{"id":322298,"date":"2026-03-05T01:09:16","date_gmt":"2026-03-05T01:09:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/322298\/"},"modified":"2026-03-05T01:09:16","modified_gmt":"2026-03-05T01:09:16","slug":"smith-nephew-well-equipped-to-ride-out-tariff-uncertainty-chief-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/322298\/","title":{"rendered":"Smith & Nephew \u2018well equipped\u2019 to ride out tariff uncertainty, chief says"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

The chief executive of medical device maker Smith & Nephew is confident the group can weather geopolitical uncertainty, including shifting US tariffs, a slowdown in its China business and war in the Middle East.<\/p>\n

The London-listed company, which reported a $17mn impairment from US tariffs last year, expects the impact to rise to as high as $60mn in 2026.<\/p>\n

But chief executive Deepak Nath told the FT that the company, one of the world\u2019s biggest medical device makers, was \u201cwell equipped\u201d to ride out tariff uncertainty and a fall in revenues from China driven by a government cap on healthcare spending. <\/p>\n

Smith & Nephew employs 180 people in Saudi Arabia and the UAE and works with distributors across the Middle East. The region, which has been hit by fallout from the US-Israeli war in Iran<\/a>, accounts for roughly $100mn of the company\u2019s annual revenue.<\/p>\n

Nath was speaking after the company announced its annual results this week, reporting $6.16bn in revenues in 2025, a 6.1 per cent increase on the previous year. Operating profit increased to $794mn from $657mn in 2024.<\/p>\n

\"DeepakDeepak Nath said: \u2018What we\u2019re betting on is our ability to be agile, to be able to handle what comes our way\u2019 \u00a9 Jose Sarmento Matos\/Bloomberg<\/p>\n

Smith & Nephew also noted that a three-year strategic overhaul had come to a close. During that time, the share of its revenues derived from China has fallen from 7 to 2 per cent as it has reduced its exposure to the country.<\/p>\n

Referring to the geopolitical uncertainty, Nath said: \u201cNo one\u2019s got a crystal ball\u2009.\u2009.\u2009.\u2009It\u2019s as murky [to us] as anybody else. What we\u2019re betting on is our ability to be agile, to be able to handle what comes our way.\u201d<\/p>\n

Smith & Nephew has attracted the attention of activist investor Cevian Capital<\/a>, which disclosed a stake in the business in 2024 and currently owns a 9 per cent shareholding.<\/p>\n

Some investors have called for Smith & Nephew to spin off its orthopaedics<\/a> business, the largest of the company\u2019s three divisions but which has grown at a slower rate in the past. Its two other business lines are advanced wound management and sports medicine and ENT.<\/p>\n

\u201cWe continue to believe in the value of our portfolio,\u201d Nath said when asked if he still thought the company was better as a whole.<\/p>\n

The orthopaedics division had been a major contributor to improvements in free cash flow, margins and return on invested capital, he added. <\/p>\n

Orthopaedics revenues increased 7.9 per cent in the final quarter of last year, the biggest quarter-on-quarter rise in two years. The figures for sports medicine and ENT and advanced wound management were 7.3 and 2.8 per cent respectively.<\/p>\n

Nath said the orthopaedics division was now better run, with improvements to its supply chain logistics \u2014 an area that had caused problems in the past.<\/p>\n

\u201cWe\u2019re not dogmatic about it and portfolio management is an active thing. We\u2019re constantly re-evaluating, it\u2019s not commitment bias. We\u2019re not choosing to be in orthopaedics because we\u2019ve always done it.\u201d<\/p>\n

Shares in the company have risen 16 per cent in the past year and the company forecasts underlying revenue growth of 6 per cent in 2026 against the average analyst consensus of 5.5 per cent. <\/p>\n

Analysts at RBC Capital Markets said in a note that despite performance in the final quarter of last year, \u201cwe do not see today\u2019s results as sufficient to underpin 2026 guidance at this stage, or to drive material increases to consensus revenue growth forecasts for 2026\u201d.<\/p>\n

Barclays analysts described \u201cstructural pressures\u201d in the orthopaedics division despite improvements in the area.<\/p>\n

\u201cWe maintain an active dialogue with all of our shareholders and we certainly maintain a very active and constructive dialogue with Cevian,\u201d Nath said. \u201cAs to whether that\u2019s enough to assuage them, I\u2019ll let them speak for themselves.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":322299,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-322298","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/322298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=322298"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/322298\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/322299"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=322298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=322298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=322298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}