# Ansell Limited Outperforms Expectations Amid Economic Challenges - Fiscal Year 2024 Financial Review
Ansell Limited (ASX: ANN), a global frontrunner in protection solutions, has reported a commendable financial performance for the fiscal year 2024. Even amid economic uncertainties and rising costs, the company managed to deliver adjusted earnings per share (EPS) towards the higher end of expectations, standing just below $0.106. Despite a near 3% decline in sales on a constant currency basis, the robust growth in the industrial segment compensated for the lower sales in the healthcare sector. Ansell’s balance sheet remains strong, and the company is optimistic about achieving organic growth and leveraging productivity benefits in the upcoming year, with an EPS forecast range of $1.07 to $1.27 for FY 2025.
## Key Takeaways
- **Financial Performance**: Adjusted EPS just below $0.106, despite a slight sales decrease.
- **Industrial Growth**: Industrial segment sales grew by over 3%, while healthcare sales fell by 8% due to destocking and price reductions.
- **Strategic Acquisitions**: Completed the KBU acquisition for $640 million, expecting future EPS accretion despite a current dilution of $0.016.
- **Future Projections**: EPS forecast for FY '25 ranges from $1.07 to $1.27, with neutral industrial market conditions and slightly favorable healthcare demand.
- **Cost Management**: Plans to counter raw material inflation and higher freight costs through pricing actions and expects to deliver APIP savings.
## Company Outlook
- **Organic Growth**: Driven by investments in emerging markets and new product innovations.
- **Productivity Benefits**: Sustaining gains from the APIP program and realizing value from the KBU acquisition.
- **Liquidity and Reinvestment**: Maintaining strong liquidity and committing to value-accretive reinvestments.
## Bearish Highlights
- **Sales Decline**: A near 3% decrease in sales on a constant currency basis, with SG&A expenses rising by just over 4%.
- **Healthcare Segment**: Experienced an 8% decline in sales and lower earnings.
- **Foreign Exchange Impact**: Faced an $8 million headwind to EBIT due to foreign exchange, resulting in an $11 million loss from closing hedge book positions.
## Bullish Highlights
- **Industrial Segment**: Recorded a sales growth of over 3%, with earnings of $129 million and a margin of 16.5%.
- **Cash Flow**: Strong cash flow performance with operating cash flow just under $168 million.
- **Healthy Balance Sheet**: Pro forma net debt of 1.8 times EBITDA at year-end.
## Misses
- **Sales Target**: Missed sales target with a 3% decrease.
- **Healthcare Sector**: Destocking and price reductions negatively impacted sales and earnings.
## Q&A Highlights
- **Shipping Delays**: Impact of shipping delays due to the Red Sea blockage has not led to business losses.
- **Transition Period**: Moderate expectation of EBIT decrease during the transition period for sales from Kimberly-Clark to Ansell.
- **Chinese Tariffs**: Limited impact on Ansell expected from potential Chinese tariffs on medical gloves.
## Analysis for Everyday Investors
### What is This About?
This content covers Ansell Limited's financial performance for fiscal year 2024, focusing on their ability to manage economic challenges, strategic acquisitions, and future growth prospects. The company has shown resilience by delivering higher-end EPS despite a slight decline in overall sales.
### How Does This Affect You?
For those invested in Ansell or considering adding it to their portfolio, the company's strong balance sheet, strategic acquisitions, and optimistic forecast for FY 2025 suggest a stable investment with potential for growth. The focus on organic growth through emerging markets and new product innovations indicates that Ansell is well-positioned to capitalize on future opportunities.
### Financial Impact
- **Positive**: Strong cash flow, industrial segment growth, and robust liquidity position make Ansell a promising investment.
- **Negative**: Sales decline, especially in the healthcare segment, could be a concern if not addressed effectively.
### Personal Finance Tip
Diversifying your investment portfolio by including companies like Ansell, which have a solid track record and strategic growth plans, can help mitigate risks and enhance long-term returns. Always consider both the bullish and bearish aspects before making investment decisions.
In summary, Ansell Limited's financial performance and strategic initiatives indicate a promising future, making it a potentially valuable addition to an investment portfolio. The company's proactive approach to cost management and focus on innovation and growth in emerging markets are key factors that could drive its success in the coming years.