Company Reports

Convatec is a global manufacturer of intimate healthcare products, with a focus on ostomy, continence care, wound care, and infusion care.

Convatec is a global manufacturer of intimate healthcare products, with a focus on ostomy, continence care, wound care, and infusion care.

Convatec is a global manufacturer of intimate healthcare products, with a focus on ostomy, continence care, wound care, and infusion care.

Convatec reported first-half organic sales growth, excluding InnovaMatrix's 5% growth, with adjusted operating margin expanding to 21.8% from 21.3% in constant currencies. Management reiterated its full-year guidance of 5.5%-6% organic sales growth, excluding InnovaMatrix.

Convatec reported first-quarter trading results in line with our expectations. Growth came from all segments, with group organic growth excluding InnovaMatrix at 4.8%. Management reiterated its 2026 guidance and medium-term financial targets.

We are transferring coverage of Convatec to a new analyst. Convatec is a global manufacturer of intimate healthcare products across ostomy, continence, wound, and infusion care. The business has seen meaningful turnaround since 2019, with operating margins growing 590 basis points over four years.

Convatec is a global manufacturer of intimate health care products, with a focus on ostomy, continence care, wound care and infusion care.

Convatec delivered full-year consolidated revenue growth of 5%, dragged down by declines in Innovamatrix skin substitute. But, the remainder of the portfolio grew 6% with ostomy, continence care, and infusion therapy up 5%, 7%, and 13%, respectively.

Since its initial public offering, Convatec has followed a familiar playbook to press its advantage in advanced wound care and to enhance its ostomy and continence care businesses. By and large, we like Convatec's businesses that focus on chronic care, which translates into an ongoing stream of revenue from relatively concentrated global markets. However, the company stumbled badly out of the gate and lagged significantly behind its key competitor, Coloplast. Fortunately, a change in management has led to notable progress to remedy this situation.

Convatec reported abbreviated third-quarter results that featured 5% revenue growth year over year, supported by mid-single-digit growth from advanced wound care and double-digit increases from the smaller infusion care product line.

Since its initial public offering, ConvaTec has followed a familiar playbook to press its advantage in advanced wound care and to enhance its ostomy and continence care businesses. By and large, we like ConvaTec's businesses that focus on chronic care, which translates into an ongoing stream of revenue from relatively concentrated global markets. However, the company stumbled badly out of the gate and lagged significantly behind its key competitor, Coloplast. Fortunately, a change in management has led to notable progress to remedy this situation.

Convatec provided first-half results that followed the recent pattern of gradual improvement, with reported revenue and EPS up 6% and 33%, respectively.

The Centers for Medicare and Medicaid Services have delayed the implementation of new reimbursement rules for skin substitutes until January 2026.

Since its initial public offering, ConvaTec has followed a familiar playbook to press its advantage in advanced wound care and to enhance its ostomy and continence care businesses. By and large, we like ConvaTec's businesses that focus on chronic care, which translates into an ongoing stream of revenue from relatively concentrated global markets. However, the company stumbled badly out of the gate and lagged significantly behind its key competitor, Coloplast. Fortunately, a change in management has led to notable progress to remedy this situation.

Convatec delivered strong results in 2024 across all four product segments, with year-over-year revenue growth of 7% organic growth and operating margin improvement of 100 basis points.

Convatec delivered attractive top-line growth in the third quarter, with organic revenue up 7%. Strength across the portfolio was broad-based as most divisions posted high-single-digit growth year over year.

Since its initial public offering, Convatec has followed a familiar playbook to press its advantage in advanced wound care and to enhance its ostomy business. By and large, we like Convatec’s businesses that focus on chronic care, which translates into an ongoing stream of revenue. However, the company stumbled badly out of the gate and lagged significantly behind its key competitor, Coloplast. Fortunately, management has been making notable progress to remedy this situation..

Convatec’s results for the first half of 2024 displayed continued improvement. The firm remains on track to meet our full-year expectations, so we’re leaving our fair value estimate unchanged. Thanks to its focus on operations, commercialization of pipeline products, and emphasis on chronic care products, Convatec has steadily and incrementally pushed growth and profitability higher. We’ve long believed that Convatec’s switching costs among end users and the potential to introduce novel products were enough to provide the firm with a narrow moat. Under CEO Karim Bitar, the firm has begun to realize that potential and make good on its moat.

Narrow-moat Convatec’s top-line growth through the first four months of 2024 held few surprises and puts the firm on track to meet our mid-single-digit growth estimate for the full year. We’re holding steady on our fair value estimate. Year to date, the firm has delivered 5% revenue growth across most product segments, consistent with our projections. Thanks to improvements made over the last several years, Convatec has begun to lean into its moaty businesses, ramping up both sales growth and margin gains.

Convatec finished the year with increasing strength, and we’ve increased our fair value estimate to $13.80 (GBX 271) per share. While green shoots since 2022 demonstrated mild progress as Convatec sought to engineer a turnaround, the last six months have been an inflection point, and we think the firm is firmly on the path to realizing its potential. While the rise in medical utilization likely boosted Convatec’s performance in 2023, the firm had also invested in its innovation and commercial organization and was prepared for these favorable conditions. We’ve long thought that Convatec had the ingredients to support a narrow moat, and the firm is getting closer to realizing that potential as it rides a wave of new product launches.