Ansell Surges with Double-Digit Growth and Raises FY25 EPS Guidance
Ansell Limited delivered a robust FY25 half-year performance, marked by double-digit sales and earnings growth, successful KBU acquisition integration, and an upward revision of adjusted EPS guidance.
- 12.5% organic constant currency sales growth driven by healthcare and industrial segments
- KBU acquisition integration ahead of schedule with strong sales and EBIT growth
- Accelerated Productivity Investment Program (APIP) delivering $22m savings in H1
- Adjusted EPS guidance increased to US118¢–US128¢ for FY25
- Sustained investment in long-term growth, including new product launches and supply chain resilience
Strong Half-Year Performance Amid Strategic Expansion
Ansell Limited has reported a compelling set of results for the first half of FY25, showcasing double-digit growth in both top and bottom lines. The company’s sales surged to US$1.02 billion, reflecting a 12.5% increase on an organic constant currency basis, underpinned by robust demand recovery in healthcare and sustained momentum in industrial markets.
The integration of the Kimtech™ and KleenGuard™ Business Unit (KBU) acquisition, completed mid-2024, is progressing ahead of expectations. KBU contributed US$140.9 million in sales with a 7.4% organic growth and a notable 22.1% increase in EBIT, bolstering Ansell’s overall profitability and scale.
Operational Efficiency and Productivity Gains
Ansell’s Accelerated Productivity Investment Program (APIP) continues to deliver tangible benefits, achieving US$22 million in pre-tax savings during H1, on track for the targeted US$45 million annual savings by FY25 end. These gains, combined with improved manufacturing utilization and strategic cost management, helped offset inflationary pressures from higher freight and raw material costs.
The company’s gross profit after distribution expenses (GPADE) margin expanded by 140 basis points to 32.8%, reflecting a favorable product mix and operational leverage. Selling, general and administrative expenses grew modestly by 7% on an organic basis, partly due to transitional costs related to KBU integration and incentive accruals.
Innovation and Market Diversification Drive Growth
New product launches, including the Ringers® R840 impact protection gloves and HyFlex® ultra-lightweight cut protection range, have gained strong market traction. Healthcare segment growth was particularly pronounced, with a 16.3% organic increase driven by recovery from prior destocking and fulfillment of delayed surgical orders impacted by supply chain disruptions.
Ansell’s diversified manufacturing footprint across nine countries, including recent relocations from China to Sri Lanka, enhances supply chain resilience and flexibility. The company is also advancing its sustainability agenda, with progress on emissions reduction, waste management, and supplier compliance aligned with its 2040 sustainability targets.
Financial Strength and Outlook
Adjusted earnings per share rose 33.6% to 55.7 US cents, prompting management to raise FY25 EPS guidance to a range of 118 to 128 US cents. The balance sheet remains robust with a pro forma net debt to EBITDA ratio of 1.6x, below the initial target of 2.0x, supported by strong cash flow generation and disciplined capital allocation.
Looking ahead, Ansell plans to complete KBU integration by the end of FY25, continue investing in ERP system upgrades, and sustain organic growth momentum despite anticipated headwinds from currency fluctuations and tariff impacts. The company also maintains its dividend policy, reflecting confidence in ongoing cash flow strength.
Bottom Line?
Ansell’s strong FY25 H1 results and strategic execution set the stage for sustained growth, but investors should watch for cost inflation and integration risks in the second half.
Questions in the middle?
- How will Ansell manage rising raw material and freight costs amid inflationary pressures?
- What impact will the full integration of KBU have on margins and operational efficiency in FY26?
- Can Ansell sustain its accelerated growth trajectory in healthcare and industrial segments amid global economic uncertainties?
