Embla Medical hf: Interim Report Q2 2025

Rhea-AI Summary

Embla Medical (EMBLA) reported Q2 2025 financial results with sales of USD 232 million, showing 7% reported growth and 5% organic growth. The company's EBITDA margin reached 21% in Q2 2025, with net profit growing 5% to USD 21 million.

The Prosthetics & Neuro Orthotics segment demonstrated strong performance with 9% organic growth, while Bracing & Supports declined 2% and Patient Care remained flat. The company has narrowed its full-year organic sales growth guidance to 5-6% (from 5-8%) and maintained EBITDA margin guidance at 20-21%.

Notable developments include an agreement to acquire 51% stake in Streifeneder ortho.production, a new US reimbursement code for NEURO HiTRONIC MPKAFO, and a EUR 50 million loan from Nordic Investment Bank.

Positive

• EBITDA margin improved to 21% in Q2 2025 from 19% in H1 2024
• Strong 9% organic growth in Prosthetics & Neuro Orthotics segment
• Net profit grew 17% in H1 2025
• Strategic acquisition of 51% stake in Streifeneder ortho.production
• New US reimbursement code obtained for NEURO HiTRONIC MPKAFO
• EUR 50 million loan secured from Nordic Investment Bank

Negative

• Organic growth slowed to 5% compared to 6% in Q2 2024
• Bracing & Supports segment declined by 2% organic growth
• Patient Care segment showed flat growth vs 9% in Q2 2024
• Gross profit margin decreased to 62% from 64% in Q2 2024
• Free cash flow reduced to 5% of sales from 8% in Q2 2024
• Full-year organic growth guidance narrowed downward to 5-6% from 5-8%

Insights

Financial Analyst

Embla Medical delivers solid Q2 with 5% organic growth, EBITDA margin improvement to 21%, and a strategic acquisition announcement.

Embla Medical's Q2 2025 results demonstrate solid performance despite mixed segment results. The company reported $232 million in sales with 5% organic growth, slightly below the 6% pace achieved in Q2 2024. The Prosthetics & Neuro Orthotics segment was the clear standout with 9% organic growth, while Bracing & Supports declined 2% and Patient Care remained flat.

Profitability metrics were strong with an EBITDA margin of 21% in Q2 and 20% for 1H 2025, showing improvement from 19% in 1H 2024. This margin expansion stems from manufacturing efficiencies and SG&A cost discipline, offsetting some gross margin pressure. The gross profit margin of 62% in Q2 represented a decline from 64% in Q2 2024, affected by lower scale in underperforming segments and U.S. tariff impacts.

Net profit grew 5% to $21 million, maintaining a 9% margin. Free cash flow was $12 million or 5% of sales, down from 8% in Q2 2024 due to working capital investments and increased capital expenditures.

The company's strategic developments include a pending majority stake (51%) acquisition in Streifeneder ortho.production, a company with $29 million annual sales that will enhance Embla's orthopedic mobility solutions portfolio. Additionally, their Neuro Orthotics product received a new U.S. reimbursement code for their microhydraulic knee joint, potentially accelerating U.S. market penetration.

Management has narrowed guidance for 2025 organic sales growth to 5-6% from the previous 5-8% range while maintaining EBITDA margin guidance at 20-21%. This suggests confidence in margin performance but some caution on top-line growth. With a debt leverage ratio (NIBD/EBITDA) of 2.6x, Embla remains within its target range of 2.0-3.0x while continuing its share buyback program, having repurchased 627,624 shares for approximately $3 million in Q2.

Announcement no. 33/2025

Interim report Q2 2025

22 July 2025

COPENHAGEN, Denmark, July 22, 2025 /PRNewswire/ --

Sveinn Sölvason, President and CEO, comments:

"Sales in Q2 2025 amounted to USD 232 million, representing 7% reported growth, of which 5% was organic. Growth was strong in the Prosthetics & Neuro Orthotics segment, primarily driven by continued momentum in EMEA and supported by solid contribution from our recently launched innovation. Growth in Americas and APAC regions was also good, led by the Prosthetics & Neuro Orthotics segment. In contrast, sales in the Patient Care segment remained flat, while Bracing and Supports experienced a slight decline.

The EBITDA margin was strong at 21% in Q2 2025 and 20% for the first half of the year, compared to 19% (before special items) in the first half of 2024. The margin increase was driven by robust sales in Prosthetics & Neuro Orthotics, solid efficiency in manufacturing, and continued cost discipline in SG&A.

In line with our performance in the first half of the year and expectations for stronger growth in the second half, we are narrowing our full-year guidance for organic sales growth to 5-6% (previously 5-8%). We reiterate our guidance for the EBITDA margin before special items at 20-21%."

Highlights Q2 2025

• Sales amounted to USD 232 million and organic growth was 5%, compared to 6% in Q2 2024.
• Prosthetics & Neuro Orthotics sales grew by 9% organic, Bracing & Supports (B&S) sales declined by 2% organic and Patient Care sales were flat, compared to 6%, 2% and 9% respectively in Q2 2024.
• Gross profit margin was 62%, compared to 64% in Q2 2024. For 1H 2025 the gross profit margin increased to 63% compared to 62% in the same period 2024. The gross profit margin in the quarter was positively impacted from strong performance in Prosthetics & Neuro Orthotics, in addition to efficiency in manufacturing, but the margin was adversely impacted by soft sales in B&S and Patient Care due to lower scale on fixed manufacturing cost, in addition to some impact from US tariffs.
• EBITDA was USD 49 million, and EBITDA margin was 21% of sales, compared to 22% in Q2 2024. EBITDA margin in the 1H 2025 was 20% compared to 19% before special items in 1H 2024. The EBITDA margin in the quarter was positively impacted by solid cost discipline in SG&A but negatively impacted by a softer gross profit margin than in the comparable period.
• Net profit grew by 5% and was USD 21 million, and the net profit margin was 9% of sales, the same as in Q2 2024. Net profit growth was 17% in 1H 2025. Net profit in Q2 and 1H was negatively impacted by net exchange differences.
• Free cash flow amounted to USD 12 million or 5% of sales, compared to 8% of sales in Q2 2024. Free cash flow benefitted from strong operating results but was partly offset by temporary working capital investments and elevated CAPEX in the quarter.
• NIBD/EBITDA before special items was 2.6x at the end of Q2 2025. The leverage ratio is within the target range of 2.0-3.0x and the share buyback program is ongoing. Embla Medical bought back 627,624 shares for approximately USD 3 million in the quarter.

Other highlights

• Agreement signed on 17 July 2025 to invest in a majority share (51% of the shares) in privately owned Streifeneder ortho.production GmbH, an international developer and supplier of orthopaedic mobility solutions, employing around 100 people, with sales of EUR 25 million in 2024 (USD 29 million). Closing of the transaction is subject to regulatory approval. 
• Fior & Gentz (Neuro Orthotics) has been awarded a new reimbursement code in the United States (L-2006 code) for the 'NEURO HiTRONIC MPKAFO' (bionic knee joint), which is the smallest and lightest microhydraulic knee joint on the market, a significant milestone in the introduction of Neuro Orthotics products in the United States.
• EUR 50 million loan signed with Nordic Investment Bank (NIB).
• Halfway through unifying our Patient Care facilities under the ForMotion brand. Patient care facilities in Iceland, Sweden, and Finland were rebranded to ForMotion in Q2 2025.

2025 Outlook

• Organic sales growth guidance narrowed to 5-6% (previously 5-8%)
• EBITDA margin before special items guidance is unchanged at 20-21%

* Potential impact from US trade tariffs continues to be an uncertain element to quantify given the frequent changes in the global tariff environment. Consequently, we deem it too speculative to quantify and guide an exact impact from potential tariffs on Embla Medical's financial results, but some absorption of tariffs is assumed in the guidance.

Conference call details

Embla Medical will host a conference call on July 22, 2025, at 9:00 CET / 7:00 GMT / 3:00 ET.

To actively 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 Q2 2025 webcast

Latest Investor Road Show presentation can be found on our IR web: Q2 2025 Road Show Presentation

Further information

Klaus Sindahl, Head of Investor Relations, KSindahl@emblamedical.com, +45 5363 0134

Embla Medical press releases by e-mail

If you wish to receive Embla Medical press releases by e-mail, please register at http://www.emblamedical.com/investors

About Embla Medical

Embla Medical (Nasdaq Copenhagen: EMBLA) was founded in Reykjavik in 1971 with the mission to improve people's mobility. Embla Medical is home to several brands renowned for positively impacting people's health and well-being. They include Össur, a leading global provider of prosthetics and bracing and supports solutions; FIOR & GENTZ, an innovative developer of neuro orthotics; and College Park Industries, creators of custom-built prosthetic solutions. Embla Medical also provides patients with world-class care through a global network of Orthotic and Prosthetic (O&P) facilities. Embla Medical is committed to sustainable business practices and is signatory to the UN Global Compact, UN Women's Empowerment Principles, and contributes to the UN Sustainable Development Goals. The company's climate targets have been verified by the Science Based Targets initiative. Embla Medical operates globally and has more than 4,000 employees. www.emblamedical.com

Embla Medical was formerly listed as Össur (OSSR) on Nasdaq Copenhagen until 8 April 2024.

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Company Announcement Q2 2025 incl. Financial Statement FINAL

 

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SOURCE Embla Medical hf.

FAQ

What were Embla Medical's (EMBLA) key financial results for Q2 2025?

Embla Medical reported sales of USD 232 million with 7% reported growth (5% organic), EBITDA of USD 49 million (21% margin), and net profit of USD 21 million (9% margin).

How did Embla Medical's different segments perform in Q2 2025?

The Prosthetics & Neuro Orthotics segment grew 9% organically, while Bracing & Supports declined by 2%, and Patient Care segment remained flat.

What is Embla Medical's updated guidance for 2025?

Embla Medical narrowed its organic sales growth guidance to 5-6% (previously 5-8%) and maintained EBITDA margin guidance before special items at 20-21%.

What major strategic developments did Embla Medical announce in Q2 2025?

Embla Medical announced plans to acquire a 51% stake in Streifeneder ortho.production, secured a EUR 50 million loan from Nordic Investment Bank, and obtained a new US reimbursement code for their NEURO HiTRONIC MPKAFO product.

How did Embla Medical's gross profit margin change in Q2 2025?

The gross profit margin decreased to 62% in Q2 2025 from 64% in Q2 2024, though H1 2025 showed improvement at 63% compared to 62% in H1 2024.

What is Embla Medical's current debt position?

Embla Medical's NIBD/EBITDA ratio was 2.6x at the end of Q2 2025, within their target range of 2.0-3.0x.