Ambu realised organic growth of 14% in Q2 and an increase in earnings of 25%, resulting in an EBIT margin of 24.8%. Organic growth of 15% was posted for H1.
"Overall, this was Ambu's best-ever quarter. Growth of 21% in Danish kroner was realised, while earnings are 25% higher than for the prior-year quarter. At the end of March, we launched a new single-use endoscope for ENT procedures in Europe, and we expect to launch the products in the US market before the summer. Total sales of endoscopes are seeing continued growth and increased by 37,000 units in Q2, resulting in total sales of 182,000 units. We are confident that total sales of at least 750,000 endoscopes will be achieved by the end of the year. All in all, Q2 was a quarter of many successes, and we are up to speed on all important parameters before the start of H2," says President & CEO Lars Marcher.
Highlights
- Revenue of DKK 785m (DKK 651 m) was posted for Q2 based on organic growth of 14% in local currencies and 21% in Danish kroner. Organic growth of 15%, or 20% in Danish kroner, was realised in H1. The difference between organic growth and growth in Danish kroner is due to the strengthened USD/DKK exchange rate as well as the recognition of GPO fees in accordance with the accounting standard relative to the same quarter last year.
- In Q2, Visualization contributed organic growth of 27%, Anaesthesia contributed 5%, and PMD (Patient Monitoring & Diagnostics) delivered growth of 10%. For H1, organic growth rates were 33% for Visualization, 6% for Anaesthesia and 6% for PMD.
- For the quarter, organic growth of 16% was realised in North America, 9% in Europe and 24% in the Rest of the world. For H1, North America contributed 18%, Europe 10% and the Rest of the world also 18%.
- Sales of endoscopes reached 182,000 units for the quarter and 331,000 units for H1. Sales volumes were thus up 26% and 33%, respectively, compared to last year.
- Gross margin for the quarter was 60.1% (60.5%). The 0.4 percentage point reduction is attributable to the renegotiation of a GPO agreement concerning breathing circuits and facemasks in the USA, expected marginal price changes in the Anaesthesia and PMD business areas as well as costs incidental to the start-up of production of the new endoscopes. Within Visualization, we are still seeing very stable prices and no significant changes in pricing. The gross margin for the half-year was 60.0% (59.4%).
- Capacity costs for the quarter totalled DKK 277m (DKK 238m), corresponding to a 16% increase. Capacity costs for the half-year were up 19%, reflecting investments made in the sales organisation in recent quarters as well as the recognition of GPO fees.
- The rate of cost was 35% (37%) for the quarter and 39% (39%) for H1.
- EBIT for the quarter was DKK 195m (DKK 156m) with an EBIT margin of 24.8% (24.0%), while the figures for the half-year were DKK 307m (DKK 247m) and 21.3% (20.5%).
- The working capital to revenue ratio is 25% (22%) based on rolling 12-month revenue due to increased investments in inventories as well as an increase in trade receivables.
- Free cash flows before acquisitions of enterprises totalled DKK 11m (DKK 22m), and for the half-year DKK 56m (DKK 58m).
- In Q2, Ambu reached an agreement in principle to settle a dispute with US authorities concerning compliance with laws and regulations governing sales to US government institutions. Provisions had already been made for the USD 3.3m settlement, and the settlement will thus not impact earnings for the year.
- The outlook for the full year announced in the interim report for Q1 2018/19 on 31 January 2019 is maintained:
- Organic growth in local currencies of approx. 15-16%
- EBIT margin of approx. 22-24%
- Free cash flows of approx. DKK 400-475m.
A conference call is being held today, 1 May 2019, at 10.30 (CET). The conference is held in English and can be followed online at www.ambu.com/webcastQ22019. The presentation can be downloaded immediately before the conference call via the same link. In order to be able to ask questions during the conference call, please call 5 minutes before the start on tel. + 45 3544 5577 and enter the following access code: 33686748#.
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