Ambu A/S: Interim report for Q1 2021/22
Ambu posted revenue for Q1 equal to the first quarter of last year, with organic growth of -1% and reported growth of 2%. Adjusted for last year’s NHS safety-stock orders, the Visualization business grew 26% in sales and 46% in volume reaching a new high with 419,000 units sold. Full-year outlook revised due to uncertainties created by Omicron.
“I am pleased to report that we have matched last year’s Q1 record sales driven by the rapid growth of our ENT and urology businesses. Ambu is also expanding its presence in GI with the launch of our single-use gastroscope into one of the largest endoscopy segments with more than 20 million procedures globally. We continue to lead the creation of the single-use endoscopy market in the midst of significant disruptions due to the Omicron variant and remain committed to fulfil our aspiration of becoming the most innovative single-use endoscopy player,” says Juan Jose Gonzalez, CEO of Ambu.
Highlights for the quarter
Last year’s comparative figures are stated in brackets.
- Revenue for Q1 was DKK 1,031m (DKK 1,013m) based on negative organic growth of 1% (39%) with reported growth of 2% (33%). Growth rates are significantly influenced by the high comparable for Q1 2020/21 driven by the safety-stock orders for the National Health Services (NHS) in the UK. Adjusted for these NHS orders, organic growth in Q1 2021/22 is 13%.
- Revenue in North America grew organically by 18% (13%), while we saw a decline in Europe of 16% (79%). Rest of World posted organic growth of 0% (9%). Adjusted for the NHS orders, the growth in Europe is 10% for Q1 2021/22.
- Visualization revenue posted negative organic growth of 2% (101%), but adjusted for the NHS orders, organic growth in Visualization in Q1 2021/22 is 26%.
- Units of single-use endoscopes reached 419,000 in the quarter, so that volumes are up 13% relative to last year. Adjusted for the NHS orders, the volume growth in Visualization for Q1 2021/22 is 46%.
- Anaesthesia sales declined by -6% (5%), while Patient Monitoring & Diagnostics (PMD) posted organic growth of 7% (-3%) caused by fluctuations in demand driven by COVID-19. The backlog of orders carried from last year continue to increase and is now carried into Q2.
- On 3 February 2022, we achieved FDA clearance of aScope™ Gastro and aBox™ 2 and the U.S. launch will begin soon. The expected average sales price for aScope™ Gastro will be USD 350 and for aBox™ 2 USD 7,500.
- Gross margin for the quarter was 61.5% (65.4%). The declining gross margin is driven by the product mix, labour and raw material inflation as well as overhead from ramping-up of the factory in Mexico.
- OPEX for the quarter totalled DKK 594m (DKK 514m), corresponding to an increase of 16% of which 7 percentage points are caused by increasing freight costs.
- EBIT for the quarter was DKK 40m (DKK 148m), with an EBIT margin of 3.9% (14.6%). The reduction of the EBIT margin is mainly caused by increasing costs including higher distribution costs which are absorbing 3.4 percentage points of EBIT margin when compared to Q1 last year.
- Net financials for the quarter were an expense of DKK 15m (DKK 30m).
- Net working capital-to-revenue ratio was 23% (17%) at the end of the quarter, based on rolling 12-month revenue. The supply chain situation, with significant delays in transit time, is increasing the level of inventories required to maintain service levels.
- Free cash flow before acquisitions totalled DKK -162m (DKK 2m) for the quarter including investments in innovation of DKK 106m and an increase in inventories of DKK 141m.
- Total net interest-bearing debt (NIBD) was DKK 1,259m (DKK 1,701m), corresponding to a leverage ratio of 2.7 (2.5). In line with our budget, NIBD is up DKK 500m since 30 September 2021, driven by commencement of lease agreement for the Mexico plant, the negative free cash flow and distribution of dividends.
- The outlook for the 2021/22 financial year is revised due to uncertainties regarding the continued impact of Omicron. The outlook for organic growth is revised from “15-19%” to “15%+” (15 percent or higher) and the outlook for EBIT margin is revised from “7-9%” to “7%+” (7 percent or higher). Outlook for the financial year is therefore:
- Organic growth of 15%+
- EBIT margin of 7%+
A conference call is held today, Tuesday 8 February 2022, at 09:00 (CET). The conference is broadcast live via ambu.com/webcastQ12022. To ask questions in the Q&A session, please call one of the following numbers five minutes before the start of the conference: +45 3544 5577 (DK), +44 333 300 0804 (UK), +1 631 913 1422 (US), and enter the following access code: 40283361#. The presentation can be downloaded immediately after the conference at ambu.com/presentations.
Michael Højgaard, CFO, email@example.com / +45 4030 4349
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