Embla Medical

Strategy, Business Model and Value Chain

Embla Medical's business is about improving people's mobility so they can live a Life Without Limitations®. We develop and manufacture a wide range prosthetic, neuro orthotic and bracing & supports solutions in addition to serving patients in need of various mobility solutions in our patient care facilities across the globe.

The company operates within three business segments: Prosthetics & Neuro Orthotics (49% of total sales), Bracing & Supports (17% of total sales), and Patient Care (34% of total sales).

Business Model Components

Innovation: New product introductions every year. Embla Medical develops and manufactures prosthetic, neuro orthotic and bracing & supports solutions, from an idea to a finished product. We aim to deliver cost effective medical solutions that provide value for patients and the healthcare system.

Manufacturing: Off-the-shelf and customized solutions. Manufacturing of prosthetic solutions takes place in Iceland, Scotland, United States and Mexico. Neuro orthotics are manufactured in Germany, and manufacturing of bracing solutions takes place in Mexico with outsourcing of soft goods to China.

Sales and Marketing: Mainly direct sales but also distribution. Products are delivered through healthcare providers who specialize in assisting individuals who suffer from impaired mobility. We have operations in 36 countries and largely sell our products through our own direct sales network.

Patient Care: Own O&P clinics and independent providers. Embla Medical products are serviced through a global network of patient care clinics. In selected countries, Embla Medical manages its own Patient Care facilities under the ForMotion brand.

Prescribers and Payers: Over 90% of products and services reimbursed. Prescribers include healthcare professionals who prescribe products and services. Payers include healthcare systems, insurance companies and individuals. Around 90% of Embla Medical's product sales and services are estimated to be reimbursed by a third party.

Strategy: Growth'27

Embla Medical introduced its five-year Growth'27 strategy in 2023. The focus is to reach more people in need of mobility solutions and addresses key industry themes while supporting transformation into an increasingly patient-centric company.

The three growth drivers are:

1. Patient Reach: Connecting directly with patients and reaching out to payers and prescribers
2. Innovative Solutions: Embracing innovation in all actions, providing innovative and patient-centric solutions combining product and service
3. O&P Value Creation: Offering business solutions to customers, including O&P clinics enabling seamless service and close partnership

Financial Ambition for Growth'27 Period

• Sales Growth: 7-10% local currency growth p.a. on average = 5-7% organic growth + 2-3% acquisitive growth
• EBITDA Margin: Gradually increase EBITDA margin before special items
• Capital Allocation: Prioritize growth opportunities, value-adding investments and acquisitions, while maintaining a healthy balance sheet with target range of 2.0-3.0x NIBD/EBITDA before special items