Smith+Nephew First Quarter 2020 Trading Report
Navigating unprecedented challenges while preparing for the future
6 May 2020
Smith+Nephew (LSE:SN, NYSE:SNN) trading report for the first quarter ended 28 March 2020.
Q1 trading1,2
- Q1 revenue $1,134 million (2019: $1,202 million), down -7.6% on an underlying basis, consistent with 30 March trading update
- Reported growth down -5.7% including a 3.4% benefit from acquisitions and -1.5% foreign exchange headwind
- Performance of all three global franchises held back by impact of COVID-19 to varying degrees dependent on geography and exposure to elective procedures
COVID-19 response
- Focused on three priorities – the health and safety of employees and protecting jobs; supporting customers and communities; and ensuring the sales force and supply chain are ready as markets recover
- Cost control measures to realise significant savings of up to $200 million underway
- Strong balance sheet and good liquidity, with net debt of $1.8 billion at quarter end compared to $3.4 billion of committed facilities
April trading and preparing for the future1,2
- April revenue down around -47% on an underlying basis, reflecting suspension of elective procedures in most markets, somewhat offset by improving trading in China
- Elective surgeries starting to return in some markets, including the US, although pace and extent is varied and uncertain across geographies
- Q2 revenue and first half trading margin expected to be substantially down on prior year, as previously announced
- 2020 guidance remains withdrawn due to continuing uncertainty regarding impact of COVID-19
Roland Diggelmann, Chief Executive Officer, said:
“ Countries and healthcare systems around the world are facing an unprecedented challenge, and we are seeing a significant short-term impact on Smith+Nephew. I would like to thank everyone at Smith+Nephew who has adapted and worked tirelessly to protect colleagues, support our customers and communities, and prepare the business for the future.
“The recovery in China is encouraging, as is the restart of elective surgeries in many other countries, and especially within the US. While there is still much uncertainty, Smith+Nephew has the financial strength to withstand this period and, as demand increases, we are ready to step up and support customers through our robust supply chain, innovative products and some new ways of working.
“Looking to the medium-term, we have a proven strategy that will continue to guide our choices. We remain committed to our ambition to consistently outgrow our markets at the same time as delivering ongoing improvements to trading profit margin.”