Re-presented Historical Quarterly Revenue Analysis

RNS Number : 7943T

Smith & Nephew Plc

25 March 2019

 

Re-presented Historical Quarterly Revenue Analysis

25 March 2019

Smith & Nephew plc (LSE:SN, NYSE:SNN) has updated its revenue reporting in line with its previously announced new commercial structure.

From 1 January 2019 the Group will report quarterly revenue for three global franchises of Orthopaedics, Sports Medicine & ENT, and Advanced Wound Management, replacing the previous franchise structure. The Group's revenue reporting by geography is unchanged.

Included within Orthopaedics are the following businesses:

·     Knee Implants

·     Hip Implants

·     Other Reconstruction, including capital sales from robotics and cement (Other Reconstruction was previously reported within Other Surgical Businesses)

·     Trauma (including certain extremities products)

Included within Sports Medicine & ENT are the following businesses:

·     Sports Medicine Joint Repair (including certain extremities products for joint repair previously reported within Trauma & Extremities)

·     Arthroscopic Enabling Technologies

·     ENT (ENT was previously reported within Other Surgical Businesses)

Advanced Wound Management is unchanged, and includes the following businesses:

·     Advanced Wound Care

·     Advanced Wound Bioactives

·     Advanced Wound Devices

Reporting by geography is unchanged, as follows:

·     US

·     Other Established Markets (Australia, Canada, Europe, Japan and New Zealand)

·     Emerging Markets

The updated reporting approach is in line with International Financial Reporting Standard (IFRS) 8 Operating Segments that require companies' segment reporting to reflect the way in which performance is monitored, operating decisions are made and resources are allocated.

In order to assist future comparability with historical data, Smith & Nephew has set out below quarterly and full year revenue under the new structure for 2018 and 2017. There has been no change in total revenue for any period presented. 

Enquiries

Investors
Andrew Swift, Smith & Nephew	[phone]
Media
Charles Reynolds, Smith & Nephew	[phone]
Ben Atwell / Andrew Ward, FTI Consulting	[phone]

Notes

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 2017 period.

Underlying revenue growth is used to compare the revenue in a given period to the comparative period on a like-for-like basis. Underlying revenue growth reconciles to reported revenue growth, the most directly comparable financial measure calculated in accordance with IFRS, by making adjustments for the effect of acquisitions and disposals and the impact of movements in exchange rates (currency impact), as described below.

The effect of acquisitions and disposals measures the impact on revenue from newly acquired business combinations and recent business disposals. This is calculated by comparing the current year, constant currency actual revenue (which include acquisitions and exclude 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.

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 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.

About Smith & Nephew

Smith & Nephew is a portfolio medical technology business with leadership positions in Orthopaedics, Advanced Wound Management and Sports Medicine. Smith & Nephew has more than 16,000 employees and a presence in more than 100 countries. Annual sales in 2018 were $4.9 billion. Smith & Nephew is a member of the FTSE100 (LSE:SN, NYSE:SNN). For more information about Smith & Nephew, please visit our corporate website www.smith-nephew.com and follow us on Twitter, LinkedIn 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: economic and financial conditions in the markets we serve, especially those affecting health care 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 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 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.

Smith & Nephew Re-presented 2018 Results

First Quarter 2018 Consolidated Re-presented Revenue Analysis

		31 March		1 April		Reported		Underlying		Acquisitions		Currency
		2018		2017		growth		Growth(i)		/disposals		impact
Consolidated revenue by franchise		$m		$m		%		%		%		%
Orthopaedics		544		522		4		-		-		4
Knee Implants		259		244		6		2		-		4
Hip Implants		155		152		2		-2		-		4
Other Reconstruction		13		10		34		30		-		4
Trauma		117		116		1		-2		-		3
Sports Medicine & ENT		362		340		6		1		1		4
Sports Medicine Joint Repair		175		155		12		5		2		5
Arthroscopic Enabling Technologies		152		153		-		-5		-		5
ENT		35		32		9		6		-		3
Advanced Wound Management		290		280		4		-2		-		6
Advanced Wound Care		183		170		8		-		-		8
Advanced Wound Bioactives		59		66		-11		-12		-		1
Advanced Wound Devices		48		44		10		2		-		8
Total		1,196		1,142		5		-		-		5
Consolidated revenue by geography
US		545		555		-2		-2		-		-
Other Established Markets(ii)		446		409		9		-2		-		11
Total Established Markets		991		964		3		-2		-		5
Emerging Markets		205		178		15		9		-		6
Total		1,196		1,142		5		-		-		5

(i)   Underlying growth is defined in the Notes on page 2

(ii)   Other Established Markets are Australia, Canada, Europe, Japan and New Zealand

Second Quarter 2018 Consolidated Re-presented Revenue Analysis

		30 June		1 July		Reported		Underlying		Acquisitions		Currency
		2018		2017		growth		Growth(i)		/disposals		impact
Consolidated revenue by franchise		$m		$m		%		%		%		%
Orthopaedics		548		531		3		1		-		2
Knee Implants		258		246		5		3		-		2
Hip Implants		156		150		4		1		-		3
Other Reconstruction		16		13		28		27		-		1
Trauma		118		122		-4		-5		-		1
Sports Medicine & ENT		368		345		7		3		2		2
Sports Medicine Joint Repair		177		159		12		7		3		2
Arthroscopic Enabling Technologies		153		151		1		-1		-		2
ENT		38		35		7		5		-		2
Advanced Wound Management		329		318		4		1		-		3
Advanced Wound Care		187		177		6		2		-		4
Advanced Wound Bioactives		87		92		-5		-6		-		1
Advanced Wound Devices		55		49		12		9		-		3
Total		1,245		1,194		4		2		-		2
Consolidated revenue by geography
US		590		582		1		1		-		-
Other Established Markets(ii)		429		403		6		1		-		5
Total Established Markets		1,019		985		3		1		-		2
Emerging Markets		226		209		8		6		-		2
Total		1,245		1,194		4		2		-		2

(i)   Underlying growth is defined in the Notes on page 2

(ii)   Other Established Markets are Australia, Canada, Europe, Japan and New Zealand

 

Third Quarter 2018 Consolidated Re-presented Revenue Analysis

		29 September			30 September		Reported		Underlying		Acquisitions		Currency
		2018			2017		growth		Growth(i)		/disposals		impact
Consolidated revenue by franchise		$m			$m		%		%		%		%
Orthopaedics		505			494		2		5		-		-3
Knee Implants		232			228		1		4		-		-3
Hip Implants		142			140		2		4		-		-2
Other Reconstruction		13			10		37		43		-		-6
Trauma		118			116		2		3		-		-1
Sports Medicine & ENT		345			336		3		3		2		-2
Sports Medicine Joint Repair		171			157		9		8		3		-2
Arthroscopic Enabling Technologies		138			144		-4		-2		-		-2
ENT		36			35		3		5		-		-2
Advanced Wound Management		319			322		-1		1		-		-2
Advanced Wound Care		184			186		-1		1		-		-2
Advanced Wound Bioactives		81			86		-7		-7		-		-
Advanced Wound Devices		54			50		9		11		-		-2
Total		1,169			1,152		2		3		-		-1
Consolidated revenue by geography
US		569			545		4		4		-		-
Other Established Markets(ii)		393			407		-3		-1		-		-2
Total Established Markets		962			952		1		2		-		-1
Emerging Markets		207			200		4		10		-		-6
Total		1,169			1,152		2		3		-		-1

(i)   Underlying growth is defined in the Notes on page 2

(ii)   Other Established Markets are Australia, Canada, Europe, Japan and New Zealand

 

Fourth Quarter 2018 Consolidated Re-presented Revenue Analysis

		31 December		31 December		Reported		Underlying		Acquisitions		Currency
		2018		2017		growth		Growth(i)		/disposals		impact
Consolidated revenue by franchise		$m		$m		%		%		%		%
Orthopaedics		571		560		2		4		-		-2
Knee Implants		269		266		1		3		-		-2
Hip Implants		160		157		2		4		-		-2
Other Reconstruction		19		13		43		45		-		-2
Trauma		123		124		-1		1		-		-2
Sports Medicine & ENT		386		382		1		2		1		-2
Sports Medicine Joint Repair		193		179		8		8		2		-2
Arthroscopic Enabling Technologies		157		167		-6		-4		-		-2
ENT		36		36		1		3		-		-2
Advanced Wound Management		337		336		-		2		-		-2
Advanced Wound Care		185		187		-1		2		-		-3
Advanced Wound Bioactives		94		97		-3		-3		-		-
Advanced Wound Devices		58		52		11		14		-		-3
Total		1,294		1,278		1		3		-		-2
Consolidated revenue by geography
US		649		624		4		3		1		-
Other Established Markets(ii)		427		439		-3		-		-		-3
Total Established Markets		1,076		1,063		1		2		-		-1
Emerging Markets		218		215		2		8		-		-6
Total		1,294		1,278		1		3		-		-2

(i)   Underlying growth is defined in the Notes on page 2

(ii)   Other Established Markets are Australia, Canada, Europe, Japan and New Zealand

Full Year 2018 Consolidated Re-presented Revenue Analysis

		31 December		31 December		Reported		Underlying		Acquisitions		Currency
		2018		2017		growth		Growth(i)		/disposals		impact
Consolidated revenue by franchise		$m		$m		%		%		%		%
Orthopaedics		2,168		2,107		3		3		-		-
Knee Implants		1,017		984		3		3		-		-
Hip Implants		613		599		2		2		-		-
Other Reconstruction		62		45		36		36		-		-
Trauma		476		479		-		-1		-		1
Sports Medicine & ENT		1,461		1,402		4		2		2		-
Sports Medicine Joint Repair		717		650		10		7		2		1
Arthroscopic Enabling Technologies		600		615		-2		-3		-		1
ENT		144		137		5		5		-		-
Advanced Wound Management		1,275		1,256		2		-		-		2
Advanced Wound Care		740		720		3		1		-		2
Advanced Wound Bioactives		320		342		-6		-6		-		-
Advanced Wound Devices		215		194		10		9		-		1
Total		4,904		4,765		3		2		-		1
Consolidated revenue by geography
US		2,354		2,306		2		1		1		-
Other Established Markets(ii)		1,693		1,658		2		-		-		2
Total Established Markets		4,047		3,964		2		1		-		1
Emerging Markets		857		801		7		8		-		-1
Total		4,904		4,765		3		2		-		1

(i)   Underlying growth is defined in the Notes on page 2

(ii)   Other Established Markets are Australia, Canada, Europe, Japan and New Zealand

 

END

 

 

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