Smith & Nephew plc (LSE:SN, NYSE:SNN) trading report for the third quarter ended 30 September
Q3 revenue was $1,152 million, up 3% on both a reported and underlying basis
• Revenue growth was 1% in the Established Markets, with US up 2%
• Emerging Markets up 9%, maintaining improved performance achieved in first half of 2017
• Reconstruction revenue up 4%, with 6% growth in Knee Implants, continuing strong, market-beating
performance, and Hip Implants up 1%, returning to growth
• Advanced Wound Management revenue grew 2%, reflecting recovery in Bioactives offset by Wound
• Full year outlook at the lower end of guidance range
• Review of cost base initiated to further Simplify and Improve our Operating Model
• Chief Executive Officer’s intention to retire by the end of 2018 announced
• Agreement signed to acquire Rotation Medical, Inc., the developer of a novel tissue regeneration
technology for shoulder rotator cuff repair
Commenting on Q3, Olivier Bohuon, Chief Executive Officer of Smith & Nephew, said:
“I am pleased with what we have achieved so far in 2017, where our focus on execution is delivering
improvements in performance. Of particular note is the sustained nature of the market-beating growth
from our Knee Implants franchise and the strong Emerging Markets recovery across the year. We
delivered 3% revenue growth in the quarter, in-line with guidance despite the recent natural disasters in
the Americas delaying some procedures.
“After the quarter end we announced an agreement to acquire Rotation Medical. Its pioneering
bioinductive implant is a novel tissue regeneration technology for shoulder repair that treats an unmet
clinical need and is highly complementary to our leading Sports Medicine shoulder portfolio.
“Looking ahead, our focus on accelerating the top-line is unchanged and we are also starting the next
stage in our continuing drive to improve efficiency across the Group. I am as determined as ever to keep
pushing for further success, and to leave Smith & Nephew an even better company.”
Ingeborg Øie +44 (0) 20 7960 2285
Smith & Nephew
Charles Reynolds +44 (0) 1923 477314
Smith & Nephew
Deborah Scott / Simon Conway +44 (0) 20 3727 1000
Analyst conference call
A conference call to discuss Smith & Nephew’s third quarter results will be held today at 8.00am GMT /
4.00am EDT, details of which can be found at www.smith-nephew.com/results.
1. All numbers given are for the quarter and nine months ended 30 September 2017 unless stated otherwise.
2. Unless otherwise specified as ‘reported’ all revenue growth throughout this document is ‘underlying’ after adjusting for the effects of currency translation and including the comparative impact of acquisitions and excluding disposals. All percentages compare to the equivalent 2016 period.
Underlying revenue growth is used to compare the revenue in a given period to the comparative period on a like-for-like basis. Underlying revenue growth reconciles to reported revenue growth, the most directly comparable financial measure calculated in accordance with IFRS, by making adjustments for the effect of acquisitions and disposals and the impact of movements in exchange rates (currency impact), as described below.
The effect of acquisitions and disposals measures the impact on revenue from newly acquired material business combinations, technologies and recent material business disposals. This is calculated by comparing the current year, constant currency actual revenue (which include acquisitions and exclude disposals from the relevant date of completion) with prior year, constant currency actual revenue, adjusted to include the results of acquisitions and exclude disposals for the commensurate period in the prior year.
Currency impact measures the increase/decrease in revenue resulting from currency movements on non-US Dollar sales and is measured as the difference between: 1) the increase/decrease in current year revenue translated into US Dollars at the current year average rate and the prior year revenue translated at the prior year average rate; and 2) the increase/decrease being measured by translating current and prior year revenue into US Dollars using a constant fixed rate.
The full year results will be released on 8 February 2018