Annual Report 2007/08 presentation, 26 November
2008
By Lars Marcher, CEO, and Anders Arvai, CFO
Agenda

Developments in 2007/08

More ambitious strategy

Outlook for 2008/09
26 November 2008
2
Highlights







2007/08 a satisfactory year
Solid growth in revenue and operating
profit
Growth in revenue at a higher level
Growth in virtually all markets and for
the entire product programme
Ambu wins market share
Activities launched earlier within
production, product development and
sales are having the desired effect
Economic slowdown in the world
economy has not affected Ambu so far
26 November 2008
3
Revenue




Revenue of DKK 784m for FY
2007/07 – up 10% (15%
when reported in local
currencies)
USA back on track
Streamlining of sales efforts
beginning to bear fruit
Negative effect of exchange
rates of approx. DKK 36m
800
600
400
200
0
03/04
26 November 2008
04/05
05/06
06/07
07/08
4
Revenue by business area
DKKm
2006/07
2007/08
Respiratory
Care
271.2
317.1
Cardiology
266.2
276.9
Neurology
69.4
79.0
CPR Training
61.3
63.6
Immobilization
46.9
47.8
715.0
784.4
Total
Respiratory Care

Double-digit growth
Cardiology

figures in all important
markets – exceeding


Growth at a higher level –
Respiratory
Care
Cardiology
Neurology
CPR Training
Immobilization
Neurology

Double-digit growth
refocusing of sales efforts
figures in several
Particularly strong growth
important markets
market growth
in the USA, Spain and
Broadly founded growth
Italy
attracting considerable
Electrode production
interest
– strongest growth

within laryngeal masks
relocated from Ølstykke to
and ventilation bags
Malaysia
26 November 2008


Improved needles
Still attractive growth
potential
5
Revenue by geographical region
DKKm
2006/07
2007/08
Europe
467.4
511.4
North America
182.5
211.9
65.1
61.1
715.0
784.4
Rest of the
world
Total
Europe


Europe
North America
Rest of the world
USA
Growth exceeds market growth

Solid growth in core markets,
except France


Focused sales efforts are working

Potential for continued solid growth
26 November 2008

Growth at a high level – 31%
increase when reported in USD
Double-digit growth within four out
of five business areas
Focused sales efforts for key
products and targeting a broad
spectrum of customers, including
GPOs
6
Operating profit (EBIT)





EBIT of DKK 86m against DKK 69m
the year before
Improvement is primarily attributable
to higher revenue and higher gross
profit margin
100
90
80
70
60
Changes in exchange rates: negative
impact on EBIT of approx. DKK 5m
50
EBIT margin of 11.0% against 9.7%
the year before
30
Exclusive of extraordinary legal fees,
the EBIT margin was 12%
10
26 November 2008
40
20
0
03/04
04/05
05/06
06/07
07/08
7
Slightly improved cash flow
DKKm
2006/07
2007/08
Cash flows from operating activities
89.5
84.5
Cash flows from investing activities:
(56.0)
(48.9)
33.4
35.6
Free cash flow

The improvement is primarily attributable to a higher operating profit and
lower investments
26 November 2008
8
Agenda

Developments in 2007/08

More ambitious strategy

Outlook for 2008/09
26 November 2008
9
Ambu heading for new goals
Activities in the next two years
Product
development
The launch of significantly more new and differentiated
products than has been the case so far
Acquisitions
The acquisition of new products and activities
Markets and
products
Increased focus on growing markets and product areas
Sales
Streamlining
26 November 2008
Enlarging the sales force and further focusing
of sales efforts
General streamlining of important areas
10
Several new products





The ability to develop new products is
decisive to ensuring higher growth
Further focusing and intensification of
development efforts
Focus on products developed by Ambu as
well as acquired products
Several new products in the pipeline will
contribute to revenue from 2008/09, but
primarily in 2009/10
Primary focus on
differentiated single-use
products for:
Hospitals
Rescue services
Outpatient surgery centres
Identifying several new product areas – one
being sleep diagnostics
26 November 2008
11
More efforts going into making acquisitions




Acquisitions to stimulate growth
Business areas:
Continuous scanning of the market – focus is on
the acquisition of small companies and product
lines as well as large companies
What we are finding is that prices are moving
towards more realistic levels
The criteria for making acquisitions remain the
same – consolidation and synergies
26 November 2008
12
Sleep diagnostics – agreement with Sleepmate




Conclusion of conditional agreement concerning the purchase of activities from
Sleepmate Technologies Inc. in November
2008

Sensors used to examine obstructive
sleep apnoea

Sleepmate a leading player in the US
market
Some of Ambu’s products are already used
within sleep diagnostics. Through acquisitions,
a full product programme of sensors and
electrodes can be offered
Transaction expected to be finalised before
the end of the year
Price: USD 6.9m
Sleep diagnostics –
growth drivers
Market growth of 15%
Only a small percentage of
the estimated 20 million
people suffering from sleep
apnoea have been diagnosed
Obesity epidemic causes
severe increase in sleep
disorders
High growth expected in
Europe, which is an
underdeveloped market
compared with USA
Shift to single-use products
26 November 2008
13
Focus on growth markets and
bigger sales force


Further streamlining of the sales efforts in
Europe and the USA and taking on more
salespeople
Increased efforts in selected markets with
high growth and developed health systems


China – establishment of own sales
offices
Selected countries in Eastern Europe –
expansion of distributor networks
26 November 2008
14
New production strategy





Production will be based at the existing factories in Denmark, China and
Malaysia in the coming four years
Future production capacity expansions will be implemented in Malaysia
– the factory in Malaysia will be extended by approx. 8,000 square metres
Production in China will be maintained close to the current level
Production in Denmark will be reduced – production of the Blue Sensor
products will be moved to Malaysia. The move will start once the extension
of the factory in Malaysia has been completed in the first half of 2010
Further streamlining of existing factories
26 November 2008
15
General streamlining of key areas




Sales and marketing – further intensified
efforts
Development – including strengthening of
search team
Supply chain – including the establishment
of strategic purchasing function,
improvement of forecasting system and
better inventory management
Production – including improved
management and higher efficiency and
capacity utilisation at factories
26 November 2008
16
Financial objectives



Growth at significantly higher level than
market growth
Increase in EBIT margin – no increase in
2008/09, however, due to increase in sales
force
Increase in cash flow – among other things
via working capital optimisation
26 November 2008
17
Agenda

Developments in 2007/08

More ambitious strategy

Outlook for 2008/09
26 November 2008
18
Outlook for 2008/09





Growth in revenue of approx. 8%,
corresponding to approx. DKK 850m
(USD: 550)
EBIT margin of approx 11-11.5%,
corresponding to approx. DKK 97m
Profit before tax of approx. 10-10.5% of
revenue, corresponding to approx. DKK 87m
Free cash flow of approx. DKK 50m
(with investments amounting to approx. 7%
of revenue)
No significant effect so far of lower economic
growth – recession may have a limited
impact on Ambu
26 November 2008
19
Gearing for higher profitable growth in 2008/09





Launch of new products – more in the
pipeline
Acquisition of new products and activities –
identification of opportunities
Increased sales efforts in both growing
markets and product areas – establishment
of sales offices in China and expansion of
distribution networks in selected markets in
Eastern Europe
Further focusing of sales efforts and
expansion of sales force – taking on more
salespeople in both Europe and the USA
Continued optimisation of production – e.g.
commencement of extension of the factory
in Malaysia
26 November 2008
20
Questions
For further information, please visit www.ambu.com
For further information, please contact:
Lars Marcher, CEO, lm@ambu.com or +45 5136 2490
Anders Arvai, CFO, aa@ambu.com or +45 7225 2000
26 November 2008
22