Smith & Nephew plc · LSE:SN.
Smith & Nephew — Q1 2016 Earnings Presentation
20 slides from Smith & Nephew's earnings presentation, April 2016
Slide 1: 2016 First Quarter Trading Report
2016 First Quarter Trading Report
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: Julie Brown, Chief Financial Officer
Julie Brown Chief Financial Officer
Slide 4: Q1 revenue growth of 4% underlying
Q1 revenue growth of 4% underlying Geographical growth Revenue split Product franchise growth Sports Medicine 11% Joint Repair Arthroscopic Enabling Tech 8% US 4% Trauma & Extremities -7% Other Surgical 19% Knees 9% 4% Est OUS Hips 4% 0% AWC -4% Emerging AWB -6% 11% AWD -10% -5% 0% 5% 10% -10% 0% 10
Slide 5: Mike Frazzette, Chief Commercial Officer
Mike Frazzette Chief Commercial Officer
Slide 6: Sports Medicine, Trauma & OSB
Sports Medicine, Trauma & OSB • Q1 Revenue performance ‐ Sports Medicine Joint Repair +11% ($141m) ‐ Arthroscopic Enabling Technologies (AET) +4% ($156m) ‐ Trauma & Extremities -7% ($114m) ‐ Other Surgical Businesses* +19% ($57m) • Commentary FIRSTPASS◊ Suture Passer ‐ shoulder portfolio and product
Slide 7: Reconstruction
Reconstruction • Q1 Revenue performance ‐ Knees: global +9%*, US +10%*, OUS +8%* ($234m) ‐ Hips: global +4%, US +6%, OUS +2% ($153m) • Commentary ‐ continued good growth in global Knees ‐ sales synergies from ZUK◊ acquisition ‐ robust growth in Emerging Markets REDAPT◊ Revision Acetabular Fully Poro
Slide 8: Advanced Wound Management
Advanced Wound Management • Q1 Revenue performance ‐ Advanced Wound Care +0% ($171m) ‐ Advanced Wound Bioactives -4% ($72m) ‐ Advanced Wound Devices +11% ($39m) • Commentary ‐ sustained improvement in US AWC trend, offset by ALLEVYN◊ Life China Foam Dressings ‐ weak first quarter in AWB as expected
Slide 9: Julie Brown, Chief Financial Officer
Julie Brown Chief Financial Officer
Slide 10: Summary and guidance
Summary and guidance • Q1 continues positive trends of 2015 ‐ sustained good performance in franchises and regions ‐ smooth integration of acquisitions ‐ market challenges in China and Gulf region • Outlook ‐ translational foreign exchange impact slightly improved to 0% to -1% ‐ full year guidance u
Slide 11: Questions
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Slide 12: Appendices
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Slide 13: 2016 Technical guidance (unchanged)
2016 Technical guidance (unchanged) Guidance Full year Restructuring costs c. $50m Acquisition and integration costs c. $10m Amortisation of acquisition intangibles c. $140m Income from associates Slightly negative Interest payable(1) ~ 3% Other finance costs c. $10m Tax rate on Trading result 26.5%
Slide 14: Revenue growth reconciliation
Revenue growth reconciliation Q1 2016(1) FX guidance(3) Growth % Translational effect on revenue growth: Full year impact of 0% to -1% Underlying 4% Q2 impact of 0% to -1% Acquisitions 2% CER(2) 6% Currency -3% Reported 3% (1) Q1 2016 comprises 64 trading days (2015 – 61 trading days) (2) Constant e
Slide 15: Franchise revenue analysis
Franchise revenue analysis 2015 2016 Full Q1 Q2 Q3 Q4 Q1 Year Growth Growth Growth Growth Growth Revenue Growth % % % % % $m % Sports Medicine, Trauma & 5 4 2 5 4 468 5 OSB Sports Medicine Joint Repair 9 7 4 9 7 141 11 Arthroscopic Enabling (2) 1 (2) 3 - 156 4 Technologies Trauma & Extremities 5 2 2
Slide 16: Reclassification of Patient Positioning products
Reclassification of Patient Positioning products Certain patient positioning products formerly included in the Sports Medicine Joint Repair franchise have been reclassified to the Arthroscopic Enabling Technologies franchise. This is in line with changes to global marketing and product development,
Slide 17: Regional revenue analysis
Regional revenue analysis 2015 2016 Full Q1 Q2 Q3 Q4 Q1 Year Growth Growth Growth Growth Growth Revenue Growth % % % % % $m % Geographic regions US 1 4 4 9 5 563 8 Other Established Markets (2) 3 1 2 1 421 4 Established Markets - 3 3 6 3 984 6 Emerging Markets 22 14 8 2 11 153 (6) Group 3 5 4 5 4 1,
Slide 18: Business days per quarter
Business days per quarter Q1 Q2 Q3 Q4 Full Year 2015 61 63 63 64 251 2016 64 64 63 60 251 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. 18
Slide 19: Exchange rates
Exchange rates Q1/15 FY/15 Q1/16 $:€ Period end 1.09 1.09 1.14 Average 1.13 1.11 1.10 $:£ Period end 1.49 1.48 1.42 Average 1.51 1.53 1.43 19
Slide 20: Smith & Nephew
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