Slide 1: Q1 interim report 2017/18
Q1 interim report 2017/18 October 1 – December 31 2017 CEO Lars Marcher CFO Michael Højgaard Conference call: January 31 2018
Slide 2: Agenda
Agenda • Q1 highlights • Potential in Visualisation • Financials and outlook • Q&A Disclaimer Forward-looking statements, especially such relating to future sales and operating profit, are subject to risks and uncertainties. Various factors, many of which are outside Ambu’s control, may cause the ac
Slide 3: Q1 highlights
Q1 highlights • 14% organic growth • Endoscope sales up 76% in units • EBIT margin improved by 3.8%-points • Invendo integration on schedule • Capital increase and planning for bond expiry • Full-year outlook adjusted upwards 3
Slide 4: Solid improvements year on year
Solid improvements year on year Organic growth: 14% Revenue: DKK 553m 650 16% 14% 14% 600 553m 11% 512m 12% 550 10% 500 8% 6% 450 Q1 LY Q2 LY Q3 LY Q4 LY Q1 Q1 LY Q2 LY Q3 LY Q4 LY Q1 Gross margin: 58.0% EBIT margin: 16.5% 25% 60% 58.0% 58% 20% 16.5% 56% 12.7% 53.7% 15% 54% 52% 10% Q1 LY Q2 LY Q3 LY
Slide 5: Business areas
Q1 – organic growth Business areas Visualisation Patient Monitoring & Revenue 158m DKK Diagnostics 58% growth Revenue 188m DKK 4% growth Anaesthesia Revenue 207m DKK 0% growth 5
Slide 6: Markets
Q1 – organic growth Markets North America Europe Rest of World REVENUE 247m DKK REVENUE 244m DKK REVENUE 62m DKK GROWTH 16% GROWTH 12% GROWTH 11% Business growth Business growth Business growth • Visualisation 70% • Visualisation 52% • Visualisation 36% • Anaesthesia 2% • Anaesthesia -1% • Anaesthes
Slide 7: 76% volume growth in Q1
Q1 – endoscope sales 76% volume growth in Q1 ~500k • 104,000 endoscopes Endoscope sales in units sold in Q1 • Full-year sales expected to reach 500,000 units • No change in competitive landscape 364k • New aScope manufacturing site is in 200k operation. 96k 104k 14k 40k • Capacity increased to 2012/
Slide 8: Potential in Visualisation
Potential in Visualisation – update and roadmap towards 2020 8
Slide 9: Three growth drivers for Visualisation in FY2017/18
Three growth drivers for Visualisation in FY2017/18… Effects from higher penetration Dedicated Visualisation sales The aScope 4 will unlock new of hospital accounts team in the US market potential 85% of aScope sales are now OR ICU Bronch generated by large hospital accounts Suite Vivasight aScope 3
Slide 10: As our Visualisation business grows, Group profitability will reach new levels
…And as our Visualisation business grows, our Group profitability will reach new levels FAVORABLE SCALABLE SCALABLE PRODUCT MIX COMMERCIAL SETUP PRODUCTION SETUP Our profitability will be positively We have established dedicated sales We have invested in major capacity affected by the high growth in
Slide 11: There is a big need for disposable solutions
There is a big need for disposable solutions – and Ambu is ideally positioned to take the lead in the new endoscopy market “ There is very strong pull …and a clear acceptance from all stakeholders from the industry The basic design of the reprocessed endoscope has remained virtually unchanged for ov
Slide 12: We will offer more than disposable scope solutions
We will offer more than disposable scope solutions – we will significantly simplify life for hospitals The full flexible scope offering is more than just eliminating risk of cross contamination – it’s a new way for hospitals to operate A flexible capital model Much lower investments for capital
Slide 13: The Gastrointestinal area will be the key to unlocking the full endoscopy market
The Gastrointestinal area will be the key to unlocking the full endoscopy market for flexible scopes Flexible endoscopy procedures ~90m ~5 m ~70m ~7 m ~7 m Pulmonary Gastrointestinal Urology ENT • Gastro is dominant in the hospitals’ endoscope The majority of endoscopy purchasing process investment
Slide 14: Expanded focus on flexible endoscope categories increases Ambu's market potential
With expanded focus on flexible endoscope categories we dramatically increase Ambu’s market potential Today 2020 Ambu market potential ~ 160bn DKK Ambu market potential ~ 20bn DKK Driven by our expanded footprint in the Endoscopy market going from ~5m to ~90m procedures 14
Slide 15: Until we have a scalable GI production setup we will work with selected accounts in the US
Until we have a scalable GI production setup in place we will work with selected accounts in the US January 2018 FY2017/18 Before 2020 FDA Build market Production Full GI clearance foundation setup portfolio We utilize the Within the The Colonoscope We will establish Colonoscope to strategy period,
Slide 16: Financial results and outlook
Financial results and outlook 16
Slide 17: Calculating fair value of Invendo
Calculating fair value of Invendo • The fair value is measured using an interest (WACC) of 18% and tentatively measured at DKK 1,415m (EUR 190m) • Over the coming years, we expect to pay all contingent milestones and earnouts • Bringing the nominal acquisition price to EUR 225m • The difference of E
Slide 18: Allocation of Invendo purchase price
Allocation of Invendo purchase price – to be completed by end of Q2 • Technologies are valued at DKK 683m (EUR 92m) • Allocated to the 3 main products (colono-, gastro- and duodeno-scopes) and amortised over 15 years • Amortisations to start when the products are commercially ready • Deferred taxes
Slide 19: Growth and profits
Growth and profits – Expansion of EBIT-margin continues DKKm Q1 17/18 Q1 16/17 • 14% organic growth and 8% in DKK Revenue 553 512 from depreciating USD/DKK Gross margin 58.0% 53.7% OPEX -230 -210 • Gross margin up 4.3%-points due to Cost percentage 42% 41% scale, mix and efficiency EBIT 91 65 • Cost
Slide 20: Cash flow and debt
Cash flow and debt – Gearing reduced to 1.7 x EBITDA DKKm Q1 17/18 Q1 16/17 • Operating cash flow Cash flow and ratios: improved by 2%-pts to 16% Operating activities 87 16% 73 14% of revenue Investing activities -51 -9% -30 -6% FCF before acquisitions 36 7% 43 8% • Investments of 9% including Balan
Slide 21: Full-year outlook upgraded
Full-year outlook upgraded Local currencies Danish Kroner 31 January 9 November 31 January 9 November 2018 2017 2018 2017 Organic growth ~13% ~13% - - EBIT margin - - 20-21% ~20% Free cash flows* - - ~DKK 300m ~DKK 275m * Before acquisitions 21
Slide 22: In summary
In summary • Solid start to Big Five 2020 strategy • Visualisation continues high growth • Potential towards 2020 is significant • Improved profitabillity • Invendo integration as per plan • Outlook lifted • Share buy back program 22
Slide 23: Ambu - Ideas that work for life
Ambu* Ideas that work for life
Slide 24: Read more at www.ambu.com
Read more at www.ambu.com Contact CEO Lars Marcher, lm@ambu.com or +45 5136 2490 CFO Michael Højgaard, miho@ambu.com or +45 4030 4349 24