Ambu A/s Class B · OMXCOP:AMBU_B
Ambu A/s Class B — Ambu A S Ord — Q4 2024 Earnings Presentation
45 slides from Ambu A/s Class B's earnings presentation, Nov 5, 2024
Slide 1: Annual Results 2023/2024
ANNUAL RESULTS 2023/2024 Ambu
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 Q4 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: Q4 2023/24 Results
Q4 2023/24 RESULTS 14.5% Endoscopy Total organic EBIT margin FY 2023/24: revenue revenue growth before special items 19.7% growth 10.6% 10.6% 5.3% A & PM FY 2023/24: revenue 6.1% growth _______________________ _______________________ 98m FY 2023/24: 13.8% FY 2023/24: 12.0% Free cash FY 2023/24: flow
Slide 5: Continued progress on strategy update in Q4
CONTINUED PROGRESS ON STRATEGY UPDATE IN Q4 Solutions for customer needs ̶ Strengthened urology offering with FDA clearance of aScope 5 Cysto HD ̶ Commercial launch of aScope 5 Uretero. Execution excellence – Solid improvement in profitability, to 10.6% in Q4 from 7.7% last year resulting in a full-
Slide 6: Total revenue grew 10.6% in Q4
Total revenue TOTAL REVENUE GREW 10.6% IN Q4 in Q4 KEY HIGHLIGHTS IN Q4 Endoscopy 40.7% 59.3% • Total revenue grew 10.6%, driven by Endoscopy Solutions growing at 14.5% and continued momentum in Anaesthesia & Patient Monitoring A & PM growing at 5.3% • Underlying market growth remained sound and sta
Slide 7: Anaesthesia & Patient Monitoring grew 5.3% in Q4
Total revenue ANAESTHESIA & PATIENT MONITORING in Q4 (A&PM) GREW 5.3% IN Q4 40.7% KEY HIGHLIGHTS IN Q4 • A&PM grew 5.3%, primarily driven by announced A & PM price increases • In general, the price increases are being implemented gradually, and they are based on Reported revenue last 12 months (DKKm
Slide 8: Endoscopy Solutions grew 14.5% in Q4
Total revenue ENDOSCOPY SOLUTIONS GREW in Q4 14.5% IN Q4 KEY HIGHLIGHTS IN Q4 Endoscopy 59.3% • Satisfactory growth in Endoscopy Solutions, above market growth, mainly driven by Ambu’s established solutions in the growing single-use market. • Pulmonology was mainly driven by aScopeTM 5 Broncho HD. R
Slide 9: Pulmonology grew 5.7% in Q4
Total revenue PULMONOLOGY GREW 5.7% IN Q4 in Q4 KEY HIGHLIGHTS • Pulmonology posted 5.7% organic revenue growth, 29.6% bringing full-year growth to 11.7%. While the Pulmonology underlying growth remained solid, the growth in the fourth quarter was impacted by extraordinary high year-end orders in Q4
Slide 10: Comprehensive pulmonology portfolio, strengthened by upcoming videolaryngoscope launch
COMPREHENSIVE PULMONOLOGY PORTFOLIO, STRENGTHENED BY UPCOMING VIDEOLARYNGOSCOPE LAUNCH, WILL DRIVE FUTURE GROWTH Pulmonology platform supports pulmonologists, intensivists and anaesthesiologists with their wide range of needs Intensive care patients: Good image quality, adequate suctioning, ICU mano
Slide 11: Urology, ENT and GI, combined, grew 24.8%
Total revenue UROLOGY, ENT AND GI, COMBINED, in Q4 GREW 24.8% Urology, ENT and GI 29.7% KEY HIGHLIGHTS • Ear-nose-throat (ENT) continued solid double-digit organic growth trajectory, due to an increased pace of order uptakes and penetration of new customers. Reported revenue last 12 months (DKKm) •
Slide 12: Expanding urology portfolio
EXPANDING UROLOGY PORTFOLIO KEY HIGHLIGHTS • FDA approval of aScopeTM 5 Cysto HD. • Urology portfolio now features three single-use endoscopes, fully integrated with Ambu’s portfolio of endoscopy aBoxTM 2 systems. aViewTM 2 • Provides urologists and their staff an Advance extensive portfolio of adva
Slide 13: Strong gastroenterology portfolio to deliver mid- and long-term growth
STRONG GASTROENTEROLOGY PORTFOLIO TO DELIVER MID- AND LONG-TERM GROWTH Expanded GI portfolio with recent regulatory approvals; continuing to leverage the technology platform to deliver quality products Clinical Selected In market evaluation testing aScope aScope aBox 2 aScope aScope Gastro Gastro L
Slide 14: Henrik Skak Bender, CFO
HENRIK SKAK BENDER CFO 14
Slide 15: Organic revenue growth of 10.6% in Q4 2023/24
ORGANIC REVENUE GROWTH OF 10.6% IN Q4 2023/24 KEY HIGHLIGHTS REPORTED GROUP REVENUE (DKKm) • Reported revenue growth of 10.2% in Q4 2023/24, driven by solid organic of 10.6%. +10.2% 1,387 • The currency effect of 0.4%-points was -0.4% mainly due to USD/DKK development. • All three geographical regio
Slide 16: EBIT margin of 10.6% in Q4 2023/24
EBIT MARGIN OF 10.6% IN Q4 2023/24, DRIVEN BY BOTH GROSS MARGIN AND BY SCALE IN OPEX EBIT MARGIN b.s.i. +2.9%-pts EBIT margin 10.6% b.s.i. 0.8% 14.2% 2.1% 12.9% 7.7% 10.6% 10.0% 7.7% EBIT margin Q4 22/23 Δ Gross Δ OPEX EBIT margin Q4 Q1 Q2 Q3 Q4 margin to Revenue Q4 23/24 22/23 23/24 23/24 23/24 23/
Slide 17: Solid gross margin of 58.9% in Q4 2023/24
SOLID GROSS MARGIN OF 58.9% IN Q4 2023/24 UP FROM 56.8% LAST YEAR Gross margin (%) KEY HIGHLIGHTS +2.1%-pts 60.2% 59.5% • Gross margin in Q4 2023/24 was 58.9%, 58.9% 58.9% corresponding to an increase of 2.1%-pts, 56.8% compared to Q4 2022/23. Q4 Q1 Q2 Q3 Q4 • Increase in gross margin was driven by:
Slide 18: OPEX ratio decreased year-over-year
OPEX RATIO DECREASED YEAR-OVER- YEAR, IN ALIGNMENT WITH THE ZOOM IN STRATEGY OPEX to ratio (OPEX to revenue %) KEY HIGHLIGHTS -0.8%-pts 49.1% 48.9% 48.3% 47.3% • OPEX ratio in Q4 2023/24 was 48.3%, 45.3% corresponding to a decrease of 0.8%-pts, compared to Q4 2022/23. Q4 Q1 Q2 Q3 Q4 • The decrease w
Slide 19: Continued solid cash flow of DKK 98m in Q4
CONTINUED SOLID CASH FLOW OF DKK 98M IN Q4 Q4 2023/24 FREE CASH FLOW – MAIN COMPONENTS (DKK) FREE CASH FLOW, % OF REVENUE 242 -27 15% -95 12% 11% 188 9% -22 98 163 7% 135 128 98 EBITDA Change in CAPEX1 Other2 Free cash flow Q4 Q1 Q2 Q3 Q4 working capital Q4 23/24 22/23 23/24 23/24 23/24 23/24 1) CAP
Slide 20: Net working capital ratio and CAPEX level close to long-term objectives
NET WORKING CAPITAL RATIO AND CAPEX LEVEL CLOSE TO LONG-TERM NWC, % OF 12 MONTHS’ REVENUE OBJECTIVES 20% 20% 19% 19% 19% KEY HIGHLIGHTS 939 932 1,011 1,025 1,050 Q4 22/23 Q1 23/24 Q2 23/24 Q3 23/24 Q4 23/24 • At 30 September 2024, net working capital was DKK 1,050m, corresponding to 19% CAPEX1, % OF
Slide 21: Impairment in gastroenterology, committed to long-term growth
DESPITE IMPAIRMENT IN GASTROENTEROLOGY, WE REMAIN COMMITTED AND CONFIDENT TO UNLOCKING MID- AND LONG-TERM GROWTH Impairment Gastroenterology In pipeline – paused for now • Special items totalled DKK 334m out of which DKK 327m impairment (Note 3.2) Approved – in controlled market release related to G
Slide 22: Capital allocation and financial policy
CAPITAL ALLOCATION AND FINANCIAL POLICY Capital allocation highlights Proposed dividends • Proposed dividend distribution worth of DKK 102m (DKK 0.38 DKKm per share) due to sound financial situation and no dividend 102 payments last two years 73 75 • Intended capital allocation priority order 1. Inv
Slide 23: Financial guidance for full-year 2024/25
FINANCIAL GUIDANCE FOR THE FULL-YEAR 2024/25 2024/25 outlook 2023/24 actuals Comments on 2024/25 outlook Growth will be driven by Endoscopy Organic revenue Solutions, which is expected to grow +15% growth 10-13% 13.8% Anaesthesia & Patient Monitoring is expected to grow mid-single digit EBIT margin
Slide 24: On track to deliver on long-term targets
ON TRACK TO DELIVER ON LONG-TERM TARGETS KEY HIGHLIGHTS • This year's results, combined with our guidance for 2024/25, affirm that we are 22/23 23/24 24/25 22/23-27/28 well on track to achieve our long-term actuals actuals guidance CAGR targets of over 10% organic growth and ~20% EBIT margin. Organi
Slide 25: 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 26: Appendix
Appendix 26
Slide 27: 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 28: 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 28
Slide 29: An attractive growth journey with Endoscopy Solutions as the 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 28% A&PM has annually grown by ~4%, resulting in overall CAGR of 14% Endoscopy Solutions DKKm Endoscopy Anaesthesia & Patient Solutions Monitoring (A&
Slide 30: First-mover in single-use endoscopy with presence across multiple areas
BEING FIRST-MOVER IN SINGLE-USE ENDOSCOPY, AMBU HAS BUILT A STRONG PRESENCE ACROSS MULTIPLE ENDOSCOPY AREAS Pulmonology (DKKm) PULMONOLOGY Illustrative est. Covid effect • First launch in 2009 of aScopeTM 1 Broncho • Mass-adoption of single-use bronchoscopy with 13%1 aScopeTM 4 Broncho (accelerated
Slide 31: Single-use endoscopy market is 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 2023/24 6.0m Cysto 6
Slide 32: 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 33: Large growth opportunities through efficiency, better outcomes and 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 Single-use endoscopes enhance Sing
Slide 34: Strong track record, well-positioned to win in single-use endoscopy
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 34
Slide 35: Substantial R&D investments secured a leading and growing 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 36: Future R&D investments will be solution-focused, adding more software
… 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: Endoscopy system compatibility acros
Slide 37: Technology advancements, modularity and strategic partnerships
TECHNOLOGY ADVANCEMENTS AND STRONG SET-UP WITH MODULARITY AND STRATEGIC PARTNERSHIPS ARE KEY STRONGHOLDS Best-in-class single-use endoscopy development with 15 years PROPRIETARY Icon of experience in innovation and manufacturing TECHNOLOGY Icon Proprietary technology development within imaging, mano
Slide 38: 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 38
Slide 39: 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 40: Towards a circular business model
TOWARDS A CIRCULAR 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-
Slide 41: Well-positioned to capitalize on growth opportunities in single-use endoscopy
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 42: Transformation program: building the 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 43: 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 44: On track to deliver on long-term targets
ON TRACK TO DELIVER ON LONG-TERM TARGETS KEY HIGHLIGHTS • This year's results, combined with our guidance for 2024/25, affirm that we are 22/23 23/24 24/25 22/23-27/28 well on track to achieve our long-term actuals actuals guidance CAGR targets of over 10% organic growth and ~20% EBIT margin. Organi
Slide 45: P&L details
P&L DETAILS DKKm 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 Q4 23/24 FY 23/24 reported figures Revenue 4,444 1,132 1,189 1,195 1,259 4,775 1,254 1,367 1,383 1,387 5,391 Gross profit 2,554 662 664 672 715 2,713 739 813 832 817 3,201 Gross margin 57.5% 58.5% 55.8%