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Smith & Nephew Plc

Smith & Nephew Full year revenue guidance upgraded

Smith & Nephew (LON: SN), the global medical technology business, has reported its results for the second quarter and first half ended 29 June 2019.

Reported    Trading2    
29-Jun30-JunReported29-Jun30-JunUnderlying
20192018growth20192018growth
    $m $m %$m $m %
Second Quarter Results1
Revenue 1,283  1,245  3.1 1,283  1,245  3.5
First Half Results1
Revenue 2,485 2,440 1.8 2,485 2,440 3.9
Operating/trading profit 419 372 532 507
Operating/trading profit margin (%) 16.8 15.3 21.4 20.8
Cash generated from operations/trading cash flow 543 418 405 387
EPS/ EPSA (cents) 35.3 31.4 45.8 43.7

Namal Nawana, Chief Executive Officer, said:

“The positive momentum across the business globally in the first half of 2019 has led us to upgrade our full year revenue growth guidance.

“Organic revenue growth has been solid across all three franchises, with strong performance in Emerging Markets and global Sports Medicine. At the same time, we expanded our margin.

“We are delivering on our commitments to accelerate revenue growth, improve profitability and importantly make investments that support the long-term success of Smith+Nephew.”

Delivering stronger revenue growth in the quarter

· Q2 revenue up 3.5% on an underlying basis; reported growth was 3.1% despite the impact of a 2.9% currency headwind

· Strong mid-teens growth from the Emerging Markets, led by China up more than 30%

Improved trading profit margin, cash generation and earnings in the first half

· Trading profit margin up 60bps to 21.4%; operating profit margin up 150bps to 16.8%

· Strong cash generated from operations at $543 million

· Adjusted EPS (‘EPSA’) up 5%; EPS up 13%

Smith & Nephew Full year revenue guidance upgraded

· Expected underlying revenue growth guidance range raised 50bps to 3.0% to 4.0%; expected trading profit margin guidance unchanged, in the range of 22.8% to 23.2%