ConvaTec Group (LON:CTEC) said it made a “good start” to the year, with first-four-month results in line with expectations and management reiterating its full-year 2026 guidance during its AGM trading update call.
Chief Executive Officer Jonny Mason said the company remains on track to deliver its 2026 targets, while Chief Financial Officer Fiona Ryder reported broad-based growth across all four of ConvaTec’s categories, excluding the impact of InnovaMatrix.
Ryder said the company continues to expect full-year 2026 organic revenue growth of 5% to 7%, excluding InnovaMatrix, with growth expected to accelerate in the second half due to customer order phasing and product launches.
Category Growth Remains Broad-Based
In Advanced Wound Care, ConvaTec reported mid-single-digit organic growth excluding InnovaMatrix. Ryder said growth was led by Latin America and Asia-Pacific, with solid growth in Europe and slight growth in North America against a strong comparison period. ConvaFoam continued to perform well, while AQUACEL Ag+ Extra also contributed growth. The company continues to expect mid-single-digit growth in the category for 2026, supported by five wound product launches.
In Ostomy Care, organic growth was also mid-single digit, led by Europe and Latin America. Ryder said the Home Services Group supported new patient referrals in the U.S., while Esteem Body continued to receive positive customer feedback. She said ConvaTec is gaining share in all key markets and maintained its mid-single-digit growth outlook for the category.
Continence Care delivered mid-single-digit organic growth, with North America representing more than 90% of category sales. Ryder pointed to growth in patient volumes at 180 Medical, ConvaTec’s U.S. service business. Outside the U.S., she said growth remained very strong from a small base. Full-year guidance remains mid-single-digit growth.
Infusion Care posted mid- to high-single-digit organic growth. Ryder said demand remained strong in diabetes and particularly in non-diabetes treatments as the business diversifies. The company continues to expect high-single-digit growth for 2026, with faster growth in the second half as customer order phasing improves and new capacity begins coming online.
Margin Target Reiterated Despite First-Half Headwinds
ConvaTec reaffirmed expectations for a group adjusted operating profit margin of at least 23% in 2026. Ryder said the target is expected to be supported by operations, commercial and general and administrative productivity. The outlook includes about 40 basis points of full-year foreign-exchange headwind, all occurring in the first half, and assumes no material deterioration in the macroeconomic environment.
Ryder said first-half adjusted operating margin in constant currency is expected to be approximately flat versus the first half of 2025. Margin expansion is expected to build in the second half, supported by simplification and productivity initiatives. She also said the company expects another year of double-digit earnings-per-share growth and 100% equity cash conversion.
During the Q&A, several analysts pressed management on the expected second-half margin ramp. Ryder declined to provide a detailed bridge ahead of half-year results but reiterated that revenue growth, productivity initiatives and OpEx management are expected to support the full-year margin target.
InnovaMatrix Remains Uncertain
Management said it continues to expect around GBP 20 million of InnovaMatrix revenue in 2026, significantly weighted to the second half, though it acknowledged uncertainty in the market.
Mason said first-half InnovaMatrix sales are expected to be in the low single-digit millions of pounds, in line with the company’s plan. He said the outlook depends on how quickly the market transitions under new reimbursement conditions and whether higher-cost competitors exit the market.
“A lot has to happen for us to get to that GBP 20 million,” Mason said, adding that the estimate could be higher or lower depending on market development. He said 2026 is expected to be the low point for the business and that ConvaTec expects growth thereafter.
Product Pipeline and Infusion Care Expansion Highlighted
Mason said ConvaTec’s recently announced “accelerate” strategy remains on track. In Advanced Wound Care, he highlighted ConvaFoam, ConvaNiox, ConvaFiber and ConvaVac as part of what he described as a strong product pipeline. He said initial market releases are underway for several products, though sales of ConvaNiox are expected to build slowly.
In Ostomy Care, Mason said Esteem Body is gaining share in major markets, while Flexi-Seal AIR is expected to launch in 2026 and Natura Body in 2027. In Continence Care, he said there has been no material impact from U.S. catheter code changes, and new products including GC Air Pocket and Set and Cure Aqua remain on track for launch in the second half.
In Infusion Care, Mason said non-diabetes treatments again represented more than 15% of revenue. He also announced ConvaTec’s first patch pump supply agreement, which he said will help the company support a wider range of diabetes patients. Mason said the product is not yet on the market and is not expected to materially change guidance, but it supports the company’s expectation for double-digit Infusion Care revenue growth from 2027.
Mason closed the call by emphasizing the company’s resilience and broad-based growth across products, categories and geographies. He said ConvaTec remains positioned to deliver sustainable 6% to 8% organic revenue growth, mid-20s operating margin and double-digit EPS growth from 2027.
About ConvaTec Group (LON:CTEC)
ConvaTec Group PLC engages in the development, manufacturing, and sale of medical products, services, and technologies in Europe, North America, and internationally. The company offers advanced wound dressings and skin care products for the management of acute and chronic wounds resulting from various conditions, such as diabetes, and acute conditions resulting from traumatic injury and burns. It also provides ostomy care solutions, including devices, accessories, and services for people with a stoma resulting from colorectal cancer, inflammatory bowel disease, and bladder cancer.
