Coloplast A/S's Resilient H1 2024/25 Financial Performance

Overview of Coloplast A/S's Interim Financial Report

Coloplast A/S has released its interim financial results for the first half of the fiscal year 2024/25, demonstrating a commendable performance despite facing some challenges in certain product segments. The period covered ranges from 1 October 2024 to 31 March 2025. Within these six months, the company recorded 6% organic growth in the second quarter, influenced by a product recall in the Interventional Urology segment and a softer performance in Ostomy Care.

Growth and Revenue Insights

The reported revenue for the second quarter reflected a 5% increase in Danish Krone (DKK), although affected by the divestment of the Skin Care line. Despite these challenges, the EBIT (Earnings Before Interest and Taxes) margin remained strong at 27%, consistent with the previous year.

Organic Growth Rates by Business Segment

Coloplast's different business areas displayed varied organic growth rates: Ostomy Care achieved 4%, Continence Care topped 8%, Voice and Respiratory Care saw 7%, while Advanced Wound Care led with 10%. Conversely, Interventional Urology faced a decrease of 1% mainly due to the product recall, which notably impacted sales.

Chronic Care Highlights

Notably, the Chronic Care category benefitted from robust contributions from Continence Care, specifically from the Luja™ product. The Ostomy Care segment's slower growth primarily stemmed from previous high performance levels in Europe, phased tenders in emerging markets, and a slowdown in China. Nevertheless, Ostomy Care is projected to improve in the latter half of the year.

Financial Performance Metrics

Coloplast's first half of 2024/25 showed an overall organic growth of 7% with an EBIT margin of 27%. The total reported revenue stood at DKK 13,956 million, marking a 6% rise. EBIT was reported at DKK 3,803 million, reflecting a 5% increase compared to the previous year. These figures underscore the company's resilience and stable performance across its operations.

Adjustments and Dividends

Adjusted net profits before special items also saw a notable rise to DKK 2,666 million, up by DKK 175 million from last year. Consequently, adjusted diluted earnings per share increased by 7% to DKK 11.83. This encouraging performance paved the way for the declaration of a half-year interim dividend set at DKK 5.00 per share, amounting to a total payout of DKK 1,126 million.

Revisions to FY 2024/25 Guidance

Coloplast has made some revisions to its fiscal year guidance, projecting an organic growth of around 7%, down from the previous estimate of 8-9%. This adjustment considers the challenges faced within Interventional Urology, as well as facing higher uncertainties related to tender phases in emerging markets and slowdowns in the Chinese sector.

Expected Financial Outcomes

Growth in reported DKK is now forecasted at around 4%, reflecting the impact of a weakened organic growth outlook and external currency fluctuations. The expected EBIT margin before special items has been revised to between 27-28%, indicating a slight moderation from previous predictions, driven by the lower organic growth outlook but balanced with effective cost management strategies.

Leadership Changes and Strategic Directions

The company announced significant leadership shifts, with existing CEO Kristian Villumsen stepping down on 5 May 2025. Lars Rasmussen will take over as interim CEO while the Board searches for a permanent replacement. Lars expressed gratitude towards Kristian for his 17 years of service, highlighting his role in strengthening Coloplast's market position and executing key strategic acquisitions.

Upcoming Conference Call and Stakeholder Engagement

Coloplast has scheduled a conference call for Tuesday, 6 May 2025, at 11:00 CEST, intended to last about one hour. Stakeholders wishing to participate in the Q&A session are encouraged to register beforehand to receive dial-in details. This transparent approach exemplifies Coloplast's commitment to engaging with its investors and analysts, keeping them informed about current developments and future strategies.

Frequently Asked Questions

What was the organic growth percentage reported for H1 2024/25?

The organic growth percentage reported for the first half of 2024/25 was 7%.

Who is the interim CEO of Coloplast following the leadership change?

Lars Rasmussen is serving as the interim CEO of Coloplast after Kristian Villumsen's departure.

What is the expected EBIT margin for FY 2024/25?

The expected EBIT margin for FY 2024/25 is between 27% to 28%.

When will the conference call discussing the financial results take place?

The conference call is scheduled for 6 May 2025, at 11:00 CEST.

Who should investors contact for inquiries regarding financial reports?

Investors can contact Anders Lonning-Skovgaard, Executive Vice President, CFO at +45 4911 1111 for financial inquiries.

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