Ambu A/S : launches ambitious strategy towards 2020 (no. 1)

After exceeding the goals of the 2017 strategy, Ambu sets new goals and aims to double revenue in just three years. The key elements are a stable core business and disruptive single-use endoscopy technology.

In 2013, Ambu set ambitious goals. Under the heading "Climbing New Heights 2017", Ambu set out to reach a DKK 2 billion revenue, increase earnings significantly and create strong free cash flows. The topline goal was reached a year ahead of time and with the guidance for 2016/17, the completion continues to look positive. Ambu will introduce the next chapter in its business strategy at a capital market day today in London.

"We have been on a four-year journey that has transformed Ambu," says CEO Lars Marcher. "Today, 25% of our revenue come from products that we did not have before 2013. That, to me, is testament to the power of innovation. We have proven that our new solutions are relevant to hospitals around the globe. Now, we look towards 2020. It took 75 years to reach 1 billion. Four years to reach 2 billion. Now, we will try to reach 5 billion in three years. It's a stretch, but we aim for the Big Five."

Ambu's new strategy is called "Big Five 2020" and targets stable core business growing more than the underlying market and an accelleration of growth through rapid expansion in the markets for Ambu's single-use visualisation solutions and acquisitions of companies that support Ambu's strategic direction.

At the capital market day Ambu will provide a long term guidance towards 2020 as well as a short term outlook for the financial year 2017/18. In addition, Ambu repeats its guidance for 2016/17 as it was announced on August 23, 2017.

Long term guidance towards 2020
Towards 2020 Ambu plans to grow organically by 13-15% annually and expand the EBIT-margin by more than 5%-pts and thereby generate an EBIT margin in the level of 24-25% in 2020.

As for the free cash flows, Ambu expects to grow relative to revenue by accumulated 3%-pts to 18% in 2020 excluding impact from non-recurring investments in buildings.

Guidance for the financial year 2017/18 that began on October 1, 2017
For the financial year 2017/18, Ambu expects an organic growth rate in the level of 13%, an EBIT-margin in the interval 20-21% and a free cash flow generation in the interval DKK 275-300m equal to 11% of revenue. The free cash flow includes investments in buildings of DKK 75m that equals approx. 3% of revenue.

Guidance for the financial year 2016/17 that ended on September 30, 2017
The outlook for the financial year 2016/17 remains unchanged compared to the latest guidance provided on August 23, 2017. This is an organic growth of approx. 14%, an EBIT-margin of approx. 19% and free cash flows of approx. DKK 300m equal to 13% of revenue. The free cash flow includes investments in buildings of DKK 40 that equals approx. 2% of revenue.