REG - Convatec Group PLC - AGM Trading Update

ConvaTecAnnouncement

Yesterday 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250522:nRSV6818Ja&default-theme=true

RNS Number : 6818J  Convatec Group PLC  22 May 2025

AGM trading update for the four months ended 30 April 2025
                                        22 May 2025

 

Strong start to the year, on track to deliver targets

Highlights

•    YTD organic revenue growth(1) excluding InnovaMatrix(®) 6.7%(2),
broad-based across all categories

•    YTD organic revenue growth(1) including InnovaMatrix(®) 6.2%;
reported growth 5.1%

•    As previously reported, InnovaMatrix(®) outlook improved by the
postponement
(https://otp.tools.investis.com/clients/uk/convatec_group_plc/rns/regulatory-story.aspx?cid=2779&newsid=1928684)
of Local Coverage Determinations (LCDs) in US skin substitutes until 2026

 

Broad-based organic revenue growth across our four categories

•    Advanced Wound Care (AWC) organic revenue growth(1) was low-to-mid
single digit excluding InnovaMatrix(®). Growth was strong in North America,
as ConvaFoam(TM) revenues increased, and good across Global Emerging Markets
(GEM). Europe started slower but will accelerate through FY25 supported by new
product launches. InnovaMatrix(®) was impacted by uncertainty prior to the
now-postponed LCDs and revenue declined, as expected (see page 3)

•    Ostomy Care (OC) organic revenue growth(1) was mid-single digit.
There was good growth in North America, supported by new patient starts, and
in GEM (including Brazil and China). In US and Europe, the launch of Esteem
Body(TM) continued to perform well

•    Continence Care (CC) organic revenue growth(1) was
mid-to-high-single digit. We saw further growth in patient volumes in Home
Services Group in North America, driven by our focus on customer service. Our
recently launched hydrophilic compact catheter, GentleCath Air(TM) for Women,
continued to perform well in North America and Europe

•    Infusion Care (IC) organic revenue growth(1) was double-digit. As
expected, we benefited from positive phasing in the period which will
normalise in the remainder of the year. We continued to see strong underlying
demand for infusion sets in diabetes and non-diabetes treatments, with faster
organic(1) growth from new customers, products and therapies, especially
Neria(TM) Guard for AbbVie's Parkinson's treatment

 

Tightened FY25 financial guidance

•    We now expect Group organic revenue growth(1) excluding
InnovaMatrix(®) of 5.5-7.0% (previously 5.0-7.0%), and we expect
InnovaMatrix(®) revenues of at least $75m. Our FY25 revenue growth guidance
for each category is unchanged (further details on page 2)

•    We remain on track to deliver an adjusted operating profit margin of
22.0-22.5% (FY24: 21.2%) and another year of double-digit adjusted EPS growth

 

Karim Bitar, Chief Executive Officer, commented:

"Convatec delivered a strong start to the year with continued broad-based
organic revenue growth across all our categories. We are on track to deliver
our financial targets. Our FISBE strategy continued to drive our performance,
supported by our strongest-ever innovation pipeline and ongoing simplification
and productivity initiatives. We are focused on providing high quality chronic
care solutions for customers, patients and healthcare professionals. Looking
ahead, we are well-positioned to consistently deliver strong revenue growth
and double-digit adjusted EPS growth."

 

(1) Organic revenue 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) In the four months to 30 April 2025, non-InnovaMatrix revenue
represented c.97% of Group revenues

Strategic progress

Innovation remains a key focus and we are progressing the delivery of our
strongest-ever new product pipeline:

o  AWC: ConvaNiox(TM), our breakthrough nitric oxide dressing, received
regulatory approval
(https://www.convatecgroup.com/media-articles/press-releases/2025/convatec-receives-regulatory-approval-for-convaniox/)
in Europe & the UK in April. We are planning an initial market launch in
Europe later this year (for additional information please see page 3). For
ConvaFoam(TM), our win-rate in US evaluations remained very good (>50%) and
we have launched in Europe

o  OC: Esteem Body(TM) continued to launch strongly in key markets across
North America, Europe and GEM. FlexiSeal Air(TM), the next generation of our
market-leading fecal management system, is due to launch in Q3 25

o  CC: GentleCath Air(TM) for Women continued to grow share in Europe and the
US. The equivalent solution for men, GentleCath Pocket and Set(TM), is due to
launch in 2026

o  IC: AbbVie's pump therapy for advanced Parkinson's Disease continued to
progress well in the US, Europe and Japan driving high demand for Neria(TM)
Guard infusion sets

Our simplification and productivity initiatives made further progress. In
Global Quality & Operations, we continued to increase automation across
the Group and our procurement teams delivered purchasing efficiencies. In
Commercial, we increased the use of AI to drive productivity improvements in
areas such as marketing automation, translation and customer service. In
G&A, we are on track to deliver incremental savings in FY25 by further
expanding the scope of our Global Business Services function.

Previous guidance (unchanged):

-       FY25 organic revenue growth(1) guidance for each category:

-    AWC: mid-single digit excluding InnovaMatrix(®); OC: mid-single
digit; CC mid-to-high single digit; IC: high-single digit

-       Capex of $130m-$150m

-       Interest expense of $70m-$75m

-       Adjusted book tax rate of c.24%

-       Working capital growth no greater than revenue growth

-       Cash adjusting items c.$20m, similar to FY24

-       Own share purchases up to 15m shares in FY25 for employee
incentives

Additional guidance

-     We do not expect material financial impacts from tariffs. Any
incremental costs will be managed within our existing guidance

-    Based on current FX rates for the remainder of FY25 we see a Group
revenue tailwind c.40bps and an adjusted operating profit margin headwind of
c.20bps versus FY24

Conference call details

Jonny Mason, Chief Financial Officer, will host a conference call for analysts
and investors to discuss the trading update at 8:30am UK time on 22 May.
Please register for the webcast using this link
(https://www.investis-live.com/convatec/6810d592800d38000f872ebe/kanert) .
Dial-in details are shown below:

•      United Kingdom (Local): +44 20 3936 2999

•      United Kingdom (Toll-Free): +44 800 358 1035

•      Access Code: 417370

•      Global Dial-In Numbers
(https://www.netroadshow.com/conferencing/global-numbers?confId=81868)

 

Contacts

Analysts &                              David Phillips
 
                                          +44 (0) 7909
324994

Investors                                 Vice President,
Investor Relations
                               ir@convatec.com
(mailto:ir@convatec.com)
 

                                                Jamie
Lewis

 
 Investor Relations
Manager

 

Media                                      FGS Global
 
                              Convatec-UK@fgsglobal.com
(mailto:Convatec-UK@fgsglobal.com)

 

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 more than
10,000 colleagues, we provide our products and services in around 90
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. Convatec's revenues in 2024
were over $2 billion. The company is a constituent of the FTSE 100 Index
(LSE:CTEC). To learn more please visit http://www.convatecgroup.com
(http://www.convatecgroup.com/) .

About ConvaNiox(TM)

ConvaNiox(TM) is set to improve outcomes for hard-to-heal wounds and has
demonstrated outstanding clinical results, reducing wound area three times
faster and increasing Diabetic Foot Ulcer (DFU) healing by 60% compared to the
standard of care in a randomised controlled trial. This multimodal wound
dressing combines advanced dressing technology with a potent antimicrobial and
antibiofilm agent, nitric oxide*. Convatec's pioneering R&D teams have
developed ConvaNiox(TM) following the acquisition of 30 Technology's nitric
oxide technology in 2023
(https://www.convatecgroup.com/media-articles/press-releases/2023/convatec-secures-a-highly-innovative-technology-platform-in-the-anti-infective-space/)
. DFUs are chronic, often recurring, conditions that affect 40-60 million
people globally resulting in disability, emotional distress and higher
healthcare costs. For further information please see this press release
(https://www.convatecgroup.com/media-articles/press-releases/2025/convatec-receives-regulatory-approval-for-convaniox/)
.

*Claims may not be supported in all markets

About InnovaMatrix(®)

InnovaMatrix(®) is the first-ever porcine placental-derived extra-cellular
matrix for treatment of chronic, surgical and trauma wounds. It
(https://www.convatec.com/advanced-wound-care/extracellular-matrix/)
(https://www.convatec.com/advanced-wound-care/extracellular-matrix/) is an
excellent product
(https://www.convatec.com/advanced-wound-care/extracellular-matrix/) with US
Federal Drug Administration (FDA) 510K clearance which delivers strong
real-world results for patients and is trusted by clinicians. As we reported
on 14 April 2025
(https://otp.tools.investis.com/clients/uk/convatec_group_plc/rns/regulatory-story.aspx?cid=2779&newsid=1928684)
, we welcomed the postponement by the Centers for Medicare & Medicaid
Services of the LCDs for Skin Substitutes and Tissue-Based Products for the
treatment of DFU and VLU.

As expected, the market uncertainty caused by the now-postponed LCDs resulted
in InnovaMatrix(®) revenues down year-to-date. While market uncertainties
remain, we are engaging with healthcare professionals to drive
InnovaMatrix(®) sales near-term and we are firmly focused on securing
long-term Medicare reimbursement. Our RCTs
(https://www.convatecgroup.com/media-articles/press-releases/2024/convatec_update_on_innovamatrix_ac_clinical_data_second_randomised_controlled_trial_authorised/)
in Diabetic Foot Ulcers (DFU) and Venous Leg Ulcers (VLU) remain on track to
publish in 2026. We now expect InnovaMatrix(®) revenues of at least $75m in
FY25 (FY24 $99m).

 

Forward Looking Statements

This document may include 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. 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).

LEI number - 213800LS272L4FIDOH92

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTBIGDUIBDDGUB