Smith & Nephew Plc · LSE:SN.
Smith & Nephew — Investor Presentation (December 2018)
22 slides from Smith & Nephew's investor presentation, December 2018
Slide 1: Investor Presentation October – December 2018
Investor Presentation October – December 2018 Supporting healthcare professionals for over 150 years
Slide 2: Forward looking statements and non-IFRS measures
Forward looking statements and non-IFRS measures This document may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and trading margins, market trends and our product pipeline are forward-looking statements. Phrases such
Slide 3: About Smith & Nephew
About Smith & Nephew 100 Smith & Nephew is a diversified FTSE100 A constituent of the UK’s Shares S&N has paid a dividend to advanced medical technology FTSE100, our shares are traded shareholders on its ordinary business that supports in London and New York shares every year since 1937 healthcare p
Slide 4: Company of pioneers for over 150 years
Smith & Nephew is a company of pioneers, extending access to advanced medical technologies and enabling better outcomes for patients globally. We’ve been doing this for over 150 years 50 1896 1914 1856 days after the outbreak of WW1, FROM Thomas James Smith Horatio Nelson Smith entered we received a
Slide 5: Our performance
Our performance Revenue Trading Profit Trading cash conversion $4,765m +3%* $1,048m 22.0% margin 90% Adjusted earnings per share (EPSA) Dividend per share Net Debt 94.5¢ +5%CAGR 35.0¢ +6%CAGR $1,281m * Underlying growth percentage after adjusting for the effect of currency translation, acquisitions
Slide 6: Our business: A portfolio medical device company
Our business: A portfolio medical device company ALLEVYN™ LIFE PICO™ Advanced Foam Negative Pressure Wound Dressings Wound Therapy Advanced Advanced wound devices Collagenase wound care JOURNEY™ II BCS SANTYL™ Ointment Bi-Cruciate Enzymatic debrider Stabilised Knees Knee System Advanced wound bioact
Slide 7: Improving how we do business
Improving how we do business Portfolio medical device company • Advanced stages of deciding longer- term strategic objectives • Metrics being validated New commercial model and structure • Communication in early 2019 • Corporate structure simplified, top- level changes complete Strategy Organisation
Slide 8: New commercial model: creation of global franchises
New commercial model: creation of global franchises Old model: New model: Three generalist commercial leaders Three specialist franchise presidents Specialist commercial role Generalist commercial role Executive Committee member appointed 8
Slide 9: New commercial model: delayering and country clusters
New commercial model: delayering and country clusters Example of old model, Northern and Central Europe: New model: Multiple layers of regional generalists Simplification and specialisation Specialist commercial role Generalist commercial role 9
Slide 10: Q3 revenue of $1,169m; 2% reported growth, 3% underlying
Q3 revenue of $1,169m; 2% reported growth, 3% underlying Q3 revenue split Product franchise growth Emerging Markets $207m US Sports Medicine, Trauma & OSB 4% $569m Sports Medicine Joint Repair 8% Arthroscopic Enabling Tech -2% Other Established Trauma & Extremities 3% Markets $393m Other Surgical 12
Slide 11: YTD revenue of $3,610m; 4% reported growth, 2% underlying
YTD revenue of $3,610m; 4% reported growth, 2% underlying YTD revenue split Product franchise growth Emerging Markets $638m US Sports Medicine, Trauma & OSB 2% $1,704m Sports Medicine Joint Repair 7% Arthroscopic Enabling Tech -3% Other Established Trauma & Extremities -1% Markets $1,268m Other Surg
Slide 12: Accelerating Performance and Execution (APEX)
Accelerating Performance and Execution (APEX) Simplify and streamline, while meeting future volume demand and maintaining focus Manufacturing, on quality: Warehousing & • rationalisation of manufacturing footprint Distribution • multiple initiatives to simplify and optimise Supply Chain General & Le
Slide 13: Summary of APEX financial guidance
Summary of APEX financial guidance • Benefits of $160m p.a. by 2022 Illustrative phasing of annualised benefits • Total one-off costs (mainly cash) up and one-off charges to $240m (c.150% of annualised run- rate benefits) • Period: 2018 – 2022, with around 75% of benefits and >75% of costs by 2020 •
Slide 14: 2018 Guidance
2018 Guidance Underlying: 2% to 3% Sales growth Reported(1): 3% to 4% Trading profit margin At or above 2017 levels Tax rate 20-21%(2) . (1) Based on exchanges rates prevailing on 26 October 2018 14 (2) Tax rate on trading result
Slide 15: Appendices
* smith&nephew Appendices
Slide 16: 2018 technical guidance
2018 technical guidance October 2018 Foreign exchange and other revenue impact Impact of translational FX on revenue* +0.6% Acquisition impact on revenue +0.3% Exceptional items Restructuring costs c. $120m Acquisition and integration costs c. $5m European Medical Device Regulation (MDR) compliance
Slide 17: Franchise revenue analysis
Franchise revenue analysis 2017 2018 Full Q1 Q2 Q3 Q4 Q1 Q2 Q3 Year Growth Growth Growth Growth Growth Growth Growth Revenue Growth % % % % % % % $m % Sports Medicine, Trauma & OSB 4 3 2 2 3 1 2 476 4 Sports Medicine Joint Repair 7 5 8 6 6 6 8 166 8 Arthroscopic Enabling Technologies (1) (4) (3) (3)
Slide 18: Regional revenue analysis
Regional revenue analysis 2017 2018 Full Q1 Q2 Q3 Q4 Q1 Q2 Q3 Year Growth Growth Growth Growth Growth Growth Growth Revenue Growth % % % % % % % $m % Geographic regions US 1 2 2 1 2 (2) 1 569 4 Other Established 1 (1) 0 (1) 0 (2) 1 393 (1) Markets Established Markets 1 1 1 0 1 (2) 1 962 2 Emerging M
Slide 19: Trading days per quarter
Trading days per quarter Q1 Q2 Q3 Q4 Full Year 2016 64 64 63 60 251 2017 64 63 63 60 250 2018 63 64 63 61 251 2019 63 63 63 62 251 Year-on-year differences in the number of trading days typically impacts our surgical businesses in the Established Markets more than our wholesaler and distributor-supp
Slide 20: Management
Management Namal Nawana Chief Executive Officer Namal joined the Board and was appointed Chief Executive Officer on 7 May 2018. He is based in Andover, US. Namal holds an Honours degree in mechanical engineering and a Master of Medical Science from the University of Adelaide, South Australia as well
Slide 21: Investor Relations Contacts
Investor Relations Contacts Andrew Swift Ghazaleh Mahdizadeh Head of Investor Relations Investor Relations Manager E: andrew.swift@smith-nephew.com E: ghazaleh.mahdizadeh@smith-nephew.com T: +44 (0) 207 960 2285 T: +44 (0) 207 960 2339 Nick Fridberg Smith & Nephew plc Senior Director Strategic Plann
Slide 22: Smith & Nephew: Supporting healthcare professionals for over 150 years
> smith&nephew Supporting healthcare professionals for over 150 years
Smith & Nephew — Investor Presentation (December 2018) on 6ix