Coloplast (COLO) Q2 24/25 earnings summary

Executive summary

• Organic growth for H1 2024/25 was 7%, with reported revenue up 6% to DKK 13,956 million; EBIT margin before special items steady at 27%.

• Growth was broad-based except for Interventional Urology, which was flat due to a product recall.

• CEO transition occurred, with Lars Rasmussen appointed interim CEO following Kristian Villumsen's departure.

• Strategic focus includes sustainable growth, innovation, operational efficiency, and a new five-year plan to be presented at the September Capital Market Day.

• Skin Care divestment completed, supporting profitability improvement.

Financial highlights

• H1 reported revenue grew 6% to DKK 13,956 million, with organic growth of 7%.

• Gross margin remained at 68%, supported by favorable input costs and product mix.

• EBIT before special items increased 5% to DKK 3,803 million; EBIT margin before special items was 27%.

• Adjusted net profit before special items was DKK 2,666 million, up DKK 175 million year-over-year; adjusted diluted EPS was DKK 11.83.

• Free cash flow for H1 was DKK 2,307 million, a significant improvement from last year’s outflow; FCF-to-sales ratio was 15%.

Outlook and guidance

• FY 2024/25 organic revenue growth guidance revised to around 7% (from 8-9%), with EBIT margin before special items expected at 27-28%.

• Reported revenue growth in DKK expected at 4%, reflecting currency and divestment impacts.

• Interventional Urology growth expected at 0% for the year; higher uncertainty in Emerging markets and China.

• Special items for the year expected at DKK 450 million, mainly for restructuring and asset write-downs.

• CapEx projected at around DKK 1.4 billion; long-term organic growth target 8-10% p.a.