Smith & Nephew turns attention to emerging economies to counteract tough European market
Sunday 17 July 2011
Olivier Bohuon, the new chief executive of the FTSE 100 medical technology giant Smith & Nephew, will announce plans to grow the business in emerging markets next month.
Mr Bohuon has been reviewing Smith & Nephew's strategy since he succeeded Dave Illingworth in April. It is understood that he wants to stamp his mark on the group by emphasising sales opportunities in fast-growing countries, such as China, where the group has a small presence relative to its other operations.
An industry source said Mr Bohuon is likely to provide details at the company's first-half results announcement on 5 August.
Management has previously hinted at a slight refocus at an analysts' presentation in May. Smith & Nephew pointed out that government austerity measures meant that the European market remained tough, while China and India grew strongly, "albeit from a low base".
Mr Bohuon would be keen to offer investors a clear vision for the future of Smith & Nephew, as the artificial hip and knee-maker has long had to fend off rumours of its being a takeover target for US rivals such as Johnson & Johnson and Biomet.
However, Mr Bohuon did inherit a position of relative strength. In February's full-year results, Mr Illingworth announced that net debt had nearly halved to $500m (£307m) while trading profit was up 11 per cent on 2009 to $969m.
Smith & Nephew's strong performance last year helped the share price recover from a 12-month low of 537.5p to 742p earlier this year. It is now trading at around 660p, valuing the group at nearly £6bn.
Mr Bohuon joined the 155-year-old group from the French pharmaceuticals company Pierre Fabre, where he was chief executive. Mr Illingworth left after nine years at Smith & Nephew, the last four of which were as chief executive.
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