Ambu A/s Class B · OMXCOP:AMBU_B
Ambu A/s Class B — Ambu A S Ord — FY2022/23 Earnings Presentation
46 slides from Ambu A/s Class B's earnings presentation, Oct 8, 2023
Slide 1: 2022/23 Results Investor Presentation
2022/23 RESULTS AMBU A/S INVESTOR PRESENTATION
Slide 2: Table of Contents
TABLE OF CONTENTS 1 FY2022/23 RESULTS • Business update • Financial update • 2023/24 outlook 2 Q&A SESSION Today’s speakers BRITT MEELBY JENSEN THOMAS FREDERIK SCHMIDT CEO CFO 2
Slide 3: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements, including but not limited to, the statements and expectations contained in the "Financial Update" section of this presentation. Statements herein, other than statements of historical fact, regarding our future results of opera
Slide 4: FY 2022/23 Financial Highlights
FY 2022/23 FINANCIAL HIGHLIGHTS: STRONG PROGRESS ON KEY PARAMETERS – ON TRACK TO DELIVER ON LONG-TERM TARGETS Organic revenue EBIT margin Free cash flow growth before special items (DKK) 7.6% 6.3% 192m Q4 2022/23: 14.1% Q4 2022/23: 7.7% Q4 2022/23: 188m 3
Slide 5: Solid Progress on Strategic and Operational Priorities
SOLID PROGRESS IN FY 2022/23 ON STRATEGIC AND OPERATIONAL PRIORITIES • Global launch of the complete aScopeTM • Driving cost focus and efficiency 5 Broncho portfolio improvement across the business • Next-generation endoscopy system – • Focused geographical presence with exit aViewTM 2 Advance from
Slide 6: FY 2022/23 Revenue Growth of 7.6%
FY 2022/23 REVENUE GROWTH OF 7.6% (14.1% IN Q4), DRIVEN BY ENDOSCOPY SOLUTIONS REVENUE GROWTH 8.3% 7.4% 14.1% 1.259 7.6% 4.775 Reported revenue (DKKm) 7.6% 1.163 4.444 (2021/22: 4%) Reported growth organic growth is driven by Organic growth continued momentum in Endoscopy Solutions Q4 Q4 FY FY 21/22
Slide 7: Endoscopy Solutions Grew 15% and 25% in Q4
FY 2022/23 ENDOSCOPY SOLUTIONS GREW 15% AND 25% IN Q4 DRIVEN BY UROLOGY AND ENT, WITH PULMONOLOGY RETURNING TO GROWTH. PARTICULARLY STRONG GROWTH IN H2 2022/23 REPORTED REVENUE (DKKm) Endoscopy Solutions 25% organic growth (Q4 21/22 vs. Q4 22/23) Organic growth +15% Urology & ENT maintained 2.687 hi
Slide 8: Endoscopy Solutions excl. Pulmonology Grew 38%
FY 2022/23 ENDOSCOPY SOLUTIONS EXCL. PULM GREW 38% AND 37% IN Q4 DRIVEN BY CONTINUED STRONG MOMENTUM WITHIN UROLOGY AND ENT REPORTED REVENUE (DKKm) Endoscopy solutions excluding pulmonology 37% organic growth 2022/23 HIGHLIGHTS (Q4 21/22 vs. Q4 22/23) • Urology: Driven by both new customer acquisiti
Slide 9: Pulmonology Grew 2% and 16% in Q4
FY 2022/23 PULMONOLOGY GREW 2% AND 16% IN Q4 DRIVEN BY HIGHER PROCEDURE VOLUME AND STRENGTHENED PULMONOLOGY PORTFOLIO REPORTED REVENUE (DKKm) Pulmonology Organic 4-year CAGR 2022/23 HIGHLIGHTS Illustrative est. Covid effect 12.6% • FY organic growth of 2% was impacted by post Covid 16% organic growt
Slide 10: Anaesthesia & Patient Monitoring Declined 1%
FY 2022/23 ANAESTHESIA & PATIENT MONITORING DECLINED 1% AND GREW 2% IN Q4 MAINLY RELATED TO LAST YEAR’S HIGH COMPARABLES REPORTED REVENUE (DKKm) Anaesthesia 2% organic growth 2022/23 HIGHLIGHTS Patient Monitoring (Q4 21/22 vs. Q4 22/23) Organic growth • Anaesthesia and Patient Monitoring posted orga
Slide 11: Portfolio Boosted with New Products and Strong Pipeline
PORTFOLIO BOOSTED WITH NEW PRODUCTS, AND A STRONG PIPELINE TO SUPPORT FUTURE GROWTH Ear, nose and throat (ENT) Ambu® aScopeTM 4 RhinoLaryngo Next generation ENT Pulmonology Ambu® VivaSightTM 2 SLT/DLT Ambu® aScopeTM 4 Broncho Ambu® aScopeTM 5 Broncho HD (all sizes) Ambu® aScopeTM Video Laryngoscope
Slide 12: Gastroenterology: Approval of Two New Solutions
GASTROENTEROLOGY (GI): SIGNIFICANT ADVANCEMENT WITH APPROVAL OF TWO NEW SOLUTIONS, BUILDING LONG-TERM FOUNDATION FOR GROWTH With FDA approval of aScope™ Colon and CE mark for aScope™ We are advancing single-use Gastro Large in EU, we continue our focus on high-need, niche endoscopy in GI, building t
Slide 13: Integrating Bioplastics Across Full Portfolio of Endoscopes
INTEGRATING BIOPLASTICS ACROSS FULL PORTFOLIO OF ENDOSCOPES WORLD’S FIRST BIO-ATTRIBUTED PLASTIC HANDLE aScope™ Gastro Large sets new standards for single-use sustainability GAINING COMPETITIVE BIOPLASTIC IN ALL ENDOSCOPES ADVANTAGE by 2024/25, marking an important step in transforming the industry
Slide 14: Solid Progress on Sustainability Agenda
TAKING LEAPS TOWARDS A SUSTAINABLE FUTURE – SOLID PROGRESS ON SUSTAINABILITY AGENDA IN FY 2022/23 FY 2022/23 ACCOMPLISHMENTS TOWARDS RESPONSIBLE OERATIONS CIRCULAR PRODUCTS AND PACKAGING Science-based targets initiative (SBTi) Bioplastic in all endoscopes by start of 2025 ✓ Submitted near-team targe
Slide 15: Thomas Frederik Schmidt, CFO
THOMAS FREDERIK SCHMIDT CFO 14
Slide 16: FY 2022/23 Reported Revenue Growth of 7.4%
FY 2022/23 REPORTED REVENUE GROWTH OF 7.4%, DRIVEN BY ORGANIC GROWTH OF 7.6%, OFFSET BY CURRENCY EFFECT OF -0.2%-POINTS REPORTED GROUP REVENUE (DKKm) +7.4% 4,775 -7 Reported revenue increased by DKK 331m in 22/23, or 7.4%, compared to last year 338 Foreign exchange rates had 4,444 a negative impact
Slide 17: Growth Driven by North America
FY 2022/23 GROWTH DRIVEN BY NORTH AMERICA WITH CONTINUED MOMENTUM IN ENDOSCOPY SOLUTIONS REVENUE BY GEOGRAPHY FY 2022/23 reported revenue (DKKm) North America FY 2022/23 Q4 FY 2022/23 organic growth of 12%, driven by Endoscopy Solutions growing Organic growth Organic growth 23% due to strong growth
Slide 18: FY 2022/23 Reported EBIT Margin b.s.i. of 6.3%
FY 2022/23 REPORTED EBIT MARGIN B.S.I. OF 6.3% (2021/22: 2.7%) DRIVEN BY OPEX IMPROVEMENTS EBIT MARGIN BEFORE SPECIAL ITEMS (%) 6.3% FY 2022/23 HIGHLIGHTS • Operating profit (EBIT) before special items was DKK 302m (DKK 122m), corresponding to an EBIT margin before special items of 6.3% (2.7%) 4.3%
Slide 19: Gross Margin 56.8%
FY 2022/23 GROSS MARGIN WAS 56.8% (2021/22: 57.5%) AND 56.8% IN Q4 POSITIVE IMPACTED BY STRENGTHENED PRODUCT MIX, HOWEVER, MORE THAN OFFSET BY HIGHER INPUT PRICES GROSS PROFIT (DKKm and % of revenue) Gross margin Gross profit Gross profit in FY 2022/23 62.4% totalled DKK 2,713, repre- senting an inc
Slide 20: OPEX Ratio Improved to 50%
FY 2022/23 OPEX RATIO IMPROVED TO 50% (2021/22: 55%) AND 49% IN Q4 DUE TO LOWER SELLING COSTS, IN ALIGNMENT WITH THE ZOOM IN STRATEGY’S OBJECTIVE OF MORE PROFITABLE GROWTH OPEX (DKKm and % of revenue) OPEX to revenue OPEX 55% OPEX in 2022/23 totalled 54% DKK 2,411m, representing a decrease of 1% com
Slide 21: Cash Flow Improvement Has Accelerated
FY 2022/23 CASH FLOW IMPROVEMENT HAS ACCELERATED, DUE TO SUCCESSFUL IMPLEMENTATION OF FINANCIAL INITIATIVES … FREE CASH FLOW (DKKm and % of revenue) FCF to Sales Free cash flow before acquisitions Free cash flow before 15% acq. totalled DKK 192m in 13% 2022/23, with FCF to 188 157 sales of 4% 21 -4%
Slide 22: Net Working Capital Lowered to 20% of Revenue
… WITH NET WORKING CAPITAL LOWERED TO 20% OF REVENUE AND INVENTORY LEVEL BELOW DKK 1BN NWC, % of 12 months’ revenue 25% 24% 23% 23% 2022/23 cash flow before acq. of DKK 192m 21% 20% was driven by lower CAPEX investments, improved EBITDA 996 1.022 1.144 1.108 987 and decreasing NWC to 20% of revenue
Slide 23: Britt Meelby Jensen, CEO
BRITT MEELBY JENSEN CEO 22
Slide 24: FY 2023/24 Financial Guidance
FY 2023/24 FINANCIAL GUIDANCE 2023/24 outlook 2022/23 actuals Comments on 2023/24 outlook Growth will be driven by Endoscopy ORGANIC solutions expected to grow ~15% REVENUE 7-10% 7.6% GROWTH Outlook includes 1.0-1.5% negative revenue impact due to strategic initiatives* EBIT Profitability will be dr
Slide 25: Equity Story
EQUITY STORY Attractive Leading Scalable Transforming single-use product business for growth endoscopy portfolio model market Fast growing Impactful High innovation Long-term profitable market single-use benefits know-how growth targets • Organic revenue growth: 5-year CAGR (2022/23 – Unmet customer
Slide 26: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION 8 NOVEMBER: FY 2022/23 earnings • 9 NOVEMBER: Copenhagen roadshow • 14 NOVEMBER : Jefferies Healthcare conference in London • 16 NOVEMBER: Paris roadshow • 21 NOVEMBER : SEB Healthcare seminar in Stockholm • 30 NOVEMBER : Danske Bank Winter seminar in Copenhagen • 5 DECE
Slide 27: Ambu Forever Forward
Ambu FOREVER FORWARD
Slide 28: Appendix
Appendix 26
Slide 29: Ambu at a Glance
AMBU AT A GLANCE Endoscopy Solutions Anaesthesia & Patient Monitoring Revenue 44% DKK 2,088m DKK 4,775m FY22/23 56% DKK 2,687m reported revenue 2022/23 % 11% Single-use endoscopy solutions for Full portfolio for airway management 5-year organic revenue CAGR Offering procedures across all major as we
Slide 30: Strong Historic Growth with Endoscopy Solutions Tripling
STRONG HISTORIC GROWTH WITH ENDOSCOPY SOLUTIONS TRIPLING SINCE 2017/18, ACCELERATED BY COVID-19 REPORTED REVENUE DEVELOPMENT (DKKm) 7-10%1 DEVELOPMENT 4,775 in last 5 years 4,444 4,013 3,567 2.687 11% 2.324 Organic CAGR 2,786 2.168 2,606 1.711 836 941 13% Reported CAGR 1.845 1.856 1.845 2.120 2.088
Slide 31: Our Global Presence
OUR GLOBAL PRESENCE Headquarters Ballerup, Denmark Noblesville, Xiamen, USA Augsburg, China Germany Juárez, Mexico Penang, Malaysia R&D centres Direct markets Factories Distributor markets* * The distributor markets highlighted do not include the 40 markets that Ambu is currently exiting 29
Slide 32: Hospital Journey – Reusable Endoscopy
HOSPITAL JOURNEY – REUSABLE ENDOSCOPY 30
Slide 33: Hospital Journey – Single-Use Endoscopy
HOSPITAL JOURNEY – SINGLE-USE ENDOSCOPY 31
Slide 34: Attractive Market Dynamics Support Single-Use Endoscopy Expansion
ATTRACTIVE MARKET DYNAMICS SUPPORTS LONG-TERM EXPANSION OF THE SINGLE-USE ENDOSCOPY MARKET Amount of endoscopy procedures … with single-use endoscopy offering significant benefits over expected to keep growing… current reusable model Patient volume growth as population above 60 years will double tow
Slide 35: True Customer Needs: Workflow and Availability
TRUE CUSTOMER NEEDS: WORKFLOW AND AVAILABILITY ARE MAIN DRIVERS BEHIND SINGLE-USE ADOPTION WORKFLOW AVAILABILITY ECONOMICS PATIENT SAFETY Reduce workload and increase Provide access to endoscopy Avoid costly repairs and Prevent patient throughput and eliminate waiting times servicing fees cross-cont
Slide 36: Well-Positioned to Capitalize on Single-Use Growth Opportunities
AMBU IS WELL-POSITIONED TO CAPITALIZE ON GROWTH OPPORTUNITIES WITHIN SINGLE-USE ENDOSCOPY Deep customer Direct commercial relationships and infrastructure in understanding major geographies Comprehensive Trusted provider of portfolio built over high-quality the past years solutions Innovation and Cl
Slide 37: Global Leadership Position in Single-Use Endoscopy
GLOBAL LEADERSHIP POSITION IN SINGLE-USE ENDOSCOPY WITH CONTINUOUS EXPANSION INTO NEW SEGMENTS PULMONOLOGY Revenue (DKKm) CAGR PULMONOLOGY • Mass-adoption of single-use bronchoscopy with +12%2 aScopeTM 4 Broncho (accelerated by Covid-19) 1.713 • aScopeTM 5 Broncho in the bronchoscopy suite 1.551 1.4
Slide 38: More of the 100M Procedures Will Open Up for Single-Use
MORE OF THE 100M PROCEDURES WILL OPEN UP FOR SINGLE-USE, AS IMPROVED ENDOSCOPY SOLUTIONS EXPAND THE TARGET MARKET ~100 MIO ENDOSCOPY PROCEDURES IN AMBU PRIORITY MARKETS1 1.9m 16m 23m ~100m Ambu Target markets, Target markets, Total priority sales current products 1 near-term pipeline 1 endoscopy vol
Slide 39: Single-Use Endoscopy Market Value Expected to Reach 15-20 BN DKK
SINGLE-USE ENDOSCOPY MARKET VALUE EXPECTED TO REACH 15-20 BN DKK IN 5 YEARS AMBU TARGET MARKET WITH MARKET POTENTIAL AT 100% PENETRATION ASSUMED 5-YEAR NEAR-TERM PIPELINE WITH NEAR-TERM PIPELINE SINGLE-USE m. procedures DKK bn using blended ASPs PENETRATION PULMONOLOGY 4.1 PULMONOLOGY ~8 URO- CYSTOS
Slide 40: Single-Use Endoscopy Market Value Expected to Grow Rapidly
SINGLE-USE ENDOSCOPY MARKET VALUE EXPECTED TO GROW RAPIDLY, FROM ~5 BN DKK TODAY TO REACH 15-20 BN DKK IN 5 YEARS ~5 bn 15-20 bn 45 bn 170 bn DKK DKK DKK DKK SINGLE-USE ENDOSCOPY EXPECTED SINGLE-USE MARKET POTENTIAL MARKET POTENTIAL MARKET TODAY ENDOSCOPY MARKET IN ASSUMING 100% SINGLE- ASSUMING 100
Slide 41: ZOOM IN Strategy: Most Customer Centric in Our Field
WITH THE ZOOM IN STRATEGY, OUR ASPIRATION IS TO BE THE MOST CUSTOMER CENTRIC IN OUR FIELD Provide innovative Excel in execution solutions for true across the value chain customer needs • Drive commercial best practices and focus on the highest-value- • Launch market-leading creation areas solutions
Slide 42: Transformation Program Journey
TRANSFORMATION PROGRAM WILL BE A JOURNEY TO BUILD THE FOUNDATION FOR THE FUTURE PHASE 1 PHASE 2 PHASE 3 H1 2023 H2 2023 2024-2026 PROGRAM SCOPING EXECUTE BUILD FOUNDATION + Select priority projects QUICK WINS FOR THE FUTURE • Define and scope projects • Execute quick wins to fund • Embark on longer-
Slide 43: Towards a Circular Business Model
TOWARDS A CICULAR BUSINESS MODEL DEVELOPMENT & DESIGN Integration of sustainability in R&D processes, as well as design and materials choices. In-house- and customer testing are important steps for developing new solutions. TOWARDS CIRCULARITY RAW MATERIALS Pilot projects and partnerships for take-b
Slide 44: Flexible Approach Allocating Resources to Highest Potential
A FLEXIBLE APPROACH ALLOCATING RESOURCES TO THE HIGHEST POTENTIAL OPPORTUNITIES SPEED OF UPTAKE WILL VARY ACROSS A FLEXIBLE BUSINESS MODEL WITH SEGMENTS ALLOCATION OF RESOURCES TO THE HIGHEST POTENTIAL OPPORTUNITIES Customer willingness to adopt Customer driven product & single-use differs technolog
Slide 45: 5-Year Financial Targets
5-YEAR (2022/23 – 2027/28) FINANCIAL TARGETS Aiming for > 10% CAGR organic growth and ~20% EBIT margin FY 22/23 5-year CAGR actuals targets1 Growth will mainly be driven by high Organic revenue Growth 7.6% > 10% CAGR growth within Endoscopy Solutions with high expected revenue contribution from all
Slide 46: P&L Details
P&L DETAILS DKKm FY FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY reported figures 18/19 19/20 20/21 21/22 21/22 21/22 21/22 21/22 22/23 22/23 22/23 22/23 22/23 Revenue 2,820 3,567 4,013 1,031 1,122 1,128 1,163 4,444 1,132 1,189 1,195 1,259 4,775 Gross profit 1,637 2,212 2,503 634 647 629 644 2,554 662 664 67