Trading update for the three months ended 30 September 2021

29 October 2021

Q3 performance in line with expectations
& continued strategic progress

Key Points:

• Q3 Group reported revenue of $511 million was 3.7% higher year on year; up 2.7%¹ in constant currency and 2.2%² on an organic basis.
  • Continued momentum in Advanced Wound Care, modest growth in Ostomy Care and Continence Care, with declines, as expected, in Infusion Care and Critical Care against tough prior year comparatives.
• Group revenue for the 9 months to 30 September 2021 was up 5.4% on an organic and constant currency basis.
• Further good progress on our FISBE (Focus, Innovate, Simplify, Build, Execute) strategy to pivot to sustainable and profitable growth:
  • In Continence Care we improved the quality of our HSG business by disposing of the non-core incontinence activities while also signing an agreement to acquire a quality US service provider focused on existing catheter users.
  • To further advance our new product pipeline we have rolled out a consistent new product development and launch process across all business units. We have conducted investment, development, and scale-up gate reviews for new products such as MioAdvance Extended Wear Infusion Sets and the GentleCath^TM Air male catheters launching in 2022.
  • We have continued to improve our regulatory processes including optimising the phasing of MDR implementation over an extended timetable.
  • Continuing to make progress and planning further investments in key initiatives such as digital interactions with healthcare professionals and consumers. We are also progressing plans to expand our Global Business Services centre beyond finance to include HR and IT.
• Strengthened the balance sheet with the successful issuance of $500 million 2029 senior unsecured notes – diversifying Group debt and extending its maturity profile.
• 2021 full year guidance – We now expect organic² revenue growth to be towards the upper end of our 3.5-5.0% guidance range with a constant currency adjusted EBIT margin of 18.0-19.0%. Based on current FX this equates to guidance of 17.4-18.4% for the published adjusted EBIT margin.

Karim Bitar, Chief Executive Officer, commented:

“During Q3, we continued to drive good momentum in the business and made further strategic progress implementing key transformation initiatives and improving execution.   As expected, the growth in the third quarter slowed from Q2 given the relatively tougher comparatives.  Notwithstanding the continuing uncertainties in the market, particularly around logistics and raw material inflation, for the full year we expect to be towards the upper end of our organic revenue guidance and to meet our EBIT margin guidance. 

“We remain focused on pivoting to sustainable and profitable growth and are making good progress – I am confident in Convatec’s long-term growth prospects.”

Revenue Summary:

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