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ConvaTec Group Plc Annual Results 2019

 

28 February 2020

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Audited Annual Results for the twelve months ended 31 December 2019

Results on track and making strategic progress

 

Financial results in line with guidance, FY 2019 key points:

  • Group reported revenue of $1,827 million declined 0.3% year on year but grew 2.3%3 organically.
  • Reported EBIT4 of $97million, declined 63.8% year on year due to the impairment of acquired intangible assets, transformation investments including MDR and the impact of adverse FX movements.
  • As expected, adjusted1 EBIT4 of $354 million was down 17.5% (2018: $429 million), primarily due to the investment in transformation ($40 million) and Medical Device Regulation (“MDR”, $5 million), and the impact of adverse FX movements ($14 million); with adjusted1 EBIT margin of 19.4% (2018: 23.4%).

Strategic progress:

  • New vision, strategy, operating model and values announced today, based on:
    • Five pillars of our corporate strategy: Focus, Innovate, Simplify, Build and Execute.
    • Simplified operating model: more customer-centric, agile and innovation led with clear accountability.
  • Transformation progressing well; increasing future investment. FY 2019 achievements:
      • Implementation of more than 100 initiatives underway.
      • More than 150 people trained on execution excellence and over 500 people directly involved in transformation.
      • Transformation cost investment of $40 million and capex investment of $20m.
    • Increasing transformation investment to c.$210 million over 2019 to 2021 (previously c.$150 million5 over 2019 to 2021). For further details see page 3.
    • Recurring transformation costs related to commercial and R&D investment expected to between $60 million and $65 million in 2020, increasing to c.$75 million by 2021 (previously $50 million5 by 2021). This was $13 million in 2019. For further details see page 3.
    • Anticipated annual gross benefits in 2021 increased to between $150 million and $170 million (previously between $130 million and $150 million5).

Financial outlook, FY 2020

  • Constant currency revenue growth expected to be 2.0% to 3.5%6.
  • Constant currency adjusted EBIT margin 16.0% to 18.0%6, including c.$50 million of cost investment associated with the transformation and c.$18 million of costs related to MDR.

Karim Bitar, Chief Executive Officer, commented:

“One of the key reasons that attracted me to ConvaTec was the significant opportunity ahead of us. We operate in structurally growing markets; however, our performance in different product categories and markets varies markedly. With clear direction, an emphasis on innovation and an execution excellence culture, ConvaTec will focus on pivoting to sustainable and profitable growth.

Since I joined ConvaTec, the ConvaTec Executive Leadership Team (“CELT”) and I have undertaken a strategic assessment and concluded that we need to move to a new operating model. The new model is customer-centric, more agile, focuses on innovation and ensures clear accountability. Our transformation goal and strategic intent is to pivot to sustainable and profitable growth.”

(...)

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Enquiries

 

Analysts and Investors  
                                                                                                                                 

investorrelations@convatec.com

 

 

 

Mark Reynolds, Director Investor Relations         

+44 (0)7551 036 625

 

 

 

 

 

 

 

 


Media


mediarelations@convatec.com

 

 

 

Buchanan: Charles Ryland / Chris Lane / Vicky Haynes          

+44 (0)207 466 5000

 

 

 

 

 

 

 

 

 

 

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