Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ambu AS (AMBFF, Financial) reported a strong start to the financial year with a 19.5% organic revenue growth and an EBIT margin of 16.1%.
- The Endoscopy Solutions segment saw significant growth, with Pulmonology increasing by 17.7% and Urology, ENT, and GI combined growing by 23.9%.
- The company announced the registration of a new airway management solution, SureSight, which is expected to strengthen their leadership in the market.
- Ambu AS (AMBFF) upgraded its financial guidance for the year, now expecting 11% to 14% organic revenue growth and a 13% to 15% EBIT margin.
- The company continues to focus on innovation and portfolio expansion, particularly in Urology with the launch of aScope 5 Uretero and aScope 5 Cysto HD.
Negative Points
- Free cash flow for the quarter was DKK60 million, slightly lower than previous quarters due to increased inventories in preparation for new product launches.
- Despite strong growth, the company noted fluctuations in quarterly growth rates, particularly in the Pulmonology segment, which may not sustain the 17% growth level in future quarters.
- The EBIT margin, while strong, is influenced by currency effects, and there is an expectation of lower offsetting currency effects in the future.
- The company faces competition, particularly in the Urology segment, from lower-priced Chinese players, which could impact pricing strategies.
- There is a cautious outlook on the Anesthesia and Patient Monitoring segment, with potential volume impacts as customers test alternatives due to previous price increases.
Q & A Highlights
Q: Could you please quantify the tailwind from the pulmonology order in Q1? Should we expect a deceleration in Q2, and what are the growth expectations for the rest of the year?
A: Britt Meelby Jensen, CEO: Pulmonology has shown fluctuations quarter-over-quarter, and we provide a rolling 12-month number for a clearer picture. We expect around double-digit growth for the year, but not a continuation of the 17% growth seen in Q1. Typically, the first half of the financial year has higher revenue due to flu impacts.
Q: How should we think about the growth trajectory of the Anesthesia and Patient Monitoring business? Is there upside risk to your 2% to 4% midterm sales growth target?
A: Britt Meelby Jensen, CEO: We were cautious about customer reactions to price increases, but have seen strong customer loyalty and competitive manufacturing costs. We expect growth to come down from current levels but not as low as initially guided. We revised our guidance to mid- to high single-digit growth for this fiscal year.
Q: The run rate of Urology, ENT, and GI has decelerated for five quarters. When do you expect stabilization, and at what level?
A: Britt Meelby Jensen, CEO: Growth has been driven by aScope 4 Cysto and aScope 4 Rhinolaryngo, launched five and six years ago. We expect some deceleration as these franchises mature but remain confident in strong growth due to new product launches like aScope 5 Uretero and aScope 5 Cysto HD.
Q: Could you comment on the initial response to your ureteroscope launch?
A: Britt Meelby Jensen, CEO: The response has been strong, with clear preference for our image quality and functionality. We are confident in its future uptake, although it's still a lower part of overall Urology revenue. We expect it to become an important product in our portfolio.
Q: Is there any unusual purchasing pattern or reliance on large accounts in Anesthesia and Patient Monitoring?
A: Henrik Bender, CFO: We have a few larger accounts, but they represent a smaller fraction of global sales. We are not dependent on single large customers. Some positive competitive developments have helped volume, but we also see customers testing alternatives due to price increases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
