Slide 1: Arjo Q4 & Year-End Report 2023
ARJO Q4 & YEAR-END REPORT 2023 January 30, 2024 Joacim Lindoff, President & CEO Niclas Sjöswärd, CFO 1
Slide 2: Agenda
Business update – Q4 & FY 2023 Financials in detail Agenda Outlook 2024 Key takeaways Q&A
Slide 3: Q4 highlights: A strong end to 2023
Q4 highlights A strong end to 2023 Net sales Gross margin grew organically by amounted to Continued growth across all regions • Healthy net sales growth in major markets • Positive capital sales development, both volume and price 4.9% 45.3% • Good development in Service and Rental globally Strong pr
Slide 4: Full year 2023 highlights: A year of recovery & stabilization
Full year 2023 highlights A year of recovery & stabilization Net sales Gross margin grew organically by amounted to • Strong core business development across regions, setting strong foundation for further development • Continued growth in the US 4.7% 43.1% • Outcome programs in both Pressure Injury
Slide 5: North America Q4 2023
North America Q4 2023 Strong development in Canada • Growth journey continues – 15 consecutive quarters of growth Q4 org. net sales • Service, Rental and Capital all perform well • Good penetration in Long-Term Care, with further potential in Acute Care +7.6% US market trending in the right directio
Slide 6: Global Sales Q4 2023: Western Europe
Global Sales Q4 2023 Western European markets (+0.5% in Q4, +3.0% FY) Q4 org. net sales • Strong net sales development in markets like Netherlands, Italy and +4.0% Ireland • Germany and UK performance aligned with last year despite market turbulence • Capital sales develops according to plan, in bot
Slide 7: Global Sales Q4 2023: Rest of the World
Global Sales Q4 2023 Rest of the World markets (+14.1% in Q4, +8.1% FY) Q4 org. net sales • Strong growth in many markets such as Australia, Africa and India +4.0% • Generally healthy demand for capital equipment, with step by step improvements in product mix • Improvement in service and rental acti
Slide 8: Q4 gross profit: Positive gross margin improvement
Q4 gross profit Positive gross margin improvement Gross profit bridge – Q4 2023 vs. Q4 2022 (MSEK) • Continued gross margin improvement y-o-y Margin development x Margin (Percent) x (Percentage point) • Contribution from price adjustments and efficiencies according to plan – strong focus to continue
Slide 9: Q4 adjusted EBIT: Strong development
Q4 adjusted EBIT Strong development • High activity levels to support continued growth agenda Adj. EBIT bridge – Q4 2023 vs. Q4 2022 (MSEK) • Good cost control throughout the value chain continues x Margin (Percent) • OPEX development in line with expectations • Inflation on salaries clearly visible
Slide 10: Q4 working capital and operating cash flow
Q4 working capital and operating cash flow Working capital days – positive trend continues Strong operating cash flow Working capital days – Q1.20-Q4.23 Operating cash flow – Q1.20-Q4.23 Working capital days Operating cash flow (MSEK) 843 108 734 106 100 102 102 101 639 613 96 92 97 95 92 89 94 525
Slide 11: Q4 net debt and leverage
Q4 net debt and leverage Net debt level decreases further In turn improving leverage Net debt – Q1.20-Q4.23 Leverage – Q1.20-Q4.23 Net debt, incl. IFRS16 (BSEK) Net debt / Adj EBITDA, multiple (R12) 5.8 5.6 5.6 3.3 3.2 5.3 3.1 5.1 5.1 5.1 5.0 5.2 2.9 5.0 5.0 2.8 2.8 2.8 4.8 4.7 2.7 2.7 2.7 4.6 2.6 2
Slide 12: Outlook 2024
Outlook 2024 Organic net sales growth for 2024 is expected to be within the Group’s target interval of 3-5% Page 12
Slide 13: 2024 expectations: Capital Equipment
2024 expectations Capital Equipment – trending in the right direction Continued market recovery after the pandemic • Step by step improvement expected in the US – Canada remaining on high level • Western Europe expected to develop in line with 2023 on volume • Positive trend in Rest of the World exp
Slide 14: 2024 expectations: Service business
2024 expectations Service business • Solid development globally expected to continue • Service volumes through MOVE contracts expected to increase • Pricing initiatives to continue to mitigate cost pressure and restore previous margin erosion 14
Slide 15: 2024 expectations: Rental business
2024 expectations Rental business • Positive rental trend remains, coming of a strong 2023 • Market share in the US expected to continue to grow, also adding on Long-Term Care focus • Step-by-step development of European rental business continues, with increasing profitability levels • Continued eff
Slide 16: 2024 expectations: Outcome Solutions
2024 expectations Outcome Solutions Pressure Injury Prevention and Patient Handling • Patient Handling outcome projects with good pipeline in the US, with conversion rate set to pick up • SEM scanner implementation continues with good pace • Strong demand – growing customer pipeline and conversions
Slide 17: Key takeaways
Key takeaways • Strong core business growth across regions setting the base • Continued positive trend in Service and Rental globally • Major markets developing well with good base for 2024 • US market remains challenging due to external factors – but moving in the right direction • Healthy profitab
Slide 18: Q&A
Q&A 18
Slide 19: Financial calendar and further questions
Financial calendar Annual Report 2023 March 2024 Interim Report Jan-Mar 2024 April 18, 2024 Annual General Meeting 2024 April 18, 2024 Interim Report Jan-Jun 2024 July 12, 2024 Interim Report Jan-Sep 2024 October 17, 2024 Further questions Maria Nilsson EVP, Communication & Public Relations +46 734
Slide 20: Forward looking information
Forward looking information This document contains forward-looking information based on the current expectations of Arjo’s management. Although management deems that the expectations presented by such forward-looking information are reasonable, no guarantee can be given that these expectations will
Slide 21: Arjo: Empowering Movement
aifJjJoO EMPOWERING MOVEMENT