London, UK--(Marketwire - February 7, 2008) - Smith & Nephew 2007 Preliminary Results
"Another quarter of sustained growth completing a good year. Margin improvement
on track."
7 February 2008
Smith & Nephew plc (LSE: SN, NYSE: SNN), the global medical technology business,
announces its results for the fourth quarter ended 31 December 2007.
3 months to 31 December 07
$m underlying reported
increase % increase/
(decrease)
%
Revenue 1 967 8 25
Operating profit 2 154 (2)
Trading profit 2 222 14 21
EPS (cents) 3 11.1 (26)
EPSA (cents) 4 16.6 10
Business Unit Revenue 1
Orthopaedic - Reconstruction 374 11 49
- Trauma & CT 176 9 21
Endoscopy 201 7 10
Advanced Wound Management 216 4 13
12 months to 31 December 07
$m underlying reported
increase % increase/
(decrease)
%
Revenue 1 3,369 10 21
Operating profit 2 493 (8)
Trading profit 2 706 17 24
EPS (cents) 3 34.2 (57)
EPSA (cents) 4 52.0 15
Business Unit Revenue 1
Orthopaedic - Reconstruction 1,240 13 35
- Trauma & CT 618 13 20
Endoscopy 732 10 13
Advanced Wound Management 779 5 12
Full Year Highlights
- Group revenue of $3.4 billion, double digit revenue growth for the
year
- Trading profit at $706 million up 17%
- Over 1% margin improvement delivered by Earnings Improvement
Programme - programme firmly on track
- EPSA increased 15% to 52.0c
- Orthopaedic Reconstruction revenue growth of 13% leads the market,
for the 5th consecutive year
- Orthopaedic Trauma and Clinical Therapies revenues up 13% as our
EXOGEN* Ultrasound Bone Healing System outpaces the market
- Investment outside the US drives Endoscopy revenues up 10%
- Advanced Wound Management trading margin up 120 basis points in
response to restructuring
- Second interim dividend up 10% to 7.38c per share
Q4 Highlights
- Orthopaedic Reconstruction delivers above market global growth
for the 7th consecutive quarter
- US BHR* System momentum strong, US knee revenue growth recovers
as salesforce focus delivers
- Endoscopy sustained growth driven by investment outside the US
- Earnings Improvement Programme achieves continued benefits
Commenting on the full year, David Illingworth, Chief Executive of Smith &
Nephew, said;
"Smith & Nephew had a strong 2007 generating double digit revenue growth for the
year. Orthopaedic Reconstruction grew 13%, with good performance in the US in
knees and the BHR System. Additionally, our Endoscopy business grew in double
digits and our Clinical Therapies business grew very substantially ahead of the
market. I am very pleased with the progress of the Earnings Improvement
Programme which is firmly on track. The outlook for 2008 is good as growth
continues across all four divisions and our focus on high growth segments and
new product launches gives us confidence for the future."
Analyst presentation
An analyst presentation to discuss the Company's fourth quarter results will be
held at 12.30pm GMT/ 7.30am EST today, Thursday 7 February. There will be a
live webcast of this presentation on the Smith & Nephew website at
http://www.smith-nephew.com. An on demand replay will be available shortly
following the close of the call at
http://www.smith-nephew.com/Q407. A podcast
will also be available at the same address. A listen-only service is available
by calling +44 (0)20 7806 1955 in the UK or +1 718 354 1389 in the US. Analysts
should contact Samantha Hardy on +44 (0)20 7960 2257 or by email at
samantha.hardy@smith-nephew.com for presentation details.
Notes
1 Unless specified as 'reported', all revenue increases throughout this
document are underlying increases after adjusting for the effects of
currency translation and acquisitions. See note 3 to the financial
statements for a reconciliation of these measures to results reported
under IFRS.
2 A reconciliation from operating profit to trading profit is given in
note 4 to the financial statements. The underlying increase in
trading profit is the increase in trading profit after adjusting for
the effects of currency translation and acquisitions. Unless
specified as 'reported' all trading profit increases throughout this
document are underlying.
3 The EPS for the twelve months in the comparable period included
37.3 cents from the gain on sale of BSN Medical.
4 Adjusted earnings per ordinary share ("EPSA") growth is as reported,
not underlying, and is stated before restructuring and rationalisation
costs, acquisition related costs, the legal settlement with the US
Department of Justice, ("the legal settlement"), amortisation of
acquisition intangibles and taxation thereon, and in 2006 the gain
on the disposal of the joint venture and the related fair value
adjustment. See note 2 to the financial statements.
5 Trading cash flow is cash generated from operations less capital
expenditure but before the Macrotextured settlements, acquisition
related costs, the legal settlement and restructuring costs.
Enquiries
Investors
Adrian Hennah +44 (0) 20 7401 7646
Chief Financial Officer
Smith & Nephew
Liz Hewitt +44 (0) 20 7401 7646
Group Director Corporate Affairs
Smith & Nephew
Media
Jon Coles +44 (0) 20 7404 5959
Justine McIlroy
Brunswick - London
Cindy Leggett-Flynn +1 (212) 333 3810
Brunswick - New York
About Us
Smith & Nephew is a global medical technology business, specialising in
Orthopaedic Reconstruction, Orthopaedic Trauma and Clinical Therapies, Endoscopy
and Advanced Wound Management products. Smith & Nephew is a global leader in
arthroscopy and advanced wound management and is one of the leading global
orthopaedics companies.
Smith & Nephew is dedicated to helping improve people's lives. The Company
prides itself on the strength of its relationships with its surgeons and
professional healthcare customers, with whom its name is synonymous with high
standards of performance, innovation and trust. The Company operates in 32
countries around the world. Annual sales in 2007 were $3.4 billion.
Forward-Looking Statements
This press release contains certain "forward-looking statements" within the
meaning of the US Private Securities Litigation Reform Act of 1995. In
particular, statements regarding expected revenue growth and trading margins
discussed under "Outlook" are forward-looking statements as are discussions of
our product pipeline. These statements, as well as the phrases "aim", "plan",
"intend", "anticipate", "well-placed", "believe", "estimate", "expect",
"target", "consider" and similar expressions, are generally intended to identify
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other important factors (including, but not
limited to, the outcome of litigation, claims and regulatory approvals) that
could cause the actual results, performance or achievements of Smith & Nephew,
or industry results, to differ materially from any future results, performance
or achievements expressed or implied by such forward-looking statements. Please
refer to the documents that Smith & Nephew has filed with the U.S. Securities
and Exchange Commission under the U.S. Securities Exchange Act of 1934, as
amended, including Smith & Nephew's most recent annual report on Form 20F, for a
discussion of certain of these factors.
All forward-looking statements in this press release are based on information
available to Smith & Nephew as of the date hereof. All written or oral
forward-looking statements attributable to Smith & Nephew or any person acting
on behalf of Smith & Nephew are expressly qualified in their entirety by the
foregoing. Smith & Nephew does not undertake any obligation to update or revise
any forward-looking statement contained herein to reflect any change in Smith &
Nephew's expectation with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
* Trademark of Smith & Nephew. Certain marks registered US Patent and Trademark
Office.
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