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Embla Medical Sales in Q1 2025 amounted to USD 203 million and organic growth came in at 4% driven by a strong finish to the quarter. Growth was strong in our Prosthetics & Neuro Orthotics segment supported by continued momentum and solid volume growth in EMEA and APAC regions, while the year started out softer in Americas following a strong end to 2024.
Our Navii® and Icon® bionic knees advanced into full launch during the quarter following successful pre-launch activities and promising user feedback. Both Navii® and Icon® are great innovations that will help us reach more users across different lower limb functional levels, including some of the active functional level K2 patients from the US Medicare coverage expansion, which took effect last fall.
EBITDA margin was 18% in Q1 2025; up 1%-point from Q1 2024. The stronger margin was driven by the positive effects from the cost reduction initiatives implemented in manufacturing during Q1 2024 as well as positive contributions from product mix and continued cost control in SG&A. We iterate our guidance for the full year of 5-8% organic sales growth and 20-21% EBITDA margin before special items.”
Highlights Q1 2025
▪ Sales amounted to USD 203 million and organic growth was 4%, compared to 7% in Q1 2024.
▪ Prosthetics & Neuro Orthotics sales grew by 9% organic, while our Bracing & Supports and Patient Care sales ended flat in the first quarter of 2025, compared to 10%, 1% and 6% respectively in Q1 2024.
▪ Gross profit margin was 63%, compared to 62% before special items in Q1 2024 (60% reported). The increase is supported by the manufacturing cost reduction initiatives implemented in Q1 2024 as well as favorable product mix and efficiency.
▪ EBITDA was USD 36 million, and EBITDA margin was 18% of sales, compared to 17% before special items in Q1 2024. The EBITDA margin expansion was driven by an increasing gross profit margin following cost reduction initiatives implemented in Q1 2024 and continued cost control in SG&A.
▪ Net profit grew by 45% and was USD 12 million with a net profit margin of 6%, compared to 4% in Q1 2024.
▪ Free cash flow amounted to USD 8 million or 4% of sales, compared to negative free cash flow of USD 7 million or negative 4% of sales in Q1 2024. Free cash flow was solid, benefiting from strong operating results, but it should be noted that cash flow is seasonally low in the first quarter of the year.
▪ NIBD/EBITDA was 2.5x at the end of Q1 2025, which is within our target range of 2-3x EBITDA. In line with our capital structure and capital allocation policy a share buyback program was reinitiated in early February. During Q1 2025, Embla Medical bought back 295,653 shares at a market value of approximately USD 1.3 million.
Other highlights
▪ André Rocha has been appointed as Executive Vice President of R&D at Embla Medical. André Rocha previously served as Partner at McKinsey & Co and brings 25 years of experience and a proven track record across all organizational levels.
▪ Conal Harte has been appointed Executive Vice President of Patient Care, having served as Vice President Patient Care Europe since 2023, and prior to that, held various roles at Össur and Touch Bionics.
2025 Outlook
▪ Organic sales growth guidance is unchanged at 5-8%.
▪ EBITDA margin before special items guidance is unchanged at 20-21%
