Smith & Nephew Plc · LSE:SN.
Smith & Nephew — Q4 2025 Earnings Presentation
43 slides from Smith & Nephew's earnings presentation, Mar 2, 2026
Slide 1: Fourth Quarter and Full Year 2025
Fourth Quarter and Full Year 2025 2 March 2026
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 profit margins, market trends and our product pipeline are forward-looking statements. Phras
Slide 3: Summary
Summary Revenue growth ahead of guidance, at 5.3% underlying revenue growth for FY 2025 • All 3 business units grew by >5% underlying • >60% of growth came from products launched in last 5 years • Growth included one fewer trading day vs 2024 and was 7% underlying ex China Strong progress on trading
Slide 4: 12-PP successfully elevated our financial performance
12 - PP successfully elevated our financial performance, despite significant macro headwinds LSD to MSD 240bp 15x 170bp R evenue growth Increase in Group Increase in FCF* (330bp**) 5.7% CAGR trading margin Increase in ROIC All financial metrics from 2022 to 2025 LSD to MSD = low single digits to mid
Slide 5: Q4 2025 revenue
Q4 2025 revenue Q4 2025 5
Slide 6: Q4 2025 summary revenue performance
Q4 2025 summary revenue performance Total revenue of $1,702m • Underlying revenue growth of +6.2%, including 100bps headwinds from China; reported 8.3% • 210bps tailwind from FX on reported growth • One extra trading day vs Q4 2024 Growth by Business Unit* Growth by Region* Group 6.2% Group 6.2% Ort
Slide 7: Orthopaedics
Orthopaedics Strong performance across the business Revenue of $667m: Q4 sales factors +7.9% underlying*; +9.8% reported • Global Knees and Hips +6.1% and +5.7%: • US Hips +7.5%; continued positive momentum in Hips through Knees Hips Other Recon** Trauma and Extremities ◊ ◊ CATALYSTEM , and Knees +3
Slide 8: Continued growth in US hips with sustainable improvement in US knees to come
Continued growth in US hips with sustainable improvement in US knees to come US Hips US Recon 14.0% 16.0% 12.0% 14.0% 10.0% 12.0% 9.1% 8.5% 10.0% 9.6% 8.0% 7.7% 7.5% 6.3% 7.4% 8.0% 6.0% 5.5% 8.2% 8.4% 6.4% 6.9% 5.8% 3.6% 6.0% 4.0% 3.6% 4.3% 5.1% 3.2% 4.2% 3.7% 4.0% 3.4% 3.6% 1.8% 2.2% 2.9% 3.5% 2.0%
Slide 9: Sports Medicine & ENT
Sports Medicine & ENT Strong growth in Joint Repair; AET and ENT impacted by China VBP Revenue of $541m: Q4 sales factors +7.3% underlying*; +9.5% reported • Sports Medicine Joint Repair +10.9% (+12.9% ex China): ◊ ◊ • Continued strong growth from REGENETEN , Q- FIX KNOTLESS SMJR AET ENT • Good mome
Slide 10: Advanced Wound Management
Advanced Wound Management Solid growth across the business; AWB and AWD impacted by strong prior year comps Revenue of $494m: Q4 sales factors +2.8% underlying*; +5.3% reported • Advanced Wound Care +4.4%: • Solid growth across all key segments AWC AWB AWD ◊ • ALLEVYN Complete Care launch contributi
Slide 11: FY 2025 financials
FY 2025 financials Q4 2025 11
Slide 12: FY revenue growth by Business Unit
FY 25 revenue growth by Business Unit $m 46 6,164 95 95 118 5,810 FY 2024 Orthopaedics Sports Medicine AWM Translational FY 2025 & ENT FX impact Revenue ($m) 2,437 1,934 1,793 6,164 Reported growth 5.7% 6.0% 6.7% 0.8% 6.1% Underlying growth 5.1% 5.2% 5.6% 5.3% 12
Slide 13: Our growth excluding China
Our growth excluding China Underlying r evenue growth excluding China 2022 - 2025 8.2% 7.2% 7.0% Peak China headwind in 2025 of 170bps 6.7% China just over 2% of group sales in 2025 5.4% 5.3% 5.3% Group underlying revenue growth ex China 4.7% >6% since 2023 AET and ENT China VBP expected in 2026 – m
Slide 14: FY trading income statement
FY trading income statement FY 202 5 FY 202 4 Reported $m $m growth Revenue 6,164 5,810 6.1 % Cost of goods sold (1,7 96 ) (1,725 ) Gross profit 4, 368 4,085 6.9 % Gross profit margin 70 .9% 70 .3% Selling, general and admin (2,864 ) (2,748 ) 4.2% Research and development (293 ) (288 ) 1.8 % Trading
Slide 15: FY operating profit and EPSA
FY operating profit and EPSA FY 202 5 FY 202 4 Reported $m $m growth IFRS operating profit 794 657 20.7 % IFRS operating profit margin 12.9 % 11 .3% Adjusted earnings per share ("EPSA") 102.0 ¢ 84 .3 ¢ 21.0 % Earnings per share ("EPS") 72.1 ¢ 47 .2 ¢ 5 2.8 % Dividend per share 39.1 ¢ 37 .5 ¢ 4.3% Gr
Slide 16: FY 2025 trading margin bridge
FY 2025 trading margin bridge 2.4% 19.7% 18.1% 1.8% - 1.7% 0.0% - 0.5% - 0.3% FY2024 Cost inflation VBP China Tariffs Fx Revenue leverage Operating savings FY 2025 Q4 2025 16
Slide 17: On track to deliver $325-375m 12PP/ZBB and other savings
On track to deliver $325 - 375m 12PP/ZBB* and other savings 2026 savings ($m) Cumulative run - rate savings Annual savings ($m) 12 - PP/ZBB ($m) 12-PP/ZBB R&D and QRA 12-PP/ZBB savings R&D & QRA Business Support 200 c.350 Other savings Business Support Sales & Marketing 170 Sales & Marketing Warehou
Slide 18: Trading profit growth in 2026 despite significant headwinds
Trading profit growth in 2026 despite significant headwinds c.+8% c.$1.3b $1.2b Trading profit 2025 Cost Inflation Investments Inventory Reval Tariffs AWM US ENT VBP Fx Revenue Operating TP* 2026E ex M&A M&A Trading profit 2026E in growth Reimbursement Leverage savings *TP – trading profit Q4 2025 1
Slide 19: Trading margin by business unit
Trading margin by business unit 24.9% 22.8% 24.0% 23.8% 23.2% 23.7% Opex savings and leverage across business units in 2025 14.9% 2025 trading margin expansion led by 11.3% 11.5% Orthopaedics Business unit margins reflect full allocation of attributable costs FY 2023 FY 2024 FY 2025 FY 2023 FY 2024
Slide 20: Inventory health improved and reduction in DSI by BU
Inventory health improved and reduction in DSI by BU Group (DSI)** Sports Medicine and ENT (DSI) 530 533 353 514 339 321 493* 305* 463 271 2022 2023 2024 2025 2022 2023 2024 2025 Advanced Wound Management (DSI) Orthopaedics (DSI)** 253 984 850 834 228 801* 224 221 755 2022 2023 2024 2025 2022 2023 2
Slide 21: ROIC by Business Unit
ROIC by Business Unit Group 7.3% 10.9% 9.9%* WACC 8.0% 8.3% 7.9% 7.4% 6.6% 5.9% ROIC improved by 90bps in 2025, from increased trading margin, lower non - trading costs; improving Orthopaedics ROIC 2019 2020 2021 2022 2023 2024 2025 Focus on driving improved returns – group ROIC expected to increase
Slide 22: FY cash flow and cash conversion
FY cash flow and cash conversion Improved trading and free cash flow on lower working capital costs and restructuring FY 2025 FY 202 4 $m $m Trading profit 1,211 1,049 1400 140% 43 40 1200 120% Share based payment 101% 102% Depreciation and amortisation 454 412 1000 95% 100% 88% Lease liability repa
Slide 23: Strong balance sheet
Strong balance sheet Leverage 1.9x 1 .7 x ratio: $m 51 2,759 2,709 500 330 9 427 (1,267) Net debt at Free cash flow Capex Dividends Acquisitions Share buyback Other Net debt at 31 December 2024 Pre Capex 31 December 2025 Net debt includes lease liabilities Q4 2025 23
Slide 24: 2026 guidance
2026 guidance c.6% c.8% c.$1.3b c.$800m >10% revenue trading profit trading profit FCF ROIC* growth * incl marginal growth* Integrity dilution Revenue growth given on an underlying basis and trading profit growth on a reported basis *Excluding M&A Q4 2025 24
Slide 25: Our Strategy
Our Strategy Q4 2025 25
Slide 26: RISE: Our strategy to elevate Smith+Nephew
Our new strategy RISE: Our strategy to elevate Smith+Nephew E Execute efficiently Drive enterprise productivity and asset efficiency to expand margins and returns S Scale through strategic investment Allocate capital to high return and high growth opportunities aligned to our portfolio priorities I
Slide 27: 2026 Sports Medicine Drivers
2026 Sports Medicine Drivers Joint repair China VBP headwind annualised and AET VBP expected to have significantly smaller impact Capitalise on strength of shoulder portfolio by successfully executing on Integrity Orthopaedics and driving adoption of Tendon Seam Launch TESSA ◊ , our FIRST in INDUSTR
Slide 28: Advancing our RISE Strategy with acquisition of Integrity Orthopaedics
Advancing our RISE Strategy with acquisition of Integrity Orthopaedics • Strategic acquisition of differentiated technology for an initial cash payment of $225m, plus additional performance - based payments up to $225m • Co - founded by same founder of Rotation Medical, which developed REGENETEN • T
Slide 29: A Simple & Powerful Shoulder Portfolio
A Simple & Powerful Shoulder Portfolio Tendon Seam REGENETEN Novel and disruptive Market leading biomechanical repair biological augmentation Q-FIX KNOTLESS/ OSTEOCONNECT◊ CORI+AETOS Market leading Elegant and personalised instability solutions implant and enabling tech Advanced Biomechanics + Prove
Slide 30: 2026 Advanced Wound Management Drivers
2026 Advanced Wound Management Drivers Navigate CMS reimbursement change to skin substitutes in the physician office and mobile setting, which will lead to short - term volatility but creates an attractive, more sustainable market longer - term Take share with ALLEVYN COMPLETE CARE, our newest 5 - l
Slide 31: 2026 Orthopaedics Drivers
2026 Orthopaedics Drivers Drive procedural growth across all joints with our CORI platform, supported by the launch of Shoulder execution Build out our knee portfolio with the launch of LANDMARK system in H2 Expand further into the ASC setting with continued CORI adoption and penetration of tray - e
Slide 32: Robust pipeline with increased launch cadence 2026-2028
Robust pipeline with increased launch cadence 2026 - 28 2026 2027 2028 LANDMARK Knee Cementless CR LANDMARK Knee Revision System LANDMARK Knee Cemented PS CR Catalystem Hip Orthopaedics Japan Revision Hip REDAPT IM Nail - Implants INTERTAN MAX Hip Fracture Antegrade & Retrograde Femur Bi - body AETO
Slide 33: Financials: Our 2028 ambition to accelerate growth and improve returns
Financials Our 2028 ambition to accelerate growth and improve returns 6 - 7% 9 – 10% > $1bn 12 - 13% Organic revenue Trading profit 2028 FCF ROIC in 2028 CAGR CAGR Q4 2025 33
Slide 34: Summary
Summary Revenue growth ahead of guidance, at 5.3% underlying revenue growth for FY 2025 • All 3 business units grew by >5% underlying • >60% of growth came from products launched in last 5 years • Growth included one fewer trading day vs 2024 and was 7% underlying ex China Strong progress on trading
Slide 35: » © O SmithNephew
» © O SmithNephew
Slide 36: Appendix
Appendix Q4 2025 36
Slide 37: Technical guidance for FY
Technical guidance for FY 202 6 March 2026 Foreign exchange and acquisitions Translational FX impact on revenue growth (1) c.1.8% Acquisition impact on revenue growth - Non - trading items Restructuring costs c.$ 70m Acquisition and integration $20 - 30 m European Medical Device Regulation (MDR) com
Slide 38: Revenue analysis by Business Unit
Revenue analysis by Business Unit 202 4 202 5 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Q4 Growth Growth Growth Growth Growth Growth Growth Growth Growth Revenue % % % % % % % % % $m Orthopaedics 4.4 5.8 2.3 6.0 4.6 3.2 5.0 4.1 7.9 667 Knee Implants 2.7 2.9 0.1 3.2 2.3 0.7 2.9 1.5 6.1 275 Hip Implants 3.5 4
Slide 39: Quarterly revenue analysis by region
Quarterly revenue analysis by region 2024 2025 Q1 Q2 Q4 FY Q1 Q2 Q3 Q4 Q4 Q3 Growth Growth Growth Growth Growth Growth Growth Growth Revenue Growth% % % % % % % % % $m US (0.6) 3.6 4.0 11.9 4.8 3.6 8.7 5.5 5.6 931 Other Established Markets (1) 4.8 6.9 6.8 8.2 6.7 5.0 7.4 3.9 7.2 510 Established Mark
Slide 40: Q4 consolidated revenue analysis by Business Unit
Q4 consolidated revenue analysis by Business Unit Q4 Q4 Reported Underlying Acquisitions/dis 202 5 202 4 growth growth posals Currency impact $m $m % % % % Orthopaedics 667 608 9.8 7.9 - 1.9 Knee Implants 275 255 8.1 6.1 - 2.0 Hip Implants 174 161 7.9 5.7 - 2.2 Other Reconstruction 43 30 43.2 40.8 -
Slide 41: 2025 consolidated revenue analysis by Business Unit
2025 consolidated revenue analysis by Business Unit Reported Underlying Acquisitions/dis 202 5 202 4 growth growth posals Currency impact $m $m % % % % Orthopaedics 2,437 2,305 5.7 5.1 - 0.6 Knee Implants 1,011 977 3.5 2.9 - 0.6 Hip Implants 641 619 3.5 2.9 - 0.6 Other Reconstruction 136 101 35.4 33
Slide 42: 2025 EPSA
2025 EPSA 202 5 202 4 Reported $m $m growth Trading profit 1,211 1,049 1 5.5 % Net interest payable (112 ) (121 ) Other finance costs (7) (22 ) Share of results from associates 5 2 Adjusted profit before tax 1097 908 20.8 % Taxation on trading result (212 ) (173 ) Adjusted attributable profit 885 73
Slide 43: Trading days per quarter
Trading days per quarter Q1 Q2 Q3 Q4 Full year 202 3 64 63 63 60 250 202 4 63 64 63 62 252 2025 62 63 63 63 251 202 6 61 63 63 64 251 43