Smith & Nephew, the medical device maker, reported flat revenues in line with expectations in its first quarter trading update, despite a return to double digit growth in emerging markets, which had hampered the group in recent quarters.
The FTSE 100 group said revenues of $1.1bn were flat on a reported basis after taking into account a 2 per cent negative impact from the sale of its gynaecology unit last year and a 1 per cent currency headwind.
But it said revenues in emerging markets were up 12 per cent on an underlying basis, compared to a decline of 6 per cent a year ago, after a return to growth in the second half of last year. In February, the group said it expected better performance in emerging markets, including China, where revenues grew 14 per cent on an underlying basis, to drive growth in 2017.
New products had been “well received”, the company said, and it posted “strong revenue growth” in knee implants, up 5 per cent on an underlying basis, with its advanced wound management division down less than analysts had predicted.
Chief executive Olivier Bohuon said:
I am pleased with the start of 2017, which was in-line with our expectations. In particular, performance in the Emerging Markets was good, returning to double-digit growth, with China up 14% underlying…Over the last few years we have successfully put in place the right structures and capabilities to make the Group stronger, simpler, more agile and efficient. We continue to focus on execution and expect to see progress through the year.