Smith+Nephew plc (LON:SN, NYSE:SNN), the global medical technology business, has reported results for the fourth quarter and full year ended 31 December 2023:
| 31 Dec | 31 Dec | Reported | Underlying | |||||
| 2023 | 2022 | growth | growth | |||||
| $m | $m | % | % | |||||
| Fourth Quarter Results1,2 | ||||||||
| Revenue | 1,458 | 1,365 | 6.8 | 6.4 | ||||
| Full Year Results1,2 | ||||||||
| Revenue | 5,549 | 5,215 | 6.4 | 7.2 | ||||
| Operating profit | 425 | 450 | ||||||
| Operating profit margin (%) | 7.7 | 8.6 | ||||||
| EPS (cents) | 30.2 | 25.5 | ||||||
| Trading profit | 970 | 901 | ||||||
| Trading profit margin (%) | 17.5 | 17.3 | ||||||
| EPSA (cents) | 82.8 | 81.8 |
Q4 Trading Highlights1,2
· Q4 revenue of $1,458 million (2022: $1,365 million), up 6.4% on an underlying basis. Reported growth of 6.8% was after 40bps FX tailwind
Full Year Financial Highlights1,2
· Revenue of $5,549 million (2022: $5,215 million), up 7.2% on an underlying basis, ahead of guidance. Reported growth of 6.4% was after -80bps FX headwind
o Orthopaedics underlying growth up 5.7%, setting foundations for further improvement
o Sports Medicine & ENT underlying growth up 10.0%, including headwind from slow China market
o Advanced Wound Management delivered 6.4% underlying revenue growth, maintaining momentum from prior year
· Trading profit up 7.6% on a reported basis to $970 million (2022: $901 million) with 17.5% trading profit margin (2022: 17.3%), in line with guidance. Reported operating profit was $425 million (2022: $450 million)
· Cash generated from operations of $829 million (2022: $581 million) with improved trading cash flow of $635 million (2022: $444 million)
· EPSA 82.8¢ (2022: 81.8¢), EPS 30.2¢ (2022: 25.5¢)
· Full year dividend of 37.5¢ per share (2022: 37.5¢ per share)
Strategic Highlights
· 12-Point Plan on-track with progress starting to translate into financial outcomes
· Innovation strategy driving higher growth and delivering a strong pipeline of new products
· Acquisition of CartiHeal, strengthening leadership in Sports Medicine biological healing
Outlook1,2
· Positive operating leverage and 12-Point Plan benefits expected to more than offset headwinds including continuing inflation, -70bps from China Volume Based Procurement (VBP) within Sports Medicine Joint Repair, and transactional foreign exchange
· 2024 guidance: underlying revenue growth expected in the range of 5.0% to 6.0% (4.6% to 5.6% reported), and trading profit margin expected to be at least 18.0%
· Midterm targets unchanged
Deepak Nath, Smith & Nephew Chief Executive Officer, said:
“I am pleased with our overall performance in 2023, as our actions to transform Smith+Nephew have begun to translate into meaningful financial outcomes. We delivered revenue growth ahead of guidance for the full year and made important improvements to our trading profit margin against a challenging macro-environment.
“Our 12-Point Plan is on track. While there is more to do to enhance our performance in US reconstruction, our Orthopaedics business is progressing along a clear improvement path. 2023 was another year of good growth for our Sports Medicine & ENT and Advanced Wound Management businesses.
“Our investment in innovation continues to deliver, with almost half of our 2023 growth coming from products launched in the last five years. We were pleased to add major launches in robotics, shoulder arthroplasty and negative pressure wound therapy to the portfolio during the year.
“We have entered 2024 as a fundamentally stronger business and look forward to delivering another year of robust growth and further margin expansion.”
Analyst conference call
An analyst conference call to discuss Smith & Nephew’s fourth quarter and full year results will be held 8.30am GMT / 3.30am EST on 27 February 2024, details of which can be found on the Smith+Nephew website at https://www.smith-nephew.com/en/about-us/investors.
