Smith & Nephew plc · LSE:SN.
Smith & Nephew — Smith+Nephew — Investor Presentation (June 2021)
27 slides from Smith & Nephew's investor presentation, June 2021
Slide 1: Investor Presentation April-June 2021
Investor Presentation April-June 2021
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: Our history
Our history 1914 1856 1896 Days after the outbreak of WW1, Thomas James Smith Horatio Nelson Smith we received an order to provide opened a chemist shop in Hull, entered into apartnership surgical and field dressing 1856 UK and develops a new method with his uncleforming supplies to French From 50 S
Slide 4: FTSE 100 Shares $4.6bn
100 FTSE 100 A constituent of the UK’s FTSE 100, 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 portfolio medical Stock Exchange year since 1937 technology business that has been trading for over 160 years, and operates
Slide 5: A portfolio medical technology business
A portfolio medical technology business 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
Slide 6: Leading positions in attractive markets
Leading positions in attractive markets Hip & Knee Implants Sports Medicine Advanced Wound Management $12.6bn market $4.6bn market $9.1bn market +2% 2017-19 average growth +5% 2017-19 average growth +5% 2017-19 average growth -15% 2020 growth -12% 2020 growth -3% 2020 growth Others Others 3M 15% 17%
Slide 7: Our performance
Our performance Revenue Trading profit Trading cash conversion $4,560m -12.1%* $683m 15.0% margin 101% 5138 1123 1169 101% 1020 1048 90% 85% 4904 83% 75% 4765 4669 683 4560 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Adjusted earnings per share (EPSA) Dividend per shar
Slide 8: First Quarter 2021
First Quarter 2021 8
Slide 9: Q1 revenue by region: $1,264m, 6.2% underlying, 11.5% reported
Q1 revenue by region: $1,264m, 6.2% underlying, 11.5% reported Quarterly underlying sales development by region US Other established markets Emerging markets $640m $407m $217m 21.8% 7.1% 0.9% -4.7% -4.9% -1.8% -6.3% -6.2% -6.2% -14.5% -14.9% -17.9% -20.2% -31.8% -30.8% 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20
Slide 10: Q1 revenue: $1,264m, 6.2% underlying, 11.5% reported
Q1 revenue: $1,264m, 6.2% underlying, 11.5% reported Revenue split Product franchise growth Emerging Markets $217m Orthopaedics 1.6% Knees -10.3% US $640m Hips 9.1% Other Other Recon 17.7% Established Markets Trauma & Extremities 12.0% $407m Sports Medicine & ENT 10.4% Geographical growth Sports Med
Slide 11: 2021 outlook
2021 outlook • Targeting underlying revenue growth of 10-13% − Hips to continue to outperform Knees − Sports Medicine & ENT to rebound strongly − AWM momentum to continue • Trading margin range of 18-19% − COVID impact on gross margin; partial offset from efficiency programmes − Dilution relative to
Slide 12: Priorities for 2021
Priorities for 2021 12
Slide 13: Priorities for 2021 – Strategy and COVID
Priorities for 2021 – Strategy and COVID Return to top-line growth and recapture momentum Drive further operational improvement Continue to respond effectively to COVID 13
Slide 14: Priority for 2021: Return to top-line growth and recapture momentum
Priority for 2021: Return to top-line growth and recapture momentum Foundations from 2018/9 Driving sustainable revenue growth 1 Maximising portfolio potential • Driving higher return from portfolio and growing recent launches Clear strategy for growth • Continuing to drive commercial excellence acr
Slide 15: Growth strategy in action – Wound franchise example
Growth strategy in action – Wound franchise example 1 Maximising portfolio potential 2 Delivering value of the acquired assets Strategy Bioactives underlying growth by quarter (normalised)* • Increased focus on key account management 20% • “Win big” with IDNs and national tenders 10% Process 0% Q1 Q
Slide 16: Progress on key R&D projects
Progress on key R&D projects 3 Launching expanded pipeline of innovation Recently launched Key 2021 projects* growth drivers OR3O◊ Dual mobility Porous Knee system Porous offering for Knee portfolio Hip & Knee implants SYNC Modular Trays ✔ New Hip & Knee instruments Streamlined instrument set for TH
Slide 17: Demonstrated launch excellence
Demonstrated launch excellence Growth inflections from new products in recent years US Hips growth vs peers Sports Medicine Joint Repair quarterly growth 14.0% 9.8% 11.5% REGENETEN 3.9% 4.4% acquired end 2017 -5.4% 8% -28.9% 6% OR3O launch OR3O Dual Mobility REGENETEN Q4 2019 Bioinductive Implant Q4
Slide 18: Drive further operational improvement
Drive further operational improvement Operations transformation and process efficiencies • Continuing manufacturing network optimisation Operations transformation • Outsourcing of warehousing and distribution • Process transformation, with Lean deployment and greater automation • Simplify end-to-end
Slide 19: Continue to respond effectively to COVID
Continue to respond effectively to COVID Customers Employees Cost control • Support customers in • Flexible and updated • Control discretionary person and remotely working environments costs while COVID outbreak continues • Transform medical • COVID secure sites with education, with new online deplo
Slide 20: Appendices
Appendices 20
Slide 21: Technical guidance for 2021
Technical guidance for 2021 April 2021 Foreign exchange and acquisitions Translational FX impact on revenue growth(1) 2.9% Acquisition impact on revenue growth 1.9% Non-trading items Restructuring costs $140-150m Acquisition and integration costs $35-45m European Medical Device Regulation (MDR) comp
Slide 22: Franchise revenue analysis
Franchise revenue analysis 2020 2021 Q1 Q2 Q3 Q4 Full Year Q1 Q1 Growth Growth Growth Growth Growth Growth Revenue % % % % % % $m Orthopaedics (8.3) (34.0) (2.8) (10.2) (14.0) 1.6 540 Knee Implants (10.6) (46.9) (9.5) (16.2) (21.0) (10.3) 212 Hip Implants (8.6) (26.9) 7.1 (0.5) (7.4) 9.1 154 Other R
Slide 23: Regional revenue analysis
Regional revenue analysis 2020 2021 Q1 Q2 Q3 Q4 Full Year Q1 Q1 Growth Growth Growth Growth Growth Growth Revenue % % % % % % $m US (4.7) (31.8) 0.9 (4.9) (10.1) 7.1 640 Other Established Markets(1) (6.3) (30.8) (6.2) (6.2) (12.3) (1.8) 407 Established Markets (5.4) (31.4) (1.8) (5.4) (11.0) 3.4 1,0
Slide 24: Q1 consolidated revenue analysis
Q1 consolidated revenue analysis Q1 Q1 Reported Underlying Acquisitions/ Currency 2021 2020 growth Growth disposals impact Consolidated revenue by franchise $m $m % % % % Orthopaedics 540 497 8.7 1.6 4.3 2.8 Knee Implants 212 230 (7.9) (10.3) - 2.4 Hip Implants 154 137 12.6 9.1 - 3.5 Other Reconstru
Slide 25: Trading days per quarter
Trading days per quarter Q1 Q2 Q3 Q4 Full year 2019 63 63 63 62 251 2020 62 63 63 64 252 2021 64 64 63 60 251 2022 63 64 63 60 250 25
Slide 26: Our sustainability strategy and 2020 highlights
Our sustainability strategy and 2020 highlights People Planet Products Creating a lasting positive impact on our A medical technology business with a Innovating sustainably communities positive impact 8,000 hours of employee volunteering in the All sites in Memphis (US) began sourcing Started to dev
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