copyright ossurgibaud group 2006 acquisition of the gibaud group jón sigurðsson, president &...

Copyright OssurGibaud Group 2006

Acquisition of the Gibaud GroupJón Sigurðsson, President & CEO

Copyright OssurGibaud Group 2006

Forward-looking statements

This presentation contains forward-looking statements as the term is defined in the US Private Securities Litigation Act of 1995. These statements reflect the Management’s current views with respect to certain future events and financial performance. Although the statements are based upon estimates Management believes to be reasonable, there is no assurance that these statements will be achieved.

Statements containing the financial outlook for 2006 and the following years naturally involve risks and uncertainties, and consequently actual results will differ, and may differ materially, from those projected or implied in the forward-looking statements.

The uncertainties may include unexpected developments in the international currency exchange and securities markets, market driven price decreases for Össur’s products, delay or failure of development products, production problems and unexpected cost increases, development of new technologies by competitors, the introduction of competing products within Össur’s core areas, exposure to product liability and other lawsuits, changes in reimbursement rules and governmental laws.

Copyright OssurGibaud Group 2006 3

Who are we?

• Global Orthopaedic Company

• Growing through Innovation

• Transforming through acquisitions

Ossur - becoming a leader in the Orthopaedic Industry


Becoming a leading player in non-invasive orthopaedics with $750 million in sales and a 23% EBITDA margin

Vision 2010 and strategy

Strategy:

● Technical innovation leadership

● Sales and operational cost leadership

● Increase focus on emerging markets

● Consolidate through acquisitions

● Add value through partnerships

...supported by a high performance culture and adequate financial resources.


Acquisitions History

Gibaud Group Designer & manufacturer of orthopaedic products $134 million

PS


The acquisition of the Gibaud Group in France

Transaction summary

Enterprise value €101 million

Sales 2005/2006* €41 million

EBITDA 2005/2006 21%

Estimated sales 2006/2007 €44 million

One time restucturing cost € 5 million

Inventory step-up € 2 million

● Bank of America advised on the transaction

● Kaupthing bank advised on the financing and provided bridge financing of €100 million

● An equity offering is planned for the spring of 2007

*The fiscal year of Gibaud is from July to June


The acquisition of the Gibaud Group is in line with Ossur’s strategy of expanding in the European bracing & support market through strategic acquisitions

Strategic rationale

● Adds meaningful scale in France, a key European market

● Possibilities to broaden and diversify the current Ossur product offering with phlebology and new Bracing & Support products

● Possibilities to broaden Gibaud’s product offering with current Ossur products

● Very well known brands

● A potential base for further European expansion, especially in Southern Europe

● Will be operated as a stand alone unit at least for 18-24 months – limited synergies


06 Sales € 26 m € 13m € 2m

Sales Contribution 65% 30% 5%

Forecast Growth(2)

6% 8% 5%

Description -operte medical - #2 2% Market Share)

Pharmacies are th 26% of production is outsourced

Plans to move basic production from St. Etienne to Thailand over 3 years to reduce

costs by 17-25%

Leading French manufacturer of phlebology products - #3 France (10% Market Share)

Acquired TBI in 2002 A new production facility in Trevoux (Lyon) was

built at the end of 2005 70% of phlebology production is outsourced from

France Plan to shift production to own plants in Trevoux and lower complexity offerings to Thailand to improve margins

Entered “Grand Public” Market in 2005 to diversify income stream and seek new avenues of

growth - #2 France for comfort shoes (15% market share)

100% of production outsourced

Key Products

supports, ankle guards and knee guards Tailor-made products & podology products ble products Shoulder & Wrist Devices

Bandages & Tights Stockings Knee-highs Stump socks

Comfort Shoes Thermo-regulated T-Shirts

Key Competitors

Thuasne Lohmann & Rauscher

Ganzoni Innothera

Scholl

Gibaud Group

Gibaud

Braces & Supports Phlebology Other

• Cervical Collars, Lumboscral & abdominal• Supports, ankle and knee guards• Custom made products & podolgy products• Thermoformable products

• Bandages & Tights• Stockings• Kneehights• Stump socks

• Comfort shoes

Leading manufacturer of non-operative

medical devices - #2 in France

(22% market share)

Pharmacies are the key distribution channel

26% of production is outsourced

Exports contributed sales of Eur 6 million

Leading French manufacturer of phlebology

productcts #3 France (10% market share)

New facility in Trevoux (Lyon) was built at the

end of 2005 70% of phlebology production is

outsourced from France

Mainly comfort shoes - #2 France for

comfort shoes (15% market share)

100% of production outsourced

• Founded 1890• Employees 361• Locations - Saint Etienne (headquarters) - Trevoux


Gibaud Group

Hospitals / Clinics/ Specialists

2% of sales

DispensaryPharmacies

71% of sales

Exports - 15%Other - 1%

16% of sales

Strong distribution network in France

55 sales representatives / 10 specialized salesreps / sales force has increased by 33% since year-end 2004

Wholesaler

11% of sales


Market overview - France

COMPETITIVE POSITIONING

Other

6%Cognon-Morin

8%

Thuasne

11%

Gibaud

13%

Innothera

22%

Ganzoni

40%

Axmed (DJ)7%

Other22%

Coop. Pharm.7%

L&R9%

Gibaud24%

Thuasne31%

Phlebology

Braces & support

• Market size estimated $ 130 million – growth approx. 5%

• Healthcare services in France are tightly regulated by

the Government, social security finances 80%

• Increased sales to hospitals and pharmacies

• Aging population and related orthopaedic problems

• Improved marketing and clinical education

Compression therapy is a preferred treatment for venous ulcers and edema and involves application of external pressure on the vascular elements to assist in pumping blood back to the heart

• Market size estimated at $ 130 million – growth approx. 8%

• Static compression therapy (phlebology) constitutes 65-70%

• Compression therapy is reimbursed by the Government

• Improved marketing and clinical education of compression products

• Aging population and related orthopaedic problems


The European Bracing & Support market

Current situation

The acquisition of the Gibaud Group adds meaningful scale in the European Bracing & Support market

12%

9% 9%

7%6%

5% 5% 5%

3% 3%2%

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15%

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Post acquisition


Americas53%

Europe44%

Asia3%

Sales by markets

Europe30%

International7%

Americas63%

Q3 2006 Össur & Gibaud


Sales by product segment

Braces & Supports

53%

Prosthetics47%

Q3 2006

Prosthetics37%

Braces & Support50%

Phlebology6%

Other7%

Össur & Gibaud

copyright ossurgibaud group 2006 acquisition of the gibaud group jón sigurðsson, president &...

Documents

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sales slide

gibaud group gibaud

increased sales

sales exports

estimated sales

sales representatives

sales of eur