Is M&A in Smith & Nephew's future? 5 CEO quotes on 2019 and beyond

Spinal Tech

In 2018, Smith & Nephew reported revenue increased 3 percent, but profits dropped after implementing a new operating model.

 

During the fourth quarter and full year conference call, as transcribed by Seeking Alpha, CEO Namal Nawana discussed potential acquisitions and where the company's strategy lies in the future.

Namal Nawana on acquisitions: "We have completed the Ceterix acquisition in January, and that's going well, and we're now scaling up our manufacturing and in the process of rolling out Novostitch Pro firstly to our U.S. sales force and then beyond. We're also looking at deals to get access to adjacent markets where there's a good strategic fit for Smith & Nephew."

"We're very confident that we know what are good technologies and businesses for us to be the owners of, and we'll really pressure test the valuations…How we intend to deploy capital [and maintain a] very strong balance sheet, we will maintain investment-grade ratings, but we will look for attractive acquisitions throughout this year and [make this] an ongoing part of how we run the company. I think there's always good opportunities, you just have to work hard to find which ones at which time."

NN on competition with Stryker: "It is clear that Stryker has posted some good numbers and for a good period of time on their knee portfolio, and I do attribute a lot of that to the robot. I also say that we had good performance with our robot, and in the course of 2018, we trained our workforce better with why this is important…I think for knee replacement specifically, Stryker is number one, and we've also been a very consistent number two, and we've been growing above market overall."

NN on business in China: "Our outlook for China is fantastic. We have a great team there, that's the first part; and we have relevant products. Our wound management business has broad needs in that marketplace, so that's where we're very relevant, and as orthopedic surgeons have been trained more and more in joint replacement and sports medicine surgery, we're seeing volume expansion…[We have] continuously invested in China, I think it served us well. So I actually looked at that as an area that we could lean on and support our team more."

NN on robotic knee surgery technology: "We doubled our units in 2018, and we are a very relevant part of the overall robotic placements and units in the world today."

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