LONDON -- (Marketwire) -- 07/30/09 --
Smith & Nephew Q2 and Half Year Results - strong profit performance in
challenging markets
30 July 2009
Smith & Nephew plc (LSE: SN, NYSE: SNN), the global medical technology
business, announces its results for the second quarter
ended 27 June 2009.
3 months* to 6 months** to
_______________________ ______________________
27 28 27 28
June June Underlying June June Underlying
2009 2008 change 2009 2008 change
USDm USDm % USDm USDm %
Revenue1 926 1,000 0 1,791 1,911 2
Trading profit2 212 198 17 395 380 15
Operating profit2 189 174 348 316
Trading margin (%) 22.9 19.8 310 bps 22.0 19.9 210 bps
EPSA (cents)3 15.4 14.0 28.5 26.8
EPS (cents) 13.4 11.6 24.5 20.9
Business Unit
revenue1
Orthopaedics 531 567 0 1,039 1,095 2
Endoscopy 187 205 -2 366 399 -1
Advanced Wound
Management 208 228 4 386 417 6
* Q2 2009 comprises 63 trading days (2008 - 64 trading days)
** H1 2009 comprises 124 trading days (2008 - 126 trading days)
Q2 Commentary
- Reported trading profit USD212 million, up 17% underlying
- EPSA increased 10% to 15.4 cents
- Orthopaedics continues to be impacted by deferred procedures
- Endoscopy achieved strong repair product sales off-set by the weak
capital related market
- Advanced Wound Management delivered another good sales and
profit performance
- Trading margin improved 310 basis points to 22.9%
- Interim dividend increased by 10% to 5.46c
Commenting on the second quarter, David Illingworth, Chief Executive of
Smith & Nephew, said:"As a result of the continual improvement in our
operational
efficiency we achieved growth in trading profit of 17% at constant
currency. A good achievement in weaker markets.
Our focus on products for younger more active patients has positioned
us well over several years. In the current environment this market
segment and these products are facing greater challenges. We are
confident that our strategy of market led innovation and high customer
service levels will position us to achieve above market growth in the
future. In the meantime, we are focused on executing our operational
improvement plans and delivering profit growth in these tough markets."
Analyst presentation and conference call
An analyst presentation and conference call to discuss Smith & Nephew's
second quarter results will be held at 9am GMT/4am EST today, 30 July.
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/Q209. 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 8322 2048
in the UK or +1 (866) 432 7175 in the US. Analysts should contact Binti
McEvaddy on +44 (0) 20 7960 2257 or by email at
binti.mcevaddy@smith-nephew.com for conference details.
Notes
1 Unless otherwise specified as 'reported', all revenue
increases/decreases throughout this document are underlying increases/
decreases after adjusting for the effects of currency translation. 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 Adjusted earnings per ordinary share ("EPSA") growth is as
reported, not underlying, and is stated before restructuring and
rationalisation costs, acquisition related costs, amortisation and
impairment of acquisition intangibles and taxation thereon. See note 2
to the financial statements.
4 All numbers given are for the quarter ended 27 June 2009
unless stated otherwise.
Second Quarter Results
Smith & Nephew has again achieved a strong profit
performance reflecting our focus on operational efficiency in the
current challenging market conditions.
We generated revenues of USD926 million, compared to USD1,000 million in
2008. On a reported basis this reflects a 7% adverse currency
movement. In addition, there was one less sales day than in the
comparative period in 2008. Adjusting for this, our underlying revenue
growth was about 1%.
Trading profit in the quarter was USD212 million, representing strong
underlying growth of 17% and the Group trading margin increased by 310
basis points to 22.9%. The margin improvement flows from progress in
our Earnings Improvement Programme ("EIP"), tight cost control and a
weaker comparative period.
The net interest charge was USD11 million.
