Reporting organic growth in Q2 of 15%, Ambu is well on the way to realising its Big Five 2020 targets with satisfactory gross margins and earnings. The organic growth outlook in local currencies for the year is raised.
"Momentum is strong throughout our business with growth of 49% for Visualisation for the half-year and combined growth of 4% for Anaesthesia and PMD. We are succeeding with our initiatives in Europe, the USA and Asia, realising growth rates of 14%, 16% and 16% in the three regions. Strong, double-digit growth over many quarters has transformed Ambu and scaled our earnings to a gross margin in Q2 of 60.5% and an EBIT margin of 24.0%. These are record results for Ambu. We have now been working with Invendo - our latest acquisition - for almost six months, and we are positive about launching a full portfolio of single-use gastrointestinal products before the end of our strategy period in 2020, thereby creating additional potential for growth. In the near term, the solid results for the half-year mean that we are raising our organic growth outlook in local currencies for the full year," says CEO Lars Marcher.
Highlights
- Revenue of DKK 651m was posted for Q2, representing growth of 15% in local currencies and 6% in Danish kroner. Half-year growth of 14% in local currencies, or 7% in Danish kroner, was realised. The difference between growth in local currencies and Danish kroner is due to the strengthening of DKK and EUR relative to the US dollar.
- In Q2, Anaesthesia contributed growth of 8%, Visualisation contributed 43%, and PMD (Patient Monitoring & Diagnostics) delivered growth of 3%, when measured in local currencies. For the half-year, growth was 4% in Anaesthesia, 49% in Visualisation and 3% in PMD.
- Europe contributed growth of 14%, North America 16%, and the rest of the world also 16%. For the half-year, growth was 13% in Europe, 16% in North America, and 14% in the rest of the world.
- The sales figures for endoscopes were 145,000 for Q2, and 249,000 for the half-year, representing increases of 53% and 62% respectively compared to last year.
- The gross margin was 60.5% (55.6%) for the quarter, corresponding to an improvement of 4.9 percentage points. For the half-year, the gross margin was 59.4% (54.8%).
- Total capacity costs for the quarter were DKK 238m (DKK 220m), corresponding to an 8% increase, inclusive of operating expenses in Invendo and more sales resources in the USA. For the half-year, capacity costs were up 9%.
- EBIT for the quarter was DKK 156m (DKK 121m), corresponding to an EBIT margin of 24.0% (19.7%), and for the half-year DKK 247m (DKK 186m) and 20.5% (16.5%), thus equating to a 4.0 percentage point increase in EBIT margin both for the quarter and for the half-year.
- Net working capital relative to revenue has been improved and now accounts for 22% (23%) of revenue over a rolling 12-month period.
- Free cash flows before acquisitions of enterprises totalled DKK 22m (DKK 51m) for the quarter, and DKK 58m (DKK 94m) for the half-year. The lower free cash flows are due, among other things, to increased investments, including investments in Invendo.
- Based on the good results for Q2, the outlook for organic growth in local currencies for 2017/18 is raised from 'approx. 13%' to 'approx. 14-15%'. The outlook for EBIT margin and free cash flows is maintained.
A conference call is being held today, 7 May 2018, at 11.00 (CET). Please call the following number five minutes before the start of the conference: +45 3544 5580. The conference can be followed via www.ambu.com/webcastQ22018 and is held in English. The presentation can be downloaded immediately before the conference call via the same link.
Contact
Lars Marcher, President & CEO, tel. +45 5136 2490, email: lm@ambu.com
Ambu A/S
Baltorpbakken 13
DK-2750 Ballerup
Tel.: +45 7225 2000
CVR no.: 63 64 49 19
www.ambu.com