Shares in Danish endoscope maker Ambu (CPH:AMBU-B) took a dive today in Copenhagen after it spiked its deal with a U.S. distributor and slashed its outlook on the rest of the year.
The Ballerup, Denmark-based company said it’s planning to cut ties with Tri-anim Health Services on the U.S. sales of its aScope pulmonary endoscopes and move to a direct sales model here. The distributor accounts for about 40% of aScope revenues, Ambu said.
That means sales of roughly 600,000 endoscopes, not the 750,000 it had expected for fiscal 2019. As a result, fiscal 2019 organic sales growth is now pegged at 4% to 5%, down from 14% to 15% previously, the company said. Ambu is also slated to pony up $20 million to Tri-anim during fiscal Q4 and Q1 2020 and buy back some 95,000 aScopes, it said.
“We are confident that with our pipeline of new endoscope products in markets, including [ear, nose & throat] and urology, we will be able to maximize 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,” CEO Juan Jose Gonzalez said in prepared remarks.
Ambu also reported fiscal third quarter results, posting profits of DKK216 million, or DKK0.87, on sales of DKK773 million, amounting to a bottom-line gain of 92.9% on sales growth of 14.9% compared with Q3 2018. Although analyts were looking for sales of DKK770 million, AMBU shares closed down -15.5% at DKK93.64 in Copenhagen.
($1 = DKK6.72360)
