Smith & Nephew plc · LSE:SN.
Smith & Nephew — Q3 2015 Earnings Presentation
22 slides from Smith & Nephew's earnings presentation, November 2015
Slide 1: 2015 Third Quarter Trading Report and acquisition of Blue Belt Holdings, Inc
2015 Third Quarter Trading Report and acquisition of Blue Belt Holdings, Inc
Slide 2: Forward looking statements
Forward looking statements 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 as "aim", "plan", "in
Slide 3: Third Quarter Trading Report
Third Quarter Trading Report
Slide 4: Q3 revenue growth of 4% underlying
Q3 revenue growth of 4% underlying Regional growth Revenue split Product franchise growth Sports Medicine Joint Repair 4% Arthroscopic Enabling Tech -2% 4% US Trauma & 2% Extremities Other Surgical 10% Knees 6% 1% Est OUS Hips -2% AWC 6% 2% Emerging AWB 8% 17% AWD 0% 4% 8% 12% -5% 5% 15% Underlying
Slide 5: Sports Medicine, Trauma & Other Surgical
Sports Medicine, Trauma & Other Surgical • Revenue performance ‐ Sports Medicine Joint Repair +4% ($143m) ‐ Arthroscopic Enabling Technologies (AET) -2% ($132m) ‐ Trauma & Extremities +2% ($122m) ‐ Other Surgical Businesses* +10% ($50m) RAPID RHINO◊ NASASTENT◊ • Commentary Dissolvable Nasal Dressing
Slide 6: Reconstruction
Reconstruction • Revenue performance ‐ Knees: global +6%, US +5%, OUS +8% ($205m) ‐ Hips: global -2%, US -1%, OUS -2% ($137m) ZUK◊ • Commentary Unicompartmental High Flex Knee ‐ Global Reconstruction grew at +3% ‐ JOURNEY◊ II delivered strong growth and ZUK◊ Uni Knee is ahead of plan ‐ flat hip grow
Slide 7: Advanced Wound Management
Advanced Wound Management • Revenue performance ‐ Advanced Wound Care +6% ($188m) ‐ Advanced Wound Bioactives +2% ($84m) ‐ Advanced Wound Devices +17% ($44m) • Commentary ALLEVYN◊ Life ‐ good AWC trends continue with strong US contribution Foam Dressings ‐ continued impact of OASIS◊ reimbursement ch
Slide 8: Acquisition of Blue Belt Holdings, Inc
Acquisition of Blue Belt Holdings, Inc 8
Slide 9: Blue Belt Technologies and Navio system
Blue Belt Technologies and Navio system • Blue Belt Technologies is a leader in the fast-growing area of robotic-assisted surgical technologies • Navio® surgical system provides robotics-assistance and CT-free intra-operative visualisation, offering – clinical benefits include high degree of implant
Slide 10: Complementary Products and Pipeline
Complementary Products and Pipeline Blue Belt Technologies What Smith & Nephew brings Most successful partner Current Navio System JOURNEY Uni, ZUK offering STRIDE™ Uni Knee Global reach Total knee arthroplasty Established compatible products R&D Revision knee Clinical and marketing strength program
Slide 11: Acquistion Financials
Acquistion Financials • $275m* acquisition financed from existing debt facilities • Strong revenue growth from current products – 2015 revenue c. $19 million – expect growth in excess of 50% in the medium-term – significant upside as new products launched • Financial impact – R&D investment will dil
Slide 12: Guidance and Summary
Guidance and Summary >t smith&nephew 12
Slide 13: Guidance and foreign exchange
Guidance and foreign exchange • Guidance – 2015 guidance maintained • Foreign exchange – Sustained strength of US dollar – Translational impact: full year revenue headwind expected of 8% – Transactional impact: 2015: Hedging strategy largely mitigates impact on margin 2016: Gross margin headwind of
Slide 14: Summary
Summary • Q3 2015 performance ‐ 4% underlying revenue growth ‐ full year guidance maintained • Blue Belt Technologies ‐ positions Smith & Nephew as a leader in the fast-growing area of robotic-assisted surgical technologies. ‐ reinforces our distinctive Recon strategy 14
Slide 15: Questions
Questions a 5 e 74 smith&nephew Supporting healthcare professionals for over 150 years 15
Slide 16: Appendices
>¢ smith&nephew Appendices
Slide 17: Revenue growth reconciliation
Revenue growth reconciliation Q3 2015(1) YTD 2015(1) Growth % Growth % Underlying 4% Underlying 4% Acquisitions 1% Acquisitions 4% CER(2) 5% CER(2) 8% Currency -9% Currency -8% Reported -4% Reported 0% (1) Q3 2015 comprises 63 trading days (2014 – 63 trading days) YTD comprises 187 days (2014 – 188
Slide 18: Franchise revenue analysis
Franchise revenue analysis 2014 2015 Full Q1 Q2 Q3 Q4 Q1 Q2 Q3 Year Growth Growth Growth Growth Growth Growth Growth Revenue Growth % % % % % % % $m % Sports Medicine, Trauma & OSB 2 6 7 5 5 5 4 447 2 Sports Medicine Joint Repair 5 9 11 8 8 9 7 143 4 Arthroscopic Enabling Technologies (2) (1) 3 2 1
Slide 19: Regional revenue analysis
Regional revenue analysis 2014 2015 Full Q1 Q2 Q3 Q4 Q1 Q2 Q3 Year Growth Growth Growth Growth Growth Growth Growth Revenue Growth % % % % % % % $m % Geographic regions US (2) 4 2 - 1 1 4 532 4 Other Established Markets 1 (3) (2) (1) (1) (2) 3 400 1 Established Markets (1) 1 - - - - 3 932 3 Emerging
Slide 20: Business days per quarter
Business days per quarter Q1 Q2 Q3 Q4 Full Year 2014 62 63 63 63 251 2015 61 63 63 64 251 2016 64 64 63 60 251 20
Slide 21: Exchange rates
Exchange rates Q3/14 FY/14 Q1/15 Q2/15 Q3/15 $:€ Period end 1.27 1.21 1.09 1.12 1.12 Average 1.33 1.33 1.13 1.11 1.11 $:£ Period end 1.62 1.56 1.49 1.57 1.52 Average 1.67 1.65 1.51 1.53 1.55 21
Slide 22: Smith & Nephew
>¢ smith&nephew a! ° 74 smith&nephew Supporting healthcare professionals for over 150 years 22