ConvaTec lifts full-year outlook as Q3 sales up 6.5%

Headline results for the third quarter:

  • Revenue: $493 million, up 6.5%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

CEO Karim Bitar remarked "we delivered a good trading performance in the third quarter. We continued to respond well to stronger-than- anticipated  customer  and  patient  demand,  particularly  in  our  infusion  care  and  continence  and  critical  care businesses." He added that "we now expect to deliver revenue growth at the higher end of our guidance range and to exceed our previous margin guidance for 2020."

Other results: 

  • Advanced wound care: $149 million, up 0.8%, with "continued strength" in Latin America, "progress" in certain Asia Pacific markets and "improved performance" in certain European markets, while in the US, there was growth in surgical sales due to a rebound in elective surgeries, but the "chronic care segment remains challenging as COVID-19 continues to inhibit activity in the community setting"
  • Ostomy care: $132 million, up 0.4%, with "good growth" in global emerging markets, in both Latin America and key Asia Pacific markets such as China, offset by "continuing challenges" in certain European markets and the US
  • Continence and critical care: $124 million, up 7.7%, with expected moderation in growth from the second quarter, but demand for critical care products "remained strong"
  • Infusion care: $88 million, up 28.2%, driven by the increased infusion set use by patients with diabetes

Looking ahead:

ConvaTec said "we have revised our full-year constant currency revenue guidance and now expect to be towards the top end of the 2% to 3.5% growth range." The company also expects an adjusted earnings margin of between 18.5% and 19%, up from prior guidance of 16% to 18%. "We do not currently anticipate fourth-quarter year-on-year revenue growth due to the impact of the skincare business disposal, challenging 2019 comparatives coupled with the uncertainty  arising  from  increasing  COVID-19  infection rates," ConvaTec added.

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