ConvaTec Group PLC · LSE:CTEC
ConvaTec — H1 2021 Earnings Presentation
24 slides from ConvaTec's earnings presentation, Jul 30, 2021
Slide 1: Interim Results for 6 months ended 30 June 2021
Interim Results for 6 months ended 30 June 2021 30 July 2021
Slide 2: Disclaimer
Disclaimer For the purposes of this notice, “Presentation” means this document, its contents or any part of it, any oral presentation, any question or answer session and any written or oral material discussed or distributed before, during or after the Presentation meeting. This information, which do
Slide 3: Hosts and agenda
Hosts and agenda Karim Bitar Frank Schulkes Chief Executive Officer Chief Financial Officer Introduction & Financial review Strategic update 2
Slide 4: Financial review
Financial review Frank Schulkes, Chief Financial Officer 3
Slide 5: Strong financial performance
Strong financial performance Revenue Adjusted operating profit Diluted adjusted EPS +7.01% $204m +18.0% Revenue increased 17.0%1 growth in EBIT, Diluted adjusted to $1,008m - 7.4% organic 20.3% margin EPS 7.2 cents (H1’20: $908m) (H1’20: $182m – 20% margin) (H1’20: 6.1 cents) Interim DPS Adjusted FC
Slide 6: Strong revenue performance enhanced by some soft comparatives
Strong revenue performance enhanced by some soft comparatives Constant Currency growth 7.0% 10.7% 3.7% 6.8% 6.5% Cure 36 acquisition 11 +17 10 9 7 ($m) 27 +39 1,008 ( 12 ) 908 Skincare disposal H1'20 Advanced Wound Ostomy Continence & Infusion FX H1'21 Care Care Critical Care Care • Reported revenue
Slide 7: AWC strength - CCC slow down
AWC strength - CCC slow down -1.8% 2.7% -4.8% -0.8% 16.3% Advanced • Improving trends in elective surgeries & access Wound Care • Strong growth in LATAM and APAC 148 119 149 143 151 • Rebound in performance in Europe and N.America H1 211 16.3% 130 142 151 132 147 H1 21 CC 10.7% 100 • Strong growth i
Slide 8: IC continued good growth - OC solid performance
IC continued good growth - OC solid performance 0.8% 8.0% 12.6% 21.2% 6.5% Infusion Care • Leading position in growing “smart glycaemic 73 71 69 63 82 79 88 74 93 82 control” segment H1 211 6.5% • Growth overall in H1 consistent with market H1 21 CC 6.5% 30 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20
Slide 9: Increasing gross margin while investing in R&D and commercial
Increasing gross margin while investing in R&D and commercial Gross margin1 rate % Opex2,3 excluding non-recurring transformation investment YoY change 37.3% $338m 38.2% $385m Movement 60 bps FX (100 bps) Operational 160 bps Sales, 23.8% 24.7% marketing & $216m $249m distribution 60.0% 60.6% 9.6% 9.
Slide 10: Continuing to generate strong cash flow, invest strategically and maintain leverage
Continuing to generate strong cash flow, invest strategically and maintain leverage $87m $1m $92m $85m $54m $179m $44m $942m $944m $891m $29m $19m $857m $804m $760m $731m $712m $712m 1 2020 Net Cash Interest Tax Capex Dividends Acquisition Other Jun'21 Net Debt generated Net Debt from operations Lea
Slide 11: H2 Guidance & FY Outlook
H2 Guidance & FY Outlook • 3.5 – 5.0% organic revenue growth Revenue • Continuing COVID uncertainty – particularly in Asia Pacific & Latin America Growth • Growth expected to be back-end weighted • H2 tougher comparatives, expected phasing & identified headwinds • 18.0 – 19.0% constant currency adju
Slide 12: Strategic update
Strategic update Karim Bitar, Chief Executive Officer 11
Slide 13: Strategic transformation – FISBE – pivoting to sustainable & profitable growth
Strategic transformation – FISBE – pivoting to sustainable & profitable growth Focus Innovate Simplify Build Execute on key categories in our work and our organization & core capabilities with excellence and markets trusted solutions operations Sustainable & Profitable Growth 12
Slide 14: Focus – on key categories & markets
Focus – on key categories & markets 2021 Priorities H1 2021 Progress • Accelerate growth in top • Continued investment and growth in top 12 markets 12 markets • Explore acquisitions and • Cure Medical acquisition partnerships to strengthen competitive position • ChloraSolv partnership with RLS 13
Slide 15: Innovate – to provide differentiated patient-centric trusted solutions
Innovate – to provide differentiated patient-centric trusted solutions 2021 Priorities H1 2021 Progress • Continue to strengthen • Strengthening capabilities competencies in process development, clinical & • Continue to develop regulatory pipeline • Launched innovative • Roll out new single Extended
Slide 16: Simplify – for a more customer-centric, agile & accountable model
Simplify – for a more customer-centric, agile & accountable model 2021 Priorities H1 2021 Progress • Migrate more activities to • Expansion of Global Business Global Business Services Service Centre in Lisbon >87% ‐ Finance ‐ Streamlining processes 87% auto match for cash application ‐ IT ‐ Enabling
Slide 17: Build – strengthen capabilities across the group
Build – strengthen capabilities across the group 2021 Priorities H1 2021 Progress Further progress - CoEs • Progress with Salesforce Excellence CoE • Salesforce Excellence ‐ Single CRM platform across Europe & • Marketing N.America ‐ Improving targeting Establish new CoEs and productivity • Quality
Slide 18: Execute with excellence
Execute with excellence 2021 Priorities H1 2021 Progress • Continue to embed execution • Embedded Transformation Execution Office methodology Examples of Execution Excellence • Expand “Ability2Execute” Quality & Operations Medical Education training more broadly • Optimised regional • H1: >130k HCPs
Slide 19: Summary and Outlook
Summary and Outlook Strong H1 2021 performance • Strong revenue & EBIT growth supported by softer comps • Further investment in strategic transformation • Strong cash generation – redeployed to strengthen Group Strategic transformation progressing well Outlook • Organic revenue growth: 3.5% to 5.0%
Slide 20: Q&A
Q&A If you would like to listen or pose a question in the live Q&A please dial at 11am BST : United Kingdom: +44 (0)330 336 9434 United States: +1 929 477 0324 Access code: 6926530 19
Slide 21: Appendix
Appendix @ ConvaTec
Slide 22: Exchange rate sensitivity
Exchange rate sensitivity ▪ ConvaTec’s geographic profile can lead to transactional currency impacts. ▪ We monitor key rates against the US dollar. ▪ 27th July 2021 spot rates would indicate a ~$35m gain on revenue and ~$11m reduction in EBIT compared with average FY20 rates. This would equate to an
Slide 23: Opex excluding non-recurring transformation investment
Opex excluding non-recurring transformation investment 2021 2020 excluding non excluding non Non recurring recurring Non recurring recurring Adjusted Opex2 transformation1 transformation Adjusted Opex2 transformation1 transformation Selling & Distribution $253m $4m $249m $218m $2m $216m % to sales 2
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