Smith & Nephew

Last modified by Asif Farooqui on 2022/07/22 03:12

Contents

Summary
Company Overview
Recent Developments
Financial Highlights
- First Quarter 2022 Result
- Full year 2021 Result
Business Overview
Company History
References

Summary

Smith & Nephew are a leading portfolio medical technology company.
Smith & Nephew products across our three franchises: Advanced Wound Management, Sports Medicine & ENT and Orthopaedics.
The company has manufacturing facilities around the world, including: UK, USA, Germany, Switzerland, Canada, India, China and Costa Rica.
Recently Smith+Nephew opens manufacturing facility in Malaysia to support its orthopaedics business.

Company Overview

Smith & Nephew (NYSE:SNN, LSE:SN) is a global medical technology company. The company is in medical technology business with focused on the repair, regeneration and replacement of soft and hard tissue..¹

Recent Developments

Smith+Nephew introduces smart glasses into the operating room to enable remote technical support for UK surgeons during procedures.²

11 July 2022; mith+Nephew the global medical technology company, today announces a partnership with Rods&Cones to provide smart surgery glasses and digital remote assistance to customers. By providing customers with smart surgery glasses, Smith+Nephew representatives can ‘see’ through the eyes of the surgeon, instrumentalist nurse, or any healthcare professional using them, enabling continuous remote support before, during, and after surgical interventions.

Initially used in the UK to support the NHS and other customers, This solution enables technical support from anywhere in the world. The increased complexity of surgery, advancement of technologies enables a specialist is available remotely.

Smith+Nephew announces first robotic-assisted surgery using its LEGION◊ CONCELOC◊ Cementless Total Knee System³

30 June 2022; Smith+Nephew announces the first robotic-assisted surgery using its LEGION CONCELOC Cementless Total Knee System was performed by Dr. Cyna Khalily, an orthopaedic surgeon specializing in adult reconstructive surgery of the hip and knee in Louisville, KY.

Smith+Nephew offers both total and partial cementless knee implants, and now, a robotic-assisted solution for cementless total knee arthroplasty (TKA) with the CORI◊ Surgical System. The LEGION CONCELOC Cementless Total Knee System addresses the critical elements of the cementless total knee. The asymmetrical keel is designed to provide immediate rotational stability, while the patented 3D printed structure of CONCELOC Advanced Porous Titanium encourages biological ingrowth.

Smith+Nephew opens manufacturing facility in Malaysia to support its orthopaedics business⁴

28 June 2022; Smith+Nephew, opened its new manufacturing facility in Batu Kawan Industrial Park in Penang, Malaysia. The 250,000 square-foot facility, worth more than USD100 million in investment, will primarily support the company’s Orthopaedics business, which is expected to grow strongly in the Asia Pacific region.

Financial Highlights

First Quarter 2022 Result

Smith+Nephew First Quarter 2022 Trading Update⁵

28 April 2022’ Smith+Nephew trading update for the first quarter ended 2 April 2022.

Q1 revenue $1,306 million (2021: $1,264 million) up 3.3% on a reported basis (including -2.6% currency effect) and up 5.9% on an underlying basis
Continued strong growth from Sports Medicine & ENT and Advanced Wound Management and improved performance from Orthopaedics
Sports Medicine & ENT revenue up 8.6% underlying
Advanced Wound Management revenue up 8.0% underlying
Orthopaedics revenue up 2.6% underlying
Established Markets revenue up 4.1% underlying as elective surgery volumes recovered from Omicron impact at the start of the quarter
Emerging Markets revenue up 14.3% underlying, with double-digit growth across India, the Middle East and Africa, and Latin America
Continued progress with new product development programme, including US regulatory clearance for cementless knee software on its robotics-assisted CORI◊ Surgical System
Focused on its Strategy for Growth, including work on productivity and commercial execution

Full year 2021 Result

Group revenue in 2021 was $5,212 million, an increase of 14.3% on a reported basis and an increase of 10.3% on an underlying basis.⁶

The 2021 reported gross profit was $3,669 million. Gross margin improved from 69.4% in 2020 to 70.4% in 2021. This reflects improved operating leverage from revenue growth partially offset by higher input costs, supply chain costs and channel adjustments ahead of China volume-based procurement implementation. The prior year also included the impact of COVID with lower gross margins resulting from factory underutilisation and an increase in inventory provisions.

The reported operating profit for 2021 was $593 million, a 101% increase from the previous year, reflecting improved trading compared to 2020 along with discretionary cost control. Compared to pre-COVID levels, there were headwinds from higher logistics and freight costs, ongoing COVID related negative leverage from fixed costs and the implementation of China volume-based procurement. In addition, Smith & Nephew invested in R&D, bolt-on acquisitions and new product launches.

Basic earnings per share (EPS) was up 17% to 59.8¢ reflecting its improved trading performance. Adjusted earnings per share (EPSA) was up 25% at 80.9¢, reflecting the improved trading performance and the lower tax trading rate.

Cash generated from operations of $1,048 million is after paying out $28 million of acquisition and disposal related items, $108 million of restructuring and rationalisation expenses and $111 million for legal and other items.

Liquidity and capital resources At 31 December 2021, the Group held $1,285 million (2020: $1,751 million) in cash net of bank overdrafts. The Group’s debt facilities comprise a USD $1,000 million corporate bond, EUR term loans totalling $859 million, a $1,000 million revolving credit facility and $1,285 million private placement debt. The Group had available facilities of $4.1 billion at 31 December 2021 of which $3.1 billion was drawn.

Business Overview

Smith & Nephew is a portfolio medical technology business that support the repair, regeneration and replacement of soft and hard tissue..⁷

The company now operate in more than 100 countries worldwide. Smith & Nephew is a constituent of the UK’s FTSE100 and its shares are traded in London and New York. Smith & Nephew has paid a dividend to shareholders on its Ordinary Shares every year since 1937.

The company develop and produce products across its three franchises: Advanced Wound Management, Sports Medicine & ENT and Orthopaedics.

Global Franchise Areas

The company serve customers through three global franchises

Orthopaedics

Orthopaedics includes an innovative range of Hip and Knee Implants used to replace diseased, damaged or worn joints, robotics-assisted enabling technologies that empower surgeons, and Trauma products used to stabilise severe fractures and correct bone deformities.

Sports Medicine & ENT

The company's Sports Medicine and Ear, Nose and Throat (ENT) businesses offer advanced products and instruments used to repair or remove soft tissue.

Advanced Wound Management

The company's Advanced Wound Management portfolio provides a comprehensive set of products to meet broad and complex clinical needs, to help healthcare professionals get CLOSER TO ZERO human and economic consequences of wounds.

Manufacturing

Smith & Nephew has manufacturing facilities around the world, including: UK, USA, Germany, Switzerland, Canada, India, China and Costa Rica.

The company purchase raw materials, components, finished products and packaging materials from key suppliers that the company select through its centralised procurement team.

The company outsource manufacturing where necessary to obtain specialised expertise or where it is possible to gain lower cost without undue risk to intellectual property. The company's suppliers are trained and monitored through on-site assessments and performance audits that include quality, service and delivery.

Key Products

Advanced Wound Management - Recognized global experts across the full spectrum of wound care⁸
Orthopaedic Reconstruction -Joint replacement systems for knees, hips and shoulders
Real Intelligence - Discover how a strategic approach to re-imagine surgery is connecting human insight and surgical experience with digital solutions and a health innovations portfolio to elevate care throughout the care continuum.
Sports Medicine - Minimally invasive surgery techniques, with a specific focus on joint repair.
Trauma & Extremities - Providing class leading trauma internal and external fixation products
Ear, Nose and Throat - Ear, Nose and Throat includes epistaxis, laryngeal and soft palate reduction, septoplasty, turbinate reduction, sinus surgery, and tonsils and adenoids removal.
Terms & Conditions and Warranties - Products - Conditions and Warranties information for Smith & Nephew products.
Material Composition - MRI Safety Information & Parameters.

Research and Development

The company invested $292 million in Research and Development (R&D) in 2019, equivalent to 5.7% of Group revenue.

Company History

Smith+Nephew has a history dating back 160 years to the family enterprise of Thomas James Smith who opened a small pharmacy in Hull, England in 1856. On his death in 1896, his nephew Horatio Nelson Smith took over the management of the business.⁹

During the World War 1 The company was awarded a contract to supply £350,000 of surgical and field dressings, to be delivered in five months.

By the late 1990s, Smith+Nephew had expanded into being a diverse healthcare conglomerate with operations across the globe, including various medical devices, personal care products and traditional and woundcare treatments.

In 1998, Smith+Nephew announced a major restructuring to focus management attention and investment on three business units — wound management, endoscopy and orthopaedics — which offered high growth and margin opportunities.

Smith+Nephew was incorporated and listed on the London Stock Exchange in 1937 and in 1999 the Group was also listed on the New York Stock Exchange.

In 2001, Smith+Nephew became a constituent member of the FTSE-100 index in the UK.

Today, Smith+Nephew is a public limited company incorporated and headquartered in the UK and doing business in many countries around the world.