Smith+Nephew reported second-quarter revenue of $1,597 million, with underlying growth of 1.6%, slower than the group had anticipated.
The medical device maker, known for its orthopaedics, sports medicine and wound care products, said the shortfall stemmed from softness in US Orthopaedics and Advanced Wound Bioactives, partially offset by continued strength in Sports Medicine.
First-half revenue reached $3,097 million, up 2.3% on an underlying basis, while trading profit rose 8.1% on a reported basis to $566 million, lifting the trading profit margin by 60 basis points to 18.3%. Adjusted earnings per share climbed 11.0% to 47.7 cents.
The company now expects full-year revenue growth of around 4%, down from its previous guidance of around 6%, but it held firm on trading profit growth of around 8% excluding acquisitions, free cash flow of around $800 million, and adjusted return on invested capital above 10%.
An additional $50 million in efficiency savings, taking the annual total to around $200 million, is expected to offset the impact of weaker revenue on profit.
US Knee Implants revenue fell 7.2%, while US Hip Implants, which had posted four consecutive quarters of above-market growth, declined 1.5% amid delayed set deployments.
Chief executive Deepak Nath said the group navigated "some challenges" in the quarter, citing temporary headwinds in US Hip Implants and ongoing pressure in US Knee Implants ahead of new product launches, though he expects SANTYL to return to growth in the third quarter.
A $500 million share buyback announced in May had $216 million settled as of 3 August, with adjusted net debt to EBITDA leverage at 1.8 times.
The interim dividend rose 4.0% to 15.6 cents per share.
