Smith & Nephew (SN) is a global medical devices business operating in three main segments: Orthopaedics, Endoscopy and Advanced Wound Management (AWM). Traditionally SN relied on demand from the developed markets, and whilst they continue to deliver mid-single digit revenue growth, which is no mean feat in these markets, management are concentrating on the emerging economies. Integral to SN maintaining its high rating is tackling the issue of the loss of market share experienced in its core hips and knees segment over the last two to three years. Here, SN has launched a lower cost, streamlined and potentially price disruptive new range in Syncera.
Elsewhere in the Group, their Sports Medicine division is beginning to reap the benefits of the recent acquisition of ArthoCare after some subdued performance throughout most of 2015. AWM has been mixed of late with double digit growth in Devices entirely offset by volatility in Bioactives. I believe the core business to be robust throughout the cycle and the shares enjoy support from a reasonable yield and ever-present bid rumours.