Össur - Second Quarter Report 2013 Highlights

Highlights * Sales amounted to USD 106 million compared to USD 103 million in Q2'12, corresponding to a 3% local currency growth. * Bracing and supports sales were flat while prosthetics sales grew by 6%, measured in local currency. * Performance in EMEA was excellent with strong growth across all markets and segments. Performance in the US was mixed and continued to be impacted by turbulence in the US reimbursement environment. * The cost reduction initiative is on track and expected to reduce costs by USD 5 million in 2013. Full year 2014 impact of these initiatives amounts to USD 8 million. One-time expenses relating to these initiatives amounted USD 4.5 million in Q2'13. * Gross profit amounted to USD 65 million and 61% of sales. Adjusted for one- time expenses gross profit amounted to USD 66 million or 62% of sales. Gross profit margin in Q2'12 was 62%. * EBITDA amounted to USD 15 million corresponding to 14% of sales. Adjusted for one-time expenses, EBITDA amounted to USD 20 million corresponding to a margin of 19%, the same ratio as in Q2'12. * Net profit amounted to USD 8 million or 8% of sales. Adjusted for one-time expenses net profit amounted to USD 12 million and 11% of sales. Net profit in Q2'12 amounted to USD 10 million and 10% of sales. * Cash generated by operations was 11% of sales, compared to 19% in Q2'12. Affecting cash generation is the payment of one-time expenses as well as an increase in working capital. * In May Össur signed an agreement to acquire the Swedish orthotic and prosthetic provider TeamOlmed for USD 47 million. The acquisition is expected to close in Q3'13. Financial Guidance for 2013 * Management reiterates its previous guidance for 2013; LCY organic sales growth is expected to be in the range of 2-4% and adjusted EBITDA margin 18-19%. * As communicated in the Q1'13 report, management expects the results of 2013 to be in the lower end of the guided range, both in terms of sales and EBITDA. Jón Sigurðsson, President & CEO, comments: "The results of the second quarter are in line with our expectations. Performance in EMEA is excellent, delivering growth in all product segments and markets. Challenges in Americas continue as previously communicated. Cost reduction initiatives already executed are on track and we are confident that they will yield the expected results. In May we signed an agreement to acquire TeamOlmed, an orthotic and prosthetic provider, strengthening our position in the Swedish market". Conference Call Össur will host a conference call on Thursday 25 July 2013 at 12:00 CET/ 10:00 GMT/ 6:00 EST. To participate in the call please dial Europe: +44 (0) 203 364 5374 or +46 (0) 8 505 564 74, The United States: + 1 855 753 2230, Iceland: 800 8660 [HUG#1718464]