Smith & Nephew has reported another healthy set of results, which justify chief executive, Chris O'D...
Smith & Nephew has reported another healthy set of results, which justify chief executive, Chris O'Donnells' prediction that the company is on target to generate underlying sales growth of between 14% and 16% in 2003.
The end-of-year results released last month showed this underlying growth stood at 13% in 2001. And this has translated into a 15% increase in EPS for the company, which has now successfully transformed itself into a focused med-tech.
O'Donnell's plan was to streamline the company into its three profitable cores at the expense of the less profitable divisions. These three markets: orthopaedics, endoscopy and advanced wound management were expected to grow at 5% per year globally, and by roughly twice that in their own relevant sectors.
The orthopaedics division was the main driver of sales growth in 2001 for the third year running, making Smith & Nephew the fastest-growing orthopaedic implant company, with sales growth at over twice the market average.
In addition the company's trauma and clinical therapies subsections of orthopaedics have witnessed a turnaround, which has pushed sales up 12% and 18% respectively.
Advanced wound management sales increased 11% with the acquisition of Acticoat burns dressing and Beiersdorf's advanced wound care business. These acquisitions moved Smith & Nephew into the global leader position in the market.
And the third arm, endoscopy, of the restructured company has doubled its sales to 11% through the launch of a number of crucial products. This has led to a doubling of the income made from products in comparison to 2000.
Next year sales from new products are expected to increase to 25% with Smith & Nephew entering a solid phase of product innovation that analysts expect to drive sales growth to 15% this year. And it is the endoscopy division of the company which is expected to become the new main driver of growth in the future, replacing orthopaedics.
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