Smith & Nephew sales improve in Q3, US business returns to growth

Smith & Nephew reported a "significant improvement" in trading in the third quarter on Thursday as global levels of elective surgeries continued to recover following the initial hit from the Covid-19 pandemic, while its US business returned to growth.

In the quarter to 26 September, revenue fell 3.7% on a reported basis to $1.2bn, and 4.2% on an underlying basis, recovering from the 29.3% underlying slump in the second quarter.

The medical equipment manufacturer said its US business returned to growth, with revenue there up 0.9% on an underlying basis, offset by a 6.2% decline from other established markets.

Emerging markets revenues fell 14.5%, with growth in China offset by weaker performances in Latin America and India due to the pandemic.

Chief executive officer Roland Diggelmann said: "I am pleased with our progress in the third quarter and how the business and our employees have responded to challenging circumstances. We were well prepared as global levels of elective surgery recovered and delivered a substantial improvement in performance over the previous quarter, led by growth in both the US and China, our two largest markets.

"At the same time we have continued our work to transform the group. We launched multiple new innovative products and announced an acquisition that will strengthen our position in the rapidly growing extremities segment."

Still, the company struck a cautious note over the outlook. S&N said that while it is encouraged by the improvement in Q3, full-year guidance remains withdrawn "as the nature and scope of any new restrictions to control Covid-19 through year end are not known".