Convatec FY25 Results

About this update from Convatec Group Plc

[{"type":"text","content":"\n \n                                                                                                                                                                                 \n 24 February 2026 \n Preliminary results for the year ended 31 December 2025 \n Strong delivery drives revenue growth, margin progress & mid-teens adjusted EPS growth \n Upgrading medium-term organic growth target to 6-8% \n   \n \n \n \n \n Key financial highlights for year ended 31 Dec \n \n \n Reported \n \n \n Adjusted 5 \n \n \n \n \n FY 25 \n \n \n FY 24 \n \n \n Change \n \n \n FY 25 \n \n \n FY 24 \n \n \n Change \n \n \n CC  \n \n \n \n \n Revenue \n \n \n $2,439m \n \n \n $2,289m \n \n \n 6.5% \n \n \n $2,439m \n \n \n $2,289m \n \n \n 6.5% \n \n \n 5.0% \n \n \n \n \n Operating profit \n \n \n $316m \n \n \n $325m \n \n \n (2.7)% \n \n \n $544m \n \n \n $485m \n \n \n 12.1% \n \n \n 10.2% \n \n \n \n \n Operating margin \n \n \n 13.0% \n \n \n 14.2% \n \n \n (120) bps \n \n \n 22.3% \n \n \n 21.2% \n \n \n 110 bps \n \n \n 100 bps \n \n \n \n \n Diluted EPS \n \n \n 8.6 cents \n \n \n 9.3 cents \n \n \n (7.1)% \n \n \n 17.6 cents \n \n \n 15.2 cents \n \n \n 16.0% \n \n \n   \n \n \n \n \n Free cash flow to equity † \n \n \n   \n \n \n   \n \n \n   \n \n \n $362m \n \n \n $361m \n \n \n 0.1% \n \n \n   \n \n \n \n \n Dividend per share \n \n \n 7.244 cents \n \n \n 6.416 cents \n \n \n 13% \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Percentage movements throughout this release are calculated on actual unrounded numbers. † Free cash flow to equity has been redefined, separating growth capex & certain non-cash items. On a comparable basis to FY24, free cash flow to equity was $219m (2024: $302m; also see page 15). \n FY 25 financial highlights: strong delivery, in line with our guidance \n ·    Organic revenue excluding InnovaMatrix ® up 6.4% (2024: 6.8%); including InnovaMatrix ® 4.8 % 1 ; reported growth 6.5% \n ·    Adjusted operating margin 2 up c.110 bps to 22.3%. Adjusted diluted EPS 2 up 16.0% \n ·    Strong cash generation funding re-investment & returns: $185m capex, $140m dividend & $300m share buyback \n Broad-based organic revenue growth across categories, geographies and products \n ·    AWC 4 : 4.1% 1 ex-InnovaMatrix ® , led by a growing contribution from ConvaFoam TM and further Aquacel ® Ag+ Extra TM growth. InnovaMatrix ®3 revenue of $69m (<3% of Group), down 30% YoY \n ·    OC 4 : 4.5% 1 supported by new patient starts in the US and Europe, Esteem Body TM launch and growth in GEM \n ·    CC 4 : 6.6% 1 driven by volume growth in the US, excellent customer service and growing international sales \n ·    IC 4 : 12.5% 1 with continued strong demand for our infusion sets in both diabetes and non-diabetes treatments \n Innovative pipeline driving new product launches and winning share \n ·    In AWC , ConvaFoam TM delivered excellent growth and is taking segment share. We also achieved EU and UK regulatory approval for ConvaNiox TM , our highly innovative wound dressing powered by nitric oxide, with revenue expected to grow from 2027 \n ·    In OC, Esteem Body TM performed very strongly and is ahead of our plan. We also secured our first US Group Purchasing Organisation (GPO) contract win in over 5 years, plus a further GPO win post-year end \n ·    In CC , our compact catheter GentleCath Air TM for Women is winning segment share, and we are progressing towards launch of the male version in 2026 \n ·    In IC , we achieved our fastest organic growth from new customers and therapies, particularly Neria TM Guard for AbbVie's Parkinson's disease treatment, where we have significantly extended our long-term supply contract \n Confidence in FY26 outlook: another year of double-digit EPS 2 growth \n ·    Group organic revenue growth excluding InnovaMatrix ®3 of 5-7% (unchanged), with growth weighted to H2 \n ·    InnovaMatrix ® revenue of c.$20m 3 , representing a headwind of c. 2% of Group revenue in FY26 and c.3% in H1 26 \n ·    Adjusted Group operating margin 2 ≥23.0%, inclusive of c.20 bps of incremental YoY tariff costs, all in H1 \n ·    Double-digit adjusted EPS 2 growth (unchanged) \n ·    Capex of $200-$230m, including growth capex of $135-165m, as we invest in all categories to meet rising demand \n ·    Strong cash generation, with c.100% equity cash conversion † \n Increasing medium-term organic revenue growth target \n ·    Upgrading annual organic revenue growth target to 6-8% (previously 5-7%) from 2027. This acceleration follows successful implementation of our strategy and will be driven by our rich innovation pipeline \n ·    Mid-20s% (24-26%) adjusted operating margin 2 by 2027 \n ·    Sustainable double-digit adjusted annual EPS 2 growth and double-digit free cash flow to equity CAGR \n Jonny Mason, Chief Executive Officer, commented: \n   \n \"Convatec performed strongly in 2025, demonstrating further resilient growth. W e delivered broad-based organic revenue growth across all categories, supported by new product launches, operating margin expansion, mid-teens growth in adjusted earnings per share and strong cash conversion. \n   \n \"Looking ahead, we are increasing our medium-term revenue growth target to 6-8% from 2027. This acceleration follows the successful implementation of our strategy and is underpinned by our rich innovation pipeline. These results are also testament to our great team of Convatec colleagues who bring our promise of forever caring to life daily for the millions of people around the world who rely on our trusted medical solutions.\" \n 2025 financial summary \n ·    Adjusted operating profit 2 up 12.1% to $544m. Reported operating profit down 2.7% to $316m, including a $72m impairment of the Triad intangible asset given the InnovaMatrix ® CMS rate change (page 4) \n ·    Adjusted operating margin 2 of 22.3%, up c.110 bps YoY. Reported operating margin of 13.0%, down 120 bps YoY \n ·    Adjusted diluted EPS 2 increased 16.0% to 17.6 cents. Net finance costs decreased $10m YoY to $68m given lower average net debt; adjusted tax rate unchanged at 24.0%. Reported diluted EPS 8.6 cents (2024: 9.3 cents) \n ·    Record investment to support future growth, with growth capex of $121m (2024: $59m) and operational capex of $64m (2024: $63m) (see page 3) \n ·    Free cash flow to equity 5 before growth capex † of $362m (2024: $361m), representing equity cash conversion 5 of 101% (2024: 116%). Equity cash conversion on a comparable basis to the prior year was 61% (2024: 97%) \n ·    Secured investment grade status with all three large credit agencies, extended our financing maturity with new $500m ten-year senior unsecured note \n ·    Returned $300m to shareholders via share repurchases \n ·    Net debt of $1,330m (2024: $1,058m), representing an adjusted EBITDA ratio of 2.0x (2024: 1.8x), in line with target \n ·    As a sign of confidence in our outlook and strategy, the Board recommends a final dividend of 5.367 cents, resulting in a full year dividend of 7.244 cents, an increase of 13%. The payout ratio of 40% (2024: 42%) of adjusted net profit is in the middle our target range of 35-45%  \n   \n Investor and analyst presentation \n The results presentation will be held at 09:00hrs (UK time) today. The event will be simultaneously webcast and the link can be found here . The full text of this announcement and the presentation for the analysts and investors meeting can be found on the 'Results centre' page of the Convatec Investor Relations website (link here) . \n Scheduled events \n \n \n \n \n Convatec Capital Markets Day 2026 \n \n \n 9 April 2026 \n \n \n \n \n AGM & trading update for the 4 months ending 30 April 2026 \n \n \n 21 May 2026 \n \n \n \n \n Half-year results for the six months ending 30 June 2026 \n \n \n 4 August 2026 \n \n \n \n \n   \n Dividend calendar \n \n \n \n \n Ex-dividend \n \n \n 16 April 2026 \n \n \n Payment date \n \n \n 28 May 2026 \n \n \n \n \n Record date \n \n \n 17 April 2026 \n \n \n \n \n \n \n \n \n \n \n About Convatec \n Pioneering trusted medical solutions to improve the lives we touch: Convatec is a global medical products and technologies company, focused on solutions for the management of chronic conditions, with leading positions in Advanced Wound Care, Ostomy Care, Continence Care, and Infusion Care. With over 10,000 colleagues, we provide products and services in around 90 countries, united by a promise to be forever caring. Our solutions provide a range of benefits, from infection prevention, treatment for hard to heal wounds, at-risk skin and ulcerated tissue to supporting debilitating conditions, improved patient outcomes and reduced care costs. Convatec's revenues in 2025 were over $2 billion. The company is a constituent of the FTSE 100 Index (LSE:CTEC) . To learn more please visit http://www.convatecgroup.com \n Contacts \n \n \n \n \n Analysts & Investors \n \n \n David Phillips, Head of Investor Relations \n Sheebani Chothani, Investor Relations Director \n \n \n +44 (0) 7909 324994 \n [email protected] \n \n \n \n \n Media \n \n \n FGS Global             \n \n \n [email protected] \n \n \n \n \n   \n (1) Organic growth is calculated by applying the applicable prior period average exchange rates to the Group's actual performance in the respective period and excluding acquired and disposed/discontinued businesses. Acquisitions and disposals added 20 bps to constant currency growth in 2025, shown on page 5 \n (2) Consistent with prior years, management present adjustments to the reported figures to produce more meaningful measures in monitoring the underlying performance of the business. These are set out in the table on page 12 \n (3) In October 2025, Medicare Administrative Contractors announced a price rate of $127/cm 2 for Skin Substitutes and Tissue-Based Products. As reported at our H1 25 results and November 2025 trading update , we expect this will impact FY26 Group revenue by 2%. As a result of this significant reduction in revenue, and in advance of returning to growth, we have recorded a $72m impairment of the Triad Life Sciences acquisition intangible asset (see Financial Review for further details). See page 4 for more on InnovaMatrix ® . \n (4) AWC is Advanced Wound Care; OC is Ostomy Care; CC is Continence Care and IC is Infusion Care. \n (5) Certain financial measures in this document, including adjusted results, are not prepared in accordance with International Financial Reporting Standards (IFRS). All adjusted measures are reconciled to the most directly comparable measure prepared in accordance with IFRS in the Non-IFRS Financial Information below pages 18 to 23. \n   \n   \n   \n Chief Executive Officer's review - strong delivery, in line with our guidance \n Performance was strong in 2025, evidenced by 6.4% organic revenue growth excluding InnovaMatrix ® (4.8% including InnovaMatrix ® ; reported 6.5% ), adjusted operating margin up c.110 bps to 22.3% and adjusted diluted EPS 5 up 16.0% to 17.6 cents (reported diluted EPS 8.6 cents). G rowth was broad-based across categories, geographies and products. \n   \n In 2025 we sold over 1 billion high-quality consumable products and are among a small number of leaders in the categories in which we operate, and we are market-leading in categories contributing over 60% of Group revenues. There are notable synergies across the Convatec categories in areas such as product and clinical development, automated manufacturing, polymer and biomaterial sciences, adhesive technologies, sales & marketing and shared mid-and-back-office processes. \n   \n Further growth in adjusted operating margin \n Adjusted operating margin 2 increased by 110 bps to 22.3% (22.2% on a constant FX basis; 13.0% reported). This was despite a $30m reduction in InnovaMatrix ® sales (see page 4), and c.$6m incremental tariffs YoY. Margin growth was driven by further simplification and productivity in operations and G&A, pricing and operational leverage. \n   \n Our simplification and productivity initiatives continued to progress well. In Global Quality & Operations, we further increased automation in our facilities and continued to optimise our plant network for scale and efficiency. In commercial areas, our Centres of Excellence (CoE) in Global Marketing & Sales, Pricing and Market Access & Reimbursement, positively supported our delivery across each category. \n   \n We delivered further G&A savings by expanding Convatec Business Services (CBS) beyond Finance, IT and HR activities and CBS will continue to expand in 2026, supported by ongoing adoption of AI and automation. Adjusted G&A 2 was flat YoY at $166m, representing 6.8% of revenue (2024: 7.2%). Overall adjusted operating expenses represented 38.4% of revenue (2024: 39.8%). \n   \n Adjusted operating margin has increased 460 bps since 2021 (+490 bps in constant currency), despite high inflation in 2022/23. We are on track to deliver our medium-term adjusted operating margin 2 target of mid-20s% by 2027. Overall, our resilient business model is highly scalable and is well-positioned to deliver sustainable double-digit annual growth in adjusted EPS 5 . \n   \n Positively executing our capital allocation priorities to accelerate growth \n Our strong cash generation supports both investment for growth and returns to shareholders, consistent with our clear capital allocation priorities. These are: 1) fund organic investment to drive future revenue growth and innovation; 2) pay an annual dividend consistent with 35-45% payout ratio; 3) conduct focused M&A to strengthen competitive offering, and 4) any surplus capital would be available for return to shareholders. Our target net debt to adjusted EBITDA leverage remains 2.0x (2025: 2.0x). \n Having transformed key areas of our production network in recent years, our 2025 focus was on expanding capacity and new product development. We have further categorised capital expenditure . Growth capex develops new products and creates or increases capacity, and in 2025 was $121m (2024: $59m). Operational capex maintains our existing operations as well as improving technology, capability and productivity and in 2025 was $64m (2024: $63m). \n   \n As evidence of our priorities in action, in addition to increased growth capex, we grew our dividend by 13%, paid net earn-outs of $25m in respect of historic M&A and completed a $300m share buyback. \n Given the exciting product pipeline and high demand for our products, we have identified further compelling organic investment opportunities to accelerate growth. We expect total capex in 2026 of $200-$230m, including growth capex of $135-$165m.  We expect operational capex to run at c.2.5% of revenue annually. Growth capex will flex to the opportunities available, consistent with our clear capital allocation framework. \n   \n We are investing across all categories, but particularly in IC where we see significant demand, and our growth is underpinned by long-term contracts. We are also diversifying manufacturing across existing locations, further increasing our resilience. In AWC , we are adding capacity in ConvaFoam TM and investing to underpin three further product launches over the next two years (ConvaNiox TM , Aquacel TM ConvaFiber TM and ConvaVac TM ). In OC, our Esteem Body TM launch is delivering ahead of plan, and we are adding further production capacity while also planning for the launch of Natura ® Body in 2027. In CC , we are investing in the launch of GentleCath Air Pocket™ and GentleCath Air Set™, our new compact catheter products. We expect all these investments will be accretive to Group return on capital. \n   \n Accelerating organic revenue growth to 6-8% from 2027 \n 2025 represented our fifth year of broad-based organic revenue growth within our target 5-7% range (ex- InnovaMatrix ® ) and our fourth year of adjusted operating margin progress. \n   \n We believe our growth is set to accelerate, driven by successful implementation of our strategy, recent product launches and our rich product pipeline. Faster growth will also be supported by higher growth capex. As a result, we are increasing our organic revenue growth target from 5-7% to 6-8%, from 2027.  \n   \n Further information and our plans on how we will deliver faster growth will be provided at our Capital Markets Day on 9 April in London. \n   \n Delivering for our patients, payors and customers \n Our strategy focuses on 1) superior patient outcomes and choice; 2) value for money for payors and 3) outstanding results for healthcare professionals (HCPs). This enables sustainable growth, despite reimbursement dynamics. \n   \n We have the strongest product pipeline in our history, with eight products launched in 2022-2025 and a further eight due to be launched in 2026-27. We have also made significant progress in generating clinical evidence and building market access capability.  \n   \n Update on US reimbursement \n   \n In setting our medium-term guidance of 6-8% annual revenue growth, we assume a certain level of reimbursement dynamics. We also consider the breadth of revenues across categories, geographies and products, our innovation pipeline and new product vitality index. \n   \n Ostomy & Catheters - proposed competitive bidding program \n As previously reported, on 28 November 2025 Centers for Medicare & Medicaid Services (CMS) released a final rule outlining updates for the 2026 Medicare Home Health payment system and the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP). Medicare beneficiaries currently enjoy access to a wide range of personalised catheter and ostomy products, plus significant support and advice. The proposed rule changes could impact the choice and supply available to patients and providers.  CMS will follow an extensive process to implement the changes. \n   \n CMS has stated they are seeking 8-10 large, nationwide suppliers in each of Continence and Ostomy, compared to several thousand suppliers today. Should CMS proceed with CBP, we are well-placed to grow given our leading customer service and loyalty, attractive segment positions and differentiated portfolio. We continue to anticipate a 1-2% reduction in Group sales in the year of implementation, which CMS has indicated will be 2028. \n   \n Changes to biologics sector reimbursement \n On 31 October 2025 , CMS published a decision outlining their revised payment rate of $127.28 per sq cm for skin substitutes with effect from 1 January 2026. This payment rate represented a significant price reduction for Convatec's InnovaMatrix ® product. On 24 December 2025 , CMS further announced that Local Coverage Determinations for skin substitutes had been fully withdrawn. Convatec welcomed this decision, which meant appropriate Medicare patients and their HCPs across the US can continue to benefit from all InnovaMatrix ® products, nationally. \n   \n InnovaMatrix ® is a highly effective product with significant health benefits to patients and HCPs. It has strong user feedback and real-world clinical evidence. Our randomised controlled trials continue to progress towards publication later this year. \n   \n In addition to strong clinical benefits, InnovaMatrix ® has competitive manufacturing costs. We are well positioned to support Medicare patients and their HCPs across the United States with all InnovaMatrix ®  products, which have generated strong user feedback and clinical evidence. We see opportunities to gain volume in 2026, and believe we will deliver long-term, profitable growth from InnovaMatrix ® . \n   \n This CMS decision represents an estimated headwind in 2026 of approximately 2% of Group revenue, and therefore we expect InnovaMatrix ® revenues in FY26 of c.$20m (2025: $69m). As a result of the estimated impact on future forecasts, we have recorded a $72m impairment in respect of the intangible asset identified upon the acquisition of Triad Life Sciences in 2022 (see Financial Review). \n   \n FY26 outlook: confidence in delivering our financial targets \n ·      Reiterating our guidance for double-digit adjusted EPS 2 growth (unchanged) \n ·      Group organic revenue growth excluding InnovaMatrix ®3 of 5-7% (unchanged). We expect revenue growth will be second half weighted as product launches build \n ·      We expect the following category growth: \n o  AWC 4 : mid-single digit growth excluding InnovaMatrix ® . InnovaMatrix ® revenue of c.$20m \n o  OC 4 : mid-single digit growth \n o  CC 4 : mid-single digit growth \n o  IC 4 : high-single digit growth \n ·      Adjusted operating margin of ≥23.0%, including c.20 bps of incremental tariff costs \n ·      We expect H1 26 adjusted operating margin will grow slightly versus H1 25, as the reduction in InnovaMatrix ® revenue and incremental tariff costs impact H1 \n ·      If current spot rates were to hold for the remainder of FY26, the estimated tailwind to FY26 revenue growth would be c.180 bps, while the adjusted operating margin headwind would be c.30 bps \n ·      Adjusted net finance expense of $70-75m (2025: $68m), assuming no material changes in US interest rates \n ·      Adjusted book tax rate of c.24%, with the cash tax rate again lower \n ·      Total capex of $200-$230m (more on page 3). Within this, we expect growth capex of $135-165m \n ·      Opex R&D spend of $100-$110m; cash costs of adjusting items of <$20m \n ·      Working capital growth below revenue growth \n Category review \n Group revenue growth was broad-based across all categories, increasing by 4.8% organic, 6.5% reported and 5.0% on a constant currency basis ( net M&A added c.20 bps). Organic revenue growth ex-Innovamatrix was 6.4%. \n \n \n \n \n \n   \n   \n \n \n 2025 \n $m \n \n \n 2024 \n $m \n \n \n Reported growth / (decline) \n \n \n Foreign exchange impact \n \n \n Constant currency 2  growth / (decline) \n \n \n Net M&A impact \n \n \n Organic 1  growth  \n \n \n \n \n Revenue by Category \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n AWC ex-InnovaMatrix ® \n \n \n 684 \n \n \n 644 \n \n \n 6.2% \n \n \n 1.9% \n \n \n 4.3% \n \n \n 0.2% \n \n \n 4.1% \n \n \n \n \n Ostomy Care \n \n \n 676 \n \n \n 634 \n \n \n 6.6% \n \n \n 1.6% \n \n \n 5.0% \n \n \n 0.5% \n \n \n 4.5% \n \n \n \n \n Continence Care \n \n \n 537 \n \n \n 501 \n \n \n 7.1% \n \n \n 0.3% \n \n \n 6.8% \n \n \n 0.2% \n \n \n 6.6% \n \n \n \n \n Infusion Care \n \n \n 473 \n \n \n 411 \n \n \n 15.1% \n \n \n 2.6% \n \n \n 12.5% \n \n \n - \n \n \n 12.5% \n \n \n \n \n Group revenue excluding IMX  \n \n \n 2,370 \n   \n \n \n 2,190 \n   \n \n \n 8.2% \n   \n \n \n 1.6% \n   \n \n \n 6.6% \n   \n \n \n 0.2% \n \n \n 6.4% \n   \n \n \n \n \n InnovaMatrix ®  revenue \n \n \n 69 \n \n \n 99 \n \n \n (29.7%) \n \n \n - \n \n \n (29.7%) \n \n \n - \n \n \n (29.7%) \n \n \n \n \n Group revenue  \n \n \n 2,439 \n \n \n 2,289 \n \n \n 6.5% \n \n \n 1.5% \n \n \n 5.0% \n \n \n 0.2% \n \n \n 4.8% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Advanced Wound Care   \n Revenue of $753m increased by 1.4% on a reported basis and decreased by 0.4% on an organic basis. Excluding InnovaMatrix ® , AWC organic growth was 4.1% (FY24: 4.2%). As expected, InnovaMatrix ® declined by 30% to $69m given market uncertainty around the now-withdrawn Local Coverage Determinations. As noted on page 4, we expect InnovaMatrix ® revenue of c.$20m in 2026 due to the revised payment rate of $127.28 per sq cm for skin substitutes . \n Growth was driven by good performance in North America and GEM. We saw an excellent contribution from C onvaFoam TM which is taking share in the US and Europe . Aquacel ® Ag+ Extra TM , our leading antimicrobial product, continued to deliver good growth. \n AWC key focus areas are: \n ·    Building on strong positions and extending recent launches to new markets: \n o  Continuing to grow our leading Hydrofiber ® brand Aquacel ® Ag+ Extra TM \n o  Ongoing launch and geographic expansion of ConvaFoam TM , including new capacity \n o  Further enhanced commercial execution and increasing sales per employee \n ·    Continuing to develop new products and the AWC pipeline \n o  Generating clinical evidence from the ongoing European launch of ConvaNiox TM , our groundbreaking nitric oxide dressing, and planning for our launch in the US (see below) \n o  Aquacel TM ConvaFiber TM , our enhanced Hydrofiber ® dressing, approved in the EU & US, launching in H1 26 \n o  ConvaVac TM , our single-use negative pressure wound therapy product, launching in H2 26 \n ·    Positioning InnovaMatrix ® to win in US skin substitutes \n o  Progressing our RCTs, reorganising our sales team and optimising our go-to-market strategy \n o  Gain volumes from high-cost competitors \n o  Building the foundations to deliver growth in 2027 and beyond \n   \n Update on ConvaNiox TM   \n We were delighted to receive regulatory approval in the EU and UK in April 2025 for ConvaNiox TM , which combines advanced dressing technology with multiple modalities including the antimicrobial and antibiofilm power of nitric oxide. ConvaNiox TM delivers a significantly improved healing environment (achieving 60% more DFUs healed and three times faster wound area reduction compared to standard care in an RCT 1 ). We have commenced a limited market release in Europe. Feedback from healthcare professionals is very encouraging and we continue to gather clinical evidence. We will also initiate the US regulatory clearance process in 2026. \n (1) Edmonds ME, et al. Multicenter, randomized controlled, observer-blinded study of a nitric oxide generating treatment in foot ulcers of patients with diabetes-ProNOx1 study. Wound Repair Regen. 2018;26(2):228-237 \n   \n Ostomy Care \n Revenue of $676m grew by 6.6% on a reported basis, by 5.0% in constant currency and 4.5% on an organic basis. \n Regionally, good growth in the US was supported by our Home Services Group (HSG) with a continued increase in patient starts. Growth in Europe increased and GEM was strong. \n Esteem Body TM , our one-piece soft convex product, delivered very strong growth and is ahead of our expectations. Growth was also strong in our Esenta™ a ccessory products, which represented c.20% of OC sales. Growth was slower in Flexi-Seal™, our leading faecal management product, although we are on track to launch our updated Flexi-Seal TM Air product in H1 26. \n We were delighted to secure a place on the Captis Vizient US Group Purchasing Organisation (GPO) contract for ostomy products in November 2025. This was our first ostomy product GPO win in over five years. Additionally, in February 2026 we secured a further GPO win in OC with Premier Inc. and Premier AscenDrive.   \n OC key focus areas are: \n ·    Continuing to progress our innovation pipeline: \n o Continuing to grow and win share with Esteem Body TM \n o Launching Flexi-Seal TM Air, an evolution of our leading faecal management system in the US in H1 26 \n o Developing Natura ® Body, our two-piece soft convex product launching in 2027 \n ·    Further improving commercial execution across the continuum of care (acute, post-acute and community): \n o  Driving US new patient starts through continued close collaboration with HSG and strategic partners \n o  Enhancing patient engagement through Convatec's me+™ programme in key geographies \n o  Increasing interactions with HCPs through our education programmes in partnership with key stakeholders like the US Wound, Ostomy and Continence Nurse Society ® \n   \n Continence Care \n Revenue of $537m grew by 7.1% on a reported basis, by 6.8% in constant currency and 6.6% on an organic basis. \n Performance was driven by US volume growth as we continued to gain share, driven by our leading customer service. This was further supported by faster growth in Convatec-manufactured products, which represented c.59% of revenues, including strong growth in our GentleCath TM brands. Europe and GEM grew strongly from a low base, again adding over 1 percentage point to CC growth, and we are confident of adding at least one point to category growth again in 2026 from outside the US. \n Our compact catheter GentleCath Air TM for Women continued to be well received by HCPs and customers and is taking share . \n CC key focus areas are: \n ·    Rolling out launches to new markets: \n o  Further extending the launch of GentleCath Air TM for Women internationally \n o  Introducing Cure TM products in Europe and GEM \n o  Developing GentleCath Air Pocket TM and GentleCath Air Set™ in 2026-27 \n ·    Further improving commercial execution globally: \n o  Continuing to build and strengthen commercial teams in Europe and GEM \n o  Increase the proportion of Convatec-manufactured products sold in our revenue mix \n o  Providing the best-connected journey and experience for customers, HCPs and payors \n ·    Monitoring the situation around the proposed competitive bidding program outlined on page 4 \n   \n Infusion Care   \n Revenue of $473m grew by 15.1% on a reported basis, and by 12.5% on both a constant currency and organic basis . Growth was driven by further strong demand for Convatec infusion sets in both diabetes and non-diabetes therapies. \n In diabetes, revenue growth was high single-digit as durable insulin pump penetration grew led by increasing adoption of automated insulin delivery and continuing pump innovation. Diversification of our products and customers continued to progress very well, including mylife's YpsoPump, Beta Bionics iLet and Tandem Mobi, plus our Extended Wear Infusion Set with Medtronic's 780G . \n In non-diabetes therapies, revenue growth was high double-digit \n as penetration of our Neria TM Guard infusion sets increased in the treatment of pain management, immunoglobulin deficiency and Parkinson's disease. Our fastest growth was in AbbVie's Parkinson's therapy, now approved in 35 countries, and we have significantly extended our long-term infusion set supply contract . Non-diabetes therapies represented c.15% of IC revenue (2024: c.10%). We are further diversifying customers with two other therapies for the treatment of advanced Parkinson's, and we look forward to supporting new partners with Neria TM Guard infusion sets. \n Subsequent to the year end, on 3 February 2026 we announced that our subsidiary Unomedical Devices, S.A. de C.V (Unomedical) had received a Warning Letter from the FDA, focused on reporting procedures and protocols relating to the quality management system. Unomedical takes these matters very seriously and is actively engaging with the FDA to resolve the matters identified as soon as possible. The letter does not raise concerns relating to product safety or place any restrictions on the production, marketing, manufacturing or distribution of any Unomedical products. We continue to expect our Infusion Care business to grow high single-digit percentage in 2026. \n IC key focus areas are: \n ·    Addressing and resolving the concerns identified in the FDA Warning Letter noted above \n ·    Supporting customer innovation and expansion in diabetes: \n o  Medtronic's 780G extended wear, Tandem Mobi, Beta Bionics iLet and mylife YpsoPump \n o  Increasing penetration of automated insulin delivery instead of multiple daily injections \n ·    Continuing to diversify outside diabetes: \n o  Supporting AbbVie's Parkinson's launch globally and Supernus in the US \n o  Increasing penetration of subcutaneous infusion for other therapies such as pain management \n o  Developing our Neria TM Guard platform to work with other therapies \n ·    Expanding our capacity and operations: \n o  To meet accelerating demand, our IC investments will significantly increase our Inset TM & Neria TM Guard platforms capacity by 2028. A material proportion of this is supported by long-term contracts \n o  Increasing our resilience and diversifying our manufacturing locations  \n   \n   \n FISBE strategy summary: further strong delivery in 2025 \n In its fifth year, our FISBE strategy continued to deliver. \n   \n Focus: we operate across four chronic care categories, with high recurring revenue, across 12 key countries. Revenue growth was strong across these focus areas, supported by new product launches and our deep focus on customers. \n   \n Innovation: we invested c.$103m in R&D opex in 2025. W e have the strongest new product pipeline in our history and continued to strengthen Technology & Innovation capabilities. We have launched eight new products in the last three years and are extending these launches across our focus markets. We are also on track to launch a further eight in 2026-27. Our vitality index continues to demonstrate high levels of innovation. As a reminder, products launched since 2022 include: \n   \n -       ConvaFoam TM in the US and key European markets \n -       ConvaNiox TM in selected European markets, including the UK \n -       Esteem Body TM in the US, Europe and GEM focus markets \n -       Extended Wear Infusion Set in US for the Medtronic 780G pump \n -       GentleCath Air TM for Women in the US and key European markets \n -       Infusion set for the new Beta Bionics iLet Bionic Pancreas system \n -       InnovaMatrix ® in the US and starting to launch in Latin America \n -       Neria TM Guard Infusion set for AbbVie's Parkinson's therapy \n   \n Simplify: further good progress, evidenced by c.110 bps increase in adjusted operating margin. We continued to realise the benefits of the network optimisation completed in 2023-24, with more production capacity at our large Slovakia site. Ongoing investments in automation are also driving improved productivity (also see page 3). \n   \n Build: investments in R&D, capex and clinical knowledge are clear examples of adding capability to Convatec. This includes our long-term R&D US and UK R&D expansion commitment announced in October . In the period we invested $121m of growth capex (2024: $59m). This included a new high-speed line in Infusion Care (due to be in operation from 2027), increased capacity for Esteem Body TM and ConvaFoam TM (both due in 2026) and further packaging automation in AWC. Our Marketing & Sales Centre of Excellence (CoE) launched a new global patient service platform in our me+ TM programme , which marked its tenth anniversary. To coincide, Convatec published a new report revealing that millions of people feel they need to hide their health conditions in plain sight.  \n   \n Execute: our Strategic Pricing CoE, in collaboration with categories, supported the delivery of 30 bps improvement in pricing, included in our gross margin. Our M arket Access & Reimbursement CoE continued to support our existing brands and new product pipeline. In cl inical evidence, we made significant progress across all categories, including in our ongoing InnovaMatrix ® Randomised Controlled Trials (RCTs), which we are on track to publish in 2026. \n We are committed to executing responsibly to create value. In line with our goal to achieve net zero by 2045, we reduced Scope 1 and Scope 2 greenhouse gas emissions by 6.9% in 2025. We continued to build an inclusive culture, achieving a top decile employee engagement score. In 2025, over 210,000 HCPs and patients participated in Convatec's educational programmes, and we supported Partners In Health who reached over 250,000 people living with chronic conditions in underserved communities. \n \n \n   \n   \n Principal risks \n The Board reviews and agrees our principal risks on a bi-annual basis, taking account of our risk appetite together with our evolving strategy, current business environment and any emerging risks that could impact the business. Our system of risk management and internal controls continues to operate effectively, and updates to the principal risks and mitigation plans are made as required in response to changes in our risk landscape. Details of our enterprise risk management framework are set out in the Group's 2025 Annual Report and Accounts to be published in early March 2026. \n The Board has reviewed the principal risks as at 31 December 2025. The principal risks have been assessed against the context of the global economic pressures that are impacting all businesses at present and the wider uncertain geopolitical climate. Our principal risks are set out below and listed in order of their potential impact on our ability to successfully deliver on our strategy: \n   \n \n \n \n \n 1.     Operational Resilience & Quality; \n \n \n 5.     Innovation & Regulatory; \n \n \n \n \n 2.     Customer & Markets; \n \n \n 6.     Legal, Compliance & Privacy; \n \n \n \n \n 3.     Cyber & Information Security; \n \n \n 7.     People; and, \n \n \n \n \n 4.     Political & Economic Environment; \n \n \n 8.     Environment & Communities \n \n \n \n \n   \n We continue to monitor and manage all principal risks to ensure they are appropriately mitigated, and in 2025, we have elevated the following principal risks: \n ·      Operational Resilience & Quality - we continue to invest in manufacturing resilience and production capacity improvements, enhancing third-party partnerships and improving our quality management procedures and systems; and \n ·      Customer & Markets risk - global macroeconomic factors continue to impose financial spending constraints impacting healthcare pricing, reimbursement models and market growth. \n   \n In addition, we are closely monitoring the impact of global trade tensions and the geopolitical environment on our Political & Economic Environment risk. \n   \n The Board assesses the overall risk profile of the Group to ensure it is within our risk appetite. In making this assessment the Board considered the impact of the broader risk landscape including inflation and interest rates, supply chain pressures, the volatile geopolitical environment and ongoing conflicts on the business and the effectiveness of our controls and mitigation actions. We work to build further resilience in our operations and to ensure that each principal risk remains within our risk appetite. \n   \n Forward Looking Statements \n This document includes certain forward-looking statements with respect to the operations, performance and financial condition of the Group. Forward-looking statements are generally identified by the use of terms such as \"believes\", \"estimates\", \"aims\", \"anticipates\", \"expects\", \"intends\", \"plans\", \"predicts\", \"may\", \"will\", \"could\", \"targets\", continues\", or their negatives or other similar expressio n s. These forward-looking statements include all matters that are not historical facts. \n Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies that are difficult to predict and many of which are outside the Group's control. As such, no assurance can be given that such future results, including guidance provided by the Group, will be achieved. Forward-looking statements are not guarantees of future performance and such uncertainties and contingencies, including the factors set out in the \"Principal Risks\" section of the Strategic Report in our Annual Report and Accounts, could cause the actual results of operations, financial condition and liquidity, and the development of the industry in which the Group operates, to differ materially from the position expressed or implied in the forward-looking statements set out in this document. Past performance of the Group cannot be relied on as a guide to future performance. \n Forward-looking statements are based only on knowledge and information available to the Group at the date of preparation of this document and speak only as at the date of this document. The Group and its directors, officers, employees, agents, affiliates and advisers expressly disclaim any obligations to update any forward-looking statements (except to the extent required by applicable law or regulation). \n   \n   \n   \n   \n Financial review \n   \n Revenue grew by 6.5% on a reported basis and 5.0% on a constant currency basis. Organic revenue growth excluding InnovaMatrix® was 6.4%. \n Adjusted operating profit margin was 22.3%, representing an increase of 110bps over the previous year, driven by further simplification and positive operational leverage. Adjusted operating profit margin has improved by 460bps over the past four years due to productivity initiatives and commercial discipline. \n Adjusted diluted EPS increased by 16.0% to 17.6 cents per share (2024: 15.2 cents per share). Reported diluted EPS was 8.6 cents per share (2024: 9.3 cents per share). Net cash generated from operations improved by 5.1% to $605m (2024: $576m), with free cash flow to equity of $362m consistent with the prior year (2024: $361m). Equity cash conversion was 100.8% (2024: 115.6%). \n For 2026, we expect further expansion of Group adjusted operating profit margin to at least 23.0% and to deliver another year of double-digit growth in adjusted diluted EPS. We are on track to deliver 5.0% -7.0% organic revenue growth excluding InnovaMatrix®, driven by our broadening product portfolio and focused commercial execution.   \n Reported and Adjusted results   \n The Group's financial performance, measured in accordance with IFRS, is set out in the Condensed Consolidated Financial Statements and Notes thereto on pages 24 to 39 and referred to in this Annual Report as \"reported\" measures. \n   \n The commentary in this Financial review includes discussion of the Group's reported results and alternative performance measures (or adjusted measures) (APMs). Management and the Board use APMs as meaningful measures in monitoring the underlying performance of the business. These measures are disclosed in accordance with the ESMA guidelines and are explained and reconciled to the most directly comparable reported measures prepared in accordance with IFRS on pages 18 to 23.   \n   \n Revenue and revenue growth on constant currency and organic bases are non-IFRS financial measures and should not be viewed as replacements of IFRS reported revenue and revenue growth. Constant currency and organic growth are defined in the Glossary to the Annual Report and Accounts. \n   \n All values are rounded to the nearest million ($m) except where otherwise indicated. Percentage movements throughout this report are calculated on actual unrounded numbers. \n   \n Group financial performance   \n \n \n \n \n   \n \n \n Reported \n \n \n Reported \n \n \n Adjusted 1 \n \n \n Adjusted 1 \n \n \n Adjusted @ CC 2 \n \n \n   \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n 2025 \n \n \n 2024 \n \n \n 2025 \n \n \n Change \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n % \n \n \n \n \n Revenue \n \n \n 2,439 \n \n \n 2,289 \n \n \n 2,439 \n \n \n 2,289 \n \n \n 2,404 \n \n \n 5.0% \n \n \n \n \n Gross profit \n \n \n 1,371 \n \n \n 1,284 \n \n \n 1,481 \n \n \n 1,396 \n \n \n   \n \n \n   \n \n \n \n \n Operating profit \n \n \n 316 \n \n \n 325 \n \n \n 544 \n \n \n 485 \n \n \n   \n \n \n   \n \n \n \n \n Operating profit margin % \n \n \n 13.0% \n \n \n 14.2% \n \n \n 22.3% \n \n \n 21.2% \n \n \n   \n \n \n   \n \n \n \n \n Profit before income taxes \n \n \n 230 \n \n \n 246 \n \n \n 471 \n \n \n 411 \n \n \n   \n \n \n   \n \n \n \n \n Net profit \n \n \n 175 \n \n \n 191 \n \n \n 358 \n \n \n 312 \n \n \n   \n \n \n   \n \n \n \n \n Basic   earnings per share  \n (cents) \n \n \n 8.6¢ \n \n \n 9.3¢ \n \n \n 17.7¢ \n \n \n 15.3¢ \n \n \n   \n \n \n   \n \n \n \n \n Diluted   earnings per share  \n (cents) \n \n \n 8.6¢ \n \n \n 9.3¢ \n \n \n 17.6¢ \n \n \n 15.2¢ \n \n \n   \n \n \n   \n \n \n \n \n Dividend per share (cents) \n \n \n 7.244¢ \n \n \n 6.416¢ \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n 1  These non-IFRS financial measures are explained and reconciled to the most directly comparable financial measures prepared in accordance with IFRS on pages 18 to 23.    \n 2  Adjusted 2025 at constant currency is calculated on 2025 adjusted results translated at 2024 actual FX rates.  \n \n Revenue \n   \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n Reported growth \n \n \n Foreign  \n exchange  \n impact \n \n \n Constant currency growth \n \n \n Organic growth \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n % \n \n \n % \n \n \n % \n \n \n % \n \n \n \n \n Advanced Wound Care ex-InnovaMatrix \n \n \n 684 \n \n \n 644 \n \n \n 6.2% \n \n \n 1.9% \n \n \n 4.3% \n \n \n 4.1% \n \n \n \n \n Ostomy Care  \n \n \n 676 \n \n \n 634 \n \n \n 6.6% \n \n \n 1.6% \n \n \n 5.0% \n \n \n 4.5% \n \n \n \n \n Continence Care  \n \n \n 537 \n \n \n 501 \n \n \n 7.1% \n \n \n 0.3% \n \n \n 6.8% \n \n \n 6.6% \n \n \n \n \n Infusion Care  \n \n \n 473 \n \n \n 411 \n \n \n 15.1% \n \n \n 2.6% \n \n \n 12.5% \n \n \n 12.5% \n \n \n \n \n Group revenue ex-InnovaMatrix \n \n \n 2,370 \n \n \n 2,190 \n \n \n 8.2% \n \n \n 1.6% \n \n \n 6.6% \n \n \n 6.4% \n \n \n \n \n InnovaMatrix revenue \n \n \n 69 \n \n \n 99 \n \n \n (29.7)% \n \n \n -  \n \n \n (29.7)% \n \n \n (29.7)% \n \n \n \n \n Group revenue \n \n \n 2,439 \n \n \n 2,289 \n \n \n 6.5% \n \n \n 1.5% \n \n \n 5.0% \n \n \n 4.8% \n \n \n \n \n Group revenue for 2025 of $2,439m (2024: $2,289m) increased 6.5% year-on-year on a reported basis and 5.0% on a constant currency basis. \n   \n Adjusting for foreign exchange and acquisition and divestiture-related activities, Group revenue grew by 4.8% on an organic basis. Excluding InnovaMatrix®, Group organic revenue growth was 6.4% and driven by broad-based revenue growth across all categories. For more details about category revenue performance, refer to the Operational reviews on pages 5 to 7.  \n   \n Net profit \n   \n A djusted gross profit increased by 6.1% to $1,481m ( 2024 : $1,396m) whilst adjusted gross profit margin decreased by 27bps to 60.7% (2024: 61.0%). The Group delivered productivity and pricing improvements of 130bps and 30 bps respectively, which were more than offset by the impact of inflationary pressures of 110 bps and product mix headwinds of 80bps. On a reported basis, gross profit increased by 6.8% to $1,371m ( 2024 : $1,284m), with a reported gross margin of 56.2% (2024: 56.1%). \n   \n Whilst adjusted operating expenses increased by $26m or 2.9% to $937m (2024: $911m), this was significantly below revenue growth and has fallen as a percentage of revenue to 38.4% (2024: 39.8%). \n   \n The increase in adjusted selling and distribution (S&D) expenses of $24m to $668m (2024: $644m) was due to higher investment in the sales force associated with growing the business. Reported S&D increased by $23m to $668m ( 2024 : $645m). Adjusted R&D of $103m (2024: $102m) remained consistent year-on-year and, combined with an increase in R&D capital expenditure, reflected the ongoing investment in our future pipeline of new products. On a reported basis, R&D spend was in line with the prior year at $111m ( 2024 : $112m). \n   \n Adjusted G&A of $166m was similar to the previous year (2024: $165m). Adjusted G&A as a percentage of revenue fell to 6.8% ( 2024 : 7.2%) - we have now successfully achieved the target set out at the 2022 Capital Markets Day. Over the past four years, adjusted G&A expenses as a percentage of revenue has fallen by 490bps. We have continued to standardise technology and processes, build internal expertise and therefore reduce external third party spend and expand the scope of our Convatec Business Services (CBS). Reported G&A increased by 5.4% to $206m ( 2024 : $195m) due to adjusting items which are explained in the Alternative Performance Measures section of this report. \n   \n Reported other operating expenses increased by $63m to $70m (2024: $7m). During the year, an impairment charge of $72m was recognised in respect of an intangible asset - refer to commentary in the Alternative Performance Measures section of this report. \n   \n A reconciliation between reported and adjusted operating expenses is provided in the Non-IFRS financial information section on pages 18 to 23. \n   \n The Group delivered adjusted operating profit of $544m ( 2024 : $485m), representing an adjusted operating profit margin of 22.3% ( 2024 : 21.2%). Reported operating profit decreased by 2.7% to $316m ( 2024 : $325m). Adjusted net profit increased by 14.8% to $358m ( 2024 : $312m), with the increase in adjusted income tax expense (explained below) more than offset by the increase in adjusted operating profit as explained above. Reported net profit decreased by 8.1% to $175m (2024: $191m). Adjusting items are explained on pages 11 and 12. \n   \n Taxation \n \n \n \n \n   \n \n \n Year ended 31 December \n \n \n \n \n   \n \n \n 2025 \n \n \n   \n \n \n 2024 \n \n \n   \n \n \n \n \n   \n \n \n $m \n \n \n Effective tax rate \n \n \n $m \n \n \n Effective tax rate \n \n \n \n \n Reported income tax expense \n \n \n (55) \n \n \n 24.0% \n \n \n (55) \n \n \n 22.5% \n \n \n \n \n Tax effect of adjustments \n \n \n (58) \n \n \n   \n \n \n (41) \n \n \n   \n \n \n \n \n Other discrete tax items \n \n \n - \n \n \n   \n \n \n (3) \n \n \n   \n \n \n \n \n Adjusted income tax expense \n \n \n (113) \n \n \n 24.0% \n \n \n (99) \n \n \n 24.0% \n \n \n \n \n The Group's reported income tax expense was $55m (2024: $55m). The increase in the reported effective tax rate was due to the 2024 rate benefit of a one-off release of a tax liability relating to business restructuring.  \n   \n The adjusted effective tax rate of 24.0% for the year ended 31 December 2025 (2024: 24.0% ) was after reflecting the tax impact of items treated as adjusting items (further details can be found in the Reconciliation of reported earnings to adjusted earnings table in the Non-IFRS financial information section on page 20). The adjusted effective tax rate was stable due to an increase in uncertain tax positions being offset by an increase in tax incentive benefits. \n   \n Earnings per share (EPS) \n   \n Adjusted basic EPS for 2025 was 17.7 cents (2024: 15.3 cents) and adjusted diluted EPS was 17.6 cents (2024: 15.2 cents), representing increases of 16.1% and 16.0% respectively. \n   \n Basic reported EPS was 8.6 cents (2024:  9.3 cents), reflecting the reported net profit divided by the basic weighted average number of ordinary shares of 2,024,809,094 (2024: 2,047,643,498). \n   \n   \n Alternative Performance Measures (APMs) \n   \n Management and the Board make adjustments to the reported figures, where appropriate, to produce more meaningful measures in monitoring the underlying performance of the business - APMs. These are also referred to as adjusting items in the Annual Report and Accounts. The Group's APM policy can be found in the Non-IFRS financial information section on pages 18 and 19 and the following adjustments were made to derive adjusted operating profit and adjusted net profit. \n   \n \n \n \n \n   \n \n \n Operating profit \n $m \n \n \n Fair value movement of contingent consideration \n $m \n \n \n Non-operating income/(expense) \n $m \n \n \n Income tax \n $m \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n 2025 \n \n \n 2024 \n \n \n 2025 \n \n \n 2024 \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n Reported \n \n \n 316 \n \n \n 325 \n \n \n (10) \n \n \n (5) \n \n \n (8) \n \n \n 4 \n \n \n (55) \n \n \n (55) \n \n \n \n \n Amortisation of acquired intangibles \n \n \n 134 \n \n \n 136 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (32) \n \n \n (34) \n \n \n \n \n Acquisitions and divestitures \n \n \n 4 \n \n \n 2 \n \n \n 10 \n \n \n 5 \n \n \n 3 \n \n \n - \n \n \n (4) \n \n \n (1) \n \n \n \n \n Impairment of assets \n \n \n 72 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (17) \n \n \n - \n \n \n \n \n Termination benefits and related costs \n \n \n 5 \n \n \n 6 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1) \n \n \n (2) \n \n \n \n \n Other adjusting items \n \n \n 13 \n \n \n 16 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (4) \n \n \n (4) \n \n \n \n \n Other discrete tax items \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (3) \n \n \n \n \n Adjusted \n \n \n 544 \n \n \n 485 \n \n \n - \n \n \n - \n \n \n (5) \n \n \n 4 \n \n \n (113) \n \n \n (99) \n \n \n \n \n Adjustments made to derive adjusted operating profit in 2025 included the amortisation of acquired intangibles of $134m (2024: $136m), of which $95m (2024: $94m) resulted from intangible assets arising from the spin-out from Bristol-Myers Squibb in 2008 and which will be fully amortised by mid-2026. \n   \n Acquisition and divestiture-related costs of $4m within operating profit and $3m within non-operating expenses consisted of costs directly related to potential and actual transactions which have been executed or aborted and the write-off of a receivable that arose as a result of the hospital care exit in 2022. \n   \n Termination costs of $5m were in respect of one-off, fundamental transformation projects in line with our simplification and productivity initiatives. Other adjusting items reduced by $3m to $13m and included payments made to Karim Bitar's estate following his death in service and the settlement of a historic legal claim. The fair value movement of contingent consideration largely related to the unwinding of discount. \n   \n On 31 October 2025, the Centers for Medicare & Medicaid Services (CMS) published a decision outlining their revised payment rate of c.$127 per sq cm for skin substitutes with effect from 1 January 2026. This payment rate impacted Convatec's InnovaMatrix® product, which is a leading porcine placental-derived extra-cellular matrix for the treatment of chronic, surgical and trauma wounds. Management deemed that this constituted an indicator of impairment in respect of the InnovaMatrix ® product-related intangible asset held on the balance sheet. Using management's best estimate of future cash flow forecasts, a non-cash impairment charge of $72m was recognised. This has been treated as an adjusting item in line with our APM policy. \n   \n Only $12m of the total $228m of adjusting items recognised within operating profit (excluding tax impact) was cash-impacting in 2025. There was also a cash outflow of $4m (2024: $11m) during the year in respect of adjusting items recorded as accruals in the prior year. In 2026, the total cash impact of adjusting items to be recognised within operating profit (including amounts accrued in previous years), is currently expected to be similar to 2024. For further information on Non-IFRS financial information, see pages 18 to 23. \n   \n The Board, through the Audit and Risk Committee, annually reviews the Group's APM policy to ensure that it remains appropriate, aligns with regulatory guidance and reflects the way in which the performance of the Group is managed. \n   \n Dividends and shareholder returns \n   \n Dividends are distributed based on the realised distributable reserves of the Company, which are primarily derived from the dividends received from subsidiary companies and are not based directly on the Group's consolidated retained earnings. The realised distributable reserves of the Company at 31 December 2025 were $1,811 m (2024: $1,475 m). \n   \n The Board declared an interim dividend of 1.877 cents per share in July 2025 and has recommended a final 2025 dividend of 5.367 cents per share, which would bring the full-year dividend to 7.244 cents per share (2024: 6.416 cents per share), an increase of 13% and a pay-out ratio when compared to adjusted net profit of 40% (2024: 42%). Our stated policy is a pay-out ratio of 35% to 45% of adjusted net profit but this is interpreted flexibly over time to reflect the underlying performance of the business and the Board's confidence in its future growth prospects. \n   \n The Group announced a share buyback programme on 20 August 2025 to return up to $300m of surplus capital to shareholders. The buyback was funded from available cash reserves. This was completed in December 2025. 94,937,530 ordinary shares were bought back at a cost (inclusive of transaction costs) of £226m ($301m) and were all held as treasury shares at the year end. \n   \n Cash Flow and Net Debt \n \n \n \n \n   \n \n \n Adjusted \n \n \n Adjusted \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Adjusted EBITDA 1 \n \n \n 661 \n \n \n 591 \n \n \n \n \n Working capital (outflow)/inflow 1,6 \n \n \n (40) \n \n \n 7 \n \n \n \n \n Adjusting items 2 \n \n \n (16) \n \n \n (22) \n \n \n \n \n Operational capex 3 \n \n \n (64) \n \n \n (63) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Operating cash flow 1 \n \n \n 541 \n \n \n 513 \n \n \n \n \n Tax paid \n \n \n (54) \n \n \n (52) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Free cash flow to capital 1 \n \n \n 487 \n \n \n 461 \n \n \n \n \n Net interest paid \n \n \n (79) \n \n \n (79) \n \n \n \n \n Lease payments \n \n \n (27) \n \n \n (25) \n \n \n \n \n Net cash inflow from lease incentives \n \n \n 13 \n \n \n - \n \n \n \n \n Realised loss on settlement of FX derivatives relating to financing \n \n \n (32) \n \n \n - \n \n \n \n \n Other 4 \n \n \n - \n \n \n 4 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Free cash flow to equity 1 \n \n \n 362 \n \n \n 361 \n \n \n \n \n Growth capex 3 \n \n \n (121) \n \n \n (59) \n \n \n \n \n Dividends \n \n \n (140) \n \n \n (130) \n \n \n \n \n Acquisitions and divestitures 5 \n \n \n (25) \n \n \n (90) \n \n \n \n \n Purchase of own shares 7 \n \n \n (326) \n \n \n (11) \n \n \n \n \n Non-cash movements 4 \n \n \n (22) \n \n \n - \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Movement in net debt \n \n \n (272) \n \n \n 71 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Net debt 1  at 1 January (excluding lease liabilities) \n \n \n (1,058) \n \n \n (1,129) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Net debt 1 at 31 December (excluding lease liabilities) \n \n \n (1,330) \n \n \n (1,058) \n \n \n \n \n 1.        These non-IFRS financial measures are explained and reconciled to the most directly comparable financial measure prepared in accordance with IFRS in the Non-IFRS financial information section on pages 18 to 23. \n 2.        Details of adjusting items are provided in the adjusting items cash movement table in the Non-IFRS financial information section on page 23. Of the total cash outflow of $16m during the year, $4m related to accruals recorded in the prior year. \n 3.        Operational capex is cash spent to maintain our existing operations/output. Growth capex develops new products and creates or increases capacity. \n 4.        In 2025, non-cash movements of $22m have been presented below free cash flow to equity and consisted of net FX loss on cash and borrowings of $19m and amortisation of deferred financing fees of 3m. The prior year comparatives have not been restated on the basis they are not material. \n 5.        Earnout payments of $27m were made in respect of past acquisitions. This was offset by an inflow of $1m following the finalisation of the working capital adjustment in respect of the 2024 acquisition of Livramedom and $1m of proceeds arising from divestiture-related activities related to the hospital care exit in 2022. \n 6.        Excluding the impact of adjusting items of $16m (2024: $22m) on adjusted EBITDA and adjusted working capital movements, EBITDA was $640m (2024: $574m) and the reported working capital movement was a $33m outflow (2024: $7m outflow). \n   \n Adjusted EBITDA \n   \n Adjusted EBITDA increased by $70m to $661m (2024: $591 m) , with the increase in adjusted gross profit of $85m and depreciation & amortisation charges of $6m more than offsetting the increases in adjusted operating expenses of $26m. These are explained in the adjusted net profit commentary section. A reconciliation of adjusted EBITDA to the closest IFRS measure is provided in the Non-IFRS financial information section on pages 18 to 23. \n   \n Free cash flow to capital \n   \n The calculation of the cash flow measures 'Operating cash flow' and 'Free cash flow to capital' have been redefined to exclude growth capex (as defined in footnote 3 of the table above), and realised losses on settlement of certain derivatives. Management considers that these changes result in improved definition and calculation of operating cash flow and free cash flow to capital. The comparative has been restated for the impact of growth capex, but not for the exclusion of realised losses on settlement of certain derivatives on the basis that this balance is not material. \n   \n Free cash flow to capital increased by $26m to $487m (2024: $461 m) , largely driven by the increase in adjusted EBITDA of $70m being partially offset by higher year-on-year working capital movements of $ 47 m and $6m lower cash impact from adjusting items.  \n   \n The Group invested $185m ( 2024 : $122m) in growth and operational capex to increase manufacturing capacity and automation, develop new products, improve information technology and digital tools and maintain current operations. Of this, $121m ( 2024 : $59m) related to growth capex, which has been excluded from free cash flow to capital. \n   \n The adjusted working capital outflow of $40m (2024: $7m inflow) was due to a combination of higher inventory levels of $39m and an increase in trade and other receivables of $58m being partially offset by an increase in trade and other payables of $59m (excluding capital accruals). Inventory levels have increased primarily due to forecast demand and the strategic build of inventory. The increase in trade and other receivables is largely due to a combination of higher sales and timing of receipts whilst the increase in trade and other payables is primarily driven by the timing of payments. \n   \n Free cash flow to capital is reconciled to its nearest IFRS measure in the Non-IFRS financial information section - see page 22. The nearest IFRS measure is net cash generated from operations, which has increased by $29m to $605m ( 2024 : $576m) and is derived from reported net profit of $175m ( 2024 : $191m). \n   \n Operating cash conversion was 99.4% ( 2024 : 105.6%). The reduction in the ratio primarily reflected a higher working capital outflow. Refer to page 21 in the Non-IFRS financial information section. \n   \n   \n Free cash flow to equity \n The calculation of the cash flow measure 'Free cash flow to equity' has been redefined to exclude growth capex, as well as non-cash items such as net foreign exchange gains or losses on cash and borrowings and the amortisation of financing fees. Management considers that these changes result in improved definition and calculation of free cash flow to equity. The comparative has been restated for the impact of growth capex, but not for the exclusion of non-cash items on the basis that this balance is not material. \n   \n Free cash flow to equity slightly increased by $1m to $362 m (2024: $361 m) . This was driven by an increase in free cash flow to capital of $26m as explained above, largely offset by realised losses on foreign exchange derivatives of $32m. On a comparable basis to FY24, free cash flow to equity was $219m (2024: $302m).  \n   \n Free cash flow to equity is reconciled to its nearest IFRS measure in the Non-IFRS financial information section - see page 22. \n   \n Equity cash conversion was 100.8% ( 2024 : 115.6%) - refer to page 21 in the Non-IFRS financial information section. \n   \n Borrowings and net debt \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Senior notes 1 \n \n \n (990) \n \n \n (495) \n \n \n \n \n Credit facilities drawn 1 \n \n \n (408) \n \n \n (628) \n \n \n \n \n Lease liabilities \n \n \n (120) \n \n \n (79) \n \n \n \n \n Total borrowings including lease liabilities \n \n \n (1,518) \n \n \n (1,202) \n \n \n \n \n Cash and cash equivalents \n \n \n 68 \n \n \n 65 \n \n \n \n \n Total borrowings including lease liabilities, net of cash \n \n \n (1,450) \n \n \n (1,137) \n \n \n \n \n Net debt 2 excluding lease liabilities \n \n \n (1,330) \n \n \n (1,058) \n \n \n \n \n Net debt 2 excluding leases/adjusted EBITDA 2 \n \n \n 2.0 \n \n \n 1.8 \n \n \n \n \n 1.        Senior notes and credit facilities are stated net of unamortised financing fees of $10m and $3m respectively (2024: $5m and $6m). \n 2.        These non-IFRS measures are explained and reconciled to the most directly comparable financial measures prepared in accordance with IFRS on pages 18 to 23. \n   \n As at 31 December 2025, the Group's cash and cash equivalents were $68m (2024: $65m) and total borrowings (net of deferred financing fees) were $1,398m (2024: $1,123m). \n   \n During the year, the Group completed the issuance of senior unsecured notes of $500m with a tenor of 10 years and at a coupon of 5.3%. This further diversifies our capital structure, whilst expanding our debt headroom and extending our debt maturity profile significantly. The proceeds were used to fully repay the $250m term loan due to mature in 2027 and pay down a portion of drawn debt on the revolving credit facility. \n   \n The Group's banking facility is a multicurrency revolving credit facility of $950m maturing in 2028. The Group's senior unsecured notes of $500m each, issued in October 2021 and 2025, mature in October 2029 and 2035 respectively. \n   \n As at 31 December 2025, $539m of the multicurrency revolving credit facility remained undrawn. \n   \n The Group ended the period with total borrowings, including IFRS 16 lease liabilities, of $1,518m (2024: $1,202m). Offsetting cash of $68m (2024: $65m) and excluding lease liabilities, net debt was $1,330m (2024: $1,058m), equivalent to 2.0x adjusted EBITDA (2024: 1.8x adjusted EBITDA). We continue to target leverage of 2x over time but are comfortable to temporarily go above or below this, dependent on M&A and other investment opportunities. \n   \n For further information on borrowings see Note 9 - Borrowings to the Condensed Consolidated Financial Statements. \n   \n Covenants \n   \n At 31 December 2025, the Group was in compliance with all financial and non-financial covenants associated with the Group's outstanding debt. \n   \n The Group has two financial covenants on its banking facilities, being net leverage and interest cover, each of which is defined, where applicable, within the borrowing documentation. Refer to Note 9 - Borrowings for details of covenants in place on the senior notes. The table below summarises the Group's most restrictive covenant thresholds and position as at 31 December 2025 and 2024. \n   \n   \n \n \n \n \n   \n \n \n Maximum covenant net leverage 1 \n \n \n Actual covenant net leverage 1 \n \n \n Minimum covenant interest cover 1 \n \n \n Actual covenant interest cover 1 \n \n \n \n \n 31 December 2025 \n \n \n 3.50x \n \n \n 2.2x \n \n \n 3.5x \n \n \n 9.4x \n \n \n \n \n 31 December 2024 \n \n \n 3.50x \n \n \n 1.9x \n \n \n 3.5x \n \n \n 7.6x \n \n \n \n \n 1.Interest cover is covenant-adjusted EBITDA/interest expense (net) and net leverage is net debt/covenant adjusted EBITDA in accordance with the definitions contained in underlying borrowing documentation and are not the same as the definitions of these measures presented in the Non-IFRS financial information section on pages 18 to 23 and applied in the commentary in this Financial review. \n   \n Group financial position \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n Change \n \n \n \n \n At 31 December \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n \n \n Intangible assets and goodwill \n \n \n 1,996 \n \n \n 2,096 \n \n \n (100) \n \n \n \n \n Other non-current assets \n \n \n 845 \n \n \n 626 \n \n \n 219 \n \n \n \n \n Cash and cash equivalents \n \n \n 68 \n \n \n 65 \n \n \n 3 \n \n \n \n \n Other current assets \n \n \n 872 \n \n \n 728 \n \n \n 144 \n \n \n \n \n Total assets \n \n \n 3,781 \n \n \n 3,515 \n \n \n 266 \n \n \n \n \n Current liabilities \n \n \n (616) \n \n \n (511) \n \n \n (105) \n \n \n \n \n Non-current liabilities \n \n \n (1,647) \n \n \n (1,315) \n \n \n (332) \n \n \n \n \n Equity \n \n \n (1,518) \n \n \n (1,689) \n \n \n 171 \n \n \n \n \n Total equity and liabilities \n \n \n (3,781) \n \n \n (3,515) \n \n \n (266) \n \n \n \n \n \n Intangible assets and goodwill \n Intangible assets and goodwill decreased by $100m to $1,996m ( 2024 : $2,096m). An increase in goodwill of $60m, driven by foreign exchange movements, was more than offset by a reduction in intangible assets of $160m. This was primarily driven by the in-year amortisation of intangible assets of $155m and a $72m non-cash impairment in respect of the InnovaMatrix® platform (see commentary in the Alternative Performance Measures section of this report), partially offset by intangible asset additions of $51m. \n   \n No other triggers of impairment were identified during 2025. \n   \n Other non-current assets \n Other non-current assets, including property, plant and equipment (PP&E), right-of-use assets, investment in financial assets, deferred tax assets, restricted cash and other assets increased by $219m to $845m ( 2024 : $626m), largely due to a net increase of $170m in PP&E (reflecting the continued investment in our manufacturing facilities to maintain our existing operations and increase capacity for existing and new product lines) and an increase in deferred tax assets of $36m due to an increase in UK carry forward losses from increased patent box benefit and the reduction in offsetting deferred tax liabilities on intangible assets from amortisation. \n   \n Current assets excluding cash and cash equivalents \n Current assets, excluding cash and cash equivalents, increased by $144m to $872m (2024: $728m), primarily driven by increases in inventory of $67m and trade and other receivables of $84m. During the year, the USD weakened significantly - excluding foreign exchange impacts, inventory increased by $39m and trade and other receivables increased by $58m. These are explained in the free cash flow to capital commentary. \n Current liabilities \n Current liabilities increased by $105m to $616m (2024: $511m), largely due to increases in trade and other payables of $111m and current tax liabilities of $23m, offset by a decrease in contingent consideration of $21m. Excluding foreign exchange impacts and including capital accruals, trade and other payables increased by $89m (driven by timing of payments and increase in capital investments). The amount in working capital excludes capital accruals. \n   \n Non-current liabilities \n Non-current liabilities increased by $332m to $1,647m (2024: $1,315m). This was primarily due to an increase in non-current borrowings of $275m, deferred tax liabilities of $6m and lease liabilities of $37m (in line with our announcement during the year of investing in a new state-of-the-art R&D hub in Manchester that is set to open in 2027). \n   \n Going concern \n   \n In assessing going concern, the Directors considered available cash resources, access to committed undrawn funding, financial performance and forecast performance, including continued implementation of our strategy, together with the Group's financial covenant compliance requirements and principal risks and uncertainties. \n   \n The same severe but plausible downside scenarios utilised in the preparation of the Viability statement were also applied in assessing going concern. Under each scenario, the Group retained significant liquidity and covenant headroom throughout the going concern period, i.e. 12 months from the date of this report. \n   \n A reverse stress test, before corporate level mitigations, was also considered to demonstrate what reduction in revenue would be required in the next 12 months to create conditions which may lead to a potential covenant breach. The outcome of this test was considered implausible given the Group's strong global market position, diversified portfolio of products and the corporate mitigations available to the Board and management. \n   \n Accordingly, the Directors continue to adopt the going concern basis in preparing the Consolidated Financial Statements. \n Non-IFRS financial information \n Non-IFRS financial information or alternative performance measures (APMs) are those measures used by the Board and management on a day-to-day basis in their assessment of profit and performance and comparison between periods. The adjustments applied to IFRS measures reflect the effect of certain cash and non-cash items that the Board believes distort the understanding of the quality of earnings and cashflows as, by their size or nature, they are not considered part of the core operations of the business. Adjusted measures also form the basis of performance measures for remuneration, e.g. adjusted operating profit. \n It should be noted that the Group's APMs may not be comparable to other similarly titled measures used by other companies and should not be considered in isolation or as a substitute for the equivalent measures calculated and presented in accordance with IFRS (our reported measures). \n In determining whether an item should be presented as an allowable adjustment to IFRS measures, the Group considers items which are significant either because of their size or their nature and arise from events that are not considered part of the core operations of the business. These tend to be one-off events but may still cross more than one accounting period. Recurring items may be considered, particularly in respect of the amortisation of acquisition-related intangible assets. If an item meets at least one of these criteria, the Board, through the Audit and Risk Committee, then exercises judgement as to whether the item should be classified as an allowable adjustment to IFRS performance measures. \n   \n The tax effect of the adjustments is reflected in the adjusted tax expense to remove the tax impact from adjusted net profit and adjusted earnings per share. \n   \n Amortisation of acquisition-related intangible assets \n The Group's strategy is to grow both organically and through acquisition, with acquisitions being targeted to strengthen our position in key geographies and/or business categories or which provide access to new technology. The nature of the businesses acquired includes the acquisition of significant intangible assets, which are required to be amortised.  The Board and management regard the amortisation as a distortion to the quality of earnings and it has no cash implications in the year.  The amortisation also distorts comparability with peer groups where such assets may have been internally generated and, therefore, not reflected on their balance sheet. Amortisation of acquisition-related intangible assets is, by its nature, a recurring adjustment. \n   \n Acquisition-related activities \n Costs directly related to potential and actual strategic transactions which have been executed, aborted or are in-flight are deemed adjusting items. \n   \n Acquisition-related costs relate to deal costs, integration costs and earn-out adjustments, including the discounting impact which are incurred directly as a result of the Group undertaking or pursuing an acquisition. Deal costs are wholly attributable to the deal, including legal fees, due diligence fees, bankers' fees/commissions and other direct costs incurred as a result of the actual or potential transaction. Integration costs are wholly attributable to the integration of the target and based on integration plans presented at the point of acquisition, including the cost of retention of key people where this is in excess of normal compensation, redundancy of target staff and early lease termination payments. \n   \n Adjusted measures in relation to acquisitions also include aborted deal costs. \n   \n   \n Divestiture-related activities \n Divestiture-related activities comprise the gains or losses resulting from disposal or divestment of a business as a result of a sale, major business change or restructuring programme. These include write-down of non-current assets, provisions to recognise inventories at realisable value, provisions for costs of exiting contracts and associated legal fees, and any other directly attributable costs. Any income from the ultimate disposal of a business or subsidiary is included in the gain or loss. \n   \n Adjusted measures in relation to divestitures also include aborted deal costs. \n   \n Impairment of assets \n Impairments, write-offs and gains and losses from defined programmes and where the Group considers the circumstances of such event are not reflective of normal business trading performance or when transactions relate to acquisition-related intangible assets where the amortisation is already excluded from the calculation of adjusted measures. \n   \n Termination benefits and related costs \n Termination benefits and other related costs arise from material, one-time Group-wide initiatives to reduce the ongoing cost base and improve efficiency in the business, including divestitures from non-strategic activities. The Board considers each project individually to determine whether its size and nature warrants separate disclosure. Qualifying items are limited to termination benefits (including retention) without condition of continuing employment in respect of major Group-wide change programmes. Where discrete qualifying items are identified these costs are highlighted and excluded from the calculation of adjusted measures. Due to their nature, these adjusted costs may span more than one year. \n   \n Other adjusting items \n Other adjusting items include items that do not fall within the above categories but qualify as an APM in line with the Group's policy. Whilst non-exhaustive, examples of other adjusting items could include significant historic legal claims outside the normal course of business or one-time initiatives which are part of the Group's strategy to improve productivity in the business and optimise cash flows. The Board considers each item individually to determine whether its size and nature warrants separate disclosure. Qualifying costs are limited to directly attributable costs of the initiatives and any realignment costs. Due to the nature of the initiatives, these adjusted costs may span more than one year. \n   \n Revenue measures \n Revenue growth on a constant currency basis represents reported revenue, as determined under IFRS, and applying the applicable prior period average exchange rates to the Group's actual performance in the respective period. Organic revenue growth is calculated by adjusting this to exclude the impact of acquisitions and divestitures. Organic revenue excluding InnovaMatrix® is presented to reflect our 2025 guidance and to exclude InnovaMatrix® revenues as the outlook was uncertain and is reconciled on page 10. \n   \n Cash flow measures \n Operating cash flow is the net cash generated from operations, as determined under IFRS, less operational capex. Operational capex is cash spent to maintain our existing operations/output. Growth capex develops new products and creates or increases capacity. \n   \n Free cash flow to capital is defined as operating cash flow less tax paid. \n   \n Free cash flow to equity reflects how effectively we are converting the profit we generate into cash (after accounting for working capital, operational capital spend, adjusting items, lease incentives, realised gains or losses on foreign exchange derivatives, tax and interest). Refer to page 22 for details on how these measures are calculated. Net debt and leverage ratio are two other measures used and these are explained on page 23. \n   \n Reconciliation of reported earnings to adjusted earnings for the years ended 31 December 2025 and 2024 \n \n \n \n \n Year ended 31 December 2025 \n \n \n Revenue \n \n \n Gross profit \n \n \n Operating costs \n \n \n Operating profit \n \n \n Finance expense, net \n \n \n Fair value movement of contingent consideration \n \n \n Non-operating expense, net \n \n \n PBT \n \n \n Income tax \n \n \n Net profit \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n \n \n As reported \n \n \n 2,439 \n \n \n 1,371 \n \n \n (1,055) \n \n \n 316 \n \n \n (68) \n \n \n (10) \n \n \n (8) \n \n \n 230 \n \n \n (55) \n \n \n 175 \n \n \n \n \n Amortisation of acquired intangibles \n \n \n – \n \n \n 109 \n \n \n 25 \n \n \n 134 \n \n \n – \n \n \n – \n \n \n – \n \n \n 134 \n \n \n (32) \n \n \n 102 \n \n \n \n \n Acquisitions & divestitures \n \n \n – \n \n \n – \n \n \n 4 \n \n \n 4 \n \n \n – \n \n \n 10 \n \n \n 3 \n \n \n 17 \n \n \n (4) \n \n \n 13 \n \n \n \n \n Impairment of assets \n \n \n – \n \n \n – \n \n \n 72 \n \n \n 72 \n \n \n – \n \n \n – \n \n \n – \n \n \n 72 \n \n \n (17) \n \n \n 55 \n \n \n \n \n Termination benefits and related costs \n \n \n – \n \n \n – \n \n \n 5 \n \n \n 5 \n \n \n – \n \n \n – \n \n \n – \n \n \n 5 \n \n \n (1) \n \n \n 4 \n \n \n \n \n Other adjusting items \n \n \n – \n \n \n 1 \n \n \n 12 \n \n \n 13 \n \n \n – \n \n \n – \n \n \n – \n \n \n 13 \n \n \n (4) \n \n \n 9 \n \n \n \n \n Adjusted \n \n \n 2,439 \n \n \n 1,481 \n \n \n (937) \n \n \n 544 \n \n \n (68) \n \n \n – \n \n \n (5) \n \n \n 471 \n \n \n (113) \n \n \n 358 \n \n \n \n \n Depreciation & Amortisation \n \n \n   \n \n \n   \n \n \n   \n \n \n 91 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Impairment of assets \n \n \n   \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Share-based payments \n \n \n   \n \n \n   \n \n \n   \n \n \n 24 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Adjusted EBITDA \n \n \n   \n \n \n   \n \n \n   \n \n \n 661 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n \n \n Year ended 31 December 2024 \n \n \n Revenue \n \n \n Gross profit \n \n \n Operating costs \n \n \n Operating profit \n \n \n Finance expense, net \n \n \n Fair value movement of contingent consideration \n \n \n Non-operating income, net \n \n \n PBT \n \n \n Income tax \n \n \n Net profit \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n \n \n As reported \n \n \n 2,289 \n \n \n 1,284 \n \n \n (959) \n \n \n 325 \n \n \n (78) \n \n \n (5) \n \n \n 4 \n \n \n 246 \n \n \n (55) \n \n \n 191 \n \n \n \n \n Amortisation of acquired intangibles \n \n \n – \n \n \n 109 \n \n \n 27 \n \n \n 136 \n \n \n – \n \n \n – \n \n \n – \n \n \n 136 \n \n \n (34) \n \n \n 102 \n \n \n \n \n Acquisitions & divestitures \n \n \n – \n \n \n (1) \n \n \n 3 \n \n \n 2 \n \n \n – \n \n \n 5 \n \n \n – \n \n \n 7 \n \n \n (1) \n \n \n 6 \n \n \n \n \n Termination benefits and related costs \n \n \n – \n \n \n 1 \n \n \n 5 \n \n \n 6 \n \n \n – \n \n \n – \n \n \n – \n \n \n 6 \n \n \n (2) \n \n \n 4 \n \n \n \n \n Other adjusting items \n \n \n – \n \n \n 3 \n \n \n 13 \n \n \n 16 \n \n \n – \n \n \n – \n \n \n – \n \n \n 16 \n \n \n (4) \n \n \n 12 \n \n \n \n \n Other discrete tax items \n \n \n – \n \n \n – \n \n \n – \n \n \n – \n \n \n – \n \n \n – \n \n \n – \n \n \n – \n \n \n (3) \n \n \n (3) \n \n \n \n \n Adjusted \n \n \n 2,289 \n \n \n 1,396 \n \n \n (911) \n \n \n 485 \n \n \n (78) \n \n \n – \n \n \n 4 \n \n \n 411 \n \n \n (99) \n \n \n 312 \n \n \n \n \n Depreciation & Amortisation \n \n \n   \n \n \n   \n \n \n   \n \n \n 85 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Impairment of assets \n \n \n   \n \n \n   \n \n \n   \n \n \n 1 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Share-based payments \n \n \n   \n \n \n   \n \n \n   \n \n \n 20 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Adjusted EBITDA \n \n \n   \n \n \n   \n \n \n   \n \n \n 591 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Refer to the Financial review on pages 11 and 12 for commentary on the Group's adjusting items. \n   \n Adjusted operating profit margin of 22.3% (2024: 21.2%) is calculated as adjusted operating profit of $544m (2024: $485m) divided by revenue of $2,439m (2024: $2,289m). A reconciliation of adjusted operating profit to its closest IFRS measure is shown in the table above. \n \n \n   \n Reconciliation of reported operating costs to adjusted operating costs for the years ended 31 December 2025 and 2024 \n \n \n \n \n   \n \n \n 2025 \n \n \n   \n \n \n 2024 \n \n \n \n \n   \n \n \n S&D \n \n \n G&A \n \n \n R&D \n \n \n Other \n \n \n Operating costs \n \n \n   \n \n \n S&D \n \n \n G&A \n \n \n R&D \n \n \n Other \n \n \n Operating costs \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n   \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n \n \n As reported \n \n \n (668) \n \n \n (206) \n \n \n (111) \n \n \n (70) \n \n \n (1,055) \n \n \n   \n \n \n (645) \n \n \n (195) \n \n \n (112) \n \n \n (7) \n \n \n (959) \n \n \n \n \n Amortisation of acquired intangibles \n \n \n – \n \n \n 17 \n \n \n 8 \n \n \n – \n \n \n 25 \n \n \n   \n \n \n 1 \n \n \n 18 \n \n \n 8 \n \n \n – \n \n \n 27 \n \n \n \n \n Acquisition & divestitures \n \n \n – \n \n \n 4 \n \n \n – \n \n \n – \n \n \n 4 \n \n \n   \n \n \n (1) \n \n \n 3 \n \n \n – \n \n \n 1 \n \n \n 3 \n \n \n \n \n Impairment of assets \n \n \n – \n \n \n – \n \n \n – \n \n \n 72 \n \n \n 72 \n \n \n   \n \n \n – \n \n \n – \n \n \n – \n \n \n – \n \n \n – \n \n \n \n \n Termination benefits and related costs \n \n \n – \n \n \n 5 \n \n \n – \n \n \n – \n \n \n 5 \n \n \n   \n \n \n 1 \n \n \n 3 \n \n \n 2 \n \n \n – \n \n \n 6 \n \n \n \n \n Other adjusting items \n \n \n – \n \n \n 14 \n \n \n – \n \n \n (2) \n \n \n 12 \n \n \n   \n \n \n – \n \n \n 6 \n \n \n – \n \n \n 6 \n \n \n 12 \n \n \n \n \n Adjusted \n \n \n (668) \n \n \n (166) \n \n \n (103) \n \n \n – \n \n \n (937) \n \n \n   \n \n \n (644) \n \n \n (165) \n \n \n (102) \n \n \n – \n \n \n (911) \n \n \n \n \n Reconciliation of reported basic and diluted earnings per share to adjusted earnings per share for the years ended 31 December 2025 and 2024 \n \n \n \n \n   \n \n \n 2025 \n \n \n Adjusted 2025 \n \n \n 2024 \n \n \n Adjusted 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n $m \n \n \n \n \n Net profit attributable to the shareholders of the Group \n \n \n 175 \n \n \n 358 \n \n \n 191 \n \n \n 312 \n \n \n \n \n   \n \n \n   \n \n \n Number \n \n \n   \n \n \n Number \n \n \n \n \n Basic weighted average ordinary shares in issue 1 \n \n \n   \n \n \n 2,024,809,094 \n \n \n   \n \n \n 2,047,643,498 \n \n \n \n \n Diluted weighted average ordinary shares in issue 1 \n \n \n   \n \n \n 2,034,286,390 \n \n \n   \n \n \n 2,056,797,417 \n \n \n \n \n   \n \n \n Cents \n \n \n Cents \n \n \n Cents \n \n \n Cents \n \n \n \n \n Basic earnings per share \n \n \n 8.6 \n \n \n 17.7 \n \n \n 9.3 \n \n \n 15.3 \n \n \n \n \n Diluted earnings per share \n \n \n 8.6 \n \n \n 17.6 \n \n \n 9.3 \n \n \n 15.2 \n \n \n \n \n \n \n See Note 6 - Earnings per share in the Notes to the Condensed Consolidated Financial Statements. \n \n \n   \n Adjusted diluted EPS has increased by 16.0% to 17.6 cents (2024: 15.2 cents). This is calculated on actual unrounded numbers. \n   \n Cash flow conversion \n \n \n \n \n   \n \n \n Year ended 31 December \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Operating cash conversion 2 \n \n \n 99.4% \n \n \n 105.6% \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Equity cash conversion 2 \n \n \n 100.8% \n \n \n 115.6% \n \n \n \n \n \n \n Operating cash conversion is calculated by Operating cash flow/Adjusted operating profit. Equity cash conversion is calculated by Free cash flow to equity/Adjusted net profit. Operating cash flow and Free cash flow to equity cash flow have been redefined as explained in footnotes 4 and 5 on the next page. \n \n \n \n  \n Reconciliation of Operating cash flow, Free cash flow to capital, Free cash flow to equity \n   \n \n \n \n \n   \n \n \n Year ended 31 December \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Net cash generated from operations \n \n \n 605 \n \n \n 576 \n \n \n \n \n Operational capex 3 \n \n \n (64) \n \n \n (63) \n \n \n \n \n Operating cash flow 4 \n \n \n 541 \n \n \n 513 \n \n \n \n \n Tax paid \n \n \n (54) \n \n \n (52) \n \n \n \n \n Free cash flow to capital 4 \n \n \n 487 \n \n \n 461 \n \n \n \n \n Net interest paid \n \n \n (79) \n \n \n (79) \n \n \n \n \n Payment of lease liabilities \n \n \n (27) \n \n \n (25) \n \n \n \n \n Net cash inflow from lease incentives \n \n \n 13 \n \n \n - \n \n \n \n \n Financing fee amortisation  \n \n \n - \n \n \n (3) \n \n \n \n \n Foreign exchange gain/(loss) on cash and borrowings \n \n \n - \n \n \n 4 \n \n \n \n \n Proceeds from sale of PP&E \n \n \n - \n \n \n 3 \n \n \n \n \n Realised loss on settlement of FX derivatives relating to financing \n \n \n (32) \n \n \n - \n \n \n \n \n Free cash flow to equity 5 \n \n \n 362 \n \n \n 361 \n \n \n \n \n \n \n 3.        Operational capex is cash spent to maintain our existing operations/output. Growth capex develops new products and creates or increases capacity. \n \n 4.        The calculation of the cash flow measures 'Operating cash flow' and 'Free cash flow to capital' have been redefined to exclude growth capex, and realised losses on settlement of certain derivatives. Management considers that these changes result in improved definition and calculation of operating cash flow and free cash flow to capital. The comparative has been restated for the impact of growth capex, but not for the exclusion of realised losses on settlement of certain derivatives on the basis that this balance is not material. \n 5.        The calculation of the cash flow measure 'Free cash flow to equity' has been redefined to exclude non-cash items such as net foreign exchange gains or losses on cash and borrowings and the amortisation of financing fees as well as growth capex (as defined in footnote 3) and realised losses on settlement of certain derivatives. Management considers that these changes result in improved definition and calculation of free cash flow to equity. The comparative has been restated for the impact of growth capex, but not for the exclusion of non-cash items on the basis that this balance is not material. \n   \n Free cash flow to equity has increased by 0.1% to $362m (2024: $361m). A reconciliation of free cash flow to equity to its closest IFRS measure is shown in the table above. \n   \n Reconciliation of reported and adjusted working capital movement \n   \n \n \n \n \n   \n \n \n Year ended 31 December \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Reported working capital movement \n \n \n (33) \n \n \n (7) \n \n \n \n \n (Decrease)/increase in respect of acquisitions and divestitures \n \n \n (1) \n \n \n 3 \n \n \n \n \n (Decrease)/increase in termination benefits \n \n \n (2) \n \n \n 4 \n \n \n \n \n (Decrease) in respect of other adjusting items \n \n \n (2) \n \n \n (2) \n \n \n \n \n Realised (loss)/gain on settlement of FX derivatives held to manage foreign exchange risk in working capital 6 \n \n \n (2) \n \n \n 9 \n \n \n \n \n Adjusted working capital movement \n \n \n (40) \n \n \n 7 \n \n \n \n \n \n \n 6. Realised gains and losses arising from the settlement of FX derivatives held to manage foreign exchange risk in our working capital have been included in this reconciliation as management believe this provides a more accurate view of the underlying movement in working capital.  \n \n \n \n   \n Cash outflows from adjusting items \n \n \n \n \n   \n \n \n Year ended 31 December \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Acquisitions and divestitures \n \n \n (3) \n \n \n (4) \n \n \n \n \n Termination benefits and related costs adjustments \n \n \n (3) \n \n \n (11) \n \n \n \n \n Other adjusting items \n \n \n (10) \n \n \n (7) \n \n \n \n \n Cash outflows from adjusting items \n \n \n (16) \n \n \n (22) \n \n \n \n \n Net debt \n Monitoring net debt is important to the Group as it is an indicator of the Group's financial health and its available liquidity. It is an important decision-making tool for investment decisions and strategic planning.  \n   \n Net debt is calculated as borrowings less cash and excluding lease liabilities. \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Senior notes 7 \n \n \n 990 \n \n \n 495 \n \n \n \n \n Credit facilities 7 \n \n \n 408 \n \n \n 628 \n \n \n \n \n Lease liabilities \n \n \n 120 \n \n \n 79 \n \n \n \n \n Total borrowings including lease liabilities \n \n \n 1,518 \n \n \n 1,202 \n \n \n \n \n Less: cash and cash equivalents \n \n \n (68) \n \n \n (65) \n \n \n \n \n Less: lease liabilities 8 \n \n \n (120) \n \n \n (79) \n \n \n \n \n Net debt excluding leases \n \n \n 1,330 \n \n \n 1,058 \n \n \n \n \n \n \n 7. See Note 9– Borrowings of the Condensed Consolidated Financial Statements. \n \n   \n Reconciliation of acquisition of PP&E and intangible assets \n \n \n \n \n   \n \n \n Year ended 31 December \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n   \n \n \n $m \n \n \n $m \n \n \n \n \n Acquisition of property, plant and equipment \n \n \n (135) \n \n \n (92) \n \n \n \n \n Acquisition of intangible assets \n \n \n (50) \n \n \n (30) \n \n \n \n \n Total capital spend \n \n \n (185) \n \n \n (122) \n \n \n \n \n Split as: \n \n \n   \n \n \n   \n \n \n \n \n Growth capex \n \n \n (121) \n \n \n (59) \n \n \n \n \n Operational capex \n \n \n (64) \n \n \n (63) \n \n \n \n \n Leverage \n Leverage is an important performance measurement metric for the Group as it is an indicator of financial risk, credit worthiness and operational flexibility. It is also an important considerat...

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