Smith & Nephew on track to hit 2018 target after strong quarter
By Hull Daily Mail | Posted: 2 Nov 2018
Smith & Nephew remains on track to meet its 2018 target after recording a two per-cent revenue rise in the third quarter of the year.
The medical equipment giant, based in Jackson Street, saw revenue soar to £1.03bn, and enjoyed a strong quarter of growth in its emerging Chinese market.
In July, Smith & Nephew saw its half-year profits slide to £282m, but stood firm on its full-year expectations.
It cited large restructuring costs – including £44m spent on the launch of the group’s Accelerating Performance and Execution (APEX) programme – as the reason for the dip, and has now recorded a strong Q3.
Namal Nawana, CEO at Smith & Nephew, said: “Improved underlying revenue growth in the third quarter was led by growth in the US and Emerging Markets. We are on-track to deliver our full year guidance.
“These results were achieved whilst successfully redesigning how we will run the company.
“There is still more to do, and I am pleased with the pace of progress and engagement across the organisation.”
Revenue in Q3 was up two per cent on a reported basis, and three per cent on an underlying basis.
The US market proved to be particularly strong for Smith & Nephew, as revenue in the States soared by four per cent.
It was a similar story in the company’s emerging markets – including China – where revenue grew up 10 per cent.
While the medical equipment manufacturer saw its advanced wound bioactives continue to decline, sales of reconstruction, sports medicine joint repair and advanced wound devices spiked.
Shares jumped 5.2 per cent to 1,340 pence in early trading on Thursday, after the positive update.
The company, which was founded more than 160 years ago in Hull, is currently undergoing an overhaul in the way it operates.
Mr Nawana replaced former CEO Olivier Bohuon earlier this year to take the reins of the company, and said he was “focused on energising and organising the business to accelerate growth.”
Smith & Nephew earlier this year cut its forecasted growth for the year after a “weaker” start to 2018.
Despite the £44m costs piled into the new APEX programme, the company said it would result in annual savings of more than $50m.
Smith & Nephew also forecasted the programme would save $160m by 2022.
The APEX programme involves the company reducing its manufacturing base and supply chain costs, along with overhauling its sales stragegy.