Smith & Nephew reported consensus-beating Q1 21 sales growth of 6.2%, driven by ‘sports medicine & ENT’ (+10.4%) and ‘advanced wound management’ (+9.3%). Regionally, growth was driven by emerging markets (+21.8%) and the US (+7.1%), which made up for the 1.8% decline in other established markets.
The firm also reinstated the outlook and now expects FY21 underlying growth of 10-13% with a trading profit margin of 18-19%.
We will raise our estimates and target price, following the strong perform
Companies: Smith & Nephew PLC
Smith & Nephew reported an in line Q4/FY20 top line (-7.1%/-12.1%). The Q4 decline was attributable to other reconstruction (-45.6%), knees (-16.2%) and ENT (-33.1%), while Hips surprised with a flattish performance (-0.5%) in a difficult operating environment.
The firm missed profit estimates, as trading profit fell 42% (margin -7.8pp to 15%). The dividend of 37.5c/share was unchanged from the prior year.
FY21 sales/profit outlook remains suspended due to COVID-19 uncertainties. We will lower
Smith & Nephew reported big declines in Q2 20 with sales down 29.3% on an underlying basis – driven by broad-based declines – and the H1 20 trading profit margin contracting by 12.9pp (to 8.5%). However, the company announced an interim dividend of $0.144 per share (flat).
FY 20 guidance remains withdrawn, thanks to the persistent pandemic uncertainty. In spite of the soft profit numbers, we will be raising our estimates to account for the faster than expected recovery in elective surgeries.
Smith & Nephew saw Q1 20 revenue decline by 7.6%, on an underlying basis – driven by broad-based weakness, as the COVID-19 outbreak hurt elective procedure volumes. With April revenue down 47%, there is more pain ahead before recovery. However, with procedure volumes returning in key markets, a recovery in H2 looks realistic. Following the Q1 update, we do not expect any significant change in estimates as the Q1 numbers as well as April trading were only marginally better than our estimates.
Smith & Nephew reported good Q4/FY 19 numbers – trumping estimates. Q4/FY 19 sales were up 5.6%/4.4% on an underlying basis – driven by broad-based momentum. For FY19, the trading profit margin came in at 22.8%. The company also announced a final dividend of $0.231 per share (+4%).
Management expects FY 20 revenue growth of 3.5-4.5% with a trading margin at or slightly above the FY 19 level (22.8%). Following the good performance, we will be raising our estimates and target price.
Smith & Nephew reported Q3 19 top-line growth of 4% on an underlying basis – driven by Sports Medicine Joint Repair (+12.2%), Advanced Wound Devices (+15.4%), Knee Implants (+4.6%) and ENT (+5.3%). This was partly offset by a decline in Advanced Wound care (-1.8%). Management upgraded FY 19 revenue expectations to 3.5-4.5% (vs 3-4% earlier), while lowering the trading margin expectation to 22.8% (vs 22.8-23.2%). Following the good Q3, we will be raising our estimates and target price.
Smith & Nephew reported a strong set of Q2 19 numbers. Sales were up 3.5% on an underlying basis, driven by Sports Medicine Joint Repair, Knee and Advanced Wound Devices. Regionally, emerging markets led the growth. H1 19 trading profit came in at $532m, with the associated margin at 21.4%. The company announced an interim dividend of 14.4c per share. Management raised FY 19 revenue guidance to 3-4%. Following the strong Q2, we will be raising our estimates.
Smith & Nephew (LSE:SN) acquires optical tracking technology company | Polarean Imaging (POLX): Trial update | Venn Life Science (VENN.L): Proposed Placing
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Smith & Nephew reported Q1 19 sales growth of 4.4% on an underlying basis – driven by Sports Medicine Joint Repair (+11%), Advanced Wound Devices (+16.4%), Knee Implants (+4.1%) and Trauma (+4.8%). In contrast, Arthroscopic Enabling Technologies (-1.1%) and Advanced Wound Bioactives (+0.4%) came in soft. Management upgraded revenue expectations to the higher end of earlier guidance (2.5-3.5%), while re-iterating the trading profit expectation (22.8-23.2%). Following the good start to Q1, we will
Smith & Nephew Q4/FY 2018 numbers were in line with estimates. Q4/FY 18 revenue was up by 3%/2% to $1,294m/$4,904m, driven by sports medicine joint repair, other surgical businesses and advanced wound devices. FY18 trading profit grew by 7% to $1,123m with the associated margin coming in at 22.9% and a dividend of $0.36 per share was announced. FY 19 guidance – revenue growth of 2.5-3.5% and trading profit margin of 22.8-23.2%. We do not expect any major change in our estimates.
Smith and Nephew recently announced its Q3 trading update. Revenue was in line with expectations, coming in at $1,169m, up 3% on an underlying basis. Growth was largely driven by sports medicine joint repair, other surgical businesses and advanced wound devices. On the other hand, arthroscopic enabling technologies and advanced wound bioactives weighed on growth. The big (positive) surprises, though, were the knee segment and the US region. Our recommendation remains unchanged in spite of margin
We had the opportunity to join Smith & Nephew’s (S&N) recent institutional investor roadshow and hear about the introspection that has emerged following the appointment of its new CEO. While endorsing its strategy as a portfolio medical device company, two strategic reviews have identified areas which, when the detail is announced at the Q3 and FY18 results, will enable investors to track S&N’s target of returning to market growth rates.
Smith & Nephew reported largely in line Q2 numbers – on both the top-line as well as the bottomline. The performance of the sports medicine joint repair, other surgical devices, knee implants and advanced wound devices segments were the key positives, while advanced wound bioactives, arthroscopic enabling technologies and trauma businesses posted sales declines. We do not expect any significant changes to our estimates/recommendation.
Smith and Nephew reported a weaker-than-expected Q1 trading performance. The performance of the sports medicine portfolio and continued momentum in China were the key positives, but the Bioactives business and the deepening seasonality/budget constraints in developed markets were concerning. We will be revising our estimates downwards while maintaining an Add recommendation.
Solid performance across key revenue segments resulted in a strong Q4 17 performance for S&N. With China back to double-digit growth and the Gulf weakness now behind, the road ahead looks promising. Focus on cost control coupled with a strong top-line growth should translate into higher profit margins. In addition, the US tax reforms should help earnings march higher (4-5% drop in tax rate). We reset our estimates slightly higher and issue an Add recommendation on the stock.
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