Strong Revenue Growth and Gaining Market Share in a Challenging Environment
5 August 2011 -- Smith & Nephew plc (LSE: SN, NYSE: SNN), the global medical technology business, announces its results for the second quarter ended 2 July 2011.
Q2 Commentary
- Reported revenue was $1,077 million, good underlying growth of 5%
- Reported trading profit was $236 million and trading margin was 21.9%
- 160 basis points decrease due to adverse sales mix, non-recurring expenses and the phasing of investments
- EPSA increased 6% to 18.1¢, benefiting from the weaker US dollar
- Geographically, growth was 5% in the US, 2% in Europe and 9% in the rest of the world
- Orthopaedics: another strong quarter of market outperformance, driven by 10% growth in US knees
- Endoscopy: stronger US performance offset by somewhat weaker Europe
- Advanced Wound Management: continued strong performance, next generation of NPWT launched in Europe
- Strong trading profit to cash conversion ratio of 103% (2010 - 89%)
- Interim dividend increased by 10% to 6.6¢
Commenting on the second quarter, Olivier Bohuon, Chief Executive Officer of Smith & Nephew, said:
“Smith & Nephew continued the strong dynamic of recent quarters, delivering 12% reported revenue growth and 5% underlying for the current quarter. We again outperformed our competitors in many of our markets by delivering innovative products that offer our customers clinical and cost benefits.
After four months as CEO, two things are certain in my mind. The first is that Smith & Nephew has a great foundation with a track record of successful innovation, a strong focus on customers, and talented people. The second certainty is that we can be even better.
We are operating in an increasingly changing environment. We are adapting to and anticipating these market conditions and have established a new strategic framework to drive Smith & Nephew?s future success. This strategy has five priorities: focus in established markets, grow in emerging markets, innovate for value, simplify our operating model and supplement the organic growth through acquisitions.
We are working to make Smith & Nephew an even better company for our customers and patients, our employees and our wider stakeholders.”
Analyst presentation and conference call
An analyst presentation and conference call to discuss Smith & Nephew?s second quarter results will be held at 9am GMT/4am EST today, Friday 5 August. 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/Q211. 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 7136 6284 in the UK or +1 (212) 444 0413 in the US, confirmation code: 5924597. Analysts should contact Jennifer Watson on +44 (0) 20 7960 2255 or by email at jennifer.watson@smith-nephew.com for conference details.
1 Unless otherwise specified as „reported?, all revenue increases/decreases throughout this document are underlying increases/decreases after adjusting for the effects of currency translation. See note 3 to the 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 financial statements. The underlying increase/decrease in trading profit is the increase/decrease in trading profit after adjusting for the effects of currency translation.
3 Adjusted earnings per ordinary share (“EPSA”) growth is as reported, not underlying, and is stated before restructuring and rationalisation costs, amortisation of acquisition intangibles and taxation thereon. See note 2 to the financial statements.
4 All numbers given are for the quarter ended 2 July 2011 unless stated otherwise.
5 References to market growth rates are estimates generated by Smith & Nephew based on a variety of sources.
Enquiries
Investors/Analysts
Phil Cowdy
+44 (0) 20 7401 7646
Smith & Nephew
Media
Jon Coles
+44 (0) 20 7404 5959
Justine McIlroy
Brunswick – London
