REG - Smith & Nephew Plc - Smith+Nephew Third Quarter 2025 Trading Report
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RNS Number : 3940G Smith & Nephew Plc 06 November 2025
Smith+Nephew Third Quarter 2025 Trading Report
6 November 2025
Smith+Nephew (LSE:SN, NYSE:SNN) trading update for the third quarter ended 27
September 2025.
Q3 Highlights(1,2)
· Q3 revenue of $1,501 million (Q3 2024: $1,412 million), representing
5.0% underlying revenue growth. Reported growth was 6.3% including 130bps
currency tailwind. There were the same number of trading days as the prior
year
· Orthopaedics underlying revenue growth was 4.1% (reported growth
5.1%), with strong growth from US Hip Implants continuing to offset weaker US
Knee Implants
· Sports Medicine & ENT underlying revenue growth was 5.1%
(reported growth 6.4%), with strong growth outside of China and VBP headwinds
starting to abate
· Advanced Wound Management underlying revenue growth was 6.0%
(reported growth 7.8%), led by double-digit growth in Advanced Wound
Bioactives
· Continued higher cadence of product launches to underpin further
growth
Full Year Outlook: Revenue and Profit Margin Unchanged; Free Cash Flow
Guidance Raised(1,2)
· We continue to expect full-year underlying revenue growth to be
around 5.0% (reported growth around 5.7%), and trading profit margin to expand
to between 19.0% and 20.0%
o Outlook includes an expected net impact of $15 to $20 million from tariffs
in 2025, based on announced measures, and mitigations, as previously stated
· Free cash flow guidance raised to around $750 million (previously
more than $600 million), reflecting strong working capital discipline and
operational efficiency
Share Buyback
· $500 million share buyback completed, reflecting strong cash
generation and balance sheet
Capital Markets Days
· Capital Markets Days for institutional investors and financial
analysts in London and New York (8 and 11 December 2025 respectively)
introducing new strategy and mid-term priorities and financial goals, and
reviewing innovation portfolio
Deepak Nath, Chief Executive Officer, said:
"Our third quarter results again demonstrate how the 12-Point Plan has
improved Smith+Nephew's revenue growth profile, keeping us on track to meet
our full-year outlook for revenue growth and a step-up in trading profit
margin. Additionally, we are pleased to be able to raise our guidance for
improved free cash flow, which we now expect to be around $750 million, a more
than five-fold increase since 2023.
"As we approach the end of the 12-Point Plan our business is undoubtedly in a
better place. We have embedded greater accountability, faster decision making,
better execution, and increased customer focus. New products are demonstrably
driving higher levels of revenue growth, and our pipeline is full of further
exciting innovation."
Enquiries
Investors
Emily Heaven / Cora McCallum +44 (0) 1923 477433
Smith+Nephew
Media
Charles Reynolds +44 (0) 1923 477314
Smith+Nephew
+44 (0) 20 7404 5959
Susan Gilchrist / Ayesha Bharmal
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 EST, details of which are available on the
Smith+Nephew website at https://www.smith-nephew.com/en/who-we-are/investors
(https://www.smith-nephew.com/en/who-we-are/investors) .
Forward Calendar
We are hosting Capital Markets Days for institutional investors and financial
analysts in London and New York on Monday 8 and Thursday 11 December 2025
respectively.
The full year results will be released on 2 March 2026.
Notes
1. All numbers given are for the quarter or nine months ended 27 September
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 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 same exchange 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 2025 Trading Update
Our third quarter revenue was $1,501 million (Q3 2024: $1,412 million),
representing underlying revenue growth of 5.0%. Reported revenue growth was
6.3% including a 130bps foreign exchange tailwind. Q3 2025 comprised 63
trading days, in line with Q3 2024.
Orthopaedics underlying revenue growth was 4.1% (reported growth 5.1%), Sports
Medicine & ENT underlying revenue growth was 5.1% (reported growth 6.4%),
and Advanced Wound Management underlying revenue growth was 6.0% (reported
growth 7.8%).
Underlying revenue growth in our Established Markets was 4.9% (reported growth
6.4%). Within this, in the US we delivered underlying and reported revenue
growth of 5.5%, and in Other Established Markets underlying revenue growth was
3.9% (reported growth 8.0%). Emerging Markets underlying revenue growth was
5.4% (reported growth 5.9%).
New Product Launches
Innovation has been a major contributor in our transformation to a higher
growth business, with more than half of our revenue growth consistently coming
from products launched within the previous five years. We continued to deliver
on our exciting pipeline of new product launches and line extensions in the
third quarter.
In Orthopaedics we launched CORIOGRAPH(◊) Pre-Op Planning and Modeling
Services for total shoulder arthroplasty. This innovative software offers
image-based planning capabilities that enable surgeons to create a
patient-specific plan for shoulder replacement through advanced biomechanical
simulation. This launch completes the CORIOGRAPH Services portfolio which also
includes solutions for knee and hip arthroplasty.
In Sports Medicine we announced the release of the Q-FIX(◊) KNOTLESS
All-Suture Anchor for soft tissue-to-bone fixation indications across multiple
joint spaces including Shoulder, Hip, and Foot & Ankle. This new option
builds on the long-standing success and performance of the best-in-class
anchor fixation strength of the Q-FIX Family.
In Advanced Wound Management we launched the CENTRIO Platelet-Rich-Plasma
(PRP) System, a biodynamic hematogel derived from a patient's own platelets
and plasma that, once applied, may assist the natural healing process by
maintaining a moist wound environment. CENTRIO PRP System can help manage
chronic exuding wounds including diabetic foot ulcers (DFUs), venous leg
ulcers (VLUs) and pressure ulcers.
We also announced further clinical evidence during the quarter, validating the
strength of key products. In Orthopaedics a 2-year randomised controlled trial
demonstrated that the JOURNEY(◊) II Total Knee Arthroplasty (TKA), when
paired with Smith+Nephew's handheld robotic system, resulted in sustained
improvements in clinical outcomes compared to conventional TKA. In Sports
Medicine we announced a Strong Recommendation for the REGENETEN(◊)
Bioinductive Implant in updated Clinical Practice Guidelines for the
Management of Rotator Cuff Injuries from the American Academy of Orthopaedic
Surgeons (AAOS). In Advanced Wound Management new data demonstrated the
pressure injury prevention mechanism of action of our new ALLEVYN(◊)
COMPLETE CARE Foam Dressing.
Consolidated Revenue Analysis for the Third Quarter
27 September 28 September Reported Underlying Acquisitions Currency
2025 2024((i)) growth growth((ii)) /disposals impact
Consolidated revenue by business unit by product $m $m % % % %
Orthopaedics 577 549 5.1 4.1 - 1.0
Knee Implants 235 229 2.6 1.5 - 1.1
Hip Implants 154 146 4.8 3.7 - 1.1
Other Reconstruction((iii)) 29 26 12.4 9.7 - 2.7
Trauma & Extremities 159 148 8.2 7.5 - 0.7
Sports Medicine & ENT 469 441 6.4 5.1 - 1.3
Sports Medicine Joint Repair 255 232 10.0 8.6 - 1.4
Arthroscopic Enabling Technologies 157 154 1.5 0.2 - 1.3
ENT (Ear, Nose and Throat) 57 55 4.8 4.3 - 0.5
Advanced Wound Management 455 422 7.8 6.0 - 1.8
Advanced Wound Care 197 190 3.8 1.1 - 2.7
Advanced Wound Bioactives 158 140 12.5 12.2 - 0.3
Advanced Wound Devices 100 92 8.8 6.7 - 2.1
Total 1,501 1,412 6.3 5.0 - 1.3
Consolidated revenue by geography
US 789 748 5.5 5.5 - -
Other Established Markets((iv)) 447 414 8.0 3.9 - 4.1
Total Established Markets 1,236 1,162 6.4 4.9 - 1.5
Emerging Markets 265 250 5.9 5.4 - 0.5
Total 1,501 1,412 6.3 5.0 - 1.3
(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 cement
(iv) Other Established Markets are Europe, Japan, Australia, Canada and New
Zealand
Orthopaedics
In our Orthopaedics business unit, underlying revenue growth was 4.1%
(reported growth 5.1%).
Knee Implants underlying revenue growth was 1.5% (reported growth 2.6%).
Within this, US revenue declined -2.3% on both an underlying and reported
basis as growth continued to be held back by our ongoing actions to
rationalise our portfolio, as stated previously. While this is the right
strategy for the business, it has led to some volume loss in the process.
Outside the US, Knee Implants delivered underlying revenue growth of 6.2%
(reported growth 8.7%), built upon the improved commercial execution delivered
through the 12-Point Plan.
Hip Implants underlying revenue growth was 3.7% (reported growth 4.8%). Within
this, revenue grew strongly in the US, up 6.3% on both an underlying and
reported basis. The sustained good US performance, which was above market
again, reflects the successful and on-going launch of the new CATALYSTEM(◊)
Primary Hip System. Outside the US, Hip Implants underlying revenue growth was
0.2% (reported growth 2.9%), with a weak quarter in China. We are starting to
expand the CATALYSTEM launch to other markets, including launching in Japan in
the quarter.
Other Reconstruction underlying revenue growth was 9.7% (reported growth
12.4%) driven by sales of our robotics-assisted CORI(◊) Surgical System,
including placements in Ambulatory Surgery Centers (ASCs) and Teaching
Institutes.
Trauma & Extremities underlying revenue growth was 7.5% (reported growth
8.2%), an acceleration in performance over the first half of the year. We
delivered strong growth from our EVOS(◊) Plating System, our limb
restoration business, and from the AETOS(◊) Shoulder System as we continue
to expand its launch in the US. Our new TRIGEN(◊) MAX Tibia nailing system
is being well received following its launch in the first half of the year.
Sports Medicine & ENT
Our Sports Medicine & ENT business unit delivered underlying revenue
growth of 5.1% (reported growth 6.4%). Underlying revenue growth was 8.9%
excluding China (reported growth ex-China 10.2%). The China headwind is
reducing as we lap the start of implementation of Volume Based Procurement
(VBP) in Sports Medicine Joint Repair. VBPs in Arthroscopic Enabling
Technologies and ENT are still to come, but we expect the headwinds to be much
smaller given the relative size of the businesses. We have taken actions to
manage our inventory ahead of implementation.
Sports Medicine Joint Repair underlying revenue growth was 8.6% (reported
growth 10.0%), including the VBP impact. Underlying revenue growth outside of
China was 13.0% (reported growth ex-China 14.4%) driven by double-digit growth
from our REGENETEN(◊) Bioinductive Implant. In October we announced that the
American Medical Association (AMA) CPT Editorial Panel had established
a Category I Current Procedural Terminology (CPT) code for procedures
involving our CARTIHEAL(◊) AGILI-C(◊) Cartilage Repair Implant, effective
January 1, 2027. The Category I CPT code will streamline reimbursement
processes for providers and payers, supporting the integration of the
CARTIHEAL Implant into standard clinical practice. It also reflects the AMA's
recognition of the procedure's clinical efficacy, safety, and widespread
physician adoption.
Arthroscopic Enabling Technologies underlying revenue growth was 0.2%
(reported growth 1.5%). As previously reported, performance reflects headwinds
in China as the sector prepares for a VBP process on mechanical resection
blades and COBLATION(◊) wands. Underlying revenue growth excluding China was
3.9% (reported growth ex-China 5.2%), led by growth in COBLATION and patient
positioning systems that help provide unimpeded access for surgeons during
procedures.
ENT underlying revenue growth 4.3% (reported growth 4.8%). As with last
quarter, performance was driven by our nose portfolio including double-digit
growth from our ARIS(◊) COBLATION turbinates business, while the US tonsils
and adenoids market continued to show volatility during the quarter. The ENT
VBP process is expected in the first half of 2026.
Advanced Wound Management
Our Advanced Wound Management business unit delivered underlying revenue
growth of 6.0% (reported growth 7.8%).
Advanced Wound Care underlying revenue growth was 1.1% (reported growth 3.8%).
Good growth outside the US was offset by some softness in the US ahead of our
ALLEVYN(◊) COMPLETE CARE product launch there in the fourth quarter. Outside
the US our foams portfolio performed well, including tender wins in the Middle
East.
Advanced Wound Bioactives underlying revenue growth was 12.2% (reported growth
12.5%), with double-digit growth from SANTYL(◊). On 31 October 2025, the US
Centers for Medicare & Medicaid Services (CMS) issued the final update
to Medicare reimbursement for skin substitutes in the physician office
setting, which was broadly in line with the initial proposed rate. We continue
to anticipate that this will be a headwind to Advanced Wound Management sales
and have a 25 to 50bps negative impact on Group trading profit margin in 2026.
However, there are still some unknowns, including how it will impact clinical
practice and physician behaviour, which will only become clear after
implementation.
Advanced Wound Devices underlying revenue growth was 6.7% (reported growth
8.8%), with strong growth from our PICO(◊) Single-Use NPWT System, which is
benefitting from targeted initiatives in the surgical setting in the US, and
from our LEAF(◊) Patient Monitoring System for pressure injury prevention.
Share Buyback Completed
The share buyback to return $500 million to shareholders, announced within our
second quarter and half year results, was completed on 7 October 2025.
Full Year 2025 Outlook
We are on-track to meet our full year target of 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 5.7% based on
exchange rates prevailing on 31 October 2025).
Full year trading profit margin is expected to be in the range of 19.0% to
20.0%, a significant step-up year-on-year (2024: 18.1%).
In addition, we are raising our guidance for free cash flow to around $750
million, driven by good working capital discipline, particularly in
Orthopaedics, and operational efficiency over the life of the 12-Point Plan.
This was previously guided to be more than $600 million.
The impact of tariffs for 2025 remains a net headwind of around $15 to $20
million, as previously stated, and will compound further in 2026. We will
continue to work to mitigate the impact.
We continue to expect to drive further margin expansion beyond 2025 through
continued momentum and efficiency gains.
Capital Markets Days
We are hosting Capital Markets Days for institutional investors and financial
analysts in London and New York on Monday 8 and Thursday 11 December 2025
respectively.
The London event will introduce Smith+Nephew's new strategy following the
conclusion of the 12-Point Plan, including mid-term priorities and financial
goals.
The New York event will provide greater detail on Smith+Nephew's innovative
portfolio that will drive the next phase of growth. The event will include
insight from the following Smith+Nephew customers and Key Opinion Leaders:
· Ravi Bashyal, MD, FAAOS, Director of Outpatient Hip and Knee
Replacement Surgery at NorthShore University in Chicago. Dr Bashyal
specialises in robotic minimally invasive hip and knee replacement and was an
early adopter of PICO to manage the risk of surgical site complications. He
has published extensively on reducing surgical site infections and
complications. Dr Bashyal will talk about the impact of surgical site
complications in orthopaedic surgery for the patient, surgeon, and system. He
will also discuss how PICO has enabled him to manage the risk and improve
patient outcomes, and his work to educate other surgeons on complication
reduction, improving the standard of care.
· Anil Ranawat, MD, orthopaedic surgeon at the Hospital for Special
Surgery in New York specialising in sports injuries of the hip, knee, and
shoulder. Dr Ranawat will talk about Smith+Nephew's comprehensive Sports
Medicine product portfolio, including how he uses REGENETEN and CARTIHEAL to
improve patient outcomes and the potential he sees for advanced enabling
technologies, such as Spatial Surgery (including the TESSA(◊) Spatial
Surgery System), to shape the future of arthroscopic surgery.
· Steven Haas, MD, orthopaedic surgeon at the Hospital for Special
Surgery and New York-Presbyterian Hospital in New York City. He is also
Professor of Clinical Orthopaedic Surgery at Weill Cornell Medical College and
currently serves as President of The Knee Society. Dr Haas chaired the Knee
Service at HSS for 18 years. Dr Haas will discuss the rise of robotic-assisted
knee surgery and the increasing transition of procedures from inpatient to
outpatient.
Both events will be led by Chief Executive Officer Deepak Nath, accompanied by
Chief Financial Officer John Rogers and members of the Executive Committee.
Each event will include product demonstrations for those attending in person.
Participants are encouraged to attend both events, either in person or
virtually. In person attendance at these events requires pre-registration via
the investor section of the Smith+Nephew website. The sessions will also be
webcast and the presentations made available via the website.
Consolidated Revenue Analysis for Nine Months to 27 September 2025
27 September 28 September Reported Underlying Acquisitions Currency
2025 2024((i)) growth growth((ii)) /disposals impact
Consolidated revenue by business unit by product $m $m % % % %
Orthopaedics 1,770 1,697 4.3 4.1 - 0.2
Knee Implants 736 722 1.8 1.7 - 0.1
Hip Implants 467 458 2.0 1.9 - 0.1
Other Reconstruction((iii)) 93 70 32.1 30.8 - 1.3
Trauma & Extremities 474 447 6.2 6.0 - 0.2
Sports Medicine & ENT 1,392 1,330 4.7 4.4 - 0.3
Sports Medicine Joint Repair 764 715 6.9 6.6 - 0.3
Arthroscopic Enabling Technologies 464 459 1.1 0.8 - 0.3
ENT (Ear, Nose and Throat) 164 156 5.2 5.1 - 0.1
Advanced Wound Management 1,299 1,212 7.2 6.8 - 0.4
Advanced Wound Care 563 547 2.8 2.0 - 0.8
Advanced Wound Bioactives 442 402 10.1 10.1 - -
Advanced Wound Devices 294 263 12.1 11.5 - 0.6
Total 4,461 4,239 5.3 5.0 - 0.3
Consolidated revenue by geography
US 2,375 2,241 6.0 6.0 - -
Other Established Markets((iv)) 1,344 1,255 7.1 5.4 - 1.7
Total Established Markets 3,719 3,496 6.4 5.8 - 0.6
Emerging Markets 742 743 -0.1 1.2 - -1.3
Total 4,461 4,239 5.3 5.0 - 0.3
(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 cement
(iv) Other Established Markets are Europe, Japan, Australia, Canada and New
Zealand
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 more than 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
(http://www.smith-nephew.com/) and follow us on LinkedIn
(http://www.linkedin.com/company/smith-%26-nephew) , Instagram
(https://www.instagram.com/smithnephewmeded/) , Facebook
(http://www.facebook.com/smithnephewplc) or X
(http://www.twitter.com/smithnephewplc) .
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.
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