Smith & Nephew maintains guidance after strong first quarter
By Josh White
Date: Wednesday 01 May 2024
(Sharecast News) - Smith & Nephew reported first-quarter revenue of $1.39bn in an update on Wednesday, up 2.9% year-on-year, as its orthopaedics business continued to recover.
On a reported basis, including a 70-basis point currency headwind, revenue grew 2.2%.
The FTSE 100 company said the growth, in line with its projections, was achieved despite facing one less trading day compared to the prior year, translating to approximately a 1.5 percentage point headwind for the quarter.
Within segments, orthopaedics revenue experienced a 4.4% underlying increase, propelled by strong performances in hip and knee implants outside the US, other reconstruction, and trauma and extremities, driven by enhancements outlined in the board's 12-point plan.
However, the firm noted continued challenges in US hip and knee implants, although product supply had improved, and new leadership was bolstering commercial execution efforts.
Sports medicine and ENT revenue saw 5.5% underlying growth, supported by robust performances in sports medicine joint repair, aided by previous product launches and the expansion of Regeneten.
Nevertheless, the segment faced ongoing headwinds from China.
Advanced wound management revenue experienced a 2% underlying decline, attributed to a decline in advanced wound bioactives due to anticipated volatility following a strong fourth quarter.
However, that was offset by sustained growth in advanced wound devices.
Smith & Nephew maintained its full-year guidance, anticipating underlying revenue growth within the range of 5% to 6%, with a trading profit margin expected to be at least 18%.
"Revenue growth in the first quarter was driven by solid performance in our orthopaedics, and sports medicine and ENT businesses, partially offset by some anticipated softness in advanced wound management," said chief executive officer Deepak Nath.
"Our 12-point plan is on-track and the progress in orthopaedics was again evident from the strong growth across most segments, and we expect the remainder to improve as the year progresses.
"We are confident in our outlook and look forward to all three of our business units contributing as we deliver another year of strong revenue growth."
At 0822 BST, shares in Smith & Nephew were up 3.22% at 1,011.04p.
Reporting by Josh White for Sharecast.com.
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