Smith & Nephew 2016 revenue flat, expects a better performance in 2017: 8 things to know

Spinal Tech

Smith & Nephew reported a slight revenue growth last year and expects a stronger performance in 2017.

Here are eight key notes from the company's financial report:


1. Fourth quarter revenue hit $1.2 billion, up 3 percent from the same period last year. Full-year 2016 revenue hit $4.6 billion, up 1 percent over 2015.


2. Full year operating profit margin was 17.2 percent before a one-off $326 million gain from gynecology disposal. The trading profit margin was 21.8 percent, including the company's loss of leverage from lower sales growth and an investment in Blue Belt Technologies.


3. Revenue growth was flat in emerging markets last year, driven by weakness in China and the Gulf States.


4. The company's sports medicine line did well last year, reaping the benefits of the ArthroCare acquisition. The company also strengthened its knee implant portfolio last year by acquiring Blue Belt Technologies' Navio system, which delivered more than 50 percent revenue growth last year.


5. The company's priorities for 2017 include focusing on global commercialization of its technologies and bringing improvements to areas such as pricing strategy and sales force excellence. The company's newly formed single global research and development organization is focused on productivity, improving processes and leveraging resources and expertise in 2017.


6. The company's research efforts in the coming year will highlight the clinical and economic benefits of Smith & Nephew products.


7. Smith & Nephew's fourth quarter revenues by business line were:


• Sports medicine joint repair: $159 million; 4 percent growth
• Arthroscopic enabling technologies: $168 million; 4 percent decline
• Trauma and extremities: $120 million; 5 percent decline
• Other surgical business: $48 million; 13 percent decline
• Knee implants: $247 million; 1 percent decline
• Hip implants: $153 million; 6 percent decline

8. The company expects stronger revenue in 2017, with a 1.2 percent to 2.2 percent revenue increase.


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