Coloplast B.V. - Announcement no. 02/2023 - Interim Financial Report Q1 2022/23
Interim financial results, Q1 2022/23
1 October 2022 – 31 December 2022
Coloplast delivered a solid start to the year with 7% organic growth and a 29% EBIT margin before special items
Coloplast delivered 7% organic growth in Q1. Reported revenue in DKK was up by 18%. Organic growth rates by business area: Ostomy Care 8%, Continence Care 7%, Wound and Skin Care 1% (Wound Care -4%), and Interventional Urology 11%.
Solid start in Chronic Care, with strong momentum in Ostomy Care across regions, ex. China. In Continence Care, backorders in Collecting Devices continued to detract from growth, offset by strong growth in the Intermittent Catheters portfolio.
Voice and Respiratory Care delivered high single-digit organic growth and contributed 9%-points to reported growth.
Growth in Wound Care was impacted by a high baseline last year, continued impact from backorders, particularly in Europe, and negative growth in China. Continued good underlying growth momentum in key European markets.
Strong start to the year in Interventional Urology with broad-based growth, led by the Men’s Health business in the US.
Coloplast is launching Luja™, the new male intermittent catheter with a unique Micro-hole Zone Technology, setting a new standard for bladder emptying. The new catheter is expected to be available in key markets over the next 12 months.
EBIT before special items was DKK 1,774 million, an 8% increase from last year. The EBIT margin before special items was 29% compared to 32% last year, reflecting increased commercial activity levels, increased costs for raw materials, energy, and freight, as well as around DKK 54 million in amortisation costs related to the Atos Medical acquisition.
ROIC after tax before special items was 20% compared to 43% last year, negatively impacted by the acquisition of Atos Medical. Diluted earnings per share (EPS) before special items decreased by 7% to DKK 5.35, due to a 7% decrease in net profit from last year. Net profit was impacted by an increase in financial expenses, driven by non-cash effect from currencies.
Free cash flow was DKK 212 million, a 77% decrease from last year, impacted by a decline in cash flow from operating activities, mostly due to an increase in net working capital. Net working capital for FY 2022/23 is still expected around 24%.
FY 2022/23 financial guidance – unchanged organic revenue growth of 7-8% and an EBIT margin of 28-30% before special items. Reported revenue growth adjusted to 9-10%.
Organic revenue growth is expected at 7-8% in constant exchange rates. Reported growth in DKK is expected at 9-10%, from previously 11-12%. Impact from currencies is expected around -1%-point, mostly due to an unfavourable development in the US dollar. The Atos Medical acquisition is still expected to contribute around 3%-points to reported growth (4 months).
Reported EBIT margin before special items is still expected at 28-30%, impacted by increasing input costs, especially raw materials and electricity in Hungary, partly offset by leverage, efficiency gains and prudent management of operating costs.
Capital expenditures are still expected to be around DKK 1.4 billion. The effective tax rate is still expected to be around 21%.
”We deliver a solid start to the year with 7% organic growth and an EBIT margin of 29% in Q1, in line with our financial guidance. Our Chronic Care business delivered a strong first quarter with broad-based growth excluding China. I would like to highlight our strong performance in Ostomy Care in the US where we continue to strengthen our competitive position, latest with a three-year renewal of our group purchasing agreement with Premier Inc. I am also pleased with our continued solid performance in our Interventional Urology and Voice and Respiratory Care businesses. Finally, we are launching our new male intermittent catheter Luja™, designed to reduce the risk of urinary tract infections. I am excited by what I believe Luja can do for people using intermittent catheters as well as healthcare systems,” says President and CEO Kristian Villumsen.