Convatec posts 'good' full-year topline growth

9th Mar 2023 08:32

(Sharecast News) - Convatec posted "good" top-line growth and higher margins for 2022.

For the year ended on 31 December, the company reported a 6.9% rise in adjusted revenues to reach $2.07bn at constant currencies.

In parallel, and on the same basis, the medical products and technologies company said that its operating margins widened from 17.7% during the year before to 19.5%.

"Over the course of the year, we continued to make progress with our FISBE strategy, launching three new products and improving our competitive positions. The resulting financial performance is further proof that Convatec is pivoting to sustainable and profitable growth," said Convatec's boss, Karim Bitar.

"We remain focused on executing our FISBE 2.0 strategy and are confident in Convatec's growth prospects and ability to increase its operating margin to the mid-20s over the medium term."

On a reported basis, total sales were ahead by only 1.7% due to foreign exchange headwinds but 5.6% higher on an organic basis.

The company's diluted earnings per share did fall by 46.6% to 3.1 US cents on a reported basis, due to a significant increase in the effective book tax rate from 15.0% to 23.9%, Convatec explained.

In adjusted terms, diluted EPS was down 3.1% at 12.6 US cents.

Net debt increased to $187m on higher capital expenditures to support future growth and a rise in inventories to improve "resilience".

That saw leverage increase to 2.1 times operating profits versus 1.9 times in 2021.

A final dividend of 4.33 US cents was proposed by the board, taking the full-year payout to 6.047 US cents.

As of 0907 GMT, shares of Convatec were slipping by 2.23% to 219.40p.