Coloplast (COLO) Q4 23/24 earnings summary

Executive summary

• Achieved 8% organic growth and 10% reported revenue growth for FY 2023/24, with EBIT margin before special items at 27% and return on invested capital at 15%, driven by strong performance in Chronic Care, Voice and Respiratory Care, Advanced Wound Care, and the Kerecis acquisition.

• Kerecis contributed 4 percentage points to reported growth and delivered ~35% underlying growth, with revenue of DKK 1,026 million.

• Extraordinary costs and currency headwinds impacted margins, mainly due to U.S. distribution center transition and Kerecis dilution; normalization expected by H1 2024/25.

• Executive Leadership Team expanded to support new growth platforms and the 2030 strategy.

• Strategic focus on innovation, sustainability, and operational efficiency, with new product launches and manufacturing expansion.

Financial highlights

• Reported revenue increased by DKK 2.5 billion (10%) to DKK 27,030 million; organic growth contributed DKK 1.9 billion (8%).

• Gross profit reached DKK 18.3 billion, with a gross margin of 68% (up from 67%), supported by Kerecis.

• Operating profit before special items was DKK 7,286 million, up 6% year-over-year; EBIT margin before special items was 27% (down from 28%).

• Net profit before special items increased by 4% to DKK 5,052 million; diluted EPS before special items was DKK 22.34 (down 1%).

• Free cash flow was DKK 1.4 billion, or DKK 3.9 billion adjusted for extraordinary tax payments.

Outlook and guidance

• FY 2024/25 guidance: organic revenue growth of 8-9%, EBIT margin before special items around 28%, and gross margin of ~68%.

• Kerecis expected to contribute ~1 percentage point to group organic growth, assuming continued LCD coverage.

• CapEx expected at DKK 1.4 billion; net financial expenses forecast at DKK 750 million; effective tax rate at 22%.

• Net working capital to sales ratio expected at ~24-25%.

• Long-term organic growth target of 8-10% p.a. and EBIT margin above 30% beyond 2024/25.