ConvaTec (CTEC) H1 2026 earnings summary

Executive summary

• H1 2026 delivered solid financial and operational performance, with organic revenue growth ex-InnovaMatrix between 5.0% and 6.8%, strong new product launches, and broad-based gains across all chronic care categories.

• Adjusted operating profit rose 3.9% to $262m, with adjusted diluted EPS up 6.3% to 8.5 cents; reported profit fell due to a $69m non-cash impairment of InnovaMatrix assets.

• Interim dividend increased by 15–15.4%, and a $200m share buyback was announced for completion by year-end.

• The business is positioned for accelerated growth in H2 2026 and beyond, with clear order visibility and a robust innovation pipeline supporting sustainable growth from 2027.

• Strategic focus remains on innovation, operational simplification, and productivity improvements to sustain profitability.

Financial highlights

• H1 2026 organic revenue growth ex-InnovaMatrix was 5.0–6.8% year-over-year; total revenue grew 1.8–4.4% to $1,232m.

• Adjusted operating margin was 21.2–21.3%, down 10 bps YoY but up 50 bps in constant currency.

• Adjusted diluted EPS rose 6–6.3% to 8.5c; double-digit EPS growth expected for the full year.

• Free cash flow to equity was lower due to working capital and CapEx timing, but c.100% cash conversion is expected for the year.

• Interim dividend per share up 15–15.4%; payout ratio targeted at 35–45% of adjusted net profit.

Outlook and guidance

• FY26 organic revenue growth ex-InnovaMatrix narrowed to 5.5–6.5%; H2 2026 expected at 6–8%.

• Adjusted operating margin guidance reaffirmed at ≥23% for FY26, with c.25% targeted for H2.

• Double-digit adjusted EPS growth and c.100% equity cash conversion expected.

• $200m share buyback announced, with leverage expected at 2x EBITDA by year-end.

• From 2027, targeting 6–8% annual organic revenue growth and mid-20s operating margin.