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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.

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.

But chief executive Deepak Nath told the FT that the company, one of the world’s biggest medical device makers, was “well equipped” to ride out tariff uncertainty and a fall in revenues from China driven by a government cap on healthcare spending.

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, accounts for roughly $100mn of the company’s annual revenue.

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.

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.

Referring to the geopolitical uncertainty, Nath said: “No one’s got a crystal ball . . . It’s as murky [to us] as anybody else. What we’re betting on is our ability to be agile, to be able to handle what comes our way.”

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

Some investors have called for Smith & Nephew to spin off its orthopaedics business, the largest of the company’s 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.

“We continue to believe in the value of our portfolio,” Nath said when asked if he still thought the company was better as a whole.

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

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.

Nath said the orthopaedics division was now better run, with improvements to its supply chain logistics — an area that had caused problems in the past.

“We’re not dogmatic about it and portfolio management is an active thing. We’re constantly re-evaluating, it’s not commitment bias. We’re not choosing to be in orthopaedics because we’ve always done it.”

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.

Analysts at RBC Capital Markets said in a note that despite performance in the final quarter of last year, “we do not see today’s results as sufficient to underpin 2026 guidance at this stage, or to drive material increases to consensus revenue growth forecasts for 2026”.

Barclays analysts described “structural pressures” in the orthopaedics division despite improvements in the area.

“We maintain an active dialogue with all of our shareholders and we certainly maintain a very active and constructive dialogue with Cevian,” Nath said. “As to whether that’s enough to assuage them, I’ll let them speak for themselves.”