January 28, 2010 / 7:32 AM / 9 years ago

UPDATE 3-Coloplast lifts guidance after Q1 beats forecasts

* Q1 EBIT rises to 454 mln DKK, above all forecasts

* Firm raises 2009-10 EBIT margin forecast to around 19 pct

* Sticks to full-year revenue growth forecast of 6-7 pct

* Shares up 12 pct (Adds details, quotes, byline, updates share price)

By John Acher and Teis Jensen

COPENHAGEN, Jan 28 (Reuters) - Danish medical supplies maker Coloplast (COLOb.CO) raised its 2009-10 earnings guidance on Thursday, on the back of forecast-beating profits and sales.

Shares in the company leapt more than 12 percent to a lifetime high, outpacing the DJ Stoxx European healthcare sector index .SXDP which was down 0.4 percent at the same time.

Earnings before interest and tax (EBIT) rose 36 percent from the same quarter a year earlier to 454 million Danish crowns ($85.7 million) in the first quarter to the end of December.

The result beat all forecasts of 365 million to 402 million crowns in a Reuters survey of analysts.

“It was a super report,” Jyske Bank trader Martin Munk said.

Chief Executive Lars Rasmussen said the firm, which makes medical supplies, from urine bags to wound dressings, had grown more efficient and profitable faster than expected.

“Our earnings have improved significantly, the relocation of production is running according to plan and the increase in sales was as expected,” he said in a statement.

Coloplast is relocating production to Hungary and China.

“We are using less money on administration activities — both at the headquarters and in the sales subsidiaries,” he said. “We have also become more effective at selling, and are selling more per sales representative.”

Rasmussen told Reuters that the German business, which had earlier been troubled, had improved significantly, and the U.S. market, mainly for urology products, had begun to normalise.

Coloplast raised its EBIT margin guidance for the full year 2009-10 to about 19 percent from an earlier forecast of 17-18 percent at constant exchange rates and 16-17 percent in Danish crowns.

“The new guidance follows a strong first quarter showing organic growth of 7 percent and an EBIT margin of 20 percent against 15 percent in Q1 2008-09,” Coloplast said.

“We continue to expect organic revenue growth of 6-7 percent,” Coloplast said in a statement.

First-quarter sales grew 5 percent to 2.30 billion crowns, beating analysts’ average estimate of 2.28 billion, reflecting the resilience of demand for medical supplies despite the global downturn.

LONG-TERM TARGETS BROUGHT FORWARD

“We will continue our focus on earnings, while at the same time investing in projects that will increase growth on a long-term basis,” Rasmussen said.

Coloplast said its long-term financial target to raise its EBIT margin to at least 20 percent remained unchanged, but it now expected to reach it in the fiscal year 2010-11 instead of within two to four years as earlier indicated.

The company said it would launch a share buy-back programme in February, with the first 500 million crowns worth of the up to 1-billion-crown scheme to be completed by end-September. (Reporting by John Acher; Editing by David Cowell and Rupert Winchester)

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