ConvaTec (CTEC) H1 2025 earnings summary

Executive summary

• Achieved strong financial and strategic performance in H1 2025, with organic revenue growth of 6.0%–6.8% (excluding InnovaMatrix), double-digit EPS growth, and operating margin expansion for the fourth consecutive year, supported by a resilient business model and robust product pipeline.

• New product launches, including Esteem Body, ConvaFoam, and GentleCath Air for Women, are driving growth and innovation across all categories and geographies.

• On track to meet FY 2025 and medium-term guidance, with momentum across all key financial metrics and strong customer loyalty.

• Business model features high recurring revenues and a focus on chronic care markets.

• Achieved a 30% vitality index one year early, reflecting a strong innovation pipeline.

Financial highlights

• Organic revenue growth was 6.8% excluding InnovaMatrix, or 6.0% including it, with broad-based sales growth across all four categories.

• Adjusted operating margin expanded by 130 bps year-over-year to 21.3%; gross margin declined by 60 bps due to mix and inflation.

• Adjusted EPS increased by 18.7%–19% year-over-year to 8.0 cents, benefiting from higher operating profit and lower financing costs.

• Equity cash conversion at 35%–35.4% in H1 2025, with a full-year target of at least 80%.

• Leverage improved to 1.9x net debt/EBITDA, despite a $107 million increase in net debt.

Outlook and guidance

• FY 2025 organic revenue growth guidance of 5.5–7.0% (excluding InnovaMatrix); Infusion Care growth guidance raised to double digits.

• Adjusted operating margin expected at 22.0–22.5%, with 80–130 bps expansion despite FX and tariff headwinds.

• Double-digit adjusted EPS growth and at least 80% cash conversion targeted for FY 2025.

• Capex guidance maintained at $130–150m; adjusted net finance costs lowered to $65–70m.

• Operating margin expected to improve by a similar quantum in H2 as in H1, targeting mid-20s by 2026–2027.