Smith & Nephew slashes guidance as China slowdown continues

Hip and knee implant maker Smith & Nephew has cut its full-year guidance as it continues to grapple with a slowdown in China.

It booked third quarter revenue of $1.4bn (£1.08bn), up four per cent year on year, but Chinese sales dragged as the region experienced “worse than expected headwinds” across the surgical businesses.

The London-listed company now expects full-year 2024 revenue growth to come in around 4.5 per cent, down from the previous forecast of five to six per cent, “primarily due to the impact of China headwinds”.

It said, however, that its 12-Point Plan has provided operational and commercial improvements and is on track across the rest of the business.

Smith & Nephew’s chief executive Deepak Nath said: “We delivered encouraging growth in most segments and markets in the third quarter as the 12-point plan drove further financial improvements. We are making progress in both Hip and Knee Implants in the US, although there is more to do.

“China VBP was a significant headwind that maskedsports medicine’s strong performance across the rest of the world.

“Advanced wound management delivered its best quarter this year, with all segments performing well.

He added: “While the revised outlook reflects the headwinds across our surgical businesses in China, we remain convinced that our transformation to a higher growth company, with the ability to drive operating leverage through to the bottom line, is on the right course.”

It follows a short-seller research report recently found that Smith & Nephew deployed aggressive accounting techniques to boost its profit margin by 1.7 percentage points, a claim the company has rejected “in the strongest possible terms”.