Coloplast Caps Off Full Year With Few Surprises on Favorable Foreign Exchange Tailwinds

Coloplast wrapped up its fiscal year very close to our full-year projections, and we’re leaving our fair value estimate unchanged. Aided by favorable foreign currency tailwinds, Coloplast’s reported fiscal fourth-quarter revenue grew by 9% (which also includes the addition of the Atos Medical acquisition), though organic growth was more muted at 6%, which is a touch lower than the 7% to 9% organic growth that Coloplast seeks over the long term. On the whole, full-year ostomy and continence care growth matched our estimates, while urology slightly outpaced and wound care slight trailed our expectations. We think the strength in interventional urology likely reflects resumption of normal growth along with additional topspin in the form of patients who had delayed care and are now seeking it. We remain confident in Coloplast’s narrow economic moat that is built on both switching costs and intangible assets. As we’ve discussed before, Coloplast has a particular end-patient focus that is more akin to the approach of consumer goods companies rather than medical supplies companies. For instance, the recent launch of the MyOstomyLife app complements the sensitive and high-touch personal support that Coloplast offers to ostomy patients during that post-operative adjustment period. This app brings that kind of support one step closer to patients.