Third quarter turnover and profit both rise 3% at Smith and Nephew

Medical devices maker Smith & Nephew posted a 3% increase in both revenue and profit for the third quarter, thanks to an improvement in its emerging and international markets units, recent product launches and investment in the sales force.

On an underlying basis, turnover climbed from $1,027m to $1,148m, thanks to its Sports Medicine and Trauma & Extremities divisions, which benefitted from recent product launches and investment in the US sales force.

The group reported success with its expansion plans for sports medicine, with the division seeing 11% revenue growth as it gained from the success of a number of recent product launches.

Its other main area of expansion, wound-care markets, was as expected held back by US Negative Pressure Wound Therapy. The division reported a 3% decline in revenue, although this was still an improvement on the second quarter.

The Advanced Surgical Devices division posted a 4% increase in revenue to $816m, thanks to growth across its Arthroscopic Enabling Technologies, Hip and Knee Implants and its overall performance in the US and Emerging & International Markets.

The latter continued to deliver strong growth, with revenue up 20% in the quarter, including an improving contribution from its distributor acquisitions in Brazil.

Group trading profit climbed from $222m to $246m, marking a gain of 3%, although on a reported basis it rose 10%. The trading profit margin was 21.4%, compared to 21.6% in the same period a year earlier.

Chief executive officer Olivier Bohuon said: "We are delivering on our strategy to rebalance Smith & Nephew by strengthening our higher growth platforms, which currently represent more than half the business, up from just 35% three years ago.

"Sports Medicine Joint Repair and Advanced Wound Bioactives both produced double-digit growth in the quarter, and the emerging markets business increased revenue by 20%. We are pleased with our momentum, enhanced by group optimisation, tax improvement and the acquisition of ArthroCare. Adjusted earnings per share grew 14% in the quarter.

"The quarter positively reflects our strategy to rebalance towards higher growth markets, and we have many actions underway to further build upon these achievements."

For the nine-month period, reported revenues were $3,368m, up 2% on an underlying basis year-on-year. Trading profit was $730m, against $695m a year earlier, although the trading profit margin slipped from 21.9% to 21.7%.

Shares had climbed 2.55% to 1,044p by 13:24.