ConvaTec Group (CTEC) Trading Update summary

Financial performance and guidance

• Organic sales growth reached 7.7% for the first 10 months, with all four categories contributing and stronger growth in the second half.

• Upgraded FY 2024 organic sales growth guidance to 7.25%-8% and constant currency margin guidance to at least 21.5%, driven by improved gross margin and lower inflation.

• Double-digit growth in adjusted EPS and free cash flow to equity is expected for 2024 and 2025, irrespective of LCD outcomes, with further margin expansion in 2025.

• Foreign exchange is expected to reduce reported FY24 operating margin by about 70bps; interest, tax, and capex guidance remain unchanged.

• For 2025, excluding InnovaMatrix, 96% of group sales are expected to grow 5%-7%, with continued operating margin expansion.

Business segment highlights

• Advanced Wound Care saw high single-digit growth, with InnovaMatrix sales up 40% year-to-date and no expected negative impact from draft LCDs in 2024.

• Ostomy Care achieved mid-single-digit growth, led by emerging markets and strong uptake of Esteem Body in Europe and the U.S.

• Continence Care delivered high single-digit growth, driven by product portfolio expansion and strong customer service, with GentleCath Air for Women performing well.

• Infusion Care posted high single-digit growth, with strong demand in both diabetes and non-diabetes treatments and new product launches, including Neria Guard for Parkinson's.

• Emerging markets, especially Brazil, Colombia, and China, are driving double-digit growth in Ostomy Care.

Product innovation and pipeline

• New product pipeline is robust, with seven launches planned for 2025 and 2026.

• ConvaFoam, Esteem Body, and GentleCath Air for Women have shown strong market uptake; Natura Body (two-piece version) is planned for 2026.

• GentleCath Air for Women is seeing strong uptake and positive feedback, with the male version on track for 2026.

• Infusion Care is expanding into non-diabetes applications, with AbbVie's Parkinson's product launch in the U.S. expected to boost growth.

• AI is being explored to enhance productivity in customer service and translation.