The ConvaTec Board is declaring an interim dividend of 1.717 cents per share, in line with the 2020 interim dividend. The Board maintains its stated policy of 35% to 45% of adjusted net profit for full year dividends.
Other financial highlights include:
Strong revenue growth ahead of their expectations: +7.4% organic growth, +7.0% on a constant currency and +11.0% on a reported basis
o H1 2021 performance was driven by particularly strong growth in Advanced Wound Care, against the weak COVID-depressed comparative, coupled with good growth in Infusion Care and solid performances in Continence & Critical Care and Ostomy Care
Continued progress with their transformation by executing on their FISBE (Focus, Innovate, Simplify, Build, Execute) strategy:
o Strengthened Continence Care with acquisition of Cure Medical
o Launched innovative and differentiated extended wear infusion set
o Establishing Marketing and Quality Centres of Excellence
Reported operating profit of $136m, 19.9% higher year on year, with adjusted EBIT of $204m, 17.0% higher on a constant currency basis, reflecting the strong revenue growth together with gross margin improvement and beneficial opex phasing.
Reported Free Cash Flow ('FCF') of $106m (H1 2020: $145m) with adjusted FCF of $114m (H1 2020: $148m). Adjusted cash conversion of 56.6% (H1 2020: 72.9%) primarily reflecting working capital movements during the period and increased capital investment.
Strong balance sheet: leverage of 2.0x Net Debt/Adjusted EBITDA (H1 2020: 2.2x; FY 2020: 2.0x).
2021 full year outlook is updated: organic revenue growth of between 3.5-5% (previously: 3-4.5%) and a constant currency adjusted EBIT margin of 18-19% (previously: 18-19.5%). Based on current FX this would equate to guidance of between 17.1-18.1% for the published adjusted EBIT margin.
