Coloplast A/S : delivers satisfactory full-year results and increases long-term growth ambitions

Coloplast is presenting a new long-term guidance for the LEAD20 strategy period. This new guidance is driven by changing market dynamics which create opportunities to accelerate growth. Furthermore, Coloplast intends to pursue inorganic opportunities to further strengthen our service offering to the consumer. Organic revenue growth guidance is maintained at 7-9% p.a., and the ambition is to reach the upper end of the interval. Consequently, the EBIT margin guidance is changed from a 50-100 basis point improvement p.a., to a guidance of delivering an EBIT margin of more than 30% in constant currencies.

Coloplast delivered organic growth of 8% in the fourth quarter of the 2016/17 financial year, equal to a 6% revenue increase to DKK 3,980m when measured in Danish kroner.

For the full-year, Coloplast delivered 7% organic revenue growth. When measured in Danish kroner, full-year revenue was up by 6% to DKK 15,528m.

EBIT amounted to DKK 5,024m adjusted for the one-off payment to Veterans Affairs, a 9% increase at constant exchange rates (4% in DKK). The EBIT margin was 33% at constant exchange rates and adjusted for the one-off payment to Veterans Affairs, which was in line with last year's EBIT margin. The result is consistent with the company's guidance.

Full-year organic growth rates by business area: Ostomy Care 7%, Continence Care 7%, Urology Care 10%, and Wound & Skin Care 4%. Several major product launches contributed to the organic growth, including SenSura Mio Convex, SpeediCath Flex and Brava Protective Seal.

Full-year organic growth rates by sales region: European markets 5%, Other Developed Markets 8% and Emerging Markets 13%.

'We're delivering a strong fourth quarter and satisfactory full-year results driven by solid growth in Europe and accelerated momentum in Emerging Markets and Other Developed Markets. The 2016/17 financial year was characterised by several product launches, all of which contributed to the organic growth. Our full-year growth rate was well above the global market growth, and we continued to gain market share across all business areas,' said Coloplast CEO Lars Rasmussen.

'Furthermore, we are presenting a new long-term financial guidance for our global strategy towards 2020. This is driven by changing market dynamics and opportunities to further accelerate growth,' said Mr Rasmussen.

New plan for Global Operations

A new Global Operations Plan is being introduced as part of Coloplast's global strategy towards 2020. The plan is to deliver EBIT margin improvements of about 150 basis points with full effect from the 2020/2021 financial year.

As part of the Global Operations Plan, Coloplast expects to consolidate all pilot activities at Coloplast's innovation site in Mørdrup, north of Copenhagen, and phase out the Thisted factory over a two-year period.

Financial guidance 2017/18
Coloplast is expecting organic revenue growth of about 7% at constant exchange rates and of 5-6% in Danish kroner. The guidance includes a potential negative effect of DKK 100m due to the patent expiry of SpeediCath standard catheters. The guidance also includes the effects of a comprehensive healthcare reform in Greece of DKK 100m, which is expected to impact all business areas, resulting in a price pressure of more than 1% in the year.

The EBIT margin is expected to be 31-32% at constant exchange rates and about 31% in Danish kroner. The EBIT margin guidance is impacted by an increase in commercial investments from about 1% of the revenue to about 2% of the revenue.

Capital expenditure is expected to be about DKK 700m, and the effective tax rate is expected to be about 23%.

Coloplast's Annual Report and Corporate Responsibility Report will be released later today.

Click here https://www.coloplast.com/investor-relations/annual-reports/ to read the Annual Report and here https://www.coloplast.com/about-coloplast/responsibility/policies/ to read Coloplast's Corporate Responsibility Report.

dkebj@coloplast.com