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Smith+Nephew reported 1Q20 orthopedic revenue of USD $800.9 million, -9.5% vs. 1Q19. Like its competitors, the company experienced a steep decline in revenue starting in March that has persisted through April. Smith+Nephew realized very strong robotics sales in January and February, although that too declined in March. Growth in its revision hip portfolio was a bright spot for the company. Trauma is less exposed to procedure deferrals, but stay at home orders around the world have offset that insulation by reducing the number of patients.
Total weekly sales in April declined -47% compared to the prior year, with some mitigation coming from stocking orders in China and the U.K. Smith+Nephew believes there are slight signs of improvement as elective procedures have restarted in some geographies. Surgeries in China have resumed and are between 50% and 70% of typical volume, while the U.S., Australia and Germany are gradually coming back online. The company expects the U.K. and Japan to begin to recover later in 2020. Smith+Nephew is significantly more bullish on the role of ASCs during recovery than many of its competitors, perhaps owing to its significant investment in that setting through its sports medicine business.
The company is in a good financial position and has initiated a $200 million cost savings plan for 2020. The primary source of savings will be in Selling, General and Administrative cost centers including variable pay, travel, promotional activity, events and consultancy fees. R&D spend is being “largely protected” to continue work on launching the company’s next generation robotics platform and pursuing CE Mark approval for REGENETEN. Smith+Nephew is supporting commission-based reps to help maintain its salesforce so it can capitalize on the expected procedure surge as restrictions are lifted.
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $399.7 | $440.0 | ($40.3) | (9.2%) |
| Knees | $251.0 | $275.0 | ($24.0) | (8.7%) |
| Hips | $137.0 | $152.0 | ($15.0) | (9.9%) |
| Extremities | $11.7 | $13.0 | ($1.3) | (10.1%) |
| Trauma | $97.3 | $106.0 | ($8.7) | (8.2%) |
| Sports Medicine | $298.0 | $333.0 | ($35.0) | (10.5%) |
| Orthobiologics | $5.9 | $6.2 | ($0.3) | (4.2%) |
| Total | $800.9 | $885.2 | ($84.3) | (9.5%) |
Geographic Sales
| Geographic Region | 1Q20 | 1Q19 | $ Chg | % Chg |
|---|---|---|---|---|
| US | $410.4 | $418.3 | ($7.9) | (1.9%) |
| Ex-US | $390.6 | $466.9 | ($76.3) | (16.3%) |
| EMEA | $227.5 | $259.8 | ($32.2) | (12.4%) |
| Asia Pacific | $88.2 | $111.2 | ($23.0) | (20.7%) |
| Rest of World | $74.8 | $91.5 | ($16.7) | (18.2%) |
| Total | $800.9 | $885.2 | ($84.3) | (9.5%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Smith+Nephew reported 1Q20 orthopedic revenue of USD $800.9 million, -9.5% vs. 1Q19. Like its competitors, the company experienced a steep decline in revenue starting in March that has persisted through April. Smith+Nephew realized very strong robotics sales in January and February, although that too declined in March. Growth in its revision...
Smith+Nephew reported 1Q20 orthopedic revenue of USD $800.9 million, -9.5% vs. 1Q19. Like its competitors, the company experienced a steep decline in revenue starting in March that has persisted through April. Smith+Nephew realized very strong robotics sales in January and February, although that too declined in March. Growth in its revision hip portfolio was a bright spot for the company. Trauma is less exposed to procedure deferrals, but stay at home orders around the world have offset that insulation by reducing the number of patients.
Total weekly sales in April declined -47% compared to the prior year, with some mitigation coming from stocking orders in China and the U.K. Smith+Nephew believes there are slight signs of improvement as elective procedures have restarted in some geographies. Surgeries in China have resumed and are between 50% and 70% of typical volume, while the U.S., Australia and Germany are gradually coming back online. The company expects the U.K. and Japan to begin to recover later in 2020. Smith+Nephew is significantly more bullish on the role of ASCs during recovery than many of its competitors, perhaps owing to its significant investment in that setting through its sports medicine business.
The company is in a good financial position and has initiated a $200 million cost savings plan for 2020. The primary source of savings will be in Selling, General and Administrative cost centers including variable pay, travel, promotional activity, events and consultancy fees. R&D spend is being “largely protected” to continue work on launching the company’s next generation robotics platform and pursuing CE Mark approval for REGENETEN. Smith+Nephew is supporting commission-based reps to help maintain its salesforce so it can capitalize on the expected procedure surge as restrictions are lifted.
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $399.7 | $440.0 | ($40.3) | (9.2%) |
| Knees | $251.0 | $275.0 | ($24.0) | (8.7%) |
| Hips | $137.0 | $152.0 | ($15.0) | (9.9%) |
| Extremities | $11.7 | $13.0 | ($1.3) | (10.1%) |
| Trauma | $97.3 | $106.0 | ($8.7) | (8.2%) |
| Sports Medicine | $298.0 | $333.0 | ($35.0) | (10.5%) |
| Orthobiologics | $5.9 | $6.2 | ($0.3) | (4.2%) |
| Total | $800.9 | $885.2 | ($84.3) | (9.5%) |
Geographic Sales
| Geographic Region | 1Q20 | 1Q19 | $ Chg | % Chg |
|---|---|---|---|---|
| US | $410.4 | $418.3 | ($7.9) | (1.9%) |
| Ex-US | $390.6 | $466.9 | ($76.3) | (16.3%) |
| EMEA | $227.5 | $259.8 | ($32.2) | (12.4%) |
| Asia Pacific | $88.2 | $111.2 | ($23.0) | (20.7%) |
| Rest of World | $74.8 | $91.5 | ($16.7) | (18.2%) |
| Total | $800.9 | $885.2 | ($84.3) | (9.5%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
