Slide 1: Strong performance and strategic progress
2 August 2023 Strong performance and strategic progress Interim Results for the six months ended 30 June 2023
Slide 2: Disclaimer notice
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 does not purp
Slide 3: Hosts
Hosts Karim Bitar Jonny Mason Chief Executive Officer Chief Financial Officer convatec
Slide 4: Accelerating organic revenue growth, increasing 2023 guidance
Accelerating organic revenue growth – broad-based Further progress expanding operating margin Continued strengthening of competitive position Increasing 2023 guidance 4
Slide 5: Financial review HY 2023
Financial review HY 2023
Slide 6: HY 2023 key metrics
+6.6% H1 22: 6.4% Good growth performance across all four categories +220 bps 62.3% vs 60.1% Improved mix, stronger pricing, increased productivity +70 bps 20.3% vs 19.6% Further progress in simplification and productivity $262m H1 22: $252m Growing cash generation Maintaining a strong balance sheet
Slide 7: Group organic revenue growth bridge
Group Organic1 8.7% 7.6% 3.1% 7.5% 6.6% Constant currency 13.0% 7.6% 3.1% 7.5% 2.7% 13 9 50 16 ($m) 39 17 1,045 1,055 1,055 HY 2022 Advanced Continence Ostomy Infusion Hospital Care FX HY 2023 Wound Care Care Care (exited) Care (inc. FMS) 7 1. Organic growth presents period over period growth at con
Slide 8: Advanced Wound Care and Continence Care
2000000.0% Organic 16.3% 3.4% 7.3% 6.3% 8.7% 0.0% 350 growth 1 -2000000.0% • ATT doubled sales adding ~2% pts to AWC organic growth • Good growth in North America, enhanced by -4000000.0% Advanced 250 314 338 ATT Wound Care 307 -6000000.0% Total 294 298 Sales $m -8000000.0% • Strong growth in GEM an
Slide 9: Ostomy Care and Infusion Care
400 20000000.0% Organic 5.0% (0.8)% 1.2% 2.3% 3.1% 0.0% growth*1 -20000000.0% • Strong growth in Convatec products 6.5% 300 -40000000.0% mostly in GEM and Europe Ostomy • Home Services Group growing sales in US 311 -60000000.0% Care Total 304 298 285 300 • Category growth moderated by FlexiSealTM in
Slide 10: Gross margin +220 bps
Gross margin +220 bps 20.3% 19.6% 10
Slide 11: Net profit, EPS and dividend per share
Net profit1 Diluted Earnings per Share1 Dividend per Share +5.9% 139 +3.0% 1.769 +4.6% 6.8 132 1.717 6.5 $ millions $ cents $ cents H1 2022 H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 1 Adjusted (H1 2023 reported net profit: $55.7m; H1 2023 reported diluted EPS: 2.7 cents) 11
Slide 12: Net debt and leverage bridge
(300) (400) (500) (600) ($ millions) (700) 1,068 (68) 1,298 (800) (56) (900) +262 (9) (59) (60) (1,000) (151) (1,100) (1,200) (88) (1,300) Net Debt EBITDA* Inventory* Other FX derivs & CAPEX Tax, interest, M&A Dividends Net Debt Dec-22 working adjusting leases & other Jun-23 capital* items 2.1x 2.5x
Slide 13: 2023 guidance
Broad-based growth in H1, 6.0-7.5% previously 5.0-6.5% acceleration in AWC Mix, price and productivity ≥20.5% @ CC previously ≥19.7% offsetting inflation Capex: $120–140m A further year of investment Inventory1: +$20-40m for growth Leverage*: ~2.3x Net finance expense: $70-80m Increased base rates a
Slide 14: Organic revenue growth and operating margin
Organic revenue growth Adjusted operating profit margin 6.0-7.5% 23.4% 5.6% ≥20.5%1 5.3% 19.4% 19.5% 4.2% 18.5% 17.7% 2.3% 0.2% 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 guidance guidance Expect double-digit earnings2 and FCF2 CAGR over the medium term 1. At constant currency 14 2.
Slide 15: Strategic update
Strategic update
Slide 16: Accelerating organic revenue growth, increasing guidance
Accelerating organic revenue growth – broad-based Further progress expanding operating margin Continued strengthening of competitive position Increasing 2023 guidance 16
Slide 17: Focus, Innovate, Simplify, Build, Execute
Focus Innovate Simplify Build Execute >90% 2023 launches chronic – recurring 150 bps Pricing discipline Winning share revenues • ConvaFoam G&A now 8.2% +110 bps e.g. AWC and OC in GEM • Betabionics iLet of revenue benefit to margin (H1 ‘22: 9.7%) +6.4% • Medtronic EWIS 1 Revenue growth in • Tandem
Slide 18: Antimicrobials, foam and wound biologics
H1 2023 Antimicrobials • Leading positions worldwide • Double-digit growth in GEM, growing share e.g.China FY 2023 Foam • Positive clinical feedback • Numerous clinical evaluations across leading hospitals Wound • Doubled revenue during H1’23 (organic from April) biologics1 • Expanding biologics1 po
Slide 19: Antimicrobials, wound biologics and foam markets
Antimicrobials Foam Wound biologics1 Market Size CAGR (‘22-’27) Market Size CAGR (‘22-’27) Market Size CAGR (‘22-’27) $0.9 bn $2.2bn ~6% $1.8bn ~6% ~7% 2022 2022 2022 High High High Winning share Winning share Winning share 1. Wound Biologics market segment as defined by SmartTRAK, includes skin sub
Slide 20: Wound biologics large and rapidly growing segment
Wound biologics1 is a large and Expanding portfolio Attractive growth potential rapidly growing segment to address unmet needs CAGR: ~7% • Strong clinical performance and feedback • Low production costs and rapid regulatory pathway $3.1bn $2.2bn • Leverages AWC development, clinical and commercial c
Slide 21: Ostomy Care progress
• Double-digit growth in GEM, gaining share (e.g. China) • Good growth in Europe • Stabilised new patient starts • HSG – 180 Medical contributing to growth • On track to launch in Q1 2024 in US and Europe • Highly competitive one-piece soft convex – large and growing segment 21
Slide 22: Continence Care progress
• Exceptionally high customer loyalty • Acquired A Better Choice Medical – strengthening homecare • Strong growth across portfolio – both GentleCathTM Glide and Cure • Building commercial capabilities and revenues in Europe and GEM • Preparing to launch in Q4 2023, in France and rest of Europe and U
Slide 23: Infusion Care installed base and partners
• Large and growing installed base >1.1 million patients • BetaBionics iLet insulin pump • Medtronic 780G, growing mid-teens in Europe, launching in US • Tandem Mobi wearable pump • Double digit growth e.g. pain management and immunoglobulin deficiency • Treatment for severe Parkinson’s – AbbVie (la
Slide 24: Global people with diabetes, 2022
Global - people with Diabetes, 2022 335 million Pump therapy Intensive insulin 10% ~5% Non-intensive insulin 9% (~1.7 million) Oral and non-insulin injections 41% Multi Daily Injections (MDI) Diet and exercise 40% ~95% Source : Seagrove SIMM April 2023 24
Slide 25: Growth rate of intensive insulin user segments
Global growth rate of intensive insulin user segments Patients 2020 – 2022 (CAGR) Patients 2023 – 2028 (CAGR) Multi Daily ~3% Multi Daily ~3% Injection (MDI) Injection (MDI) Durable pumps ~6% Durable pumps ~8% Patch ~21% Patch & hybrid ~16% Source : Seagrove SIMM April 2023 25
Slide 26: Relevance of proprietary technology components
Durable Wearable durable Patch/hybrid Relevance of proprietary pumps pumps pumps technology components eg. 780G, t:slim X2, iLet eg. Mobi & 8-series eg. Omnipod & Mobi tubeless 26
Slide 27: Global growth drivers in subcutaneous infusion care
Global growth drivers - subcutaneous infusion care Revenue growth, CAGR • 7.5m patients² and 8% market growth³ Mid-high Pain Management • Morphine and combinations – palliative teens care ~10% of Low IC sales teens Immunoglobulin • 6m patients⁴ and 10% market growth⁵ deficiency • IgG antibodies for
Slide 28: Convatec infusion care growth prospects
Convatec infusion care Market, 2023 – 2028 CAGR growth prospects Durable pumps Durable pumps HSD1 (Diabetes) Patch Patch& &hybrid hybrid DD2 (Diabetes) New therapy areas New therapy areas (Parkinson’s, (Parkinson, Pain, Pain, PID) DD2 Immunoglobulin therapy) Source : Seagrove and Convatec analysis 1
Slide 29: Summary and outlook
• Accelerating organic revenue growth: +6.6% • Operating margin1 expansion: +70 bps • Organic revenue growth of 6.0-7.5% • Constant currency adjusted operating profit margin: ≥20.5% • Strengthening competitive position in attractive chronic care markets • Pivoted to sustainable revenue growth and ex
Slide 30: Appendix
Appendix & , col nvatec
Slide 31: Insulin pump types comparison
Durable Wearable durable Hybrid Disposable pumps pumps patch patch • Strong clinical • Discrete • Discrete • Discrete outcomes • Ability to • No risk of tubing • Fewer steps for • Ability to disconnect disconnect tangling or caught set up • Largest insulin • Broader choice of • Pump part is • Easy t
Slide 32: Global insulin pump users 2022
Ex-USA USA Global insulin pump users 2022 Patient Patient Patient Patient 4y cost of mix co-pay* mix co-pay* therapy* Patch 18% ~ $60 / Pumps N/A ~ $15,000 29% month US ex-US ~45% ~55% Durable ~ $800 pumps 82% N/A ~ $11,000 71% upfront Source : Seagrove SIMM April 2023 32 *Indicative, may vary upon
Slide 33: Bridge to mid-20s operating profit margin
Bridge to mid-20s operating profit margin Mix portfolio — a (nm Mix across categories Mix within categories Commercial excellence Global quality & ops G&A H1 2023 Simplification Mix Inflation Operating Medium term & productivity leverage convatec —: adustea
Slide 34: Finance expense, non-operating items and income tax
• Amortisation of acquired intangibles 123.4 214.1 90.7 • Acquisition and divestiture related costs • Simplification programmes • Discount unwind on contingent consideration Finance expense (45.5) (33.9) 11.6 relating to acquisitions Non-operating (expense) / income (1.9) 0.2 2.1 • Remeasurement of
Slide 35: Building strategic resilience (inventory)
2022 H1 2023 H2 2023 Further resilience and Building strategic resilience Return to efficiency focus operational stocking Inventory* movement: $58m Inventory* movement: $68m DOH to be reduced towards 180 Dec ‘21 DOH: 140 Jun ‘23 DOH: 212 Dec ‘22 DOH: 171 • Expected decline in temporary • Increase in
Slide 36: Restated category sales
(in $m) Advanced Wound Care 306.7 306.7 (1.4) 305.3 Ostomy Care 264.9 35.3 300.2 (2.2) 298.0 Continence Care 276.8 (35.3) 9.3 250.8 (45.0) 205.8 Infusion Care 196.1 (9.3) 186.8 (13.1) 173.7 36