REG - Convatec Group PLC - Trading update for 10 months ended 31 October 2025

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RNS Number : 3278H  Convatec Group PLC  13 November 2025

 

 

Trading update for the ten months ended 31 October 2025           13
November 2025

 

New products drive broad-based growth and on track to deliver targets

 

It was with sadness that on 27 October the Board announced the passing of our
former Chief Executive Karim Bitar. The Board would like to thank stakeholders
for sharing many kind words of condolence.

Key points

•   YTD organic revenue growth(1) excluding InnovaMatrix(®) 6.3%(2), with
broad-based growth (including InnovaMatrix(®) 5.0%; reported growth 6.2%)

•   New product launches progressing well and gaining share

•    On track to deliver FY25 financial targets

•   For FY26, we expect another year of double-digit adjusted EPS growth
and further adjusted operating margin expansion, irrespective of the
regulatory outcome for InnovaMatrix(®). This will be driven by 5-7% organic
growth in non-InnovaMatrix(®) sales(2)

 

Broad-based organic revenue growth

 

•  Advanced Wound Care (AWC) was mid-single digit excluding
InnovaMatrix(®). Strong growth in North America, as ConvaFoam(TM) continued
to gain share, and in Global Emerging Markets (GEM). In Europe growth is
building with new product launches

•   Ostomy Care (OC) was mid-single digit. Good growth in North America
and Europe, supported by new patient starts in our Home Services Group (HSG),
and in GEM. Esteem Body(TM) continued to perform strongly

•   Continence Care (CC) was mid-to-high-single digit. Further growth in
patient volumes in HSG in North America, driven by excellent customer service,
and continued strong growth in Europe and GEM. Our new compact catheter,
GentleCath Air(TM) for Women, continued to perform well

•    Infusion Care (IC) was double-digit. We continued to diversify
customers and applications, and saw faster growth(1) from new customers,
products and therapies, particularly Neria(TM) Guard for AbbVie's treatment of
Parkinson's Disease

On-track to deliver FY25 and medium-term financial targets

•    FY25 Group organic revenue growth(1) excluding InnovaMatrix(®)
6.0-6.5% (previously 5.5-7.0%)

•      InnovaMatrix(®) revenue of around $70m (also see page 3)

•    FY25 adjusted operating profit margin of 22.0-22.5% (unchanged)
(FY24: 21.2%), including absorbing c.(30) bps of tariff headwinds

•    FY25 double-digit growth in adjusted EPS (unchanged), with cash
conversion around 80%

•  Medium-term targets: 5-7% organic revenue and double-digit adjusted EPS
growth, and reaching mid-20s% adjusted operating margin by 2026 or 2027

 

Jonny Mason, Chief Executive Officer, commented:

"New product launches delivered strong sales growth, offsetting market
headwinds and demonstrating the resilience of our business. We saw broad-based
growth across our chronic care categories, together with further benefits of
our ongoing simplification and productivity initiatives.

Our commitment to patient care has never been stronger, with over 10,000
talented colleagues improving the lives of millions of people globally who
rely on our trusted medical solutions every day. We are well-positioned to
deliver our financial targets again this year, and beyond."

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

 2  In the ten months to 31 October 2025, non-InnovaMatrix(®) revenue represented 97% of Group revenues.

 

Operational, strategic and financial progress

 

•       The launches of ConvaFoam(TM), Esteem Body(TM) and GentleCath
Air(TM) for Women are each progressing well

•       We have the strongest innovation pipeline in our history. The
launch of ConvaNiox(TM) is underway, and we are on track to launch
ConvaFiber(TM), ConvaVac(TM), Flexi-Seal Air(TM) and Cure(TM) Aqua in 2026

•       We secured our first US Ostomy Group Purchasing Organisation
(GPO) contract in over 5 years, Captis/Vizient. We also extended our Resource
Group Ostomy GPO contract by 3 years

•       As at 31 October 2025 we had repurchased $202m of our $300m
share buyback programme

•       On 2 October 2025 we issued our first investment grade bond of
$500m

 

Detailed FY25 guidance:

 

•    FY25 category revenue growth guidance is unchanged:

•    AWC: mid-single digit ex-InnovaMatrix(®)

•    InnovaMatrix(®) revenue of around $70m

•    OC: mid-single digit

•    CC: mid-to-high single digit

•     IC: double-digit. As previously reported, H1 growth higher than H2

•     Accelerated growth capex of $160-180m (previously $130-150m),
increasing capacity to support our new product pipeline and future growth

•    Net finance costs of $65-70m (unchanged) (2024: $78m). Adjusted book
tax rate c.24% (unchanged); cash tax rate again materially lower

•     Opex R&D spend of c.$100-110m; cash costs of adjusting items of
c.$20m (both unchanged)

•     Working capital growth no greater than revenue growth (unchanged)

•     c.$5-10m of financial impacts from tariffs, included within FY25
margin guidance (unchanged)

•   Based on current FX rates for the remainder of FY25 we see a Group
revenue tailwind of c.120bps and no impact on adjusted operating profit margin
versus FY24

 

Conference call details

Jonny Mason, Chief Executive Officer, and Fiona Ryder, Chief Financial
Officer, will host a conference call for analysts and investors to discuss the
trading update at 08:30hrs GMT on 13 November 2025. Please register for the
webcast using this link
(https://www.investis-live.com/convatec/68eced6633e9f50017f98f01/cews) .
Dial-in details are shown below:

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

•      United Kingdom (Toll-Free): +44 808 189 0158

•      Access Code: 483 889

•      Global Dial-In Numbers
(https://www.netroadshow.com/conferencing/global-numbers?confId=90279)

 

Contacts

Analysts &                            David
Phillips
                  +44 (0) 7909 324994

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

    Jamie Lewis

    Investor Relations
Manager

 

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

 

About Convatec

Pioneering trusted medical solutions to improve the lives we touch: Convatec
is a global medical products and technologies company, focused on solutions
for the management of chronic conditions, with leading positions in Advanced
Wound Care, Ostomy Care, Continence Care, and Infusion Care. With more than
10,000 colleagues, we provide our products and services in around 90
countries, united by a promise to be forever caring. Our solutions provide a
range of benefits, from infection prevention, treatment for hard to heal
wounds, at-risk skin and ulcerated tissue to supporting debilitating
conditions, improved patient outcomes and reduced care costs. Convatec's
revenues in 2024 were over $2 billion. The company is a constituent of the
FTSE 100 Index (LSE:CTEC). To learn more please
visit http://www.convatecgroup.com (http://www.convatecgroup.com/) .

 

About InnovaMatrix(®)

InnovaMatrix(®) revenues represented c.3% of Group revenue in the 10 months
to 31 October 2025. As previously reported, the now-postponed Local Coverage
Determinations (LCDs) for Skin Substitutes and Tissue-Based Products, plus
draft Centers for Medicare & Medicaid Services (CMS) payment proposals
(https://www.convatecgroup.com/media-articles/press-releases/2025/convatec-responds-to-cms-draft-payment--proposal-for-skin-substitutes-in-the-united-states/)
, created significant market uncertainty. We now expect InnovaMatrix(®)
revenue in FY25 of around $70m.

On 31 October 2025, CMS published their revised payment rate of $127.28 per sq
cm for skin substitutes, with effect from 1 January 2026. As previously
reported,
(https://www.convatecgroup.com/media-articles/press-releases/2025/convatec-notes-cms-payment-plans-for----skin-substitutes-in-the-united-states/)
this CMS decision represents an estimated headwind in 2026 of approximately
1-2% of Group revenue, unchanged from the guidance given at our H1 25 results,
excluding any impact of LCDs. We are on track to publish RCTs in 2026.

 

Forward Looking Statements

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

Forward-looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic and competitive
uncertainties and contingencies that are difficult to predict and many of
which are outside the Group's control. As such, no assurance can be given that
such future results, including guidance provided by the Group, will be
achieved. Past performance of the Group cannot be relied on as a guide to
future performance.

Forward-looking statements are based only on knowledge and information
available to the Group at the date of preparation of this document and speak
only as at the date of this document. The Group and its directors, officers,
employees, agents, affiliates and advisers expressly disclaim any obligations
to update any forward-looking statements (except to the extent required by
applicable law or regulation). LEI number - 213800LS272L4FIDOH92

 

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