Ambu A/S
CSE:AMBU B
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Ambu A/S
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[Audio Gap]and welcome to the Ambu A/S Report for Q3 2017-2018. Today, I'm pleased to present Lars Marcher, CEO. [Operator Instructions]Lars, please begin.
Thank you very much, operator, and welcome to the conference call and announcement of Ambu's Third Quarter 2017 and '18. With me today, I also have our CFO, Michael Højgaard. And on Slide 3 you can see the agenda we have chosen for the call. I will start out with the key highlights and key figures from Q3. Then I'll move into an update on our business, in particular our Visualisation agenda. Michael will take you through the financials. And I will finally update you on our outlook for the year. And as usual, there is an opportunity for you to ask questions before we conclude the conference call.So let's take a look at the Q3 highlights on Slide #4. Q3 has been a solid quarter in Ambu with high growth and improved earnings. We post organic growth of 17%. The earnings are strong and the EBIT margin for the quarter is at 22.4%. This include all cap costs for Invendo on full scale up manning of sales team in U.S. that we did not have at the same time last year. The majority of the growth comes from our Visualisation business, but the core business is also in good shape with an organic growth of 6%. Core business is the combination of our Anaesthesia segment and PMD, Patient Monitoring & Diagnostics. The endoscopy sales are up 54% measured in units compared to Q3 last year. In absolute numbers, this is a sales of 146,000 single-use endoscopies product during the quarter. This led to the fact that we raised our target for number of endoscope units sold for the full year. Our projects within gastroendoscopy are on schedule, and I'll expand upon that in a minute. On the back of a successful quarter, we specify that full year outlook for the organic growth and adjust the outlook for EBIT margin upwards.Now let's turn to Slide #5 and have a look at the key figures for our quarter. We had a good set of Q3 numbers on our hands and we continue to see strong operational leverage in our business. In other words, our operation is running smoothly from innovation and manufacturing to supply chain and sales. We are investing heavily in the expansion of our sales force and in product development. These investments impact our growth positively but also affect our expenditures. The organic growth of 17% is an increase of 2 percentage point from Q2 on top of the already strong Q3 last year. The growth give us revenue of DKK 673 million, up with DKK 72 million compared to the same quarter of last year. The gross margin was 59.7% for the quarter compared to 57.1% in Q3 last year, an improvement of 2.6 percentage points. On the earnings, we also report solid numbers with an EBIT margin of 22.4% for the quarter. This is an increase of 0.8% over Q3 last year. EBIT for the quarter was DKK 151 million, which is DKK 24 million more than the same quarter last year. Year-to-date EBIT was thereafter DKK 398 million with an EBIT margin of 21.2%, corresponding to an increase of 2.9 percentage points. In the figures, we have included more than DKK 20 million coming from full cap cost absorption of Invendo and cost from almost doubling our sales force in U.S. All in all, the third quarter of Big Five 2020 strategy show solid numbers on top and on bottom line. So now let's look at how the Q3 growth is split on the business areas. We're now on Slide #6. In Q3, Patient Monitoring & Diagnostics sales were up 2%, totaling a number of DKK 211 million in revenue, which is 32% of the total Q2 revenue year-to-date. PMD is 3% growth and we expect the full year growth in PMD to be between 3% and 4% as we have guided from the beginning of the year. In Q3, we concluded an agreement with expanding our partnership with Medico Electrodes International, which is a longstanding partner and manufacturer of electrodes in India. The agreement extends Ambu's range of cardiology electrodes for the purpose of better being able to offer the combination of functionality, price and quality, which customer are demanding. Sales in Visualisation increased by 47%, reaching DKK 218 million and therefore accounting for 32% of our Q3 revenue. Year-to-date growth is 48%. Our growth in Anaesthesia was 10% with a revenue of DKK 244 million in Q3, which is 36% share of the Q3 revenue. Year-to-date growth in Anaesthesia is 6%, so it is on the upper edge of the previous announced growth target of approximately 5% for the full year, a target that we maintain. The development of Q3 show a Visualisation business that continues to [ saw ] and a healthy core business comprises of strong growth in Anaesthesia and slightly below par growth in Patient Monitoring & Diagnostics.Let's turn to Slide #7 for a look at the geographical split of the core's revenue. The 2 largest market for medtech solutions are North America and Europe and it's evident that Ambu has a strong platform on both markets. Organic growth in the North American market was record 18% in Q3 as a result of solid execution from our sales team. We have more focus on the current hospitals and we can penetrate new ones even faster. Europe report growth of impressive 19%, driven by continued strong sales within Visualisation. The strong growth comes from all regions in Europe and we take serious market share away from our competitors in all markets. Growth in rest of the world was only 3% for the quarter. Patient Monitoring was strong in rest of world where Visualisation and Anaesthesia show relatively low growth. The rest of world growth is hampered by seasonal fluctuation in Middle East. And if you look isolated at Asia Pacific, then Q3 growth was 23% and in line with our expectations. I also expect that rest of world will be back on double-digit growth in Q4.Please turn to Slide #8 where I will give you a status on the endoscopy sales as an isolated item. The sales of our unique single-use endoscopy product continues to increase. In Q3, the volume growth is 54% corresponding to 146,000 units. Year-to-date, we have sold 395,000 scopes. On the basis of these figures, we expect to reach the level of 550,000 scopes by the end of the financial year. The aScope 4 Broncho received U.S. market clearance early this year and Q3 was the first full quarter where our latest single-use bronchoscopy product was available to hospitals in North America. For the sake of Ambu supply chain, the conversion from aScope 3 to aScope 4 is prioritizing -- or is prioritized according to a careful coordinated plan for the individual market. At the end of Q3, the conversion has almost been completed on the European markets, while U.S. will be completed -- converted at the beginning of the next financial year. In the rest of the world, the conversion will take place at the rate that we've obtained the necessary regulatory approvals.The competitive landscape of single-use endoscopy product has not changed in the sense that we do not meet any competitors in the field. We know that competition, namely Boston Scientific, are looking at single-use endoscopy, but Ambu remains the only significant supplier. When competitors eventually enter the area of single-use endoscopy, we believe that there will be plenty of space on the market for serious suppliers who can support the single-use movement and help hospitals by supplying truly scaled endoscope products for the benefits of the patients.We're now on Slide #9. The single-use mindset regarding endoscopy product is now established in more than 3,000 hospitals around the world and we are the only provider. We have increased our market share in our direct markets from 10% last year to 15% this year. In other words, out of our bronchoscopy, 15% are now performed with a single-use Ambu product. And the use is even more frequent in our most dedicated aScope accounts, where 1 out of 8 or more than 400 hospitals are today using our endoscopy products more than 90% of the procedures. We see both a strong growth in new accounts and an increased usage in our existing accounts. Compared to last year, large hospital with more than 200 beds now account for 85% of our sales versus 50% last year. They're all indications that Ambu is solving an important problem for hospitals and patients within bronchoscopy. However, our ambitious reach beyond bronchoscopy and into other clinical areas like ear, nose and throat, urology and GI is maintained.Let's go to Slide #10. As you may recall, we announced, in connection with the Q2 results, that Ambu has an ambition of developing a number of new single-use endoscopy product and expand our Visualisation business beyond the pulmonary area. The development of new single-use endoscopy product, for example, for gastro procedures is progressing as planned, as we are preparing for the production of the colonoscope at Ambu's factory in Malaysia. I anticipate commencement of operation in Q1 2018, '19, only a few months from now. I'll not go into further details at the moment, but at Ambu's Capital Market Day in October, we will provide a more thorough update on the endoscopy development.On Slide #11, here we’ll give you -- the word to Michael for a more in-depth view on our financial results. So over to you, Michael.
Thank you, Lars. We are now on Slide 12. In Q3, we have post a revenue of DKK 673 million and that represents an organic growth of 17% in local currencies and 12% in Danish kroner. The lower growth in Danish kroner is due to depreciation of the U.S. dollar versus Danish kroner by 8%. Our gross margin for the quarter ends at 59.7%, which is an increase of, what, 2.6% over Q3 last year. The improvement of the gross margin results from the increased scale created by revenue growth as regards to the factories' overhead and the fact that growth is being driven by Visualisation, which contribute to high margin than our core products in Anaesthesia and PMD. Our operating expenses increased by 18% and totaled DKK 251 million for the quarter compared to DKK 213 million last year. Capacity costs includes costs pertaining to the expansion of the sales organization in the U.S. as well as costs related to the development of the gastro by DKK 20 million or 3% of revenue.EBIT for Q3 was DKK 151 million versus DKK 130 million last year, with an EBIT margin of 22.4% compared to 21.6% last year. This corresponds to an increase by 0.8 percentage point and 16% in absolute value. The above-mentioned costs for the expansion of the sales in the U.S. and for the development of the gastrointestinal endoscopes has been absorbed into these numbers and the EBIT margin expansion would have been well above 3% without these. EBIT year-to-date was DKK 398 million with the margin of 21.2%. The impact of exchange rates on EBIT for this -- for the quarter and for the year-to-date was very limited. Financial items contained significant noncash items relating to Invendo with regards to the time value of the contingent payments as well as noncash exchange gains, where after the net financial impact for the quarter is very modest. Due to refinancing of the bond loan back in Q2, the cash financial costs going forward would be to the tune of DKK 5 million per quarter at the current level of debt. A net profit of DKK 113 million was posted for the quarter and of DKK 224 million for the year-to-date equivalent to 12% of revenue. In the U.S., tariffs on products imported from China was introduced in the beginning of July. Fortunately, the product range from Ambu's manufacturing site in China will not be impacted by this.Please turn to the next slide for our free cash flow and balance sheet. We're now on Slide 13. Cash flow from operating activities totaled DKK 181 million for the quarter and DKK 338 million year-to-date. This is an increase of 4 percentage point over last year to now 27% of revenueThe increased cash flows are attributable to a lower level of funds tied up in trade receivables and lower tax payments. Contrary to this, inventories are increasing, mainly as a consequence of the increased volumes and product implementation which has reduced cash flows. In Q3, total investment equaled DKK 78 million or 12% of revenue, of which 5 percentage points relates to investments in buildings in Malaysia and Denmark. The remaining 7% are mainly investments into product innovation, out of which 3/4 are related to our endoscopy pipeline.Free cash flow before acquisitions hereafter totaled DKK 103 million for Q3, equal to 15% of revenue and 20% when nonrecurring building investments are taken out. Year-to-date, free cash flow equals DKK 161 million equal to 12% of revenue excluding building investments. Net working capital ends at 22% of revenue by end of the quarter and is, by and large, unchanged but reflects the increased business activity. Acquisitions impact our cash flow in Q3 by DKK 75 million with regards to Invendo milestones, which was announced in March, but payable in April. Total net interest-bearing debt at the end of the quarter was DKK 1.4 billion corresponding to DKK 2.2 million of rolling 12-month EBITDA and unutilized credit facilities totaled DKK 1 billion. On February 1, a share purchase program was initiated in accordance with the safe harbor rules for the purpose of acquiring 3.8 million Class B shares in April. The share purchase program was completed on April 26 at an average price of DKK 128.With this short status, I hand the word back over to you, Lars.
Thank you very much, Michael. And this bring us to the outlook for the full year. Based on the result for Q3, the financial outlook for 2017, ‘18 is changed. The outlook for organic growth in local currency has changed from previously approximately 14% to 15% to a more precise, approximately 15%. While the EBIT margin is raised from previously approximately 20% to 21% to now approximately 21% to 22%. We maintain the free cash flow outlook to be at around DKK 300 million and therefore, the outlook for free cash flow is unchanged.So with the outlook in place, let me summarize the quarter on Slide #15. All in all, our business is moving forward at a solid pace, realizing strong organic growth, while also increasing earnings. The growth in our largest market, U.S. and Europe, is high and we display solid operational performance. In our business area, Visualisation, it continues the penetration and core business is well on track. If we look a bit further ahead, we can see that our Big Five 2020 strategy is moving along according to plan. We are working on the product developments to bring a full range of single-use endoscopy product to market by 2020, and the transfer of production from Germany to Malaysia is on plan, allowing us to start producing single-use colonoscopes in Malaysia by Q1 2018, '19.Before we go to your questions, I would like to announce a Capital Market Day to be held on October 4 in Copenhagen and you can see more about that on Slide #16. There we would like to welcome our financial analysts and institutional investors to our headquarters in Ballerup, Denmark for a deep dive into the Ambu business, including an update on our financial guidance and outline of the area of single-use endoscopy and further in check into our growing to market activities in North America. You can sign up at our website on the link that's provided in this slide.I will now pass the word over to you operator for opening the question-and-answering session. Over to you, operator.
[Operation Instructions] Our first question comes from the line of Thomas Bowers of Danske Bank.
A couple of questions from me. Actually I'd like to start off with the rest of the world. I'm just wondering a little bit on your growth in Visualisation, it's 13%. I'm just wondering if it just reflects on some saturation in Australia. I guess, that's clearly the lion's share of Visualisation right now. And then also, when should we actually expect to see some impact from the aScope launch in China? And then secondly, could you maybe just comment on the current gross margins for the aScope Regular. I have impression that you are close to now 80% and that also available with the current ASP level. It seems like that ASP is down to around DKK 234 for the quarter. So any flavor on that is appreciated. And then I know you probably just going to comment on Capital Markets Day, but is there any initial feedback that you would like to share on the prelaunch phase that you are in with the colonoscope. I guess, everything is on track. But do you have some feedback that implies that you maybe need to do some small adjustments or is this product still 100% ready, as you can see it now for a true launch?
Thank you for that, Thomas. Starting out with your first question, rest of world. It is correct that the rest of world is a bit less than the rest of the Europe and U.S. -- about 3%. The growth is maintained in Asia. The Visualisation products are little low. It's correct from your statement that Australia is the main share of our aScope in Asia and Australia is probably the most penetrated area we have, so that's the reason for that. There might be some fluctuation there as well, but you get the point. China, we're still struggling a little bit with China. We have the approval, we're working hard to get the pricing quote, as I've also talked about last quarter in China. The kind of outlook we have for the rest of year is still limited, so we hope that when we get into the next year that we can get a faster penetration into China with our aScope 3, because this is the product that is approved for China. In terms of the second question, the gross margin for aScope is still around 80%, so a very higher gross margin. And we see no changing on the ASP. For the group, it's still flat as we see it right now. Obviously, our direct sales in U.S. is growing faster our direct sales with our partner, Tri-anim, and so over time, we should potentially see a positive uplift on our group ASP. The last thing about the colonoscope, I would like to just standby the comment here that we are in the process of getting both feedback and fine-tuning the product and transfer the product. So rather than giving a bit of the story, I'd like to wait to give you a complete feedback on that when we see you in the months and a bit.
Okay, great. Just Australia again. I didn't really get. Was there any -- was just fluctuations for the quarter or is to see any -- because, I guess, Australia is by far the country with -- well, would have been using the aScope for the longest period of time. So is there anything in Australia that we should see as a small concern, maybe?
No, I mean maybe I [Audio Gap] and the 13% is not an indication for what we believe is happening, we still have strong growth. But my comment was just that Australia is also the most penetrated market we have. So the 13% or so is lower than the rest of world, but it's not a concern we have going forward. Thank you.
And our next question comes from the line of Christian Ryom of Nordea Markets.
This is Christian here. I have a couple of questions, first on Anaesthesia which reports very strong quarter this quarter -- very strong this quarter. Can you comment on whether there were any exceptionals here and your reason for maintaining guidance for the full year, for that business there which would suggest a slowdown in the fourth quarter? And then secondly on your gross margin development and the rollout of the aScope 4. Do you have the same production yield on the aScope 4 as you do on the aScope 3? Is there an increase in components cost that has a meaningful impact here? And then thirdly on your -- the development in your R&D expenses, Michael could you put a bit more flavor on how we should think about the development both in cash costs and in expense cost for the coming quarters?
Thank you, Christian. I'll take the first 2 and then Michael will do the answers for the R&D. In terms of Anaesthesia, I've stated many times in the past that it's very, very difficult for us to manage individual quarters, so therefore we mostly guide you on the annual expectation and that is still that we should see a year-to-year growth of Anaesthesia in the neighborhood of 5%. So I guess when we do 10% for the quarter then this is abnormal and not expected to be the going forward growth in Anaesthesia. But I want to say that I'm pleasantly surprised and also happy with the development in U.S., because it clearly show that the speed of our sales force and investment in further sales people also, of course, impact our Core business, including Anaesthesia. In the next question about the transfer from aScope 3 to aScope 4. aScope 4, obviously, is a better product, more advanced product. Therefore, our ASP price for aScope 4 is also slightly higher than aScope 3. So the yield in terms of manufacturing, there is no difference. We see high productive yield, we see a low scrap on those products. And the cost of the aScope 4 is marginally higher than aScope 3, but what we expect over time that we'll get down the same level as where we have aScope 3 right now.
And then question on the R&D expenses. As I said under my presentation, 7% of our revenue is in -- goes into recurring investments and 3/4 of that is R&D. So right now we are running at a tune of somewhere 5% and 6% on R&D. And clearly what you've seen is that we've stepped up here -- or over this financial year mainly due to the inclusion of Invendo, but also due to a -- in general higher level of activities in this area. You can also see in our accounts that we spent more than DKK 100 million year-to-date on R&D and also here we have a higher run rate in Q3 compared to what we had in Q1.
And maybe if I can add, Christian, to Michael's comment, what is also important to understand obviously is that the lion's share of all our R&D expenditures are used on the Visualisation platform. So if you do math in terms of how much in percentage we are using on R&D to support the revenue on Visualisation, you'll of course get to figure that is well above 13%.
And just to clarify on the R&D expenses here, would you say that it's fair to expect that your -- that the level of expenses that we see here in Q3 is also the level we should expect in Q4 or what development should we expect forward?
I think you should expect the same development here for the remaining of the year, Christian.
Our next question comes from the line of David Adlington of JPMorgan.
So just on your switch from the aScope 3 to 4, it sounds like you've been -- it seems like you've been more successful in driving that switch in Europe. It sounds like you've been sort of try and protect capacity of the aScope 4 as you switch a digital capacity across aScope 4, do you expect growth in the U.S. to accelerate? And the second question is just on the colonoscope. Should we take the shift in production on Tri-anim for Q1. How long after production do you expect to be in market with the product there?
Thanks, David. And good to have you on the call. The switch from aScope 3 to aScope 4 started out in Europe first up simply because that was where we had the regulatory approval, so that's we have a faster conversion from 3 to 4 in Europe. As far as U.S. is concerned, the aScope 3 was sold at the beginning of the year and we got the approval for 4 around March-April time frame last -- this year. So that means that we have only had the product in market for a little bit more than a quarter, including vacation. So the feedback we get is very positive and of course we also believe that conversion from 3 to 4 in U.S. is happening at the same speed as we had seen in Europe. In terms of the question on the colonoscope, we are really putting a lot of effort in terms of the transfer. We have already lines up and running, testing in Malaysia. And the Q1 is where we are going to involve even further hospitals and further feedbacks and testing. So again this is what will give you more details around -- in months from now.
Our next question comes from the line of Ole Henrik Bang-Andreasen from ABG.
So just on the scopes. I know Q3 sequentially is fairly flat, but I was just wondering if you experienced any hiccups during Q3 this year versus last year. And then secondly, you updated your aScope estimates for full year. This year does this change anything with a long-term view? In terms of units for scopes, I know you previously talked about 1 million units in 2 years.
Thank you, and also welcome to the call here. In terms of the aScope, as I understand your question -- have there been any changes from last year to this year in terms of the aScope development. Well, we're still pretty positive on what's going on. We are continuing to penetrate the hospitals. That means working on getting the hospitals to use our scope. Close to 100% is, of course, the ultimate. That's why the -- approximately close to 400 hospitals that we talk about today that are using our scope more or less 100% of the time, is a very good indicator for us to continue the penetration game. So we have lot of efforts on that. To clinical, make sure the hospitals are understanding what the product can and how it's used, so we're positive on that. The other positive thing is that we also continue to add new hospitals to our account. So we are talking about close to -- now about 50 to 55 new hospitals average every month that our sales people are getting onboard. And obviously over time they will help us to continue the growth we have in the bronco suite. In terms of the guidance that we guided you 500,000 at the time last year was quite a -- kind of aggressive guidance based on where we came from, but I believe that we could execute on. We see that the market is a fraction more positive than we have anticipated, and that's also why we increased the guidance with 10% to now be in the area of 550,000. That also mean that the target for 2020, which is your last question, is intact. We still believe that Ambu will have sold more than 1 million aScopes when we hit our 2020 financial year. And also this -- we will guide you more in detail on when we see you in a month's time.
Okay. I guess, my question was just why Q3 was so flat versus Q2 sequentially this year.
Okay, okay. I misunderstand your question. Well, when you go back in time, you can see that the fluctuation from quarter-to-quarter, when we talk about aScope, is not necessarily kind of indication of the annual sales. So therefore -- because there could be fluctuation in procurement in the hospitals, there could be vacation period is longer one compared to the other. So the only thing we concentrate on is really to compare apples-to-apples and that means quarter last year to quarter this year. Thank you.
Our next question comes from the line of Niels Granholm-Leth of Carnegie.
I have 3 questions as well. I will take one at a time and just to clarify on the gross margin, you mentioned on the aScope of 80%, is that the gross margin or is it the contribution margin? Is it not correctly understood that you -- we need to subtract 10 percentage points for indirect production cost, that's my first question.
You are spot on. It is the contribution margin and so you need to take out the 10% or 9% to get down to the gross margin.
Okay. And my second question would be to return to last question about the sequential growth in number of aScope shipments. It looks as if you are going to hit 550,000 units in the full year. That we're going to see approximately a little more than a 150,000 units shipped in quarter 4, so that will be 3 consecutive quarters of unchanged shipments. Is there anything that we should read into this, is it because that quarter 2 was artificially low or are there any markets which are beginning to be saturated?
Niels, the questions is, of course relevant, but the answer is roughly the same. We don't see any alarms that the aScope is maturing. We see continuous strong growth. And the quarters are difficult for us to manage as well as the quarters are difficult for us to manage on Anaesthesia and PMD. So we just want you to look at the annual growth which is really what is driving our focus at Ambu right now. So we don't see any concern because of the quarterly development.
And then just my final question for this time would be that, on the last analyst meeting you mentioned that -- I think it was 6 U.S. hospitals reviewing the single-use colonoscope and they would provide you with some feedback there, which you would then pass on to us in this quarter. Are you able to confirm that these 6 U.S. hospitals are actually reviewing the colonoscope?
What I said to you last quarter was that we would like to go out to 6 hospitals and evaluate our products. We have made some internal prioritization here and we've properly upgraded our plan of transferring products to Malaysia faster than I have anticipated. And that's why when we get to Q4 I would like you to have a full picture on how many hospitals, and the feedbacks and where we're with the launch plans.
But is the colonoscope actually being tested in humans in the U.S. as we speak?
Not as we speak, no.
Okay. So how long would it take? Let me ask differently than. Has it been tested in animals yet?
Yes, it has.
Okay. So how long would it take from the time you've tested product...
And it's not correct by the way, what I am just saying. It has also, since we talked, been tested in humans, because of course it's an FDA approved product. Your question was more about the testing of -- and evaluating of 6 hospitals. And what I said to you is that that's kind of big hospitals. Of course, we have decided to transfer faster to Malaysia than we have anticipated.
But it just sounds as if the product is currently not being tested by these 6 U.S. hospitals, is that correctly understood?
Currently they are not testing it, because we're in the process of transferring it to Malaysia, that's right.
Okay. So when will they start to test and review the product.
Well, that's what we would like to tell you about when we get to October 1.
Okay. And so we basically...
How many products we can get to U.S. out of Malaysia and also how many products we can develop short term in the casing facility.
Capacity increasing in Germany off a couple of hundred thousand colonoscopes, you'd mentioned last quarter. So wouldn't it be fair to say that you could supply the testing hospitals from Germany?
That was -- would be a fair comments. But we have not follow up that plan as we talked about last quarter.
And just to understand. So realistically how fast could the product be commercially available on the market if you really haven't started to test it properly in humans yet.
We have the FDA approval, so we expect the product that it will work. So the only thing that we need to be 100% sure is to have hospitals that use the products in a kind of a day-to-day procedures and this is what is going to happen in the short term. Thank you.
Our next question comes from the line of Paolo Mortarotti of Tower House Partners.
Couple of questions my end. The first one is that do with the investments in commercial infrastructure. If you could characterize where the new heads are going, whether it's preparing grounds and new applications like GI, whether it's extending coverage of geographical footprint, or maybe both? And related to that, whether you are currently planning to maintain your role as Chief Executive and Chief Commercial Director or whether there is a hire coming in terms of leading the commercial organization for the next fiscal year? That's question number one.
Okay. Thanks, Paolo. I mean in terms of the GI, I just want to maybe repeat myself again that we would like to give you as complete and the precise picture on the GI development when we meet in October. So I just wanted to expect that. In terms of a commercial kind of rollout, right now you see very strong development in all our regions. That means that our local sales managers are doing a strong performance there and we have no intention right now to change that structure. What we have done just after the acquisition is that we have fully integrated the previous Invendo salesforce and clinical team in U.S. -- that was a relatively small team. We have fully integrated that into the U.S. sales management as we have planned from the beginning. So this is a kind of a status quo now.
The second question is a little bit more general. It has to do with the fact that we are getting close now to celebrate the 10th year -- for the 10 year anniversary of the journey that Ambu began in single-use Visualisation. And presumably in the last 10 years there has been a few lessons learned on the value of improving workflow in hospitals. And whether it's in ICU settings or elsewhere. So I wondered whether you believe that Ambu as an organization have the capability, let's say, within the next 5 years to explore new areas for us potentially disrupt current clinical practice. Or whether we should expect the company to remain singlehandedly focus on the development of the single-use Visualisation platform.
Well, that's a very good question and it's hard to answer from us. I mean we believe the best Ambu can do right now is to focus on the opportunities that is out there and that is to take as much share away from Olympus as we as we possibly can. Olympus is clearly our competitor. It's clearly the ones that we need to take on and persuade our customers to use single-use for the reasons you all know. So we still believe that the traditional way of doing endoscopy procedures would be the traditional way for many, many years. Obviously, there will be other kind of technologies that comes out. But at this point of time, our mission is to do that direct conversion.
And we have a follow-up from Niels Granholm-Leth of Carnegie.
So I would just like to turn the focus on the duodenoscope. Have you started animal testing on your duodenoscope which you have mentioned could be on the market next week -- next year as well?
Well, Niels, I'm not prepared to answer that question.
Okay. Could you just briefly talk about the newly launched single-use cap by PENTAX and the one which is supposed to come out from Olympus? How would you see the single-use caps on the reusable scopes to impact the market for duodenoscopes?
Well, this is not a kind of a new development. They started to talk about that for a couple of years ago. I think that it doesn't resolve the issue that the doctors have out there. It doesn't resolve the complexity, doesn't resolve -- the sterilization process is very complicated. It could maybe resolve some of the contamination issues out there, but for us it doesn't make any difference. It could also indicate that those players are definitely not working on coming out with products because then they would probably launch that instead of coming out with a kind of a condom solution.
Okay, great. And if I may just as follow up on this sales model for your colonoscope and duodenoscope. So there is this processor that comes with the scope which we talked about a few times and were you initially -- there was a list price up of $20,000. Have you come any closer as to which, this is going to be the list price of this processor? And does this price includes the joystick or the hand tool which is I guess also reusable?
Well, Niels, again I want you to see the whole picture when we meet in October. There are a lot of things going on in terms of improving processors and getting it down in price and make it more [ improvised ]. So let's see where we are in October and give you the -- all the information at that time.
Okay. But have you -- at this point in time, have you found or concluded that you need to redesign your processor or your joystick?
I don't want to comment, Niels. I just want you go back to my answer. In October, you will get the answer. Thank you.
[Operator Instructions] As there are no further questions coming through. I'll hand back to Lars for the closing comments.
Thank you very much. I want to take the opportunity to thank all our global employees for another great performance and execution of our plans and activities. And also to you being on the call today. Thank you for all the questions and for listening in. We look forward to seeing you at Ambu on 1 October, 2018. So with this, have a good day. Thank you.