Coloplast Release: Announcement No. 3/2017 - Interim Financal Report, H1 2016/17

(1 October 2016 - 31 March 2017)

Highlights

·       Organic revenue growth was 6%. Revenue in DKK was up by 5% to DKK 7,636m.  

·       Organic growth rates by business area: Ostomy Care 7%, Continence Care 6%, Urology Care 11% and Wound & Skin Care 0%.

·       The US Chronic Care business reported double-digit organic sales growth in the second quarter.

·       Sales growth in the Wound and Skin Care business was adversely affected by the US Skin Care business’ very strong performance in the second quarter of last year. This was partly offset by a positive momentum in Wound Care in China in the second quarter.

·       The SenSura® Mio Hospital Assortment is launched today and will be available in all core markets within the next 12 months. The Brava® Protective Seal accessory launched last year is now available in 13 countries.

·       The Q2 gross margin was adversely affected by restructuring costs of about DKK 13m in relation to the reduction of production employees in Denmark.

·       EBIT was up by 8% at constant exchange rates and by 5% in DKK to stand at DKK 2,472m. The EBIT margin was 33% at constant exchange rates, against 32% last year.

·       The net profit for the reporting period was up by 8% to DKK 1,877m. Diluted earnings per share were up by 8% to DKK 8.84.

·       The free cash flow was negative at DKK 648m, DKK 1,834m less than in the same period of last year. Adjusted for payments made in connection with lawsuits alleging injury resulting from the use of transvaginal surgical mesh products, the acquisition of Comfort Medical, and timing differences in tax payments, the underlying free cash flow was in line with last year’s free cash flow.

·       The integration of the US distributor Comfort Medical acquired at the end of 2016, is proceeding according to plan.

·       The second part of the share buy-back programme totalling DKK 1bn running until the end of the 2016/17 financial year was launched in the second quarter 2016/17.

·       The Board of Directors has resolved that Coloplast will pay an interim dividend of DKK 4.50 per share for a dividend pay-out of DKK 955m.

Financial guidance for 2016/17

·       We continue to expect organic revenue growth of 7-8% at constant exchange rates and reported growth of 7-8% in DKK.

·       The EBIT margin guidance remains at 33-34% at constant exchange rates and at about 33% in DKK.

·       Capital expenditure is still expected to be around DKK 700m.

·       We continue to expect the effective tax rate to be about 23%.