Ambu A/s Class B · OMXCOP:AMBU_B
Ambu A/s Class B — Ambu A S Ord — Q3 2024 Earnings Presentation
47 slides from Ambu A/s Class B's earnings presentation, Aug 30, 2024
Slide 1: Q3 2023/24 Results
Q3 2023/24 RESULTS Investor presentation
Slide 2: 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 3: Table of Contents
TABLE OF CONTENTS 1 Q3 2023/24 RESULTS • Business update • Financial update 2 Q&A SESSION Today’s speakers BRITT MEELBY HENRIK SKAK JENSEN BENDER CEO CFO 3
Slide 4: Q3 2023/24 results represent a continued strong momentum
Q3 2023/24 RESULTS REPRESENT A CONTINUED STRONG MOMENTUM Total organic Endoscopy organic EBIT margin Free revenue growth revenue growth before special items cash flow 15.0% 18.0% 12.9% 163 DKKm Q3 2022/23: 8.1% Q3 2022/23: 23.3% Q3 2022/23: 7.6% Q3 2022/23: 157 DKKm 4
Slide 5: Continued solid strategy execution in Q3 2023/24
CONTINUED SOLID STRATEGY EXECUTION IN Q3 2023/24 PROVIDE INNOVATIVE SOLUTIONS FOR EXCEL IN EXECUTION TRUE CUSTOMERS NEEDS ACROSS THE VALUE CHAIN • North American regulatory clearance (FDA) of aScope™ 5 • Solid improvement in profitability, to 12.9% in Q3 from 7.6% last Uretero with aView 2 Advance a
Slide 6: Endoscopy Solutions is the main growth contributor
ENDOSCOPY SOLUTIONS IS THE MAIN GROWTH CONTRIBUTOR, WITH CONTINUOUSLY GROWING SHARE OF TOTAL REVENUE Q3 2023/24 Revenue development (DKKm) Revenue split across business areas Organic revenue change FX impact Anaesthesia & Patient Monitoring +15.0%1 Endoscopy Solutions 1,383 +18.0%1 43% 41% +2%- +10.
Slide 7: Anaesthesia & Patient Monitoring grew 10.9% in Q3
ANAESTHESIA & PATIENT MONITORING GREW 10.9% IN Q3 2023/24 AND 6.4% IN 9M – STILL POSITIVELY IMPACTED BY PRICE INITIATIVES Anaesthesia & Patient Monitoring (Reported revenue, DKKm) KEY HIGHLIGHTS • Solid 10.9% year-on-year performance in Q3 +6.4%1 2023/24, driven by price increases, normalised post-
Slide 8: Endoscopy Solutions grew 18.0% in Q3 2023/24
ENDOSCOPY SOLUTIONS GREW 18.0% IN Q3 2023/24 AND 21.6% IN 9M – DRIVEN BY GROWTH ACROSS ALL ENDOSCOPY SEGMENTS Endoscopy Solutions (Reported revenue, DKKm) KEY HIGHLIGHTS • Satisfactory growth in Endoscopy Solutions, above market growth was mainly driven by Ambu’s established +21.6%1 solutions in the
Slide 9: Pulmonology grew 9.9% in Q3 2023/24
PULMONOLOGY GREW 9.9% IN Q3 2023/24 AND 13.9% IN 9M Pulmonology (Reported revenue, DKKm) KEY HIGHLIGHTS • Main growth driver was the aScope™ 5 Broncho HD solution that continues to progress gradually in +13.9%1 combination with the existing aScope ™ 4 Broncho solution. 1,235 1,097 • While pulmonolog
Slide 10: Endoscopy Solutions excl. pulmonology grew 27.6%
ENDOSCOPY SOLUTIONS EXCL. PULMO- NOLOGY GREW 27.6% IN Q3 2023/24 AND 31.5% IN 9M Endoscopy Solutions excl. pulmonology (Reported revenue, DKKm) KEY HIGHLIGHTS • Ear-nose-throat (ENT) continued solid double-digit organic growth trajectory, due to an increased pace +31.5%1 of order uptakes and penetra
Slide 11: Status on new products: ureteroscopy and duodenoscopy
STATUS ON NEW PRODUCTS | URETEROSCOPY AND DUODENOSCOPY SOLUTIONS RECENTLY APPROVED WITH CONTROLLED MARKET RELEASE ONGOING aScope 5 Uretero solution aScope Duodeno 2 solution aView 2 Advance aBox 2 aBox 2 CE mark: Status: FDA approval: Status: 29 November 2023 19 April 2024 Numerous procedures succes
Slide 12: Previous R&D investments secured a leading product portfolio
PREVIOUS R&D INVESTMENTS HAVE SECURED A LEADING AND GROWING PRODUCT PORTFOLIO … Marketed solutions Newly approved solutions Solutions in development Ear, nose and throat (ENT) Ambu® aScopeTM 4 RhinoLaryngo Next generation ENT Pulmonology Ambu® VivaSightTM 2 SLT/DLT Ambu® aScopeTM 4 Broncho Ambu® aSc
Slide 13: Future R&D investments will be solution-focused
… FUTURE R&D INVESTMENTS WILL BE SOLUTION-FOCUSED, ADDING MORE SOFTWARE TO THE PRODUCTS Marketed solutions Newly approved solutions Solutions in development Endoscopy system contributes to Ambu being North America only solutions provider, and innovation includes: Europe only Endoscopy system compati
Slide 14: Henrik Skak Bender, CFO
HENRIK SKAK BENDER CFO 14
Slide 15: Reported revenue growth of 15.7% in Q3 2023/24
REPORTED REVENUE GROWTH OF 15.7% IN Q3 2023/24, WITH LIMITED CURRENCY IMPACT OF 0.7%-PTS REPORTED GROUP REVENUE (DKKm) KEY HIGHLIGHTS +15.7% • Reported revenue growth of 15.7% in Q3 1,383 2023/24, driven by solid organic of 15.0%. 0.7% • The currency effect of 0.7%-points was mainly due to USD/DKK d
Slide 16: Strong 9 months growth momentum
STRONG 9 MONTHS GROWTH MOMENTUM, WITH SOME TAILWIND FROM ONE-OFFS 9M 2023/24 Revenue development (DKKm) Organic revenue change FX impact Tailwinds impacted performance in 2023/24 positively, due to +14.9%1 1. Pulmonology had lower comparables in 4,004 the first half-year, which were low last year as
Slide 17: EBIT margin increased to 12.9% in Q3 2023/24
EBIT MARGIN INCREASED TO 12.9% IN Q3 2023/24, DRIVEN BY BOTH GROSS MARGIN AND BY SCALE IN OPEX EBIT MARGIN1 (%) +5.3%-pts EBIT margin1 (%) 12.9% 1.3% 4.0% 14.2% 7.6% 12.9% 10.0% 7.6% 7.7% EBIT margin Q3 22/23 Δ Gross Δ OPEX EBIT margin Q3 Q4 Q1 Q2 Q3 margin to Revenue Q3 23/24 22/23 22/23 23/24 23/2
Slide 18: Solid gross margin of 60.2% in Q3 2023/24
SOLID GROSS MARGIN OF 60.2% IN Q3 2023/24, DRIVEN BY PRODUCT MIX, PRICING AND SCALE IN PRODUCTION Gross margin (%) +4.0%-pts KEY HIGHLIGHTS 60.2% 59.5% 58.9% • Gross profit in Q3 2023/24 was up 23.8% 56.8% 56.2% to DKK 832m, and the gross margin increased by 4.0 %-points to 60.2%. Q3 Q4 Q1 Q2 Q3 22/
Slide 19: OPEX to revenue down year-over-year
OPEX TO REVENUE DOWN YEAR- OVER-YEAR, IN ALIGNMENT WITH THE ZOOM IN STRATEGY OPEX to revenue (%) KEY HIGHLIGHTS -1.3%-pts • OPEX of DKK 654m in Q3 2023/24, up 12.6% 48.6% 49.1% 48.9% 47.3% y-o-y, mainly driven by increased investments 45.3% in Ambu’s sales force and project cost under management and
Slide 20: Strong cash flow improvement has continued
STRONG CASH FLOW IMPROVEMENT HAS CONTINUED, PRIMARILY DUE TO IMPROVED PROFITABILITY Q3 2023/24 FREE CASH FLOW – MAIN COMPONENTS (DKK) FREE CASH FLOW, % OF REVENUE 267 -2 15% 13% -72 11% 12% 188 9% -30 163 157 163 135 128 Q3 Q4 Q1 Q2 Q3 22/23 22/23 23/24 23/24 23/24 EBITDA Change in CAPEX1 Other2 Fre
Slide 21: Lower net working capital ratio and CAPEX level
LOWER NET WORKING CAPITAL RATIO AND CAPEX LEVEL, COMBINED WITH NWC, % OF 12 MONTHS’ REVENUE HIGHER EBITDA MARGIN, SUPPORT THE POSITIVE CASH FLOW 21% 20% 20% 19% 19% KEY HIGHLIGHTS 987 939 932 1,011 1,025 Q3 22/23 Q4 22/23 Q1 23/24 Q2 23/24 Q3 23/24 • Inventories were end-Q3 up 10% from FY 2022/23 an
Slide 22: Transformation program is a journey to build the foundation
TRANSFORMATION PROGRAM IS A JOURNEY TO BUILD THE FOUNDATION FOR THE FUTURE PHASE 1 PHASE 2 PHASE 3 H1 2023 H2 2023 – summer 2024 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
Slide 23: OPEX leverage main driver for EBIT margin expansion
OPEX LEVERAGE HAS BEEN THE MAIN DRIVER FOR EBIT MARGIN EXPANSION IN THE PAST 9 MONTHS AND WILL CONTINUE TO BE IN FURTHER MARGIN EXPANSION Drivers for margin expansion the last 9 months 12.4% • Pricing initiatives in A&PM Gross • Favourable product mix with higher share margin of Endoscopy Solutions
Slide 24: Transformation program: Phase 3 projects and investments
TRANSFORMATION PROGRAM IS A JOURNEY TO BUILD THE FOUNDATION FOR THE FUTURE PHASE 3 2024 - 2026 Selected examples of projects and investments BUILD FOUNDATION • Investments in a stronger and larger commercial FOR THE FUTURE setup to drive organic growth across our segments • Continue to invest in opt
Slide 25: Organic growth main focus, M&A can accelerate strategy
ORGANIC GROWTH REMAINS OUR MAIN STRATEGIC FOCUS, BUT M&A HAS POTENTIAL TO SUPPORT AND ACCELERATE STRATEGY IMPLEMENTATION Stronger financial situation opens for M&A opportunities 1 2 Solid financial position driven by solid earnings and cash flow, combined with limited net interest bearing debt Organ
Slide 26: Financial guidance upgrade for 2023/24 maintained
THE FINANCIAL GUIDANCE UPGRADE ON JULY 10 FOR THE FULL-YEAR 2023/24 IS MAINTAINED 2023/24 outlook 2022/23 actuals Comments on 2023/24 outlook Growth will be driven by Endoscopy Solutions, ORGANIC which is expected to grow +18% in 2023/24 REVENUE 12-14% 7.6% GROWTH Outlook includes 1.0-1.5% negative
Slide 27: Thank you for your attention
THANK YOU FOR YOUR ATTENTION INVESTOR RELATIONS CONTACT Anders Hjort Head of Investor Relations anhj@ambu.com | +45 7225 2910 Frederik Futtrup Associate, Investor Relations frfu@ambu.com | +45 6070 9526 Confidential
Slide 28: Appendix
Appendix 28
Slide 29: 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 30: 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 30
Slide 31: Attractive growth journey with Endoscopy Solutions as growth engine
AN ATTRACTIVE GROWTH JOURNEY WITH ENDOSCOPY SOLUTIONS AS THE GROWTH ENGINE Endoscopy Solutions has more than tripled in the past 5 years with CAGR of 26% A&PM has annually grown by ~3%, resulting in overall CAGR of 13% DKKm Endoscopy Solutions Endoscopy Anaesthesia & Patient Solutions Monitoring (A&
Slide 32: First-mover in single-use endoscopy
BEING FIRST-MOVER IN SINGLE-USE ENDOSCOPY, AMBU HAS BUILT A STRONG PRESENCE ACROSS MULTIPLE ENDOSCOPY AREAS Endoscopy Solutions Pulmonology (DKKm) ENDOSCOPY SOLUTIONS PULMONOLOGY Illustrative est. Covid effect • First launch in 2009 of aScopeTM 1 Broncho • Mass-adoption of single-use bronchoscopy wi
Slide 33: Single-use endoscopy market attractive and fast growing
SINGLE-USE ENDOSCOPY MARKET IS ATTRACTIVE AND FAST GROWING WITH ~100M PROCEDURES ANNUALLY In Ambu’s focus market, the annual endoscopy procedures performed are ~100m1 5.0m 11.5m 17.0m 68.5m ~100m Addressable market with current portfolio2 4.1m 1.0m Ambu’ sales volume Uretero in 2022/23 6.0m Cysto 6.
Slide 34: Single-use endoscopy addresses efficiency and quality of care needs
SINGLE-USE ENDOSCOPY ADDRESSES EFFICIENCY AND QUALITY OF CARE NEEDS IN HEALTH SYSTEMS FACED BY STAFF SHORTAGES AND CAPACITY CONSTRAINTS Evolving healthcare developments Single-use endoscopy reduces complexity and improves efficiency vs provide growth opportunities for Ambu reusable endoscopy in heal
Slide 35: Large growth opportunities through efficiency, patient outcomes, lower costs
LARGE GROWTH OPPORTUNITIES THROUGH IMPROVEMENT OF EFFICIENCY, BETTER PATIENT OUTCOMES AND LOWERING COSTS IN A SUSTAINABLE WAY Examples of benefits from using single use endoscopes vs reusable across therapeutic areas WORKFLOW ECONOMICS PATIENT SAFETY SUSTAINABILITY Reduce workload and Avoid repairs
Slide 36: Strong track record and well-positioned to win
AMBU HAS A STRONG AND PROVEN TRACK RECORD AND IS WELL-POSITIONED TO WIN IN THE SINGLE-USE ENDOSCOPY MARKET Leading and Technology comprehensive advancements Sustainability solution on endoscopy dedication pipeline systems 36
Slide 37: Substantial R&D investments secured a leading portfolio
SUBSTANTIAL R&D INVESTMENTS HAVE SECURED A LEADING AND GROWING PORTFOLIO OF SOLUTIONS TO DRIVE LONG-TERM GROWTH Marketed solutions Newly approved solutions Solutions in development Ear, nose and throat (ENT) Ambu® aScopeTM 4 RhinoLaryngo Next generation ENT Pulmonology Ambu® VivaSightTM 2 SLT/DLT Am
Slide 38: Future R&D investment will be solution-focused
FUTURE R&D INVESTMENT WILL BE SOLUTION-FOCUSED, ADDING MORE SOFTWARE AND SECURING RIGHT INTEGRATION Marketed solutions Newly approved solutions Solutions in development 1 North America only Interconnected set-up now available Endoscopy system compatibility across therapy areas Not exhaustive list of
Slide 39: Technology advancements, modularity and partnerships
TECHNOLOGY ADVANCEMENTS AND STRONG SET-UP WITH MODULARITY AND STRATEGIC PARTNERSHIPS ARE KEY STRONGHOLDS Icon Best-in-class single-use endoscopy development with 15 years PROPRIETARY of experience in innovation and manufacturing TECHNOLOGY Icon Proprietary technology development within imaging, mano
Slide 40: Anaesthesia & Patient Monitoring
ANAESTHESIA & PATIENT MONITORING STABLE PROFITABLE GROWTH ANAESTHESIA Strong market position in steadily growing segments Focus on optimisation of % profitability PATIENT MONITORING Selective and focused innovation 40
Slide 41: Key products across Anaesthesia and Patient Monitoring
KEY PRODUCTS ACROSS ANAESTHESIA AND PATIENT MONITORING ANAESTHESIA PATIENT MONITORING Needle electrodes used to measure electrical signals from the muscles in Used for oxygenating and ventilating patients in combination electromyography (EMG) and nerve conduction studies. Inoject needle used Face Ma
Slide 42: 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 43: Ambu well-positioned to capitalize on single-use endoscopy growth
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 44: Transformation program: foundation for the future
TRANSFORMATION PROGRAM WILL BE A JOURNEY TO BUILD THE FOUNDATION FOR THE FUTURE PHASE 1 PHASE 2 PHASE 3 H1 2023 H2 2023 – summer 2024 2024-2026 PROGRAM SCOPING EXECUTE BUILD FOUNDATION + Select priority projects QUICK WINS FOR THE FUTURE • Define and scope projects • Execute quick wins to fund • Emb
Slide 45: Targets: >10% organic CAGR and ~20% EBIT margin
AMBU AIMS TO DELIVER >10% ORGANIC ANNUAL REVENUE GROWTH (CAGR) AND IMPROVE EBIT MARGIN TO ~20% OVER THE NEXT FIVE YEARS FY 22/23 FY 23/24 5-year CAGR targets (22/23 – 27/28) Actuals Outlook Comments Outlook Comments Includes 1.0-1.5% negative revenue Organic revenue Growth 7.6% 12-14% > 10% CAGR imp
Slide 46: P&L details
P&L DETAILS DKKm FY 18/19 FY 19/20 FY 20/21 FY 21/22 Q1 22/23 Q2 22/23 Q3 22/23 Q4 22/23 FY 22/23 Q1 22/23 Q2 22/23 Q3 23/24 reported figures Revenue 2,820 3,567 4,013 4,444 1,132 1,189 1,195 1,259 4,775 1,254 1,367 1,383 Gross profit 1,637 2,212 2,503 2,554 662 664 672 715 2,713 739 813 832 Gross m
Slide 47: Confidential
Ambu FOREVER FORWARD