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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Smith & Nephew Plc    SN.   GB0009223206

SMITH & NEPHEW PLC

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Smith & Nephew : +Nephew forecasts sales growth after best year since 2010

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02/20/2020 | 04:55am EDT

British medical products maker Smith+Nephew forecast another year of revenue growth after reporting its best sales performance in a decade due to buoyant demand from emerging markets and a strong showing by its sports medicine unit.

The company's share price rose by as much as 10%, leading gainers on Britain's blue-chip FTSE 100 index on Thursday after it exceeded 2019 results expectations and estimated sales growth this year of 3.5% to 4.5%.

Smith+Nephew, one of the main global players in orthopaedic implants and prosthetics as well as a raft of dressings and other complex technologies for surgeons, has seen newer markets including China emerge as growth drivers.

Chief Executive Roland Diggelmann, who took over in November, told Reuters that Chinese sales grew by about 30% in 2019 and now represent 7% of total sales.

China's coronavirus outbreak has not disrupted Smith+Nephew's operations in the country so far, Diggelmann said, but the company is monitoring the situation because the epidemic has affected the wider region.

"We're active mostly in elective surgery, and these elective surgeries are not the focus of healthcare authorities now. Rightfully, they're really focused on containing the outbreak," he said.

SHARES RALLY ON SALES NUMBERS

The virus has killed more than 2,000 people in China and infected some 75,000 people, confining millions to their homes, disrupting supply chains and delaying reopening of factories after the extended Lunar New Year holiday break.

Smith+Nephew said its 2020 outlook assumes the outbreak would cease to disrupt normal business activities early in the second quarter.

JP Morgan analysts said that though growth this year is likely to be loaded in the second half, the outbreak is likely to remain a short-term overhang.

Underlying sales growth in emerging markets was 16.1%, while the revenue posted by Smith+Nephew's sports medicine & ENT unit increased 7%.

Growing patient populations and improving medical expertise in newer markets are making up for slowing growth in mature markets for Smith+Nephew.

Chief Financial Officer Graham Baker told Reuters the 4.4% underlying growth in revenue in 2019 was the company's best since at least 2010.

Analysts were expecting 2019 sales of $5.12 billion and underlying growth of 4.1%, a company-compiled consensus showed. (https://bit.ly/2HFheza)

Smith+Nephew shares hit a record high of 2,023 pence by 0849 GMT, boosted by the better-than-expected sales figures.

By Pushkala Aripaka

Stocks mentioned in the article
ChangeLast1st jan.
SMITH & NEPHEW PLC 1.38% 1363 Delayed Quote.-25.62%
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Financials (USD)
Sales 2020 5 148 M
EBIT 2020 1 003 M
Net income 2020 513 M
Debt 2020 1 373 M
Yield 2020 2,27%
P/E ratio 2020 30,4x
P/E ratio 2021 17,2x
EV / Sales2020 3,09x
EV / Sales2021 2,80x
Capitalization 14 545 M
Chart SMITH & NEPHEW PLC
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Smith & Nephew Plc Technical Analysis Chart | SN. | GB0009223206 | MarketScreener
Technical analysis trends SMITH & NEPHEW PLC
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 18
Average target price 22,25  $
Last Close Price 16,66  $
Spread / Highest target 73,9%
Spread / Average Target 33,5%
Spread / Lowest Target -44,5%
EPS Revisions
Managers
NameTitle
Roland D. Diggelmann Chief Executive Officer & Non-Executive Director
Roberto Quarta Chairman
Mark Gladwell President-Global Operations & Business Services
Graham James Baker Chief Financial Officer & Director
Vasant Padmanabhan President-Research & Development
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