Smith & Nephew Plc · LSE:SN.
Smith & Nephew — Q1 2006 Earnings Presentation
15 slides from Smith & Nephew's earnings presentation, 2006
Slide 1: Financial Results Q1 2006
ESP ere 2S smith&nephew © Financial Results Q1 2006
Slide 2: Forward looking statements
Forward looking statements This presentation 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 sta
Slide 3: Chris O'Donnell, Chief Executive
Chris O’Donnell Chief Executive
Slide 4: Business highlights
Business highlights • Group revenue growth of 6% in tougher market conditions • Strongest new product launch programme – LEGION™ and JOURNEY™ knees – ANTHOLOGY™ hip (with BHR™ and EMPERION™ to come) – CALAXO™, hip arthroscopy expansion and CONDOR™ for DOR • More cautious guidance All revenue increas
Slide 5: Peter Hooley, Finance Director
Peter Hooley Finance Director
Slide 6: Financial highlights Q1 2006
Financial highlights Q1 2006 • Dollar reporting • Revenue growth of 6% • EPSA -5% • BSN proceeds $562m, gain $332m All revenue increases are underlying increases, that is after adjusting for the effect of translation into dollars EPSA is stated before the fair value loss made on hedging the proceeds
Slide 7: Trading results Q1 2006
Trading results Q1 2006 First Quarter 2005 2006 $m $m Revenue 628 643 + 2% 6% underlying Trading profit 124 127 + 2% Net interest and finance income 3 4 127 131 Taxation (38) (40) Joint venture 7 - Attributable profit before fair value loss, 96 91 -5% taxation thereon, acquisition amortisation and g
Slide 8: Reconstruction – Q1 2006
Reconstruction – Q1 2006 US 2% Outside US 15% Global 7% Knees 9% Hips 5% • Tougher US market • Management and salesforce restructuring • Strong performances outside US • LEGION™ & JOURNEY™ knees launched • BHR™ FDA decision awaited 8
Slide 9: Trauma – Q1 2006
Trauma – Q1 2006 US 10% Outside US 5% Global 8% Fixation 7% Clinical Therapies 12% • Management and salesforce restructuring • Clinical Therapies reimbursement procedures 9
Slide 10: Endoscopy – Q1 2006
Endoscopy – Q1 2006 US 5% Outside US 10% Global 7% Repair 19% Resection & access 3% Visualisation & DOR 1% Spinal 6% • Strong knee and shoulder repair • CALAXO™ osteoconductive screw • Hip arthroscopy expansion 10
Slide 11: Advanced Wound Management – Q1 2006
Advanced Wound Management – Q1 2006 US ex DERMAGRAFT™ 4% Outside US 2% Global 1% ALLEVYN™ 7% ACTICOAT™ 20% • Refocused US salesforce post DERMAGRAFT™ • Healthcare cost pressures in UK and Germany • ACTICOAT™ Moisture Control – European launch 11
Slide 12: Profitability Q1 2006
Profitability Q1 2006 Revenue Trading Profit Margin $m $m % 2006 Reconstruction 221 57 25.8 Trauma 108 19 17.6 Endoscopy 157 30 19.1 Advanced Wound Management 157 21 13.4 643 127 19.8 2005 Reconstruction 211 57 27.0 Trauma 102 18 17.6 Endoscopy 151 30 19.9 Advanced Wound Management 164 19 11.6 628 1
Slide 13: Cash flow Q1 2006
Cash flow Q1 2006 Q1 2005 Q1 2006 $m $m Trading cash flow 39 47 Rationalisation/Macrotexture (16) (16) Operating cash flow after capex 23 31 Joint venture 11 - Interest and tax (15) (24) Free cash flow 19 7 Disposal - 551 Acquisitions (3) (4) Shares 2 3 Net cash flow 18 557 Currency (2) 20 Opening (
Slide 14: 2006 guidance at Q1
2006 guidance at Q1 • Dollar reporting • Revenue growth: Reconstruction & Trauma = low double digits Endoscopy = just under double digits Wound Management = low single digits • Margin expansion around 1% (½% in Q2) • Trading profit growth in low teens before translational currency • Interest/finance
Slide 15: We are smith&nephew
>i We are smith&nephew