Smith & Nephew Interim Results - delivering across all our businesses
as Q2 revenues reach USD1 billion
7 August 2008
Smith & Nephew plc (LSE: SN, NYSE: SNN), the global medical technology
business, announces its results for the second quarter and first half
ended 28 June 2008.
3 months* to 6 months** to
28 June 30 June underlying 28 June 30 June underlying
2008 2007 increase 2008 2007 increase
USDm USDm % USDm USDm %
Revenue1 1,000 813 8 1,911 1,557 5
Trading profit2 198 167 8 380 315 7
Operating profit2 6 174 148 316 275Trading margin3
19.8 20.5 5 bps 19.9 20.2 40 bps
EPSA (cents)4 14.0 12.4 26.8 23.6
EPS (cents)6 11.6 11.0 20.9 20.7
Business Unit Revenue1
Orthopaedic
- Reconstruction 396 291 8 773 553 5
- Trauma & CT 171 150 5 322 286 3
Endoscopy 205 178 10 399 355 7
Advanced Wound
Management 228 194 9 417 363 6
* Q2 2008 comprises 64 trading days (2007 - 63 trading days)
** H1 2008 comprises 126 trading days (2007 - 127 trading days)
Q2 Commentary
- Reported revenue up 23% to USD1 billion, underlying growth up 8% (10%
excluding Plus impact5)
- Reported trading profit USD198 million up 19%
- EPSA up by 13% to 14.0 cents
- Orthopaedic Reconstruction achieved revenue growth of 8% (11%
excluding Plus impact) with strong contributions from both hip and
knee revenues
- Orthopaedic Trauma improved with 5% revenue growth (10% excluding
Plus impact). US fixation revenues improved as management actions
started to deliver benefits
- Endoscopy returned to double digit revenue growth
- Advanced Wound Management outperformed the market globally and
gained traction with Negative Pressure Wound Therapy
- Plus Orthopedics sales practices impact confirmed, management
focused on realising acquisition benefits
Commenting on the second quarter, David Illingworth, Chief Executive of
Smith & Nephew, said:"We have generated quarterly revenues of USD1 billion
for the first time,
as a result of a very solid performance across all of our businesses.
In Reconstruction we have seen good growth in both our hip and knee
product lines; in Trauma the actions we have taken in sales management
have begun to pay off; Endoscopy has delivered double digit revenue
growth and in Advanced Wound Management we have outperformed the
market. We are confirming our guidance for the full year and we believe
that the long term outlook for our business is excellent".
Analyst presentation
An analyst presentation and conference call to discuss Smith & Nephew's
second quarter results will be held at 12.30pm BST /7.30am EST today,
Thursday 7 August. This will be broadcast live on the company's
website and will be available on demand shortly following the close of
the call at http://www.smith-nephew.com/Q208. A podcast will also be
available at the same address. If interested parties are unable to
connect to the web, a listen-only service is available by calling +44
(0)20 7806 1957 in the UK or +1 (718) 354 1388 in the US. Analysts
should contact Samantha Hardy on +44 (0)20 7960 2257 or by email at
samantha.hardy@smith-nephew.com for conference details.
Notes
1 Unless otherwise 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.
3 The underlying trading profit margin is the increase in trading
profit margin after adjusting for the effects of currency translation
and acquisitions. Unless specified as "reported" all trading profit
margin increases throughout this document are underlying.
4 Adjusted earnings per ordinary share ("EPSA") growth is as reported,
not underlying, and is stated before restructuring and
rationalisation costs, acquisition related costs, amortisation of
acquisition intangibles and taxation thereon. See note 2 to the
financial statements.
5 Adjusted for the impact of Plus sales lost due to unacceptable sales
practices in parts of Europe.
6 Operating profit for the comparative 3 months and 6 months ended 30
June 2007 have been adjusted for the finalisation of IFRS 3
acquisition accounting for Plus and BlueSky. See note 1 to the
financial statements.
7 All numbers given are for the quarter ended 28 June 2008 unless
stated otherwise.
Enquiries
Investors
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
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