17 November 2022

Convatec Group Plc

Capital Markets Event

Convatec will host a Capital Markets Event this afternoon, 17 November 2022.

Convatec's Executive Leadership Team, including Chief Executive Officer, Karim Bitar, and Chief Financial Officer, Jonny Mason, will present the next phase of Convatec's FISBE strategy and the Group's future growth opportunities. 

The team will provide insight into how the Group intends to deliver sustainable organic revenue growth of 4-6% per annum and adjusted operating profit margin expansion into the mid-20s over the medium-term. In delivering these targets, the Group also expects to achieve double-digit EPS and Free Cash Flow CAGR.

The presentations will provide detail into:

-      The attractive chronic care markets the Group operates in and Convatec's leading positions across key geographies

-      The next phase of the Group's FISBE strategy and how the five pillars will evolve to:

·    Focus on strengthening customer loyalty in key markets and categories

·    Innovate to increase vitality and velocity of trusted medical solutions

·    Simplify to improve productivity across our organisation

·    Build and embed mission-critical capabilities and winning culture

·    Execute with excellence while integrating ESG

-      The growth strategies and opportunities for each of the Group's categories - Advanced Wound Care, Ostomy Care, Infusion Care and Continence Care - and how each will improve the customer experience, enhance its portfolio and drive productivity

-      How the Group intends to improve its operating profit margin by:

·    strengthening mix across and within categories

·    driving simplification and productivity across commercial, Global Quality & Operations and G&A

-      The attractive financial qualities of the Group, its cash generative nature, and the Group's capital allocation framework

On 10 November 2022 the Group published its 10-month trading statement which highlighted continued good momentum in the business.  The Group upgraded its 2022 full-year revenue guidance to 5.4-5.8% organic revenue growth, and confirmed it was on track to deliver an adjusted operating profit margin in 2022 of at least 19%.  

Consistent with the Group's medium-term targets, Convatec expects 4-6% organic revenue growth for 2023 to be achievable and for there to be further operating profit margin progression, assuming a modest reduction in the rate of inflation in 2023.

The Group is also pleased to announce that on 15 November it refinanced its bank facilities with $1.2 billion committed for 5 years at slightly improved margins over base rates.  The Group's $500m 2029 senior unsecured notes remain in place.  The Group expects Net Debt at year-end to be c.2.1x EBITDA and adjusted finance expense to be c.$55m for 2022.  Given the increases in the underlying market base rates, the current expectation is that all in debt costs in 2023 will be c.150bps higher. 

The Group will not be disclosing any new material information at today's event.

Capital Markets Event details

The Capital Markets Event for institutional investors and sell-side analysts will start today at 14:00. Places are limited so if you would like to attend in-person please contact IR@Convatec.com

There will also be a live webcast for attendees who wish to join the event virtually, available here. 

A copy of the presentation will be available on Convatec's website after the event with the on-demand webcast available on Friday.

Enquiries 

Analysts and Investors 

Kate Postans, VP Investor Relations, Convatec                                                                   +44 (0)782 644 7807 

ir@convatec.com 

Media 

Buchanan: Charles Ryland / Chris Lane                                                                                   +44 (0)207 466 5000 

About Convatec 

Pioneering trusted medical solutions to improve the lives we touch: Convatec is a FTSE 100 global medical products and technologies company, focused on solutions for the management of chronic conditions, with leading positions in advanced wound care, ostomy care, continence and critical care, and infusion care. Group revenues in 2021 were over $2 billion. With around 10,000 colleagues, we provide our products and services in over 100 countries, united by a promise to be forever caring. Our products provide a range of benefits, from infection prevention and protection of at-risk skin, to improved patient outcomes and reduced care costs. To learn more about Convatec, please visit http://www.convatecgroup.com

Forward Looking Statements 

This document includes certain forward-looking statements with respect to the operations, performance and financial condition of the Group.  Forward-looking statements are generally identified by the use of terms such as "believes", "estimates", "aims", "anticipates", "expects", "intends", "plans", "predicts", "may", "will", "could", "targets", continues", or their negatives or other  similar expressions. These forward-looking statements include all matters that are not historical facts.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies that are difficult to predict and many of which are outside the Group's control. As such, no assurance can be given that such future results, including guidance provided by the Group, will be achieved. Forward-looking statements are not guarantees of future performance and such uncertainties and contingencies, including the factors set out in the "Principal Risks" section of the Strategic Report in our Annual Report and Accounts, could cause the actual results of operations, financial condition and liquidity, and the development of the industry in which the Group operates, to differ materially from the position expressed or implied in the forward-looking statements set out in this document. Past performance of the Group cannot be relied on as a guide to future performance.

Forward-looking statements are based only on knowledge and information available to the Group at the date of preparation of this document and speak only as at the date of this document. The Group and its directors, officers, employees, agents, affiliates and advisers expressly disclaim any obligations to update any forward-looking statements (except to the extent required by applicable law or regulation). 

[1] Bold denotes changes from FISBE 1.0