H1 2022: Temporary supply constraints slow down strong demand
COLTENE Holding AG / Key word(s): Half Year Results
Ad hoc announcement pursuant to Art. 53 LR
First-half (H1) 2022 results are in the upper range of preliminary figures announced in late June. These had indicated that the upward trend in new orders would be impacted by the global supply chain constraints. COLTENE was therefore unable in H1 to derive full benefit from the strong market demand. Against this background, Infection Control sales were significantly lower compared to a year earlier when catch-up effects provided a powerful lift. Efficient Treatment sales grew, by contrast, while Dental Preservation performed at prior-year levels. The net decline in sales also affected profitability. EBIT and net profit were lower, year-on-year. The supply chain backlogs are expected to be eased in H2 2022.
Half-year results dominated by external factors
After a strong performance in H1 2021 that was driven by catch-up effects in the wake of the prior pandemic year, demand returned to more normal levels in H2 2021. At the same time, global supply chain bottlenecks increasingly weighed on business performance. Those bottlenecks came fully to bear now, in H1 2022. The two factors combined explain most of why the Group posted sales of CHF 134.9 million, compared to CHF 143.5 million a year earlier. This is a 5.9% decline in CHF reporting currency terms, or 5.3% in local currency terms, from H1 2021. On this basis, operating profit (EBIT) for H1 2022 was CHF 16.7 million (H1 2021: CHF 26.0 million). The EBIT margin was 12.4% (H1 2021: 18.1%). Net profit was CHF 12.1 million (H1 2021: CHF 18.2 million).
Impact of supply constraints varies by product group
Shipping delays of electronic and other components required flexible employee work schedules in H1 2022. COLTENE was well positioned in H1 to successfully meet the more demanding requirements of flexible production runs. During H1 and also in anticipation of demand in the months ahead, COLTENE went about stockpiling selected components. Even so, there were shipping delays with certain product categories, notably electronic components used in Infection Control devices. Against this background, sales in this product group decreased 19.3%. In Efficient Treatment, by contrast, sales were up 3.1%. Dental Preservation sales were virtually unchanged. COLTENE was able to raise prices to pass on higher costs with a slight time lag.
Performance varies by region, with Latin America making a sharp recovery
COLTENE's biggest market, North America, generated 45.7% of Group sales (H1 2021: 50.3%). In local currency terms, sales in this region were down 16.8%, primarily as a consequence of the supply constraints affecting Infection Control and the return to more normal levels of demand for surface disinfection products. For EMEA, the share of sales was 36.8% (H1 2020: 35.0%). In local currency terms, this is an inspiring sales increase of 4.4%, year-on-year (-1.2% in CHF). Asia's share of sales was 10.8% (H1 2021: 10.4%). This is a change of -1.9% in CHF, or -2.0% in local currency terms, compared to a year earlier. Asia sales were dominated primarily by the strict lockdowns in China. In a sharp recovery, the Latin American market expanded its share of sales to 6.7%, from 4.3% a year earlier, a 42.9% increase in local currency terms.
Stronger customer focus thanks to investments in infrastructure
Begun in 2021, new training infrastructure for customers and key opinion leaders in the US was completed and inaugurated in H1 2022. These investments enable customer-centric classroom-based instruction and hands-on training onsite. In addition, the investments made in harmonizing the customer relationship management (CRM) system are paying dividends. The system enables efficient management of customer requests across regions while also promoting internal transparency. Ultimately, these investments in training infrastructure and CRM help sharpen our customer focus and heighten the impact of our Marketing and Sales teams.
The outlook for full-year 2022 remains positive. COLTENE affirms the full-year outlook announced at the end of June and expects the supply chain bottlenecks to be eased in H2 2022 and H2 sales and profit to outperform both H1 2022 and H2 2021. At constant exchange rates, COLTENE expects full-year 2022 sales in line with 2021 figures and an EBIT margin trending toward the medium-term target of 15%. The outlook for full-year 2022 remains clouded by uncertainties on account of the current state of the global economy. The results for full-year 2022 will be released on 3 March 2023.
Half-Year Report 2022
The Half-Year Report 2022 of COLTENE Holding AG was released today and is available for download at www.coltene.com/investor-relations/financial-publications/half-year-reports/.
For further information: Markus Abderhalden, CFO,
This written statement and oral statements or other statements made, or to be made, by us contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations, as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
End of Inside Information
|Company:||COLTENE Holding AG|
|Listed:||SIX Swiss Exchange|
|EQS News ID:||1413871|
|End of Announcement||EQS News Service|