Smith & Nephew posts 16% ortho revenue growth (+23% in knees!)
BY EDITOR, DECEMBER 22, 2003
Smith & Nephew (SNN:NYSE) held a trading update conference call on Thursday to provide an update on its performance during the 2H:03 – which at 16% orthopedic growth is in-line with the respective market. However, SNN's knee growth rate of 23% is clearly stronger than market by, we believe, 7%. Oxinium reconstructive products continue to outperform their respective markets. Even with the recall of its cementless Oxinium Knee, SNN has been able to steal both market share on a unit and revenue basis. The clear driver of knee revenues continues to be increased penetration of SNN's Oxinium femoral component, which now accounts for 40% of all femoral components sold. SNN has also recently launched an Oxinium Unicompartmental Femoral component which already accounts for 50% of all such prosthesis sold by Smith & Nephew. Hip sales are expecting to experience a 15% growth rate during 2003 which we believe is in-line with the market growth rate. Again, Oxinium femoral head components, the clear driver of hip revenues, currently account for 35% of all femoral head sold. We believe the expected introduction of a ceramic-on-ceramic hip during 2004 will significantly enhance SNN's hip growth rate. Endoscopy sales continue to be hurt by reuse of blades as well as lower orders from HealthSouth. Management stated that they expected Endoscopy sales to increase by 4% during 2003. Smith & Nephew will announce its preliminary results for 2003 on February 5, 2004.
