ConvaTec Plc - Third Quarter Trading Update

Trading Update for the three months ended 30 September 2019

30 October 2019 (LSE: CTEC)

Trading in the third quarter for ConvaTec Group Plc ("the Group"), a leading global medical products and technologies company, was in-line with management expectations and full year guidance remains unchanged.

Key Points:  

  • Group revenue for the three months to 30 September 2019 was $462.9 million, 2.4% higher on a reported basis and 4.6%1 higher on an organic basis compared with the prior year, in part reflecting the benefits of some short-term tailwinds. For the 9 months to 30 September 2019 revenue was $1,351.8 million, a decline of 1.6% on a reported basis due to foreign exchange movements, but growth of 1.5%1 on an organic basis, compared with the prior year.

Franchise Q3 summary:

  • Advanced Wound Care: organic growth of 3.6%1 was driven by our silver portfolio, in particular AQUACELTM Ag+, and foam, whilst distributor inventory movements provided a short-term tailwind which will partly reverse in Q4;
  • Ostomy Care: organic growth of 3.0%1 reflected a solid underlying performance against a weak 2018 performance;
  • Continence and Critical Care: organic growth of 8.0%1 was flattered, as expected, by a weaker prior year comparator due to the packaging recall, along with continued growth in our Home Distribution Group (HDG);
  • Infusion Devices: organic growth of 4.3%1 reflected a weaker prior year comparator.
  • Transformation Initiative on track.
  • FY 2019 guidance unchanged.

 

 

Q3 2019

Reported $'m 

Q3 2018

Reported $'m

Q3 Reported growth %

Q3 Organic growth %1

 9 months organic

growth %1

Advanced Wound Care

147.5

146.8

0.5

3.6

Flat

Ostomy Care

131.7

131.4

0.2

3.0

0.8

Continence & Critical Care

115.1

107.5

7.0

8.0

4.2

Infusion Devices

68.6

66.5

3.2

4.3

1.9

Total revenue

462.9

452.2

2.4

4.6

1.5


Karim Bitar, Chief Executive Officer, commented:

"I am excited to have joined ConvaTec and returned to the healthcare sector. Since I joined the Group at the end of September I have had the opportunity to visit several sites and engage with many colleagues; I have been encouraged by their enthusiasm and the potential within ConvaTec.

I am pleased we have reported a solid performance in Q3, but this is a small step on the significant journey ahead of us as we focus on pivoting to sustainable and profitable growth. As an organisation we need to get closer to patients, to strengthen our innovation pipeline and to drive a relentless focus on execution excellence.

I look forward to giving an update on our plans and progress next year."