Announcement no. 04/2023
17 August 2023
1
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
9M 2022/23
Interim financial results, 9M 2022/23
1 October 2022 - 30 June 2023
Coloplast delivered Q3 organic growth of 8% and 28% EBIT margin
1)
. Reported revenue in DKK grew 4% to 6,108 million
• Organic growth rates by business area: Ostomy Care 8%, Continence Care 9%, Voice and Respiratory Care 9%, Wound and
Skin Care 4% (Wound Care 5%), and Interventional Urology 7%.
• Continued good momentum across regions in Chronic Care. China Ostomy Care posted double-digit growth, reflecting a
lower baseline last year and fully normalised hospital access and level of procedural volumes. Strong quarter in Continence
Care, with solid contribution from all product categories, including Collecting Devices where backorders have been resolved.
• Continued solid momentum in Voice and Respiratory Care, driven by both the laryngectomy and tracheostomy businesses.
• Growth in Wound Care was driven by double-digit growth in China, which benefited from a low baseline and normalised
hospital activity. Good underlying momentum in Europe, despite continued impact from backorders, as expected.
• Continued solid momentum in Interventional Urology with broad-based growth, against a high baseline last year.
• EBIT
1)
was DKK 1,686 million, a 4% decrease from last year. The EBIT margin
1,2)
was 28% against 30% last year, reflecting
mostly inflationary headwind on input costs. Impact from currencies in the quarter was negative.
• Special items were an income of DKK 28 million. This includes a reversal of DKK 244 million related to Atos Medical US
billing compliance, with a remaining provision of DKK 90 million. In addition, a further and final provision of DKK 200 million
was made related to the Multi-District Litigation (MDL) cases in the US alleging injury from the use of transvaginal surgical
mesh products. With this, Coloplast considers the MDL cases closed. Atos integration costs amounted to DKK 16 million.
9M 2022/23 organic growth of 8% and 28% EBIT margin
1)
. Reported revenue in DKK grew 11% to DKK 18,274 million
• Organic growth rates by business area: Ostomy Care 7%, Continence Care 7%, Voice and Respiratory Care 9% (5 months),
Wound and Skin Care 6% (Wound Care 4%), and Interventional Urology 11%.
• EBIT
1)
was DKK 5,131 million, up 1% from last year. The EBIT margin
1,2)
was 28% against 31% last year, reflecting
inflationary headwind on input costs, an increase in operating expenses and DKK 159 million Atos Medical amortisation cost.
• ROIC after tax before special items was 19% against 26% last year, negatively impacted by the Atos Medical acquisition.
On 7 July 2023, Coloplast announced the acquisition of Kerecis and as a result raised long-term growth guidance to 8-10%,
from previously 7-9%. The long-term EBIT margin guidance was maintained at above 30% beyond 2024/25
3)
• Kerecis is an innovative, fast-growing company with a clinically differentiated technology platform based on minimally
processed fish skin and a strong commercial presence in the US. With Kerecis, Coloplast enters the high-growth, US-centric
biologics wound care segment and adds a long-term growth business with strong profitability expansion potential, well
positioned for long-term value creation.
• Kerecis is expected to contribute around 1%-point to organic growth as of 2024/25, with short-term margin dilution.
• Around 99% of Kerecis’ shareholders have agreed to sell their shares to Coloplast, and the transaction is on track to close in
Q4 2022/23. The acquisition will be financed through an equity capital raise, expected to be completed in Q4 2022/23.
FY 2022/23 financial guidance
• Organic revenue growth continues to be expected around 8%. Reported revenue growth is still expected at 8-9%.
• The reported EBIT margin before special items
1)
is still expected at 28-29%, with unchanged underlying assumption.
• Capital expenditures are now expected around DKK 1.3 billion. The effective tax rate is still expected to be around 21%.
”We deliver a solid Q3 with 8% organic growth and an EBIT margin of 28%, which is in line with our financial guidance. We
continue to take market share broadly across our business areas and regions. In China, our Ostomy Care and Wound Care
businesses delivered double-digit growth in the quarter, which makes me very optimistic about our long-term growth prospects
in this important market. Finally, in early July, we acquired Kerecis, and we are excited to start working with our new colleagues
once the deal has officially closed in Q4,” says President and CEO Kristian Villumsen.
1) before special items income of DKK 28 million in Q3 2022/23 and before special items expenses of DKK 5 million in 9M 2022/23. Special items expense of around DKK 50 million expected
for FY 2022/23, of which an income of DKK 244 million related to Atos Medical billing provision reversal, DKK 200 million related to the US cases alleging injury from the use of transvaginal
surgical mesh product, around DKK 50 million related to Atos Medical integration and around DKK 50 million transaction related costs from the acquisition of Kerecis. 2) before special items
expenses of DKK 20 million in Q3 2021/22 and DKK 435 million in 9M 2021/22. 3) For the remaining Strive25 strategic period running until end 2024/25, the EBIT margin is now expected to
remain below 30%, and assumes dilution of around 100 basis points p.a. from Kerecis (including PPA amortisation)
Holtedam 1
DK-3050 Humlebaek,
Denmark
Company reg. (CVR)
no. 6974 9917
Conference call
Coloplast will host a conference call on Thursday, 17 August 2023 at 10.30 CEST. The call is expected to last about one hour.
To actively participate in the Q&A session please sign up ahead of the conference call on the link here to receive an e-mail with dial-in details Register here
Access the conference call webcast directly here: 9M 22/23 conference call
Announcement no. 04/2023
17 August 2023
2
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Financial highlights and key ratios
1 October 2022 – 30 June 2023, unaudited
Consolidated
2022/23
2021/22
2022/23
2021/22
9 mths
9 mths
Change
Q3
Q3
Change
Income statement, DKK million
Revenue
18,274
16,520
11%
6,108
5,849
4%
Research and development costs
-641
-649
-1%
-216
-222
-3%
Operating profit before interest, tax, depr. and amort. (EBITDA)
before special items
5,923
5,767
3%
1,949
2,021
-4%
Operating profit before interest, taxes and amortization (EBITA)
before special items
5,376
5,270
2%
1,764
1,848
-5%
Operating profit (EBIT) before special items
5,131
5,096
1%
1,686
1,761
-4%
Special items
-5
-435
N/A
28
-20
N/A
Operating profit (EBIT)
5,126
4,661
10%
1,714
1,741
-2%
Net financial income and expenses
-628
-146
N/A
-104
-70
49%
Profit before tax
4,498
4,515
0%
1,610
1,671
-4%
Net profit for the period
3,554
3,476
2%
1,272
1,289
-1%
Revenue growth, %
Period growth in revenue, %
11
15
4
21
Growth break down:
Organic growth, %
8
7
8
8
Currency effect, %
-1
3
-4
4
Acquired operations, %
4
5
-
9
Balance sheet, DKK million
Total assets
35,087
35,185
0%
35,087
35,185
0%
Capital invested
29,049
28,312
3%
29,049
28,312
3%
Net interest-bearing debt (NIBD)
21,263
19,741
8%
21,263
19,741
8%
Equity end of period
6,490
7,275
-11%
6,490
7,275
-11%
Cash flow and investments, DKK million
Cash flows from operating activities
2,345
2,959
-21%
1,169
1,578
-26%
Cash flows from investing activities
-655
-11,358
-94%
-274
-262
5%
Investments in property, plant and equipment, gross
-696
-619
12%
-264
-210
26%
Free cash flow
1,690
-8,399
N/A
895
1,316
-32%
Cash flows from financing activities
-1,204
8,550
N/A
-655
-1,221
-46%
Key ratios
Average number of employees, FTEs¹⁾
15,022
14,433
Operating margin (EBIT margin) before special items, %
28
31
28
30
Operating margin (EBIT margin), %
28
28
28
30
Operating margin before interest, tax, depr. and amort., (EBITDA
margin), %
32
32
32
34
Gearing ratio, NIBD/EBITDA before special items
2.7
2.6
2.7
2.4
Return on average invested capital before tax (ROIC), %²⁾
24
34
23
24
Return on average invested capital after tax (ROIC), %²⁾
19
26
18
19
Return on equity, %
70
65
75
71
Equity ratio, %
18
21
18
21
Net asset value per outstanding share, DKK
28
34
-18%
28
34
-18%
Share data
Share price, DKK
853
808
6%
853
808
6%
Share price/net asset value per share
30.5
23.6
29%
30.5
23.6
29%
Average number of outstanding shares, millions
212.4
212.6
0%
212.4
212.4
0%
PE, price/earnings ratio
38.3
37.1
3%
35.6
33.3
7%
Earnings per share (EPS), diluted
16.73
16.32
3%
5.98
6.06
-1%
Earnings per share (EPS) before special items, diluted
16.74
17.90
-6%
5.88
6.13
-4%
Free cash flow per share
8.0
-39.5
N/A
4.2
6.2
-32%
1
⁾ 2021/22 figures include Atos Medical employees at the end of the period. Number of FTEs at the end of June 2023 was 15,071, compared to 14,581 FTEs at the end of June 2022.
²⁾ Before special items. After special items, ROIC before tax was 24% (2021/22: 31%), and ROIC after tax was 19% (2021/22:24%).
Announcement no. 04/2023
17 August 2023
3
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Sales performance
The organic growth was 8% in the first nine months of 2022/23. Reported revenue in DKK was up by 11% to DKK 18,274
million. Exchange rate development decreased revenue by 1%-point, mainly related to the depreciation of GBP and several
emerging markets currencies against DKK. Revenue from acquisitions contributed 4%-points to reported growth as a result of
the acquisition of Atos Medical in the second quarter of 2021/22 (4 months impact).
Organic growth in the third quarter was 8%. Reported revenue in DKK was up by 4% to DKK 6,108 million. Exchange rate
developments decreased revenue by 4%, mainly related to depreciation of the USD, GBP, and several emerging markets
currencies against DKK.
* Growth contributions from exchange rates constitute residual values and may be impacted by the rounding of numbers.
Sales performance by business areas
DKK million
Growth composition (9 mths)
2022/23
(9 mths)
2021/22
(9 mths)
Organic
growth
Acquired
operations
Exchange
rates*
Reported
growth
Ostomy Care
6,724
6,367
7%
-
-1%
6%
Continence Care
5,944
5,613
7%
0%
-1%
6%
Voice and Respiratory Care
1,450
757
9%
83%
0%
92%
Wound and Skin Care
2,125
2,001
6%
-
0%
6%
Interventional Urology
2,031
1,782
11%
-
3%
14%
Revenue
18,274
16,520
8%
4%
-1%
11%
DKK million
Growth composition (Q3)
2022/23
(Q3)
2021/22
(Q3)
Organic
growth
Acquired
operations
Exchange
rates*
Reported
growth
Ostomy Care
2,246
2,160
8%
-
-4%
4%
Continence Care
1,993
1,892
9%
-
-4%
5%
Voice and Respiratory Care
491
459
9%
-
-2%
7%
Wound and Skin Care
700
695
4%
-
-3%
1%
Interventional Urology
678
643
7%
-
-1%
6%
Revenue
6,108
5,849
8%
-
-4%
4%
Sales performance by region
DKK million
Growth composition (9 mths)
2022/23
(9 mths)
2021/22
(9 mths)
Organic
growth
Acquired
operations
Exchange
rates*
Reported
growth
European markets
10,404
9,536
5%
4%
0%
9%
Other developed markets
4,757
4,112
10%
5%
1%
16%
Emerging markets
3,113
2,872
12%
1%
-5%
8%
Revenue
18,274
16,520
8%
4%
-1%
11%
DKK million
Growth composition (Q3)
2022/23
(Q3)
2021/22
(Q3)
Organic
growth
Acquired
operations
Exchange
rates*
Reported
growth
European markets
3,526
3,397
5%
-
-1%
4%
Other developed markets
1,570
1,502
8%
-
-3%
5%
Emerging markets
1,012
950
19%
-
-12%
7%
Revenue
6,108
5,849
8%
-
-4%
4%
Announcement no. 04/2023
17 August 2023
4
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Ostomy Care
Ostomy Care generated 7% organic
sales growth for the first nine months of
2022/23, with reported revenue in DKK
growing by 6% to DKK 6,724 million.
The SenSura® Mio portfolio was the
main growth contributor, followed by
the Brava® range of supporting
products. At the product level, SenSura
Mio Convex was the main growth
contributor driven by Europe, in
particular the UK and Germany, as well
as the US. The SenSura and
Assura/Alterna® portfolios continued to
contribute to growth in the Emerging
markets, where they are being actively
promoted, most notably LATAM.
Growth in the Brava range of
supporting products was driven by the
US and Europe, in particular Germany,
and broad-based contribution from
Emerging markets.
From a geographical perspective,
growth was broad-based across
geographies with solid contributions
from Europe, especially the UK and
Germany, the US, and Emerging
markets, led by LATAM.
China had a neutral impact on growth in
the first nine months. Sales returned to
growth in Q3, following a decline in H1
2022/23 due to the negative impact
from COVID-19 related restrictions.
Q3 organic growth was 8% and
reported revenue in DKK increased by
4% to DKK 2,246 million.
The SenSura Mio portfolio was the main
contributor to growth. The Brava range
of supporting products also contributed
to growth in the quarter. At the product
level, SenSura Mio Convex was the main
contributor to growth driven by Europe,
most notably the UK and Germany, as
well as the US. The SenSura and
Assura/Alterna portfolios continued to
contribute to growth in the Emerging
markets, where they are being actively
promoted, most notably China and
LATAM. Revenue growth in the Brava
range of supporting products was
broad-based across geographies, with
solid contributions from the US, Europe,
in particular Germany, France and the
UK, as well as Emerging markets, led by
China.
From a geographical perspective,
growth continued to be broad-based
with a strong quarter in Emerging
markets, led by China, and solid
contributions from the US and Europe,
led by the UK.
China posted double-digit growth in the
quarter, as expected, and benefited
from a lower baseline last year. Hospital
access and procedural volumes fully
normalised during the quarter, resulting
in a return of inflow of new patients
back to pre-COVID levels. The average
value per patient remains below pre-
COVID levels, as expected, as a result of
continued economic uncertainty,
negatively impacting consumer
sentiment.
2.2 billion
Reported revenue
in DKK for Q3
2022/23
Organic growth
Reported growth
Organic growth
Exchange rates
Reported growth
7%
8%
9M 22/23 Q3 22/23
6%
4%
9M 22/23 Q3 22/23
7%
-1%
6%
9M
Growth compo-
sition (9 mths)
Announcement no. 04/2023
17 August 2023
5
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Continence Care
Continence Care generated 7% organic
sales growth for the first nine months of
2022/23, with reported revenue in DKK
growing by 6% to DKK 5,944 million.
The SpeediCath® ready-to-use
hydrophilic intermittent catheters were
the main drivers of revenue growth.
Sales growth in the SpeediCath portfolio
was broad-based across standard,
compact, and flexible catheters, and
driven by Europe, in particular France
and the UK, as well as the US.
SpeediCath Flex Set, a flexible
hydrophilic catheter with a new
integrated sterile bag, has been
launched in nine markets and continues
to perform well. SpeediCath Navi, a
hydrophilic catheter specifically
designed for emerging markets and
lower priced developed markets, also
contributed nicely to growth.
Luja™, the new male intermittent
catheter with a Micro-hole Zone
Technology, has been launched in five
markets, and is off to a good start with
positive customer feedback.
Bowel Management continued to
perform well and contributed nicely to
growth, driven by Peristeen® Plus in the
US and Europe.
Collecting Devices contributed modestly
to growth in the first nine months of
2022/23, as sales were negatively
impacted by backorders on Conveen®
urisheaths in H1 2022/23.
From a geographical perspective,
growth was driven by the US and
broad-based growth across Europe. The
Emerging markets region also
contributed to growth, led by LATAM.
Markets with recent reimbursement
openings, such as Poland, Australia,
Japan, and South Korea, continued to
perform well and posted double-digit
growth.
Q3 organic growth was 9% and
reported revenue in DKK increased by
5% to DKK 1,993 million.
Sales growth in Q3 was broad-based,
driven by the SpeediCath portfolio, and
more specifically compact, standard,
and flexible catheters.
Bowel Management continued to
contribute nicely to growth, with solid
performance in the US and Europe.
Collecting Devices also delivered a solid
contribution to growth, as expected,
following the resolution of the
backorder situation in Q3.
From a geographical perspective, all
regions contributed to growth, led by
the US, Europe, in particular France,
and Emerging markets driven by
LATAM.
2.0 billion
Reported revenue
in DKK for Q3
2022/23
Organic growth
Reported growth
Organic growth
Exchange rates
Reported growth
7%
9%
9M 22/23 Q3 22/23
6%
5%
9M 22/23 Q3 22/23
7%
-1%
6%
9M
Growth compo-
sition (9 mths)
Announcement no. 04/2023
17 August 2023
6
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Voice and Respiratory
Care
Voice and Respiratory Care delivered
reported revenue of DKK 1,450 million
in the first nine months of 2022/23. The
Voice and Respiratory Care acquired
growth contribution to Group reported
growth was 4%-points (4 months
impact), with high-single digit underlying
growth.
The organic growth for the period since
February 1, 2023 (5 months) was 9%,
with solid contribution from both
Laryngectomy and Tracheostomy.
Laryngectomy delivered high single-digit
organic growth. Growth was driven by
an increase in patients served in existing
and new markets and an increase in
patient value driven by the Provox®
Life™ portfolio, Atos Medical’s new
personalised solution and product line
which has been launched in 15 markets.
The Provox Life portfolio is designed to
optimise patient’s breathing ability under
different circumstances, further enabling
24/7 use of Heat and Moisture
Exchangers (HMEs) for improved
pulmonary health.
Tracheostomy and ENT (Ear, Nose and
Throat) posted double-digit organic
growth, driven by solid demand and
positive impact from forward integration
in key European markets.
From a geographical perspective, all
regions contributed to growth, led by
the biggest region Europe. The US also
delivered a solid contribution to growth,
while the fastest growing region was
Emerging markets.
Q3 organic growth was 9% and
reported revenue in DKK increased by
7% to DKK 491 million. Growth in the
quarter was driven by solid momentum
in both Laryngectomy and
Tracheostomy.
Growth in Laryngectomy was high
single-digit and continued to be driven
by growth in patients served in existing
and new markets as well as an increase
in patient value driven by the Provox
Life portfolio.
Tracheostomy and ENT delivered
double-digit growth, with continued solid
demand and positive impact from
forward integration in key European
markets.
From a geographical perspective, all
regions continued to contribute to
growth, driven by Europe, as well as
solid contribution from Other developed
markets and the Emerging markets
region.
The integration of Atos Medical IT and
finance infrastructure is progressing well
and the IT infrastructure
integration was finalised in May. In
addition, Coloplast’s and Atos Medical’s
subsidiaries across a number of markets
were merged into one legally entity
during the quarter. Coloplast remains on
track to deliver estimated run-rate
operational synergies of up to DKK 100
million, with full impact from FY
2023/24.
0.5 billion
Reported revenue
in DKK for Q3
2022/23
Organic growth
Acquired growth
impact
9%
9%
9M 22/23 Q3 22/23
4%
9M 22/23
Announcement no. 04/2023
17 August 2023
7
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Wound and Skin Care
Wound and Skin Care generated 6%
organic sales growth in the first nine
months of 2022/23, with reported
revenue in DKK growing by 6% to DKK
2,125 million.
The wound care business in isolation
delivered 4% organic growth in the first
nine months of 2022/23. Performance
in the period was negatively impacted
by backorders, as expected.
The Biatain® Silicone portfolio was the
main contributor to growth. Biatain
Fiber continues to perform well and also
contributed to growth.
From a geographical perspective,
growth was broad-based across Europe,
the US and Emerging markets.
China contributed to growth in the first
nine months of 2022/23, with solid
performance since the lifting of COVID-
19 restrictions in the country in Q2
2022/23.
The Compeed contract manufacturing
business made a solid contribution to
growth and grew double-digit.
The Skin Care business, which is mostly
a US hospital business, also contributed
to growth in the first nine months of
2022/23.
Q3 organic growth for Wound & Skin
Care was 4%, while reported revenue in
DKK increased by 1% to DKK 700
million.
The wound care business in isolation
delivered 5% organic growth in Q3.
Growth in the quarter was driven by
China, which posted double-digit
growth, as expected, and benefited
from a lower baseline last year. Hospital
access and procedural volumes fully
normalised during the quarter, positively
impacting demand for wound care
products.
The US also performed well and
contributed nicely to growth.
Performance in Europe continued to be
negatively impacted by backorders,
however, the underlying growth
momentum continues to be positive and
driven by solid performance of the
Biatain Silicone portfolio. The resolution
of the backorder situation is progressing
as expected and backorder impact in
Q4 2022/23 is expected to be limited.
The Compeed contract manufacturing
business detracted from growth in the
third quarter due to order phasing, while
the underlying consumer demand
remains healthy.
The Skin Care business delivered a solid
contribution to growth, driven by a
lower baseline in Q3 last year.
0.7 billion
Reported revenue
in DKK for Q3
2022/23
Organic growth
Reported growth
Organic growth
Exchange rates
Reported growth
6%
4%
9M 22/23 Q3 22/23
6%
1%
9M 22/23 Q3 22/23
6%
0%
6%
9M
Growth compo-
sition (9 mths)
Announcement no. 04/2023
17 August 2023
8
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Interventional Urology
Interventional Urology generated 11%
organic sales growth in the first nine
months of the 2022/23 financial year,
with reported revenue in DKK growing
by 14% to DKK 2,031 million.
Growth was broad-based across
business areas and geographies, with
strong contribution from the Men’s
Health business in the US, driven by the
Titan® penile implants. The Endourology
portfolio, driven by Europe, and the
Women’s Health business in the US, also
made solid contributions to growth.
From a geographical perspective, the
US was the main growth contributor,
followed by Europe, most notably
France.
Coloplast has launched its first laser
equipment, Thulium Fiber Laser (TFL)
Drive, in key markets. The launch is off
to a good start with positive customer
feedback. With the launch Coloplast has
entered the lasers segment, worth an
estimated DKK 3 billion.
Q3 organic growth was 7% and
reported revenue in DKK increased by
6% to DKK 678 million.
Revenue growth in the third quarter was
broad-based with continued strong
momentum across business areas and
geographies, against a high baseline in
Q3 last year.
The Endourology portfolio, driven by
Europe, was the main growth
contributor, followed by the US Men’s
Health business and the Titan penile
implants. The Women’s Health business
in the US also contributed to growth.
From a geographical perspective,
growth in the quarter was driven by
Europe with broad-based contribution
across markets, as well as the US.
0.7 billion
Reported revenue
in DKK for Q3
2022/23
Organic growth
Reported growth
Organic growth
Exchange rates
Reported growth
11%
7%
9M 22/23 Q3 22/23
14%
6%
9M 22/23 Q3 22/23
14%
5%
19%
9M
Growth compo-
sition (9 mths)
Announcement no. 04/2023
17 August 2023
9
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Earnings
Gross profit
Gross profit was DKK 12,196 million
compared to DKK 11,359 million last
year and equivalent to a gross margin of
67%, compared to 69% last year. The
gross margin was negatively impacted
by raw material price increases, higher
energy and transportation costs,
double-digit wage inflation in Hungary,
as well as ramp-up costs in Costa Rica.
The above-mentioned negative drivers
were only partly offset by positive
contribution from the inclusion of Atos
Medical, price increases, country and
product mix, as well as operating
leverage and efficiency savings from the
Global Operations Plan 5. Coloplast
continues to have a strong focus on
offsetting the inflationary pressure, with
80+ pricing projects ongoing across
regions and business areas.
The gross margin included neutral
contribution from currencies.
In Q3, gross profit was DKK 4,023
million, corresponding to a Q3 gross
margin of 66% against 69% in Q3 last
year. The Q3 margin was impacted by
the above-mentioned drivers, with
continued headwind from raw material
price increases and electricity price
levels in Hungary obtained through
hedges (in effect since January 2023).
Transportation costs were a tailwind in
the quarter, as expected, driven by a
decline in sea freight rates.
The gross margin in Q3 included
negative impact from currencies, related
to depreciation of the USD and several
other currencies against DKK, and
appreciation of the HUF against DKK.
Around 80% of the company’s
production volumes are in Hungary.
Costs
Operating expenses amounted to DKK
7,065 million. Excluding impact from
inorganic operating expenses from the
Atos Medical acquisition (4 months),
operating expenses increased 7% (DKK
418 million) from last year, as expected.
Operating costs for the full year
continue to be expected to grow below
reported revenue in DKK (ex. acquired
growth).
The increase in operating expenses
including inorganic impact from Atos
Medical was 13%.
Atos Medical contributed with DKK 854
million to operating expenses in the first
nine months, of which around DKK 159
million were amortisation costs.
Distribution costs amounted to DKK
5,613 million, a DKK 688 million (14%)
increase from DKK 4,925 million last
year and were impacted by the inclusion
of Atos Medical. Distribution costs
amounted to 31% of revenue compared
to 30% last year, reflecting increased
sales and marketing activities, as well as
travel, post COVID-19. Distribution costs
were also impacted by higher logistics
costs, due to increased freight rates and
continued commercial investments in
Interventional Urology, consumer and
digital initiatives, and Atos Medical.
In Q3, distribution costs amounted to
DKK 1,866 million, equal to 31% of
revenue, on par with the same period
last year.
Administrative expenses amounted to
DKK 836 million, up DKK 107 million
(15%) from DKK 729 million last year,
primarily impacted by the inclusion of
Atos Medical. Administrative expenses
accounted for 5% of revenue against
4% in the same period last year.
The Q3 administrative expenses
amounted to 4% of revenue against 5%
in the same period last year.
The R&D costs were DKK 641 million,
on par with last year’s R&D costs of
DKK 649 million. R&D costs amounted
to 4% of revenue, on par with last year.
The Q3 R&D costs amounted to DKK
216 million or 4% of revenue, in line
with the same period last year.
Income statement, DKK million
2022/23
Index
Revenue
18,274
111
Production costs
-6,078
118
Gross profit
12,196
107
Distribution costs
-5,613
114
Administrative expenses
-836
115
Research and development costs
-641
99
Other operating income
39
66
Other operating expenses
-14
74
Operating profit (EBIT) before special items
5,131
101
Special items
-5
N/A
Operating profit (EBIT)
5,126
110
Financial income
110
74
Financial expenses
-738
251
Profit before tax
4,498
100
Tax on profit for the period
-944
91
Net profit for the period
3,554
102
Announcement no. 04/2023
17 August 2023
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Continence Care
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Interventional Urology
Voice & Respiratory Care
Other operating income and other
operating expenses amounted to a net
income of DKK 25 million, against DKK
40 million last year.
Operating profit before interest, tax,
depreciation and amortisation
(EBITDA) before special items
EBITDA before special items amounted
to DKK 5,923 million, a DKK 156 million
(3%) increase from DKK 5,767 million
last year. The EBITDA margin before
special items was 32% compared to
35% last year.
In Q3, EBITDA before special items was
DKK 1,949 million, a DKK 72 million
(4%) decrease from the same period
last year. The EBITDA margin before
special items was 32% in Q3, against
35% last year.
Operating profit (EBIT) before special
items
EBIT before special items amounted to
DKK 5,131 million, a DKK 35 million
(1%) increase from DKK 5,096 million
last year. The EBIT margin before
special items was 28% compared to
31% last year. The EBIT margin was
negatively impacted by the inflationary
headwinds on production costs and the
increase in operating expenses, mainly
distribution costs, which among other
include DKK 159 million in amortisation
costs related to the Atos Medical
acquisition. The EBIT margin included
limited positive impact from currencies.
In Q3, EBIT before special items was
DKK 1,686 million, a DKK 75 million
(4%) decrease from the same period
last year. The EBIT margin before
special items was 28% in Q3, against
30% last year. The EBIT margin in the
quarter was mostly impacted by the
aforementioned headwinds on
production costs. The EBIT margin in Q3
included negative impact from
currencies, related to depreciation of
the USD and several other currencies
against DKK, and appreciation of the
HUF against DKK.
Special items
During the first nine month of 2022/23,
Coloplast incurred special items
expenses of DKK 5 million. The special
items include an income of DKK 244
million related to reversal of the
provision regarding Atos Medical US
billing compliance, DKK 200 million final
provision in connection to Multi-District
Litigation (MDL) cases related to the use
of mesh products in the US, and DKK 49
million related to integration costs for
the Atos Medical acquisition.
Atos Medical Inc. (US) is subject to
public audits regarding billing
compliance on a regular basis. At the
time of the acquisition in Q2 2021/22, it
was assessed that these audits are
associated with a material exposure to
recoupment, estimated to maximum
around DKK 500 million based on a
preliminary analysis, which was
accounted for. Over the last 18 months,
Coloplast has had a strong focus on
strengthening billing processes. The
exposure and related provision have
been reassessed and the provision is
now reduced to DKK 90 million per June
30, 2023.
Coloplast has made a final provision of
DKK 200 million to cover settlements
and costs in connection to the MDL
cases in the US alleging injury from the
use of transvaginal surgical mesh
products. The increased provision brings
the total amount recognised since FY
2013/14 for costs of litigation in the US
to DKK 6.35 billion including legal costs
(before insurance cover of DKK 0.5
billion). Coloplast now considers the
MDL cases closed. Any future cases will
be considered part of the normal course
of the International Urology business.
Special items in the third quarter were
an income of DKK 28 million and include
the items explained above. Integration
costs related to Atos Medical amounted
to DKK 16 million in Q3.
Operating profit (EBIT) after special
items
EBIT after special items was DKK 5,126
million, a DKK 465 million (10%)
increase from last year. The EBIT
margin after special items was 28%.
The Q3 EBIT after special items was
DKK 1,714 million, a DKK 27 million
(2%) decrease from the same period
last year, with an EBIT margin of 28%.
Financial items and tax
Financial items were a net expense of
DKK 628 million against a net expense
of DKK 146 million last year.
The net expense was impacted by net
losses on balance sheet items of DKK
223 million, mostly driven by the USD.
Interest expenses were DKK 433 million
compared to DKK 68 million last year,
due to the financing of the Atos Medical
acquisition. Fees of DKK 59 million also
contributed to the net expense. The
financial expenses were only partly
offset by financial income of DKK 110
million, driven by interest hedges of DKK
56 million.
The Q3 financial items were a net
expense of DKK 104 million, compared
to a net expense of DKK 70 million in
the same period last year, mainly driven
by the financing of Atos Medical.
The blended interest rate for the debt
financing of Atos Medical is now
expected to be around 3.2% in FY
2022/23, from previously around 2.9%,
impacted by the adjustment of the
variable interest rate on the 2-year
bond issue.
The tax rate was 21%, compared to
23% last year, positively impacted by
the transfer of Atos Medical IP. The tax
expense amounted to DKK 944 million
against DKK 1,039 million last year.
Net profit
Net profit before special items was DKK
3,558 million, a DKK 253 million
Announcement no. 04/2023
17 August 2023
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Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
decrease from DKK 3,811 million last
year. Diluted earnings per share (EPS)
before special items decreased by 6%
from DKK 17.90 last year to DKK 16.74.
The decrease was a result of a lower
net profit compared to last year due to
increased financial expenses, driven
mostly by interest expenses related to
the financing of the Atos Medical
acquisition.
Net profit after special items was DKK
3,554 million and diluted earnings per
share (EPS) after special items were
DKK 16.73.
The Q3 net profit before special items
amounted to DKK 1,250 million, against
DKK 1,304 million last year. The diluted
Q3 earnings per share (EPS) were down
4% from last year to DKK 5.88.
The Q3 net profit after special items was
DKK 1,272 million and diluted earnings
per share (EPS) after special items were
DKK 5.98.
Cash flows and
investments
Cash flows from operating activities
Cash flows from operating activities
amounted to DKK 2,345 million, against
DKK 2,959 million last year. The negative
development in cash flows from
operating activities was driven by higher
income tax paid, an increase in interest
payments due to the Atos Medical
acquisition, as well as an increase in
working capital, due to an increase in
inventory. The increase in inventories
was driven by a higher safety stock level
on raw materials, price increases, and an
increase in finished goods due to the
transfer of production to Costa Rica.
Investments
Investments amounted to a total cash
outflow of DKK 655 million in the first
nine months of 2022/23, or around 4%
of revenue, against and outflow of DKK
11,358 million in the same period last
year, due to the acquisition of Atos
Medical. Capex in the first nine months
of 2022/23 amounted to DKK 857
million, or around 5% of revenue,
compared to capex of DKK 733 million
last year, or around 4% of revenue.
Free cash flow
As a result, the free cash flow was an
inflow of DKK 1,690 million compared to
an outflow of DKK 8,399 million in the
same period last year. Adjusted for
acquisitions last year, the free cash flow
decreased by DKK 544 million (24%)
from DKK 2,234 million in the same
period last year.
Capital resources
At 30 June 2023, Coloplast had net
interest-bearing debt, including
securities, of DKK 21,263 million, against
DKK 18,091 million at 30 September
2022. The increase in net interest-
bearing debt was mainly due to the
payment of dividend in December 2022.
The gearing ratio at the end of the
period was 2.7x EBITDA (before special
items). The gearing ratio for the year is
expected around 2x EBITDA (before
special items).
Statement of financial
position and equity
Balance sheet
At 30 June 2023, total assets amounted
to DKK 35,087 million, an increase of
DKK 131 million compared to 30
September 2022.
Working capital was 27% of revenue,
compared to 25% at 30 September
2022, driven mostly by an increase in
inventories, as well as a decrease in
trade payables and an increase in trade
receivables. Inventories increased by
DKK 370 million to DKK 3,557 million,
impacted by an increase in safety stock
on raw materials, price increases, and an
increase in finished goods, as explained
above. Trade payables decreased by
DKK 172 million to DKK 1,070 million,
impacted by timing, while trade
receivables increased by DKK 132
million to DKK 4,072 million. Net
working capital for the year is now
expected to be around 25% of revenue.
Equity
Equity decreased by DKK 1,802 million
compared to 30 September 2022 to
DKK 6,490 million. Total comprehensive
income for the period of DKK 2,369
million, share-based remuneration of
DKK 42 million, and net effect of sale of
treasury shares and loss of exercised
options of DKK 34 million were offset by
payment of dividends of DKK 4,247
million.
Dividends
Coloplast paid interim dividend totalling
DKK 1,062 in the third quarter, equal to
DKK 5.00 per share.
Treasury shares
At 30 June 2023, Coloplast’s holding of
treasury shares consisted of 3,539,528
B shares, which was 153,348 less than
at 30 September 2022. The decrease
was due to exercise of share options.
Return on invested capital (ROIC)
ROIC after tax before special items was
19% against 27% as of 30 September
2022. The decrease was driven by the
acquisition of Atos Medical.
Announcement no. 04/2023
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Voice & Respiratory Care
Update on sustainability strategy and performance
Priority
Unit
2025 Ambition
9M
2022/23
9M
2021/22
Change
FY
2021/22
Improving products and packaging
Recyclable packaging¹⁾
% of total
90%
-
-
-
78%
Renewable materials in packaging¹⁾
% of total
80%
-
-
-
76%
Production waste recycling
7)
% of total
75%
74%
68%
6%-p
71%
Reducing emissions
Scope 1 and 2 emissions
7)
% reduction
100% reduction by 2030
2) 5)
15%
5%
10%-p
8%
Renewable energy use
7)
% of total
100%
76%
73%
3%-p
72%
Electric company cars¹⁾ ³⁾
% of total
50%
-
-
-
4%
Scope 3 emissions¹⁾ (by 2030)
% reduction per product
50% reduction by 2030
2) 5)
-
-
-
9%
Business travel by air¹⁾
% reduction
10% reduction
2)
-
-
-
55%
Goods transported by air¹⁾
% of total
< 5% of total
-
-
-
3%
Responsible operations
Lost time injury frequency
7)
Parts per million
2.0
2.4
6)
2.2
0.2
2.4
Code of Conduct training¹⁾
% of white collars
100%
-
-
-
100%
Female senior leaders (VP+ level)¹⁾
% of total
40% by 2030
25%
6)
19%
6%-p
21%
Diverse teams¹⁾
% share of total teams
75%
53%
56%
-3%-p
55%
Employee satisfaction
1
⁾
4
⁾
Engagement score
Above benchmark
8.1
8.2
-0.1
8.2
Improving products and packaging
Production waste recycling increased to
74% in 9M 2022/23 (four quarters
rolling average), compared to 68% in 9M
2021/22. The increase reflects
continued progress on the efforts to
scale up Coloplast’s partnership with a
recycling manufacturer in Hungary.
Through an innovative waste recycling
technology, the recycling manufacturer
uses Coloplast’s production waste as a
moulded component in rubber-based
composite products used for flooring at
schools, sport fields, railway systems or
as building isolation.
Scope 1 and 2 emissions
Renewable energy use increased to
76% of the total energy use in 9M
2022/23
(four quarters rolling average),
compared to 73% in 9M 2021/22.
The absolute scope 1 and 2 emissions
decreased by 15% in 9M 2022/23 (four
quarters rolling average), compared to
the base year 2018/19. Both the uptake
in renewable energy use and the
reduction in absolute scope 1 and 2
emissions were positively impacted by
the continued efforts to phase out
natural gas at Coloplast’s
manufacturing sites in Hungary and
China.
District heating to replace natural gas
for heating at Coloplast’s Danish sites
Coloplast has entered into agreements
with local utility companies allowing
Coloplast’s Danish sites in Humlebæk
and Mørdrup to replace natural gas for
heating with district heating by the end
of 2023.
The new agreements represent an
example of Coloplast’s commitment to
phase out natural gas and reduce
emissions as part of the Strive25
strategy. In addition to this, the transfer
to district heating supports the
development of a local distribution
network to facilitate wider usage of
more sustainable heating.
1)
Metric will only be reported on a semi-annual or full-year basis.
2)
From base year 2018/19.
3)
Ambition beyond 2025 is 100% of company cars to be converted to electrical vehicles by 2030.
4)
Employee survey conducted twice a year. Latest industry benchmark from Q1 2022/23 was 7.6.
5)
Target validated by Science-Based Targets initiative (SBTi).
6)
Figures for 9M 2022/23
includes Atos Medical
7)
Four quarters rolling average
All numbers are excluding Atos Medical, except Lost time injury frequency and Female Senior Leaders for 9M 2022/23.
Announcement no. 04/2023
17 August 2023
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Interventional Urology
Voice & Respiratory Care
Other matters
Acquisition of Kerecis
On 7 July 2023, Coloplast announced
the agreement to acquire Kerecis, an
innovative, fast-growing company in the
US-centric biologics wound care
segment for up to USD 1.3 billion
(around DKK 8.9 billion), of which USD
1.2 billion (around DKK 8.2 billion) is an
upfront cash payment. Around 99% of
Kerecis shareholders have agreed to sell
their shares to Coloplast as of today,
and the transaction is on track to close
in Q4 2022/23.
Kerecis has developed and patented a
clinically differentiated, sustainable, and
scalable technology platform based on
intact fish skin. Since the launch of its
product offering in 2016, Kerecis has
become the fastest growing company in
the biologics wound care segment.
With the acquisition of Kerecis, Coloplast
obtains a differentiated product
offering and strong commercial US
infrastructure, allowing Coloplast to
expand its presence into the fast-
growing biologics wound care segment
and at the same time expand its
footprint in the US.
Kerecis will operate as a stand-alone
business unit under its own identity and
brand, with integration focused on
business support and select areas to
support the company’s strong growth
outlook and continued expansion.
For further details, please refer to the
announcement from July 7, 2023:
Coloplast acquires Kerecis
Equity capital raise in Q4 2022/23
To finance the acquisition of Kerecis,
Coloplast expects to complete an equity
capital raise of around DKK 9 billion in
Q4 2022/23 via an accelerated book-
building without pre-emption rights for
existing shareholders. Coloplast’s largest
shareholder, Niels Peter Louis-Hansen,
and family are supportive of the
acquisition and will participate in the
equity capital raise.
Second pivotal clinical study confirms
improved performance with Luja™
Coloplast presented the results of its
second, confirmatory pivotal clinical
study on Luja™, a new male intermittent
catheter with a novel Micro-hole Zone
Technology designed to reduce the risk
of urinary tract infections, at the
International Neuro-Urology Society
(INUS) annual congress in Athens,
Greece in June 2023
1)
.
The study results confirmed the
improved performance with Luja seen in
the first pivotal clinical study and
showed full bladder emptying
2)
in an
uninterrupted free flow, with no need to
reposition the catheter, addressing
important risk factors for urinary tract
infections
3)
.
In addition, the study explored the user
perception of Luja and found that users
felt significantly less blocking sensation,
found it easier to ensure complete
bladder emptying, and felt significantly
more confident in complete bladder
emptying at point of urine flow stop.
The launch of Luja is currently ongoing
with positive feedback from users and
clinicians. Launch in key markets is
expected over the next 6 months.
War in Ukraine
Coloplast continues to monitor the war
in Ukraine closely. Our primary focus is
to keep our people safe and ensure our
around 100,000 users in Ukraine and
Russia have access to products to
manage their chronic conditions.
Coloplast’s commercial activity in Russia
has been reduced and the organisation
has been further downsized to around
40 employees. Coloplast complies with
all sanctions imposed by the EU, the
UN, and the US.
Luja is a medical device for which CE-mark has been affixed. Product availability is subject to regulatory process of individual countries and is not guaranteed.
1) The data set presented at the INUS annual congress and other relevant clinical data on Luja is available via this link. 2) Results may vary dependent on applicable catheterization
method (HCP led or self-catherization). 3) Compared to conventional, 2-eyelet catheters. SpeediCath Flex was the comparator product in 98% of the catheterizations by HCPs and in
all self-catheterizations
Announcement no. 04/2023
17 August 2023
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Voice & Respiratory Care
Updated long-term
financial guidance
8-10%
Organic growth p.a.
above 30%
EBIT margin at constant
exchange rates beyond 2024/25
The updated long-term organic growth
guidance includes around 1%-point
accretion from Kerecis as of FY
2024/25.
For the remaining Strive25 strategic
period running until end 2024/25, the
EBIT margin is now expected to remain
below 30% and assumes dilution of
around 100 basis points p.a. from
Kerecis (including PPA amortisation).
Key assumptions
The impact of current macroeconomic
trends and global events, especially
input costs development and the
reopening in China, is continuously
monitored and evaluated on a short-
and medium-term basis. The financial
guidance is subject to a higher degree of
uncertainty due to the changing
environment.
The addressable market in which
Coloplast operates is expected to
continue growing at 4-5% and includes
negative impact from COVID-19 in
China.
Revenue growth
Organic growth is expected around 8%
in constant currencies and includes the
following assumptions:
a. The chronic care business excluding
China is expected to grow largely in
line with the Strive25 ambitions. The
assumptions by region include:
• Continued good momentum in
Europe
• US – sustained good momentum
in Ostomy Care and
improvement in growth in
Continence Care
• Emerging markets – broad-
based double-digit growth
excluding China
• China – impact from COVID-19
in H1 2022/23 and improvement
in growth in H2 2022/23, driven
by a lower baseline last year and
a normalisation in inflow of new
patients to pre-COVID levels,
following the normalisation in
hospital access and procedural
volumes in Q3. The average
value per patient is expected to
remain below pre-COVID levels,
impacted by consumer
sentiment
b. Wound and Skin Care is expected to
deliver growth above the market in
line with the Strive25 ambitions.
China – impact from COVID-19 in
H1 2022/23 and improvement in
growth in H2 2022/23, driven by a
lower baseline in 2021/22 and
normalised hospital access and
procedural volumes
c. Interventional Urology is expected
to deliver growth of around 10%
d. Voice and Respiratory Care is
expected to grow at 8-10%, with 8
months impact on organic growth
e. Revenue exposure to Russia and
Ukraine is expected to be similar to
2021/22 i.e., around 1% of group
revenues, with a negative growth
contribution in FY 2022/23
f. No current knowledge of significant
health care reforms; positive pricing
impact is expected. The expectation
of long-term price pressure of up to
1% annually is unchanged
g. A stable supply and distribution of
products across the company;
impact from backorders on
Collecting Devices in H1 2022/23
and impact from backorders in
Wound Care in the first nine months
of 2022/23
Reported growth in DKK is expected to
be 8-9%. The guidance assumes
negative currency impact of around
2%-points which includes unfavourable
development of the USD against the
DKK and depreciation of the GBP and
several emerging markets currencies
against the DKK. Contribution from the
Atos Medical acquisition to reported
growth is around 3%-points (4 months
impact).
EBIT margin
The reported EBIT margin before
special items is still expected at 28-29%,
and the key assumptions remain
unchanged:
a. Leverage effect on fixed costs and
continued efficiency improvements
through Global Operations Plan 5
b. An increase in input costs, driven
mostly by:
• Raw materials – double-digit
price increase
2022/23
Financial
guidance
Around 8%
Organic revenue growth
at constant exchange rates
28-29%
Reported EBIT margin
(before special items)
Around 1.3 bn
Capital expenditure in DKK
Around 21%
Effective tax rate
Announcement no. 04/2023
17 August 2023
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Voice & Respiratory Care
• Energy – cost expected to be
around double compared to
2021/22
• Wages in Hungary – double-digit
increase
c. Prudent management of operating
costs, expected to grow below
reported revenue in DKK (excluding
acquired growth)
d. Incremental investments at the
lower end of the Strive25 guidance
(up to 2% of sales in incremental
OPEX investments)
e. Full year impact of around DKK 220
million of amortisation related to the
Atos Medical acquisition
f. Negative impact from currencies
Special items
Around DKK 50 million in special items
expenses expected in FY 2022/23, of
which income of DKK 244 million
related to Atos Medical billing provision
reversal, DKK 200 million expense
related to the US Multi-District Litigation
cases alleging injury from the use of
transvaginal surgical mesh product,
around DKK 50 million expense related
to integration of Atos Medical, and
around DKK 50 million transaction
related expense from the acquisition of
Kerecis (advisory fees).
Capex
Capex is now expected to be around
DKK 1.3 billion, from previously around
DKK 1.4 billion. Capex includes
investments in automation at volume
sites in Hungary and China as part of
GOP5, investments in new machines for
existing and new products, IT and
sustainability investments, as well as
Atos Medical capex and integration
capex.
Effective tax rate
The effective tax rate is still expected to
be around 21%, positively impacted by
the transfer of Atos Medical Intellectual
Property.
Dividend policy
The Board of Directors intends to
distribute excess liquidity to the
shareholders through dividends and
share buybacks, with a target payout
ratio of 60-80% of net profit.
Announcement no. 04/2023
17 August 2023
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Voice & Respiratory Care
Forward-looking
statements
The forward-looking statements in this
announcement, including revenue and
earnings guidance, do not constitute a
guarantee of future results and are
subject to risk, uncertainty and
assumptions, the consequences of
which are difficult to predict.
The forward-looking statements are
based on our current expectations,
estimates and assumptions and are
provided on the basis of information
available to us at the present time.
Major fluctuations in the exchange rates
of key currencies, significant changes in
the healthcare sector or major
developments in the global economy
may impact our ability to achieve the
defined long-term targets and meet our
guidance. This may impact our
company’s financial results.
Exchange rate
exposure
Our financial guidance for the 2022/23
financial year has been prepared on the
basis of the following assumptions for
the company’s principal currencies:
OVERVIEW OF EXCHANGE RATES FOR
KEY CURRENCIES AGAINST DKK
GBP
USD
HUF
Average exchange
rate 9M 2021/22
881
671
2.01
Average exchange
rate 9M 2022/23
851
702
1.91
Change in average
exchange rates for
2022/23 compared
with the same
period last year
-3%
5%
-5%
Average exchange
rate 2021/22¹⁾
878
688
1.97
Spot rate on
15 August 2023
866
682
1.92
Estimated average
exchange rate
2022/23²⁾
855
697
1.91
Change in average
exchange rates
compared with
average exchange
rate 2021/22
-3%
1%
-3%
¹⁾ Average exchange rates for 2021/22 are
from 1 October 2021 to 30 September 2022.
²⁾ Estimated average exchange rates are
calculated as the average exchange rates for
the first nine months combined with the spot
rates at 15 August 2023.
Revenue is particularly exposed to
developments in USD and GBP relative
to DKK. Fluctuations in HUF against
DKK impact the operating profit
because a substantial part of our
production, and thus of our costs, are in
Hungary, whereas our sales there are
moderate.
EFFECT OVER 12 MONTHS OF A 10%
INITIAL DROP IN EXCHANGE RATES FOR
KEY CURRENCIES (DKK MILLION),
EXCLUDING ATOS MEDICAL
Revenue
EBIT
USD
-490
-220
GBP
-320
-220
HUF
-
130
Announcement no. 04/2023
17 August 2023
17
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Humlebæk, 17 August 2023
Executive Management
Board of Directors
Statement by the Board of Directors and the Executive Management
Announcement no. 04/2023
17 August 2023
18
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Statement of comprehensive income
1 October – 30 June, unaudited
Consolidated
2022/23
2021/22
2022/23
2021/22
DKK million
Note
9 mths
9 mths
Index
Q3
Q3
Index
Revenue
2
111
104
Production costs
-6,078
-5,161
118
-2,085
-1,801
116
Gross profit
107
99
Distribution costs
-5,613
-4,925
114
-1,866
-1,813
103
Administrative expenses
-836
-729
115
-262
-270
97
Research and development costs
-641
-649
99
-216
-222
97
Other operating income
66
43
Other operating expenses
-14
-19
74
-6
-12
50
Operating profit (EBIT) before special items
101
96
Special items
3
-5
-435
-
-20
-
Operating profit (EBIT)
110
98
Financial income
4
74
47
Financial expenses
4
-738
-294
>200
-141
-149
95
Profit before tax
100
96
Tax on profit for the period
-944
-1,039
91
-338
-382
88
Net profit for the period
102
99
Remeasurements of defined benefit plans
-7
-12
Tax on remeasurements of defined benefit plans
-21
-11
Items that will not be reclassified to the income
statement
-6
-9
Value adjustment of currency hedging
Transferred to financial items
-52
-83
Tax effect of hedging
-30
-105
-110
Currency adjustment of opening balances and
other value adjustments relating to subsidiaries
-1,300
-240
-758
-529
Items that may be reclassified to income
statement
-1,179
-787
-138
Total other comprehensive income
-1,185
-796
-103
Total comprehensive income
DKK
Earnings per share (EPS)
Earnings per share (EPS), diluted
Announcement no. 04/2023
17 August 2023
19
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Statement of cash flows
1 October – 30 June, unaudited
Consolidated
2022/23
2021/22
DKK million
Note
9 mths
9 mths
Operating profit
Amortisation
Depreciation
Adjustment for other non-cash operating items
7
-166
Changes in working capital
7
-1,314
-1,161
Ingoing interest payments, etc.
Outgoing interest payments, etc.
-611
-210
Income tax paid
-1,511
-1,085
Cash flows from operating activities
Investments in intangible assets
-161
-114
Investments in land and buildings
-6
-9
Investments in plant and machinery and other fixtures and fittings, tools and equipment
-69
-15
Investments in property, plant and equipment under construction
-621
-595
Property, plant and equipment sold
Investment in other investments
-17
-2
Acquisition of subsidiaries
-10,633
Net sales/purchase of marketable securities
Cash flows from investing activities
-655
-11,358
Free cash flow
-8,399
Dividend to shareholders
-4,247
-4,041
Acquisition of treasury shares
-500
Sale of treasury shares and loss on exercised options
-71
Financing from shareholders
-4,213
-4,612
Repayment of lease liabilities
-180
-168
Financing through issuing long-term bonds
Hedging gain
Drawdown on credit facilities
-3,558
Cash flows from financing activities
-1,204
Net cash flows
Cash and cash equivalents at 1 October
Value adjustment of cash and bank balances
-45
Cash and cash equivalents, acquired operations
-2
Net cash flows
Cash and cash equivalents at 30 June
8
The cash flow statement cannot be derived using only the published financial data.
Announcement no. 04/2023
17 August 2023
20
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Assets
At 30 June, unaudited
Consolidated
DKK million
Note
30.06.23
30.06.22
30.09.22
Intangible assets
Property, plant and equipment
Right-of-use assets
Other equity investments
Deferred tax asset
Other receivables
Non-current assets
Inventories
Trade receivables
Income tax
Other receivables
Prepayments
Marketable securities
Cash and cash equivalents
Current assets
Assets
Announcement no. 04/2023
17 August 2023
21
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Equity and liabilities
At 30 June, unaudited
Consolidated
DKK million
Note
30.06.23
30.06.22
30.09.22
Share capital
Currency translation reserve
-2,139
-703
-910
Reserve for currency hedging
Proposed ordinary dividend for the year
Retained earnings
Equity
Provisions for pensions and similar liabilities
Provision for deferred tax
Other provisions
5
Bonds
6
Other payables
Lease liability
Prepayments
Non-current liabilities
Provisions for pensions and similar liabilities
Other provisions
5
Other credit institutions
Trade payables
Income tax
Other payables
Lease liability
Prepayments
Current liabilities
Equity and liabilities
Announcement no. 04/2023
17 August 2023
22
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Statement of changes in equity, current year
At 30 June, unaudited
Consolidated
Share capital
Reserves
DKK million
A shares
B shares
Currency
translation
Currency
hedging
Proposed
dividend
Retained
earnings
Total
2022/23
Equity at 1 October
-910
Net profit for the period
Other comprehensive income
-1,229
-77
-1,185
Total comprehensive income
-1,229
Sale of treasury shares and loss on
exercised options
Share-based payment
Interim dividend paid out in respect of
2022/23
-1,062
-1,062
Dividend paid out in respect of
2021/22
-3,185
-3,185
Transactions with shareholders
-4,247
-4,171
Equity at 30 June
-2,139
Announcement no. 04/2023
17 August 2023
23
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Statement of changes in equity, last year
At 30 June, unaudited
Consolidated
Share capital
Reserves
DKK million
A shares
B shares
Currency
translation
Currency
hedging
Proposed
dividend
Retained
earnings
Total
2021/22
Equity at 1 October
-392
-41
Net profit for the period
Other comprehensive income
-311
Total comprehensive income
-311
Acquisition of treasury shares
-500
-500
Sale of treasury shares
-71
-71
Share-based payment
Interim dividend paid out in respect of
2021/22
-1,062
-1,062
Dividend paid out in respect of
2020/21
-2,979
-2,979
Transactions with shareholders
-4,041
-533
-4,574
Equity at 30 June
-703
Announcement no. 04/2023
17 August 2023
24
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Key accounting policies
1 Accounting policies
Profit and loss
2 Segment information
3 Special items
4 Financial income and expenses
Assets and liabilities
5 Other provisions
6 Bonds
Cash flows
7 Specifications of cash flow from operating activities
8 Cash and cash equivalents
Other disclosures
9 Contingent liabilities
10 Events occurring after the balance sheet date
List of notes
Announcement no. 04/2023
17 August 2023
25
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Note 1
Accounting policies
The unaudited consolidated financial statements and interim report is presented in accordance with IAS 34 “Interim financial
reporting” as adopted by the EU and additional Danish disclosure requirements for listed companies. The accounting policies for
recognition and measurement applied in the preparation of the interim report are consistent with those applied in the Annual
Report 2021/22 except for new standards, amendments and interpretations that are effective from 2022/23 financial year.
Note 2
Segment information
Operating segments
The operating segments are defined on the basis of the monthly reporting to the Executive Leadership Team, which is
considered the senior operational management, and the management structure. Reporting to the Executive Leadership Team is
based on four operating segments: Chronic Care, Voice and Respiratory Care, Wound and Skin Care and Interventional Urology.
The operating segment Chronic Care covers the sale of ostomy care products and continence care products. Voice and
Respiratory Care covers the sale of laryngectomy care products and tracheostomy products, as well as R&D activities. The
operating segment Wound and Skin Care covers the sale of wound and skin care products. The operating segment
Interventional Urology covers the sale of urological products, including disposable products, as well as R&D activities.
The reporting segments are also Chronic Care, Voice and Respiratory Care, Wound and Skin Care and Interventional Urology.
The segmentation reflects the structure of reporting to the Executive Leadership Team.
The shared/non-allocated comprises support functions (production units and staff functions) and eliminations, as these functions
do not generate revenue. While costs of R&D activities for Interventional Urology and Voice and Respiratory Care are included
in the segment operating profit/loss for that segment, R&D activities for Chronic Care and Wound and Skin Care are shared
functions which are comprised in shared/non-allocated. The shared/non-allocated costs also include PPA amortisation
expenditures related to Voice and Respiratory Care.
Financial items and income tax are not allocated to the operating segments.
The Executive Leadership Team reviews each operating segment separately, applying their market contributions to earnings
and allocating resources on that basis. The market contribution is defined as external revenue less the sum of direct production
costs, distribution costs, sales costs, marketing costs and administrative expenses. Costs are allocated directly to segments.
Certain immaterial indirect costs are allocated systematically to the shared/non-allocated and the reporting segments.
The Executive Leadership Team does not receive reporting on assets and liabilities by the reporting segments. Accordingly, the
reporting segments are not measured in this respect, nor do we allocate resources on this background. No single customer
accounts for more than 10% of revenue.
Announcement no. 04/2023
17 August 2023
26
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Note 2, continued
Consolidated
Chronic Care
Interventional
Urology
Wound and Skin
Care
Voice and
Respiratory Care
Group
DKK million
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
Segment
revenue:
Ostomy Care
6,724
6,367
-
-
-
-
-
6,724
6,367
Continence Care
5,944
5,613
-
-
-
-
-
5,944
5,613
Interventional
Urology
-
-
2,031
1,782
-
-
-
2,031
1,782
Wound and Skin
Care
-
-
-
-
2,125
2,001
-
2,125
2,001
Voice and
Respiratory Care
-
-
-
-
-
-
1,450
757
1,450
757
External revenue
as per the
statement of
comprehensive
income
12,668
11,980
2,031
1,782
2,125
2,001
1,450
757
18,274
16,520
Costs allocated to
segment
-5,361
-4,894
-1,316
-1,161
-1,323
-1,173
-961
-517
-8,961
-7,745
Segment
operating
profit/loss
7,307
7,086
715
621
802
828
489
240
9,313
8,775
Shared/non-allocated
-4,182
-3,679
Special items not included in segment operating profit/loss (see note 3)
-5
-435
Operating profit before tax (EBIT) as per the statement of comprehensive income
5,126
4,661
Net financials
-628
-146
Tax on profit/loss for the year
-944
-1,039
Profit/loss for the year as per the statement of comprehensive income
3,554
3,476
Announcement no. 04/2023
17 August 2023
27
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Note 3
Special items
DKK million
2022/23
2021/22
Provisions for litigation about transvaginal surgical mesh products
200
300
Reversal of provision related to business combinations
-244
-
Expenses related to business combinations
49
135
Total
5
435
Special items contain DKK 200 million further and final provision related to the MDL lawsuits in the US alleging injury from the
use of transvaginal surgical mesh products. See note 5 of the financial statements for more information.
Special items contain an income of DKK 244 million related to Atos Medical US billing compliance. The exposure and related
provision have been reassessed and the provision at 30 June 2023 was reduced to DKK 90 million.
Special items also include expenses related to business combinations (Atos Medical integration costs).
Note 4
Financial income and expenses
DKK million
2022/23
2021/22
Financial income
Interest income
26
7
Interest hedges
56
-
Net exchange adjustments
-
129
Hyperinflationary adjustment of monetary position
25
11
Other financial income
3
1
Total
110
148
Financial expenses
Interest expenses
119
68
Interest expenses, lease liabilities
18
12
Interest expenses, bonds
314
-
Fair value adjustments of forward contracts transferred from other comprehensive income
4
127
Fair value adjustments of cash-based share options
1
15
Net exchange adjustments
223
-
Other financial expenses and fees
59
72
Total
738
294
Announcement no. 04/2023
17 August 2023
28
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Note 5
Other provisions
Product liability case regarding transvaginal surgical mesh products
Since 2011, Coloplast, along with a number of other major manufacturers, has been named as a defendant in individual lawsuits
in various federal and state courts around the United States alleging injury resulting from use of transvaginal surgical mesh
products designed to treat pelvic organ prolapse and stress urinary incontinence. A multidistrict litigation (MDL) was formed in
2012 in the Southern District of West Virginia to consolidate federal court cases in which Coloplast is the first named defendant.
Since the first lawsuits were filed, Coloplast has been intent on disputing the current and any future litigation and has continually
considered which strategy and other steps may serve the company’s best interests.
Against this background, Coloplast has from the start reached settlements with groups of law firms. In 2017, Judge Joseph
Goodwin issued a court order stating that plaintiffs may no longer direct claims against Coloplast in the ongoing MDL. In 2019,
the remaining cases were remanded to the relevant Courts, and on 18 December 2020 the MDL was formally closed.
An additional expense of DKK 0.2 billion has been recognised in Q3 2022/23 to cover further costs to resolve the remaining
claims as the process takes longer than previously anticipated. The total amount recognised since the 2013/14 financial year for
expected costs of litigation in the USA amounts to DKK 6.35 billion including legal costs (before insurance cover of DKK 0.5
billion). With this, Coloplast considers the MDL lawsuits closed.
The remaining provision made for legal claims amounted to DKK 0.2 billion at 30 June 2023 (DKK 0.2 billion at 30 September
2022) plus DKK 0.1 billion recognised under other debt (DKK 0.3 billion at 30 September 2022). Liabilities are classified as other
debt when agreements are reached with the plaintiffs’ legal counsel and amounts and timing become known.
With reference to the prejudicial exemption in IAS 37, Coloplast will not disclose any further information about the assumptions
for the provision, including any details about current and the expected number of lawsuits and settled claims.
The disclosure of such information is believed to be detrimental to Coloplast in connection with the ongoing confidential
negotiations and could inflict financial losses on Coloplast and its shareholders.
Announcement no. 04/2023
17 August 2023
29
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Note 6
Bonds
Bonds
Coloplast has in 2021/22 raised EUR 2.2 billion in debt financing through the issuance of senior unsecured notes in an
aggregate principal amount of EUR 2.2 billion under the Coloplast Euro Medium Term Note programme. The Notes are
unconditionally and irrevocably guaranteed by Coloplast. COLOCB1 Floating Rate Note carries a coupon adjusted quarterly.
COLOCB2 carries a fixed coupon for five years, and COLOCB3 carries a fixed coupon for eight years.
COLOCB2 and COLOCB3 can be redeemed at a market price fixed on the redemption date in relation to named EUR bonds
with similar maturity.
A pre-hedge was made with Interest swaps on COLOCB2 and COLOCB3 with mandatory breakage on the day the bonds are
issued to limit the financial risks. The gain of DKK 521 million has as per hedge accounting been set off in the equity and
transferred to the financial items during the lifetime of the bonds.
Short name
Currency
Amount, million
Expiry date
Coupon¹⁾
COLOCB1
EUR
650
19-05-2024
4.13
COLOCB2
EUR
850
19-05-2027
2.25
COLOCB3
EUR
700
19-05-2030
2.75
¹⁾ Fixed for COLOCB1 as per 16-05-2023. The coupon rate is set as 3M Euribor + 0.75%.
Note 7
Specifications of cash flow from operating activities
DKK million
2022/23
2021/22
Net gain/loss on divestment of non-current assets
1
6
Change in other provisions
-210
33
Other non-cash operating items
43
36
Adjustment for other non-cash operating items
-166
75
Inventories
-504
-406
Trade receivables
-335
-292
Other receivables, including amounts held in escrow
-21
-246
Trade and other payables etc.
-454
-217
Changes in working capital
-1,314
-1,161
Announcement no. 04/2023
17 August 2023
30
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Note 8
Cash and cash equivalents
DKK million
2023
2022
Bank deposits, short term
855
634
Cash and cash equivalents at 30 June
855
634
Note 9
Contingent liabilities
Other than as set out in note 5, the Coloplast Group is a party to a few minor legal proceedings, which are not expected to
influence the Group’s future earnings.
Note 10
Events occurring after the balance sheet date
At 7 July 2023, Coloplast signed an agreement to acquire Kerecis hf., an innovative, fast-growing company in the biologics
wound care segment. Kerecis represents an attractive opportunity to strategically strengthen Coloplast’s presence in the
advanced wound care market by entering the high-growth, US-centric biologics segment. With the acquisition Coloplast obtain a
differentiated product offering and strong commercial US infrastructure, allowing Coloplast to expand into the fast-growing
biologics wound care segment and at the same time expand the position in the US.
The total enterprise value for 100% ownership of Kerecis amounts to up to DKK 8.9 billion (USD 1.3 billion), consisting of DKK
8.2 billion (USD 1.2 billion) upfront cash payment on a cash and debt free basis, and an earnout potential of maximum DKK 0.7
billion (USD 100 million).
The transaction is expected to be financed through an equity capital raise of around DKK 9 billion via an accelerated
bookbuilding without pre-emption rights for existing shareholders.
Closing of the transaction is subject to customary regulatory approvals and an acceptance threshold of at least 90%, and is
anticipated in Q4 2022/23. Around 99% of Kerecis’ shareholders had committed to sell their shares to Coloplast as of 17 August
2023.
Announcement no. 04/2023
17 August 2023
31
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Income statement, quarterly
Unaudited
Consolidated
2022/23
2021/22
DKK million
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Revenue
6,108
6,061
6,105
6,059
5,849
5,502
5,169
Production costs
-2,085
-2,034
-1,959
-1,889
-1,801
-1,721
-1,639
Gross profit
4,023
4,027
4,146
4,170
4,048
3,781
3,530
Distribution costs
-1,866
-1,882
-1,865
-1,872
-1,813
-1,620
-1,492
Administrative expenses
-262
-277
-297
-276
-270
-264
-195
Research and development costs
-216
-209
-216
-217
-222
-222
-205
Other operating income
13
17
9
15
30
15
14
Other operating expenses
-6
-5
-3
-6
-12
-4
-3
Operating profit (EBIT) before special items
1,686
1,671
1,774
1,814
1,761
1,686
1,649
Special items
28
-20
-13
-36
-20
-381
-34
Operating profit (EBIT)
1,714
1,651
1,761
1,778
1,741
1,305
1,615
Financial income
37
42
31
-29
79
50
19
Financial expenses
-141
-232
-365
-137
-149
-68
-77
Profit before tax
1,610
1,461
1,427
1,612
1,671
1,287
1,557
Tax on profit for the period
-338
-306
-300
-382
-382
-307
-350
Net profit for the period
1,272
1,155
1,127
1,230
1,289
980
1,207
DKK
Earnings per share (EPS) before special items
5.88
5.51
5.36
5.92
6.14
6.00
5.80
Earnings per share (EPS)
5.99
5.44
5.31
5.79
6.07
4.61
5.67
Earnings per share (EPS) before special items, diluted
5.88
5.51
5.35
5.92
6.13
5.99
5.78
Earnings per share (EPS), diluted
5.98
5.44
5.31
5.79
6.06
4.60
5.66
Announcement no. 04/2023
17 August 2023
32
Ostomy Care
Continence Care
Wound & Skin Care
Interventional Urology
Voice & Respiratory Care
Our mission
Making life easier for people
with intimate health care needs
Our values
Closeness... to better understand
Passion... to make a difference
Respect and responsibility... to guide us
Our vision
Setting the global standard
for listening and responding
For further information, please contact
Investors and analysts
Anders Lonning-Skovgaard
Executive Vice President, CFO
Tel. +45 4911 1111
Aleksandra Dimovska
Senior Director, Investor Relations
Tel. +45 4911 1800 / +45 4911 2458
Email: dkadim@coloplast.com
Kristine Husted Munk
Senior Manager, Investor Relations
Tel. +45 4911 1800 / +45 4911 3266
Email: dkkhu@coloplast.com
Press and media
Peter Mønster
Sr. Media Relations Manager
Tel. +45 4911 2623
Email: dkpete@coloplast.com
Address
Coloplast A/S
Holtedam 1
DK-3050 Humlebaek
Denmark
Company reg. (CVR) no. 69749917
Website
www.coloplast.com
This announcement is available in a Danish and an English-language version. In the event of discrepancies, the English version
shall prevail.
Coloplast develops products and services that make life easier for people with very personal and private medical conditions.
Working closely with the people who use our products, we create solutions that are sensitive to their special needs. We call this
intimate health care. Our business includes Ostomy Care, Continence Care, Wound and Skin Care, Interventional Urology and
Voice and Respiratory Care. We operate globally and employ more than 14,700 employees.
The Coloplast logo is a registered trademark of Coloplast A/S. © 2023-08.
All rights reserved Coloplast A/S, 3050 Humlebaek, Denmark.