Convatec revenues rise in 2017, headwinds, cost increases to continue in 2018
Source - SMW
Convatec Group's revenues rose to $1,764.6m in the year to the end of December, up 4.5% from $1,688.3m a year ago.
Operating profit for the year was $247.8m, up 60.9% year on year while adjusted operating profit was $456.8m, down 3.3% year on year due to increased investment in growth and inclusion of Plc costs.
The company said it expects 2018 organic revenue growth of 2.5% to 3.0% and a decline in EBIT margin due to the decision to increase targeted investment, despite the temporary shortfall in revenue growth.
Chief executive Paul Moraviec said: 'Over the past 12 months we made good progress in a number of areas.'
'Our Continence & Critical Care and Infusion Devices franchises delivered strong performances, and in Ostomy Care we saw good momentum in the first half in the US, Latin America, Japan and China.'
'We also expanded our product portfolio with the launch of 16 new products and line extensions. We did encounter some significant challenges as well, which resulted in a disappointing performance overall in 2017.'
'Performance was affected by supply constraints in both Advanced Wound Care and Ostomy Care, and the revenue contribution from new products was lower than anticipated. This reduced our full year organic revenue growth.'
'Headwinds and cost increases more than offset the productivity improvements delivered, resulting in a negative impact on adjusted gross margin compared to our initial expectation of further improvement in 2017. 'While we have addressed the issues in manufacturing reported in October, there will be an ongoing impact on performance in 2018, especially in the first half.'
At 8:07am: (LON:CTEC) ConvaTec Group Plc share price was +6.2p at 203.85p