Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Coloplast AS (CLPBF, Financial) achieved 8% organic growth for the '23-'24 financial year, reflecting strong market share gains.
- The company reported a robust EBIT margin before special items of 27% for the year, despite challenges.
- Kerecis, a recent acquisition, delivered impressive growth of around 35%, aligning with strategic plans.
- Significant product launches, including the Luja catheter and expansions in the SenSura Mio portfolio, are expected to drive future growth.
- Coloplast AS (CLPBF) made progress in sustainability, with 77% of production waste recycled and a 27% reduction in Scope 1 and 2 emissions since the base year '18-'19.
Negative Points
- The establishment of a new US distribution center led to supply disruptions and extraordinary costs, impacting financial performance.
- Interventional urology business growth was below expectations due to competitive pressures.
- The EBIT margin in Q4 was negatively impacted by extraordinary costs and currency fluctuations.
- The integration of Atos Medical and other acquisitions is taking longer than anticipated, with ongoing integration costs.
- The company faces uncertainty regarding the final LCD policy for Kerecis, which could impact future growth projections.
Q & A Highlights
Q: Can you discuss the performance of the interventional urology business, particularly in women's health, and the expectations for the slings business?
A: The interventional urology business showed 7% growth in Q4, with women's health returning to growth partly due to favorable comps. However, competitive pressure is expected to continue into '24/'25, with the business anticipated to grow at mid-single digits. We do not comment on specific product groups within women's health.
Q: How is the consumer sentiment in China affecting your business, and what are your expectations for next year?
A: We have not seen significant changes in China, delivering mid-single-digit growth this year and expecting the same next year. The patient inflow is stable, but challenges remain in the consumer channel. We do not anticipate a deterioration but also no significant improvement.
Q: Can you explain the margin guidance for next year and the confidence in achieving it?
A: We are guiding an EBIT margin of around 28% for '24/'25, expecting improvements in gross margin driven by lower input costs, a program to improve wound care profitability, and improved profitability from Kerecis. We also expect operating costs to grow at a lower rate than revenue, with a neutral impact from foreign exchange rates.
Q: What is the status of the Heylo launch in the UK and Germany, and what caused the delay in Germany?
A: The Heylo launch in Germany is delayed to the second half of 2025 due to data requests from authorities. In the UK, the launch is progressing as planned, with a slow ramp expected due to the new product type. We are working with local payers to secure access, with no significant contribution expected during Strive25.
Q: What are the strategic priorities for the newly expanded executive leadership team?
A: The expansion reflects our strategic direction towards building growth platforms. Priorities include delivering growth plans for Atos, entering the overactive bladder segment in urology, and focusing on the Kerecis platform for wound care. The changes align with the end of the Strive25 period and the start of new strategy work.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
