ConvaTec Group Plc (CTEC.L) | Investment Case

1. Company Snapshot

1.a. Company Description

ConvaTec Group Plc develops, manufactures, and markets medical products and technologies worldwide.It offers advanced wound dressings and skin care products for the management of acute and chronic wounds resulting from various conditions, such as diabetes, immobility, and venous disease, as well as from traumatic injury, burns, invasive surgery, and other causes.The company also provides devices, accessories, and services for people with a stoma resulting from colorectal cancer, inflammatory bowel disease, bladder cancer, obesity, and other causes.

In addition, it offers continence and critical care products, including intermittent urinary catheters; and products for people with urinary continence issues related to spinal cord injuries, multiple sclerosis, spina bifida, and other urological disorders, as well as devices and products used in intensive care units and hospital settings.Further, the company provides advanced systems for managing acute fecal incontinence, as well as for monitoring urine production output and intra-abdominal pressure; and various disposable medical devices, such as wound drainage systems, urine collection bags and catheters, airway management and oxygen/aerosol therapy devices, suction handles and tubes, gastroenterology tubes, and securement devices.Additionally, it offers disposable infusion sets to manufacturers of insulin pumps for diabetes, as well as similar pumps that are used in continuous infusion treatments for other conditions; and various products to hospital and home healthcare markets.

The company sells its products to pharmacies, hospitals, and other acute and post-acute healthcare service providers directly or through distributors and wholesalers.It serves a range of customers, including healthcare providers, patients, and manufacturers.The company was founded in 1978 and is headquartered in Reading, the United Kingdom.

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1.b. Last Insights on CTEC

ConvaTec Group Plc's recent struggles can be attributed to its disappointing Q2 2025 earnings release, which fell short of analyst expectations. The company's weak performance was driven by declining sales in its Advanced Wound Care segment, which accounts for a significant portion of its revenue. Additionally, ConvaTec's high debt levels and increasing interest expenses may be weighing on its financial performance.

1.c. Company Highlights

Last Price	229.2
Change Percentage	0.88%
Open	227.4
Previous Close	227.2
Market Cap ( Millions)	4691
Volume	16983740
Year High	311.2
Year Low	218
M A 50	238.37
M A 200	251.92

FCF Yield	5.59%
Dividend Yield	2.20%
ROE	12.38%
Debt / Equity	73.98%
Net Debt / EBIDTA	218.01%
Price To Book	3.47
Price Earnings Ratio	28.97
Price To FCF	17.89
Price To sales	2.65
EV / EBITDA	13.14

2. Transcript Summary

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3. NewsRoom

Are Investors Undervaluing ConvaTec Group PLC (LON:CTEC) By 36%?

Nov -25

Source:

Convatec Selects LTIMindtree for Strategic, AI-Powered SAP S/4HANA Transformation

Nov -17

Source:

Stocks struggle despite manufacturing improvement

Nov -03

Source:

Stigma, Not Condition, Is the Biggest Barrier for 1 in 3 People Living With Chronic Conditions, According to New Convatec Research

Oct -27

Source:

Has ConvaTec Group PLC's (LON:CTEC) Impressive Stock Performance Got Anything to Do With Its Fundamentals?

Oct -23

Source:

How Recent Developments Are Shaping the ConvaTec Group Investment Story

Oct -06

Source:

Convatec to open new R&D hub in Manchester as part of £500m UK investment

Oct -01

Source:

Those who invested in ConvaTec Group (LON:CTEC) five years ago are up 43%

Sep -08

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.60%)

6. Segments

Advanced Wound Care

Expected Growth: 6.5%

ConvaTec's Advanced Wound Care segment growth is driven by increasing demand for chronic wound management, rising prevalence of diabetes and obesity, growing adoption of advanced wound care technologies, and expansion into emerging markets. Additionally, strategic acquisitions and investments in R&D have enhanced the company's product portfolio, further fueling growth.

Ostomy Care

Expected Growth: 6.2%

ConvaTec's Ostomy Care segment growth of 6.2% is driven by increasing prevalence of chronic diseases, advancements in ostomy products, and rising awareness about ostomy care management. Additionally, strategic acquisitions, expansion into emerging markets, and a growing demand for home healthcare services contribute to the segment's growth.

Continence Care

Expected Growth: 6.8%

ConvaTec's Continence Care segment growth of 6.8% is driven by increasing demand for catheters and ostomy care products, fueled by an aging population and rising prevalence of chronic diseases. Additionally, expansion into emerging markets, product innovation, and strategic acquisitions contribute to the segment's growth.

Infusion Care

Expected Growth: 7.2%

ConvaTec's Infusion Care segment growth of 7.2% is driven by increasing demand for home infusion therapies, expansion in emerging markets, and strategic product launches. Additionally, the segment benefits from a growing elderly population, rising prevalence of chronic diseases, and a shift towards outpatient care, leading to increased adoption of infusion care products.

Hospital Care

Expected Growth: 6.9%

ConvaTec Group Plc's Hospital Care segment growth of 6.9% is driven by increasing demand for advanced wound care products, expansion into emerging markets, and strategic partnerships with healthcare providers. Additionally, investments in research and development have led to innovative product launches, further boosting growth.

7. Detailed Products

Ostomy Care

ConvaTec's Ostomy Care products are designed to help individuals with ostomies manage their condition with confidence and discretion. The range includes one-piece and two-piece pouching systems, skin barriers, and accessories.

Wound Therapeutics

ConvaTec's Wound Therapeutics products are designed to promote wound healing and tissue repair. The range includes dressings, gels, and other topical treatments.

Continence and Critical Care

ConvaTec's Continence and Critical Care products are designed to help individuals manage urinary incontinence and other urological conditions. The range includes catheters, drainage bags, and other accessories.

Infusion Devices

ConvaTec's Infusion Devices are designed to provide safe and reliable infusion therapy for patients. The range includes infusion sets, syringes, and other accessories.

8. ConvaTec Group Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

ConvaTec Group Plc operates in the medical technology industry, which is characterized by a moderate threat of substitutes. While there are alternative products and services available, they are not perfect substitutes, and ConvaTec's products have a unique value proposition.

Bargaining Power Of Customers

ConvaTec Group Plc's customers are primarily healthcare providers and patients, who have limited bargaining power due to the specialized nature of ConvaTec's products and services.

Bargaining Power Of Suppliers

ConvaTec Group Plc's suppliers are primarily manufacturers of raw materials and components, who have some bargaining power due to the specialized nature of their products. However, ConvaTec's scale and diversification mitigate this power.

Threat Of New Entrants

The medical technology industry has high barriers to entry, including regulatory hurdles and significant research and development investments, which limit the threat of new entrants.

Intensity Of Rivalry

The medical technology industry is highly competitive, with several established players competing for market share. ConvaTec Group Plc faces intense competition from companies such as Johnson & Johnson, Medtronic, and 3M.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	43.67%
Debt Cost	6.94%
Equity Weight	56.33%
Equity Cost	6.94%
WACC	6.94%
Leverage	77.53%

11. Quality Control: ConvaTec Group Plc passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Fielmann

A-Score: 6.0/10

Value: 5.3

Growth: 5.0

Quality: 7.3

Yield: 4.4

Momentum: 6.5

Volatility: 7.7

1-Year Total Return ->

ConvaTec

A-Score: 4.8/10

Value: 2.9

Growth: 5.3

Quality: 6.0

Yield: 3.1

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

Ypsomed

A-Score: 3.9/10

Value: 2.9

Growth: 8.2

Quality: 5.7

Yield: 0.6

Momentum: 2.0

Volatility: 4.0

1-Year Total Return ->

Tecan

A-Score: 3.6/10

Value: 4.4

Growth: 4.1

Quality: 5.7

Yield: 2.5

Momentum: 0.0

Volatility: 4.7

1-Year Total Return ->

Elekta

A-Score: 3.5/10

Value: 4.3

Growth: 4.0

Quality: 3.1

Yield: 6.9

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

Amplifon

A-Score: 3.2/10

Value: 4.3

Growth: 5.4

Quality: 4.8

Yield: 2.5

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-0.36%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.94%

ConvaTec Group Plc - GB00BD3VFW73

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CTEC

1.c. Company Highlights

Less Volatile

Strong Momentum

Expensive

Stable Momentum

Average Growth

Fairly Valued

Average Yield

Revenues Beats

Earnings Miss

Earnings Beats

Medium Volatility

Average Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.60%)

6. Segments

Advanced Wound Care

Expected Growth: 6.5%

Ostomy Care

Expected Growth: 6.2%

Continence Care

Expected Growth: 6.8%

Infusion Care

Expected Growth: 7.2%

Hospital Care

Expected Growth: 6.9%

7. Detailed Products

Ostomy Care

Wound Therapeutics

Continence and Critical Care

Infusion Devices

8. ConvaTec Group Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: ConvaTec Group Plc passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.29$

Current Price

2.29$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA