ConvaTec shares plunged 33.10% ($74.20) Monday after the company slashed its revenue guidance and announced the departure of CEO Paul Moraviec.
The advanced wound care company said Moraviec informed the board that he "wishes to retire." He stepped down as CEO and ceased to be a company director immediately, ConvaTec noted. Rick Anderson, a non-executive director, will step in as the interim CEO and will be based at the company's headquarters in Reading, United Kingdom.
“We have made significant progress during my time as chief executive officer and I am confident that ConvaTec now has the strong platform, infrastructure, and leadership to enable the business to flourish," Moraviec said in a company statement. "I would like to thank all my colleagues across ConvaTec for their hard work and dedication, they have taken ConvaTec to a leading position in the medtech industry and I look forward to watching the company’s future success.”
While few details were disclosed about why Moraviec suddenly decided to retire from the company he took public two years ago, the news coincides with a separate announcement regarding ConvaTec's financial guidance. The company said there has been a change in inventory policy by its biggest infusion devices customer, which is expected to have a material negative impact on fourth-quarter revenue of between $18 million and $23 million.
To a lesser extent, ConvaTec also attributed the revised guidance to challenging market dynamics in specific markets in advanced wound care. The company is well known for its ostomy products and other advanced wound care products. ConvaTec previously expected full-year organic revenue growth of between 2.5% and 3.0%. Now, the company expects full-year organic revenue growth to be flat, or no more than 1.0%. Guidance for adjusted EBIT margin in FY 2018 has also been revised down to 23% to 24%, from 24% to 25%.
ConvaTec also noted that Tim Moran, who had been president of Americas for the company, left in Septemberto take an external position. Ken Donlon has assumed the position on an interim basis.