In Q3, Ambu has achieved solid organic growth of 10% and an EBIT margin before special items of 20.1%. The pipeline has been advanced, US approval of ENT scopes secured, and Ambu is on plan for future launch of the duodenoscope, the cystoscope and next generation aView™ monitor. In terms of commercial infrastructure, Ambu has decided to further invest in and strengthen its largest market by moving to a 100% direct sales organization for pulmonary endoscopy in the US. Financial guidance is revised.
“We have a unique position with our pipeline of Visualization products, and we believe there is an untapped potential to be released by further investments in a direct sales force. Therefore, we have decided to go 100% direct with our aScope products on the US market. We believe that in the years to come, our direct sales force will be able to maximise our revenue growth and our entrance into ENT and urology will benefit from having full control of the sales force. With this change, we will build the largest single-use direct organisation in our most important market globally creating a competitive advantage for Ambu. Our expansion is well under way and will be effective during H1 2019/20. As a result, our full-year guidance for 2018/19 and 2019/20 is changed. In line with our communication in June, we are committed to create significant value for our shareholders in the long-term through strategic investments,” says CEO Juan Jose Gonzalez.
Highlights for the quarter – Investing for the future
- For Q3, revenue totalled DKK 773m (DKK 673m), with organic growth of 10% and reported growth of 15%. The gap between organic growth and reported growth is due to the strengthened USD/DKK exchange rate, and recognition of GPO fees in accordance with the accounting standard relative to the same quarter last year.
- In Q3, Visualization contributed organic growth of 30%, Anaesthesia was flat, and PMD (Patient Monitoring & Diagnostics) delivered growth of 2%.
- Organic growth of 15% was realised in North America, 5% in Europe and 9% in the Rest of the world.
- Sales of single-use endoscopes in Q3 totalled 194,000 units, up 33% relative to Q3 last year. Year to date, sales of endoscopes thus totals 525,000 units.
- Since 2015, Ambu and Tri-anim Health Services, a leading US specialty distributor, have been in partnership to make Ambu’s single-use bronchoscopes the market leader. Today, Tri-anim covers 40% of Ambu’s revenue from sales of aScope™ products within pulmonary endoscopy in the US market. As part of the ongoing initiative to ex-pand our direct sales force, Ambu and Tri-anim have mutually agreed to fully transition the sales of aScope™ products to Ambu and the agreement has effect from 1 October 2019. We are confident that with our pipeline of new endoscope products in markets including ENT and urology, we will be able to maximise revenue growth and cross-sales effects by going direct. This is an attractive investment for Ambu as transition effects will be outweighed by higher long-term growth.
Furthermore, pricing policies towards distributors in the US will be changed with the purpose of optimizing prices. These important investments will have a one-off effect in Q4 and will cause significant changes to the guidance for the full year 2018/19 and 2019/20 and to the expected number of endoscopes sold.
A conference call is being held today, 22 August 2019, at 10.00 (CEST). The conference will be held in English and can be followed online at www.ambu.com/webcastQ32019.
You can download the entire Q3 company announcement (pdf).