Slides
Page 1
0 Q2 2025 Conference Call Sveinn Sölvason, President and CEO G. Arna Sveinsdottir, CFO July 22, 2025 A leading global provider of innovative mobility solutions
Page 2
1 Share Buyback program ✓ 627,624 shares bought back in Q2’25 (market value of USD +3m) Key Highlights for Q2 2025 Q2 Performance & Guidance FY’25 Guidance Strategic initiatives Organic sales growth +5% EBITDA margin Competitive Bidding ▪ New round of competitive bidding announced impacting OTS Orthoses in the US ▪ Potential impact is uncertain Organic sales growth 5-6% (previously 5-8%) EBITDA margin 20-21% (unchanged) Streifeneder ortho.production ✓ Agreement to invest in a majority share (51% of shares) ✓ USD 29m in sales in 2024 ✓ Closing subject to regulatory approval Neuro Orthotics (F&G) ✓ New L-code awarded in the important US market for the “NEURO HiTRONIC MPKAFO” (bionic knee joint) Patient Care - ForMotion ✓ Halfway through unifying our Patient Care facilities under the ForMotion brand New loan ✓ EUR 50m loan agreement signed with Nordic Investment Bank (NIB) with 7 years term Forbes’ Accessibility ▪ Embla Medical named to Forbes’ Accessibility 100 List External A black and white sign with red border AI-generated content may be incorrect. Impact from trade tariffs ▪ Some US tariffs impact in Q2 ▪ 2025 guidance assumes some absorption from trade tariffs ▪ Continued uncertainty USD sales growth +7% 21% in Q2’25 (down 1pp from Q2 ‘24) 20% in 1H’25 (up 1pp from 1H ‘24) Q2 Sales of USD 232m
Page 3
2 Streifeneder ortho.production will enable Embla Medical to reach more patients as a full-range provider to a larger part of the global O&P market Fior Strategic rationale for Embla Medical ▪ Sound strategic rationale in line with Growth’27 strategy enabling us to reach more patients ▪ Strengthen Embla Medical's presence in Germany the 2nd largest O&P market growing 5-7% annually ▪ Position us as a full range provider to a larger part of the global O&P market, including opportunities to expand reach in the Emerging Markets ▪ Leveraging Embla/Össur’s global sales footprint, enabling commercial synergies and operational scale Regional split Sales split +50% Germany International Prosthetics Materials Orthotics/Equipment An international developer and supplier of prosthetic and orthotics as well as orthopaedic materials and equipment for the O&P market Prosthetics – Lower Limb Materials & Equipment • Family-owned business (Bavaria, GE) • Sales of EUR 25m in 2024 (~USD 29m) • Employing around 100 people • Key player in German O&P market • Strong in Prosthetics “value segment” • Solid O&P materials offering “Streifeneder” today • Transaction largely to be financed through share issue (EUR 12.5m) • Closing of the transaction is subject to regulatory approvals • Pending closing, the transaction is not expected to have any material impact on the financial guidance for 2025 Signed agreement to invest in a majority share (51% of shares)
Page 4
3 Growth across all regions in Q2 2025 with stronger sales growth in EMEA driven by continued momentum in Prosthetics & Neuro Orthotics APAC Americas Q2: +3% EMEA Q2: +7% APAC Q2: +3% USDm USDm USDm Note: Colors indicate where Embla Medical has direct operations, Embla Medical has sales in further countries 1% 2% 7% -1% 3% 80 90 100 110 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Sales (USD) Organic sales growth 11% 13% 4% 7% 7% 80 90 100 110 120 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Sales (USD) Organic sales growth 9% 6% 3% 13% 3% 14 16 18 20 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Sales (USD) Organic sales growth
Page 5
4 Prosthetics & Neuro Orthotics sales % of total sales in Q2 Highlights ▪ EMEA: Continued strong performance in EMEA across key markets driven by volume growth and good uptake from our recently launched innovation such as Navii (Bionic knee) and Pro-Flex Terra (mechanical feet solution). ▪ Americas: Good growth in Americas following a soft first quarter. Signs of improvement in the region as growth is supported by high-end solutions with positive impact from newly launched innovation. ▪ APAC: Continued strong performance in Australia and NZ. Growth is partly offset by softer sales in Asia. ▪ Neuro Orthotics: New L-code approved in the US for “NEURO HiTRONIC MPKAFO” (smallest and lightest microhydraulic knee joint in the market). Continued focus on ramping up in new markets. Sales USD million Year-to-date sales 237 USD million 9% organic growth Year-to-date growth % Organic growthSales 112 115 119 111 126 6% 9% 12% 9% 9% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 50%
Page 6
5 Bracing & Supports sales Highlights ▪ EMEA: Good performance in selected regions but overall performance was soft. ▪ Americas: Sales in B&S continued to be soft, partly ascribed to lower patient volumes for elective procedures and moderate price pressure. ▪ APAC: APAC experiencing some recovery from previous quarters with good growth in markets such as Australia and New Zealand. ▪ Tariffs: Some impact from US tariffs in Q2. ▪ Competitive Bidding: New round announced to reduce US Medicare’s spending in certain off-the- shelve Orthoses categories. As several factors remain uncertain, we deem it too premature to discuss potential impact at this stage. Sales USD million % of total sales in Q2 Year-to-date sales 73 USD million -1% organic growth Year-to-date growth % Organic growthSales 16% 38 37 37 35 38 2% 1% 2% 0% -2% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25
Page 7
6 Patient Care sales Highlights ▪ EMEA: Good performance in several European markets but partly offset by softer sales in selected markets, partly impacted by Easter holidays shifting between current and comparable quarters. ▪ Americas: Patient Care business showed increased momentum following a soft first quarter. ▪ APAC: Sales impacted by temporary shifts between quarters. Strong performance YTD. Sales USD million % of total sales in Q2 % Organic growthSales Year-to-date sales 144 USD million 0% organic growth Year-to-date growth % Organic growthSales 34% 76 71 80 66 78 9% 9% -1% 0% 0% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25
Page 8
7 EBITDA margin expanding by 1%-points in 1H’25 to 20% (vs 19% in 1H 2024) Expansion driven by higher Gross Profit margin and cost discipline in SG&A Gross Profit and Gross Profit margin USD million Highlights ▪ Gross Profit: Gross profit margin (before special items) in 1H’25 was 63% compared to 62% in 1H’25 2024 (63% before special items). For Q2’25 the Gross profit margin was 62% vs 64% in Q2’24. Positive impact from strong sales in P&NO and manufacturing efficiency but adversely impacted by softer sales in B&S and Patient Care and some impact from US tariffs. ▪ OPEX: OPEX amounted to USD 111 million or 48% of sales in Q2 2025, compared to USD 105 million or 49% of sales in Q2 2024. OPEX growth was 2% organic in Q2’25 (vs. 5% organic sales growth) in line with the solid cost discipline in SG&A. ▪ EBITDA: EBITDA margin increased to 20% in the first half vs. 19% before special items in 1H ’24. The margin was 21% in the quarter vs. 22% in Q2 2024. The EBITDA margin was positively impacted by solid discipline in SG&A but adversely impacted by softer gross profit margin in the quarter. ▪ Net Profit: Net profit grew by 17% in the 1H’25 and 5% in Q2’25. Growth in net profit was positively impacted by strong operating results but negatively impacted by an increase in net financial expenses in the quarter, largely due to non-cash currency fluctuations. EBITDA and EBITDA margin USD million 139 144 261 272 64% 62% 63% 63% 20% 30% 40% 50% 60% 0 100 200 300 Q2'24 Q2'25 1H'24 1H'25 GP before special items GPM before special items 47 49 80 85 22% 21% 19% 20% Q2'24 Q2'25 1H'24 1H'25 EBITDA before special items EBITDA margin before special items
Page 9
8 Cash flow and leverage Capital expenditures and % of sales USD million on actual rate Free cash flow and % of sales USD million on actual rate Net Interest-Bearing Debt and Leverage USD million on actual rate ▪ CAPEX in Q2 is at 4.4% of sales and YTD at 3.8% within the guidance range of 3-4% of sales. ▪ CAPEX in the quarter is elevated mainly due to timing of investments in manufacturing equipment. ▪ First six months are seasonally lower than the second half in terms of sales and cash flow generation. ▪ Free cash flow benefitted from strong operating results but was partly offset by net working capital, mainly a temporary increase in AR due to strong sales in the latter half of the quarter, and elevated CAPEX in the quarter. ▪ Leverage was 2.6x end of Q2 2025 (2.0x excl. leases). ▪ Net increase in NIBD mainly due to FX effects as part of loan portfolio is in EUR. ▪ The leverage ratio is within the target range of 2.0- 3.0x; +600k shares bought back in Q2’25 (USD +3m) ▪ NEUR 50m loan agreement signed with Nordic Investment Bank (NIB) with 7 years term NIBD/EBITDA NIBD/EBITDA excl. leases 11 9 8 6 10 5.0% 4.1% 3.6% 3.0% 4.4% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 18 33 34 8 12 8% 15% 15% 4% 5% Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 470 460 414 437 472 3.1x 2.8x 2.4x 2.5x 2.6x2.6x 2.3x 1.9x 1.9x 2.0x Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25
Page 10
9 2025 Guidance Guidance as of July 22 2025 1H 2025 Guidance as of April 29 2025 Sales growth Organic 5-6% 4% 5-8% EBITDA margin Before special items 20-21% 20% 20-21% For modeling purposes: Special items In USD million None None None CAPEX % of sales 3-4% 4% 3-4% Tax Effective tax rate 23-24% 24% 23-24%
Page 11
10 Q&A Key messages from Q2 2025 1. Well on track with our strategic initiatives: ✓ Agreement to invest 51% in Streifeneder ortho.production ✓ Fior & Gentz awarded new reimbursement code in the US ✓ Halfway through with our ForMotion rebranding 2. Continued strong performance in Prosthetics and Neuro Orthotics with particular strong performance in EMEA, while Americas show signs of improvement supported by innovation 3. FY Guidance: Organic sales growth is narrowed to 5-6% (from 5-8%), while outlook for EBITDA margin is maintained at 20-21%
Page 12
11 Financial calendar and events July 22, 2025 Interim report Q2 2025 July 22, 2025 Q2 2025 HCA Capital virtual presentation and Q&A July 22, 2025 Q2 2025 US Virtual Road Show (SEB) Aug 19, 2025 Q2 2025 Road Show Copenhagen (SEB) Aug 20, 2025 Nordea Small & Midcap Days Stockholm Aug 27, 2025 Økonomisk Ugebrev Life Science Conference, Copenhagen Sept 4, 2025 Goldman Sachs MedTech conference, London Sept 9, 2025 Aktiespararna investor event (Retail), Falkenberg Sweden Sept 16, 2025 Pareto Securities Annual Healthcare Conference, Stockholm Sept 18, 2025 HC Andersen Investor Seminar, Copenhagen Oct 21, 2025 Interim report Q3 2025 Nov 17, 2025 InvestorDagen Dansk Aktionærforening, Copenhagen Nov 18-20, 2025 Jefferies Healthcare Conference, London Nov 24-25, 2025 AktieInfo Investor Event (Retail), Aalborg & Kolding Nov 26, 2025 Danske Bank Winter Seminar, Copenhagen Dec 2, 2025 Nordea Focus Seminar, Paris Embla Medical press releases by e-mail If you wish to receive Embla Medical press releases by e-mail, please register on our website: www.emblamedical.com/investors Contact our Investor Relations Investor Relations Klaus Sindahl Head of Investor Relations E-mail: KSindahl@emblamedical.com Tel: +45 5363 0134
Page 13
12 Forward-looking statement This presentation contains forward-looking statements, which reflect the Management’s current views with respect to certain future events and financial performance. Although the statements are based upon estimates the Management believes to be reasonable, there is no assurance that these statements will be achieved. Statements containing the financial outlook for 2025 and the following years naturally involve risks and uncertainties, and c onsequently actual results will differ, and may differ materially, from those projected or implied in the forward-looking statements. The risks and uncertainties may include unexpected developments in the international currency exchange and securities markets, financing, market driven price decreases for Embla Medical’s products, delay or failure of development products, production problems and unexpected cost increases, development of new tec hnologies by competitors, the introduction of competing products within Embla Medical’s core areas, exposure to product liability and other lawsuits, changes in reimbursement rules and governmental laws.