ConvaTec Group PLC · LSE:CTEC
ConvaTec — Q3 2017 Earnings Presentation
17 slides from ConvaTec's earnings presentation, Oct 16, 2017
Slide 1: Q3 2017 Trading Update
Q3 2017 Trading Update 16 OCTOBER 2017 0
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is being furnished to each recipient in connection with ConvaTec Group Plc (“ConvaTec” and, together with its subsidiaries, the “Group”) and has been prepared from publicly available information. For the purposes of this notice, “Presentation” means
Slide 3: Q3 2017 Key points
Q3 2017 Key points • Group revenue +5.1%1 (constant currency) +3.3%2 (organic) • Advanced Wound Care revenue +1.4%2 • Affected by supply disruptions and loss of some orders • Ostomy Care revenue +0.5%1 (constant currency), -1.8%2 organic • Impacted by supply constraints and loss of some orders • Con
Slide 4: Franchise Results Overview
Franchise Results Overview Weaker than expected growth Q3 2017 Reported revenue ($’m) Organic growth1 Advanced Wound Care 147.9 +1.4% Ostomy Care 132.1 (1.8)% Continence & Critical Care 96.2 +4.5% Infusion Devices 69.3 +17.3% Total Revenue 445.5 +3.3% 1 Organic growth presents year on year growth at
Slide 5: Advanced Wound Care
Advanced Wound Care Ongoing weakness from continuing supply disruptions Reported revenue ($m) 147.6 147.9 142.9 • +1.4%1 organic revenue growth 138.4 133.7 • Weakness from continuing supply disruptions & loss of some orders • Less than expected progress on EMEA backorders Q3 FY16 Q4 FY16 Q1 FY17 Q2
Slide 6: Ostomy Care
Ostomy Care Supply constraints impact growth Reported revenue $’m Reported revenue ($m) 129.3 133.0 132.9 132.1 • +0.5%1 (CER) or -1.8% (organic) 121.8 reflecting supply issues and expected US GPO pricing impact • Delays in final lines transferred from Greensboro to Haina Q3 FY16 Q4 FY16 Q1 FY17 Q2
Slide 7: Continence & Critical Care
Continence & Critical Care 180 Medical drives strong growth Reported revenue $’m Reported revenue ($m) 96.2 • +9.8%1 (CER) or +4.5% (organic) 91.1 89.6 86.8 85.5 • Strong performance by 180 Medical and GentleCath™ in U.S. • GentleCath™ Glide and me+ programme for continence care Q3 FY16 Q4 FY16 Q1 F
Slide 8: Infusion Devices
Infusion Devices Good momentum Reported revenue $’m Reported revenue ($m) 70.3 69.3 67.3 62.1 58.4 • Revenue growth of 17.3%1 driven by anticipated increase in customer orders Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 • Shift in demand from Q2, as previously expected • Impact of a customer voluntary p
Slide 9: MIP Programme Update
MIP Programme Update • Targeted c. 150 bps cumulative improvement in gross margin by end of 20171, half of c. 300 bps target 2015 – 2020 • Now expect to lose 40 bps of margin benefit achieved in the first half of this year, and the majority of the 90 bps delivered in FY 2016 • Main driver is the tra
Slide 10: Guidance changes FY 2017
Guidance changes FY 2017 Revenue guidance1 Backorders New products > 4% organic 1% - 2% organic growth1 Loss of orders growth1 Performance 1 Organic growth presents year on year growth at constant exchange rates, excluding M&A activities MIP guidance Operational disruption Loss of benefits + c. 150
Slide 11: Q3 2017 Summary
Q3 2017 Summary • Acceleration in Q3 organic revenue1, but weaker than expected • Continuing momentum in Infusion Devices and Continence & Critical Care • Supply issues and loss of some orders in Ostomy Care and Advanced Wound Care • Revenue impact • MIP programme also affected • Guidance for FY 201
Slide 12: Fundamentals remain
Fundamentals remain Well positioned in large, structurally growing chronic care markets Diversified chronic care business Strong brands Differentiated products with proven clinical performance Opportunity to expand portfolio across products and geographies Strong and innovative R&D pipeline 11
Slide 13: Q&A
Q&A 12
Slide 14: Appendix
Appendix 13
Slide 15: Quarterly Revenue Performance
Quarterly Revenue Performance Quarterly reported revenues by franchise Organic1 growth rate by franchise 2016 2017 2016 2017 $m Q3 Q4 Q1 Q2 Q3 % Q3 Q4 Q1 Q2 Q3 AWC 142.9 147.6 133.7 138.4 147.9 AWC 4.0 6.1 4.2 2.6 1.4 Ostomy Ostomy 129.3 133.0 121.8 132.9 132.1 2.6 1.0 1.1 3.6 (1.8) Care Care C&CC 8
Slide 16: Revenues by Geography
Revenues by Geography Q3 2017 reported Reported growth Organic growth1 ($m) Americas 225.6 10.7% 8.0% EMEA 185.3 3.4% (2.0)% APAC 34.6 1.2% 2.5% Group 445.5 6.8% 3.3% 1 Organic growth presents year on year growth at constant exchange rates, excluding M&A activities 15
Slide 17: FX Rates
FX Rates Q3 2017 Average Q3 2016 Average USD/GBP 1.309 1.313 USD/EUR 1.175 1.116 16