UPDATE 2-Coloplast aims to grow at twice the market rate in coming years

Wed Jun 4, 2014 9:02am EDT

* Expects 7-10 pct revenue growth/year next 3 to 5 years

* Expects EBIT margin expansion of 0.5-1.0 pct points

* This marks a permanent shift to higher growth rates - CEO

* The new guidance is very aggressive - DNB Markets

* Shares up more than 4 percent to all-time high (Adds analyst, CEO, background, updates share price)

By Stine Jacobsen

COPENHAGEN, June 4 (Reuters) - Danish healthcare products maker Coloplast has targeted sales growth of 7 to 10 percent per year over the next three to five years, the company said on its capital market day on Wednesday.

Coloplast, Denmark's fourth-biggest company by stock market value, has seen its shares rise by 33.5 percent this year ahead of Wednesday's presentation, outperforming a 17 percent rise in the country's benchmark stock index.

"The most important things is to deliver on our pipeline, continue the investments in consumers and continue to build our presence in emerging markets," Chief Executive Lars Rasmussen told Reuters.

He was confident the company had made a permanent shift from previous annual growth rates of around 6 percent.

Coloplast is aiming for revenue growth of almost double the estimated general market rate of 4 to 5 percent.

"To grow twice the market as a market leader is an aggressive guidance," DNB Markets analyst Rune Majlund Dahl said.

The group, which sells products ranging from colostomy bags to wound dressings, previously had a goal of delivering profitability in line with the best-performing medical technology companies and to outperform the market.

Its shares jumped 4.2 percent to an all-time high at 500.5 Danish crowns ($910) by 1215 GMT, outperforming a 0.5 percent rise in Copenhagen's benchmark index.

ACQUISITIONS TO GAIN SCALE

Rasmussen saw limited possibilities for acquisitions in Coloplast's biggest business areas for ostomy and continence care. But acquisitions in its smaller business for wound and skin care, where the company currently has a 5 to 10 percent global market share, would be an obvious possibility, he said.

"We are sub-scale, but if we get more scale we would also be more profitable, so yes M&A activities could be efficient to that part of the business," Rasmussen said.

The group also forecast an expansion of its operating margin by 0.5 to 1.0 percentage points a year in the next three to five years.

Coloplast reported an operating margin of 32 percent in its 2012-2013 accounting year, up from 12 percent in 2007-2008.

The company has few direct competitors. British medical equipment and technology company Smith & Nephew, which competes with it in some areas, reported an operating margin of 18.6 percent in 2013.

Coloplast is among the three most highly valued stocks in the Thomson Reuters Europe Medical Equipment Index , with a price-to-book ratio of 14.5. It has the highest return on equity in the index at 42.32 percent, the data show.

"The stock is expensive, but today we got a signal that it is a fair price," Alm Brand Markets analyst Michael Friis Jorgensen said. ($1 = 5.4798 Danish Krones) (Editing by David Holmes and Jane Baird)