Ansell share price on watch after half year earnings release

The Ansell Limited (ASX: ANN) share price will be on watch this morning following the release of its earnings for the half year ending 31 December 2019.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ansell Limited (ASX: ANN) share price will be on watch this morning following the release of its earnings for the half year ending 31 December 2019.

What did Ansell report?

Ansell announced sales of US$753.3 million, which is growth of 3.9% on the prior corresponding period (pcp), and 5.3% growth in constant currency (CC), while organic growth was 2.4%.

Organic growth in the company's healthcare segment came in at 3.4%, with solid momentum being maintained, while organic growth in its industrial segment was 1.3%, with recovery in EMEA and continued APAC growth.

Earnings before interest and tax (EBIT) came in at US$91.8 million for the half year, up 4.8% year-on-year and 17.4% in CC. Ansell's profit attributable was $65.8 million, up 3.5%, year-on-year.

Earnings per share (EPS) was 50.1 US cents, up 8.7% year-on-year and up 25.7% in CC, which the company attributes to sales growth, transformation benefits, favourable raw material costs and a share buyback.

Healthcare segment

In Ansell's healthcare global business unit (which constitutes 52.4% of revenue and 59.5% of segment EBIT), sales grew 4.1% in constant currency and 3.1% on a reported basis, including 6 months contribution from Digitcare, which was acquired in October 2018.

Ansell reported that the segment's organic growth was up 3.4% and emerging markets continued to perform strongly with 7.1% growth. New product sales also remain strong with a 13.7% contribution.

Life Science and Surgical & Safety Solutions continued to perform well with 9.5% and 5.8% organic growth, respectively.

Surgical & Safety Solutions maintained its migration towards synthetic surgical products, offsetting a decrease in lower margin powdered surgical gloves. Life Science continued to expand its salesforce and partnerships.

EBIT in constant currency was 26.4% higher than the prior year, due to favourable raw material costs, particularly nitrile, as well as improved manufacturing performance and benefits from pricing initiatives.

Ansell also noted that currency was a negative headwind, and on a reported basis, EBIT was up 14.0%.

Industrial segment

For the company's industrial global business unit, (which constitutes 47.6% of revenue and 48.4% of segment EBIT), sales increased 6.5% in constant currency and 4.7% on reported basis including 6 months contribution from Ringers, which was acquired in February 2019.

Organic growth was up 1.3%.

Ansell noted that despite ongoing challenges persisting in the automobile sector, performance improved over pcp and EMEA saw a strong recovery with 5.1% growth. APAC growth remained elevated predominately due to China, while the segment's performance in the US and Mexico was lower than anticipated as a result of reduced business confidence and economic uncertainty.

FY20 outlook and guidance

In the second half of calendar 2019, Ansell noted that it observed continued uncertainties around global economies and trade. In the release, Ansell commented that there are now tentative signs that global growth may be stabilising, though at subdued levels. It further commented that the overall financial implications of the coronavirus outbreak are difficult to predict, however any impact is anticipated to be minimal at this time.

Ansell is continuing to maintain its FY20 EPS guidance range of 112 US cents to 122 US cents, compared to FY2019 adjusted full year EPS of 111.5 US cents.

Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »