Business concept, goals and strategies

Business concept

  • Vitrolife’s business concept is to develop, produce and market advanced, effective and safe products and systems for assisted reproduction.

Goal

  • Vitrolife’s goal is to become the world leading supplier of medical devices for assisted reproduction. 

Strategy

Vitrolife has identified five strategic focus areas to reach this goal:

  • Establish a scalable global organisation focused on common values.
  • Expand sales through an improved customer offering and selling solutions.
  • Broaden the product portfolio and ensure synergies between business units and market regions.
  • Achieve economies of scale through increased internal efficiency.
  • Take advantage of external growth opportunities such as collaborations and acquisitions.

Financial objectives

Vitrolife’s Board considers that Vitrolife should have a strong capital base in order to enable continued high growth, both organically and through acquisitions. The company’s net debt in relation to EBITDA should normally not exceed three times. Vitrolife targets profitable growth. The objective for Vitrolife’s growth over a three year period is an increase in sales by an average of 20% per year, with an operating margin before depreciation and amortization (EBITDA) of 30%.

Achievement of financial  objectives

Sales growth

Over the last three years, Vitrolife’s sales in the fertility area have grown both organically and through acquisitions by an average of 18% per year. Organic growth has been driven by IVF market growth of 5-10% per year.  Vitrolife has also gained market shares by expanding the sales organisation and broadening the product portfolio. The target of 20% annual growth is defined as organic and acquired growth measured in local currencies and averaged over a three-year period. Average growth between 2014 and 2016 amounted to 18% and thus growth underperformed the target.

EBITDA margin

In 2016 the operating margin before depreciation and amortisation (EBITDA) amounted to 35%, which means that the margin was lower than in 2015. The decrease is explained both by the fact that the company reported extraordinary revenue in 2015 related to a recovered additional purchase price and because the company had one-time expenses in 2016 related to consolidation of the time-lapse business. Vitrolife’s objective for the EBITDA margin is 30%. The company thus reported an operating margin that outperformed the target for 2016. 

Net debt/EBITDA

In 2016, net debt in relation to EBITDA amounted to a multiple of -0.5 (-0.5). In relation to the target, Vitrolife’s debt provides scope for financing acquisitions over the coming years through increased debt.

Achievement of financial objectives

 

 

 

Over the last three years the average growth rate (CAGR) has been 18% per year measured in local currencies*



The operating margin has increased during 2016*

 


Vitrolife’s debt enables loan-financed acquisitions