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(Sharecast News) - Medtech group Convatec has lifted its forecasts for medium-term organic growth forecasts after a strong performance in 2023 which saw a rise in margins and double-digit profit growth.
The company, which provides wound, ostomy, continence and infusion care, said organic revenues are expected to increase by 5-7% over the medium term, ahead of previous guidance of 4-6% growth, "based on the strength of the new product pipeline and improvements in commercial execution".
Revenues rose 3.4% to $2.14bn in 2023, up 7.2% on an organic basis, at the mid-point of the 6.75-7.5% guidance range given in November 2023.
Advanced Wound Care revenues were up 9.5% year-on-year, helped by a strong performance in antimicrobials and growing position in wound biologics segment. Meanwhile, Ostomy Care sales gained 4.2%; Continence Care revenues rose 6.5% and and Infusion Care revenues jumped 8.7%.
"Convatec's revenue growth accelerated and was broad-based across all our categories. We further expanded our operating margin and increased earnings per share and free cash flow to equity," said chief executive Karim Bitar.
Adjusted operating profit margins increased to 20.2%, up from 19.5% in 2022, helping to drive 6.1% growth in adjusted diluted earnings per share to 13.4 cents.
For the current financial year, the board is forecasting 5-7% organic revenue growth, adjusted operating profit margin of at least 21.0% on a constant currency basis and double-digit growth in EPS. Over the medium term, adjusted operating profit margins are expected to reach a mid-20s percentage rate.
"Given our innovative new product pipeline and strengthened competitive position, Convatec has pivoted to a higher level of organic sales growth. We are on track to deliver our medium-term margin guidance leading to double-digit compound growth in EPS and free cash flow to equity."
