Convatec on track amid broad-based revenue growth

(Sharecast News) - Convatec Group reported broad-based organic revenue growth for the 10 months ended 31 October on Thursday, and said it remained on track to meet its full-year targets, supported by strong uptake of new product launches across its chronic care portfolio. The FTSE 100 company also reaffirmed its expectation of delivering double-digit adjusted earnings growth in 2025 and said it anticipated another year of double-digit earnings expansion in 2026.

Its update came shortly after the company announced the death of former chief executive Karim Bitar on 27 October.

"The board would like to thank stakeholders for sharing many kind words of condolence," Convatec said.

Group organic revenue excluding the InnovaMatrix wound-care line rose 6.3% year to date, with reported growth of 6.2%.

Advanced wound care delivered mid-single-digit growth excluding InnovaMatrix, led by strong demand in North America, where ConvaFoam continued to gain share, and in emerging markets.

Ostomy care also grew at a mid-single-digit rate, supported by new patient starts in the Home Services Group and strong performance from Esteem Body.

Continence care expanded at a mid-to-high-single-digit pace, driven by rising patient volumes in North America and continued momentum in Europe and emerging markets, while GentleCath Air for Women continued to perform well. Infusion Care posted double-digit growth, helped by diversification across customers and applications, and faster uptake from newer products such as Neria Guard for AbbVie's Parkinson's treatment.

Chief executive Jonny Mason said the company's product pipeline continued to underpin performance.

"New product launches delivered strong sales growth, offsetting market headwinds and demonstrating the resilience of our business," he said.

"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."

Convatec said it expected full-year organic revenue growth excluding InnovaMatrix of 6.0% to 6.5%, with around $70m of revenue from the InnovaMatrix range.

The group maintained guidance for an adjusted operating margin of 22.0% to 22.5%, up from 21.2% in 2024, despite absorbing tariff headwinds of about 30 basis points.

Adjusted earnings per share were forecast to grow at a double-digit rate, with cash conversion of around 80%.

The firm reiterated medium-term targets of 5% to 7% organic revenue growth, double-digit adjusted EPS expansion, and an adjusted operating margin reaching the mid-20s by 2026 or 2027.

It highlighted ongoing investment to support future growth, including accelerated capital expenditure of $160m to $180m this year to expand capacity for its innovation pipeline.

Convatec also noted progress on strategic initiatives, including the launch of ConvaNiox and plans to introduce ConvaFiber, ConvaVac, Flexi-Seal Air and Cure Aqua in 2026.

As of the end of October, Convatec had repurchased $202m of its $300m share buyback programme and in early October issued its first investment-grade bond, raising $500m.

Guidance for net finance costs, tax, working capital and tariff impacts was unchanged, with current exchange rates expected to provide a modest revenue tailwind in the final months of the year.

At 0909 GMT, shares in Convatec Group were up 6.34% at 251.6p.

Reporting by Josh White for Sharecast.com.