Coloplast A/S Updates Organic Growth and EBIT Margin Guidance
Coloplast A/S Adjusts Financial Guidance for FY 2024/25
Coloplast A/S has revised its financial expectations for FY 2024/25, particularly in terms of organic growth and EBIT margin before special items. The anticipated organic growth has been adjusted to approximately 7%, down from the previous expectation of 8-9%. Additionally, the EBIT margin is now projected to be in the range of 27-28%, slightly reduced from the earlier estimate of around 28%.
Q2 Financial Highlights
Key financial figures for the second quarter are notable, showcasing trends across various business segments.
- In Q2, overall group organic growth stood at 6%, while the EBIT margin before special items was recorded at 27%.
- Analyzing organic growth by business area reveals: Ostomy Care at 4%, Continence Care at 8%, Voice and Respiratory Care at 7%, Advanced Wound Care at 10%, and Interventional Urology showing a decrease of 1%.
- The slower growth in the Ostomy Care segment can be attributed to a high baseline in Europe, tender timing in emerging markets, and deceleration in China. However, a pickup in growth is anticipated in the second half of the fiscal year.
- Continence Care demonstrated strong performance, principally due to the contribution from the Luja™ product line.
- Growth within Voice and Respiratory Care was fostered by both Laryngectomy and Tracheostomy, despite facing a high baseline from the prior year.
- Advanced Wound Care growth was significantly supported by Kerecis, which reported a remarkable 30% increase. Conversely, the Dressings business recorded a modest growth of 3%, impeded by slower performance in China.
- Interventional Urology faced challenges due to a voluntary product recall affecting Bladder Health and Surgery, leading to an approximate DKK 35 million impact in Q2. Although sales of impacted products resumed in February, recovery has been slower than anticipated.
First Half Financial Overview
Looking at the first half of FY 2024/25, the figures reflect a challenging environment.
- Group organic growth reached 7%, while the EBIT margin before special items maintained at 27%.
- Growth performance by business area showed Ostomy Care at 6%, Continence Care at 7%, Voice and Respiratory Care at 9%, Advanced Wound Care at 11%, and Interventional Urology remaining stagnant at 0%.
FY 2024/25 Financial Projections
The revised FY 2024/25 financial guidance from Coloplast reflects adjusted projections based on varying assumptions.
- Organic growth is now expected to stabilize around 7% in constant currencies, down from previous expectations of 8-9%. This recalibration reflects heightened uncertainty related to tenders in emerging markets and ongoing slowdowns in China, which predominantly affects the Ostomy Care segment.
- The anticipated revenue growth reported in DKK has been modified to about 4%, adjusted from a previous forecast of approximately 7% due to the lowered organic growth outlook and approximately 2%-points negative impact from currency fluctuations, primarily due to the weaker US dollar. The adverse effect of the Skin Care division divestment remains unchanged at around -1.5%-points.
- For EBITDA margins before special items, guidance has now shifted to 27-28%, down from original predictions of approximately 28%. This adjustment is influenced by the negative impact of revised growth projections across the group, though some offset is anticipated through effective cost management.
- Coloplast now expects special items to be around DKK 400 million, significantly up from the initial DKK 130 million, reflecting ongoing profitability enhancement initiatives and asset write-downs.
- Expectations regarding capital expenditures and tax rates remain stable.
Monitoring US Tariffs Impact
Coloplast is diligently tracking the evolving tariff landscape concerning imports into the US. At this time, the company does not foresee any significant financial repercussions arising from these tariffs.
Upcoming Interim Report Publication
Coloplast will share its H1 2024/25 Interim Report on the specified release date, along with a scheduled conference call to discuss the results.
Contact Information
Investors and Analysts:
Anders Lonning-Skovgaard, Executive Vice President, CFO
Tel: +45 4911 1111
Aleksandra Dimovska, Vice President, Investor Relations
Tel: +45 4911 2458
Email: dkadim@coloplast.com
Simone Dyrby Helvind, Senior Manager, Investor Relations
Tel: +45 4911 1800 / +45 4911 2981
Email: dksdk@coloplast.com
Press and Media Contacts:
Jakob Danving Nielsen, Senior Communications Manager
Tel: +45 4911 2229
Email: dkjada@coloplast.com
Frequently Asked Questions
What changes were made to Coloplast's financial guidance?
Coloplast revised its organic growth expectation to about 7% for FY 2024/25, down from 8-9%. They also adjusted the EBIT margin to 27-28%.
How did Coloplast perform in Q2?
In Q2, Coloplast reported a 6% organic growth, with an EBIT margin of 27%. Different business areas showed varied growth rates.
What factors impacted Ostomy Care growth?
Ostomy Care's slower growth was influenced by a high baseline in Europe, tender timing in emerging markets, and a slowdown in the Chinese market.
What are the projections for Interventional Urology?
Interventional Urology is expected to have around 0% growth for the year due to challenges from a product recall and limited sales recovery.
When will Coloplast release its H1 2024/25 Interim Report?
The H1 2024/25 Interim Report is scheduled to be released on 6 May 2025, accompanied by a conference call.
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