REG - ConvaTec Group PLC - AGM Trading Update

ConvaTecAnnouncement

18/05/2023 07:00

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RNS Number : 7987Z  ConvaTec Group PLC  18 May 2023

 

18 May 2023

Convatec Group Plc (Convatec)

AGM trading update for the four months ended 30 April 2023

 

Good start to 2023 - revenue guidance increased

Convatec, a global medical products and technologies company, announces a
trading update for the four months ended 30 April 2023. Revenue increased by
3.1% on an organic basis(1). On a reported basis revenue decreased by 1.7%, as
expected, following the exit of the hospital care activities and related
industrial sales in 2022. On a constant currency basis revenue increased by
0.8%. Given the good organic growth so far this year against tough
comparatives coupled with the improving momentum and confidence in the
outlook, we now expect organic revenue growth for 2023 to be between 5.0% and
6.5% (previously 4.5%-6.0%).

In Advanced Wound Care, organic growth was mid-single digit, with a strong
performance in Global Emerging Markets and good growth in Europe and North
America, the latter supported by a strong contribution from ATT(2).

In Ostomy Care, organic growth compared to the same category last year was
mid-single digit, with strong growth in Global Emerging Markets, good growth
in North America and key European markets.  In the new combined category,
which includes Flexi-Seal(3), growth was flat, with the positive performance
in Ostomy products offset by expected declines in Flexi-Seal.  This was owing
to phasing of sales which are expected to normalise across the year.

In Continence Care, organic growth was mid-single digit, benefitting from an
increase in reimbursement levels in the US. Organic growth was mid-single
digit both including and excluding industrial sales(4), which was added to the
category at the start of this year.

In Infusion Care, organic growth was flat for the first four months, due to
the phasing of customer orders and strong prior year comparators, as
anticipated. Underlying demand for Convatec's infusion sets remains strong. We
continue to expect high single-digit growth from this category over time.

 

Strategic progress over the last four months

·    Acquisition of a highly innovative anti-infective nitric oxide
technology platform: a unique natural antimicrobial and antibiofilm mode of
action, backed by compelling scientific and clinical data. Convatec is well
positioned to commercialise this technology across a variety of medtech device
applications starting with Advanced Wound Care, with the first product
expected to be launched in 2025

·    Plant Network Optimisation: announced plan to move manufacturing
operations from EuroTec facility in Roosendaal, the Netherlands, to our larger
site in Michalovce, Slovakia, which already manufactures similar Ostomy
products. The intended move will take place later this year and is part of our
simplification and productivity agenda

·    New product innovation

o  ConvaFoam(TM) launched in the US in January, and we are pleased with the
initial positive customer feedback

o  InnovaMatrix(TM) continued to demonstrate strong momentum in the large and
rapidly growing wound biologics segment(5) and contributed to organic growth
from April

o  Regulatory approval was received in the US for the sale of Medtronic's
780G with our MioAdvance(TM) Extended Wear Infusion Set

o  On track for further new product and customer launches in 2023:

·    GentleCath(TM) Air for Women, our compact catheter offering, in
France in Q4 2023

·    Tailored infusion set for Tandem Mobi, for launch in H2 2023 in the
US, subject to regulatory approval

·    inset(TM) and contact(TM) infusion sets for the Beta Bionics iLet
Bionic Pancreas in the US, subject to regulatory approval

·    Neria(TM) guard infusion set for AbbVie's ABBV-951 Parkinson's
disease therapy which has been submitted for regulatory approval across global
markets

Revenue guidance increased

Given the good organic revenue growth so far this year against tough
comparatives coupled with the improving momentum and confidence in the
outlook, we now expect organic revenue growth for 2023 to be between 5.0% and
6.5% (previously 4.5%-6.0%). We continue to expect to increase our operating
profit margin on a constant currency basis to at least 19.7% (FY2022: 19.5%).

 

***

 

Footnotes

 

1 Organic growth is calculated by applying the applicable prior period average
exchange rates to the Group's actual performance in the respective period and
excluding acquired and disposed/discontinued businesses

(2)Triad Life Sciences, now known as Advanced Tissue Technologies (ATT),
included in organic growth from 1 April 2023

(3) Faecal management system, which was moved to Ostomy Care at the start of
this year

(4) B2B catheter sales, which was moved to Continence Care at the start of the
year

(5) SmartTRAK wound biologics segment includes skin substitutes, active
collagen dressings and topical drug delivery

 

Contacts

 

 Analysts & Investors      Kate Postans, Vice President, Investor Relations & Corporate                  +44 (0) 7826 447807
                           Communications
                           Sheebani Chothani, Investor Relations & Corporate Communications Manager      +44 (0) 7805 011046

                                                                                                         ir@convatec.com (mailto:ir@convatec.com)
 Media                     Buchanan: Charles Ryland / Chris Lane                                         +44 (0)207 466 5000

 

About Convatec

Pioneering trusted medical solutions to improve the lives we touch: Convatec
is a global medical products and technologies company, focused on solutions
for the management of chronic conditions, with leading positions in advanced
wound care, ostomy care, continence care, and infusion care. With around
10,000 colleagues, we provide our products and services in almost 100
countries, united by a promise to be forever caring. Our solutions provide a
range of benefits, from infection prevention and protection of at-risk skin,
to improved patient outcomes and reduced care costs. Group revenues in 2022
were over $2 billion. The company is a constituent of the FTSE 100 Index
(LSE:CTEC). To learn more about Convatec, please visit
http://www.convatecgroup.com (http://www.convatecgroup.com)

Forward Looking Statements

This document includes certain forward-looking statements with respect to the
operations, performance and financial condition of the Group.
Forward-looking statements are generally identified by the use of terms such
as "believes", "estimates", "aims", "anticipates", "expects", "intends",
"plans", "predicts", "may", "will", "could", "targets", continues", or their
negatives or other similar expressions. These forward-looking statements
include all matters that are not historical facts.

Forward-looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic and competitive
uncertainties and contingencies that are difficult to predict and many of
which are outside the Group's control. As such, no assurance can be given that
such future results, including guidance provided by the Group, will be
achieved. Forward-looking statements are not guarantees of future performance
and such uncertainties and contingencies, including the factors set out in the
"Principal Risks" section of the Strategic Report in our Annual Report and
Accounts, could cause the actual results of operations, financial condition
and liquidity, and the development of the industry in which the Group
operates, to differ materially from the position expressed or implied in the
forward-looking statements set out in this document. Past performance of the
Group cannot be relied on as a guide to future performance.

Forward-looking statements are based only on knowledge and information
available to the Group at the date of preparation of this document and speak
only as at the date of this document. The Group and its directors, officers,
employees, agents, affiliates and advisers expressly disclaim any obligations
to update any forward-looking statements (except to the extent required by
applicable law or regulation).

 

 

 

 

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