15th Oct 2018 08:41
LONDON (Alliance News) - ConvaTec Group PLC on Monday issued a profit warning and said Chief Executive Paul Moraviec has stepped down from his role, effective immediately.
Rick Anderson, currently a non-executive director of ConvaTec and formerly chairman of US personal care products giant Johnson & Johnson, is to assume the position of interim CEO until a permanent hire is found.
Moraviec will continue to be available to the company to ensure an orderly transition, said ConvaTec, with the search for a new CEO starting immediately.
"I would like to thank Paul for leading ConvaTec through an important phase of the company's development and the first period of being a public company. Paul leaves with the board's best wishes for his retirement," said Chairman Christopher Gent.
Shares in ConvaTec fell 29% to 160.10 pence on Monday morning.
In a third quarter trading statement, the medical products and technologies firm warned on both its expected organic revenue growth and its adjusted earnings before interest and taxation margin for 2018.
ConvaTec said the revised guidance was largely to due its Infusion Devices franchise, with a change in the inventory policy of the unit's biggest customer expected to hit fourth quarter revenue by around USD18 million to USD23 million.
The outlook was also, "to a lesser extent", due to "challenging market dynamics in specific markets" in Advanced Wound Care.
Thus, organic revenue growth for 2018 is now expected to fall between flat to 1.0%, having been previously guided to a range of 2.5% to 3.0% before.
The company's adjusted Ebit margin is now predicted to be between 23% and 24%, down from between 24% and 25% seen previously.
ConvaTec's revenue in the third quarter of the year increased 1.5% to USD452.2 million from USD445.5 million in 2017. On an organic basis, third quarter revenue was up 0.4%.
Continence & Critical Care led revenue growth, increasing 12% to USD107.5 million from USD96.2 million, helping to offset the 4.0% drop in Infusion Devices revenue to USD66.5 million from USD69.3 million.
"The board continues to have confidence in the fundamentals of the business and its future potential. Our cost out plans are under development and the group will provide an update on these with the financial year 2018 results in February 2019," said ConvaTec.
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