Slide 1: Investor presentation Q3, 2018/19
Investor presentation Q3, 2018/19
Slide 2: New executive management team established
New executive management team established President and CEO Juan Jose Gonzalez joined Ambu May 15, 2019 Juan Jose Gonzalez Michael Højgaard CEO CFO 2
Slide 3: Agenda and Disclaimer
Agenda • Strategy update • Financial results 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 actual development of
Slide 4: The first "100 days" as CEO
Ambu* The first “100 days” as CEO
Slide 5: The single-use value proposition speaks to every stakeholder
The single-use value proposition speaks to every stakeholder Current challenges The single-use value proposition • FDA concerns* Cross- • New studies** contamination • Patient concerns • Availability issues from cleaning New Availability • Availability issues from repairs opportunities for • Lock-ou
Slide 6: Ambu's key advantages in single-use endoscopy
Ambu’s key advantages in single-use endoscopy First mover advantage Distinctive R&D and Strongest Dedicated 1%-share points of near-term pipeline salesforce single-use market potential (100M) would endoscopy more than double existing position visualization business Broad High quality, range of low-c
Slide 7: Building blocks of Ambu's 2019/20 Visualization strategy
Building blocks of Ambu’s 2019/20 Visualization strategy Innovation Globalization Capability expansion Talent and Culture ▪ Further enhance R&D ▪ Purposeful expansion of ▪ Global operations network ▪ Strengthening our winning competitive advantage direct salesforce and expansion to enable spirit and
Slide 8: We will accelerate our market potential every year with new product launches
Capability Talent and Innovation Globalization expansion Culture We will accelerate our market potential every year with new product launches 100m Full range of single-use flexible endoscopes and advanced 94m monitors in a 100M annual aScope™ procedures market Ureteroscope Gastro 22m aScope™ Cystosc
Slide 9: Early result shows strong ENT uptake on the US market
Capability Talent and Innovation Globalization expansion Culture Early result shows strong ENT uptake on the US market Q3, 2018/19 Unit volume first 11 weeks: aScope™ RhinoLaryngo (ENT) vs. aScope™ 3 US market aScopeTM 3 (pulmonology) aScopeTM RhinoLaryngo (ENT) Full launch of the ENT portfolio acro
Slide 10: Near-term visualization portfolio
Capability Talent and Innovation Globalization expansion Culture Near-term visualization portfolio X Market opportunity (annual procedures) Commercially available Launch plan aScope™ 5 Q4, 2020/21 Significant portfolio 1 Pulmonary 5m aScope™ 4 expansion over the next 2 years aView 2 Advance aScope B
Slide 11: The US launch of our Duodenoscope is on track
Capability Talent and Innovation Globalization expansion Culture The US launch of our Duodenoscope is on track Duodenoscope clinical program The project is on track and we have completed a number of functional tests that confirm we have an optimal design US launch before Tests are being done in mode
Slide 12: Ambu US Go-To-Market approach for Pulmonology
Capability Talent and Innovation Globalization expansion Culture Ambu US Go-To-Market approach for Pulmonology The US Go-To-Market strategy Revenue growth of a distributor vs. Ambu • In 2015, Ambu established a distribution agreement with a US distributor to drive our Pulmonology business. The main
Slide 13: Strategic rationale to create a 100% direct US Pulmonary model
Capability Talent and Innovation Globalization expansion Culture Strategic rationale to create a 100% direct US Pulmonary model Strategic rationale Transition plan The US healthcare market is consolidating into large healthcare systems, making it • Collaborative agreement with the 1 difficult to mai
Slide 14: Creating the largest single-use direct sales force in the US
Capability Talent and Innovation Globalization expansion Culture Creating the largest single-use direct sales force in the US Aggressive investment in Ambu’s largest region • For Visualization, number of sales reps. and clinical trainers will triple in size which will significantly improve hospital
Slide 15: The direct model has a higher NPV compared to sales through distributors
Capability Talent and Innovation Globalization expansion Culture The direct model has a higher NPV compared to sales through distributors Basic assumptions Conclusion Investment to move to a 100% direct model is financially Converting the distributor will improve our selling and strategically very a
Slide 16: We build deep category expertise within all areas
Capability Talent and Innovation Globalization expansion Culture We build deep category expertise within all areas New Marketing organization R&D organization Visualization Core Pulmonary Urology ENT GI PMD Anesthesia Visualization Core Deep category expertise Dedicated sales organizations in all te
Slide 17: Agenda and Disclaimer
Agenda • Strategy update • Financial results 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 actual development of
Slide 18: Key financial results in Q3 2018/19
Key financial results in Q3 2018/19 10% 30% 1% Organic growth Visualization growth Core growth 56.4% 20.1% 194,000 Gross margin EBIT margin Endoscopes sold before special items 18
Slide 19: Sales growth in 2018/19
Sales growth in 2018/19 Q3 organic growth by segments Q3 organic growth by regions Q3, YTD growth 10% 1% 10% • Anesthesia: 4% 9% 7% • PMD: 5% 2% • Core business: 4% 1% 0% • Visualization: 32% Anesthesia PMD Visualisation Q3 2018/19 Europe North America Rest of World Q3 2018/19 • Group: 13% Q3 report
Slide 20: Organic sales growth by geography
Organic sales growth by geography Q3 revenue and growth across regions North America Europe 49% Visualization 14% Visualization 15% 5% 383m organic -1% Anaesthesia 300m organic 2% Anaesthesia DKK revenue growth DKK revenue growth Q3 Q3 1% PMD 1% PMD Rest of world Global 29% 38% 10% Visualization 30%
Slide 21: Growth and profits
Growth and profits Ambu P&L – Q3 2018/19 Comments DKKm Q3 2018/19 Q3 2017/18 Revenue 773 673 • Q3, revenue totalled DKK 773m (DKK 673m), with organic growth of 10% and reported growth of 15% Gross margin 56.4% 59.7% • Gross margin for Q3 was 56.4% (59.7%), including one- off write-downs of DKK 25m.
Slide 22: Cash flow, assets and debt
Cash flow, assets and debt Ambu cash flow and balance – Q3 2018/19 Comments DKKm Q3 2018/19 Q3 2017/18 Cash flow and ratios: • Cash flow from operating activities at 29% Operating activities 225 29% 181 27% (27%) due to higher working capital Investing activities -77 -10% -78 -12% • Investments of 1
Slide 23: Financial guidance for 2018/19 and 2019/20
Financial guidance for 2018/19 and 2019/20 2018/19 4-5% ~ 17% DKK ~600k ~200 M (14-15%) ~ 22% (~ DKK 375 M) (~ 750k) Organic EBIT margin Free cash flow Endoscopes growth before special items excluding M&A sold (unit) At Q4 At Q4 2019/20 16-22% ~900k 2018/19 2018/19 (16-19%) (+ 20%) (9% of revenue) (
Slide 24: Changes to US commercial infrastructure lowered organic revenue guidance
Changes to the commercial infrastructures in the US has lowered our organic revenue guidance for 2018/19 from 14-15% to 4-5% Change revenue guidance Comments DKKm • Ambu has decided to further invest in and strengthen its largest market and transition the US distribution partnership with Tri-anim 50
Slide 25: Going direct in the US will reduce estimated number of scopes sold
Going direct with pulmonary endoscopy in the US will in the short term reduce estimated number of scopes to be sold New guidance for endoscope sold Comments 2018/19 2019/20 • Inventory with Tri-anim equals approx. 95,000 aScopes which Ambu will take back and offset against our Q4 2018/19 revenue and
Slide 26: What makes Ambu unique
Pioneering single-use What disposable endoscopy Major market opportunities to makes increase penetration worldwide Ambu Market leading R&D and innovation unique Top-tier growth profile Robust financial position 26
Slide 27: Q&A Conference call
Q&A Conference call DK: +45 3544 5577 UK: +44 333 300 0804 Access code: 95008558# Please limit your questions to only 3 at a time and get back into the queue if you have For questions, please press 01 additional questions 27
Slide 28: Financial calendar
Financial calendar 2019 Event 13 November Annual Report 2018/19 17 December Annual General Meeting 2018/19 Note: For full list of Investor Relations events, please visit: www.ambu.com/about/corporate-info/investors/calendar 28
Slide 29: Ambu – The Single-use company
Ambu – The Single-use company Contacts CFO Michael Højgaard, miho@ambu.com or +45 4030 4349 IR Manager Nicolai Thomsen, nith@ambu.com or +45 2620 8047