Smith+Nephew Fourth Quarter and Full Year 2022 Results
Exited year with good momentum as we transform to become a consistently higher growth company
21 February 2023
Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology business, reports results for the fourth quarter and full year ended 31 December 2022:
| 31 Dec | 31 Dec | Reported | Underlying | |||||
| 2022 | 2021 | growth | growth | |||||
| $m | $m | % | % | |||||
| Fourth Quarter Results1,2 | ||||||||
| Revenue | 1,365 | 1,346 | 1.4 | 6.8 | ||||
| Full Year Results1,2 | ||||||||
| Revenue | 5,215 | 5,212 | 0.1 | 4.7 | ||||
| Operating profit | 450 | 593 | ||||||
| Operating profit margin (%) | 8.6 | 11.4 | ||||||
| EPS (cents) | 25.5 | 59.8 | ||||||
| Trading profit | 901 | 936 | ||||||
| Trading profit margin (%) | 17.3 | 18.0 | ||||||
| EPSA (cents) | 81.8 | 80.9 |
Q4 Trading Highlights 1,2
· Q4 revenue of $1,365 million (2021: $1,346 million) up 6.8% on an underlying basis (1.4% reported growth after 540bps FX headwind)
· Strongest quarterly underlying revenue growth of 2022 with all franchises and geographies contributing
Full Year Financial Highlights 1,2
· Revenue of $5,215 million (2021: $5,212 million), up 4.7% on an underlying basis (0.1% reported growth after 460bps FX headwind)
· Trading profit of $901 million (2021: $936 million) with 17.3% trading profit margin (2021: 18.0%) reflecting higher inflation ( operating profit $450 million (2021: $593 million))
· Cash generated from operations of $581 million (2021: $1,048 million) with trading cash flow of $444 million (2021: $828 million), primarily due to increased inventory
· EPSA 81.8¢ (2021: 80.9¢), EPS 25.5¢ (2021: 59.8¢)
· $150 million of 2022 share buyback programme completed
· Full year dividend of 37.5¢ per share (2021: 37.5¢ per share)
2022 Strategic Highlights
· Transforming Smith+Nephew with our 12-point plan to improve execution and drive Strategy for Growth, focused on fixing Orthopaedics, improving productivity, and accelerating growth in Advanced Wound Management and Sports Medicine
o Good early progress including reducing overdue orders and improving
order fulfilment
· Continued cadence of new product launches contributing to growth
Outlook 1,2
· For 2023, we are targeting:
o Underlying revenue growth expected in the range of 5.0% to 6.0% (5.0% to 6.0% reported)
o Trading profit margin expected to be at least 17.5%
· Midterm targets updated:
o Targeting 5%+ underlying revenue growth driven by return on innovation investments and execution of 12-point plan; and
o Trading profit margin expansion to at least 20% in 2025 driven by productivity improvements
Deepak Nath, Chief Executive Officer, said:
“We made good progress during 2022 and ended the year in a much stronger position than we started. We continued to outperform in Sports Medicine & ENT and Advanced Wound Management and, even though we are early in our work to fix Orthopaedics, performance improved here too.
“With our 12-point plan, we are fundamentally changing the way Smith+Nephew operates to drive higher growth and improve productivity. It is starting to deliver, and, as we progress through the two-year life of the plan, we expect further operational and financial benefits, including a reduction in inventory levels and cash conversion to return to historic levels. We are benefiting from our increased investment in innovation, with more than 60% of growth in 2022 coming from products launched in the last five years.
“We will continue to face macroeconomic headwinds in 2023. However, I believe the drivers of further growth are in place, including leading technologies across all three franchises and a clear path to improved execution in Orthopaedics. We expect to deliver both faster revenue growth and margin expansion in the coming year, and are setting a solid foundation for our midterm ambitions as we transform to a consistently higher growth company.”
Analyst conference call
An analyst conference call to discuss Smith+Nephew’s fourth quarter and full year results will be held 8.30am GMT / 3.30am EST on 21 February 2023, details of which can be found on the Smith+Nephew website at https://www.smith-nephew.com/en/about-us/investors/financial-resources#quarterly-reporting .
Enquiries
| Investors | |
| Andrew Swift | +44 (0) 1923 477433 |
| Smith+Nephew | |
| Media | |
| Charles Reynolds | +44 (0) 1923 477314 |
| Smith+Nephew | |
| Susan Gilchrist / Ayesha Bharmal | +44 (0) 20 7404 5959 |
| Brunswick |