Medical technology company Smith & Nephew (SN.) said first quarter underlying revenues to 2 April increased 5.9% year-on-year to $1.31 billion.
Continued strong performance from Sports Medicine & ENT (Ear, Nose and Throat), where sales grew 8.6% and Advanced Wound Management, which increased sales by 8% were key drivers in the quarter.
A foreign currency headwind reduced reported sales growth to 3.3%. The company said the results put it on track to meet full-year 2022 guidance, which remains unchanged.
Investors welcomed the guidance and continued recovery by marking the shares up 3% to £13.06.
GROWTH ACROSS ALL FRANCHISES
Chief executive Deepak Nath commented: ‘Sports Medicine & ENT and Advanced Wound Management continued to deliver strong growth and Orthopaedics produced an improved performance as elective procedure volumes rebounded across our segments.
‘The growing contribution from recent product launches reflects the strength of our portfolio and innovation-led approach.’
Geographically emerging markets contributed the strongest growth, with sales up an underlying 14.3%. Established markets grew by 4.1%.
Despite rising Covid-19 cases and increased lockdowns in China towards the end of the quarter, the region still grew.
Emerging markets, excluding China, saw double-digit sales growth across India, the Middle East and Africa and Latin America.
GUIDANCE REITERATED
The company is targeting 2022 underlying revenue growth of 4% to 5% and a 0.5% increase in trading margin driven by improved operating efficiencies.
Given expected foreign exchange headwinds of 2.7% this equates to a reported growth range between 1.3% and 2.3%.
The company anticipates an improvement in the trading margin of acquired assets to ‘more than offset significant anticipated headwinds from input cost inflation’.
Further out, the firm aims to grow underlying organic revenues structurally ahead of historic levels in the 4% to 6% range by 2024.
Management is aiming to rebuild the trading margin to 21% by 2024 with further improvements thereafter.
