Transcript Document

INTERIM REPORT FOR Q3 2009/10
By CEO Lars Marcher and CFO Anders Arvai
AGENDA
 Developments in Q3 2009/10
 Strategy GPS Four – follow-up
 Outlook for 2009/10
HIGHLIGHTS (1)
BUSINESS DEVELOPMENT IN Q3
 Good Q3 – both revenue and EBIT up
relative to last year
+9%
 Organic growth of 9% – higher than market
Revenue of DKK 240m
 Gross profit margin increased to 54.6 from
+50%
growth
52.9 in Q3 2008/09
 EBIT up 50%
 Good productivity for the transferred
products and at the other factories
EBIT of DKK 32.6m
13.6%
 Transfer of electrode production is
EBIT margin
 PLM system up and running in Ambu DK,
+39%
 aScope launched in the USA
DKK 5m
progressing well
China and Malaysia and working
satisfactorily
Profit before tax of DKK 32m
Free cash flow
3
HIGHLIGHTS (2)
FINANCIAL DEVELOPMENT Q1-Q3
 Both revenue and EBIT up relative to last
year
+7%
 Organic growth of 7% – higher than market
Revenue of DKK 688m
 Gross profit margin increased to 54.1 from
+35%
growth
52.2 in Q1-Q3 2008/09
 EBIT and profit before tax up 35%
 Continued positive development in US
activities, growth in revenue of 15%
 GPS Four strategy being implemented
EBIT of DKK 84m
12.2%
EBIT margin
according to plan
+35%
Profit before tax of DKK 83m
DKK -11m
Free cash flow
4
REVENUE




Increase in revenue in Q3 of 9% and YTD 7% in local currencies
Changes in exchange rates have reduced EBIT by approx. DKK 7m YTD
Growth in Q3 of 15% in the USA and 5% in Europe measured in local currencies
Growth YTD in the USA of 12% and growth in Europe of 6% measured in local
currencies
Revenue by geographical region
5
Revenue by business area
DEVELOPMENTS WITHIN BUSINESS AREAS
Airway Management
 Increase in revenue in Q3 and Q1-Q3 of 6% and 14%, respectively, when measured in local
currencies
 Continued strong growth within single-use face masks and satisfactory growth within laryngeal
masks
 Sales of aScope (new single-use scope) in Europe in line with expectations. Launch commenced in
the USA
Patient Monitoring & Diagnostics
 Increase in revenue of 10% in local currencies in Q3 and Q1-Q3
 Strong growth within Neurology/Sleep in all sales regions
 Increasing growth within Cardiology in the UK, Sales Region West and the USA
Emergency Care
 Increase in revenue in Q3 and Q1-Q3 of 9% and 1%, respectively, when measured in local
currencies
 Growth in portfolio of single-use ventilation bags and neck collars
 First-aid training manikins and multiple-use ventilation bags are still impacted by the economic
situation in the market for multiple-use products.
6
DEVELOPMENTS WITHIN
GEOGRAPHICAL AREAS
Europe
 Increase in revenue in Q3 and YTD of 5% and 6%, respectively, when measured in
local currencies
 Growth in all sales regions of 3-8%
 Increase of 7% in revenue in Sales Region NEM (Scandinavia, Australia and distributor
markets) in Q3, and growth track from Q2 continuing
USA
 Increase in revenue of 15% in Q3, or 22% measured in DKK
 Increase in revenue of 12% YTD, or 8% when measured in DKK
 Market share still being won
 Market share is being won within ventilation bags, with satisfactory growth in sales
of laryngeal masks and needles and electrodes for neurological examinations and
sleep studies
7
OPERATING
PROFIT AND NET FINANCIALS
 EBIT after special items of DKK 33m in Q3 against DKK 22m in Q3 2008/09
 Special items of DKK 0.4m in Q3 (legal fees) – down relative to Q3 2008/09
 Total capacity costs in Q3 up DKK 11m, increasing selling and marketing costs and
increasing costs incidental to the transfer of production and in the Australian sales
company
 EBIT margin after special items of 13.6% in Q3 against 10.1% in Q3 2008/09
 EBIT YTD after special items of DKK 84m against DKK 62m for the same period in
2008/09
 Special items YTD of DKK 2m in the form of legal fees, significantly lower than for
the same period 2008/09
 EBIT margin after special items YTD up 2.6 percentage points relative to the same
period in 2008/09 at 12.2
 Net financials YTD amounted to expenses of DKK 0.5m against DKK 0.7m YTD
2008/09
 Positive foreign exchange translation adjustment of DKK 3.6m YTD against a
positive translation adjustment of DKK 4.9m for the same period 2008/09
8
IMPROVED
CASH FLOW
DKKm
Q1-Q3 2008/09
Q1-Q3 2009/10
Cash flow from operating activities
69.7
42.5
Cash flow from investing activities,
including acquisitions
(82.7)
(53.3)
Free cash flow after acquisitions
(13.0)
(10.8)
 Cash flow from operating activities negatively impacted by increasing funds tied in
working capital of DKK 82m
 Inventories are up DKK 61m, with DKK 26m being attributable to changes in
exchange rates, and DKK 35m to the building-up of buffer inventories, the
establishment of inventories of new products as well as increasing inventories of raw
materials
 Receivables are up DKK 22m, with an amount of DKK 13m being attributable to
exchange rate fluctuations and the rest resulting from increasing receivables from
southern Europe and increasing deposits following the expansion of production in
Asia
 Investments of DKK 53m – primarily in development projects, machinery,
9
equipment, IT and leasehold improvements and the purchase of a plot of land in
Malaysia
GPS FOUR
AMBU’S BUSINESS STRATEGY
GPS1
PRODUCTS AND PRODUCT DEVELOPMENT
 In the financial year, a number of new needle
products have been launched within Patient
Monitoring & Diagnostics as well as a new
member of the laryngeal mask family
 The single-use videoscope, aScope, has been
launched in the US market, and it has been
registered in Japan
 Feedback from doctors remains positive, and the
aScope is contributing to improving work routines
at hospitals
 The implementation of a global innovation
organisation has continued, and the recruitment
of more project managers and engineers for the
development organisation in China and Malaysia
has commenced
11
GPS2
MARKETS AND SALES
 Implementation of a project to ensure that
earnings margins within Patient Monitoring &
Diagnostics develop as expected
 The expansion of the sales force in the USA
in 2008/09 and the strengthened focus are
contributing to winning market share
 Adaptation of the sales and marketing
organisation has been completed
 Budgets in the health care sector are under
mounting pressure, especially in Sales Region
South, which covers Spain, Italy and
Portugal.
12
GPS3
EFFICIENCY
 Phase 2 of the transfer project is expected to
be implemented in September/October 2010 –
corresponding to 10% of the annual
consolidated revenue and affecting approx. 80
employees
 Streamlining measures are continuing at the
factories in China, Malaysia and Denmark with
a view to increasing profitability
 Expansion of production facilities in China
 The first phase of the group’s Product Life
Cycle Management System (PLM system) has
been implemented according to plan
13
GPS4
ACQUISITIONS
 There is considerable focus on the potential
for making acquisitions both in the USA and
in Europe
 Focus is on activities which can strengthen
Ambu’s position within single-use products
for the hospital sector
 Current dialogue on the insourcing of
products within existing business areas
14
OUTLOOK FOR 2009/10
15
MARKET
CHALLENGES

Risk of falling growth rates in Sales Region South

Successful transfer of production, phase 2

Maintaining average sales prices

Developments in foreign exchange rates (China, Malaysia, USA and UK)

Court case
OUTLOOK
FOR 2009/10 (2)
 Revenue of just over DKK 925m is expected
 The EBIT margin before special items relating to the patent cases is expected to
be upwards of 12.5%
 The profit before tax is expected to be in the region of DKK 110m
 The free cash flow is expected to be approx. DKK 40m
17
QUESTIONS
18
READ MORE AT WWW.AMBU.COM
For further information, please contact:
Lars Marcher, CEO, [email protected] or +45 5136 2490
Anders Arvai, CFO, [email protected] or +45 7225 2000