2012-10-23 16:06:29 CEST

2012-10-23 16:07:29 CEST


REGULATED INFORMATION

English
Össur hf. - Financial Statement Release

Össur - Third Quarter Report 2012 


GROWTH AFFECTED BY WEAK SALES IN AMERICAS

Sales - Sales growth is 2% measured in local currency. Total sales amount to USD
99 million  compared to USD 101 million in  Q3'11. Sales continue to be affected
by a slowdown in prosthetics sales in Americas due to ongoing audits by Recovery
Audit  Contractors (RAC  audits). Sales  growth in  prosthetics is  flat or 0%,
measured  in local currency  and sales growth  for bracing and  supports is 3%,
measured  in local  currency. Growth  in Asia  is yet  again excellent, or 24%,
measured in local currency.

Profitability  -  Operations  are  healthy  and  Össur  continues  to  show good
profitability. The third quarter is the second consecutive quarter where bracing
and  supports are growing while prosthetics  decline, which has negative effects
on the gross profit margin. Despite the change in the product mix and slow sales
the  gross margin remains stable, demonstrating the success of the manufacturing
in  Mexico and other lean initiatives within manufacturing and operations. Gross
profit amounts to USD 62million or 63%, the same ratio as in Q3'11.

EBITDA  amounts to  USD 18 million  corresponding to  a margin of 19%, down from
20% in  Q3'11. EBITDA  margin is  impacted by  changed product mix and increased
investment in R&D.

Jón Sigurðsson, President & CEO, comments:"The  results of the third quarter are below our expectations and will therefore
affect  the  expected  results  for  the  full  year 2012. This is mainly due to
effects  from reimbursement  audits in  Americas which  have had a more profound
impact  than management anticipated. However, this quarter has been exciting for
us  as  we  saw  Oscar  Pistorius  make  history  by  being the first amputee to
participate  in the Olympics.  Again at the  Paralympics we saw  Oscar and other
elite athletes continue to inspire us and demonstrate to the world what it means
to redefine ability. We are proud to be participants in that journey."

US  Prosthetics  market  -  During  2012 the  prosthetics  market in US has been
affected  by RAC audits into  payments made by Medicare  to O&P providers. These
audits  have created uncertainties  in the market  and a slowdown  in demand for
high  end  products.  Recent  survey  performed  by  AOPA  (American  Orthotic &
Prosthetic  Association) demonstrates that 75% of  the respondents are currently
dealing  with audits and 81% report that the  audits have high impact on overall
operations.  These audits  have had  more impact  on the  market than management
initially estimated and are expected to continue to have an impact into 2013.

Paralympics  - Team Össur  members and Össur  Ambassadors achieved extraordinary
performance during the 2012 Paralympic Games.  The group, which includes some of
the world's best-known athletes, captured a total of 21 medals (6 Gold, 7 Silver
and  8 Bronze), and set 6 new World Records. Out of the amputee finalists in the
games, 2/3 used Össur prosthetic products such as the Flex-Foot Cheetah.

Guidance  2012 - Due  to current  negative sentiment  in the Americas prosthetic
market  and slowdown in prosthetics sales  in the region, management expects the
results  of 2012 to  be below  the previously  announced guidance of organic LCY
sales  growth of  4-6% and adjusted  EBITDA margin  of 20-21% of  sales. Revised
guidance for the full year 2012 is organic LCY sales growth of 2-3% and adjusted
EBITDA margin of 18-19% of sales.


Conference call tomorrow 24 October at 12:00 CET/ 10:00 GMT/ 6:00 EST

Tomorrow, Wednesday 24 October Jón Sigurðsson, President and CEO, and Hjörleifur
Pálsson,  CFO, will host a conference call presenting and discussing the results
of  the third quarter of 2012. The conference  call will be conducted in English
and can be heard on Össur's website: www.ossur.com/investors

To  participate  in  the  meeting  please  call  one  of the following telephone
numbers:
Europe: 44 (0) 1452 555131 or + 46(0)8 506 307 79
The United States: + 1 866 682 8490
Iceland: 800 9300

[HUG#1651579]