H1 2023/24 Interim financial results, H1 2023/24 1 October 2023 - 31 March 2024
Coloplast delivered a solid Q2 with 8% organic growth and an EBIT margin1) of 27%. Reported revenue in DKK grew 9% with 4%-points contribution from Kerecis (underlying growth of around 35%), partly offset by currencies.
Organic growth rates by business area: Ostomy Care 7%, Continence Care 8%, Voice and Respiratory Care 13%, Advanced Wound Care 8% (Advanced Wound Dressings 8%) and Interventional Urology 5%.
Continued good momentum in Chronic Care. Ostomy Care growth was driven by broad-based contribution from Emerging markets and Europe, compensating for lower growth in the US which was held back by order phasing and now expected to be H2 weighted. Continence Care growth was driven by intermittent catheters, including good contribution from LujaTM.
Voice and Respiratory Care had a strong Q2, driven by double-digit growth in both laryngectomy and tracheostomy.
Growth in Advanced Wound Dressings was broad-based across regions, driven by the Biatain? Silicone portfolio.
Continued strong momentum and market share gains for Kerecis. Underlying growth in the quarter was around 35%, in line with plan. The EBIT margin excl. PPA amortisation was around 10%.
Interventional Urology growth was driven by Men’s Health and Endourology, while Women’s Health detracted from growth.
EBIT1 was DKK 1,791 million, a 7% increase from last year. The EBIT margin1,2 was 27% against 28% last year, and includes around 100 basis points negative impact from Kerecis, as expected, and negative impact from currencies.
Coloplast is expanding its Luja? portfolio with the launch of Luja for women* as of May 2024. Heylo?*, a digital leakage notification system, has been granted national reimbursement in the UK as of 1 July 2024. Coloplast is also significantly expanding its SenSura Mio ostomy range with SenSura Mio in black* and a broader convexity offering*, as of May 2024.
LCD** draft policy for skin substitutes announced on 25 April, related to ~20% of Kerecis revenue. Kerecis is considered to not meet a clinical qualification introduced in the draft policy and is therefore not included on the covered list. A 2023 clinical study by Lantis et al. providing relevant, high-quality evidence of the efficacy and performance of Kerecis’ fish skin will be submitted in the consultation period, ending on 8 June. The financial assumptions on Kerecis are unchanged.
H1 2023/24 organic growth of 8% and an EBIT margin1) of 27%. Reported revenue in DKK grew 8% to DKK 13,192 million.
Organic growth rates by business area: Ostomy Care 7%, Continence Care 8%, Voice and Respiratory Care 10%, Advanced Wound Care 8% (Advanced Wound Dressings 8%) and Interventional Urology 5%. Kerecis contributed to reported growth with 4%-points and underlying growth of around 35%, in line with expectations.
EBIT1 was DKK 3,613 million, a 5% increase from last year. The EBIT margin1,2 was 27% against 28% last year, and includes around 100 basis points negative impact from Kerecis, in line with expectations, and negative impact from currencies.
ROIC after tax before special items was 15% against 19% last year, negatively impacted by the acquisition of Kerecis.
Free cash flow was an outflow of DKK 1.3 billion, impacted by income tax paid due to extraordinary tax payment related to Atos Medical’s Intellectual Property transfer. Adjusted for the tax payment, free cash flow was an inflow of DKK 1.2 billion.
The company will pay half-year interim dividend of DKK 5.00 per share, for a total dividend pay-out of DKK 1,125 million.
FY 2023/24 organic growth and reported EBIT margin guidance unchanged. Reported revenue growth adjusted to 10-11%.
The organic revenue growth is still expected to be around 8%. Reported growth in DKK is now expected to be 10-11%, from previously around 11%, and includes negative impact of 1-2%-points from currencies, from previously around 1%-point. Contribution from the acquisition of Kerecis to reported growth is still expected to be around 4%-points (11 months).
The reported EBIT margin before special items1 is still expected to be 27-28%. The EBIT margin includes around 100 basis points dilution from Kerecis (incl. around DKK 100 million in PPA amortisation) and negative impact from currencies.
Capital expenditures are still expected around DKK 1.4 billion. The effective tax rate is still expected to be around 22%.
“We deliver a solid second quarter with 8% organic growth and an EBIT margin of 27%, which is in line with our financial guidance. I would like to highlight a strong Q2 performance in our Chronic Care and Advanced Wound Care businesses as well as solid contributions from our newest members of the Coloplast family, Atos Medical and Kerecis, both of which deliver double-digit growth in Q2. In Continence Care, our new intermittent catheter for men, Luja?, is contributing well to growth, and we are now expanding our platform with the launch of Luja? for women. In Ostomy Care, we have now received reimbursement in the UK on Heylo?, the world’s first digital leakage notification system. We are also strengthening our SenSura? Mio portfolio in Ostomy Care with two new launches. I believe these launches will help drive our future growth and make a real difference to people living with intimate chronic conditions worldwide.” says Kristian Villumsen, President and CEO of Coloplast.
1) before special items of DKK 19 million in Q2 2023/24 and DKK 34 million in H1 2023/24. Total FY 2023/24 special items are still expected to be around DKK 50 million related to Atos Medical integration cost. 2) before special items of DKK 20 million in Q2 2022/23 and DKK 33 million in H1 2022/23.
*CE-marked medical device. Product availability is subject to regulatory process of individual countries and is not guaranteed. Currently not available in the US. **Local Coverage Determination
Conference call
Coloplast will host a conference call on Tuesday, 7 May 2024 at 9.00 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: Coloplast H1 2023/24 conference call
For further information, please contact
Investors and analysts Anders Lonning-Skovgaard Executive Vice President, CFO Tel. +45 4911 1111
This announcement is available in a Danish and an English-language version. In the event of discrepancies, the English version shall prevail.
Coloplast was founded on passion, ambition, and commitment. We were born from a nurse’s wish to help her sister and the skills of an engineer. Guided by empathy, our mission is to make life easier for people with intimate healthcare needs. Over decades, we have helped millions of people to live a more independent life and we continue to do so through innovative products and services. Globally, our business areas include Ostomy Care, Continence Care, Advanced Wound Care, Interventional Urology and Voice and Respiratory Care.
The Coloplast logo is a registered trademark of Coloplast A/S. ? 2024-05.
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