Summary Annual Review
Introduction
- John Buchanan
- Chairman
- David Illingworth
- Chief Executive
Smith & Nephew delivered revenues of $3,772 million, an underlying increase of 2% compared to last year, after adjusting for adverse currency movements of 3%. All of our global business units reported underlying revenue growth. Trading profit increased by 15% to $857 million. These results were achieved against a background of challenging conditions in our markets.
In Orthopaedics, our US business improved during the course of 2009, with our traditional hip and knee ranges outperforming the US market growth rate in the second half of the year. In Europe, we have strengthened our management team and they are implementing a series of operational improvements. Our emerging market business remained strong throughout the year.
In Endoscopy, strong sports medicine repair sales growth continued with double digit percentage growth which was balanced by the continued weakness in the sales of visualisation equipment, as hospitals deferred capital equipment purchases due to the economic climate.
Advanced Wound Management revenues were ahead of the market growth rate, with all geographic regions contributing to the growth. Our position in the Negative Pressure Wound Therapy (NPWT) market continues to gain momentum, and we launched further new products in our exudate and infection management ranges.
A key focus for the Group is efficiency and our trading margin improved strongly by 230 basis points to 22.7%. This has been achieved through manufacturing operational improvements and rigorous cost control across all businesses, together with specific efficiency programmes.
In parallel with this revenue and profit performance, we have made investments for the future, such as NPWT expansion, constructing medical education facilities in the UK, Switzerland and China, expanding our biologics investment and driving our emerging markets strategy.
We continue to generate strong cash flow and our net debt is now below $1 billion.
We had a strong finish to the year and are pleased with our achievements in these challenging conditions. We have successfully improved many areas of Smith & Nephew’s business and are working hard at the remaining areas, as well as identifying further opportunities. We are confident that we have the strategy, and people, to deliver continued sustainable long-term growth for our shareholders.