Picture of Coloplast's Chairman & CEO

A message from the Chairman and the CEO

"Through a balanced mix of organic and inorganic initiatives during the first half of the Strive25 period, we are well positioned to accelerate our long-term organic growth to 8-10%, while maintaining our long-term commitment to industry leading profitability of more than 30%."

Dear shareholders, 

While the COVID-19 pandemic is largely behind us, its consequences on healthcare systems globally continue to reverberate. In addition to the current staffing shortages and procedural backlogs, demographic trends and economic constraints will continue to put more pressure on healthcare systems in the coming decades. At the same time, current macroeconomic and geopolitical trends have significantly challenged our operating environment.

At Coloplast, we are building the consumer healthcare company of the future – a company that helps keep people out of the hospital and empowers them to take care of themselves. This is our business model.

While macroeconomic challenges, including COVID-19 and inflation, have put pressure on our performance in the first half of the Strive25 strategic period, they have also confirmed the strength of our model as we have been able to maintain solid organic growth and industry-leading profitability levels. We aim to emerge even stronger in the 
second half of Strive25 and position ourselves for long-term value creation.

Strive25 strategy update 
Innovation remains a key driver of our organic growth. Through differentiated 
technologies, we have been winning in our Chronic Care core businesses, Ostomy Care and Continence Care, for decades. We have a strong pipeline in Chronic Care with a significant number of new product launches over the next few years, starting with LujaTM, our new intermittent catheter. 

This is the first product from our Clinical Performance Programme and the most important product launch in Continence Care in the last decade. 

At the same time, with our Strive25 strategy we set out to actively pursue M&A opportunities to build growth and value creation options for the mid- and long-term. In the last three years, we have strengthened our portfolio with three significant acquisitions. First, the Intibia technology for treatment of overactive bladder in Interventional Urology, which we expect to launch in 2025/26. 
Second, the addition of Voice and Respiratory Care, a new chronic care business area, through the Atos Medical acquisition, which we expect to grow 8-10% p.a. And finally, with the latest addition of Kerecis we obtain a longterm growth business, expected to contribute around 1%-point to organic growth as of 2024/25, with strong profitability expansion potential and EPS accretion expected from 2026/27.

The current inflationary environment has represented a temporary setback for our profitability. As we look towards the second half of our Strive25 period, we expect to come back to an EBIT margin of 30%, before impact from the Kerecis acquisition, driven by an easing of the inflationary pressure and continued support from our Global Operations Plans.

Through a balanced mix of organic and inorganic initiatives during the first half of the Strive25 period, we are well positioned to accelerate our long-term organic growth to 8-10%, while maintaining our long-term commitment to industry leading profitability of more than 30%. 

Acquisition of Kerecis
A key highlight from the past year is the acquisition of Kerecis, an emerging category leader in the biologics wound care segment, with a clinically differentiated technology based on intact fish skin. With Kerecis, we obtain a unique opportunity to transform our presence in the wound care market and accelerate group growth.

Our companies share many similarities and fit well together. We are both on a mission to help more people in need of advanced wound treatment, we are leaders in innovation and sustainability, and we both share values rooted in Nordic cultures. Kerecis has a strong commercial presence in the US, providing immediate scale in the market, while Coloplast’s footprint and infrastructure provide a global expansion backbone for Kerecis’ fishskin technology beyond the US. The acquisition is a natural extension of our intent to build growth platforms for the mid- and long-term beyond our chronic care core businesses.

The acquisition of Kerecis was financed through an equity capital raise, which marked the first time since 1995 that Coloplast has used the capital markets to raise funds. We would like to thank our shareholders for the strong interest and participation in the equity raise.

Business performance highlights 
We delivered 8% organic growth and an EBIT margin of 28% in 2022/23. The 
result reflects strong growth above the market across businesses and regions, once again proving the strength of our business model and offering. Our EBIT margin reflects the negative impact from inflation across cost categories.

Looking at our geographical priorities, our US Ostomy Care business delivered another strong year with double-digit growth, while in China we maintain a strong market leadership position despite short-term impact form the pandemic and consumer sentiment. 

2022/23 is the final year of our Global Operations Plan 5, with focus on automation and ramp up of our manufacturing site in Costa Rica. We are now launching our Global Operations Plan 6, which will support continued growth and profitability though initiatives on managing input prices, continued optimisation of operations, 
and a new manufacturing site in Portugal.

At the core of our success are our people and culture. We have a purpose driven organisation, with above industry engagement, and a stable voluntary turnover level. With 54% share of diverse teams and 26% share of senior female leaders, we continue to advance our diversity and inclusion agenda.

As we continue growing our business, we aim to do so in a sustainable way. 
We have an ambition to reduce our emissions and improve our products and packaging, while operating responsibly. In 2022/23, we reduced our scope 1 and 2 emissions by 10% from the 2018/19 base year. We also increased our waste recycling rate to 75%.

The Board of Directors and the Executive Leadership Team continued their strong collaboration during the year, based on mutual respect and trust. 

Key topics this year were the acquisition of Kerecis and the current macroeconomic environment, as well as the launch of our Global Operations Plan 6, which was a key topic at the annual strategy days that the Board held in Hungary this year.

In 2022/23, Coloplast’s largest and second largest shareholders, Niels Peter Louis-Hansen and Aage og Johanne Louis-Hansen A/S, established a new holding company, as part of a generational change. The aim of the new holding company is to secure a long-term and stable ownership of Coloplast. 

Finally, we would like to thank our colleagues at Coloplast for their commitment and hard work this year. 
We would also like to thank our customers and investors for their continued trust and support. 

The Board of Directors recommends that the shareholders attending the general meeting approve a year-end dividend of DKK 16.00 per share. This brings the total dividend paid for 2022/23 to DKK 21.00 per share, compared to DKK 20.00 in 2021/22.

Lars Rasmussen
Chairman of the Board of Directors

Kristian Villumsen 
President & CEO