Wednesday 21 November 2018

Smith & Nephew warns over sales after ‘mixed’ start to 2018

The firm now expects full-year underlying sales to increase by 2% to 3%, having previously guided for growth of 3% to 4%.

Artificial hip and knee maker Smith and Nephew has warned over its full-year sales outlook after seeing a 'mixed performance' in the first quarter
Artificial hip and knee maker Smith and Nephew has warned over its full-year sales outlook after seeing a 'mixed performance' in the first quarter

By Holly Williams, Press Association Deputy City Editor

Artificial hip and knee maker Smith & Nephew has warned over its full-year sales outlook after seeing a “mixed performance” in the first quarter.

Shares in the FTSE 100-listed firm fell as much as 8% as it revealed underlying revenues failed to grow in the three months to March 31.

On a reported basis, sales rose 5% to 1.2 billion US dollars (£882 million), but this included a 5% currency boost.

The firm now expects full-year underlying sales to increase by 2% to 3%, having previously guided for growth in the range of 3% to 4%.

Our businesses delivered a mixed performance in the first quarter Outgoing chief executive Olivier Bohuon

Its trading profit margin is expected at or above the same level reported in 2017, rather than its previous target of growth of 30 to 70 basis points, the firm added.

Smith & Nephew saw a “softening” of some of its established markets across Europe, Canada, Japan, Australia and New Zealand, where revenues rose by 3% and fell 2% on an underlying basis.

But turnover jumped 15% higher in its emerging markets, with 9% underlying growth.

Outgoing chief executive Olivier Bohuon, who is due to step down on Monday, said: “Our businesses delivered a mixed performance in the first quarter.”

He added: “We expect trading conditions to return to more normal levels, which, combined with the continued roll-out of new products and our sustained emerging markets performance, gives us confidence in delivering an improving performance trend during the remainder of the year.”

Mr Bohuon is being succeeded next week by Namal Nawana – the former boss of medical diagnostics firm Alere and a previous executive at Johnson & Johnson.

He takes over amid pressure to boost performance at Smith & Nephew, with the group having recently faced calls from activist investor Elliott Advisors to sell off unwanted assets.

Press Association

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