TIDMCTEC
RNS Number : 7987Z
ConvaTec Group PLC
18 May 2023
18 May 2023
Convatec Group Plc (Convatec)
AGM trading update for the four months ended 30 April 2023
Good start to 2023 - revenue guidance increased
Convatec, a global medical products and technologies company,
announces a trading update for the four months ended 30 April 2023.
Revenue increased by 3.1% on an organic basis(1) . On a reported
basis revenue decreased by 1.7%, as expected, following the exit of
the hospital care activities and related industrial sales in 2022.
On a constant currency basis revenue increased by 0.8%. Given the
good organic growth so far this year against tough comparatives
coupled with the improving momentum and confidence in the outlook,
we now expect organic revenue growth for 2023 to be between 5.0%
and 6.5% (previously 4.5%-6.0%).
In Advanced Wound Care, organic growth was mid-single digit,
with a strong performance in Global Emerging Markets and good
growth in Europe and North America, the latter supported by a
strong contribution from ATT(2) .
In Ostomy Care, organic growth compared to the same category
last year was mid-single digit, with strong growth in Global
Emerging Markets, good growth in North America and key European
markets. In the new combined category, which includes Flexi-Seal(3)
, growth was flat, with the positive performance in Ostomy products
offset by expected declines in Flexi-Seal. This was owing to
phasing of sales which are expected to normalise across the
year.
In Continence Care, organic growth was mid-single digit,
benefitting from an increase in reimbursement levels in the US.
Organic growth was mid-single digit both including and excluding
industrial sales(4) , which was added to the category at the start
of this year.
In Infusion Care, organic growth was flat for the first four
months, due to the phasing of customer orders and strong prior year
comparators, as anticipated. Underlying demand for Convatec's
infusion sets remains strong. We continue to expect high
single-digit growth from this category over time.
Strategic progress over the last four months
-- Acquisition of a highly innovative anti-infective nitric
oxide technology platform: a unique natural antimicrobial and
antibiofilm mode of action, backed by compelling scientific and
clinical data. Convatec is well positioned to commercialise this
technology across a variety of medtech device applications starting
with Advanced Wound Care, with the first product expected to be
launched in 2025
-- Plant Network Optimisation: announced plan to move
manufacturing operations from EuroTec facility in Roosendaal, the
Netherlands, to our larger site in Michalovce, Slovakia, which
already manufactures similar Ostomy products. The intended move
will take place later this year and is part of our simplification
and productivity agenda
-- New product innovation
o ConvaFoam(TM) launched in the US in January, and we are
pleased with the initial positive customer feedback
o InnovaMatrix(TM) continued to demonstrate strong momentum in
the large and rapidly growing wound biologics segment(5) and
contributed to organic growth from April
o Regulatory approval was received in the US for the sale of
Medtronic's 780G with our MioAdvance(TM) Extended Wear Infusion
Set
o On track for further new product and customer launches in
2023:
-- GentleCath(TM) Air for Women, our compact catheter offering, in France in Q4 2023
-- Tailored infusion set for Tandem Mobi, for launch in H2 2023
in the US, subject to regulatory approval
-- inset(TM) and contact(TM) infusion sets for the Beta Bionics
iLet Bionic Pancreas in the US, subject to regulatory approval
-- Neria(TM) guard infusion set for AbbVie's ABBV-951
Parkinson's disease therapy which has been submitted for regulatory
approval across global markets
Revenue guidance increased
Given the good organic revenue growth so far this year against
tough comparatives coupled with the improving momentum and
confidence in the outlook, we now expect organic revenue growth for
2023 to be between 5.0% and 6.5% (previously 4.5%-6.0%). We
continue to expect to increase our operating profit margin on a
constant currency basis to at least 19.7% (FY2022: 19.5%).
***
Footnotes
1 Organic growth is calculated by applying the applicable prior
period average exchange rates to the Group's actual performance in
the respective period and excluding acquired and
disposed/discontinued businesses
(2) Triad Life Sciences, now known as Advanced Tissue
Technologies (ATT), included in organic growth from 1 April
2023
(3) Faecal management system, which was moved to Ostomy Care at
the start of this year
(4) B2B catheter sales, which was moved to Continence Care at
the start of the year
(5) SmartTRAK wound biologics segment includes skin substitutes,
active collagen dressings and topical drug delivery
Contacts
Kate Postans, Vice President,
Analysts & Investor Relations & Corporate
Investors Communications +44 (0) 7826 447807
Sheebani Chothani, Investor +44 (0) 7805 011046
Relations & Corporate Communications ir@convatec.com
Manager
Buchanan: Charles Ryland / Chris
Media Lane +44 (0)207 466 5000
About Convatec
Pioneering trusted medical solutions to improve the lives we
touch: Convatec is a global medical products and technologies
company, focused on solutions for the management of chronic
conditions, with leading positions in advanced wound care, ostomy
care, continence care, and infusion care. With around 10,000
colleagues, we provide our products and services in almost 100
countries, united by a promise to be forever caring. Our solutions
provide a range of benefits, from infection prevention and
protection of at-risk skin, to improved patient outcomes and
reduced care costs. Group revenues in 2022 were over $2 billion.
The company is a constituent of the FTSE 100 Index (LSE:CTEC). To
learn more about Convatec, please visit
http://www.convatecgroup.com
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",
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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
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information available to the Group at the date of preparation of
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