SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of
1934
November 03, 2022
Commission
File Number 001-14978
SMITH & NEPHEW plc
(Registrant's
name)
Building 5, Croxley Park,
Hatters Lane, Watford, Hertfordshire, WD18 8YE,
England
(Address
of registrant's principal executive offices)
[Indicate
by check mark whether the registrant files or will file
annual
reports
under cover Form 20-F or Form 40-F.]
Form
20-F
X
Form 40-F
---
---
[Indicate
by check mark if the registrant is submitting the Form 6-K
in
paper
as permitted by Regulation S-T Rule 101(b)(1).]
Yes
No X
---
---
[Indicate
by check mark if the registrant is submitting the Form 6-K
in
paper
as permitted by Regulation S-T Rule 101(b)(7).]
Yes
No X
---
---
[Indicate
by check mark whether by furnishing the information
contained
in this
Form, the registrant is also thereby furnishing information to
the
Commission
pursuant to Rule 12g3-2 (b) under the Securities Exchange Act
of
1934.]
Yes
No X
---
---
If
"Yes" is marked, indicate below the file number assigned to
the
registrant
in connection with Rule 12g3-2 (b) : 82- n/a.
Smith+Nephew Third Quarter 2022 Trading Report
3 November 2022
Q3 Highlights1,2
● Q3
revenue of $1,250 million (2021: $1,266 million), representing
underlying revenue growth of 4.8% (600bps FX headwind resulted in
reported decline of -1.2%)
● Orthopaedics
revenue up 2.1%. Excluding China, Orthopaedics grew
5.6%
● Sports
Medicine & ENT up 7.1%, with recent product launches performing
well
● Advanced
Wound Management up 6.0%, maintaining
recent strong
performance
2022 Full Year
Outlook1,2
● Full-year
underlying revenue growth currently expected in middle of
previously guided range of 4.0% to 5.0%
● Unchanged
trading profit margin guidance of around 17.5%
Strategic and Operational Update
● 12-point
plan to improve execution and drive Strategy for Growth underway,
focused on fixing Orthopaedics, improving productivity, and
accelerating growth in Advanced Wound Management and Sports
Medicine
o Teams
and structures embedded and KPIs established
o In
Orthopaedics, improved logistics contributed to a reduction in
overdue orders and improved instrument set utilisation during the
quarter
● Continuing
cadence of new product launches and publication of clinical
evidence
Deepak Nath, Chief Executive Officer, said:
"We delivered 4.8% underlying revenue growth in the third quarter,
with all franchises and geographies contributing, and are on track
to deliver our full year guidance.
"Last quarter we set out our 12-point plan to improve business
performance. We are executing at pace and have recorded a number of
early successes, including reducing backorders and improving
instrument set deployment in Orthopaedics.
"We also continue to deliver innovative new products and build on
the value of our technology. During the quarter we became the first
company to receive FDA approval for robotics-assisted revision knee
surgery, launched a superabsorbent wound dressing, and published
compelling new rotator-cuff repair data for
REGENETEN◊.
"While we are still near the start of the journey, and there is
much more work to be done, I am pleased with our early progress,
and confident that we are on the right track to transform
performance."
Enquiries
|
|
Investors
|
|
Andrew Swift
|
+44 (0) 1923 477433
|
Smith+Nephew
|
|
|
|
Media
|
|
Charles Reynolds
|
+44 (0) 1923 477314
|
Smith+Nephew
|
|
|
|
Susan Gilchrist / Ayesha Bharmal
|
+44 (0) 20 7404 5959
|
Brunswick
|
|
Analyst conference call
A conference call to discuss Smith+Nephew's third quarter results
will be held today at 8.30am GMT / 4.30am EDT, details of which can
be found on the Smith+Nephew website at https://www.smith-nephew.com/results/.
Forward calendar
The full year results will be released on 21 February
2023.
Notes
1.
All numbers given are for the quarter or nine months ended 1
October 2022 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 2021 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
year 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 prior year closing
rate.
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.
Third quarter 2022 trading update
Our third quarter revenue was $1,250 million (2021: $1,266
million), representing underlying revenue growth of 4.8%. A 600bps
foreign exchange headwind, primarily due to the strength of the US
Dollar, resulted in a reported revenue decline of -1.2%. Q3 2022
comprised 63 trading days, in line with the comparable Q3 period in
2021.
All franchises and geographies contributed to the underlying
revenue growth in the quarter.
Orthopaedics revenue was up 2.1% (-3.0% reported), Sports Medicine
& ENT up 7.1%
(0.8% reported), and Advanced
Wound Management up 6.0%
(-1.0% reported).
Revenue growth in our Established Markets was 3.9% (-1.8%
reported). Within this, in the US,
our largest market, we delivered strong 6.0% revenue
growth (6.0%
reported). Other
Established Markets revenue was up 0.4% (-14.3%
reported). Emerging
Markets revenue was up 8.6% (1.4% reported), as the expected
decline in China Orthopaedics discussed below continued to be
offset by strong
growth elsewhere including in India and Latin
America.
Macro factors including shortages of some input materials, such as
semiconductors and resin, and staff shortages in healthcare
systems, remained constraining factors on growth across a number of
segments during the quarter.
Strategic update
In July 2022 we announced a comprehensive 12-point plan to drive
better execution at pace, in order to take the business forward and
deliver on our Strategy for Growth pillars to Strengthen and
Accelerate. This plan is focused on:
● Fixing
Orthopaedics
● Improving
productivity
● Accelerating
growth in Advanced Wound Management and Sports Medicine &
ENT
During the quarter we embedded the teams and structures to drive
this work and established the internal KPIs to monitor progress and
drive accountability.
While we expect the work to deliver the full plan to take two
years, we are making meaningful early progress,
including:
● Improving
logistics and updating our demand and supply planning process to
bring a deeper level of specificity and collaboration between our
operations and commercial teams;
● Reducing
the value of overdue orders in US Orthopaedics by more than 15%
since the peak in the first half of the year;
and
● Moving
Orthopaedics instrument sets to more active customer accounts, with
80% of the first phase completed in the US by quarter
end.
Further work is proceeding across the 12-point plan, and we will
continue to update on progress in future trading
updates.
Delivering innovation
During the quarter we continued to introduce innovative new
products and clinical evidence to drive future growth.
In Orthopaedics, we became the first company to receive FDA 510(k)
clearance for a revision knee indication using a robotics-assisted
platform and completed the first cases on our
CORI◊ Surgical
System. Revisions account for around 10% of all knee procedures in
the US. We also continued the roll-out of our
OR3O◊ Dual
Mobility System for use in primary and revision hip arthroplasty,
launching in Japan.
In Sports Medicine, we announced encouraging evidence supporting
our REGENETEN Bioinductive Implant, which delivered an 86%
reduction in rotator cuff re-tear rates at 12 months in interim
results from a randomised controlled trial.
In Advanced Wound Management, we also introduced
our DURAMAX◊ S
Silicon Super Absorbent Dressing for high exuding wounds, launching
in Europe where superabsorbers are one of the fastest growing
categories of dressings.
Consolidated revenue analysis for the third quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 October
|
|
2 October
|
|
Reported
|
|
Underlying
|
|
Acquisitions
|
|
Currency
|
|
|
|
|
2022
|
|
2021
|
|
growth
|
|
growth(i)
|
|
/disposals
|
|
impact
|
|
|
Consolidated revenue by franchise
|
|
$m
|
|
$m
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
Orthopaedics
|
|
492
|
|
508
|
|
-3.0
|
|
2.1
|
|
-
|
|
-5.1
|
|
|
Knee
Implants
|
|
210
|
|
207
|
|
1.9
|
|
7.4
|
|
-
|
|
-5.5
|
|
|
Hip
Implants
|
|
136
|
|
145
|
|
-6.5
|
|
-1.0
|
|
-
|
|
-5.5
|
|
|
Other Reconstruction(ii)
|
|
18
|
|
20
|
|
-10.5
|
|
-6.0
|
|
-
|
|
-4.5
|
|
|
Trauma
& Extremities
|
|
128
|
|
136
|
|
-5.5
|
|
-1.2
|
|
-
|
|
-4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports Medicine & ENT
|
|
382
|
|
379
|
|
0.8
|
|
7.1
|
|
-
|
|
-6.3
|
|
|
Sports
Medicine Joint Repair
|
|
209
|
|
207
|
|
0.9
|
|
7.5
|
|
-
|
|
-6.6
|
|
|
Arthroscopic
Enabling Technologies
|
|
131
|
|
139
|
|
-5.6
|
|
0.5
|
|
-
|
|
-6.1
|
|
|
ENT
(Ear, Nose and Throat)
|
|
42
|
|
33
|
|
27.8
|
|
32.1
|
|
-
|
|
-4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Wound Management
|
|
376
|
|
379
|
|
-1.0
|
|
6.0
|
|
-
|
|
-7.0
|
|
|
Advanced
Wound Care
|
|
173
|
|
189
|
|
-8.3
|
|
1.6
|
|
-
|
|
-9.9
|
|
|
Advanced
Wound Bioactives
|
|
136
|
|
121
|
|
12.0
|
|
12.7
|
|
-
|
|
-0.7
|
|
|
Advanced
Wound Devices
|
|
67
|
|
69
|
|
-3.4
|
|
5.8
|
|
-
|
|
-9.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
1,250
|
|
1,266
|
|
-1.2
|
|
4.8
|
|
-
|
|
-6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated revenue by geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
671
|
|
633
|
|
6.0
|
|
6.0
|
|
-
|
|
-
|
|
|
Other Established Markets(iii)
|
|
341
|
|
398
|
|
-14.3
|
|
0.4
|
|
-
|
|
-14.7
|
|
|
Total Established Markets
|
|
1,012
|
|
1,031
|
|
-1.8
|
|
3.9
|
|
-
|
|
-5.7
|
|
|
Emerging
Markets
|
|
238
|
|
235
|
|
1.4
|
|
8.6
|
|
-
|
|
-7.2
|
|
|
Total
|
|
1,250
|
|
1,266
|
|
-1.2
|
|
4.8
|
|
-
|
|
-6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
Underlying growth is defined in Note 2 on page 2
(ii)
Other Reconstruction includes robotics capital sales, our joint
reconstruction business and cement
(iii)
Other Established Markets are Europe, Canada, Japan, Australia and
New Zealand
Orthopaedics
In Orthopaedics revenue was up 2.1% (-3.0% reported). Excluding
China, where performance continued to be impacted by the
implementation of the previously disclosed hip
and knee volume-based-procurement (VBP)
programme, Orthopaedics
grew by 5.6% underlying.
Knee Implants grew
7.4% (1.9% reported) and Hip Implants declined -1.0% (-6.5% reported). Knee
Implants grew by 11.1% and Hip Implants by 3.6% in the
US. Our
JOURNEY II◊ and
LEGION◊ REVISION
knee systems both delivered double-digit growth and we are starting
to see the early benefit of our cementless total knee LEGION
CONCELOC◊. We
remain focused on improving overall performance in Hip Implants,
nevertheless our POLAR3◊ Total
Hip Solution, with its class-leading survivorship data, and the
OR3O Dual Mobility Hip System both delivered good growth in the
quarter.
Other Reconstruction revenue
declined -6.0% (-10.5% reported), as raw material supply
constraints continued to impact this segment.
Our installed
base in robotics has now passed 500 units
globally.
Trauma & Extremities declined
-1.2% (-5.5% reported) continuing to reflect our
decision not to participate in the broader roll-out of provincial
trauma tenders in China.
Sports Medicine & ENT
Our Sports Medicine &
ENT franchise delivered
revenue growth of 7.1% (0.8% reported) in the
quarter.
Within this, Sports Medicine Joint
Repair delivered 7.5%
(0.9% reported) revenue growth and Arthroscopic Enabling
Technologies revenue was
up 0.5% (-5.6% reported). We
continue to benefit from our excellent shoulder repair portfolio,
including double-digit growth for REGENETEN. Recent
product launches also performed well, including
the FAST-FIX◊ FLEX
Meniscal Repair System and WEREWOLF FASTSEAL◊ 6.0
Hemostasis Wand.
Revenue from ENT was up 32.1% (27.8% reported)
as procedure
volumes recover from the impact of COVID.
Advanced Wound Management
Our Advanced Wound
Management franchise
delivered revenue growth of 6.0% (-1.0% reported), maintaining
recent strong
performance with growth coming across all regions and product
categories.
Advanced Wound Care revenue
was up 1.6% (-8.3% reported), including good
growth from our infection management and films portfolios and in
Asia-Pacific.
Advanced Wound Bioactives revenue
was up 12.7% (12.0% reported), driven by both our enzymatic
debrider SANTYL◊ and
our skin
substitute portfolio.
Advanced Wound Devices revenue
was up 5.8% (-3.4% reported), with double-digit growth from our
PICO◊ Single
Use Negative Pressure Wound Therapy System being
offset by a slower quarter from the traditional
negative pressure system RENASYS◊ due
to
on-going input material shortages.
2022 Full Year Outlook
With one quarter remaining of 2022, we currently expect our
underlying revenue growth for the full year to be around the middle
of our guided range of
4.0% to 5.0% (around -0.8% to +0.2% on a
reported basis, including a foreign exchange headwind of 480bps
based on exchange rates prevailing on 28 October
2022).
We also continue to expect trading profit margin to be around
17.5%.
We expect the tax rate on trading results for 2022 to be around
18%, subject to any material changes to tax law, or other one-off
items.
Consolidated revenue analysis for nine months to 1 October
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 October
|
|
2 October
|
|
Reported
|
|
Underlying
|
|
Acquisitions
|
|
Currency
|
|
|
|
2022
|
|
2021
|
|
growth
|
|
Growth(i)
|
|
/disposals
|
|
impact
|
|
Consolidated revenue by franchise
|
|
$m
|
|
$m
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Orthopaedics
|
|
1,564
|
|
1,605
|
|
-2.5
|
|
1.2
|
|
-
|
|
-3.7
|
|
Knee
Implants
|
|
665
|
|
644
|
|
3.2
|
|
7.3
|
|
-
|
|
-4.1
|
|
Hip
Implants
|
|
434
|
|
461
|
|
-5.8
|
|
-1.9
|
|
-
|
|
-3.9
|
|
Other Reconstruction(ii)
|
|
61
|
|
67
|
|
-9.0
|
|
-5.5
|
|
-
|
|
-3.5
|
|
Trauma
& Extremities
|
|
404
|
|
433
|
|
-6.6
|
|
-3.7
|
|
-
|
|
-2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports Medicine & ENT
|
|
1,159
|
|
1,143
|
|
1.5
|
|
5.8
|
|
-
|
|
-4.3
|
|
Sports
Medicine Joint Repair
|
|
634
|
|
616
|
|
3.0
|
|
7.6
|
|
-
|
|
-4.6
|
|
Arthroscopic
Enabling Technologies
|
|
412
|
|
432
|
|
-4.6
|
|
-0.3
|
|
-
|
|
-4.3
|
|
ENT
(Ear, Nose and Throat)
|
|
113
|
|
95
|
|
18.9
|
|
21.7
|
|
-
|
|
-2.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Wound Management
|
|
1,127
|
|
1,117
|
|
0.8
|
|
5.9
|
|
-
|
|
-5.1
|
|
Advanced
Wound Care
|
|
533
|
|
550
|
|
-3.1
|
|
4.3
|
|
-
|
|
-7.4
|
|
Advanced
Wound Bioactives
|
|
388
|
|
368
|
|
5.2
|
|
5.8
|
|
-
|
|
-0.6
|
|
Advanced
Wound Devices
|
|
206
|
|
199
|
|
3.5
|
|
10.4
|
|
-
|
|
-6.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
3,850
|
|
3,865
|
|
-0.4
|
|
3.9
|
|
-
|
|
-4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated revenue by geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
2,022
|
|
1,950
|
|
3.7
|
|
3.7
|
|
-
|
|
-
|
|
Other Established Markets(iii)
|
|
1,119
|
|
1,229
|
|
-8.9
|
|
1.9
|
|
-
|
|
-10.8
|
|
Total Established Markets
|
|
3,141
|
|
3,179
|
|
-1.2
|
|
3.0
|
|
-
|
|
-4.2
|
|
Emerging
Markets
|
|
709
|
|
686
|
|
3.5
|
|
8.1
|
|
-
|
|
-4.6
|
|
Total
|
|
3,850
|
|
3,865
|
|
-0.4
|
|
3.9
|
|
-
|
|
-4.3
|
|
(i)
Underlying growth is defined in Note 2 on page 2
(ii)
Other Reconstruction includes robotics capital sales, our joint
reconstruction business and cement
(iii)
Other Established Markets are Europe, Canada, Japan, Australia and
New Zealand
About Smith+Nephew
Smith+Nephew is a portfolio medical technology company that exists
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 18,000 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
franchises of Orthopaedics, Sports Medicine & ENT and Advanced
Wound Management.
Founded in Hull, UK, in 1856, we now operate in more than 100
countries, and generated annual sales of $5.2 billion in 2021.
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 Twitter, 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 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: risks
related to the impact of COVID, such as the depth and longevity of
its impact, government actions and other restrictive measures taken
in response, material delays and cancellations of elective
procedures, reduced procedure capacity at medical facilities,
restricted access for sales representatives to medical facilities,
or our ability to execute business continuity plans as a result of
COVID; economic and financial conditions in the markets we serve,
especially those affecting health care providers, payers and
customers (including, without limitation, as a result of COVID);
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 compliance risks and
related investigative, remedial or enforcement actions; disruption
to our supply chain or operations or those of our suppliers
(including, without limitation, as a result of COVID); competition
for qualified personnel; strategic actions, including acquisitions
and dispositions, 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; 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, 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 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.
Smith
& Nephew Plc
(Registrant)
Date: November
03, 2022
By: /s/
Helen Barraclough
-----------------
Helen
Barraclough
Company
Secretary
Smith and Nephew (PK) (USOTC:SNNUF)
Historical Stock Chart
From Jun 2024 to Jul 2024
Smith and Nephew (PK) (USOTC:SNNUF)
Historical Stock Chart
From Jul 2023 to Jul 2024