COLOPLAST A/S Announcement no. 10/2016
2 November 2016
2015/16 Announcement of full-year financial results 2015/16(1 October 2015 - 30 September 2016)
Coloplast A/S Holtedam 1 DK-3050
Humlebæk Denmark
CVR no. 69749917
HighlightsOrganic revenue growth was 7%. Revenue in DKK was up by 6% to DKK 14,681m.
Organic growth rates by business area: Ostomy Care 9%, Continence Care 5%, Urology Care 9% and Wound & Skin Care 6%.
Gross profit was up by 5% to DKK 10,032m. At constant exchange rates, the gross margin was 69% compared to 68% last year. In DKK, the gross margin was 68%, against 69% last year.
EBIT before special items was up by 7% to DKK 4,846m. The EBIT margin before special items was 34% at constant exchange rates, against 33% last year. Measured in DKK, the EBIT margin was 33%.
EBIT was impacted by a further provision of DKK 750m to cover potential settlements and costs in connection with the lawsuits in the United States alleging injury resulting from the use of transvaginal surgical mesh products designed to treat pelvic organ prolapse and stress urinary incontinence.
EBIT after special items was DKK 4,096m for an EBIT margin after special items of 28% at constant exchange rates. Measured in DKK, the EBIT margin was 28%.
The full-year net profit before special items was up by 15% to DKK 3,728m, while diluted earnings per share before special items were also up by 15% to DKK 17.53.
Net profit for the year after special items was DKK 3,143m, against DKK 899m last year.
The free cash flow amounted to DKK 2,425m, DKK 444m (15%) less than last year. Adjusted for payments made in connection with lawsuits alleging injury resulting from the use of transvaginal surgical mesh products, the free cash flow was an inflow of DKK 4,023m against DKK 2,786m in 2014/15.
ROIC after tax before special items was 49% against 48% last year.
The Board of Directors recommends that the shareholders attending the general meeting to be held on 5 December 2016 approve a year-end dividend of DKK 9.0 per share. This brings the dividend paid for the year to DKK 13.5 per share, as compared with DKK 12.5 per share last year.
Financial guidance for 2016/17We expect organic revenue growth of 7-8% at constant exchange rates and of 5-6% in DKK.
We expect an EBIT margin of 33-34% at constant exchange rates and at about 33% in DKK.
Capital expenditure is expected to be about DKK 700m.
The effective tax rate is expected to be about 23%.
Conference call
Coloplast will host a conference call on 2 November 2016 at 15.00 CET. The call is expected to last about one hour. To attend the conference call, call +45 3271 4607, +44 (0)20 7162 0077 or +1 646 851 2407. Conference call reference no. 960109.
A webcast will be posted on www.coloplast.com shortly after the conclusion of the conference call.
Financial highlights and key ratios 1 October - 30 September | ||||
(Unaudited) | ||||
Consolidated | DKK million | DKK million | ||
2015/16 2014/15 | 2015/16 2014/15 | |||
12 mths 12 mths | Change | Q4 Q4 | Change | |
Income statement | ||||
Revenue | 14,681 13,909 | 6% | 3,739 3,621 | 3% |
Research and development costs | -509 -442 | 15% | -129 -114 | 13% |
Operating profit before interest, tax, depreciation and amortisation (EBITDA) | 4,624 2,020 | >100% | 669 -1,629 | |
Operating profit (EBIT) before special items | 4,846 4,535 | 7% | 1,284 1,249 | 3% |
Special items | -750 | -3,000 | -75% -750-3,000 | -75% |
Operating profit (EBIT) | 4,096 | 1,535 | >100% 534-1,751 | |
Net financial income and expenses | -13 | -289 | -96% 18-56 | |
Profit before tax | 4,082 | 1,245 | >100% 551-1,808 | |
Net profit for the year | 3,143 | 899 | >100% 424-1,422 | |
Revenue growth | ||||
Period growth in revenue, % | 6 | 12 | 3 13 | |
Growth break down: | ||||
Organic growth, % | 7 | 7 | 7 8 | |
Currency effect, % | -1 | 5 | -4 5 | |
Balance sheet | ||||
Total assets | 11,007 | 10,817 | 2% 11,00710,817 | 2% |
Capital invested | 5,551 | 4,702 | 18% 5,5514,702 | 18% |
Equity end of period | 5,068 | 4,706 | 8% 5,0684,706 | 8% |
Cash flow and investments | ||||
Cash flow from operating activities | 3,028 | 3,337 | -9% 1,3261,379 | -4% |
Cash flow from investing activities | -603 | -468 | 29% -544-460 | 18% |
Investments in property, plant and equipment, gross | -627 | -583 | 8% -257-157 | 64% |
Free cash flow | 2,425 | 2,869 | -15% 782919 | -15% |
Cash flow from financing activities | -2,868 | -2,963 | 3% 3514 | >100% |
Key ratios Average number of employees, FTEs | 9,817 | 9,303 | ||
Operating margin, EBIT, % | 28 | 11 | 14 -48 | |
Operating margin before special items, EBIT before special items, % | 33 | 33 | 34 34 | |
Operating margin, EBITDA, % | 31 | 15 | 18 -45 | |
Return on average invested capital before tax (ROIC), %1) | 63 | 62 | 66 64 | |
Return on average invested capital after tax (ROIC), %1) | 49 | 48 | 51 49 | |
Return on equity, % | 69 | 16 | 35 -102 | |
Equity ratio, % | 46 | 44 | 46 44 | |
Net asset value per outstanding share, DKK | 24 | 22 | 9% 2422 | 9% |
Share data | ||||
Share price, DKK | 514 | 473 | 9% 514473 | 9% |
Share price/net asset value per share | 21.5 | 22.1 | -3% 21.522.1 | -3% |
Average number of outstanding shares, millions | 211.7 | 211.2 | 0% 211.6211.3 | 0% |
PE, price/earnings ratio | 29.2 | 111.0 | -74% 26.9-17.6 | |
Dividend per share, DKK1) | 13.5 | 12.5 | 8% | |
Pay-out ratio, %2) | 76.7 | 81.6 | -6% | |
Earnings per share (EPS), diluted | 14.78 | 4.20 | >100% 2.00-6.68 | |
Free cash flow per share | 11.4 | 13.6 | -16% 3.74.1 | -10% |
This item is before Special items. After Special items, ROIC before tax is 80%/28%, and ROIC after tax is 62%/21%.
This item is before Special items. After Special items, the pay-out ratio is 91%/294%.
Management's report
Sales performance
Revenue in DKK was up by 6% to DKK 14,681m on 7% organic growth. Currency depreciation against DKK, especially of GBP and ARS, was partly offset by USD appreciation, but exchange rate developments in general reduced revenue growth by 1 percentage point. Q4 revenue in DKK was up by 3% to DKK 3,739m on 7% organic growth. Currency depreciation against DKK, especially of GBP and ARS, reduced revenue growth by 4 percentage points.
Sales performance by business areaDKK million Growth composition
DKK million
Organic
2015/16 12 mths | 2014/15 12 mths | Organic growth | Exchange rates | Reported growth | 2015/16 Q4 | growth Q4 | |
Ostomy Care | 5,935 | 5,567 | 9% | -2% | 7% | 1,519 | 8% |
Continence Care | 5,182 | 5,019 | 5% | -2% | 3% | 1,343 | 6% |
Urology Care | 1,497 | 1,359 | 9% | 1% | 10% | 376 | 11% |
Wound & Skin Care | 2,067 | 1,964 | 6% | -1% | 5% | 501 | 3% |
Net revenue | 14,681 | 13,909 | 7% | -1% | 6% | 3,739 | 7% |
DKK million 2015/162014/15 12 mths 12 mths | Growth composition Organic Exchange Reported growth rates growth | DKK million 2015/16 Q4 | Organic growth Q4 | ||
European markets | 9,213 | 8,843 | 6% -2%4% | 2,270 | 5% |
Other developed markets | 3,177 | 2,945 | 6% 2%8% | 886 | 10% |
Emerging markets | 2,291 | 2,121 | 14% -6%8% | 583 | 9% |
Net revenue | 14,681 | 13,909 | 7% -1%6% | 3,739 | 7% |
Ostomy Care
The full-year sales of ostomy care products amounted to DKK 5,935m, a 7% increase in DKK. Organic growth, at 9%, remained driven mainly by the portfolio of SenSura® products and the Brava® accessories range.
The SenSura® portfolio generated highly satisfactory sales growth, driven in part by performance in the UK, Germany, the Nordic markets and the USA. In particular, the performance of the SenSura® Mio products continued to lift sales growth with the Sensura® Mio Convex range contributing to the growth momentum.
The SenSura® Mio Convex is now available in 16 countries, and feedback on the product remains highly positive. Coloplast encountered capacity shortages of SenSura® Mio Convex products during the third quarter of 2015/16 due to demand being much greater than anticipated. Additional capacity will become available during the 2016/17 financial year.
The Assura/Alterna® portfolio generated satisfactory sales growth, driven mainly by the Chinese, Russian and Algerian markets and with
Argentina also contributing high full-year growth rates.
The Brava® range of accessories generated a satisfactory sales performance, driven mainly by the French, Chinese and UK markets.
From a country perspective, the UK reported highly satisfactory sales growth, supported by the performance of the Charter homecare business, which continues to win market share. China, Russia, the Nordic markets and Argentina were also positive contributors to growth. While contributing to sales growth, China reported slightly weaker growth rates compared to last year. The positive performance in Russia was due to an increase in tender activity in the first half of the financial year and satisfactory growth in the second half.
Q4 organic growth was 8%. As for the full-year period, the SenSura® portfolio and the Brava® range of accessories contributed strongly to performance. The sales growth of the SenSura® portfolio in the UK, Germany, the Nordic markets and the USA continued to drive performance. As in the third quarter, the SenSura® Mio Convex range supported the strong sales momentum of the
SenSura® Mio portfolio. Q4 sales growth was negatively impacted by back orders on urostomy bags due to quality issues experienced by an external raw materials supplier. The back order situation is expected to normalise in the first quarter of the 2016/17 financial year. Sales growth in the Brava® range of accessories was driven mainly by the positive performance in China following the launch of Brava® accessories in that market. The French and UK markets also contributed to performance.
From a country perspective, China and the UK reported satisfactory growth rates, while the USA and Brazil also performed well. In the Chinese market, sales of the Assura/Alterna® and the Brava® portfolio performed particularly well.
The global market for ostomy care products is worth an estimated DKK 15-16bn with annual market growth forecast at 4-5%. Coloplast is the global market leader, holding a market share of 35-40%. The ostomy accessories market is estimated at about DKK 2bn with annual market growth estimated at 6-8%. Coloplast currently holds 25- 30% of the accessories market.
Continence Care
Continence Care generated full-year revenue of DKK 5,182m, a 3% improvement in DKK and 5% organically. Sales of SpeediCath® intermittent catheters and Peristeen® drove growth in the period. Positive trends in sales of compact catheters in the UK, French and German markets were the main drivers, but the Nordic markets and Italy also reported satisfactory growth.
Sales growth in standard catheters remained challenged, due to distributor buying patterns and inventory reductions in the US market and a lower tender value in Saudi Arabia compared with last year. Sales in Argentina and an increase in tender activity in Russia supported growth.
The slightly positive sales performance in urine bags and urisheaths was based on an improved momentum in Russia and France, but growing competition in the Netherlands had a negative impact.
Sales of Peristeen® continued to grow at a fair rate, driven by good performances in the UK, the US and France.
From a country perspective, the UK was a positive contributor to growth in the Continence Care business due to satisfactory growth in the Charter homecare business. Also, France and Argentina reported momentum improvements, and there was an increase in tender activity in the Russian market, particularly in the first half of the financial year. For
the reasons mentioned above, sales growth was challenged by developments in the US market and in Saudi Arabia.
Q4 organic growth, at 6%, was driven by SpeediCath® intermittent catheters and Peristeen®. Sales of compact catheters in the French and UK markets contributed particularly well to performance. Especially Argentina and the USA reported satisfactory sales of standard catheters, but the performance was offset by the lower tender value in Saudi Arabia compared with last year.
Urine bag sales in China and growing competition in the Netherlands had a negative impact on growth in sales of urine bags and urisheaths.
Sales of Peristeen® improved in most markets, particularly in the USA, UK and France.
From a country perspective, the UK, France, Argentina and the USA contributed to sales growth, whereas Saudi Arabia and China detracted from performance. In addition, catheter sales in the Netherlands and Norway were adversely affected by price reforms.
The part of the continence care market Coloplast competes in is worth an estimated DKK 12bn.
Annual market growth is estimated at 5-6%. Coloplast is the global market leader, with a market share of about 40%.
Urology Care
Sales of urology care products were up by 10% to DKK 1,497m for the full year, while the organic growth rate was 9%.
Growth remained driven mainly by implant sales, especially of Titan® penile implants in the US market. In addition, sales of Altis® slings and Restorelle® products designed to treat stress urinary incontinence and pelvic organ prolapse contributed to growth in the US market, in which Coloplast successfully took market share.
Growth in sales of disposable surgical products was supported by healthy sales in France, but were dented by lower tender activity in Brazil and Saudi Arabia.
From a country perspective, the US market continued to drive the Urology Care business, but Europe, and France in particular, also contributed, whereas especially Brazil detracted from growth.
The Q4 organic growth rate, at 11%, was mainly driven by Altis® slings, Titan® penile implants and Restorelle® products in the US market, in which Coloplast continued to win market share. Sales of disposable surgical products were supported by sales growth in France and Germany, but were
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Coloplast A/S published this content on 02 November 2016 and is solely responsible for the information contained herein.
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