INTERIM REPORT FOR Q3 2022/23
In Q3 2022/23, Ambu delivered 8% organic revenue growth and a 7.6% EBIT margin. This was driven by Endoscopy Solutions growing 23%, due to high double-digit growth within urology and ENT, and pulmonology returning to positive growth year-over-year.
Today, Ambu narrows its full-year 2022/23 organic revenue growth guidance to 6-8%, previously 5-8%, based on the company’s performance in Q3 and the first two months of Q4. On 10 July 2023, Ambu adjusted its financial guidance by upgrading its full-year EBIT margin before special items to 5-6%, previously 3-5%, driven by a better-than-expected gross margin, due to a strengthened product mix. In Q3, free cash flow ended at DKK 157m before acquisitions and is expected to reach an improvement of more than DKK 500m (previously DKK 350-450m) for the full-year 2022/23, compared to 2021/22.
“I am pleased with our performance this quarter, reflected by 23% growth in Endoscopy Solutions and 16% in pulmonology. We strengthened our pulmonology offering by completing our fifth-generation bronchoscope portfolio in North America, hereby gearing up to support more customers in our biggest market. This, combined with our strengthened free cash flow, reflects our continuous efforts to execute on our strategy to build a strong financial platform.”
BRITT MEELBY JENSEN
Chief Executive Officer
FINANCIAL HIGHLIGHTS FOR THE QUARTER
Last year’s comparative figures are presented in brackets.
- Revenue for Q3 increased organically by 8% (8%) to DKK 1,195m (DKK 1,128m), with reported growth of 6% (16%). Year-to-date, organic growth was 5% (5%), with reported growth of 7% (10%).
- Endoscopy Solutions revenue increased organically by 23% (0%) and by 12% (0%) year-to-date. Endoscopy Solutions excluding pulmonology increased by 33%, mainly driven by urology and ENT. Pulmonology posted 16% organic growth, driven by increased procedure volumes as a result of the healthcare market recovering from Covid-19, as well as strengthened single-use penetration of Ambu’s growing pulmonology portfolio.
- Anaesthesia organic revenue declined by 7% (14%), and Patient Monitoring declined by 7% (20%), on account of high comparables in North America for the circuits and cardiology product categories. Year-to-date, Anaesthesia and Patient Monitoring, combined, declined by 2% (10%).
- Revenue in North America increased organically by 9% (16%), Europe increased by 10% (4%), and Rest of World declined by 2% (-4%). Year-to-date, organic growth rates were 9% (15%) in North America, 1% (-3%) in Europe and 6% (-2%) in Rest of World.
- Gross margin in Q3 was 56.2% (55.8%) and 56.8% (58.2%) year-to-date. The better-than-expected gross margin was mainly driven by a strengthened product mix.
- EBIT before special items was DKK 91m (DKK 42m), with an EBIT margin before special items of 7.6% (3.7%). Year-to-date, EBIT before special items ended at DKK 205m (DKK 129m), with an EBIT margin before special items of 5.8% (3.9%). The improved EBIT margin of 3.9% percentage points was due to the achieved scale in OPEX and the effect from the increase in gross margin.
- Free cash flow before acquisitions totalled DKK 157m (DKK 7m), and free cash flow was DKK 4m year-to-date, up DKK 295m, compared to the same period last year. This was driven by improved EBITDA, NWC and lower CAPEX.
- The FY 2022/23 guidance:
- Organic revenue growth: 6-8% (narrowed from 5-8%)
- EBIT margin before special items: 5-6% (maintained as per 10 July 2023)
PRODUCT AND PIPELINE UPDATES
- North American 510(k) FDA clearance of Ambu’s next-generation Ambu® aView™ 2 Advance endoscopy system. The system offers endoscopists compatibility with Ambu’s current and future endoscopes within pulmonology, urology and ENT. With the CE mark obtained in November 2022, Ambu completes the full global launch across all major markets.
- North American 510(k) FDA regulatory clearance of two smaller-sized bronchoscopes, completing Ambu’s fifth-generation bronchoscope portfolio. With the clearance, Ambu begins its commercialisation of the full Ambu® aScope™ 5 Broncho offering in North America, while continuing its commercialisation in Europe, Australia and Japan.
- European regulatory clearance (CE mark) of Ambu® VivaSight™ 2 SLT (single-lumen tube), completing Ambu’s one lung ventilation (OLV) portfolio.
OTHER HIGHLIGHTS
- Ambu has kickstarted new initiatives to strengthen profitability. In Anaesthesia and Patient Monitoring, Ambu will implement sizable price increases in selected low-margin areas, and globally, Ambu has started to exit ~40 countries to minimise complexity and zoom in on growth. This will potentially result in a revenue decline within Anaesthesia and Patient Monitoring in 2023/24.
- A new independent cystoscopy study showed that 7.1% of patients treated with a reusable cystoscope returned for an unplanned post-procedure encounter, while the same was the case for only 2.2% of patients treated with a single-use cystoscope.
- A recently published study within GI concluded that the shift from reusable to single-use gastroscopes potentially increases reimbursement revenues in excess of $800K annually.
- Ambu renewed its partnership agreement with Plastic Bank®, thus continuing its commitment to counterbalancing the plastic present in all of its single-use endoscopes across EMEA and Latin America.
- On 1 August 2023, Finn Möhring joined Ambu as part of the Executive Leadership Team and Chief Technology Officer, heading up Ambu’s R&D organisation.
Q3 2022/23 CONFERENCE CALL
A conference call is scheduled for 31 Aug 2023, at 09:00-10:00 (CEST). The conference is broadcast live via Ambu.com/webcastQ32023.
To ask questions during the Q&A session, please register prior to the call via Ambu.com//conferencecallQ32023register.
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 presentation can be downloaded from Ambu.com/presentations.
Ambu A/S
Baltorpbakken 13
DK-2750 Ballerup, Denmark
Tel.: +45 7225 2000
CVR no.: 63 64 49 19
Ambu.com
CONTACT
Investors
Thomas Frederik Schmidt
Chief Financial Officer
tfsc@ambu.com
+45 2084 0500
Anders Hjort
Head of Investor Relations
anhj@ambu.com
+45 2892 8881
Nicolai Thomsen
Director, Strategic Finance
nith@ambu.com
+45 2620 8047
Media
Tine Bjørn Schmidt
Head of Corporate Communications
tisc@ambu.com
+45 2264 0697
ABOUT AMBU
Since 1937, Ambu has been rethinking solutions, together with healthcare professionals, to save lives and improve patient care. Today, millions of patients and healthcare professionals worldwide depend on the efficiency, safety and performance of our single-use endoscopy, anaesthesia and patient monitoring solutions. Headquartered near Copenhagen in Denmark, Ambu employs around 4,500 people in Europe, North America, Latin America and Asia Pacific. For more information, please visit Ambu.com.
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