Embla Medical (EMBLA) ABGSC Investor Days summary

Business profile

• Operations span 36 markets, with more than 4,000 employees and 200 clinics in 10 markets supporting patient access and innovation.

• R&D investment is $40 million this year and ~5% of sales; more than 2,100 patents and annual product launches underpin innovation.

• Sales CAGR was 17% from 1999 to 2023; 2023 EBITDA margin was 18%, with 2024 guidance of ~20%.

• ~85% of EBIT converted into free cash flow over the past decade.

Segments and growth opportunities

• 2023 sales mix: Prosthetics & Neuro Orthotics 46%, Bracing & Supports 18%, Patient Care 36%.

• Prosthetics spans mechanical to advanced bionic solutions; trade-up to higher-value products is supported by sensors, AI and machine learning.

• Fior & Gentz added customized knee and ankle orthotic joints for chronic neurological conditions; UK and Australia rollout began in Q3, with double-digit growth and 30% EBITDA reported.

• Emerging markets account for ~10% of sales despite 17 million amputees with basic reimbursement and 8 million with developing reimbursement; ~90% of sales come from developed markets.

• ForMotion brand rollout is unifying the clinic network across countries; rollout reached the Netherlands in Q3, with the US and Denmark planned for Q4.

Market dynamics and risks

• Prosthetics market is valued at $1.5–$1.7 billion, with two leading players controlling over 60% of the market.

• Bracing and support is a larger, fragmented market with 5%–7% share; focus includes profitability and divesting less profitable entities.

• Patient care is consolidating and has a 3% market share.

• U.S. growth has recently been slower and EMEA growth may moderate; emerging markets offer expansion potential.

• Potential U.S. tariffs could affect bracing and support products made in Mexico; core prosthetics and bionics are produced in Iceland, and medical devices may be exempt based on historical precedent.