Coloplast (COLO) Q1 25/26 earnings summary

Executive summary

• Achieved 6% organic revenue growth and 3% EBIT growth in constant currencies in Q1 2025/26, with a reported EBIT margin of 26%.

• Reported revenue was flat at DKK 7,043 million, impacted by currency headwinds and the Skin Care divestment.

• Strong growth in Interventional Urology, Continence Care, and Voice & Respiratory Care; Ostomy Care and Wound & Tissue Repair had a soft start.

• Kerecis faced significant disruption due to Medicare reimbursement changes, impacting growth and margins.

• Leadership changes included departures in People & Culture and Interventional Urology, with new appointments underway.

Financial highlights

• Revenue: DKK 7,043 million (0% reported growth, 6% organic); gross margin: 67% (down from 68%).

• EBIT before special items: DKK 1,850 million (down 3% year-over-year); EBIT margin before special items: 26% (down from 27%).

• Net profit: DKK 1,397 million (up 34% year-over-year, due to last year's non-recurring tax expense); adjusted diluted EPS before special items down 1%.

• Free cash flow: DKK 1,821 million (down 3% year-over-year, but up 8% excluding last year’s divestment benefit); free cash flow-to-sales ratio: 26%.

• Operating cash flow was DKK 2.2 billion (up from DKK 2 billion); CAPEX in Q1 was DKK 414 million (6% of revenue), including investment in new Portugal site.

Outlook and guidance

• FY 2025/26 guidance unchanged: ~7% organic revenue growth and ~7% EBIT growth in constant currencies; reported revenue growth in DKK expected at 4%.

• ROIC after tax before special items expected at ~16%.

• Capex-to-sales ratio expected at ~5%; effective tax rate at ~22%.

• Interventional Urology growth outlook raised to high single digits; Kerecis growth revised to ~10% due to Medicare changes.

• EBIT margin for Kerecis expected to recover to double digits for the full year after 1% in Q1.