B&S sales recovery moving faster than expected

FY’21 guidance reiterated

Fair value range unchanged at DKK 38-71

All key markets saw strong sales recovery in Q2’21
Ôssur reported a strong Q2’21 with sales of USD 190m (vs. ABGSCe USD 178m and company-collected consensus of USD 179m), corresponding to total sales growth of 41% (ABGSCe 32%,company-collected consensus 33%). Sales are normalising across all key markets, with strong organic growth coming from both the Americas at 33% and EMEA at 35% while APAC countries grew 18%, which is solid given the fact that sales in the latter region have not been as adversely affected by COVID-19 in 2020. The sales growth is also supported by a stronger than expected sales normalisation within the B&S segment, as sales rose 36% organically (consensus ~31%) with prosthetics also showing strong growth at 30% organically (consensus 29%). Moreover, the company emphasized its continued focus on managing costs in line with the sales recovery and reported a normalised EBITDA margin of 22% (consensus 21%).

Realised sales were at index 120-170 (vs. Q2’20) in Q2’21
The realised sales attainment in Q2’21 was between index 120-170 compared to Q2’20 (our estimate averaged around index 130), with the higher end of the range being realised in June. Our take from this is that underlying demand is returning to normal. Ôssur has therefore reiterated its FY’21 guidance. The company’s range for FY’21 organic growth is 10-15% but management now is leaning towards the middle of the range (ABGSCe 13.8%, consensus 13.5%). We, however, note that this seems like a conservative approach, to account for the uncertainty arising from the ongoing pandemic and with the new Delta variant. We furthermore note that the bionic sales pipeline remains strong going into H2’21.

Scenario-based fair value range unchanged
We slightly update our estimates to reflect the stronger than expected B&S segment while reiterating our scenario-based fair value range of DKK 38-71.

research@abgsc.com (Introduce.se)

ABG Sundal Collier - Introduce.se