Coloplast (OMX: COLO B) held Capital Markets day in London yesterday. The medical devices firm eyes accelerating global growth, which is a clear shift from optimizing operations in the past few years. The company hints of numerous future launches in ostomy, continence and wound care, describing its current pipeline as strongest to date. In Urology Care the company has a five year plan to become the global leader.
Currently two thirds of revenues come from Europe, where the market share is close to 50% and the company foresees continued growth. Coloplast sees high potential in the developed world ex-Europe, with the current market share hovering around 20-30% overall in the US, Canada, Japan and Australia. In the United States the company is refocusing on its core competences. The market share situation is similar in the developing world, where obviously Coloplast has high ambitions as well, with China being the biggest growth opportunity.
Coloplast still predicts an annual price decline of one per cent and says the ability to improve EBIT performance going forward is mitigated by lower margins ex-Europe, something that the company plans to alleviate with higher volumes from Europe. The long term target is to outpace industry growth by low to middle single digits. The EBIT margin of 28.6% during last quarter is among the industry leaders. Net Debt to EBITDA capital target has been scrapped, and the company plans to maintain flexibility with a 1 billion DKK liquidity reserve, allowing for acquisitions when opportunities arise. Excess liquidity will be returned to shareholders, with dividend policy unchanged at 30% pay-out ratio coupled with share buy-backs and possible extra dividends.
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