Smith & Nephew Plc · LSE:SN.
Smith & Nephew — Q2 2026 Earnings Presentation
35 slides from Smith & Nephew's earnings presentation, Aug 4, 2026
Slide 1: Second Quarter and Half Year 2026
Second Quarter and Half Year 2026 4 August 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 Underlying revenue growth of +1.6% in Q2, lower than expected • Strength in Sports Medicine offset by softness in US Orthopaedics and Advanced Wound Bioactives • Continued strong double - digit growth or higher from CATALYSTEM ◊ , AETOS ◊ , Q- FIX ◊ , REGENETEN ◊ , CARTIHEAL ◊ AGILI - C ◊ ,
Slide 4: Q2 2026 revenue
Q2 2026 revenue Q2 2026 4
Slide 5: Q2 2026 summary revenue performance
Q2 2026 summary revenue performance Total revenue of $1,597m • Underlying revenue growth of +1.6%; reported 2.8% • Same number of trading days vs Q2 2025 • 120bps tailwind from FX on reported growth Growth by Business Unit* Growth by Region* Group 1.6% Group 1.6% $1,597m $1,597m Sports Med & ENT 8.6
Slide 6: Sports Medicine & ENT
Sports Medicine & ENT Strong growth in Joint Repair and AET; ENT impacted by China VBP as expected Revenue of $527m: Q2 sales factors +8.6% underlying*; +10.0% reported • Sports Medicine Joint Repair +10.6%: ◊ • Continued strong growth from REGENETEN and Q - FIX KNOTLESS SMJR AET ENT • All regions c
Slide 7: Advanced Wound Management
Advanced Wound Management Solid growth across AWC and AWD; AWB impacted by US reimbursement change [and tough prior year comp] Revenue of $456m: Q2 sales factors - 2.1% underlying*; - 0.7% reported • Advanced Wound Care +3.7%: ◊ • Good growth led by US ALLEVYN and Emerging Markets AWC AWB AWD • ALLE
Slide 8: Orthopaedics
Orthopaedics Soft quarter in Knees and US hips with solid growth in Trauma & Extremities Revenue of $614m: Q2 sales factors - 1.0% underlying*; - 0.2% reported • Global Knees and Hips - 4.3% and +0.5%: • US Hips - 1.5%; reflecting a delay in CATALYSTEM set deployments, Knees Hips Other Recon** Traum
Slide 9: H1 2026 financials
H1 2026 financials Q2 2026 9
Slide 10: H1 revenue growth by Business Unit
H1 revenue growth by Business Unit $m 67 3,097 72 2,961 (1) (1) H1 2025 Orthopaedics Sports Medicine AWM Translational H1 2026 & ENT FX impact Revenue ($m) 1,213 1,017 867 3,097 Reported growth 1.7% 10.2% 2.6% 2.3% 4.6% Underlying growth - 0.1% 7.7% - 0.1% 2.3% 10
Slide 11: H1 trading income statement
H1 trading income statement H1 202 6 H1 202 5 Reported $m $m growth Revenue 3,097 2,961 4.6 % Cost of goods sold (894 ) (874 ) Gross profit 2,203 2,087 5.5 % Gross profit margin 71.1 % 70 .5% Selling, general and admin (1,487 ) (1,421 ) 4.7% Research and development (150 ) (143 ) 5.0 % Trading profi
Slide 12: H1 operating profit and EPSA
H1 operating profit and EPSA H1 2 02 6 H1 2 02 5 Reported $m $m growth IFRS operating profit 448 429 4.3% IFRS operating profit margin 14.5% 14.5% Adjusted earnings per share (“EPSA”) 47.7 ¢ 42.9 ¢ 11.0% Earnings per share (“EPS”) 35.6 ¢ 33.5 ¢ 6.2% Dividend per share 15.6 ¢ 15.0 ¢ 4 .0 % Q2 2026 12
Slide 13: Trading profit growth in H1 despite headwinds
Trading profit growth in H1 despite headwinds 128 570 566 $m (4) 523 (56) 59 (33) 6 5 (38) (18) (7) Cost inflation Inventory Reval ENT VBP Tariffs Efficiency savings M&A H125 Investments in growth AWM Reimbursement FX Operating leverage H126 excl M&A H126 Q2 2026 13
Slide 14: Delivering savings well ahead of expectations
Delivering savings well ahead of expectations 2026 savings ($m) Cumulative run - rate savings Annual savings ($m) 12 - PP/ZBB ($m) 12-PP/ZBB savings Manufacturing & Procurement R&D and QRA Warehouse & Distribution Business Support Other savings Sales & Marketing 200 c.200 Sales & Marketing c.350 Bus
Slide 15: FY26 trading profit growth unchanged
FY26 trading profit growth unchanged c.+8% c.$1.3b $1.2b Trading profit 2025 Cost Inflation Investments Inventory Reval AWM US ENT VBP Tariffs FX Operating leverage Efficiency savings TP* 2026E ex M&A M&A Trading profit 2026E in growth Reimbursement *TP – trading profit Q2 2026 15
Slide 16: H1 trading margin by business unit
H1 trading margin by business unit 24.4% 23.1% 24.7% H1 2026 trading margin expansion in both 22.1% 22.0% Sports Medicine & ENT and Orthopaedics 20.5% Advanced Wound Management trading 12.7% 13.0% margin impacted by reimbursement 10.4% headwind Business unit margins reflect full allocation of attrib
Slide 17: Inventory health improved and reduction in DSI by BU
Inventory health improved and reduction in DSI by BU Group (DSI) Sports Medicine & ENT (DSI) 549 543 421 402 505 465* 305 272* 433 264 H1 2023 H1 2024 H1 2025 H1 2026 H1 2023 H1 2024 H1 2025 H1 2026 Advanced Wound Management (DSI) Orthopaedics (DSI) 276 849 816 819 251 757* 237 237* 234 687 H1 2023
Slide 18: H1 cash flow and cash conversion
H1 cash flow and cash conversion Trading and free cash flow primarily impacted by increase in capex and other working capital H1 2026 H1 202 5 $m delta $m $m Trading profit 566 523 43 600 110% 93% Share based payment 34 21 13 500 88% 90% 77% Depreciation and amortisation 220 212 8 400 70% Lease liab
Slide 19: Net debt bridge FY 2025 to H1 2026
Net debt bridge FY 2025 to H1 2026 Strong Balance Sheet Leverage ratio: 1.7x 1.8 x $m 116 3,019 205 (51) 2,759 221 190 (421) Net debt at 31 Dec 2025 Free cash flow Capex Acquisitions Dividends Share buyback Other Net debt at 27 Jun 26 Pre Capex Net debt includes lease liabilities Q2 2026 Leverage ra
Slide 20: More robust and resilient business, despite slower revenue growth
More robust and resilient business, despite slower than expected revenue growth Trading profit margin Cumulative 12 - PP/ZBB run - rate cost savings ($m) 18.3% c.350 17.7% 280 16.7% 155 15.3% 40 H1 2023 H1 2024 H1 2025 H1 2026 2023 2024 2025 2026e Day sales inventory (DSI) Free cash flow ($m) 549 54
Slide 21: Updated 2026 guidance
Updated 2026 guidance c.4% c.8% c.$1.3b c.$800m >10% revenue trading profit trading profit FCF ROIC* growth* incl marginal growth* Integrity dilution Revenue growth given on an underlying basis and trading profit growth on a reported basis *Excluding M&A Q2 2026 21
Slide 22: Drivers of H2 revenue step-up
Drivers of H2 revenue step - up 5.0 - 5.5% • Sports Medicine & ENT: • Continued momentum across segments, including strong growth in REGENETEN and FASTSEAL • Advanced Wound Management : • Stabilisation of US skin substitutes • Return to growth in SANTYL • Expansion of product launches such as ALLEVY
Slide 23: RISE Strategy
RISE Strategy Q2 2026 23
Slide 24: RISE Strategy: H126
RISE Strategy: H126 • Continued progress on cost control and productivity gains, E including through Ortho360 Execute • Suzhou manufacturing site awarded the Shingo Prize, one of efficiently the world’s most respected recognitions for organisational excellence S Scale through • Acquisition of Integr
Slide 25: Incremental and transformative innovation pipeline with strong cadence
Incremental and transformative innovation pipeline with strong cadence Sports Medicine AWM CORI◊ Orthopaedics and JOURNEY ◊ TULA ◊ REGENETEN ALLEVYN COMPLETE II CORI XT KNEE/SHOULDER/HIP Drive increased market CARE First CORI XT Cases on shoulders penetration US launch progressing and knees in H1 ;
Slide 26: Key messages
Key messages Underlying revenue growth in Q2 slower than expected, with strength in Sports Medicine offset by softness in US Orthopaedics and Advanced Wound Bioactives Revenue growth outlook reduced to around 4.0% for FY 2026; on track to meet full year guidance on all other metrics We are confident
Slide 27: © O SmithNephew
» © O SmithNephew
Slide 28: Appendix
Appendix Q2 2026 28
Slide 29: Technical guidance for FY
Technical guidance for FY 202 6 August 2026 Foreign exchange and acquisitions Translational FX impact on revenue growth (1) c.1.2% Acquisition impact on revenue growth - Non - trading items Restructuring costs c.$ 70m Acquisition and integration $40 - 50 m Other Adjusted Reported Amortisation of acq
Slide 30: Revenue analysis by Business Unit
Revenue analysis by Business Unit 202 5 202 6 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q2 Growth Growth Growth Growth Growth Growth Growth Revenue % % % % % % % $m Orthopaedics 3.2 5.0 4.1 7.9 5.1 0.8 (1.0 ) 614 Knee Implants 0.7 2.9 1.5 6.1 2.9 (2.8) (4.3) 247 Hip Implants (1.2) 3.4 3.7 5.7 2.9 4.1 0.5 165 Othe
Slide 31: Quarterly revenue analysis by region
Quarterly revenue analysis by region 2025 202 6 Q1 Q2 Q3 Q4 FY Q1 Q2 Q2 Growth Growth Growth Growth Growth Growth Growth Revenue % % % % % % % $m US 3.6 8.7 5.5 5.6 5.9 2.1 (1.3) 816 Other Established Markets (1) 5.0 7.4 3.9 7.2 5.9 1.0 1.7 489 Established Markets 4 .1 8.2 4.9 6.2 5.9 1.7 (0.2) 1,30
Slide 32: Q2 consolidated revenue analysis by Business Unit
Q2 consolidated revenue analysis by Business Unit Q2 Q2 Reported Underlying Acquisitions/dis 202 6 202 5 growth growth posals Currency impact $m $m % % % % Orthopaedics 614 615 (0.2) (1.0 ) - 0.8 Knee Implants 247 257 (3.8) (4.3) - 0.5 Hip Implants 165 162 1.4 0.5 - 0.9 Other Reconstruction 36 35 2.
Slide 33: H1 consolidated revenue analysis by Business Unit
H1 consolidated revenue analysis by Business Unit H1 H1 Reported Underlying Acquisitions/dis 202 6 202 5 growth growth posals Currency impact $m $m % % % % Orthopaedics 1,213 1,193 1.7 (0.1) - 1.8 Knee Implants 492 501 (1.8) (3.6) - 1.8 Hip Implants 326 313 4.3 2.3 - 2.0 Other Reconstruction 68 64 5
Slide 34: H1 EPSA
H1 EPSA H1 2 02 6 H1 2 02 5 Reported $m $m growth Trading profit 566 523 8.1% Net interest payable (55 ) (54 ) Other finance costs (9) (1) Share of results from associates 5 1 Adjusted profit before tax 507 469 8 .2% Taxation on trading result (103 ) (93 ) Adjusted attributable profit 404 376 7 .7%
Slide 35: Trading days per quarter
Trading days per quarter Q1 Q2 Q3 Q4 Full year 202 4 63 64 63 62 252 2025 62 63 63 63 251 202 6 61 63 63 64 251 202 7 64 64 63 60 25 1 35