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Q1 2007/08 presentation, 29 January 2008 By K. E. Birk, CEO, Anders Arvai, CFO, and Henrik Wendler, COO Agenda Developments in Q1 Outlook for 2007/08 Focus areas in the coming period 21 July 2015 2 Highlights – Q1 2007/08 Revenue of DKK 187m – up 14% (19% in local currencies) Sales to the USA up 44% EBIT of DKK 16m against DKK 9m in Q1 2006/07 EBIT margin of 8.8% against 5.7% in Q1 2006/07 Profit before tax of DKK 13m against DKK 6m in Q1 2006/07 Free cash flow of DKK 16m against DKK -2m in Q1 2006/07 21 July 2015 3 Revenue Revenue of DKK 187m against DKK 164m last year The revenue was affected by special conditions in the USA in Q4 2006/07 – trading with most customers resumed Negative effect of exchange rates of approx. DKK 8m in Q1 New products contribute to growth 21 July 2015 4 Revenue by business area Growth Growth DKKm Q1 Q1 2007/08 2006/07 Respiratory Care Cardiology Neurology Training Immobilization and other products Total % 59.6 59.4 15.3 17.0 26 8 15 3 32 11 20 4 13.2 12.4 6 16 187.4 163.7 14 19 Double-digit growth figures in all important markets Growth of 47% in the US market Increasing sales of laryngeal masks 21 July 2015 % 75.0 64.1 17.6 17.5 Respiratory Care in local in DKK Currencies Cardiology Neurology Satisfactory growth in all markets except France and Germany Blue Sensor a strong brand Double-digit growth figures in all markets except Spain and Italy Improved needles have attracted considerable interest Attractive growth potential 5 Revenue by geographical region Growth Growth Q1 Q1 DKKm 2007/08 2006/07 % % USA Europe Other 52.2 122.9 12.3 40.9 112.6 10.2 28 9 21 44 10 21 187.4 163.7 14 19 Total Europe in local Growth exceeds market growth Strongest growth in Spain, Italy and Germany Potential for stronger growth 21 July 2015 in DKK currencies USA Sales up 44% Most customers have started trading with Ambu again New customers within Neurology and also growth within Cardiology 6 Operating profit (EBIT) Increase in EBIT of 76% in Q1 2007/08 to DKK 16m against DKK 9m last year The improvement is primarily attributable to higher revenue Developments in exchange rates only had a limited effect on EBIT EBIT margin of 8.8% against 5.7% in Q1 2006/07 21 July 2015 7 Cash flow Cash flows from operating activities of DKK 20m against DKK 10m in Q1 2006/07 Positive free cash flow of DKK 16m against a negative free cash flow of DKK 2m in Q1 2006/07 The improvement is primarily attributable to improved earnings and lower investments 21 July 2015 8 Situation in the USA Decision not to go ahead with specially discounted sales towards the end of 2006/07 Subsequent active targeting of customers The sales force primarily focuses on customers with considerable potential Focused sales efforts are continued 21 July 2015 9 Reorganisation of the development area New Platform Innovation New products within existing business areas New Product Innovation New family members and new generations of existing products Local R&D Denmark and Asia Improvements and variants of existing products The development units will be focusing more on specific jobs The changes are to ensure faster and more efficient development processes The development model will be tailored to the individual development activities The documentation activities will be adjusted 21 July 2015 10 New products 21 July 2015 No new products launched in Q1 2007/08 Focus on a number of new development activities In the rest of 2007/08, 2–3 improved products or new variants will be launched within all 5 business areas The products launched in 2006/07 have all been positively received by the market, and growth in sales of these products is satisfactory. 11 Reorganisation of the marketing area Portfolio Management Market Support Search Portfolio managers within each individual business area. Improve knowledge of the market, optimise product portfolio, launch products and ensure product performance. Market support – support of subsidiaries, marketing material and campaigns as well as product training Search identifies new products and product areas, analyses and assesses the potential The products identified as holding out potential are handed over to New Platform Innovation. 21 July 2015 12 Patent case concerning laryngeal mask – status Autumn 2005 LMA institutes legal proceedings against Ambu Germany claiming infringement of a German patent concerning the reinforcement of the tip of the laryngeal mask August 2006 Decision announced. Ambu is infringing patent August 2006 Launch of new version of the laryngeal mask on the German market – no negative impact on sales September 2006 Ambu lodges appeal – expected announcement of decision in summer 2008 – German court awaiting decision from the European Patent Office Subsequently LMA institutes proceedings against Ambu Holland, Ambu France and most recently Ambu USA (October 2007) for infringement of its patents Status Four cases pending. Ambu is denying all claims of an infringement of LMA’s patent and is contesting its validity. The product which the case concerns is no longer sold in Europe Financial impact So far, the cases have not negatively impacted Ambu’s revenue, but they have led to extraordinary expenses in the form of patent and legal fees 21 July 2015 13 Agenda Developments in Q1 Outlook for 2007/08 Focus areas in the coming period 21 July 2015 14 The outlook for 2007/08 is unchanged 21 July 2015 Growth in revenue of approx. 8% measured in local currencies, corresponding to approx. DKK 750m (USD: 500) EBIT margin of 11.5-12% Profit before tax of 10.5-11% of revenue, or approx. DKK 80m Free cash flow of approx. DKK 45m (with investments amounting to approx. 7% of revenue) 15 Agenda Developments in Q1 Outlook for 2007/08 Focus areas in the coming period 21 July 2015 16 Focus areas 21 July 2015 Efficient implementation of changes within development as well as sales and marketing Launch of new and improved products Ensure growth in the USA Continued streamlining of production Focus on reducing unit costs and other costs through improved purchasing of raw materials and indirect materials Continued focus on opportunities for acquisitions 17 Questions For further information, please visit www.ambu.com 21 July 2015 19