London · Delayed Price · Currency is GBP · Price in GBX Smith & Nephew Earnings Call Transcripts
Fiscal Year 2025
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Delivered strong FY2025 results with 5.3% revenue growth, 160 bps margin expansion, and $840M free cash flow. 2026 guidance targets 6% organic revenue growth and $1.3B trading profit, with innovation and new launches driving performance.
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RISE strategy aims for 6%-7% organic growth and 9%-10% profit over three years, driven by innovation in sports medicine, wound care, and orthopedics. ASC expansion, new product launches like landmark knee and TESSA, and operational improvements support margin and cash flow goals.
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The new RISE strategy targets 6%-7% organic growth and 9%-10% profit growth, driven by innovation, operational efficiency, and focused capital allocation. Key business units will launch differentiated products, expand into new markets, and streamline portfolios, aiming for $1 billion free cash flow and 12%-13% ROIC by 2028.
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Q3 saw 5% underlying revenue growth, with strong performance in sports medicine, advanced wound management, and hips, while U.S. knees remained soft. Free cash flow guidance was raised to $750 million, and full-year revenue and margin guidance were reaffirmed despite ongoing headwinds from China and reimbursement changes.
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Q2 saw 6.7% underlying revenue growth and 100 bps margin expansion, with all business units contributing and strong cash flow enabling a $500 million share buyback. Full-year guidance is maintained despite macro uncertainties, with margin and free cash flow expected to rise further in H2.
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Q1 delivered 3.1% underlying revenue growth, ahead of guidance, with strong innovation and operational improvements. Margin guidance remains unchanged despite tariff headwinds, and sequential growth is expected through 2025 as China and trading day impacts subside.
Fiscal Year 2024
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Delivered strong Q4 and full-year growth, margin expansion, and improved cash flow, driven by operational improvements and innovation. China remains a headwind, but guidance for 2025 targets further revenue growth and significant margin expansion, with continued cost savings and efficiency gains.
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Q3 revenue grew 4% year-over-year, driven by strong established markets and innovation, but China headwinds from VBP and lower demand weighed on growth and margins. Full-year 2024 revenue growth is now expected at 4.5%, with 2025 margin guidance revised to 19-20%.
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Q2 saw 5.6% revenue growth and margin expansion, with strong performance in Sports Medicine, Advanced Wound Management, and Orthopedics. Full-year guidance is reaffirmed, cost savings initiatives are expanded, and cash conversion and ROIC are improving.