Ansell has delivered a strong performance in its full year results for 2016 but raised a question mark over the future of its strongly performing sexual wellness business division.
Magnus Nicolin, Ansell CEO and MD, said achieving constant currency EBIT growth “was a solid result” in challenging market conditions.
The company’s sexual wellness business performed well with revenue growing in constant currency by 8.2 per cent and EBIT 41 per cent.
This result stands in stark contrast to its medical business where revenue fell 8.3 per cent with EBIT 17.5 per cent lower.
Both the industrial and single use business units performed creditably with industrial recording sales increases of 3.3 per cent and EBIT of 10.1 per cent, within single use sales were relatively stable (although down by 1.1 per cent) with a strong EBIT growth of 14.9 per cent.
While overall results for the full year were at the low end of the company’s original guidance, significant progress (particularly in the second half) saw the company deliver against key priorities outlined mid-year, according to Mr Nicolin.
“Our growth brands in industrial, single use and sexual wellness continued to outperform the market, gaining share through success of new product launches and continued progress in developing stronger distributor partnerships,” Mr Nicolin said.
Strong sexual wellness performance
With the company’s sexual wellness business achieving revenue growth of 8.2 per cent and EBIT 41 per cent, the unit’s contribution to the overall company result is significant.
SKYN, the company’s leading non-latex condom brand, saw success with lubricants and continued share gain.
The SKYN brand grew 12 per cent, while the company’s natural rubber latex brands also performed well with 10 per cent growth.
Increased investment in marketing activities was more than offset by reduced overheads and productivity gains in manufacturing and distribution.
Goldman Sachs appointed in portfolio review
Ansell has appointed Goldman Sachs to assist it in a “review of options” for the sexual wellness business, saying it will focus on opportunities for portfolio optimisation in FY17
Mr Nicolin said: “We continually review our existing portfolio in a disciplined way. This will include consideration of options for the sexual Wellness business and opportunities to enhance our positions in the industrial and medical businesses with value-enhancing acquisitions.”
Of the company’s four business units, sexual wellness is the only non-business-to-business division.
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