Global healthcare giant Smith & Nephew has warned that April’s revenues are down almost half as non-essential operations are suspended around the globe.
Reporting first quarter revenues down 7.6 per cent, with the cut off as lockdown hit in the 海角视频, the Hull-founded London and New York listed entity has now set out on a $200 million (£161 m) cost saving campaign.
The home city’s facilities will be immune from a temporary production slowdown, it has however confirmed.
Worldwide year on year revenue dipped from $1.2 billion (£971m) to $1.134 billion (£916m).
The business shrunk 5.7 per cent, including a 3.4 per cent benefit from acquisitions and -1.5 per cent foreign exchange headwind.
Chief executive Roland Diggelmann said performance of all three global franchises - US, other established markets Australia, Canada, Europe, Japan and New Zealand and emerging markets - had been held back by the impact of Covid-19 to varying degrees, dependent on geography and exposure to elective procedures.
He said: “Countries and healthcare systems around the world are facing an unprecedented challenge, and we are seeing a significant short-term impact on Smith & Nephew. I would like to thank everyone at Smith & Nephew who has adapted and worked tirelessly to protect colleagues, support our customers and communities, and prepare the business for the future.
“The recovery in China is encouraging, as is the restart of elective surgeries in many other countries, and especially within the US. While there is still much uncertainty, Smith & Nephew has the financial strength to withstand this period and, as demand increases, we are ready to step up and support customers through our robust supply chain, innovative products and some new ways of working.
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“Looking to the medium-term, we have a proven strategy that will continue to guide our choices. We remain committed to our ambition to consistently outgrow our markets at the same time as delivering ongoing improvements to trading profit margin.”
In his investor report, Mr Diggelmann told how the business’ Covid-19 response focused on three priorities - the health and safety of employees and protecting jobs; supporting customers and communities; and ensuring the sales force and supply chain are ready as markets recover.
The company has just missed out on becoming a significant player in the ventilator manufacturing challenge laid down in the 海角视频, with an academic joint venture that brought forward the OxVent prototype.
April’s underlying revenue was down 47 per cent, with quarter two revenue and first half trading margin expected to be substantially down on prior year, as it has previously announced.
2020 guidance remains withdrawn due to continuing uncertainty regarding impact of coronavirus.
Mr Diggelmann added that Smith & Nephew has a strong balance sheet and good liquidity, with net debt of $1.8 billion (£1.4b) at quarter end compared to $3.4 billion (£2.7b) of committed facilities.
Drilling down, advanced wound management - Hull's strength - saw Q1 revenues of $309m (£249m) up 7.3 per cent from $288m (£232m), however it was driven by acquisition, with organic growth seeing a 4 per cent slide.
Smith & Nephew has confirmed cost control measures underway include spending on travel, events, advertising, promotion, consultancy, new hires, slowing capital expenditure and temporarily reducing production at some facilities, although not at Hull.