Smith & Nephew plc · LSE:SN.
Smith & Nephew — Q1 2018 Earnings Presentation
18 slides from Smith & Nephew's earnings presentation, Aug 21, 2018
Slide 1: 2018 First Quarter Trading Report
2018 First Quarter Trading Report 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: Olivier Bohuon, Chief Executive Officer
Olivier Bohuon Chief Executive Officer 3
Slide 4: Q1 revenue of $1,196m; flat underlying growth
Q1 revenue of $1,196m; flat underlying growth Geographical growth Revenue split Product franchise growth Sports Medicine Joint Repair 6% Arthroscopic -5% Enabling Tech -2% US -2% Trauma & Extremities Other surgical 9% 2% Knees Other Est -2% -2% Hips 0% AWC -12% 9% Emerging AWB 2% AWD -5% 0% 5% 10% -
Slide 5: Sports Medicine, Trauma & OSB
Sports Medicine, Trauma & OSB Q1 revenue performance • Sports Medicine Joint Repair +6% ($170m) • Arthroscopic Enabling Technologies (AET) -5% ($152m) • Trauma & Extremities -2% ($121m) • Other Surgical Businesses* +9% ($49m) Commentary • REGENETEN™ contributing to strong Shoulder growth • AET impac
Slide 6: Reconstruction
Reconstruction Q1 revenue performance • Knees: global +2%, US +0%, OUS +4% ($259m) • Hips: global -2%, US -3%, OUS -1% ($155m) Commentary • Knee growth continues above market • JOURNEY II, ANTHEM and LEGION revision driving growth • Relative Hip dynamic consistent with recent quarters JOURNEY™ II XR
Slide 7: AAOS 2018
AAOS 2018 ROBOTICS AND KNEES IN FOCUS • full commercial launch of JOURNEY™ II XR • available with NAVIO™ Robotics System • NAVIO offers a wide range of Knee indications • Platform for future innovation and growth OTHER FOCUS PRODUCTS: POLAR3™ Hip System, EVOS™ SMALL Plating System, LENS™ Surgical Im
Slide 8: Advanced Wound Management
Advanced Wound Management Q1 revenue performance • Advanced Wound Care 0% ($183m) • Advanced Wound Bioactives -12% ($59m) • Advanced Wound Devices +2% ($48m) Commentary • AWC: good US growth continues and changes implemented in UK ALLEVYN™ LIFE non- • AWB: now expect mid single digit percentage decl
Slide 9: Graham Baker, Chief Financial Officer
Graham Baker Chief Financial Officer 9
Slide 10: 2018 Guidance update
2018 Guidance update Sales growth: Trading profit margin: Tax rate(3): 2018 Underlying: 3% to 4% Reported(1): around 7% to 8% 30-70bp improvement 20-21% Sales growth: Trading profit margin: Tax rate(3): Update Underlying: 2% to 3% Reported(2): around 5% to 6% At or above 2017 levels 20-21% (1) Based
Slide 11: Olivier Bohuon, Chief Executive Officer
Olivier Bohuon Chief Executive Officer 11
Slide 12: A Smith & Nephew fit for the future
A Smith & Nephew fit for the future Tax rate Higher growth Trauma & Extremities Product launches Guidance SANTYL™ Emerging Markets Shifting balance Cost saving Group Optimisation Pricing Competition Performance WEREWOLF JOURNEY II Established Markets ArthroCare Wound Shareholder return Sustainabilit
Slide 13: Appendices
ot smith&nephew Appendices
Slide 14: 2018 technical guidance
2018 technical guidance Guidance April 2018 Foreign exchange and other revenue impact Impact of translational FX* on revenue +2.4% Acquisition impact on revenue +0.3% Exceptional items Restructuring costs c. $100m Acquisition and integration costs c. $5m European Medical Device Regulation (MDR) comp
Slide 15: Franchise revenue analysis
Franchise revenue analysis 2017 2018 Full Q1 Q2 Q3 Q4 Q1 Year Growth Growth Growth Growth Growth Revenue Growth % % % % % $m % Sports Medicine, Trauma & OSB 4 3 2 2 3 492 1 Sports Medicine Joint Repair 7 5 8 6 6 170 6 Arthroscopic Enabling Technologies (1) (4) (3) (3) (3) 152 (5) Trauma & Extremitie
Slide 16: Regional revenue analysis
Regional revenue analysis 2017 2018 Full Q1 Q2 Q3 Q4 Q1 Year Growth Growth Growth Growth Growth Revenue Growth % % % % % $m % Geographic regions US 1 2 2 1 2 545 (2) Other Established 1 (1) 0 (1) 0 446 (2) Markets Established Markets 1 1 1 0 1 991 (2) Emerging Markets 12 13 9 14 12 205 9 Group 3 3 3
Slide 17: 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 • 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-supported businesses. 1
Slide 18: Supporting healthcare professionals for over 150 years
> smith&nephew Supporting healthcare professionals for over 150 years 18