Ansell Earnings: Improved Profitability With Productivity Program Progressing Well

Narrow-moat Ansell’s fiscal 2024 underlying EBIT fell 1% in constant currency to USD 196 million but was 3% ahead of our forecast thanks to better margins. Second-half fiscal 2024 EBIT margin improved over 4 percentage points to 14% versus the first half. This was largely driven by a significant improvement in Ansell’s healthcare division due to lower customer destocking. Our fiscal 2025 underlying EPS forecast of USD 1.17 is within management’s guidance range of USD 1.07 to USD 1.27. Our long-term estimates are broadly unchanged but we increase our fair value estimate by 5% to AUD 33.50 due to the time value of money and lower forecast capital expenditure. Fiscal 2024 capital expenditure decreased 7% and guided to stay relatively flat in fiscal 2025 despite the firm expecting to complete its new surgical manufacturing facility in India.