Ambu (AMBU) Q3 23/24 earnings summary

Executive summary

• Achieved 15% organic revenue growth and 12.9% EBIT margin before special items in Q3 2023/24, driven by strong Endoscopy Solutions and Anaesthesia & Patient Monitoring, with total revenue of DKK 1.38 billion.

• Endoscopy Solutions segment grew 18% in Q3 and 21.6% for the first nine months, now representing 59% of total revenue.

• Anaesthesia & Patient Monitoring grew 10.9% in Q3, benefiting from price increases and stable demand.

• Two new product approvals: aScope 5 Uretero and aScope Duodeno 2, both now approved in the US and Europe.

• Sustainability initiatives include a 10% reduction in CO2 per ton of manufacturing and rollout of bioplastic materials in product lines.

Financial highlights

• Q3 revenue was DKK 1,383 million, up 15.7% year-over-year; year-to-date revenue reached DKK 4,004 million.

• Gross margin improved to 60.2% in Q3, up from 56.2% last year, driven by product mix, price increases, and manufacturing scalability.

• EBIT margin before special items was 12.9% in Q3; EBITDA margin before special items reached 20.8%.

• Free cash flow for Q3 was DKK 163 million; year-to-date free cash flow reached DKK 426 million.

• Net working capital ratio reduced to 19% of revenue; net interest-bearing debt reduced to DKK 78 million.

Outlook and guidance

• Upgraded full-year guidance: 12-14% organic revenue growth, 11-13% EBIT margin before special items, and free cash flow above DKK 450 million.

• Endoscopy Solutions organic growth expected to exceed 18% for the year.

• Margin expansion to continue, with OpEx scalability as the main driver toward the long-term 20% EBIT margin target.

• Strategic exits from 40 countries and product discontinuations may negatively impact revenue by 1.0-1.5%.

• Focus remains on profitable growth, with selective investments in commercial and R&D capabilities.