Coronavirus Update

Smith & Nephew - Fourth Quarter and Full Year 2019 Results

This content has been sourced from: https://www.investegate.co.uk/smith---nephew-plc/r...

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

Trading2

 

 

31 Dec

 

31 Dec

 

Reported

 

31 Dec

 

31 Dec

 

Underlying

 

 

2019

 

2018

 

growth

 

2019

 

2018

 

growth

 

 

$m

 

$m

 

%

 

$m

 

$m

 

%

Fourth Quarter Results1

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 1,407

 

1,294

 

 8.7

 

 1,407

 

1,294

 

 5.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Full Year Results1

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 5,138

 

4,904

 

 4.8

 

 5,138

 

4,904

 

 4.4

Operating/trading profit

 

 815

 

863

 

 

 

 1,169

 

1,123

 

 

Operating/trading profit margin (%)

 

 15.9

 

17.6

 

 

 

 22.8

 

22.9

 

 

Cash generated from operations/trading cash flow

 

 1,370

 

1,108

 

 

 

 970

 

951

 

 

EPS/ EPSA (cents)

 

 68.6

 

76.0

 

 

 

 102.2

 

100.9

 

 


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."