Ansell: Minimal Upgrade to Earnings Guidance After Expectedly Strong Start to the Year

Narrow-moat Ansell has had a strong start to fiscal 2025, with end-market conditions tracking broadly in line with our original expectations. Manufacturing demand is relatively weak, but new products have supported strong sales in its industrial segment. Meanwhile, its healthcare division is recording strong sales too, with customer destocking in key healthcare end markets now largely complete. Strong organic sales growth, together with its acquisition of Kimberly-Clark’s personal protective equipment business, or KBU, tracking ahead of management’s prior expectations, has more than offset cost inflation. Management relayed inflationary pressures in raw materials as well as higher freight costs on increased use of air freight to mitigate sea delays. Management also confirmed it’s on track to achieve its cost savings target of USD 45 million in fiscal 2025.