Smith+Nephew Fourth Quarter and Full Year 2019 Results
Delivering on commitments and investing for the future
20 February 2020
Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology business, announces results for the Fourth Quarter and Year to 31 December 2019:
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Reported |
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Trading2 |
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31 Dec |
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31 Dec |
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Reported |
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31 Dec |
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31 Dec |
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Underlying |
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2019 |
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2018 |
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growth |
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2019 |
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2018 |
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growth |
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$m |
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$m |
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% |
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$m |
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$m |
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% |
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Fourth Quarter Results1 |
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Revenue |
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1,407 |
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1,294 |
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8.7 |
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1,407 |
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1,294 |
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5.6 |
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Full Year Results1 |
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Revenue |
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5,138 |
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4,904 |
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4.8 |
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5,138 |
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4,904 |
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4.4 |
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Operating/trading profit |
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815 |
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863 |
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1,169 |
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1,123 |
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Operating/trading profit margin (%) |
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15.9 |
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17.6 |
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22.8 |
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22.9 |
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Cash generated from operations/trading cash flow |
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1,370 |
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1,108 |
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970 |
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951 |
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EPS/ EPSA (cents) |
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68.6 |
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76.0 |
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102.2 |
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100.9 |
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2019 Full Year Financial Highlights
- Underlying revenue growth up 4.4%, a substantial improvement year-on-year (2018: 2%); 4.8% reported growth includes -220bps FX headwind and 260bps acquisition benefit
- All global franchises and regions positively contributed to growth, led by Sports Medicine & ENT (7.0%), and Emerging Markets (16.1%)
- Trading profit margin of 22.8% includes impact of dilution from acquisitions; operating profit margin of 15.9% reflects restructuring and acquisition cost
- Cash generated from operations $1,370 million (2018: $1,108 million)
- Full year dividend up 4% to 37.5¢ per share
Strategic Highlights
- New operating model and strategic imperatives behind improved performance
- Five acquisitions in higher-growth segments completed in 2019
- Tusker Medical acquired in January 2020, securing complementary and innovative ENT technology
- 2020 priorities include continued progress in delivering an excellent customer experience, increasing investment in innovation and further improving efficiency
2020 Outlook
- Underlying revenue growth expected to be in the range 3.5% to 4.5% (around 4.0% to 5.0% reported3)
- Trading profit margin expected to be at or slightly above that achieved in 2019 after absorbing FX headwind, acquisition-related dilution and increase in R&D
- Outlook assumes situation regarding COVID-19 outbreak normalises early in Q2
- Tax rate on trading results expected to be in the range of 18.5% to 19.5%
Roland Diggelmann, Chief Executive Officer of Smith+Nephew, said:
“The improved underlying revenue growth of 4.4% in 2019, the best for several years, has propelled Group sales above $5 billion for the first time in Smith+Nephew's history. All franchises and regions meaningfully contributed to this record.
“At the same time, we've continued investing to drive mid-term growth, both increasing our R&D spend, and also bringing in innovative technologies and expertise through acquisitions.
“For 2020, our focus is on sustaining the positive momentum and our strategic imperatives remain the right path to value creation. Within these, we will focus on delivering a consistent and excellent customer experience, maximising the impact from our increased investment in innovation, and continuing to improve our operational agility and efficiency.”