Smith & Nephew saw some revenue growth in the fourth quarter and full year financial reports, on the heels of their ArthroCare acquisition and in the wake of other rumors about the company becoming acquired itself.
"Our 2014 performance reflects the choices we have made to invest in transforming the growth profile of Smith & Nephew," said Olivier Bohuon, CEO of Smith & Nephew. "We improved our existing business, driving a sustained improvement in U.S. hip and knee implants, and building rapidly in the emerging markets. We strengthened our higher growth platforms, acquiring ArthroCare to give us a broader sports medicine portfolio. We created new growth platforms with the mid-tier portfolio and Syncera, disruptive models that fulfill unmet customer needs and advanced wound bioactives again delivered double-digit growth."
Here are 10 things to know from the financial report:
1. Fourth quarter revenue was up 2 percent to $1.2 billion. The trading profit was up 7 percent to $325 million and the global advanced wound management business line was down 2 percent.
2. For the full year, revenue was up 2 percent to $4.6 billion. Trading profit was up 3 percent to $987 million.
3. The United States hip and knee implant markets drove improved performance in established markets. There was also momentum in the sports medicine, joint repair and trauma and extremities markets.
4. Smith & Nephew launched a commercial solution to offer primary hip and knee implants titled Syncera.
5. The company reported 17 percent revenue growth in emerging and international markets after integrating recent acquisitions and enhancing their portfolio.
6. Research and development spend was more than 5 percent of company revenue. The JOURNEY II natural-motion knee and HAT-TRICK Lesser Toe Repair System were both released last year.
7. In 2014 the company realized at least around $120 million of annual savings, which it expects to benefit the bottom line in 2015. The company began focusing on simplifying and improving their operating model in 2011 for savings.
8. The company expects additions to their sports medicine business to add $85 million to the annual trading profit in 2017.
9. Smith & Nephew expects to continue delivering higher underlying revenue growth this year and further improvement in trading profit margin.
10. For the full year, the operating profit was slightly lower in 2014 than 2013, reflecting costs related to the ArthroCare acquisition as well as restructuring. The operating profit for 2014 was $749 million, compared with $810 million in 2013.