UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 under the
Securities Exchange Act of 1934
April
30, 2025
Commission
File Number 001-14978
SMITH & NEPHEW plc
(Registrant’s
name)
Building 5, Croxley Park, Hatters Lane
Watford, England, WD18 8YE
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form
20-F ✓
Form 40-F
__
Smith+Nephew First Quarter 2025 Trading Update
Good start to 2025, reinforcing confidence in full year
outlook
30 April 2025
Smith+Nephew (LSE:SN, NYSE:SNN) trading update for the first
quarter ended 29 March 2025.
Highlights1,2
● Q1
revenue $1,407 million (2024: $1,386 million), with underlying
revenue growth of 3.1%, and reported revenue growth of 1.6%
including a -150bps foreign exchange headwind
o Growth
driven by operational improvements and recent product launches and
inclusive of continued headwinds from China and one less trading
day year-on-year
● Orthopaedics
underlying revenue growth 3.2% (reported growth
1.8%)
o Sustained
improved performance in US Hip and Knee Implants and good growth
from Other Reconstruction and Trauma &
Extremities
● Sports
Medicine & ENT underlying revenue growth 2.4% (reported growth
0.9%)
o Strong
performance in Established Markets from Sports Medicine Joint
Repair and solid growth from Arthroscopic Enabling Technologies,
offset by China
● Advanced
Wound Management underlying revenue growth 3.8% (reported growth
2.0%)
o Growth
driven by foams and NPWT, offset by expected
SANTYL◊ volatility
● Full
year 2025 guidance unchanged
o Underlying
revenue growth expected to be around 5.0% (reported growth 5.4%),
and significant trading profit margin expansion to between 19.0%
and 20.0%
o Continued
higher cadence of product launches and clinical evidence
contributing to growth
o Unchanged
outlook includes an expected net impact of $15 to $20 million from
tariffs in 2025, based on announced measures, and
mitigations
Deepak Nath, Chief Executive Officer, said:
"We have delivered a good start to the year with the operational
improvements delivered through the 12-Point Plan driving growth
across our portfolio. Key platforms, such as
CORI◊,
EVOS◊,
REGENETEN◊ and
our Negative Pressure Wound Therapy portfolio all delivered strong
double-digit growth in the quarter, and we are maintaining our high
pace of innovation with a further wave of product launches this
year. Headwinds from China remained an offsetting factor, but we
believe have now passed their peak impact.
"Whilst uncertainties exist around the imposition of tariffs, we
remain confident in our outlook for another year of strong revenue
growth and a significant step-up in trading profit
margin."
Enquiries
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Investors
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Andrew Swift
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+44 (0) 1923 477433
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Smith+Nephew
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Media
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Charles Reynolds
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+44 (0) 1923 477314
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Smith+Nephew
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Susan Gilchrist / Ayesha Bharmal
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+44 (0) 20 7404 5959
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Brunswick
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Analyst conference call
An analyst conference call to discuss Smith+Nephew's first quarter
results will be held at 8.30am BST / 3.30am EDT on Wednesday 30
April 2025, details of which can be found on the Smith+Nephew
website at https://www.smith-nephew.com/en/who-we-are/investors.
Notes
1.
All numbers given are for the quarter ended 29 March 2025 unless
stated otherwise.
2.
Unless otherwise specified as 'reported' all revenue growth
throughout this document is 'underlying' after adjusting for the
effects of currency translation and including the comparative
impact of acquisitions and excluding disposals. All percentages
compare to the equivalent 2024 period.
'Underlying
revenue growth' reconciles to reported revenue growth, the most
directly comparable financial measure calculated in accordance with
IFRS, by making two adjustments, the 'constant currency exchange
effect' and the 'acquisitions and disposals effect', described
below.
The
'constant currency exchange effect' is a measure of the
increase/decrease in revenue resulting from currency movements on
non-US Dollar sales and is measured as the difference between: 1)
the increase/decrease in the current year revenue translated into
US Dollars at the current year average exchange rate and the prior
revenue translated at the prior year rate; and 2) the
increase/decrease being measured by translating current and prior
year revenues into US Dollars using the same exchange
rates.
The
'acquisitions and disposals effect' is the measure of the impact on
revenue from newly acquired material business combinations and
recent material business disposals. This is calculated by comparing
the current year, constant currency actual revenue (which includes
acquisitions and excludes disposals from the relevant date of
completion) with prior year, constant currency actual revenue,
adjusted to include the results of acquisitions and exclude
disposals for the commensurate period in the prior year. These
sales are separately tracked in the Group's internal reporting
systems and are readily identifiable.
Forward calendar
Results for the first half of 2025 will be released on 5 August
2025.
First quarter trading update
Our first quarter revenue was $1,407 million (2024: $1,386
million), reflecting underlying revenue growth of 3.1%. Reported
revenue growth was 1.6%, including -150bps headwind from foreign
exchange. The first quarter 2025 comprised 62 trading days, one
fewer than the same period of 2024.
Consolidated revenue analysis for the first quarter
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29 March
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30 March
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Reported
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Underlying
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Acquisitions
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Currency
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2025
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2024(i)
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growth
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growth(ii)
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/disposals
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impact
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Consolidated revenue by business unit by product
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$m
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$m
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%
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%
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%
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%
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Orthopaedics
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578
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567
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1.8
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3.2
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-
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-1.4
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Knee
Implants
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244
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246
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-0.8
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0.7
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-
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-1.5
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Hip
Implants
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151
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155
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-2.9
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-1.2
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-
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-1.7
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Other Reconstruction(iii)
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29
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20
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44.4
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46.6
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-
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-2.2
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Trauma
& Extremities
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154
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146
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5.5
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6.3
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-
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-0.8
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Sports Medicine & ENT
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444
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441
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0.9
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2.4
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-
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-1.5
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Sports
Medicine Joint Repair
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247
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244
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1.3
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2.9
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-
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-1.6
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Arthroscopic
Enabling Technologies
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146
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149
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-1.7
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-0.1
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-
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-1.6
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ENT
(Ear, Nose and Throat)
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51
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48
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6.7
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7.8
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-
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-1.1
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Advanced Wound Management
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385
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378
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2.0
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3.8
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-
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-1.8
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Advanced
Wound Care
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173
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174
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-0.2
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2.5
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-
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-2.7
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Advanced
Wound Bioactives
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120
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123
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-2.2
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-2.0
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-
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-0.2
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Advanced
Wound Devices
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92
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81
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13.2
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15.7
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-
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-2.5
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Total
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1,407
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1,386
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1.6
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3.1
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-
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-1.5
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Consolidated revenue by geography
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US
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759
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733
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3.6
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3.6
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-
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-
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Other Established Markets(iv)
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427
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420
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1.8
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5.0
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-
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-3.2
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Total Established Markets
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1,186
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1,153
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2.9
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4.1
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-
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-1.2
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Emerging
Markets
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221
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233
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-5.2
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-1.7
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-
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-3.5
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Total
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1,407
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1,386
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1.6
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3.1
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-
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-1.5
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(i)
Restated for reclassification of robotics consumables revenue from
Other Reconstruction to Knee and Hip implants
(ii)
Underlying growth is defined in Note 2 on page 2
(iii)
Other Reconstruction includes robotics capital sales and bone
cement
(iv)
Other Established Markets are Europe, Japan, Australia, Canada and
New Zealand
The good momentum across the portfolio was driven by operational
improvements delivered through the 12-Point Plan, such as bringing
product supply up to industry standards, as well as the successful
commercial launches of recent innovations. In Orthopaedics, this
included new hip and shoulder implant systems and new applications
in surgical robotics. In Sports Medicine, growth was driven by
expansion of our biological healing business and new products in
foot and ankle repair. In Advanced Wound Management, we benefitted
from the early stages of our next-generation foam platform and
recent launches in Negative Pressure Wound Therapy. All of these
new products are expected to have multi-year growth runways ahead
of them and we have an exciting pipeline of further launches and
line extensions underway or planned in 2025.
China continued to be a headwind in the quarter, as expected. We
believe we are now past the peak impact and expect to lap Sports
Medicine Joint Repair VBP during the second quarter. The additional
headwind from the extension of VBP into Arthroscopic Enabling
Technologies is still expected in the second half of 2025. First
quarter Group underlying revenue growth excluding China was
5.5% (reported growth 3.9%).
Geographically, Established Markets delivered underlying revenue
growth of 4.1% (reported growth 2.9%). Underlying revenue
growth was 3.6% in the US (reported growth 3.6%) and 5.0% in
Other Established Markets (reported growth 1.8%). The Emerging
Markets underlying revenue decline of -1.7% (reported
decline -5.2%) reflected the headwinds from China. Emerging
Markets underlying revenue growth excluding China was 14.7%
(reported growth 9.8%).
Orthopaedics
Our Orthopaedics business unit delivered underlying revenue
growth of 3.2% (reported growth 1.8%) in the quarter. Underlying
revenue growth excluding China was 5.1% (reported growth
3.6%).
As stated with our full year results in February, we have changed
our reporting practice around robotics to be more in line with
industry peers. As of this quarter, robotics consumables sales are
now recorded under the procedure where they are used, while capital
and services revenue remain in Other Reconstruction. Growth rates
are all on a comparable basis.
Knee Implants underlying
revenue growth was 0.7% (reported decline -0.8%)
and Hip
Implants underlying
revenue decline was -1.2% (reported decline -2.9%), with both
reflecting the headwind from China. The Q1 performance was driven
by the JOURNEY
II◊ Knee
System and our cementless and revision systems and the
POLAR3◊ Total
Hip Solution.
In the US, underlying and reported revenue growth was 0.9% for Knee
Implants and 2.0% for Hip Implants. After adjusting for the two
extra trading days in the fourth quarter and one fewer trading day
in the first quarter, our US reconstruction business sustained the
improved performance of the previous quarter with adjusted
underlying revenue growth of 2.5% in Knee Implants and 3.6% in Hip
Implants.
The new CATALYSTEM◊ Primary
Hip System is being well-received, and we continued to expand the
US launch during the quarter. CATALYSTEM is designed to address the
evolving demands of primary hip surgery, including the increased
adoption of anterior approach procedures.
In April we received US
Food and Drug Administration (FDA) 510(k)
clearance for new LEGION◊ Medial
Stabilized inserts, addressing a fast-growing category of inserts
now used in more than 30% of US knee replacements. Designed for use
with our CONCELOC◊ Technology
and robotics-assisted CORI Surgical System,
LEGION◊ Medial
Stabilized inserts also address the major market trends of
cementless fixation and robotics.
During the quarter the latest annual report from the Australian
Orthopaedic Association National Joint Replacement Registry
(AOANJRR) highlighted the exceptional performance of our
proprietary OXINIUM◊ Technology
on highly cross-linked polyethylene. The data indicates that this
combination has the highest survivorship rate (94.1%) among all
bearing combinations over a 20-year period for total hip
arthroplasty (THA), corroborating similar findings in other
national registries.
Other Reconstruction underlying
revenue growth was 46.6% (reported growth 44.4%), including strong
growth from our CORI Surgical System. We are benefitting from
CORI's unique features and versatility, including
supporting revision knee procedures, a first-of-its-kind digital
tensioner for robotics-assisted knee surgery for soft tissue
balancing and offering both burr and saw cutting options.
The new
CORIOGRAPH◊ Pre-Operative
Planning and Modelling Services for CORI, which make it the only
orthopaedic robotic-assisted system to offer intraoperative
image-free and image-based registration for knee implants, is being
well received by customers.
Trauma & Extremities underlying
revenue growth was 6.3% (reported growth 5.5%), driven
by the EVOS Plating System. We saw strong demand for the new
AETOS◊ Shoulder
System following its launch in the US last year, competitive
account conversions through the new TOTAL
ANKLE◊ Patient-Matched
Guides, and the LEOS◊ Plating
System is also on a promising trajectory.
Sports Medicine & ENT
Our Sports Medicine &
ENT business
unit delivered underlying revenue growth of 2.4% (reported growth
0.9%) in the quarter. Underlying revenue growth was 7.8% (reported
growth 6.1%) excluding China VBP impact.
Sports Medicine Joint Repair underlying
revenue growth was 2.9% (reported growth 1.3%). Double-digit growth
outside of China was led by our shoulder
repair portfolio, including double-digit growth from our REGENETEN
Bioinductive Implant. We
also saw good momentum from new product launches including the
Q-FIX◊ KNOTLESS
All-Suture Anchor and our developing foot and ankle repair
business.
We have added further to the growing REGENETEN evidence base with
the publication in April of a randomised controlled trial (RCT) of
medium and large full-thickness rotator cuff repairs augmented with
the REGENETEN Bioinductive Implant that demonstrated significantly
lower re-tear rates, compared with repair alone, at 2-year
follow-up.
Arthroscopic Enabling Technologies saw
an underlying revenue decline of -0.1% (reported decline -1.7%).
Performance reflects headwinds in China where the sector is
preparing for an expected additional VBP process on mechanical
resection blades and COBLATION◊ wands
in the second half of 2025. Outside of China growth remained solid
with a good quarter in COBLATION and across video, patient
positioning and fluid management.
Smith+Nephew has submitted to the FDA a traditional 510(k) for a
technology called the TESSA◊ Spatial
Surgery System. If cleared by the FDA, TESSA (Tracking Enabled
Spatial Surgery Assistant) would combine a real-time,
tracking-enabled device. By using video processing and augmented
reality guidance, TESSA would assist a surgeon in making anterior
cruciate ligament reconstruction (ACLR) femoral tunnel decisions by
navigating an operative plan. TESSA
was available for surgeons to view at the American Academy of
Orthopaedic Surgeons (AAOS) Annual Meeting in
March.
ENT underlying
revenue growth was 7.8% (reported growth 6.7%) led by our tonsil
and adenoid business utilising our HALO◊ Wand
for the COBLATION Intracapsular Tonsillectomy (CIT) technique. We
continue to invest behind the recently launched
ARIS◊ COBLATION
Turbinate Reduction Wand which provides a minimally invasive way to
reduce hypertrophic turbinates, a condition that requires 350,000
procedures per annum in the US, with launches in Europe and
Emerging Markets.
Advanced Wound Management
Advanced Wound Management underlying
revenue growth was 3.8% (reported growth 2.0%).
Advanced Wound Care underlying
revenue growth was 2.5% (reported decline -0.2%), with strong
growth from our foam and films portfolios offset by negative growth
in infection management and skin care. We are in the early stages
of launching ALLEVYN◊ Ag+
SURGICAL into the US, a new antimicrobial silver dressing which
adds to the established ALLEVYN family of foam dressings. ALLEVYN
Ag+ SURGICAL dressing features new ComfortSTAY◊ Technology
for gentle silicone adhesion and HighFLEX◊ Technology
to provide flexibility and comfort during patient
movement.
Advanced Wound Bioactives saw
an underlying revenue decline of -2.0% (reported decline -2.2%).
Performance reflected the typical quarterly volatility in the
category with strong double-digit growth in skin substitutes
following the launch last year of GRAFIX◊ PLUS offset by the expected slower quarter
from SANTYL◊ reflecting stocking patterns following the
strong finish to 2024.
Advanced Wound Devices underlying
revenue growth was 15.7% (reported growth 13.2%) with double-digit
growth from both our traditional and single-use NPWT portfolios and
good growth from the LEAF◊ Patient
Monitoring System.
Outlook
Our full year guidance for 2025 is unchanged as we target another
year of strong revenue growth and a significant step-up in trading
profit margin, notwithstanding the uncertainties around the
imposition of tariffs.
We expect underlying revenue growth to be around 5% (around
5.4% based on exchange rates prevailing on 25 April
2025).
Full year trading profit margin is expected to be in the range of
19.0% to 20.0%, with margin stronger in the second half than the
first as impact of China headwinds reduce and operational savings
are delivered.
The tariff situation remains dynamic. Just
over half our revenues are in the US and two thirds of the products
we sell within the US are manufactured in-market. Our other
manufacturing sites are in Costa
Rica, UK, Malaysia, China and Switzerland. We are working to
mitigate tariff impacts from products and raw materials imported
into the US, including leveraging our global
manufacturing network in terms of mix and supply routes. The
unchanged outlook
includes an expected net impact of around $15 to $20 million from
tariffs in 2025, based on announced measures, and
mitigations.
We continue to expect to drive further margin expansion beyond 2025
through continued momentum and efficiency gains.
About Smith+Nephew
Smith+Nephew is a portfolio medical technology business focused on
the repair, regeneration and replacement of soft and hard tissue.
We exist to restore people's bodies and their self-belief by using
technology to take the limits off living. We call this purpose
'Life Unlimited'. Our 17,000 employees deliver this mission every
day, making a difference to patients' lives through the excellence
of our product portfolio, and the invention and application of new
technologies across our three global business units of
Orthopaedics, Sports Medicine & ENT and Advanced Wound
Management.
Founded in Hull, UK, in 1856, we now operate in around 100
countries, and generated annual sales of $5.8 billion in 2024.
Smith+Nephew is a constituent of the FTSE100 (LSE:SN, NYSE:SNN).
The terms 'Group' and 'Smith+Nephew' are used to refer to Smith
& Nephew plc and its consolidated subsidiaries, unless the
context requires otherwise.
For more information about Smith+Nephew, please
visit www.smith-nephew.com and
follow us on X, LinkedIn, Instagram or Facebook.
Forward-looking Statements
This document may contain forward-looking statements that may or
may not prove accurate. For example, statements regarding expected
revenue growth and trading profit margins, market trends and our
product pipeline are forward-looking statements. Phrases such as
"aim", "plan", "intend", "anticipate", "well-placed", "believe",
"estimate", "expect", "target", "consider" and similar expressions
are generally intended to identify forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause actual
results to differ materially from what is expressed or implied by
the statements. For Smith+Nephew, these factors include: conflicts
in Europe and the Middle East, economic and financial conditions in
the markets we serve, especially those affecting healthcare
providers, payers and customers; price levels for established and
innovative medical devices; developments in medical technology;
regulatory approvals, reimbursement decisions or other government
actions; product defects or recalls or other problems with quality
management systems or failure to comply with related regulations;
litigation relating to patent or other claims; legal and financial
compliance risks and related investigative, remedial or enforcement
actions; disruption to our supply chain or operations or those of
our suppliers; competition for qualified personnel; strategic
actions, including acquisitions and disposals, our success in
performing due diligence, valuing and integrating acquired
businesses; disruption that may result from transactions or other
changes we make in our business plans or organisation to adapt to
market developments; relationships with healthcare professionals;
reliance on information technology and cybersecurity; disruptions
due to natural disasters, weather and climate change related
events; changes in customer and other stakeholder sustainability
expectations; changes in taxation regulations; effects of foreign
exchange volatility; and numerous other matters that affect us or
our markets, including those of a political, economic, business,
competitive or reputational nature. 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
20-F, which is available on the SEC's website at www. sec.gov, for
a discussion of certain of these factors. Any forward-looking
statement is based on information available to Smith+Nephew as of
the date of the statement. All written or oral forward-looking
statements attributable to Smith+Nephew are qualified by this
caution. Smith+Nephew does not undertake any obligation to update
or revise any forward-looking statement to reflect any change in
circumstances or in Smith+Nephew's expectations.
◊ Trademark
of Smith+Nephew. Certain marks registered in US Patent and
Trademark Office.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Smith & Nephew plc
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(Registrant)
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Date:
April 30, 2025
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By:
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/s/
Helen Barraclough
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Helen
Barraclough
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Company
Secretary
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