1. Business Model – Simple & Resilient
- Core focus: Disposable medical products for chronic conditions
- Key segments: Ostomy, Continence, Voice & Respiratory, Advanced Wound Care
- Recurring revenues: Chronic patients, high brand loyalty
- Channels: B2B2C, strong ties with healthcare providers
2. Durable Competitive Moat
- Market share leadership: 35–40% Ostomy, 40–45% Continence, ~80% Laryngectomy
- Sustained profitability: 27–32% EBIT margins (5Y avg, above peers)
- Value creation: ROIC 11.4% vs WACC 4.17%
- Pricing power: 7–8% organic growth despite reimbursement pressure
- High switching costs: Reluctance of chronic patients to change products
- Innovation moat: ~4% of sales in R&D
3. Management Quality
- Disciplined capital allocation: Atos (€16B), Kerecis (€9B) acquisitions
- Dividend policy: Target 60–80% payout, temporarily elevated
- Leverage discipline: Net Debt/EBITDA target 1.5x by 2030
- Clear roadmap: Impact4 strategy – measurable 5Y growth plan
4. Valuation – Significant Upside
- Current price: 617 DKK
- Intrinsic value (base): 959 DKK → +55% upside
- DCF (2-stage): 1,226 DKK/share
- Phase 1: 7% CAGR (5Y, in line with guidance)
- Terminal: 2.5%
- WACC: 4.17%
- EPV floor: 334 DKK (downside protection)
- IV triangulation: 334 (bear) | 959 (base) | 1,472 (bull)
- Call: BUY – High Confidence
5. Key Strengths
- Competitive: Market leadership, global footprint (30+ countries), robust pipeline, selective D2C
- Financial: EBIT margins 27%, ROE 24.7%, FCF yield 3.7%, solid balance sheet (ICR 11x)
- Strategic: Impact4 growth plan, ROIC >20% target, portfolio focus on high-margin chronic care, deleveraging initiatives
6. Risk Factors
- Sector: U.S. reimbursement cuts, FDA/EMA regulation, pricing pressure via tenders
- Company: Premium valuation (PE 34x), FX exposure, integration/execution risks
Mitigation: Diversified product/geography mix, strong innovation moat, proven execution
✅ Conclusion: Attractive entry point in a high-barrier chronic care leader with durable moat, strong financials, and >50% upside potential.
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