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Home » Smith & Nephew Ups Growth Expectations After Strong First Half Of 2023

Smith & Nephew Ups Growth Expectations After Strong First Half Of 2023

A strong second quarter for Hull-founded global medical firm Smith & Nephew bolstered half year results.

The London and New York listed company saw revenues hit $2.7 billion (£2.1b) in the first six months of 2023, up 7.3 per cent on 2022. It has led to an upgrade in overall expectations for the company’s annual performance.

The latest three months saw growth at 7.8 per cent, with chief executive Deepak Nath confident it will continue.

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He said: “I am pleased to report strong first half revenue growth across our business. The continued outperformance in Sports Medicine and Advanced Wound Management – representing 60 per cent of our business – has continued. In Orthopaedics, our actions to improve product supply and execution have increased our ability to benefit from strong elective procedure volumes. Overall, these results have given us the confidence to increase our full year revenue growth guidance.”

The business is in the process of securing the necessary planning consents for a huge new £94 million base in Melton, East Yorkshire , moving just outside of its home city for its Advanced Wound Management business unit.

Deepak Nath, chief executive of Smith & Nephew. (Image: Smith & Nephew) Mr Nath said: “Margin development in the first half was in line with our expectations. In the second half, we expect a clear step up in both trading margin and cash generation as we begin to see the benefit of productivity gains and start bringing down inventory levels.

“Importantly, we continue to build the foundations for sustainable higher growth through our 12-Point Plan, with product availability improving and a high cadence of innovation. So far this year we have launched 13 new products, with major launches underway in high growth segments including robotics, shoulder replacement and negative pressure wound therapy.”

First quarter revenues had been up 6.9 per cent. The outlook for full year underlying revenue growth has has now been increased to 6 to 7 per cent on the £4.3 billion sales in 2022, having previously been at 5 to 6 per cent. Trading profit remains unchanged, with expectations of at least 17.5 per cent.

The company has also announced that chief financial officer Anne-Françoise Nesmes will step down next year, with a search for a successor initiated. Mr Nath said: “I would like to thank Anne-Françoise for her leadership and significant contribution to Smith & Nephew. She was instrumental in helping the group navigate the financial challenges of the pandemic and in laying the foundation for our transformation under the 12-point plan. On a personal note, I have been very grateful for her support and counsel which I know will continue over the coming months. When the time comes, she will leave Smith & Nephew with our best wishes.”

Smith & Nephew was founded by pharmacist Thomas James Smith from his small operation in Hull in 1856, initially developing a new method for refining cod liver oil, before moving into bandage cutting and rolling less than a decade before the outbreak of the First World War.

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