Ambu A/s Class B · OMXCOP:AMBU_B
Ambu A/s Class B — Ambu A S Ord — Q2 2024 Earnings Presentation
43 slides from Ambu A/s Class B's earnings presentation, May 14, 2024
Slide 1: Q2 2023/24 Results
Q2 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 Q2 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: Q2 2023/24 results represent continued strong momentum
Q2 2023/24 RESULTS REPRESENT A CONTINUED STRONG MOMENTUM – PROFITABLE GROWTH PICKING UP Total organic Endoscopy organic EBIT margin Free revenue growth revenue growth before special items cash flow 15.5% 22.3% 14.2% 128 DKKm Q2 2022/23: 4.2% Q2 2022/23: 10.6% Q2 2022/23: 3.9% Q2 2022/23: 21 DKKm 4
Slide 5: Solid execution of customer-centric strategy and transformation
SOLID EXECUTION OF CUSTOMER-CENTRIC STRATEGY AND TRANSFORMATION PROVIDE INNOVATIVE SOLUTIONS FOR EXCEL IN EXECUTION TRUE CUSTOMERS NEEDS ACROSS THE VALUE CHAIN • U.S. regulatory clearance (FDA) of aScope™ Gastro Large • Profitable growth strengthened, with 22.3% revenue growth in solution. European
Slide 6: Endoscopy Solutions is the main growth contributor
ENDOSCOPY SOLUTIONS IS THE MAIN GROWTH CONTRIBUTOR, WITH GROWING SHARE OF TOTAL REVENUE Q2 2023/24 Revenue development (DKKm) Revenue split across business areas Organic revenue change FX impact Anaesthesia & Patient Monitoring +15.5%1 Endoscopy solutions 1,367 44% 41% +22.3%1 +3%- +7.0%1 56% pts 59
Slide 7: Anaesthesia & Patient Monitoring grew 7.0% in Q2
ANAESTHESIA & PATIENT MONITORING GREW 7.0% IN Q2 2023/24 AND 4.2% IN H1 – POSITIVELY IMPACTED BY PRICE INITIATIVES Anaesthesia & Patient Monitoring (Reported revenue, DKKm) KEY HIGHLIGHTS +4.2%1 • Ambu’s exit from ~40 markets is completed, with 1,041 1,066 the majority of revenue relating to the Ana
Slide 8: Endoscopy Solutions grew 22.3% in Q2 2023/24
ENDOSCOPY SOLUTIONS GREW 22.3% IN Q2 2023/24 AND 23.6% IN H1 – DRIVEN BY GROWTH ACROSS ALL ENDOSCOPY SEGMENTS Endoscopy Solutions (Reported revenue, DKKm) KEY HIGHLIGHTS +23.6%1 1,555 • Satisfactory growth in Endoscopy Solutions was mainly driven by Ambu’s established solutions in 1,280 the growing
Slide 9: Pulmonology grew 13.9% in Q2 and 15.9% in H1
PULMONOLOGY GREW 13.9% IN Q2 AND 15.9% IN H1 Pulmonology (Reported revenue, DKKm) KEY HIGHLIGHTS +15.9%1 • Pulmonology growth in H1 was driven by the flu season and post Covid-19 market 825 normalisation, combined with low 724 comparables. • aScope 4 Broncho, aScope 5 Broncho and +13.9%1 VivaSight 2
Slide 10: Pulmonology positively impacted by the flu season
PULMONOLOGY WAS POSITIVELY IMPACTED BY THE FLU SEASON IN AMBU’S FISCAL Q2 2023/24 Flu season above five-year average – and higher than Q2 last year Comments U.S. Weekly national summary, 2023-2024 and five previous seasons • Flue surveillance data indicates a more severe flu season, Ambu’s Q1 Q2 18/
Slide 11: Ambu Broncho Simulator
AMBU BRONCHO SIMULATOR A breakthrough in pulmonology training • Unlike many current offers on the market, the Ambu Broncho simulator is based on a phantom model that brings users a near-real bronchoscopy experience. • A platform, developed with Artificial Intelligence, setting the stage for future i
Slide 12: Endoscopy Solutions excl. pulmonology grew 33.3%
ENDOSCOPY SOLUTIONS EXCL. PULMONOLOGY GREW 33.3% IN Q2 2023/24 AND 33.7% IN H1 – DRIVEN BY UROLOGY AND ENT Endoscopy Solutions excl. pulmonology (Reported revenue, DKKm) +33.7%1 KEY HIGHLIGHTS 730 • Ear-nose-throat (ENT) and urology continued solid double-digit organic growth 556 trajectory. +33.3%1
Slide 13: aScope Duodeno 2 obtains FDA clearance
ASCOPE™ DUODENO 2, OUR NEW GENERATION DUODENOSCOPY, OBTAINS FDA CLEARANCE Providing flexibility and sterility • The new generation aScope™ Duodeno 2 solution is designed to meet the high-performance expectations in ERCP and to relieve the burden of complex and time- consuming reprocessing conducted
Slide 14: FDA clearance for aScope Gastro Large
AMBU OBTAINS FDA CLEARANCE FOR ASCOPE™ GASTRO LARGE, THE WORLD'S FIRST SINGLE-USE THERAPEUTIC GASTROSCOPE A 4.2 mm working channel • Ambu obtains FDA clearance for world's first single- use therapeutic gastroscope, aScope™ Gastro Large. • With its 4.2 mm working channel and endoscope handle made wit
Slide 15: New FDA clearances build foundation for long-term growth
AMBU HAS TAKEN STEPS TO BUILD FOUNDATION FOR LONG-TERM GROWTH WITH NEW FDA CLEARANCES OF DUODENO 2 AND GASTRO LARGE In Ambu’s focus market, the annual endoscopy procedures performed are ~100m, out of which 68.5m are within gastroenterology (GI)1 5.0m 11.5m 17.0m 68.5m ~100m Addressable market with c
Slide 16: Henrik Skak Bender, CFO
HENRIK SKAK BENDER CFO 16
Slide 17: Reported revenue growth of 15.0% in Q2 2023/24
REPORTED REVENUE GROWTH OF 15.0% IN Q2 2023/24, WITH LIMITED CURRENCY IMPACT OF -0.5% REPORTED GROUP REVENUE (DKKm) KEY HIGHLIGHTS +15.0% -0.5% 1,367 • Reported revenue growth of 15.0% in Q2 2023/24, driven by solid organic of 15.5%. • The currency effect of 0.5%-points was mainly due to USD/DKK dev
Slide 18: EBIT margin increased to 14.2% in Q2 2023/24
EBIT MARGIN INCREASED TO 14.2% IN Q2 2023/24, DRIVEN BY BOTH GROSS MARGIN AND, IN PARTICULAR, BY SCALE IN OPEX EBIT MARGIN1 (%) +10.3%-pts 6.7% 14.2% EBIT margin1 (%) 14.2% 10.0% 3.6% 7.6% 7.7% 3.9% 3.9% Q2 Q3 Q4 Q1 Q2 22/23 22/23 22/23 23/24 23/24 EBIT margin Δ Gross Δ OPEX EBIT margin Q2 22/23 mar
Slide 19: Solid gross margin of 59.5% in Q2 2023/24
SOLID GROSS MARGIN OF 59.5% IN Q2 2023/24, DRIVEN BY STRENGTHENED PRODUCT MIX Gross margin (%) +3.7%-pts 59.5% KEY HIGHLIGHTS 58.9% 56.8% 55.8% 56.2% • Gross profit in Q2 was up 22.4% to DKK 813m, and the gross margin increased by Q2 Q3 Q4 Q1 Q2 3.7 percentage points to 59.5%. 22/23 22/23 22/23 23/2
Slide 20: OPEX to revenue continues to decline
OPEX TO REVENUE CONTINUE TO DECLINE, IN ALIGNMENT WITH THE ZOOM IN STRATEGY OPEX to revenue (%) -6.7%-pts KEY HIGHLIGHTS 52.0% 48.6% 49.1% 48.9% • Absolute OPEX has plateaued, in 45.3% alignment with the ZOOM IN strategy, thereby driving down OPEX ratio. Q2 Q3 Q4 Q1 Q2 • Increased investments in com
Slide 21: Cash flow improvement has accelerated
CASH FLOW IMPROVEMENT HAS ACCELERATED, PRIMARILY DUE TO IMPROVED PROFITABILITY, SLIGHTLY OFFSET THIS QUARTER BY NET WORKING CAPITAL Q2 FREE CASH FLOW – MAIN COMPONENTS (DKK) FREE CASH FLOW, % OF REVENUE 285 15% 13% 67 11% 188 9% 157 68 135 128 22 128 2% 21 Q2 Q3 Q4 Q1 Q2 22/23 22/23 22/23 23/24 23/2
Slide 22: Balanced net working capital of 20%
WITH BALANCED NET WORKING CAPITAL OF 20%, CASH FLOW WILL BE NWC, % OF 12 MONTHS’ REVENUE DRIVEN MAINLY BY IMPROVED EBITDA 24% 21% 20% 20% 19% 1,108 987 939 932 1,011 KEY HIGHLIGHTS Q2 22/23 Q3 22/23 Q4 22/23 Q1 23/24 Q2 23/24 • Net working capital significantly reduced, driven by balanced level of i
Slide 23: FY 2023/24 financial guidance, based on April 2024 upgrade
FY 2023/24 FINANCIAL GUIDANCE, BASED ON 10 APRIL 2024 UPGRADE 2023/24 outlook 2022/23 actuals Comments on 2023/24 outlook Growth will be driven by Endoscopy solutions, ORGANIC which is expected to grow +15% in 23/24 REVENUE 10-12% 7.6% GROWTH Outlook includes 1.0-1.5% negative revenue impact, due to
Slide 24: 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 25: Appendix
Appendix Ambuzss
Slide 26: 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 27: 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 27
Slide 28: 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 26% A&PM has annually grown by ~3%, resulting in overall CAGR of 13% DKKm Endoscopy Solutions Endoscopy Anaesthesia & Patient Solutions Monitoring (A&
Slide 29: First-mover in single-use endoscopy with strong presence
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 30: New FDA clearances build foundation for long-term growth
AMBU HAS TAKEN STEPS TO BUILD FOUNDATION FOR LONG-TERM GROWTH WITH NEW FDA CLEARANCES OF DUODENO 2 AND GASTRO LARGE In Ambu’s focus market, the annual endoscopy procedures performed are ~100m, out of which 68.5m are within gastroenterology (GI)1 5.0m 11.5m 17.0m 68.5m ~100m Addressable market with c
Slide 31: 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 32: Large growth opportunities through efficiency, better 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 33: Strong and proven track record, 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 33
Slide 34: Substantial R&D investments secured a leading portfolio of solutions
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 35: Technology advancements and modularity are key strongholds
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 36: 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 36
Slide 37: 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 38: 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 39: Well-positioned to capitalize on 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 40: 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 – 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 41: Aims >10% organic revenue growth 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% 10-12% > 10% CAGR imp
Slide 42: 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 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 Gross profit 1,637 2,212 2,503 2,554 662 664 672 715 2,713 739 813 Gross margin 58.0% 62.0% 6
Slide 43: Forever Forward
FOREVER FORWARD Amb