Coloplast delivers a solid Q2 with 7% organic growth and a 31% EBIT margin and revises full year organic growth guidance to 6-7% from around 7%
The company maintains its reported growth guidance of around 15% and reported EBIT margin guidance of around 31% before special items. Reported revenue in DKK was up by 16% in Q2. EBIT before special items was DKK 1,686 million, a 7% increase from last year, corresponding to an EBIT margin before special items of 31% against 33% last year.
In Q2, Coloplast delivered 7% organic growth in Ostomy Care, 7% in Continence Care, 9% in Interventional Urology, and 6% in Wound & Skin Care. The acquisition of Atos Medical (Voice & Respiratory Care) delivered high-single digit underlying growth as expected.
- “I would like to highlight the solid performance in our Chronic Care business in Europe and Emerging markets excluding China. In our US Continence Care business, we are starting to see a rebound, as growth in new patients normalised towards the end of the quarter. Our Interventional Urology business delivered strong, broad-based growth, led by the US and Men’s Health. Finally, the acquisition of Atos Medical was closed this quarter and the integration is on track. Together with our 1200 new colleagues in Atos Medical and Tracoe, I look forward to the growth journey ahead of us and to helping make life easier for people living with a neck stoma,” says Kristian Villumsen, President & CEO of Coloplast.
Looking at organic growth rates by geography in Q2, the European markets reported 5% growth, Other developed markets grew 4%, while Emerging Markets contributed with 16% growth.
- “Since March, we have seen a significant acceleration in COVID-19 cases in China leading to lockdowns in several regions. Our focus is to keep our people safe while continuing to serve our customers, but the lockdowns have resulted in reduced access to hospitals and a decline in procedural volumes and sales in hospitals within Ostomy Care and Wound Care,” says Kristian Villumsen.
Consequently, Coloplast is revising the organic growth outlook for 2021/22 to 6-7% from around 7%.
Solid progress on the Clinical Performance Programme and a new catheter launch
Coloplast is progressing with its Clinical Performance Programme and the launch of their new ostomy care and catheter platforms. The pivotal study for the ostomy care platform, which was initiated to test the new skin protecting technology, was concluded this quarter, and the targeted end points were met. The platform is expected to launch in the second half of the Strive25 strategy period. The clinical study on the new catheter platform is also moving ahead according to plan and is expected to launch in 2022/23.
On April 1, Coloplast launched a new product within Continence Care, SpeediCath® Flex Set, thereby expanding the flexible catheter portfolio with a set solution. The new product range will be launched in key markets during 2022 and 2023.
War in Ukraine
Coloplast continues to monitor the war in Ukraine closely. Our primary focus is to keep our people safe as well as to ensure that our around 100,000 users in Ukraine and Russia have access to products to manage their chronic conditions. Coloplast is present in Russia with a sales subsidiary of around 70 employees. In Ukraine, we have a representative office with 7 employees and we primarily sell products through two Ukrainian distributors.
2021/22 organic growth guidance revised, EBIT margin before special items guidance unchanged
The organic revenue growth guidance is now expected at 6-7% at constant currencies from previously around 7% as a result of the impact of the spread of COVID-19 in China and the weaker outlook for the Chinese Ostomy Care and Wound Care businesses.
The reported growth in DKK incl. 8-month revenue impact from Atos Medical is unchanged at around 15%. The reported EBIT margin before special items is unchanged at around 31%. The reported EBIT margin after special items is now expected to be around 28-29% from previously around 30%.
EBIT is impacted by special items of around DKK 450 million, of which DKK 300 million is a further provision for costs related to the existing lawsuits in the US alleging injury resulting from the use of transvaginal surgical mesh products. The increased provision is driven by further legal advisory costs as the process to settle outstanding cases is taking longer than previously anticipated. Coloplast has now settled around 99% of the multidistrict litigation (MDL) cases from previously around 98%. The remaining DKK 150 million is related to the Atos Medical acquisition.
CAPEX is unchanged around DKK 1.3bn and effective tax rate unchanged around 23%
The company’s long-term financial guidance is unchanged.
CONTACTS
Peter Mønster
Senior Media Relations Manager, Corporate Communications
+45 49 11 26 23
[email protected]
Ellen Bjurgert
Vice President, Investor Relations
+45 49 11 33 76
[email protected]
Aleksandra Dimovska
Director, Investor Relations
Tel. +45 4911 1800 /+45 4911 2458
[email protected]
Financial highlights and key ratios
| DKKm | 2021/22 – Q2 | 2020/21 – Q2 | Change |
| Revenue | 5,502 | 4,753 | 16% |
| EBIT before special items | 1,686 | 1,577 | 7% |
| EBIT margin before special items | 31% | 33% | -2%-pts |
| Special items* | -381 | -200 | N/A |
| EBIT after special items | 1,305 | 1,377 | -5% |
| EBIT margin after special items | 24% | 29% | -5%-pts |
| Net profit | 980 | 1,130 | -13% |
*Special items expenses in Q2 amounted to DKK 381 million, of which DKK 300 million in further provision to cover potential settlements and costs in connection with lawsuits in the US alleging injury resulting from the use of transvaginal surgical mesh products designed to treat pelvic organ prolapse and stress urinary incontinence as explained above. The remaining DKK 81 million were related to one-off legal and advisory fees as well as integration costs in connection to the acquisition of Atos Medical.
Sales performance by business area
| DKKm | 2021/22 – Q2 | 2020/21 – Q2 | Organic growth | Reported growth |
| Ostomy Care | 2,109 | 1,936 | 7% | 9% |
| Continence Care | 1,877 | 1,719 | 7% | 9% |
| Interventional Urology | 560 | 495 | 9% | 13% |
| Wound & Skin Care | 658 | 603 | 6% | 9% |
| Voice & Respiratory Care | 298 | - | N/A | N/A |
| Net revenue | 5,502 | 4,753 | 7% | 16% |
Sales performance by region
| DKKm | 2021/22 – Q2 | 2020/21 – Q2 | Organic growth | Reported growth |
| European markets | 3,180 | 2,768 | 5% | 15% |
| Other developed markets | 1,325 | 1,143 | 4% | 16% |
| Emerging markets | 997 | 842 | 16% | 18% |
| Net revenue | 5,502 | 4,753 | 7% | 16% |
Financial highlights for the first 6 months of 2021/2022
| DKKm | 2021/22 – 6mths | 2020/21 – 6mths | Change |
| Revenue | 10,671 | 9,491 | 12% |
| EBIT before special items | 3,335 | 3,113 | 7% |
| EBIT margin before special items | 31% | 33% | -2%-pts |
| Special items* | -415 | -200 | N/A |
| EBIT after special items | 2,920 | 2,913 | 0% |
| EBIT margin after special items | 27% | 31% | -4%-pts |
| Net profit | 2,187 | 2,266 | -3% |
*Special items expenses in H1 amounted to DKK 415 million, of which DKK 300 million in further provision to cover potential settlements and costs in connection with lawsuits in the US alleging injury resulting from the use of transvaginal surgical mesh products designed to treat pelvic organ prolapse and stress urinary incontinence as explained above. The remaining DKK 115 million were related to one-off legal and advisory fees as well as integration costs in connection to the acquisition of Atos Medical.
Financial guidance for 2021/22
| Financial guidance | Guidance for 2021/22 | Guidance for 2021/22 (DKK) |
| Sales growth | 6-7% (organic) from previously around 7% | Around 15% |
| EBIT margin before special items | - | Around 31% |
| EBIT margin after special items | - | 28-29% from previously around 30% |
| Capital expenditure | - | 1.3 billion |
| Tax rate | - | Around 23% |
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