Smith & Nephew Inc. First Quarter 2013 Results
Published: May 02, 2013
-- Revenue $1,075 million, up 1% on an underlying basis
-- Trading profit was $241 million, with trading profit margin 22.4%, in-line with expectations
-- New capital allocation framework announced, confirming commitment to further investment and acquisitions and a $300 million share buyback programme
-- Advanced Wound Management performed strongly, with Healthpoint Biotherapeutics excelling in its first quarter as a Smith & Nephew business
-- In Advanced Surgical Devices, Trauma again performed strongly and Orthopaedic Reconstruction was slightly weaker than anticipated, with targeted investments underway to improve growth
-- Strong growth in the Emerging and International Markets, with further investment planned to develop the platform and portfolio through acquisitions of an Indian trauma business (announced today) and our Brazilian distributor.
Commenting on Q1, Olivier Bohuon, Chief Executive Officer of Smith & Nephew, said:
“Smith & Nephew has consistently delivered revenue and earnings growth together with strong cash generation in the challenging markets of the last few years. In light of this, and our confidence in the continued execution of our Strategic Priorities, we have undertaken a major review of our capital allocation framework.
“We will continue to invest in our growth products, franchises and geographies and maintain adequate headroom for further significant acquisitions. We have increased the level of dividend and moved to a progressive policy. Further to these commitments, today we are announcing the start of a share buy-back programme to return $300 million of surplus capital to our shareholders.”
Analyst presentation and conference call
An analyst presentation and conference call to discuss Smith & Nephew’s first quarter and preliminary results will be held at 8.30am BST/3.30am EST today, 2 May. This will be broadcast live on the company’s website and will be available on demand shortly following the close of the call at http://www.smith-nephew.com/Q113. A podcast will also be available at the same address. If interested parties are unable to connect to the web, a listen-only service is available by calling +44(0)20 7138 0815 (passcode 8142812) in the UK or +1718 354 1152 (passcode 8142812) in the US. Analysts should contact Jennifer Heagney on +44 (0) 20 7960 2255 or by email at email@example.com for conference details.
1 Unless otherwise specified as ‘reported’ all revenue growths throughout this document are underlying increases/decreases after adjusting for the effects of currency translation, and inclusion of the comparative impact of acquisitions and exclusion of disposals. See note 3 to the interim financial statements for a reconciliation of these measures to results reported under IFRS.
2 A reconciliation from operating profit to trading profit is given in note 4 to the interim financial statements. The underlying growth in trading profit is the growth in trading profit after adjusting for the effects of currency translation, inclusion of the comparative impact of acquisitions and exclusion of disposals.
3 Adjusted earnings per ordinary share (“EPSA”) growth is our reported trend measure and is stated before acquisition related costs, restructuring and rationalisation costs and amortisation of acquisition intangibles and taxation thereon. See note 2 to the interim financial statements.
4 Earnings per share for the three month period ended 31 March 2012 have been restated following the adoption of the revised IAS 19 Employee Benefits standard. Basic and adjusted basic earnings per share were reduced by 0.2¢ as a result of the restatement. See note 1 to the interim financial statements.
5 All numbers given are for the quarter ended 30 March 2013 unless stated otherwise.
6 References to market growth rates are estimates generated by Smith & Nephew based on a variety of sources.
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Smith & Nephew
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