Strategisk analyse og værdiansættelse af Coloplast A/S

Ulrik Wørmer

Student thesis: Master thesis

Abstract

This master's thesis encompasses a strategic analysis and valuation ofthe Danish company Coloplast A/S. Coloplast is a global producer of medical equipment, and specializes in intimate healthcare. Coloplast operates in three business areas: ostomy care; urology and continence care; and wound and skin care. Recently, Coloplast has faced a number of problems relating to the German ostomy care business, SIEWA, and in its wound and skin care division. These problems will affect growth in the short perspective. In the long run, the aging population and obesity in the western population and the growing economic health in emerging markets will give Coloplast opportunities to increase sales. However, future pressure on the health sector has forced politicians to introduce healthcare reforms in main markets, such as in UK, France, Germany and the VS. Combined with bulk purchases in the healthcare sector, the healthcare reforms will increase pressure on the prices. In order to mitigate with the increasing price pressure, the Coloplast strategies has focused on cost reductions and efficiency in the organization. In recent years, Coloplast has invested in production facilities in Hungary and China in order to transfer production from Denmark to these low costs areas. The efficiency has also been improved by implementation of the lean manufacturing principles in the administration throughout the organization. Coloplast has increased gross profit in the analysis period. Further, the distribution and administration costs have decreased in the period, which shows that the above-mentioned efforts on cost savings have had an impact on profit performance. However, the common-size analysis showed that the management should focus on reducing production costs in order to improve eamings. The valuation ofColoplast is based on the DCF model and is founded on the budgeting ofColoplast's future cash flows. The enterprise value of Coloplast is estimated to be DKK. 27,344m, amounting to a share price of DKK. 568. The estimated price is 46% above the price at 14 May 2009. The market value of Coloplast seems to be undervalued. The dec1ine in the German ostomy business area and the problems in the wound and skin care division will raise some uncertainty with the potential investor, and these circumstances seem to be reflected in the current share price.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2009
Number of pages100