Coloplast AS (CLPBF) Q3 2025 Earnings Call Highlights: Strong Organic Growth Amidst Challenges
Organic Revenue Growth: 7% for the third quarter.
EBIT Margin Before Special Items: 28% in the third quarter.
Adjusted Return on Invested Capital: 15%, on par with last year.
Ostomy Care Organic Growth: 6% for the first nine months.
Continence Care Organic Growth: 8% for the first nine months.
Voice and Respiratory Care Organic Growth: 9% for the first nine months.
Advanced Wound Care Organic Growth: 9% for the first nine months.
Kerecis Growth: 26% for the first nine months.
Interventional Urology Organic Growth: 1% for the first nine months.
Gross Margin: 68% for the first nine months.
Operating Profit Before Special Items: DKK 5.7 billion for the first nine months.
Net Profit Before Special Items: DKK 3.8 billion for the first nine months.
Operating Cash Flow: DKK 4.4 billion for the first nine months.
Free Cash Flow: DKK 3.5 billion for the first nine months.
CapEx: 5% of sales for the first nine months.
Warning! GuruFocus has detected 4 Warning Signs with CLPBF.
Release Date: August 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Coloplast AS (CLPBF) reported a 7% organic growth for the third quarter, driven by broad-based growth across its Chronic Care businesses.
The company has reorganized its structure into two business units, Chronic Care and Acute Care, to better address market dynamics and customer needs.
Coloplast AS (CLPBF) is focusing on innovation, with plans to bring new products to market faster and enhance R&D capabilities.
The company has maintained a stable EBIT margin of 27% to 28% before special items, demonstrating effective cost management.
Kerecis, a part of the Advanced Wound Care segment, showed strong growth of 26% in the first nine months, indicating robust demand for its products.
Negative Points
The Advanced Wound Care business fell short of expectations due to product returns in China and lower-than-expected growth for Kerecis.
The US Centers for Medicare and Medicaid Services proposed rules that could impact Coloplast AS (CLPBF)'s Chronic Care business, introducing uncertainty about future financial impacts.
The company faced a negative impact from foreign exchange rates, which reduced reported revenue by approximately 1%.
Coloplast AS (CLPBF) experienced a product recall in China, leading to a significant negative financial impact in the third quarter.
The Bladder Health and Surgery segment continued to detract from growth, with uncertainty around the timeline for full recovery.
Q & A Highlights
Q: Lars, we've seen product recalls and execution issues. What steps are you taking to prevent future recalls? A: Lars Rasmussen, Interim CEO: The recall of urological products was due to a sterilization barrier breach, a common issue in the industry. The situation in China with Biatain foam products is different; it's a technical specification issue unique to China, not a quality problem. We're discussing this with the market and working on substitute products, but it's a slow process.
Q: Can you elaborate on the INTIBIA filing and your confidence in regulatory acceptance? A: Anders Lonning-Skovgaard, CFO: We are on track with the INTIBIA launch and expect to get it through the FDA process in the US. We anticipate launching in the first part of the next strategic period.
Q: Regarding Kerecis, how was growth in non-physician office settings, and what are the incentives for physicians to use higher-priced products? A: Anders Lonning-Skovgaard, CFO: In Q3, high-priced products reentered the market due to an LCD delay, impacting sales. We expect a bounce back in Q4. The new skin substitute price is being discussed and expected to be implemented in January 2026.
Q: On the competitive bidding proposal, can you provide more details on the potential impact on US Chronic Care sales? A: Lars Rasmussen, Interim CEO: It's difficult to estimate the impact, but competitive bidding on specialized products like Ostomy Care seems illogical due to the complexity and variety of SKUs. We estimate around 50% of our US sales are Medicare-related.
Q: Can you explain the rationale behind establishing R&D franchises within Chronic Care? A: Lars Rasmussen, Interim CEO: Innovation is crucial, and we aim to bring products to market faster and derive more value from them. This change elevates R&D to the executive level to ensure close collaboration with manufacturing, enhancing both innovation and profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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