Smith+Nephew Second Quarter and First Half 2021 Results
Starting to recapture pre-COVID momentum; on-track to meet full-year guidance
29 July 2021
Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology business, reports results for the second quarter and first half ended 3 July 2021:
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3 July |
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27 June |
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Reported |
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Underlying |
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2021 |
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2020 |
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growth |
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growth |
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$m |
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$m |
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% |
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% |
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Second Quarter Results1,2 |
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Revenue |
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1,335 |
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901 |
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48.2 |
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40.3 |
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Half Year Results1,2 |
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Revenue |
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2,599 |
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2,035 |
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27.8 |
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21.3 |
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Operating profit/(loss) |
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239 |
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(5) |
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Operating profit/(loss) margin (%) |
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9.2 |
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(0.2) |
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EPS (cents) |
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23.4 |
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11.5 |
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Trading profit |
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459 |
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172 |
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Trading profit margin (%) |
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17.6 |
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8.5 |
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EPSA (cents) |
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38.8 |
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13.4 |
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Q2 Trading Highlights 1,2
· Q2 revenue of $1,335 million (2020: $901 million), up 48.2% on a reported basis and 40.3% on an underlying basis
· All franchises delivered strong growth on 2020 as COVID restrictions eased and levels of elective surgery returned towards normal in many markets
· Relative to Q2 2019, Sports Medicine & ENT and Advanced Wound Management, two of our three franchises, and the US, our largest market, delivered positive underlying revenue growth
H1 Highlights 1,2
· H1 revenue of $2,599 million (2020: $2,035 million), up 27.8% on a reported basis and 21.3% on an underlying basis
· Operating profit of $239 million (2020: operating loss of -$5 million)
· Trading profit of $459 million (2020: $172 million). Trading profit margin of 17.6% (2020: 8.5%) reflects headwinds relative to pre-COVID levels from increased investment, negative leverage from fixed costs and higher logistics/freight costs
· Significant contributions from recently launched products and acquired assets
· Operational improvement programme across manufacturing, warehousing and distribution underway
· Continuing to support employees with roll-out of flexible working programme
· Interim dividend of 14.4¢, in-line with prior year, supported by strong cash generation
Guidance Unchanged
· Targeting underlying revenue growth in range of 10.0% to 13.0%; and
· Trading profit margin in range of 18.0% to 19.0%
· Guidance assumes surgery volumes largely unconstrained by COVID in second half of 2021
Roland Diggelmann, Chief Executive Officer, said:
“Our performance in the first half of 2021 demonstrates the value of our continued investment in our portfolio, our pipeline and our people. This has put us in a strong position as COVID restrictions eased and levels of elective surgery began to return to normal, with new products and recently acquired assets performing well across the portfolio.
“Looking ahead, we believe we are well positioned to deliver on our guidance for this year. We also remain focused on setting ourselves up for sustainable success in the medium-term, prioritising revenue growth from our R&D pipeline, unlocking further value from acquisitions, and driving commercial and operational excellence.”