Coloplast A/S: Delivering Growth and Value in FY 2023/24

Coloplast A/S, a leading provider of intimate healthcare solutions, delivered a solid full-year result for FY 2023/24, with 8% organic growth and a 27% EBIT margin. The company's broad-based performance across business areas, strategic initiatives, and acquisitions drove its impressive financial performance.

Coloplast's organic growth was fueled by strong contributions from its business areas. Ostomy Care contributed 7% to organic growth, with Emerging markets holding back growth. Continence Care grew 8%, broad-based across segments, including significant contributions from Luja™. Advanced Wound Care grew 10%, led by Skin Care and offset by lower growth in dressings due to higher baseline and order phasing in Germany. The acquisition of Kerecis contributed 4%-points to reported growth, with underlying growth of around 35%.

The Kerecis acquisition played a significant role in Coloplast's FY 2023/24 organic growth, contributing 4%-points to reported growth. Kerecis' underlying growth of around 35% was in line with expectations and positively impacted Coloplast's overall performance. Despite a 100 basis points negative impact on the EBIT margin due to Kerecis, the company's EBIT margin remained strong at 27%.

Coloplast's strategic initiatives, such as product launches and market expansion, significantly contributed to its 8% organic growth in FY 2023/24. The company's new intermittent catheter, Luja™, launched in Continence Care, drove growth through its positive customer feedback and significant market penetration. Additionally, the ongoing launch of the female Luja catheter further expanded Coloplast's product portfolio and market reach. In Advanced Wound Care, the strong quarter in Advanced Wound Dressings reflected continued good momentum and benefited from a lower baseline in Q3 last year. Furthermore, Coloplast's acquisition of Kerecis contributed 4%-points to reported growth, with an underlying growth of around 35%, in line with expectations. These strategic initiatives, coupled with broad-based growth across regions and business areas, fueled Coloplast's impressive financial performance in FY 2023/24.

Coloplast's 27% EBIT margin in FY 2023/24 was driven by broad-based organic growth across business areas, with Chronic Care and Advanced Wound Care performing particularly well. The company managed to maintain this margin despite the dilution from Kerecis through margin improvement initiatives in Advanced Wound Care and lower inflationary pressure on input costs. Additionally, Coloplast benefited from lower baseline comparisons in certain segments, such as Advanced Wound Dressings, and continued market share gains for Kerecis.

In conclusion, Coloplast A/S delivered a strong performance in FY 2023/24, driven by broad-based growth across business areas and strategic initiatives. Despite challenges, the company maintained a solid EBIT margin and demonstrated its resilience and growth potential. Coloplast's impressive financial performance, coupled with its strong fundamentals and low-risk business model, makes it an attractive investment opportunity for value-oriented investors seeking exposure to the healthcare sector.