Shareholders in Ansell (ASX:ANN) will be pleased with the H125 dividend which follows increased demand for personal protection products.

The $5B market cap company will pay an unfranked dividend of US22.2 cents, after reporting a nearly 30% increase in sales, to USD$1019.7m. This represents 12.5% on an “organic constant currency basis.”

What’s constant currency? Well, that’s comparing the result with the same half last year at constant currency, adjusting for the effects of acquisitions, divestments and businessexits including the company’s ‘household gloves exit’ and KBU acquisition.

KBU was bought from Kimberly-Clark Corporation for $635.1 million and finalised at the start of July last year.

EPS guidance lift

The company has upped its FY25 Earnings Per Share guidance by 10 cents, to US128c.

MD and CEO Neil Salmon said he was encouraged by the momentum in ANN’s underlying business, saying it’s on track to complete integration of KBU within 12 months.

“Good top and bottom-line results in our industrial segment were supported by a significant contribution from new products,” he said.

“[That’s] helping to overcome muted demand conditions in key manufacturing end markets, and our healthcare segment rebounded from the effects of distributor destocking in the prior period.

“Higher sales drove strong earnings growth in both segments, including a contribution from KBU which was ahead of our acquisition business case, and growing savings from APIP.”

Ansell’s APIP, or Accelerated Productivity Investment Program, targets FY26 annualised pre-tax cost savings of $50 million.

Another key metric is the company’s pro forma net debt to EBITDA reduced to 1.6x, reducing interest costs moving forward.

Concerns about changing trade policies

Mr Salmon did warn Ansell may not be immune from changing trade policies.

“Entering the second half we see a path to continued organic constant currency sales growth, despite subdued industrial demand and uncertainty stemming from changing trade policies in various countries,” he said.

Tariffs have been announced on U.S. imports of products from China, Mexico, and Canada.

Ansell reports it has plans to substantially offset tariff increases through pricing, with limited cost impact expected in FY25 H2.

He says strength was underpinned by the “opportunity and flexibility provided by Ansell’s balanced end market exposure and diversified global supply chain.”

Was the acquisition worth it?

KBU sales in the first half were $140.9m, representing growth of 7.4% on an organic constant currency basis.

KBU EBIT in FY25 H1 was $34.8m, representing growth of 22.1% on an organic constant currency basis. Growth was driven by higher sales and margin favourability

The growth was thanks to Kimtech’s (trademark) cleanroom and laboratory products, more than offsetting declines in KleenGuard’s (trademark) industrial safety products.

Sales of KleenGuard industrial safety products were supported by Kimberly-ClarkProfessional sales force in the first half and are being transferred to Ansell, which says it will have “renewed focus and dedicated support to help return this business to growth.”

ANN shares last traded at $34.93.

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