Welcome to today's presentation, where we have the pleasure to present Embla Medical. Today's presentation surrounding the Q1 2026 report just released this morning. To help us through today's presentation, as always, CEO and President Sveinn Sölvason. We will do a short presentation, 10 minutes, we will take the main points. You can read the report, and if you want to go into more detail. We will, as always, keep it on a high level, but expect to get through all the smaller details and maybe the interesting angles through questions. Do feel free to ask questions in the box down below. Do it in Danish, and I will try and translate to the best of my ability. For now, I will hand the stage to you, Sveinn.
Thank you very much, Michael, and thanks for having us here this morning, and appreciate the interest from everyone calling in. As Michael mentioned, I'm gonna go through the big picture here for quarter one, and then I'm sure we'll have plenty of time for Q&A. Diving into the highlights, we delivered a good start to the year. 15% growth in dollar terms, obviously impacted by a weaker dollar compared to the same period last year, but also a solid organic growth rate of 4%, and when we include the impact from M&A, we are at 8% growth. Our margins for the quarter are reasonably stable compared to the same quarter last year, 62% gross profit margin and 17% EBITDA margin.
Both 1 percentage point lower than in the same period last year, and that is due to external factors such as tariffs and FX, with other underlying factors being intact. Then, on the bottom- line, we delivered a very healthy 21% growth in our bottom- line profitability. On the operational side, this was again a big quarter for us in our Patient Care business. We are almost through the rebranding initiative that we've been working on here for the last 18 months, and we will finalize that here in quarter two. In Patient Care, it's all about building a global Patient Care business on the back of multiple acquisitions that we have done here over the last 10 years.
We are seeing excellent progress with the initiatives that we are prioritizing. If we then dive into the segments, starting with Prosthetics and neuro-orthotics, which is over half of our business here, we see another very strong quarter, high single-digit organic growth rates. Again, it's growth that is driven by all in all our regions, very healthy growth across our European business. Although we say that in some of the, you could say, more mature healthcare systems in Northern Europe, we did see a little bit slow quarter, and that also ties back to a slow Patient Care quarter in Europe. We don't think, again, there's anything structural there. We've seen these markets deliver very stable growth rates in recent years.
The Europe growth rate was mainly driven by our Southern European business and the East European business here in quarter one. Solid growth rate also in our Americas business, driven by new products, NAVii, Icon, et cetera. A very strong quarter in our APAC region and across all our major private pay markets. This is a big focus area for Embla Medical to increase access to good mobility solutions in less developed healthcare systems. We see here in the first quarter a very strong confirmation that we are prioritizing the right initiatives to grow our business in these important markets.
Neuro-orthotics, which is our Fior & Gentz business that we acquired one and a half years ago, contributing nicely, and we expect to see more growth from the U.S. as we are rolling out. We expect to see benefits from the commercial investment we've made in growing our neuro-orthotics business in this important market. On the back of a new reimbursement code that was established for our bionic knee joint last year. The bracing business, 1% growth here in quarter one. The bracing business has been impacted, especially in the U.S., by a somewhat turbulent environment, also as a result of tariffs, putting further pressure on the pricing environment.
Again, in our Bracing & Supports business, we're providing fundamental solutions that are standard of care in each and every healthcare system. With new product launches here in quarter two, we expect more contribution from our Bracing & Supports business here in the latter half of the year. Patient Care, -1% growth here in quarter one, which was slightly disappointing. What we see in our Patient Care portfolio is that we are growing in our APAC region. We've seen stable, consistent, good growth rates in Australia.
The U.S., which has been where we've had some growth headwinds here over the last almost 18 months, we see good growth rates now in the U.S. as a result of lots of heavy lifting when it comes to integration, and focus on these key initiatives that we are prioritizing to get back on a growth track and increase the profitability in our Patient Care business. That is, we're very, very pleased with the progress here in the U.S. Europe came in slower than what we anticipated. We did have a very big quarter in Europe in quarter four last year, which has had a little bit of an impact on our activity levels here in quarter one.
We also have Easter holidays slipping into quarter one, resulting in fewer active working days, or in our Patient Care business, which is again always driven by our ability to utilize our capacity. That ultimately drives growth in that part of our business. We're encouraged by especially the trends in the U.S., and we expect our European business to get back on track. If I summarize with our guidance, we are reiterating our guidance, 5%-8% organic growth rate and 20%-22% EBITDA margin. When it comes to the growth picture, we continue to expect a high single- digit growth rate from our Prosthetics and neuro business. We expect more from Bracing than the 1% growth rate we delivered here in quarter one.
The biggest topic when it comes to both top- line and margin will be our recovery in our Patient Care business. Overall, the Patient Care business globally is very healthy. We are going through lots of turbulence as a result of our decision to integrate and really build a global Patient Care franchise, and we expect to get back on track and grow that business in line with market here during the year. That will also have an impact on our margin. We are confident in reiterating our outlook for the year here after quarter one. I think I'll pause here.
Yeah. Actually, let's start with. There's a question here. Is it realistic to catch the high end with the start of the year? You have kept it, but is it realistic? I know you can't go too much into it, but maybe mention what should happen to get to the high end. Then of course, it's always scenarios where something needs to happen, but is it realistic and what needs to deliver? Is that everything you might say?
Yeah. I mean, we've kept the high end because we believe it's realistic. However, reaching the high end will require continued strong organic development in our Prosthetics and neuro-orthotics business. It will require, especially on the Bracing side, more impact from these new product launches. The sooner we get back on track in Patient Care, all else equal, we are more likely to be in the higher end of the range. It's also important to remember that quarter one is always our slowest quarter, and the reason for that is partly driven by reimbursement.
There's always a very, very big push in many markets towards the end of the year to close on reimbursement budgets, and especially in the U.S., where healthcare costs are where there's always an individual participation in healthcare costs or when people have visibility on their global cost for a given year. There are lots of these reimbursement dynamics that lead to a big push towards the end of the year that can sometimes spill into quarter one, and then quarter one is always more exposed to some variation in capacity utilization. Most of our business is in countries which are impacted sometimes by harsh weather, which leads to cancellations, et cetera.
It is always a small quarter for us, which is also more sensitive on the margin side, especially in the Patient Care business, which is a high fixed cost business. We shouldn't read too much into it. At the end of the day, demand is strong, reimbursement is stable, and our position in the market remains strong.
Yeah. That's maybe I would always think that you have very high gross margins, very high margins on your high- tech products, but Patient Care is also important. I guess one extra patient coming in on a fixed cost base, that's also a high margin as the nor-
Yeah
The next patient you didn't expect though.
Yeah.
Is that correctly understood in your business model?
Yeah. I mean, that's all else equal, our Patient Care business is dependent on our ability to serve patients and utilize the cost or the capacity we have in the business. If we don't see patients, we will not sell that time, the day after that time is gone.
Yeah.
It's a little bit like the airline business.
Yes
Use that analogy.
Very, very high margin on this extra patient, then, and the cancellation is actually.
The cost, yeah. Yeah. Exactly.
Yeah . There's a question here. Looking at others, has there been a general fall in patients, or are you losing market share? Because I think I always understood in this world that there's an undersupply of you know physicians and this one, so you know you should be able to fill it up if you know if the patients move. Has there also been a fall in patients in general, or is it this focus on rebranding that has suddenly lost momentum?
No, we don't believe that that we're losing share or there are or there's any fundamental shift on the demand side. If we again look here at quarter one, we have growth in the APAC region, we have growth in the U.S. region. We are not generating growth in the Europe region, but the Europe region has been quite stable. Again, reimbursement is stable. Our capacity is there. However, here in quarter one we're going through the rebranding, let's say, initiative in one of our largest markets in Europe that cost a-
Mm
A couple of days, which we're not seeing patients. There's a few of these things that are disturbing the picture here in quarter one, but we don't believe that there's any fundamental change in the market or that we are losing share in any shape or form.
Your confidence, and if I should say, you know, if you have a discount store selling stereos or something, you hope people will get in the door. You need to pull them in. Do I understand it correctly? In general, in the western system, maybe not so much, but there is actually a lack of potential treatments compared to the patients who wanna go in. Is that also a part of why you are? You know, I just need to execute on this one.
Yeah.
The patients are out there. Is it correct to understand it like that?
Yeah
That there is actually a lack of, you know, facilities to treat these patients?
Well, the big picture in our industry, and that applies both in mature healthcare systems and also in less mature healthcare systems, is that the relative utilization of good mobility devices is low.
Yeah.
It's our job to change that. Our business is a lot about serving an existing patient population that consistently needs to maintain, upgrade, and renew their mobility device. The vast majority of the activities in our Patient Care business is around serving that existing population.
Yeah.
That population is stable in size and is gradually having access to better mobility devices. If we look across or look at the development here in sort of the more mature healthcare systems over the last two decades, there has been a gradual increase in healthcare systems' ability and willingness to fund good solutions. The reasons they do that is that all else equal, if people are more mobile, that drives down the cost burden for systems. That is the core of our business.
If peace comes in Ukraine, are you ready to increase your presence in that country? I know it's not a nice subject to touch, but is there any small hope that there could be peace and the need for this one? Do you have some plans in the drawer or something to increase your presence down there and helping them through, I guess, a tough period for the country, because so many have lost their limbs in this horrible war?
Yeah
... do you work with any plans, prepare anything, maybe, not as a business, but to go into this country and try and support them in what must also be a part of the rebuilding the people?
Yeah, I mean, Ukraine is an important topic. I am not the best expert to speculate on when there will be peace, but I hope there will be peace as soon as possible. The facts are that in Ukraine, there is a very large population of young men mostly who will need prosthetics for many years to come. We have done our utmost to support the situation in Ukraine with the education of prosthetists. We have established a clinic in Kyiv. We have established initiatives to fund, let's say, the 1,000 new legs. That's an initiative we created with the Icelandic government where Embla Medical is also contributing on a non, you could say, profit basis.
In terms of how the market will develop is dependent on when there will be peace, what sort of, let's say, payment system will there be to build these solutions and maintain these solutions, because that will be very important for Ukraine to establish a good system around this. Because it's all about getting all these individuals back into their normal routines and enabling them to live their life.
Productivity, I guess, you know, just from an economic standpoint. I know it's a harsh one, but,
Yeah, I mean, this is just, and this is where we can contribute as a company to enable these individuals to return back to active life, and the socioeconomic impact of that is very, very positive, and so this is just a little bit. This is probably the big picture in Ukraine. It will be a big market for prosthetics. This is probably the biggest population of again young men that will need these solutions for a long time. We, as Embla Medical, will do our utmost to build a good presence in Ukraine and support the development.
As a start, as you mentioned, you're building the first rails there to that, right, by having a clinic, by supporting the training, and so on.
Yeah.
I guess that's all you can do before.
Yeah
Actually, peace talks. Yes. There's a question here. Is the effect from the tariffs higher than expected? You mentioned it as an explanation of why your margins have gone down, or is it that tariffs actually first came in the latter part
Yeah
... in-
That's a little bit, the picture here. The tariffs started to impact sort of quarter two last year. Now we're comparing to a quarter where we didn't pay any tariffs last year. We've seen that tariffs is about $2 million for us on a quarterly basis. That's a lot here in quarter one to make up for in other parts of the business. We also have some FX impact. The combination of tariffs and FX is about 1.5 percentage points. If in the absence of that, we would have seen a higher margin than in the same quarter last year.
There's been lots of turbulence around these tariffs, and then there's also some. We'll see how it goes.
As expected. It's simply that you didn't have them last year, and this year you have them.
Yeah. Yeah.
Yeah, we will look when we get to Q4, you can't mention it as a difference, right?
No.
If I understand it correct, because then you have started this.
Yeah. Yeah.
Yeah. On the bracing, you said product launches should drive some of that growth back. I always guessed that was a kind of a, not a product launch market that it's, you know, it is more driven by, you know, not high-tech products.
Yeah
It's not products developing. What are you bringing to market here? I don't know whether you can be so specific that you actually-
Yeah
... feel like you could lift some of those.
Yeah, I can be specific around that. In essence, you're correct. The bracing business is not, let's say, a business that is as dependent on kind of new product launches. We have a high- quality portfolio. We compete on, let's say, a broad portfolio in addition to sort of being able to position ourselves as a one-stop shop for everything that is needed around bracing. However, there are some pockets in the bracing business, for example, our osteoarthritis business here in Europe. In Europe, let's say osteoarthritis for stivkigt [Foreign language] in Danish.
Yeah
That is the bulk of our business in Europe, actually. We are launching a new OA brace here in quarter two, which has some excellent new features. That is a sub-segment of the bracing market, which is more kind of driven by innovation, functional benefits.
Yeah
Which will, we expect, to help our growth rate, especially here in Europe.
Perfect. Also, on the Fior & Gentz and the neuro-orthotics, this market you are trying to actually open up in the U.S., how far are you in that? Have you laid the rails? Have you done the pre-marketing, and now you are starting to reap the benefits, or are you already starting to see sales? Just a little bit to see if, you know.
Yeah.
Yes, you have talked about that as also as one of the big potentials that you are. So are you in the first inning, I would say, and that's also why maybe you have expectations to that this could support the rest of the year's higher growth?
We're starting to see sales co,me in in the U.S. Basically, we're growing from a zero base in the United States.
Yeah.
We haven't had any sales in neuro-orthotics in the United States, so we're starting from a small base. The big picture is that the reimbursement is there for the bionic knee joint. The patients are there, and it's all about increasing awareness and also helping our independent clinical customers support them in terms of how they build this business, in terms of how they can support more patients. That's a lot about also the fabrication piece, because remember, it's very similar to our prosthetics business.
Yeah.
It's always you could say a customized piece of equipment that needs to be individualized to each and every person. That's that whole fabrication piece that we have a solution around that, making it more easier for our clinical customers to see patients and then bring more patients onto these products. We're starting from a small base. We're starting to see some sales coming in here in quarter one. We're starting to see some customers building up a pipeline of potential patients. It's moving in the right direction.
Okay. You have done a lot of the training right now. That's also, you know, and when you start.
Yeah
From a zero base, you know, it can have some impact on the growth numbers. We shouldn't understand it that you already are selling a lot and that can grow more. It's more like you've done all the training and all the pre-marketing. You started selling a little bit, proven the market concept.
Yeah
From a zero base, of course, it can have some effect on the growth.
Exactly.
Yeah. Perfect. That was the last question. Thank you to you, Sveinn, for taking the time to present the result and answering some questions. Thanks to everybody listening in. May everybody have a nice day.
Thanks so much for having me this morning. Thank you very much.