Ambu A/s Class B · OMXCOP:AMBU_B
Ambu A/s Class B — Ambu A S Ord — Q1 2024 Earnings Presentation
43 slides from Ambu A/s Class B's earnings presentation, Jan 30, 2024
Slide 1: Q1 2023/24 Results Investor presentation
Q1 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 Q1 2023/24 RESULTS • Business update • Financial update 2 Q&A SESSION Today’s speakers BRITT MEELBY JENSEN HENRIK SKAK BENDER CEO CFO 3
Slide 4: Q1 results represented a solid start to 2023/24 financial year
Q1 RESULTS REPRESENTED A SOLID START TO 2023/24 FINANCIAL YEAR – PROFITABLE GROWTH PICKING UP Total organic Endoscopy organic EBIT margin Free revenue growth revenue growth before special items cash flow 14% 25% 10.0% 135 DKKm Q1 2022/23: 4% Q1 2022/23: 3% Q1 2022/23: 6.0% Q1 2022/23: -174DKKm 4
Slide 5: Solid execution of customer-centric strategy and transformation in first quarter
SOLID EXECUTION OF CUSTOMER-CENTRIC STRATEGY AND TRANSFORMATION IN FIRST QUARTER – ON TRACK TO DELIVER STRONG PROFITABLE GROWTH PROVIDE INNOVATIVE SOLUTIONS FOR EXCEL IN EXECUTION TRUE CUSTOMERS NEEDS ACROSS THE VALUE CHAIN • European regulatory clearance of the new ureteroscopy solution • Profitabl
Slide 6: Endoscopy Solutions is the main growth contributor
ENDOSCOPY SOLUTIONS IS THE MAIN GROWTH CONTRIBUTOR WITH GROWING SHARE OF TOTAL REVENUE Revenue development (DKKm) Reported revenue change FX impact Revenue split across business Organic revenue growth areas Anaesthesia & Patient Monitoring +14% Endoscopy solutions +25% 1,254 45% 40% +1% 55% +5%- 60%
Slide 7: Endoscopy Solutions grew 25%
ENDOSCOPY SOLUTIONS GREW 25% - DRIVEN BY EXISTING SOLUTIONS IN THE GROWING SINGLE-USE ENDOSCOPY MARKET KEY HIGHLIGHTS • The satisfactory growth in Endoscopy Endoscopy Solutions Solutions was mainly driven by Ambu’s (Reported revenue, DKKm) pre-existing solutions in the growing Organic growth single-
Slide 8: Pulmonology grew 18%
PULMONOLOGY GREW 18% - DRIVEN BY BRONCHOSCOPY PORTFOLIO, COMBINED WITH LOW COMPARABLES IN Q1 LAST YEAR KEY HIGHLIGHTS • Ambu’s bronchoscopy portfolio was Pulmonology the biggest growth contributor partly (Reported revenue, DKKm) driven by weaker comparables Organic growth +18% • Pulmonology was driv
Slide 9: Pulmonology positively impacted by flu season
PULMONOLOGY POSITIVELY IMPACTED BY FLU SEASON, WHICH TENDS TO BE HIGH IN AMBU’S H1 Flu season above five-year average – but lower than Q1 last year Comments U.S. Weekly national summary, 2023-2024 and five previous seasons 18/19 • Flue surveillance data indicates a 19/20 Ambu’s Q1 Q2 less impactful
Slide 10: CMS grants additional reimbursement for Ambu aScope 5 HD
CMS GRANTS ADDITIONAL REIMBURSEMENT FOR AMBU ASCOPE 5 HD THE ASCOPE™ 5 BRONCHO HD SINGLE-USE BRONCHOSCOPE WILL RECEIVE A NEW TRANSITIONAL PASS- THROUGH (TPT) PAYMENT CATEGORY EFFECTIVE FROM JANUARY 1, 2024 Why was only the aScope 5 Broncho HD Supporting continued growth within awarded TPT Status? pu
Slide 11: Endoscopy Solutions excl. Pulmonology grew 34%
ENDOSCOPY SOLUTIONS EXCL. PULMONOLOGY GREW 34% - DRIVEN BY UROLOGY AND ENT KEY HIGHLIGHTS • Ear-nose-throat (ENT) and urology Endoscopy Solutions excl. pulmonology continued their double-digit organic (Reported revenue, DKKm) growth trajectory Organic growth +34% • During the quarter, Ambu strengthe
Slide 12: aScope 5 Uretero received CE-mark
ASCOPE™ 5 URETERO RECEIVED CE-MARK | SINGLE-USE MARKET ALREADY ESTABLISHED AND GROWING RAPIDLY ASCOPE 5 URETERO LAUNCH PROCESS aScope™ 5 Uretero will support further single-use penetration by providing innovative solutions to market, including CE-MARK PRODUCT November 29, 2023 LAUNCH • Clear and sha
Slide 13: Anaesthesia & Patient Monitoring grew 1%
ANAESTHESIA & PATIENT MONITORING GREW 1% - IMPACTED BY PRICE INITIATIVES KEY HIGHLIGHTS • Ambu’s exit from ~40 markets is Anaesthesia & Patient Monitoring (Reported revenue, DKKm) completed, with the majority of revenue relating to the Anaesthesia & Patient Organic growth Monitoring segment. +1% 536
Slide 14: Progress on our sustainability agenda, SBTi approval
PROGRESS ON OUR SUSTAINABILITY AGENDA, WITH SBTI APPROVAL OF SHORT TERM TARGETS AND PLAN FOR NET ZERO EMISSIONS BY 2045 Approaching net-zero emissions by Committed to sustainable endoscopy through 2045 and SBTi approved short term circular products and packaging targets Key targets2 Key focus areas
Slide 15: Henrik Skak Bender, CFO
Amburs HENRIK SKAK BENDER CFO 15
Slide 16: Q1 2023/24 reported revenue growth of 11%
Q1 2023/24 REPORTED REVENUE GROWTH OF 11%, DRIVEN BY ORGANIC GROWTH OF 14%, OFFSET BY CURRENCY EFFECT OF 3%-POINTS KEY HIGHLIGHTS REPORTED GROUP REVENUE (DKKm) • Reported revenue growth of 11% in Q1 2023/24 driven by solid organic of 14%, +11% however, offset by currency effect of 3%- points -3% 1,2
Slide 17: EBIT margin increased to 10%
EBIT MARGIN INCREASED TO 10% DRIVEN BY SCALE IN OPEX EBIT MARGIN BEFORE SPECIAL ITEMS (%) +4%-pts 10.0% 3.6% 6.0% 0.4% EBIT margin (%) 10.0% 7.6% 7.7% 6.0% 3.9% EBIT margin Δ Gross Δ OPEX EBIT margin Q1 Q2 Q3 Q4 Q1 Q1 22/23 margin to Revenue Q1 23/24 22/23 22/23 22/23 22/23 23/24 17
Slide 18: Solid gross margin of 58.9%
SOLID GROSS MARGIN OF 58.9% IN Q1 2023/24 DRIVEN BY STRENGTHENED PRODUCT MIX, PARTLY OFFSET BY CURRENCY TAILWINDS KEY HIGHLIGHTS Gross margin (%) • The increase in gross margin was mainly +0.4%-pts driven by product mix and some tailwinds 58.5% 58.9% from currencies 56.8% 55.8% 56.2% • Partly offset
Slide 19: OPEX has plateaued in alignment with ZOOM IN strategy
OPEX HAS PLATEAUED IN ALIGNMENT WITH THE ZOOM IN STRATEGY KEY HIGHLIGHTS OPEX to revenue (%) • OPEX grew 6% in local currencies y-o-y in Q1 2023/24, however, OPEX has -3.6%-pts 52.5% plateaued in alignment with the ZOOM IN 52.0% strategy, positioning Ambu for further 48.6% 49.1% 48.9% investments in
Slide 20: Cash flow improvement has accelerated
CASH FLOW IMPROVEMENT HAS ACCELERATED, DUE TO SUCCESSFUL IMPLEMENTATION OF PROFITABILITY AND NWC INITIATIVES... FREE CASH FLOW – MAIN COMPONENTS (DKK) +309 135 21 22 FREE CASH FLOW TO SALES (%) 15% 198 13% 11% 2% 68 -174 Free Improved Change in Less Other Free -13% cash flow EBITDA working CAPEX cas
Slide 21: Net working capital lowered to 19% of revenue
… WITH NET WORKING CAPITAL LOWERED TO 19% OF REVENUE AND INVENTORY LEVEL BELOW DKK 1BN KEY HIGHLIGHTS NWC, % OF 12 MONTHS’ REVENUE 25% • Net working capital significantly reduced, 24% 21% driven by balanced level of inventory and 20% 19% trade receivables 1,144 1,108 987 939 932 Q1 22/23 Q2 22/23 Q3
Slide 22: 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 •
Slide 23: Addressing the full P&L, aligned with long-term targets
… ADDRESSING THE FULL P&L, ALIGNED WITH OUR LONG-TERM TARGETS MedTech Long-term 2022/23 REPORTED peers targets FOCUS AREAS OF TRANSFORMATION PROGRAM Revenue, DKKm 4,775 Organic growth, % 7.6% >10%1 Optimized pricing (in-market + launches) Gross profit, DKKm 2,713 COGS reduction Gross margin, % 56.8%
Slide 24: FY 2023/24 financial guidance maintained
FY 2023/24 FINANCIAL GUIDANCE MAINTAINED 2023/24 outlook 2022/23 actuals Comments on 2023/24 outlook Growth will be driven by Endoscopy ORGANIC solutions expected to grow ~15% REVENUE 7-10% 7.6% GROWTH Outlook includes 1.0-1.5% negative revenue impact due to strategic initiatives* EBIT Profitability
Slide 25: Thank you for your attention
THANK YOU FOR YOUR ATTENTION 30 JANUARY: Q1 2023/24 earnings • 31 JANUARY: Copenhagen roadshow • 6 FEBRUARY : Zurich roadshow • 7 FEBRUARY : Netherlands roadshow • 27 FEBRUARY : Morgan Stanley Medtech. Conference in London • 28 FEBRUARY : London roadshow • 29 FEBRUARY : Frankfurt roadshow • 6 MARCH:
Slide 26: Appendix
x Mm fa Le Appendix
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* * The distributor markets highlighted do not include the 40 markets that Ambu is currently exiting 28
Slide 29: An 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 30: First-mover in single-use endoscopy with strong presence across areas
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 31: Gastroenterology: advancement with approval of two new solutions
GASTROENTEROLOGY (GI): SIGNIFICANT ADVANCEMENT WITH APPROVAL OF TWO NEW SOLUTIONS, BUILDING LONG-TERM FOUNDATION FOR GROWTH With FDA approval of aScope™ Colon and CE mark for aScope™ We are advancing single-use Gastro Large in EU, we continue our focus on high-need, niche endoscopy in GI, building t
Slide 32: Single-use endoscopy market is attractive with large white space
THE SINGLE-USE ENDOSCOPY MARKET IS ATTRACTIVE AND HOLDS A LARGE WHITE SPACE; ~3% OF THE MARKET SO FAR CONVERTED TO SINGLE-USE Annual endoscopy procedures in Ambu’s focus markets ~100 millions procedures in total PULMONOLOGY 4.1m ~5m ~2m annual CYSTO 6.0m ~10m procedures UROLOGY URETERO 1.0m ~1.5m 6.
Slide 33: 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 34: Large growth opportunities through efficiency, patient 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 Reduce workload and Avoid repairs
Slide 35: 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 35
Slide 36: 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 37: Technology advancements, modularity and strategic 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 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 to build the foundation
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 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% 7-10% > 10% CAGR impa
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 reported figures Revenue 2,820 3,567 4,013 4,444 1,132 1,189 1,195 1,259 4,775 1,254 Gross profit 1,637 2,212 2,503 2,554 662 664 672 715 2,713 739 Gross margin 58.0% 62.0% 62.4% 57.5% 58.5% 55
Slide 43: Ambu Forever Forward
Ambu FOREVER FORWARD