Smith & Nephew's Q4 2024: Contradictions Unveiled on Orthopedics Recovery, Manufacturing Challenges, and Robotics Growth

These are the key contradictions discussed in Smith & Nephew's latest 2024Q4 earnings call, specifically including: China Orthopedics Recovery, Manufacturing Optimization, Orthopedics Performance Expectations, Supply Chain Challenges, Sports Medicine Market Dynamics, Margin Expansion, and CORI Robotics Sales and Development:



Revenue Growth and Margin Expansion:
- Smith & Nephew reported underlying growth of 8.3% for Q4 and 5.3% for the full year, with margins expanding by 60 basis points.
- Growth was driven by the 12-Point Plan, which improved operational efficiency and leveraged innovation, especially from new products contributing over 60% to revenue growth.

Across Business Segment Performance:
- Orthopedics grew by 4.3%, Sports Medicine and ENT by 6.2%, and Advanced Wound Management by 5.1%.
- This was underpinned by improvement in US Reconstruction, strong performance in robotics sales, and improved inventory management.

China Market Challenges:
- The China market cost Smith & Nephew 280 basis points of group growth in Q4, contributing to a 23% decline in emerging markets.
- The decline was attributed to soft demand in the off-tender business, tender business headwinds, and VBP pricing impacting Joint Repair and AET.

Innovation and Product Launch Impact:
- More than 60% of Smith & Nephew's revenue growth in 2024 came from products launched in the last five years, with significant contributions from CORI and Regeneten.
- Innovation and new product launches, including AETOS Shoulder and CATALYSTEM, drove growth and customer satisfaction.