Smith & Nephew Plc (LON:SN, NYSE:SNN), the global medical technology company, has reported results for the second quarter and first half ended 28 June 2025:
| 28 June | 29 June | Reported | Underlying | |||||
| 2025 | 2024 | growth | growth | |||||
| $m | $m | % | % | |||||
| Second Quarter Results1,2 | ||||||||
| Revenue | 1,553 | 1,441 | 7.8 | 6.7 | ||||
| Half Year Results1,2 | ||||||||
| Revenue | 2,961 | 2,827 | 4.7 | 5.0 | ||||
| Operating profit | 429 | 328 | 30.6 | |||||
| Operating profit margin (%) | 14.5 | 11.6 | ||||||
| EPS (cents) | 33.5 | 24.5 | 36.6 | |||||
| Cash generated from operations | 568 | 368 | 54.3 | |||||
| Trading profit | 523 | 471 | 11.2 | |||||
| Trading profit margin (%) | 17.7 | 16.7 | ||||||
| EPSA (cents) | 42.9 | 37.6 | 14.1 | |||||
| Free cash flow | 244 | 39 | 528.3 |
H1 Highlights1,2
· H1 underlying revenue growth was 5.0%. Reported revenue growth was 4.7% including -30bps FX headwind. There were two fewer trading days in the period versus the prior year
· Trading profit up 11.2% with 100bps of trading profit margin expansion to 17.7% (H1 2024: 16.7%), driven by revenue leverage and accelerated operational savings. Operating profit increased by 30.6%
· Strong cash generation, with trading cashflow of $487 million (H1 2024: $284 million) and trading cash conversion up 33 percentage points to 93% (H1 2024: 60%), driven by favourable working capital movements
· Free cash flow increased to $244 million (H1 2024: $39 million); lower restructuring charge of $8 million (H1 2024: $62 million)
· EPSA up 14.1% to 42.9¢ (H1 2024: 37.6¢); EPS up 36.6% to 33.5¢ (H1 2024: 24.5¢)
Q2 Trading Highlights1,2
· Underlying revenue growth accelerated to 6.7%. Reported growth was 7.8% including 110bps FX tailwind. There was one fewer trading day in the period versus the prior year
· All regions and all the three business units grew ahead of Q1
· Orthopaedics underlying revenue growth of 5.0% (reported growth 5.8%) with both Global and US Reconstruction sequentially improving from Q1
· Sports Medicine & ENT underlying revenue growth up 5.7% (reported growth 6.8%). Excluding China, underlying revenue growth was 10.2% (reported growth 11.4%)
· Advanced Wound Management underlying revenue growth of 10.2% (reported growth 11.4%), including rebound in Advanced Wound Bioactives
Interim Dividend and Share Buyback
· Interim dividend up 4.2% to 15.0¢ (H1 2024: 14.4¢)
· Announcing additional return of $500 million to shareholders via share buyback in the second half of 2025, while retaining our leverage, and without compromising our growth plans. This reflects strong cash generation and balance sheet
Full Year 2025 Guidance Unchanged1,2
· Underlying revenue growth is expected to be around 5.0% (reported growth 5.5%), and trading profit margin is expected to expand to between 19.0% and 20.0%
· Continued higher cadence of product launches and clinical evidence to underpin further growth
· Unchanged outlook includes an expected net impact of $15 to $20 million from tariffs in 2025, based on announced measures, and mitigations, as previously announced
Deepak Nath, Smith & Nephew Chief Executive Officer, said:
“I’m pleased with our strong performance in the first half of 2025. We are delivering sustained higher revenue growth, increased profitability and better cash generation. As expected, revenue growth accelerated in the second quarter, with all regions and business units contributing. We saw a quarter-on-quarter improvement in our Orthopaedics business, and this was the fourth consecutive quarter of sequential improvement from US Reconstruction & Robotics on an average daily sales basis.
“Recent product launches are driving growth across all business units, with US Hip Implants becoming another example of the innovation driven growth that is central to our strategy. We maintained our high cadence of launches in H1 with new products in Knee Implants, Robotics, Trauma, Sports Medicine and Advanced Wound Care. New products launched in the last five years accounted for three-quarters of our first half growth.
“The operational improvements we have made under the 12-Point Plan are increasingly translating into better financial performance. We are on track for our full year revenue growth target, a significant step-up in profitability and strong free-cash generation, and are announcing a $500 million share buyback. There is more to be done, but the transformation of Smith & Nephew is starting to deliver substantial value.”
Analyst conference call
An analyst conference call to discuss Smith+Nephew’s second quarter and first half results will be held today at 8.30am BST / 3.30am EDT, details of which are available on the Smith+Nephew website at https://www.smith-nephew.com/en/who-we-are/investors.
