Embla Medical hf Reports Strong Q2 2025 Financial Performance

Embla Medical hf's Interim Report for Q2 2025

Announcement No. 33/2025

Interim Report Q2 2025

Embla Medical hf has recently published its interim report for the second quarter of 2025, revealing encouraging financial results. The organization remains committed to enhancing mobility solutions through innovative offerings in prosthetics and orthotics.

Strong Sales Growth

Sveinn Sölvason, President and CEO, indicated that sales for Q2 2025 reached USD 232 million. This represents a reported growth of 7%, with 5% categorized as organic growth. The Prosthetics & Neuro Orthotics segment exemplified notable strength, particularly in the EMEA region, aided by innovation that has just been introduced to the market.

Regional Performance

The sales performance in both the Americas and APAC regions also demonstrated satisfactory growth, predominantly from the Prosthetics & Neuro Orthotics segment. However, while these segments thrived, the Patient Care segment remained stable, and Bracing and Supports encountered a minor decline.

Financial Highlights

The EBITDA margin for Q2 2025 was impressive at 21%, reflecting a notable increase from the previous year. The margin for the first half of the year similarly showcased growth, now standing at 20%, compared to 19% before special items in the first half of 2024. This margin growth can be attributed to the solid performance in key segments, adept manufacturing efficiencies, and disciplined management of selling, general and administrative costs.

Quarterly Highlights

• Sales grew to USD 232 million, with organic growth noted at 5%.
• The Prosthetics & Neuro Orthotics segment recorded a 9% organic growth, contrasted with a 2% decline in Bracing & Supports and flat sales in Patient Care.
• Gross profit margin registered at 62%, a decrease from 64% in Q2 2024, but increased to 63% for the first half of 2025.
• EBITDA reached USD 49 million, leading to a margin of 21%, slightly lower than the previous year's 22% for the same quarter.
• Net profit also experienced a 5% growth, reaching USD 21 million with a net profit margin holding steady at 9%.
• Free cash flow amounted to USD 12 million or 5% of sales, partially influenced by working capital demands and elevated capital expenditures.
• NIBD/EBITDA before special items was reported at 2.6x, well within the target range.

Strategic Initiatives and Investments

Embla Medical continues to make strides in strategic areas, most notably signing an agreement to acquire a 51% majority share in Streifeneder ortho.production GmbH. This firm specializes in orthopedic mobility solutions and recorded EUR 25 million in sales in the previous year.

Innovations and Developments

Additionally, the Neuro Orthotics brand Fior & Gentz received a new reimbursement code in the United States for their 'NEURO HiTRONIC MPKAFO' microhydraulic knee joint, marking significant progress in expanding their market presence. Furthermore, a EUR 50 million loan from Nordic Investment Bank has been secured to facilitate ongoing projects.

Looking Ahead: 2025 Outlook

Embla Medical has refined its guidance for organic sales growth for the year down to 5-6% from the earlier estimate of 5-8%. Despite this adjustment, the guidance for the EBITDA margin before special items is held steady between 20-21%, demonstrating confidence in the company’s operational stability and market position.

Company Valuation and Shareholder Returns

The ongoing share buyback program illustrates Embla Medical's commitment to maximizing shareholder value. In Q2 2025 alone, the company repurchased approximately 627,624 shares for around USD 3 million, reflecting a strong capital management strategy that prioritizes investor returns.

Conference Call Details

For stakeholders interested in the latest developments and detailed insights into the financial performance, a conference call is scheduled to provide further updates. This call will take place later this quarter, where the management will elaborate on the results and future directions.

Frequently Asked Questions

What are the key financial figures for Q2 2025?

Embla Medical reported USD 232 million in sales, a 21% EBITDA margin, and a net profit of USD 21 million.

What segments performed best during Q2 2025?

The Prosthetics & Neuro Orthotics segment showed the strongest performance, with notable growth in sales compared to other segments.

How has Embla Medical adjusted its sales growth outlook for 2025?

The company has narrowed its organic sales growth guidance to 5-6% for the year.

What recent acquisitions has Embla Medical made?

Embla Medical has signed an agreement to acquire a 51% stake in Streifeneder ortho.production GmbH to expand its orthopedic offerings.

How is Embla Medical supporting its shareholders?

Embla Medical is conducting a share buyback program, with the repurchase of over 620,000 shares in Q2 2025.

About The Author

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