REG - Convatec Group PLC - Interim Results
Tue 07:00
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RNS Number : 8898S Convatec Group PLC 29 July 2025
29 July 2025
Interim results for the six months ended 30 June 2025
Delivering broad-based revenue growth, margin expansion & double-digit EPS
growth
Key financial highlights for 6 months to 30 June Reported Adjusted(5)
H1 25 H1 24 Change H1 25 H1 24 Change CC change
Revenue $1,180m $1,113m 6.0% $1,180m $1,113m 6.0% 6.3%
Operating profit $179m $149m 20.1% $252m $223m 13.1% 13.9%
Operating margin 15.2% 13.4% 1.8%pts 21.3% 20.0% 1.3%pts 1.4%pts
Diluted EPS 5.1 cents 3.8 cents 33.6% 8.0 cents 6.8 cents 18.7%
Dividend per share 1.877c 1.822c 3.0%
Percentage movements throughout this release are calculated on actual
unrounded numbers.
H1 25 financial highlights
• Organic revenue growth excluding InnovaMatrix(®) 6.8% (including
InnovaMatrix(®) 6.0%(1); reported 6.0%)
• Adjusted operating margin(2) up c.130 bps to 21.3% (c.140 bps YoY in
constant currency)
• 19% adjusted diluted EPS(2) growth; 34% reported diluted EPS growth
Broad-based organic revenue growth across categories, geographies and products
• AWC(4): 4.3%(1) ex-InnovaMatrix(®), led by a growing contribution
from ConvaFoam(TM,) and further Aquacel(®) Ag+ Extra(TM) growth.
InnovaMatrix(®) (c.3% of Group revenue) decreased by 13%, in line with our
expectations
• OC(4): 4.7%(1) supported by new patient starts in the US, Esteem
Body(TM) launch and growth in GEM
• CC(4): 6.7%(1) driven by volume growth in the US, excellent customer
service and accelerating international sales
• IC(4): 14.1%(1) with strong demand for infusion sets in both
diabetes and non-diabetes treatments
Successful new product launches
Our innovation pipeline is targeted at the fastest growing market segments:
• In AWC, ConvaFoam(TM) delivered high success rates in new customer
product evaluations
• In AWC, we achieved EU and UK regulatory approval for ConvaNiox(TM),
our highly innovative advanced wound dressing powered by nitric oxide. Initial
market launches are planned for Europe in H2 25
• In OC, we saw continued positive customer response to Esteem
Body(TM) which is winning segment share
• In CC, our compact catheter GentleCath Air(TM) for Women is also
winning segment share
• In IC, we continued to diversify customers and applications, and saw
our fastest organic growth from new customers, products and therapies,
particularly Neria(TM) Guard for AbbVie's Parkinson's treatment
Confident in FY25 outlook; on-track to deliver medium-term targets
• Group organic revenue growth excluding InnovaMatrix(®) of 5.5%-7.0%
(unchanged) driven by our broadening product portfolio and focused commercial
execution. InnovaMatrix(®) revenue of at least $75m(3) (unchanged)
• Adjusted operating margin(2) of 22.0-22.5% (unchanged), despite
c.(50) bps of headwinds from FX and anticipated tariffs in FY25
• Another year of double-digit growth in adjusted EPS(2), with at
least 80% cash conversion (unchanged)
• On-track to consistently deliver medium-term targets for 5-7% organic
revenue growth and reach mid-20s% adjusted operating margin(2) by 2026 or 2027
(unchanged)
Karim Bitar, Chief Executive Officer, commented:
"Convatec performed strongly in the first half and we are on track to deliver
FY25 financial guidance. Under our FISBE strategy, we saw further broad-based
organic revenue growth across all chronic care categories, further operating
margin expansion and double-digit growth in adjusted EPS.
"Looking ahead, we are well-positioned to deliver our medium-term targets,
including double-digit compound annual growth in EPS and free cash flow to
equity. This will be driven by our leading positions in structurally growing
markets, strongest-ever innovation pipeline and clear focus on execution
excellence by our dedicated team of over 10,000 colleagues worldwide."
H1 25 financial summary
• Adjusted operating margin(2) of 21.3%, up c.130 bps YoY (c.140 bps
in constant currency)
• Adjusted operating profit(2) up 13% to $252m. Reported operating
profit up 20% to $179m (H1 24: $149m)
• Adjusted EPS(2) increased 19% to 8.0 cents. Net finance costs down
$8m YoY to $32m and adjusted tax rate of 24.0% (H1 24: 23.7%). Reported EPS
increased 34% to 5.1 cents (H1 24: 3.8 cents)
• Free cash flow to equity(5) of $58m (H1 24: $57m)
• Equity cash conversion(5) of 35% (H1 24: 41%), reflecting the normal
timing of working capital cashflows which are expected largely to reverse in
H2 25
• Net debt to adjusted EBITDA ratio of 1.9x (H1 24: 2.3x), after $101m
in dividends, $69m capex, $26m M&A and $80m working capital (H1 24: $75m)
Category growth expectations and additional FY25 guidance (overall Group
outlook is on page 7)
• Category revenue growth guidance is unchanged for AWC, OC and CC. We
are increasing full year IC revenue guidance to double-digit after a strong
first half:
• AWC(4): mid-single digit growth excluding InnovaMatrix(® 3).
InnovaMatrix(®) revenue of at least $75m(3)
• OC(4): mid-single digit growth
• CC(4): mid-to-high single digit growth
• IC(4): double-digit growth (previously high-single digit growth)
• Net finance costs now expected to be $65-70m (previously $70-75m;
2024: $78m). Adjusted book tax rate is expected to be similar to FY24 at c.
24%, with the cash tax rate again materially lower
• Reflecting ongoing investments in innovation and efficiency
programmes, continue to expect capex of $130-150m, opex R&D spend of
c.$100-110m and cash costs of adjusting items of c.$20m
Investor and analyst presentation
The results presentation will be held at 09:45hrs (UK time) today. The event
will be simultaneously webcast and the link can be found here
(https://www.investis-live.com/convatec/684189b3800d38000f8a8c2b/yuij) . The
full text of this announcement and the presentation for the analysts and
investors meeting can be found on the 'Results, Reports & Presentations'
page of the Convatec website www.convatecgroup.com/investors/reports
(http://www.convatecgroup.com/investors/reports) .
Scheduled events
Trading update for the 10 months ending 31 October 2025 13 November 2025
FY25 preliminary results 25 February 2026
Dividend calendar
Ex-dividend 21 August 2025 Payment date 1 October 2025
Record date 22 August 2025
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 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/)
Contacts
Analysts & Investors David Phillips, Head of Investor Relations +44 (0) 7909 324994
Jamie Lewis, Investor Relations Manager ir@convatec.com (mailto:ir@convatec.com)
Media FGS Global Convatec-UK@fgsglobal.com
(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.
Acquisitions and disposals added 30 bps to constant currency growth in H1 25,
shown on page 4.
(2) Consistent with prior years, management present adjustments to the
reported figures to produce more meaningful measures in monitoring the
underlying performance of the business. These are set out in the table on page
12
(3) In November 2024, Medicare Administrative Contractors published Local
Coverage Determinations (LCDs) for Skin Substitute Grafts/Cellular and
Tissue-Based Products for the Treatment of Diabetic Foot Ulcers (DFU) and
Venous Leg Ulcers (VLU). Convatec's InnovaMatrix® was not covered by Medicare
for DFU/VLU treatments in the LCDs. The LCDs were then postponed until 1
January 2026, and as announced in our statement of 14 April 2025
(https://otp.tools.investis.com/clients/uk/convatec_group_plc/rns/regulatory-story.aspx?cid=2779&newsid=1928684)
, this improved the FY25 outlook for InnovaMatrix(®). See page 4 of this
statement for further InnovaMatrix® guidance.
(4) AWC is Advanced Wound Care; OC is Ostomy Care; CC is Continence Care and
IC is Infusion Care.
(5) Certain financial measures in this document, including adjusted results,
are not prepared in accordance with International Financial Reporting
Standards (IFRS). All adjusted measures are reconciled to the most directly
comparable measure prepared in accordance with IFRS in the Non-IFRS Financial
Information below pages 15 to 20
Operating Review for the six months ended 30 June 2025
Resilient business model driving sustainable growth
Convatec operates in four chronic care categories, which have market growth
rates varying between 4-8% p.a. We sell over 900 million high-quality
consumable products annually for a diverse range of chronic conditions and are
among a small number of leaders in the categories in which we operate. We
expect to consistently grow revenue faster than each market over the long
term, driven by the strongest new product innovation pipeline in our history.
Our resilient business model is focused on chronic care markets which are
structurally growing, with high recurring revenue. Our growth is broad-based
across categories, geographies and products, with leading market positions,
differentiated products and a strong new product pipeline.
H1 25 represented another period of sustainable and profitable growth for
Convatec, evidenced by organic revenue growth excluding InnovaMatrix(®) of
6.8% (6.0% including InnovaMatrix(®)), adjusted operating margin up c.130 bps
YoY to 21.3%, adjusted EPS(2) growth up 19% and strong cumulative equity cash
conversion. More information is provided in the financial review on page 7.
FISBE 2.0 strategy progress
Our FISBE (Focus, Innovate, Simplify, Build, Execute) strategy continued to
deliver operationally and strategically.
Focus sits at the heart of our strategy, with four categories and 12 focus
countries. Revenue growth exceeded market growth across these focus areas,
supported by new product launches. Focus also drives commercial activity and
customer centricity. We use customer Net Promoter Score (cNPS) as our key
measure of customer satisfaction and loyalty and are working towards capturing
cNPS for all our main customer groups. We also simplified our web experience
with AI-enabled features to provide easy access to enhanced digital content.
Innovation is key to our strategy and we invested c.$60m in R&D in H1 25,
opex and capex. We have the strongest new product pipeline in our history and
continued to strengthen Technology & Innovation capabilities. We have
launched eight new products in the last three years and continued to extend
these launches across our focus markets. We are also on track to launch a
further eight in the next two years. In H1 25, we saw a strong and positive
market reaction to the eight launches (see category reviews on page 4), such
as ConvaFoam(TM), Esteem Body(TM) and GentleCath Air(TM) for Women. As a
reminder, products launched since 2022 are:
• InnovaMatrix(®) in the US and starting to launch in Latin
America
• ConvaFoam(TM) in the US and key European markets
• Esteem Body(TM) in the US, Europe and GEM Focus markets
• GentleCath Air(TM) for Women in the US and key European markets
• Infusion set for the new Beta Bionics iLet Bionic Pancreas
system
• Extended Wear Infusion Set in US for the Medtronic 780G pump
• Infusion set for the new Tandem Mobi pump
• Neria(TM) Guard Infusion set for AbbVie's Parkinson's therapy
In Simplify, we made further good progress, as evidenced by the c.130 bps
increase in adjusted operating margin (c.140% bps on a constant currency
basis). In operations, we continued to realise the benefits of the plant
network optimisation completed in 2023-24, with more production focused at our
large Slovakia site. Ongoing investments in automation are also driving
improved productivity, including in high-speed production and global
packaging. In technology, we further reduced the reliance on external
resources, generating an annualised saving of c.$5m. In G&A, Convatec
Business Services (CBS) continued to drive better service outcomes using
standardised processes, with our adjusted G&A reduced to 7.0% of revenue
(H1 24: 7.5%).
In Build, our investments in R&D, capex and clinical knowledge are clear
examples of adding capability to Convatec. In the period we invested $69m in
capex, to increase capacity and improve productivity. This included beginning
a new high-speed line in Infusion Care and further packaging automation in
AWC. Our Sales & Marketing Centre of Excellence (CoE) launched a new
global patient service platform to provide more personalised experience in our
me+ programme
(https://www.convatec.com/en-gb/stoma-care/campaigns/me-programme/) - which
marks its tenth anniversary later this year - and we continued to automate a
range of marketing activity.
Execute encompasses excellence in delivery of FISBE across all functions and
business units. Our Strategic Pricing CoE, in collaboration with business
units, supported the delivery of 40 bps of pricing improvement, included in
gross margin. In clinical evidence, our ongoing InnovaMatrix(®) Randomised
Controlled Trials (RCTs) are on track to publish in 2026. We are also building
further Real-World Evidence (RWE) studies for both InnovaMatrix(®) and
ConvaNiox™. Market Access & Reimbursement CoE continued to support our
existing brands and new product pipeline.
Overall, there are notable synergies across Convatec categories. These include
polymer and biomaterial sciences, adhesive technologies, product and clinical
development, automated manufacturing, supply chain capabilities and marketing
& sales. Our resilient business model is highly scalable and is
well-positioned to deliver sustainable double-digit compound annual growth in
adjusted EPS(2) and free cash flow to equity(5). We are also on track to
deliver mid-20s% adjusted operating margin target by 2026 or 2027.
Our strong cash generation supports continued organic and inorganic investment
for growth, consistent with our capital allocation priorities (see page 8) and
broader strategy.
Update on reimbursement
Our FISBE strategy focuses on 1) superior patient outcomes and choice; 2)
value for money for payors and 3) outstanding results for health care
practitioners (HCPs). This enables the delivery of sustainable growth, despite
the dynamic reimbursement environment.
Our Innovate, Build and Execute investments support the delivery of these
three key outputs. This includes the significant progress we have made in
recent years in growing the new product pipeline, generating clinical evidence
and building market access capability.
In setting our medium-term guidance of 5-7% annual revenue growth, we assume a
certain level of reimbursement changes. We also consider the breadth of
revenues across categories, geographies and products, our innovation pipeline
and new product vitality index.
Ostomy & Catheters - proposed competitive bidding program
On 30 June 2025, Centers for Medicare & Medicaid Services (CMS) announced
a consultation on proposed new rules regarding the Durable Medical Equipment,
Prosthetics, Orthotics, and Supplies competitive bidding program (DMEPOS CBP).
Under the proposed rule, CMS seeks to include intermittent catheter and ostomy
products in the DMEPOS CBP. Any price impact from CBP would apply to revenues
from Medicare.
Medicare beneficiaries currently enjoy access to a wide range of personalised
catheter and ostomy products, plus significant support and advice. The
proposed rule changes could impact the choice and supply available to patients
and providers.
In FY24, Continence and Ostomy product sales via Medicare together represented
c.7% of Group revenue (6% in CC and 1% in OC). We estimate that Medicare
exposure in CC and OC via other distributors represented an additional c.2% of
Group revenue. If the proposed new rules are implemented, we estimate that the
potential headwind could be approximately 1-2% of FY27 Group revenue.
Should CMS proceed with rule changes, Convatec is well positioned to continue
to grow, based on excellent customer service and loyalty, attractive segment
positions and differentiated product portfolio. There are currently 3,000
distributors of Ostomy and Continence products. If this proposal is
implemented, it is likely there will be a greater impact on smaller players,
and we are well positioned to gain volume.
Proposed changes to biologics sector reimbursement
On 14 July 2025, CMS issued a draft payment proposal for skin substitutes and
the start of a sixty-day public comment period. Convatec supports CMS in
seeking to remove excess cost and promote responsible market practices.
However, the proposed reimbursement rate risks limiting patient choice and
product quality. We will engage fully in the public comment process which
closes on 12 September 2025.
While the outcome of this process remains uncertain, we continue to expect
InnovaMatrix(®) revenue of at least $75m in FY25. As previously reported, if
the proposal is implemented in its current form we estimate that the potential
YoY headwind to FY26 revenue could be approximately 1-2% of Group revenue.
InnovaMatrix(®) is an excellent and highly effective product, with
significant health benefits to patients and healthcare professionals, strong
user feedback and clinical evidence. We are continuing to develop sales across
a range of indications, both within and outside the United States, and our
Randomised Controlled Trials are on track to publish in 2026. InnovaMatrix(®)
is also highly competitive with low manufacturing costs, and we are well
positioned to take share as competitors may exit the market. We are confident
we can deliver long-term profitable growth.
Category review
Group revenue growth was broad-based across all categories, increasing by 6.0%
organic, 6.0% reported and 6.3% on a constant currency basis (net M&A
added c.30 bps). Organic revenue growth ex-Innovamatrix was 6.8%.
H1 25 H1 24 Reported growth / (decline) Foreign exchange impact Constant currency(2 )growth / (decline) Net M&A impact Organic(4 )growth
$m $m
Revenue by Category
AWC ex-InnovaMatrix 327.6 314.8 4.1% (0.4)% 4.5% 0.2% 4.3%
Ostomy Care 326.5 311.2 4.9% (0.4)% 5.3% 0.6% 4.7%
Continence Care 259.4 242.6 7.0% - 7.0% 0.3% 6.7%
Infusion Care 227.1 199.7 13.7% (0.4)% 14.1% - 14.1%
Group revenue excluding IMX 1,140.6 1,068.3* 6.8% (0.3%) 7.1% 0.3% 6.8%
InnovaMatrix revenue 39.3 45.2 (13.1%) - (13.1%) - (13.1%)
Group revenue 1,179.9 1,113.6* 6.0% (0.3)% 6.3% 0.3% 6.0%
(*) Includes $0.2m in H1 24 from exit of hospital care & industrial
sales relating solely to residual stock sales following exit of this business
Advanced Wound Care
Revenue of $367m increased by 1.9% on a reported basis, and 2.1% on an organic
basis. Excluding InnovaMatrix(®), and as shown in the table above, AWC
organic growth was 4.3% (FY24: 4.2%). InnovaMatrix(®) declined by 13% to
$39m, as expected given market uncertainty around the now-postponed Local
Coverage Determinations (LCDs; see below).
Growth was driven by good performance in North America and GEM. We saw a
growing contribution from ConvaFoam(TM) which is taking share and continued to
win over 50% of US clinical evaluations and is launching well in Europe.
Aquacel(TM) Ag+ Extra, our market-leading antimicrobial product, delivered
continued growth.
AWC key focus areas are:
• Building on strong positions and extending recent launches to new
markets:
• Continuing to grow our market-leading Hydrofiber(®) brand
Aquacel(TM) Ag+ Extra globally
• Ongoing launch and geographic expansion of ConvaFoam(TM) in the
US, Europe and GEM
• Progressing InnovaMatrix(®) RCTs, securing long-term
reimbursement, growing in other indications and launching outside the US
• Continuing to develop new products and the AWC pipeline
• Launching ConvaNiox(TM), our breakthrough nitric oxide dressing
in the UK, Spain and Italy in H2 25 (see below)
• ConvaFiber(TM), our new enhanced Hydrofiber dressing, launching
in 2026
• ConvaVac(TM), our single-use negative pressure wound therapy
product, launching in 2026
Update on InnovaMatrix(®)
InnovaMatrix(®) is the first-ever porcine placental-derived extra-cellular
matrix for treatment of chronic, surgical and trauma wounds. It is a highly
effective product with significant health benefits to patients and healthcare
professionals, strong user feedback and clinical evidence. We are on track to
publish RCTs in 2026 and are also continuing to develop sales across a range
of indications, both within and outside the United States.
As previously reported, the now-postponed Local Coverage Determinations for
Skin Substitutes and Tissue-Based Products for the treatment of Diabetic Foot
Ulcers (DFUs) and Venous Leg Ulcers (VLUs) created market uncertainty. This
resulted in H1 25 InnovaMatrix(®) revenues down 13% year-to-date to $39m,
representing c.3% of Group revenue. We continue to expect InnovaMatrix(®)
revenues of at least $75m in FY25 (FY24 $99m; see page 4 for discussion of the
14 July CMS announcement and our estimate of the potential impact in FY26).
Update on ConvaNiox(TM)
We were delighted to receive regulatory approval
(https://www.convatecgroup.com/media-articles/press-releases/2025/convatec-receives-regulatory-approval-for-convaniox/)
in the EU and UK in April 2025 for ConvaNiox(TM), our breakthrough technology
which aims to significantly improve outcomes for hard-to-heal wounds.
ConvaNiox(TM) is a first-in-class, multimodal wound dressing designed to
transform the treatment of hard-to-heal DFUs. It combines an advanced dressing
technology with the antimicrobial and antibiofilm power of nitric oxide.
ConvaNiox(TM) delivers a significantly improved healing environment (achieving
60% more DFUs healed and three times faster wound area reduction compared to
standard care in an RCT) while enhancing patients' quality of life.
We are on track to launch in selected markets during H2 25 and note the first
institutions
(https://www.linkedin.com/posts/convatec_weareconvatec-forevercaring-foreverconvatec-activity-7351542791388209152-QVBK/?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAASHc8BFGjG77Edypv_0hNgRFm9NNRkKRs)
in the UK and Spain have already started to apply this breakthrough
technology. Our initial market launch will focus on secondary care and
specialist clinics, supporting patients and healthcare professionals in
managing DFUs.
Ostomy Care
Revenue of $327m grew by 4.9% on a reported basis, by 5.3% in constant
currency and 4.7% on an organic basis.
Esteem Body(TM), our first new ostomy product launch in over a decade taking
Convatec into the fast-growing one-piece soft convex segment, continued to be
very successful with patients and clinicians. Growth was strong in Esenta™
accessory products. Good growth in the US was supported by our Home Services
Group (HSG) with a continued increase in patient starts. Growth in Europe was
steady, and Global Emerging Markets was strong.
OC key focus areas are:
• Continuing to progress our innovation pipeline:
• Expanding the launch of Esteem Body(TM) across focus markets
• Launching Flexi-Seal(TM) Air, an evolution of our market-leading
fecal management system in the US in H2 25
• Developing Natura(®) Body, our two-piece soft convex product
launching in 2027
• Further improving commercial execution across the continuum of care
(acute, post-acute and community):
• Driving US new patient starts through continued close
collaboration with HSG and strategic partners
• Enhancing patient engagement through me+ programme services
(https://www.convatec.com/en-gb/stoma-care/campaigns/me-programme/) in key
geographies. Increasing interactions with healthcare professionals through our
education programs in partnership with key stakeholders like the US Wound,
Ostomy and Continence Nurse society
Continence Care
Revenue of $259m increased by 7.0% in both reported and constant currency, and
6.7% on an organic basis.
Performance was driven by US volume growth as we continued to gain share,
while Europe and GEM grew strongly from a low base, adding over 1 percentage
point to Continence Care growth. This was further supported by faster growth
in Convatec-manufactured products, which again represented c.55% of revenues,
including strong growth in Cure(TM) Medical and GentleCath(TM) brands.
Our compact catheter GentleCath Air(TM) for Women continued to be
well-received by HCPs and customers.
Key CC focus areas are:
• Rolling out launches to new markets:
• Further extending the launch of GentleCath Air(TM) for Women
internationally
• Introducing Cure(TM) products in Europe and GEM
• Developing GentleCath Air(TM) Pocket and GentleCath Air Set™
in 2026/27
• Further improving commercial execution globally:
• Continuing to build and strengthen commercial teams in Europe
and GEM
Infusion Care
Revenue of $227m increased 13.7% on a reported basis, and by 14.1% in both
constant currency and organically. Growth was driven by further strong demand
for Convatec infusion sets in both diabetes and non-diabetes therapies.
In diabetes, we saw high single-digit revenue growth as durable insulin pump
penetration accelerated led by increasing adoption of automated insulin
delivery and continuing pump innovation. Diversification of our products and
customers progressed very well. This included YpsoMed's YpsoPump, Beta Bionics
iLet and Tandem Mobi, plus our Extended Wear set with Medtronic's 780G.
For non-diabetes therapies, Neria(TM) product range infusion sets achieved
high double-digit growth with non-diabetes therapies representing mid-teens of
Infusion Care revenue in H1 25. This was driven by the launch of AbbVie's new
Parkinson's medicine therapy VYALEV(TM), now approved in 35 countries
including the US. We also welcomed the approval from the US FDA
(https://www.convatecgroup.com/media-articles/press-releases/2025/convatec-welcomes-regulatory-approval-of-subcutaneous-apomorphine-infusion--for-advanced-parkinsons-disease-in-the-us/)
of apomorphine hydrochloride for subcutaneous infusion for the treatment of
advanced Parkinson's and look forward to supporting new partners with
Neria(TM) Guard infusion sets.
Key IC focus areas are:
• Supporting customer innovation and expansion in diabetes:
• Medtronic's 780G extended wear, Tandem Mobi, Beta Bionics iLet
and Ypsomed Ypsopump
• Increasing penetration of automated insulin delivery instead of
multiple daily injections
• Continuing to diversify outside diabetes
• Supporting AbbVie's Parkinson's launch globally and apomorphine
hydrochloride in the US
• Increasing penetration of subcutaneous infusion for other
therapies such as pain management
• Expanding operations:
• Increasing production capacity to meet accelerating demand
H1 financial performance
Group revenue for the period was $1,180m, up 6.0% on a reported basis and 6.3%
on a constant currency basis. Adjusting for the net impact of M&A, revenue
increased by 6.0% on an organic basis, and excluding InnovaMatrix(®), organic
revenue increased by 6.8%.
Adjusted gross profit rose 4.9% to $711m (H1 24: $678m) and adjusted gross
profit margin reduced by 60 bps to 60.3% (H1 24 60.9%). Reported gross profit
was $656m (H1 24: $623m). Improvements in operations productivity and price
added a combined 150 bps to gross margin but were offset by COGS inflation of
3% and sales mix, which together represented a headwind of 210 bps. We expect
inflation in the second half to be similar to H1, resulting in unchanged FY25
inflation expectations of c.3%.
Adjusted operating profit increased by 13% to $252m (H1 24: $223m), or up 14%
on a constant currency basis. Reported operating profit increased by 20% to
$179m (H1 24: $149m). We delivered another strong year of adjusted operating
margin(2) improvement, up c.130 bps to 21.3% (c.140 bps on a constant FX
basis). Adjusted operating expenses reduced as a percentage of revenue by 200
bps to 38.9% and included a 50 bps reduction in G&A to 7.0% of revenue. We
are on track to deliver FY25 guidance of adjusted operating margin of
22.0-22.5%, versus 17.7% in 2021.
Adjusted diluted EPS increased by 19% to 8.0 cents (H1 24: 6.8 cents), driven
by the 13% increase in adjusted operating profit, net finance costs down $8m
YoY to $32m and adjusted tax rate moderately higher YoY at 24.0%. The decrease
in finance expenses reflected lower average interest rates than in H1 24.
Reported diluted EPS increased by 34%.
Cash flow and leverage
Free cash flow to capital increased by $12m to $125m (H1 24: $113m), with a
12% increase in adjusted EBITDA partially offset by $80m working capital
outflows (H1 24: $75m). Our business normally experiences working capital
outflows in the first half which we expect largely to reverse in H2 25.
Capital expenditure was $69m (H1 24: $51m), in line with FY25 guidance as we
continued to add capacity, increase automation and invest in digital
technologies.
Looking ahead, working capital is expected to grow no faster than revenue
growth each year and, cumulatively, we expect >85% cash conversion from
FY23. Free cash flow to equity increased by $1m to $58m (H1 24: $57m).
Equity cash conversion was 35% (H1 24: 41%) and in line with prior years, we
expect higher H2 conversion.
Net debt increased to $1,165m (31 Dec 2024: $1,058m). A payment of $27m was
made in respect of earnouts associated with past acquisitions. We also paid
our final dividend payment of $101m, an increase of $9m YoY given the 3%
increase in dividend, and the removal of the scrip dividend option.
The Group ended the period with total borrowings, including IFRS 16 lease
liabilities, of $1,340m (31 Dec 2024: $1,202m). Offsetting cash of $96m (31
Dec 2024: $65m) and excluding lease liabilities, net debt was $1,165m (31 Dec
2024: $1,058m), equivalent to 1.9x adjusted EBITDA (H1 24: 2.3x adjusted
EBITDA; 31 Dec 2024: 1.8x adjusted EBITDA). Leverage is usually higher at 30
June than 31 December given the payout of dividend, employee bonuses and
recent timing of earnouts.
Dividend
The Board is declaring a 3.0% increase in the interim dividend to 1.877 cents
per share (H1 24: 1.822 cents) reflecting the target payout ratio of 35-45%
for the full year.
Confident in FY25 financial guidance
The Group performed strongly in H1 25 and we continue to expect Group organic
revenue growth excluding InnovaMatrix(®) of 5.5-7.0%. InnovaMatrix(®) FY25
revenue guidance of at least $75m is also unchanged. We continue to expect
adjusted operating margin for FY25 of between 22.0-22.5%, despite an adverse
FX impact YoY of c.20 bps and c.30 bps (c.$5-10m) of anticipated incremental
tariff costs.
If current spot rates were to hold for the remainder of FY25, the estimated
tailwind to FY25 revenue growth would be c.100 bps, while the adjusted
operating margin headwind would be c.20 bps.
We now expect FY25 net finance costs will be $65-70m (previously $70-75m;
2024: $78m). Adjusted book tax rate is expected to be c.24%, with the cash tax
rate again materially lower. Reflecting ongoing investments in innovation and
efficiency programmes, we expect capex of $130-150m, opex R&D spend of
c.$100-110m and cash costs of adjusting items of c.$20m.
We remain confident in delivering our medium-term financial targets. These are
5-7% organic growth p.a., adjusted operating margin of mid-20s by 2026 or 2027
and delivering double-digit compound annual growth in adjusted EPS and free
cash flow to equity.
Unchanged capital allocation priorities
Our target net debt to adjusted EBITDA leverage remains 2.0x and capital
allocation priorities are unchanged. These are: 1) fund organic investment to
drive future revenue growth and innovation; 2) pay an annual dividend
consistent with 35-45% payout ratio; 3) conduct focused M&A to strengthen
competitive position, and 4) any surplus capital would be available for return
to shareholders.
Principal risks
The Board reviews and agrees our principal risks on a bi‐annual basis,
taking account of our risk appetite together with our evolving strategy,
current business environment and any emerging risks that could impact the
business. Our system of risk management and internal control continues to
develop and mature, and updates to the principal risks and mitigation plans
are made as required in response to changes in our risk landscape. Details of
our enterprise risk management framework are set out in the Group's 2024
Annual Report and Accounts
(https://marketingworld.convatec.com/MarketingZone/MZDirect/Download/56e5cef7-a749-40ef-b9bf-0c4cb073f2ee)
.
The Board has reviewed the principal risks as at 30 June 2025, taking into
consideration the risks that existed during the first six months of 2025 and
those that it believes will have an impact on the business over the remaining
six months of the current financial year. The principal risks have been
assessed against the context of the global economic pressures that are
impacting all businesses at present and the wider uncertain geopolitical
climate. The overall profile of our risks remains consistent with the position
presented in the Group's 2024 Annual Report and Accounts. Our principal risks
are set out below and listed in order of their potential impact on our ability
to successfully deliver on our strategy:
1. Operational Resilience & Quality; 2. Innovation & Regulatory;
2. Customer & Markets; 6. Legal, Compliance & Privacy;
3. Cyber & Information Security; 7. People; and,
4. Political & Economic Environment; 8. Environment & Communities
We continue to monitor and manage all principal risks to ensure they are
appropriately mitigated, and in 2025, we have noted the following areas of
focus impacting our principal risks:
• Customer & Markets risk - global macroeconomic factors
continue to impose financial spending constraints impacting healthcare pricing
and reimbursement models; and
• Political & Economic Environment risk - the impact of global
tariff changes, which do not at present significantly impact our 2025 Group
forecast. We are working through mitigating options to minimise the effect(s)
where possible
The Board assesses the overall risk profile of the Group to ensure it is
within our risk appetite. In making this assessment the Board considered the
broader risk landscape (including the economic challenges as a result of
events over recent years impacting specifically inflation and interest rates,
ongoing supply chain challenges and the continuing impacts of the wars in
Ukraine and the Middle East) on the business environment and any continued or
additional impact on the Group's business and principal risks, coupled with
the controls and mitigations in place to address these challenges. In the
main, as our processes and risk mitigations develop and mature, we have
continued to manage the challenges facing the wider business landscape and
build further resilience into operations. We work to ensure that each
principal risk remains within our risk appetite.
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).
Financial Review for six months ended 30 June 2025
Group financial performance
Six months ended 30 June
Reported Reported Adjusted(1) Adjusted(1) Adjusted
@ CC(2)
2025 2024 2025 2024 2025 Change
$m $m $m $m $m %
Revenue 1,179.9 1,113.4 1,179.9 1,113.4 1,183.4 6.3%
Gross profit 656.4 623.1 711.1 677.9
Operating profit 179.2 149.2 251.8 222.8 253.8 13.9%
Operating margin 15.2% 13.4% 21.3% 20.0% 21.4%
Profit before income taxes 137.4 104.0 216.6 182.3
Net profit for the period 104.8 78.6 164.6 139.1
Basic earnings per share (cents) 5.1 3.8 8.1 6.8
Diluted earnings per share (cents) 5.1 3.8 8.0 6.8
Dividend per share (cents) 1.877 1.822
1. These non-IFRS financial measures are explained and
reconciled to the most directly comparable financial measures prepared in
accordance with IFRS in the Non-IFRS financial information section on pages 15
to 20.
2. Adjusted 2025 at CC (constant currency) is calculated as 2025
adjusted results translated at 2024 actual FX rates.
Reported and Adjusted results
The Group's financial performance measured in accordance with IFRS (IAS 34
Interim Financial Reporting as adopted by the United Kingdom) is set out in
the Condensed Consolidated Interim Financial Statements and Notes and is
referred to in this review as "reported".
The commentary in this Financial review includes discussion of the Group's
reported results and alternative performance measures ('APMs') (or adjusted
results). Management and the Board use APMs as meaningful supplemental
measures in monitoring the underlying performance of the business. These
measures are disclosed in accordance with the ESMA guidelines and are
explained and reconciled to the most directly comparable reported
measure prepared in accordance with IFRS in the Non-IFRS financial
information section on pages 15 to 20.
Revenue and revenue growth on constant currency and organic bases
are non-IFRS financial measures and should not be viewed as a replacement of
IFRS reported revenue and revenue growth. Percentage movements throughout
this report are calculated on actual unrounded numbers.
Revenue
Group revenue for the six months ended 30 June 2025 of $1,179.9 million (H1
2024: $1,113.4 million) increased 6.0% year-on-year on a reported basis and
6.3% on a constant currency basis.
Adjusting for foreign exchange and acquisition and divestiture-related
activities, Group revenue grew by 6.0% on an organic basis. Excluding
InnovaMatrix(®), organic revenue growth was 6.8% and driven by broad-based
revenue growth across all categories.
For more details about the category revenue performance, refer to the
Operating Review.
Net profit
Adjusted gross profit increased by 4.9% to $711.1 million (H1 2024: $677.9
million) whilst the adjusted gross margin decreased by 60bps, from 60.9% to
60.3%. Pricing and productivity benefits of 150bps were more than offset by
the Group's revenue mix of 100bps and inflationary pressures of 110bps. On a
reported basis, gross profit increased by 5.3% to $656.4 million (H1 2024:
$623.1 million), with a reported gross margin of 55.6% (H1 2024: 56.0%).
Adjusted operating expenses saw a net increase of $4.2 million to $459.3
million, primarily due to an increase in adjusted selling and distribution
expenses of $4.8 million, driven by continued investment in our sales force.
Within adjusted operating expenses, adjusted R&D of $49.7 million (H1
2024: $50.2 million) remained at a steady level year-on-year and, combined
with an increase in R&D capital expenditure, continued to reflect the
ongoing investment in our future pipeline of new products. On a reported
basis, R&D spend was $53.5 million (H1 2024: $54.0 million).
Adjusted G&A was flat year-on-year at $82.9 million (H1 2024: $83.0
million), reducing as a percentage of revenue to 7.0% (H1 2024: 7.5%) and
reflecting the Group's continued focus on simplification and productivity and
expansion of the scope of our Convatec Business Services (CBS) function.
Reported G&A was $98.3 million (H1 2024: $97.8 million).
A reconciliation between reported and adjusted operating expenses is provided
in the Non-IFRS financial information section on pages 15 to 20.
Adjusted operating profit increased by 13.1% to $251.8 million (H1 2024:
$222.8 million), representing an adjusted operating margin of 21.3% (H1 2024:
20.0%). This was equivalent to 21.4% on a constant currency basis, an increase
of c. 140bps from last year. Reported operating profit increased by 20.1% to
$179.2 million (H1 2024: $149.2 million).
Adjusted net profit increased by 18.4% to $164.6 million (H1 2024: $139.1
million), with the increase in operating profit and lower finance expenses
being partially offset by a higher adjusted tax charge (as explained below).
Reported net profit increased by 33.3% to $104.8 million (H1 2024: $78.6
million). Adjusting items are explained on page 11.
Taxation
Six months ended 30 June
2025 2024
$m Effective tax rate $m Effective tax rate
Reported income tax (expense) (32.6) 23.7% (25.4) 24.4%
Tax effect of adjustments (19.4) (17.8)
Adjusted income tax (expense) (52.0) 24.0% (43.2) 23.7%
The Group's reported income tax expense for the six months ended 30 June 2025
was $32.6 million (H1 2024: $25.4 million). The decrease in the reported
effective tax rate was mainly driven by the reduction in non-deductible
acquisition costs.
The adjusted effective rate of 24.0% for the six months ended 30 June 2025 (H1
2024: 23.7%) was after reflecting the tax impact of items treated as adjusting
items (further details can be found in the Reconciliation of reported earnings
to adjusted earnings table in the Non-IFRS financial information section on
page 17). The increase in the adjusted effective tax rate was mainly driven by
an increase in the provision for uncertain tax positions.
Earnings per share (EPS)
Adjusted basic EPS for the six months ended 30 June 2025 increased by 18.7% to
8.1 cents (H1 2024: 6.8 cents) and adjusted diluted EPS increased by 18.7% to
8.0 cents (H1 2024: 6.8 cents).
Reported basic EPS was 5.1 cents (H1 2024: 3.8 cents), reflecting the reported
net profit divided by the basic weighted average number of ordinary shares of
2,044,204,772 (H1 2024: 2,047,599,499).
Alternative Performance Measures (APMs)
Management and the Board make adjustments to the reported figures, where
appropriate, to produce more meaningful measures to monitor the underlying
performance of the business - Alternative performance measures (APMs). The
Group's APM policy can be found in the Non-IFRS financial information section
on pages 15 to 16 and the following adjustments were made to derive adjusted
operating profit and adjusted net profit.
Six months ended 30 June
Operating profit Fair value movement of contingent consideration Non-operating expense Income tax expense
2025 2024 2025 2024 2025 2024 2025 2024
$m $m $m $m $m $m $m $m
Reported 179.2 149.2 (4.8) (4.7) (4.8) (0.3) (32.6) (25.4)
Amortisation of acquired intangibles 67.2 67.3 - - - - (16.3) (16.6)
Acquisitions and divestitures 1.5 0.3 4.8 4.7 1.8 - (2.0) 0.2
Termination benefits and related costs 0.9 1.4 - - - - (0.2) (0.3)
Other adjusting items 3.0 4.6 - - - - (0.9) (1.1)
Adjusted 251.8 222.8 - - (3.0) (0.3) (52.0) (43.2)
Adjustments made to derive adjusted operating profit for the six months ended
30 June 2025 included the amortisation of acquired intangibles of $67.2
million (H1 2024: $67.3 million), of which $47.3 million (H1 2024: $46.9
million) resulted from intangible assets arising from the spin-out from
Bristol-Myers Squibb in 2008 and will be fully amortised by December 2026.
Acquisition and divestiture-related costs of $1.5 million within operating
profit and $1.8 million within non-operating expenses consisted of costs in
respect of certain prior acquisitions and the hospital care exit.
Terminations costs of $0.9 million were in respect of one-off, fundamental
transformation projects in line with our simplification and productivity
initiatives. Other adjusting items have reduced by $1.6 million to $3.0
million and largely consisted of the recognition of a liability in respect of
a historic legal claim.
Of the total of $72.6 million of adjusting items recognised within operating
profit, $2.2 million was cash impacting in H1 2025. There was also a cash
outflow of $5.5 million in respect of adjusting items recorded as accruals in
the prior year. For further information on Non-IFRS financial information, see
pages 15 to 20.
The Board, through the Audit and Risk Committee, annually reviews the Group's
APM policy to ensure that it remains appropriate, aligns with the regulatory
guidance and reflects the way in which the performance of the Group is
managed.
Dividends
Dividends are distributed based on the realised distributable reserves of the
Company, which are primarily derived from dividends received from subsidiary
companies and are not based directly on the Group's consolidated retained
earnings. The realised distributable reserves of the Company at 30 June 2025
were $1,472.5 million (31 December 2024: $1,474.7 million).
The Board has decided to increase the interim 2025 dividend by 3.0% to 1.877
cents per share. Our stated policy is a pay-out ratio of 35% to 45% of
adjusted net profit but this is interpreted flexibly over time to reflect the
underlying performance of the business. The decision to increase the dividend
reflects the good progress on delivering sustainable and profitable growth and
the Board's confidence in the future prospects of the Group.
Cash Flow and Net Debt
Six months ended 30 June
Adjusted Adjusted
2025 2024
$m $m
Adjusted EBITDA(1,7) 306.6 274.9
Working capital movement(1,2,7) (80.1) (75.1)
Adjusting items(3,7) (7.7) (11.3)
Capital expenditure (68.9) (50.6)
Operating cash flow(1,8) 149.9 137.9
Tax paid (24.8) (24.4)
Free cash flow to capital(1,8) 125.1 113.5
Net interest paid (37.1) (42.5)
Payment of lease liabilities (12.2) (12.1)
Realised loss on settlement of FX derivatives relating to financing (17.6) -
Other(4) - (1.6)
Free cash flow to equity(1,9) 58.2 57.3
Dividends(5) (100.8) (91.5)
Acquisitions(6) (26.2) (70.9)
Share purchase (22.4) -
Non-cash movements(4) (15.8) -
Movement in net debt (107.0) (105.1)
Net debt(1) at 1 January (excluding lease liabilities) (1,058.1) (1,129.3)
Net debt(1) at 30 June (excluding lease liabilities) (1,165.1) (1,234.4)
1. These non-IFRS financial measures are explained and
reconciled to the most directly comparable financial measure prepared in
accordance with IFRS in the Non-IFRS financial information section.
2. The comparatives have been re-presented as outlined in Note 1
of the Condensed Consolidated Financial Statements.
3. Details of adjusting items are provided in the adjusting
items cash movement table in the Non-IFRS financial information section. Of
the total cash outflow of $7.7 million during the year, $5.5 million related
to accruals recorded in the prior year.
4. In H1 2025, non-cash movements of $15.8 million have been
presented below free cash flow to equity and consisted of net FX loss on cash
and borrowings of $14.2 million and amortisation of deferred financing fees of
$1.6 million. The prior year comparatives have not been restated on the basis
they are not material.
5. Dividend cash payments of $100.8 million were made to
shareholders in the period in respect of the 2024 final dividend.
6. A payment of $26.9 million was made in respect of earnouts
associated with past acquisitions. This was offset by an inflow of $0.7
million following finalisation of the working capital adjustment in respect of
the 2024 acquisition of Livramedom.
7. Excluding the impact of adjusting items of $7.7 million (H1
2024: $11.3 million) on adjusted EBITDA and adjusted working capital
movements, EBITDA was $299.4 million (H1 2024: $268.6 million) and the
reported working capital movement was a $82.7 million outflow (H1 2024: $81.6
million).
8. Realised losses on settlement of certain derivatives have
been disclosed separately in the Condensed Consolidated Statement of Cash
Flows within financing activities. Accordingly, they have moved out of
operating cash flow and free cash flow to capital but are still included in
the calculation of free cash flow to equity. The Directors consider that this
change results in improved definitions and calculations of operating cash flow
and free cash flow to capital. The comparatives have not been restated on the
basis that the balances are not material.
9. The calculation of the cash flow measure 'Free cash flow to
equity' has been redefined to exclude non-cash items such as net foreign
exchange gains or losses on cash and borrowings and the amortisation of
financing fees. The Directors consider that this change results in improved
definition and calculation of free cash flow to equity. See footnote 4 above
of impact on H1 2024 free cash flow to equity.
Adjusted EBITDA
Adjusted EBITDA increased by $31.7 million to $306.6 million (H1 2024: $274.9
million), driven primarily from adjusting operating profit increasing by $29.0
million (as explained in the adjusted net profit commentary section).
A reconciliation of adjusted EBITDA to the closest IFRS measure is provided in
the Non-IFRS financial information section on pages 15 to 20.
Free cash flow to capital
Free cash flow to capital increased by $11.6 million to $125.1 million (H1
2024: $113.5 million).
Adjusted EBITDA increased by $31.7 million, which was partially offset by an
increase in capital expenditure of $18.3 million. The Group invested $68.9
million (H1 2024: $50.6 million) in capital expenditure to develop and launch
new products, improve productivity and upgrade technology.
The adjusted working capital movement of $80.1 million remained fairly
consistent year-on-year.
Operating cash conversion was 59.5% (H1 2024: 61.9%).
Free cash flow to equity
Free cash flow to equity increased by $0.9 million to $58.2 million (H1 2024:
$57.3 million). This was largely driven by an increase in free cash flow to
capital of $11.6 million as explained above, and lower finance cost payments
of $5.4 million as a result of lower average debt and lower average interest
rates. These were partially offset by realised losses on foreign exchange
derivatives of $17.6 million.
Equity cash conversion was 35.4% (H1 2024: 41.2%).
Borrowings and net debt
30 June 2025 31 December 2024
$m $m
Borrowings(1) 1,260.8 1,122.8
Lease liabilities 79.1 78.8
Total borrowings including lease liabilities 1,339.9 1,201.6
Cash and cash equivalents (95.7) (64.7)
Total borrowings including lease liabilities, net of cash 1,244.2 1,136.9
Net debt (excluding lease liabilities) 1,165.1 1,058.1
Net debt (excluding lease liabilities)/adjusted EBITDA(2) 1.9x 1.8x
1. Borrowings are stated net of unamortised financing fees of
$9.1 million (31 December 2024: $10.7 million).
2. Adjusted EBITDA for the twelve months to 30 June 2025 has
been used in this calculation.
As at 30 June 2025, the Group's cash and cash equivalents were $95.7 million
(31 December 2024: $64.7 million). The Group's banking facilities comprise of
a term loan of $250.0 million and a multicurrency revolving credit facility of
$950.0 million, maturing in 2027 and 2028 respectively. The Group's $500.0
million senior unsecured notes, issued in October 2021, remain in place with
maturity in October 2029. As at 30 June 2025, $430.1 million of the
multicurrency revolving credit facility remained undrawn (31 December 2024:
$566.5 million).
The Group ended the period with total borrowings, including IFRS 16 lease
liabilities, of $1,339.9 million (31 December 2024: $1,201.6 million).
Offsetting cash of $95.7 million (31 December 2024: $64.7 million) and
excluding lease liabilities, net debt was $1,165.1 million (31 December 2024:
$1,058.1 million), equivalent to 1.9x adjusted EBITDA (2024: 1.8x adjusted
EBITDA). We continue to target leverage of 2x over time but are comfortable to
temporarily go above or below this, dependent on M&A and other investment
opportunities.
Covenants
At 30 June 2025, the Group was in compliance with all financial and
non-financial covenants associated with the Group's outstanding debt.
Non-IFRS financial information
Non-IFRS financial information or alternative performance measures (APMs) are
those measures used by the Board and management on a day-to-day basis in their
assessment of profit and performance, and comparison between periods. The
adjustments applied to IFRS measures reflect the effect of certain cash and
non-cash items that the Board believes distort the understanding of the
quality of earnings and cashflows as, by their size or nature, they are not
considered part of the core operations of the business. Adjusted measures also
form the basis of performance measures for remuneration, e.g. adjusted
operating profit.
It should be noted that the Group's APMs may not be comparable to other
similarly titled measures used by other companies and should not be considered
in isolation or as a substitute for the equivalent measures calculated and
presented in accordance with IFRS (our reported measures).
In determining whether an item should be presented as an allowable adjustment
to IFRS measures, the Group considers items which are significant either
because of their size or their nature and arise from events that are not
considered part of the core operations of the business. These tend to be
one-off events but may still cross more than one accounting period. Recurring
items may be considered, particularly in respect of the amortisation of
acquisition-related intangible assets. If an item meets at least one of these
criteria, the Board, through the Audit and Risk Committee, then exercises
judgement as to whether the item should be classified as an allowable
adjustment to IFRS performance measures.
The tax effect of the adjustments is reflected in the adjusted tax expense to
remove the tax impact from adjusted net profit and adjusted earnings per
share.
Amortisation of acquisition-related intangible assets
The Group's strategy is to grow both organically and through acquisition, with
acquisitions being targeted to strengthen our position in key geographies
and/or business categories or which provide access to new technology. The
nature of the businesses acquired includes the acquisition of significant
intangible assets, which are required to be amortised. The Board and
management regard the amortisation as a distortion to the quality of earnings
and it has no cash implications in the year. The amortisation also distorts
comparability with peer groups where such assets may have been internally
generated and, therefore, not reflected on their balance sheet. Amortisation
of acquisition-related intangible assets is, by its nature, a recurring
adjustment.
Acquisition-related activities
Costs directly related to potential and actual strategic transactions which
have been executed, aborted or are in-flight are deemed adjusting items.
Acquisition-related costs relate to deal costs, integration costs and earn-out
adjustments, including the discounting impact which are incurred directly as a
result of the Group undertaking or pursuing an acquisition. Deal costs are
wholly attributable to the deal, including legal fees, due diligence fees,
bankers' fees/commissions and other direct costs incurred as a result of the
actual or potential transaction. Integration costs are wholly attributable to
the integration of the target and based on integration plans presented at the
point of acquisition, including the cost of retention of key people where this
is in excess of normal compensation, redundancy of target staff and early
lease termination payments.
Adjusted measures in relation to acquisitions also include aborted deal costs.
Divestiture-related activities
Divestiture-related activities comprise the gains or losses resulting from
disposal or divestment of a business as a result of a sale, major business
change or restructuring programme. These include write-down of non-current
assets, provisions to recognise inventories at realisable value, provisions
for costs of exiting contracts and associated legal fees, and any other
directly attributable costs. Any income from the ultimate disposal of a
business or subsidiary is included in the gain or loss.
Adjusted measures in relation to divestitures also include aborted deal costs.
Impairment of assets
Impairments, write-offs and gains and losses from defined programmes and where
the Group considers the circumstances of such event are not reflective of
normal business trading performance or when transactions relate to
acquisition-related intangible assets where the amortisation is already
excluded from the calculation of adjusted measures.
Termination benefits and related costs
Termination benefits and other related costs arise from material, one-time
Group-wide initiatives to reduce the ongoing cost base and improve efficiency
in the business, including divestitures from non-strategic activities. The
Board considers each project individually to determine whether its size and
nature warrants separate disclosure. Qualifying items are limited to
termination benefits (including retention) without condition of continuing
employment in respect of major Group-wide change programmes. Where discrete
qualifying items are identified these costs are highlighted and excluded from
the calculation of adjusted measures. Due to their nature, these adjusted
costs may span more than one year.
Other adjusting items
Other adjusting items include items that do not fall within the above
categories but qualify as an APM in line with the Group's policy. Whilst
non-exhaustive, examples of other adjusting items could include significant
historic legal claims outside the normal course of business or one-time
initiatives which are part of the Group's strategy to improve productivity in
the business and optimise cash flows. The Board considers each item
individually to determine whether its size and nature warrants separate
disclosure. Qualifying costs are limited to directly attributable costs of the
initiatives and any realignment costs. Due to the nature of the initiatives,
these adjusted costs may span more than one year.
Revenue measures
Revenue growth on a constant currency basis represents reported revenue, as
determined under IFRS, and applying the applicable prior period average
exchange rates to the Group's actual performance in the respective period.
Organic revenue growth is calculated by adjusting this to exclude the impact
of acquisitions and divestitures.
Cash flow measures
Operating cash flow is the net cash generated from operations, as determined
under IFRS, less capital expenditure. Free cash flow to capital is defined as
operating cash flow less tax paid. Free cash flow to equity reflects how
effectively we are converting the profit we generate into cash (after
accounting for working capital, capital investments, adjusting items, realised
gains or losses on foreign exchange derivatives, tax and interest). Refer to
page 19 for details on how these measures are calculated.
Net debt and leverage ratio are two other measures used and these are
explained on page 20.
Reconciliation of reported earnings to adjusted earnings for the six months
ended 30 June 2025 and 2024
Revenue Gross profit Operating costs Operating profit Finance expense, net Fair value movement of contingent consideration Non-operating expense, net PBT Income tax Net profit
Six months ended 30 June 2025 $m $m $m $m $m $m $m $m $m $m
As reported 1,179.9 656.4 (477.2) 179.2 (32.2) (4.8) (4.8) 137.4 (32.6) 104.8
Amortisation of acquired intangibles - 54.0 13.2 67.2 - - - 67.2 (16.3) 50.9
Acquisition-related costs - - 1.3 1.3 - 4.8 - 6.1 (1.5) 4.6
Divestiture-related costs - - 0.2 0.2 - - 1.8 2.0 (0.5) 1.5
Termination benefits - - 0.9 0.9 - - - 0.9 (0.2) 0.7
and related costs
Other adjusting items - 0.7 2.3 3.0 - - - 3.0 (0.9) 2.1
Total adjustments including tax effect - 54.7 17.9 72.6 - 4.8 1.8 79.2 (19.4) 59.8
Adjusted 1,179.9 711.1 (459.3) 251.8 (32.2) - (3.0) 216.6 (52.0) 164.6
Amortisation 11.3
Impairment/write-off of assets 0.8
Depreciation 32.2
Share-based payments 10.5
Adjusted EBITDA 306.6
Revenue Gross profit Operating costs Operating profit Finance expense, net Fair value movement of contingent consideration Non-operating expense, net PBT Income tax Net profit
Six months ended 30 June 2024 $m $m $m $m $m $m $m $m $m $m
As reported 1,113.4 623.1 (473.9) 149.2 (40.2) (4.7) (0.3) 104.0 (25.4) 78.6
Amortisation of acquired intangibles - 53.7 13.6 67.3 - - - 67.3 (16.6) 50.7
Acquisition-related costs - - 0.9 0.9 - 4.7 - 5.6 - 5.6
Divestiture-related costs - (0.6) (0.6) - - - (0.6) 0.2 (0.4)
Termination benefits and - - 1.4 1.4 - - - 1.4 (0.3) 1.1
other related costs
Other adjusting items - 1.1 3.5 4.6 4.6 (1.1) 3.5
Total adjustments including tax effect - 54.8 18.8 73.6 - 4.7 - 78.3 (17.8) 60.5
Adjusted 1,113.4 677.9 (455.1) 222.8 (40.2) - (0.3) 182.3 (43.2) 139.1
Amortisation 11.0
Impairment/write-off of assets 0.4
Depreciation 31.4
Share-based payments 9.3
Adjusted EBITDA 274.9
Adjusted operating margin of 21.3% (H1 2024: 20.0%) is calculated as adjusted
operating profit of $251.8 million (H1 2024: $222.8 million) divided by
revenue of $1,179.9 million (H1 2024: $1,113.4 million). A reconciliation of
adjusted operating profit to its closest IFRS measure is shown in the tables
above.
Adjusted operating profit at constant currency, determined by applying the
applicable prior period average exchange rates to the adjusted operating
profit, was $253.8 million, with adjusted operating margin growth of 13.9% on
a constant currency basis.
The adjusted operating margin was 21.4% on a constant currency basis,
calculated as the adjusted operating profit of $253.8 million on a constant
currency basis divided by revenue of $1,183.4 million on a constant currency
basis.
Reconciliation of operating costs to adjusted operating costs for the six
months ended 30 June 2025 and 2024
Six months ended 30 June
2025 2024
S&D G&A R&D Other operating income Operating costs S&D G&A R&D Operating costs
$m $m $m $m $m $m $m $m $m
As reported (327.2) (98.3) (53.5) 1.8 (477.2) (322.1) (97.8) (54.0) (473.9)
Amortisation of acquired intangibles 0.3 9.1 3.8 - 13.2 0.3 9.5 3.8 13.6
Acquisition-related costs - 1.3 - - 1.3 - 0.9 - 0.9
Divestiture-related income 0.2 - - - 0.2 (0.6) - - (0.6)
Termination benefits and related costs - 0.9 - - 0.9 0.2 1.2 - 1.4
Other adjusting items - 4.1 - (1.8) 2.3 0.3 3.2 - 3.5
Adjusted (326.7) (82.9) (49.7) - (459.3) (321.9) (83.0) (50.2) (455.1)
Reconciliation of basic and diluted earnings per share to adjusted earnings
per share for the six months ended 30 June 2025 and 2024
Six months ended 30 June
2025 Adjusted 2025 2024 Adjusted 2024
$m $m $m $m
Net profit for the period attributable to the shareholders of the Group 104.8 164.6 78.6 139.1
Number Number
Basic weighted average ordinary shares in issue 2,044,204,772 2,047,599,499
Diluted weighted average ordinary shares in issue 2,052,101,321 2,055,953,301
cents per share cents per share cents per share cents per share
Basic earnings per share 5.1 8.1 3.8 6.8
Diluted earnings per share 5.1 8.0 3.8 6.8
Adjusted diluted EPS has increased by 18.7% and is calculated as adjusted
diluted EPS for the current period less adjusted diluted EPS for the prior
year, divided by the prior year adjusted diluted EPS. This is calculated on
actual unrounded numbers.
Cash flow conversion
Six months ended 30 June
2025 2024
$m $m
Operating cash conversion(1) 59.5% 61.9%
Equity cash conversion(1) 35.4% 41.2%
1. Operating cash conversion is calculated as
Operating cash flow/Adjusted operating profit. Equity cash conversion is
calculated as Free cash flow to equity/Adjusted net profit.
Reconciliation of Operating cash flow, free cash flow to capital and free cash
flow to equity
Six months ended 30 June
2025 2024
$m $m
Net cash generated from operations 218.8 188.5
Less: Acquisitions of property, plant and equipment and intangible assets (68.9) (50.6)
Operating cash flow(2) 149.9 137.9
Tax paid (24.8) (24.4)
Free cash flow to capital(2) 125.1 113.5
Net interest paid (37.1) (42.5)
Payment of lease liabilities (12.2) (12.1)
Proceeds on sale of property, plant and equipment - 0.3
Financing fee amortisation(3) - (1.6)
Foreign exchange (loss) on cash(3) - (2.8)
Foreign exchange gain on borrowings(3) - 2.5
Realised loss on settlement of FX derivatives relating to financing(2) (17.6) -
Free cash flow to equity(3) 58.2 57.3
2. Realised losses on settlement of certain derivatives have
been disclosed separately in the Condensed Consolidated Statement of Cash
Flows within financing activities. Accordingly, they have moved out of
operating cash flow and free cash flow to capital but are still included in
the calculation of free cash flow to equity. The Directors consider that this
change results in improved definitions and calculations of operating cash flow
and free cash flow to capital. The comparatives have not been restated on the
basis that the balances are not material.
3. The calculation of the cash flow measure 'Free cash flow to
equity' has been redefined to exclude non-cash items such as net foreign
exchange gains or losses on cash and borrowings and the amortisation of
financing fees. The Directors consider that this change results in improved
definition and calculation of free cash flow to equity. The comparatives have
not been restated on the basis that the balances are not material.
Free cash flow to equity has increased by 1.6% to $58.2 million (H1 2024:
$57.3 million). The increase is calculated as the movement in free cash flow
to equity year-on-year divided by the free cash flow to equity in the prior
year. A reconciliation of free cash flow to equity to its closest IFRS measure
is shown in the table above.
Reconciliation of reported and adjusted working capital movement
Six months ended 30 June
2025 2024
$m $m
Reported working capital movement(4) (82.7) (81.6)
(Decrease)/increase in respect of acquisitions and divestitures (0.2) 1.1
Increase in termination benefits 2.8 4.4
(Decrease) in respect of other adjusting items (2.1) (0.5)
Realised gain on settlement of FX derivatives relating to working capital(5) 2.1 1.5
Adjusted working capital movement (80.1) (75.1)
4. The comparatives have been re-presented as outlined in Note 1
of the Condensed Consolidated Financial Statements.
5. Realised gains and losses arising from the settlement of FX
derivatives held to manage foreign exchange risk in our working capital have
been included in this reconciliation as management believe this provides a
more accurate view of the underlying movement in working capital.
Cash outflows from adjusting items
Six months ended 30 June
2025 2024
$m $m
Acquisition and divestitures adjustments (1.3) (1.4)
Termination benefits and related costs adjustments (3.8) (5.8)
Other adjusting items (2.6) (4.1)
Total adjusting items (7.7) (11.3)
Net debt
Monitoring net debt is important to the Group as it is an indicator of the
Group's financial health and its available liquidity. It is an important
decision-making tool for investment decisions and strategic planning.
Net debt is calculated as borrowings less cash and excluding lease
liabilities.
30 June 2025 31 December 2024
$m $m
Senior notes 495.7 495.1
Credit facilities 765.1 627.7
Lease liabilities 79.1 78.8
Total borrowings including lease liabilities 1,339.9 1,201.6
Less: cash and cash equivalents (95.7) (64.7)
Less: lease liabilities (79.1) (78.8)
Net debt excluding leases 1,165.1 1,058.1
Leverage
Leverage is an important performance measurement metric for the Group as it is
an indicator of financial risk, credit worthiness and operational flexibility.
It is also an important consideration in strategic decision-making.
This is calculated as net debt excluding leases divided by adjusted EBITDA.
30 June 2025 31 December 2024
$m $m
Net debt excluding leases(1) 1,165.1 1,058.1
Adjusted EBITDA(2) 622.2 590.5
Leverage 1.9x 1.8x
1. Net debt excluding leases is defined and reconciled to the
closest IFRS measure in the Net debt table above.
2. Adjusted EBITDA for the twelve months to 30 June 2025 has
been used in this calculation.
INDEPENDENT REVIEW REPORT TO CONVATEC GROUP PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2025 which comprises the Condensed Consolidated Income Statement, the
Condensed Consolidated Statement of Comprehensive Income, the Condensed
Consolidated Statement of Financial Position, the Condensed Consolidated
Statement of Changes in Equity, the Condensed Consolidated Statement of Cash
Flows and related notes 1 to 13.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025, is not prepared, in
all material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the Directors have
inappropriately adopted the going concern basis of accounting or that the
Directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the Directors
The Directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the Directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
28 July 2025
Condensed Consolidated Interim Financial Statements
Condensed Consolidated Income Statement
Six months ended 30 June
2025 2024
Notes $m $m
(unaudited) (unaudited)
Revenue 2 1,179.9 1,113.4
Cost of sales (523.5) (490.3)
Gross profit 656.4 623.1
Selling and distribution expenses (327.2) (322.1)
General and administrative expenses (98.3) (97.8)
Research and development expenses (53.5) (54.0)
Other operating income 1.8 -
Operating profit 179.2 149.2
Finance income 3 1.4 2.6
Finance expense 3 (33.6) (42.8)
Fair value movement of contingent consideration 7 (4.8) (4.7)
Non-operating expense, net (4.8) (0.3)
Profit before income taxes 137.4 104.0
Income tax expense 4 (32.6) (25.4)
Net profit 104.8 78.6
Earnings per share
Basic earnings per share (cents) 6 5.1¢ 3.8¢
Diluted earnings per share (cents) 6 5.1¢ 3.8¢
All amounts are attributable to shareholders of the Group and wholly derived
from continuing operations (see Note 2 for details).
Condensed Consolidated Statement of Comprehensive Income
Six months ended 30 June
2025 2024
Notes $m $m
(unaudited) (unaudited)
Net profit 104.8 78.6
Items that will not be reclassified subsequently to the Consolidated Income
Statement:
Changes in fair value of equity investments (1.2) (3.1)
Items that may be reclassified subsequently to the Consolidated Income
Statement:
Foreign currency translation 116.1 (22.1)
Effective portion of changes in fair value of cash flow hedges 15.3 (3.1)
Changes in fair value of cash flow hedges reclassified to the Consolidated 1.2 2.9
Income Statement
Costs of hedging (0.6) (1.8)
Income tax relating to items that may be reclassified (0.1) (0.4)
Other comprehensive income/(expense) 130.7 (27.6)
Total comprehensive income 235.5 51.0
All amounts are attributable to shareholders of the Group and wholly derived
from continuing operations.
Condensed Consolidated Statement of Financial Position
30 June 2025 31 December 2024
Notes $m $m
(unaudited) (audited)
Assets
Non-current assets
Property, plant and equipment 594.0 502.6
Right-of-use assets 67.5 67.5
Intangible assets 759.3 805.9
Goodwill 1,359.9 1,290.2
Investment in financial assets 15.7 16.9
Deferred tax assets 23.2 22.7
Derivative financial assets 9 0.2 -
Restricted cash 4.5 3.4
Other non-current receivables 13.2 12.5
2,837.5 2,721.7
Current assets
Inventories 381.1 349.6
Trade and other receivables 402.6 335.0
Current tax receivable 22.4 16.8
Derivative financial assets 9 23.6 18.4
Restricted cash 8.6 8.8
Cash and cash equivalents 95.7 64.7
934.0 793.3
Total assets 3,771.5 3,515.0
Equity and liabilities
Current liabilities
Trade and other payables 369.0 382.7
Lease liabilities 15.4 22.0
Current tax payable 30.5 31.9
Derivative financial liabilities 9 29.2 18.1
Contingent consideration 7 32.2 53.3
Provisions 2.5 4.3
478.8 512.3
Non-current liabilities
Borrowings 8 1,260.8 1,122.8
Lease liabilities 63.7 56.8
Deferred tax liabilities 93.6 82.7
Contingent consideration 7 22.7 17.0
Provisions 3.5 3.5
Derivative financial liabilities 9 - 0.3
Other non-current liabilities 37.2 30.7
1,481.5 1,313.8
Total liabilities 1,960.3 1,826.1
Net assets 1,811.2 1,688.9
Equity
Share capital 251.5 251.5
Share premium 181.0 181.0
Own shares (13.4) (16.4)
Retained deficit (824.4) (828.4)
Merger reserve 2,098.9 2,098.9
Cumulative translation reserve (53.4) (169.5)
Other reserves 171.0 171.8
Total equity 1,811.2 1,688.9
Total equity and liabilities 3,771.5 3,515.0
Condensed Consolidated Statement of Changes in Equity
Share capital Share premium Own shares Retained Merger reserve Cumulative translation reserve Other reserves Total
deficit
Notes $m $m $m $m $m $m $m $m
At 1 January 2025 (audited) 251.5 181.0 (16.4) (828.4) 2,098.9 (169.5) 171.8 1,688.9
Net profit - - - 104.8 - - - 104.8
Other comprehensive expense:
Foreign currency translation adjustment - - - - - 116.1 - 116.1
Changes in fair value of cash flow hedges, net of tax - - - - - - 15.8 15.8
Change in fair value of equity investments - - - - - - (1.2) (1.2)
Other comprehensive expense - - - - - 116.1 14.6 130.7
Total comprehensive income/(expense) - - - 104.8 - 116.1 14.6 235.5
Dividends paid 5 - - - (100.8) - - - (100.8)
Purchase of shares by Employee Benefit Trust - - (23.0) - - - - (23.0)
Share-based payments - - - - - - 10.4 10.4
Share awards vested - - 26.0 - - - (25.7) 0.3
Changes in fair value of cash flow hedges transferred to inventory - - - - - - (0.1) (0.1)
At 30 June 2025 (unaudited) 251.5 181.0 (13.4) (824.4) 2,098.9 (53.4) 171.0 1,811.2
Share capital Share premium Own shares Retained deficit Merger reserve Cumulative translation reserve Other reserves Total
Notes $m $m $m $m $m $m $m $m
At 1 January 2024 (audited) 251.5 181.0 (0.6) (888.7) 2,098.9 (122.2) 172.8 1,692.7
Net profit - - - 78.6 - - - 78.6
Other comprehensive expense:
Foreign currency translation adjustment - - - - - (22.1) - (22.1)
Changes in fair value of cash flow hedges, net of tax - - - - - - (2.4) (2.4)
Change in fair value of equity investments - - - - - - (3.1) (3.1)
Other comprehensive expense - - - - - (22.1) (5.5) (27.6)
Total comprehensive income/(expense) - - - 78.6 - (22.1) (5.5) 51.0
Dividends paid 5 - - - (91.5) - - - (91.5)
Purchase of shares by Employee Benefit Trust - - (6.9) - - - - (6.9)
Share-based payments - - - - - - 9.1 9.1
Share awards vested - - 5.3 - - - (4.8) 0.5
At 30 June 2024 (unaudited) 251.5 181.0 (2.2) (901.6) 2,098.9 (144.3) 171.6 1,654.9
Condensed Consolidated Statement of Cash Flows
Six months ended 30 June
2025 2024
Notes $m $m
Cash flows from operating activities (unaudited) (unaudited)
Net profit 104.8 78.6
Adjustments for
Depreciation of property, plant and equipment 20.6 20.0
Depreciation of right-of-use assets 11.6 11.4
Amortisation of intangible assets 78.5 78.3
Income tax 4 32.6 25.4
Non-operating expense, net(1) 6.9 1.8
Fair value movement of contingent consideration 4.8 4.7
Finance expense, net 32.2 40.2
Share-based payments 10.5 9.3
Impairment/write-off of intangible assets - 0.2
Impairment (reversals)/charges of property, plant and equipment (1.0) 0.2
Change in assets and liabilities:
Inventories (1.5) 6.7
Trade and other receivables (41.5) (29.0)
Other non-current receivables (0.6) (0.2)
Restricted cash (0.4) 0.8
Trade and other payables (38.4) (56.5)
Provisions (2.6) (4.9)
Other non-current payables 2.3 1.5
Net cash generated from operations 218.8 188.5
Interest received 1.4 2.6
Interest paid (38.5) (45.1)
Payment of contingent consideration arising from acquisitions 7 (1.9) (48.1)
Income taxes paid (24.8) (24.4)
Net cash generated from operating activities 155.0 73.5
Cash flows from investing activities
Acquisition of property, plant and equipment(1) (56.6) (37.8)
Acquisition of intangible assets(1) (12.3) (12.8)
Proceeds arising from acquisitions 7 0.7 -
Proceeds from sale of property, plant and equipment and other assets - 0.3
Payment of contingent consideration arising from acquisitions 7 (25.0) (22.8)
Net cash used in investing activities (93.2) (73.1)
Cash flows from financing activities
Proceeds from borrowings 8 120.9 105.3
Realised loss on settlement of FX derivatives (17.6) -
Payment of lease liabilities (12.2) (12.1)
Purchase of own shares (22.4) -
Dividends paid 5 (100.8) (91.5)
Net cash used in financing activities (32.1) 1.7
Net change in cash and cash equivalents 29.7 2.1
Cash and cash equivalents at beginning of the period 64.7 97.6
Effect of exchange rate changes on cash and cash equivalents 1.3 (2.8)
Cash and cash equivalents at end of the period 95.7 96.9
1. The comparatives have been re-presented as outlined in Note 1
to the Condensed Consolidated Financial Statements.
1. Basis of preparation and accounting standards
Convatec Group Plc (the "Company") is a public limited company incorporated in
the United Kingdom. The accompanying unaudited Condensed Consolidated Interim
Financial Statements of the Company and its subsidiaries (the "Group") for the
six months ended 30 June 2025 have been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Conduct Authority and with
IAS 34 Interim Financial Reporting as adopted by the United Kingdom. The Group
has prepared the financial statements on the basis that it will continue to
operate as a going concern as described further below.
The Condensed Consolidated Interim Financial Statements should be read in
conjunction with the 2024 Convatec Group Plc Annual Report and Accounts, which
were prepared in accordance with the United Kingdom adopted international
accounting standards and IFRS Accounting Standards as issued by the
International Accounting Standards Board (IASB). The Condensed Consolidated
Interim Financial Statements have been prepared in accordance with the
accounting policies adopted in the Group's most recent annual financial
statements for the year ended 31 December 2024.
These Condensed Consolidated Interim Financial Statements and the comparatives
are unaudited, except where otherwise indicated, and do not constitute
statutory financial statements. The statutory financial statements for the
Group in respect of the year ended 31 December 2024 have been reported on by
the Group's auditor and delivered to the Registrar of Companies. The audit
report on those accounts was (i) unqualified, (ii) did not include a reference
to any matters to which the auditor drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
The Condensed Consolidated Interim Financial Statements for the six months
ended 30 June 2025 were approved by the Board on 28 July 2025.
Going concern
In preparing their assessment of going concern, the Directors considered
available cash resources, actual financial performance, forecast performance
from the Board-approved 2025 budget and longer-term strategic plan and
exposure to the Group's principal and emerging risks.
As at 30 June 2025, the Group held cash and cash equivalents of $95.7 million
(31 December 2024: $64.7 million), with borrowings of $1,260.8 million (31
December 2024: $1,122.8 million). Borrowings as at 30 June 2025, net of
unamortised financing fees, comprised of a term loan of $250.0 million, drawn
multicurrency revolving credit facilities of $519.9 million and senior notes
of $500.0 million, with maturity dates of 2027, 2028 and 2029 respectively.
$430.1 million of the multicurrency revolving credit facilities remained
undrawn as at 30 June 2025 (31 December 2024: $566.5 million).
The Directors considered severe but plausible downside scenarios linked to the
Group's principal risks and also carried out a reverse stress test against the
base forecast to determine the performance levels that would result in a
breach of covenants. Under each downside scenario, the Group is forecast to
retain sufficient liquidity and covenant headroom through the going concern
period and consider the revenue reduction required to breach covenants to be
implausible given the Group's strong market position and the mitigations
available to the Board, including reducing expansionary capital investment.
As a result, the Directors have a reasonable expectation that the Group will
have adequate liquid resources to meet its liabilities as they become due for
a period of at least 12 months from the date that the Financial Statements
have been authorised and therefore believe that it is appropriate to adopt the
going concern basis of accounting in preparing the Condensed Consolidated
Interim Financial Statements.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Condensed Consolidated Interim Financial Statements
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported value of assets and
liabilities, income and expense. Actual results may differ from these
estimates or judgements. Management regularly reviews, and revises as
necessary, the accounting judgements that significantly impact the amounts
recognised in the Condensed Consolidated Interim Financial Statements and the
sources of estimation uncertainty that are considered to be "key estimates"
due to their potential to give rise to material adjustments in the Group's
Consolidated Financial Statements within the next financial year.
In preparing the Condensed Consolidated Interim Financial Statements,
management has determined that there are no areas of estimation uncertainty
that have a significant risk of resulting in a material adjustment to the
carrying amount of assets and liabilities within the next financial year or
critical judgements in applying accounting policies that have a significant
effect on the amounts recognised in the Condensed Consolidated Interim
Financial Statements. This is consistent with the Group's last annual
financial statements for the year ended 31 December 2024.
New accounting standards applied
The Group's accounting policies used in these Condensed Consolidated Interim
Financial Statements are consistent with those set out in the 2024 Annual
Report and Accounts, except for the adoption of new standards effective as of
1 January 2025. No standards, interpretations or amendments have been
adopted early.
From 1 January 2025, the Group adopted the following mandatory amendment:
• Lack of exchangeability - Amendments to IAS 21
This amendment did not have a material impact on the Condensed Consolidated
Interim Financial Statements.
Prior year re-presentation
Certain line items in the primary statements have been disaggregated to
provide greater clarity, and accordingly, the corresponding comparative
amounts have been re-presented for consistency and comparability between
periods.
Within the Condensed Consolidated Statement of Cash Flows, and to be
consistent with the 2024 Consolidated Financial Statements, the non-operating
income has been re-presented to be disclosed net of unrealised losses on
derivatives of $10.4 million. This was previously recognised separately as
derivative financial assets ($4.8 million) and derivative financial
liabilities ($15.2 million).
Within the Condensed Consolidated Statement of Cash Flows, cash flows
associated with the acquisition of property, plant and equipment of $37.8
million and acquisition of intangible assets of $12.8 million have now been
presented separately.
There is no impact on cash flows, or any other subtotal presented previously.
2. Revenue and segment information
The Board considers the Group's business to be a single segment entity engaged
in the development, manufacture and sale of medical products and technologies.
R&D, manufacturing and central support functions are managed globally for
the Group. Revenues are managed both on a category and geographic basis. This
note presents the performance and activities of the Group as a single segment.
Convatec's Executive Leadership Team (CELT), as the Group's Chief Operating
Decision Maker, is the function that allocates resources and evaluates the
Group's global product portfolios on a revenue basis and evaluates
profitability and associated investment on an enterprise-wide basis due to
shared infrastructures and support functions between the categories. Financial
information in respect of revenues provided to the CELT for decision-making
purposes is made on both a category and geographic basis. Resources are
allocated on a Group-wide basis, with a focus on both category and the key
markets but primarily based on the merits of each individual proposal.
Revenue by category
The following table sets out the Group's revenue by category:
Six months ended 30 June
2025 2024
$m $m
Advanced Wound Care 367.0 360.0
Ostomy Care 326.5 311.1
Continence Care 259.4 242.6
Infusion Care 227.0 199.5
Revenue excluding hospital care exit 1,179.9 1,113.2
Revenue from hospital care exit - 0.2
Total 1,179.9 1,113.4
Revenue by geography
The following table sets out the Group's revenue by regional geographic market
in which third-party customers are located:
Six months ended 30 June
2025 2024
$m $m
North America 657.0 622.2
Europe 346.6 327.4
Rest of World (RoW)(1) 176.3 163.8
Total 1,179.9 1,113.4
1. Rest of World (ROW) comprises all countries in Asia Pacific,
Latin America (including Mexico and the Caribbean), the Middle East (including
Turkey) and Africa.
3. Finance income and expenses
Finance expenses arise from interest on the Group's borrowings and lease
liabilities. Finance income arises from interest earned on investment of
surplus cash.
Finance costs, net for the six months ended 30 June were as follows:
Six months ended 30 June
2025 2024
$m $m
Finance income
Interest income on cash and cash equivalents 1.4 1.8
Interest income on interest rate derivatives - 0.8
Total finance income 1.4 2.6
Finance expenses
Interest expense on borrowings (31.3) (38.0)
Interest expense on interest rate derivatives (0.2) -
Other financing-related fees(1) (3.5) (4.8)
Interest expense on lease liabilities (1.8) (1.7)
Capitalised interest(2) 4.2 2.8
Other finance costs (1.0) (1.1)
Total finance expenses (33.6) (42.8)
Finance costs, net (32.2) (40.2)
1. Other financing-related fees include the amortisation of
deferred financing fees of associated with the multicurrency revolving credit
facilities, term loans facilities and senior notes and receivables financing
fees.
2. Capitalised interest was calculated using the Group's weighted
average interest rate over the period of 5.3% (2024: 6.0%) and will be treated
as tax deductible.
4. Income taxes
The Group's income tax expense is accrued using the tax rate that would be
applicable to expected annual total earnings (i.e. the estimated average
annual effective income tax rate applied to the profit before tax).
The tax charge for the six months ended 30 June 2025 has been calculated by
applying the effective rate of tax which is expected to apply to the Group for
the year ending 31 December 2025 using rates substantively enacted as at 30
June 2025.
For the six months ended 30 June 2025, the Group recorded an income tax
expense of $32.6 million (30 June 2024: $25.4 million). The Group's reported
effective tax rate for the period ended 30 June 2025 was 23.7% (2024: 24.4%).
The decrease in the reported effective tax rate was principally driven by
reduction in non-deductible acquisition costs.
The Group continues to believe it has made adequate provision for uncertain
tax positions on open issues in accordance with IFRIC 23 Uncertainty over
Income Tax Treatments. The ultimate liability for such matters may vary from
the amounts provided and is dependent upon the outcome of discussions with
relevant tax authorities or, where applicable, appeal proceedings.
The Group has applied the temporary exception as detailed in the IASB
announcement "International Tax Reform-Pillar Two Model Rules", which amended
IAS 12 Income Taxes, and therefore has not recognised nor disclosed
information about deferred tax assets and liabilities related to Pillar Two
income taxes.
5. Dividends
The Board ensures that adequate realised distributable reserves are available
in the Company in order to meet proposed shareholder dividends, and the
purchase of shares for employee share scheme incentives. The Company
principally derives distributable reserves from dividends received from
subsidiary companies.
In determining the level of dividend in the year, the Board considers the
following factors and risks that may influence the proposed dividend:
- Availability of realised distributable reserves
- Available cash resources and commitments
- Strategic opportunities and investments, in line with the Group's strategic
plan
- Principal risks of the Group
The Board paid the 2024 final dividend in May 2025. The Board has taken into
consideration balancing the return to shareholders, and the additional
investment in delivery of our strategy in the period. The decision to increase
the interim dividend for 2025 reflects the Board's confidence in the future
performance of the Group and the underlying financial strength, realised
distributable reserves position, available liquidity and cash generation of
the Group when assessing cash flow forecasts for the next two years from the
date of the dividend payment.
Dividends paid and proposed were as follows:
pence per share cents per share $m
Final dividend 2023 3.517 4.460 91.5
Interim dividend 2024 1.422 1.822 38.7
Paid in 2024 4.939 6.282 130.2
Final dividend 2024 3.639 4.594 100.8
Paid in 2025 to date 3.639 4.594 100.8
Interim dividend 2025 proposed 1.399 1.877] 38.5]
The proposed interim dividend for 2025, is to be distributed on 1 October 2025
to shareholders registered at the close of business on 22 August 2025. The
dividend will be declared in US dollars and will be paid in Sterling at the
exchange rate of $1.3421/£1.00 determined on 28 July 2025.
6. Earnings per share
Basic earnings per share is calculated based on the Group's net profit for the
year attributable to shareholders divided by the weighted average number of
ordinary shares in issue during the year. The weighted average number of
shares is net of shares purchased by the Group and held as own shares.
Diluted earnings per share take into account the dilutive effect of all
outstanding share options priced below the market price in arriving at the
number of shares used in its calculation.
Six months ended 30 June
2025 2024
Net profit attributable to the shareholders of the Group ($m) 104.8 78.6
Basic weighted average ordinary shares in issue (number) 2,044,204,772 2,047,599,499
Dilutive impact of share awards (number) 7,896,549 8,353,802
Diluted weighted average ordinary shares in issue (number) 2,052,101,321 2,055,953,301
Basic earnings per share (cents per share) 5.1¢ per share 3.8¢ per share
Diluted earnings per share (cents per share) 5.1¢ per share 3.8¢ per share
The calculation of diluted earnings per share does not contain any share
options that were non-dilutive for the year, because the average market price
of the Group's ordinary shares exceeded the exercise price.
7. Acquisitions
Livramedom
Assets acquired and liabilities assumed
In April 2025 (within the measurement period), the Group finalised the working
capital and gross indebtedness adjustments which reduce the consideration
relating to the 2024 acquisition of Livramedom. The final adjustment was $1.0
million, resulting in the total consideration increasing by $0.7 million to
$13.5 million. Of the $1.0 million, $0.7 million has been received from the
sellers to date as shown within cash flows from investing activities in the
Condensed Consolidated Statement of Cash Flows.
As a result, the carrying value of the Group's goodwill increased to $1,359.9
million at 30 June 2025 (31 December 2024: $1,290.2 million) reflecting the
working capital and gross indebtedness adjustments of $0.7 million and foreign
exchange movements of $69.0 million.
Contingent consideration
As at 30 June 2025, the discounted fair value of contingent consideration
payable in respect of the Group's acquisitions was $54.9 million (31 December
2024: $70.3 million). During the year, earnout payments totalling $26.9
million were made in respect of past acquisitions ($25.0 million recognised
within the cash flows from investing activities and $1.9 million recognised
within the cash flows from operating activities in the Consolidated Statement
of Cash Flows). The net charge to the income statement in respect of changes
in the fair value of contingent consideration (based on the best estimates of
the amounts payable as at 30 June 2025) was $4.8 million. In addition, there
was a foreign exchange movement of $6.7 million from the re-translation of
non-USD denominated balances.
8. Borrowings
The Group's sources of borrowing for funding and liquidity purposes derive
from senior notes and credit facilities, including a committed revolving
credit facility.
The Group's consolidated borrowings were as follows:
30 June 2025 31 December 2024
Year of maturity Face value Face value
Currency $m $m
Revolving Credit Facility(1) Multicurrency 2028 519.9 383.5
Term Loan USD 2027 250.0 250.0
Senior Notes USD 2029 500.0 500.0
Interest-bearing borrowings 1,269.9 1,133.5
Financing fees(2) (9.1) (10.7)
Carrying value of borrowings 1,260.8 1,122.8
Current borrowings - -
Non-current borrowings 1,260.8 1,122.8
1. Included within the Revolving Credit Facility as at 30 June 2025
was €106.0 million ($124.9 million) and $395.0 million, representing 24.0%
of RCF debt denominated in Euros, and 76.0% denominated in US dollars
respectively. As at 31 December 2024, this was €106.0 million ($109.8
million) and £7.0 million ($8.8 million), representing 28.6% of RCF debt
denominated in Euros, 2.3% of the RCF debt denominated in GBP and 69.1%
denominated in US dollars.
2. Financing fees of $9.1 million (31 December 2024: $10.7 million)
related to the remaining unamortised fees incurred on the credit facilities
and senior notes.
Credit facilities
The credit facilities held by the Group are committed and available for the
refinancing of certain existing financial indebtedness and general corporate
purposes. The Group's bank credit facility of $1.2 billion comprises of a
$250.0 million term loan and a $950.0 million multicurrency revolving credit
facility. As at 30 June 2025, the term loan was fully drawn and $519.9 million
of the revolving credit facility was drawn, with $430.1 million undrawn.
Financial covenants
The principal financial covenants are based on a permitted net debt to
covenant-adjusted EBITDA(1) ratio and interest cover test as defined in the
credit facilities agreement. Testing is required on a semi-annual basis, at
June and December, based on the last 12 months' financial performance. At 30
June 2025, the permitted net debt to covenant-adjusted EBITDA(1) ratio was a
maximum of 3.5 times and the interest cover a minimum of 3.5 times, terms as
defined by the credit facilities agreement. In accordance with the credit
facilities agreement, the net debt to covenant-adjusted EBITDA(1) ratio can
increase to a maximum 4.0 times for permitted acquisitions or investments.
The Group was in compliance with all financial and non-financial covenants at
30 June 2025, with significant available headroom on the financial covenants
(in excess of $900.5 million debt headroom on the net debt to
covenant-adjusted EBITDA(1)).
1. Covenant-adjusted EBITDA is calculated based on terms as defined in
the credit facilities agreement. This is different to adjusted EBITDA, which
is an alternative performance measure (APM).
Senior notes
Unsecured senior notes of $500.0 million are subject to an interest cover
financial covenant as defined in the indentures which is a minimum of 2.0
times, with testing required annually at 31 December on the last 12 calendar
months' financial performances.
9. Fair value measurement
Financial instruments are classified as Level 1, Level 2, or Level 3 in the
fair value hierarchy in accordance with IFRS 13 Fair Value Measurements, based
upon the degree to which the fair value movements are observable. Level 1 fair
value measures are defined as those with quoted (unadjusted) market prices in
active markets for identical assets or liabilities. Level 2 fair value
measurements are defined as those derived from inputs other than quoted prices
that are observable for the asset or liability, either directly (prices from
third parties) or indirectly (derived from third-party prices). Level 3 fair
value measurements are defined as those derived from significant unobservable
inputs.
The only instrument classified as Level 1 are the senior notes, given the
availability of quoted market price. The Group's derivative financial
instruments as well as the Group's other borrowings are classified as Level 2,
and the Group's equity investment in preference shares, together with
contingent consideration arising on business combinations, are classified as
Level 3. There were no transfers between levels during the year.
30 June 2025 31 December 2024
Carrying amount Fair value Carrying amount Fair value
$m $m $m $m
Financial instruments measured at fair value
Non-current
Equity investment 15.7 15.7 16.9 16.9
Derivative financial assets 0.2 0.2 - -
Derivative financial liabilities - - (0.3) (0.3)
Contingent consideration (22.7) (22.7) (17.0) (17.0)
Current
Derivative financial assets 23.6 23.6 18.4 18.4
Derivative financial liabilities (29.2) (29.2) (18.1) (18.1)
Contingent consideration (32.2) (32.2) (53.3) (53.3)
Financial instruments not measured at fair value
Non-current
Senior notes (500.0) (476.3) (500.0) (456.9)
Other borrowings (769.9) (795.2) (633.5) (678.9)
Senior notes and other borrowings
The Group's senior notes are listed and their fair value has been obtained
from quoted market data and therefore categorised as a Level 1 measurement in
the fair value hierarchy under IFRS 13 Fair Value Measurements. For the
Group's other borrowings, the fair value is based on discounted cash flows
using a current borrowing rate and is categorised as a Level 2 measurement.
Derivative financial instruments
The Group holds interest rate swap agreements to fix a proportion of variable
interest on US dollar and EURO denominated debt, in accordance with the
Group's risk management policy. The interest rate swaps are designated as
hedging instruments in a cash flow hedging relationship.
The fair values of the interest rate swap agreements are calculated by
discounting expected future principal and interest cashflow and translating at
the appropriate balance sheet rates and are therefore categorised as a Level 2
measurement in the fair value hierarchy under IFRS 13 Fair Value Measurements.
The Group uses forward foreign exchange contracts, designated as cash flow
hedges, to hedge certain forecast third-party foreign currency transactions
for up to one year. When a commitment is entered into, a layered approach is
taken when hedging the currency exposure, ensuring that no more than 100% of
the transaction exposure is covered. The currencies hedged by forward foreign
exchange contracts are US dollars, Swiss francs, Pound sterling, Danish krone
and Japanese yen. The Group further utilises foreign exchange contracts and
swaps classified as fair value through profit or loss (FVTPL) to manage
short-term foreign exchange exposure.
The fair values of the forward foreign exchange contracts are calculated by
discounting the contracted forward values and translating at the appropriate
balance sheet rates and are therefore categorised as a Level 2 measurement in
the fair value hierarchy under IFRS 13 Fair Value Measurements.
Contingent consideration
Contingent consideration arising on business combinations is classified as a
recurring fair value measurement within Level 3 of the fair value hierarchy,
in line with IFRS 13, Fair Value Measurements. Key unobservable inputs in
respect of the Group's acquisitions include actual results, management
forecasts and an appropriate discount rate.
Management has determined that the potential range of undiscounted outcomes at
30 June 2025 is between $37.1 million and $152.4 million (31 December 2024:
$58.8 million and $163.9 million), from a maximum undiscounted amount of
$152.4 million (31 December 2024: $163.9 million). The change in the potential
range of undiscounted outcomes as at 30 June 2025 was due to milestone
payments made in the year and changes in foreign exchange rates.
The table below shows an indicative basis of the sensitivity to the income
statement and balance sheet at 30 June 2025.
Sales forecast Discount rate
+5% +10% -5% -10% +1.0% +2.0% -1.0% -2.0%
Increase/(decrease) in financial liability and loss/(gain) in income statement 0.5 1.2 (0.7) (1.4) (2.1) (4.0) 2.2 4.5
Equity investment
The investment is in relation to the Group's investment in BlueWind Medical
Limited in 2022. The Group considers this investment to be strategic in nature
and it is not held for trading. In line with IFRS 13 Fair Value Measurement,
this investment has been classified as Level 3 in the fair value hierarchy as
its measurement is derived from significant unobservable inputs by reference
to available information, including the current market value of similar
instruments, recent financing rounds and discounted cash flows of the
underlying net assets. The fair value of the investment has been determined by
using an average of three valuation methodologies, those being the precedent
transaction method, the income approach method and the probability-weighted
expected return model.
The Group made an irrevocable election at initial recognition to present
subsequent changes in the fair value of the investment in other comprehensive
income. It was initially recorded at fair value plus transaction costs and is
remeasured to fair value at subsequent reporting dates. The fair value of the
investment at 30 June 2025 was $15.7 million (31 December 2024: $16.9
million), with the movement of $1.2 million taken to the Condensed
Consolidated Statement of Other Comprehensive Income. No dividends were
recognised during the period.
10. Foreign exchange
The following table summarises the exchange rates used for the translation of
currencies into US dollars that have the most significant impact on the Group
results:
Average rate/ Closing rate Six months ended 30 June Year ended 31 December
Currency 2025 2024 2024
USD/EUR Average 1.09 1.08 1.08
Closing 1.18 1.07 1.04
USD/GBP Average 1.30 1.27 1.28
Closing 1.37 1.26 1.25
USD/DKK Average 0.15 0.15 0.15
Closing 0.16 0.14 0.14
11. Related Party Transactions
There were no changes in the related party transactions described in the 2024
Annual Report and Accounts that have had a material effect on the financial
position or performance of the Group during the six months to 30 June 2025.
12. Commitments and contingencies
Capital commitments
At 30 June 2025, the Group had non-cancellable commitments for the purchase of
property, plant and equipment, capitalised software and development of $21.6
million (31 December 2024: $42.6 million).
Contingent liabilities
The Company and its subsidiaries are party to various legal claims and
disputes which arise in the normal course of business. Provisions are
recognised for outcomes that are deemed probable and can be reliably
estimated. Management believe that any material liability in respect of legal
actions and claims not already provided for, is remote.
13. Subsequent events
There have been no events between the balance sheet date, and the date on
which the financial statements were approved by the Board of Directors, which
would require adjustment to the financial statements or any additional
disclosure. Refer to the Category Review section of this document for further
commentary on the two draft CMS proposals published on 30 June 2025 and 14
July 2025.
On 28 July 2025, the Board declared an interim dividend to be distributed on 1
October 2025. Refer to Note 5 - Dividends for further details.
Directors' Responsibilities Statement
The Directors confirm that to the best of their knowledge:
• The Condensed Consolidated Financial Statements have been
prepared in accordance with IAS 34 as adopted by the United Kingdom; and
• The interim management report includes a fair review of the
information required by:
a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the Condensed Consolidated Financial
Statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
The composition of the Board of Directors of Convatec Group plc has not
changed since reported in the 2024 Annual Report and Accounts. A list of
current Directors is maintained on our corporate website
(www.convatecgroup.com (http://www.convatecgroup.com/) ).
By order of the Board:
Karim
Bitar
Chief Executive
Officer
28 July 2025
Jonny
Mason
Chief Financial
Officer
28 July 2025
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