Coloplast A/S - Announcement no. 04/2023 - Interim Financial Report, 9M 2022/2023
9M 2022/23
Interim financial results, 9M 2022/23
1 October 2022 - 30 June 2023
Coloplast delivered Q3 organic growth of 8% and 28% EBIT margin1). Reported revenue in DKK grew 4% to 6,108 million
- Organic growth rates by business area: Ostomy Care 8%, Continence Care 9%, Voice and Respiratory Care 9%, Wound and Skin Care 4% (Wound Care 5%), and Interventional Urology 7%.
- Continued good momentum across regions in Chronic Care. China Ostomy Care posted double-digit growth, reflecting a lower baseline last year and fully normalised hospital access and level of procedural volumes. Strong quarter in Continence Care, with solid contribution from all product categories, including Collecting Devices where backorders have been resolved.
- Continued solid momentum in Voice and Respiratory Care, driven by both the laryngectomy and tracheostomy businesses.
- Growth in Wound Care was driven by double-digit growth in China, which benefited from a low baseline and normalised hospital activity. Good underlying momentum in Europe, despite continued impact from backorders, as expected.
- Continued solid momentum in Interventional Urology with broad-based growth, against a high baseline last year.
- EBIT1) was DKK 1,686 million, a 4% decrease from last year. The EBIT margin1,2) was 28% against 30% last year, reflecting mostly inflationary headwind on input costs. Impact from currencies in the quarter was negative.
- Special items were an income of DKK 28 million. This includes a reversal of DKK 244 million related to Atos Medical US billing compliance, with a remaining provision of DKK 90 million. In addition, a further and final provision of DKK 200 million was made related to the Multi-District Litigation (MDL) cases in the US alleging injury from the use of transvaginal surgical mesh products. With this, Coloplast considers the MDL cases closed. Atos integration costs amounted to DKK 16 million.
9M 2022/23 organic growth of 8% and 28% EBIT margin1). Reported revenue in DKK grew 11% to DKK 18,274 million
- Organic growth rates by business area: Ostomy Care 7%, Continence Care 7%, Voice and Respiratory Care 9% (5 months), Wound and Skin Care 6% (Wound Care 4%), and Interventional Urology 11%.
- EBIT1) was DKK 5,131 million, up 1% from last year. The EBIT margin1,2) was 28% against 31% last year, reflecting inflationary headwind on input costs, an increase in operating expenses and DKK 159 million Atos Medical amortisation cost.
- ROIC after tax before special items was 19% against 26% last year, negatively impacted by the Atos Medical acquisition.
On 7 July 2023, Coloplast announced the acquisition of Kerecis and as a result raised long-term growth guidance to 8-10%, from previously 7-9%. The long-term EBIT margin guidance was maintained at above 30% beyond 2024/253)
- Kerecis is an innovative, fast-growing company with a clinically differentiated technology platform based on minimally processed fish skin and a strong commercial presence in the US. With Kerecis, Coloplast enters the high-growth, US-centric biologics wound care segment and adds a long-term growth business with strong profitability expansion potential, well positioned for long-term value creation.
- Kerecis is expected to contribute around 1%-point to organic growth as of 2024/25, with short-term margin dilution.
- Around 99% of Kerecis’ shareholders have agreed to sell their shares to Coloplast, and the transaction is on track to close in Q4 2022/23. The acquisition will be financed through an equity capital raise, expected to be completed in Q4 2022/23.
FY 2022/23 financial guidance
- Organic revenue growth continues to be expected around 8%. Reported revenue growth is still expected at 8-9%.
- The reported EBIT margin before special items1) is still expected at 28-29%, with unchanged underlying assumption.
- Capital expenditures are now expected around DKK 1.3 billion. The effective tax rate is still expected to be around 21%.
"We deliver a solid Q3 with 8% organic growth and an EBIT margin of 28%, which is in line with our financial guidance. We continue to take market share broadly across our business areas and regions. In China, our Ostomy Care and Wound Care businesses delivered double-digit growth in the quarter, which makes me very optimistic about our long-term growth prospects in this important market. Finally, in early July, we acquired Kerecis, and we are excited to start working with our new colleagues once the deal has officially closed in Q4,” says President and CEO Kristian Villumsen.
1) Before special items income of DKK 28 million in Q3 2022/23 and before special items expenses of DKK 5 million in 9M 2022/23. Special items expense of around DKK 50 million expected for FY 2022/23, of which an income of DKK 244 million related to Atos Medical billing provision reversal, DKK 200 million related to the US cases alleging injury from the use of transvaginal surgical mesh product, around DKK 50 million related to Atos Medical integration and around DKK 50 million transaction related costs from the acquisition of Kerecis.
2) Before special items expenses of DKK 20 million in Q3 2021/22 and DKK 435 million in 9M 2021/22.
3) For the remaining Strive25 strategic period running until end 2024/25, the EBIT margin is now expected to remain below 30%, and assumes dilution of around 100 basis points p.a. from Kerecis (including PPA amortisation)
Conference call
Coloplast will host a conference call on Thursday, 17 August 2023 at 10.30 CEST. The call is expected to last about one hour.
To actively participate in the Q&A session please sign up ahead of the conference call on the link here to receive an e-mail with dial-in details Register here
Access the conference call webcast directly here: 9M 22/23 Conference Call
For further information, please contact
Investors and analysts
Anders Lonning-Skovgaard
Executive Vice President, CFO
Tel. +45 4911 1111
Aleksandra Dimovska
Senior Director, Investor Relations
Tel. +45 4911 1800 / +45 4911 2458
Email: dkadim@coloplast.com
Kristine Husted Munk
Senior Manager, Investor Relations
Tel. +45 4911 1800 / +45 4911 3266
Email: dkkhu@coloplast.com
Press and media
Peter Mønster
Sr. Media Relations Manager
Tel. +45 4911 2623
Email: dkpete@coloplast.com
Address
Coloplast A/S
Holtedam 1
DK-3050 Humlebaek
Denmark
Company reg. (CVR) no. 69749917
Website
www.coloplast.com
This announcement is available in a Danish and an English-language version. In the event of discrepancies, the English version shall prevail.
Coloplast develops products and services that make life easier for people with very personal and private medical conditions. Working closely with the people who use our products, we create solutions that are sensitive to their special needs. We call this intimate health care. Our business includes Ostomy Care, Continence Care, Wound and Skin Care, Interventional Urology and Voice and Respiratory Care. We operate globally and employ more than 14,700 employees.
The Coloplast logo is a registered trademark of Coloplast A/S. © 2023-08.
All rights reserved Coloplast A/S, 3050 Humlebaek, Denmark.
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