INTERIM REPORT FOR Q2 2022/23 AND THE HALF-YEAR
Ambu posts 4% organic revenue growth for the second quarter of 2022/23, in line with expectations. The quarter was driven by continued strong growth in urology and ENT, offset by pulmonology and Anaesthesia.
Financial guidance is maintained for the fiscal year 2022/23, with organic revenue growth at 5-8% and EBIT margin before special items at 3-5%.
“In the second quarter, Ambu delivers 4% organic revenue growth and 3.9% EBIT margin, in line with our expectations. We delivered a slightly positive cash flow and strengthened our capital base through an equity raise of around 5% of the total share capital. This has enabled us to reduce leverage faster than planned, strengthening our position in an uncertain global environment, as well as allowing us to consider relevant growth opportunities. Furthermore, execution of our transformation program remains on track, and we have strengthened our offering in pulmonology with the approval of additional sizes of Ambu® aScope™ 5 Broncho and the re-launch of Ambu® VivaSight™ 2 DLT. With the progress this quarter, we remain well-positioned to address customer needs, for the better of health systems and patients worldwide.”
BRITT MEELBY JENSEN
Chief Executive Officer
FINANCIAL HIGHLIGHTS FOR THE QUARTER
Last year’s comparative figures are presented in brackets.
- Revenue for Q2 increased organically by 4% (8%) to DKK 1,189m (DKK 1,122m), with reported growth of 6% (12%). Organic growth for the half-year was 4% (3%), with reported growth of 8% (7%).
- Revenue in North America increased organically by 8% (11%), while revenue growth in Europe was -1% (7%). Rest of World posted organic growth of 7% (-1%). Organic growth rates for the half-year were: North America 7% (14%), Europe -4% (-6%) and Rest of World 7% (-1%).
- Endoscopy Solutions revenue increased organically by 11% (3%) and by 7% (0%) for the half-year. In line with expectations, pulmonology posted -3% organic growth, mainly due to increased revenue from Omicron last year, however, bronchoscopy sales saw slightly positive growth, offset by lower revenue pertaining to the recall of Ambu® VivaSight™ 2 DLT. Endoscopy Solutions excluding pulmonology increased by 36%, driven by high double-digit growth in urology and ENT, combined.
- Anaesthesia sales declined by 11% (12%), due to reduction of backlog, combined with stock piling driven by geopolitical uncertainty, in Q2 last year. Contrarily, Patient Monitoring posted organic growth of 8% (14%). For the half-year, the combined organic growth of Anaesthesia and Patient Monitoring was 1% (6%).
- Gross margin for the quarter was 55.8% (57.7%), while the gross margin for the half-year was 57.1% (59.5%). The declining gross margin is driven by production costs, offset by product mix.
- EBIT before special items for the quarter was DKK 46m (DKK 47m), with an EBIT margin before special items of 3.9% (4.2%). EBIT for the half-year ended at DKK 114m (DKK 87m), with an EBIT margin of 4.9% (4.0%). The improved EBIT margin of 0.9% percentage points was driven by a reduced OPEX ratio of 3% percentage points and scale on EBIT margin from reported growth, partly offset by the gross margin decrease of 2.4% percentage points.
- Free cash flow before acquisitions totaled DKK 21m (DKK -136m) for the quarter and DKK -153m for the half-year, up DKK 145m compared to the same period last year. The improvement was driven by working capital and lower investments.
- The FY 2022/23 financial guidance stated on 15 November 2022 is maintained:
- Organic revenue growth: 5-8%
- EBIT margin before special items: 3-5%
PRODUCT AND PIPELINE UPDATES
- On 23 March 2023, Ambu re-launched its unique one-lung ventilation solution, the Ambu® VivaSightTM 2 DLT (double lumen tube). The solution re-enters the market with improved performance.
- On 28 March 2023, Ambu obtained European regulatory clearance (CE mark) of two new smaller-sized fifth-generation bronchoscopes. The company hereby has a complete fifth-generation bronchoscope portfolio for a wide array of patient needs in the bronchoscopy suite.
OTHER HIGHLIGHTS FROM Q2
- Ambu presented updated market potential assumptions:
- Number of procedures Ambu covers today: ~1.7m procedures
- Number of procedures with marketed solutions and near-term pipeline: ~23m procedures
- Current value of the total single-use endoscopy market: DKK ~5bn
- Expected value of the total single-use endoscopy market in five years: DKK 15-20bn
- From 23 March to 24 March 2023, Ambu strengthened its share capital base by selling 11,577,957 new B-shares and 250,000 existing treasury B-shares, corresponding to 5.3% of its B-share capital and approximately DKK 1.1bn.
- In April 2023, Ambu donated 110,000+ products (including resuscitators and face masks) to Turkey to support in the rebuilding of hospitals after the devastating earthquakes in February 2023.
- On 1 May 2023, Henrik Birk took on the role of Chief Operations Officer at Ambu. As an integral part of Ambu’s Executive Leadership Team, Henrik will drive execution and strategic direction across areas such as Manufacturing, Supply Chain, QA/RA and Procurement.
LONG-TERM FINANCIAL TARGETS
- Ambu specified its long-term financial targets at its Capital Markets Day on 21 March:
- 5-year organic revenue CAGR (2022/23-2027/28): >10%
- Endoscopy Solutions revenue growth: 15-20%
- Anaesthesia and Patient Monitoring revenue growth (combined): 2-4%
- EBIT margin before special items:
- 2-year target: >10%
- 5-year target: ~20% (2027/28)
- Financial leverage: Less than 2.5x
- 5-year organic revenue CAGR (2022/23-2027/28): >10%
Q2 2022/23 CONFERENCE CALL
A conference call is scheduled for 3 May 2023, at 09:00-10:00 (CEST). The conference is broadcast live via Ambu.com/webcastQ22023.
To ask questions during the Q&A session, please register prior to the call via Ambu.com//conferencecallQ22023register.
Upon registration, you will receive dedicated dial-in details via e-mail to access the call, including a passcode, a unique PIN, dial-in numbers and a calendar invitation.
The investor presentation can be downloaded from Ambu.com/presentations.
Ambu A/S
Baltorpbakken 13
2750 Ballerup
Denmark
Tel. +45 7225 2000
CVR no.: 63 64 49 19
www.Ambu.com
CONTACT
Investors
Nicolai Thomsen
Director, Investor Relations & Strategic Finance
[email protected]
+45 2620 8047
Media
Tine Bjørn Schmidt
Head of Corporate Communications
[email protected]
+45 2264 0697
ABOUT AMBU
Ever since 1937, Ambu has been rethinking medical solutions to save lives and improve patient care. Millions of patients and healthcare professionals worldwide depend on the efficiency, safety and performance of our single-use endoscopy, anaesthesia, and patient monitoring solutions. Today, we continue to collaborate with leading medical experts to deliver innovations that make a real difference to healthcare professionals and their patients.
At our headquarters in Copenhagen, Denmark, and around the world in Europe, North America and the Asia Pacific, 4,500+ team members keep Ambu moving forward. For more information, please visit Ambu.com.
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