ConvaTec Group LON: CTEC used its Capital Markets Day to outline how management believes the company has completed a multi-year turnaround under its “FISBE” plan and is now positioned to accelerate growth through a new strategy called “Accelerate.” CEO Jonny Mason said ConvaTec operates in “large and growing markets” with “high levels of recurring revenue,” adding that the company’s new products are “winning share” and that the business is investing to meet rising demand.
From “FISBE” turnaround to “Accelerate” growth plan
Mason described FISBE as a six-year program built around focus, innovation, simplification, building capabilities, and execution. He said ConvaTec has narrowed its scope to four chronic-care categories—Advanced Wound Care, Ostomy Care, Continence Care, and Infusion Care—disposing of peripheral activities and rationalizing portfolios. He also pointed to a reduction in G&A as a percentage of sales, noting it had fallen from 13% to below 7%.
The new Accelerate strategy retains what Mason called the “best” of FISBE, while emphasizing four pillars: customer-focused growth, technology and innovation, execution excellence, and culture. Mason said this evolution is intended to drive “faster sales growth” and “sustainable double-digit EPS growth with strong cash flow conversion,” with the group targeting 6% to 8% organic revenue growth.
Category updates: product launches and growth targets
Advanced Wound Care: President and COO Tanja Dormels said ConvaTec is raising its Advanced Wound Care sales targets to “high single-digit growth from 2028,” driven by scaling five product launches. She characterized the global advanced wound care market as about $6 billion and growing around 6% annually. Dormels highlighted AQUACEL as the “cornerstone franchise” at over $300 million in annual revenue and said the company’s pipeline is “the richest in our history,” with five products supporting acceleration: ConvaFiber, ConvaFoam, ConvaVac, InnovaMatrix, and ConvaNiox.
On ConvaFoam, Dormels said global share has risen by about one percentage point to around 6%, with a 10% global foam share described as a “realistic initial target.” She also described ConvaNiox as a “first-of-its-kind nitric oxide-generating multimodal dressing,” citing randomized controlled trial data showing “60% more ulcers were healed within 12 weeks” versus standard of care in diabetic foot ulcers, with sales expected to build gradually until community reimbursement is achieved.
Ostomy Care: President and COO Bruno Pinheiro said the category has shifted from losing share to growing faster than its markets, with a target of “mid to high single-digit growth.” He said the global ostomy market grows at about 4% and is consolidated, with three global leaders representing roughly 85% of the market. Pinheiro said ConvaTec simplified its portfolio by removing about 40% of SKUs and moved toward a “clinically led relationship-based approach,” citing two new GPO contracts in five years that he said allow the company to compete for about 40,000 additional U.S. procedures annually.
Pinheiro highlighted Esteem Body as the first new ostomy product in more than a decade, saying it has reached “high single-digit market share” in two years. He also described Natura Body, expected to launch next year, as filling a remaining portfolio gap, and said the U.S. market is about 60% to 65% two-piece systems, versus Europe where one-piece is larger.
Continence Care and Home Services: President and COO Mark Jassey said the business serves more than 200,000 people annually and supplies over 150 million intermittent catheters worldwide. He said ConvaTec delivered 7% organic revenue growth and remains the leader in the U.S., a market projected to grow around 4% annually. Jassey emphasized service differentiation through 180 Medical, calling it the “No. 1-rated U.S. medical supply business on Trustpilot” with a 4.9 rating and Net Promoter Score over 80.
Jassey said ConvaTec is increasing its guidance to “mid to high single-digit sales growth” in Continence Care and discussed continued portfolio expansion, including the launch of GentleCath Air Pocket and Set later in the year, subject to regulatory clearance. In Q&A, he said Pocket and Set will launch in Europe later in the year with rollout into next year, followed by the U.S. after that.
Infusion Care: President and COO Kjersti Grimsrud said the business operates mainly in diabetes and Parkinson’s disease, with smaller positions in immunoglobulin therapy and pain management. She described significant long-term penetration headroom for insulin pump therapy and said demand for infusion sets will grow as pump penetration increases “by at least 8% per annum in the next five years.”
Grimsrud said Infusion Care delivered a sales CAGR of “just over 10%” over the past five years and highlighted expansion in non-diabetes therapies, noting non-diabetes revenue increased from 10% of infusion sales in 2024 to 15% in 2025. She said ConvaTec extended an exclusive long-term supply contract with AbbVie related to its Parkinson’s therapy Vyalev and expects ConvaTec to be the “sole infusion set supplier” to three main advanced Parkinson’s treatment providers by the end of 2026. She said the company is investing in new capacity, with the first new production lines expected to be on stream in 2027 and further capacity in 2028, and that the business targets “double-digit revenue growth” from 2027.
Innovation: “waves” of launches and a higher evidence bar
Chief Science, Innovation, and Quality Officer Divakar Ramakrishnan said the company has built a “repeatable engine” for innovation, supported by user-centered design, design for high-volume manufacturing, and scientific depth in skin-material interfaces, tissue repair and healing, and infection prevention. He said ConvaTec has roughly doubled R&D as a percentage of sales since 2019 and cited capability building in clinical evidence, reimbursement, regulatory, design for manufacturing, and user-centered design.
Ramakrishnan said ConvaTec launched eight products between 2022 and 2025 and expects eight more between 2026 and 2027, spanning all four categories. He also said new products represented 30% of revenue in 2024. On clinical evidence, he said the company is running more than 30 studies, including randomized controlled trials, and described a 203-patient antimicrobial trial for the AQUACEL Ag+ platform that showed a higher likelihood of wound closure and faster healing.
Looking forward, he described “wave three” as the next horizon aimed at higher value and more differentiated growth, including next-generation ConvaFoam, next-generation FeelClean catheters, additional applications for the nitric oxide-powered platform, and infusion care innovation for “high-dose biologics” through next-generation Neria Guard.
Financial framework: mid-20s margin, reinvestment, and capital allocation
CFO Fiona Ryder said organic revenue growth remains ConvaTec’s “key driver of value” and that the company intends to deploy cash into high-return growth CapEx, dividends, selected M&A, and share buybacks. She said the company delivered 460 basis points of adjusted operating margin expansion since 2021 despite inflation, citing manufacturing network simplification, procurement centralization, ConvaTec Business Service Centers, and productivity initiatives including digital and AI tools. Ryder highlighted Talkdesk at 180 Medical, saying it has driven a 10% patient-per-agent efficiency improvement.
Ryder reaffirmed medium-term targets of 6% to 8% revenue growth, “mid-20s” operating margin (which she described as 24% to 26%), double-digit EPS growth, and double-digit free cash flow to equity CAGR. She said ConvaTec is committed to a 2x net debt to adjusted EBITDA leverage target and would consider moving above 2x for the “right deal” with a path back to 2x.
On inflation sensitivity, Ryder said cost of goods were about 40% of group revenue in full year 2025 and that the company has hedging and forward purchases in place for 2026 covering about 80% of raw materials, alongside about five months of finished goods and raw material stock. She estimated that an incremental point of inflation above the company’s 3% assumption could add about $2 million to $3 million of P&L cost in 2026, and about $7 million to $8 million in 2027, before mitigation actions.
Ryder also outlined a step-up in growth CapEx, with $121 million spent in 2025, rising to $135 million to $165 million in 2026 and a similar level in 2027, with total CapEx around 9% of sales in 2026 and likely similar in 2027 before falling back to 5% to 7%. She said the majority of 2026 growth CapEx is in Infusion Care to add capacity, often underwritten by long-term customer contracts, with additional investments across Advanced Wound Care, Ostomy Care, and Continence Care to support product scale-ups and launches.
In closing remarks, Mason said the company has “very strong market positions” in consumable chronic-care categories and argued that increasing sales and cash generation supports a “flywheel” of reinvestment. He also acknowledged a “specific issue in one subsidiary related to the management of complaints processes,” saying the company is addressing it and emphasizing that it “doesn’t relate to product quality or to patient safety.”
About ConvaTec Group LON: CTEC
ConvaTec Group PLC engages in the development, manufacturing, and sale of medical products, services, and technologies in Europe, North America, and internationally. The company offers advanced wound dressings and skin care products for the management of acute and chronic wounds resulting from various conditions, such as diabetes, and acute conditions resulting from traumatic injury and burns. It also provides ostomy care solutions, including devices, accessories, and services for people with a stoma resulting from colorectal cancer, inflammatory bowel disease, and bladder cancer.
Further Reading
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