Pioneering
trusted medical solutions
to improve the lives we touch
Convatec Group Plc
Annual Report and
Accounts 2025
In memory of
Karim Bitar
1965—2025
“Karim led the successful turnaround and
transformation of Convatec. He had strong values,
conviction, and, above all else, an unshakeable
focus on people relying on Convatec products and
services. His impact and legacy at Convatec will be
felt for many years to come and he is sorely missed
by everyone who worked with him.”
Dr John McAdam CBE
Chair
On 27 October 2025, Convatec was deeply saddened to announce the
passing of our former CEO, Karim Bitar, following a medical leave of
absence since 4 August 2025. On behalf of everyone at Convatec, the
Board extends our condolences to Karim’s family, and thanks everyone
who has shared many kind words and tributes – these have been shared
with Karim’s family. Convatec has put in place a series of commemorative
activity to mark Karim’s lasting impact.
1
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
We are Convatec
We have delivered strong, profitable
growth in 2025
Read more about our performance and mid-teens adjusted EPS
growth in our CEO’s review on pages 9 to 11.
A strategy that continues to deliver
Read more about our FISBE strategy on pages 7, 9 and 10.
Our strongest‑ever innovation pipeline
Read more about our innovation on pages 34 to 37.
Well‑positioned to continue to create
value for all our stakeholders
Pioneering trusted medical solutions
to improve the lives we touch
Convatec is an innovative global medical products and technologies
company, focused on solutions for the management of chronic
conditions. We have leading positions in Advanced Wound Care,
Ostomy Care, Continence Care and Infusion Care.
With over 10,000 colleagues, we provide our products and services
in almost 90 countries, united by our promise to be
forever caring
.
Our solutions provide a range of clinical and economic benefits, from
infection prevention, treatment for hard to heal wounds, at‑risk skin
and ulcerated tissue to supporting debilitating conditions, improved
patient outcomes and reduced care costs.
Financial highlights
1.
Certain financial measures in this document, including adjusted results above,
are not prepared in accordance with International Financial Reporting Standards
(IFRS). See the Non‑IFRS financial information section on pages 28 to 31.
Help us to reduce our
environmental impact
by opting out of
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investors.
Contents
Strategic report
2
Convatec at a glance
4
Megatrends
5
Investment case
6
Chair’s statement
8
Our business model
9
Chief Executive Officer’s review
12
Key performance indicators
14
Operational review
22
Financial review
28
Non‑IFRS financial information
32
Responsible business review
54
Task Force on Climate‑related
Financial Disclosures
66
Risk management and
principal risks
75
Non‑financial and sustainability
information statement
76
Viability statement
Governance
78
Chair’s governance statement
80
Board of Directors
82
Convatec Executive
Leadership Team
84
Board activity and actions
88
Section 172 statement
89
Board performance review
91
Nomination Committee report
94
Audit and Risk Committee report
104
Directors’ Remuneration report
122
Directors’ report
125
Directors’ responsibilities
statement
Financial statements
126
Independent auditor’s report
134
Consolidated financial statements
176
Company financial statements
Additional information
185
Shareholder information
186
Glossary
188
Important information for
readers of this Annual Report
Pioneering
trusted medical solutions
to improve the lives we touch
Convatec Group Plc
Annual Report and
Accounts 2025
Group revenue
$2,439m
(2024: $2,289m)
Adjusted
1
operating profit
$544m
(2024: $485m)
Reported operating profit
$316m
(2024: $325m)
Adjusted
1
diluted
earnings per share
17.6¢
(2024: 15.2¢)
Reported diluted
earnings per share
8.6¢
(2024: 9.3¢)
Adjusted
1
operating
profit margin
22.3%
(2024: 21.2%)
2
Convatec Annual Report and Accounts 2025
Strategic report
Convatec at a glance
About us
we serve – patients living with chronic conditions,
their families and caregivers, and the healthcare
Our categories
Advanced Wound
Care (AWC)
Advanced dressings for the management of acute and chronic wounds
resulting from ongoing conditions such as diabetes and conditions
resulting from traumatic injury, burns and post‑surgery.
Read more on page 14
Ostomy Care (OC)
Devices, accessories and services for people with a stoma (a surgically
created opening where bodily waste is discharged), commonly
resulting from causes such as colorectal cancer, bladder cancer,
inflammatory bowel disease and trauma.
Read more on page 16
Continence Care (CC)
Products and services for people with urinary continence issues
related to spinal cord injury, neurological disease, prostate
enlargement or other causes.
Read more on page 18
Infusion Care (IC)
Disposable infusion sets used with insulin pumps for diabetes
or with continuous infusion treatments for conditions such as
Parkinson’s disease.
Read more on page 20
3
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
5.3%
5.6%
7.2%
6.0%
7.7%
6.8%
4.8%
6.4%
2025
2024
2023
2022
2021
17.7%
19.5%
20.2%
21.2%
22.3%
2025
2024
2023
2022
2021
chronic conditions. Convatec has leading positions
in Advanced Wound Care, Ostomy Care, Continence
Our business
Our performance
Key facts
Organic revenue
growth¹
Adjusted operating
profit margin²
Excluding InnovaMatrix
®
‑ see page 28.
1.
Revenue growth at constant currency, adjusted for acquisitions, divestments and discontinuations.
2. Definitions of adjusted measures are shown in the reconciliation tables on pages 29 to 31.
Group reported revenue
by category
Advanced
31% $753m
Wound Care
Ostomy Care
28% $676m
Continence Care
22% $537m
Infusion Care
19% $473m
Group reported revenue
by geography
Europe
30%
$723m
North America
56% $1,358m
Rest of world
14%
$358m
>1 billion
products manufactured and
sold in 2025
12
key markets
>10,000
colleagues in 2025
7
manufacturing locations
$2,439m
$2,439m
4
Convatec Annual Report and Accounts 2025
Strategic report
Megatrends
Chronic care markets are driven
by global healthcare megatrends
Increased life
expectancy and
ageing populations
Chronic conditions are
increasing
People living longer with
chronic conditions
More than 90% of our revenues arise from serving
chronic care patients and are often recurring in nature
I
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e
s
p
e
n
d
Increased
prevalence
of chronic
conditions
People living
longer with
chronic
conditions
Increased
life expectancy
and ageing
populations
Survival with chronic conditions
improved in approximately
80%
of the world’s countries,
representing >70% of the world
population, from 2010 to2019
Source: Bennett, James E., et al. The Lancet
406.10509 (2025): 1255–1282
As people live longer, the prevalence
and cost of chronic conditions
continues to grow.
1 in 3
adults affected by
chronic conditions globally
(cardiovascular, cancer,
diabetes)
Source: OECD (2025), Health at a Glance 2025:
OECD Indicators, OECD Publishing, Paris,
https://doi.org/10.1787/8f9e3f98‑en
Global population aged 65+
1.9bn
2060
0.8bn
2024
Source: United Nations, uses medium
fertility forecast
Average life expectancy
beyond age 65 globally (years)
18
2060
12
1960
Source: United Nations, uses medium fertility
forecast Population Division estimates
Convatec’s flagship report, launched in October 2025,
Perspectives on living
with chronic conditions
, combines global data and personal stories to spotlight
often‑invisible chronic illnesses. Scan the QR code for more.
5
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Investment case
Positioned to deliver
sustainable growth
Sustainable
and predictable
markets
4–8%
annual growth
We aim to sustainably
outgrow our markets
Refer to our operational
reviews on pages 14 to
21 for further detail
Strongest
pipeline ever
Focused on fast‑growing
market segments
8
new launches 2022–25
8
planned 2026–28
Category
leading
#1
in categories representing
>60% of Group revenue
Building momentum as
new product launches
meet customer demand
Target double‑
digit EPS¹ CAGR
5–7%
organic revenue growth
6‑8% from 2027
Mid‑20s%
operating profit margin¹
Double‑digit CAGR in
free cash flow to equity
Recurring revenue
consumable
products
>90%
revenue from chronic care
>1 billion
units sold annually
Winning
culture
Purpose‑led,
performance‑driven
leaders and teams
Top decile
colleague engagement
Capital allocation framework
Four clear priorities to create shareholder value
Invest
and build
Total capex 2020‑25
c.$760m
Total R&D 2020‑25
c.$580m
Return capital
to shareholders
FY25 share buyback
$300m
Target leverage
2.0×
Grow
via M&A
2020‑25 total
M&A of
c.$500m
Grow
dividends
Target dividend
payout rate
35‑45%
Growing in line
with EPS
1
1. Adjusted.
6
Convatec Annual Report and Accounts 2025
Strategic report
cents per share and represents an increase
of 13% year on year. If approved at our
Annual General Meeting on 21 May 2026,
the final dividend will be paid on 28 May
2026 to shareholders on the register at
the close of business on 17 April 2026.
The payout ratio of 40% of adjusted
net profit is within the target range
of 35–45%. This progressive dividend
recommendation is consistent with the
approach over the last three years.
Our people, culture and values
In 2025, we strengthened our approach
to how we develop and lead our people,
supported by a refreshed people strategy.
We designed new leadership behaviours
to strengthen our culture, deepen
engagement and build purpose-led,
performance-driven leaders and teams.
We sustained our progress in the diversity
of our senior management and advanced
our race and ethnicity commitments
aligned with the FCA Listing Rules and
the Parker Review. Further details can
be found on pages 38 to 41.
We remain committed to fostering
a culture shaped by our values as we
deliver on our vision of
pioneering
trusted medical solutions to improve
the lives we touch
. In 2025, our
purpose-led, performance-driven
approach was enabled by initiatives that
strengthened leadership capability and
supported sustainable growth in line
with our
forever caring
promise.
Convatec Cares
Our approach to responsible business,
Convatec Cares, continues to guide how
we embed environmental, social and
governance (ESG) practices across the
company and is integrated within our
FISBE strategy. Convatec Cares supports
our ability to accelerate delivery of
sustainable growth and underpins
our long-term success. In 2025, we
reviewed our progress, informed by
stakeholder insights and market practice,
to ensure we remain focused on topics
which are most important to our
business and stakeholders.
A solid platform to accelerate
for growth
I am pleased to report that Convatec
delivered another year of strong results
in 2025, bringing to life the strongest
pipeline of innovative new products
in our almost 50-year history. We have
continued to execute on our FISBE
(Focus, Innovate, Simplify, Build,
Execute) strategy and ensured
consistent delivery of double-digit
adjusted earnings per share (EPS)
and free cash flow to equity growth.
Maintaining strong leadership
Ensuring we have the right talent and
succession planning at all levels in the
business is critical to Convatec’s success.
Following the unexpected events in
H2 2025, the Board acted decisively,
appointing Jonny Mason as CEO and
Fiona Ryder as CFO, after due
consideration and detailed succession
planning. Jonny and Fiona are both
highly experienced leaders who embody
our values and bring the expertise
required to accelerate delivery of
sustainable growth. Further details,
including information on the Board
and Committee’s talent and succession
planning, can be found on page 92.
Strong execution of our strategy
In 2025, the Board played an active role
in shaping and endorsing key strategic
initiatives. We supported the approval,
launch or expansion of a number of new
products across each of our care
categories. In Advanced Wound Care,
innovation includes: ConvaFoam™,
Aquacel™ ConvaFiber™ and ConvaNiox™;
for Ostomy Care: Esteem Body™
continues to perform strongly; in
Continence Care: GentleCath Air™ for
Women is gaining share; and Infusion
Care delivered very strong growth
through new customers and therapies,
notably Neria™ Guard for AbbVie’s
Parkinson’s treatment.
We made significant progress in 2025
on clinical evidence generation and
dissemination, increasing the number
It is impossible to reflect on the past year
without thinking of Karim Bitar and his
leadership of Convatec’s turnaround. Karim
had an unshakeable focus on people relying
on Convatec products, services and
solutions. His legacy at Convatec will be felt
for many years to come, and he is missed by
everyone who worked with him. All Board
members wish to convey their deepest
condolences to Karim’s family and extend
their gratitude to everyone that shared kind
words, tributes and support.
The fact that both our Chief Executive
Officer and Chief Financial Officer
successors were internal appointments
is further testament to Karim’s impact and
the strength of talent Convatec has built
in recent years. On behalf of the Board,
I am grateful to Jonny and Fiona for the
determination they have brought to
their new roles to deliver value for
all our stakeholders.
of active clinical studies, randomised
controlled trials and journal publications.
We increased our operational
resilience with further investments in
infrastructure, automation and capacity
across our manufacturing network
as we respond to growing demand,
whilst maintaining our commitment
to safety and quality.
Looking ahead, the Board will review
and approve the evolution of Convatec’s
strategy, which will be outlined at our
Capital Markets Day on 9 April in London.
2025 trading and dividend
Reported revenue was $2,439m, up
6.5% YoY (up 5.0% on a constant currency
basis). Operating profit was $316m on a
reported basis (2024: $325m) and $544m
on an adjusted basis (2024: $485m).
Our adjusted operating profit margin
increased by 110 basis points to 22.3%
(2024: 21.2%), driven by further
simplification and productivity initiatives
in operations and G&A. We showed
resilience in navigating the effects of
market uncertainty in key geographies
in the year, including in the United States
where we saw $30m lower InnovaMatrix
®
revenue following the announcement of
now fully withdrawn Local Coverage
Determinations (LCDs). The Centers for
Medicare & Medicaid Services (CMS)
published changes to the biologics sector
reimbursement, effective 1 January 2026,
which we expect to represent a
headwind of approximately 2% of Group
revenue. As a result, we have recognised
an impairment charge of $72m as set out
in the Financial Review on page 24.
Adjusted diluted EPS increased by 16%,
and net debt to EBITDA leverage at
31 December 2025 was 2.0x (2024: 1.8x),
reflecting our $300m share buyback
which was completed in December 2025.
Given our strong financial performance,
robust balance sheet and the Board’s
continuing confidence in future growth
prospects, the Board recommends a final
dividend of 5.367 cents per share. This
results in a full-year dividend of 7.244
Forever caring in action
Chair’s statement
7
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
The framework is built around four pillars:
–
Delivering for our customers
–
Enabling our people to thrive
–
Behaving ethically and transparently
–
Protecting the planet and supporting
communities
Our Responsible Business review (pages
32 to 53) provides commentary on key
topics and progress, including governance,
metrics and targets, and supports our
commitment to ensure stakeholders have
information on why this is important for
Convatec’s customers, colleagues,
communities and shareholders.
Convatec remains committed to the highest
standards of corporate governance, as set
out on pages 78 to 121 in our Governance
Report which provides detail on our
framework and the Board’s stakeholder
engagement activities.
Closing remarks
The ongoing commitment, hard
work and dedication of our colleagues
remains clear to all Board members,
as our leaders and teams execute
Convatec’s strategy and bring our
vision and
forever
caring
promise to life.
I was pleased that our overall colleague
engagement remained in the top decile
of our industry. Fellow Board member,
Sharon O’Keefe, shares more about
our colleague engagement efforts
on page 90 as the Board’s Workforce
Liaison Champion – a role she has
undertaken since 2022. I’m grateful
to all fellow Board members for their
many contributions.
In closing, I would like to take this
opportunity to thank shareholders
for their support. The Board remains
focused on the continued execution
of our strategy. Convatec has
demonstrated again that it is a very
resilient business, and, despite ongoing
market headwinds covered in this report
by our CEO and CFO on pages 11 and 23,
is well placed to continue to accelerate
forever
caring
through 2026 and beyond.
Dr John McAdam CBE
Chair
23 February 2026
How we realise our vision
OUR VISION
Pioneering
trusted medical solutions
to improve the lives we touch
OUR PROMISE
Forever caring
OUR STRATEGY: FISBE
Focus
on strengthening
customer loyalty
in key markets
Innovate
to increase vitality
of trusted medical
solutions
Simplify
to improve
productivity across
our organisation
Build
and embed
mission-critical
capabilities and
winning culture
Execute
with excellence,
while integrating
environmental, social &
governance practices
OUR VALUES
Our values ensure we all work and act in ways that deliver our
forever caring
promise, every day.
These were shaped by thousands of colleagues in 2020 and we continue to embed them across Convatec.
Improve care
We are passionate
about serving and
supporting people
with deeply personal
and challenging
medical conditions
Deliver results
We consistently
deliver excellent work,
say what we do and
do what we say
Grow together
We help our colleagues
around us grow,
develop and thrive,
so we can all fulfil
our potential
Own it
We take personal
ownership of all our
work: demonstrating
initiative, innovating,
taking smart risks
and never settling
for second best
Do what’s right
We behave ethically
and exemplify the
highest standards of
integrity in every area
of our work to make
a positive difference
OUR ESG FRAMEWORK: CONVATEC CARES
Customers
Delivering for
our customers
Colleagues
Enabling our
people to thrive
Commerce
Behaving ethically
and transparently
Communities
Protecting the planet
and supporting
communities
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Convatec Annual Report and Accounts 2025
Strategic report
OUR BUSINESS MODEL
Quality &
operations
Manufacture with
quality and at scale
c.5,000 manufacturing
colleagues across 7 locations
Drive productivity and
increase gross margin
Enhance efficiency
across our supply chain
Sales, marketing
& service
Commercialise globally
Customer support across
the continuum of care
Measure loyalty and learn
OUR EXPERTISE
Deep sector
knowledge
Talented
workforce
Innovation
mindset
Strong quality
brands
Manufacturing
capability and
robust supply
chain
Relationships
with customers
Delivering our
forever caring
promise
Our business model
Convatec is a medical products and
technologies company focused on solutions
for the management of chronic conditions.
We sell over 1 billion products worldwide
annually, helping millions of customers,
including patients, consumers and
healthcare professionals
Research &
development
Identify unmet needs
Usability and human
factor design
Process and solution
development
Clinical development
Regulatory submission
Benefit chronic
care patients and
society
Deliver
double‑digit EPS
& free cash flow
to equity² CAGR
Reinvest for
future growth
Distribute to
shareholders
$103m
investment in 2025
$185m
total capex in FY25, of
which $121m was growth
capex
cNPS
in 20 countries
See page 9 for footnotes.
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Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Performance was strong in 2025,
evidenced by 6.4% organic revenue
growth
2
excluding InnovaMatrix
®
(4.8% including InnovaMatrix
®
),
adjusted operating margin up c.110 bps
to 22.3% and adjusted EPS
2
up 16.0%
(reported diluted EPS 8.6 cents). Growth
was broad-based across categories,
geographies and products.
In 2025 we sold over 1 billion high-quality
consumable products and are among a
small number of leaders in the categories
in which we operate, and we are market-
leading in categories contributing over
60% of Group revenues. There are
notable synergies across the Convatec
categories in areas such as product and
clinical development, automated
manufacturing, polymer and biomaterial
sciences, adhesive technologies, sales
& marketing and shared mid-and-back-
office processes.
Further growth in operating margin
Adjusted operating margin
1
increased by
110 bps to 22.3% (22.2% on a constant FX
basis; 13.0% reported). This was despite
a $30m reduction in InnovaMatrix
®
sales, and c.$6m incremental tariffs YoY.
Margin growth was driven by further
simplification and productivity in
operations and G&A, pricing and
operational leverage.
Our simplification and productivity
initiatives continued to progress well. In
Global Quality & Operations, we further
increased automation in our facilities and
continued to optimise our plant network
for scale and efficiency. In commercial
areas, our Centres of Excellence (CoE)
in Global Marketing & Sales, Pricing
and Market Access & Reimbursement,
positively supported our delivery
across each category.
We delivered further G&A savings by
expanding Convatec Business Services
(CBS) beyond Finance, IT and HR
activities and CBS will continue to expand
in 2026, supported by ongoing adoption
of AI and automation. Adjusted G&A
1
was
flat YoY at $166m, representing 6.8% of
revenue (2024: 7.2%). Overall adjusted
operating expenses represented 38.4%
of revenue (2024: 39.8%).
Adjusted operating margin has increased
460 bps since 2021, despite high inflation
in 2022/23. We are on track to deliver
our medium-term adjusted operating
margin
1
target of mid-20s% by 2027.
Overall, our resilient business model is
highly scalable and is well-positioned to
deliver sustainable double-digit annual
growth in adjusted EPS
2
.
FISBE strategy: 2025 progress
Our FISBE (Focus, Innovate, Simplify,
Build, Execute) strategy again delivered
strongly in 2025.
Focus
We operate across four chronic care
categories, with high recurring revenue,
across 12 key countries. Revenue growth
was strong across these focus areas,
supported by new product launches
and our deep focus on customers.
Innovate
We invested c.$103m in R&D opex
in 2025. We have the strongest new
product pipeline in our history and
continued to strengthen Technology
& Innovation capabilities. We have
launched eight new products in the
last three years and are extending
these launches across our focus
markets. We are also on track to launch
a further eight in 2026-27. Our Vitality
Index continues to demonstrate high
levels of innovation.
Delivering accelerated,
profitable growth
“Strong delivery drove mid-teens EPS
growth in 2025, and we are upgrading
our medium-term organic revenue
growth targets”
Chief Executive Officer’s review
1.
Consistent with prior years, management present adjustments to the reported figures, to produce more meaningful measures in monitoring the underlying
performance of the business. These are set out in the tables on pages 29 to 31.
2. Certain financial measures in this document, including adjusted results, are not prepared in accordance with International Financial Reporting Standards (IFRS).
All adjusted measures are reconciled to the most directly comparable measure prepared in accordance with IFRS in the Non-IFRS Financial Information (see pages
28 to 31).
10
Convatec Annual Report and Accounts 2025
Strategic report
Chief Executive Officer’s review
continued
Simplify
Further good progress, evidenced by
c.110 bps increase in adjusted operating
margin. We continued to realise the
benefits of the network optimisation
completed in 2023-24, with more
production capacity at our large Slovakia
site. Ongoing investments in automation
are also driving improved productivity.
Build
Investments in R&D, capex and clinical
knowledge are clear examples of adding
capability to Convatec. This includes our
long-term R&D US and UK R&D
expansion commitment announced in
October. In the period we invested
$121m of growth capex (2024: $59m).
This included a new high-speed line in
Infusion Care (due to be in operation
from 2027), increased capacity for
Esteem Body™ and ConvaFoam™ (both
due in 2026) and further packaging
automation in AWC. Our Marketing &
Sales Centre of Excellence (CoE) launched
a new global patient service platform in
our me+™ programme, which marked its
tenth anniversary. To coincide, Convatec
published a new report revealing that
millions of people feel they need to hide
their health conditions in plain sight.
Execution
Our Strategic Pricing CoE, in collaboration
with categories, supported the delivery of
30 bps improvement in pricing, included
in our gross margin. Our Market Access &
Reimbursement CoE continued to support
our existing brands and new product
pipeline. In clinical evidence, we made
significant progress across all categories,
including in our ongoing InnovaMatrix
®
Randomised Controlled Trials, on track
to publish in 2026.
We are committed to executing
responsibly to create value. In line
with our goal to achieve net zero by
2045, we reduced Scope 1 and Scope 2
greenhouse gas emissions by 6.9% in
2025. We continued to build an inclusive
culture, achieving a top decile employee
engagement score. In 2025, over
210,000 healthcare professionals
and patients participated in Convatec’s
educational programmes, and we
supported Partners In Health who
reached over 250,000 people
living with chronic conditions in
underserved communities.
Update on US reimbursement
Ostomy & Catheters – proposed
competitive bidding program
As previously reported, on 28 November
2025 Centers for Medicare & Medicaid
Services (CMS) released a final rule
outlining updates for the 2026 Medicare
Home Health payment system and the
Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS)
Competitive Bidding Program (CBP).
Medicare beneficiaries currently enjoy
access to a wide range of personalised
catheter and ostomy products, plus
significant support and advice. The
proposed rule changes could impact the
choice and supply available to patients and
providers. CMS will follow an extensive
process to implement the changes.
CMS has stated they are seeking 8-10
large, nationwide suppliers in each of
Continence and Ostomy, compared to
several thousand suppliers today. Should
CMS proceed with CBP, we are well-placed
to grow given our leading customer
service and loyalty, attractive segment
positions and differentiated portfolio. We
continue to anticipate a 1-2% reduction in
Group sales in the year of implementation,
which CMS has indicated will be 2028.
Changes to biologics sector
reimbursement
On 31 October 2025, CMS published a
decision outlining their revised payment
rate of $127.28 per sq cm for skin
substitutes with effect from 1 January
2026. This payment rate represented a
significant price reduction for Convatec’s
InnovaMatrix
®
product, which is a leading
porcine placental-derived extra-cellular
matrix for treatment of chronic, surgical
and trauma wounds. On 24 December
2025, CMS further announced that local
coverage determinations for skin
substitutes had been fully withdrawn.
Convatec welcomed this decision, which
meant appropriate Medicare patients and
their healthcare professionals across the
US can continue to benefit from all
InnovaMatrix
®
products, nationally.
InnovaMatrix
®
is a highly effective
product with significant health benefits
to patients and healthcare professionals.
It has strong user feedback and real-
world clinical evidence. Our randomised
controlled trials continue to progress
towards publication later this year.
In addition to strong clinical benefits,
InnovaMatrix
®
has competitive
manufacturing costs. We are well
positioned to support Medicare patients
Organic revenue growth
2
excluding InnovaMatrix
®
6.4%
(2024: 6.8%)
Adjusted operating margin
1
22.3%
(2024: 21.2%)
Adjusted diluted
EPS growth
16.0%
(2024: 13.7%)
11
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
and their healthcare professionals
across the United States with
all InnovaMatrix
®
products, which have
generated strong user feedback and
clinical evidence. We see opportunities
to gain volume in 2026, and believe we
will deliver long-term, profitable growth
from InnovaMatrix
®
.
This CMS decision represents an
estimated headwind in 2026 of c. 2% of
Group revenue, and therefore we expect
InnovaMatrix
®
revenues in FY26 of
c.$20m (2025: $69m). As a result of the
estimated impact on future forecasts,
we have recorded a $72m impairment in
respect of the intangible asset identified
upon the acquisition of Triad Life
Sciences in 2022.
Positively executing capital
allocation to accelerate growth
Our strong cash generation supports
both investment for growth and returns
to shareholders, consistent with our
clear capital allocation priorities. These
are: 1) fund organic investment to drive
future revenue growth and innovation;
2) pay an annual dividend consistent with
35-45% payout ratio; 3) conduct focused
M&A to strengthen competitive offering,
and 4) any surplus capital would be
available for return to shareholders.
Our target net debt to adjusted EBITDA
leverage remains 2.0x (2025: 2.0x).
Having transformed key areas of our
production network in recent years, our
2025 focus was on expanding capacity
and new product development. We have
further categorised capital expenditure.
Growth capex develops new products
and creates or increases capacity, and
in 2025 was $121m (2024: $59m).
Operational capex maintains our existing
operations as well as improving
technology, capability and productivity
and in 2025 was $64m (2024: $63m).
As evidence of our priorities, in addition
to increased growth capex, we grew our
dividend by 13%, paid net earn-outs
of $25m in respect of historic M&A and
completed a $300m share buyback.
Given the exciting product pipeline and
high demand for our products, we have
identified further compelling organic
investment opportunities to accelerate
growth. We expect total capex in 2026
of c.$200-$230m, including growth
capex of c.$135-$165m. We expect
operational capex to run at c.2.5%
revenue annually. Growth capex will flex
to the opportunities available, consistent
with our clear capital allocation
framework.
We are investing across all categories,
but particularly in IC where we see
significant demand, and our growth is
underpinned by long-term contracts.
We are also diversifying manufacturing
across existing locations, further
increasing our resilience. In AWC, we
are adding capacity in ConvaFoam™,
and investing to underpin three further
product launches over the next two
years (ConvaNiox™, Aquacel™
ConvaFiber™ and ConvaVac™). In OC,
our Esteem Body™ launch is delivering
ahead of plan, and we are adding further
production capacity while also planning
for the launch of Natura
®
Body in 2027.
In CC, we are investing in the launch of
GentleCath Air Pocket™ and GentleCath
Air Set™, our new compact catheter
products. We expect all these
investments will be accretive to
Group return on capital.
Delivering for our patients, payors
and customers
Our strategy focuses on 1) superior
patient outcomes and choice; 2) value
for money for payors and 3) outstanding
results for healthcare professionals. This
enables sustainable growth, despite
reimbursement dynamics.
We have the strongest product pipeline
in our history, with eight products
launched in 2022-2025 and a further
eight due to be launched in 2026-27. We
have also made significant progress in
generating clinical evidence and building
market access capability.
Confidence in 2026 outlook
We continue to expect Group organic
revenue growth excluding InnovaMatrix
®
of 5.0%-7.0%. Given the uncertainties
noted earlier, we expect InnovaMatrix
®
revenue of c.$20m, representing a
headwind of c.2% of Group revenue.
Adjusted Group operating margin
1
≥
23.0%, inclusive of c.20 bps of
incremental YoY tariff costs. This will
be underpinned by detailed productivity
improvement programmes.
Another year of double-digit adjusted EPS
1
growth, backed by strong cash generation.
Accelerating organic revenue
growth target from 2027
2025 represented our fifth year of
broad-based organic revenue growth
within our target 5-7% range (ex-
InnovaMatrix
®
) and our fourth year
of adjusted operating margin progress.
We believe our growth is set to
accelerate, driven by successful
implementation of our strategy, recent
product launches and our rich product
pipeline. Faster growth will also be
supported by higher growth capex. As
a result, we are increasing our organic
revenue growth target from 5-7% to
6-8%, from 2027.
Further information and our plans on
how we will deliver faster growth will be
provided at our Capital Markets Day on
9 April in London.
On‑track to deliver our medium‑
term guidance
We are positioned to deliver sustainable
6-8% p.a. organic growth from 2027.
We are also on track to reach mid-
20s% adjusted operating profit margin
by 2027, supported by productivity
improvements and positive
operating leverage.
Jonny Mason
Chief Executive Officer
23 February 2026
12
Convatec Annual Report and Accounts 2025
Strategic report
17.7%
19.5%
20.2%
21.2%
22.3%
2021
2025
2024
2023
2022
8.3%
(3.1)%
6.1%
13.7%
16.0%
2021
2025
2024
2023
2022
222
(18.5%)
61.9%
23.2%
0.1%
181
293
361
362
2021
2025
2024
2023
2022
Tracking our
progress
Key performance indicators
Financial metrics
Organic revenue
growth (%)
Adjusted operating
profit margin (%)
Adjusted diluted
EPS growth (%)
Free cash flow to equity
growth (FCFE) (%)
Metric
Year‑on‑year (YoY) revenue
growth at constant currency,
adjusted for acquisitions,
divestments and discontinuations.
Relevance
Sustainable top‑line growth
is a key strategic pillar and a
metric by which investors
judge our progress.
Our medium‑term annual
revenue growth target is
increasing to 6‑8% from 2027.
Remuneration linkage
Organic revenue growth excl.
InnovaMatrix
®
has a weighting of
25% of the annual bonus for
Executive Directors and is used as
a metric for all colleagues in
our annual bonus plan.
Organic revenue growth
has 25% weighting within
the 2025 LTIP plan.
2025 performance
We delivered broad‑based
organic growth of 4.8%, or 6.4% excl.
InnovaMatrix
®
. This was driven by
mid single‑digit organic growth in
Advanced Wound Care (excl.
InnovaMatrix
®
) and Ostomy Care,
mid‑to‑high single digit growth in
Continence Care and double‑digit
growth in Infusion Care.
See page 23 for further details
Metric
Adjusted operating profit¹ as
a % of Group revenue.
Relevance
Adjusted operating profit
margin reflects how effective
we are at running our business.
Increasing profitability is a key
metric by which investors judge
our strategic progress.
Our target is to deliver a
sustainable mid‑20s% adjusted
operating margin by 2027.
Remuneration linkage
Adjusted operating profit
($m) has a weighting of 40% of
the annual bonus for Executive
Directors and is a metric used
for all colleagues in our annual
bonus plan.
2025 performance
Our adjusted operating profit
margin increased by 110 bps to
22.3%. This was driven by
revenue growth, productivity
initiatives and reduction in
operating expenses as a
percentage of revenue.
See page 29 for further details
Metric
YoY growth of adjusted
diluted EPS.¹
Relevance
Growth in adjusted diluted EPS
illustrates our ability to deliver
sustainable and profitable growth
overall, including the impact of
any M&A undertaken to further
strengthen the business. It is a
key metric by which investors
judge our strategic progress.
In 2023, we indicated a target of
growing adjusted diluted EPS by a
double‑digit compound annual
growth rate each year.
Remuneration linkage
Adjusted EPS growth has a
weighting of 50% within the 2025
LTIP awarded to Executive
Directors and senior leaders
across the business.
2025 performance
Adjusted diluted EPS grew 16.0%
in 2025, driven by adjusted
operating profit up 12.1%, lower
finance costs and the reduction in
the diluted weighted average
number of shares.
See page 30 for further details
Metric
YoY growth of free cash flow to
equity¹. Given our strategic
investments to accelerate
growth, we have updated this KPI
to exclude growth capex.
Relevance
Free cash flow to equity reflects
how effectively we convert profit
into cash after working capital,
operational capex, adjusting
items, tax and interest. The Board
believes this measure is superior
as this cash is then available for
organic and inorganic investment
or to distribute to shareholders,
in line with capital allocation
framework.
We expect to grow our free cash
flow to equity by a double‑digit
compounded annual growth rate
over the medium term.
Remuneration linkage
Free cash flow to equity has a
15% weighting within the annual
bonus for Executive Directors and
a 20% weighting for other
colleagues who participate in our
annual bonus plan.
2025 performance
FCFE increased by 0.1% (FY24:
23.2%). On a comparable basis to
prior year, FCFE decreased by
27.6% (FY24: increased by 32.5%).
See page 26 for further details
1.
Definitions of adjusted measures are shown in the reconciliation tables on pages 29 to 31.
5.3%
5.6%
6.0%
6.8%
7.2%
7.7%
4.8%
6.4%
2021
2025
2024
2023
2022
Excluding InnovaMatrix
®
%
13
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
2025
2024
2023
2022
30.2
27.4
22.8
(23)%
(9.3)%
(16.8)%
(6.3)%
21.4
26%
27%
30%
26%
2025
2024
2023
2022
Target 70%
31.9%
55.4%
61.8%
64.4%
2025
2024
2023
2022
38%
44%
45%
48%
2025
2024
2023
2022
Metric
YoY reduction in the number of
complaints received per million
(CPM) products sold in our
direct‑to‑consumer categories.
Relevance
CPM is a strong indication of
manufacturing quality. It is a
reflection of our core capabilities
and ability to execute effectively,
connected to both safety and
efficacy of our product. We
targeted to reduce CPM by 5%
during 2025.
Remuneration linkage
Executive Directors, plus certain
members of CELT and the Quality
leadership team, are incentivised
to deliver improvement as part of
their objectives.
2025 performance
YoY reduction of 6.3% in our
direct‑to‑consumer categories.
In 2025, we continued to drive
CPM process improvements
within our business‑to‑business
(B2B) category, including ongoing
collaboration with major partners
and stakeholders.
See page 36 for further details
on our approach to quality
Metric
The percentage of total revenues
that are generated from new or
significantly upgraded products
and services launched by
Convatec in the preceding
five‑year period.
Relevance
The vitality index is a measure of
how effective our innovation
efforts are at meeting patients’
needs and delivering for
customers. In 2022, we set a
target to reach a vitality index of
30% by Q4 2025.
Remuneration linkage
Executive Directors, plus certain
members of CELT and the Global
Operations leadership team, are
incentivised to deliver
improvement as part of their
objectives.
2025 performance
We remained within our target of
c.30% vitality index, with a decline
mostly resulting from AWC
portfolio changes.
Metric
Reduction in our combined Scope
1 and 2 GHG emissions, from a
2021 baseline.
Relevance
Convatec has set an ambition to
reach net zero carbon emissions
by 2045.
We target to reduce our Scope 1
and 2 emissions by 70% by 2030,
against a 2021 baseline.
Remuneration linkage
Executive Directors, plus certain
members of CELT and the Global
Operations leadership team, are
incentivised to deliver
improvement as part of their
objectives.
2025 performance
We reduced emissions by
procuring renewable energy for
all global sites, and implementation
of energy efficiency projects to
reduce fossil fuel use.
We continued replacing spend‑
based emission factors in our
Scope 3 footprint data, supporting
prioritisation of key initiatives.
See pages 51 and 52 for more
detail about carbon emissions
across all categories
Metric
Proportion of females
in combined CELT and
senior management.
Relevance
We recognise that by building
an inclusive, purpose‑led,
performance‑driven company
we can deliver more for our
customers.
In 2024, we set a target of 50%
female representation in senior
management by Q4 2027.
Remuneration linkage
Executive Directors, plus
members of CELT and
members of the HR leadership
team, are incentivised to
deliver improvement as part
of their objectives.
2025 performance
We progressed towards our 2027
target with 48% of senior
management positions being
held by females. Baseline
population numbers are
subject to YoY variation.⁴
Non‑financial metrics¹
Quality – complaints
per million change (%)²
Product innovation
– vitality index
Environmental
progress – Scope 1
and 2 greenhouse gas
(GHG) emissions³
Inclusion – proportion of
female representation at
leadership level
4
1.
As we regularly review our responsible business ambitions to ensure they reflect priority topics, it is possible we may modify our non‑financial KPIs in the future.
These non‑financial KPIs feature as ESG metrics.
2. Percentage movements are calculated on actual unrounded numbers.
3. A set of non‑financial metrics received limited assurance, as described on page 33. These included Scope 1 and 2 absolute emissions and intensity.
4. Defined as Convatec Executive Leadership Team (CELT) and their direct reports, excluding executive assistants. Total population in 2025 was 81 (2024: 78).
14
Convatec Annual Report and Accounts 2025
Strategic report
Operational review
Advanced Wound Care
Tanja Dormels
President & Chief Operating Officer,
Advanced Wound Care
2025 performance
Revenue of $753m increased by 1.4% on a
reported basis and decreased by 0.4% on
an organic basis. Excluding InnovaMatrix
®
,
AWC organic growth was 4.1% (FY24: 4.2%).
As expected, InnovaMatrix
®
declined by
30% to $69m given market uncertainty
around the now-withdrawn Local
Coverage Determinations. We expect
InnovaMatrix
®
revenue of c.$20m in 2026
due to the revised payment rate of $127.28
per sq cm for skin substitutes.
Growth was driven by good performance
in North America and GEM. We saw an
excellent contribution from ConvaFoam™
which is taking share in the US and Europe.
Aquacel
®
Ag+ Extra™, our leading
antimicrobial product, continued to deliver
good growth.
AWC key focus areas are:
Building on strong positions and
extending recent launches:
–
Continuing to grow our leading
Hydrofiber
®
brand Aquacel
®
Ag+ Extra™
–
Ongoing launch and geographic
expansion of ConvaFoam™,
including new capacity
–
Further enhanced commercial
execution and increasing sales
per employee
Continuing to develop new products and
the AWC pipeline:
–
Generating clinical evidence from
the ongoing European launch of
ConvaNiox™, our groundbreaking
nitric oxide dressing, and planning
for our launch in the US
–
Aquacel™ ConvaFiber™, our enhanced
Hydrofiber
®
dressing, approved in the
EU & US, launching in H1 26
–
ConvaVac™, our single-use negative
pressure wound therapy product,
launching in H2 26
Positioning InnovaMatrix
®
to win in US
skin substitutes:
–
Progressing our RCTs, recognising
our sales team and optimising our
go-to-market strategy
–
Gain volumes from high-cost
competitors
–
Building the foundations to deliver
growth in 2027 and beyond
Source: SmartTRAK; biologics uses SmartTRAK’s 2026 forecast xenograft segment size; 2026 forecast total skin substitute segment size, including allograft, is c.$3bn
AWC: new product launches to accelerate growth
Category
size
Products
Single‑use
negative pressure
Biologics
Foam
Antimicrobials
Segment size
$2.3bn
Segment size
$1.0bn
Segment size
$0.5bn
Segment size
$1.2bn
CAGR
c.5%
CAGR
c.6%
CAGR
c.6%
CAGR
c.13%
Total sales $m
Organic growth %
Organic growth excluding
InnovaMatrix
®
%
Performance
592
621
695
743
753
9.2
6.8
9.5
5.7
4.2
4.1
7.4
(0.4)
2025
2024
2023
2022
2021
Strategic report
Additional information
Financial statements
Governance
15
Convatec Annual Report and Accounts 2025
Managing hard‑
to‑heal wounds
with Convatec’s
Wound Hygiene
protocol of care
Convatec’s long established
four-step Wound Hygiene
protocol¹ helps healthcare
professionals (HCPs) manage
hard-to-heal wounds with an
antibiofilm intervention. The four
steps are: 1) cleanse, 2) debride,
3) refashion and 4) dress.
Last year, we published a case study about
a patient with a venous leg ulcer (VLU) with
the Kings Lynn Primary Care Network in
Norfolk, UK, an NHS collaboration between
several General Practice (GP) surgeries,
designed to support HCPs and their
continued professional development.
The patient, a 74-year-old man, had a history
of chronic conditions including type 2 diabetes,
hypertension, atrial fibrillation, colon cancer
and rheumatoid arthritis. The patient’s VLU
first occurred in 2008, and he had suffered
several recurrences.
Prior to commencing Wound Hygiene, the
wound was unsuccessfully managed with
alternative dressings and compression for
several months.
Convatec’s Aquacel
®
Ag+ Extra™ was used
and the protocol was followed at every
dressing change. After six weeks of
treatment, c.70% of the wound had ‘bridged’,
forming two smaller separate wounds. The
patient reported significant pain reduction.
After 10 weeks of treatment, the upper
wound had healed, and the lower wound had
reduced significantly. After 16 weeks of
treatment, the wound had almost fully
healed, and the pain had stopped completely.
Hard‑to‑heal
wounds are a
large and
growing
segment
100m patients
1
globally annually
c.50% unhealed
despite therapy
2
2-4% of healthcare
budgets
3
Hard‑to‑heal wounds require innovative medical solutions
c.80% of
hard‑to‑heal
wounds have
biofilm
4
Bacteria forms a
biofilm that is often
resistant to
antibiotics and
requires physical
intervention
4
Aquacel
®
Ag+
Extra™
delivers
superior wound
healing
5
Convatec’s MORE
THAN SILVER
disrupts and
destroys biofilm by
combining three
powerful
components
4
Aquacel
®
Ag+ Extra™ is the leading
antimicrobial dressing
1.
Human Wound and Its Burden: Updated 2020 Compendium of Estimates.
2. Cohort study UK National Health Service 2017/18.
3. Guest et al. BMJ 2020.
4. Bowler et al. Wound Medicine 2016.
5. Beraldo et al. JWC 2025.
Wound at presentation
Week 16 of Wound
Hygiene protocol
1.
Murphy C, Atkin L, Vega de Ceniga M, Weir D, Swanson
T. International consensus document. Embedding
Wound Hygiene into a proactive wound healing
strategy. J Wound Care 2022;31:S1–S24
16
Convatec Annual Report and Accounts 2025
Strategic report
Operational review
Ostomy Care
Bruno Pinheiro
President & Chief Operating Officer,
Ostomy Care
2025 performance
Revenue of $676m grew by 6.6% on
a reported basis, by 5.0% in constant
currency and 4.5% on an organic basis.
Regionally, good growth in the US was
supported by our Home Services Group
(HSG) with a continued increase in
patient starts. Growth in Europe
increased and GEM was strong.
Esteem Body™, our one-piece soft
convex product, delivered very strong
growth and is ahead of our expectations.
Growth was also strong in our Esenta™
accessory products, which represented
c.20% of OC sales. Growth was slower in
Flexi-Seal™, our leading faecal
management product, although we are
on-track to launch our updated Flexi-
Seal™ Air product in H1 26.
We were delighted to secure a place on
the Captis Vizient US Group Purchasing
organisation (GPO) contract for ostomy
products in November 2025. This was
our first ostomy product GPO win in over
five years. Additionally, in February 2026
we secured a further GPO win in OC with
Premier Inc. and Premier AscenDrive.
OC key focus areas are:
Continuing to progress our innovation
pipeline:
–
Continuing to win share with
Esteem Body™
–
Launching Flexi-Seal™ Air, an
evolution of our leading faecal
management system in the US in H1 26
–
Developing Natura
®
Body, our
two-piece soft convex product
launching in 2027
Further improving commercial execution
across the continuum of care (acute,
post-acute and community):
–
Driving US new patient starts through
continued close collaboration with
HSG and strategic partners
–
Enhancing patient engagement
through Convatec’s me+™ programme
in key geographies
Source: Market dynamics, segment size, growth rates and positions based on internal analysis and publicly available sources.
1.
llsop M, et al. Quality of life profiles and their association with clinical and demographic characteristics and physical activity
in people with a stoma: a latent profile analysis. Qual Life Res. 2022;31(8):2435-2444. doi:10.1007/s11136-022-03102-5.
Global trends driving growth
Ageing
population
and increase
in life
expectancy
Rise in
underlying
conditions
(e.g. cancer)
Improved
access in
emerging
markets
~2.8m
patients¹
Often
lifelong
conditions
Growing
faster than
developed
markets
Large growing markets with
attractive recurring revenue
c. $3.7bn
c. 3%
growth p.a.
North America
22%
Europe
56%
Rest of world
22%
Services
Supporting patients across
the continuum of care is
critical to achieving growth
Products
Total sales $m
Organic growth %
Performance
615
583
608
634
676
2.0
1.7
4.2
5.3
4.5
2025
2024
2023
2022
2021
–
Increasing interactions with HCPs
through our education programmes
in partnership with key stakeholders
like the US Wound, Ostomy and
Continence Nurse Society
®
Additional information
Financial statements
Governance
Strategic report
17
Convatec Annual Report and Accounts 2025
Esteem Body™
is helping
improve lives
Bindhu*, from London,
UK, faced years of challenges
in managing her stoma
after being diagnosed
with colorectal cancer
in 2016 until she found
Convatec’s Esteem Body™
and me+™ patient support
programme.
Following surgery for an ileostomy in 2021,
Bindhu described struggling with leaks, sore
skin, and a sedentary lifestyle. Despite trying
many different products on the market, she
said she felt trapped and disempowered,
unable to find a reliable solution.
In March 2024, Bindhu said she began to
feel a notable shift in her daily life when she
discovered Amcare by Convatec. Darrion,
a dedicated Amcare colleague, provided
tailored support, working closely with
Bindhu’s stoma nurse, Megan, to identify
the right product for her unique needs.
Convatec’s Esteem Body™ with Leak
Defence™ emerged as the right solution;
“For the first time in years, I was able to
wear one pouch a day – something I never
thought would be possible!” Bindhu shared
**
.
With Esteem Body™, Bindhu said she felt a
positive shift in her comfort and confidence.
“Leaks and sore skin breakdowns no longer
dictate my life,” Bindhu said. She now feels
able to enjoy activities such as walking, playing
with her children, and visiting the beach.
Convatec’s promise of
forever caring
came
to life through Convatec’s me+™ programme
and innovative solutions for Bindhu and
thousands of people like her, enabling
people to reclaim their freedom and live
life to the fullest.
*
Image used for illustrative purposes only.
** Comments are customer experiences and do not
necessarily reflect medical claims or advice.
18
Convatec Annual Report and Accounts 2025
Strategic report
Operational review
Continence Care
Mark Jassey
President & Chief Operating Officer,
Continence Care & Home Services
Group
2025 performance
Revenue of $537m grew by 7.1% on
a reported basis, by 6.8% in constant
currency and 6.6% on an organic basis.
Performance was driven by US volume
growth as we continued to gain share,
driven by our leading customer service.
This was further supported by faster
growth in Convatec-manufactured
products, which represented c.59% of
revenues, including strong growth in our
GentleCath™ brands. Europe and GEM
grew strongly from a low base, again
adding over 1 percentage point to CC
growth, and we are confident of adding
at least a point to category growth again
in 2026 from outside the US.
Our compact catheter GentleCath Air™ for
Women continued to be well received by
HCPs and customers and is taking share.
CC key focus areas are:
Rolling out launches to new markets:
–
Further extending the launch of
GentleCath Air™ for Women
internationally
–
Introducing Cure™ products in Europe
and GEM
–
Developing GentleCath Air Pocket™
and GentleCath Air Set™ in 2026-27
Further improving commercial execution
globally:
–
Continuing to build and strengthen
commercial teams in Europe and GEM
–
Increase the proportion of Convatec-
manufactured products sold in our
revenue mix
–
Providing the best-connected journey
and experience for customers, HCPs
and payors
Monitoring the situation around the
proposed competitive bidding program
outlined on page 10
Total sales $m
Organic growth %
Performance
405
426
457
501
537
3.4
5.1
6.5
8.3
6.6
2025
2024
2023
2022
2021
Large growing markets with
recurring revenue
c. $2.4bn
c. 3%
growth p.a.
US
35%
Europe
54%
Rest of world
11%
Source: Market dynamics, segment size, growth rates and positions based on internal analysis & publicly available sources including Medicare/CMS.
Catheter usage is largely at home
Customers
require
manual
intervention
to void their
bladders
daily
In‑home
usage,
typically
without any
assistance
Enduring
relationships
via chronic
conditions
and
distinctive
services
3‑6x per day
>95% at home
Average 3‑5
year
relationship
with end‑user
Broad and
growing portfolio
Delivering products
and service
Forward integrated
solutions for high retention
Strategic report
Additional information
Financial statements
Governance
19
Convatec Annual Report and Accounts 2025
Leading in
products
and service
With a wide range of trusted
medical solutions and best-
in-class service, Convatec’s
Home Services Group gives
people confidence in
managing their care through
easy to access, personalised
solutions that support the
whole patient journey.
John
*
, who lives in North Carolina, United
States, has been supported by 180 Medical,
part of Convatec’s Home Services Group, since
2023. John shares his story…
“I was introduced to Convatec’s GentleCath
Glide™ urinary catheters by 180 Medical when
I was first told that I would have to self-
catheterise. I thought, ‘there is no way I can
do that,’ yet here I am today, self-catheterising
four times a day.
“After sampling several products from
different companies, I chose Convatec’s
GentleCath Glide™ with FeelClean
Technology™ because everything is self-
contained within the packaging, including
the catheter and the water to activate its
hydrophilic properties. I don’t have to mess
around with trying to lubricate a long plastic
tube while standing at the toilet.
“My wife and I planned a long trip to Italy last
year, and I was a little concerned about having
to pack my catheters. One phone call to
180 Medical and my problem was solved.
Their support takes the hassle and personal
embarrassment out of having to use a
catheter. GentleCath Air™ is small, light,
discreet, and self-contained. The product
easily fits in my pocket, and after use, I love
how they can be easily replaced in their bag
and safely disposed of.
I am not one to offer compliments for the sake
of it, but the 180 Medical team is always so
friendly and helpful.”
*
Comments are customer experiences and do not necessarily reflect medical claims or advice.
20
Convatec Annual Report and Accounts 2025
Strategic report
Operational review
Infusion Care
Total sales $m
Organic growth %
Performance
316
341
371
411
473
11.5
9.2
8.7
11.2
12.5
2025
2024
2023
2022
2021
Kjersti Grimsrud
President & Chief Operating Officer,
Infusion Care
2025 performance
Revenue of $473m grew by 15.1% on
a reported basis, and by 12.5% on both
a constant currency and organic basis.
Growth was driven by further strong
demand for Convatec infusion sets in both
diabetes and non-diabetes therapies.
In diabetes, revenue growth was high
single-digit as durable insulin pump
penetration grew led by increasing
adoption of automated insulin delivery
and continuing pump innovation.
Diversification of our products and
customers continued to progress very
well, including mylife’s YpsoPump,
Beta Bionics iLet and Tandem Mobi,
plus our Extended Wear Infusion Set
with Medtronic’s 780G.
In non-diabetes therapies, revenue
growth was high double-digit as
penetration of our Neria™ Guard infusion
sets increased in the treatment of pain
management, immunoglobulin deficiency
and Parkinson’s disease.
Our fastest growth was in AbbVie’s
Parkinson’s therapy, now approved in
35 countries and we have significantly
extended our long-term infusion set
supply contract. Non-diabetes therapies
represented c.15% of IC revenue
(2024: c.10%).
We are further diversifying customers
with two other therapies for the treatment
of advanced Parkinson’s, and we look
forward to supporting new partners with
Neria™ Guard infusion sets.
IC key focus areas are:
Resolving the concerns raised in the FDA
Warning Letter received on 2 February
2026 (see page 36), and relating to
quality management system reporting
procedures and protocols.
Supporting customer innovation and
expansion in diabetes:
–
Medtronic’s 780G extended wear,
Tandem Mobi, Beta Bionics iLet and
mylife YpsoPump
–
Increasing penetration of automated
insulin delivery instead of multiple
daily injections
Continuing to diversify outside diabetes:
–
Supporting AbbVie’s Parkinson’s launch
globally and Supernus in the US
–
Increasing penetration of
subcutaneous infusion for other
therapies such as pain management
–
Developing our Neria™ Guard platform
to work with other therapies
Expanding our capacity and operations:
–
To meet accelerating demand, our IC
investments will significantly increase
our Inset™ and Neria™ Guard platforms
capacity by 2028. A material proportion
of this new capacity is supported by
long-term contracts
Subcutaneous drug delivery is relevant to multiple therapeutic areas
Diabetes
Other therapies
Increasing penetration as pumps displace
users currently on multiple daily injections¹
2021
Durable pump
Patch pump
4.0%
1.0%
4.1%
1.2%
4.3%
1.4%
5.0%
1.9%
4.5%
1.6%
2022
2023
2025
2024
1. Seagrove (December 2024).
2. WHO 2022 fact sheet and Convatec estimates based on latest market research.
3. WHO 2020 – Palliative Care fact sheet.
4. Center to Advance Palliative Care facts and stats.
5. Bousfiha et al. Primary immunodeficiency diseases worldwide: more common
than generally thought. JClin Immunol. 2013; 33:1-7.
6. Megan A. Cooper et al. Primary Immunodeficiencies Am Fam Physician.
2003;68(10):2001-2009.
Parkinson’s disease
–
10m patients and 8% market growth²
–
AbbVie & Mitsubishi Tanabe targeting
advanced patients
Pain management
–
7.5m patients³ and 8% market growth
4
–
Morphine and combinations-palliative care
Immunoglobulin deficiency
–
6m patients
5
and 10% market growth
6
–
IgG antibodies: autoimmune conditions and cancer
Strategic report
Additional information
Financial statements
Governance
21
Convatec Annual Report and Accounts 2025
Infusion therapy with
Neria™ Guard brings
confidence
Peter* was diagnosed with Parkinson’s
disease in April 2015. Before starting
infusion therapy, which uses Convatec’s
Neria™ Guard infusion set as its
subcutaneous method of administration*,
Peter’s days were shaped by the
constant unpredictability of managing
Parkinson’s disease.
Peter relied on a wide range of medication multiple times
a day, plus a nighttime dose and an inhaled rescue therapy
whenever symptoms broke through. His ‘on’ and ‘off’ periods
swung sharply, often without warning, making routine
activities hard to manage. “We lived by alarms,” his wife
recalls, with reminders on both their phones dictating every
two-hour dose
*
. “Pain, exhaustion, and the strain of constant
vigilance were a daily reality”, Peter said.
Since beginning infusion therapy, everything feels more
stable. Neria™ Guard can remain in place for up to three days
while the medication is infused continuously
**
. Peter’s ‘on’
and ‘off’ cycles have evened out, with fewer highs and lows
and far less frequent fluctuations. He stays comfortably
within his ‘on’ periods without tipping into dyskinesia.
The biggest difference? “We’re not watching the clock
anymore,” his wife, Karen, says. His sleep has improved, his
pain is reduced, and eating no longer requires strict timing,
giving him the confidence to get out more and re-engage
with activities he enjoys. People in his exercise class have
noticed his progress.
Peter calls the infusion therapy delivery system “incredible”
and “easy to manage”. Peter said that being able to disconnect
for a shower or bath has restored a “welcome sense of
normality to daily routines”. For Peter, Karen, and their family,
they now have freedom, confidence and space to live their
lives more fully.
Neria™ Guard infusion set connects to a pump on one
end and the user’s body on the other end, to deliver
subcutaneous approved medication into the subcutaneous
tissue continuously
**
.
Neria™ Guard is used for continuous subcutaneous infusion
for a wide range of pharmaceuticals.
*
Comments are customer experiences and do not necessarily reflect medical
claims or advice.
** Citations found at: https://www.convatecgroup.com/media/press-releases/2024/
convatec_collaborates_with_abbvie_for_vyalev_therapy_for_the_treatment_of_
advanced_parkinsons_disease_in_the_united_states/
22
Convatec Annual Report and Accounts 2025
Strategic report
Revenue grew by 6.5% on a reported basis and 5.0% on a constant
currency basis. Organic revenue growth¹ excluding InnovaMatrix
®
was 6.4%.
Adjusted operating profit margin
2
was 22.3%, representing an
increase of 110 bps over the previous year, driven by further
simplification and positive operational leverage. Adjusted operating
profit margin² has improved by 460 bps over the past four years
due to productivity initiatives and commercial discipline.
Adjusted diluted EPS² increased by 16.0% to 17.6 cents per share
(2024: 15.2 cents per share). Reported diluted EPS was 8.6 cents
per share (2024: 9.3 cents per share).
Net cash generated from operations improved by 5.1% to $605m
(2024: $576m), with free cash flow to equity²
,
³
,
⁴ of $362m consistent
with the prior year (2024: $361m). Equity cash conversion³ was
100.8% (2024: 115.6%).
For 2026, we expect further expansion of Group adjusted operating
margin to at least 23.0% and to deliver another year of double-digit
growth in adjusted EPS. We are on track to deliver 5.0%-7.0%
organic revenue growth excluding InnovaMatrix
®
, driven by our
broadening product portfolio and focused commercial execution.
1.
Organic revenue growth is calculated by applying the applicable prior period average exchange rates to the Group’s actual performance in the respective period and
excluding acquired and disposed/discontinued businesses.
2. These non-IFRS financial measures are explained and reconciled to the most directly comparable financial measures prepared in accordance with IFRS on pages 28 to 31.
3. Equity cash conversion is calculated as free cash flow to equity divided by adjusted net profit.
4. Due to the acceleration of organic investment, the definition of free cash flow to equity has been redefined to exclude growth capex, as well as non-cash items such as net
foreign exchange gains or losses on cash and borrowings and the amortisation of financing fees. Refer to the commentary within the ‘Free cash flow to equity’ section of
this report. On a comparable basis to FY24, free cash flow to equity was $219m (2024: $302m).
Highlights
“We have delivered another strong
financial performance, demonstrated
by further organic revenue growth,
expansion in adjusted operating profit
margin and double-digit growth
in adjusted diluted EPS”
Financial review
Reported and Adjusted results
The Group’s financial performance, measured in accordance
with IFRS, is set out in the Consolidated Financial Statements
and Notes thereto on pages 134 to 175 and referred to in this
Annual Report as “reported” measures.
The commentary in this Financial review includes discussion
of the Group’s reported results and alternative performance
measures (or adjusted measures) (APMs). Management and
the Board use APMs as meaningful measures in monitoring
the underlying performance of the business. These measures
are disclosed in accordance with the ESMA guidelines and
are explained and reconciled to the most directly comparable
reported measures prepared in accordance with IFRS on pages
28 to 31.
Revenue and revenue growth on constant currency and organic
bases are non-IFRS financial measures and should not be
viewed as replacements of IFRS reported revenue and revenue
growth. Constant currency and organic growth are defined
in the Glossary to the Annual Report and Accounts.
All values are rounded to the nearest million ($m) except where
otherwise indicated. Percentage movements throughout this
report are calculated on actual unrounded numbers.
Reported
revenue growth
+6.5%
$2,439m
2025
$2,289m
2024
Organic
revenue growth¹
,
²
+6.4%*
*excluding InnovaMatrix
®
+6.4%
2025
+6.8%
2024
Reported diluted
earnings per share
8.6¢
Adjusted diluted
earnings per share²
17.6¢
8.6¢
2025
9.3¢
2024
17.6¢
2025
15.2¢
2024
Reported operating
profit margin
13.0%
Adjusted operating
profit margin²
22.3%
13.0%
2025
14.2%
2024
22.3%
2025
21.2%
2024
Net cash generated
from operations
$605m
$605m
2025
$576m
2024
Free cash flow
to equity
2,3,4
$362m*
* Equity cash conversion
2,3
100.8%
$362m
2025
$361m
2024
23
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Group revenue for 2025 of $2,439m (2024: $2,289m) increased
6.5% year-on-year on a reported basis and 5.0% on a constant
currency basis.
Adjusting for foreign exchange and acquisition and divestiture-
related activities, Group revenue grew by 4.8% on an organic
basis. Excluding InnovaMatrix
®
, Group organic revenue growth
was 6.4% and driven by broad-based revenue growth across all
categories. For more details about category revenue performance,
refer to the Operational reviews on pages 14 to 21.
Net profit
Adjusted gross profit increased by 6.1% to $1,481m
(2024: $1,396m) while adjusted gross profit margin decreased
by 30bps to 60.7% (2024: 61.0%). The Group delivered productivity
and pricing improvements of 130 bps and 30 bps respectively,
which were more than offset by the impact of inflationary
pressures of 110 bps and product mix headwinds of 80 bps.
On a reported basis, gross profit increased by 6.8% to $1,371m
(2024: $1,284m), with a reported gross margin of 56.2%
(2024: 56.1%).
Whilst adjusted operating expenses increased by $26m or
2.9% to $937m (2024: $911m), this was significantly below
revenue growth and has fallen as a percentage of revenue
to 38.4% (2024: 39.8%).
The increase in adjusted selling and distribution (S&D) expenses
of $24m to $668m (2024: $644m) was due to higher investment
in the sales force associated with growing the business.
Reported S&D increased by $23m to $668m (2024: $645m).
Adjusted R&D of $103m (2024: $102m) remained consistent
year-on-year and, combined with an increase in R&D capital
expenditure, reflected the ongoing investment in our future
pipeline of new products. On a reported basis, R&D spend
was in line with the prior year at $111m (2024: $112m).
Adjusted G&A of $166m was similar to the previous year
(2024: $165m). Adjusted G&A as a percentage of revenue
fell to 6.8% (2024: 7.2%) – we have now successfully achieved
the target set out at the 2022 Capital Markets Day. Over the
past four years, adjusted G&A expenses as a percentage of
revenue has fallen by 490bps. We have continued to
standardise technology and processes, build internal expertise
and therefore reduce external third party spend and expand
the scope of our Convatec Business Services (CBS). Reported
G&A increased by 5.4% to $206m (2024: $195m) due to
adjusting items which are explained in the Alternative
Performance Measures section of this report.
Reported other operating expenses increased by $63m to
$70m (2024: $7m). During the year, an impairment charge of
$72m was recognised in respect of an intangible asset – refer
to commentary in the Alternative Performance Measures
section of this report.
A reconciliation between reported and adjusted operating
expenses is provided in the Non-IFRS financial information
section on pages 28 to 31.
The Group delivered adjusted operating profit of $544m
(2024: $485m), representing an adjusted operating profit
margin of 22.3% (2024: 21.2%). Reported operating profit
decreased by 2.7% to $316m (2024: $325m).
Adjusted net profit increased by 14.8% to $358m (2024: $312m),
with the increase in adjusted income tax expense (explained on
page 24) more than offset by the increase in adjusted operating
profit as explained above. Reported net profit decreased by
8.1% to $175m (2024: $191m). Adjusting items are explained
on page 24.
Group financial performance
Reported
2025
$m
Reported
2024
$m
Adjusted¹
2025
$m
Adjusted¹
2024
$m
Adjusted @ CC²
2025
$m
Change
%
Revenue
2,439
2,289
2,439
2,289
2,404
5.0
Gross profit
1,371
1,284
1,481
1,396
Operating profit
316
325
544
485
Operating profit margin %
13.0%
14.2%
22.3%
21.2%
Profit before income taxes
230
246
471
411
Net profit
175
191
358
312
Basic earnings per share (cents)
8.6¢
9.3¢
17.7¢
15.3¢
Diluted earnings per share (cents)
8.6¢
9.3¢
17.6¢
15.2¢
Dividend per share (cents)
7.244¢
6.416¢
1.
These non-IFRS financial measures are explained and reconciled to the most directly comparable financial measures prepared in accordance with IFRS on pages 28 to 31.
2. Adjusted 2025 at constant currency is calculated on 2025 adjusted results translated at 2024 actual FX rates.
Revenue
2025
$m
2024
$m
Reported
growth
%
Foreign
exchange
impact
%
Constant
currency
growth
%
Organic
growth
%
Advanced Wound Care ex-InnovaMatrix
684
644
6.2%
1.9%
4.3%
4.1%
Ostomy Care
676
634
6.6%
1.6%
5.0%
4.5%
Continence Care
537
501
7.1%
0.3%
6.8%
6.6%
Infusion Care
473
411
15.1%
2.6%
12.5%
12.5%
Group revenue ex-InnovaMatrix
2,370
2,190
8.2%
1.6%
6.6%
6.4%
InnovaMatrix revenue
69
99
(29.7)%
–
(29.7)%
(29.7)%
Group revenue
2,439
2,289
6.5%
1.5%
5.0%
4.8%
24
Convatec Annual Report and Accounts 2025
Strategic report
Financial review
continued
Taxation
Year ended 31 December
2025
$m
Effective tax
rate
2024
$m
Effective tax
rate
Reported income tax expense
(55)
24.0%
(55)
22.5%
Tax effect of adjustments
(58)
(41)
Other discrete tax items
–
(3)
Adjusted income tax expense
(113)
24.0%
(99)
24.0%
The Group’s reported income tax expense was $55m (2024: $55m). The increase in the reported effective tax rate was due to the
2024 rate benefit of a one-off release of a tax liability relating to business restructuring.
The adjusted effective tax rate of 24.0% for the year ended 31 December 2025 (2024: 24.0%) was after reflecting the tax impact of
items treated as adjusting items (further details can be found in the Reconciliation of reported earnings to adjusted earnings table
in the Non-IFRS financial information section on page 29). The adjusted effective tax rate was stable due to an increase in uncertain
tax positions being offset by an increase in tax incentive benefits.
Earnings per share (EPS)
Adjusted basic EPS for 2025 was 17.7 cents (2024: 15.3 cents) and adjusted diluted EPS was 17.6 cents (2024: 15.2 cents), representing
increases of 16.1% and 16.0% respectively.
Basic reported EPS was 8.6 cents (2024: 9.3 cents), reflecting the reported net profit divided by the basic weighted average number
of ordinary shares of 2,024,809,094 (2024: 2,047,643,498).
Alternative Performance Measures (APMs)
Management and the Board make adjustments to the reported figures, where appropriate, to produce more meaningful measures
in monitoring the underlying performance of the business – APMs. These are also referred to as adjusting items in the Annual
Report and Accounts. The Group’s APM policy can be found in the Non-IFRS financial information section on page 28 and the
following adjustments were made to derive adjusted operating profit and adjusted net profit.
Operating
profit
$m
Fair value movement of
contingent consideration
$m
Non-operating
income/(expense)
$m
Income
tax
$m
2025
2024
2025
2024
2025
2024
2025
2024
Reported
316
325
(10)
(5)
(8)
4
(55)
(55)
Amortisation of acquired intangibles
134
136
–
–
–
–
(32)
(34)
Acquisitions and divestitures
4
2
10
5
3
–
(4)
(1)
Impairment of assets
72
–
–
–
–
–
(17)
–
Termination benefits and related costs
5
6
–
–
–
–
(1)
(2)
Other adjusting items
13
16
–
–
–
–
(4)
(4)
Other discrete tax items
–
–
–
–
–
–
–
(3)
Adjusted
544
485
–
–
(5)
4
(113)
(99)
Adjustments made to derive adjusted operating profit in 2025 included the amortisation of acquired intangibles of $134m
(2024: $136m), of which $95m (2024: $94m) resulted from intangible assets arising from the spin-out from Bristol-Myers Squibb
in 2008 and which will be fully amortised by mid-2026.
Acquisition and divestiture-related costs of $4m within operating profit and $3m within non-operating expenses consisted of costs
directly related to potential and actual transactions which have been executed or aborted and the write-off of a receivable that
arose as a result of the hospital care exit in 2022.
Termination costs of $5m were in respect of one-off, fundamental transformation projects in line with our simplification and productivity
initiatives. Other adjusting items reduced by $3m to $13m and included payments made to Karim Bitar’s estate following his death
in service (refer to page 115 of the Directors’ Remuneration Report for further details) and the settlement of a historic legal claim.
The fair value movement of contingent consideration largely related to the unwinding of discount.
On 31 October 2025, the Centers for Medicare & Medicaid Services (CMS) published a decision outlining their revised payment
rate of c.$127 per sq cm for skin substitutes with effect from 1 January 2026. This payment rate impacted Convatec’s InnovaMatrix
®
product, which is a leading porcine placental-derived extra-cellular matrix for the treatment of chronic, surgical and trauma
wounds. Management deemed that this constituted an indicator of impairment in respect of the InnovaMatrix
®
product-related
intangible asset held on the balance sheet. Using management’s best estimate of future cash flow forecasts, a non-cash
impairment charge of $72m was recognised. Further details are provided in Note 8 – Intangible assets and goodwill to the
Consolidated Financial Statements. This has been treated as an adjusting item in line with our APM policy.
Only $12m of the total $228m of adjusting items recognised within operating profit (excluding tax impact) was cash-impacting in 2025.
There was also a cash outflow of $4m (2024: $11m) during the year in respect of adjusting items recorded as accruals in the prior year.
In 2026, the total cash impact of adjusting items to be recognised within operating profit (including amounts accrued in previous
years), is currently expected to be similar to 2024. For further information on Non-IFRS financial information, see pages 28 to 31.
The Board, through the Audit and Risk Committee, annually reviews the Group’s APM policy to ensure that it remains appropriate,
aligns with regulatory guidance and reflects the way in which the performance of the Group is managed.
25
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Dividends and shareholder returns
Dividends are distributed based on the realised distributable
reserves of the Company, which are primarily derived from the
dividends received from subsidiary companies and are not
based directly on the Group’s consolidated retained earnings.
The realised distributable reserves of the Company at
31 December 2025 were $1,811m (2024: $1,475m).
The Board declared an interim dividend of 1.877 cents per share
in July 2025 and has recommended a final 2025 dividend of
5.367 cents per share, which would bring the full-year dividend
to 7.244 cents per share (2024: 6.416 cents per share), an
increase of 13% and a pay-out ratio when compared to adjusted
net profit of 40% (2024: 42%). Our stated policy is a pay-out
ratio of 35% to 45% of adjusted net profit but this is interpreted
Cash Flow and Net Debt
Adjusted
2025
$m
Adjusted
2024
$m
Adjusted EBITDA¹
661
591
Working capital (outflow)/inflow
1,6
(40)
7
Adjusting items²
(16)
(22)
Operational capex³
(64)
(63)
Operating cash flow¹
541
513
Tax paid
(54)
(52)
Free cash flow to capital¹
487
461
Net interest paid
(79)
(79)
Lease payments
(27)
(25)
Net cash inflow from lease incentives
13
–
Realised loss on settlement of FX derivatives relating to financing
(32)
–
Other⁴
–
4
Free cash flow to equity¹
362
361
Growth capex³
(121)
(59)
Dividends
(140)
(130)
Acquisitions and divestitures⁵
(25)
(90)
Purchase of own shares⁷
(326)
(11)
Non-cash movements⁴
(22)
–
Movement in net debt
(272)
71
Net debt
1
at 1 January (excluding lease liabilities)
(1,058)
(1,129)
Net debt¹ at 31 December (excluding lease liabilities)
(1,330)
(1,058)
1.
These non-IFRS financial measures are explained and reconciled to the most directly comparable financial measure prepared in accordance with IFRS in the Non-IFRS
financial information section on page 30.
2. Details of adjusting items are provided in the adjusting items cash movement table in the Non-IFRS financial information section on page 31. Of the total cash outflow
of $16m during the year, $4m related to accruals recorded in the prior year.
3. Operational capex is cash spent to maintain our existing operations/output. Growth capex develops new products and creates or increases capacity.
4. In 2025, non-cash movements of $22m have been presented below free cash flow to equity and consisted of net FX loss on cash and borrowings of $19m and amortisation
of deferred financing fees of $3m. The prior year comparatives have not been restated on the basis they are not material.
5. Earnout payments of $27m were made in respect of past acquisitions. This was offset by an inflow of $1m following the finalisation of the working capital adjustment
in respect of the 2024 acquisition of Livramedom and $1m of proceeds arising from divestiture-related activities related to the hospital care exit in 2022.
6. Excluding the impact of adjusting items of $16m (2024: $22m) on adjusted EBITDA and adjusted working capital movements, EBITDA was $640m (2024: $574m) and the
reported working capital movement was a $33m outflow (2024: $7m outflow).
7.
Refer to Note 15 – Share Capital and Reserves to the Consolidated Financial Statements for further information.
flexibly over time to reflect the underlying performance
of the business and the Board’s confidence in its future
growth prospects.
Further information about the Group’s dividend policy and
dividends paid can be found on page 122 and information
on capital maintenance and the available realised distributable
reserves position can be found on page 161.
The Group announced a share buyback programme on
20 August 2025 to return up to $300m of surplus capital to
shareholders. The buyback was funded from available cash
reserves. This was completed in December 2025. 94,937,530
ordinary shares were bought back at a cost (inclusive of
transaction costs) of £226m ($301m) and were all held as treasury
shares at the year end (see Note 15 – Share capital and reserves).
Adjusted EBITDA
Adjusted EBITDA increased by $70m to $661m (2024: $591m),
with the increase in adjusted gross profit of $85m and
depreciation & amortisation charges of $6m more than
offsetting the increases in adjusted operating expenses
of $26m. These are explained in the adjusted net profit
commentary section. A reconciliation of adjusted EBITDA to
the closest IFRS measure is provided in the Non-IFRS financial
information section on pages 28 to 31.
Free cash flow to capital
The calculation of the cash flow measures, operating cash flow
and free cash flow to capital, have been redefined to exclude
growth capex (as defined in footnote 3 of the table above), and
realised losses on settlement of certain derivatives. Management
considers that these changes result in improved definition and
calculation of operating cash flow and free cash flow to capital.
The comparative has been restated for the impact of growth
capex, but not for the exclusion of realised losses on settlement
of certain derivatives on the basis that this balance is not material.
Free cash flow to capital increased by $26m to $487m
(2024: $461m), largely driven by the increase in adjusted EBITDA
of $70m being partially offset by higher year-on-year working
capital movements of $47m and $6m lower cash impact from
adjusting items.
26
Convatec Annual Report and Accounts 2025
Strategic report
Financial review
continued
The Group invested $185m (2024: $122m) in growth and
operational capex to increase manufacturing capacity
and automation, develop new products, improve information
technology and digital tools and maintain current operations.
Of this, $121m (2024: $59m) related to growth capex, which has
been excluded from free cash flow to capital.
The adjusted working capital outflow of $40m (2024: $7m inflow)
was due to a combination of higher inventory levels of $39m
and an increase in trade and other receivables of $58m being
partially offset by an increase in trade and other payables
of $59m (excluding capital accruals). Inventory levels have
increased primarily due to forecast demand and the strategic
build of inventory. The increase in trade and other receivables
is largely due to a combination of higher sales and timing
of receipts whilst the increase in trade and other payables
is primarily driven by the timing of payments.
Free cash flow to capital is reconciled to its nearest IFRS measure
in the Non-IFRS financial information section – see page 30.
The nearest IFRS measure is net cash generated from operations,
which has increased by $29m to $605m (2024: $576m) and is
derived from reported net profit of $175m (2024: $191m).
Operating cash conversion was 99.4% (2024: 105.6%). The reduction
in the ratio primarily reflected a higher working capital outflow.
Refer to page 30 in the Non-IFRS financial information section.
Free cash flow to equity
The calculation of the cash flow measure, free cash flow to
equity, has been redefined to exclude growth capex, as well
as non-cash items such as net foreign exchange gains or losses
on cash and borrowings and the amortisation of financing fees.
Management considers that these changes result in improved
definition and calculation of free cash flow to equity. The
comparative has been restated for the impact of growth capex,
but not for the exclusion of non-cash items on the basis that
this balance is not material.
Free cash flow to equity slightly increased by $1m to $362m
(2024: $361m). This was driven by an increase in free cash flow
to capital of $26m as explained above, largely offset by realised
losses on foreign exchange derivatives of $32m.
Free cash flow to equity is reconciled to its nearest IFRS measure
in the Non-IFRS financial information section – see page 30.
Equity cash conversion was 100.8% (2024: 115.6%) – refer
to page 30 in the Non-IFRS financial information section.
Borrowings and net debt
2024
2025
2024
2025
2024
2025
2024
2025
Net debt² excluding lease liabilities $1,330m
(2024: $1,058m)
500
250
0
-1,000
-750
-250
-500
Net debt²/
adjusted EBITDA²
At 31 December 2024
1.8x
Net debt²/
adjusted EBITDA²
At 31 December 2025
2.0x
($408m)
($120m)
$65m
($628m)
($79m)
($495m)
$68m
($990m)
Lease liabilities
Cash and cash
equivalents
Senior notes
1
Credit facilities
drawn
1
1.
Senior notes and credit facilities are stated net of unamortised financing fees of $10m and $3m respectively (2024: $5m and $6m).
2. These non-IFRS measures are explained and reconciled to the most directly comparable financial measures prepared in accordance with IFRS on pages 28 to 31.
As at 31 December 2025, the Group’s cash and cash equivalents were $68m (2024: $65m) and total borrowings (net of deferred
financing fees) were $1,398m (2024: $1,123m).
During the year, the Group completed the issuance of senior unsecured notes of $500m with a tenor of ten years and at a coupon
of 5.3%. This further diversifies our capital structure, whilst expanding our debt headroom and extending our debt maturity profile
significantly. The proceeds were used to fully repay the $250m term loan due to mature in 2027 and pay down a portion of drawn
debt on the revolving credit facility.
The Group’s banking facility is a multicurrency revolving credit facility of $950m maturing in 2028. The Group’s senior unsecured
notes of $500m each, issued in October 2021 and 2025, mature in October 2029 and 2035 respectively.
As at 31 December 2025, $539m of the multicurrency revolving credit facility remained undrawn.
The Group ended the period with total borrowings, including IFRS 16 lease liabilities, of $1,518m (2024: $1,202m). Offsetting cash
of $68m (2024: $65m) and excluding lease liabilities, net debt was $1,330m (2024: $1,058m), equivalent to 2.0x adjusted EBITDA
(2024: 1.8x adjusted EBITDA). We continue to target leverage of 2x over time but are comfortable to temporarily go above or below
this, dependent on M&A and other investment opportunities.
For further information on borrowings see Note 19 – Borrowings to the Consolidated Financial Statements.
27
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Covenants
At 31 December 2025, the Group was in compliance with all financial and non-financial covenants associated with the Group’s outstanding debt.
The Group has two financial covenants on its banking facilities, being net leverage and interest cover, each of which is defined, where
applicable, within the borrowing documentation. Refer to Note 19 – Borrowings for details of covenants in place on the senior notes.
The table below summarises the Group’s most restrictive covenant thresholds and position as at 31 December 2025 and 2024.
Maximum covenant
net leverage¹
Actual covenant
net leverage¹
Minimum covenant
interest cover¹
Actual covenant
interest cover¹
31 December 2025
3.50x
2.2x
3.5x
9.4x
31 December 2024
3.50x
1.9x
3.5x
7.6x
1.
Interest cover is covenant-adjusted EBITDA/interest expense (net) and net leverage is net debt/covenant adjusted EBITDA in accordance with the definitions contained in
underlying borrowing documentation and are not the same as the definitions of these measures presented in the Non-IFRS financial information section on pages 28 to
31 and applied in the commentary in this Financial review.
Group financial position
At 31 December
2025
$m
2024
$m
Change
$m
Intangible assets and goodwill
1,996
2,096
(100)
Other non-current assets
845
626
219
Cash and cash equivalents
68
65
3
Other current assets
872
728
144
Total assets
3,781
3,515
266
Current liabilities
(616)
(511)
(105)
Non-current liabilities
(1,647)
(1,315)
(332)
Equity
(1,518)
(1,689)
171
Total equity and liabilities
(3,781)
(3,515)
(266)
Intangible assets and goodwill
Intangible assets and goodwill decreased by $100m to $1,996m
(2024: $2,096m). An increase in goodwill of $60m, driven by
foreign exchange movements, was more than offset by a
reduction in intangible assets of $160m. This was primarily
driven by the in-year amortisation of intangible assets of
$155m and a $72m non-cash impairment in respect of the
InnovaMatrix
®
platform (see commentary in the Alternative
Performance Measures section of this report), partially offset
by intangible asset additions of $51m.
Further detail is provided in Note 8 – Intangible assets and
goodwill to the Consolidated Financial Statements.
No other triggers of impairment were identified during 2025.
Other non-current assets
Other non-current assets, including property, plant and
equipment (PP&E), right-of-use assets, investment in financial
assets, deferred tax assets, restricted cash and other assets
increased by $219m to $845m (2024: $626m), largely due
to a net increase of $170m in PP&E (reflecting the continued
investment in our manufacturing facilities to maintain our
existing operations and increase capacity for existing and new
product lines) and an increase in deferred tax assets of $36m
due to an increase in UK carry forward losses from increased
patent box benefit and the reduction in offsetting deferred
tax liabilities on intangible assets from amortisation.
Current assets excluding cash and cash equivalents
Current assets, excluding cash and cash equivalents, increased
by $144m to $872m (2024: $728m), primarily driven by increases
in inventory of $67m and trade and other receivables of $84m.
During the year, the USD weakened significantly – excluding
foreign exchange impacts, inventory increased by $39m and
trade and other receivables increased by $58m. These are
explained in the free cash flow to capital commentary.
Current liabilities
Current liabilities increased by $105m to $616m (2024: $511m),
largely due to increases in trade and other payables of $111m
and current tax liabilities of $23m, offset by a decrease in
contingent consideration of $21m. Excluding foreign exchange
impacts and including capital accruals, trade and other
payables increased by $89m (driven by timing of payments and
increase in capital investments). The amount in working capital
excludes capital accruals.
Non-current liabilities
Non-current liabilities increased by $332m to $1,647m
(2024: $1,315m). This was primarily due to an increase in
non-current borrowings of $275m, deferred tax liabilities
of $6m and lease liabilities of $37m (in line with our
announcement during the year of investing in a new state-of-
the-art R&D hub in Manchester that is set to open in 2027).
Going concern
In assessing going concern, the Directors considered available
cash resources, access to committed undrawn funding, financial
performance and forecast performance, including continued
implementation of our strategy, together with the Group’s
financial covenant compliance requirements and principal risks
and uncertainties.
The same severe but plausible downside scenarios utilised in
the preparation of the Viability statement were also applied in
assessing going concern. Under each scenario, the Group retained
significant liquidity and covenant headroom throughout the going
concern period, i.e. 12 months from the date of this report.
A reverse stress test, before corporate level mitigations, was also
considered to demonstrate what reduction in revenue would be
required in the next 12 months to create conditions which may
lead to a potential covenant breach. The outcome of this test was
considered implausible given the Group’s strong global market
position, diversified portfolio of products and the corporate
mitigations available to the Board and management.
Accordingly, the Directors continue to adopt the going concern
basis in preparing the Consolidated Financial Statements.
For further information on the Viability statement see pages 76
and 77 and for going concern, see Note 1.2 to the Consolidated
Financial Statements
Fiona Ryder
Chief Financial Officer
23 February 2026
28
Convatec Annual Report and Accounts 2025
Strategic report
Non-IFRS financial information
Non-IFRS financial information or alternative performance
measures (APMs) are those measures used by the Board and
management on a day-to-day basis in their assessment of profit
and performance and comparison between periods. The
adjustments applied to IFRS measures reflect the effect of
certain cash and non-cash items that the Board believes distort
the understanding of the quality of earnings and cashflows as,
by their size or nature, they are not considered part of the core
operations of the business. Adjusted measures also form the
basis of performance measures for remuneration, e.g. adjusted
operating profit.
It should be noted that the Group’s APMs may not be
comparable to other similarly titled measures used by other
companies and should not be considered in isolation or as a
substitute for the equivalent measures calculated and
presented in accordance with IFRS (our reported measures).
In determining whether an item should be presented as an
allowable adjustment to IFRS measures, the Group considers
items which are significant either because of their size or their
nature and arise from events that are not considered part of
the core operations of the business. These tend to be one-off
events but may still cross more than one accounting period.
Recurring items may be considered, particularly in respect of
the amortisation of acquisition-related intangible assets. If an
item meets at least one of these criteria, the Board, through
the Audit and Risk Committee, then exercises judgement as
to whether the item should be classified as an allowable
adjustment to IFRS performance measures.
The tax effect of the adjustments is reflected in the adjusted tax
expense to remove the tax impact from adjusted net profit and
adjusted earnings per share.
Amortisation of acquisition-related intangible assets
The Group’s strategy is to grow both organically and through
acquisition, with acquisitions being targeted to strengthen
our position in key geographies and/or business categories
or which provide access to new technology. The nature of
the businesses acquired includes the acquisition of significant
intangible assets, which are required to be amortised. The
Board and management regard the amortisation as a distortion
to the quality of earnings and it has no cash implications in
the year. The amortisation also distorts comparability with
peer groups where such assets may have been internally
generated and, therefore, not reflected on their balance sheet.
Amortisation of acquisition-related intangible assets is, by
its nature, a recurring adjustment.
Acquisition-related activities
Costs directly related to potential and actual strategic
transactions which have been executed, aborted or are in-flight
are deemed adjusting items.
Acquisition-related costs relate to deal costs, integration costs
and earn-out adjustments, including the discounting impact
which are incurred directly as a result of the Group undertaking
or pursuing an acquisition. Deal costs are wholly attributable to
the deal, including legal fees, due diligence fees, bankers’ fees/
commissions and other direct costs incurred as a result of the
actual or potential transaction. Integration costs are wholly
attributable to the integration of the target and based on
integration plans presented at the point of acquisition,
including the cost of retention of key people where this is in
excess of normal compensation, redundancy of target staff
and early lease termination payments.
Adjusted measures in relation to acquisitions also include
aborted deal costs.
Divestiture-related activities
Divestiture-related activities comprise the gains or losses
resulting from disposal or divestment of a business as a result
of a sale, major business change or restructuring programme.
These include write-down of non-current assets, provisions
to recognise inventories at realisable value, provisions for
costs of exiting contracts and associated legal fees, and any
other directly attributable costs. Any income from the ultimate
disposal of a business or subsidiary is included in the gain or loss.
Adjusted measures in relation to divestitures also include
aborted deal costs.
Impairment of assets
Impairments, write-offs and gains and losses from defined
programmes and where the Group considers the circumstances
of such event are not reflective of normal business trading
performance or when transactions relate to acquisition-related
intangible assets where the amortisation is already excluded
from the calculation of adjusted measures.
Termination benefits and related costs
Termination benefits and other related costs arise from
material, one-time Group-wide initiatives to reduce the ongoing
cost base and improve efficiency in the business, including
divestitures from non-strategic activities. The Board considers
each project individually to determine whether its size and
nature warrants separate disclosure. Qualifying items are
limited to termination benefits (including retention) without
condition of continuing employment in respect of major
Group-wide change programmes. Where discrete qualifying
items are identified these costs are highlighted and excluded
from the calculation of adjusted measures. Due to their nature,
these adjusted costs may span more than one year.
Other adjusting items
Other adjusting items include items that do not fall within the
above categories but qualify as an APM in line with the Group’s
policy. Whilst non-exhaustive, examples of other adjusting
items could include significant historic legal claims outside the
normal course of business or one-time initiatives which are part
of the Group’s strategy to improve productivity in the business
and optimise cash flows. The Board considers each item
individually to determine whether its size and nature warrants
separate disclosure. Qualifying costs are limited to directly
attributable costs of the initiatives and any realignment costs.
Due to the nature of the initiatives, these adjusted costs may
span more than one year.
Revenue measures
Revenue growth on a constant currency basis represents
reported revenue, as determined under IFRS, and applying the
applicable prior period average exchange rates to the Group’s
actual performance in the respective period. Organic revenue
growth is calculated by adjusting this to exclude the impact of
acquisitions and divestitures. Organic revenue growth
excluding InnovaMatrix
®
is presented to reflect our 2025
guidance and to exclude InnovaMatrix
®
revenues as the outlook
was uncertain and is reconciled on page 23.
KPI
Cash flow measures
Operating cash flow is the net cash generated from operations, as
determined under IFRS, less operational capex. Operational capex
is cash spent to maintain our existing operations/output. Growth
capex develops new products and creates or increases capacity.
Free cash flow to capital is defined as operating cash flow less
tax paid.
Free cash flow to equity reflects how effectively we are
converting the profit we generate into cash (after accounting
for working capital, operational capex, adjusting items, lease
incentives, realised gains or losses on foreign exchange
derivatives, tax and interest). Refer to page 30 for details
on how these measures are calculated.
Net debt and leverage ratio are two other measures used and
these are explained on page 31.
Key
Please see page 12
KPI
29
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Reconciliation of reported earnings to adjusted earnings for the years ended 31 December 2025 and 2024
Year ended 31 December 2025
Revenue
$m
Gross profit
$m
Operating
costs
$m
Operating
profit
$m
Finance
expense,
net
$m
Fair value
movement of
contingent
consideration
$m
Non-
operating
(expense),
net
PBT
$m
Income tax
$m
Net profit
$m
As reported
2,439
1,371
(1,055)
316
(68)
(10)
(8)
230
(55)
175
Amortisation of acquired
intangibles
–
109
25
134
–
–
–
134
(32)
102
Acquisitions and divestitures
–
–
4
4
–
10
3
17
(4)
13
Impairment of assets
–
–
72
72
–
–
–
72
(17)
55
Termination benefits and
related costs
–
–
5
5
–
–
–
5
(1)
4
Other adjusting items
–
1
12
13
–
–
–
13
(4)
9
Adjusted
2,439
1,481
(937)
544
(68)
–
(5)
471
(113)
358
Depreciation & amortisation
91
Impairment of assets
2
Share-based payments
24
Adjusted EBITDA
661
Year ended 31 December 2024
Revenue
$m
Gross profit
$m
Operating
costs
$m
Operating
profit
$m
Finance
expense, net
$m
Fair value
movement of
contingent
consideration
$m
Non-
operating
income, net
$m
PBT
$m
Income tax
$m
Net profit
$m
As reported
2,289
1,284
(959)
325
(78)
(5)
4
246
(55)
191
Amortisation of acquired
intangibles
–
109
27
136
–
–
–
136
(34)
102
Acquisitions and divestitures
–
(1)
3
2
–
5
–
7
(1)
6
Termination benefits and
related costs
–
1
5
6
–
–
–
6
(2)
4
Other adjusting items
–
3
13
16
–
–
–
16
(4)
12
Other discrete tax items
–
–
–
–
–
–
–
–
(3)
(3)
Adjusted
2,289
1,396
(911)
485
(78)
–
4
411
(99)
312
Depreciation & amortisation
85
Impairment of assets
1
Share-based payments
20
Adjusted EBITDA
591
Refer to the Financial review on page 24 for commentary on the Group’s adjusting items.
Adjusted operating profit margin of 22.3% (2024: 21.2%) is calculated as adjusted operating profit of $544m (2024: $485m) divided
by revenue of $2,439m (2024: $2,289m). A reconciliation of adjusted operating profit to its closest IFRS measure is shown in the
table above.
KPI
Reconciliation of reported operating costs to adjusted operating costs for the years ended 31 December 2025
and 2024
2025
2024
S&D
$m
G&A
$m
R&D
$m
Other
$m
Operating
costs
$m
S&D
$m
G&A
$m
R&D
$m
Other
$m
Operating
costs
$m
As reported
(668)
(206)
(111)
(70)
(1,055)
(645)
(195)
(112)
(7)
(959)
Amortisation of acquired
intangibles
–
17
8
–
25
1
18
8
–
27
Acquisition and divestitures
–
4
–
–
4
(1)
3
–
1
3
Impairment of assets
–
–
–
72
72
–
–
–
–
–
Termination benefits and
related costs
–
5
–
–
5
1
3
2
–
6
Other adjusting items
–
14
–
(2)
12
–
6
–
6
12
Adjusted
(668)
(166)
(103)
–
(937)
(644)
(165)
(102)
–
(911)
30
Convatec Annual Report and Accounts 2025
Strategic report
Non-IFRS financial information
continued
Reconciliation of reported basic and diluted earnings per share to adjusted earnings per share for the years
ended 31 December 2025 and 2024
2025
$m
Adjusted
2025
$m
2024
$m
Adjusted
2024
$m
Net profit attributable to the shareholders of the Group
175
358
191
312
Number
Number
Basic weighted average ordinary shares in issue¹
2,024,809,094
2,047,643,498
Diluted weighted average ordinary shares in issue¹
2,034,286,390
2,056,797,417
Cents
Cents
Cents
Cents
Basic EPS
8.6
17.7
9.3
15.3
Diluted EPS
8.6
17.6
9.3
15.2
1.
See Note 6 – Earnings per share to the Consolidated Financial Statements.
Adjusted diluted EPS has increased by 16.0% to 17.6 cents (2024: 15.2 cents). This is calculated on actual unrounded numbers.
KPI
Cash flow conversion
Year ended 31 December
2025
$m
2024
$m
Operating cash conversion²
99.4%
105.6%
Equity cash conversion²
100.8%
115.6%
2. Operating cash conversion is calculated by operating cash flow/adjusted operating profit. Equity cash conversion is calculated by free cash flow to equity/adjusted net
profit. Operating cash flow and free cash flow to equity cash flow have been redefined as explained in footnotes 4 and 5 below.
Reconciliation of Operating cash flow, Free cash flow to capital, Free cash flow to equity
Year ended 31 December
2025
$m
2024
$m
Net cash generated from operations
605
576
Operational capex³
(64)
(63)
Operating cash flow⁴
541
513
Tax paid
(54)
(52)
Free cash flow to capital⁴
487
461
Net interest paid
(79)
(79)
Payment of lease liabilities
(27)
(25)
Net cash inflow from lease incentives
13
–
Financing fee amortisation
–
(3)
Foreign exchange gain/(loss) on cash and borrowings
–
4
Proceeds from sale of PP&E
–
3
Realised loss on settlement of FX derivatives relating to financing
(32)
–
Free cash flow to equity⁵
362
361
3. Operational capex is cash spent to maintain our existing operations/output. Growth capex develops new products and creates or increases capacity.
4. The calculation of the cash flow measures operating cash flow and free cash flow to capital have been redefined to exclude growth capex, and realised losses on
settlement of certain derivatives. Management considers that these changes result in improved definition and calculation of operating cash flow and free cash flow to
capital. The comparative has been restated for the impact of growth capex, but not for the exclusion of realised losses on settlement of certain derivatives on the basis
that this balance is not material.
5. The calculation of the cash flow measure free cash flow to equity has been redefined to exclude non-cash items such as net foreign exchange gains or losses on cash and
borrowings and the amortisation of financing fees as well as growth capex (as defined in footnote 3) and realised losses on settlement of certain derivatives. Management
considers that these changes result in improved definition and calculation of free cash flow to equity. The comparative has been restated for the impact of growth capex,
but not for the exclusion of non-cash items on the basis that this balance is not material.
Free cash flow to equity has increased by 0.1% to $362m (2024: $361m). A reconciliation of free cash flow to equity to its closest IFRS
measure is shown in the table above.
KPI
31
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Reconciliation of reported and adjusted working capital movement
Year ended 31 December
2025
$m
2024
$m
Reported working capital movement
(33)
(7)
(Decrease)/increase in respect of acquisitions and divestitures
(1)
3
(Decrease)/increase in termination benefits
(2)
4
(Decrease) in respect of other adjusting items
(2)
(2)
Realised (loss)/gain on settlement of FX derivatives held to manage FX risk in working capital⁶
(2)
9
Adjusted working capital movement
(40)
7
6. Realised gains and losses arising from the settlement of FX derivatives held to manage FX risk in our working capital have been included in this reconciliation as
management believe this provides a more accurate view of the underlying movement in working capital.
Cash outflows from adjusting items
Year ended 31 December
2025
$m
2024
$m
Acquisitions and divestitures
(3)
(4)
Termination benefits and related costs adjustments
(3)
(11)
Other adjusting items
(10)
(7)
Cash outflows from adjusting items
(16)
(22)
Net debt
Monitoring net debt is important to the Group as it is an indicator of the Group’s financial health and its available liquidity. It is an
important decision-making tool for investment decisions and strategic planning.
Net debt is calculated as borrowings less cash and excluding lease liabilities.
2025
$m
2024
$m
Senior notes⁷
990
495
Credit facilities⁷
408
628
Lease liabilities⁸
120
79
Total borrowings including lease liabilities
1,518
1,202
Less: cash and cash equivalents⁹
(68)
(65)
Less: lease liabilities⁸
(120)
(79)
Net debt excluding leases
1,330
1,058
7.
See Note 19– Borrowings of the Consolidated Financial Statements.
8. See Note 22 – Leases of the Consolidated Financial Statements.
9. See Note 20 – Cash, cash equivalents and restricted cash of the Consolidated Financial Statements.
Reconciliation of acquisition of PP&E and intangible assets
Year ended 31 December
2025
$m
2024
$m
Acquisition of property, plant and equipment
(135)
(92)
Acquisition of intangible assets
(50)
(30)
Total capital spend
(185)
(122)
Split as:
Growth capex
(121)
(59)
Operational capex
(64)
(63)
Leverage
Leverage is an important performance measurement metric for the Group as it is an indicator of financial risk, credit worthiness
and operational flexibility. It is also an important consideration in strategic decision-making.
This is calculated as net debt excluding leases divided by adjusted EBITDA.
2025
$m
2024
$m
Net debt excluding leases
10
1,330
1,058
Adjusted EBITDA¹¹
661
591
Leverage ratio
2.0x
1.8x
10. Net debt excluding leases is defined and reconciled to the closest IFRS measure in the Net debt table above.
11. Adjusted EBITDA is reconciled to the closest IFRS measure in the Reconciliation of reported earnings to adjusted earnings table on page 29 of this section.
V
A
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U
E
S
Pioneering
trusted medical
solutions
to improve the
lives we touch
S
T
R
A
T
E
G
Y
F
O
R
E
V
E
R
C
A
R
I
N
G
C
O
M
M
E
R
C
E
C
O
M
M
U
NI
T
I
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S
C
U
S
T
O
M
E
R
S
C
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E
A
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32
Convatec Annual Report and Accounts 2025
Strategic report
Our ESG framework
Responsible business review
Convatec
Cares
Our approach to responsible business
In recent years, we’ve transformed Convatec.
We’re proud of the progress we have made
and are determined to realise the substantial
potential ahead of us.
We are united by a promise to be
forever caring
and a deep conviction to improve the lives of
people relying on our trusted medical solutions.
Our approach to responsible business, Convatec
Cares, is designed to drive value and continuous
improvement, build a business that’s fit for the
future and sustain profitable growth.
Convatec Cares is guided by the key stakeholder
voices that inform how we plan for and track
progress towards realising our vision. These
include the voice of customers, colleagues,
communities and planet, and commerce
(business practices).
In a world where trust is currency and resilience
is value, doing business responsibly helps us
deliver our strategy and the commitments we
have made. Our core value to ‘Do what’s right’
is integrated into the fabric of our company,
supporting business continuity as we continue
to innovate and deliver.
Forever caring in action as we bring our
vision and values to life for everyone relying
on our trusted medical solutions
As we continue delivering sustainable and profitable growth,
we are guided by stakeholder expectations. During 2024 and
2025, we completed a double materiality assessment, including
impact, risk and opportunity (IRO) scoring based on the
European Sustainability Reporting Standards and our
enterprise risk management approach. This process built
further on the foundation of our 2023 assessment where we
engaged a wide range of stakeholders to gather insights. The
process also engaged subject matter experts throughout the
business, including members of the Convatec Executive
Leadership Team (CELT), ESG Steering Committee and the
Board. Read more on how we engage stakeholders on
pages 86 and 87.
Our responsible business review is structured to respond to
key topics identified. Relevant impacts, risks and opportunities
(IROs) within each topic are summarised at the outset of each
section. Apart from water resources, which is relevant at
several of our manufacturing sites, these topics represent
overarching Convatec IROs.
Topic
(materiality type)
Read
more
Consumers and end‑users
(financial, impact)
Page 34
Own workforce
(financial, impact)
Page 38
Workers in the value chain
(financial, impact)
Page 42
Business conduct
(financial, impact)
Page 44
Climate change
(financial, impact)
Page 48
Water resources
(impact, only at high‑risk manufacturing sites)
Page 53
Identifying what matters
For a short summary of our
Environment, social and governance
(ESG) journey, see
https://marketingworld.convatec.com/
MarketingZone/MZDirect/
Source/5a8cfc1f‑be5e‑4c97‑82fc‑
015a019fae7c
Our Section 172 statement and specific examples of how our Directors have discharged their duties pursuant to Section 172
of the Companies Act 2006 and considered stakeholders in decision‑making can be found on pages 86 to 88.
33
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
ESG governance: Board and management
Board
(including
Audit and Risk
Committee)
See page 80 for Board
and ARC responsibilities
See ESG and remuneration
information on page 13
CELT ESG Steering Committee
Members
–
Chaired by CEO (see CEO
statement on page 9)
–
Includes six other members
of CELT (see membership
on page 83)
Responsibilities
–
Formulation and
delivery of ESG strategy
–
Oversees ESG‑related risks,
impacts and opportunities
–
Oversight of working groups
–
Meets three times per year
Management
Categories and functions engage with ESG topics during the annual strategic planning and investment cycle
Working groups led by
ESG SteerCo members:
–
Scope 3 emissions reduction & product
sustainability
–
Inclusion Council
–
Human Rights Committee
–
Working groups are cross‑functional, fostering
collaboration and expertise across technology &
innovation, legal, human resources, ethics &
compliance, operations, risk, finance, and
commercial teams
Other key teams
–
Global Corporate Affairs team responsible for ESG
stewardship and plays an important role in
convening stakeholders and shaping strategy.
Provides leadership support for CELT ESG
Steering Committee
–
Environment, Health and Safety (EHS) team within
our Global Quality & Operations function works
closely with Research & Development (R&D) teams
to deliver environmental management systems
–
Group Financial Controller oversees ESG processes
and controls, to continually improve data quality
–
Group Enterprise Risk team ensures alignment with
our enterprise risk management; oversees TCFD
Updates Board, ARC and CELT as part of annual engagement cycle
Targets and performance
Within each of our priority topics, we set
and regularly review targets to guide our
commitments, ensuring each Convatec
Cares pillar is represented. We track our
progress and report to management and
the Board.
These targets are listed within each
material topic on pages 34, 38, 42, 44
and 48 and can be found at www.
convatecgroup.com/sustainability/
our‑frameworks‑and‑targets.
Select target metrics have been reviewed
as part of the external assurance process.
For further details see the assurance
statement below and basis of reporting
at www.convatecgroup.com/
sustainability/esg‑reports‑and‑data.
Statements
Independent assurance
In line with our commitment to
transparency, we engaged EY to
perform limited assurance procedures
on selected key performance indicators,
as detailed in our Responsible business
review 2025. The assurance was
completed in accordance with the
International Standard on Assurance
Engagements 3000 (revised) (ISAE 3000)
and 3410 (ISAE 3410). Details of the
procedures performed are outlined in
EY’s independent assurance report,
which alongside Convatec’s basis of
reporting for the assured metrics can
be found at www.convatecgroup.com/
sustainability/esg‑reports‑and‑data/.
Performance data
The scope of EY’s work covered the
following 2025 disclosures (performance
data) from the review:
–
Greenhouse gas emissions:
Scope 1 (12,780 tonnes CO
2
e); Scope 2
(market‑based) (85 tonnes CO
2
e);
Scope 2 (location‑based) (21,739
tonnes CO
2
e) (page 51)
–
Emission intensity (location‑based:
14.2 tonnes CO
2
e/$m revenue and
market‑based: 5.3 tonnes CO
2
e/$m
revenue) (page 51)
–
Energy consumption (124,394 MWh)
(page 51)
–
Energy intensity (51 MWh/$m revenue)
(page 52)
Completeness of information
The information contained in the
Responsible business review section
of this Annual Report covers all
operations over which we had financial
control for the 2025 financial year. It also
covers the topics identified in Convatec
Cares and places emphasis on the most
material issues.
Where a reported KPI does not relate
to the entire organisation for the whole
year, the scope of its boundaries is
indicated. Businesses acquired or
disposed of during the year are not
included in our reporting for that year
except where disclosed otherwise.
34
Convatec Annual Report and Accounts 2025
Strategic report
Customer-centric solutions
Convatec has the strongest innovation pipeline in our history. Significant
investment in research, development and clinical evidence is core to our
vision. To ensure we’re creating trusted medical solutions, consistent with
our forever caring promise, we are committed to the highest standards for
product quality, safety and efficacy
Overview and IROs
Our commitment to improving the
lives of people with chronic conditions
includes protecting their safety, dignity
and rights. In 2025, we continued to
strengthen our approach to product
quality, information transparency and
data protection. As part of our approach
to managing IROs, we recognise the
importance of adequate clinical testing,
Responsible business review
continued
product quality and providing clear
usage instructions in order to protect the
health and wellbeing of our customers
and end‑users. Similarly, effective data
handling procedures mitigate the risk
of breaches of sensitive medical
information and privacy violations.
All of these risks carry financial and
reputational consequences. Convatec
remains committed to responsible
marketing practices and avoiding actions
that could inhibit freedom of expression,
especially where safety or product
efficacy concerns are raised. At the same
time, we see opportunities to enhance
patient outcomes and strengthen our
market position by prioritising safety,
inclusion and transparency. By improving
access to advanced products and
ensuring diverse insights guide product
Actions and highlights
Actions
Key policies
–
Continued product launches and geographical expansions
–
Major expansion plans of R&D facilities in US and UK
–
Released flagship patient and user insights report,
Perspectives on living with chronic conditions
–
Extended customer loyalty programme, reaching thousands
of patients, healthcare professionals and customers
–
Received BSI Customer Service Excellence Kitemark
–
Expanded health economics research capabilities
–
Ethical issues and new product development policy
–
Global privacy policy
–
Quality Management System
Many of Convatec’s policies may be found online at
www.convatecgroup.com/investors/governance/
our-policies-and-statements/
Targets
Target
Progress in 2025
Status
Quality:
Reduce our complaints per million (CPM) in our direct‑to‑
consumer (B2C) categories by 5% for 2025 against a 2024 baseline
Target update: Sustain low CPM in B2C categories
6% (2024: 17%)
Product vitality:
Vitality index of c.30% by Q4 2025
Target update: Sustain c.30% vitality through 2026
26% (2024: 30%)
Ongoing
Customer centricity:
By Q4 2025, roll out cNPS surveys to each of
our main customer groups (healthcare professionals, end‑users,
and key business‑to‑business (B2B) customers) across key markets
Target update: Each category to improve their 2025 cNPS score
for healthcare professionals (HCPs) by at least two points by the
end of 2026
Rolled out cNPS survey in all key markets
to HCPs, patients and B2B accounts by
December 2025 – with around 9,000
customers surveyed to date
Medical education:
Reach more than 500,000 HCPs and
patients with medical education programmes per year by 2027
Over 210,000 HCPs and patients
participated in educational
programming led by Convatec
Ongoing
Expand HCP education programmes through the development
of a global medical education digital platform and review of
activity to enhance impact by end of 2024
Target update: Expand the CLP through launch in the US and
additional content creation by end of 2026
Launched pilot Convatec Learning
Platform (CLP) and collected user
feedback
35
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
design, we are helping to reduce barriers
to care and improve quality of life for
underserved communities. Our efforts
to educate carers and provide clear,
high‑quality product information are
supporting better healing outcomes
and more confident use of our solutions.
Through innovation and a robust Quality
Management System, we continue to
embed patient safety at the heart of
product development, delivering not
only reputational value but also
meaningful impact for the people
who rely on us every day.
Customer health and safety
Innovation journey
To fulfil our vision and drive growth,
we continue to strengthen our R&D
capabilities, alongside bringing new
products to market. In 2025, we invested
an adjusted $103m in R&D (2024: $102m)
and remained within our target of
c.30% vitality index, with a decline mostly
resulting from Advanced Wound Care
(AWC) portfolio changes. Our approach
to innovation continues to build
momentum in the following ways:
–
Increased investment:
R&D spend
has more than doubled since 2019,
enabling our new operating model
which integrates R&D teams across
functions to leverage shared
capabilities with cross‑functional
reviews, new product development
process gate reviews and semi‑annual
portfolio reviews.
–
Innovation mindset:
We design
solutions for people, not just patients,
addressing social, emotional and
functional needs. Our products and
solutions involve digital and service
elements while ensuring products meet
the highest quality standards.
–
Simplified processes:
We use a single
business and product development
process across all product categories,
from ideation through to launch, that
we refer to as IDEAL. This process goes
beyond R&D and involves commercial,
technical and operations teams, also
supported by a Product Stewardship
team launched in 2025 (see page 48).
–
Leadership and competencies:
We
have attracted global talent for R&D,
medical, regulatory, intellectual
property, digital health and portfolio
management. We have five technology
centres: one in the US (Boston), and
the others close to our manufacturing
facilities in the UK (Flintshire and
Oxfordshire), Denmark (Osted) and
Slovakia (Michalovce). In 2025, we
announced plans to relocate and
expand the majority of our UK‑based
R&D activities to Manchester from
2027, alongside a significant expansion
of our facilities in the US. This is a
major milestone in our R&D journey
and commitment to our vision.
Transforming wound care with
nitric oxide technology
The unmet need
Diabetic foot ulcers (DFUs) affect an estimated
40‑60m people worldwide, posing a significant
health burden
1
. In a disease with many
variables to control,
small misses
can be
devastating.
Less than 35% of DFUs successfully heal within
a year
1
. These chronic, often recurring wounds
increase the risk of severe infection, lower‑limb
amputation, and carry a five‑year survival rate
of only 40%
1
. The economic impact is equally
severe: annual direct costs of $9‑13bn each year
in the United States alone
1
. As global
populations age, the prevalence and cost of
DFUs continue to rise, placing further pressure
on healthcare systems.
Our groundbreaking technology
In 2023, Convatec acquired a novel nitric
oxide‑generating technology from 30
Technology, which Convatec’s pioneering
research and development teams have
developed as ConvaNiox™. This new technology
is powered by a potent antimicrobial
1
and
antibiofilm
1
agent, nitric oxide², and is
supported by strong clinical evidence.
As ConvaNiox™ scales up, it will initially be
available for the management of DFUs, for
which it has demonstrated outstanding clinical
results
1
. In a randomised controlled trial³,
ConvaNiox™ achieved wound area reduction
three times faster and increased DFU healing
by 60%, compared to the standard of care,
increasing patients’ health related quality of life
(6% improved QALY⁴, equivalent to 22 days of
full health).
The solution is highly complementary
of Convatec’s strong AWC portfolio and
provides best‑in‑class
1
transformative
solutions for patients.
Dr Divakar Ramakrishnan, Chief Technology
Officer and Head of Research &
Development said:
“ConvaNiox™ is a novel multi-modal wound
dressing, uniquely powered by nitric oxide
technology and designed to provide a natural
antimicrobial and antibiofilm mode of action
with compelling clinical outcomes. Convatec will
unlock the potential of this platform technology
through our technical and translational science
expertise. Antimicrobial resistance is one of the
key challenges of our time and we believe the
nitric oxide technology has significant potential
for application across a multitude of MedTech
devices, starting with advanced wound care.
Convatec’s exciting innovation pipeline is the
strongest in our history.”
Market adoption and engagement
Following UK and European regulatory
approval in 2025, ConvaNiox™ is available for
the management of DFUs in the UK, France,
Germany, Italy, Poland and Spain as part of an
initial market launch. This launch has focused
on secondary care and specialist clinics,
supporting patients and HCPs manage DFUs.
Other markets will follow in 2026 and beyond.
ConvaNiox™ offers patients and HCPs renewed
confidence by unlocking the potential of nitric
oxide to treat a range of hard to heal wounds.
1. Citations found at: www.convatecgroup.com/media‑articles/press‑releases/2025/convatec‑receives‑
regulatory‑approval‑for‑convaniox/.
2. Claims may not be supported in all markets.
3. Edmonds ME, et al. Multicenter, randomized controlled, observer‑blinded study of a nitric oxide generating
treatment in foot ulcers of patients with diabetes‑ProNOx1 study. Wound Repair Regen. 2018;26(2):228‑237.
4. Guest, JF and Edmonds ME. “Cost‑effectiveness of a nitric oxide‑generating medical device in managing
hard‑to‑heal diabetic foot ulcers.” Journal of Wound Care 34.7 (2025): 476‑486.
36
Convatec Annual Report and Accounts 2025
Strategic report
Responsible business review
continued
–
Portfolio management:
Our
investment is managed to maximise
value for all our stakeholders. It starts
with detailed regular reviews as
described above. We prioritise projects
where resources are best deployed. In
between reviews, we have our budget
and strategic planning processes and
regular engagement with the Board.
–
Continuous improvement:
While we
continue to develop and launch
medical technology platforms, we
also identify learnings to sustain our
existing products and continuously
improve our overall new product
scale‑up capability. We continue to
incorporate these learnings into our
IDEAL process, as well as our overall
new product operating system
spanning capabilities, metrics,
governance, tools and infrastructure.
This is enabling us to rapidly and
effectively drive continuous
improvement in terms of quality,
speed and value across our portfolio.
Additionally, we have launched an
initiative to reduce cycle time for
developing, scaling up, and launching
our innovation portfolio while
prioritising safety and quality.
New products and solutions
In 2025, we continued to launch new
products with a particular focus on
geographical expansion, including in our
key markets.
Following regulatory approval in Europe
and the UK, we introduced ConvaNiox™,
our first nitric oxide‑based dressing in
France, UK, Germany, Poland, Italy and
Spain, marking a major milestone in
wound healing innovation. ConvaFoam™
also expanded into France, continuing to
deliver superior absorption and longer
wear times. Finally, we extended
InnovaMatrix
®
into Colombia,
strengthening our presence in Latin
America. In Ostomy Care, Esteem Body™
launched in Poland, Germany, Brazil,
China, and Australia, strengthening our
global position. In Continence Care, we
introduced Cure Dextra™ in Italy and
Cure Dextra™ and Cure Ultra™ in Brazil,
expanding our intermittent catheterisation
portfolio. In Infusion Care, we continued to
diversify outside diabetes with Neria
Guard™, supporting AbbVie’s Parkinson’s
launch globally and Supernus in the US.
During 2025, a total of 35 patent filings
were made (2024: 38). In recent years,
there has been an increase in the
number of new platforms developed for
first generation products. The number
of new filings in 2025 is representative
of our focus on filing product upgrades in
addition to new platforms, and adjusting
our patent filing strategy to encompass
filing applications that combine related
inventive concepts.
Evidence‑based medicine
We have continued to make significant
progress in 2025 in clinical evidence
generation, with 33 active clinical
studies (2024: 26), including six global
randomised controlled trials (RCTs)
(2024: four).
In 2025, we shared our evidence
generation work through 20 peer‑
reviewed publications (2024: 12) and
100 scientific posters and presentations
(2024: 69).
Product quality
We recognise the need for continued
progress, and the importance of quality
and product safety for our customers.
We have established ISO 13485 quality
certifications in place across the
business, and since 2021, our complaints
per million (CPM) reduction target has
been leveraged as an ESG target. In
2025, we set a target to reduce CPM in
our B2C categories by 5% against a 2024
baseline, and we exceeded this target
with a 6% reduction.
We continue to look at developing a new
methodology for integration of business‑
to‑business data for CPM as we work
closely with our major partners on this
process and actively engage with
regulators. As the external landscape
continues to evolve with rising customer
and regulatory demands, combined with
continuous improvement of our products
and growing product volumes, we take
our commitment to quality seriously.
Furthermore, in 2025, we continued to
build on our commitment to improve
quality by:
–
Digitising more of our core quality
system processes, to enable ease
of execution and increase availability
of data for proactive analytics
–
Implementing automated inspections
systems to increase reaction speed
in our manufacturing processes
–
Embedding problem‑solving
capabilities
–
Enhancing the quality culture via
increased connections with our
end customers and regular training,
including mandatory complaint
handling awareness training for
all employees
Given our significant improvement in
recent years and low levels of complaints
in our direct‑to‑consumer categories,
we have set a target to sustain low CPM.
At the same time, we look to expand our
data segmentation capability to support
prioritisation and focus on targeted
improvements to maximise impact
on the experience of our customers.
In 2025, we maintained the certification
of our quality system following a series
of external audits and inspections. The
United States Food and Drug Administration
(FDA) undertook a remote
Regulatory
Assessment of Unomedical Devices,
S.A. de C.V. (Unomedical) relating to our
Infusion Care business. Subsequent to
the year end, on 3 February 2026 we
announced that Unomedical had
received a Warning Letter from the FDA,
focused on reporting procedures and
protocols relating to the Quality
Management System. We take these
matters seriously and are actively
engaging with the FDA to resolve the
matters identified as soon as possible.
The letter does not raise concerns
relating to product safety or place any
restrictions on the production,
marketing, manufacturing or distribution
of any Unomedical products.
As part of our supplier audit mechanism,
we conducted a total of 50 audits during
2025 (2024: 107), after two years of higher
audit levels which brought existing
suppliers in line with refreshed procedural
requirements. See pages 42 and 43 for
more on supplier engagement.
From time to time, it may be necessary
to conduct a product recall, following a
detailed internal quality investigation led
by our Quality, Regulatory and Medical
and Clinical Affairs teams. In 2025, we
executed six product recalls (2024: eight),
none of which have been FDA Class 1.
Each of the recalls in 2025 occurred
where the distributed products did not
meet the requirements of our quality
system and we took all necessary steps
to voluntarily ensure customers and
patients were informed and supported.
Access to products, services
and quality information
Access to quality healthcare is a
fundamental human right that should
be available to everyone who needs it.
In 2025, Convatec enhanced its health
economics and outcomes research (HEOR)
capabilities by introducing new roles
dedicated to evaluating patient outcomes,
humanistic benefits, and the economic
value of our products. HEOR plays a
pivotal role in enabling greater patient
access to Convatec solutions through the
undertaking of robust health economic
research that supports reimbursement
and pricing strategies. This research is
closely aligned with clinical trials, market
access strategies and commercial
planning, with a focus on outcomes that
matter to payers, clinicians and patients.
We seek to ensure:
1 Availability:
We continue to evolve
our sales channels to best meet
customer needs. For example, me+,
Convatec’s personalised support
programme for people living with an
ostomy or using intermittent catheters.
This programme supports hundreds
of thousands of people worldwide.
Since its US and UK launch in 2015
for Ostomy Care, me+, has become
37
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
a vibrant community empowering
people with free practical tools,
including a dedicated helpline, expert
product information, lifestyle advice and
access to a community of users.
2 Adaptability:
Based on feedback from
users and HCPs, our products address
a broad range of patient needs
reflecting the different challenges that
individual users experience. In 2025,
we surveyed over 10,000 adults across
five countries to explore the
availability and effectiveness of
support networks that help people
navigate journeys with chronic
conditions.¹ The findings revealed
what living with a chronic condition
truly means, and informed how we
continue to meet patient needs.
3 Usability:
While a product may meet
medical needs, given the social and
emotional context of the people we
serve, we need to provide solutions
which go beyond the provision of a
functional device. To lower access
barriers, we help patients identify the
device which best suits their needs,
provide easy‑to‑follow resources
and support. In Continence Care,
we provide comprehensive product
selection guides and educational
resources to help users master
catheterisation techniques. Our
evidence‑based approach enables
patients to confidently use their
chosen catheter products in everyday
situations.
4 Affordability:
Affordability remains a
priority for Convatec, and in 2025 we
continued to strengthen our global
approach to making high‑quality
products accessible to patients across
diverse economic environments. We
apply a structured, geography‑based
and segmentation‑based pricing
strategy, aligning to local income levels,
reimbursement systems, and the needs
of privately insured, publicly insured,
underinsured, and low‑income patients.
We expanded targeted access initiatives
in selected markets and continued
investing in innovative, cost‑effective
solutions designed for global scale. All
pricing practices remain fully aligned
with local regulatory and transparency
requirements, supporting our
commitment to broaden access while
sustaining responsible business growth.
Medical education
Throughout 2025, we continued to
provide grants to support HCPs and
third parties (such as scientific
congresses, regional bodies, medical
associations, educational and hospitals),
supporting their engagement with
educational and scientific meetings,
programmes, workshops, events,
activities and public education that are
not contingent on the use of Convatec
1. www.convatec.com/ostomy‑care/campaigns/chronic‑conditions/?utm_campaign=showcase_lp_linkedin_fgs_
uk‑meplus‑oc‑gb‑251003
products. We made progress on our
target to reach more HCPs with medical
education programming and patient
education programmes – supporting
over 700 HCPs with medical education
grants and engaging over 210,000 HCPs
in educational programmes.
In 2025, we also launched the
Convatec Learning Platform (CLP), a
product‑agnostic medical education
platform designed to elevate care
standards and expand access to
specialised wound, ostomy and
continence providers globally. CLP
focuses on enhancing clinical competency,
promoting progressive learning,
supporting interdisciplinary collaboration
and translating evidence into practical
skills. Learners receive personalised
content aligned to their goals, and the
platform serves all HCPs involved in caring
for people with chronic wound, ostomy or
continence needs. The initial launch
received strong user feedback which
enabled us to build content development
and quality assurance processes. In 2026,
CLP will launch in the US through hospital
deployments. With concise, on‑demand
clinical content, the platform aims to
improve care delivery, particularly in
settings without certified specialists.
Reliability of supply
We continue to strengthen our supply
chain to ensure reliability and
responsiveness in meeting patient
needs.
2025 has brought new complexities to
global logistics and persistent shortages
in skilled logistics labour. Geopolitical
tensions have also led to higher tariffs
and retaliatory measures, disrupting
traditional trade flows. We responded by:
–
Planning to expand manufacturing
capacity ~20% across our network to
support growing demand, with
completion expected by 2028
–
Accelerating dual sourcing strategies
for critical raw materials, reducing
dependency on single suppliers
–
Reinforcing strategic inventory
positions, enabling rapid response
to market fluctuations
These actions have allowed us to
maintain agility and keep products
moving, even in uncertain times.
In 2025, Convatec launched an
automated unit picking operation at
one of our distribution centres and plan
for automated operations to go live in
two of our other sites in 2026. These
advancements underscore our
commitment to enhancing efficiency,
resilience, and responsiveness across
our global supply chain.
Building on our 2024 milestone of
earning the British Standards Institution
(BSI) Customer Service Excellence
Kitemark, we expanded the scope of our
certification in 2025. This achievement
reflects our commitment to delivering
consistent, high‑quality experiences for
customers worldwide.
Our on‑time, in‑full delivery performance
continues to improve across all regions.
Supported by a rigorous performance
framework and optimised logistics
network design, we have diversified
transport options to mitigate delays
and balance cost efficiency without
compromising quality.
As we move forward, our priority
remains anticipating needs to deliver
solutions that enable better outcomes.
Responsible marketing, freedom
of expression and privacy
Customer centricity
In 2025, we continued to strengthen our
focus on customer centricity and advance
the use of customer Net Promoter Score
(cNPS) as the measure of customer
satisfaction and loyalty within Convatec.
We are working towards capturing cNPS
insights for all our main customer groups,
initially starting with HCPs and expanding
to users and our key B2B customers.
Acting on customer feedback is critical to
the success of our business. We have
embedded our Data, Insights, Action
approach to ensure we consistently listen
to feedback from our customers and act
on the results. We do this at multiple
levels within our organisation, to ensure
our actions are most effective. Where
possible we respond locally to individual
customer issues as well as aggregating
and ensuring our global categories
resolve our most frequently mentioned
pain points.
As a responsible business, our approach
to marketing includes:
–
Governance:
All externally facing
content follows a consistent approval
and regulatory review process, and
colleagues are regularly reminded of
this process
–
Socially conscious principles:
We are
committed to ensuring our marketing
is accessible, diverse and respectful.
We provide materials to remind our
marketers of the need to consider
accessibility, reflect all Convatec
customers and consider how we
sensitively show the lives of people
living with chronic conditions
Data privacy
As part of delivering safe and effective
solutions, we must handle customer data
with the highest standard of care. Data
privacy and data protection is embedded
in our core values and operational
practices. We describe our approach to
data privacy, artificial intelligence (AI)
and cybersecurity on page 45.
38
Convatec Annual Report and Accounts 2025
Strategic report
People and culture
This year, we refreshed our people strategy, strengthened colleague
engagement, and embedded our updated HR operating model – building
a purpose-led, performance-driven business where our teams and
leaders can thrive and bring our forever caring promise to life
Responsible business review
continued
Actions and highlights
Actions
Key policies
–
Sustained top decile colleague engagement
–
Reduced voluntary turnover
–
Shaped new leadership behaviours and launched a new
leadership development programme
–
Sustained progress on inclusion and belonging
–
Two new sites achieved ISO45001 accreditation
–
Sustained our accreditation as a Living Wage employer
–
Human Rights and Labour Standards Policy
–
Environment, Health and Safety Policy
–
Code of Ethics and Business Conduct
Targets
Target
Progress in 2025
Status
Health and safety:
Maintain an annual operations hazard
observation rate above 200 per 200,000 hours worked
353 per 200,000 hours worked
(2024: 291)
Sustain Operations lost time injury rate (LTIR) below 0.22 by Q4
2025
Target update: Sustain Operations LTIR below 0.1
0.02 per 200,000 hours worked
(2024: 0.16)
Inclusion:
50% of senior management¹ positions are held by
females by Q4 2027
48% (2024: 45%)
Ongoing
At least 20% of senior management is ethnically or racially
diverse by Q4 2027
Continued to advance self-ID in
markets where lawfully able to do so
Ongoing
Reduce voluntary turnover to 10% by Q4 2027
7.5% (2024: 9.8%)
Ongoing
Engagement:
New: Sustain colleague engagement score in
industry top quartile through Q4 2027
Industry top decile
Ongoing
Overview and IROs
At Convatec, our people are central to
bringing our vision to life, our winning
culture and delivering sustainable
growth. In 2025, we continued to
strengthen our commitment to safe,
fair and inclusive working practices. We
recognise the importance of accident
prevention measures and safe working
conditions to avoid harm to employee
health and wellbeing, and minimise
other impacts such as operational
disruption, attrition or reputational
damage. Similarly, effective colleague
engagement mechanisms play a vital
role in building trust and shaping our
culture. We remain committed to
safeguarding work-related rights,
including the protection of personal
data and the prevention of child labour,
forced labour and modern slavery, any
breach of which would constitute a
violation of human rights and have
significant consequences.
Convatec will continue to seek
opportunities to strengthen our
workforce and business performance
through inclusive, merit-based practices.
Initiatives such as our colleague
engagement programme and colleague
communities have enabled meaningful
dialogue, contributing to sustained
strong levels of overall colleague
engagement. Our refreshed people
mission to build purpose-led,
performance-driven leaders and teams,
supported by new leadership behaviours
and talent practices, will further enhance
our culture as well as our ability to
attract and retain talent. By embedding
these practices across the business,
we are not only mitigating risks but also
unlocking long-term value for our people
and stakeholders.
At the end of 2025, we employed
10,910² people (2024: 10,489). Employee
turnover in 2025 was 16.2%
3
(2024:
19.5%). Voluntary turnover in 2025 was
7.5% (2024: 9.8%). Information on our
employee profile is illustrated in the
graphs on page 41, while definitions
for employee count and gender
diversity are on page 40.
1. CELT and direct reports, excluding executive assistants.
2. Includes seven Non-Executive Directors. For full breakdown, see page 41.
3. This includes voluntary and involuntary turnover.
39
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
While our employees are based in
45 countries, 57% of our workforce is
employed in locations where we have
manufacturing sites (2024: 57%). In
addition to our facilities in the Dominican
Republic, Mexico and Slovakia, we have
manufacturing operations in the UK
(two locations), Denmark and the US.
Equal treatment and
opportunities
Aligned to our FISBE strategy, in 2025
we refreshed our people strategy,
supported by a new people mission and
leadership behaviours to better meet the
needs of the business. We commenced
work against each of the five pillars of
our people strategy.
Purpose-led, performance-
driven culture
Our values guide our behaviours and
how we run our business. They are
embedded in our policies and processes,
including our performance reviews,
which assess both the ‘what’ and ‘how’ of
each colleague’s individual contribution.
In 2025, we strengthened colleague
engagement by continuing to embed
Peakon Employee Voice by Workday.
With a 94% participation rate, we
secured a top decile engagement score,
according to Peakon’s True Benchmark™
for Healthcare, Pharmaceutical,
Biotechnology & Life Sciences. We have
deployed comprehensive training and
support to people managers to engage
with the survey, sparking thousands of
conversations via the digital platform.
Feedback on the four themes of
engagement, transformation and
change, health and wellbeing, and
inclusion and belonging has helped
shape our strategy.
We continued our global town hall series,
Convatec Live, engaging colleagues
worldwide with our progress, plans, and
customer stories. CELT Live, our virtual
‘coffee and conversation’ series created
opportunities for informal discussions
with our CEO and other CELT members.
Our annual Big Conversation initiative
encourages leader-led discussions on
our vision, promise, strategy, values
and team principles – helping colleagues
understand their role in the context of
the ‘big picture’. In 2026, we will refresh
this programme to incorporate our new
leadership behaviours and further
support teams to be at their best.
Recognising colleagues and their
contribution is an important part of our
core value to ‘grow together’. In 2025,
Convatec Champions, our way of
celebrating colleagues, marked its third
anniversary with over 27,000 awards
given in 2025. Through the digital
platform, colleagues can nominate peers
for an award, aligned to our values. We
celebrated our sixth annual Convatec
Day in 2025, aligned to World Mental
Health Day. Convatec Day gives
colleagues (whose roles allow) an extra
day off to focus on their wellbeing.
We regularly provide reports to the
Board to help assess and monitor
workplace practices and culture,
including progress on our people
strategy, colleague engagement, talent
development and succession planning.
See page 90 for an interview with the
Board’s workplace liaison champion.
Build a thriving culture through
high-performing teams
We continue to integrate inclusion,
belonging and wellbeing practices across
the business. We recognise the value of
ensuring our business reflects the
diversity of customers and patients we
serve, while ensuring that colleagues feel
included and at their best.
Our colleague communities are open to
everyone. In 2025, we launched two new
colleague communities:
Ability
, focused on
disability and neurodiversity, and
REACH
,
focused on ethnic and racial diversity in
Europe. We now have six colleague-led
communities, including the Women’s
Network, Black Employee Network, Latinx
Network and Pride Network.
We expanded our self-ID campaign from
12 to 15 countries, where lawfully permitted,
to enable colleagues to
voluntarily provide
their demographic data for race, ethnicity
and disability status.
We continued the roll-out of our
industry-leading parental leave policy
to all countries, ensuring that colleagues
have access to enhanced maternity and
paternity leave.
As a part of our ESG governance, led by
our Chief People Officer, our Inclusion
Council convenes thematic sponsors
from CELT, leaders of our colleague
communities and subject matter experts
to review our progress and plans.
Consistent with corporate governance
requirements, we monitor colleague
diversity through our HR systems, and the
Board reviews our diversity profile annually.
Optimise organisational effectiveness
As part of simplifying our ways of
working, we introduced a series of
initiatives designed to improve
collaboration, optimise effectiveness,
accelerate key strategic priorities and
enhance colleague experience. In
November 2025, we brought together
50 colleagues for a ‘bootcamp’ focused
on ways of working and accelerating
cycle time as a next step of ongoing
focus on simplification and productivity
– a company-wide effort to
collaboratively address barriers
that might slow us down.
Focus on talent development to
respond to our biggest strategic
challenges
Convatec continues to engage with and
train the next generation, which includes
apprenticeships, internships, and
graduate training across several
countries. In addition to hosting
placements, Convatec also partnered
with education establishments in the US,
Denmark, Slovakia, Dominican Republic
and the UK, offering workshops and
development opportunities around
topics ranging from sustainability and
finance to manufacturing.
In 2025, we welcomed 20 interns from
the UK, Denmark, Slovakia, Mexico,
Dominican Republic, Portugal and the
US to assist with the implementation
of actionable sustainability-related
projects. To facilitate their professional
development and continuity of the work,
each intern presented results of their
project to senior leaders.
We continued to navigate a dynamic talent
and labour market, responding to societal
shifts around flexible and hybrid working,
automation and digitalisation, cost of
living, wellbeing and mental health.
Build key capabilities
Throughout 2025, we made significant
progress with our HR transformation,
and continued to strengthen our
colleague experience by focusing on
simplification and standardisation of key
processes, including leveraging AI and
machine learning capabilities. This
included simplifying the job hiring
process to reduce the number of
approvals and bottlenecks, improving
the onboarding experience through
automation and simplifying our global
payroll offering through better
transparency and consistency.
People mission
Building a purpose-led,
performance-driven organisation
where our people and teams make
a real difference
Strategic pillars
Purpose-led, performance
driven leaders
Build a thriving culture through
high-performing teams
Optimise organisational
effectiveness
Focus on talent development
to respond to our biggest strategic
challenges
Build key capabilities
People strategy
40
Convatec Annual Report and Accounts 2025
Strategic report
We have also focused on building
key capabilities and integrated talent
practices and continue to promote
learning for all colleagues, invest in
leadership development and enhance
manager capabilities. In 2025, over 4,000
colleagues accessed our on-demand
learning platform, engaging with over
210,000 pieces of microlearning content.
We launched instructor-led virtual
onboarding, customised for new hires in
different parts of the business, to ensure
their success, and continued to embed
high-performing team principles through
workshops for leaders and their teams.
Our gender pay gap
The median hourly pay difference
between our UK-based male and female
employees as of 5 April 2025 was 1.14%
(2024: 1.93%). While we primarily report
median figures, mean pay and bonus
gaps were higher in 2025, influenced
by a small number of temporary
senior-level fluctuations in areas such
as equity vesting and new hire buyouts.
When these outliers are adjusted, the
mean gap reduces compared to the 2024
result, confirming that pay equity across
the wider workforce remains intact.
This stability reflects our ongoing
commitment to gender pay equity.
In 2025, we celebrated progress in
female representation at executive
and director levels, achieved through
strategic hiring and career progression.
New appointments strengthened
leadership diversity and will improve
overall balance in the long term. We
also invested in education for our HR
community, reinforcing fair practices
and equity principles in pay, promotion,
and career progression decisions. These
efforts were supported by the continued
refinement of job architecture, pay range
methodology and improved alignment
to market benchmarks.
Our Gender Pay Gap statement covers
all UK entities, going beyond statutory
requirements. We also report in other
markets where regulations apply and
are advancing initiatives to strengthen
pay transparency across our organisation.
In parallel, we are progressing pay equity
analytics across European markets in
preparation for EU Pay Transparency
Directive reporting. The first milestone,
candidate pay disclosure, went live in
Poland in December 2025.
Further information about our pay data
is in our Gender Pay Gap Report, found
at www.convatecgroup.com/
sustainability/esg-reports-and-data.
Employee assistance programme
We actively look at ways to support
our colleagues in line with our values.
In 2025, as well as maintaining annual
pay awards, we continued to raise
awareness of wellbeing support
available as part of our global employee
assistance programme (EAP), which
includes a range of resources such as
educational sessions and personalised
support on topics such as mental health
and financial planning.
Working conditions
and labour rights
Workforce protections and rights
Our Human Rights and Labour Standard
Policy, based on the United Nations
Universal Declaration of Human Rights;
International Labour Organisation’s 1998
Declaration on Fundamental Principles
and Rights at Work (including 2022
revisions) and the OECD Guidelines for
Multinational Enterprises applies to all
our colleagues and business partners
around the value chain. Convatec
recognises and respects the right of
colleagues to establish or choose to join
organisations which are designed to
engage in collective bargaining and
other initiatives to further and defend
the interests of the workforce. Convatec
colleagues may not be discriminated
against by virtue of their membership
of an employee organisation, and
employment is not conditional upon
them not joining or relinquishing
membership of such an organisation.
As part of our internal processes, our
colleagues are active members of
Works Councils and Unions around
the organisation. We partner with
employee’s representatives and Union
delegates to address day-to-day
activities related to our operations. An
open dialogue is encouraged between
employee representatives and
management, based on honest
communication and partnership.
Mandatory annual training on human
rights was deployed in 2023 and includes
freedom of association. See more on our
approach to human rights on page 42.
Our whistleblowing hotline is described
on page 45. Data privacy is also
important for protecting colleagues.
See page 45 for our approach to data
privacy, cybersecurity and AI.
Responsible business review
continued
Increasing diversity
Gender diversity demographic data
Male
Female
Total
Number
%
Number
%
Board
1,2
9
4
44%
5
56%
CELT
2
13
7
54%
6
46%
Senior management
3
68
35
51%
33
49%
Other employees
10,820
4,159
38%
6,661
62%
Total
1, 2, 4
10,910
4,206
39%
6,704
61%
1. Includes seven Non-Executive Directors.
2. The CEO and the CFO are included as members of the Board and CELT. Stated total numbers in final row are
adjusted to remove duplication.
3. Includes direct reports of CELT, excluding administrative staff. The percentage of women in CELT and senior
management combined in 2025 is 48% (2024: 45%). Total population in 2025 is 81 (2024: 78).
4. Excludes freelancers, independent contractors or other outsourced and non-permanent workers who are
hired on a project or temporary basis.
Spotlight:
Leadership for Growth programme
We are shaping what great leadership
looks like at Convatec to further accelerate
our growth – building a common
understanding of the most important
behaviours developed with the input of
hundreds of colleagues across the
company. Our leadership behaviours are a
set of guiding principles designed to
embed our people mission of building a
purpose-led, performance-driven culture.
They will shape how we lead, collaborate
and grow as an organisation.
As part of this, we have developed a new
bespoke leadership development
programme, Leadership for Growth (L4G),
designed to accelerate the development
of purpose-led, performance-driven
leaders, consistent with our refreshed
people strategy. The programme
involves self-directed learning, online
and in-person workshops culminating
in April 2026 to help us move towards
agile, accountable and learning-
oriented leadership.
41
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Paying a living wage
For the ninth consecutive year, we
have been accredited as a ’real living
wage’ employer in the UK and remain
committed to increasing salaries in 2026
for any employees found to be below
the recent living wage increases. In
2025, a market benchmarking exercise
was completed in Reynosa, Mexico to
support a market competitiveness
review, resulting in a recommendation
to adjust salaries based on findings as
part of the overall total reward strategy
for the region. For employees globally
we continue with our annual salary
review increases and are committed
to providing fair pay for our employees.
We require all our contractors to comply
with local laws on employment rights
and continue to work with our contractors
to ensure they pay their employees at
the same rates.
Health and safety
Our Global Environment, Health and
Safety (EHS) team, part of our Global
Quality & Operations function, support
the development of strategy, policies
and standards, audit performance and
support company-wide teams improve
working practices, aligned to both
regulatory and company requirements.
Performance is reported to senior
management, including the ESG Steering
Committee, CELT and Board on a regular
basis. Manufacturing and R&D sites have
dedicated EHS capability embedded at
their location.
During 2025, we progressed the planned
activities associated with machinery and
equipment safety and continued to
target further improvement across our
key initiatives: knife safety, developing
safety-specific standard work
instructions, and enhancing our safety
culture programme, tailoring delivery
to site-specific requirements.
Group-level audits and targeted
development activities have supported
improved engagement, enhanced
working practices and improved
performance.
Our Deeside, UK and Michalovce,
Slovakia sites maintained their
ISO 45001 (Occupational Health &
Safety Management) certification,
with two additional sites (Rhymney,
UK and Reynosa, Mexico) gaining
new accreditation.
There were no fatalities in our global
estate in 2025, maintaining our record
of zero events. We have no tolerance
for conditions that may lead to injuries
in our operations, and in 2025 had an
Operations Lost Time Injury Rate (LTIR)
per 200,000 hours worked of 0.02.
Continued focus on engagement, visible
safety leadership and behaviours has
contributed to this reduction, and
subsequently we will be reducing the
LTIR target to below 0.1.
The continued focus on our proactive
approach to engagement and hazard
elimination has sustained our Operations
Hazard Observation Rate above the
target of 200 per 200,000 hours worked
for 2025, enabling the identification and
elimination of a significant number of
hazards across our sites, with more than
20,000 potential hazards addressed
during 2025.
Our people: at a glance
Employees and contractors
1. Includes voluntary and non-voluntary turnover.
Employees by age
Employees by geography
Employees
Agency staff and independent contractors
Geographical areas 2023-2025
Europe
North America
Rest of World
< 30
30-50
> 50
10,910
286
10,489
233
10,136
301
2025
2024
2023
827
1,038
1,091
1,356
888
1,287
2025
2024
2023
37%
13%
35%
14%
36%
15%
50%
51%
49%
2025
2024
2023
Hires
< 30
30-50
> 50
Leavers
< 30
30-50
> 50
Hires
Male
Female
Hires and leavers by age¹
Hires and leavers by gender¹
Leavers
Male
Female
59%
20%
58%
20%
59%
20%
21%
22%
21%
2025
2024
2023
2025
2024
207
922
1,134
206
252
1,059
736
1,108
864
2023
2025
2024
264
686
1,013
365
360
973
486
706
653
2023
630
806
933
1,149
823
1,163
2025
2024
2023
Our health and safety performance¹
2025
2024
2023
Fatalities
0
0
0
Convatec Lost Time Injury Rate
2
0.03
0.14
0.17
Convatec Hazard Observation Rate
2
292
230
227
Operations Lost Time Injury Rate
0.02
0.16
0.22
Operations Hazard Observation Rate
353
291
265
Lost Time Injuries
2
10
12
1.
The data is based on OSHA definitions and rates are calculated based on 200,000 hours worked, as described
in our Basis of reporting (see page 33).
2. Lower rates are desirable for Lost Time Injury Rates; higher rates are desirable for Hazard Observation Rates.
42
Convatec Annual Report and Accounts 2025
Strategic report
Supply chain
Responsible business review
continued
Effective and responsible supply chains and practices are fundamental
to our business success. They ensure we deliver quality products while
protecting the people who keep the value chain operating. We hold
ourselves accountable for the commitments we make and expect the
same level of commitment from partners
Overview and IROs
Our suppliers and partners play a central
role in our success. We work together to
ensure we have access to the products,
materials, components and services we
need to meet customer needs. We
recognise that our responsibility to
protect human rights and promote safe
working conditions extends beyond our
own operations into our global value
chain. In 2025, we continued to strengthen
our oversight of supplier practices and
enhance engagement, acknowledging
that unsafe working conditions and
breaches of labour rights – such as
forced labour, modern slavery or human
trafficking – pose serious consequences
for individuals as well as financial, legal
and reputational risks to business.
Managing these impacts and risks will
minimise any disruption to operations
and sustain stakeholder confidence.
At the same time, potential challenges
present opportunities to drive positive
change. By proactively managing
supplier relationships and committing
to high standards across our value chain,
we can help improve health and safety
outcomes for workers, reduce exposure
to human rights violations and support
our reputation as a responsible business.
Our commitment to ethical sourcing
and due diligence aligns with our values
‘Do what’s right’, ‘Grow together,’ and
‘Deliver results’ – while building a resilient,
transparent and sustainable supply chain.
Principles, policies and governance
We regularly review our Human Rights
and Labour Standards Policy, which
incorporates principles and guidelines
set out in the United Nations Universal
Declaration of Human Rights, Modern
Slavery Act and the UN Guiding
Principles on Business and Human
Rights, and addresses a range of issues,
such as equal opportunities, anti-
harassment and dignity at work.
We pledge to follow the UN Global
Compact’s (UNGC) ten principles
on human rights, labour, environment
and anti-corruption.
We require that new suppliers agree to
adhere to our third-party compliance
manual, which covers a range of topics
including commitments to the
International Labour Organisation
conventions, the Principles of the
UNGC and environmental protections.
It extends our Code of Ethics and
Business Conduct and our Human
Rights and Labour Standards Policy to
the supply chain. The manual is introduced
to all new supplier contacts and existing
supplier contracts when renewed, and
is referenced in supplier terms and
conditions in every purchase order. Our
Sustainable Procurement Policy outlines
expectations on our suppliers to engage
with our due diligence activities.
Our policies and statements, including
our Modern Slavery Act Statement, can
be found at www.convatecgroup.com/
investors/governance/our-policies-and-
statements/.
In 2025, our cross-functional Human
Rights Committee, a sub-group of our
ESG Steering Committee, continued
driving forward this important agenda.
Chaired by our Chief People Officer,
and including our General Counsel &
Company Secretary and colleagues from
HR, legal, compliance, supply chain and
global corporate affairs, the Committee
reviewed and updated our human
rights-related policies and practices
and identified strategies to strengthen
supplier due diligence.
Actions and highlights
Actions
Key policies
–
Continued audit activity on high-risk suppliers
–
76% of our key suppliers improved their EcoVadis scores
–
Simplified and standardised supplier contracting process
–
Human Rights and Labour Standards Policy
–
Code of Ethics and Business Conduct
–
Sustainable Procurement Policy
–
Global Third-Party Compliance Manual
Targets
Target
Progress in 2025
Status
Procurement and supply chain:
Ensure 100% of high-risk
suppliers are assessed on Sedex or EcoVadis (third-party risk
assessment platforms) by end of 2026
37% of high-risk suppliers have been
assessed on Sedex or EcoVadis
See page 48 for target on
procurement and Scope 3 emissions
Ongoing
Procurement and supply chain:
Achieve 100% of key suppliers
attaining an EcoVadis score of at least 45 by 2026
91% of our key suppliers have scored
at least 45 on EcoVadis
Ongoing
43
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Consistent with our core values, we are
embedding a culture of respect within
Convatec. To support this, we launched
a Global Human Rights e-learning
module in 2023. Grounded in our Human
Rights and Labour Standards Policy,
this interactive module covers topics
such as human trafficking prevention,
compulsory labour, supply chain
concerns, speaking up and environmental
issues. The training contents are
reviewed annually, with additional topics
added as needed, and applies to our
workforce and the value chain.
Supplier due diligence
To help protect against the risk of a
third party acting unethically, our teams
conduct a range of due diligence and
related activities.
Initial screen
The majority of our suppliers are initially
screened by a third-party platform,
EcoVadis IQ, to identify modern slavery
risks based on a range of factors,
including geography, industry and
historical performance.
This first screening has identified
elevated risks among suppliers in
China and Türkiye. As a result, all of our
China-based suppliers have undergone
audits, with corrective actions
implemented, particularly around
payment practices. Our supplier in
Türkiye completed an EcoVadis
Assessment with no further risks
identified. Facility management suppliers
have also been flagged as high-risk and
will complete Sedex self-assessments in
2026. While Convatec does not employ
migrant labour, we occasionally use
temporary labour; our own Sedex
self-assessments confirm that
appropriate policies and controls are in
place. All Convatec manufacturing sites
have completed Sedex self-assessments,
ensuring internal alignment with our
ethical standards.
Beyond our direct supply chain, we
monitor over 100 additional suppliers
daily for modern slavery risks using
another digital tool, and are reviewing
best practice methods to map and
understand our n-tier supply chain.
Self-assessment and audit
Suppliers identified as high-risk of
modern slavery are required to complete
a Sedex self-assessment questionnaire
(SAQ), unless they have already
completed an EcoVadis assessment. Our
target is to have 100% of our high-risk
suppliers assessed by 2026. The SAQ
includes topics related to discrimination,
health and safety and worker conditions.
Through the Sedex self-assessment,
suppliers with risks identified that have
potential to conflict with our Code of
Conduct are expected to complete a
Sedex Members Ethical Trade Audit
(SMETA). We also require all our key
suppliers to complete an EcoVadis
assessment and achieve a minimum
score of 45. Suppliers falling below this
threshold undergo targeted audits
focused on human rights. In 2025, nine
suppliers have completed such audits,
bringing the total to 15.
Engagement
We operate processes to facilitate
corrective actions after SMETAs, to
ensure vendors are engaged promptly
when a risk event occurs and that these
events are tracked through to
satisfactory closure.
For direct suppliers, annual risk
assessments are complemented by daily
monitoring for compliance and human
rights issues. Any alerts regarding
modern slavery or related concerns
are addressed immediately.
Through our monitoring and auditing
practices, we recorded zero incidents
of modern slavery in 2025. If any human
rights-related incidences arise, our
escalation processes include supplier
education, corrective action plans and,
where necessary, supplier exit strategies
and notification to relevant authorities.
Working responsibly
with partners
To drive sustainability improvements
through our supply chain, we require
our key suppliers to complete an EcoVadis
assessment with the expectation that
they score above our minimum accepted
threshold. Key suppliers are defined
through our supplier relationship
management programme. These
suppliers are our most important with
high spend, strong levels of collaboration
and are involved in driving innovation
projects with Convatec.
In 2024–25, 96% of our key suppliers
completed an EcoVadis assessment,
with the average score across our key
suppliers being 64. We aim to grow the
average EcoVadis score of our key
suppliers, with any key supplier scoring
below ‘Committed’ on their EcoVadis
assessment by the end of 2025 being
required to complete a SMETA audit
in 2026.
Like many MedTech companies,
our products are often sold by third
parties, such as distributors. We
have communicated our requirements
to our partners, including setting out
our monitoring arrangements for
sustainability performance,
expectations around minimum
standards and requirements for annual
disclosure of greenhouse gas (GHG)
emissions, commitment to setting
Science Based Targets (SBTs) and the
publishing of carbon reduction plans
(see more on procurement and
environmental stewardship on page 50).
Expectations vary based on their
industry and magnitude of the supply
relationship, taking a proportionate
approach so that we focus on the
suppliers and supply categories that
have the largest impact and influence
on our sustainability performance.
Convatec’s sustainability requirements
are now part of our standard request
for proposal and contract documentation
so that all new suppliers understand
and accept these at the start of our
trading relationship.
Resilience and continuity
Business resilience is fundamental to
delivering on our promise to customers
and patients worldwide. A robust and
reliable supply chain ensures those who
depend on our products receive them
without interruption. To safeguard this
commitment, we continuously monitor
all direct suppliers through our advanced
risk profiling tool. This system provides
real-time alerts on potential financial
distress – whether indicated by changes
in payment behaviour or fluctuations in
share price. It actively monitors for
corruption and fraud risks, including
sanctions and bribery, as well as external
threats such as natural disasters and
political instability. Any detection of
human rights violations within our
supply chain triggers immediate review.
Improving
collaboratively
Over the past year, Convatec worked
closely with a long-standing supplier to
drive sustainable improvements in our
operations. Together, we initiated a
project to reduce carbon emissions
associated with Industrial Denatured
Alcohol (IDA), a key component in
our AWC manufacturing process.
The project started when Convatec
identified IDA as a carbon ‘hotspot’
in our operations. Though the majority
of IDA used in our operations is
recovered for reuse, there remained
a gap where we historically procured
virgin IDA. Through conversation and
collaboration, we worked with the
supplier to identify how they could
supply recycled IDA instead of virgin,
and how this would suit the
technological requirements of the
manufacturing process and reduce the
Scope 3 emissions from this raw
material. The switch was successfully
implemented in 2025.
44
Convatec Annual Report and Accounts 2025
Strategic report
Business ethics and society
Responsible business review
continued
Our value ‘Do what’s right’ applies to everything we do and informs
our interactions with stakeholders. By conducting business responsibly,
we further strengthen our sustainable and profitable growth
Actions and highlights
Actions
Key policies
–
New due diligence tool and third-party assessment process
–
Launched mandatory training on use of AI
–
New Privacy Risk Framework
–
Strengthened data privacy processes
–
Refreshed Code of Ethics and business conduct training
–
Enhanced conflict of interest management process
–
Code of Ethics and Business Conduct
–
Human Rights and Labour Standards Policy
–
Sustainable Procurement Policy
–
Global Third-Party Compliance Manual
–
Data Privacy Policy
–
Acceptable Usage of Artificial Intelligence Policy
–
Interactions with Health Care Professionals Policy
Targets
Target
Progress in 2025
Status
Human rights:
Ensure at least 95% of employees complete
mandatory annual Human Rights training by Q4 2025 and in
subsequent years
86% (2024: 84%) with plans for
enhanced deployment in 2026
Ongoing
Code of conduct:
Ensure at least 95% of employees complete
mandatory annual training
99% trained in 2025 (2024: 99%)
Community impact:
Contribute $2m to our community
partners to improve lives by end of 2025
Completed our three-year scope of
work with Partners In Health (PIH),
with $2m in cash and $1.2m product
donated since 2023. Commitment to
extend to 2028 announced.
Touch one million lives in our communities through medical
education programming and support of strategic community
partners, by 2027
Since 2023, touched over 250,000
lives with PIH and over 688,000 HCPs
trained with medical education
Ongoing
Overview and IROs
We recognise the importance of
embedding responsible business
practices across stakeholder
relationships, recognising that how we
operate affects those who rely on our
products and solutions. Convatec’s
culture is rooted in our values and
enhances our ability to attract and retain
talent, which in turn drives innovation
and better outcomes for customers. We
recognise the potential impact and risk
of inadequate whistleblower protections
or poor supplier management which
could lead to unethical behaviour,
operational disruption and reputational
harm, ultimately impacting customer
trust and product delivery.
As described on page 42, we also
understand our due diligence and
contracting processes with suppliers
can positively influence their social and
environmental performance, amplifying
our impact across the value chain.
Nonetheless, we remain vigilant against
corruption and bribery, which pose
serious financial and legal risks.
These topics not only represent potential
risks and negative impacts, but also clear
opportunities to strengthen our
reputation, improve resilience and deliver
better value to customers through ethical
and transparent business conduct.
As we conduct business aligned to our
forever caring
promise, we also consider
the effect we have on communities
around us. In addition to meeting our
tax obligations, we engage in charitable
activity that is meaningful for colleagues
and impactful to community stakeholders.
Corporate culture
Ethics and compliance governance
An executive-level Compliance
Committee meets with our Chief
Compliance Officer on a quarterly basis
to review the ethics and compliance
programme, including its risk
assessment and mitigation efforts;
investigative and monitoring oversight;
and policy development and educational
delivery. The Audit and Risk Committee
(ARC) also meets with the Chief
Compliance Officer quarterly. This
helps ensure that ethics and compliance
concerns are discussed and actioned
at the highest levels of the business.
Regular company-wide and localised
communications and education assure
that all of our people are aware of the
ethical standards expected of them.
Our extensive ethics and compliance
programme incorporates the following
policies and procedures:
–
Maintaining a Code of Ethics and
Business Conduct (Code of Conduct)
that is updated regularly and
mandating annual training for all
employees either online, with electronic
acknowledgement of completion, or
through live participation in town hall
or local meetings. In 2025, we met our
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Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
target to ensure at least 95% of
employees are trained on our Code
of Conduct annually, with a completion
rate of 99%
–
Making available an independent
and confidential Compliance Helpline
(Speak Up) and web link for employees
and third parties (www.convatec.
ethicspoint.com), to seek guidance
and to anonymously report suspected
deviations or policy breaches
–
Making it easy for issues to be reported
by colleagues, reviewed by our Ethics
& Compliance and Human Resources
teams where appropriate, ensuring
that any resulting investigation and
outcome of any significant issues are
properly remediated
–
Regular on-site or computer-based
monitoring of business activities to
assure they are consistent with policy,
including the Code of Conduct
–
Providing an additional line of defence
through our risk assessment process,
which involves direct engagement with
global market or functional leaders,
and our commitment, when areas of
concern are identified, to work with
those leaders on an ongoing basis
to improve business practices
–
Maintaining an anti-bribery and
anti-corruption framework, including
employee training, due diligence on
third parties and continuous
monitoring of business activities and
transactions to identify potential risks
–
Ensuring conflict of interest measures
identify actual or potential conflicts
of interest. In recent years, we’ve
expanded the number of team
members that participate in a web-
based survey mechanism and plan
to expand the scope of the survey
participants to include all management
and senior commercial roles by 2027
–
Updated Compliance Controls
framework
In 2025, we also launched a new due
diligence platform for third parties,
including distributors, to ensure our Code
of Conduct applies across the value chain.
For details on how we manage supplier
relationships, see pages 42 to 43.
Data privacy, cybersecurity and AI
Embedding forever caring
in a digital world
We recognise that the protection of
personal data extends beyond regulatory
obligations; it is an expression of our
commitment to the individuals we serve,
including patients, customers, partners
and colleagues.
In 2025, we matured our approach to data
privacy, transitioning from compliance-
focused activities to a risk-based,
strategic, business-aligned approach.
A new Privacy Risk Framework, feeding
into the Enterprise Risk Management
Framework, will provide greater visibility
over the maturity of the overall Privacy
Programme, and each of the
Programme’s domains. This evolution
reflects our recognition that robust
privacy management is essential to
maintaining trust and supporting
sustainable growth in a constantly
evolving digital environment. The
framework remains aligned to data
protection principles and requirements
enshrined in applicable privacy
regulations, including the European
Union General Data Protection Regulation
(GDPR), the California Consumer Privacy
Act (CCPA) and the Chinese Personal
Information Protection Law (PIPL).
As we continue to advance simplification,
we look to remove organisational silos
related to data privacy and cultivate
stronger partnerships across the business.
Recognising that our Privacy Policy
Framework was overly complex, we
conducted thorough review of the
Framework, streamlining and significantly
reducing the total number of policies and
simplifying governance and accountability
structures. The ARC maintains its oversight
of our privacy governance framework
whilst we have strengthened ARC- and
CELT-level accountability through increased
transparency, reporting and by removing
complexity from the governance model.
Training and awareness are critical pillars
of our Privacy Programme, ensuring that
employees at all levels understand their
responsibilities and the importance of
safeguarding personal data. In 2025, 97%
of colleagues completed training on data
privacy, reflecting our strong commitment
to fostering a culture where data
protection is embedded in everyday
practices and decision-making. In 2026, we
will be rolling out playbooks and functional
training to high-risk teams, providing
in-depth training to marketing, HR and
Digital Technology & Innovation
colleagues.
This strategic shift in our approach to data
privacy supports Convatec’s continued
digital transformation, particularly as we
embrace AI and enhance our omnichannel
capabilities. By proactively adapting to the
dynamic regulatory landscape and
continually strengthening our privacy
practices, we are well-positioned to
capitalise on emerging technologies while
upholding the highest standards of
diligence, trust and compliance.
In February 2025, one of our US
subsidiaries,180 Medical, experienced an
isolated data security incident resulting
from a phishing incident. Convatec’s
Incident Response Group responded
quickly to the incident, notifying impacted
employees and applicable data protection
authorities. No further regulatory action
was deemed necessary. There were no
other significant incidents or issues
reported to data protection authorities. We
received 10 data subject access requests.
For further information on our legal,
compliance and privacy risk, see page 71.
AI
Convatec continues to strengthen our
principles-based AI governance
framework that prioritises responsible
risk management for our patients,
customers, colleagues and business.
We have made significant strides in
deploying enterprise-grade AI platforms
to enhance insights, speed to market and
productivity, and have embraced trusted
solutions such as Microsoft Copilot,
implementing approved use cases that
support harmonisation, efficiency and
informed decision-making across the
organisation. With high levels of AI
literacy training completed and
increasing use of productivity tools,
Convatec continues to embed AI in a
responsible, well-managed and
future-ready way.
In line with evolving regulatory
expectations, including the EU Artificial
Intelligence Act’s requirements on
governance and AI literacy that went into
effect in 2025, we are strengthening
oversight through our AI Steering
Committee and ARC governance
structures to ensure safe and compliant
adoption of AI technologies. In 2025,
internal audit assessed the effectiveness
of our Responsible AI Programme, all of
our digitally enabled colleagues
completed AI literacy training and over
1,000 colleagues have access to and
regularly use AI productivity tools.
Use of animals in research
At Convatec, we seek to minimise the use
of animals in research. Consistent with
other leading organisations and
established practice, we have adopted
the 3Rs – replacement, refinement and
reduction of use of animals in research,
and continue to identify innovative
solutions to gain knowledge and support
regulatory submissions without the use
of live animal models.
Every effort is made to conduct as much
of our research with benchwork, cell
cultures and where appropriate, ex-vivo
tissue models. When live animal models
are required, our research is highly
regulated to ensure responsible, ethical
and humane treatment by following local
ethical approval boards, laws and
regulations. We conduct our research
at reputable facilities and organisations
that are Assessment and Accreditation
of Laboratory Animal Care (AAALAC)
accredited (or equivalent) with fully
trained veterinarians and dedicated
welfare teams.
All medical devices are required to
show biocompatibility prior to approval
and use, per ISO 10993-1:2018. This
requirement is enforced by government
authorities and is part of the registration
process for medical devices. As part of
this requirement, certain biological risks
are required to be evaluated and
mitigated through the use of testing.
In some cases, some biological risks are
only able to be evaluated through the
use of defined and prescribed animal
tests. As such, when mandated we will
execute the critical biocompatible
verification tests required by the ISO
standards to ensure patient safety and
registration requirements.
46
Convatec Annual Report and Accounts 2025
Strategic report
We do not willingly perform any animal
testing in the development or functional
verification of our devices, as described
in our Ethical Issues and New Product
Development Policy, which can be found
at www.convatecgroup.com/investors/
governance/our-policies-and-
statements.
To avoid the use of living animal studies,
in 2025 we used porcine (pig) ex-vivo
tissue models to assess urethral tissue
damaged by novel urinary catheters.
All ex-vivo models were collected from
animals that were being slaughtered
for other reasons. Our ex-vivo tissue
suppliers are either AAALAC accredited
or are UK registered to supply animal
by-products (EU Article 23, No.
1069/2009).
In 2025, as part of our biological risk
assessment to determine compatibility
of our devices within a biological system,
we conducted biocompatibility tests
using 44 swine, 75 guinea pigs,
31 rabbits and 219 rodents
(2024: 13 swine, 120 guinea pigs,
38 rabbits and 209 rodents).
Convatec Advanced Tissue Technologies
(ATT) products are derived from porcine
placentas. These are derived naturally
through the birthing process and
provided in partnership with a farm.
The placentas are subsequently stored
at ultra-low temperatures until required.
No swine are destroyed or affected in
the process. In order to better
understand the quality of healed tissue
following treatment with ATT products,
a small animal study was required as
benchtop models were not able to
adequately replicate the complex
environment of chronic wounds. For this
study, a total of 33 rodents were utilised.
All studies were approved by local animal
welfare committees and/or responsible
government authorities.
Memberships and ratings
Our commitment to operating ethically
and transparently is represented in our
consistent performance on ESG-related
ratings. We also disclose against various
reporting schemes that we believe offer
value to our stakeholders and align with
our material ESG topics.
In 2025, we disclosed against Carbon
Disclosure Project (CDP), Sustainability
Accounting Standards Board (SASB) and
Global Reporting Initiative (GRI) (see
www.convatecgroup.com/sustainability/
esg-reports-and-data/), FTSE Women
Leaders Review, Workforce Disclosure
Initiative (WDI) and maintained UK Living
Wage Foundation accreditation. Our Task
Force on Climate-related Financial
Disclosures (TCFD) report is found
on pages 52 to 65.
Ratings
Rating organisation
2025
2024
2023
ISS
B-
B-
B
Sustainalytics Risk Rating
1
10.5
14.1
16.6
MSCI²
AAA
AAA
AAA
CDP
B
B
B
CDP Water
B-
B-
–
EcoVadis
65
67
54
WDI³
91%
90%
73%
1.
As at August 2025, Convatec rated low risk. Lower scores are desirable for Risk Rating.
2. Disclaimer: The use by Convatec of any MSCI ESG Research LLC or its affiliates (MSCI) data, and the use of MSCI
logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement,
recommendation or promotion of Convatec by MSCI. MSCI services and data are the property of MSCI or its
information providers, and are provided ’as-is’ and without warranty. MSCI names and logos are trademarks
or service marks of MSCI.
3. Completion rate. Higher scores are desirable.
In the past year, we have engaged on
sustainability topics with the Advanced
Medical Technology Association (AdvaMed),
MedTech Europe, Asia Pacific Medical
Technology Association (APACMed) and the
Association of British HealthTech Industries
(ABHI). We are also members of the UK
All-Party Parliamentary Corporate
Responsibility Group.
We are proud members of FTSE4Good,
a global sustainable investment index
series, designed to identify companies
that demonstrate strong ESG practices
measured against international
standards.
Responsible business review
continued
Supporting the United Nations Sustainable Development Goals
We support the United Nations Sustainable Development
Goals (SDGs) which aim to align governments, businesses
and the civil society sector in their efforts to end poverty,
fight inequality and address climate change. As a supporter
since 2018, Convatec joins over 15,000 companies as a
participant in the UN Global Compact (UNGC) in which
we pledge to follow the UNGC’s ten principles on human
rights, labour, environment and anti-corruption.
Though all 17 goals are interlinked and important to
stakeholders, we have prioritised six goals where we
can contribute to a more sustainable future: these are SDG 3
(Good health and well-being), 5 (Gender equality), 8 (Decent
work and economic growth), 10 (Reduced inequalities), 12
(Responsible consumption and production) and 13 (Climate
action). A description of how our activity contributes to SDG
targets can be found on our website at www.convatecgroup.
com/sustainability/our-frameworks-and-targets/.
47
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Socio-economic contribution
to society
By operating in line with our values,
we contribute to society socially and
economically. The table on the right
summarises this impact for various
stakeholders. We also acknowledge
the direct and indirect benefits to
communities from our products,
services and job creation.
Contribution to governments
We are fully committed to meeting
our legal tax obligations in each of
the countries in which we operate.
We fully support and embrace greater
transparency with tax authorities and
the initiatives being introduced by
the Organisation for Economic Co-
operation and Development (OECD)
and governments to ensure clarity
and adherence to the tax laws of
each jurisdiction in which we operate.
Our Tax Strategy is available at
www.convatecgroup.com/investors/
governance/our-policies-and-statements/.
Value to communities
Globally, our approach is to support
community partnerships on issues that
closely align with our vision and values,
and where the majority of our people
are based and their impact is made.
In recognising that the way in which
we operate enhances the contribution
we make to local communities, we
maintain partnerships with select
non-governmental organisations
(NGOs) to achieve maximum impact.
These partnerships focus on issues
of healthcare access/equity, education
and disaster relief.
The monetary value of community
investment varies year to year based on
community needs and planned
programmatic activity. In 2025, we
supported our communities through
$725,000 to community partners,
$200,000 of product donated and
>$480,000 in medical education grants
supporting 748 HCPs.
In 2025, Convatec entered the third year
of collaboration with the international
NGO Partners In Health (PIH). Focused
on key geographies of Mexico, Peru and
the United States, the partnership aims
to advance innovative methods for
recruiting, training and deploying
Community Health Workers (CHWs) and
enhance treatment of chronic conditions.
The combination of financial support,
product donations and medical
education has trained over 1,000 CHWs
in underserved communities, by
extension touching over 250,000 lives.
To see more about the partnership, its
objectives and impact numbers, see
2025
$m
2024
$m
2023
$m
Direct economic value generated
2,439.1
2,289.2
2,142.4
Economic value distributed
Operating costs
1
987.7
947.6
937.1
Employee wages and benefits
818.0
767.2
701.3
Payments to providers of capital
2
315.7
349.2
223.2
Payments to governments
3
117.7
82.3
61.2
Community investment
4
0.9
1.8
1.3
Economic value retained
199.1
141.1
218.3
1.
Operating costs exclude depreciation, amortisation, impairment charges, asset write-offs and operating
taxes. Employee wages and benefits, payments to governments and community investments are normally
part of operating costs, but have been excluded as they appear on separate lines in the table.
2. Payments to providers of capital have been included on an accruals basis and include interest paid on
long-term debt, capital and interest payments on right-of-use assets, net debt repayment, dividends and own
share reserve purchase paid to Convatec shareholders.
3. Payments to governments include corporate income taxes, sales taxes, real estate taxes and other taxes, but
exclude employer portion of payroll taxes, as they are included in employee wages and benefits.
4. Calculated as costs associated with charitable community donations.
www.convatecgroup.com/sustainability/
protecting-the-planet-and-supporting-
communities/supporting-communities/.
We have recently announced the
extension of this programme, as a
legacy to our former CEO, Karim Bitar,
committing a further $2m between
2026-28.
Volunteering
Throughout the year, Convatec
colleagues spent hundreds of hours
in their communities, participating in
volunteering activities on issues that
matter to them. For the fourth year,
we hosted ‘
Forever caring
month’ to
encourage colleagues to get involved in
their communities and utilise company-
supported volunteering time guaranteed
in our volunteering policy. Stories are
shared and celebrated.
48
Convatec Annual Report and Accounts 2025
Strategic report
Strategic report
Actions and highlights
Actions
Key policies
–
>99% renewable electricity procured globally
–
Environmental (ISO 14001) and Energy (ISO 50001) management
system certification
–
Zero waste to landfill certification
–
Increased suppliers committed to set SBTs
–
Improved shipment streamlining capabilities with automated
consolidation tool and emissions calculator
–
Environment policy
–
Sustainable procurement policy
–
EHS statement
–
Ethical issues and new product development policy
Targets
Target
Progress in 2025
Status
Emission reduction:
Achieve net zero carbon (in line with our SBTs) by 2045
Scope 1, 2 and 3 reductions (see below)
Ongoing
Reduce our combined Scope 1 and 2 (market-based) emissions by 70%
against a 2021 baseline, in line with our SBTs, by 2030
64% (2024: 62%)
Ongoing
Reduce our Scope 3 emissions by 52% per sold product against a 2021
baseline, in line with our SBTs, by 2030
-19% (2024: 2.5%) in-year reduction of our
SBT Scope 3 emissions per product; -16%
against baseline
Ongoing
Scope 3 targets:
Procurement and supply chain: Ensure that suppliers covering 60% of our
Scope 3 category 1 emissions have committed to set SBTs by end of 2026
Suppliers covering 19% of our category
1 emissions have committed to set or
already validated near-term SBTs at end
of 2025
Ongoing
Product development: Establish a Product Stewardship team to maintain our
carbon intensity database and green design tools by 2026
Target update: Conduct life cycle assessments (LCAs) on all key new products
Product Stewardship team established.
The carbon intensity for Convatec
manufactured product raw materials
maintained in a searchable database.
Data informs the green design
assessment required at each
development stage of our new
product development process
Environmental stewardship
Responsible business review
continued
We recognise the importance stakeholders place on environmental
stewardship and remain committed to managing our impact, working
closely with partners and our supply chain, while responding to
regulatory requirements
Convatec is committed to net zero
Climate change continues to impact all industries to accelerate
a low-carbon transition and align with the goal of limiting global
temperature rise to 1.5°C. For the MedTech sector, and for
Convatec, this challenge has implications across operations,
supply chain and markets. The transition to a low-carbon
economy introduces significant risks, from regulatory and
financial exposure to supply chain vulnerabilities. It also
potentially unlocks transformative opportunities to innovate
and adapt in delivering sustainable healthcare solutions.
In 2025, we continued to focus on both mitigation and
adaptation, recognising that climate resilience is important to
our long-term success. To guide this journey, we have organised
our efforts under six strategic themes, designed to evolve as
new risks and opportunities emerge. By working across our
value chain and engaging deeply with stakeholders, we aim
to maximise our influence and impact, prioritising levers
that accelerate meaningful progress toward a net zero future,
while creating value for customers, partners and society.
We recognise that achieving meaningful progress toward net
zero is not without challenges. Like many businesses, making
long-term commitments and investing in operational changes,
we continue to face barriers, including reimbursement
frameworks that do not always reflect the social value of
sustainability investments. These external realities reinforce our
focus on what is in our control, as well as continuing to advocate
for policies and partnerships that reward innovation and enable
long-term climate resilience across healthcare systems.
49
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
We will work together with our
stakeholders to meet our ambition
and overcome sector challenges:
Our customers
and patients
Understanding their needs to ensure
we can meet climate ambitions without
compromise on the availability, efficacy
and safety of products.
Our colleagues
Furthering integration and accountability,
with investment in climate-related digital
tools that allow teams to make informed
and innovative decisions.
Our communities
Fostering responsible commerce, minimising
operational impacts and championing
local stewardship to ensure our activities
contribute positively to our communities.
Our industry
Participating in opportunities for
industry collaboration, seeking ways to
address key sector challenges such as
the need to balance material and design
alternatives with product efficacy.
Our net zero and climate resilience objectives require activating
decarbonisation and adaptation measures across our value chain,
from product innovation to distribution.
Products
Delivering products and solutions that meet the needs of our patients and customers,
ensuring efficacy, quality and safety, whilst exploring design and material alternatives
to continually reduce climate impact.
Logistics
Driving efficiency in logistics through better data, consolidating transportation and
switching to lower-carbon modes of transport.
Packaging and waste
Reducing the amount of production waste and aligning to waste hierarchy to focus on
prevention and recycling for primary, secondary and tertiary packaging.
Operating process
Optimising lower-carbon or renewable energy use to enhance efficiency, lower emissions
and drive sustainable production in our direct operations.
Supply chain
Working closely with suppliers to achieve shared goals and raise ambition by encouraging
suppliers to set SBTs.
Adaptation
Responsibly managing natural resources and investing in solutions to strengthen resilience
to physical climate impacts.
Working together
Our climate ambition
Targets and levers
Investing in decarbonisation
Our GHG emissions reduction pathway is guided by our SBTs for our Scope 1,
2 and 3 emissions. This is supported by a set of specific sub-targets across our
key impact areas that help drive investment into achieving our climate strategic
ambition.
We have identified and begun to activate key decarbonisation levers to reduce
our Scope 1 and 2 emissions, including investing in renewable energy, enhancing
energy efficiency through technology upgrades and transitioning to lower-carbon
fuels where feasible. For further information on our decarbonisation activities see
page 50.
Total spend FY24–FY25:
$10m
Committed spend FY26–FY30:
$25–35m
Remaining Scope 1 and 2 emissions
reduction levers (tonnes CO
2
e):
Key targets
2025
2030
2035
2040
2045
Scope 1 and 2 emissions from 2021 baseline year
70%
Scope 3 emissions per product sold from 2021 baseline year
52%
Scope 1, 2 and 3 emissions, plus 100% neutralisation at 2045
90%
Suppliers covering 60% of category 1 emissions set SBTs
SC
100% renewable energy
DO
Deliver sustainable water withdrawal at high water-stressed locations
and develop our water management practices at all locations
A
Certify 100% our waste diversion from landfill practices
P+W
SC:
Supply chain
P+W:
Packaging and waste
DO:
Direct operations
A:
Adaptation
Implemented decarbonisation
Steam and heat decarbonisation
HVAC replacements
A
c
h
i
e
v
e
d
r
e
d
u
c
t
i
o
n
s
2
0
2
1
–
2
5
P
l
a
n
n
e
d
a
c
t
i
o
n
s
2
0
2
6
–
3
0
50
Convatec Annual Report and Accounts 2025
Strategic report
Responding to challenges in the low-carbon transition
Responsible business review
continued
Our plans to achieve a net zero transition require broad stakeholder collaboration on challenges affecting our ability to implement change,
considered within the context of industry-specific medical safeguards.
Our value chain
Supply
chain
Engaging suppliers and procurement processes
We engage suppliers through regular business reviews, embedding emissions reduction into our procurement approach. In 2025,
data collected directly from suppliers reduced reliance on spend-based emission factors, improving our data accuracy and
informing future areas of focus. Our Sustainable Procurement Policy has embedded ESG criteria into Requests for Proposals (RFPs)
and contracts. We use the EcoVadis platform to assess suppliers on environmental performance and to support their continuous
improvement through supplier review meetings.
Products
Digital tools and baselining
We have refreshed our digital product sustainability database to improve the accuracy of our emissions profile through enhanced
carbon intensity data and analytics. This includes the identification of carbon hot-spots across our product raw materials to focus
assessment of alternative design options and monitor the impact of product changes.
We continue to broaden participation in our Green Design Guidelines which help us to consider the full life cycle impact of our
products at key stages of a new product design. This includes introducing procedures and expectations of product designers,
helping drive down the emissions of products.
Product stewardship and sustainable product design
In 2025, we onboarded a product stewardship team within our Technology & Innovation function. The team works closely with
colleagues in packaging, R&D and regulatory affairs. This team is responsible for promoting awareness and culture of sustainable
design thinking across the business by utilising raw material emission data and horizon scanning legislations to ensure longevity of
product design. Initial focus of the team has been the onboarding of new product LCA software, piloting a strategy to introduce
LCAs into our new product development processes.
During product design, we review proposed materials against certain externally compiled lists of ’substances of concern’, including
the requirements of California Proposition 65 and Reach. This approach is consolidated within our ethical issues and new product
design policy. We are prioritising key product development initiatives, while integrating sustainability in line with our net zero
carbon transition plan. Where feasible, we aim to reduce environmental emissions from of our products, guided by data obtained
through our digital product sustainability database.
Material challenges
Given the regulatory framework for MedTech products, changing device form or components is complex. This limits modifications
to products, packaging materials and design. Including recycled content in device materials is also challenging due to regulatory
constraints on quality and traceability. To address these challenges, we engage industry alliances and partners in our value chain to
develop solutions that support our net zero ambition. As our digital tools and resources continue to enable more accurate life cycle
assessments, we will identify further opportunities to reduce environmental impact.
Packaging
Data informed material and design changes
Primary packaging:
Primary packaging is an essential component of our products, forming a sterile barrier. In 2025, we continued
our efforts to remove PVC and reduce packaging weight by almost 80% on baseplates in our Ostomy Care portfolio, prioritising
certain markets and product families.
Secondary and tertiary packaging:
100% of our cartons and shipping boxes continue to be paper-based and recyclable. Following
success of our new packaging design standards used with our Esteem Body™ product line in 2025, we commenced trials to remove
plastic in packaging where feasible in future product launches.
Direct
operations
Site-specific decarbonisation planning
In 2025, we further embedded our energy management practices, implementing energy efficiency initiatives identified through
energy audits and utilising data to improve efficiencies of our energy-intensive equipment such as compressed air systems,
heating, cooling and ventilation systems and production machinery. See ‘Investing in decarbonisation’ figure (page 49) for further
information on priorities.
Logistics
Logistic planning and efficiency
Streamlining shipments:
In Latin America, shipments between some countries now bypass our distribution centre, eliminating
43 shipped containers in 2025. In 2025, we also introduced a tool to support decision-making and prioritisation for freight mode,
routing, damaged goods and consolidations. Accurate data is essential to identify impactful reduction opportunities, and
throughout the year we undertook a range of initiatives to improve the collection of primary data and improve calculations.
Transport space utilisation:
See case study on page 52.
End of life
End of product life management challenges
There are some key challenges in reducing emissions, including navigating a range of regulatory requirements, ensuring safe
disposal of hazardous materials and addressing contamination risks that limit recyclability. These challenges highlight the
importance of design for end of life (EOL) strategies, fostering innovative recycling solutions and collaborating with stakeholders
to develop scalable and sustainable EOL strategies. Although EOL emissions are not a significant part of our emission profile
(over which Convatec has limited control), we will continue to drive and monitor progress in these areas.
See page 59 for ways in which we are adapting and strengthening physical climate resilience
51
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Environment
Our manufacturing site in Haina,
Dominican Republic, achieved
Environmental management (ISO14001)
certification in 2025, with our sites in:
Rhymney and Deeside, UK; Michalovce,
Slovakia; and Reynosa, Mexico
maintaining their certified status. We
continue to make progress on our plan
to achieve Group certification by 2027.
See also our Environment policy at
www.convatecgroup.com/sustainability/
esg-reports-and-data and our TCFD
disclosure on page 54.
Scope 1 and 2 GHG emissions
Our 2025 GHG emissions under the
market-based method totalled 12,865
tonnes CO
2
e (2024: 13,823), equating to
an in-year reduction of 6.9% (2024:
14.4%). This reduction was achieved
through improved energy efficiency and
sourcing of renewable electricity at all
our global sites. An in-year rise in Scope 1
emissions resulted from increased usage
of diesel, due to use of our backup
generators during planned grid upgrade
works in Haina. In addition, the rise in
natural gas usage in 2025 was driven by
increased production and reduced
downtime of our co-generation unit in
Michalovce. Our fleet of 1,108 vehicles
(2024: 1,179) generated a total emissions
of 5,587 tonnes CO
2
e (2024: 5,832), and
our refrigerant gas emissions amounted
to 380 tonnes CO
2
e (2024: 136).
Energy consumption
In 2025, total global energy
consumption was 124,394,028 kWh
(2024: 127,114,380 kWh), of which
UK-specific energy consumption was
26,517,049 kWh (2024: 25,340,649 kWh).
Energy efficiency
In 2025, our overall energy intensity ratio
reduced by 8% (2024: 10%) through
implementation of our global energy
efficiency programme. We are
prioritising the reduction of our absolute
energy consumption as the key means
for reducing emissions. Our
manufacturing sites in: Deeside, UK;
Reynosa, Mexico; and Michalovce,
Slovakia achieved Energy management
(ISO 50001) certification in 2025. We
continue to make progress on our plan
to achieve Group certification by 2030.
Energy efficiency projects to reduce our
Scope 1 and 2 emissions in 2025
included: steam system improvements;
compressed air set-point optimisation,
energy efficient chiller installation, air
handling unit retrofits and optimisation,
on-site renewables and LED lighting.
GHG (market-based method) (tonnes CO
2
e)
1,2
2025
2024
2023
2022
2021
*Scope 1 (Global)
12,780
12,360
14,632
14,395
14,931
Scope 1 (UK)
2,835
2,702
2,867
3,202
3,107
*Scope 2 (Global)
85
1,463
1,510
10,258
21,255
Scope 2 (UK)
–
26
72
70
29
Total GHG emissions
12,865
13,823
16,142
24,653
36,186
Total UK
2,835
2,728
2,939
3,272
3,136
GHG (location-based method) (tonnes CO
2
e)
1,2
2025
2024
2023
2022
2021
*Scope 1 (Global)
12,780
12,360
14,632
14,395
14,931
Scope 1 (UK)
2,835
2,702
2,867
3,202
3,107
*Scope 2 (Global)
21,739
23,324
23,430
23,210
25,872
Scope 2 (UK)
2,066
2,155
2,403
2,200
2,348
Total (Global) GHG emissions
34,519
35,684
38,062
37,605
40,803
Total UK
4,901
4,857
5,270
5,402
5,455
Scope 1 and 2 GHG emission intensity (tonnes CO
2
e/$m revenue)
1,2
2025
2024
2023
2022
2021
*GHG emission intensity (location basis)
14.2
15.6
17.8
18.1
20.0
GHG emission intensity (location basis, UK)
2.0
2.1
2.5
2.6
2.7
*GHG emission intensity (market basis)
5.3
6.0
7.5
11.9
17.8
GHG emission intensity (market basis, UK)
1.2
1.2
1.4
1.6
1.5
Total energy consumption (by function) (MWh)
1,2
2025
2024
2023
2022
2021
Manufacturing locations
92,985
93,004
95,374
103,131
103,207
Non-manufacturing locations
7,566
8,647
9,969
9,770
10,736
Company vehicles
23,843
25,463
28,370
24,713
28,017
*Total energy consumption
124,394
127,114
133,713
137,615
141,961
Total UK energy consumption
26,517
25,341
25,922
25,856
25,339
Total energy consumption (by fuel source) (MWh)
1,2
2025
2024
2023
2022
2021
Non-renewable electricity
151
3,391
3,451
22,748
43,252
Renewable electricity
64,466
63,610
64,464
50,999
31,869
Natural gas
35,442
33,452
35,218
38,609
38,130
Propane
–
3
1
–
–
District heating
–
834
1,538
464
642
Diesel
492
361
671
82
51
Company vehicles
23,843
25,463
28,370
24,713
28,017
*Total energy consumption
124,394
127,114
133,713
137,615
141,961
1. Please refer to our Basis of reporting for
accounting methodologies (page 33).
2. In 2025, 1.5% of total Scope 1 and 2 (market-based)
emissions is estimated (2024: 3.5%).
*
Indicates assured metric
Expanding renewables
In 2025 we increased the annual renewable electricity
generation at our manufacturing site in Haina, by an
additional 916 MWh, through the installation of c.750
roof mounted solar panels to our AWC building. The
total self-generated energy from our buildings in Haina
is forecast to be 2,500 MWh in 2026, equating to 13% of
the total electricity used at this location.
52
Convatec Annual Report and Accounts 2025
Strategic report
Renewable energy
As part of our Scope 1 and 2 SBTs, we
have met and exceeded our target to
procure 80% of our electricity from
renewable sources by 2025, reaching
100% by 2030. As of 2025, renewable
electricity accounts for >99% of total
electricity consumed (2024: 95%).
During 2025, we generated 3,569 MWh
(2024: 2,313 MWh) from on-site
renewable energy sources. We continue
to develop project feasibilities within our
decarbonisation plan.
Information about the methodology we
use for disclosing renewable energy in
relation to our Scope 1 and 2 emissions
can be found in our Basis of reporting
document (page 33).
Scope 3 emissions
The provision of material specific carbon
emissions data, compiled in our digital
product sustainability tool, continues to
improve the accuracy of our Scope 3
emissions data. Our Scope 3 workstream
leads drive continuous improvement of
our data collection processes, supported
in 2025 by sustainability interns who also
developed feasibility studies for a range
of emissions reduction projects within
different Scope 3 categories.
Scope 3 data is provided in the table to
the right.
We continue to engage and support our
suppliers to ensure accuracy of
emissions data and track our suppliers’
decarbonisation efforts. During 2025,
we collected 10% of Scope 3 data from
primary sources (2024: 10%). These
numbers were collected through direct
engagement or use of third-party
platforms such as EcoVadis, which
we encourage our suppliers to use to
improve transparency and encourage
continuous improvement.
In 2025, our Scope 3 GHG emissions
totalled 282,431 tonnes CO
2
e (2024:
233,590 tonnes), a 6% absolute increase
from 2021. This was driven by emission
factor changes for raw materials,
packaging and road transportation
when using supplier-specific data,
and increased production and air freight
to meet demand. During 2026 we will
continue to deliver improvements in our
Scope 3 data controls and processes.
See our Basis of reporting (page 33)
for exclusions and details of our
reporting methodology. Our
environmental reporting follows
the methodologies set out in our Basis
of reporting, which follows ’The GHG
Protocol: A Corporate Accounting and
Reporting Standard (Revised Edition)’,
developed by the World Business Council
for Sustainable Development and the
World Resources Institute.
Energy intensity (MWh/$m revenue)
1,2
2025
2024
2023
2022
2021
*Energy intensity
51
56
62
66
70
1. 1.7% is estimated for 2025 data (2024: 2.1%).
2. See our Basis of reporting (page 33) for reporting methodology.
* Indicates assured metric
Scope 3 emissions (tonnes CO
2e)1
2025
2024
2023
2022
2021
Category 1: Purchased goods and services
142,718
113,190
119,537
119,473
142,591
Category 2: Capital goods
23,502
22,912
24,929
25,067
16,748
Category 3: Fuel and energy related activities
8,390
7,479
7,670
8,214
8,732
Category 4: Upstream transport and distribution
47,144
32,502
33,110
48,130
40,279
Category 5: Waste generated in operations
2,613
2,468
3,524
3,055
5,200
Category 6: Business travel
8,064
7,164
9,440
6,315
6,147
Category 7: Employee commuting
6,818
6,555
6,703
7,315
7,284
Category 12: End of life treatment of sold products
43,182
41,320
41,858
40,020
39,670
Total Scope 3 emissions
282,431
233,590
246,771
257,589
266,651
Total emissions (Scope 1, 2 and 3)
295,296
247,413
262,913
282,242
302,837
1.
We restated the emissions on business travel in 2024 due to an overstatement related to air travel.
Responsible business review
continued
Prioritising transport
efficiency
Throughout 2025, we implemented a successful
double-stacking strategy in our logistics operations and
developed an automated transport optimisation tool.
This helped us reduce 57 full truckloads and 16
containers in the US, and 71 full truckloads and 66
containers in Europe.
In addition, we implemented a single-use pallet porter,
which allows non-stackable pallets to be stacked, saving
23 containers. These initiatives prevented around 86,000
miles of road transportation.
53
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Waste
Throughout 2025, we advanced our
waste processes across all global sites,
leveraging our data to monitor key
waste-related metrics and implement
site-specific waste generation and
disposal improvements with waste
providers to improve circularity. This
year’s efforts included processing of
non-recyclable waste with an external
cement producer in Slovakia and a pilot
to recycle silicone release paper in
Deeside, UK.
Our manufacturing sites in Deeside
and Rhymney, UK achieved Zero Waste
to Landfill certification, through the
Intertek verification programme. Both
sites achieved a diversion rate of over
99%, meeting the required rate to
achieve the standard. In addition, our
manufacturing site in Michalovce,
Slovakia successfully certified as
‘Advanced Waste Diversion’, with a
diversion rate of between 85% and 95%.
This is a significant milestone for the
business and work continues at our
remaining sites with an overall ambition
of achieving the certification globally
by 2030.
Water
During 2025, we continued our high-level
review of all our manufacturing facilities
using the World Resources Institute
Aqueduct and Ecolab Smart Water
Navigator, based on our 2024 operational
data. This allows us to track progress and
understand risks to our operations. Our
manufacturing site in Reynosa, Mexico,
remains the only site with high baseline
water stress and consequently a medium
water withdrawal risk and we are
continuing our progression towards
becoming water stewards.
Whilst water use at our Haina, Dominican
Republic site is considered sustainable
in the high-level review, the Aqueduct
analysis indicates potential water risks.
A water stewardship plan has been
prepared at site level, to identify water
efficiency projects and achieve water
stewardship certification. We have
gathered data on specific water risks and
opportunities, completed a facility-level
assessment to identify opportunities to
reduce our clean water demands and
improve water efficiency (including
rainwater harvesting) and conducted
a survey to identify catchment-level
challenges (both surface water and
groundwater) and key stakeholders.
In 2025, we withdrew approximately
162 megalitres of water (2024: 163
megalitres), all of which was provided by
municipal water suppliers or other public
or private water utilities. No water is
abstracted directly from lakes, rivers or
other bodies of water. Data is compiled
from invoiced amounts and meter
readings. In 2026, our focus will remain
on achieving our sustainable water
usage targets and becoming positive
water stewards at each of our plants.
We will continue to monitor water risks
at our facilities, and we are committed
to achieve Alliance for water stewardship
certification at our priority sites by 2027.
6,109 tonnes of water (2024: 5,781
tonnes) were tankered offsite as
hazardous waste, primarily from our
Rhymney site in the UK, where water
becomes contaminated with Industrial
Denatured Alcohol (IDA) during
production and is segregated for
further processing. After processing,
a significant proportion of the IDA is
recovered and reused at the site. The
remaining treated water is returned
to the environment via a sewer as part
of a permitted discharge. Other
uncontaminated wastewater is
discharged via a sewer. Data on our
water use is found in the following table.
Water use
2025
2024
2023
2022
2021
Megalitres purchased
162
163
153
169
176
Waste generated (tonnes)
2025
2024
2023
2022
2021
Non-hazardous waste
Disposed of
5,177
6,962
8,499
9,655
13,599
Recycled
2,358
1,750
2,779
3,425
2,990
Generated
7,535
8,712
11,278
13,080
16,589
Hazardous waste
Disposed of
66
73
98
69
82
Recycled
6,156
5,855
6,073
5,789
5,606
Generated
6,222
5,928
6,171
5,858
5,688
Total generated
13,757
14,640
17,449
18,938
22,277
Fate of non-hazardous waste generated (%)
2025
2024
2023
2022
2021
Recycled
32%
20%
25%
26%
18%
Incineration (with energy recovery)
21%
27%
18%
27%
16%
Incineration (without energy recovery)
0%
1%
1%
0%
0%
Landfill
47%
52%
56%
47%
66%
Recycling continues to be the
predominant disposal route across our
sites, driven significantly by liquid waste
recycling at our manufacturing site in
Rhymney, UK, which constitutes our
largest waste stream at 44% of total
waste generated (2024: 39%). However,
landfill ranks as the second-largest
disposal route at 26% of total waste
generated (2024: 31%). This motivates
our targeted efforts at our
manufacturing sites in Haina, Dominican
Republic, and Reynosa, Mexico. General
waste is one of our largest waste streams
and its treatment is country-specific,
with 0.02% recycled, 33% sent for energy
recovery and 67% either incinerated
without energy recovery or sent to
landfill. We have active projects currently
underway to optimise source-
segregation, maximise recyclability and
find the most sustainable disposal routes
for all remaining residual waste. In 2025,
hazardous waste made up 45% of total
waste generated (2024: 40%). 99% of this
was recycled.
We continue to actively share best
practice across our operations globally,
facilitating implementation of initiatives
and further minimising our
environmental impact.
54
Convatec Annual Report and Accounts 2025
Strategic report
TCFD disclosure
Statement of compliance
Convatec is committed to compliance with the Task Force on Climate-related Financial Disclosures (TCFD) to effectively integrate
climate considerations into our business. Our disclosure is compliant with the UK Government’s Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022 and the FCA Listing Rule UKLR 6.6.6(8) on climate-related financial
disclosure. The table below summarises how we comply with TCFD.
With anticipated further changes in climate-related disclosures in the UK, Convatec continues to monitor relevant requirements
to ensure ongoing compliance.
Recommendations
Relevant information
Status
Page ref.
Governance
a) Board oversight
–
Responsibility for the identification and management of climate-related
matters
–
Frequency of engagements on climate-related matters
Comply
Page 55
b) Management’s role
–
How climate is integrated across business processes and frameworks
Comply
Page 55
Strategy
a)
Climate-related risks and
opportunities
–
Description of time horizons used in the analysis
–
Climate risks and opportunities identified
Comply
Page 56
b)
The impact of climate-related
risks and opportunities
–
Climate scenario analysis, including qualitative and quantitative impact
assessment results and the management response measures
–
Climate integration in financial planning processes and climate
transition plan on alignment to net zero
Comply
Page 56
Please see
page 50 for
climate
transition
plan
alignment
c) The resilience of the
organisation’s strategy
–
Description of climate scenarios used
–
Conclusion on climate resilience under different scenarios
Comply
Page 57
Risk management
a)
Describe the organisation’s
processes for identifying and
assessing climate-related risks
–
Process and methodology to identify and assess climate risks and
opportunities
Comply
Page 63
b) Managing climate-related risks
–
Process to identify and select risk controls
Comply
Page 64
c) Integration into
overall risk management
–
Overview of climate integration in Convatec enterprise risk
management framework
Comply
Page 64
Metrics and targets
a) Climate metrics
–
Overview of climate metrics and targets used to monitor performance
–
Climate metrics used to monitor risk and opportunity exposure
Comply
Page 65
b) GHG emissions
–
Scope 1, 2 and 3 greenhouse gas (GHG) emissions reported in
responsible business section
Comply
Page 65
c) Climate targets
–
Climate commitments to align with the low-carbon transition and to
reduce our exposure
Comply
Page 65
Summary of how we comply with the TCFD recommendations
Task Force on Climate-related
Financial Disclosures
55
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Introduction
This TCFD disclosure reflects our understanding of climate impacts and how to manage these through our core business processes.
In this disclosure, we share the results of an updated climate scenario analysis and the output of work we have undertaken
reviewing value chain and care category specific risks and opportunity considerations. This diagram shows how we continue to
progress our climate-related financial disclosure work with the ultimate aim of enhancing Convatec’s climate resilience:
Governance
Board oversight
The Board and management’s
responsibilities for climate-related issues
are described on page 33. The CEO has
overall responsibility for climate-related
matters, whilst the Board has strategic
oversight of Convatec’s climate ambition
and transition plan (see page 50).
Environment, social and governance
(ESG), including climate-related matters,
is an agenda item across Board and
management committees on a regular
basis. The Board also has a responsibility
of reviewing ESG target progress
through updates from the ESG Steering
Committee annually. For further details
on the frequency of Board meetings see
page 78.
The Board is supported by the following
governance bodies with assigned roles
relating to the identification, assessment,
management and disclosure of climate-
related risks and opportunities:
–
Audit and Risk Committee (ARC):
The ARC is responsible for ensuring
compliance with all relevant
regulations and laws, including TCFD,
and monitoring programmes to
achieve compliance. It is also
responsible for reviewing and
approving Convatec’s management of
all risks, including any material
climate-related risks. Risk controls are
identified by affected business units,
with the support of the Risk team. In a
bottom-up approach, risk owners
within each business unit are identified
and assigned responsibility for
identifying appropriate controls,
monitoring risk exposure and
providing two of four quarterly
updates. In addition, some controls
are defined as top-down as climate
change is managed under the principal
risk ‘Environment and Communities’.
–
Remuneration Committee:
Responsible for setting and monitoring
variable compensation performance
metrics for Convatec Executive
Leadership Team (CELT) members,
which include performance against ESG
metrics. The Remuneration Committee
has a close relationship with reviewing
ESG disclosures.
Management oversight
Responsibility for assessing and managing
the business response to climate-related
risks and opportunities, is achieved
through the teams and functions described
under ‘ESG governance’ on page 33 and
set out below.
–
CELT:
CELT has delegated
responsibility from the Board to set
the direction of Convatec’s strategy,
ensure climate-related issues have
appropriate management in place and
cascade this through the organisation.
–
CELT ESG Steering Committee:
Oversees and monitors ESG ambition,
commitments and progress, including
climate strategic ambition, transition
plan, and overall implementation of
Convatec’ strategy and ESG practices,
aligned to strategic planning process.
–
Environment, Health & Safety team:
Responsible for resource efficiency
and disclosing energy and GHG
emissions performance, including
development of climate transition
plans which help manage identified
climate-related risks and opportunities.
–
Internal Audit & Enterprise Risk
team:
Oversees the climate-related
financial disclosure and how this
integrates with financial statements
and risk management processes.
2022 ARA
Our first TCFD disclosure with qualitative climate scenario analysis and quantified physical hazard value at risk. Integration of
results into our financial statements
2023 ARA
Our second disclosure updated the climate scenario analysis with quantified financial impacts for both transition and physical
impacts. Integration with our Transition Plan Taskforce (TPT) aligned climate transition plan
2024 ARA
Our third disclosure sought to provide a more concise disclosure by consolidating qualitative and quantitative assessment,
connecting this with our strategic ambition and demonstrating incorporation into our strategic planning. Physical hazard
assessment was updated
2025 ARA
In this TCFD disclosure we have updated revenue and asset value inputs into the physical hazard assessment, simplified our
climate scenario analysis results disclosure and have begun to examine value chain and business model implications
56
Convatec Annual Report and Accounts 2025
Strategic report
Strategy
Ongoing development of our climate scenario analysis
Our climate scenario analysis approach is reviewed annually and refreshed at least every three years as part of our ongoing risk
monitoring process. Overtime, we have further integrated the analysis into key business processes, including risk management,
capital allocation, performance reporting and strategy planning.
Our climate scenario analysis approach
We assess identified climate-related risks and opportunities
across a range of forward-looking climate scenarios to account
for future uncertainty in regional mitigation and the physical
impacts of climate change.
The scope of climate scenario analysis includes both transition
and physical impacts across three climate scenario pathways
and includes both qualitative and quantitative assessment of
potential financial impact.
Our analysis draws upon multiple scenario sources that align
with three broad scenario pathways, including Ambitious
Policy, Middle of the Road and High Warming. By grouping
different climate scenario sources into climate scenario
reference ‘families’ it encompass a broad range of possible
outcomes and enables the scenario analysis to draw on a range
of climate scenario data sources that help describe how future
climate-related outcomes could impact the business.
In the risk and opportunity matrices (pages 58 to 59), we
present the most significant risks and opportunities identified
and the relative significance of the potential impact over the
short to long term across three climate scenarios.
Our climate-related risks and opportunities and climate
scenario analysis results
To better understand how risks and opportunities relate to
broad market and climate drivers, all risks and opportunities
have been categorised under the four following themes:
–
Supply chain and sustainable design:
includes risks and
opportunities related to material availability and price
–
Direct operations and processes:
includes risks and
opportunities related to our manufacturing and day-to-
day operations
–
Stakeholder expectations:
includes risks and opportunities
related to corporate regulation as well as shifting
requirements from suppliers, customers, investors and
other stakeholder groups
–
Physical damage and disruption:
includes risks and
opportunities related to changing weather conditions
over time
We have assessed risks and opportunities across all scenarios
and time horizons. For disclosure purposes, we have presented
assessment results for the ‘greatest impact case’, where each
unmitigated risk or opportunity is rated against the scenario
with the greatest potential impact, i.e. High Warming scenario
scores are shown for physical risks and more aggressive
climate mitigation scenarios are shown for transition risks
or opportunities.
TCFD disclosure
continued
2023
Quantified financial impact
and development
of transition planning
2024
Updated risk modelling
across key sites and
transition risk
2025
Continued monitoring
and strengthening
of integration
2022
Risk and opportunities
identification and
qualitative assessment
Engaged
with business
functions,
including senior
leadership, to
raise awareness
of how climate
change may
impact
operations and
to identify
whether climate
risks and
opportunities
are already
being managed.
Conducted
qualitative
climate scenario
analysis
to
systematically
assess all risks and
opportunities.
Quantified the
potential
financial impact
of the physical
risks of selected
critical sites within
our value chain.
Conducted further
research and,
where possible,
quantified the
financial impact
for selected
transition risks
.
Completed
updated
financial
analysis
on
physical and
transitional
risks to
reflect
Convatec’s
updated
business and
emissions
data.
Applied a
business unit
and value-
chain
lens to
existing risks
and
opportunities
to better
understand
value at risk.
Disclosed an
updated
Transition Plan
highlighting our
decarbonisation
progress and our
strategic
ambition
objectives to
better reflect our
business efforts.
Continued
efforts to
identify
longer-term
actions
required
to meet net zero
commitments
and iterate
Transition Plan
accordingly.
Contextualised
identified risks and
opportunities
based
on our business
operations and
market landscape to
better understand
the cause and
consequence.
Conducted
climate
scenario analysis
on
all key Convatec
manufacturing sites,
and for an expanded
set of variables.
Integrated results
of physical risk
analysis into
impairment
testing, as well as
in business
continuity and risk
management
plans. Incorporated
priority transition
risks and
opportunities into
the strategic
planning process.
Refreshed
physical climate
scenario
analysis with
updated
financial
inputs.
Developed the first
Transition Plan
using the outcomes
of the identification
and assessment to
inform decision-
making on
strategic priorities
and actions
required to align
with the low-
carbon transition.
Ensured a robust
and integrated
approach was
taken to identify
and assess climate
risks and
opportunities
under the
Environment and
Communities
principal risk.
Refreshed
climate scenario
analysis
periodically.
57
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Our climate scenario selection
Ambitious Policy scenario
Middle-of-the-Road scenario
High Warming scenario
Scenario
narrative
Assumes early introduction of climate
policy to achieve a 1.5°C aligned
scenario, where global CO
2
emissions
are cut severely, with ambitious and
gradual efforts to limit temperature
rise.
Delayed and/or divergent policies
across countries and sectors resulting
in subsequent higher transition risks
from sudden ambitious policy
intervention. Emissions remain
stagnant in the near term with notable
shifts occurring between 2030 and
2050.
Global efforts are insufficient to halt
significant global warming. Limited and
divergent action, with society
continuing along past trends and
emissions increasing significantly,
resulting in extreme warming.
Temperature
range outcomes
by 2100
1.3°C–2.4°C
2.1°C–3.5°C
3.3°C–5.7°C
Sets of climate
scenario sources
used in
assessment
NGFS Orderly transition
REMIND-MAgPie Net Zero scenario
IEA Net Zero scenario (2024 World
Energy Outlook)
IPPC’s SSP1-2.6
NGFS Disorderly transition
REMIND-MAgPie Delayed Action
scenario
IEA Announced Pledges scenario (2024
World Energy Outlook)
IPPC’s SSP2-4.5
NGFS Hot House World
REMIND-MAgPie Current Policy
scenario
IEA Stated Policies scenario (2024 World
Energy Outlook)
IPPC’s SSP5 8.5
Convatec
scenario
selection
rationale
Analysis of a 1.5°C scenario is key to
understanding our business’s
compatibility with the commitments of
the Paris Agreement. In addition, it
allows us to consider how growing
regulatory pressure on energy systems
may impact our operations and supply
chains and generate or exacerbate
transition risks and opportunities.
Analysis of a ‘middle-of-the-road’
scenario is useful for having a view that
is consistent with the pace of current
climate regulation but anticipates that
this may accelerate as we reach a point
of inevitable policy response which
could be disordered and aggressive due
to the delayed nature. As temperatures
are warmer, this scenario indicates the
potential blend between significant
physical and transition risks.
Analysis of a high warming scenario
provides us with a view on the upper
range of physical risk that might be
expected should climate action
deteriorate or if the climate system is
more sensitive to GHG concentrations
than expected by current models.
Example scenario indicators (NGFS)
Shadow
carbon
prices
Carbon prices nearly double by 2040 to
achieve net zero by 2050 (NGFS Orderly).
Higher prices for a given temperature
outcome and jumping significantly in
2030s.
Lower carbon prices and absence of
other key financial incentives to reduce
emissions. Cost of regulatory
compliance is relatively low.
Energy
price
Global renewable energy supply
increases significantly driving down
energy price for fossil fuels. Investment
in hydrogen high in 2030s.
Volatile energy prices and reliability
issues in attempt to accommodate
increased renewable and electricity
loads.
High energy prices as global energy
demand grows significantly due to lack
of energy efficiency investment and
fossil fuel investment outweighs
low-carbon energy investment.
Technology
change
Moderate to fast. Advanced recycling
methods and new mining technologies
key in 2030s.
Slow and fast change. 2020
underinvestment followed by rapid
renewable generation in 2040.
Slow change and limited technology
transfer in middle- to low-income
countries (e.g. drought-resistant crops,
early warning systems etc.). Hard-to-
abate sectors such as steel and cement
remain carbon intensive.
Policy
reaction
Immediate and smooth with medium to
low regional variation. Legally
mandated emission reduction targets
and carbon budgets set.
Delayed with high regional variation
followed by climate emergency
response with forceful action to reduce
emissions with high compliance costs.
Current stated policies with low
regional variation. Adaptation over
mitigation with most investment in
high-income countries.
Physical
risk
Some climate impacts still felt due to
past emissions, with almost doubling of
heatwaves in Africa and Asia and
hurricanes in the US.
Physical impacts become more
frequent and severe in near to
mid-term. By 2040 temperatures level
off and extreme weather events
stabilise.
Severe physical risk including
irreversible impacts (e.g. disruptions to
global supply chains, reductions in
labour productivity in heat stressed
regions, assets at high risk become
uninsurable) resulting in growing GDP
loss and increased cost of goods.
The results table presented on pages
58 and 59 includes both qualitative and
quantitative financial impact assessment
outcomes. For each risk theme, we show
individual risks and opportunities, along
with total score for likelihood and
magnitude for risks, and ability to
execute and the size for opportunities.
Identified climate-related risks have
been assessed qualitatively against the
likelihood of occurrence, magnitude of
impact and vulnerability. Climate
opportunities have been scored based
on the potential size of opportunity
through avoided costs, increased
revenue and the ability to realise the
opportunity. Each risk and opportunity
has been scored across the three
scenarios and three time horizons.
The methodology of the qualitative
and quantitative assessment is outlined
on pages 62 and 63 of Convatec’s 2024
Annual Report and Accounts. Detailed
scores for each time horizon and
scenario are presented on pages 65
to 67 of Convatec’s 2024 Annual Report
and Accounts. To date, the quantitative
financial impact assessment has included
the impact of physical risks across all
key manufacturing assets, as well as
the potential costs associated with the
low-carbon transition on our material
procurement and site operations.
58
Convatec Annual Report and Accounts 2025
Strategic report
TCFD disclosure
continued
Supply chain and sustainable design
Climate scenario:
Ambitious Policy
Timeframe:
Medium and long term
The largest proportion of emissions in our value chain is derived
from the materials Convatec uses, the majority of which come from
petrochemicals. Exploring the feasibility of sustainable design
options across our product portfolios and packaging, focusing on
new product development, is an essential activity required to
reduce the embodied GHG emissions and manage transition risks
associated with a change in material availability and price.
Suppliers face increased costs during the transition to a low-
carbon economy which increases procurement costs. This could
impact profit margins or result in a loss of sales if products are not
priced competitively.
Increased competition for sustainable materials, as well as lack of
these alternatives, in addition to decline of petrochemical-based
materials, could result in material shortages. This may disrupt
production and increase investment in R&D, as well as increase costs
to meet regulatory compliance for any product design changes.
Risk
P4
T2
M1
M3
M4
Likelihood
Magnitude/impact
Ability to execute
Size of opportunity
PM1
Opportunity
P4: Material regulation
Increase in regulation
on raw materials
M1: Higher supplier costs
Increase in price for
purchased goods
and services
T2: Product efficacy
Restriction to alternative
materials due to efficacy
priorities
M4: Alternative material
availability
Higher costs to
procure sustainable
materials
M3: Petrochemical
reliance
Increased
competition to buy oil and
gas by-products
PM1: Supply
diversification
Development of sustainable
products
Management and resilience response
We developed a supplier engagement strategy to increase
suppliers with green credentials and improve our use of
sustainable materials. Our suppliers are encouraged to set
emissions reduction targets and provide their annual emissions to
Convatec, supporting improvements in our Scope 3 footprint and
promoting positive action through our suppliers.
We are continuing the integration of the Green Design Guidelines
and digital sustainability database, which calculates emissions
from materials used in Convatec’s product library and packaging,
helping reduce our product emissions and environmental impact.
We also collaborate across the industry and lobby governments to
drive innovation and identify sustainable solutions which support
sector decarbonisation while meeting patient needs.
Financial impact
The potential cost increase from raw material suppliers passing on
carbon-related costs is estimated at $40m-$55m (net present value
2025 to 2050), assuming delivery of our net zero decarbonisation
plan. Refer to page 63 of Convatec’s 2024 Annual Report and
Accounts for calculation methodology.
This climate-adjusted view of future cash flows reflects hypothetical
absolute costs which could impact the cost of our operations in the
future. To understand the potential downside, we have assumed a
‘worst-case’ and less likely scenario where our major operations (all
manufacturing assets and material suppliers) are subjected to carbon
pricing as a proxy to transition costs.
Carbon price projections informed the range of policy ambition
assumptions, with carbon tax impacts starting in 2030 for raw materials,
given uncertainty around supplier exposure and cost pass-through.
Direct operations and processes
Climate scenario:
High Warming
Timeframe:
Short, medium and long term
In transitioning to a low-carbon economy, Convatec will be
affected by global and national policy interventions which will
increase the cost of emitting carbon. While Convatec is not
currently subject to global carbon pricing mechanisms, it may
face a change in the cost of energy as well as restrictions on
energy-intensive processes such as sterilisation.
Operational costs could rise due to renewable energy
procurement, energy price fluctuations driven by carbon
pricing and significant upfront investments in decarbonisation
initiatives. During the energy transition, uncertainty around
renewable energy supply’s ability to meet growing demand
may lead to reduced availability or price volatility.
However, Convatec is dedicated to reaching its emissions targets
by reducing its emissions across its manufacturing portfolio.
Implementing efficiency measures will help combat potential
carbon pricing costs, although upfront investment is required.
In the short term, energy price volatility, carbon taxes,
regulation and the shift to renewables are expected to drive the
greatest impacts. Over time, costs ease under ambitious
transition scenarios but rise under higher warming scenarios,
increasing operating expenditure through higher energy costs,
decarbonisation investment, and renewable supply constraints.
RE1
RE3
RE2
P2
M5
T1
M2
P3
Risk
Likelihood
Magnitude/impact
Opportunity
Ability to execute
Size of opportunity
M5: Renewable energy
Limited availability of
renewable energy
P3: Manufacturing
regulation
Increase in
regulations that affect our
processes
T1: Climate investment
Cost to invest in climate
mitigation and adaptation
P2: Carbon tax
Increased
pricing of GHG emissions
applied to direct operations
M2: Energy costs
Change
and volatility in energy price
RE2: Self-generation
Investment in on-site
generation or Power
Purchase Agreement
RE1: Energy efficiency
Implementing projects in
offices and manufacturing
plants
RE3: Heat decarbonisation
Reduce reliance on fossil fuels
Management and resilience response
We have decarbonised a selection of our sites through improved
efficiency and renewable electricity procurement. See page 52 for
additional information on our renewable energy status.
Improved energy efficiency and moving from natural gas to
lower-carbon or renewable energy sources for heating will reduce
Convatec’s exposure to future increases in the cost of consumption
of fossil fuels and volatility of electricity prices.
Financial impact
Changes to energy prices, renewable energy procurement and
potential introduction of carbon pricing mechanisms is not
expected to have a negative impact on our operational costs. This
is due to our planned decarbonisation which minimises potential
costs from carbon taxation mechanisms, whilst our procurement
of low-carbon and renewable energy minimises the potential risk
of higher prices from fossil fuels and impacts of volatility.
We are aware our decarbonisation plan requires upfront capital
expenditure, and there could be some financial impacts from
energy costs due to volatility and uncertainty during the energy
transition. As such, we are committed to continual risk monitoring.
59
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Stakeholder expectations
Climate scenario:
Ambitious Policy
Timeframe:
Short, medium and long term
Convatec recognises that managing climate-related risks and
opportunities is essential for delivering long-term value and
building climate resilience. Stakeholder expectations on
transparency, ambition level and performance against ESG and
climate matters are evolving rapidly.
Stakeholder (including investor and customer) requests for
climate information are rising, with high expectations on
ambition, transparency of disclosure, and management of risks
and opportunities. For example, the NHS has laid out a supplier
roadmap to net zero, which sets out requirements to 2030, such
as reporting progress against net zero and enhancing product-
specific data.
As stakeholder expectations for ESG increase across all time
horizons, expectations for supplier resilience, regulatory
compliance, investor transparency, and customer engagement
are also expected to rise consistently across all scenarios and
time horizons.
OR1
OR2
OR3
P1
R1
R2
Risk
Likelihood
Magnitude/impact
Opportunity
Ability to execute
Size of opportunity
P1: Regulation compliance
Increase in compliance
costs and climate-litigation
risk
R1: Investor transparency
Increased concern and
scrutiny of climate
credentials
R2: Customer requests
For greater climate ambition
and transparency
OR3: Industry
collaboration
Collaborating with the
industry and lobbying of
governments
OR1: Supplier resilience
Increase resilience in the
supply chain
OR2: Using climate data
To manage climate risk and
seize opportunities
Management and resilience response
We are undertaking frequent reviews of investor priorities through
consistent engagement to ensure Convatec meets expectations.
This has involved reviewing performance and reporting on
progress against environmental targets using ESG rating indices
to indicate evolving investor expectations on climate performance.
Convatec is continuing its investment, use and roll-out of data
management tools and software, e.g. increasing supplier
engagement through EcoVadis and utilising our automated
transport optimisation tool to monitor and reduce distribution
costs and increase logistical efficiency, ensuring progress is made.
Financial impact
There is an increasing volume of legislation and reporting
requirements which require appropriate resources to respond to
and manage increasing stakeholder scrutiny. This could result in
reduced access to capital or increased cost of capital if investors
switch to better climate-performing stocks.
Physical damage and disruption
Climate scenario:
High Warming
Timeframe:
Short, medium and long term
Gradual changes in the physical climate and more frequent
extreme weather events will impact global value chains. While
Convatec is aware of the physical climate hazards most
prevalent across our manufacturing sites and can implement
adaptation and control measures to reduce the risk, Convatec
has less influence over how suppliers manage climate risk.
Increased costs to manage damage and disruption at
manufacturing sites and relocation of operations could result in
reduced product production, loss of sales and an increase in
insurance premiums. The impact of physical climate risks is
expected to intensify across all time horizons. This is driven by
increasing exposure to manufacturing site damage,
productivity losses, supplier and transport disruption, and
water constraints.
RE4
Ph2
Ph3
Ph1
Risk
Likelihood
Magnitude/impact
Opportunity
Ability to execute
Size of opportunity
Ph1: Damage and
productivity loss
Increase
in repair costs and loss of
productivity
Ph2: Supplier disruption
Delays in receiving goods or
unfilled orders from
suppliers
Ph3: Transport disruption
Disruption in both
upstream and downstream
transport
RE4: Water efficiency
Improve water efficiency of
operations
Management and resilience response
Convatec has site-specific dependency flows and business
contingency plans for each manufacturing and distribution location.
We also have premium insurance coverage at our high-risk sites to
cover major climatic events. Infrastructure investment is being
made to mitigate potential climate-related business disruption,
these include:
–
Backup generators at our plant in Mexico to address power
disruption due to extreme cold weather
–
Additional drainage measures at our plant in Deeside, UK,
to address flood risk
–
New sprinkler systems installed in 2025 in our plants in the
Dominican Republic, Slovakia and Denmark
We have implemented water efficiency measures, including
redesign of domestic facilities using water efficient appliances and
initiatives, and implemented actions to recover water used in fire
tests. This will mitigate the potential impact of degrading water
quality and availability. See page 53 for more information.
Financial impact
The potential additional financial cost for repairs, maintenance
and loss of revenue from decreased productivity is estimated at
$80m–$180m across climate scenarios. This represents the
unmitigated net present value for 2025 to 2050.
Actual impacts
In the current year, we experienced the closure of our plant in
Haina, Dominican Republic, due to a severe tropical storm, and in
previous years, a power disruption due to extreme cold weather
closed our plant in Reynosa, Mexico. In both examples, our business
continuity plans were implemented to carefully manage any impact
on our business and the financial impact was negligible.
60
Convatec Annual Report and Accounts 2025
Strategic report
TCFD disclosure
continued
Significance of climate perils to our manufacturing sites
Financial risk analysis
Using ClimSystems’ Climate Insights data, we have assessed our value at risk across a range of climate perils. This provides an initial
view on the potential scale of unmitigated financial risk related to damage and repairs as well as productivity losses. This view
allows us to see what climate perils our manufacturing portfolio is most financially exposed to, as well as which sites represent the
greatest contribution to the unmitigated risk. This shows that our three largest manufacturing sites represent much of the financial
risk (89%) and our operations are most susceptible to heat stress and flooding.
We assessed potential increase in losses over time against a 2025 baseline and presented results as the net present value of
cumulative cash flow impacts for 2025 to 2050, discounted at the Convatec WACC. Results are shown at the 50th percentile as the
‘best guess’ on potential impact under each scenario. To provide a ‘worst-case’ view for the purpose of ensuring appropriate risk
controls we have not accounted for physical risk mitigation or adaptation measures that reduce our exposure.
Updated climate variable data has increased in the unmitigated potential financial risk due to enhancements to data models and
methodologies used. Whilst the financial values have increased, these figures are only indicative and our overall assessment
outcomes in terms of site exposure to climate variables and the extent of this has not changed.
Flood
Heat stress
Storms
Precipitation
Wildfire
Deeside
of total
financial risk
9%
Haina
of total
financial risk
63%
Reynosa
of total
financial risk
17%
Memphis
of total
financial risk
4%
Michalove
of total
financial risk
6%
Osted
of total
financial risk
1%
Rhymney
of total
financial risk
0%
1% 1%
2%
5%
91%
61
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Consideration of climate impacts across the value chain and business units
Convatec has undertaken preliminary analysis into the revenue dependency of key material input categories to understand
climate-driven vulnerabilities in supply and availability and to better understand the impacts of climate risks and opportunities on
our upstream value chain. We have applied a business unit lens to understand potential strategic implications. A heatmap of these
material inputs and a description of the relevant climate implications for Convatec is displayed below:
Product materials
Breakdown of business unit contributions
to enabled revenue by purchased material
Climate implications
Business unit
Advanced
Wound
Care
Continence
Care & HSG
Ostomy
Care
Infusion
Care
Increasing revenue dependency
Plastics
8%
24%
27%
40%
Plastics are tightly linked to petrochemical feedstocks as well as oil and gas energy
prices. As such, they could face growing policy constraints and circularity
expectations. Our business seeks to anticipate and/or adapt to changes in policy
which could impact materials and so we continue to explore proven greener
alternatives to single-use plastics within the constraints of adhering to product
safety and medical safeguards.
Packaging
34%
18%
24%
25%
Packaging is typically short-lived and the largest single source of plastic waste
globally. As such it is highly regulated and sensitive to policy and market shifts.
As an essential component of our products, forming a sterile barrier and providing
product protection, we continually review our packaging roadmap to enhance
packaging recycling and promote circularity.
Chemicals
51%
22%
26%
2%
Convatec’s core chemicals and polymers are petrochemical-derived (e.g. polymers,
adhesives and surfactants) or mined/processed (e.g. silver and barium sulphate),
and thus contribute to Scope 3 Purchased Goods & Services emissions, procurement
risks and redesign costs. This means there is exposure to potential cost pass-
through from carbon pricing on petrochemicals, contract eligibility and win rate
implications from product carbon and procurement scoring, and price volatility
and ESG screening risks from energy-intensive mined inputs such as ionic silver for
antimicrobial activity. In 2025, Convatec published its Carbon Reduction Plan in
connection with the supply of medical devices to customers in the UK which includes
exploring design and material alternatives to reduce climate impact and working
closely with suppliers to achieve science-based carbon reduction targets.
Contact
sterilisation
35%
11%
21%
32%
Convatec sterilises a range of heat- and moisture-sensitive devices using Ethylene oxide
(EtO) gas sterilisation via contract sterilisation partners. EtO is the industry’s most
versatile low-temperature modality. Sterilisation is a small contributor to total life cycle
emissions but is operationally critical and is accounted for in the product-level emissions.
As we work to improve our understanding of where risks and opportunities are located across the value chain and geographically, as well
as their business unit and product specificity, we can further refine and enhance our climate risk mitigation and resilience measures.
This year, Convatec undertook a comprehensive mapping of climate-related risks and opportunities across our value chain and business
categories to gain a deeper understanding of our exposure and inform strategic decision making (see table below). This work strengthens our
ability to build resilience, align with TCFD recommendations and support our long-term sustainability objectives. Climate considerations are
embedded into our Group strategic planning cycle, and this mapping enables us to identify areas of our business model most impacted by
climate change and identify appropriate mitigation measures to ensure our strategy remains robust in addressing potential future challenges.
Risk and
opportunity
theme
Description of value chain impact
Supply chain and
sustainable
design
Upstream:
Supply chain and sustainable design climate-related risks and opportunities are concentrated upstream in the
value chain and are driven by raw material inputs, supplier practices and material availability. We expect impacts to vary
across products accordingly and have undertaken a preliminary screening of our purchased material inputs to form an
initial understanding of exposure by business category. This insight helps us to understand where operational teams may
need to adapt product design, manufacturing or material profiles.
Direct operations:
Material selection and design requirements are shaped by the upstream value chain and directly
influence R&D processes within our operations. By integrating these insights, we drive innovation that prioritises
sustainable materials and responsible manufacturing practices.
Direct operations
and processes
Direct operations:
Our operational energy use and energy procurement decisions influence the carbon profile of our
products and exposure to carbon and energy pricing regimes. Business categories with larger production footprints are
more exposed and ongoing monitoring and analysis of site-level energy consumption and GHG emissions supports the
prioritisation of operational resilience and decarbonisation measures.
Stakeholder
expectations
Upstream:
We are working on the opportunity to strengthen supplier resilience and underscore the need to enhance
visibility into supplier practices to support more robust, climate-aligned sourcing.
Direct operations:
Expectations from regulators, investors and employees most directly affect our operations, driving the
need for clearer governance, emissions tracking and disclosures.
Downstream:
Rising customer and consumer expectations for evidence of sustainable product performance and
climate-aligned business models demonstrates relevance across Convatec’s downstream value chain.
Physical damage
and disruption
Upstream:
Physical damage and disruption could impact all value chain segments. Supplier regions, facilities and
distribution routes that may be more exposed to physical damage and disruption.
Direct operations:
Physical risks could also impact our direct and downstream operations as our manufacturing plants
are global and therefore can be impacted by various climate hazards and events. While we have conducted detailed
analysis on the potential impacts on our manufacturing sites, further analysis may highlight the need to collate data on
supply chain partner facility exposure to further assess vulnerabilities and inform future adaptation planning and
infrastructure resilience.
Downstream operations:
The potential damage to delivery facilities and destinations may impact delivery and markets
for our customers that require our products and care.
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TCFD disclosure
continued
Our approach to climate resilience
Resilience assessment
The climate scenario analysis outcomes
inform the assessment of both
unmitigated and mitigated potential
climate financial impact, which collectively
provide a view on our overall climate
resilience now and in the future. Our
initiatives to maximise our resilience to
climate through our decarbonisation
plan, product design innovation, business
continuity plans and dedicated adaptation
capex budgets are highlighted on page 50.
The Group’s approach to climate risk
identification and assessment is
informed by climate scenarios,
regulatory developments, peer
disclosures and internal engagement
across business functions.
Climate-related impacts are assessed
across short-term (0–1 year), medium-term
(2–5 years) and long-term (6 years to 2050)
horizons, consistent with risk management,
strategic planning and the Group’s net
zero ambition.
Identified climate risks are evaluated
using a semi-qualitative methodology
that considers likelihood, magnitude
of impact and vulnerability, with
vulnerability defined by exposure,
sensitivity and adaptive capacity.
Climate-related opportunities are
assessed based on their potential
to deliver avoided costs, increased
revenues and strategic advantage.
A consistent five-point scoring
framework is applied to prioritise
material risks and opportunities,
supported by defined thresholds
and stakeholder-informed
materiality criteria.
Financial impacts from physical
climate risks are assessed across all
manufacturing sites using forward-
looking climate data. The analysis
considers potential asset damage and
productivity losses arising from hazards
including flooding, heat stress, storms,
wildfire and water stress. Results are
presented as the net present value of
cumulative unmitigated impacts to 2050,
discounted using the Group’s weighted
average cost of capital.
Strategy management
Our strategy includes the
environment as an ESG priority
aspect. In our annual strategic
planning cycle, each business unit
considers actions and resources
required to meet our ESG
objectives, which includes climate.
This helps to inform the
development of the annual
business plan and budget.
Risk management
Our in-depth climate scenario
analysis informs the Environment
and Communities principal risk and
ensures suitable resource to risk
controls. For example, we are
committed to implementing
decarbonisation initiatives to
minimise our environmental
impact and reduce exposure to
transition risks. Additionally, we
maintain comprehensive insurance
coverage across our sites and have
established dependency flows to
support business continuity in the
event of disruptions.
Goals and targets
We are committed to the net zero
transition and reducing our
environmental impact across
emissions, waste, water and
product life cycles. We have
updated our climate strategic
ambition and will use this to inform
actions required to deliver on our
climate-related targets.
Performance monitoring
We have key performance
indicators (KPIs) associated with
our environmental ambition and
report our annual performance
alongside multiple years of
historical data. We are working
on ways to improve data collection
and reporting processes by
assessing data sources and
internal and external reporting
requirements. As part of this
process, we will also establish
additional metrics as relevant.
Decision-making frameworks
Climate considerations are included in
M&A due diligence as well as capital
allocation. We have also developed tools
and resources like the Green Design
Guidelines which foster sustainability
behaviours in day-to-day activities.
Climate-related risks and opportunities have been assessed and managed as a principal risk since 2021. Since then, Convatec has continued to
embed climate change into its business practices and operations to strengthen climate resilience and help drive actions to reduce our value
chain GHG emissions.
Climate
and business
processes
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Additional information
Financial statements
Governance
Strategic report
Climate resilience impacts and our responses
Climate resilience
Our responses
Transition impacts
Our commitment to decarbonisation and climate action reduces
exposure to potential net zero transition financial impacts and supports
delivery of our climate strategy. However, sector-specific challenges
(including prioritising product efficacy and lengthy regulatory review
periods) limit the speed of product-related carbon reductions.
We quantified financial impacts across climate scenarios for selected
transition drivers, including raw material supplier pass-on of carbon-
related costs, energy prices, renewable energy procurement and
potential introduction of carbon pricing mechanisms. The results
support our view that the potential residual financial impact from
these indicative transition value drivers is within acceptable limits.
–
Net zero:
Targets driving near- and long-term carbon emission
reductions.
–
Suppliers:
Expanding suppliers with green credentials, sustainable
materials and emissions reduction targets.
–
Product design:
Our Green Design Guidelines and digital product
sustainability tool to calculate product material emissions.
–
Packaging:
Investment to reduce product emissions and
environmental impact.
–
Disclosure and transparency:
Performance reviewed and reported
via ESG indices and systems such as CDP, EcoVadis and TransVoyant
to monitor distribution costs and improve logistics efficiency.
Physical hazards
We believe Convatec is resilient to potential impacts under a range
of climate scenarios, from those limiting global warming to 1.5°C
to more extreme scenarios exceeding 4°C. Convatec’s physical risk
exposure reveals varying levels of vulnerability across five key
climatic hazards at our sites (see page 60).
Understanding the potential financial impact of physical hazards is
critical to evaluating whether adequate controls are in place at our
manufacturing sites. While our qualitative and quantitative climate
scenario analyses illustrate the potential unmitigated financial
impacts, in practice, our established adaptation strategies and
business continuity plans across our manufacturing sites mitigate
potential disruptions.
–
Contingency plans:
Convatec has site-specific dependency flows
and business contingency plans for each manufacturing and
distribution location.
–
Insurance:
we have insurance coverage at our high-risk sites
covering major climatic events.
–
Adaptation measures:
infrastructure investments to protect against
climate-related events (see page 59).
–
Water efficiency:
replenishment initiatives and alternative water
sources at priority sites in high-water-risk regions, to mitigate
degrading water quality and water availability.
Climate change remains a cornerstone of our strategy, embedded within our ESG framework and business objectives, ensuring we
continue to manage risks and capitalise on opportunities in the transition to a sustainable future.
Risk management
Identifying, assessing and managing climate risks using a climate scenario approach
Convatec assesses climate-related risks and opportunities using a scenario-based assessment. Our approach is described on pages
56 to 57 and provides us with a foundational understanding of all identified climate-related risks and opportunities. This means
that where, to date, the quantification of financial impacts has not been feasible, we have a robust assessment to reference. Our
climate resilience assessment and responses to both transition impacts and physical hazards are set out in the table on page 50.
Climate risk management process
Climate scenario
analysis
Climate risk
response
Climate risk
register
Board, CELT, ARC, Function leadership, Risk champions, Risk owners, ERM team, Internal Audit
Identify
Assess and
prioritise
Quantify
gross/net
impact
Risk
tolerance
determined
Identify
controls and
actions
Function
and category
risk register
Convatec
risk
register
Climate key risk
indicators
RISK MANAGEMENT GOVERNANCE
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TCFD disclosure
continued
Our climate scenario analysis approach
Risk identification
We identify relevant climate impacts which we interpret and align to the specifics of our business value chain. This includes a review of
regulatory requirements related to climate change, climate policy and climate scenario research, a review of peer disclosures and internal
engagement with business function leads.
Time horizons
Climate impacts can vary over time. For the assessment of climate impacts, the short-term time horizon (zero to one year) aligns
with that of our risk management and business planning near-term period, medium term (two to five years) aligns with the strategic
planning cycle in which climate matters are integrated, and long term (six years to 2050) aligns with Convatec’s goal of achieving
net zero and the longer-term nature in which climate issues may manifest.
Risks:
Identified climate-related risks have been qualitatively
assessed against the likelihood of occurrence, the magnitude of
impact and vulnerability. For the definition of these factors, please
see Convatec’s 2024 Annual Report and Accounts, page 63.
Physical risks:
Convatec has refreshed its financial assessment
of potential losses associated with physical climate risk
through inclusion of all manufacturing sites and application
of the latest climate data projections. The forward-looking
assessment modelled the potential impact of productivity
loss and asset damage driven by various climate indicators
which are categorised into the following hazards: flood,
wildfire, heat stress, storms and water stress. For more
information on the financial assessment methodology, including
the use of climate insights data and Value at Risk, please see
Convatec’s 2024 Annual Report
and Accounts
, page 63.
Opportunities:
Identified climate-related opportunities
have been scored based on the potential size of opportunity
through avoided costs or increased revenue and the ability
to realise the opportunity.
Transitional risks:
Our financial assessment of transition risks
has focused on the potential increases in costs of direct
operations at our manufacturing sites – associated with energy
price and carbon taxes, as well as increases in costs from raw
material suppliers – using carbon tax as a proxy. The potential
impacts are determined for two business cases: a reference case
where no further decarbonisation action beyond what is known
and planned is taken, and a mitigation case where Convatec
achieves its near- and long-term emission reduction targets. For
more information on the financial assessment methodology,
including energy and emission projections, please see Convatec’s
2024 Annual Report
and Accounts
, page 63.
Quantitative assessment:
Where methodologies allow, we have sought to understand better the business impact from a selection of priority physical
and transition impacts through the quantification of potential financial impact across different climate scenarios.
Risk governance
Climate-related issues remain embedded
within the Environment and Communities
principal risk, reflecting Convatec’s
strategic commitment to the net zero
transition and a low-carbon economy.
Principal risks are assessed biannually
by the Board with support from CELT, risk
management team and organisation-
wide risk champions network. The
network ensures risks are identified,
assessed and managed continuously,
with controls implemented and
monitored throughout the year. Relevant
CELT members own and manage risks,
maintain internal control processes and
implement risk mitigation plans. The
Chief People Officer and Chief Quality
& Operations Officer (Interim) have
oversight of the Environment and
Communities risk.
Qualitative assessment
Qualitative scoring allows prioritisation of potential impacts, enabling the business to focus control measures and investment. Each risk
and opportunity was scored on a five-point scale across three climate scenarios. The scoring thresholds were defined for each indicator
to ensure a consistent, comparable approach across all impacts, climate scenarios and time horizons.
Integration of climate in risk management
Our approach to climate risk is fully
integrated into our broader risk management
framework. Beyond company-wide
assessments, we conduct
climate scenario
analysis for a comprehensive
evaluation
of climate issues over long-term horizons.
Risks and opportunities are assessed by
geography, business category, function
and asset
.
Our approach combines top-down and
bottom-up analysis to inform decisions
on controlling, mitigating or accepting
climate-related risks. The Environment
and Communities principal risk sets the
risk appetite and resource allocation,
guiding the allocation of resources and
investments. This risk is further refined
by bottom-up scenario analysis, which
highlights the scale of potential impacts
across timeframes and climate scenarios.
Mitigation measures often create
opportunities to strengthen resilience,
reduce costs and drive revenue growth,
aligned with our strategic commitment
to the net zero transition. Each year,
business categories define commitments
and actions to address key risks and
opportunities and to contribute to net
zero alignment. Our current and planned
responses to climate-related risks and
opportunities are detailed on page 63.
We refresh quantitative climate scenario
analysis, covering the potential financial
impact of physical risk, annually using
the latest business data and update
transition risk analytics at least every
three years to reflect evolving conditions.
1
2
4
3
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Additional information
Financial statements
Governance
Strategic report
Convatec tracks environmental impact across four key areas: emissions, energy, waste and water. Monitoring performance provides
critical insights and having associated targets ensures accountability and drives active management of climate impacts. Our commitments
to minimising environmental impacts and supporting the low-carbon transition are detailed on page 50, along with the actions we are taking
to achieve these goals. Using advanced tools and software, we identify key impact areas and drivers for decarbonisation, enabling targeted
solutions that deliver the greatest environmental benefits.
TCFD metric
category
Metrics
Target
Unit
2024
2025
Link to climate-related risks
and opportunities
GHG Emissions
Scope 1, 2 and 3
emissions.
Reduce absolute
Scope 1 and 2 GHG
emissions by 70%
by 2030 from a
2021 base year and
Scope 3 GHG
emissions from
purchased goods
and services,
upstream
transportation and
distribution, and
waste by 52% per
sold product by
2030 from a 2021
base year.
See carbon and energy
performance table page 51
Our value chain emissions are a helpful
indicator of our exposure to transition
risks in our direct operations (Scope 1
and 2) and our supply chain (upstream
Scope 3), providing an indication on the
carbon intensity and potential carbon
costs pass-through in our cashflows.
Energy
Energy
consumption,
and renewable
sourcing.
Aim to reach 100%
renewable
electricity
throughout the
estate by 2030.
See carbon and energy
performance table page 51
Increasing our consumption of
renewable energy and self-generation
reduces our reliance on fossil fuels and
exposure to volatility in the market
during the energy transition.
Climate risks
and
opportunities
Review of qualitative and quantitative climate scenario analysis results annually to inform the appropriate response for
priority risks and opportunities.
Capital
deployment
Capital
expenditure
on carbon
decarbonisation
initiatives and
adaptation
activities.
We have an
estimated capex
spend of around
$25-$35 million
over the next five
years.
$m
$4m
$6m
The allocation of finance and resources to
climate mitigation and adaptation ensures
that we minimise our risk exposure and
limit the potential impact of risk to the
business, whilst being able to benefit from
climate-related opportunities.
In the future, we plan to introduce a
bespoke carbon price to use within capital
allocation to support the investment
direction towards projects that avoid GHG
emissions or deliver GHG reductions.
Remuneration
Proportion of
overall CELT
bonus
remuneration
linked to
sustainability
performance.
Continued
implementation
of climate in
remuneration
policies.
%
5
5
Linking climate KPIs as part of the ESG
objectives of CELT members helps to
cascade sustainable behaviours across the
organisation, which means we are more
likely to achieve our climate commitments
and meet stakeholder expectations.
Convatec does not currently use an internal carbon price or purchase and retire carbon credits.
Metrics and targets
Risk management framework
Strategic enterprise level
Operational exposure management
Board risk
appetite
statements
Articulation into
principal risks
Business risks
and tolerance
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Risk management and principal risks
Managing
our risks
Understanding and managing our risks maximises
potential opportunities to deliver our strategy and
realise our vision
Risk culture
The Board is responsible for risk
management. The Board promotes a
transparent and accountable culture,
which does not inhibit sensible risk-
taking, critical to growth and delivery of
the Group’s vision and strategy, but also
sets the boundaries for such risk-taking.
The Board and its committees set the
tone for the Convatec Executive
Leadership Team (CELT) and other senior
management to promote and cascade
this culture across the Group and with
external stakeholders.
The Board, its committees and CELT
ensure that our risk management
framework and systems are robust,
effective and take account of appropriate
exposures. This includes implementing
and overseeing a framework of
appropriate and effective controls that
enable risk to be assessed and managed.
The risk‑related responsibilities of
the Board’s committees
Audit and Risk Committee (ARC)
Monitors and reviews all risk management
processes, including the effectiveness of
risk identification, appetite, mitigation and
control measures.
Nomination Committee
Oversight to ensure the Group has a
talented, diverse and effective Board
and CELT, combining extensive corporate
experience with market and regulatory
knowledge, as well as a pipeline of future
senior talent capable of identifying and
managing risk to enable effective
strategy delivery.
Remuneration Committee
Oversees the implementation of
appropriate reward arrangements to
drive a high-performing culture that
manages risk in line with our risk appetite.
Our risk appetite
The Board sets the level of risk we are
prepared to accept to deliver our
strategy and realise our vision. In 2025,
we formally reviewed our risk appetite
and the risk tolerance levels of each
principal risk. Our risk appetite is defined
through four risk appetite statements,
detailed on this page, with each principal
risk aligned to one of these four
statements. Risk tolerance levels are set
in line with the current and forecast
business environment.
On an ongoing basis, the ARC monitors
the level of risk to which the Group is
exposed and how the business continues
to mitigate the risk and operate within
the stated risk appetite levels. Identified
Group-level metrics (key risk indicators)
are used to measure actual business
performance against our agreed risk
tolerance. In 2026, we will continue to
enhance the governance over our
principal risks by implementing the
framework for material controls (in
compliance with the new requirements
of the 2024 UK Corporate Governance
(the Code). This enhancement further
supports the Group to operate within
our risk appetite, and can be used as
a management tool for business
decision making.
Board risk appetite statements
Seek
Risk is taken in order to choose strategic
options that offer potentially higher
business rewards and/or there is
confidence in the level of robust systems
of internal control to respond effectively
and limit the duration of potential impact.
Accept
Risks that arise from events that are
outside realistic boundaries for
Convatec’s immediate direct influence
and control. A focus is required to build
a reasonable level of resilience to
impacts on strategic objectives.
Manage
Risk is accepted by Convatec in order to
achieve strategic objectives, and where
the risk is able to be managed to a level
that would not result in material impact
to strategic objectives.
Cautious
Risks arising from Convatec’s people,
processes and systems that are
controllable and where there is no
appetite for additional risk-taking in this
area. The objective is to eliminate the risk
or to reduce it to an absolute minimal
level of tolerance.
Strategy and objectives
Risk reporting
Strategy and objectives
Risk analysis
Risk response
Risk identification
Risk description
Risk assessment
Risk categorisation
Tolerate
Treat
Terminate
Transfer
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Additional information
Financial statements
Governance
Strategic report
Risk management framework
We continue to strengthen our risk
management approach through the
development of a process that is based
upon ISO 31000, Risk Management,
and compliant with the Code.
Our process undertakes a continuous
bottom-up review of risk (current and
emerging), across each area of our
business, to identify the main threats
to delivery of our strategy. The resulting
business risk profile is used to inform
our biannual principal risk update
process, working with subject matter
experts from the business and supported
by CELT sponsor(s). We identify, assess
and prioritise our business and principal
risks using our defined risk assessment
criteria. Risk ratings are used to prioritise
our risks and are a product of the
expected impact and the likelihood of
that impact to occur as a result of an
event. Risk controls and additional risk
mitigation measures are implemented
and monitored to further reduce our risk
exposure and ensure alignment with our
risk appetite. Consequently, this process
results in our principal risks being
managed at the residual risk level rather
than inherent risk. The ARC oversees the
risk management process quarterly. For
further information see page 98.
Board
–
Sets the Group’s risk appetite
–
Ensures appropriate risk management and internal control frameworks
and systems are in place to enable the identification and robust
assessment of the principal and emerging risks
–
Ensures effective processes exist to manage the principal risks and takes a
balanced view of those risks against Convatec’s strategy and risk appetite
–
Assesses the Group’s prospects and resilience through the Viability statement
–
Sets the ‘tone from the top’ and the culture for managing risk
–
Sets strategic priorities in light of the Group’s risk profile
ARC
–
Considers the risk environment through reporting from management,
internal audit and considering external developments (e.g. geopolitical
events)
–
Reviews and reports to the Board on the effectiveness of the internal
control environment and risk management framework and systems
–
Sets the internal audit annual plan and external audit scope to provide
assurance on a materiality basis that the Group operates within the
Board’s approved risk appetite through appropriate and effective
controls and mitigations
CELT
–
Sponsors a coordinated approach to establishing and embedding
enterprise risk management
–
Employs a central risk team to establish and facilitate the risk
management process across the Group to provide risk information
for management oversight and decision
–
Manages the principal risks appropriately to operate within the Group’s
risk appetite and monitors appropriate key risk indicators
–
Ensures that risk recognition and appetite are integral to
determining strategy
–
Delivers strategy by managing risks
Leadership teams
–
Identify new and emerging risks to the Group’s strategy
–
Review management of their specific risks against the Group’s risk appetite
–
Identify additional mitigations to reduce risk exposure on an ongoing basis
–
Manage business performance in accordance with the key risk indicators
–
Assign senior business representatives (risk champions) for each category
and function to take a lead role in the identification of risk and updating risk
information for senior management oversight
Principal risks:
Risks with potential material consequences at a Group level
or where the risk is connected and may trigger a succession of events that, in
aggregate, become material to the Group. Risks may materialise individually,
simultaneously or in combination to impact the delivery of our strategic
priorities and the long-term value of Convatec.
Emerging risks:
Risks with potential material consequences at a Group level
as a result of changes in the business environment that may impact over a
longer timeline than that of the current business objectives. Emerging risks
may materialise individually, simultaneously or in combination with other risks
in one or more areas of the business to impact the delivery of our strategic
priorities and the long-term value of Convatec.
Business risks:
Risks identified from any aspect of the Group that are relevant
to one or more categories, functions and/or Centres of Excellence (CoEs), and
can be owned at that level.
Risk information top down
Risk information bottom up
Governance and oversight
The work of the Board and the ARC is underpinned by a formal structure of delegated
authority and supported by Group policies covering key areas of operation, including risk
management. The diagram below shows the key roles, responsibilities and overall
arrangements for collecting, monitoring and reviewing risk information.
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Risk management and principal risks
continued
2025 risk landscape
Our overall risk profile reflects both the
ongoing enhancement in our business
resilience capability and the continuing
challenges from the macroeconomic and
political environment. Since 2020, global
events have elevated our risk profile, and
we continue to manage the challenges
facing the wider business landscape and
build further resilience into our
operations. We remain well placed to
successfully deliver our strategy. To
support our objectives and mitigate
specific external events we increased our
focus in certain areas as detailed below.
Strategic risks
In 2025, we built further momentum by
delivering strong revenue growth,
offsetting market headwinds and driving
broad-based growth across our
categories. We operated within a
broader risk landscape of continuing
global uncertainties from the wars in
Ukraine and the Middle East, as well
as the backdrop of global tariff changes
on the value chain. In our product
development pipeline, we successfully
delivered key products and services to
our target markets and continued to
improve pipeline delivery through our
defined innovation framework. We
continued to focus on environment,
social and governance (ESG) through our
business strategy, and implementation
of plans to align with reporting
requirements as we deliver on our
net zero commitment.
Operational risks
Over the course of 2025, we have
developed an operational resilience
framework that covers our products,
procurement, operations and supply
chain. We have also continued to work
to: enhance and rationalise our strategic
distribution network to further improve
geographical resilience; further increase
external manufacturing partner
resilience and quality through enhancing
our third-party risk management
framework; and improve our
manufacturing resilience through
continuing to deliver our operational
strategy. We continued to focus on
investing in and delivering our people
programmes to support the right level
of key talent, roles and skills in place to
deliver our strategic objectives, provide
sustainable leadership succession
planning and further develop our strong
foundations. We have further improved
the robustness of our IT infrastructure
and cybersecurity in line with the
changing business environment. We
continue to invest in and develop our
artificial intelligence (AI) capability and
capacity in adding value to the business,
whilst considering both external and
internal risk factors from this
emergent technology.
Financial risks
During 2025, we continued to drive
broad-based organic revenue growth
and margin expansion as a result of
further benefits from our simplification
and productivity initiatives, new product
launches delivering strong revenue
growth, offsetting market headwinds
and demonstrating the resilience of our
business. The Centers for Medicare &
Medicaid Services (CMS) in the US, after
considering Medicare reimbursement
for skin substitutes revised its payment
policy, in effect from 2026. Our overall
Group performance for the year and
outlook for 2026 was unchanged by this
event. Separately, the CMS maintained
coverage for our Advanced Wound Care
solution, InnovaMatrix
®
. We continue to
maintain a strong balance sheet, banking
and credit facilities and level of tax
governance to reflect our robust credit
standing and investment grade rating.
Compliance risks
In the last 12 months, we strengthened
and adapted our compliance framework
sustainably as we grew in mature
markets and targeted investment
in emerging markets. We maintained
ongoing compliance in our markets,
including the continued provision of
ethics training and focused global
compliance resources and initiatives.
We continued to improve the robustness
of our privacy framework in line with
applicable data protection laws in key
markets. During the period, we identified
exposures and addressed risks of
non-compliance through implementation
of appropriate mitigation programmes.
We have continued to progress
improvements in our third-party risk
management and contract procurement
to maintain expected standards
of compliance within our third-party
partners. Third-party activity is
monitored and managed through due
diligence by our Compliance team and
an external, independent expert.
2026 anticipated risks
We expect certain risks to impact in
2026 and have implemented mitigation
measures to reduce any adverse
implications for the Group’s financial
results, operations, reputation and
strategy. While these specific risks are
embedded in many of our principal risks,
further details are provided as follows:
Market growth and product delivery
The FDA Warning Letter received by
one of our subsidiaries in Infusion Care,
regarding reporting procedures and
protocols relating to the quality
management system, is being actively
engaged with to resolve the matters
identified as soon as possible. For
further information, see page 36.
We focus on investing in and growing
market share across our key markets.
We support this growth by managing the
external climate from future healthcare
system reform. reimbursement change
and regulatory pressure headwinds,
supported by the core capability of our
Global Market Access & Reimbursement,
Global Marketing & Sales, Medical &
Clinical Affairs and Strategic Pricing CoEs.
We also work to maintain a positive
balance between new product growth
driving sales and offsetting market
dynamics. We expect to launch new
products for Advanced Wound Care,
Continence Care and Ostomy Care and
leverage recent product launches by
rolling them out in additional key
geographies in 2026. We expect to
launch new products across all of
our categories into 2027 and beyond.
Delivery of our product pipeline is
supported by our development and
launch process, which acts end-to-
end to govern our actions from ideation
through to launch consistently. We
continue to strengthen our competitive
position by evaluating potential
partnerships and acquisitions. Any delay
or failure to meet market expectations
in our growth plans, however, may result
in a lack of stakeholder confidence to
deliver against stated plans.
Geopolitical tensions
Volatility in the international political
climate increases pressure on our
operations. We are reliant on global
supply chain partners predominantly in
North America and Europe. The integrity
of our supply chain depends on access
to and the reliability of raw material and
energy supply and the storage, logistics,
processing and manufacturing
infrastructure operated by us and our
third-party partners. The current
international political climate presents
increased possibility of commodity and
energy price volatility, unpredictable
populism, isolationism, interventionist
economics, transactional globalisation,
unstable exchange rates, additional
sanctions or other trade limiting actions
that could impact our ability to source
commodities and raw materials, or
maintain a presence in current and
future markets and countries. Any break
in this supply chain, for example, as
a result of interstate conflict, regional
tensions or terrorist activity, including
acts and threats to shipping channels,
national power and utility networks
or cyber-attacks, or as a result of
heightening operating costs, could
jeopardise our revenues and/or
manufacturing productivity and impact
supply to customers and patients.
Global macroeconomic pressures
Our operating and financial performance
is influenced, among other factors, by
the economic conditions of the countries
and markets in which we operate, and
our ability to manage exposure to
volatile economic measures. Pressure
from the global economic slowdown,
driven by factors such as renewed trade
tensions, squeezed consumer demand
from lingering inflation, interest rate
uncertainty and the geopolitical
environment can all contribute to
challenging market conditions. Global
economic strain is also expected from
constrained government budgets and
monetary policy that could further
tighten global financial conditions
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Financial statements
Governance
Strategic report
through any uncertainty in the bond
market, or from stock market corrections
precipitated by any AI boom reversal.
We are focused on delivering
simplification and productivity through
efficiencies to our manufacturing
and operating cost base. Whilst the
management of our supply chain is
a core competence, we continue to
monitor the evolving situation and
take appropriate steps to prepare for
foreseeable challenges in the current
environment over persistent inflation
on commodities, lead times and
shortages for raw materials and
manufactured goods, tariff movements,
adverse movement in shipping costs,
congestion and capacity constraints.
Emerging risks
Biannually, our risk management process
engages with senior management to
identify any emerging risks (derived
from our principal risk model), which
represent a significant change in the
business environment that may impact
over a longer timeline than that of the
current business objectives. As at the
date of this report, the following
emerging risks have been identified:
Medical advances
Technology and innovation are essential
if we are to meet customer demands.
If we do not develop the right products,
have access to the right technology or
deploy it effectively within our key
markets, or adjust to medical and surgical
advancements and improvements in
detection, cure and prevention (including
in the development of smart ‘artificial
device’ technology, the emergence of
new drugs to treat chronic conditions
and AI), we may lose market share
in key markets to existing and
new-entrant competitors.
Future material and operational
restrictions
Our future business depends on our
ability to anticipate and/or adapt to
future health, safety and environmental
legislation, concerns, studies or a loss of
stakeholder confidence in the materials
and processes used in the manufacture
of current and future products, or where
there is a proven greener alternative, for
example, to single-use plastics.
Long‑term third‑party management
Our current and future products rely
on regulated manufacturing processes
and approved supply chains. We are
dependent on our ability to effectively
manage the security of supply in our
key raw materials and unfinished goods,
critical services and manufacturing
energy supply to avoid any future
chronic sourcing issues/cessation in
service by single or sole source suppliers
for key product lines.
Future market environment
Driving growth and further developing
our business is reliant on our ability to
adapt to future market and healthcare
models, market competition and major
unforeseen economic events. The value
of customer data and the emergence of
AI has increased. Any shortfall in our
ability to adapt to an increase in the
management of customer data,
expanding data commercialisation
capability and technology and widening
range of virtual capability allows for
potential disintermediation and/or
bundling of other products and
services by emerging, non-traditional,
competitors entering the market.
Catastrophic loss risks
On a biannual basis, our risk
management process engages with
senior management to identify any
catastrophic loss risks, which are defined
as low-likelihood risks (derived from our
principal risk model) that lie outside the
realm of regular expectations; however,
they carry an extreme impact, which in
some cases were perhaps predictable.
Areas in which we have identified
catastrophic loss risk scenarios are
grouped as:
Pan‑global risks
Worldwide events affecting the Group
indirectly and that sit largely outside of
our control, such as global financial and
political crises or major health events.
External threats
External events that directly affect the
Group and that we have a degree of
control over, such as major climate
events, man-made environmental
disasters, sustained public utilities
failure, major loss of IT systems or
a complete loss of critical national
infrastructure.
Internal threats
Internal events directly affecting the
Group that we have a degree of control
over, such as a complete loss of a major
asset, major product quality failure, key
loss of part of our supply chain or a
severe market conduct incident.
Preventing, preparing and responding to
high-impact, low-likelihood (catastrophic
loss) events in a considered manner, and
that the business emerges more
resilient, is a critical activity. Improved
visibility allows for greater challenge and
assurance that the business is resilient
and prepared for such events and will
also strengthen our ability to properly
consider the severe but plausible
scenarios used in building our long-term
Viability statement (pages 76 and 77).
Risks can be assessed through crisis
management planning as part of a wider
resilience framework to maintain the
support and confidence of stakeholders,
but the costs of risk mitigation will need
to be considered to ensure any measures
are proportionate to the risk faced.
We support this area of risk by working
with senior leadership to run crisis
management exercises. In 2025, we ran
a significant manufacturing plant
incident scenario, with senior
leadership and CELT, to enhance
business preparedness and resilience.
Further relevant information
Our business model
page 8
Key performance indicators
pages 12 and 13
Operational review
pages 14 to 21
Responsible business review
pages 32 to 53
Task Force on Climate‑related
Financial Disclosures (TCFD)
pages 54 to 65
Viability statement
pages 76 and 77
Governance
pages 78 to 125
Strengthening our
approach to crisis
response
In 2025, we took steps to enhance
our global business continuity and
resilience by strengthening our crisis
management capabilities. In response
to the increasing complexity of threats,
including cybersecurity threats, we have
enhanced our overall incident response
strategy accordingly.
Governance:
A training programme forms part of
our overall framework to strengthen
our resilience culture at Convatec.
The training programme, and overall
framework remodelling, increased senior
leadership knowledge of our escalation
protocol, defined roles and responsibilities
and enhanced the oversight at our
executive level.
Training:
We worked with expert third-party
partners to extend crisis management
training across our global locations.
This training involved a case study
scenario-based exercise and an overall
refreshment of our protocols. The training
served to inform new and existing
employees of our crisis management
strategy and internal escalation protocol
to aid overall employee ability to identify
and respond rapidly and effectively to
perceived disruptions or threats. This
training demonstrated our commitment
to business continuity and resilience.
Preparedness:
Our work on crisis management forms a
critical part of our broader risk mitigation
strategy. It demonstrates our proactive
approach to risk management and
dedication to protecting the security and
continuity of operations, along with
maintaining the trust of our stakeholders.
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1. Operational resilience and quality
Risk
Supply and manufacture of products and packaging are reliant on the resilience of supply chain partners and manufacturing assets, and robust clinical and
quality system processes. We invest in and develop our assets, systems and processes to provide a level of operational integrity and performance. Failure
to respond to events, including geopolitical issues and any increase in extreme weather patterns from climate change, that result in production and/or
supply chain delays, adverse product quality and health, safety and environmental incidents could result in underperformance, a requirement to recall a
product, reputational harm or a loss of stakeholder confidence in our ability to deliver our strategic ambitions.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Operational
Appetite:
Manage
Accountable:
Chief Quality &
Operations Officer (Interim)
–
Lost time injury rate
–
Operations gross
productivity
Increase the efficiency, effectiveness and resilience
of operations to support future market and
customer demands.
2025: increased – reflects sustained
value-chain pressures. We are making
further investment in resilience and
capacity, enhancing third-party
partnerships, and improving quality
management procedures and
systems.
Key drivers
Risk mitigation
–
Supply chain resilience capabilities
–
Single source or sole supply for raw materials and services
–
Business continuity management
–
Quality standards and resolution of quality issues within the
supply chain, manufacturing and packaging processes
–
Health and safety of employees and contractors. Protection
of the environment
–
Maintaining manufacturing plant performance
–
Business continuity plans for manufacturing facilities reviewed and tested to provide
assurance over our capability to respond rapidly and appropriately to incidents
–
Cross-functional leadership review process in place to assess, manage and monitor risk
and resilience exposure from procurement, supply chain and manufacturing
–
Executive oversight over management systems to prioritise and address risk to
manufacturing process risks, facilities and people. Health, safety and environment
team drive objectives, performance and action plans. Quality team delivers compliance
by managing audit findings, corrective actions, risks and opportunities
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Customer and markets
–
Political and economic environment
–
Innovation and regulatory
–
People
–
Environment and communities
Aligns with IROs within:
–
Customer-centric solutions
–
People and culture
–
Supply chain
–
Environmental stewardship
Considered in scenarios:
–
Manufacturing incident
–
Business interruption
–
Cyber incident
–
Regulatory issue
Read more on pages 32 to 65
Risk management and principal risks
continued
Principal
risks
An overview of our principal risks, which
could impact the delivery of our strategy
and the realisation of our vision, is provided
below in order of priority
The Board has oversight of all principal risks that the Group
faces. The Board reviews and agrees our principal risks
biannually, taking account of our risk appetite, key risk
indicators, evolving strategy, current business environment,
emerging risks and catastrophic loss risks. The Board also takes
account of the effectiveness of our risk mitigation and controls.
Our principal risks are set out over the following pages in
order of priority (based on the rating of residual likelihood
and impact, as described previously). They are also reflected
in the key adverse scenarios underlying the Viability
statement (see pages 76 and 77).
Risk heat map
8
3
5
2
6
4
1
7
Impact
Likelihood
Strategic
Operational
Financial
Compliance
Increased
Unchanged
Decreased
The graphic summarises our assessment of the expected impact and
the likelihood of that impact to happen as a result of our principal
risks occurring after taking into consideration the mitigating actions
and effective controls in place to manage each risk, with an indication
of the change in the risk profile since December 2024.
1.
Operational resilience and quality
2.
Customer and markets
3.
Cyber and information security
4.
Political and economic environment
5.
Innovation and regulatory
6.
Legal, compliance and privacy
7.
People
8.
Environment and communities
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Governance
Strategic report
2. Customer and markets
Risk
Growth and value in our markets rely on our product portfolio, future innovation, M&A pipeline and digital strategy delivering to expectations and meeting
customer demands, in line with our commercial policy. There is continued pressure on pricing and cost containment from global inflation rates and large
and consolidating buying groups, as well as on reimbursement rates for products sold into the home care setting from government or commercial payers
managing and reducing their costs. Competitor behaviour, attractiveness and effectiveness of our portfolio to market trends or public perception all
increase competition for sales and reduce prices and margins. Failure to identify, react or plan effectively to changes in market conditions, competition,
customer demand, expectations and behaviours or a deterioration in counterparty exposure, cash flow and liquidity could result in suboptimal decisions,
underperformance and adverse results.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Financial
Appetite:
Manage
Accountable:
Presidents
and Chief Operating Officers
–
Customer net
promoter score
–
In-market sales
growth versus
segment
Grow portfolio and market share through
cost-efficient, innovative products that strengthen
the relationship with our customer base.
2025: increased – global economic
challenges continue to pressure
healthcare systems’ financial constraints
with potential effects on future
reimbursement and pricing rates.
Key drivers
Risk mitigation
–
Local or national government healthcare budget
provisions impacting reimbursement
–
Operational, contracting and price review process
–
Competitive markets and behaviours and consolidation of
buying groups
–
Manufacturing costs in a low-margin driven pricing
environment and as a result of changes in consumer and
government behaviour/attitude to sustainability
–
Changes in customer buying patterns and service level
expectations
–
Product portfolio rationalisation. Strategic M&A and
divestitures realisation
–
Executive review of the strategic plan to manage internal and external factors. Key
markets supported by the Global Strategic Pricing CoE, with insight into changing
market conditions and regular pricing analysis and review undertaken. Global Market
Access & Reimbursement CoE focuses on reimbursement market rates
–
Executive operational reviews in place to drive revenue growth, manufacturing cost
efficiencies and focus on new product development and launch. Voice of customer
processes embedded across the business. Quality team review complaints data for
continuous improvement and manage corrective action with business leadership
teams
–
Key strategic markets and geographies monitored and in-market activity and
environment assessed for further growth opportunities through the Executive-led
business development process
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Operational resilience and quality
–
Political and economic environment
–
Innovation and regulatory
–
Legal, compliance and privacy
–
Environment and communities
Aligns with IROs within:
–
Customer-centric solutions
Considered in scenarios:
–
Reimbursement reduction
–
Key global markets
Read more on pages 14 to 21
3. Cyber and information security
Risk
Effective operation of our global business relies on the resilience of our technology systems, network, information management processes and our ability
to manage the fast-paced and evolving AI environment. Failure to ensure that our systems, data management, AI technologies and related controls are
effective, available, integral and secure, and recoverable, including those of our third-party partners, could adversely affect our ability to maintain
continuity in our operations and the trust of our customers and other stakeholders. Any real or perceived failure to comply with standards, laws and
regulations, or to adjust to a change in conditions and increase in scrutiny, could result in adverse consequences such as penalties, regulatory investigation,
a decrease in corporate trust from stakeholders or additional compliance measures.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Operational
Appetite:
Manage
Accountable:
Chief Financial
Officer
–
Security incidents
–
Vulnerability patching
Enhance the efficiency and resilience of our IT and
data management systems and processes to
support effective delivery of our operations.
2025: no material change.
Key drivers
Risk mitigation
–
Cybersecurity and AI
–
IT and network resilience, business continuity and disaster
recovery arrangements
–
Digitisation
–
IT network alignment to business needs
–
Internal IT control
–
Data optimisation
–
Executive-led IT and Cybersecurity steering committee provides oversight on cyber
and information security risks, incidents and resilience. Executive-led AI steering
committee reviews AI strategy, risks and opportunities and resource prioritisation
–
IT general control framework and monitoring programme manages IT risk over
financial and reporting systems, networks, IT security and resilience. Control
monitoring is reported to the ARC
–
Group IT process aligns and prioritises IT products (including cyber and privacy risks)
to strategy and implement control over project delivery. IT resilience review and
overarching continuity plans in place
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Legal, compliance and privacy
Aligns with IROs within:
–
Business ethics and society
Considered in scenarios:
–
Cyber incident
Read more on pages 45, 77 and 98
Strategy key
Focus
Innovate
Simplify
Build
Execute
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Strategic report
Risk management and principal risks
continued
4. Political and economic environment
Risk
Our global operations and markets are subject to political interventions and changes to regulatory requirements, particularly in relation to global
inflationary and supply chain pressures, fluctuations in interest rate and foreign exchange movements, security of raw material and energy supply,
healthcare system reform, regulatory reform, governance of industry operations, amendment to tax and disclosure regimes and fiscal terms and
protection of consumers and business customers. Continuing volatility in the international political climate increases the possibility of tariff structure
changes, sanctions or other trade limiting actions. Failing to identify and adapt to these factors could impact sourcing commodities and services, financial
performance and our ability to maintain a presence/develop in current and future markets and countries.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Strategic
Appetite:
Accept
Accountable:
Chief Financial
Officer
–
Sales growth
–
G&A
Effective minimisation of political and
macroeconomic disruption will enable identifying
areas for operational improvement, deliver further
value and maintain competitive market positions.
2025: no material change.
Key drivers
Risk mitigation
–
Financial markets, inflationary and supply chain pressures
and macroeconomics
–
National healthcare reforms, political movements and
trends
–
Geopolitics and security of the supply chain. Uncertainties
effected by global pandemics, interstate conflict and social
unrest affecting key markets
–
National trading relationships, customs duties and tariffs
–
Compliance with sanction frameworks
–
Counterparty exposure, multiple tax jurisdictions and
complex global tax regulatory environment
–
Strategic Pricing CoE established in key regions provides control on local and regional
pricing. Dialogue with governments in relation to specific matters and industry body
membership. Compliance, IR, Legal, Regulatory and Tax teams support the business
and respond to changing requirements where appropriate
–
Sales & Operational planning process reviews customer demand and supply, product
quality, inventory levels, supply chain risks, tariffs and other external challenges
–
Executive-led Treasury, Tax and Financing committee oversees our financial
performance and financial system management, as well as our response to
fluctuations in the external financial market
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Operational resilience and quality
–
Customer and markets
–
Innovation and regulatory
–
Legal, compliance and privacy
–
Environment and communities
Aligns with IROs within:
–
Business ethics and society
Considered in scenarios:
–
Reimbursement reduction
–
Key global markets
Read more on pages 2 to 4
5. Innovation and regulatory
Risk
Failure to invest in and develop safe, effective, profitable and sustainable long-life products to meet customer and market expectations, fill unmet medical
needs or respond to disruptive new technologies, could result in lost market share, underperformance and a lack of stakeholder confidence to deliver in line
with expectations. We are subject to oversight by a number of regulatory jurisdictions that continue to implement significant obligations and scrutinise how
we operate. Failure to fulfil emerging obligations, provide safe clinical processes, or produce products and packaging that meet stringent and transparent
customer, environmental and performance criteria, or operate inadequate or environmentally inappropriate manufacturing and quality systems could
impact our ability to supply or a requirement to recall product(s). This may lead to the potential for regulatory action and/or liability claims, a failure to meet
stakeholder expectations or patient harm from faulty products.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Strategic
Appetite:
Cautious
Accountable:
Chief Technology
Officer and Head of Research &
Development
–
Vitality index
–
Customer complaints
per million units
Create a leading and responsive position in the
regulatory environment, and, through a sustainable
development pipeline, improve the long-term
customer experience, meet market demands and
capture growth opportunities in our markets.
2025: no material change.
Key drivers
Risk mitigation
–
Transition from end-of-life technology and ageing
products
–
Compliance with regulatory frameworks and anticipation
of emerging regulatory environment
–
Disruptive and new technologies. AI. Changing customer
and market needs
–
Maintaining legal manufacture structure, authorised
representatives and assurance process for pre-market,
manufacture and post-market compliance
–
Managing safe clinical services for sustainable growth
–
Sustainable products, packaging and development
–
Central Technology & Innovation team provide strategic direction, with Executive-led
portfolio review, to deliver innovative product through our cross-functional new
product development and launch process
–
Regulatory teams and regulatory intelligence framework support the business to meet
the latest standards and expectations in all our jurisdictions, maintain product
regulatory approvals and manage our relationship with regulatory bodies
–
Regulatory team monitors complaint resolution, quality performance and efficacy of
new products for product improvement and new product development. Clinical trials
examine product efficacy to support improvement and reimbursement processes
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Operational resilience and quality
–
Customer and markets
–
Political and economic environment
–
Legal, compliance and privacy
–
Environment and communities
Aligns with IROs within:
–
Customer-centric solutions
–
Business ethics and society
Considered in scenarios:
–
Regulatory issue
Read more on pages 34 to 37
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Governance
Strategic report
6. Legal, compliance and privacy
Risk
Our business is subject to a complex environment of laws and regulations across multiple jurisdictions. Any real or perceived failure to comply with required
and/or new and emerging laws, regulations and sanctions or to adjust to a change in conditions and increase in scrutiny, or exposure to litigation from
contractual obligations or intellectual property could result in adverse consequences such as penalties, government investigation, a decrease in corporate
trust from stakeholders, competitive disadvantage or additional compliance measures. Loss of data management and privacy integrity can lead to IP and
data theft, fraud or accidental disclosure and result in non-compliance with global data protection laws.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Compliance
Appetite:
Cautious
Accountable:
General Counsel &
Company Secretary
–
Whistleblower case
monitoring
–
Compliance training
(workforce)
Create an industry-leading legal and compliance
approach to our obligations and stakeholder
expectations.
2025: no material change.
Key drivers
Risk mitigation
–
Privacy and data management
–
Market conduct compliance
–
Legal obligations in relation to customer conduct, including
sales practices and distributor activity
–
Product and patient liability
–
Commercial litigation. Complexity and transparency of IP
and patent environment, including in tax and operations
–
Financial crime, including anti-corruption and anti-bribery
matters
–
Executive-led Ethics, Compliance and Privacy committee and the ARC provide
oversight over the compliance and privacy programmes. Independent whistleblower
process in place. Sanction framework checks in place with shareholder register,
Compliance, Treasury, Banking Partners, Supply Chain and Finance
–
Compliance framework provides assurance over key governance requirements across
the Group and our third-party partners. Fraud risk framework manages key controls
and monitoring over fraud risks. Privacy team and framework in place to manage and
monitor the protection and use of personal data
–
In-house legal counsel team with external counsel engaged when appropriate. Grant
of Authority protocol in place. Patent counsel manages patent protection and ongoing
market IP monitoring processes
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Customer and markets
–
Cyber and information security
–
Political and economic environment
–
Innovation and regulatory
Aligns with IROs within:
–
Customer-centric solutions
–
People and culture
–
Business ethics and society
Considered in scenarios:
–
Cyber incident
–
Regulatory issue
Read more on pages 42 to 47
7. People
Risk
Failure to effectively recruit, retain and develop a diverse and inclusive workforce with strong succession to align the right talent, particularly in our senior
management and through the development of the talent pipeline, to enable key business objectives. Global cost of living and inflationary pressures
continue to challenge retaining and/or recruiting key talent and skills. Failing to successfully manage transformation and/or the effects of high business
disruption could impact employee effectiveness, engagement and wellbeing and adversely affect our ability to achieve our strategic objectives and deliver
growth.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Operational
Appetite:
Manage
Accountable:
Chief People Officer
–
Employee
engagement
–
Voluntary turnover
Create a sustainable level of expertise and key skills
across Convatec.
2025: no material change.
Key drivers
Risk mitigation
–
Attraction, recruitment and retention of key skills and
capabilities, including salary and remuneration inflation
challenges in critical areas
–
Effective succession and knowledge management
planning strategy for senior leadership and key roles
–
Resource planning, people capability and capacity,
including the speed and volume of management change
–
Mental and occupational health and wellbeing of the
workforce
–
Company culture, values and workforce engagement
–
Performance and development management, inclusion
and belonging and labour relations
–
Executive leadership focus on maintaining an effective leadership team with a pipeline
of senior future talent and retention and development of key skills and critical roles
across the organisation. Colleague communities and mentorship programme in place
–
Employee engagement process in place. Appropriate remuneration and reward
arrangements attract and retain top, senior talent, maintain strength in key skills and
respond to key regional market challenges
–
Global inclusion and belonging framework in place. Established employee assistance
programme and occupational health activities to support workforce
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Operational resilience and quality
Aligns with IROs within:
–
People and culture
No long-term viability risk events were
considered severe but plausible for the
People principal risk.
Read more on pages 38 to 41
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Risk management and principal risks
continued
8. Environment and communities
Risk
Long-term success relies on addressing the challenges to the sustainability of our operations (including environmental and social aspects), supply chain
resilience, products and the ability to manage the impact of climate change, developing trends in the political environment and increasing pressure and
scrutiny from external groups, society, customers and communities in which we operate. The level of requirements and expectation from stakeholders
continues to increase, which requires a robust, transparent and equitable level of sustainable corporate culture to underpin the way in which the Group
operates. Failure to implement appropriate plans across ESG aspects, including incorporating the recommendations of the TCFD and Science Based Targets
initiative (SBTi) and deliver on a net zero commitment, could hinder efforts to mitigate long-term risks and bring a range of reputational and commercial
impacts to the business across a range of stakeholders.
Risk details
Key risk indicators
Opportunity
Risk profile change
Category:
Strategic
Appetite:
Manage
Accountable:
Chief People Officer
and Chief Quality & Operations
Officer (Interim)
–
Carbon footprint
reduction (Scope 1 & 2)
–
Carbon footprint
reduction (Scope 3)
Achieve an effective balance between short-term
needs and delivery versus longer-term
requirements and commitments, in response to
anticipated exposures from changes and events in
the climate, environment and society.
2025: no material change.
Key drivers
Risk mitigation
–
Environmental and climate change strategy delivering our net
zero commitment and SBTi
–
Recommendations of the TCFD and emerging ESG reporting
requirements and standards
–
Responsible and sustainable behaviours across the supply
chain
–
Product impacts, sustainable product design and product
stewardship
–
Sustainable corporate culture in inclusion and belonging and
transparent ways of working, including human rights
–
Community investment programme
–
Executive ESG steering committee provides oversight and direction on Group strategy
and execution, including regulatory and reporting requirements, with regular Board
engagement
–
ESG control framework provides governance over ESG metrics and disclosures, with
control monitoring reported to the ARC
–
Supply chain partners managed through contracts, supplier code of conduct and
performance monitoring with third-party assurance process in place for key suppliers
How the principal risk links to:
Strategy
Principal risk connectivity
ESG key topics see pages 34 to 53
Viability statement
–
Operational resilience and quality
–
Political and economic environment
–
Innovation and regulatory
Aligns with IROs within:
–
People and culture
–
Environmental stewardship
–
No long-term viability risk events
were considered severe but plausible
for the Environment and Communities
principal risk
Read more on pages 44 to 53
75
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
Non‑financial and sustainability
information statement
In accordance with the requirements of Section 414CB of the Companies
Act 2006, the information below is provided to help our stakeholders
understand our position in relation to key non‑financial and sustainability
matters including, where appropriate, the relevant policies and processes
we operate, and considers their interests when making decisions
Key matter
Environmental
matters
Climate change and environmental strategy
Pages 32 and 33
and 48 to 53
Climate‑related financial disclosures
Pages 54 to 65
Employees
Our vision and values
Page 7
Code of Conduct
Pages 44 and 45
Inclusion and Belonging
Pages 38 and 39
Our people strategy
Pages 38 to 41
Colleague training and development programmes
Pages 39 and 40
Employee engagement
Pages 38 to 41, and 86
Human rights
Human Rights and Labour Standards
Page 40
Modern Slavery Act Statement
Pages 42 and 43
Social and
community matters
Community engagement
Page 47
Anti‑corruption
and anti‑bribery
Third‑Party Compliance Manual
Page 42
Compliance helpline and website
Page 44
Principal risks and impact
of business activity
Pages 66 to 74
Non‑financial key
performance indicators
Page 13
Our business model
Page 8
You can find more information, including copies of our policies, processes and statements at:
www.convatecgroup.com/investors/governance/our‑policies‑and‑statements/
www.convatecgroup.com/sustainability/esg‑reports‑and‑data/
Position, policies and processes we implement
76
Convatec Annual Report and Accounts 2025
Strategic report
Viability statement
An understanding of the Group’s
strategy, to deliver sustainable revenue
growth and expanding operating
margin, and its business model (pages
8 to 11), are central to allowing the Board
to assess Convatec’s prospects, liquidity,
resilience and viability. The principal and
emerging risks being addressed by the
Company (see pages 66 to 74) are
reflected in the determination of the
Group’s strategy and its successful
implementation.
Assessment of future prospects
The Directors are of the view that the
appropriate period of assessment
remains a three‑year period from
January 2026 to December 2028 (the
Viability Period). Although the Directors
have no reason to believe that the Group
will not be viable over a longer period,
the Board has chosen to conduct the
assessment for this three‑year period
because:
–
Our R&D and production cycles tend
to be of a duration of less than three
years with key innovation pipeline
programmes targeting launch
within the Viability Period.
–
Significant capital investments are
being made to realise the Group’s
strategy over the medium to long
term. The Group’s business model
means that its capital investment
is discretionary, and it has the ability
to respond in a timely manner to
reasonably possible Group‑specific
and market events, and therefore does
not require a longer time horizon
assessment.
–
Implicitly, it is harder to accurately
forecast the latter years of a five‑
year plan.
The Group’s performance management
process consists of monthly monitoring
of progress against the financial budget
and key objectives for the current year
by CELT and the Board, and reforecasting
throughout the year in respect of the
expected outcome for the current year.
It also includes the preparation of a
detailed budget for the following year
and updating a rolling five‑year strategic
plan, which forms the main basis on
which to assess the longer‑term
prospects of the Group.
In 2025, the Board approved a detailed
operational plan and execution model
to deliver sustainable and profitable
growth that underpins the Group’s
five-year strategic plan. The five-year
financial plan from 2026 to 2030
forecasts the Group’s profitability,
cash flows and funding requirements,
inclusive of the Viability Period.
Our strategy is consumer‑centric,
agile, focuses on innovation and
ensures clear accountability. It has been
developed from strategic plans for each
of our categories and functional areas,
supplemented by items managed at a
Group level and assumptions such as
macroeconomic activity, market growth
forecasts, competitor activity and
exchange rates. This has then been
supplemented by CELT’s plans for
improving the operational effectiveness
and execution across the Group.
Key factors affecting the Board’s
view of the Group’s prospects over
the period of the viability assessment
and the longer term are:
–
The fundamentals of our markets,
products and brands remain sound,
as does our current and future strategy
of leveraging our product portfolio
for growth in attractive markets
and geographies, developing and
commercialising new technologies
and services and striving to reduce
complexity and increase efficiency.
–
Established positions in large,
structurally growing markets; strong
brands and a range of differentiated
products; and a well‑diversified
business platform across a range of
markets and geographies.
–
Strong cash generation capabilities
and a sound financial base, with the
Group’s $950m revolving credit
facilities committed until 2028, the
Group’s $500m senior unsecured
notes due in 2029 and the newly issued
$500m unsecured senior notes due
in 2035.
–
The evolved five strategic pillars that
support the delivery of the strategy,
which are set out on pages 9 and 10.
The key assumptions considered in the
strategic plan, on which this viability
assessment is based, include:
–
Our markets remain structurally sound
and are expected to continue growing
at rates similar to 2025. We are
well‑equipped to manage changes to
the reimbursement environment in
certain markets, which may impact
near‑term dynamics.
–
Margin improvement is driven by
successful execution of our operational
excellence programmes in order to
deliver productivity gains
in excess of
inflation and other headwinds.
–
Strong cash generation funds higher
capital expenditure, supporting
capacity expansion and new product
launches. Our disciplined approach to
capital allocation has enabled the
return of surplus capital to
shareholders through the $300m
share buyback programme completed
in December 2025.
–
Climate impact has been considered
but is not expected to have an impact
during the viability assessment period
of three years.
–
Through the execution of our strategy,
we continue to simplify our business,
remove excess costs and re‑invest in
capacity and future innovation.
–
Dividends are assumed to grow
progressively over the Viability Period.
Viability assessment
Throughout the year, the Board has
undertaken a robust assessment of
the principal risks affecting the Group
and also emerging risks, particularly
those that could threaten the business
model and the Group’s viability over
an extended period, including an
assessment of the likelihood of them
materialising. These risks and the actions
being taken to manage or mitigate these
risks are explained in detail on pages
66 to 74. This analysis has then been
applied to allow the Board to assess
the prospects, liquidity, resilience
and viability of the Group.
The viability assessment has consisted
of stress testing the forecasts underlying
the strategic plan by modelling severe
but plausible scenarios in which a
number of the Group’s principal risks
and uncertainties materialise within
the Viability Period. We have modelled
scenarios which group together principal
risks where we believe interdependencies
exist between risks, in addition to
scenarios where unconnected risks occur
simultaneously. These scenarios focused
on both external factors and internal
factors, such as the impact of
macroeconomic forces and sanctions
leading to limited cash generation and
critical supply chain issues in key
markets, or consequences of regulatory
compliance issues resulting in a loss
of revenues.
We continue to strengthen and develop
the link between the Group’s principal
risks and the viability assessment and
scenarios. The Group’s principal risks
are updated through the lens of our risk
appetite together with assessing our
evolving strategy, current business
Convatec’s future prospects
and viability
77
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Governance
Strategic report
environment and any emerging risks.
We reviewed the severe but plausible
risk events from each principal risk
and prioritised those by relative impact to
form revised long‑term viability scenarios.
As a result, six severe but plausible risk
scenarios have been chosen. Five of our
risk scenarios from 2024 have been
maintained in the current year (EHS
incident at a manufacturing site,
significant climate event at a supply
chain location, significant cyber incident,
regulatory issues within product lines
and macroeconomic forces and/or
sanctions restricting access to a key
global market due to geopolitical
challenges). The pressure on public
finance risk has been refined to
aggregate discreet adverse
reimbursement rate changes to the
Group. These six risks reflect the
importance of all these areas to our
business as we grow in new and
emerging markets as well as the
changing external environment that
our current operations work within.
The main severe but plausible scenarios
are included in the table below.
The scenarios and sensitivity testing
have been based upon the current
Board‑approved strategic plan and
forecast revenues, operating profit
and balance sheet and were reviewed
against the current and projected
liquidity and funding position. The
strategic plan base case has been revised
to incorporate the change in reimbursement
for skin substitutes, impacting our
InnovaMatrix
®
product.
The six individual scenarios took no
account of any corporate mitigating
actions available to and within control
of the Directors. For combined scenarios,
where required, controllable corporate
mitigations have been applied through
adjustments to the Group’s strategy
and other means in the normal course
of business, for example, reducing
operational capital investment. In
the Board’s estimation, these events
would not plausibly occur to a level of
materiality that, in themselves, would
endanger the Group’s viability.
This assessment was informed by
Management’s and the Board’s
combined judgement as to the potential
financial impact (particularly liquidity
and debt financing financial covenants)
of these risks if they were to materialise,
together with their likelihood of
occurrence. The Board reviewed
and discussed the process undertaken
by management and also reviewed
the results of reverse stress testing
performed against the forecast to
determine the performance levels that
would result in a breach of covenants
or lack of liquidity. The outcome of this
test was considered implausible given
the Group’s strong global market
position and diversified portfolio of
products and mitigations available to
the Board and management.
In addition, the Board undertook
an independent review of market
information, including investors’ and
analysts’ views on the future viability
of the Group and market prospects.
This review was undertaken to ensure
that where there was an external view or
information that was contradictory to
the views of Management, the Board
understood the rationale for the
difference of opinion and agreed with
Management’s view. This independent
review and the scenario tests enabled
the Board to conclude on the Group’s
viability and resilience.
Viability statement
Having assessed the Group’s principal risks
and uncertainties, and the consolidated
financial impact of sensitivity analysis,
including any corporate mitigating actions
available to the Group (that can be
deployed in the unlikely event that two of
the scenarios occur at the same time), plus
the Group’s level of cash generation and
existing financing facilities, and the timing
of the forecast peak cash outflows, the
Board has determined that it has a
reasonable expectation that the Group
will be able to continue to operate within
its existing bank covenants and meet its
liabilities over the Viability Period to
December 2028.
The Group’s Going Concern statement
is detailed on page 138.
The Strategic report comprising pages
1 to 77 was approved by the Board on
23 February 2026.
Jonny Mason
Chief Executive Officer
Fiona Ryder
Chief Financial Officer
Scenarios
Linkage to principal risks on pages 70 to 74
Impacts from a significant manufacturing incident modelled on a plant fire
–
Impact on supplying customers before plant production is restored
–
Reduced production or extended period of shut down
–
Loss of sales could have a material adverse impact on the Group’s reputation
–
Impact of supply disruption
–
Operational resilience and quality
Impacts from a significant business interruption, linked to an extreme climate event at an important
supply chain location
–
Impact on supplying customers before critical national infrastructure and plant production is restored
–
Impact of supply disruption from reduced production or extended period of shut down
–
Loss of sales could have a material adverse impact on the Group’s reputation
–
Operational resilience and quality
Impacts from a significant cyber incident producing a significant interruption
–
A significant data privacy breach, leading to a regulatory penalty and fine, and subsequent costs for
investigation and remediation
–
Cyber and information security
–
Operational resilience and quality
–
Legal, compliance and privacy
Impacts from significant regulatory issues in a key product line
–
Significant breach of regulatory compliance in a product line
–
Reduced production and loss of sales due to adverse impact on the Group’s reputation
–
Impact of supply disruption
–
Legal, compliance and privacy
–
Innovation and regulatory
–
Operational resilience and quality
Impacts from pressure on public finances
–
Significant reimbursement reduction in a major market resulting in adverse change to pricing and/or
coverage
–
Sustained lower key markets growth and payment collection challenges
–
Customer and markets
–
Political and economic environment
Impact from macroeconomic forces and/or sanctions restricting access to key global markets
–
Failure to deliver stated growth targets in a key global focus market
–
Supply chain issues to our manufacturing and distribution from the affected key global focus market
–
Customer and markets
–
Political and economic environment
78
Convatec Annual Report and Accounts 2025
Governance
Chair’s governance statement
“A robust governance framework is
crucial to Convatec’s ongoing success”
Through our established approach
to corporate governance, the Board
supports Convatec in achieving delivery
of long-term, sustainable growth.
We do so by actively engaging with
stakeholders, and with firm commitment
to living our values, and ensuring our
culture and responsible business
practices are embedded.
Our key Board activities during 2025
are summarised below and are set out
in more detail throughout this
Governance report.
Overseeing Convatec’s strategy
and culture
A clear strategy, an appropriate capital
allocation policy and a robust
governance framework are crucial to
Convatec’s ongoing success. As a Board,
we have focused on Convatec’s strategy
to ensure that there is organic revenue
growth across all care categories,
together with strong innovation
pipelines, further operating margin
expansion and adjusted earnings per
share (EPS) growth. In 2025, the Board
approved several capital expenditure and
capital allocation decisions such as
research and development (R&D) and
manufacturing sites investment, a $300m
share buyback programme and the
issuance of $500m senior unsecured
notes. Read more about this on page 88.
We have also overseen the
implementation of our refreshed people
strategy, aiming to foster an engaging,
inclusive and high-performing culture,
which enables colleagues to contribute
meaningfully and achieve their potential.
Further details of Board-level workforce
engagement, including Sharon O’Keefe’s
work as Workforce Liaison Champion,
can be reviewed on pages 86 and 90.
Board performance
As a Board, it’s important that we reflect
on our own performance and consider
ways to improve our processes and
conduct to help ensure that we are
operating effectively. In 2025, we
conducted a questionnaire-based
performance review of the Board
and Board Committees, externally
facilitated by Lintstock. Details of the
process, recommendations and actions
are on page 89.
AGM and Remuneration Policy
Our 2025 Annual General Meeting (AGM)
was held as a hybrid meeting, enabling
shareholders to participate in person or
remotely, and our 2026 AGM will be the
same. At our 2025 AGM, shareholders
voted 67.04% in favour of our Directors’
Remuneration Policy (the Policy) and
75.64% in favour of the Convatec Group
Omnibus Incentive Plan. The Policy is
designed to drive retention of our
senior leadership and provide market
competitive reward contingent on
delivery of robust business performance.
Compliance with the UK Corporate
Governance Code
The Board considers that, during 2025,
the Company applied the principles
and complied with the provisions of
the Financial Reporting Council’s (FRC)
2024 UK Corporate Governance Code
(2024 Code) other than provision 41,
employee engagement on executive
remuneration. Further details can
be found on page 79.
2026 Board priorities
Convatec will continue to deliver on and
evolve our strategy in 2026, led by the
Board working closely with management.
As we continue to execute our governance
obligations on behalf of all stakeholders,
we do so enabled by the Company’s
strongest ever innovation pipeline and
supported by talented teams across the
business. We look forward to meeting and
working with colleagues in 2026 to bring
our vision to life,
pioneering trusted
medical solutions to improve the lives
we touch
.
Dr John McAdam CBE
Chair
23 February 2026
Board attendance
Directors’ attendance at Board meetings held during the year is outlined below:
Director
Member since
Scheduled meeting
attendance
Ad hoc meeting
attendance
John McAdam
September 2019
6/6
4/4
Jonny Mason
March 2022
6/6
4/4
Fiona Ryder
1
November 2025
1/1
0/0
Brian May
March 2020
6/6
4/4
Margaret Ewing
August 2017
6/6
3/4
2
Constantin Coussios
September 2020
6/6
4/4
Heather Mason
July 2020
6/6
2/4
2
Kim Lody
February 2022
6/6
4/4
Sharon O’Keefe
March 2022
6/6
4/4
1. Ms Ryder joined the Board in November 2025.
2. Ms Ewing and Ms Mason were unable to attend these ad hoc meetings called at short notice due to prior
business commitments.
Corporate governance
at Convatec
79
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Compliance with the 2024 UK Corporate Governance Code
Throughout 2025, we have complied with the 2024 UK Corporate Governance Code, other than provision 41. The Remuneration Committee has
not undertaken consultation with the workforce when considering executive remuneration. The Committee has, however, considered wider pay
practices at all levels across the Group and all employees have the opportunity to provide feedback on pay and other issues. The Committee is
mindful of this when applying salary increases. Page 105 of the Remuneration Committee report provides further details of our engagement
activities. The full 2024 Code is available on the FRC’s website at www.frc.org.uk.
Principles
Pages and/or website
Board leadership
and company
purpose
Promoting long-term sustainable success
and value
Key Board activities pages 84 and 85, matters reserved for the
Board can be found on our website www.convatecgroup.com/
investors/governance/
Purpose, value, strategy and embedding of culture
Our vision, strategy and values page 7, People strategy and culture
page 39, Chair’s statement page 6
Reporting on decisions and outcomes in the
context of the Company’s strategy and objectives
Key performance indicators pages 12 and 13, Governance report
pages 78 to 103
Shareholder and other stakeholder engagement
Engaging stakeholders pages 86 to 87, Section 172 statement and
Key Board decisions page 88, significant votes against page 105
Workforce policies and practices
People and culture pages 38 to 41, Audit and Risk Committee
report page 99
Division of
responsibilities
Chair role and responsibilities
The Board’s key roles and responsibilities can be found on our
website www.convatecgroup.com/investors/governance/
Board composition and independence
Board biographies pages 80 and 81, the Board’s key roles and
responsibilities can be found on our website www.convatecgroup.
com/investors/governance/, Nomination Committee report
page 93
Time commitment, constructive challenge and
strategic guidance
Nomination Committee report page 91, Board performance
review page 89
Board effectiveness and efficiency
Key Board activities pages 84 and 85, Board performance review
page 89, Company Secretary page 123
Composition,
succession and
evaluation
Board appointments and succession plans
Nomination Committee report pages 91 to 93, Board Inclusion
Policy can be found on our website www.convatecgroup.com/
investors/governance/
Board skills, experience, knowledge and tenure
Board biographies, including skills and experience pages 80 and
81, Nomination Committee report page 93
Board evaluation and composition, diversity and
effectiveness
Board performance review page 89
Audit, risk and
internal control
Independence and effectiveness of internal and
external audit functions, integrity of financial and
narrative statements
Audit and Risk Committee report pages 101 to 103
Fair, balanced and understandable assessment of
the Company’s position and prospects
Audit and Risk Committee report page 95
Risk management and internal controls
Principal risks pages 70 to 74, Audit and Risk Committee report
pages 98 to 100
Remuneration
Remuneration policies and practices
Directors’ Remuneration report pages 104 to 121, the
Remuneration Policy can be found in the 2024 Annual Report on
our website www.convatecgroup.com/investors/results-centre/
Procedure for developing remuneration policy
Directors’ Remuneration report page 105
Independent judgement and discretion when
authorising remuneration outcomes
Directors’ Remuneration report pages 104 to 121
80
Convatec Annual Report and Accounts 2025
Governance
Board of Directors
Experienced
leadership
A Board with proven leadership capabilities
and strong healthcare, operational and
financial skills and experience
Jonny Mason
Chief Executive Officer
Date of appointment:
March 2022 as Chief
Financial Officer (November 2025 as Chief
Executive Officer, and August 2025 as Interim
Chief Executive Officer)
Independent:
No
Relevant skills and experience:
Jonny has
more than 25 years’ leadership experience
and is highly regarded for his contribution
to Convatec’s successful transformation and
turnaround. Jonny has extensive experience
in leading publicly listed and international
businesses. He brings diverse strategic
enterprise transformation and operational
leadership experience, combined with deep
financial acumen and strong customer
orientation. Before joining Convatec as CFO in
2022, Jonny was CFO of Dixons Carphone PLC
(now known as Currys Plc) from 2018 to 2021,
CFO of Halfords PLC from 2015 to 2018, CFO
of Scandi Standard AB, CFO at Odeon and UCI
Cinemas and FD of Sainsbury’s Supermarkets.
Current external appointments:
Member
of INSEAD Board of Directors.
Dr John McAdam CBE
Chair
N*
Date of appointment:
September 2019
Independent:
Yes (on appointment)
Relevant skills and experience:
John is a
highly experienced Chair and Board member
with over 20 years’ service as a board director,
having previously been Chair of Rentokil Initial
plc and United Utilities Group plc, and a
Non-Executive Director of several FTSE 100
and US companies. John also has an extensive
track record of leading and implementing
transformation strategy, including as Chief
Executive of ICI plc between 2003 and 2008.
Prior to that he spent more than two decades
at Unilever plc, holding a number of senior
management positions. John was awarded
a CBE in 2020 for his services to business.
Current external appointments:
None.
Fiona Ryder
Chief Financial Officer
Date of appointment:
November 2025
(August 2025 as Interim Chief Financial Officer,
CELT member and standing Board attendee)
Independent:
No
Relevant skills and experience:
Fiona is a
seasoned finance leader with a strong track
record in global businesses, having led finance
functions while based in the UK, US and
Singapore. Having joined the business in 2022
as Group Financial Controller, she has played
a pivotal role in delivering Convatec’s focus on
simplification and productivity, and has been
fundamental to the success of the FISBE
strategy. After qualifying as an accountant
with KPMG, Fiona spent two decades at BP
where she held roles including VP, Financial
Accounting, Control and Reporting and Chief
of Staff to the Chief Financial Officer of their
downstream business. She also worked for the
Castrol global lubricants business during her
time at BP where she held a variety of
commercial finance and performance roles.
Current external appointments:
None.
1
2
3
4
5
6
7
8
9
1
Sharon O’Keefe, Non-Executive Director
4
Jonny Mason, Chief Executive Officer
7
Heather Mason, Non-Executive
Director
2
Kim Lody, Non-Executive Director
5
Fiona Ryder, Chief Financial Officer
8
Margaret Ewing CBE, Senior Independent
Director
3
Brian May, Non-Executive Director
6
Dr John McAdam CBE, Chair
9
Prof Constantin Coussios OBE,
Non-Executive Director
81
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Prof Constantin
Coussios OBE
Non‑Executive Director
N
R
Date of appointment:
September 2020
Independent:
Yes
Relevant skills and experience:
Constantin
is an internationally recognised key opinion
leader with a track record of translating
research into commercial technologies and
was awarded an OBE in 2022 for his services
to Biomedical Engineering. Constantin has
significant experience in drug delivery devices
and technologies, previously leading the
Oxford Centre for Drug Delivery Devices,
a cross-disciplinary centre working with
pharmaceutical and medical device companies
and the NHS. Other areas of deep knowledge
and experience include antimicrobial
technologies and advanced wound care,
including as co-investigator of a national
programme on antibacterial technologies
beyond antibiotics. Constantin was Founder
and Director of OrganOx Limited until it was
bought by Terumo Corporation in 2025.
Current external appointments:
Director
of the Institute of Biomedical Engineering,
University of Oxford, Professorial Fellow
of Magdalen College, University of Oxford,
Founder and Director of OxSonics Limited and
OrthoSon Limited, and Trustee of the Oxford
Transplant Foundation.
Brian May
Non‑Executive Director
AR
N
R*
Date of appointment:
March 2020
Independent:
Yes
Relevant skills and experience:
Brian is a
chartered accountant with a strong financial
and international business background having
previously held the role of CFO of Bunzl plc from
2006 to 2019. Prior to that, Brian held a number
of senior finance roles with Bunzl, including
divisional Finance Director, Group Treasurer and
Head of Internal Audit. He is also an experienced
non-executive director, having held previous
roles at United Utilities Group PLC between
2012 and 2021, where he was also Chair of the
Audit Committee. Brian has extensive
experience in strategic initiatives to deliver
growth and sustained shareholder returns.
Current external appointments:
Non-Executive Director and member of the
Nominations and Governance Committee and
Audit Committee of Ferguson Enterprises Inc.
and Non-Executive Director and Chair of the
Audit and Risk Committee of OFI Group Limited.
Margaret Ewing CBE
Senior Independent
Director
AR*
N
Date of appointment:
August 2017
Independent:
Yes
Relevant skills and experience:
Margaret is a
chartered accountant with significant financial
and executive experience, having been
Managing Partner of Deloitte LLP and CFO
of BAA plc. Her extensive audit and risk
management experience enables Margaret
to lead the Audit and Risk Committee in
providing robust and constructive challenge
to the external auditor and management on
accounting, tax, treasury, ESG and risk
management issues. Margaret has strong
board experience, having previously served
as a Non-Executive Director of Whitbread plc
and Standard Chartered plc, and CFO of BAA
plc and Trinity Mirror plc (now Reach plc).
Current external appointments:
Non-Executive Director, Chair of the Audit
and Risk Committee and member of the
Nomination Committee of ITV plc.
Non-Executive Director, and member of
the Audit and Compliance Committee and
Nominations Committee of International
Consolidated Airlines Group, S.A.
Heather Mason
Non‑Executive Director
AR
N
Date of appointment:
July 2020
Independent:
Yes
Relevant skills and experience:
Heather has
significant international healthcare experience
leading fully integrated global businesses.
Heather spent 27 years with Abbott
Laboratories where she held a number
of global senior operational and strategic
leadership roles, including Senior Vice
President of Abbott Diabetes Care and most
recently Executive Vice President of Abbott
Nutrition. Heather also has a proven track
record of overseeing the development of
commercially viable new product pipelines
and brand building, as well as international,
commercial and operational experience.
Current external appointments:
Chair
of Assertio Therapeutics, Inc. and SCA
Pharmaceuticals, LLC, and Non-Executive
Director of Immatics, Inc. and Pendulum
Therapeutics, Inc.
Kim Lody
Non‑Executive Director
N
R
Date of appointment:
February 2022
Independent:
Yes
Relevant skills and experience:
Kim has
extensive healthcare, reimbursement
and MedTech experience, specialising in
commercial strategy, product innovation,
branding, business development and growth.
Kim also has deep leadership experience
gained through previous roles such as
President and CEO of NYSE-listed Sonida
Senior Living Corporation, President of
GN Hearing North America, President of
Resound US, President of Coloplast Chronic
Care US, Chief Operating Officer of Senior
Home Care and Executive Vice President and
Chief Marketing Officer of Gentiva Health
Services.
Current external appointments:
Chair
of Nobi N.V., Non-Executive Director of Ball
Ventures, Mozarc Medical and Geauga
Hunger Task Force.
Sharon O’Keefe
Non‑Executive Director
N
R
Date of appointment:
March 2022
Independent:
Yes
Relevant skills and experience:
Sharon
brings over 40 years’ of healthcare and
executive experience, with a focus on driving
quality, efficiency and innovation. She was
previously President and Chief Operating
Officer of UChicago Medicine. Sharon also
brings a wealth of non-executive director
experience, having previously served as a
Non-Executive Director of Aviv REIT and of
Vocera Communications. Sharon holds an M.S.
in Nursing Administration from the Loyola
University of Chicago and a B.S. in Nursing
from Northern Illinois University.
Current external appointments:
Non-Executive Director of Adtalem Global
Education Inc.
John
McAdam
Jonny
Mason
Fiona
Ryder
Margaret
Ewing
Brian
May
Constantin
Coussios
Kim
Lody
Heather
Mason
Sharon
O’Keefe
Board experience
Corp. transactions and M&A
ESG
Finance
Global
Healthcare
Leadership
Operational
Strategy, transformation
and organisation design
Technology and Innovation
Advanced
Director demonstrates
significant skill and
knowledge and/or
previous experience.
Expert
Director demonstrates
extensive experience,
identifiable by occupation,
profession and career.
Skills and experience
N
Nomination Committee
AR
Audit and Risk Committee
R
Remuneration Committee
* denotes Chair of the respective Committee
82
Convatec Annual Report and Accounts 2025
Governance
Convatec Executive Leadership Team (CELT)
CELT is responsible for the management and performance of Convatec
with frequent reporting to, and oversight by, the Board
Board membership
Biographical details for Jonny Mason, CEO, and Fiona Ryder, CFO, are
provided on page 80.
More detailed CELT member biographical information is available at
www.convatecgroup.com
1
2
3
4
5
6
8
7
9
10
11
12
13
1
Evelyn Douglas,
Chief Strategy & Business
Development Officer
6
Fiona Ryder,
Chief Financial Officer
11
David Shepherd,
Chief Commercial Officer
2
James Kerton,
General Counsel & Company
Secretary
7
Tanja Dormels,
President & Chief Operating Officer,
Advanced Wound Care
12
Dr Divakar Ramakrishnan,
Chief Technology Officer and Head
of Research & Development
3
Anne Belcher,
President & Chief Operating Officer,
Global Emerging Markets
8
Jonny Mason,
Chief Executive Officer
13
Mark Jassey,
President & Chief Operating Officer,
Continence Care and Home
Services Group
4
Kjersti Grimsrud,
President & Chief Operating
Officer, Infusion Care
9
Walter Morse,
Chief Quality & Operations
Officer (Interim)
5
Bruno Pinheiro, President & Chief
Operating Officer, Ostomy Care
10
Emma Rose,
Chief People Officer
83
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Dr Divakar Ramakrishnan¹
Chief Technology Officer and Head
of Research & Development
Appointed to CELT:
2020
Divakar joined Convatec in 2020. Prior to this,
Divakar served as Chief Digital Officer and
Vice President for Eli Lilly’s Drug Delivery,
Device and Digital Health groups, where he
led a global R&D team focused on developing
innovative and digitally enabled devices to
improve patient care. Divakar’s career in
healthcare spans more than 20 years. He
served as Eli Lilly’s Vice President of
Manufacturing Science and Technology, a
role in which he oversaw all the company’s
process development across its entire
product portfolio.
Mark Jassey
President & Chief Operating Officer,
Continence Care and Home
Services Group
Appointed to CELT:
2024
Mark was promoted to President & Chief
Operating Officer, Continence Care and Home
Services Group, and joined CELT in October
2024. Mark joined 180 Medical in 2007, which
became part of Convatec in 2012, and has held
a variety of leadership roles, including most
recently Chief Commercial Officer, HSG and VP,
Head of Global Marketing – Continence Care.
Prior to joining Convatec, Mark worked for
several years in retail and logistics.
Kjersti Grimsrud
President & Chief Operating Officer,
Infusion Care
Appointed to CELT:
2018
Kjersti joined Convatec in 2018. Previously,
Kjersti was a member of the founding team
at Axis-Shield and appointed President Europe
and the Middle East and President International
at Alere, Inc. following its acquisition. Kjersti’s
25 years of experience in the MedTech sector
includes roles within diabetes care, including
General Manager, Operations, Sales,
Marketing and R&D positions.
Emma Rose¹
Chief People Officer
Appointed to CELT:
2024
Emma joined Convatec in April 2024. She was
previously Chief Human Resources Officer at
Travis Perkins Plc, the UK’s largest distributor
of building materials with more than 20,000
colleagues in the UK and Europe. Emma is
a seasoned HR leader and has had a
distinguished career spanning more than two
decades across industries, from Kerry Foods
and InterContinental Hotels Group to
Mondelez International, Cadbury, Coca-Cola
and M&S. She has a strong track record
delivering transformational people and
culture strategies.
Walter Morse¹
Chief Quality & Operations Officer
(Interim)
Appointed to CELT:
2025
Walter joined Convatec in 2022 as Head of
Global Manufacturing, before being
appointed to lead the Global Quality and
Operations team in December 2025 on an
interim basis. Walter brings over 30 years’
experience in leading large and complex
medical device operations, having held senior
roles at Hill-Rom as VP, Global Engineering
Operations, Haemonetics as VP, Global
Manufacturing Operations and Covidien as
Director of Engineering.
James Kerton¹
General Counsel & Company
Secretary
Appointed to CELT:
2024
James rejoined Convatec in May 2024 as
General Counsel and Company Secretary,
having previously held the role of VP, Deputy
General Counsel from 2021 to 2022.
James was previously General Counsel and
Company Secretary at Zigup plc and before
that held senior leadership roles at London
Stock Exchange Group plc. James brings
significant listed company and legal
experience, and previously qualified and
practised as a lawyer at Freshfields LLP.
David Shepherd
Chief Commercial Officer
Appointed to CELT:
2018
David joined Convatec in 2018, having
previously worked for Johnson & Johnson
for 26 years where he held a variety of sales,
marketing, strategic and operational roles,
most recently being Vice President, Southern
EMEA with responsibility for 15 businesses
across the region. Prior to that, he was the
US President for Cardiovascular and
Speciality Services.
Tanja Dormels
President & Chief Operating Officer,
Advanced Wound Care
Appointed to CELT:
2025
Tanja joined Convatec in 2019 and has held
various leadership roles within Advanced
Wound Care. In October 2025, she was
promoted to President & Chief Operating
Officer, Advanced Wound Care. Tanja has
spent over 25 years in leadership roles across
the medical technology, biopharma and
pharmaceutical industry. Prior to Convatec,
Tanja held leadership roles with companies
including Sandoz and Novartis, and
previously served on the Board of HEXAL AG,
a German pharmaceutical company, part of
the Sandoz Group.
Bruno Pinheiro
President & Chief Operating Officer,
Ostomy Care
Appointed to CELT:
2021
Bruno was appointed as President & Chief
Operating Officer, Ostomy Care, in May 2022.
Bruno worked for Bristol Myers Squibb before
the company sold Convatec in 2008. Bruno’s
diverse experience spans across Sales,
Business Development & Global Emerging
Markets. Prior to his appointment as interim
President & Chief Operating Officer, Global
Emerging Markets, Bruno led a diverse team
across eight countries in his role as Head of
Convatec’s Latin America business.
Anne Belcher
President & Chief Operating Officer,
Global Emerging Markets
Appointed to CELT:
2022
Anne joined Convatec in 2022 after spending
30 years at GlaxoSmithKline (GSK), where she
latterly served as Senior Vice President &
General Manager, Nordics. She originally
joined GSK as a sales representative in New
Zealand in 1991 and went on to hold global
senior roles. Anne has experience in diverse
market environments, including both mature
and emerging markets across Asia Pacific,
EMEA and the Americas.
Evelyn Douglas¹
Chief Strategy & Business
Development Officer
Appointed to CELT:
2020
Evy has in-depth expertise in the MedTech
sector, having spent 20 years at Becton,
Dickinson and Company (BD) prior to joining
Convatec in 2020. At BD, she was Senior Vice
President of Corporate Development and
Strategy, where she supported the company
to build its capabilities, focusing on
opportunities for partnerships, acquisitions
and divestitures. Prior to her role in corporate
development at BD, Evy held senior positions
in their legal team.
1. Members of the ESG Steering Committee.
84
Convatec Annual Report and Accounts 2025
Governance
Board activity and actions
Key Board activities
Throughout 2025, the Board has overseen and regularly reviewed the
Group’s financial performance, risk and controls, strategic initiatives
(including material capital expenditure, M&A and integration), relevant
regulatory and market developments, people matters and culture.
The Board seeks to engage with stakeholders and considers their
interests when making decisions
We uphold strong governance through our culture of ‘doing what’s
right’, one of Convatec’s core values. This reflects our vision:
pioneering trusted medical solutions to improve the lives we
touch
and our promise to be
forever caring
. We continue to invest in
leadership and sustain high employee engagement, with the Board
regularly briefed on people matters.
During the strategy session in June 2025, the Board and Convatec
Executive Leadership Team (CELT) reviewed progress on the
refreshed people strategy designed to support accelerated growth
and deliver the FISBE (Focus, Innovate, Simplify, Build, Execute)
strategy. This included reviewing the strategic pillars of the people
strategy, aligned to our core values, and actions planned against
each pillar in 2025 and beyond. The strength of talent built in recent
years gives us confidence in our continued success.
To assess and monitor culture and how our core values have been
embedded, the Board uses indicators including:
–
Regular briefings from the Chief People Officer
–
Employee survey results
–
Employee focus groups chaired by Sharon O’Keefe, our
designated Non-Executive Director Workforce Liaison Champion
– read more on page 90
–
Site visits, such as Non-Executive Director Constantin Coussios’
visit to Boston
–
Talent assessments of CELT and direct reports
–
Health and safety performance
–
Compliance training and matters raised through the Group’s
whistleblowing procedures
The Executive Directors also participated in global town halls
throughout the year to share key updates, participate in live
Q&As and hear inspirational stories from patients, healthcare
professionals (HCPs) and caregivers about how our products
transform lives.
Employee surveys provide insights on workforce sentiment and
morale and can help identify any issues or trends. For example,
we use Peakon Employee Voice by Workday, which uses employee
Net Promoter Score (eNPS) methodology. The Board received
training on eNPS to assist in interpreting data, which informs
actions to strengthen Convatec’s engaging, inclusive and high-
performing culture.
Additional areas of focus and activities by month include:
Approval:
Capital
investment for
infusion care
capacity expansion
to meet accelerating
demand
Announcement:
Four-month trading
update
Event:
2025 Annual
General Meeting
Announcement:
EU
and UK regulatory
approval for
ConvaNiox™,
confirming initial
market launch later
in 2025, ahead of full
launch in 2026
Event:
Board and
CELT participate in
a two-day strategy
session
Announcement:
2024 full-year results
and dividend
declared to
shareholders
Deep dive:
ConvaNiox™ launch
and the route to
regulatory approval
reviewed and
endorsed
Approval:
Launch
of UK Sharesave,
International
Sharesave and US
Employee Stock
Purchase Plan
Announcement:
2025 half-year
results and dividend
declared to
shareholders
Jan
Feb
Mar – Apr
May
Jun
Jul
Board oversight of people and culture
85
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Announcement:
CEO,
Karim Bitar, took a medical
leave of absence. Jonny Mason
appointed Interim CEO
(formerly CFO) and Fiona Ryder
appointed Interim CFO
(formerly Group Financial
Controller)
Approval and announcement:
Non-discretionary share
buyback programme to return
up to $300m of surplus capital
to shareholders
Event:
Workforce Liaison Champion,
Sharon O’Keefe, hosts employee focus
groups in London
Event:
Non-Executive Director,
Constantin Coussios, visits Boston
with CELT to discuss current and
future product development pipeline
and engage with Technology and
Innovation teams exploring key
technologies and research projects
underway
Approval and announcement:
Issuance of $500m senior unsecured
notes by 180 Medical, Inc.
Announcement:
CEO, Karim Bitar, on
a medical leave of absence, passes
away. Interim leadership
arrangements remain in place
Approval:
New
appointments
to CELT,
strengthening the
leadership team to
support growth
Approval and
announcement:
Board approves
appointment of
Jonny Mason as CEO
and Fiona Ryder as
CFO, following
oversight of interim
leadership and
succession process
Announcement:
Ten-month trading
update
Approval:
2026 budget
Aug
Sep
Oct
Nov
Dec
Advanced Wound Care innovation and leadership
The Board oversees the delivery of the FISBE strategy across our four care categories,
monitoring progress on simplification and productivity initiatives, the continued
strengthening of innovation and new product pipelines. In June 2025, the Board approved the
five-year strategic plan for Advanced Wound Care (AWC), including a review of the product
innovation roadmap. Key AWC priorities include expanding recent launches of ConvaFoam™
and InnovaMatrix
®
into new markets and advancing the pipeline through products such as
ConvaVac™, Aquacel™ ConvaFiber™ and ConvaNiox™.
Strong leadership is critical to executing the Company’s vision and the FISBE strategy, which
is critical to our long-term success. This year, we endorsed two internal appointments to CELT,
which included Tanja Dormels as President & Chief Operating Officer for AWC. Tanja’s
promotion demonstrates Convatec’s commitment to talent development, having been
previously identified by the Nomination Committee as a suitable internal candidate.
In June 2025, the Board and CELT held a two-day strategy session to
review FISBE strategic goals and priorities, with participation from
relevant business leadership teams and deep dives into categories
and functional strategic areas.
Artificial Intelligence (AI) featured prominently, reinforcing how
digital and AI underpin the FISBE strategy. A session led by an
external generative AI expert explored opportunities to drive
innovation, enhance productivity and improve efficiency within the
business. Following Board endorsement, Convatec has advanced
FISBE’s AI capabilities by:
–
Establishing dedicated AI governance structures, including an AI
Working Group and Steering Group, to ensure responsible
adoption and oversight of AI initiatives
–
Deploying enterprise-scale AI solutions such as Microsoft Copilot,
SmartCat (a translation and localisation platform) and Synthesia
(a video generation platform) and expanding the deployment of
AI-powered tools like Talkdesk in customer interaction centres
–
Prioritising AI adoption in key business domains, including
Commercial, Quality, Supply Chain and Finance
–
Investing in upskilling and AI literacy across the organisation,
with a goal of 80% of target users actively using AI tools within
18 months, supported by internal communities and safe
experimentation environments
–
Embedding AI into the digital core of our operations, to drive business
transformation, operational excellence and customer satisfaction
These initiatives accelerate digital transformation, simplify and
standardise our operations and position our vision to capture new
growth opportunities through secure, compliant and scalable AI
adoption. The Board and management remain committed to
ensuring our AI strategy delivers sustainable value for our
customers, colleagues and shareholders, and that the risks related
to AI (both internal and from external impacts) are managed closely.
Strategy review and accelerating digital transformation
86
Convatec Annual Report and Accounts 2025
Governance
Stakeholder relationships inform our
strategy and decision-making
Engaging
stakeholders
The people who rely on our trusted medical solutions
Customers
and patients
Our products and services are
designed for and delivered to
our customers and patients.
They need:
–
Safe, effective, accessible
and innovative products
–
Support and information
Convatec:
–
Customer surveys for HCPs, key business-
to-business (B2B) customers and end-users
(see page 34)
–
me+ support programme (see page 36)
–
Perspectives on living with chronic
conditions thought leadership report
(see page 4)
–
Responding to consumer questions,
feedback and complaints (see more
on CPM on page 36)
Board:
–
Research, case studies and feedback
from customers and patients
Convatec:
–
Customer net promoter scores provide
insight for local and aggregated response,
and continuous improvement
–
Strengthened community of users
–
Incorporation of relevant consumer
feedback in our research and
development processes
–
Tracking and management
of customer feedback
Board:
–
Insight into customer needs and market
trends along with opportunities for
innovation and therapy area insights,
informs strategy and helps shape
research and development (R&D)
investment, manufacturing capacity
and quality
Direct enablers who help us deliver
Healthcare
professionals
(HCPs)
HCPs provide valuable insight
into our product development
and help ensure that our
products reach a wide range
of customers and patients.
They need:
–
Products and services that
meet patient needs and
benefit the healthcare
delivery system
–
Fair pricing
–
Medical education
Convatec:
–
See above for customer surveys and
complaint handling
–
Targeted research and randomised control
trials (see page 36)
–
Medical education investment in Convatec
Learning platform and assets
Board:
–
Research, case studies and feedback
from HCPs
Convatec:
–
Product and service insights inform
our development processes and our
day-to-day operations
–
Generated and shared knowledge
through publications, presentations,
and medical education, strengthening
our reputation for innovation
Board:
–
Insights gained from discussions with
patients and HCPs are considered in
Convatec’s strategy and decision making
Our people
Our colleagues bring our
vision, values and strategy to
life, fostering an engaging and
supportive culture that enables
them to deliver for customers
and patients. They need:
–
Safe, healthy, ethical and fair
working environments
–
Inclusion and wellbeing
–
Ability to make a difference
to the people who rely on our
products and services
–
Training and development
–
Career growth opportunities
–
Attractive reward and
recognition
Convatec:
–
Colleague engagement surveys (see
page 39)
–
Company-wide interactions via our
intranet, app and regular town halls,
including our biannual Convatec Live event.
Customer and patient stories are shared
across all channels
–
Six colleague-led communities that are
open to everyone (see page 39)
–
Union representation and works councils
(where relevant)
Board:
–
Town halls led by the Executive Directors
–
Colleague focus groups attended by
the Board Workforce Liaison Champion,
(see page 90)
–
Non-Executive Director site visits, e.g.
Constantin Coussios’ visit to Convatec’s
Technology Centre in Boston with CELT
Convatec:
–
Employee net promoter scores and
insights have helped us evolve our people
strategy, talent processes and focus on
development/training programmes,
with managers able to directly respond
to colleague comments
–
Ensuring fair labour practices
Board:
–
Provides first-hand insight into culture
and sentiment within the business
–
Supports broader strategic decisions
–
Employee share schemes, such as the
Sharesave launch, strengthens alignment
between colleague and shareholder interests
Suppliers and
other supply
chain partners
Our suppliers and partners
are critical to Convatec’s ability
to deliver our products and
services to our customers and
patients. They need:
–
Long-term relationships
–
Fair pricing and commercial
terms
–
Predictable business
–
Transparency on suppliers’
expected environment,
social and governance (ESG)
standards
Convatec:
–
Supplier due diligence, assessments,
audits and support of corrective actions
(see page 43)
–
Commercial dialogue
Board:
–
Regular briefings on suppliers and supply
chain partners through updates from the
Executive Directors and CELT
Convatec:
–
Strengthening relationships to meet
customer needs as we continue to scale
up and launch more products
–
Value chain emissions reduction and
risk reduction
Board:
–
Provides assurance that Convatec is
operating responsibly, ethically and
transparently
–
Ongoing monitoring helps weigh
the benefits against potential
adverse impacts on suppliers and
environmental considerations
Board activity and actions
continued
Stakeholder
group
Stakeholder
needs
Engagement
Outcomes
87
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Channel
partners¹
Our channel partners
are critical to ensure that
Convatec’s products and
services are available to
those with chronic conditions.
They need:
–
Effective, competitively
priced products
–
Fair pricing and commercial
terms
–
Continuity of supply
Convatec:
–
Commercial dialogue
–
Marketing activities
–
Tender processes
–
Improved standardisation of distributor
due diligence and compliance training
(see page 45)
–
Quarterly reviews with partners
Board:
–
Briefings on channel partners and B2B
customers periodically through updates
from the Executive Directors and CELT
Convatec:
–
Continued inclusion in tender processes
–
Development of valuable relationships to
address consumer needs
Board:
–
Enables the Board to consider channel
partners’ views and needs, given their
importance to Convatec’s strategy
and global manufacturing and
quality operations
B2B customers
Our B2B customers are critical
to ensuring that Convatec’s
innovative products can be
used with other companies’
own products to address
patient needs. They need:
–
Innovative products for use
with their own products
–
Long-term relationships
–
Fair pricing and commercial
terms
Convatec and the Board:
–
Commercial dialogue and partnerships
–
Regular meetings and presentations on
specific topics such as sustainability
Convatec and the Board:
–
Development of long-term partnerships,
including with AbbVie, focused on
addressing patient needs
–
Alignment on goals and commitments
–
Sharing of best practices on emissions
reduction
Investors and
debt providers
Our investors and debt
providers are critical to
supporting and maintaining
Convatec’s ability to operate
and deliver. They need:
–
Delivery of a clear corporate
strategy
–
Sustainable returns
–
Responsible business
practices
–
Cash flow to pay
dividends and service
debt obligations
Convatec and the Board:
–
Investor relations engagement
programme, with more than 280 investor
meetings, ten roadshows and participation
in nine conferences
–
Regular meetings with investors and
brokers on focused topics, such as
responsible business
–
Five meetings between the Chair and
investors on governance, covering matters
such as risk, colleague engagement,
remuneration, board composition and
succession planning
–
Meetings between the Remuneration
Committee Chair and investors to
discuss the proposed changes to the
Remuneration Policy
–
Board presentations from the brokers,
which consider investor sentiment
–
Relationship-led engagement with
debt providers
Convatec and the Board:
–
Engagement enables the Board to
communicate its strategy and financial
performance, as well as how Convatec
operates responsibly
–
Informs our responsible business areas
of focus, targets and initiatives, especially
related to risk reduction and value
creation
–
Investors’ feedback and insights
are taken into account by the Board in our
communications to shareholders
–
Feedback received from investors
shaped the Remuneration Policy that was
approved at the 2025 AGM
–
Share buyback programme returned
$300m of surplus capital to shareholders
–
Positive engagement with debt investors
led to high demand and attractive
pricing for the issuance of $500m senior
unsecured notes
Evaluators who hold us to account for our performance
Regulators
Regulatory bodies are critical
to our licence to operate and
ability to deliver for customers.
They need:
–
Adherence to legislation and
regulation
–
Proactive engagement when
challenges arise
Convatec and the Board:
–
Regular and ad hoc dialogue in relation to
product approvals and other matters
–
Commitment to working collaboratively
with the current US Administration,
including at the Centers for Medicare
& Medicaid Services (CMS), and their
contractors, in the best interests of patients
Convatec and the Board:
–
Implementation of responsible
and diligent business practices
–
Compliance with legislation and regulation
–
Help shape relevant industry
consultations
Governments
National and multinational
governments set out
requirements. They need:
–
Adherence to legislation
–
Investment
–
Responsible business/social
value practices
–
Employment
–
Income generation via taxes
Convatec and the Board:
–
Ongoing dialogue in relation to specific
matters, including industrial and life
sciences sector policy, market access and
corporate governance
–
In many cases, national governments and
government agencies are also important
payors for our products, making decisions
on reimbursement, payment, coverage
and coding for medical devices
Convatec and the Board:
–
Making a socio-economic contribution
to a range of stakeholders, including
through paying taxes as described
on page 47
Communities
Communities are core
to our people and planet
commitments. They need:
–
Employment opportunities
–
Safe and healthy
environment
Convatec and the Board:
–
Convatec sustainability internships
programme
–
Charitable partnerships and volunteering
through
forever caring
month campaign
(see page 47)
Convatec and the Board:
–
Building our reputation in our
communities and across broader society
–
Decarbonisation/net zero plans
Industry
bodies
Industry bodies help us to
ensure that our interests are
understood and effectively
communicated. They need:
–
High-quality input into
industry policies and
standards development
–
Proactive engagement in
relation to relevant issues
Convatec and the Board:
–
Membership of industry bodies and
participation in working groups related
to industry issues, including best practice
(see page 49 and 50)
–
Contributed responses to a range
of regulation and industry expectations
with partners
Convatec and the Board:
–
Sharing of best practices on key industry
issues
–
Helping to shape and standardise
relevant agendas and standards across
the industry, allowing for predictable and
fair scoring of tenders
1.
Including distributors, large buying organisations, integrated delivery networks, hospitals and national and regional payors.
Stakeholder
group
Stakeholder
needs
Engagement
Outcomes
88
Convatec Annual Report and Accounts 2025
Governance
Board activity and actions
continued
In accordance with Section 172 of the Companies Act 2006 (Section 172), the Group and its Directors act in the way that they consider in good
faith would most likely promote the success of the Company for the benefit of its shareholders as a whole, having regard to other stakeholders.
Throughout this report, we provide examples of how Convatec has taken into account the likely consequences of decisions in the long term,
fosters and builds relationships with stakeholders, understands the importance of engaging with our employees and gives consideration to
their interests, understands the impact of our operations on the communities in the regions where we operate and the environment we depend
upon and attributes important to behaving as a responsible business. The Board appreciates the importance of effective stakeholder
engagement and considers its stakeholders’ views in its decision making and in setting its strategy. The Board also understands the need to act
fairly between Convatec’s stakeholders. Although the Board’s decisions do not always impact all of our stakeholders to the same extent, by
having a process in place for decision making, the Board ensures that it has due regard for the interests of its stakeholders, including our
customers and patients, HCPs, our people, our suppliers and other supply chain partners, our channel partners, our B2B customers and our
investors and debt providers, when making decisions.
Details of our stakeholder engagement can be found throughout this report and in particular on pages 86 and 87. The below principal decisions
and activities provide specific examples of how the Board and its Directors have complied with Section 172 and have considered, individually
and collectively, stakeholder interests and impacts in making different decisions that support the implementation of Convatec’s strategy and
the delivery of our objectives now and in the longer term.
Capital allocation
The Board oversees capital allocation across Convatec in
line with our framework while balancing stakeholder
needs. Each Board decision considers Convatec’s financial
position and long-term viability to ensure future liabilities
could be met without a detrimental effect on any
stakeholder group. Decisions in 2025 included:
R&D investment:
ongoing investment in R&D to continue
strengthening our new product pipeline and technology
and innovation capabilities.
Manufacturing sites investment:
significant capital
expenditure projects to expand manufacturing capacity
and increase resilience by scaling core sites.
Share buyback:
a share buyback programme to return
up to $300m of surplus capital to shareholders.
Bond issuance:
the issuance of $500m senior unsecured
notes.
Executive Director appointments
The Board, upon recommendation of the Nomination
Committee, makes appointments to the Board. The
Nomination Committee also regularly reviews talent and
succession planning for the Board and CELT.
Following the news of Karim Bitar’s passing in October
2025, on 6 November 2025 we announced the
appointment of Jonny Mason as CEO and Fiona Ryder as
CFO with immediate effect. Jonny and Fiona had been in
position as interim CEO and CFO since 4 August 2025,
following Karim taking a period of medical leave. Read
more on page 92.
How the Board considered different stakeholders in
decision making and outcomes
Patients and HCPs:
Issuing
bonds to raise capital for
investment into expansion
projects and R&D, continuing to
strengthen the new product
pipeline and increasing
manufacturing capacity has the
potential to provide improved
care, greater choice and better
outcomes for patients living with
chronic conditions.
B2B customers:
Expanding
manufacturing capacity helps
B2B customers address their own
patients’ needs.
Investors:
Our innovation pipeline
drives the FISBE strategy and
supports sustainable, profitable
growth by diversifying our
product portfolio. From the share
buyback, investors benefit from a
higher earnings per share (EPS).
Our people:
Our colleagues
benefit from the increased
strength of our business, creating
more opportunities for career
development within a
larger-scale business.
Suppliers and distributors:
Supplier capabilities to meet
increased requirements for
quality, volume, price and
standards of raw materials was
considered before approving
core site expansion investments.
The expansion will provide
opportunities to build partnerships
with new and existing trusted
suppliers and our distribution
networks across the globe.
How the Board considered different stakeholders
in decision making and outcomes
Our people:
While external
candidates were considered
during the process, the Board
and Convatec prioritise
developing internal talent, with
a focus on a pipeline of senior
future talent and retention at
both executive and senior
leadership levels. For example,
Fiona was already identified as
a strong potential CFO successor,
and actively developed for the
past two years as part of ongoing
succession planning. The
strength of her team was
also considered, to ensure a
frictionless transition as roles
and responsibilities shifted.
Investors:
The Board recognised
the advantages of having a new
CEO and CFO (who have both
been with Convatec since early
2022) with significant knowledge
of our business and the market
in which we operate, providing
stability and continuity. Retaining
our top talent will also help
deliver the Group’s ongoing
strategy and create long-term
shareholder value.
Patients and HCPs
: Retaining
top talent to drive the business
forward and build on the
momentum we now see in place
will allow us to continue growing
our position and available
products in the four care
categories and 12 key markets
we operate in.
Key Board decisions in 2025
Convatec Group Plc Section 172 statement
89
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Board performance review
In 2025, the Board undertook a questionnaire-based review,
externally facilitated by Lintstock. Lintstock has no other
connection with Convatec or any of the individual Convatec
Directors. Lintstock analysed the results and provided reports
for the Board and Board Committees, with unattributed scoring
and comments. These were discussed at the Board and Board
Committee meetings, with each considering the outcomes and
any appropriate actions.
Individual Director performance review
The Chair led a performance review of each Director. This
included a review of Non-Executive Director time commitments
to the Company, and the Board is satisfied that each Director
has sufficient time to devote to discharging their
responsibilities as a Director of the Company.
Chair performance review
In line with prior years, the performance review of the Chair
was conducted by the Senior Independent Director (SID) in
discussion with all other Board members, other than the
Chair. The review confirmed the Chair has continued to
perform exceptionally well in all aspects of the role, providing
considerable value, support and guidance to management,
the Board and the wider business during a period of
unprecedented change in 2025.
The review highlighted that the Chair leads effective meetings,
with a focus on clarity and pragmatism in decision making. He
has a strong and constructive relationship with the two Executive
Directors (both new in position since November 2025), providing
appropriate challenge, support and wise counsel.
The key findings and actions from the 2025 Board performance
review and progress against actions from the 2024 Board
performance review are set out below.
Overall, it was found that the Board had shown a strong commitment to supporting the new CEO and CFO as they lead the next phase of
Convatec’s development. The Board was seen to benefit from an effective dynamic, with strong relationships among Board members and
with the management team.
Findings and actions for 2026
Board focus on growth
Maintain a strong focus on growth, with an emphasis on the key levers for accelerating progress and future opportunities. The Capital Markets
Day in April 2026 will demonstrate the plans for the next five years.
External insights
Regular updates on external insights to be provided to the Board, along with continuing to enhance the approach to monitoring and engaging
with key stakeholders and developments in the external environment.
Non-Executive Director succession
Continue to focus on Non-Executive Director succession and developing a longer-term plan for managing Board transition.
2025 Board performance review
Actions
Progress
Board focus on strategy
The Chair and the Company Secretary to review the Board meeting
forward planner, to ensure appropriate weight is given to strategic
plans and opportunities in the short, medium and long term.
During 2025, the Board agenda focused on reflecting the breadth
and depth of the strategic plan with reviews across all four business
categories of both organic and inorganic growth and accommodating
the diverse product roadmap at various timed stages of development
and implementation. Flexibility enabled the Board to respond quickly
to geopolitical changes. Execution excellence has and will continue to
be a key oversight by the Board when setting the agenda across all
strategic matters.
Board membership and succession planning
The Chair to ensure that the Nomination Committee is focused on
addressing future succession needs broadly and considering any
additional skill sets or diversity that could complement the Board.
Succession planning is discussed by the Nomination Committee
at least twice a year, and as required. In 2025, the Nomination
Committee considered these factors and recommended Jonny Mason
and Fiona Ryder for the roles of CEO and CFO, respectively. Plans for
Margaret Ewing’s succession have been discussed, and are ongoing
(see page 93 for further details).
Assessment of past decisions
CEO to lead structured sessions reviewing past decisions, including
an assessment of outcomes versus expectations and use of key
learnings as part of decision making for future strategic initiatives.
The Board regularly evaluate the risks, opportunities and progress
from past decisions when considering how new transformation
projects or initiatives should be implemented. For example, when
seeking approval for capital expenditure, management demonstrated
how improvements can be made in areas such as compliance,
customers and capacity.
Progress in relation to actions arising from the 2024 Board performance review
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Governance
Board performance review
continued
Q&A
with Sharon O’Keefe,
Workforce Liaison Champion
We asked Sharon to share more about her role...
I’ve been a Board member and Workforce Liaison Champion
since 2022. I hold regular engagement sessions with
colleagues and share feedback with Board colleagues,
reflecting perspectives, insights and areas of focus to
guide Board discussions.
How have you engaged with colleagues?
In 2025, I hosted a series of informal focus groups with
colleagues in our London collaboration hub. Colleagues
were drawn from cross-functional teams and tenure ranged
from less than a year to more than ten years’ service, with
broad gender and age demographics. First-hand feedback
helps me to gain a comprehensive view on our people and
culture. Colleagues shared stories of the personal impact
they have been able to make in their role and the practical
application of our strategy and what it means to them.
I’m always energised by the high degree of engagement
shown by colleagues and their active and open
contributions. I’ve also spent time reviewing our colleague
engagement survey insights and discussing reflections
with the Board (see page 84).
How have insights helped the Board from
perspectives you’ve heard?
There is strong recognition from colleagues of the
transformation Convatec has made, coupled with an
appetite to drive progress even further. I’ve been able
to reflect these insights in Board discussions as we review
how Convatec is managing change.
I’m also a Remuneration Committee (the Committee)
member, and insights from my engagement with colleagues
has been valuable in informing the work of the Committee.
For example, following discussions in the focus groups, the
Committee will review Convatec’s all-employee share plan
offerings in 2026 to explore how these could be widened to
further improve retention and engagement.
What are your key takeaways from your
engagement with colleagues?
What really stood out to me through this year’s engagements
was colleagues’ unwavering pride in what Convatec has
achieved, and a sense of strong alignment to our vision,
promise and strategy. This has been further evidenced
through increased internal succession and reduced voluntary
turnover. Colleagues have welcomed the investments in
training and development, and evolved talent practices
such as lateral moves and internal promotions.
As part of our annual strategy review cycle, I was pleased
to see how our refreshed people strategy is also making
a difference. In particular, the business has shaped a new
set of leadership behaviours, which we reviewed as a Board,
built with insights from colleagues across the Company.
These will be central to the Company’s commitment to
building purpose-led, performance-driven teams and
leaders. Through the time I’ve spent with colleagues,
I can see how these behaviours, coupled with our clear
vision, promise and values, will further enhance our
workplace practices and culture.
What are your plans for the year ahead?
I’m looking forward to attending the Global Leadership
meeting again in 2026, which takes place every two
years. This meeting brings together the Company’s top
100 leaders to review progress, performance and strategy.
I also plan to continue our focus group series and share our
engagement insights with the Board.
Engaging with our colleagues
91
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Committee membership, meetings and attendance in 2025
Director
Member since
Scheduled meeting
attendance
Ad hoc meeting
attendance
John McAdam (Chair)
September 2019¹
2/2
3/3
Margaret Ewing
May 2019
2/2
2/3²
Heather Mason
September 2020
2/2
2/3²
Brian May
September 2020
2/2
3/3
Constantin Coussios
January 2022
2/2
3/3
Kim Lody
February 2022
2/2
3/3
Sharon O’Keefe
March 2022
2/2
3/3
1.
Dr McAdam was appointed Chair of the Committee on 30 September 2019.
2. Ms Ewing and Ms Mason were unable to attend these ad hoc meetings called at short notice due to prior
business commitments.
Dr John McAdam CBE
Chair of the Nomination Committee
Chair’s
statement
Nomination Committee report
“Talent and succession planning are key
roles of the Committee, overseeing two new
executive director appointments in 2025”
Year in review
This year, the Committee’s main
priorities included conducting a search
process and making recommendations
to the Board to appoint the new CEO and
the new CFO, supporting the evolution
of the senior leadership structure and
reviewing longer‑term Board
composition.
The Committee supported CELT
promotions of Fiona Ryder as interim
CFO (and as permanent CFO), David
Shepherd as Chief Commercial Officer
and Tanja Dormels as President and
Chief Operating Officer in Advanced
Wound Care. Walter Morse was also
endorsed as Chief Quality & Operations
Officer (Interim). The Board was pleased
to note the strength of internal
succession arrangements to CELT.
Board and Committee
appointments and composition
The composition of the Nomination
Committee is set out in the Committee
membership, meetings and attendance
table above.
Appointments to our Board are made
solely on merit, with the overarching
objective of ensuring the Board
maintains the correct balance of
backgrounds, experience, skills, length
of service and knowledge of the Group
to successfully establish and oversee the
delivery of the Group’s strategy, whilst
also providing constructive challenge
as necessary. Appointments are made on
recommendations from the Nomination
Committee, taking into account our
Board Inclusion Policy as well as the
candidates’ ongoing commitments.
Committee introduction and overview
Activity highlights
–
The consideration, selection and
recommendation for the appointment of
a new CEO and a new CFO
–
Reviewed the structure, size, composition
and independence of the Board and
determined the Board was balanced,
diverse and with an appropriate level
of skills, knowledge and experience
–
Reviewed succession plans for the
Board and Board Committees
–
Reviewed talent and succession planning
for CELT and senior management
–
Recommended to the Board the
appointments to CELT to further
strengthen our leadership team
–
Reviewed progress and development
of the Group’s approach to inclusion
and belonging and key metrics
–
Reviewed relevant legal and regulatory
requirements and developments in
accordance with our Inclusion Policy
2026 priorities
–
Finalise the formal search process for a
Non‑Executive Director and determine
succession for the Audit and Risk
Committee Chair and Senior
Independent Director
–
Maintain focus on development
and succession plans for CELT
and senior management
–
Continue the development of short‑,
medium‑ and long‑term Board
succession plans, considering the
tenure of each Director
–
Identify skills gaps, background or
experience which the Board may wish
to consider when making new
appointments
Meetings held
5
(2024: 3)
Attendance
94%
(2024: 95%)
Key areas of responsibility
–
Keeping under review the Board’s
composition and succession to it
–
Leads the Board’s appointment process
as necessary and makes
recommendations to the Board
–
Oversees and recommends orderly
Board succession and oversees senior
management succession planning
–
Reviews Non‑Executive Director
performance and time commitment
to their duties
–
Oversees the balance of skills and
experience on the Board, CELT and
senior management
–
Monitors inclusion within the Board,
its Committees and across the Group
The role and responsibilities of the
Nomination Committee (the Committee)
are set out in the terms of reference which
are available at www.convatecgroup.com/
investors/governance. These are subject to
annual review and were last reviewed
in December 2025.
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Convatec Annual Report and Accounts 2025
Governance
Directors are required to seek Board
approval prior to taking on additional
significant commitments and to ensure
existing roles and responsibilities
continue to be met and conflicts are
avoided or managed.
CEO and CFO succession
and appointment
Talent and succession planning is a key
role of the Committee, to ensure the
Company has a strong pipeline of
high‑quality candidates for senior roles
aligned with long‑term strategic goals.
Succession planning is an ongoing
process and a standing agenda item
throughout the year.
The Committee has an established
process for identifying the most suitable
characteristics and person for the roles
of CEO and CFO, including a list of
potential successors which is periodically
reviewed in anticipation of a change,
taking into account strategic and value
creation opportunities, their role in the
organisation, leadership and cultural
competencies and key experiences.
The Committee also periodically reviews
market mapping exercises, conducted
by an executive search firm.
Following commencement of Karim
Bitar’s period of absence on medical
leave, the Board implemented interim
arrangements and announced that
Jonny Mason would be appointed as
interim CEO and Fiona Ryder as interim
CFO in early August 2025, evidencing
the strength of the Board’s existing
senior leadership and emergency
succession plans.
Over the following months, the executive
search firm conducted a further market
mapping and search exercise.
Following Karim’s passing in October
2025, the Committee met to discuss the
appointment of a permanent CEO and
CFO. The potential internal and external
candidates from the succession planning
process and market mapping and search
exercise were reviewed and discussed in
detail by the Committee. With all new
appointments, the Committee ensures
that the most qualified candidate is
recommended for the role, in the best
interests of the organisation as a whole.
The discussion considered the key
backgrounds, skills and experience which
may be required on the Board; the
purpose, values and culture of the
business and the Company’s strategic
priorities; our Inclusion Policy; and
personal strengths.
The Committee made the
recommendation to the Board that Jonny
Mason was the most suitable candidate
for the position of CEO. Since joining the
business in 2022 as CFO, Jonny has
demonstrated exceptional leadership
and is highly regarded for his contribution
to Convatec’s successful turnaround.
The Committee also recommended to
the Board that Fiona Ryder should be
appointed as CFO. Fiona is a seasoned
finance leader with a strong track record
in leading global businesses and a
well‑regarded member of the finance
team. She has also played a pivotal role
in delivering Convatec’s focus on
simplification and productivity, and has
been fundamental to the success of the
FISBE (Focus, Innovate, Simplify, Build,
Execute) strategy.
Acting on the recommendation of the
Committee, the Board approved the
appointments and announced their
decision on 6 November 2025.
Talent and succession planning
An equally important role for the
Committee is ensuring a robust pipeline
of future talent within the business. The
Committee regularly reviews CELT and
Board succession plans. In support of
Convatec’s succession planning, the
Committee received reports on talent
management, inclusion and belonging
initiatives as well as progress of
Convatec’s efforts to increase the number
of Vice‑President level appointments from
internal candidates. This is driven by
a leadership development programme
for mid‑level leaders with emphasis
on personal development goals.
This programme assesses potential
successors ready now, those ready in
one to two years and those anticipated
to be ready in three to five years.
The following table sets out the information required under UK Listing Rule 6.6.6R (10) on the Board’s and executive management’s
ethnic background and gender identity or sex as at 31 December 2025:
Board and senior leadership gender representation
Number of Board
members
Percentage
of Board
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
Number in executive
management
Percentage of executive
management
Men
4
44%
2
6
55%
Women
5
56%
2
5
45%
Note: Executive management includes CELT members but excludes the CEO and CFO.
Board and senior leadership ethnicity representation
Number of Board
members
Percentage
of Board
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
Number in executive
management
Percentage of executive
management
White British or other white (including
minority‑white groups)
8
89%
4
9
82%
Mixed/multiple ethnic groups
–
–
–
–
–
Asian/Asian British
–
–
–
1
9%
Black/African/Caribbean/black British
–
–
–
–
–
Other ethnic group
1
11%
–
1
9%
Note: Executive management includes CELT members, but excludes the CEO and CFO.
Nomination Committee report
continued
93
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
It aims to accelerate development
and prepare leaders to play a crucial role
in delivering on our strategic objectives.
Given its importance, succession planning
is scheduled for the Committee’s
consideration twice a year.
Inclusion and belonging
The Board endorses the aims of The FTSE
Women Leaders Review and the Parker
Review. At Board level, we have members
of various nationalities, gender and
ethnicity who have an excellent range
of appropriate skills and expertise.
The renewed Board Inclusion Policy,
which also applies to its committees,
was reviewed and approved by the
Board in December 2025 and supports
the development and execution of the
Company’s strategy, as well as reflecting
the objectives of the FCA Listing Rules,
The FTSE Women Leaders Review and
Parker Review. As at 31 December 2025
and at the date of this report, we comply
with the recommendations of all
requirements in relation to gender
and ethnicity at a Board and executive
management level. On the previous
page, we have provided data on Board
and executive management’s gender
and ethnicity. For the purposes of
gathering this information, individuals
were asked to self‑declare their gender
and ethnicity against the Office for
National Statistics classification.
The Committee will continue to monitor
Board membership, including
backgrounds, experience, skills and
personal attributes. In all instances,
individuals will continue to be appointed
on merit and the Committee will remain
focused on ensuring the Board has
the relevant skills and expertise to
perform effectively.
As part of our ongoing commitment to
merit‑based inclusion we continue to
advance towards 50% of senior
management roles (defined as CELT and
their direct reports, excluding executive
assistants) to be held by female leaders
and have met the target of 20% ethnically
diverse leaders by 2027. These currently
stand at 48.1% and 21%, respectively.
During the year, the Board has
considered inclusion insights across a
range of metrics with a focus on gender
and ethnicity. In 2026, the Committee
along with the Board will continue to
monitor and oversee Convatec’s
inclusion strategy and objectives.
Reappointment of Directors
All Directors are subject to annual
re‑election and will be proposed for
election or re‑election by shareholders
at the Annual General Meeting (AGM)
to be held on Thursday, 21 May 2026.
Following evaluation, all Directors
continue to be effective and have the
time available to commit to their role,
and the Board has recommended all
directors are put forward for re‑election.
Board tenure and independence
Director tenure and independence was
reviewed as part of the annual Board
performance review. None of the
directors’ tenure exceeded the
recommended nine years at the date
of this report, and it was concluded
that each Non‑Executive Director
remained independent. The Committee
has commenced appropriate succession
planning for the Board’s longest
serving member.
Margaret Ewing, our Audit and Risk
Committee Chair and Senior Independent
Director, will reach her nine year tenure
in August 2026. The Board has asked
Margaret to stand for re‑election at
the upcoming AGM, and Margaret
has indicated her willingness to remain
on the Board in the short term while
Convatec implements appropriate
succession arrangements. Following
the unforeseen changes to the Executive
Directors during the year, Margaret
continuing on the Board in 2026 will
assist Jonny Mason and Fiona Ryder
with embedding into their new roles
as CEO and CFO. Margaret continues
to provide a wealth of financial, audit
and risk management knowledge and
experience, and valuable contributions
to Board discussions. The Board considers
Margaret to be independent as she
continues to demonstrate objective
judgement and independence.
Board induction, training
and development
On joining the Board, all Non‑Executive
Directors participate in a formal
induction programme. The programme,
monitored by the Chair (except for their
own induction, which is guided by the
Senior Independent Director) and
managed by the Company Secretary
ensures each newly appointed
Non‑Executive Director is able
to contribute as quickly as possible.
Each induction programme is tailored to
the individual Director’s needs, based on
their skills and experience, but typically
covers Convatec’s strategy, culture,
operations and governance, and
compliance processes and procedures.
As part of Fiona Ryder’s onboarding
as the new CFO and a new director of the
Board, this training included directors’
duties, obligations under the Market
Abuse Regulation and other relevant
compliance topics.
During the year, the Board received
training on artificial intelligence provided
by an external business management
consultancy firm.
We continued to advance Board
knowledge through updates provided
to both the Remuneration and Audit and
Risk Committees by external advisers.
Training focused on matters specific
to their respective committee activities,
including corporate governance updates,
executive remuneration, corporate
reporting and audit updates. In line with
the results of the Board and Committee
performance review, we will focus
on appropriate training in 2026.
Committee performance review
The Committee conducted a
performance review through a detailed
questionnaire facilitated by an external
provider, Lintstock, the results of which
were highly rated overall. Matters
identified for attention in 2026 are set
out under Actions for 2026 on page 89.
Dr John McAdam CBE
Chair of the Nomination Committee
23 February 2026
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Convatec Annual Report and Accounts 2025
Governance
Committee membership, meetings and attendance
Director
Member since
Scheduled meeting
attendance
Margaret Ewing
1
August 2017
5/5
Heather Mason
September 2020
5/5
Brian May
March 2020
5/5
1.
Ms Ewing was appointed Chair of the Committee on 28 June 2019.
Margaret Ewing CBE
Chair of the Audit and Risk Committee
Chair’s
statement
Audit and Risk Committee report
“During 2025, the transition to a new Convatec
CFO and associated step up in responsibilities
of the finance leadership team was seamless,
reflecting excellent succession planning”
Committee introduction and overview
2025 highlights
–
Reviewed key judgements and estimates,
alternative performance measures
(APMs) (or adjusted measures) and
disclosures in respect of the 2025
financial statements
–
Reviewed the proposals to comply with
the declaration relating to material
controls to respond to the new
requirements of the 2024 UK Corporate
Governance Code (the Code)
–
Monitored the preparation to address
the new failure to prevent fraud offence,
applicable from September 2025
–
Monitored the development of ESG
reporting and targets, including
compliance with Task Force on
Climate-related Financial Disclosures
(TCFD) and the evolution of requirements
of the EU Corporate Sustainability
Reporting Directive (CSRD)
–
Reviewed cyber security risk mitigations
to ensure that the Group is protected as
far as practicable against the increasing
threat landscape
–
Monitored the implementation and
effectiveness of the transition plan to
the new external auditor, EY, for the
2026 financial year
2026 priorities
–
Oversee systems implementations and
related transformations
–
Oversee the external auditor transition
and performance
–
Monitor risks related to cyber security,
digital, use of artificial intelligence (AI)
and its governance, and data privacy and
management
–
Monitor the readiness for the Board
declaration and disclosure in the 2026
Annual Report relating to material
controls in accordance with provision
29 of the Code
Composition
The current members of the Audit and Risk
Committee (the Committee) are listed
above.
The biographies of the Committee
members on page 81 outline the members’
collective wide finance, audit, risk
management and relevant sector
and business experience, enabling the
Committee to provide constructive
challenge and support to management
and the auditors.
In accordance with the Code, the Board has
determined that Margaret Ewing and Brian
May possess an appropriate breadth of
recent and relevant financial experience
and is satisfied that the Committee has
competence relevant to the sector and
its overall responsibilities.
Key areas of responsibility
The Committee plays a key role in
supporting the Board to ensure there is
appropriate oversight of the Group’s
financial position, external reporting,
controls and risks. The Committee’s
principal responsibilities are to oversee and
provide assurance to the Board on:
–
The integrity and quality of financial and
non-financial (including ESG and TCFD)
reporting and to ensure it is fair,
balanced and understandable
–
The effectiveness of audit and assurance
arrangements
–
The robustness and effectiveness of
the financial, reporting, operational
and compliance controls and risk
management processes throughout
the year
The full role and responsibilities of the
Committee are set out in the terms of
reference (available on our website:
www.convatecgroup.com/investors/
governance) and were updated in
December 2025 to comply with the revised
requirements of the Code.
The Chair, CEO, CFO, General Counsel &
Company Secretary, Deputy Company
Secretary, Group Financial Controller and
the Head of Internal Audit, Enterprise Risk
& Insurance and representatives of the
external auditor attend the meetings on
a regular basis. Throughout 2025, EY
representatives have attended each
Committee meeting as part of their induction
and transition plan. Other Board members
have an open invitation to attend Committee
meetings. The Committee also has at least
two private sessions each year with each of
the external auditor and the Head of Internal
Audit, Enterprise Risk & Insurance.
The activities undertaken by the
Committee during 2025 and up to the date
of this report, which meet the FRC’s Audit
Committees and the External Audit:
Minimum Standard, are detailed on the
following pages.
Meetings held
5
(2024: 5)
Attendance
100%
(2024: 93%)
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Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
The Committee had five formal
scheduled meetings in 2025. In addition
to the Committee’s scheduled meetings,
throughout the year I met regularly with
senior management, particularly the
CFO, Group Financial Controller, Head
of Internal Audit, Enterprise Risk &
Insurance, General Counsel & Company
Secretary, and the lead partners of our
external auditor, Deloitte, allowing me
to understand how existing and
emerging issues were being addressed
and adapting the Committee’s agendas
accordingly. The meetings with the Head
of Internal Audit, Enterprise Risk &
Insurance and Deloitte lead partners
informed the Committee’s ongoing
review of the effectiveness of audit
(internal and external, respectively)
and ensured the internal audit plan
prioritised controls and processes
related to the Group’s principal and
emerging key risks and the external
audit plan focused on the evolving key
audit risks. They also provided insight
on the culture across the Group.
I also met on a regular basis with the
lead partners from EY, who commence
their role as external auditor to Convatec
following shareholder approval at the
AGM on 21 May 2026, to ensure that the
Committee approved transition
was progressing as planned.
The Committee monitored the transition
of the CFO responsibilities to Fiona Ryder
midway through the year to ensure that
she had any support and guidance
needed in her new role. The transition
has appeared seamless, with the capable
and talented team that Fiona leads
stepping up to support.
In addition to the regular agenda items,
the Committee monitors transformation
in the Group. We received an
introduction on the S4C initiative
(simplification, standardisation and skills
for customers, colleagues and Convatec)
in May. This is targeting organisation
efficiency both vertically (within a
function or business unit) and
horizontally (across business units) to
identify and realise synergies, which
includes an upgrade during 2026 and
early 2027 to the Group’s ERP platform.
Given the intended impact of this
programme, the Committee will continue
to closely monitor progress, including
the costs, benefits and scope,
throughout the life of the project.
The Committee emphasised the need
to document current processes clearly,
so
that the scale and impact of the change
to the ERP system can be properly
assessed and managed. The composition
of the Programme Steering Committee was
reviewed and challenged to ensure that
there is sufficient critical oversight and the
programme was supported by experienced
external and internal resources.
Committee performance review
During the year, as part of the Board
performance review, the Committee
members and regular attendees
(including the internal and external
auditors) undertook a review of the
Committee’s performance, facilitated
by Lintstock, an external provider. The
findings were discussed initially by the
Committee and then shared with the
Board. Overall, it was concluded that the
Committee continued to perform very
effectively and had addressed its key
priorities and action plan for 2025.
Fair, balanced and understandable
The Board is required to provide its
opinion on whether it considers that
the Company’s 2025 Annual Report
and Accounts (ARA), taken as a whole,
are fair, balanced and understandable,
and provide the information necessary
for shareholders and other stakeholders
to assess the Company’s position
and performance, business model
and strategy and key risks that
challenge the Group.
To support the Board in providing its
opinion, the Committee considered the
overall cohesion and clarity of the ARA,
including an assessment of the quality
of reporting, through the assurance
framework, process and controls that
were applied in its preparation and
discussion with management and the
external auditor. This included:
–
A detailed verification process dealing
with the factual content
–
Comprehensive reviews undertaken
independently by senior management
and Committee members to consider
messaging, adequacy of disclosures,
compliance with regulatory and legal
reporting requirements, and balance
–
Specific reviews by the Board and CELT
in relation to key sections of the ARA
and relevant sections of the ARA
audited by Deloitte
–
Confirmation from management that
the assurance framework has been
adhered to throughout the year and
in particular for the preparation of
the 2025 ARA
Items proposed (and qualifying) for
treatment as adjusting items were
carefully reviewed and challenged by
the Committee to ensure that they were
relevant to enable a full understanding
of the underlying business performance.
External auditor transition
As disclosed in 2024, the Committee
undertook a formal competitive tender,
with the resulting appointment of EY
as the Group’s external auditor effective
for the 2026 financial year. Shareholder
approval will be sought at the AGM
to be held in May 2026, at which point
EY will formally sign the Group
engagement letter.
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Governance
Audit and Risk Committee report
continued
The Committee reviewed the interim and
full-year results statements and 2025
ARA, with supporting materials, focusing
on the:
–
Integrity of the Group’s financial
reporting process
–
Clarity of disclosure
–
Compliance with relevant legal
and financial reporting standards
and regulatory guidance
–
Application of accounting policies and
judgements
–
Consistency of the non-financial
disclosures, including climate risks and
opportunities, and related evolving
regulatory reporting requirements
–
Review of whether the Convatec ARA is
fair, balanced and understandable,
considering the above factors
Throughout the year, the Committee
received regular updates from the CFO,
Group Financial Controller, Head of
Internal Audit, Enterprise Risk &
Insurance and the Head of Investor
Relations, and formal and informal
reports and feedback from the external
auditor, covering the following:
–
APMs, including the policy, rationale,
non-recurring nature and the quantum
of the proposed adjusting items
–
Non-financial information reported
externally, including the increasing
requirements and compliance
readiness planning
–
Accounting and financial judgements
related to the impact of measures
introduced in the US relating to Local
Coverage Determinations (now fully
withdrawn) and CMS payment plans
on skin substitutes and the inclusion
of catheter and ostomy products in the
CMS Competitive Bidding Program,
as well as US tariff actions
–
Assessment of contingent
consideration and triggers for
potential impairment of carrying
values of intangible assets associated
with past acquisitions
–
The results of the monitoring of the
effectiveness of internal controls,
particularly financial and IT general
controls related to financial reporting,
and the fraud risk assessment
–
The ongoing related enhancement
programme of internal controls to
support the Committee’s conclusions
on the integrity of the consolidated
financial statements and the review
of the wider control environment in
anticipation of the revised requirements
of the Code
–
Appropriateness of going concern and
viability assessment, including basis of
preparation and management reports
on all key judgements, risk scenarios
and underlying assumptions,
supporting analysis and evidence
–
Treasury matters, including policy,
funding, the issuance of $500m senior
unsecured notes and ongoing
compliance with debt covenants
–
Tax matters, including the Tax Strategy
Statement, tax transparency, key tax
risks, ongoing and new local tax audits
and investigations, estimated tax rates
applied in the financial statements and
provisions for uncertain tax positions
As a result of the reviews performed and
related discussions and challenges, the
Committee was able to recommend the
interim and full-year results statements
and 2025 ARA to the Board for approval.
As part of the FRC’s Corporate Reporting
Review, Convatec’s interim report for
the six months ended 30 June 2025
was selected for review by the FRC.
The Committee was pleased to note
that no questions or queries were
raised by the FRC on this report.
1. External reporting
2025 key matters
The existing auditor, Deloitte, will resign
as Group external auditor upon
completion of the 2025 Group audit. On
behalf of the Committee, I wish to thank
Deloitte for their valuable audit services
and the constructive challenge they have
provided to both management and the
Committee. I thank them also for their
open communication and collaboration
enabling a smooth transition to EY.
Committee conclusions and
confirmations
Taking into consideration all areas of
focus of the Committee during the year
and in reviewing the 2025 ARA, including
reviewing the supporting detailed topic
papers, presentations and reports from
management and Deloitte, the
Committee was satisfied and able to
confirm to the Board that:
–
The Financial Statements for the year
ended 31 December 2025 have been
prepared applying appropriate
accounting policies and disclosures,
and provide a true and fair view
–
The Group’s internal controls and risk
management processes were
operating effectively throughout the
year, with no significant control
failures identified
–
The 2025 ARA, overall, is fair, balanced
and understandable. The Board’s
statement in relation to this
confirmation is included on page 125
–
It is reasonable for the Directors to
make the viability and the going
concern statements on pages 77 and
page 138, respectively
–
The Group’s Speak Up and fraud risk
processes have operated effectively
during the year
–
The external and internal auditors
have provided effective and
independent audits that have been
challenging, robust and of a high
quality
I would like to thank my fellow
Committee members and all teams
involved with the Committee’s activities
for their contribution during 2025, and
their intense focus on quality, sound
judgements, controls and risk in a
challenging global environment,
politically and economically.
I hope that you find this report
informative and can take assurance from
the work undertaken by the Committee
during the year and planned for 2026.
Margaret Ewing CBE
Chair of the Audit and Risk Committee
23 February 2026
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Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Significant reporting matters considered by the Committee
The two principal reporting matters considered by the Committee are set out below.
Issue
Committee’s conclusion and response
Revenue
recognition in
key markets
The recognition of revenue includes a number of areas of estimation at the point of recognition,
including rebates, discounts, allowances, product returns and consideration expected to be received.
The arrangements in different countries and with individual customers vary. The Committee scrutinised
the judgements and estimates related to revenue, and discussed them with the external auditor,
ultimately concluding that the accounting for revenue was appropriate.
Impairment of the
intangible asset relating
to InnovaMatrix
®
The announcement by the Centers for Medicare & Medicaid Services (CMS) of revised reimbursement
rates for the InnovaMatrix
®
product was deemed to be an indicator of impairment. The Committee
reviewed the latest projected cashflows and discussed and challenged the appropriateness of
assumptions used in these forecasts, and ultimately concluded that an impairment charge of $72m was
appropriate, resulting in a carrying value of $40m at the year end. The Committee also reviewed and
approved the impairment charge to be treated as an adjusting item, consistent with where the
amortisation charge of this acquired intangible asset is recognised, in line with the Group’s APM policy.
The Committee concurs with management’s view that the valuation of the intangible asset’s carrying
amount is a key source of estimation uncertainty at the year end.
The Committee considered the key risks, facts and judgements related to the following areas:
Matter
Committee’s conclusion and response
Going concern
and viability statements
The Committee considered and robustly challenged management’s going concern review and viability
assessment, including the supporting analysis, in accordance with the requirements of the Code. The
Committee considered the Board-approved Group 2026 budget, 2027 to 2030 strategic financial plan,
and updated forecasts and projections, taking into account reasonably possible changes in trading
performance and the potential impact of principal and emerging risks. The stress test scenarios,
including the underlying scenario assumptions, and the reverse stress test were reviewed and assessed
against the Group’s financing facilities and covenants. In addition, the Committee obtained a summary
of external views, from analysts and other industry commentators, to understand the wider market’s
perception of the Group’s future financial performance and viability, including the potential impact of
the coverage of Medicare for reimbursement of InnovaMatrix
®
for specific applications in the US. The
Committee considered the possible implications of the rapidly evolving geopolitical and economic
environment in which the Group operates. It also considered the potential corporate mitigations that
would be available to management should the environment and Group’s performance deteriorate
beyond that reflected in the stress test scenarios. The Committee also discussed with the external
auditor the findings and conclusions from their review.
Following this assessment, the Committee considered that the scenarios applied reflected the
most likely risks to potentially impact viability during the relevant period and were severe but
plausible. Accordingly, the Committee considered that the extent of the analysis made by management
was appropriate and ultimately recommended the viability and going concern statements, and
their respective related disclosures, to the Board for approval and inclusion in the 2025 ARA (pages 77
and 138).
Taxation
The Committee was pleased to note the continued improvements in the efficiency and effectiveness of
the Group’s tax operations, contributing to a reduction in transfer pricing risk. The Committee reviewed
the provisions for uncertain tax positions, challenged management’s conclusions and related
disclosures and considered them to be appropriate.
Alternative performance
measures (APM)
The Committee discussed the APM policy and the alignment with FRC guidance, and concluded the APM
policy remains appropriate given the material level of adjusting items, certain of which would continue
to be incurred for several years. The largest adjustment continues to be the amortisation of acquired
intangible assets, of which a significant proportion relate to the Bristol Myers Squibb spin-out in 2008
and will be fully amortised by mid-2026. After careful review and challenge, the Committee concluded
that items identified by management as adjusting items were in line with the APM policy and that by
making these adjustments to reported figures, where appropriate, produced more meaningful
measures to monitor the underlying performance of the business. The Committee will continue to
scrutinise and challenge all proposed adjusting items prior to approval.
Dividends
The Committee reviewed management’s proposal to the Board for the interim and final 2025 dividend
payments, with the Committee’s focus being on the adequacy of realised distributable reserves, cash
resources, availability of liquidity and the effect of sensitivities aligned to the viability statement and concluded
that it was able to advise the Board that there were sufficient realised distributable reserves and cash
resources to enable the Board to approve and recommend the proposed 2025 interim and final dividends.
1. External reporting
continued
98
Convatec Annual Report and Accounts 2025
Governance
Audit and Risk Committee report
continued
Throughout the year, the Committee reviewed risk management and compliance matters to be able to provide assurance to the
Board that it could conclude on the effectiveness of the Group’s compliance, fraud prevention, risk management and internal
controls frameworks.
Committee’s role
Decisions and actions taken by the Committee
Enterprise risk management (ERM)
and insurance
–
Ensure a robust assessment of the principal and
emerging risks has been undertaken with
effective mitigations and controls established
–
Assist the Board to establish and articulate
overall risk appetite, oversee specific risk
exposures and mitigations and ensure the Group
is operating within the Board’s risk appetite
–
Review effectiveness of the Group’s risk
management systems and processes and the
progress to ensure compliance with the Code
–
Review of the annual insurance renewal strategy
and programme to assess adequacy and
appropriateness of coverage of insurable risks
across the Group
The principal and emerging risks identified by management were regularly
reviewed and challenged by the Committee, with consideration of the
effectiveness of the respective risk mitigations and controls. Improvements to
the risk framework with the introduction of key risk indicators were noted. The
Committee will continue to monitor the development of the risk management
processes and control activities on behalf of the Board, in preparation for the
Board’s material controls declaration for the 2026 financial year (in compliance
with the Code).
The Committee reviewed the risk appetite statements, and the principal and
emerging risk management statements and disclosures, including the priority
order of risk as disclosed in the 2025 ARA, reflecting the discussions held with
CELT (collectively and with individual members). The risk associated with
customer and markets was carefully reviewed and discussed, particularly due
to developments impacting InnovaMatrix
®
and the general global economic
pressures impacting reimbursement. The Committee concluded that the risk
appetite statements and the principal and emerging risks (including
prioritisation) were appropriate and recommended them to the Board for
approval.
At the Committee’s request, CELT participated in a risk simulation exercise to
test preparedness for a major incident at a global manufacturing site resulting
in supply chain disruption. The national power outages in Spain and Portugal
in April 2025 also provided key learnings on resilience. The Global Quality
Operations leadership team reviewed operational resilience across the
end-to-end processes with the assistance of a third-party consultant. Although
the results of these activities and actions to mitigate key risks are to be
presented to the Board in 2026, the Committee gained assurance from
management that the key risks and concerns highlighted by these activities
and reviews are fully reflected, where appropriate, in the statements regarding
the Group’s principal risks and the scenarios applied in respect of the viability
and going concern reviews.
With the increasing number and significance of cyber-related incidents
suffered by major groups in 2025, the Committee continues to closely monitor
this key risk, with regular updates from the Chief Digital Information Officer to
the Committee, including reporting of incidents and responses, monitoring of
the NIST Cybersecurity Framework 2.0 and ISO270001:2022 certification and
the progress towards ISO20000 certification and requested the plans for
enhancement of recovery readiness to be presented to the Committee in
mid-2026.
The Committee reviewed the recommendations made following a detailed
review and benchmarking exercise by the new insurance broker. The improved
data and information available from across the business, enabling better
coverage, quality and value for money, was noted with the transition from
regional policies to global policies for some risk areas. After careful
consideration, the Committee approved the scope of insurance and the
projected renewal fees.
2. Risk management and compliance
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Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Committee’s role
Decisions and actions taken by the Committee
Internal controls
–
Promote and review sound risk management
and internal control systems and frameworks
over financial, reporting, operational and
compliance processes
–
Review the effectiveness of internal controls
–
Monitor progress on the preparations for
readiness towards compliance with revised
requirements of the Code
The Internal Controls team provided the Committee with quarterly updates
of the self-attestation of compliance with the Group’s formal internal control
frameworks, including details of control failures (all immaterial during 2025),
their remediation and independent reviews of control evidence.
The reliance approach adopted by the external auditor on internal controls and
the reviews undertaken by the internal auditors across all aspects of the Group
continued to provide additional assurance to the Committee on the
effectiveness of the financial, operational, IT and compliance controls.
Based on the quarterly updates, and the reports from the internal auditors,
the Committee is satisfied that there were no significant control weaknesses
during the year. Controls relating to compliance are covered in the section below.
The Committee reviewed the proposed material controls and monitoring
process to be implemented in accordance with the requirements of the Code
with effect from 2026. The number and nature of the controls were considered
by the Committee. The Committee concluded that the proposals were
proportionate and in line with FRC guidance and insights published on
Provision 29 of the Code. The monitoring programme for material controls was
implemented in 2025 and the Committee will continue to evaluate the controls
and monitor results in readiness to make the required declaration of the
operating effectiveness of the material controls as at 31 December 2026.
Compliance, including speaking up and fraud
–
Review the Group’s codes, policies, systems and
controls in respect of fraud, bribery, corporate
conduct, privacy and regulatory and legal
compliance
–
Review Speak Up reports
The Committee continued to monitor compliance activities across the Group
with strong focus on markets that have an enhanced perceived corruption
index risk score. This included the review of regular reports on the results of
the global compliance programme and the Speak Up process. The Committee
also welcomed the appointment of a new Chief Compliance Officer,
commencing in role in November 2025 and already introducing improvements
to policies, procedures and teams.
The global business risk assessments, performed jointly by the Group’s
Compliance team and Internal Audit (as part of the global compliance
programme), were extended to all markets throughout 2025, building on the
successful launch in 2023 that focused on high-risk markets. The Committee
monitored progress, together with the conclusions and actions arising out of
the reviews. Key themes arising from the reviews included data privacy, the
adoption of AI, third-party risk management, regulatory change and
challenges associated with rapidly evolving technologies, including emerging
fraud risks tied to new standards of conduct. The Committee monitored the
progress and outcomes of these assessments which have informed policy and
process updates, enhanced corporate education and reinforcement of roles
and responsibilities. Overall, the Committee was able to conclude that an
ethical and compliant business culture is in place across the organisation.
Whistleblowing/Speak Up incidents are reported by employees and certain
third parties through a confidential Compliance helpline, with reports to the
helpline provided directly to the Ethics and Compliance team. Reports of a
Speak Up nature or of breaches of the Code of Conduct that are made directly
to senior management or HR personnel are also reported to the Ethics and
Compliance team. All reports, irrespective of the channel, are collated,
managed, reviewed and investigated by the Ethics and Compliance team. A
summary of the key themes, locations and disposition of whistleblower/Speak
Up matters together with subsequent actions were reviewed by the Committee
and reported to the Board.
The Committee reviewed the reporting on measures taken to prevent and
detect fraud in accordance with the enhanced requirements of the Code and
the new UK ‘failure to prevent fraud’ offence, applicable from September 2025.
This included an update to CELT, to ensure they understood the new law and its
reference in the ethics and transparency modules in the compliance training.
An update of the recently introduced risk-based data privacy strategy was
provided to the Committee, outlining how the specialist data privacy team will
prioritise high-risk areas, leveraging the standardisation of global policies and
processes and targeted training to allow low-risk activities to be primarily
managed more efficiently and timely in the business, promoting innovation
and growth.
2. Risk management and compliance
continued
100
Convatec Annual Report and Accounts 2025
Governance
Audit and Risk Committee report
continued
Committee’s role
Decisions and actions taken by the Committee
Regulatory compliance – ESG and TCFD
–
Approve ESG assurance partner appointment
and review their report
–
Approve ESG-related metrics subject to external
(limited) assurance (see page 33)
–
Approve TCFD disclosure
–
Oversight of Convatec Cares responsible
business ambitions and targets
–
Review Responsible Business section of the 2025
ARA for compliance with all applicable
regulations (pages 32 to 53)
The Committee closely monitors ESG matters, including relevant reporting and
progress towards our net zero ambition, and has oversight of stakeholder
expectations and disclosure requirements.
An initial transition plan was established in 2023 and the Committee has
continued to monitor progress in delivering the actions required to iterate this
further, ensuring a roadmap is in place to meet the commitments we have
made, notwithstanding dynamic market considerations and externalities
beyond the Company’s control that will make the delivery of our long-term net
zero ambition a reality.
Reporting requirements remained a key area of focus for the Committee
throughout 2025. Notwithstanding appropriate preparation for the EU CSRD,
the announcement of the EU Omnibus Directive, aimed at simplifying
sustainability-related compliance, delayed reporting timelines and deferred
reporting obligations. The Committee will continue to receive updates on the
evolving regulatory landscape, including the UK Sustainability Reporting
Standards, and monitor improvements in internal reporting processes to
ensure readiness. The Committee reviewed and supported the continued
alignment of our responsible business ambitions to the FISBE strategy, key
stakeholders and focus on sustainable growth.
Anticipating the requirement to further expand the scope of assurance over
ESG metrics to meet CSRD requirements, the Committee approved a transition
from Deloitte to EY for ESG limited assurance in early 2025. As a result of the
considerations outlined, the Committee approved limiting the scope of
external assurance in 2025 to ESG metrics relating to Scope 1 and 2
greenhouse gas emissions and energy. Limited assurance over these metrics is
aligned to market practice and stakeholder expectations, supported by greater
emphasis on internal control processes over all non-financial information,
including those metrics linked to senior executives’ remuneration.
Regulatory developments
–
Monitor the development of regulations relating
to ESG, TCFD, CSRD, climate change, fraud, audit
and corporate governance and FRC and FCA
reporting requirements and guidance, and any
other relevant evolving regulations
–
Oversight of management’s preparedness to
adopt the changing requirements
The Committee continued to keep abreast of guidance relating to new
regulations, including the revised requirements of the Code and CSRD. The
Committee received detailed briefings on both the Code and CSRD to ensure it
can navigate the requirements of these new regulations, calibrate Convatec’s
approach and monitor progress of related initiatives to ensure compliance in
the required timeframes. The Committee also received regular briefings from
the external auditor and Convatec’s ESG Steering Committee on regulatory and
other developments relating to sustainability, fraud and other disclosure and
reporting requirements, building the proposed timelines for implementation
of related changes into the Committee’s forward agenda.
Treasury and debt
–
Provide oversight of the treasury function
–
Annually review and approve the Group’s
Treasury Policy
–
Review activities of the treasury function,
including the status of treasury instruments, the
indebtedness of the Group and compliance with
covenants within its debt instruments and the
Treasury Policy
The Committee received regular updates regarding compliance with the
Treasury Policy, covenants and other conditions of financing arrangements.
The Committee reviewed and approved the proposals for the issuance of
$500m senior unsecured notes, which was finalised in September 2025, to
diversify the capital structure and maturity profile of the Group. The
Committee was pleased to note that the bond was well received, and closed
quickly on the market, reducing overall borrowing costs to the Group.
The Treasury Policy was updated to reflect the changes to the Group’s capital
structure and was reviewed and approved at the December 2025 meeting.
Tax
–
Provide oversight of the tax function
–
Review the key aspects of taxation, including
compliance, accounting judgements, reporting,
Tax Strategy and the external reporting
requirements of regulators and tax bodies
–
Annually review and recommend to the Board
for approval the Group’s updated Global Tax
Strategy statement for publication
The Committee continues to review the appropriateness of the Tax Strategy to
ensure the alignment with the Group’s tax risk profile and continues to be
satisfied that the Group manages its tax affairs carefully, ensuring that we
operate within our tax risk appetite.
The judgements underpinning the provisions for uncertain tax positions were
scrutinised by the Committee and considered to be appropriate and in line with
the requirements of IFRIC 23,
Uncertainty over Income Tax Treatments.
The Committee reviewed the tax rates to be applied during the year compared
to the guidance previously disclosed.
2. Risk management and compliance
continued
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Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
The Internal Audit function provides independent, objective assurance to the Board, the Committee and senior management on
the adequacy and effectiveness of the Group’s risk management, governance and internal control framework and processes.
The Committee oversees the work of the internal audit team as follows:
Focus areas
Decisions and actions taken by the Committee
Annual audit plan and resources
Monitored progress in delivery of the approved 2025 audit plan and approved
amendments to the plan to reflect emerging risks and changes in priorities.
Reviewed and challenged the 2026 audit plan, which includes risk-based
reviews of financial, operational, strategic and compliance risks, reviews of
emerging risks and business change activity, together with assurance over risk
management activities. The Committee also considered the adequacy and
capabilities of the internal audit resource and budget to enable effective
delivery of the audit plan.
Audit conclusions
Reviewed the results of the audits conducted (including management’s response
to the audit findings and recommendations) and considered emerging themes
of concern. Actions arising from audits rated with more significant weaknesses
were closely monitored, with responsible management invited to present their
response to the audit finding and action plans directly to the Committee where
appropriate, thereby emphasising the need for considered, timely and
deliverable responses. The Committee was pleased to note the continued focus
by management on the timely closure of audit actions.
Effectiveness of the internal audit function
A formal assessment was undertaken by the Committee, including obtaining
direct feedback from CELT members and other relevant management.
Both management and the Committee concluded that the internal audit
function continued to be highly effective and provided robust, challenging and
quality audits.
3. Internal audit
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Governance
Audit and Risk Committee report
continued
The Committee is responsible for overseeing the relationship with the external auditor, the audit process and the effectiveness
and quality of the audit.
The following table summarises the steps taken by the Committee in overseeing the effectiveness of the 2025 audit and its
quality. In addition, the Committee has monitored the progress by EY in the fulfilment of its transition plan (which the
Committee approved in early 2025), ensuring that the firm will be ready to assume responsibility for the external audit effective
for the 2026 year end.
Significant matters for review
Decisions and actions taken by the Committee
The annual audit plan and strategy, including the
scope of the audit, changes in approach and
methodology, emerging industry and Group-
specific risks
The Committee reviewed and approved the audit plan and scope for the 2025
audit of the Group accounts.
Key developments in the geopolitical and macroeconomic environments
impacting the audit risk assessment were reported to the Committee to assess
the impact on the audit approach.
Audit scope and risk assessment
The Committee noted the continued global shared service centre audit
approach, resulting in significant scope of audit testing performed by the
Deloitte team co-located with Convatec Business Services (CBS) in Lisbon, with
in-market teams restricted for specific audit components not managed by CBS.
The Committee reviewed the risk assessment performed by Deloitte and the
proposed audit scope, and considered it to be appropriate and aligned to the
key developments in the Group’s business.
Audit materiality level, including Group materiality
and component materiality
Reviewed and agreed the methodology for calculating the materiality,
which was consistent with previous years.
Audit fee and terms of engagement
Approved the audit fee and terms of engagement, ensuring no impact on
scope of audit or quality of resource engaged due to the agreed fee level.
Audit findings, significant issues and other
accounting judgements
Discussed with Deloitte and management throughout the year,
and particularly during the year-end audit.
Deloitte’s independence, objectivity and quality
control procedures
Independence and objectivity were confirmed and quality control procedures
reviewed (see the next page).
4. External audit
103
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Audit quality and effectiveness
The Committee monitors the
effectiveness of the external audit
continuously throughout the year,
with a formal assessment undertaken
in December and subsequently updated
and approved post audit completion in
February. The Committee considered:
–
The quality of the audit team and
involvement by the lead audit partner
–
The adequacy of audit planning
–
The timely and robust execution of
the audit
–
The quality of communications with
the Committee
–
Auditor independence and objectivity
The Committee also took into
consideration the highly professional
and collaborative approach that Deloitte
have adopted in facilitating the induction
and transition of EY, who will be the
Group’s external auditor for the 2026
financial year. In addition, the Committee
noted the FRC’s most recent Audit
Quality Review conclusions relating
to Deloitte as a firm and any specific
findings that may relate to Convatec.
The Committee’s review concluded that
the 2025 audit was very effective and the
external auditor had:
–
A good understanding of the business
–
Continued to provide the Committee
with strong opinions, views and
insights
–
Provided clear evidence of robust and
objective challenge of management
–
Exercised appropriate scepticism in
relation to key audit matters and
estimates
–
Reliably interpreted evidence provided
by management
–
Involved relevant specialists and used
specialist resource to support their
conclusions where appropriate
The Committee thanks the current
external audit team from Deloitte for its
provision of a high-quality, very effective
and robust audit.
Audit independence
The Committee has responsibility for
monitoring auditor independence and
objectivity. The Committee enforces the
Group’s policy on the provision of
non-audit services, aligned with the
FRC’s Ethical Standard, which requires
non-audit engagements performed by
the external auditor to be approved by
the Committee. In 2025, the Committee
approved a change in the Non-Audit
Services Policy, with an increase of the
fee cap of permissible services to 25%
(previously 10%) of average audit fees
billed to the Group by the auditor in the
past three financial years, with the
provision, in extreme circumstances, to
gain approval from the Committee for up
to 70% (in line with the threshold in the
FRC’s Ethical Standard). The Group was
compliant with the policy in 2025, when
non-audit fees (which were not
significant in quantum) principally
related to the bond issuance and the
interim review of the Group’s half-year
unaudited financial statements. A
summary of fees paid to the external
auditor is set out in Note 3.3 to the
Consolidated Financial Statements
(page 143).
In addition, the Committee’s review of
the independence of the external auditor
included:
–
Confirmation from Deloitte that they
remained independent and objective
within the context of applicable
professional standards
–
Monitoring the tenure and rotation of
the lead and engagement partners.
Claire Faulkner rotated into the role of
lead partner in 2021 and David Holtam
assumed the role of engagement
partner in 2023
–
Monitoring the tenure and rotation of
other key personnel
–
Observing the relationship and tone of
communication between management
and the auditor
–
Deloitte reconsidering and
reconfirming their audit independence
under the 2024 Ethical Standard for
Auditors, given Margaret Ewing’s
position as both a former partner
of Deloitte LLP and chair of this
Committee, with Deloitte and the
Committee (excluding Margaret)
concluding that this relationship
does not affect the external auditor’s
independence
The Committee concluded that Deloitte
remained appropriately independent in
the role of external auditor.
External auditor appointment and
engagement tender
At the AGM on 22 May 2025, shareholders
approved the reappointment of Deloitte
as the Group’s external auditor. Deloitte
has been the Group’s external auditor
since the Company’s Listing in October
2016 and prior to this were the Company’s
external auditor for the period 2008 to
2016 whilst the Company was in private
equity ownership. For the purposes of
complying with the requirements of
The Statutory Audit Services for Large
Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Responsibilities)
Order 2014, Deloitte’s ‘qualifying’
tenure as the Group’s external auditor
commenced in October 2016.
During 2024, the Committee undertook
a formal competitive tender (not
mandatory rotation). After a robust
process, and considerable discussion,
the Committee recommended to the
Board that EY be appointed as the
Group’s auditors, effective for the 2026
financial year audit. The Board approved
the appointment at its meeting in June
2024. A detailed transition plan was
developed by EY with Group financial
management and Deloitte and the teams
are on track to successfully complete
with EY observing the outcome of the
2025 audit.
Certain knowledge sharing sessions
have taken place and the lead and
engagement partners have attended
the Committee meetings in 2025 in a
non-participatory basis.
EY were engaged to provide ESG
assurance during the year, which does
not impact their independence ahead of
their appointment as Group auditor in
2026. No other non-audit services were
provided by EY in 2025 in order to
safeguard their independence.
104
Convatec Annual Report and Accounts 2025
Governance
Committee membership, meetings and attendance
2
in 2025
Director
Member since
Scheduled meeting
attendance
Brian May¹
March 2020
6/6
Constantin Coussios
January 2022
6/6
Kim Lody
February 2022
6/6
Sharon O’Keefe
March 2022
6/6
1.
Mr May was appointed Chair of the Committee on 1 September 2020.
2. The Deputy Company Secretary attends meetings as the Secretary to the Committee. The Chair, CEO,
CFO, General Counsel and Company Secretary, Chief People Officer and VP Head of Global Total Rewards
& Recognition attend meetings of the Committee by invitation, as does the Committee’s appointed
adviser. Attendees are absent when their own remuneration is under consideration.
Brian May
Chair of the
Remuneration Committee
Chair’s
statement
Directors’ Remuneration report
“Against the backdrop of a leadership transition
and another strong performance in 2025, our
focus on building capability and developing talent
has positioned Convatec effectively to drive the
business forward and deliver our strategy”
Committee introduction and overview
Activity highlights
–
Ensured remuneration arrangements
for the Executive Directors and Convatec
Executive Leadership Team (CELT)
members in 2025 supported delivery
of Convatec’s strategic goals and
stakeholder objectives
–
Reviewed competitiveness of reward for
Executive Directors, to understand our
ability to retain key talent and attract
successors when required
–
Gained approval for changes to our
Remuneration Policy at our Annual General
Meeting (AGM) and offered additional
shareholder engagement to comply with
corporate governance requirements
–
Determined arrangements for new
CEO and CFO in accordance with the
Remuneration Policy
–
Ensured the way we operate as a
Committee reflects best practice
guidelines, including review of our terms
of reference and Committee
performance review to support
continuous improvement
2026 priorities
–
Maintain stretching targets for variable
reward, ensuring continued alignment
between executive remuneration and
the broader shareholder experience
–
Ensure a robust pay for performance
philosophy, supporting the attraction,
retention and motivation of senior leaders
–
Ensure compliance with regulatory
requirements and the Committee’s terms
of reference, maintaining high standards
of governance and accountability, and that
all decisions remain consistent with the
Remuneration Policy and best practice
Key areas of responsibility
–
Designs, recommends and implements
Convatec’s Remuneration Policy, packages
for the Executive Directors and other CELT
members, and sets the fee for the
Non-Executive Chair
–
Ensures appropriate alignment of executive
remuneration with the remuneration
approach across the wider organisation
In this section you will find
Letter from the Chair of the
Remuneration Committee
Update from the Committee Chair on the
activities and decisions made in 2025 on
pages 105 and 106.
Our remuneration at a glance
Page 107
Our Annual Report on Remuneration
How we implemented our Remuneration
Policy during 2025 and how we intend to apply
it in 2026, pages 110 to 121. This includes
insight on the wider workforce, including our
CEO pay ratio.
Meetings held
6
1 additional meeting in 2025
(2024: 5)
Attendance
100%
(2024:90%)
Our driving principles behind
remuneration remain unchanged:
1
Incentivise sustained strong financial
performance
2
Align rewards with the delivery of the
Group’s strategy and long-term
interests of shareholders
3
Help attract, motivate and retain the
best talent to deliver the Group’s
strategy and create long-term
shareholder value
Remuneration principles
105
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Committee focus and
activities during 2025
Policy development
–
Developed new Policy, incorporating
investor feedback, and submitted
for AGM approval
–
Received approval for new Policy
and offered additional engagement
with shareholders
–
Implemented Policy in year
Remuneration packages
–
Approved Executive Director and CELT
salaries for 2025
–
Approved the 2024 bonus outcomes
for Executive Directors and CELT
–
Approved 2025 Long-Term Incentive
Plan (LTIP) award levels for Executive
Directors and CELT
–
Determined death-in-service benefits
to be applied to former CEO, Karim
Bitar
–
Approved fixed and variable pay for
new CEO, Jonny Mason and new CFO,
Fiona Ryder
Setting performance targets
–
Reviewed and set financial targets
for 2025 annual bonus and 2025
LTIP awards, in the context of
multiple internal and external
reference points for performance
over the relevant period
Equity incentives
–
Confirmed outcome of Performance
Share Plan (PSP) awards linked to
three-year performance period
ended 31 December 2024
–
Reviewed developments in the
executive remuneration landscape
Workforce remuneration
–
Received updates on workforce
remuneration policies and practices,
including improvements made to
insured benefits and retirement plans
–
Received updates on our gender pay
gap position within the UK, and pay
equity across the global business
–
Reviewed global trends in pay equity
and transparency and how this may
impact Convatec, with a focus on
readiness for EU Pay Transparency
Directive requirements
Effectiveness
–
Undertook an annual performance
review of the Committee, including
setting of annual objectives and review
of terms of reference
–
Worked with Willis Towers Watson
to analyse AGM and global trends
Letter from the Chair
of the Remuneration
Committee
On behalf of the Board, I am pleased to
present the report of the Remuneration
Committee for the year ended 31 December
2025. Throughout this year, the
Committee has maintained a strong
focus on ensuring that our remuneration
framework underpins the delivery of
our strategy, is closely aligned with
shareholder interests, and considers the
needs and experiences of our workforce.
We are committed to regularly reviewing
our reward structures to ensure they
remain competitive and effective in
attracting, motivating and retaining the
talent required to deliver our strategy.
Introduction
In 2025, we sought your approval for
three key resolutions at the AGM: the
Directors’ Remuneration Report; the
revised Remuneration Policy (the
Policy); and the Convatec Group
Omnibus Incentive Plan. The revised
Policy was developed following extensive
engagement with shareholders and
proxy voting agencies, and we were
pleased to receive your support.
However, as the vote for the Policy
and the Omnibus Incentive Plan was
less than 80%, we offered further
engagement as we highly value our
shareholders’ views and appreciate
the strong support we have received
in recent years. Limited additional
engagement was requested by
shareholders, and a statement was
published on Convatec’s website
accordingly in compliance with the UK
Corporate Governance Code. We have
applied the Policy in our remuneration
decisions for 2025 and remain steadfast
in ensuring alignment with our business
strategy and our ongoing ability to
attract and retain high-calibre
international talent.
CEO succession
In August 2025, we announced that Karim
Bitar, CEO, would be taking medical leave.
Jonny Mason, then CFO, was appointed
as interim CEO with immediate effect,
and Fiona Ryder, Group Financial
Controller, was appointed interim CFO.
Fiona at that time was not appointed
as an Executive Director. Following the
announcement on 27 October 2025 of
Karim’s very sad passing, the Nomination
Committee undertook a rigorous
process,
culminating in the permanent
appointments
of Jonny as CEO and Fiona as
CFO on 6 November 2025. Fiona also then
joined the Board as an Executive Director.
Jonny Mason’s salary for the interim role
was set at £1,010,000, matching that of
Karim Bitar; existing bonus and long-
term incentive provisions remained in
place. Upon his permanent appointment,
to the position of CEO, the Committee
agreed to maintain the same salary and
bonus arrangements, while increasing
his long-term incentive provisions, from
2026, to those previously received by
Karim as CEO. Jonny is required to build
a shareholding of 500% of salary from
his appointment date as permanent CEO.
In determining the appropriate
remuneration for Fiona Ryder’s
appointment as permanent CFO, the
Committee considered pay practices
in our global MedTech peer group as
well as those in the FTSE 100. With her
substantial experience as a finance leader
in global businesses, including roles in the
UK, US and Singapore, and her significant
contribution to Convatec’s strategic focus
on simplification and productivity, Fiona
was offered the same remuneration
package as her predecessor, Jonny
Mason. This includes a base salary of
£548,500 and a maximum annual bonus
opportunity of 200%, effective from her
date of appointment, 6 November 2025.
Long-term incentive provisions will apply
from 2026 and be aligned to those
previously received by Jonny as CFO.
Fiona is required to build a shareholding
of 300% of salary from her appointment
date as CFO.
Remuneration arrangements for Karim
Bitar were managed within the terms set
out in the Directors’ Remuneration Policy,
and in accordance with share plan rules
relating to death in service. Further details,
including exercises of discretion by the
Committee, are available on page 115.
Incentive outcomes for the year
ended 31 December 2025
The Board is pleased with Convatec’s
continued strategic progress and
performance in 2025, delivering long-term
returns to our shareholders. In determining
annual and long-term incentive outcomes,
the Remuneration Committee considers
not only the financial results against set
targets but also Convatec’s broader
business performance.
106
Convatec Annual Report and Accounts 2025
Governance
Directors’ Remuneration report
continued
The year ahead and alignment
of incentives with strategy
The Committee has approved a base
salary increase of 3% for both Executive
Directors, effective from 1 April 2026,
following a review of market practice in
our global MedTech peer group and the
FTSE 100. This increase is aligned to that
being provided to UK employees in 2026.
The performance measures for annual
and long-term incentives will remain
unchanged for 2026, as they continue to
support the Company’s strategic
priorities. To further align with the CELT
and the wider workforce, the annual
incentive plan weightings will be
realigned: adjusted operating profit will
remain at 40%; organic revenue growth
will reduce to 20% (from 25%); free cash
flow to equity will increase to 20% (from
15%); and strategic personal objectives
will remain at 20%, with 5% relating to
quantifiable environmental social and
governance (ESG) metrics. The maximum
annual bonus opportunity for both
Executive Directors will remain at 200%
of base salary.
Long-term incentives will continue
to be delivered through a combination
of Performance Shares and Restricted
Shares, with a maximum opportunity
of 525% of salary for Jonny Mason and
325% for Fiona Ryder. Jonny will be
granted a Performance Share Award (PSA)
of 425% of salary and a Restricted Share
Award (RSA) of 100% of salary. Fiona will
be granted a PSA of 250% of salary and
a RSA of 75% of salary. The vesting of the
Performance Share element of awards
will be based on a combination of metrics:
organic revenue growth (25%), adjusted
earnings per share (EPS) growth (50%)
and relative TSR against the constituents
of the S&P Global
Healthcare Equipment
& Services index (25%).
Annual incentive
The Group achieved 6.4% organic
revenue growth (excluding
InnovaMatrix
®
), adjusted operating
profit growth was 10.2% on a constant
currency basis, and free cash flow to
equity was $241m; more information
is available in the Financial Review on
pages 22 to 27. Based on these results,
the Committee approved payouts under
the 2025 annual bonus as follows: 81.6%
of maximum for Karim Bitar; 81.6% of
maximum for Jonny Mason, calculated
using a pro-rated salary to reflect his
time as CFO, interim CEO, and CEO;
and 81.6% of maximum for Fiona Ryder,
based on her tenure as an Executive
Director. The Committee further
reviewed these formulaic outcomes
in the context of the Group’s overall
performance and stakeholder
experience. The Committee was satisfied
that the formulaic outcomes under the
incentive plans were a fair reflection
of the overall strong performance,
against the context of the wider Group
achievement and the shareholder
experience and did not use any
discretion to alter these values. A full
breakdown of the stretching targets we
set, and the associated final outcomes
is provided within this disclosure.
Long-term incentive
Over the three-year period 2023-25,
strong financial performance in terms
of organic revenue growth, annualised
growth in adjusted profit before tax,
and financial returns relative to our total
shareholder return (TSR) peer groups
resulted in a vesting outcome of 85.1%
of maximum for the 2023 PSP for Jonny
Mason and Fiona Ryder. The Committee
approved an outcome of 85.2% for Karim
Bitar in accordance with the plan rules,
using actual TSR performance at the date
of the vesting of his award due to death
in service. The Committee determined
the formulaic vesting outcomes were
appropriate given the business’s wider
performance and did not apply any
discretion to adjust the outcome.
As detailed on page 112 a Restricted
Share Plan (RSP) award also vested at
100% for Fiona Ryder; this was granted
prior to her appointment as an
Executive Director.
In summary
Convatec has demonstrated resilience
in the face of uncertainty and change.
Our new CEO and CFO are well-positioned
to lead the Company and execute our
strategy. With Convatec’s strong
innovation pipeline and ongoing
efforts to enhance productivity, we
are confident we can deliver long-term
value to stakeholders as we bring to
life the Company’s vision,
Pioneering
trusted medical solutions to improve
the lives we touch
, supported by our
remuneration arrangements.
On behalf of the Committee, thank
you for your continued support and
engagement. I hope you will support the
Directors’ Remuneration Report for 2025
at the forthcoming AGM.
Brian May
Chair of the Remuneration Committee
23 February 2026
107
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Maximum
Single figure 2025
On-target
Minimum
£9,473,682
£7,647,606
£6,000,102
£987,895
Minimum
Annual bonus
LTIP
Maximum
Single figure 2025
On-target
Minimum
£795,807
£754,013
£682,796
£103,493
Minimum
Annual bonus
LTIP
Maximum
Single figure 2025
On-target
Minimum
£4,046,901
£3,574,638
£2,772,995
£829,929
Minimum
Annual bonus
LTIP
Remuneration at a glance – 2025
This section provides a summary of the way we have implemented the Policy in 2025.
2025 remuneration: outcomes vs performance scenarios
2025 annual bonus outcomes
The charts below show how actual performance contributed to the bonus payouts for the Executive Directors for 2025:
Chief Executive Officer Jonny Mason (£’000)
Annual bonus: 163.2% of salary (£1,199,292); 81.6% of maximum bonus
opportunity. LTIP: vesting of 85.1% of maximum (£1,145,669); and the
grant of a restricted share award of £399,748.
Adjusted operating profit¹ (40% weighting)
Free cash flow to equity (15% weighting)
Organic revenue growth¹ (25% weighting)
Personal strategic objectives (inc. ESG) (20% weighting)
Former Chief Executive Officer Karim Bitar (£’000)
Annual bonus: 163.2% of salary (£1,647,815); 81.6% of maximum bonus
opportunity. LTIP: early vesting of all awards due to death in service
(£5,011,896). See page 115 for details.
Karim’s outcomes and performance scenarios have been calculated
as follows:
–
Maximum is fixed remuneration plus maximum bonus based on
full-year salary and LTIPs (for 2023–25; 2024–26; and 2025–27)
at maximum with time pro rating as detailed on page 115
–
Single figure is as per the single figure table on page 111
–
On-target is fixed remuneration plus on target bonus based on
full-year salary and LTIPs (for 2023–25; 2024–26; and 2025–27)
at target with time pro-rating as detailed on page 115
–
Minimum is fixed remuneration earned until the date of death
in service
Chief Financial Officer Fiona Ryder (£’000)
Annual bonus: 163.2% of salary (£137,960); 81.6% of maximum bonus
opportunity. LTIP: vesting of 85.1% of maximum (£60,490) for PSP, and 100%
(£71,124) for RSP; and the grant of a restricted share award of £380,945.
Target = Assumes fixed remuneration plus target annual
bonus (50% of maximum) and 60% vesting of LTIP awards
Performance outcome: 100% of maximum forthis element.
1.
Adjusted operating profit is calculated on a constant currency basis using a
budget rate.
Performance outcome: 32% of maximum forthis element. More information
on the free cash flow to equity is available in the Financial Review on pages 22
to 27.
Performance outcome: 74.1% of maximum for this element.
1.
Organic revenue growth is calculated on a constant currency basis using
at budget rate, excluding InnovaMatrix
®
.
Performance outcome: 91.3% of maximum for this element.
Personal strategic objectives were set for each Executive Director in relation
to the following areas of strategic focus for 2025: customer, people, product/
service improvement and Business performance. Details of the objectives set
forthe Executive Directors, andperformance against these, are on page 111.
Target = Assumes fixed remuneration plus target annual
bonus (50% of maximum) and 60% vesting of LTIP awards
Threshold
Target
Maximum
Actual
4%
5.5% growth
7% growth
6.2% growth
Karim Bitar
Jonny Mason
Fiona Ryder
91.3%
of max
91.3%
of max
91.3%
of max
Threshold
Target
Maximum
Actual
$505m
$520m
$550m
$551m
Threshold
Target
Maximum
Actual
$234m
$258m
$282m
$241m
108
Convatec Annual Report and Accounts 2025
Governance
Threshold
Maximum
Actual
3.5%
6.5%
6.6%
Threshold
Maximum
Actual
3.1%
12.5%
0.0%
Threshold
Maximum
Actual
7%
12.5%
12.7%
Threshold
Maximum
Actual
3.1%
12.5%
10.1%
Directors’ Remuneration report
continued
Our remuneration at a glance 2026
This section provides a summary of proposed implementation relating to 2026, as permitted by our Remuneration Policy, which
was approved by shareholders at the AGM on 22 May 2025, a copy of which can be found at www.convatecgroup.com/siteassets/
convatec-ara-2024.pdf. Our Policy reflects principles which the Committee considered as part of its development:
–
Clarity:
we are committed to transparent disclosure of our remuneration structures and decisions, including clear rationale and
context for these.
–
Simplicity:
our Policy and approach to its implementation is simple and well-understood internally and externally.
–
Risk:
remuneration arrangements are designed not to encourage or reward excessive risk taking, with targets set to be stretching and
achievable, and retaining Committee discretion to adjust formulaic bonus and LTIP outcomes to align with underlying performance.
–
Predictability:
there are defined threshold and maximum pay scenarios, which we have disclosed on page 107.
–
Proportionality:
there is a clear and direct link between performance and reward.
–
Alignment to culture:
the Committee has designed the Policy to align with the Group’s culture, driving behaviours that promote
the long-term and sustainable success of the Group for the benefit of all stakeholders.
Details of how the Company plans to implement the Policy for the year ending 31 December 2026 are provided below.
Our approach to implementing our Remuneration Policy in 2026
Rationale
Link to strategy
Base salary
Reviewed
annually
Policy:
Benchmarked periodically against comparable roles at
international MedTech peers, as well as UK-listed companies of similar
size and complexity. In deciding base salary levels, the Committee
considers personal performance, including the individual’s contribution
to the achievement of the Group’s strategic objectives. The Committee
will also consider employment conditions and salary levels across the
Group, and prevailing market conditions in the geographies in which the
Group competes for talent. Base salaries are reviewed annually with any
increases normally aligned with those of the wider workforce, and
effective from 1 April.
Implementation from April 2026:
Jonny Mason: £1,040,300 (+3.0%);
Fiona Ryder: £565,000 (+3.0%).
Base salaries are aligned
with the broader market
trends and UK workforce
increase of 3.0%.
Innovate
Build
Pension and
benefits
Policy:
Executives may receive a contribution to a personal pension
plan, a cash allowance in lieu or a combination thereof. Other benefits
normally include car allowance, medical insurance and life insurance,
and are set at a level considered appropriate taking into account
market practice and consistent with the wider workforce.
Implementation in 2026:
No change to the range of benefits
provided. Jonny Mason and Fiona Ryder will continue to receive a
pension benefit of 8.5%, aligned to that of the wider UK workforce.
Pension levels for all
Executive Directors
are aligned to the wider
workforce rate, in line
with prior commitment
to investors and market
expectations.
Annual bonus
Policy:
Maximum opportunity: 200% of salary (target: 50% of
maximum). Performance measures, targets and weightings are set at
the start of each year. Financial performance will normally be
weighted 80% of the overall opportunity, with the remainder (up
to 20%) linked to the achievement of personal strategic objectives. A
minimum of 5% of the bonus opportunity will be based on quantifiable
ESG metrics. One-third of any bonus earned is deferred into shares
normally for three years. Malus and clawback provisions apply.
Implementation in 2026:
Maximum opportunity of 200% of salary
for Jonny Mason and Fiona Ryder. The annual bonus will be based on:
adjusted operating profit (weighted 40%); organic revenue growth
(excluding InnovaMatrix
®
) (20%, reduced from 25% in 2025); free
cash flow to equity (20%, increased from 15% in 2025); and personal
strategic objectives (20%), of which 5% relate to quantifiable ESG
metrics. Adjusted operating profit and organic revenue are calculated
on a constant currency basis using a budget rate.
For 2026, we have set a target
for revenue growth excluding
InnovaMatrix
®
, and these
revenues will be removed
from the base year and 2026
outcomes when assessing
performance. We have done
this recognising the year-on-
year impact on group growth
of the revised CMS payment
rates for skin substitutes in
the US. This is only being
applied to the revenue metric,
and full disclosure of targets
and resultant performance will
be made in the next Directors’
Remuneration report.
Focus
Innovate
Simplify
Build
Execute
Organic revenue growth
(25% weighting)
Three-year compound
annualised growth in
adjusted PBT (50% weighting)
Relative TSR versus
FTSE 50–150
Relative TSR versus constituents
of S&P Global Healthcare
Equipment & Services Index
(12.5% weighting)
Performance outcome: 100%
of maximum for this element.
Performance outcome: 100%
of maximum for this element.
Performance outcome: 0%
of maximum for this element.
Performance outcome: 80.4%
of maximum for this element.
2023–25 LTIP outcomes
The charts below show how actual performance contributed to the LTIP (Performance Shares) awards vesting for the Executive
Director for the three-year period ended 31 December 2025. Overall, the LTIP vesting outcome was 85.1% of maximum.
109
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Our approach to implementing our Remuneration Policy in 2026
Rationale
Link to strategy
LTIP
Policy:
The maximum opportunity permissible under the LTIP will
be 525% for the CEO and 325% for the CFO. This is delivered through
a combination of Performance Shares and Restricted Shares.
Implementation in 2026:
Performance Shares: Award opportunity
of 425% of salary for Jonny Mason and 250% for Fiona Ryder.
Awards will vest subject to adjusted Earnings per share (EPS) growth
(weighted 50%), organic revenue growth (weighted at 25%), and TSR
versus the S&P Global Healthcare Equipment & Services Index (25%)
over the three financial years to 31 December 2028.
Restricted Shares:
Award opportunity of 100% of salary for Jonny
Mason and 75% of salary for Fiona Ryder, vesting in March 2029.
Malus and clawback provisions will apply to all awards made under
the LTIP. A two-year post-vesting holding period will also apply.
Full details of the performance targets set for these awards (where
applicable) and the timing and basis for when awards will be made
in 2026 is provided on page 118.
The LTIP continues to
underscore sustainable
growth and long-term value
creation and drive retention.
The performance conditions
(where applicable) and
reward structure are
designed to attract,
incentivise and retain
high-calibre talent from the
global healthcare sector and
more broadly.
Focus
Innovate
Simplify
Execute
Shareholding
requirement
Policy:
Executives are required to build up shareholdings of 500% of salary
for the CEO and 300% of salary for the CFO. These must be retained whilst
the Executive Directors remain on the Board. 50% of any net vested share
awards (after sales to meet tax liabilities) must be retained until the
minimum shareholding requirements are met.
Implementation:
Our agreed approach includes ordinary shares held
outright, shares not subject to future company performance conditions (on
a net of tax basis) and vested shares under our LTIP in a mandatory holding
period post vesting. At the end of 2025, Jonny Mason held shares worth
161% of his year-end 2025 salary and Fiona Ryder held shares worth 91%.
Executive Directors are required to hold 100% of their in-situ shareholding
requirements for 12 months after cessation and50% for the next 12 months.
Our shareholding
requirement is designed
to demonstrate alignment
with shareholder interest
and fosters a culture of
ownership and long-term
investment in the
Company’s success.
Focus
Remuneration principles
The Committee recognises and manages conflicts of interest when determining the Policy and no director is responsible for setting
their own remuneration. When setting remuneration for the Executive Directors, the Committee considers the following principles:
–
Incentivise sustained strong financial performance.
–
Align rewards with the delivery of the Group’s strategy and long-term interests of shareholders.
–
Help attract, motivate and retain the best talent to deliver the Group’s strategy and create long-term shareholder value.
–
Reflect market best practice and consistently adhere to principles of good corporate governance and encourage good risk management.
Malus and clawback
The Committee regularly reviews the Company’s approach to malus and clawback, and our Malus and Clawback Principles
determine the trigger events and time periods that these provisions relate to. Both our annual bonus and LTIP awards are covered
by these provisions, and they apply in circumstances including:
–
Cases of fraud, negligence or gross misconduct by the Executive Director;
–
Material financial misstatement in the audited financial results of the Group;
–
Error in calculation; or
–
Other exceptional circumstances at the Committee’s discretion.
The timeline over which malus and clawback provisions could be used is shown in the table below. These have been determined
to appropriately balance the timing of determination of awards/vesting with the underlying performance metrics that are used
to determine award levels and align with mandated deferral period under the annual bonus or holding period post vesting of
long-term incentives awards.
Cash bonuses will be subject to clawback, with deferred bonus shares being subject to malus, over the deferral period. LTIP awards
will be subject to malus over the vesting period and clawback from the vesting date to the second anniversary of the relevant vesting
date.
This timeframe is effective and proportionate to the operational nature of the business, allowing for malus on deferred bonus
shares for up to three years following the determination of Company performance upon which the award was made. For LTIP
awards this aligns with the mandatory holding period in place for shares post vesting and again extends for a significant timeframe
(five years) from when the original grant of awards was made.
The malus and clawback provisions were not used in the 2025 reporting period.
Summary of malus and clawback
Malus
Clawback
Annual Bonus – Cash Payments
Up to point of cash payment
Yes – aligned to share deferral period
Annual Bonus – Deferred Shares
Up to point of vest (three years after completion of
performance period that determined the award)
None post vesting
Share awards under LTIPs
During vesting period
Up to 2nd anniversary of respective vesting date
110
Convatec Annual Report and Accounts 2025
Governance
Directors’ Remuneration report
continued
Our annual report on remuneration
Introduction
This section of the Remuneration report provides details of how our Remuneration Policy was implemented during the financial
year ended 31 December 2025, and how it will be implemented during the year ending 31 December 2026. It has been prepared
in accordance with the provisions of the Companies Act 2006 and Schedule 8 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008 (as amended). It also meets the requirements of the FCA’s Listing Rules.
In accordance with the Regulations, the following sections of the Remuneration report are subject to audit: the single total figure
of remuneration for Executive Directors and Non-Executive Directors, and accompanying notes (pages 111 and 113), scheme
interests awarded during the financial year (page 113), payments to past Directors (page 115) and the statement of Directors’
shareholdings (page 121). The remaining sections of the report are not subject to audit.
Committee membership in 2025
Details of the membership of the Committee, the number of times it met during 2025 and attendance at its meetings are set out
on page 104.
Committee responsibilities
The Committee’s key areas of responsibility are also set out on page 104.
Committee performance evaluation
A performance evaluation of the Remuneration Committee was carried out in 2025, facilitated by an external consultant, Lintstock,
by way of a detailed questionnaire. The evaluation confirmed that the Committee was functioning effectively and addressing all
areas of its remit in a systematic manner. Recommendations included ensuring that Committee members continue to have full
access to appropriate training and support, to include UK Governance trends, recognising that a number of Committee members
were based in the US.
Advisers
During the year, Willis Towers Watson (WTW) reported to the Chair of the Committee and provided reward survey benchmark
data to the Company. WTW is considered to be independent by the Committee. Fees paid to WTW are determined on a time and
materials basis and totalled £100,000 (excluding expenses and VAT) for the 2025 financial year in its capacity as adviser to the
Committee. WTW is a member of the Remuneration Consultants Group and, as such, voluntarily operates under the Code of
Conduct in relation to executive remuneration consulting in the UK (www.remunerationconsultantsgroup.com).
Summary of shareholder voting
The following table shows the results at the 2025 AGM of the advisory vote on the 2024 Annual Report on Remuneration and the
binding vote on the 2025 Remuneration Policy.
Resolution
Votes “for”
Votes “against”
Votes “withheld”
1
2025 AGM: To approve the Directors’ Remuneration Policy (Binding)
67.04%
32.96%
32,567,687
2025 AGM: To approve the Directors’ Remuneration Report (Advisory)
98.20%
1.80%
112,303
2025 AGM: To approve the Convatec Group Omnibus Incentive Plan (Binding)
75.64%
24.36%
32,556,710
1.
Votes “withheld” are not votes in law and, therefore, have not been included in the calculation oftheproportion of votes “for” or “against” each resolution.
111
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Single total figure of remuneration for Executive Directors (audited)
The following table sets out a single figure for the total remuneration received by each Executive Director for the 2025 financial year
and compares this with the equivalent figure for the 2024 financial year. The Remuneration Policy has operated as intended in 2025
with no deviations from the approved Policy.
LTIP
4
Director
Base
salary
’000
Taxable
benefits
2
’000
Annual
bonus
3
’000
Vested share
awards
’000
Restricted
share awards
5
’000
Pension
benefit
6
’000
Total
fixed
7
’000
Total
variable
8
’000
Total
’000
Karim Bitar
1
2025
£835
£82
£1,648
£5,012
£71
£988
£6,660
£7,648
2024
£972
£76
£1,937
£2,230
£83
£1,131
£4,167
£5,298
Jonny Mason
9
2025
£735
£32
£1,199
£1,146
£400
£63
£830
£2,745
£3,575
2024
£528
£16
£1,052
£1,243
£45
£589
£2,295
£2,884
Fiona Ryder
10
2025
£84
£12
£138
£132
£381
£7
£103
£651
£754
1.
Karim Bitar’s pay and benefits reflects time served in the year up to and including the date of his death in service, which was also his last day of employment (26 October 2025).
2.
Benefits consist primarily of car allowance, private medical insurance, life assurance and permanent health insurance. For Karim Bitar, private medical was provided in the form
of a healthcare allowance of £50,000 payable per annum.
3.
Reflects the total bonus awarded for performance in the relevant financial year. One-third of the bonus earned by Jonny Mason and Fiona Ryder is deferred into shares for three
years (the vesting of which is not subject to any further performance conditions). The bonus for Karim Bitar will be paid entirely in cash, to his estate, following the decision taken
by the Committee to exercise discretion.
4.
The figure represents the estimated value of LTIP awards made to Jonny Mason and Fiona Ryder in March 2023; although Fiona Ryder was not an Executive Director at the time
of the grant of the award, the Committee has chosen to disclose her figure on a voluntary basis. Fiona’s 2023 award represented 60% of her January 2023 salary, with 50%
provided in the form of a PSP and 50% provided in the form of a RSP, in line with other senior management at that time. The award for Jonny, and the PSP for Fiona, shall vest on
the third anniversary of grant at 85.1% of maximum based on performance over the three-year performance period ending 31 December 2025 (further details ofwhich are set
out on page 112); the RSP for Fiona will vest in full. The estimated values shown in the table above use the three-month average share price for the period ended 31December
2025 (£2.38) and will be trued up in next year’s report to reflect their value (including any accrued distribution which were reinvested into shares) on the vesting date. The 2025
figure for Karim Bitar is the value of LTIP (performance and restricted share) awards made to him in March and June 2023, March 2024, and March and June 2025, which vested
in October 2025 following his death in service; full details are provided on page 115. The value of vested shares has increased by £83k for Jonny Mason since the respective
award dates as a result of share price appreciation (awards were granted at £2.21 per share). The 2024 figure has been updated from that disclosed in our last Annual Report for
Jonny Mason and Karim Bitar to reflect the actual value of the 2022 LTIP when it vested in March 2025, with an associated share price of £2.56.
5.
The figure represents the value of RSA made to Jonny Mason in June 2025 (75% of salary, with a share grant price of £2.65 per share). Although Fiona Ryder was not an Executive
Director at the time of the grant of her RSP in March 2025, the Committee has chosen to disclose her figure on a voluntary basis (share grant price was 265p per share). These
values are reported as they are included in the share shareholding figures on a net of tax basis.
6.
Karim Bitar’s, Jonny Mason’s and Fiona Ryder’s pension benefits in the year are equivalent to 8.5% of base salary, in line with the wider UK workforce.
7.
Total of base salary, taxable benefits and pension benefit.
8.
Total of annual bonus and LTIP.
9.
Jonny Mason’s 2025 figures for base salary, annual bonus, and pension, reflect his time and salary in the positions of CFO, interim CEO and CEO.
10. Fiona Ryder’s figures are from her date of appointment to Executive Director, 6 November 2025.
Incentive outcomes for the year ended 31 December 2025 (audited)
Annual bonus in respect of performance in the 2025 financial year
For 2025, the Executive Directors serving during the year had a maximum bonus opportunity of 200% of their 2025 base salary. Any
payments under the annual bonus are normally payable two-thirds in cash and one-third in shares, deferred for three years; due to
Karim Bitar’s death in service, his payment will be made fully in cash to his estate. The on-target opportunity was 50% of maximum.
The annual bonus for 2025 was based on a combination of adjusted operating profit
1
(weighted 40%), organic revenue growth
1
(25%), free cash flow to equity (15%) and personal strategic objectives (20%), of which 5% relate to quantifiable ESG metrics.
The tables below summarise the structure of the 2025 annual bonus, the targets set, our performance over the financial year and
the resulting annual bonus payout.
Performance targets
Financial measure
Link to corporate strategy
Threshold
0% payout
Target
50% payout
Maximum
100% payout
Actual
performance
Adjusted operating profit
1
Focus
Innovate
Simplify
$505m
$520m
$550m
$551m
Organic revenue growth
1
Focus
Innovate
Simplify
4%
5.5%
7%
6.2%
Free cash flow to equity
Simplify
Execute
$234m
$258m
$282m
$241m
Objectives and actual performance
CEO
(Karim Bitar and
Jonny Mason)
–
Grew key market sales ahead of other markets.
–
Customer net promoter score (cNPS) fully embedded across all business units: actioning insights leading to increased customer loyalty.
–
Convatec’s employee net promotor score (eNPS) remains in the top decile for colleague engagement with strong progress made in all categories
and two global surveys carried out.
–
Key market strategy, delivering sustainable and profitable growth, a strong cash flow position and strengthening Convatec’s competitive position.
–
Effective pipeline progression with strong pipeline of new products.
–
Continued delivery of improvements in overall quality of products, greenhouse gas emissions and increased diversity through women in senior
leadership positions.
CFO
(Jonny Mason and
Fiona Ryder)
–
Guided the business to deliver on all financial targets for the year, including revenue growth; margin expansion; earnings increase; and cash generation.
–
Continued expansion of Finance, IT and Convatec (formerly ‘Global’) Business Services (CBS) scope, with improved services at lower cost, and roll-in
of Latin American countries.
–
Delivered process improvements in core processes (such as purchase to pay), evidenced by increases in eNPS.
–
Demonstrated succession planning with several internal senior promotions, including that of Fiona Ryder to the position of CFO.
–
Successful delivery of first year of IT transformation activity.
ESG targets in scope: Complaints per million (CPM), Scope 1 and 2 greenhouse gas emissions, vitality index and a diversity, equity
& inclusion metric linked to proportion of females in senior management roles. We successfully achieved a reduction in CPM by at
least 6% and attained a vitality index of 26%. We also reduced Scope 1 and 2 emissions by a further 2.6% in 2025 and had female
representation within senior management of 48% at year end, ahead of the stated target. For a comprehensive account of our
performance against these targets see pages 36, 40 and 51.
112
Convatec Annual Report and Accounts 2025
Governance
Directors’ Remuneration report
continued
Annual bonus in respect of performance breakdown
Director
Measure
Weighting
Maximum
opportunity
(% of salary)
Bonus calculation
(% of maximum)
(‘000)
Karim Bitar
Adjusted operating profit
1
40%
80%
100%
Organic revenue growth
1
25%
50%
74.1%
Free cash flow to equity
15%
30%
32.0%
Personal strategic objectives (inc. 5% in relation to ESG metrics)
20%
40%
91.3%
Total
100%
200%
81.6%
£1,648k
Jonny Mason
Adjusted operating profit
1
40%
80%
100%
Organic revenue growth
1
25%
50%
74.1%
Free cash flow to equity
15%
30%
32.0%
Personal strategic objectives (inc. 5% in relation to ESG metrics)
20%
40%
91.3%
Total
100%
200%
81.6%
£1,199k
Fiona Ryder
2
Adjusted operating profit
1
40%
80%
100%
Organic revenue growth
1
25%
50%
74.1%
Free cash flow to equity
15%
30%
32.0%
Personal strategic objectives (inc. 5% in relation to ESG metrics)
20%
40%
91.3%
Total
100%
200%
81.6%
£138k
1.
Adjusted operating profit and organic revenue growth (excluding InnovaMatrix
®
) are both calculated on a constant currency basis using a budget rate.
2. Fiona Ryder’s outcomes are shown for time as an Executive Director.
One-third of the bonus earned by the Jonny Mason and Fiona Ryder will be deferred into shares to be held for three years. This will
be awarded in March 2026 and full details of this element of the award will be disclosed in next year’s Annual Report. As detailed
earlier, the bonus for Karim Bitar will be paid in full in cash in March 2026 to his estate and was based on his full year salary.
Scheme interests vesting in respect of the year ended December 2025 (audited)
In March 2023, Karim Bitar and Jonny Mason were granted conditional share awards under the LTIP. These LTIP awards were
subject to performance over the three-year period ended 31 December 2025, and performance conditions based on a combination
of: organic revenue growth; adjusted profit before income taxes (PBT) growth; and relative TSR performance, over a three-year
period. Fiona Ryder was also granted conditional share awards in March 2023, as previously detailed. She was not an Executive
Director at the time of the grant of the award, but the Committee has chosen to disclose her figure on a voluntary basis; 50% of her
award was provided in the form of a PSP and 50% provided in the form of a RSP, in line with other senior management at that time.
The award for Jonny, and the PSP for Fiona, shall vest on the third anniversary of grant at 85.1% of maximum; 100% of the RSP will
vest for Fiona, also on the third anniversary of grant.
The table below sets out details of the targets, and performance against these:
Measure
Weighting
Performance
range
Payout range
Actual
performance
Weighted
vesting
outcome
Organic revenue growth
25%
3.5% to 6.5%
Threshold (3.5%) = 25% award through to
Stretch (6.5% or above) = Full award
6.6%
100%
Three-year compound annualised
growth in adjusted PBT
1
50%
5.3% to 12.54%
p.a.
Threshold (5.3%) = 25% award through to
Stretch (12.54% or above) = Full award
12.7%
100%
Three-year Relative TSR rank vs
constituents of the FTSE 50 to 150
excluding investment trusts
12.5%
Median to 90th
percentile
Median = 25% award
Stretch (75th percentile) = 90% award
Max (90th percentile or above) = 100% award
28.9 percentile
0%
Three-year relative TSR rank vs
constituents of the S&P Global
Healthcare Equipment & Services index
12.5%
Median to 90th
percentile
Median = 25% award
Stretch (75th percentile) = 90% award
Max (90th percentile or above) = 100% award
71.3 percentile
80.4%
Total %
vesting
85.1%
1.
Final vesting outturns and the associated performance range on the PBT measure have been adjusted to reflect the impact of M&A over the period in line with the
Remuneration Policy (performance range adjusted to 5.3% to 12.5% from 7% to 14%).
Accordingly, Jonny Mason and Fiona Ryder’s 2023 LTIP awards will vest on the third anniversary of grant as set out below;
Karim Bitar’s award vested in October 2025 due to his death in service and was slightly higher due to a marginally reduced TSR
outcome at year end compared to that used to calculate his early vesting outcome.
Director
Date of grant
Number awarded
% vesting
Number vesting
Karim Bitar
15 March 2023
1,264,258
85.2%
1,076,516
Jonny Mason
15 March 2023
565,610
85.1%
481,051
Fiona Ryder
PSP
RSP
15 March 2023
15 March 2023
29,864
29,864
85.1%
100%
25,399
29,864
113
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Scheme interests awarded in 2025 (audited)
2025 LTIP awards
During the year ended 31 December 2025, the Executive Directors were awarded conditional share awards under the LTIP, details
of which are summarised in the table below. They are based on Convatec performance from 1 January 2025 to 31 December 2027.
Director
Date of grant
Number awarded
Award price
1
Face value
Vesting date
Value
% of
annualised salary
Karim Bitar
2
PSP
PSA
RSA
11 March 2025
2 June 2025
2 June 2025
1,108,169
461,737
369,389
£2.66
£2.66
£2.66
£2,944,737
£1,226,974
£981,577
300%
125%
100%
26 October 2025
26 October 2025
26 October 2025
Jonny Mason
PSP
RSA
11 March 2025
2 June 2025
501,448
150,434
£2.66
£2.66
£1,332,498
£399,748
250%
75%
11 March 2028
11 March 2028
Fiona Ryder
3
PSP
RSP
11 March 2025
11 March 2025
30,462
143,358
£2.66
£2.66
£80,947
£380,945
30%
130%
11 March 2028
11 March 2028
1.
The LTIP face values are determined as a percentage of each Executive Director’s annualised salary on 11 March 2025 and converted into numbers of conditional shares
using the average of the three-day closing price preceding the date of grant.
2. The vesting date for awards provided to Karim Bitar was 26 October 2025, due to his death in service. Further details can be found on page 115.
3. At the time of the grant of these awards, Fiona Ryder was not an Executive Director. She received a usual award of 60% of annualised salary on 11 March 2025, equally
divided into PSP and RSPs, in line with other senior leaders; she was also granted an additional RSP to recognise her performance and succession potential, and provide
additional retention.
The performance conditions attached to these 2025 LTIP awards are set out in the table below.
Measure
Weighting
Threshold
(25% vesting)
Stretch
(90% vesting)
Maximum
(100% vesting)
Organic revenue growth
25%
4%
7%
Three-year compound annualised growth in adjusted earnings per share
50%
6% p.a.
14% p.a.
Three-year Relative TSR rank vs constituents of S&P Global Healthcare Equipment &
Services index (calculated in sterling)
25%
Median
75th
percentile
≥
90th
percentile
To the extent the 2025 LTIP awards vest, vested shares will be required to be held for a further two-year post-vesting holding period
for Jonny Mason and Fiona Ryder. Vesting will be determined on a straight-line basis between the points in the table above.
Deferred bonus award (audited)
One-third of the 2024 bonus earned by Karim Bitar and Jonny Mason was deferred into shares to be held for three years under the
Deferred Bonus Plan, (DBP), details of which are summarised in the table below. Due to death in service, the shares for Karim Bitar
vested in October 2025. Further details are provided on page 115.
Director
Date of grant
Number awarded
Award price
1
Value
Vesting date
£
% of 2023 bonus
Karim Bitar
11 March 2025
226,266
£2.76
£624,494
One-third
26 October 2025
Jonny Mason
11 March 2025
122,863
£2.76
£339,102
One-third
11 March 2028
1.
The award values are determined as one-third of each Executive Director’s 2024 bonus and converted into numbers of conditional shares using the average of the
three-day share price preceding the date of grant.
Fees retained for external non-executive directorships
Executive Directors may hold one external appointment and retain the fees paid for such a role. Jonny Mason is a non-executive
director for INSEAD on a voluntary basis, with no fee received. Fiona Ryder did not hold an external non-executive director
appointment during the year.
Single total figure of remuneration for Non-Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by each Non-Executive Director for the 2025 and 2024 financial years.
Fee
1
Benefits
2
Total
Non-Executive Director
2025
’000
2024
’000
2025
’000
2024
’000
2025
’000
2024
’000
John McAdam
£357
£346
£86³
£30
3
£443
£376
Margaret Ewing
£126
£123
–
–
£126
£123
Brian May
£103
£100
–
–
£103
£100
Heather Mason
£82
£81
–
£2
£82
£83
Constantin Coussios
£82
£79
–
£2
£82
£81
Kim Lody
£82
£81
£4
£3
£86
£84
Sharon O’Keefe
£92
£92
£4
£3
£96
£95
1.
Effective 1 April 2023, US dollar and Euro fee levels were introduced alongside the Sterling fee rates. Where a Non-Executive Director receives fees in US dollar or Euro, the
fees have been converted to Sterling using the average exchange rate at the time of payment.
2. In addition to the fees payable to each of the Directors, the Group reimburses reasonable expenses.
3. Includes travel related benefits provided to the Chair during the year.
114
Convatec Annual Report and Accounts 2025
Governance
Directors’ Remuneration report
continued
Percentage change in Director remuneration
The table below shows the percentage change in Director remuneration (from 2020 to 2025) compared to the average percentage
change in remuneration for other employees over the same period.
With effect from 6 November 2025, the Executive Directors were employed by Convatec Ltd (previously they were employed by
Convatec Group Plc). For the comparator group, we have used the population of UK-based employees whose remuneration is based
on overall Group business performance rather than that of a particular business unit. In determining the annual change in average
employee remuneration, we have looked at average annual pay increase (excluding promotions) and actual bonus payments. We
have only included employees who were in the Group in both years of the comparison to ensure consistency.
Annualised percentage
change from 2024 to 2025
Annualised percentage
change from 2023 to 2024
Annualised percentage
change from 2022 to 2023
Annualised percentage
change from 2021 to 2022
Annualised percentage
change from 2020 to 2021
Salary or
fees¹ Benefits²
Bonus³
Salary or
fees¹
Benefits²
Bonus
Salary or
fees¹
Benefits²
Bonus
Salary or
fees¹
Benefits²
Bonus
Salary or
fees¹
Benefits²
Bonus
Executive
Directors
Karim Bitar
(14)%
8%
(15)%
3%
0%
3%
2.5%
35.9%
39.9%
2.6%
0%
(6.5)%
1.9%
0%
(16.9)%
Jonny Mason
39%
49%
14%
3%
0%
3%
2.5%
1.3%
41.9%
n/a
n/a
n/a
n/a
n/a
n/a
Fiona Ryder
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Non-
Executive
Directors
John McAdam
3%
187%
n/a
4%
2226%
n/a
1.9%
197.1%
n/a
2.5%
213.0%
n/a
0%
n/a
n/a
Margaret
Ewing
2%
0%
n/a
3%
(88)%
n/a
2.6%
6.3%
n/a
0%
310.1%
n/a
(5.4)%
n/a
n/a
Brian May
2%
0%
n/a
3%
(81)%
n/a
2.4%
2.3%
n/a
0%
443.5%
n/a
8.4%
n/a
n/a
Heather
Mason
3%
0%
n/a
2%
0%
n/a
5.7%
(14)%
n/a
0%
134.2%
n/a
15.4%
n/a
n/a
Constantin
Coussios
3%
0%
n/a
4%
29%
n/a
2.0%
(1.7)%
n/a
0%
247.4%
n/a
15.4%
n/a
n/a
Kim Lody
3%
33%
n/a
2%
26%
n/a
5.7%
(19.5)%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Sharon
O’Keefe
0%
33%
n/a
2%
27%
n/a
6.1%
(9.7)%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Average per
employee
7.1%
11.5%
(9)%
6.4%
5.7%
18.8%
7.2%
3.1%
21.2%
5.3%
10.0%
13.5%
2.7%
(16.5)%
39.2%
Former Directors (who did not serve on the Board during the financial year under review) have been removed from the table. Relevant prior data and commentary can be
found in last year’s annual report.
1.
The salary for Karim Bitar in 2025 was paid to end of October 2025; the salary for Jonny Mason reflects his time in CFO, interim CEO and permanent CEO roles; there is no
percentage change shown for Fiona Ryder as she was only appointed to the position of Executive Director in November 2025. Effective 1 September 2020, the Non-
Executive Director fee structure was changed: the base fee was increased and committee membership fees were discontinued.
2. The year-on-year increase in benefits reflects the Group’s best estimate for the change in the average value of benefits for other employees. Non-Executive Directors’
benefits relate to taxable expenses (largely travel expenses). Karim Bitar received a healthcare allowance instead of private medical insurance which was set at £50,000
per annum in 2024. Jonny Mason’s figure reflects an increase to car allowance from his date of appointment to permanent CEO and legal support provided for his new
CEO contract of employment. Changes exclude the value of pension contributions.
3. The bonus for Jonny Mason reflects his time in CFO, interim CEO and permanent CEO roles.
115
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Relative importance of spend on pay
The table below shows shareholder distributions (i.e. dividends) and total employee pay expenditure for the financial years ended
31 December 2025 and 31 December 2024, and the percentage change year-on-year.
2025
$m
2024
$m
Year-on-year
change
Total employee pay expenditure
818
767
6.6%
Shareholder distributions
140
130
7.7%
Payments to past Directors and payments for loss of office (audited)
There were no payments to past Directors or payments for loss of office during the year.
Payments made to Karim Bitar’s estate following death in service (audited)
Details of Karim Bitar’s salary, benefits and bonus payable up to and including the date of his death, which was also his last day
of employment (26 October 2025) are set out in the single total figure table on page 111. His salary was paid through to 31 October
2025. His bonus is based on full year performance, not pro-rated to his date of death, and is payable at the normal time in March
2026 entirely in cash, the Committee having exercised its discretion to waive the one-third deferral into shares. Karim Bitar’s
deferred bonus shares from financial years 2022, 2023 and 2024 vested on the date of death in accordance with the plan rules
and were released on 28 November 2025.
Karim Bitar’s unvested long-term incentive awards granted in 2023, 2024 and 2025 also vested early on 26 October 2025, and were
released to his estate on 28 November 2025, in accordance with the treatment under the Plan rules on death in service. These were
subject to an assessment against the performance conditions and time pro-rating. The Committee exercised its discretion under
the Plan rules to extend the time pro-rating from 26 October to 31 December 2025 to reflect the full fiscal 2025 year for all awards.
The Plan rules require the estimation of performance projected over the whole performance cycle for PSP awards. As this is a
matter of judgement the Committee determined that results, considering performance to date and estimate of future forecasts
would result in the following outcomes:
Year of grant
Type of award
Performance attained
Time pro rating
Award realised, excluding
dividend equivalents
PSP/PSA
RSA
2023
1,264,258
85.2%
No time pro-rating applied
1,076,516
2024
1,025,891
66.9%
24/36ths time pro-rating
458,163
2025
1,569,906
67.5%
12/36ths time pro-rating
353,386
2025
369,389
100%
12/36ths time pro-rating
123,130
The total vesting value was £5,011,896 calculated based on the spot share price (£2.49) on 24 October 2025. The Committee
believes that these outcomes are appropriately aligned with performance anticipated to be achieved over the relevant periods.
The Committee has chosen not to disclose the detail of performance relative to the targets set for each performance measure for
the 2024 and 2025 awards, measured over the shortened period, on the basis that the information is regarded as commercially
sensitive. Actual performance for the 2023 award is detailed on page 112, however the Committee was required to anticipate
performance at the time of death due to the rules of the Plan; actual outcome was 85.1% versus the 85.2% applied to Karim’s award,
the difference being a slightly reduced TSR outcome at year end. The two-year post-vesting holding periods will not apply and the
post-employment shareholding requirement falls away.
In addition to the above, Karim had 10,253 Save As You Earn (SAYE) options under the UK employee share save scheme. Personal
representatives have up to 12 months following the date of death to use the savings in the ShareSave Account to buy Convatec
shares on behalf of beneficiaries or savings can be paid to the estate.
Upon death in service, a life assurance benefit became payable by the insurance providers.
Review of past performance
The graph below shows the Group’s TSR compared to the FTSE 100 index, an index of which the Group is a constituent.
Performance, as required by legislation, is measured by TSR over the period from commencement of conditional dealing (26
October 2016) to 31 December 2025.
TSR chart – Convatec vs the FTSE 100
Value of £100 invested on 26 October 2016 – IPO
Convatec Group Plc
FTSE 100
0
50
100
150
250
200
31/12/16 31/12/17 31/12/18 31/12/19 31/12/20 31/12/21 31/12/22 31/12/23 31/12/24 31/12/25
116
Convatec Annual Report and Accounts 2025
Governance
Directors’ Remuneration report
continued
The table below details the CEO’s single total figure of remuneration and incentive outcomes over the same period:
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Jonny Mason
(from 6 November 2025)
CEO single figure (‘000)
£3,575
Annual bonus (% max.)
81.6%
LTIP vesting (% max.)
85.1%
1
Karim Bitar
(30 September 2019 to
26 October 2025)
CEO single figure (‘000)
£6,878
2
£2,786
£3,699
3
£4,419
£4,628
£5,298
4
£7,648
Annual bonus (% max.)
70.2%
98.5%
79.8%
72.7%
99.3%
98.7%
81.6%
LTIP vesting (% max.)
n/a
n/a
44.2%
80.5%
51.6%
70.3%
85.2%
5
Rick Anderson
6
(15 October 2018 to
29 September 2019)
CEO single figure (‘000)
£264
£1,118
Annual bonus (% max.)
n/a
n/a
LTIP vesting (% max.)
n/a
n/a
Paul Moraviec
(to 14 October 2018)
CEO single figure (‘000)
£1,413
£917
£631
Annual bonus (% max.)
40%
9%
n/a
LTIP vesting (% max.)
n/a
n/a
n/a
1. Represents the performance outcome of the 2023 LTIP (as a % of maximum) with a final vesting date in March 2026.
2. 2019 remuneration includes the face value of the RSP made to Karim Bitar as part of his buy-out.
3. Includes the actual vesting value of Karim Bitar’s conditional share award that formed part of his buy-out arrangement on appointment of £888k.
4. Updated single figure to reflect actual vesting of 2022 LTIP award in March 2025.
5. Includes the actual vesting value of Karim Bitar’s LTIP awards made in 2023, 2024 and 2025, and vested in October 2025, due to death in service.
6. Rick Anderson was a Non-Executive Director who acted as interim Executive Chair ahead of Karim Bitar joining the business. He received a fixed fee for his services
in comparison to the reward package design in place for Paul Moraviec, Karim Bitar and Jonny Mason.
CEO pay ratio
The table below discloses the ratio of CEO pay for 2025, as required by the regulations, comparing the single total figure
of remuneration for Karim Bitar and Jonny Mason’s total single figure of remuneration, to the full-time equivalent total reward
of those colleagues whose pay is ranked at the 25th, 50th and 75th percentiles in our total UK workforce. The significant increase
from 2024 to 2025 is due to the early vesting of all LTI awards for Karim Bitar, due to death in service, as set out on page 115.
Methodology Option A (as defined by the Regulations) has been chosen to calculate the ratio, as it provides a fair comparison of
colleague pay with that of our CEO by using a consistent methodology to value remuneration and identify our colleagues ranked at
the 25th, 50th and 75th percentiles. The median ratio for 2025 is consistent with the pay and reward policies for the Company’s UK
employees. Colleague pay was calculated based on actual pay and benefits for the 12 monthly payrolls in respect of the full financial
year to 31 December 2025. We can confirm that no adjustments were made to the calculation of the total remuneration for these
employees from the methodology set out for the CEO’s single total figure remuneration. Our pay ratios are set out below:
Year
Method
25th percentile
50th percentile
75th percentile
2025
Option A
309:1
233:1
151:1
2024
Option A
117:1
87:1
58:1
2023
Option A
106:1
80:1
51:1
2022
Option A
125:1
98:1
59:1
2021
Option A
115:1
89:1
52:1
2020
Option A
83:1
65:1
40:1
2019
Option A
163:1
123:1
76:1
117
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
The table below provides information on the salary and total pay and benefits paid to our colleagues ranked at the 25th, 50th and
75th percentiles.
Year
Method
25th percentile
50th percentile
75th percentile
2025
Salary
£36,167
£47,426
£69,479
Total pay and benefits
£44,900
£59,715
£91,985
2024
Salary
£33,345
£43,735
£64,191
Total pay and benefits
£43,296
£58,123
£87,627
2023
Salary
£31,639
£41,076
£60,000
Total pay and benefits
£40,145
£53,121
£82,799
2022
Salary
£29,892
£38,000
£55,017
Total pay and benefits
£34,757
£44,418
£73,336
2021
Salary
£27,638
£34,521
£58,739
Total pay and benefits
£32,663
£41,964
£71,619
2020
Salary
£26,660
£34,487
£52,415
Total pay and benefits
£33,425
£42,641
£69,668
2019
Salary
£23,500
£32,798
£39,542
Total pay and benefits
£30,652
£40,601
£65,922
Our CEO pay ratio has increased since 2024 to 233:1 from 87:1. Pay and benefits for the median employee increased by 2.7%
between the two years. The CEO figure has substantially increased in 2025 due to the early vesting of all LTI awards granted in
2023, 2024 and 2025 to Karim Bitar, due to death in service, and the combination of remuneration provided to both Karim and
Jonny Mason.
Change in CEO reward
(single figure 2024 to 2025)
Reward change
Commentary
Salary
This is the impact of the change in annual base pay to £1,010,000, effective April 2025 (previously
£943,820). The salary for Karim Bitar was paid through to end 31 October 2025; the salary for Jonny
Mason is from his date of appointment to CEO, 6 November 2025.
Benefits (including pension)
There was no change in the structure of benefits provided to Karim Bitar between 2024 and 2025.
The value relates to the pension allowance paid by the Company driven off a higher base salary
figure. The allowance level has remained consistent year-on-year at 8.5% of base pay, consistent with
the wider UK workforce. In his role as CEO, Jonny Mason does not receive an allowance for private
medical insurance and instead participates in the plan provided to the wider UK workforce; his
pension allowance is also 8.5% of base pay.
Annual bonus
Awards under our annual plan were reduced from 2024, with awards of 163.2% out of a maximum
of 200% (2024: 197.3%). The figure includes the annual bonus awarded to Karim Bitar, which was not
pro-rata to the date of death in service, and the annual bonus awarded pro rata to Jonny Mason from
his date of appointment to CEO, 6 November 2025.
LTIP
In 2025 the maximum LTIP award for Karim Bitar was increased to 525% of salary, as approved by
shareholders; this was a combination of performance and restricted share awards. The value shown
reflects the vesting value of awards granted to Karim Bitar in 2023, 2024 and 2025 due to death in
service provisions being applied; the value on vesting at 26 October 2025 for these awards was £5,012k.
The figure also reflects the vesting of the performance award granted to Jonny Mason in 2023, pro rata
from his appointment as CEO and the value of restricted shares granted to him in 2025, pro rata from his
date of appointment as CEO.
Overall
The variance in CEO pay ratio reflects the introduction of restricted share awards and the
combination of remuneration elements for both Karim Bitar and Jonny Mason: the early vesting of all
‘in-flight’ LTIP awards for Karim due to death in service; the annual bonus for Karim being based on
12 months and not pro rata to death in service date; and the annual bonus and LTIP for Jonny being
pro rata from his appointment as CEO.
History of CEO pay ratio:
CEO pay to median employee
2021
CEO Pay Ratio (Median)
2023
2022
2024
2025
89:1
300
200
100
0
98:1
80:1
87:1
233:1
Change in CEO single figure 2024 to 2025 (£K)
Single
Figure
Disclosed
2024
(Restated)
Single
Figure
2025
Change
in
Salary
Change
in
Benefits
Change
in Annual
Bonus
Increase
in LTIP
5,059
19
11
(35)
3,101
8,155
118
Convatec Annual Report and Accounts 2025
Governance
Directors’ Remuneration report
continued
Implementation of Executive Director Remuneration Policy for 2026
Base salary
Following a review of the Executive Directors’ salaries, the Committee decided to award a base salary increase of 3.0% in line with
the increases for the general employee population in the UK. The increase will be effective from 1 April 2026.
Director
Role
From 1 April 2026
From 6 November 2025
From 4 August 2025
From 1 April 2025
Jonny Mason
CEO
£1,040,300
£1,010,000
£1,010,000
2
£548,500
1
Fiona Ryder
CFO
£565,000
£548,500
n/a
1.
This figure reflects Jonny Mason’s salary as CFO prior to his appointment as interim CEO on 4 August 2025.
2. This figure reflects Jonny Mason’s salary as interim CEO prior to his appointment as CEO on 6 November 2025.
Pension
Jonny Mason and Fiona Ryder receive a pension benefit of 8.5% of base salary in line with that available to the wider UK workforce.
Annual bonus
For 2026, both Executive Directors will continue to have a maximum bonus opportunity of 200% of salary. The on-target bonus
opportunity remains 50% of maximum. Two-thirds of any bonus earned will be paid in cash, with the remainder deferred into
Convatec Group Plc shares for a further three-year period. The financial weightings will be realigned to those applied to CELT and
the wider workforce: adjusted operating profit will remain at 40%; organic revenue growth (excluding InnovaMatrix
®
) will reduce
to 20% (from 25%); free cash flow to equity will increase to 20% (from 15%). This ensures balance and simplification, while remaining
focused on sustainable and profitable growth. Strategic personal objectives will remain at 20%, with 5% relating to quantifiable
ESG metrics. The use of organic revenue growth as a key metric reinforces our commitment to long-term value creation, and
compliments operating profit and cashflow in driving our strategic objectives forward. ESG is within the personal strategic
objective metric of the bonus to place importance on this and responsible business practices within our operations.
The annual bonus for 2026 will be based on the following measures and weightings:
Measure
Link to corporate strategy
Weighting
Adjusted operating profit
1
Focus
Innovate
Simplify
40%
Organic revenue growth
1
Focus
Innovate
Simplify
20%
Free cash flow to equity
Simplify
Execute
20%
Personal strategic objectives (including ESG)
Focus
Build
20%
(of which 5%
relates to ESG)
1.
Adjusted operating profit and organic revenue growth are both calculated on a constant currency basis using a budget rate. We have set the organic revenue growth
targets excluding InnovaMatrix
®
for 2026, removing this from the base year and 2026 performance to determine growth achieved.
The Board currently considers these targets to be commercially sensitive and intends to disclose retrospectively in next year’s
Annual Report on Remuneration. In the event the Board considers these targets to remain commercially sensitive, they will be
disclosed as soon as possible once they are no longer considered to be sensitive.
In line with our Policy, bonuses for the 2026 financial year will be subject to the Group’s policy on deferral, and its malus and
clawback provisions (see page 109 for further details).
LTIP
The 2026 LTIP will comprise two elements: PSA and RSA.
PSA
We will make PSA to Jonny Mason of 425% of salary, and to Fiona Ryder of 250% of salary, as described on page 109. These awards
will vest in March 2029, subject to the following performance targets assessed over the three years ending 31 December 2028:
Measure
Weighting
Threshold
(25% vesting)
Stretch
(90% vesting)
Maximum
(100% vesting)
Organic revenue growth
25%
4% p.a.
7% p.a.
Three-year compound annualised growth in adjusted EPS
50%
6% p.a.
14% p.a.
Three-year relative TSR rank vs constituents of S&P Global Healthcare
Equipment & Services index (calculated in sterling)
25%
Median
75th percentile
≥
90th
percentile
Vesting will be determined on a straight-line basis between the data points in the table above. To the extent an award vests, it will be
subject to a further two-year holding period after allowing some of the shares to be sold to cover estimated social security/tax liabilities.
Restricted Shares
We will make RSAs of 100% of salary to Jonny Mason and 75% of salary to Fiona Ryder. These will be awards of shares that vest in
the future subject to continued employment with the business. They are not subject to further Company performance conditions but
remain subject to our clawback and malus provisions. The Committee may adjust the vesting level (including to zero) to avoid
unintended outcomes, align pay outcomes with underlying Group performance and ensure fairness to shareholders and participants.
As with PSAs, to the extent an award vests, it will be subject to a further two-year holding period after allowing some of the shares
to be sold to cover estimated social security/tax liabilities.
119
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Summary of scheme interests
As at 31 December 2025, the Executive Directors had the following beneficial interests in share awards and share options:
PSA –
awards of shares, granted under updated Plan rules, from June 2025, that vest after three years subject to the achievement
of performance against business targets.
PSP –
awards of shares that vest after three years subject to the achievement of performance against business targets.
RSA –
awards of shares, granted under updated Plan rules, from June 2025, that vest after three years subject to continued
employment with the business.
RSP
–
awards of shares that vest after three years subject to continued employment with the business.
DBP –
awards of shares that represent the compulsory deferral of part of the annual bonus into shares that vest after three years
subject to continued employment with the business.
SAYE –
Awards of shares under our Save as You Earn plan, our HMRC approved all-employee share plan that operates in the UK.
Karim Bitar
Vesting period
Share price
at grant
At
31 December 2024
Granted
in year
Lapsed
in year
Exercised
in year
As at
26 October 2025
*
14 March 2022 to 14 March 2025 – DBP
£1.81
263,650
–
–
(263,650)
–
14 March 2022 to 14 March 2025 – PSP
£1.81
1,238,337
–
(367,787)
(870,550)
–
15 March 2023 to 15 March 2026 – DBP
£2.21
201,937
–
–
(201,937)
–
15 March 2023 to 15 March 2026 – PSP
£2.21
1,041,628
–
(154,682)
(886,946)
–
05 June 2023 to 05 June 2026 – PSP
£2.07
222,630
–
(33,061)
(189,569)
–
20 July 2023 to 01 September 2026 – SAYE
£1.76
10,253
–
–
–
–
11 March 2024 to 11 March 2027 – DBP
£2.76
226,266
–
–
(226,266)
–
11 March 2024 to 11 March 2027
– PSP
£2.76
1,025,891
–
(567,728)
(458,163)
–
11 March 2025 to 11 March 2028 – DBP
£2.66
242,935
–
(242,935)
–
11 March 2025 to 11 March 2028 – PSP
£2.66
1,108,169
(858,721)
(249,448)
–
2 June 2025 to 11 March 2028 – RSA
£2.66
369,389
(246,260)
(123,129)
–
2 June 2025 to 11 March 2028 – PSA
£2.66
461,737
(357,800)
(103,937)
–
Total
4,230,592
2,182,230
(2,586,039)
(3,816,530)
–
*
Date of 26 October 2025 was used as this was the date of death in service and therefore all awards vested in accordance with Plan rules
Jonny Mason
Vesting period
Share price
at grant
At
31 December 2024
Granted
in year
Lapsed
in year
Exercised
in year
As at
31 December 2025
14 March 2022 to 14 March 2025
*
– PSP
£1.81
690,112
–
(204,964)
(485,148)
–
14 July 2022 to 01 September 2025 – SAYE
£1.74
10,346
–
–
(10,346)
–
15 March 2023 to 15 March 2026 – DBP
£2.21
99,826
–
–
–
99,826
15 March 2023 to 15 March 2026
*
– PSP
£2.21
565,610
–
–
–
565,610
11 March 2024 to 11 March 2027 – DBP
£2.76
122,863
–
–
–
122,863
11 March 2024 to 11 March 2027
*
– PSP
£2.76
464,221
–
–
–
464,221
11 March 2025 to 11 March 2028 – DBP
£2.66
131,914
–
–
131,914
11 March 2025 to 11 March 2028
*
– PSP
£2.66
501,448
–
–
501,448
2 June 2025 to 11 March 2028 – RSA
£2.66
150,434
–
–
150,434
10 September 2025 to 1 October 2028 – SAYE
£2.31
9,340
–
–
9,340
Total
1,952,978
793,136
(204,964)
(495,494)
2,045,656
*
A further two-year holding period applies to these awards post vesting.
120
Convatec Annual Report and Accounts 2025
Governance
Directors’ Remuneration report
continued
Fiona Ryder
Vesting period
Share price
at grant
At
31 December 2024
Granted
in year
Lapsed
in year
Exercised
in year
As at
31 December 2025
14 July 2022 to 01 September 2025 – SAYE
£1.74
10,346
–
–
(10,346)
–
15 March 2023 to 15 March 2026 – PSP
£2.21
29,864
–
–
–
29,864
15 March 2023 to 15 March 2026 – RSP
£2.21
29,864
–
–
–
29,864
11 March 2024 to 11 March 2027 – PSP
£2.76
26,304
–
–
–
26,304
11 March 2024 to 11 March 2027 – RSP
£2.76
26.304
–
–
–
26,304
11 March 2025 to 11 March 2028 – PSP
£2.66
–
30,462
–
–
30,462
11 March 2025 to 11 March 2028 – RSP
£2.66
–
143,358
–
–
143,358
10 September 2025 to 1 October 2028 – SAYE
£2.31
–
9,340
–
–
9.340
Total
122,682
183,160
–
(10,346)
295,496
Implementation of Non-Executive Director Remuneration Policy for 2026
The Remuneration Committee sets the fee for the Chair and approved an increase aligned with that of the Executive Directors, and
the wider workforce in the UK at 3.0%.
The fees for the Non-Executive Directors, other than the Chair, are reviewed and set by the Non-Executive Director Fee Committee,
comprised of the Chair, CEO and CFO. The Non-Executive Fee Committee reviewed and approved a 3% increase to the basic fees
and that of the Workforce Liaison Champion, aligned to the wider UK employee workforce. They also determined to align the fees
provided to the Senior Independent Director and Chairs of the Audit and Risk and Remuneration Committees in recognition of the
additional complexity for each of these roles, which is of equal value and time commitment.
The fee increases will take effect on 1 April 2026. The fees payable to the Non-Executive Directors are set out below.
Role
Fee structure in 2026¹
Fee structure in 2025
Chair
£370,600
£359,800
Non-Executive Director basic fee
£84,800 or $111,000
£82,300 or $107,800
Additional fees:
Senior Independent Director
£23,700 or $30,900
£21,000 or $28,000
Chair of the Audit and Risk Committee
£23,700 or $30,900
£23,000 or $30,000
Chair of the Remuneration Committee
£23,700 or $30,900
£21,000 or $28,000
Fee for acting as a Workforce Liaison Champion
£10,800 or $14,400
£10,500 or $14,000
1. Effective 1 April 2026.
Non-Executive Director letters of appointment
None of the Non-Executive Directors has a service contract with the Group. They do have letters of appointment, and will be
submitted for re-election annually. Copies of letters of appointment are available to view at the Company’s registered office. The
dates relating to the appointments of the Chair and Non-Executive Directors who served during the reporting period are as follows:
Director
Role
Date of appointment
Date of letter of
appointment
Date of election/
re-election
John McAdam
Non-Executive Chair
30 September 2019
18 August 2019
22 May 2025
Margaret Ewing
Senior Independent Director
11 August 2017
17 August 2017
22 May 2025
Brian May
Independent Non-Executive Director
2 March 2020
26 February 2020
22 May 2025
Heather Mason
Independent Non-Executive Director
1 July 2020
8 May 2020
22 May 2025
Constantin Coussios
Independent Non-Executive Director
1 September 2020
29 June 2020
22 May 2025
Kim Lody
Independent Non-Executive Director
1 February 2022
13 December 2021
22 May 2025
Sharon O’Keefe
Independent Non-Executive Director
1 March 2022
24 February 2022
22 May 2025
121
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Directors’ shareholdings (audited)
The table below sets out details of the current shareholdings of each Director (and any relevant connected persons) as at
31 December 2025. For Executive Directors, the current shareholding is compared to their shareholding guideline.
Director
Shares
Options
Current
shareholding
2
(% salary)
Shareholding
guideline
(% salary)
Owned outright or vested
Unvested and
not subject to
performance
conditions
Unvested and
subject to
performance
conditions
Vested but not
exercised
Unvested and
not subject to
performance
conditions
1
31 December
2024
31 December
2025
Current Directors
Jonny Mason
50,000
386,936
781,621
1,531,279
–
9,340
161%
500%
Fiona Ryder
N/A
93,589
199,526
86,630
–
9,340
91%
300%
John McAdam
23,181
23,181
Margaret Ewing
10,000
10,000
Brian May
25,000
25,000
Heather Mason
10,000
10,000
Constantin Coussios
23,278
23,278
Kim Lody
10,000
10,000
Sharon O’Keefe
3,200
–
Previous Director in Year
Karim Bitar
3
2,929,020
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1.
These options are from the UK SAYE plan open to UK employees; there is also an international SAYE plan, currently offered in three countries.
2. As CFO, Jonny Mason was required to hold shares to the value of 300% of salary and had achieved 299% by 31 October 2025. As CEO he is required to hold 500% of salary
and is working towards developing that through holdings of shares that vest under Company share plans and any personal share purchases; during the year he purchased
100,000 shares. Fiona Ryder was appointed to the position of CFO on 6 November 2025. She is required to have a shareholding of 300% of salary which will develop
through holdings of shares that vest under Company share plans, and any personal share purchases; in 2025 she purchased 21,263 shares.
3. Shareholdings in 2025 are not shown for Karim Bitar due to death in service.
Executive Director shareholdings calculated based on the number of shares that are owned outright or vested plus an estimated
number of unvested shares that are not subject to performance conditions, on a net of tax basis. These shares are valued using a
share price of £2.38, being the average share price during the last three months of the 2025 financial year, or the market value of
the shares at the point of award (if higher) in line with our Shareholding Guidelines policy.
There were no changes to the number of shares held by Directors between 31 December 2025 and 20 February 2026, being the
latest practicable date prior to publication of this Annual Report.
Share scheme dilution limits
The Company complies with the guidelines laid down by the Investment Association. These restrict the issue of new shares under
all the Company’s share schemes in any ten-year period to 10% of the issued ordinary share capital. Our year-end position shows
dilution levels at December 2025 of 2.9% across all schemes, with 2.6% over discretionary schemes. These fall well below current
shareholder guidelines.
The Directors’ Remuneration report has been approved by the Board and signed on its behalf by:
Brian May
Chair of the Remuneration Committee
23 February 2026
122
Convatec Annual Report and Accounts 2025
Governance
Directors’ report
The Directors present their Annual Report on the affairs of the Group,
together with the financial statements and auditor’s report, for the year
ended 31 December 2025
The Directors’ report comprises the Governance report (on pages 78 to 103), the Directors’ report (on pages 122 to 124) and the
Shareholder information section (on page 185). The following information is provided in other appropriate sections of the Annual
Report and is incorporated by reference in this table.
To comply with the Disclosure and Transparency Rules (DTR) 4.1.5R(2) and DTR 4.1.8R, the required content of the Management
report can be found in the Strategic report or this Directors’ report, including the material incorporated by reference.
Information
Section where provided
Page
Business review, including principal and emerging risks, key performance
indicators and matters on environment, employees and social and community
issues
Strategic report
4 to 77
Likely future developments and research and development activities
Strategic report
34 to 37
Engaging stakeholders
Governance report
86 and 87
Employee engagement
Strategic report
38 and 39
Governance report
86
Employment of disabled persons
Directors’ report
124
Greenhouse gas emissions, energy consumption and energy efficiency action
Strategic report
51 and 52
Task Force on Climate‑related Financial Disclosures (TCFD) report
Strategic report
54 to 65
Viability statement
Strategic report
76 and 77
Compliance with the 2024 UK Corporate Governance Code (the Code)
Governance report
79
Directors
Governance report – Our Board
80 and 81
Directors’ Remuneration report
104 to 121
Directors’ Remuneration report – directors’
beneficial interests and shareholding requirements
119 to 121
Details of Long‑Term Incentive Plan
Directors’ Remuneration report
118
Fair, balanced and understandable
Audit and Risk Committee report
95
Annual review of risk management and internal control systems
Audit and Risk Committee report
98 to 100
Dividend
Strategic report
6
Directors’ report
122
Directors’ responsibilities statement
125
Going concern
Notes to the consolidated financial statements
138
Accounting policies, financial instruments and financial risk management
Notes to the consolidated financial statements
138 to 175
We annually assess the application of
the policy when proposing the dividend,
taking into account, among other things,
our growth prospects, capital efficiency,
investment plans and the profitability
of the Group, whilst also maintaining
appropriate levels of dividend cover.
Any decision to declare and pay dividends
will be made at the discretion of the
Directors and will depend on, among
other things, applicable law, regulation,
restrictions, strategic objectives, capital
management, the Group’s various
stakeholders (for further information
see the Section 172 statement on
page 88), review of our comparator peer
group, available and forecast realised
distributable reserves of the Company
and the forecast cashflows and liquidity
of the Group, and other factors the
Directors deem significant.
Disclosure of information to the
auditor
Each of the Directors, as at the date of
this Annual Report, confirms that:
–
the Director has taken all steps that
he/she ought to have taken as a
Director in order to make him/herself
aware of any relevant audit
information and to establish that the
Company’s auditor is aware of that
information; and
–
so far as the Director is aware, there is
no relevant audit information of which
the Company’s auditor is unaware.
This confirmation is given and should
be interpreted in accordance with
the provision of Section 418 of the
Companies Act 2006 (the Act). Following
the external audit tender process,
completed in 2024, EY was chosen to
succeed Deloitte LLP as auditor and
a resolution to appoint EY will be
proposed at the 2026 Annual
General Meeting (AGM).
Branches of the Company
The Group, through various subsidiary
and related undertakings, has branches
in a number of different jurisdictions in
which the business operates. Further
details are included in subsidiary and
related undertakings on pages 182
to 184.
Dividends
Our stated policy is to target a payout
ratio of between 35% and 45% of adjusted
net profit. This is interpreted flexibly over
time to reflect the development of the
business. The payout ratio in 2025 was
40% (2024: 42%). The Board is
recommending a 13% increase in the full
year dividend to reflect the underlying
improvement in business performance.
123
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
The Directors recommend a final
dividend for the year of 5.367 cents per
share (2024: 4.594 cents) which, together
with the interim dividend of 1.877 cents
per share (2024: 1.822 cents), makes a
total for the year of 7.244 cents per
share (2024: 6.416 cents), a 13% increase
over the prior year. The final dividend, if
approved by the shareholders, will be
paid on 28 May 2026 to shareholders on
the register at the close of business on
17 April 2026.
Capital structure
Share capital
As at 31 December 2025, the Company’s
issued share capital consisted of
2,049,789,559 ordinary shares of
10 pence each, of which 94,937,530
ordinary shares were held as treasury
shares. Further details of the authorised
and issued share capital, together with
details of the movements in the
Company’s issued share capital during
the year, are shown in Note 15 to the
Consolidated Financial Statements. As
at 31 December 2025, the Company had
only one class of share consisting of
ordinary shares of 10 pence each.
Acquisition of Company’s own shares
At the Company’s AGM on 22 May 2025,
the Directors’ authority was renewed
under shareholders’ resolution to
purchase through the market up to
10% of the Company’s ordinary shares at
a maximum price per share of the higher
of: (i) an amount equal to 105% of the
average of the middle market quotation
of the price of shares for the five
business days prior to the date of
purchase; and (ii) an amount equal
to the higher of the price of the last
independent trade and the highest
current independent bid for a share
at the time of purchase. This authority
will expire at the end of Company’s 2026
AGM and the Company will seek its
renewal at the AGM.
As part of the Company’s capital
allocation strategy aimed at enhancing
shareholder returns, the Company
announced a share buyback programme
on 20 August 2025 to purchase its
ordinary shares of 10 pence each
up to a maximum consideration of
$300m. The share buyback programme
concluded on 3 December 2025 and
was funded from available cash reserves.
The Company repurchased 94,937,530
ordinary shares at a volume weighted
average price of £2.38 per ordinary
share and a nominal value of
approximately £9,493,753 (this
represented approximately 4.63% of
the Company’s issued share capital as at
31 December 2025), for a consideration
of £226m ($301m) inclusive of transaction
costs. The Company currently holds the
repurchased shares as treasury shares
and may cancel them at a later date.
The maximum number of ordinary shares
which could be repurchased by the
Company as part of any share buyback
under the authority for on‑market share
buybacks granted at the 2025 AGM was
204,978,956 ordinary shares.
Shareholders’ rights
The rights attaching to the ordinary
shares are governed by the Company’s
Articles of Association (the Articles) and
prevailing legislation. There are no
specific restrictions on the size of a
holding. Subject to applicable law and
the Articles, holders of ordinary shares
are entitled to receive all shareholder
documents, including notice of any
general meeting, attend, speak and
exercise voting rights at general
meetings, either in person or by proxy,
and participate in any distribution of
income or capital.
Restrictions on voting
There are no specific restrictions on
voting rights, save in situations where
the Company is legally entitled to impose
such restrictions (usually where amounts
remain unpaid on shares after request, or
the shareholder is otherwise in default of
an obligation to the Company). Currently,
all issued ordinary shares are fully paid.
There are no agreements between
holders of securities in the Company
that are known to the Company and
may result in restrictions on transfer
or on voting rights.
Restrictions on the transfer
of ordinary shares
The transfer of ordinary shares is
governed by the general provisions of
the Company’s Articles and applicable
legislation. There are no restrictions
on the transfer of ordinary shares other
than: (i) as set out in the Articles; and
(ii) certain restrictions which may from
time to time be imposed by laws and
regulations and pursuant to the Listing
Rules whereby Directors and certain
officers and employees of the Company
require approval to deal in the ordinary
shares in accordance with the
Company’s share dealing policies
and the Market Abuse Regulation.
Directors’ appointment,
replacement and powers
The appointment and replacement of
Directors of the Company is governed by
its Articles, the Code, the Act and related
legislation. The Articles themselves
may be amended by special resolution.
Details of the powers of the Board and
its Committees are described in the
Governance Framework on our website.
The powers of the Board are set out in
the Articles and the Terms of Reference
of each of the Board’s committees set
out their respective duties and
responsibilities. The aforementioned
documents can be found at www.
convatecgroup.com/investors/
governance/.
Significant agreements
There are a number of agreements that
take effect, alter or terminate upon a
change of control of the Company, such
as commercial contracts, bank loan
agreements, property lease
arrangements and employees’ share
plans. Other than the Group’s main
funding agreements referenced in the
following paragraph, none of these are
considered to be significant in terms of
their likely impact on the business of
the Group as a whole. Furthermore,
the Directors are not aware of any
agreements between the Group and
its Directors or employees that provide
for compensation for loss of office
or employment that occurs because
of a change of control resulting from
a takeover bid.
In the event of a change of control of
the Company, the Group’s main funding
agreements allow the lenders to give
notice of repayment for all outstanding
amounts under the relevant facilities.
Directors
The directors of the Company who served
on the Board as at the date of this report
are shown on pages 80 and 81.
Karim Bitar, who passed away in
October 2025 served as a director
of the Company from 30 September
2019 to 26 October 2025.
Directors’ indemnities
The Group has made qualifying
third‑party indemnity provisions for
the benefit of its Directors, which remain
in force at the date of this report.
Company Secretary
The Company Secretary provides
ongoing support to the Board in relation
to corporate governance issues and
compliance with the Listing Rules.
He is responsible for establishing,
implementing and monitoring the
corporate governance framework,
attending (directly or through a
designate) all Board and Committee
meetings, advising on effective Board
processes, advising on Directors’
statutory duties, disclosure obligations
and requirements under the Listing
Rules, and working in conjunction with
the investor relations team regarding
dialogue with investors.
Political donations
No political donations, including to
non‑UK political parties, were made
during the period.
124
Convatec Annual Report and Accounts 2025
Governance
Directors’ report
continued
All of the Group’s employee share plans
contain provisions relating to a change
of control. On a change of control,
options and awards granted to
employees under the Group’s share
plans may vest and become exercisable,
subject to the satisfaction of any
applicable performance conditions
at that time.
AGM
The AGM will be held on Thursday,
21 May 2026 at 2pm and will take
place at Convatec’s registered office,
20 Eastbourne Terrace, Paddington,
London W2 6LG, in the form of a hybrid
meeting. Notice of the meeting,
containing details of the resolutions to
be put to the meeting, will be available
at www.convatecgroup.com/investors/
shareholder‑centre/agm‑information/.
Inclusion and belonging
We are committed to creating a
values‑led, performance‑driven culture
which is merit‑based with opportunities
open to all. It starts with our colleagues,
and we aim to bring together a rich
diversity of backgrounds, experiences,
preferences and capabilities which unite
together to improve people’s lives
through their work at Convatec. The
Board considers difference in terms
of representation and thinking styles
as critical to the Company’s success.
Information about the Group’s initiatives
to achieve diversity across the business,
including specific objectives, are
contained on page 93.
Employment of disabled people
Applications for employment by
disabled people are always fully
considered, taking into account the
aptitude of the applicant concerned.
In the event of an employee becoming
disabled, every effort is made to ensure
that their employment continues and
that appropriate training is arranged.
It is Convatec’s policy that the training,
career development and promotion of
anyone with a disability should, as far
as possible, be equitable with that of
other employees.
Substantial shareholdings
At 20 February 2026, being the latest practicable date prior to publication of this Annual Report, the Company had been notified in
accordance with DTR 5, of the following voting rights as a shareholder of the Company.
Shareholder
No. of ordinary shares
Percentage of voting
rights
Nature of holding
Black Creek Investment Management Inc.
100,676,401
5.15%¹
Direct/indirect
FIL Limited
100,126,528
5.12%²
Indirect/financial instrument
Massachusetts Financial Services Company
97,775,211
4.98%²
Indirect
FMR LLC
99,637,314
4.93%²
Indirect
BlackRock, Inc.
102,233,561
5%³
Indirect/financial instrument
Artisan Partners Limited Partnership
97,980,658
4.98%⁴
Indirect
It should be noted that the percentages are shown as notified and that these holdings may have changed since the Company was notified, however, notification of any
change is not required until the next notifiable threshold is crossed.
1. Disclosure made in 2026.
2. Disclosure made in 2025.
3. Disclosure made in 2023.
4. Disclosure made in 2018.
Listing Rules – compliance with UK Listing Rule (UKLR) 6.6.1
The information in the table below is required to be disclosed by UKLR 6.6.1 and can be found in the following locations. There are
no other disclosures required under this UKLR.
Section
Applicable sub‑paragraph within UKLR 6.6.1
Location
1
Interest capitalised
Group Financial Statements, Note 23, page 173
3
Details of long‑term incentive schemes
Directors’ Remuneration report, page 118
11
Waivers of dividends
Group Financial Statements, Note 15, page 161
12
Waivers of future dividends
Group Financial Statements, Note 15, page 161
By order of the Board:
James Kerton
Company Secretary
23 February 2026
Employee share schemes
In addition to the discretionary share
schemes operated as part of the Group’s
long‑term incentives, detailed in the
Remuneration report on pages 109 and
118, the Group operates an all‑employee
share scheme in selected jurisdictions.
The Directors believe that these schemes
align the interests of employees and
shareholders by encouraging employees
to buy and own shares in the Company,
thus enabling them to benefit directly
from the anticipated growth and success
of the Group in the future.
Executive Directors may also participate
in the UK all‑employee share scheme,
which is an HMRC‑approved
savings‑related share option plan,
on the same basis as other eligible
employees. All participants may invest
up to the limits set in line with HMRC
guidance and as operated by the Group.
Shares acquired through the Group’s
share plans rank pari passu with existing
ordinary shares in issue and have no
special rights with regards to voting,
rights to dividend, control of the
Company or otherwise.
125
Convatec Annual Report and Accounts 2025
Additional information
Financial statements
Strategic report
Governance
Directors’ responsibilities statement
The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the
Directors are required to prepare the
Group Financial Statements in
accordance with United Kingdom
adopted international accounting
standards. The financial statements also
comply with IFRS Accounting Standards
as issued by the International
Accounting Standards Board (IASB). The
Directors have also chosen to prepare
the parent company financial
statements in accordance with United
Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting
Standards and applicable law), including
FRS 101,
Reduced Disclosure Framework
.
Under company law the Directors must
not approve the financial statements
unless they are satisfied that they give a
true and fair view of the state of affairs
of the Group and Company and of the
profit or loss of the Group and
Company for that period.
In preparing the parent company’s
financial statements, the Directors are
required to:
–
Select suitable accounting policies
and then apply them consistently;
–
Make judgements and accounting
estimates that are reasonable and
prudent;
–
State whether applicable UK
Accounting Standards have been
followed, subject to any material
departures disclosed and explained
in the financial statements; and
–
Prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
In preparing the Group Financial
Statements, International Accounting
Standard 1 requires that Directors:
–
Properly select and apply accounting
policies;
–
Present information, including
accounting policies, in a manner
that provides relevant, reliable,
comparable and understandable
information;
–
Provide additional disclosures
when compliance with the specific
requirements of the financial
reporting framework are insufficient
to enable users to understand the
impact of particular transactions,
other events and conditions on the
Group’s financial position and financial
performance; and
–
Make an assessment of the Group’s
ability to continue as a going concern.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group
and Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the Group and
Company and enable them to ensure
that the financial statements comply with
the Companies Act 2006. They are also
responsible for safeguarding the assets
of the Group and Company and hence
for taking reasonable steps for the
prevention and detection of fraud
and other irregularities.
The Directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Group’s website.
Legislation in the United Kingdom
governing the preparation and
dissemination of financial
statements may differ from
legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our
knowledge:
–
The Financial Statements, prepared in
accordance with the relevant financial
reporting framework, give a true and
fair view of the assets, liabilities,
financial position and profit or loss
of the Company and the undertakings
included in the consolidation taken
as a whole;
–
The Strategic report includes a
fair review of the development
and performance of the business
and the position of the Company
and the undertakings included in
the consolidation taken as a whole,
together with a description of the
principal risks and uncertainties that
they face; and
–
The Annual Report and Financial
Statements, taken as a whole, are fair,
balanced and understandable and
provide the information necessary for
shareholders to assess the Group and
Company’s performance and position,
business model and strategy.
This responsibility statement was
approved by the Board of Directors on
23 February 2026 and is signed on its
behalf by:
Jonny Mason
Chief Executive Officer
Fiona Ryder
Chief Financial Officer
126
Convatec Annual Report and Accounts 2025
Financial statements
Independent auditor’s report
Independent Auditor’s report to the members of Convatec Group Plc
Report on the audit of the Financial Statements
1. Opinion
In our opinion:
–
the Financial Statements of Convatec Group Plc (the ‘Company’) and its subsidiaries (the ‘Group’) give a true and fair view of
the state of the Group’s and of the Company’s affairs as at 31 December 2025 and of the Group’s profit for the year then ended
–
the Group Financial Statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards and IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB)
–
the Company Financial Statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework” and
–
the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006
We have audited the Financial Statements which comprise:
–
the Consolidated Income Statement
–
the Consolidated Statement of Comprehensive Income
–
the Consolidated and Company Statements of Financial Position
–
the Consolidated and Company Statements of Changes in Equity
–
the Consolidated Statement of Cash Flows and
–
the related Notes 1 to 27 of the Consolidated financial statements and Notes 1 to 10 of the Company financial statements
The financial reporting framework that has been applied in the preparation of the Group Financial Statements is applicable law
and United Kingdom adopted international accounting standards and IFRS Accounting Standards as issued by the IASB. The
financial reporting framework that has been applied in the preparation of the Company Financial Statements is applicable law and
United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted
Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the Financial
Statements section of our report.
We are independent of the Group and the Company in accordance with the ethical requirements that are relevant to our audit of
the Financial Statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit
services provided to the Group and the Company for the year are disclosed in Note 3.3 to the Financial Statements. We confirm that
we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
127
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
–
Revenue recognition in key markets and
–
Valuation of InnovaMatrix intangible asset
Within this report, key audit matters are identified as follows:
Newly identified
Similar level of risk
Materiality
The materiality that we used for the Group Financial Statements was $14.5m which was
determined on the basis of profit before tax adjusted for certain items.
Scoping
Combined, we performed audit procedures across 22 components in 12 countries
accounting for 77% of revenue, 83% of profit before tax and 77% of net assets.
Significant changes in our approach
We have identified one new key audit matter in relation to the valuation of
InnovaMatrix
®
intangible asset as a result of the increase in judgement relative to the
prior year resulting from the CMS pricing decision.
4. Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the Financial Statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and Company’s ability to continue to adopt the going concern basis
of accounting included:
–
Obtaining an understanding of the Directors’ process for determining the appropriateness of the use of the going concern basis
–
Assessing the availability of financing facilities including nature of facilities, repayment terms and covenants
–
Testing the accuracy of management’s models, including agreement to the most recent Board-approved budgets and forecasts
Evaluating the key assumptions used in these forecasts
–
Assessing the historical accuracy of forecasts prepared by management
–
Evaluating sensitivity analysis and its impact on available financial headroom and
–
Assessing the appropriateness of the disclosures within the Financial Statements
Based on the work we performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and Company’s ability to continue as a going concern for
a period of at least 12 months from when the Financial Statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ Statement in the Financial Statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
128
Convatec Annual Report and Accounts 2025
Financial statements
Independent auditor’s report
continued
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial
Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
5.1. Revenue recognition in key markets
Key audit matter description
The Group recorded revenue of $2,439m for the year ended 31 December 2025 (31 December 2024: $2,289m)
under IFRS 15:
Revenue from contracts with customer
s.
As disclosed in Note 2.1 to the Group Financial Statements, the Group’s policy is to recognise revenue when
control over a product has transferred, generally on delivery, to a customer, distributor or wholesaler. The
Group measures revenue for goods sold based on the consideration specified in a contract with a customer,
net of discounts, rebates, chargeback allowances and sales-related taxes. Further information is included in
the geographic segment information in Note 2.2.
For certain sales of new and recently launched products to individual doctors, medical centres and hospitals,
there is judgement in estimating the transaction price due to uncertainties over the payment and timing of the
customers’ insurance reimbursements, and the limited established market practice and customer payment
history.
As the audit of revenue is one of the key determinants of our overall audit strategy requiring significant
allocation of audit resources, revenue recognition has been included as a key audit matter. The Audit and Risk
Committee includes its assessment of this matter on page 97
How the scope of our audit
responded to the key audit
matter
We performed the following procedures:
–
We completed walkthroughs to gain an understanding of the end-to-end revenue processes and tested
relevant controls across the Group
–
We tested the general IT controls and relevant automated business controls in the main financial
reporting system used by the Group
–
We evaluated the accounting treatment for revenue relating to sales of new and recently launched
products against the requirements of IFRS 15, taking into account customer payment practices and the
reimbursement environment
–
We held direct enquiries with category and geographic market leaders, assessing changes in customer
demand and new product introductions that might impact sales patterns
–
We performed detailed transaction testing on a sample basis, agreeing sales through to invoice, final
sales contracts and delivery notes
–
We assessed any relevant updates to contracts to assess the terms of sale and to support recalculation of
rebates and chargebacks associated with the revenue and
–
We assessed whether the disclosures within the Annual Report and Accounts are in compliance with the
requirements of IFRS 15
Key observations
We are satisfied that revenue recognised across key markets and the disclosures made are appropriate.
129
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
5.2. Valuation of InnovaMatrix
®
intangible asset
Key audit matter description
At 31 December 2025, the Group held $219m of product-related intangible assets (31 December 2024: $398m).
This includes $40m relating to the platform asset for the InnovaMatrix wound care product, net of an
impairment of $72m recognised in the year.
When the carrying amount of an individual intangible asset exceeds its recoverable amount, an impairment is
recognised. Recoverability of an intangible asset is derived from certain assumptions and estimates of future
trading performance which create significant estimation uncertainty.
An impairment indicator was identified in the year in relation to the platform asset for the InnovaMatrix
®
wound care product as a result of the Centers for Medicare and Medicaid Services’ (CMS) pricing decision for
wound biologics products, following a period of uncertainty relating to Local Coverage Determinations (LCDs).
Accordingly, an impairment test was performed to determine the recoverable amount of the asset.
The underlying assumptions made in the impairment test include forecast sales pricing, volume, growth rates
and operating margins. This includes assumptions on the timing of cash flows, particularly in new and recently
launched markets.
We identified the valuation of the InnovaMatrix
®
intangible asset as a key audit matter due to the inherent
judgements involved in estimating future cash flows. Auditing such assumptions and estimates required
extensive audit effort to evaluate the reasonableness of forecasts and judgements.
A key source of estimation uncertainty is disclosed in Note 1.4 of the Group Financial Statements with further
disclosures related to the impairment included in Note 8. The matter is also discussed in the Audit and Risk
Committee report on page 97
How the scope of our audit
responded to the key audit
matter
We performed the following audit procedures, in the assessment of the valuation of InnovaMatrix
®
intangible asset:
–
We obtained an understanding of the Group’s relevant controls over the review of key inputs and
assumptions used in the valuation of the InnovaMatrix
®
intangible asset
–
We monitored developments through the year in relation to reimbursement in the US, specifically
in relation to the CMS pricing decision and the proposed LCDs, noting the latter were cancelled on
24 December 2025
–
With the assistance of our valuation specialists, we evaluated the methodology used to perform the
impairment test, with reference to the modelling that had been used to determine the fair value of the
asset upon its initial recognition in 2022, and assessed mechanical accuracy of the forecast model and
discount rate applied
–
We made inquiries of key individuals within the Advanced Wound Care category. These inquiries assisted
our evaluation of the Group’s evidence to support key forecast assumptions in relation to sales volumes,
pricing and operating margins
–
We evaluated the key inputs and assumptions applied in estimating sales and operating margin
forecasts, including consideration of external market data. This included evaluating the risk-adjusted
cash flows in relation to entry to new markets outside the US
–
We assessed the historical accuracy of sales and margin forecasts and
–
Evaluated management’s Annual Report disclosures, including IAS 1 critical accounting judgements and/
or key sources of estimation uncertainty and IAS 36 sensitivity disclosures
Key observations
We concluded the judgements made by management were reasonable and in accordance with IAS 36:
Impairment of Assets. We consider the disclosures in Note 1.4 in relation to key sources of estimations
uncertainty to be appropriate.
130
Convatec Annual Report and Accounts 2025
Financial statements
Independent auditor’s report
continued
6. Our application of materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the Financial Statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of
our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Group Financial Statements
Company Financial Statements
Materiality
$14.5m (2024: $11.8m)
$7.3m (2024: $5.9m)
Basis for determining
materiality
4.3% (2024: 4.3%) of profit before tax after
amortisation of acquired intangibles but before
$107m of other adjusting items disclosed on page 29.
The Company materiality equates to 0.1% (2024: 0.1%)
of net assets.
Rationale for the
benchmark applied
In determining our materiality benchmark, we
considered the focus of the users of the Financial
Statements. Profit before tax is the base from which
key performance measures are calculated as well
as key metrics used in providing trading updates.
We have adjusted profit before tax for certain items
as summarised above.
In determining our materiality, we considered
net assets as the appropriate benchmark given
the Company is primarily a holding company for
the Group.
Group materiality $14.5m
Component performance
materiality range $5.1m
to $7.1m
Audit and Risk Committee
reporting threshold $0.7m
PBT adjusted for certain items
Group materiality
PBT adjusted
for certain
items $337m
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the Financial Statements as a whole.
Group Financial Statements
Company Financial Statements
Performance materiality
70% (2024: 70%) of Group materiality
70% (2024: 70%) of Company materiality
Basis and rationale for
determining performance
materiality
We set performance materiality at a level that we consider normal for the audit of public companies.
In determining performance materiality, we considered the following factors:
a. our risk assessment, including our understanding of the entity and its overall control environment
b. the quality of the control environment and control reliance adopted over certain business processes and
IT systems
c. the disaggregated nature of the Group and the likelihood of an individually material error and
d. our cumulative experience from prior year audits and low level of corrected and uncorrected misstatements
identified
Component performance
materiality
For components other than the Company, where our work on a component included an audit of the entire financial
information or an audit on one or more classes of transactions, account balances and disclosures, this work was
completed to component performance materiality levels between $5.1m and $7.1m (2024: $4.1m and $5.8m).
6.3. Error reporting threshold
We agreed with the Audit and Risk Committee that we would report to the Committee all audit differences in excess of $0.7m (2024:
$0.6m), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to
the Audit and Risk Committee on disclosure matters that we identified when assessing the overall presentation of the Financial
Statements.
131
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
7. Audit scope and execution
The design of our audit approach reflects
the group structure, utilising data
extracted from the Group’s ERP system
to effectively address risks of material
misstatement, as well as fulfil our
responsibilities around the direction,
supervision and review of the audit work
performed by component teams. Our
audit approach can be summarised into
the following areas that enabled us to
obtain the evidence required to form
an opinion on the Group and Company
Financial Statements:
–
Use of audit technology:
The central
control and common systems
throughout the Group enables us to
deploy and utilise process and data
analytics across the breadth of the
Group, providing a more detailed
understanding of the flow of
transactions, enabling us to focus our
risk assessment and design targeted
audit testing procedures.
–
We embed technology throughout
our audit to improve quality and
effectiveness, including in the areas
of planning and scoping, project
management, risks and controls
assessment, substantive testing and
reporting insights to management and
the Audit and Risk Committee.
–
Audit planning and risk assessment
at a Group level:
Our risk assessment
procedures considered, amongst other
factors, the impact of climate change
and the wider macroeconomic
environment on the account balances,
disclosures and company practices.
–
The Group operates primarily on one
ERP system, with automated controls
supporting the IT infrastructure. We
have tested these automated controls,
including segregation of duties and
controls configurations. This testing is
integrated into our audit risk assessment
to ensure only relevant controls are
tested, and direct testing on exceptions
identified. For components of the Group
which do not operate on the main ERP
system, we obtained an understanding
of the relevant systems and IT controls.
–
Audit work performed at global
shared service centres:
A significant
amount of the Group’s operational
processes that cover financial reporting
is undertaken in Convatec Business
Services (“CBS”). Our Group audit team
coordinated our audit work in the CBS
utilising a global project management
platform. This structure enabled us to
develop our understanding of the
end-to-end processes that supported
material account balances, classes of
transactions and disclosures within the
Group Financial Statements. We then
evaluated the effectiveness of internal
controls over financial reporting for
these processes and considered the
implications for the remainder of our
audit work. As part of supervising the
work of the CBS audit, senior Group
audit team members visited Portugal
throughout the audit period.
–
Audit work executed at component
level:
We focused our work on 22 (2024:
23) components covering 12 (2024: 13)
countries, 77% (2024: 78%) of revenue,
83% (2024: 81%) of profit before tax and
77% (2024: 90%) of net assets. The 22
(2024: 23) components are in the US, UK,
Australia, Brazil, Dominican Republic,
Denmark, France, Canada, Italy, Slovakia
and Spain, which include the principal
operating units of the Group.
–
Audit procedures undertaken at the
Group level and on the Company:
In
addition to the above, we also performed
audit work on the Group and Company
Financial Statements, including: the
consolidation of the Group’s results, the
preparation of the Financial Statements,
certain disclosures within the Directors’
Remuneration report, litigation
provisions and exposures, and entity
level and oversight controls relevant
to financial reporting. The component
account balances not covered by our
audit scope were subject to analytical
procedures confirming that there were
no significant risks of material
misstatement in the aggregated
financial information.
–
Internal controls testing approach:
We obtained an understanding of the
relevant internal controls over the
financial reporting process for our
audit risk assessment. We have
continued to place greater reliance on
financial controls, as a higher proportion
of the Group’s financial controls have
been transferred to the Group’s CBS,
which has a standardised controls and
processing environment. We have tested
and placed reliance on relevant financial
controls within the revenue and
expenditure business cycles processed
within the Group’s CBS, including
automated controls. Within other
components, we have obtained an
understanding of relevant controls.
We identified IT systems relevant to
the audit of the Group and obtained an
understanding of relevant IT controls.
For some operating companies,
including the main financial reporting
IT environment in the CBS centre, we
tested the general IT controls with the
involvement of our IT specialists and
placed reliance on general IT controls
–
Impact of climate change on our audit:
In planning our audit, we have
considered the potential impact of
climate change on the Group’s business
and its Financial Statements. The Group
has reassessed the risks and opportunities
relevant to climate change and
maintained the Environment and
Communities risk as a principal risk
across the Group.
As a part of our audit procedures, we
have reviewed the Group’s environment-
related risk assessment and held
discussions with the Audit and Risk
Committee to understand the process
of identifying climate-related risks, the
determination of mitigating actions and
the impact on the Group’s Financial
Statements. While management has
acknowledged that the transition and
physical risks posed by climate change
have the potential to impact the
medium- to long-term success of the
business, they have assessed that there
is no material impact arising from
climate change on the judgements and
estimates made in the Group Financial
Statements as at 31 December 2025 as
explained in Note 1.3 on page 139.
We performed our own qualitative risk
assessment of the potential impact of
climate change on the Group’s account
balances and classes of transactions and
did not identify any additional risks of
material misstatement. Our procedures
include reviewing disclosures included in
the Strategic Report to consider whether
they are materially consistent with the
Financial Statements and our knowledge
obtained in the audit.
8. Other information
The other information comprises the
information included in the Annual Report,
other than the Financial Statements and
our auditor’s report thereon. The Directors
are responsible for the other information
contained within the Annual Report.
Our opinion on the Financial Statements
does not cover the other information and,
except to the extent otherwise explicitly
stated in our report, we do not express
any form of assurance conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is
materially inconsistent with the Financial
Statements or our knowledge obtained
in the course of the audit, or otherwise
appears to be materially misstated.
If we identify such material inconsistencies
or apparent material misstatements, we
are required to determine whether this
gives rise to a material misstatement in the
Financial Statements themselves. If, based
on the work we have performed, we
conclude that there is a material
misstatement of this other information,
we are required to report that fact.
We have nothing to report
in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’
responsibilities statement, the Directors
are responsible for the preparation of the
Financial Statements and for being
satisfied that they give a true and fair view,
and for such internal control as the
Directors determine is necessary to enable
the preparation of Financial Statements
that are free from material misstatement,
whether due to fraud or error.
In preparing the Financial Statements, the
Directors are responsible for assessing
the Group’s and the Company’s ability to
132
Convatec Annual Report and Accounts 2025
Financial statements
Independent auditor’s report
continued
continue as a going concern, disclosing as
applicable, matters related to going
concern and using the going concern
basis of accounting unless the Directors
either intend to liquidate the Group or the
Company or to cease operations, or have
no realistic alternative but to do so.
10. Auditor’s responsibilities for the
audit of the Financial Statements
Our objectives are to obtain reasonable
assurance about whether the Financial
Statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee that
an audit conducted in accordance with
ISAs (UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of these
Financial Statements.
A further description of our
responsibilities for the audit of the
Financial Statements is located on the
FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description
forms part of our auditor’s report.
11. Extent to which the audit was
considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities, outlined
above, to detect material misstatements
in respect of irregularities, including
fraud. The extent to which our procedures
are capable of detecting irregularities,
including fraud is detailed below.
11.1. Identifying and assessing
potential risks related to irregularities
In identifying and assessing risks of
material misstatement in respect of
irregularities, including fraud and
non-compliance with laws and
regulations, we considered the following:
–
the nature of the industry and sector,
control environment and business
performance including the design of
the Group’s remuneration policies, key
drivers for Directors’ remuneration,
bonus levels and performance targets
–
the Group’s own assessment of the
risks that irregularities may occur
either as a result of fraud or error
that was approved by the Board
–
results of our enquiries of
management, internal audit, the
Directors and the Audit and Risk
Committee about their own
identification and assessment of the
risks of irregularities, including those
that are specific to the Group’s sector
– any matters we identified having
obtained and reviewed the Group’s
documentation of their policies and
procedures relating to:
–
identifying, evaluating and
complying with laws and regulations
and whether they were aware of any
instances of non-compliance
–
detecting and responding to the
risks of fraud and whether they have
knowledge of any actual, suspected
or alleged fraud
–
the internal controls established to
mitigate risks of fraud or non-
compliance with laws and regulations
–
the matters discussed among the
audit engagement team including
significant component audit teams
and relevant internal specialists,
including tax, valuations, IT and
financial instrument specialists
regarding how and where fraud
might occur in the Financial
Statements and any potential
indicators of fraud
As a result of these procedures, we
considered the opportunities and
incentives that may exist within the
organisation for fraud and identified
the greatest potential for fraud in certain
elements of revenue recognition and
expected credit loss provisioning. In
common with all audits under ISAs (UK),
we are also required to perform specific
procedures to respond to the risk of
management override. We also obtained
an understanding of the legal and
regulatory frameworks that the Group
operates in, focusing on provisions of
those laws and regulations that had a
direct effect on the determination of
material amounts and disclosures in the
Financial Statements. The key laws and
regulations we considered in this context
included the UK Companies Act, Listing
Rules, pensions legislation and tax
legislation. In addition, we considered
provisions of other laws and regulations
that do not have a direct effect on the
Financial Statements but compliance
with which may be fundamental to the
Group’s ability to operate or to avoid a
material penalty. These included the
Food and Drug Administration (“FDA”)
regulations and the Medical Devices
Regulations (“MDR”).
11.2. Audit response to risks identified
As a result of performing the above, we
identified revenue recognition in key
markets as a key audit matter and this
included the potential risk of fraud. The key
audit matters section of our report describes
the specific procedures we performed in
response to the key audit matters.
In addition to the above, our procedures
to respond to risks identified included
the following:
–
reviewing the Financial Statement
disclosures and testing to supporting
documentation to assess compliance
with provisions of relevant laws and
regulations described as having a direct
effect on the Financial Statements
–
enquiring of management, the Audit
and Risk Committee and both in-house
and external legal counsel concerning
actual and potential litigation and claims
–
performing analytical procedures to
identify any unusual or unexpected
relationships that may indicate risks
of material misstatement due to fraud
–
reading minutes of meetings of those
charged with governance, reviewing
internal audit reports and reviewing
correspondence with tax authorities in
jurisdictions in which the Group operates
–
in addressing the risk of fraud in
expected credit loss provisioning,
evaluating the level of historical
write-offs and the level of uncollected
sales from prior periods and
–
in addressing the risk of fraud through
management override of controls,
testing the appropriateness of journal
entries and other adjustments; assessing
whether the judgements made in making
accounting estimates are indicative of a
potential bias; and evaluating the
business rationale of any significant
transactions that are unusual or outside
the normal course of business
We also communicated relevant
identified laws and regulations and
potential fraud risks to all engagement
team members including internal
specialists and component audit teams,
and remained alert to any indications of
fraud or non-compliance with laws and
regulations throughout the audit.
Report on other legal and
regulatory requirements
12. Opinions on other matters
prescribed by the Companies Act 2006
In our opinion the part of the
Directors’ Remuneration report
to be audited has been properly
prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work
undertaken in the course of the audit:
–
the information given in the
strategic report and the
Directors’ report for the financial
year for which the Financial
Statements are prepared is
consistent with the Financial
Statements; and
–
the strategic report and the
Directors’ report have been
prepared in accordance with
applicable legal requirements
In the light of the knowledge
and understanding of the Group
and the Company and their
environment obtained in the
course of the audit, we have
not identified any material
misstatements in the strategic
report or the Directors’ report.
133
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
13. Corporate Governance Statement
The UK Listing Rules require us to review
the Directors’ Statement in relation to
going concern, longer-term viability and
that part of the Corporate Governance
Statement relating to the Group’s
compliance with the provisions of the UK
Corporate Governance Code specified for
our review.
Based on the work undertaken as
part of our audit, we have concluded
that each of the following elements
of the Corporate Governance
Statement is materially consistent
with the Financial Statements and
our knowledge obtained during
the audit:
–
the Directors’ statement with
regards to the appropriateness
of adopting the going concern
basis of accounting and any
material uncertainties identified
set out on page 138
–
the Directors’ explanation as to
its assessment of the Group’s
prospects, the period this
assessment covers and why the
period is appropriate set out on
page 76
–
the Directors’ statement on fair,
balanced and understandable
set out on page 95
–
the Board’s confirmation that it
has carried out a robust
assessment of the emerging and
principal risks set out on page 66
–
the section of the annual report
that describes the review of
effectiveness of risk
management and internal
control systems set out on page
67 and
–
the section describing the work
of the Audit and Risk Committee
set out on pages 94-103
14. Matters on which we are required
to report by exception
14.1. Adequacy of explanations
received and accounting records
Under the Companies Act 2006 we are
required to report to you if, in our
opinion:
–
we have not received all the
information and explanations we
require for our audit or
–
adequate accounting records have not
been kept by the Company, or returns
adequate for our audit have not been
received from branches not visited by
us or
–
the Company Financial Statements are
not in agreement with the accounting
records and returns
We have nothing to report in
respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are
also required to report if in our opinion
certain disclosures of Directors’
remuneration have not been made or the
part of the Directors’ Remuneration
report to be audited is not in agreement
with the accounting records and returns.
We have nothing to report in
respect of these matters.
15. Other matters which we are
required to address
15.1. Auditor tenure
Following the recommendation of
the Audit and Risk Committee, we
were appointed by the Directors on
12 December 2016 to audit the
Financial Statements for the year ending
31 December 2016 and subsequent
financial periods. The period of total
uninterrupted engagement including
previous renewals and reappointments
of the firm is ten years, covering the
years ending 31 December 2016 to
31 December 2025. As set out in the
Audit and Risk Committee report on
page 95-96, 2025 is the final year of our
audit tenure.
15.2. Consistency of the audit report
with the additional report to the Audit
and Risk Committee
Our audit opinion is consistent with the
additional report to the Audit and Risk
Committee we are required to provide in
accordance with ISAs (UK).
16. Use of our report
This report is made solely to the
Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work
has been undertaken so that we might
state to the Company’s members those
matters we are required to state to them
in an auditor’s report and for no other
purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
Company and the Company’s members as
a body, for our audit work, for this report,
or for the opinions we have formed.
As required by the Financial Conduct
Authority (FCA) Disclosure Guidance and
Transparency Rule (DTR) 4.1.15R – DTR
4.1.18R, these Financial Statements form
part of the Electronic Format Annual
Financial Report filed on the National
Storage Mechanism of the FCA in
accordance with DTR 4.1.15R – DTR
4.1.18R. This auditor’s report provides
no assurance over whether the Electronic
Format Annual Financial Report has been
prepared in compliance with DTR 4.1.15R
– DTR 4.1.18R.
Claire Faulkner, FCA
(Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
23 February 2026
Consolidated income statement
For the year ended 31 December 2025
2025
2024
Notes
$m
$m
Revenue
2
Cost of sales
(1,068 )
(1,005 )
Gross profit
Selling and distribution expenses
(668 )
(645 )
General and administrative expenses
(206 )
(195 )
Research and development expenses
(111 )
(112 )
Other operating expenses
3
(70 )
(7 )
Operating profit
3
Finance income
23
Finance expense
23
(71 )
(83 )
Fair value movement of contingent consideration
24
(10 )
(5 )
Non-operating (expense)/income, net
4
(8 )
Profit before income taxes
Income tax expense
5
(55 )
(55 )
Net profit
Earnings per share
Basic earnings per share (cents per share)
6
Diluted earnings per share (cents per share)
6
The accounting policies and notes on pages 138 to 175 form an integral part of the Consolidated Financial Statements. All amounts
are attributable to shareholders of the Group and wholly derived from continuing operations.
Consolidated statement of comprehensive income
For the year ended 31 December 2025
2025
2024
Notes
$m
$m
Net profit
Items that will not be reclassified subsequently to the Consolidated Income Statement
Remeasurement of defined benefit pension plans, net of tax
14
Changes in fair value of equity investments
9
(15 )
(6 )
Items that may be reclassified subsequently to the Consolidated Income Statement
Foreign currency translation
(48 )
Effective portion of changes in fair value of cash flow hedges
21
(11 )
Changes in fair value of cash flow hedges reclassified to the Consolidated Income Statement
21
(10 )
Costs of hedging
21
(1 )
Other comprehensive income/(expense)
(62 )
Total comprehensive income
All amounts are attributable to shareholders of the Group and wholly derived from continuing operations.
134
Convatec Annual Report and Accounts 2025
Financial statements
Consolidated financial statements
Consolidated statement of financial position
As at 31 December 2025
2025
2024
Notes
$m
$m
Assets
Non-current assets
Property, plant and equipment
7
Right-o
f
-use assets
22
Intangible assets
8
Goodwill
8
Investment in financial assets
9
Deferred tax assets
5
Restricted cash
20
Other non-current receivables
11
Current assets
Inventories
10
Trade and other receivables
11
Current tax receivable
Derivative financial assets
21
Restricted cash
20
Cash and cash equivalents
20
Total assets
Equity and liabilities
Current liabilities
Trade and other payables
12
Lease liabilities
22
Current tax payable
Derivative financial liabilities
21
Contingent consideration
24
Provisions
13
Non-current liabilities
Borrowings
19
Lease liabilities
22
Deferred tax liabilities
5
Contingent consideration
24
Provisions
13
Other non-current liabilities
12
Total liabilities
Net assets
Equity
Share capital
15
Share premium
15
Own shares
15
(303 )
(16 )
Retained deficit
(793 )
(828 )
Merger reserve
Cumulative translation reserve
(70 )
(170 )
Other reserves
15
Total equity
Total equity and liabilities
The Consolidated Financial Statements of Convatec Group Plc, company number 10361298, were approved by the Board of Directors
and authorised for issue on 23 February 2026 and signed on its behalf by:
J
onn
y
Mason
Fiona R
y
der
Chief Executive Officer
Chief Financial Officer
135
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
Consolidated statement of changes in equity
For the year ended 31 December 2025
Share
capital
Share
premium
Own
shares
Retained
deficit
Merger
reserve
Cumulative
translation
reserve
Other
reserves
Total
Notes
$m
$m
$m
$m
$m
$m
$m
$m
At 1 January 2024
(889 )
(122 )
Net profit
Other comprehensive expense:
Foreign currency translation
adjustment
(48 )
(48 )
Changes in fair value of cash flow
hedges, net of tax
(8 )
(8 )
Changes in fair value of equity
investments
(6 )
(6 )
Other comprehensive expense
(48 )
(14 )
(62 )
Total comprehensive
income/(expense)
(48 )
(14 )
Dividends paid
16
(130 )
(130 )
Purchase of shares by
Employee Benefit Trust
(23 )
(23 )
Share-based payments
17
Share awards vested
(6 )
Excess deferred tax benefit from
share-based payments
(2 )
(2 )
Changes in fair value of cash flow
hedges transferred to inventory
21
At 31 December 2024
(16 )
(828 )
(170 )
Net profit
Other comprehensive
income/(expense):
Foreign currency translation
adjustment
Remeasurement of defined benefit
pension plans, net of tax
14
Changes in fair value of cash flow
hedges, net of tax
21
Changes in fair value of equity
investments
9
(15 )
(15 )
Other comprehensive income
(10 )
Total comprehensive income
(10 )
Dividends paid
16
(140 )
(140 )
Purchase of shares by
Employee Benefit Trust
15
(25 )
(25 )
Purchase of treasury shares
15
(301 )
(301 )
Share-based payments
17
Share awards vested
(38 )
Changes in fair value of cash flow
hedges transferred to inventory
21
At 31 December 2025
(303 )
(793 )
(70 )
136
Convatec Annual Report and Accounts 2025
Financial statements
Consolidated financial statements
continued
Consolidated statement of cash flows
For the year ended 31 December 2025
2025
2024
Notes
$m
$m
Cash flows from operating activities
Net profit
Adjustments for:
Depreciation of property, plant and equipment
7
Depreciation of right-o
f
-use assets
22
Amortisation of intangible assets
8
Income tax
5
Non-operating expense, net
4
Fair value movement of contingent consideration
24
Finance costs, net
23
Share-based payments
17
Impairment of intangible assets
8
Impairment of property, plant and equipment
7
Change in assets and liabilities:
Inventories
(38 )
Trade and other receivables
(58 )
(27 )
Trade and other payables
Provisions
(2 )
(10 )
Other non-current payables
Net cash generated from operations
Interest received
Interest paid
(82 )
(84 )
Payment of contingent consideration arising from acquisitions
24
(2 )
(48 )
Income taxes paid
(54 )
(52 )
Net cash generated from operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
1
7
(135 )
(92 )
Acquisition of intangible assets
1
8
(50 )
(30 )
Proceeds from sale of property, plant and equipment
7
Acquisitions, net of cash acquired
24
(14 )
Payment of contingent consideration arising from acquisitions
24
(25 )
(23 )
Net cash inflow arising from divestitures
Investment in other financial assets
(5 )
Net cash used in investing activities
(208 )
(161 )
Cash flows from financing activities
Repayment of borrowings
19
(250 )
(98 )
Proceeds from borrowings
19
Realised loss on settlement of FX derivatives
(32 )
Payment of lease liabilities
22
(27 )
(25 )
Net cash inflow arising from lease incentives
22
Dividends paid
16
(140 )
(130 )
Purchase of own shares
15
(326 )
(11 )
Net cash used in financing activities
(258 )
(264 )
Net change in cash and cash equivalents
(28 )
Cash and cash equivalents at beginning of the year
20
Effect of exchange rate changes on cash and cash equivalents
(1 )
(5 )
Cash and cash equivalents at end of the year
20
1.
The comparatives have been re-presented as outlined in Note 1.6 to the Consolidated Financial Statements.
137
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
Financial statements
Convatec Annual Report and Accounts 2025
138
This section describes the Group’s material accounting policies that relate to the Consolidated Financial Statements and explains
critical accounting judgements and estimates that management has identified as having a potentially material impact to the
Group. Specific accounting policies relating to the Notes to the Consolidated Financial Statements are described within that note.
The Company's registered office is 7th Floor, 20 Eastbourne Terrace, London, W2 6LG, United Kingdom.
The Consolidated Financial Statements have been prepared in accordance with United Kingdom adopted international accounting
standards and IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
The Consolidated Financial Statements are presented in US dollars (USD), as the revenue and operating profits of the Company and
its subsidiaries (collectively, the Group) are primarily generated in US dollars and US dollar-linked currencies. All values are rounded
to the nearest million (previously $0.1m) except where otherwise indicated. Comparatives have been adjusted accordingly. Financial
ratios are calculated using unrounded numbers.
Pages 7 and 8 in the Strategic report and 22 to 27 in the Financial Review provide further detail of the Group's principal activities and
The following material accounting policies apply to the Consolidated Financial Statements as a whole:
The consolidated financial information has been prepared on a historical cost basis, except for certain financial instruments where
The Consolidated Financial Statements include the results of the Company and all of its subsidiary undertakings. Subsidiaries are
entities controlled ultimately by the Company. Control exists when the Company ultimately: (i) has power over the investee; (ii) is
exposed, or has rights, to variable returns from its involvement in the investee; and (iii) has the ability to use its power to affect its
returns. The Company reassesses whether or not it ultimately controls an entity if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
The consolidated financial information of the Company's subsidiaries is included within the Group's Consolidated Financial
Statements from the date that control commences until the date that control ceases and is prepared for the same year end date
As discussed in the Financial review on pages 22 to 27 the overall financial performance of the business remains very strong with a
robust liquidity position.
In preparing their assessment of going concern, management and the Board have considered available cash resources, actual
financial performance, forecast performance from the Board-approved 2026 budget and longer-term strategic plan and exposure
to the Group’s principal and emerging risks.
As at 31 December 2025, the Group had total liquidity of $607m (2024: $631m), comprising cash and cash equivalents of $68m
(2024: $65m) and $539m (2024: $566m) undrawn of the multi-currency revolving credit facility maturing in 2028. The Group also
had borrowings of $1,398m (2024: $1,123m) which, net of unamortised financing fees of $13m (2024: $11m), comprised of the
drawn element of the multi-currency revolving credit facilities of $411m maturing in 2028, senior unsecured notes of $500m
maturing in 2029 and senior unsecured notes of $500m maturing in 2035 (see Note 19 – Borrowings).
Management and the Board considered severe but plausible downside scenarios linked to the Group’s principal risks and also
performed a reverse stress test against the base forecast to determine the performance levels that would result in a breach of
covenants. The outcome of this test was considered implausible given the Group’s strong global market position.
As a result, management and the Board have a reasonable expectation that the Group and Company will have adequate liquid
resources to meet their respective liabilities as they become due for a period of at least 12 months from the date that the Financial
Statements have been authorised and therefore believe that it is appropriate to adopt the going concern basis of accounting in
Assets and liabilities of subsidiaries whose functional currency is not US dollars are translated into US dollars at the rate of exchange
at the period end. Equity is translated into US dollars at historic rate. Income and expenses are translated into US dollars at
the average rates of exchange prevailing during the year. Foreign currency gains and losses resulting from the translation of
subsidiaries into US dollars are recognised in the Consolidated Statement of Comprehensive Income. Exchange differences arising
from the translation of the net investment in foreign operations are taken to the cumulative translation reserve within equity. They
are recycled and recognised in the Consolidated Income Statement upon disposal of the operation.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each reporting
date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency
are not retranslated. Any gain or loss arising from subsequent exchange rate movements is included as an exchange gain or loss
Notes to the consolidated financial statements
Strategic report
Governance
Financial statements
Additional information
1. Basis of preparation
continued
Convatec Annual Report and Accounts 2025
139
1.3 Climate change
In preparing the Consolidated Financial Statements, the Board recognised the risk of climate change on the business and
acknowledge that the Group must take appropriate action to mitigate and, where feasible, prevent further climate change impact.
Further details are provided within the ‘Responsible Business Review’ and the ‘Task Force on Climate-related Financial Disclosure’
sections of the Annual Report and Accounts on pages 32 to 65. In addition, climate related risks have been considered within the
‘Environment and Communities’ principal risk and discussed in greater detail in the ‘Principal risks’ section within the Annual Report
and Accounts.
The Group does not believe that there is currently a material impact to financial reporting judgements and estimates in relation to
climate-related risks and, as a result, the valuation of assets and liabilities have not been significantly impacted as at 31 December 2025 .
Consideration was given to the financial reporting judgements and estimates in respect of the following areas:
–
Estimates of future cash flows used in the impairment assessment of goodwill
–
Valuation of the Group’s assets and liabilities (including the useful economic life of property, plant and equipment and other
intangible assets)
–
Going concern and viability of the Group over the next three years (see Viability assessment on pages 76 to 77 of the Annual
Report and Accounts)
Whilst there are currently no material changes or impact, management is aware of the variable risks that arise from climate change
and will regularly assess these risks against judgement and estimates made in the preparation of the Group’s Consolidated Financial
Statements, including their impacts on cash flows and the valuation of assets and liabilities.
The preparation of financial statements, in conformity with United Kingdom adopted international accounting standards and
International Financial Reporting Standards (IFRS), requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported value of assets and liabilities, income and expense. Actual results
may differ from these estimates or judgements of likely outcome. Management regularly reviews, and revises as necessary, the
accounting judgements that significantly impact the amounts recognised in the Consolidated Financial Statements and the sources
of estimation uncertainty that are considered to be key estimates due to their potential to give rise to material adjustments in the
Group’s Consolidated Financial Statements within the next financial year.
In preparing the Consolidated Financial Statements, no critical accounting judgements have been identified.
Management have identified one key source of estimation uncertainty in respect of the InnovaMatrix
®
platform. During the year,
an impairment of $72m has been recognised (see Note 8 – Intangible assets and goodwill for further information). Following the
impairment, the carrying amount for the intangible asset was $40m at 31 December 2025. On 31 October 2025, the Centers for
Medicare & Medicaid Services (CMS) published a decision outlining their revised payment rate of $127.28 per sq cm for skin
substitutes with effect from 1 January 2026. As the implementation takes effect, with a resultant change to the shape of the US
market share for skin substitutes and given the uncertainties inherent in forecasting the entry to new markets outside the US, this
could result in further impairments (or reversals of the existing impairment charge) of the intangible asset.
The underlying drivers of the recoverable amount are cash flows derived from financial forecasts up to 2036 and discounted to
present value. Actual performance may differ from these forecasts depending on the amounts or timing of product revenues.
The following reasonably possible changes in assumptions upon which the recoverable amount was estimated, would lead to the
following changes in the recoverable amount of this asset:
(Decrease)/ |
|
Increase in |
|
recoverable |
|
amount |
|
$m |
|
Increase in operating profit of 25% |
17 |
Decrease in operating profit of 25% |
(17) |
Increase in revenue of 20% |
15 |
Decrease in revenue of 20% |
(11) |
The range of reasonably possible outcomes within the next financial year would result in the carrying value of the intangible asset
1.5 Accounting standards
New standards, interpretations and amendments applied for the first time
On 1 January 2025, the Group adopted the following amendments which are mandatorily effective for the period beginning
1 January 2025:
–
Lack of exchangeability – Amendment to IAS 21
The adoption during the year of the amendment to IAS 21 has not had a material impact on the Consolidated Financial Statements.
Apart from this change, the accounting policies set out in the notes have been applied consistently to both years presented in these
Consolidated Financial Statements.
Convatec Annual Report and Accounts 2025
140
1. Basis of preparation
continued
Notes to the consolidated financial statements
continued
Financial statements
New standards, interpretations and amendments not yet effective
At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Accounting
Standards that have been issued but are not yet effective:
–
Amendments to the Classification and Measurement of Financial Instruments – Amendment to IFRS 9 and IFRS 7 (effective for the
period beginning 1 January 2026)
–
IFRS 18 – Presentation and Disclosures in Financial Statements (effective for the period beginning 1 January 2027)
–
IFRS 19 – Subsidiaries without Public Accountability: Disclosures (effective for the period beginning 1 January 2027)
The amendments to IFRS 9 and IFRS 7 are not expected to have a material impact on the Group’s financial statements.
The Group is currently finalising the expected impact of IFRS 18 on the Group’s Consolidated Financial Statements, which is effective
for annual periods beginning on or after 1 January 2027. Retrospective application is required, so the comparative information for
the financial year ending 31 December 2026 will be restated in accordance with IFRS 18.
Whilst the recognition and measurement of items in the Consolidated Financial Statements will not be impacted, the presentation
and disclosure of certain items within the Consolidated Income Statement will be affected. To date, the following potential impacts
have been identified:
–
Foreign exchange gains and losses currently aggregated within non-operating expenses will be disaggregated into operating,
financing and investing in accordance with the underlying nature of the transaction. Any foreign exchange gains and losses not
designated as financing or investing, will be classified as operating
–
Fair value movement of contingent consideration will be reclassified to be shown within operating
–
A new subtotal called ‘Profit or loss before financing and income taxes’ to be included in the Consolidated Income Statement
Potential impacts identified to date on the Consolidated Statement of Cash Flows include:
–
Operating profit will become the starting point for calculating cash flows from operating activities
–
Interest paid will be reclassified from operating cash flows to financing cash flows
–
Interest received will be reclassified from operating cash flows to investing cash flows
A new disclosure will be required to disaggregate functional expenses by nature (depreciation of property, plant and equipment and
right-of-use assets, amortisation of intangible assets, employee benefits, impairment losses/reversals and inventory write-downs).
As the Group’s equity instruments are publicly traded, it is not eligible to elect to apply IFRS 19 for the purposes of the Consolidated
Financial Statements of the Group.
Other interpretations and amendments
In addition to these issued standards, there are a number of other interpretations, amendments and annual improvement project
recommendations that have been issued but not yet effective that have not been adopted by the Group because application is not
yet mandatory, or they are not relevant for the Group.
1.6 Prior year re-presentations
Within the Consolidated Statement of Cash Flows, cash flows associated with the acquisition of property, plant and equipment and
acquisition of intangible assets have been disaggregated to provide greater clarity, and accordingly, the corresponding 2024 comparative
amounts have been re-presented for consistency and comparability between periods. Acquisition of property, plant and equipment of
$92m and acquisition of intangible assets of $30m for the year ended 31 December 2024 have been presented separately. There is no
Results of operations
This section includes disclosures explaining the Group’s performance for the year, including segmental information, operating
costs, other expenses, taxation and earnings per share.
2.1 Revenue recognition
The Group sells a broad range of products to a wide range of customers, including healthcare providers, patients and manufacturers.
This note provides further information about how the Group generates revenue and when it is recognised in the Consolidated
Income Statement.
The Group measures revenue for goods sold based on the consideration specified in a contract with a customer, net of discounts,
chargeback allowances and sales-related taxes. Revenue is recognised when control over a product is transferred to a customer,
distributor or wholesaler, which is generally when goods have been delivered. Due to the short-term nature of the receivables
from sale of goods, the Group measures them at the original transaction price without discounting.
Nature of goods
Advanced Wound Care, Ostomy Care, and Continence Care products are sold to pharmacies, hospitals and other acute and post-
acute healthcare service providers directly or through distributors and wholesalers. Products are also sold directly to end
customers (patients) through the Group's home services entities and a small number of clinical and retail outlets.
Accounting policy
continued
Strategic report
Governance
Financial statements
Additional information
2. Revenue and segmental information
continued
Convatec Annual Report and Accounts 2025
141
Infusion Care primarily serves business-to-business customers, consisting principally of the leading manufacturers for pumps for
insulin and other medications.
In 2025 and 2024, no single customer generated more than 10% of the Group's revenue.
Nature, timing of satisfaction of performance obligations
Principally the Group's contracts with customers contain a single performance obligation, that is the delivery of products to
customers. Revenue is typically recognised when the customer receives the product but is subject to the shipping terms in each
individual contract. Where non-standard shipping arrangements exist, revenue is recognised when control of the goods has
transferred. Allowances for returns, where the contract specifies these terms, are made at the point of sale.
For sales to distributors, revenue is recognised when title is transferred to the distributor and the distributor has assumed
control, the timing of which depends on the contractual terms with each distributor. Chargeback allowances or contractual
deductions relating to end-customer agreements, which may differ from distributor contracts, are made at the point of title
transfer to the distributor. In certain European countries, rebates are provided to governments and are often mandated by laws
or government regulations. These rebates are estimated based on government regulations and unbudgeted spending, laws and
terms of individual rebate agreements, and are recorded as a deduction from revenue at the time the related revenue is
recorded. The estimates are adjusted periodically to reflect actual experience.
When distributors buy products from the Group at a contract price and sell these products to end-customers at a price agreed
with the Group that is lower than the distributors’ list price, a chargeback may arise and a claim may be submitted to the Group
by the distributor. The provision for chargebacks is based on expected sell-through levels by the Group’s distributors to
contracted customers, as well as estimated distributor inventory levels. Retrospective claims are reviewed against estimations
to ensure provisions are regularly updated.
Volume discounts
The Group offers certain prospective volume discounts to customers who achieve a specified volume amount or value of
purchases in any given year. Volume discounts that meet the definition of a material right are recognised as a separate
performance obligation. Material rights are the option to purchase additional products at a discount which would not have been
given had the contract not been entered into and are incremental to the range of discounts typically given for those goods to that
class of customer.
The stand-alone selling price of these volume discounts is based on the discount that the customer would obtain when exercising
the option, adjusted for any discount the customer could receive without exercising the option and the likelihood that the option
will be exercised. The revenue allocated to volume discounts is short-term in nature and recognised proportionally to the pattern
of options exercised by the customer or when the option expires.
Variable consideration
The transaction price for revenue recognised is the amount the Group expects to receive at the date of revenue recognition.
In certain Group businesses, the transaction price is estimated based on the levels of rebates, discounts, allowances, product
returns and consideration expected to be received. In estimating the amounts to be recognised, the Group assesses historical
performance and collection patterns. The arrangements in different countries and with individual customers vary, but broadly
they are all dependent upon interactions with the customer, including the submission of claims that can extend to up to
24 months after the initial point of revenue recognition. This can include factors outside the direct trading relationship with
the customer such as reimbursement, retrospective rebate or other claims by an insurer, healthcare provider or governmental
agency which are not the Group’s direct customers and may also be impacted by the timing of when a product is used by a
customer. Where there is variability in relation to the consideration that will ultimately be received from a customer, the Group
estimates the amount of consideration to be recognised as revenue during the period using the expected value method, taking
into account the nature of the customer, the contractual arrangements, and other circumstances where known and relevant.
Revenue is not recognised in full until it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur.
Accruals and allocations against gross accounts receivables balances are recorded at the time of sales for the estimated rebates,
chargebacks, retrospective discounts, other allowances and returns based on contractual obligations, historical experience and
other information available at that point in time. Given the large number of variables involved in calculating these accruals it is
not practicable to provide meaningful sensitivity analysis for the resultant accruals.
The nature of the estimations means that there is considerable variability in the ultimate outcomes when considered on an
individual customer basis. As a result, the Group applies a limit on variable revenue consideration, in order to ensure that
revenue is recognised at an appropriate level. The objective of the limit is to ensure that there is a low probability of a significant
reversal of revenue when the uncertainties behind the estimations are resolved for the transactions of individual customers.
The limit is applied by making prudent estimates of the inputs and assumptions used in estimating the variable consideration.
These estimates are driven by historical information but also take into account the nature of customer and the specific contractual
arrangements the Group has with them. The limit means that the risk of a material downward adjustment to revenue in future
Convatec Annual Report and Accounts 2025
142
2. Revenue and segmental information
continued
Notes to the consolidated financial statements
continued
Financial statements
The Board considers the Group’s business to be a single segment entity engaged in the development, manufacture and sale
of medical products and technologies. R&D, manufacturing and central support functions are managed globally for the Group,
supporting all categories of sales. Revenues are managed both on a category and regional basis. This note presents the
performance and activities of the Group as a single segment. Pages 14 to 21 of the Strategic report provide further detail of
category revenue.
Convatec’s Executive Leadership Team (CELT) is the Group's Chief Operating Decision Maker (CODM). The CODM is the function
that allocates resources and evaluates the Group's global product portfolios on a revenue basis and evaluates profitability and
associated investment on an enterprise-wide basis due to shared infrastructures and support functions between the categories.
Group financial information is provided to CELT for decision-making purposes with revenue included by category as disclosed below.
Resources are allocated on a Group-wide basis, with a focus on both category and the key markets but primarily based on the merits
of individual proposals.
Revenue by category
The Group generates revenue across four major product categories. The following table sets out the Group's revenue for the year
ended 31 December by category:
2025 |
2024 |
|
$m |
$m |
|
Advanced Wound Care 1 |
753 |
743 |
Ostomy Care |
676 |
634 |
Continence Care |
537 |
501 |
Infusion Care |
473 |
411 |
Total |
2,439 |
2,289 |
1.
Advanced Wound Care includes InnovaMatrix® revenue of $69m (2024: $99m).
Geographic information
Geographic markets
The following table sets out the Group's revenue by geographic market in which third party customers are located:
2025 |
2024 |
|
$m |
$m |
|
North America |
1,358 |
1,296 |
Europe |
723 |
661 |
Rest of World (RoW) 2 |
358 |
332 |
Total |
2,439 |
2,289 |
2.
Rest of World (RoW) comprises all countries in Asia Pacific, Latin America (including Mexico and the Caribbean), the Middle East (including Türkiye) and Africa.
Geographic regions
The following table sets out the Group's revenue on the basis of where the legal entity generating the revenue resides, including
countries representing over 10% of Group revenue and the UK, where the Group is domiciled:
2025 |
2024 |
|
$m |
$m |
|
Geographic regions |
||
US |
909 |
896 |
Denmark |
456 |
400 |
UK |
169 |
129 |
Other 3 |
905 |
864 |
Total |
2,439 |
2,289 |
3.
Other consists primarily of other countries in Europe, Asia-Pacific, Latin America and Canada.
The following table sets out the Group's long-lived assets by country in which the legal entity resides:
2025 |
2024 |
|
$m |
$m |
|
Long-lived assets 4 |
||
US |
1,044 |
1,190 |
UK |
911 |
838 |
Denmark |
376 |
281 |
Other |
434 |
358 |
Total long-lived assets |
2,765 |
2,667 |
4.
Strategic report
Governance
Financial statements
Additional information
Convatec Annual Report and Accounts 2025
143
The Group incurs operating costs associated with the day-to-day operation of the business. These operating costs are deducted
from revenue to calculate operating profit.
Operating profit is stated after deducting from revenue:
2025 |
2024 |
||
Notes |
$m |
$m |
|
Depreciation: |
|||
Property, plant and equipment |
7 |
43 |
41 |
| Right-o f -use assets |
22 |
26 |
23 |
Amortisation of intangible assets |
8 |
155 |
157 |
Impairment of intangible assets |
8 |
72 |
1 |
Impairment of property, plant and equipment |
7 |
– |
7 |
Amounts in respect of inventories included in cost of sales 1 |
915 |
856 |
|
Lease expenses 2 |
22 |
2 |
2 |
Staff costs: |
|||
Wages and salaries |
646 |
618 |
|
Share-based payment expense |
17 |
28 |
20 |
Social security costs |
108 |
95 |
|
Defined contribution plans post-employment costs |
30 |
28 |
|
Defined benefit plans pension costs |
14 |
1 |
1 |
Recruitment and other employment-related fees |
5 |
5 |
|
Total staff costs |
818 |
767 |
1.
Amounts in respect of inventories included in cost of sales also includes write down of inventories of $13m (2024: $16m).
2.
The remuneration of the Executive Directors, which is set out on pages 104 to 121, has been audited and is included within staff
costs and forms part of these Consolidated Financial Statements.
The average number of the Group's employees by function:
The average number of the Group's employees by location
3
:
3,467
5,895
Operations
Sales and
marketing
General and
administrative
R&D
826 553
2025
10,741
3,311
5,704
Operations
Sales and
marketing
General and
administrative
R&D
857 538
2024
10,410
2025
1,479
3,655
5,276
10,410
Europe
3,882
Europe
North
America
RoW
North
America
RoW
1,402
5,457
2025
2024
10,741
3.
North America comprises the United States and Canada, and Rest of World (RoW) comprises all countries in Asia Pacific, Latin America (including Mexico and the
Caribbean), the Middle East (including Türkiye) and Africa.
The total remuneration of the Group's auditor, Deloitte LLP, for services provided to the Group during the year ended 31 December
is analysed below:
2025 |
2024 |
|
$m |
$m |
|
Fees for audit services |
||
The audit of the Company and Group financial statements |
1.9 |
1.8 |
The audit of the accounts of the Company’s subsidiaries |
3.0 |
3.1 |
Total fees for audit services |
4.9 |
4.9 |
Fees for non-audit services |
||
Audit-related assurance services |
0.2 |
0.2 |
Other non-audit services |
0.4 |
0.1 |
Total fees for non-audit services |
0.6 |
0.3 |
Total auditor remuneration |
5.5 |
5.2 |
A description of the work performed by the Audit and Risk Committee to safeguard auditor independence when non-audit services
Convatec Annual Report and Accounts 2025
144
3. Operating costs
continued
Notes to the consolidated financial statements
continued
Financial statements
Other operating expenses were as follows:
2025 |
2024 |
|
$m |
$m |
|
Impairment of intangible assets |
72 |
1 |
Impairment (reversal)/charge of property, plant and equipment and right-o f -use assets |
(2) |
6 |
Other operating expenses |
70 |
7 |
Other operating expenses in the year of $70m consisted of impairment charge of $72m in respect of the InnovaMatrix
®
product-
related intangible asset (refer to Note 8 – Intangible assets and goodwill) offset by an impairment reversal of $2m in respect of
Non-operating (expense)/income, net was as follows:
2025 |
2024 |
||
Notes |
$m |
$m |
|
Net foreign exchange gain/(loss) 1 |
32 |
(18) |
|
(Loss)/gain on foreign exchange forward contracts |
21 |
(41) |
26 |
Gain/(loss) on foreign exchange cash flow hedges |
21 |
4 |
(4) |
Write-off of receivables associated with divestiture activity |
(3) |
– |
|
Non-operating (expense)/income, net 2 |
(8) |
4 |
1.
The foreign exchange gain in 2025 primarily relates to the foreign exchange impact on intercompany transactions, including loans transacted in non-functional
currencies. The Group uses foreign exchange forward contracts to manage these exposures in accordance with the Group’s Foreign Exchange Risk Management policy.
2.
Of the total non-operating expense of $8m (2024: $4m income), $2m relates to the realised loss arising from the settlement of FX derivatives held to manage foreign
exchange risk in working capital (2024: $9m realised gain), which has not been reflected in the adjustments to derive net cash generated from operations on the
The note below sets out the current and deferred tax charges, which together comprise the total tax expense in the Consolidated
Income Statement. The deferred tax section of the note also provides information on expected future tax charges or benefits and
sets out the deferred tax assets and liabilities held across the Group.
Current tax
Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of prior years. Taxable profit differs
from profit before income taxes because taxable profit excludes items that are either never taxable or tax deductible or items
that are taxable or tax deductible in a different period.
Deferred tax is recognised using the balance sheet liability method for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised
for temporary differences:
–
On the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss;
–
Arising on the initial recognition of goodwill; and
–
On investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to temporary differences when the asset
is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it
is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Current tax and deferred tax for the year
Current tax and deferred tax are recognised in the Consolidated Income Statement, except when they relate to items that
are recognised in other comprehensive income or directly in equity, in which case, the current tax and deferred tax are also
recognised in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from
Strategic report
Governance
Financial statements
Additional information
Accounting policy
continued
Convatec Annual Report and Accounts 2025
145
Tax provisions
The Group is subject to income taxes in numerous tax jurisdictions. Judgement is sometimes required in determining the
worldwide provision for income taxes. There may be transactions for which the ultimate tax determination is uncertain and may
be challenged by the tax authorities. The Group recognises liabilities for anticipated or actual tax audit issues based on estimates
of whether additional taxes will be due. Where an outflow of funds to a tax authority is considered probable and the Group can
make a reliable estimate of the outcome of the issue, management calculates the provision for the best estimate of the liability.
In assessing its uncertain tax provisions, management takes into account the specific facts of each issue, the likelihood of
settlement and the input of professional advice where required. The Group assumes that where a tax authority has a right to
examine amounts reported to it, they will do so and will have full knowledge of all relevant information. Where the ultimate
liability as a result of an issue varies from the amounts provided, such differences could impact the current and deferred tax
5.1 Taxation
The Group's income tax expense is the sum of the total current and deferred tax expense.
2025 |
2024 |
|
$m |
$m |
|
Current tax |
||
UK corporation tax |
3 |
2 |
Overseas taxation |
81 |
66 |
Adjustment to prior years |
2 |
(4) |
Total current tax expense |
86 |
64 |
Deferred tax |
||
Origination and reversal of temporary differences |
(23) |
(5) |
Change in tax rates |
– |
3 |
Adjustment to prior years |
(8) |
(7) |
Total deferred tax benefit |
(31) |
(9) |
Income tax expense |
55 |
55 |
5.2 Reconciliation of effective tax rate
The effective tax rate for the year ended 31 December 2025 was 24.0% (2024: 22.5%).
Tax reconciliation to UK statutory rate
The table below reconciles the Group’s profit before income taxes at the UK statutory rate to the Group's total income tax expense:
2025 |
2024 |
|||
$m |
$m |
|||
Profit before income taxes |
230 |
246 |
||
Profit before income taxes multiplied by rate of corporation tax in the UK of 25.0% |
||||
(2024: 25.0%) |
58 |
62 |
||
Non-deductible/non-taxable items |
(9) |
5 |
||
Movement in provision for uncertain tax positions |
13 |
4 |
||
Other 1 |
(7) |
(16) |
||
Income tax expense and effective tax rate |
55 |
24.0% |
55 |
22.5% |
1.
2025 included a $6m impact in respect of prior year filings. In 2024, this included the release of a $3m tax liability relating to restructuring activities in Switzerland and the
$11m impact of prior year corporate income tax filings.
The Group has worldwide operations and therefore is subject to several factors that may affect future tax charges, principally the
levels and mix of profitability in different tax jurisdictions, transfer pricing regulations, tax rates imposed and tax regime reforms.
The calculation of the Group’s tax expense involves a degree of estimation and judgements in respect of certain items for which the
tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority, specifically in relation
to open tax and transfer pricing matters. Due to the high volume of intercompany transactions, the Group’s evolving business model
and the increasing complexity in interaction between multiple tax laws and regulations, transfer pricing requires judgement in
determining the appropriate allocation of profits between jurisdictions. The Group assessed the impact of ongoing changes to the
Group’s operating model, the supporting documentation for the tax and transfer pricing positions, existing tax authority challenges,
and the likelihood of new challenges by tax authorities.
The Group continues to believe it has made adequate provision for uncertain tax positions on open issues in accordance with
IFRIC 23 Uncertainty over Income Tax Treatments. The ultimate liability for such matters may vary from the amounts provided
and is dependent upon the outcome of discussions with relevant tax authorities or, where applicable, appeal proceedings.
The movement includes resolutions of uncertain tax positions in the year.
The Group has applied the temporary exception as detailed in the IASB announcement “International Tax Reform – Pillar Two Model
Rules”, which amended IAS 12 Income Taxes, and therefore has not recognised nor disclosed information about deferred tax assets
and liabilities related to Pillar Two income taxes.
Convatec Annual Report and Accounts 2025
146
5. Income taxes
continued
Notes to the consolidated financial statements
continued
Financial statements
The components of deferred tax assets and liabilities at 31 December were as follows:
2025 |
2024 |
|
$m |
$m |
|
Deferred tax assets |
59 |
23 |
Deferred tax liabilities |
(89) |
(83) |
(30) |
(60) |
5.4 Movement in deferred tax assets and liabilities
Deferred tax is measured on the basis of the tax rates enacted or substantively enacted at the reporting date. The movements in the
deferred tax assets and liabilities were as follows:
Inventor y |
Tax losses |
PP&E |
Intangibles |
Interest |
Other |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
$m |
|
At 1 January 2024 |
10 |
78 |
(5) |
(223) |
37 |
38 |
(65) |
Recognised in income statement |
4 |
(34) |
1 |
31 |
1 |
6 |
9 |
Recognised in other comprehensive |
|||||||
income |
– |
– |
– |
– |
– |
(2) |
(2) |
Foreign exchange |
(1) |
(1) |
– |
1 |
(1) |
– |
(2) |
At 31 December 2024 |
13 |
43 |
(4) |
(191) |
37 |
42 |
(60) |
Recognised in income statement |
1 |
(11) |
(1) |
44 |
(1) |
(1) |
31 |
Foreign exchange |
– |
– |
– |
(1) |
– |
– |
(1) |
At 31 December 2025 |
14 |
32 |
(5) |
(148) |
36 |
41 |
(30) |
Net deferred tax liabilities provided in relation to intangible assets are predominantly in respect of temporary differences arising on
assets and liabilities acquired as part of business combinations. An amount relating to deductible tax amortisation of intangible assets
of $306m (2024: $135m) that is not expected to reverse due to anticipated restructuring of the Group’s activities is not recognised.
Net deferred tax assets recognised in relation to tax losses are predominantly in respect of the US and UK.
Deferred tax on inventory predominantly relates to a deferred tax asset recognised on intra-Group profits arising on intercompany
inventory that are eliminated in the Consolidated Financial Statements. As intra-Group profits are not eliminated from the individual
entities’ tax returns, a temporary difference arises and will reverse when the inventory is sold externally.
Other net temporary differences include accrued expenses, employee costs and pensions, for which a tax deduction is only available
on a paid basis, research and development expenses, unremitted earnings and share-based payments.
To the extent that dividends remitted from overseas subsidiaries and branches are expected to result in additional taxes, appropriate
amounts have been provided for. Deferred tax is not provided on temporary differences of $425m in the year to 31 December 2025
(2024: $417m) arising on unremitted earnings as management has the ability to control any future reversal and does not consider
5.5 Unrecognised tax losses carried forward
Deferred tax assets are only recognised where it is probable that future taxable profits will be available to utilise the tax losses.
The following table shows the unrecognised tax losses carried forward, including anticipated period of expiration:
2025 |
2024 |
|
Losses |
Losses |
|
$m |
$m |
|
Trading and capital losses expiring: |
||
Within five years |
1 |
1 |
Unlimited |
1,021 |
926 |
Total |
1,022 |
927 |
The Group has Luxembourg tax losses of $1,005m (2024: $911m) which are not recognised and will not expire. The movement in
Strategic report
Governance
Financial statements
Additional information
Convatec Annual Report and Accounts 2025
147
Basic earnings per share is calculated based on the Group’s net profit for the year attributable to shareholders divided by the
weighted average number of ordinary shares in issue during the year. The weighted average number of shares is net of shares
purchased by the Group and held as own shares.
Diluted earnings per share take into account the dilutive effect of all outstanding share options priced below the market price
in arriving at the number of shares used in its calculation.
2025 | 2024 | |
Net profit attributable to the shareholders of the Group ($m) | 175 | 191 |
Basic weighted average ordinary shares in issue (number) | 2,024,809,094 | 2,047,643,498 |
Dilutive impact of share awards (number) | 9,477,296 | 9,153,919 |
Diluted weighted average ordinary shares in issue (number) | 2,034,286,390 | 2,056,797,417 |
Basic earnings per share (cents per share) | 8.6¢ per share | 9.3¢ per share |
Diluted earnings per share (cents per share) | 8.6¢ per share | 9.3¢ per share |
The calculation of diluted earnings per share for 2025 and 2024 did not contain any share options that were non-dilutive for the year,
Operating assets and liabilities
This section set outs the assets and liabilities that the Group holds in order to operate the business on a day-to-day basis,
including long-term assets which generate future revenues and profits for the Group.
Liabilities relating to the Group’s financing activities are addressed in "Capital structure and financial costs".
The Group invests in buildings, equipment and manufacturing machinery to operate the business and to generate revenue
and profits. Assets are depreciated over their estimated useful economic life reflecting the reduction in value of the asset due,
in particular, to wear and tear.
expenditures that are directly attributable to the acquisition of an asset including subsequent additions and improvements when
it is probable that future economic benefit associated with the item will flow to the Group and the cost can be reliably measured.
Depreciation is provided using a straight-line method from the point an asset becomes available for use. Depreciation is calculated
to reduce the asset’s cost to its residual value over the asset’s estimated useful economic life. Assets are depreciated as follows:
Asset category | Useful life |
Land | not depreciated |
Land improvements | 15 to 40 years |
Leasehold improvements | shorter of useful life or lease tenure |
Buildings | 15 to 50 years |
Machinery, equipment and fixtures | 2 to 20 years |
During the year, the useful life of machinery, equipment and fixtures has been changed from 3 to 20 years to 2 to 20 years.
This has changed to more accurately reflect the existing profile of our equipment – the impact of the change is not material.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds, less
any selling expenses, and the carrying amount of the asset. This difference is recognised in the Consolidated Income Statement.
Assets under construction reflects the cost of construction or improvement of items of PP&E that are not yet available for use.
Assets under construction are not depreciated whilst under construction and depreciation commences once the asset is
completed and ready for use. Finance costs incurred in the construction of assets that take more than one year to complete are
capitalised using the Group’s weighted average borrowing cost during the period in which the asset is under construction.
Capitalisation of finance costs ceases when the asset becomes available for use.
Consideration of useful economic lives
The assets’ residual values, depreciation methods and useful economic lives are reviewed annually and adjusted if appropriate.
Impairment of assets
The carrying values of PP&E are reviewed for indicators of impairment annually or when events or changes in circumstances indicate
the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated, being the higher
of an asset’s fair value less costs to sell and the net present value of its expected pre-tax future cash flows (value in use).
Convatec Annual Report and Accounts 2025
148
7. Property, plant and equipment
continued
Notes to the consolidated financial statements
continued
Financial statements
Building, |
|||||
building equipment |
Machinery, |
||||
Land and land |
and leasehold |
equipment and |
Assets under |
||
improvements |
improvements |
fixtures |
construction |
Total |
|
$m |
$m |
$m |
$m |
$m |
|
Cost |
|||||
1 January 2024 |
16 |
174 |
538 |
145 |
873 |
Additions |
– |
2 |
3 |
97 |
102 |
Disposals |
(1) |
(5) |
(10) |
– |
(16) |
Transfers |
– |
17 |
49 |
(66) |
– |
Foreign exchange |
– |
(11) |
(22) |
(7) |
(40) |
31 December 2024 |
15 |
177 |
558 |
169 |
919 |
Additions |
– |
5 |
20 |
139 |
164 |
Disposals 1 |
– |
(1) |
(35) |
– |
(36) |
Transfers |
– |
9 |
31 |
(40) |
– |
Foreign exchange |
1 |
15 |
52 |
17 |
85 |
31 December 2025 |
16 |
205 |
626 |
285 |
1,132 |
Accumulated depreciation |
|||||
1 January 2024 |
1 |
64 |
334 |
– |
399 |
Depreciation |
– |
9 |
32 |
– |
41 |
Disposals |
– |
(4) |
(10) |
– |
(14) |
Impairment |
– |
2 |
5 |
– |
7 |
Foreign exchange |
– |
(4) |
(13) |
– |
(17) |
31 December 2024 |
1 |
67 |
348 |
– |
416 |
Depreciation |
– |
10 |
33 |
– |
43 |
Disposals 1 |
– |
(1) |
(33) |
– |
(34) |
Foreign exchange |
– |
4 |
30 |
– |
34 |
31 December 2025 |
1 |
80 |
378 |
– |
459 |
Net carrying amount |
|||||
31 December 2024 |
14 |
110 |
210 |
169 |
503 |
31 December 2025 |
15 |
125 |
248 |
285 |
673 |
1.
Strategic report
Governance
Financial statements
Additional information
Convatec Annual Report and Accounts 2025
149
The Group’s intangible assets are those that have been recognised at fair value as part of business combinations, investment in
product development and software purchased to support business operations. These are assets that are not physical in nature
but can be sold separately or arise from legal rights.
Measurement on initial recognition of intangible assets is determined at cost for assets acquired by the Group and at fair value
at the date of acquisition if acquired in business combinations. Following initial recognition of the intangible asset, the asset is
carried at cost less any subsequent accumulated amortisation and accumulated impairment losses.
Purchased computer software and certain costs of information technology are capitalised as intangible assets. Software that is
integral to purchased computer hardware is capitalised as PP&E.
The Group’s software-as-a-service (SaaS) arrangements are arrangements in which the Group does not control the underlying
software The costs associated with the implementation and ongoing receipt of these services are expensed as incurred.
Customisation costs which are distinct, identifiable, create a resource controlled by the Group and which are expected to
generate future economic benefits are recognised as intangible assets on the basis of the costs incurred to acquire and bring
to use the specific software.
R&D expenses are comprised of all activities involving investigative, technical and regulatory processes related to obtaining
appropriate approvals to market our products. It also includes new product development aimed at developing more sustainable
product portfolios for the longer term, as mentioned within the Responsible Business review section (refer to page 36). Costs
include payroll, clinical manufacturing and pre-launch clinical trial costs, manufacturing development and scale-up costs, product
development, regulatory costs including costs incurred to comply with legislative changes, contract services and other external
contractors costs, research licence fees, depreciation and amortisation of laboratory facilities, and laboratory supplies.
Research costs are expensed as incurred. Development costs are capitalised only if the expenditure can be measured reliably, the
product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and
has sufficient resources to complete development and use or sell the asset. Subsequent to initial recognition, development costs
are measured at cost less accumulated amortisation and any accumulated impairment losses. Upgrades and enhancements are
Intangible assets with an indefinite life are not amortised. Amortisation of intangible assets with a finite life is calculated using
the straight-line method based on the following estimated useful lives:
Asset category |
Useful life |
Product-related |
3 to 20 years |
Capitalised software |
3 to 10 years |
Customer relationships and non-compete agreements |
2 to 20 years |
Trade names – finite |
2 to 10 years |
Trade names – indefinite |
Indefinite |
Impairment of assets
Intangible assets with finite life are reviewed for indicators of impairment at each reporting period or when events or changes in
circumstances indicate the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is
estimated, being the higher of an asset’s fair value less costs to sell and value in use (the net present value of its expected pre-tax
future cash flows).
When an asset’s recoverable amount falls below its carrying value, an impairment is charged to the Consolidated Income Statement.
Convatec Annual Report and Accounts 2025
150
8. Intangible assets and goodwill
continued
Notes to the consolidated financial statements
continued
Financial statements
Customer |
||||||
relationships |
||||||
and non- |
||||||
Capitalised |
compete |
Assets under |
||||
Product-related 1 |
software 2 |
agreements |
Trade names |
construction |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Cost |
||||||
1 January 2024 |
2,281 |
174 |
332 |
263 |
31 |
3,081 |
Additions |
1 |
4 |
– |
– |
27 |
32 |
Arising from acquisitions |
– |
– |
1 |
– |
– |
1 |
Write-offs |
(13) |
– |
– |
– |
– |
(13) |
Transfers |
11 |
25 |
– |
– |
(36) |
– |
Foreign exchange |
(14) |
(2) |
(6) |
– |
(1) |
(23) |
31 December 2024 |
2,266 |
201 |
327 |
263 |
21 |
3,078 |
Additions |
1 |
2 |
– |
– |
48 |
51 |
Transfers |
1 |
10 |
– |
– |
(11) |
– |
Foreign exchange |
57 |
6 |
12 |
2 |
2 |
79 |
31 December 2025 |
2,325 |
219 |
339 |
265 |
60 |
3,208 |
Accumulated amortisation |
||||||
1 January 2024 |
1,776 |
109 |
249 |
12 |
– |
2,146 |
Amortisation |
118 |
20 |
19 |
– |
– |
157 |
Write-offs |
(13) |
– |
– |
– |
– |
(13) |
Impairment |
– |
– |
1 |
– |
– |
1 |
Foreign exchange |
(13) |
– |
(6) |
– |
– |
(19) |
31 December 2024 |
1,868 |
129 |
263 |
12 |
– |
2,272 |
Amortisation |
118 |
21 |
16 |
– |
– |
155 |
Impairment |
72 |
– |
– |
– |
– |
72 |
Foreign exchange |
48 |
3 |
12 |
– |
– |
63 |
31 December 2025 |
2,106 |
153 |
291 |
12 |
– |
2,562 |
Net carrying amount |
||||||
31 December 2024 |
398 |
72 |
64 |
251 |
21 |
806 |
31 December 2025 |
219 |
66 |
48 |
253 |
60 |
646 |
1.
The comparatives and policy for product related and development costs have been combined and re-presented as one category labelled product related. This is due to
the similar nature of the assets within each category.
2.
Capitalised software is in respect of purchased and internally generated software.
On 31 October 2025, the Centers for Medicare & Medicaid Services (CMS) published a decision outlining their revised payment rate
of $127.28 per sq cm for skin substitutes with effect from 1 January 2026. This payment rate impacted Convatec’s InnovaMatrix®
product, which is a leading porcine placental-derived extra-cellular matrix for treatment of chronic, surgical and trauma wounds.
Management deemed that this announcement constituted an indicator of impairment in respect to the InnovaMatrix® platform
intangible asset held on the balance sheet and calculated the recoverable amount of the asset.
As a result, an impairment loss of $72m was recognised in the year. Prior to the impairment, the asset had a carrying amount of $112m.
Following the recognition of the impairment loss, the asset’s recoverable amount at 31 December 2025 was $40m. The asset continues
to have a remaining useful life of ten years.
The recoverable amount of the asset was determined to be its fair value less costs of disposal (being the higher of its value in use
and fair value less cost of disposal). The excess earnings method has been used to measure fair value less costs of disposal.
In line with IFRS 13, Fair Value Measurement, the fair value measurement of the asset has been classified as Level 3 in the fair value
hierarchy as its measurement is derived from significant unobservable inputs requiring significant management judgement.
Key assumptions used in determining the fair value less costs of disposal include:
–
discounted cash flows derived from financial forecasts up to 2036, which represents the end of the asset’s remaining useful
economic life. Cash flow projections reflect management’s best estimates based on historical performance and future conditions
and have been appropriately risk adjusted.
–
A post-tax discount rate of 9.0% was used and reflects the current market assessment of the time value of money and risks
specific to the Advanced Wound Care CGU.
A key source of estimation uncertainty has been recognised in respect of the carrying amount of this intangible asset – refer to
Note 1 – Basis of Preparation. This includes sensitivity to reasonably possible changes in key assumptions.
Strategic report
Governance
Financial statements
Additional information
8. Intangible assets and goodwill
continued
Convatec Annual Report and Accounts 2025
151
Amortisation expenses in respect of finite-lived intangible assets for the year ended 31 December were as follows:
2025 |
2024 |
|
$m |
$m |
|
Cost of sales |
111 |
112 |
Selling and distribution expenses |
5 |
5 |
General and administrative expenses |
30 |
32 |
Research and development expenses |
9 |
8 |
Total amortisation expense |
155 |
157 |
The carrying amount of trade names with indefinite life at 31 December 2025 was $250m (2024: $248m). Each of these trade names
is considered to have an indefinite life, given the strength and durability of the current trade name and the level of marketing
support. The trade names are in relatively similar stable and profitable market sectors, with similar risk profiles, and their size,
diversification and market shares of the products to which the trade names relate mean that the risk of market-related factors
causing a reduction in the lives of the trade names is considered to be relatively low. The Group is not aware of any material legal,
The Group recognises goodwill resulting from business combinations where there are future economic benefits from assets
which cannot be individually separated and recognised. Goodwill represents the amount paid in excess of the fair value of the
net assets of the acquired business.
goodwill arising from acquisitions.
Goodwill is not subject to amortisation but is tested for impairment annually or when events or changes in circumstances indicate
the carrying value may be impaired. Impairment losses recognised in respect of goodwill cannot be reversed. Refer to Note 8.3 –
Cash Generating Unit (CGU) impairment review for consideration of impairment of goodwill.
Goodwill is denominated in the functional currency of the acquired entity and revalued to the closing exchange rate at each
The changes in the carrying value of goodwill as at 31 December were as follows:
Total |
|
$m |
|
1 January 2024 |
1,299 |
Arising from acquisitions |
11 |
Foreign exchange |
(20) |
31 December 2024 |
1,290 |
Arising from acquisitions (Note 24) |
1 |
Foreign exchange |
59 |
31 December 2025 |
1,350 |
An impairment assessment is required to be performed annually for goodwill and indefinite-lived intangibles or when events or
changes in circumstances indicate the carrying value may be impaired. An impairment is a reduction in the recoverable amount
of an asset compared to the carrying value of the asset. The recoverable amount is the higher of value in use and fair value less
costs to sell. This note provides details of the annual impairment policy and the assessment that has been performed.
use that are largely independent of the cash inflows of other assets or CGUs. Additionally, goodwill arising from a business
combination is allocated to a CGU or groups of CGUs that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
The recoverable amounts of the CGUs are determined based on value in use calculations, which reflect the estimated future cash
flows of each CGU discounted by an estimated weighted average cost of capital that represents the rate of return an outside
investor would expect to earn. This discount rate is based on the weighted average cost of capital for comparable public
companies and is adjusted for risks specific to the CGU including differences in risk due to its size, geographic concentration
and trading history.
Convatec Annual Report and Accounts 2025
152
8. Intangible assets and goodwill
continued
Accounting policy
continued
Notes to the consolidated financial statements
continued
Financial statements
Future cash flows are determined using the latest available Board-approved forecasts and strategic plans. These forecasts and
strategic plans are based on specific assumptions for each CGU during the five-year planning period with respect to revenue,
results of operations, working capital, capital investments and other general assumptions for the projected period. The forecast
assumptions that derive the future cash flows are based on the historical results of each CGU combined with external market
information and defined strategic initiatives.
If identified, impairment losses are recognised in the Consolidated Income Statement. They are allocated first to reduce the
carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the remaining assets in
the CGU, on a pro-rated basis.
An impairment in respect of goodwill is not reversed. For other assets, an impairment is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no
The CGUs identified by management are consistent with the four categories within the Group that generate cash inflows which are
largely independent of each other. These are Advanced Wound Care, Ostomy Care, Continence Care and Infusion Care. The Group
continues to operate under the same operating model as prior year and determined that there has not been any triggers for a
change in CGU groups. Profitability continues to be assessed on a consolidated basis, and management’s focus is predominantly
category revenue and key market focus. Goodwill is allocated to these CGUs, which represent the lowest level within the Group at
which the goodwill is monitored for internal management purposes.
Goodwill and intangible assets with an indefinite life (trade names) are allocated to the Group's CGU groups as at 31 December as follows:
Goodwill |
Indefinite-lived intangible assets |
|||
2025 |
2024 |
2025 |
2024 |
|
$m |
$m |
$m |
$m |
|
CGU groups |
||||
Advanced Wound Care |
537 |
518 |
105 |
105 |
Ostomy Care |
158 |
153 |
91 |
91 |
Continence Care |
562 |
541 |
41 |
41 |
Infusion Care |
93 |
78 |
13 |
11 |
Total |
1,350 |
1,290 |
250 |
248 |
The key input used in the estimation of value in use as at 31 December 2025 is the Group’s five-year Board-approved strategic plan,
with key assumptions including forecast sales growth rates, terminal value growth rate and discount rates. Forecast sales growth
rates are based on past experience adjusted for macroeconomic activity, sector market growth forecasts, competitor activity and
strategic decisions made in respect of each CGU group. In calculating the value in use, pre-tax discount rates have been applied to
projected risk-adjusted pre-tax cash flows.
The terminal value growth rate and discount rates used were as follows:
2025 |
2024 |
|
Discount rate (pre-tax) 1 |
% |
% |
CGU groups |
||
Advanced Wound Care |
11.0 |
10.6 |
Ostomy Care |
10.4 |
10.6 |
Continence Care |
10.0 |
10.0 |
Infusion Care |
10.6 |
10.2 |
Terminal value growth rate 2 |
2.0 |
2.0 |
1.
The discount rate is based on the weighted average cost of capital for comparable public companies and is adjusted for risks specific to the CGU group including
differences in risk due to its size, geographic concentration and trading history.
2.
The estimated terminal value growth rate for the CGU groups is a prudent estimate based on expectations concerning the growth trends of the CGU groups and taking
into account global gross domestic product growth, general long-term inflation and population expectations.
No impairments have been recognised in respect of the Group’s current CGU groups for the year ended 31 December 2025.
Taking into consideration the Board-approved 2026 budget and longer-term strategic plan as foundations, sensitivity analysis was
performed considering changes in key assumptions including discount rates and terminal value growth rate and consideration of
risk-based severe but plausible downside scenarios consistent with those identified as part of the Viability assessment (refer to
page 77 for full details of scenarios). As part of the assessment, an external benchmarking assessment was also carried out on
the forecast sales growth rates.
Strategic report
Governance
Financial statements
Additional information
Convatec Annual Report and Accounts 2025
153
Accounting policy
directly attributable transaction costs and subsequently recognised at fair value at each balance sheet date.
Unrealised gains and losses are recognised in other comprehensive income.
On disposal of the equity investment any gains and losses that have been deferred in other comprehensive income are
transferred directly to retained earnings.
Dividends on equity investments are recognised in the income statement when the Group’s right to receive payment is
Investment in financial assets comprise non-current equity investments which are initially recorded at fair value plus any directly
attributable transaction costs and subsequently recognised at fair value at each balance sheet date.
The Group has an investment in BlueWind Medical Limited, which it considers to be strategic in nature and not held for trading.
The Group has made an irrevocable election on initial recognition to designate the investment at Fair Value Through Other
Comprehensive Income (FVOCI). The fair value of the investment at 31 December 2025 was $2m (31 December 2024: $17m),
with the movement of $15m taken to the Consolidated Statement of Other Comprehensive Income.
In line with IFRS 13, Fair Value Measurement, this investment has been classified as Level 3 in the fair value hierarchy as its
measurement is derived from significant unobservable inputs by reference to available information, including the current market
value of similar instruments, recent financing rounds and discounted cash flows of the underlying net assets.
The fair value of the investment has been determined by a third party, and confirmed by management, primarily based on the
Income Approach Method (discounted cash flows) and supported by a Market Approach using multiples derived from listed peers
and past transactions. The Precedent Transaction Method (or Price of Recent Investment approach) has been discontinued this year
given the time elapsed since the investment in BlueWind. The table below summarises the various methodologies used by the
Group to fair value the investment, the key inputs and the sensitivities applied.
Sensitivity applied to input |
|||
Methodology |
Inputs |
Low range |
High range |
Income Approach Method |
Internal cash flow projections |
||
(Discounted cash flow analysis) |
|||
Provides an estimation of the value of an |
Discount rate (WACC) appropriate for the |
+0.5% on |
-0.5% on |
asset based on expectations about the |
risk of achieving the project cash flows of |
discount rate |
discount rate |
cash flows that an asset would generate |
26.4% |
||
over time, discounted at the appropriate |
|||
rate of return. |
|||
The final year of projections has been |
-0.5% on the long- |
+0.5% on the long- |
|
extrapolated using a reasonable long |
term growth rate |
term growth rate |
|
growth rate of 2% |
|||
Market Approach |
Revenue multiples ranging between 2.0x |
+1% on each of the |
-1% on each of the |
and 6.0x |
concluded multiple |
concluded multiple |
|
The Guideline Public Company Method was |
ranges |
ranges |
|
adopted, which estimates a company’s fair |
|||
value by referencing valuation multiples |
|||
from publicly traded companies that are |
|||
comparable in industry focus, growth |
|||
profile and operational characteristics. |
|||
Fair value measurement |
nil |
$6m |
|
The impact of applying these sensitivities across the methodologies used would result in a fair value measurement range of nil to
Convatec Annual Report and Accounts 2025
154
Notes to the consolidated financial statements
continued
Financial statements
Inventories are the materials used in manufacturing, products manufactured or purchased to be sold by the Group in the
ordinary course of business. Inventories include finished goods, goods which are in the process of being manufactured (work in
progress) and raw and packaging materials awaiting use in production.
calculate a standard cost. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct
costs and indirect production overheads. Production overheads comprises indirect material and labour costs, maintenance and
depreciation of the machinery and production buildings used in the manufacturing process, as well as costs of production
administration and management. Any manufacturing or purchasing variances between actual costs and standard costs are
deferred over the appropriate inventory holding period, which may vary based on the specific nature of the inventory.
Net realisable value is defined as anticipated selling price or anticipated revenue less cost to completion. Estimates of net
realisable value are based on the average selling prices at the end of the reporting period, net of applicable direct selling
expenses. Subsequent events related to the fluctuation of prices and costs are also considered, if relevant. If net realisable values
are below inventory costs, a provision corresponding to this difference is recognised.
Provisions are also made for obsolescence of inventories that (i) do not meet the Group's specifications, (ii) have exceeded their
expiration date, or (iii) are considered slow-moving. The Group evaluates the carrying value of inventories on a regular basis, taking
into account such factors as historical and anticipated future sales compared with quantities on hand, the price the Group expects to
The components of inventories at 31 December were as follows:
2025 |
2024 |
|
$m |
$m |
|
Raw and packaging materials |
105 |
93 |
Work in progress |
51 |
32 |
Finished goods |
260 |
224 |
Inventories |
416 |
349 |
Inventories are stated net of provision for obsolescence of $11m (2024: $11m). Adjustments to write-down inventory to its net
Trade receivables consist of amounts billed and currently due from customers. Gross trade receivables are presented before
allowances for expected credit losses, sales discounts and chargeback allowances. Credit risk with respect to trade receivables
is generally diversified due to the large dispersion and type of customers across many different geographies.
Other receivables include amounts due from third parties not related to revenue and prepaid expenses.
is evaluated on a regular basis. Exposure to credit risk is managed through credit approvals, credit limits and monitoring
procedures. The Group considers a default event to be one where the customer does not have sufficient funds to make their
required payments and/or is in the process of being liquidated.
An allowance is maintained for expected lifetime credit losses that result from the failure or inability of customers to make
required payments. It is not necessary for a credit event to have occurred before credit losses are recognised. Instead, the Group
accounts for expected lifetime credit losses and changes in those expected lifetime credit losses. In determining the allowance,
consideration includes the probability of recoverability based on past experience and general economic factors, incorporating
forward-looking information and adjustments for customers who represent a lower risk of default, which includes public or
private medical insurance customers and customers guaranteed by local government. The amount of expected credit losses,
if any, is required to be updated at each reporting date.
Certain trade and other receivables may be fully reserved when specific collection issues are known to exist, such as pending
bankruptcy. The Group writes off uncollectable receivables at the time it is determined the receivable is no longer collectable.
Trade and other receivables are not collateralised. Where the Group has entered into a receivables financing arrangement,
these receivables are derecognised at the point of sale in accordance with IFRS 9 if we have substantially transferred all risks
and rewards of ownership and there is no option to return the receivables to the Group.
Strategic report
Governance
Financial statements
Additional information
11. Trade and other receivables
continued
Convatec Annual Report and Accounts 2025
155
2025 |
2024 |
|
$m |
$m |
|
I ncluded within current assets: |
||
Trade receivables |
384 |
311 |
Less: allowances for expected credit losses |
(23) |
(16) |
Less: sales discounts and chargebacks |
(35) |
(28) |
Other receivables 1 |
55 |
34 |
Prepayments |
38 |
34 |
Trade and other receivables |
419 |
335 |
1.
The aged analysis of trade receivables at 31 December was as follows:
2025 |
2024 |
|
$m |
$m |
|
Current |
302 |
248 |
Past due 1 to 30 days |
16 |
18 |
Past due 31 to 90 days |
18 |
22 |
Past due 91 to 180 days |
15 |
7 |
Past due by more than 180 days |
33 |
16 |
384 |
311 |
The unimpaired amounts at 31 December that are past due were aged as follows:
2025 |
2024 |
|
$m |
$m |
|
Past due 1 to 30 days |
11 |
18 |
Past due 31 to 90 days |
17 |
21 |
Past due 91 to 180 days |
14 |
6 |
Past due by more than 180 days |
17 |
2 |
59 |
47 |
The Group believes that the unimpaired amounts that are past due are still collectable in full, based on historic payment behaviour
and extensive analysis of customer credit risk.
2025 |
2024 |
|
$m |
$m |
|
At 1 January |
(16) |
(27) |
Charged to the income statement |
(15) |
(10) |
Released to the income statement |
1 |
9 |
Utilisation of provision |
9 |
12 |
Foreign exchange |
(2) |
– |
At 31 December |
(23) |
(16) |
Other non-current receivables
Other non-current receivables of $11m (2024: $12m) are principally in respect of deposits held with lessors, prepaid expenses and
other receivables.
Receivables financing
The Group has a Limited Recourse Financing Arrangement at a beneficial financing cost with a financial institution for certain customers
who have a stronger credit profile than the Group and longer than normal payment terms. It has been assessed that the Group has
substantially transferred all the risks and rewards of ownership to the financial institution and accordingly, these receivables have
been derecognised at the point of sale in accordance with IFRS 9.
Convatec Annual Report and Accounts 2025
156
Notes to the consolidated financial statements
continued
Financial statements
Trade payables consist of amounts owed to third-party suppliers and represent a contractual obligation to deliver cash in the future.
Other payables include taxes and social security, accruals and liabilities for other employee-related benefits.
The components of trade and other payables at 31 December were as follows:
2025 | 2024 | |
$m | $m | |
Included within current liabilities: | ||
Trade payables | 217 | 125 |
Taxes and social security | 43 | 32 |
Other employee-related liabilities | 115 | 114 |
Accruals and other payables 1 | 118 | 111 |
Trade and other payables | 493 | 382 |
1.
Included within accruals and other payables was customer rebates of $17m (2024: $18m) and amounts held in escrow of $7m (2024: $9m).
2025 | 2024 | |
$m | $m | |
Included within non-current liabilities: | ||
Defined benefit obligations (Note 14) | 11 | 12 |
Other employee-related liabilities | 5 | 4 |
Accruals and other payables | 20 | 15 |
Other non-current liabilities | 36 | 31 |
A provision is an obligation recognised when there is uncertainty over the timing or amount that will be paid. Provisions
recognised by the Group are primarily in respect of restructuring, dilapidations and legal liabilities.
legal or constructive obligation as a result of a past event, it is probable that the Group will be required to settle the obligation
and that obligation can be measured reliably. Restructuring provisions are only recognised when a constructive obligation exists,
which requires both a detailed formal plan and a valid expectation being raised in those affected by starting to implement that
plan or announcing the main features. Provisions are measured at the best estimate of the expenditure required to settle the
obligation and are discounted to present value if the effect is material. Provisions are reviewed on a regular basis and adjusted
to reflect management’s best current estimates. Due to the judgemental nature of these items, future settlements may differ
from amounts recognised.
When the timing of a settlement is uncertain or expected to be more than 12 months from the reporting date, amounts are
The movements in provisions were as follows:
Dilapidations Restructuring | Legal | Total | ||
$m | $m | $m | $m | |
1 January 2025 | 3.1 | 4.3 | 0.4 | 7.8 |
Charged to income statement | – | 3.9 | 0.1 | 4.0 |
Released to income statement | – | (0.4) | – | (0.4) |
Utilised | (0.4) | (5.1) | (0.1) | (5.6) |
Foreign exchange | 0.1 | 0.3 | – | 0.4 |
31 December 2025 | 2.8 | 3.0 | 0.4 | 6.2 |
Current | – | 3.0 | – | 3.0 |
Non-current | 2.8 | – | 0.4 | 3.2 |
Strategic report
Governance
Financial statements
Additional information
13. Provisions
continued
Convatec Annual Report and Accounts 2025
157
The expected payment profile of the discounted provisions at 31 December was as follows:
2025 | 2024 | |
$m | $m | |
Within 1 year | 3.0 | 4.3 |
2 to 5 years | 3.2 | 3.5 |
Total | 6.2 | 7.8 |
Dilapidation provisions are in respect of contractual obligations, on the expiry of a lease, to return leased properties in the condition
Restructuring provisions
Restructuring provisions are in respect of the Group’s strategic transformation activities. All restructuring provisions are supported
by detailed plans, and a valid expectation has been raised to those affected as required by the Group’s accounting policy.
Legal provision
The legal provisions are in respect of ongoing cases. Legal issues are often subject to uncertainties over the timing and the final
The Group has over 10,000 employees globally and operates a number of defined benefit and defined contribution pension plans
for its employees. Each individual plan is subject to the applicable laws and regulations of the country in which the plan operates.
Defined contribution arrangements are where the Group pays fixed payments as they fall due into a separate fund on behalf of
employees participating in the plan and has no further legal or constructive obligations. The cost of Group contributions to
defined contribution arrangements during the year is provided in Note 3 – Operating costs.
A defined benefit plan is a pension or other post-employment benefit plan under which the Group has an obligation to provide
agreed benefits to current and former employees. The Group bears the risk that its obligation may increase or that the value of
the assets in the pension fund may decline. The benefit payable in the future by the Group is discounted to the present value and
the fair value of plan assets is deducted to measure the defined benefit pension position.
The Group has defined benefit plans in a number of European countries. The most significant plans are Switzerland, two state
mandated plans that remain open to all Swiss employees; and Germany, with one unfunded plan, that remains open to German
employees but closed to new entrants, and a funded plan put in place from April 2019. The Group's other defined benefit plans
are located in Austria, France and Italy (referred to as "Other" in the tables below).
For plans in Switzerland, Germany and Austria, asset funds for each country are being accumulated to meet the accruing
liabilities. The assets of each of these funds are either held under trusts or managed by insurance companies and are entirely
separate from the Group’s assets.
Payments to defined contribution pension plans are recognised as an expense when employees have rendered service entitling
them to the contributions. Payments made to state-managed retirement benefit plans are treated as payments to defined
contribution pension plans where the Group’s obligations under the plans are equivalent to those arising in a defined
contribution pension plan.
Defined benefit pension plans
The Group records an asset or liability related to its defined benefit pension plans as the difference between the fair value of the
plan assets and the present value of the plan liabilities. The obligations of the plans are calculated using the Projected Unit Credit
Method, with actuarial valuations being performed by an independent actuary at the end of each reporting period. The valuation
requires estimates and judgements to be made to calculate the Group’s liabilities, and results in actuarial gains and losses
being recorded.
Actuarial gains and losses, movements in the return on plan assets (excluding interest) and the impact of the asset ceiling
(if applicable) are recognised immediately in the Consolidated Statement of Financial Position with a charge or credit to the
Consolidated Statement of Comprehensive Income. Remeasurements recorded in the Consolidated Statement of Comprehensive
Income are not subsequently reclassified to the Consolidated Income Statement.
Past service cost is recognised in the Consolidated Income Statement in the period of plan amendment, where relevant.
Net interest is calculated by applying a discount rate to the net defined benefit liability or asset.
The assets of the plans are held at fair value, which is equal to market value, and are held in separate trustee-administered funds
or similar structures in the countries concerned. Surplus assets within the plan are only recognised to the extent that they are
recoverable in accordance with IFRIC Interpretation 14,
IAS 19, The Limit on a Defined Benefit Asset, Minimum Funding Requirements
and their Interaction
Convatec Annual Report and Accounts 2025
158
14. Post-employment benefits
continued
Notes to the consolidated financial statements
continued
Financial statements
Risks
The defined benefit plans typically expose the Group to risks. The most significant risks impacting the Group as a result of these
plans are as follows:
Investment risk | The present value of the defined benefit plan liability is calculated using a discount rate determined by |
reference to high-quality corporate bond yields; if the return on plan assets is below this rate, it will create | |
a plan deficit. | |
Interest risk | A decrease in the interest rate will increase the plan liability, but this will be partially offset by an increase |
in the return on the plan’s fixed rate debt instruments. | |
Longevity risk | The present value of the defined benefit plan liability is calculated by reference to the best estimate of the |
mortality of plan participants both during and after their employment. An increase in the life expectancy of | |
the plan participants will increase the plan’s liability. | |
Salary risk | The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan |
participants. As such, an increase in the salary of the plan participants will increase the plan’s liability. |
Amounts recorded in the Consolidated Financial Statements
Consolidated Income Statement
The aggregate expense for all post-employment defined benefit plans recognised in the Consolidated Income Statement for the
year ended 31 December was as follows:
2025 | 2024 | |
$m | $m | |
Defined benefit plans: | ||
Current service cost | 1.3 | 1.0 |
Past service (income) | (1.2) | (0.1) |
Interest (income) on plan assets | (0.1) | – |
Interest expense on defined benefit obligations | 0.5 | 0.3 |
Total expense (Note 3) | 0.5 | 1.2 |
Consolidated Statement of Comprehensive Income
Aggregate actuarial gains and losses for all defined benefit plans recognised in the Consolidated Statement of Comprehensive
Income for the year ended 31 December were as follows:
2025 | 2024 | |
$m | $m | |
Remeasurement effect recognised in other comprehensive income: | ||
Actuarial (loss)/gain on liabilities due to experience | (0.7) | 0.1 |
Actuarial gain/(loss) arising from changes in financial assumptions | 2.1 | (0.5) |
Actuarial (loss)/gain on plan assets | (0.2) | 0.1 |
Remeasurement gain/(loss) recognised in other comprehensive income | 1.2 | (0.3) |
Total amount recognised in other comprehensive income | 1.2 | (0.3) |
Consolidated Statement of Financial Position
The amount recognised for each defined benefit arrangement in the Consolidated Statement of Financial Position at 31 December
was as follows:
German y | Switzerland | Other | Total | |||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
$m | $m | $m | $m | $m | $m | $m | $m | |
Fair value of schemes' assets | 1.0 | 0.7 | 11.1 | 12.9 | 0.8 | 0.7 | 12.9 | 14.3 |
Present value of funded schemes' | ||||||||
liabilities | (8.8) | (8.6) | (12.6) | (14.7) | (0.8) | (0.8) | (22.2) | (24.1) |
Deficit in the funded schemes | (7.8) | (7.9) | (1.5) | (1.8) | – | (0.1) | (9.3) | (9.8) |
Present value of unfunded schemes' | ||||||||
liabilities | – | – | – | – | (1.7) | (1.7) | (1.7) | (1.7) |
Net pension liability | (7.8) | (7.9) | (1.5) | (1.8) | (1.7) | (1.8) | (11.0) | (11.5) |
Recognised within Consolidated Statement of Financial Position: | ||||||||
Defined benefit obligations (Note 12) | (11.0) | (11.5) | ||||||
The weighted average duration of the Group's defined benefit obligations at the end of the year is 18.5 years (2024: 17.3 years).
Strategic report
Governance
Financial statements
Additional information
14. Post-employment benefits
Convatec Annual Report and Accounts 2025
159
continued
Fair value of assets and present value of the liabilities of the plan
The amount included in the Consolidated Statement of Financial Position arising from its obligations in respect of its defined benefit
plans was as follows:
Assets | Liabilities | Total | |
$m | $m | $m | |
At 1 January 2024 | 12.6 | (24.7) | (12.1) |
Current service cost | – | (1.0) | (1.0) |
Past service income | – | 0.1 | 0.1 |
Interest expense | – | (0.3) | (0.3) |
Remeasurement gain/(loss) | 0.7 | (0.5) | 0.2 |
Contributions by employer | 1.3 | – | 1.3 |
Contributions by members | 0.4 | (0.4) | – |
Benefits paid | (3.3) | 3.3 | – |
Experience gain | – | 0.1 | 0.1 |
Transfer from multi-employer scheme | 3.5 | (4.1) | (0.6) |
Foreign exchange | (0.9) | 1.7 | 0.8 |
At 31 December 2024 | 14.3 | (25.8) | (11.5) |
Current service cost | – | (1.3) | (1.3) |
Past service income | – | 1.2 | 1.2 |
Interest income/(expense) | 0.1 | (0.5) | (0.4) |
Remeasurement (loss)/gain | (0.1) | 2.1 | 2.0 |
Contributions by employer | 1.1 | – | 1.1 |
Contributions by members | 0.4 | (0.4) | – |
Benefits paid | (5.0) | 5.0 | – |
Experience loss | – | (0.6) | (0.6) |
Foreign exchange | 2.1 | (3.6) | (1.5) |
At 31 December 2025 | 12.9 | (23.9) | (11.0) |
Plan assets
The fair value of defined benefit plan assets at 31 December, which has been determined in accordance with IFRS 13,
Fair Value
Measurements
, is analysed below. All assets, either directly or as held in a fund, have a quoted market price and are categorised
as a Level 1 measurement in the fair value hierarchy.
German y | Switzerland | Other | Total | |||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
$m | $m | $m | $m | $m | $m | $m | $m | |
Equity instruments | 1.0 | 0.7 | 4.1 | 4.3 | – | – | 5.1 | 5.0 |
Debt instruments | – | – | 3.4 | 4.5 | – | – | 3.4 | 4.5 |
Property | – | – | 2.2 | 2.6 | – | – | 2.2 | 2.6 |
Qualifying insurance policies | – | – | – | – | 0.8 | 0.7 | 0.8 | 0.7 |
Other | – | – | 1.4 | 1.5 | – | – | 1.4 | 1.5 |
Plan assets | 1.0 | 0.7 | 11.1 | 12.9 | 0.8 | 0.7 | 12.9 | 14.3 |
Actuarial assumptions
The Group makes certain key assumptions in order to value the plan obligations, and the approach to how these were set was
as follows:
Approach taken | |
Discount rate | Calculated by reference to the yields on high-quality corporate bonds which match expected cash |
flows in each territory in which a defined benefit plan is present. | |
Inflation | Calculated using the difference on yields between fixed and index-linked government bonds. |
Future salary increases | Based on historical expectations and known future increases, including expected inflation rates. |
Mortality | Based on mortality tables derived from assessments performed by national governments and based |
upon recommendations by plan actuaries. |
The principal actuarial assumptions for each defined benefit arrangement used at 31 December were as follows:
German y | Switzerland | Other | ||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
Discount rate | 4.53% | 3.32% | 1.20% | 1.10% | 3.18% to 4.35% | 3.18% to 3.61% |
Rate of price inflation | N/A | N/A | 1.50% | 1.00% | 2.00% to 2.20% | 2.00% to 2.20% |
Future salary increases | 2.50% | 2.50% | 1.75% | 1.75% | 0.00% to 2.50% | 0.00% to 2.50% |
Convatec Annual Report and Accounts 2025
160
14. Post-employment benefits
continued
Notes to the consolidated financial statements
continued
Financial statements
The current mortality assumptions underlying the values of the obligations in the defined benefit plans were as follows:
German y | Switzerland | Other | ||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
Life expectancy at age 65 | ||||||
Male | 21.0 years | 18.9 years | 21.9 years | 22.8 years | 18.8 years | 18.8 years |
Female | 24.4 years | 22.3 years | 23.7 years | 24.5 years | 23.9 years | 24.0 years |
Life expectancy at age 65 in 20 years' time | ||||||
Male | 23.8 years | 21.6 years | 21.9 years | 24.8 years | 18.8 years | 18.8 years |
Female | 26.6 years | 24.5 years | 23.7 years | 26.4 years | 23.9 years | 24.0 years |
Sensitivity analysis
The effect of movements in the key actuarial assumptions in respect of the Germany and Switzerland plans at 31 December 2025
would be an (increase)/decrease to the defined benefit asset/liabilities as follows:
German y | Switzerland | |||
Increase | Decrease | Increase | Decrease | |
0.5% | 0.5% | 0.5% | 0.5% | |
Discount rate | 0.7 | (0.6) | 0.8 | (0.9) |
Future salary increases | N/A | N/A | (0.2) | 0.2 |
1 year increase | 1 year decrease | 1 year increase | 1 year decrease | |
Life expectancy | (0.1) | 0.3 | N/A | N/A |
Future funding
Payments expected to be made by the Group to its defined benefit pension plans in the year ending 31 December 2026 are as follows:
German y | Switzerland | Other | Total | |
$m | $m | $m | $m | |
Expected payments | 0.2 | 0.4 | – | 0.6 |
Capital structure and financial costs
The Group ensures that all entities within the Group have sufficient funding to deliver the Group’s strategy while maximising the
return to shareholders through the debt and equity balance. The capital structure of the Group consists of net debt (which includes
borrowings less cash and cash equivalents and excluding lease liabilities) and equity of the Group, comprising issued capital,
reserves and earnings as disclosed in the Consolidated Statement of Changes in Equity. The Group's capital structure is managed
to provide ongoing returns to shareholders and service debt obligations whilst maintaining maximum operational flexibility.
Called up share capital is the total number of shares in issue at their par value. The rights attaching to the ordinary shares are
uniform in all respects. They form a single class for all purposes, including with respect to voting and for all dividends and other
distributions thereafter declared, made or paid on the ordinary share capital of the Group. Incremental costs directly attributable
to the issue of new ordinary shares are shown in equity as a deduction from the proceeds, net of tax.
Share premium
The share premium represents amounts received in excess of the nominal value of the ordinary shares.
Own shares are ordinary shares in the Group purchased and held by the Company or an Employee Benefit Trust, either to satisfy
obligations under the Group's employee share ownership programmes or to be cancelled. The Employee Benefit Trust is
consolidated as an extension of the Group and the Company.
When any Group company purchases the Company’s equity share capital (own shares), the consideration paid, including any
directly attributable incremental costs (net of tax), is deducted from equity until the shares are cancelled, reissued or disposed of.
Upon cancellation, the nominal value of the shares cancelled is transferred to a capital redemption reserve.
Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable costs and the
Strategic report
Governance
Financial statements
Additional information
15. Share capital and reserves
continued
Convatec Annual Report and Accounts 2025
161
In 2016, the Consolidated Financial Statements were prepared under merger accounting principles. Under these principles, no
acquirer was required to be identified, and all entities were included at their pre-combination carrying amounts. This accounting
treatment led to differences on consolidation between issued share capital and the book value of the underlying net assets. This
difference is included within equity as a merger reserve.
Cumulative translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
Other reserves
Other reserves comprises of the cumulative changes in the effective portion of cash flow hedges, remeasurement of defined
Share capital
Share capital, share premium and the number ordinary shares of 10 pence each were as follows:
2025 |
2024 |
|
Issued and fully paid or credited as fully paid |
||
Share capital ($m) |
251 |
251 |
Share premium ($m) |
181 |
181 |
Ordinary shares (number) |
2,049,789,559 |
2,049,789,559 |
Own shares
During the year, the Company repurchased a total of 94,937,530 ordinary shares (2024: nil) under its share buyback programme,
authorised by the Board on 20 August 2025. The shares were repurchased in the open market at a total cost of £226m ($301m)
(inclusive of transaction costs), representing an average price of £2.38 ($3.17) per share. As at 31 December 2025, these were all
held as treasury shares. These shares carry no voting rights and are not entitled to dividends.
The buyback was funded from available cash reserves and is part of the Company’s long standing capital allocation strategy aimed
at enhancing shareholder returns. The programme was completed in December 2025.
As at 31 December 2025, 397,450 shares (2024: 5,444,666 shares) were held in the Employee Benefit Trust.
The shares held in treasury and by the Employee Benefit Trust are presented as a deduction from equity. There is a waiver in place
in respect of all or any future right to dividend payments on shares held in the Convatec Employee Benefit Trust.
The movement in own shares is summarised below:
Held by Employee |
Held in treasury by |
|||||
Benefit Trust |
Convatec Group Plc |
Total own shares |
||||
Amount |
Amount |
Amount |
||||
Number |
($m) |
Number |
($m) |
Number |
($m) |
|
As at 1 January 2025 |
5,444,666 |
16 |
– |
– |
5,444,666 |
16 |
Shares repurchased |
7,789,018 |
25 |
94,937,530 |
301 |
102,726,548 |
326 |
Shares vested to employees |
(12,836,234) |
(39) |
– |
– |
(12,836,234) |
(39) |
As at 31 December 2025 |
397,450 |
2 |
94,937,530 |
301 |
95,334,980 |
303 |
The market value of own shares at 31 December 2025 was $312m (2024: $15m).
At 31 December 2025, the retained surplus of the Company was $3,425m (2024: $3,089m) of which $1,811m (2024: $1,475m) was
realised and distributable – refer to Note 8 – Distributable Reserves in the Company’s Financial Statements for further details. The
capacity of the Company to make dividend payments is primarily determined by the availability of these retained and realised
distributable reserves and the Group's cash resources including available borrowing facilities.
Other reserves
Other reserves include the share-based payment reserve of $174m (2024: $184m) and remeasurement of defined benefit obligations
of $6m (2024: $5m) and the effective portion of cash flow hedges of $1m (2024: $3m) offset by the remeasurement of equity
investments of $29m (2024: $14m). A reconciliation of movements in all reserves is provided in the Consolidated Statement of
Convatec Annual Report and Accounts 2025
162
Notes to the consolidated financial statements
continued
Financial statements
The Group ensures that adequate realised distributable reserves are available in the Company in order to meet proposed
shareholder dividends and the purchase of shares for employee share scheme incentives. The Company principally derives
distributable reserves from dividends received from subsidiary companies.
In determining the level of dividend for the year, the Board considers the following factors and risks that may influence the
proposed dividend:
–
Availability of realised distributable reserves
–
Available cash resources and commitments
–
Strategic opportunities and investments, in line with the Group’s strategic plan and
–
Principal risks of the Group (as disclosed on pages 70 to 74)
The Board paid the 2024 final dividend in May 2025 and the 2025 interim dividend in October 2025. The Board has taken into
consideration balancing the return to shareholders and the additional investment in transformation in the period. The decision
to increase the dividend for 2025 reflects the Board’s confidence in the future performance of the Group, this includes its
underlying financial strength and cash generation when assessing cash flow forecasts for the next two years from the date of the
dividend payment. Further details of the Group’s considerations and rationale for its policy in respect of the dividend distribution
are given in the Directors’ report on page 122.
Dividends paid and proposed were as follows:
Pence |
Cents |
Total |
|
per share |
per share |
$m |
|
Final dividend 2023 |
3.517 |
4.460 |
91 |
Interim dividend 2024 |
1.422 |
1.822 |
39 |
Paid in 2024 |
4.939 |
6.282 |
130 |
Final dividend 2024 |
3.639 |
4.594 |
101 |
Interim dividend 2025 |
1.399 |
1.877 |
39 |
Paid in 2025 |
5.038 |
6.471 |
140 |
Final dividend 2025 proposed |
3.973 |
5.367 |
105 |
The final dividend proposed for 2025 is to be distributed on 28 May 2026 to shareholders on the register at the close of business on
17 April 2026 and is subject to shareholder approval at the Annual General Meeting on 21 May 2026. The dividend will be declared in
US dollars and will be paid in Sterling at the chosen exchange rate of $1.351/£1.00 determined on 23 February 2026.
The Group operates a number of plans used to award shares to Executive Directors and other senior employees as part of their
remuneration package. A charge is recognised over the vesting period in the Consolidated Income Statement to record the cost
of these, based on the fair value of the award at the grant date.
The Group’s share-based payment schemes in place are as follows:
Long Term Incentive Plan (LTIP) (Equity settled)
Provides Performance Share Plan (PSP) awards subject to Group performance and market conditions and Restricted Stock Units
(RSU) subject only to remaining employed up to the vesting date. Details on share-based payments in relation to Executive
Directors is set out on pages 104 to 121.
Deferred Bonus Plan (DBP) (Equity settled)
Provides for the grant of share awards to defer a portion of the participant’s bonus as determined by the Remuneration
Committee. The awards vest subject only to remaining employed up to the vesting date.
Share Plan/Matching Share Plan (SP/MSP) (Equity settled & cash settled)
Provides for the grant of discretionary share awards. Awards granted in 2025 will vest to employees still employed on the vesting date.
Employee Plans (Equity settled & cash settled)
The Group also operates Employee Plans which provide eligible employees the opportunity to save up to £500 per month (or local
currency equivalent) with an option to acquire shares using these savings at a 15% discount to the market price at date of grant.
The Employee Plans are available to employees under the following schemes:
–
Save-As-You-Earn (SAYE)
– Available to all employees in the UK employed by participating Group companies.
–
Employee Stock Purchase Plan (ESPP)
– Available to all employees in the US.
–
International Share Save Plan
– Available to all employees in the rest of the world.
Strategic report
Governance
Financial statements
Additional information
17. Share-based payments
continued
Convatec Annual Report and Accounts 2025
163
of non-market-based vesting conditions. The fair value of the awards at the date of the grant is expensed to the Consolidated
Income Statement over the vesting period on a straight-line basis.
Appropriate adjustments are made to reflect expected and actual forfeitures during the vesting period due to uncertainties
in satisfying service conditions or non-market performance conditions. The corresponding credit is to other reserves in the
Consolidated Statement of Financial Position.
For certain jurisdictions, the share-based payment awards are cash-settled. Cash-settled share-based payment awards are
remeasured at the fair value of the award at each reporting date and expensed to the Consolidated Income Statement over
Share-based payment expenses recognised in the Consolidated Income Statement were as follows:
2025 |
2024 |
|
$m |
$m |
|
LTIP |
18 |
12 |
SP/MSP |
7 |
6 |
DBP |
2 |
1 |
Employee Plans |
1 |
1 |
28 |
20 |
During the year to 31 December 2025, $28m (2024: $20m) of share-based payments were equity-settled. All amounts that were
equity-settled were recognised in other reserves, with immaterial amounts that were cash-settled recognised through other
non-current liabilities.
Awards outstanding
The movements in the number of share and share option awards and the weighted average exercise price of share options are
detailed below:
2025 |
2024 |
|||
Weighted |
Weighted |
|||
average |
average |
|||
Number of |
exercise price |
Number of |
exercise price |
|
shares/options |
of options |
shares/options |
of options |
|
000s |
£ per share |
000s |
£ per share |
|
Outstanding at 1 January |
30,890 |
0.28 |
31,439 |
0.29 |
Granted |
12,607 |
0.37 |
10,667 |
0.27 |
Forfeited |
(5,450) |
0.25 |
(5,207) |
0.25 |
Exercised |
(12,202) |
0.18 |
(6,009) |
0.24 |
Outstanding at 31 December |
25,845 |
0.37 |
30,890 |
0.28 |
Exercisable at 31 December |
657 |
1.74 |
670 |
1.74 |
Weighted average fair value of awards granted (£ per share) |
– |
1.79 |
– |
1.97 |
The average share price during 2025 was £2.49 (2024: £2.45). The share price of the Company at 31 December 2025 was £2.43
(2024: £2.21).
The range of exercise prices and the weighted average remaining contractual life of options outstanding at 31 December were as follows:
2025 |
2024 |
|
Number of |
Number of |
|
shares/options |
shares/options |
|
Range of prices |
000s |
000s |
Nil |
20,752 |
26,240 |
1.74 |
526 |
1,546 |
1.76 |
990 |
1,101 |
1.96 |
3,577 |
1,444 |
2.08 |
– |
559 |
25,845 |
30,890 |
|
Weighted average remaining contractual life of options outstanding |
2.2 years |
1.9 years |
Convatec Annual Report and Accounts 2025
164
17. Share-based payments
continued
Notes to the consolidated financial statements
continued
Financial statements
Valuation assumptions
All share awards granted are valued directly by reference to the share price at date of grant except:
–
PSP shares awarded under the LTIP and MSP plans are subject to both market-based measures and non-market-based measures.
Values under the market-based element are based on relative Total Shareholder Return (TSR) performance conditions and are
valued using a Monte Carlo simulation.
–
Options granted under the Employee Plans are valued using the Black-Scholes model.
The principal assumptions used in these valuations were:
| 2025 |
2024 |
|||||
SAYE and |
SAYE and |
|||||
International |
International |
|||||
LTIP |
Share Save Plan |
ESPP |
LTIP |
Share Save Plan |
ESPP |
|
Share price at date of grant |
£2.64 |
£2.31 |
£2.31 |
£2.81 |
£2.31 |
£2.31 |
Exercise price |
nil |
£1.96 |
£1.96 |
nil |
£1.96 |
£1.96 |
Expected life |
3 years |
3.6 years |
2.0 years |
3 years |
3.6 years |
2.0 years |
Expected volatility 1 |
27.5% |
27.5% |
27.5% |
28.1% |
28.1% |
28.1% |
Risk free rate |
4.2% |
3.7% |
3.8% |
4.3% |
4.3% |
4.5% |
Dividend yield |
n/a |
2.2% |
2.2% |
n/a |
1.9% |
1.9% |
Fair value |
£1.96 |
£0.45 |
£0.41 |
£2.02 & £2.19 |
£0.48 |
£0.43 |
1.
The expected volatility was determined by calculating the observed historical volatility of share prices of peer group companies (including the Company) over the
The Group’s treasury policy seeks to minimise the Group's principal financial risks. No trading or speculative transactions in
financial instruments are undertaken. This note presents information about the Group’s exposure to financial risks and the
Group’s objectives, policies and processes for measuring and managing risks.
Financial risk management objectives
Based on the global operations of the Group, management consider the key financial risks to be liquidity, foreign exchange, interest
rate and counterparty credit. The management of counterparty credit risk is discussed in Note 11 – Trade and other receivables.
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group
manages and minimises liquidity risk by using global cash management solutions and actively monitoring both actual and projected
cash outflows to ensure that it will have sufficient liquidity to meet its liabilities when due and have headroom to provide against
unforeseen obligations. As at 31 December 2025, the Group held cash and cash equivalents of $68m (2024: $65m), of which 27.3%
(2024: 32.3%) was held centrally.
Medium and long-term borrowing requirements are met through committed bank facilities and capital market funding as detailed in
Note 19 – Borrowings. Short-term borrowing requirements, if necessary, may be met from drawings under the multicurrency facility.
Longer term, the Group has assessed its liquidity forecast as part of the viability assessment and its ability to continue trading as
As a result of the global nature of operations, the Group is exposed to market risk arising from changes in foreign currency
exchange rates.
Where possible, the Group manages foreign exchange risk by matching same currency revenues and expenses. It will also denominate
debt in certain currencies and use foreign exchange forward contracts and swap contracts to further minimise transactional foreign
exchange risk, with certain currency contracts designated as cash flow hedges; refer to Note 21 – Financial Instruments for details.
As a result, the impacts of the fluctuations in the market values of assets and liabilities and the settlement of foreign currency
transactions are reduced.
Strategic report
Governance
Financial statements
Additional information
18. Financial risk management
continued
Convatec Annual Report and Accounts 2025
165
The following table summarises the exchange rates used for the translation of currencies into US dollars that have the most
significant impact on the Group results:
Average rate/ |
|||
Currenc y |
Closing rate |
2025 |
2024 |
USD/EUR |
Average |
1.13 |
1.08 |
Closing |
1.17 |
1.04 |
|
USD/GBP |
Average |
1.32 |
1.28 |
Closing |
1.35 |
1.25 |
|
USD/DKK |
Average |
0.15 |
0.15 |
Closing |
0.16 |
0.14 |
During 2025, revenue was mostly USD denominated (55%) (2024: 56%). Other significant currencies were EUR (20%) (2024: 19%)
and GBP (5%) (2024: 5%). The balance comprises a basket of other currencies which, on an individual basis, were each no more than
3% of revenue.
Sensitivity analysis on foreign exchange risk
The sensitivity analysis below assumes a 10% strengthening of the US dollar against the principal currencies to highlight the
sensitivity of profit before income taxes and total equity to translation foreign exchange risk as at 31 December, with all other
variables held constant.
2025 |
2024 |
||
Currenc y |
Sensitivity |
$m |
$m |
I ncrease/(decrease) in profit before income taxes |
|||
USD/GBP |
+10% |
(6) |
4 |
USD/EUR |
+10% |
– |
(8) |
USD/DKK |
+10% |
(15) |
(12) |
(Increase) / decrease in total equit y |
|||
USD/GBP |
+10% |
(103) |
(85) |
USD/EUR |
+10% |
(45) |
3 |
USD/DKK |
+10% |
(44) |
(31) |
Interest rate risk
The Group’s principal exposure to interest rate risk is in relation to interest expense on borrowings made under the Group's credit
facilities which attract interest at floating rates plus a fixed margin as well as any cash or investments that result in interest income
at floating rates. Floating rate instruments expose the Group to interest rate cash flow and expense risk. The Group manages this
exposure on a net basis within Board-approved policy parameters, including the use of interest rate swaps designated as cash flow
hedges to maintain an appropriate mix between fixed and floating rate borrowings.
As at 31 December 2025, the Group’s borrowings were principally denominated in USD, GBP and EUR. The Group’s credit facilities
expose the Group to SOFR, SONIA and EURIBOR. The Group’s interest rate swaps of $75m, are referenced to the SOFR benchmark
(see Note 21 – Financial instruments).
Sensitivity analysis on interest rate risk
Based on the composition and the terms of the Group's borrowings as at 31 December 2025, and including the 0% interest rate floor
and after the effect of the interest rate swaps and cash, if interest rates were to increase or decrease by 100 basis points, the interest
expense on borrowings would increase by $2m (2024: $4m) or decrease by $2m (2024: $4m) assuming that all other variables remain
Convatec Annual Report and Accounts 2025
166
Notes to the consolidated financial statements
continued
Financial statements
The Group’s sources of borrowing for funding and liquidity purposes derive from senior notes and credit facilities including
a committed revolving credit facility.
Accounting policy
measured at amortised cost using the effective interest rate method. Borrowing costs directly attributable to the facility are
capitalised and amortised over the period of the loan.
The effective interest rate method is a method of calculating the amortised cost of a financial liability and allocating the interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on
initial recognition.
Borrowings are classified as non-current when the repayment date is more than 12 months from the period-end date or where
they are drawn on a facility with more than 12 months to expiry.
The Group derecognises borrowings when its contractual obligations are discharged, terminated or expired.
Fair value measurement
Borrowings are classified as Level 1 or Level 2 in the fair value hierarchy in accordance with IFRS 13,
Fair Value Measurements
,
The Group's borrowings as at 31 December were as follows:
2025 |
2024 |
|||
Year of |
Face value |
Face value |
||
Currenc y |
maturit y |
$m |
$m |
|
Revolving Credit Facility 1 |
USD/Euro |
2028 |
411 |
384 |
Term Loan |
USD |
2027 |
– |
250 |
Senior Notes |
USD |
2029 |
500 |
500 |
Senior Notes |
USD |
2035 |
500 |
– |
Interest-bearing borrowings |
1,411 |
1,134 |
||
Financing fees 2 |
(13) |
(11) |
||
Total carrying value of borrowings |
1,398 |
1,123 |
||
Current portion of borrowings |
– |
– |
||
Non-current portion of borrowings |
1,398 |
1,123 |
1.
Included within the Revolving Credit Facility was €106m ($125m) and £128m ($173m) at 31 December 2025, representing 30.2% of RCF debt denominated in Euros,
41.9% of RCF debt denominated in GBP and 27.9% denominated in US dollars. As at 31 December 2024, this was €106m ($110m) and £7m ($9m), representing
28.6% of RCF debt denominated in Euros, 2.3% of RCF debt denominated in GBP and 69.1% denominated in US dollars.
2.
Financing fees of $13m (2024: $11m) related to the remaining unamortised fees incurred on the credit facilities and on the senior notes.
In September 2025, the Group issued senior unsecured notes of $500m – diversifying its debt structure, lengthening its debt
maturity and reducing its refinancing risk. The Group continuously reviews its debt structure, seeking opportunities to optimise
profile and pricing. The notes have a tenor of 10 years and priced at a coupon of 5.3%, demonstrating the attractiveness of the
sector and confidence in Convatec’s credit profile. The proceeds were partially used to prepay existing bank debt (with $7m of
discount and issuance costs incurred and to be amortised over the life of the senior notes).
As at 31 December 2025, the Group had $411m, of unsecured bank debt maturing in 2028, senior unsecured notes of $500m maturing
in October 2029 and $500m maturing in 2035. This new debt profile will support the Group’s continued investment and growth.
As at 31 December 2025, $539m (2024: $566m) of the multicurrency revolving credit facility remained undrawn.
The Group ended the period with total borrowings, net of financing fees, of $1,398m (2024: $1,123m).
Financial covenants
The principal financial covenants are based on a permitted net debt to covenant-adjusted EBITDA
3
ratio and interest cover test
as defined in the credit facilities agreement. Testing is required on a semi-annual basis, at June and December, based on the last
12 months’ financial performance. At 31 December 2025, the permitted net debt to covenant-adjusted EBITDA
3
ratio was a
maximum of 3.5 times and the interest cover a minimum of 3.5 times, terms as defined by the credit facilities agreement.
In accordance with the credit facilities agreement, the net debt to covenant-adjusted EBITDA
3
ratio can increase to a maximum
4.0 times for permitted acquisitions or investments.
The Group was in compliance with all financial and non-financial covenants at 31 December 2025, with significant available
headroom on the financial covenants (in excess of $830m debt headroom (2024: $888m) on net debt to covenant-adjusted EBITDA
3
and $408m covenant-adjusted EBITDA
3
headroom (2024: $303m) on interest cover).
Excluding the impact of interest rate swaps, the weighted average interest rate on borrowings for the year ended 31 December 2025
was 5.2% (2024: 6.0%).
3.
Covenant-adjusted EBITDA is calculated based on terms as defined in the credit facilities agreement. This is different to adjusted EBITDA, which is an alternative
performance measure (“APM”) as disclosed on pages 28 to 31.
Strategic report
Governance
Financial statements
Additional information
19. Borrowings
continued
Convatec Annual Report and Accounts 2025
167
Senior notes
The senior unsecured notes maturing in 2029 are subject to an interest cover financial covenant as defined in the indentures which
is a minimum of 2.0 times, with testing required annually at 31 December on the last 12 calendar months’ financial performance.
There are no financial covenants attached to the senior notes maturing in 2035.
Borrowings measured at fair value
The senior notes are listed and their fair value at 31 December 2025 of $986m (2024: $457m) has been obtained from quoted
market data and therefore categorised as a Level 1 measurement in the fair value hierarchy under IFRS 13,
Fair Value Measurements
.
For the Group’s other borrowings, the fair value is based on discounted cash flows using a current borrowing rate and is categorised
as a Level 2 measurement. At 31 December 2025, the estimated fair value of the Group's other borrowings was $375m (2024: $679m).
Maturity of financial liabilities
The contractual undiscounted future cash flows, including contractual interest payments, related to the Group's financial liabilities
were as follows:
Contractual cash flows | ||||||||
Within 1 year or | 1 to 2 | 2 to 3 | 3 to 4 | 4 to 5 More than | Carrying | |||
on demand | years | years | years | years | 5 years | Total | amount | |
$m | $m | $m | $m | $m | $m | $m | $m | |
At 31 December 2024 | ||||||||
Borrowings | 59 | 50 | 48 | 298 | 533 | 518 | 1,506 | 1,123 |
Lease liabilities (Note 22) | 26 | 20 | 15 | 10 | 8 | 18 | 97 | 79 |
Trade and other payables 1 (Note 12) | 350 | – | – | – | – | – | 350 | 350 |
Derivative financial instruments (Note 21) | ||||||||
Derivative financial instruments payable | 1,487 | 7 | – | – | – | – | 1,494 | 18 |
Derivative financial instruments receivable | 1,483 | 5 | – | – | – | – | 1,488 | 18 |
At 31 December 2025 | ||||||||
Borrowings | 66 | 65 | 415 | 546 | 659 | – | 1,751 | 1,398 |
Lease liabilities (Note 22) | 31 | 26 | 20 | 16 | 12 | 38 | 143 | 120 |
Trade and other payables 1 (Note 12) | 450 | – | – | – | – | – | 450 | 450 |
Derivative financial instruments (Note 21) | ||||||||
Derivative financial instruments payable | 1,775 | – | – | – | – | – | 1,775 | 7 |
Derivative financial instruments receivable | 1,774 | – | – | – | – | – | 1,774 | 10 |
1.
Trade and other payables excludes taxes and social security of $43m (2024: $32m) as per Note 12 – Trade and other payables, as these are statutory rather than
contractual requirements and therefore are not classified as financial liabilities in the above table.
Reconciliation of movement in borrowings
2025 |
2024 |
|
$m |
$m |
|
Borrowings at 1 January |
1,123 |
1,227 |
Repayment of borrowings |
(250) |
(98) |
Proceeds of new borrowings, net of financing fees |
504 |
– |
Foreign exchange |
18 |
(9) |
Non-cash movements 2 |
3 |
3 |
Borrowings at 31 December |
1,398 |
1,123 |
2.
Convatec Annual Report and Accounts 2025
168
Notes to the consolidated financial statements
continued
Financial statements
Cash held at bank is used for the Group's day-to-day operations. The Group utilises bank deposits or money market funds
which have a maturity of three months or less as liquid investments that enable short-term liquidity requirements to be met.
including term deposits and money market funds, have original maturities of three months or less, are subject to insignificant
risk of changes in value and are repayable within one business day with no significant loss of interest, resulting in classification
as cash equivalents.
Cash at bank earns interest based on daily bank deposit rates. Term deposits and money market funds earn interest at the
respective short-term deposit rate.
Cash and cash equivalents at 31 December 2025 included $21m (2024: $19m) of cash held in territories where there are
restrictions related to timely repatriation. The amounts meet the definition of cash and cash equivalents but are not deemed
to be readily available for general use by the wider Group.
Under certain circumstances, the Group utilises bank overdrafts to manage temporary fluctuations in cash positions. The bank
overdrafts are repayable on demand, used as part of the Group’s overall cash management strategy and form part of cash
and cash equivalents for the purpose of the Consolidated Statement of Cash Flows. The Group had no bank overdrafts as at
31 December 2025 or 31 December 2024.
The Group reports cash flows from operating activities using the indirect method in accordance with IAS 7, Statement of Cash Flows.
The Group has elected to classify net interest paid (including interest on lease liabilities) as cash flows from operating activities.
Short-term lease payments and payments for leases of low-value assets are included in cash flows from operating activities.
Changes in working capital assets and liabilities as reported in cash flows from operating activities reflect the changes in the
Consolidated Statement of Financial Position between the current and previous financial year end, including adjustments for
amounts relating to acquisitions and disposals (when necessary), as well as currency translation adjustments.
Cash payments for the principal portion of lease liabilities are included within cash flows from financing activities.
Acquisition of property, plant and equipment, and intangible assets reflects additions to the related assets, including adjustments
for changes in capital accruals. Acquisition of intangible assets relates to capitalised software, development and product-related
licences. Refer to Note 8 – Intangible assets and goodwill for further details.
The adjustment for non-operating expense, net in the Consolidated Statement of Cash Flows excludes the gains and losses
In certain instances, there are requirements to set aside cash to support payment guarantees and obligations, including the
payment of value-added taxes, custom duties on imports, tender programmes and lease arrangements. Such amounts are
classified by the Group as restricted cash, which do not form part of cash and cash equivalents. Cash paid into escrow, arising
2025 |
2024 |
|
$m |
$m |
|
Cash at bank and in hand |
61 |
57 |
Money market funds |
7 |
8 |
Cash and cash equivalents |
68 |
65 |
2025 |
2024 |
|
$m |
$m |
|
Restricted cash – current |
7 |
9 |
Restricted cash – non-current |
4 |
3 |
Total restricted cash |
11 |
12 |
Current restricted cash of $7m (2024: $9m) relates to cash held in escrow in respect of the Group’s acquisitions.
Non-current restricted cash of $4m (2024: $3m) relates primarily to amounts held in respect of guarantees and the Group’s Share
Strategic report
Governance
Financial statements
Additional information
Convatec Annual Report and Accounts 2025
169
A derivative financial instrument is a contract that derives its value from the performance of an underlying variable, such as
foreign exchange rates or interest rates. The Group uses derivative financial instruments to manage foreign exchange and
interest rate risk arising from its operations and financing. Derivative financial instruments used by the Group are foreign
exchange forwards and interest rate swaps.
The Group utilises interest rate swap agreements, designated as cash flow hedges, to manage its exposure to variability in
expected future cash outflows attributable to the changes in interest rates on the Group’s committed borrowing facilities.
fair value at subsequent reporting dates. Derivative financial instruments are classified at fair value through profit or loss (FVTPL)
unless they are designated and qualify as an effective cash flow hedge. The fair value of forward foreign exchange contracts is
determined by using the difference between the contract exchange rate and the quoted forward exchange rate from third parties
The Group has elected to apply the IFRS 9,
Financial Instruments
hedge accounting requirements. Changes in the fair values of
derivatives designated as cash flow hedges are recognised in other comprehensive income to the extent the hedges are effective.
The fair value is the estimated amount that the Group would receive or pay to terminate the forward or swap at the reporting
date, taking into account current market rates, the Group’s current creditworthiness, as well as that of the financial
instrument counterparties.
The cumulative gain or loss is then reclassified to the Consolidated Income Statement in the same period when the relevant
hedged transaction is realised. Any ineffectiveness on hedging instruments is recognised in the Consolidated Income Statement
as they arise. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no
longer qualifies for hedge accounting. The discontinuation is accounted for prospectively. Any gain or loss recognised in other
comprehensive income and accumulated in the cash flow hedge reserve at that time remains in equity and is reclassified to profit
or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss
accumulated in the cash flow hedge reserve is immediately reclassified to profit or loss.
The Group held interest rate swaps of $75m at 31 December 2025 (2024: $265m), with exposure to SOFR as a reference rate
and maturing at various points in the next two years. These have been designated as cash flow hedges through other
Financial assets and liabilities are offset and the net amount presented in the Consolidated Statement of Financial Position when
the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle
Financial instruments are classified as Level 1, Level 2 or Level 3 in the fair value hierarchy in accordance with IFRS 13,
Fair Value
Measurements
, based upon the degree to which the fair value movements are observable. Level 1 fair value measures are defined
as those with quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 2 fair value
measurements are defined as those derived from inputs other than quoted prices that are observable for the asset or liability,
either directly (prices from third parties) or indirectly (derived from third-party prices). Level 3 fair value measurements are
defined as those derived from significant unobservable inputs.
The only instrument classified as Level 1 are the senior notes, given the availability of quoted market price (Note 19 – Borrowings).
The Group’s derivative financial instruments, discussed below, are classified as Level 2. The Group’s equity investment in
preference shares (Note 9 – Investment in financial assets) and contingent consideration arising on business combinations
The Group holds interest rate swap agreements to fix a proportion of variable interest on the Group’s US dollar debt, in accordance with
the Group's risk management policy. The interest rate swaps are designated as hedging instruments in a cash flow hedging relationship.
In accordance with Group policy, the Group uses forward foreign exchange contracts, designated as cash flow hedges, to hedge
certain forecast third-party foreign currency transactions. When a commitment is entered into a layered approach is taken when
hedging the currency exposure, ensuring that no more than 100% of the transaction exposure is covered. The currencies hedged
by forward foreign exchange contracts are US dollars, Swiss francs, Pound sterling, Danish krone and Japanese yen.
The Group further utilises foreign exchange contracts and swaps classified as FVTPL to manage short-term foreign exchange exposure.
Convatec Annual Report and Accounts 2025
170
21. Financial instruments
continued
Notes to the consolidated financial statements
continued
Financial statements
Cash flow hedges
The fair values are based on market values of equivalent instruments at 31 December. The following table presents the Group's
outstanding interest rate swaps, which were designated as cash flow hedges at 31 December:
2025 | 2024 | ||||||
Fair value 1 | Fair value 1 | ||||||
Notional | assets/ | Notional | assets/ | ||||
amount | (liabilities) | amount | (liabilities) | ||||
Currenc y | Effective date | Maturity date | $m | $m | $m | $m | |
6 Month term SOFR Float to Fixed | |||||||
Interest Rate Swap | USD | 23 Jan 2023 | 23 Jan 2025 | – | – | 50 | – |
6 Month term SOFR Float to Fixed | |||||||
Interest Rate Swap | USD | 3 Aug 2023 | 3 Feb 2025 | – | – | 50 | – |
6 Month term SOFR Float to Fixed | |||||||
Interest Rate Swap | USD | 3 Aug 2023 | 4 Aug 2025 | – | – | 50 | – |
6 Month term SOFR Float to Fixed | |||||||
Interest Rate Swap | USD | 29 Sep 2023 | 29 Sep 2025 | – | – | 40 | – |
6 Month term SOFR Float to Fixed | |||||||
Interest Rate Swap | USD | 23 Jan 2024 | 23 Jan 2026 | 25 | – | 25 | – |
6 Month term SOFR Float to Fixed | |||||||
Interest Rate Swap | USD | 23 Jan 2024 | 23 Jan 2026 | 25 | – | 25 | – |
6 Month term SOFR Float to Fixed | |||||||
Interest Rate Swap | USD | 28 May 2024 | 28 May 2026 | 25 | – | 25 | – |
1.
The fair values of the interest rate swaps were disclosed in current derivative financial liabilities in the Consolidated Statement of Financial Position. There was
no ineffectiveness recognised in the Consolidated Income Statement.
Foreign exchange forward contracts
The following table presents the Group's outstanding foreign exchange forward contracts valued at FVTPL and foreign currency
forward contracts designated as cash flow hedges, disclosed in current derivative financial assets and liabilities, at 31 December:
2025 | 2024 | ||||
Fair value | Fair value | ||||
Notional | assets/ | Notional | assets/ | ||
amount | (liabilities) | amount | (liabilities) | ||
Term | $m | $m | $m | $m | |
Foreign exchange contracts | ≤ 3 months | 944 | 7 | 784 | 17 |
Foreign currency forward exchange contracts designated as | |||||
cash flow hedges | ≤ 12 months | 114 | 3 | 36 | 1 |
Derivative financial assets | 1,058 | 10 | 820 | 18 | |
Foreign exchange contracts | ≤ 3 months | 581 | (5) | 515 | (9) |
Foreign currency forward exchange contracts designated as | |||||
cash flow hedges | ≤ 12 months | 137 | (2) | 194 | (9) |
Derivative financial liabilities | 718 | (7) | 709 | (18) | |
During the year ended 31 December 2025, the Group realised a net loss of $41m (2024: $26m gain) on foreign exchange forward
contracts designated as FVTPL in Note 4 – Non-operating (expense)/income, net in the Consolidated Income Statement.
Impact of hedging on other comprehensive income
The following table presents the impact of hedging on other comprehensive income:
2025 | 2024 | |
$m | $m | |
Recognised in other comprehensive income: | ||
Effective portion of changes in fair value of cash flow hedges: | ||
Interest rate hedging | (1) | 1 |
Foreign currency forward exchange contracts designated as cash flow hedges | 16 | (12) |
Changes in fair value of cash flow hedges reclassified to the Consolidated Income Statement | (10) | 2 |
Cost of hedging | (1) | 1 |
Total | 4 | (8) |
Offsetting financial assets and liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet where there is a legally enforceable right to
offset the recognised amounts, and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
Amounts which do not meet all of the criteria for offsetting on the balance sheet but could be settled net in certain circumstances
primarily relate to derivative transactions entered under International Swaps and Derivatives Association (ISDA) master netting
arrangements or other similar agreements. In general, under such agreements, each party has the option to settle on a net basis
in the event of default of the other party. As there is presently not a legally enforceable right of offset, these amounts have not been
offset in the balance sheet and have been presented separately in the table below.
Strategic report
Governance
Financial statements
Additional information
21. Financial instruments
continued
Convatec Annual Report and Accounts 2025
171
The financial assets and financial liabilities presented below are subject to offsetting, enforceable master netting or similar
agreements. The column 'Net amount' shows the impact on the Group's balance sheet if all set-off rights were exercised.
Financial liabilities offset against trade and other receivables mainly relate to accrued customer rebates/discounts and chargebacks,
as the offsetting criteria for these are met under IAS 32.
Gross financial |
Net financial |
Related amounts |
|||
Gross financial |
(liabilities)/assets |
assets/(liabilities) |
not set off in the |
||
assets/(liabilities) |
set off |
per balance sheet |
balance sheet |
Net amount |
|
$m |
$m |
$m |
$m |
$m |
|
As at 31 December 2024 |
|||||
Financial assets |
|||||
Trade and other receivables |
363 |
(28) |
335 |
– |
335 |
Derivative financial assets |
18 |
– |
18 |
(10) |
8 |
Financial liabilities |
|||||
Trade and other payables 1 |
(378) |
28 |
(350) |
– |
(350) |
Derivative financial liabilities |
(18) |
– |
(18) |
10 |
(8) |
Gross financial |
Net financial |
Related amounts |
|||
Gross financial |
(liabilities)/assets |
assets/(liabilities) |
not set off in the |
||
assets/(liabilities) |
set off |
per balance sheet |
balance sheet |
Net amount |
|
$m |
$m |
$m |
$m |
$m |
|
As at 31 December 2025 |
|||||
Financial assets |
|||||
Trade and other receivables |
454 |
(35) |
419 |
– |
419 |
Derivative financial assets |
10 |
– |
10 |
(6) |
4 |
Financial liabilities |
|||||
Trade and other payables 1 |
(485) |
35 |
(450) |
– |
(450) |
Derivative financial liabilities |
(7) |
– |
(7) |
6 |
(1) |
1.
Trade and other payables excludes taxes and social security of $43m (2024: $32m) as per Note 13 – Trade and other payables, as these are statutory rather than
The Group principally leases real estate and vehicles. Leases are recognised as a right-of-use asset with a corresponding liability
recorded at the date at which the leased asset is available for use by the Group.
If this rate is not readily determinable, the Group uses its incremental borrowing rate. Generally, the Group uses its incremental
borrowing rate as the discount rate.
Options such as lease extensions or terminations on lease contracts are considered on a case-by-case basis by regular
management assessment.
Each lease payment is allocated between amounts paid for principal and interest. The interest cost is charged to the Consolidated
Income Statement over the lease term to produce a constant periodic rate of interest on the remaining balance of the liability for
each period. The right-of-use asset is depreciated on a straight-line basis over the lease term.
Payments associated with short-term leases and low-value leases are recognised on a straight-line basis as an expense in the
Consolidated Income Statement. Short-term leases are leases with a lease term of 12 months or less and low-value leases
comprise of leases with an underlying asset value of less than $5,000. Expenses recognised for these short-term and low-value
Convatec Annual Report and Accounts 2025
172
22. Leases
continued
Notes to the consolidated financial statements
continued
Financial statements
The movements in right-of-use assets were as follows:
Real estate |
|||
and other |
Vehicles |
Total |
|
$m |
$m |
$m |
|
As at 1 January 2024 |
58 |
16 |
74 |
Lease additions |
10 |
12 |
22 |
Arising from acquisitions |
– |
1 |
1 |
Leases terminated |
– |
(1) |
(1) |
Depreciation of right-o f -use assets |
(15) |
(8) |
(23) |
Sublease of right-o f -use assets |
(2) |
– |
(2) |
Foreign exchange |
(2) |
(1) |
(3) |
As at 31 December 2024 |
49 |
19 |
68 |
Lease additions |
52 |
11 |
63 |
Leases terminated |
– |
(1) |
(1) |
Depreciation of right-o f -use assets |
(16) |
(10) |
(26) |
Net cash inflow from lease incentives |
(13) |
– |
(13) |
Foreign exchange |
3 |
2 |
5 |
As at 31 December 2025 |
75 |
21 |
96 |
Movements in lease liabilities were as follows:
2025 |
2024 |
|
$m |
$m |
|
Lease liabilities as at 1 January |
79 |
86 |
Lease additions |
63 |
22 |
Arising from acquisitions |
– |
1 |
Payment of lease liabilities |
(27) |
(25) |
Leases terminated |
(1) |
(2) |
Interest expense on lease liabilities (Note 23) |
5 |
4 |
Interest paid on lease liabilities |
(5) |
(4) |
Foreign exchange |
6 |
(3) |
Lease liabilities as at 31 December |
120 |
79 |
The total cash outflow of lease liabilities including interest for the year ended 31 December 2025 was $32m (2024: $29m). Interest
paid during the year was $5m (2024: $4m).
Lease liabilities by category at 31 December were as follows:
| 2025 |
2024 |
|||||
Real estate |
Real estate |
|||||
and other |
Vehicles |
Total |
and other |
Vehicles |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Current |
16 |
10 |
26 |
15 |
7 |
22 |
Non-current |
82 |
12 |
94 |
45 |
12 |
57 |
Total |
98 |
22 |
120 |
60 |
19 |
79 |
The maturity of lease liabilities at 31 December was as follows:
| 2025 |
2024 |
|||||
Real estate |
Real estate |
|||||
and other |
Vehicles |
Total |
and other |
Vehicles |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Within 1 year |
16 |
10 |
26 |
15 |
7 |
22 |
1 to 2 years |
15 |
7 |
22 |
11 |
6 |
17 |
2 to 3 years |
14 |
4 |
18 |
8 |
4 |
12 |
3 to 4 years |
12 |
1 |
13 |
8 |
2 |
10 |
4 to 5 years |
9 |
– |
9 |
7 |
– |
7 |
More than 5 years |
32 |
– |
32 |
11 |
– |
11 |
Total |
98 |
22 |
120 |
60 |
19 |
79 |
Strategic report
Governance
Financial statements
Additional information
Convatec Annual Report and Accounts 2025
173
Finance expenses arise from interest on the Group’s borrowings and lease liabilities. Finance income arises from interest earned
on investment of surplus cash.
Consolidated Income Statement using the effective interest rate method.
When existing debt is derecognised in the financial statements any transaction costs not amortised are recognised immediately
in the Consolidated Income Statement.
Upon derecognition of financial liabilities, any unamortised financing fees are recognised immediately in the Consolidated
Income Statement.
Interest related to qualifying assets under construction included within PP&E is capitalised (refer to Note 7 – Property, plant
and equipment).
Refer to Note 22 – Leases for accounting policy on interest expense on lease liabilities.
Interest arising from interest rate swaps is recorded as either interest income or expense over the term of the agreement.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies
for hedge accounting. The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive
income and accumulated in the cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when
the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the
Finance costs, net for the year ended 31 December were as follows:
2025 |
2024 |
|
$m |
$m |
|
Finance income |
||
Interest income on cash and cash equivalents |
3 |
5 |
Total finance income |
3 |
5 |
Finance expense |
||
Interest expense on borrowings |
(66) |
(76) |
Other financing-related fees 1 |
(9) |
(9) |
Interest expense on interest rate derivatives |
(1) |
– |
Interest expense on lease liabilities |
(5) |
(4) |
Capitalised interest 2 |
10 |
6 |
Total finance expense |
(71) |
(83) |
Finance costs, net |
(68) |
(78) |
1.
Other financing-related fees include the amortisation of deferred financing fees associated with the multicurrency revolving credit facilities, term loan facilities and senior notes.
2.
During the year to 31 December 2025, the Group finalised the working capital adjustment in respect of the acquisition of Livramedom.
The contingent consideration liabilities recognised by the Group are in respect of acquisitions and include amounts contingent on
future events such as development milestones and sales performance.
transferred in respect of an acquisition is measured at the fair value of the assets acquired, equity instruments issued and
liabilities incurred or assumed on the date of the acquisition. Identified assets acquired and liabilities assumed are measured
at their respective acquisition-date fair values.
The excess of the fair value of the consideration given over the fair value of the identifiable net assets acquired is recorded
as goodwill. If the fair value of the identifiable net assets acquired is greater than the fair value of the consideration given,
the excess is recognised immediately in the Consolidated Income Statement as a bargain purchase gain. Acquisition-related
costs are expensed as incurred.
The operating results of the acquired business are reflected in the Group’s Consolidated Financial Statements from the date
of acquisition.
Convatec Annual Report and Accounts 2025
174
24. Acquisitions
continued
Accounting policy
continued
Notes to the consolidated financial statements
continued
Financial statements
Contingent consideration arising from a business combination is recognised at fair value on acquisition. Contingent
consideration classified as a liability is a financial instrument and within the scope of IFRS 9 – Financial Instruments and is
subsequently measured at fair value, with the changes in fair value recognised in the Consolidated Income Statement, in
accordance with IFRS 9. This is classified within Level 3 of the fair value hierarchy (Note 23 – Financial Instruments).
The classification of cash payments associated with contingent consideration within the Consolidated Statement of Cash Flows is
dependent on the nature of the arrangement. The settlement of the amount initially recognised upon acquisition is reflected in
cash flows from investing activities, with the element of the payment relating to any subsequent remeasurement included within
Livramedom
In April 2025 (within the measurement period), the Group finalised the working capital and gross indebtedness adjustments relating
to the 2024 acquisition of Livramedom. The final adjustment was $1m, resulting in the total consideration increasing to $14m, with a
$1m increase to Goodwill. The $1m has been received from the sellers and has been shown within cash flows from investing
activities in the Condensed Consolidated Statement of Cash Flows.
Contingent consideration
As at 31 December 2025, the discounted fair value of the contingent consideration payable in respect of the Group’s acquisitions
was $59m. During the year, earn-out payments totalling $27m were made in respect past acquisitions ($25m recognised within
cash flows from investing activities and $2m recognised within cash flows from operating activities in the Consolidated Statement
of Cash Flows). The net charge to the income statement in respect of changes in the fair value of contingent consideration (based
on the best estimates of the amounts payable as at 31 December 2025) was $10m. In addition, there was a foreign exchange
movement of $6m from the re-translation of non-USD denominated balances.
The movement in contingent consideration to 31 December was as follows:
2025 |
2024 |
|
$m |
$m |
|
1 January |
70 |
138 |
Fair value movement of contingent consideration |
10 |
5 |
Payments made |
(27) |
(71) |
Foreign exchange |
6 |
(2) |
31 December |
59 |
70 |
Current |
32 |
53 |
Non-current |
27 |
17 |
The expected payment profile of the contingent consideration at 31 December was as follows:
2025 |
2024 |
|
$m |
$m |
|
Within 1 year |
32 |
53 |
2 to 5 years |
1 |
– |
More than 5 years |
26 |
17 |
Total |
59 |
70 |
Fair value of contingent consideration at reporting date
Contingent consideration arising on business combinations is classified as a recurring fair value measurement within Level 3 of the
fair value hierarchy, in line with IFRS 13 Fair Value Measurements. Key unobservable inputs in respect of the Group’s acquisitions
include actual results, management forecasts and an appropriate discount rate.
Management has determined that the potential range of undiscounted outcomes at 31 December 2025 is between $36m and
$150m (2024: $59m and $164m), from a maximum undiscounted amount of $150m (2024: $164m). The change in the potential
range of undiscounted outcomes as at 31 December 2025 was due to milestone payments made in the year and changes in foreign
exchange rates.
The table below shows an indicative basis of the sensitivity to the income statement and balance sheet at 31 December 2025.
| Sales forecast |
Discount rate |
|||||||
5% |
10% |
-5% |
-10% |
1% |
2% |
-1% |
-2% |
|
Increase/(decrease) in financial liability and loss/(gain) |
||||||||
in income statement |
1 |
2 |
(1) |
(2) |
(2) |
(5) |
3 |
6 |
Strategic report
Governance
Financial statements
Additional information
Convatec Annual Report and Accounts 2025
175
Commitments represent the Group’s future capital expenditure which is not recognised as a liability in the Consolidated Financial
Statements but represents a non-cancellable commitment.
A contingent liability is a possible liability that is not sufficiently certain to qualify for recognition as a provision because the
amount cannot be measured reliably or because settlement is not considered probable.
At 31 December 2025, the Group had non-cancellable commitments for the purchase of property, plant and equipment, capitalised
The Company and its subsidiaries are party to various legal claims and disputes which arise in the normal course of business.
Provisions are recognised for outcomes that are deemed probable and can be reliably estimated. Management believe that any
The Directors have not identified any related parties to the Group, other than the key management personnel. The Group considers
key management personnel as defined in IAS 24,
Related Party Disclosures
to be the members of CELT as set out on pages 82 to 83
and the Non-Executive Directors as set out on pages 80 to 81.
Key management personnel compensation for the year ended 31 December was as follows:
2025 |
2024 |
|
$m |
$m |
|
Short-term employee benefits |
18 |
19 |
Share-based payment expense |
16 |
9 |
Post-employment benefits |
1 |
1 |
Total |
35 |
29 |
Further details of short-term employee benefits, share-based payment expense and post-employment benefits for the two Executive
Directors are shown on page 111. Details of the Non-Executive Directors' fees, included in the table above, are provided on page 114.
The Group has not been a party to any other material transaction, or proposed transactions, in which any member of the key
The Group has evaluated subsequent events through to 23 February 2026, the date the Consolidated Financial Statements were
approved by the Board of Directors.
On 23 February 2026, the Board proposed the final dividend in respect of 2025 subject to shareholder approval at the Annual
General Meeting on 21 May 2026, to be distributed on 28 May 2026. See Note 16 – Dividends to the Consolidated Financial
Company Statement of Financial Position
As at 31 December 2025
2025
2024
Notes
$m
$m
Assets
Non-current assets
Investment in subsidiaries
3
5,946
5,530
Deferred tax assets
4
2
2
5,948
5,532
Current assets
Other receivables
5
46
31
Total assets
5,994
5,563
Equity and liabilities
Current liabilities
Trade and other payables
6
29
59
Total liabilities
29
59
Net assets
5,965
5,504
Equity
Share capital
7
251
251
Share premium
7
181
181
Own shares
7
(303)
(16)
Retained surplus
3,425
3,089
Merger reserve
1,766
1,766
Cumulative translation reserve
534
112
Other reserves
111
121
Total equity
5,965
5,504
Total equity and liabilities
5,994
5,563
The Company reported a net profit for the year ended 31 December 2025 of $476m (2024: $1,679m).
The Financial Statements of Convatec Group Plc (registered number 10361298) were approved by the Board of Directors and
authorised for issue on 23 February 2026. They were signed on its behalf by:
J
onn
y
Mason
Fiona R
y
der
Chief Executive Officer
Chief Financial Officer
176
Convatec Annual Report and Accounts 2025
Financial statements
Company financial statements
Company Statement of Changes in Equity
For the year ended 31 December 2025
Share capital
Share
premium
Own shares
Retained
surplus
Merger
reserve
Cumulative
translation
reserve
Other
reserves
Total equity
$m
$m
$m
$m
$m
$m
$m
$m
At 1 January 2024
251
181
–
1,540
1,766
206
108
4,052
Net profit
–
–
–
1,679
–
–
–
1,679
Foreign currency translation
adjustment
–
–
–
–
–
(94)
–
(94)
Total comprehensive
income
–
–
–
1,679
–
(94)
–
1,585
Dividends paid
–
–
–
(130)
–
–
–
(130)
Share-based payments
–
–
–
–
–
–
20
20
Share awards vested
–
–
7
–
–
–
(6)
1
Excess deferred tax benefit
from share-based payments
–
–
–
–
–
–
(1)
(1)
Purchase of shares by
Employee Benefit Trust
–
–
(23)
–
–
–
–
(23)
At 31 December 2024
251
181
(16)
3,089
1,766
112
121
5,504
Net profit
–
–
–
476
–
–
–
476
Foreign currency translation
adjustment
–
–
–
–
–
422
–
422
Total comprehensive
income
–
–
–
476
–
422
–
898
Dividends paid
–
–
–
(140)
–
–
–
(140)
Share-based payments
–
–
–
–
–
–
28
28
Share awards vested
–
–
39
–
–
–
(38)
1
Purchase of shares by
Employee Benefit Trust
–
–
(25)
–
–
–
–
(25)
Purchase of treasury shares
–
–
(301)
–
–
–
–
(301)
At 31 December 2025
251
181
(303)
3,425
1,766
534
111
5,965
For further information on share-based payments, refer to Note 17 – Share-based payments, and for dividends refer to Note 16 –
Dividends to the Consolidated Financial Statements.
177
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
1. Basis of preparation
This section describes the Company’s material accounting policies in respect of the Company Financial Statements and explains
the management has not identified any critical accounting judgements and estimates having a potentially material impact to the
Company. Specific accounting policies relating to the Notes to the Company Financial Statements are described within that note.
1.1 General information
The separate Financial Statements of the Company are presented as required by the Companies Act 2006. The Company meets the
definition of a qualifying entity under Financial Reporting Standard 100 (FRS 100) issued by the Financial Reporting Council (FRC).
Accordingly, the Financial Statements have been prepared in accordance with Financial Reporting Standard 101 (FRS 101) Reduced
Disclosure Framework as issued by the FRC.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in respect
of share-based payments, financial instruments, capital management, comparative information, presentation of a cash flow
statement, new but not yet effective IFRSs and certain related party transactions.
As permitted by s408 of the Companies Act 2006 the Company has elected not to present its own Income Statement for the current
or prior year. The profit attributable to the Company is disclosed in the footnote to the Company’s Statement of Financial Position.
Where required, equivalent disclosures are given in the Consolidated Financial Statements.
The auditor’s remuneration for audit and other services is disclosed in Note 3.3 – Auditor’s remuneration to the Consolidated
Financial Statements.
All values have been rounded to the nearest million (previously $0.1m) except where otherwise indicated. Comparatives have been
adjusted accordingly.
1.2 Material accounting policies
Basis of accounting
The Financial Statements have been prepared on the historical cost basis. The material accounting policies adopted are the same as
those set out in the Consolidated Financial Statements except as noted below.
Foreign currencies
The functional currency of the Company is Sterling, being the currency of the primary economic environment in which it operates.
The Company has adopted US dollars as the presentation currency for its Financial Statements, in line with the presentation
currency for the Consolidated Financial Statements. For the purpose of presenting individual Company Financial Statements,
assets and liabilities of the Company are translated into US dollars at exchange rates prevailing on the balance sheet date. Equity
is translated into US dollars at the historic rate. Income and expense items are translated at the average exchange rates for the
period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions
are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a separate
component of equity, the cumulative translation reserve, in accordance with IAS 21,
The Effects of Changes in Foreign Exchange Rates
.
Share-based payments
The Company has implemented the generally accepted accounting principle for accounting for share-based payments with
subsidiary undertakings under FRS 101, whereby the Company has granted rights to issue its shares to employees of its subsidiary
undertakings under an equity-settled arrangement and the subsidiaries have not reimbursed the Company for these rights. Under
this arrangement, the Company treats the share-based payment recognised in the subsidiary's financial statements as an increase
in the cost of investment in the subsidiary and credits equity with an equal amount.
Investments
Investments in Group undertakings are stated at cost less any provision for impairment. The Company assesses investments for
impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.
If any such indication of impairment exists, the Company makes an estimate of the recoverable amount. If the recoverable amount
of the investment is less than the carrying amount of the investment, the investment is considered to be impaired and is written
down to its recoverable amount.
Any impairment charge is initially taken to retained earnings and subsequently offset against any merger reserve by way of a
reserves transfer.
At the end of each reporting period, the Company assesses whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such an indication exists, the Company should estimate the recoverable
amount to determine if all or part of the previously recognised impairment loss should be reversed.
1.3 Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Company Financial Statements in accordance with FRS 101 requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported value of assets and liabilities, income
and expense. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis.
There were no critical accounting judgements that would have a significant effect on the amounts recognised in the Company
Financial Statements or key sources of estimation uncertainty at the balance sheet date that would have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
178
Convatec Annual Report and Accounts 2025
Financial statements
Notes to the company financial statements
2. Staff costs
The Executive Directors of Convatec Group Plc are the only employees of the Company. The remuneration of the Executive
Directors is set out on pages 104 to 121 within the Remuneration Committee report.
Their aggregate remuneration comprised:
2025
2024
$m
$m
Wages and salaries
3.5
4.2
Share-based payment expense
7.0
5.2
Social security costs
1.4
1.1
Pension-related costs
0.2
0.1
Total
12.1
10.6
Average monthly number of employees (including Executive Directors) was 2 (2024: 2).
3. Investments in subsidiaries
Investments in subsidiaries represent the cost of the Company’s investment in its subsidiary undertakings, net of any impairment
charges. Refer to pages 182 to 184 for details of all the Company’s direct and indirect holdings.
Convatec Group Plc operates Group-wide share plan arrangements, under which it grants equity instruments to the employees
of its subsidiaries. These awards are primarily accounted for as equity-settled share-based payments. For certain jurisdictions,
the share-based payment awards are cash-settled.
The fair value of awards granted to the employees of the subsidiaries, is recognised as an increase in the investment in those
subsidiaries, with a corresponding entry to equity. Where recharge arrangements exist, the amounts received is recognised as
a reduction in the carrying amount of the investment in the subsidiary.
The subsidiaries recognise a share-based payment expense in their income statements, with a corresponding entry to equity,
reflecting the capital contribution received from the Company.
Cost
Impairment
Net book
value
$m
$m
$m
At 1 January 2024
5,633
(1,613)
4,020
Capital contributions in respect of share-based payments to employees of subsidiaries
15
–
15
Reduction due to reimbursement upon exercised awards
(23)
–
(23)
Reversal of impairment loss
–
1,614
1,614
Foreign exchange
(95)
(1)
(96)
At 31 December 2024
5,530
–
5,530
Capital contributions in respect of share-based payments to employees of subsidiaries
21
–
21
Reduction due to reimbursement upon exercised awards
(28)
–
(28)
Foreign exchange
423
–
423
At 31 December 2025
5,946
–
5,946
The Company performed an impairment assessment on the investments in subsidiaries as at 31 December 2025, with no impairment
identified. The share price of Convatec Group Plc at 31 December 2025 was £2.43 (2024: £2.21), resulting in a market valuation of
£4,985m/$6,717m (2024: £4,534m/$5,675m).
The following UK subsidiaries are exempt from the requirement to file audited accounts by virtue of Section 479A of the Companies
Act 2006:
Company
registration
number
Amcare Limited
03191025
Convatec Finance Holdings Limited
12141776
Convatec Group Holdings Limited
12698069
Convatec Holdings UK Limited
06622360
Convatec International U.K. Limited
06622355
Convatec Limited
01309639
Convatec NAP Limited
14769594
Project Dragon SPV Limited
15457808
Starlight Science Limited
14419310
Unomedical Limited
00976940
179
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
4. Deferred tax assets
Deferred tax assets mainly arise in relation to timing differences on the exercise of share-based awards.
$m
At 1 January 2024
3
Movement in amounts recognised directly in equity
(1)
At 31 December 2024
2
At 31 December 2025
2
The deferred tax asset consists of deferred tax on the following items:
2025
2024
$m
$m
Share-based payments
2
2
At 31 December
2
2
Deferred tax assets are only recognised where it is probable that future profit will be available to utilise the tax losses.
5. Other receivables
Other receivables consist of amounts due from Group undertakings, other receivables and prepaid insurance.
2025
2024
$m
$m
Amounts falling due within one year:
Amounts owed by Group undertakings
42
31
Other receivables
3
–
Prepayments
1
–
46
31
All amounts owed by Group undertakings are unsecured and are expected to be realised within 12 months of the reporting date.
6. Trade and other payables
Trade payables consist of amounts payable to third parties related predominantly to the Company’s corporate responsibilities.
Other payables represent amounts owed to Group undertakings, accruals and other taxation and social security.
2025
2024
$m
$m
Amounts falling due within one year:
Trade payables
1
–
Amounts owed to Group undertakings
20
55
Other taxation and social security
5
1
Accruals
3
3
29
59
Included in the amounts owed to Group undertakings were intercompany loans of $19m (2024: $54m) with a variable interest rate
set at a margin 200 bps above SONIA. All amounts owed to Group undertakings are unsecured and are repayable on demand.
180
Convatec Annual Report and Accounts 2025
Financial statements
Notes to the company financial statements
continued
7. Reserves
All reserve balances included in this note are components of Equity and are non-distributable.
Share capital, share premium and own shares
Details of the Company's share capital, share premium and own shares are detailed in Note 15 – Share capital and reserves to the
Consolidated Financial Statements.
Merger reserve
The merger reserve represents the fair value in excess of the par value of shares issued as part of a share exchange upon
incorporation of the Company.
Currency translation reserve
The currency translation reserve comprises the exchange differences arising on the translation of the assets and liabilities of
the Company into US dollars at the prevailing balance sheet rate and income and expense items being translated at the average
exchange rates for the period.
Capital redemption reserve
The capital redemption reserve represents the nominal value of shares redeemed out of distributable profits on cancellation.
Other reserves
Other reserves are in respect of movements on equity-settled share-based payments.
8. Distributable reserves
As the Company is a holding company with no direct operations, the capacity of the Company to make dividend payments is
primarily derived from dividends received from subsidiary companies.
At 31 December 2025, the retained surplus of the Company was $3,425m (2024: $3,089m) of which $1,811m (2024: $1,475m) was
realised and distributable. In 2024, a previous impairment of $1,614m was reversed and this is treated as non-distributable. Details
of the considerations and rationale for the distribution of dividends are given in the Directors’ report on page 122.
9. Financial guarantees
The Company has guaranteed certain external borrowings of subsidiaries which at 31 December 2025 amounted to $1,411m
(2024: $1,134m). The likelihood of these guarantees being called upon is considered to be remote and therefore the estimated
fair value of these guarantees is considered to be nil at 31 December 2025 (2024: nil).
10. Subsequent events
On 23 February 2026, the Board proposed the final dividend in respect of 2025 subject to shareholder approval at the Annual
General Meeting on 21 May 2026, to be distributed on 28 May 2026. See Note 16 – Dividends to the Consolidated Financial
Statements for further details.
181
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
182
Convatec Annual Report and Accounts 2025
Financial statements
Subsidiary and related undertakings
Details of the Company’s subsidiaries and associated undertakings at 31 December 2025 are as follows:
Name
Place of business and
registered office
Portion of ownership
interest %
Portion of voting power
held %
Convatec Argentina SRL
1
Argentina
100%
100%
Convatec (Australia) PTY Limited
2
Australia
100%
100%
Convatec (Austria) GmbH
3
Austria
100%
100%
Convatec Belgium BVBA
4
Belgium
100%
100%
Convatec Brasil Ltda.
5
Brazil
100%
100%
Convatec Medical Care Assistência a Paciente Ltda
6
Brazil
100%
100%
Convatec Canada Limited
7
Canada
100%
100%
Convatec Chile S.A.
8
Chile
100%
100%
Convatec Medical Care S.P.A
8
Chile
100%
100%
Convatec China Ltd
9
China
100%
100%
Convatec China Ltd (Beijing Branch)
10
China
100%
100%
Convatec China Ltd (Guang Zhou Branch)
11
China
100%
100%
Boston Medical Care S.A.S IPS
12
Colombia
100%
100%
Convatec Colombia Ltda.
13
Colombia
100%
100%
Convatec Ceska Republika s.r.o.
14
Czech Republic
100%
100%
Convatec Denmark A/S
15
Denmark
100%
100%
Convatec Denmark Holdings ApS
16
Denmark
100%
100%
Papyro-Tex A/S
17
Denmark
100%
100%
Unomedical A/S
16
Denmark
100%
100%
Boston Medical Device Dominicana S.R.L.
18
Dominican Republic
100%
100%
Convatec Ecuador S.A.
19
Ecuador
100%
100%
Convatec Middle East & Africa LLC
20
Egypt
100%
100%
Convatec OY
21
Finland
100%
100%
Convatec France Holdings SAS
22
France
100%
100%
Laboratoires Convatec SAS
22
France
100%
100%
Livramedom SAS
23
France
100%
100%
Convatec (Germany) GmbH
24
Germany
100%
100%
EuroTec GmbH
25
Germany
100%
100%
Convatec Hellas Medical Products S.A.
26
Greece
100%
100%
Convatec Hong Kong Limited
27
Hong Kong
100%
100%
Convatec India Private Limited
28
India
100%
100%
Convatec Healthcare Ireland Limited
29
Ireland
100%
100%
Convatec Italia S.r.l.
30
Italy
100%
100%
Convatec Japan KK
31
Japan
100%
100%
Cidron Healthcare Limited*
32
Jersey
100%
100%
Convatec Korea Ltd
33
South Korea
100%
100%
Convatec Healthcare D S.à.r.l.
34
Luxembourg
100%
100%
Convatec Malaysia Sdn Bhd
35
Malaysia
100%
100%
Boston Medical Device de México, S. de R.L. de C.V.
36
Mexico
100%
100%
Convatec Medical Care Mexico S. de R.L. de C.V.
36
Mexico
100%
100%
Unomedical Devices S.A. de C.V.
37
Mexico
100%
100%
Unomedical S.A de C.V.
38
Mexico
100%
100%
Convatec Nederland B.V.
39
Netherlands
100%
100%
EuroTec Beheer B.V.
39
Netherlands
100%
100%
EuroTec B.V.
39
Netherlands
100%
100%
Convatec (New Zealand) Limited
40
New Zealand
100%
100%
Convatec Norway AS
41
Norway
100%
100%
Convatec Peru S.A.C.
42
Peru
100%
100%
Convatec Polska Sp. Z.o.o
43
Poland
100%
100%
CVT Business Services, Unipessoal Lda.
44
Portugal
100%
100%
KVTech Portugal Produtos Medicos Unipessoal Ltda
44
Portugal
100%
100%
183
Convatec Annual Report and Accounts 2025
Additional information
Governance
Strategic report
Financial statements
ZAO Convatec**
45
Russia
100%
100%
Convatec (Singapore) PTE Limited
46
Singapore
100%
100%
Unomedical s.r.o.
47
Slovakia
100%
100%
ConvaCare Medical South Africa (PTY) Ltd
48
South Africa
100%
100%
Convatec South Africa (PTY) Limited
48
South Africa
100%
100%
Convatec Spain Holdings, S.L.
49
Spain
100%
100%
Convatec Spain S.L.
49
Spain
100%
100%
Convatec (Sweden) AB
50
Sweden
100%
100%
Convatec International Services GmbH
51
Switzerland
100%
100%
Convatec (Switzerland) GmbH
51
Switzerland
100%
100%
Convatec (Singapore) PTE Limited (Taiwan Branch)
52
Taiwan
100%
100%
Convatec (Thailand) Co. Ltd
53
Thailand
100%
100%
Convatec Sağlik Ürünleri Limited Şirketi
54
Türkiye
100%
100%
Convatec Middle East FZ-LLC
55
United Arab Emirates
100%
100%
Akers & Dickinson Limited
56
United Kingdom
100%
100%
Allied Medical (UK) Services Limited
56
United Kingdom
100%
100%
Alpha-Med (Medical & Surgical) Limited
56
United Kingdom
100%
100%
Amcare Limited
56
United Kingdom
100%
100%
Arthur Wood Limited
56
United Kingdom
100%
100%
B.C.A. Direct Limited
56
United Kingdom
100%
100%
Bradgate-Unitech Limited
56
United Kingdom
100%
100%
Convatec Limited
56
United Kingdom
100%
100%
Convatec Accessories Limited
56
United Kingdom
100%
100%
Convatec Finance Holdings Limited
57
United Kingdom
100%
100%
Convatec Group Holdings Limited*
57
United Kingdom
100%
100%
Convatec Holdings U.K. Limited
57
United Kingdom
100%
100%
Convatec International U.K. Limited
57
United Kingdom
100%
100%
Convatec Management Holdings Limited*
56
United Kingdom
100%
100%
Convatec NAP Limited
56
United Kingdom
100%
100%
Convatec Speciality Fibres Limited
56
United Kingdom
100%
100%
Farnhurst Medical Limited
56
United Kingdom
100%
100%
Lance Blades Limited
56
United Kingdom
100%
100%
M.S.B. Limited
56
United Kingdom
100%
100%
Needle Industries (Sheffield) Limited
56
United Kingdom
100%
100%
Nottingham Medical Equipment Limited
56
United Kingdom
100%
100%
Novacare UK Limited
56
United Kingdom
100%
100%
Pharma-Plast Limited
56
United Kingdom
100%
100%
Project Dragon SPV Limited
57
United Kingdom
100%
100%
Resus Positive Limited
56
United Kingdom
100%
100%
Rotax Razor Company Limited
56
United Kingdom
100%
100%
Shrimpton & Fletcher Limited
56
United Kingdom
100%
100%
Starlight Science Limited
56
United Kingdom
100%
100%
Steriseal Limited
56
United Kingdom
100%
100%
SureCalm Healthcare Holdings Limited
56
United Kingdom
100%
100%
SureCalm Healthcare Ltd
56
United Kingdom
100%
100%
SureCalm Pharmacy Limited
56
United Kingdom
100%
100%
Unomedical Developments Limited
56
United Kingdom
100%
100%
Unomedical Holdings Limited
56
United Kingdom
100%
100%
Unomedical Limited
56
United Kingdom
100%
100%
Unoplast (U.K.) Limited
56
United Kingdom
100%
100%
180 Medical Acquisition Inc.
58
United States
100%
100%
180 Medical Holdings Inc.
58
United States
100%
100%
180 Medical Distribution Inc.
59
United States
100%
100%
180 Medical Inc.
58
United States
100%
100%
184
Convatec Annual Report and Accounts 2025
Financial statements
A Better Choice Medical Supply, L.L.C
60
United States
100%
100%
AbViser Medical, LLC
61
United States
100%
100%
All American Medical Supply Corp.
62
United States
100%
100%
Boston Med Device International, LLC
63
United States
100%
100%
Boston Medical Device, Inc.
63
United States
100%
100%
Cidron Healthcare GP, Inc.
59
United States
100%
100%
Convatec Dominican Republic Inc.
59
United States
100%
100%
Convatec Inc.
63
United States
100%
100%
Convatec NAP Holdings, Inc.
63
United States
100%
100%
Convatec Technologies Inc.
64
United States
100%
100%
Convatec Triad Life Sciences, LLC
59
United States
100%
100%
Cure Medical LLC
65
United States
100%
100%
J&R Medical, LLC
66
United States
100%
100%
Personally Delivered, Inc.
67
United States
100%
100%
PRN Medical Services, LLC
68
United States
100%
100%
PRNMS Investments LLC
68
United States
100%
100%
South Shore Medical Supply, Inc.
69
United States
100%
100%
Symbius Medical Inc.
68
United States
100%
100%
Unomedical America, Inc.
63
United States
100%
100%
Unomedical, Inc.
63
United States
100%
100%
Wilmington Medical Supply, Inc.
70
United States
100%
100%
Woodbury Holdings, Inc.
67
United States
100%
100%
WPI Acquisition Corporation
67
United States
100%
100%
WPI Holdings Corporation
67
United States
100%
100%
Boston Medical Device de Venezuela, C.A.
71
Venezuela
100%
100%
53. 9th Floor, M. Thai Tower, All Seasons Place, 87
Wireless Road, Lumphini, Phatum Wan, Bangkok,
10330, Thailand
54. Ayazağa Mah.Mimar Sinan SK. A Blok No:21A İC
Kapi No:9 Sariyer, Istanbul, Türkiye
55. 604N, 6th Floor, Dubai Science Park (DSP) Towers
North, Dubai Science Park, Dubai, United Arab
Emirates
56. GDC First Avenue, Deeside Industrial Park,
Deeside, Flintshire CH5 2NU, UK
57. 20 Eastbourne Terrace, Paddington, London W2
6LG, UK
58. 8516 Northwest Expressway, Oklahoma City, OK
73162-601, US
59. 251 Little Falls Drive, Wilmington, DE 19808, US
60. 3100 Dixie Hwy, Waterford Twp, MI 48328, US
61. 79 W 4500 S, Suite 18, Salt Lake City UT
84107-2647, US
62. 5493 Merrick Road, Massapequa, NY 11758, US
63. 200 Connell Drive, Suite 1000, Berkeley Heights,
NJ 07922, US
64. C/o CSC, 112 North Curry Street, Carson City, NV
89703, US
65. 3471 Via Lido, Suite 211, Newport Beach, CA
92663, US
66. 4625 Southwest Freeway, Suite 800, Houston, TX
77027-7105, US
67. 725 Primera Blvd, Suite 230, Lake Mary, FL
32746-2127, US
68. 16610 N. Black Canyon Highway, Suite 109,
Phoenix, AZ 85053-7551, US
69. 58 Norfolk Avenue, Unit 2, South Easton, MA
02375-1907, US
70. 5815 Oleander Drive, Unit 310, Wilmington, NC
28403-4853, US
71. Av. Sorocaima, Av. Libertador con Venezuela, Edif.
Atrium, Piso 3, Oficina 3G, Urb. El Rosal, Caracas
(Chacao), Miranda State, Postal Zone 1060,
Venezuela
*
Directly held investment by Convatec Group Plc
**
Convatec discontinued all activity in Russia in
2022, has no remaining employees in the country
and the liquidation of its dormant entity remains
on track to be completed in 2026. This is reported
for administrative purposes only.
1.
Calle Cerrito No.1070 Tercer Piso, Oficina 71,
Buenos Aires, Argentina
2.
C/o Intertrust Australia Pty Ltd, Suite 2, Level 25,
100 Miller Street, North Sydney, NSW 2060,
Australia
3.
Schubertring 6, 1010 Wien, Austria
4.
Parc d’Alliance, Boulevard de France 9, B-1420
Braine l’Alleud, Belgium
5.
Floor 2, Room 21/22, Av Pres. Juscelino Kubitschek
50, New Conception Village, São Paulo, Brazil
6.
Av. Nove de Julho, 4024, Jardim Paulista, São
Paulo, SP 01406-100, Brazil
7.
600-1741 Lower Water Street, Halifax, Nova Scotia
B3J 0J2, Canada
8.
Av. Andres Bello #2325, Oficina 8, Santiago, Chile
9.
Units 04A,05 & 06, 23rd Floor (Actual Floor 20), No.
18, Lane 666, Haiyang West Road, China
(Shanghai) Pilot Free Trade Zone, Shanghai
200126, China
10. Room 09-12, 15 & 16 Inner 2701, 23F, Building 1,
Yard 38, East Third Ring North Road, Chaoyang
District, Beijing 10020, China
11. Unit 808, Level 8, Fortune plaza, No.116 Ti Yu
Dong Road, Tianhe District, Guangzhou City,
Guangdong, 510620, China
12. Calle 82 # 18-31, Bogotá, Colombia
13. Av. Carrera 45 #108-27 Centro Empresarial
Paralelo 108, Bogotá, DC Codigo Postal 111111,
Colombia
14. Olivova 2096/4, Prague 1, 11000, Czech Republic
15. Transformervej 14, 2860 Søborg, Denmark
16. Åholmvej 1-3, 4320 Lejre, Denmark
17. ConvaTec Harlev Skinderskovvej 32-36, 2730,
Herlev, Denmark
18. Arzobispo Portes No. 659, Ciudad Nueva, Santo
Domingo, Dominican Republic
19. Francisco Robles E4-136 y Av. Amazonas, Edificio
Proinco Calisto, Piso 12, Quito, EC170526, Ecuador
20. Office No. M017, Raya Building, 70 Street, New
Cairo Banks, Cairo, Egypt
21. Karhumäentie 3, 01530 Vantaa, Finland
22. 89, Boulevard National, F-92250 La Garenne-
Colombes, France
23. 111 Avenue de la Roque Forcade, 13420 Gemenos,
France
24. Mühldorfstrasse 8, 81671 Munich, Germany
25. Solingerstrasse 93 40764 Langenfeld, Germany
26. 392A Mesogeion Avenue, Ag. Paraskevi, Athens,
15341, Greece
27. Unit 1901 Yue Xiu Bldg 160–174, Lockhart Road,
Wan Chai, Hong Kong
28. Unit No 206, 2nd Floor Tower B, Digital Greens,
Sector 61, Golf Course Road, Gurgaon 122102,
Haryana, India
29. 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland
30. Via della Sierra Nevada, 60-00144 Rome, Italy
31. 1-1-7 Koraku, Bunkyo-ku, Tokyo 112-0004, Japan
32. 44 Esplanade, St. Helier, Jersey, JE4 9WG, Channel
Islands
33. 4F, American Standard B/D, Yeongdongdaero
112gil 66, Gangnam-Gu, Seoul, 06083, South
Korea
34. 7 rue de Bitbourg, L-1273, Luxembourg
35. 18-12 Menara Q Sentral, 2A Jalan Stesen Sentral 2,
Kuala Lumpur Wilayah Persekutuan 50470
Malaysia
36. Avenida Insurgentes Sur 619, 3° Piso, Nápoles,
Ciudad de Mexico 03810, Mexico
37. Av. Fomento Industrial L9 M3, Parque Industrial
del Norte, Reynosa Tamps, C.P. 88736, Mexico
38. Avenida Industrial Falcón, L7, Parque Industrial
del Norte, Reynosa Tamps, C.P. 88736, Mexico
39. Papendorpseweg 95, 3528 BJ, Utrecht,
Netherlands
40. C/o Intertrust New Zealand, Level 1, 33 Federal
Street, Auckland, 1010, New Zealand
41. Wergelandsveien 7, 0167 Oslo, Norway
42. Avenida Javier Prado Este 488-492, Piso 9, San
Isidro, Lima, Peru
43. Rondo Daszyńskiego 1, 00-843, Warsaw, Poland
44. Av. Duque de Loulé, 106, 2nd Floor, 1050-093,
Lisboa Portugal
45. 3rd Floor, Building 1, 36 Berzarina Street,
Shchukino Municipal District, 123060, Moscow,
Russia
46. 80 Pasir Panjang Road, #26-81A Mapletree
Business City, Singapore 117372, Singapore
47. Priemyselný Park 3, 071 01 Michalovce, Slovakia
48. Workshop 17, 16 Baker Street, Rosebank,
Johannesburg, Gauteng 2196, South Africa
49. C/Constitucion, Num 1, Planta 4, Puerta 4, 08960
Sant Just Desvern, Barcelona, Spain
50. Box 3096, 169 03 Solna, Stockholm, Sweden
51. Herrenacker 15, 8200 Schaffhausen, Switzerland
52. 5F.-4, No. 57, Fuxing N. Rd, Songshan Dist., Taipei
City, 10595, Taiwan
Subsidiary and related undertakings
continued
185
Convatec Annual Report and Accounts 2025
Financial statements
Governance
Strategic report
Additional information
Shareholder information
Share fraud
We would like to warn all of our
shareholders to be very wary of any
unsolicited telephone calls or letters
which offer investment advice, offer to
buy your shares at a discounted price, or
sell them at an inflated price or offers
free company reports. This type of call
should be treated as an investment
scam. Further information about
investment scams and how they should
be reported is available at www.
convatecgroup.com/investors/
shareholder-centre/faqs-and-other-
information/.
Company Secretary
and registered office
James Kerton
Convatec Group Plc
7th Floor
20 Eastbourne Terrace
Paddington
London
W2 6LG
United Kingdom
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
United Kingdom
Telephone: +44 (0) 370 703 6219
Contact:
www.investorcentre.co.uk/contactus
Auditor
Deloitte LLP
Brokers
Morgan Stanley & Co. International plc
UBS AG
Solicitors
Freshfields LLP
Our corporate website:
www.convatecgroup.com
Information about our Stock Exchange
announcements, key dates in our
financial calendar, our share price
information and background
information is available on our corporate
website at www.convatecgroup.com/
investors.
̵
We will release our interim results for
the six months ended 30 June 2026
on 4 August 2026.
Shareholders may also receive
information by email by signing up to
the news alert service available at www.
convatecgroup.com/investors/sign-up-
for-more-information.
Share price information
Our closing share price as at
31 December 2025 was 243.20 pence
per ordinary share.
Managing your shareholding
You can manage your shareholding
online by registering to use Investor
Centre, a free and secure website.
Investor Centre is available 24 hours
a day, 365 days a year. To find out
more about Investor Centre visit
www.investorcentre.co.uk. Registration
is a straightforward process and all you
will need is your shareholder reference
number (SRN) and registered address
details.
Shareholders who prefer not to manage
their shareholding online can contact
our Registrars, Computershare Investor
Services PLC, who manage our share
register. The shareholder helpline
number is +44 (0) 370 703 6219 and
further information about Computershare
Investor Services PLC is set out below.
Internet share dealing
Please note that, if you wish to purchase
shares in the Company, you may do so
through a bank or stockbroker.
Alternatively, please go to www.
computershare.com/dealing/uk for a
range of dealing services made available
by Computershare; this service is only
available to shareholders in the UK.
This service provides shareholders with
a convenient way to buy or sell the
Company’s ordinary shares on the
London Stock Exchange. The
commission is 1.4%, subject to a
minimum charge of £40. In addition,
stamp duty, currently 0.5%, is payable
on purchases. Real-time dealing is
available during market hours. In
addition, there is a convenient facility
to place your order outside of
market hours.
Up to 90-day limit orders are available
for sales. Before you can trade you will
need to register for the service. To
access go to www.computershare.com/
dealing/uk.
Shareholders should have their SRN
available. The SRN appears on share
certificates as it will be required as part
of the registration process. A bank debit
card will be required for purchases.
Postal share dealing
Please note this service is, at present,
only available to shareholders resident
in the UK. The commission is 1.4% plus a
charge of £40. In addition, stamp duty,
currently 0.5%, is payable on purchases.
The service is available from 8.00am to
4.30pm Monday to Friday, excluding
bank holidays, on telephone number
+44 (0) 370 703 0084. Before you trade
you will need to register for this service.
This can be done by going online at
www.computershare.com/dealing/uk.
Shareholders should have their SRN
ready when making the call. The SRN
appears on share certificates. A bank
debit card will be required for purchases.
Detailed terms and conditions are
available on request by telephoning
+44 (0) 370 703 0084.
Please note that due to the regulations
in the UK, Computershare are required
to check that you have read and
accepted their Terms and Conditions
before being able to trade, which could
delay your first telephone trade. If you
wish to trade quickly, we suggest visiting
their website and registering online first.
186
Convatec Annual Report and Accounts 2025
Additional information
Glossary
Disclosure
guidance and
transparency
rules (DTRs)
FCA disclosure guidance
and transparency rules with
which the Group must
comply.
EBITDA
Earnings before interest,
tax, depreciation and
amortisation.
EcoVadis
Third-party platform used
for supplier risk assessment
and ESG engagement.
Effective
tax rate (ETR)
The tax charge in the
income statement as a
percentage of profit before
tax.
EPS
Earnings per share.
Equity cash
conversion
Free cash flow to equity
divided by adjusted net
profit.
EHS
Environment, Health and
Safety.
eNPS
Employee Net Promoter
Score.
ESG
Environmental, Social and
Governance.
ESMA
European Securities and
Markets Authority.
EU
European Union.
EURIBOR
Euro Interbank Offered
Rate.
FBU
Fair, Balanced and
Understandable. Statement
made by the Board that
considers the Annual Report
and Accounts, taken as a
whole, are fair, balanced
and understandable. The
Board is supported by the
Audit and Risk Committee.
FCA
Financial Conduct Authority.
FDA
US Food and Drug
Administration.
FISBE
Convatec’s corporate
strategy: Focus, Innovate,
Simplify, Build, Execute.
FRC
Financial Reporting Council.
Functions
Convatec Functions: Global
Quality Operations (GQO)
and Technology &
Innovation (T&I) and other
business support functions.
FX
Foreign Exchange.
G&A
General & Administrative.
GDP
Gross Domestic Product.
GDPR
General Data Protection
Regulation.
GEM
Global emerging markets.
GHG emissions
Greenhouse gas emissions.
Group
The Company and its
subsidiaries.
AAALAC
Assessment and
Accreditation of Laboratory
Animal Care.
Alternative
performance
measures (APMs)
Certain financial measures
in this Annual Report and
Accounts are not prepared
in accordance with IFRS and
used as a meaningful
supplement to reported
measures. Also referred to
as adjusting items.
Advanced Wound
Care (AWC)
Advanced dressings for the
management of acute and
chronic wounds resulting
from ongoing conditions,
such as diabetes, and acute
conditions resulting from
traumatic injury and burns.
AGM
Annual General Meeting of
the Company.
AI
Artificial intelligence.
ARA
Annual Report and
Accounts.
ARC
Audit and Risk Committee.
Articles
The Articles of Association
of the Company for the time
being in force.
ATT
Advanced Tissue
Technologies.
B2B customers
Business-to-business
customers.
Basic earnings
per share
Net profit available for
Convatec shareholders
divided by the weighted
average number of ordinary
shares in issue during the
year.
Basis points (bps)
A unit of measurement that
represents one-hundredth
of one percent, or 0.01%.
BMS
Bristol Myers Squibb.
Board
The Board of Directors of
Convatec Group Plc.
Book tax rate
The tax charge in the
income statement as a
percentage of profit before
tax.
BSI
British Standards
Institution.
Care categories
The Group has four product
groups, being Advanced
Wound Care, Ostomy Care,
Continence Care and
Infusion Care.
Capital
expenditure
(capex)
Purchases of property, plant
and equipment and
intangible assets.
Cash‑generating
units (CGUs)
The smallest identifiable
groups of assets that
generate cash inflows that
are largely independent of
the cash inflows from other
assets or groups of assets.
CBS
Convatec Business Services
(located in Lisbon, Bogotá
and Kuala Lumpur).
CELT
Convatec Executive
Leadership Team.
CHW
Community Health Worker.
CMS
Centers for Medicare &
Medicaid Services.
cNPS
Customer Net Promoter
Score.
Code
UK Corporate Governance
Code 2024 in effect from 1
January 2025, issued by the
FRC.
Code of conduct
Our code of conduct which
covers business conduct
and compliance issues,
including bribery and
corruption.
CODM
Chief Operating Decision
Maker.
CoE
Centre of Excellence.
Companies Act
Companies Act 2006, as
amended, of England and
Wales.
Company or
parent company
Convatec Group Plc.
Compound
annual growth
rate (CAGR)
CAGR shows the rate of
growth over a certain
period of time, expressed in
annual percentage terms.
Constant
currency growth
Constant currency growth
is calculated by applying the
applicable prior period
average exchange rates to
the Group’s actual
performance in the
respective period.
Continence
Care (CC)
Products and services for
people with urinary
continence issues related to
spinal cord injuries,
neurological disease,
prostate enlargement and
other causes.
CPM
Complaints per million.
CSRD
The EU Corporate
Sustainability Reporting
Directive.
Derivatives
Financial instruments used
to reduce risk, the price of
which is derived from an
underlying asset, index or
rate.
Diluted earnings
per share
The calculation of diluted
earnings per share, includes
the dilutive impact of share
awards where the average
market price of the Group’s
ordinary shares exceeds the
exercise price.
Director
A member of the Board of
Directors of Convatec
Group Plc.
187
Convatec Annual Report and Accounts 2025
Financial statements
Governance
Strategic report
Additional information
ROIC
Return on invested capital.
SBTi
Science Based Target
initiative.
SBTs
Science Based Targets.
Sedex
Third-party platform used
for supplier risk assessment
and ESG engagement.
SID
Senior Independent
Director.
SOFR
Secured Overnight
Financing Rate.
SONIA
Sterling Overnight Index
Rate.
Speak Up
Independent and
confidential compliance
helpline for colleagues and
third parties.
Sterling, £, pence
or p
The currency of the United
Kingdom.
Subsidiary
A company over which the
Group exercises control.
T&I
Technology & Innovation.
TCFD
Task Force on
Climate-related Financial
Disclosures.
TSR
Total shareholder return.
UKLA
The UK’s Listing Authority.
UNGC
United Nations Global
Compact.
US dollar,
$, cent or ¢
The currency of the United
States of America.
YoY
Year-on-year.
Viability Period
The three-year period from
January 2026 to December
2028 (based on the Annual
Report).
WACC
Weighted average cost of
capital.
Growth capex
Capital expenditure to
develop new products and
create or increase capacity.
GPO
Group purchasing
organisations.
GQO
Global Quality & Operations.
H&S
Health and safety.
HCP
Healthcare professional.
Home Services
Group (HSG)
Convatec’s home services
businesses, including 180
Medical, Amcare and
Livramedom.
IASB
International Accounting
Standards Board – the
independent standard
setting body of the IFRS
Foundation.
IBOR
Interbank Offered Rate.
IDA
Industrial Denatured
Alcohol.
IEA
International Energy
Agency, an autonomous
intergovernmental
organisation providing
policy recommendations
and analysis and data on
the global energy sector.
IFRS
International Financial
Reporting Standards as
issued by the IASB.
IFRIC
International Financial
Reporting Interpretations
as issued by the IASB.
Infusion
Care (IC)
Disposable infusion sets
used with insulin pumps for
diabetes or with continuous
infusion treatments for
conditions such as
Parkinson’s disease.
IP
Intellectual property.
IR
Investor Relations.
IRO
Impacts, risks and
opportunities.
Key Performance
Indicator (KPI)
Financial and non-financial
measures that the Group
uses to assess performance
and strategic progress.
LCA
Life cycle assessment.
LCDs
Local Coverage
Determinations (eligibility
for local Medicare coverage
in the US).
Leverage
Net debt (excluding leases)
divided by adjusted EBITDA.
LTIP
Long-term incentive plan.
LTIR
Lost-time injury rate.
M&A
Mergers and acquisitions.
MAR
Market Abuse Regulation.
MDR
Medical Device Regulations
introduced in the EU with
required transition by May
2021. MDR imposes
rigorous requirements in
relation to a number of
areas including clinical data
and post-market
surveillance.
MedTech
Medical technology.
Net debt
Borrowings less cash and
cash equivalents and
excluding lease liabilities.
NGO
Non-governmental
organisation.
NHS
UK National Health Service.
OECD
Organisation for Economic
Cooperation and
Development.
Operating cash
conversion
Operating cash flow divided
by adjusted operating profit.
Operational
capex
Capital expenditure to
maintain the Group’s
existing operations/output.
Opex
Operating expenses, being
the total of selling and
distribution expenses,
general administrative
expenses and research and
development, and other
operating expenses.
Organic revenue
growth
Period-over-period revenue
growth at constant
currency, adjusted for
acquired and disposed/
discontinued businesses.
Organic revenue
growth
(excluding
InnovaMatrix
®
)
Period-over-period
revenue growth at
constant currency,
adjusted for acquired
and disposed/discontinued
businesses and excluding
InnovaMatrix
®
revenues.
Ostomy Care (OC)
Devices, accessories and
services for people with a
stoma (a surgically created
opening where bodily waste
is discharged), commonly
resulting from causes such
as colorectal cancer, bladder
cancer, inflammatory bowel
disease and trauma.
PBT
Profit before income taxes.
Peakon
Workday employee voice
platform.
PIH
Partners In Health, an
international public health
organisation providing
healthcare in the poorest
areas of developing
countries.
PP&E
Property, plant and
equipment.
R&D
Research and Development.
RCT
Randomised controlled trial.
188
Convatec Annual Report and Accounts 2025
Additional information
Important information for readers of this Annual Report
Cautionary statement regarding
forward‑looking statements
The purpose of this Annual Report is to
provide information to the members of
the Company. The Group and its
Directors, employees, agents and
advisers do not accept or assume
responsibility to any other person to
whom this Annual Report is shown or
into whose hands it may come and any
such responsibility or liability is expressly
disclaimed. In order, among other things,
to utilise the ‘safe harbour’ provisions of
the US Private Securities Litigation
Reform Act 1995 and the UK Companies
Act 2006, we are providing the following
cautionary statement: This Annual
Report contains certain forward-looking
statements with respect to the
operations, performance and financial
condition of the Group, including among
other things, statements about expected
revenues, margins, earnings per share or
other financial or other measures.
Forward-looking statements are
generally identified by the use of terms
such as ‘believes’, ‘estimates’, ‘aims’,
‘anticipates’, ‘expects’, ‘intends’, ‘plans’,
‘predicts’, ‘may’, ‘will’, ‘could’, ‘targets’,
‘continues’ or, in each case, their
negatives or other similar expressions.
These forward-looking statements
include all matters that are not
historical facts.
Forward-looking statements are
necessarily based upon a number of
estimates and assumptions that, while
considered reasonable by the Company,
are inherently subject to significant
business, economic and competitive
risks, uncertainties and contingencies
that are difficult to predict and many of
which are outside the Group’s control.
As such, no assurance can be given that
such future results, including guidance
provided by the Group, will be achieved.
Forward-looking statements are not
guarantees of future performance and
such uncertainties and contingencies,
including the factors set out in the
Principal risks section of the Strategic
report which begins on page 70, could
cause the actual results of operations,
financial condition and liquidity, and the
development of the industry in which the
Group operates, to differ materially from
the position expressed or implied in the
forward-looking statements set out in
this Annual Report. Past performance of
the Group cannot be relied on as a guide
to future performance. Nothing in this
Annual Report should be construed as a
profit forecast.
Forward-looking statements are based
only on knowledge and information
available to the Group at the date of
preparation of this document and speak
only as at the date of this Annual Report.
The Group and its Directors, officers,
employees, agents, affiliates and
advisers expressly disclaim any
obligations to update any
forward-looking statements (except to
the extent required by applicable law
or regulation).
Third‑party data
The industry and market data contained
in this Annual Report has come from
third-party sources and from the Group’s
own internal research and estimates
based on the knowledge and experience
of the Group’s management in the
market in which the Group operates.
Whilst the Group believes that such
sources, research and estimates are
reasonable and reliable, they have not
been independently verified and are
subject to change without notice.
Accordingly, undue reliance should not
be placed on any of the industry or
market data in this Annual Report.
Convatec website
Information on or accessible through our
website www.convatecgroup.com and
other websites mentioned in this Annual
Report, does not form part of and is not
incorporated into this Annual Report.
Figures
Figures in parentheses in tables and in
the Financial Statements are used to
represent negative numbers.
Convatec Group Plc
7th Floor
20 Eastbourne Terrace
Paddington
London
W2 6LG
United Kingdom
www.convatecgroup.com
Company No: 10361298
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www.convatecgroup.com