Smith & Nephew plc · LSE:SN.
Smith & Nephew — Smith+Nephew — Investor Presentation (December 2019)
21 slides from Smith & Nephew's investor presentation, December 2019
Slide 1: Investor Presentation October – December 2019
Investor Presentation October – December 2019
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: Smith & Nephew at a glance
100 FTSE100 A constituent of the UK’s FTSE100, with ADRs Shares S&N has a progressive dividend policy, and has Smith & Nephew is a traded on the New York paid a dividend every global Medical Device Stock Exchange year since 1937 portfolio company, that has been trading for over 160 years, and operat
Slide 4: A portfolio medical device company
A portfolio medical device company ALLEVYN◊ LIFE PICO◊ Advanced Foam Advanced Advanced Negative Pressure Wound Dressings Wound Care Wound Devices Wound Therapy JOURNEY◊ II BCS Collagenase Advanced Bi-Cruciate SANTYL◊ Ointment Wound Stabilised Enzymatic debrider Bioactives Knee System Knees ENT $4.9b
Slide 5: Leading positions in stable growing markets
Leading positions in stable growing markets Hip & Knee Implants Sports Medicine Advanced Wound Management $14.5bn market $5.0bn market $9.0bn market (growth +2%) (growth +5%) (growth +5%) Others Others Acelity 14% 16% 16% Zimmer Smith & Biomet DePuy Arthrex Others Nephew 33% Smith & Synthes 31% 53%
Slide 6: Our performance
Our performance Revenue Trading Profit Trading cash conversion $4,904m +2%* $1,123m 22.9% margin 85% 1123 85% 90% 4904 85% 1099 74% 75% 4765 1055 1048 4669 4617 4634 1020 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Adjusted earnings per share (EPSA) Dividend per share
Slide 7: Q3 2019 revenue: $1,246m, 4.0% underlying, 6.5% reported
Q3 2019 revenue: $1,246m, 4.0% underlying, 6.5% reported Revenue split Product franchise growth Emerging Markets $240m Orthopaedics 3.4% US $624m Knees 4.6% Other Hips 2.6% Established Markets Other Recon 1.5% $382m Trauma 2.2% Geographical growth Sports Medicine, ENT 6.9% Sports Medicine Joint Repa
Slide 8: YTD revenue: $3,731m, 3.9% underlying, 3.4% reported
YTD revenue: $3,731m, 3.9% underlying, 3.4% reported Revenue split Product franchise growth Emerging Markets $705m Orthopaedics 3.6% US $1,827m Knees 4.3% Other Hips 2.7% Established Markets Other Recon 3.6% $1,199m Trauma 3.3% Geographical growth Sports Medicine, ENT 5.9% Sports Medicine Joint Repa
Slide 9: 2019 Guidance
2019 Guidance Sales growth: Trading profit margin: Tax rate: 2019 Underlying: 3.5% to 4.5% Around 22.8% 19% to 21%(2) Reported: 3.9% to 4.9%(1) Medium Sales growth: Trading profit margin: Tax rate: Consistent growth Ongoing improvement 19% to 21%(2) term above market (1) Based on the foreign exchang
Slide 10: Strategic imperatives for the company
Strategic imperatives for the company Grow Together Effectively 1 2 3 4 5 Achieve the Transform Expand in Strengthen Become the full potential the business high-growth talent and best owner of our portfolio through segments capabilities enabling technologies 10
Slide 11: Moving from robotic-assisted surgery to a digital ecosystem
Moving from robotic-assisted surgery to a digital ecosystem NAVIO™ Surgical System Launch of NAVIO 7.0 in Launch of next-generation Ecosystem incorporating H2 2019 platform, with Brainlab hip stand-alone robotic arms, and knee software augmented reality Brainlab hip software on NAVIO Intro
Slide 12: Executing on M&A strategy
Executing on M&A strategy Acquisition of Orthopaedic Joint Reconstruction Business 12
Slide 13: Life Unlimited: Care, Collaboration, Courage
The pillars of a new purpose-driven culture Life Unlimited Care Collaboration Courage A culture of empathy and A culture of team, A culture of continuous learning, understanding for each other, based on mutual trust and respect innovation and accountability our customers and patients 13
Slide 14: APEX summary
APEX summary • Benefits of $160m p.a. by 2022 • Total one-off costs (mainly cash) up to $240m (c.150% of annualised run-rate benefits) • Period: 2018 – 2022, with around 75% of benefits and >75% of costs by 2020 • Benefits underpin medium-term margin guidance 14
Slide 15: Appendices
Appendices 15
Slide 16: H1 2019 Highlights
H1 2019 Highlights First half 2019 2018 $m $m Revenue 2,485 2,440 Underlying growth 3.9% Trading profit 532 507 Trading profit margin 21.4% 20.8% IFRS Operating profit 419 372 IFRS Operating profit margin 16.8% 15.3% EPSA 45.8¢ 43.7¢ EPS 35.3¢ 31.4¢ 16
Slide 17: Technical guidance
Technical guidance October 2019 Foreign exchange and other revenue impact Impact of translational FX on revenue(1) (2.3%) Acquisition impact on revenue +2.7% Non-trading items Restructuring costs c. $110-120m Acquisition and integration costs c. $30-40m European Medical Device Regulation (MDR) compl
Slide 18: Franchise revenue analysis
Franchise revenue analysis 2018 2019 Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q3 Growth Growth Growth Growth Growth Growth Growth Revenue Growth % % % % % % % $m % Orthopaedics 0 1 5 4 3 3.9 3.6 524 3.4 Knee Implants 2 3 4 3 3 4.1 4.3 240 4.6 Hip Implants (2) 1 4 4 2 2.4 2.9 145 2.6 Other Reconstruction 30 27
Slide 19: Regional revenue analysis
Regional revenue analysis 2018 2019 Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q3 Growth Growth Growth Growth Growth Growth Growth Revenue Growth % % % % % % % $m % US (2) 1 4 3 1 4.0 2.3 624 2.7 Other Established Markets(1) (2) 1 (1) 0 0 (0.1) (1.3) 382 (0.3) Total Established Markets (2) 1 2 2 1 2.2 0.9 1,006
Slide 20: Trading days per quarter
Trading days per quarter Q1 Q2 Q3 Q4 Full year 2017 64 63 63 60 250 2018 63 64 63 61 251 2019 63 63 63 62 251 2020 62 63 63 64 252 20
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