Læs hele analysen af Coloplast her.
Investeringsanalyse, 20. januar, Debbie Wang
Based in Denmark, Coloplast is a leader in the global ostomy and continence-care arena. The firm has made inroads into the urology and wound-care markets, but it remains a peripheral player there. We think Coloplast has dug itself a narrow moat thanks to consistent innovation in ostomy and continence care that has led to a dominant position in Europe. Since 2008, the firm has done an admirable job of trimming its cost structure as it focused on profitable growth. As a result of shifting the majority of its production to Hungary and China, Coloplast now enjoys gross margin that beats that of rival ConvaTec by 1,500 basis points. Now, Coloplast is shifting its emphasis to enhance growth by entering new geographies and taking advantage of cross-selling opportunities.
We think Coloplast's urology segment may offer growth potential, as there are attractive cross-selling opportunities to introduce female pelvic slings, kidney stone management products, and inflatable penile implants to the underpenetrated European market. While Coloplast remains a peripheral competitor in this area (with an estimated 5%-10% global share), especially compared with giants like Boston Scientific and Johnson & Johnson, we think its outsize footprint in the European ostomy and continence markets should give its urological expansion a leg up in this geography.
We are less keen on Coloplast's wound-care segment, which had run into some turbulence thanks to pricing missteps and competitive product launches. Perhaps more important, we are concerned that Coloplast's limited wound-care portfolio--mainly foam dressings--is on the lower-tech end of the spectrum, leaving the firm more vulnerable as advanced wound care has moved toward negative-pressure wound therapy and hydrofiber products. Without greater breadth in its wound-care portfolio, Coloplast faces the march of commodification from manufacturers of lower-tech dressings. Additionally, the majority of wound-care products are sold to providers (versus directly to patients themselves), which means there is greater pricing pressure from group purchasing organizations and government bidding processes.
Bulls and Bears say
Bulls say
- Thanks to aging populations in developed countries, the incidence of colorectal disease is growing. Independent of age, the incidence of inflammatory bowel disease is also on the rise.
- Growing household income coupled with health-care reform is making emerging markets an attractive target for Coloplast.
- The U.S. remains one of the largest ostomy-care and continence markets, and Coloplast has beefed up its footprint and made inroads in that geography.
Bears say
- Complications from transvaginal mesh have cast a pall on the entire category, which includes Coloplast's vaginal slings for incontinence.
- Coloplast's wound-care portfolio is relatively limited, especially when compared with the breadth of products from Smith & Nephew and ConvaTec, which includes high-tech solutions such as negative-pressure wound therapy, gels, and hydrofiber dressings.
- Adoption of new ostomy and continence products (and usage volume) is highly sensitive to reimbursement policies. If reimbursement becomes less generous, this could hit Coloplast's squarely on the chin.
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