Ambu delivered organic revenue growth of 39% in Q1. The demand for single-use endoscopes is positively influenced by COVID-19. Commercial launch of aScope™ Duodeno is on track, and clinical trial has commenced. Ambu intends to raise approx. DKK 1.3bn of capital to ensure strategic and operational flexibility. Full-year outlook is maintained.
“We reached revenue of one billion DKK this quarter for the first time in Ambu’s history. This milestone is the result of the dedication and focus of our organization in the midst of the COVID-19 pandemic. We’re leading the creation of the single-use endoscopy market to help hospitals take care of patients without risk of cross-contamination. Our modular R&D engine is helping us deliver technologically advanced products with an attractive economic offering across all endoscopy segments,” said CEO Juan Jose Gonzalez. “We have a promising future and are now strengthening our balance sheet to maintain flexibility as we move forward.”
Highlights for the quarter
Comparative figures for Q1 2019/20 are stated in brackets.
Revenue for Q1 was DKK 1,013m (DKK 760m) based on organic growth of 39% (14%). Sales in North America grew organically by 13%, while we saw organic growth in Europe of 79% and Rest of World of 9%.
Visualization achieved organic revenue growth of 101% (24%) with strong performance across all regions. North America grew organically by 35%, Europe by 194% and Rest of World by 35%.
The Visualization growth in Europe benefited from special orders for single-use bronchoscopes to the National Health Service (NHS) in England as part of their COVID-19 strategy to treat patients and build safety stocks. These orders were expected and contributed approx. 40 percentage points of the 101% organic growth for Visualization in Q1.
Anaesthesia grew 5% (8%), and Patient Monitoring & Diagnostics (PMD) declined by -3% (10%). The recovery that we have seen since second half of 2019/20 continued in Q1, but especially PMD was still negatively impacted by COVID-19.
The special orders to the NHS had an impact equal to 16 percentage points to the Q1 organic growth of 39%. Excluding these orders, organic growth in Q1 would have been 23%.
Sales of single-use endoscopes reached 370,000 units for the quarter. Sales volumes were thus up 106% relative to last year.
We secured the clearance of our aScope™ 4 Cysto in Europe and Japan and started its commercialization in these markets. As regards the aScope™ Duodeno, the commercial launch in North America and the 550-patient clinical study have started.
Gross margin for the quarter was 65.4% (60.1%).
Capacity costs for the quarter totaled DKK 514m (DKK 364m), corresponding to an increase of 41%. The increase reflects the investment in commercial infrastructure and innovation activities.
EBIT before special items for the quarter was DKK 148m (DKK 93m) with an EBIT margin before special items of 14.6% (12.2%).
Net working capital to revenue ratio was 17% (20%) by the end of the quarter based on rolling 12-month revenue.
Free cash flow before acquisitions totaled DKK 2m (DKK -190m) for the quarter.
Total net interest-bearing debt (NIBD) was DKK 1,701m (DKK 1,358m), corresponding to a leverage of 2.5 (2.3).
The EUR 40m milestone payment associated with FDA clearance of the duodenoscope was paid in Q1.
To ensure strategic and operational flexibility, Ambu intends to raise capital in an offering of new Class B shares and existing treasury shares through an accelerated bookbuilding process. The offering is expected to generate proceeds of approx. DKK 1.3bn, which will be used for general corporate purposes, including repayment of debt in order to reduce the expected leverage by end of the financial year 2020/21 from 2.7 to 1.0. Please see company announcement no. 6 for reference.
The outlook for the 2020/21 financial year as announced in the annual report on 11 November 2020 is unchanged and as follows:
Organic growth in the range of 17-20%.
EBIT margin before special items in the range of 11-12%
Sales of single-use endoscopes of 1.3-1.4 million units
A conference call is held today, Wednesday 27 January 2021, at 10.00 (CET). The conference is broadcast live via www.ambu.com/webcastQ12021. The presentation can be downloaded immediately before the conference call via the same link. 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 (USA), and enter the following access code: 99186212#.
Michael Højgaard, CFO, firstname.lastname@example.org / +45 4030 4349
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