Sunrise Medical plans listing on the Frankfurt Stock Exchange

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Sunrise Medical plans listing on the Frankfurt Stock Exchange

• Sunrise Medical, a global market leader for assistive mobility solutions, announces its intention to list on the regulated market (Prime Standard) of the Frankfurt Stock Exchange in the summer of 2024, subject to market conditions
• Offering to consist of private placements of newly issued shares from a capital increase as well as a secondary component from an existing shareholder controlled by Nordic Capital CV1 Limited
• Sunrise Medical is a leader in the complex rehabilitation market with a broad portfolio of mission-critical products across complex and standard rehabilitation supported by a strong global footprint
• Strong commitment to end-users with clear vision to improve people’s lives by leading in the development, design, manufacturing and distribution of innovative, high-quality assistive mobility products and services
• The company operates in the large, growing and resilient rehabilitation market supported by strong underlying trends and sees continued attractive growth potential
• Sunrise Medical showed strong financial performance in first nine months 2023/24 with revenues of approx. €516 million (12% year-on-year increase of revenues at constant currency) and an increase of approx. 330bps in Adjusted EBITDA margin to 20.8%

Malsch, Germany | May 28, 2024

Sunrise Medical (the “Group”), a global market leader for assistive mobility solutions, today announced its intention to list on the regulated market (Prime Standard) of the Frankfurt Stock Exchange. Sunrise Medical is active in the development, design, manufacturing, and distribution of assistive mobility products and solutions such as manual and power wheelchairs, power assist products, pediatric and geriatric therapeutic devices, mobility scooters, seating and positioning systems as well as daily living aids and other home medical equipment. The Group is a leader in the field of complex rehabilitation, where products are often tailor-made to the specific requirements of individual mobility-impaired customers with critical need.

The planned stock market listing is expected to further strengthen Sunrise Medical’s future growth potential and expand its financing opportunities. The offering will consist of private placements to qualified investors in the European Economic Area and to certain institutional investors in various other countries. It will comprise newly issued shares from a capital increase and a secondary component from Sunrise Medical’s shareholder Cidron Liberty Systems S.à r.l. (the “Selling Shareholder”), an entity controlled by Nordic Capital CV1 Limited^[1]. The first day of trading is expected in the summer of 2024, subject to market conditions. In addition to any secondary proceeds attributable to the Selling Shareholder, Sunrise Medical aims to raise €240 million in gross proceeds from the private placement. The Group intends to use its proceeds to repay existing debt aiming to strengthen its balance sheet and resulting in a reduction of leverage.

Thomas Babacan, President and CEO of Sunrise Medical, says: “Today’s announcement marks an exciting milestone for Sunrise Medical. For more than 40 years we have been following our mission of improving people’s lives and we will commit to this mission even further by realizing our full potential as a publicly listed company. Based on our strong global footprint and proven strengths in providing our customers with high quality products and services, coupled with continuous innovation and our robust financial profile, we are ideally positioned to capture further growth opportunities in the resilient rehabilitation market. Everything we do is driven by our purpose to delivering outstanding solutions to individual mobility-impaired users in need and support them to lead independent lives. With our commitment to innovation and quality, our user-centric business model and our unrivalled industry and research ecosystem, we continue driving innovation for medical progress and creating value for all our stakeholders.”

A purpose-driven industry leader in the rehabilitation field

Within the field of medical technology, Sunrise Medical is a global leader for assistive mobility solutions offering innovative, high-quality products for users in need with the mission of improving people’s lives in the everyday world. With a particular focus on products for those users with chronic clinical needs, this includes neurological, orthopedic, and other diseases such as multiple sclerosis, strokes, spinal cord injuries, cancer, and osteoarthritis, which can all lead to severe impairment of individual mobility. Sunrise Medical supports these users with a broad product portfolio in the fields of complex and standard rehabilitation.

The Group, with its seat in Malsch, Germany, currently operates in 23 countries and employs over 2,800 associates worldwide. Combining its global footprint with a strong local presence, Sunrise Medical’s products are being sold in over 130 countries to an extensive network of healthcare dealers, government agencies and public institutions.

In the financial year 2022/23 (ended on June 30, 2023), the Group achieved revenues of €636 million[2] (FY 2021/22: €544 million), corresponding to an increase of revenues at constant currency of approximately 15%[3] compared to the previous year. During the first nine months of the financial year 2023/24, Sunrise Medical generated revenues of approximately €516 million[2] (9M 2022/23: €470 million), corresponding to an increase of revenues at constant currency of approximately 12%[3] driven by growth across all regions and product groups.

Attractive market characterized by strong underlying trends

Sunrise Medical is operating in the large, growing, and resilient rehabilitation market with a focus on the complex rehabilitation field. Products in this group are often tailor-made to the specific needs of individual customers, which requires specialized know-how in design and manufacturing. For the overall rehabilitation market, the Group estimates an addressable market size of €5.2 billion in 2023 with an estimated compound annual growth rate (CAGR) of 4.7% between 2023 and 2027. The complex rehabilitation market is forecasted to grow even stronger than the overall market at a CAGR of 5.4% from 2023 to 2027. The rehabilitation market is expected to continue seeing growing demand driven by multiple global trends, in particular an increase in life expectancies and the ageing of populations. A rising prevalence of chronic conditions adds to the growing demand for more complex assistive mobility solutions, as does the trend of enabling homecare for users with more challenging medical indications.

Sunrise Medical’s leading position in this growing market is underpinned by a strong global footprint across regions especially in all key markets in Europe and North America. It facilitates long-established relationships with local clinicians, dealer networks and users as well as enables product personalization and tailored local services in short lead times. In addition, Sunrise Medical and its portfolio of 18 proprietary key brands also have a high user and customer engagement driven by strong brand recognition and loyalty.

Furthermore, the rehabilitation industry needs to comply with strict regulatory requirements and has complex local reimbursement policies which differ from country to country and from product group to product group. Sunrise Medical benefits from its in-depth knowledge of regulations and compliance requirements as well as local reimbursement systems, adding to the Group’s already strong market position.

Leading portfolio across full spectrum of complex and standard rehabilitation

Sunrise Medical has a broad assistive mobility product portfolio across a vast spectrum of complex and standard rehabilitation. With top positions in key regions in Europe and North America, Sunrise Medical is a market leader for solutions especially in the complex rehabilitation field. Products for the complex rehabilitation market generated approximately 78% of revenues in the financial year 2022/23. In this main focus area, products include advanced rehab power and adult manual wheelchairs, seating and positioning elements such as wheelchair cushions or back and head support systems, power assist products, pediatric solutions, and digital solutions. All products provide a wide range of personalization or configuration options. In the field of standard rehabilitation, which represents the remaining 22% of revenues, products are intended for the elderly population or patients with less complex rehabilitation needs. This includes assistive mobility solutions such as non-personalized wheelchairs and rollators, mobility scooters as well as lifters and other home medical equipment.

Sunrise Medical’s long-term success in the market is driven by continuous innovation. The Group employs over 110 associates focused on research & development (R&D) and engineering as well as operates eleven R&D sites in six countries. Sunrise Medical’s R&D strategy is proven by a strong track record of successful product launches. For the financial year 2022/23, approximately 32% of the Group’s revenue arose from new products, technologies and upgrades to products launched in the period from financial year 2021 to financial year 2023. Sunrise Medical has a strong innovation pipeline which will continue to be a key driver for the future growth.

Furthermore, Sunrise Medical also has a clearly defined M&A strategy with a robust pipeline of potential M&A targets that complements in-house innovation. Through M&A, Sunrise Medical has recently added advanced technologies such as 3D printing for seating and special controls for power wheelchairs which also significantly helps to strengthen the product and technology portfolio.

Strong global footprint combined with trusted relationships to key stakeholders

With a total of 34 sites in 23 countries, Sunrise Medical has one of the most extensive manufacturing and assembly operation as well as sales and service footprint in the industry’s key markets. This is a distinctively important advantage to enable the “last mile personalization” and allows that a highly personalized product can be delivered to customers within short lead times. It also enables fast and reliable local repair and services. The Group’s sales offices presence is backed by its own strong local commercial, product and clinical specialist teams, one of the most extensive in the industry. This allows for continuously strengthened and deeply entrenched relationships with key stakeholders in local markets such as clinicians, dealers, government agencies, public institutions and private insurance companies, as well as end-users.

The Group has developed highly collaborative relationships with a large global network of clinicians and therapists who play a vital role in supporting users throughout the patient journey. Its brands have a strong brand recognition across clinicians, dealers, and users. This is supported by the Group’s emphasis on extensive services and support provided for clinicians and dealers as well as its broad user engagement.

Attractive financial profile with track record of resilient profitable growth and cash generation with strong nine months financial performance delivered

Sunrise Medical has shown steady profitable growth in recent years, growing revenues at constant currency and Adjusted EBITDA[4] at a respective CAGR of approximately 13%[5] and 12% in the period between the financial year 2021 and financial year 2023. For the financial year 2022/23, the Group generated an Adjusted EBITDA of approximately €118 million (FY 2021/22: approx. €99 million) representing an Adjusted EBITDA margin of 18.5% (FY 2021/22: 18.1%). Adjusted free cash flow stood at approximately €85 million representing a robust free cash flow conversion[6] of 72% for the financial year 2022/23.

For the first nine months of financial year 2023/24, Sunrise Medical grew Adjusted EBITDA by approximately 32% to approximately €108 million (9M 2022/23: approx. €82 million) and improved its Adjusted EBITDA margin to approximately 20.8% (9M 2022/23: approx. 17.5%). Adjusted free cash flow for the first nine months increased to approximately €56 million (9M 2022/23: approx. €48 million).

High potential for further growth and value creation through robust fundamentals and clear growth strategy

Based on Sunrise Medical’s robust fundamentals and strong market position, the Group sees itself set for future growth and margin improvements through a combination of organic growth, operational efficiencies, and selected bolt-on acquisitions. Over the past years Sunrise Medical has delivered robust organic growth based on a number of factors such as the strategic focus on complex rehabilitation and new product launches. Additionally, the Group has executed a number of successful strategic acquisitions, as M&A has always been an integral part of Sunrise Medical’s growth strategy. The strong cash flow generation positions Sunrise Medical for further organic and inorganic growth.

The Group has set out a clear growth strategy which focuses on different key pillars. In addition to capitalizing on the existing underlying market growth, Sunrise Medical intends to accelerate growth in all regions with a focus on a small number of the Group’s core markets. Innovation will also continue to be a key growth driver and the identification and execution of selected bolt-on acquisitions remains an important pillar of the strategy. To further improve profitability, the Group is also undertaking various operational efficiency programs spanning across areas like supply chain and IT infrastructure.

In the medium term, Sunrise Medical expects to reach a mid- to high-single digit percentage growth of revenue at constant currency, including the impact of any acquisitions. In terms of the adjusted EBITDA margin, the Group expects to reach a low-to-mid 20’s percentage level in the medium term. On net leverage ratio, Sunrise Medical targets a net leverage below 2x Adjusted EBITDA in the medium term. The Group currently targets a dividend pay-out ratio of 20 to 30% of its Adjusted net income for the respective periods following the listing, subject to the Group’s capital allocation priorities. The first dividend payment is planned in respect of the financial year ending June 30, 2025 to be paid at the end of that calendar year. The aim is to increase the dividend over time.

BofA Securities, UBS and Jefferies are acting as Joint Global Coordinators and, together with Berenberg and HSBC, as Joint Bookrunners.

About Sunrise Medical

Committed to improving people's lives, Sunrise Medical is a global leader in the development, design, manufacturing, and distribution of innovative, high-quality assistive mobility devices and services. Distributed in more than 130 countries under its own 18 proprietary brands, the key products include manual and power wheelchairs, power assist products, pediatric and geriatric therapeutic devices, mobility scooters, daily living aids and more. Operating in 23 countries, Sunrise Medical Group is headquartered in Malsch, Germany and employs over 2,800 associates worldwide. For further information, please visit: https://sunrisemedical-group.com/

Media contact

FTI Consulting

Thomas Krammer
+49 (0) 170 2827848

David Eeckhout
+49 (0) 151 46712316

press@sunmed.com

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^[1] References to “Nordic Capital CV1 Limited” in this press release refer to Nordic Capital CV1 Limited acting in its capacity as general partner of Nordic Capital CV1 Alpha, L.P. and Nordic Capital CV1 Beta, L.P., entities incorporated or established in Jersey, Channel Islands. References to “Nordic Capital” in this press release refer to Nordic Capital CV1 Limited or, depending on the context, any, or all, Nordic Capital branded entities, vehicles, structures, and associated entities. The general partners and/or delegated portfolio managers of Nordic Capital’s entities and vehicles are advised by several non-discretionary sub-advisory entities, any or all of which are referred to as “Nordic Capital Advisors.”

^[2] Revenues are based on reported financials.

^[3] Revenue growth is based on constant currency rates for which foreign currency revenues are translated using constant currency rates that correspond to foreign exchange rates adopted for internal planning purposes for the financial year 2023.

^[4] Adjusted EBITDA means profit for the year/period before net finance costs, tax expenses, depreciation, amortization, special items to operating profit, which include costs related to acquisitions, strategic advisory costs, major site relocations, costs related to the exit of senior managers, and exceptional legal costs and before realized foreign exchange gains and losses not included in the operating profit.

^[5] Revenue CAGR is based on revenue shown on constant currency basis, for which foreign currency revenues (other than the euro) are translated using constant currency rates for all periods presented that correspond to foreign exchange rates adopted for internal planning purposes for financial year ended June 30, 2023.

^[6] Calculated as the sum of cash generated from operating activities pre-tax, plus proceeds on ordinary disposal of property, plant and equipment, less purchase of property, plant and equipment, interest paid on lease liabilities and repayment of lease liabilities and adjusted for the cash impact from special items, divided by adjusted EBITDA.