Convatec Group Aktie

Hello, and welcome to ConvaTec Group AGM Trading Update Call. Please note that this call is being recorded. [Operator Instructions] I'd now like to hand the call over to Jonny Mason, CEO. Please go ahead, sir.

Good morning, everybody, and welcome to our AGM trading update call. The headline is that we've made a good start to the year with results for the first 4 months in line with expectations. We're on track to deliver our 2026 guidance.

I'm going to hand over to our CFO, Fiona, to present those results. Then I'll make some brief comments on strategic progress afterwards, and we'll take any questions that you have.

Thank you, Jonny, and good morning, everybody.

For the first 4 months of the year, organic revenue growth of 4.8% excluding InnovaMatrix, was broad-based across all 4 categories. InnovaMatrix represented about a 3% group headwind and was less than 1% of group revenue, in line with our guidance.

Group organic revenue growth, including InnovaMatrix, was 1.6%. U.S. dollar depreciation year-on-year drove a material FX translation benefit with reported revenue growth of 5.5%.

As we said at our full year '25 results in February, we expect growth to accelerate in the second half given customer order phasing and as product launches build. We are well on track to deliver our guidance of 5% to 7% organic revenue growth excluding InnovaMatrix for full year '26.

Looking at each category. In Advanced Wound Care, organic growth, excluding InnovaMatrix, was mid-single digit. Growth was led by LATAM and APAC and included solid growth in Europe, representing a growth pickup compared with the second half 2025. North America grew slightly versus a particularly strong growth comparative.

ConvaFoam continued to perform well and win share with further growth from our leading antimicrobial dressing AQUACEL Ag+ Extra. We are on track to deliver mid-single-digit growth in 2026, underpinned by 5 wound product launches.

In Ostomy Care, organic growth was mid-single digit, led by Europe and LATAM. Our Home Services Group continued to support new patient referrals in the U.S.

Esteem Body, our 1-piece soft convex product, continues to make excellent progress with positive customer feedback. We are growing share in all key markets. Our Ostomy guidance for 2026 is unchanged at mid-single-digit growth.

In Continence Care, organic growth was mid-single digit. In North America, which represented over 90% of category sales, we saw further growth in patient volumes driven by our excellent customer service of 180 Medical, our market-leading service company.

Outside the U.S., growth was again very strong off a small base. We continue to expect growth outside the U.S. to contribute at least a point of growth to the category as it did last year. Our growth guidance for the full year is unchanged at mid-single digit. And in Infusion Care, organic growth was mid- to high single digits as we expected.

We continue to see strong demand for our infusion sets in both diabetes and particularly non-diabetes treatments as we continue to diversify.

Our guidance for the full year remains high single digit. We expect better H2 growth given customer order phasing and as some new capacity comes on stream with significantly more coming on stream in 2027.

We are on track to deliver our 2026 financial targets. As I've just outlined, group revenue growth and guidance for each category is unchanged. We continue to expect around $20 million of InnovaMatrix revenue significantly weighted to the second half, in line with prior guidance, although market uncertainty is high.

2026 will be the low point in the market, and we will grow thereafter. We continue to expect group adjusted operating profit margin of at least 23%, driven by further operations, commercial and G&A productivity. This includes around 40 basis points of full year '26 FX headwind, all of which occurs in the first half. And it assumes no material deterioration in the macroeconomic environment.

Given this, H1 adjusted operating margin in constant FX will be approximately flat on H1 '25 with simplification and productivity initiatives building through the second half, supporting margin expansion to at least 23%. And we expect to deliver another year of double-digit EPS growth with 100% equity cash conversion.

I'll now hand back to Jonny.

Thanks, Fiona. It's only 6 weeks since our Capital Markets Day, where we launched our Accelerate strategy, and the update today is entirely in line with what we said there. We continue to make good progress with our new product launches. In Advanced Wound Care, ConvaFoam continues to be well received. Sales are building nicely. We have new capacity coming on stream, which sets us up to meet future demand for years to come.

With ConvaNiox, we are creating a new category with our groundbreaking nitric oxide technology. The initial market release is progressing well. We expect a buildup of sales to be slow, but we are as excited as ever about its long-term prospects.

With ConvaFiber and ConvaVac, initial market releases are underway and all of that contributes to arguably the strongest new product pipeline in the wound care market. These new products provide us with the platform to accelerate growth from 2027.

In Ostomy Care, Esteem Body is performing very well, gaining share in all of our major markets. Our updated fecal management system, Flexi-Seal Air, launches in 2026. And in 2027, we're looking forward to the launch of Natura Body, the 2-piece soft convex.

The recent GPO contract wins demonstrate the improvements in commercial execution, which have been made by the team. And our guidance is to accelerate to mid- to high single-digit growth in 2027, underpinned by these product launches and patient wins.

In Continence Care, our market-leading 180 Medical business continues to set the standard for U.S. patient service and care. As expected, we have seen no material impact of the U.S. catheter code changes. GentleCath Air for Women, our female compact catheter, is gaining share and contributing to our growth globally.

GC Air Pocket and SET and Cure Aqua are all on track to launch in the second half of this year. And we are well positioned to accelerate growth to our medium-term target of mid- to high single digits.

In Infusion Care, our growth is increasingly diversified. Non-diabetes again accounted for over 15% of revenues, and we're pleased to announce that we have signed our first patch pump supply agreement, enabling us to support a wider range of diabetes patients for whom patch pumps may be a preferred option alongside our leading infusion set solutions for durable pumps. This demonstrates the capability and versatility of our technology to work across the full range of pump solutions. We see strong growth in Infusion Care sales for years to come, with double-digit revenue growth from 2027. And our CapEx is adding significant capacity to meet this demand, underpinned by long-term customer contracts.

So in summary, we've made a good start to the year. Growth is broad-based and across all categories, in line with expectations, and we're on track to deliver our 2026 guidance. New products are gaining share and our innovation pipeline is stronger than ever.

This year, we are busy building capacity and launching products, and we're ready to accelerate and deliver innovative chronic care solutions to more people around the world. This will have a sustainable 6% to 8% organic revenue growth with mid-20s operating margin and double-digit EPS growth from 2027.

Thanks very much, and now we'd be happy to take any questions that you have.

[Operator Instructions] Your first question comes from the line of Graham Doyle of UBS.

Can I ask a couple of questions. Just firstly, on the guidance for this year. So on the revenue side, I think you've talked about being at the lower end of the range in the first half. Just to check that, that -- does that still stands? And then on the margin guidance from -- for 2026, given the -- it feels like there's probably a slightly more H2 weighting to it. Could you just explain the confidence in terms of still reaching that 23%? That would be really helpful.

Thank you, Graham. So we are on track to deliver our full year guidance of 5% to 7%, excluding InnovaMatrix for the full year. We have delivered 4.8%, excluding InnovaMatrix for the first 4 months. And so we will continue to build that revenue growth through the year.

I think your assumption is reasonable for the first half. For the margin growth, as I said, we would expect to be around flat to the first half 2025 on a constant currency basis for the first half. And we are confident in delivering our full year guidance as our productivity and simplification initiatives build through the year and as our new products continue to launch through the year. So on track for our full year guidance.

Okay. And maybe just a quick follow-up on '27 or sort of midterm guide you've reiterated today. Just given the inflationary backdrop, your hedge for this year, but if we were to take something like recent spot prices, would it still be feasible to assume you can deliver what you've outlined for '27 as well?

Yes. Thanks, Graham. And let me remind you what I laid out at the Capital Markets Day. So as you say, we are hedged for this year. We have both raw material and inventory stock. And therefore, every, let's say, 1% increase in inflation this year will have immaterial impact to 2026. For 2027, for every 1% increase in inflation over that which we had assumed and we have planned for around 3%, that would result in a $7 million to $8 million impact.

So let's say in spot rates continue through 2027, that could mean a doubling of that inflation. And if that were the case, that would be an impact of between $20 million to $30 million in 2027. We do not believe that, that would knock us off track. We would control what we can control, and we would continue to deliver the simplification and productivity initiatives, which we have a strong track record of delivering. And we would, if necessary, accelerate some of those in order to maintain our guidance for 2027. Now if it deteriorated significantly beyond that, it may delay that progress. But at the moment, we are on track for 2027.

Your next question comes from the line of Hassan Al-Wakeel of Barclays.

A couple, please. So firstly, on patch, great to see the supply agreement you've announced. When do you expect volumes to ramp? And how significant an opportunity do you think this is? And would it be significant enough to change the diabetes and non-diabetes mix that you've talked about in a material way over the medium term? And then secondly, it would be great if you can talk through what you're seeing in the European wound business given some competitor commentary on reimbursement pressure and whether there's anything incremental to your mind on the ground?

Thanks, Hassan. Look, the patch agreement is great news. It reinforces what we've said for a while, which is that our technology can service all different forms of pumps in the market, both diabetes and in other therapies as well. This is another piece of the puzzle. It's a further diversification of customer and product, which we've been pursuing for a while. It's not going to add volumes materially for some time because it isn't yet in the market. And you shouldn't think about it as changing the guidance we've already given, which is for Infusion Care to be a double-digit growth business from 2027 onwards.

This is another piece of that strategy, which underpins the delivery of that level. And then on European wound, we are continuing to launch the new products in line with plan that they're continuing to grow share from a small base. And we aren't calling out anything in particular about European wound. It's continuing to add low mid-single-digit growth for the category as we expected it to.

Your next question comes from the line of Kane Slutzkin of Deutsche Bank.

Fiona, just a follow up on the sort of inflation piece. To what extent have you actually pulled on that 5 months of raw mats that you have or the inventory? I assume you want to work your way through all of it. And are we sort of -- are you seeing any sort of supply chain disruptions or any material increases to logistics costs. We did have one of your peers saying that they don't think the levels of '22, '23 would repeat this time around. Do you sort of share that view?

Thanks, Kane. So to your first point, we are comfortable with our inventory levels, we are managing well through 2026. We have seen some increases in logistics, but really fairly immaterial when we look at our cost base. And then your second part of the question about '22, '23. No, the situation that we're in at the moment does not reflect or feel like the situation that we were in, in 2022 or 2023 at all, actually.

But I remind you that even with the inflationary spikes that we did experience in 2022 and 2023, we continue to grow our margin.

Okay. And could I just ask on -- just on the share buyback program that we saw. I mean, I did have a few sort of clients sort of asking, is there another one coming? Just wondering your thoughts on the potential to extend the buyback given where shares are currently sitting? Is it something you would perhaps consider at the half?

Well, we have a really clear capital allocation strategy, and we're targeting 2x leverage at the end of the year. As we've laid out before, if we don't have any material M&A concluding this year, we may return excess capital to our shareholders, but the share price would not drive that

decision.

Okay. And sorry, last one, I'll just sneak in. Just any update on the CBP or anything on Section 232, anything there we should be aware of?

Still on track preparations as we said previously, hasn't been any new news out of CMS. So we are looking forward to reading framework guidance this summer. But nothing's really changed, Kane. We still believe we're in a strong position. We still believe that the number of distributors in the U.S., if this goes ahead in our categories, will shrink dramatically from thousands down to fewer than 20. So as the biggest and one of the few who can fulfill national contracts, this will hold.

And with regards to Section 232, Kane, there is an update coming at the end of the month, but we expect the Nairobi protocol to hold.

Your next question comes from the line of Seb Jantet of Panmure Liberum.

I've only got one left actually. So I just wanted to pick up on the IC business and comments in Tandem in its last kind of update about supply issues in terms of infusion sets. I'm just wondering if you could help us kind of understand to what extent that's kind of been a drag on your kind of revenue growth in IC in the kind of first 4 months of the year. And I guess following on from that, whether there's any update on the FDA kind of warning letter at the kind of Infusion Care plant?

Yes, sure. Thanks, Seb. Look, Tandem, I think the short answer is it hasn't been a material drag on revenue. We're disappointed to not have been able to keep up with the strong demand growing for certain of our infusion sets. But we are working closely with Tandem to substitute from our own range, those which are temporarily in short supply. And we are expecting new capacity to start coming on stream from summer and to continue building through 2027.

So it's unfortunate, but it hasn't had a material impact on revenue. The second half weighting of revenue growth in Infusion Care is something that we were expecting right from the beginning of the year, and that's down to customer order phasing as it has been in previous years.

As regards to the warning letter, we're working very hard on that. We have very close dialogue with the FDA and with our customers to remediate the management of complaints, the processes and procedures that are related to those. In fact, I was talking to the FDA just this week on that and it's going well. We want to remind you that, of course, the warning letter didn't relate to patient safety or product efficiency. So it's important we fix it. We're working hard on it. We will fix it, and we're on track.

Your next question comes from the line of Christian Glennie of Stifel.

Maybe a couple more around the patch pump deal as much as you can say around the status of that asset? Is it something that's already on the market? If not, when it might reach the market? Does it have any implications in terms of the investments and capacity that you've already planned? Or was that part of your current plans around that? And then maybe on -- is there anything you can say around the margin profile of supporting a patch pump versus your tubed infusion sets.

Look, it's early days. The product is not in the market yet. We anticipate it to be in the next year or so. But that's not for us to comment on. We're delighted that we've been chosen by the customer to support them in this important development. But as I answered to a previous question, it's not material in itself to change any of the guidance that we've already shared. It's another piece that underpins our strong double-digit growth in Infusion Care for the years to come.

The CapEx is incorporated within the guidance we've already given. It won't lead to an increase in CapEx beyond what's already being shared. And the margin, we don't comment on margin by individual product, but it's in line with the portfolio of other products that we have.

And can I ask a quick follow-up on InnovaMatrix, just checking in on the DFU and VLU trials in terms of the status of those and potential data from those trials?

We're still on track to publish results from the trials in 2026. So in -- within this year, I think as Fiona said in her presentation, the market at the moment is very uncertain with InnovaMatrix.

We were expecting there to be quite some transition in the market from how reimbursement used to work to the new price levels. And that is ongoing, it's shaking out, very little revenue is being generated on DFU and VLU at the moment by NPA. And we're expecting that to pick up later in the year. But as Fiona said, it's highly uncertain at the moment.

Your next question comes from the line of Julien Dormois of Jefferies.

I have 2. The first one, and sorry for coming back again on this, but related to the margin phasing for this year, if I -- if my math are right what you indicated in terms of the flat margin in H1 and the majority of the FX headwind for the first half. That would probably mean that you have an H1 reported margin around 20.5%. So if your guidance goes for 23%, that would be around 25.5% for the back half. That's a pretty steep ramp H2 versus H1. So would be just super helpful to have sort of a very general bridge on how you plan to get there between higher growth, productivity, FX. So that would be really helpful.

And the second question relates more to a more holistic question on wound care. You obviously are in the middle of an unprecedented launch wave for new products in this category. So just curious how you are, let's say, prioritizing resource between ConvaNiox, ConvaFiber, ConvaVac and so on. So -- how you are handling that internally.

Okay. Thank you, Julien. I'll take the first question. So as I have said, our FX headwind at the operating margin level is concentrated in the first half. And so we are indicating that our first half margin will be flat on a constant currency basis versus the first half last year. And as normal, our margin continue to build as we progress through the year. It will ramp through the year and it will be supported by the delivery of our simplification and productivity initiatives, which are H2 weighted. As you know, we have significantly expanded margin over recent years strongly supported by our productivity initiatives, and they continue.

And then Jonny, are you going to pick up wound?

Yes, we're launching 5 new products at the moment in Wound Care, which is unprecedented in our business. But we have been planning for it for years. At the moment, 3 of those are in limited market release, which is relatively light in terms of commercial resources, focus on the technology and the operations resources at the moment. And then as sales build, the commercial resources will take more of the strain.

But as I said, we've been planning for it for ages, it's all going to plan as expected. No surprises there.

Your next question comes from the line of Veronika Dubajova of Citi.

I'm going to keep it to 2 as well. And I'm going to -- apologies, go back to the margins. I just really want to understand, I think if I look at the last 5 years, I think the spread between the first half and the second half normally from a profitability perspective, has been about 200 basis points. I think the guidance is implying 500.

Just help me understand, I'm having a really hard time bridging that gap from H1 to H2. So maybe is it gross margin that you'd expect to meaningfully improve in the back half? Or is it OpEx comes down? If you can just give us a little bit more because it's quite hard to see if I just look at the history of the margin progression of how you get to that 25% plus profitability in the back half of the year?

And then my second question is on InnovaMatrix. If I do the math correctly, and it's possible I've not done it correctly, but that's what I want to check. I think the 3.2% headwind to top line growth would imply that your run rate in the first half of the year, probably for InnovaMatrix is somewhere in the very low single-digit million, I think you did $39 million last year in H1. The 3.2% would be about $37 million. I just want to make sure that, that's indeed what you're seeing and that you are still comfortable with this assumption of the $20 million because that would -- you'd need to see some very substantial ramp there in the back half on that as well.

Veronika, look, let me take the InnovaMatrix one first. You're right. In the first half, it's low single-digit million sales. That's what we expected. That's what we initially built into our expectation of $20 million. So it's on track. Those expectations were built in the -- on the expectation that the market would be developing as the year goes by, that some of the higher cost players would be giving up on legal challenges and would be exiting the market. The practitioners would be getting back into the rhythm of prescribing these treatments with a new set of suppliers and that the sales would build through the year.

So that was our premise. And as I say, we're on track at the moment with the plan. But it is unusually uncertain. I think we have to admit, a lot has to happen for us to get to that $20 million. Will it happen in time? It might. But equally, it might not. So the $20 million, we've describe that as our best estimate for the time being. It might be more, it might be less. Let's see how quickly the market evolves. I think the important thing to retain is that this now is a very small part of our business. And whatever happens with InnovaMatrix, we are on track to deliver 5% to 7% growth for everything else. The 23% operating margin all in, including everything and also double-digit EPS growth all in, including everything.

And then, Veronika, thank you for your question about our margins. So I mean, I'm not going to go into all of the details of the margin building blocks for the remainder of the year. But we -- as I said, on a constant currency basis, we will be around flat year-on-year for the first half. Our revenue continues to build through the second half and will contribute to the margin expansion as will our simplification and productivity initiatives, which will support further margin expansion as we manage our OpEx. So we are on track to deliver at least 23% margin for the full year. And we can give more detail at the half year.

Your next question comes from the line of Susannah Ludwig of Bernstein.

I have a couple. I guess, starting with Infusion Care. Would you be able to provide relative growth rates over the first 4 months for your diabetes versus non-diabetes business? And then could you expand on your confidence in the H2 acceleration, I guess, to what degree is it orders and to what degree does capacity play a role? And then maybe just in terms of your double-digit guidance from 2027, how much is capacity playing a role there versus how much is it driven by the demand side and your order pipeline?

And then just finally on InnovaMatrix, obviously, there's been sort of a lot of disruption you've talked to the uncertainty in 2026. Could you talk a little to your more long-term outlook for that business?

Sure. Thanks, Susannah. I'll take those. On Infusion Care, 4 months, the pattern is similar to what it's been for the last few years that the other therapies are growing high -- well in the double digits, much stronger than diabetes. Diabetes itself is a high single-digit growth business for the year, it was a bit softer in the first 4 months because of the customer order phase as we described.

But for the full year, diabetes will be in the high single digits. And the other therapies are growing a bit faster.

Orders versus capacity, it's orders that's driving the faster growth in the second half and then also the double-digit growth from 2027. Capacity has to keep up. And that's why we've increased our CapEx to keep up with this growing demand. The new CapEx is starting to come on from summer this year and will be sufficient to support the faster growth in the second half. And then obviously, with double-digit growth each year, more capacity will be coming on stream in 2027 and 2028.

And then you asked about InnovaMatrix again. Look, we see 2026 as being the tough year. This -- as I just described, there's a lot going on in the market right now. It's shaking out. It's starting anyway to shake out. For us, it will be 1% of revenue this year, less than that. So it becomes less of a swing factor. It becomes one of many products contributing to our growth going forward. We do think it will grow in 2027 because the demand is out there and our technology works. So when CMS gets through its transition, to squeeze out the bad actors from this segment and to get the costs under control, we believe that the skin substitute segment will start to grow as the other segments in Wound Care do. So it will -- we're not expecting a return to the spectacular levels it used to be, but steady and strong growth from 2026 onwards is what we'd expect.

Your next question comes from the line of David Adlington of JPMorgan.

Most have been answered already, but maybe just coming back to innovators or rather skin substitutes. Can you remind us how much of sales historically have been in DFUs and VLUs and those patients now being treated with instead?

Historically, DFU and VLU has been the big majority, more than 3/4 of sales in that area. But last year, we started to look at diversification. We started to grow our business in dermatology, in Mohs surgery in other channels. And in the first 4 months of this year, those have been a much bigger proportion of the business because the DFU and VLU has shrunk right down. .

So in the first 4 months of this year, it was less than half. It's much smaller this year than it has been historically, if that answers your question.

Yes. So the question was, are you seeing any tailwinds in the rest of your business from these [indiscernible] products?

I'm sorry, I didn't quite catch that question. Did anyone catch that. Sorry, David, would you mind repeating that? I didn't quite get it.

Just in terms of -- have you seen any tailwinds to the rest of your Wound Care business as patients have switched away from Matrix to eventually other treatments?

I see. Tailwinds to other bits of the business. Not that we've seen or not that we'd expect. When ConvaNiox starts to get more traction, it has strong efficacy against infected diabetic foot ulcers. We're seeing that through trials at the moment. So certainly ConvaNiox might, in the future, start to pick up some of that segment. But no, unfortunately, at the moment, what we fear is that some patients who would genuinely benefit from access to this skin substitutes treatment aren't getting it. And that's why we think when the market transition plays through, we'll see demand start to grow again. .

I'd now like to hand the call back over to Jonny for closing remarks.

Well, listen, thanks very much, everybody, for your attention today. Very pleased just to summarize that we've got off to a good start for 2026. Obviously, it's challenging circumstances in the world right now, but this is a resilient business. The growth is broad-based, as we've mentioned, across lots of different products, categories, geographies. We're growing through it. And most importantly, our new product pipeline is working in the market gaining share. So very happy with how we're getting on. We look forward to updating you again at the half year. Thanks very much.

Thank you for attending this call. You may now disconnect.

Good afternoon. Welcome. I'm David Phillips, Head of Investor Relations here at ConvaTec. Can I just set some quick housekeeping rules for the day? And can I please ask that you switch your phones off or put on silent. In 30 minutes, we will split into 4 groups for the category breakout sessions, which are across the corridor. This will bring the best of ConvaTec to life. Prerecorded videos of these -- some of the presentations are online for those who are watching on the webcast. To enable us to keep the time today, we would respectfully ask if you keep your questions until the end. We're ample time and then all of the presenters and guests will be in the atrium and able to speak.

We now have a very short video to introduce Accelerand then Johnny will begin. So thank you very much and lights out.

Okay. Hello, everybody. Mic working? Good. Welcome to ConvaTec's Capital Markets Day. I hope you had a sense from that short video of the excitement that there is at Convatec at the moment. It's a very special company with a deep sense of purpose. There were some difficult years in the run-up to and around the IPO, but that's all in the past. You will hear today how the FISBE strategy has rebuilt Convatec to be a stronger business and how we are now ready to accelerate.

Our vision of pioneering trusted medical solutions to improve lives we touch, resonates across the teams in the organization. We support people living with difficult chronic conditions, excuse me. And that's what leads to our brand promise of Forever Caring. For many in the organization, this is personal as well as professional, including me. I was one of 4 siblings. I am one of 4 siblings. The other 3 have diabetes, and they use Convatec products every day. That's quite common in the organization. And this personal dimension drives people on to do even more to improve what we do.

And it's one of the reasons why we rank in the top decile for colleague engagement among all of the companies measured. Usual disclaimer.

So here's what we're doing today. It's a -- we've got a real treat for you. I'm going to start with the description of the evolution of the strategy. Then we'll break out, as David mentioned, into 4 groups and rotate around the 4 categories, where you'll meet the category leaders, you'll see the products up close, you'll speak to users and health care professionals. Then we'll -- and for those online, I should say, there are prerecorded videos one for each category to follow. Then we'll reconvene here in the room and online at 4:20. And you'll hear from Divakar about innovation and what comes next in our pipeline. And you'll hear from Fiona about what it all adds up to. And then I'll finish off with how we're going to make sure we deliver all of this. There'll be plenty of time for questions, and the whole team will retire to the atrium if you want to keep the conversation going afterwards. Sounds good.

Here's the executive leadership team who are here today. I've mentioned that Fiona, Divakar and I will present in this room Tanja, Bruno, Mark and [indiscernible] will be leading their category presentations in the breakout rooms. And then Emma Eve and David will join us for Q&A afterwards. You're going to meet other colleagues today as well in the breakout rooms, knowledgeable, experienced, these with other colleagues are the ones who have driven the turnaround of Convatec and who have got us into a position now where we're ready to accelerate. So do make sure to ask them questions I was going to say, but David might control you back here. Yes.

To cut to the chase, if you are to remember only 3 things from today, first, that would be a shame. But here is what we suggest they are. First of all, Convatec operates in large and growing markets. We have strong leadership positions as 1 of only a few global players and they are very high levels of recurring revenue in these categories. Secondly, ConvaTec is a strong business. It has successfully turned around RECONNECT with the Visp strategy. We've built new expertise business is more resilient based on diversified and broad-based growth. and we are delivering sustainable and profitable growth now. But then the opportunity ahead is very substantial. Demand is growing. It's strong and it's growing. Our new products are working. We're getting positive feedback from health care professionals and from patients, and they are winning share. We're investing to meet that growth -- and we've got a good and detailed plan that you're going to hear about today and a strong team to deliver the plan. Those are the 3. The only 3 things you need to remember. But please look for more. So let's get into it. Here we are. I'll start with a quick recap of what is ConvaTec. So we are focused on chronic care categories, which you can see on the screen. These categories are large and they're growing. They share characteristics of requiring high volumes of high-quality consumable medical devices. Care for the patient is important and all of our products touch the skin. We're going to get to that. shortly. These categories are growing because the population is increasing. The population is getting older. The incidence of the diseases that causes these chronic conditions is increasing, and people are living longer with the chronic conditions. So these macro trends that underlie the structural growth are here to stay. And these 4 categories fit well together. All our products touch the skin. So our scientists are looking at polymers and Adesis for development of new products across all categories. All of the products are consumable, and we, therefore, are designing for high volumes at high quality. They're all chronic conditions. So we are offering training and education to health care professionals about how to use these devices best. And increasingly, we are generating and disseminating more clinical evidence to demonstrate the value of these products. And these products are all used repeatedly by people with quite difficult conditions. So we have a range of different ways that we offer service and support to the people who use our devices. All of these areas of expertise apply across all 4 categories. They make it hard for others to do what we do, and they provide a real competitive advantage. It's by delivering value across the continuum of care that we ensure the growth...

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I'm Tanya Dormels, President of Advanced Wound Care. I'm very proud to lead Advanced Wound Care at a time when we have such an exciting new product pipeline. I joined Convatec in 2019 after almost 20 years in health care, primarily with Novartis. At Convatec, I've had the opportunity to run Advanced Wound Care Europe, and lead the development of Convatec's groundbreaking platform, ConvaNiox. What has kept me in health care for my entire career is very simple. Knowing that the work we do has a real impact on people's lives. I'm delighted to share how advanced Wound Care has strengthened with FISBE and why we are now ready to accelerate. We are increasing our advanced wound care sales targets to high single-digit growth from 2028 driven by scaling up our product launches.

The advanced wound care market is driven by structural drivers like increased prevalence of diabetes and vascular disease and improving access to health care globally. In addition, people suffering from chronic wounds are getting younger, they live longer with chronic warns as they are diagnosed earlier. Hard to hear ones are one of the most severe disease burden in health care for patients, providers and payers for U.S. health care cost is second only to cancer. This creates incentives to adapt advanced solutions to improve outcomes and reduce total cost of care. We are focused on severe chronic conditions including diabetic foot ulcers, venous like ulcers and pressure injuries, affecting up to 100 million people globally. These wounds are often associated with infections, frequent recurrence and high mortality rates, which can exceed many cancers. Reinforcing the need for effective treatment strategies. The Advanced Wound Care market is large. Valued at $6 billion globally and growing around 6% every year. Our portfolio spends all 4 major segments: antimicrobials and fibers form single-use negative pressure wound therapy and biologics.

We provide high-quality solutions for over 10 million people annually. While the market is competitive and subject to reimbursement dynamics, a diversified portfolio across indications, technologies and geographies supports a predictable, resilient growth, strong customer relationships matter.

Looking at our key segments, Convatec invented hydrofiber dressing technology 30 years ago. Our [ Akasa ] brand is the global leader in silver-based anti-micro bills with around 30% share. Since launch, we have sold nearly 1.5 billion AQUACEL dressings. Looking back, in 2020, we were specialized in a single segment and our growth was entirely reliant on AQUACEL Ag+ Extra. FISBE has strengthened our business. Today, we are active across all 4 key segments, and we have created positive momentum. We continue to leverage our leadership position in antimicrobials, anchored by the AQUACEL platform. It remains our cornerstone franchise with over $300 million revenue every year. Under FISBE, AQUACEL been further strengthened. We have demonstrated clinical superiority and published the only randomized controlled trial in antimicrobials for AQUACEL Ag+ Extra. This has resulted in strong adoption and repeat use.

Health economic evidence has demonstrated reduction in overall cost of care driven by faster healing few dressing changes and reduced clinician visits. FISBE has reduced reliance on a single growth engine. We have strengthened key capabilities clinical evidence generation and launch execution, underpinning sustainable growth. Our pipeline is the richest in our history and arguably in the industry. Five products will fuel our growth acceleration, and we will raise the standard of care. We are not reliant on any single product or reimbursement pathway.

As shown on this slide, product differentiation increases from left to right. Starting with ConvaFiber. This is an upgrade of our non-silver hydro fiber platform. Lab tests confirm 45% improved solvency and better conformability to the wound bed. ConvaFiber also supports positive margin progression. Moving on. ConvaFoam receives excellent customer feedback, and I will present a case study shortly. ConvaVAC is starting to launch in Europe. This is a competitive product in the fast-growing segment of single-use negative pressure wound therapy. ConvaVAC offers a differentiated proposition. It is enabled by our Hydrofiber dressing technology, and we are also planning a silver-based dressing, allowing us to uniquely address both exodate management and infection risk within approved indications. InnovaMatrix expanded our presence in skin substitutes with a placental-derived extracellular matrix. Its efficacy is supported by growing real-world evidence, which demonstrates clinically meaning for wound closure in complex real-world populations. Our randomized controlled trials are on track to publish in 2026. There was a disruption in this segment over the last couple of years. CMS seeks to address disproportionate cost increases, but that seems settled now. We expect $20 million of revenue in 2026 and to grow from there. We are excited about the prospects for ConvaNiox. I have a separate slide on it, too.

This support is pipeline with clinical education, our Vonti team protocol, a 4-step approach to treating bonds. Over 200,000 health care professionals have been trained, and it has been widely adopted by clinicians globally. ConfaFoam exemplifies our ability to design, manufacture and scale differentiated solutions. Firstly, launched in 2023 ConfaFoam delivers high absorbency and effective exudate management. Key elements of differentiation include consistent performance across wound types longer wear time requiring fewer dressing changes and improved patient experience. New clinical data underlines ConfaFoam's role in pressure injury prevention and management. Superior micro climate and moisture handling supports skin protection and reduces tissue stress. ConfaFoam has positive momentum in the $2.3 billion form segment. Globally, our share has increased by about 1 percentage points to around 6%. And as customers choose our product and we leverage existing customer relationships.

We are well positioned to extend this momentum with multiyear share gain potential. We see a 10% global form share is a realistic initial target over the next few years. To put us into context, a 1% ConfaFoam share gain equates to about 3% on Advanced Wound Care growth and 1% on group growth.

ConvaNiox is a first of its kind nitric oxide generating multimodal dressing, and we aim to create a new segment. It has a significant potential for life-changing impact for those suffering from diabetic futizers. Data from a randomized control trial showed that 60% more ulcers were healed within 12 weeks of treatment with ConvaNiox compared to standard of care. Wound error reduction is 3x faster. We are currently focused on gathering further clinical evidence, including a randomized controlled trial in the U.S. Over 250 patients have already been treated with ConvaNiox in Europe.

Sales will build gradually. However, our early clinical experience in the hospital setting gives us great confidence that sales will accelerate once community reimbursement is achieved. We are now ready to accelerate. Our markets are structurally attractive with durable growth drivers and significant unmet patient needs. We will accelerate by delivering our strategic priorities. Firstly, scaling up our rich pipeline of innovative new products; second, further improving execution excellence to deepen customer relationships and loyalty; thirdly, creating a new category in Advanced Wound Care with our groundbreaking ConvaNiox product.

Together, these actions will deliver our medium-term target of sustainable, high single-digit revenue growth. Thank you.

Hello. My name is Bruno Pinheiro and I have spent my entire career in Ostomy care. I joined Convatec working sales. And over the last 21 years, I have led sales teams launched our Convatec clinics, run our Latin America and Asia businesses and I'm now leading our Ostomy Care business globally. That experience shaped everything I believe about this business. You have to understand the patients, their journey and the importance of trust. When I took over this category, we're losing share. Today, we are growing faster than our markets winning back trust in setting new standards in Ostomy Care. We have positive momentum and a clear path towards our target of mid- to high single-digit growth.

And while we are focused on delivering growth, what really drives me is the positive impact we have on people's lives. Ostomy Care is a structurally attractive chronic care market with recurring revenues, high customer lifetime value and strong patient loyalty. The global market is growing at approximately 4% supported by demographic megatrends driving volumes and faster-growing segments, such as convexity and accessories driving mix.

On the megatrends, there is increased prevalence of colorectal cancer, Crohn's disease, ulcerative colitis and bladder cancer. At the same time, populations are aging and giving advances in treatments, people are leaving longer fuller lives with stomas. Health care systems continue to shift out of hospitals and into the community, generating a growing demand for products that enable confidence independence and quality of life outside acute setting.

And this is one of the reasons our hospital to home strategy is effective. Emerging markets are becoming an important source of growth particularly as access improves and care pathways professionalize. Adding more colors, the category is consolidated with 3 global leaders representing approximately 85% of total market with a well-established dynamic. Success rewards those who win early support consistently and lead clinically. Combined, these factors under being a large, resilient and growing Ostomy care market. Core to our fees strategy for Ostomy Care was a portfolio refresh. We began with a decisive portfolio simplification, removing approximately 40% of SKUs. This reduced complexity and cost improved supply reliability and sharpened focus for clinicians, patients and quite frankly, for our teams.

This was a strategic reset that created the foundation for scalable innovation. In tandem, we fundamentally changed how we compete. Prior to FISBE, we lacked rigor in the fundamentals of selling quality and inventory challenges weakened our credibility, innovation lagged, and we were excluded from key GPO contracts in the U.S. acute market.

Then we have focused on clinical evidence and on partnering with leading societies. And as a result, our evidence-based approach is transforming how we are viewed in the market. And now we are helping to elevate the standard of ostomy care globally. While these actions were not easy, we emerged with a much clear portfolio stronger clinical credibility in a highly scalable growth platform. The most profound change in our performance has been commercial execution. We have moved from a transactional product-centric model to a clinically led relationship-based approach, acting as a market thought leaders and a clinical partner.

Today, we engage differently. With health care professionals, we are leading with science, education and outcomes, particularly in acute care, where long-term pathways are established. We have taken responsibility for elevating the standard of care, doubling down clinical evidence in areas that matter most, like soft convexity, adhesive technology and [indiscernible] health. This approach has delivered tangible results. We have secured our first 2 GPO contracts in 5 years, giving us the ability to compete for an additional 40,000 procedures annually in the U.S. Or roughly 1/3 of the market.

With patients, we support the full journey. Especially through the critical transition from hospital to home. We have an excellent patient support service called me+, which drives strong customer satisfaction and loyalty. This combines with our home services group, which is our fastest-growing sales channel. This shift from transactions to trust has deepened relationships improved evidence and outcomes, it increased lifetime value. We have successfully moved Ostomy Care from discrete sales to enduring relationships. And I believe this is exactly what a chronic care model should be.

This is our future state portfolio, and we are well advanced on the journey to get there. We have simplified the plus line, progressed the rebranding of a center and took our first step into the premium body platform with the successful launch of Esteem Body. Just noticed that each move is intentional and aligned with our strategy. We are positioning this portfolio to compete and gain share in higher growth segments in ostomy care, convexity and accessories.

By 2030, soft convexity and accessories will represent half of the total ostomy care market. Soft convexity is the fastest-growing segment growing at double-digit rate. Our portfolio and commercial reset created a foundation for meaningful innovation. Esteem Body is the clearest proof point.

On the business side, in just 2 years, it has delivered high single-digit market share. It is our first new Ostomy product in more than a decade built on an entirely new platform. Equally important, independent market research across the U.S., Italy and Germany, confirmed a strong preference for Esteem Body among both health care professionals and patients. In this research, 3% of HCPs, the convexity design meets clinical needs and 95% of patients report high comfort, confidence and wear performance. Great start for steam body, and this is exactly the platform we will leverage for Natura Body, giving us strong confidence in our ability to scale premium innovation. Our team is energized, proving that when you build solid foundations, innovation can truly scale.

Our strategy to accelerate growth is rooted in care. Supporting health care professionals and patients across the full continuum. Starting the relationship in the acute setting and then continuing to support patients throughout their journey with a stoma is our long-term loyalty and lifetime value are built. Our strategy is clear: be the preferred partner for health care providers so you can win new patients in the hospital and our loyalty across the full continuum of care. We do this by supporting HCPs and patients from day 1 with innovative, high-quality products designed to prevent leaks and promote healthy skin.

We extended that support beyond the hospital through our me+ patient support program. With our me+, we are strengthening engagement across acute, post-acute and community setting, ensuring continuity of care and frictionless experience for patients. [indiscernible] to assess supplies and navigate insurance and reimbursement. Together, this integrated ecosystem drives loyalty and long-term retention. Our goal is simple but powerful, to build lifelong relationships that help people living with stoma remain confident, independent and supported at every stage of their journey from hospital to home.

As you can see, we are now ready to accelerate Ostomy Care has moved from turnaround to delivery to acceleration. Since our last Capital Markets Day, the market has continued to grow, supported by durable mega trends but we are fundamentally a different business. We are ready to accelerate and deliver customer-focused growth with a clear line of sight to meet to high single-digit growth. And to achieve that, we have 3 priorities: first, leverage our innovative and expanding portfolio led by the new body platform, Esteem Body and Natura Body; second, support health care professionals and patients across the full continuum of care, leading to lasting relationships via me+ and Home Services group; and third, execute and elevate the standards of care across the industry with differentiated clinically led solutions.

This is our strategy, and this is our belief. We are highly motivated by our progress, and I'm pretty sure our best days are yet to come. Thank you.

Hello. I'm Mark Jassey, and I have the privilege of leading our Continence Care and Home Services Group since 2024. And I'm in my 19th year working in Continence Care, having started my career at 180 Medical, which joined Convatec in 2012.

Let me start by sharing a quick story. Two years into my career, friends of mine found out they were pregnant and soon learned their son would be born with [indiscernible], a neural tube defect that often requires self catheterization. You can imagine the shock. Soon after Fin was born, I had the opportunity to personally problem solve, support, educate and take care of their needs. It was a watershed moment for me. Everyone in the world deserves that level of support, access and care, not just someone who happened to be a friend of mine. So I dedicated my career to making that happen. I've had the pleasure of holding roles covering nearly every aspect of our customers' journey from product to support. It is my genuine pleasure to present our story today.

Every year, our team serves over 200,000 people who rely on us for support, guidance and expertise and to supply over 150 million intermittent catheters worldwide. Demand for our products is growing, underpinned by structural trends like aging populations and rising rates of urologic conditions like neurogenic bladder, spinal cord injuries and multiple sclerosis. Improving products, better diagnosis, home-based care, reduced stigma and expanding health care access in emerging markets are all driving growth.

We are the leaders in the U.S. the largest global market projected to grow around 4% annually. Outside the U.S., markets like Germany, Italy, France and U.K. are also forecasted to grow around 4% and with emerging markets growing faster. FISBE has strengthened our business. At our last Capital Markets Day, we said we would deliver mid-single-digit growth via leveraging service excellence. broaden our product portfolio and growing outside the U.S. We have delivered strongly against these objectives, evidenced by our organic revenue growth of 7%. The U.S. remains our largest market by far, and we grew faster than the market, extending our leadership position.

We broadened our portfolio, driving the shift to hydrophilic catheters. We successfully launched GentleCath Air for Women, our female compact catheter. This brought our proprietary differentiated fuel clean technology into a discrete form factor. The launch also helped grow our customer base outside the U.S. Our small positions in U.K., France and Italy have strengthened rate direct-to-consumer care businesses. These improvements demonstrates strong execution of our FISBE strategy, Accelerate. So let me explain how.

We continue to see strong growth opportunities in the U.S. and Medical, our direct-to-patient company is the #1 rated U.S. medical supply business on Trustpilot with a 4.9 rating out of 5 from over 13,000 individual reviews. We enjoy a Net Promoter Score over 80, which is world-class and above well-known brands like Netflix, Amazon and Apple. Research indicates more than 1/3 of all adults find it difficult to understand what health insurance will and will not cover and over half of adults with a chronic condition had a denial or a delay for an insurance claim. This is a real frustration for patients. 180 Medical delivers outstanding service across the customer journey, obtaining prescriptions, navigating the complex health insurance landscape, filing claims, delivering supplies to the patient's door at no upfront cost, all the while providing education and emotional support. No other company has the same capability and specialization to truly understand our customers' unique needs and support them.

We have a leading payer network offering covering over 90% of the U.S. population. The market is complex with Medicare, Medicaid and thousands of insurance companies participating. Our world-class service is underpinned by a proprietary purpose-built platform designed specifically for reimbursement complexity. By owning the code base, we can continuously upgrade, for example, embedding AI-driven decision support, workflow automation and real-time insights directly into the frontline process. Creating a customer experience, competitors cannot easily replicate. It allows us to deliver a fundamentally differentiated customer experience at scale.

This combination of emotional support to patients, clinical trust and administrative simplicity underpin our reoccurring revenue growth. As a result, we are trusted by roughly 45% of all catheter users in the U.S., together with the benefits of our broadened portfolio, our attractive products are enabling us to grow our manufacturing share and increase the proportion of Convatec manufactured products in our sales mix, which is a significant benefit to gross margin.

Since 2022, this mix has increased from around 54% to 59% and as more customers choose the differentiated technology we provide. With a 99% retention rate in our base, our customers trust and rely on on offering throughout their entire care journey, which for many, just like Fin could be their entire lives.

As previously reported, CMS has proposed a competitive bidding process for Medicare Ostomy and Continence products. If this comes into force, we have previously guided to a group revenue impact of 1% to 2% in the year of implementation, which should be no earlier than 2028. 180 Medical is well positioned to grow and compete in these segments as the leading integrated provider with outstanding customer service and the ambition, capability and expertise to deliver this to customers.

We have 2 key brands. Cure, which is our value catheter range and GentleCath, our premium hydrophilic range. Cure offers a wide portfolio that is easily accessible, reimbursement friendly and a strong U.S. heritage. GentleCath contains our next-generation PVP free field clean technology based on proprietary polymers that is a key differentiator for our premium hydrophilic offering. Our 2025 ex vivo study demonstrated that field clean technology causes up to 53% less urethral damage than the leading PVP coded hydrophilic catheter. This is backed up by strong patient feedback with 96% of new catheter users who responded stating that they would recommend GentleCath Air for Women with full clean technology to other women. This is meaningful in a category where scientific evidence matters.

Looking at the key segments, the Compact segment, which is a significant portion of the European market will be the fastest growing at 7%. Our recently launched and launching products, GentleCath Air for Women and GentleCath Air pocket in that are expected to take share in this compact segment. Our broadening portfolio, proprietary systems and strong culture are helping to drive our patient-facing services in Europe and the rest of the world.

We are taking our best-in-class U.S. knowledge and technology infrastructure and combining it with local market expertise to enable our geographic expansion. From a low base, we added over 1 percentage point of category growth in 2024 and 2025. We have a potential to grow even faster, aiming to accelerate to 2 percentage points of category growth in the coming years. GentleCath Air for Women has enabled our successful entry into the female compact segment, clear clinical differentiation, strong health care provider engagement and effective channel execution supported by compelling patient advocacy has translated into strong uptake in the fast-growing compact segment, particularly in Europe and is shaping our broader compact launch strategy.

Our male and closed system pocket versions, GentleCath Air Pocket and SET and the standard ready-to-use Cure aqua hydrophilic catheter are all launching later this year, subject to regulatory clearance. From 2027, I'm excited to say we will be ready to compete with a full product portfolio in Europe.

So in conclusion, we are evolving to be a more differentiated business. Better positioned to deliver long-term sustainable growth. We are ready to accelerate, and we are increasing our revenue growth guidance to mid- to high single-digit sales growth in Continence Care over the next strategic period. This will be driven by 3 main things, customer focused growth, driving further U.S. expansion with a world-class connected ecosystem of service, product and support and accelerate our growth outside the U.S., supported by our new products. Technology, fully leveraging our product portfolio, including innovative, recent and upcoming launches. Execution excellence, in the implementation of our proven service model in the U.S. and beyond. This will allow us to fulfill our forever carrying promise and serve more end users just like my friend Fin. Thank you.

Hello. I'm Kjersti Grimsrud, President of Convatech Infusion Care. I met some of you at our last Capital Markets Day in 2022. I've been with Covatech for more than 8 years. Joining in 2018 as President of Europe, Middle East, and followed by 2 years leading continence care. For the last 4 years, I have been leading Infusion Care. I've spent more than 3 decades working in diagnostics and medical devices, primarily with a focus on diabetes. Diabetes is very personal for me. I have 2 daughters, one of whom was diagnosed with type 1 diabetes at the age of 7. So this area has been close to my heart, personally and professionally for a very long time.

Infusion Care has delivered significant growth through the FISBE strategy period, and I will present how we are now ready to accelerate. We currently operate in 2 main markets, diabetes and Parkinson's disease with smaller positions in immunoglobulin therapy and pain management. Automated insulin delivery in diabetes is a long-term growth and penetration story. There are approximately 370 million people living the diabetes worldwide, of whom around 10% need to take insulin exogenously. With this group, fewer than 3 million are currently using pumps with nearly 34 million using multiple daily injections, based on published estimates.

So there is substantial headroom for automated insulin delivery to continue to penetrate the market. This trend has accelerated following significant advancements in pumps, continuous glucose monitors and the delivery algorithm. It is now widely recognized to provide improved clinical outcome for most intensive insulin users. Our products are integral to replacing multiple daily injections with pump therapy. Type 1 diabetes is a chronic autoimmune disease in which the body's immune system destroys the insulin producing better cells of the pancreas.

As a result, People with type 1 produced little or no insulin and require lifelong insulin therapy from diagnosis. And while GLP-1s represent great advancement for some patients living with type 2 diabetes, they often do not eliminate a type 2 diabetics need for insulin therapy. And unfortunately, GLP-1 cannot replace the need for insulin in type 1 diabetes.

Our infusion sets are a key part of the system and demand will continue to grow as pump penetration increases by at least 8% per annum in the next 5 years. Diversification into new therapies is a key part of our strategy, and the application of our solutions extend beyond diabetes. Parkinson is the strongest example of this in Infusion Care, and our growth was excellent in 2025. Parkinson's disease is a debilitating chronic condition impacting over 10 million people worldwide with significant unmet needs. It is a disease with no cure, with limited understanding around pathology and patients often live for many years with progressively challenging symptoms.

The market is now entering a new phase. A recently launched subcutaneous therapy for advanced patients, combined with infusion delivery solutions from Convatec, is driving a very strong incremental growth. non-diabetes revenue increased from 10% of our Infusion Care sales mix in 2024 to 15% in 2025. We are in the early stages of pump production. With penetration still very low. We expect strong growth to continue for some time. Our markets are growing. Increasing penetration means this growth is long term, and our growth is broadening as we diversify customers and therapies.

FISBE has strengthened our business. Over the past 5 years, Infusion Care has delivered sales CAGR of just over 10%. In diabetes, as pump technology improves, we expect pumps to continue to gain share for the long term. This will drive high single-digit growth for our diabetes business. And we continue to diversify within diabetes and partner with leading manufacturers, MiniMed formerly Medtronic, Tandem Diabetes, Beta Bionics and mylife Diabetes formerly [ Ypsomed ].

In 2022, we had a very small direct business outside of diabetes in areas like pain relief, immunoglobulin deficiencies and Parkinson's disease drugs in Europe. Since then, revenue from these new therapies has tripled. We have delivered above category growth in all our non-diabetes therapies, but I'm especially proud of our progress in Parkinson's disease. We are a key partner with AbbVie supporting their revolutionary Parkinson's disease drug, [indiscernible], where we recently extended our exclusive long-term supply contract. We are also supporting 2 other Parkinson treatments [indiscernible] launched last year with apomorphine in the U.S., and [indiscernible] Pharma is expected to launch their new drug in Europe this year. This means that we will be the sole infusion supplier to the 3 main suppliers of advanced Parkinson's treatment by the end of 2026.

I expect non-diabetes growth to be double digit for the next few years and to increase within our sales mix. We are the clear global leader for infusion sets. Our research design and manufacturing expertise makes us a partner of choice. We have worked with partners in the B2B setting for over 20 years. With our new Accelerate strategy, this will ensure strong focus on our customers with the offering of new technology as well as added capacity, both underpinned by a very collaborative cross-functional team. Our scale of technology, of our portfolio and unwavering focus on customers in a B2B setting puts us in a strong and leading position again and again as the partner of choice for infusion sets.

Our infusion set support over 1.4 million patients and growing every year. Demand for our product is very high. Last year, we produced well over 100 million infusion sets for different customers and therapies. We are investing significantly with growth CapEx to build new production lines. This will significantly increase our capacity over the next few years and this investment is underwritten by long-term customer contracts. In diabetes, the infusion set is part of an automated insulin delivery system designed to simulate the pancreas. This consists of a PAM, a smart algorithm, a continuous glucose monitor and an infusion set, in many cases, linked by smartphone.

Our infusion sets are designed to be effortless to use. But that simplicity is powered by some very serious engineering inside the set, there are multiple high precision molded parts working in unison. We have created an architecture that is robust in the field and optimize for high-velocity manufacturing. We are selling solutions with time for manufacturer that allow us to win in the market. And this is very hard for others to replicate.

Our ability to manufacture at scale and high quality is a key competitive advantage. We have designed highly scalable platforms with capacity fungible between customers. We are the only supplier offering the full range of infusion sets in the market. Our portfolio covers steel needles, soft canolas, 90-degree and angle degree sets. And all that comes with a range of tubing length to cater for different user needs and lifestyles. We are investing to meet significant long-term demand in the market. We do not expect to win all business and some backward integration to in-house supply by customers may occur, but we are also seeing manufacturers with in-house capabilities seeking more supply through us as our product portfolio is broad and unique, high quality and good value.

A key market development is the many different form factors in the pumps being launched or announced in the next couple of years. The pack segment is currently outgrowing durable pumps, but the lines between patch and durable pumps are blurring. Variability and adaptability are key user factors. And there are many benefits of a durable pump. Our infusion sets have the potential to support pumps across the technology spectrum. The insert mechanism, the needle the soft cannula and the adhesive are all parts that can serve the same purpose in, for example, a hybrid patch.

Also, recent changes like monthly pump contracts and pharmacy distribution are making adoption easier. This is likely to increase type 2 penetration, and we look forward to supporting new customers in that segment.

In conclusion, I'm very proud of Convatec Infusion Care business and the dedicated and talented colleagues who deliver for our customers every day. We have delivered fast growth through the FISBE strategy period, and we are confident that we are now ready to accelerate to deliver further customer-focused growth. We are investing in substantial additional capacity with fully automated state-of-the-art production. We started this expansion in 2024 and expect our first new lines to be on stream in 2027, with further new capacity in 2028. Our platforms are scalable, and we are investing in innovation to drive growth in new therapies. From 2027 we will sustainably deliver our medium-term target of double-digit revenue growth. Thank you.

[Break]

[indiscernible] faces, happy to see you all. I've been with Convatec for just over 6 years and -- joined in early 2020 as Chief Technology Officer, Head of R&D. And more broadly, I've had about 3 decades of experience in health care, spanning biotech medicines, drug delivery systems and medical devices, all in chronic care across R&D and manufacturing science.

What I would like to do this afternoon is cover really how we are accelerating forever caring through pioneering innovation. And more importantly, why I believe that innovation now is a repeatable engine, not just a set of one-off wins. So I'll cover three things today in my presentation. First, our innovation mindset and the capabilities with Second is the evidence and the portfolio output from the tools -- ways of innovation Jonny talked about. And finally the third one is really about how this next wave after that -- that we call Wave 3, extends this repeatable engine into higher value and more differentiated growth for the company.

So let me start with the mindset first. So our innovation mindset really starts with the reality of chronic care. We design for people with chronic conditions, not just as patients. That means user-centric design is a core guiding principle for us and a mindset across the entire organization, including R&D. The second one is we build single-use products, which require design for high volume and design for high quality from day 1. And finally our output here also relies on deep scientific depth. And that depth spans 3 particular areas that span all 4 categories. First is skin material interfaces, second is tissue repair and healing and third is infection prevention.

So eventually the output becomes more than just products alone. If we generate products enabled by digitally enabled tools, education and services, not as add-ons but as integrated solutions. And finally, what I would like to say is the key point I'm trying to convey here is leverage, we build knowledge once and reuse it across the categories. So this allows in my mind innovation to scale, not fragment.

So let me go into investment and output. We increased over the several years, what I would say is first, we roughly doubled R&D as a percent of sales since 2019. Second, in terms of capability, you can see on the slide, there are at least 5 capability areas, clinical evidence, reimbursement, regulatory, design for manufacturing and user center design. Plus, we broadened out our leadership bench with deep expertise.

What this has resulted is a significant input -- significant output in terms of the number of clinical trials, publications and patents filed, and you can see them on the slide there. And most importantly, that has allowed us to launch 8 products in the last 3 years and another 8 in the next 2 starting this year. And we also achieved what I believe is a watermark level in terms of 30% of revenues were generated from new products as of 2024. So this is no longer a rebuild of our innovation engine. It's a durable operating model. And now let me double click into one area that shows our mindset shift, which is generating clinical evidence.

This has been a defining shift because of our ownership of clinical evidences not just as validation at the end, but it's a core design input of our key scientific platforms that we would like to use in future products. Today we are running over 30 studies, as you have seen on the graph, of which several are actually randomized control studies. The slide here shows the middle and the right columns show an example from a large randomized controlled trial that we published about this time last year. It was run across three countries, Colombia, it was run in the UK and Germany. And in 203 patients, the AquaCell AG+ platform demonstrated a significantly higher likelihood of complete wound closure and faster healing. The point of this is not just to rattle out statistics, to me it's really about two things.

First, it's a cultural shift towards measuring outcome, not just activity. Second, it's having our homework graded. When I mean homework, I mean the innovation homework, graded by rigorous clinical studies. And third, this level of evidence strengthens regulatory pathways, accelerates adoption, supports reimbursement, and reinforces opinion positioning. And what this does for us is turns this innovation into a durable value. So that's why I thought to show this example.

Now I want to show you the tangible output we have been able to generate in terms of our innovation system, which we refer to as Wave 1 and Wave 2, okay? We've launched 8 products between 2022 and 2025, and we have 8 more on track between '26 and '27. Key point to observe it spans all 4 business categories, and we have done it with disciplined global sequencing. These are also not incremental or catch-up launches, yeah? They are purpose-built, clinically relevant solutions, designed around real unmet needs. They have integrated user insight, high volume design for manufacturing, and increasingly, we have started integrating digital and service components into these product launches.

Just to put it in context, we had one-off product launches when I started 2020, really good launches, but they were one-off. Now what we see is repeatable and continuous cadence of innovation across all 4 categories.

What I would like to do is show you how the portfolio has evolved from 2022 to now. What you'll see is back in 2022 across all 4 categories, we had a suboptimal and narrow portfolio across the categories. Let me start with wound care. In wound care, we have now expanded and strengthened the platform depth across 5 technology platforms. And we are now creating a new category, as Tanja mentioned in terms of a category to target hard-to-heal wounds with our nitric oxide powered multimodal platform.

Second, in Infusion Care, we have diversified two additional partners in diabetes. And we have also, as Kjersti mentioned, we have gone into fast-growing new therapy areas such as Parkinson's. And finally, in Ostomy and Continence, what you'll see in the graph is we have shifted from more premium -- into more premium differentiated solutions now being supported by digital tools also. So the takeaway here is we have a broader, stronger and more differentiated portfolio that is continuously being refreshed.

Let me showcase 3 examples for you, ConvaFoam. ConvaFoam, this is a highly technical multilayer foam dressing as you saw. It has about 5 layers. And so it's quite exquisite in terms of both the design and the manufacturing know-how. But what was particularly unique about it was it was designed around the clinical workflow. Nurses can peel open the dressing, inspect the wound and replace or reposition it without wasting the product. So saving time, reducing waste and improving clinical care delivery.

Second, I want to go to our nitric oxide powered multimodal dressing. We already have compelling randomized clinical trial evidence in diabetic foot ulcers. And now I'm proud to share with you that we have additional data in venous ulcers, supporting what we believe will be a new way to manage hard-to-heal wounds. Given the novelty of the technology, we plan to pursue the FDA de novo pathway for U.S., alongside new clinical and health economic studies to maximize market access, adoption and premium pricing opportunities.

And finally, I also wanted to mention what Esteem Body that you saw. This product combines user-center design for discretion along with soft convexity, improving fit and leak confidence. And this is being able to be provided across different body shapes and stomatypes. What's been most powerful to me is the real-world feedback we've gotten. People with chronic conditions such as Sara that some of you might have missed in the room, right, tell us that they've been able to sleep uninterrupted for the first time in over a decade because of some of the design features we put in such as the filter.

Together, I hope you take away these examples show you how we have taken science, evidence and human-centered design to create durable differentiation. So that's where we are today. Now let me pivot to what the future brings. This is what Johnny referred to as Wave 3. It represents our next horizon of value creation. The strategy here, as you can see, is to maximize our internal manufacturing platforms, leverage the proprietary science across all 4 categories and back it up with clinical validation.

The examples here that you see next-generation ConvaFoam and next-generation FeelClean catheters, right? One is in wound care, the other is in Continence care. Both will leverage our proprietary infection prevention science platforms. We're also looking at a next-generation product based on the science of ConvaMax, okay? And we are going to go after more wound types and other indications based on the compelling scientific data we are seeing so far with this scientific platform.

In ostomy, we intend to further build on our gold standard adhesives and accessories, which are quite sought out already with proprietary scientific solutions to reduce peristomal skin complications.

And now let me go to infusion care. In the world of infusion care, we are seeing two big trends. Intravenous therapies are increasingly shifting from the hospital to the home via subcutaneous delivery solutions. At the same time, newer biotech medicines such as bispecific antibodies are beginning to require higher volumes or higher concentrations. Both these are driving our next-generation neria guard innovation for high-dose biologics. And what's unique about it is we intend to leverage our existing manufacturing platform and proprietary technologies to do this.

So in summary, Wave 3 reflects a deliberate move on our part to go towards higher growth, stronger differentiation and attractive new segments, all of which will also represent better economics. Equally, you will note that Wave 3 is predominantly organic, built on platforms we already have invested in, while we remain open to external innovation by way of partnerships or deals if they accelerate our road map or help access new technology bolt-ons.

So now let me shift to our innovation operating system. As innovation output has increased for us, so has our ability to execute predictably and at scale. First, we have embedded design for manufacturing, both in terms of advanced operations in our global operations team and process development expertise in R&D. What this has done is it has enabled reliable high-volume production. And as a result, we have also built repeatable muscle memory to derisk and accelerate scale up by using pilot lines to test and industrialize new manufacturing technologies.

Second is a point about innovation at scale. Today, we have 16 innovation projects running simultaneously at different levels of globalization and launching. And this has required seamless coordination between the commercial functions, all the technical innovation functions and our operations colleagues. So what we are doing here is continuously improving our stage gate business process that help codify this coordination. And we have also spent quite a bit of time recently to improve ways of working between these teams for the seamless handoff that Johnny mentioned.

Finally, we are also uniquely differentiated in our industry in the sense that we have our own clinic network in Latin America. These clinics provide industry-leading chronic care, and they also serve as a platform to run clinical studies and accelerate clinical evidence generation and derisk innovation. More recently we have been leveraging natural language processing or AI-based anonymized real-world evidence generation. And what this is doing is helping us generate new insights for commercial purposes as well as decision-making and also post-market clinical evidence. So taken all together, what you see is tangible results where Wave 2 innovation, right, is 30% faster than Wave 1. Secondly, when you look at the overall portfolio cadence, it has accelerated. It has moved from 8 launches in 2 years -- 8 launches in 3 years to now 8 launches in 2 years. And guess what, we are running 30-plus active studies today to enable regulatory pathways, reimbursement and market access.

In 2019, I would say we were in single digit levels in terms of clinical studies publications and packets, low single digits, if I may, okay?

So in summary, we are building two reinforcing strengths, predictable, scaled execution with faster time to market. That's point number one. Point number two, an innovation portfolio that's moving towards greater differentiation and higher value.

So to close, I want to leave you with the point that Convatec is positioned for long-term innovation-led value creation because our advantage is anchored in four things. Unmet needs discovery and user center design that I've already highlighted. Second is a platform-driven architecture on two fronts, manufacturing platforms and science that can be leveraged across all 4 categories. The third point is high-quality clinical evidence that can get us regulatory approvals faster, market access and reimbursement.

The fourth one is the operational discipline that we are pursuing that accelerates and derisk execution. So the pictorial there shows our ambition quantified. First, we want to pursue disciplined investment of 5% of R&D as a percentage of sales. Second, we want to lock in and deliver a 30% cycle time reduction versus the Wave 1 innovation you heard about. We believe these two things will, in turn, continue to help us drive a circa 30% new product vitality across our strategic planning horizon, which is the next 3 to 5 years.

So in conclusion, Wave 1 is scaling or globalizing. Wave 2 is launching and Wave 3 is emerging. I remain confident that our best days are indeed ahead of us. Thank you. And over to you, Fiona.

Good afternoon, everybody. I'm Fiona Ryder, the Group CFO, and I am here to tell you about the exciting returns of our new Accelerate strategy. So I did that so I could skip over my picture. Let me start by setting out our value creation framework.

Organic revenue growth is our key driver of value. This is supported by structural volume demand, execution excellence and our broadening innovative product portfolio. We translate this into sustainable profitable growth through investments in R&D and commercial capabilities, disciplined P&L management and our ongoing simplification and productivity initiatives. We actively deploy cash generated into the highest returning areas. We prioritize high-return growth CapEx. But the cash generated also funds our growing dividend, selective M&A and as we did last year, buybacks.

Today, you have heard consistently that FISBE has delivered. Let me remind you the financial outcomes of this. In the last 5 years, as a result of our enhanced commercial execution and the creation of our innovative pipeline, we have delivered broad-based growth across all of our categories. Since 2021, growth, excluding InnovaMatrix has been consistently within our 5% to 7% revenue target. FISBE has also delivered an expansion in our adjusted operating margin. Since 2021, margin has increased by 460 basis points despite considerable inflation in this period. We are making good progress towards our target of mid-20s operating margin by 2027.

And let me remind you how we achieved this margin progression. We simplified our manufacturing network, moving from 7 to 5 main manufacturing facilities, and we significantly invested in the automation of these facilities. We centralized and enhanced our procurement function. And we -- under FISBE, we created ConvaTec business service centers, which was a key enabler in the reduction of our G&A, as Johnny mentioned earlier, from about 13% in 2021 to less than 7% last year. CBS started with finance, HR and IT activities.

We have also established our centers of excellence, market access, strategic pricing, change and marketing and sales. And we have deployed digital and AI to drive productivity and to enhance customer outcomes. A great example of this is Talkdesk, which we use in 180 Medical, which provides real-time AI-powered speech-to-text capabilities for voice interactions. This has so far driven a 10% patient per agent efficiency improvement and therefore, a significant reduction in OpEx to sales. And looking forward, we have more opportunities. The CBS is now being used to support a much broader range of activities. We're supporting pricing, procurement, customer service and legal from our CBS. And we're also driving more productivity from our investment in digital capabilities.

And importantly, FISBE has delivered momentum across the business. Our strong cash generation has allowed us to double investment in R&D, as Divakar said, and that has built our product pipeline and created a virtuous cycle of faster revenue growth and further reinvestment. We have delivered 2 years of double-digit EPS growth, and upgraded investment-grade credit rating and a $300 million share buyback.

You have also heard today that we are ready to accelerate, and we will do so from a position of strength. We operate in structurally growing markets. Demand for our products is increasing. Our new product pipeline is launching successfully and gaining share, and we are investing in capacity to drive faster growth. In the category breakout sessions, Tanja, Mark, Bruno and Kjersti have talked about how our operational and commercial execution will underpin this acceleration.

Waves 1 and 2 of our innovation pipeline specifically targeted the fastest-growing subsegments of the categories in which we operate. This is driving high-quality revenue growth. Stable, recurring and diversified across the categories and geographies in which we operate. And you've just heard from Divakar about our exciting next wave of innovation. These factors combined underpin our acceleration in organic revenue growth from 2027 to 6% to 8%. This revenue growth, coupled with disciplined P&L management will enable us to reach our mid-20s operating margin, and we intend to remain within this range. We believe that mid-20s is right for us. We want to continue to invest in key capabilities and ongoing innovation to sustain our acceleration.

Additionally, mid-20s benchmarks well against our peer groups of European and U.S. med techs. The framework creates opportunities to reinvest to underpin future growth, and we will invest in R&D, marketing and sales to launch new products, clinical evidence capability and geographic expansion, taking our new products and solutions to all key markets.

Now I'm sure many of you have got questions about the recent spike in oil prices and what that means for our cost of goods. Given our enhanced procurement rigor, we are now much better placed to deal with inflation. In full year '25, our cost of goods represented about 40% of group revenues. And within this, raw materials were about 45%. The next largest component were overheads of about 30%, including freight at 5% and utilities at 2%. We have significant hedging and forward purchases in place for 2026, covering about 80% of our raw materials. We are carrying about 5 months of finished goods and raw material stock. On this basis, the impact to our P&L of a sustained period of higher inflation is low. As you know, our full year '26 guidance on inflation is about similar to 2025, around 3%. Given the hedging that we have in place and these stock levels, we estimate that an incremental point of inflation above 3% could represent in 2026 about $2 million to $3 million additional P&L cost. But of course, we would look to mitigate this through efficiencies or pass-through where possible.

The cost impact in 2027 would be slightly higher at about 7% to 8% -- sorry, $7 million to $8 million for an additional point of inflation. However, I note that in 2022, when oil prices were also above $100 per barrel for a period of time, our COGS inflation in aggregate was 8.6% for the year.

Our business is cash generative and our capital allocation strategy is clear as demonstrated by this chart. We are also committed to a 2x net debt to adjusted EBITDA leverage target. We are investment grade, and this feels right for us. No need to delever further. We are investing to drive faster organic growth is our top priority. And as we reported at our full year results, we are accelerating growth CapEx to meet demand and to develop new products. We will grow our dividend in line with earnings, and we will continuously scan our key markets looking for attractive bolt-on M&A, which will enhance our competitive positioning, and we would go above 2x leverage for the right deal, providing that there is a clear path back to 2x.

We have no desire to be below 2x net debt to EBITDA for a sustained period. So our fourth priority of returning cash to shareholders is likely to be used as it was in 2025 with our $300 million share buyback. As a reminder, growth CapEx develops new products and creates or increases capacity. And in 2025, we spent $121 million on growth CapEx. This will increase to between $135 million and $165 million in 2026, and we expect a similar quantum in 2027. Total CapEx will be around 9% of group sales in 2026 and likely similar in 2027, then falling back to our normal range of 5% to 7%.

We are investing across all categories. The majority of our 2026 growth CapEx is in Infusion Care, where we are significantly increasing capacity, in many cases, underwritten by long-term customer contracts. But importantly, we are adding material capacity to meet demand across all areas. In Advanced Wound Care, we're preparing to scale up ConvaNiox, ConvaFiber and adding further capacity in ConvaFoam. In Ostomy Care, we're adding further esteem body capacity and preparing for the launch of Natura Body, our new 2-piece soft Convex batch. And in Continence Care, we're expanding capacity to launch our male compact catheter, GentleCath pockets and GentleCath set later in 2026.

Growth CapEx investments are creating valuable high-return, long-term assets. It can take up to 3 years to build, install and validate a highly automated manufacturing line. And therefore, as we invest, assets under construction on our balance sheet increases. Assets under construction commence depreciation when the assets are ready for use. We then expect our depreciation costs to increase steadily over time, but this is fully factored into our margin guide. Of course, the anticipated revenue streams from our capacity expansion, in many cases, underwritten by long-term customer contracts will drive higher profits and return on capital employed.

Our improved financial performance and financial discipline has increased our return on capital to over 14%. Given our positive momentum and these compelling growth projects, we expect returns on capital employed will continue to increase in 2026 and 2027, inclusive of the higher CapEx that I have just discussed. Our significant cash generation and balance sheet strength will further drive EPS growth. Over time, investors can rely on our operating profit growth, cash generation, investment-grade rating and commitment to 2x leverage to consistently drive group EPS. This will be enhanced by attractive M&A or share buybacks.

In conclusion, we have a resilient and reliable business with broad-based revenue growth and a strong track record. Our compounding growth algorithm is clear. Our strong balance sheet provides optionality, and we are reaffirming our medium-term targets of 6% to 8% revenue growth, mid-20s operating margin, double-digit EPS and double-digit free cash flow to equity CAGR. We are ready to accelerate.

Over to you, Jonny.

So I'm conscious we're running a little bit over time. I'll wrap up quickly because I suspect you might have a question or two. You heard today that the FISBE strategy has largely worked. We are now a stronger business. We are delivering sustainable an\d profitable growth. But the opportunity ahead is substantial, and we're ready to accelerate. So the accelerate strategy that we have described today based on these 4 strategic pillars, customer technology, execution and culture will enable us to grow ahead of the markets throughout the entire strategic period. And across each of those 4 categories -- will accelerate in each one. These 4 categories, as we said at the beginning, they sit well together. There is synergy across them. Each one of them will grow faster through the next strategic period, and that will add up to 6% to 8% for the group as a whole.

The enablers to deliver this strategy are in place. These are all teams and expertise that was built through the recent years of the FISBE strategy. I'll just quickly skip through them because we've talked about them all today already.

Science and innovation. So we have a substantial team of expert scientists under Divakar's leadership who are pushing the boundaries to find and solve unmet patient needs in areas like adhesives and their impact on skin condition, in areas like plastics extrusion and the impact on high-volume manufacturing. We have invested. You may have seen some announcements. We've got new centers in London, in Boston, in Slovakia, in Denmark, substantial team delivering that pipeline that we are so proud of.

Quality and regulatory. In general, Quality in Convatec is really good. We manufactured last year about 1 billion products for people to use with very low quality comments or complaints. Now we do recognize that we have one specific issue in one subsidiary related to the management of complaints processes, and we're very disappointed that, that's happened, but we're on it. We're going to fix it. We take it very seriously. And we will demand of ourselves the very highest standards of quality. But it is important to acknowledge, important though that is, it doesn't relate to product quality or to patient safety.

Medical and clinical affairs, I can't add much to what Divakar said already. Over 30 trials running at the moment, some important ones that we're looking forward to reporting back on InnovaMatrix and ConvaNiox, but a wider range and following the theme of developing more clinical evidence to support value going forward. And market access and reimbursement, that does that, too. These are our experts based mostly in the U.S., elsewhere, too, who are representing our case, our economics case to the authorities and securing appropriate value for the contribution that our medical devices are adding to the health care systems.

In operations, we made really good progress through FISBE, rationalized our footprint, delivered productivity. We're well down the journey of automation in our factories. So the next stage in this group operations function is about finishing off productivity because there's more to go for. We're not yet fully automated. And then it is about delivering more capacity to meet this strong demand that we are lucky enough to have in the market. Very focused on capacity build in all 4 categories actually. And then on improving resilience at the same time across the network.

In technology, similarly, great progress through FISBE. There's more to do. We've already implemented many standard and modern systems, which has helped drive our productivity. But for instance, MES systems to roll out across the factory network is part of the automation journey. That's not been finished yet. So we'll finish that. And we're making, I think, good progress in the use of AI. It's a very hot topic these days. We're being selective. We're being focused. We are using AI tools developed by other people, honestly, to deliver productivity within our business. And you heard some good examples from Fiona earlier today. All of our colleagues internally are being trained in how to use AI tools to make their individual days work more productive. And we're starting to see some rewards.

On M&A, Fiona also mentioned this. It's going to be an important part of our future growth story, but we are disciplined about it. We are focused now, and we're going to stay focused. And we are looking to deliver superior returns through bolt-on activity, and that might be new technologies or new capabilities, similar to the pattern we've had over recent years.

Most important is people. We -- I've talked a bit about culture already. We are developing stronger leadership to drive a stronger performance culture. And that's not to say we're not good. We are. We're in a good place right now, but we want to accelerate, do more and better. So I've got one more slide on culture because it feels worth a double click. We've heard a lot about strategy today and culture is one of the pillars in strategy. But you're probably quite familiar with Peter Drucker's famous quote that culture eats strategy for breakfast.

This is how we get stuff done. This is how it all gets delivered at the end of the day. So purpose-led performance driven, that's our call. We are developing the leaders, and we're training the teams to be more cross-functionally collaborative. Don't drop that baton between teams, perform as one Convatec team. And actually, we're doing pretty well. All of the people metrics they're sort of listed on the right-hand side, how we follow it. They're all going in the right direction. Very strong engagement. I've referred to that already. Our voluntary turnover is going down. Our internal promotions proportions are going up. Diversity is very strong, which helps with our avoiding group thing and get the right ideas into the room, really strong diversity. We got an award for that from the FT in recent weeks, and our cycle time is improving. So culture, really important is how we get it all done.

And I'll just conclude then by saying here is Convatec. This is the investment proposition that we are presenting to you today. We are well placed to deliver the organic revenue growth guidance that we've suggested and double-digit EPS growth year in, year out because we've got very strong market positions in structurally growing markets, leadership positions where we are one of only a few global players because it's consumable products in chronic care, it's a high quality of recurring revenue.

Our new products are working. They're getting great feedback. They're winning market share. And what all that means is the flywheel of investment is turning. More sales, more profit, more cash every year to invest to drive more growth. So we're building a stronger business for customers, and we're driving sustainable value growth for shareholders. That's Convatec.

And I'll just leave you coming back to the 3 takeaways that I mentioned at the beginning of the day. You probably can all remember them anyway, but very attractive market -- this is the short version, very attractive markets, strong and resilient business. The opportunity ahead is substantial.

Thanks very much for your attention. You might have a question or two. So please feel free to ask a question of anyone in the executive team. We're all here, and we're all ready to take any questions you've got. David, do you want to [indiscernible] because you've got questions online as well, I think.

It's Kane Slutzkin from Deutsche. Just on the raw materials comment. Is that -- what percentage of that -- you said it's 45% of COGS. How much of that is polymer or petrochemical related? Is that the majority, I would assume? And on the mitigating sort of factors, what is the sort of timing lag on a sort of pass-through or the like? And then just on margins, you sort of today seems the theme of reinvestment has been quite a big theme for you. Does that sort of mean that we should assume that in any given year, your margins could swing a little bit up or down versus the mid-20s and sort of capped at that level?

Thank you. So yes, our raw materials, as I said, 40% of revenue, 45% of our cost of goods are raw materials. And the components within there are all different and move at different speeds, different pressures within there, which is why I gave that aggregate impact back in 2022 because there will be some spikes. We have different contracts for different subcategories and different levels of stock.

And so that takes me on to your second question, how long does it take for those impacts to flow through? Well, as you saw for 2026, we're 80% hedged. We have 5 months of finished goods stock. We have about 5 months of raw material, and that differs by category as do the pricing pressures. So how long will it take to flow through? A while. It will take a while to flow through.

And then on your margin point, we are on track to get to our mid-20s margin by 2027. And I think we have been clear by saying that, that would be 24%. Our range is 24% to 26%, and we intend to stay within that range.

I hope you can hear me okay. Aisyah Noor from Morgan Stanley. One question for Divakar on R&D. Has there been a fundamental change in the way Convatec thinks about R&D, where in the past, for example, we saw the risk that InnovMatrix would be excluded from LCDs due to lack of certain clinical studies or criteria. Does this inform your approach to R&D going forward? Or is the burden of clinical proof much higher now when you're developing these new innovations such that the R&D outlay for new innovation is much higher? That's my first question. And then second question, there was a slide on capital allocation. Given the very focused growth investments and potential for M&A in the next 12 to 18 months, is it fair to assume share buybacks take a bit of a back seat until then? Or are you still keen to keep buybacks on the table for 2026?

Do you want to start?

Can you hear me? Yes. So Aisyah, thank you for the question. So I think in terms of clinical studies, I think the point I was trying to make was we don't necessarily see clinical evidence as an add-on at the end of a launch as a defensive approach. We are seeing clinical evidence as an input to help inform the choices we want to make as we commercialize products. So that is the core element of it. And when you see the studies, even the one that I shared in terms of our antimicrobial platform, we actually see that as one of the scientific platforms that can inform future innovation. So that is core to it, and that is how investments are being planned and invested.

InnovaMatrix, as you know, we have, you know, really good real world evidence already for very complex wounds, and, you know, it's already compelling. And we are awaiting results that now we intend to publish by end of this year. So I don't know, that's what it is. I think if it's about outlays, maybe Fiona can help.

Let me just add first, Fiona, you can do the next one. But look, I think there's a general trend which Divakar described though, which is we are moving more towards innovation, which warrants and will benefit from clinical evidence. And so we're going to be doing more of it. And that, of course, will cost something, but it delivers a higher return in the long run. Sorry, Fiona.

I just want to see when I answer. Well, what can I say? I mean we have our 4 capital allocation priorities, which remain the same. M&A comes before return to shareholders, but I think it is fair to assume that there will be some M&A or return to shareholders over this medium term.

I mean there's no sense in which anything is on the backseat for 2026 at this stage. We're still looking at everything.

Excellent. Veronika Dubajova from Citi. Two questions for me, please. And then going to be division. I'm going to give this very senior leadership a second to take a breath. The first one is on Infusion Care. I'd love to understand your expectations for the nondiabetes part. If we fast forward, you've moved from sort of 10% to 15% over the last couple of years. What is a reasonable ambition level that you have, I guess, if we get to 2030, what would you expect the nondiabetes proportion to be? And obviously, a huge amount of success with AbbVie so far. You've told us about a couple of other folks you're working with already. Can you maybe shed some light on the pipeline of number of conversations that you're having that you haven't been able to tell us about that might translate to something. And that's my first question. And my second question is on Wound Care. Obviously, if I look at the business, excluding InnovaMatrix, you've been growing about 4% the last 2 years. It looks like it will be fairly similar this year. I'm just trying to reconcile sort of you've had success with ConvaFoam. So why has the growth rate not been more impressive? And are there other parts of the portfolio that maybe need a little bit of work or focus to get that growth acceleration? Just if you can maybe give some color around that.

Thank you for the questions. So first, on the nondiabetes therapies, like you said correctly, it's now at 15%. Of course, those therapies are coming from a much smaller base. So what we said is that diabetes will continue at high single digit, which is also coming from a very substantial revenue size. So I'm not going to give you a number for 2030, but I absolutely see in the first year high double-digit growth for nondiabetes.

In terms of who we're working with, like I said in there and you just mentioned, 3 partners just in Parkinson. And actually, Parkinson came out of -- we have a small direct team in Infusion Care. It's mainly, as you know, with B2B, but we have a small direct team in Europe. And the Parkinson opportunity came from them having worked in the field with apomorphine in Europe, which is an old drug. So we are working on the pipeline with the current neria guard platform. And then as you heard Divakar mentioned, the next-generation guard will be able to cater for different drugs, mainly, for example, bigger volumes or higher viscosity. So the opportunity is quite broad, I would say. So when we get to 2030 and look at this, it will be a different shape, but still diabetes will be very big.

Can you hear me? Thank you also for your question for Advanced Wound Care. As we had showed in the Advanced Wound Care breakout session, the growth acceleration will come from 5 products we are focused on. What we have already launched more broadly is ConvaFoam, and we see clearly a positive feedback from our customers, and we have also seen a share gain with that particular product. 2026 is an exciting year because we have several launches coming online with ConvaVac and also ConvaFiber as an example, and we will also further broaden ConvaNiox going forward. All of this will really give us the confidence that we will accelerate and increase our growth targets for Advanced Wound Care. I hope this answers your question.

Yes. I mean if I may just add to that, Tanja, that's all exactly right. But you asked about the past as well. Why wasn't the past bigger? Remember, we were doing really well in antimicrobial, market-leading brand in AQUACEL, but that's only of the big 4 categories. The foam category was growing faster, and we were tiny and didn't have a good product before ConvaFoam. The single-use negative wound pressure therapy area was growing the fastest of all, and we didn't have a product in that either, which I hope you enjoyed seeing ConvaVac today. So very excited about where the growth is going to come from, but that's why it wasn't growing so fast in the past.

And just one question for Divakar and one question for Kjersti, which is on -- so on nitric oxide, you've talked before about using it in other applications, and it kind of looks like there might be something in Wave 3. But what's the most obvious next place to put that technology into? And then on Infusion Care, in a world where there is a patch pump and you're working on that, from a manufacturing perspective, does it evolve anything different? Can you do it on the existing lines and manufacturing footprint that you have to produce the key components?

Yes. Thank you for the question. So I think the ConvaNiox technology, this is a nitric oxide powered multimodal technology. So what we mean is nitric oxide is one of the modes. There are 2 or 3 other modes built into that platform. So logically the next immediate application that's one of the reasons why we've called out in Wave 3, we do see an additional one in Wound Care, and we've called that out. But we're not limiting it to it. We think these four modes have additional applications. We also saw in our Wave 3, we have highlighted how we also want to use infection prevention scientific platforms of which nitric oxide is one, and we have a few more that can be applied also to our next generation FeelClean. So those are two. And then obviously beyond the other scientific platform that we're also pursuing is how do we take our gold standard adhesives and accessories and try to go after peristomal skin complication. Hopefully, that's the extent to which I can share today, but I remain exceedingly excited about it.

Just to make sure that I got your question right. So you were asking whether if we are producing for a patch pump, if that can be used the same lines as we're using today for the InsctGuard, that's the question. Yes, right. So it would depend on the exact product. But think of the InsctGuard, it's a lot of parts in there. So it would be modular. And even though we have fully automated lines, there could be stations that you would need to modify. But in general, the principle is the same, but it would be some modification needed depending on the exact solution that we were supporting.

David Adlington from JPMorgan. A couple of questions, please. Firstly, on wound. On ConvaNiox, I was just wondering what -- how your conversations are going with reimbursement agencies? What sort of premium you're looking for and when we might get an update on what reimbursement you have secured? And then secondly, on Ostomy, maybe you could just remind us what percentage of the market is two piece, both in the U.S. and ex U.S. and what percentage you are currently in two piece?

Do you want to take?

With ConvaNiox. As you heard, we are super excited about ConvaNiox, and we have already released it into the hospital channel, and it's covered in the hospital channel. You also heard Divakar talking about additional clinical evidence, real-world evidence we are generating. And this will also help us to further diversify into other channels, specifically the community channel going forward. And this is work which is undergoing, but we are very positive and confident about that. So it is reimbursed in the hospital. We have, as you heard also from Dr. Chris, fantastic feedback, not only from practitioners, but also from the patients, and we will continue to also make it available in other channels as well. Did that answer your question?

I wonder if Divakar might add a bit about U.S. as well.

Yes. So I think just to build on Tanja's comment, right? So I think we've launched -- we got clearance for it in April in Europe. We've launched it. And as she shared the testimonials and the feedback both from patients and HCPs are as encouraging as the RCTs suggested. I think for the U.S., based on the compelling nature of the science and the clinical data, we are going to pursue the FDA de novo pathway, which means there was no precedent before this, yes. And then in addition to that, we are running clinical studies for health economic reasons as well as reimbursement. And what I can share with you today is these are RCTs, so I really can't comment on the RCTs, except to say that recruiting is going quite well, and that gives us continued enthusiasm about the prospects of this platform and this product. Thank you.

[indiscernible] do you want to...

So the best way to look at the split between one piece and two pieces is in the U.S., you have probably 60%, 65% two pieces. So the opportunity for Natura is really important in that geography. The opposite in the Europe, where one piece is a bigger market, and that's the reason the Sebdy is getting more traction in this market. In the emerging markets, you see that are very fluid. Depending on the market, you see more two pieces than one piece, which is in the majority. But yes, you can have the opposite situation, too. I hope it clarifies the opportunity.

David, where do you want to go...

Richard Felton from Goldman Sachs. First one to Tanja on wounds. On ConvaVac, what gives you the confidence that this product is going to get more traction than Avel did? That's the first one, and I've got a follow-up after that.

Yes. Do you have another one? Or shall I get started?

Another topic.

Okay. We have demonstrated ConvaVac, and this is really a highly competitive product with a fantastically working pump, which is very convenient and very silent. And this is combined with our dressing, which is supported by the hydro fiber. And this is very unique. And we are very proud about that technology, in particular, because what is in contact with the wound, it is the dressing too. And we are combining here 2 fantastic elements, a well-functioning pump with a hydrofiber dressing technology, and this really gives us the confidence. We are already in the phase of launching it in Europe, and the feedback is very encouraging, too. So we are really excited about that technology.

Thank you. Second one was on the Infusion Care business. You mentioned a couple of times in presentations that there's longer-term customer contracts in that part of the business. How should we think about your ability on pricing or passing through cost inflation within the framework of those longer-term customer agreements?

That's a good one. Thank you. So like you said yourself, it's long-term agreement. We've had, I think, with Medtronic with 20-plus years. We have very good and solid contracts for Convatec. I will not tell you exactly how those contracts are constructed. But the margins are healthy in our business. They will continue to be that. And when we are moving into new therapies, there is also opportunities in that for different constructs that I would see an upside in.

Yes. I mean, if I may add to that, Kjersti, there's no automatic pass-through, but there is a symbiotic commercial relationship where everything is up for discussion. And the contracts serve very well to drive stronger volumes, which really helps with operating leverage and other things to overcome any inflation that you might face.

Build on that.

I just have a build on that, Tanja's comment. Tanja also mentioned that with the ConvaVac technology platform, there is clearly the pump, there is the hydrofiber and then we have one more, which is the silver. So we are coming with silver-based technology on top of it. So when you combine all 3, I think we have a winning platform.

Susannah Ludwig from Bernstein. I guess, first, you guys have shown that you've had good growth of your own products within 180 Medical and your own distribution. I guess part of that is sort of higher quality products. But how much influence do you have over product choice in your own channels? And then second, on Infusion Care, you've talked about investing significantly for capacity expansion. I'm just wondering how much has supply, if at all, been a constraint on growth in sort of your recent performance?

Thank you for the question. On influence of choice, I would look at it more about education. These are long-term relationships. And with long-term relationships and trust, we have the opportunity to really educate our patients and the people that trust us. And so with that opportunity, they get exposed to our innovative products like you saw today in the breakouts. And so that's the really winning formula for success is how I would characterize that.

And your question was whether it has constrained us now the capacity? The answer to that is no. But what we want to do is to be able to capture the future growth. And if you -- some of you saw the slide that we had in my breakout session, in 2024, there was an uptick in growth for durable pumps, which maybe surprised many because that was the year when the GLP-1s came as well. So there was a little bit of a worry, but it started there, and that's also when we started pushing the button for the investments that are coming online. And they're landing this year, and we will start to deliver from them at the beginning of 2027. So it hasn't constrained us, but now we will have the ability to get more customers, more therapies and grow even further.

If may I just add, Mark, to your answer, which is the philosophy, Mark is always telling me about this. The philosophy in 180 is customer focus. That's why the satisfaction scores are so incredibly strong. So we do have an opportunity to influence, but we will never force. It comes down to the customer choice. I think that's where your education point came in.

Here with Liberum. Two questions, if I may. First of all, just on Continence Care. I mean, you've painted shown how strong that service business is and how important that is in driving the growth. As you expand into Europe, how are you going to kind of replicate that service infrastructure? Does that require acquisitions? And then the second question is just around margins and about capping the margins essentially at the kind of the mid-20s. And I guess I'm just going to challenge a bit and wonder why that is because you've got some manufacturing efficiencies coming through in the business. You've clearly got some more scope for G&A savings. And if I look at your revised guidance, it's the 2 higher-margin parts of your business that are growing fastest. So why should we assume that margins get capped? What are the drags on it basically?

Thank you for your question. So on expanding our service outside of the U.S., there is certainly a lot that is transferable. The back office, the technology infrastructure and really the culture is very key. We've made some selective M&A opportunities to break into that space, but then we get to take our know-how that we've developed in the U.S. and really combine it with the local market expertise, and it's kind of proven to be a very winning formula. So that's how I would answer that question.

Thank you for your question. So look, we're really excited about the opportunities ahead of us. We're excited about our acceleration of top line growth. And we have the building blocks in place to take us to the mid-20s margin. And we will be doing that over the next 18 months, 2 years. We want to continue to drive top-line growth and therefore for our operating profits to continue to grow. And we believe that continuing to invest in the exciting R&D in our commercial capabilities to sell and market those products in the markets in which we operate is the right thing to do. So you can rely on top-line growth, operating profit growth, double-digit EPS and strong cash flow.

Christian Glennie with Stifel. I guess one on Ostomy. You made a point about the key -- one critical success factor is the winning of patients in the acute setting and then the transfer of that when they leave. What is your rough sort of what takes it to win that patient initially in the hospital? And what's your rough sort of win rate, if you can articulate that? And then once patients are on your products, what's the attrition -- how much do they then switch away? That would be the first one.

Can you hear me? Good question. No, I think it's important to understand the journey, right? That's the first point. In the initial point of the journey, the ATP is really important. So having ATP engagement, clinical education and all the way to show the quality of our solutions early days for HCPs is key for us to win, right? Patient loyalty is very important in Ostomy Care. So once you win and you make them feel confident that they have the right product, this loyalty will drive through the continuum of care. In terms of win rate, I think once we have this patient in Ostomy Care with ConvaTec is really high. So we're confident that if we win in the Acute, you can drive that moving forward in the journey.

Any specific stats on that. But what is true is that we used to be losing share through new patient starts. And that was under Bruno's leadership of the team in the U.S.A., that has been stabilized, and we are now starting to recover share in the U.S. market because of accelerated new patient starts. So you can do the math on that.

And maybe just on Continence Care, the growth -- okay, I know that officially, the growth was mid-single digit. But if you look back over the last few years, you could argue it's actually already been in that mid- to high single digit if you look at that chart and the numbers there. So I guess just you would have had some -- maybe some pricing reimbursement a bit of tailwind there. But just to understand what's -- is it really accelerating? Or is it just a continuation of what has actually been in that range already?

Well, I'll answer that, Mark, first, and you can add if you want. But I mean, look, they've done really well. Their target was to deliver mid-single-digit growth, and they've been it. The target is accelerating. Now maybe they'll keep beating it. You never know.

Beatrice Fairbairn with Berenberg. You've spoken a little bit about the automation journey. Would you be able to give us a bit of color about how far along the business is with this? And I suppose if there are any assumptions embedded in the new accelerate strategy and guidance?

What journey, I'm sorry?

Automation journey.

Yes, the automation journey, yes, absolutely. Well, look, we have got 5 big factories and 2.5 of them are fully automated. I mean it's not quite as black and white as that. We're doing bits here and there. But we are more or less fully automated in -- in Denmark. That was the first one, Infusion Care. Deeside in the U.K., Advanced Wound Care factory has got a high level of automation. And then we're working our way through. Slovakia is advancing nicely. And we've got Dominican Republic and Mexico, where there are still opportunities to complete. We should get that done in the next few years.

And another one on Advanced Wound Care and InnovaMatrix specifically. So you've given guidance for Advanced Wound Care over the medium term. And I know you previously said that InnovaMatrix can return to growth from 2027. I suppose would you be able to give some more color around how that growth looks relative to the medium-term guidance of the segment?

Well, okay. So let me start that because we've had a lot of InnovaMatrix questions. It's been a big distraction, hasn't it? The fact is it doesn't matter for our medium-term growth targets. InnovMatrix this year will be less than 1% of group sales. Now we are confident it will grow next year, but it's not going to move the needle in terms of group sales growth. Now maybe, Tanja, I can ask you to comment on why is InnovMatrix going to grow?

Yes. As you said, there is a new base in '26. And starting from that, we will grow InnovMatrix. We have seen that InnovMatrix has increasing clinical evidence based on real-world evidence. And what we have also seen is the impact it has on the patients in the United States over the course of the last years. And this really gives us confidence that this differentiated technology will continue to perform very well. In addition, we will continue to generate new clinical evidence, which will also underline and confirm what I just said. And obviously, we are also working on further diversification from an indication point of view and across the channels. So this is really one of the 5 products I have been talking about, and it will continue to fuel our growth.

Divakar -- that?

Just a comment, just to build on what Tanja is saying is, when we made that acquisition, we made it not just for the product, it's a platform. It's a platform which has a lot of promise and properties. So that's the conversation Tanja and I are having about we actually see an opportunity to generate evidence and go into additional diversification. So I think I would -- that's how I would...

Yes. Look, I was slightly glib when I said it didn't matter. What InnovaMatrix becomes now is not the thing that moves the needle on its own. It is one of many products which will be growing, all contributing to growth. It's the diversified broad-based growth going forward that it will add to.

We have a couple of questions online. I will just ask them. If anyone else online would like to ask one, please, this is your opportunity. First question would be for Mark. When will Pocket and Set launch in Europe? And what's the plans beyond that? And then one for Johnny is if you had to pick one product from Waves 2 and 3, which would it be and why?

So Pocket and Set will be launching in Europe later this year with then rollout into next year in European countries, followed by the U.S. after that.

That wasn't enough. Look, I can't choose. You love all your children equally, right? I think there are a lot of great products coming, I mean, seriously. Obviously, we've talked a lot about Combies today. It's really exciting. But that's going to be a bit slower burn, a bit longer term. Some of the other opportunities in wound care are fantastic.

ComvaVac, very exciting. It's so much better product than our predecessor product to Richard's question. It's just night and day. So that will be great. ConvaFoam, we know is already building. ComvaFiber, a dramatically better product than its predecessor as demonstrated by the clinical stats. Natura body used to be my favorite, but it's just one of many favorites now. esteem body is growing so well in Ostomy Care that it feels we're a bit naked in the U.S. without the 2-piece version of it. And when that lands, that's going to be really great.

Same thing in Continence Care, right? We've got a gap. We are fighting still with one arm tied behind our back in Continence Care and in Ostomy Care. That will start to be solved at the end of this year, although it will take a few years until it launches fully. And then Infusion Care, well, demand is just -- is fantastic in Infusion Care. I think the Parkinson's -- Shashi is being a bit modest today, but winning that Parkinson's business was fantastic. And there are now 3 companies delivering different medicines to the market for Parkinson's treatments. And we are the exclusive supplier of infusion sets to all 3. So it's really strong and powerful testament to what the business can do. And that's before we talk about the therapies that come after diabetes and Parkinson's. So I love them all.

I think we are complete.

Brilliant. Well, listen, than just a quick word to say thank you very much for your time today. It's been a long afternoon. I hope you've learned something. I hope you've enjoyed it. You know where we are if you have any further questions. Remember your 3 takeaways. Thanks very much.

Okay. Well, good morning, everybody, and welcome to ConvaTec's 2025 Financial Results Presentation. Press harder. Usual disclaimers apply. So I'm going to start with an overview of 2025 and a little bit of what to expect 2026. Fiona will present the financial results and guidance, and then I'll come back and talk about where we are on our strategic journey and what to expect next. And then we'll be very happy to take any questions you've got at the end.

2025 was a year of strong delivery. It was the fifth consecutive year that we delivered organic revenue sales growth within our target range. That was supported by 8 new product launches that we've got underway at the moment. It was the fourth consecutive year of margin expansion, and it was the second year we grew EPS growth by double digit, and there's more to come on that. And the strong cash we generated enabled us to invest more to grow for the future and also to do some return to shareholders. So the growth is starting to compound. The flywheel is turning, and we are well set for the future.

In 2025, there were some headwinds, and we delivered despite them, which demonstrated the resilience of this business. As set out on the chart, we're in 4 chronic care categories. These markets are growing structurally independent of the economic cycle, and that provides a broad base for growth. There's a high proportion of recurring revenues, especially where we deliver excellent customer retention, loyalty, satisfaction based on the service we provide. And we have strong market positions, which gives stability to the earnings.

We make differentiated products and solutions. We're innovating to satisfy unmet customer needs. We're investing in the fastest-growing segments of our categories. And we've got the richest product pipeline in our history, which benchmarks pretty well with the industry. The growth is broad-based. We're not dependent on any one category or product or geography for our growth. And there are reimbursement dynamics in this sector. There always have been, there will continue to be, but we build in an expectation of those in our plans, and we grow through them. New product launches help us to overcome reimbursement pressures, and they help us to grow consistently ahead of the markets, strengthening in the results and the delivery.

The increased cash we're generating is enabling us to invest more in CapEx steadily throughout the FISBE strategy period. And the operating margin, we've delivered consistently 4 years in a row of margin expansion. EPS growth was double digit for the second year in a row, and there's more of that to come. You can see starting from the bottom, operational cash flow -- excuse me, operational CapEx has been consistent at about 2.5% of sales. Last year, growth CapEx increased significantly, and we have a real opportunity here to invest to meet the strong demand.

Dividend grew slower at the start of the period until profits caught up. Now that profits are growing faster, we are in our target payout range, and you can expect dividend to grow in line with profits going forward. On M&A, we've invested over $500 million over the period. Last year was a bit smaller. We will continue to be disciplined in acquiring only bolt-on investments, which increase our competitive strength in our focus areas. But this remains a priority area for us, and you should expect to see more investment here to increase growth going forward. And then last year, we managed to return $300 million by way of share buyback within our prudent leverage target of 2x EBITDA.

So to summarize this introduction, what I'll say is we are consistently delivering against the targets we've set in the FISBE strategy and the targets we set 3 years ago at our last Capital Markets Day. The turnaround of the business from the poor state it was in when Karim arrived in 2019 has been delivered, and we're now ready to accelerate. With the rich pipeline of new product launches we've got underway and coming, supported by higher investment to grow the pipeline and capacity, we're increasing our target growth rate to 6% to 8% per annum from 2027. And we're looking forward to explaining how we're going to do that at the Capital Markets Day in 6 weeks' time.

Thanks very much. I'll hand over to Fiona and to talk about the financial results and see you again shortly.

Well, thank you, Jonny, and good morning, everybody. While I haven't -- while I have met many of you here today, for those who I haven't, I'm Fiona Ryder. I've been the CFO for about 6 months, and I've been at ConvaTec for about 4 years, working closely with Karim and Jonny on the delivery of our strategy. I'm delighted to be here today to present a summary of our 2025 financial performance plus our outlook for 2026 before handing back to Jonny for the strategic review and Q&A.

We are pleased to report another strong financial performance for 2025. Organic revenue growth was broad-based across all 4 categories. Excluding InnovaMatrix, which I'll talk about shortly, revenue growth was 6.4%. Operating margin expanded by 110 basis points to 22.3%, taking our cumulative margin expansion over 4 years to 460 basis points. We delivered double-digit EPS growth at 16%. Our cash flow was strong with free cash to equity conversion of 101% under our new definition, which I will come back to later. This strong cash flow enabled us to increase investment for growth and for return to shareholders.

Growth CapEx more than doubled, a 13% increase in dividend, a $300 million share buyback while delivering our net debt-to-EBITDA at target of 2x. These strong results demonstrate our track record under the FISBE strategy and are further evidence of our ability to deliver sustainable, profitable growth. In ConvaTec, we are really proud of this slide that shows our turnaround. Excluding InnovaMatrix, it's 5 consecutive years of organic revenue growth above 5% and 3 years above 6%. Margin is continuing to expand, accelerating EPS growth and strong cash conversion.

In 2025, sales growth was broad-based across all 4 categories as this chart demonstrates, Infusion Care was the standout performer. On the right, you can see the impact of the significant market uncertainty in skin substitutes with InnovaMatrix sales down around $30 million year-on-year.

Now let's look at sales by category, starting with Advanced Wound Care, where sales were up 4.1%, excluding InnovaMatrix or flat including. We saw good growth in North America and Latin America with an improving performance in Europe in H2. Our flagship brand, Aquacel Ag+ Extra delivered another good year, and we are very pleased with the launch of ConvaFoam, which is gaining share. InnovaMatrix sales decreased $30 million to $69 million, with H1 down about 13% and H2 down about 44%. As you know, from the 1st of January 2026, CMS has included -- has introduced a price rate of $127 per square centimeter, which represented about an 80% reduction for InnovaMatrix.

As previously guided, this equates to a headwind in 2026 of around 2% of group revenue. As a result of the estimated impact on future forecasts, we have recorded a noncash accounting impairment of $72 million for our InnovaMatrix platform, equating to about 20% of the acquisition consideration. We still believe that InnovaMatrix is a highly effective product. beneficial for patients and trusted by HCPs. We look forward to it returning to growth in 2027.

In Ostomy Care, organic growth was 4.5%. The highlight of the year was the performance of Esteem Body, our 1-piece soft convex pouch, which grew ahead of expectations and where we anticipate further strong growth in 2026. Growth was also supported by our updated Esenta accessories range. We were also delighted to secure our first group purchasing organization win in the U.S. in 5 years, and we followed this up with a further GPO win post year-end. Good U.S. growth was supported by continued new patient starts from our Home Services Group. Growth in Europe increased during the year and Latin America performing really well.

In Continence Care, organic growth of 6.6% was driven by further volume increases in the U.S.A., backed by our outstanding customer service and our broadening product portfolio. We saw faster growth in sales of ConvaTec product relative to other manufacturers, which is now 59% of our sales mix given our improved product -- portfolio of products and faster growth of hydrophilic product, which was again over 60% of our revenue. We grew strongly outside the U.S.A. from a low base and international again contributed over 1 percentage point to the category growth rate.

And then Infusion Care, where organic growth was double digit at 12.5%. Growth was faster in H1 as expected. There was continued strong demand in diabetes across both long-standing and newer customers as the penetration of automated insulin delivery over multiple daily injections is increasing. Outside diabetes, growth was excellent, led by infusion sets for AbbVie's Parkinson's disease treatment. Other therapies now represent 15% of our Infusion Care revenue, up from about 10% in 2024 with scope to grow further as a share of the category. We have a strong position in Infusion Care with increasing diversity across customers and products. We are confident that 2026 will see another strong year with high single-digit growth.

Moving on to profitability. 2025 was another year of improvement. Operating margin expanded by 110 basis points or 100 basis points in constant currency, in line with progress over the last few years, where margin has increased 460 basis points since 2021. The strong growth in Infusion Care and the reduction in InnovaMatrix contribution results in movements in margin mix and OpEx, which broadly offset each other. Price and productivity contributed 30 and 130 basis points, respectively. Inflation was around 3% as expected, a headwind to margin of 110 basis points, and I would expect a similar level of inflation in 2026. We saw further material cost benefits from our simplification and productivity programs. G&A was down a further 50 basis points to stand at 6.8% of sales.

This slide shows how we have delivered mid-teens growth in earnings per share. With operating profit up 12%, finance costs were down about $2 million, and our tax rate was steady at 24%, leading to a 15% increase in net profit, which with a reduction in shares led to 16% increase in earnings per share.

Turning to cash. We had a strong year with free cash flow to equity of $362 million and a conversion of 101%. We have redefined cash flow to equity to better reflect the free cash available for capital allocation. We have separated operational and growth CapEx, increasing disclosure transparency, and we've adjusted for some small noncash items. Using our previous definition, free cash flow to equity was 61%. The main points to highlight are: EBITDA increased 12% from our improved operational performance. Working capital increased by about $40 million, in part due to the fourth quarter being our highest sales quarter.

As this unwinds, we expect working capital growth to be lower than revenue growth in 2026. Operational cash payments of $64 million were unchanged year-on-year and cash adjusting items of $16 million were slightly below our guide of $20 million. Growth CapEx of $121 million more than doubled year-on-year as we identified compelling organic investment opportunities at high returns given strong demand for our products and our exciting product pipeline. We paid dividends of $140 million, and we completed a $300 million buyback in the second half. Net debt increased by $272 million with leverage landing at our target of 2x.

Here is our outlook for 2026, reiterating our early guidance from November. We continue to expect 5% to 7% organic growth in group revenue, excluding InnovaMatrix. Group revenue will be second half weighted as product launches build. Following the significant CMS price reduction, we expect InnovaMatrix sales of around $20 million for the full year, strongly H2 weighted. On operating margin, we expect further progress in 2026 to reach at least 23%, irrespective of InnovaMatrix headwinds. This will be further underpinned by simplification and productivity improvements across operations, commercial and G&A.

On profit phasing through 2026, I expect us to make modest margin improvements H1 '26 on H1 '25 and greater margin progress in the second half. This sales growth and margin improvement, coupled with largely unchanged finance and tax costs and the reduction in our average share count from our buyback translates to another year of double-digit EPS growth. Cash generation will be strong, targeting around 100% of free cash flow to equity conversion. Operational CapEx will continue to be around 2.5% of sales with growth CapEx increasing to drive organic growth.

To wrap up, 2025 was a year of strong financial delivery. We hit our targets across sales, margin and EPS. 2026 will be another year of double-digit EPS growth as well as significant investments to accelerate future growth. From 2027, we are set to sustainably deliver 6% to 8% per annum organic growth, a mid-20s operating margin and double digit in EPS and free cash flow to equity. Our financial results are starting to compound.

Thank you. And I'll now hand back to Jonny.

Right. Thanks, Fiona. So we've said that ConvaTec is delivering against the FISBE strategy and that now is the time to evolve that strategy. We're not going to get into the details of the strategy evolution today. That will be at the Capital Markets Day. But I'll just spend the next few minutes expanding on the delivery to date and why now is the right time to evolve.

This is a slide which Fiona just showed. It's known internally as my favorite slide. I'm not going to go through each metric, but just to show how the momentum is building. On sales, on margin, on EPS, on cash, momentum is building. We are becoming a stronger business with more to invest, and that sets us up really well for the future. And we've also shown before how that growth is broad-based. All 4 categories are contributing to the growth, as you can see from the chart, 4 strong categories working together, and that's despite the reimbursement headwinds that they have faced along the way. That growth is supported by new product launches into each category, as you can see from the colors on this chart.

We've got 8 products in the market now launching underway, and we've got 8 more to come across 2026 and 2027. And then at the end of 2027, guess what, we're not going to stop. There's more to come. There's more in the plans, and we will be describing what that is at the Capital Markets Day.

So let me just take a moment to reflect on where we are now. ConvaTec is a strong and growing business. We've got strong leadership positions in markets that are fundamentally growing with high levels of recurring revenue. And that makes us very resilient as a business. And we've established a track record for delivering on what our targets were. But -- it isn't always right first time. It hasn't been as smooth as it could be. Growth last year was good. It was strong. But if we had executed seamlessly, it could have been even stronger, and that's what gives us confidence that we can grow faster in the future. We are learning as we go. This intensity of new product launches and this faster growth, these are new muscles for ConvaTec.

The FDA letter that we received just recently was very disappointing. It relates to the management of our complaints handling and our corrective and preventative actions. We're working on that, but the FDA said it's not good enough. And we agree. So this is now top priority. We've got our best internal team working intensively on it. We're working with the FDA, with our customers and with external advisers because we're determined to become best-in-class in this area as quickly as possible. And our execution is improving. I mentioned that just now. Last year, as I said, growth was strong. It could have been even stronger.

And the opportunity ahead of us is substantial. We're in these 4 categories that we are experts in. They benefit from a common set of technologies across operations and research and development. They are synergistic together. And the demand out there in the market is very strong. Our new product launches are working and they're winning share. And that's what gives us confidence that now is the time to be accelerating those sales growth targets. So going forward, based on this rich pipeline of new products and strong demand, we're going to be executing smoother, sharper, simpler, faster. And we're going to be backing our growth with investment in more pipeline and in more capacity in order to drive that faster growth.

So let's look at that by category, starting with Wound Care. So in 2026, we expect mid-single-digit growth for Wound Care, apart from InnovaMatrix, which Fiona has talked about, and that's a special case. Mid-single digits is based on continued growth of our market-leading strong brand, Aquacel Ag Extra. Strong market share still growing very nicely. ConvaFoam is winning share now in Europe and in North America, and that will scale up. And we'll be launching through 2026, ConvaNiox, ConvaFiber and ConvaVac. And we'll be repositioning InnovaMatrix to win in the years ahead.

In addition to those product launches, generating and disseminating clinical evidence is becoming a bigger feature of our product launch pipeline, and we'll be doing that for all of these products through 2026. And then from 2027, the growth is going to accelerate because all of these new product launches will be scaling up and InnovaMatrix will return to growth.

If we look at Ostomy Care, in 2026, we're targeting mid-single-digit growth. Esteem Body is proving to be a really successful product launch, our one-piece soft convex new ostomy bag product growing very nicely. And in addition to that scaling up in Europe, U.S.A. and other markets. We'll be launching Flexi-Seal Air, our new fecal management product, and we'll be continuing to improve commercial execution across the continuum of care. That's where we've been really successful over the last couple of years. That's what's led to the winning of GPO contracts for the first time for a long time. Folks are saying, as regards ostomy, ConvaTec is back. And we're very proud of that.

And in 2026, we'll start to build on those GPO contract wins. And then going into 2027, growth will accelerate because we'll win some more contracts Esteem Body will keep scaling up. We'll be growing our Esenta accessories portfolio. And very importantly, we'll be launching Natura Body. This is the 2-piece equivalent of Esteem body important for the U.S. market, which is more of a 2-piece market. We'll be very happy to see Natura Body launched, expect it to be just as successful as Esteem Body, and that will support our faster growth going forward.

In Continence Care, in 2026, we're expecting mid-single-digit growth there, too. This business, we're very big in the U.S. As we've said before, this is based on excellent service. Our Home Services Group has customer satisfaction scores, which are really world-class, high customer retention, high customer loyalty, and we continue to grow share to grow volume despite being clearly the market leader. Through that growth, the proportion of ConvaTec products that we sell is increasing because our product portfolio is improving. We launched GC Air for women a while ago. It's growing. We're going to be launching GC Air Pocket, which is for men and GCS Air Set, which is Unisex in 2026 in Europe first and then 2027 in the U.S. and we'll also be launching Cure Aqua, which is starting in the U.S.

So new product launches coming in Continence Care, which will underpin that growth. And then it will accelerate from 2027 as these new products build and as we expand the excellent customer service model outside the U.S., where it is still very small.

And then Infusion Care. We're targeting high single-digit growth in Infusion Care in 2026, which is consistent with what we've been targeting over the last few years, although we have delivered a bit higher than that, but the plan is high single digits for the year ahead. It's going to continue with further diversification of products and customers. The technology in this area is evolving. Our customers' technology in pumps is evolving very quickly, and our infusion sets can service the whole spectrum of pumps across the industry. It's strong demand out there.

And whilst we grow through 2026, and as I've just referenced with regards to the FDA's observations, we'll be improving our system for complaints validation and for corrective and preventive actions, following up on those customer observations. And then from 2027, we will be accelerating growth in Infusion Care. We'll be investing significantly in more capacity, and that will be in Inset Guard to service the diabetes sector. And in Neria Guard, for the other therapies, principally Parkinson's. But there are other therapies in addition to Parkinson's that we will be developing as well. So very strong demand for Infusion Care, strong growth to come.

So let me conclude then by saying that ConvaTec is delivering. This -- we've described a resilient business model, which is delivering through the headwinds, and that growth is sustainable going forward. The simplification and productivity agenda that we have been running for the past few years has got further to run. That's what will lead us to be able to expand operating margin further in operations, in commercial and in G&A to get to our target of mid-20s, which we're still focused on. And growth is starting to compound. Double-digit growth in EPS is what you should expect going forward. And that will be based on an acceleration of the top line.

So really pleasing that this rich pipeline of products that we're launching into the market, they are working. They're gaining share. And this pipeline is the richest we've ever had. And we think, as I've said, it benchmarks very well against anyone else in the industry. And as we learn with all of these products, as we grow faster, our execution is strengthening. And that plus the CapEx that we will commit to supporting more pipeline and more capacity is what will underpin our faster growth rate. So we're increasing our target growth rate from 2027 to be 6% to 8% per annum. And we'll tell you more about how we're going to deliver that at Capital Markets Day on the 9th of April, and I hope to see you all there.

Thanks very much for your attention. We'll be happy to take any questions you got.

Jonny, just we'll take questions from the room. Then there's 65 people on the call. We gather there's been some issues with the website streaming. We apologize for that, but the call is live. So we'll go room, then call and then website.

First question, Hassan.

Hassan Al-Wakeel from Barclays. A couple, please. So firstly, on Ostomy Care, can you talk about how you're seeing new patient capture and share dynamics in the U.S. and how you see some of these GPO wins to change that in '26 and then Natura in '27?

And then secondly, on the margin, you expect to lose around $50 million of InnovaMatrix revenue in '26, a 2% headwind versus the 1% to 2% expectation that you talked about. Can you talk about some of the offsets to this loss of revenue and your confidence in the building blocks in being able to drive that at least 70 basis points of margin expansion in '26?

Sure. Ostomy development in the U.S. is building nicely. We were declining for some years until our new leadership took over and our commercial execution improved. In the last few years, our new patient starts have been stable, and we've been building share through an improved product pipeline. That's been helped by the improvements to the Esenta accessories range and now most lately by the launch of Esteem Body. But it's the improvement in commercial execution, the education offer to health care providers, the me+ service support to patients, which has been leading our relationships to strengthen and to us gaining those GPO contract wins.

We expect this to build further going forward. We expect to be gaining share, gaining share in new patient starts as well and for that to accelerate when Natura Body is launched in 2027. But it's a steady build. We've said mid-single-digit growth for Ostomy Care in 2026. That's what we are confident of delivering, and then it will accelerate after that for those reasons described.

Do you want to talk about?

Yes. Thank you, Hassan. So we are guiding in 2026 to at least 23% operating margin. We have delivered 460 basis points over the last 4 years. And our top line will be growing, excluding InnovaMatrix, 5% to 7%. That, coupled with the simplification and productivity programs that we continue to drive will underpin the margin expansion. We have a track record there.

It's Sebastien Jantet from Panmure Liberum. Two questions, if I may. So first of all, just on the medium-term margin kind of guidance of between 24% and 26%. We're kind of in the early months of '26. That's not that far away now as we look into '27. So I'm wondering what are the things that make it land towards the top end of that guidance versus the bottom end of that guidance?

And then the second question is just you've talked about factoring in reimbursement headwinds in your guidance. You've upped your revenue guidance. Perhaps give us a sense of what are you factoring in for reimbursement headwinds within that revenue guidance?

Do you want to take the first one?

Yes. So we are guiding or have guided to mid-20s by '26 or '27, and we still hold to that. Now it's likely to be at the lower end of that. In '27, it will be closer to 24%. I think we've said that a number of times. And we think mid-20s is the right place for our margin. We think that benchmarks well. It allows us to continue to invest in top line growth.

Yes. And as regards to the detail of the reimbursement headwinds, I don't want to get into the specifics product by product. Over many years, the headwind has been quantified as roughly 1 point of headwind. And we've used a point of headwind per year across all the categories. Now it varies depending where different countries at different times. We've had different examples of where that's come from. The intensity of it in the U.S. has been more than normal over the last couple of years, and the headwind has been a bit higher than that. But before that, we had tenders in the NHS. We've had the French hospitals reducing the quantum of products that they have issued.

We've had German pressure on silver reimbursement. So there's always been something with the new product launches and with the pricing COE that we have introduced and has been delivering now for a few years, we've managed to counteract these reimbursement headwinds. And in our targets of 5% to 7%, we include the headwinds in there and that we will deliver through them. And likewise, for our accelerated growth, 6% to 8%, that is after absorbing whatever the reimbursement headwinds will be in the future.

It's Kane Slutzkin from Deutsche. Just guys, on the growth side, I'm just wondering, are you being a bit conservative on the Infusion Care guide? I mean you've sort of been beating it for a while. On Ostomy, just following up from Hassan, just you were sort of saying you're going to accelerate from '27. You've got obviously another GPO win. Are we looking at sort of a mid- to high single-digit grower in time? Is that kind of what you're implying?

And then just on the M&A story, how is that pipeline looking? And in the absence of anything, are you -- I mean, would you be considering further buybacks? Or do you have enough on your hands in terms of the increased CapEx?

So are we being conservative on Infusion Care? It's quite interesting to compare 2 years ago when GLP-1s came out, although stories were around, everyone thought the Infusion Care business was in trouble. Far from it, really strong demand. Our products, as I mentioned in the presentation, are able to service all sorts of different pump technologies and the prevalence of pump technologies in the market is increasing significantly, both the penetration of pumps in diabetes compared to multiple daily injections. That's growing nicely, but also in Parkinson's therapy and in other therapies, too.

So strong demand pipeline going forward. we have delivered more than high single digits over the last couple of years, just about in Infusion Care. The customer orders are predictable, but not uniform, right? They are a bit lumpy, but we know what they are because we talk very closely, work very closely with our customers. And as we look out into 2026, we think it will be high single-digit growth. So I don't think we're being unduly prudent there. I think that's the best basis to plan on. Thereafter, we do think there's an opportunity to accelerate because we'll have more capacity coming on stream and the therapy application areas will be growing.

And then you asked about Ostomy Care. Look, yes, I think that is a reasonable expectation. It's mid-single digits in 2026, and we think we will accelerate growth thereafter when we have the full portfolio of products with which to compete in the markets in U.S. and in Europe. So I think you can expect a bit stronger growth than that going forward from 2027.

And then I'll pick up the question, sorry, on M&A. So we have really clear capital allocation priorities, invest organically in the business, pay the dividend, which we are in the middle of our range for this year. M&A opportunities when they are attractive and accretive to growth and returning excess capital to shareholders. So every year, we go through the process of looking for the right M&A opportunities. We look at the opportunity to invest organically. For 2026, we see great opportunities to invest organically in the business, as we have said, with the increased growth CapEx. And if we don't find any M&A opportunities, we will return capital as we did in 2025, but we continue to look.

Jack Reynolds-Clark From RBC. The first is on the midterm guidance. So what are your expectations for the kind of the phasing of that new revenue or updated revenue guidance beyond 2026?

And Fiona, you mentioned that you still see mid-20s is the fair level of margin for the business. I guess, would you expect it to trend towards the upper end of that range over the next few years? What are your expectations for margins in a few years' time for the business?

And then my next question was on ConvaNiox. You mentioned the slow launch in Europe initially ahead of a more accelerated launch later on. Kind of what feedback are you getting? How is the launch progressing versus your expectations? And what pricing are you able to take there?

Do you want to take the...

Start with the first. So midterm guidance, well, we're upgrading that today to 6% to 8%. I'm not going to guide any more specifically about what that will look like in those years. You asked about the margin being at mid-20s. Yes, we think that margin at mid-20s is about right for us. So we're guiding to at least 23% for 2026. You can expect that to increase a little more over the next couple of years. But then we think staying in the mid-20s would be right for us. And then on ConvaNiox?

Yes. Yes, prioritizing investment in growth going forward. Once we get to mid-20s, then there's plenty of things to invest in. ConvaNiox, yes, it is going really well. We've got a few hundred patients now who have been treated. We are deliberately taking that slow and building evidence. We're working with key opinion leaders, and we'll build the network of health care professionals from there. Everything we've seen so far reconfirms the strong performance of the dressing. We believe this is a dressing that does things that nothing else in the market does. It's that combination of antimicrobial action and also accelerating the wound healing.

We've got one RCT, as I'm sure you've seen from a while ago in the U.K., which showed twice as fast healing rates and 3x as fast wound surface reduction as standard of care. We're now running another RCT in the U.S. to build further evidence. But don't expect material sales in 2026. It's about building that evidence base and then sales will grow thereafter. I think -- and we don't want to talk about reimbursement levels at this stage.

It's Graham from UBS. Can I just ask 2? One on Infusion Care, to the point on the CapEx expansion. And obviously, the -- you alluded to the acceleration potential. Is it reasonable to say, given historically, you've had these minimum volume contracts that it's very visible as in this CapEx is for something very tangible and visible that you can see in the next few years, and that's the inflection. And then on that, could you maybe talk to the return on invested capital expectation for that CapEx as well, please?

Yes. Well, let me start. I think what you might be asking in terms of visibility is, yes, we work closely with our big customers in expansion plans and have got with them long-term contracts. And so -- and in particular, that contract base has been strengthening as the demand in the market increases. So we're very sure that we'll be getting good returns on this CapEx that we're committing on the basis of those long-term contracts.

Fiona, do you want to...

Picked up the returns. Yes, we assess all of our projects and ensure that the returns are accretive to our group returns. So yes, these Infusion Care ones certainly fit that criteria.

And maybe a really quick one. On the -- you mentioned earlier, if the execution is better, the growth would have been better. What wasn't like super hard? What's like the key learning point from last year?

Look, as I said, we're learning as we go. And I think the main area is handoffs between different functions within the organization. We've got a really great team of scientists doing R&D. We've got a great team of operations executives running our factories. We've got great teams in commercial out in the markets themselves. The handoffs, it's a bit like a relay race, handing that baton over wasn't as smooth as it could have been in all cases. We ended up with a few isolated back orders here or there, which if we hadn't had, we'd have sold even more. So I don't want to make this a big deal, but it's just to say we grew strongly despite learning. Now we are learning and we're getting better, we'll grow even faster.

Beatrice Fairbairn with Berenberg. So I had a few on InnovaMatrix. So firstly, what level of confidence do you have in reaching the $20 million in sales guided for 2026? Also in the release, you noted that you are reorganizing your sales team. Just to clarify, has this now been completed? And could you provide some color on what changes have been made and how you expect it to impact?

And then kind of finally, how do you see InnovaMatrix sales in inpatient channel developing in the midterm given the changes we have seen in the outpatient setting?

Yes, let me take that. So it's obviously a highly uncertain situation in the market as regards to all skin substitutes. InnovaMatrix is a great product, and we are pleased to be able to report that volumes are strong still. Our volumes are, despite the uncertainty, as strong as they were last year and have been, if anything, building a bit since Q4. So the sales have come down a lot because of the price, of course, they have, but we are still getting strong response from health care professionals and patients really like the impact of these dressings. We have finished the reorganization of the sales force. That was an unfortunate necessity.

We've always said there was a very high level of variable cost in this sector of the market. And in particular, some of the commercial execution was very expensive. So we've resized that to be appropriate to the target markets going forward. We've got national coverage now, which is a bonus for the InnovaMatrix. And so our sales force is spreading out further across the U.S. to sell where we can.

Last year, we started to sell beyond the indications of venous leg ulcers and diabetic foot ulcers. Those are still the 2 biggest, but sales are starting to grow outside of that area, too. We're still primarily focused in physicians' offices. But I think one of your questions might have been about hospital channels. That's an area we will get to, but it's still quite small.

Thank you. I think that is the questions in the room. I know we have, certainly Veronika has a question online.

Okay.

So if you could go to that, please. As a reminder, if anybody would like to ask a question on the phone line, the moderator will inform them how to.

Can we go to the telephone questions now, please?

[Operator Instructions]

Our first question comes from Veronika Dubajova from Citi.

I'm going to try to sneak in 3, if I can. The first one is just trying to reconcile the InnovaMatrix guidance for $20 million. Just if you can help us understand the price versus volume expectations that you have. I think just simplistically on my math, if price is down 80%, you'd be assuming volumes are up 50%. Obviously, I appreciate, Jonny, you said you feel like the volumes are maybe picking up a little bit versus where they were in November and December, but that would be a pretty substantial pickup that's necessary through the rest of the year. So if you can just kind of help us through the building blocks of that, that would be super helpful.

Then my second question is just on Wound Care. Obviously a bit surprised by where the growth rate ex-InnovaMatrix came in, in the back half of the year. I think there was maybe some hope of some acceleration moving from H1 to H2 instead we sort of ended up at sub-4% stripping out InnovaMatrix on an organic basis. Kind of what gives you confidence that you can accelerate that growth rate there? And I guess, especially if foam is performing well, can you talk through the things that are not and your ability to kind of influence that growth and drive some improvement there that's clearly important to your midterm ambitions?

And then my final one, obviously, I appreciate that tariffs today might not be the same as they were tomorrow. But as we head closer to the end of the Section 232 investigation, I'm just curious what your thoughts are on what's the most likely outcome there? And what you would be able to do should the Nairobi Protocol not hold?

Okay. Quite a range there, Veronika. Thank you. Look, let me start and then maybe you'll see if you want to add, Fiona. On InnovaMatrix, first of all, $20 million of sales, yes, that does anticipate that our volumes grow significantly later in the year. And you've done the math, price down around 80%, sales down less. Where the volume growth is going to come from later in the year. And as we've just said, we have already reorganized the sales force is, I guess, 3 areas. First of all, we have a wider geographic scope now that we're covered for the whole country. That's one part of the growth. We're growing in other indications outside VLU and DFU as well. That's another part of the growth. And we are anticipating that some of the competition is going to fall away as the year goes by. Now we haven't seen that yet in any material way.

People still have inventory. People are still running legal challenges to the price change that was made. But we are planning on the fact that, that price change will stick. And when it is confirmed as sticking, some of the operators in the human tissue area who have higher cost of sales than us, significantly higher, they will fall away, and that will provide a volume growth opportunity. So that's how we're planning on InnovaMatrix. And it does mean, I think as Fiona referred to before, that we see the InnovaMatrix sales as being stronger in the second half than the first for those reasons.

On Wound Care, Volume, it was hard to catch exactly the question. But I think it was how are you going to accelerate wound care from where it delivered in 2026? I think that seems obvious to us anyway. We're launching 3 new products. So Aquacel is still growing. ConvaFoam is building and gaining share nicely now. It took a while to get started, but it's gaining share nicely now in Europe and in North America. And then we've got ConvaFiber coming. ConvaFoam and ConvaNiox are going to be very small in 2026, but they will start to build through 2027. So that's where we see the accelerated growth in Wound Care coming from over the next few years?

Do you want to talk about tariffs?

Sure. Thank you, Veronika. So yes, tariffs are a moving piece at the moment, but we do expect the Nairobi Protocol to hold for our products that are currently covered by it. The Nairobi protocol has held since the 1970s, I believe. So I think it is unlikely to be challenged. If it is, we would be in a similar position as our peer group, and we would deal with it then. But as I say, we are expecting the Nairobi Protocol to hold.

Any more questions on the phone? I think there's 2 more.

Our next question comes from Susannah Ludwig from Bernstein.

I have 2, please. And I guess apologies in advance if you've already addressed them as I was on the webcast and as I highlighted, there is a disruption. But first, would be on Infusion Care, which was the fastest-growing category. Could you quantify what percent of Infusion Care growth in 2025 was driven by nondiabetes versus diabetes? And how should the mix between diabetes and nondiabetes evolve over the medium term? And how as nondiabetes grows, does that impact margins from that business?

And then second, on the FDA warning letter, in the press release, you highlighted that there was not an issue related to product safety. However, the warning letter does cite 5,000 complaints related to leakage and potential under-delivered -- insulin. What makes you comfortable that there is not a leakage problem with some of your infusion sets?

Thanks, Susannah. So I'll take the first question, then I'll hand to Jonny for the question about the FDA. So look, we're really pleased that the share of nondiabetes product in our Infusion Care category continues to grow. It was 10% in 2024. It was 15% of the category in 2025. And we expect it to continue to grow as a proportion of the category. And you're right, the margins for nondiabetes are slightly higher than those in diabetes. And so it will continue to support our margin growth for the group.

On the FDA commentary, leakage can be caused by lots of different things, including inappropriate application, reasons that are not to do with product inadequacies. What the FDA commented on was that we were not pursuing rigorously enough these observations from customers to be sure that it wasn't any product-related weakness. So -- and look, we are -- we agree with their observations. We are pursuing more vigorously chasing down every bit of information we can. It's more complicated in this category because any comments from customers -- any comments, excuse me, from people using the devices go to our customers. They don't come to us.

And it's through that interface that we have to be more rigorous in making sure that we've chased down every possible piece of information and every bit of learning. We've done some investigations before and -- but more importantly, since then, a lot of evaluations, and we haven't found any deficiencies in products. And as I say, the FDA didn't point to that either. What they said was you're not managing the information flow tightly enough, and we will get better at that.

I think there's one more online -- one more telephone question.

Our final telephone question is from David Adlington from JPMorgan.

So firstly, I just wanted to more specific in terms of the -- what you've assumed in terms of CBP in terms of pricing pressure in 2027. You sort of answered in the around in terms of pricing pressure, but maybe just specifically on CBP, what your assumptions there are? And just on InnovaMatrix and the write-down, I think, again, apologies because the webcast wasn't great, but I think you've written down about 20% of that $72 million. So that leaves about $280 million left. But obviously -- yes, fairly significantly as you're now valuing the asset at 14x sales. I just wondered why you only write it down by 20%.

So I take the first one? So CBP, our assumption hasn't changed from what we described last summer, which is that we think if it's implemented, in both Ostomy and Continence categories, then the headwind will be between 1% and 2% of our group revenue. Now 2% is based on the fact that 7% of our group revenue is exposed to the CBP being the Medicare revenue in those 2 areas and that 30% is the average of CBP impacts over the full extent of the CBP process with CMS and also that there isn't any more profit in the industry. We don't think a price reduction of more than that is possible to push through.

And then -- so that would give you a headwind of 2%. We think we're in a strong position to gain volume. The CMS has expressed a preference for there being 7 or 8 distributors in each sector compared to the thousands that there are now. Granted some of these thousands are pretty small. But as some of those smaller distributors decide not to participate and wouldn't win anyway because they can't fulfill the national supply objective, which has been required or expressed as a condition for the CBP, there's going to be market share gain opportunities for stronger players like ourselves. So that's why we've expressed a range between 2 and 1. Let's see how it develops.

I would just add to that, that the CMS has said that the CBP, if implemented, would be in 2028, not 2027.

And then I'll take your second question, David, which I think was -- I was struggling to hear you a little bit, but why did we write down $72 million of our InnovaMatrix assets? Well, we have followed a really clear approach here. We have taken prudent and risk-adjusted forecasts and the impairment that has fallen out is $72 million. As Jonny said, we are still selling the product. The product is selling well. Volumes are increasing, and we believe that we're holding it at the right value at the moment.

Any more, David?

I think that's all the questions. So thank you, everybody, for coming.

Okay. Thanks very much indeed. We look forward to seeing you in about 6 weeks' time when we'll have more to share. Thanks for your questions today.

Good morning. Thank you for attending today's ConvaTec Trading Update for the 10 months ending October 2025. My name is Sarah, and I'll be your moderator today. [Operator Instructions]

I would like to pass the conference over to our host, Jonny Mason, Chief Executive Officer. Please go ahead.

Good morning, everybody. Thank you for joining us today. I'd like to start with a few words about our former CEO, Karim. Since we met last time, we've had the terribly sad news that Karim has passed away. He was the architect of ConvaTec's FISBE strategy and drove our successful turnaround. He was liked and highly regarded internally and externally to ConvaTec, a visionary leader, a mentor to many, a close colleague and a friend.

We miss him, but he set up a great team. We were intimately involved in the development and delivery of the strategy and the turnaround that has been successful. Now there's lots more to do, lots of opportunity to go for to take the business to the next level. Karim would expect us to get on with the job, and so we will. And the organization won't miss a step.

Today, I'm joined by our new CFO, Fiona. Together, we'll present a summary of our trading performance for the first 10 months of the year before taking any questions that you've got. Over to you, Fiona.

Thank you, Jonny, and good morning, everybody. I'll talk first about sales, excluding InnovaMatrix, which represented 97% of the group total. Organic revenue growth of 6.3%, excluding InnovaMatrix, was broad-based across all 4 categories. On a reported basis, revenue growth was 6.2%. In Advanced Wound Care, organic growth, excluding InnovaMatrix, remained mid-single digit.

Growth was strong in both North America and in global emerging markets, while in Europe, growth is building. We have seen strong ConvaFoam growth, particularly in the U.S.A., and it's starting to build in Europe. We remain confident of delivering our 2025 category revenue guidance, which is unchanged at mid-single digit, excluding InnovaMatrix. And with 4 wound products launching in the next year or so, we are confident of strong future growth.

In Ostomy Care, organic growth was mid-single digit with good growth in North America, Europe and Global Emerging Markets, particularly Lat Am. Our Home Services Group continued to support new patient referrals in North America and in Europe. We are delighted with progress and positive customer feedback on Esteem Body, our one-piece soft Convex product. We are growing share in all key markets. We expect strong growth contributions from Esteem Body for years to come. Our Ostomy guidance for 2025 is unchanged at mid-single-digit growth.

In Continence Care, organic growth remains mid- to high single digit. In North America, which is around 90% of category sales, we saw future growth in patient volume driven by our focus on excellent customer service at 180 Medical, our market-leading service company. We continue to modestly grow the U.S. market, taking share. Outside of the U.S., growth was again very strong off a small base. We expect growth outside the U.S. to contribute at least 1 point of growth to the category as it did last year. Our guidance for the full year is unchanged at mid- to high single digit.

And in Infusion Care, organic growth was double digit as expected. We continue to see strong demand for our infusion sets in both diabetes and particularly nondiabetes treatment, further diversifying with faster growth from new customers, new products and new therapies. Our guidance for full year remains double digit. And as expected, H1 growth will be higher than H2.

Moving to the next slide. I am pleased to say that we are on track to deliver our 2025 financial targets. We've narrowed the range for revenue growth, excluding InnovaMatrix to between 6% and 6.5%. Revenue growth guidance for each category is unchanged. InnovaMatrix represented around 3% of group revenue. As previously reported, local coverage determinations in the U.S.A. and the CMS price level for skin substitutes have led to an increasingly challenged market conditions, particularly in recent months.

The headwind for InnovaMatrix is bigger than we thought, and we now expect revenue in 2025 of around $70 million. We continue to expect adjusted operating profit margin to be between 22% and 22.5% despite incurring around 30 bps of tariffs in non-chronic care products. And we expect to deliver another year of double-digit EPS growth with cash conversion of around 80%.

I'll now hand back to Jonny, who will go through strategy and outlook.

Thank you, Fiona. We're making good progress with our new product launches, and the highlights are set out on this slide called strategic progress. In Advanced Wound Care, we enjoyed strong growth in the U.S.A., which was driven by ConvaFoam. And this new product is very well received by health care practitioners. It's taken a while, but sales are building very nicely now in the U.S., and we expect that success to follow in Europe as well. Our recent capital investments include new capacity for ConvaFoam, and that will be coming on stream in 2026, and that will set us up to meet demand for many years to come.

In 2026, we also have 3 more products launching. We've talked previously about ConvaNiox, our breakthrough nitric oxide dressing. Here, we're effectively creating a new category. So we expect the buildup of sales to be slow, but we are excited as ever about its long-term prospects. With ConvaFiber and ConvaVac launching as well next year, this all adds up to what we think is the richest new product pipeline in the advanced wound care sector.

In Ostomy Care, Esteem Body continued to launch very strongly, and it is now gaining share in all of our major markets. You should expect that growth to continue into 2026. And then in 2027, we're looking forward to the launch of the companion product, Natura Body, the two-piece equivalent in soft convexity. And just recently, we were very pleased to secure our first U.S. Ostomy GPO win in over 5 years with Captis/Vizient. This shows that the ConvaTec Ostomy business is truly on the road to recovery, and it is a demonstration of the significant improvements in commercial execution made by Bruno and his team.

Moving to Continence Care. Our market-leading 180 Medical business continues to set the standard for patient service and care and is outgrowing the market. We're ready for the upcoming catheter code changes and well positioned because we think this will be positive for the adoption of hydrophilic products, which we have been leading in the U.S. Our new hydrophilic product, GentleCath Air for Women is launching well and is gaining share.

And then in Infusion Care, growth continued strongly for diabetes therapies and other therapies. In particular, our new infusion set products, the extended wear for Medtronic and the Neria Guard for AbbVie grew quickly. Sales growth was fastest for new customers and for other therapies, further diversifying the revenue of the category. And other therapies now account for over 15% of the total. We see strong growth in Infusion Care sales for years to come, which is why we are accelerating CapEx to bring online new capacity to service this strong demand.

Now for 2026, we wanted to share some initial guidance early as we did last year because of the high level of uncertainty around InnovaMatrix. As Fiona has said, for InnovaMatrix, 2026 will be a weaker year, and we have pointed to a headwind of 1% to 2% of group revenue. Or it could be more if the restrictions of the LCD are not removed as we expect them to be. But as last year, the rest of the business, i.e., 98% of our group revenue is growing very nicely. We expect to deliver again 5% to 7% organic revenue growth, further operating margin expansion and another year of double-digit adjusted EPS growth, with margin expansion and double-digit EPS growth delivery irrespective of the regulatory outcome for InnovaMatrix.

And so in summary, we continue to perform strongly in 2025, demonstrating the broad base and the resilience of the business, and we're on track to deliver our financial targets. We're also on track to deliver our medium-term targets. And ConvaTec is focused on providing high-quality chronic care solutions for customers, patients and health care professionals. Growth is increasingly coming from new products and our innovation pipeline is stronger than ever. Our commitment to that innovation and to patient care has never been stronger as we improve the lives of millions of people globally who rely on our trusted medical solutions every day.

Thanks very much. We'd now be happy to take any questions that you've got.

[Operator Instructions] We have our first question from Hassan Al-Wakeel from Barclays.

Jonny, Fiona, David, I'm so sorry for your loss and the loss to the ConvaTec family. Can I squeeze in 3 questions, please? Firstly, thank you for the detail on next year. Can you help us understand the building blocks for double-digit EPS growth? Do you expect less than 5% to 7% growth on the top line inclusive of InnovaMatrix? And how do you intend to mitigate the bottom line impact given that you expect to expand margins in 2026?

Secondly, can you talk a bit about the expectation for higher CapEx? And to what extent is this a pull forward? I know Infusion Care is a business that has driven higher CapEx in the past. So I wonder how you think about your CapEx needs beyond this year and whether CapEx should still run around 5% of sales over the medium term as you've previously talk to?

And then finally, with your richest Wound Care pipeline, can you please talk about the potential to accelerate underlying Wound Care franchise growth? And if high single digit ex-InnovaMatrix is possible as soon as '27?

Fiona, do you want to talk about the EPS?

Yes. Thank you, Hassan. So as you've seen, we are pleased to guide for group organic growth, excluding InnovaMatrix next year of 5% to 7%. Now to be clear, we know that InnovaMatrix will be significantly lower in 2026 than 2025. But with continued margin expansion and on the basis that we will have similar tax and financing costs next year, we only -- we would see -- we would easily achieve mid-single-digit operating profit growth. And that will fall through easily to deliver double-digit EPS. I would also remind you that we have delivered a share buyback in the second half of 2025.

On the CapEx, look, we think this is really good news. If you think about our capital allocation priorities, the best place for us to invest to drive future growth in the business is with projects like this capacity expansion. We didn't spend that much on M&A in 2025. We've spent more on building organic capacity growth. We do think 5% CapEx is about right for the steady state going forward.

But I think as we've said recently, for a couple of years, it's going to be higher than that because we are supporting stronger growth in these new products rolling off our pipeline. And Infusion Care is the biggest example of that. It will be double-digit growth this year. We've said it's a high single-digit business going forward year in, year out. Could it be more? Possibly, it could be more. But we're sure it will be at least high single digit, and that's why we're adding the CapEx to support that growth.

And then on Wound Care, you asked about high single digits. Look, I think yes, we believe this will be a high single-digit growth going forward. And you just need to look at the pipeline to see why. Not next year, that's unlikely. But when these new products start to build, I think you should be looking for high single digits, yes, probably from 2027 onwards.

Our next question is from Anchal Verma with JPMorgan.

Also deepest condolences to Karim's family and the ConvaTec family. I do have 2 questions, please. The first one is just pushing you a bit more on the guide for next year. But if we look at FY '26, you've guided for margin expansion and you've reiterated your medium-term guidance for mid-20s. So if we take the midpoint of that, that implies over 100 bps of margin expansion in FY '26. Is that fair? And can you please talk to the potential moving parts for the top line and the margins for next year?

And then the second one is just following up on the tariff impact. The tariff impact for this year is $5 million to $10 million. Is it sensible to just annualize that for next year? Or do you have any offsetting measures? And do you have any further thoughts on the potential impact from Section 232? Or do you expect the Nairobi Protocol to prevail?

Go ahead, Fiona. You'll kick off.

All right. Thank you, Anchal. I'll start with your second question. So tariff impact of around $5 million to $10 million this year, yes. And we would, therefore, expect an annualized impact next year. And yes, of course, we are looking at ways that we can minimize that. With regards to Section 232, we expect the Nairobi Protocol to remain in place.

With regards to your first question about the guidance for next year, yes, I think it's a reasonable assumption, your 100 bps margin expansion. We have delivered that and more for the last 3 years. And we have delivered that this year or have so far delivered that this year despite the InnovaMatrix hit.

Yes, exactly. And look, let me just build on what I've previously said, is the arithmetic. You'll be able to run it through your models. Expect similar margin expansion next year to what we've delivered recently. As Fiona said, you've got 5% to 7% on the base business. But then, of course, with a headwind on InnovaMatrix, call it 2% for modeling purposes. And with roughly flat tax and interest, you get to double-digit EPS growth. We will guide in detail on 2026 at the full year results. But we just want to share that this headwind from InnovaMatrix does not knock us off track from delivering the targets that we have set out there.

Our next question is from Aisyah Noor from Morgan Stanley.

My condolences as well. My first question is on the Ostomy wins on the U.S. GPO contracts for ConvaTec, which is clearly good news. What, in your view, were the key success factors for this win? And what sort of growth contribution can we expect from the U.S. GPO segment for Ostomy in 2026?

And then my second question is on the Infusion Care growth expectations going into 2026. It sounds like this AbbVie product is doing a bit better than you expected and you're doubling down on the capacity there. Is it fair to assume this could be the biggest driver of potential double-digit growth for Infusion Care next year? Or are there other products you think have the potential to contribute to that as well?

Okay. Let me have a crack at those. U.S. Ostomy win, really pleased with this. Obviously, ConvaTec used to be a big player in U.S. Ostomy lost its way. We are back. And the new product launch, Esteem Body is a contributing factor. But the main reason is because under new leadership, Bruno Pinheiro and his team, the commercial execution in the U.S. and elsewhere in the world has become much stronger. We are once again a reliable partner. Health care providers want to work with us.

And I think a big part of this return to GPO contract was the influence of the hospitals and the health care providers saying to the GPOs, we want to work with these guys. We're getting a very good reception in the market. It's not just about the new product. We've got our me+ platform, which is offering service to health care professionals and to patients. We've got health care practitioner education programs. So the whole package put together is being very well received in the market. And we hope this will be the first step of a few more to come.

As for U.S. growth or growth in general, well, look, it builds slowly, right? We have been delivering mid-single-digit growth in Ostomy for the last couple of years, which is a step up on where it was previously. This will just firm that up. And we look to the Ostomy category's growth to be building over the next few years. And I won't say more than that for now, but we're optimistic about the prospects for Ostomy. Let me just say that.

And then on Infusion Care, yes, AbbVie's treatment, AbbVie's Parkinson's treatment is growing very nicely. And it is driving the growth in other therapies much faster than the growth in diabetes therapies, which is contributing to our optimism and our acceleration of capital expenditure. It's not the only Parkinson's treatment. We've got Mitsubishi Tanabe coming along shortly after that. And then there's another one, which I don't think has been commercially announced yet, so I won't. But we'll have 3 Parkinson's treatments running within 2026 is our estimate, probably towards the end.

But the growth in diabetes therapies is also strong. We've got our 2 core customers, but we're growing with other customers as well. And so in other therapies -- sorry, excuse me, in diabetes therapies, the growth there is high single digits. Yes. So all in all, it's a picture of broad-based growth, which is increasing diversification and improving our confidence of future prospects.

Our next question is from Thyra Lee from UBS.

Our deepest condolences to the loss of the ConvaTec family as well. I just have 2, please. So CapEx is a signal of improved growth prospects, and you said it's mostly driven by Infusion Care. We were just wondering if you get any visibility from customers on the demand here, maybe minimum volumes and contracted volumes and so on and so forth?

And then my second question is on ConvaNiox. It's super exciting. And we were just wondering what kind of work you're doing now to understand where to position it going forward? And whether you could provide some color on what typical reimbursement looks like for an antimicrobial product?

Fiona, you start with Infusion Care, and I'll pick up on ConvaNiox.

Yes. Thank you. So yes, we have brought forward some CapEx into this year to support growth. That is for Infusion Care and Wound Care. But with regards to Infusion Care, we are investing a lot to support the strong demand. And yes, we do have clear forecast from our customers, and we include minimum volume requirement commitments in our contracts as well.

Yes. And then ConvaNiox, look, what work are we doing? We've started launching that product in a very limited manner so far. Over 100 patients have been treated with good results. We are deliberately being selective. We want to build knowledge of the efficacy of the product among key opinion leaders. So it started in key teaching hospitals in Europe. And from there, we will build up the evidence and build out the reputation of the product.

We expect to start launching in the U.S. during next year. We're building the reimbursement information portfolios as we speak. Look, we think this could become ConvaTec's biggest brand, but it will take 5 years. And the contribution in 2026, you should not expect to be material. It will be a slow start.

Our next question is from Sam England with Berenberg.

Firstly, I wanted to echo everyone else's comments and saying condolences to ConvaTec and also to Karim's family. In terms of questions, can you maybe give us a sense of the cadence of the various new product launches during '26? Are there any coming earlier in the year that could be meaningful growth drivers during '26? Or should we think about the launches being more of a benefit to 2027 growth?

And then in terms of midterm margin target, what would need to happen in 2026 for you to hit the midterm margin target next year versus 2027? And do you think you'll look to provide new midterm targets at sometime next year, given we're getting towards the end of the original plan period?

Thanks, Sam. New product launches, let me start with that, and then Fiona will talk to margin. So the main growth drivers next year will be the products that we have already started to launch. Think ConvaFoam in Europe, Esteem Body everywhere, the Infusion Care products that we've just talked about. Remember, Neria Guard for AbbVie, extended wear for Medtronic, those are all new products and growth drivers.

The launches in 2026 are spread through the year. So -- as I've already said, ConvaNiox will be tiny. That won't contribute to growth. ConvaFiber is launching early in the year, maybe even at the end of this year. So that's nearly ready to go, and that will contribute to growth in Wound Care. ConvaVac is more back-end weighted. But in Wound Care, therefore, you've got ConvaFoam growing, ConvaFiber adding, ConvaVac coming later, ConvaNiox long term.

Ostomy Care, just going through in order, we won't unfortunately be launching Natura Body until 2027. We're very much looking forward to Natura body coming. It's obviously the 2-piece equivalent of Esteem Body. We think that will make a big difference for us in the U.S. market, but not next year.

In Continence Care, we've got [ Cure Aqua ] coming along, and that will be kind of midyear. So that will contribute a little bit to growth in Continence Care. That's a hydrophilic, more value-based product. I think that's all the categories. Have I missed any? No.

And -- Sam, I'll pick up the second question about our midterm guidance. So yes, we have consistently said that we could achieve mid-20s operating profit margin by '26 or '27. And we have said during '25 that it is more likely that, that could be 2027. However, to be clear, we could achieve that. We could achieve it next year. The pathway is fairly narrow, but we are more likely to choose to invest in continued growth, as we've talked about on this call. And therefore, it will be more likely to be '27.

Our next question is from Jack Reynolds-Clark with RBC Capital Markets.

Echoing my condolences, too, for the loss of Karim. I had a couple of questions, please. The first is on the midterm revenue guide. So I appreciate you not to kind of front run the '26 guide too much. But where do you see as being the biggest swing factors determining where you come within the range of the revenue growth over the midterm? Is it kind of really down to execution on these launches? Or is there something else that's driving that?

And then thinking about the midterm margin guide. So I think expectations currently are kind of very much towards the low end of the kind of the guidance range you set out between '27 -- for 2026 and '27. I guess what needs to happen for kind of upside to that? Is that driven by InnovaMatrix or kind of are there other things that you can -- other levers you can pull to drive that?

Thanks, Jack. Yes, our midterm guidance is 5% to 7%. What takes you to the bottom or the top? Successful launches are a key factor. And honestly, we're learning. This year, we've had very good reception for our products in the market. They're great products. We haven't been as smooth as we could have been in the execution of the launches. Honestly, sales growth could have been a bit faster if we had been a bit smoother. So we're learning, and that will help us get towards the top of the range.

On the other hand, and as we talked about quite a lot at the half year, stuff happens. Reimbursement headwinds are a part and parcel of this business. There is an unusual intensity of them at the moment, but they've always been there. So what we've got is a balance between new product growth driving sales and offsetting the market dynamics, which we don't know specifically what it's going to be in future years, but we expect there will be something. And that's why we've got the range.

Now this year, in 2025, we'll be above 5% overall. Excluding InnovaMatrix, will be above 6%. But that's an example of a headwind where this year is, I think, a classic example of the resilience of the business being demonstrated. We've got growth coming through and offsetting market headwinds.

And then on margin, just qualitatively, as we continue to grow, there will be operating leverage coming through. We will get to mid-20s as a result of completing our transformation and our simplification and productivity initiatives. We haven't set out the ambition to increase any more than that. Maybe we might, but our ambition, our preference, our priority will be to be investing to drive growth and to keep that top line moving, to keep compounding at sustainably above mid-digit sales growth dropping to double-digit EPS growth. That's the plan.

[Operator Instructions] Our next question comes from Kane Slutzkin from Deutsche Bank.

Condolences as everyone has said. Just quickly, could you talk a bit about your performance in China, particularly in Ostomy Care there? And then just on skin subs, I know we've probably sort of been quite nice not to talk too much about regulation, but just sort of bringing it back to sort of the worst-case scenario there, I guess, is sort of you have the price cap plus the LCDs. And InnovaMatrix is not on the list.

So I'm just sort of interested in what's your level of confidence now or conviction on the LCDs and whether the fixed price will effectively sort of mean the LCDs are canceled. I'm assuming if it is canceled, you have universal coverage. So yes, just some thoughts there would be interesting.

Thanks, Kane. Let me start, China and Ostomy. Look, we are growing our -- the Ostomy business in China is growing. We are gaining share, we believe, but it's growing much slower than it used to be. We're still getting good reception in hospitals and in particular, direct-to-consumer business is growing healthily for us in China. But we have to recognize that the market is growing much slower than it was a few years ago. A few years ago, we were in double-digit growth. That's now dropped to low single digit/flat. Our growth is ahead of that, but it's not as strong as it used to be.

And then InnovaMatrix?

Yes. So thank you. As we have said already, the impact of the price cap would be 1% to 2% group revenue. And with regards to the LCD, we don't know. We don't know whether the LCD will be enforced at the beginning of the year, whether it will be delayed or canceled. But remember that our total group revenue for InnovaMatrix is 3% of revenue. And as we laid out earlier in the call, we are still confident that in any scenario, we will be able to deliver double-digit EPS growth in 2026.

Yes. Just adding -- I totally agree with all that. It's probably just worth adding, we are in the background continuing to develop our RCTs. We think this is a strong product. We know it works. The feedback from health care professionals and from patients is strong. Our RCTs are developing well. We expect to report on those in 2026. So LCD, even if the LCD continues to apply, '26 is going to be a very weak year for us. But we'll look to get back on to coverage based on the RCTs thereafter and regrow the business from there.

Okay. Is the RCTs -- is it sort of when in '26, sorry, if I may ask? Was it just...

Uncertain. Not early. Not early. It will be late in '26. So they wouldn't be effective at sales coming back in '26. That would be '27.

Yes. Got you. Okay. Maybe just one final one, guys. Just following on, on Infusion Care and sort of whether there's potential for sort of double digit more sort of sustainably. Would it be fair to say the nondiabetes piece is surprising you positively? Can I just confirm that? Or is this sort of all part of the plan?

It's going very well. Yes, it's going very well. One has optimistic plans and base plans, right? It's certainly on the optimistic end. It's doing really well. We're very pleased.

Our last question is from Veronika Dubajova with Citi.

Let me also add my condolences to everybody else's this morning. A couple of questions for me, if I can, please. The first one is just curious what your thoughts are around how the changes in the catheter reimbursement in 2026 might play into the growth rate. It doesn't seem like from a group perspective, it's having any impact on your expectations, but just curious if you have any thoughts on that?

And then obviously, I know we don't have an outcome on competitive bidding. But if we could just get your updated thoughts on when you think, one, we might have an update from CMS; and two, more importantly, what's the earliest you think given where we are, that competitive bidding could come into play? That would be helpful.

Veronika, yes. So Continence Care questions. As you know, when the new coats come into play, they are at the same price initially for hydrophilic and non-hydrophilic product. We don't think that will affect overall growth materially. We think over time, it might accelerate the penetration of hydrophilic products within the market. We're already at over 60% in terms of how much hydrophilic we sell, and that's versus the market average of 40%, which means everybody else is doing about 20%.

So we're already a long way ahead of others in terms of how much hydrophilic we do sell. We think that trend, which has been moving steadily in favor of hydrophilics for a few years anyway, is likely to accelerate if the health care practitioners can specify. Remembering though that hydrophilic doesn't suit everybody. So we're not expecting it to be 100% at any point. Overall growth rates, though, not a material impact in our view in 2026, and that's right. That's what's reflected in the guidance.

As you go into future years then, you might see the prices diverge. Our thought at the moment is that, that will play mostly to the penetration rate rather than the market size in total itself. And then on CBP, there's no fixed deadline, but we could hear the initial conclusion anytime soon. I think you know in response to their commentary, they had 900,000 pieces of feedback. And they've got to go through it all and in some way, answer all of it, albeit in groups. We would not be surprised if their conclusion is that they clarify that they could, if they wanted to, include Ostomy and Continence products. But that would just be clarifying their framework. That is not the same as them deciding to do so. And there are quite a few steps to play out before that decision would come along.

There's been very strong lobbying by patients and health care providers against including these products in CBP. We support that view. We do think it could be harmful for patients, reduce choice, reduce access. On previous occasions, as you know, that lobbying has been successful. So let's see. If it does proceed, we think probably 2028 is when it would come into play for the first time. They could rush it and drive it for '27, don't see that as likely. More likely is it might slip and it could be even later than '28. But our kind of base case is, if anything happens, we won't know until during next year, and that wouldn't impact until 2028.

Any more, David?

There are no more questions in the chat room. Is there any online coordinator?

Sounds like no.

Sounds like no. Well, if anyone has any questions, please contact us.

Yes. Super. So listen, thank you very much for joining us this morning. Sad circumstances, but you know what, the business is in great shape, and it keeps going. And we're looking forward -- the whole team here in ConvaTec is looking forward very much to honoring Karim's legacy and driving ConvaTec to the next level. Thanks very much for your time.

Thank you. That concludes ConvaTec trading update for the 10 months ending October 2025 conference call. Thank you for your participation. You may now disconnect your lines.

Okay. Good morning, everybody. Are we ready to roll. Welcome to the half year 2025 ConvaTec results presentation. First, let me convey apologies from our CEO, Karim, who is not feeling well today and won't be able to attend. So I am going to present his slides as well as the CFO section, and then I'll be very happy to take questions that anyone has afterwards.

So the usual disclaimers apply and the summary message for today is that we delivered a strong performance in the first half, financially and strategically, and we're on track to deliver our guidance.

The highlights are on the slide. Revenue growth was again broad-based, further operating margin expansion at the same rate as for the last 3 years. Second year of double-digit EPS growth. Our product launches are progressing well, and so, as I said, we're on track to deliver guidance and that's for 2025 and for the medium term.

Now these strong results in the first half demonstrate the resilience of our business model. We're not reliant on any one category or geography or product for our growth. At the core of that resilient business model is: first, that we operate in 4 chronic care categories, growing structurally over time. We have strong market positions with high levels of recurring revenue, and we expect to grow ahead of the markets consistently by virtue of our differentiated products and services; second, we invest to develop those differentiated products and services, focusing in the fastest-growing segments. And innovation is directed towards satisfying unmet customer needs, building customer loyalty and strong IP positions. We now have the richest product pipeline in the country's history, and we achieved the target 30% vitality index 1 year early in 2024; third, our growth is broad-based across diverse categories, geographies and products.

Organic growth has accelerated in each of the last 6 years. We're launching 16 new products over the last 3 years and the next 2 years, which will contribute to growth across all categories. So that business model is resilient to external impacts on any individual areas. The FISBE strategy is delivering. We are investing to drive growth and that is leading to improving sales, margin and EPS. This chart shows that in each of those 4 key financial metrics, the first half of this year was ahead of the results of the last 3 years. So momentum is building and the flywheel is turning.

So now I'll move on to the financial results in our usual format. And here are the highlights. Organic revenue growth was 6.8% on the basis of our guidance, which is excluding InnovaMatrix, or it was 6%, including InnovaMatrix. Operating margin expanded by 130 basis points or by 140 basis points at constant currency. EPS growth was nearly 20% benefiting from operating profit growth and lower financing costs. Cash conversion was in line with our expectations and similar to last year. We still expect over 80% cash conversion in FY '25.

Leverage improved by 0.4 turns of EBITDA to 1.9x, and the dividend will increase by 3%, same as last year towards the full year target payout ratio of 55% to 45%.

Now sales growth was broad-based across all 4 categories, as you can see in the columns on the left. As previously reported, Infusion Care benefited from positive order phasing in the first half. And on the right, you can see a small contribution from M&A, an FX headwind and in line with our guidance, we've separated out the impact of InnovaMatrix, which was down by $6 million year-on-year.

Now let's look at the sales by category, starting with Advanced Wound Care, where organic growth was 4.3%, excluding InnovaMatrix. Growth was strong in North America and in Global Emerging Markets and it improved in Europe through the first half, supported by new products. AQUACEL AG Extra, our flagship brand continued to grow well. And the launch of ConvaFoam continued to build momentum, winning more than 50% of new hospital evaluations in the U.S. and Europe. InnovaMatrix sales decreased by 13% to $39 million, as the uncertainty around the LCDs continue to weigh. This was in line with the guidance we gave in April when the LCDs were postponed until 2026. And we continue to make progress in generating clinical evidence for the RCTs and in developing sales and indications outside the scope of the LCDs.

So then on to Ostomy Care, where organic growth was 4.7%. Growth was good in the U.S. with a continuation of positive new patient starts. It was steady in Europe, and we saw strong growth in GEM. The highlight of the period was the launch of its Esteem Body. Our new one-piece soft Convex product, which had an enthusiastic response from patients and clinicians, is building sales and is now available in all of our focus markets.

Growth was also supported by our updated accessories range, Esenta. In Continence Care, organic growth of 6.7% was driven by further volume increases in the U.S.A., backed by our outstanding customer service and the broadening portfolio of products. We saw faster growth in sales of ConvaTec product relative to other manufacturers, which is now over 55% of the mix and faster growth of hydrophilic product, which is over 60%.

We grew strongly outside the U.S.A. on a small base, which again contributed over 1 percentage point to the category growth rate. And then Infusion Care, where organic growth was 14.1%. As we guided in February, Infusion Care benefited from positive order phasing in H1. Growth in H2 will be lower. But that said, the start to the year was ahead of expectations and has led us to increase our guidance for 2025 to double-digit growth. There was continued strong demand in diabetes across long-standing and newer customers as the penetration of automated insulin delivery over multiple daily injections is increasing. And outside diabetes, growth was very strong led by infusion sets for AbbVie's Parkinson's treatment.

Our other therapies now represent mid-teens of Infusion Care revenue, up from about 10% that we have previously reported and the scope to grow further as a share of the category. We've got a strong position in Infusion Care with increasing diversity across new customers and products gives us confidence that we can sustain high single-digit growth for years to come.

So let's move on to profitability. Operating margin expanded by 130 points or 140 points in constant currency, in line with progress of the last few years. In this period, there were significant mix effects. The faster growth in Infusion Care, which has lower gross margin but lower operating cost ratio, and the sales decline in InnovaMatrix, which has higher gross margin and higher operating cost ratio led to a negative mix in the gross margin and a positive mix in the operating costs highlighted on the chart there, which offset each other and had no impact on operating margin.

Gross margin declined by 60 basis points, but without that mix effect it would have increased slightly. Price and productivity combined contributed 40 and 110 basis points, respectively. And inflation was 3%. As expected, a headwind of 110 basis points, and we expect it to continue at that level through the second half of the year.

Operating costs. In addition to the mix effect, there were further benefits from our simplification and productivity programs, which also delivered more improvement in the G&A ratio down 50 basis points to 7% of sales. This rate of progress in margin, we'd expect to be roughly the same in the second half of the year.

Now on to the bottom of the P&L. EPS increased 19% in the first half, benefiting from an increase in operating profit and a reduction in financing costs. That's shown on the left. This was a reverse of the effect last year when EPS was flat in the first half because of increasing financing costs. But it finished the year in double-digit growth. Finance costs have now stabilized. We're expecting them to be roughly flat in the second half of the year, that's in the middle column. So EPS is on track for double-digit growth for the second year in a row, in line with our guidance.

Cash conversion was in line with expectations and similar to last year at 60% operating and 35% equity. The components of cash flow, which you can see on the chart were also a similar shape to last year, and we're on track for equity cash conversion of over 80% for the full year. Net debt increased by $107 million, but leverage reduced to 1.9x.

So following the strong first half, we are confident of delivering our full year guidance, which is unchanged on the 4 key metrics set out on the chart. In the detail, the guidance for growth of Infusion Care has increased to double digit, and the guidance for finance costs has reduced by $5 million, with all other items remaining the same. So this is the fifth consecutive year of delivering sales growth within our target range. The fourth consecutive year of operating margin expansion towards the target of mid-20s, and the second consecutive year of double-digit EPS growth. These financial results are starting to compound.

So now let's move on to the strategic update. ConvaTec is well positioned to deliver that compound growth in top line, earnings and cash because of our leading positions in attractive and growing markets, the resilient business model that I described at the start of the presentation, and the pivot to sustainable and profitable growth that has been delivered through the FISBE strategy.

The growth delivered has been broad-based. This chart shows the progress over the last 3 years with each category contributing. There is strength and resilience in the broad-based portfolio. The individual contributions to growth will change from period to period, but the diversified portfolio keeps delivering. We have been delivering this growth across the 4 categories, which you can see at the top of the chart through changes in the reimbursement landscape.

Reimbursement dynamics are an expected part of our business. We plan for them. We focus on delivering value for patients, payors and health care professionals. And we believe that in the end, product efficacy always wins. We've developed strong competencies to work continuously in this area of reimbursement across our centers of excellence at the bottom of the chart, which manage pricing, market access and reimbursement, medical and regulatory.

Here in the middle of the chart are some examples of recent or current areas of work. In Wound Care, we're developing ConvaNiox and generating clinical evidence to demonstrate its strong, unique efficacy and to secure reimbursement based on its high value to the health care system. We're also generating clinical evidence for InnovaMatrix to secure long-term coverage and access to the private payor market in the U.S.

In Ostomy Care, we're launching Esteem Body, soft convexity, one-piece at a higher reimbursement rate based on improved efficacy, and we're developing the 2-piece equivalent as well. On the other hand, we'll be providing feedback on the recently proposed competitive bidding process, more on that in a moment.

And in Continence Care, we're developing the portfolio of ConvaTec manufactured and hydrophilic products to be best positioned to serve customers and to be best positioned for whatever changes there are in reimbursement.

In Infusion Care, the recent developments in our product portfolio and extended wear for diabetes, and Neria Guard for Parkinson's, they attract higher pricing, reflecting their improved value to customers and patients.

The message is that we are working in an evolving reimbursement landscape all the time. With our resilient business model, a diverse base of growth, we expect to deliver sustainably 5% to 7% organic revenue growth and double-digit EPS growth through the reimbursement dynamics that arise.

So let's look at the 2 most recent developments. First, in Wound Care, there is uncertainty about the potential implementation of the LCDs next January. And CMS has just announced a potential price of $125 per square centimeter for all skin substitutes for consultation. This price is much lower than most products are currently reimbursed at, including ours. It would have significant implications for the structure of the segment, especially for the more expensive human tissue products. Exposed to this change is approximately 3% of group revenue. And if it's implemented as drafted, we expect the impact could be a headwind of about 1% to 2% of group revenue in 2026.

Now there's a long way to go before this is implemented, a lot of moving parts, and there could very well be changes to the draft proposal as they were to the initial draft LCDs. We're focusing on strengthening our position, and we're confident of the long-term growth opportunity irrespective of any short-term volatility. InnovaMatrix works. Product efficacy is the most important factor leading to market share. Our clinical evidence is good and it's increasing. And ours is an advantageous position for supply and on cost of goods.

If this proposal happens as currently drafted, it would have a far greater impact on higher cost players, presenting a volume opportunity for us. So second then, on the right, in Ostomy Care and Continence Care, CMS has just announced the proposal to change rules to enable a competitive bidding process in these areas. This too is in consultation and may face changes before any implementation. 7% of our group revenue is directly exposed to this potential change, being the reimbursement to 180 from Medicare.

There is an additional 2% of sales to other distributors, which we estimate are also reimbursed by Medicare. But the impact of any CBP on that indirect revenue would be much less. So if implemented as drafted, which it might not be, we would expect a net headwind of 1% to 2% of revenue in 2027 or later. And you get to that 2% using an average price reduction delivered across previous CBPs of 30% and on the 7% of revenue. And the range down to 1% is because of the volume gain opportunity that there would be. We are in a strong position for whatever changes arise. And therefore, here too, we are confident of the long-term growth opportunity, whatever the short-term volatility.

We are an integrated distributor and manufacturer with the leading position of the largest and loyal customer base, a strong and broadening portfolio of products. There are approximately 3,000 distributors, which are reimbursed by Medicare for these products currently. And CMS has indicated that under a competitive bidding process it might expect 7 or 8 for each category, not 3,000.

So if this proposal is implemented as drafted, there would be far fewer players, and there will be an opportunity for us to gain volume.

So to summarize on reimbursement, these dynamics have always been a feature of the health care market and will continue to be so. These recent consultations are not extraordinary. In 2025, we have a similar headwind from InnovaMatrix of just about 1%, and we will still deliver within our target sales growth and double-digit EPS growth. We set our guidance assuming that such reimbursement dynamics will arise. We'd not expect these recent announcements to knock us off track from delivering our medium-term targets of sustainable growth.

Now let's take a quick look at the focus areas for each category, starting with AWC. So on this chart, you see the 4 segments of Wound Care that we focus on and the structural growth rates in each. The middle row shows the key and new products in each segment. On the left, AQUACEL AG Extra is our market-leading flagship brand, which continues to perform well. The other products are all new. This is the richest pipeline of new products we believe of any competitor in Wound Care.

Our focus currently in Wound Care is to continue driving the success of AQUACEL, to build on the launch of ConvaFoam, to begin launching ConvaNiox and ConvaFiber this year and ConvaVac next year and to deliver further clinical evidence of the efficacy of these products, especially in other metrics.

In Ostomy Care, this chart shows the segments we compete in and their respective growth rates. In the middle of the chart are our main products in each segment, existing and new, and the innovation is focused in the fastest-growing segments.

Our focus is on driving the Esteem Body launch, building on the good momentum we have in GEM with our existing product portfolio, further developing the Esenta accessories range, and filling the main remaining gap in our product portfolio with Natura Body in 2027.

In Continence Care, here, we're showing the category by geographic region. We've got a strong presence in the U.S., the #1 home care brand, 180 Medical, with over 40% share, but we're small in Europe and GEM.

In the middle, you see our existing and new products, in particular, the GCA brand using our hydrophilic FeelClean Technology and the value brand Cure. Our focus is on maintaining our outstanding customer satisfaction and loyalty scores in the U.S. to develop our market-leading position, growing the penetration of ConvaTec and hydrophilic products and building our services and product presence in Europe and GEM to grow quickly from a small base.

And then in Infusion Care, we show the Diabetes segment and other therapies. In Diabetes, the number of insulin intensive people using pumps is still very small at about 6% of the potential total. The growth in pump use is accelerating, driven by innovation in pumps and monitors. In therapies outside diabetes, pump usage is growing quickly. For pain management, for immunoglobin deficiency and especially for Parkinson's, led by AbbVie's new VYALEV therapy.

Our infusion set technology can support a wide range of different types of pumps. Our focus in this category is working with customers to innovate, meeting the growing demand for our infusion sets with great service and diversifying our customer and product base. So I hope that summary update of our strategic agenda by category is helpful in demonstrating the breadth and diversity of ConvaTec's current and future growth.

So let me finish with a recap. We have a resilient business model based on leading positions in growing markets, diversity of growth across our categories, geographies and products, all underpinned by a strong pipeline of new product innovation. The first half saw strong delivery from that business model financially and strategically, including good progress on product pipeline, colleague engagement and customer loyalty. We are on track to deliver our financial guidance for 2025 and for the medium term.

Thanks very much. I'll now be happy to take any questions. David, are you going to help compare the questions?

[Technical Difficulty]

It's Graham from UBS. Just 2 questions from me. So firstly, on the wound acceleration through the year. Should we expect that to get to mid- to high single digits once you get ConvaNiox? And does ConvaNiox launch a bit differently to ConvaFoam, so maybe faster? And the second question then is on CBP, which is you've given us the revenue potential outlook. I suppose on the cost side, is it feasible that you can switch products -- more products to your own brand, which will presumably help gross margins? And is there much OpEx change in the business model in case studies where you've gone to the CBP elsewhere?

Wound Care, first of all, the acceleration in sales growth, we do expect to build through this year. But we're aiming for mid-single digits growth in 2025 for Wound Care. ConvaNiox won't have a material impact in 2025. You asked if ConvaNiox NOx would launch differently from ConvaFoam. Well, to a certain extent, it will because it's effectively a new category in our minds. In ConvaFoam, we are updating -- replacing existing foams with a superior product. But in ConvaNiox, there's nothing like it out there. ConvaNiox, we wouldn't expect to build quickly. Let's not get carried away. It will build steadily and slowly but for a long time in our mind. Once the new products are all launched because we got 5 of them in Wound Care, we do see Wound Care being a high single-digit business in the medium term, but not this year.

And then on CBP. What is the opportunity if that happens? And I do want to emphasize it's early days. Can we replace -- can we sell more of our own product? I think that was one of the questions. Yes, we can. And we already are doing. There's been a steady increase in the proportion of ConvaTec manufactured product because our product portfolio is getting better. Remember, in 180 Medical, the emphasis is what does the customer wants. It's about customer loyalty, driving that retention, driving the growth in volume of customers. And as we get better products and as our portfolio expands, one would expect naturally for more of the products to be ConvaTec that are sold.

So I would expect that trend to continue, maybe accelerate a bit. Operating costs are variable as they are in all of our categories. So we will adjust accordingly. But our emphasis will be on driving that growth long term. Do you want to..

[ John Hemeon ] from Barclays. I have 2 questions, both are on InnovaMatrix. In the current environment, the doctor maybe gets reimbursed at like $1,000, ConvaTec maybe gets half of that. So there's a differential there. In a world where the doctor is going reimbursed at $125, what would you expect ConvaTec's realized price to be?

And then the second question is on the price cut and the revenue headwind guidance. If your realized prices going from $500 to maybe $125, that feels like a bigger price cut than the 1% to 2% headwind that you're guiding to, which is like a 40% to 60% cut to the 3% revenue. So why is it not a bigger headwind if the price cut is greater?

Yes, good question. Thanks, John. So InnovaMatrix, let's recognize -- this development in InnovaMatrix in the U.S. has been going for some time. We've shared previously that we are developing our sales in other indications as well. So to the question on what will the discount be in the physician's office. Obviously, for -- if the price is as low as $125, this is going to lead to a significant change in the structure of the segment. To our estimation, there could be many of the -- especially higher cost human tissue type operators that just don't continue. And so you'd expect, for sure, there to be some incentives for the physician's office to continue, but it would be much less than currently. So we've made an estimation of what we think it is, but that remains to be proven out. The worst it can be in InnovaMatrix obviously is a 3% headwind because that's all the sales there are. We don't think it's going to be like that because as our product, which is strongly positioned, and we continue to generate clinical evidence to prove that. As that has a volume gain opportunity and as the other indications grow, we think that there is a long-term growth opportunity for InnovaMatrix. And therefore, in a worst case, 2%, we'd like to aim for 1% down even at that low price level, if that's what happens. I mean 3% is the worst case. I don't think 1% to 2% is overly racy in terms of headwind.

Seb Jantet with Panmure Liberum. So just sticking on skin substitutes and CBP. Just the first on the skin substitutes, you talked about revenue, but just help me understand what that happens, what the 1% to 2% hit does to your bottom line because obviously, you're taking big price cuts there, which are going to obviously affect your gross margin and your bottom line, but you've obviously got some OpEx you can move around there. So I'm just trying to understand what that does?

And then the other piece is just on the CBP piece. Just trying to understand, I mean, you said 1% to 2%. You talked about 30% price cuts. You talked about 9% of potential sales in -- there must be some volume assumptions that you are making to get to that 1% to 2%, even the top end. So just if I could just get a sense of what you're assuming for volume kind of improvements against that.

Yes. Sure thing. Well, let me do it in reverse. On the CBP 1% to 2%, what we have done there is, first of all, it's 7% of revenue that is directly impacted. The indirect impact on the smaller piece of revenue, we think, is a fraction of that and probably a rounding error. So we've taken very simply 30% price reduction which is the average of the CBPs over time, again, 7% of sales. There's your 2%. And then reducing 2% towards the 1% would rely on volume recovery of some kind.

Now we think we'll be successful in that. I quoted the number of distributors currently in the U.S. market as approximately 3,000 if that goes down to under [ 20% ], which is the expressed desire of CMS, we think we'd be in a very good position to gain volume. That's why it might not be as bad as 2% worse case, could be better towards 1%. That's how we've come up with that number.

And then on InnovaMatrix dropping to the bottom line, yes, it's a price cut. But do remember what I described in the margin bridge, which is that InnovaMatrix has very high operating costs. It's a complicated sale. And so we would have to adjust accordingly. We've previously said is that although it's a very high gross margin, InnovaMatrix operating margin is not that far from the group's average. So you'd expect a drop-through rate a bit above the group's average operating margin, but not dramatically so.

Ed Ridley-Day from Rothschild and Co. Redburn. Bigger question on the CMS discussions. But to what extent are you speaking to them about the broader benefits of xenograft versus allograft, the safety benefits, the administrative benefits and to what extent are they actually receptive in those conversations? And then I had a quick question on Neria Guard, clearly an interesting product. Can you talk to the contribution from Neria Guard to IC?

Okay. We have a very close and extensive dialogue with CMS, as you would expect. Like many others in the industry, the discussion, the debate, the lobbying is flowing freely. We talk to them about all sorts of things. I won't get into the details of what they are. But that's why we want to be cautious about these 2 announcements are initial draft proposals, and they are under discussion. And that discussion is genuine. And there are pros and cons and there are lots of people for and lots of people against, and we saw how that played out with the LCDs. They were extended, they changed. We wouldn't be surprised if a similar thing happens in the case of these announcements, too. Your other question, sorry.

On Neria Guard.

Neria Guard, yes. Look, Neria Guard and in particular, for Parkinson's and AbbVie, look, it's growing really well, growing really strongly. We've said it's not that other therapies area has grown from 10% of the category to now being over 15% of the category. And we won't get into specifics, but I said in the presentation that the pricing reflects the value to the health care system. So it does come at a higher margin. Yes.

Richard Felton from Goldman Sachs. Two questions for me, please. First one is just a clarification. But the 1% to 2% headwind from InnovaMatrix, is that including both the reimbursement changes announced this month and LCD? That's the first question.

And then the second question is on the midterm guide for mid-20s margin by 2026, 2027. Obviously, you've reiterated that guidance this morning. Is it fair to assume that the path to achieve that is maybe a little bit different now versus what it was 6, 12 months ago? And if that is the case, what gives you confidence that the other parts of your business can pick up some of the slack to compensate for the reimbursement headwinds.

Yes. Okay. Let me do that in reverse as well. One of the points we're trying to make in the presentation was that we plan for something to happen. And it's the nature of the health care industry, reimbursement dynamics. And so are we still expecting to hit our medium-term margin target? Yes, we are. Is the shape of it going to be different from how we originally planned it? Well, I'd say no, not really because we had planned to be delivering on the levers which are within our control. It is simplification and productivity across operations, commercial and G&A. It's pricing, which we saw another 40 basis points of price improvement in the first half. Operating leverage is helping us as our top line growth picks up.

All of those levers within our control are still contributing to the mix improvement -- to margin improvement, excuse me. And then we've got some things going on in reimbursement, but we always have had and we always will have. So I don't think these most recent announcements knock us off track from the trajectory that we were on. And what was the first one?

Does the 1% to 2% for InnovaMatrix headwind, is that LCD and the...

That's right, excuse me. So no, it doesn't because we think that if the price goes to $125, that achieves the objective that the LCD was seeking to achieve, which is reducing excess cost and removing bad actors from the sector. So if the price were to stick at $125, no guarantees, but we don't expect the LCD would carry on in its current form. Yes.

Jack from RBC. First, on Infusion Care manufacturing. You mentioned in the release that you're kind of looking to expand manufacturing in Infusion Care. Is that a change given the strength you've had kind of the back into this half? Or is that kind of -- was that already in the plan? And then how much opportunity is there to kind of really automate this is kind of processes within that manufacturing, kind of I guess a footprint there to improve gross margin over the medium term?

And then just following up on the ex U.S. InnovaMatrix and the other indications you spoke about, could you give a bit of a bit more detail there. So kind of what the time lines are and what your expectations are over the next couple of years?

Yes. InnovaMatrix capacity, I think what I said in the presentation was we have a focus on growing -- on meeting the growing demand with great service. It's not a new plan, no. We've always said Infusion Care is going to be growing high single digits. It's a long-standing plan of ours to be expanding our capacity to meet that demand. Sure, this year, we think it's going to be double digit, not high single digit. But in the grand scheme of things, that doesn't make much difference to the manufacturing plan. These automation projects, capacity projects. They take years to bring to fruition. So we've been planning this a long time. And then InnovaMatrix outside the U.S.A. Look, we are launching in Latin America now. We have ambitions to launch in other markets, too.

But honestly, the market opportunity is currently much smaller outside the U.S.A. So it's the U.S.A. that's going to move the needle most when it comes to InnovaMatrix and Biologics.

Sam England from Berenberg. So first one, just on Ostomy Care in the U.S. You called out growth in new patient starts in the release. Do you think you're now growing ahead of the market in the U.S.? Or do you think it's going to take the Natura launch to sort of get that business sustainably growing ahead of the U.S. market?

And then on the Wound Care side, can you just give us a bit of an update on ConvaVac ahead of the planned launch in 2026? I suppose where are you in the product development cycle at the moment? And what are you doing to avoid some of the issues the business is at historically in negative pressure?

Yes. So ConvaVac then, we are well progressed with our product development. We are developing a very nice product. We're very excited about it. It will have features that the existing single-use negative pressure wound products don't have. So we think we've got a good opportunity to grow share. ConvaTec has had a checkered history in this area with the launch of Avelle, which wasn't really good enough and hasn't competed effectively. But we've learned our lesson there, I think. And the launch of ConvaVac is being properly prepared, not being rushed. We're on track for next year, and we're looking forward to a good launch and growing share. Yes.

And then in the U.S., I wouldn't say we're gaining new patients ahead of the market yet, honestly. We have stabilized our share loss with a much improved commercial execution, much better customer loyalty, contact centers, websites, better training, better leadership, better education. And so we've stabilized that. We are gaining share revenue-wise because our accessories range does really well. But to really get motoring in terms of market share growth there, you're right. We do need to get Natura Body to make a big difference for us.

This is Anchal Verma from JPMorgan. Two questions, please, Jonny. The first one is on H2 margins. The full year guidance implies a decent step-up in H2 margins, which is in line with seasonality and the efficiency measures. But can you provide a bit more color on the potential magnitude? Is it fair to assume a similar year-on-year improvement as we saw in H1 continuing to H2, so around 130 bps of year-on-year improvement in H2?

And then the second one is on tariffs. You've outlined around $5 million to $10 million of headwind. Can you please outline what are your assumptions for this number? And what are the tariff rates that you've used for this?

Margin first. Yes, we would expect a similar quantum of improvement in the second half year-over-year. It might not be $130 million, it might be $100 million, but we're on track to deliver our mid-22s, as it were, [ 22% to 25% ] is our target range, and we're on track to achieve that. That requires a significant step-up in operating margin in H2 compared to H1, just like we did last year. So there is a little bit of seasonality in the margin. And with a growth of $130 million in H1, we're bang on track to deliver that for the full year.

And then on tariffs, yes, look, it's -- it's a moving target, but most of our products are exempt under the Nairobi protocol. What we have included in that estimate is the few products that aren't. And that's mostly a bit of the Wound Care and the FMS within Ostomy, which are subject to those tariffs. And the tariff rates, the tariff rates vary depending where they're coming from. We've used what's out there, mostly 20%, but there are some exceptions for different sources of product. We've looked into it in great detail.

There's 1 more in the room and then I've got a couple online. Miles.

Miles Dixon from Peel Hunt. Just a couple of quick ones, if I could, Jonny. On ConvaNiox firstly, is that supposed to be adjunctive therapy relative to InnovaMatrix? Secondly, on the -- you've kindly given us a guide on the CBP and the LCD. Can you give me a broad idea of what the U.S. revenue portfolio exposure is to Medicaid, Medicare and commercial payors? And then maybe I'll get to the third one last separately.

Yes. Thank you. Don't stretch my memory too far. Well, on the second one, I think we've shared those numbers, which is Medicare, public payors altogether, it's 12% of group revenue. And the Medicare piece itself is 7%, and that spreads across Ostomy and Continence Care, which is the primary components. And then what was the first one.

On ConvaNiox and whether it's adjunctive.

Yes, I'm sorry. Of course, yes, so ConvaNiox works, yes, with InnovaMatrix. They do different things. So InnovaMatrix offers a scaffolding on which the skin can be triggered to regrow. ConvaNiox, you might use earlier in your wound treatment protocol. It has a dual function. It increases the blood flow, which accelerates healing. And it also is an antimicrobial. So in InnovaMatrix, there is no antimicrobial action. For instance, if you've got an infection, you wouldn't use InnovaMatrix. You would use ConvaNiox. InnovaMatrix, you might use later on and for bigger wounds. So they work together.

Got it. And lastly, on what's been going on since -- or early July in managed care. Are you seeing any signs yet of days sales out stretching, is there any risk to year-end receivables?

Not that we've seen.

We've got a couple of questions online. I'll just take them in the order that they came. First one was also related to ConvaNiox . Have we got any update on the likely price point for the product? And is there any crossover into the Biologics stressing price cap range?

So on the latter, no, because it's not a skin substitute. And on the former, I think best wait and see. What we are doing at the moment is launching steadily, slowly, properly in Europe. We're building clinical evidence to demonstrate the product's efficacy and will come to reimbursement levels in the U.S. at the right time next year. What we'll be keen to secure is reimbursement that reflects the strong value that we think ConvaNiox adds to the health care system.

That was from [ Gregoire Dominile ] at Rothschild. The next one is from [ Cain ]. His first question around InnovaMatrix has been answered already. He's asking about whether there's any change to our capital allocation priorities and whether we would consider a share buyback at a certain level at the current level.

No change to capital allocation priorities. Just to remind us, they are investing to drive organic growth. We're doing more of that this year than we have ever done before. Ordinary dividend, we are targeting a payout ratio of 35% to 45%, and we're comfortably within that this year. Appropriate M&A, we're still looking for M&A, which adds to our competitive strengths in our focus areas, but we're very disciplined about it. And then thereafter, any surplus capital will be returned to shareholders. But we're not triggered by share prices in applying those capital allocation priorities.

Thank you. Any more questions in the room. To follow up on Jon.

Just on ConvaNiox, obviously has an antimicrobial element to it. And I know you said this is a new category of product, but does it expand indications to wounds that normal antimicrobials can't treat. And what I'm getting at, is there any risk of cannibalization between ConvaNiox and the AQUACEL range if they're both antimicrobials and one is much better than the other?

There can be times when you would choose to use ConvaNiox as your antimicrobial instead of, for instance, a silver product. But I don't think we'd mind that because it's more effective, and therefore, we would be expecting better reimbursement.

Okay. Stunned them into silence. Well, thank you, everybody, for your attention this morning. You know where we are. Any further questions, please let us know. Thanks very much.