The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Thomas M. Jones - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: It's tom Jones from Berenberg. I have 2 questions. One, on China, different corporates like bringing out very mixed messages about
China, but you seemed reasonably happy with your Chinese business. Are you just not seeing any kind of wobble in the market, or
is there something different about your business, which means it's performing better than the last time China had a wobble, and
the wheels, frankly, came off? And then the second question is a bit of more of a structural one. Over the last 10 or 15 years, one of
the -- so big problems at Smith & Nephew regarding M&A is that there are other players out there bidding for the same assets who
tend to have less of a focus on returns and more of a focus on EPS accretion. And Smith & Nephew, quite rightly, has always focused
on returns, but that's always hampered you to some degree. So you've been limited to doing M&A where you have the scale, where
you have the market presence to kind of generate returns at the same prices or better prices than other people. So that's been limited
kind of really to Sports Medicine to a degree. Wound and everything else has been a bit mixed. So going forward, your guidance
implies you're willing to spend $2.5 billion, $3 billion before touching the equity side of things on M&A, which is quite a lot of
spending. Have you got enough places in your business where you have the scale to generate the kind of returns that your board
demands? Or are we going to struggle over the next 2 or 3 years to find the assets at the right prices where you can generate returns
that keep the board happy, the EPS accretion that keeps us happy and don't do bad M&A which upsets everyone?
Question: Thomas M. Jones - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: And maybe just a quick follow-up on the board, since you mentioned, and the returns question. My suspicion is a lot of your
predecessors were a bit hamstring -- hamstrung, sorry, by a kind of return threshold that the board demanded. In your discussions
with them, have they kind of reined in their expectations a little bit to give you a bit of -- a little bit more flexibility to do strategically
sensible stuff that might not have the sort of 1, 2, 3-year return profile? Or just the kind of dynamic not really changed very much?
Question: Virendra Chauhan - AlphaValue - Analyst
: Good morning Namal, Graham thank you for taking the question, So I have one on wound care. So I mean, the commentary of
weakness in Europe has been pretty steady over the last at least 2, 3 quarters. And so any actions that you've broadly taken to counter
this and results that you have seen?
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