Company Announcement no. 3-2009/10

Annual report 2008/09 – solid development in revenue and earnings 

Ambu achieved satisfactory results in 2008/09. Revenue as well as earnings and cash flow developed positively compared to 2007/08. Growth was higher than market growth, and Ambu has won market share. Revenue was up 12%, or 10% measured in local currencies, corresponding to DKK 877m, EBIT before special items was up 17.6% at DKK 110m and cash flow rose to DKK 58m against DKK 36m last year. Net profit for the year was DKK 55.8m against DKK 50.0m in 2007/08. On 1 October 2009, Ambu presented its new four-year strategy, GPS Four. The objectives of GPS Four are clear: Ambu will further intensify its product development and develop considerably more brand new products, while at the same time strengthening sales and increasing efficiency.
 

“In a very difficult year marked by the global financial crisis, we are pleased that we have achieved solid growth, won market share, posted satisfactory earnings and also improved our cash flow. We have reorganised much of our organisation, invested further in robust IT systems, streamlined production and the supply chain and expanded our sales organisation. During the last part of the financial year we were involved in a very comprehensive strategy process, and at the start of the new financial year, we presented our new strategy, GPS Four. The strategy is to strengthen our position as an innovative company, contribute to higher revenue and more efficient operations as well as ensuring an increasing EBIT margin. We will ensure an even better use of our international experience and infrastructure in production, development and sales, thereby building a stronger Ambu. Our ambition is to make Ambu a global leader in innovative single-use products for hospitals and rescue services,” says President & CEO Lars Marcher.
 

• Revenue for 2008/09 totalled DKK 876.9m, representing a 12% increase relative to the previous financial year. In local currencies, growth totalled 10%.
• Growth was considerably higher than market growth and was generated by a broad range of products and markets.
• The EBIT margin was 12.6% or DKK 110.3m before special items, up 17.6% relative to 2007/08. The improved EBIT margin is primarily attributable to higher revenue and improved cost-effectiveness.
• After special items (which comprise legal fees of DKK 24.2m incidental to pending patent cases and non-recurring costs of DKK 9.8m incidental to organisational changes) the EBIT margin was DKK 76.4m against DKK 86.4m in 2007/08.
• Profit for the year totalled DKK 55.8m against DKK 50.0m in 2007/08.
• Free cash flow before acquisitions amounted to DKK 58.0m against DKK 35.6m the year before.
• The Board of Directors proposes that a dividend be declared of DKK 1.5 per share for FY 2008/09, amounting to 32% of the profit for the year.

Outlook for 2009/10

The global crisis will continue to have a considerable impact on the health care sector, leading to intensified competition and lower-than-normal market growth. Ambu is set to continue to grow faster than the market and continue winning market share.

In the coming financial year, Ambu will focus on continuing the company’s positive developments and on ensuring the planned strengthening of Ambu. Focus will therefore be on improving the conditions for creating innovation, optimising and intensifying sales and streamlining production and systems. The objective is higher revenue and earnings and a solid cash flow.

• In FY 2009/10, consolidated revenue is expected to be in the region of DKK 900-925m, corresponding to an increase of 5-6% measured in local currencies. The outlook is based on a USD exchange rate of 500 and a GBP exchange rate of 840.
• In 2009/10, the EBIT margin is expected to be in the region of 12-12.5% (before special items for legal fees in connection with the pending patent cases). Profit before tax is expected to be in the region of 11-11.5% of revenue, or about DKK 100m.
• Legal fees are expected to be significantly lower in 2009/10.
• In 2009/10, a free cash flow of up to DKK 60m is expected, with investments before acquisitions amounting to approx. 7-8% of revenue.

The annual report 2008/09 and GPS Four Business Strategy are attached to the present release for NASDAQ OMX Copenhagen. The annual report and the business strategy can also be downloaded here.

This company announcement can be downloaded as a PDF document here.

Conference call and webcast on this announcement will be held in Danish on Wednesday, 25 November 2009, at 11 am Danish time. To participate, please call +45 3271 4767 five minutes before the start of the conference. The conference can be followed via the link http://webcast.zoomvision.se/denmark/clients/ambu/091125 or on the Ambu website www.ambu.com. The conference will subsequently be made available on the Ambu website.

The company’s annual general meeting will be held on 16 December 2009 at 4 pm at The Black Diamond, Søren Kierkegaards Plads 1, 1016 Copenhagen K, Denmark.

Further information:

Lars Marcher, President & CEO, tel. +45 5136 2490, email: lm@ambu.com
 

Financial highlights

View the financial highlights here.

Ambu develops, produces and markets diagnostic and life-supporting devices for hospitals and rescue services. Ambu has three business areas: Airway Management, Patient Monitoring & Diagnostics and Emergency Care. The primary products are ventilation products for artificial respiration, electrodes for ECG tests and neurophysiological tests, and manikins for first aid training.

Ambu’s products are sold worldwide. Exports account for 98% of sales, and sales are handled via Ambu’s foreign subsidiaries or via distributors. Ambu has approximately 1,600 employees, of whom 300 work in Denmark and 1,300 abroad.