Supply chain and inflation issues at listed Medtech company
Medical technology business, Smith + Nephew, has recorded third quarter revenue of $1.3bn/£951m up 5.5% on a reported basis and 2.3% underlying.
Issuing its trading results for the third quarter ended 2 October 2021, the Hull-based business adds that revenue in its Orthopaedics business was $508m/£372m, down -0.7% reported and -5.9% underlying.
The company says this reflects the impact of the Delta COVID-19 variant in the US, as well as supply constraints.
The business has reported Sports Medicine & Ear Nose and Throat (ENT) revenue of $379m/£277m, up 8.3% reported and 6.5% underlying, which is driven by continued strong joint repair performance and a gradual recovery of ENT.
And the company’s Advanced Wound Management revenue also reached $379m/£277m, up 12.1% reported and 10.9% underlying, with all sub-franchises growing.
Smith + Nephew says it is seeing gradual improvement in its distribution network and is making progress in transferring to a specialist logistics partner in the US and Europe.
It notes that like many other companies, it continues to experience ongoing global supply chain availability issues and increasing inflation.
The firm says it has strengthened its operations and manufacturing leadership team and is addressing staff shortages.
Its new manufacturing facility in Malaysia is on track to open in late 2022, which will add resilience to its network.
Roland Diggelmann, chief executive officer, said: “I’m pleased to see Advanced Wound Management and Sports Medicine & ENT deliver a second consecutive quarter of growth above 2019 levels, driven by strong commercial execution, investment in innovation and high-quality acquisitions.
“The performance of these franchises helped offset the near-term challenges in Orthopaedics. As committed, we are addressing the gap in our Orthopaedics portfolio, with the first surgeries taking place with our new cementless knee. In parallel we are making progress on supply chain.
“We see higher growth and more consistent execution opportunities from bringing our Sports Medicine and Orthopaedics franchises under one leadership team, which we’ve announced today.
“This will build on our unique strengths to support customers looking for a combined portfolio approach, while continuing to serve those focused on just one surgical discipline.”
