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Product / Company Performance

Smith & Nephew Posts 2Q18 Ortho Revenue Growth +4% YoY -

ORTHOWORLD estimates Smith & Nephew (SNN) 2Q18 orthopaedic revenue of US $870.8MM, +4.4% from 2Q17, and 1H18 revenue of $1,736.1MM, +4.5% vs. 1H17.

ORTHOWORLD estimates for segment growth follow.

  2Q18  2Q17  $ Change  % Change 
 Joint Reconstruction $435.9  $417.9  $18.1  4.3% 
   Hip $156.0  $150.0  $6.0  4.0% 
   Knee $266.5  $254.0  $12.5  4.9% 
   Extremities  $13.4  $13.8  -$0.4  -3.1% 
 Trauma $108.8  $113.2  -$4.3  -3.8% 
 Arthroscopy/Soft Tissue $326.0  $303.0  $23.0  7.6% 
 Total   $870.8  $834.0  $36.7  4.4% 


  1H18  1H17  $ Change  % Change 
 Joint Reconstruction $871.5  $834.9  $36.6  4.4% 
   Hip $311.0  $302.0  $9.0  3.0% 
   Knee $533.9  $505.9  $28.0  5.5% 
   Extremities  $26.6  $26.9  -$0.3  -1.2% 
 Trauma $216.6  $220.1  -$3.4  -1.6% 
 Arthroscopy/Soft Tissue $648.0  $606.0  $42.0  6.9% 
 Total   $1,736.1  $1,660.9  $75.2  4.5% 

ORTHOWORLD’s estimated revenue by geographic region:


2Q18  1H18 
 U.S. $426.7  $850.7 
 Ex-U.S. $444.1  $885.4 

In an upbeat and energizing first earnings call for Mr. Namal Nawana, the new CEO, much observation was made about opportunities in growth potential and flatter leadership, to which we’ll return in a moment.

Strong growth in Arthroscopy/Soft Tissue Repair continues with the REGENETEN bioinductive rotator cuff implant performing ahead of expectations. Notably, manufacturing operations are expanding to deal with demand for REGENETEN. Actions are in place to stabilize Arthroscopic Enabling Technologies’ mechanical resection segment, specifically focusing on the WEREWOLF Coblation system.

Trauma faced a tough comp in the Middle East in 2Q17, but the EVOS SMALL plate contributed to strong plate/screw performance and is expected to continue along that vein in 2H18.

Hips are supported by a renewed focus on the POLAR3 total hip in the U.S. and standby knee products, JOURNEY II, LEGION and ANTHEM. The robotic-assisted NAVIO system, used in partial and total knee applications, was noted as having a strong U.S. quarter—but no more specific detail than that.

Returning to leadership, Mr. Nawal has brought in two new appointments “from outside,” one to head up global operations and the other, Ms. Melissa Guerdan, to lead QA/RA. (The latter is public information under Executive Management on the company website; the former is not yet public.)

On the salesforce: “They’re actually reasonably focused in their own areas; I don’t anticipate there needs to be a lot of change in order to have them calling on the right customers and with the portfolios we currently have.”

And on priorities: “To get more of our portfolio growing at or better than market.” He reiterated multiple times that “We may not always be the market leader, but where we have technology, we can provide leadership.” A positive message following a very active first three months on the job.

Source: Smith & Nephew; ORTHOWORLD Inc. estimates

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