2. February 2004 Copyright Ossur

Össur hf.

Financial overview 2003

2. February 2004 Copyright Ossur

Financial highlights 2003

Sales 2003

Expenses 2003

Balance sheet 31.12.2003

Q4 financial highlights

GII Purchasing accounting

2. February 2004 Copyright Ossur

Financial highlights 2003

2. February 2004 Copyright Ossur

The EBITDA “gap”

EBITDA 10%

Unusual items 4%

= Normalized EBITDA 14%

R&D excess investment 3%

GPM slide 3%

= Targeted EBITDA 20%

2. February 2004 Copyright Ossur

Unusual items 2003

• Severance & restructuring exp. 1.531.000 USD– Össur North America AV 723.000– Össur Engineering in Albion 28.000– Össur Engineering R&D in AV 299.000– Generation II USA in Seattle 204.000– Generation II Orthotics in Canada 106.000– Össur hf. 171.000

• Litigation expenses 2.200.000 USD

• DW relocation 280.000 USD

• Expensed acquisition process 300.000 USD

• Normalized EBITDA is 14%

2. February 2004 Copyright Ossur

Income statement by quarters 2003

2. February 2004 Copyright Ossur

14 18

46

68

81

94

0

10

20

30

40

50

60

70

80

90

100

1998 1999 2000 2001 2002 2003

US

D m

illi

on

s

Net sales 1998 - 2003

2. February 2004 Copyright Ossur

1,11,9

5,2

8,6

10,1

4,7

0,0

2,0

4,0

6,0

8,0

10,0

12,0

1998 1999 2000 2001 2002 2003

USD

mill

ions

Net profit 1998 - 2003

Note: Unusual expenses 2003 4,3 million USD

2. February 2004 Copyright Ossur

EPS 1999 - 2003

3,12

1,45

2,64

0,91

1,48

1999 2000 2001 2002 2003

US

Ce

nts

2. February 2004 Copyright Ossur

Key ratios 2001-2003

42%

37%

41%

8% 9% 10%

18% 18%

10%11% 12%

5%

57%59%

63%

2001 2002 2003

% o

f sa

les

Gross profit

GS&M

R&D

EBITDA

Net profit

Note: Unusual expenses 2003 GPM= +0,5%, SG&A = -3,4%, R&D = -0,7%

2. February 2004 Copyright Ossur

Key ratios 2003 / 2002

6.112 4.6619.428

94.467

54.235

10.05611.50114.310

81.284

47.851

13.183

-5.395-5.389-4.882

6.384

Net sales Gross Profit EBITDA Op. profit Net profit

US

D '000

2003 2002 Change

+ 16%

+13%

-34% -47% - 54%

Note: Unusual expenses 2003 4,3 million USD

2. February 2004 Copyright Ossur

Sales 2003

2. February 2004 Copyright Ossur

Sales by markets

Europe26%

Nordic13%

Other international

markets7%

North America49%

Domestic2%Mauch

3%

2003

North America52%

Europe21%

Nordic13%

Other international

markets7%

Domestic2%Mauch

5%

2002

2. February 2004 Copyright Ossur

Sales by markets 2003

14.089

24.387

49.488

6.503 6.388

11.783

16.995

46.118

North America Europe Nordic Other

US

D '0

00 2003

2002

+ 7%

43%

+20%

+2%

Generation II was acquired October 3rd. 2003. GII sales in 2003 were 5.2 million in North America and 0,7 million in Europe.

2. February 2004 Copyright Ossur

Sales growth 2003in local currency

7%

17%

3%

2%

0% 5% 10% 15% 20%

Nor

thA

mer

ica

Eur

ope

Nor

dic

Oth

er

Other

Nordic

Europe

NorthAmerica

2. February 2004 Copyright Ossur

Sales growth 2003 (excluding GII)in local currency

-4%

17%

3%

2%

-10% -5% 0% 5% 10% 15% 20%

Nor

thA

mer

ica

Eur

ope

Nor

dic

Oth

erOther

Nordic

Europe

NorthAmerica

Excluding Generation II sales of 5,9 million USD. Generation II was acquired October 3rd. 2003.

2. February 2004 Copyright Ossur

Net sales 2001-2003

18,6

21,2 21,420,1

21,722,7 22,4

27,7

16,818,1

17,1

Q12001

Q22001

Q32001

Q42001

Q12002

Q22002

Q32002

Q42002

Q12003

Q22003

Q32003

Q42003

US

D M

illio

ns

16,3

GII sales Q4 2003 is 5,9 million USD

2. February 2004 Copyright Ossur

Expenses 2003

2. February 2004 Copyright Ossur

S&M 2001-2003

23%

18%

20%21%

23%22%

18%

26%

22%23%

19%

21%20%

19%

15%

Q12001

Q22001

Q32001

Q42001

2001 Q12002

Q22002

Q32002

Q42002

2002 Q12003

Q22003

Q32003

Q42003

2003

% o

f s

ale

s

Note: Unusual S&M expenses is 0,5% in 2003

2. February 2004 Copyright Ossur

R&D 2001-2003

7%

8%

9% 9%

10%

11%

9%

10% 10%

11%

7%7%7%

9%

6%

Q12001

Q22001

Q32001

Q42001

2001 Q12002

Q22002

Q32002

Q42002

2002 Q12003

Q22003

Q32003

Q42003

2003

% o

f s

ale

s

Note: Unusual R&D expenses 2003 is 0,7%

2. February 2004 Copyright Ossur

G&A 2001-2003

16%15%

17%16% 16% 16%

17%

24%

19%

26%

20%

24%

16%

22%

19%

Q12001

Q22001

Q32001

Q42001

2001 Q12002

Q22002

Q32002

Q42002

2002 Q12003

Q22003

Q32003

Q42003

2003

% o

f sale

s

Note: Unusual G&A expenses 2003 2,9% in 2003

2. February 2004 Copyright Ossur

EBITDA by Q 2001-2003

2,1

3,6

5,4

3,2

2,6

3,2

3,7

-0,1

3,94,2

2,5

Q12001

Q22001

Q32001

Q42001

Q12002

Q22002

Q32002

Q42002

Q12003

Q22003

Q32003

Q42003

US

D M

illio

ns

2,2

Note: Q4 unusual expenses 2.5 million USD

2. February 2004 Copyright Ossur

EBITDA ratio

17%

25%

16%

18%

10%11%

16%

0%

10%11%

19%

23%

14%15%

24%

Q12001

Q22001

Q32001

Q42001

2001 Q12002

Q22002

Q32002

Q42002

2002 Q12003

Q22003

Q32003

Q42003

2003

% o

f s

ale

s

2. February 2004 Copyright Ossur

Balance sheet 31.12.2003

2. February 2004 Copyright Ossur

Balance sheet

2003 2002

Equity ratio 43% 56%

Current ratio 1.8 2.3

2. February 2004 Copyright Ossur

Balance sheet 31. Dec 2003

65.571

44.011

36.555

38.347 19.768

Assets

Liabilities & Equity

US

D

'00

0

Equity

Fixed

43%

64% 36%

Current

Long term Short term

38% 19%

2. February 2004 Copyright Ossur

A/R 30. Dec 2001-2003

9.854

12.403

14.965

Consolidated

USD '000

200320022001

+ 21%

+ 26%

Note: GII A/R are 3,3 million USD. Decrease in Ossur receivables is 6%.

2. February 2004 Copyright Ossur

Inventories 30. Sept 2001-2003

9.873

12.358

12.415

Consolidated

USD '000

2003

2002

2001

+25%

0%

Note: GII Inventories are 1,6 million USD. Decrease in Ossur inventories is 12%.

2. February 2004 Copyright Ossur

Q4 financial highlights

2. February 2004 Copyright Ossur

Key ratios Q4 2003 / 2002

-1.349 -917

-78

27.651

15.243

2.7872.2793.183

20.077

11.038

7.574

-3.704-3.628-3.261

4.205

Net sales Gross Profit EBITDA Op. profit Net profit

US

D '0

00

Q4 2003 Q4 2002

Change

+ 38%

38%

-102% -159% -133%

Note: Unusual expenses 2.5 million USD in Q4 2003

2. February 2004 Copyright Ossur

Key ratios Q4 2001 - 2003

-1.349 -917

-78

27.651

15.243

2.7872.2793.183

20.077

11.038

17.125

2.7703.4573.987

10.851

Net sales Gross Profit EBITDA Op. profit Net profit

US

D '0

00

Q4 2003 Q4 2002

Q4 2001

Note: Unusual expenses 2.5 million USD in Q4 2003

2. February 2004 Copyright Ossur

Sales by markets Q4 2003 / 2002

3.720

6.661

15.683

1.587 1.357

3.215

4.803

10.702

North America Össur Europe B.V. Össur Nordic, AB Other international markets

US

D '0

00

2003

2002

+46%

16%

+39%

+17%

Note: GII sales in Q4 were 5.2 million in North America and 0,7 million in Europe.

2. February 2004 Copyright Ossur

Key ratios Q4 2001-2003

37% 37%

51%

7%9% 10%

23%

16%

0%

16%14%

-3%

55%55%

63%

Q4 2001 Q4 2002 Q4 2003

% o

f sa

les

Gross profit

GS&M

R&D

EBITDA

Net profit

Note: Unusual expenses 2003 GPM= +0,6%, SG&A = -7,4%, R&D = -0,8%

2. February 2004 Copyright Ossur

GII Purchasing accounting

2. February 2004 Copyright Ossur

GII purchasing accounting

Operating fixed assets 2,521,000 USD

Liabilities - 2,171,000 USD

Working capital 5,000,000 USD

Intangible assets (amortized) 4,444,000 USD

Goodwill (impairment test) 22,801,000 USD

TOTAL 32,595,000 USD

2. February 2004 Copyright Ossur

Thank you !