,992) | |
| At 31 December 2024 | 123,789 | 4,012 | 127,802 | |
| Depreciation classified by functional category: | 2024 | 2023 | Q4 2024 | Q4 2023 |
| Cost of goods sold | 10,093 | 8,982 | 2,645 | 2,241 |
| Sales and marketing expenses | 5,047 | 4,491 | 1,323 | 1,121 |
| Research and development expenses | 3,028 | 2,695 | 794 | 673 |
| General and administrative expenses | 7,065 | 6,332 | 1,852 | 1,569 |
| Total | 25,233 | 22,500 | 6,613 | 5,604 |
7. Goodwill
| 2024 | 2023 | |
|---|---|---|
| At 1 January | 690,855 | 680,400 |
| Business combinations | 104,489 | 2,241 |
| Exchange rate differences | (19,038) | 8,214 |
| At 31 December | 776,306 | 690,855 |
The goodwill increase related to current year business combination is allocated to EMEA cash generating unit.
8. Other intangible assets
| Customer & | Patents & | ||||
|---|---|---|---|---|---|
| distribution | development | Software & | |||
| 2024 | relationships | costs | Trademarks | other | Total |
| Cost | |||||
| At 1 January | 34,254 | 28,343 | 2,871 | 54,246 | 119,714 |
| Additions | 55 | 1,716 | 79 | 1,612 | 3,462 |
| Additions - internally generated | 0 | 0 | 0 | 8,732 | 8,732 |
| Business Combinations | 22,321 | 1,953 | 5,766 | 1,049 | 31,089 |
| Fully amortized assets | (19,426) | (18) | (323) | (2,290) | (22,057) |
| Exchange rate differences | (503) | 220 | (237) | (174) | (694) |
| At 31 December 2024 | 36,701 | 32,214 | 8,156 | 63,175 | 140,246 |
| Amortization | |||||
| At 1 January | 25,676 | 7,780 | 588 | 19,829 | 53,873 |
| Charge for the period | 3,387 | 1,950 | 252 | 6,576 | 12,165 |
| Fully amortized assets | (19,426) | (18) | (323) | (2,290) | (22,057) |
| Exchange rate differences | (244) | 77 | 6 | (219) | (380) |
| At 31 December 2024 | 9,393 | 9,789 | 523 | 23,896 | 43,601 |
| At 31 December 2024 | 27,308 | 22,425 | 7,633 | 39,279 | 96,645 |
| Amortization classified by functional category: | 2024 | 2023 | Q4 2024 | Q4 2023 | |
| Cost of goods sold | 1,577 | 628 | 337 | 217 | |
| Sales and marketing expenses | 6,377 | 5,724 | 2,059 | 1,340 | |
| Research and development expenses | 1,691 | 1,377 | 432 | 362 | |
| General and administrative expenses | 2,520 | 2,065 | 469 | 494 | |
| Total | 12,165 | 9,794 | 3,297 | 2,413 |
9. Business combinations
On 1 January 2024 Embla Medical acquired all shares of the privately owned Fior & Gentz, a leading producer of lower limb neuro orthotic components. Fior & Gentz, founded in Lüneburg, Germany in 1997, is a leading European provider of functional lower limb neuro orthotic solutions and employs around 80 people.
As part of the consideration paid for Fior & Gentz, Embla Medical issued 6,636,122 new shares. The share price of each share was DKK 28.10 and the total value of the share price capital increase is thus DKK 186 million (USD 27 million). The consideration paid in cash was partly financed through additional credit facilities, amounting to USD 55 million. Acquisition related cost amounted to USD 1 million and is included in general and administrative expenses and reported as special items.
The accounting for the acquisition has been finalized at the end of the reporting period. The goodwill is not deductible for income tax purpose.
Assets and liabilities recognized as a result of the acquisitions:
| Property, plant and equipment | 594 |
|---|---|
| Other intangible assets | 31,089 |
| Inventories | 5,375 |
| Accounts and other receivables | 1,128 |
| Bank balances and cash equivalents | 2,963 |
| Deferred tax liabilities | (9,995) |
| Other liabilities | (2,270) |
| Net identifiable assets acquired | 28,884 |
| Goodwill | 104,489 |
| Net assets acquired | 133,373 |
| Consideration: | |
| Net assets acquired | 133,373 |
| Contingent consideration and deferred payments on current year´s acquisitions | (38,184) |
| Issued new shares | (27,205) |
| Cash paid | 67,984 |
| Payments on prior year´s acquisitions | 5,052 |
| Cash from acquired company | (2,963) |
| Consideration shown in Cash Flow | 70,072 |